As used in this Quarterly Report on Form 10-Q (“Quarterly Report”), the terms identified below have the meanings specified below unless otherwise noted or the context indicates otherwise. Except where the context otherwise requires or where otherwise indicated, the terms “OLAPLEX” “we,” “us,” “our,” “the Company,” and “our business” refer to Olaplex Holdings, Inc. and its consolidated subsidiaries.

•“~~2020 Credit Agreement~~” refers to the Credit Agreement, dated as of January 8, 2020, by and among Olaplex, Inc., Penelope Intermediate Corp., MidCap Financial Trust, as administrative agent, collateral agent and swingline lender, and each lender and issuing bank from time to time party thereto, as amended by the First Incremental Amendment to the 2020 Credit Agreement, dated as of December 18, 2020. The 2020 Credit Agreement was refinanced and replaced by the 2022 Credit Agreement.

•“2022 Credit Agreement” refers to the Credit Agreement, dated as of February 23, 2022, by and among Olaplex, Inc., Penelope Intermediate Corp, Goldman Sachs Bank USA, as 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, and~~ includes, among other things, a $675 million seven-year senior-secured term loan facility (the “2022 Term Loan Facility”) and a $150 million five-year senior-secured revolving credit facility (the “2022 Revolver”).

•“Pre-IPO Tax Assets” refers to, collectively, certain tax attributes existing prior to the IPO, 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.

•“Reorganization Transactions” refers to the internal reorganization completed in connection with our IPO, pursuant to which Olaplex Holdings, Inc. became an indirect parent of Olaplex, Inc. For further information, see “Reorganization Transactions” in “Note 1 - Nature of Operations and Basis of Presentation” to our Consolidated Financial Statements included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

•“Tax Receivable Agreement” refers to the income tax receivable agreement entered into by the Company in connection with the Reorganization Transactions under which the Company is required to pay the Pre-IPO Stockholders 85% of the cash savings, if any, in United States (“U.S.”) federal, state or local tax that the Company actually realizes on its taxable income following the IPO, as specified in the Tax Receivable Agreement.

This Quarterly Report ~~on Form 10-Q (the “Quarterly Report”)~~ contains certain forward-looking statements and information relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, us. These statements include, but are not limited to, statements about our strategies, plans, objectives, expectations, intentions, expenditures and assumptions and other statements contained in or incorporated by reference in this Quarterly Report that are not historical or current facts. When used in this document, words such as “may,” “will,” “could,” “should,” “intend,” “potential,” “continue,” “anticipate,” “believe,” “estimate,” “expect,” “plan,” “target,” “predict,” “project,” “forecast,” “seek” and similar expressions as they relate to us are intended to identify forward-looking statements.

The forward-looking statements in this Quarterly Report reflect our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operation. Examples of forward-looking statements include, among others, statements we make regarding: our financial position, sales and operating results; our business plans, strategies, investments and ~~objectives, including sales and marketing investments;~~objectives; general economic and industry trends; our business prospects; our reputation and brand; our product technology; future product development and ~~introduction, including entry into adjacent and other categories;~~introduction; growth and expansion opportunities, including expansion in existing markets and into new markets; our sales channels and omnichannel strategy; legal proceedings; changes in laws and regulations; future payments under our Tax Receivable Agreement; our customer base; our supply chain and global distribution network; our information technology; our employees and culture; our operational capabilities; interest rate derivatives; and our expenses, inventory levels, other working capital, indebtedness and liquidity. Forward-looking statements are predictions based upon assumptions that may not prove to be accurate, and they are not guarantees of future performance. As such, you should not place significant reliance on our forward-looking statements. Neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements, including any such statements taken from third party industry and market reports.

Forward-looking statements involve known and unknown risks, inherent uncertainties and other factors that are difficult to predict which may cause our actual results, performance, time frames or achievements to be materially different from any future results, performance, time frames or achievements expressed or implied by the forward-looking statements, including, without limitation, the following:

Many of these factors are macroeconomic in nature and are, therefore, beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from those described in this Quarterly Report as anticipated, believed, estimated, expected, intended, planned or projected. We discuss many of these risks in greater detail in the “Risk Factors” section of our ~~2022~~2023 Form 10-K. The forward-looking statements included in this Quarterly Report are made only as of the date hereof. Unless required by law, we neither intend nor assume any obligation to update these forward-looking statements for any reason after the date of this Quarterly Report to conform these statements to actual results or to changes in our expectations or otherwise.


		March 31, 2023		December 31, 2022
	March 31, 2024					March 31, 2024	December 31, 2023
Assets	Assets
Current Assets:	Current Assets:
Current Assets:
Current Assets:
Cash and cash equivalents	Cash and cash equivalents	$	369,340	$	322,808
Accounts receivable, net of allowances of $17,499 and $19,198		45,516		46,220
Cash and cash equivalents
Cash and cash equivalents
Accounts receivable, net of allowances of $19,079 and $21,465
Inventory	Inventory	132,014		144,425
Other current assets	Other current assets	16,665		8,771
Total current assets	Total current assets	563,535		522,224
Property and equipment, net	Property and equipment, net	1,026		1,034
Intangible assets, net	Intangible assets, net	982,962		995,028
Goodwill	Goodwill	168,300		168,300

Other assets	Other assets	10,004		11,089
Other assets
Other assets
Total assets	Total assets	$	1,725,827	$	1,697,675

Liabilities and stockholders’ equity	Liabilities and stockholders’ equity
Liabilities and stockholders’ equity
Liabilities and stockholders’ equity
Current Liabilities:	Current Liabilities:
Current Liabilities:
Current Liabilities:
Accounts payable
Accounts payable
Accounts payable	Accounts payable	$	9,408	$	9,748
Sales and income taxes payable	Sales and income taxes payable	5,799		3,415
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	19,919		17,107
Current portion of long-term debt	Current portion of long-term debt	6,750		8,438
Current portion of Related Party payable pursuant to Tax Receivable Agreement	Current portion of Related Party payable pursuant to Tax Receivable Agreement	16,352		16,380
Total current liabilities	Total current liabilities	58,228		55,088
Long-term debt	Long-term debt	653,006		654,333
Deferred tax liabilities	Deferred tax liabilities	2,301		1,622
Related Party payable pursuant to Tax Receivable Agreement	Related Party payable pursuant to Tax Receivable Agreement	205,675		205,675
Other liabilities
Total liabilities	Total liabilities	919,210		916,718

Contingencies (Note 10)
Contingencies (Note 11)
Contingencies (Note 11)
Contingencies (Note 11)

Stockholders’ equity (Notes 1 and 8):
Common stock, $0.001 par value per share; 2,000,000,000 shares authorized, 653,776,766 and 650,091,380 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		653		649
Stockholders’ equity (Notes 1 and 9):
Stockholders’ equity (Notes 1 and 9):
Stockholders’ equity (Notes 1 and 9):
Common stock, $0.001 par value per share; 2,000,000,000 shares authorized, 661,283,677 and 660,731,935 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
Common stock, $0.001 par value per share; 2,000,000,000 shares authorized, 661,283,677 and 660,731,935 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
Common stock, $0.001 par value per share; 2,000,000,000 shares authorized, 661,283,677 and 660,731,935 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
Preferred stock, $0.001 par value per share; 25,000,000 shares authorized and no shares issued and outstanding	Preferred stock, $0.001 par value per share; 25,000,000 shares authorized and no shares issued and outstanding	—		—
Additional paid-in capital	Additional paid-in capital	318,124		312,875
Accumulated other comprehensive income	Accumulated other comprehensive income	2,020		2,577
Retained earnings	Retained earnings	485,820		464,856
Total stockholders’ equity	Total stockholders’ equity	806,617		780,957
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	1,725,827	$	1,697,675

Three Months Ended
March 31,

2023

2022

Three Months Ended
March 31,

2024

Net sales

113,787

186,196

Cost of sales:

Cost of product (excluding amortization)

31,235

43,222

Amortization of patented formulations

1,742

1,769

Amortization of patented formulations

Total cost of sales

32,977

44,991

Gross profit

80,810

141,205

Gross profit

Operating expenses:

Selling, general, and administrative

34,924

22,314

Selling, general, and administrative

Amortization of other intangible assets

10,323

10,266

Total operating expenses

45,247

32,580

Total operating expenses

Operating income

35,563

108,625

Interest expense, net

(10,543)

(11,460)

Other income (expense), net

Loss on extinguishment of debt

—

(18,803)

Other income (expense), net

242

(377)

Total other income (expense), net

242

(19,180)

Operating income

Interest expense

Interest income

Other (expense) income, net

Income before provision for income taxes

25,262

77,985

Income tax provision

4,298

16,024

Income tax provision

Net income

20,964

61,961

Net income per share:

Basic

0.03

0.10

Diluted

0.03

0.09

Diluted

Weighted average common shares outstanding:

Basic

651,730,993

648,813,998

Basic

Diluted

683,485,182

693,021,097

Other comprehensive loss:

Unrealized loss on derivatives, net of income tax effect

(557)

—

Total other comprehensive loss:

(557)

—

Comprehensive income:

20,407

61,961

Unrealized loss on derivatives, net of income tax effect

Total other comprehensive loss

Comprehensive income

Shares
(Note 1) Amount Additional Paid
in Capital Accumulated Other Comprehensive Income Retained
Earnings Total Equity
Balance - December 31, 2022 650,091,380 $ 649 $ 312,875 $ 2,577 $ 464,856 $ 780,957
Net income — — — — 20,964 20,964
Exercise of stock-settled stock appreciation rights 109,620 — 326 — — 326
Shares withheld and retired for taxes on exercise of stock-settled stock appreciation rights (83,501) — (390) — — (390)
Exercise of stock options 3,659,267 4 3,295 — — 3,299
Share-based compensation expense — — 2,018 — — 2,018
Unrealized loss on derivatives (net of taxes) — — — (557) — (557)
Balance – March 31, 2023 653,776,766 $ 653 $ 318,124 $ 2,020 $ 485,820 $ 806,617


	Shares (Note 1)	Amount		Additional Paid in Capital		Accumulated Other Comprehensive Income		Retained Earnings		Total Equity
Balance - December 31, 2023	660,731,935	$	671	$	316,489	$	1,365	$	526,443	$	844,968
Net income	—	—		—		—		7,746		7,746
Issuance of shares upon exercise of stock options and vesting of restricted stock units	551,742	4		171		—		—		175
Share-based compensation expense	—	—		3,183		—		—		3,183
Unrealized loss on derivatives (net of taxes)	—	—		—		(361)		—		(361)
Balance – March 31, 2024	661,283,677	$	675	$	319,843	$	1,004	$	534,189	$	855,711

Shares
(Note 1) Amount Additional Paid
in Capital Accumulated Other Comprehensive Income Retained
Earnings Total Equity
Balance - December 31, 2021 648,794,041 $ 648 $ 302,866 $ — $ 220,784 $ 524,298
Net income — — — — 61,961 61,961
Conversion of cash settled units to stock appreciation rights — — 1,632 — — 1,632
Exercise of stock-settled stock appreciation rights 117,180 — 348 — — 348
Shares withheld and retired for taxes on exercise of stock-settled stock appreciation rights (55,244) — (920) — — (920)
Share-based compensation expense — — 1,696 — — 1,696
Balance – March 31, 2022 648,855,977 $ 648 $ 305,622 $ — $ 282,745 $ 589,015


	Shares (Note 1)	Amount		Additional Paid in Capital		Accumulated Other Comprehensive Income		Retained Earnings		Total Equity
Balance - December 31, 2022	650,091,380	$	649	$	312,875	$	2,577	$	464,856	$	780,957
Net income	—	—		—		—		20,964		20,964
Exercise of stock-settled stock appreciation rights	109,620	—		326		—		—		326
Shares withheld and retired on exercise of stock-settled stock appreciation rights	(83,501)	—		(390)		—		—		(390)
Exercise of stock options	3,659,267	4		3,295		—		—		3,299
Share-based compensation expense	—	—		2,018		—		—		2,018
Unrealized loss on derivatives (net of taxes)	—	—		—		(557)		—		(557)
Balance – March 31, 2023	653,776,766	$	653	$	318,124	$	2,020	$	485,820	$	806,617


		Three Months Ended March 31,
		2023		2022
	Three Months Ended March 31,						Three Months Ended March 31,
	2024					2024		2023
Cash flows from operating activities:	Cash flows from operating activities:
Net income	Net income	$	20,964	$	61,961
Net income
Net income
Adjustments to reconcile net income to net cash from operations provided by operating activities:	Adjustments to reconcile net income to net cash from operations provided by operating activities:
Amortization of patent formulations
Amortization of patent formulations
Amortization of patent formulations	Amortization of patent formulations	1,742		1,769
Amortization of other intangibles	Amortization of other intangibles	10,323		10,266
Inventory write-off and disposal	Inventory write-off and disposal	2,610		4,324

Depreciation of fixed assets	Depreciation of fixed assets	116		75
Depreciation of fixed assets
Depreciation of fixed assets

Amortization of debt issuance costs
Amortization of debt issuance costs
Amortization of debt issuance costs	Amortization of debt issuance costs	453		146
Deferred taxes	Deferred taxes	847		(1,712)
Share-based compensation expense	Share-based compensation expense	2,018		1,696
Loss on extinguishment of debt		—		18,803
Other operating	Other operating	265		—
Changes in operating assets and liabilities, net of effects of acquisition (as applicable):
Changes in operating assets and liabilities:
Accounts receivable, net
Accounts receivable, net
Accounts receivable, net	Accounts receivable, net	704		(28,135)
Inventory	Inventory	10,407		(22,899)
Other current assets	Other current assets	(7,108)		1,425
Accounts payable	Accounts payable	(340)		9,838
Accrued expenses and other current liabilities		5,116		14,412
Accrued expenses, sales tax and income tax payable
Other assets and liabilities	Other assets and liabilities	(28)		—
Net cash provided by operating activities	Net cash provided by operating activities	48,089		71,969

Cash flows from investing activities:	Cash flows from investing activities:
Cash flows from investing activities:
Cash flows from investing activities:
Purchase of property and equipment	Purchase of property and equipment	(107)		(68)
Purchase of property and equipment
Purchase of property and equipment

Purchase of software
Purchase of software
Purchase of software	Purchase of software	(524)		(421)

Net cash used in investing activities	Net cash used in investing activities	(631)		(489)

Net cash used in investing activities

Net cash used in investing activities

Cash flows from financing activities:
Cash flows from financing activities:
Cash flows from financing activities:	Cash flows from financing activities:

Proceeds from exercise of stock options	Proceeds from exercise of stock options	2,513		—
Payments for shares withheld and retired for taxes and exercise price for stock-settled share appreciation rights		(64)		(572)
Principal payments for 2022 Term Loan Facility, and principal payments and prepayment fees for 2020 Term Loan Facility		(3,375)		(777,005)

Proceeds from the issuance of 2022 Term Loan Facility		—		675,000
Payments of debt issuance costs		—		(11,944)
Proceeds from exercise of stock options

Proceeds from exercise of stock options
Payments related to shares withheld and retired to cover tax withholding obligation for SARs

Principal payments of Term Loan
Principal payments of Term Loan
Principal payments of Term Loan

Net cash used in financing activities
Net cash used in financing activities
Net cash used in financing activities	Net cash used in financing activities	(926)		(114,521)

Net increase (decrease) in cash and cash equivalents		46,532		(43,041)
Net increase in cash and cash equivalents
Net increase in cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents - beginning of period	Cash and cash equivalents - beginning of period	322,808		186,388
Cash and cash equivalents - end of period	Cash and cash equivalents - end of period	$	369,340	$	143,347

Supplemental disclosure of cash flow information:	Supplemental disclosure of cash flow information:
Supplemental disclosure of cash flow information:
Supplemental disclosure of cash flow information:
Cash paid for income taxes
Cash paid for income taxes
Cash paid for income taxes	Cash paid for income taxes	$	91	$	12
Cash paid during the year for interest	Cash paid during the year for interest	$	13,853	$	10,597
Supplemental disclosure of noncash activities:
Assets acquired under operating lease
Assets acquired under operating lease
Assets acquired under operating lease
Intangible assets non cash transaction
Property and equipment non cash transaction

Supplemental disclosure of noncash activities:
Public offering and strategic transition costs included in accounts payable and accrued expenses		$	—	$	145

Cash-settled units liability reclassification to additional paid in capital		$	—	$	1,632

Olaplex Holdings, Inc. (“Olaplex Holdings” and, together with its subsidiaries, the “Company”) is a Delaware corporation that was incorporated on June 8, 2021. Olaplex Holdings is organized as a holding company and operates indirectly through Olaplex, Inc., its wholly owned ~~subsidiaries, Penelope and Olaplex, Inc.,~~indirect subsidiary, 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 prestige hair care products to professional hair salons, retailers and everyday consumers. Olaplex develops, manufactures and distributes a line of hair care products developed to address three key uses: treatment, maintenance and protection.

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 unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and accompanying footnotes included in the Company’s ~~2022 Annual Report on~~2023 Form ~~10-K as filed on February 28, 2023.~~10-K.

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, allowance for promotions, and refunds; loss contingencies; the fair value of share-based options and stock settled stock appreciation rights (“SARs”); the fair value of and/or potential impairment of goodwill and intangible assets for the Company’s reporting unit; the fair value of the Company’s interest rate cap; useful lives of the Company’s tangible and intangible assets; ~~allowance for promotions;~~ estimated income tax expense and tax ~~receivable~~ payments; future payment obligations under the Tax Receivable Agreement; the net realizable value of, and demand for the Company’s inventory. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties.

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:

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 Condensed Consolidated Balance Sheets, which may differ from fair value. The Company’s interest rate cap is recorded at its Level 32 fair value in the Condensed Consolidated Balance Sheets.

~~As part of~~In connection with the ~~IPO,~~Reorganization Transactions, the Company entered into the Tax Receivable Agreement under which the Company will be required to pay to the Pre-IPO Stockholders 85% of the federal, state or local tax cash savings that the Company actually realizes on its taxable income following the IPO, as a result of the amortization of intangible assets and capitalized transaction costs that existed as of the date of the IPO. Under the Tax Receivable Agreement, generally the Company will retain the benefit of the remaining 15% of the applicable tax savings.

The ~~tax~~Tax Receivable Agreement liability is calculated based on current tax laws and the assumption that the Company and its subsidiaries will earn sufficient taxable income to realize the full tax benefits subject to the Tax Receivable Agreement. Updates to the Company’s blended state tax rate, ~~and~~ allocation of U.S. versus foreign sourced income and changes in tax rules on the amortization and depreciation of assets may significantly impact the established liability and changes to that established liability would be recorded to other (expense) income ~~(expense)~~ in the period the Company made the determination regarding the applicable change. The Company expects that future payments under the Tax Receivable Agreement relating to the Pre-IPO Tax Assets could aggregate to ~~$222.1~~$198.2 millionover the ~~13-year~~11-year remaining period under the Tax Receivable Agreement. Payments under the Tax Receivable Agreement, which began in the year ended December 31, 2022, are not conditioned upon the parties’ continued ownership of equity in the Company.

In November 2023, the FASB issued Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The new guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company is currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). This update also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The new guidance is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

In March 2024, the SEC adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors. This rule will require registrants to disclose certain climate-related information in annual reports. On April 4, 2024, the SEC determined to voluntarily stay the final rules pending completion of a judicial review of certain legal challenges. The Company is currently evaluating the final rule to determine its impact on the Company's disclosures.

Certain amounts presented have been reclassified within ~~“Note 6 - Accrued Expenses~~the “Condensed Consolidated Statements of Operations and ~~Other Current Liabilities” as of~~ ~~December 31, 2022~~Comprehensive Income” to conform with the current period presentation, including a prior year reclassification from ~~Other accrued expenses and current liabilities~~Interest expense, net to ~~Accrued advertising.~~Interest income for three months ended March 31, 2023. The reclassifications ~~had~~occurred as a result of an increase in the significance of the current year amount. There was no ~~effect on~~change to the ~~Company’s Total current liabilities.~~Condensed Consolidated Balance Sheet, Statements of Operations and Comprehensive Income, and Statements of Cash Flows from the reclassification.

NOTE 3 – NET SALES

The Company distributes products in the U.S. and internationally through professional distributors in ~~the salon channel,~~salons, directly to retailers for sale in their physical stores and e-commerce sites, and direct-to-consumer (“DTC”) through sales to third-party e-commerce customers and through its own Olaplex.com website. As such, the Company’s three business channels consist of professional, specialty retail and DTC as follows:

For the Three Months Ended

March 31, 2023

March 31, 2022

For the Three Months Ended

March 31, 2024

Net sales by Channel:

Professional

48,397

77,059

Professional

Specialty retail

34,859

64,272

DTC

30,531

44,865

DTC

Total net sales

113,787

186,196

Total net sales

~~Revenue~~Net sales by major geographic region is based ~~upon~~on the ~~geographic location of customers who purchase~~shipping address on record for the customer purchasing the Company’s products. ~~The majority of net sales are transacted in U.S. Dollars, the Company’s functional and reporting currency.~~ During the three months ended March 31, ~~2023~~2024 and March 31, ~~2022,~~2023, the Company’s net sales to consumers in the United States and International regions were as follows:

For the Three Months Ended

March 31, 2023

March 31, 2022

For the Three Months Ended

March 31, 2024

Net sales by Geography:

United States

47,662

120,110

United States

International

66,125

66,086

Total net sales

113,787

186,196

Total net sales

~~United Kingdom (“U.K.”)~~U.S. net sales for the three months ended March 31, ~~2023~~2024 and March 31, ~~2022 were 9%~~2023 included approximately $1.7 million and $2.2 million, respectively, of ~~total~~ net ~~sales.~~sales to customers with U.S. shipping addresses who the Company expects will ultimately sell such products in international jurisdictions. No international country exceeded 10% of total net sales for the three months ended March 31, ~~2023~~2024 and March 31, ~~2022.~~2023. Despite our customers’ geographic location, the majority of net sales are transacted in U.S. Dollars, the Company’s functional and reporting currency.


		March 31, 2023		December 31, 2022
Raw materials and packaging components		$	40,224	$	36,194
	March 31, 2024					March 31, 2024	December 31, 2023
Raw materials
Finished goods	Finished goods	91,790		108,231
Inventory	Inventory	$	132,014	$	144,425

Fair value measurements are established utilizing a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets; Level 2, defined as 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; and Level 3, defined as unobservable inputs that are not corroborated by market data. The Company’s Level 1 assets consist of its marketable securities. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

On August 11, 2022, the Company entered into an interest rate cap transaction (the “interest rate cap”) in connection with the 2022 Term Loan Facility, with a notional amount of $400 million. The interest rate cap was designated as a cash flow hedge. For derivatives designated, and that qualify, as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated other comprehensive income and subsequently reclassified into Interest expense in the same period(s) during which the hedged transaction affects earnings, as documented at hedge inception in accordance with the Company’s accounting policy election. The interest rate cap asset is measured at fair value on a recurring basis. Although the Company has determined that the majority of the inputs used to value the interest rate cap fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with the interest rate cap utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. The Company has determined that the impact of the credit valuation adjustments made to the interest rate cap was not significant to the overall valuation. As a result, the interest rate cap as of March 31, 2024 and December 31, 2023 was classified as Level 2 of the fair value hierarchy.


		March 31, 2023
		Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	March 31, 2024										March 31, 2024
	Estimated Useful Life								Estimated Useful Life	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount
Brand name	Brand name	25 years	$	952,000	$	(122,914)	$	829,086
Product formulations	Product formulations	15 years	136,000		(29,265)		106,735
Customer relationships	Customer relationships	20 years	53,000		(8,554)		44,446
Software	Software	3 years	3,446		(751)		2,695
Total finite-lived intangibles	Total finite-lived intangibles		1,144,446		(161,484)		982,962
Goodwill	Goodwill	Indefinite	168,300		—		168,300
Total goodwill and other intangibles	Total goodwill and other intangibles		$	1,312,746	$	(161,484)	$	1,151,262


		December 31, 2022
		Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	December 31, 2023										December 31, 2023
	Estimated Useful Life								Estimated Useful Life	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount
Brand name	Brand name	25 years	$	952,000	$	(113,394)	$	838,606
Product formulations	Product formulations	15 years	136,000		(26,998)		109,002
Customer relationships	Customer relationships	20 years	53,000		(7,892)		45,108
Software	Software	3 years	2,922		(610)		2,312
Total finite-lived intangibles	Total finite-lived intangibles		1,143,922		(148,894)		995,028
Goodwill	Goodwill	Indefinite	168,300		—		168,300
Total goodwill and other intangibles	Total goodwill and other intangibles		$	1,312,222	$	(148,894)	$	1,163,328

The amortization of the Company’s brand name, customer relationships and software is recorded to Amortization of other intangible assets in the Condensed Consolidated Statements of Operations and Comprehensive Income. A portion of Amortization of patented formulations is capitalized to Inventory in the Condensed Consolidated Balance Sheets, and the remainder is recorded to Amortization of patented formulations in the Condensed Consolidated Statements of Operations and Comprehensive Income. Amortization of the Company’s definite-lived intangible assets for the three months ended March 31, 2024 and March 31, 2023 ~~and 2022 is~~was as follows:

For the Three Months Ended

March 31, 2023

March 31, 2022

For the Three Months Ended

March 31, 2024

Amortization of patented formulations

1,742

1,769

Amortization expense, brand name and customer relationships

10,182

10,183

Amortization expense, brand name and customer relationships

Amortization expense, software

141

Amortization expense, software

Amortization of other intangible assets

10,323

10,266

Amortization of patented formulations capitalized to inventory

525

497

Amortization of patented formulations capitalized to inventory


		March 31, 2023		December 31, 2022
	March 31, 2024					March 31, 2024	December 31, 2023
Accrued professional fees	Accrued professional fees	$	3,911	$	3,187
Accrued legal settlement		3,900		—
Payroll liabilities	Payroll liabilities	2,792		4,092
Deferred revenue		2,230		2,015
Accrued freight	Accrued freight	2,213		3,283
Accrued advertising	Accrued advertising	2,092		1,356
Deferred revenue
Accrued interest	Accrued interest	703		814
Accrued inventory purchase
Other accrued expenses and current liabilities	Other accrued expenses and current liabilities	2,078		2,360
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	$	19,919	$	17,107

During the three months ended March 31, 2023, the Company accrued approximately $3.9 million related to a pending settlement of a copyright matter. The Company expects to recover this settlement amount under its general liability insurance policy. An offset to the liability related to the insurance receivable is recorded in “Other current assets” on the Company’s Condensed Consolidated Balance Sheet for the three months ended March 31, 2023.

March 31, 2023

December 31, 2022

March 31, 2024

December 31, 2023

Long-term debt

Credit Agreement, dated as of February 23, 2022 (the “2022 Credit Agreement”)

$675 Million 7-Year Senior Secured Term Loan Facility (the “2022 Term Loan Facility”)

668,250

671,625

$150 Million 5-Year Senior Secured Revolving Credit Facility (the “2022 Revolver”)(1)

—

Debt issuance costs

(8,494)

(8,854)

Debt issuance costs

Total term loan debt

659,756

662,771

Less: Current portion

(6,750)

(8,438)

Long-term debt, net of debt issuance costs and current portion

653,006

654,333

The interest rate on outstanding debt under the 2022 Term Loan Facility was ~~8.4%~~8.9% per annum as of March 31, ~~2023.~~2024. The interest rates for all facilities under the 2022 Credit Agreement are calculated based upon the Company’s election among (a) adjusted term ~~SOFR~~secured overnight financing rate (“SOFR”) (subject to a 0.50% floor with respect to the 2022 Term Loan Facility, and a 0% floor with respect to the 2022 Revolver) plus an additional interest rate spread, (b) with respect to a borrowing in Euros under the 2022 Revolver, a euro interbank offered rate (subject to a 0% floor) plus an additional interest rate spread, or (c) an “Alternate Base Rate” (as defined in the 2022 Credit Agreement) (subject to a 1.50% floor with respect to the 2022 Term Loan Facility, and a 1.00% floor with respect to the 2022 Revolver) plus an additional interest rate spread.

The fair value of the Company’s long-term debt is based on the market value of its long-term debt instrument. Based on the inputs used to value the long-term debt, the Company’s long-term debt is categorized within Level 2 in the fair value hierarchy. As of March 31, 2024, the carrying amount of the Company’s long-term debt under the 2022 Credit Agreement was $654.4 million, and the fair value of the Company’s long-term debt was $613.5 million. As of December 31, 2023, the carrying amount of the Company’s long-term debt under the 2022 Credit Agreement was ~~$659.8~~$655.8 million, and the fair value of the Company’s long-term debt was $593.1 million. As of December 31, 2022, the carrying amount of the Company’s long-term debt under the 2022 Credit Agreement was $662.8 million, and the fair value of the Company’s long-term debt was $624.6$615.1 million.

The 2022 Credit Agreement includes, among other things, customary negative and affirmative covenants (including reporting, financial and maintenance covenants) and events of default (including a change of control) for facilities of this type. In addition, the 2022 Credit Agreement includes a springing first lien leverage ratio financial covenant, which is applicable only to the lenders under the 2022 Revolver. The Company was in compliance with ~~its financial~~these affirmative and negative covenants on March 31, ~~2023~~2024 and December 31, ~~2022.~~2023. The 2022 Term Loan Facility and the 2022 Revolver are secured by substantially all of the assets of Olaplex, Inc. and the other guarantors, subject to certain exceptions and thresholds.

The Company’s results are subject to risk from interest rate fluctuations on borrowings under the 2022 Credit Agreement, including the 2022 Term Loan Facility. The Company may, from time to time, utilize interest rate derivatives in an effort to add stability to interest expense and to manage its exposure to interest rate movements. On August 11, 2022, the Company entered into anthe interest rate cap ~~transaction (the “interest rate cap”)~~ in connection with the 2022 Term Loan Facility, with a notional amount of $400 million. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate applicable to the transaction, in exchange for an up-front premium paid by the Company.Facility. The ~~Company has designated the~~ interest rate cap ~~as a cash-flow hedge for accounting purposes.~~

During the ~~gain or~~three months ended March 31, 2024, the Company’s interest rate cap generated an unrecognized pre-tax loss ~~on the derivative is~~of $0.5 million recorded in Accumulated Other Comprehensive Income and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings, as documented at hedge inception in accordance with the Company’s accounting policy election.

~~The table below presents the fair value of the Company’s derivative financial instruments, which are classified within Other assets~~other comprehensive income on the Company’s Condensed Consolidated Balance ~~Sheets~~Sheets. During the same period, the Company also recognized a $1.4 million reduction in interest expense related to the Company’s receipt of funds as a result of ~~March 31, 2023 and December 31, 2022.~~an interest rate cap settlement with the Company’s counterparty, partially offset by $0.3 millionof interest expense related to amortization of the interest rate cap premium paid by the Company in connection with the interest rate cap.

During the three months ended March 31, 2023, the Company’s interest rate cap generated an unrecognized pre-tax loss of $0.7 million recorded in Accumulated ~~Other Comprehensive Income~~other comprehensive income on the Company’s Condensed Consolidated Balance Sheets. The Company also recognized a $0.6 million reduction in interest expense related the Company’s receipt of funds as a result of an interest rate cap settlement with the Company’s counterparty, partially offset by $0.3 million related to amortization of the interest rate cap premium paid by the Company in connection with the interest rate cap. ~~The Company did not have an interest rate cap agreement in place during the three months ended March 31, 2022.~~

The Company performed an initial effectiveness assessment on the interest rate cap and determined it to be an effective hedge of the cash flows related to the interest rate payments on the 2022 Term Loan Facility. The hedge is evaluated qualitatively on a quarterly basis for effectiveness. Changes in fair value are recorded in Accumulated ~~Other Comprehensive Income~~other comprehensive income and periodic settlements of the interest rate cap will be recorded in ~~interest~~Interest expense, net along with the interest on amounts outstanding under the 2022 Term Loan Facility. Payment of the up-front premium of the interest rate cap is included within Other assets and liabilities within cash flows from operating activities on the Company’s Condensed Consolidated Statements of Cash Flows.

The Company does not hold or issue derivative financial instruments for trading purposes, nor does it hold or issue leveraged derivative instruments. By using derivative financial instruments to hedge exposures to interest rate fluctuations, the Company exposes itself to counterparty credit risk. The Company manages exposure to counterparty credit risk by entering into derivative financial instruments with highly rated institutions that can be expected to fully perform under the terms of the applicable contracts.

During the three months ended March 31, 2023, the Company issued 109,620 shares of its common stock upon vesting and settlement of net stock-settled SARs. The Company ~~repurchased~~withheld 83,501 of ~~outstanding~~such shares of its common stock for the net settlement ~~of SARs for~~ payment of exercise price and taxes related to such SARs, which were accounted for as a share retirement.

During the three months ended March 31, 2022, the Company converted 886,950 cash-settled units into SARs, with a fair value liability of $1,632 reclassified from Accrued expenses and other current liabilities to Additional paid-in capital. The Company issued 117,180 shares of its common stock upon vesting and settlement of net stock-settled 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, which were accounted for as a share retirement.

In ~~July 2020,~~August 2023, the Company entered into an agreement with ~~CI&T,~~Pacvue Corporation, an ~~information technology~~e-commerce advertising and software company, in which certain investment funds affiliated with Advent International ~~Corporation,~~L.P., the holder of a majority of the Company’s common stock (collectively the “Advent Funds”), hold a greater than 10% equity interest. During the three months ended March 31, ~~2023,~~2024, the Company paid ~~CI&T $6. During~~Pacvue Corporation $172. No payments were made to Pacvue Corporation for the three months ended March 31, 2022, the Company paid CI&T $5. The Company engaged CI&T for services related to the development, maintenance and enhancement of the Olaplex professional application, as well as other digital marketing services, all of which were negotiated on an arm’s length basis and on market terms.2023.

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 usthe Company as they are subject to uncertainties. Accordingly, any settlement or resolution in these legal actions may occur and affect the Company’s net income in such period as the settlement or resolution.

On November 17, 2022, a putative securities class action was filed against the Company and certain of its current and former officers and directors in the United States District Court for the Central District of California, captioned Lilien v. Olaplex Holdings, Inc. et al., No. 2:22-cv-08395. A consolidated complaint was filed on April 28, 2023, which names as additional defendants the underwriters for the Company’s IPO and various stockholders that sold shares of common stock of the Company in the IPO. The action is brought on behalf of a putative class of purchasers of the Company’s common stock in or traceable to the Company’s IPO and asserts claims under Sections 11, 12, and 15 of the Securities Act of 1933. The action seeks certification of the putative class, compensatory damages, attorneys’ fees and costs, and any other relief that the court determines is appropriate. The ~~Company expects~~defendants moved to dismiss the consolidated complaint on July 19, 2023. The court held a hearing on the defendants’ motions to dismiss on October 16, 2023, and a decision has yet to be issued. The underwriter defendants ~~to notify~~have notified the Company of their intent to seek indemnification from the Company pursuant to the IPO underwriting agreement regarding the claims asserted in this action. The Company intends to vigorously defend the pending lawsuit.

On November 15, 2023, a purported derivative action was filed against the Company, Advent International Corporation, and certain of the Company’s current and former officers and directors in the United States District Court for the Central District of California, captioned Ciuffo v. Dagousset, et al., No. 2:23-cv-09712-SVW-SK. This action is premised on allegations similar to those asserted in the Lilien federal securities litigation. On February 1, 2024, the parties filed a joint stipulation to stay the purported derivative action pending a decision on the motions to dismiss filed in the Lilien federal securities action.

On March 22, 2024, a second purported derivative action was filed against the Company, Advent International Corporation, and certain of the Company’s current and former officers and directors in the United States District Court for the Central District of California, captioned Hutchinson v. Advent International Corporation, et al., No. 2:24-cv-02364. This action is premised on allegations similar to those asserted in the Lilien federal securities litigation and in the Ciuffo federal derivative action. On April 19, 2024, the parties in both purported derivative actions filed a joint stipulation to consolidate the two derivative actions and to stay proceedings in the consolidated case.

On February 9, 2023, twenty-eight plaintiffs filed Albahae, et al. v. Olaplex Holdings, Inc., et al., No. 2:23-cv-00982, a complaint alleging personal and economic injury and asserting claims for breach of warranty, negligence/gross negligence, products liability, unjust enrichment, and violations of California False Advertising Law and Unfair Competition Law, against the Company and Cosway Company, Inc., the Company’s primary contract manufacturer, in the United States District Court for the Central District of California. On March 2, 2023, the plaintiffs amended the complaint to include seventy-three additional plaintiffs. The plaintiffs allege that certain ingredients used in some Company products have purportedly caused irritation or posed a hazard to consumers, and that the Company engaged in misrepresentation with respect to those products. The plaintiffs seek actual and consequential damages, punitive damages, restitution in the form of disgorgement of profits, attorneys’ fees and costs, and any other relief that the court determines is appropriate. ~~The Company intends to vigorously defend the pending lawsuit.~~ On April 17, 2023, the Company moved to dismiss and to sever the plaintiffs’ claims. On July 11, 2023, the Court granted the Company’s motion to sever and dismissed all but the first named plaintiff. The Court also dismissed the operative complaint with leave to re-file on the grounds that it now contained allegations that were not relevant to the claims of the one, remaining plaintiff. On July 24, 2023, the remaining plaintiff filed a notice, voluntarily dismissing her claims without prejudice. As of the date of issuance of these condensed consolidated financial statements, none of the plaintiffs have re-filed their claims.

Three Months Ended

March 31,
2024

Numerator:

Net income

Three Months Ended

Denominator:

March 31,
2023

March 31,
2022

Numerator:

Net Income

20,964

61,961

Denominator:

Weighted average common shares outstanding – basic

651,730,993

648,813,998

Dilutive common equivalent shares from equity options

31,754,189

44,207,099

Weighted average common shares outstanding – basic

Dilutive common equivalent shares from common stock equivalents

Weighted average common shares outstanding – diluted

683,485,182

693,021,097

Net income per share:

Basic

0.03

0.10

Diluted

0.03

0.09

Diluted

Options to purchase 8,455,797 and 1,430,590 shares of the Company’s common stock for the three months ended March 31, 2024 and March 31, 2023, respectively, were not included in the computation of diluted net income per share because the exercise prices of these options were greater than the average market price per share of the Company’s common stock for the applicable period, and therefore would have been anti-dilutive.

ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim Condensed Consolidated Financial Statements and related notes included elsewhere in this Quarterly Report and with our audited Consolidated Financial Statements included in the ~~2022~~2023 Form 10-K.

Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from management’s expectations as a result of various factors. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in the section “Special Note Regarding Forward-Looking Statements” in this Quarterly Report and in “Item 1A. – Risk Factors” in the ~~2022~~2023 Form 10-K.

OLAPLEX disrupted and revolutionized the prestige hair care category by creating the bond-building space in 2014. We have grown from an initial assortment of three products sold exclusively through the professional channel to a broader suite of products offered through the professional, specialty retail and ~~DTC~~Direct to Consumer (“DTC”) channels that have been strategically developed to address three key uses: treatment, maintenance and protection. Our patent-protected bond-building technology relinks disulfide bonds in human hair that are destroyed via chemical, thermal, mechanical, environmental and aging processes. Our current product portfolio ~~comprises sixteen~~is comprised of nineteen unique and complementary ~~products specifically developed to provide a holistic regimen for hair health.~~products.

The strength of our business model and ability to scale have created a compelling financial ~~profile historically characterized by revenue growth and very strong profitability.~~profile. We have developed a ~~mutually reinforcing,~~ synergistic omnichannel model that leverages the strength of each of our channels and our strong digital capabilities that we apply across our sales platforms. Our professional channel serves as the foundation for our brand. Through this channel, professional hairstylists introduce consumers to our products and, we believe, influence consumer purchasing decisions. Our specialty retail channel works to increase awareness of, and education for, our products and expand consumer penetration. Our DTC channel, comprised of Olaplex.com and sales through third-party e-commerce platforms, also provides us with the opportunity to engage directly with our consumers to provide powerful feedback that drives decisions we make around new product development.

We are focused on executing against ~~four~~our key strategic pillars that we believe will support our long-term growth. These include igniting our global brand, disrupting with innovation, amplifying channel coverage and charting new geographies. These key strategic pillars are supported by our efforts to build capabilities and infrastructure that we believe will enable our aspirations.

We believe we have built one of the most powerful brands in the prestige hair care category. We plan to continue growing awareness of our global brand, in an effort to deepen connections with existing customers as well as reach new audiences. We will also continue to invest in enhancing our brand equity. Our marketing model remains focused on implementing high return on investment, performance marketing activities aimed at fueling growth. Key levers of our marketing include organic social media activations, strategic paid media, education and training regarding our brand, community engagement with our professional hairstylists, influencer partnerships, and retailer activations such as sampling and in-store events.

We believe we have a strong pipeline of disruptive innovation that leverages our science-based technology and patented Bis-amino ingredient. We plan to launch two-to-four products annually over the next ~~five~~three years. To support this pipeline, we intend to continue to invest in research and development to strengthen our internal innovation capabilities. ~~In March 2023, we~~We recently entered ~~our first~~into hair care ~~adjacency with the launch of LASHBOND, an eyelash-enhancing serum. We~~adjacent categories and remain excited about the opportunity to ~~enter additional hair care adjacent categories and also other categories~~further grow where our ~~patents~~technology can serve as a foundation for entry that we believe is supported by consumer trust in our brand.

In our professional channel, we have undertaken efforts to support and reassert strong relationships with theprofessional hairstylist community and maintain brand awareness by increasing our field support efforts, deepening partnerships with distributors and customers, and refreshing educational content. We are also ~~intend to pursue~~pursuing opportunities to further penetrate premium and prestige salons. In specialty retail, we are enhancing visual merchandising in stores, investing in brand store pages online and deploying targeted communications intended to enable new customer acquisition. For our DTC business, we are evolving the digital experiences on Olaplex.com and third party e-commerce websites. On Olaplex.com, we expect to continue to invest in site enhancements and more advanced personalization efforts.

We believe there is substantial opportunity to grow globally. Our priority international regions are currently key markets in Europe and Asia. Across Europe and other regions, we aim to implement our business model by first establishing a strong professional channel and then complementing that channel through entry into specialty retail and DTC. In Asia, we intend to partner with distributors in the region that will support ~~the~~ omni-channel distribution and sales for our brand.

To enable these ~~four~~ key growth pillars, we intend to continue to build our capabilities and infrastructure. These efforts extend across our organization, including focusing on cultivating top talent and building a strong corporate culture, evolving our operational capabilities as we scale, creating a strong financial foundation for growth, and ensuring that we have financial structure, technology and data to support our growth.

We continue to monitor the effects of the global macro-economic environment, including ~~lower customer demand,~~ the risk of recession, ~~increasing~~ inflationary pressures, competitive ~~product~~products and discounting, currency volatility, ~~rising~~high interest rates, social and political issues, geopolitical tensions and regulatory matters. We also are mindful of inflationary pressures on our consumers, and are monitoring the impact that increasing inflationary pressures may have on consumer spending and preferences and inventory rebalancing at our customers in an increasingly competitive industry.

Competition in the beauty industry is based on a variety of factors, including innovation, product efficacy, accessible pricing, brand recognition and loyalty, service to the consumer, promotional activities, advertising, special events, new product introductions, e-commerce initiatives, sustainability and other activities. ~~In recent years, we~~We have seen increased competitive activity including discounting in the prestige hair care category, which may continue in a heightened inflationary environment. We believe we have a well-recognized and strong reputation in our core markets and that the quality and performance of our products, our emphasis on innovation, and our engagement with our professional and consumer communities position us to compete effectively.

•Net sales decreased ~~38.9%~~13.1% from ~~$186.2 million in the three months ended March 31, 2022 to~~ $113.8 million in the three months ended March 31, ~~2023.~~2023 to $98.9 million in the three months ended March 31, 2024. For the three months ended March 31, ~~2023,~~2024, net sales in our professional channel decreased ~~37.2%~~19.9%, our specialty retail channel decreased ~~45.8%,~~1.2% and our DTC channel decreased ~~31.9%~~15.7%, in each case as compared to the three months ended March 31, ~~2022.~~2023.

•Gross profit margin ~~decreased~~increased from ~~75.8%~~71.0% in the three months ended March 31, ~~2022~~2023 to ~~71.0%~~72.1% in the three months ended March 31, 2024, primarily as a result of decreases in warehouse and distribution costs and a lower reserve for product obsolescence, partially offset by increased promotional allowance and higher input costs for raw materials.

•Operating expenses for the three months ended March 31, 2024 increased by 14.3%, as compared to the three months ended March 31, 2023, primarily as a result of higher ~~input~~payroll due to workforce expansion, higher employee benefit costs, ~~for raw materials~~higher distribution and ~~warehousing, a reserve for product obsolescence,~~fulfillment costs and ~~product~~increased investments in sales and ~~channel mix, partially offset by inventory write-off and disposal costs recorded during~~marketing incurred in the three months ended March 31, ~~2022.~~

•Operating expenses for the three months ended March 31, 2023 increased by 38.9%, as compared to the three months ended March 31, 2022, primarily as a result of increased sales and marketing expense, higher payroll due to workforce expansion, and higher professional fees and other benefit costs, partially offset by decreased distribution and fulfillment expenses.2024.


		Three Months Ended March 31,
		2023				2022
		(in thousands)		% of Net sales		(in thousands)		% of Net sales
	Three Months Ended March 31,																				Three Months Ended March 31,
	2024															2024						2023
	(in thousands)													(in thousands)				% of Net sales			(in thousands)				% of Net sales
Net sales	Net sales	$	113,787	100.0	%	$	186,196	100.0	%	Net sales	$	98,906	100.0		100.0		%		$	113,787	100.0		100.0	%
Cost of sales:	Cost of sales:
Cost of product (excluding amortization)
Cost of product (excluding amortization)
Cost of product (excluding amortization)	Cost of product (excluding amortization)	31,235		27.5		43,222		23.2
Amortization of patented formulations	Amortization of patented formulations	1,742		1.5		1,769		1.0
Total cost of sales	Total cost of sales	32,977		29.0		44,991		24.2
Gross profit	Gross profit	80,810		71.0		141,205		75.8
Operating expenses:	Operating expenses:
Selling, general, and administrative	Selling, general, and administrative	34,924		30.7		22,314		12.0
Selling, general, and administrative
Selling, general, and administrative
Amortization of other intangible assets	Amortization of other intangible assets	10,323		9.1		10,266		5.5

Total operating expenses	Total operating expenses	45,247		39.8		32,580		17.5
Total operating expenses
Total operating expenses
Operating income	Operating income	35,563		31.3		108,625		58.3
Interest expense	Interest expense	(10,543)		(9.3)		(11,460)		(6.2)
Other income (expense), net
Loss on extinguishment of debt		—		—		(18,803)		(10.1)
Other income (expense), net		242		0.2		(377)		(0.2)
Total other income (expense), net		242		0.2		(19,180)		(10.3)

Interest income

Interest income

Interest income
Other (expense) income, net
Income before provision for income taxes	Income before provision for income taxes	25,262		22.2		77,985		41.9
Income tax provision	Income tax provision	4,298		3.8		16,024		8.6
Net income	Net income	$	20,964	18.4	%	$	61,961	33.3	%

(in thousands) For the Three Months Ended March 31,
2023 2022 $ Change % Change
Net sales by Channel:
Professional $ 48,397 $ 77,059 $ (28,662) (37.2) %
Specialty retail 34,859 64,272 (29,413) (45.8) %
DTC 30,531 44,865 (14,334) (31.9) %
Total net sales $ 113,787 $ 186,196 $ (72,409) (38.9) %
We distribute products in the U.S. and internationally through professional distributors in salons, directly to retailers for sale in their physical stores and e-commerce sites, and DTC through sales to third party e-commerce customers and through our Olaplex.com websites. As such, our three business channels consist of professional, specialty retail and DTC as follows:

Total net sales declined ~~38.9%~~13.1% in the three months ended March 31, ~~2023~~2024 compared to the same period in ~~2022 which the Company attributes~~2023, primarily attributed to a lower ~~baseline~~ level of demand, a negative year over year impact of approximately $21 million from inventory rebalancing at certain professional and specialty retail customers, and lapping $10 million of inventory pipeline sold to a key specialty retailer in the first quarter of 2022. The lower baseline demand across each of our three channelsdemand. This decline was partially offset by our ~~launches~~launch of ~~LASHBOND™~~Browbond® Building Serum ~~which is our first hair care adjacent product, No. 4D Clean Volume Detox Dry Shampoo,~~ and prior year launches of ~~1-Liter sizes of our~~ No. ~~4 Bond Maintenance~~5P Blonde Enhancer™ Toning Conditioner, Olaplex® Volumizing Blow Dry Mist, Jumbo No. 4P Blonde Enhancer™ Toning Shampoo and Jumbo No. ~~5 Bond Maintenance~~5P Blonde Enhancer™ Toning Conditioner, ~~and No. 4C Bond Maintenance Clarifying Shampoo,~~ as well as the impact of new customers within each channel. Net sales declined primarily in ~~the United States~~Italy and the United Kingdom, partially offset by increases in ~~Italy.~~the United States, Asia Pacific and in Latin America.


(in thousands)	(in thousands)	For the Three Months Ended March 31,				$ Change				% Change		(in thousands)	For the Three Months Ended March 31,								$ Change				% Change
		2023		2022
	2024
Cost of sales
Cost of sales
Cost of sales	Cost of sales	$	32,977	$	44,991			$	(12,014)			(26.7)	%	$	27,563		$		$	32,977			$	(5,414)		(16.4)		%
Gross profit	Gross profit	$	80,810	$	141,205	$	(60,395)			(42.8)	%	Gross profit	$	71,343		$		$	80,810			$	(9,467)		(11.7)		%

Our cost of sales decreased primarily due to declining product sales and a decrease in warehouse and distribution costs in the three months ended March 31, ~~2023, and a $4.3~~2024. The Company recorded $0.9 million ~~expense recorded~~ in inventory obsolescence reserve during the three months ended March 31, ~~2022 for inventory write-off and disposal costs related~~2024 as compared to unused stock of a product that the Company reformulated in June 2021 as a result of regulation changes in the European Union. These decreases were partially offset by increases in cost of sales resulting from inflationary pressures and a $2.6 million ~~reserve for product obsolescence~~ recorded during the three months ended March 31, 2023. The cost of sales decline was partially offset by higher input costs for raw materials in the three months ended March 31, 2024.

~~Selling, general and administrative expenses increased primarily due~~2023 to increased investments in sales and marketing of $8.6 million and higher payroll of $3.6 million driven by workforce expansion, both of which are expected to support our four strategic pillars. The Company also had increases of $1.9 million in professional fees and other benefit costs. These increases were partially offset by a $1.9 million decrease in distribution and fulfillment costs related to the decrease in product sales volume.

The increase in selling, general and administrative expenses was primarily driven by an increase of $2.1 million in payroll expenses driven by workforce expansion, $1.2 million of employee benefit costs, $1.2 million in distribution and fulfillment costs and $1.0 million in investments in non-employee marketing and advertising expenses during the three months ended March 31, 2024.

Interest expense for the three months ended March 31, 2024 increased as compared to the previous year due to an increase in interest rates, which was partially offset by benefits from the interest rate cap. See “Liquidity and Capital Resources Requirements – 2022 Credit Facility” for additional information on ~~the Company’s~~our outstanding debt. ~~The Company also benefited~~

(in thousands) For the Three Months Ended March 31,

2023 2022

$ Change % Change
Loss on extinguishment of debt $ — $ (18,803) $ 18,803 — %
Other income (expense), net 242 $ (377) $ 619 (164.2) %
Total other expense, net $ 242 $ (19,180)

$ 19,422 (101.3) %


(in thousands)	For the Three Months Ended March 31,
	2024		2023		$ Change		% Change


Other (expense) income, net	$	(947)	$	242	$	(1,189)	(491.3)	%

Our effective tax rate increased to 25.3% for the three months ended March 31, ~~2022,~~2024, as ~~described above, the Company recorded an $18.8 million loss on extinguishment of debt in that period. Other Income (expense), net increased in~~compared to 17.0% for the three months ended March 31, 2023, primarily due to ~~an increase~~the impact in ~~foreign currency transaction gains driven by~~ the ~~performance~~quarter of the ~~U.S. dollar.~~

~~Our effective~~discrete tax ~~rate was 17.0%~~expense for interest associated with income taxes and a shortfall associated with the ~~three months ended March 31, 2023, as compared to 20.5% for~~vesting of the ~~three months ended March 31, 2022. The decrease in the~~restricted stock units. Our effective tax rate for the three months ended March 31, ~~2023~~2024 is higher than the statutory rate of 21% primarily due to a discrete tax ~~benefit~~expense for interest associated with income taxes, the effect of state income taxes and a discrete tax expense from restricted stock ~~option exercises~~units vested during that ~~period. Additionally, the Company’s effective tax rate in the three months ended March 31, 2023 and 2022 was lower than the statutory tax rate of 21% primarily due to the benefit associated with~~period, partially offset by the foreign derived intangible income deduction ~~(“FDII”~~("FDII"), which results in income from the Company’s sales to foreign customers being taxed at a lower effective tax ~~rate, partially offset by the net impact of state income taxes.~~

The tax liability is based on current tax laws and the assumption that the Company and its subsidiaries will earn sufficient taxable income to realize the full tax benefits subject to the Tax Receivable Agreement. Updates to the blended staterate. Our effective tax rate ~~and allocation of U.S. versus foreign sourced income may impact the established liability and changes would be recorded to other income (expense)~~ in the period we made the determination. The Company expects that future payments under the Tax Receivable Agreement relating to the Pre-IPO Tax Assets could aggregate to $222.1 million over the 13-year remaining period under the Tax Receivable Agreement. Payments under the Tax Receivable Agreement, which began in the yearthree months ended ~~December 31, 2022, are not conditioned upon the parties’ continued ownership of the Company. The remaining Tax Receivable Agreement payment obligation~~ ~~as of~~ March 31, 2023 ~~is $222.1 million,~~ was lower than the statutory tax rate of ~~which $205.7 million was recorded in long term liabilities and $16.4 million was recorded in current liabilities~~21% primarily due to a discrete tax benefit from stock option exercises during that period.

Our primary use of cash is for working capital and payment of our operating costs, which consist primarily of employee-related expenses as well as general operating expenses for marketing, fulfillment costs of customer orders, overhead costs, innovation, capital expenditures and debt servicing. We also utilize cash for strategic investments. Fluctuations in working capital are primarily caused by customer demand of our product, timing of when a retailer rearranges or restocks our products, timing of inventory purchases, and timing of our payables and expenses. Capital expenditures typically vary and are currently limited, and future capital expenditure requirements depend on strategic initiatives selected for the fiscal year, including investments in infrastructure, expansion into new national and international distributors and expansion of our customer base.

The ~~decrease~~changes in net cash provided by operating activities during the three months ended March 31, ~~2023~~2024 compared to the same period in ~~2022~~2023 was primarily a result of a decrease in net income of ~~$41.0~~$13.2 million, partially offset by changes in working capital and adjusting items to Operating Cash Flows to reconcile to Net income from operations, partially offset by the loss on extinguishment of debt of $18.8 million related to the refinancing of the 2020 Credit Agreement, as well as inventory write-offs and disposal adjustments of $4.3 million, in each case recorded in the three months ended March 31, 2022, and other changes in working capital between the comparative periods.operations.

~~The Company’s~~Our financing activities for the three months ended March 31, ~~2023~~2024 primarily consisted of cash outflows for payments on our long-term debt and debt issuance costs, ~~and payments for shares withheld and retired for taxes and exercise price for SARs,~~ partially offset by cash received by the Company from stock option exercises. For the three months ended March 31, ~~2022, the Company’s~~2023, our financing activities primarily consisted of cash outflows for payments on our long-term debt and debt issuance costs, ~~and~~ payments ~~for~~related to shares withheld and retired ~~for taxes~~to cover the tax withholding obligations and exercise price for SARs, partially offset by ~~proceeds~~cash received by the Company from ~~the issuance of the 2022 Credit Agreement~~stock option exercises.

If necessary, we may borrow funds under our 2022 Revolver to finance our liquidity requirements, subject to customary borrowing conditions. To the extent additional funds are necessary to meet our long-term liquidity needs as we continue to execute our business strategy, we anticipate that they will be obtained through the incurrence of additional indebtedness, equity financings or a combination of these potential sources of funds; however, such financing may not be available on favorable terms, or at all. Our ability to meet our operating, investing and financing needs depends, to a significant extent, on our future financial performance, which will be subject in part to general economic, competitive, financial, regulatory and other factors that are beyond our control, including those described ~~elsewhere~~ in ~~“Risk~~“Item 1A. - Risk Factors” in our ~~2022~~ 2023 Form 10-K. In addition to these general economic and industry factors, the principal factors in determining whether our cash flows will be sufficient to meet our liquidity requirements will be our ability to continue providing innovative products to our customers and consumers and manage production and our supply chain.

The interest rate on outstanding amounts under the 2022 Term Loan Facility was ~~8.4%~~8.9% per annum as of March 31, ~~2023~~.2024. We have not drawn on the 2022 Revolver as of March 31, ~~2023~~.2024. The 2022 Term Loan Facility is repayable in mandatory quarterly installments equal to ~~$1.7~~$1.6 million, with the balance payable at maturity. The maturity date of the 2022 Term Loan Facility is February 23, 2029, and the maturity date of the 2022 Revolver is February 23, 2027.

~~The 2022 Credit~~ Agreement also includes ~~among other things, customary negative and affirmative covenants (including~~ reporting, financial and maintenance ~~covenants) and events of default (including a change of control) for facilities of this type. In addition, the 2022 Credit Agreement includes~~covenants, including a springing first lien leverage ratio financial ~~covenant, which is applicable only to the lenders under the 2022 Revolver.~~covenant. The Company was in compliance with ~~its financial~~these affirmative and negative covenants on March 31, ~~2023~~2024 and December 31, ~~2022. The 2022 Term Loan Facility and the 2022 Revolver are secured by substantially~~2023. Substantially all of the assets of ~~Olaplex, Inc. and~~ the ~~other guarantors, subject to certain exceptions and thresholds.~~Company constitute collateral under the 2022 Credit Agreement.

On August 11, 2022, ~~the Company~~we entered into an interest rate cap transaction in connection with the 2022 Term Loan Facility, with a notional amount of $400.0 million, in order to limit its exposure to potential increases in future interest rates related to the 2022 Term Loan Facility. ~~The Company has~~We have designated the interest rate cap as a cash-flow hedge for accounting purposes.

~~As part of~~In connection with the ~~IPO,~~Reorganization Transactions, we entered into the Tax Receivable Agreement under which we will be required to pay to the Pre-IPO Stockholders 85% of the federal, state or local tax cash savings that we actually realize on our taxable income following the IPO, as a result of the amortization of intangible assets and capitalized transaction costs that existed as of the transaction date. Under the Tax Receivable Agreement, generally we will retain the benefit of the remaining 15% of the applicable tax savings.

The ~~tax~~Tax Receivable Agreement liability is calculated based on current tax laws and the assumption that ~~the Company~~we and ~~its~~our subsidiaries will earn sufficient taxable income to realize the full tax benefits subject to the Tax Receivable Agreement. Updates to our blended state tax rate, ~~and~~ allocation of U.S. versus foreign sourced income and changes in tax rules on the amortization and depreciation of assets may significantly impact the established liability and changes would be recorded to other (expense) income ~~(expense)~~ in the period we made the determination. We expect that future payments under the Tax Receivable Agreement relating to the Pre-IPO Tax Assets could aggregate to ~~$222.1~~$198.2 million over the ~~13-year~~11-year remaining period under the Tax Receivable Agreement. Payments under the Tax Receivable Agreement, which began in the year ended December 31, 2022, are not conditioned upon the parties’ continued ownership of equity in the Company.

Our unaudited interim Condensed Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions that affect reported amounts. The estimates and assumptions are based on historical experience and on other factors that we believe to be reasonable. Actual results may differ from those estimates. We review these estimates on a periodic basis to ensure reasonableness. Although actual amounts may differ from such estimated amounts, we believe such differences are not likely to be material. For additional detail regarding our critical accounting policies including revenue recognition, inventory, and the Tax Receivable Agreement, see our discussion for the year ended December 31, ~~2022~~2023 in the ~~2022~~2023 Form 10-K. There have been no material changes to these policies in the three months ended March 31, ~~2023.~~2024.

Our results are subject to risk from interest rate fluctuations on borrowings under the 2022 Credit Agreement. Our borrowings bear interest at a variable rate; therefore, we are exposed to market risks relating to changes in interest rates. ~~When~~Interest rate changes generally affect the ~~reference rates under~~amount of our ~~2022 Term Loan Facility increase, the~~ interest payments ~~we must make thereon also increase, which can impact~~and, therefore, our future earnings and cash flows. As of March 31, ~~2023~~2024, we ~~had $668.3~~had $661.5 million of outstanding variable rate loans under the 2022 Term Loan Facility. Based on our March 31, ~~2023~~2024 variable rate ~~loan~~loan balances, an increase or decrease of 1% in the effective interest rate would cause an increase or decrease in interest cost of ~~approximately $6.7~~approximately $6.6 million over the next 12 months.

On August 11, 2022, ~~the Company~~we entered into an interest rate cap transaction (the “interest rate cap”) in connection with the 2022 Term Loan Facility, as more fully described in “Note 78 - ~~Long Term~~Long-Term Debt” in the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1. Financial Statements of this Quarterly Report. ~~The Company uses~~We use the interest rate cap to add stability to interest expense and to manage ~~its~~our exposure to interest rate movements. The fair value of the interest rate cap is measured at the end of each reporting period using observable inputs other than quoted prices. The fair value of the interest rate cap recorded in other current assets at March 31, ~~2023~~2024 was ~~$4.1~~$1.7 million. A hypothetical 50 basis point increase in interest rates would result in an increase to the fair value of the interest rate cap of approximately ~~$1.5~~$0.2 million. A hypothetical 50 basis point decrease in interest rates would result in a decrease to the fair value of the interest rate cap of approximately ~~$1.2~~$0.2 million.

Inflationary factors such as increases in the cost to produce our products and overhead costs have adversely affected, and may continue to adversely affect, our operating results. ~~During the three months ended March 31, 2023, and fiscal year 2022, our gross profit margin was negatively impacted by increased input costs for warehousing, transportation and raw materials.~~ Sustained increases in warehousing costs, transportation costs, wages and raw material costs, or other inflationary pressures in the future, may have an adverse effect on our ability to maintain current levels of gross profit margin if the selling prices of our products do not increase with these increased costs, or if we cannot identify other cost efficiencies.

Our reporting currency, including our U.K. foreign subsidiary, Olaplex UK Limited, is the U.S. dollar. Gains or losses due to transactions in foreign currencies are reflected in the Condensed Consolidated Statements of Operations and Comprehensive Income under the line-item Other (expense) income, net. We have not engaged in the hedging of foreign currency transactions to date, although we may choose to do so in the future. We do not believe that an immediate 10% increase or decrease in the relative value of the U.S. dollar to other currencies would have a material effect on our condensed consolidated financial statements.

Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange ~~Act)~~Act of 1934, as amended (the “Exchange Act”)) are designed to ensure that information required to be disclosed in the reports that we file or submit under the ~~Securities~~ Exchange Act ~~of 1934, as amended (the “Exchange Act”)~~ is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that information required to be disclosed is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well-designed and operated, can provide only reasonable assurance of achieving the desired control objectives

Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of March 31, ~~2023.~~2024.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Due to the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

We have, and may in the future, from time to time, become involved in litigation or other legal proceedings incidental to our business, including litigation related to intellectual property, regulatory matters, contract, advertising and other consumer claims. In ~~the opinion of our management, reasonably possible losses in addition to the amounts accrued for any such litigation and legal proceedings are not material to our consolidated financial statements. In~~ addition, we believe that protecting our intellectual property is essential to our business and we have in the past, and may in the future, become involved in proceedings to enforce our rights. Regardless of outcome, litigation (including the litigation ~~noted~~referenced below) can have an adverse impact on our reputation, financial condition and business, including by utilizing our resources and potentially diverting the attention of our management from the operation of our business.

† This certification will not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent specifically incorporated by reference into such filing.


Delaware						87-1242679
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


Large Accelerated Filer	☒☐	Accelerated Filer	☐☒

Non-accelerated Filer	☐	Smaller reporting company	☐

		Emerging growth company	☐


		Page
Part I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations and Comprehensive Income	6
	Condensed Consolidated Statements of Changes in Equity	7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1618
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2326
Item 4.	Controls and Procedures	2427
Part II.	OTHER INFORMATION
Item 1.	Legal Proceedings	2528
Item 1A.	Risk Factors	2528
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2528
Item 3.	Defaults Upon Senior Securities	2528
Item 4.	Mine Safety Disclosures	2528
Item 5.	Other Information	2528
Item 6.	Exhibits	2629
Signatures		2730


			Fair Value Measurements at Reporting Date Using
	Total		Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
Assets:
Interest rate cap at March 31, 2024	$	1,661	$	—	$	1,661	$	—
Interest rate cap at December 31, 2023	$	2,391	$	—	$	2,391	$	—



	March 31, 2023		December 31, 2022
Fair value, interest rate cap asset	$	4,051	$	5,042


Exhibit Number						Description
3.1						Restated Certificate of Incorporation of Olaplex Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q, filed on November 10, 2021 (File No. 001- 40860)).
3.2						Second Amended and Restated Bylaws of Olaplex Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on January 20, 2023 (File No. 001-40860)).
~~10.1~~						Letter Agreement, dated February 22, 2023, by and between Olaplex Inc. and Cosway Company Inc. (incorporated by reference to Exhibit 10.7 to the Company’'s Current Report on Form 10-K, filed on February 28, 2023 (File No. 001-40860)).
~~10.2#~~						~~Form of Restricted Stock Unit Agreement (Employee) under the Olaplex Holdings, Inc. 2021 Equity Incentive Plan.~~
31.1						Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2						Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1†						Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2†						Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS						Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH						Inline XBRL Taxonomy Extension Schema Document
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)


	OLAPLEX HOLDINGS, INC.

	By:	/s/ ~~JuE Wong~~Amanda Baldwin
May ~~9, 2023~~2, 2024		Name:	~~JuE Wong~~Amanda Baldwin
		Title:	~~President and~~ Chief Executive Officer
			(Principal Executive Officer)

	By:	/s/ Eric Tiziani
May ~~9, 2023~~2, 2024		Name:	Eric Tiziani
		Title:	Chief Financial Officer
			(Principal Financial Officer)