Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 01, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-39773 | ||
Entity Registrant Name | Hydrofarm Holdings Group, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 81-4895761 | ||
Entity Address, Address Line One | 1510 Main Street | ||
Entity Address, City or Town | Shoemakersville | ||
Entity Address, State or Province | PA | ||
Entity Address, Postal Zip Code | 19555 | ||
City Area Code | 707 | ||
Local Phone Number | 765-9990 | ||
Title of 12(b) Security | Common Stock, $0.0001 par value per share | ||
Trading Symbol | HYFM | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 148 | ||
Entity Common Stock, Shares Outstanding | 45,258,497 | ||
Documents Incorporated by Reference | Portions of the registrant’s Proxy Statement for its 2023 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent stated herein. Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2022. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001695295 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | Deloitte & Touche LLP |
Auditor Firm ID | 34 |
Auditor Location | Minneapolis, Minnesota |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 21,291,000 | $ 26,607,000 |
Restricted cash | 0 | 1,777,000 |
Accounts receivable, net | 17,227,000 | 41,484,000 |
Inventories | 111,398,000 | 189,134,000 |
Note receivable | 0 | 622,000 |
Prepaid expenses and other current assets | 5,032,000 | 9,760,000 |
Total current assets | 154,948,000 | 269,384,000 |
Property, plant and equipment, net | 51,135,000 | 50,473,000 |
Operating lease right-of-use assets | 65,265,000 | 45,245,000 |
Goodwill | 0 | 204,868,000 |
Intangible assets, net | 300,366,000 | 314,819,000 |
Other assets | 1,845,000 | 6,453,000 |
Total assets | 573,559,000 | 891,242,000 |
Current liabilities: | ||
Accounts payable | 13,633,000 | 26,685,000 |
Accrued expenses and other current liabilities | 13,208,000 | 33,996,000 |
Deferred revenue | 3,654,000 | 18,273,000 |
Current portion of lease liabilities | 9,099,000 | 7,198,000 |
Current portion of long-term debt | 2,011,000 | 2,263,000 |
Total current liabilities | 41,605,000 | 88,415,000 |
Long-term lease liabilities | 56,299,000 | 38,595,000 |
Long-term debt | 118,661,000 | 119,517,000 |
Deferred tax liabilities | 2,685,000 | 5,631,000 |
Other long-term liabilities | 4,428,000 | 3,904,000 |
Total liabilities | 223,678,000 | 256,062,000 |
Commitments and contingencies (Note 14) | ||
Stockholders’ equity | ||
Common stock ($0.0001 par value; 300,000,000 shares authorized; 45,197,249 and 44,618,357 shares issued and outstanding at December 31, 2022, and December 31, 2021, respectively) | 5,000 | 4,000 |
Additional paid-in capital | 783,042,000 | 777,074,000 |
Accumulated other comprehensive loss | (7,235,000) | (1,382,000) |
Accumulated deficit | (425,931,000) | (140,516,000) |
Total stockholders’ equity | 349,881,000 | 635,180,000 |
Total liabilities and stockholders’ equity | $ 573,559,000 | $ 891,242,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 45,197,249 | 44,618,357 |
Common stock, shares outstanding (in shares) | 45,197,249 | 44,618,357 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Net sales | $ 344,501 | $ 479,420 |
Cost of goods sold | 315,165 | 377,934 |
Gross profit | 29,336 | 101,486 |
Operating expenses: | ||
Selling, general and administrative | 118,604 | 104,185 |
Impairments | 192,328 | 0 |
Loss from operations | (281,596) | (2,699) |
Interest expense | (10,958) | (2,138) |
Loss on debt extinguishment or modification | (145) | (680) |
Other income (expense), net | 841 | (204) |
Loss before tax | (291,858) | (5,721) |
Income tax benefit | 6,443 | 19,137 |
Net (loss) income | $ (285,415) | $ 13,416 |
Net (loss) income per share: | ||
Basic (in dollars per share) | $ (6.35) | $ 0.34 |
Diluted (in dollars per share) | $ (6.35) | $ 0.31 |
Weighted-average shares of common stock outstanding: | ||
Basic (in shares) | 44,974,856 | 39,991,809 |
Diluted (in shares) | 44,974,856 | 42,989,195 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net (loss) income | $ (285,415) | $ 13,416 |
Other comprehensive loss: | ||
Foreign currency translation gain (loss) | (5,853) | (1,981) |
Total comprehensive (loss) income | $ (291,268) | $ 11,435 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2020 | 33,499,953 | ||||
Beginning balance at Dec. 31, 2020 | $ 210,918 | $ 3 | $ 364,248 | $ 599 | $ (153,932) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issued upon exercise of options (in shares) | 186,633 | ||||
Common stock issued upon exercise of options | 1,595 | 1,595 | |||
Issuance of common stock for vesting of restricted stock units (in shares) | 851,741 | ||||
Shares withheld for payroll taxes related to vesting of restricted stock units (in shares) | (268,867) | ||||
Shares repurchased for withholding tax on restricted stock units | (13,945) | (13,945) | |||
Issuance of common stock under cashless warrant exercise (in shares) | 418,633 | ||||
Issuance of common stock under investor warrant exercise (in shares) | 3,367,647 | ||||
Issuance of common stock under investor warrant exercise | 56,778 | 56,778 | |||
Issuance of common stock in connection with offering, net of offering costs (in shares) | 5,526,861 | ||||
Issuance of common stock in connection with offering, net of offering costs | 309,782 | $ 1 | 309,781 | ||
Issuance of common stock in connection with business combinations (in shares) | 1,035,756 | ||||
Issuance of common stock in connection with business combinations | 53,611 | 53,611 | |||
Stock-based compensation expense | 5,006 | 5,006 | |||
Net (loss) income | 13,416 | 13,416 | |||
Foreign currency translation gain (loss) | $ (1,981) | (1,981) | |||
Ending balance (in shares) at Dec. 31, 2021 | 44,618,357 | 44,618,357 | |||
Ending balance at Dec. 31, 2021 | $ 635,180 | $ 4 | 777,074 | (1,382) | (140,516) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issued upon exercise of options (in shares) | 8,283 | 8,283 | |||
Common stock issued upon exercise of options | $ 75 | 75 | |||
Issuance of common stock for vesting of restricted stock units (in shares) | 818,489 | ||||
Issuance of common stock for vesting of restricted stock units | 1 | $ 1 | |||
Shares withheld for payroll taxes related to vesting of restricted stock units (in shares) | (247,979) | ||||
Shares repurchased for withholding tax on restricted stock units | (2,461) | (2,461) | |||
Issuance of common stock under cashless warrant exercise (in shares) | 99 | ||||
Stock-based compensation expense | 8,354 | 8,354 | |||
Net (loss) income | (285,415) | (285,415) | |||
Foreign currency translation gain (loss) | $ (5,853) | (5,853) | |||
Ending balance (in shares) at Dec. 31, 2022 | 45,197,249 | 45,197,249 | |||
Ending balance at Dec. 31, 2022 | $ 349,881 | $ 5 | $ 783,042 | $ (7,235) | $ (425,931) |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (Parenthetical) | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Issuance of common stock in connection with offering, net of offering cost | $ 16,303 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Activities | ||
Net (loss) income | $ (285,415) | $ 13,416 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Depreciation, depletion and amortization | 41,527 | 14,934 |
Accounts Receivable, Credit Loss Expense (Reversal) | 2,998 | (110) |
Provision for inventory obsolescence | 16,449 | 1,201 |
Restructuring expenses | 6,091 | 0 |
Stock-based compensation expense | 8,354 | 5,006 |
Non-cash operating lease expense | 9,751 | 5,660 |
Impairment charges | 192,328 | 0 |
Change in fair value of contingent consideration | (1,560) | (2,610) |
Deferred income tax benefit | (9,310) | (20,996) |
Other | 1,210 | 1,364 |
Changes in assets and liabilities: | ||
Accounts receivable | 16,665 | (1,926) |
Inventories | 57,023 | (46,849) |
Prepaid expenses and other current assets | 3,663 | 2,761 |
Other assets | 262 | (1,781) |
Accounts payable | (11,998) | (12,303) |
Accrued expenses and other current liabilities | (4,532) | (3,238) |
Deferred revenue | (13,297) | 5,080 |
Lease liabilities | (7,850) | (4,676) |
Other long-term liabilities | (370) | 0 |
Net cash provided by (used in) operating activities | 21,989 | (45,067) |
Investing activities | ||
Business combinations, net of cash and cash equivalents | 190 | (462,172) |
Capital expenditures of property, plant and equipment | (8,229) | (5,402) |
Other | (448) | (610) |
Net cash used in investing activities | (8,487) | (468,184) |
Financing activities | ||
Proceeds from issuance of common stock upon follow-on public offering, net of offering costs | 0 | 309,782 |
Proceeds from exercises of investor warrants | 0 | 56,778 |
Payment of withholding tax related to restricted stock units | (2,470) | (20,025) |
Borrowings under revolving credit facilities | 853 | 142,628 |
Repayments of revolving credit facilities | (1,102) | (143,003) |
Repayments of Term Loan | (1,250) | 0 |
Proceeds from issuance of Term Loan, net of discount and issuance costs | 0 | 119,879 |
Payments to settle contingent consideration | (15,474) | 0 |
Other | (757) | (1,332) |
Net cash (used in) provided by financing activities | (20,200) | 464,707 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (395) | (27) |
Net decrease in cash, cash equivalents and restricted cash | (7,093) | (48,571) |
Cash, cash equivalents and restricted cash at beginning of year | 28,384 | 76,955 |
Cash, cash equivalents and restricted cash at end of year | 21,291 | 28,384 |
Non-cash investing and financing activities | ||
Issuance of common stock as consideration in connection with business combinations | 0 | 53,611 |
Increase in accrued expenses and other current liabilities for contingent consideration | 0 | 19,644 |
Right-of-use assets acquired under operating lease obligation | 28,972 | 22,873 |
Supplemental information | ||
Cash paid for interest | 9,643 | 1,621 |
Cash paid for income taxes | $ 3,906 | $ 1,963 |
DESCRIPTION OF THE BUSINESS
DESCRIPTION OF THE BUSINESS | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF THE BUSINESS | DESCRIPTION OF THE BUSINESS Description of the business Hydrofarm Holdings Group, Inc. (collectively with its subsidiaries, the “Company”) was formed in May 2017 under the laws of the state of Delaware to acquire and continue the business originally founded in 1977. The Company is a leading independent manufacturer and distributor of controlled environment agriculture ("CEA", principally hydroponics) equipment and supplies, including a broad portfolio of proprietary branded products. Products offered include agricultural lighting devices, indoor climate control equipment, nutrients, and plant additives used to grow, farm and cultivate cannabis, flowers, fruits, plants, vegetables, grains and herbs in controlled environment settings that allow end users to control key farming variables including temperature, humidity, CO 2 , light intensity and color, nutrient concentration and pH. Initial public offering and follow-on public offering On December 14, 2020, the Company closed its initial public offering (“IPO”) under a registration statement effective December 9, 2020, in which it issued and sold 9,966,667 shares of its common stock, including the full exercise by the underwriters of their option to purchase 1,300,000 additional shares of common stock. The public offering price was $20.00 per share. The Company received net proceeds of $182,271 from the IPO after deducting underwriting discounts and commissions and offering expenses, of which $148 of offering expenses were paid in 2021. |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of consolidation and presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the requirements of the U.S. Securities and Exchange Commission (“SEC”) for year end financial reporting. All intercompany balances and transactions have been eliminated in consolidation. The Company reclassified the balance within "Impairment, restructuring and other" on the consolidated statements of operations for the prior period into "Selling, general and administrative expenses" ("SG&A") to conform to the current period presentation. The Company reclassified the balance of customer deposits, totaling $18,273 as of December 31, 2021, previously reported in "Accounts payable" into "Deferred revenue" in the consolidated balance sheet as of December 31, 2021, to conform to the current period presentation. Consistent with the reclassifications on the consolidated balance sheet, the Company made corresponding reclassifications to conform with the current period presentation in the consolidated statement of cash flows. Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Significant estimates include provisions for sales returns, rebates and claims from customers, realization of accounts receivable and inventories, fair value of assets acquired and liabilities assumed for business combinations, valuation of intangible assets and goodwill, estimated useful lives of long-lived assets, incremental borrowing rate applied in lease accounting, valuation of stock-based compensation, recognition of deferred income taxes, recognition of liabilities related to commitments and contingencies and valuation allowances. Actual results may differ from these estimates. On an ongoing basis, the Company reviews its estimates to ensure that these estimates appropriately reflect changes in its business or new information available. Business combinations Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition date fair values of the assets transferred, liabilities incurred to the former owners of the acquiree, and the equity interests issued in exchange for control of the acquiree. Acquisition related costs are recognized in net (loss) income as incurred. When the consideration transferred in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition date fair value and included as part of the consideration transferred in a business combination. Contingent consideration is established for business acquisitions where the Company has the obligation to transfer additional assets or equity interests to the former owners if specified future events occur or conditions are met. Contingent consideration is classified as a liability when the obligation requires settlement in cash or other assets and is classified as equity when the obligation requires settlement in the Company's own equity instruments. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with a corresponding adjustment to goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the measurement period (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. All other subsequent changes in the fair value of contingent consideration classified as a liability are included in net (loss) income in the period. Changes in the fair value of contingent consideration classified as equity are not recognized. For a given acquisition, the Company may identify certain pre-acquisition contingencies as of the acquisition date and may extend its review and evaluation of these pre-acquisition contingencies throughout the measurement period to obtain sufficient information to assess these contingencies as part of acquisition accounting, as applicable. Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non‑controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition‑date fair value amounts of the identifiable assets acquired, and the liabilities assumed. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that time. Upon conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to net (loss) income. Restructuring The Company began a restructuring plan during the quarter ended December 31, 2022, and is undertaking significant actions to streamline operations, reduce costs and improve efficiencies. The major initiatives of the restructuring plan include (i) narrowing the Company's product and brand portfolio and (ii) the relocation and consolidation of certain manufacturing and distribution centers, including headcount reductions and reorganization to drive a solution based approach. During the year ended December 31, 2022, the Company recorded pre-tax charges of $6,790 relating to the inventory markdowns of products and brands being removed from our portfolio, which is primarily non-cash, and $897 relating primarily to the relocation and termination of certain facilities in Canada, which are primarily cash charges. The Company's strategic product consolidation entails removing approximately one-third of all products and one-fifth of all brands relating to our primary product portfolio, which excludes our garden center business in Canada. The Company expects the restructuring and related actions to result in cost savings of approximately $7,000 on an annualized basis. The amounts the Company will ultimately realize or disburse could differ from these estimates. The Company recorded $7,466 of restructuring related charges within Cost of goods sold and $221 within Selling, general and administrative expenses on the consolidated statement of operations for the year ended December 31, 2022. The Company's accrued liability for restructuring costs as of December 31, 2022, was $696. The Company estimates it will incur additional restructuring charges of approximately $1.7 million during the first half of 2023. Segment and entity-wide information Segment information The Company's chief operating decision maker is the chief executive officer ("CEO") who reviews financial information for the purposes of making operating decisions, assessing financial performance and allocating resources. The business is organized as two operating segments, the U.S. and Canada, which meet the criteria for aggregation, and the Company has elected to present them as one reportable segment, which is the distribution and manufacture of CEA equipment and supplies. Aggregation is based on similarities which include the nature of its products, production or acquisition of inventory, customer base, fulfillment and distribution and economic characteristics. Since the Company operates as one reportable segment, all required segment financial information is found in the consolidated financial statements and footnotes with entity-wide disclosures presented below. Entity-wide information Sales to external customers and property, plant and equipment, and operating lease right-of-use assets, net in the United States and Canada, determined by the location of the subsidiaries, are shown below. Other foreign locations, which are immaterial, individually and in the aggregate, are included in the U.S. below. Years ended December 31, 2022 2021 United States $ 280,464 $ 399,749 Canada 68,153 87,281 Intersegment eliminations (4,116) (7,610) Total consolidated net sales $ 344,501 $ 479,420 December 31, 2022 2021 United States $ 80,380 $ 85,167 Canada 36,020 10,551 Total property, plant and equipment, and operating lease right-of-use assets, net $ 116,400 $ 95,718 All of the products sold by the Company are similar and classified as CEA equipment and supplies. Concentrations of business and credit risk The Company maintains cash balances at certain financial institutions that can, at times, exceed amounts insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses in these accounts and believes it is not exposed to any significant credit risk in this area. Accounts receivable expose the Company to credit risks such as collectability and business risks such as customer concentrations. Exposure to losses on receivables is dependent on each customer’s financial condition. Receivables arising from sales are not collateralized; however, credit risk is somewhat mitigated as a result of the large diverse customer base. No customer accounted for more than 10% of revenues in 2022, or 2021. No customer accounted for more than 10% of accounts receivable as of December 31, 2022, or December 31, 2021. One supplier accounted for more than 10% of purchases in 2022 and 2021. Fair value measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has applied the framework for measuring fair value which requires a fair value hierarchy to be applied to all fair value measurements. All financial instruments recognized at fair value are classified into one of three levels in the fair value hierarchy as follows: Level 1 — Valuation based on quoted prices (unadjusted) observed in active markets for identical assets or liabilities. Level 2 — Valuation techniques based on inputs that are quoted prices of similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not in active markets; inputs other than quoted prices used in a valuation model that are observable for that instrument; and inputs that are derived from or, corroborated by, observable market data by correlation or other means. Level 3 — Valuation techniques with significant unobservable market inputs. The Company measures certain non-financial assets and liabilities, including long-lived assets, intangible assets and goodwill, at fair value on a nonrecurring basis. The fair value of contingent consideration is classified within level 3 of the fair value hierarchy (See discussion of contingent consideration in Note 3 - Business Combinations and Note 15 - Fair Value Measurements ). Foreign currency matters The Company reports its financial results in United States dollars, which is the currency of the primary economic environment in which it operates. The functional currency for each of the Company’s foreign subsidiaries is generally its local currency. Monetary assets and liabilities, and transactions denominated in currencies other than the functional currency are remeasured to the functional currency at the exchange rate in effect at the end of each period. Foreign currency transaction gains and losses are included in the determination of net (loss) income and classified as other income (expense), net in the consolidated statements of operations. Assets and liabilities of foreign subsidiaries are translated at the exchange rates in effect at the end of each period. Revenues, expenses, gains and losses are translated at the average rates of exchange prevailing during the period. Accumulated deficit and other equity accounts are translated at historical rates. Translation gains and losses are included in accumulated other comprehensive loss within stockholders’ equity. The effect of currency translation adjustments on cash, cash equivalents and restricted cash is presented separately in the consolidated statements of cash flows. Cash, cash equivalents and restricted cash Cash includes funds deposited in banks. Cash equivalents include highly liquid investments such as term deposits and money market instruments with original maturities of three months or less. As of December 31, 2021, amounts included in restricted cash represent those funds required to be set aside as security for letters of credits, and other various contractual arrangements. As of December 31, 2022, there were no amounts classified as restricted cash, as all previous restrictions lapsed during the year. Accounts receivable, net Trade accounts receivable represents amounts due from customers. Other receivables represent other current non-trade receivables. Allowance for doubtful accounts reflects the Company’s estimate of amounts in its existing accounts receivable that may not be collected due to customer claims or customer inability or unwillingness to pay. The allowance is determined based on a combination of factors, including, but not limited to the age of the account, the credit worthiness of the customer, payment terms, the customer’s historical payment history and general economic conditions. Management reviews these factors quarterly to determine if any adjustments are needed to the allowance for doubtful accounts. Accounts receivable are written off when the receivables are deemed uncollectible. Inventories Inventories consist of finished goods, work-in-process, and raw materials used in manufacturing products. Inventories are stated at the lower of cost or net realizable value, principally determined by the first in, first out method of accounting. The Company maintains an allowance for excess and obsolete inventory. The estimate for excess and obsolete inventory is based upon assumptions about current and anticipated demand, customer preferences, business strategies, and market conditions. Management reviews these assumptions periodically to determine if any adjustments are needed to the allowance for excess and obsolete inventory. The establishment of an allowance for excess and obsolete inventory establishes a new cost basis in the inventory. Such allowance is not reduced until the product is sold. If inventory is sold, any related reserves would be reversed in the period of sale. The Company estimates inventory markdowns relating to restructuring charges based upon current and anticipated demand, customer preferences, business strategies, and market conditions including management's actions with respect to inventory products and brands being removed from our portfolio. Hydrofarm's strategic product consolidation entails removing approximately one-third of all products and one-fifth of all brands relating to our primary product portfolio. Leases Leases are accounted for under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 842, Leases . At inception of a contract, the Company determines whether that contract is or contains a lease. A contract is or contains a lease if the contract conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. Leases are then classified as either finance or operating, with classification affecting the location of expense recognition in the consolidated statements of operations. Right-of-use assets ("ROU") represent the right to use an underlying asset for the lease term while lease liabilities represent the obligation to make lease payments arising from a lease, measured on a discount basis. All leases greater than 12 months result in the recognition of a ROU and a lease liability at the lease commencement date based on the present value of the lease payments over the lease term. The present value of the lease payments is calculated using the applicable weighted-average discount rate. The weighted-average discount rate is based on the discount rate implicit in the lease, or if the implicit rate is not readily determinable from the lease, the applicable incremental borrowing rate is estimated. The incremental borrowing rate is estimated using the currency denomination of the lease and the contractual lease term. To determine the incremental borrowing rate, reference is made to interest rates that would be available to finance assets similar to the assets under lease in their related geographical location. The Company accounts for lease components separately from non-lease components, other than for office equipment. The Company has certain leases that include one or more options to renew with renewal terms that can extend the lease term. The exercise of the lease renewal options is at the Company’s discretion. A lease renewal option is included in the determination of the ROU asset and lease liability when the option is reasonably certain of being exercised. Property, plant and equipment Property, plant and equipment ("PP&E") is recorded at cost less accumulated depreciation, depletion and amortization. PP&E assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. Property, plant and equipment, excluding peat bogs and related development, are depreciated using the straight-line method. The following table summarizes the estimated useful lives as follows: Buildings and improvements 10 - 40 years Machinery and equipment 5 - 15 years Leasehold improvements Lesser of useful life or term of the lease Computer equipment 3 - 4 years Furniture and fixtures 5 years Peat bogs and related development costs are depleted using the units of production method over the total expected volume of the peat bogs. Intangible assets and goodwill Definite-lived intangible assets are amortized using the straight-line method over their estimated useful lives. The Company has one trade name that is considered to have an indefinite useful life. Intangible assets are also tested for impairment at least annually and when events or changes in circumstances indicate that, more-likely-than-not, the carrying amount may not be recoverable. Significant judgment is required in estimating fair values and performing goodwill and intangible asset impairment tests. Goodwill represents the excess of the acquisition price of an acquired business over the fair value of the identifiable assets acquired and liabilities assumed in a business combination less any subsequent write-downs for impairment. Goodwill is tested for impairment on an annual basis in the fourth quarter and more frequently if indicators of potential impairment exist. Impairment testing is conducted at the reporting unit level, which is generally defined as an operating segment or one level below an operating segment (also known as a component), for which discrete financial information is available and segment management regularly reviews the operating results. The Company has determined that its reporting units for the purpose of goodwill impairment testing are the U.S. and Canada. Goodwill impairment reviews include performing either an initial qualitative or quantitative evaluation for each of the reporting units. Several methods may be used to estimate a reporting unit’s fair value, including market quotations, asset and liability fair values and other valuation techniques. If the carrying amount of a reporting unit, including goodwill, exceeds the estimated fair value, then the excess is charged to earnings as an impairment loss. Note Receivable In 2019, the Company executed a note receivable secured by equipment to a third-party, the terms of which were amended and restated during the first quarter of 2021. The note receivable provided for interest and installment payments to the Company, and full maturity of the note in 2024. During the first quarter of 2022 the third-party defaulted on interest payments, and the Company measured an impairment on the note receivable based on the estimated fair value of the collateral. The Company recorded an impairment loss of $2,636 during the year ended December 31, 2022, respectively, in “Impairments” on the consolidated statements of operations. There were no impairment losses recorded in the year ended December 31, 2021. As of December 31, 2022, the note receivable carrying value was $475 and is classified in Other assets on the consolidated balance sheet. Revenue recognition ASC 606, Revenue from Contracts with Customers, requires that revenue recognized from contracts with customers be disaggregated into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The Company has determined that revenue is generated from one category, which is the distribution and manufacture of controlled environment agriculture equipment and supplies. Revenue is recognized as control of promised goods is transferred to customers, which generally occurs upon receipt at customers’ locations determined by the specific terms of the contract. Arrangements generally have a single performance obligation and revenue is reported net of variable consideration which includes applicable volume rebates, cash discounts and sales returns and allowances. Variable consideration is estimated and recorded at the time of sale. The amount billed to customers for shipping and handling costs included in net sales was $13,180, and $8,050 in 2022, and 2021, respectively. Shipping and handling costs that occur before the customer obtains control of the goods are deemed to be fulfillment activities and are accounted for as fulfillment costs included in cost of goods sold. The Company does not receive noncash consideration for the sale of goods. Contract consideration received from a customer prior to revenue recognition is recorded as a contract liability and is recognized as revenue when the Company satisfies the related performance obligation under the terms of the contract. The Company's contract liabilities, which consist primarily of customer deposits are reported within deferred revenue in the consolidated balance sheets, totaled $3,654 and $18,273 as of December 31, 2022, and 2021, respectively. There are no significant financing components. Excluded from revenue are any taxes assessed by governmental authorities, including value-added and other sales-related taxes that are imposed on and concurrent with revenue-generating activities. Warrants issued in connection with financings The Company generally accounts for warrants issued in connection with debt and equity financings as a component of equity unless the warrants include a conditional obligation to issue a variable number of shares among other conditions or it is possible that the Company may need to settle the warrants in cash. Stock-based compensation The Company accounts for stock-based compensation expense in accordance with the fair value recognition and measurement provisions of U.S. GAAP, which requires compensation cost for the grant-date fair value of stock-based awards to be recognized over the requisite service period. The Company accounts for forfeitures when they occur and any compensation expense previously recognized on unvested shares will be reversed when forfeited. Service-based awards The Company records stock-based compensation expense for restricted stock units (“RSUs”) and service-based stock options on a straight-line basis over the requisite service period. The fair value of grants of restricted stock is based on the fair value of the common stock underlying the award. The fair value of the underlying common stock for RSUs prior to the Company’s IPO in December 2020, was determined by considering a number of objective, subjective, and highly complex factors including independent third-party valuations of the Company’s common stock, operating and financial performance, the lack of liquidity of capital stock and general and industry specific economic outlook among other factors. For awards granted after the Company's IPO, the fair value of the underlying common stock for RSUs is the closing date price of the Company's common stock at the grant-date. The fair value of option-based awards is estimated using the Black-Scholes valuation model. The Black-Scholes model requires the use of highly subjective and complex assumptions. For inputs into the Black-Scholes model, the expected volatility is based on historical implied volatility from recent stock option transactions at the time of grant. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury implied yield at the date of grant. The Company has elected to use the “simplified method” to determine the expected term which is the midpoint between the vesting date and the end of the contractual term because it has insufficient history upon which to base an assumption about the term. The expected dividend yield is 0.0% as the Company has not paid and does not anticipate paying dividends on its common stock. Performance-based awards The Company has granted performance stock unit ("PSU") awards that vest upon the satisfaction of both service-based and performance-based conditions. The service-based condition for these awards generally is satisfied over one year. The performance-based conditions generally are satisfied upon achieving specified performance targets. The Company records stock-based compensation expense for performance-based equity awards on a straight-line basis over the requisite service period and only if performance-based conditions are considered probable to be satisfied. Market-based awards The Company has granted RSUs that vest only upon the satisfaction of both performance-based and market-based conditions. The performance-based conditions are satisfied upon achieving specified performance targets, such as the occurrence of a qualifying event, as described above for performance-based awards. The market-based condition is satisfied upon the Company’s achievement of a qualifying traded share price within the specified time frame. The Company records stock-based compensation expense once the performance condition is satisfied regardless of whether the market condition is eventually met. For one award granted in 2020, the market condition was factored into its fair value and the Company used a "Monte Carlo Simulation Method" ("MCSM") to estimate the fair value of the award. The MCSM assessed the likelihood of vesting of the RSU grants based on the probability of both a triggering event and qualifying traded share price within the specified time frame. For the years ended December 31, 2022, and 2021, there were no performance awards with market-based conditions granted. Income taxes The asset and liability method of accounting for income taxes is followed whereby deferred income tax assets are recognized for deductible temporary differences and operating loss carryforwards, and deferred income tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the amounts of assets and liabilities recorded for income tax and financial reporting purposes. Deferred income tax assets are recognized only to the extent that management determines that it is more-likely-than-not that the deferred income tax assets will be realized. Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The income tax expense or benefit is the income tax payable or recoverable for the year plus or minus the change in deferred income tax assets and liabilities during the year. The Company has deferred tax assets and liabilities and maintains valuation allowances where it is more likely than not that all or a portion of deferred tax assets will not be realized. Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. The determination of the amount of valuation allowance to be provided on recorded deferred tax assets involves consideration of estimates regarding the timing and amount of the reversal of taxable temporary differences, expected future taxable income by jurisdiction, and the impact of tax planning strategies. Changes in the relevant facts can impact the judgment or need for valuation allowances. In the event we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. The Company will establish a liability for tax return positions when there is uncertainty as to whether the position will ultimately be sustained. Amounts for uncertain tax positions will be adjusted when new information becomes available or when positions are effectively settled. The Company will recognize interest expense and penalties related to these unrecognized tax benefits within income tax expense. U.S. GAAP provides that a tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits of the position. The amount recognized is measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the related tax authority. Recently issued accounting pronouncements |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS During 2021, the Company completed five acquisitions of branded manufacturers of CEA products, resulting in a significant expansion of its portfolio of proprietary branded products and specialized manufacturing capabilities. The Company finalized the determination of its allocation of the purchase price relating to these acquisitions during 2022, and obtained third-party valuation reports of certain tangible and identifiable intangible assets to support its evaluation. Goodwill arose on the acquisitions because the consideration paid effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and the assembled workforce. These benefits are not recognized separately from goodwill and they do not meet the recognition criteria for identifiable intangible assets. During 2022, the Company evaluated and adjusted the useful lives of certain intangible assets associated with entities that were acquired during 2021. In addition, the Company determined that the preliminary allocation of assets acquired related to indefinite lived trade names have a finite useful life because the expected usefulness of the trade names is limited. As a result of these adjustments to the provisional amounts, the Company recorded $5,894 of additional amortization expense during 2022, which related to amortization expense that would have been recorded in the previous reporting period from the acquisition date through December 31, 2021. The intangible assets were assigned estimated useful lives as follows: (i) customer relationships: 7 to 12 years, (ii) technology, formulations and recipes: 8 to 12 years, (iii) computer software: 3 years, and (iv) trade names and trademarks: 15 to 20 years. The financial results of Heavy 16, the H&G Entities, Aurora and the IGE Entities (each as defined below) are included in the U.S. operating segment since the acquisition date. The financial results of Greenstar are included in the Canada operating segment since the acquisition date. Heavy 16 Acquisition On May 3, 2021, the Company acquired 100% of the issued and outstanding membership interests of Field 16, LLC ("Heavy 16"), a manufacturer and supplier of branded plant nutritional products. As a result of the acquisition, the Company broadened its proprietary branded offering into the plant nutrients category complementing other product offerings. The acquisition fair value of the consideration transferred for Heavy 16 was $77,367, consisting of $60,287 in cash, $16,736 of the Company's common stock and $344 contingent consideration. The fair value of the common stock issued was determined based on the closing market price of the Company's common stock on the acquisition date. Pursuant to the purchase agreement, the Company was required to pay up to an additional $2,500 of contingent consideration based on $200 for each $1,000 above a $21,000 threshold for net sales in calendar year 2021. As a result, the Company recorded a liability for contingent consideration at its estimated fair value of $344 as of the acquisition date in the consolidated balance sheets. The contingent consideration was estimated using a Black-Scholes valuation model, which utilized Level 3 inputs as defined in ASC 820 - Fair Value Measurements. The key assumptions in applying the valuation model were as follows: a 10% required revenue metric risk premium and 0.33% discount periods . The contingent consideration was divided into thirteen standalone option calculations and utilized the same expected value of revenue which was calculated by discounting forecasted sales, by the revenue return metric, and adding year-to-date net sales. The contingent consideration was remeasured to fair value at each reporting date until the contingency was resolved with changes in fair value being recognized within "Selling, general and administrative expenses" ("SG&A") in the consolidated statements of operations. As of December 31, 2021, contingent consideration of $200 was calculated utilizing actual net sales for the full year ended December 31, 2021. The change in the fair value of the contingent consideration of $144 during the year ended December 31, 2021, was recognized as a benefit in SG&A on the consolidated statement of operations during the period. There were no changes to the fair value of contingent consideration in 2022, and the balance was paid in April 2022. The amount of goodwill is fully deductible for tax purposes. House & Garden Acquisition On June 1, 2021, the Company acquired 100% of the issued and outstanding shares of capital stock of House & Garden, Inc. (“HG”), Humboldt Wholesale, Inc. (“HW”), Allied Imports & Logistics, Inc. (“Allied”), South Coast Horticultural Supply, Inc. (“SC” and, together with HG, HW and Allied, the “H&G Entities”), a manufacturer and distributor of plant nutrients and fertilizers to domestic and various international markets. As a result of the acquisition, the Company is further broadening its proprietary branded offering into the plant nutrients category complementing other product offerings. The acquisition date fair value of the consideration transferred for the H&G Entities was $133,483 in cash. The amount of goodwill is not deductible for tax purposes. As part of the share acquisition of the H&G Entities, the Company allocated a significant value of the acquisition to identified intangible assets that are not deductible for U.S. tax purposes. Therefore, a deferred tax liability arose providing an additional source of taxable income to support the realization of pre-existing deferred tax assets. Aurora Acquisition On July 1, 2021, the Company acquired 100% of the issued and outstanding membership interests of Gotham Properties LLC (“Gotham Properties”), Aurora Innovations LLC (“Aurora Innovations”), Aurora International LLC (“Aurora International” and, together with Gotham Properties and Aurora Innovations, “Aurora”), a manufacturer of plant fertility product lines. As a result of the acquisition, the Company broadened its proprietary branded offering into the plant nutrients and grow media category complementing other product offerings. The preliminary acquisition fair value of the consideration transferred for Aurora was $178,871, consisting of $133,962 in cash, $25,824 of the Company's common stock, $19,300 contingent consideration and $215 forgiveness of accounts payable. The fair value of the common stock issued was determined based on the closing market price of the Company's common stock on the acquisition date. The forgiveness of accounts payable represents an effective settlement of a preexisting relationship between the parties. The amount of goodwill is fully deductible for tax purposes. Pursuant to the purchase agreement, the Company was required to pay a maximum contingent consideration equal to $70,997. To the extent 2021 EBITDA of Aurora exceeded $15,556, the excess was multiplied by eleven to determine contingent consideration. As a result, the Company recorded a liability for contingent consideration at its estimated fair value of $19,300 as of the acquisition date in the consolidated balance sheets. The contingent consideration was estimated using the discounted cash flow method, which estimated the incremental EBITDA based on the Company's forecasted 2021 EBITDA of Aurora as of the acquisition date, discounted to a present value as of the acquisition date using a discount rate of 15%. That measure was based on significant inputs that are not observable in the market, which utilized Level 3 inputs as defined in ASC 820 - Fair Value Measurements. The contingent consideration was remeasured to fair value at each reporting date until resolution with changes in fair value recognized within SG&A in the consolidated statements of operations. As of December 31, 2021, the contingent consideration of $16,834 was calculated utilizing actual 2021 EBITDA for the full year ended December 31, 2021. The change in the fair value of the contingent consideration of $2,466 during the year ended December 31, 2021, was recognized as a benefit in SG&A on the consolidated statement of operations during the period. During 2022, the Company recognized an additional $1,560 benefit to SG&A as the contingent consideration was revalued to $15,274, and paid in July 2022 using available cash on hand. Greenstar/Grotek Acquisition On August 3, 2021, the Company acquired 100% of the issued and outstanding shares of Greenstar Plant Products Inc., (“Greenstar”), a manufacturer of horticultural products and solutions for global, domestic and commercial use. As a result of the acquisition, the Company broadened its proprietary branded offering into the plant nutrients and grow media category complementing other product offerings. The preliminary acquisition fair value of the consideration transferred for Greenstar was $83,520, consisting of $85,121 in cash, less $1,601 forgiveness of accounts payable, net, and obligations due under a distribution agreement. The forgiveness of accounts payable, net, and obligations due under a distribution agreement represent an effective settlement of a preexisting relationship between the parties. The amount of goodwill is not deductible for U.S. tax purposes, but it is partially deductible for Canadian tax purposes. Innovative Growers Equipment, Inc. Acquisition On November 1, 2021, the Company acquired 100% of the issued and outstanding shares of Innovative Growers Equipment, Inc., an Illinois corporation (“IGE”), Innovative AG Installation, Inc., an Illinois corporation (“IAG”), Innovative Racking Systems, Inc., an Illinois corporation (“IRS”), and Innovative Shipping Solutions, Inc., an Illinois corporation (“ISS” and, together with IGE, IAG, IRS, and their respective subsidiaries, the “IGE Entities”), a manufacturer of horticulture benches, racking and LED lighting systems which complement the Company’s existing lineup of high performance, proprietary branded products. The preliminary acquisition fair value of the consideration transferred for the IGE Entities was $60,902, consisting of $49,129 in cash, $11,051 of the Company's common stock, and $722 forgiveness of a contract asset. The fair value of the common stock issued was determined based on the closing market price of the Company's common stock on the acquisition date. The forgiveness of contract asset represents an effective settlement of a preexisting relationship between the parties. The amount of goodwill is not deductible for U.S. tax purposes. The following table sets forth the components and allocation of the purchase price for the Company's acquisition of Heavy 16, the H&G Entities, Aurora, Greenstar and the IGE Entities: Heavy 16 H&G Entities Aurora Greenstar IGE Entities Component of Purchase Price: Amount Amount Amount Amount Amount Cash $ 60,287 $ 133,483 $ 133,962 $ 85,121 $ 49,129 Common stock 16,736 — 25,824 — 11,051 Contingent consideration 344 — 19,300 — — Forgiveness of assets and liabilities — — (215) (1,601) 722 Total purchase price $ 77,367 $ 133,483 $ 178,871 $ 83,520 $ 60,902 Acquisition-related costs $ 3,109 $ 5,063 $ 7,358 $ 3,688 $ 2,150 Allocation of Purchase Price: Identifiable assets (liabilities) Accounts receivable $ 510 $ 3,308 $ 6,967 $ 982 $ 2,367 Inventories 1,451 6,559 11,031 8,728 30,592 Prepaid expenses and other current assets 34 493 1,086 447 470 Property and equipment 1,078 358 37,991 1,717 4,274 Operating lease right-of-use assets 1,088 1,921 — 2,736 4,447 Other assets 25 213 — 176 — Accounts payable (1,055) (1,320) (4,360) (777) (21,686) Accrued expenses and other current liabilities (226) (445) (768) (1,421) (859) Current portion of lease liabilities (274) (447) — (624) (815) Current portion of long-term debt — — — — (482) Long-term deferred tax liabilities — (25,589) — — (6,769) Long-term lease liabilities (868) (1,501) — (1,836) (3,116) Long-term debt — — — — (1,434) Other long-term liabilities — — (3,840) — — Net identifiable assets 1,763 (16,450) 48,107 10,128 6,989 Identifiable intangible assets Other intangible assets 200 200 824 383 2,430 Customer relationships 5,100 12,500 6,400 11,100 6,300 Trademarks and trade names 18,500 31,400 59,100 9,100 14,000 Technology and formulations & recipes 33,600 56,200 18,000 2,800 3,800 Total identifiable intangible assets 57,400 100,300 84,324 23,383 26,530 Goodwill 18,204 49,633 46,440 50,009 27,383 Total purchase price allocation $ 77,367 $ 133,483 $ 178,871 $ 83,520 $ 60,902 Supplemental Disclosure of Financial Results The following represents estimated unaudited consolidated net sales and net income amounts for year ended December 31, 2021, as if the five acquisitions had been included in the consolidated results of the Company for the entire period. The estimated net income presented below also includes the impact of the aforementioned allocation adjustments to the useful lives of certain intangible assets, resulting in additional expense attributed to the year ended December 31, 2021. Management considers these estimates to represent an approximate measure of the performance of the combined Company: Year ended December 31, 2021 Estimated ($ in millions) Net sales $ 596 Net income $ 66 |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET Goodwill Primarily due to a sustained decline in the Company's market value of common stock and market conditions, the Company identified a triggering event requiring a test for impairment as of June 30, 2022. The Company completed its goodwill impairment testing and recorded an impairment charge of $189,572 as the test determined that the carrying value of the reporting units of U.S. and Canada was in excess of the fair value. The recognized impairment reduced the goodwill balance to zero as of June 30, 2022. The impairment was primarily due to a deterioration in customer demand in the U.S. and Canada caused by macroeconomic and industry conditions. The Company determined the fair value of the U.S. and Canada reporting units based on an income approach, using the present value of future discounted cash flows, and based on a market approach. The fair values were reconciled to the market value of common stock of Hydrofarm to corroborate the estimates used in the interim test for impairment. Significant estimates used to determine fair value include the weighted average cost of capital, financial forecasts, and pricing multiples derived from publicly-traded companies that are comparable to the reporting units. Refer to Note 15 - Fair Value Measurements, for further discussion of valuation inputs. There was no goodwill impairment recognized during the year ended December 31, 2021. The changes in goodwill are as follows: Goodwill Balance at December 31, 2020 $ — Acquisition - Heavy 16 18,204 Acquisition - H&G Entities 49,707 Acquisition - Aurora 46,433 Acquisition - Greenstar 43,009 Acquisition - IGE Entities 48,687 Foreign currency translation adjustments, net (1,172) Balance at December 31, 2021 $ 204,868 Acquisition - IGE Entities - measurement period adjustments (21,304) Acquisition - Greenstar - measurement period adjustments 7,000 Acquisition - all others - measurement period adjustments and foreign currency translation adjustments, net (992) Impairments (189,572) Balance at December 31, 2022 $ — Intangible Assets, net Intangible assets, net comprised the following: December 31, 2022 December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Book Value Gross Carrying Amount Accumulated Amortization Net Book Value Finite-lived intangible assets: Computer software $ 9,408 $ (7,976) $ 1,432 $ 8,814 $ (7,208) $ 1,606 Customer relationship 99,933 (24,533) 75,400 101,222 (16,517) 84,705 Technology, formulations and recipes 114,187 (15,344) 98,843 110,561 (3,630) 106,931 Trade names and trademarks 131,410 (10,052) 121,358 — — — Other 4,778 (4,246) 532 2,428 (1,744) 684 Total finite-lived intangible assets, net 359,716 (62,151) 297,565 223,025 (29,099) 193,926 Indefinite-lived intangible assets: Trade name 2,801 — 2,801 120,773 — 120,773 Other — — — 120 — 120 Total Intangible assets, net $ 362,517 $ (62,151) $ 300,366 $ 343,918 $ (29,099) $ 314,819 Amortization expense related to intangible assets was $33,308 and $10,354 for the years ended December 31, 2022, and 2021, respectively. Amortization expense includes the impact from intangible assets recorded in connection with five acquisitions completed during the year ended December 31, 2021. The following are the estimated useful lives and the weighted-average amortization period as of December 31, 2022, for the major classes of finite-lived intangible assets: Useful lives Weighted-average amortization period Computer software 5 years 3 years Customer relationships 7 to 18 years 11 years Technology, formulations and recipes 8 to 12 years 10 years Trade names and trademarks 15 to 20 years 18 years The estimated aggregate future amortization expense for intangible assets subject to amortization as December 31, 2022, is summarized below: Estimated Future Amortization Expense Year ending December 31, 2023 $ 24,525 2024 24,418 2025 24,348 2026 23,968 Thereafter 200,306 Total $ 297,565 |
EARNINGS (LOSS) PER COMMON SHAR
EARNINGS (LOSS) PER COMMON SHARE (“EPS”) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER COMMON SHARE (“EPS”) | EARNINGS (LOSS) PER COMMON SHARE (“EPS”) Basic EPS is computed using net (loss) income divided by the weighted-average number of common shares outstanding during each period, excluding unvested restricted stock units (“RSUs”). Diluted EPS represents net (loss) income divided by the weighted-average number of common shares outstanding during the period, including common stock equivalents. Common stock equivalents consist of shares subject to warrants and share-based awards with exercise prices less than the average market price of the Company’s common stock for the period, to the extent their inclusion would be dilutive. Regarding RSUs subject to a market condition, before the end of the contingency period, the number of contingently issuable shares (i.e., RSUs) to be included in diluted EPS would be based on the number of shares of common stock issuable under the terms of the arrangement if the end of the reporting period was the end of the contingency period, assuming the result would be dilutive. Those contingently issuable shares would be included in the denominator of diluted EPS as of the beginning of the period, or as of the grant date of the share-based payment, if later. The following table presents information necessary to calculate basic and diluted EPS for the years ended December 31, 2022, and 2021: Years ended December 31, 2022 2021 Net (loss) income $ (285,415) $ 13,416 Weighted-average shares of common stock outstanding 44,974,856 39,991,809 Dilutive effect of warrants using the treasury stock method — 1,395,393 Dilutive effect of restricted stock units using the treasury stock method — 1,068,984 Dilutive effect of stock options using the treasury stock method — 533,009 Diluted weighted-average shares of common stock outstanding 44,974,856 42,989,195 Basic EPS $ (6.35) $ 0.34 Diluted EPS $ (6.35) $ 0.31 The computation of the weighted-average shares of common stock outstanding for diluted EPS includes the following potential shares of common stock using the treasury stock method for the weighted-average period during which the shares were outstanding: Years ended December 31, 2022 2021 Shares subject to warrants outstanding — 1,899,435 Shares subject to unvested performance based and restricted stock units — 1,311,914 Shares subject to stock options outstanding — 831,517 The computation of the weighted-average shares of common stock outstanding for diluted EPS excludes the following potential shares of common stock as their inclusion would have an anti-dilutive effect on diluted EPS: Years ended December 31, 2022 2021 Shares subject to warrants outstanding 17,669 17,817 Shares subject to unvested performance based and restricted stock units 1,088,879 71,871 Shares subject to stock options outstanding 670,026 10,641 |
ACCOUNTS RECEIVABLE, NET AND IN
ACCOUNTS RECEIVABLE, NET AND INVENTORIES | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE, NET AND INVENTORIES | ACCOUNTS RECEIVABLE, NET AND INVENTORIES Accounts receivable, net comprised the following: December 31, 2022 2021 Trade accounts receivable $ 18,204 $ 35,511 Allowance for doubtful accounts (1,556) (1,156) Other receivables 579 7,129 Total accounts receivable, net $ 17,227 $ 41,484 Inventories comprised the following: December 31, 2022 2021 Finished goods $ 83,134 $ 145,298 Work-in-process 5,403 5,967 Raw materials 38,558 41,399 Allowance for inventory obsolescence (15,697) (3,530) Total inventories $ 111,398 $ 189,134 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
LEASES | LEASESThe Company leases its distribution centers and manufacturing facilities from third parties under various non-cancelable lease agreements expiring at various dates through 2033. Also, the Company leases some equipment under finance leases. Certain leases contain escalation provisions and/or renewal options, giving the Company the right to extend the leases by up to 10 years. However, these options are generally not reflected in the calculation of the right-of-use assets and lease liabilities due to uncertainty surrounding the likelihood of renewal. The Company recognizes operating lease costs over the respective lease periods, including short-term and month-to-month leases. The Company has operating subleases which have been accounted for by reference to the underlying asset subject to the lease, primarily as an offset to rent expense within SG&A. Total ROU assets and lease liabilities were as follows: December 31, Balance Sheet Classification 2022 2021 Leased assets Operating ROU assets Operating lease right-of-use assets $ 65,265 $ 45,245 Finance lease assets Property, plant and equipment, net 2,005 2,365 Total leased assets $ 67,270 $ 47,610 Lease liabilities Current: Operating leases Current portion of lease liabilities $ 9,099 $ 7,198 Finance leases Current portion of long-term debt 704 739 Noncurrent: Operating leases Long-term lease liabilities 56,299 38,595 Finance leases Long-term debt 1,200 1,628 Total lease liabilities $ 67,302 $ 48,160 Total lease income and costs were as follows: For the years ended December 31, Classification 2022 2021 Operating lease costs Selling, general and administrative $ 11,484 $ 6,664 Finance lease costs: Amortization of lease assets Selling, general and administrative 285 291 Amortization of lease assets Cost of goods sold 327 — Interest on lease liabilities Interest expense 61 33 Sublease income Selling, general and administrative (1,533) (277) In addition to the operating lease costs above, short-term and month-to-month lease expense was $341 and $2,268 for the years ended December 31, 2022, and 2021, respectively, and other costs associated with operating leases were $2,573 and $1,957, respectively, for non-lease components such as common area maintenance and other miscellaneous items. These costs were included within SG&A in the consolidated statements of operations. The aggregate future minimum lease payments under long-term non-cancelable operating and finance leases with remaining terms greater than one year as of December 31, 2022, are as follows: Year ending December 31, Operating Finance 2023 $ 11,463 $ 760 2024 11,043 634 2025 10,466 481 2026 9,180 63 2027 8,941 69 Thereafter 25,016 — Total rental payments 76,109 2,007 Less portion representing interest 10,711 103 Total principal 65,398 1,904 Less current portion 9,099 704 Long-term portion $ 56,299 $ 1,200 The following table summarizes the weighted-average remaining lease term as of December 31, 2022, and 2021, as well as the weighted-average discount rate on long-term leases for the years ended December 31, 2022, and 2021: December 31, 2022 2021 Weighted-average remaining lease term in years: Operating leases 7.1 6.8 Finance leases 3.1 3.5 Weighted-average discount rate: Operating leases 4.00 % 3.32 % Finance leases 3.63 % 4.62 % Cash paid for amounts included in lease liabilities in 2022, and 2021 were: For the years ended December 31, Cash paid for amounts included in lease liabilities: 2022 2021 Operating cash flows from operating leases $ (9,035) $ (5,675) Operating cash flows from finance leases (61) (33) Financing cash flows from finance leases (756) (302) |
LEASES | LEASESThe Company leases its distribution centers and manufacturing facilities from third parties under various non-cancelable lease agreements expiring at various dates through 2033. Also, the Company leases some equipment under finance leases. Certain leases contain escalation provisions and/or renewal options, giving the Company the right to extend the leases by up to 10 years. However, these options are generally not reflected in the calculation of the right-of-use assets and lease liabilities due to uncertainty surrounding the likelihood of renewal. The Company recognizes operating lease costs over the respective lease periods, including short-term and month-to-month leases. The Company has operating subleases which have been accounted for by reference to the underlying asset subject to the lease, primarily as an offset to rent expense within SG&A. Total ROU assets and lease liabilities were as follows: December 31, Balance Sheet Classification 2022 2021 Leased assets Operating ROU assets Operating lease right-of-use assets $ 65,265 $ 45,245 Finance lease assets Property, plant and equipment, net 2,005 2,365 Total leased assets $ 67,270 $ 47,610 Lease liabilities Current: Operating leases Current portion of lease liabilities $ 9,099 $ 7,198 Finance leases Current portion of long-term debt 704 739 Noncurrent: Operating leases Long-term lease liabilities 56,299 38,595 Finance leases Long-term debt 1,200 1,628 Total lease liabilities $ 67,302 $ 48,160 Total lease income and costs were as follows: For the years ended December 31, Classification 2022 2021 Operating lease costs Selling, general and administrative $ 11,484 $ 6,664 Finance lease costs: Amortization of lease assets Selling, general and administrative 285 291 Amortization of lease assets Cost of goods sold 327 — Interest on lease liabilities Interest expense 61 33 Sublease income Selling, general and administrative (1,533) (277) In addition to the operating lease costs above, short-term and month-to-month lease expense was $341 and $2,268 for the years ended December 31, 2022, and 2021, respectively, and other costs associated with operating leases were $2,573 and $1,957, respectively, for non-lease components such as common area maintenance and other miscellaneous items. These costs were included within SG&A in the consolidated statements of operations. The aggregate future minimum lease payments under long-term non-cancelable operating and finance leases with remaining terms greater than one year as of December 31, 2022, are as follows: Year ending December 31, Operating Finance 2023 $ 11,463 $ 760 2024 11,043 634 2025 10,466 481 2026 9,180 63 2027 8,941 69 Thereafter 25,016 — Total rental payments 76,109 2,007 Less portion representing interest 10,711 103 Total principal 65,398 1,904 Less current portion 9,099 704 Long-term portion $ 56,299 $ 1,200 The following table summarizes the weighted-average remaining lease term as of December 31, 2022, and 2021, as well as the weighted-average discount rate on long-term leases for the years ended December 31, 2022, and 2021: December 31, 2022 2021 Weighted-average remaining lease term in years: Operating leases 7.1 6.8 Finance leases 3.1 3.5 Weighted-average discount rate: Operating leases 4.00 % 3.32 % Finance leases 3.63 % 4.62 % Cash paid for amounts included in lease liabilities in 2022, and 2021 were: For the years ended December 31, Cash paid for amounts included in lease liabilities: 2022 2021 Operating cash flows from operating leases $ (9,035) $ (5,675) Operating cash flows from finance leases (61) (33) Financing cash flows from finance leases (756) (302) |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net comprised the following: December 31, 2022 2021 Machinery and equipment $ 27,832 $ 25,177 Peat bogs and related development 10,761 8,686 Building and improvements 9,920 9,510 Land 6,107 6,120 Furniture and fixtures 3,921 2,867 Computer equipment 3,337 3,197 Leasehold improvements 4,177 3,207 Gross property, plant, and equipment 66,055 58,764 Less: accumulated depreciation (14,920) (8,291) Total property, plant and equipment, net $ 51,135 $ 50,473 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities comprised the following: December 31, 2022 2021 Accrued compensation and benefits $ 2,522 $ 3,713 Freight, custom and duty accrual 1,022 2,094 Goods in transit accrual 1,172 3,473 Income tax accrual 451 729 Contingent consideration — 17,034 Other accrued liabilities 8,041 6,953 Total accrued expenses and other current liabilities $ 13,208 $ 33,996 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Debt is comprised of the following: December 31, 2022 2021 Term Loan - net of unamortized discount and deferred financing costs of $5,142 and $6,025 as of December 31, 2022, and December 31, 2021, respectively $ 118,608 $ 118,975 Other 2,064 2,805 Total debt $ 120,672 $ 121,780 Current portion of long-term debt $ 2,011 $ 2,263 Long-term debt - net of discount and deferred financing costs of $5,142 and $6,025 as of December 31, 2022, and December 31, 2021, respectively 118,661 119,517 Total debt $ 120,672 $ 121,780 Term Loan On October 25, 2021, the Company and certain of its direct and indirect subsidiaries (the "Obligors") entered into a Credit and Guaranty Agreement with JPMorgan Chase Bank, N.A., as administrative agent for the lenders, pursuant to which the Company borrowed a $125,000 senior secured term loan (“Term Loan”). The Term Loan bears interest at LIBOR (with a 1.0% floor) plus 5.50%, or an alternative base rate (with a 2.0% floor), plus 4.50%, and is subject to a call premium of 2% in year one, 1% in year two, and 0% thereafter, and matures on October 25, 2028 ("Maturity Date"). Deferred financing costs totaled $6,190 at the inception of the Term Loan and are being amortized to interest expense over the term of the loan. For the year ended December 31, 2022, the effective interest rate was 8.30% and interest expense was $10,331, which includes amortization of deferred financing costs of $883. The principal amounts of the Term Loan are required to be repaid in consecutive quarterly installments in amounts equal to 0.25% of the principal amount of the Term Loan, on the last day of each fiscal quarter commencing March 31, 2022, with the balance of the Term Loan payable on the Maturity Date. The Company is also required to make mandatory prepayments in the event of (i) achieving certain excess cash flow criteria, including the achievement and maintenance of a specific leverage ratio, (ii) selling assets that are collateral, or (iii) upon the issuance, offering, or placement of new debt obligations. There were no such mandatory prepayments made since inception of the Term Loan. As of December 31, 2022, and 2021, the outstanding principal balance on the Term Loan was $123,750 and $125,000, respectively. The Term Loan requires the Company to maintain certain reporting requirements, affirmative covenants, and negative covenants, and the Company was in compliance with all requirements as of December 31, 2022. The Term Loan is secured by a first lien on the non-working capital assets of the Company and a second lien on the working capital assets of the Company. Revolving asset-backed credit facilities JPMorgan Revolving Loan Facility On March 29, 2021, the Obligors entered into a Senior Secured Revolving Credit Facility (the “JPMorgan Revolving Loan Facility”) with JPMorgan Chase Bank, N.A., as administrative agent, issuing bank and swingline lender, and the lenders from time to time party thereto. The JPMorgan Revolving Loan Facility is due on March 29, 2024, or any earlier date on which the revolving commitments are reduced to zero. The three-year JPMorgan Revolving Loan Facility originally had a borrowing limit of $50,000. On August 31, 2021, the Obligors entered into an amendment (the "First Amendment") to increase their original borrowing limit to $100,000. In connection with the First Amendment, the Company's previously acquired subsidiaries became party to the JPMorgan Revolving Loan Facility as either borrowers or as guarantors. On October 25, 2021, the Company and its subsidiaries entered into a second amendment (the “Second Amendment”), with JPMorgan Chase Bank, N.A., pursuant to which the parties consented to the Term Loan described above, and made certain conforming changes to comport with the Term Loan provisions. The JPMorgan Revolving Loan Facility was further amended by a third amendment and joinder dated August 23, 2022, (the “Third Amendment”) pursuant to which several previously acquired subsidiaries became parties to the JPMorgan Revolving Loan Facility and granted liens on their assets. On December 22, 2022, the Company entered into a fourth amendment (the “Fourth Amendment”) pursuant to which the maximum commitment amount under the JPMorgan Revolving Loan Facility was reduced from $100,000 to $75,000, a sale-leaseback transaction was permitted, and certain other changes were made, including changing the LIBOR based rates to SOFR based rates. The Loss on debt modification of $145 for the year ended December 31, 2022, resulted primarily from the write-off of unamortized deferred financing costs associated with the modification of the JPMorgan Revolving Loan Facility entered into during the fourth quarter of 2022. The unamortized debt issuance costs were $580 as of December 31, 2022, and are included in Other assets in the consolidated balance sheet. Debt issuance costs are being amortized to interest expense over the term of the JPMorgan Revolving Loan Facility. The JPMorgan Revolving Loan Facility is an asset-based facility that is secured by a first lien on the working capital assets of the Company and a second lien on the non-working capital assets of the Company (including most of the Company’s subsidiaries). The borrowing base is based on a detailed monthly calculation of the sum of (a) a percentage of the Eligible Accounts at such time, plus (b) the lesser of (i) a percentage of the Eligible Inventory, at such time, valued at the lower of cost or market value, determined on a first-in-first-out basis, and (ii) the product of a percentage multiplied by the Net Orderly Liquidation Value percentage identified in the most recent inventory appraisal ordered by the Administrative Agent multiplied by the Eligible Inventory, valued at the lower of cost or market value, determined on a first-in-first-out basis, minus (c) Reserves (each of the defined terms above, as defined in the JPMorgan Revolving Loan Facility documents). The Company is required to maintain certain reporting requirements, affirmative covenants and negative covenants, pursuant to terms outlined in the agreement. Additionally, if the Company’s Excess Availability (as defined in the JPMorgan Revolving Loan Facility documents) is less than an amount equal to 10% of the Aggregate Revolving Commitment (currently $75,000), the Company will be required to maintain a minimum fixed charge coverage ratio of 1.1x on a rolling twelve-month basis until the Excess Availability is more than 10% of the Aggregate Revolving Commitment for thirty consecutive days. In order to consummate permitted acquisitions or to make restricted payments, the Company would be required to comply with a higher fixed charge coverage ratio of 1.15x, but no such acquisitions or payments are currently contemplated. As of December 31, 2022, the Company is in compliance with the covenants contained in the JPMorgan Revolving Loan Facility. The JPMorgan Revolving Loan Facility provides for various interest rate options including the Adjusted Term SOFR Rate, the Adjusted REVSOFR30 Rate, the CB Floating Rate, the Adjusted Daily Simple SOFR, the CBFR, the Canadian Prime Rate, or the CDOR Rate. The rates that use SOFR as the reference rate (Adjusted Term SOFR Rate, the Adjusted REVSOFR30 Rate, the Adjusted Daily Simple SOFR and the CBFR rate) use the Term SOFR Rate plus 1.95%. Each rate has a 0.0% floor. A fee of 0.25% per annum is charged for available but unused borrowings. As of December 31, 2022, and 2021, the Company had zero borrowed under the facility, and would be able to borrow approximately $40 million under the JPMorgan Revolving Loan Facility, before we would be required to comply with the minimum fixed charge coverage ratio of 1.1x. Encina Credit Facility On July 11, 2019, the Company and certain of its direct and indirect subsidiaries (the “Encina Obligors”) entered into the Encina Credit Facility through a certain Loan and Security Agreement whereby the Encina Obligors obtained a revolving asset-based loan commitment in the maximum amount of $45,000 (inclusive of a limit of up to $15,000 of borrowings for the Canadian borrowers and a swingline facility of up to $2,000), subject to applicable borrowing base availability, through Encina Business Credit, LLC. The Encina Credit Facility was due on the earlier of July 11, 2022, or 90 days prior to the scheduled maturity date of the Brightwood Term Loan. The Encina Credit Facility was secured by working capital assets and a second lien on non-working capital assets. Interest was calculated at LIBOR or a base rate, plus an applicable margin ranging between 3.75% to 5.50% per annum determined based on the fixed charge coverage ratio calculated over an applicable time period. A fee of 0.50% per annum was charged for available, but unused borrowings as defined. An additional 200 basis points was added to the interest rate for any period during which the loan was in default. Deferred financing costs were amortized over the term of the Encina Credit Facility. The Encina Credit Facility was subject to numerous amendments since its origination generally in connection with modifications to available borrowings, financial covenants, permitted indebtedness and permitted capital expenditures. Certain amendments required payments of fees. All amendments were accounted for as debt modifications. The Encina Credit Facility was replaced in March 2021 by the JPMorgan Revolving Loan Facility. For the year ended December 31, 2021, the Company recognized interest expense of $82. The unamortized deferred financing costs and early termination fees totaling $680 were recognized as a loss on debt extinguishment in the consolidated statements of operations for the year ended December 31, 2021. Other debt Other debt as of December 31, 2022, was primarily comprised of $1,904 in finance lease obligations and $160 in a foreign subsidiary's other debt which constitutes an immaterial revolving line of credit and mortgage. Other debt as of December 31, 2021, was primarily comprised of $2,367 in finance lease obligations, $438 in a foreign subsidiary's other debt which constitutes an immaterial revolving line of credit and mortgage. Aggregate future principal payments As of December 31, 2022, the aggregate future principal payments under long-term debt, excluding payments due under finance lease obligations presented in Note 7 - Leases , are as follows: Debt Year ending December 31, 2023 $ 1,307 2024 1,269 2025 1,269 2026 1,269 2027 1,270 Thereafter 117,526 Total principal payments under long-term debt $ 123,910 The following is a reconciliation of payment due: Finance lease obligations Debt Total Current portion of long-term debt $ 704 $ 1,307 $ 2,011 Long-term debt 1,200 122,603 123,803 Total payments due $ 1,904 $ 123,910 $ 125,814 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | STOCKHOLDERS’ EQUITY Common stock Each holder of common stock is entitled to one vote for each share of common stock. Common stockholders have no pre-emptive rights to acquire additional shares of common stock or other securities. The common stock is not subject to redemption rights and carries no subscription or conversion rights. In the event of liquidation, the stockholders are entitled to share in corporate assets on a pro rata basis after the Company satisfies all liabilities and after provision is made for any class of capital stock having preference over the common stock. Subject to corporate regulations and preferences to preferred stock, if any, dividends are at the discretion of the Board. As of December 31, 2022, there were 45,197,249 shares outstanding and 300,000,000 shares authorized. Warrants On July 19, 2021, the Company completed the redemption ("Redemption") of certain of its outstanding warrants (the "Investor Warrants") that were issued in connection with a private placement of units (the "private placement"), each consisting of a share of common stock and a warrant to purchase an additional one-half (1/2) shares of common stock. The Company was entitled to redeem all of the outstanding Investor Warrants for a redemption price of $0.00033712 per Investor Warrant ("redemption price") if (i) there was an effective registration statement covering the resale of the shares of common stock underlying the Investor Warrants, and (ii) the volume-weighted average price of the Company's common stock for the twenty Prior to the redemption date, 3,367,647 Investor Warrants were exercised, generating total gross proceeds of $56,778. The Company redeemed 1,491 Investor Warrants at the redemption price. In connection with the private placement, the Company agreed to engage the placement agent (the "Placement Agent") as the Company's warrant solicitation agent in the event the Investor Warrants were called for Redemption. The Company agreed to pay a warrant solicitation fee to the Placement Agent equal to five percent of the amount of net cash proceeds solicited by the Placement Agent upon the exercise of certain Investor Warrants following such call for Redemption. For the year ended December 31, 2021, warrant solicitation fee expense totaled $1,949 and was included in SG&A in the consolidated statements of operations. As of December 31, 2022, the following table summarizes the outstanding warrants: Number of Warrants Exercise Price Placement agent warrants 11,662 $ 8.43 Placement agent warrants 6,007 $ 16.86 Total 17,669 $ 11.30 As of December 31, 2021, the following table summarizes the outstanding warrants: Number of Warrants Exercise Price Placement agent warrants 11,810 $ 8.43 Placement agent warrants 6,007 $ 16.86 Total 17,817 $ 11.27 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based compensation plan overview The Company maintains three equity incentive plans: the 2018 Equity Incentive Plan (“2018 Plan”), the 2019 Employee, Director and Consultant Equity Incentive Plan (“2019 Plan”) and the 2020 Employee, Director, and Consultant Equity Incentive Plan (“2020 Plan” and collectively, “Incentive Plans”). The 2020 Plan serves as the successor to the 2019 Plan and 2018 Plan and provides for the issuance of incentive stock options ("ISOs"), stock grants and stock-based awards to employees, directors, and consultants of the Company. No further awards will be issued under the 2018 Plan and 2019 Plan. As of December 31, 2022, a total of 1,340,129 shares were available for grant under the 2020 Plan. The Incentive Plans are administered by the Company's Board of Directors. Notwithstanding the foregoing, the Board of Directors may delegate concurrent responsibility for administering each plan, including with respect to designated classes of persons eligible to receive an award under each plan, to a committee or committees (which term shall include subcommittees) consisting of one or more members of the Board of Directors (collectively, the “Plan Administrator”), subject to such limitations as the Board of Directors deems appropriate. In November 2020, the Board of Directors and stockholders approved the 2020 Plan and reserved an aggregate of 2,284,053 shares of common stock for issuance under the 2020 Plan. Pursuant to the 2020 Plan, the number of shares available for issuance under the 2020 Plan may be increased on January 1 of each year, beginning on January 1, 2021, and ending on January 2, 2030, in an amount equal to the lesser of (i) 4% of the outstanding shares of the Company’s common stock on such date or (ii) such number of shares determined by the Plan Administrator. The 2020 Plan provides for the grant of ISOs, nonqualified stock options, stock grants, and stock-based awards that are based in whole or in part by reference to the Company’s common stock. • The Plan Administrator may grant options designated as incentive stock options or nonqualified stock options. Options shall be granted with an exercise price per share not less than 100% of the fair market value of the common stock on the grant date, subject to certain limitations and exceptions as described in the plan agreements. Generally, the maximum term of an option shall be 10 years from the grant date. The Plan Administrator shall establish and set forth in each instrument that evidences an option the time at which, or the installments in which, the option shall vest and become exercisable. • The Plan Administrator may grant stock grants and stock-based awards, including securities convertible into shares, stock appreciation rights, phantom stock awards or stock units on such terms and conditions which may be based on continuous service with the Company or related company or the achievement of any performance goals, as the Plan Administrator shall determine in its sole discretion, which terms, conditions and restrictions shall be set forth in the instrument evidencing the award. Restricted Stock Unit ("RSU") Activity RSUs granted to certain executives, employees and members of the Board of Directors expire 10 years after the grant date. The awards generally have a time-based vesting requirement (based on continuous employment). Upon vesting, the RSUs convert into shares of the Company's common stock. The stock-based compensation expense related to service-based awards is recorded over the requisite service period. During the year ended December 31, 2022, the Company granted RSU awards that are expected to vest either (i) one year on the anniversary of the grant date, (ii) ratably over a three-year period on each anniversary of the grant date, or (iii) with three vesting tranches, the first of which occurred on the grant date, and the following two tranches on each subsequent anniversary of the grant date. The award granted to a former member of the Board (the "former Board member") in July 2020, and modified in November 2020, contained a market-based vesting condition based on the traded value of shares of the Company’s common stock following the IPO over a specific time frame. For this award, the market condition was factored into its fair value. The fair value of the award, at the modification date, was $3,180, all of which was recorded as stock-based compensation expense upon the IPO. In July 2021, the market-based vesting condition for this award was satisfied and 148,315 RSUs of the former Board member vested. The total shares under the unvested RSUs subject to time-based vesting conditions were zero and 111,236 for the years ended December 31, 2022, and 2021, respectively. For the years ended December 31, 2022, and 2021, there were no performance awards with market-based conditions granted. The Company recognized $7,638 and $4,566 of total stock-based compensation expense for RSUs for the years ended December 31, 2022, and 2021, respectively. For the year ended December 31, 2022, the Company withheld 247,979 of the 818,489 of common stock issued upon vesting of RSUs to meet employees' payroll tax withholding requirements. The tax withholding payments of $2,461 were made in 2022 in addition to a tax withholding obligation of $9 from 2021. The following table summarizes the activity related to the Company's RSUs for the year ended December 31, 2022. For purposes of this table, vested RSUs represent the shares for which the service condition had been fulfilled during the year ended December 31, 2022: Number of Weighted Balance, December 31, 2021 1,087,608 $ 9.71 Granted 785,486 $ 9.62 Vested (824,846) $ 9.25 Forfeited (55,615) $ 35.54 Balance, December 31, 2022 992,633 $ 8.57 The total fair value of RSUs vested for the years ended December 31, 2022, and 2021, was $7,628, and $6,090, respectively. As of December 31, 2022, total unamortized stock-based compensation expense related to unvested RSUs was $5,920 and the weighted-average period over which the compensation is expected to be recognized is 1.28 years. As of December 31, 2022, there were 6,357 RSUs which had vested, but were not yet issued due to the recipients' elections to defer the awards. The tax benefits recognized in the consolidated statements of operations for stock-based compensation arrangements for the years ended December 31, 2022, and 2021, were not material to the financial statements. Performance Stock Unit ("PSU") Activity During the year ended December 31, 2022, the Company granted PSU awards that are subject to a one-year vesting requirement (based on continuous employment) and contain performance conditions based on certain performance metrics. The following table summarizes the activity related to the Company's PSUs for the year ended December 31, 2022: Number of Weighted Balance, December 31, 2021 — $ — Granted 116,113 $ 15.74 Forfeited (19,867) $ 15.74 Balance, December 31, 2022 96,246 $ 15.74 As of December 31, 2022, total unamortized stock-based compensation cost related to unvested PSUs was $101 and the weighted-average period over which the compensation is expected to be recognized is less than one year. For the year ended December 31, 2022, the Company recognized $355 of total stock-based compensation expense for PSUs. Stock Options The vesting of stock options is subject to certain change in control provisions as provided in the incentive plan agreements and options may be exercised up to 10 years from the date of issuance. The following table summarizes the stock option activity for the year ended December 31, 2022: Number Weighted Weighted Weighted average Outstanding as of December 31, 2021 720,549 $ 9.57 $ 2.21 7.37 Granted 4,250 $ 13.12 $ 12.95 Exercised (8,283) $ 9.01 $ 2.12 Cancelled (8,720) $ 9.33 $ 3.27 Forfeited (37,770) $ 11.42 $ 7.20 Outstanding as of December 31, 2022 670,026 $ 9.50 $ 2.05 5.25 Options exercisable as of December 31, 2022 599,439 $ 8.90 $ 1.46 5.00 Vested and expected to vest as of December 31, 2022 670,026 $ 9.50 $ 2.05 5.25 The following table summarizes the unvested stock option activity for the year ended December 31, 2022: Number Weighted Unvested as of December 31, 2021 202,515 $ 5.04 Granted 4,250 $ 12.95 Vested (98,408) $ 3.14 Forfeited (37,770) $ 7.20 Unvested as of December 31, 2022 70,587 $ 7.02 The weighted average grant date fair value of stock options granted was $12.95 and $25.58 for the years ended December 31, 2022, and 2021, respectively. The total fair value of stock options vested for the years ended December 31, 2022, and 2021, was $309, and $412, respectively. Since stock options represent equity awards of the Company, such awards are fair valued as of the grant date for the purposes of measurement and recognition under U.S. GAAP. To measure the fair value of an option, the Black-Scholes valuation model was utilized. The valuation model requires the input of highly subjective assumptions. For inputs into the Black-Scholes model, the expected volatility is based on historical implied volatility from recent stock option transactions at the time of grant. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury implied yield at the date of grant. The Company has elected to use the “simplified method” to determine the expected term which is the midpoint between the vesting date and the end of the contractual term because it has insufficient history upon which to base an assumption about the term. The expected dividend yield is 0.0% as the Company has not paid and does not anticipate paying dividends on its common stock. Inputs to the model were as follows for the periods indicated: Years ended December 31, 2022 2021 Weighted average exercise price of common stock underlying the options $13.12 $59.03 Volatility 200% 45% Risk-free rate 2.8% 0.85% Dividend yield Nil Nil Expected term in years 6.0 6.0 For the years ended December 31, 2022, and 2021, respectively, the Company recognized $361 and $440 of total stock-based compensation expense for stock options. The total intrinsic value of options exercised was $82 and $7,448 for the |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES (Loss) income before tax was as follows: Years ended December 31, 2022 2021 United States $ (235,215) $ (9,262) Foreign (56,643) 3,541 Loss before tax $ (291,858) $ (5,721) Significant components of income tax (benefit) expense consist of the following: Years ended December 31, 2022 2021 Current: Federal $ — $ — State 100 72 Foreign 2,767 1,787 Total current expense 2,867 1,859 Deferred: Federal (8,689) (18,275) State (2,980) (1,962) Foreign 2,359 (759) Total deferred benefit (9,310) (20,996) Total income tax benefit $ (6,443) $ (19,137) The reconciliation of income tax computed at the U.S. federal statutory tax rates of 21% to income tax benefit consists of the following: Years ended December 31, 2022 2021 Effective rate reconciliation U.S. federal tax benefit at statutory rate $ (61,290) $ (1,201) State income taxes, net 422 68 Permanent items 3,785 542 Goodwill impairment 23,170 — Global intangible low-taxed income — 972 Foreign rate differential (443) 1,032 162(m) officers compensation 1,010 6,969 Share-based compensation 26 (8,118) Deferred adjustments 770 67 Transaction costs — 2,290 Other, net 2,410 (973) Valuation allowance 23,697 (20,785) Total income tax benefit $ (6,443) $ (19,137) Deferred income tax assets and liabilities consist of the following: December 31, 2022 2021 Deferred tax assets Lease liabilities $ 17,079 $ 11,714 Accrued expenses 1,453 1,215 Share-based compensation 865 460 Intangible assets 2,110 — Net operating loss 31,425 19,543 Inventories 6,346 4,948 Interest expense 4,183 2,154 Other 1,130 1,243 Deferred tax assets 64,591 41,277 Valuation allowance (39,293) (14,892) Total deferred tax assets 25,298 26,385 Deferred tax liabilities Intangible assets — (17,526) Property, plant and equipment (10,216) (2,518) Operating lease right-of-use assets (17,767) (11,579) Total deferred tax liabilities (27,983) (31,623) Net deferred tax liability $ (2,685) $ (5,238) Other long-term assets - deferred tax assets $ — $ 393 Long-term deferred tax liabilities (2,685) (5,631) Net deferred tax liability $ (2,685) $ (5,238) As of December 31, 2022, the Company had federal and state net operating loss (“NOL”) carryforwards of approximately $107,100 and $80,800, respectively. The federal and state NOL carryforwards, if not utilized, will begin to expire in 2037 and 2027, respectively, and $93,400 of the federal losses are indefinite. As of December 31, 2021, the Company had federal and state NOL carryforwards of approximately $74,900 and $56,900, respectively. Foreign NOL carryforwards were approximately $15,900 and $1,000 at December 31, 2022, and 2021, respectively. The majority of the foreign NOLs have a 20 year carryforward period. The Company determined the amount of its valuation allowance based on estimates regarding the timing and amount of the reversal of taxable temporary differences, expected future taxable income by jurisdiction, and the impact of tax planning strategies. As of December 31, 2022, and 2021, the Company believes it is more-likely-than-not that it will not be able to realize its U.S. deferred tax assets and therefore has maintained a full valuation allowance against its U.S. deferred tax assets. The Company has also provided valuation allowances against certain foreign deferred tax assets. The Company's effective tax rate differs from the U.S. federal statutory rate primarily due discrete tax benefits relating primarily to measurement period adjustments associated with 2021 acquisitions, the impairment of goodwill for certain 2021 acquisitions which was not deductible for U.S. tax purposes, increases in the Company's valuation allowance on U.S. deferred tax assets, and the establishment of a valuation allowance for Canadian deferred tax assets. In connection with the measurement period adjustments associated with 2021 acquisitions, the Company recorded a net deferred tax liability which provided an additional source of taxable income to support the realization of the pre-existing deferred tax assets. The Company's income tax benefit was partially offset by income taxes from certain foreign subsidiaries. Carryforwards of NOLs are subject to possible limitation should a change in ownership occur, as defined by Internal Revenue Code Section 382. An ownership change is generally defined as a greater than 50% increase in equity ownership by 5% stockholders in any three-year period. The Company experienced an aggregate ownership change which exceeded the 50% threshold in connection with the Company's IPO, and future changes in stock ownership may occur. To the extent that the Company earns net taxable income, the Company's ability to use NOLs to offset such taxable income may be subject to limitations. The annual limitation resulting from the IPO ownership change is not expected to result in the expiration of the NOL carry forwards before utilization. In 2022 and 2021, the Company did not record any liabilities related to uncertain tax positions. The Company does not have any tax positions for which it is reasonably possible that the total amount of gross unrecognized tax benefits will significantly change within 12 months of December 31, 2022, and 2021. The Company recognizes interest and penalties relating to unrecognized tax benefits as part of its income tax expense. The Company’s major filing jurisdictions are the United States and Canada. Due to the Company’s net operating loss carryforwards, the Company’s income tax returns remain subject to examination by federal, foreign and most state taxing authorities for all tax years. |
COMMITMENTS AND CONTINGENCIES,
COMMITMENTS AND CONTINGENCIES, AND RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES, AND RELATED PARTY TRANSACTIONS | COMMITMENTS AND CONTINGENCIES, AND RELATED PARTY TRANSACTIONS Purchase commitments From time to time in the normal course of business, the Company will enter into agreements with suppliers which provide favorable pricing in return for a commitment to purchase minimum amounts of inventory over a defined time period. Contingencies In the normal course of business, certain claims have been brought against the Company and, where applicable, its suppliers. While there is inherent difficulty in predicting the outcome of such matters, management has vigorously contested the validity of these claims. Based on available information, management believes the claims are without merit and does not expect that the outcome, individually or in the aggregate, would have a material adverse effect on the consolidated financial positions, results of operations, cash flows or future earnings. Related party transactions—Hydrofarm Distribution Center The Company leased a distribution center in Petaluma, California from entities in which a related party was a stockholder. For the year ended December 31, 2021, rent expense for the month-to-month lease totaled $639. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Contingent consideration, as described in Note 3 – Business Combinations , is measured at estimated fair value on a recurring basis and based on Level 3 fair value measurements. The fair value of the contingent consideration for the Heavy 16 and Aurora acquisitions was $200 and $16,834, respectively, as of December 31, 2021. The fair value of the contingent consideration for the Heavy 16 and Aurora acquisitions were both zero as of December 31, 2022, as the liabilities were paid during the year. The change in the fair value of contingent consideration during the years ended December 31, 2022, and 2021, was a benefit of $1,560 and $2,610, respectively, and was recognized in SG&A on the consolidated statements of operations for all periods presented. The valuation methodology and inputs used in the fair value measurement were disclosed in Note 3 – Business Combinations . Nonrecurring fair value measurements include the Company’s goodwill impairment recognized during the year ended December 31, 2022, as determined based on unobservable Level 3 inputs. Refer to Note 4 – Goodwill and Intangible Assets, Net , for further discussion. The note receivable, as described in Note 2 – Basis of Presentation and Significant Accounting Policies , was measured at fair value on a nonrecurring basis. During the year ended December 31, 2022, the Company measured an impairment on the note receivable based on the estimated fair value of the collateral, which was considered a Level 3 fair value measurement. The Company recorded an impairment loss of $2,636 during the year ended December 31, 2022, recognized in Impairments on the consolidated statements of operations. The carrying value of the note receivable was $475 and $3,111 as of December 31, 2022, and 2021, respectively. As of December 31, 2022, the note receivable was included in Other assets on the consolidated balance sheet. The following table summarizes the fair value of the Company’s liabilities which are required to be remeasured to fair value on a recurring basis, as described above: December 31, 2022 December 31, 2021 Fair Value Hierarchy Level Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Liabilities Contingent consideration: Heavy 16 Acquisition Level 3 — — 200 200 Aurora Acquisition Level 3 — — 16,834 16,834 Other Fair Value Measurements The following table summarizes the fair value of the Company’s assets and liabilities which are provided for disclosure purposes: December 31, 2022 December 31, 2021 Fair Value Hierarchy Level Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets Cash and cash equivalents Level 1 21,291 21,291 26,607 26,607 Restricted cash Level 1 — — 1,777 1,777 Liabilities Debt facilities Term Loan Level 2 123,750 105,188 125,000 121,250 Other debt Level 3 2,064 2,064 2,805 2,805 The fair value of the Term Loan was estimated based on Level 2 fair value measurements and was based on bank quotes. The carrying amount of the Term Loan reported above excludes unamortized deferred financing costs and discount. The carrying amount of Other Debt was $2,064 and $2,805 as of December 31, 2022, and 2021, respectively, and was primarily comprised of finance lease obligations. The estimated fair value of Other Debt approximated its carrying value given the applicable interest rates and the nature of the security interest in the Company’s assets, which were considered Level 3 fair value measurements. Refer to Note 10 – Debt , for further discussion of the Company's debt facilities. Cash, cash equivalents, and restricted cash included funds deposited in banks, and the carrying values approximated fair values due to their short-term maturities. The carrying values of other current assets and liabilities including accounts receivable, accounts payable, accrued expenses and other current liabilities approximated their fair value due to their short-term maturities. The Company did not have any transfers between Levels within the fair value hierarchy during years ended December 31, 2022, and 2021. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSIn January 2023, Gotham Properties LLC, an Oregon limited liability company and a subsidiary of the Company (“Seller”), consummated a Purchase and Sale Agreement with J & D Property, LLC, a Nevada limited liability company (“Purchaser”) pursuant to which certain real property located in the City of Eugene, County of Lane, State of Oregon (the “Eugene Property”) was sold to Purchaser for $8,598 and then leased back by Seller (the “Sale-Leaseback Transaction”). The new lease has a term of 15 years with annual rent starting at $731 and fixed increases to the final year when annual rent is $964. The Company is accounting for the transaction as a failed sale and leaseback which requires retaining the asset associated with the property and recognizing a corresponding financial liability for the cash received. The Eugene Property serves as the manufacturing and processing site for certain of the Company’s grow media and nutrient brands. The Company intends to reinvest the net cash proceeds into certain permitted investments in 2023, such as capital expenditures. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of consolidation and presentation | The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the requirements of the U.S. Securities and Exchange Commission (“SEC”) for year end financial reporting. All intercompany balances and transactions have been eliminated in consolidation. The Company reclassified the balance within "Impairment, restructuring and other" on the consolidated statements of operations for the prior period into "Selling, general and administrative expenses" ("SG&A") to conform to the current period presentation. The Company reclassified the balance of customer deposits, totaling $18,273 as of December 31, 2021, previously reported in "Accounts payable" into "Deferred revenue" in the consolidated balance sheet as of December 31, 2021, to conform to the current period presentation. Consistent with the reclassifications on the consolidated balance sheet, the Company made corresponding reclassifications to conform with the current period presentation in the consolidated statement of cash flows. |
Use of estimates | The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Significant estimates include provisions for sales returns, rebates and claims from customers, realization of accounts receivable and inventories, fair value of assets acquired and liabilities assumed for business combinations, valuation of intangible assets and goodwill, estimated useful lives of long-lived assets, incremental borrowing rate applied in lease accounting, valuation of stock-based compensation, recognition of deferred income taxes, recognition of liabilities related to commitments and contingencies and valuation allowances. Actual results may differ from these estimates. On an ongoing basis, the Company reviews its estimates to ensure that these estimates appropriately reflect changes in its business or new information available. |
Business combinations | Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition date fair values of the assets transferred, liabilities incurred to the former owners of the acquiree, and the equity interests issued in exchange for control of the acquiree. Acquisition related costs are recognized in net (loss) income as incurred. When the consideration transferred in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition date fair value and included as part of the consideration transferred in a business combination. Contingent consideration is established for business acquisitions where the Company has the obligation to transfer additional assets or equity interests to the former owners if specified future events occur or conditions are met. Contingent consideration is classified as a liability when the obligation requires settlement in cash or other assets and is classified as equity when the obligation requires settlement in the Company's own equity instruments. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with a corresponding adjustment to goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the measurement period (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. All other subsequent changes in the fair value of contingent consideration classified as a liability are included in net (loss) income in the period. Changes in the fair value of contingent consideration classified as equity are not recognized. For a given acquisition, the Company may identify certain pre-acquisition contingencies as of the acquisition date and may extend its review and evaluation of these pre-acquisition contingencies throughout the measurement period to obtain sufficient information to assess these contingencies as part of acquisition accounting, as applicable. Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non‑controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition‑date fair value amounts of the identifiable assets acquired, and the liabilities assumed. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that time. Upon conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to net (loss) income. |
Restructuring | The Company began a restructuring plan during the quarter ended December 31, 2022, and is undertaking significant actions to streamline operations, reduce costs and improve efficiencies. The major initiatives of the restructuring plan include (i) narrowing the Company's product and brand portfolio and (ii) the relocation and consolidation of certain manufacturing and distribution centers, including headcount reductions and reorganization to drive a solution based approach. |
Concentrations of business and credit risk | The Company maintains cash balances at certain financial institutions that can, at times, exceed amounts insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses in these accounts and believes it is not exposed to any significant credit risk in this area.Accounts receivable expose the Company to credit risks such as collectability and business risks such as customer concentrations. Exposure to losses on receivables is dependent on each customer’s financial condition. Receivables arising from sales are not collateralized; however, credit risk is somewhat mitigated as a result of the large diverse customer base. |
Fair value measurements | Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has applied the framework for measuring fair value which requires a fair value hierarchy to be applied to all fair value measurements. All financial instruments recognized at fair value are classified into one of three levels in the fair value hierarchy as follows: Level 1 — Valuation based on quoted prices (unadjusted) observed in active markets for identical assets or liabilities. Level 2 — Valuation techniques based on inputs that are quoted prices of similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not in active markets; inputs other than quoted prices used in a valuation model that are observable for that instrument; and inputs that are derived from or, corroborated by, observable market data by correlation or other means. Level 3 — Valuation techniques with significant unobservable market inputs. The Company measures certain non-financial assets and liabilities, including long-lived assets, intangible assets and goodwill, at fair value on a nonrecurring basis. The fair value of contingent consideration is classified within level 3 of the fair value hierarchy (See discussion of contingent consideration in Note 3 - Business Combinations and Note 15 - Fair Value Measurements ). |
Foreign currency matters | The Company reports its financial results in United States dollars, which is the currency of the primary economic environment in which it operates. The functional currency for each of the Company’s foreign subsidiaries is generally its local currency. Monetary assets and liabilities, and transactions denominated in currencies other than the functional currency are remeasured to the functional currency at the exchange rate in effect at the end of each period. Foreign currency transaction gains and losses are included in the determination of net (loss) income and classified as other income (expense), net in the consolidated statements of operations. Assets and liabilities of foreign subsidiaries are translated at the exchange rates in effect at the end of each period. Revenues, expenses, gains and losses are translated at the average rates of exchange prevailing during the period. Accumulated deficit and other equity accounts are translated at historical rates. Translation gains and losses are included in accumulated other comprehensive loss within stockholders’ equity. The effect of currency translation adjustments on cash, cash equivalents and restricted cash is presented separately in the consolidated statements of cash flows. |
Cash, cash equivalents and restricted cash | Cash includes funds deposited in banks. Cash equivalents include highly liquid investments such as term deposits and money market instruments with original maturities of three months or less. As of December 31, 2021, amounts included in restricted cash represent those funds required to be set aside as security for letters of credits, and other various contractual arrangements. |
Accounts receivable, net | Trade accounts receivable represents amounts due from customers. Other receivables represent other current non-trade receivables. Allowance for doubtful accounts reflects the Company’s estimate of amounts in its existing accounts receivable that may not be collected due to customer claims or customer inability or unwillingness to pay. The allowance is determined based on a combination of factors, including, but not limited to the age of the account, the credit worthiness of the customer, payment terms, the customer’s historical payment history and general economic conditions. Management reviews these factors quarterly to determine if any adjustments are needed to the allowance for doubtful accounts. Accounts receivable are written off when the receivables are deemed uncollectible. |
Inventories | Inventories consist of finished goods, work-in-process, and raw materials used in manufacturing products. Inventories are stated at the lower of cost or net realizable value, principally determined by the first in, first out method of accounting. The Company maintains an allowance for excess and obsolete inventory. The estimate for excess and obsolete inventory is based upon assumptions about current and anticipated demand, customer preferences, business strategies, and market conditions. Management reviews these assumptions periodically to determine if any adjustments are needed to the allowance for excess and obsolete inventory. The establishment of an allowance for excess and obsolete inventory establishes a new cost basis in the inventory. Such allowance is not reduced until the product is sold. If inventory is sold, any related reserves would be reversed in the period of sale. The Company estimates inventory markdowns relating to restructuring charges based upon current and anticipated demand, customer preferences, business strategies, and market conditions including management's actions with respect to inventory products and brands being removed from our portfolio. Hydrofarm's strategic product consolidation entails removing approximately one-third of all products and one-fifth of all brands relating to our primary product portfolio. |
Leases | Leases are accounted for under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 842, Leases . At inception of a contract, the Company determines whether that contract is or contains a lease. A contract is or contains a lease if the contract conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. Leases are then classified as either finance or operating, with classification affecting the location of expense recognition in the consolidated statements of operations. Right-of-use assets ("ROU") represent the right to use an underlying asset for the lease term while lease liabilities represent the obligation to make lease payments arising from a lease, measured on a discount basis. All leases greater than 12 months result in the recognition of a ROU and a lease liability at the lease commencement date based on the present value of the lease payments over the lease term. The present value of the lease payments is calculated using the applicable weighted-average discount rate. The weighted-average discount rate is based on the discount rate implicit in the lease, or if the implicit rate is not readily determinable from the lease, the applicable incremental borrowing rate is estimated. The incremental borrowing rate is estimated using the currency denomination of the lease and the contractual lease term. To determine the incremental borrowing rate, reference is made to interest rates that would be available to finance assets similar to the assets under lease in their related geographical location. The Company accounts for lease components separately from non-lease components, other than for office equipment. The Company has certain leases that include one or more options to renew with renewal terms that can extend the lease term. The exercise of the lease renewal options is at the Company’s discretion. A lease renewal option is included in the determination of the ROU asset and lease liability when the option is reasonably certain of being exercised. |
Property, plant and equipment | Property, plant and equipment ("PP&E") is recorded at cost less accumulated depreciation, depletion and amortization. PP&E assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. Property, plant and equipment, excluding peat bogs and related development, are depreciated using the straight-line method. The following table summarizes the estimated useful lives as follows: Buildings and improvements 10 - 40 years Machinery and equipment 5 - 15 years Leasehold improvements Lesser of useful life or term of the lease Computer equipment 3 - 4 years Furniture and fixtures 5 years |
Intangible assets and goodwill | Definite-lived intangible assets are amortized using the straight-line method over their estimated useful lives. The Company has one trade name that is considered to have an indefinite useful life. Intangible assets are also tested for impairment at least annually and when events or changes in circumstances indicate that, more-likely-than-not, the carrying amount may not be recoverable. Significant judgment is required in estimating fair values and performing goodwill and intangible asset impairment tests. Goodwill represents the excess of the acquisition price of an acquired business over the fair value of the identifiable assets acquired and liabilities assumed in a business combination less any subsequent write-downs for impairment. Goodwill is tested for impairment on an annual basis in the fourth quarter and more frequently if indicators of potential impairment exist. Impairment testing is conducted at the reporting unit level, which is generally defined as an operating segment or one level below an operating segment (also known as a component), for which discrete financial information is available and segment management regularly reviews the operating results. The Company has determined that its reporting units for the purpose of goodwill impairment testing are the U.S. and Canada. |
Note Receivable | In 2019, the Company executed a note receivable secured by equipment to a third-party, the terms of which were amended and restated during the first quarter of 2021. The note receivable provided for interest and installment payments to the Company, and full maturity of the note in 2024. During the first quarter of 2022 the third-party defaulted on interest payments, and the Company measured an impairment on the note receivable based on the estimated fair value of the collateral. The Company recorded an impairment loss of $2,636 during the year ended December 31, 2022, respectively, in “Impairments” on the consolidated statements of operations. There were no impairment losses recorded in the year ended December 31, 2021. As of December 31, 2022, the note receivable carrying value was $475 and is classified in Other assets on the consolidated balance sheet. |
Revenue recognition | ASC 606, Revenue from Contracts with Customers, requires that revenue recognized from contracts with customers be disaggregated into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The Company has determined that revenue is generated from one category, which is the distribution and manufacture of controlled environment agriculture equipment and supplies. Revenue is recognized as control of promised goods is transferred to customers, which generally occurs upon receipt at customers’ locations determined by the specific terms of the contract. Arrangements generally have a single performance obligation and revenue is reported net of variable consideration which includes applicable volume rebates, cash discounts and sales returns and allowances. Variable consideration is estimated and recorded at the time of sale. The amount billed to customers for shipping and handling costs included in net sales was $13,180, and $8,050 in 2022, and 2021, respectively. Shipping and handling costs that occur before the customer obtains control of the goods are deemed to be fulfillment activities and are accounted for as fulfillment costs included in cost of goods sold. The Company does not receive noncash consideration for the sale of goods. Contract consideration received from a customer prior to revenue recognition is recorded as a contract liability and is recognized as revenue when the Company satisfies the related performance obligation under the terms of the contract. The Company's contract liabilities, which consist primarily of customer deposits are reported within deferred revenue in the consolidated balance sheets, totaled $3,654 and $18,273 as of December 31, 2022, and 2021, respectively. There are no significant financing components. Excluded from revenue are any taxes assessed by governmental authorities, including value-added and other sales-related taxes that are imposed on and concurrent with revenue-generating activities. |
Warrants issued in connection with financings | The Company generally accounts for warrants issued in connection with debt and equity financings as a component of equity unless the warrants include a conditional obligation to issue a variable number of shares among other conditions or it is possible that the Company may need to settle the warrants in cash. |
Stock-based compensation | The Company accounts for stock-based compensation expense in accordance with the fair value recognition and measurement provisions of U.S. GAAP, which requires compensation cost for the grant-date fair value of stock-based awards to be recognized over the requisite service period. The Company accounts for forfeitures when they occur and any compensation expense previously recognized on unvested shares will be reversed when forfeited. Service-based awards The Company records stock-based compensation expense for restricted stock units (“RSUs”) and service-based stock options on a straight-line basis over the requisite service period. The fair value of grants of restricted stock is based on the fair value of the common stock underlying the award. The fair value of the underlying common stock for RSUs prior to the Company’s IPO in December 2020, was determined by considering a number of objective, subjective, and highly complex factors including independent third-party valuations of the Company’s common stock, operating and financial performance, the lack of liquidity of capital stock and general and industry specific economic outlook among other factors. For awards granted after the Company's IPO, the fair value of the underlying common stock for RSUs is the closing date price of the Company's common stock at the grant-date. The fair value of option-based awards is estimated using the Black-Scholes valuation model. The Black-Scholes model requires the use of highly subjective and complex assumptions. For inputs into the Black-Scholes model, the expected volatility is based on historical implied volatility from recent stock option transactions at the time of grant. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury implied yield at the date of grant. The Company has elected to use the “simplified method” to determine the expected term which is the midpoint between the vesting date and the end of the contractual term because it has insufficient history upon which to base an assumption about the term. The expected dividend yield is 0.0% as the Company has not paid and does not anticipate paying dividends on its common stock. Performance-based awards The Company has granted performance stock unit ("PSU") awards that vest upon the satisfaction of both service-based and performance-based conditions. The service-based condition for these awards generally is satisfied over one year. The performance-based conditions generally are satisfied upon achieving specified performance targets. The Company records stock-based compensation expense for performance-based equity awards on a straight-line basis over the requisite service period and only if performance-based conditions are considered probable to be satisfied. Market-based awards The Company has granted RSUs that vest only upon the satisfaction of both performance-based and market-based conditions. The performance-based conditions are satisfied upon achieving specified performance targets, such as the occurrence of a qualifying event, as described above for performance-based awards. The market-based condition is satisfied upon the Company’s achievement of a qualifying traded share price within the specified time frame. The Company records stock-based compensation expense once the performance condition is satisfied regardless of whether the market condition is eventually met. For one award granted in 2020, the market condition was factored into its fair value and the Company used a "Monte Carlo Simulation Method" ("MCSM") to estimate the fair value of the award. The MCSM assessed the likelihood of vesting of the RSU grants based on the probability of both a triggering event and qualifying traded share price within the specified time frame. For the years ended December 31, 2022, and 2021, there were no performance awards with market-based conditions granted. |
Income taxes | The asset and liability method of accounting for income taxes is followed whereby deferred income tax assets are recognized for deductible temporary differences and operating loss carryforwards, and deferred income tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the amounts of assets and liabilities recorded for income tax and financial reporting purposes. Deferred income tax assets are recognized only to the extent that management determines that it is more-likely-than-not that the deferred income tax assets will be realized. Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The income tax expense or benefit is the income tax payable or recoverable for the year plus or minus the change in deferred income tax assets and liabilities during the year. The Company has deferred tax assets and liabilities and maintains valuation allowances where it is more likely than not that all or a portion of deferred tax assets will not be realized. Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. The determination of the amount of valuation allowance to be provided on recorded deferred tax assets involves consideration of estimates regarding the timing and amount of the reversal of taxable temporary differences, expected future taxable income by jurisdiction, and the impact of tax planning strategies. Changes in the relevant facts can impact the judgment or need for valuation allowances. In the event we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. The Company will establish a liability for tax return positions when there is uncertainty as to whether the position will ultimately be sustained. Amounts for uncertain tax positions will be adjusted when new information becomes available or when positions are effectively settled. The Company will recognize interest expense and penalties related to these unrecognized tax benefits within income tax expense. U.S. GAAP provides that a tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits of the position. The amount recognized is measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the related tax authority. |
Recently issued accounting pronouncements | The Company reviewed recently issued accounting pronouncements and noted no new pronouncements relevant to the Company. |
Purchase commitments | From time to time in the normal course of business, the Company will enter into agreements with suppliers which provide favorable pricing in return for a commitment to purchase minimum amounts of inventory over a defined time period. |
Contingencies | In the normal course of business, certain claims have been brought against the Company and, where applicable, its suppliers. While there is inherent difficulty in predicting the outcome of such matters, management has vigorously contested the validity of these claims. Based on available information, management believes the claims are without merit and does not expect that the outcome, individually or in the aggregate, would have a material adverse effect on the consolidated financial positions, results of operations, cash flows or future earnings. |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Revenue from External Customers by Geographic Areas | Sales to external customers and property, plant and equipment, and operating lease right-of-use assets, net in the United States and Canada, determined by the location of the subsidiaries, are shown below. Other foreign locations, which are immaterial, individually and in the aggregate, are included in the U.S. below. Years ended December 31, 2022 2021 United States $ 280,464 $ 399,749 Canada 68,153 87,281 Intersegment eliminations (4,116) (7,610) Total consolidated net sales $ 344,501 $ 479,420 December 31, 2022 2021 United States $ 80,380 $ 85,167 Canada 36,020 10,551 Total property, plant and equipment, and operating lease right-of-use assets, net $ 116,400 $ 95,718 |
Long-lived Assets by Geographic Areas | Sales to external customers and property, plant and equipment, and operating lease right-of-use assets, net in the United States and Canada, determined by the location of the subsidiaries, are shown below. Other foreign locations, which are immaterial, individually and in the aggregate, are included in the U.S. below. Years ended December 31, 2022 2021 United States $ 280,464 $ 399,749 Canada 68,153 87,281 Intersegment eliminations (4,116) (7,610) Total consolidated net sales $ 344,501 $ 479,420 December 31, 2022 2021 United States $ 80,380 $ 85,167 Canada 36,020 10,551 Total property, plant and equipment, and operating lease right-of-use assets, net $ 116,400 $ 95,718 |
Schedule of Property and Equipment | Property, plant and equipment, excluding peat bogs and related development, are depreciated using the straight-line method. The following table summarizes the estimated useful lives as follows: Buildings and improvements 10 - 40 years Machinery and equipment 5 - 15 years Leasehold improvements Lesser of useful life or term of the lease Computer equipment 3 - 4 years Furniture and fixtures 5 years Property, plant and equipment, net comprised the following: December 31, 2022 2021 Machinery and equipment $ 27,832 $ 25,177 Peat bogs and related development 10,761 8,686 Building and improvements 9,920 9,510 Land 6,107 6,120 Furniture and fixtures 3,921 2,867 Computer equipment 3,337 3,197 Leasehold improvements 4,177 3,207 Gross property, plant, and equipment 66,055 58,764 Less: accumulated depreciation (14,920) (8,291) Total property, plant and equipment, net $ 51,135 $ 50,473 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table sets forth the components and allocation of the purchase price for the Company's acquisition of Heavy 16, the H&G Entities, Aurora, Greenstar and the IGE Entities: Heavy 16 H&G Entities Aurora Greenstar IGE Entities Component of Purchase Price: Amount Amount Amount Amount Amount Cash $ 60,287 $ 133,483 $ 133,962 $ 85,121 $ 49,129 Common stock 16,736 — 25,824 — 11,051 Contingent consideration 344 — 19,300 — — Forgiveness of assets and liabilities — — (215) (1,601) 722 Total purchase price $ 77,367 $ 133,483 $ 178,871 $ 83,520 $ 60,902 Acquisition-related costs $ 3,109 $ 5,063 $ 7,358 $ 3,688 $ 2,150 Allocation of Purchase Price: Identifiable assets (liabilities) Accounts receivable $ 510 $ 3,308 $ 6,967 $ 982 $ 2,367 Inventories 1,451 6,559 11,031 8,728 30,592 Prepaid expenses and other current assets 34 493 1,086 447 470 Property and equipment 1,078 358 37,991 1,717 4,274 Operating lease right-of-use assets 1,088 1,921 — 2,736 4,447 Other assets 25 213 — 176 — Accounts payable (1,055) (1,320) (4,360) (777) (21,686) Accrued expenses and other current liabilities (226) (445) (768) (1,421) (859) Current portion of lease liabilities (274) (447) — (624) (815) Current portion of long-term debt — — — — (482) Long-term deferred tax liabilities — (25,589) — — (6,769) Long-term lease liabilities (868) (1,501) — (1,836) (3,116) Long-term debt — — — — (1,434) Other long-term liabilities — — (3,840) — — Net identifiable assets 1,763 (16,450) 48,107 10,128 6,989 Identifiable intangible assets Other intangible assets 200 200 824 383 2,430 Customer relationships 5,100 12,500 6,400 11,100 6,300 Trademarks and trade names 18,500 31,400 59,100 9,100 14,000 Technology and formulations & recipes 33,600 56,200 18,000 2,800 3,800 Total identifiable intangible assets 57,400 100,300 84,324 23,383 26,530 Goodwill 18,204 49,633 46,440 50,009 27,383 Total purchase price allocation $ 77,367 $ 133,483 $ 178,871 $ 83,520 $ 60,902 |
Business Acquisition, Pro Forma Information | The following represents estimated unaudited consolidated net sales and net income amounts for year ended December 31, 2021, as if the five acquisitions had been included in the consolidated results of the Company for the entire period. The estimated net income presented below also includes the impact of the aforementioned allocation adjustments to the useful lives of certain intangible assets, resulting in additional expense attributed to the year ended December 31, 2021. Management considers these estimates to represent an approximate measure of the performance of the combined Company: Year ended December 31, 2021 Estimated ($ in millions) Net sales $ 596 Net income $ 66 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in goodwill are as follows: Goodwill Balance at December 31, 2020 $ — Acquisition - Heavy 16 18,204 Acquisition - H&G Entities 49,707 Acquisition - Aurora 46,433 Acquisition - Greenstar 43,009 Acquisition - IGE Entities 48,687 Foreign currency translation adjustments, net (1,172) Balance at December 31, 2021 $ 204,868 Acquisition - IGE Entities - measurement period adjustments (21,304) Acquisition - Greenstar - measurement period adjustments 7,000 Acquisition - all others - measurement period adjustments and foreign currency translation adjustments, net (992) Impairments (189,572) Balance at December 31, 2022 $ — |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets, net comprised the following: December 31, 2022 December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Book Value Gross Carrying Amount Accumulated Amortization Net Book Value Finite-lived intangible assets: Computer software $ 9,408 $ (7,976) $ 1,432 $ 8,814 $ (7,208) $ 1,606 Customer relationship 99,933 (24,533) 75,400 101,222 (16,517) 84,705 Technology, formulations and recipes 114,187 (15,344) 98,843 110,561 (3,630) 106,931 Trade names and trademarks 131,410 (10,052) 121,358 — — — Other 4,778 (4,246) 532 2,428 (1,744) 684 Total finite-lived intangible assets, net 359,716 (62,151) 297,565 223,025 (29,099) 193,926 Indefinite-lived intangible assets: Trade name 2,801 — 2,801 120,773 — 120,773 Other — — — 120 — 120 Total Intangible assets, net $ 362,517 $ (62,151) $ 300,366 $ 343,918 $ (29,099) $ 314,819 |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net comprised the following: December 31, 2022 December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Book Value Gross Carrying Amount Accumulated Amortization Net Book Value Finite-lived intangible assets: Computer software $ 9,408 $ (7,976) $ 1,432 $ 8,814 $ (7,208) $ 1,606 Customer relationship 99,933 (24,533) 75,400 101,222 (16,517) 84,705 Technology, formulations and recipes 114,187 (15,344) 98,843 110,561 (3,630) 106,931 Trade names and trademarks 131,410 (10,052) 121,358 — — — Other 4,778 (4,246) 532 2,428 (1,744) 684 Total finite-lived intangible assets, net 359,716 (62,151) 297,565 223,025 (29,099) 193,926 Indefinite-lived intangible assets: Trade name 2,801 — 2,801 120,773 — 120,773 Other — — — 120 — 120 Total Intangible assets, net $ 362,517 $ (62,151) $ 300,366 $ 343,918 $ (29,099) $ 314,819 Useful lives Weighted-average amortization period Computer software 5 years 3 years Customer relationships 7 to 18 years 11 years Technology, formulations and recipes 8 to 12 years 10 years Trade names and trademarks 15 to 20 years 18 years |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated aggregate future amortization expense for intangible assets subject to amortization as December 31, 2022, is summarized below: Estimated Future Amortization Expense Year ending December 31, 2023 $ 24,525 2024 24,418 2025 24,348 2026 23,968 Thereafter 200,306 Total $ 297,565 |
EARNINGS (LOSS) PER COMMON SH_2
EARNINGS (LOSS) PER COMMON SHARE (“EPS”) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents information necessary to calculate basic and diluted EPS for the years ended December 31, 2022, and 2021: Years ended December 31, 2022 2021 Net (loss) income $ (285,415) $ 13,416 Weighted-average shares of common stock outstanding 44,974,856 39,991,809 Dilutive effect of warrants using the treasury stock method — 1,395,393 Dilutive effect of restricted stock units using the treasury stock method — 1,068,984 Dilutive effect of stock options using the treasury stock method — 533,009 Diluted weighted-average shares of common stock outstanding 44,974,856 42,989,195 Basic EPS $ (6.35) $ 0.34 Diluted EPS $ (6.35) $ 0.31 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The computation of the weighted-average shares of common stock outstanding for diluted EPS includes the following potential shares of common stock using the treasury stock method for the weighted-average period during which the shares were outstanding: Years ended December 31, 2022 2021 Shares subject to warrants outstanding — 1,899,435 Shares subject to unvested performance based and restricted stock units — 1,311,914 Shares subject to stock options outstanding — 831,517 The computation of the weighted-average shares of common stock outstanding for diluted EPS excludes the following potential shares of common stock as their inclusion would have an anti-dilutive effect on diluted EPS: Years ended December 31, 2022 2021 Shares subject to warrants outstanding 17,669 17,817 Shares subject to unvested performance based and restricted stock units 1,088,879 71,871 Shares subject to stock options outstanding 670,026 10,641 |
ACCOUNTS RECEIVABLE, NET AND _2
ACCOUNTS RECEIVABLE, NET AND INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable, Net | Accounts receivable, net comprised the following: December 31, 2022 2021 Trade accounts receivable $ 18,204 $ 35,511 Allowance for doubtful accounts (1,556) (1,156) Other receivables 579 7,129 Total accounts receivable, net $ 17,227 $ 41,484 |
Schedule of Inventories | Inventories comprised the following: December 31, 2022 2021 Finished goods $ 83,134 $ 145,298 Work-in-process 5,403 5,967 Raw materials 38,558 41,399 Allowance for inventory obsolescence (15,697) (3,530) Total inventories $ 111,398 $ 189,134 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Lessee, Assets and Liabilities | Total ROU assets and lease liabilities were as follows: December 31, Balance Sheet Classification 2022 2021 Leased assets Operating ROU assets Operating lease right-of-use assets $ 65,265 $ 45,245 Finance lease assets Property, plant and equipment, net 2,005 2,365 Total leased assets $ 67,270 $ 47,610 Lease liabilities Current: Operating leases Current portion of lease liabilities $ 9,099 $ 7,198 Finance leases Current portion of long-term debt 704 739 Noncurrent: Operating leases Long-term lease liabilities 56,299 38,595 Finance leases Long-term debt 1,200 1,628 Total lease liabilities $ 67,302 $ 48,160 |
Lease, Cost | Total lease income and costs were as follows: For the years ended December 31, Classification 2022 2021 Operating lease costs Selling, general and administrative $ 11,484 $ 6,664 Finance lease costs: Amortization of lease assets Selling, general and administrative 285 291 Amortization of lease assets Cost of goods sold 327 — Interest on lease liabilities Interest expense 61 33 Sublease income Selling, general and administrative (1,533) (277) The following table summarizes the weighted-average remaining lease term as of December 31, 2022, and 2021, as well as the weighted-average discount rate on long-term leases for the years ended December 31, 2022, and 2021: December 31, 2022 2021 Weighted-average remaining lease term in years: Operating leases 7.1 6.8 Finance leases 3.1 3.5 Weighted-average discount rate: Operating leases 4.00 % 3.32 % Finance leases 3.63 % 4.62 % Cash paid for amounts included in lease liabilities in 2022, and 2021 were: For the years ended December 31, Cash paid for amounts included in lease liabilities: 2022 2021 Operating cash flows from operating leases $ (9,035) $ (5,675) Operating cash flows from finance leases (61) (33) Financing cash flows from finance leases (756) (302) |
Lessee, Operating Lease, Liability, Maturity | The aggregate future minimum lease payments under long-term non-cancelable operating and finance leases with remaining terms greater than one year as of December 31, 2022, are as follows: Year ending December 31, Operating Finance 2023 $ 11,463 $ 760 2024 11,043 634 2025 10,466 481 2026 9,180 63 2027 8,941 69 Thereafter 25,016 — Total rental payments 76,109 2,007 Less portion representing interest 10,711 103 Total principal 65,398 1,904 Less current portion 9,099 704 Long-term portion $ 56,299 $ 1,200 |
Finance Lease, Liability, Fiscal Year Maturity | The aggregate future minimum lease payments under long-term non-cancelable operating and finance leases with remaining terms greater than one year as of December 31, 2022, are as follows: Year ending December 31, Operating Finance 2023 $ 11,463 $ 760 2024 11,043 634 2025 10,466 481 2026 9,180 63 2027 8,941 69 Thereafter 25,016 — Total rental payments 76,109 2,007 Less portion representing interest 10,711 103 Total principal 65,398 1,904 Less current portion 9,099 704 Long-term portion $ 56,299 $ 1,200 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property, plant and equipment, excluding peat bogs and related development, are depreciated using the straight-line method. The following table summarizes the estimated useful lives as follows: Buildings and improvements 10 - 40 years Machinery and equipment 5 - 15 years Leasehold improvements Lesser of useful life or term of the lease Computer equipment 3 - 4 years Furniture and fixtures 5 years Property, plant and equipment, net comprised the following: December 31, 2022 2021 Machinery and equipment $ 27,832 $ 25,177 Peat bogs and related development 10,761 8,686 Building and improvements 9,920 9,510 Land 6,107 6,120 Furniture and fixtures 3,921 2,867 Computer equipment 3,337 3,197 Leasehold improvements 4,177 3,207 Gross property, plant, and equipment 66,055 58,764 Less: accumulated depreciation (14,920) (8,291) Total property, plant and equipment, net $ 51,135 $ 50,473 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities and Other Current Liabilities | Accrued expenses and other current liabilities comprised the following: December 31, 2022 2021 Accrued compensation and benefits $ 2,522 $ 3,713 Freight, custom and duty accrual 1,022 2,094 Goods in transit accrual 1,172 3,473 Income tax accrual 451 729 Contingent consideration — 17,034 Other accrued liabilities 8,041 6,953 Total accrued expenses and other current liabilities $ 13,208 $ 33,996 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt is comprised of the following: December 31, 2022 2021 Term Loan - net of unamortized discount and deferred financing costs of $5,142 and $6,025 as of December 31, 2022, and December 31, 2021, respectively $ 118,608 $ 118,975 Other 2,064 2,805 Total debt $ 120,672 $ 121,780 Current portion of long-term debt $ 2,011 $ 2,263 Long-term debt - net of discount and deferred financing costs of $5,142 and $6,025 as of December 31, 2022, and December 31, 2021, respectively 118,661 119,517 Total debt $ 120,672 $ 121,780 The following is a reconciliation of payment due: Finance lease obligations Debt Total Current portion of long-term debt $ 704 $ 1,307 $ 2,011 Long-term debt 1,200 122,603 123,803 Total payments due $ 1,904 $ 123,910 $ 125,814 |
Schedule of Maturities of Long-term Debt | As of December 31, 2022, the aggregate future principal payments under long-term debt, excluding payments due under finance lease obligations presented in Note 7 - Leases , are as follows: Debt Year ending December 31, 2023 $ 1,307 2024 1,269 2025 1,269 2026 1,269 2027 1,270 Thereafter 117,526 Total principal payments under long-term debt $ 123,910 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Warrants | As of December 31, 2022, the following table summarizes the outstanding warrants: Number of Warrants Exercise Price Placement agent warrants 11,662 $ 8.43 Placement agent warrants 6,007 $ 16.86 Total 17,669 $ 11.30 As of December 31, 2021, the following table summarizes the outstanding warrants: Number of Warrants Exercise Price Placement agent warrants 11,810 $ 8.43 Placement agent warrants 6,007 $ 16.86 Total 17,817 $ 11.27 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement, Outstanding Award, Activity, Excluding Option | The following table summarizes the activity related to the Company's RSUs for the year ended December 31, 2022. For purposes of this table, vested RSUs represent the shares for which the service condition had been fulfilled during the year ended December 31, 2022: Number of Weighted Balance, December 31, 2021 1,087,608 $ 9.71 Granted 785,486 $ 9.62 Vested (824,846) $ 9.25 Forfeited (55,615) $ 35.54 Balance, December 31, 2022 992,633 $ 8.57 Number of Weighted Balance, December 31, 2021 — $ — Granted 116,113 $ 15.74 Forfeited (19,867) $ 15.74 Balance, December 31, 2022 96,246 $ 15.74 |
Share-based Payment Arrangement, Option, Activity | The following table summarizes the stock option activity for the year ended December 31, 2022: Number Weighted Weighted Weighted average Outstanding as of December 31, 2021 720,549 $ 9.57 $ 2.21 7.37 Granted 4,250 $ 13.12 $ 12.95 Exercised (8,283) $ 9.01 $ 2.12 Cancelled (8,720) $ 9.33 $ 3.27 Forfeited (37,770) $ 11.42 $ 7.20 Outstanding as of December 31, 2022 670,026 $ 9.50 $ 2.05 5.25 Options exercisable as of December 31, 2022 599,439 $ 8.90 $ 1.46 5.00 Vested and expected to vest as of December 31, 2022 670,026 $ 9.50 $ 2.05 5.25 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following table summarizes the unvested stock option activity for the year ended December 31, 2022: Number Weighted Unvested as of December 31, 2021 202,515 $ 5.04 Granted 4,250 $ 12.95 Vested (98,408) $ 3.14 Forfeited (37,770) $ 7.20 Unvested as of December 31, 2022 70,587 $ 7.02 Years ended December 31, 2022 2021 Weighted average exercise price of common stock underlying the options $13.12 $59.03 Volatility 200% 45% Risk-free rate 2.8% 0.85% Dividend yield Nil Nil Expected term in years 6.0 6.0 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | (Loss) income before tax was as follows: Years ended December 31, 2022 2021 United States $ (235,215) $ (9,262) Foreign (56,643) 3,541 Loss before tax $ (291,858) $ (5,721) |
Schedule of Components of Income Tax Expense (Benefit) | Significant components of income tax (benefit) expense consist of the following: Years ended December 31, 2022 2021 Current: Federal $ — $ — State 100 72 Foreign 2,767 1,787 Total current expense 2,867 1,859 Deferred: Federal (8,689) (18,275) State (2,980) (1,962) Foreign 2,359 (759) Total deferred benefit (9,310) (20,996) Total income tax benefit $ (6,443) $ (19,137) |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of income tax computed at the U.S. federal statutory tax rates of 21% to income tax benefit consists of the following: Years ended December 31, 2022 2021 Effective rate reconciliation U.S. federal tax benefit at statutory rate $ (61,290) $ (1,201) State income taxes, net 422 68 Permanent items 3,785 542 Goodwill impairment 23,170 — Global intangible low-taxed income — 972 Foreign rate differential (443) 1,032 162(m) officers compensation 1,010 6,969 Share-based compensation 26 (8,118) Deferred adjustments 770 67 Transaction costs — 2,290 Other, net 2,410 (973) Valuation allowance 23,697 (20,785) Total income tax benefit $ (6,443) $ (19,137) |
Schedule of Deferred Tax Assets and Liabilities | Deferred income tax assets and liabilities consist of the following: December 31, 2022 2021 Deferred tax assets Lease liabilities $ 17,079 $ 11,714 Accrued expenses 1,453 1,215 Share-based compensation 865 460 Intangible assets 2,110 — Net operating loss 31,425 19,543 Inventories 6,346 4,948 Interest expense 4,183 2,154 Other 1,130 1,243 Deferred tax assets 64,591 41,277 Valuation allowance (39,293) (14,892) Total deferred tax assets 25,298 26,385 Deferred tax liabilities Intangible assets — (17,526) Property, plant and equipment (10,216) (2,518) Operating lease right-of-use assets (17,767) (11,579) Total deferred tax liabilities (27,983) (31,623) Net deferred tax liability $ (2,685) $ (5,238) Other long-term assets - deferred tax assets $ — $ 393 Long-term deferred tax liabilities (2,685) (5,631) Net deferred tax liability $ (2,685) $ (5,238) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table summarizes the fair value of the Company’s liabilities which are required to be remeasured to fair value on a recurring basis, as described above: December 31, 2022 December 31, 2021 Fair Value Hierarchy Level Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Liabilities Contingent consideration: Heavy 16 Acquisition Level 3 — — 200 200 Aurora Acquisition Level 3 — — 16,834 16,834 The following table summarizes the fair value of the Company’s assets and liabilities which are provided for disclosure purposes: December 31, 2022 December 31, 2021 Fair Value Hierarchy Level Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets Cash and cash equivalents Level 1 21,291 21,291 26,607 26,607 Restricted cash Level 1 — — 1,777 1,777 Liabilities Debt facilities Term Loan Level 2 123,750 105,188 125,000 121,250 Other debt Level 3 2,064 2,064 2,805 2,805 |
DESCRIPTION OF THE BUSINESS (De
DESCRIPTION OF THE BUSINESS (Details) - USD ($) | 12 Months Ended | ||
May 03, 2021 | Dec. 14, 2020 | Dec. 31, 2021 | |
Class of Stock [Line Items] | |||
Issuance of common stock in connection with offering, net of offering cost | $ 16,303 | ||
IPO | Common Stock | |||
Class of Stock [Line Items] | |||
Shares issued in offering (in shares) | 9,966,667 | ||
Sale of stock, price per share (in dollars per share) | $ 20 | ||
Proceeds from issuance on offering | $ 182,271,000 | ||
Issuance of common stock in connection with offering, net of offering cost | $ 148,000 | ||
Over-Allotment Option | Common Stock | |||
Class of Stock [Line Items] | |||
Shares issued in offering (in shares) | 1,300,000 | ||
Follow-On Public Offering | Common Stock | |||
Class of Stock [Line Items] | |||
Shares issued in offering (in shares) | 5,526,861 | ||
Sale of stock, price per share (in dollars per share) | $ 59 | ||
Proceeds from issuance on offering | $ 309,782,000 | ||
Follow-On Public Offering, Over-Allotment Option | Common Stock | |||
Class of Stock [Line Items] | |||
Shares issued in offering (in shares) | 720,894 |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Restructuring Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expenses | $ 6,091 | $ 0 |
Annualized cost savings | 7,000 | |
Accrued liability for restructuring costs | 696 | |
Additional restructuring charges | 1,700 | |
Cost of goods sold | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expenses | 7,466 | |
Selling, General and Administrative Expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expenses | 221 | |
Inventory Writedown | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expenses | 6,790 | |
Facility Closing | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expenses | $ 897 |
BASIS OF PRESENTATION AND SIG_5
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Segment Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 segment | Dec. 31, 2021 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Contract liabilities | $ | $ 18,273 | |
Number of operating segments | 2 | |
Number of reportable segments | 1 |
BASIS OF PRESENTATION AND SIG_6
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Entity-wide Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 344,501 | $ 479,420 |
Property, plant and equipment, net and operating lease right-of-use assets | 116,400 | 95,718 |
Operating segments | United States | ||
Segment Reporting Information [Line Items] | ||
Net sales | 280,464 | 399,749 |
Property, plant and equipment, net and operating lease right-of-use assets | 80,380 | 85,167 |
Operating segments | Canada | ||
Segment Reporting Information [Line Items] | ||
Net sales | 68,153 | 87,281 |
Property, plant and equipment, net and operating lease right-of-use assets | 36,020 | 10,551 |
Intersegment eliminations | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ (4,116) | $ (7,610) |
BASIS OF PRESENTATION AND SIG_7
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Concentrations of Business and Credit Risk Narrative (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Supplier Concentration Risk | Purchases | One Supplier | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10% | 10% |
BASIS OF PRESENTATION AND SIG_8
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Building and improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 10 years |
Building and improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 40 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 5 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 15 years |
Computer equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 3 years |
Computer equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 4 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 5 years |
BASIS OF PRESENTATION AND SIG_9
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from External Customer [Line Items] | ||
Impairment loss | $ 2,636 | |
Note receivable | 475 | $ 3,111 |
Net sales | 344,501 | 479,420 |
Contract liabilities | 18,273 | |
Deferred revenue | 3,654 | 18,273 |
Shipping and Handling | ||
Revenue from External Customer [Line Items] | ||
Net sales | $ 13,180 | $ 8,050 |
BASIS OF PRESENTATION AND SI_10
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Stock-based Compensation Narrative (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected dividend yield | 0% |
Restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award service period | 1 year |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) | 12 Months Ended | |||||||
Nov. 01, 2021 USD ($) | Aug. 03, 2021 USD ($) | Jul. 01, 2021 USD ($) | Jun. 01, 2021 USD ($) | May 03, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) acquisition | Jul. 31, 2022 USD ($) | |
Business Acquisition [Line Items] | ||||||||
Number of businesses acquired | acquisition | 5 | |||||||
Additional amortization expense | $ 5,894,000 | |||||||
Contingent consideration | 0 | $ 17,034,000 | ||||||
Change in fair value of contingent consideration | $ 1,560,000 | 2,610,000 | ||||||
Customer relationship | Minimum | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 7 years | |||||||
Customer relationship | Maximum | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 12 years | |||||||
Technology, Formulations and Recipes | Minimum | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 8 years | |||||||
Technology, Formulations and Recipes | Maximum | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 12 years | |||||||
Computer software | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 3 years | |||||||
Trade Names | Minimum | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 15 years | |||||||
Trade Names | Maximum | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 20 years | |||||||
Field 16, LLC (Heavy 16) | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of voting interests acquired | 100% | |||||||
Consideration transferred | $ 77,367,000 | |||||||
Cash | 60,287,000 | |||||||
Common stock | 16,736,000 | |||||||
Contingent consideration | 344,000 | |||||||
Contingent consideration arrangements, range of outcomes, value, high | 2,500,000 | |||||||
Contingent consideration arrangements, range of outcomes, value, incremental amount over threshold | 200,000 | |||||||
Contingent consideration arrangements, range of outcomes, value, threshold | 1,000,000 | |||||||
Contingent consideration arrangements, range of outcomes, value, sales threshold | 21,000,000 | |||||||
Change in fair value of contingent consideration | $ (144,000) | |||||||
Contingent consideration | 344,000 | |||||||
Forgiveness of assets and liabilities | $ 0 | |||||||
Field 16, LLC (Heavy 16) | Carrying Amount | ||||||||
Business Acquisition [Line Items] | ||||||||
Contingent consideration | 0 | 200,000 | ||||||
Field 16, LLC (Heavy 16) | Valuation, Income Approach | ||||||||
Business Acquisition [Line Items] | ||||||||
Contingent consideration, liability, measurement input | 0.10 | |||||||
Field 16, LLC (Heavy 16) | Valuation Technique, Discounted Cash Flow | ||||||||
Business Acquisition [Line Items] | ||||||||
Contingent consideration, liability, measurement input | 0.0033 | |||||||
H&G Entities | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of voting interests acquired | 100% | |||||||
Consideration transferred | $ 133,483,000 | |||||||
Cash | 133,483,000 | |||||||
Common stock | 0 | |||||||
Contingent consideration | 0 | |||||||
Forgiveness of assets and liabilities | $ 0 | |||||||
Aurora | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of voting interests acquired | 100% | |||||||
Consideration transferred | $ 178,871,000 | |||||||
Cash | 133,962,000 | |||||||
Common stock | 25,824,000 | |||||||
Contingent consideration | 19,300,000 | |||||||
Contingent consideration arrangements, range of outcomes, value, high | 70,997,000 | |||||||
Contingent consideration | $ 15,274,000 | |||||||
Change in fair value of contingent consideration | (1,560,000) | (2,466,000) | ||||||
Contingent consideration | 19,300,000 | |||||||
Forgiveness of accounts payable | 215,000 | |||||||
Contingent consideration arrangements, excess EBITDA | $ 15,556,000 | |||||||
Contingent consideration arrangements, multiplier | 11 | |||||||
Forgiveness of assets and liabilities | $ (215,000) | |||||||
Aurora | Carrying Amount | ||||||||
Business Acquisition [Line Items] | ||||||||
Contingent consideration | $ 0 | $ 16,834,000 | ||||||
Aurora | Valuation Technique, Discounted Cash Flow | Measurement Input, Discount Rate | ||||||||
Business Acquisition [Line Items] | ||||||||
Contingent consideration, liability, measurement input | 0.15 | |||||||
Greenstar | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of voting interests acquired | 100% | |||||||
Consideration transferred | $ 83,520,000 | |||||||
Cash | 85,121,000 | |||||||
Common stock | 0 | |||||||
Contingent consideration | 0 | |||||||
Forgiveness of accounts payable | 1,601,000 | |||||||
Forgiveness of assets and liabilities | $ (1,601,000) | |||||||
IGE Entities | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of voting interests acquired | 100% | |||||||
Consideration transferred | $ 60,902,000 | |||||||
Cash | 49,129,000 | |||||||
Common stock | 11,051,000 | |||||||
Contingent consideration | 0 | |||||||
Forgiveness of assets and liabilities | $ 722,000 |
BUSINESS COMBINATIONS - Compone
BUSINESS COMBINATIONS - Components (Details) - USD ($) $ in Thousands | Nov. 01, 2021 | Aug. 03, 2021 | Jul. 01, 2021 | Jun. 01, 2021 | May 03, 2021 |
Field 16, LLC (Heavy 16) | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 60,287 | ||||
Common stock | 16,736 | ||||
Contingent consideration | 344 | ||||
Forgiveness of assets and liabilities | 0 | ||||
Total purchase price | 77,367 | ||||
Acquisition-related costs | $ 3,109 | ||||
H&G Entities | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 133,483 | ||||
Common stock | 0 | ||||
Contingent consideration | 0 | ||||
Forgiveness of assets and liabilities | 0 | ||||
Total purchase price | 133,483 | ||||
Acquisition-related costs | $ 5,063 | ||||
Aurora | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 133,962 | ||||
Common stock | 25,824 | ||||
Contingent consideration | 19,300 | ||||
Forgiveness of assets and liabilities | (215) | ||||
Total purchase price | 178,871 | ||||
Acquisition-related costs | $ 7,358 | ||||
Greenstar | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 85,121 | ||||
Common stock | 0 | ||||
Contingent consideration | 0 | ||||
Forgiveness of assets and liabilities | (1,601) | ||||
Total purchase price | 83,520 | ||||
Acquisition-related costs | $ 3,688 | ||||
IGE Entities | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 49,129 | ||||
Common stock | 11,051 | ||||
Contingent consideration | 0 | ||||
Forgiveness of assets and liabilities | 722 | ||||
Total purchase price | 60,902 | ||||
Acquisition-related costs | $ 2,150 |
BUSINESS COMBINATIONS - Allocat
BUSINESS COMBINATIONS - Allocation (Details) - USD ($) | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Nov. 01, 2021 | Aug. 03, 2021 | Jul. 01, 2021 | Jun. 01, 2021 | May 03, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||||||||
Goodwill | $ 0 | $ 0 | $ 204,868,000 | $ 0 | |||||
Field 16, LLC (Heavy 16) | |||||||||
Business Acquisition [Line Items] | |||||||||
Accounts receivable | $ 510,000 | ||||||||
Inventories | 1,451,000 | ||||||||
Prepaid expenses and other current assets | 34,000 | ||||||||
Property and equipment | 1,078,000 | ||||||||
Operating lease right-of-use assets | 1,088,000 | ||||||||
Other assets | 25,000 | ||||||||
Accounts payable | (1,055,000) | ||||||||
Accrued expenses and other current liabilities | (226,000) | ||||||||
Current portion of lease liabilities | (274,000) | ||||||||
Current portion of long-term debt | 0 | ||||||||
Long-term deferred tax liabilities | 0 | ||||||||
Long-term lease liabilities | (868,000) | ||||||||
Long-term debt | 0 | ||||||||
Other long-term liabilities | 0 | ||||||||
Net identifiable assets | 1,763,000 | ||||||||
Identifiable intangible assets | 57,400,000 | ||||||||
Goodwill | 18,204,000 | ||||||||
Total purchase price allocation | 77,367,000 | ||||||||
Field 16, LLC (Heavy 16) | Other intangible assets | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | 200,000 | ||||||||
Field 16, LLC (Heavy 16) | Customer relationship | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | 5,100,000 | ||||||||
Field 16, LLC (Heavy 16) | Trademarks and trade names | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | 18,500,000 | ||||||||
Field 16, LLC (Heavy 16) | Technology, Formulations and Recipes | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | $ 33,600,000 | ||||||||
H&G Entities | |||||||||
Business Acquisition [Line Items] | |||||||||
Accounts receivable | $ 3,308,000 | ||||||||
Inventories | 6,559,000 | ||||||||
Prepaid expenses and other current assets | 493,000 | ||||||||
Property and equipment | 358,000 | ||||||||
Operating lease right-of-use assets | 1,921,000 | ||||||||
Other assets | 213,000 | ||||||||
Accounts payable | (1,320,000) | ||||||||
Accrued expenses and other current liabilities | (445,000) | ||||||||
Current portion of lease liabilities | (447,000) | ||||||||
Current portion of long-term debt | 0 | ||||||||
Long-term deferred tax liabilities | (25,589,000) | ||||||||
Long-term lease liabilities | (1,501,000) | ||||||||
Long-term debt | 0 | ||||||||
Other long-term liabilities | 0 | ||||||||
Net identifiable assets | (16,450,000) | ||||||||
Identifiable intangible assets | 100,300,000 | ||||||||
Goodwill | 49,633,000 | ||||||||
Total purchase price allocation | 133,483,000 | ||||||||
H&G Entities | Other intangible assets | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | 200,000 | ||||||||
H&G Entities | Customer relationship | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | 12,500,000 | ||||||||
H&G Entities | Trademarks and trade names | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | 31,400,000 | ||||||||
H&G Entities | Technology, Formulations and Recipes | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | $ 56,200,000 | ||||||||
Aurora | |||||||||
Business Acquisition [Line Items] | |||||||||
Accounts receivable | $ 6,967,000 | ||||||||
Inventories | 11,031,000 | ||||||||
Prepaid expenses and other current assets | 1,086,000 | ||||||||
Property and equipment | 37,991,000 | ||||||||
Operating lease right-of-use assets | 0 | ||||||||
Other assets | 0 | ||||||||
Accounts payable | (4,360,000) | ||||||||
Accrued expenses and other current liabilities | (768,000) | ||||||||
Current portion of lease liabilities | 0 | ||||||||
Current portion of long-term debt | 0 | ||||||||
Long-term deferred tax liabilities | 0 | ||||||||
Long-term lease liabilities | 0 | ||||||||
Long-term debt | 0 | ||||||||
Other long-term liabilities | (3,840,000) | ||||||||
Net identifiable assets | 48,107,000 | ||||||||
Identifiable intangible assets | 84,324,000 | ||||||||
Goodwill | 46,440,000 | ||||||||
Total purchase price allocation | 178,871,000 | ||||||||
Aurora | Other intangible assets | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | 824,000 | ||||||||
Aurora | Customer relationship | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | 6,400,000 | ||||||||
Aurora | Trademarks and trade names | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | 59,100,000 | ||||||||
Aurora | Technology, Formulations and Recipes | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | $ 18,000,000 | ||||||||
Greenstar | |||||||||
Business Acquisition [Line Items] | |||||||||
Accounts receivable | $ 982,000 | ||||||||
Inventories | 8,728,000 | ||||||||
Prepaid expenses and other current assets | 447,000 | ||||||||
Property and equipment | 1,717,000 | ||||||||
Operating lease right-of-use assets | 2,736,000 | ||||||||
Other assets | 176,000 | ||||||||
Accounts payable | (777,000) | ||||||||
Accrued expenses and other current liabilities | (1,421,000) | ||||||||
Current portion of lease liabilities | (624,000) | ||||||||
Current portion of long-term debt | 0 | ||||||||
Long-term deferred tax liabilities | 0 | ||||||||
Long-term lease liabilities | (1,836,000) | ||||||||
Long-term debt | 0 | ||||||||
Other long-term liabilities | 0 | ||||||||
Net identifiable assets | 10,128,000 | ||||||||
Identifiable intangible assets | 23,383,000 | ||||||||
Goodwill | 50,009,000 | ||||||||
Total purchase price allocation | 83,520,000 | ||||||||
Greenstar | Other intangible assets | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | 383,000 | ||||||||
Greenstar | Customer relationship | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | 11,100,000 | ||||||||
Greenstar | Trademarks and trade names | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | 9,100,000 | ||||||||
Greenstar | Technology, Formulations and Recipes | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | $ 2,800,000 | ||||||||
IGE Entities | |||||||||
Business Acquisition [Line Items] | |||||||||
Accounts receivable | $ 2,367,000 | ||||||||
Inventories | 30,592,000 | ||||||||
Prepaid expenses and other current assets | 470,000 | ||||||||
Property and equipment | 4,274,000 | ||||||||
Operating lease right-of-use assets | 4,447,000 | ||||||||
Other assets | 0 | ||||||||
Accounts payable | (21,686,000) | ||||||||
Accrued expenses and other current liabilities | (859,000) | ||||||||
Current portion of lease liabilities | (815,000) | ||||||||
Current portion of long-term debt | (482,000) | ||||||||
Long-term deferred tax liabilities | (6,769,000) | ||||||||
Long-term lease liabilities | (3,116,000) | ||||||||
Long-term debt | (1,434,000) | ||||||||
Other long-term liabilities | 0 | ||||||||
Net identifiable assets | 6,989,000 | ||||||||
Identifiable intangible assets | 26,530,000 | ||||||||
Goodwill | 27,383,000 | ||||||||
Total purchase price allocation | 60,902,000 | ||||||||
IGE Entities | Other intangible assets | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | 2,430,000 | ||||||||
IGE Entities | Customer relationship | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | 6,300,000 | ||||||||
IGE Entities | Trademarks and trade names | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | 14,000,000 | ||||||||
IGE Entities | Technology, Formulations and Recipes | |||||||||
Business Acquisition [Line Items] | |||||||||
Identifiable intangible assets | $ 3,800,000 |
BUSINESS COMBINATIONS - Pro For
BUSINESS COMBINATIONS - Pro Forma (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Pro Forma Information: | |
Net sales | $ 596 |
Net income | $ 66 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS, NET - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||
Balance at December 31, 2021 | $ 204,868 | $ 0 |
Goodwill, Foreign Currency Translation Gain (Loss) | (1,172) | |
Goodwill impairment | 189,572 | 0 |
Balance at December 31, 2022 | 0 | 204,868 |
Field 16, LLC (Heavy 16) | ||
Goodwill [Roll Forward] | ||
Acquisitions | 18,204 | |
H&G Entities | ||
Goodwill [Roll Forward] | ||
Acquisitions | 49,707 | |
Aurora | ||
Goodwill [Roll Forward] | ||
Acquisitions | 46,433 | |
Greenstar | ||
Goodwill [Roll Forward] | ||
Acquisitions | 43,009 | |
Goodwill, measurement period adjustments | (7,000) | |
IGE Entities | ||
Goodwill [Roll Forward] | ||
Acquisitions | $ 48,687 | |
Goodwill, measurement period adjustments | (21,304) | |
All others | ||
Goodwill [Roll Forward] | ||
Goodwill, measurement period adjustments | $ (992) |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS, NET - Intangible Assets, net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 359,716 | $ 223,025 |
Accumulated Amortization | (62,151) | (29,099) |
Total | 297,565 | 193,926 |
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 362,517 | 343,918 |
Total | 300,366 | 314,819 |
Trade Names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,801 | 120,773 |
Other intangible assets | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 0 | 120 |
Computer software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 9,408 | 8,814 |
Accumulated Amortization | (7,976) | (7,208) |
Total | 1,432 | 1,606 |
Customer relationship | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 99,933 | 101,222 |
Accumulated Amortization | (24,533) | (16,517) |
Total | 75,400 | 84,705 |
Technology, formulations and recipes | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 114,187 | 110,561 |
Accumulated Amortization | (15,344) | (3,630) |
Total | 98,843 | 106,931 |
Other intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,778 | 2,428 |
Accumulated Amortization | (4,246) | (1,744) |
Total | 532 | 684 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 131,410 | 0 |
Accumulated Amortization | (10,052) | 0 |
Total | $ 121,358 | $ 0 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS, NET - Estimated Useful Lives and Weighted Average Amortization Period of Finite-lived Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Computer software | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 5 years |
Minimum | Customer relationship | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 7 years |
Minimum | Technology, formulations and recipes | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 8 years |
Minimum | Trademarks and trade names | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 15 years |
Maximum | Customer relationship | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 18 years |
Maximum | Technology, formulations and recipes | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 12 years |
Maximum | Trademarks and trade names | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 20 years |
Weighted Average | Computer software | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, weighted-average amortization period | 3 years |
Weighted Average | Customer relationship | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, weighted-average amortization period | 11 years |
Weighted Average | Technology, formulations and recipes | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, weighted-average amortization period | 10 years |
Weighted Average | Trademarks and trade names | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, weighted-average amortization period | 18 years |
GOODWILL AND INTANGIBLE ASSET_6
GOODWILL AND INTANGIBLE ASSETS, NET - Narrative (Details) | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) acquisition | Jun. 30, 2022 USD ($) | Aug. 03, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 0 | $ 204,868,000 | $ 0 | $ 0 | |
Amortization expense | $ 33,308,000 | $ 10,354,000 | |||
Number of businesses acquired | acquisition | 5 | ||||
Greenstar | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Acquisitions | $ 43,009,000 | ||||
Goodwill | $ 50,009,000 | ||||
Computer software | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived intangible asset, useful life | 5 years |
GOODWILL AND INTANGIBLE ASSET_7
GOODWILL AND INTANGIBLE ASSETS, NET - Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 24,525 | |
2024 | 24,418 | |
2025 | 24,348 | |
2026 | 23,968 | |
Thereafter | 200,306 | |
Total | $ 297,565 | $ 193,926 |
EARNINGS (LOSS) PER COMMON SH_3
EARNINGS (LOSS) PER COMMON SHARE (“EPS”) - Calculation for Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Net (loss) income | $ (285,415) | $ 13,416 |
Weighted-average shares of common stock outstanding for basic net income (loss) per share attributable to common stockholders (in shares) | 44,974,856 | 39,991,809 |
Dilutive effect of warrants using the treasury stock method (in shares) | 0 | 1,395,393 |
Weighted-average shares of common stock outstanding for diluted net income per share attributable to common stockholders (in shares) | 44,974,856 | 42,989,195 |
Basic net income (loss) per share attributable to common stockholders (in dollars per share) | $ (6.35) | $ 0.34 |
Diluted net income (loss) per share attributable to common stockholders (in dollars per share) | $ (6.35) | $ 0.31 |
Restricted stock units | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Dilutive effect of share-based payments using the treasury stock method (in shares) | 0 | 1,068,984 |
Stock options | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Dilutive effect of share-based payments using the treasury stock method (in shares) | 0 | 533,009 |
EARNINGS (LOSS) PER COMMON SH_4
EARNINGS (LOSS) PER COMMON SHARE (“EPS”) - Shares Outstanding (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Shares subject to (in shares) | 44,974,856 | 42,989,195 |
EARNINGS (LOSS) PER COMMON SH_5
EARNINGS (LOSS) PER COMMON SHARE (“EPS”) - Antidilutive (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Warrant | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive effect of share-based payments using the treasury stock method (in shares) | 0 | 1,899,435 |
Shares subject to (in shares) | 17,669 | 17,817 |
Performance Stock Unit (PSUs) and Restricted Stock Units (RSUs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive effect of share-based payments using the treasury stock method (in shares) | 0 | 1,311,914 |
Shares subject to (in shares) | 1,088,879 | 71,871 |
Share-Based Payment Arrangement, Options Outstanding | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive effect of share-based payments using the treasury stock method (in shares) | 0 | 831,517 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive effect of share-based payments using the treasury stock method (in shares) | 0 | 533,009 |
Shares subject to (in shares) | 670,026 | 10,641 |
ACCOUNTS RECEIVABLE, NET AND _3
ACCOUNTS RECEIVABLE, NET AND INVENTORIES - Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Trade accounts receivable | $ 18,204 | $ 35,511 |
Allowance for doubtful accounts | (1,556) | (1,156) |
Other receivables | 579 | 7,129 |
Total accounts receivable, net | $ 17,227 | $ 41,484 |
ACCOUNTS RECEIVABLE, NET AND _4
ACCOUNTS RECEIVABLE, NET AND INVENTORIES - Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Finished goods | $ 83,134 | $ 145,298 |
Work-in-process | 5,403 | 5,967 |
Raw materials | 38,558 | 41,399 |
Allowance for inventory obsolescence | (15,697) | (3,530) |
Total inventories | $ 111,398 | $ 189,134 |
LEASES - Balance Sheet (Details
LEASES - Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leased assets | ||
Operating lease right-of-use assets | $ 65,265 | $ 45,245 |
Finance lease assets | 2,005 | 2,365 |
Total leased assets | 67,270 | 47,610 |
Finance leases | ||
Current, operating leases | 9,099 | 7,198 |
Current, finance leases | $ 704 | $ 739 |
Current, finance leases [Extensible Enumeration] | Current portion of long-term debt | Current portion of long-term debt |
Noncurrent, operating leases | $ 56,299 | $ 38,595 |
Noncurrent, finance leases | $ 1,200 | $ 1,628 |
Noncurrent, finance leases [Extensible Enumeration] | Long-term debt - net of discount and deferred financing costs of $5,142 and $6,025 as of December 31, 2022, and December 31, 2021, respectively | Long-term debt - net of discount and deferred financing costs of $5,142 and $6,025 as of December 31, 2022, and December 31, 2021, respectively |
Total lease liabilities | $ 67,302 | $ 48,160 |
LEASES - Income and Costs (Deta
LEASES - Income and Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | ||
Operating lease costs | $ 11,484 | $ 6,664 |
Interest on lease liabilities | 61 | 33 |
Sublease income | (1,533) | (277) |
Selling, General and Administrative Expenses | ||
Lessee, Lease, Description [Line Items] | ||
Amortization of lease assets | 285 | 291 |
Cost of goods sold | ||
Lessee, Lease, Description [Line Items] | ||
Amortization of lease assets | $ 327 | $ 0 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Option to extend lease term | 10 years | |
Short-term and month-to-month lease expense | $ 341 | $ 2,268 |
Operating lease, other cost | $ 2,573 | $ 1,957 |
LEASES - Future Minimum Lease P
LEASES - Future Minimum Lease Payment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating | ||
2023 | $ 11,463 | |
2024 | 11,043 | |
2025 | 10,466 | |
2026 | 9,180 | |
2027 | 8,941 | |
Thereafter | 25,016 | |
Total rental payments | 76,109 | |
Less portion representing interest | 10,711 | |
Total principal | 65,398 | |
Current, operating leases | 9,099 | $ 7,198 |
Long-term portion | 56,299 | 38,595 |
Finance | ||
2023 | 760 | |
2024 | 634 | |
2025 | 481 | |
2026 | 63 | |
2027 | 69 | |
Thereafter | 0 | |
Total rental payments | 2,007 | |
Less portion representing interest | 103 | |
Total principal | 1,904 | 2,367 |
Current, finance leases | 704 | 739 |
Long-term portion | $ 1,200 | $ 1,628 |
LEASES - Weighted-Average (Deta
LEASES - Weighted-Average (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Weighted-average remaining lease term in years, operating lease | 7 years 1 month 6 days | 6 years 9 months 18 days |
Weighted-average remaining lease term in years, finance lease | 3 years 1 month 6 days | 3 years 6 months |
Weighted-average discount rate, operating lease | 4% | 3.32% |
Weighted-average discount rate, finance lease | 3.63% | 4.62% |
LEASES - Cash Flow (Details)
LEASES - Cash Flow (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ (9,035) | $ (5,675) |
Operating cash flows from finance leases | (61) | (33) |
Financing cash flows from finance leases | $ (756) | $ (302) |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Gross property, plant, and equipment | $ 66,055 | $ 58,764 |
Less: accumulated depreciation | (14,920) | (8,291) |
Total property, plant and equipment, net | 51,135 | 50,473 |
Depreciation, depletion and amortization | 8,219 | 4,580 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant, and equipment | 27,832 | 25,177 |
Peat bogs and related development | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant, and equipment | 10,761 | 8,686 |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant, and equipment | 9,920 | 9,510 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant, and equipment | 6,107 | 6,120 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant, and equipment | 3,921 | 2,867 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant, and equipment | 3,337 | 3,197 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant, and equipment | $ 4,177 | $ 3,207 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued compensation and benefits | $ 2,522 | $ 3,713 |
Freight, custom and duty accrual | 1,022 | 2,094 |
Goods in transit accrual | 1,172 | 3,473 |
Income tax accrual | 451 | 729 |
Contingent consideration | 0 | 17,034 |
Other accrued liabilities | 8,041 | 6,953 |
Total accrued expenses and other current liabilities | $ 13,208 | $ 33,996 |
DEBT - Components (Details)
DEBT - Components (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Debt | $ 120,672 | $ 121,780 |
Current portion of long-term debt | 2,011 | 2,263 |
Long-term debt - net of discount and deferred financing costs of $5,142 and $6,025 as of December 31, 2022, and December 31, 2021, respectively | 118,661 | 119,517 |
Total debt | 120,672 | 121,780 |
Unamortized discount and deferred financing costs | 5,142 | 6,025 |
Term loan | ||
Debt Instrument [Line Items] | ||
Debt | 118,608 | 118,975 |
Unamortized discount and deferred financing costs | 5,142 | 6,025 |
Other debt | ||
Debt Instrument [Line Items] | ||
Debt | $ 2,064 | $ 2,805 |
DEBT - Term Loans (Details)
DEBT - Term Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 25, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 123,910 | ||
Term loan | Level 2 | Carrying Amount | |||
Debt Instrument [Line Items] | |||
Debt | $ 123,750 | $ 125,000 | |
Secured Debt | Senior Term Loan | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 125,000 | ||
Debt instrument, call premium rate, year one | 2% | ||
Debt instrument, call premium rate, year two | 1% | ||
Debt instrument, call premium rate, after year two | 0% | ||
Deferred financing costs | $ 6,190 | ||
Debt instrument, interest rate during period | 8.30% | ||
Interest expense, debt | $ 10,331 | ||
Amortization of deferred financing costs | $ 883 | ||
Debt instrument, quarterly payment, principal outstanding, percentage | 0.25% | ||
Secured Debt | Senior Term Loan | LIBOR | |||
Debt Instrument [Line Items] | |||
Debt instrument, floor on variable rate | 1% | ||
Debt instrument, basis spread on variable rate | 5.50% | ||
Secured Debt | Senior Term Loan | Alternative Base Rate | |||
Debt Instrument [Line Items] | |||
Debt instrument, floor on variable rate | 2% | ||
Debt instrument, basis spread on variable rate | 4.50% |
DEBT - Revolving Asset-backed C
DEBT - Revolving Asset-backed Credit Facilities (Details) | 12 Months Ended | |||||
Aug. 31, 2021 USD ($) | Mar. 29, 2021 USD ($) | Jul. 11, 2019 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 22, 2022 USD ($) | |
Debt Instrument [Line Items] | ||||||
Debt | $ 120,672,000 | $ 121,780,000 | ||||
Loss on debt extinguishment or modification | 145,000 | 680,000 | ||||
Total principal | 1,904,000 | 2,367,000 | ||||
Loans and borrowings | 160,000 | 438,000 | ||||
JPMorgan Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 100,000,000 | $ 75,000,000 | ||||
Loss on debt modification | 145,000 | |||||
Unamortized deferred financing costs | 580,000 | |||||
Line of credit facility, remaining borrowing capacity | $ 40,000,000 | 40,000,000 | ||||
Excess availability threshold | 10% | |||||
Revolving Asset-baked Credit Facility | JPMorgan Credit Facility | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, term | 3 years | |||||
Line of credit facility, maximum borrowing capacity | $ 50,000,000 | |||||
Covenant , minimum fixed charge coverage ratio multiplier | 1.1 | |||||
Covenant , minimum fixed charge coverage ratio, term | 12 months | |||||
Higher fixed charge coverage ratio multiplier | 1.15 | |||||
Line of credit facility, unused capacity, commitment fee percentage | 0.25% | |||||
Debt | $ 0 | 0 | ||||
Revolving Asset-baked Credit Facility | JPMorgan Credit Facility | Revolving Credit Facility | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.95% | |||||
Debt instrument, floor on variable rate | 0% | |||||
Revolving Asset-baked Credit Facility | Encina Obligors | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 45,000,000 | |||||
Line of credit facility, unused capacity, commitment fee percentage | 0.50% | |||||
Debt instrument, payment due, period before scheduled maturity date | 90 days | |||||
Debt instrument, default, interest rate, increase (decrease) | 2% | |||||
Interest expense, debt | $ 82,000 | |||||
Revolving Asset-baked Credit Facility | Encina Obligors | Canada | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 15,000,000 | |||||
Revolving Asset-baked Credit Facility | Encina Obligors | LIBOR | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 3.75% | |||||
Revolving Asset-baked Credit Facility | Encina Obligors | LIBOR | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 5.50% | |||||
Revolving Asset-baked Credit Facility | Encina Obligors | Base Rate | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 3.75% | |||||
Revolving Asset-baked Credit Facility | Encina Obligors | Base Rate | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 5.50% | |||||
Bridge Loan | Encina Obligors | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 2,000,000 |
DEBT - Future Principal Payment
DEBT - Future Principal Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 1,307 |
2024 | 1,269 |
2025 | 1,269 |
2026 | 1,269 |
2027 | 1,270 |
Thereafter | 117,526 |
Total debt | $ 123,910 |
DEBT - Future Principal Payme_2
DEBT - Future Principal Payments Reconciliation (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Finance | ||
Current, finance leases | $ 704 | $ 739 |
Noncurrent, finance leases | 1,200 | 1,628 |
Total principal | 1,904 | $ 2,367 |
Debt | ||
Current portion of long-term debt | 1,307 | |
Long-term debt | 122,603 | |
Total debt | 123,910 | |
Current portion of long-term debt | 2,011 | |
Long-term debt | 123,803 | |
Total payments due | $ 125,814 |
STOCKHOLDERS_ EQUITY - Narrativ
STOCKHOLDERS’ EQUITY - Narrative (Details) $ / shares in Units, $ in Thousands | 7 Months Ended | 12 Months Ended | ||
Jul. 19, 2021 $ / shares shares | Jul. 18, 2021 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) vote $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Class of Warrant or Right [Line Items] | ||||
Common stock, shares outstanding (in shares) | shares | 45,197,249 | 44,618,357 | ||
Common stock, shares authorized (in shares) | shares | 300,000,000 | 300,000,000 | ||
Exercise price (in dollars per share) | $ / shares | $ 11.30 | $ 11.27 | ||
Proceeds from exercises of investor warrants | $ | $ 0 | $ 56,778 | ||
Selling, General and Administrative Expenses | ||||
Class of Warrant or Right [Line Items] | ||||
Warrant solicitation fee expense | $ | $ 1,949 | |||
Common Stock | ||||
Class of Warrant or Right [Line Items] | ||||
Number of votes per common share | vote | 1 | |||
Investor Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Redemption price (in dollars per share) | $ / shares | $ 0.00033712 | |||
Exercise price (in dollars per share) | $ / shares | $ 16.86 | |||
Warrants exercised (in shares) | shares | 1,491 | 3,367,647 | ||
Proceeds from exercises of investor warrants | $ | $ 56,778 | |||
Warrant solicitation fee expense, percentage of net cash proceeds solicited by placement agents on certain warrants following call for redemption | 5% | |||
Investor Warrants | Common Stock | ||||
Class of Warrant or Right [Line Items] | ||||
Number of securities called by each warrant or right (in shares) | shares | 0.5 | |||
Number of consecutive trading days prior to notice of redemption | 20 days | |||
Investor Warrants | Common Stock | Minimum | ||||
Class of Warrant or Right [Line Items] | ||||
Share price (in dollars per share) | $ / shares | $ 25.28 |
STOCKHOLDERS_ EQUITY - Outstand
STOCKHOLDERS’ EQUITY - Outstanding Warrants (Details) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Class of Warrant or Right [Line Items] | ||
Warrants outstanding (in shares) | 17,669 | 17,817 |
Exercise price (in dollars per share) | $ 11.30 | $ 11.27 |
Investor Warrants, Placement Agents, $8.43 | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding (in shares) | 11,662 | 11,810 |
Exercise price (in dollars per share) | $ 8.43 | $ 8.43 |
Investor Warrants, Placement Agents, $16.86 | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding (in shares) | 6,007 | 6,007 |
Exercise price (in dollars per share) | $ 16.86 | $ 16.86 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2021 shares | Nov. 30, 2020 USD ($) shares | Dec. 31, 2022 USD ($) plan tranche shares | Dec. 31, 2021 USD ($) shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of equity plans maintained | plan | 3 | |||
Compensation expense | $ | $ 3,180 | |||
Intrinsic value of options exercised | $ | $ 82 | $ 7,448 | ||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of options vested | $ | 309 | 412 | ||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ | 361 | 440 | ||
Cost not yet recognized, amount | $ | $ 407 | |||
Cost not yet recognized, period for recognition | 1 year 3 months 14 days | |||
Vesting period | 10 years | |||
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ | $ 7,638 | 4,566 | ||
Shares withheld for payroll taxes related to vesting of restricted stock units (in shares) | shares | 247,979 | |||
Shares issued for share based compensation arrangements (in shares) | shares | 818,489 | |||
Tax withholding obligation, share based compensation | $ | $ 2,461 | $ 9 | ||
Vested (in shares) | shares | 148,315 | 824,846 | ||
Unvested (in shares) | shares | 992,633 | 1,087,608 | ||
Granted (in shares) | shares | 785,486 | |||
Vested in period, fair value | $ | $ 7,628 | $ 6,090 | ||
Cost not yet recognized, amount | $ | $ 5,920 | |||
Cost not yet recognized, period for recognition | 1 year 3 months 10 days | |||
Deferred (in shares) | shares | 6,357 | |||
Restricted stock units with performance based vesting conditions on a qualifying liquidity event | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unvested (in shares) | shares | 0 | 111,236 | ||
PSU | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ | $ 355 | |||
Unvested (in shares) | shares | 96,246 | 0 | ||
Granted (in shares) | shares | 116,113 | |||
Cost not yet recognized, amount | $ | $ 101 | |||
2020 Employee, Director, and Consultant Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares available for grant (in shares) | shares | 1,340,129 | |||
Capital shares reserved for future issuance (in shares) | shares | 2,284,053 | |||
Percentage of outstanding stock maximum | 4% | |||
Purchase price of common stock, percent | 100% | |||
Expiration period | 10 years | 1 year | ||
2020 Employee, Director, and Consultant Equity Incentive Plan | Share-Based Payment Arrangement, Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period | 1 year | |||
2020 Employee, Director, and Consultant Equity Incentive Plan | Restricted stock units | Share-Based Payment Arrangement, Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period | 3 years | |||
2020 Employee, Director, and Consultant Equity Incentive Plan | Restricted stock units | Share-Based Payment Arrangement, Tranche Three | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting tranches | tranche | 3 |
STOCK-BASED COMPENSATION - RSU
STOCK-BASED COMPENSATION - RSU Activity (Details) - Restricted stock units - $ / shares | 1 Months Ended | 12 Months Ended |
Jul. 31, 2021 | Dec. 31, 2022 | |
Number of RSUs | ||
Balance, beginning (in shares) | 1,087,608 | |
Granted (in shares) | 785,486 | |
Vested (in shares) | (148,315) | (824,846) |
Forfeited (in shares) | (55,615) | |
Balance, ending (in shares) | 992,633 | |
Weighted average grant date fair value | ||
Balance, beginning (in dollars per shares) | $ 9.71 | |
Granted (in dollars per share) | 9.62 | |
Vested (in dollars per share) | 9.25 | |
Forfeited (in dollars per share) | 35.54 | |
Balance, ending (in dollars shares) | $ 8.57 |
STOCK-BASED COMPENSATION - PSU
STOCK-BASED COMPENSATION - PSU Activity (Details) - PSU | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Number of RSUs | |
Balance, beginning (in shares) | shares | 0 |
Granted (in shares) | shares | 116,113 |
Forfeited (in shares) | shares | (19,867) |
Balance, ending (in shares) | shares | 96,246 |
Weighted average grant date fair value | |
Balance, beginning (in dollars per shares) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 15.74 |
Forfeited (in dollars per share) | $ / shares | 15.74 |
Balance, ending (in dollars shares) | $ / shares | $ 15.74 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Option Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number | ||
Balance, outstanding, beginning (in shares) | 720,549 | |
Granted (in shares) | 4,250 | |
Exercised (in shares) | (8,283) | |
Cancelled (in shares) | (8,720) | |
Forfeited (in shares) | (37,770) | |
Balance, outstanding, ending (in shares) | 670,026 | 720,549 |
Exercisable (in shares) | 599,439 | |
Vested and expected to vest (in shares) | 670,026 | |
Weighted average exercise price | ||
Balance, outstanding, beginning (in dollars per share) | $ 9.57 | |
Granted (in dollars per share) | 13.12 | |
Exercised (in dollars per share) | 9.01 | |
Cancelled (in dollars per share) | 9.33 | |
Forfeited (in dollars per share) | 11.42 | |
Balance, outstanding, ending (in dollars per share) | 9.50 | $ 9.57 |
Exercisable (in dollars per share) | 8.90 | |
Vested and expected to vest (in dollars per share) | 9.50 | |
Weighted average grant date fair value | ||
Balance, outstanding, beginning (in dollars per share) | 2.21 | |
Granted (in dollars per share) | 12.95 | |
Exercised (in dollars per share) | 2.12 | |
Cancelled (in dollars per share) | 3.27 | |
Forfeited (in dollars per share) | 7.20 | |
Balance, outstanding, ending (in dollars per share) | 2.05 | $ 2.21 |
Exercisable (in dollars per share) | 1.46 | |
Vested and expected to vest (in dollars per share) | $ 2.05 | |
Weighted average remaining contractual term (years) | ||
Outstanding, term | 5 years 3 months | 7 years 4 months 13 days |
Exercisable, term | 5 years | |
Vested and expected to vest, term | 5 years 3 months |
STOCK-BASED COMPENSATION - Unve
STOCK-BASED COMPENSATION - Unvested Stock Option Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number | ||
Granted (in shares) | 4,250 | |
Weighted average grant date fair value | ||
Granted (in dollars per share) | $ 12.95 | |
Forfeited (in dollars per share) | $ 7.20 | |
Stock options | ||
Number | ||
Balance, outstanding, beginning (in shares) | 202,515 | |
Granted (in shares) | 4,250 | |
Vested (in shares) | (98,408) | |
Forfeited (in shares) | (37,770) | |
Balance, outstanding, ending (in shares) | 70,587 | 202,515 |
Stock options | Minimum | ||
Weighted average grant date fair value | ||
Balance, outstanding, beginning (in dollars per share) | $ 5.04 | |
Granted (in dollars per share) | 12.95 | $ 25.58 |
Vested (in dollars per share) | 3.14 | |
Balance, outstanding, ending (in dollars per share) | $ 7.02 | $ 5.04 |
STOCK-BASED COMPENSATION - Assu
STOCK-BASED COMPENSATION - Assumptions (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average exercise price of common stock underlying the options (in dollars per share) | $ 13.12 | |
Dividend yield | 0% | |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average exercise price of common stock underlying the options (in dollars per share) | $ 13.12 | $ 59.03 |
Volatility | 200% | 45% |
Risk-free rate | 2.80% | 0.85% |
Dividend yield | 0% | 0% |
Expected term in years | 6 years | 6 years |
INCOME TAXES - Loss From Contin
INCOME TAXES - Loss From Continuing Operations Before Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
United States | $ (235,215) | $ (9,262) |
Foreign | (56,643) | 3,541 |
Loss before tax | $ (291,858) | $ (5,721) |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income Tax (Benefit) Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | ||
Federal | $ 0 | $ 0 |
State | 100 | 72 |
Foreign | 2,767 | 1,787 |
Total current expense | 2,867 | 1,859 |
Deferred: | ||
Federal | (8,689) | (18,275) |
State | (2,980) | (1,962) |
Foreign | 2,359 | (759) |
Total deferred benefit | (9,310) | (20,996) |
Total income tax benefit | $ (6,443) | $ (19,137) |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal tax benefit at statutory rate | $ (61,290) | $ (1,201) |
State income taxes, net | 422 | 68 |
Permanent items | 3,785 | 542 |
Goodwill impairment | 23,170 | 0 |
Global intangible low-taxed income | 0 | 972 |
Foreign rate differential | (443) | 1,032 |
162(m) officers compensation | 1,010 | 6,969 |
Share-based compensation | 26 | (8,118) |
Deferred adjustments | 770 | 67 |
Transaction costs | 0 | 2,290 |
Other, net | 2,410 | (973) |
Valuation allowance | 23,697 | (20,785) |
Total income tax benefit | $ (6,443) | $ (19,137) |
INCOME TAXES - Deferred Income
INCOME TAXES - Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets | ||
Lease liabilities | $ 17,079 | $ 11,714 |
Accrued expenses | 1,453 | 1,215 |
Share-based compensation | 865 | 460 |
Intangible assets | 2,110 | 0 |
Net operating loss | 31,425 | 19,543 |
Inventories | 6,346 | 4,948 |
Interest expense | 4,183 | 2,154 |
Other | 1,130 | 1,243 |
Deferred tax assets | 64,591 | 41,277 |
Valuation allowance | (39,293) | (14,892) |
Total deferred tax assets | 25,298 | 26,385 |
Deferred tax liabilities | ||
Intangible assets | 0 | (17,526) |
Property, plant and equipment | (10,216) | (2,518) |
Operating lease right-of-use assets | (17,767) | (11,579) |
Total deferred tax liabilities | (27,983) | (31,623) |
Net deferred tax liability | (2,685) | (5,238) |
Other long-term assets - deferred tax assets | 0 | 393 |
Long-term deferred tax liabilities | $ (2,685) | $ (5,631) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards, not subject to expiration | $ 93,400 | |
Federal | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards | 107,100 | $ 74,900 |
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 107,100 | 74,900 |
State | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards | 80,800 | 56,900 |
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 80,800 | 56,900 |
Foreign | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards | 15,900 | 1,000 |
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 15,900 | $ 1,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES, AND RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Operating lease, expense | $ 9,751 | $ 5,660 |
Petaluma, California | ||
Related Party Transaction [Line Items] | ||
Operating lease, expense | $ 639 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Jul. 01, 2021 | May 03, 2021 | |
Assets | ||||
Cash and cash equivalents | $ 21,291 | $ 26,607 | ||
Restricted cash | 0 | 1,777 | ||
Liabilities | ||||
Change in fair value of contingent consideration | (1,560) | (2,610) | ||
Impairment loss | 2,636 | |||
Note receivable | 475 | 3,111 | ||
Heavy 16 | ||||
Liabilities | ||||
Contingent consideration | $ 344 | |||
Change in fair value of contingent consideration | 144 | |||
Aurora | ||||
Liabilities | ||||
Contingent consideration | $ 19,300 | |||
Change in fair value of contingent consideration | 1,560 | 2,466 | ||
Carrying Amount | Heavy 16 | ||||
Liabilities | ||||
Contingent consideration | 0 | 200 | ||
Carrying Amount | Aurora | ||||
Liabilities | ||||
Contingent consideration | 0 | 16,834 | ||
Carrying Amount | Level 2 | Term Loan | ||||
Liabilities | ||||
Debt | 123,750 | 125,000 | ||
Carrying Amount | Level 3 | Other debt | ||||
Liabilities | ||||
Debt | 2,064 | 2,805 | ||
Estimated Fair Value | Heavy 16 | ||||
Liabilities | ||||
Contingent consideration | 0 | 200 | ||
Estimated Fair Value | Aurora | ||||
Liabilities | ||||
Contingent consideration | 0 | 16,834 | ||
Estimated Fair Value | Level 1 | ||||
Assets | ||||
Cash and cash equivalents | 21,291 | 26,607 | ||
Restricted cash | 0 | 1,777 | ||
Estimated Fair Value | Level 2 | Term Loan | ||||
Liabilities | ||||
Debt | 105,188 | 121,250 | ||
Estimated Fair Value | Level 3 | Other debt | ||||
Liabilities | ||||
Debt | $ 2,064 | $ 2,805 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Eugene Property - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2037 | Dec. 31, 2023 | Jan. 31, 2023 | |
Forecast | |||
Subsequent Event [Line Items] | |||
Rent expense | $ 964 | $ 731 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Initial purchase price, sale leaseback transaction | $ 8,598 | ||
Term of contract | 15 years |