| Delaware | | | 5191 | | | 81-4895761 | |
| (State or other jurisdiction of Classification Code Number) | | | (Primary Standard Industrial Classification Code Number) | | | (I.R.S. Employer Identification Number) | |
| Kenneth R. Koch, Esq. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. Chrysler Center, 666 Third Avenue New York, New York 10017 Tel: (212) 935-3000 | | | Byron B. Rooney Davis Polk & Wardwell LLP 450 Lexington Avenue New York, New York 10017 Tel: (212) 450-4000 | |
| Large accelerated filer ☐ | | | Accelerated filer ☐ | |
| Non-accelerated filer | | | Smaller reporting company ☐ | |
| | | | Emerging growth company ☒ | |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Title of Each Class of Securities to be Registered | | | | Amount to be Registered(1) | | | | Proposed Maximum Offering Price per Share(2) | | | | Proposed Maximum Aggregate Offering Price(1)(2) | | | | Amount of Registration Fee(3) | | | | | Amount to be Registered(1) | | | | Proposed Maximum Offering Price Per Share(2) | | | | Proposed Maximum Aggregate Offering Price(1)(2) | | | | Amount of Registration Fee(3) | | ||||||||||||||||||||||||
Common stock, par value $0.0001 per share | | | | | | 9,966,667 | | | | | | $ | 16.00 | | | | | | $ | 159,466,672 | | | | | | $ | 17,397.82 | | | | | | | | 4,600,000 | | | | | | $ | 59.44 | | | | | | $ | 273,424,000 | | | | | | $ | 29,830.56 | | |
| | | Per Share | | | Total | | ||||||
| | | $ | | | | | | $ | | | | |
Underwriting discounts and commissions(1) | | | | $ | | | | | | $ | | | |
Proceeds, before expenses, to Hydrofarm Holdings Group, Inc. | | | | $ | | | | | | $ | | | |
| J.P. Morgan | | | | | | Stifel | |
| Deutsche Bank Securities | | | Truist Securities | | | William Blair | |
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| | | Range | | |||||||||
| | | Three Months Ended March 31, 2021 | | |||||||||
| | | (In millions) | | |||||||||
Net Income Range | | | | $ | 4.1 | | | | | $ | 4.9 | | |
Interest expense | | | | | 0.1 | | | | | | 0.1 | | |
Income taxes | | | | | 0.6 | | | | | | 0.8 | | |
Depreciation and amortization | | | | | 1.6 | | | | | | 1.6 | | |
Impairment, restructuring and other | | | | | 0.0 | | | | | | 0.0 | | |
Acquisition expenses(1) | | | | | 0.6 | | | | | | 0.6 | | |
Other income, net | | | | | (0.1) | | | | | | (0.1) | | |
Stock-based compensation(2) | | | | | 1.3 | | | | | | 1.3 | | |
Loss on debt extinguishment | | | | | 0.7 | | | | | | 0.7 | | |
Adjusted EBITDA Range | | | | $ | 8.9 | | | | | $ | 9.9 | | |
| | | Three Months Ended March 31, 2020 | | | |||||
| | | (In millions) | | ||||||
Net Loss | | | | ($ | 3.1) | | | | ||
Interest expense | | | | | 2.8 | | | | ||
Income taxes | | | | | 0.1 | | | | ||
Depreciation and amortization | | | | | 1.8 | | | | ||
Impairment, restructuring and other | | | | | 0.0 | | | | ||
Acquisition expenses | | | | | 0.0 | | | | ||
Other income, net | | | | | 0.0 | | | | ||
Stock-based compensation | | | | | 0.0 | | | | ||
Loss on debt extinguishment | | | | | 0.0 | | | | ||
Adjusted EBITDA | | | | $ | 1.6 | | | |
| | Nine months ended September 30, | | Years ended December 31, | | | Years ended December 31, | | ||||||||||||||||||||||||||||||
| | 2020 | | 2019 | | 2019 | | 2018 | | | 2020 | | 2019 | | ||||||||||||||||||||||||
| | (In thousands, except per share amounts) | | | (In thousands, except per share amounts) | | ||||||||||||||||||||||||||||||||
Income statement data for period ended: | | | | | | | | | | | | | | |||||||||||||||||||||||||
Net sales | | | $ | 254,763 | | | | $ | 181,338 | | | | $ | 235,111 | | | | $ | 211,813 | | | | | $ | 342,205 | | | | $ | 235,111 | | | ||||||
Gross profit | | | | 47,624 | | | | | 21,576 | | | | | 27,086 | | | | | 24,070 | | | | | | 63,633 | | | | | 27,086 | | | ||||||
Selling, general and administrative | | | | 37,084 | | | | | 30,759 | | | | | 43,784 | | | | | 42,229 | | | | | | 58,492 | | | | | 43,784 | | | ||||||
Impairment, restructuring and other(a) | | | | 276 | | | | | 3,589 | | | | | 10,035 | | | | | 7,169 | | | | | | 860 | | | | | 10,035 | | | ||||||
Income (loss) from operations | | | | 10,264 | | | | | (12,772) | | | | | (26,733) | | | | | (25,328) | | | | | | 4,281 | | | | | (26,733) | | | ||||||
Interest expense | | | | 7,858 | | | | | 9,789 | | | | | 13,467 | | | | | 11,606 | | | | | | 10,141 | | | | | 13,467 | | | ||||||
Net income (loss)(b) | | | | 2,125 | | | | | (22,372) | | | | | (40,083) | | | | | (32,892) | | | |||||||||||||||||
Net income (loss) attributable to common stockholders(b) | | | | 135 | | | | | (22,372) | | | | | (40,083) | | | | | (32,892) | | | |||||||||||||||||
Net income (loss) per share attributable to common stockholders – diluted (c) | | | $ | 0.01 | | | | $ | (1.08) | | | | $ | (1.94) | | | | $ | (2.31) | | | |||||||||||||||||
Net income (loss) per common share attributable to common stockholders on pro forma basis – diluted (d) | | | $ | 0.09 | | | | | n/a | | | | $ | (1.94) | | | | | n/a | | | |||||||||||||||||
Net loss | | | | (7,273) | | | | | (40,083) | | | |||||||||||||||||||||||||||
Net loss attributable to common stockholders | | | | (9,870) | | | | | (40,083) | | | |||||||||||||||||||||||||||
Net loss per share attributable to common stockholders – diluted | | | $ | (0.46) | | | | $ | (1.94) | | | |||||||||||||||||||||||||||
Cash flows (used in) provided by: | | | | | | | | | | | | | | |||||||||||||||||||||||||
Operating activities | | | $ | (7,777) | | | | $ | (11,520) | | | | $ | (13,302) | | | | $ | 4,437 | | | | | $ | (44,825) | | | | $ | (13,302) | | | ||||||
Investing activities | | | | 1,328 | | | | | (3,572) | | | | | (3,818) | | | | | (3,312) | | | | | | 546 | | | | | (3,818) | | | ||||||
Financing activities | | | | 6,408 | | | | | 4,663 | | | | | 19,900 | | | | | 25,516 | | | | | | 88,145 | | | | | 19,900 | | | ||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | | | | (2) | | | | | (8,082) | | | | | 4,934 | | | | | 25,717 | | | |||||||||||||||||
Net increase in cash, cash equivalents and restricted cash | | | | 44,098 | | | | | 4,934 | | | |||||||||||||||||||||||||||
Other data: | | | | | | | | | | | | | | |||||||||||||||||||||||||
Adjusted EBITDA(e) | | | $ | 16,120 | | | | $ | (3,812) | | | | $ | (9,495) | | | | $ | (7,249) | | | |||||||||||||||||
Adjusted EBITDA as a percent of net sales(e) | | | | 6.3% | | | | | -2.1% | | | | | -4.0% | | | | | -3.4% | | | |||||||||||||||||
Adjusted EBITDA(b) | | | $ | 21,076 | | | | $ | (9,495) | | | |||||||||||||||||||||||||||
Adjusted EBITDA as a percent of net sales(b) | | | | 6.2% | | | | | -4.0% | | | |||||||||||||||||||||||||||
Gross profit margin (gross profit as % of net sales) | | | | 18.7% | | | | | 11.9% | | | | | 11.5% | | | | | 11.4% | | | | | | 18.6% | | | | | 11.5% | | | ||||||
Capital expenditures(f) | | | | 700 | | | | | 541 | | | | | 768 | | | | | 1,343 | | | |||||||||||||||||
Capital expenditures(c) | | | | 1,447 | | | | | 768 | | | |||||||||||||||||||||||||||
Federal net operating loss carryforwards | | | | n/a | | | | | n/a | | | | | 58,000 | | | | | 35,000 | | | | | | 62,500 | | | | | 58,000 | | |
| | | As of September 30, 2020 | | | As of December 31, | | ||||||||||||
| | | 2019 | | | 2018 | | ||||||||||||
| | | (In thousands) | | | (In thousands) | | ||||||||||||
Balance sheet data as of end of period: | | | | | | | | | | | | | | | | | | | |
Cash, cash equivalents and restricted cash | | | | $ | 32,855 | | | | | $ | 32,857 | | | | | $ | 27,923 | | |
Working capital(g) | | | | | 52,126 | | | | | | 40,547 | | | | | | 56,728 | | |
Total assets(h) | | | | | 218,571 | | | | | | 185,651 | | | | | | 174,411 | | |
Long-term debt(i) | | | | | 111,826 | | | | | | 107,932 | | | | | | 100,520 | | |
Total liabilities | | | | | 181,310 | | | | | | 154,471 | | | | | | 126,867 | | |
Convertible preferred stock(j) | | | | | 27,584 | | | | | | 21,802 | | | | | | — | | |
Stockholders’ equity | | | | | 9,677 | | | | | | 9,378 | | | | | | 47,544 | | |
Balance sheet data as of end of period on a pro forma basis:(k) | | | | | | | | | | | | | | | | | | | |
Cash, cash equivalents and restricted cash(k) | | | | $ | 30,865 | | | | | | | | | | | | | | |
Working capital(g) | | | | | 50,136 | | | | | | | | | | | | | | |
Total assets(h) | | | | | 216,581 | | | | | | | | | | | | | | |
Long-term debt(i) | | | | | 111,826 | | | | | | | | | | | | | | |
Total liabilities | | | | | 181,310 | | | | | | | | | | | | | | |
Convertible preferred stock(k) | | | | | — | | | | | | | | | | | | | | |
Stockholders’ equity(k) | | | | | 35,271 | | | | | | | | | | | | | | |
| | | As of December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
| | | (In thousands) | | |||||||||
Balance sheet data as of end of period: | | | | | | | | | | | | | |
Cash, cash equivalents and restricted cash | | | | $ | 76,955 | | | | | $ | 32,857 | | |
Working capital(d) | | | | | 151,217 | | | | | | 40,547 | | |
Total assets(e) | | | | | 275,795 | | | | | | 185,651 | | |
Long-term debt(f) | | | | | 1,036 | | | | | | 107,932 | | |
Total liabilities | | | | | 64,877 | | | | | | 154,471 | | |
Convertible preferred stock | | | | | — | | | | | | 21,802 | | |
Stockholders’ equity | | | | | 210,918 | | | | | | 9,378 | | |
| | Nine months ended September 30, | | Years ended December 31, | | | Years ended December 31, | | ||||||||||||||||||||||||||||||
| | 2020 | | 2019 | | 2019 | | 2018 | | | 2020 | | 2019 | | ||||||||||||||||||||||||
| | (Dollars in thousands) | | | (In thousands) | | ||||||||||||||||||||||||||||||||
Net income (loss) | | | $ | 2,125 | | | | $ | (22,372) | | | | $ | (40,083) | | | | $ | (32,892) | | | |||||||||||||||||
Net loss | | | $ | (7,273) | | | | $ | (40,083) | | | |||||||||||||||||||||||||||
Interest expense | | | | 7,858 | | | | | 9,789 | | | | | 13,467 | | | | | 11,606 | | | | | | 10,141 | | | | | 13,467 | | | ||||||
Income tax expense (benefit) | | | | 384 | | | | | (246) | | | | | (691) | | | | | (397) | | | | | | 576 | | | | | (691) | | | ||||||
Depreciation and amortization | | | | 5,170 | | | | | 5,198 | | | | | 6,995 | | | | | 8,260 | | | | | | 6,779 | | | | | 6,995 | | | ||||||
Impairment, restructuring and other | | | | 276 | | | | | 3,589 | | | | | 10,035 | | | | | 7,169 | | | | | | 860 | | | | | 10,035 | | | ||||||
Other income, net | | | | (103) | | | | | (334) | | | | | (105) | | | | | (995) | | | | | | (70) | | | | | (105) | | | ||||||
Stock-based compensation | | | | 410 | | | | | 173 | | | | | 208 | | | | | — | | | | | | 9,156 | | | | | 208 | | | ||||||
Loss on debt extinguishment | | | | — | | | | | 391 | | | | | 679 | | | | | — | | | | | | 907 | | | | | 679 | | | ||||||
Adjusted EBITDA | | | $ | 16,120 | | | | $ | (3,812) | | | | $ | (9,495) | | | | $ | (7,249) | | | | | $ | 21,076 | | | | $ | (9,495) | | | ||||||
Adjusted EBITDA as a percent of net sales | | | | 6.3% | | | | | -2.1% | | | | | -4.0% | | | | | -3.4% | | | | | | 6.2% | | | | | -4.0% | | |
| | | As of September 30, 2020 | | |||||||||||||||
| | | Actual | | | Pro forma | | | Pro forma as adjusted | | |||||||||
| | | (In thousands, except per share amounts) | | |||||||||||||||
Cash, cash equivalents and restricted cash | | | | $ | 32,855 | | | | | $ | 30,865 | | | | | $ | 36,805(e) | | |
Long term debt including current portion(a): | | | | | | | | | | | | | | | | | | | |
Term loan | | | | $ | 76,292 | | | | | $ | 76,292 | | | | | $ | — | | |
Line of credit(b) | | | | | 32,494 | | | | | | 32,494 | | | | | | — | | |
PPP loan | | | | | 3,274 | | | | | | 3,274 | | | | | | — | | |
Other | | | | | 1,369 | | | | | | 1,369 | | | | | | 1,369 | | |
Total long term debt | | | | | 113,429 | | | | | | 113,429 | | | | | | 1,369 | | |
Convertible preferred stock, $0.0001 par value, 50,000,000 shares authorized; | | | | | | | | | | | | | | | | | | | |
Actual: 7,725,045(c) issued and outstanding | | | | | | | | | | | | | | | | | | | |
Pro forma and Pro forma as adjusted: no shares issued and outstanding | | | | | 27,584(d) | | | | | | — | | | | | | — | | |
Stockholders’ equity | | | | | | | | | | | | | | | | | | | |
Common stock, $0.0001 par value, 300,000,000 shares authorized; Actual: 20,688,439 shares issued and outstanding | | | | | | | | | | | | | | | | | | | |
Pro forma: 22,979,908 shares issued and outstanding | | | | | | | | | | | | | | | | | | | |
Pro forma as adjusted: 31,646,575 shares issued and outstanding | | | | | 2 | | | | | | 2 | | | | | | 3 | | |
Additional paid-in capital | | | | | 154,599 | | | | | | 180,193 | | | | | | 298,192 | | |
Accumulated other comprehensive loss | | | | | (390) | | | | | | (390) | | | | | | (390) | | |
Accumulated deficit | | | | | (144,534) | | | | | | (144,534) | | | | | | (144,534) | | |
Total stockholders’ equity | | | | | 9,677 | | | | | | 35,271 | | | | | | 153,271 | | |
Total capitalization | | | | $ | 150,690 | | | | | $ | 148,700 | | | | | $ | 154,640 | | |
|
| | | As of December 31, 2020 | | |||||||||
| | | Actual | | | As adjusted | | ||||||
| | | (in thousands, except share and per share data) | | |||||||||
Cash, cash equivalents and restricted cash | | | | $ | 76,955 | | | | | $ | 311,019 | | |
Stockholders’ equity: | | | | | | | | | | | | | |
Preferred stock, $0.0001 par value: 50,000,000 shares authorized, no shares issued and outstanding, actual; 50,000,000 shares authorized, no shares issued and outstanding, as adjusted | | | | | — | | | | | | — | | |
Common stock, $0.0001 par value: 300,000,000 shares authorized, 33,499,953 shares issued and outstanding, actual; 300,000,000 shares authorized, 37,499,953 shares issued and outstanding, as adjusted | | | | | 3 | | | | | | 4 | | |
Additional paid-in-capital | | | | | 364,248 | | | | | | 598,311 | | |
Accumulated other comprehensive income | | | | | 599 | | | | | | 599 | | |
Accumulated deficit | | | | | (153,932) | | | | | | (153,932) | | |
Total stockholders’ equity | | | | | 210,918 | | | | | | 444,982 | | |
Total capitalization | | | | $ | 210,918 | | | | | $ | 444,982 | | |
| | | Outstanding principal | | | Deferred financing costs | | | Net balance | | |||||||||
Term loan | | | | $ | 76,292 | | | | | $ | (1,035) | | | | | $ | 75,257 | | |
Line of credit(b) | | | | | 32,494 | | | | | | (568) | | | | | | 31,926 | | |
PPP loan | | | | | 3,274 | | | | | | — | | | | | | 3,274 | | |
Other | | | | | 1,369 | | | | | | — | | | | | | 1,369 | | |
Total long term debt | | | | $ | 113,429 | | | | | $ | (1,603) | | | | | $ | 111,826 | | |
| | | Range | | |||||||||
| | | Three Months Ended March 31, 2021 | | |||||||||
| | | (In millions) | | |||||||||
Net Income Range | | | | $ | 4.1 | | | | | $ | 4.9 | | |
Interest expense | | | | | 0.1 | | | | | | 0.1 | | |
Income taxes | | | | | 0.6 | | | | | | 0.8 | | |
Depreciation and amortization | | | | | 1.6 | | | | | | 1.6 | | |
Impairment, restructuring and other | | | | | 0.0 | | | | | | 0.0 | | |
Acquisition expenses(1) | | | | | 0.6 | | | | | | 0.6 | | |
Other income, net | | | | | (0.1) | | | | | | (0.1) | | |
Stock-based compensation(2) | | | | | 1.3 | | | | | | 1.3 | | |
Loss on debt extinguishment | | | | | 0.7 | | | | | | 0.7 | | |
Adjusted EBITDA Range | | | | $ | 8.9 | | | | | $ | 9.9 | | |
| | | Three Months Ended March 31, 2020 | | | |||||
| | | (In millions) | | ||||||
Net Loss | | | | ($ | 3.1) | | | | ||
Interest expense | | | | | 2.8 | | | | ||
Income taxes | | | | | 0.1 | | | | ||
Depreciation and amortization | | | | | 1.8 | | | | ||
Impairment, restructuring and other | | | | | 0.0 | | | | ||
Acquisition expenses | | | | | 0.0 | | | | ||
Other income, net | | | | | 0.0 | | | | ||
Stock-based compensation | | | | | 0.0 | | | | ||
Loss on debt extinguishment | | | | | 0.0 | | | | ||
Adjusted EBITDA | | | | $ | 1.6 | | | |
| Assumed initial public offering price per share | | | | | | | | | | $ | 15.00 | | |
| Historical net tangible book value deficit per share as of September 30, 2020 | | | | $ | (2.12) | | | | | | | | |
| Increase per share attributable to the pro forma adjustments | | | | | 1.32 | | | | | | | | |
| Pro forma net tangible book value per share | | | | | (0.80) | | | | | | | | |
| Increase in pro forma net tangible book value per share attributable to new investors participating in this offering | | | | | 3.95 | | | | | | | | |
| Pro forma as adjusted net tangible book value per share after giving effect to this offering and as adjusted for the automatic conversion of our Series A Preferred Stock | | | | | | | | | | | 3.15 | | |
| Dilution per share to new investors participating in this offering | | | | | | | | | | $ | 11.85 | | |
| | | Shares Purchased | | | Total Consideration | | | Weighted- Average Price Per Share | | |||||||||||||||||||||
| | | Number | | | Percent | | | Amount | | | Percent | | ||||||||||||||||||
| | | | | | | | | | | | | | | (In thousands) | | | ||||||||||||||
Existing stockholders | | | | | 22,979,908 | | | | | | 72.6% | | | | | $ | 184,716 | | | | | | 58.7% | | | | | $ | 8.04 | | |
New public investors | | | | | 8,666,667 | | | | | | 27.4% | | | | | $ | 130,000 | | | | | | 41.3% | | | | | $ | 15.00 | | |
Total | | | | | 31,646,575 | | | | | | 100.0% | | | | | $ | 314,716 | | | | | | 100.0% | | | | | $ | 9.94 | | |
| | Nine months ended September 30, | | Years ended December 31, | | | Years ended December 31, | | ||||||||||||||||||||||||||||||
| | 2020 | | 2019 | | 2019 | | 2018 | | | 2020 | | 2019 | | ||||||||||||||||||||||||
| | (In thousands, except per share amounts) | | | (In thousands, except per share amounts) | | ||||||||||||||||||||||||||||||||
Income statement data for period ended: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Net sales | | | $ | 254,763 | | | | $ | 181,338 | | | | $ | 235,111 | | | | $ | 211,813 | | | | | $ | 342,205 | | | | $ | 235,111 | | | ||||||
Gross profit | | | | 47,624 | | | | | 21,576 | | | | | 27,086 | | | | | 24,070 | | | | | | 63,633 | | | | | 27,086 | | | ||||||
Selling, general and administrative | | | | 37,084 | | | | | 30,759 | | | | | 43,784 | | | | | 42,229 | | | | | | 58,492 | | | | | 43,784 | | | ||||||
Impairment, restructuring and other(a) | | | | 276 | | | | | 3,589 | | | | | 10,035 | | | | | 7,169 | | | | | | 860 | | | | | 10,035 | | | ||||||
Income (loss) from operations | | | | 10,264 | | | | | (12,772) | | | | | (26,733) | | | | | (25,328) | | | | | | 4,281 | | | | | (26,733) | | | ||||||
Interest expense | | | | 7,858 | | | | | 9,789 | | | | | 13,467 | | | | | 11,606 | | | | | | 10,141 | | | | | 13,467 | | | ||||||
Net income (loss)(b) | | | | 2,125 | | | | | (22,372) | | | | | (40,083) | | | | | (32,892) | | | |||||||||||||||||
Net income (loss) attributable to common stockholders(b) | | | | 135 | | | | | (22,372) | | | | | (40,083) | | | | | (32,892) | | | |||||||||||||||||
Net income (loss) per share attributable to common stockholders – diluted (c) | | | $ | 0.01 | | | | $ | (1.08) | | | | $ | (1.94) | | | | $ | (2.31) | | | |||||||||||||||||
Net income (loss) per common share attributable to common stockholders on pro forma basis – diluted (d) | | | $ | 0.09 | | | n/a | | | $ | 1.94 | | | n/a | | |||||||||||||||||||||||
Net loss | | | | (7,273) | | | | | (40,083) | | | |||||||||||||||||||||||||||
Net loss attributable to common stockholders | | | | (9,870) | | | | | (40,083) | | | |||||||||||||||||||||||||||
Net loss per share attributable to common stockholders – diluted | | | $ | (0.46) | | | | $ | (1.94) | | | |||||||||||||||||||||||||||
Cash flows (used in) provided by: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Operating activities | | | $ | (7,777) | | | | $ | (11,520) | | | | $ | (13,302) | | | | $ | 4,437 | | | | | $ | (44,825) | | | | $ | (13,302) | | | ||||||
Investing activities | | | | 1,328 | | | | | (3,572) | | | | | (3,818) | | | | | (3,312) | | | | | | 546 | | | | | (3,818) | | | ||||||
Financing activities | | | | 6,408 | | | | | 4,663 | | | | | 19,900 | | | | | 25,516 | | | | | | 88,145 | | | | | 19,900 | | | ||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | | | | (2) | | | | | (8,082) | | | | | 4,934 | | | | | 25,717 | | | |||||||||||||||||
Net increase in cash, cash equivalents and restricted cash | | | | 44,098 | | | | | 4,934 | | | |||||||||||||||||||||||||||
Other data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Adjusted EBITDA(e) | | | $ | 16,120 | | | | $ | (3,812) | | | | $ | (9,495) | | | | $ | (7,249) | | | |||||||||||||||||
Adjusted EBITDA as a percent of net sales(e) | | | | 6.3% | | | | | -2.1% | | | | | -4.0% | | | | | -3.4% | | | |||||||||||||||||
Adjusted EBITDA(b) | | | $ | 21,076 | | | | $ | (9,495) | | | |||||||||||||||||||||||||||
Adjusted EBITDA as a percent of net sales(b) | | | | 6.2% | | | | | -4.0% | | | |||||||||||||||||||||||||||
Gross profit margin (gross profit as % of net sales) | | | | 18.7% | | | | | 11.9% | | | | | 11.5% | | | | | 11.4% | | | | | | 18.6% | | | | | 11.5% | | | ||||||
Capital expenditures(f) | | | | 700 | | | | | 541 | | | | | 768 | | | | | 1,343 | | | |||||||||||||||||
Capital expenditures(c) | | | | 1,447 | | | | | 768 | | | |||||||||||||||||||||||||||
Federal net operating loss carryforwards | | | | n/a | | | | | n/a | | | | | 58,000 | | | | | 35,000 | | | | | | 62,500 | | | | | 58,000 | | |
| | | As of September 30, 2020 | | | As of December 31, | | ||||||||||||
| | | 2019 | | | 2018 | | ||||||||||||
| | | (In thousands) | | | (In thousands) | | ||||||||||||
Balance sheet data as of end of period: | | | | | | | | | | | | | | | | | | | |
Cash, cash equivalents and restricted cash | | | | $ | 32,855 | | | | | $ | 32,857 | | | | | $ | 27,923 | | |
Working capital(g) | | | | | 52,126 | | | | | | 40,547 | | | | | | 56,728 | | |
Total assets(h) | | | | | 218,571 | | | | | | 185,651 | | | | | | 174,411 | | |
Long-term debt(i) | | | | | 111,826 | | | | | | 107,932 | | | | | | 100,520 | | |
Total liabilities | | | | | 181,310 | | | | | | 154,471 | | | | | | 126,867 | | |
Convertible preferred stock(j) | | | | | 27,584 | | | | | | 21,802 | | | | | | — | | |
Stockholders’ equity | | | | | 9,677 | | | | | | 9,378 | | | | | | 47,544 | | |
Balance sheet data as of end of period on a pro forma basis:(k) | | | | | | | | | | | | | | | | | | | |
Cash, cash equivalents and restricted cash(k) | | | | $ | 30,865 | | | | | | | | | | | | | | |
Working capital(g) | | | | | 50,136 | | | | | | | | | | | | | | |
Total assets(h) | | | | | 216,581 | | | | | | | | | | | | | | |
Long-term debt(i) | | | | | 111,826 | | | | | | | | | | | | | | |
Total liabilities | | | | | 181,310 | | | | | | | | | | | | | | |
Convertible preferred stock(k) | | | | | — | | | | | | | | | | | | | | |
Stockholders’ equity(k) | | | | | 35,271 | | | | | | | | | | | | | | |
| | | As of December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
| | | (In thousands) | | |||||||||
Balance sheet data as of end of period: | | | | | | | | | | | | | |
Cash, cash equivalents and restricted cash | | | | $ | 76,955 | | | | | $ | 32,857 | | |
Working capital(d) | | | | | 151,217 | | | | | | 40,547 | | |
Total assets(e) | | | | | 275,795 | | | | | | 185,651 | | |
Long-term debt(f) | | | | | 1,036 | | | | | | 107,932 | | |
Total liabilities | | | | | 64,877 | | | | | | 154,471 | | |
Convertible preferred stock | | | | | — | | | | | | 21,802 | | |
Stockholders’ equity | | | | | 210,918 | | | | | | 9,378 | | |
| | | Years ended December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
| | | (In thousands) | | |||||||||
Net loss | | | | $ | (7,273) | | | | | $ | (40,083) | | |
Interest expense | | | | | 10,141 | | | | | | 13,467 | | |
Income tax expense (benefit) | | | | | 576 | | | | | | (691) | | |
Depreciation and amortization | | | | | 6,779 | | | | | | 6,995 | | |
Impairment, restructuring and other | | | | | 860 | | | | | | 10,035 | | |
Other income, net | | | | | (70) | | | | | | (105) | | |
Stock-based compensation(1) | | | | | 9,156 | | | | | | 208 | | |
Loss on debt extinguishment | | | | | 907 | | | | | | 679 | | |
Adjusted EBITDA | | | | $ | 21,076 | | | | | $ | (9,495) | | |
Adjusted EBITDA as a percent of net sales | | | | | 6.2% | | | | | | -4.0% | | |
| | | As of December 31, 2020 | | |||||||||
| | | Actual | | | As adjusted | | ||||||
| | | (in thousands, except share and per share data) | | |||||||||
Cash, cash equivalents and restricted cash | | | | $ | 76,955 | | | | | $ | 311,019 | | |
Stockholders’ equity: | | | | | | | | | | | | | |
Preferred stock, $0.0001 par value: 50,000,000 shares authorized, no shares issued and outstanding, actual; 50,000,000 shares authorized, no shares issued and outstanding, as adjusted | | | | | — | | | | | | — | | |
Common stock, $0.0001 par value: 300,000,000 shares authorized, 33,499,953 shares issued and outstanding, actual; 300,000,000 shares authorized, 37,499,953 shares issued and outstanding, as adjusted | | | | | 3 | | | | | | 4 | | |
Additional paid-in-capital | | | | | 364,248 | | | | | | 598,311 | | |
Accumulated other comprehensive income | | | | | 599 | | | | | | 599 | | |
Accumulated deficit | | | | | (153,932) | | | | | | (153,932) | | |
Total stockholders’ equity | | | | | 210,918 | | | | | | 444,982 | | |
Total capitalization | | | | $ | 210,918 | | | | | $ | 444,982 | | |
| | | Range | | |||||||||
| | | Three Months Ended March 31, 2021 | | |||||||||
| | | (In millions) | | |||||||||
Net Income Range | | | | $ | 4.1 | | | | | $ | 4.9 | | |
Interest expense | | | | | 0.1 | | | | | | 0.1 | | |
Income taxes | | | | | 0.6 | | | | | | 0.8 | | |
Depreciation and amortization | | | | | 1.6 | | | | | | 1.6 | | |
Impairment, restructuring and other | | | | | 0.0 | | | | | | 0.0 | | |
Acquisition expenses(1) | | | | | 0.6 | | | | | | 0.6 | | |
Other income, net | | | | | (0.1) | | | | | | (0.1) | | |
Stock-based compensation(2) | | | | | 1.3 | | | | | | 1.3 | | |
Loss on debt extinguishment | | | | | 0.7 | | | | | | 0.7 | | |
Adjusted EBITDA Range | | | | $ | 8.9 | | | | | $ | 9.9 | | |
| | | Three Months Ended March 31, 2020 | | | |||||
| | | (In millions) | | ||||||
Net Loss | | | | ($ | 3.1) | | | | ||
Interest expense | | | | | 2.8 | | | | ||
Income taxes | | | | | 0.1 | | | | ||
Depreciation and amortization | | | | | 1.8 | | | | ||
Impairment, restructuring and other | | | | | 0.0 | | | | ||
Acquisition expenses | | | | | 0.0 | | | | ||
Other income, net | | | | | 0.0 | | | | ||
Stock-based compensation | | | | | 0.0 | | | | ||
Loss on debt extinguishment | | | | | 0.0 | | | | ||
Adjusted EBITDA | | | | $ | 1.6 | | | |
| | | Nine months ended September 30, | | | | | | | | | | | | | | |||||||||||||||||||||
| | | 2020 | | | 2019 | | | Period change | | |||||||||||||||||||||||||||
Net sales | | | | $ | 254,763 | | | | | | 100.0% | | | | | $ | 181,338 | | | | | | 100.0% | | | | | $ | 73,425 | | | | | | 40.5% | | |
Cost of goods sold | | | | | 207,139 | | | | | | 81.3% | | | | | | 159,762 | | | | | | 88.1% | | | | | | 47,377 | | | | | | 29.7% | | |
Gross profit | | | | | 47,624 | | | | | | 18.7% | | | | | | 21,576 | | | | | | 11.9% | | | | | | 26,048 | | | | | | 120.7% | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative | | | | | 37,084 | | | | | | 14.6% | | | | | | 30,759 | | | | | | 17.0% | | | | | | 6,325 | | | | | | 20.6% | | |
Impairment, restructuring and other | | | | | 276 | | | | | | 0.1% | | | | | | 3,589 | | | | | | 2.0% | | | | | | (3,313) | | | | | | -92.3% | | |
Income (loss) from operations | | | | | 10,264 | | | | | | 4.0% | | | | | | (12,772) | | | | | | -7.1% | | | | | | 23,036 | | | | | | -180.4% | | |
Interest expense | | | | | (7,858) | | | | | | -3.1% | | | | | | (9,789) | | | | | | -5.4% | | | | | | 1,931 | | | | | | -19.7% | | |
Loss on debt extinguishment | | | | | — | | | | | | 0.0% | | | | | | (391) | | | | | | -0.2% | | | | | | 391 | | | | | | -100.0% | | |
Other income, net | | | | | 103 | | | | | | 0.0% | | | | | | 334 | | | | | | 0.2% | | | | | | (231) | | | | | | -69.2% | | |
Income (loss) before tax | | | | | 2,509 | | | | | | 0.9% | | | | | | (22,618) | | | | | | -12.5% | | | | | | 25,127 | | | | | | -111.1% | | |
Income tax (expense) benefit | | | | | (384) | | | | | | -0.2% | | | | | | 246 | | | | | | 0.1% | | | | | | (630) | | | | | | -256.1% | | |
Net income (loss) | | | | $ | 2,125 | | | | | | 0.7% | | | | | $ | (22,372) | | | | | | -12.4% | | | | | $ | 24,497 | | | | | | -109.5% | | |
| | | 2019 | | | 2018 | | | Year to year change | | |||||||||||||||||||||||||||
Net sales | | | | $ | 235,111 | | | | | | 100.0% | | | | | $ | 211,813 | | | | | | 100.0% | | | | | $ | 23,298 | | | | | | 11.0% | | |
Cost of goods sold | | | | | 208,025 | | | | | | 88.5% | | | | | | 187,743 | | | | | | 88.6% | | | | | | 20,282 | | | | | | 10.8% | | |
Gross profit | | | | | 27,086 | | | | | | 11.5% | | | | | | 24,070 | | | | | | 11.4% | | | | | | 3,016 | | | | | | 12.5% | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative | | | | | 43,784 | | | | | | 18.6% | | | | | | 42,229 | | | | | | 19.9% | | | | | | 1,555 | | | | | | 3.7% | | |
Impairment, restructuring and other | | | | | 10,035 | | | | | | 4.3% | | | | | | 7,169 | | | | | | 3.4% | | | | | | 2,866 | | | | | | 40.0% | | |
Loss from operations | | | | | (26,733) | | | | | | -11.4% | | | | | | (25,328) | | | | | | -11.9% | | | | | | (1,405) | | | | | | 5.5% | | |
Interest expense | | | | | (13,467) | | | | | | -5.7% | | | | | | (11,606) | | | | | | -5.5% | | | | | | (1,861) | | | | | | 16.0% | | |
Loss on debt extinguishment | | | | | (679) | | | | | | -0.3% | | | | | | — | | | | | | 0.0% | | | | | | (679) | | | | | | — | | |
Other income, net | | | | | 105 | | | | | | 0.0% | | | | | | 995 | | | | | | 0.5% | | | | | | (890) | | | | | | -89.4% | | |
Loss before tax | | | | | (40,774) | | | | | | -17.4% | | | | | | (35,939) | | | | | | -16.9% | | | | | | (4,835) | | | | | | 13.5% | | |
Income tax benefit | | | | | 691 | | | | | | 0.3% | | | | | | 397 | | | | | | 0.2% | | | | | | 294 | | | | | | 74.2% | | |
Net loss | | | | | (40,083) | | | | | | -17.0% | | | | | | (35,542) | | | | | | -16.8% | | | | | | (4,541) | | | | | | 12.8% | | |
Net loss attributable to non-controlling interest | | | | | — | | | | | | | | | | | | (2,650) | | | | | | | | | | | | | | | | | | | | |
Net loss attributable to Hydrofarm Holdings Group, Inc. | | | | $ | (40,083) | | | | | | | | | | | $ | (32,892) | | | | | | | | | | | | | | | | | | | | |
| | | Quarter ended | | |||||||||||||||||||||||||||||||||||||||
| | | September 30, 2020 | | | June 30, 2020 | | | March 31, 2020 | | | December 31, 2019 | | | September 30, 2019 | | | June 30, 2019 | | | March 31, 2019 | | |||||||||||||||||||||
Net sales | | | | $ | 96,658 | | | | | $ | 91,208 | | | | | $ | 66,897 | | | | | $ | 53,773 | | | | | $ | 60,469 | | | | | $ | 64,751 | | | | | $ | 56,118 | | |
Cost of goods sold | | | | | 78,473 | | | | | | 73,333 | | | | | | 55,333 | | | | | | 48,263 | | | | | | 54,616 | | | | | | 56,858 | | | | | | 48,288 | | |
Gross profit | | | | | 18,185 | | | | | | 17,875 | | | | | | 11,564 | | | | | | 5,510 | | | | | | 5,853 | | | | | | 7,893 | | | | | | 7,830 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative | | | | | 12,524 | | | | | | 12,838 | | | | | | 11,722 | | | | | | 13,025 | | | | | | 10,020 | | | | | | 10,253 | | | | | | 10,486 | | |
Impairment, restructuring and other | | | | | 184 | | | | | | 83 | | | | | | 9 | | | | | | 6,446 | | | | | | 573 | | | | | | 1,276 | | | | | | 1,740 | | |
Income (loss) from operations | | | | | 5,477 | | | | | | 4,954 | | | | | | (167) | | | | | | (13,961) | | | | | | (4,740) | | | | | | (3,636) | | | | | | (4,396) | | |
Interest expense | | | | | (2,549) | | | | | | (2,506) | | | | | | (2,803) | | | | | | (3,678) | | | | | | (3,402) | | | | | | (3,287) | | | | | | (3,100) | | |
Loss on debt extinguishment | | | | | — | | | | | | — | | | | | | — | | | | | | (288) | | | | | | (391) | | | | | | — | | | | | | — | | |
Other (expense) income, net | | | | | (223) | | | | | | 305 | | | | | | 21 | | | | | | (229) | | | | | | (5) | | | | | | 336 | | | | | | 3 | | |
Income (loss) before tax | | | | | 2,705 | | | | | | 2,753 | | | | | | (2,949) | | | | | | (18,156) | | | | | | (8,538) | | | | | | (6,587) | | | | | | (7,493) | | |
Income tax (expense) benefit | | | | | (54) | | | | | | (186) | | | | | | (144) | | | | | | 445 | | | | | | 492 | | | | | | (85) | | | | | | (161) | | |
Net income (loss) | | | | | 2,651 | | | | | | 2,567 | | | | | | (3,093) | | | | | | (17,711) | | | | | | (8,046) | | | | | | (6,672) | | | | | | (7,654) | | |
Cumulative dividends allocated to Series A Convertible Preferred Stock | | | | | (682) | | | | | | (674) | | | | | | (634) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Net income (loss) attributable to common stockholders | | | | $ | 1,969 | | | | | $ | 1,893 | | | | | $ | (3,727) | | | | | $ | (17,711) | | | | | $ | (8,046) | | | | | $ | (6,672) | | | | | $ | (7,654) | | |
Other data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net sales growth over prior period (a) | | | | | 59.8% | | | | | | 40.9% | | | | | | 19.2% | | | | | | 29.8% | | | | | | 27.3% | | | | | | 6.8% | | | | | | -9.9% | | |
Gross profit margin(b) | | | | | 18.8% | | | | | | 19.6% | | | | | | 17.3% | | | | | | 10.2% | | | | | | 9.7% | | | | | | 12.2% | | | | | | 14.0% | | |
SG&A as a percent of net sales | | | | | 13.0% | | | | | | 14.1% | | | | | | 17.5% | | | | | | 24.2% | | | | | | 16.6% | | | | | | 15.8% | | | | | | 18.7% | | |
| | | Nine months ended September 30, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Net cash used in operating activities | | | | $ | (7,777) | | | | | $ | (11,520) | | |
Net cash provided by (used in) investing activities | | | | | 1,328 | | | | | | (3,572) | | |
Net cash provided by financing activities | | | | | 6,408 | | | | | | 4,663 | | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | | | | | 39 | | | | | | 2,347 | | |
Net decrease in cash, cash equivalents and restricted cash | | | | | (2) | | | | | | (8,082) | | |
Cash, cash equivalents and restricted cash at beginning of period | | | | | 32,857 | | | | | | 27,923 | | |
Cash, cash equivalents and restricted cash at end of period | | | | $ | 32,855 | | | | | $ | 19,841 | | |
| | | 2019 | | | 2018 | | ||||||
Net cash (used in) provided by operating activities | | | | $ | (13,302) | | | | | $ | 4,437 | | |
Net cash used in investing activities | | | | | (3,818) | | | | | | (3,312) | | |
Net cash provided by financing activities | | | | | 19,900 | | | | | | 25,516 | | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | | | | | 2,154 | | | | | | (924) | | |
Net increase in cash, cash equivalents and restricted cash | | | | | 4,934 | | | | | | 25,717 | | |
Cash, cash equivalents and restricted cash at beginning of year | | | | | 27,923 | | | | | | 2,206 | | |
Cash, cash equivalents and restricted cash at end of year | | | | $ | 32,857 | | | | | $ | 27,923 | | |
| | | Total | | | Less than 1 year | | | 1-3 years | | | 4-5 years | | | More than 5 years | | |||||||||||||||
Operating lease obligations | | | | $ | 22,528 | | | | | $ | 3,950 | | | | | $ | 7,219 | | | | | $ | 3,201 | | | | | $ | 8,158 | | |
Finance lease obligations (including interest) | | | | | 894 | | | | | | 484 | | | | | | 403 | | | | | | 7 | | | | | | — | | |
Principal payments on long term debt | | | | | 109,438 | | | | | | 34,396 | | | | | | 75,011 | | | | | | 31 | | | | | | — | | |
Interest payments on long term debt | | | | | 11,822 | | | | | | 3,716 | | | | | | 8,103 | | | | | | 3 | | | | | | — | | |
Minimum purchase commitments | | | | | 17,500 | | | | | | 2,500 | | | | | | 6,500 | | | | | | 8,500 | | | | | | — | | |
Total contractual obligations | | | | $ | 162,182 | | | | | $ | 45,046 | | | | | $ | 97,236 | | | | | $ | 11,742 | | | | | $ | 8,158 | | |
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| | | Years ended December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
| | | (In thousands, except per share amounts) | | |||||||||
Income statement data for period ended: | | | | | | | | | | | | | |
Net sales | | | | $ | 342,205 | | | | | $ | 235,111 | | |
Gross profit | | | | | 63,633 | | | | | | 27,086 | | |
Selling, general and administrative | | | | | 58,492 | | | | | | 43,784 | | |
Impairment, restructuring and other(a) | | | | | 860 | | | | | | 10,035 | | |
Income (loss) from operations | | | | | 4,281 | | | | | | (26,733) | | |
Interest expense | | | | | 10,141 | | | | | | 13,467 | | |
Net loss | | | | | (7,273) | | | | | | (40,083) | | |
Net loss attributable to common stockholders | | | | | (9,870) | | | | | | (40,083) | | |
Net loss per share attributable to common stockholders – diluted | | | | $ | (0.46) | | | | | $ | (1.94) | | |
Cash flows (used in) provided by: | | | | | | | | | | | | | |
Operating activities | | | | $ | (44,825) | | | | | $ | (13,302) | | |
Investing activities | | | | | 546 | | | | | | (3,818) | | |
Financing activities | | | | | 88,145 | | | | | | 19,900 | | |
Net increase in cash, cash equivalents and restricted cash | | | | | 44,098 | | | | | | 4,934 | | |
Other data: | | | | | | | | | | | | | |
Adjusted EBITDA(b) | | | | $ | 21,076 | | | | | $ | (9,495) | | |
Adjusted EBITDA as a percent of net sales(b) | | | | | 6.2% | | | | | | -4.0% | | |
Gross profit margin (gross profit as % of net sales) | | | | | 18.6% | | | | | | 11.5% | | |
Capital expenditures(c) | | | | | 1,447 | | | | | | 768 | | |
Federal net operating loss carryforwards | | | | | 62,500 | | | | | | 58,000 | | |
| | | As of December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
| | | (In thousands) | | |||||||||
Balance sheet data as of end of period: | | | | | | | | | | | | | |
Cash, cash equivalents and restricted cash | | | | $ | 76,955 | | | | | $ | 32,857 | | |
Working capital(d) | | | | | 151,217 | | | | | | 40,547 | | |
Total assets(e) | | | | | 275,795 | | | | | | 185,651 | | |
Long-term debt(f) | | | | | 1,036 | | | | | | 107,932 | | |
Total liabilities | | | | | 64,877 | | | | | | 154,471 | | |
Convertible preferred stock | | | | | — | | | | | | 21,802 | | |
Stockholders’ equity | | | | | 210,918 | | | | | | 9,378 | | |
| | | Years ended December 31, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
| | | (In thousands) | | |||||||||
Net loss | | | | $ | (7,273) | | | | | $ | (40,083) | | |
Interest expense | | | | | 10,141 | | | | | | 13,467 | | |
Income tax expense (benefit) | | | | | 576 | | | | | | (691) | | |
Depreciation and amortization | | | | | 6,779 | | | | | | 6,995 | | |
Impairment, restructuring and other | | | | | 860 | | | | | | 10,035 | | |
Other income, net | | | | | (70) | | | | | | (105) | | |
Stock-based compensation(1) | | | | | 9,156 | | | | | | 208 | | |
Loss on debt extinguishment | | | | | 907 | | | | | | 679 | | |
Adjusted EBITDA | | | | $ | 21,076 | | | | | $ | (9,495) | | |
Adjusted EBITDA as a percent of net sales | | | | | 6.2% | | | | | | -4.0% | | |
| | | As of December 31, 2020 | | |||||||||
| | | Actual | | | As adjusted | | ||||||
| | | (in thousands, except share and per share data) | | |||||||||
Cash, cash equivalents and restricted cash | | | | $ | 76,955 | | | | | $ | 311,019 | | |
Stockholders’ equity: | | | | | | | | | | | | | |
Preferred stock, $0.0001 par value: 50,000,000 shares authorized, no shares issued and outstanding, actual; 50,000,000 shares authorized, no shares issued and outstanding, as adjusted | | | | | — | | | | | | — | | |
Common stock, $0.0001 par value: 300,000,000 shares authorized, 33,499,953 shares issued and outstanding, actual; 300,000,000 shares authorized, 37,499,953 shares issued and outstanding, as adjusted | | | | | 3 | | | | | | 4 | | |
Additional paid-in-capital | | | | | 364,248 | | | | | | 598,311 | | |
Accumulated other comprehensive income | | | | | 599 | | | | | | 599 | | |
Accumulated deficit | | | | | (153,932) | | | | | | (153,932) | | |
Total stockholders’ equity | | | | | 210,918 | | | | | | 444,982 | | |
Total capitalization | | | | $ | 210,918 | | | | | $ | 444,982 | | |
| Assumed public offering price per share | | | | | | | | | | $ | 61.63 | | |
| Historical net tangible book value per share as of December 31, 2020 | | | | $ | 4.73 | | | | | | | | |
| Increase in as adjusted net tangible book value per share attributable to new investors in this offering | | | | | 5.74 | | | | | | | | |
| As adjusted net tangible book value per share after this offering | | | | | | | | | | | 10.47 | | |
| Dilution per share to new investors in this offering | | | | | | | | | | $ | 51.16 | | |
Name | | | Age | | | Position | |
William Toler | | | 61 | | | Chief Executive Officer and Chairman of the Board | |
Terence Fitch | | | 61 | | | President | |
B. John Lindeman | | | 50 | | | Chief Financial Officer | |
Susan P. Peters | | | 67 | | | Director | |
Patrick Chung | | | | | Director | | |
Renah Persofsky | | | 62 | | | Director | |
Richard D. Moss | | | 63 | | | Director | |
Melisa Denis | | | 57 | | | Director | |
Name and Principal Position | | | Year | | | Salary ($) | | | Bonus ($) | | | Stock Awards ($) | | | Option Awards ($) | | | Nonequity Incentive Plan Compensation ($) | | | Nonqualified Deferred Compensation Earnings ($) | | | All Other Compensation ($) | | | Total ($) | | |||||||||||||||||||||||||||
William Toler, Chief Executive Officer and Chairman of the Board(1) | | | | | 2019 | | | | | | 475,243 | | | | | | — | | | | | | (1) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 475,243 | | |
Terence Fitch, President(2) | | | | | 2019 | | | | | | 237,945 | | | | | | — | | | | | | (2) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 237,945 | | |
Peter Wardenburg, Former Chief Executive Officer and Director(3) | | | | | 2019 | | | | | | 60,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 60,000 | | |
| | | 2018 | | | | | | 78,462 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 49,085(4) | | | | | | 127,547 | | | ||
Bob Clamp, Former Chief Operating Officer(5) | | | | | 2019 | | | | | | 57,981 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 157,018(5) | | | | | | 214,999 | | |
| | | 2018 | | | | | | 190,385 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 24,751 | | | | | | 215,136 | | | ||
Jeff Peterson, Former Chief Financial Officer(6) | | | | | 2019 | | | | | | 250,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,404 | | | | | | 252,404 | | |
| | | 2018 | | | | | | 237,500 | | | | | | 95,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 332,500 | | |
Name and Principal Position | | | Year ($) | | | Salary ($) | | | Bonus ($) | | | Stock Awards ($)(1) | | | Option Awards ($) | | | Nonequity Incentive Plan Compensation ($) | | | Nonqualified Deferred Compensation Earnings ($) | | | All Other Compensation ($)(2) | | | Total ($) | | |||||||||||||||||||||||||||
William Toler, Chief Executive Officer and Chariman of the Board(3) | | | | | 2020 | | | | | | 519,231 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 16,881 | | | | | | 536,112 | | |
| | | 2019 | | | | | | 475,243 | | | | | | — | | | | | | 7,497,636 | | | | | | — | | | | | | — | | | | | | — | | | | | | 14,308 | | | | | | 7,987,187 | | | ||
Terence Fitch, President(4) | | | | | 2020 | | | | | | 311,539 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 23,947 | | | | | | 335,486 | | |
| | | 2019 | | | | | | 237,945 | | | | | | — | | | | | | 1,795,242 | | | | | | — | | | | | | — | | | | | | — | | | | | | 16,715 | | | | | | 2,049,902 | | | ||
B. John Lindeman, Chief Financial Officer(5) | | | | | 2020 | | | | | | 374,519 | | | | | | 100,000 | | | | | | 2,440,327 | | | | | | — | | | | | | — | | | | | | — | | | | | | 16,412 | | | | �� | | 2,931,258 | | |
| | | 2019 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | Option Awards | | | Stock Awards | | ||||||||||||||||||||||||||||||||||||||||||||||||
Name and Principal Position | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | | Option Exercise Price ($) | | | Option Exercise Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | |||||||||||||||||||||||||||
William Toler, Chief Executive Officer and Chairman of the Board(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,448,203 | | | | | | — | | | | | | — | | | | | | — | | |
Terence Fitch, President(3) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 372,395 | | | | | | — | | | | | | — | | | | | | — | | |
Peter Wardenburg, Former Chief Executive Officer and Director(4) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Bob Clamp, Former Chief Operating Officer(5) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Jeff Peterson, Former Chief Financial Officer(6) | | | | | 44,325 | | | | | | 57,789 | | | | | | — | | | | | $ | 8.43 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | Option Awards | | | Stock Awards | | ||||||||||||||||||||||||||||||||||||||||||||||||
Name and Principal Position | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | | Option Exercise Price ($) | | | Option Exercise Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | |||||||||||||||||||||||||||
William Toler, Chief Executive Officer and Chairman of the | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 892,197 | | | | | | 46,911,718 | | | | | | — | | | | | | — | | |
Terence Fitch, President(3) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 209,473 | | | | | | 11,014,090 | | | | | | — | | | | | | — | | |
B. John Lindeman, Chief Financial Officer(4) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 402,151 | | | | | | 21,145,100 | | | | | | — | | | | | | — | | |
Name | | | Fees Earned or Paid in Cash ($) | | | Stock Awards(1) ($) | | | Option Awards ($) | | | Non-Equity Incentive Plan Compensation ($) | | | Nonqualified Deferred Compensation Earnings ($) | | | All Other Compensation ($) | | | Total ($) | | |||||||||||||||||||||
Patrick Chung | | | | | — | | | | | | 50,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 50,000 | | |
Susan P. Peters | | | | | — | | | | | | 50,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 50,000 | | |
Renah Persofsky | | | | | — | | | | | | 50,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 50,000 | | |
Richard D. Moss | | | | | — | | | | | | 50,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 50,000 | | |
Melisa Denis | | | | | — | | | | | | 50,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 50,000 | | |
Name | | | Number of Shares of Underlying Outstanding Stock Awards | | |||
Patrick Chung | | | | | 2,500 | | |
Susan P. Peters | | | | | 2,500 | | |
Renah Persofsky | | | | | 2,500 | | |
Richard D. Moss | | | | | 2,500 | | |
Melisa Denis | | | | | 2,500 | | |
Name and Address of Beneficial Owner | | | Number of Shares Beneficially Owned | | | Percentage of Shares Beneficially Owned Before This Offering | | | Percentage of Shares Beneficially Owned After This Offering | | |||||||||
5% Stockholders | | | | | | | | | | | | | | | | | | | |
Jack Serruya(1) | | | | | 1,557,919 | | | | | | 7.5% | | | | | | 5.3% | | |
Aaron Serruya(2) | | | | | 1,557,919 | | | | | | 7.5% | | | | | | 5.3% | | |
Michael Serruya(3) | | | | | 1,557,917 | | | | | | 7.5% | | | | | | 5.3% | | |
Simon Serruya(4) | | | | | 1,557,919 | | | | | | 7.5% | | | | | | 5.3% | | |
Chris Payne(5) | | | | | 2,199,331 | | | | | | 10.5% | | | | | | 7.4% | | |
Matthew Skidell(6) | | | | | 3,075,475 | | | | | | 14.8% | | | | | | — | | |
Michael Rapoport(7) | | | | | 1,241,623 | | | | | | 6.0% | | | | | | 4.2% | | |
John Tomes(8) | | | | | 2,139,784 | | | | | | 10.3% | | | | | | 7.2% | | |
Directors and Named Executive Officers: | | | | | | | | | | | | | | | | | | | |
William Toler(9) | | | | | — | | | | | | — | | | | | | — | | |
Terence Fitch(10) | | | | | 12,740 | | | | | | * | | | | | | * | | |
B. John Lindeman | | | | | — | | | | | | — | | | | | | — | | |
Bob Clamp | | | | | — | | | | | | — | | | | | | — | | |
Jeff Peterson | | | | | — | | | | | | — | | | | | | — | | |
Peter Wardenburg(11) | | | | | 2,320,118 | | | | | | 11.0% | | | | | | 7.8% | | |
Susan Peters | | | | | — | | | | | | — | | | | | | — | | |
Patrick Chung | | | | | — | | | | | | — | | | | | | — | | |
Renah Persofsky | | | | | — | | | | | | — | | | | | | — | | |
Richard D. Moss | | | | | — | | | | | | — | | | | | | — | | |
Melisa Denis | | | | | — | | | | | | — | | | | | | — | | |
All directors and current executive officers as a group (eight persons)(12) | | | | | 12,740 | | | | | | * | | | | | | * | | |
Name and Address of Beneficial Owner | | | Number of Shares Beneficially Owned | | | Percentage of Shares Beneficially Owned Before This Offering | | | Percentage of Shares Beneficially Owned After This Offering | | |||||||||
5% Stockholders | | | | | | | | | | | | | | | | | | | |
Chris Payne(1) | | | | | 2,299,331 | | | | | | 6.7% | | | | | | 6.0% | | |
John Tomes(2) | | | | | 2,239,784 | | | | | | 6.6% | | | | | | 5.9% | | |
Peter Wardenburg(3) | | | | | 2,320,118 | | | | | | 6.8% | | | | | | 6.1% | | |
Directors and Named Executive Officers: | | | | | | | | | | | | | | | | | | | |
William Toler(4) | | | | | 890,606 | | | | | | 2.6% | | | | | | 2.3% | | |
Terence Fitch(5) | | | | | 142,350 | | | | | | * | | | | | | * | | |
B. John Lindeman(6) | | | | | 69,699 | | | | | | * | | | | | | * | | |
Susan Peters(7) | | | | | 3,000 | | | | | | * | | | | | | * | | |
Patrick Chung(7) | | | | | 2,500 | | | | | | * | | | | | | * | | |
Renah Persofsky(7) | | | | | 4,500 | | | | | | * | | | | | | * | | |
Richard D. Moss(7) | | | | | 5,000 | | | | | | * | | | | | | * | | |
Melisa Denis(7) | | | | | 3,700 | | | | | | * | | | | | | * | | |
All directors and current executive officers as a group (eight persons) | | | | | 1,121,355 | | | | | | 3.3% | | | | | | 3.0% | | |
Name | | | Number of Shares | | |||
J.P. Morgan Securities LLC | | | | | | | |
Stifel, Nicolaus & Company, Incorporated | | | | | | | |
Deutsche Bank Securities Inc. | | | | | | | |
Truist Securities, Inc. | | | | | | | |
William Blair & Company, L.L.C. | | | | | | | |
Total | | | | | | |
| | | Without option to purchase additional shares exercise | | | With full option to purchase additional shares exercise | | ||||||
Per Share | | | | $ | | | | | $ | | | ||
Total | | | | $ | | | | | $ | | | |
| | | December 31, | | |||||||||
| 2019 | | | 2018 | | ||||||||
| | | | | | | | | | | | | |
Assets | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents | | | | $ | 22,866 | | | | | $ | 27,923 | | |
Restricted cash | | | | | 9,991 | | | | | | — | | |
Accounts receivable, net | | | | | 15,246 | | | | | | 15,566 | | |
Inventories | | | | | 50,228 | | | | | | 53,200 | | |
Notes receivable | | | | | 4,796 | | | | | | 2,000 | | |
Prepaid expenses and other current assets | | | | | 1,840 | | | | | | 1,903 | | |
Total current assets | | | | | 104,967 | | | | | | 100,592 | | |
Property and equipment, net | | | | | 3,550 | | | | | | 4,490 | | |
Operating lease right-of-use assets | | | | | 18,521 | | | | | | — | | |
Intangible assets, net | | | | | 57,406 | | | | | | 68,369 | | |
Other assets | | | | | 1,207 | | | | | | 960 | | |
Total assets | | | | $ | 185,651 | | | | | $ | 174,411 | | |
Liabilities, convertible preferred stock and stockholders’ equity | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable | | | | $ | 17,224 | | | | | $ | 17,064 | | |
Accrued expenses and other current liabilities | | | | | 9,188 | | | | | | 6,704 | | |
Current portion of lease liabilities | | | | | 3,181 | | | | | | — | | |
Current portion of long-term debt | | | | | 34,827 | | | | | | 20,096 | | |
Total current liabilities | | | | | 64,420 | | | | | | 43,864 | | |
Long-term lease liabilities | | | | | 15,786 | | | | | | — | | |
Long-term debt | | | | | 73,105 | | | | | | 80,424 | | |
Deferred tax liabilities | | | | | — | | | | | | 881 | | |
Other long-term liabilities | | | | | 1,160 | | | | | | 1,698 | | |
Total liabilities | | | | | 154,471 | | | | | | 126,867 | | |
Commitments and contingencies (Note 16) | | | | | | | | | | | | | |
Convertible preferred stock $0.0001 par value; 50,000,000 shares authorized and 7,007,429 issued and outstanding at December 31, 2019 | | | | | 21,802 | | | | | | — | | |
Stockholders’ equity | | | | | | | | | | | | | |
Common stock $0.0001 par value; 300,000,000 shares authorized at December 31, 2019 and 2018, respectively; 20,688,439 shares issued and outstanding at December 31, 2019 and 2018 | | | | | 2 | | | | | | 2 | | |
Additional paid-in capital | | | | | 156,179 | | | | | | 155,971 | | |
Accumulated other comprehensive loss | | | | | (144) | | | | | | (1,853) | | |
Accumulated deficit | | | | | (146,659) | | | | | | (106,576) | | |
Total stockholders’ equity | | | | | 9,378 | | | | | | 47,544 | | |
Total liabilities, convertible preferred stock and stockholders’ equity | | | | $ | 185,651 | | | | | $ | 174,411 | | |
|
| | | Years ended December 31, | | |||||||||
| | | 2019 | | | 2018 | | ||||||
Net sales | | | | $ | 235,111 | | | | | $ | 211,813 | | |
Cost of goods sold | | | | | 208,025 | | | | | | 187,743 | | |
Gross profit | | | | | 27,086 | | | | | | 24,070 | | |
Operating expenses: | | | | | | | | | | | | | |
Selling, general and administrative | | | | | 43,784 | | | | | | 42,229 | | |
Impairment, restructuring and other | | | | | 10,035 | | | | | | 7,169 | | |
Loss from operations | | | | | (26,733) | | | | | | (25,328) | | |
Interest expense | | | | | (13,467) | | | | | | (11,606) | | |
Loss on debt extinguishment | | | | | (679) | | | | | | — | | |
Other income, net | | | | | 105 | | | | | | 995 | | |
Loss before tax | | | | | (40,774) | | | | | | (35,939) | | |
Income tax benefit | | | | | 691 | | | | | | 397 | | |
Net loss | | | | | (40,083) | | | | | | (35,542) | | |
Net loss attributable to non-controlling interest | | | | | — | | | | | | (2,650) | | |
Net loss attributable to Hydrofarm Holdings Group, Inc. | | | | $ | (40,083) | | | | | $ | (32,892) | | |
Basic and diluted net loss per share attributable to common stockholders (2018 assumes retroactive conversion of non-controlling interest into controlling interest) | | | | $ | (1.94) | | | | | $ | (2.31) | | |
Weighted-average shares used to compute basic and diluted net loss per share attributable to common stockholders | | | | | 20,688,439 | | | | | | 15,390,086 | | |
Basic and diluted pro forma net loss per share attributable to common stockholders (unaudited) | | | | $ | (1.94) | | | | | | | | |
Weighted-average shares used to compute pro forma basic and diluted net loss per share attributable to common stockholders (unaudited) | | | | | 20,694,134 | | | | | | | | |
| | | Years ended December 31, | | |||||||||
| | | 2019 | | | 2018 | | ||||||
Net loss | | | | $ | (40,083) | | | | | $ | (35,542) | | |
Other comprehensive income (loss): | | | | | | | | | | | | | |
Foreign currency translation gain (loss) | | | | | 1,709 | | | | | | (2,418) | | |
Total comprehensive loss | | | | | (38,374) | | | | | | (37,960) | | |
Comprehensive loss attributable to non-controlling interest | | | | | — | | | | | | (2,828) | | |
Comprehensive loss attributable to Hydrofarm Holdings Group, Inc. | | | | $ | (38,374) | | | | | $ | (35,132) | | |
| | | | | | | | | | | | | | | Controlling Interest | | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||
| | | Convertible Preferred Stock | | | Common Stock | | | Additional Paid-In Capital | | | Accumulated Other Comprehensive Income (Loss) | | | Accumulated Deficit | | | Total Stockholders’ Equity | | | Non- controlling Interest | | | Total Stockholders’ Equity | | ||||||||||||||||||||||||||||||||||||
| | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2018 | | | | | — | | | | | $ | — | | | | | | 11,171,293 | | | | | $ | 1 | | | | | $ | 90,809 | | | | | $ | 484 | | | | | $ | (62,074) | | | | | $ | 29,220 | | | | | $ | 4,071 | | | | | $ | 33,291 | | |
Exchange of new shares for non-controlling interest in subsidiary | | | | | — | | | | | | — | | | | | | 1,593,096 | | | | | | — | | | | | | 12,950 | | | | | | (97) | | | | | | (11,610) | | | | | | 1,243 | | | | | | (1,243) | | | | | | — | | |
Concurrent Offering of shares and warrants for cash | | | | | — | | | | | | — | | | | | | 1,323,157 | | | | | | — | | | | | | 11,146 | | | | | | — | | | | | | — | | | | | | 11,146 | | | | | | — | | | | | | 11,146 | | |
Concurrent Offering of shares and warrants for conversion of loan from related party | | | | | — | | | | | | — | | | | | | 484,681 | | | | | | — | | | | | | 4,088 | | | | | | — | | | | | | — | | | | | | 4,088 | | | | | | — | | | | | | 4,088 | | |
Reverse merger with Hydrofarm Holdings Group, Inc. as accounting acquiree | | | | | — | | | | | | — | | | | | | 1,186,487 | | | | | | — | | | | | | 1 | | | | | | — | | | | | | — | | | | | | 1 | | | | | | — | | | | | | 1 | | |
Offering of shares and warrants for cash | | | | | — | | | | | | — | | | | | | 4,929,725 | | | | | | 1 | | | | | | 41,498 | | | | | | — | | | | | | — | | | | | | 41,499 | | | | | | — | | | | | | 41,499 | | |
Offering and Concurrent Offering costs | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (4,521) | | | | | | — | | | | | | — | | | | | | (4,521) | | | | | | — | | | | | | (4,521) | | |
Net loss | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (32,892) | | | | | | (32,892) | | | | | | (2,650) | | | | | | (35,542) | | |
Foreign currency translation loss | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,240) | | | | | | — | | | | | | (2,240) | | | | | | (178) | | | | | | (2,418) | | |
Balance, December 31, 2018 | | | | | — | | | | | | — | | | | | | 20,688,439 | | | | | | 2 | | | | | | 155,971 | | | | | | (1,853) | | | | | | (106,576) | | | | | | 47,544 | | | | | | — | | | | | | 47,544 | | |
Proceeds from issuance of Series A Convertible Preferred Stock, net of issuance costs of $1,274 | | | | | 4,825,346 | | | | | | 15,615 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Issuance of Series A Convertible Preferred Stock upon conversion of debt | | | | | 2,182,083 | | | | | | 7,637 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Receivable exchanged for issuance of Series A Convertible Preferred Stock | | | | | — | | | | | | (1,450) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Stock-based compensation expense | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 208 | | | | | | — | | | | | | — | | | | | | 208 | | | | | | — | | | | | | 208 | | |
Net loss | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (40,083) | | | | | | (40,083) | | | | | | — | | | | | | (40,083) | | |
Foreign currency translation gain | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,709 | | | | | | — | | | | | | 1,709 | | | | | | — | | | | | | 1,709 | | |
Balance, December 31, 2019 | | | | | 7,007,429 | | | | | $ | 21,802 | | | | | | 20,688,439 | | | | | $ | 2 | | | | | $ | 156,179 | | | | | $ | (144) | | | | | $ | (146,659) | | | | | $ | 9,378 | | | | | $ | — | | | | | $ | 9,378 | | |
| | | Years ended December 31, | | |||||||||
| | | 2019 | | | 2018 | | ||||||
Operating activities | | | | | | | | | | | | | |
Net loss | | | | $ | (40,083) | | | | | $ | (35,542) | | |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | | | | | | | | | | | | | |
Depreciation and amortization | | | | | 6,995 | | | | | | 8,260 | | |
Provision for doubtful accounts | | | | | 933 | | | | | | 534 | | |
Provision for (benefit from) inventory obsolescence | | | | | 707 | | | | | | (824) | | |
Stock-based compensation expense | | | | | 208 | | | | | | — | | |
Amortization of inventory step-up of basis | | | | | — | | | | | | 798 | | |
Impairment charges | | | | | 5,390 | | | | | | 2,716 | | |
Non-cash operating lease expense | | | | | 3,650 | | | | | | — | | |
Amortization of deferred financing costs | | | | | 967 | | | | | | 643 | | |
Loss on debt extinguishment | | | | | 679 | | | | | | — | | |
Interest expense and fees capitalized to principal of long-term debt | | | | | 9,644 | | | | | | 6,883 | | |
Payment of interest expense and fees capitalized to principal of long-term debt | | | | | (2,360) | | | | | | — | | |
Deferred income tax benefit | | | | | (718) | | | | | | (899) | | |
Other | | | | | 105 | | | | | | (22) | | |
Changes in assets and liabilities: | | | | | | | | | | | | | |
Accounts receivable | | | | | (620) | | | | | | 6,821 | | |
Inventories | | | | | 2,725 | | | | | | 22,043 | | |
Prepaid expenses and other current assets | | | | | (9) | | | | | | 509 | | |
Other assets | | | | | 494 | | | | | | 560 | | |
Accounts payable | | | | | (1,199) | | | | | | (5,652) | | |
Accrued expenses and other current liabilities | | | | | 2,364 | | | | | | (3,079) | | |
Lease liabilities | | | | | (3,297) | | | | | | — | | |
Other long-term liabilities | | | | | 123 | | | | | | 688 | | |
Net cash (used in) provided by operating activities | | | | | (13,302) | | | | | | 4,437 | | |
Investing activities | | | | | | | | | | | | | |
Purchases of property and equipment | | | | | (768) | | | | | | (1,343) | | |
Issuance of notes receivable | | | | | (3,050) | | | | | | (2,000) | | |
Other | | | | | — | | | | | | 31 | | |
Net cash used in investing activities | | | | | (3,818) | | | | | | (3,312) | | |
Financing activities | | | | | | | | | | | | | |
Proceeds from issuance of Series A Convertible Preferred Stock, net of issuance costs | | | | | 14,165 | | | | | | — | | |
Proceeds from issuance of convertible debt | | | | | 7,532 | | | | | | — | | |
Borrowings under revolving credit facilities | | | | | 256,862 | | | | | | 192,903 | | |
Payments of deferred financing costs | | | | | (1,697) | | | | | | — | | |
Repayments of long-term debt and revolving credit facilities | | | | | (256,785) | | | | | | (220,309) | | |
Payments made on financing leases | | | | | (177) | | | | | | — | | |
Proceeds from Offering and Concurrent Offering | | | | | — | | | | | | 52,645 | | |
Payments of offering costs on Offering and Concurrent Offering | | | | | — | | | | | | (4,521) | | |
Proceeds from loans from related party | | | | | — | | | | | | 6,000 | | |
Payments of loans from related party | | | | | — | | | | | | (2,000) | | |
Other | | | | | — | | | | | | 798 | | |
Net cash provided by financing activities | | | | | 19,900 | | | | | | 25,516 | | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | | | | | 2,154 | | | | | | (924) | | |
Net increase in cash, cash equivalents and restricted cash | | | | | 4,934 | | | | | | 25,717 | | |
Cash, cash equivalents and restricted cash at beginning of year | | | | | 27,923 | | | | | | 2,206 | | |
Cash, cash equivalents and restricted cash at end of year | | | | $ | 32,857 | | | | | $ | 27,923 | | |
Non-cash investing and financing activities | | | | | | | | | | | | | |
Issuance of Series A Convertible Preferred Stock upon conversion of debt and accrued interest | | | | $ | 7,637 | | | | | $ | — | | |
Receivable related to issuance of Series A Convertible Preferred Stock | | | | $ | 1,450 | | | | | $ | — | | |
Deferred financing costs capitalized to principal of long-term debt | | | | $ | 615 | | | | | $ | — | | |
Property and equipment acquired under finance lease obligation | | | | $ | 251 | | | | | $ | 279 | | |
Conversion of loan from related party to common shares | | | | $ | — | | | | | $ | 4,088 | | |
Supplemental information | | | | | | | | | | | | | |
Cash paid for interest | | | | $ | 5,492 | | | | | $ | 4,710 | | |
Cash paid for income taxes | | | | $ | 63 | | | | | $ | 613 | | |
| | | Common Stock | | | Shares Subject to Warrants | | ||||||
Offering | | | | | 4,929,725 | | | | | | 2,465,201 | | |
Concurrent Offering | | | | | 1,323,157 | | | | | | 661,583 | | |
Conversion of Loan | | | | | 484,681 | | | | | | 242,340 | | |
Subtotal | | | | | 6,737,563 | | | | | | 3,369,124 | | |
Placement agent warrants | | | | | — | | | | | | 517,067 | | |
Total | | | | | 6,737,563 | | | | | | 3,886,191 | | |
| | | As previously reported | | | Reclassifications | | | Adjustments | | | As restated and reclassified | | ||||||||||||
Accounts receivable, net | | | | $ | 16,097 | | | | | $ | — | | | | | $ | (531) | | | | | $ | 15,566 | | |
Inventories, net | | | | | 53,763 | | | | | | (929) | | | | | | 366 | | | | | | 53,200 | | |
Notes receivable | | | | | — | | | | | | 2,000 | | | | | | — | | | | | | 2,000 | | |
Prepaid expenses and other current assets | | | | | 3,403 | | | | | | (1,071) | | | | | | (429) | | | | | | 1,903 | | |
Total current assets | | | | | 101,186 | | | | | | — | | | | | | (594) | | | | | | 100,592 | | |
Property and equipment, net | | | | | 5,446 | | | | | | — | | | | | | (956) | | | | | | 4,490 | | |
Other assets | | | | | 531 | | | | | | — | | | | | | 429 | | | | | | 960 | | |
Total assets | | | | | 175,532 | | | | | | — | | | | | | (1,121) | | | | | | 174,411 | | |
Accrued expenses and other current liabilities | | | | | 7,231 | | | | | | — | | | | | | (527) | | | | | | 6,704 | | |
Total current liabilities | | | | | 44,391 | | | | | | — | | | | | | (527) | | | | | | 43,864 | | |
Deferred tax liabilities | | | | | 2,342 | | | | | | — | | | | | | (1,461) | | | | | | 881 | | |
Other long-term liabilities | | | | | 590 | | | | | | — | | | | | | 1,108 | | | | | | 1,698 | | |
Total liabilities | | | | | 127,747 | | | | | | — | | | | | | (880) | | | | | | 126,867 | | |
Accumulated deficit | | | | | (106,335) | | | | | | — | | | | | | (241) | | | | | | (106,576) | | |
Total stockholders’ equity | | | | | 47,785 | | | | | | — | | | | | | (241) | | | | | | 47,544 | | |
Total liabilities, convertible preferred stock and stockholders’ equity | | | | | 175,532 | | | | | | — | | | | | | (1,121) | | | | | | 174,411 | | |
| | | As previously reported | | | Reclassifications | | | Adjustments | | | As restated and reclassified | | ||||||||||||
Net sales | | | | $ | 212,464 | | | | | $ | — | | | | | $ | (651) | | | | | $ | 211,813 | | |
Cost of goods sold | | | | | 183,690 | | | | | | 2,813 | | | | | | 1,240 | | | | | | 187,743 | | |
Gross profit | | | | | 28,774 | | | | | | (2,813) | | | | | | (1,891) | | | | | | 24,070 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and benefits | | | | | 16,463 | | | | | | (16,463) | | | | | | — | | | | | | — | | |
Marketing | | | | | 2,584 | | | | | | (2,584) | | | | | | — | | | | | | — | | |
General and administrative | | | | | 18,668 | | | | | | (18,668) | | | | | | — | | | | | | — | | |
Selling, general and administrative | | | | | — | | | | | | 42,055 | | | | | | 174 | | | | | | 42,229 | | |
Depreciation and amortization | | | | | 7,170 | | | | | | (7,170) | | | | | | — | | | | | | — | | |
Impairment, restructuring and other charges | | | | | 3,244 | | | | | | 4,453 | | | | | | (528) | | | | | | 7,169 | | |
Loss from operations | | | | | | | | | | | | | | | | | | | | | | | 25,328 | | |
Interest expense | | | | | 11,606 | | | | | | — | | | | | | — | | | | | | 11,606 | | |
Other expense (income), net | | | | | 4,238 | | | | | | (4,436) | | | | | | (797) | | | | | | (995) | | |
Net loss before tax | | | | | (35,199) | | | | | | — | | | | | | (740) | | | | | | (35,939) | | |
Income tax (expense) benefit | | | | | (102) | | | | | | — | | | | | | 499 | | | | | | 397 | | |
Net loss | | | | $ | (35,301) | | | | | $ | — | | | | | $ | (241) | | | | | $ | (35,542) | | |
|
| | | As previously reported | | | Reclassifications | | | Adjustments | | | As restated and reclassified | | ||||||||||||
Net loss | | | | $ | (35,301) | | | | | $ | — | | | | | $ | (241) | | | | | $ | (35,542) | | |
Other comprehensive loss | | | | | | | | | | | | | | | | | | | | | | | | | |
Foreign currency translation loss | | | | | (2,418) | | | | | | — | | | | | | — | | | | | | (2,418) | | |
Total comprehensive loss | | | | | (37,719) | | | | | | — | | | | | | (241) | | | | | | (37,960) | | |
Comprehensive loss attributable to non-controlling interest | | | | | (2,828) | | | | | | — | | | | | | — | | | | | | (2,828) | | |
Comprehensive loss attributable to Hydrofarm Holdings Group, Inc. | | | | $ | (34,891) | | | | | $ | — | | | | | $ | (241) | | | | | $ | (35,132) | | |
| | | As previously reported | | | Reclassifications | | | Adjustments | | | As restated and reclassified | | ||||||||||||
Operating activities | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss | | | | $ | (35,301) | | | | | $ | — | | | | | $ | (241) | | | | | $ | (35,542) | | |
Depreciation and amortization | | | | | 7,170 | | | | | | — | | | | | | 1,090 | | | | | | 8,260 | | |
Provision for (benefit from) inventory obsolescence | | | | | 724 | | | | | | — | | | | | | (1,548) | | | | | | (824) | | |
Impairment charges | | | | | 3,244 | | | | | | — | | | | | | (528) | | | | | | 2,716 | | |
Deferred income tax benefit | | | | | — | | | | | | 34 | | | | | | (933) | | | | | | (899) | | |
Accounts receivable | | | | | 6,290 | | | | | | — | | | | | | 531 | | | | | | 6,821 | | |
Inventories | | | | | 21,203 | | | | | | (342) | | | | | | 1,182 | | | | | | 22,043 | | |
Prepaid expenses and other current assets | | | | | (262) | | | | | | 342 | | | | | | 429 | | | | | | 509 | | |
Other assets | | | | | 989 | | | | | | — | | | | | | (429) | | | | | | 560 | | |
Accrued expenses and other current liabilities | | | | | (2,656) | | | | | | 104 | | | | | | (527) | | | | | | (3,079) | | |
Deferred tax liabilities | | | | | 138 | | | | | | (138) | | | | | | — | | | | | | — | | |
Other long-term liabilities | | | | | (420) | | | | | | — | | | | | | 1,108 | | | | | | 688 | | |
Net cash provided by operating activities | | | | | 4,303 | | | | | | — | | | | | | 134 | | | | | | 4,437 | | |
Investing activities | | | | | | | | | | | | | | | | | | | | | | | | | |
Proceeds from sale of property plant and equipment | | | | | 538 | | | | | | (538) | | | | | | — | | | | | | — | | |
Investment in computer software | | | | | (372) | | | | | | 372 | | | | | | — | | | | | | — | | |
Acquisitions, including shell company through reverse merger, net of cash acquired | | | | | (1) | | | | | | 1 | | | | | | — | | | | | | — | | |
Other | | | | | — | | | | | | 165 | | | | | | (134) | | | | | | 31 | | |
Net cash used in investing activities | | | | | (3,178) | | | | | | — | | | | | | (134) | | | | | | (3,312) | | |
| | | For the year ended December 31, | | |||||||||
| | | 2019 | | | 2018 | | ||||||
United States | | | | $ | 194,618 | | | | | $ | 169,018 | | |
Canada | | | | | 44,515 | | | | | | 49,147 | | |
Intersegment eliminations | | | | | (4,022) | | | | | | (6,352) | | |
Total consolidated net sales | | | | $ | 235,111 | | | | | $ | 211,813 | | |
|
| | | December 31, | | |||||||||
| | | 2019 | | | 2018 | | ||||||
United States | | | | $ | 2,660 | | | | | $ | 3,557 | | |
Canada | | | | | 890 | | | | | | 933 | | |
Total property and equipment, net | | | | $ | 3,550 | | | | | $ | 4,490 | | |
| | | December 31, | | |||||||||
| | | 2019 | | | 2018 | | ||||||
Cash and cash equivalents | | | | $ | 22,866 | | | | | $ | 27,923 | | |
Restricted cash | | | | | 9,991 | | | | | | — | | |
Cash and cash equivalents, and restricted cash | | | | $ | 32,857 | | | | | $ | 27,923 | | |
| | | 2019 | | | 2018 | | ||||||
Net loss (2018 assumes retroactive conversion of NCI into controlling interest) | | | | $ | (40,083) | | | | | $ | (35,542) | | |
Less: Undistributed earnings allocable to participating securities | | | | | — | | | | | | — | | |
Basic and diluted net loss attributable to common stockholders | | | | $ | (40,083) | | | | | $ | (35,542) | | |
Weighted-average shares of common stock outstanding for basic and diluted (2018 assumes retroactive conversion of NCI into controlling interest) | | | | | 20,688,439 | | | | | | 15,390,086 | | |
Basic and diluted net loss per share attributable to common stockholders | | | | $ | (1.94) | | | | | $ | (2.31) | | |
| | | For the years ended December 31, | | |||||||||
| | | 2019 | | | 2018 | | ||||||
Shares subject to warrants outstanding | | | | | 3,886,191 | | | | | | 3,886,191 | | |
Shares subject to stock options outstanding | | | | | 819,879 | | | | | | — | | |
Shares subject to unvested restricted stock units | | | | | 1,820,598 | | | | | | — | | |
Shares convertible into common stock | | | | | 2,078,605 | | | | | | — | | |
| | | December 31, | | |||||||||
| | | 2019 | | | 2018 | | ||||||
Trade accounts receivable | | | | $ | 16,577 | | | | | $ | 16,175 | | |
Allowance for doubtful accounts | | | | | (1,776) | | | | | | (1,227) | | |
Other receivables | | | | | 445 | | | | | | 618 | | |
Total accounts receivable, net | | | | $ | 15,246 | | | | | $ | 15,566 | | |
|
| | | December 31, | | |||||||||
| | | 2019 | | | 2018 | | ||||||
Finished goods | | | | $ | 54,050 | | | | | $ | 56,419 | | |
Allowance for inventory obsolescence | | | | | (3,822) | | | | | | (3,219) | | |
Total inventories | | | | $ | 50,228 | | | | | $ | 53,200 | | |
| | | Balance Sheet Classification | | | As of December 31, 2019 | | |||
Leased assets | | | | | | | | | | |
Operating ROU assets at cost | | | Operating lease right-of-use assets | | | | $ | 21,906 | | |
Accumulated amortization | | | Operating lease right-of-use assets | | | | | (3,385) | | |
Net book value | | | | | | | $ | 18,521 | | |
Finance lease assets at cost | | | Property and equipment, net | | | | $ | 1,060 | | |
Accumulated amortization | | | Property and equipment, net | | | | | (375) | | |
Net book value | | | | | | | $ | 685 | | |
Lease liabilities | | | | | | | | | | |
Current: | | | | | | | | | | |
Operating leases | | | Current portion of lease liabilities | | | | $ | 3,181 | | |
Finance leases | | | Current portion of long-term debt | | | | | 431 | | |
Noncurrent: | | | | | | | | | | |
Operating leases | | | Long-term lease liabilities | | | | | 15,786 | | |
Finance leases | | | Long-term debt | | | | | 368 | | |
Total lease liabilities | | | | | | | $ | 19,766 | | |
| | | Classification | | | For the year ended December 31, 2019 | | |||
Operating lease costs | | | Selling, general and administrative | | | | $ | 4,580 | | |
Finance lease costs: | | | | | | | | | | |
Amortization of lease assets | | | Selling, general and administrative | | | | | 239 | | |
Interest on lease liabilities | | | Interest expense | | | | | 46 | | |
Gain on lease termination | | | Impairment, restructuring, and other | | | | | (160) | | |
Sublease income | | | Selling, general and administrative | | | | | (369) | | |
Year ending December 31, | | | Operating | | | Finance | | ||||||
2020 | | | | $ | 3,950 | | | | | $ | 484 | | |
2021 | | | | | 3,855 | | | | | | 286 | | |
2022 | | | | | 3,364 | | | | | | 117 | | |
2023 | | | | | 1,804 | | | | | | 7 | | |
2024 | | | | | 1,397 | | | | | | — | | |
Thereafter | | | | | 8,158 | | | | | | — | | |
Total rental payments | | | | | 22,528 | | | | | | 894 | | |
Less portion representing interest | | | | | 3,561 | | | | | | 95 | | |
Total principal | | | | | 18,967 | | | | | | 799 | | |
Less current portion | | | | | 3,181 | | | | | | 431 | | |
Long-term portion | | | | $ | 15,786 | | | | | $ | 368 | | |
| Weighted-average remaining lease term in years: | | | | | | | |
| Operating leases | | | | | 7.5 | | |
| Finance leases | | | | | 2.4 | | |
| Weighted-average discount rate: | | ��� | | | | | |
| Operating leases (for leases expiring after 2019) | | | | | 4.50% | | |
| Finance leases | | | | | 7.17% | | |
| ROU assets and lease obligations recognized upon adoption of ASC 842 on January 1, 2019: | | | |||||
| ROU assets | | | | $ | 24,872 | | |
| Operating lease obligations | | | | | (25,135) | | |
| Adjustments from early termination of ROU assets net of lease extensions: | | | | | | | |
| ROU assets surrendered | | | | $ | (2,698) | | |
| Lease obligation cancelled | | | | | 2,858 | | |
| Gain on early termination of lease obligation | | | | $ | 160 | | |
| Property and equipment acquired under finance lease obligation | | | | $ | 251 | | |
| | | December 31, | | |||||||||
| | | 2019 | | | 2018 | | ||||||
Machinery and equipment | | | | $ | 3,200 | | | | | $ | 2,870 | | |
Leasehold improvements | | | | | 2,721 | | | | | | 2,485 | | |
Other | | | | | 2,197 | | | | | | 2,311 | | |
Gross property and equipment | | | | | 8,118 | | | | | | 7,666 | | |
Less: accumulated depreciation and amortization | | | | | (4,568) | | | | | | (3,176) | | |
Total property and equipment, net | | | | $ | 3,550 | | | | | $ | 4,490 | | |
| | | December 31, 2019 | | | December 31, 2018 | | ||||||||||||||||||||||||||||||
| | | Gross Carrying Amount | | | Accumulated Amortization | | | Net Book Value | | | Gross Carrying Amount | | | Accumulated Amortization | | | Net Book Value | | ||||||||||||||||||
Finite-lived intangible assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Computer software | | | | $ | 7,701 | | | | | $ | (4,136) | | | | | $ | 3,565 | | | | | $ | 7,585 | | | | | $ | (2,524) | | | | | $ | 5,061 | | |
Customer relationship | | | | | 59,375 | | | | | | (8,712) | | | | | | 50,663 | | | | | | 64,812 | | | | | | (5,640) | | | | | | 59,172 | | |
Other | | | | | 1,133 | | | | | | (756) | | | | | | 377 | | | | | | 1,675 | | | | | | (431) | | | | | | 1,244 | | |
Total finite-lived intangible assets, net | | | | | 68,209 | | | | | | (13,604) | | | | | | 54,605 | | | | | | 74,072 | | | | | | (8,595) | | | | | | 65,477 | | |
Indefinite-lived intangible asset: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Trade names | | | | | 2,801 | | | | | | — | | | | | | 2,801 | | | | | | 2,892 | | | | | | — | | | | | | 2,892 | | |
Total Intangible assets, net | | | | $ | 71,010 | | | | | $ | (13,604) | | | | | $ | 57,406 | | | | | $ | 76,964 | | | | | $ | (8,595) | | | | | $ | 68,369 | | |
| | | December 31, | | |||||||||
| | | 2019 | | | 2018 | | ||||||
Accrued compensation and benefits | | | | $ | 1,857 | | | | | $ | 1,407 | | |
Costs related to issuance of Series A Convertible Preferred Stock | | | | | 1,239 | | | | | | — | | |
Goods in transit accrual | | | | | 1,005 | | | | | | 1,775 | | |
Obligations due under a distribution agreement | | | | | 1,154 | | | | | | — | | |
Other accrued liabilities | | | | | 3,933 | | | | | | 3,522 | | |
Total accrued expenses and other current liabilities | | | | $ | 9,188 | | | | | $ | 6,704 | | |
| | | December 31, 2019 | | | December 31, 2018 | | ||||||||||||||||||||||||||||||
| | | Outstanding Principal | | | Unamortized Discount and Deferred Financing Costs | | | Net Carrying Amount | | | Outstanding Principal | | | Unamortized Discount and Deferred Financing Costs | | | Net Carrying Amount | | ||||||||||||||||||
Term loan | | | | $ | 85,111 | | | | | $ | (1,513) | | | | | $ | 83,598 | | | | | $ | 80,390 | | | | | $ | (1,173) | | | | | $ | 79,217 | | |
Line of credit | | | | | 23,864 | | | | | | (792) | | | | | | 23,072 | | | | | | 20,742 | | | | | | (470) | | | | | | 20,272 | | |
Other | | | | | 1,262 | | | | | | — | | | | | | 1,262 | | | | | | 1,031 | | | | | | — | | | | | | 1,031 | | |
Total debt | | | | | 110,237 | | | | | | (2,305) | | | | | | 107,932 | | | | | | 102,163 | | | | | | (1,643) | | | | | | 100,520 | | |
Current portion | | | | | 34,827 | | | | | | — | | | | | | 34,827 | | | | | | 20,420 | | | | | | (324) | | | | | | 20,096 | | |
Long term | | | | | 75,410 | | | | | | (2,305) | | | | | | 73,105 | | | | | | 81,743 | | | | | | (1,319) | | | | | | 80,424 | | |
Total debt | | | | $ | 110,237 | | | | | $ | (2,305) | | | | | $ | 107,932 | | | | | $ | 102,163 | | | | | $ | (1,643) | | | | | $ | 100,520 | | |
| Year ending December 31, | | | | | | | |
| 2020 | | | | $ | 34,396 | | |
| 2021 | | | | | 1,819 | | |
| 2022 | | | | | 73,192 | | |
| 2023 | | | | | 31 | | |
| Total debt | | | | $ | 109,438 | | |
| | | Finance lease obligations | | | Debt excluding finance leases | | | Total | | |||||||||
Current portion | | | | $ | 431 | | | | | $ | 34,396 | | | | | $ | 34,827 | | |
Long-term | | | | | 368 | | | | | | 75,042 | | | | | | 75,410 | | |
Total payments due | | | | $ | 799 | | | | | $ | 109,438 | | | | | $ | 110,237 | | |
|
| | | Shares authorized | | | Shares issued and outstanding, or reserved for issuance | | ||||||
Convertible preferred stock at $0.0001 par value per share | | | | | 50,000,000 | | | | | | 7,007,429 | | |
Common stock at $0.0001 par value per share | | | | | 300,000,000 | | | | | | 20,688,439 | | |
Common stock reserved for issuance: | | | | | | | | | | | | | |
Convertible preferred stock | | | | | | | | | | | 2,078,605 | | |
Warrants | | | | | | | | | | | 3,886,191 | | |
Stock options | | | | | | | | | | | 819,879 | | |
Restricted stock units | | | | | | | | | | | 1,820,598 | | |
| | | Number | | | Weighted average exercise price | | | Weighted average grant date fair value | | | Weighted average remaining contractual term | | ||||||||||||
Granted | | | | | 958,570 | | | | | $ | 8.43 | | | | | $ | 0.71 | | | | | | | | |
Forfeited | | | | | (138,691) | | | | | $ | 8.43 | | | | | $ | 0.71 | | | | | | | | |
Exercised | | | | | — | | | | | | — | | | | | | | | | | | | | | |
Expired | | | | | — | | | | | | — | | | | | | | | | | | | | | |
Outstanding at December 31, 2019 | | | | | 819,879 | | | | | $ | 8.43 | | | | | $ | 0.71 | | | | | | 9.27 | | |
Exercisable at December 31, 2019 | | | | | 266,474 | | | | | $ | 8.43 | | | | | $ | 0.71 | | | | | | 9.15 | | |
Unvested at December 31, 2019 | | | | | 553,405 | | | | | $ | 8.43 | | | | | $ | 0.74 | | | | | | 9.33 | | |
Vested and expected to vest at December 31, 2019 | | | | | 819,879 | | | | | $ | 8.43 | | | | | $ | 0.71 | | | | | | 9.27 | | |
|
| | | Years ended December 31, | | |||||||||||||||||||||
| | | | | | | | | 2018 | | |||||||||||||||
| | | 2019 | | | As restated and reclassified | | | Adjustments | | | As previously reported | | ||||||||||||
United States | | | | $ | (30,409) | | | | | $ | (31,493) | | | | | $ | (1,268) | | | | | $ | (30,225) | | |
Foreign | | | | | (10,365) | | | | | | (4,446) | | | | | | 528 | | | | | | (4,974) | | |
Loss from continuing operations before tax | | | | $ | (40,774) | | | | | $ | (35,939) | | | | | $ | (740) | | | | | $ | (35,199) | | |
| | | Years ended December 31, | | |||||||||||||||||||||
| | | | | | | | | 2018 | | |||||||||||||||
| | | 2019 | | | As restated and reclassified | | | Adjustments | | | As previously reported | | ||||||||||||
Current: | | | | | | | | | | | | | | | | | | | | | | | | | |
Federal | | | | $ | — | | | | | $ | 216 | | | | | $ | 216 | | | | | $ | — | | |
State | | | | | 18 | | | | | | 79 | | | | | | 18 | | | | | | 61 | | |
Foreign | | | | | 9 | | | | | | 207 | | | | | | (127) | | | | | | 334 | | |
Total current | | | | | 27 | | | | | | 502 | | | | | | 107 | | | | | | 395 | | |
Deferred: | | | | | | | | | | | | | | | | | | | | | | | | | |
Federal | | | | | — | | | | | | 269 | | | | | | 269 | | | | | | — | | |
State | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Foreign | | | | | (718) | | | | | | (1,168) | | | | | | (875) | | | | | | (293) | | |
Total deferred tax benefit | | | | | (718) | | | | | | (899) | | | | | | (606) | | | | | | (293) | | |
Total income tax (benefit) expense | | | | $ | (691) | | | | | $ | (397) | | | | | $ | (499) | | | | | $ | 102 | | |
|
| | | Years ended December 31, | | |||||||||||||||||||||
| | | | | | | | | 2018 | | |||||||||||||||
| | | 2019 | | | As restated and reclassified | | | Adjustments | | | As previously reported | | ||||||||||||
Effective rate reconciliation | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. federal tax benefit at statutory rate | | | | $ | (8,563) | | | | | $ | (7,547) | | | | | $ | (155) | | | | | $ | (7,392) | | |
State income taxes, net | | | | | (1,247) | | | | | | (1,009) | | | | | | 466 | | | | | | (1,475) | | |
Permanent items | | | | | 89 | | | | | | 1,692 | | | | | | (153) | | | | | | 1,845 | | |
Foreign rate differential | | | | | (891) | | | | | | (590) | | | | | | (477) | | | | | | (113) | | |
Deferred adjustments | | | | | 563 | | | | | | — | | | | | | — | | | | | | — | | |
Tax entity classification adjustment | | | | | — | | | | | | (1,927) | | | | | | 342 | | | | | | (2,269) | | |
Non controlling interest | | | | | — | | | | | | 433 | | | | | | — | | | | | | 433 | | |
Valuation allowance | | | | | 9,358 | | | | | | 6,370 | | | | | | (2,663) | | | | | | 9,033 | | |
Other, net | | | | | — | | | | | | 2,181 | | | | | | 2,141 | | | | | | 40 | | |
Total income tax (benefit) expense | | | | $ | (691) | | | | | $ | (397) | | | | | $ | (499) | | | | | $ | 102 | | |
| | | As of December 31, | | |||||||||||||||||||||
| | | | | | | | | 2018 | | |||||||||||||||
| | | 2019 | | | As restated and reclassified | | | Adjustments | | | As previously reported | | ||||||||||||
Deferred tax assets | | | | | | | | | | | | | | | | | | | | | | | | | |
Lease liabilities | | | | $ | 4,836 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Accrued expenses | | | | | 1,129 | | | | | | 1,385 | | | | | | 641 | | | | | | 744 | | |
Intangible assets | | | | | 10,602 | | | | | | 11,139 | | | | | | (4,195) | | | | | | 15,334 | | |
Net operating loss | | | | | 17,589 | | | | | | 10,312 | | | | | | 2,972 | | | | | | 7,340 | | |
Inventories | | | | | 3,022 | | | | | | 3,434 | | | | | | 3,248 | | | | | | 186 | | |
Interest expense | | | | | 3,746 | | | | | | 989 | | | | | | (2,118) | | | | | | 3,107 | | |
Other | | | | | — | | | | | | 104 | | | | | | 104 | | | | | | — | | |
Deferred tax assets | | | | | 40,924 | | | | | | 27,363 | | | | | | 652 | | | | | | 26,711 | | |
Valuation allowance | | | | | (34,746) | | | | | | (25,388) | | | | | | 190 | | | | | | (25,578) | | |
Total deferred tax assets | | | | | 6,178 | | | | | | 1,975 | | | | | | 842 | | | | | | 1,133 | | |
Deferred tax liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Intangible assets, trade names | | | | | — | | | | | | (1,205) | | | | | | (34) | | | | | | (1,171) | | |
Property and equipment | | | | | (1,054) | | | | | | (1,118) | | | | | | (554) | | | | | | (564) | | |
Operating lease right-of-use assets | | | | | (4,729) | | | | | | — | | | | | | — | | | | | | — | | |
Other | | | | | — | | | | | | — | | | | | | 1,311 | | | | | | (1,311) | | |
Total deferred tax liabilities | | | | | (5,783) | | | | | | (2,323) | | | | | | 723 | | | | | | (3,046) | | |
Net deferred tax assets (liabilities) | | | | $ | 395 | | | | | $ | (348) | | | | | $ | 1,565 | | | | | $ | (1,913) | | |
|
| | | As of December 31, | | |||||||||||||||||||||
| | | | | | | | | 2018 | | |||||||||||||||
| | | 2019 | | | As restated and reclassified | | | Adjustments | | | As previously reported | | ||||||||||||
Deferred income tax assets included in other current assets | | | | $ | — | | | | | $ | — | | | | | $ | (429) | | | | | $ | 429 | | |
Deferred income tax assets included in other long-term assets | | | | | 395 | | | | | | 533 | | | | | | 533 | | | | | | — | | |
Deferred income tax liabilities | | | | | — | | | | | | (881) | | | | | | 1,461 | | | | | | (2,342) | | |
Net deferred tax assets (liabilities) | | | | $ | 395 | | | | | $ | (348) | | | | | $ | 1,565 | | | | | $ | (1,913) | | |
| | | December 31, | | |||||||||
| | | 2019 | | | 2018 | | ||||||
Balance at beginning of year | | | | $ | — | | | | | $ | 1,538 | | |
Change in contingent consideration payable | | | | | — | | | | | | (1,538) | | |
Balance at end of year | | | | $ | — | | | | | $ | — | | |
| | | For the years ended December 31, | | |||||||||
| | | 2019 | | | 2018 | | ||||||
Impairment of intangible assets | | | | $ | 5,390 | | | | | $ | 2,716 | | |
Restructuring costs | | | | | 1,973 | | | | | | 3,431 | | |
Costs related to SEC filings | | | | | 1,080 | | | | | | 776 | | |
Severance costs | | | | | 784 | | | | | | — | | |
Costs related to early termination of leases, net of gains | | | | | 337 | | | | | | — | | |
Other, net | | | | | 471 | | | | | | 246 | | |
Total impairment, restructuring and other | | | | $ | 10,035 | | | | | $ | 7,169 | | |
| | | Balance as of beginning of year | | | Provision/ (Benefit) | | | Deductions | | | Balance as of end of year | | ||||||||||||
Year ended December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for doubtful accounts | | | | $ | 1,227 | | | | | $ | 933 | | | | | $ | (384) | | | | | $ | 1,776 | | |
Allowance for inventory obsolescence | | | | | 3,219 | | | | | | 707 | | | | | | (104) | | | | | | 3,822 | | |
Year ended December 31, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for doubtful accounts | | | | | 2,955 | | | | | | 534 | | | | | | (2,262) | | | | | | 1,227 | | |
Allowance for inventory obsolescence | | | | | 4,618 | | | | | | (824) | | | | | | (575) | | | | | | 3,219 | | |
| | | Pro Forma September 30, 2020 | | | September 30, | | | December 31, | | |||||||||
| 2020 | | | 2019 | | ||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | | | $ | 29,088 | | | | | $ | 31,078 | | | | | $ | 22,866 | | |
Restricted cash | | | | | 1,777 | | | | | | 1,777 | | | | | | 9,991 | | |
Accounts receivable, net | | | | | 22,543 | | | | | | 22,543 | | | | | | 15,246 | | |
Inventories | | | | | 79,990 | | | | | | 79,990 | | | | | | 50,228 | | |
Notes receivable | | | | | 3,151 | | | | | | 3,151 | | | | | | 4,796 | | |
Prepaid expenses and other current assets | | | | | 6,364 | | | | | | 6,364 | | | | | | 1,840 | | |
Total current assets | | | | | 142,913 | | | | | | 144,903 | | | | | | 104,967 | | |
Property and equipment, net | | | | | 3,303 | | | | | | 3,303 | | | | | | 3,550 | | |
Operating lease right-of-use assets | | | | | 15,877 | | | | | | 15,877 | | | | | | 18,521 | | |
Intangible assets, net | | | | | 53,560 | | | | | | 53,560 | | | | | | 57,406 | | |
Other assets | | | | | 928 | | | | | | 928 | | | | | | 1,207 | | |
Total assets | | | | | 216,581 | | | | | $ | 218,571 | | | | | $ | 185,651 | | |
Liabilities, convertible preferred stock and stockholders’ equity | | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | |
Accounts payable | | | | | 35,290 | | | | | $ | 35,290 | | | | | $ | 17,224 | | |
Accrued expenses and other current liabilities | | | | | 17,121 | | | | | | 17,121 | | | | | | 9,188 | | |
Current portion of lease liabilities | | | | | 3,142 | | | | | | 3,142 | | | | | | 3,181 | | |
Current portion of long-term debt | | | | | 37,224 | | | | | | 37,224 | | | | | | 34,827 | | |
Total current liabilities | | | | | 92,777 | | | | | | 92,777 | | | | | | 64,420 | | |
Long-term lease liabilities | | | | | 13,350 | | | | | | 13,350 | | | | | | 15,786 | | |
Long-term debt | | | | | 74,602 | | | | | | 74,602 | | | | | | 73,105 | | |
Other long-term liabilities | | | | | 581 | | | | | | 581 | | | | | | 1,160 | | |
Total liabilities | | | | | 181,310 | | | | | | 181,310 | | | | | | 154,471 | | |
Commitments and contingencies (Note 10) | | | | | | | | | | | | | | | | | | | |
Convertible preferred stock $0.0001 par value; 50,000,000 shares authorized; 7,725,045 and 7,007,429 shares issued and outstanding at September 30, 2020 and December 31, 2019 including cumulative dividends of $1,990 and $0 respectively; no shares issued and outstanding on a pro forma basis | | | | | — | | | | | | 27,584 | | | | | | 21,802 | | |
Stockholders’ equity | | | | | | | | | | | | | | | | | | | |
Common stock – $0.0001 par value; 300,000,000 shares authorized; 20,688,439 shares issued and outstanding at September 30, 2020 and December 31, 2019; 22,979,908 shares issued and outstanding on a pro forma basis | | | | | 2 | | | | | | 2 | | | | | | 2 | | |
Additional paid-in capital | | | | | 180,193 | | | | | | 154,599 | | | | | | 156,179 | | |
Accumulated other comprehensive loss | | | | | (390) | | | | | | (390) | | | | | | (144) | | |
Accumulated deficit | | | | | (144,534) | | | | | | (144,534) | | | | | | (146,659) | | |
Total stockholders’ equity | | | | | 35,271 | | | | | | 9,677 | | | | | | 9,378 | | |
Total liabilities, convertible preferred stock and stockholders’ equity | | | | $ | 216,581 | | | | | $ | 218,571 | | | | | $ | 185,651 | | |
| | | Nine months ended September 30, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Net sales | | | | $ | 254,763 | | | | | $ | 181,338 | | |
Cost of goods sold | | | | | 207,139 | | | | | | 159,762 | | |
Gross profit | | | | | 47,624 | | | | | | 21,576 | | |
Operating expenses: | | | | | | | | | | | | | |
Selling, general and administrative | | | | | 37,084 | | | | | | 30,759 | | |
Impairment, restructuring and other | | | | | 276 | | | | | | 3,589 | | |
Income (loss) from operations | | | | | 10,264 | | | | | | (12,772) | | |
Interest expense | | | | | (7,858) | | | | | | (9,789) | | |
Loss on debt extinguishment | | | | | — | | | | | | (391) | | |
Other income, net | | | | | 103 | | | | | | 334 | | |
Income (loss) before tax | | | | | 2,509 | | | | | | (22,618) | | |
Income tax (expense) benefit | | | | | (384) | | | | | | 246 | | |
Net income (loss) | | | | | 2,125 | | | | | | (22,372) | | |
Cumulative dividends allocated to Series A Convertible Preferred Stock | | | | | (1,990) | | | | | | — | | |
Net income (loss) attributable to common stockholders | | | | $ | 135 | | | | | $ | (22,372) | | |
Net income (loss) | | | | $ | 2,125 | | | | | $ | (22,372) | | |
Foreign currency translation (loss) gain | | | | | (246) | | | | | | 1,193 | | |
Total comprehensive income (loss) | | | | $ | 1,879 | | | | | $ | (21,179) | | |
Historical earnings per share: | | | | | | | | | | | | | |
Net income (loss) per share attributable to common stockholders: | | | | | | | | | | | | | |
Basic | | | | $ | 0.01 | | | | | $ | (1.08) | | |
Diluted | | | | $ | 0.01 | | | | | $ | (1.08) | | |
Weighted-average shares of common stock outstanding: | | | | | | | | | | | | | |
Basic | | | | | 20,688,439 | | | | | | 20,688,439 | | |
Diluted | | | | | 20,892,507 | ��� | | | | | 20,688,439 | | |
Pro forma earnings per share for 2020: | | | | | | | | | | | | | |
Net income per share attributable to common stockholders on pro forma basis: | | | | | | | | | | | | | |
Basic | | | | $ | 0.09 | | | | | | | | |
Diluted | | | | $ | 0.09 | | | | | | | | |
Weighted-average shares of common stock outstanding on pro forma basis: | | | | | | | | | | | | | |
Basic | | | | | 22,942,435 | | | | | | | | |
Diluted | | | | | 23,146,503 | | | | | | | | |
| | | Convertible Preferred Stock | | | Common Stock | | | Additional Paid-In Capital | | | Accumulated Other Comprehensive Income (Loss) | | | Accumulated Deficit | | | Total Stockholders’ Equity | | ||||||||||||||||||||||||||||||
| | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||||||||||||||||||||||||||
Balance, January 1, 2019 | | | | | — | | | | | $ | — | | | | | | 20,688,439 | | | | | $ | 2 | | | | | $ | 155,971 | | | | | $ | (1,853) | | | | | $ | (106,576) | | | | | $ | 47,544 | | |
Stock-based compensation expense | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 173 | | | | | | — | | | | | | — | | | | | | 173 | | |
Net loss | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (22,372) | | | | | | (22,372) | | |
Foreign currency translation gain | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,193 | | | | | | — | | | | | | 1,193 | | |
Balance, September 30, 2019 | | | | | — | | | | | $ | — | | | | | | 20,688,439 | | | | | $ | 2 | | | | | $ | 156,144 | | | | | $ | (660) | | | | | $ | (128,948) | | | | | $ | 26,538 | | |
Balance, January 1, 2020 | | | | | 7,007,429 | | | | | $ | 21,802 | | | | | | 20,688,439 | | | | | $ | 2 | | | | | $ | 156,179 | | | | | $ | (144) | | | | | $ | (146,659) | | | | | $ | 9,378 | | |
Proceeds from issuance of Series A Convertible Preferred Stock, net of issuance costs of $169 | | | | | 717,616 | | | | | | 2,342 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Collection of receivable for issuance of Series A Convertible Preferred Stock | | | | | — | | | | | | 1,450 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Stock-based compensation expense | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 410 | | | | | | — | | | | | | — | | | | | | 410 | | |
Series A Convertible Preferred Stock cumulative dividend | | | | | — | | | | | | 1,990 | | | | | | — | | | | | | — | | | | | | (1,990) | | | | | | — | | | | | | — | | | | | | (1,990) | | |
Net income | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,125 | | | | | | 2,125 | | |
Foreign currency translation loss | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (246) | | | | | | — | | | | | | (246) | | |
Balance, September 30, 2020 | | | | | 7,725,045 | | | | | $ | 27,584 | | | | | | 20,688,439 | | | | | $ | 2 | | | | | $ | 154,599 | | | | | $ | (390) | | | | | $ | (144,534) | | | | | $ | 9,677 | | |
|
| | | Nine months ended September 30, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Operating activities | | | | | | | | | | | | | |
Net income (loss) | | | | $ | 2,125 | | | | | $ | (22,372) | | |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | | | | | | | | | | | | | |
Depreciation and amortization | | | | | 5,170 | | | | | | 5,198 | | |
Non-cash operating lease expense | | | | | 2,538 | | | | | | 2,771 | | |
Amortization of deferred financing costs | | | | | 715 | | | | | | 470 | | |
Interest expense capitalized to principal of long-term debt | | | | | 20 | | | | | | 7,259 | | |
Other | | | | | 276 | | | | | | (314) | | |
Changes in assets and liabilities: | | | | | | | | | | | | | |
Accounts receivable | | | | | (7,694) | | | | | | (4,342) | | |
Inventories | | | | | (29,730) | | | | | | (3,677) | | |
Prepaid expenses and other current assets | | | | | (3,650) | | | | | | (3,175) | | |
Accounts payable | | | | | 18,145 | | | | | | 7,566 | | |
Accrued expenses and other current liabilities | | | | | 7,166 | | | | | | 1,898 | | |
Lease liabilities | | | | | (2,379) | | | | | | (2,542) | | |
Other | | | | | (479) | | | | | | (260) | | |
Net cash used in operating activities | | | | | (7,777) | | | | | | (11,520) | | |
Investing activities | | | | | | | | | | | | | |
Purchases of property and equipment | | | | | (700) | | | | | | (541) | | |
Issuance of notes receivable | | | | | — | | | | | | (3,031) | | |
Proceeds on notes receivable | | | | | 2,000 | | | | | | — | | |
Other | | | | | 28 | | | | | | — | | |
Net cash provided by (used in) investing activities | | | | | 1,328 | | | | | | (3,572) | | |
Financing activities | | | | | | | | | | | | | |
Proceeds from issuance of Series A Convertible Preferred Stock, net of issuance costs | | | | | 3,792 | | | | | | — | | |
Proceeds from issuance of convertible debt | | | | | — | | | | | | 5,873 | | |
Borrowings from PPP Loan | | | | | 3,274 | | | | | | — | | |
Borrowings under revolving credit facilities | | | | | 213,621 | | | | | | 203,724 | | |
Payments of deferred financing costs | | | | | (13) | | | | | | (1,377) | | |
Repayments of long-term debt and revolving credit facilities | | | | | (213,709) | | | | | | (203,420) | | |
Payments of deferred offering costs | | | | | (153) | | | | | | — | | |
Other | | | | | (404) | | | | | | (137) | | |
Net cash provided by financing activities | | | | | 6,408 | | | | | | 4,663 | | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | | | | | 39 | | | | | | 2,347 | | |
Net decrease in cash, cash equivalents and restricted cash | | | | | (2) | | | | | | (8,082) | | |
Cash, cash equivalents and restricted cash at beginning of period | | | | | 32,857 | | | | | | 27,923 | | |
Cash, cash equivalents and restricted cash at end of period | | | | $ | 32,855 | | | | | $ | 19,841 | | |
| | | For the nine months ended September 30, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
United States | | | | $ | 212,706 | | | | | $ | 148,993 | | |
Canada | | | | | 44,352 | | | | | | 35,457 | | |
Intersegment eliminations | | | | | (2,295) | | | | | | (3,112) | | |
Total consolidated net sales | | | | $ | 254,763 | | | | | $ | 181,338 | | |
|
| | | September 30, 2020 | | | December 31, 2019 | | ||||||
United States | | | | $ | 2,633 | | | | | $ | 2,660 | | |
Canada | | | | | 670 | | | | | | 890 | | |
Total property and equipment, net | | | | $ | 3,303 | | | | | $ | 3,550 | | |
| | | September 30, 2020 | | | December 31, 2019 | | ||||||
Cash and cash equivalents | | | | $ | 31,078 | | | | | $ | 22,866 | | |
Restricted cash | | | | | 1,777 | | | | | | 9,991 | | |
Cash and cash equivalents, and restricted cash | | | | $ | 32,855 | | | | | $ | 32,857 | | |
| | | Nine months ended September 30, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Net income (loss) | | | | $ | 2,125 | | | | | $ | (22,372) | | |
Cumulative dividends allocated to Series A Convertible Preferred Stock | | | | | (1,990) | | | | | | — | | |
Net income (loss) available for distribution | | | | | 135 | | | | | | (22,372) | | |
Less: Undistributed earnings allocable to participating securities | | | | | (13) | | | | | | — | | |
Basic and diluted net income (loss) attributable to common stockholders | | | | $ | 122 | | | | | $ | (22,372) | | |
Less: Effect on net income (loss) of dilutive securities using the “if converted” method | | | | | — | | | | | | — | | |
Diluted net income (loss) attributable to common stockholders after adjustment for assumed conversions | | | | $ | 122 | | | | | $ | (22,372) | | |
Weighted-average shares of common stock outstanding for basic net income (loss) per share attributable to common stockholders | | | | | 20,688,439 | | | | | | 20,688,439 | | |
Dilutive effect of restricted stock units subject only to time-based vesting using the treasury stock method | | | | | 127,544 | | | | | | — | | |
Dilutive effect of warrants using the treasury stock method | | | | | 29,113 | | | | | | — | | |
Dilutive effect of stock options using the treasury stock method | | | | | 47,411 | | | | | | — | | |
Weighted-average shares of common stock outstanding for diluted net income (loss) per share attributable to common stockholders | | | | | 20,892,507 | | | | | | 20,688,439 | | |
Basic net income (loss) per share attributable to common stockholders | | | | $ | 0.01 | | | | | $ | (1.08) | | |
Diluted net income (loss) per share attributable to common stockholders | | | | $ | 0.01 | | | | | $ | (1.08) | | |
| | | Nine months ended September 30, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Shares subject to warrants outstanding | | | | | 344,716 | | | | | | — | | |
Shares subject to stock options outstanding | | | | | 848,837 | | | | | | — | | |
Shares subject to unvested restricted stock units subject only to time-based vesting | | | | | 402,151 | | | | | | — | | |
| | | Nine months ended September 30, | | |||||||||
| | | 2020 | | | 2019 | | ||||||
Shares subject to warrants outstanding | | | | | 3,541,475 | | | | | | 3,886,191 | | |
Shares subject to stock options outstanding | | | | | — | | | | | | 796,593 | | |
Shares subject to unvested restricted stock units with performance conditions | | | | | 2,117,228 | | | | | | 1,406,826 | | |
Shares of common stock subject to conversion of 7,725,045 shares Series A preferred stock | | | | | 2,291,469 | | | | | | — | | |
Shares of common stock subject to share settlement of $1,990 cumulative dividend on Series A preferred stock | | | | | 168,644 | | | | | | — | | |
| | | Nine months ended September 30, 2020 | | |||
Basic and diluted net income attributable to common stockholders | | | | $ | 122 | | |
Add-back: Cumulative dividends allocated to Series A Convertible Preferred Stock, assuming conversion | | | | | 1,990 | | |
Add-back: Undistributed earnings allocable to participating securities, assuming conversion | | | | | 13 | | |
Net income used to calculate basic pro forma net income per share attributable to common stockholders | | | | | 2,125 | | |
Less: Effect on net income of dilutive securities using the “if converted” method | | | | | — | | |
Net income used to calculate dilutive pro forma net income per share attributable to common stockholders | | | | $ | 2,125 | | |
Weighted-average shares of common stock outstanding for basic earnings per share | | | | | 20,688,439 | | |
Add: Pro forma adjustment to reflect assumed conversion of all outstanding shares of Series A Preferred Stock | | | | | 2,253,996 | | |
Weighted-average shares of common stock outstanding for pro forma basic earnings per share | | | | | 22,942,435 | | |
Add: Dilutive effect of restricted stock units, warrants and stock options using the treasury stock method | | | | | 204,068 | | |
Weighted-average shares of common stock outstanding used to compute pro forma diluted net income per share attributable to common stockholders | | | | | 23,146,503 | | |
Pro forma basic net income per share attributable to common stockholders | | | | $ | 0.09 | | |
Pro forma diluted net income per share attributable to common stockholders | | | | $ | 0.09 | | |
| | | September 30, 2020 | | | December 31, 2019 | | ||||||
Trade accounts receivable | | | | $ | 22,761 | | | | | $ | 16,577 | | |
Allowance for doubtful accounts | | | | | (1,323) | | | | | | (1,776) | | |
Other receivables | | | | | 1,105 | | | | | | 445 | | |
Total accounts receivable, net | | | | $ | 22,543 | | | | | $ | 15,246 | | |
| | | September 30, 2020 | | | December 31, 2019 | | ||||||
Finished goods | | | | $ | 83,089 | | | | | $ | 54,050 | | |
Allowance for inventory obsolescence | | | | | (3,099) | | | | | | (3,822) | | |
Total inventories | | | | $ | 79,990 | | | | | $ | 50,228 | | |
| | | September 30, 2020 | | | December 31, 2019 | | ||||||
Assets | | | | | | | | | | | | | |
Operating lease right-of-use assets | | | | $ | 15,877 | | | | | $ | 18,521 | | |
Total leased assets | | | | $ | 15,877 | | | | | $ | 18,521 | | |
Liabilities | | | | | | | | | | | | | |
Current portion of lease liabilities | | | | $ | 3,142 | | | | | $ | 3,181 | | |
Long-term lease liabilities | | | | | 13,350 | | | | | | 15,786 | | |
Total lease liabilities | | | | $ | 16,492 | | | | | $ | 18,967 | | |
| | | Operating | | |||
For the period of October 1, 2020 to December 31, 2020 | | | | $ | 945 | | |
Year ending December 31 | | | | | | | |
2021 | | | | | 3,823 | | |
2022 | | | | | 3,335 | | |
2023 | | | | | 1,803 | | |
2024 | | | | | 1,397 | | |
2025 | | | | | 1,428 | | |
Thereafter | | | | | 6,730 | | |
Total rental payments | | | | | 19,461 | | |
Less portion representing interest | | | | | (2,969) | | |
Total principal | | | | | 16,492 | | |
Less current portion | | | | | (3,142) | | |
Long-term portion | | | | $ | 13,350 | | |
| | | September 30, 2020 | | | December 31, 2019 | | ||||||
Goods in transit accrual | | | | $ | 4,126 | | | | | $ | 1,005 | | |
Freight, custom and duty accrual | | | | | 3,486 | | | | | | 977 | | |
Accrued compensation and benefits | | | | | 3,355 | | | | | | 1,857 | | |
Obligations due under a distribution agreement | | | | | 586 | | | | | | 1,154 | | |
Costs related to issuance of Series A Convertible Preferred Stock | | | | | — | | | | | | 1,239 | | |
Other accrued liabilities | | | | | 5,568 | | | | | | 2,956 | | |
Total accrued expenses and other current liabilities | | | | $ | 17,121 | | | | | $ | 9,188 | | |
| | | September 30, 2020 | | | December 31, 2019 | | ||||||||||||||||||||||||||||||
| | | Outstanding Principal | | | Unamortized Discount and Deferred Financing Costs | | | Net Carrying Amount | | | Outstanding Principal | | | Unamortized Discount and Deferred Financing Costs | | | Net Carrying Amount | | ||||||||||||||||||
Term loan | | | | $ | 76,292 | | | | | $ | (1,035) | | | | | $ | 75,257 | | | | | $ | 85,111 | | | | | $ | (1,513) | | | | | $ | 83,598 | | |
Line of credit | | | | | 32,494 | | | | | | (568) | | | | | | 31,926 | | | | | | 23,864 | | | | | | (792) | | | | | | 23,072 | | |
PPP Loan | | | | | 3,274 | | | | | | — | | | | | | 3,274 | | | | | | — | | | | | | — | | | | | | — | | |
Other | | | | | 1,369 | | | | | | — | | | | | | 1,369 | | | | | | 1,262 | | | | | | — | | | | | | 1,262 | | |
Total debt | | | | | 113,429 | | | | | | (1,603) | | | | | | 111,826 | | | | | | 110,237 | | | | | | (2,305) | | | | | | 107,932 | | |
Current portion | | | | | 37,224 | | | | | | — | | | | | | 37,224 | | | | | | 34,827 | | | | | | — | | | | | | 34,827 | | |
Long term | | | | | 76,205 | | | | | | (1,603) | | | | | | 74,602 | | | | | | 75,410 | | | | | | (2,305) | | | | | | 73,105 | | |
Total debt | | | | $ | 113,429 | | | | | $ | (1,603) | | | | | $ | 111,826 | | | | | $ | 110,237 | | | | | $ | (2,305) | | | | | $ | 107,932 | | |
| | | Finance lease obligations | | | Debt | | | Total | | |||||||||
For the period from October 1, 2020 to December 31, 2020 | | | | $ | 101 | | | | | $ | 33,709 | | | | | $ | 33,810 | | |
Year ending December 31, | | | | | | | | | | | | | | | | | | | |
2021 | | | | | 400 | | | | | | 4,214 | | | | | | 4,614 | | |
2022 | | | | | 232 | | | | | | 74,754 | | | | | | 74,986 | | |
2023 | | | | | 56 | | | | | | 32 | | | | | | 88 | | |
Total | | | | | 789 | | | | | | 112,709 | | | | | | 113,498 | | |
Less portion representing interest | | | | | (69) | | | | | | — | | | | | | (69) | | |
Total debt | | | | $ | 720 | | | | | $ | 112,709 | | | | | $ | 113,429 | | |
| | | Finance lease obligations | | | Debt | | | Total | | |||||||||
Current portion | | | | $ | 356 | | | | | $ | 36,868 | | | | | $ | 37,224 | | |
Long-term | | | | | 364 | | | | | | 75,841 | | | | | | 76,205 | | |
Total payments due | | | | $ | 720 | | | | | $ | 112,709 | | | | | $ | 113,429 | | |
Capital stock authorized and outstanding: | | | Shares authorized | | | Shares outstanding | | ||||||
Convertible preferred stock | | | | | 50,000,000 | | | | | | 7,725,045 | | |
Common stock | | | | | 300,000,000 | | | | | | 20,688,439 | | |
| | | Number of RSUs | | | Grant date fair value | | | Expense during period | | | Unamortized compensation | | ||||||||||||
RSUs subject to passage of time and performance, all unvested | | | | | 2,117,228 | | | | | $ | 11,293 | | | | | $ | — | | | | | $ | 11,293 | | |
RSUs subject only to the passage of time: | | | | | | | | | | | | | | | | | | | | | | | | | |
Vested | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Unvested | | | | | 402,151 | | | | | | 2,440 | | | | | | (301) | | | | | | 2,139 | | |
Total RSUs outstanding | | | | | 2,519,379 | | | | | $ | 13,733 | | | | | $ | (301) | | | | | $ | 13,432 | | |
| | | Number | | | Weighted average exercise price | | | Weighted average grant date fair value | | | Weighted average remaining contractual term (yrs) | | ||||||||||||
Outstanding at January 1, 2020 | | | | | 819,879 | | | | | $ | 8.43 | | | | | $ | 0.71 | | | | | | 9.27 | | |
Granted | | | | | 75,962 | | | | | $ | 10.48 | | | | | $ | 4.32 | | | | | | | | |
Forfeited | | | | | (47,004) | | | | | $ | 8.43 | | | | | $ | 0.71 | | | | | | | | |
Exercised | | | | | — | | | | | | — | | | | | | | | | | |||||
Expired | | | | | — | | | | | | — | | | | | | | | | | | | | | |
Outstanding at September 30, 2020 | | | | | 848,837 | | | | | $ | 8.60 | | | | | $ | 1.08 | | | | | | 8.63 | | |
Options exercisable as of September 30, 2020 | | | | | 421,110 | | | | | $ | 8.43 | | | | | $ | 0.71 | | | | | | 8.44 | | |
Options vested and expected to vest as of September 30, 2020 | | | | | 848,837 | | | | | $ | 8.60 | | | | | $ | 1.08 | | | | | | 8.63 | | |
| | | Nine months ended September 30, | | |||
| | | 2020 | | | 2019 | |
Fair value of common stock underlying the options | | | $6.07 to $11.06 | | | $4.82 | |
Volatility | | | 50% to 55% | | | 30% | |
Risk-free rate | | | 0.03% to 0.89% | | | 1.37% to 2.49% | |
Dividend yield | | | Nil | | | Nil | |
Expected term in years | | | 5.0 to 5.61 | | | 5.0 to 5.62 | |
| J.P. Morgan | | | | | | Stifel | |
| Deutsche Bank Securities | | | Truist Securities | | | William Blair | |
| SEC registration fee | | | $ | 17,398 | | | SEC registration fee | | | $ | 29,831 | | | ||
| FINRA filing fee | | | | 24,420 | | | FINRA filing fee | | | | 41,514 | | | ||
| Accounting fees and expenses | | | | 950,000 | | | Accounting fees and expenses | | | | 120,000 | | | ||
| Legal fees and expenses | | | | 1,100,000 | | | Legal fees and expenses | | | | 500,000 | | | ||
| Printing expenses | | | | 235,000 | | | Printing expenses | | | | 50,000 | | | ||
| Transfer agent and registrar fees and expenses | | | | 4,500 | | | Transfer agent and registrar fees and expenses | | | | 5,000 | | | ||
| Miscellaneous fees and expenses | | | | 568,682 | | | Miscellaneous fees and expenses | | | | 3,655 | | | ||
| Total | | | $ | 2,900,000 | | | Total | | | $ | 750,000 | | |
| Name | | | Title | | | Date | |
| /s/ William Toler William Toler | | | Chief Executive Officer and Chairman of the Board ( | | | | |
| * B. John Lindeman | | | Chief Financial Officer ( | | | | |
| * Susan P. Peters | | | Director | | | | |
| * Patrick Chung | | | Director | | | | |
| * Renah Persofsky | | | Director | | | | |
| * Richard D. Moss | | | Director | | | | |
| Melisa Denis | | | Director | | | |