Cover
Cover - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 28, 2022 | Oct. 08, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-40860 | ||
Entity Registrant Name | Olaplex Holdings Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 87-1242679 | ||
City Area Code | 310 | ||
Local Phone Number | 691-0776 | ||
Title of 12(b) Security | Common stock, par value $0.001 per share | ||
Trading Symbol | OLPX | ||
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 | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 16.5 | ||
Entity Common Stock, Shares Outstanding | 648,794,041 | ||
Entity Central Index Key | 0001868726 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Definitive Proxy Statement relating to its 2022 Annual Meeting of stockholders, to be filed with the Securities and Exchange Commission within 120 days after registrant’s fiscal year end of December 31, 2021, are incorporated by reference into Part III of this Annual Report. |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | Deloitte & Touche LLP |
Auditor Location | Los Angeles, California |
Auditor Firm ID | 34 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 186,388 | $ 10,964 |
Accounts receivable, net of allowances of $8,231 and $1,362 | 40,779 | 14,377 |
Inventory | 98,399 | 33,596 |
Other current assets | 9,621 | 2,422 |
Total current assets | 335,187 | 61,359 |
Property and equipment, net | 747 | 34 |
Intangible assets, net | 1,043,344 | 1,092,310 |
Goodwill | 168,300 | 168,300 |
Deferred taxes | 8,344 | 10,830 |
Other assets | 4,500 | 0 |
Total assets | 1,560,422 | 1,332,833 |
Current Liabilities: | ||
Accounts payable | 19,167 | 16,815 |
Accrued expenses and other current liabilities | 29,476 | 9,862 |
Current portion of long-term debt | 20,112 | 20,112 |
Current portion of Related Party payable pursuant to Tax Receivable Agreement | 4,157 | 0 |
Total current liabilities | 72,912 | 46,789 |
Related Party payable pursuant to Tax Receivable Agreement | 225,122 | 0 |
Long-term debt | 738,090 | 755,371 |
Total liabilities | 1,036,124 | 802,160 |
Contingencies (Note 14) | ||
Stockholders’ equity (Notes 1 and 12): | ||
Common stock, $0.001 par value per share; 2,000,000,000 shares authorized, 648,794,041 and 647,888,387 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | 648 | 648 |
Preferred stock, $0.001 par value per share; 25,000,000 shares authorized and no shares issued and outstanding | 0 | 0 |
Additional paid-in capital | 302,866 | 530,025 |
Retained earnings | 220,784 | 0 |
Total stockholders’ equity | 524,298 | 530,673 |
Total liabilities and stockholders’ equity | $ 1,560,422 | $ 1,332,833 |
CONSOLIDATED BALANCE SHEETS - P
CONSOLIDATED BALANCE SHEETS - Parenthetical - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for credit losses | $ 8,231 | $ 1,362 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares, issued (shares) | 648,794,041 | 647,888,387 |
Common stock, shares, outstanding (shares) | 648,794,041 | 647,888,387 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||||||||
Net sales | $ 166,498 | $ 161,624 | $ 152,124 | $ 118,119 | $ 93,195 | $ 89,447 | $ 55,260 | $ 44,348 | $ 598,365 | $ 282,250 |
Cost of sales: | ||||||||||
Cost of product (excluding amortization) | 32,695 | 32,462 | 29,324 | 22,073 | 17,375 | 24,569 | 21,186 | 33,481 | 116,554 | 96,611 |
Amortization of patented formulations | 1,590 | 1,680 | 2,268 | 2,451 | 1,485 | 2,102 | 1,658 | 807 | 7,989 | 6,052 |
Total cost of sales | 34,285 | 34,142 | 31,592 | 24,524 | 18,860 | 26,671 | 22,844 | 34,288 | 124,543 | 102,663 |
Gross profit | 132,213 | 127,482 | 120,532 | 93,595 | 74,335 | 62,776 | 32,416 | 10,060 | 473,822 | 179,587 |
Operating expenses: | ||||||||||
Selling, general, and administrative | 23,555 | 30,257 | 33,786 | 11,280 | 13,879 | 8,215 | 9,621 | 5,455 | 98,878 | 37,170 |
Amortization of other intangibles | 10,243 | 10,182 | 10,183 | 10,182 | 10,182 | 10,182 | 10,182 | 9,279 | 40,790 | 39,825 |
Acquisition costs | 0 | 0 | 0 | 0 | 0 | 488 | 0 | 16,011 | 0 | 16,499 |
Total operating expenses | 33,798 | 40,439 | 43,969 | 21,462 | 24,061 | 18,885 | 19,803 | 30,745 | 139,668 | 93,494 |
Operating income | 98,415 | 87,043 | 76,563 | 72,133 | 50,274 | 43,891 | 12,613 | (20,685) | 334,154 | 86,093 |
Interest expense | (15,096) | (14,987) | (15,563) | (15,502) | (10,068) | (9,794) | (10,072) | (8,711) | (61,148) | (38,645) |
Other income (expense), net | ||||||||||
Tax receivable agreement liability adjustment | 3,615 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 3,615 | 0 |
Other expense, net | (595) | (213) | (157) | (47) | (35) | (29) | (93) | (33) | (1,012) | (190) |
Other income (expense), net | 3,020 | (213) | (157) | (47) | (35) | (29) | (93) | (33) | 2,603 | (190) |
Income before provision for income taxes | 86,339 | 71,843 | 60,843 | 56,584 | 40,171 | 34,068 | 2,448 | (29,429) | 275,609 | 47,258 |
Income tax provision | 17,028 | 15,252 | 11,492 | 11,053 | 6,783 | 5,753 | 413 | (4,969) | 54,825 | 7,980 |
Net income | 69,311 | 56,591 | 49,351 | 45,531 | 33,388 | 28,315 | 2,035 | (24,460) | 220,784 | 39,278 |
Comprehensive income | $ 69,311 | $ 56,591 | $ 49,351 | $ 45,531 | $ 33,388 | $ 28,315 | $ 2,035 | $ (24,460) | $ 220,784 | $ 39,278 |
Net income per share: | ||||||||||
Net income (loss) per share: Basic (in usd per share) | $ 0.11 | $ 0.09 | $ 0.08 | $ 0.07 | $ 0.05 | $ 0.04 | $ 0 | $ (0.04) | $ 0.34 | $ 0.06 |
Net income (loss) per share: Diluted (in usd per share) | $ 0.10 | $ 0.08 | $ 0.08 | $ 0.07 | $ 0.05 | $ 0.04 | $ 0 | $ (0.04) | $ 0.32 | $ 0.06 |
Weighted average common shares outstanding: | ||||||||||
Weighted average common shares outstanding: Basic (in shares) | 648,422,232 | 648,124,642 | 648,124,642 | 647,994,569 | 647,888,387 | 647,888,387 | 647,775,891 | 597,212,079 | 648,166,472 | 635,386,219 |
Weighted average common shares outstanding: Diluted (in shares) | 692,863,933 | 690,711,782 | 656,745,557 | 656,268,316 | 655,736,276 | 653,036,893 | 647,775,891 | 597,212,079 | 689,923,792 | 636,819,975 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid in Capital | Retained Earnings |
Beginning balance, shares outstanding at Dec. 31, 2019 | ||||
Beginning balance at Dec. 31, 2019 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock (in shares) | 647,888,387 | |||
Issuance of common stock | 959,868 | $ 648 | 959,220 | |
Net income | 39,278 | 39,278 | ||
Share-based compensation expense | 1,527 | 1,527 | ||
Dividend payments | (470,000) | (430,722) | (39,278) | |
Ending balance, shares outstanding at Dec. 31, 2020 | 647,888,387 | |||
Ending balance at Dec. 31, 2020 | 530,673 | $ 648 | 530,025 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock (in shares) | 236,255 | |||
Issuance of common stock | 633 | 633 | ||
Net income | 220,784 | 220,784 | ||
Tax receivable agreement | (232,893) | (232,893) | ||
Share-based compensation expense | 3,963 | 3,963 | ||
Exercise of stock options (in shares) | 669,399 | |||
Exercise of stock options | 1,138 | $ 0 | 1,138 | |
Ending balance, shares outstanding at Dec. 31, 2021 | 648,794,041 | |||
Ending balance at Dec. 31, 2021 | $ 524,298 | $ 648 | $ 302,866 | $ 220,784 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 220,784 | $ 39,278 |
Adjustments to reconcile net income to net cash from operations provided by operating activities: | ||
Amortization of patented formulations | 7,989 | 6,052 |
Amortization of other intangibles | 40,790 | 39,825 |
Depreciation of fixed assets | 162 | 0 |
Amortization of fair value of acquired inventory | 0 | 44,721 |
Amortization of debt issuance costs | 2,830 | 1,752 |
Deferred taxes | 2,486 | (4,428) |
Tax receivable agreement liability adjustment | (3,615) | 0 |
Share-based compensation expense | 3,963 | 1,527 |
Changes in operating assets and liabilities, net of effects of acquisition: | ||
Accounts receivable, net | (26,402) | (7,118) |
Inventory | (63,724) | (14,242) |
Other current assets | (7,199) | (2,094) |
Accounts payable | 2,352 | 14,865 |
Accrued expenses and other current liabilities | 19,613 | 8,837 |
Net cash provided by operating activities | 200,029 | 128,975 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (875) | (27) |
Purchase of investment in nonconsolidated entity | (4,500) | 0 |
Business acquisition, net of acquired cash | 0 | (1,381,582) |
Purchase of software | (890) | 0 |
Net cash used in investing activities | (6,265) | (1,381,609) |
Cash flows from financing activities: | ||
Dividend / distribution payments | 0 | (470,000) |
Proceeds from the issuance of stock | 633 | 959,868 |
Proceeds from exercise of stock options | 1,138 | 0 |
Proceeds from Revolver | 0 | 50,000 |
Principal payments of Term Loan | (20,111) | (10,653) |
Payments of Revolver | 0 | (50,000) |
Proceeds from the issuance of Term Loan | 0 | 800,000 |
Payments of debt issuance costs | 0 | (15,617) |
Net cash (used in) provided by financing activities | (18,340) | 1,263,598 |
Net increase in cash and cash equivalents | 175,424 | 10,964 |
Cash and cash equivalents - beginning of period | 10,964 | 0 |
Cash and cash equivalents - end of period | 186,388 | 10,964 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 33,812 | 9,914 |
Cash paid during the year for interest | 58,316 | 34,566 |
Supplemental disclosure of noncash activities: | ||
Public offering and strategic transition costs included in accounts payable and accrued expenses | 243 | 0 |
Increase in Related Party payable pursuant to Tax Receivable Agreement | $ 232,893 | $ 0 |
NATURE OF OPERATIONS AND BASIS
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | NATURE OF OPERATIONS AND BASIS OF PRESENTATION Olaplex Holdings, Inc. (“Olaplex Holdings” together with its subsidiaries, the “Company” or “we”) is a Delaware corporation that was incorporated on June 8, 2021 for the purpose of facilitating an initial public offering and to enter into other related Reorganization Transactions, as described below, in order to carry on the business of Penelope Holdings Corp., (“Penelope”) together with its subsidiaries. Olaplex Holdings is organized as a holding company and operates indirectly through its wholly owned subsidiaries, Penelope and Olaplex, Inc., which conducts business under the name “Olaplex”. Olaplex is an innovative, science-enabled, technology-driven beauty company that is focused on delivering its patent-protected premium hair care products to professional hair salons, retailers and everyday consumers. Olaplex develops, manufactures and distributes a suite of haircare products strategically developed to address three key uses: treatment, maintenance and protection. On January 8, 2020 (the “Acquisition Date”), a group of third-party investors, through Penelope, acquired 100% of the Olaplex LLC business, including the intellectual property operations of another affiliated business, LIQWD, Inc. (the “Olaplex business”) from the owners of the Olaplex business (the “Sellers”) for $1,381,582 (the “Acquisition”). Subsequent to the Acquisition Date, all of the operations of Olaplex are comprised of the operations of Olaplex, Inc. In these financial statements, the term “Olaplex” is used to refer to either the operations of the business prior or after the Acquisition and prior to and after the initial public offering and Reorganization Transactions as discussed below, depending on the respective period discussed. COVID-19 — On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. The global spread and unprecedented impact of COVID-19 continues to create significant volatility, uncertainty and economic disruption. The Company’s operations and its financial results including net sales, gross profit, and selling, general, and administrative expenses were impacted by COVID-19 in 2020 and 2021, however the Company is unable to estimate the impact of COVID-19 on its operations. The extent of COVID-19’s effect on the Company’s operational and financial performance will depend on future developments, including the ultimate duration, spread and intensity of the pandemic (including any resurgences), impact of the new COVID-19 variants and the rollout of COVID-19 vaccines, and the level of social and economic restrictions imposed in the United States and abroad in an effort to curb the spread of the virus, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. As a result, it is not currently possible to ascertain the overall impact of the COVID-19 pandemic on the Company’s business, results of operations, financial condition or liquidity. Future events and effects related to COVID-19 cannot be determined with precision and actual results could differ from estimates or forecasts. Initial Public Offering On October 4, 2021, Olaplex Holdings completed an initial public offering of 73,700,000 shares of its common stock (the “IPO”). All shares sold in the IPO were sold by certain existing stockholders of Olaplex Holdings at a public offering price of $21 per share. The selling stockholders received net proceeds of approximately $1,466,446, after deducting underwriting discounts and commissions. On October 8, 2021, the selling stockholders sold 11,055,000 additional shares of common stock pursuant to the full exercise by the underwriters of the IPO of their option to purchase additional shares at the initial public offering price of $21 per share. The selling shareholders received net proceeds of approximately $219,967, after deducting underwriting discounts and commissions, for the sale of these additional shares. The Company did not receive any proceeds from the IPO. Reorganization Transactions Prior to the IPO, Penelope Group Holdings, L.P. was the direct parent of Penelope, which is the indirect parent of Olaplex, Inc., the Company’s primary operating subsidiary. In connection with the IPO, the Company completed the following transactions (collectively the “Reorganization Transactions”): • The limited partners of Penelope Group Holdings, L.P. including Advent International GPE IX, LP (“Fund IX”), who also held 100% of the equity interest in Penelope Group Holdings GP II, LLC (“Penelope Group Holdings GP II”), the general partner of Penelope Group Holdings, L.P., contributed 100% of their respective economic equity interests in Penelope Group Holdings, L.P. and Fund IX further contributed 100% of the equity interests in Penelope Group Holdings GP II to Olaplex Holdings in exchange for: ◦ an aggregate of 648,124,642 shares of common stock of Olaplex Holdings; and ◦ certain rights to payments under the Tax Receivable Agreement (as defined below); • outstanding options to purchase shares of common stock of Penelope and outstanding cash-settled units of Penelope were converted into options to purchase shares of Olaplex Holdings and cash-settled units of Olaplex Holdings as follows: ◦ outstanding vested time-based options to purchase shares of common stock of Penelope were converted into vested options to purchase an aggregate of 2,929,500 shares of common stock of Olaplex Holdings, with a corresponding adjustment to the exercise price that preserved the option’s spread value; ◦ outstanding unvested time-based options to purchase shares of common stock of Penelope were converted into time-based options to purchase an aggregate of 14,314,725 shares of common stock of Olaplex Holdings, with a corresponding adjustment to the exercise price that preserves the options’ spread value and the same time-based vesting schedule that applied to the options prior to the conversion; ◦ outstanding performance-based options to purchase shares of common stock of Penelope were converted into (i) vested options to purchase an aggregate of 4,315,275 shares of common stock of Olaplex Holdings, with a corresponding adjustment to the exercise price that preserved the options’ spread value, and (ii) time-based options to purchase an aggregate of 25,363,800 shares of common stock of Olaplex Holdings, with a corresponding adjustment to the exercise price that preserves the options’ spread value, that will be eligible to vest in equal installments on each of the first three anniversaries of the IPO ; ◦ outstanding time-based cash-settled units of Penelope were converted into an aggregate of 621,000 time-based cash-settled units of Olaplex Holdings, with a corresponding adjustment to the base price per unit that preserves the units’ spread value and the same time-based vesting schedule that applied to the unit prior to the conversion; and ◦ outstanding performance-based cash-settled units of Penelope were converted into (i) an aggregate of 318,600 time-based cash-settled units of Olaplex Holdings, with a corresponding adjustment to the base price per unit that preserves the units’ spread value, that will be eligible to vest in equal installments on each of the first three anniversaries of the IPO, subject to (A) the unit holder’s continued service through the applicable vesting date and (B) the weighted average closing price per share of Olaplex Holdings’ common stock over the thirty consecutive trading days ending on the day immediately prior to the applicable vesting date equaling or exceeding $21 per share on each applicable vesting date , and (ii) an aggregate of 159,300 vested cash-settled units of Olaplex Holdings with a corresponding adjustment to the base price per unit that preserves the units’ spread value; • The Company entered into an income tax receivable agreement (“the Tax Receivable Agreement”) under which the Company is required to pay to the former limited partners of Penelope Group Holdings, L.P. and holders of options to purchase shares of common stock of Penelope (collectively the “Pre-IPO Stockholders”) that were vested prior to the Reorganization Transactions, 85% of the cash savings, if any, in U.S. federal, state or local tax that the Company actually realizes on its taxable income following the IPO as specified in the Tax Receivable Agreement. • Olaplex Holdings and Olaplex Intermediate, Inc., which had received a portion of the equity interests of Penelope Group Holdings, L.P. from Olaplex Holdings, contributed 100% of the equity interests of Penelope Group Holdings, L.P. and 100% of the equity interests of Penelope Group Holdings GP II to Olaplex Intermediate II, Inc., a direct subsidiary of Olaplex Intermediate Inc.; and • Penelope Group Holdings, L.P. and Penelope Group Holdings GP II merged with and into Olaplex Intermediate II, Inc. with Olaplex Intermediate II, Inc. surviving each merger. Basis of Presentation The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP” or “U.S. GAAP”) with all intercompany balances and transactions eliminated. Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). The financial statements for prior periods give effect to the Reorganization Transactions discussed above, including the exchange of all 960,184 units of Penelope Group Holdings, L.P. for an aggregate of 648,124,642 shares of common stock of Olaplex Holdings, Inc., which is equivalent to an overall exchange ratio of one-for-675, and the conversion of options and cash-settled units of Penelope into options and cash-settled units of Olaplex Holdings at a conversion rate of one-for-675, with a corresponding adjustment to the exercise price and base price, respectively, as discussed above and in Note 11. All share and earnings per share amounts presented herein have been retroactively adjusted to give effect to the Reorganization Transactions as if they occurred in all prior periods presented. For the periods prior to the Reorganization Transactions, Penelope and its subsidiaries, including Olaplex, Inc., are consolidated in the consolidated financial statements of the Company. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Combination The 2021 and 2020 consolidated financial statements cover Olaplex, Inc. and its wholly owned subsidiary, Olaplex UK Limited, a private limited company incorporated in England and Wales. The accompanying 2021 and 2020 consolidated financial statements reflect the financial position, results of operations and comprehensive income, and cash flows of the Company and its wholly owned subsidiary on a consolidated basis. All intercompany account balances and transactions have been eliminated. Estimates and Assumptions Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Examples of estimates and assumptions include: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, variable consideration, and other obligations such as product returns and refunds; loss contingencies; the fair value of share-based options and cash-settled units; the fair value of and/or potential impairment of goodwill and intangible assets for our reporting unit; useful lives of our tangible and intangible assets; allowance for promotions; estimated income tax and tax receivable payments; the net realizable value of, and demand for our inventory. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. The Company maintains cash balances at several high credit quality financial institutions. Accounts at these institutions are secured by the Federal Deposit Insurance Corporation (the “FDIC”). At times, such cash balances may be in excess of the $250 FDIC insurance limit. As of December 31, 2021 and December 31, 2020, the Company has cash equivalents of $186,388 and $10,964, respectively. The Company has not experienced any losses in such account s. Accounts Receivable – net Accounts receivable are recorded at net realizable value. The Company has recorded an allowance for reductions to prices for agreed-upon deductions, including allowances for advertising, damages, promotions, and returns. As of both December 31, 2021 and December 31, 2020, this promotional allowance was $8,231 and $1,362 respectively. As of December 31, 2021 and December 31, 2020, the Company did not have an allowance for doubtful accounts. In arriving at this conclusion, the Company evaluated historical losses, age of receivables, adverse situations that may affect a customer’s ability to repay and prevailing economic conditions. The Company has generally not experienced difficulties collecting from customers in a timely manner. Inventory Inventory includes inventory that is saleable or usable in future periods and is stated at the lower of cost or net realizable value using the average cost method. Cost components include raw materials and finished goods. The finished goods are produced at third-party contract manufacturers. The Company allocates the amortized cost of its patented formulation to finished goods inventory. Management estimates an allowance for excess and obsolete inventory based on a calculation of excess on hand quantities of slow-moving inventory. As of December 31, 2021 and December 31, 2020, there was no allowance for excess and obsolete inventory. Business Combinations Business combinations are accounted for under the acquisition method of accounting in accordance with FASB ASC 805, Business Combinations. Under the acquisition method of accounting, the total consideration transferred in connection with the acquisition is allocated to the tangible and intangible assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree based on their fair values. Goodwill acquired in connection with business combinations represents the excess of consideration transferred over the net tangible and identifiable intangible assets acquired. The acquired goodwill is deductible for income tax purposes. Certain assumptions and estimates are employed in evaluating the fair value of assets acquired and liabilities assumed. These estimates may be affected by factors such as changing market conditions, or changes in regulations governing the industry. The most significant assumptions requiring judgment involve identifying and estimating the fair value of intangible assets and the associated useful lives for establishing amortization periods. To finalize purchase accounting for significant acquisitions, the Company utilizes the services of independent valuation specialists to assist in the determination of the fair value of acquired tangible and intangible assets. The purchase price allocations for business combinations completed are prepared on a preliminary basis and changes to those allocations may occur as additional information becomes available about facts and circumstances that existed as of the acquisition date during the respective measurement period (up to one year from the respective acquisition date). Changes in the fair value of assets and liabilities recognized at fair value on the acquisition date that result from events that occur after the acquisition date are re-measured to fair value at future reporting dates with changes recognized in earnings. The Company includes the results of operations of the businesses acquired as of the acquisition dates. Costs that are incurred to complete the business combination such as legal and other professional fees are not considered part of consideration transferred and are charged to operating expenses as they are incurred. Goodwill and Intangible Assets Goodwill is calculated as the excess of the purchase consideration paid in the acquisition of a business over the fair value of the identifiable assets acquired and liabilities assumed. Goodwill is reviewed annually at the beginning of the fourth quarter for impairment, at the reporting unit level, or when there is evidence that events or changes in circumstances indicate that the Company’s carrying amount may not be recovered. A reporting unit is an operating segment or a component of an operating segment. When testing goodwill for impairment, the Company first assesses qualitative factors to evaluate whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount. If factors indicate that the fair value of the asset is less than its carrying amount, the Company will perform a quantitative test by determining the fair value of the reporting unit. The estimated fair value of the reporting unit is based on a projected discounted cash flow model that includes significant assumptions and estimates, including discount rate, growth rate, and future financial performance. Valuations of similar public companies may also be evaluated when assessing the fair value of the reporting unit. If the carrying value of the reporting unit exceeds the fair value, then an impairment loss is recognized for the difference. The Company manages its business on the basis of three operating segments that are aggregated into one reportable segment given the operating segments have similar economic characteristics, classes of consumers, products, production, distribution methods, and operate in the same regulatory environments. The reportable segment is used for the purposes of impairment testing. Definite-lived intangible assets are amortized over their estimated useful lives, which represents the period over which the Company expects to realize economic value from the acquired assets, using the economic consumption method if anticipated future net sales can be reasonably estimated. The straight-line method is used when future net sales cannot be reasonably estimated. The following provides a summary of the estimated useful lives by category of asset. Brand name 25 years Customer relationships 20 years Patented formulations 15 years Software 3 years Impairment of Long-Lived Assets The Company reviews long-lived tangible and intangible assets with definite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Examples of such events include a significant disposal of a portion of such assets, an adverse change in the market involving the business employing the related asset, a significant decrease in the benefits realized from an acquired business, difficulties or delays in integrating the business, and a significant change in the operations of an acquired business. Recoverability of these assets is measured by comparison of their carrying amount to the future undiscounted cash flows the assets are expected to generate. Assets are grouped and evaluated at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of impairment. If the carrying amount of the asset exceeds expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value, generally measured by discounting expected future cash flows at the rate it utilizes to evaluate potential investments. No tangible and intangible asset impairment was recorded for fiscal years ended December 31, 2021 and December 31, 2020. Fair value measurements are based on significant inputs that are not observable in the market and therefore represent a Level 3 measurement. Significant changes in the underlying assumptions used to value long-lived assets could significantly increase or decrease the fair value estimates used for impairment assessments. Debt Issuance Costs Original issue discount costs and third-party issue costs incurred in connection with the issuance of long-term debt are deferred and amortized over the life of the associated debt instrument on a straight-line basis, in a manner that approximates the effective interest method. To the extent that the debt is outstanding, these amounts are reflected in the consolidated balance sheets as direct deductions from the long-term debt. As of December 31, 2021 and December 31, 2020, the Company had $11,033 and $13,864 of unamortized deferred financing costs related to its credit facilities. Property and Equipment Property and equipment are stated at historical cost net of accumulated depreciation. The cost of assets sold or retired, and the related accumulated depreciation, are removed from the accounts at the time of disposition, and any resulting gain or loss is reflected in operating results for the period. Estimated useful lives of the Company’s assets are as follows: Molds 3-5 years Motor Vehicles 5 years Furniture and fixtures 3-7 years Deferred Revenue Amounts received from international customers in the form of cash pre-payments to purchase goods are recorded as deferred revenue for contract liabilities until the goods are shipped. Unredeemed gift cards are recorded as deferred revenue. Deferred revenue balance was $5,022 and $2,314 as of December 31, 2021 and December 31, 2020, respectively ( see Note 8 to the consolidated financial statements). Customer pre-payments and gift cards are included as accrued expenses and other current liabilities. Deferred revenue is included as accrued expenses and other current liabilities on the accompanying Consolidated Balance Sheets Foreign Currency Transactions Assets and liabilities denominated in foreign currencies are converted to the functional currency at the applicable current rates, including the Company’s subsidiary, Olaplex UK, whose functional currency is in US dollars. All revenues and expenses associated with foreign currencies are converted at the rates of exchange prevailing when such transactions occur. The resulting exchange loss or gain is reflected in foreign currency exchange loss or gain recorded in other expense, net in the accompanying statements of operations and comprehensive loss. Foreign exchange losses were ($1,027) and ($129) for the years ended December 31, 2021 and December 31, 2020, respectively. Activity for comprehensive income is not applicable for periods presented. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements established a framework for measuring fair value and established a three-level valuation hierarchy for disclosure of fair value measurements as follows: Level 1 —Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. The Company’s Level 1 assets consist of its marketable securities. Level 2 —Observable quoted prices for similar assets or liabilities in active markets and observable quoted prices for identical assets or liabilities in markets that are not active. Level 3 —Unobservable inputs that are not corroborated by market data. Cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are reflected at carrying value, which approximates fair value due to the short-term maturity. The Company’s long-term debt is recorded at its carrying value in the consolidated balance sheets, which may differ from fair value. The gross carrying amount of the Company’s long-term debt, before reduction of the debt issuance costs, approximates its fair values as the stated rate approximates market rates for loans with similar terms as of December 31, 2021 and December 31, 2020. Offering Costs During the third quarter of 2021, the Company completed the IPO. For the year ended December 31, 2021, the Company expensed offering and related strategic transition costs of $8,488, in the statement of operations and comprehensive income under selling, general and administrative expenses. Segment Reporting Operating segments are components of an enterprise for which separate financial information is available that is evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Utilizing this criteria, the Company manages its business on the basis of three operating segments that are aggregated into one reportable segment given the operating segments have similar economic characteristics, classes of consumers, products, production, distribution methods, and operate in similar regulatory environments. Revenue Recognition The Company derives its revenue through the sale of its specialty hair care products. The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, which provides a five-step model for recognizing revenue from contracts with customers as follows: • Identify the contract with a customer • Identify the performance obligations in the contract • Determine the transaction price • Allocate the transaction price to the performance obligations in the contract • Recognize revenue when or as performance obligations are satisfied The Company recognizes revenue in the amount that reflects the consideration that the Company expects that it will be entitled to in exchange for transferring goods to its customers. Net sales are comprised of the transaction price from sales of products less expected allowances, including allowances for advertising, damages, promotions, discounts, and return rights. These provisions are estimated based on agreed-upon terms and the Company’s historical experience and are recorded as a reduction to sales and accounts receivable in the same period the related sales are recorded. The Company experienced immaterial returns during the years ended December 31, 2021 and December 31, 2020. Revenue is recognized when performance obligations are satisfied through the transfer of control of promised goods to the customers based on the terms of sale. The transfer of control typically occurs at a point in time based on consideration of when the customer has an obligation to pay for the goods, and physical possession of, legal title to, and the risks and rewards of ownership of the goods has been transferred to the customer. Generally, revenue from sales of merchandise to customers are recognized at a point in time, based on customer agreements and is recorded in the period the product is shipped or delivered in accordance with the shipping terms. For the Company’s Olaplex.com website transactions, revenue is recognized upon delivery to customers. The Company’s professional and retail distributors consist of local and international customers. Payments from international customers are due in advance. The Company records deferred revenue for contract liabilities from contracts with customers in which the customer prepays for the order. US-based customers billings are invoiced and typically due within days set per the internal policy. The Company has elected to account for shipping and handling as fulfillment activities and not as a separate performance obligation. As of December 31, 2021 and December 31, 2020, other than accounts receivable, the Company has no material contract assets. The Company has contract liabilities of $5,022 consisting of customer transit orders, deposits, and unredeemed gift cards with opening contract liabilities of $2,314 recognized as net sales in 2021. The Company has contract liabilities of $2,314 consisting of customer transit orders, deposits, and unredeemed gift cards with opening contract liabilities of $1,181 recognized as net sales in 2020. Sales tax, when applicable, that is collected in connection with revenue transactions is withheld and remitted to the respective taxing authorities. Shipping and fulfillment costs charged to customers are included as revenue in total net sales. Shipping costs incurred by the Company to ship between third-party manufacturers and warehouses are capitalized to inventory and included in cost of sales. Shipping and fulfillment costs incurred by the Company to ship to customers are included in selling, general, and administrative expenses. The Company elected to record revenue net of sales and excise taxes collected by customers, all of which the Company has the primary responsibility to pay and remit to taxing authorities. Taxes are excluded from the transaction price. The Company elected not to disclose revenue related to remaining performance obligations for partially completed or unfulfilled contracts that are expected to be fulfilled within one year as such amounts are deemed to be insignificant. Cost of Sales Cost of sales includes the aggregate costs to procure the Company’s products, including the amounts invoiced by third-party contract manufacturers and suppliers for finished goods, as well as costs related to transportation to distribution centers, amortization of the patented formulations, and amortization of the fair value step-up of inventory. Selling, General and Administrative Expenses Selling, general, and administrative (“SG&A”) expenses primarily consist of personnel-related expenses, including salaries, bonuses, fringe benefits and share-based compensation expense, marketing and digital expenses, warehousing, fulfillment, and distribution costs, costs related to merchandising, product development costs, and depreciation of property and equipment. Income Taxes The Company uses the asset and liability approach for financial accounting and reporting for income taxes. The provision for income taxes includes Federal, and state income taxes currently payable or receivable and those deferred because of temporary differences between the financial statement and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which those temporary differences are expected to be recovered or settled. The Company recognizes deferred tax assets to the extent it believes the assets are more likely than not to be realized. Valuation allowances are established when necessary, to reduce deferred tax assets to the amount expected to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and the results of recent operations. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are 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, if any, associated with tax matters (including UTPs) as part of the income tax provision and includes accrued interest and penalties with the related tax liability in the Company’s consolidated balance sheet. Concentrations of Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents. Although the Company deposits its cash with creditworthy financial institutions, its deposits, at times, may exceed federally insured limits. To date, the Company has not experienced any losses on it cash deposits. The Company extends credit to customers in certain industries, such as retail, which may be affected by changes in economic or other external conditions. Three of the Company’s customers represented 33%, and 31% of total net sales for the years ended December 31, 2021 and December 31, 2020, respectively. Three of the Company’s customers represents 42% and 45% of accounts receivable as of December 31, 2021 and December 31, 2020, respectively. The Company has not experienced any bad debt losses due to this concentration. No other customers individually have greater than 10% of total net sales or accounts receivable. The Company purchases its inventories for certain product categories from a small number of vendors. Three of the Company’s vendors, of which one is also one of their contract manufacturers, represented 73% and 79% of the Company’s inventory purchases for the years ended December 31, 2021 and December 31, 2020, respectively. These same vendors represented 68% and 52% of accounts payable as of December 31, 2021 and December 31, 2020, respectively. No other vendor individually has greater than 10% of total inventory purchases or accounts payable. Marketing and Advertising The Company expenses marketing and advertising costs as incurred. Selling, general, and administrative expenses include marketing and advertising expenses of $11,137, and $2,521 for the years ended December 31, 2021 and December 31, 2020, respectively, in the accompanying consolidated statements of operations and comprehensive income. Shipping and Fulfillment Shipping and fulfillment costs incurred by the Company to ship to customers are expensed as incurred and are included in selling, general, and administrative expenses. Shipping and fulfillments costs are $12,183, and $4,126 for the years ended December 31, 2021 and December 31, 2020, respectively, in the accompanying consolidated statements of operations and comprehensive income. Share-Based Compensation Share-based compensation options granted to employees, non-employees and directors are measured at fair value at the respective grant dates and recognized as share-based compensation expense. Share-based compensation expense equal to the fair value of time-based service options that are expected to vest is estimated using the Black-Scholes model and recorded over the period the grants are earned, which is the requisite service period. The Company uses a Monte Carlo option-pricing model to estimate the fair value of its performance-based options. This model requires the use of highly subjective and complex assumptions including volatility and expected option life. The costs relating to share-based compensation expense are recognized in selling, general, and administrative expenses in our consolidated statements of operations and comprehensive income, and forfeitures are recognized and accounted for as they occur. There were no performance-based options outstanding as of December 31, 2021. Investment in Nonconsolidated Entity The Company uses the cost method to account for its equity investment for which these equity securities do not have readily determinable fair values and for which the Company does not have the ability to exercise significant influence. Under the cost method of accounting, the Company’s investment is carried at cost and is adjusted only for other-than-temporary declines in fair value, additional investments, plus or minus changes from observable price changes in orderly transactions or distributions deemed to be a return of capital. Earnings from cost method investments are recorded in the statement of operations and comprehensive income under other income. There are no earnings or fair value adjustments recorded to date. Tax Receivable Agreement As part of the IPO, we entered into the Tax Receivable Agreement under which generally we will be required to pay to the Pre-IPO Stockholders 85% of the cash savings, if any, in U.S. federal, state or local tax that we actually realize on our taxable income following the IPO (or are deemed to realize in certain circumstances) as a result of (i) certain existing tax attributes, including tax basis in intangible assets and capitalized transaction costs relating to taxable years ending on or before the date of the IPO (calculated by assuming the taxable year of the relevant entity closes on the date of the IPO), that are amortizable over a fixed period of time (including in tax periods beginning after the IPO) and which are available to us and our wholly-owned subsidiaries, and (ii) tax benefits attributable to payments made under the Tax Receivable Agreement, together with interest accrued at a rate equal to LIBOR (“London Interbank Offered Rate”) (or if LIBOR ceases to be published, a replacement rate with similar characteristics) plus 3% from the date the applicable tax return is due (without extension) until paid. Under the Tax Receivable Agreement, generally we will retain the benefit of the remaining 15% of the applicable tax savings. Recently Adopted Accounting Pronouncements The Company is an “emerging growth company” and as an emerging growth company, the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable 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 the Company (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, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies. In February 2016, the Financial Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” The guidance in this ASU supersedes the leasing guidance in “Leases (Topic 840).” Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for the Company fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company adopted this accounting standard on January 1, 2022. Adoption of this standard did not have a material impact on its consolidated financial statements. Recent Accounting Guidance Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The FASB has issued multiple updates to ASU 2016-13 as codified in Topic 326, including ASUs 2019-04, 2019-05, 2019-10, 2019-11, 2020-02, and 2020-03. These ASUs have provided for various minor technical corrections and improvements to the codification as well as other transition matters. The amendments in the ASU are effective for the Company for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early application of the amendments is permitted. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides an optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation of the LIBOR, regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. The ASU can be adopted no later than December 31, 2022 with early adoption permitted. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements and related disclosures. |
NET SALES
NET SALES | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
NET SALES | NET SALES The Company distributes products through national and international professional distributors and retailers as well as direct-to-consumer (“DTC”) through e-commerce channels. The marketing and consumer engagement benefits that the Company’s channels provide are integral to the Company’s brand and product development strategy and drive sales across channels. As such, the Company’s three business channels consist of professional, specialty retail and DTC as follows: For the Twelve Months Ended December 31, 2021 December 31, 2020 Net sales by Channel: Professional $ 259,009 $ 156,199 Specialty retail 175,799 50,718 DTC 163,557 75,333 Total Net sales $ 598,365 $ 282,250 Revenue by major geographic region is based upon the geographic location of customers who purchase our products. During the twelve months ended December 31, 2021 and December 31, 2020 our net sales to consumers in the United States and International regions were as follows: For the Twelve Months Ended December 31, 2021 December 31, 2020 Net sales by Geography: United States $ 344,656 $ 149,272 International 253,709 132,978 Total Net sales $ 598,365 $ 282,250 United Kingdom (“U.K”) net sales for the twelve months ended December 31, 2021 and December 31, 2020 were 14% and 17% of total net sales, respectively. No other International country exceeds 10% of total net sales. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Inventory as of December 31, 2021 and December 31, 2020 consisted of the following: December 31, 2021 December 31, 2020 Raw materials $ 20,852 $ 7,773 Finished goods 77,547 25,823 Inventory $ 98,399 $ 33,596 |
INVESTMENT IN NONCONSOLIDATED E
INVESTMENT IN NONCONSOLIDATED ENTITY | 12 Months Ended |
Dec. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN NONCONSOLIDATED ENTITY | INVESTMENT IN NONCONSOLIDATED ENTITY Our investment in and advances to our nonconsolidated entity as of December 31, 2021 represents our investment in a limited liability company. We do not control or have significant influence over the operating and financial policies of this affiliate. We account for this investment using the cost method and adjust only for other than temporary declines in fair value, additional investments, plus or minus changes from observable price changes in orderly transactions or distributions deemed to be a return of capital. Our investment is classified as a long-term asset in our consolidated balance sheet and consists of the following: December 31, 2021 December 31, 2020 Capital contributions, net of distributions and impairments $ 4,500 $ — Total investments in and advances to nonconsolidated affiliate $ 4,500 $ — |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS On January 8, 2020, the Company completed the Acquisition to acquire the net assets of the Olaplex business and 100% of voting equity interests. The purchase price was $1,381,582 in net cash paid. Information regarding the net cash consideration paid and fair value of the assets and liabilities assumed at the Acquisition Date is as follows: Fair value of assets acquired $ 1,216,259 Goodwill 168,300 Fair value of liabilities assumed (2,977) Net cash paid for acquisition $ 1,381,582 Purchase price is comprised of: Cash, net of acquired cash $ 1,381,582 Net cash paid for acquisition $ 1,381,582 Allocation of purchase price: Net tangible assets (liabilities): Inventory $ 61,262 Accounts receivable and other current assets 7,595 Deferred tax assets 6,402 Liabilities (2,977) Net tangible assets 72,282 Identifiable intangible assets: Brand name 952,000 Product formulations 136,000 Customer relationships 53,000 Total identifiable intangible assets 1,141,000 Goodwill 168,300 Net assets acquired $ 1,381,582 For this Acquisition, brand name, product formulations, and customer relationships were assigned estimated useful lives of 25 years, 15 years, and 20 years, respectively, the weighted average of which is approximately 23.6 years. Costs related to the Acquisition are expensed as incurred. In connection with the Acquisition, the Company recorded transaction expenses totaling $16,499 for the year ended December 31, 2020, within the consolidated statements of operations and comprehensive income. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill and intangible assets are comprised of the following: December 31, 2021 Estimated Gross Carrying Accumulated Net carrying amount Brand name 25 years $ 952,000 $ (75,314) $ 876,686 Product formulations 15 years 136,000 (17,932) 118,068 Customer relationships 20 years 53,000 (5,241) 47,759 Software 3 years 890 (59) 831 Total finite-lived intangibles 1,141,890 (98,546) 1,043,344 Goodwill Indefinite 168,300 168,300 Total goodwill and other intangibles $ 1,310,190 $ (98,546) $ 1,211,644 Amortization of finite-lived intangible assets was $49,856 for the twelve months ended December 31, 2021, and $48,690 for the twelve months ended December 31, 2020. The amortization of brand name and customer relationships of $40,730 and $39,825 for the twelve months ended December 31, 2021 and 2020, respectively, is recorded in the consolidated statements of operations and comprehensive income. The amortization for patented formulations for the twelve months ended December 31, 2021 is $9,067. The Company expensed $7,989 of patent amortization in cost of sales for the twelve months ended December 31, 2021 with $1,078 capitalized to inventory. The amortization for patented formulations for the twelve months ended December 31, 2020 is $8,865. The Company expensed $6,052 of patent amortization in cost of sales for the twelve months ended December 31, 2021 with $2,813 capitalized to inventory. December 31, 2020 Estimated Gross Accumulated Net carrying amount Brand name 25 years $ 952,000 $ (37,234) $ 914,766 Product formulations 15 years 136,000 (8,865) 127,135 Customer relationships 20 years 53,000 (2,591) 50,409 Total finite-lived intangibles 1,141,000 (48,690) 1,092,310 Goodwill Indefinite 168,300 — 168,300 Total goodwill and other intangibles $ 1,309,300 $ (48,690) $ 1,260,610 The estimated future amortization expense related to the finite-lived intangible assets as of December 31, 2021, is as follows: Year ending December 31 2022 $ 50,152 2023 $ 50,152 2024 $ 49,916 2025 $ 49,797 2026 $ 49,797 Thereafter $ 793,530 Total $ 1,043,344 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses as of December 31, 2021 and December 31, 2020 consisted of the following: December 31, 2021 December 31, 2020 Deferred revenue $ 5,022 $ 2,314 Accrued sales and income taxes 12,144 3,100 Accrued other 6,008 2,931 Payroll liabilities 6,302 1,517 Accrued expenses and other current liabilities $ 29,476 $ 9,862 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Debt consisted of the following on December 31, 2021: January 2020 Credit December 2020 Amendment Total Long-term debt Original term loan borrowing $ 430,312 $ 338,923 $ 769,235 Debt issuance costs (6,986) (4,047) (11,033) Total term loan debt 423,326 334,876 758,202 Less: Current portion (11,250) (8,862) (20,112) Long-term debt, net of current portion $ 412,076 $ 326,014 $ 738,090 Debt consisted of the following on December 31, 2020: January 2020 December 2020 Amendment Total Long-term debt Original term loan borrowing $ 441,562 $ 347,785 $ 789,347 Debt issuance costs (8,810) (5,054) (13,864) Total term loan debt 432,752 342,731 775,483 Less: Current portion (11,250) (8,862) (20,112) Long-term debt, net of current portion $ 421,502 $ 333,869 $ 755,371 On January 8, 2020, Olaplex, Inc. entered into a secured credit agreement (the “Original Credit Agreement”), consisting of a $450,000 term loan facility (the “2020 Term Loan Facility”) and a $50,000 revolving facility (the “2020 Revolver” and together with the Term Loan Facility, the “2020 Credit Facilities”), which included a $10,000 letter of credit sub-facility and a $5,000 swingline loan sub-facility. In addition, on December 18, 2020, Olaplex, Inc. entered into a First Incremental Amendment to the Credit Agreement (the “Amendment,” and together with the Original Credit Agreement, the “2020 Credit Agreement”) to increase the 2020 Term Loan Facility by $350,000 and increase the Revolver capacity by $1,000 to a revised $800,000 Term Loan Facility and $51,000 Revolver. The unused balance of the Revolver as of December 31, 2021 and December 31, 2020 was $51,000. Under the Original Credit Agreement, Olaplex, Inc. incurred original issue discount (“OID”) costs of $10,000, and $527 of third-party issue costs. In connection with the incremental borrowing pursuant to the Amendment, Olaplex, Inc. incurred OID costs of $3,500 and $1,590 of third-party issue costs. The interest rate on outstanding debt under the 2020 Term Loan Facility was 7.5%. The interest rates for all facilities are calculated based upon Olaplex, Inc.’s election between the published LIBOR rate at time of election plus an additional interest rate spread, or the Alternate Base Rate plus an additional interest rate spread. As of December 31, 2021 and December 31, 2020, there was no balance outstanding under the 2020 Revolver, including letters of credit and swingline loans. Interest expense, inclusive of debt amortization was $61,148 and $38,645 for the twelve months ended December 31, 2021 and December 31, 2020, respectively, and was recorded in interest expense, net in the consolidated statements of operations and comprehensive income. The 2020 Credit Agreement included reporting, financial, and maintenance covenants that require, among other things, for Olaplex, Inc. to comply with certain maximum secured leverage ratios, which Olaplex, Inc. was in compliance with on December 31, 2021 and December 31, 2020. Substantially all the assets of Olaplex, Inc. constitute collateral under the 2020 Term Loan Facility and 2020 Revolver facilities. On February 23 , 2022, Olaplex, Inc., an indirect wholly owned subsidiary of Olaplex Holdings, Inc., together with Penelope Intermediate Corp. acting as the parent guarantor, entered into a Credit Agreement, dated as of February 23, 2022 (the “2022 Credit Agreement”), by and among Olaplex, Inc., Penelope Intermediate Corp, Goldman Sachs Bank USA (“Goldman Sachs”), as administrative agent (the “Administrative Agent”), collateral agent and swingline lender, and each lender and issuing bank from time to time party thereto (the “Lenders”) . The 2022 Credit Agreement refinanced the 2020 Credit Agreement with a seven five The 2022 Credit Agreement replaced Olaplex, Inc.’s 2020 Credit Agreement. The Term Loan bears interest at a rate of Adjusted one-month adjusted secured overnight financing rate “SOFR” (subject to a 0.50% floor) + initially 3.75% per annum (with a 0.25% leverage based step-down, tied to achieving a first lien net leverage ratio of 1.20x), and matures on February 23, 2029. The Revolving Facility bears interest at a rate of Adjusted SOFR for dollar denominated borrowings (subject to a 0% floor) + initially 3.75% (with a 0.25% leverage based step-down, tied to achieving a first lien net leverage ratio of 1.20x), and matures on February 23, 2027. The Term Loans are repayable in mandatory quarterly installments equal to $1,688, with the balance payable at maturity. The Revolving Credit Facility matures on February 23, 2027. The 2022 Credit Agreement contains a number of covenants that, among other things, restrict Olaplex, Inc.’s ability to (subject to certain exceptions) (i) pay dividends and distributions or repurchase its capital stock, (ii) prepay, redeem, or repurchase certain indebtedness, (iii) incur additional indebtedness and guarantee indebtedness, (iv) create or incur liens, (v) engage in mergers, consolidations, liquidations or dissolutions, (vi) sell, transfer or otherwise dispose of assets, (vii) make investments, acquisitions, loans or advances and (viii) enter into certain transactions with affiliates. The 2022 Credit Agreement also includes, among other things, customary affirmative covenants (including reporting covenants) and events of default (including a change of control) for facilities of this type. In addition, the 2022 Credit Agreement includes a springing first lien leverage ratio financial covenant, which is applicable only to the lenders under the Revolving Credit Facility. Such affirmative and negative covenants and events of default are substantially similar to those contained in the 2020 Credit Agreement, subject to certain exceptions and thresholds set forth in the 2022 Credit Agreement. The Credit Facilities are secured by substantially all of the assets of Olaplex, Inc. and the other guarantors, subject to certain exceptions and thresholds, which is substantially the same as the collateral that secured the obligations under the 2020 Credit Agreement. Olaplex, Inc. must pay the Administrative Agent a quarterly commitment fee based upon the product of (i) the applicable rate as described below and (ii) the average daily amount of the unused revolving commitments. Olaplex, Inc. also must pay the issuing banks fees based upon the amount available to be drawn under such letters of credit. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s breakdown of its income before provision for income taxes for the years ended December 31, 2021 and 2020 is as follows: December 31, 2021 December 31, 2020 United States $ 275,554 $ 47,221 Foreign 55 37 Total income before taxes $ 275,609 $ 47,258 The components of the provision for (benefit from) income taxes were as follows: December 31, 2021 December 31, 2020 Current provision: Federal $ 44,660 $ 11,314 State & Local 7,668 1,079 Foreign 11 15 Total current provision 52,339 12,408 Deferred provision: Federal 2,772 (4,204) State & Local (286) (224) Foreign — — Total deferred provision 2,486 (4,428) Total provision for income taxes $ 54,825 $ 7,980 Significant components of the Company’s deferred tax assets and liabilities are as follows: Deferred Tax Assets: December 31, 2021 December 31, 2020 Inventory adjustments $ 661 $ 258 Capitalized transaction costs 3,016 3,218 Deferred revenue 1,061 172 Accrued expenses and other current liabilities 3,102 637 Share-based compensation 397 321 Intangible assets 6,410 8,549 Total Deferred Tax Assets 14,647 13,155 Deferred Tax Liabilities: Goodwill 4,675 2,264 Other current assets 1,256 61 Fixed assets 372 — Total Deferred Tax Liabilities 6,303 2,325 Net Deferred Tax Assets $ 8,344 $ 10,830 The following table provides a reconciliation between the U.S. federal statutory rate and the Company’s effective tax rates for the years ended December 31, 2021 and 2020: December 31, 2021 December 31, 2020 U.S. federal statutory income tax rate 21.0 % 21 % Foreign derived intangible income deduction (3.0) % (5.2) % State and local income taxes, net of federal benefit 2.6 % 1.8 % Share based compensation (1.2) % — % Other 0.5 % (0.7) % Effective Tax Rate 19.9 % 16.9 % In 2021 and 2020, the effective tax rate was lower than the U.S. federal statutory tax rate primarily due to the foreign derived intangible income deduction (“FDII”) and excess tax benefits associated with share-based compensation, offset by the effect of state and local income taxes. The FDII deduction results in income from the Company’s sales to foreign customers being taxed at a lower effective tax rate. The Company assesses positive and negative evidence for each jurisdiction to determine whether it is more likely than not that existing deferred tax assets will be realized. As of December 31, 2021 and 2020, no valuation allowance was recorded as the Company has concluded that its net deferred tax assets are more likely than not to be realized. The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the taxing authority based on the technical merits. The Company had no uncertain tax positions as of December 31, 2021 and 2020 and does not expect any significant change in its unrecognized tax benefits within the next 12 months. On March 27, 2020, the U.S. Federal government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act was an emergency economic stimulus package in response to the COVID-19 pandemic, which among other things contained numerous income tax provisions. The Company did not avail itself of any of the elective provisions of the CARES Act, including the Payroll Protection Program or Employee Protection Credit incentives, or payroll tax deferral. The CARES Act did not have a material impact on the Company’s consolidated financial statements. In the normal course of business, the Company and its subsidiaries may be examined by various taxing authorities, including the Internal Revenue Service in the U.S. As of December 31, 2021, the Company remained subject to examination in the U.S. and U.K. for the 2021 and 2020 tax years. Tax Receivable Agreement Based on current tax laws and assuming that the Company earns sufficient taxable income to realize the full tax benefits subject to the Tax Receivable Agreement, (i) we expect that future payments under the Tax Receivable Agreement relating to certain tax benefits related to certain existing tax attributes, including tax basis in intangible assets and capitalized transaction costs relating to taxable years ending on or before the date of the IPO (calculated by assuming the taxable year of the relevant entity closes on the date of the IPO), that are amortizable over a fixed period of time (including in tax periods beginning after this offering) and which are available to the Company and its wholly-owned subsidiaries could aggregate to $229,279 over the 14-year period under the Tax Receivable Agreement and (ii) we expect material payments to occur beginning in 2023. Payments under the Tax Receivable Agreement are not conditioned upon the parties’ continued ownership of the Company. The Tax Receivable payment obligation was recorded as of September 30, 2021 as a non-current liability of $232,893 on the consolidated balance sheet with a corresponding decrease in Additional paid-in capital. During the fourth quarter of 2021, the Company recognized other income of $3,615 for a reduction to the liability for the Tax Receivable Agreement resulting primarily from an update to the blended state income tax rate used to measure the obligation. As of December 31, 2021, the adjusted liability which is not inclusive of any interest that may be incurred depending on the timing of the tax filings is $229,279, $4,157 of which has been classified as a current liability on the consolidated balance sheet as it is expected to be settled within one year. The remaining balance of $225,122 is classified as a non-current liability on the consolidated balance sheet. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATIONOn September 17, 2021, the Company adopted the Olaplex Holdings 2021 Omnibus Equity Incentive Plan (the “2021 Plan”), which provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, unrestricted stock, stock units, including restricted stock units, performance awards, and other stock-based awards to employees, directors and consultants of the Company and its subsidiaries. The number of shares of common stock available for issuance under the 2021 Plan (subject to adjustment as described below) is 45,368,725 shares of common stock, plus the number of shares of common stock underlying awards granted under the Penelope Holdings Corp. 2020 Omnibus Equity Incentive Plan (the “2020 Plan”) that on or after September 17, 2021 expire or become unexercisable, are forfeited to, or repurchased for cash by, the Company are settled in cash, or otherwise become available again for grant under the 2020 Plan discussed below. The total number of shares of common stock of the Company available for issuance under the 2021 Plan will increase automatically on January 1 of each year beginning in 2023 and continuing through and including 2031 by the lesser of (i) three percent (3%) of the number of shares of common stock outstanding as of such date and (ii) the number of shares of common stock determined by the Company’s Board of Directors on or prior to such date for such year. The number of shares available for issuance under the 2021 Plan will not be increased by any shares of common stock delivered under the 2021 Plan that are subsequently repurchased using proceeds directly attributable to stock option exercises. Prior to the IPO and the Reorganization Transactions, Penelope previously granted share-based options to purchase common stock of Penelope under the 2020 Plan with vesting based on either service or market (performance) conditions. Immediately prior to the Reorganization Transactions, each option to purchase shares of common stock of Penelope was converted into an option to purchase 675 shares of common stock of Olaplex Holdings, with a corresponding adjustment to the option’s exercise price to preserve its spread value, and each cash-settled unit of Penelope was converted to 675 cash-settled units of Olaplex Holdings, with a corresponding adjustment to the unit’s base price to preserve its spread value, as further described in this Note 11. No further awards will be made under the 2020 Plan. Conversion of Shared-Based Options in Reorganization Transactions As a result of the Reorganization Transactions, the options to purchase shares of common stock of Penelope were converted into options to purchase an aggregate of 46,923,300 shares of common stock of Olaplex Holdings, in each case with a corresponding adjustment to the exercise price that preserved the option’s spread value, as follows: • outstanding vested time-based options to purchase shares of common stock of Penelope were converted into vested options to purchase an aggregate of 2,929,500 shares of common stock of Olaplex Holdings; • outstanding unvested time-based options to purchase shares of common stock of Penelope were converted into time-based options to purchase an aggregate of 14,314,725 shares of common stock of Olaplex Holdings that will be eligible to vest as described under “Converted Time-Based Options” below; • outstanding performance-based options to purchase shares of common stock of Penelope were converted into (i) time-based options to purchase an aggregate of 25,363,800 shares of common stock of Olaplex Holdings that will be eligible to vest as described under “Converted Performance-Based Options” below, and (ii) vested options to purchase an aggregate of 4,315,275 shares of common stock of Olaplex Holdings; Converted Time-Based Options All converted outstanding time-based options are in the form of options to purchase common stock of Olaplex Holdings with vesting based on the option holder’s continued service. The original time-based options that were converted are eligible to vest in five equal installments on the first five anniversaries from the vesting start date, subject to the option holder’s continued service through the applicable vesting date and are ratably expensed over a five-year service period from the original grant date. Converted Performance-Based Options The performance-based options that were converted to time-based options to purchase common stock of Olaplex Holdings are eligible to vest in three equal installments on the first three anniversaries of the consummation of the IPO, subject to the option holder’s continued service through the applicable vesting date and are ratably expensed over a three-year service period from the consummation of the IPO. IPO Option Grants In connection with the IPO, the Company granted, under the 2021 Plan, time-based options to purchase an aggregate of 351,058 shares of common stock of the Company to certain employees. The options are eligible to vest in four equal installments on the first four anniversaries of the grant date, subject to the option holder’s continued service through the applicable vesting date and are ratably expensed over a four-year service period from the grant date. As of December 31, 2021, a total of 92,292,025 shares have been authorized for issuance under the 2020 Plan and 2021 Plan, with 44,955,647 remaining available to grant under the 2021 Plan and no shares available for issuance under the 2020 Plan. As of December 31, 2021, there were outstanding options to purchase an aggregate of 46,666,979 shares with 46,253,901 shares outstanding under the 2020 Plan and 413,078 shares outstanding under the 2021 Plan. As of December 31, 2021, there were options to purchase an aggregate of 2,430,480 shares with 2,362,500 shares forfeited under the 2020 Plan and 67,980 shares forfeited under the 2021 Plan. Share-based compensation expense for the twelve months ended December 31, 2021 of $3,963 was recognized in selling, general, and administrative expenses in the consolidated statements of operations and comprehensive income. As of December 31, 2021, the Company had not recognized compensation costs on unvested share-based options of $11,638 with a weighted average remaining recognition period of 3.31 years. Share-based compensation expense for the twelve months ended December 31, 2020 of $1,527 was recognized in selling, general and administrative expenses in the consolidated statements of operations and comprehensive income. As of December 31, 2020, the Company had not recognized compensation costs on unvested share-based options of $9,625 with a weighted average remaining recognition period of 4.39 years for time-based and 3.53 for performance-based options. Time-based service options The following table summarizes the activity for options that vest solely based upon the satisfaction of a time-based service condition shown on a converted basis to reflect the Reorganization Transactions for all periods as follows: Year Ended December 31, 2021 Year Ended December 31, 2020 Options Weighted Average Aggregate intrinsic value Weighted Average Contractual Term (Years) Options Weighted Average Aggregate intrinsic value Weighted Average Contractual Term (Years) Beginning balance 15,997,500 $ 0.88 $ 26,780 10 — $ — $ — Granted 3,077,783 6.17 15,997,500 0.88 Cancelled/Forfeited (1,417,980) 2.10 — — Converted Performance to Time-Based 25,363,800 0.92 — — Exercised (333,585) $ 1.49 $ 8,138 10 — $ — Outstanding 42,687,518 $ 1.24 $ 798,404 10 15,997,500 $ 0.88 $ 26,780 10 Vested and Exercisable 2,595,915 $ 0.80 $ 73,553 10 — $ — — The total fair value of options vested during the December 31, 2021 year ended was $1,567. The intrinsic value represents the difference between the fair value of the Company’s common stock on the date of exercise and the exercise price of each option. Additional information relating to time-based service options is as follows: Year Ended December 31, December 31, Share-based compensation expense $ 2,101 $ 1,098 Weighted-average grant date fair value of options granted (per share) $ 0.73 $ 0.54 The fair value of time-based options granted were calculated using the following assumptions: Year Ended December 31, December 31, Expected term (years) 6.25 - 7.00 6.50 Expected volatility (%) 25 - 30 30 Risk-free interest rate (%) 1.07 - 1.62 0.37 - 1.87 Expected dividend yield (%) — — Performance-based options The following table summarizes the activity for options that vest based upon the satisfaction of a performance condition as follows: Year Ended December 31, 2021 Year Ended December 31, 2020 Options Weighted Average Aggregate Intrinsic Value Weighted Average Contractual Term (Years) Options Weighted Average Aggregate intrinsic value Weighted Average Contractual Term (Years) Beginning balance 28,732,050 $ 0.81 $ 50,183 10 — $ — $ — Granted 1,959,525 3.19 28,732,050 0.81 Cancelled/Forfeited (1,012,500) 0.97 — — Converted Performance to Time-Based (25,363,800) 0.92 — — Exercised (335,814) $ 1.91 $ 8,686 10 — $ — Outstanding 3,979,461 $ 1.17 $ 111,278 10 28,732,050 $ 0.81 $ 50,183 10 Vested and Exercisable 3,979,461 $ 1.17 $ 111,278 10 — $ — — The total fair value of options vested during the December 31, 2021 year ended was $1,483. The intrinsic value represents the difference between the fair value of the Company’s common stock on the date of exercise and the exercise price of each option. Additional information relating to performance-based options is as follows: Year Ended December 31, December 31, Share-based compensation expense $ 1,705 $ 429 Weighted-average grant date fair value of options granted (per share) $ 0.13 $ 0.09 The fair value of performance-based options granted were calculated using the following assumptions: Year Ended December 31, December 31, Expected term (years) 0.40 4.00 Expected volatility (%) 30 30 Risk-free interest rate (%) 1.48 - 1.62 1.87 Expected dividend yield (%) 49 — Treatment of Cash-Settled Units in Reorganization Transactions In addition, as a result of the Reorganization Transactions, the cash-settled units of Penelope were converted into an aggregate of 1,098,900 cash-settled units of Olaplex Holdings, in each case with a corresponding adjustment to the base price per unit that preserves the units’ spread value, as follows: • outstanding time-based cash-settled units of Penelope were converted into an aggregate of 621,000 time-based cash-settled units of Olaplex Holdings that will be eligible to vest as described under “Converted Time-Based Cash-Settled Units” below; and • outstanding performance-based cash-settled units of Penelope were converted into (i) an aggregate of 318,600 time-based cash-settled units of Olaplex Holdings that will be eligible to vest as described under “Converted Performance-Based Cash-Settled Units” below, and (ii) an aggregate of 159,300 vested cash-settled units of Olaplex Holdings. Converted Time-Based Cash-Settled Units The converted time-based cash-settled units are eligible to vest in five equal installments on the first five anniversaries of the vesting start date, subject to the option holder’s continued service through the applicable vesting date. The time-based cash-settled units are liability awards and are fair valued at each reporting period and recognized as compensation expense over a five-year service period. Converted Performance-Based Cash-Settled Units Following the IPO, the converted performance cash-settled units are eligible to vest in three equal installments on the first three anniversaries of the consummation of the IPO, subject to (i) the unit holder’s continued service through the applicable vesting date and (ii) the weighted average closing price per share over the thirty (30) consecutive trading days ending on the day immediately prior to the applicable vesting date equaling or exceeding the IPO price of $21 on each applicable vesting date. The performance-based cash-settled awards are liability awards and are fair valued at each reporting period and contingent upon achieving a market condition and not expensed until the market condition is achieved. For the twelve months ended December 31, 2021, $5,478 of compensation expense (and liability) was recognized for the time-based and vested cash-settled units, respectively, by the Company in selling, general, and administrative expenses in the consolidated statements of operations and comprehensive income. The Company paid an aggregate of $2,872 to the holders of the 159,300 performance-based cash-settled units that vested in connection with the Reorganization Transactions and IPO. As of December 31, 2021, the unrecognized compensation for time-based units is $13,055. In the event the contingent market condition and continued service requirement for performance-based cash-settled units is achieved, 33.33% of the cash-settled units shall vest on each of the first three anniversaries of October 4, 2021, with the Company paying an aggregate of $8,017 to holders of these units based on the December 31, 2021 assumptions noted below. The performance-based cash-settled units are liability awards and are fair valued at each reporting period. The following table summarizes the activity for units that vest based upon the satisfaction of time and performance-based conditions as follows: Year Ended December 31, 2021 Time-based Performance-based Outstanding at Beginning balance — — Granted 684,450 526,500 Vested and redeemed — (159,300) Cancelled/Forfeited (87,750) (60,750) Outstanding at Ending balance 596,700 306,450 The fair value of time-based cash-settled units granted were calculated using the following assumptions: Year Ended December 31, 2021 Expected term (years) 2.56 Expected volatility (%) 30 Risk-free interest rate (%) 0.85 Expected dividend yield (%) — The unrecognized compensation expense for converted cash-settled units was calculated using the following assumptions: Year Ended December 31, 2021 Stock Price at December 31, 2021 $ 29.13 Exercise Price per Unit $ 2.97 Intrinsic Value per Unit $ 26.16 Converted Units 306,450 The determination of the fair value of share-based options on the date of grant using a Black-Scholes formula and Monte Carlo simulation approach for the value of time and performance-based vesting options, respectively, is affected by the fair value of the underlying common stock. It is also affected by assumptions regarding a number of variables that are complex and generally require significant judgement. The determination of the fair value of cash-settled units on the date of grant and each reporting period-end using a Black-Scholes formula and Monte Carlo simulation approach for the value of time and performance-based vesting units, respectively, is affected by the fair value of the underlying common stock. It is also affected by assumptions regarding a number of variables that are complex and generally require significant judgement. The assumptions used in the Black-Scholes and Monte Carlo option-pricing models to calculate value of stock options were: Expected term The expected term of the options represents the period of time that the options are expected to be outstanding. Options granted have a maximum contractual life of 10 years. Prior to the initial public offering, the Company estimated the expected term of the option based on the estimated timing of potential liquidity events. For grants upon or after the initial public offering, the Company estimated the expected term based upon the simplified method described in Staff Accounting Bulletin No. 107, as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded. Expected volatility As the Company does not have sufficient trading history for its common stock, the expected stock price volatility for the common stock was estimated by taking the average historic price volatility for industry peers based on daily price observations over a period equivalent to the expected term of the stock option grants. Industry peers consist of several public companies within the same industry. The Company intends to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of its own share price becomes available, or unless circumstances change such that the identified companies are no longer similar to the Company, in which case, more suitable companies whose share prices are publicly available would be used in the calculation. Risk-free interest rate The risk-free interest rate was based on the U.S. Constant Maturity Treasury rate, with maturities similar to the expected term. Expected Dividend Yield The Company does not anticipate paying any dividends in the foreseeable future. As such, the Company uses an expected dividend yield of zero. |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
EQUITY | EQUITY In connection with the Reorganization Transactions, on September 29, 2021, Fund IX and the other former limited partners of Penelope Group Holdings, L.P. contributed 100% of their respective economic equity interests in Penelope Group Holdings, L.P. and Fund IX contributed 100% of its equity interests in Penelope Group Holdings GP II, to Olaplex Holdings in exchange for an aggregate of 648,124,642 shares of common stock of Olaplex Holdings plus Tax Receivable Agreement payment rights. Penelope Group Holdings, L.P. directly held the shares of Penelope prior to the reorganization and following the mergers, Olaplex Intermediate II, Inc. currently holds the shares of Penelope. With regard to the Reorganization Transactions, including the issuance of 648,124,642 shares of Olaplex Holdings with a par value of $0.001 per share, the Company made a par value reclassification adjustment from Additional Paid in Capital in the consolidated statement of changes in equity to reflect the par value of the Company. As part of the Reorganization Transactions, the Company entered into the Tax Receivable Agreement with the Pre-IPO Stockholders. See further discussion in Notes 2 and 10. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS The Company received $300 in the 2020 fiscal period from certain investment funds affiliated with Advent International Corporation (the “Advent Funds”), which are shareholders of the Company, to be expended as charitable donations of which $20 was unpaid as of December 31, 2020. In July 2020, the Company entered into an agreement with CI&T, an information technology and software company, pursuant to which CI&T developed the Olaplex professional application. During the year ended December 31, 2021 and fiscal year ended December 31, 2020, the Company paid CI&T $195 and $25 respectively, for services related to the development, maintenance and enhancement of the application, all of which were negotiated on an arm’s length basis and on market terms. The Advent Funds hold a greater than 10% equity interest in CI&T. CI&T continues to provide services to us for the maintenance and enhancement of the professional application. Tax Receivable Agreement |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES From time to time, the Company is subject to various legal actions arising in the ordinary course of business. The Company cannot predict with reasonable assurance the outcome of these legal actions brought against us as they are subject to uncertainties. Accordingly, any settlement or resolution in these legal actions may occur and affect our net income in such period as the settlement or resolution. Pursuant to the purchase agreement between the Sellers, the Advent Funds and the other purchasers of the Olaplex business, the Company was required to pay the Sellers certain amounts in connection with the final settlement of certain litigation and contingency matters involving LIQWD, Inc., a predecessor entity to the Company substantially all of whose assets and liabilities were purchased as part of the Acquisition (the “LIQWD Matters”). During April 2021, the Company and the Sellers commenced negotiations concerning the amount to be paid to the Sellers by the Company in connection with a potential settlement of the LIQWD Matters and, in May 2021, the Company reached agreement with the Sellers on the amount to be paid by the Company to the Sellers in full satisfaction of the contingency provisions in the purchase agreement related to the LIQWD Matters. Accordingly, the Company has expensed approximately $14,250 included in selling, general and administrative costs in the accompanying consolidated financial statements during the year ended December 31, 2021, associated with the amounts to be paid by the Company in connection with the final resolution of the LIQWD Matters. The amounts accrued, all of which were paid in May 2021, in connection with the final settlement of the LIQWD Matters, represent the total cost to the Company in resolving the LIQWD Matters. As a result of the foregoing agreement with the Sellers and the resulting approval by the Sellers of the settlement of the LIQWD Matters, all outstanding claims of the Sellers and the Company associated with the LIQWD Matters have been resolved. As of December 31, 2021 and December 31, 2020, the Company is not subject to any other currently pending legal matters or claims that could have a material adverse effect on its financial position, results of operations, or cash flows should such litigation be resolved unfavorably. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE The following is a reconciliation of the numerator and denominator in the basic and diluted net income per common share computations: Year Ended December 31, December 31, Numerator: Net Income $ 220,784 $ 39,278 Denominator: Weighted average common shares outstanding – basic 648,166,472 635,386,219 Dilutive common equivalent shares from equity options 41,757,320 1,433,756 Weighted average common shares outstanding – diluted 689,923,792 636,819,975 Net income per share: Basic $ 0.34 $ 0.06 Diluted $ 0.32 $ 0.06 |
EMPLOYEE BENEFIT PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLAN | EMPLOYEE BENEFIT PLANThe Company maintains a defined contribution 401(k) profit-sharing plan (the “401(k) Plan”) for eligible employees. Participants may make voluntary contributions up to the maximum amount allowable by law. The Company may make contributions to the 401(k) Plan on a discretionary basis. The Company has not made any employer contributions during the years ended December 31, 2021 and December 31, 2020. |
QUARTERLY INFORMATION (unaudite
QUARTERLY INFORMATION (unaudited) | 12 Months Ended |
Dec. 31, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY INFORMATION (unaudited) | QUARTERLY INFORMATION (unaudited) The following tables set forth our unaudited quarterly consolidated statements of operations data for each of the quarters indicated. The information for each quarter has been prepared on a basis consistent with our audited consolidated financial statements included elsewhere in this annual report and reflects, in the opinion of management, all adjustments of a normal, recurring nature that are necessary for the fair statement of results of operations for these periods.The net income per share data for the periods presented below gives effect to the Reorganization Transactions as described in Note 1 - Nature of Operations and Basis of Presentation. Our historical results are not necessarily indicative of the results that may be expected in the future and the results of a particular quarter or other interim period are not necessarily indicative of the results for a full year. Three months ended in thousands December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Net sales $ 166,498 $ 161,624 $ 152,124 $ 118,119 $ 93,195 $ 89,447 $ 55,260 $ 44,348 Cost of sales: Cost of product (excluding amortization) 32,695 32,462 29,324 22,073 17,375 24,569 21,186 33,481 Amortization of patented formulations 1,590 1,680 2,268 2,451 1,485 2,102 1,658 807 Total cost of sales 34,285 34,142 31,592 24,524 18,860 26,671 22,844 34,288 Gross profit 132,213 127,482 120,532 93,595 74,335 62,776 32,416 10,060 Operating expenses: Selling, general, and administrative 23,555 30,257 33,786 11,280 13,879 8,215 9,621 5,455 Amortization of other intangible assets 10,243 10,182 10,183 10,182 10,182 10,182 10,182 9,279 Acquisition costs — — — — — 488 — 16,011 Total operating expenses 33,798 40,439 43,969 21,462 24,061 18,885 19,803 30,745 Operating income (loss) 98,415 87,043 76,563 72,133 50,274 43,891 12,613 (20,685) Interest expense (15,096) (14,987) (15,563) (15,502) (10,068) (9,794) (10,072) (8,711) Other income (expense) , net Tax receivable agreement liability adjustment 3,615 — — — — — — — Other expense, net (595) (213) (157) (47) (35) (29) (93) (33) Total other income (expense) , net 3,020 (213) (157) (47) (35) (29) (93) (33) Income (loss) before provision (benefit) for income taxes 86,339 71,843 60,843 56,584 40,171 34,068 2,448 (29,429) Income tax provision (benefit) 17,028 15,252 11,492 11,053 6,783 5,753 413 (4,969) Net income (loss) $ 69,311 $ 56,591 $ 49,351 $ 45,531 $ 33,388 $ 28,315 $ 2,035 $ (24,460) Comprehensive income (loss) $ 69,311 $ 56,591 $ 49,351 $ 45,531 $ 33,388 $ 28,315 $ 2,035 $ (24,460) Net income (loss) per share: Basic $ 0.11 $ 0.09 $ 0.08 $ 0.07 $ 0.05 $ 0.04 $ — $ (0.04) Diluted $ 0.10 $ 0.08 $ 0.08 $ 0.07 $ 0.05 $ 0.04 $ — $ (0.04) Weighted average common shares outstanding: Basic 648,422,232 648,124,642 648,124,642 647,994,569 647,888,387 647,888,387 647,775,891 597,212,079 Diluted 692,863,933 690,711,782 656,745,557 656,268,316 655,736,276 653,036,893 647,775,891 597,212,079 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On February 23 , 2022, Olaplex, Inc. refinanced the 2020 Credit Agreement with a seven five The 2022 Credit Agreement replaced the Company’s Credit Agreement. See Note 9 - Long Term Debt for additional information. |
CONDENSED PARENT COMPANY FINANC
CONDENSED PARENT COMPANY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
CONDENSED PARENT COMPANY FINANCIAL INFORMATION | CONDENSED PARENT COMPANY FINANCIAL INFORMATION The condensed financial statements of Olaplex Holdings Inc. (parent company only) are presented below: OLAPLEX HOLDINGS, INC. SCHEDULE I - PARENT COMPANY CONDENSED BALANCE SHEET (amounts in thousands, except shares) December 31, 2021 Assets Investment in subsidiaries $ 761,076 Deferred income tax asset 197 Total assets $ 761,273 Liabilities and stockholders' equity Current Liabilities: Accrued expenses and other current liabilities $ 6,011 Current portion of Related Party payable pursuant to Tax Receivable Agreement 4,157 Total current liabilities 10,168 Due to affiliates 1,685 Related Party payable pursuant to Tax Receivable Agreement 225,122 Total liabilities 236,975 Stockholders' equity: Common stock, $0.001 par value per share; 2,000,000,000 shares authorized, 648,794,041 shares issued and outstanding as of December 31, 2021 648 Additional paid-in capital 461,456 Retained Earnings 62,194 Total stockholders' equity 524,298 Total liabilities and stockholders' equity $ 761,273 The accompanying notes are an integral part of Condensed Financial Information (Schedule I) OLAPLEX HOLDINGS, INC. SCHEDULE I- PARENT COMPANY CONDENSED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (amounts in thousands) For the Period Ended June 8, 2021 - December 31, 2021 Operating expenses: Selling, general, and administrative expenses $ 9,857 Stock compensation expenses 315 Total operating expenses 10,172 Other income Tax receivable agreement liability adjustment 3,615 Equity in undistributed earnings 67,531 Total other income 71,146 Income before benefit for income taxes 60,974 Income tax benefit 1,220 Net income 62,194 Comprehensive income $ 62,194 The accompanying notes are an integral part of Condensed Financial Information (Schedule I) OLAPLEX HOLDINGS, INC. SCHEDULE I - PARENT COMPANY CONDENSED STATEMENT OF CASH FLOWS (amounts in thousands) For the Period Ended June 8, 2021 - December 31, 2021 Cash flows from operating activities: Net income $ 62,194 Adjustments to reconcile net income to net cash from operations provided by operating activities: Equity in undistributed earnings (67,531) Tax receivable agreement liability adjustment (3,615) Share-based compensation expense 315 Deferred income tax asset (197) Changes in operating assets and liabilities, net of effects of acquisition: Accrued and other current liabilities 6,011 Net cash used in operating activities (2,823) Cash flows from financing activities: Advances from affiliates 1,685 Proceeds from exercise of stock options 1,138 Net cash provided by financing activities 2,823 Net increase (decrease) in cash and cash equivalents — Cash and cash equivalents - beginning of period — Cash and cash equivalents - end of period $ — Supplemental disclosure of noncash activities: Increase in Related Party payable pursuant to Tax Receivable Agreement $ 232,893 The accompanying notes are an integral part of Condensed Financial Information (Schedule I) OLAPLEX HOLDINGS INC. NOTES TO SCHEDULE 1. (amounts in thousands, except shares) 1. Basis of Presentation Olaplex Holdings was formed on June 8, 2021 as a Delaware corporation and is a holding company with no direct operations. Olaplex Holdings conducts substantially all of its operations through its investment in its wholly owned subsidiaries, Penelope and Olaplex, Inc. These statements should be read in conjunction with Olaplex Holdings consolidated financial statements and notes included elsewhere in this annual report on Form 10-K. There are significant restrictions over Olaplex Holdings ability to obtain funds from its subsidiaries through dividends, loans or advances as contained in the Company's Credit Agreement as defined herein. These condensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X, as the restricted net assets of Olaplex Holdings subsidiaries under the Credit Agreement exceeds 25 percent of the consolidated net assets of Olaplex Holdings. See Note 9 to the Company's consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Olaplex Holdings financial statements give effect to the IPO Reorganization Transactions as discussed in Note 1 of the consolidated financial statements on Form 10-K, for the exchange of all 960,184 units of Penelope Group Holdings, L.P. for an aggregate of 648,124,642 shares of common stock of Olaplex Holdings. The exchange is recorded as Additional paid in capital of $459,885, net of the tax receivable agreement amount of $232,893. Olaplex Holdings operations are reported from its June 8, 2021 inception date to December 31, 2021 and equity in undistributed earnings of Olaplex Holdings subsidiaries is reported in the Olaplex Holdings statement of operations and comprehensive income effective from the Reorganization Transactions dates. The fiscal year 2020 financial statements were not considered meaningful due to the formation of Olaplex Holdings on June 8, 2021. 2. Investment in subsidiaries Olaplex Holdings records its investment in subsidiaries under the equity method of accounting. Such investment is presented as "Investment in subsidiaries" on the condensed balance sheet and Olaplex Holdings share of the subsidiaries profits is presented as "Equity in undistributed earnings" on the condensed statement of operations. 3. Restricted net assets Olaplex Holdings’ subsidiaries are restricted in their ability to transfer certain of their net assets to Olaplex Holdings in the form of dividends, loans or advances under its Credit Agreement. The restricted net assets of Olaplex Holdings’ subsidiaries amount to $601,073 as of December 31, 2021. 4. Tax receivable agreement liability adjustment Tax receivable agreement liability adjustment reflects adjustments due to an update to the blended state income tax rate used to measure the related party payable pursuant to Tax Receivable Agreement. 5. Commitments and contingencies Olaplex Holdings is party to a tax receivable agreement with the Pre-IPO Stockholders that provides for the payment by Olaplex Holdings to the Pre-IPO Stockholders of 85% of the amount of any tax benefits that Olaplex Holdings actually realizes, or in some cases are deemed to realize, as a result of certain transactions. See Note 10 to the consolidated financial statements for more information regarding the tax receivable agreement. As of December 31, 2021, liabilities under the tax receivable agreement totaled $229,279, of which $4,157 is a current liability. See Note 14 to the consolidated financial statements for information regarding pending and threatened litigation. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Combination | Principles of Consolidation and Combination The 2021 and 2020 consolidated financial statements cover Olaplex, Inc. and its wholly owned subsidiary, Olaplex UK Limited, a private limited company incorporated in England and Wales. The accompanying 2021 and 2020 consolidated financial statements reflect the financial position, results of operations and comprehensive income, and cash flows of the Company and its wholly owned subsidiary on a consolidated basis. All intercompany account balances and transactions have been eliminated. |
Estimates and Assumptions | Estimates and Assumptions Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Examples of estimates and assumptions include: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, variable consideration, and other obligations such as product returns and refunds; loss contingencies; the fair value of share-based options and cash-settled units; the fair value of and/or potential impairment of goodwill and intangible assets for our reporting unit; useful lives of our tangible and intangible assets; allowance for promotions; estimated income tax and tax receivable payments; the net realizable value of, and demand for our inventory. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties. |
Cash and Cash Equivalents | Cash and Cash EquivalentsThe Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. The Company maintains cash balances at several high credit quality financial institutions. Accounts at these institutions are secured by the Federal Deposit Insurance Corporation (the “FDIC”). At times, such cash balances may be in excess of the $250 FDIC insurance limit. |
Accounts Receivable - net | Accounts Receivable – net Accounts receivable are recorded at net realizable value. The Company has recorded an allowance for reductions to prices for agreed-upon deductions, including allowances for advertising, damages, promotions, and returns. As of both December 31, 2021 and December 31, 2020, this promotional allowance was $8,231 and $1,362 respectively. As of December 31, 2021 and December 31, 2020, the Company did not have an allowance for doubtful accounts. In arriving at this conclusion, the Company evaluated historical losses, age of receivables, adverse situations that may affect a customer’s ability to repay and prevailing economic conditions. The Company has generally not experienced difficulties collecting from customers in a timely manner. |
Inventory | Inventory Inventory includes inventory that is saleable or usable in future periods and is stated at the lower of cost or net realizable value using the average cost method. Cost components include raw materials and finished goods. The finished goods are produced at third-party contract manufacturers. The Company allocates the amortized cost of its patented formulation to finished goods inventory. Management estimates an allowance for excess and obsolete inventory based on a calculation of excess on hand quantities of slow-moving inventory. As of December 31, 2021 and December 31, 2020, there was no allowance for excess and obsolete inventory. |
Business Combinations | Business Combinations Business combinations are accounted for under the acquisition method of accounting in accordance with FASB ASC 805, Business Combinations. Under the acquisition method of accounting, the total consideration transferred in connection with the acquisition is allocated to the tangible and intangible assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree based on their fair values. Goodwill acquired in connection with business combinations represents the excess of consideration transferred over the net tangible and identifiable intangible assets acquired. The acquired goodwill is deductible for income tax purposes. Certain assumptions and estimates are employed in evaluating the fair value of assets acquired and liabilities assumed. These estimates may be affected by factors such as changing market conditions, or changes in regulations governing the industry. The most significant assumptions requiring judgment involve identifying and estimating the fair value of intangible assets and the associated useful lives for establishing amortization periods. To finalize purchase accounting for significant acquisitions, the Company utilizes the services of independent valuation specialists to assist in the determination of the fair value of acquired tangible and intangible assets. The purchase price allocations for business combinations completed are prepared on a preliminary basis and changes to those allocations may occur as additional information becomes available about facts and circumstances that existed as of the acquisition date during the respective measurement period (up to one year from the respective acquisition date). Changes in the fair value of assets and liabilities recognized at fair value on the acquisition date that result from events that occur after the acquisition date are re-measured to fair value at future reporting dates with changes recognized in earnings. The Company includes the results of operations of the businesses acquired as of the acquisition dates. Costs that are incurred to complete the business combination such as legal and other professional fees are not considered part of consideration transferred and are charged to operating expenses as they are incurred. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill is calculated as the excess of the purchase consideration paid in the acquisition of a business over the fair value of the identifiable assets acquired and liabilities assumed. Goodwill is reviewed annually at the beginning of the fourth quarter for impairment, at the reporting unit level, or when there is evidence that events or changes in circumstances indicate that the Company’s carrying amount may not be recovered. A reporting unit is an operating segment or a component of an operating segment. When testing goodwill for impairment, the Company first assesses qualitative factors to evaluate whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount. If factors indicate that the fair value of the asset is less than its carrying amount, the Company will perform a quantitative test by determining the fair value of the reporting unit. The estimated fair value of the reporting unit is based on a projected discounted cash flow model that includes significant assumptions and estimates, including discount rate, growth rate, and future financial performance. Valuations of similar public companies may also be evaluated when assessing the fair value of the reporting unit. If the carrying value of the reporting unit exceeds the fair value, then an impairment loss is recognized for the difference. The Company manages its business on the basis of three operating segments that are aggregated into one reportable segment given the operating segments have similar economic characteristics, classes of consumers, products, production, distribution methods, and operate in the same regulatory environments. The reportable segment is used for the purposes of impairment testing. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived tangible and intangible assets with definite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Examples of such events include a significant disposal of a portion of such assets, an adverse change in the market involving the business employing the related asset, a significant decrease in the benefits realized from an acquired business, difficulties or delays in integrating the business, and a significant change in the operations of an acquired business. Recoverability of these assets is measured by comparison of their carrying amount to the future undiscounted cash flows the assets are expected to generate. Assets are grouped and evaluated at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of impairment. If the carrying amount of the asset exceeds expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value, generally measured by discounting expected future cash flows at the rate it utilizes to evaluate potential investments. No tangible and intangible asset impairment was recorded for fiscal years ended December 31, 2021 and December 31, 2020. Fair value measurements are based on significant inputs that are not observable in the market and therefore represent a Level 3 measurement. Significant changes in the underlying assumptions used to value long-lived assets could significantly increase or decrease the fair value estimates used for impairment assessments. |
Debt Issuance Costs | Debt Issuance CostsOriginal issue discount costs and third-party issue costs incurred in connection with the issuance of long-term debt are deferred and amortized over the life of the associated debt instrument on a straight-line basis, in a manner that approximates the effective interest method. To the extent that the debt is outstanding, these amounts are reflected in the consolidated balance sheets as direct deductions from the long-term debt. |
Property and Equipment | Property and Equipment Property and equipment are stated at historical cost net of accumulated depreciation. The cost of assets sold or retired, and the related accumulated depreciation, are removed from the accounts at the time of disposition, and any resulting gain or loss is reflected in operating results for the period. |
Deferred Revenue | Deferred Revenue Amounts received from international customers in the form of cash pre-payments to purchase goods are recorded as deferred revenue for contract liabilities until the goods are shipped. Unredeemed gift cards are recorded as deferred revenue. Deferred revenue balance was $5,022 and $2,314 as of December 31, 2021 and December 31, 2020, respectively ( see Note 8 to the consolidated financial statements). Customer pre-payments and gift cards are included as accrued expenses and other current liabilities. Deferred revenue is included as accrued expenses and other current liabilities on the accompanying Consolidated Balance Sheets |
Foreign Currency Transactions | Foreign Currency TransactionsAssets and liabilities denominated in foreign currencies are converted to the functional currency at the applicable current rates, including the Company’s subsidiary, Olaplex UK, whose functional currency is in US dollars. All revenues and expenses associated with foreign currencies are converted at the rates of exchange prevailing when such transactions occur. The resulting exchange loss or gain is reflected in foreign currency exchange loss or gain recorded in other expense, net in the accompanying statements of operations and comprehensive loss. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements established a framework for measuring fair value and established a three-level valuation hierarchy for disclosure of fair value measurements as follows: Level 1 —Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. The Company’s Level 1 assets consist of its marketable securities. Level 2 —Observable quoted prices for similar assets or liabilities in active markets and observable quoted prices for identical assets or liabilities in markets that are not active. Level 3 —Unobservable inputs that are not corroborated by market data. Cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are reflected at carrying value, which approximates fair value due to the short-term maturity. The Company’s long-term debt is recorded at its carrying value in the consolidated balance sheets, which may differ from fair value. The gross carrying amount of the Company’s long-term debt, before reduction of the debt issuance costs, approximates its fair values as the stated rate approximates market rates for loans with similar terms as of December 31, 2021 and December 31, 2020. |
Segment Reporting | Segment Reporting Operating segments are components of an enterprise for which separate financial information is available that is evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Utilizing this criteria, the Company manages its business on the basis of three operating segments that are aggregated into one reportable segment given the operating segments have similar economic characteristics, classes of consumers, products, production, distribution methods, and operate in similar regulatory environments. |
Revenue Recognition, Cost of Sales, Marketing and Advertising and Shipping and Fulfillment | Revenue Recognition The Company derives its revenue through the sale of its specialty hair care products. The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, which provides a five-step model for recognizing revenue from contracts with customers as follows: • Identify the contract with a customer • Identify the performance obligations in the contract • Determine the transaction price • Allocate the transaction price to the performance obligations in the contract • Recognize revenue when or as performance obligations are satisfied The Company recognizes revenue in the amount that reflects the consideration that the Company expects that it will be entitled to in exchange for transferring goods to its customers. Net sales are comprised of the transaction price from sales of products less expected allowances, including allowances for advertising, damages, promotions, discounts, and return rights. These provisions are estimated based on agreed-upon terms and the Company’s historical experience and are recorded as a reduction to sales and accounts receivable in the same period the related sales are recorded. The Company experienced immaterial returns during the years ended December 31, 2021 and December 31, 2020. Revenue is recognized when performance obligations are satisfied through the transfer of control of promised goods to the customers based on the terms of sale. The transfer of control typically occurs at a point in time based on consideration of when the customer has an obligation to pay for the goods, and physical possession of, legal title to, and the risks and rewards of ownership of the goods has been transferred to the customer. Generally, revenue from sales of merchandise to customers are recognized at a point in time, based on customer agreements and is recorded in the period the product is shipped or delivered in accordance with the shipping terms. For the Company’s Olaplex.com website transactions, revenue is recognized upon delivery to customers. The Company’s professional and retail distributors consist of local and international customers. Payments from international customers are due in advance. The Company records deferred revenue for contract liabilities from contracts with customers in which the customer prepays for the order. US-based customers billings are invoiced and typically due within days set per the internal policy. The Company has elected to account for shipping and handling as fulfillment activities and not as a separate performance obligation. As of December 31, 2021 and December 31, 2020, other than accounts receivable, the Company has no material contract assets. The Company has contract liabilities of $5,022 consisting of customer transit orders, deposits, and unredeemed gift cards with opening contract liabilities of $2,314 recognized as net sales in 2021. The Company has contract liabilities of $2,314 consisting of customer transit orders, deposits, and unredeemed gift cards with opening contract liabilities of $1,181 recognized as net sales in 2020. Sales tax, when applicable, that is collected in connection with revenue transactions is withheld and remitted to the respective taxing authorities. Shipping and fulfillment costs charged to customers are included as revenue in total net sales. Shipping costs incurred by the Company to ship between third-party manufacturers and warehouses are capitalized to inventory and included in cost of sales. Shipping and fulfillment costs incurred by the Company to ship to customers are included in selling, general, and administrative expenses. The Company elected to record revenue net of sales and excise taxes collected by customers, all of which the Company has the primary responsibility to pay and remit to taxing authorities. Taxes are excluded from the transaction price. The Company elected not to disclose revenue related to remaining performance obligations for partially completed or unfulfilled contracts that are expected to be fulfilled within one year as such amounts are deemed to be insignificant. Cost of Sales Cost of sales includes the aggregate costs to procure the Company’s products, including the amounts invoiced by third-party contract manufacturers and suppliers for finished goods, as well as costs related to transportation to distribution centers, amortization of the patented formulations, and amortization of the fair value step-up of inventory. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general, and administrative (“SG&A”) expenses primarily consist of personnel-related expenses, including salaries, bonuses, fringe benefits and share-based compensation expense, marketing and digital expenses, warehousing, fulfillment, and distribution costs, costs related to merchandising, product development costs, and depreciation of property and equipment. |
Income Taxes | Income Taxes The Company uses the asset and liability approach for financial accounting and reporting for income taxes. The provision for income taxes includes Federal, and state income taxes currently payable or receivable and those deferred because of temporary differences between the financial statement and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which those temporary differences are expected to be recovered or settled. The Company recognizes deferred tax assets to the extent it believes the assets are more likely than not to be realized. Valuation allowances are established when necessary, to reduce deferred tax assets to the amount expected to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and the results of recent operations. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are 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, if any, associated with tax matters (including UTPs) as part of the income tax provision and includes accrued interest and penalties with the related tax liability in the Company’s consolidated balance sheet. |
Concentrations of Risk | Concentrations of Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents. Although the Company deposits its cash with creditworthy financial institutions, its deposits, at times, may exceed federally insured limits. To date, the Company has not experienced any losses on it cash deposits. |
Share-Based Compensation | Share-Based Compensation Share-based compensation options granted to employees, non-employees and directors are measured at fair value at the respective grant dates and recognized as share-based compensation expense. Share-based compensation expense equal to the fair value of time-based service options that are expected to vest is estimated using the Black-Scholes model and recorded over the period the grants are earned, which is the requisite service period. |
Investment in Nonconsolidated Entity | Investment in Nonconsolidated Entity The Company uses the cost method to account for its equity investment for which these equity securities do not have readily determinable fair values and for which the Company does not have the ability to exercise significant influence. Under the cost method of accounting, the Company’s investment is carried at cost and is adjusted only for other-than-temporary declines in fair value, additional investments, plus or minus changes from observable price changes in orderly transactions or distributions deemed to be a return of capital. Earnings from cost method investments are recorded in the statement of operations and comprehensive income under other income. There are no earnings or fair value adjustments recorded to date. |
Tax Receivable Agreement | Tax Receivable Agreement As part of the IPO, we entered into the Tax Receivable Agreement under which generally we will be required to pay to the Pre-IPO Stockholders 85% of the cash savings, if any, in U.S. federal, state or local tax that we actually realize on our taxable income following the IPO (or are deemed to realize in certain circumstances) as a result of (i) certain existing tax attributes, including tax basis in intangible assets and capitalized transaction costs relating to taxable years ending on or before the date of the IPO (calculated by assuming the taxable year of the relevant entity closes on the date of the IPO), that are amortizable over a fixed period of time (including in tax periods beginning after the IPO) and which are available to us and our wholly-owned subsidiaries, and (ii) tax benefits attributable to payments made under the Tax Receivable Agreement, together with interest accrued at a rate equal to LIBOR (“London Interbank Offered Rate”) (or if LIBOR ceases to be published, a replacement rate with similar characteristics) plus 3% from the date the applicable tax return is due (without extension) until paid. Under the Tax Receivable Agreement, generally we will retain the benefit of the remaining 15% of the applicable tax savings. |
Recently Adopted Accounting Pronouncements and Recent Accounting Guidance Not Yet Adopted | Recently Adopted Accounting Pronouncements The Company is an “emerging growth company” and as an emerging growth company, the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable 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 the Company (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, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies. In February 2016, the Financial Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” The guidance in this ASU supersedes the leasing guidance in “Leases (Topic 840).” Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for the Company fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company adopted this accounting standard on January 1, 2022. Adoption of this standard did not have a material impact on its consolidated financial statements. Recent Accounting Guidance Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The FASB has issued multiple updates to ASU 2016-13 as codified in Topic 326, including ASUs 2019-04, 2019-05, 2019-10, 2019-11, 2020-02, and 2020-03. These ASUs have provided for various minor technical corrections and improvements to the codification as well as other transition matters. The amendments in the ASU are effective for the Company for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early application of the amendments is permitted. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides an optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation of the LIBOR, regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. The ASU can be adopted no later than December 31, 2022 with early adoption permitted. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements and related disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The following provides a summary of the estimated useful lives by category of asset. Brand name 25 years Customer relationships 20 years Patented formulations 15 years Software 3 years |
Property, Plant and Equipment | Estimated useful lives of the Company’s assets are as follows: Molds 3-5 years Motor Vehicles 5 years Furniture and fixtures 3-7 years |
NET SALES (Tables)
NET SALES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | As such, the Company’s three business channels consist of professional, specialty retail and DTC as follows: For the Twelve Months Ended December 31, 2021 December 31, 2020 Net sales by Channel: Professional $ 259,009 $ 156,199 Specialty retail 175,799 50,718 DTC 163,557 75,333 Total Net sales $ 598,365 $ 282,250 For the Twelve Months Ended December 31, 2021 December 31, 2020 Net sales by Geography: United States $ 344,656 $ 149,272 International 253,709 132,978 Total Net sales $ 598,365 $ 282,250 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventory as of December 31, 2021 and December 31, 2020 consisted of the following: December 31, 2021 December 31, 2020 Raw materials $ 20,852 $ 7,773 Finished goods 77,547 25,823 Inventory $ 98,399 $ 33,596 |
INVESTMENT IN NONCONSOLIDATED_2
INVESTMENT IN NONCONSOLIDATED ENTITY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Securities without Readily Determinable Fair Value | Our investment is classified as a long-term asset in our consolidated balance sheet and consists of the following: December 31, 2021 December 31, 2020 Capital contributions, net of distributions and impairments $ 4,500 $ — Total investments in and advances to nonconsolidated affiliate $ 4,500 $ — |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | Information regarding the net cash consideration paid and fair value of the assets and liabilities assumed at the Acquisition Date is as follows: Fair value of assets acquired $ 1,216,259 Goodwill 168,300 Fair value of liabilities assumed (2,977) Net cash paid for acquisition $ 1,381,582 Purchase price is comprised of: Cash, net of acquired cash $ 1,381,582 Net cash paid for acquisition $ 1,381,582 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Allocation of purchase price: Net tangible assets (liabilities): Inventory $ 61,262 Accounts receivable and other current assets 7,595 Deferred tax assets 6,402 Liabilities (2,977) Net tangible assets 72,282 Identifiable intangible assets: Brand name 952,000 Product formulations 136,000 Customer relationships 53,000 Total identifiable intangible assets 1,141,000 Goodwill 168,300 Net assets acquired $ 1,381,582 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Goodwill and intangible assets are comprised of the following: December 31, 2021 Estimated Gross Carrying Accumulated Net carrying amount Brand name 25 years $ 952,000 $ (75,314) $ 876,686 Product formulations 15 years 136,000 (17,932) 118,068 Customer relationships 20 years 53,000 (5,241) 47,759 Software 3 years 890 (59) 831 Total finite-lived intangibles 1,141,890 (98,546) 1,043,344 Goodwill Indefinite 168,300 168,300 Total goodwill and other intangibles $ 1,310,190 $ (98,546) $ 1,211,644 December 31, 2020 Estimated Gross Accumulated Net carrying amount Brand name 25 years $ 952,000 $ (37,234) $ 914,766 Product formulations 15 years 136,000 (8,865) 127,135 Customer relationships 20 years 53,000 (2,591) 50,409 Total finite-lived intangibles 1,141,000 (48,690) 1,092,310 Goodwill Indefinite 168,300 — 168,300 Total goodwill and other intangibles $ 1,309,300 $ (48,690) $ 1,260,610 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated future amortization expense related to the finite-lived intangible assets as of December 31, 2021, is as follows: Year ending December 31 2022 $ 50,152 2023 $ 50,152 2024 $ 49,916 2025 $ 49,797 2026 $ 49,797 Thereafter $ 793,530 Total $ 1,043,344 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses as of December 31, 2021 and December 31, 2020 consisted of the following: December 31, 2021 December 31, 2020 Deferred revenue $ 5,022 $ 2,314 Accrued sales and income taxes 12,144 3,100 Accrued other 6,008 2,931 Payroll liabilities 6,302 1,517 Accrued expenses and other current liabilities $ 29,476 $ 9,862 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Debt consisted of the following on December 31, 2021: January 2020 Credit December 2020 Amendment Total Long-term debt Original term loan borrowing $ 430,312 $ 338,923 $ 769,235 Debt issuance costs (6,986) (4,047) (11,033) Total term loan debt 423,326 334,876 758,202 Less: Current portion (11,250) (8,862) (20,112) Long-term debt, net of current portion $ 412,076 $ 326,014 $ 738,090 Debt consisted of the following on December 31, 2020: January 2020 December 2020 Amendment Total Long-term debt Original term loan borrowing $ 441,562 $ 347,785 $ 789,347 Debt issuance costs (8,810) (5,054) (13,864) Total term loan debt 432,752 342,731 775,483 Less: Current portion (11,250) (8,862) (20,112) Long-term debt, net of current portion $ 421,502 $ 333,869 $ 755,371 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | The Company’s breakdown of its income before provision for income taxes for the years ended December 31, 2021 and 2020 is as follows: December 31, 2021 December 31, 2020 United States $ 275,554 $ 47,221 Foreign 55 37 Total income before taxes $ 275,609 $ 47,258 |
Schedule of Components of Income Tax Expense (Benefit) | The components of the provision for (benefit from) income taxes were as follows: December 31, 2021 December 31, 2020 Current provision: Federal $ 44,660 $ 11,314 State & Local 7,668 1,079 Foreign 11 15 Total current provision 52,339 12,408 Deferred provision: Federal 2,772 (4,204) State & Local (286) (224) Foreign — — Total deferred provision 2,486 (4,428) Total provision for income taxes $ 54,825 $ 7,980 |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities are as follows: Deferred Tax Assets: December 31, 2021 December 31, 2020 Inventory adjustments $ 661 $ 258 Capitalized transaction costs 3,016 3,218 Deferred revenue 1,061 172 Accrued expenses and other current liabilities 3,102 637 Share-based compensation 397 321 Intangible assets 6,410 8,549 Total Deferred Tax Assets 14,647 13,155 Deferred Tax Liabilities: Goodwill 4,675 2,264 Other current assets 1,256 61 Fixed assets 372 — Total Deferred Tax Liabilities 6,303 2,325 Net Deferred Tax Assets $ 8,344 $ 10,830 |
Schedule of Effective Income Tax Rate Reconciliation | The following table provides a reconciliation between the U.S. federal statutory rate and the Company’s effective tax rates for the years ended December 31, 2021 and 2020: December 31, 2021 December 31, 2020 U.S. federal statutory income tax rate 21.0 % 21 % Foreign derived intangible income deduction (3.0) % (5.2) % State and local income taxes, net of federal benefit 2.6 % 1.8 % Share based compensation (1.2) % — % Other 0.5 % (0.7) % Effective Tax Rate 19.9 % 16.9 % |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement, Option, Activity | The following table summarizes the activity for options that vest solely based upon the satisfaction of a time-based service condition shown on a converted basis to reflect the Reorganization Transactions for all periods as follows: Year Ended December 31, 2021 Year Ended December 31, 2020 Options Weighted Average Aggregate intrinsic value Weighted Average Contractual Term (Years) Options Weighted Average Aggregate intrinsic value Weighted Average Contractual Term (Years) Beginning balance 15,997,500 $ 0.88 $ 26,780 10 — $ — $ — Granted 3,077,783 6.17 15,997,500 0.88 Cancelled/Forfeited (1,417,980) 2.10 — — Converted Performance to Time-Based 25,363,800 0.92 — — Exercised (333,585) $ 1.49 $ 8,138 10 — $ — Outstanding 42,687,518 $ 1.24 $ 798,404 10 15,997,500 $ 0.88 $ 26,780 10 Vested and Exercisable 2,595,915 $ 0.80 $ 73,553 10 — $ — — The following table summarizes the activity for options that vest based upon the satisfaction of a performance condition as follows: Year Ended December 31, 2021 Year Ended December 31, 2020 Options Weighted Average Aggregate Intrinsic Value Weighted Average Contractual Term (Years) Options Weighted Average Aggregate intrinsic value Weighted Average Contractual Term (Years) Beginning balance 28,732,050 $ 0.81 $ 50,183 10 — $ — $ — Granted 1,959,525 3.19 28,732,050 0.81 Cancelled/Forfeited (1,012,500) 0.97 — — Converted Performance to Time-Based (25,363,800) 0.92 — — Exercised (335,814) $ 1.91 $ 8,686 10 — $ — Outstanding 3,979,461 $ 1.17 $ 111,278 10 28,732,050 $ 0.81 $ 50,183 10 Vested and Exercisable 3,979,461 $ 1.17 $ 111,278 10 — $ — — |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | Additional information relating to time-based service options is as follows: Year Ended December 31, December 31, Share-based compensation expense $ 2,101 $ 1,098 Weighted-average grant date fair value of options granted (per share) $ 0.73 $ 0.54 Additional information relating to performance-based options is as follows: Year Ended December 31, December 31, Share-based compensation expense $ 1,705 $ 429 Weighted-average grant date fair value of options granted (per share) $ 0.13 $ 0.09 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of time-based options granted were calculated using the following assumptions: Year Ended December 31, December 31, Expected term (years) 6.25 - 7.00 6.50 Expected volatility (%) 25 - 30 30 Risk-free interest rate (%) 1.07 - 1.62 0.37 - 1.87 Expected dividend yield (%) — — Year Ended December 31, December 31, Expected term (years) 0.40 4.00 Expected volatility (%) 30 30 Risk-free interest rate (%) 1.48 - 1.62 1.87 Expected dividend yield (%) 49 — |
Schedule of Cash-Settled Units | The following table summarizes the activity for units that vest based upon the satisfaction of time and performance-based conditions as follows: Year Ended December 31, 2021 Time-based Performance-based Outstanding at Beginning balance — — Granted 684,450 526,500 Vested and redeemed — (159,300) Cancelled/Forfeited (87,750) (60,750) Outstanding at Ending balance 596,700 306,450 The unrecognized compensation expense for converted cash-settled units was calculated using the following assumptions: Year Ended December 31, 2021 Stock Price at December 31, 2021 $ 29.13 Exercise Price per Unit $ 2.97 Intrinsic Value per Unit $ 26.16 Converted Units 306,450 |
Cash-Settled Units, Valuation Assumptions | The fair value of time-based cash-settled units granted were calculated using the following assumptions: Year Ended December 31, 2021 Expected term (years) 2.56 Expected volatility (%) 30 Risk-free interest rate (%) 0.85 Expected dividend yield (%) — |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a reconciliation of the numerator and denominator in the basic and diluted net income per common share computations: Year Ended December 31, December 31, Numerator: Net Income $ 220,784 $ 39,278 Denominator: Weighted average common shares outstanding – basic 648,166,472 635,386,219 Dilutive common equivalent shares from equity options 41,757,320 1,433,756 Weighted average common shares outstanding – diluted 689,923,792 636,819,975 Net income per share: Basic $ 0.34 $ 0.06 Diluted $ 0.32 $ 0.06 |
QUARTERLY INFORMATION (unaudi_2
QUARTERLY INFORMATION (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | The following tables set forth our unaudited quarterly consolidated statements of operations data for each of the quarters indicated. The information for each quarter has been prepared on a basis consistent with our audited consolidated financial statements included elsewhere in this annual report and reflects, in the opinion of management, all adjustments of a normal, recurring nature that are necessary for the fair statement of results of operations for these periods.The net income per share data for the periods presented below gives effect to the Reorganization Transactions as described in Note 1 - Nature of Operations and Basis of Presentation. Our historical results are not necessarily indicative of the results that may be expected in the future and the results of a particular quarter or other interim period are not necessarily indicative of the results for a full year. Three months ended in thousands December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Net sales $ 166,498 $ 161,624 $ 152,124 $ 118,119 $ 93,195 $ 89,447 $ 55,260 $ 44,348 Cost of sales: Cost of product (excluding amortization) 32,695 32,462 29,324 22,073 17,375 24,569 21,186 33,481 Amortization of patented formulations 1,590 1,680 2,268 2,451 1,485 2,102 1,658 807 Total cost of sales 34,285 34,142 31,592 24,524 18,860 26,671 22,844 34,288 Gross profit 132,213 127,482 120,532 93,595 74,335 62,776 32,416 10,060 Operating expenses: Selling, general, and administrative 23,555 30,257 33,786 11,280 13,879 8,215 9,621 5,455 Amortization of other intangible assets 10,243 10,182 10,183 10,182 10,182 10,182 10,182 9,279 Acquisition costs — — — — — 488 — 16,011 Total operating expenses 33,798 40,439 43,969 21,462 24,061 18,885 19,803 30,745 Operating income (loss) 98,415 87,043 76,563 72,133 50,274 43,891 12,613 (20,685) Interest expense (15,096) (14,987) (15,563) (15,502) (10,068) (9,794) (10,072) (8,711) Other income (expense) , net Tax receivable agreement liability adjustment 3,615 — — — — — — — Other expense, net (595) (213) (157) (47) (35) (29) (93) (33) Total other income (expense) , net 3,020 (213) (157) (47) (35) (29) (93) (33) Income (loss) before provision (benefit) for income taxes 86,339 71,843 60,843 56,584 40,171 34,068 2,448 (29,429) Income tax provision (benefit) 17,028 15,252 11,492 11,053 6,783 5,753 413 (4,969) Net income (loss) $ 69,311 $ 56,591 $ 49,351 $ 45,531 $ 33,388 $ 28,315 $ 2,035 $ (24,460) Comprehensive income (loss) $ 69,311 $ 56,591 $ 49,351 $ 45,531 $ 33,388 $ 28,315 $ 2,035 $ (24,460) Net income (loss) per share: Basic $ 0.11 $ 0.09 $ 0.08 $ 0.07 $ 0.05 $ 0.04 $ — $ (0.04) Diluted $ 0.10 $ 0.08 $ 0.08 $ 0.07 $ 0.05 $ 0.04 $ — $ (0.04) Weighted average common shares outstanding: Basic 648,422,232 648,124,642 648,124,642 647,994,569 647,888,387 647,888,387 647,775,891 597,212,079 Diluted 692,863,933 690,711,782 656,745,557 656,268,316 655,736,276 653,036,893 647,775,891 597,212,079 |
CONDENSED PARENT COMPANY FINA_2
CONDENSED PARENT COMPANY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Balance Sheet | SCHEDULE I - PARENT COMPANY CONDENSED BALANCE SHEET (amounts in thousands, except shares) December 31, 2021 Assets Investment in subsidiaries $ 761,076 Deferred income tax asset 197 Total assets $ 761,273 Liabilities and stockholders' equity Current Liabilities: Accrued expenses and other current liabilities $ 6,011 Current portion of Related Party payable pursuant to Tax Receivable Agreement 4,157 Total current liabilities 10,168 Due to affiliates 1,685 Related Party payable pursuant to Tax Receivable Agreement 225,122 Total liabilities 236,975 Stockholders' equity: Common stock, $0.001 par value per share; 2,000,000,000 shares authorized, 648,794,041 shares issued and outstanding as of December 31, 2021 648 Additional paid-in capital 461,456 Retained Earnings 62,194 Total stockholders' equity 524,298 Total liabilities and stockholders' equity $ 761,273 |
Condensed Income Statement | SCHEDULE I- PARENT COMPANY CONDENSED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (amounts in thousands) For the Period Ended June 8, 2021 - December 31, 2021 Operating expenses: Selling, general, and administrative expenses $ 9,857 Stock compensation expenses 315 Total operating expenses 10,172 Other income Tax receivable agreement liability adjustment 3,615 Equity in undistributed earnings 67,531 Total other income 71,146 Income before benefit for income taxes 60,974 Income tax benefit 1,220 Net income 62,194 Comprehensive income $ 62,194 |
Condensed Cash Flow Statement | SCHEDULE I - PARENT COMPANY CONDENSED STATEMENT OF CASH FLOWS (amounts in thousands) For the Period Ended June 8, 2021 - December 31, 2021 Cash flows from operating activities: Net income $ 62,194 Adjustments to reconcile net income to net cash from operations provided by operating activities: Equity in undistributed earnings (67,531) Tax receivable agreement liability adjustment (3,615) Share-based compensation expense 315 Deferred income tax asset (197) Changes in operating assets and liabilities, net of effects of acquisition: Accrued and other current liabilities 6,011 Net cash used in operating activities (2,823) Cash flows from financing activities: Advances from affiliates 1,685 Proceeds from exercise of stock options 1,138 Net cash provided by financing activities 2,823 Net increase (decrease) in cash and cash equivalents — Cash and cash equivalents - beginning of period — Cash and cash equivalents - end of period $ — Supplemental disclosure of noncash activities: Increase in Related Party payable pursuant to Tax Receivable Agreement $ 232,893 |
NATURE OF OPERATIONS AND BASI_2
NATURE OF OPERATIONS AND BASIS OF PRESENTATION - Narrative (Details) | Oct. 08, 2021USD ($)$ / sharesshares | Oct. 04, 2021USD ($)$ / sharesshares | Oct. 03, 2021dayshares | Sep. 29, 2021shares | Jan. 08, 2020USD ($) | Dec. 31, 2021 |
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Reorganization share issuance (Note 12) (shares) | 648,124,642 | 648,124,642 | ||||
Options converted in period, number of shares | 46,923,300 | |||||
Tax receivable agreement, percent of savings for holders | 85.00% | 85.00% | ||||
Reorganization, conversion ratio | 0.00148 | |||||
Time-Based Cash-Settled Units Converted Into Time-Based Cash-Settled Units | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Deferred compensation arrangement with individual, converted in period, number of units | 621,000 | |||||
Performance-Based Cash-Settled Units Converted Into Time-Based Cash-Settled Units | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Deferred compensation arrangement with individual, converted in period, number of units | 318,600 | |||||
Time-based cash settled units | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Deferred compensation arrangement with individual, converted in period, number of units | 621,000 | |||||
Threshold consecutive trading days | day | 30 | |||||
Performance-Based Cash-Settled Units Converted Into Vested Cash-Settled Units | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Deferred compensation arrangement with individual, converted in period, number of units | 159,300 | |||||
Share-based Payment Arrangement, Tranche One | Performance-Based Cash-Settled Units Converted Into Time-Based Cash-Settled Units | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Vesting percentage | 33.33% | |||||
Share-based Payment Arrangement, Tranche One | Time-based cash settled units | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Vesting percentage | 20.00% | |||||
Share-based Payment Arrangement, Tranche Two | Performance-Based Cash-Settled Units Converted Into Time-Based Cash-Settled Units | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Vesting percentage | 33.33% | |||||
Share-based Payment Arrangement, Tranche Two | Time-based cash settled units | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Vesting percentage | 20.00% | |||||
Share-based Payment Arrangement, Tranche Three | Performance-Based Cash-Settled Units Converted Into Time-Based Cash-Settled Units | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Vesting percentage | 33.33% | |||||
Share-based Payment Arrangement, Tranche Three | Time-based cash settled units | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Vesting percentage | 20.00% | |||||
Limited Partners Of Penelope Group Holdings, L.P | Penelope Group Holdings GP II | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Ownership interest, percentage | 100.00% | |||||
Limited Partners Of Penelope Group Holdings, L.P | Penelope Group GP II | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Reorganization, equity interests contributed, percent | 100.00% | |||||
Limited Partners Of Penelope Group Holdings, L.P | Penelope Group Holdings, L.P | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Reorganization, equity interests contributed, percent | 100.00% | |||||
Olaplex Holdings and Olaplex Intermediate, Inc. | Penelope Group GP II | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Reorganization, equity interests contributed, percent | 100.00% | |||||
Olaplex Holdings and Olaplex Intermediate, Inc. | Penelope Group Holdings, L.P | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Reorganization, equity interests contributed, percent | 100.00% | |||||
Penelope Group Holdings | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Conversion of stock, shares converted | 960,184 | |||||
Vested Time-Based Options Converted Into Vested Options | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Options converted in period, number of shares | 2,929,500 | |||||
Vested Time-Based Options Converted Into Time-Based Options | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Options converted in period, number of shares | 14,314,725 | |||||
Vested Performance-Based Options Converted Into Vested Options | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Options converted in period, number of shares | 4,315,275 | |||||
Performance Based Options Converted Into Time-Based Option | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Options converted in period, number of shares | 25,363,800 | |||||
IPO | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Sale of stock, number of shares issued in transaction | 73,700,000 | |||||
Sale of stock, price per share (usd per share) | $ / shares | $ 21 | |||||
Sale of stock, consideration received on transaction | $ | $ 1,466,446,000 | |||||
Over-Allotment Option | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Sale of stock, number of shares issued in transaction | 11,055,000 | |||||
Sale of stock, price per share (usd per share) | $ / shares | $ 21 | |||||
Sale of stock, consideration received on transaction | $ | $ 219,967,000 | |||||
Olaplex LLC. | ||||||
Nature of Operations and Basis of Presentation [Line Items] | ||||||
Business acquisition, percentage of voting interests acquired | 100.00% | |||||
Business combination, consideration transferred | $ | $ 1,381,582,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Thousands | Oct. 04, 2021 | Oct. 03, 2021 | Dec. 31, 2021USD ($) | Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) |
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Cash and cash equivalents | $ 186,388 | $ 10,964 | $ 186,388 | $ 10,964 | ||||||||
Accounts receivable, allowance for credit losses | 8,231 | 1,362 | 8,231 | 1,362 | ||||||||
Debt issuance costs | 11,033 | 13,864 | 11,033 | 13,864 | ||||||||
Deferred revenue | 5,022 | 2,314 | 5,022 | 2,314 | ||||||||
Customer pre-payments and unredeemed gift cards | 5,022 | 5,022 | ||||||||||
Contract with customer, liability, revenue recognized | 2,314 | 1,181 | ||||||||||
Foreign exchange losses | $ 1,027 | 129 | ||||||||||
Stock issuance costs | $ 8,488 | |||||||||||
Number of operating segments | segment | 3 | |||||||||||
Number of reportable segments | segment | 1 | |||||||||||
Marketing and advertising expense | $ 11,137 | 2,521 | ||||||||||
Cost of product (excluding amortization) | $ 32,695 | $ 32,462 | $ 29,324 | $ 22,073 | $ 17,375 | $ 24,569 | $ 21,186 | $ 33,481 | 116,554 | 96,611 | ||
Tax receivable agreement, percent of savings for holders | 85.00% | 85.00% | ||||||||||
Tax receivable agreement, percent of tax benefits retained by company | 15.00% | |||||||||||
Shipping and Fulfillment | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Cost of product (excluding amortization) | $ 12,183 | $ 4,126 | ||||||||||
Revenue Benchmark | Customer Concentration Risk | Three Customers | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Concentration risk, percentage | 33.00% | 31.00% | ||||||||||
Inventory Benchmark | Supplier Concentration Risk | Three Vendors | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Concentration risk, percentage | 73.00% | 79.00% | ||||||||||
Accounts Payable Benchmark | Supplier Concentration Risk | Three Vendors | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Concentration risk, percentage | 68.00% | 52.00% | ||||||||||
Accounts Receivable | Customer Concentration Risk | Three Customers | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Concentration risk, percentage | 42.00% | 45.00% | ||||||||||
London Interbank Offered Rate (LIBOR) | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Tax receivable agreement, variable rate on basis spread | 3.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Finite Lived Intangible Assets (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Brand name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 25 years | 25 years |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 20 years | 20 years |
Product formulations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 15 years | 15 years |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Useful Life of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Molds | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Property and equipment, useful life | 3 years |
Molds | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Property and equipment, useful life | 5 years |
Motor Vehicles | |
Finite-Lived Intangible Assets [Line Items] | |
Property and equipment, useful life | 5 years |
Furniture and fixtures | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Property and equipment, useful life | 3 years |
Furniture and fixtures | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Property and equipment, useful life | 7 years |
NET SALES - Disaggregation of R
NET SALES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | $ 166,498 | $ 161,624 | $ 152,124 | $ 118,119 | $ 93,195 | $ 89,447 | $ 55,260 | $ 44,348 | $ 598,365 | $ 282,250 |
United States | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 344,656 | 149,272 | ||||||||
International | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 253,709 | 132,978 | ||||||||
Professional | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 259,009 | 156,199 | ||||||||
Specialty retail | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | 175,799 | 50,718 | ||||||||
DTC | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Net sales | $ 163,557 | $ 75,333 |
NET SALES - Narrative (Details)
NET SALES - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
United Kingdom | Geographic Concentration Risk | Revenue Benchmark | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 14.00% | 17.00% |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 20,852 | $ 7,773 |
Finished goods | 77,547 | 25,823 |
Inventory | $ 98,399 | $ 33,596 |
INVESTMENT IN NONCONSOLIDATED_3
INVESTMENT IN NONCONSOLIDATED ENTITY - Schedule of Investments in and Advances to Affiliates, Schedule of Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Equity Method Investments and Joint Ventures [Abstract] | ||
Capital contributions, net of distributions and impairments | $ 4,500 | $ 0 |
Total investments in and advances to nonconsolidated affiliate | $ 4,500 | $ 0 |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - USD ($) $ in Thousands | Jan. 08, 2020 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||||||||||
Payments to acquire business, net of cash acquired | $ 0 | $ 1,381,582 | |||||||||
Acquisition costs | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 488 | $ 0 | $ 16,011 | $ 0 | $ 16,499 | |
Olaplex LLC. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Business acquisition, percentage of voting interests acquired | 100.00% | ||||||||||
Payments to acquire business, net of cash acquired | $ 1,381,582 | ||||||||||
Acquired finite-lived intangible assets, weighted average useful life | 23 years 7 months 6 days | ||||||||||
Olaplex LLC. | Brand name | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life | 25 years | ||||||||||
Olaplex LLC. | Product formulations | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life | 15 years | ||||||||||
Olaplex LLC. | Customer relationships | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life | 20 years |
BUSINESS COMBINATIONS - Schedul
BUSINESS COMBINATIONS - Schedule of Business Acquisitions (Details) - USD ($) $ in Thousands | Jan. 08, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||
Goodwill | $ 168,300 | $ 168,300 | |
Net cash paid for acquisition | $ 0 | $ 1,381,582 | |
Olaplex LLC. | |||
Business Acquisition [Line Items] | |||
Fair value of assets acquired | $ 1,216,259 | ||
Goodwill | 168,300 | ||
Fair value of liabilities assumed | (2,977) | ||
Net cash paid for acquisition | 1,381,582 | ||
Net cash paid for acquisition | $ 1,381,582 |
BUSINESS COMBINATIONS - Allocat
BUSINESS COMBINATIONS - Allocation of Purchase Price (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 08, 2020 |
Identifiable intangible assets: | |||
Goodwill | $ 168,300 | $ 168,300 | |
Olaplex LLC. | |||
Net tangible assets (liabilities): | |||
Inventory | $ 61,262 | ||
Accounts receivable and other current assets | 7,595 | ||
Deferred tax assets | 6,402 | ||
Liabilities | (2,977) | ||
Net tangible assets | 72,282 | ||
Identifiable intangible assets: | |||
Total identifiable intangible assets | 1,141,000 | ||
Goodwill | 168,300 | ||
Net cash paid for acquisition | 1,381,582 | ||
Olaplex LLC. | Brand name | |||
Identifiable intangible assets: | |||
Total identifiable intangible assets | 952,000 | ||
Olaplex LLC. | Product formulations | |||
Identifiable intangible assets: | |||
Total identifiable intangible assets | 136,000 | ||
Olaplex LLC. | Customer relationships | |||
Identifiable intangible assets: | |||
Total identifiable intangible assets | $ 53,000 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,141,890 | $ 1,141,000 |
Accumulated amortization | (98,546) | (48,690) |
Net carrying amount | 1,043,344 | 1,092,310 |
Goodwill | 168,300 | 168,300 |
Gross Carrying Amount | 1,310,190 | 1,309,300 |
Net carrying amount | $ 1,211,644 | $ 1,260,610 |
Brand name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 25 years | 25 years |
Gross Carrying Amount | $ 952,000 | $ 952,000 |
Accumulated amortization | (75,314) | (37,234) |
Net carrying amount | $ 876,686 | $ 914,766 |
Product formulations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 15 years | 15 years |
Gross Carrying Amount | $ 136,000 | $ 136,000 |
Accumulated amortization | (17,932) | (8,865) |
Net carrying amount | $ 118,068 | $ 127,135 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 20 years | 20 years |
Gross Carrying Amount | $ 53,000 | $ 53,000 |
Accumulated amortization | (5,241) | (2,591) |
Net carrying amount | $ 47,759 | $ 50,409 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 3 years | |
Gross Carrying Amount | $ 890 | |
Accumulated amortization | (59) | |
Net carrying amount | $ 831 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 49,856 | $ 48,690 |
Brand Name and Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | 40,730 | 39,825 |
Product formulations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | 7,989 | 6,052 |
Amortization of intangible assets, including amounts capitalized | 9,067 | 8,865 |
Amortization of intangible assets, amount capitalized | $ 1,078 | $ 2,813 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 50,152 | |
2023 | 50,152 | |
2024 | 49,916 | |
2025 | 49,797 | |
2026 | 49,797 | |
Thereafter | 793,530 | |
Net carrying amount | $ 1,043,344 | $ 1,092,310 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Deferred revenue | $ 5,022 | $ 2,314 |
Accrued sales and income taxes | 12,144 | 3,100 |
Accrued other | 6,008 | 2,931 |
Payroll liabilities | 6,302 | 1,517 |
Accrued expenses and other current liabilities | $ 29,476 | $ 9,862 |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long Term Debt Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Original term loan borrowing | $ 769,235 | $ 789,347 |
Debt issuance costs | (11,033) | (13,864) |
Long-term Debt, Total | 758,202 | 775,483 |
Current portion of long-term debt | (20,112) | (20,112) |
Long-term debt | 738,090 | 755,371 |
January 2020 Credit Agreement | Secured Debt | ||
Debt Instrument [Line Items] | ||
Original term loan borrowing | 430,312 | 441,562 |
Debt issuance costs | (6,986) | (8,810) |
Long-term Debt, Total | 423,326 | 432,752 |
Current portion of long-term debt | (11,250) | (11,250) |
Long-term debt | 412,076 | 421,502 |
December 2020 Amendment | Secured Debt | ||
Debt Instrument [Line Items] | ||
Original term loan borrowing | 338,923 | 347,785 |
Debt issuance costs | (4,047) | (5,054) |
Long-term Debt, Total | 334,876 | 342,731 |
Current portion of long-term debt | (8,862) | (8,862) |
Long-term debt | $ 326,014 | $ 333,869 |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) - USD ($) | Feb. 23, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 18, 2020 | Jan. 08, 2020 |
Debt Instrument [Line Items] | |||||
Interest expense, debt | $ 61,148,000 | $ 38,645,000 | |||
January 2020 Credit Agreement | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 450,000,000 | ||||
Original issue discount | 10,000,000 | ||||
Third party issue costs | 527,000 | ||||
January 2020 Credit Agreement | Secured Debt | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | 50,000,000 | ||||
January 2020 Credit Agreement | Secured Debt | Letter of Credit | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | 10,000,000 | ||||
January 2020 Credit Agreement | Secured Debt | Bridge Loan | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 5,000,000 | ||||
December 2020 Amendment | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 800,000,000 | ||||
Maximum borrowing capacity, increase | 350,000,000 | ||||
Original issue discount | 3,500,000 | ||||
Third party issue costs | 1,590,000 | ||||
December 2020 Amendment | Secured Debt | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | 51,000,000 | ||||
Maximum borrowing capacity, increase | $ 1,000,000 | ||||
Remaining borrowing capacity | $ 51,000,000 | 51,000,000 | |||
Term Loan Facility | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate, effective percentage | 7.50% | ||||
Term Loan Facility | Secured Debt | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Long-term line of credit | $ 0 | $ 0 | |||
February 2022 Credit Facility | Subsequent Event | First Lien Leverage Ratio Greater Than 1.20 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, covenant, leverage ratio | 1.20 | ||||
Line of credit facility, commitment fee percentage | 0.50% | ||||
February 2022 Credit Facility | Subsequent Event | First Lean Leverage Ratio Between 0.70 And 1.20 | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, commitment fee percentage | 0.375% | ||||
February 2022 Credit Facility | Subsequent Event | First Lien Leverage Ratio Less Than Or Equal To 0.70 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, covenant, leverage ratio | 0.70 | ||||
Line of credit facility, commitment fee percentage | 0.25% | ||||
February 2022 Credit Facility | Subsequent Event | Minimum | First Lean Leverage Ratio Between 0.70 And 1.20 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, covenant, leverage ratio | 0.70 | ||||
February 2022 Credit Facility | Subsequent Event | Maximum | First Lean Leverage Ratio Between 0.70 And 1.20 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, covenant, leverage ratio | 1.20 | ||||
February 2022 Credit Facility | Secured Debt | Subsequent Event | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 675,000,000 | ||||
Long-term debt, term | 7 years | ||||
Basis spread on variable rate, leverage based step-down | 0.25% | ||||
Debt instrument, covenant, leverage ratio | 1.20 | ||||
Quarterly payment | $ 1,688,000 | ||||
February 2022 Credit Facility | Secured Debt | Subsequent Event | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate, floor | 0.50% | ||||
Basis spread on variable rate | 3.75% | ||||
February 2022 Credit Facility | Secured Debt | Revolving Credit Facility | Subsequent Event | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 150,000,000 | ||||
Long-term debt, term | 5 years | ||||
Basis spread on variable rate, leverage based step-down | 0.25% | ||||
Debt instrument, covenant, leverage ratio | 1.20 | ||||
February 2022 Credit Facility | Secured Debt | Revolving Credit Facility | Subsequent Event | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate, floor | 0.00% | ||||
Basis spread on variable rate | 3.75% | ||||
February 2022 Credit Facility | Secured Debt | Letter of Credit | Subsequent Event | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 25,000,000 | ||||
February 2022 Credit Facility | Secured Debt | Bridge Loan | Subsequent Event | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 25,000,000 |
INCOME TAXES - Income Before In
INCOME TAXES - Income Before Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||||||||||
United States | $ 275,554 | $ 47,221 | ||||||||
Foreign | 55 | 37 | ||||||||
Income before provision for income taxes | $ 86,339 | $ 71,843 | $ 60,843 | $ 56,584 | $ 40,171 | $ 34,068 | $ 2,448 | $ (29,429) | $ 275,609 | $ 47,258 |
INCOME TAXES - Provision for In
INCOME TAXES - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current provision: | ||||||||||
Federal | $ 44,660 | $ 11,314 | ||||||||
State & Local | 7,668 | 1,079 | ||||||||
Foreign | 11 | 15 | ||||||||
Income tax provision | 52,339 | 12,408 | ||||||||
Deferred provision: | ||||||||||
Federal | 2,772 | (4,204) | ||||||||
State & Local | (286) | (224) | ||||||||
Foreign | 0 | 0 | ||||||||
Deferred taxes | 2,486 | (4,428) | ||||||||
Total provision for income taxes | $ 17,028 | $ 15,252 | $ 11,492 | $ 11,053 | $ 6,783 | $ 5,753 | $ 413 | $ (4,969) | $ 54,825 | $ 7,980 |
INCOME TAXES - Schedule of Defe
INCOME TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Tax Assets: | ||
Inventory adjustments | $ 661 | $ 258 |
Capitalized transaction costs | 3,016 | 3,218 |
Deferred revenue | 1,061 | 172 |
Accrued expenses and other current liabilities | 3,102 | 637 |
Share-based compensation | 397 | 321 |
Intangible assets | 6,410 | 8,549 |
Total Deferred Tax Assets | 14,647 | 13,155 |
Deferred Tax Liabilities: | ||
Goodwill | 4,675 | 2,264 |
Other current assets | 1,256 | 61 |
Fixed assets | 372 | 0 |
Total Deferred Tax Liabilities | 6,303 | 2,325 |
Net Deferred Tax Assets | $ 8,344 | $ 10,830 |
INCOME TAXES - Schedule of Effe
INCOME TAXES - Schedule of Effective Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory income tax rate | 21.00% | 21.00% |
Foreign derived intangible income deduction | (3.00%) | (5.20%) |
State and local income taxes, net of federal benefit | 2.60% | 1.80% |
Share based compensation | (1.20%) | 0.00% |
Other | 0.50% | (0.70%) |
Effective income tax rate, percent | 19.90% | 16.90% |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Related Party payable pursuant to Tax Receivable Agreement | $ 229,279 | $ 229,279 | ||
Related Party payable pursuant to Tax Receivable Agreement | 225,122 | $ 225,122 | $ 232,893 | $ 0 |
Related party transaction, term of agreement | 14 years | |||
Other income | 3,615 | |||
Current portion of Related Party payable pursuant to Tax Receivable Agreement | $ 4,157 | $ 4,157 | $ 0 |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) $ / shares in Units, $ in Thousands | Dec. 31, 2021USD ($)shares | Oct. 04, 2021day$ / sharesshares | Oct. 03, 2021dayshares | Dec. 31, 2021USD ($)shares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options converted in period, number of shares | 46,923,300 | |||||
Outstanding options (shares) | 46,666,979 | 46,666,979 | ||||
Forfeited (shares) | 2,430,480 | |||||
Share-based compensation expense | $ | $ 3,963 | $ 1,527 | ||||
Unrecognized cost, amount | $ | $ 11,638 | 11,638 | $ 9,625 | |||
Cash Settled Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Deferred compensation arrangement with individual, converted in period, number of units | 1,098,900 | |||||
Time-based cash settled units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Deferred compensation arrangement with individual, converted in period, number of units | 621,000 | |||||
Deferred compensation arrangement with individual, requisite service period | 5 years | |||||
Threshold consecutive trading days | day | 30 | |||||
Performance-Based Cash-Settled Units Converted Into Time-Based Cash-Settled Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Deferred compensation arrangement with individual, converted in period, number of units | 318,600 | |||||
Performance-Based Cash-Settled Units Converted Into Vested Cash-Settled Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Deferred compensation arrangement with individual, converted in period, number of units | 159,300 | |||||
Performance-based Cash-Settled Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Threshold consecutive trading days | day | 30 | |||||
Deferred compensation arrangement with individual, allocated share-based compensation expense | $ | 5,478 | |||||
Deferred compensation arrangement with individual, distribution paid | $ | 2,872 | |||||
Deferred compensation arrangement with individual, units, vested in period | 159,300 | |||||
Compensation cost not yet recognized, amount | $ | 13,055 | 13,055 | ||||
Deferred compensation arrangement with individual, recorded liability | $ | $ 8,017 | $ 8,017 | ||||
IPO | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Sale of stock, price per share (usd per share) | $ / shares | $ 21 | |||||
Share-based Payment Arrangement, Tranche One | Time-based cash settled units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 20.00% | |||||
Share-based Payment Arrangement, Tranche One | Performance-Based Cash-Settled Units Converted Into Time-Based Cash-Settled Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 33.33% | |||||
Share-based Payment Arrangement, Tranche One | Performance-based Cash-Settled Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 33.33% | |||||
Share-based Payment Arrangement, Tranche Two | Time-based cash settled units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 20.00% | |||||
Share-based Payment Arrangement, Tranche Two | Performance-Based Cash-Settled Units Converted Into Time-Based Cash-Settled Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 33.33% | |||||
Share-based Payment Arrangement, Tranche Two | Performance-based Cash-Settled Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 33.33% | |||||
Share-based Payment Arrangement, Tranche Three | Time-based cash settled units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 20.00% | |||||
Share-based Payment Arrangement, Tranche Three | Performance-Based Cash-Settled Units Converted Into Time-Based Cash-Settled Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 33.33% | |||||
Share-based Payment Arrangement, Tranche Three | Performance-based Cash-Settled Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 33.33% | |||||
Share-based Payment Arrangement, Tranche Four | Time-based cash settled units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 20.00% | |||||
Share-based Payment Arrangement, Tranche Five | Time-based cash settled units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 20.00% | |||||
Vested Time-Based Options Converted Into Vested Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options converted in period, number of shares | 2,929,500 | |||||
Vested Time-Based Options Converted Into Time-Based Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options converted in period, number of shares | 14,314,725 | |||||
Performance Based Options Converted Into Time-Based Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options converted in period, number of shares | 25,363,800 | |||||
Vested Performance-Based Options Converted Into Vested Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options converted in period, number of shares | 4,315,275 | |||||
Time-Based Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options converted in period, number of shares | 25,363,800 | 0 | ||||
Recognition period (years) | 5 years | |||||
Granted (shares) | 3,077,783 | 15,997,500 | ||||
Outstanding options (shares) | 42,687,518 | 42,687,518 | 15,997,500 | 0 | ||
Share-based compensation expense | $ | $ 2,101 | $ 1,098 | ||||
Cost not yet recognized, period for recognition | 4 years 4 months 20 days | |||||
Options vested in period, fair value | $ | $ 1,567 | |||||
Expected term (years) | 6 years 6 months | |||||
Expected dividend yield (%) | 0.00% | 0.00% | ||||
Time-Based Options | Share-based Payment Arrangement, Tranche One | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 20.00% | |||||
Time-Based Options | Share-based Payment Arrangement, Tranche Two | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 20.00% | |||||
Time-Based Options | Share-based Payment Arrangement, Tranche Three | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 20.00% | |||||
Time-Based Options | Share-based Payment Arrangement, Tranche Four | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 20.00% | |||||
Time-Based Options | Share-based Payment Arrangement, Tranche Five | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 20.00% | |||||
Share-based Payment Arrangement, Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized (shares) | 92,292,025 | 92,292,025 | ||||
Cost not yet recognized, period for recognition | 3 years 3 months 21 days | |||||
Expected term (years) | 10 years | |||||
Expected dividend yield (%) | 0.00% | |||||
Performance-based Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options converted in period, number of shares | (25,363,800) | 0 | ||||
Recognition period (years) | 3 years | |||||
Granted (shares) | 1,959,525 | 28,732,050 | ||||
Outstanding options (shares) | 3,979,461 | 3,979,461 | 28,732,050 | 0 | ||
Share-based compensation expense | $ | $ 1,705 | $ 429 | ||||
Cost not yet recognized, period for recognition | 3 years 6 months 10 days | |||||
Options vested in period, fair value | $ | $ 1,483 | |||||
Expected term (years) | 4 months 24 days | 4 years | ||||
Expected dividend yield (%) | 49.00% | 0.00% | ||||
Performance-based Options | Share-based Payment Arrangement, Tranche One | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 33.33% | |||||
Performance-based Options | Share-based Payment Arrangement, Tranche Two | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 33.33% | |||||
Performance-based Options | Share-based Payment Arrangement, Tranche Three | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 33.33% | |||||
2021 Omnibus Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares available for grant (shares) | 45,368,725 | 45,368,725 | ||||
Award vesting rights, percentage | 3.00% | |||||
Outstanding options (shares) | 413,078 | 413,078 | ||||
Forfeited (shares) | 67,980 | |||||
2021 Omnibus Equity Incentive Plan | Time-Based Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Recognition period (years) | 4 years | |||||
Granted (shares) | 351,058 | |||||
2021 Omnibus Equity Incentive Plan | Time-Based Options | Share-based Payment Arrangement, Tranche One | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 25.00% | |||||
2021 Omnibus Equity Incentive Plan | Time-Based Options | Share-based Payment Arrangement, Tranche Two | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 25.00% | |||||
2021 Omnibus Equity Incentive Plan | Time-Based Options | Share-based Payment Arrangement, Tranche Three | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 25.00% | |||||
2021 Omnibus Equity Incentive Plan | Time-Based Options | Share-based Payment Arrangement, Tranche Four | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 25.00% | |||||
2021 Omnibus Equity Incentive Plan | Share-based Payment Arrangement, Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares available for grant (shares) | 44,955,647 | 44,955,647 | ||||
2020 Omnibus Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Converted in period, number of shares (shares) | 675 | |||||
Outstanding options (shares) | 46,253,901 | 46,253,901 | ||||
Forfeited (shares) | 2,362,500 | |||||
2020 Omnibus Equity Incentive Plan | Cash Settled Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Deferred compensation arrangement with individual, reorganization transactions, conversion ratio | 675 | |||||
2020 Omnibus Equity Incentive Plan | Share-based Payment Arrangement, Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares available for grant (shares) | 0 | 0 |
SHARE-BASED COMPENSATION - Opti
SHARE-BASED COMPENSATION - Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 03, 2021 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Options Outstanding | |||||
Converted Performance to Time-Based (shares) | 46,923,300 | ||||
Exercised (shares) | (669,399) | ||||
Ending balance | 46,666,979 | 46,666,979 | |||
Time-Based Options | |||||
Options Outstanding | |||||
Beginning balance | 15,997,500 | 0 | |||
Granted (shares) | 3,077,783 | 15,997,500 | |||
Cancelled/Forfeited (shares) | (1,417,980) | 0 | |||
Converted Performance to Time-Based (shares) | 25,363,800 | 0 | |||
Exercised (shares) | (333,585) | 0 | |||
Ending balance | 42,687,518 | 42,687,518 | 15,997,500 | ||
Weighted Average Exercise Price Per Share | |||||
Outstanding at beginning of period (in usd per share) | $ 0.88 | $ 0 | |||
Granted (in usd per share) | 6.17 | 0.88 | |||
Cancelled/Forfeited (in usd per share) | 2.10 | 0 | |||
Converted Performance to Time-Based (in usd per share) | 0.92 | 0 | |||
Exercised (in usd per share) | 1.49 | 0 | |||
Outstanding at end of period (in usd per share) | $ 1.24 | $ 1.24 | $ 0.88 | ||
Aggregate intrinsic value, outstanding | $ 798,404 | $ 798,404 | $ 26,780 | $ 0 | |
Aggregate intrinsic value, exercised | $ 8,138 | ||||
Vested and exercisable at end of period (in shares) | 2,595,915 | 2,595,915 | 0 | ||
Vested and exercisable at end of period (in usd per share) | $ 0.80 | $ 0.80 | $ 0 | ||
Aggregate intrinsic value, vested and exercisable | $ 73,553 | $ 73,553 | $ 0 | ||
Weighted average remaining contractual term, outstanding | 10 years | 10 years | |||
Weighted average remaining contractual term, exercised | 10 years | ||||
Weighted average remaining contractual term, vested and exercisable | 10 years | ||||
Performance-based Options | |||||
Options Outstanding | |||||
Beginning balance | 28,732,050 | 0 | |||
Granted (shares) | 1,959,525 | 28,732,050 | |||
Cancelled/Forfeited (shares) | (1,012,500) | 0 | |||
Converted Performance to Time-Based (shares) | (25,363,800) | 0 | |||
Exercised (shares) | (335,814) | 0 | |||
Ending balance | 3,979,461 | 3,979,461 | 28,732,050 | ||
Weighted Average Exercise Price Per Share | |||||
Outstanding at beginning of period (in usd per share) | $ 0.81 | $ 0 | |||
Granted (in usd per share) | 3.19 | 0.81 | |||
Cancelled/Forfeited (in usd per share) | 0.97 | 0 | |||
Converted Performance to Time-Based (in usd per share) | 0.92 | 0 | |||
Exercised (in usd per share) | 1.91 | 0 | |||
Outstanding at end of period (in usd per share) | $ 1.17 | $ 1.17 | $ 0.81 | ||
Aggregate intrinsic value, outstanding | $ 111,278 | $ 111,278 | $ 50,183 | $ 0 | |
Aggregate intrinsic value, exercised | $ 8,686 | ||||
Vested and exercisable at end of period (in shares) | 3,979,461 | 3,979,461 | 0 | ||
Vested and exercisable at end of period (in usd per share) | $ 1.17 | $ 1.17 | $ 0 | ||
Aggregate intrinsic value, vested and exercisable | $ 111,278 | $ 111,278 | $ 0 | ||
Weighted average remaining contractual term, outstanding | 10 years | 10 years | |||
Weighted average remaining contractual term, exercised | 10 years | ||||
Weighted average remaining contractual term, vested and exercisable | 10 years |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional Information Relating to Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 3,963 | $ 1,527 |
Time-Based Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 2,101 | $ 1,098 |
Weighted-average grant date fair value of options granted (usd per share) | $ 0.73 | $ 0.54 |
Performance-based Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 1,705 | $ 429 |
Weighted-average grant date fair value of options granted (usd per share) | $ 0.13 | $ 0.09 |
SHARE-BASED COMPENSATION - Valu
SHARE-BASED COMPENSATION - Valuation Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Time-based cash settled units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 2 years 6 months 21 days | |
Expected volatility (%) | 30.00% | |
Risk-free interest rate (%) | 0.85% | |
Expected dividend yield (%) | 0.00% | |
Time-Based Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 6 years 6 months | |
Expected volatility, minimum (%) | 25.00% | |
Expected volatility, maximum (%) | 30.00% | |
Expected volatility (%) | 30.00% | |
Risk-free interest rate, minimum (%) | 1.07% | 0.37% |
Risk-free interest rate, maximum (%) | 1.62% | 1.87% |
Expected dividend yield (%) | 0.00% | 0.00% |
Performance-based Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 4 months 24 days | 4 years |
Expected volatility (%) | 30.00% | 30.00% |
Risk-free interest rate, minimum (%) | 1.48% | |
Risk-free interest rate, maximum (%) | 1.62% | |
Risk-free interest rate (%) | 1.87% | |
Expected dividend yield (%) | 49.00% | 0.00% |
Minimum | Time-Based Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 6 years 3 months | |
Maximum | Time-Based Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 7 years |
SHARE-BASED COMPENSATION - Cash
SHARE-BASED COMPENSATION - Cash-Settled Units Activity (Details) | 12 Months Ended |
Dec. 31, 2021shares | |
Time-based | |
Deferred Compensation Arrangement with Individual, Outstanding [Roll Forward] | |
Beginning balance | 0 |
Granted (shares) | 684,450 |
Vested and redeemed (in shares) | 0 |
Cancelled/Forfeited (shares) | (87,750) |
End of Period | 596,700 |
Performance-based | |
Deferred Compensation Arrangement with Individual, Outstanding [Roll Forward] | |
Beginning balance | 0 |
Granted (shares) | 526,500 |
Vested and redeemed (in shares) | (159,300) |
Cancelled/Forfeited (shares) | (60,750) |
End of Period | 306,450 |
SHARE-BASED COMPENSATION - Unre
SHARE-BASED COMPENSATION - Unrecognized Compensation Expense Valuation Assumptions (Details) - Cash Settled Units | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock Price at December 31, 2021 | $ 29.13 |
Exercise Price per Unit (in usd per share) | 2.97 |
Intrinsic Value per Unit (in usd per share) | $ 26.16 |
Converted Units (shares) | shares | 306,450 |
EQUITY - Narrative (Details)
EQUITY - Narrative (Details) | Oct. 03, 2021shares | Sep. 29, 2021$ / sharesshares | Dec. 31, 2021$ / sharesshares | Dec. 31, 2020$ / shares |
Equity [Line Items] | ||||
Reorganization share issuance (Note 12) (shares) | 648,124,642 | 648,124,642 | ||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |
Common stock, convertible, conversion ratio | 0.00148 | |||
Reorganization, conversion ratio | 0.00148 | |||
Option exercises (shares) | 669,399 | |||
Fund IX And Other Former Partners Of Penelope Group Holdings, L.P | Penelope Group Holdings, L.P | ||||
Equity [Line Items] | ||||
Reorganization, equity interests contributed, percent | 100.00% | |||
Fund IX | Penelope Group Holdings GP II | ||||
Equity [Line Items] | ||||
Reorganization, equity interests contributed, percent | 100.00% |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) - Affiliated Entity - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | |||
Expenses from transaction with related party | $ 195 | $ 25 | |
Advent Funds | Funds Received To Be Used For Charitable Donation | |||
Related Party Transaction [Line Items] | |||
Related party transaction, amounts of transaction | $ 300 | ||
Advent Funds | Related Party Transactions to Funds Received To Be Used For Charitable Donations, Unpaid | |||
Related Party Transaction [Line Items] | |||
Related party transaction, amounts of transaction | $ 20 |
CONTINGENCIES - Narrative (Deta
CONTINGENCIES - Narrative (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation settlement, expense | $ 14,250 |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | ||||||||||
Net income | $ 69,311 | $ 56,591 | $ 49,351 | $ 45,531 | $ 33,388 | $ 28,315 | $ 2,035 | $ (24,460) | $ 220,784 | $ 39,278 |
Denominator: | ||||||||||
Weighted average common shares outstanding: Basic (in shares) | 648,422,232 | 648,124,642 | 648,124,642 | 647,994,569 | 647,888,387 | 647,888,387 | 647,775,891 | 597,212,079 | 648,166,472 | 635,386,219 |
Dilutive common equivalent shares from equity options | 41,757,320 | 1,433,756 | ||||||||
Weighted average common shares outstanding: Diluted (in shares) | 692,863,933 | 690,711,782 | 656,745,557 | 656,268,316 | 655,736,276 | 653,036,893 | 647,775,891 | 597,212,079 | 689,923,792 | 636,819,975 |
Net income per share: | ||||||||||
Net income (loss) per share: Basic (in usd per share) | $ 0.11 | $ 0.09 | $ 0.08 | $ 0.07 | $ 0.05 | $ 0.04 | $ 0 | $ (0.04) | $ 0.34 | $ 0.06 |
Net income (loss) per share: Diluted (in usd per share) | $ 0.10 | $ 0.08 | $ 0.08 | $ 0.07 | $ 0.05 | $ 0.04 | $ 0 | $ (0.04) | $ 0.32 | $ 0.06 |
QUARTERLY INFORMATION (unaudi_3
QUARTERLY INFORMATION (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||
Net sales | $ 166,498 | $ 161,624 | $ 152,124 | $ 118,119 | $ 93,195 | $ 89,447 | $ 55,260 | $ 44,348 | $ 598,365 | $ 282,250 |
Cost of sales: | ||||||||||
Cost of product (excluding amortization) | 32,695 | 32,462 | 29,324 | 22,073 | 17,375 | 24,569 | 21,186 | 33,481 | 116,554 | 96,611 |
Amortization of patented formulations | 1,590 | 1,680 | 2,268 | 2,451 | 1,485 | 2,102 | 1,658 | 807 | 7,989 | 6,052 |
Total cost of sales | 34,285 | 34,142 | 31,592 | 24,524 | 18,860 | 26,671 | 22,844 | 34,288 | 124,543 | 102,663 |
Gross profit | 132,213 | 127,482 | 120,532 | 93,595 | 74,335 | 62,776 | 32,416 | 10,060 | 473,822 | 179,587 |
Operating expenses: | ||||||||||
Selling, general, and administrative | 23,555 | 30,257 | 33,786 | 11,280 | 13,879 | 8,215 | 9,621 | 5,455 | 98,878 | 37,170 |
Amortization of other intangibles | 10,243 | 10,182 | 10,183 | 10,182 | 10,182 | 10,182 | 10,182 | 9,279 | 40,790 | 39,825 |
Acquisition costs | 0 | 0 | 0 | 0 | 0 | 488 | 0 | 16,011 | 0 | 16,499 |
Total operating expenses | 33,798 | 40,439 | 43,969 | 21,462 | 24,061 | 18,885 | 19,803 | 30,745 | 139,668 | 93,494 |
Operating income | 98,415 | 87,043 | 76,563 | 72,133 | 50,274 | 43,891 | 12,613 | (20,685) | 334,154 | 86,093 |
Interest expense | (15,096) | (14,987) | (15,563) | (15,502) | (10,068) | (9,794) | (10,072) | (8,711) | (61,148) | (38,645) |
Other income (expense), net | ||||||||||
Tax receivable agreement liability adjustment | 3,615 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 3,615 | 0 |
Other expense, net | (595) | (213) | (157) | (47) | (35) | (29) | (93) | (33) | (1,012) | (190) |
Other income (expense), net | 3,020 | (213) | (157) | (47) | (35) | (29) | (93) | (33) | 2,603 | (190) |
Income before provision for income taxes | 86,339 | 71,843 | 60,843 | 56,584 | 40,171 | 34,068 | 2,448 | (29,429) | 275,609 | 47,258 |
Income tax provision (benefit) | 17,028 | 15,252 | 11,492 | 11,053 | 6,783 | 5,753 | 413 | (4,969) | 54,825 | 7,980 |
Net income (loss) | 69,311 | 56,591 | 49,351 | 45,531 | 33,388 | 28,315 | 2,035 | (24,460) | 220,784 | 39,278 |
Comprehensive income (loss) | $ 69,311 | $ 56,591 | $ 49,351 | $ 45,531 | $ 33,388 | $ 28,315 | $ 2,035 | $ (24,460) | $ 220,784 | $ 39,278 |
Net income per share: | ||||||||||
Net income (loss) per share: Basic (in usd per share) | $ 0.11 | $ 0.09 | $ 0.08 | $ 0.07 | $ 0.05 | $ 0.04 | $ 0 | $ (0.04) | $ 0.34 | $ 0.06 |
Net income (loss) per share: Diluted (in usd per share) | $ 0.10 | $ 0.08 | $ 0.08 | $ 0.07 | $ 0.05 | $ 0.04 | $ 0 | $ (0.04) | $ 0.32 | $ 0.06 |
Weighted average common shares outstanding: | ||||||||||
Weighted average common shares outstanding: Basic (in shares) | 648,422,232 | 648,124,642 | 648,124,642 | 647,994,569 | 647,888,387 | 647,888,387 | 647,775,891 | 597,212,079 | 648,166,472 | 635,386,219 |
Weighted average common shares outstanding: Diluted (in shares) | 692,863,933 | 690,711,782 | 656,745,557 | 656,268,316 | 655,736,276 | 653,036,893 | 647,775,891 | 597,212,079 | 689,923,792 | 636,819,975 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event - February 2022 Credit Facility - Secured Debt | Feb. 23, 2022USD ($) |
Subsequent Event [Line Items] | |
Long-term debt, term | 7 years |
Maximum borrowing capacity | $ 675,000,000 |
Revolving Credit Facility | |
Subsequent Event [Line Items] | |
Long-term debt, term | 5 years |
Maximum borrowing capacity | $ 150,000,000 |
Letter of Credit | |
Subsequent Event [Line Items] | |
Maximum borrowing capacity | 25,000,000 |
Bridge Loan | |
Subsequent Event [Line Items] | |
Maximum borrowing capacity | $ 25,000,000 |
CONDENSED PARENT COMPANY FINA_3
CONDENSED PARENT COMPANY FINANCIAL INFORMATION - Balance Sheet (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2021 | Oct. 03, 2021 | Sep. 30, 2021 | Sep. 29, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||||||
Deferred taxes | $ 8,344 | $ 10,830 | ||||
Total assets | 1,560,422 | 1,332,833 | ||||
Current Liabilities: | ||||||
Accrued expenses and other current liabilities | 29,476 | 9,862 | ||||
Current portion of Related Party payable pursuant to Tax Receivable Agreement | 4,157 | 0 | ||||
Total current liabilities | 72,912 | 46,789 | ||||
Related Party payable pursuant to Tax Receivable Agreement | 225,122 | $ 232,893 | 0 | |||
Total liabilities | 1,036,124 | 802,160 | ||||
Stockholders’ equity (Notes 1 and 12): | ||||||
Common stock, $0.001 par value per share; 2,000,000,000 shares authorized, 648,794,041 and 647,888,387 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | 648 | 648 | ||||
Additional paid-in capital | 302,866 | 530,025 | ||||
Retained earnings | 220,784 | 0 | ||||
Total stockholders’ equity | 524,298 | 530,673 | ||||
Total liabilities and stockholders’ equity | $ 1,560,422 | $ 1,332,833 | ||||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||
Common stock, shares authorized (shares) | 2,000,000,000 | 2,000,000,000 | ||||
Common stock, shares, outstanding (shares) | 648,794,041 | 648,124,642 | 647,888,387 | |||
Common stock, shares, issued (shares) | 648,794,041 | 647,888,387 | ||||
Parent Company | ||||||
Assets | ||||||
Investment in subsidiaries | $ 761,076 | |||||
Deferred taxes | 197 | |||||
Total assets | 761,273 | |||||
Current Liabilities: | ||||||
Accrued expenses and other current liabilities | 6,011 | |||||
Current portion of Related Party payable pursuant to Tax Receivable Agreement | 4,157 | |||||
Total current liabilities | 10,168 | |||||
Due to affiliates | 1,685 | |||||
Related Party payable pursuant to Tax Receivable Agreement | 225,122 | $ 232,893 | ||||
Total liabilities | 236,975 | |||||
Stockholders’ equity (Notes 1 and 12): | ||||||
Common stock, $0.001 par value per share; 2,000,000,000 shares authorized, 648,794,041 and 647,888,387 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | 648 | |||||
Additional paid-in capital | 461,456 | $ 459,885 | ||||
Retained earnings | 62,194 | |||||
Total stockholders’ equity | 524,298 | |||||
Total liabilities and stockholders’ equity | $ 761,273 | |||||
Common stock, par value (in usd per share) | $ 0.001 | |||||
Common stock, shares authorized (shares) | 2,000,000,000 | |||||
Common stock, shares, outstanding (shares) | 648,794,041 | 648,124,642 | ||||
Common stock, shares, issued (shares) | 648,794,041 |
CONDENSED PARENT COMPANY FINA_4
CONDENSED PARENT COMPANY FINANCIAL INFORMATION - Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 7 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating expenses: | |||||||||||
Share-based compensation expense | $ 3,963 | $ 1,527 | |||||||||
Total operating expenses | $ 33,798 | $ 40,439 | $ 43,969 | $ 21,462 | $ 24,061 | $ 18,885 | $ 19,803 | $ 30,745 | 139,668 | 93,494 | |
Other income (expense), net | |||||||||||
Tax receivable agreement liability adjustment | 3,615 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 3,615 | 0 | |
Other income (expense), net | 3,020 | (213) | (157) | (47) | (35) | (29) | (93) | (33) | 2,603 | (190) | |
Income before provision for income taxes | 86,339 | 71,843 | 60,843 | 56,584 | 40,171 | 34,068 | 2,448 | (29,429) | 275,609 | 47,258 | |
Income tax provision | (17,028) | (15,252) | (11,492) | (11,053) | (6,783) | (5,753) | (413) | 4,969 | (54,825) | (7,980) | |
Net income | 69,311 | 56,591 | 49,351 | 45,531 | 33,388 | 28,315 | 2,035 | (24,460) | 220,784 | 39,278 | |
Comprehensive income | $ 69,311 | $ 56,591 | $ 49,351 | $ 45,531 | $ 33,388 | $ 28,315 | $ 2,035 | $ (24,460) | $ 220,784 | $ 39,278 | |
Parent Company | |||||||||||
Operating expenses: | |||||||||||
Selling, general, and administrative | $ 9,857 | ||||||||||
Share-based compensation expense | 315 | ||||||||||
Total operating expenses | 10,172 | ||||||||||
Other income (expense), net | |||||||||||
Tax receivable agreement liability adjustment | 3,615 | ||||||||||
Equity in undistributed earnings | 67,531 | ||||||||||
Other income (expense), net | 71,146 | ||||||||||
Income before provision for income taxes | 60,974 | ||||||||||
Income tax provision | 1,220 | ||||||||||
Net income | 62,194 | ||||||||||
Comprehensive income | $ 62,194 |
CONDENSED PARENT COMPANY FINA_5
CONDENSED PARENT COMPANY FINANCIAL INFORMATION - Cash Flow (Details) - USD ($) $ in Thousands | 3 Months Ended | 7 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||||||||||
Net income | $ 69,311 | $ 56,591 | $ 49,351 | $ 45,531 | $ 33,388 | $ 28,315 | $ 2,035 | $ (24,460) | $ 220,784 | $ 39,278 | |
Adjustments to reconcile net income to net cash from operations provided by operating activities: | |||||||||||
Tax receivable agreement liability adjustment | (3,615) | $ 0 | $ 0 | 0 | 0 | $ 0 | $ 0 | $ 0 | (3,615) | 0 | |
Share-based compensation expense | 3,963 | 1,527 | |||||||||
Changes in operating assets and liabilities, net of effects of acquisition: | |||||||||||
Accrued expenses and other current liabilities | 19,613 | 8,837 | |||||||||
Net cash provided by operating activities | 200,029 | 128,975 | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from exercise of stock options | 1,138 | 0 | |||||||||
Net cash (used in) provided by financing activities | (18,340) | 1,263,598 | |||||||||
Net increase in cash and cash equivalents | 175,424 | 10,964 | |||||||||
Cash and cash equivalents - beginning of period | $ 10,964 | 10,964 | |||||||||
Cash and cash equivalents - end of period | 186,388 | $ 10,964 | $ 186,388 | 186,388 | 10,964 | ||||||
Supplemental disclosure of noncash activities: | |||||||||||
Increase in Related Party payable pursuant to Tax Receivable Agreement | 232,893 | $ 0 | |||||||||
Parent Company | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | 62,194 | ||||||||||
Adjustments to reconcile net income to net cash from operations provided by operating activities: | |||||||||||
Equity in undistributed earnings | (67,531) | ||||||||||
Tax receivable agreement liability adjustment | (3,615) | ||||||||||
Share-based compensation expense | 315 | ||||||||||
Deferred income tax asset | (197) | ||||||||||
Changes in operating assets and liabilities, net of effects of acquisition: | |||||||||||
Accrued expenses and other current liabilities | 6,011 | ||||||||||
Net cash provided by operating activities | (2,823) | ||||||||||
Cash flows from financing activities: | |||||||||||
Advances from affiliates | 1,685 | ||||||||||
Proceeds from exercise of stock options | 1,138 | ||||||||||
Net cash (used in) provided by financing activities | 2,823 | ||||||||||
Net increase in cash and cash equivalents | 0 | ||||||||||
Cash and cash equivalents - beginning of period | 0 | ||||||||||
Cash and cash equivalents - end of period | $ 0 | 0 | $ 0 | ||||||||
Supplemental disclosure of noncash activities: | |||||||||||
Increase in Related Party payable pursuant to Tax Receivable Agreement | $ 232,893 |
CONDENSED PARENT COMPANY FINA_6
CONDENSED PARENT COMPANY FINANCIAL INFORMATION - Narrative (Details) - USD ($) $ in Thousands | Oct. 04, 2021 | Oct. 03, 2021 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Common stock, shares, outstanding (shares) | 648,124,642 | 648,794,041 | 647,888,387 | ||
Additional paid-in capital | $ 302,866 | $ 530,025 | |||
Related Party payable pursuant to Tax Receivable Agreement | 225,122 | $ 232,893 | 0 | ||
Tax receivable agreement, percent of savings for holders | 85.00% | 85.00% | |||
Related Party payable pursuant to Tax Receivable Agreement | 229,279 | ||||
Current portion of Related Party payable pursuant to Tax Receivable Agreement | $ 4,157 | $ 0 | |||
Penelope Group Holdings | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Conversion of stock, shares converted | 960,184 | ||||
Parent Company | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Common stock, shares, outstanding (shares) | 648,124,642 | 648,794,041 | |||
Additional paid-in capital | $ 459,885 | $ 461,456 | |||
Related Party payable pursuant to Tax Receivable Agreement | $ 232,893 | 225,122 | |||
Investment in subsidiaries | 601,073 | ||||
Tax receivable agreement, percent of savings for holders | 85.00% | ||||
Related Party payable pursuant to Tax Receivable Agreement | 229,279 | ||||
Current portion of Related Party payable pursuant to Tax Receivable Agreement | $ 4,157 | ||||
Parent Company | Penelope Group Holdings | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Conversion of stock, shares converted | 960,184 |