COVER PAGE
COVER PAGE - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 05, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-38880 | |
Entity Registrant Name | Whole Earth Brands, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 38-4101973 | |
Entity Address, Address Line One | 125 S. Wacker Drive | |
Entity Address, Address Line Two | Suite 1250 | |
Entity Address, City or Town | Chicago | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60606 | |
City Area Code | 312 | |
Local Phone Number | 840-6000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 41,973,680 | |
Entity Central Index Key | 0001753706 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Trading Symbol | FREE | |
Security Exchange Name | NASDAQ | |
Warrant | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Warrants to purchase one-half of one share of common stock | |
Trading Symbol | FREEW | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 27,621 | $ 28,296 |
Accounts receivable (net of allowances of $1,383 and $1,285, respectively) | 72,112 | 69,590 |
Inventories | 228,074 | 212,930 |
Prepaid expenses and other current assets | 10,356 | 7,585 |
Total current assets | 338,163 | 318,401 |
Property, Plant and Equipment, net | 57,087 | 58,503 |
Other Assets | ||
Operating lease right-of-use assets | 23,365 | 26,444 |
Goodwill | 237,238 | 242,661 |
Other intangible assets, net | 253,484 | 266,939 |
Deferred tax assets, net | 2,006 | 1,993 |
Other assets | 9,335 | 7,638 |
Total Assets | 920,678 | 922,579 |
Current Liabilities | ||
Accounts payable | 57,624 | 55,182 |
Accrued expenses and other current liabilities | 24,498 | 30,733 |
Contingent consideration payable | 0 | 54,113 |
Current portion of operating lease liabilities | 8,308 | 7,950 |
Current portion of long-term debt | 3,750 | 3,750 |
Total current liabilities | 94,180 | 151,728 |
Non-Current Liabilities | ||
Long-term debt | 432,314 | 383,484 |
Warrant liabilities | 394 | 2,053 |
Deferred tax liabilities, net | 32,190 | 35,090 |
Operating lease liabilities, less current portion | 18,652 | 22,575 |
Other liabilities | 13,604 | 13,778 |
Total Liabilities | 591,334 | 608,708 |
Commitments and Contingencies (Note 8) | 0 | 0 |
Stockholders’ Equity | ||
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding at June 30, 2022 and December 31, 2021 | 0 | 0 |
Common stock, $0.0001 par value; 220,000,000 shares authorized; 41,973,680 and 38,871,646 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively | 4 | 4 |
Additional paid-in capital | 359,095 | 330,616 |
Accumulated deficit | (22,384) | (26,436) |
Accumulated other comprehensive income (loss) | (7,371) | 9,687 |
Total stockholders’ equity | 329,344 | 313,871 |
Total Liabilities and Stockholders’ Equity | $ 920,678 | $ 922,579 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Accounts receivable, allowances | $ 1,383 | $ 1,285 |
Stockholders’ Equity | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 220,000,000 | 220,000,000 |
Common stock, shares issued (in shares) | 41,973,680 | 38,871,646 |
Common stock, shares outstanding (in shares) | 41,973,680 | 38,871,646 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Product revenues, net | $ 133,503 | $ 126,493 | $ 264,095 | $ 232,318 |
Cost of goods sold | 96,189 | 85,138 | 187,223 | 155,312 |
Gross profit | 37,314 | 41,355 | 76,872 | 77,006 |
Selling, general and administrative expenses | 24,960 | 27,828 | 52,748 | 60,735 |
Amortization of intangible assets | 4,664 | 4,706 | 9,369 | 8,857 |
Restructuring and other expenses | 0 | 2,846 | 0 | 4,503 |
Operating income | 7,690 | 5,975 | 14,755 | 2,911 |
Change in fair value of warrant liabilities | 193 | (241) | 1,054 | (2,603) |
Interest expense, net | (6,428) | (6,396) | (12,460) | (11,474) |
Loss on extinguishment and debt transaction costs | 0 | 0 | 0 | (5,513) |
Other income, net | 697 | 190 | 2,653 | 500 |
Income (loss) before income taxes | 2,152 | (472) | 6,002 | (16,179) |
Provision (benefit) for income taxes | 826 | (4,167) | 1,950 | (7,849) |
Net income (loss) | $ 1,326 | $ 3,695 | $ 4,052 | $ (8,330) |
Net earnings (loss) per share: | ||||
Basic (in dollars per share) | $ 0.03 | $ 0.10 | $ 0.10 | $ (0.22) |
Diluted (in dollars per share) | $ 0.03 | $ 0.09 | $ 0.10 | $ (0.22) |
Revenue from Contract with Customer, Product and Service [Extensible List] | Product [Member] | Product [Member] | Product [Member] | Product [Member] |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 1,326 | $ 3,695 | $ 4,052 | $ (8,330) |
Other comprehensive income (loss), net of tax: | ||||
Net change in pension benefit obligations recognized, net of taxes of $6, $(13), $(66) and $(13), respectively | 17 | (46) | (207) | (37) |
Foreign currency translation adjustments | (14,848) | 5,322 | (16,851) | 3,275 |
Total other comprehensive income (loss), net of tax | (14,831) | 5,276 | (17,058) | 3,238 |
Comprehensive income (loss) | $ (13,505) | $ 8,971 | $ (13,006) | $ (5,092) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net change in pension benefit obligations recognized, tax | $ 6 | $ (13) | $ (66) | $ (13) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Restatement adjustment | Common Stock | Additional Paid-in Capital | Additional Paid-in Capital Restatement adjustment | Accumulated Deficit | Accumulated Deficit Restatement adjustment | Accumulated Other Comprehensive Income |
Beginning balance at Dec. 31, 2020 | $ 308,846 | $ (8,139) | $ 4 | $ 325,679 | $ (7,062) | $ (25,442) | $ (1,077) | $ 8,605 |
Beginning balance (in shares) at Dec. 31, 2020 | 38,426,669 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Transfer of Private Warrants to Public Warrants | 2,502 | 2,502 | ||||||
Net income (loss) | (12,025) | (12,025) | ||||||
Other comprehensive income (loss), net of tax | (2,038) | (2,038) | ||||||
Stock-based compensation | 1,639 | 1,639 | ||||||
Ending balance at Mar. 31, 2021 | 290,785 | $ 4 | 322,758 | (38,544) | 6,567 | |||
Ending balance (in shares) at Mar. 31, 2021 | 38,426,669 | |||||||
Beginning balance at Dec. 31, 2020 | 308,846 | $ (8,139) | $ 4 | 325,679 | $ (7,062) | (25,442) | $ (1,077) | 8,605 |
Beginning balance (in shares) at Dec. 31, 2020 | 38,426,669 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | (8,330) | |||||||
Other comprehensive income (loss), net of tax | 3,238 | |||||||
Ending balance at Jun. 30, 2021 | 302,148 | $ 4 | 325,150 | (34,849) | 11,843 | |||
Ending balance (in shares) at Jun. 30, 2021 | 38,455,759 | |||||||
Beginning balance at Mar. 31, 2021 | 290,785 | $ 4 | 322,758 | (38,544) | 6,567 | |||
Beginning balance (in shares) at Mar. 31, 2021 | 38,426,669 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 3,695 | 3,695 | ||||||
Other comprehensive income (loss), net of tax | 5,276 | 5,276 | ||||||
Stock-based compensation | 2,392 | 2,392 | ||||||
Net share settlements of stock-based awards (in shares) | 29,090 | |||||||
Ending balance at Jun. 30, 2021 | 302,148 | $ 4 | 325,150 | (34,849) | 11,843 | |||
Ending balance (in shares) at Jun. 30, 2021 | 38,455,759 | |||||||
Beginning balance at Dec. 31, 2021 | 313,871 | $ 4 | 330,616 | (26,436) | 9,687 | |||
Beginning balance (in shares) at Dec. 31, 2021 | 38,871,646 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Transfer of Private Warrants to Public Warrants | 605 | 605 | ||||||
Net income (loss) | 2,726 | 2,726 | ||||||
Other comprehensive income (loss), net of tax | (2,227) | (2,227) | ||||||
Stock-based compensation | 1,354 | 1,354 | ||||||
Net share settlements of stock-based awards | (291) | (291) | ||||||
Net share settlements of stock-based awards (in shares) | 146,444 | |||||||
Shares issued for payment of contingent consideration | 23,936 | 23,936 | ||||||
Shares issued for contingent consideration (in shares) | 2,659,574 | |||||||
Ending balance at Mar. 31, 2022 | 339,974 | $ 4 | 356,220 | (23,710) | 7,460 | |||
Ending balance (in shares) at Mar. 31, 2022 | 41,677,664 | |||||||
Beginning balance at Dec. 31, 2021 | 313,871 | $ 4 | 330,616 | (26,436) | 9,687 | |||
Beginning balance (in shares) at Dec. 31, 2021 | 38,871,646 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 4,052 | |||||||
Other comprehensive income (loss), net of tax | (17,058) | |||||||
Ending balance at Jun. 30, 2022 | 329,344 | $ 4 | 359,095 | (22,384) | (7,371) | |||
Ending balance (in shares) at Jun. 30, 2022 | 41,973,680 | |||||||
Beginning balance at Mar. 31, 2022 | 339,974 | $ 4 | 356,220 | (23,710) | 7,460 | |||
Beginning balance (in shares) at Mar. 31, 2022 | 41,677,664 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 1,326 | 1,326 | ||||||
Other comprehensive income (loss), net of tax | (14,831) | (14,831) | ||||||
Stock-based compensation | 1,564 | 1,564 | ||||||
Net share settlements of stock-based awards | (91) | (91) | ||||||
Net share settlements of stock-based awards (in shares) | 92,253 | |||||||
Net share settlements under management bonus plan | 1,402 | 1,402 | ||||||
Net shares issued under management bonus plan (in shares) | 203,763 | |||||||
Ending balance at Jun. 30, 2022 | $ 329,344 | $ 4 | $ 359,095 | $ (22,384) | $ (7,371) | |||
Ending balance (in shares) at Jun. 30, 2022 | 41,973,680 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating activities | ||
Net income (loss) | $ 4,052 | $ (8,330) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Stock-based compensation | 3,214 | 4,464 |
Depreciation | 2,916 | 2,120 |
Amortization of intangible assets | 9,369 | 8,857 |
Deferred income taxes | (1,857) | 808 |
Amortization of inventory fair value adjustments | (2,537) | 1,727 |
Non-cash loss on extinguishment of debt | 0 | 4,435 |
Change in fair value of warrant liabilities | (1,054) | 2,603 |
Changes in current assets and liabilities: | ||
Accounts receivable | (4,785) | (4,891) |
Inventories | (16,800) | (8,142) |
Prepaid expenses and other current assets | (1,017) | 762 |
Accounts payable, accrued liabilities and income taxes | (1,741) | (14,895) |
Other, net | (1,783) | 1,028 |
Net cash used in operating activities | (12,023) | (9,454) |
Investing activities | ||
Capital expenditures | (4,440) | (4,624) |
Acquisitions, net of cash acquired | 0 | (186,601) |
Proceeds from the sale of fixed assets | 50 | 4,257 |
Net cash used in investing activities | (4,390) | (186,968) |
Financing activities | ||
Proceeds from revolving credit facility | 50,000 | 25,000 |
Repayments of revolving credit facility | 0 | (47,855) |
Long-term borrowings | 0 | 375,000 |
Repayments of long-term borrowings | (1,875) | (137,438) |
Debt issuance costs | (672) | (11,589) |
Payment of contingent consideration | (29,108) | 0 |
Tax withholdings related to net share settlements of stock awards | (862) | 0 |
Net cash provided by financing activities | 17,483 | 203,118 |
Effect of exchange rate changes on cash and cash equivalents | (1,745) | 460 |
Net change in cash and cash equivalents | (675) | 7,156 |
Cash and cash equivalents, beginning of period | 28,296 | 16,898 |
Cash and cash equivalents, end of period | 27,621 | 24,054 |
Supplemental disclosure of cash flow information | ||
Interest paid | 11,511 | 10,037 |
Taxes paid, net of refunds | 5,757 | 4,364 |
Supplemental disclosure of non-cash investing | ||
Non-cash capital expenditures | $ 0 | $ 3,554 |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2022 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1: BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Whole Earth Brands, Inc. and its consolidated subsidiaries (“Whole Earth Brands” or the “Company”) is a global industry-leading platform, focused on the “better for you” consumer packaged goods (“CPG”) and ingredients space. The Company has a global platform of branded products and ingredients, focused on the consumer transition towards natural alternatives and clean label products. On June 24, 2020, Act II Global Acquisition Corp., a Cayman Islands exempted company (“Act II”), domesticated into a Delaware corporation (the “Domestication”), and on June 25, 2020 (the “Closing”), consummated the indirect acquisition (the “Business Combination”) of (i) all of the issued and outstanding equity interests of Merisant Company (“Merisant”), Merisant Luxembourg Sarl (“Merisant Luxembourg”), Mafco Worldwide LLC (“Mafco Worldwide”), Mafco Shanghai LLC (“Mafco Shanghai”), EVD Holdings LLC (“EVD Holdings”), and Mafco Deutschland GmbH (together with Merisant, Merisant Luxembourg, Mafco Worldwide, Mafco Shanghai, and EVD Holdings, and their respective direct and indirect subsidiaries, “Merisant and Mafco Worldwide”), and (ii) certain assets and liabilities of Merisant and Mafco Worldwide included in the Transferred Assets and Liabilities (as defined in the Purchase Agreement (as hereafter defined)), from Flavors Holdings Inc. (“Flavors Holdings”), MW Holdings I LLC (“MW Holdings I”), MW Holdings III LLC (“MW Holdings III”), and Mafco Foreign Holdings, Inc. (“Mafco Foreign Holdings,” and together with Flavors Holdings, MW Holdings I, and MW Holdings III, the “Sellers”), pursuant to that certain Purchase Agreement (the “Purchase Agreement”) entered into by and among Act II and the Sellers dated as of December 19, 2019, as amended. In connection with the Domestication, Act II changed its name to “Whole Earth Brands, Inc.” Upon the completion of the Domestication, each of Act II’s then-issued and outstanding ordinary shares converted, on a one-for-one basis, into shares of common stock of Whole Earth Brands. In conjunction with the Business Combination, the Company issued an aggregate of 7,500,000 shares of Whole Earth Brands common stock and 5,263,500 private placement warrants (the “Private Warrants”) exercisable for 2,631,750 shares of Whole Earth Brands common stock to certain investors. On the date of Closing, the Company’s common stock and warrants began trading on The Nasdaq Stock Market under the symbols “FREE” and “FREEW,” respectively. As a result of the Business Combination, for accounting purposes, Act II was deemed to be the acquirer and Mafco Worldwide and Merisant Company were deemed to be the acquired parties. Basis of Presentation —The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial reporting. The balance sheet data as of December 31, 2021 was derived from the audited consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated and combined financial statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K. In the opinion of management, the financial statements contain all adjustments necessary to state fairly the financial position of the Company as of June 30, 2022 and the results of operations and cash flows for all periods presented. All adjustments in the accompanying unaudited condensed consolidated financial statements, which management believes are necessary to state fairly the financial position, results of operations and cash flows, have been reflected and are of a normal recurring nature. Results of operations for interim periods are not necessarily indicative of results to be expected for the full year. Principles of Consolidation —The condensed consolidated financial statements include the accounts of Whole Earth Brands, Inc., and its indirect and wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates. Recently Adopted Accounting Pronouncements — The Company qualifies as an emerging growth company (an “EGC”) and as such, has elected the extended transition period for complying with certain new or revised accounting pronouncements. During the extended transition period, the Company is not subject to certain new or revised accounting standards applicable to public companies. The accounting pronouncements pending adoption below reflect effective dates for the Company as an EGC with the extended transition period. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Accounting Standards Codification “ASC” 740) - Simplifying the Accounting for Income Taxes.” The standard enhances and simplifies various aspects of the income tax accounting guidance. For public entities, the standard is effective for annual periods and interim periods beginning after December 15, 2020. This standard is effective for the Company as an EGC for the fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company adopted this standard on January 1, 2022. The adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (“LIBOR”) by the end of 2021. The amendments in ASU 2020-04 apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The new standard was effective upon issuance and upon adoption can be applied prospectively to applicable contract modifications made on or before December 31, 2022. The Company adopted this standard during the second quarter of 2022. The adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements. Accounting Standards Not Yet Adopted —In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326).” The standard requires entities to estimate losses on financial assets measured at amortized cost, including trade receivables, debt securities and loans, using an expected credit loss model. The expected credit loss differs from the previous incurred losses model primarily in that the loss recognition threshold of “probable” has been eliminated and that expected loss should consider reasonable and supportable forecasts in addition to the previously considered past events and current conditions. Additionally, the guidance requires additional disclosures related to the further disaggregation of information related to the credit quality of financial assets by year of the asset’s origination for as many as five years. Entities must apply the standard provision as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. This standard is effective for the Company as an EGC for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. The Company is currently evaluating the impact of adopting ASU 2016-13 on its consolidated financial statements. Restructuring and Employee Termination Benefits —During 2020, the Company adopted restructuring plans to streamline processes and realize cost savings by consolidating facilities and eliminating various positions in operations and general and administrative areas. In connection with the restructuring plans, the Company recognized restructuring and other expenses of $2.8 million and $4.5 million for the three and six months ended June 30, 2021, primarily consisting of facility exit and other related costs. During the six months ended June 30, 2022, the Company paid employee termination benefits of $0.2 million. The Company had accrued severance expense related to the restructuring plans of $0.6 million and $0.8 million at June 30, 2022 and December 31, 2021, respectively, which is recorded in accrued expenses and other current liabilities in its unaudited condensed consolidated balance sheets. Warrant Liabilities —The Company accounts for the Private Warrants in accordance with ASC Topic 815, “Derivatives and Hedging.” Under the guidance contained in ASC Topic 815-40, the Private Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Private Warrants as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. The liability is subject to re-measurement at each balance sheet date, and any change in fair value is recognized in the Company’s statement of operations. The Private Warrants are valued using a Black-Scholes option pricing model. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 6 Months Ended |
Jun. 30, 2022 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | NOTE 2: BUSINESS COMBINATIONS Wholesome Acquisition —On December 17, 2020, the Company entered into a stock purchase agreement (the “Wholesome Purchase Agreement”) with WSO Investments, Inc. (“WSO Investments” and together with its subsidiaries, “Wholesome” and affiliates). WSO Investments is the direct parent of its wholly-owned subsidiary Wholesome Sweeteners, Incorporated, which was formed to import, market, distribute, and sell organic sugars, unrefined specialty sugars, and related products. Wholesome is included within the Company’s Branded CPG reportable segment. Wholesome’s results are included in the Company’s consolidated statement of operations from the date of acquisition. On February 5, 2021, pursuant to the terms of the Wholesome Purchase Agreement, the Company purchased and acquired all of the issued and outstanding shares of capital stock for an initial cash purchase price of $180 million plus up to an additional $55 million (the “Earn-Out Amount”) upon the satisfaction of certain post-closing financial metrics. Subject to the terms and conditions of the Wholesome Purchase Agreement payment of the Earn-Out Amount, in whole or in part, was subject to Wholesome achieving certain EBITDA thresholds at or above approximately $30 million during the period beginning August 29, 2020, and ending December 31, 2021 (the “Earn-Out Period”). A portion of the Earn-Out Amount (up to $27.5 million) could be paid, at the Company’s election, in freely tradeable, registered shares of Company common stock calculated using the 20-day volume weighted average trading price per share as of the date of determination. Calculation of the achievement of the Earn-Out Amount was subject to certain adjustments more thoroughly described in the Wholesome Purchase Agreement. In connection with the acquisition of Wholesome, the Company incurred transaction-related costs of $0.2 million in the three months ended June 30, 2021 and $0.2 million and $4.6 million in the six months ended June 30, 2022 and 2021, respectively. Following the completion of the Earn-Out Period, the Company determined, in accordance with the terms of the Purchase Agreement, that the sellers were entitled to receive the Earn-Out Amount in full. The Company elected to satisfy part of the Earn-Out Amount in common stock and on February 23, 2022, issued 2,659,574 shares of the Company’s common stock. The remaining $30 million portion of the $55 million Earn-Out Amount was paid in cash which was funded from available capacity under the Company’s revolving credit facility. The settlement of the earn-out resulted in a non-cash gain of $1.1 million that was recorded in the first quarter of 2022 which represents the difference in the value of the common stock issued using the 20-day volume weighted average trading price per share as compared to the trading price on the date of issuance. The following summarizes the purchase consideration (in thousands): Base cash consideration $ 180,000 Closing adjustment 13,863 Fair value of Earn-Out Amount 52,395 Total Purchase Price $ 246,258 The Company recorded the fair value of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed as follows (in thousands): Cash and cash equivalents $ 2,664 Accounts receivable 15,868 Inventories 76,879 Prepaid expenses and other current assets 1,322 Property, plant and equipment, net 3,134 Operating lease right-of-use assets 7,585 Intangible assets 104,500 Other assets 1,189 Total assets acquired 213,141 Accounts payable 5,251 Accrued expenses and other current liabilities 10,576 Current portion of operating lease liabilities 1,435 Operating lease liabilities, less current portion 6,150 Deferred tax liabilities, net 24,234 Total liabilities assumed 47,646 Net assets acquired 165,495 Goodwill 80,763 Total Purchase Price $ 246,258 The values allocated to identifiable intangible assets and their estimated useful lives are as follows: Identifiable intangible assets Fair Value (in thousands) Useful Life (in years) Customer relationships $ 55,700 10 Tradenames 48,800 25 $ 104,500 Goodwill represents the excess of the purchase price over the estimated fair value assigned to tangible and identifiable intangible assets acquired and liabilities assumed and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and expected future market opportunities. Of the purchase price allocated to goodwill, a total of $4.7 million will be deductible for income tax purposes pursuant to IRC Section 197 over a 9-year period. The Company’s allocation of purchase price was based upon valuations performed to determine the fair value of the net assets as of the acquisition date and was subject to adjustments for up to one year after the closing date of the acquisition to reflect final valuations. The allocation of purchase price was finalized in the first quarter of 2022. In 2021, the Company recorded measurement period adjustments to its initial allocation of purchase price as a result of ongoing valuation procedures on assets and liabilities assumed, including (i) an increase in purchase price of $3.6 million due to the finalization of the closing adjustment; (ii) a decrease to inventory of $1.8 million; (iii) an increase in prepaid expenses and other current assets of $0.5 million; (iv) an increase in property, plant and equipment of $0.4 million; (v) a decrease to intangible assets of $1.9 million; (vi) a decrease to other assets of $0.1 million; (vii) a decrease to accrued expenses and other current liabilities of $2.7 million; (viii) a decrease to deferred tax liabilities, net of $2.8 million; and (ix) an increase to goodwill of $1.0 million due to the incremental measurement period adjustments discussed in items (i) through (viii). The impact of measurement period adjustments to the results of operations was immaterial. The results of the Company’s operations for the three and six months ended June 30, 2021 include the results of Wholesome since February 5, 2021. Product revenues, net and operating income of Wholesome included in the Company’s condensed consolidated statement of operations for the three months ended June 30, 2021 was $44.6 million and $3.4 million, respectively, and for the six months ended June 30, 2021 was $72.2 million and $5.1 million, respectively. Pro Forma Financial Information —The following unaudited pro forma financial information summarizes the results of operations of the Company for the three and six months ended June 30, 2021 as though the Wholesome acquisition had occurred on January 1, 2020 (in thousands): Pro Forma Statement of Operations Three Months Ended Six Months Ended Revenue $ 126,493 $ 252,698 Net income $ 4,967 $ 1,105 The unaudited pro forma financial information does not assume any impacts from revenue, cost or other operating synergies that could be generated as a result of the acquisition. The unaudited pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved had the Wholesome acquisition been consummated on January 1, 2020. The pro forma financial information for the three and six months ended June 30, 2021 includes adjustments to reflect intangible asset amortization based on the economic values derived from definite-lived intangible assets, interest expense on the new debt financing, and the release of the inventory fair value adjustments into cost of goods sold. These adjustments are net of taxes. The results of the Company’s operations for the three and six months ended June 30, 2022 include Wholesome for the entire period and therefore pro forma financial information is not required. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 3: INVENTORIES Inventories consisted of the following (in thousands): June 30, 2022 December 31, 2021 Raw materials and supplies $ 134,536 $ 129,712 Work in process 2,974 1,480 Finished goods 90,564 81,738 Total inventories $ 228,074 $ 212,930 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 4: GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill and other intangible assets consisted of the following (in thousands): June 30, 2022 December 31, 2021 Gross Accumulated Net Gross Accumulated Net Other intangible assets subject to amortization Customer relationships (useful life of 5 to 10 years) $ 105,265 $ (20,232) $ 85,033 $ 106,013 $ (14,478) $ 91,535 Tradenames (useful life of 25 years) 169,727 (11,976) 157,751 173,522 (8,818) 164,704 Total $ 274,992 $ (32,208) 242,784 $ 279,535 $ (23,296) 256,239 Other intangible assets not subject to amortization Product formulations 10,700 10,700 Total other intangible assets, net 253,484 266,939 Goodwill 237,238 242,661 Total goodwill and other intangible assets $ 490,722 $ 509,600 At June 30, 2022 and December 31, 2021, goodwill at Branded CPG was $233.6 million and $238.9 million, respectively. Goodwill at Flavors & Ingredients was $3.7 million and $3.8 million at June 30, 2022 and December 31, 2021, respectively. The amortization expense for intangible assets was $4.7 million and $9.4 million for the three and six months ended June 30, 2022, respectively, and $4.7 million and $8.9 million for the three and six months ended June 30, 2021, respectively. Amortization expense relating to amortizable intangible assets as of June 30, 2022 for the next five years is expected to be as follows (in thousands): Remainder of 2022 $ 9,361 2023 18,721 2024 18,721 2025 18,488 2026 18,267 2027 17,040 |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 5: DEBT Debt consisted of the following (in thousands): June 30, 2022 December 31, 2021 Term loan, due February 2028 $ 370,313 $ 372,187 Revolving credit facility, due February 2026 75,000 25,000 Less: current portion (3,750) (3,750) Less: unamortized discount and debt issuance costs (9,249) (9,953) Total long-term debt $ 432,314 $ 383,484 At December 31, 2021, the Company’s senior secured loan agreement consisted of a senior secured term loan facility (the “Term Loan Facility”) of $375 million and a revolving credit facility of up to $75 million (the “Revolving Facility,” and together with the Term Loan Facility, the “Credit Facilities”). At December 31, 2021, there were $2.1 million of outstanding letters of credit that reduced the Company’s availability under the revolving credit facility. The Company’s unamortized discounts and debt issuance costs related to the Term Loan Facility and the Revolving Facility were $10.0 million and $1.8 million, respectively, at December 31, 2021. The unamortized debt issuance costs related to the Revolving Facility are included in other assets in the condensed consolidated balance sheet. See Note 7 to the Company’s consolidated and combined financial statements in its Annual Report on Form 10-K for the year ended December 31, 2021 for further information and significant terms and conditions associated with the Term Loan Facility and Revolving Facility. In connection with the closing of the Wholesome Transaction, on February 5, 2021, the Company and certain of its subsidiaries entered into an amendment and restatement agreement (the “Amended and Restated Agreement”) which amended and restated its then existing senior secured loan agreement dated as of June 25, 2020. As of the date of the Amended and Restated Agreement, the aggregate unamortized debt issuance costs totaled $6.2 million, of which $4.4 million was expensed as a loss on extinguishment of debt in the first quarter of 2021. Additionally, in connection with the Amended and Restated Credit Agreement, the Company paid fees to certain lenders of $3.8 million, which was considered a debt discount, all of which was deferred, and incurred transaction costs of $8.9 million, of which $7.8 million was deferred and $1.1 million was expensed as part of loss on extinguishment and debt transaction costs in the first quarter of 2021. As further described in Note 2, following the completion of the Wholesome Earn-Out Period, the Company determined, in accordance with the terms of the Purchase Agreement, that the sellers were entitled to receive the Earn-Out Amount in full. The Company elected to satisfy part of the Earn-Out Amount in common stock and on February 23, 2022, issued 2,659,574 shares of the Company’s common stock. The remaining $30 million portion of the $55 million Earn-Out Amount was paid in cash which was funded from available capacity under the Company’s revolving credit facility. On June 15, 2022, the Company and certain of its subsidiaries entered into a first amendment (the “Amendment”) to the Amended and Restated Agreement dated as of February 5, 2021. The Amendment increased the aggregate principal amount of the Revolving Credit Facility from $75 million to $125 million (the “Amended Revolving Credit Facility”) and transitioned from LIBOR to Secured Overnight Financing Rate (“SOFR”) as the benchmark for purposes of calculating interest for all loans outstanding under the Amended and Restated Credit Agreement. At the election of the Company, loans outstanding under the Amended and Restated Credit Agreement will accrue interest at a rate per annum equal to (i) term SOFR plus 0.10%, 0.15%, or 0.25% in case of, respectively, a one-month, three-month, or six-month interest period (“Adjusted Term SOFR”), or (ii) the greater of the prime rate, the federal funds effective rate plus 0.50%, and one-month Adjusted Term SOFR plus 1.00%, in each case plus the applicable margin which is equal to (i) with respect to Amended Revolving Credit Facility and letters of credit, (A) 2.75%, in the case of base rate advances, and (B) 3.75% in the case of SOFR advances, and (ii) with respect to the Term Loan Facility, (A) 3.50%, in the case of base rate advances, and (B) 4.50% in the case of SOFR advances. In connection with the Amendment, the Company paid fees and incurred transaction costs of $0.7 million, all of which was deferred. The transition to SOFR did not materially impact the interest rates applied to the Company’s borrowings. No other material changes were made to the terms of the Company’s Amended and Restated Agreement as a result of the Amendment. At June 30, 2022, the Company’s senior secured loan agreement consisted of the Term Loan Facility and the Amended Revolving Credit Facility. At June 30, 2022, there were $2.1 million of outstanding letters of credit that reduced the Company’s availability under the Amended Revolving Credit Facility. The Company’s unamortized discounts and debt issuance costs related to the Term Loan Facility and the Amended Revolving Credit Facility were $9.2 million and $2.2 million, respectively, at June 30, 2022. The unamortized debt issuance costs related to the Amended Revolving Credit Facility are included in other assets in the Company’s condensed consolidated balance sheets. |
WARRANTS
WARRANTS | 6 Months Ended |
Jun. 30, 2022 | |
Other Liabilities [Abstract] | |
WARRANTS | NOTE 6: WARRANTS As of the date of the Business Combination, the Company had approximately 20,263,500 warrants outstanding, consisting of (i) 15,000,000 public warrants originally sold as part of the units issued in Act II’s initial public offering (the “Public Warrants”) and (ii) 5,263,500 Private Warrants that were sold by Act II to the PIPE Investors in conjunction with the Business Combination (collectively with the Public Warrants, the “Warrants”). Each warrant is exercisable for one-half of one share of the Company’s common stock at a price of $11.50 per whole share, subject to adjustment. Warrants may only be exercised for a whole number of shares as no fractional shares will be issued. As of June 30, 2022 and December 31, 2021, the Company had 19,491,320 and 18,929,880 Public Warrants outstanding, respectively, and 771,980 and 1,333,420 Private Warrants outstanding, respectively. There were no Warrants exercised for shares of the Company’s common stock in the six months ended June 30, 2022 and 2021. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 7: FAIR VALUE OF FINANCIAL INSTRUMENTS The Company measures and records in its consolidated financial statements certain assets and liabilities at fair value. ASC Topic 820 “Fair Value Measurement and Disclosures,” establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). This hierarchy consists of the following three levels: • Level 1 – Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market. • Level 2 – Assets and liabilities whose values are based on inputs other than those included in Level 1, including quoted market prices in markets that are not active; quoted prices of assets or liabilities with similar attributes in active markets; or valuation models whose inputs are observable or unobservable but corroborated by market data. • Level 3 – Assets and liabilities whose values are based on valuation models or pricing techniques that utilize unobservable inputs that are significant to the overall fair value measurement. Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Current Assets and Other Financial Assets and Liabilities— Cash and cash equivalents, trade accounts receivable and trade accounts payable are measured at carrying value, which approximates fair value because of the short-term maturities of these instruments. Contingent Consideration Payable— The Company measured the contingent consideration payable at fair value. The fair value of the contingent consideration utilized Level 3 inputs as it is based on significant inputs not observable in the market as of December 31, 2021, such as projected financial information and discount rate. Debt— The Company measures its term loan and revolving facilities at original carrying value, net of unamortized deferred financing costs and fees. At June 30, 2022, the estimated fair value of the term loan was $349.9 million as compared to a carrying value of $361.1 million. At December 31, 2021, the estimated fair value of the term loan approximated the carrying value of $362.2 million. The estimated fair value of the outstanding principal balance of the term loan utilized Level 2 inputs as it is based on quoted market prices for identical or similar instruments. The fair value of the revolving facility at both June 30, 2022 and December 31, 2021 approximated carrying value. Warrant Liabilities— The Company classifies its Private Warrants as liabilities in accordance with ASC Topic 815. The Company estimates the fair value of the Private Warrants using a Black-Scholes options pricing model. The fair value of the Private Warrants utilized Level 3 inputs as it is based on significant inputs not observable in the market as of June 30, 2022 and December 31, 2021. The fair value of the Private Warrants was estimated at June 30, 2022 and December 31, 2021 using a Black-Scholes options pricing model and the following assumptions: Input June 30, 2022 December 31, 2021 Asset price $ 6.20 $ 10.74 Exercise price $ 11.50 $ 11.50 Risk-free interest rate 2.99% 1.04% Expected volatility 48.0% 41.0% Expected term (years) 2.99 3.49 Dividend yield 0.0% 0.0% The fair value of warrant liabilities as of June 30, 2022 was $0.4 million. The changes in the warrant liabilities during the six months ended June 30, 2022 were as follows (in thousands): Fair value of warrant liabilities as of December 31, 2021 $ 2,053 Transfer of Private Warrants to Public Warrants (605) Change in fair value of warrant liabilities in Q1 2022 (861) Fair value of warrant liabilities as of March 31, 2022 587 Change in fair value of warrant liabilities in Q2 2022 (193) Fair value of warrant liabilities as of June 30, 2022 $ 394 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8: COMMITMENTS AND CONTINGENCIES The Company is subject to various claims, pending and possible legal actions for product liability and other damages, and other matters arising out of the conduct of the business. The Company believes, based on current knowledge and consultation with counsel, that the outcome of such claims and actions will not have a material adverse effect on the Company’s condensed consolidated financial position or results of operations. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 9: INCOME TAXES The Company’s provision for income taxes consists of U.S., state and local, and foreign taxes. The Company has significant operations in various locations outside the U.S. The annual effective tax rate is a composite rate reflecting the earnings in the various locations at their applicable statutory tax rates. The Company’s income tax provision was $0.8 million for the three months ended June 30, 2022. The effective tax rate for the three months ended June 30, 2022 was an income tax provision of 38.4% on pre-tax income of $2.2 million which differs from the statutory federal rate of 21% primarily due to state and local taxes, non-deductible permanent differences, limited benefit on current year interest deductions and losses in certain jurisdictions, the change in the fair value of warrant liabilities, foreign income at different rates and the U.S. tax effect of international operations including Global Intangible Low-Taxed Income (“GILTI”) recorded during the period. The Company’s income tax provision was $2.0 million for the six months ended June 30, 2022. The effective tax rate for the six months ended June 30, 2022 was an income tax provision of 32.5% on pre-tax income of $6.0 million which differs from the statutory federal rate of 21% primarily due to state and local taxes, non-deductible permanent differences, limited benefit on current year interest deductions and losses in certain jurisdictions, the change in the fair value of warrant liabilities, foreign income at different rates and the U.S. tax effect of international operations including GILTI recorded during the period. The Company’s income tax benefit was $4.2 million for the three months ended June 30, 2021, which includes a discrete income tax benefit of $4.2 million related to the receipt of a beneficial tax ruling in Switzerland which allows for future amortization deductions, the reversal of uncertain tax position liabilities as a result of the lapse of applicable statute of limitations, partially offset by a deferred tax provision related to a tax law change in the United Kingdom which was enacted during the quarter ended June 30, 2021. The effective tax rate for the three months ended June 30, 2021 was an income tax benefit of 882.8% on a pre-tax loss of $0.5 million which differs from the statutory federal rate of 21% primarily due to these discrete tax items. The Company’s income tax benefit was $7.8 million for the six months ended June 30, 2021, which includes a discrete income tax benefit of $4.3 million including the $4.2 million benefit recorded in the three months ended June 30, 2021 described above. The effective tax rate for the six months ended June 30, 2021 was an income tax benefit of 48.5% on a pre-tax loss of $16.2 million. The effective tax rate differs from the federal rate of 21% primarily due to these discrete tax benefits. At both June 30, 2022 and December 31, 2021, the Company had an uncertain tax position liability of $0.2 million, including interest and penalties. The unrecognized tax benefits include amounts related primarily to various state and foreign tax issues. |
PENSION BENEFITS
PENSION BENEFITS | 6 Months Ended |
Jun. 30, 2022 | |
Retirement Benefits [Abstract] | |
PENSION BENEFITS | NOTE 10: PENSION BENEFITS Certain current and former employees of the Company are covered under a funded qualified defined benefit retirement plan. Plan provisions covering certain of the Company’s salaried employees generally provide pension benefits based on years of service and compensation. Plan provisions covering certain of the Company’s union members generally provide stated benefits for each year of credited service. The Company’s funding policy is to contribute annually the statutory required amount as actuarially determined. The Company froze the pension plan on December 31, 2019. In addition, the Company has unfunded non-qualified plans covering certain salaried employees with additional retirement benefits in excess of qualified plan limits imposed by federal tax law. The Company uses December 31 as a measurement date for the plans. In February 2021, the Compensation Committee approved the termination of the Company’s qualified defined benefit retirement plan at Flavors & Ingredients. During the fourth quarter of 2021, the Company offered the option of receiving a lump sum payment to certain participants with vested benefits in lieu of receiving monthly annuity payments. Approximately 125 participants elected to receive the settlement, and lump sum payments of approximately $16.8 million were paid from plan assets to these participants in December 2021. The benefit obligation settled approximated payments to plan participants and a pre-tax settlement gain of $0.5 million was recorded in the fourth quarter of 2021. On February 11, 2022, the Company purchased non-participating annuity contracts to settle the remaining liabilities of the plan for approximately $9.5 million which was fully funded by plan assets. The annuity contracts purchased resulted in a settlement gain of approximately $1.0 million that was recorded in the first quarter of 2022. The remaining surplus of the plan will be used, as prescribed in the applicable regulations, to fund future contributions to the defined contribution plan at Flavors & Ingredients. At June 30, 2022, the remaining surplus of the plan was approximately $2.6 million. The components of net periodic benefit cost (credit) for the Company’s defined benefit pension plans was as follows (in thousands): Three Months Ended Six Months Ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Service cost $ 10 $ 16 $ 20 $ 32 Interest cost 67 260 194 519 Expected return on plan assets 112 (400) 59 (799) Recognized actuarial loss — 9 — 18 Settlement gain (126) — (1,143) — Net periodic benefit cost (credit) $ 63 $ (115) $ (870) $ (230) Net periodic benefit cost (credit) is reflected in the Company’s condensed consolidated financial statements as follows (in thousands): Three Months Ended Six Months Ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Selling, general and administrative expense $ 10 $ 16 $ 20 $ 32 Other income, net 53 (131) (890) (262) Net periodic benefit cost (credit) $ 63 $ (115) $ (870) $ (230) |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 11: STOCK-BASED COMPENSATION On June 24, 2020, the Whole Earth Brands, Inc. 2020 Long-Term Incentive Plan (the “Plan”) was approved for the purpose of promoting the long-term financial interests and growth of the Company and its subsidiaries by attracting and retaining management and other personnel and key service providers. The Plan provides for the granting of stock options (“SOs”), stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance shares, performance share units (“PSUs”) and other stock-based awards to officers, employees and non-employee directors of, and certain other service providers to, the Company and its subsidiaries. These awards are settled in shares of the Company’s stock and therefore classified as equity awards. Under the terms of the Plan an aggregate of 9,300,000 shares of common stock are authorized for issuance under the Plan. RSUs generally vest ratably on the anniversary of the grant date over a period of one PSU awards generally cliff vest subsequent to the completion of a cumulative three-year performance period, depending on the period specified in each respective PSU agreement. The number of PSUs that ultimately vest depends on the Company’s performance relative to specified three-year cumulative financial targets established for each grant and are expected to be settled in stock. Stock-based compensation expense for the three and six months ended June 30, 2022 was $1.6 million and $3.2 million, respectively. Stock-based compensation expense for the three and six months ended June 30, 2021 was $2.8 million and $4.5 million, respectively. Stock-based compensation expense for the three and six months ended June 30, 2021 includes $0.4 million of expense related to 2021 management bonuses that were settled in stock during the second quarter of 2022. A summary of activity and weighted average fair values related to the RSUs is as follows: Six Months Ended June 30, 2022 Shares Weighted Average Grant Date Fair Value (per share) Outstanding at December 31, 2021 484,744 $ 13.46 Granted 548,521 7.32 Vested (188,759) 13.58 Forfeited (11,094) 12.79 Outstanding and nonvested at June 30, 2022 833,412 $ 9.40 A summary of activity and weighted average fair values related to the RSAs is as follows: Six Months Ended June 30, 2022 Shares Weighted Average Grant Date Fair Value (per share) Outstanding at December 31, 2021 117,801 $ 9.76 Granted 82,615 6.96 Vested (68,946) 8.34 Outstanding and nonvested at June 30, 2022 131,470 $ 8.75 A summary of activity and weighted average fair values related to the PSUs is as follows: Six Months Ended June 30, 2022 Shares Weighted Average Grant Date Fair Value (per share) Outstanding at December 31, 2021 282,141 $ 13.65 Granted 569,989 6.71 Forfeited (11,654) 12.89 Outstanding and nonvested at June 30, 2022 840,476 $ 8.95 As of June 30, 2022, the Company had not yet recognized compensation costs on nonvested awards as follows (in thousands): Unrecognized Compensation Cost Weighted Avg. Remaining Recognition Period (in years) Nonvested awards $ 13,848 1.93 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 12: EARNINGS PER SHARE Basic earnings (loss) per common share (“EPS”) is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Warrants issued are not considered outstanding at the date of issuance. RSUs and RSAs also are not considered outstanding until they have vested. Contingently issuable shares associated with outstanding PSUs that have cliff vesting based on achievement of a performance condition were not included in the earnings per share calculations for the periods presented as the applicable vesting conditions had not been satisfied. Diluted EPS is calculated by dividing net income (loss) by the weighted average shares outstanding assuming dilution. Dilutive common shares outstanding is computed using the treasury stock method and reflects the additional shares that would be outstanding if dilutive warrants were exercised and restricted stock units and restricted stock awards were settled for common shares during the period. For warrants that are liability-classified, during the periods when the impact would be dilutive, the Company assumes share settlement of the instruments as of the beginning of the reporting period and adjusts the numerator to remove the change in the fair value of warrant liability and adjusts the denominator to include the dilutive shares using the treasury stock method. The computation of basic and diluted earnings (loss) per common share is shown below (in thousands, except for share and per share data): Three Months Ended Six Months Ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 EPS numerator: Net income (loss) attributable to common shareholders $ 1,326 $ 3,695 $ 4,052 $ (8,330) EPS denominator: Weighted average shares outstanding - basic 41,918,403 38,458,278 40,973,101 38,444,590 Effect of dilutive securities — 1,697,471 26,578 — Weighted average shares outstanding - diluted 41,918,403 40,155,749 40,999,679 38,444,590 Net earnings (loss) per share: Basic $ 0.03 $ 0.10 $ 0.10 $ (0.22) Diluted $ 0.03 $ 0.09 $ 0.10 $ (0.22) For the three months ended June 30, 2022, 20,263,300 warrants, 833,412 RSUs, and 131,470 RSAs were excluded from the diluted EPS calculation because they were determined to be anti-dilutive. For the six months ended June 30, 2022, 20,263,300 warrants and 833,412 RSUs were excluded from the diluted EPS calculation because they were determined to be anti-dilutive. For the three months ended June 30, 2021, 415,896 warrants were excluded from the diluted EPS calculation because they were determined to be anti-dilutive. For the six months ended June 30, 2021, 20,263,500 warrants, 1,140,149 RSUs, and 68,946 RSAs were excluded from the diluted EPS calculation because they were determined to be anti-dilutive. Additionally, at June 30, 2022 and June 30, 2021, 840,476 and 322,533 PSUs, respectively, were excluded from the diluted EPS calculations because they are subject to performance conditions that were not satisfied. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 6 Months Ended |
Jun. 30, 2022 | |
AOCI Attributable to Parent [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 13: ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes accumulated other comprehensive income (loss) (“AOCI”), net of taxes, by component (in thousands): Net Currency Translation Gains (Losses) Funded Status of Total Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2020 $ 7,774 $ 831 $ 8,605 Other comprehensive loss before reclassifications (2,047) — (2,047) Amounts reclassified from AOCI — 9 9 Balance at March 31, 2021 5,727 840 6,567 Other comprehensive income (loss) before reclassifications 5,322 (55) 5,267 Amounts reclassified from AOCI — 9 9 Balance at June 30, 2021 $ 11,049 $ 794 $ 11,843 Balance at December 31, 2021 $ 8,758 $ 929 $ 9,687 Other comprehensive loss before reclassifications (2,003) — (2,003) Amounts reclassified from AOCI — (224) (224) Balance at March 31, 2022 6,755 705 7,460 Other comprehensive loss before reclassifications (14,848) — (14,848) Amounts reclassified from AOCI — 17 17 Balance at June 30, 2022 $ (8,093) $ 722 $ (7,371) |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 14: RELATED PARTY TRANSACTIONS In July 2020, the Company entered into an agreement with Watermill Institutional Trading LLC, a registered broker-dealer (“Watermill”), to act as one of the Company’s financial advisors for a 12-month period commencing July 22, 2020 for total consideration of $0.9 million, of which $0.2 million and $0.5 million was expensed during the three and six months ended June 30, 2021. Additionally, the Company incurred expense of $2.0 million during the six months ended June 30, 2021 related to services provided by Watermill in connection with the acquisition of Wholesome. A former director of Act II is a registered representative of Watermill and provided services directly to the Company under the agreement. In December 2019, Wholesome entered into a partnership agreement to form WS Services, LLC (“WS Services”). As of June 30, 2022, Wholesome had a 50% interest in the partnership and accounts for the partnership as an equity method investment. Wholesome’s investment in the partnership, which is classified as other assets in the condensed consolidated balance sheets, was $0.7 million as of both June 30, 2022 and December 31, 2021. Wholesome utilizes a warehouse leased by WS Services for storage of raw materials. During the three and six months ended June 30, 2022, the three months ended June 30, 2021, and the period from February 5, 2021 through June 30, 2021, Wholesome expensed $0.2 million, $0.5 million, $0.2 million, and $0.3 million, respectively, related to the use of the warehouse space. Wholesome recorded a payable to WS Services for $0.1 million and $0.3 million as of June 30, 2022 and December 31, 2021, respectively. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | NOTE 15: BUSINESS SEGMENTS The Company has two reportable segments: Branded CPG and Flavors & Ingredients. In addition, the Company’s corporate office functions are reported and included under Corporate. Corporate is not a reportable or operating segment but is included for reconciliation purposes and includes the costs for the corporate office administrative activities as well as transaction-related and other costs. The Company does not present assets by reportable segments as they are not reviewed by the Chief Operating Decision Maker for purposes of assessing segment performance and allocating resources. The following table presents selected financial information relating to the Company’s business segments (in thousands): Three Months Ended Six Months Ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Product revenues, net Branded CPG $ 104,073 $ 99,095 $ 207,834 $ 180,892 Flavors & Ingredients 29,430 27,398 56,261 51,426 Total product revenues, net $ 133,503 $ 126,493 $ 264,095 $ 232,318 Operating income (loss) Branded CPG $ 5,577 $ 10,258 $ 12,037 $ 20,417 Flavors & Ingredients 9,023 3,738 16,850 4,710 14,600 13,996 28,887 25,127 Corporate (6,910) (8,021) (14,132) (22,216) Total operating income (loss) $ 7,690 $ 5,975 $ 14,755 $ 2,911 The following table presents disaggregated revenue information for the Company (in thousands): Three Months Ended Six Months Ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Branded CPG: North America $ 71,168 $ 66,444 $ 144,248 $ 118,414 Europe 18,248 20,524 36,256 39,938 India, Middle East and Africa 4,902 3,612 8,481 6,255 Asia-Pacific 5,981 5,594 12,043 10,820 Latin America 3,774 2,921 6,806 5,465 Flavors & Ingredients 29,430 27,398 56,261 51,426 Total product revenues, net $ 133,503 $ 126,493 $ 264,095 $ 232,318 |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation —The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial reporting. The balance sheet data as of December 31, 2021 was derived from the audited consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated and combined financial statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K. |
Principles of Consolidation | Principles of Consolidation —The condensed consolidated financial statements include the accounts of Whole Earth Brands, Inc., and its indirect and wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates. |
Recently Adopted Accounting Pronouncements and Accounting Standards Not Yet Adopted | Recently Adopted Accounting Pronouncements — The Company qualifies as an emerging growth company (an “EGC”) and as such, has elected the extended transition period for complying with certain new or revised accounting pronouncements. During the extended transition period, the Company is not subject to certain new or revised accounting standards applicable to public companies. The accounting pronouncements pending adoption below reflect effective dates for the Company as an EGC with the extended transition period. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Accounting Standards Codification “ASC” 740) - Simplifying the Accounting for Income Taxes.” The standard enhances and simplifies various aspects of the income tax accounting guidance. For public entities, the standard is effective for annual periods and interim periods beginning after December 15, 2020. This standard is effective for the Company as an EGC for the fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company adopted this standard on January 1, 2022. The adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (“LIBOR”) by the end of 2021. The amendments in ASU 2020-04 apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The new standard was effective upon issuance and upon adoption can be applied prospectively to applicable contract modifications made on or before December 31, 2022. The Company adopted this standard during the second quarter of 2022. The adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements. Accounting Standards Not Yet Adopted —In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326).” The standard requires entities to estimate losses on financial assets measured at amortized cost, including trade receivables, debt securities and loans, using an expected credit loss model. The expected credit loss differs from the previous incurred losses model primarily in that the loss recognition threshold of “probable” has been eliminated and that expected loss should consider reasonable and supportable forecasts in addition to the previously considered past events and current conditions. Additionally, the guidance requires additional disclosures related to the further disaggregation of information related to the credit quality of financial assets by year of the asset’s origination for as many as five years. Entities must apply the standard provision as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. This standard is effective for the Company as an EGC for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. The Company is currently evaluating the impact of adopting ASU 2016-13 on its consolidated financial statements. |
Restructuring and Employee Termination Benefits | Restructuring and Employee Termination Benefits —During 2020, the Company adopted restructuring plans to streamline processes and realize cost savings by consolidating facilities and eliminating various positions in operations and general and administrative areas. In connection with the restructuring plans, the Company recognized restructuring and other expenses of $2.8 million and $4.5 million for the three and six months ended June 30, 2021, primarily consisting of facility exit and other related costs. During the six months ended June 30, 2022, the Company paid employee termination benefits of $0.2 million. The Company had accrued severance expense related to the restructuring plans of $0.6 million and $0.8 million at June 30, 2022 and December 31, 2021, respectively, which is recorded in accrued expenses and other current liabilities in its unaudited condensed consolidated balance sheets. |
Warrant Liabilities | Warrant Liabilities—The Company accounts for the Private Warrants in accordance with ASC Topic 815, “Derivatives and Hedging.” Under the guidance contained in ASC Topic 815-40, the Private Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Private Warrants as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. The liability is subject to re-measurement at each balance sheet date, and any change in fair value is recognized in the Company’s statement of operations. The Private Warrants are valued using a Black-Scholes option pricing model. |
Fair Value Measurements | The Company measures and records in its consolidated financial statements certain assets and liabilities at fair value. ASC Topic 820 “Fair Value Measurement and Disclosures,” establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). This hierarchy consists of the following three levels: • Level 1 – Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market. • Level 2 – Assets and liabilities whose values are based on inputs other than those included in Level 1, including quoted market prices in markets that are not active; quoted prices of assets or liabilities with similar attributes in active markets; or valuation models whose inputs are observable or unobservable but corroborated by market data. • Level 3 – Assets and liabilities whose values are based on valuation models or pricing techniques that utilize unobservable inputs that are significant to the overall fair value measurement. Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Current Assets and Other Financial Assets and Liabilities— Cash and cash equivalents, trade accounts receivable and trade accounts payable are measured at carrying value, which approximates fair value because of the short-term maturities of these instruments. Contingent Consideration Payable— The Company measured the contingent consideration payable at fair value. The fair value of the contingent consideration utilized Level 3 inputs as it is based on significant inputs not observable in the market as of December 31, 2021, such as projected financial information and discount rate. Debt— The Company measures its term loan and revolving facilities at original carrying value, net of unamortized deferred financing costs and fees. At June 30, 2022, the estimated fair value of the term loan was $349.9 million as compared to a carrying value of $361.1 million. At December 31, 2021, the estimated fair value of the term loan approximated the carrying value of $362.2 million. The estimated fair value of the outstanding principal balance of the term loan utilized Level 2 inputs as it is based on quoted market prices for identical or similar instruments. The fair value of the revolving facility at both June 30, 2022 and December 31, 2021 approximated carrying value. Warrant Liabilities— The Company classifies its Private Warrants as liabilities in accordance with ASC Topic 815. The Company estimates the fair value of the Private Warrants using a Black-Scholes options pricing model. The fair value of the Private Warrants utilized Level 3 inputs as it is based on significant inputs not observable in the market as of June 30, 2022 and December 31, 2021. |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Business Combinations [Abstract] | |
Schedule of Purchase Consideration | The following summarizes the purchase consideration (in thousands): Base cash consideration $ 180,000 Closing adjustment 13,863 Fair value of Earn-Out Amount 52,395 Total Purchase Price $ 246,258 |
Summary of Preliminary Allocation of the Purchase Price to Tangible and Identifiable Intangible Assets Acquired and Liabilities Assumed | The Company recorded the fair value of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed as follows (in thousands): Cash and cash equivalents $ 2,664 Accounts receivable 15,868 Inventories 76,879 Prepaid expenses and other current assets 1,322 Property, plant and equipment, net 3,134 Operating lease right-of-use assets 7,585 Intangible assets 104,500 Other assets 1,189 Total assets acquired 213,141 Accounts payable 5,251 Accrued expenses and other current liabilities 10,576 Current portion of operating lease liabilities 1,435 Operating lease liabilities, less current portion 6,150 Deferred tax liabilities, net 24,234 Total liabilities assumed 47,646 Net assets acquired 165,495 Goodwill 80,763 Total Purchase Price $ 246,258 |
Summary of Preliminary Values Allocated to Identifiable Intangible Assets and Their Estimated Useful Lives | The values allocated to identifiable intangible assets and their estimated useful lives are as follows: Identifiable intangible assets Fair Value (in thousands) Useful Life (in years) Customer relationships $ 55,700 10 Tradenames 48,800 25 $ 104,500 |
Summary of Pro Forma Financial Information | The following unaudited pro forma financial information summarizes the results of operations of the Company for the three and six months ended June 30, 2021 as though the Wholesome acquisition had occurred on January 1, 2020 (in thousands): Pro Forma Statement of Operations Three Months Ended Six Months Ended Revenue $ 126,493 $ 252,698 Net income $ 4,967 $ 1,105 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories consisted of the following (in thousands): June 30, 2022 December 31, 2021 Raw materials and supplies $ 134,536 $ 129,712 Work in process 2,974 1,480 Finished goods 90,564 81,738 Total inventories $ 228,074 $ 212,930 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Components of Goodwill and Other Intangible Assets | Goodwill and other intangible assets consisted of the following (in thousands): June 30, 2022 December 31, 2021 Gross Accumulated Net Gross Accumulated Net Other intangible assets subject to amortization Customer relationships (useful life of 5 to 10 years) $ 105,265 $ (20,232) $ 85,033 $ 106,013 $ (14,478) $ 91,535 Tradenames (useful life of 25 years) 169,727 (11,976) 157,751 173,522 (8,818) 164,704 Total $ 274,992 $ (32,208) 242,784 $ 279,535 $ (23,296) 256,239 Other intangible assets not subject to amortization Product formulations 10,700 10,700 Total other intangible assets, net 253,484 266,939 Goodwill 237,238 242,661 Total goodwill and other intangible assets $ 490,722 $ 509,600 |
Schedule of Amortization Expense | Amortization expense relating to amortizable intangible assets as of June 30, 2022 for the next five years is expected to be as follows (in thousands): Remainder of 2022 $ 9,361 2023 18,721 2024 18,721 2025 18,488 2026 18,267 2027 17,040 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Components of Debt | Debt consisted of the following (in thousands): June 30, 2022 December 31, 2021 Term loan, due February 2028 $ 370,313 $ 372,187 Revolving credit facility, due February 2026 75,000 25,000 Less: current portion (3,750) (3,750) Less: unamortized discount and debt issuance costs (9,249) (9,953) Total long-term debt $ 432,314 $ 383,484 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Assumptions | The fair value of the Private Warrants was estimated at June 30, 2022 and December 31, 2021 using a Black-Scholes options pricing model and the following assumptions: Input June 30, 2022 December 31, 2021 Asset price $ 6.20 $ 10.74 Exercise price $ 11.50 $ 11.50 Risk-free interest rate 2.99% 1.04% Expected volatility 48.0% 41.0% Expected term (years) 2.99 3.49 Dividend yield 0.0% 0.0% |
Schedule of Changes in Fair Value of Warrants | The changes in the warrant liabilities during the six months ended June 30, 2022 were as follows (in thousands): Fair value of warrant liabilities as of December 31, 2021 $ 2,053 Transfer of Private Warrants to Public Warrants (605) Change in fair value of warrant liabilities in Q1 2022 (861) Fair value of warrant liabilities as of March 31, 2022 587 Change in fair value of warrant liabilities in Q2 2022 (193) Fair value of warrant liabilities as of June 30, 2022 $ 394 |
PENSION BENEFITS (Tables)
PENSION BENEFITS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Periodic Benefit Cost (Credit) and Net Periodic Benefit Costs | The components of net periodic benefit cost (credit) for the Company’s defined benefit pension plans was as follows (in thousands): Three Months Ended Six Months Ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Service cost $ 10 $ 16 $ 20 $ 32 Interest cost 67 260 194 519 Expected return on plan assets 112 (400) 59 (799) Recognized actuarial loss — 9 — 18 Settlement gain (126) — (1,143) — Net periodic benefit cost (credit) $ 63 $ (115) $ (870) $ (230) Net periodic benefit cost (credit) is reflected in the Company’s condensed consolidated financial statements as follows (in thousands): Three Months Ended Six Months Ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Selling, general and administrative expense $ 10 $ 16 $ 20 $ 32 Other income, net 53 (131) (890) (262) Net periodic benefit cost (credit) $ 63 $ (115) $ (870) $ (230) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Activity Related to RSUs, RSAs and PSUs | A summary of activity and weighted average fair values related to the RSUs is as follows: Six Months Ended June 30, 2022 Shares Weighted Average Grant Date Fair Value (per share) Outstanding at December 31, 2021 484,744 $ 13.46 Granted 548,521 7.32 Vested (188,759) 13.58 Forfeited (11,094) 12.79 Outstanding and nonvested at June 30, 2022 833,412 $ 9.40 A summary of activity and weighted average fair values related to the RSAs is as follows: Six Months Ended June 30, 2022 Shares Weighted Average Grant Date Fair Value (per share) Outstanding at December 31, 2021 117,801 $ 9.76 Granted 82,615 6.96 Vested (68,946) 8.34 Outstanding and nonvested at June 30, 2022 131,470 $ 8.75 A summary of activity and weighted average fair values related to the PSUs is as follows: Six Months Ended June 30, 2022 Shares Weighted Average Grant Date Fair Value (per share) Outstanding at December 31, 2021 282,141 $ 13.65 Granted 569,989 6.71 Forfeited (11,654) 12.89 Outstanding and nonvested at June 30, 2022 840,476 $ 8.95 |
Schedule of Unrecognized Compensation Cost on Nonvested Awards | As of June 30, 2022, the Company had not yet recognized compensation costs on nonvested awards as follows (in thousands): Unrecognized Compensation Cost Weighted Avg. Remaining Recognition Period (in years) Nonvested awards $ 13,848 1.93 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings (Loss) Per Common Share | The computation of basic and diluted earnings (loss) per common share is shown below (in thousands, except for share and per share data): Three Months Ended Six Months Ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 EPS numerator: Net income (loss) attributable to common shareholders $ 1,326 $ 3,695 $ 4,052 $ (8,330) EPS denominator: Weighted average shares outstanding - basic 41,918,403 38,458,278 40,973,101 38,444,590 Effect of dilutive securities — 1,697,471 26,578 — Weighted average shares outstanding - diluted 41,918,403 40,155,749 40,999,679 38,444,590 Net earnings (loss) per share: Basic $ 0.03 $ 0.10 $ 0.10 $ (0.22) Diluted $ 0.03 $ 0.09 $ 0.10 $ (0.22) |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
AOCI Attributable to Parent [Abstract] | |
Summary of Changes in the Components of Accumulated Other Comprehensive Income (Loss), Net of Tax | The following table summarizes accumulated other comprehensive income (loss) (“AOCI”), net of taxes, by component (in thousands): Net Currency Translation Gains (Losses) Funded Status of Total Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2020 $ 7,774 $ 831 $ 8,605 Other comprehensive loss before reclassifications (2,047) — (2,047) Amounts reclassified from AOCI — 9 9 Balance at March 31, 2021 5,727 840 6,567 Other comprehensive income (loss) before reclassifications 5,322 (55) 5,267 Amounts reclassified from AOCI — 9 9 Balance at June 30, 2021 $ 11,049 $ 794 $ 11,843 Balance at December 31, 2021 $ 8,758 $ 929 $ 9,687 Other comprehensive loss before reclassifications (2,003) — (2,003) Amounts reclassified from AOCI — (224) (224) Balance at March 31, 2022 6,755 705 7,460 Other comprehensive loss before reclassifications (14,848) — (14,848) Amounts reclassified from AOCI — 17 17 Balance at June 30, 2022 $ (8,093) $ 722 $ (7,371) |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Selected Financial Information Relating to the Business' Reportable Segments | The following table presents selected financial information relating to the Company’s business segments (in thousands): Three Months Ended Six Months Ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Product revenues, net Branded CPG $ 104,073 $ 99,095 $ 207,834 $ 180,892 Flavors & Ingredients 29,430 27,398 56,261 51,426 Total product revenues, net $ 133,503 $ 126,493 $ 264,095 $ 232,318 Operating income (loss) Branded CPG $ 5,577 $ 10,258 $ 12,037 $ 20,417 Flavors & Ingredients 9,023 3,738 16,850 4,710 14,600 13,996 28,887 25,127 Corporate (6,910) (8,021) (14,132) (22,216) Total operating income (loss) $ 7,690 $ 5,975 $ 14,755 $ 2,911 |
Summary of Disaggregated Revenue Information | The following table presents disaggregated revenue information for the Company (in thousands): Three Months Ended Six Months Ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Branded CPG: North America $ 71,168 $ 66,444 $ 144,248 $ 118,414 Europe 18,248 20,524 36,256 39,938 India, Middle East and Africa 4,902 3,612 8,481 6,255 Asia-Pacific 5,981 5,594 12,043 10,820 Latin America 3,774 2,921 6,806 5,465 Flavors & Ingredients 29,430 27,398 56,261 51,426 Total product revenues, net $ 133,503 $ 126,493 $ 264,095 $ 232,318 |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 25, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2020 | Mar. 31, 2022 | Dec. 31, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Conversion basis for conversion of the then-issued and outstanding ordinary shares of predecessor into successor shares (in shares) | 1 | |||||||
Private placement warrants issued (in shares) | 5,263,500 | |||||||
Shares called upon by private placement warrants (in shares) | 2,631,750 | |||||||
Restructuring and other expenses | $ 0 | $ 2,846 | $ 0 | $ 4,503 | ||||
Payments of employee termination benefits | 200 | |||||||
Change in fair value of warrant liabilities | (193) | $ 241 | (1,054) | $ 2,603 | ||||
Common Stock | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Shares issued (in shares) | 7,500,000 | |||||||
Private Placement | Warrants and Rights Outstanding | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Warrant liabilities | 394 | 394 | $ 587 | $ 2,053 | ||||
Private Placement | Fair Value, Inputs, Level 3 | Warrants and Rights Outstanding | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Warrant liabilities | $ (8,100) | |||||||
Employee Severance | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Accrued severance expense | $ 600 | $ 600 | $ 800 | |||||
Restatement adjustment | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Change in fair value of warrant liabilities | 1,200 | |||||||
Restatement adjustment | Merisant and Mafco Worldwide | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Transaction costs | $ 1,100 |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Feb. 23, 2022 | Feb. 05, 2021 | Mar. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||||||
Base cash consideration | $ 0 | $ 186,601 | |||||
Contingent consideration payable | 0 | $ 54,113 | |||||
Payment of contingent consideration | 29,108 | 0 | |||||
Wholesome | |||||||
Business Acquisition [Line Items] | |||||||
Base cash consideration | $ 180,000 | ||||||
Contingent consideration payable | $ 55,000 | 55,000 | |||||
EBITDA Threshold | 30,000 | ||||||
Earn-out amounts payable in common stock | $ 27,500 | ||||||
Transaction-related costs | $ 200 | $ 200 | 4,600 | ||||
Shares issued (in shares) | 2,659,574 | ||||||
Payment of contingent consideration | $ 30,000 | ||||||
Gain on settlement of contingent consideration liability | $ 1,100 | ||||||
Weighted average trading price period | 20 days | ||||||
Goodwill deductible for income tax purposes | $ 4,700 | ||||||
Goodwill deductible for income tax purposes, period (in years) | 9 years | ||||||
Closing adjustment period | 1 year | ||||||
Increase (decrease) in purchase price | $ 13,863 | 3,600 | |||||
Increase (decrease) in inventory | (1,800) | ||||||
Increase (decrease) in prepaid expenses and other current assets | 500 | ||||||
Increase (decrease) in property, plant and equipment | 400 | ||||||
Increase (decrease) in intangible assets | (1,900) | ||||||
Increase (decrease) in other assets | (100) | ||||||
Increase (decrease) in accrued expenses and other current liabilities | (2,700) | ||||||
Increase (decrease) in deferred tax liabilities | (2,800) | ||||||
Increase (decrease) in goodwill | $ 1,000 | ||||||
Product revenue, net | 44,600 | 72,200 | |||||
Operating income | $ 3,400 | $ 5,100 |
BUSINESS COMBINATIONS - Purchas
BUSINESS COMBINATIONS - Purchase Consideration (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Feb. 05, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||
Base cash consideration | $ 0 | $ 186,601 | ||
Wholesome | ||||
Business Acquisition [Line Items] | ||||
Base cash consideration | $ 180,000 | |||
Closing adjustment | 13,863 | $ 3,600 | ||
Fair value of Earn-Out Amount | 52,395 | |||
Total Purchase Price | $ 246,258 |
BUSINESS COMBINATIONS - Prelimi
BUSINESS COMBINATIONS - Preliminary Allocation of the Purchase Price to Tangible and Identifiable Intangible Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Feb. 05, 2021 | Jun. 30, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 237,238 | $ 242,661 | |
Wholesome | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 2,664 | ||
Accounts receivable | 15,868 | ||
Inventories | 76,879 | ||
Prepaid expenses and other current assets | 1,322 | ||
Property, plant and equipment, net | 3,134 | ||
Operating lease right-of-use assets | 7,585 | ||
Intangible assets | 104,500 | ||
Other assets | 1,189 | ||
Total assets acquired | 213,141 | ||
Accounts payable | 5,251 | ||
Accrued expenses and other current liabilities | 10,576 | ||
Current portion of operating lease liabilities | 1,435 | ||
Operating lease liabilities, less current portion | 6,150 | ||
Deferred tax liabilities, net | 24,234 | ||
Total liabilities assumed | 47,646 | ||
Net assets acquired | 165,495 | ||
Goodwill | 80,763 | ||
Total Purchase Price | $ 246,258 |
BUSINESS COMBINATIONS - Preli_2
BUSINESS COMBINATIONS - Preliminary Values Allocated to Identifiable Intangible Assets and Their Estimated Useful Lives (Details) - Wholesome $ in Thousands | Feb. 05, 2021 USD ($) |
Business Acquisition [Line Items] | |
Intangible assets | $ 104,500 |
Customer Relationships | |
Business Acquisition [Line Items] | |
Intangible assets | $ 55,700 |
Useful life (in Years) | 10 years |
Trade Names | |
Business Acquisition [Line Items] | |
Intangible assets | $ 48,800 |
Useful life (in Years) | 25 years |
BUSINESS COMBINATIONS - Pro For
BUSINESS COMBINATIONS - Pro Forma Financial Information (Details) - Wholesome - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2021 | Jun. 30, 2021 | |
Business Acquisition [Line Items] | ||
Revenue | $ 126,493 | $ 252,698 |
Net income | $ 4,967 | $ 1,105 |
INVENTORIES - Summary of Invent
INVENTORIES - Summary of Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 134,536 | $ 129,712 |
Work in process | 2,974 | 1,480 |
Finished goods | 90,564 | 81,738 |
Total inventories | $ 228,074 | $ 212,930 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Components of Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Other intangible assets subject to amortization, gross amount | $ 274,992 | $ 279,535 |
Other intangible assets subject to amortization, accumulated amortization | (32,208) | (23,296) |
Other intangible assets subject to amortization, net amount | 242,784 | 256,239 |
Total other intangible assets, net | 253,484 | 266,939 |
Goodwill | 237,238 | 242,661 |
Total goodwill and other intangible assets | 490,722 | 509,600 |
Product formulations | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Other intangible assets not subject to amortization | 10,700 | 10,700 |
Customer Relationships | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Other intangible assets subject to amortization, gross amount | 105,265 | 106,013 |
Other intangible assets subject to amortization, accumulated amortization | (20,232) | (14,478) |
Other intangible assets subject to amortization, net amount | $ 85,033 | 91,535 |
Customer Relationships | Minimum | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Other intangible assets subject to amortization, Useful life (in years) | 5 years | |
Customer Relationships | Maximum | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Other intangible assets subject to amortization, Useful life (in years) | 10 years | |
Trade Names | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Other intangible assets subject to amortization, gross amount | $ 169,727 | 173,522 |
Other intangible assets subject to amortization, accumulated amortization | (11,976) | (8,818) |
Other intangible assets subject to amortization, net amount | $ 157,751 | $ 164,704 |
Other intangible assets subject to amortization, Useful life (in years) | 25 years |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Goodwill [Line Items] | |||||
Goodwill | $ 237,238 | $ 237,238 | $ 242,661 | ||
Amortization of intangible assets | 4,664 | $ 4,706 | 9,369 | $ 8,857 | |
Branded CPG | |||||
Goodwill [Line Items] | |||||
Goodwill | 233,600 | 233,600 | 238,900 | ||
Flavors & Ingredients | |||||
Goodwill [Line Items] | |||||
Goodwill | $ 3,700 | $ 3,700 | $ 3,800 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization Expense (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2022 | $ 9,361 |
2023 | 18,721 |
2024 | 18,721 |
2025 | 18,488 |
2026 | 18,267 |
2027 | $ 17,040 |
DEBT - Components of Debt (Deta
DEBT - Components of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Less: current portion | $ (3,750) | $ (3,750) |
Less: unamortized discount and debt issuance costs | (9,249) | (9,953) |
Long-term debt | 432,314 | 383,484 |
Secured Debt | Senior secured first lien term loan facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 370,313 | 372,187 |
First lien revolving loan facility | First Lien Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 75,000 | $ 25,000 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||||
Jun. 15, 2022 | Feb. 23, 2022 | Feb. 05, 2021 | Feb. 04, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||||||||
Gain (loss) on extinguishment of debt | $ 0 | $ 0 | $ 0 | $ 5,513,000 | |||||
Payment of contingent consideration | 29,108,000 | $ 0 | |||||||
Additional earn-out amounts | 0 | 0 | $ 54,113,000 | ||||||
Wholesome | |||||||||
Debt Instrument [Line Items] | |||||||||
Shares issued (in shares) | 2,659,574 | ||||||||
Payment of contingent consideration | $ 30,000,000 | ||||||||
Additional earn-out amounts | $ 55,000,000 | $ 55,000,000 | |||||||
Credit Facilities | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt issuance costs | 7,800,000 | $ 6,200,000 | |||||||
Gain (loss) on extinguishment of debt | 1,100,000 | $ 4,400,000 | |||||||
Payments of fees to lenders | 3,800,000 | ||||||||
Transaction costs | $ 8,900,000 | ||||||||
Credit Facilities | One Month SOFR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 0.10% | ||||||||
Credit Facilities | Three Month SOFR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 0.15% | ||||||||
Credit Facilities | Six Month SOFR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 0.25% | ||||||||
Credit Facilities | Fed Funds Effective Rate Overnight Index Swap Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 0.50% | ||||||||
Credit Facilities | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 1% | ||||||||
Amended Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Payments of fees to lenders | $ 700,000 | ||||||||
Secured Debt | Senior secured first lien term loan facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount | 375,000,000 | ||||||||
Debt issuance costs | 9,200,000 | 9,200,000 | 10,000,000 | ||||||
Secured Debt | Senior secured first lien term loan facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 4.50% | ||||||||
Secured Debt | Senior secured first lien term loan facility | Base Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 3.50% | ||||||||
First lien revolving loan facility | First Lien Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | 75,000,000 | ||||||||
Outstanding letter of credit | 2,100,000 | ||||||||
Issuance costs capitalized | $ 1,800,000 | ||||||||
First lien revolving loan facility | Amended Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 125,000,000 | ||||||||
Outstanding letter of credit | 2,100,000 | 2,100,000 | |||||||
Debt issuance costs | $ 2,200,000 | $ 2,200,000 | |||||||
First lien revolving loan facility | Amended Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 3.75% | ||||||||
First lien revolving loan facility | Amended Revolving Credit Facility | Base Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2.75% |
WARRANTS (Details)
WARRANTS (Details) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Jun. 25, 2020 |
Class of Warrant or Right [Line Items] | ||||
Warrants outstanding (in shares) | 20,263,500 | |||
Exercise price of warrants or rights (in dollars per share) | $ 11.50 | |||
Warrants exercised (in shares) | 0 | 0 | ||
Common Class A | ||||
Class of Warrant or Right [Line Items] | ||||
Number of securities called by each warrant or right (in shares) | 0.50 | |||
Public Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants outstanding (in shares) | 19,491,320 | 18,929,880 | 15,000,000 | |
Private Placement | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants outstanding (in shares) | 771,980 | 1,333,420 | 5,263,500 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Fair Value Assumptions (Details) - Private Placement | Jun. 30, 2022 $ / shares | Dec. 31, 2021 $ / shares |
Asset price | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 6.20 | 10.74 |
Exercise price | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 11.50 | 11.50 |
Risk-free interest rate | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 0.0299 | 0.0104 |
Expected volatility | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 0.480 | 0.410 |
Expected term (years) | ||
Class of Warrant or Right [Line Items] | ||
Warrant, term | 2 years 11 months 26 days | 3 years 5 months 26 days |
Dividend yield | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 0 | 0 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Warrant liabilities | $ 394 | $ 2,053 |
Senior secured first lien term loan facility | Secured Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, fair value | 349,900 | |
Long-term debt | $ 361,100 | $ 362,200 |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Changes in Fair Value of Warrants (Details) - Warrants and Rights Outstanding - Private Placement - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 587 | $ 2,053 |
Transfer of Private Warrants to Public Warrants | (605) | |
Change in fair value of warrant liabilities | (193) | (861) |
Ending balance | $ 394 | $ 587 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||||
Provision (benefit) for income taxes | $ 826 | $ (4,167) | $ 1,950 | $ (7,849) | |
Income tax (benefit) provision (as a percent) | 38.40% | (882.80%) | 32.50% | (48.50%) | |
Pretax income (loss) | $ 2,152 | $ (472) | $ 6,002 | $ (16,179) | |
Discrete income tax expense (benefit) | $ (4,200) | $ (4,300) | |||
Uncertain tax position liability | $ 200 | $ 200 | $ 200 |
PENSION BENEFITS - Narrative (D
PENSION BENEFITS - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Feb. 11, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) participant | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | |
Retirement Benefits [Abstract] | |||||||
Number of participants receiving settlement | participant | 125 | ||||||
Lump sum payments | $ 9,500 | $ 16,800 | |||||
Settlement gain | $ 126 | $ 1,000 | $ 500 | $ 0 | $ 1,143 | $ 0 | |
Remaining surplus of plan | $ 2,600 | $ 2,600 |
PENSION BENEFITS - Components o
PENSION BENEFITS - Components of Net Periodic Benefit (Credit) Cost Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Retirement Benefits [Abstract] | ||||||
Service cost | $ 10 | $ 16 | $ 20 | $ 32 | ||
Interest cost | 67 | 260 | 194 | 519 | ||
Expected return on plan assets | 112 | (400) | 59 | (799) | ||
Recognized actuarial loss | 0 | 9 | 0 | 18 | ||
Settlement gain | (126) | $ (1,000) | $ (500) | 0 | (1,143) | 0 |
Net periodic benefit cost (credit) | $ 63 | $ (115) | $ (870) | $ (230) |
PENSION BENEFITS - Net Periodic
PENSION BENEFITS - Net Periodic Benefit Costs Reflected in the Company's Financial Statements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Defined Benefit Plan Disclosure | ||||
Net periodic benefit cost (credit) | $ 63 | $ (115) | $ (870) | $ (230) |
Selling, general and administrative expense | ||||
Defined Benefit Plan Disclosure | ||||
Net periodic benefit cost (credit) | 10 | 16 | 20 | 32 |
Other income, net | ||||
Defined Benefit Plan Disclosure | ||||
Net periodic benefit cost (credit) | $ 53 | $ (131) | $ (890) | $ (262) |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 24, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock compensation expense | $ 1.6 | $ 2.8 | $ 3.2 | $ 4.5 | |
Restricted Stock Units (RSUs) | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 1 year | ||||
Restricted Stock Units (RSUs) | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Management Bonuses | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock compensation expense | $ 0.4 | $ 0.4 | |||
2020 Long-Term Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of common shares authorized (in shares) | 9,300,000 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Activity Related to RSUs, RSAs and PSUs (Details) | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Restricted Stock Units (RSUs) | |
Shares | |
Beginning balance, outstanding (in shares) | shares | 484,744 |
Granted (in shares) | shares | 548,521 |
Vested (in shares) | shares | (188,759) |
Forfeited (in shares) | shares | (11,094) |
Ending balance, outstanding and nonvested (in shares) | shares | 833,412 |
Weighted Average Grant Date Fair Value (per share) | |
Beginning balance, outstanding (in dollars per share) | $ / shares | $ 13.46 |
Granted (in dollars per share) | $ / shares | 7.32 |
Vested (in dollars per share) | $ / shares | 13.58 |
Forfeited (in dollars per share) | $ / shares | 12.79 |
Ending balance, outstanding and nonvested (in dollars per share) | $ / shares | $ 9.40 |
Restricted Stock | |
Shares | |
Beginning balance, outstanding (in shares) | shares | 117,801 |
Granted (in shares) | shares | 82,615 |
Vested (in shares) | shares | (68,946) |
Ending balance, outstanding and nonvested (in shares) | shares | 131,470 |
Weighted Average Grant Date Fair Value (per share) | |
Beginning balance, outstanding (in dollars per share) | $ / shares | $ 9.76 |
Granted (in dollars per share) | $ / shares | 6.96 |
Vested (in dollars per share) | $ / shares | 8.34 |
Ending balance, outstanding and nonvested (in dollars per share) | $ / shares | $ 8.75 |
Performance Shares | |
Shares | |
Beginning balance, outstanding (in shares) | shares | 282,141 |
Granted (in shares) | shares | 569,989 |
Forfeited (in shares) | shares | (11,654) |
Ending balance, outstanding and nonvested (in shares) | shares | 840,476 |
Weighted Average Grant Date Fair Value (per share) | |
Beginning balance, outstanding (in dollars per share) | $ / shares | $ 13.65 |
Granted (in dollars per share) | $ / shares | 6.71 |
Forfeited (in dollars per share) | $ / shares | 12.89 |
Ending balance, outstanding and nonvested (in dollars per share) | $ / shares | $ 8.95 |
STOCK-BASED COMPENSATION - Unre
STOCK-BASED COMPENSATION - Unrecognized Compensation Cost on Nonvested Awards (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Share-Based Payment Arrangement [Abstract] | |
Unrecognized Compensation Cost | $ 13,848 |
Weighted Avg. Remaining Recognition Period (in years) | 1 year 11 months 4 days |
EARNINGS PER SHARE - Computatio
EARNINGS PER SHARE - Computation of Basic and Diluted Earnings (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
EPS numerator: | ||||||
Net income (loss) attributable to common shareholders | $ 1,326 | $ 2,726 | $ 3,695 | $ (12,025) | $ 4,052 | $ (8,330) |
EPS denominator: | ||||||
Weighted average shares outstanding - basic (in shares) | 41,918,403 | 38,458,278 | 40,973,101 | 38,444,590 | ||
Effect of dilutive securities (in shares) | 0 | 1,697,471 | 26,578 | 0 | ||
Weighted average shares outstanding - diluted (in shares) | 41,918,403 | 40,155,749 | 40,999,679 | 38,444,590 | ||
Net earnings (loss) per share: | ||||||
Basic (in dollars per share) | $ 0.03 | $ 0.10 | $ 0.10 | $ (0.22) | ||
Diluted (in dollars per share) | $ 0.03 | $ 0.09 | $ 0.10 | $ (0.22) |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Warrant | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 20,263,300 | 415,896 | 20,263,300 | 20,263,500 |
Restricted Stock Units (RSUs) | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 833,412 | 833,412 | 1,140,149 | |
Restricted Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 131,470 | 68,946 | ||
Performance Shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 840,476 | 322,533 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | |
AOCI Attributable to Parent, Net of Tax | ||||
Beginning balance | $ 339,974 | $ 313,871 | $ 290,785 | $ 308,846 |
Other comprehensive income (loss) before reclassifications | (14,848) | (2,003) | 5,267 | (2,047) |
Amounts reclassified from AOCI | 17 | (224) | 9 | 9 |
Ending balance | 329,344 | 339,974 | 302,148 | 290,785 |
Total Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax | ||||
Beginning balance | 7,460 | 9,687 | 6,567 | 8,605 |
Ending balance | (7,371) | 7,460 | 11,843 | 6,567 |
Net Currency Translation Gains (Losses) | ||||
AOCI Attributable to Parent, Net of Tax | ||||
Beginning balance | 6,755 | 8,758 | 5,727 | 7,774 |
Other comprehensive income (loss) before reclassifications | (14,848) | (2,003) | 5,322 | (2,047) |
Amounts reclassified from AOCI | 0 | 0 | 0 | 0 |
Ending balance | (8,093) | 6,755 | 11,049 | 5,727 |
Funded Status of Benefit Plans | ||||
AOCI Attributable to Parent, Net of Tax | ||||
Beginning balance | 705 | 929 | 840 | 831 |
Other comprehensive income (loss) before reclassifications | 0 | 0 | (55) | 0 |
Amounts reclassified from AOCI | 17 | (224) | 9 | 9 |
Ending balance | $ 722 | $ 705 | $ 794 | $ 840 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 5 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Jul. 31, 2020 | |
Watermill | |||||||
Related Party Transaction [Line Items] | |||||||
Due to related parties | $ 0.9 | ||||||
Related party transactions | $ 0.2 | $ 0.5 | |||||
Watermill | Wholesome | |||||||
Related Party Transaction [Line Items] | |||||||
Related party transactions | $ 2 | ||||||
Limited Liability Company | |||||||
Related Party Transaction [Line Items] | |||||||
Due to related parties | $ 0.1 | $ 0.1 | $ 0.3 | ||||
Related party transactions | $ 0.2 | $ 0.2 | $ 0.3 | $ 0.5 | |||
Limited Liability Company | WS Services | |||||||
Related Party Transaction [Line Items] | |||||||
Interest in partnership (as a percent) | 50% | 50% | |||||
Limited Liability Company | WS Services | Other Assets | |||||||
Related Party Transaction [Line Items] | |||||||
Equity method investments | $ 0.7 | $ 0.7 | $ 0.7 |
BUSINESS SEGMENTS - Narrative (
BUSINESS SEGMENTS - Narrative (Details) | 6 Months Ended |
Jun. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
BUSINESS SEGMENTS - Schedule of
BUSINESS SEGMENTS - Schedule of Selected Financial Information Relating to the Business' Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Product revenues, net | $ 133,503 | $ 126,493 | $ 264,095 | $ 232,318 |
Operating income (loss) | 7,690 | 5,975 | 14,755 | 2,911 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | 14,600 | 13,996 | 28,887 | 25,127 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | (6,910) | (8,021) | (14,132) | (22,216) |
Branded CPG | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues, net | 104,073 | 99,095 | 207,834 | 180,892 |
Operating income (loss) | 5,577 | 10,258 | 12,037 | 20,417 |
Flavors & Ingredients | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues, net | 29,430 | 27,398 | 56,261 | 51,426 |
Operating income (loss) | $ 9,023 | $ 3,738 | $ 16,850 | $ 4,710 |
BUSINESS SEGMENTS - Disaggregat
BUSINESS SEGMENTS - Disaggregated Revenue Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Product revenues, net | $ 133,503 | $ 126,493 | $ 264,095 | $ 232,318 |
Branded CPG | North America | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues, net | 71,168 | 66,444 | 144,248 | 118,414 |
Branded CPG | Europe | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues, net | 18,248 | 20,524 | 36,256 | 39,938 |
Branded CPG | India, Middle East and Africa | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues, net | 4,902 | 3,612 | 8,481 | 6,255 |
Branded CPG | Asia-Pacific | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues, net | 5,981 | 5,594 | 12,043 | 10,820 |
Branded CPG | Latin America | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues, net | $ 3,774 | $ 2,921 | $ 6,806 | $ 5,465 |