COVER PAGE
COVER PAGE - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 05, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-38880 | |
Entity Registrant Name | Whole Earth Brands, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 38-4101973 | |
Entity Address, Address Line One | 125 S. Wacker Drive | |
Entity Address, Address Line Two | Suite 3150 | |
Entity Address, City or Town | Chicago | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60606 | |
City Area Code | 312 | |
Local Phone Number | 840-6000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 38,477,488 | |
Entity Central Index Key | 0001753706 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Trading Symbol | FREE | |
Security Exchange Name | NASDAQ | |
Warrant | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Warrants to purchase one-half of one share of common stock | |
Trading Symbol | FREEW | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 33,579 | $ 16,898 |
Accounts receivable (net of allowances of $940 and $955, respectively) | 72,997 | 56,423 |
Inventories | 193,509 | 111,699 |
Prepaid expenses and other current assets | 20,068 | 5,045 |
Total current assets | 320,153 | 190,065 |
Property, Plant and Equipment, net | 53,860 | 47,285 |
Other Assets | ||
Operating lease right-of-use assets | 21,596 | 12,193 |
Goodwill | 241,154 | 153,537 |
Other intangible assets, net | 271,472 | 184,527 |
Deferred tax assets, net | 2,296 | 2,671 |
Other assets | 8,278 | 6,260 |
Total Assets | 918,809 | 596,538 |
Current Liabilities | ||
Accounts payable | 41,968 | 25,200 |
Accrued expenses and other current liabilities | 26,186 | 29,029 |
Contingent consideration payable | 53,631 | 0 |
Current portion of operating lease liabilities | 6,123 | 3,623 |
Current portion of long-term debt | 3,750 | 7,000 |
Total current liabilities | 131,658 | 64,852 |
Non-Current Liabilities | ||
Long-term debt | 384,070 | 172,662 |
Warrant liabilities | 2,507 | 0 |
Deferred tax liabilities, net | 52,403 | 23,297 |
Operating lease liabilities, less current portion | 19,463 | 11,324 |
Other liabilities | 15,176 | 15,557 |
Total Liabilities | 605,277 | 287,692 |
Commitments and Contingencies (Note 8) | 0 | 0 |
Stockholders’ Equity | ||
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding at September 30, 2021 and December 31, 2020 | 0 | 0 |
Common stock, $0.0001 par value; 220,000,000 shares authorized; 38,477,723 and 38,426,669 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively. | 4 | 4 |
Additional paid-in capital | 331,125 | 325,679 |
Accumulated deficit | (26,043) | (25,442) |
Accumulated other comprehensive income | 8,446 | 8,605 |
Total stockholders’ equity | 313,532 | 308,846 |
Total Liabilities and Stockholders’ Equity | $ 918,809 | $ 596,538 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current Assets | ||
Accounts receivable, allowances | $ 940 | $ 955 |
Stockholders’ Equity | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 220,000,000 | 220,000,000 |
Common stock, shares issued (in shares) | 38,477,723 | 38,426,669 |
Common stock, shares outstanding (in shares) | 38,477,723 | 38,426,669 |
Condensed Consolidated and Comb
Condensed Consolidated and Combined Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2020 | Jun. 25, 2020 | Sep. 30, 2021 | |
Income Statement [Abstract] | |||||
Product revenues, net | $ 128,941 | $ 67,002 | $ 71,480 | $ 128,328 | $ 361,259 |
Cost of goods sold | 85,912 | 48,357 | 51,065 | 77,627 | 241,224 |
Gross profit | 43,029 | 18,645 | 20,415 | 50,701 | 120,035 |
Selling, general and administrative expenses | 24,838 | 14,881 | 16,827 | 43,355 | 85,573 |
Amortization of intangible assets | 4,675 | 2,700 | 2,841 | 4,927 | 13,532 |
Asset impairment charges | 0 | 0 | 0 | 40,600 | 0 |
Restructuring and other expenses | 0 | 0 | 0 | 0 | 4,503 |
Operating income (loss) | 13,516 | 1,064 | 747 | (38,181) | 16,427 |
Change in fair value of warrant liabilities | 2,178 | 0 | 0 | 0 | (425) |
Interest expense, net | (6,553) | (2,045) | (2,161) | (238) | (18,027) |
Loss on extinguishment and debt transaction costs | 0 | 0 | 0 | 0 | (5,513) |
Other income (expense), net | (780) | (170) | (232) | 801 | (280) |
Income (loss) before income taxes | 8,361 | (1,151) | (1,646) | (37,618) | (7,818) |
(Benefit) provision for income taxes | (445) | 1,684 | 1,694 | (3,482) | (8,294) |
Net income (loss) | $ 8,806 | $ (2,835) | $ (3,340) | $ (34,136) | $ 476 |
Net earnings (loss) per share: | |||||
Basic (in dollars per share) | $ 0.23 | $ (0.07) | $ (0.09) | $ 0.01 | |
Diluted (in dollars per share) | $ 0.17 | $ (0.07) | $ (0.09) | $ 0.01 | |
Revenue from Contract with Customer, Product and Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Condensed Consolidated and Co_2
Condensed Consolidated and Combined Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2020 | Jun. 25, 2020 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | |||||
Net income (loss) | $ 8,806 | $ (2,835) | $ (3,340) | $ (34,136) | $ 476 |
Other comprehensive income (loss), net of tax: | |||||
Net change in pension benefit obligations recognized, net of taxes of $(5), $—, $(18), $— and $65 | 202 | 0 | 0 | 318 | 165 |
Foreign currency translation adjustments | (3,599) | 3,130 | 3,145 | (2,286) | (324) |
Total other comprehensive income (loss), net of tax | (3,397) | 3,130 | 3,145 | (1,968) | (159) |
Comprehensive income (loss) | $ 5,409 | $ 295 | $ (195) | $ (36,104) | $ 317 |
Condensed Consolidated and Co_3
Condensed Consolidated and Combined Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2020 | Jun. 25, 2020 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | |||||
Net change in pension benefit obligations recognized, tax | $ (5) | $ 0 | $ 0 | $ 65 | $ (18) |
Condensed Consolidated and Co_4
Condensed Consolidated and Combined Statements of Equity - USD ($) $ in Thousands | Total | Predecessors | Restatement adjustment | Common Stock | Preferred Stock | Additional Paid-in Capital | Additional Paid-in CapitalRestatement adjustment | Accumulated Deficit | Accumulated DeficitRestatement adjustment | Accumulated Other Comprehensive Income | Accumulated Other Comprehensive IncomePredecessors |
Beginning balance at Dec. 31, 2019 | $ 487,750 | $ (8,059) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Funding to Parent, net | (12,262) | ||||||||||
Other comprehensive income (loss), net of tax | (1,836) | ||||||||||
Net income (loss) | (28,655) | ||||||||||
Ending balance at Mar. 31, 2020 | 444,997 | (9,895) | |||||||||
Beginning balance at Dec. 31, 2019 | 487,750 | (8,059) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Other comprehensive income (loss), net of tax | (1,968) | ||||||||||
Net income (loss) | (34,136) | ||||||||||
Ending balance at Jun. 25, 2020 | 233,666 | $ 439,722 | $ 3 | $ 0 | $ 250,366 | $ (16,703) | 0 | $ (10,027) | |||
Ending balance (in shares) at Jun. 25, 2020 | 30,926,669 | 0 | |||||||||
Beginning balance at Mar. 31, 2020 | 444,997 | (9,895) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Funding to Parent, net | 338 | ||||||||||
Other comprehensive income (loss), net of tax | (132) | ||||||||||
Net income (loss) | (5,481) | ||||||||||
Ending balance at Jun. 25, 2020 | 233,666 | 439,722 | $ 3 | $ 0 | 250,366 | (16,703) | 0 | (10,027) | |||
Ending balance (in shares) at Jun. 25, 2020 | 30,926,669 | 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of warrants | 7,895 | 7,895 | |||||||||
Issuance of common stock | 67,105 | $ 1 | 67,104 | ||||||||
Issuance of common stock (shares) | 7,500,000 | ||||||||||
Other comprehensive income (loss), net of tax | 15 | 15 | |||||||||
Net income (loss) | (505) | (505) | |||||||||
Ending balance at Jun. 30, 2020 | 308,176 | $ 4 | $ 0 | 325,365 | (17,208) | 15 | |||||
Ending balance (in shares) at Jun. 30, 2020 | 38,426,669 | 0 | |||||||||
Beginning balance at Jun. 25, 2020 | 233,666 | $ 439,722 | $ 3 | $ 0 | 250,366 | (16,703) | 0 | $ (10,027) | |||
Beginning balance (in shares) at Jun. 25, 2020 | 30,926,669 | 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Other comprehensive income (loss), net of tax | 3,145 | ||||||||||
Net income (loss) | (3,340) | ||||||||||
Ending balance at Sep. 30, 2020 | 307,221 | $ 4 | $ 0 | 324,417 | (20,345) | 3,145 | |||||
Ending balance (in shares) at Sep. 30, 2020 | 38,426,669 | 0 | |||||||||
Beginning balance at Jun. 30, 2020 | 308,176 | $ 4 | $ 0 | 325,365 | (17,208) | 15 | |||||
Beginning balance (in shares) at Jun. 30, 2020 | 38,426,669 | 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Other | (1,250) | (948) | (302) | ||||||||
Other comprehensive income (loss), net of tax | 3,130 | 3,130 | |||||||||
Net income (loss) | (2,835) | (2,835) | |||||||||
Ending balance at Sep. 30, 2020 | 307,221 | $ 4 | $ 0 | 324,417 | (20,345) | 3,145 | |||||
Ending balance (in shares) at Sep. 30, 2020 | 38,426,669 | 0 | |||||||||
Beginning balance at Dec. 31, 2020 | 308,846 | $ (8,139) | $ 4 | $ 0 | 325,679 | $ (7,062) | (25,442) | $ (1,077) | 8,605 | ||
Beginning balance (in shares) at Dec. 31, 2020 | 38,426,669 | 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Transfer of Private Warrants to Public Warrants | 2,502 | 2,502 | |||||||||
Other comprehensive income (loss), net of tax | (2,038) | (2,038) | |||||||||
Net income (loss) | (12,025) | (12,025) | |||||||||
Stock-based compensation | 1,639 | 1,639 | |||||||||
Ending balance at Mar. 31, 2021 | 290,785 | $ 4 | $ 0 | 322,758 | (38,544) | 6,567 | |||||
Ending balance (in shares) at Mar. 31, 2021 | 38,426,669 | 0 | |||||||||
Beginning balance at Dec. 31, 2020 | 308,846 | $ (8,139) | $ 4 | $ 0 | 325,679 | $ (7,062) | (25,442) | $ (1,077) | 8,605 | ||
Beginning balance (in shares) at Dec. 31, 2020 | 38,426,669 | 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Other comprehensive income (loss), net of tax | (159) | ||||||||||
Warrant exercises | $ 1 | 1 | |||||||||
Warrant exercises (in shares) | 50 | ||||||||||
Net income (loss) | $ 476 | ||||||||||
Ending balance at Sep. 30, 2021 | 313,532 | $ 4 | $ 0 | 331,125 | (26,043) | 8,446 | |||||
Ending balance (in shares) at Sep. 30, 2021 | 38,477,723 | 0 | |||||||||
Beginning balance at Mar. 31, 2021 | 290,785 | $ 4 | $ 0 | 322,758 | (38,544) | 6,567 | |||||
Beginning balance (in shares) at Mar. 31, 2021 | 38,426,669 | 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Other comprehensive income (loss), net of tax | 5,276 | 5,276 | |||||||||
Net income (loss) | 3,695 | 3,695 | |||||||||
Stock-based compensation | 2,392 | 2,392 | |||||||||
Net share settlements of stock-based awards (in shares) | 29,090 | ||||||||||
Ending balance at Jun. 30, 2021 | 302,148 | $ 4 | $ 0 | 325,150 | (34,849) | 11,843 | |||||
Ending balance (in shares) at Jun. 30, 2021 | 38,455,759 | 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Transfer of Private Warrants to Public Warrants | 3,555 | 3,555 | |||||||||
Other comprehensive income (loss), net of tax | (3,397) | (3,397) | |||||||||
Net income (loss) | 8,806 | 8,806 | |||||||||
Stock-based compensation | 2,534 | 2,534 | |||||||||
Net share settlements of stock-based awards (in shares) | 21,914 | ||||||||||
Net share settlements of stock-based awards | (115) | (115) | |||||||||
Ending balance at Sep. 30, 2021 | $ 313,532 | $ 4 | $ 0 | $ 331,125 | $ (26,043) | $ 8,446 | |||||
Ending balance (in shares) at Sep. 30, 2021 | 38,477,723 | 0 |
Condensed Consolidated and Co_5
Condensed Consolidated and Combined Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Jun. 25, 2020 | Sep. 30, 2021 | |
Operating activities | |||
Net income (loss) | $ (3,340) | $ (34,136) | $ 476 |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Stock-based compensation | 0 | 0 | 7,191 |
Depreciation | 797 | 1,334 | 3,230 |
Amortization of intangible assets | 2,841 | 4,927 | 13,532 |
Deferred income taxes | (3,490) | (5,578) | 2,210 |
Asset impairment charges | 0 | 40,600 | 0 |
Amortization of inventory fair value adjustments | 8,701 | 0 | (882) |
Non-cash loss on extinguishment of debt | 0 | 0 | 4,435 |
Change in fair value of warrant liabilities | 0 | 0 | 425 |
Changes in current assets and liabilities: | |||
Accounts receivable | (6,535) | 7,726 | (2,452) |
Inventories | (3,679) | 3,576 | (4,200) |
Prepaid expenses and other current assets | (2,516) | 3,330 | (894) |
Accounts payable, accrued liabilities and income taxes | (5,618) | 507 | (16,706) |
Other, net | 124 | (2,378) | 190 |
Net cash provided by (used in) operating activities | (12,715) | 19,908 | 6,555 |
Investing activities | |||
Capital expenditures | (2,139) | (3,532) | (7,076) |
Acquisitions, net of cash acquired | (376,674) | 0 | (190,231) |
Proceeds from the sale of fixed assets | 0 | 0 | 4,257 |
Transfer from trust account | 178,875 | 0 | 0 |
Net cash used in investing activities | (199,938) | (3,532) | (193,050) |
Financing activities | |||
Proceeds from revolving credit facility | 0 | 3,500 | 25,000 |
Repayments of revolving credit facility | 0 | (8,500) | (47,855) |
Long-term borrowings | 140,000 | 0 | 375,000 |
Repayments of long-term borrowings | (1,750) | 0 | (138,376) |
Debt issuance costs | (7,139) | 0 | (11,589) |
Proceeds from sale of common stock and warrants | 75,000 | 0 | 1 |
Tax withholdings related to net share settlements of stock-based awards | 0 | 0 | (115) |
Funding to Parent, net | 0 | (11,924) | 0 |
Net cash provided by (used in) financing activities | 206,111 | (16,924) | 202,066 |
Effect of exchange rate changes on cash and cash equivalents | 88 | 215 | 1,110 |
Net change in cash and cash equivalents | (6,454) | (333) | 16,681 |
Cash and cash equivalents, beginning of period | 55,535 | 10,395 | 16,898 |
Cash and cash equivalents, end of period | 49,081 | 55,535 | 33,579 |
Supplemental disclosure of cash flow information | |||
Interest paid | 1,667 | 798 | 15,627 |
Taxes paid, net of refunds | 1,722 | 2,244 | 3,999 |
Supplemental disclosure of non-cash investing | |||
Non-cash capital expenditures | 0 | 0 | $ 3,796 |
Predecessors | |||
Financing activities | |||
Cash and cash equivalents, beginning of period | $ 10,062 | ||
Cash and cash equivalents, end of period | $ 10,062 |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1: BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Whole Earth Brands, Inc. and its consolidated subsidiaries (“Whole Earth Brands” or the “Company”) is a global industry-leading platform, focused on the “better for you” consumer packaged goods (“CPG”) and ingredients space. The Company has a global platform of branded products and ingredients, focused on the consumer transition towards natural alternatives and clean label products. On June 24, 2020, Act II Global Acquisition Corp., a Cayman Islands exempted company (“Act II”), domesticated into a Delaware corporation (the “Domestication”), and on June 25, 2020 (the “Closing”), consummated the indirect acquisition (the “Business Combination”) of (i) all of the issued and outstanding equity interests of Merisant Company (“Merisant”), Merisant Luxembourg Sarl (“Merisant Luxembourg”), Mafco Worldwide LLC (“Mafco Worldwide”), Mafco Shanghai LLC (“Mafco Shanghai”), EVD Holdings LLC (“EVD Holdings”), and Mafco Deutschland GmbH (together with Merisant, Merisant Luxembourg, Mafco Worldwide, Mafco Shanghai, and EVD Holdings, and their respective direct and indirect subsidiaries, “Merisant and Mafco Worldwide”), and (ii) certain assets and liabilities of Merisant and Mafco Worldwide included in the Transferred Assets and Liabilities (as defined in the Purchase Agreement (as hereafter defined)), from Flavors Holdings Inc. (“Flavors Holdings”), MW Holdings I LLC (“MW Holdings I”), MW Holdings III LLC (“MW Holdings III”), and Mafco Foreign Holdings, Inc. (“Mafco Foreign Holdings,” and together with Flavors Holdings, MW Holdings I, and MW Holdings III, the “Sellers”), pursuant to that certain Purchase Agreement (the “Purchase Agreement”) entered into by and among Act II and the Sellers dated as of December 19, 2019, as amended. In connection with the Domestication, Act II changed its name to “Whole Earth Brands, Inc.” Upon the completion of the Domestication, each of Act II’s then-issued and outstanding ordinary shares converted, on a one-for-one basis, into shares of common stock of Whole Earth Brands. In conjunction with the Business Combination, the Company issued an aggregate of 7,500,000 shares of Whole Earth Brands common stock and 5,263,500 private placement warrants (the “Private Warrants”) exercisable for 2,631,750 shares of Whole Earth Brands common stock to certain investors. On the date of Closing, the Company’s common stock and warrants began trading on The Nasdaq Stock Market under the symbols “FREE” and “FREEW,” respectively. As a result of the Business Combination, for accounting purposes, Act II was deemed to be the acquirer and Mafco Worldwide and Merisant Company were deemed to be the acquired parties and, collectively, the accounting predecessor. The Company’s financial statement presentation includes the combined financial statements of Mafco Worldwide and Merisant Company as the “Predecessor” for periods prior to the completion of the Business Combination and includes Whole Earth Brands, Inc. and its subsidiaries for periods after the Closing (referred to as the “Successor”). Basis of Presentation —The accompanying unaudited consolidated and combined interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial reporting. The balance sheet data as of December 31, 2020 was derived from the audited consolidated financial statements. These unaudited condensed consolidated and combined interim financial statements should be read in conjunction with the Company’s audited consolidated and combined financial statements for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K. In the opinion of management, the financial statements contain all adjustments necessary to state fairly the financial position of the Company as of September 30, 2021 and the results of operations and cash flows for all periods presented. All adjustments reflected in the accompanying unaudited consolidated and combined financial statements, which management believes are necessary to state fairly the financial position, results of operations and cash flows, have been reflected and are of a normal recurring nature. Results of operations for interim periods are not necessarily indicative of results to be expected for the full year. Certain prior year amounts have been reclassified to conform to the current year presentation. Principles of Consolidation —The consolidated and combined financial statements include the accounts of Whole Earth Brands, Inc., and its indirect and wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could differ from these estimates. Recently Adopted Accounting Pronouncements — The Company qualifies as an emerging growth company (an “EGC”) and as such, has elected the extended transition period for complying with certain new or revised accounting pronouncements. During the extended transition period, the Company is not subject to certain new or revised accounting standards applicable to public companies. The accounting pronouncements pending adoption below reflect effective dates for the Company as an EGC with the extended transition period. In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-7, “Compensation - Retirement Benefits (Topic 715).” Under the new guidance, employers are required to present the service cost component of net periodic benefit cost in the same statement of operations caption as other employee compensation costs arising from services rendered during the period. Employers are required to present the other components of the net periodic benefit cost separately from the caption that includes the service costs and outside of any subtotal of operating profit and are required to disclose the caption used to present the other components of net periodic benefit cost, if not presented separately on the statement of operations. The Company adopted ASU 2017-7 effective in the second quarter of 2020. The adoption of this standard did not have an effect on the Company’s historically reported net income (loss) but resulted in a presentation reclassification which increased the Company’s historically reported operating profit by $0.1 million for the six months ended June 25, 2020. New Accounting Standards —In March 2020, the FASB issued ASU 2020-4, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (“LIBOR”) by the end of 2021. The amendments in ASU 2020-4 apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The new standard was effective upon issuance and upon adoption can be applied prospectively to applicable contract modifications made on or before December 31, 2022. The Company is currently evaluating the impact of adopting this standard but does not expect it to have a material impact on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (ASC 740) - Simplifying the Accounting for Income Taxes.” The standard enhances and simplifies various aspects of the income tax accounting guidance. For public entities, the standard is effective for annual periods and interim periods beginning after December 15, 2020. This standard is effective for the Company as an EGC for the fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2019-12 on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20).” The standard modifies certain disclosure requirements for employers that sponsor defined benefit pension and other postretirement benefit plans by removing disclosures that are no longer considered cost beneficial, clarifying specific requirements of disclosures, and adding disclosure requirements identified as relevant. This standard is effective for the Company as an EGC for the fiscal years beginning after December 15, 2021. Early adoption is permitted. The amendments in ASU 2018-14 should be applied retrospectively to each period presented. The Company is currently evaluating the impact of adopting ASU 2018-14 on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326).” The standard requires entities to estimate losses on financial assets measured at amortized cost, including trade receivables, debt securities and loans, using an expected credit loss model. The expected credit loss differs from the previous incurred losses model primarily in that the loss recognition threshold of “probable” has been eliminated and that expected loss should consider reasonable and supportable forecasts in addition to the previously considered past events and current conditions. Additionally, the guidance requires additional disclosures related to the further disaggregation of information related to the credit quality of financial assets by year of the asset’s origination for as many as five years. Entities must apply the standard provision as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. This standard is effective for the Company as an EGC for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. The Company is currently evaluating the impact of adopting ASU 2016-13 on its consolidated financial statements. Restructuring and Employee Termination Benefits —During 2020, the Company adopted restructuring plans to streamline processes and realize cost savings by consolidating facilities and eliminating various positions in operations and general and administrative areas. In connection with the restructuring plans, the Company recognized restructuring and other expenses of $4.5 million for the nine months ended September 30, 2021. This included facility exit and other related costs of $3.9 million and employee termination benefits of $0.6 million. During the nine months ended September 30, 2021, the Company paid employee termination benefits of $0.5 million. The Company has accrued severance expense related to the restructuring plans of $1.1 million and $1.0 million at September 30, 2021 and December 31, 2020, respectively, which is recorded in accrued expenses and other current liabilities in the unaudited condensed consolidated balance sheets. Warrant Liabilities —The Company accounts for the Private Warrants in accordance with Accounting Standards Codification “ASC” Topic 815, “Derivatives and Hedging.” Under the guidance contained in ASC Topic 815-40, the Private Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Private Warrants as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. The liability is subject to re-measurement at each balance sheet date, and any change in fair value is recognized in the Company’s statement of operations. The Private Warrants are valued using a Black-Scholes option pricing model. Based on the views expressed in the SEC’s Staff Statement of April 12, 2021 in which the SEC staff clarified its interpretations of certain generally accepted accounting principles related to certain terms common in warrants issued by Special Purpose Acquisition Companies (“SPACs”), the Company determined that the Private Warrants should be treated as derivative liabilities rather than as components of equity, as previously presented as of December 31, 2020. Accordingly, the Company recorded out of period adjustments to the unaudited Condensed Consolidated Balance Sheet at January 1, 2021 to reclassify warrant liabilities of $8.1 million and transaction costs incurred by Act II of $1.1 million related to the issuance of the Private Warrants. Additionally, during the first quarter of 2021, the Company recognized the cumulative effect of the error on prior periods by recording a $1.2 million gain in the Statement of Operations to reflect the cumulative decrease in the fair value of the Private Warrants from the date of issuance through December 31, 2020. The Company concluded that this misstatement was not material to the current period or the previously filed financial statements. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | NOTE 2: BUSINESS COMBINATIONS On June 25, 2020, pursuant to the Business Combination, the Company indirectly acquired Merisant and Mafco Worldwide in a transaction accounted for as a business combination under ASC Topic 805, “Business Combinations,” and was accounted for using the acquisition method. Under the acquisition method, the acquisition date fair value of the consideration paid by the Company was allocated to the assets acquired and the liabilities assumed based on their estimated fair values. The following summarizes the purchase consideration (in thousands): Base cash consideration $ 387,500 Closing adjustment (764) Total Purchase Price $ 386,736 The Company recorded the fair value of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed as follows (in thousands): Cash and cash equivalents $ 10,062 Accounts receivable 45,769 Inventories 106,436 Prepaid expenses and other current assets 2,461 Property, plant and equipment, net 43,554 Operating lease right-of-use assets 12,541 Intangible assets 148,750 Deferred tax assets, net 1,065 Other assets 1,398 Total assets acquired 372,036 Accounts payable 18,590 Accrued expenses and other current liabilities 35,063 Current portion of operating lease liabilities 3,007 Operating lease liabilities, less current portion 12,208 Deferred tax liabilities, net 24,630 Other liabilities 16,227 Total liabilities assumed 109,725 Net assets acquired 262,311 Goodwill 124,425 Total Purchase Price $ 386,736 The values allocated to identifiable intangible assets and their estimated useful lives are as follows: Identifiable intangible assets Fair Value Useful Life Customer relationships $ 47,359 0.5 to 10 Tradenames 90,691 25 Product formulations 10,700 Indefinite $ 148,750 Goodwill represents the excess of the purchase price over the estimated fair value assigned to tangible and identifiable intangible assets acquired and liabilities assumed and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and expected future market opportunities. Of the purchase price allocated to goodwill, a total of $2.5 million will be deductible for income tax purposes pursuant to Internal Revenue Code (“IRC”) Section 197 over a 15-year period. The Company’s allocation of purchase price was based upon valuations performed to determine the fair value of the net assets as of the acquisition date and was subject to adjustments for up to one year after the closing date of the acquisition to reflect final valuations. The allocation of purchase price was finalized in the second quarter of 2021. In the first half of 2021, the Company recorded measurement period adjustments to its allocation of purchase price resulting in an increase in deferred tax liabilities, net of $1.5 million, other liabilities of $0.7 million and goodwill of $2.2 million. Direct transaction-related costs consist of costs incurred in connection with the Business Combination. Act II incurred transaction costs of $18.1 million prior to the Business Combination which are reflected within the accumulated deficit within the Consolidated Statement of Equity. During the three months ended March 31, 2021, the Company reclassified $1.1 million of Act II transaction costs related to the issuance of the Private Warrants that had been previously recorded in additional paid-in capital in connection with the Business Combination to accumulated deficit (See Note 1). Swerve Acquisition —On November 10, 2020, the Company executed and closed a definitive Equity Purchase Agreement (the “Purchase Agreement”) with RF Development, LLC (“RF Development”), Swerve, L.L.C. (“Swerve LLC”) and Swerve IP, L.L.C. (“Swerve IP” and together with Swerve LLC, “Swerve”). Swerve is a manufacturer and marketer of a portfolio of zero sugar, keto-friendly, and plant-based sweeteners and baking mixes. The Company purchased all of the issued and outstanding equity interests of both Swerve LLC and Swerve IP from RF Development for $80 million in cash, subject to customary post-closing adjustments. In connection with the acquisition of Swerve, the Company incurred transaction-related costs of $0.3 million in the nine months ended September 30, 2021. Swerve is included within the Company’s Branded CPG reportable segment. Swerve’s results are included in the Company’s consolidated statement of operations from the date of acquisition. The following summarizes the purchase consideration (in thousands): Base cash consideration $ 80,000 Closing adjustment (968) Total Purchase Price $ 79,032 The Company recorded the fair value of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed as follows (in thousands): Accounts receivable $ 3,223 Inventories 6,824 Prepaid expenses and other current assets 223 Property, plant and equipment, net 143 Operating lease right-of-use assets 76 Intangible assets 36,300 Other assets 3 Total assets acquired 46,792 Accounts payable 3,477 Accrued expenses and other current liabilities 288 Current portion of operating lease liabilities 48 Operating lease liabilities, less current portion 28 Total liabilities assumed 3,841 Net assets acquired 42,951 Goodwill 36,081 Total Purchase Price $ 79,032 The values allocated to identifiable intangible assets and their estimated useful lives are as follows: Identifiable intangible assets Fair Value (in thousands) Useful Life (in years) Customer relationships $ 3,200 10 Tradenames 33,100 25 $ 36,300 Goodwill represents the excess of the purchase price over the estimated fair value assigned to tangible and identifiable intangible assets acquired and liabilities assumed and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and expected future market opportunities. The entire amount of the purchase price allocated to goodwill will be deductible for income tax purposes pursuant to IRC Section 197 over a 15-year period. The Company’s allocation of purchase price was based upon valuations performed to determine the fair value of the net assets as of the acquisition date and is subject to adjustments for up to one year after the closing date of the acquisition to reflect final valuations. Wholesome Acquisition —On December 17, 2020, the Company entered into a stock purchase agreement (the “Wholesome Purchase Agreement”) with WSO Investments, Inc. (“WSO Investments” and together with its subsidiaries “Wholesome” and affiliates). WSO Investments is the direct parent of its wholly-owned subsidiary Wholesome Sweeteners, Incorporated, which was formed to import, market, distribute, and sell organic sugars, unrefined specialty sugars, and related products. Wholesome is included within the Company’s Branded CPG reportable segment. Wholesome’s results are included in the Company’s consolidated statement of operations from the date of acquisition. On February 5, 2021, pursuant to the terms of the Wholesome Purchase Agreement, the Company purchased and acquired all of the issued and outstanding shares of capital stock for an initial cash purchase price of $180 million plus up to an additional $55 million (the “Earn-Out Amount”) upon the satisfaction of certain post-closing financial metrics. Subject to the terms and conditions of the Wholesome Purchase Agreement payment of the Earn-Out Amount, in whole or in part, is subject to Wholesome achieving certain EBITDA thresholds at or above approximately $30 million during the period beginning August 29, 2020, and ending December 31, 2021 and is expected to be paid by March 31, 2022. A portion of the Earn-Out Amount (up to $27.5 million) may be paid, at the Company’s election, in freely tradeable, registered shares of Company common stock. The fair value of the Earn-Out Amount assumes a full payout. In connection with the acquisition of Wholesome, the Company incurred transaction-related costs of $0.1 million and $4.7 million in the three and nine months ended September 30, 2021, respectively. The following summarizes the preliminary purchase consideration (in thousands): Base cash consideration $ 180,000 Closing adjustment 13,863 Fair value of Earn-Out Amount 52,395 Total Purchase Price $ 246,258 The Company preliminarily recorded the fair value of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed as follows (in thousands): Cash and cash equivalents $ 2,664 Accounts receivable 15,868 Inventories 78,522 Prepaid expenses and other current assets 1,271 Property, plant and equipment, net 3,134 Operating lease right-of-use assets 7,585 Intangible assets 104,500 Other assets 1,189 Total assets acquired 214,733 Accounts payable 5,251 Accrued expenses and other current liabilities 10,576 Current portion of operating lease liabilities 1,435 Operating lease liabilities, less current portion 6,150 Deferred tax liabilities, net 26,685 Total liabilities assumed 50,097 Net assets acquired 164,636 Goodwill 81,622 Total Purchase Price $ 246,258 The preliminary values allocated to identifiable intangible assets and their estimated useful lives are as follows: Identifiable intangible assets Fair Value (in thousands) Useful Life (in years) Customer relationships $ 55,700 10 Tradenames 48,800 25 $ 104,500 Goodwill represents the excess of the purchase price over the estimated fair value assigned to tangible and identifiable intangible assets acquired and liabilities assumed and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and expected future market opportunities. Of the purchase price allocated to goodwill, a total of $4.7 million will be deductible for income tax purposes pursuant to IRC Section 197 over a 9-year period. The Company’s preliminary allocation of purchase price was based upon preliminary valuations performed to determine the fair value of the net assets as of the acquisition date and is subject to adjustments for up to one year after the closing date of the acquisition to reflect final valuations. The accounting for the Wholesome acquisition is not complete as the valuation for certain acquired assets and liabilities have not been finalized. These final valuations of the assets and liabilities could have a material impact on the preliminary purchase price allocation disclosed above. In the second and third quarter of 2021, the Company recorded measurement period adjustments to its initial allocation of purchase price as a result of ongoing valuation procedures on assets and liabilities assumed, including (i) an increase in purchase price of $3.6 million due to the finalization of the closing adjustment; (ii) a decrease to inventory of $0.2 million; (iii) an increase in prepaid expenses and other current assets of $0.5 million; (iv) an increase in property, plant and equipment of $0.4 million; (v) a decrease to intangible assets of $1.9 million; (vi) a decrease to other assets of $0.1 million; (vii) a decrease to accrued expenses and other current liabilities of $2.7 million; (viii) a decrease to deferred tax liabilities, net of $0.3 million; and (ix) an increase to goodwill of $1.9 million due to the incremental measurement period adjustments discussed in items (i) through (viii). The impact of measurement period adjustments to the results of operations was immaterial. The results of the Company’s operations for the three and nine months ended September 30, 2021 includes the results of Wholesome since February 5, 2021. Product revenues, net and operating income of Wholesome included in the Company’s condensed consolidated statement of operations for the three months ended September 30, 2021 was $53.1 million and $7.5 million, respectively, and for the nine months ended September 30, 2021 was $125.3 million and $12.6 million, respectively. Pro Forma Financial Information —The following unaudited pro forma financial information summarizes the results of operations for the Company as though the Business Combination and Swerve acquisition had occurred on January 1, 2019 and the Wholesome acquisition had occurred on January 1, 2020 (in thousands): Pro Forma Three Months Ended Nine Months Ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Revenue $ 128,941 $ 120,968 $ 381,639 $ 367,150 Net income (loss) $ 9,613 $ 5,272 $ 13,928 $ (38,626) The unaudited pro forma financial information does not assume any impacts from revenue, cost or other operating synergies that could be generated as a result of the acquisitions. The unaudited pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved had the Business Combination and Swerve acquisitions been consummated on January 1, 2019 and the Wholesome acquisition been consummated on January 1, 2020. The Successor and Predecessor periods have been combined in the pro forma for the three and nine months ended September 30, 2021 and 2020 and include adjustments to reflect intangible asset amortization based on the economic values derived from definite-lived intangible assets, interest expense on the new debt financing, depreciation expense for certain property, plant and equipment that have been adjusted to fair value, and the release of the inventory fair value adjustments into cost of goods sold. These adjustments are net of taxes. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 3: INVENTORIES Inventories consisted of the following (in thousands): September 30, 2021 December 31, 2020 Raw materials and supplies $ 117,445 $ 66,487 Work in process 1,408 562 Finished goods 74,656 44,650 Total inventories $ 193,509 $ 111,699 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 4: GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill and other intangible assets consisted of the following (in thousands): September 30, 2021 December 31, 2020 Gross Accumulated Net Gross Accumulated Net Other intangible assets subject to amortization Customer relationships (useful life of 5 to 10 years) $ 105,868 $ (11,313) $ 94,555 $ 50,877 $ (3,020) $ 47,857 Tradenames (useful life of 25 years) 173,273 (7,056) 166,217 128,155 (2,185) 125,970 Total $ 279,141 $ (18,369) $ 260,772 $ 179,032 $ (5,205) $ 173,827 Other intangible assets not subject to amortization Product formulations 10,700 10,700 Total other intangible assets, net 271,472 184,527 Goodwill 241,154 153,537 Total goodwill and other intangible assets $ 512,626 $ 338,064 At September 30, 2021 and December 31, 2020, goodwill at Branded CPG was $237.4 million and $150.3 million, respectively, and goodwill at Flavors & Ingredients was $3.8 million and $3.2 million, respectively. The Successor’s amortization expense for intangible assets was $4.7 million and $13.5 million for the three and nine months ended September 30, 2021, respectively, and $2.7 million and $2.8 million for the three months ended September 30, 2020 and the period from June 26, 2020 through September 30, 2020, respectively. The Predecessor’s amortization expense for intangible assets was $4.9 million for the period from January 1, 2020 to June 25, 2020. Amortization expense relating to amortizable intangible assets as of September 30, 2021 for the next five years is expected to be as follows (in thousands): Remainder of 2021 $ 4,679 2022 18,717 2023 18,717 2024 18,717 2025 18,483 2026 18,263 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 5: DEBT Debt consisted of the following (in thousands): September 30, 2021 December 31, 2020 Term loan $ 373,125 $ 136,500 Revolving credit facility 25,000 47,855 Less: current portion (3,750) (7,000) Less: unamortized discount and debt issuance costs (10,305) (4,693) Total long-term debt $ 384,070 $ 172,662 On December 31, 2020, the Company’s senior secured loan agreement consisted of a senior secured first lien term loan facility of $140 million and a first lien revolving credit facility of up to $50 million. As of December 31, 2020, there were $2.1 million of outstanding letters of credit that reduced the Company’s availability under the revolving credit facility. As of December 31, 2020, term loan borrowings were $131.8 million, net of debt issuance costs of $4.7 million. There were $47.9 million of borrowings under the revolving credit facility as of December 31, 2020. Additionally, as of December 31, 2020, the Company’s unamortized debt issuance costs related to the revolving credit facility were $1.7 million which are included in other assets in the condensed consolidated balance sheet. In connection with the closing of the Wholesome Transaction, on February 5, 2021, further discussed in Note 2, the Company and certain of its subsidiaries entered into an amendment and restatement agreement (the “Amendment Agreement”) with Toronto Dominion (Texas) LLC, which amended and restated its existing senior secured loan agreement dated as of June 25, 2020 (as amended on September 4, 2020, the “Existing Credit Agreement,” and as further amended by the Amendment Agreement, the “Amended and Restated Credit Agreement”), by and among Toronto Dominion (Texas), LLC, as administrative agent, certain lenders signatory thereto and certain other parties. The Amended and Restated Credit Agreement provides for senior secured financing consisting of the following credit facilities: (a) a senior secured term loan facility in the aggregate principal amount of $375 million (the “Term Loan Facility”); and (b) a revolving credit facility in an aggregate principal amount of up to $75 million (the “Revolving Facility,” and together with the Term Loan Facility, the “Credit Facilities”). The Revolving Facility has a $15 million sub-facility for the issuance of letters of credit and a $15 million sublimit for swing line loans. The Company used the proceeds under the Term Loan Facility to (i) repay and refinance existing indebtedness of WSO Investments; (ii) pay the cash consideration for the Wholesome Transaction; (iii) repay and refinance outstanding borrowings under the Existing Credit Agreement; and (iv) pay fees and expenses incurred in connection with the foregoing. The proceeds of the Revolving Facility can be used to finance working capital needs, for general corporate purposes, and for working capital adjustments payable under the Wholesome Purchase Agreement. Loans outstanding under the Credit Facilities accrue interest at a rate per annum equal to (i) with respect to the Revolving Facility and letters of credit, (A) 2.75%, in the case of base rate advances, and (B) 3.75% in the case of LIBOR advances, and (ii) with respect to the Term Loan Facility, (A) 3.50%, in the case of base rate advances, and (B) 4.50% in the case of LIBOR advances, with a LIBOR floor of 1.00% with respect to the Term Loan Facility, and 0.00% with respect to the Revolving Facility and letters of credit, and base rate based on the highest of the prime rate, the federal funds rate plus 0.50%, LIBOR for a one-month interest period plus 1.00%, and with respect to the Revolving Facility and letters of credit, 0.00%, or with respect to the Term Loan Facility, 2.00%, and undrawn amounts under the Revolving Facility will accrue a commitment fee at a rate per annum equal to 0.50% on the average daily undrawn portion of the commitments thereunder. As of September 30, 2021, there were $2.1 million of outstanding letters of credit that reduced the Company’s availability under the revolving credit facility. The Company’s unamortized debt issuance costs related to the revolving credit facility were $1.9 million as of September 30, 2021 and are included in other assets in the condensed consolidated balance sheet. The obligations under the Credit Facilities are guaranteed by certain direct or indirect wholly-owned domestic subsidiaries of the Company, other than certain excluded subsidiaries, including, but not limited to, immaterial subsidiaries and foreign subsidiaries. The Credit Facilities are secured by substantially all of the personal property of the Company and the guarantor subsidiaries (in each case, subject to certain exclusions and qualifications). The Credit Facilities require the Company to make certain mandatory prepayments, with (i) 100% of net cash proceeds of all non-ordinary course asset sales or other dispositions of property in excess of $5 million in any fiscal year, subject to the ability to reinvest such proceeds and certain other exceptions, (ii) 100% of the net cash proceeds of any debt incurrence, other than debt permitted under the definitive agreements (but excluding debt incurred to refinance the Credit Facilities) and (iii) 50% of “Excess Cash Flow,” as defined in the Amended and Restated Credit Agreement, with a reduction to 25% if the total net leverage ratio for the fiscal year is less than or equal to 3.50 to 1.00 but greater than 3.00 to 1.00, and a reduction to 0% if the total net leverage ratio for the fiscal year is less than or equal to 3.00 to 1.00. The Company also is required to make quarterly amortization payments equal to 0.25% per annum of the original principal amount of the Term Loan Facility (subject to reductions by optional and mandatory prepayments of the loans). As of the date of the amendment of the credit facilities, the aggregate unamortized debt issuance costs totaled $6.2 million, of which $4.4 million was expensed as a loss on extinguishment of debt. Additionally, in connection with the Amended and Restated Credit Agreement, the Company paid fees to certain lenders of $3.8 million, which was considered a debt discount, all of which was deferred, and incurred transaction costs of $8.9 million, of which $7.8 million was deferred and $1.1 million was expensed as part of loss on extinguishment and debt transaction costs. |
WARRANTS
WARRANTS | 9 Months Ended |
Sep. 30, 2021 | |
Other Liabilities [Abstract] | |
WARRANTS | NOTE 6: WARRANTS As of the date of the Business Combination, the Company had approximately 20,263,500 warrants outstanding, consisting of (i) 15,000,000 public warrants originally sold as part of the units issued in Act II’s initial public offering (the “Public Warrants”) and (ii) 5,263,500 Private Warrants that were sold by Act II to the PIPE Investors in conjunction with the Business Combination (collectively with the Public Warrants, the “Warrants”). Each warrant is exercisable for one-half of one share of the Company’s common stock at a price of $11.50 per whole share, subject to adjustment. Warrants may only be exercised for a whole number of shares as no fractional shares will be issued. As of September 30, 2021 and December 31, 2020, the Company had 18,929,980 and 15,982,520 Public Warrants outstanding, respectively, and 1,333,420 and 4,280,980 Private Warrants outstanding, respectively. The exercise price and number of ordinary shares issuable upon exercise of the Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. If the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, the Warrant price shall be adjusted proportionally. In no event will the Company be required to net cash settle the Warrants. Additionally, the Warrants became exercisable as of July 27, 2020 and expire five years from the date of the Business Combination or earlier upon redemption or liquidation. There were 100 Warrants exercised for 50 shares of the Company’s common stock as of September 30, 2021. Public Warrants —The Public Warrants are subject to redemption by the Company: • in whole and not in part; • at a price of $0.01 per public warrant; • upon not less than 30 days’ prior written notice of redemption to each warrant holder; and • if, and only if, the reported last sale price of the ordinary shares for any 20 trading days within a 30-day trading period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders equals or exceeds $18 per share (as adjusted). The Company may not redeem the warrants as described above unless a registration statement under the Securities Act covering the issuance of the ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those ordinary shares is available throughout the 30-day redemption period. If any such registration statement does not remain effective after closing of the Business Combination, the Company has the right to redeem the warrants on a “cashless” exercise basis. The public warrant holders only have the right to exercise their warrants pursuant to a “cashless” exercise if the Company does not maintain an effective registration statement. Private Warrants —The Private Warrants are identical to the Public Warrants, except that so long as they are held by the PIPE Investors or any permitted transferees, as applicable, the Private Warrants: (i) may be exercised for cash or on a cashless basis, (ii) were not allowed to be transferred, assigned or sold until thirty (30) days after the closing of the Business Combination, and (iii) shall not be redeemable by the Company. Upon the transfer of a Private Warrant to a party other than a PIPE Investor or a permitted transferee, the Private Warrants become Public Warrants and the fair market value of the Private Warrants at the date of transfer is reclassified to equity. See Note 1 for additional discussion. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 7: FAIR VALUE OF FINANCIAL INSTRUMENTS The Company measures and records in its consolidated financial statements certain assets and liabilities at fair value. ASC Topic 820 “Fair Value Measurement and Disclosures,” establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). This hierarchy consists of the following three levels: • Level 1 – Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market. • Level 2 – Assets and liabilities whose values are based on inputs other than those included in Level 1, including quoted market prices in markets that are not active; quoted prices of assets or liabilities with similar attributes in active markets; or valuation models whose inputs are observable or unobservable but corroborated by market data. • Level 3 – Assets and liabilities whose values are based on valuation models or pricing techniques that utilize unobservable inputs that are significant to the overall fair value measurement. Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Current Assets and Other Financial Assets and Liabilities— Cash and cash equivalents, trade accounts receivable and trade accounts payable are measured at carrying value, which approximates fair value because of the short-term maturities of these instruments. Contingent Consideration Payable— The Company measures the contingent consideration payable at fair value. The fair value of the contingent consideration utilized Level 3 inputs as it is based on significant inputs not observable in the market as of September 30, 2021, such as projected financial information and discount rate. Debt— The Company measures its term loan and revolving facilities at original carrying value including accrued interest, net of unamortized deferred financing costs and fees. The fair value of the credit facilities approximates carrying value, as they consist of variable rate loans. Warrant Liabilities— The Company classifies its Private Warrants as liabilities in accordance with ASC Topic 815. The Company estimates the fair value of the Private Warrants using a Black-Scholes options pricing model. The fair value of the Private Warrants utilized Level 3 inputs as it is based on significant inputs not observable in the market as of September 30, 2021. The fair value of the Private Warrants was estimated at September 30, 2021 using a Black-Scholes options pricing model and the following assumptions: Input September 30, 2021 Asset price $ 11.55 Exercise price $ 11.50 Risk-free interest rate 0.70% Expected volatility 42.0% Expected term (years) 3.74 Dividend yield 0.0% The fair value of warrant liabilities as of September 30, 2021 was $2.5 million. The changes in the warrant liabilities during the nine months ended September 30, 2021 were as follows (in thousands): Reclassification of fair value of Private Warrants to warrant liabilities as of January 1, 2021 $ 8,139 Cumulative impact of change in fair value of Private Warrants in 2020 (1,161) Transfer of Private Warrants to Public Warrants (2,502) Change in fair value of warrant liabilities in Q1 2021 3,523 Fair value of warrant liabilities as of March 31, 2021 $ 7,999 Change in fair value of warrant liabilities in Q2 2021 241 Fair value of warrant liabilities as of June 30, 2021 $ 8,240 Transfer of Private Warrants to Public Warrants (3,555) Change in fair value of warrant liabilities in Q3 2021 (2,178) Fair value of warrant liabilities as of September 30, 2021 $ 2,507 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8: COMMITMENTS AND CONTINGENCIES The Company is subject to various claims, pending and possible legal actions for product liability and other damages, and other matters arising out of the conduct of the business. The Company believes, based on current knowledge and consultation with counsel, that the outcome of such claims and actions will not have a material adverse effect on the Company’s consolidated financial position or results of operations. As of September 30, 2021, the Company had obligations to purchase $17.2 million of raw materials through 2026; however, it is unable to make reasonably reliable estimates of the timing of such payments. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 9: INCOME TAXES For the Successor period, the Company’s provision for income taxes consists of U.S., state and local, and foreign taxes. The Company has significant operations in various locations outside the U.S. The annual effective tax rate is a composite rate reflecting the earnings in the various locations at their applicable statutory tax rates. For the Predecessor period, income taxes as presented herein attribute current and deferred income taxes of the Company’s financial statements in a manner that is systematic, rational, and consistent with the asset and liability method described by ASC Topic 740, “Income Taxes.” Accordingly, the Company’s income tax provision during the predecessor period was prepared following the separate return method. The separate return method applies ASC Topic 740 to the stand-alone financial statements of each member of the consolidated group as if the group member were a separate taxpayer and a stand-alone enterprise. Use of the separate return method may result in differences when the sum of the amounts allocated to stand-alone tax provisions are compared with amounts presented in consolidated financial statements. In that event, the related deferred tax assets and liabilities could be significantly different from those presented herein. The consolidated financial statements reflect the Company’s portion of income taxes payable as if the Company had been a separate taxpayer. The Successor’s income tax benefit was $0.4 million for the three months ended September 30, 2021, which includes a discrete income tax benefit of $0.3 million related to the finalization of a Switzerland tax ruling (as further described below) and $0.2 million in connection with the filing of the Company’s 2020 U.S. federal and state tax returns during the quarter. The effective tax rate for the three months ended September 30, 2021 was an income tax benefit of 5.3% on pre-tax income of $8.4 million which differs from the statutory federal rate of 21% primarily due to non-deductible permanent differences, state and local income taxes, benefit from losses in certain jurisdictions, foreign income at different rates, and the discrete tax benefits described above. The Successor’s income tax benefit was $8.3 million for the nine months ended September 30, 2021, which includes a discrete income tax benefit of $4.8 million. The Company recorded a discrete tax benefit of $4.0 million related to the receipt of a beneficial tax ruling in Switzerland which allows for future amortization deductions, $1.0 million related to the reversal of uncertain tax position liabilities as a result of the lapse of applicable statute of limitations, and $0.2 million related to finalization of the Company’s 2020 U.S. federal and state tax returns during the quarter ended September 30, 2021, offset with a deferred tax provision of $0.5 million related to a tax law change in the United Kingdom which was enacted in June 2021. The effective tax rate for the nine months ended September 30, 2021 was an income tax benefit of 106.1% on a pre-tax loss of $7.8 million. The effective tax rate differs from the federal rate of 21% primarily due to non-deductible permanent differences, state and local income taxes and the discrete tax benefits described above. The Successor’s income tax provision was $1.7 million for the three months ended September 30, 2020, which includes a discrete tax provision of $0.4 million. The effective tax rate for the three months ended September 30, 2020 was an income tax provision of (146.3%) on a pre-tax loss of $1.2 million. The effective tax rate differs from the statutory federal rate of 21% primarily due to the U.S. tax effect of international operations including Global Intangible Low-Taxed Income (“GILTI”) recorded during the period. The Successor’s income tax provision was $1.7 million for the period from June 26, 2020 through September 30, 2020. The effective tax rate for the period from June 26, 2020 through September 30, 2020 was computed by applying an estimate of the annual effective tax rate for the Successor period to “ordinary” income or loss (pre-tax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. The effective tax provision was (102.9%) on a pre-tax loss of $1.6 million from June 26, 2020 through September 30, 2020 and differs from the statutory federal tax rate of 21% primarily due to GILTI recorded during the period. The Predecessor’s income tax benefit was $3.5 million for the period from January 1, 2020 through June 25, 2020. The effective tax rate for the period from January 1, 2020 through June 25, 2020 was computed using a discrete method. The Predecessor’s effective tax rate was 9.3% on pre-tax loss of $37.6 million which differs from the statutory rate of 21% primarily due to the impact of the impairment charges of non-deductible goodwill and the U.S. tax effect of international operations including GILTI recorded during the period. As of September 30, 2021 and December 31, 2020, the Company had an uncertain tax position liability of $0.2 million and $1.2 million, respectively, including interest and penalties. The unrecognized tax benefits include amounts related primarily to various state and foreign tax issues. |
PENSION BENEFITS
PENSION BENEFITS | 9 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
PENSION BENEFITS | NOTE 10: PENSION BENEFITS Certain current and former employees of the Company are covered under a funded qualified defined benefit retirement plan. Plan provisions covering certain of the Company’s salaried employees generally provide pension benefits based on years of service and compensation. Plan provisions covering certain of the Company’s union members generally provide stated benefits for each year of credited service. The Company’s funding policy is to contribute annually the statutory required amount as actuarially determined. The Company froze the pension plan on December 31, 2019. In addition, the Company has unfunded non-qualified plans covering certain salaried employees with additional retirement benefits in excess of qualified plan limits imposed by federal tax law. The Company uses December 31 as a measurement date for the plans. In February 2021, the Compensation Committee approved the termination of the Company’s qualified defined benefit retirement plan at Flavors & Ingredients. The Company expects to settle the long-term liability associated with the termination through a combination of (i) lump-sum payments in the fourth quarter of 2021 to eligible participants who elect to receive them and (ii) the purchase of annuity contracts in the first half of 2022. The components of net periodic benefit (credit) cost for the Company’s defined benefit pension plans (Successor) (Predecessor) Three Months Ended Three Months Ended Nine Months Ended From From January 1, 2020 to June 25, 2020 Service cost $ 15 $ 47 $ 47 $ 47 $ 41 Interest cost 259 273 778 273 593 Expected return on plan assets (398) (392) (1,197) (392) (817) Recognized actuarial loss 9 — 27 — 276 Amortization of prior service cost — — — — 33 Settlement/curtailment gain (97) — (97) — — Net periodic benefit (credit) cost $ (212) $ (72) $ (442) $ (72) $ 126 Net periodic benefit (credit) cost is reflected in the Company’s consolidated financial statements as follows for the Successor and Predecessor periods presented (in thousands): (Successor) (Predecessor) Three Months Ended Three Months Ended Nine Months Ended From From January 1, 2020 to June 25, 2020 Selling, general and administrative expense $ 15 $ 47 $ 47 $ 47 $ 41 Other income, net (227) (119) (489) (119) 85 Net periodic benefit (credit) cost $ (212) $ (72) $ (442) $ (72) $ 126 The Company currently does not expect to make contributions to its funded defined benefit pension plan in 2021 due to the funded status. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 11: STOCK-BASED COMPENSATION On June 24, 2020, the Whole Earth Brands, Inc. 2020 Long-Term Incentive Plan (the “Plan”) was approved for the purpose of promoting the long-term financial interests and growth of the Company and its subsidiaries by attracting and retaining management and other personnel and key service providers. The Plan provides for the granting of stock options (“SOs”), stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance shares, performance share units (“PSUs”) and other stock-based awards to officers, employees and non-employee directors of, and certain other service providers to, the Company and its subsidiaries. These awards are settled in shares of the Company’s stock and therefore classified as equity awards. Under the terms of the Plan an aggregate of 9,300,000 shares of common stock are authorized for issuance under the Plan. RSUs granted in 2021 vest ratably on the anniversary of the grant date over a period of one PSU awards generally cliff vest subsequent to the completion of the cumulative three-year performance period, depending on the period specified in each respective PSU agreement. The number of PSUs that ultimately vest depends on the Company’s performance relative to a specified cumulative financial target for fiscal years 2021, 2022 and 2023 (the “cumulative performance target”) and are expected to be settled in stock. Stock-based compensation expense for the three and nine months ended September 30, 2021 was $2.7 million and $7.2 million, respectively, and no expense was recognized for the same periods in the prior year. Stock-based compensation expense for the three and nine months ended September 30, 2021 includes $0.2 million and $0.6 million, respectively, of expense related to 2021 management bonuses expected to be settled in stock and accounted for as a liability. A summary of activity and weighted average fair values related to the RSUs is as follows: Nine Months Ended September 30, 2021 Shares Weighted Average Fair Value Outstanding at December 31, 2020 633,057 $ 8.34 Granted 553,146 13.55 Vested (40,659) 10.23 Forfeited (20,345) 8.34 Outstanding and nonvested at September 30, 2021 1,125,199 $ 10.90 A summary of activity and weighted average fair values related to the RSAs is as follows: Nine Months Ended September 30, 2021 Shares Weighted Average Fair Value Outstanding at December 31, 2020 68,946 $ 8.34 Granted — — Outstanding and nonvested at September 30, 2021 68,946 $ 8.34 A summary of activity and weighted average fair values related to the PSUs is as follows: Nine Months Ended September 30, 2021 Shares Weighted Average Fair Value Outstanding at December 31, 2020 — $ — Granted 323,555 13.65 Outstanding and nonvested at September 30, 2021 323,555 $ 13.65 As of September 30, 2021, the Company had not yet recognized compensation costs on nonvested awards as follows (in thousands): Unrecognized Compensation Cost Weighted Avg. Remaining Recognition Period (in years) Nonvested awards $ 10,096 1.06 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 12: STOCKHOLDERS' EQUITY Common Stock Repurchase Plan —On September 8, 2020, the Company announced that its board of directors had authorized a stock repurchase plan of up to $20 million of shares of the Company’s common stock. The shares were available for repurchase from time to time over a 12-month period which expired on September 15, 2021, in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in accordance with U.S. federal securities laws. There were no repurchases of the Company’s common stock under the stock repurchase plan. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 13: EARNINGS PER SHARE Basic earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Warrants issued are not considered outstanding at the date of issuance. RSUs and RSAs also are not considered outstanding until they have vested. Contingently issuable shares associated with outstanding PSUs that have cliff vesting based on achievement of a performance condition were not included in the basic earnings per share calculations for the periods presented as the applicable vesting conditions had not been satisfied. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average shares outstanding assuming dilution. Dilutive common shares outstanding is computed using the treasury stock method and reflects the additional shares that would be outstanding if dilutive warrants were exercised and restricted stock units and restricted stock awards were settled for common shares during the period. For warrants that are liability-classified, during the 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 the fair value of warrant liability and adjusts the denominator to include the dilutive shares using the treasury stock method. The computation of basic and diluted earnings (loss) per common share for the three and nine months ended September 30, 2021, the three months ended September 30, 2020, and for the period from June 26, 2020 to September 30, 2020 is shown below (in thousands, except for share and per share data): (Successor) Three Months Ended Three Months Ended Nine Months Ended From EPS numerator: Net income (loss) attributable to common shareholders $ 8,806 $ (2,835) $ 476 $ (3,340) Less: Change in fair value of warrant liabilities (2,178) — — — Numerator - diluted $ 6,628 $ (2,835) $ 476 $ (3,340) EPS denominator: Weighted average shares outstanding - basic 38,492,878 38,426,669 38,453,611 38,426,669 Effect of dilutive securities 1,372,872 — 1,493,119 — Weighted average shares outstanding - diluted 39,865,750 38,426,669 39,946,730 38,426,669 Net earnings (loss) per share: Basic $ 0.23 $ (0.07) $ 0.01 $ (0.09) Diluted $ 0.17 $ (0.07) $ 0.01 $ (0.09) For the nine months ended September 30, 2021, 142,702 warrants were excluded from the diluted EPS calculation because they were determined to be anti-dilutive. For the three months ended September 30, 2020 and for the period from June 26, 2020 to September 30, 2020, 10,131,748 warrants, 719,038 RSUs and 68,946 RSAs were excluded from the diluted EPS calculation because they were determined to be anti-dilutive. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
Sep. 30, 2021 | |
AOCI Attributable to Parent [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 14: ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes accumulated other comprehensive income (loss) (“AOCI”), net of taxes, by component (in thousands): Net Currency Translation Gains (Losses) Funded Status of Total Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2019 (Predecessor) $ 2,885 $ (10,944) $ (8,059) Other comprehensive loss before reclassifications (1,884) — (1,884) Amounts reclassified from AOCI — 48 48 Balance at March 31, 2020 (Predecessor) 1,001 (10,896) (9,895) Other comprehensive loss before reclassifications (402) — (402) Amounts reclassified from AOCI — 270 270 Balance at June 25, 2020 (Predecessor) 599 (10,626) (10,027) Purchase accounting adjustments to eliminate Predecessor’s accumulated other comprehensive loss (income) (599) 10,626 10,027 Balance at June 26, 2020 (Successor) — — — Other comprehensive income before reclassifications 15 — 15 Balance at June 30, 2020 (Successor) 15 — 15 Other comprehensive income before reclassifications 3,130 — 3,130 Balance at September 30, 2020 (Successor) $ 3,145 $ — $ 3,145 Balance at December 31, 2020 (Successor) $ 7,774 $ 831 $ 8,605 Other comprehensive loss before reclassifications (2,047) — (2,047) Amounts reclassified from AOCI — 9 9 Balance at March 31, 2021 (Successor) 5,727 840 6,567 Other comprehensive income (loss) before reclassifications 5,322 (55) 5,267 Amounts reclassified from AOCI — 9 9 Balance at June 30, 2021 (Successor) 11,049 794 11,843 Other comprehensive (loss) income before reclassifications (3,599) 290 (3,309) Amounts reclassified from AOCI — (88) (88) Balance at September 30, 2021 (Successor) $ 7,450 $ 996 $ 8,446 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 15: RELATED PARTY TRANSACTIONS The Predecessor participated in MacAndrews & Forbes’ (“MacAndrews”) directors and officers’ insurance program, which covered the Predecessor along with MacAndrews and its other affiliates. The limits of coverage are available on aggregate losses to any or all of the participating companies and their respective directors and officers. For the period January 1, 2020 to June 25, 2020, the Predecessor reimbursed MacAndrews an immaterial amount for its allocable portion of the premiums for such coverage, which the Predecessor believed was more favorable than the premiums that it could have secured were it to secure its own coverage. The Predecessor also participated in certain other insurance programs with MacAndrews under which it paid premiums directly to the insurance broker. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | NOTE 16: BUSINESS SEGMENTS The Company has two reportable segments: Branded CPG and Flavors & Ingredients. In addition, beginning with the first quarter of 2021, the Company’s corporate office functions are now reported and included under Corporate. Corporate is not a reportable or operating segment but is included for reconciliation purposes and includes the costs for the corporate office administrative activities as well as transaction-related and other costs. Certain prior year amounts have been reclassified to conform to the current presentation. The Company does not present assets by reportable segments as they are not reviewed by the Chief Operating Decision Maker for purposes of assessing segment performance and allocating resources. The following table presents selected financial information relating to the Company’s business segments (in thousands): (Successor) (Predecessor) Three Months Ended Three Months Ended Nine Months Ended From From January 1, 2020 to June 25, 2020 Product revenues, net Branded CPG $ 102,693 $ 41,006 $ 283,585 $ 43,557 $ 80,749 Flavors & Ingredients 26,248 25,996 77,674 27,923 47,579 Total product revenues, net $ 128,941 $ 67,002 $ 361,259 $ 71,480 $ 128,328 Operating income (loss) Branded CPG $ 10,090 $ 7,138 $ 30,507 $ 7,215 $ (5,055) Flavors & Ingredients 9,520 (435) 14,230 (646) (23,718) 19,610 6,703 44,737 6,569 (28,773) Corporate (6,094) (5,639) (28,310) (5,822) (9,408) Total operating income (loss) $ 13,516 $ 1,064 $ 16,427 $ 747 $ (38,181) The following table presents geographic information based upon revenues of the Company’s major geographic markets (in thousands): (Successor) (Predecessor) Three Months Ended Three Months Ended Nine Months Ended From From January 1, 2020 to June 25, 2020 Branded CPG: North America $ 72,285 $ 14,642 $ 190,699 $ 15,514 $ 29,927 Europe 18,197 16,934 58,135 17,816 31,837 India, Middle East and Africa 3,267 2,262 9,522 2,493 3,778 Asia-Pacific 5,732 3,820 16,552 4,189 9,328 Latin America 3,212 3,348 8,677 3,545 5,879 Flavors & Ingredients 26,248 25,996 77,674 27,923 47,579 Total product revenues, net $ 128,941 $ 67,002 $ 361,259 $ 71,480 $ 128,328 |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation —The accompanying unaudited consolidated and combined interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial reporting. The balance sheet data as of December 31, 2020 was derived from the audited consolidated financial statements. These unaudited condensed consolidated and combined interim financial statements should be read in conjunction with the Company’s audited consolidated and combined financial statements for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K. In the opinion of management, the financial statements contain all adjustments necessary to state fairly the financial position of the Company as of September 30, 2021 and the results of operations and cash flows for all periods presented. All adjustments reflected in the accompanying unaudited consolidated and combined financial statements, which management believes are necessary to state fairly the financial position, results of operations and cash flows, have been reflected and are of a normal recurring nature. Results of operations for interim periods are not necessarily indicative of results to be expected for the full year. Certain prior year amounts have been reclassified to conform to the current year presentation. |
Principles of Consolidation | Principles of Consolidation —The consolidated and combined financial statements include the accounts of Whole Earth Brands, Inc., and its indirect and wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could differ from these estimates. |
Recently Adopted Accounting Pronouncements and New Accounting Standards | Recently Adopted Accounting Pronouncements — The Company qualifies as an emerging growth company (an “EGC”) and as such, has elected the extended transition period for complying with certain new or revised accounting pronouncements. During the extended transition period, the Company is not subject to certain new or revised accounting standards applicable to public companies. The accounting pronouncements pending adoption below reflect effective dates for the Company as an EGC with the extended transition period. In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-7, “Compensation - Retirement Benefits (Topic 715).” Under the new guidance, employers are required to present the service cost component of net periodic benefit cost in the same statement of operations caption as other employee compensation costs arising from services rendered during the period. Employers are required to present the other components of the net periodic benefit cost separately from the caption that includes the service costs and outside of any subtotal of operating profit and are required to disclose the caption used to present the other components of net periodic benefit cost, if not presented separately on the statement of operations. The Company adopted ASU 2017-7 effective in the second quarter of 2020. The adoption of this standard did not have an effect on the Company’s historically reported net income (loss) but resulted in a presentation reclassification which increased the Company’s historically reported operating profit by $0.1 million for the six months ended June 25, 2020. New Accounting Standards —In March 2020, the FASB issued ASU 2020-4, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (“LIBOR”) by the end of 2021. The amendments in ASU 2020-4 apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The new standard was effective upon issuance and upon adoption can be applied prospectively to applicable contract modifications made on or before December 31, 2022. The Company is currently evaluating the impact of adopting this standard but does not expect it to have a material impact on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (ASC 740) - Simplifying the Accounting for Income Taxes.” The standard enhances and simplifies various aspects of the income tax accounting guidance. For public entities, the standard is effective for annual periods and interim periods beginning after December 15, 2020. This standard is effective for the Company as an EGC for the fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2019-12 on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20).” The standard modifies certain disclosure requirements for employers that sponsor defined benefit pension and other postretirement benefit plans by removing disclosures that are no longer considered cost beneficial, clarifying specific requirements of disclosures, and adding disclosure requirements identified as relevant. This standard is effective for the Company as an EGC for the fiscal years beginning after December 15, 2021. Early adoption is permitted. The amendments in ASU 2018-14 should be applied retrospectively to each period presented. The Company is currently evaluating the impact of adopting ASU 2018-14 on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326).” The standard requires entities to estimate losses on financial assets measured at amortized cost, including trade receivables, debt securities and loans, using an expected credit loss model. The expected credit loss differs from the previous incurred losses model primarily in that the loss recognition threshold of “probable” has been eliminated and that expected loss should consider reasonable and supportable forecasts in addition to the previously considered past events and current conditions. Additionally, the guidance requires additional disclosures related to the further disaggregation of information related to the credit quality of financial assets by year of the asset’s origination for as many as five years. Entities must apply the standard provision as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. This standard is effective for the Company as an EGC for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. The Company is currently evaluating the impact of adopting ASU 2016-13 on its consolidated financial statements. |
Restructuring and Employee Termination Benefits | Restructuring and Employee Termination Benefits —During 2020, the Company adopted restructuring plans to streamline processes and realize cost savings by consolidating facilities and eliminating various positions in operations and general and administrative areas. |
Warrant Liabilities | Warrant Liabilities—The Company accounts for the Private Warrants in accordance with Accounting Standards Codification “ASC” Topic 815, “Derivatives and Hedging.” Under the guidance contained in ASC Topic 815-40, the Private Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Private Warrants as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. The liability is subject to re-measurement at each balance sheet date, and any change in fair value is recognized in the Company’s statement of operations. The Private Warrants are valued using a Black-Scholes option pricing model. |
Fair Value Measurements | The Company measures and records in its consolidated financial statements certain assets and liabilities at fair value. ASC Topic 820 “Fair Value Measurement and Disclosures,” establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). This hierarchy consists of the following three levels: • Level 1 – Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market. • Level 2 – Assets and liabilities whose values are based on inputs other than those included in Level 1, including quoted market prices in markets that are not active; quoted prices of assets or liabilities with similar attributes in active markets; or valuation models whose inputs are observable or unobservable but corroborated by market data. • Level 3 – Assets and liabilities whose values are based on valuation models or pricing techniques that utilize unobservable inputs that are significant to the overall fair value measurement. Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Current Assets and Other Financial Assets and Liabilities— Cash and cash equivalents, trade accounts receivable and trade accounts payable are measured at carrying value, which approximates fair value because of the short-term maturities of these instruments. Contingent Consideration Payable— The Company measures the contingent consideration payable at fair value. The fair value of the contingent consideration utilized Level 3 inputs as it is based on significant inputs not observable in the market as of September 30, 2021, such as projected financial information and discount rate. Debt— The Company measures its term loan and revolving facilities at original carrying value including accrued interest, net of unamortized deferred financing costs and fees. The fair value of the credit facilities approximates carrying value, as they consist of variable rate loans. Warrant Liabilities— The Company classifies its Private Warrants as liabilities in accordance with ASC Topic 815. The Company estimates the fair value of the Private Warrants using a Black-Scholes options pricing model. The fair value of the Private Warrants utilized Level 3 inputs as it is based on significant inputs not observable in the market as of September 30, 2021. |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
Schedule of Preliminary Purchase Consideration | The following summarizes the purchase consideration (in thousands): Base cash consideration $ 387,500 Closing adjustment (764) Total Purchase Price $ 386,736 The following summarizes the purchase consideration (in thousands): Base cash consideration $ 80,000 Closing adjustment (968) Total Purchase Price $ 79,032 The following summarizes the preliminary purchase consideration (in thousands): Base cash consideration $ 180,000 Closing adjustment 13,863 Fair value of Earn-Out Amount 52,395 Total Purchase Price $ 246,258 |
Summary of Preliminary Allocation of the Purchase Price to Tangible and Identifiable Intangible Assets Acquired and Liabilities Assumed | The Company recorded the fair value of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed as follows (in thousands): Cash and cash equivalents $ 10,062 Accounts receivable 45,769 Inventories 106,436 Prepaid expenses and other current assets 2,461 Property, plant and equipment, net 43,554 Operating lease right-of-use assets 12,541 Intangible assets 148,750 Deferred tax assets, net 1,065 Other assets 1,398 Total assets acquired 372,036 Accounts payable 18,590 Accrued expenses and other current liabilities 35,063 Current portion of operating lease liabilities 3,007 Operating lease liabilities, less current portion 12,208 Deferred tax liabilities, net 24,630 Other liabilities 16,227 Total liabilities assumed 109,725 Net assets acquired 262,311 Goodwill 124,425 Total Purchase Price $ 386,736 The Company recorded the fair value of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed as follows (in thousands): Accounts receivable $ 3,223 Inventories 6,824 Prepaid expenses and other current assets 223 Property, plant and equipment, net 143 Operating lease right-of-use assets 76 Intangible assets 36,300 Other assets 3 Total assets acquired 46,792 Accounts payable 3,477 Accrued expenses and other current liabilities 288 Current portion of operating lease liabilities 48 Operating lease liabilities, less current portion 28 Total liabilities assumed 3,841 Net assets acquired 42,951 Goodwill 36,081 Total Purchase Price $ 79,032 The Company preliminarily recorded the fair value of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed as follows (in thousands): Cash and cash equivalents $ 2,664 Accounts receivable 15,868 Inventories 78,522 Prepaid expenses and other current assets 1,271 Property, plant and equipment, net 3,134 Operating lease right-of-use assets 7,585 Intangible assets 104,500 Other assets 1,189 Total assets acquired 214,733 Accounts payable 5,251 Accrued expenses and other current liabilities 10,576 Current portion of operating lease liabilities 1,435 Operating lease liabilities, less current portion 6,150 Deferred tax liabilities, net 26,685 Total liabilities assumed 50,097 Net assets acquired 164,636 Goodwill 81,622 Total Purchase Price $ 246,258 |
Summary of Preliminary Values Allocated to Identifiable Intangible Assets and Their Estimated Useful Lives | The values allocated to identifiable intangible assets and their estimated useful lives are as follows: Identifiable intangible assets Fair Value Useful Life Customer relationships $ 47,359 0.5 to 10 Tradenames 90,691 25 Product formulations 10,700 Indefinite $ 148,750 The values allocated to identifiable intangible assets and their estimated useful lives are as follows: Identifiable intangible assets Fair Value (in thousands) Useful Life (in years) Customer relationships $ 3,200 10 Tradenames 33,100 25 $ 36,300 The preliminary values allocated to identifiable intangible assets and their estimated useful lives are as follows: Identifiable intangible assets Fair Value (in thousands) Useful Life (in years) Customer relationships $ 55,700 10 Tradenames 48,800 25 $ 104,500 |
Summary of Pro Forma Financial Information | The following unaudited pro forma financial information summarizes the results of operations for the Company as though the Business Combination and Swerve acquisition had occurred on January 1, 2019 and the Wholesome acquisition had occurred on January 1, 2020 (in thousands): Pro Forma Three Months Ended Nine Months Ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Revenue $ 128,941 $ 120,968 $ 381,639 $ 367,150 Net income (loss) $ 9,613 $ 5,272 $ 13,928 $ (38,626) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories consisted of the following (in thousands): September 30, 2021 December 31, 2020 Raw materials and supplies $ 117,445 $ 66,487 Work in process 1,408 562 Finished goods 74,656 44,650 Total inventories $ 193,509 $ 111,699 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Components of Goodwill and Other Intangible Assets | Goodwill and other intangible assets consisted of the following (in thousands): September 30, 2021 December 31, 2020 Gross Accumulated Net Gross Accumulated Net Other intangible assets subject to amortization Customer relationships (useful life of 5 to 10 years) $ 105,868 $ (11,313) $ 94,555 $ 50,877 $ (3,020) $ 47,857 Tradenames (useful life of 25 years) 173,273 (7,056) 166,217 128,155 (2,185) 125,970 Total $ 279,141 $ (18,369) $ 260,772 $ 179,032 $ (5,205) $ 173,827 Other intangible assets not subject to amortization Product formulations 10,700 10,700 Total other intangible assets, net 271,472 184,527 Goodwill 241,154 153,537 Total goodwill and other intangible assets $ 512,626 $ 338,064 |
Schedule of Amortization Expense | Amortization expense relating to amortizable intangible assets as of September 30, 2021 for the next five years is expected to be as follows (in thousands): Remainder of 2021 $ 4,679 2022 18,717 2023 18,717 2024 18,717 2025 18,483 2026 18,263 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Components of Debt | Debt consisted of the following (in thousands): September 30, 2021 December 31, 2020 Term loan $ 373,125 $ 136,500 Revolving credit facility 25,000 47,855 Less: current portion (3,750) (7,000) Less: unamortized discount and debt issuance costs (10,305) (4,693) Total long-term debt $ 384,070 $ 172,662 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Assumptions | The fair value of the Private Warrants was estimated at September 30, 2021 using a Black-Scholes options pricing model and the following assumptions: Input September 30, 2021 Asset price $ 11.55 Exercise price $ 11.50 Risk-free interest rate 0.70% Expected volatility 42.0% Expected term (years) 3.74 Dividend yield 0.0% |
Schedule of Changes in Fair Value of Warrants | The changes in the warrant liabilities during the nine months ended September 30, 2021 were as follows (in thousands): Reclassification of fair value of Private Warrants to warrant liabilities as of January 1, 2021 $ 8,139 Cumulative impact of change in fair value of Private Warrants in 2020 (1,161) Transfer of Private Warrants to Public Warrants (2,502) Change in fair value of warrant liabilities in Q1 2021 3,523 Fair value of warrant liabilities as of March 31, 2021 $ 7,999 Change in fair value of warrant liabilities in Q2 2021 241 Fair value of warrant liabilities as of June 30, 2021 $ 8,240 Transfer of Private Warrants to Public Warrants (3,555) Change in fair value of warrant liabilities in Q3 2021 (2,178) Fair value of warrant liabilities as of September 30, 2021 $ 2,507 |
PENSION BENEFITS (Tables)
PENSION BENEFITS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Periodic Benefit (Credit) Cost and Net Periodic Benefit Costs | The components of net periodic benefit (credit) cost for the Company’s defined benefit pension plans (Successor) (Predecessor) Three Months Ended Three Months Ended Nine Months Ended From From January 1, 2020 to June 25, 2020 Service cost $ 15 $ 47 $ 47 $ 47 $ 41 Interest cost 259 273 778 273 593 Expected return on plan assets (398) (392) (1,197) (392) (817) Recognized actuarial loss 9 — 27 — 276 Amortization of prior service cost — — — — 33 Settlement/curtailment gain (97) — (97) — — Net periodic benefit (credit) cost $ (212) $ (72) $ (442) $ (72) $ 126 Net periodic benefit (credit) cost is reflected in the Company’s consolidated financial statements as follows for the Successor and Predecessor periods presented (in thousands): (Successor) (Predecessor) Three Months Ended Three Months Ended Nine Months Ended From From January 1, 2020 to June 25, 2020 Selling, general and administrative expense $ 15 $ 47 $ 47 $ 47 $ 41 Other income, net (227) (119) (489) (119) 85 Net periodic benefit (credit) cost $ (212) $ (72) $ (442) $ (72) $ 126 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Activity Related to RSUs, RSAs and PSUs | A summary of activity and weighted average fair values related to the RSUs is as follows: Nine Months Ended September 30, 2021 Shares Weighted Average Fair Value Outstanding at December 31, 2020 633,057 $ 8.34 Granted 553,146 13.55 Vested (40,659) 10.23 Forfeited (20,345) 8.34 Outstanding and nonvested at September 30, 2021 1,125,199 $ 10.90 A summary of activity and weighted average fair values related to the RSAs is as follows: Nine Months Ended September 30, 2021 Shares Weighted Average Fair Value Outstanding at December 31, 2020 68,946 $ 8.34 Granted — — Outstanding and nonvested at September 30, 2021 68,946 $ 8.34 A summary of activity and weighted average fair values related to the PSUs is as follows: Nine Months Ended September 30, 2021 Shares Weighted Average Fair Value Outstanding at December 31, 2020 — $ — Granted 323,555 13.65 Outstanding and nonvested at September 30, 2021 323,555 $ 13.65 |
Schedule of Unrecognized Compensation Cost on Nonvested Awards | As of September 30, 2021, the Company had not yet recognized compensation costs on nonvested awards as follows (in thousands): Unrecognized Compensation Cost Weighted Avg. Remaining Recognition Period (in years) Nonvested awards $ 10,096 1.06 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Loss Per Common Share | The computation of basic and diluted earnings (loss) per common share for the three and nine months ended September 30, 2021, the three months ended September 30, 2020, and for the period from June 26, 2020 to September 30, 2020 is shown below (in thousands, except for share and per share data): (Successor) Three Months Ended Three Months Ended Nine Months Ended From EPS numerator: Net income (loss) attributable to common shareholders $ 8,806 $ (2,835) $ 476 $ (3,340) Less: Change in fair value of warrant liabilities (2,178) — — — Numerator - diluted $ 6,628 $ (2,835) $ 476 $ (3,340) EPS denominator: Weighted average shares outstanding - basic 38,492,878 38,426,669 38,453,611 38,426,669 Effect of dilutive securities 1,372,872 — 1,493,119 — Weighted average shares outstanding - diluted 39,865,750 38,426,669 39,946,730 38,426,669 Net earnings (loss) per share: Basic $ 0.23 $ (0.07) $ 0.01 $ (0.09) Diluted $ 0.17 $ (0.07) $ 0.01 $ (0.09) |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
AOCI Attributable to Parent [Abstract] | |
Summary of Changes in the Components of Accumulated Other Comprehensive Income (Loss), Net of Tax | The following table summarizes accumulated other comprehensive income (loss) (“AOCI”), net of taxes, by component (in thousands): Net Currency Translation Gains (Losses) Funded Status of Total Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2019 (Predecessor) $ 2,885 $ (10,944) $ (8,059) Other comprehensive loss before reclassifications (1,884) — (1,884) Amounts reclassified from AOCI — 48 48 Balance at March 31, 2020 (Predecessor) 1,001 (10,896) (9,895) Other comprehensive loss before reclassifications (402) — (402) Amounts reclassified from AOCI — 270 270 Balance at June 25, 2020 (Predecessor) 599 (10,626) (10,027) Purchase accounting adjustments to eliminate Predecessor’s accumulated other comprehensive loss (income) (599) 10,626 10,027 Balance at June 26, 2020 (Successor) — — — Other comprehensive income before reclassifications 15 — 15 Balance at June 30, 2020 (Successor) 15 — 15 Other comprehensive income before reclassifications 3,130 — 3,130 Balance at September 30, 2020 (Successor) $ 3,145 $ — $ 3,145 Balance at December 31, 2020 (Successor) $ 7,774 $ 831 $ 8,605 Other comprehensive loss before reclassifications (2,047) — (2,047) Amounts reclassified from AOCI — 9 9 Balance at March 31, 2021 (Successor) 5,727 840 6,567 Other comprehensive income (loss) before reclassifications 5,322 (55) 5,267 Amounts reclassified from AOCI — 9 9 Balance at June 30, 2021 (Successor) 11,049 794 11,843 Other comprehensive (loss) income before reclassifications (3,599) 290 (3,309) Amounts reclassified from AOCI — (88) (88) Balance at September 30, 2021 (Successor) $ 7,450 $ 996 $ 8,446 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Selected Financial Information Relating to the Business' Reportable Segments | The following table presents selected financial information relating to the Company’s business segments (in thousands): (Successor) (Predecessor) Three Months Ended Three Months Ended Nine Months Ended From From January 1, 2020 to June 25, 2020 Product revenues, net Branded CPG $ 102,693 $ 41,006 $ 283,585 $ 43,557 $ 80,749 Flavors & Ingredients 26,248 25,996 77,674 27,923 47,579 Total product revenues, net $ 128,941 $ 67,002 $ 361,259 $ 71,480 $ 128,328 Operating income (loss) Branded CPG $ 10,090 $ 7,138 $ 30,507 $ 7,215 $ (5,055) Flavors & Ingredients 9,520 (435) 14,230 (646) (23,718) 19,610 6,703 44,737 6,569 (28,773) Corporate (6,094) (5,639) (28,310) (5,822) (9,408) Total operating income (loss) $ 13,516 $ 1,064 $ 16,427 $ 747 $ (38,181) |
Summary of Revenue Disaggregated by Geographic Operating Segments | The following table presents geographic information based upon revenues of the Company’s major geographic markets (in thousands): (Successor) (Predecessor) Three Months Ended Three Months Ended Nine Months Ended From From January 1, 2020 to June 25, 2020 Branded CPG: North America $ 72,285 $ 14,642 $ 190,699 $ 15,514 $ 29,927 Europe 18,197 16,934 58,135 17,816 31,837 India, Middle East and Africa 3,267 2,262 9,522 2,493 3,778 Asia-Pacific 5,732 3,820 16,552 4,189 9,328 Latin America 3,212 3,348 8,677 3,545 5,879 Flavors & Ingredients 26,248 25,996 77,674 27,923 47,579 Total product revenues, net $ 128,941 $ 67,002 $ 361,259 $ 71,480 $ 128,328 |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands | Jun. 25, 2020 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Sep. 30, 2020 | Jun. 25, 2020 | Sep. 30, 2021 | Dec. 31, 2020 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Conversion basis for conversion of the then-issued and outstanding ordinary shares of predecessor into successor shares (in shares) | 1 | |||||||
Shares issued (in shares) | 7,500,000 | |||||||
Private placement warrants issued (in shares) | 5,263,500 | |||||||
Shares called upon by private placement warrants (in shares) | 2,631,750 | 50 | 2,631,750 | 50 | ||||
Operating profit | $ 13,516 | $ 1,064 | $ 747 | $ (38,181) | $ 16,427 | |||
Restructuring and other expenses | 0 | 0 | 0 | 0 | 4,503 | |||
Payments of employee termination benefits | 500 | |||||||
Warrant liabilities | 2,507 | 2,507 | $ 0 | |||||
Change in fair value of warrant liabilities | (2,178) | $ 0 | $ 0 | 0 | 425 | |||
Facility Closing | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Restructuring and other expenses | 3,900 | |||||||
Employee Severance | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Restructuring and other expenses | 600 | |||||||
Accrued severance expense | $ 1,100 | $ 1,100 | 1,000 | |||||
Restatement adjustment | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Warrant liabilities | $ 8,100 | |||||||
Change in fair value of warrant liabilities | $ 1,200 | |||||||
Restatement adjustment | Merisant and Mafco Worldwide | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Transaction costs | $ 1,100 | |||||||
Restatement adjustment | ASU 2017-07 | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Operating profit | $ 100 |
BUSINESS COMBINATIONS - Prelimi
BUSINESS COMBINATIONS - Preliminary Purchase Consideration (Details) - USD ($) $ in Thousands | Feb. 05, 2021 | Nov. 10, 2020 | Jun. 25, 2020 | Sep. 30, 2020 | Sep. 30, 2021 | Jun. 25, 2020 | Sep. 30, 2021 |
Business Acquisition [Line Items] | |||||||
Base cash consideration | $ 376,674 | $ 0 | $ 190,231 | ||||
Merisant and Mafco Worldwide | |||||||
Business Acquisition [Line Items] | |||||||
Base cash consideration | $ 387,500 | ||||||
Closing adjustment | (764) | ||||||
Total Purchase Price | $ 386,736 | ||||||
Swerve | |||||||
Business Acquisition [Line Items] | |||||||
Base cash consideration | $ 80,000 | ||||||
Closing adjustment | (968) | ||||||
Total Purchase Price | $ 79,032 | ||||||
Wholesome | |||||||
Business Acquisition [Line Items] | |||||||
Base cash consideration | $ 180,000 | ||||||
Closing adjustment | 13,863 | $ 3,600 | |||||
Fair value of Earn-Out Amount | 52,395 | ||||||
Total Purchase Price | $ 246,258 |
BUSINESS COMBINATIONS - Preli_2
BUSINESS COMBINATIONS - Preliminary Allocation of the Purchase Price to Tangible and Identifiable Intangible Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Feb. 05, 2021 | Nov. 10, 2020 | Jun. 25, 2020 | Sep. 30, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||||
Intangible assets | $ 148,750 | ||||
Goodwill | $ 241,154 | $ 153,537 | |||
Merisant and Mafco Worldwide | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | 10,062 | ||||
Accounts receivable | 45,769 | ||||
Inventories | 106,436 | ||||
Prepaid expenses and other current assets | 2,461 | ||||
Property, plant and equipment, net | 43,554 | ||||
Operating lease right-of-use assets | 12,541 | ||||
Intangible assets | 148,750 | ||||
Deferred tax assets, net | 1,065 | ||||
Other assets | 1,398 | ||||
Total assets acquired | 372,036 | ||||
Accounts payable | 18,590 | ||||
Accrued expenses and other current liabilities | 35,063 | ||||
Current portion of operating lease liabilities | 3,007 | ||||
Operating lease liabilities, less current portion | 12,208 | ||||
Deferred tax liabilities, net | 24,630 | ||||
Other liabilities | 16,227 | ||||
Total liabilities assumed | 109,725 | ||||
Net assets acquired | 262,311 | ||||
Goodwill | 124,425 | ||||
Total Purchase Price | $ 386,736 | ||||
Swerve | |||||
Business Acquisition [Line Items] | |||||
Accounts receivable | $ 3,223 | ||||
Inventories | 6,824 | ||||
Prepaid expenses and other current assets | 223 | ||||
Property, plant and equipment, net | 143 | ||||
Operating lease right-of-use assets | 76 | ||||
Intangible assets | 36,300 | ||||
Other assets | 3 | ||||
Total assets acquired | 46,792 | ||||
Accounts payable | 3,477 | ||||
Accrued expenses and other current liabilities | 288 | ||||
Current portion of operating lease liabilities | 48 | ||||
Operating lease liabilities, less current portion | 28 | ||||
Total liabilities assumed | 3,841 | ||||
Net assets acquired | 42,951 | ||||
Goodwill | 36,081 | ||||
Total Purchase Price | $ 79,032 | ||||
Wholesome | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 2,664 | ||||
Accounts receivable | 15,868 | ||||
Inventories | 78,522 | ||||
Prepaid expenses and other current assets | 1,271 | ||||
Property, plant and equipment, net | 3,134 | ||||
Operating lease right-of-use assets | 7,585 | ||||
Intangible assets | 104,500 | ||||
Other assets | 1,189 | ||||
Total assets acquired | 214,733 | ||||
Accounts payable | 5,251 | ||||
Accrued expenses and other current liabilities | 10,576 | ||||
Current portion of operating lease liabilities | 1,435 | ||||
Operating lease liabilities, less current portion | 6,150 | ||||
Deferred tax liabilities, net | 26,685 | ||||
Total liabilities assumed | 50,097 | ||||
Net assets acquired | 164,636 | ||||
Goodwill | 81,622 | ||||
Total Purchase Price | $ 246,258 |
BUSINESS COMBINATIONS - Preli_3
BUSINESS COMBINATIONS - Preliminary Values Allocated to Identifiable Intangible Assets and Their Estimated Useful Lives (Details) - USD ($) $ in Thousands | Feb. 05, 2021 | Nov. 10, 2020 | Jun. 25, 2020 |
Business Acquisition [Line Items] | |||
Intangible assets | $ 148,750 | ||
Merisant and Mafco Worldwide | |||
Business Acquisition [Line Items] | |||
Intangible assets | 148,750 | ||
Merisant and Mafco Worldwide | Product formulations | |||
Business Acquisition [Line Items] | |||
Intangible assets | 10,700 | ||
Merisant and Mafco Worldwide | Customer relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 47,359 | ||
Merisant and Mafco Worldwide | Customer relationships | Minimum | |||
Business Acquisition [Line Items] | |||
Useful life (in Years) | 6 months | ||
Merisant and Mafco Worldwide | Customer relationships | Maximum | |||
Business Acquisition [Line Items] | |||
Useful life (in Years) | 10 years | ||
Merisant and Mafco Worldwide | Tradenames | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 90,691 | ||
Useful life (in Years) | 25 years | ||
Swerve | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 36,300 | ||
Swerve | Customer relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 3,200 | ||
Useful life (in Years) | 10 years | ||
Swerve | Tradenames | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 33,100 | ||
Useful life (in Years) | 25 years | ||
Wholesome | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 104,500 | ||
Wholesome | Customer relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 55,700 | ||
Useful life (in Years) | 10 years | ||
Wholesome | Tradenames | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 48,800 | ||
Useful life (in Years) | 25 years |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - USD ($) $ in Thousands | Feb. 05, 2021 | Nov. 10, 2020 | Jun. 25, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Jun. 30, 2021 | Jun. 25, 2020 | Sep. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||||||||||
Base cash consideration | $ 376,674 | $ 0 | $ 190,231 | ||||||||
Additional earn-out amounts | $ 53,631 | $ 53,631 | 53,631 | $ 0 | |||||||
Merisant and Mafco Worldwide | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Goodwill deductible for income tax purposes | $ 2,500 | 2,500 | |||||||||
Goodwill deductible for income tax purposes, period (in years) | 15 years | ||||||||||
Increase (decrease) in deferred tax liabilities | $ 1,500 | ||||||||||
Increase (decrease) in other liabilities | 700 | ||||||||||
Increase (decrease) in goodwill | $ 2,200 | ||||||||||
Base cash consideration | $ 387,500 | ||||||||||
Increase (decrease) in purchase price | (764) | ||||||||||
Merisant and Mafco Worldwide | Restatement adjustment | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Transaction costs | $ 1,100 | ||||||||||
Merisant and Mafco Worldwide | Act II Global Acquisition Corp | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Transaction costs | $ 18,100 | $ 18,100 | |||||||||
Swerve | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Goodwill deductible for income tax purposes, period (in years) | 15 years | ||||||||||
Closing adjustment period | 1 year | ||||||||||
Transaction costs | 300 | 300 | 300 | ||||||||
Base cash consideration | $ 80,000 | ||||||||||
Increase (decrease) in purchase price | $ (968) | ||||||||||
Wholesome | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Goodwill deductible for income tax purposes | $ 4,700 | ||||||||||
Goodwill deductible for income tax purposes, period (in years) | 9 years | ||||||||||
Closing adjustment period | 1 year | ||||||||||
Increase (decrease) in deferred tax liabilities | (300) | ||||||||||
Increase (decrease) in goodwill | 1,900 | ||||||||||
Base cash consideration | $ 180,000 | ||||||||||
Additional earn-out amounts | 55,000 | ||||||||||
EBITDA Threshold | 30,000 | ||||||||||
Earn-out amounts payable in common stock | 27,500 | ||||||||||
Transaction-related costs | 100 | 4,700 | |||||||||
Increase (decrease) in purchase price | $ 13,863 | 3,600 | |||||||||
Increase (decrease) in inventory | (200) | ||||||||||
Increase (decrease) in prepaid expenses and other current assets | 500 | ||||||||||
Increase (decrease) in property, plant and equipment | 400 | ||||||||||
Increase (decrease) in intangible assets | (1,900) | ||||||||||
Increase (decrease) in other assets | (100) | ||||||||||
Increase (decrease) in accrued expenses and other current liabilities | $ (2,700) | ||||||||||
Product revenue, net | 53,100 | 125,300 | |||||||||
Operating income | $ 7,500 | $ 12,600 |
BUSINESS COMBINATIONS - Pro For
BUSINESS COMBINATIONS - Pro Forma Financial Information (Details) - Merisant And Mafco Worldwide, Swerve, and Wholesome - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Business Acquisition [Line Items] | ||||
Revenue | $ 128,941 | $ 120,968 | $ 381,639 | $ 367,150 |
Net income (loss) | $ 9,613 | $ 5,272 | $ 13,928 | $ (38,626) |
INVENTORIES - Summary of Invent
INVENTORIES - Summary of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 117,445 | $ 66,487 |
Work in process | 1,408 | 562 |
Finished goods | 74,656 | 44,650 |
Total inventories | $ 193,509 | $ 111,699 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Components of Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Other intangible assets subject to amortization, Gross Amount | $ 279,141 | $ 179,032 |
Other intangible assets subject to amortization, Accumulated Amortization | (18,369) | (5,205) |
Other intangible assets subject to amortization, Net Amount | 260,772 | 173,827 |
Total other intangible assets, net | 271,472 | 184,527 |
Goodwill | 241,154 | 153,537 |
Total goodwill and other intangible assets | 512,626 | 338,064 |
Product formulations | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Other intangible assets not subject to amortization | 10,700 | 10,700 |
Customer relationships | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Other intangible assets subject to amortization, Gross Amount | 105,868 | 50,877 |
Other intangible assets subject to amortization, Accumulated Amortization | (11,313) | (3,020) |
Other intangible assets subject to amortization, Net Amount | $ 94,555 | 47,857 |
Customer relationships | Minimum | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Other intangible assets subject to amortization, Useful life (in years) | 5 years | |
Customer relationships | Maximum | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Other intangible assets subject to amortization, Useful life (in years) | 10 years | |
Tradenames | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Other intangible assets subject to amortization, Gross Amount | $ 173,273 | 128,155 |
Other intangible assets subject to amortization, Accumulated Amortization | (7,056) | (2,185) |
Other intangible assets subject to amortization, Net Amount | $ 166,217 | $ 125,970 |
Other intangible assets subject to amortization, Useful life (in years) | 25 years |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2020 | Jun. 25, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Goodwill [Line Items] | ||||||
Goodwill | $ 241,154 | $ 241,154 | $ 153,537 | |||
Amortization of intangible assets | 4,675 | $ 2,700 | $ 2,841 | $ 4,927 | 13,532 | |
Branded CPG | ||||||
Goodwill [Line Items] | ||||||
Goodwill | 237,400 | 237,400 | 150,300 | |||
Flavors & Ingredients | ||||||
Goodwill [Line Items] | ||||||
Goodwill | $ 3,800 | $ 3,800 | $ 3,200 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization Expense (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2021 | $ 4,679 |
2022 | 18,717 |
2023 | 18,717 |
2024 | 18,717 |
2025 | 18,483 |
2026 | $ 18,263 |
DEBT - Components of Debt (Deta
DEBT - Components of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Current portion of long-term debt | $ (3,750) | $ (7,000) |
Less: unamortized discount and debt issuance costs | (10,305) | (4,693) |
Long-term debt | 384,070 | 172,662 |
Secured Debt | Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 373,125 | |
Secured Debt | Senior secured first lien term loan facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 136,500 | |
First lien revolving loan facility | First Lien Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 25,000 | $ 47,855 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | Feb. 05, 2021USD ($) | Feb. 04, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 25, 2020USD ($) | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | ||||||||
Gain (loss) on extinguishment of debt | $ 0 | $ 0 | $ 0 | $ 0 | $ (5,513,000) | |||
Credit Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issuance costs | $ 7,800,000 | $ 6,200,000 | ||||||
Gain (loss) on extinguishment of debt | (1,100,000) | $ (4,400,000) | ||||||
Payments of fees to lenders | 3,800,000 | |||||||
Transaction costs | $ 8,900,000 | |||||||
Credit Facilities | Debt Redemption, Term 1 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, redemption price (as a percent) | 100.00% | |||||||
Dispositions of property, minimum amount | $ 5,000,000 | |||||||
Credit Facilities | Debt Redemption, Term 2 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, redemption price (as a percent) | 100.00% | |||||||
Credit Facilities | Debt Redemption, Term 3 | ||||||||
Debt Instrument [Line Items] | ||||||||
Excess Cash Flow (as a percent) | 50.00% | |||||||
Credit Facilities | Debt Redemption, Term 3 | Debt Instrument, Agreement Requirements, Requirement One | ||||||||
Debt Instrument [Line Items] | ||||||||
Excess Cash Flow upon satisfaction of agreement requirements (as a percent) | 25.00% | |||||||
Maximum net leverage ratio | 3.50 | |||||||
Minimum net leverage ratio | 3 | |||||||
Quarterly amortization payments (as a percent) | 0.25% | |||||||
Credit Facilities | Debt Redemption, Term 3 | Debt Instrument, Agreement Requirements, Requirement Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Excess Cash Flow upon satisfaction of agreement requirements (as a percent) | 0.00% | |||||||
Maximum net leverage ratio | 3 | |||||||
First lien revolving loan facility | First Lien Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding letter of credit | 2,100,000 | 2,100,000 | ||||||
Long-term line of credit | $ 47,900,000 | |||||||
First lien revolving loan facility | Revolving Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 75,000,000 | |||||||
Commitment fee (as a percent) | 0.50% | |||||||
Secured Debt | Senior secured first lien term loan facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt | 131,800,000 | |||||||
Debt issuance costs | 4,700,000 | |||||||
Secured Debt | Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 375,000,000 | |||||||
Letter of Credit | Revolving Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | 15,000,000 | |||||||
Bridge Loan | Revolving Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 15,000,000 | |||||||
Senior secured first lien term loan facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | 140,000,000 | |||||||
First lien revolving loan facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | 50,000,000 | |||||||
Outstanding letter of credit | 2,100,000 | |||||||
Issuance costs capitalized | $ 1,900,000 | $ 1,900,000 | $ 1,700,000 | |||||
Base Rate | Credit Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 2.75% | |||||||
Base Rate | Secured Debt | Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 3.50% | |||||||
Base Rate | Maximum | Credit Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 0.00% | |||||||
LIBOR | Credit Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 3.75% | |||||||
LIBOR | First lien revolving loan facility | Revolving Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Floor rate (as a percent) | 0.00% | |||||||
LIBOR | Secured Debt | Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 4.50% | |||||||
Floor rate (as a percent) | 1.00% | |||||||
LIBOR | Maximum | First lien revolving loan facility | Revolving Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 1.00% | |||||||
LIBOR | Maximum | Secured Debt | Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 2.00% | |||||||
Fed Funds Effective Rate Overnight Index Swap Rate | Maximum | First lien revolving loan facility | Revolving Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 0.50% |
WARRANTS (Details)
WARRANTS (Details) - $ / shares | 9 Months Ended | ||
Sep. 30, 2021 | Dec. 31, 2020 | Jun. 25, 2020 | |
Class of Warrant or Right [Line Items] | |||
Warrants outstanding (in shares) | 20,263,500 | ||
Exercise price of warrants or rights (in dollars per share) | $ 11.50 | ||
Expiration of warrants (in years) | 5 years | ||
Warrants exercised (in shares) | 100 | ||
Shares called upon exercise of warrants (in shares) | 50 | 2,631,750 | |
Common Class A | |||
Class of Warrant or Right [Line Items] | |||
Number of securities called by each warrant or right (in shares) | 0.50 | ||
Public Warrants | |||
Class of Warrant or Right [Line Items] | |||
Warrants outstanding (in shares) | 18,929,980 | 15,982,520 | 15,000,000 |
Redemption price (in dollars per share) | $ 0.01 | ||
Minimum prior written notice of redemption period | 30 days | ||
Trading days within trading day period | 20 days | ||
Trading day period | 30 days | ||
Last sale price of ordinary shares (in dollars per share) | $ 18 | ||
Private Placement | |||
Class of Warrant or Right [Line Items] | |||
Warrants outstanding (in shares) | 1,333,420 | 4,280,980 | 5,263,500 |
Period after closing of transaction | 30 days |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Fair Value Assumptions (Details) | Sep. 30, 2021$ / shares | Jun. 25, 2020 |
Class of Warrant or Right [Line Items] | ||
Warrant, term | 5 years | |
Private Placement | Asset price | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 11.55 | |
Private Placement | Exercise price | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 11.50 | |
Private Placement | Risk-free interest rate | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 0.0070 | |
Private Placement | Expected volatility | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 0.420 | |
Private Placement | Expected term (years) | ||
Class of Warrant or Right [Line Items] | ||
Warrant, term | 3 years 8 months 26 days | |
Private Placement | Dividend yield | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 0 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Class of Warrant or Right [Line Items] | ||
Warrant liabilities | $ 2,507 | $ 0 |
Private Placement | ||
Class of Warrant or Right [Line Items] | ||
Warrant liabilities | $ 2,500 |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Changes in Fair Value of Warrants (Details) - Warrants and Rights Outstanding - Fair Value, Inputs, Level 3 - Private Placement - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | $ 8,240 | $ 7,999 | $ 8,139 |
Transfer of Private Warrants to Public Warrants | (3,555) | (2,502) | |
Change in fair value of warrant liabilities | (2,178) | 241 | 3,523 |
Ending balance | $ 2,507 | $ 8,240 | 7,999 |
Restatement adjustment | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | $ (1,161) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Raw Materials | |
Long-term Purchase Commitment [Line Items] | |
Obligations to purchase raw materials | $ 17.2 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2020 | Jun. 25, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Income Tax Contingency [Line Items] | ||||||
(Benefit) provision for income taxes | $ (445) | $ 1,684 | $ 1,694 | $ (3,482) | $ (8,294) | |
Discrete income tax expense (benefit) | $ (300) | $ 400 | $ (4,800) | |||
Effective tax rate (as a percent) | (5.30%) | (146.30%) | (102.90%) | 9.30% | 106.10% | |
Pretax income (loss) | $ 8,361 | $ (1,151) | $ (1,646) | $ (37,618) | $ (7,818) | |
Discrete tax benefit related to receipt of beneficial tax ruling | 4,000 | |||||
Discrete tax benefit related to reversal of uncertain tax position liabilities as result of lapse of applicable statute of limitations | 1,000 | |||||
Discrete tax benefit related to finalization of federal and state tax returns | 200 | |||||
Deferred tax provision related to tax law change | 500 | |||||
Uncertain tax position liability | 200 | $ 200 | $ 1,200 | |||
Finalization of Federal and State Tax Returns | ||||||
Income Tax Contingency [Line Items] | ||||||
Discrete income tax expense (benefit) | $ (200) |
PENSION BENEFITS - Components o
PENSION BENEFITS - Components of Net Periodic Benefit (Credit) Cost Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2020 | Jun. 25, 2020 | Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |||||
Service cost | $ 15 | $ 47 | $ 47 | $ 41 | $ 47 |
Interest cost | 259 | 273 | 273 | 593 | 778 |
Expected return on plan assets | (398) | (392) | (392) | (817) | (1,197) |
Recognized actuarial loss | 9 | 0 | 0 | 276 | 27 |
Amortization of prior service cost | 0 | 0 | 0 | 33 | 0 |
Settlement/curtailment gain | (97) | 0 | 0 | 0 | (97) |
Net periodic benefit (credit) cost | $ (212) | $ (72) | $ (72) | $ 126 | $ (442) |
Defined Benefit Plan, Type [Extensible List] | us-gaap:PensionPlansDefinedBenefitMember | us-gaap:PensionPlansDefinedBenefitMember |
PENSION BENEFITS - Net Periodic
PENSION BENEFITS - Net Periodic Benefit Costs Reflected in the Company's Financial Statements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2020 | Jun. 25, 2020 | Sep. 30, 2021 | |
Defined Benefit Plan Disclosure | |||||
Net periodic benefit (credit) cost | $ (212) | $ (72) | $ (72) | $ 126 | $ (442) |
Selling, general and administrative expense | |||||
Defined Benefit Plan Disclosure | |||||
Net periodic benefit (credit) cost | 15 | 47 | 47 | 41 | 47 |
Other income, net | |||||
Defined Benefit Plan Disclosure | |||||
Net periodic benefit (credit) cost | $ (227) | $ (119) | $ (119) | $ 85 | $ (489) |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Millions | Jun. 24, 2020 | Sep. 30, 2021 | Sep. 30, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock compensation expense | $ 2.7 | $ 7.2 | |
Restricted Stock Units (RSUs) | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 1 year | ||
Restricted Stock Units (RSUs) | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Management Bonuses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock compensation expense | $ 0.2 | $ 0.6 | |
2020 Long-Term Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of common shares authorized (in shares) | 9,300,000 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Activity Related to RSUs, RSAs and PSUs (Details) | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Restricted Stock Units (RSUs) | |
Shares | |
Beginning balance, outstanding (in shares) | shares | 633,057 |
Granted (in shares) | shares | 553,146 |
Vested (in shares) | shares | (40,659) |
Forfeited (in shares) | shares | (20,345) |
Ending balance, outstanding and nonvested (in shares) | shares | 1,125,199 |
Weighted Average Fair Value | |
Beginning balance, outstanding (in dollars per share) | $ / shares | $ 8.34 |
Granted (in dollars per share) | $ / shares | 13.55 |
Vested (in dollars per share) | $ / shares | 10.23 |
Forfeited (in dollars per share) | $ / shares | 8.34 |
Ending balance, outstanding and nonvested (in dollars per share) | $ / shares | $ 10.90 |
Restricted Stock | |
Shares | |
Beginning balance, outstanding (in shares) | shares | 68,946 |
Granted (in shares) | shares | 0 |
Ending balance, outstanding and nonvested (in shares) | shares | 68,946 |
Weighted Average Fair Value | |
Beginning balance, outstanding (in dollars per share) | $ / shares | $ 8.34 |
Granted (in dollars per share) | $ / shares | 0 |
Ending balance, outstanding and nonvested (in dollars per share) | $ / shares | $ 8.34 |
Performance Shares | |
Shares | |
Beginning balance, outstanding (in shares) | shares | 0 |
Granted (in shares) | shares | 323,555 |
Ending balance, outstanding and nonvested (in shares) | shares | 323,555 |
Weighted Average Fair Value | |
Beginning balance, outstanding (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 13.65 |
Ending balance, outstanding and nonvested (in dollars per share) | $ / shares | $ 13.65 |
STOCK-BASED COMPENSATION - Unre
STOCK-BASED COMPENSATION - Unrecognized Compensation Cost on Nonvested Awards (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Share-based Payment Arrangement [Abstract] | |
Unrecognized Compensation Cost | $ 10,096 |
Weighted Avg. Remaining Recognition Period (in years) | 1 year 21 days |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | Sep. 08, 2020 | Sep. 30, 2021 |
Equity [Abstract] | ||
Stock repurchase program, authorized amount | $ 20,000,000 | |
Stock repurchase program, period in force | 12 months | |
Stock repurchased during period | $ 0 |
EARNINGS PER SHARE - Computatio
EARNINGS PER SHARE - Computation of Basic and Diluted Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2021 | |
EPS numerator: | ||||
Net income (loss) attributable to common shareholders | $ 8,806 | $ (2,835) | $ (3,340) | $ 476 |
Less: Change in fair value of warrant liabilities | (2,178) | 0 | 0 | 0 |
Numerator - diluted | $ 6,628 | $ (2,835) | $ (3,340) | $ 476 |
EPS denominator: | ||||
Weighted average shares outstanding - basic | 38,492,878 | 38,426,669 | 38,426,669 | 38,453,611 |
Effect of dilutive securities | 1,372,872 | 0 | 0 | 1,493,119 |
Weighted average shares outstanding - diluted | 39,865,750 | 38,426,669 | 38,426,669 | 39,946,730 |
Net earnings (loss) per share: | ||||
Basic (in dollars per share) | $ 0.23 | $ (0.07) | $ (0.09) | $ 0.01 |
Diluted (in dollars per share) | $ 0.17 | $ (0.07) | $ (0.09) | $ 0.01 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) - shares | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2021 | |
Warrant | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 10,131,748 | 10,131,748 | 142,702 |
Restricted Stock Units (RSUs) | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 719,038 | 719,038 | |
Restricted Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 68,946 | 68,946 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 26, 2020 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 25, 2020 | Mar. 31, 2020 |
AOCI Attributable to Parent, Net of Tax | ||||||||
Beginning balance | $ 233,666 | $ 302,148 | $ 290,785 | $ 308,846 | $ 308,176 | $ 444,997 | $ 487,750 | |
Other comprehensive income (loss) before reclassifications | $ 15 | (3,309) | 5,267 | (2,047) | 3,130 | (402) | (1,884) | |
Amounts reclassified from AOCI | (88) | 9 | 9 | 270 | 48 | |||
Purchase accounting adjustments to eliminate Predecessor’s accumulated other comprehensive loss (income) | 10,027 | |||||||
Ending balance | 308,176 | 313,532 | 302,148 | 290,785 | 307,221 | 233,666 | 444,997 | |
Predecessors | ||||||||
AOCI Attributable to Parent, Net of Tax | ||||||||
Beginning balance | 439,722 | |||||||
Ending balance | 439,722 | |||||||
Total Accumulated Other Comprehensive Income (Loss) | ||||||||
AOCI Attributable to Parent, Net of Tax | ||||||||
Beginning balance | 0 | 0 | 11,843 | 6,567 | 8,605 | 15 | (9,895) | (8,059) |
Ending balance | 15 | 0 | 8,446 | 11,843 | 6,567 | 3,145 | 0 | (9,895) |
Total Accumulated Other Comprehensive Income (Loss) | Predecessors | ||||||||
AOCI Attributable to Parent, Net of Tax | ||||||||
Beginning balance | (10,027) | |||||||
Ending balance | (10,027) | |||||||
Net Currency Translation Gains (Losses) | ||||||||
AOCI Attributable to Parent, Net of Tax | ||||||||
Beginning balance | 0 | 11,049 | 5,727 | 7,774 | 15 | 1,001 | 2,885 | |
Other comprehensive income (loss) before reclassifications | 15 | (3,599) | 5,322 | (2,047) | 3,130 | (402) | (1,884) | |
Amounts reclassified from AOCI | 0 | 0 | 0 | 0 | 0 | |||
Purchase accounting adjustments to eliminate Predecessor’s accumulated other comprehensive loss (income) | (599) | |||||||
Ending balance | 15 | 0 | 7,450 | 11,049 | 5,727 | 3,145 | 1,001 | |
Net Currency Translation Gains (Losses) | Predecessors | ||||||||
AOCI Attributable to Parent, Net of Tax | ||||||||
Beginning balance | 599 | |||||||
Ending balance | 599 | |||||||
Funded Status of Benefit Plans | ||||||||
AOCI Attributable to Parent, Net of Tax | ||||||||
Beginning balance | 0 | 794 | 840 | 831 | 0 | (10,896) | (10,944) | |
Other comprehensive income (loss) before reclassifications | 0 | 290 | (55) | 0 | 0 | 0 | 0 | |
Amounts reclassified from AOCI | (88) | 9 | 9 | 270 | 48 | |||
Purchase accounting adjustments to eliminate Predecessor’s accumulated other comprehensive loss (income) | 10,626 | |||||||
Ending balance | $ 0 | 0 | $ 996 | $ 794 | $ 840 | $ 0 | $ (10,896) | |
Funded Status of Benefit Plans | Predecessors | ||||||||
AOCI Attributable to Parent, Net of Tax | ||||||||
Beginning balance | $ (10,626) | |||||||
Ending balance | $ (10,626) |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | |
Mar. 31, 2018 | Sep. 30, 2021 | Jun. 25, 2020 | Sep. 30, 2021 | Jul. 31, 2020 | |
Wesco US LLC | |||||
Related Party Transaction [Line Items] | |||||
Maximum outstanding borrowings | $ 9,000,000 | ||||
Remaining balance forgiven | $ 3,400,000 | ||||
Interest expense | $ 200,000 | ||||
Wesco US LLC | LIBOR | |||||
Related Party Transaction [Line Items] | |||||
Basis spread on variable rate (as a percent) | 4.00% | ||||
Watermill | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 900,000 | ||||
Related party transactions | $ 100,000 | $ 500,000 | |||
Watermill | Wholesome | |||||
Related Party Transaction [Line Items] | |||||
Related party transactions | $ 2,000,000 |
BUSINESS SEGMENTS - Narrative (
BUSINESS SEGMENTS - Narrative (Details) | 9 Months Ended |
Sep. 30, 2021segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
BUSINESS SEGMENTS - Schedule of
BUSINESS SEGMENTS - Schedule of Selected Financial Information Relating to the Business' Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2020 | Jun. 25, 2020 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | |||||
Product revenues, net | $ 128,941 | $ 67,002 | $ 71,480 | $ 128,328 | $ 361,259 |
Operating income (loss) | 13,516 | 1,064 | 747 | (38,181) | 16,427 |
Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Operating income (loss) | 19,610 | 6,703 | 6,569 | (28,773) | 44,737 |
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Operating income (loss) | (6,094) | (5,639) | (5,822) | (9,408) | (28,310) |
Branded CPG | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Product revenues, net | 102,693 | 41,006 | 43,557 | 80,749 | 283,585 |
Operating income (loss) | 10,090 | 7,138 | 7,215 | (5,055) | 30,507 |
Flavors & Ingredients | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Product revenues, net | 26,248 | 25,996 | 27,923 | 47,579 | 77,674 |
Operating income (loss) | $ 9,520 | $ (435) | $ (646) | $ (23,718) | $ 14,230 |
BUSINESS SEGMENTS - Revenue Dis
BUSINESS SEGMENTS - Revenue Disaggregated by Geographic Operating Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2020 | Jun. 25, 2020 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | |||||
Product revenues, net | $ 128,941 | $ 67,002 | $ 71,480 | $ 128,328 | $ 361,259 |
Branded CPG | North America | |||||
Segment Reporting Information [Line Items] | |||||
Product revenues, net | 72,285 | 14,642 | 15,514 | 29,927 | 190,699 |
Branded CPG | Europe | |||||
Segment Reporting Information [Line Items] | |||||
Product revenues, net | 18,197 | 16,934 | 17,816 | 31,837 | 58,135 |
Branded CPG | India, Middle East and Africa | |||||
Segment Reporting Information [Line Items] | |||||
Product revenues, net | 3,267 | 2,262 | 2,493 | 3,778 | 9,522 |
Branded CPG | Asia-Pacific | |||||
Segment Reporting Information [Line Items] | |||||
Product revenues, net | 5,732 | 3,820 | 4,189 | 9,328 | 16,552 |
Branded CPG | Latin America | |||||
Segment Reporting Information [Line Items] | |||||
Product revenues, net | $ 3,212 | $ 3,348 | $ 3,545 | $ 5,879 | $ 8,677 |