Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 30, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
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 $0.001 per share | |
Trading Symbol | OLPX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 648,928,202 | |
Entity Central Index Key | 0001868726 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 143,347 | $ 186,388 |
Accounts receivable, net of allowances of $14,662 and $8,231 | 68,914 | 40,779 |
Inventory | 117,471 | 98,399 |
Other current assets | 8,196 | 9,621 |
Total current assets | 337,928 | 335,187 |
Property and equipment, net | 740 | 747 |
Intangible assets, net | 1,031,232 | 1,043,344 |
Goodwill | 168,300 | 168,300 |
Deferred taxes | 10,056 | 8,344 |
Other assets | 6,364 | 4,500 |
Total assets | 1,554,620 | 1,560,422 |
Current Liabilities: | ||
Accounts payable | 29,005 | 19,167 |
Accrued expenses and other current liabilities | 11,361 | 17,332 |
Accrued sales and income taxes | 30,895 | 12,144 |
Current portion of long-term debt | 6,750 | 20,112 |
Current portion of Related Party payable pursuant to Tax Receivable Agreement | 4,157 | 4,157 |
Total current liabilities | 82,168 | 72,912 |
Related Party payable pursuant to Tax Receivable Agreement | 225,122 | 225,122 |
Long-term debt | 658,315 | 738,090 |
Total liabilities | 965,605 | 1,036,124 |
Contingencies (Note 12) | ||
Stockholders’ equity (Notes 1 and 10): | ||
Common stock, $0.001 par value per share; 2,000,000,000 shares authorized, 648,855,977 and 648,794,041 shares issued and outstanding as of March 31, 2022 and December 31, 2021, 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 | 305,622 | 302,866 |
Retained earnings | 282,745 | 220,784 |
Total stockholders’ equity | 589,015 | 524,298 |
Total liabilities and stockholders’ equity | $ 1,554,620 | $ 1,560,422 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS - Parenthetical - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for credit losses | $ 14,662 | $ 8,231 |
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) | 648,855,977 | 648,794,041 |
Common stock, shares, outstanding (shares) | 648,855,977 | 648,794,041 |
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 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net sales | $ 186,196 | $ 118,119 |
Cost of sales: | ||
Cost of product (excluding amortization) | 43,222 | 22,073 |
Amortization of patented formulations | 1,769 | 2,451 |
Total cost of sales | 44,991 | 24,524 |
Gross profit | 141,205 | 93,595 |
Operating expenses: | ||
Selling, general, and administrative | 22,314 | 11,280 |
Amortization of other intangibles | 10,266 | 10,182 |
Total operating expenses | 32,580 | 21,462 |
Operating income | 108,625 | 72,133 |
Interest expense | (11,460) | (15,502) |
Other expense, net | ||
Loss on extinguishment of debt | (18,803) | 0 |
Other expense, net | (377) | (47) |
Total other expense, net | (19,180) | (47) |
Income before provision for income taxes | 77,985 | 56,584 |
Income tax provision | 16,024 | 11,053 |
Net income | 61,961 | 45,531 |
Comprehensive income | $ 61,961 | $ 45,531 |
Net income per share: | ||
Net income (loss) per share: Basic (in usd per share) | $ 0.10 | $ 0.07 |
Net income (loss) per share: Diluted (in usd per share) | $ 0.09 | $ 0.07 |
Weighted average common shares outstanding: | ||
Weighted average common shares outstanding: Basic (in shares) | 648,813,998 | 647,994,569 |
Weighted average common shares outstanding: Diluted (in shares) | 693,021,097 | 656,268,316 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED 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, 2020 | 647,888,387 | |||
Beginning 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 | 45,531 | 45,531 | ||
Share-based compensation expense | 627 | 627 | ||
Ending balance, shares outstanding at Mar. 31, 2021 | 648,124,642 | |||
Ending balance at Mar. 31, 2021 | 577,464 | $ 648 | 531,285 | 45,531 |
Beginning balance, shares outstanding at Dec. 31, 2021 | 648,794,041 | |||
Beginning balance at Dec. 31, 2021 | 524,298 | $ 648 | 302,866 | 220,784 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Conversion of cash-settled units to stock-settled stock appreciation rights | $ 1,632 | 1,632 | ||
Exercise of stock-settled stock appreciation rights (shares) | 117,180 | 117,180 | ||
Exercise of stock-settled stock appreciation rights | $ 348 | 348 | ||
Shares withheld and retired for taxes on exercise of stock settled appreciation rights (shares) | (55,244) | (55,244) | ||
Shares withheld and retired on exercise of stock-settled appreciation rights | $ (920) | (920) | ||
Net income | 61,961 | 61,961 | ||
Share-based compensation expense | 1,696 | 1,696 | ||
Ending balance, shares outstanding at Mar. 31, 2022 | 648,855,977 | |||
Ending balance at Mar. 31, 2022 | $ 589,015 | $ 648 | $ 305,622 | $ 282,745 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 61,961 | $ 45,531 |
Adjustments to reconcile net income to net cash from operations provided by operating activities: | ||
Amortization of patented formulations | 1,769 | 2,451 |
Amortization of other intangibles | 10,266 | 10,182 |
Inventory write-off and disposal | 4,324 | 0 |
Depreciation of fixed assets | 75 | 0 |
Amortization of debt issuance costs | 146 | 690 |
Deferred taxes | (1,712) | 1,937 |
Share-based compensation expense | 1,696 | 627 |
Loss on extinguishment of debt | 18,803 | 0 |
Changes in operating assets and liabilities, net of effects of acquisition: | ||
Accounts receivable, net | (28,135) | (20,394) |
Inventory | (22,899) | (8,865) |
Other current assets | 1,425 | (2,633) |
Accounts payable | 9,838 | (5,422) |
Accrued expenses and other current liabilities | 14,412 | 17,186 |
Net cash provided by operating activities | 71,969 | 41,290 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (68) | 0 |
Purchase of software | (421) | 0 |
Net cash used in investing activities | (489) | 0 |
Cash flows from financing activities: | ||
Proceeds from the issuance of stock | 0 | 633 |
Payments for taxes on net settlement of exercise of stock settled appreciation rights | (572) | 0 |
Principal payments and prepayment fees for the 2020 Term Loan Facility | (777,005) | (5,028) |
Proceeds from the issuance of 2022 Term Loan Facility | 675,000 | 0 |
Payments of debt issuance costs | (11,944) | 0 |
Net cash used in financing activities | (114,521) | (4,395) |
Net (decrease) increase in cash and cash equivalents | (43,041) | 36,895 |
Cash and cash equivalents - beginning of period | 186,388 | 10,964 |
Cash and cash equivalents - end of period | 143,347 | 47,859 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 12 | 0 |
Cash paid during the year for interest | 10,597 | 15,163 |
Supplemental disclosure of noncash activities: | ||
Public offering and strategic transition costs included in accounts payable and accrued expenses | 145 | 448 |
Cash-settled units liability reclassification to additional paid in capital | $ 1,632 | $ 0 |
NATURE OF OPERATIONS AND BASIS
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2022 | |
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 the 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 hair care products strategically developed to address three key uses: treatment, maintenance and protection. In January 2020, 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 for $1,381,582 (the “Acquisition”). Subsequent to the Acquisition, 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, in each case as discussed below, depending on the respective period discussed. Initial Public Offering On October 4, 2021, Olaplex Holdings completed an initial public offering of shares of its common stock (the “IPO”). See “Item 8. Financial Statements – Note 1. Nature of Operations and Basis of Presentation – Initial Public Offering” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”) for additional details on 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 a series of transactions (collectively, the “Reorganization Transactions”) pursuant to which all outstanding units of Penelope Group Holdings, L.P. were exchanged for an aggregate of 648,124,642 shares of common stock of Olaplex Holdings, Inc., and the options and cash-settled units of Penelope were converted into options and cash-settled units of Olaplex Holdings, Inc. See “Item 8. Financial Statements – Note 1. Nature of Operations and Basis of Presentation – Reorganization Transactions” in the Company’s 2021 Form 10-K for additional details on the Reorganization Transactions that were completed in connection with the IPO. Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements furnished reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. The interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying footnotes included in the Company’s 2021 Form 10-K. The financial statements for prior periods give effect to the Reorganization Transactions as referred in the 2021 Form 10-K. 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. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 stock settled rights; 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. 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 March 31, 2022 and December 31, 2021. Accounting Policies There have been no material changes in significant accounting policies as described in the Company’s consolidated financial statements for the year ended December 31, 2021. Constructive Retirement of Common Stock Repurchases When the Company's common stock is retired or purchased for constructive retirement for net share settlement of stock options, any excess purchase price over par value is allocated between additional paid-in-capital, to the extent that previous net gains from sales or retirements are included therein, and the remainder to retained earnings. 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 former limited partners of Penelope Group Holdings, L.P. and the holders of options to purchase shares of common stock of Penelope that were vested prior to the Reorganization Transactions (collectively, 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 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 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 Accounting 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 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. 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 adopted this accounting standard on January 1, 2022. Adoption of this standard did not have a material impact on its consolidated financial statements. Recently Accounting Pronouncement 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. |
NET SALES
NET SALES | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
NET SALES | NET SALESThe 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 Three Months Ended March 31, 2022 March 31, 2021 Net sales by Channel: Professional $ 77,059 $ 47,389 Specialty retail 64,272 31,740 DTC 44,865 38,990 Total Net sales $ 186,196 $ 118,119 Revenue by major geographic region is based upon the geographic location of customers who purchase our products. During the three months ended March 31, 2022 and March 31, 2021, our net sales to consumers in the United States and International regions were as follows: For the Three Months Ended March 31, 2022 March 31, 2021 Net sales by Geography: United States $ 120,110 $ 72,758 International 66,086 45,361 Total Net sales $ 186,196 $ 118,119 United Kingdom (“U.K”) net sales for the three months ended March 31, 2022 and March 31, 2021 were 9% and 13% of total net sales. No other International country exceeds 10% of total net sales. |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Inventory as of March 31, 2022 and December 31, 2021 consisted of the following: March 31, 2022 December 31, 2021 Raw materials $ 27,131 $ 20,852 Finished goods 90,340 77,547 Inventory $ 117,471 $ 98,399 |
INVESTMENT IN NONCONSOLIDATED E
INVESTMENT IN NONCONSOLIDATED ENTITY | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 and 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 entity. 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 and included in Other assets in our condensed consolidated balance sheet and consists of the following: March 31, 2022 December 31, 2021 Capital contributions, net of distributions and impairments $ 4,500 $ 4,500 Total investments in and advances to nonconsolidated entity $ 4,500 $ 4,500 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill and intangible assets are comprised of the following: March 31, 2022 Estimated Gross Carrying Accumulated Net carrying amount Brand name 25 years $ 952,000 $ (84,834) $ 867,166 Product formulations 15 years 136,000 (20,199) 115,801 Customer relationships 20 years 53,000 (5,904) 47,096 Software 3 years 1,311 (142) 1,169 Total finite-lived intangibles 1,142,311 (111,079) 1,031,232 Goodwill Indefinite 168,300 — 168,300 Total goodwill and other intangibles $ 1,310,611 $ (111,079) $ 1,199,532 Total amortization on finite-lived intangible assets was $12,533 for the three months ended March 31, 2022 and $12,450 for the three months ended March 31, 2021. The amortization of brand name and customer relationships of $10,183 for the three months ended March 31, 2022 and 2021 is recorded in the condensed consolidated statements of operations and comprehensive income. The amortization of software of $83 for the three months ended March 31, 2022 is recorded in the condensed consolidated statements of operations and comprehensive income. There was no amortization of software recorded for the three months ended March 31, 2021. The amortization for patented formulations for the three months ended March 31, 2022 was $2,267. The Company expensed $1,769 of patent amortization in cost of sales for the three months ended March 31, 2022 and capitalized $497 to inventory. The amortization for patented formulations for the three months ended March 31, 2021 was $2,267. The Company expensed $2,451 of patent amortization in cost of sales for the three months ended March 31, 2021, of which $185 was previously capitalized to inventory. December 31, 2021 Estimated Gross 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 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses as of March 31, 2022 and December 31, 2021 consisted of the following: March 31, 2022 December 31, 2021 Deferred revenue $ 5,004 $ 5,022 Accrued other 4,847 6,008 Payroll liabilities 1,510 6,302 Accrued expenses and other current liabilities $ 11,361 $ 17,332 |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Debt consisted of the following on March 31, 2022: February 2022 Credit Long-term debt Original term loan borrowing $ 675,000 Debt issuance costs (9,935) Total term loan debt 665,065 Less: Current portion (6,750) Long-term debt, net of current portion $ 658,315 Debt consisted of the following on December 31, 2021: January 2020 December 2020 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 On January 8, 2020, Olaplex, Inc., together with Penelope Intermediate Corp. acting as the parent guarantor, 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 2020 Term Loan Facility, the “2020 Credit Facilities”), which included a $10,000 letter of credit sub-facility and a $5,000 swingline loan 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”) which increased the 2020 Term Loan Facility by $350,000 and increased the 2020 Revolver capacity by $1,000 to a revised $800,000 2020 Term Loan Facility and $51,000 2020 Revolver. The unused balance of the 2020 Revolver as of December 31, 2021 was $51,000. Under the Original Credit Agreement, the Company 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, the Company 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 under the 2020 Credit Agreement were calculated based upon the Company’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. Interest expense, inclusive of debt amortization, was $15,502 for the three months ended March 31, 2021 and was recorded in interest expense in the condensed consolidated statements of operations and comprehensive income. On February 23 , 2022, Olaplex, 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, as administrative agent (the “Administrative Agent”), collateral agent and swingline lender, and each lender and issuing bank from time to time party thereto . The 2022 Credit Agreement refinanced and replaced the 2020 Credit Agreement with a seven five Under the 2022 Credit Facilities, the Company incurred OID costs of $10,257 and $1,688 of third-party issue costs. The interest rate on outstanding debt under the 2022 Term Loan Facility was 4.3% as of March 31, 2022. Borrowings under the 2022 Credit Facilities bear interest at rates based on the ratio of (i) the Company and its subsidiaries’ consolidated first lien net indebtedness to (ii) the Company and its subsidiaries’ consolidated EBITDA for applicable periods specified in the 2022 Credit Facilities (the “First Lien Leverage Ratio”). The interest rate per annum applicable to the loans under the 2022 Credit Facilities will be based on a fluctuating rate of interest equal to the sum of an applicable rate and, at the Company’s election from time to time, (1) a base rate determined by reference to the highest of (a) the rate of interest publicly announced by the Administrative Agent as its “prime rate” in effect at its principal office in New York City (or if the Administrative Agent has no “prime rate,” the rate last quoted by the Wall Street Journal as the “prime rate” or, if the Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the federal reserve board in federal reserve statistical release H.15 (519) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein or any similar release by the federal reserve board), (b) the greater of the (x) federal funds effective rate and (y) overnight bank funding rate, plus 0.50% and (c) one-month adjusted secured overnight financing rate (“SOFR”) plus 1.00%, (2) an adjusted SOFR determined by reference to the higher of (a) a rate equal to the SOFR in the form of a term rate published by the CME Term SOFR administrator (or any successor thereof) for an interest period of one, three or six months (or if such term rate is unavailable, a daily simple rate for an interest payment period of one, three or six months published by the federal reserve board of New York) two U.S. government securities business days prior to the commencement of such tenor (plus, solely with respect to the 2022 Term Loan Facility, a credit spread adjustment of 0.10% for all such interest periods) and (b) 0.00%, with respect to the 2022 Revolver and, 0.50%, with respect to the 2022 Term Loan Facility, and (3) with respect to a borrowing in Euros under the 2022 Revolver, a euro interbank offered rate (“EURIBOR”) determined by reference to the higher of (a) the EURIBOR administered by the European Money Markets Institute (or any successor thereof) for a period equal to one, three, six, or, if available to all relevant affected lenders, twelve months or a shorter period (as selected by the Company) appearing on Reuters Screen EURIBOR01 Page (or otherwise on the Reuters screen) two target days prior to the commencement of the applicable interest period and (b) 0.00%. The 2022 Revolver and swingline loans (which must be in base rate) have applicable rates equal to (x) 2.75%, in the case of base rate loans, 3.75%, in the case of adjusted SOFR loans and 3.75%, in the case of EURIBOR loans, if the First Lien Leverage Ratio is greater than 1.20:1.00, and (y) 2.50%, in the case of base rate loans, 3.50%, in the case of adjusted SOFR loans and 3.50%, in the case of EURIBOR loans, if the First Lien Leverage Ratio is less than or equal to 1.20:1.00. The 2022 Term Loan Facility has applicable rates equal to (x) 2.75%, in the case of base rate loans, and 3.75%, in the case of adjusted SOFR loans, if the First Lien Leverage Ratio is greater than 1.20:1.00, and (y) 2.50%, in the case of base rate loans, and 3.50%, in the case of adjusted SOFR loans, if the First Lien Leverage Ratio is less than or equal to 1.20:1.00. As of March 31, 2022, there was no balance outstanding under the 2022 Revolver, including letters of credit and swingline loans. Interest expense, inclusive of debt amortization, was $11,460 for the three months ended March 31, 2022 and was recorded in interest expense in the consolidated statements of operations and comprehensive income. The 2022 and 2020 Credit Agreements included reporting, financial, and maintenance covenants that require, among other things, for the Company to comply with certain maximum secured leverage ratios, which the Company was in compliance with on March 31, 2022 and December 31, 2021. Substantially all the assets of the Company constitute collateral under the 2022 Term Loan Facility and 2022 Revolver. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION On 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. See “Item 8. Financial Statements – Note 11. Share-Based Compensation” in the Company’s 2021 Form 10-K for additional information on the 2021 Plan. Conversion of Share-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 shares of common stock of Olaplex Holdings. See “Item 8. Financial Statements – Note 11. Share-Based Compensation – Conversion of Share-Based Options in Reorganization Transactions” in the Company’s 2021 Form 10-K for additional information. 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. Converted Cash-Settled Units On February 23, 2022 (the "modification date"), the Company modified the settlement terms of its outstanding unvested time- and performance-based cash-settled units from net cash settlement to net stock-settled stock appreciation rights (“SARs”). In addition, the vesting condition that 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 equals or exceeds the IPO price of $21 on each applicable vesting date was removed for such SARs. Under the amended award agreements, the Company will settle all vested SARs with shares of Company common stock measured as the difference between the stock price on the date of settlement and the base price per share of $2.97. All performance conditions were removed concurrently with the modification of the settlement terms. Other terms of the SAR grants remain unchanged. The modification results in a change of awards classification from liability to equity. The modified awards were accounted for as equity awards going forward from the modification date with a fair value measured on the modification date and recognized on a straight-line basis over the remaining requisite service period. The Company compared the fair value of the awards granted immediately before the modification date to the fair value of the modified awards and determined there was no change in the fair value at the modification date. Performance awards prior to the modification date were not expensed, given they were contingent upon achieving a market condition, until such market condition was achieved. Therefore, on the modification date, the Company reclassified the amounts previously recorded as a share-based compensation liability to a component of equity in the form of a credit to additional paid-in capital (“APIC”). As of the modification date, the Company converted 585,900 time-based and 301,050 market and performance-based cash-settled units into solely time-based stock-settled SARs. For the period through the modification date, the Company had recognized $1,632 as compensation expense in selling, general, and administrative expenses in the consolidated statements of operations and comprehensive income with a corresponding recording to liability which was reclassified to APIC on the modification date. On the modification date, the Company used the Black-Scholes valuation model in determining the fair value of the outstanding SARs, which required the application of certain assumptions, including the expected life of the SAR, stock price volatility, dividend rate and risk-free interest rate. The assumption used in determining the fair value of the SARs on the modification date were as follows: Time-Based Market and Performance-Based Expected term (in years) 2.50 1.85 Expected volatility 30 % 30 % Risk-free interest rate 1.68 % 1.58 % Expected dividend yield 0 0 Share price on valuation date $ 17.06 $ 17.06 These modified SARs are included in the weighted average diluted shares outstanding calculation set forth below in “Note 13 – Net Income Per Share”. Through the modification date, the Company recognized a recovery of cash-settled expense of $974 as a result of decline in the fair value of the awards since December 31, 2021. 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 March 31, 2022, a total of 92,292,025 shares have been authorized for issuance under the Penelope Holdings Corp. 2020 Omnibus Equity Incentive Plan (the “2020 Plan”) and 2021 Plan, with 43,859,514 remaining available to grant under the 2021 Plan and no shares available for issuance under the 2020 Plan. As of March 31, 2022, there were outstanding options to purchase an aggregate of 47,701,176 shares with 46,253,901 shares outstanding under the 2020 Plan and 1,447,275 shares outstanding under the 2021 Plan. As of March 31, 2022, there were options to purchase an aggregate of 2,476,053 shares with 2,362,500 forfeited under the 2020 Plan and 113,553 shares forfeited under the 2021 Plan. Share-based compensation expense for the three months ended March 31, 2022 of $1,696 was recognized in selling, general, and administrative expenses in the consolidated statements of operations and comprehensive income. As of March 31, 2022, the Company had not recognized compensation costs on unvested share-based options of $22,082 with a weighted average remaining recognition period of 3.26 years. Share-based compensation expense for the three months ended March 31, 2021 of $627 was recognized in selling, general and administrative expenses in the consolidated statements of operations and comprehensive income. As of March 31, 2021, the Company had not recognized compensation costs on unvested share-based options of $10,356 with a weighted average remaining recognition period of 4.41 years for time-based and 3.50 years for performance-based options. The following tables summarize the stock options, cash-settled units and SAR activity for the three months ended March 31, 2022 and March 31, 2021: Time-based options and stock-settled SARs Performance-based options Cash-settled units converted to stock-settled SARs Number of options and stock-settled SARs Weighted Average Number of options Weighted Average Time based Performance based Outstanding at December 31, 2021 42,687,518 $ 1.24 3,979,461 $ 1.17 596,700 $ 306,450 Granted 310,000 14.16 — — — — Cancelled/Forfeited (45,573) 11.49 — — (10,800) (5,400) Converted cash settled units to SAR's 886,950 2.97 — — (585,900) (301,050) Exercised and issued for shares (61,936) 2.97 — — — — Repurchased and canceled (55,244) $ 2.97 — $ — — $ — Outstanding at March 31, 2022 43,721,715 $ 1.35 3,979,461 $ 1.17 — $ — Vested and Exercisable 5,152,410 $ 0.88 3,979,461 $ 1.17 — $ — Time-based options Performance-based options Cash-settled units Number of options Weighted Average Number of options Weighted Average Time based Performance based Outstanding at December 31, 2020 15,997,500 $ 0.88 28,732,050 $ 0.81 — $ — Granted 1,056,375 $ 2.96 799,875 $ 2.97 641,250 $ 492,075 Cancelled/Forfeited (193,725) $ 2.24 (143,775) $ 2.24 — $ — Outstanding at March 31, 2021 16,860,150 $ 1.00 29,388,150 $ 0.86 641,250 $ 492,075 Vested and Exercisable 2,325,915 $ 0.76 — $ — — $ — The fair value of time-based options and stock-settled SARs granted were calculated using the following assumptions: Three Months Ended March 31, March 31, Expected term (years) 6.25 6.50 Expected volatility (%) 37 30 Risk-free interest rate (%) 2.13 1.62 Expected dividend yield (%) — — |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
EQUITY | EQUITYDuring the three months ended March 31, 2022, the Company converted 886,950 of cash-settled units into stock-settled SARs, with a fair value liability of $1,632 reclassified to APIC. See “Note 9. Share-Based Compensation – Conversion of Cash-Settled Units” for additional information. The Company issued 117,180 shares of its common stock upon vesting and settlement of the converted SARs. The Company repurchased 55,244 of outstanding shares of its common stock for the net settlement of SARs for payment of taxes related to such SARs, that were accounted for as share retirement. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS In July 2020, the Company entered into an agreement with CI&T, an information technology and software company, in which certain investment funds affiliated with Advent International Corporation (the “Advent Funds”) hold a greater than 10% equity interest. During the three months ended March 31, 2022 and 2021, the Company paid CI&T $5 and $119 respectively, for services related to the development, maintenance and enhancement of the Olaplex professional application, all of which were negotiated on an arm’s length basis and on market terms. Tax Receivable Agreement In connection with the Reorganization, the Company entered into the Tax Receivable Agreement with the Pre-IPO Stockholders. See further discussion in “Note 2 – Summary of Significant Accounting Policies – Tax Receivable Agreement”. |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
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. As of March 31, 2022 and December 31, 2021, the Company was not subject to any 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 | 3 Months Ended |
Mar. 31, 2022 | |
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: Three Months Ended March 31, March 31, Numerator: Net Income $ 61,961 $ 45,531 Denominator: Weighted average common shares outstanding – basic 648,813,998 647,994,569 Dilutive common equivalent shares from equity options 44,207,099 8,273,747 Weighted average common shares outstanding – diluted 693,021,097 656,268,316 Net income per share: Basic $ 0.10 $ 0.07 Diluted $ 0.09 $ 0.07 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements furnished reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. The interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying footnotes included in the Company’s 2021 Form 10-K. The financial statements for prior periods give effect to the Reorganization Transactions as referred in the 2021 Form 10-K. 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. |
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 stock settled rights; 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. |
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 March 31, 2022 and December 31, 2021. |
Constructive Retirement of Common Stock Repurchases | Constructive Retirement of Common Stock Repurchases When the Company's common stock is retired or purchased for constructive retirement for net share settlement of stock options, any excess purchase price over par value is allocated between additional paid-in-capital, to the extent that previous net gains from sales or retirements are included therein, and the remainder to retained earnings. |
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 former limited partners of Penelope Group Holdings, L.P. and the holders of options to purchase shares of common stock of Penelope that were vested prior to the Reorganization Transactions (collectively, 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 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 |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncement 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 Accounting 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 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. 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 adopted this accounting standard on January 1, 2022. Adoption of this standard did not have a material impact on its consolidated financial statements. Recently Accounting Pronouncement 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. |
NET SALES (Tables)
NET SALES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 Three Months Ended March 31, 2022 March 31, 2021 Net sales by Channel: Professional $ 77,059 $ 47,389 Specialty retail 64,272 31,740 DTC 44,865 38,990 Total Net sales $ 186,196 $ 118,119 For the Three Months Ended March 31, 2022 March 31, 2021 Net sales by Geography: United States $ 120,110 $ 72,758 International 66,086 45,361 Total Net sales $ 186,196 $ 118,119 |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventory as of March 31, 2022 and December 31, 2021 consisted of the following: March 31, 2022 December 31, 2021 Raw materials $ 27,131 $ 20,852 Finished goods 90,340 77,547 Inventory $ 117,471 $ 98,399 |
INVESTMENT IN NONCONSOLIDATED_2
INVESTMENT IN NONCONSOLIDATED ENTITY (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Securities without Readily Determinable Fair Value | Our investment is classified as a long-term asset and included in Other assets in our condensed consolidated balance sheet and consists of the following: March 31, 2022 December 31, 2021 Capital contributions, net of distributions and impairments $ 4,500 $ 4,500 Total investments in and advances to nonconsolidated entity $ 4,500 $ 4,500 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Goodwill and intangible assets are comprised of the following: March 31, 2022 Estimated Gross Carrying Accumulated Net carrying amount Brand name 25 years $ 952,000 $ (84,834) $ 867,166 Product formulations 15 years 136,000 (20,199) 115,801 Customer relationships 20 years 53,000 (5,904) 47,096 Software 3 years 1,311 (142) 1,169 Total finite-lived intangibles 1,142,311 (111,079) 1,031,232 Goodwill Indefinite 168,300 — 168,300 Total goodwill and other intangibles $ 1,310,611 $ (111,079) $ 1,199,532 December 31, 2021 Estimated Gross 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 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses as of March 31, 2022 and December 31, 2021 consisted of the following: March 31, 2022 December 31, 2021 Deferred revenue $ 5,004 $ 5,022 Accrued other 4,847 6,008 Payroll liabilities 1,510 6,302 Accrued expenses and other current liabilities $ 11,361 $ 17,332 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Debt consisted of the following on March 31, 2022: February 2022 Credit Long-term debt Original term loan borrowing $ 675,000 Debt issuance costs (9,935) Total term loan debt 665,065 Less: Current portion (6,750) Long-term debt, net of current portion $ 658,315 Debt consisted of the following on December 31, 2021: January 2020 December 2020 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 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Assumptions Used in Determining the Fair Value of Options and SARs | The assumption used in determining the fair value of the SARs on the modification date were as follows: Time-Based Market and Performance-Based Expected term (in years) 2.50 1.85 Expected volatility 30 % 30 % Risk-free interest rate 1.68 % 1.58 % Expected dividend yield 0 0 Share price on valuation date $ 17.06 $ 17.06 The fair value of time-based options and stock-settled SARs granted were calculated using the following assumptions: Three Months Ended March 31, March 31, Expected term (years) 6.25 6.50 Expected volatility (%) 37 30 Risk-free interest rate (%) 2.13 1.62 Expected dividend yield (%) — — |
Summary of Option, Cash Settled Units, and SAR Activity | The following tables summarize the stock options, cash-settled units and SAR activity for the three months ended March 31, 2022 and March 31, 2021: Time-based options and stock-settled SARs Performance-based options Cash-settled units converted to stock-settled SARs Number of options and stock-settled SARs Weighted Average Number of options Weighted Average Time based Performance based Outstanding at December 31, 2021 42,687,518 $ 1.24 3,979,461 $ 1.17 596,700 $ 306,450 Granted 310,000 14.16 — — — — Cancelled/Forfeited (45,573) 11.49 — — (10,800) (5,400) Converted cash settled units to SAR's 886,950 2.97 — — (585,900) (301,050) Exercised and issued for shares (61,936) 2.97 — — — — Repurchased and canceled (55,244) $ 2.97 — $ — — $ — Outstanding at March 31, 2022 43,721,715 $ 1.35 3,979,461 $ 1.17 — $ — Vested and Exercisable 5,152,410 $ 0.88 3,979,461 $ 1.17 — $ — Time-based options Performance-based options Cash-settled units Number of options Weighted Average Number of options Weighted Average Time based Performance based Outstanding at December 31, 2020 15,997,500 $ 0.88 28,732,050 $ 0.81 — $ — Granted 1,056,375 $ 2.96 799,875 $ 2.97 641,250 $ 492,075 Cancelled/Forfeited (193,725) $ 2.24 (143,775) $ 2.24 — $ — Outstanding at March 31, 2021 16,860,150 $ 1.00 29,388,150 $ 0.86 641,250 $ 492,075 Vested and Exercisable 2,325,915 $ 0.76 — $ — — $ — |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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: Three Months Ended March 31, March 31, Numerator: Net Income $ 61,961 $ 45,531 Denominator: Weighted average common shares outstanding – basic 648,813,998 647,994,569 Dilutive common equivalent shares from equity options 44,207,099 8,273,747 Weighted average common shares outstanding – diluted 693,021,097 656,268,316 Net income per share: Basic $ 0.10 $ 0.07 Diluted $ 0.09 $ 0.07 |
NATURE OF OPERATIONS AND BASI_2
NATURE OF OPERATIONS AND BASIS OF PRESENTATION - Narrative (Details) - USD ($) | Oct. 03, 2021 | Jan. 31, 2020 |
Nature of Operations and Basis of Presentation [Line Items] | ||
Reorganization share issuance (shares) | 648,124,642 | |
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 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | Oct. 04, 2021 |
Summary of Significant Accounting Policies [Line Items] | |
Tax receivable agreement, percent of savings for holders | 85.00% |
Tax receivable agreement, percent of tax benefits retained by company | 15.00% |
London Interbank Offered Rate (LIBOR) | |
Summary of Significant Accounting Policies [Line Items] | |
Tax receivable agreement, variable rate on basis spread | 3.00% |
NET SALES - Disaggregation of R
NET SALES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 186,196 | $ 118,119 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 120,110 | 72,758 |
International | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 66,086 | 45,361 |
Professional | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 77,059 | 47,389 |
Specialty retail | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 64,272 | 31,740 |
DTC | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 44,865 | $ 38,990 |
NET SALES - Narrative (Details)
NET SALES - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
United Kingdom | Geographic Concentration Risk | Revenue Benchmark | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 9.00% | 13.00% |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 27,131 | $ 20,852 |
Finished goods | 90,340 | 77,547 |
Inventory | $ 117,471 | $ 98,399 |
INVESTMENT IN NONCONSOLIDATED_3
INVESTMENT IN NONCONSOLIDATED ENTITY - Schedule of Investments in and Advances to Affiliates, Schedule of Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Equity Method Investments and Joint Ventures [Abstract] | ||
Capital contributions, net of distributions and impairments | $ 4,500 | $ 4,500 |
Total investments in and advances to nonconsolidated entity | $ 4,500 | $ 4,500 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,142,311 | $ 1,141,890 |
Accumulated amortization | (111,079) | (98,546) |
Net carrying amount | 1,031,232 | 1,043,344 |
Goodwill | 168,300 | 168,300 |
Gross Carrying Amount | 1,310,611 | 1,310,190 |
Net carrying amount | $ 1,199,532 | $ 1,211,644 |
Brand name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 25 years | 25 years |
Gross Carrying Amount | $ 952,000 | $ 952,000 |
Accumulated amortization | (84,834) | (75,314) |
Net carrying amount | $ 867,166 | $ 876,686 |
Product formulations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 15 years | 15 years |
Gross Carrying Amount | $ 136,000 | $ 136,000 |
Accumulated amortization | (20,199) | (17,932) |
Net carrying amount | $ 115,801 | $ 118,068 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 20 years | 20 years |
Gross Carrying Amount | $ 53,000 | $ 53,000 |
Accumulated amortization | (5,904) | (5,241) |
Net carrying amount | $ 47,096 | $ 47,759 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 3 years | 3 years |
Gross Carrying Amount | $ 1,311 | $ 890 |
Accumulated amortization | (142) | (59) |
Net carrying amount | $ 1,169 | $ 831 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of patent formulations | $ 12,533 | $ 12,450 |
Brand Name and Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of patent formulations | 10,183 | |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of patent formulations | 83 | |
Product formulations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of patent formulations | 1,769 | 2,451 |
Amortization of intangible assets, including amounts capitalized | 2,267 | 2,267 |
Amortization of intangible assets, amount capitalized | $ 497 | |
Reserve credit adjustment | $ 185 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Deferred revenue | $ 5,004 | $ 5,022 |
Accrued other | 4,847 | 6,008 |
Payroll liabilities | 1,510 | 6,302 |
Accrued expenses and other current liabilities | $ 11,361 | $ 17,332 |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long Term Debt Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Original term loan borrowing | $ 769,235 | |
Debt issuance costs | (11,033) | |
Long-term debt | 758,202 | |
Current portion of long-term debt | $ (6,750) | (20,112) |
Long-term debt | 658,315 | 738,090 |
February 2022 Credit Facility | Secured Debt | ||
Debt Instrument [Line Items] | ||
Original term loan borrowing | 675,000 | |
Debt issuance costs | (9,935) | |
Long-term debt | 665,065 | |
Current portion of long-term debt | (6,750) | |
Long-term debt | $ 658,315 | |
January 2020 Credit Agreement | Secured Debt | ||
Debt Instrument [Line Items] | ||
Original term loan borrowing | 430,312 | |
Debt issuance costs | (6,986) | |
Long-term debt | 423,326 | |
Current portion of long-term debt | (11,250) | |
Long-term debt | 412,076 | |
December 2020 Amendment | Secured Debt | ||
Debt Instrument [Line Items] | ||
Original term loan borrowing | 338,923 | |
Debt issuance costs | (4,047) | |
Long-term debt | 334,876 | |
Current portion of long-term debt | (8,862) | |
Long-term debt | $ 326,014 |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) - USD ($) | Feb. 23, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 18, 2020 | Jan. 08, 2020 |
Debt Instrument [Line Items] | ||||||
Interest expense, debt | $ 11,460,000 | $ 15,502,000 | ||||
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 | |||||
2020 Term Loan Facility | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, effective percentage | 7.50% | |||||
2020 Term Loan Facility | Secured Debt | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Long-term line of credit | $ 0 | |||||
February 2022 Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Original issue discount | $ 10,257,000 | |||||
Third party issue costs | $ 1,688,000 | |||||
February 2022 Credit Facility | Revolving Credit Facility | First Lien Leverage Ratio Greater Than 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, covenant, leverage ratio | 1.20 | |||||
February 2022 Credit Facility | Revolving Credit Facility | First Lien Leverage Ratio Equal To 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, covenant, leverage ratio | 1.20 | |||||
February 2022 Credit Facility | Revolving Credit Facility | Base Rate | First Lien Leverage Ratio Greater Than 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.75% | |||||
February 2022 Credit Facility | Revolving Credit Facility | Base Rate | First Lien Leverage Ratio Equal To 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.50% | |||||
February 2022 Credit Facility | Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | First Lien Leverage Ratio Greater Than 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 3.75% | |||||
February 2022 Credit Facility | Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | First Lien Leverage Ratio Equal To 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 3.50% | |||||
February 2022 Credit Facility | Revolving Credit Facility | EURIBOR Rate | First Lien Leverage Ratio Greater Than 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 3.75% | |||||
February 2022 Credit Facility | Revolving Credit Facility | EURIBOR Rate | First Lien Leverage Ratio Equal To 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 3.50% | |||||
February 2022 Credit Facility | Bridge Loan | First Lien Leverage Ratio Greater Than 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, covenant, leverage ratio | 1.20 | |||||
February 2022 Credit Facility | Bridge Loan | First Lien Leverage Ratio Equal To 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, covenant, leverage ratio | 1.20 | |||||
February 2022 Credit Facility | Bridge Loan | Base Rate | First Lien Leverage Ratio Greater Than 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.75% | |||||
February 2022 Credit Facility | Bridge Loan | Base Rate | First Lien Leverage Ratio Equal To 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.50% | |||||
February 2022 Credit Facility | Bridge Loan | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | First Lien Leverage Ratio Greater Than 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 3.75% | |||||
February 2022 Credit Facility | Bridge Loan | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | First Lien Leverage Ratio Equal To 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 3.50% | |||||
February 2022 Credit Facility | Bridge Loan | EURIBOR Rate | First Lien Leverage Ratio Greater Than 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 3.75% | |||||
February 2022 Credit Facility | Bridge Loan | EURIBOR Rate | First Lien Leverage Ratio Equal To 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 3.50% | |||||
February 2022 Credit Facility | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 675,000,000 | |||||
Long-term debt, term | 7 years | |||||
February 2022 Credit Facility | Secured Debt | Fed Funds Effective Rate Overnight Index Swap Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.50% | |||||
February 2022 Credit Facility | Secured Debt | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.00% | |||||
Credit spread adjustment (percent) | 0.10% | |||||
February 2022 Credit Facility | Secured Debt | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 150,000,000 | |||||
Long-term debt, term | 5 years | |||||
February 2022 Credit Facility | Secured Debt | Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||||
Debt Instrument [Line Items] | ||||||
Credit spread adjustment (percent) | 0.00% | |||||
February 2022 Credit Facility | Secured Debt | Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 25,000,000 | |||||
February 2022 Credit Facility | Secured Debt | Bridge Loan | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 25,000,000 | |||||
2022 Term Loan Facility | First Lien Leverage Ratio Greater Than 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, covenant, leverage ratio | 1.20 | |||||
2022 Term Loan Facility | First Lien Leverage Ratio Equal To 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, covenant, leverage ratio | 1.20 | |||||
2022 Term Loan Facility | Base Rate | First Lien Leverage Ratio Greater Than 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.75% | |||||
2022 Term Loan Facility | Base Rate | First Lien Leverage Ratio Equal To 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.50% | |||||
2022 Term Loan Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | First Lien Leverage Ratio Greater Than 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 3.75% | |||||
2022 Term Loan Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | First Lien Leverage Ratio Equal To 1.20 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 3.50% | |||||
2022 Term Loan Facility | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, effective percentage | 4.30% | |||||
2022 Term Loan Facility | Secured Debt | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||||
Debt Instrument [Line Items] | ||||||
Credit spread adjustment (percent) | 0.50% | |||||
2022 Term Loan Facility | Secured Debt | EURIBOR Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.00% |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) $ / shares in Units, $ in Thousands | Mar. 31, 2022USD ($)shares | Feb. 23, 2022USD ($)day$ / sharesshares | Oct. 04, 2021$ / sharesshares | Mar. 31, 2021USD ($)shares | Feb. 23, 2022USD ($)day$ / shares | Mar. 31, 2022USD ($)shares | Mar. 31, 2021USD ($)shares | Dec. 31, 2021shares | Dec. 31, 2020shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Base share price (usd per share) | $ / shares | $ 2.97 | $ 2.97 | |||||||
Share-based compensation expense | $ | $ 1,696 | $ 627 | |||||||
Outstanding options (shares) | 47,701,176 | 47,701,176 | |||||||
Forfeited (shares) | 2,476,053 | ||||||||
Unrecognized cost, amount | $ | $ 22,082 | $ 10,356 | $ 22,082 | $ 10,356 | |||||
Selling, General and Administrative Expenses | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based compensation expense | $ | $ 1,632 | ||||||||
IPO | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Sale of stock, price per share (usd per share) | $ / shares | $ 21 | ||||||||
Time-based options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Recognition period (years) | 5 years | ||||||||
Granted (shares) | 1,056,375 | ||||||||
Outstanding options (shares) | 16,860,150 | 16,860,150 | 15,997,500 | ||||||
Cost not yet recognized, period for recognition | 4 years 4 months 28 days | ||||||||
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% | ||||||||
Performance-based options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Recognition period (years) | 3 years | ||||||||
Options converted in period, number of shares | 0 | ||||||||
Granted (shares) | 0 | 799,875 | |||||||
Outstanding options (shares) | 3,979,461 | 29,388,150 | 3,979,461 | 29,388,150 | 3,979,461 | 28,732,050 | |||
Cost not yet recognized, period for recognition | 3 years 6 months | ||||||||
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% | ||||||||
Stock Appreciation Rights (SARs) | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Threshold consecutive trading days | day | 30 | 30 | |||||||
Cash settled expense | $ | $ 974 | ||||||||
Time-Based | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Options converted in period, number of shares | 585,900 | ||||||||
Market and Performance-Based | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Options converted in period, number of shares | 301,050 | ||||||||
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 3 days | ||||||||
2021 Omnibus Equity Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Outstanding options (shares) | 1,447,275 | 1,447,275 | |||||||
Forfeited (shares) | 113,553 | ||||||||
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) | 43,859,514 | 43,859,514 | |||||||
2020 Omnibus Equity Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Outstanding options (shares) | 46,253,901 | 46,253,901 | |||||||
Forfeited (shares) | 2,362,500 | ||||||||
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 - Valu
SHARE-BASED COMPENSATION - Valuation Assumptions (Details) - $ / shares | Feb. 23, 2022 | Mar. 31, 2022 | Mar. 31, 2021 |
Time-Based | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (years) | 2 years 6 months | ||
Expected volatility (%) | 30.00% | ||
Risk-free interest rate (%) | 1.68% | ||
Expected dividend yield (%) | 0.00% | ||
Share price on valuation date (in usd per share) | $ 17.06 | ||
Market and Performance-Based | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (years) | 1 year 10 months 6 days | ||
Expected volatility (%) | 30.00% | ||
Risk-free interest rate (%) | 1.58% | ||
Expected dividend yield (%) | 0.00% | ||
Share price on valuation date (in usd per share) | $ 17.06 | ||
Time-based options and stock-settled SARs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (years) | 6 years 3 months | 6 years 6 months | |
Expected volatility (%) | 37.00% | 30.00% | |
Risk-free interest rate (%) | 2.13% | 1.62% | |
Expected dividend yield (%) | 0.00% | 0.00% |
SHARE-BASED COMPENSATION - Opti
SHARE-BASED COMPENSATION - Options, Cash Settle Units, and SARs Activity (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Number of options | ||
Outstanding at end of period (shares) | 47,701,176 | |
Time-based | ||
Cash-settled units | ||
Outstanding at beginning of period | 596,700 | 0 |
Granted (shares) | 0 | 641,250 |
Cancelled/Forfeited (shares) | (10,800) | 0 |
Converted cash settled units to SAR's | (585,900) | |
Outstanding at end of period | 0 | 641,250 |
Performance-based | ||
Cash-settled units | ||
Outstanding at beginning of period | 306,450 | 0 |
Granted (shares) | 0 | 492,075 |
Cancelled/Forfeited (shares) | (5,400) | 0 |
Converted cash settled units to SAR's | (301,050) | |
Outstanding at end of period | 0 | 492,075 |
Time-based options and stock-settled SARs | ||
Number of options | ||
Outstanding at beginning of period (shares) | 42,687,518 | |
Granted (shares) | 310,000 | |
Cancelled/Forfeited (shares) | (45,573) | |
Converted cash settled units to SAR's (shares) | 886,950 | |
Exercised and issued for shares (shares) | (61,936) | |
Repurchased and canceled (shares) | (55,244) | |
Outstanding at end of period (shares) | 43,721,715 | |
Weighted Average Exercise Price Per Share | ||
Outstanding at beginning of period (in usd per share) | $ 1.24 | |
Granted (in usd per share) | 14.16 | |
Cancelled/Forfeited (in usd per share) | 11.49 | |
Converted cash settled units to SAR's (in usd per share) | 2.97 | |
Exercised and issued for shares (in usd per share) | 2.97 | |
Repurchased and canceled (in usd per share) | 2.97 | |
Outstanding at end of period (in usd per share) | $ 1.35 | |
Vested and exercisable at end of period (in shares) | 5,152,410 | |
Vested and exercisable at end of period (in usd per share) | $ 0.88 | |
Time-based options | ||
Number of options | ||
Outstanding at beginning of period (shares) | 15,997,500 | |
Granted (shares) | 1,056,375 | |
Cancelled/Forfeited (shares) | (193,725) | |
Outstanding at end of period (shares) | 16,860,150 | |
Weighted Average Exercise Price Per Share | ||
Outstanding at beginning of period (in usd per share) | $ 0.88 | |
Granted (in usd per share) | 2.96 | |
Cancelled/Forfeited (in usd per share) | 2.24 | |
Outstanding at end of period (in usd per share) | $ 1 | |
Vested and exercisable at end of period (in shares) | 2,325,915 | |
Vested and exercisable at end of period (in usd per share) | $ 0.76 | |
Performance-based options | ||
Number of options | ||
Outstanding at beginning of period (shares) | 3,979,461 | 28,732,050 |
Granted (shares) | 0 | 799,875 |
Cancelled/Forfeited (shares) | 0 | (143,775) |
Converted cash settled units to SAR's (shares) | 0 | |
Exercised and issued for shares (shares) | 0 | |
Repurchased and canceled (shares) | 0 | |
Outstanding at end of period (shares) | 3,979,461 | 29,388,150 |
Weighted Average Exercise Price Per Share | ||
Outstanding at beginning of period (in usd per share) | $ 1.17 | $ 0.81 |
Granted (in usd per share) | 0 | 2.97 |
Cancelled/Forfeited (in usd per share) | 0 | 2.24 |
Converted cash settled units to SAR's (in usd per share) | 0 | |
Exercised and issued for shares (in usd per share) | 0 | |
Repurchased and canceled (in usd per share) | 0 | |
Outstanding at end of period (in usd per share) | $ 1.17 | $ 0.86 |
Vested and exercisable at end of period (in shares) | 3,979,461 | 0 |
Vested and exercisable at end of period (in usd per share) | $ 1.17 | $ 0 |
EQUITY - Narrative (Details)
EQUITY - Narrative (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($)shares | |
Equity [Line Items] | |
Cash settled units converted to stock appreciation rights | 886,950 |
Exercise of stock-settled stock appreciation rights (shares) | 117,180 |
Shares withheld and retired for taxes on exercise of stock settled appreciation rights (shares) | 55,244 |
Stock Appreciation Rights (SARs) | |
Equity [Line Items] | |
Cash settled units converted to stock appreciation rights, fair value liability reclassified to APIC | $ | $ 1,632 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Expenses from transaction with related party | $ 5 | $ 119 |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net income | $ 61,961 | $ 45,531 |
Denominator: | ||
Weighted average common shares outstanding - basic (in shares) | 648,813,998 | 647,994,569 |
Dilutive common equivalent shares from equity options | 44,207,099 | 8,273,747 |
Weighted average common shares outstanding – diluted (in shares) | 693,021,097 | 656,268,316 |
Net income per share: | ||
Net income (loss) per share: Basic (in usd per share) | $ 0.10 | $ 0.07 |
Net income (loss) per share: Diluted (in usd per share) | $ 0.09 | $ 0.07 |