Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 05, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-37540 | |
Entity Registrant Name | HOSTESS BRANDS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-4168492 | |
Entity Address, Address Line One | 1 East Armour Boulevard | |
Entity Address, City or Town | Kansas City, | |
Entity Address, State or Province | MO | |
Entity Address, Postal Zip Code | 64111 | |
City Area Code | 816 | |
Local Phone Number | 701‑4600 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001644406 | |
Current Fiscal Year End Date | --12-31 | |
Common Class A | ||
Class of Stock [Line Items] | ||
Title of 12(b) Security | Class A Common Stock, Par Value of $0.0001 per share | |
Trading Symbol | TWNK | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 120,947,081 | |
Warrant | ||
Class of Stock [Line Items] | ||
Title of 12(b) Security | Warrants, each exercisable for a half share of Class A Common Stock | |
Trading Symbol | TWNKW | |
Security Exchange Name | NASDAQ | |
Common Class B | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 9,455,184 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 266,871 | $ 146,377 |
Accounts receivable, net | 115,857 | 105,679 |
Inventories | 38,582 | 38,580 |
Prepaids and other current assets | 12,182 | 8,806 |
Total current assets | 433,492 | 299,442 |
Property and equipment, net | 227,114 | 220,349 |
Intangible assets, net | 1,858,943 | 1,901,215 |
Goodwill | 535,853 | 575,645 |
Other assets, net | 11,376 | 14,062 |
Total assets | 3,066,778 | 3,010,713 |
Current liabilities: | ||
Long-term debt and lease obligations payable within one year | 10,166 | 11,268 |
Tax receivable agreement payments payable within one year | 10,700 | 4,400 |
Accounts payable | 69,811 | 65,288 |
Customer trade allowances | 44,593 | 42,010 |
Accrued expenses and other current liabilities | 23,389 | 18,137 |
Total current liabilities | 158,659 | 141,103 |
Long-term debt and lease obligations | 972,838 | 976,736 |
Tax receivable agreement obligations | 125,023 | 64,663 |
Deferred tax liability | 252,986 | 277,954 |
Total liabilities | 1,509,506 | 1,460,456 |
Commitments and Contingencies (Note 12) | ||
Additional paid in capital | 1,140,126 | 925,902 |
Accumulated other comprehensive income (loss) | (687) | 2,523 |
Retained earnings | 312,759 | 271,365 |
Stockholders’ equity | 1,452,211 | 1,199,803 |
Non-controlling interest | 105,061 | 350,454 |
Total liabilities and stockholders’ equity | 3,066,778 | 3,010,713 |
Common Class A | ||
Current liabilities: | ||
Common Stock | 12 | 10 |
Common Class B | ||
Current liabilities: | ||
Common Stock | $ 1 | $ 3 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Common Class A | ||
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (shares) | 200,000,000 | 200,000,000 |
Common stock, issued (shares) | 120,947,081 | 100,046,392 |
Common stock, outstanding (shares) | 120,947,081 | 100,046,392 |
Common Class B | ||
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (shares) | 50,000,000 | 50,000,000 |
Common stock, issued (shares) | 9,455,184 | 30,255,184 |
Common stock, outstanding (shares) | 9,455,184 | 30,255,184 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Net revenue | $ 227,211 | $ 210,982 | $ 691,009 | $ 635,574 |
Cost of goods sold | 156,791 | 150,604 | 461,951 | 437,098 |
Gross profit | 70,420 | 60,378 | 229,058 | 198,476 |
Operating costs and expenses: | ||||
Advertising and marketing | 10,627 | 9,563 | 30,186 | 27,371 |
Selling expense | 6,992 | 7,467 | 23,822 | 22,606 |
General and administrative | 17,736 | 13,569 | 54,483 | 39,315 |
Amortization of customer relationships | 5,755 | 5,994 | 17,749 | 17,983 |
Other operating expense (income) | 5,739 | 92 | 6,256 | (12) |
Total operating costs and expenses | 46,849 | 36,685 | 132,496 | 107,263 |
Operating income | 23,571 | 23,693 | 96,562 | 91,213 |
Other expense: | ||||
Interest expense, net | 9,813 | 9,974 | 30,351 | 29,063 |
Gain on buyout of tax receivable agreement | 0 | 0 | 0 | (12,372) |
Other expense (income) | 0 | (36) | 1,286 | 133 |
Total other expense | 9,813 | 9,938 | 31,637 | 16,824 |
Income before income taxes | 13,758 | 13,755 | 64,925 | 74,389 |
Income tax expense | 3,029 | 2,603 | 10,915 | 9,315 |
Net income | 10,729 | 11,152 | 54,010 | 65,074 |
Less: Net income attributable to the non-controlling interest | 1,944 | 3,211 | 12,615 | 14,010 |
Net income attributable to Class A stockholders | $ 8,785 | $ 7,941 | $ 41,395 | $ 51,064 |
Earnings per Class A share: | ||||
Basic (usd per share) | $ 0.08 | $ 0.08 | $ 0.39 | $ 0.51 |
Diluted (usd per share) | $ 0.07 | $ 0.08 | $ 0.37 | $ 0.49 |
Weighted-average shares outstanding: | ||||
Basic (shares) | 115,196,195 | 99,958,244 | 106,904,733 | 99,931,167 |
Diluted (shares) | 121,122,895 | 102,963,080 | 110,804,367 | 104,299,251 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 10,729 | $ 11,152 | $ 54,010 | $ 65,074 |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on interest rate swap contract designated as a cash flow hedge | (741) | 460 | (5,912) | 5,581 |
Tax benefit (expense) | 172 | (97) | 1,255 | (1,175) |
Comprehensive income | 10,160 | 11,515 | 49,353 | 69,480 |
Less: Comprehensive income attributed to non-controlling interest | 1,858 | 3,318 | 11,447 | 15,308 |
Comprehensive income attributed to Class A stockholders | $ 8,302 | $ 8,197 | $ 37,906 | $ 54,172 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Class A | Class B | Total Stockholders’ Equity | Common StockClass A | Common StockClass B | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Retained Earnings | Non-controlling Interest |
Beginning Balance (shares) at Dec. 31, 2017 | 99,791,245 | 30,319,564 | ||||||||
Beginning Balance at Dec. 31, 2017 | $ 1,130,333 | $ 10 | $ 3 | $ 920,723 | $ 1,318 | $ 208,279 | $ 342,240 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Comprehensive income (loss) | 25,923 | 2,082 | 23,841 | 6,331 | ||||||
Share‑based compensation (shares) | 59,989 | |||||||||
Share-based compensation | 1,721 | 1,721 | 0 | |||||||
Exchanges (shares) | 64,380 | (64,380) | ||||||||
Exchanges | 1,033 | 1,033 | (1,033) | |||||||
Distributions | (4,153) | |||||||||
Payment of taxes for employee stock awards | (407) | (407) | ||||||||
Tax receivable agreement arising from exchanges, net of income taxes | (350) | (350) | 0 | |||||||
Ending Balance (shares) at Mar. 31, 2018 | 99,915,614 | 30,255,184 | ||||||||
Ending Balance at Mar. 31, 2018 | 1,158,451 | $ 10 | $ 3 | 922,720 | 3,407 | 232,311 | 343,470 | |||
Beginning Balance (shares) at Dec. 31, 2017 | 99,791,245 | 30,319,564 | ||||||||
Beginning Balance at Dec. 31, 2017 | 1,130,333 | $ 10 | $ 3 | 920,723 | 1,318 | 208,279 | 342,240 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Comprehensive income (loss) | $ 69,480 | |||||||||
Ending Balance (shares) at Sep. 30, 2018 | 99,919,503 | 30,255,184 | ||||||||
Ending Balance at Sep. 30, 2018 | 1,188,461 | $ 10 | $ 3 | 924,481 | 4,433 | 259,534 | 347,066 | |||
Beginning Balance (shares) at Mar. 31, 2018 | 99,915,614 | 30,255,184 | ||||||||
Beginning Balance at Mar. 31, 2018 | 1,158,451 | $ 10 | $ 3 | 922,720 | 3,407 | 232,311 | 343,470 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Comprehensive income (loss) | 20,052 | 770 | 19,282 | 5,658 | ||||||
Share‑based compensation (shares) | 3,889 | |||||||||
Share-based compensation | 811 | 811 | 0 | |||||||
Distributions | (5,310) | |||||||||
Payment of taxes for employee stock awards | (29) | (29) | ||||||||
Ending Balance (shares) at Jun. 30, 2018 | 99,919,503 | 30,255,184 | ||||||||
Ending Balance at Jun. 30, 2018 | 1,179,285 | $ 10 | $ 3 | 923,502 | 4,177 | 251,593 | 343,818 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Comprehensive income (loss) | 11,515 | 8,197 | 256 | 7,941 | 3,318 | |||||
Share-based compensation | 979 | 979 | 0 | |||||||
Distributions | (70) | |||||||||
Ending Balance (shares) at Sep. 30, 2018 | 99,919,503 | 30,255,184 | ||||||||
Ending Balance at Sep. 30, 2018 | 1,188,461 | $ 10 | $ 3 | 924,481 | 4,433 | 259,534 | 347,066 | |||
Beginning Balance (shares) at Dec. 31, 2018 | 100,046,392 | 30,255,184 | 100,046,392 | 30,255,184 | ||||||
Beginning Balance at Dec. 31, 2018 | 1,199,803 | $ 10 | $ 3 | 925,902 | 2,523 | 271,365 | 350,454 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Comprehensive income (loss) | 19,910 | (1,216) | 21,126 | 4,984 | ||||||
Share-based compensation | 1,668 | 1,668 | 0 | |||||||
Distributions | (457) | |||||||||
Exercise of public warrants (shares) | 50 | |||||||||
Ending Balance (shares) at Mar. 31, 2019 | 100,046,442 | 30,255,184 | ||||||||
Ending Balance at Mar. 31, 2019 | 1,221,381 | $ 10 | $ 3 | 927,570 | 1,307 | 292,491 | 354,981 | |||
Beginning Balance (shares) at Dec. 31, 2018 | 100,046,392 | 30,255,184 | 100,046,392 | 30,255,184 | ||||||
Beginning Balance at Dec. 31, 2018 | 1,199,803 | $ 10 | $ 3 | 925,902 | 2,523 | 271,365 | 350,454 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Comprehensive income (loss) | 49,353 | |||||||||
Exchanges (shares) | 20,800,000 | |||||||||
Ending Balance (shares) at Sep. 30, 2019 | 120,947,081 | 9,455,184 | 120,947,081 | 9,455,184 | ||||||
Ending Balance at Sep. 30, 2019 | 1,452,211 | $ 12 | $ 1 | 1,140,126 | (687) | 312,759 | 105,061 | |||
Beginning Balance (shares) at Mar. 31, 2019 | 100,046,442 | 30,255,184 | ||||||||
Beginning Balance at Mar. 31, 2019 | 1,221,381 | $ 10 | $ 3 | 927,570 | 1,307 | 292,491 | 354,981 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Comprehensive income (loss) | 9,694 | (1,789) | 11,483 | 4,605 | ||||||
Share‑based compensation (shares) | 20,241 | |||||||||
Share-based compensation | 1,936 | 1,936 | 0 | |||||||
Exchanges (shares) | 9,255,400 | (9,255,400) | ||||||||
Exchanges | 111,026 | $ 1 | $ (1) | 110,734 | 292 | (111,026) | ||||
Distributions | (4,459) | |||||||||
Exercise of employee stock options (shares) | 1,788 | |||||||||
Exercise of employee stock options | 23 | 23 | ||||||||
Payment of taxes for employee stock awards | (124) | (124) | ||||||||
Tax receivable agreement arising from exchanges, net of income taxes | (17,610) | (17,610) | 0 | |||||||
Ending Balance (shares) at Jun. 30, 2019 | 109,323,871 | 20,999,784 | ||||||||
Ending Balance at Jun. 30, 2019 | 1,326,326 | $ 11 | $ 2 | 1,022,529 | (190) | 303,974 | 244,101 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Comprehensive income (loss) | $ 10,160 | 8,302 | (483) | 8,785 | 1,858 | |||||
Share‑based compensation (shares) | 78,610 | |||||||||
Share-based compensation | 2,149 | 2,149 | 0 | |||||||
Exchanges (shares) | 11,544,600 | (11,544,600) | ||||||||
Exchanges | 139,155 | $ 1 | $ (1) | 139,169 | (14) | (139,155) | ||||
Distributions | (1,743) | |||||||||
Payment of taxes for employee stock awards | (483) | (483) | ||||||||
Tax receivable agreement arising from exchanges, net of income taxes | (23,238) | (23,238) | 0 | |||||||
Ending Balance (shares) at Sep. 30, 2019 | 120,947,081 | 9,455,184 | 120,947,081 | 9,455,184 | ||||||
Ending Balance at Sep. 30, 2019 | $ 1,452,211 | $ 12 | $ 1 | $ 1,140,126 | $ (687) | $ 312,759 | $ 105,061 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||||
Tax effect from new accounting principle adoption | $ 83 | |||||
Tax effect from share-based compensation | $ 228 | $ 563 | $ 613 | $ 537 | $ 287 | 98 |
Tax effect from tax receivable agreement | $ 17,185 | $ 10,109 | $ 50 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating activities | ||
Net income | $ 54,010 | $ 65,074 |
Depreciation and amortization | 32,678 | 31,370 |
Impairment of property, goodwill and intangibles | 1,005 | 1,417 |
Debt premium amortization | (803) | (810) |
Tax receivable agreement remeasurement and gain on buyout | 1,296 | (14,124) |
Non-cash fees on disposal of assets | 1,414 | 0 |
Share-based compensation | 7,157 | 4,237 |
Deferred taxes | 9,519 | 7,929 |
Loss on sale of assets | 471 | 1 |
Change in operating assets and liabilities, net of acquisitions and dispositions: | ||
Accounts receivable | (13,536) | (5,451) |
Inventories | (3,451) | 4,670 |
Prepaids and other current assets | (3,793) | (2,407) |
Accounts payable and accrued expenses | 18,305 | 20,759 |
Customer trade allowances | 3,080 | (2,794) |
Net cash provided by operating activities | 107,352 | 109,871 |
Investing activities | ||
Purchases of property and equipment | (28,421) | (32,886) |
Acquisition of business, net of cash | 0 | (23,910) |
Proceeds from sale of business, net of cash | 63,353 | 0 |
Acquisition and development of software assets | (4,298) | (2,480) |
Net cash used provided by (used in) investing activities | 30,634 | (59,276) |
Financing activities | ||
Repayments of long-term debt and lease obligations | (7,470) | (7,578) |
Distributions to non-controlling interest | (6,659) | (9,533) |
Tax payments related to issuance of shares to employees | (607) | (436) |
Cash received from exercise of options | 23 | 0 |
Payments on tax receivable agreement | (2,779) | (41,353) |
Net cash used in financing activities | (17,492) | (58,900) |
Net increase (decrease) in cash and cash equivalents | 120,494 | (8,305) |
Cash and cash equivalents at beginning of period | 146,377 | 135,701 |
Cash and cash equivalents at end of period | 266,871 | 127,396 |
Cash paid during the period for: | ||
Interest | 33,602 | 30,972 |
Net taxes paid | 2,416 | 4,092 |
Supplemental disclosure of non-cash investing: | ||
Accrued capital expenditures | $ 1,468 | $ (59) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Descr i ption of Business Hostess Brands, Inc. is a Delaware corporation headquartered in Kansas City, Missouri. The consolidated financial statements include the accounts of Hostess Brands, Inc. and its subsidiaries (collectively, the “Company”). The Company is a leading packaged food company focused on developing, manufacturing, marketing, selling and distributing fresh sweet baked goods in the United States. The Company’s operations are conducted through indirect operating subsidiaries that are wholly-owned by Hostess Holdings, L.P. (“Hostess Holdings”), a direct subsidiary of Hostess Brands, Inc. Hostess Brands, Inc. holds 100% of the general partnership interest in Hostess Holdings and a majority of the limited partnership interests therein and consolidates Hostess Holdings in the Company’s consolidated financial statements. The remaining limited partnership interests in Hostess Holdings are held by the holders of the outstanding shares of Class B common stock of Hostess Brands, Inc. These limited partnership interests in Hostess Holdings are reflected in the consolidated financial statements as a non-controlling interest. Basis of Presentation The consolidated financial statements included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the unaudited consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s financial position and of the results of operations and cash flows for the periods presented, and all such adjustments were of a normal and recurring nature. The results of operations are not necessarily indicative of the results to be expected for the full fiscal year. The accompanying unaudited consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2018 . The Company has two reportable segments: Sweet Baked Goods and In-Store Bakery. The Company sold its In-Store Bakery operations on August 30, 2019. Adoption of New Accounting Standards On January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases, along with the related ASUs 2018-01, 2018-10 and 2018-11 (collectively, “Topic 842”). Topic 842 requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by lease terms of more than 12 months. To adopt this standard, the Company utilized a modified retrospective transition method. Under this approach, the results for reporting periods beginning January 1, 2019 are presented under Topic 842. Prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting standards. There was no cumulative effect of applying Topic 842 to the opening balance of retained earnings. The Company has elected to apply the practical expedients under Topic 842 which allow entities to not reassess the lease classification for expired or existing leases and to not reassess if expired or existing contracts contain leases under the Topic 842 definition. The Company has also elected to use hindsight when determining the lease term of existing leases. As a result of the adoption, on January 1, 2019, the Company recognized right of use assets of $8.2 million , offset by associated accumulated amortization of $5.2 million and corresponding lease liabilities of $3.0 million . The recognition of leases subsequent to the adoption of Topic 842 is further described in the Leases section of this footnote. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its majority-owned or controlled subsidiaries (including those for which the Company is the primary beneficiary of a variable interest entity). All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities at the date of the financial statements and for the reported amounts of revenues and expenses during the reporting period. Management utilizes estimates, including, but not limited to, valuation and useful lives of tangible and intangible assets, valuation of expected future payments under the tax receivable agreement, and reserves for trade and promotional allowances. Actual results could differ from these estimates. Accounts Receivable Accounts receivable represents amounts invoiced to customers for performance obligations which have been satisfied. As of September 30, 2019 and December 31, 2018 , the Company’s accounts receivable were $115.9 million and $105.7 million , respectively, which have been reduced by an allowance for damages occurring during shipment, quality claims and doubtful accounts in the amount of $2.7 million and $2.6 million , respectively. In addition, there were customer trade allowances of $44.6 million and $42.0 million as of September 30, 2019 and December 31, 2018 , respectively, in current liabilities in the consolidated balance sheets. Inventories Inventories are stated at the lower of cost or net-realizable value on a first-in first-out basis. Abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage) are expensed in the period they are incurred. The components of inventories are as follows : (In thousands) September 30, December 31, Ingredients and packaging $ 19,527 $ 18,865 Finished goods 16,654 16,446 Inventory in transit to customers 2,401 3,269 $ 38,582 $ 38,580 Impairment of Property and Equipment For the nine months ended September 30, 2018 , the Company recorded an impairment loss of $1.4 million related to the plann ed disposition of certain production equipment before the end of its useful life. This loss is included in other operating expenses on the consolidated statement of operations. The measurement of this loss was based on Level 3 inputs within the fair value measurement hierarchy. Software Costs Included in “Other assets, net” in the consolidated balance sheets is capitalized software in the amount of $10.9 million and $8.5 million at September 30, 2019 and December 31, 2018 , respectively. Capitalized software costs are amortized over their estimated useful life of five years commencing when such assets are ready for their intended use. Software amortization expense included in general and administrative was $0.7 million and $2.1 million for the three and nine months ended September 30, 2019 , respectively, compared to $0.6 million and $2.0 million for the three and nine months ended September 30, 2018 , respectively. Concentrations The Company has one customer (together with its affiliates) that accounted for 10% or more of the Company’s total net revenue. The percentage of total net revenues for this customer is presented below by segment: Three Months Ended Nine Months Ended (% of Consolidated Net Revenues) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Sweet Baked Goods 22.3 % 20.0 % 23.0 % 18.7 % In-Store Bakery 0.3 % 0.5 % 0.5 % 0.6 % Total 22.6 % 20.5 % 23.5 % 19.3 % Leases Subsequent to its adoption of Topic 842, the Company recognizes a right of use asset and corresponding lease liability on the consolidated balance sheet for all lease transactions with terms of more than 12 months. Agreements are determined to contain a lease if they convey the use and control of an underlying physical asset. Based on the nature of the lease transaction, leases are either classified as financing or operating. Under both classifications, the right of use asset and liability are initially valued based on the present value of the future minimum lease payments using an effective borrowing rate at the inception of the lease. The Company determined the effective borrowing rate based on its expected incremental borrowing rate on collateralized debt. At September 30, 2019 , the weighted average effective borrowing rates for outstanding operating leases was 4.5% . Under a financing lease, interest expense related to the lease liability is recognized over the lease term using an effective interest rate method and right of use assets are amortized straight-line over the term of the lease. Under an operating lease, minimum lease payments are expensed straight-line over the lease term. Lease liabilities are amortized using an effective interest rate method and right of use assets are reduced based on the excess of the sum of the straight-line lease expense and the reduction of the lease liability over the actual lease payments. At September 30, 2019 , the average remaining terms on operating leases were approximately one year . Variable lease payments, such as taxes and insurance, are expensed as incurred. Expenses related to leases with original terms less than 12 months (short-term leases) are expensed as incurred. For all leases related to distribution, bakery and corporate facilities, the Company has elected not to separate non-lease components from lease components. The table below shows the composition of lease expenses for the period subsequent to the adoption of Topic 842: Three Months Ended Nine Months Ended (In thousands) September 30, 2019 September 30, 2019 Amortization of right of use asset, financing lease $ 33 $ 133 Interest, financing lease 4 16 Operating lease expense 752 2,009 Short-term lease expense 202 884 Variable lease expense 188 565 $ 1,179 $ 3,607 At September 30, 2019 , right of use assets related to operating leases are included in property and equipment, net on the consolidated balance sheet (see Note 3. Property and Equipment ). As of September 30, 2019 , the Company has no outstanding financing leases. Lease liabilities for operating leases are included in the current and non-current portions of long-term debt and lease on the consolidated balance sheet (see Note 7. Debt and Lease Obligations ). |
Divestiture of In-Store Bakery
Divestiture of In-Store Bakery Operations | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestiture of In-Store Bakery Operations | Divestiture of In-Store Bakery Operations On August 30, 2019, the Company sold its In-Store Bakery operations, including relevant trademarks and licensing agreements, to an unrelated party. The operations included products that were primarily sold in the in-store bakery section of U.S. retail channels.The Company divested the operations to provide more focus on future investment in areas of its business that better leverage its core competencies. The Company received proceeds from the divestiture of $65.0 million prior to transaction expenses and subject to certain post-closing adjustments. In connection with the sale, during the three and nine months ended 2019, the Company recognized transaction expenses of $2.1 million and a loss on disposal of $0.3 million within other operating expenses on the consolidated statement of operations. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consists of the following: (In thousands) September 30, December 31, 2018 Land and buildings $ 44,401 $ 47,418 Right of use assets, operating 10,374 — Machinery and equipment 203,507 194,830 Construction in progress 13,791 6,059 272,073 248,307 Less accumulated depreciation and amortization (44,959 ) (27,958 ) $ 227,114 $ 220,349 Depreciation and amortization expense was $4.3 million and $12.9 million for the three and nine months ended September 30, 2019 , respectively, compared to $4.1 million and $11.3 million for the three and nine months ended September 30, 2018 , respectively. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company has two reportable segments: Sweet Baked Goods and In-Store Bakery. The Company’s Sweet Baked Goods segment consists of fresh and frozen baked goods and bread products that are sold under the Hostess®, Dolly Madison®, Cloverhill® and Big Texas® brands. The In-Store Bakery segment consists primarily of Superior on Main® branded and private label products sold through the in-store bakery section of grocery and club stores. The Company divested its In-Store Bakery operations on August 30, 2019. (See Note 2. Divestiture of In-Store Bakery Operations ). The Company evaluates performance and allocates resources based on net revenue and gross profit. Information regarding the operations of these reportable segments is as follows: Three Months Ended Nine Months Ended (In thousands) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Net revenue: Sweet Baked Goods $ 220,156 $ 201,693 $ 662,307 $ 605,223 In-Store Bakery 7,055 9,289 28,702 30,351 Net revenue $ 227,211 $ 210,982 $ 691,009 $ 635,574 Depreciation and amortization: Sweet Baked Goods $ 10,514 $ 10,020 $ 31,076 $ 29,270 In-Store Bakery 224 703 1,602 2,100 Depreciation and amortization $ 10,738 $ 10,723 $ 32,678 $ 31,370 Gross profit: Sweet Baked Goods $ 68,804 $ 58,886 $ 222,872 $ 192,683 In-Store Bakery 1,616 1,492 6,186 5,793 Gross profit $ 70,420 $ 60,378 $ 229,058 $ 198,476 Capital expenditures (1): Sweet Baked Goods $ 14,284 $ 12,378 $ 26,062 $ 34,975 In-Store Bakery 2 114 182 332 Capital expenditures $ 14,286 $ 12,492 $ 26,244 $ 35,307 (1) Capital expenditures consists of purchases of property and equipment and acquisition and development of software assets paid in cash or acquired through accounts payable. For the nine months ended September 30, 2019 , capital expenditures in accounts payable decreased by $6.4 million . For the nine months ended September 30, 2018 , capital expenditures in accounts payable decreased by $0.3 million . Total assets by reportable segment are as follows: (In thousands) September 30, December 31, Total segment assets: Sweet Baked Goods $ 3,066,778 $ 2,924,333 In-Store Bakery — 86,380 Total segment assets $ 3,066,778 $ 3,010,713 After the August 30, 2019 divestiture of the In-Store Bakery operations, the Company retained no assets related to the In-Store Bakery segment. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets In the second quarter of 2019, the Company recognized an impairment charge of $1.0 million in other operating expense on the consolidated statement of operations related to the In-Store Bakery reporting unit. This charge reflects a change in certain market assumptions since the last time the reporting unit was valued in the fourth quarter of 2018 (Level 1 input). In the third quarter of 2019, the Company divested its In-Store Bakery reporting unit (See Note 2. Divestiture of In-Store Bakery Operations ). Goodwill activity is presented below by reportable segment: (In thousands) Sweet Baked Goods In-Store Bakery Total Balance as of December 31, 2018 $ 535,853 $ 39,792 $ 575,645 Impairment — (1,000 ) (1,000 ) Divestiture — (38,792 ) (38,792 ) Balance as of September 30, 2019 $ 535,853 $ — $ 535,853 Intangible assets consist of the following: (In thousands) September 30, 2019 December 31, Intangible assets with indefinite lives (Trademarks and Trade Names) $ 1,408,631 $ 1,410,497 Intangible assets with definite lives (Customer Relationships) 515,712 543,120 Less accumulated amortization (Customer Relationships) (65,400 ) (51,802 ) Less accumulated impairment charges (Trademarks and Trade Names) — (600 ) Intangible assets, net $ 1,858,943 $ 1,901,215 Amortization expense was $5.8 million and $17.7 million for the three and nine months ended September 30, 2019 , respectively, and $6.0 million and $18.0 million for the three and nine months ended September 30, 2018 , respectively. The unamortized portion of customer relationships will be expensed over their remaining useful lives, from 19 to 23 years . The weighted-average amortization period as of September 30, 2019 for customer relationships was 20.0 years. The divestiture of the In-Store Bakery operations during the three months ended September 30, 2019 resulted in a $24.5 million reduction of intangible assets. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Included in accrued expenses and other current liabilities are the following: (In thousands) September 30, 2019 December 31, Payroll, vacation and other compensation $ 5,426 $ 6,104 Incentive compensation 7,355 3,261 Accrued interest 4,887 4,849 Workers compensation reserve 2,854 1,866 Self-insurance reserves 1,884 1,646 Current income taxes payable 135 411 Interest rate swap 848 — $ 23,389 $ 18,137 |
Debt and Lease Obligations
Debt and Lease Obligations | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt and Lease Obligations | Debt and Lease Obligations A summary of the carrying value of the debt and lease obligations is as follows: (In thousands) September 30, December 31, Third Term Loan (4.4% as of September 30, 2019) Principal $ 976,372 $ 983,825 Unamortized debt premium and issuance costs 2,975 3,778 Total Third Term Loan 979,347 987,603 Financing lease obligations — 401 Operating lease obligations 3,657 — Total debt and lease obligations 983,004 988,004 Less: Current portion of long term debt and lease obligations (10,166 ) (11,268 ) Long-term portion $ 972,838 $ 976,736 |
Interest Rate Swap
Interest Rate Swap | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Swap | Interest Rate Swap To reduce the effect of interest rate fluctuations, the Company entered into an interest rate swap contract with a counter party to make a series of payments based on a fixed interest rate of 1.78% and receive a series of payments based on the greater of LIBOR or 0.75% . Both the fixed and floating payment streams are based on a notional amount of $500 million at the inception of the contract and will be reduced by $100 million each year of the five-year contract. As of September 30, 2019 and September 30, 2018 , the notional amount is $300 million and $400 million , respectively. The Company entered into this transaction to reduce its exposure to changes in cash flows associated with its variable rate debt and has designated this derivative as a cash flow hedge. At September 30, 2019 , the effective interest rate on the long-term debt hedged by this contract was 4.03% . As of September 30, 2019 the fair value of the interest rate swap contract was a liability of $0.8 million reported within accrued expenses and other liabilities on the consolidated balance sheet. As of December 31, 2018 the fair value of the interest rate swap contract was an asset of $5.1 million reported within other assets, net on the consolidated balance sheet.The fair value of the interest rate swap contract is measured on a recurring basis by netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on the expectation of future interest rates (forward curves) derived from observable market interest rate curves (Level 2). |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Basic earnings per share is calculated by dividing net income attributable to the Company’s Class A stockholders for the period by the weighted average number of shares of Class A common stock outstanding for the period excluding non-vested share-based awards. In computing diluted earnings per share, basic earnings per share is adjusted for the assumed issuance of all applicable potentially dilutive share-based awards including public and private placement warrants, restricted stock units and stock options. Below are basic and diluted net income per share: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Numerator: Net income attributable to Class A stockholders (in thousands) $ 8,785 $ 7,941 $ 41,395 $ 51,064 Denominator: Weighted-average Class A shares outstanding - basic 115,196,195 99,958,244 106,904,733 99,931,167 Dilutive effect of warrants 5,327,319 2,804,132 3,454,899 4,203,936 Dilutive effect of restricted stock units 599,381 200,704 444,735 164,148 Weighted-average shares outstanding - diluted 121,122,895 102,963,080 110,804,367 104,299,251 Net income per Class A share - basic $ 0.08 $ 0.08 $ 0.39 $ 0.51 Net income per Class A share - diluted $ 0.07 $ 0.08 $ 0.37 $ 0.49 For the three and nine months ended September 30, 2019 and 2018, stock options were excluded from the computation of diluted net income per share because the sum of the assumed proceeds from the awards’ exercise and unrecognized compensation expense was greater than the average market price of Class A common stock issuable upon exercise thereof. Weighted average Class A shares outstanding reflect the weighted impact of the exchange of 11.5 million and 20.8 million Class B shares for Class A shares during the three and nine months ended September 30, 2019 , respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company is subject to U.S. federal, state and local taxes on its allocable portion of the income of Hostess Holdings, a partnership for U.S. federal and most applicable state and local taxes. As a partnership, Hostess Holdings is itself not subject to U.S. federal and certain state and local income taxes. The operations of Hostess Holdings include those of its C Corporation subsidiaries. The Company’s estimated annual effective tax rate is 22.6% prior to taking into account any discrete items. The effective tax rate was 22.0% and 18.9% for the three months ended September 30, 2019 and 2018 , respectively, and 16.8% and 12.5% for the nine months ended September 30, 2019 and 2018 , respectively. The increase in the effective tax rate is primarily driven by Hostess Brands, Inc.’s increased ownership in Hostess Holdings. |
Tax Receivable Agreement Obliga
Tax Receivable Agreement Obligations | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Tax Receivable Agreement | Tax Receivable Agreement Obligations The following table summarizes activity related to the Tax Receivable Agreement for the nine months ended September 30, 2019 : (In thousands) Balance December 31, 2018 $ 69,063 Exchange of Class B units for Class A shares 68,143 Remeasurement due to change in estimated tax rate (483 ) Remeasurement due to change in estimated holding period of In-Store Bakery 1,779 Payments (2,779 ) Balance September 30, 2019 $ 135,723 As of September 30, 2019 the future expected payments under the tax receivable agreement are as follows: 2019 $ 1,400 2020 10,800 2021 7,200 2022 7,100 2023 7,300 Thereafter 101,923 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In April 2019, the Company entered into a 6.5 year lease, with the option to renew for two additional five-year periods, for a distribution facility in Edgerton, Kansas. The lease term will commence upon completion of construction of the facility, which is expected to occur during the fourth quarter of 2019. During the initial lease term, average annual minimum lease payments are expected to be $2.3 million . In June 2019, the Company entered into a nine year lease for office space for its marketing and category management groups in Chicago, Illinois. The lease can be terminated, at the Company’s option, after five years. The Company took possession of the property in the third quarter of 2019. Average annual minimum lease payments are expected to be $0.3 million . Liabilities related to legal proceedings are recorded when it is probable that a liability has been incurred and the associated amount can be reasonably estimated. Where the estimated amount of loss is within a range of amounts and no amount within the range is a better estimate than any other amount, the minimum amount is accrued. As additional information becomes available, potential liabilities are reassessed and the estimates revised, if necessary. Any accrued liabilities are subject to change in the future based on new developments in each matter, or changes in circumstances, which could have a material effect on the Company’s financial condition and results of operations. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 1, 2019, the Company refinanced its $976.4 million outstanding term loan and its $100 million revolving credit agreement extending the maturities to August 3, 2025 and August 3, 2024, respectively. Additionally, the interest rate margin on the Revolver was reduced from 3.00% - 3.50% per annum to 2.25% per annum. All other terms under the Third Term Loan and Revolver, including variable interest rates, required principal payments, collateralization and financial covenants, remain unchanged. The Company incurred costs of approximately $8 million in connection with the refinancing. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the unaudited consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s financial position and of the results of operations and cash flows for the periods presented, and all such adjustments were of a normal and recurring nature. The results of operations are not necessarily indicative of the results to be expected for the full fiscal year. The accompanying unaudited consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2018 . The Company has two |
Adoption of New Accounting Standards | Adoption of New Accounting Standards On January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases, along with the related ASUs 2018-01, 2018-10 and 2018-11 (collectively, “Topic 842”). Topic 842 requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by lease terms of more than 12 months. To adopt this standard, the Company utilized a modified retrospective transition method. Under this approach, the results for reporting periods beginning January 1, 2019 are presented under Topic 842. Prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting standards. There was no cumulative effect of applying Topic 842 to the opening balance of retained earnings. The Company has elected to apply the practical expedients under Topic 842 which allow entities to not reassess the lease classification for expired or existing leases and to not reassess if expired or existing contracts contain leases under the Topic 842 definition. The Company has also elected to use hindsight when determining the lease term of existing leases. As a result of the adoption, on January 1, 2019, the Company recognized right of use assets of $8.2 million , offset by associated accumulated amortization of $5.2 million and corresponding lease liabilities of $3.0 million . The recognition of leases subsequent to the adoption of Topic 842 is further described in the Leases section of this footnote. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its majority-owned or controlled subsidiaries (including those for which the Company is the primary beneficiary of a variable interest entity). All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities at the date of the financial statements and for the reported amounts of revenues and expenses during the reporting period. Management utilizes estimates, including, but not limited to, valuation and useful lives of tangible and intangible assets, valuation of expected future payments under the tax receivable agreement, and reserves for trade and promotional allowances. Actual results could differ from these estimates. |
Accounts Receivable | Accounts Receivable |
Inventories | Inventories Inventories are stated at the lower of cost or net-realizable value on a first-in first-out basis. Abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage) are expensed in the period they are incurred. |
Software Costs | Software Costs Included in “Other assets, net” in the consolidated balance sheets is capitalized software in the amount of $10.9 million and $8.5 million at September 30, 2019 and December 31, 2018 , respectively. Capitalized software costs are amortized over their estimated useful life of five years |
Leases | Leases Subsequent to its adoption of Topic 842, the Company recognizes a right of use asset and corresponding lease liability on the consolidated balance sheet for all lease transactions with terms of more than 12 months. Agreements are determined to contain a lease if they convey the use and control of an underlying physical asset. Based on the nature of the lease transaction, leases are either classified as financing or operating. Under both classifications, the right of use asset and liability are initially valued based on the present value of the future minimum lease payments using an effective borrowing rate at the inception of the lease. The Company determined the effective borrowing rate based on its expected incremental borrowing rate on collateralized debt. At September 30, 2019 , the weighted average effective borrowing rates for outstanding operating leases was 4.5% . Under a financing lease, interest expense related to the lease liability is recognized over the lease term using an effective interest rate method and right of use assets are amortized straight-line over the term of the lease. Under an operating lease, minimum lease payments are expensed straight-line over the lease term. Lease liabilities are amortized using an effective interest rate method and right of use assets are reduced based on the excess of the sum of the straight-line lease expense and the reduction of the lease liability over the actual lease payments. At September 30, 2019 , the average remaining terms on operating leases were approximately one year . Variable lease payments, such as taxes and insurance, are expensed as incurred. Expenses related to leases with original terms less than 12 months (short-term leases) are expensed as incurred. For all leases related to distribution, bakery and corporate facilities, the Company has elected not to separate non-lease components from lease components. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Components of Inventories | The components of inventories are as follows : (In thousands) September 30, December 31, Ingredients and packaging $ 19,527 $ 18,865 Finished goods 16,654 16,446 Inventory in transit to customers 2,401 3,269 $ 38,582 $ 38,580 |
Customer Concentration Risk | The Company has one customer (together with its affiliates) that accounted for 10% or more of the Company’s total net revenue. The percentage of total net revenues for this customer is presented below by segment: Three Months Ended Nine Months Ended (% of Consolidated Net Revenues) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Sweet Baked Goods 22.3 % 20.0 % 23.0 % 18.7 % In-Store Bakery 0.3 % 0.5 % 0.5 % 0.6 % Total 22.6 % 20.5 % 23.5 % 19.3 % |
Lease Cost | The table below shows the composition of lease expenses for the period subsequent to the adoption of Topic 842: Three Months Ended Nine Months Ended (In thousands) September 30, 2019 September 30, 2019 Amortization of right of use asset, financing lease $ 33 $ 133 Interest, financing lease 4 16 Operating lease expense 752 2,009 Short-term lease expense 202 884 Variable lease expense 188 565 $ 1,179 $ 3,607 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consists of the following: (In thousands) September 30, December 31, 2018 Land and buildings $ 44,401 $ 47,418 Right of use assets, operating 10,374 — Machinery and equipment 203,507 194,830 Construction in progress 13,791 6,059 272,073 248,307 Less accumulated depreciation and amortization (44,959 ) (27,958 ) $ 227,114 $ 220,349 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Operations and Total Assets | Information regarding the operations of these reportable segments is as follows: Three Months Ended Nine Months Ended (In thousands) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Net revenue: Sweet Baked Goods $ 220,156 $ 201,693 $ 662,307 $ 605,223 In-Store Bakery 7,055 9,289 28,702 30,351 Net revenue $ 227,211 $ 210,982 $ 691,009 $ 635,574 Depreciation and amortization: Sweet Baked Goods $ 10,514 $ 10,020 $ 31,076 $ 29,270 In-Store Bakery 224 703 1,602 2,100 Depreciation and amortization $ 10,738 $ 10,723 $ 32,678 $ 31,370 Gross profit: Sweet Baked Goods $ 68,804 $ 58,886 $ 222,872 $ 192,683 In-Store Bakery 1,616 1,492 6,186 5,793 Gross profit $ 70,420 $ 60,378 $ 229,058 $ 198,476 Capital expenditures (1): Sweet Baked Goods $ 14,284 $ 12,378 $ 26,062 $ 34,975 In-Store Bakery 2 114 182 332 Capital expenditures $ 14,286 $ 12,492 $ 26,244 $ 35,307 (1) Capital expenditures consists of purchases of property and equipment and acquisition and development of software assets paid in cash or acquired through accounts payable. For the nine months ended September 30, 2019 , capital expenditures in accounts payable decreased by $6.4 million . For the nine months ended September 30, 2018 , capital expenditures in accounts payable decreased by $0.3 million . Total assets by reportable segment are as follows: (In thousands) September 30, December 31, Total segment assets: Sweet Baked Goods $ 3,066,778 $ 2,924,333 In-Store Bakery — 86,380 Total segment assets $ 3,066,778 $ 3,010,713 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill Activity | Goodwill activity is presented below by reportable segment: (In thousands) Sweet Baked Goods In-Store Bakery Total Balance as of December 31, 2018 $ 535,853 $ 39,792 $ 575,645 Impairment — (1,000 ) (1,000 ) Divestiture — (38,792 ) (38,792 ) Balance as of September 30, 2019 $ 535,853 $ — $ 535,853 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets consist of the following: (In thousands) September 30, 2019 December 31, Intangible assets with indefinite lives (Trademarks and Trade Names) $ 1,408,631 $ 1,410,497 Intangible assets with definite lives (Customer Relationships) 515,712 543,120 Less accumulated amortization (Customer Relationships) (65,400 ) (51,802 ) Less accumulated impairment charges (Trademarks and Trade Names) — (600 ) Intangible assets, net $ 1,858,943 $ 1,901,215 |
Schedule of Finite-Lived Intangible Assets | Intangible assets consist of the following: (In thousands) September 30, 2019 December 31, Intangible assets with indefinite lives (Trademarks and Trade Names) $ 1,408,631 $ 1,410,497 Intangible assets with definite lives (Customer Relationships) 515,712 543,120 Less accumulated amortization (Customer Relationships) (65,400 ) (51,802 ) Less accumulated impairment charges (Trademarks and Trade Names) — (600 ) Intangible assets, net $ 1,858,943 $ 1,901,215 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Included in accrued expenses and other current liabilities are the following: (In thousands) September 30, 2019 December 31, Payroll, vacation and other compensation $ 5,426 $ 6,104 Incentive compensation 7,355 3,261 Accrued interest 4,887 4,849 Workers compensation reserve 2,854 1,866 Self-insurance reserves 1,884 1,646 Current income taxes payable 135 411 Interest rate swap 848 — $ 23,389 $ 18,137 |
Debt and Lease Obligations (Tab
Debt and Lease Obligations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Debt and Capital Lease Obligation | A summary of the carrying value of the debt and lease obligations is as follows: (In thousands) September 30, December 31, Third Term Loan (4.4% as of September 30, 2019) Principal $ 976,372 $ 983,825 Unamortized debt premium and issuance costs 2,975 3,778 Total Third Term Loan 979,347 987,603 Financing lease obligations — 401 Operating lease obligations 3,657 — Total debt and lease obligations 983,004 988,004 Less: Current portion of long term debt and lease obligations (10,166 ) (11,268 ) Long-term portion $ 972,838 $ 976,736 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Income Per Share | Below are basic and diluted net income per share: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Numerator: Net income attributable to Class A stockholders (in thousands) $ 8,785 $ 7,941 $ 41,395 $ 51,064 Denominator: Weighted-average Class A shares outstanding - basic 115,196,195 99,958,244 106,904,733 99,931,167 Dilutive effect of warrants 5,327,319 2,804,132 3,454,899 4,203,936 Dilutive effect of restricted stock units 599,381 200,704 444,735 164,148 Weighted-average shares outstanding - diluted 121,122,895 102,963,080 110,804,367 104,299,251 Net income per Class A share - basic $ 0.08 $ 0.08 $ 0.39 $ 0.51 Net income per Class A share - diluted $ 0.07 $ 0.08 $ 0.37 $ 0.49 |
Tax Receivable Agreement Obli_2
Tax Receivable Agreement Obligations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Summary of Tax Receivable Agreement | The following table summarizes activity related to the Tax Receivable Agreement for the nine months ended September 30, 2019 : (In thousands) Balance December 31, 2018 $ 69,063 Exchange of Class B units for Class A shares 68,143 Remeasurement due to change in estimated tax rate (483 ) Remeasurement due to change in estimated holding period of In-Store Bakery 1,779 Payments (2,779 ) Balance September 30, 2019 $ 135,723 |
Future Expected Payments Under Tax Receivable Arrangement | As of September 30, 2019 the future expected payments under the tax receivable agreement are as follows: 2019 $ 1,400 2020 10,800 2021 7,200 2022 7,100 2023 7,300 Thereafter 101,923 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Description of Business (Details) | 9 Months Ended |
Sep. 30, 2019segment | |
Accounting Policies [Abstract] | |
Ownership percentage in Hostess Holdings | 100.00% |
Number of reportable segments | 2 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Adoption of New Accounting Standards (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
Accounting Policies [Abstract] | ||
Right of use asset | $ 8,200 | |
Right of use asset, accumulated amortization | 5,200 | |
Lease liability | $ 3,657 | $ 3,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Accounts receivable | $ 115,857 | $ 105,679 |
Reserve to cover allowances for damages occurring during shipment, quality claims and doubtful accounts | 2,700 | 2,600 |
Customer trade allowances | $ 44,593 | $ 42,010 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Inventories (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||
Ingredients and packaging | $ 19,527 | $ 18,865 | |
Finished goods | 16,654 | 16,446 | |
Inventory in transit to customers | 2,401 | 3,269 | |
Inventories | $ 38,582 | $ 38,580 | |
Impairment related to disposition of production equipment | $ 1,400 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Software Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||||
Capitalized software | $ 10.9 | $ 10.9 | $ 8.5 | ||
Capitalized software, estimated useful life | 5 years | ||||
Software amortization expense | $ 0.7 | $ 0.6 | $ 2.1 | $ 2 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Concentrations (Details) - Customer concentration risk - Consolidated net revenues | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Concentration Risk [Line Items] | ||||
Percentage of total net revenues for customer | 22.60% | 20.50% | 23.50% | 19.30% |
Sweet Baked Goods | ||||
Concentration Risk [Line Items] | ||||
Percentage of total net revenues for customer | 22.30% | 20.00% | 23.00% | 18.70% |
In-Store Bakery | ||||
Concentration Risk [Line Items] | ||||
Percentage of total net revenues for customer | 0.30% | 0.50% | 0.50% | 0.60% |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Leases (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Accounting Policies [Abstract] | ||
Weighted average effective borrowing rate, operating lease | 4.50% | 4.50% |
Average remaining term, operating lease (in years) | 1 year | 1 year |
Lease, Cost [Abstract] | ||
Amortization of right of use asset, financing lease | $ 33 | $ 133 |
Interest, financing lease | 4 | 16 |
Operating lease expense | 752 | 2,009 |
Short-term lease expense | 202 | 884 |
Variable lease expense | 188 | 565 |
Total lease cost | $ 1,179 | $ 3,607 |
Divestiture of In-Store Baker_2
Divestiture of In-Store Bakery Operations (Details) - USD ($) $ in Thousands | Aug. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Non-cash fees on disposal of assets | $ 1,414 | $ 0 | ||
In-Store Bakery | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from divestiture | $ 65,000 | |||
Non-cash fees on disposal of assets | $ 2,100 | 2,100 | ||
In-Store Bakery | Other Operating Expense | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Loss on disposal | $ 300 | $ 300 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 272,073 | $ 272,073 | $ 248,307 | ||
Less accumulated depreciation and amortization | (44,959) | (44,959) | (27,958) | ||
Property and equipment, net | 227,114 | 227,114 | 220,349 | ||
Depreciation expense | 4,300 | $ 4,100 | 12,900 | $ 11,300 | |
Land and buildings | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 44,401 | 44,401 | 47,418 | ||
Right of use assets, operating | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 10,374 | 10,374 | |||
Machinery and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 203,507 | 203,507 | 194,830 | ||
Construction in progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 13,791 | $ 13,791 | $ 6,059 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Segment Reporting [Abstract] | |||||
Number of reportable segments | segment | 2 | ||||
Segment Reporting Information [Line Items] | |||||
Net revenue | $ 227,211 | $ 210,982 | $ 691,009 | $ 635,574 | |
Depreciation and amortization | 10,738 | 10,723 | 32,678 | 31,370 | |
Gross profit | 70,420 | 60,378 | 229,058 | 198,476 | |
Capital expenditures | 14,286 | 12,492 | 26,244 | 35,307 | |
Increase (decrease) of capital expenditures in accounts payable | (6,400) | (300) | |||
Total segment assets | 3,066,778 | 3,066,778 | $ 3,010,713 | ||
Sweet Baked Goods | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | 220,156 | 201,693 | 662,307 | 605,223 | |
Depreciation and amortization | 10,514 | 10,020 | 31,076 | 29,270 | |
Gross profit | 68,804 | 58,886 | 222,872 | 192,683 | |
Capital expenditures | 14,284 | 12,378 | 26,062 | 34,975 | |
Total segment assets | 3,066,778 | 3,066,778 | 2,924,333 | ||
In-Store Bakery | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | 7,055 | 9,289 | 28,702 | 30,351 | |
Depreciation and amortization | 224 | 703 | 1,602 | 2,100 | |
Gross profit | 1,616 | 1,492 | 6,186 | 5,793 | |
Capital expenditures | 2 | $ 114 | 182 | $ 332 | |
Total segment assets | $ 0 | $ 0 | $ 86,380 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment charge | $ 1,000 | ||||
Amortization expense | $ 5,755 | $ 5,994 | $ 17,749 | $ 17,983 | |
Customer Relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted-average amortization period | 20 years | ||||
Customer Relationships | Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Remaining amortization period | 19 years | ||||
Customer Relationships | Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Remaining amortization period | 23 years | ||||
In-Store Bakery | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment charge | $ 1,000 | $ 1,000 | |||
In-Store Bakery | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Reduction of intangible assets resulting from divestiture | $ 24,500 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Goodwill Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Jun. 30, 2019 | Sep. 30, 2019 | |
Goodwill [Roll Forward] | ||
Balance as of December 31, 2018 | $ 575,645 | |
Impairment | (1,000) | |
Divestiture | (38,792) | |
Balance as of September 30, 2019 | 535,853 | |
Sweet Baked Goods | ||
Goodwill [Roll Forward] | ||
Balance as of December 31, 2018 | 535,853 | |
Impairment | 0 | |
Divestiture | 0 | |
Balance as of September 30, 2019 | 535,853 | |
In-Store Bakery | ||
Goodwill [Roll Forward] | ||
Balance as of December 31, 2018 | 39,792 | |
Impairment | $ (1,000) | (1,000) |
Divestiture | (38,792) | |
Balance as of September 30, 2019 | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Indefinite-lived Intangible Assets [Line Items] | ||
Less accumulated impairment charges (Trademarks and Trade Names) | $ 0 | $ (600) |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, net | 1,858,943 | 1,901,215 |
Trademarks and Trade Names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets with indefinite lives (Trademarks and Trade Names) | 1,408,631 | 1,410,497 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets with definite lives (Customer Relationships) | 515,712 | 543,120 |
Less accumulated amortization (Customer Relationships) | $ (65,400) | $ (51,802) |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Payroll, vacation and other compensation | $ 5,426 | $ 6,104 |
Incentive compensation | 7,355 | 3,261 |
Accrued interest | 4,887 | 4,849 |
Workers compensation reserve | 2,854 | 1,866 |
Self-insurance reserves | 1,884 | 1,646 |
Current income taxes payable | 135 | 411 |
Interest rate swap | 848 | 0 |
Accrued expenses and other current liabilities | $ 23,389 | $ 18,137 |
Debt and Lease Obligations - Sc
Debt and Lease Obligations - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | |||
Financing lease obligations | $ 0 | ||
Financing lease obligations | $ 401 | ||
Operating lease obligations | 3,657 | $ 3,000 | |
Total debt and lease obligations | 983,004 | 988,004 | |
Less: Current portion of long term debt and lease obligations | (10,166) | (11,268) | |
Long-term portion | 972,838 | 976,736 | |
Term Loan | Third Term Loan (4.4% as of September 30, 2019) | |||
Debt Instrument [Line Items] | |||
Principal | 976,372 | 983,825 | |
Unamortized debt premium and issuance costs | 2,975 | 3,778 | |
Total Third Term Loan | $ 979,347 | $ 987,603 | |
Effective rate | 4.40% |
Interest Rate Swap (Details)
Interest Rate Swap (Details) - Designated as Hedging Instrument - Interest Rate Swap - Cash Flow Hedge - USD ($) | 9 Months Ended | |||
Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Apr. 30, 2017 | |
Derivative [Line Items] | ||||
Fixed interest rate | 1.78% | |||
Notional amount of interest rate swap | $ 300,000,000 | $ 400,000,000 | $ 500,000,000 | |
Reduction in notional amount per year | $ 100,000,000 | |||
Term of contract | 5 years | |||
Effective fixed interest rate on long-term debt | 4.03% | |||
Accrued expenses and other liabilities | ||||
Derivative [Line Items] | ||||
Fair value of derivative asset (liability) | $ (800,000) | |||
Other assets | ||||
Derivative [Line Items] | ||||
Fair value of derivative asset (liability) | $ 5,100,000 | |||
LIBOR | ||||
Derivative [Line Items] | ||||
Basis spread on variable rate | 0.75% |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||||
Net income attributable to Class A stockholders (in thousands) | $ 8,785 | $ 7,941 | $ 41,395 | $ 51,064 | ||
Denominator: | ||||||
Weighted-average Class A shares outstanding - basic (shares) | 115,196,195 | 99,958,244 | 106,904,733 | 99,931,167 | ||
Dilutive effect of warrants (shares) | 5,327,319 | 2,804,132 | 3,454,899 | 4,203,936 | ||
Dilutive effect of restricted stock units (shares) | 599,381 | 200,704 | 444,735 | 164,148 | ||
Weighted-average shares outstanding - diluted (shares) | 121,122,895 | 102,963,080 | 110,804,367 | 104,299,251 | ||
Net income per Class A share - basic (usd per share) | $ 0.08 | $ 0.08 | $ 0.39 | $ 0.51 | ||
Net income per Class A share - dilutive (usd per share) | $ 0.07 | $ 0.08 | $ 0.37 | $ 0.49 | ||
Common Stock | Common Class A | ||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||
Exchanges (shares) | 11,544,600 | 9,255,400 | 64,380 | 20,800,000 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | |
Income Tax Disclosure [Line Items] | |||||
Effective income tax rate | 22.00% | 18.90% | 16.80% | 12.50% | |
Forecast [Member] | |||||
Income Tax Disclosure [Line Items] | |||||
Effective income tax rate | 22.60% |
Tax Receivable Agreement Obli_3
Tax Receivable Agreement Obligations - Summary of Activity (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Reconciliation Of Tax Receivable Agreement Liability [Roll Forward] | |
Balance December 31, 2018 | $ 69,063 |
Exchange of Class B units for Class A shares | 68,143 |
Remeasurement due to change in estimated tax rate | (483) |
Remeasurement due to change in estimated holding period of In-Store Bakery | 1,779 |
Payments | (2,779) |
Balance September 30, 2019 | $ 135,723 |
Tax Receivable Agreement Obli_4
Tax Receivable Agreement Obligations - Future Expected Payments (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Income Tax Disclosure [Abstract] | |
2019 | $ 1,400 |
2020 | 10,800 |
2021 | 7,200 |
2022 | 7,100 |
2023 | 7,300 |
Thereafter | $ 101,923 |
Commitments and Contingencies -
Commitments and Contingencies - (Details) $ in Millions | 1 Months Ended | ||
Apr. 30, 2019renewal_period | Sep. 30, 2019USD ($) | Jun. 30, 2019 | |
Distribution Facility | |||
Lessee, Lease, Description [Line Items] | |||
Term of contract (in years) | 6 years 6 months | ||
Number of lease renewal periods | renewal_period | 2 | ||
Renewal term of contract (in years) | 5 years | ||
Average annual minimum lease payments | $ 2.3 | ||
Marketing And Category Management Hub | |||
Lessee, Lease, Description [Line Items] | |||
Term of contract (in years) | 9 years | ||
Average annual minimum lease payments | $ 0.3 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Oct. 01, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Third Term Loan (4.4% as of September 30, 2019) | Secured Debt | |||
Subsequent Event [Line Items] | |||
Refinanced face amount | $ 976,372 | $ 983,825 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Refinancing costs | $ 8,000 | ||
Subsequent Event | Third Term Loan (4.4% as of September 30, 2019) | Secured Debt | |||
Subsequent Event [Line Items] | |||
Refinanced face amount | 976,400 | ||
Subsequent Event | Revolving Credit Facility | Secured Debt | |||
Subsequent Event [Line Items] | |||
Refinanced face amount | $ 100,000 | ||
LIBOR | Subsequent Event | Revolving Credit Facility | Secured Debt | |||
Subsequent Event [Line Items] | |||
Effective fixed interest rate on long-term debt | 2.25% | ||
Minimum | LIBOR | Revolving Credit Facility | Secured Debt | |||
Subsequent Event [Line Items] | |||
Effective fixed interest rate on long-term debt | 3.00% | ||
Maximum | LIBOR | Revolving Credit Facility | Secured Debt | |||
Subsequent Event [Line Items] | |||
Effective fixed interest rate on long-term debt | 3.50% |
Uncategorized Items - twnk-10q2
Label | Element | Value |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 191,000 |
AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 7,000 |
Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 198,000 |
Noncontrolling Interest [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 85,000 |