Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 01, 2024 | Jul. 02, 2023 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 001-41059 | ||
Entity Registrant Name | Lulu’s Fashion Lounge Holdings, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 20-8442468 | ||
Entity Address, Address Line One | 195 Humboldt Avenue | ||
Entity Address, City or Town | Chico | ||
Entity Address State Or Province | CA | ||
Entity Address, Postal Zip Code | 95928 | ||
City Area Code | 530 | ||
Local Phone Number | 343-3545 | ||
Title of 12(b) Security | Common stock, $0.001 par value per share | ||
Trading Symbol | LVLU | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 23.6 | ||
Entity Common Stock, Shares Outstanding | 40,877,994 | ||
Entity Central Index Key | 0001780201 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | Deloitte & Touche LLP | ||
Auditor Firm ID | 34 | ||
Auditor Location | San Francisco, California |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Jan. 01, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 2,506 | $ 10,219 |
Accounts receivable | 3,542 | 3,908 |
Inventory, net | 35,472 | 43,186 |
Assets for recovery | 3,111 | 3,890 |
Income tax refund receivable | 2,510 | 4,078 |
Prepaids and other current assets | 5,379 | 3,738 |
Total current assets | 52,520 | 69,019 |
Property and equipment, net | 4,712 | 4,391 |
Goodwill | 35,430 | 35,430 |
Tradename | 18,509 | 18,509 |
Intangible assets, net | 3,263 | 3,090 |
Lease right-of-use assets | 29,516 | 32,514 |
Other noncurrent assets | 5,495 | 4,251 |
Total assets | 149,445 | 167,204 |
Current liabilities: | ||
Accounts payable | 8,900 | 5,320 |
Accrued expenses and other current liabilities | 18,343 | 17,976 |
Returns reserve | 7,854 | 9,066 |
Stored-value card liability | 13,142 | 10,828 |
Revolving line of credit | 8,000 | |
Lease liabilities, current | 5,648 | 4,456 |
Total current liabilities | 61,887 | 47,646 |
Revolving line of credit, noncurrent | 25,000 | |
Lease liabilities, noncurrent | 25,427 | 29,042 |
Other noncurrent liabilities | 1,179 | 623 |
Total liabilities | 88,493 | 102,311 |
Commitments and Contingencies (Note 7) | ||
Stockholders' equity: | ||
Preferred stock: $0.001 par value, 10,000,000 shares authorized, and no shares issued or outstanding | ||
Common stock: $0.001 par value, 250,000,000 shares authorized; and 40,618,206 and 39,259,328 shares issued and outstanding as of December 31, 2023 and January 1, 2023, respectively | 41 | 39 |
Additional paid-in capital | 254,116 | 238,725 |
Accumulated deficit | (193,205) | (173,871) |
Total stockholders' equity | 60,952 | 64,893 |
Total liabilities and stockholders' equity | $ 149,445 | $ 167,204 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Jan. 01, 2023 |
Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock issued | 0 | 0 |
Preferred stock outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 40,618,206 | 39,259,328 |
Common stock, shares outstanding | 40,618,206 | 39,259,328 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | |
Consolidated Statements of Operations and Comprehensive Income (Loss) | |||
Net revenue | $ 355,175 | $ 439,652 | $ 375,625 |
Cost of revenue | 206,949 | 248,206 | 198,893 |
Gross profit | 148,226 | 191,446 | 176,732 |
Selling and marketing expenses | 76,312 | 83,559 | 66,684 |
General and administrative expenses | 92,129 | 99,148 | 87,710 |
Income (loss) from operations | (20,215) | 8,739 | 22,338 |
Other income (expense), net: | |||
Interest expense | (1,728) | (1,103) | (12,774) |
Loss on extinguishment of debt | (1,392) | ||
Other income, net | 933 | 136 | 85 |
Income (loss) before provision (benefit) for income taxes | (21,010) | 7,772 | 8,257 |
Income tax provision (benefit) | (1,676) | 4,047 | 6,212 |
Net income (loss) and comprehensive income (loss) | (19,334) | 3,725 | 2,045 |
Deemed dividend to preferred stockholders | (122,962) | ||
Stock dividend issued to LP | (3,451) | ||
Deemed contribution from redemption of redeemable preferred stock | 1,420 | ||
Net income (loss) attributable to common stockholders | $ (19,334) | $ 3,725 | $ (122,948) |
Basic earnings (loss) per share (In dollars per share) | $ (0.48) | $ 0.10 | $ (6.08) |
Diluted earnings (loss) per share (In dollars per share) | $ (0.48) | $ 0.10 | $ (6.08) |
Basic weighted-average shares outstanding (In shares) | 39,879,121 | 38,583,854 | 20,229,675 |
Diluted weighted-average shares outstanding (In shares) | 39,879,121 | 38,853,393 | 20,229,675 |
Consolidated Statements of Rede
Consolidated Statements of Redeemable Preferred Stock, Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Common Stock. IPO Lulu's Holdings, L.P | Common Stock. IPO | Common Stock. | Additional Paid-In Capital IPO | Additional Paid-In Capital | Accumulated Deficit | Redeemable Preferred Stock | Convertible Preferred Stock IPO | Convertible Preferred Stock | IPO | Total |
Balance at Jan. 03, 2021 | $ 16,412 | $ 117,038 | |||||||||
Balance (in shares) at Jan. 03, 2021 | 7,500,001 | 3,129,634 | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Series B-1 redeemable preferred stock issuance | $ 2,908 | ||||||||||
Series B-1 redeemable preferred stock issuance (in shares) | 1,450,000 | ||||||||||
Conversion of convertible preferred stock to common stock upon the IPO | $ (240,000) | ||||||||||
Conversion of convertible preferred stock to common stock upon the IPO (in shares) | (3,129,634) | ||||||||||
Redemption of redeemable preferred stock upon the IPO | $ (19,320) | ||||||||||
Redemption of redeemable preferred stock upon the IPO (in shares) | (8,950,001) | ||||||||||
Balance at Jan. 03, 2021 | $ 18 | $ 10,622 | $ (179,641) | $ (169,001) | |||||||
Balance (in shares) at Jan. 03, 2021 | 17,462,283 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Forfeited shares of unvested restricted stock (in shares) | (6,861) | ||||||||||
Equity-based compensation expense | 8,145 | 8,145 | |||||||||
Stock issuance | $ 5 | $ 81,983 | $ 81,988 | ||||||||
Stock issuance (in shares) | 215,702 | 5,750,000 | |||||||||
Deemed dividend to convertible preferred stockholders upon the IPO | (122,962) | $ 122,962 | (122,962) | ||||||||
Conversion of convertible preferred stock to common stock | $ 15 | $ 239,985 | $ 240,000 | ||||||||
Conversion of convertible preferred stock to common stock (in shares) | (15,000,000) | ||||||||||
Reclassification of liability-classified CEO award to equity-classified awards | 2,887 | 2,887 | |||||||||
Redemption of redeemable preferred stock upon the IPO | 1,420 | 1,420 | |||||||||
Net (loss) income and comprehensive (loss) income | 2,045 | 2,045 | |||||||||
Balance at Jan. 02, 2022 | $ 38 | 222,080 | (177,596) | 44,522 | |||||||
Balance (in shares) at Jan. 02, 2022 | 38,421,124 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of common stock for vesting of restricted stock units (RSUs) | $ 1 | (1) | |||||||||
Issuance of common stock for vesting of restricted stock units (RSUs) (shares) | 791,064 | ||||||||||
Issuance of common stock for special compensation award (shares) | 208,914 | ||||||||||
Shares withheld for withholding tax on RSUs | (1,200) | (1,200) | |||||||||
Shares withheld for withholding tax on RSUs (in shares) | (139,081) | ||||||||||
Offering costs related to IPO | (290) | (290) | |||||||||
Forfeited shares of unvested restricted stock (in shares) | (22,693) | ||||||||||
Settlement of distributions payable to former Class P unit holders | 2,648 | 2,648 | |||||||||
Equity-based compensation expense | 15,488 | 15,488 | |||||||||
Net (loss) income and comprehensive (loss) income | 3,725 | 3,725 | |||||||||
Balance at Jan. 01, 2023 | $ 39 | 238,725 | (173,871) | 64,893 | |||||||
Balance (in shares) at Jan. 01, 2023 | 39,259,328 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of common stock for vesting of restricted stock units (RSUs) | $ 2 | 2 | |||||||||
Issuance of common stock for vesting of restricted stock units (RSUs) (shares) | 1,932,500 | ||||||||||
Issuance of common stock for special compensation award (shares) | 208,914 | ||||||||||
Issuance of common stock for employee stock purchase plan (ESPP) | 487 | 487 | |||||||||
Issuance of common stock for employee stock purchase plan (ESPP) (in shares) | 100,277 | ||||||||||
Shares withheld for withholding tax on RSUs | (1,961) | (1,961) | |||||||||
Shares withheld for withholding tax on RSUs (in shares) | (878,183) | ||||||||||
Forfeited shares of unvested restricted stock (in shares) | (4,630) | ||||||||||
Equity-based compensation expense | 16,489 | 16,489 | |||||||||
Net (loss) income and comprehensive (loss) income | (19,334) | (19,334) | |||||||||
Balance at Dec. 31, 2023 | $ 41 | $ 254,116 | $ (193,205) | $ 60,952 | |||||||
Balance (in shares) at Dec. 31, 2023 | 40,618,206 |
Consolidated Statements of Re_2
Consolidated Statements of Redeemable Preferred Stock, Convertible Preferred Stock and Stockholders' Equity (Deficit) (Parenthetical) $ in Thousands | 12 Months Ended |
Jan. 02, 2022 USD ($) | |
IPO | |
Underwriting discounts and commissions and issuance costs | $ 10,016 |
Series B-1 Redeemable Preferred Stock | |
Issuance costs | $ 23 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | |
Cash Flows from Operating Activities | |||
Net income (loss) | $ (19,334) | $ 3,725 | $ 2,045 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 4,819 | 4,134 | 2,828 |
Noncash lease expense | 3,663 | 3,257 | |
Loss on debt extinguishment | 1,392 | ||
Amortization of debt discount and debt issuance costs | 156 | 157 | 2,283 |
Interest expense capitalized to principal of long-term debt and revolving line of credit | 2,074 | ||
Payment of interest capitalized to principal of long-term debt and revolving line of credit | (3,821) | ||
Loss on disposal of property and equipment | 19 | 18 | 9 |
Equity-based compensation expense | 17,694 | 16,087 | 13,664 |
Equity-based compensation expense related to redeemable preferred stock issuance | 1,481 | ||
Deferred income taxes | (2,539) | 1,658 | (1,663) |
Changes in operating assets and liabilities: | |||
Accounts receivable | 366 | 1,740 | (1,816) |
Inventories | 7,714 | (21,010) | (5,281) |
Assets for recovery | 779 | (136) | (2,650) |
Income taxes (receivable) payable | 2,752 | (4,364) | 2,094 |
Prepaid and other current assets | (1,803) | 694 | (2,721) |
Accounts payable | 3,580 | 1,148 | (2,895) |
Accrued expenses and other current liabilities | 918 | 1,691 | 21,263 |
Operating lease liabilities | (3,317) | (2,608) | |
Other noncurrent liabilities | (46) | 8 | (1,390) |
Net cash provided by operating activities | 15,421 | 6,199 | 26,896 |
Cash Flows from Investing Activities | |||
Capitalized software development costs | (2,055) | (2,500) | (1,522) |
Purchases of property and equipment | (1,880) | (2,511) | (1,447) |
Other | (68) | (112) | (425) |
Net cash used in investing activities | (4,003) | (5,123) | (3,394) |
Cash Flows from Financing Activities | |||
Proceeds from borrowings on revolving line of credit | 13,000 | 30,000 | 25,000 |
Repayments on revolving line of credit | (30,000) | (30,000) | (8,580) |
Proceeds from issuance of common stock under employee stock purchase plan (ESPP) | 487 | ||
Repayment of long-term debt | (109,608) | ||
Payment of debt issuance costs | (514) | ||
Issuance of common stock upon IPO, net of underwriting discounts and commissions and issuance costs | 82,546 | ||
Proceeds from the issuance of redeemable preferred stock, net of issuance costs | 1,427 | ||
Redemption of redeemable preferred stock | (17,900) | ||
Principal payments on finance lease obligations | (983) | (786) | |
Payment of offering costs related to the IPO | (832) | ||
Withholding tax payments related to vesting of RSUs | (1,629) | (1,115) | |
Other | (6) | (32) | (24) |
Net cash (used in) provided by financing activities | (19,131) | (2,765) | (27,653) |
Net (decrease) increase in cash, cash equivalents and restricted cash | (7,713) | (1,689) | (4,151) |
Cash, cash equivalents and restricted cash at beginning of period | 10,219 | 11,908 | 16,059 |
Cash, cash equivalents and restricted cash at end of period | 2,506 | 10,219 | 11,908 |
Reconciliation of cash, cash equivalents and restricted cash | |||
Cash and cash equivalents | 2,506 | 10,219 | 11,402 |
Restricted cash | 506 | ||
Cash, cash equivalents and restricted cash at end of period | 2,506 | 10,219 | 11,908 |
Supplemental Disclosure | |||
Income taxes, net | (1,947) | 6,436 | 6,112 |
Interest | 1,632 | 893 | 8,555 |
Operating leases | 5,191 | 4,706 | |
Finance leases | 1,111 | 786 | |
Supplemental Disclosure of Non-Cash Investing and Financing Activities | |||
Addition of right-of-use assets, including prepaid rent, net of deferred rent recorded upon adoption of ASC 842 | 28,018 | ||
Addition of lease liabilities recorded upon adoption of ASC 842 | 28,599 | ||
Right-of-use assets acquired under operating lease obligations | 1,053 | 2,299 | |
Remeasurement of operating lease right-of-use assets for lease modification | 1,616 | ||
Assets acquired under finance lease obligations | 983 | 4,750 | |
Prepaid rent reclassified to lease right-of-use assets | 381 | ||
Purchases of property and equipment included in accounts payable and accrued expenses | $ 175 | $ 259 | 55 |
Deemed dividend to preferred stockholders | (122,962) | ||
Paid-in-kind interest added to principal balance of long-term debt and revolving line of credit | 2,074 | ||
Offering costs included in accrued expenses | 542 | ||
Deemed contribution from redemption of redeemable preferred stock | 1,420 | ||
Conversion of convertible preferred stock to common stock upon the IPO | 240,000 | ||
Reclassification of CEO special compensation award from a liability award to an equity award | $ 2,887 |
Description of Business, Organi
Description of Business, Organization and Liquidity | 12 Months Ended |
Dec. 31, 2023 | |
Description of Business, Organization and Liquidity | |
Description of Business, Organization and Liquidity | 1. Organization and Business Pursuant to a reorganization, Lulu’s Fashion Lounge Holdings, Inc., a Delaware Corporation (“Lulus”, “we”, “our”, or the “Company”), was formed on August 25, 2017 as a holding company and its primary asset is an indirect membership interest in Lulu’s Fashion Lounge, LLC (“Lulus LLC”). Prior to the Company’s initial public offering, the Company was majority-owned by Lulu’s Holdings, L.P. (the “LP”). In connection with the Company’s initial public offering, the LP was liquidated. Lulus LLC was founded in 1996, starting as a vintage boutique in Chico, CA that began selling online in 2005 and transitioned to a purely online business in 2008. The LP was formed in 2014 as a holding company and purchased 100% of Lulus LLC’s outstanding common stock in 2014. The Company, through Lulus LLC, is a customer-driven, digitally-native, attainable luxury fashion brand for women, offering modern, unapologetically feminine designs at accessible prices for all of life’s fashionable moments based in Chico, CA. Initial Public Offering On November 10, 2021, the Company’s registration statement on Form S-1 relating to its initial public offering (“IPO”) was declared effective by the Securities and Exchange Commission (“SEC”) and the shares of its common stock began trading on the Nasdaq Global Market on November 11, 2021. The IPO closed on November 15, 2021, pursuant to which the Company issued and sold 5,750,000 shares of its common stock at a public offering price of $16.00 per share. On November 15, 2021, the Company received net proceeds of approximately $82.0 million from the IPO, after deducting underwriting discounts and commissions of approximately $6.1 million and other issuance costs of approximately $3.9 million. Immediately prior to the completion of the IPO, the Company filed an amended and restated certificate of incorporation, which authorized a total of 250,000,000 shares of common stock at $0.001 par value per share, and 10,000,000 shares of preferred stock, $0.001 par value per share. Immediately prior to the completion of the IPO, all shares of the Series A Preferred Stock then outstanding were converted into 15,000,000 shares of common stock. Additionally, 215,702 shares of common stock were issued to the LP immediately prior to the completion of the IPO. All shares of the Series B Preferred Stock and the Series B-1 Preferred Stock were redeemed and extinguished for a total payment of approximately $17.9 million on November 15, 2021. Impact of Macroeconomic Trends on Business Changing macroeconomic factors, including inflation, interest rates, student loan repayment resumption, as well as world events, such as the war in Israel and Russia’s war against Ukraine, and overall consumer confidence with respect to current and future economic conditions have impacted our sales in fiscal 2023 as discretionary consumer spending levels and shopping behavior fluctuate with these factors. During fiscal 2023, we responded to these factors, as needed, by taking appropriate pricing, promotional and other actions to stimulate customer demand. These factors may continue to have an impact on our business, results of operations, our growth and financial condition. Liquidity The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of December 31, 2023, the Company had total cash and cash equivalents of $2.5 million and amounts due under the revolving line of credit of $8.0 million. In November 2021 the Company entered into a Credit Agreement (the “2021 Credit Agreement”) to provide a Revolving Facility (the “2021 Revolving Facility”) that provides for borrowings up to $50.0 million. The 2021 Credit Agreement contains various financial covenants and matures on November 15, 2024 as described in Note 5, Debt. The Company is evaluating sources of debt financing. However, the Company believes the cash on hand and cash provided by operations in conjunction with certain cash conservation measures to be taken as necessary, including adjustments to marketing and other variable and capital spend, will enable the Company to meet its obligations as they become due within one year. The consolidated financial statements do not reflect any adjustments relating to the outcome of this uncertainty. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Significant Accounting Policies | |
Significant Accounting Policies | 2. Basis of Presentation and Fiscal Year The Company’s fiscal year consists of a 52-week or 53-week period ending on the Sunday nearest December 31. The fiscal years ending December 31, 2023 (“2023”), ended January 1, 2023 (“2022) and ended January 2, 2022 (“2021”) consisted of 52-weeks. The consolidated financial statements and accompanying notes include the accounts of the Company and its wholly owned subsidiaries, after elimination of all intercompany balances and transactions. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the requirements of the Securities and Exchange Commission. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The significant estimates and assumptions made by management relate to sales return reserves and related assets for recovery, lease right-of-use assets and related lease liabilities, income tax valuation allowance and fair value of equity awards. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. As future events and their effects cannot be determined with precision, actual results could materially differ from those estimates and assumptions. Segment Reporting The Company manages its business on the basis of one operating and reportable Concentration of Credit Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents and restricted cash. Such amounts may exceed federally insured limits. The Company reduces credit risk by depositing its cash with major credit-worthy financial institutions within the United States. To date, the Company has not experienced any losses on its cash deposits. As of December 31, 2023, no single customer represented greater than 10% of the Company’s accounts receivable balance. As of January 1, 2023, a single wholesale customer represented 15% of the Company’s accounts receivable balance. No single customer accounted for greater than 10% of the Company’s net revenue during 2023, 2022 and 2021. Accounts Receivable Accounts receivable consist primarily of receivables from credit card processing agencies and wholesale customers. Based on historical collections from these agencies and wholesale customers, no allowance for doubtful accounts was deemed necessary as of December 31, 2023 and January 1, 2023. Inventory Inventory consists of finished goods, which are recorded at the lower of cost or net realizable value, with cost determined using the first-in-first-out method. The cost of inventory consists of merchandise costs and inbound freight costs. Inventory levels are reviewed to identify slow-moving merchandise, and promotions and markdowns are used to clear merchandise. In the period in which the Company determines estimated selling price, less costs to sell, is below cost, or identifies excess, obsolete, or unsalable items, the Company writes its inventory down to its net realizable value. Property and Equipment, net Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives, which range from 3 to 9 years. Improvements that extend the life of a specific asset are capitalized, while normal maintenance and repairs are expensed as incurred. When assets are sold or otherwise retired, their cost and related accumulated depreciation are removed from the balance sheet with any resulting gain or loss reflected in general and administrative expenses in the consolidated statements of operations and comprehensive income (loss). Goodwill and Tradename Goodwill is stated at the excess of the acquisition price over the fair value of net assets acquired in a purchase acquisition and is not amortized. Goodwill arose from the LP’s purchase of 100% of the outstanding common stock of Lulus LLC on July 25, 2014 and the Company has one reporting unit. The Company’s tradename is an indefinite-lived intangible asset and is not amortized. The Company reviews its goodwill and tradename for impairment at least annually (on the first day of the fourth quarter) or more frequently whenever events or changes in circumstances indicate that the carrying amount may be impaired. When testing goodwill for impairment, the Company first performs an assessment of qualitative factors (“Step 0 Test”). The qualitative assessment includes assessing the totality of relevant events and circumstances that affect the fair value or carrying value of the reporting unit. These events and circumstances include macroeconomic conditions, industry and competitive environment conditions, overall financial performance, reporting unit specific events and market considerations. The Company also considers recent valuations of the reporting unit, including the magnitude of the difference between the most recent fair value estimate and the carrying value, as well as both positive and adverse events and circumstances, and the extent to which each of the events and circumstances identified may affect the comparison of a reporting unit’s fair value with its carrying value. If the qualitative assessment results in a conclusion that it is more likely than not that the fair value of a reporting unit exceeds the carrying value, then no further testing is performed for that reporting unit. The Company performed the qualitative assessment of its goodwill and determined that it is more likely than not that the fair value of its reporting unit exceeds the carrying value of the reporting unit. As a result, there was no goodwill impairment during 2023, 2022 and 2021. There was no accumulated impairment of goodwill as of December 31, 2023, and January 1, 2023. When testing the tradename for impairment, the Company first performs an assessment of qualitative factors. If qualitative factors indicate that it is more likely than not that the fair value of the tradename is less than its carrying amount, the Company tests the tradename for impairment at the asset level. The Company determines the fair value of the tradename and compares it to the carrying value. If the carrying value of the tradename exceeds the fair value, the Company recognizes an impairment loss in an amount equal to the excess. The Company performed the qualitative assessment of its tradename and determined that it is more likely than not that the fair value of the tradename exceeds the carrying value of the reporting unit. There were no additions to, disposals of, or impairments of the tradename during 2023, 2022 and 2021. There was no accumulated impairment of the tradename as of December 31, 2023, and January 1, 2023. Intangible Assets, net Intangible assets, net consists of capitalized internal-use software development, which is amortized over a 3-year period. The Company capitalizes certain costs in connection with obtaining or developing software for internal use. Additionally, the Company capitalizes qualifying costs incurred for upgrades and enhancements that result in additional functionality to existing software. Amortization of such costs begins when the project is substantially complete and ready for its intended use. Costs related to design or maintenance are expensed as incurred. Intangible asset amortization expense was $1.9 million, $1.7 million and $1.6 million during 2023, 2022 and 2021, respectively. Intangible assets are amortized on a straight-line basis over the estimated useful life of the assets. The Company reviews intangible assets for impairment under the long-lived asset model described below. No impairment of intangible assets was recorded during the years presented. Long-Lived Asset Impairment The Company evaluates long-lived assets, including lease right-of-use assets, for impairment periodically whenever events or changes in circumstances indicate that their related carrying amounts may not be recoverable. In evaluating long-lived assets for recoverability, the Company uses its best estimate of future cash flows expected to result from the use of the asset and eventual disposition. To the extent that projected undiscounted future net cash flows attributable to the asset are less than the carrying amount, an impairment loss is recognized in an amount equal to the difference between the carrying value of such asset and its estimated fair value. There was no impairment recorded during the years presented. Leases The Company changed its method of accounting for leases as of January 3, 2022 due to the adoption of FASB”) Accounting Standard Codification (“ASC”) 842, Leases (“ASC 842”). Contracts that have been determined to convey the right to use an identified asset are evaluated for classification as an operating or finance lease. For the Company’s operating and finance leases, the Company records a lease liability based on the present value of the lease payments at lease inception. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the Company uses its incremental borrowing rate (“IBR”). The determination of the IBR requires judgment and is primarily based on publicly-available information for companies within similar industries and with similar credit profiles. We adjust the rate for the impact of collateralization, the lease term and other specific terms included in each lease arrangement. The IBR is determined at the lease commencement and is subsequently reassessed upon a modification to the lease arrangement. The right-of-use asset is recorded based on the corresponding lease liability at lease inception, adjusted for payments made to the lessor at or before the commencement date, initial direct costs incurred and any tenant incentives allowed for under the lease. The Company does not include optional renewal terms or early termination provisions unless the Company is reasonably certain such options would be exercised at the inception of the lease. Lease right-of-use assets, current portion of lease liabilities, and lease liabilities, net of current portion are included on the consolidated balance sheets. Fixed lease expense for operating leases is recognized on a straight-line basis, unless the right-of-use assets have been impaired, over the reasonably assured lease term based on the total lease payments and is included in operating expenses in the consolidated statements of operations and comprehensive income (loss). Fixed and variable lease expense on operating leases is recognized within operating expenses in the consolidated statements of operations and comprehensive income (loss). Finance lease expenses are recognized on a straight-line basis. Fixed and variable expenses are captured within interest expense and depreciation expense, which has components within general and administrative expenses and cost of revenue. The Company’s non-lease components are primarily related to maintenance, insurance and taxes, which varies based on future outcomes and is thus recognized in lease expense when incurred. Revenue Recognition The Company generates revenue primarily from the sale of merchandise products directly to end customers. The sale of products is a distinct performance obligation, and revenue is recognized at a point in time when control of the promised product is transferred to customers, which the Company determined occurs upon shipment based on its evaluation of the related shipping terms. Revenue is recognized in an amount that reflects the transaction price consideration that the Company expects to receive in exchange for those products. The Company’s payment terms are typically at the time of order processing and shipment. The Company elected to exclude from revenue taxes assessed by governmental authorities, including value-added and other sales-related taxes, that are imposed on and concurrent with revenue-producing activities. The Company has elected to apply the practical expedient, relative to e-commerce sales, which allows an entity to account for shipping and handling as fulfillment activities, and not a separate performance obligation. Accordingly, the Company recognizes revenue for only one performance obligation, the sale of the product, at shipping point (when the customer gains control). Shipping and handling costs associated with outbound freight are accounted for as fulfillment costs and are included in cost of goods sold. The Company has elected to apply the practical expedient to expense costs as incurred for incremental costs to obtain a contract when the amortization period would have been one year or less. Revenue from merchandise product sales is reported net of sales returns, which includes an estimate of future returns based on historical return rates, with a corresponding reduction to cost of sales. There is judgment in utilizing historical trends for estimating future returns. The Company’s refund liability for sales returns is included in the returns reserve on its consolidated balance sheets and represents the expected value of the refund that will be due to the Company’s customers. The Company also has a corresponding asset for recovery that represents the expected net realizable value of the merchandise inventory to be returned. The Company sells stored-value gift cards to customers and offers merchandise credit stored-value cards for certain returns. Such stored-value cards do not have an expiration date. The Company recognizes revenue from stored-value cards when the card is redeemed by the customer. The Company has determined that sufficient evidence exists to support an estimate for stored-value card breakage. Subject to requirements to remit balances to governmental agencies, breakage is recognized as revenue in proportion to the pattern of rights exercised by the customer, which is substantially within thirty-six months from the date of issuance. The amount of breakage recognized in revenue during 2023, 2022 and 2021 was not material. The Company has two types of contractual liabilities: (i) cash collections from its customers prior to delivery of products purchased (“deferred revenue”), which are initially recorded within accrued expenses and recognized as revenue when the products are shipped, (ii) unredeemed gift cards and online store credits, which are initially recorded as a stored-value card liability and are recognized as revenue in the period they are redeemed. The following table summarizes the significant changes in the contract liabilities balances during 2023, 2022 and 2021 (in thousands): Deferred Stored-Value Revenue Cards Balance as of January 3, 2021 $ 792 $ 4,973 Revenue recognized that was included in contract liability balance at the beginning of the period (792) (1,471) Increase due to cash received, excluding amounts recognized as revenue during the period 145 3,738 Balance as of January 2, 2022 145 7,240 Revenue recognized that was included in contract liability balance at the beginning of the period (145) (3,282) Increase due to cash received, excluding amounts recognized as revenue during the period 69 6,870 Balance as of January 1, 2023 69 10,828 Revenue recognized that was included in contract liability balance at the beginning of the period (69) (4,073) Increase due to cash received, excluding amounts recognized as revenue during the period 50 6,387 Balance as of December 31, 2023 $ 50 $ 13,142 Cost of Revenue Cost of revenue consists of the product costs of merchandise sold to customers; shipping and handling costs including all inbound, outbound, and return shipping expenses; rent, insurance, business property tax, utilities, depreciation and amortization, and repairs and maintenance related to the Company’s distribution facilities; and charges related to inventory shrinkage, damages and the allowance for excess or obsolete inventory. General and Administrative Expenses General and administrative expenses consist primarily of payroll and benefits costs, including equity-based compensation for the Company’s employees involved in general corporate functions including finance, merchandising, marketing, and technology, as well as costs associated with the use by these functions of facilities and equipment, including depreciation and amortization, rent and other occupancy expenses. Selling and Marketing Expenses Selling and marketing expenses consist primarily of customer service, payment processing fees, advertising, targeted online performance marketing and search engine optimization costs. Selling and marketing expenses also include spend on brand marketing channels, including cash and free clothing compensation to influencers, events and other forms of online and offline marketing related to growing and retaining the customer base. Advertising costs included in selling and marketing expenses were $58.5 million, $64.4 million, and $53.6 million in 2023, 2022 and 2021, respectively. Equity-Based Compensation The Company grants stock-based awards to certain employees, officers, directors, and other nonemployee service providers. Equity-based compensation is measured at the grant date or modification date for all equity-based awards made to employees and nonemployees based on the estimated fair value of the awards. Equity-based compensation expense is recognized on a straight-line basis over the period the employee or non-employee is required to provide service in exchange for the award, which is generally the vesting period. The Company classifies equity-based compensation expense as general and administrative expense in the Company’s consolidated statements of operations and comprehensive income (loss). The Company has elected to recognize forfeitures by reducing the equity-based compensation expense in the same period as the forfeitures occur. The fair value of grants of restricted stock or restricted stock units (“RSUs”) is based on the fair value of the Company’s common stock underlying the award on the grant date or modification date. For stock option awards, the Company applies the Black-Scholes option pricing model to determine the fair value. The model utilizes the estimated per share fair value of the Company’s underlying common stock at the grant date, the expected or contractual term of the option, the expected stock price volatility, risk-free interest rates, and the expected dividend yield of the common stock. The Company bases its estimate of expected volatility on the historical volatility of comparable companies from a representative peer group selected based on industry, financial, and market capitalization data. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury implied yield at the date of grant. The Company has elected to use the “simplified method” to determine the expected term which is the midpoint between the vesting date and the end of the contractual term because it has insufficient history upon which to base an assumption about the term; the Company believes the simplified method approximates a term if it were to be based on expected life. The expected dividend yield is 0.0% as the Company has not paid and does not anticipate paying dividends on its common stock. Determining the grant date fair value of options using the Black-Scholes option pricing model requires management to make assumptions and judgments. These estimates involve inherent uncertainties and, if different assumptions had been used, stock-based compensation expense could have been materially different from the amounts recorded. Certain prior year amounts have been reclassified for consistency with the current year presentation. The Company combined equity-based compensation expense and equity-based compensation expense related to CEO special compensation awards into one line item, equity-based compensation expense, in the consolidated statements of cash flows. Income Taxes The Company accounts for income taxes using the asset and liability method, under which Deferred Tax Assets (“DTA”) and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which they are expected to be realized or settled. The Company believes that it is more likely than not that forecasted income, together with future reversals of existing taxable temporary differences and results of recent operations, will be sufficient to fully recover the deferred tax assets. In the event that the Company determines all or part of the net deferred tax assets are not realizable in the future, the Company would record a valuation allowance. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to unrecognized tax benefits, if any, as income tax expense. Net Income (Loss) Per Share Attributable to Common Stockholders The Company calculates basic and diluted net income (loss) per share attributable to common stockholders in conformity with the two-class method required for participating securities as the application of the if converted method is not more dilutive. The two-class method requires income (loss) available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The Company considers its redeemable preferred stock and convertible preferred stock to be participating securities. In accordance with the two-class method, net income (loss) is adjusted for earnings allocated to these participating securities and the related number of outstanding shares of the participating securities, which include contractual participation rights in undistributed earnings, have been excluded from the computation of basic and diluted net income (loss) per share attributable to common stockholders. The redeemable preferred stock and convertible preferred stock contractually entitle the holders of such shares to participate in dividends but do not contractually require the holders of such shares to participate in the Company’s losses. As such, where applicable, net losses were not allocated to these securities. Basic net income (loss) per share attributable to common stockholders is computed using net income (loss) attributable to common stockholders divided by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share attributable to common stockholders represents net income (loss) attributable to common stockholders divided by the weighted average number of common shares outstanding during the period, including the effects of any dilutive securities outstanding. The following table presents the calculation of basic and diluted weighted average shares used to compute net income (loss) per share attributable to common stockholders: 2023 2022 2021 Weighted average shares used to compute net income (loss) per share attributable to common stockholders – Basic 39,879,121 38,583,854 20,229,675 Dilutive securities: Unvested restricted stock - 55,127 - Unvested RSUs - 139,064 - Special compensation awards - 67,547 - Employee Stock Purchase Plan - 7,801 - Weighted average shares used to compute net income (loss) per share attributable to common stockholders – Diluted 39,879,121 38,853,393 20,229,675 The following securities were excluded from the computation of diluted net income (loss) per share attributable to common stockholders for the fiscal years presented because including them would have been anti-dilutive (on an as-converted basis): 2023 2022 2021 Stock options 161,397 322,793 322,793 Unvested restricted stock 23,379 78,303 381,612 Unvested RSUs 3,568,406 904,076 — Performance stock units 1,811,571 — — Employee stock purchase plan shares 117,511 — — 2023 Bonus Plan 196,477 — — CEO award share settlement — — 417,828 Total 5,878,741 1,305,172 1,122,233 Redeemable Preferred Stock The Company has elected to record its redeemable preferred stock at the greater of its redemption value or the issuance date fair value, net of issuance costs, as it is probable of becoming redeemable due to the passage of time. Any change to the carrying value of redeemable preferred stock recognized in each period is recorded to additional paid-in capital, or in the absence of additional paid-in capital, recorded to accumulated deficit. The issuance date fair value of the redeemable preferred stock shares purchased by entities related to current employees, board members, and service providers was higher than the consideration paid and such excess was recorded as equity-based compensation. The excess of the fair value over consideration paid for redeemable preferred stock shares purchased by an existing convertible preferred stockholder was accounted for as a deemed dividend and recorded in additional paid-in capital. Comprehensive Income (Loss) Comprehensive income (loss) is defined as a change in equity of a business enterprise during a period, resulting from transactions from non-owner sources. To date, the Company has not had any transactions that are required to be reported in comprehensive income (loss) other than the net income (loss) incurred from operations. Thus, comprehensive income (loss) is the same as net income (loss) for the periods presented. Recently Adopted Accounting Pronouncements The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended, which amends guidance on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities from an incurred loss methodology to an expected loss methodology. For assets held at amortized cost basis, the guidance eliminates the probable initial recognition threshold and instead requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses are recorded through an allowance for credit losses, rather than a write-down, limited to the amount by which fair value is below amortized cost. Additional disclosures about significant estimates and credit quality are also required. The guidance is effective for the Company for fiscal years beginning after December 15, 2022. The Company adopted this guidance on January 2, 2023, and it did not have a material impact on its consolidated financial statements or disclosure requirements. Recently Issued Accounting Pronouncements In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | 3. The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes three levels of the fair value hierarchy as follows: Level 1 Level 2 Level 3 The Company’s financial instruments consist of cash and cash equivalents, restricted cash, accounts payable, accrued expenses, revolving line of credit and long-term debt. As of December 31, 2023 and January 1, 2023, the carrying values of cash and cash equivalents, restricted cash, accounts payable and accrued expenses and other current liabilities approximate fair value due to their short-term maturities. The fair value of the Company’s 2021 Revolving Facility that provides for borrowings up to $50.0 million approximates its carrying value as the stated interest rates reset daily at the daily secured overnight financing rate (“SOFR”) plus an applicable margin and, as such, approximate market rates currently available to the Company. The Company does not have any financial instruments that were determined to be Level 3. |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2023 | |
Balance Sheet Components | |
Balance Sheet Components | 4. Property and Equipment, net Property and equipment, net consisted of the following (in thousands) as of: Estimated Useful Lives December 31, January 1, in Years 2023 2023 Leasehold improvements 3 - 9 $ 4,314 $ 3,802 Equipment 3 - 7 3,053 2,659 Furniture and fixtures 3 - 7 2,151 1,880 Construction in progress 688 36 Total property and equipment 10,206 8,377 Less: accumulated depreciation and amortization (5,494) (3,986) Property and equipment, net $ 4,712 $ 4,391 Depreciation of property and equipment was $2.9 million, $2.4 million and $1.3 million for 2023, 2022 and 2021, respectively. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands) as of: December 31, January 1, 2023 2023 Accrued compensation and benefits $ 5,057 $ 6,751 Accrued marketing 5,002 3,206 Accrued inventory 4,151 3,411 Accrued freight 1,940 1,890 Other 2,193 2,718 Accrued expenses and other current liabilities $ 18,343 $ 17,976 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt | |
Debt | 5. 2021 Credit Agreement and Revolving Facility During November 2021, the Company entered into the 2021 Credit Agreement with Bank of America to provide the 2021 Revolving Facility that provides for borrowings up to $50.0 million. During the term of the 2021 Credit Agreement, the Company can increase the aggregate amount of the 2021 Revolving Facility up to an additional $25.0 million (for maximum aggregate lender commitments of up to $75.0 million), subject to the satisfaction of certain conditions under the 2021 Credit Agreement, including obtaining the consent of the administrative agent and an increased commitment from existing or new lenders. In addition, the 2021 Credit Agreement may be used to issue letters of credit up to $7.5 million (the “Letter of Credit”). During 2023, the Company borrowed $13.0 million under the 2021 Revolving Facility and repaid $ million of the outstanding balance. The 2021 Revolving Facility matures on November 15, 2024, while the Letter of Credit matures on November 8, 2024. As of December 31, 2023, the Company had $ million outstanding under the Letter of Credit. As of December 31, 2023, the Company had $41.7 million available for borrowing under the 2021 Revolving Facility and $ million available to issue letters of credit. All borrowings under the 2021 Credit Agreement accrue interest at a rate equal to, at the Company’s option, either (x) the term daily SOFR, plus the applicable SOFR adjustment plus a margin of 1.75% per annum or (y) the base rate plus a margin of 0.75% (with the base rate being the highest of the federal funds rate plus 0.50%, the prime rate and term SOFR for a period of one month plus 1.00%). Additionally, a commitment fee of 37.5 basis points will be assessed on unused commitments under the 2021 Revolving Facility, taking into account the sum of outstanding borrowings and letter of credit obligations. As of December 31, 2023, the interest rate for the 2021 Revolving Facility was 7.2%, and during 2023 and 2022, the w eighted average interest rate Amounts borrowed under the 2021 Credit Agreement are collateralized by all assets of the Company and contains various financial and non-financial covenants for reporting, protecting and obtaining adequate insurance coverage for assets collateralized and for coverage of business operations, and complying with requirements, including the payment of all necessary taxes and fees for all federal, state and local government entities. Immediately upon the occurrence and during the continuance of an event of default, including the noncompliance with the above covenants, the lender may increase the interest rate per annum by 2.0% above the rate that would be otherwise applicable. As of December 31, 2023, management has determined that the Company was in compliance with all financial covenants. 2017 Term Loan In August 2017, the Company entered into a term loan with a principal amount of $135.0 million (the “2017 Term Loan”) and a revolving credit facility of $10.0 million (the “2017 Revolving Facility”) with certain financial institutions for which Credit Suisse acted as an administrative agent (the “2017 Credit Facility”). During November 2021, the Company utilized the proceeds from the IPO and the 2021 Revolving Facility to repay the $105.8 million of outstanding principal and $1.4 million of accrued interest related to the 2017 Term Loan. The 2017 Credit Facility was terminated on November 15, 2021 and no prepayment penalties were incurred. With the repayment of the Credit Facility, the Company recognized a loss on debt extinguishment of $1.4 million, comprised of the write-off of $2.3 million in unamortized debt issuance costs and debt discounts, net of forgiveness of accrued debt amendment fees of $0.9 million in accordance with the Fifth Amendment. The effective interest rate on the Term Loan was 15.3% for 2021. 2017 Revolving Facility Outstanding amounts under the 2017 Revolving Facility bore interest at variable rates with a minimum of 7.00%. The Company repaid $8.6 million outstanding under the 2017 Revolving Facility in March 2021, and the 2017 Revolving Facility was terminated on November 15, 2021. The effective interest rate for the 2017 Revolving Facility was 11.6% for 2021. Debt Discounts and Issuance Costs Debt discounts and issuance costs are deferred and amortized over the life of the related loan using the effective interest method. The associated expense is included in interest expense in the consolidated statements of operations and comprehensive income (loss). Debt discounts and issuance costs are presented as a reduction of long-term debt with the exception of debt issuance costs related to the 2021 Revolving Facility, which are included in other non-current assets in the consolidated balance sheets. As of December 31, 2023, and January 1, 2023, unamortized debt issuance costs recorded within other non-current assets were $0.1 million and $0.3 million, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Leases | 6. On January 3, 2022, the Company adopted ASC 842 using the alternative transition method and applied the standard only to leases that existed at that date. Under the alternative transition method, the Company did need to restate the comparative periods in transition and will continue to present financial information and disclosures for periods before January 3, 2022, in accordance with FASB ASC 840, Leases The Company is a lessee under various lease agreements. The determination of whether an arrangement contains a lease, and the lease classification is made at lease commencement (date upon which the Company takes possession of the asset). At lease commencement, the Company also measures and recognizes a right-of-use asset, representing the Company’s right to use the underlying asset, and a lease liability, representing the Company’s obligation to make lease payments under the terms of the arrangement. The lease term is defined as the noncancelable portion of the lease term plus any periods covered by an option to extend the lease if it is reasonably certain that the option will be exercised. For the purposes of recognizing right-of-use assets and lease liabilities associated with the Company’s leases, the Company has elected the practical expedient of not recognizing a right-of-use asset or lease liability for short-term leases, which are leases with a term of 12 months or less. The Company has multiple finance leases and operating leases that are combined and included in the lease right-of-use assets, lease liabilities, current, and lease liabilities, noncurrent on the Company’s consolidated balance sheets. The Company primarily leases its distribution facilities and corporate offices under operating lease agreements expiring on various dates through December 2031, most of which contain options to extend. In addition to payment of base rent, the Company is also required to pay property taxes, insurance, and common area maintenance expenses. The Company records lease expense on a straight-line basis over the term of the lease. As of December 31, 2023 The Company also leases equipment under finance lease agreements expiring on various dates through May 2028 As of December 31, 2023, the future minimum lease payments for the Company’s operating and finance leases for each of the next five fiscal years, and thereafter, were as follows (in thousands): Fiscal Year: Operating Leases Finance Leases Total 2024 $ 5,629 $ 1,777 $ 7,406 2025 6,263 1,504 7,767 2026 4,970 252 5,222 2027 5,138 74 5,212 2028 5,252 6 5,258 Thereafter 6,380 — 6,380 Total undiscounted lease payment 33,632 3,613 37,245 Present value adjustment (6,020) (150) (6,170) Total lease liabilities 27,612 3,463 31,075 Less: lease liabilities, current (3,965) (1,683) (5,648) Lease liabilities, noncurrent $ 23,647 $ 1,780 $ 25,427 Under the terms of the remaining lease agreements, the Company is also responsible for certain variable lease payments that are not included in the measurement of the lease liability, including non-lease components such as common area maintenance fees, taxes, and insurance. The following information represents supplemental disclosure of lease costs, components of the statement of cash flows related to operating and finance leases and components of right-of-use assets (in thousands): December 31, 2023 Finance lease cost Amortization of ROU assets $ 1,376 Interest on lease liabilities 128 Operating lease cost 5,530 Short-term lease cost 12 Variable lease cost 850 Total lease cost $ 7,896 Lease cost included in cost of revenue $ 6,301 Lease cost included in general and administrative expenses $ 1,595 Weighted-average remaining lease term - finance leases 30 months Weighted-average remaining lease term - operating leases 74 months Weighted-average discount rate - finance leases 3.64% Weighted-average discount rate - operating leases 6.49% Prior to the adoption of ASC 842 Rent expense for non-cancelable operating leases was $3.3 million in 2021. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | 7. Litigation and Other From time to time, the Company may be a party to litigation and subject to claims incurred in the ordinary course of business, including personal injury and indemnification claims, labor and employment claims, threatened claims, breach of contract claims, and other matters. The Company accrues a liability when management believes information available prior to the issuance of the consolidated financial statements indicates it is probable a loss has been incurred as of the date of the consolidated financial statements and the amount of loss can be reasonably estimated. The Company adjusts its accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. Legal costs are expensed as incurred. Although the results of litigation and claims are inherently unpredictable, management concluded that it was not probable that it had incurred a material loss during the periods presented related to such loss contingencies. Therefore, the Company has not recorded a reserve for any contingencies. During the normal course of business, the Company may be a party to claims that are not covered by insurance. While the ultimate liability, if any, arising from these claims cannot be predicted with certainty, management does not believe that the resolution of any such claims would have a material adverse effect on the Company’s consolidated financial statements. As of December 31, 2023 and January 1, 2023, the Company was not aware of any currently pending legal matters or claims, individually or in the aggregate, that are expected to have a material adverse impact on its consolidated financial statements. Indemnification The Company also maintains director and officer insurance, which may cover certain liabilities arising from its obligation to indemnify the Company’s directors. To date, the Company has not incurred any material costs and has not accrued any liabilities in the consolidated financial statements as a result of these provisions. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2023 | |
Preferred Stock | |
Preferred Stock | 8. Pursuant to the Company’s amended and restated certificate of incorporation, the Company is authorized to issue 10,000,000 shares of preferred stock having a par value of $0.001 per share. The Company’s Board of Directors has the authority to issue preferred stock and to determine the rights, preferences, privileges, and restrictions, including voting rights, of those shares. As of December 31, 2023, no shares of preferred stock were issued and outstanding |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2023 | |
Common Stock | |
Common Stock | 9. The Company has authorized the issuance of ("common stock") as of December 31, 2023 and January 1, 2023. 1,901,328 shares of common stock available for future issuance under the Lulu's Fashion Lounge Holdings, Inc. Omnibus Equity Plan (the “Omnibus Equity Plan”) and 1,420,331 shares of common stock available for future issuance under the 2021 Employee Stock Purchase Plan (the “ESPP”). Both equity plans are further described in Note 10, Equity-Based Compensation . |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Equity-Based Compensation | |
Equity-Based Compensation | 10. Omnibus Equity Plan and Employee Stock Purchase Plan In connection with the closing of the IPO, the Company adopted the Omnibus Equity Plan and the ESPP. Under the Omnibus Equity Plan, incentive awards may be granted to employees, directors, and consultants of the Company. The Company initially reserved 3,719,000 shares of common stock for future issuance under the Omnibus Equity Plan, including any shares subject to awards under the 2021 Equity Incentive Plan (the “2021 Equity Plan”) that are forfeited or lapse unexercised. The number of shares reserved for issuance under the Omnibus Equity Plan will automatically increase on the first day of each fiscal year, starting in 2022 and continuing through 2031, by a number of shares equal to (a) 4% of the total number of shares of the Company’s common stock outstanding on the last day of the immediately preceding year or (b) such smaller number of shares as determined by the Company’s Board of directors. Under the ESPP, the Company initially reserved 743,803 shares of common stock for future issuance. The number of shares of common stock reserved for issuance will automatically increase on the first day of each fiscal year beginning in 2022 and ending in 2031, by a number of shares equal to (a) 1% of the total number of shares of the Company’s common stock outstanding on the last day of the immediately preceding fiscal year or (b) such smaller number of shares as determined by the Company’s Board of Directors. On April 1, 2022, the Company filed a Registration Statement on Form S-8 (the “Form S-8”) with the SEC for the purpose of registering an additional 5,921,056 shares of the Company’s common stock, inclusive of 1,536,845 and 384,211 shares associated with automatic increases that occurred on January 3, 2022 under the Omnibus Equity Plan and ESPP, respectively. This registration also included 3,200,000 and 800,000 shares for the Omnibus Equity Plan and the ESPP, respectively, representing two years’ worth of estimated future automatic increases in availability for these plans. On March 8, 2023, the Company’s Board of Directors approved the Fiscal 2023 Bonus Plan (“2023 Bonus Plan”) that will grant RSUs, instead of a typical cash bonus, to eligible employees. For the year ended December 31, 2023, equity-based compensation expense for the 2023 Bonus Plan is $0.4 million. As of December 31, 2023, the unrecognized equity-based compensation expense for 2023 Bonus Plan is $0.2 million and will be recognized over a weighted-average period of 0.29 years. On June 29, 2023, the Company filed a Registration Statement on Form S-8 with the SEC for the purpose of registering an additional 2,000,000 shares of the Company's common stock under the Omnibus Equity Plan corresponding to the increase in shares approved by stockholders at the 2023 annual meeting of stockholders. As of December 31, 2023, the Company had and shares available for issuance under the Omnibus Equity Plan and ESPP, respectively. The compensation committee of the Company’s Board of Directors (the “compensation committee”) administers the Omnibus Equity Plan and determines to whom awards will be granted, the exercise price of any options, the rates at which awards vest and the other terms and conditions of the awards granted under the Omnibus Equity Plan. The compensation committee may or may not issue the full number of shares that are reserved for issuance. The Company’s initial ESPP offering period commenced on August 26, 2022. The ESPP consists of consecutive, overlapping 12-month offering periods that begin on each August 26 and February 26 during the term of the ESPP, and end on each August 25 and February 25 occurring 12 months later, as applicable. Each offering period is comprised of two consecutive six-month purchase periods that begin on each August 26 and February 26 within each offering period and end on each February 25 and August 25, respectively, thereafter. The duration and timing of offering periods and purchase periods may be changed by the Company’s Board of Directors or compensation committee at any time. The ESPP allows participants to purchase shares of the Company’s common stock at a 15 percent discount from the lower of the Company’s stock price on (i) the first day of the offering period or on (ii) the last day of the purchase period and includes a rollover mechanism for the purchase price if the stock price on the purchase date is less than the stock price on the offering date. The ESPP also allows participants to reduce their percentage election once during the offering period, but they cannot increase their election until the next offering period. The Company recognizes equity-based compensation expense related to shares issued pursuant to the ESPP on a graded vesting approach over each offering period. During 2023, equity-based compensation expense related to the ESPP was $0.2 million. The Company used the Black-Scholes model to estimate the fair value of the purchase rights under the ESPP. During 2023, the Company utilized the following assumptions: Expected term (in years) 0.50 to 1.00 Expected volatility 93.84 to 99.95 % Risk-free interest rate 5.44 to 5.61 % Dividend yield - Weighted average fair value per share of ESPP awards granted $ 0.60 to 0.98 2021 Equity Plan During April 2021, the Company’s Board of Directors adopted the 2021 Equity Plan. The 2021 Equity Plan provides for the issuance of incentive stock options, restricted stock, restricted stock units and other stock-based and cash-based awards to the Company’s employees, directors, and consultants. The maximum aggregate number of shares reserved for issuance under the 2021 Equity Plan was 925,000 shares. The Company’s Board of Directors administers the 2021 Equity Plan. The options outstanding under the 2021 Equity Plan expire ten years from the date of grant. The Company issues new common shares to satisfy stock option exercises. In connection with the closing of the IPO, no further awards will be granted under the 2021 Equity Plan. CEO Stock Options and Special Compensation Awards In April 2021, the Company entered into an Employment Agreement (“McCreight IPO Employment Agreement”) with the former CEO, David McCreight and granted stock options under the 2021 Equity Plan to purchase 322,793 shares of common stock with an exercise price of $11.35 per share, which vest based on service and performance conditions. 275,133 of these stock options have only service vesting conditions, and 47,660 of these stock options have both service and performance vesting conditions. In addition, a portion of these stock options were subject to accelerated vesting conditions upon the occurrence of certain future events, which were satisfied upon the closing of the IPO. As previously disclosed on a Form 8-K filed on February 13, 2023 (the “February 13 8-K”), Mr. McCreight voluntarily forfeited 161,396 unvested stock options of the Company. During 2023, the forfeiture of 161,396 unvested stock resulted in immediate acceleration of the remaining $1.2 million of compensation expense which was recorded to general and administrative expense. As previously disclosed in the February 13 8-K, the Company and David McCreight also entered into the First Amendment to Lulu’s Fashion Lounge Holdings, Inc. 2021 Equity Incentive Plan Stock Option Agreement that extends the post-termination exercise period of 161,397 vested stock options from 90 days to three (3) years from a termination of service other than for cause, death or disability. Under the McCreight IPO Employment Agreement and subject to ongoing employment, and in light of the closing of the IPO, the former CEO received two bonuses which were settled in fully-vested shares of the Company’s common stock equal to $3.0 million each ( $6.0 million in aggregate) on March 31, 2022 and March 31, 2023. The Company initially concluded that the two bonuses were subject to the guidance within ASC 718 and were liability-classified upon issuance. Upon the completion of the IPO, the two bonuses became equity-classified as they no longer met the criteria for liability classification. The Company recorded the equity-based compensation expense on a straight-line basis over the requisite service periods through March 31, 2022 and March 31, 2023. The Company recorded equity-based compensation expense related to the two bonuses of $0.4 million and $2.3 million during 2023 and 2022, respectively. During 2023 and 2022, the Company issued 208,914 and 208,914 fully-vested shares, respectively, upon satisfaction of the service performed through March 31, 2023 and March 31, 2022, respectively. S tock Options A summary of stock option activity in 2023 is as follows Weighted- Weighted- Average Average Exercise Remaining Aggregate Options Price per Contractual Intrinsic Outstanding Option Life (years) Value Balance as of January 1, 2023 322,793 $ 11.35 8.29 Granted — — — Forfeited (161,396) (11.35) — Outstanding as of December 31, 2023 161,397 $ 11.35 7.29 Exercisable as of December 31, 2023 161,397 $ 11.35 7.29 $ — Vested and expected to vest as of December 31, 2023 161,397 $ 11.35 7.29 $ — There were no options granted during 2023 and 2022. There were 322,793 options granted during 2021 with a The following table presents the range of assumptions used to estimate the fair value of options granted during 2021: Fair value of common stock $ 25.86 Expected term (in years) 6.48 Expected volatility 50.62 % Risk-free rate 1.17 % Dividend yield 0 % Fair Value of Common Stock – Risk-Free Interest Rate - Expected Term Volatility Dividend Yield During 2023 and 2022, equity-based compensation expense of $1.2 million and $1.4 million, respectively, was recorded to general and administrative expense related to the stock options. As of December 31, 2023, there is zero unrecognized compensation cost related to the stock options. Restricted Stock and RSUs Immediately before the completion of the IPO, the LP was liquidated and the unit holders of the LP received shares of the Company’s common stock in exchange for their units of the LP. The Class P unit holders (see below) received 1,964,103 shares of common stock, comprised of 1,536,304 shares of vested common stock and 427,799 shares of unvested restricted stock. Any such shares of restricted stock received in respect of unvested Class P units of the LP are subject to vesting and a risk of forfeiture to the same extent as the corresponding Class P units. The Company recorded equity-based compensation expense of $0.7 million and $2.6 million during 2023 and 2022, respectively, related to the exchanged restricted stock. As of December 31, 2023, the unrecognized equity-based compensation expense for all restricted stock is $0.4 million and will be recognized over a weighted-average period 0.83 years. The following table summarizes the rollforward of unvested restricted stock in 2023: Unvested Weighted- Restricted Average Fair Stock Value per Share Balance at January 1, 2023 78,303 $ 5.38 Restricted stock granted — — Restricted stock vested (50,294) 4.47 Restricted stock forfeited (4,630) 4.27 Balance at December 31, 2023 23,379 $ 4.54 The fair value of restricted stock vested during 2023 was $0.1 million. During 2023, the Company entered into employment agreements with Crystal Landsem, the Chief Executive Officer, (the “CEO Employment Agreement”) and Tiffany Smith, the Chief Financial Officer, (the “CFO Employment Agreement”), under which 1,811,572 and 161,088 RSUs were granted, respectively. Under the CEO Employment Agreement, Ms. Landsem received a grant of 1,811,572 RSUs, which vest in quarterly installments beginning on June 30, 2023 through December 31, 2026 and are subject to continued service requirements. Under the CFO Employment Agreement, Ms. Smith received 161,088 RSUs, granted in two parts, with 118,025 and 43,063 RSUs granted on March 17, 2023 and April 30, 2023, respectively, which in combination will vest in three equal installments on March 8, 2024, March 7, 2025 and March 6, 2026, and are subject to continued service requirements. On March 5, 2023, Mr. McCreight received a grant of 25,873 RSUs pursuant to the McCreight IPO Employment Agreement. These RSUs vest in 12 equal installments from April 30, 2023 through March 31, 2024, and are subject to continued service requirements. In addition, under Mr. McCreight’s employment agreement for his Executive Chairman role, entered into on November 11, 2022 (the “Executive Chairman Employment Agreement”), Mr. McCreight was entitled to receive a grant of RSUs equivalent to $2 million. The Company initially concluded that the award was subject to the guidance within ASC 718 and was liability-classified upon issuance. On March 17, 2023, the number of RSUs associated with the award became determinable, and the award became equity-classified as it no longer met the criteria for liability classification. Mr. McCreight’s 836,820 RSUs were granted in two parts, with 613,116 RSUs granted on March 17, 2023 and 223,704 RSUs granted on April 30, 2023, the combination of which vest in equal, quarterly installments on the date immediately following the last day of each calendar quarter, starting April 1, 2023, and are subject to continued service requirements. During the year ended 2023, the Company granted 3,032,824 RSUs (inclusive of the aforementioned RSU grants to Ms. Landsem and Ms. Smith), to certain executives and employees which vest over a three-year service period, and 1,270,290 RSUs (inclusive of the aforementioned RSU grants to the Executive Chairman) to certain directors which are subject to various vesting schedules as set forth in the Company’s Non-Employee Director Compensation Program and the Executive Chairman Employment Agreement. The Company recognized equity-based compensation expense of $12.4 million and $8.8 million during the year ended 2023 and 2022, respectively, related to the RSUs. As of December 31, 2023, the unrecognized equity-based compensation expense is $8.9 million and will be recognized over a weighted-average period of 2.43 years. The following table summarizes the rollforward of unvested RSUs in 2023: Weighted- Unvested Average Fair RSUs Value per Share Balance at January 1, 2023 1,336,674 $ 8.94 RSUs granted 4,303,114 2.66 RSUs vested (1,932,500) 5.93 RSUs forfeited (138,882) 5.16 Balance at December 31, 2023 3,568,406 $ 3.14 The fair value of RSUs vested during 2023 was $4.4 million. The Company recognized a tax benefit of $1.5 million and $0.8 million related to equity-based compensation expense in 2023 and 2022, respectively. There was no income tax benefit recognized related to equity-based compensation expense in 2021. Performance Stock Units (“PSUs”) Under the CEO Employment Agreement, Ms. Landsem received a grant of 1,811,571 PSUs on March 5, 2023 which vest in three equal annual installments of 603,857 PSUs subject to the achievement of trailing ten day volume-weighted average price targets of the Company’s common stock and her continued employment on the vesting dates. The Company recognized equity-based compensation expense of $2.1 million during 2023, related to the PSUs. As of December 31, 2023, the unrecognized equity-based compensation expense is $2.6 million and will be recognized over a weighted-average period of 2.18 years. The following table summarizes the rollforward of unvested PSUs during 2023: Weighted- Unvested Average Fair PSUs Value per Share Balance at January 1, 2023 — $ — PSUs granted 1,811,571 2.65 PSUs vested — — PSUs forfeited — — Balance at December 31, 2023 1,811,571 $ 2.65 Class P Units 384,522 of the outstanding Class P units included both a service condition and a performance condition, while the remainder of the Class P units only included a service condition. The performance-based vesting condition was satisfied upon completion of the IPO. Equity-based compensation expense of $1.9 million related to the Class P units was recorded to general and administrative expense in the statements of operations and comprehensive income (loss) during 2021. During 2021, the LP modified the vesting schedule related to 763,178 outstanding Class P units for two senior executives to accelerate vesting if the two senior executives perform service after the completion of the IPO over the subsequent 12-month period. The Company concluded that the amendment to the Class P units was a modification under ASC 718 and there was no incremental equity-based compensation expense to recognize. With the completion of the Company’s IPO, the remaining unrecognized expense associated with the restricted stock, received in exchange at the IPO for the modified Class P units, was recognized over the subsequent 12-month period through November 2022 Class P - Distributions Distributions payable to former Class P unit holders (“FCPUs”) triggered upon the completion of the Company’s 2021 IPO were determined to be settled in 2022 as a result of agreements reached with the FCPUs, and were recorded as an increase to additional paid-in capital. The agreements provided for contingent payments to the FCPUs of up to $0.6 million if certain conditions were met, which were recorded as equity-based compensation expense and accrued expenses and other current liabilities in 2022 which was subsequently reversed during 2022, when the timeframe for the payment conditions expired. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Income Taxes | 11. All of the Company’s income (loss) before income taxes is from the United States. The following table presents the components of the income tax provision (benefit) (in thousands): 2023 2022 2021 Current: Federal $ 401 $ 2,325 $ 5,919 State 464 64 1,956 Total current provision (benefit) 865 2,389 7,875 Deferred: Federal (2,204) 1,263 (1,341) State (337) 395 (322) Total deferred provision (benefit) (2,541) 1,658 (1,663) Income tax provision (benefit) $ (1,676) $ 4,047 $ 6,212 The following table presents a reconciliation of the statutory federal rate to the Company’s effective tax rate: 2023 2022 2021 Federal statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal tax benefit (0.4) 0.9 16.3 Non-deductible equity-based compensation expense (9.1) 13.5 22.0 Non-deductible officer compensation (3.0) 24.2 14.0 Change in uncertain tax position (0.3) 3.9 (0.9) Prior year adjustments — (1.0) 2.3 Federal 2018 amended return — (10.2) — Other (0.2) (0.4) 0.5 Effective tax rate 8.0 % 51.9 % 75.2 % The 2022 equity-based compensation shortfall rate impact associated with Executive Chairman has been reclassified from non-deductible equity-based compensation expense rate impact to non-deductible officer compensation rate impact in the table above to conform to the current year presentation. The 2021 non-deductible officer compensation rate impact has been reclassified from non-deductible equity-based compensation expense rate impact in the table above to conform to the current year presentation. Deferred income taxes reflect the net effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax purposes, and (b) operating losses and tax credit carryforwards. The following table presents the significant components of the Company’s deferred tax assets and liabilities (in thousands) as of: December 31, January 1, 2023 2023 Deferred tax assets: Accruals and allowances $ 1,603 $ 1,928 Interest disallowance 1,915 1,910 Inventory capitalization and other adjustments 1,769 1,405 Deferred revenue 2,196 1,475 Equity-based compensation 1,165 698 Net operating losses and tax credit carryforwards 592 148 R&D capitalization 3,189 1,113 Lease liabilities 7,570 8,319 Other 108 166 Gross deferred tax assets 20,107 17,162 Deferred tax liabilities: Depreciation and amortization (9,114) (7,825) Lease right-of-use asset (7,191) (8,074) Other — — Gross deferred tax liabilities (16,305) (15,899) Net deferred tax assets $ 3,802 $ 1,263 Net deferred tax assets are included in other noncurrent assets on the consolidated balance sheets as of December 31, 2023 and January 1, 2023. As of December 31, 2023, we had approximately $3.8 million in net DTAs. These DTAs include approximately $0.6 million related to net operating loss net operating loss increase our expenses in the period the allowance is recognized and materially adversely affect our results of operations and statement of financial conditions . As of December 31, 2023, the Company has federal and state net operating loss carryforwards of $1.9 million and $2.8 million, respectively. The federal net operating loss can be carried forward indefinitely and the state net operating loss carryforwards will begin to expire in 2038 if unused. The Company also has a state tax credit carryforward of an immaterial amount. The state tax credits will begin to expire in 2026 if unused. Lastly, the Company currently has $8.3 million of a Federal disallowed interest expense carryforward under Section 163(j) of the Internal Revenue Code, which can be carried forward indefinitely. Utilization of our net operating loss carryforwards, interest expense carryforwards, and tax credits may be subject to an annual limitation due to ownership changes that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code and similar state provisions. These ownership change limitations may limit the amount of net operating loss carryforwards or interest expense carryforwards and tax credits that can be utilized annually to offset future taxable income and tax, respectively. As of December 31, 2023 and January 1, 2023, the Company’s uncertain tax positions and related accrued interest and penalties were not material. The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits in the financial statements as a component of income tax expense. The Company does not anticipate that the uncertain tax positions balance as of December 31, 2023 will change significantly over the next 12 months. The Company’s federal income tax returns are not subject to examination by taxing authorities for fiscal years before 2020. The Company’s California income tax returns are not subject to examinations by taxing authorities for fiscal years before 2016. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions | |
Related Party Transactions | 12. Transactions with the LP Certain of the Company’s transactions with the LP are classified as a component within additional paid-in capital in the consolidated statements of stockholders’ deficit as there are no defined payments or other terms associated with these transactions. Such transactions included equity-based compensation related to outstanding Class P units of $4.5 million during 2021. With the completion of the IPO, the performance condition for pre-vesting distributions related to the Class P units was met and the Company recognized a cumulative catch-up to general and administrative expenses of $2.6 million during 2021 . Immediately prior to the completion of the IPO, 215,702 shares of common stock were issued to the LP as a stock dividend for $3.5 million based on the Company’s IPO price of $16.00 per share during 2021. Series B-1 Redeemable Preferred Stock Issuance The Series B-1 Preferred Stock shares purchased by current executives were recorded at fair value and the excess of the fair value of $2.02 per share over the consideration paid of $1.00 per share was recorded as equity-based compensation of $1.5 million in 2021. Management & Consulting Fees The Company has accrued for management and consulting fees to H.I.G. Capital, LLC (“H.I.G.”, the LP’s ultimate parent), Institutional Venture Partners (Series A Preferred Stockholder), and certain board members. Expenses for such services were $0.4 million to H.I.G and $0.3 million to other related parties during 2021. All outstanding management fees were settled at the time of our IPO and the management and consulting agreements were terminated upon the IPO. Significant Shareholder Relationships The Company identified three shareholders with aggregate ownership interest in the Company greater than 10%. The Company reviewed the respective investment portfolio holdings of these shareholders and identified investments in other entities that the Company engages in business with. All of these business relationships were obtained without the support of these shareholders, and as such, are believed to be at terms comparable to those that would be obtained through arm’s length dealings with unrelated third parties. Operating Leases Until June 2021, the Company leased operations and warehouse spaces from a limited partner of the LP and a Series B Preferred Stockholder of the Company. After June 2021, the Company continued to lease a retail space from this limited partner and Series B Preferred Stockholder. Following the liquidation of the LP and the redemption of the Series B Preferred Stock in November 2021, the Company leased this retail space from the same party, who remains related as a common stockholder of the Company. The lease expired on October 31, 2022. Total rent expense to the related party was zero, $0.1 million and $0.1 million during 2023, 2022 and 2021, respectively. |
Defined Contribution Plans
Defined Contribution Plans | 12 Months Ended |
Dec. 31, 2023 | |
Defined Contribution Plans | |
Defined Contribution Plans | 13. Defined Contribution Plans The Company sponsors a participant-directed 401(k) profit sharing plan for employees who have been working at the Company for at least three months and are at least 18 years of age. Participants may make wage-deferred contributions up to the maximum allowed by law. The Company matches 100% of each participating employee’s deferral up to a maximum of 4% of eligible compensation. The Company may make additional discretionary matching contributions up to 6% of eligible compensation. The Company made matching contributions of $1.1 million, $1.0 million, and $0.9 million during 2023, 2022, and 2021, respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events | |
Subsequent Events | 14. No material events have occurred that required recognition or disclosure in these financial statements. See “Business—Recent Developments for leadership changes”. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Significant Accounting Policies | |
Basis of Presentation and Fiscal Year | Basis of Presentation and Fiscal Year The Company’s fiscal year consists of a 52-week or 53-week period ending on the Sunday nearest December 31. The fiscal years ending December 31, 2023 (“2023”), ended January 1, 2023 (“2022) and ended January 2, 2022 (“2021”) consisted of 52-weeks. The consolidated financial statements and accompanying notes include the accounts of the Company and its wholly owned subsidiaries, after elimination of all intercompany balances and transactions. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the requirements of the Securities and Exchange Commission. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The significant estimates and assumptions made by management relate to sales return reserves and related assets for recovery, lease right-of-use assets and related lease liabilities, income tax valuation allowance and fair value of equity awards. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. As future events and their effects cannot be determined with precision, actual results could materially differ from those estimates and assumptions. |
Segment Reporting | Segment Reporting The Company manages its business on the basis of one operating and reportable |
Concentration of Credit Risks | Concentration of Credit Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents and restricted cash. Such amounts may exceed federally insured limits. The Company reduces credit risk by depositing its cash with major credit-worthy financial institutions within the United States. To date, the Company has not experienced any losses on its cash deposits. As of December 31, 2023, no single customer represented greater than 10% of the Company’s accounts receivable balance. As of January 1, 2023, a single wholesale customer represented 15% of the Company’s accounts receivable balance. No single customer accounted for greater than 10% of the Company’s net revenue during 2023, 2022 and 2021. |
Accounts Receivable | Accounts Receivable Accounts receivable consist primarily of receivables from credit card processing agencies and wholesale customers. Based on historical collections from these agencies and wholesale customers, no allowance for doubtful accounts was deemed necessary as of December 31, 2023 and January 1, 2023. |
Inventory | Inventory Inventory consists of finished goods, which are recorded at the lower of cost or net realizable value, with cost determined using the first-in-first-out method. The cost of inventory consists of merchandise costs and inbound freight costs. Inventory levels are reviewed to identify slow-moving merchandise, and promotions and markdowns are used to clear merchandise. In the period in which the Company determines estimated selling price, less costs to sell, is below cost, or identifies excess, obsolete, or unsalable items, the Company writes its inventory down to its net realizable value. |
Property and Equipment, net | Property and Equipment, net Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives, which range from 3 to 9 years. Improvements that extend the life of a specific asset are capitalized, while normal maintenance and repairs are expensed as incurred. When assets are sold or otherwise retired, their cost and related accumulated depreciation are removed from the balance sheet with any resulting gain or loss reflected in general and administrative expenses in the consolidated statements of operations and comprehensive income (loss). |
Goodwill and Tradename | Goodwill and Tradename Goodwill is stated at the excess of the acquisition price over the fair value of net assets acquired in a purchase acquisition and is not amortized. Goodwill arose from the LP’s purchase of 100% of the outstanding common stock of Lulus LLC on July 25, 2014 and the Company has one reporting unit. The Company’s tradename is an indefinite-lived intangible asset and is not amortized. The Company reviews its goodwill and tradename for impairment at least annually (on the first day of the fourth quarter) or more frequently whenever events or changes in circumstances indicate that the carrying amount may be impaired. When testing goodwill for impairment, the Company first performs an assessment of qualitative factors (“Step 0 Test”). The qualitative assessment includes assessing the totality of relevant events and circumstances that affect the fair value or carrying value of the reporting unit. These events and circumstances include macroeconomic conditions, industry and competitive environment conditions, overall financial performance, reporting unit specific events and market considerations. The Company also considers recent valuations of the reporting unit, including the magnitude of the difference between the most recent fair value estimate and the carrying value, as well as both positive and adverse events and circumstances, and the extent to which each of the events and circumstances identified may affect the comparison of a reporting unit’s fair value with its carrying value. If the qualitative assessment results in a conclusion that it is more likely than not that the fair value of a reporting unit exceeds the carrying value, then no further testing is performed for that reporting unit. The Company performed the qualitative assessment of its goodwill and determined that it is more likely than not that the fair value of its reporting unit exceeds the carrying value of the reporting unit. As a result, there was no goodwill impairment during 2023, 2022 and 2021. There was no accumulated impairment of goodwill as of December 31, 2023, and January 1, 2023. When testing the tradename for impairment, the Company first performs an assessment of qualitative factors. If qualitative factors indicate that it is more likely than not that the fair value of the tradename is less than its carrying amount, the Company tests the tradename for impairment at the asset level. The Company determines the fair value of the tradename and compares it to the carrying value. If the carrying value of the tradename exceeds the fair value, the Company recognizes an impairment loss in an amount equal to the excess. The Company performed the qualitative assessment of its tradename and determined that it is more likely than not that the fair value of the tradename exceeds the carrying value of the reporting unit. There were no additions to, disposals of, or impairments of the tradename during 2023, 2022 and 2021. There was no accumulated impairment of the tradename as of December 31, 2023, and January 1, 2023. |
Intangible Assets, net | Intangible Assets, net Intangible assets, net consists of capitalized internal-use software development, which is amortized over a 3-year period. The Company capitalizes certain costs in connection with obtaining or developing software for internal use. Additionally, the Company capitalizes qualifying costs incurred for upgrades and enhancements that result in additional functionality to existing software. Amortization of such costs begins when the project is substantially complete and ready for its intended use. Costs related to design or maintenance are expensed as incurred. Intangible asset amortization expense was $1.9 million, $1.7 million and $1.6 million during 2023, 2022 and 2021, respectively. Intangible assets are amortized on a straight-line basis over the estimated useful life of the assets. The Company reviews intangible assets for impairment under the long-lived asset model described below. No impairment of intangible assets was recorded during the years presented. |
Long-Lived Asset Impairment | Long-Lived Asset Impairment The Company evaluates long-lived assets, including lease right-of-use assets, for impairment periodically whenever events or changes in circumstances indicate that their related carrying amounts may not be recoverable. In evaluating long-lived assets for recoverability, the Company uses its best estimate of future cash flows expected to result from the use of the asset and eventual disposition. To the extent that projected undiscounted future net cash flows attributable to the asset are less than the carrying amount, an impairment loss is recognized in an amount equal to the difference between the carrying value of such asset and its estimated fair value. There was no impairment recorded during the years presented. |
Leases | Leases The Company changed its method of accounting for leases as of January 3, 2022 due to the adoption of FASB”) Accounting Standard Codification (“ASC”) 842, Leases (“ASC 842”). Contracts that have been determined to convey the right to use an identified asset are evaluated for classification as an operating or finance lease. For the Company’s operating and finance leases, the Company records a lease liability based on the present value of the lease payments at lease inception. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the Company uses its incremental borrowing rate (“IBR”). The determination of the IBR requires judgment and is primarily based on publicly-available information for companies within similar industries and with similar credit profiles. We adjust the rate for the impact of collateralization, the lease term and other specific terms included in each lease arrangement. The IBR is determined at the lease commencement and is subsequently reassessed upon a modification to the lease arrangement. The right-of-use asset is recorded based on the corresponding lease liability at lease inception, adjusted for payments made to the lessor at or before the commencement date, initial direct costs incurred and any tenant incentives allowed for under the lease. The Company does not include optional renewal terms or early termination provisions unless the Company is reasonably certain such options would be exercised at the inception of the lease. Lease right-of-use assets, current portion of lease liabilities, and lease liabilities, net of current portion are included on the consolidated balance sheets. Fixed lease expense for operating leases is recognized on a straight-line basis, unless the right-of-use assets have been impaired, over the reasonably assured lease term based on the total lease payments and is included in operating expenses in the consolidated statements of operations and comprehensive income (loss). Fixed and variable lease expense on operating leases is recognized within operating expenses in the consolidated statements of operations and comprehensive income (loss). Finance lease expenses are recognized on a straight-line basis. Fixed and variable expenses are captured within interest expense and depreciation expense, which has components within general and administrative expenses and cost of revenue. The Company’s non-lease components are primarily related to maintenance, insurance and taxes, which varies based on future outcomes and is thus recognized in lease expense when incurred. |
Revenue Recognition | Revenue Recognition The Company generates revenue primarily from the sale of merchandise products directly to end customers. The sale of products is a distinct performance obligation, and revenue is recognized at a point in time when control of the promised product is transferred to customers, which the Company determined occurs upon shipment based on its evaluation of the related shipping terms. Revenue is recognized in an amount that reflects the transaction price consideration that the Company expects to receive in exchange for those products. The Company’s payment terms are typically at the time of order processing and shipment. The Company elected to exclude from revenue taxes assessed by governmental authorities, including value-added and other sales-related taxes, that are imposed on and concurrent with revenue-producing activities. The Company has elected to apply the practical expedient, relative to e-commerce sales, which allows an entity to account for shipping and handling as fulfillment activities, and not a separate performance obligation. Accordingly, the Company recognizes revenue for only one performance obligation, the sale of the product, at shipping point (when the customer gains control). Shipping and handling costs associated with outbound freight are accounted for as fulfillment costs and are included in cost of goods sold. The Company has elected to apply the practical expedient to expense costs as incurred for incremental costs to obtain a contract when the amortization period would have been one year or less. Revenue from merchandise product sales is reported net of sales returns, which includes an estimate of future returns based on historical return rates, with a corresponding reduction to cost of sales. There is judgment in utilizing historical trends for estimating future returns. The Company’s refund liability for sales returns is included in the returns reserve on its consolidated balance sheets and represents the expected value of the refund that will be due to the Company’s customers. The Company also has a corresponding asset for recovery that represents the expected net realizable value of the merchandise inventory to be returned. The Company sells stored-value gift cards to customers and offers merchandise credit stored-value cards for certain returns. Such stored-value cards do not have an expiration date. The Company recognizes revenue from stored-value cards when the card is redeemed by the customer. The Company has determined that sufficient evidence exists to support an estimate for stored-value card breakage. Subject to requirements to remit balances to governmental agencies, breakage is recognized as revenue in proportion to the pattern of rights exercised by the customer, which is substantially within thirty-six months from the date of issuance. The amount of breakage recognized in revenue during 2023, 2022 and 2021 was not material. The Company has two types of contractual liabilities: (i) cash collections from its customers prior to delivery of products purchased (“deferred revenue”), which are initially recorded within accrued expenses and recognized as revenue when the products are shipped, (ii) unredeemed gift cards and online store credits, which are initially recorded as a stored-value card liability and are recognized as revenue in the period they are redeemed. The following table summarizes the significant changes in the contract liabilities balances during 2023, 2022 and 2021 (in thousands): Deferred Stored-Value Revenue Cards Balance as of January 3, 2021 $ 792 $ 4,973 Revenue recognized that was included in contract liability balance at the beginning of the period (792) (1,471) Increase due to cash received, excluding amounts recognized as revenue during the period 145 3,738 Balance as of January 2, 2022 145 7,240 Revenue recognized that was included in contract liability balance at the beginning of the period (145) (3,282) Increase due to cash received, excluding amounts recognized as revenue during the period 69 6,870 Balance as of January 1, 2023 69 10,828 Revenue recognized that was included in contract liability balance at the beginning of the period (69) (4,073) Increase due to cash received, excluding amounts recognized as revenue during the period 50 6,387 Balance as of December 31, 2023 $ 50 $ 13,142 |
Cost of Revenue | Cost of Revenue Cost of revenue consists of the product costs of merchandise sold to customers; shipping and handling costs including all inbound, outbound, and return shipping expenses; rent, insurance, business property tax, utilities, depreciation and amortization, and repairs and maintenance related to the Company’s distribution facilities; and charges related to inventory shrinkage, damages and the allowance for excess or obsolete inventory. |
General and Administrative Expenses | General and Administrative Expenses General and administrative expenses consist primarily of payroll and benefits costs, including equity-based compensation for the Company’s employees involved in general corporate functions including finance, merchandising, marketing, and technology, as well as costs associated with the use by these functions of facilities and equipment, including depreciation and amortization, rent and other occupancy expenses. |
Selling and Marketing Expenses | Selling and Marketing Expenses Selling and marketing expenses consist primarily of customer service, payment processing fees, advertising, targeted online performance marketing and search engine optimization costs. Selling and marketing expenses also include spend on brand marketing channels, including cash and free clothing compensation to influencers, events and other forms of online and offline marketing related to growing and retaining the customer base. Advertising costs included in selling and marketing expenses were $58.5 million, $64.4 million, and $53.6 million in 2023, 2022 and 2021, respectively. |
Equity-Based Compensation | Equity-Based Compensation The Company grants stock-based awards to certain employees, officers, directors, and other nonemployee service providers. Equity-based compensation is measured at the grant date or modification date for all equity-based awards made to employees and nonemployees based on the estimated fair value of the awards. Equity-based compensation expense is recognized on a straight-line basis over the period the employee or non-employee is required to provide service in exchange for the award, which is generally the vesting period. The Company classifies equity-based compensation expense as general and administrative expense in the Company’s consolidated statements of operations and comprehensive income (loss). The Company has elected to recognize forfeitures by reducing the equity-based compensation expense in the same period as the forfeitures occur. The fair value of grants of restricted stock or restricted stock units (“RSUs”) is based on the fair value of the Company’s common stock underlying the award on the grant date or modification date. For stock option awards, the Company applies the Black-Scholes option pricing model to determine the fair value. The model utilizes the estimated per share fair value of the Company’s underlying common stock at the grant date, the expected or contractual term of the option, the expected stock price volatility, risk-free interest rates, and the expected dividend yield of the common stock. The Company bases its estimate of expected volatility on the historical volatility of comparable companies from a representative peer group selected based on industry, financial, and market capitalization data. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury implied yield at the date of grant. The Company has elected to use the “simplified method” to determine the expected term which is the midpoint between the vesting date and the end of the contractual term because it has insufficient history upon which to base an assumption about the term; the Company believes the simplified method approximates a term if it were to be based on expected life. The expected dividend yield is 0.0% as the Company has not paid and does not anticipate paying dividends on its common stock. Determining the grant date fair value of options using the Black-Scholes option pricing model requires management to make assumptions and judgments. These estimates involve inherent uncertainties and, if different assumptions had been used, stock-based compensation expense could have been materially different from the amounts recorded. Certain prior year amounts have been reclassified for consistency with the current year presentation. The Company combined equity-based compensation expense and equity-based compensation expense related to CEO special compensation awards into one line item, equity-based compensation expense, in the consolidated statements of cash flows. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method, under which Deferred Tax Assets (“DTA”) and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which they are expected to be realized or settled. The Company believes that it is more likely than not that forecasted income, together with future reversals of existing taxable temporary differences and results of recent operations, will be sufficient to fully recover the deferred tax assets. In the event that the Company determines all or part of the net deferred tax assets are not realizable in the future, the Company would record a valuation allowance. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to unrecognized tax benefits, if any, as income tax expense. |
Net Income (Loss) Per Share Attributable to Common Stockholders | Net Income (Loss) Per Share Attributable to Common Stockholders The Company calculates basic and diluted net income (loss) per share attributable to common stockholders in conformity with the two-class method required for participating securities as the application of the if converted method is not more dilutive. The two-class method requires income (loss) available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The Company considers its redeemable preferred stock and convertible preferred stock to be participating securities. In accordance with the two-class method, net income (loss) is adjusted for earnings allocated to these participating securities and the related number of outstanding shares of the participating securities, which include contractual participation rights in undistributed earnings, have been excluded from the computation of basic and diluted net income (loss) per share attributable to common stockholders. The redeemable preferred stock and convertible preferred stock contractually entitle the holders of such shares to participate in dividends but do not contractually require the holders of such shares to participate in the Company’s losses. As such, where applicable, net losses were not allocated to these securities. Basic net income (loss) per share attributable to common stockholders is computed using net income (loss) attributable to common stockholders divided by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share attributable to common stockholders represents net income (loss) attributable to common stockholders divided by the weighted average number of common shares outstanding during the period, including the effects of any dilutive securities outstanding. The following table presents the calculation of basic and diluted weighted average shares used to compute net income (loss) per share attributable to common stockholders: 2023 2022 2021 Weighted average shares used to compute net income (loss) per share attributable to common stockholders – Basic 39,879,121 38,583,854 20,229,675 Dilutive securities: Unvested restricted stock - 55,127 - Unvested RSUs - 139,064 - Special compensation awards - 67,547 - Employee Stock Purchase Plan - 7,801 - Weighted average shares used to compute net income (loss) per share attributable to common stockholders – Diluted 39,879,121 38,853,393 20,229,675 The following securities were excluded from the computation of diluted net income (loss) per share attributable to common stockholders for the fiscal years presented because including them would have been anti-dilutive (on an as-converted basis): 2023 2022 2021 Stock options 161,397 322,793 322,793 Unvested restricted stock 23,379 78,303 381,612 Unvested RSUs 3,568,406 904,076 — Performance stock units 1,811,571 — — Employee stock purchase plan shares 117,511 — — 2023 Bonus Plan 196,477 — — CEO award share settlement — — 417,828 Total 5,878,741 1,305,172 1,122,233 |
Redeemable Preferred Stock | Redeemable Preferred Stock The Company has elected to record its redeemable preferred stock at the greater of its redemption value or the issuance date fair value, net of issuance costs, as it is probable of becoming redeemable due to the passage of time. Any change to the carrying value of redeemable preferred stock recognized in each period is recorded to additional paid-in capital, or in the absence of additional paid-in capital, recorded to accumulated deficit. The issuance date fair value of the redeemable preferred stock shares purchased by entities related to current employees, board members, and service providers was higher than the consideration paid and such excess was recorded as equity-based compensation. The excess of the fair value over consideration paid for redeemable preferred stock shares purchased by an existing convertible preferred stockholder was accounted for as a deemed dividend and recorded in additional paid-in capital. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) is defined as a change in equity of a business enterprise during a period, resulting from transactions from non-owner sources. To date, the Company has not had any transactions that are required to be reported in comprehensive income (loss) other than the net income (loss) incurred from operations. Thus, comprehensive income (loss) is the same as net income (loss) for the periods presented. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended, which amends guidance on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities from an incurred loss methodology to an expected loss methodology. For assets held at amortized cost basis, the guidance eliminates the probable initial recognition threshold and instead requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses are recorded through an allowance for credit losses, rather than a write-down, limited to the amount by which fair value is below amortized cost. Additional disclosures about significant estimates and credit quality are also required. The guidance is effective for the Company for fiscal years beginning after December 15, 2022. The Company adopted this guidance on January 2, 2023, and it did not have a material impact on its consolidated financial statements or disclosure requirements. Recently Issued Accounting Pronouncements In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Significant Accounting Policies | |
Summary of significant changes in contract liabilities balances | The following table summarizes the significant changes in the contract liabilities balances during 2023, 2022 and 2021 (in thousands): Deferred Stored-Value Revenue Cards Balance as of January 3, 2021 $ 792 $ 4,973 Revenue recognized that was included in contract liability balance at the beginning of the period (792) (1,471) Increase due to cash received, excluding amounts recognized as revenue during the period 145 3,738 Balance as of January 2, 2022 145 7,240 Revenue recognized that was included in contract liability balance at the beginning of the period (145) (3,282) Increase due to cash received, excluding amounts recognized as revenue during the period 69 6,870 Balance as of January 1, 2023 69 10,828 Revenue recognized that was included in contract liability balance at the beginning of the period (69) (4,073) Increase due to cash received, excluding amounts recognized as revenue during the period 50 6,387 Balance as of December 31, 2023 $ 50 $ 13,142 |
Schedule of basic and diluted weighted average shares used to compute net (loss) income per share | 2023 2022 2021 Weighted average shares used to compute net income (loss) per share attributable to common stockholders – Basic 39,879,121 38,583,854 20,229,675 Dilutive securities: Unvested restricted stock - 55,127 - Unvested RSUs - 139,064 - Special compensation awards - 67,547 - Employee Stock Purchase Plan - 7,801 - Weighted average shares used to compute net income (loss) per share attributable to common stockholders – Diluted 39,879,121 38,853,393 20,229,675 |
Schedule of securities that were excluded from computation of diluted net (loss) income per share | 2023 2022 2021 Stock options 161,397 322,793 322,793 Unvested restricted stock 23,379 78,303 381,612 Unvested RSUs 3,568,406 904,076 — Performance stock units 1,811,571 — — Employee stock purchase plan shares 117,511 — — 2023 Bonus Plan 196,477 — — CEO award share settlement — — 417,828 Total 5,878,741 1,305,172 1,122,233 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Balance Sheet Components | |
Schedule of property and equipment, net | Property and equipment, net consisted of the following (in thousands) as of: Estimated Useful Lives December 31, January 1, in Years 2023 2023 Leasehold improvements 3 - 9 $ 4,314 $ 3,802 Equipment 3 - 7 3,053 2,659 Furniture and fixtures 3 - 7 2,151 1,880 Construction in progress 688 36 Total property and equipment 10,206 8,377 Less: accumulated depreciation and amortization (5,494) (3,986) Property and equipment, net $ 4,712 $ 4,391 |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands) as of: December 31, January 1, 2023 2023 Accrued compensation and benefits $ 5,057 $ 6,751 Accrued marketing 5,002 3,206 Accrued inventory 4,151 3,411 Accrued freight 1,940 1,890 Other 2,193 2,718 Accrued expenses and other current liabilities $ 18,343 $ 17,976 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Schedule of future minimum lease payments for the Company's operating and financing lease | As of December 31, 2023, the future minimum lease payments for the Company’s operating and finance leases for each of the next five fiscal years, and thereafter, were as follows (in thousands): Fiscal Year: Operating Leases Finance Leases Total 2024 $ 5,629 $ 1,777 $ 7,406 2025 6,263 1,504 7,767 2026 4,970 252 5,222 2027 5,138 74 5,212 2028 5,252 6 5,258 Thereafter 6,380 — 6,380 Total undiscounted lease payment 33,632 3,613 37,245 Present value adjustment (6,020) (150) (6,170) Total lease liabilities 27,612 3,463 31,075 Less: lease liabilities, current (3,965) (1,683) (5,648) Lease liabilities, noncurrent $ 23,647 $ 1,780 $ 25,427 |
Schedule of supplemental disclosure of lease costs and other information | The following information represents supplemental disclosure of lease costs, components of the statement of cash flows related to operating and finance leases and components of right-of-use assets (in thousands): December 31, 2023 Finance lease cost Amortization of ROU assets $ 1,376 Interest on lease liabilities 128 Operating lease cost 5,530 Short-term lease cost 12 Variable lease cost 850 Total lease cost $ 7,896 Lease cost included in cost of revenue $ 6,301 Lease cost included in general and administrative expenses $ 1,595 Weighted-average remaining lease term - finance leases 30 months Weighted-average remaining lease term - operating leases 74 months Weighted-average discount rate - finance leases 3.64% Weighted-average discount rate - operating leases 6.49% |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity-Based Compensation | |
Schedule of estimate fair value of purchase rights under ESPP | Expected term (in years) 0.50 to 1.00 Expected volatility 93.84 to 99.95 % Risk-free interest rate 5.44 to 5.61 % Dividend yield - Weighted average fair value per share of ESPP awards granted $ 0.60 to 0.98 |
Summary of stock option activity | A summary of stock option activity in 2023 is as follows Weighted- Weighted- Average Average Exercise Remaining Aggregate Options Price per Contractual Intrinsic Outstanding Option Life (years) Value Balance as of January 1, 2023 322,793 $ 11.35 8.29 Granted — — — Forfeited (161,396) (11.35) — Outstanding as of December 31, 2023 161,397 $ 11.35 7.29 Exercisable as of December 31, 2023 161,397 $ 11.35 7.29 $ — Vested and expected to vest as of December 31, 2023 161,397 $ 11.35 7.29 $ — |
Summary of assumptions used to estimate the fair value of options granted | Fair value of common stock $ 25.86 Expected term (in years) 6.48 Expected volatility 50.62 % Risk-free rate 1.17 % Dividend yield 0 % |
Summary of restricted stock and restricted stock units | Unvested Weighted- Restricted Average Fair Stock Value per Share Balance at January 1, 2023 78,303 $ 5.38 Restricted stock granted — — Restricted stock vested (50,294) 4.47 Restricted stock forfeited (4,630) 4.27 Balance at December 31, 2023 23,379 $ 4.54 Weighted- Unvested Average Fair RSUs Value per Share Balance at January 1, 2023 1,336,674 $ 8.94 RSUs granted 4,303,114 2.66 RSUs vested (1,932,500) 5.93 RSUs forfeited (138,882) 5.16 Balance at December 31, 2023 3,568,406 $ 3.14 |
Summary of performance stock units | Weighted- Unvested Average Fair PSUs Value per Share Balance at January 1, 2023 — $ — PSUs granted 1,811,571 2.65 PSUs vested — — PSUs forfeited — — Balance at December 31, 2023 1,811,571 $ 2.65 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Schedule of components of provision (benefit) for income taxes | All of the Company’s income (loss) before income taxes is from the United States. The following table presents the components of the income tax provision (benefit) (in thousands): 2023 2022 2021 Current: Federal $ 401 $ 2,325 $ 5,919 State 464 64 1,956 Total current provision (benefit) 865 2,389 7,875 Deferred: Federal (2,204) 1,263 (1,341) State (337) 395 (322) Total deferred provision (benefit) (2,541) 1,658 (1,663) Income tax provision (benefit) $ (1,676) $ 4,047 $ 6,212 |
Schedule of reconciliation of the statutory federal rate to the Company's effective tax rate | 2023 2022 2021 Federal statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal tax benefit (0.4) 0.9 16.3 Non-deductible equity-based compensation expense (9.1) 13.5 22.0 Non-deductible officer compensation (3.0) 24.2 14.0 Change in uncertain tax position (0.3) 3.9 (0.9) Prior year adjustments — (1.0) 2.3 Federal 2018 amended return — (10.2) — Other (0.2) (0.4) 0.5 Effective tax rate 8.0 % 51.9 % 75.2 % |
Schedule of components of the Company's deferred tax assets and liabilities | The following table presents the significant components of the Company’s deferred tax assets and liabilities (in thousands) as of: December 31, January 1, 2023 2023 Deferred tax assets: Accruals and allowances $ 1,603 $ 1,928 Interest disallowance 1,915 1,910 Inventory capitalization and other adjustments 1,769 1,405 Deferred revenue 2,196 1,475 Equity-based compensation 1,165 698 Net operating losses and tax credit carryforwards 592 148 R&D capitalization 3,189 1,113 Lease liabilities 7,570 8,319 Other 108 166 Gross deferred tax assets 20,107 17,162 Deferred tax liabilities: Depreciation and amortization (9,114) (7,825) Lease right-of-use asset (7,191) (8,074) Other — — Gross deferred tax liabilities (16,305) (15,899) Net deferred tax assets $ 3,802 $ 1,263 |
Description of Business, Orga_2
Description of Business, Organization and Liquidity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||||
Nov. 15, 2021 | Nov. 14, 2021 | Dec. 31, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | Nov. 30, 2021 | Dec. 31, 2014 | Jul. 25, 2014 | |
Subsidiary, Sale of Stock [Line Items] | ||||||||
Acquired percentage of outstanding common stock of subsidiary by LP | 100% | 100% | ||||||
Cash and cash equivalents | $ 2,506 | $ 10,219 | $ 11,402 | |||||
Revolving line of credit | 8,000 | |||||||
Net proceeds | $ 82,546 | |||||||
Common stock, shares authorized | 250,000,000 | 250,000,000 | 250,000,000 | |||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | |||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Number of shares of common stock upon conversion of convertible preferred stock | 15,000,000 | |||||||
Underwriting discounts and commissions | $ 832 | |||||||
LP | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Issuance of common stock (in shares) | 215,702 | 215,702 | ||||||
2021 Revolving Facility | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Principal amount of credit facility | $ 41,700 | $ 50,000 | ||||||
IPO | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Issuance of common stock (in shares) | 5,750,000 | |||||||
Share price | $ 16 | |||||||
Net proceeds | $ 82,000 | |||||||
Other issuance costs | 3,900 | |||||||
Redeemable preferred stock were redeemed for liquidation preference | 17,900 | |||||||
Underwriting discounts and commissions | $ 6,100 |
Significant Accounting Polici_4
Significant Accounting Policies - Segment Reporting (Details) | 12 Months Ended |
Dec. 31, 2023 segment | |
Significant Accounting Policies | |
Number of operating segments | 1 |
Number of reporting segments | 1 |
Significant Accounting Polici_5
Significant Accounting Policies - Concentration of Credit Risks (Details) - Customer concentration risk - customer | 12 Months Ended | |||
Jan. 01, 2023 | Dec. 31, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | |
Accounts receivable | Maximum | ||||
Concentration Risk | ||||
Concentration risk percentage | 10% | |||
Number of customers | 0 | |||
Accounts receivable | Single wholesale customer | ||||
Concentration Risk | ||||
Concentration risk percentage | 15% | |||
Revenue | Maximum | ||||
Concentration Risk | ||||
Concentration risk percentage | 10% | 10% | 10% | |
Number of customers | 0 | 0 | 0 | 0 |
Significant Accounting Polici_6
Significant Accounting Policies - Accounts Receivable (Details) - USD ($) | Dec. 31, 2023 | Jan. 01, 2023 |
Significant Accounting Policies | ||
Allowance for doubtful accounts | $ 0 | $ 0 |
Significant Accounting Polici_7
Significant Accounting Policies - Property and Equipment, net (Details) | Dec. 31, 2023 |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful lives of the property, plant and equipment | 3 years |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful lives of the property, plant and equipment | 9 years |
Significant Accounting Polici_8
Significant Accounting Policies - Intangible Assets, net (Details) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2023 USD ($) item | Jan. 01, 2023 USD ($) | Jan. 02, 2022 USD ($) | Dec. 31, 2014 | Jul. 25, 2014 | |
Significant Accounting Policies | |||||
Acquired percentage of outstanding common stock of subsidiary by LP | 100% | 100% | |||
Number of reporting units | item | 1 | ||||
Impairment of goodwill | $ 0 | $ 0 | $ 0 | ||
Accumulated impairment of goodwill | 0 | 0 | |||
Change in value of tradename during the period | 0 | 0 | 0 | ||
Accumulated impairment of tradename | $ 0 | 0 | |||
Useful life | 3 years | ||||
Amortization of intangible assets | $ 1.9 | 1.7 | 1.6 | ||
Impairment of intangible assets, excluding goodwill | $ 0 | $ 0 | $ 0 |
Significant Accounting Polici_9
Significant Accounting Policies - Long-Lived Asset Impairment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | |
Significant Accounting Policies | |||
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 |
Significant Accounting Polic_10
Significant Accounting Policies - Revenue Recognition (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) item | Jan. 01, 2023 USD ($) | Jan. 02, 2022 USD ($) | |
Disaggregation of Revenue | |||
Number of performance obligation | item | 1 | ||
Practical expedient | true | ||
Number of contractual liabilities | item | 2 | ||
Maximum | |||
Disaggregation of Revenue | |||
Revenue duration period | 36 months | ||
Deferred Revenue | |||
Significant changes in the contract liabilities balances | |||
Beginning Balance | $ 69 | $ 145 | $ 792 |
Revenue recognized that was included in contract liability balance at the beginning of the period | (69) | (145) | (792) |
Increase due to cash received, excluding amounts recognized as revenue during the period | 50 | 69 | 145 |
Ending Balance | 50 | 69 | 145 |
Stored-Value Cards | |||
Significant changes in the contract liabilities balances | |||
Beginning Balance | 10,828 | 7,240 | 4,973 |
Revenue recognized that was included in contract liability balance at the beginning of the period | (4,073) | (3,282) | (1,471) |
Increase due to cash received, excluding amounts recognized as revenue during the period | 6,387 | 6,870 | 3,738 |
Ending Balance | $ 13,142 | $ 10,828 | $ 7,240 |
Significant Accounting Polic_11
Significant Accounting Policies - Selling and Marketing Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | |
Selling and Marketing Expense. | |||
Significant Accounting Policies | |||
Advertising costs | $ 58.5 | $ 64.4 | $ 53.6 |
Significant Accounting Polic_12
Significant Accounting Policies - Equity-Based Compensation (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Significant Accounting Policies | |
Expected dividend yield | 0% |
Significant Accounting Polic_13
Significant Accounting Policies - Basic and Diluted Weighted Average Shares (Details) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method | |||
Weighted average shares used to compute net income (loss) per share attributable to common stockholders - Basic | 39,879,121 | 38,583,854 | 20,229,675 |
Dilutive securities: | |||
Weighted average shares used to compute net income (loss) per share attributable to common stockholders - Diluted | 39,879,121 | 38,853,393 | 20,229,675 |
Unvested restricted stock | |||
Dilutive securities: | |||
Dilutive securities | 55,127 | ||
Unvested RSUs | |||
Dilutive securities: | |||
Dilutive securities | 139,064 | ||
Special compensation awards | |||
Dilutive securities: | |||
Dilutive securities | 67,547 | ||
Employee Stock Purchase Plan | |||
Dilutive securities: | |||
Dilutive securities | 7,801 |
Significant Accounting Polic_14
Significant Accounting Policies - Anti-dilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Total | 5,878,741 | 1,305,172 | 1,122,233 |
Employee Stock Option | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Total | 161,397 | 322,793 | 322,793 |
Unvested restricted stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Total | 23,379 | 78,303 | 381,612 |
Unvested RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Total | 3,568,406 | 904,076 | |
Performance stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Total | 1,811,571 | ||
Employee stock purchase plan shares | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Total | 117,511 | ||
2023 Bonus Plan | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Total | 196,477 | ||
CEO award share settlement | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Total | 417,828 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Nov. 30, 2021 |
2021 Revolving Facility | ||
Fair Value Measurements | ||
Revolving line of credit | $ 41.7 | $ 50 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | |
Property, Plant and Equipment | |||
Total property and equipment | $ 10,206 | $ 8,377 | |
Less: accumulated depreciation and amortization | (5,494) | (3,986) | |
Property and equipment, net | 4,712 | 4,391 | |
Depreciation of property and equipment | $ 2,900 | 2,400 | $ 1,300 |
Minimum | |||
Property, Plant and Equipment | |||
Estimated Useful Lives (in years) | 3 years | ||
Maximum | |||
Property, Plant and Equipment | |||
Estimated Useful Lives (in years) | 9 years | ||
Leasehold improvements | |||
Property, Plant and Equipment | |||
Total property and equipment | $ 4,314 | 3,802 | |
Leasehold improvements | Minimum | |||
Property, Plant and Equipment | |||
Estimated Useful Lives (in years) | 3 years | ||
Leasehold improvements | Maximum | |||
Property, Plant and Equipment | |||
Estimated Useful Lives (in years) | 9 years | ||
Equipment | |||
Property, Plant and Equipment | |||
Total property and equipment | $ 3,053 | 2,659 | |
Equipment | Minimum | |||
Property, Plant and Equipment | |||
Estimated Useful Lives (in years) | 3 years | ||
Equipment | Maximum | |||
Property, Plant and Equipment | |||
Estimated Useful Lives (in years) | 7 years | ||
Furniture and fixtures | |||
Property, Plant and Equipment | |||
Total property and equipment | $ 2,151 | 1,880 | |
Furniture and fixtures | Minimum | |||
Property, Plant and Equipment | |||
Estimated Useful Lives (in years) | 3 years | ||
Furniture and fixtures | Maximum | |||
Property, Plant and Equipment | |||
Estimated Useful Lives (in years) | 7 years | ||
Construction in progress | |||
Property, Plant and Equipment | |||
Total property and equipment | $ 688 | $ 36 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jan. 01, 2023 |
Accrued Expenses and Other Current Liabilities | ||
Accrued compensation and benefits | $ 5,057 | $ 6,751 |
Accrued marketing | 5,002 | 3,206 |
Accrued inventory | 4,151 | 3,411 |
Accrued freight | 1,940 | 1,890 |
Other | 2,193 | 2,718 |
Accrued expenses and other current liabilities | $ 18,343 | $ 17,976 |
Debt - Outstanding Debt under t
Debt - Outstanding Debt under the New Revolving Facility (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Nov. 15, 2021 | Nov. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | Aug. 31, 2017 | |
Line of Credit Facility | |||||||
Repaid outstanding balance | $ 30,000 | $ 30,000 | $ 8,580 | ||||
Weighted average interest rate | 11.60% | ||||||
2021 Revolving Facility | |||||||
Line of Credit Facility | |||||||
Revolving line of credit | $ 50,000 | 41,700 | |||||
Increase in maximum borrowing capacity amount | 25,000 | ||||||
Borrowed amount | 13,000 | ||||||
Repaid outstanding balance | $ 30,000 | ||||||
Variable commitment fee percent | 0.375% | ||||||
Interest rate at period end | 7.20% | 7.20% | |||||
Weighted average interest rate | 7.70% | 4.20% | |||||
Expected increase in interest rate per annum | 2% | ||||||
2021 Revolving Facility | Maximum | |||||||
Line of Credit Facility | |||||||
Revolving line of credit | 75,000 | ||||||
2021 Revolving Facility | Secured overnight financing ("SOFR") rate | |||||||
Line of Credit Facility | |||||||
Debt instrument applicable margin percent | 1.75% | ||||||
2021 Revolving Facility | Base Rate | |||||||
Line of Credit Facility | |||||||
Debt instrument applicable margin percent | 0.75% | ||||||
2021 Revolving Facility | Federal funds rate | |||||||
Line of Credit Facility | |||||||
Debt instrument applicable margin percent | 0.50% | ||||||
2021 Revolving Facility | One month SOFR | |||||||
Line of Credit Facility | |||||||
Debt instrument applicable margin percent | 1% | ||||||
Letters of credit | |||||||
Line of Credit Facility | |||||||
Revolving line of credit | $ 7,500 | ||||||
Credit facility outstanding | $ 300 | ||||||
Line of credit remaining borrowing capacity | $ 7,200 | ||||||
2017 Revolving Facility | |||||||
Line of Credit Facility | |||||||
Revolving line of credit | $ 10,000 | ||||||
Repaid outstanding balance | $ 8,600 |
Debt - Outstanding Debt under_2
Debt - Outstanding Debt under the Term Loan (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Nov. 15, 2021 | Dec. 31, 2023 | Jan. 02, 2022 | Aug. 31, 2017 | |
Debt Instrument [Line Items] | ||||
Loss on extinguishment of debt | $ (1,392) | |||
2017 Revolving Facility | ||||
Debt Instrument [Line Items] | ||||
Revolving line of credit | $ 10,000 | |||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 135,000 | |||
Repayment of principal | $ 105,800 | |||
Repayment of interest | 1,400 | |||
Prepayment penalties | 0 | |||
Loss on extinguishment of debt | (1,400) | |||
Unamortized debt issuance costs and debt discounts written-off | 2,300 | |||
Debt costs forgiven | $ 900 | |||
Debt instrument effective interest rate | 15.30% |
Debt - 2017 Revolving Facility
Debt - 2017 Revolving Facility (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | |
Line of Credit Facility [Line Items] | ||||
Repaid outstanding balance | $ 30,000 | $ 30,000 | $ 8,580 | |
Effective interest rate | 11.60% | |||
2017 Revolving Facility | ||||
Line of Credit Facility [Line Items] | ||||
Repaid outstanding balance | $ 8,600 | |||
2017 Revolving Facility | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Variable rates | 7% |
Debt - Debt Discounts and Issua
Debt - Debt Discounts and Issuance Costs (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Jan. 01, 2023 |
Other non-current assets | ||
Debt Instrument | ||
Unamortized debt issuance costs | $ 0.1 | $ 0.3 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Operating Leases | |
2024 | $ 5,629 |
2025 | 6,263 |
2026 | 4,970 |
2027 | 5,138 |
2028 | 5,252 |
Thereafter | 6,380 |
Total undiscounted lease payment | 33,632 |
Present value adjustment | (6,020) |
Total lease liabilities | 27,612 |
Less: lease liabilities, current | $ (3,965) |
Operating lease liability current balance sheet position | Lease liabilities, current |
Lease liabilities, noncurrent | $ 23,647 |
Operating lease liability non-current balance sheet position | Lease liabilities, noncurrent |
Finance Leases | |
2024 | $ 1,777 |
2025 | 1,504 |
2026 | 252 |
2027 | 74 |
2028 | 6 |
Total undiscounted lease payment | 3,613 |
Present value adjustment | (150) |
Total lease liabilities | 3,463 |
Less: lease liabilities, current | $ (1,683) |
Finance lease liability current balance sheet position | Lease liabilities, current |
Lease liabilities, noncurrent | $ 1,780 |
Finance lease liability non-current balance sheet position | Lease liabilities, noncurrent |
Total operating and finance lease liabilities | |
2024 | $ 7,406 |
2025 | 7,767 |
2026 | 5,222 |
2027 | 5,212 |
2028 | 5,258 |
Thereafter | 6,380 |
Total undiscounted lease payment | 37,245 |
Present value adjustment | (6,170) |
Total lease liabilities | 31,075 |
Less: lease liabilities, current | (5,648) |
Lease liabilities, noncurrent | $ 25,427 |
Leases - Lease Cost and Other I
Leases - Lease Cost and Other Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Lease cost | |
Amortization of ROU assets | $ 1,376 |
Interest on lease liabilities | 128 |
Operating lease cost | 5,530 |
Short-term lease cost | 12 |
Variable lease cost | 850 |
Total lease cost | $ 7,896 |
Weighted-average remaining lease term - finance leases | 30 months |
Weighted-average remaining lease term - operating leases | 74 months |
Weighted-average discount rate - finance leases | 3.64% |
Weighted-average discount rate - operating leases | 6.49% |
Cost of revenue | |
Lease cost | |
Total lease cost | $ 6,301 |
General and administrative expenses | |
Lease cost | |
Total lease cost | $ 1,595 |
Leases - Prior to the Adoption
Leases - Prior to the Adoption of ASC 842 (Details) $ in Millions | 12 Months Ended |
Jan. 02, 2022 USD ($) | |
Leases | |
Rent expenses | $ 3.3 |
Preferred Stock (Details)
Preferred Stock (Details) - $ / shares | Dec. 31, 2023 | Jan. 01, 2023 | Nov. 14, 2021 |
Preferred Stock | |||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock issued | 0 | 0 | |
Preferred stock outstanding | 0 | 0 |
Common Stock (Details)
Common Stock (Details) | 12 Months Ended | |||
Dec. 31, 2023 Vote $ / shares shares | Jan. 01, 2023 $ / shares shares | Nov. 15, 2021 shares | Nov. 14, 2021 $ / shares shares | |
Common stock, shares authorized | 250,000,000 | 250,000,000 | 250,000,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |
Number of votes per common stock | Vote | 1 | |||
Dividends declared | $ / shares | $ 0 | |||
Employee Stock Option | ||||
Common stock reserved for issuance | 161,397 | |||
Employee Stock Purchase Plan | ||||
Common stock reserved for issuance | 1,420,331 | 743,803 | ||
Omnibus Equity Plan | ||||
Common stock reserved for issuance | 1,901,328 | 3,719,000 |
Equity-Based Compensation - Omn
Equity-Based Compensation - Omnibus Equity Plan and ESPP (Details) $ in Millions | 12 Months Ended | |||
Jun. 29, 2023 shares | Apr. 01, 2022 shares | Dec. 31, 2023 USD ($) item shares | Nov. 15, 2021 shares | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Aggregate shares registered | 5,921,056 | |||
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Aggregate shares registered | 384,211 | |||
Additional shares registered | 800,000 | |||
Maximum aggregate number of shares reserved for issuance | 1,420,331 | 743,803 | ||
Percentage of increase in shares reserved for issuance | 1% | |||
Number of purchase period for awards | item | 2 | |||
Purchase period for awards | 6 months | |||
Stock-based compensation expense | $ | $ 0.2 | |||
Percentage of discount from lower of stock price | 15% | |||
Employee Stock Purchase Plan | Tranche 1 | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Offering period for awards | 12 months | |||
Employee Stock Purchase Plan | Tranche 2 | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Offering period for awards | 12 months | |||
Omnibus Equity Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Aggregate shares registered | 1,536,845 | |||
Additional shares registered | 2,000,000 | 3,200,000 | ||
Maximum aggregate number of shares reserved for issuance | 1,901,328 | 3,719,000 | ||
Percentage of increase in shares reserved for issuance | 4% | |||
2023 Bonus Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock-based compensation expense | $ | $ 0.4 | |||
Unrecognized equity based compensation | $ | $ 0.2 | |||
Unrecognized equity-based compensation expected to be recognized period | 3 months 14 days |
Equity-Based Compensation - Ass
Equity-Based Compensation - Assumptions (Details) | 12 Months Ended |
Dec. 31, 2023 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Dividend yield | 0% |
Employee Stock Purchase Plan | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Expected term (in years) | 6 months |
Expected volatility | 93.84% |
Risk-free interest rate | 5.44% |
Weighted average fair value per share of ESPP awards granted | $ 0.60 |
Employee Stock Purchase Plan | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Expected term (in years) | 1 year |
Expected volatility | 99.95% |
Risk-free interest rate | 5.61% |
Weighted average fair value per share of ESPP awards granted | $ 0.98 |
Equity-Based Compensation - 202
Equity-Based Compensation - 2021 Equity Plan (Details) - 2021 Equity Incentive Plan | 12 Months Ended |
Dec. 31, 2023 shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Options expiration period | 10 years |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Maximum aggregate number of shares reserved for issuance | 925,000 |
Equity-Based Compensation - CEO
Equity-Based Compensation - CEO Stock Options and Special Compensation Awards (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2023 USD ($) | Feb. 23, 2023 shares | Mar. 31, 2022 USD ($) | Apr. 30, 2021 $ / shares shares | Dec. 31, 2023 USD ($) item shares | Jan. 01, 2023 USD ($) shares | Jan. 02, 2022 USD ($) shares | Oct. 01, 2023 shares | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Reclassification of liability-classified CEO award to equity-classified awards | $ | $ 2,887 | |||||||
Employee Stock Option | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Stock options grants in period | 0 | 0 | 322,793 | |||||
Options Outstanding, Forfeited | 161,396 | |||||||
Options, Vested and expected to vest | 161,397 | |||||||
Mr. McCreight | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Stock options grants in period | 322,793 | |||||||
Stock option exercise price | $ / shares | $ 11.35 | |||||||
Number of bonus available | item | 2 | |||||||
Value of each bonus available | $ | $ 3,000 | $ 3,000 | ||||||
Equity based compensation | $ | $ 400 | $ 2,300 | ||||||
Equity-based compensation expense (in shares) | 208,914 | 208,914 | ||||||
Accelerated expenses | $ | $ 1,200 | |||||||
Options Outstanding, Forfeited | 161,396 | 161,396 | ||||||
Options, Vested and expected to vest | 161,397 | |||||||
Mr. McCreight | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Post-termination vesting exercise period | 90 days | |||||||
Mr. McCreight | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Value of each bonus available | $ | $ 6,000 | |||||||
Post-termination vesting exercise period | 3 years | |||||||
Mr. McCreight | Service vesting | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Stock options grants in period | 275,133 | |||||||
Mr. McCreight | Service and performance vesting | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Stock options grants in period | 47,660 |
Equity-Based Compensation - Sto
Equity-Based Compensation - Stock Option Activity (Details) - Employee Stock Option [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding | |||
Beginning balance | 322,793 | ||
Granted | 0 | 0 | 322,793 |
Forfeited | (161,396) | ||
Ending balance | 161,397 | 322,793 | |
Options exercisable | 161,397 | ||
Options, Vested and expected to vest | 161,397 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | |||
Weighted-average exercise price per option, beginning balance (in dollars per share) | $ 11.35 | ||
Weighted-average exercise price per option, forfeited (in dollars per share) | (11.35) | ||
Weighted-average exercise price per option, ending balance (in dollars per share) | 11.35 | $ 11.35 | |
Weighted-average exercise price per option, exercisable (in dollars per share) | 11.35 | ||
Weighted-average exercise price per option, vested and expected to vest (in dollars per share) | $ 11.35 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures | |||
Weighted-average remaining contractual life (years) | 7 years 3 months 14 days | 8 years 3 months 14 days | |
Weighted-average remaining contractual life (years), vested and exercisable | 7 years 3 months 14 days | ||
Weighted-average remaining contractual life (years), expected to vest | 7 years 3 months 14 days | ||
Weighted-average grant-date fair value of options granted | $ 16.44 |
Equity-Based Compensation - A_2
Equity-Based Compensation - Assumptions Used to Estimate the Fair Value of Options Granted (Details) | 12 Months Ended |
Dec. 31, 2023 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 0% |
Employee Stock Option [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value of common stock | $ 25.86 |
Expected term (in years) | 6 years 5 months 23 days |
Expected volatility | 50.62% |
Risk-free rate | 1.17% |
Dividend yield | 0% |
Equity-Based Compensation - S_2
Equity-Based Compensation - Stock Options (Details) - Employee Stock Option [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Jan. 01, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized equity-based compensation | $ 0 | |
General and administrative expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity based compensation | $ 1.2 | $ 1.4 |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of Restricted Stock and Restricted Stock Units (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | |||
Income tax benefit recognized related to equity-based compensation expense | $ 1,500,000 | $ 800,000 | $ 0 |
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares | |||
Balance at the beginning of period | 78,303 | ||
Stock vested | (50,294) | ||
Stock forfeited | (4,630) | ||
Balance at the end of period | 23,379 | 78,303 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | |||
Weighted average fair value, beginning | $ 5.38 | ||
Weighted average fair value, vested | 4.47 | ||
Weighted average fair value, forfeited | 4.27 | ||
Weighted average fair value, end | $ 4.54 | $ 5.38 | |
Total fair value | $ 100,000 | ||
Unvested RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares | |||
Balance at the beginning of period | 1,336,674 | ||
Stock granted | 4,303,114 | ||
Stock vested | (1,932,500) | ||
Stock forfeited | (138,882) | ||
Balance at the end of period | 3,568,406 | 1,336,674 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | |||
Weighted average fair value, beginning | $ 8.94 | ||
Weighted average fair value, granted | 2.66 | ||
Weighted average fair value, vested | 5.93 | ||
Weighted average fair value, forfeited | 5.16 | ||
Weighted average fair value, end | $ 3.14 | $ 8.94 | |
Total fair value | $ 4,400,000 | ||
Performance Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares | |||
Stock granted | 1,811,571 | ||
Balance at the end of period | 1,811,571 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | |||
Weighted average fair value, granted | $ 2.65 | ||
Weighted average fair value, end | $ 2.65 |
Equity-Based Compensation - Res
Equity-Based Compensation - Restricted Stock and Restricted Stock Units (Details) $ in Millions | 12 Months Ended | ||||||||
Apr. 30, 2023 shares | Mar. 17, 2023 shares | Mar. 06, 2023 item shares | Mar. 05, 2023 installment shares | Nov. 15, 2021 shares | Dec. 31, 2023 USD ($) installment item shares | Jan. 01, 2023 USD ($) | Jan. 02, 2022 USD ($) | Nov. 11, 2022 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||
Converted from class P units of the Company upon LP liquidation | 1,964,103 | ||||||||
Vested common stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||
Converted from class P units of the Company upon LP liquidation | 1,536,304 | ||||||||
Unvested restricted stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||
Converted from class P units of the Company upon LP liquidation | 427,799 | ||||||||
Equity based compensation | $ | $ 0.7 | $ 2.6 | |||||||
Unrecognized equity based compensation | $ | $ 0.4 | ||||||||
Unrecognized equity-based compensation expected to be recognized period | 9 months 29 days | ||||||||
Unvested RSUs | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||
Stock granted | 4,303,114 | ||||||||
Equity based compensation | $ | $ 12.4 | $ 8.8 | |||||||
Unrecognized equity-based compensation expense | $ | $ 8.9 | ||||||||
Unrecognized equity-based compensation expected to be recognized period | 2 years 5 months 4 days | ||||||||
Unvested RSUs | Executives and Employees | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||
Stock granted | 3,032,824 | ||||||||
Vesting period | 3 years | ||||||||
Unvested RSUs | Directors | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||
Stock granted | 1,270,290 | ||||||||
Unvested RSUs | Crystal Landsem | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||
Stock granted | 1,811,572 | ||||||||
Unvested RSUs | Tiffany Smith | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||
Number of grants | item | 2 | ||||||||
Stock granted | 43,063 | 118,025 | 161,088 | ||||||
Vest installments | installment | 3 | ||||||||
Unvested RSUs | Mr. McCreight | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||
Number of grants | item | 2 | ||||||||
Stock granted | 223,704 | 613,116 | 836,820 | 25,873 | 1,811,572 | ||||
Stock grant issuable | $ | $ 2 | ||||||||
Vest installments | installment | 12 | ||||||||
Performance Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||
Stock granted | 1,811,571 | ||||||||
Equity based compensation | $ | $ 2.1 | ||||||||
Unrecognized equity-based compensation expense | $ | $ 2.6 | ||||||||
Unrecognized equity-based compensation expected to be recognized period | 2 years 2 months 4 days | ||||||||
Performance Stock Units | Crystal Landsem | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||
Stock granted | 1,811,571 | ||||||||
Number of equal annual installments | installment | 3 | ||||||||
Annual installment value | 603,857 |
Equity-Based Compensation - Cla
Equity-Based Compensation - Class P Units (Details) - Class P Units $ in Millions | 12 Months Ended |
Jan. 02, 2022 USD ($) employee shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Units outstanding | 384,522 |
Equity based compensation | $ | $ 1.9 |
Accelerate vesting shares | 763,178 |
Number of senior executives, shares accelerated vesting | employee | 2 |
Required service period after completion of IPO | 12 months |
Equity-Based Compensation - C_2
Equity-Based Compensation - Class P Distributions (Details) $ in Millions | 12 Months Ended |
Jan. 01, 2023 USD ($) | |
Distribution Class P Awards | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Equity-based compensation expense | $ 0.6 |
Income Taxes - Components of th
Income Taxes - Components of the Income Tax (Provision) Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | |
Current: | |||
Federal | $ 401 | $ 2,325 | $ 5,919 |
State | 464 | 64 | 1,956 |
Total current provision (benefit) | 865 | 2,389 | 7,875 |
Deferred: | |||
Federal | (2,204) | 1,263 | (1,341) |
State | (337) | 395 | (322) |
Total deferred provision (benefit) | (2,541) | 1,658 | (1,663) |
Income tax provision (benefit) | $ (1,676) | $ 4,047 | $ 6,212 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the Statutory Federal Rate (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | |
Reconciliation of the statutory federal rate to the Company's effective tax rate: | |||
Federal statutory rate | 21% | 21% | 21% |
State income taxes, net of federal tax benefit | (0.40%) | 0.90% | 16.30% |
Non-deductible equity-based compensation expense | (9.10%) | 13.50% | 22% |
Non-deductible officer compensation | (3.00%) | 24.20% | 14% |
Change in uncertain tax position | (0.30%) | 3.90% | (0.90%) |
Prior year adjustments | (1.00%) | 2.30% | |
Federal 2018 amended return | (10.20%) | ||
Other | (0.20%) | (0.40%) | 0.50% |
Effective tax rate | 8% | 51.90% | 75.20% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jan. 01, 2023 |
Deferred tax assets: | ||
Accruals and allowances | $ 1,603 | $ 1,928 |
Interest disallowance | 1,915 | 1,910 |
Inventory capitalization and other adjustments | 1,769 | 1,405 |
Deferred revenue | 2,196 | 1,475 |
Equity-based compensation | 1,165 | 698 |
Net operating losses and tax credit carryforwards | 592 | 148 |
R&D capitalization | 3,189 | 1,113 |
Lease liabilities | 7,570 | 8,319 |
Other | 108 | 166 |
Gross deferred tax assets | 20,107 | 17,162 |
Deferred tax liabilities: | ||
Depreciation and amortization | (9,114) | (7,825) |
Lease right-of-use asset | (7,191) | (8,074) |
Gross deferred tax liabilities | (16,305) | (15,899) |
Net deferred tax assets | $ 3,802 | $ 1,263 |
Income Taxes - Carryforwards (D
Income Taxes - Carryforwards (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jan. 01, 2023 |
Operating Loss Carryforwards [Line Items] | ||
Federal disallowed interest expense carryforward | $ 8,300 | |
Net deferred tax assets | 3,802 | $ 1,263 |
Deferred tax assets, operating loss carryforwards | 600 | |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
State net operating loss carryforward amount | 1,900 | |
State | ||
Operating Loss Carryforwards [Line Items] | ||
State net operating loss carryforward amount | $ 2,800 |
Related Party Transactions (Det
Related Party Transactions (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Nov. 15, 2021 USD ($) $ / shares shares | Nov. 14, 2021 shares | Dec. 31, 2023 USD ($) item | Jan. 01, 2023 USD ($) | Jan. 02, 2022 USD ($) $ / shares | |
Related Party Transactions | |||||
Shareholders with ownership interest greater than 10% | item | 3 | ||||
Accounts payable | $ 8,900 | $ 5,320 | |||
Aggregate ownership interest | 10% | ||||
Rental expense | $ 0 | ||||
IPO | |||||
Related Party Transactions | |||||
Stock issuance (in shares) | shares | 5,750,000 | ||||
Share price | $ / shares | $ 16 | ||||
Stock-based compensation expense | $ 3,500 | ||||
LP | |||||
Related Party Transactions | |||||
Stock-based compensation expense | $ 4,500 | ||||
LP | Pre Vesting Distribution Class P Awards | Accrued expense and other current liabilities | |||||
Related Party Transactions | |||||
Accrued liabilities, related party | 2,600 | ||||
LP | Pre Vesting Distribution Class P Awards | General and administrative expenses | |||||
Related Party Transactions | |||||
Cumulative catch up to equity based compensation | $ 2,600 | ||||
Entities related to current employees, board members and service providers | Series B-1 Redeemable Preferred Stock | |||||
Related Party Transactions | |||||
Fair value per share | $ / shares | $ 2.02 | ||||
Consideration per share | $ / shares | $ 1 | ||||
Stock-based compensation expense | $ 1,500 | ||||
HIG | Management and consulting fees | |||||
Related Party Transactions | |||||
Expenses from transactions with related party | 400 | ||||
Other related parties | Management and consulting fees | |||||
Related Party Transactions | |||||
Expenses from transactions with related party | 300 | ||||
Related Party | |||||
Related Party Transactions | |||||
Rental expense | $ 100 | $ 100 | |||
LP | |||||
Related Party Transactions | |||||
Stock issuance (in shares) | shares | 215,702 | 215,702 |
Defined Contribution Plans (Det
Defined Contribution Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | |
Defined Contribution Plans | |||
Minimum employment period | 3 months | ||
Minimum age | 18 years | ||
Employer matching contribution, percent of match | 100% | ||
Employer matching contribution, percent of employees' gross pay | 6% | ||
Percentage of maximum annual contributions per employee | 4% | ||
Matching contributions made by company | $ 1.1 | $ 1 | $ 0.9 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ (19,334) | $ 3,725 | $ 2,045 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |