Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 24, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-39565 | ||
Entity Registrant Name | The Beauty Health Company | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 85-1908962 | ||
Entity Address, Address Line One | 2165 Spring Street | ||
Entity Address, City or Town | Long Beach | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 90806 | ||
City Area Code | 800 | ||
Local Phone Number | 603-4996 | ||
Title of 12(b) Security | Class A Common Stock, par value $0.0001 per share | ||
Trading Symbol | SKIN | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,340 | ||
Entity Common Stock, Shares Outstanding | 132,500,049 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001818093 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Certain portions of the registrant’s definitive proxy statement to be delivered to its stockholders in connection with the registrant’s 2023 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The registrant’s definitive proxy statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K. |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | Deloitte & Touche LLP |
Auditor Location | Los Angeles, California |
Auditor Firm ID | 34 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 568,197 | $ 901,886 |
Accounts receivable, net of allowances for estimated credit losses of $2,929 and $2,681 at December 31, 2022 and December 31, 2021, respectively | 76,494 | 46,824 |
Prepaid expenses and other current assets | 26,698 | 12,322 |
Income tax receivable | 1,280 | 4,599 |
Inventories | 116,430 | 35,261 |
Total current assets | 789,099 | 1,000,892 |
Property and equipment, net | 18,184 | 16,183 |
Right-of-use assets, net | 15,637 | 14,992 |
Intangible assets, net | 46,386 | 56,010 |
Goodwill | 124,593 | 123,694 |
Deferred income tax assets, net | 815 | 330 |
Other assets | 14,193 | 6,705 |
TOTAL ASSETS | 1,008,907 | 1,218,806 |
Current liabilities: | ||
Accounts payable | 30,335 | 29,049 |
Accrued payroll-related expenses | 21,677 | 28,662 |
Other accrued expenses | 15,183 | 14,722 |
Lease liabilities, current | 4,958 | 3,712 |
Income tax payable | 962 | 292 |
Total current liabilities | 73,115 | 76,437 |
Lease liabilities, non-current | 12,689 | 12,781 |
Deferred income tax liabilities, net | 2,011 | 3,561 |
Warrant liabilities | 15,473 | 93,816 |
Convertible senior notes, net | 734,143 | 729,914 |
TOTAL LIABILITIES | 837,431 | 916,509 |
Commitments (Note 14) | ||
Stockholders’ equity: | ||
Class A Common Stock, $0.0001 par value; 320,000,000 shares authorized; 132,214,695 and 150,598,047 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively | 14 | 16 |
Preferred Stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding at December 31, 2022 and December 31, 2021 | 0 | 0 |
Additional paid-in capital | 550,320 | 722,250 |
Accumulated other comprehensive loss | (4,530) | (1,257) |
Accumulated deficit | (374,328) | (418,712) |
Total stockholders’ equity | 171,476 | 302,297 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 1,008,907 | $ 1,218,806 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowances for doubtful accounts | $ 2,929 | $ 2,681 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 320,000,000 | 320,000,000 |
Common stock, shares issued (in shares) | 132,214,695 | 150,598,047 |
Common stock, shares outstanding (in shares) | 132,214,695 | 150,598,047 |
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 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Net sales | $ 365,876 | $ 260,086 | $ 119,092 |
Cost of sales | 115,536 | 78,259 | 51,893 |
Gross profit | 250,340 | 181,827 | 67,199 |
Operating expenses: | |||
Selling and marketing | 160,076 | 111,583 | 50,323 |
Research and development | 8,444 | 8,195 | 3,409 |
General and administrative | 106,100 | 98,688 | 30,649 |
Total operating expenses | 274,620 | 218,466 | 84,381 |
Loss from operations | (24,280) | (36,639) | (17,182) |
Interest expense, net | 13,392 | 11,777 | 21,275 |
Interest income | (9,175) | (39) | 0 |
Other expense, net | 1,650 | 4,489 | 47 |
Change in fair value of warrant liabilities | (78,343) | 277,315 | 0 |
Change in fair value of earn-out shares liability | 0 | 47,100 | 0 |
Foreign currency transaction (gain) loss, net | 3,164 | 69 | (21) |
Income (loss) before provision for income taxes | 45,032 | (377,350) | (38,483) |
Income tax (benefit) expense | 648 | (2,242) | (9,308) |
Net income (loss) | 44,384 | (375,108) | (29,175) |
Comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | (3,273) | (1,499) | 79 |
Comprehensive income (loss) | $ 41,111 | $ (376,607) | $ (29,096) |
Net income (loss) per share | |||
Basic (in dollars per share) | $ 0.30 | $ (3.67) | $ (0.85) |
Diluted (in dollars per share) | $ (0.23) | $ (3.67) | $ (0.85) |
Weighted average common shares outstanding | |||
Basic (in shares) | 147,554,090 | 102,114,949 | 34,293,271 |
Diluted (in shares) | 148,506,312 | 102,114,949 | 34,293,271 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Previously reported | Retroactive application of recapitalization | Legacy Common Stock | Legacy Common Stock Previously reported | Legacy Common Stock Retroactive application of recapitalization | Legacy Preferred Stock | Legacy Preferred Stock Previously reported | Legacy Preferred Stock Retroactive application of recapitalization | Common Stock | Common Stock Previously reported | Common Stock Retroactive application of recapitalization | Additional Paid-in Capital | Additional Paid-in Capital Previously reported | Additional Paid-in Capital Retroactive application of recapitalization | Note Receivable from Stockholder | Note Receivable from Stockholder Previously reported | Note Receivable from Stockholder Retroactive application of recapitalization | Accumulated other Comprehensive Income (Loss) | Accumulated other Comprehensive Income (Loss) Previously reported | Accumulated other Comprehensive Income (Loss) Retroactive application of recapitalization | Accumulated Deficit | Accumulated Deficit Previously reported | Accumulated Deficit Retroactive application of recapitalization |
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 49,205 | (49,205) | 32,136,203 | 0 | 32,136,203 | ||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 935 | (935) | |||||||||||||||||||||
Beginning balance at Dec. 31, 2019 | $ (1,208) | $ (1,208) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 3 | $ 0 | $ 3 | $ 13,744 | $ 13,747 | $ (3) | $ (554) | $ (554) | $ 0 | $ 28 | $ 28 | $ 0 | $ (14,429) | $ (14,429) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||
Issuance of Earn-out Shares (in shares) | 3,482,446 | |||||||||||||||||||||||
Issuance of Earn-out Shares | 0 | $ 1 | (1) | |||||||||||||||||||||
Repurchases of Shares (in shares) | (116,906) | |||||||||||||||||||||||
Repurchases of shares | (154) | (154) | ||||||||||||||||||||||
Stock-based compensation | 363 | 363 | ||||||||||||||||||||||
Net income (loss) | (29,175) | (29,175) | ||||||||||||||||||||||
Foreign currency translation adjustment | 79 | $ 214 | $ 214 | |||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 35,501,743 | |||||||||||||||||||||||
Ending balance at Dec. 31, 2020 | (29,960) | $ 4 | 13,952 | (554) | 242 | (43,604) | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||
Issuance of common stock pursuant to equity compensation plan (in shares) | 590,099 | |||||||||||||||||||||||
Issuance of Class A Common Stock in connection with business acquisition | 9,341 | 9,341 | ||||||||||||||||||||||
Issuance of Earn-out Shares (in shares) | 7,500,000 | |||||||||||||||||||||||
Issuance of Earn-out Shares | 136,575 | $ 1 | 136,574 | |||||||||||||||||||||
Issuance of common stock pursuant to equity compensation plan (in shares) | 30,963 | |||||||||||||||||||||||
Stock-based compensation | 12,418 | 12,418 | ||||||||||||||||||||||
Shares withheld for tax withholdings on vested stock awards (in shares) | (6,812) | |||||||||||||||||||||||
Reverse recapitalization transaction, net (in shares) | 89,898,170 | |||||||||||||||||||||||
Reverse recapitalization transaction, net | 182,960 | $ 9 | 182,397 | 554 | ||||||||||||||||||||
Purchase of capped calls related to Convertible Senior Notes | (90,150) | (90,150) | ||||||||||||||||||||||
Issuance of Class A Common Stock in connection with the Public and Private Warrant exercises (in shares) | 17,083,884 | |||||||||||||||||||||||
Issuance of Class A Common Stock in connection with the Public and Private Warrant exercises | 457,720 | $ 2 | 457,718 | |||||||||||||||||||||
Net income (loss) | (375,108) | (375,108) | ||||||||||||||||||||||
Foreign currency translation adjustment | $ (1,499) | (1,499) | ||||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 150,598,047 | 150,598,047 | ||||||||||||||||||||||
Ending balance at Dec. 31, 2021 | $ 302,297 | $ 16 | 722,250 | 0 | (1,257) | (418,712) | ||||||||||||||||||
Beginning balance (in shares) at May. 03, 2021 | 54,358 | |||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||
Issuance of Earn-out Shares (in shares) | 35,000,000 | |||||||||||||||||||||||
Reverse recapitalization transaction, net (in shares) | 89,827,310 | |||||||||||||||||||||||
Issuance of Class A Common Stock in connection with the Public and Private Warrant exercises (in shares) | 11,500,000 | |||||||||||||||||||||||
Ending balance (in shares) at May. 04, 2021 | 125,399,913 | |||||||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2021 | 150,598,047 | 150,598,047 | ||||||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2021 | 0 | |||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||
Repurchase and retirement of Class A Common Stock (in shares) | (18,759,243) | |||||||||||||||||||||||
Repurchase and retirement of Class A Common Stock | $ (160,000) | $ (2) | (159,998) | |||||||||||||||||||||
Equity forward contract in connection with accelerated share repurchase | (40,000) | (40,000) | ||||||||||||||||||||||
Issuance of common stock pursuant to equity compensation plan (in shares) | 28,733 | |||||||||||||||||||||||
Issuance of Class A Common Stock in connection with business acquisition | 500 | 500 | ||||||||||||||||||||||
Issuance of common stock pursuant to equity compensation plan (in shares) | 409,565 | |||||||||||||||||||||||
Stock-based compensation | 28,495 | 28,495 | ||||||||||||||||||||||
Shares withheld for tax withholdings on vested stock awards (in shares) | (62,407) | |||||||||||||||||||||||
Shares withheld for tax withholdings on vested stock awards | (927) | (927) | ||||||||||||||||||||||
Net income (loss) | 44,384 | 44,384 | ||||||||||||||||||||||
Foreign currency translation adjustment | $ (3,273) | (3,273) | ||||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2022 | 132,214,695 | 132,214,695 | ||||||||||||||||||||||
Ending balance at Dec. 31, 2022 | $ 171,476 | $ 14 | $ 550,320 | $ 0 | $ (4,530) | $ (374,328) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 44,384 | $ (375,108) | $ (29,175) |
Adjustments to reconcile net income (loss) to net cash from operating activities | |||
Depreciation of property and equipment | 7,164 | 4,486 | 2,552 |
Amortization of capitalized software | 0 | 0 | 0 |
Provision for estimated credit losses | 1,622 | 854 | 1,442 |
Non-cash lease expense | 4,561 | 3,352 | 0 |
Amortization of intangible assets | 14,852 | 13,297 | 11,849 |
Amortization of other assets | 857 | 147 | 132 |
Amortization of deferred financing costs | 4,229 | 4,061 | 1,515 |
Stock-based compensation | 28,495 | 12,418 | 363 |
Amortization of unfavorable lease terms | 0 | 0 | (36) |
Write-off of unfavorable lease | 0 | 0 | (384) |
Loss on sale and disposal of long-lived assets | 5,239 | 0 | 110 |
In-kind interest | 0 | 4,130 | 6,119 |
Deferred income tax benefit | (1,787) | (3,763) | (4,341) |
Change in fair value of earn-out shares liability | 0 | 47,100 | 0 |
Change in fair value adjustment of warrant liabilities | (78,343) | 277,315 | 0 |
Debt prepayment expense | 0 | 2,014 | 0 |
Foreign currency transactions | 2,410 | 0 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (32,025) | (31,013) | 3,701 |
Prepaid expense and other current assets | (16,401) | (5,434) | 489 |
Income taxes receivable | 3,871 | 35 | (4,611) |
Inventories | (82,097) | (9,443) | (3,211) |
Other assets | (8,045) | (6,129) | (2,286) |
Accounts payable | 1,606 | 10,523 | 4,889 |
Accrued payroll and other expenses | (3,357) | 24,784 | (118) |
Other long-term liabilities | 0 | 0 | 1,529 |
Lease liabilities | (4,033) | (1,393) | 0 |
Income taxes payable | 198 | (594) | (2,964) |
Net cash used in operating activities | (106,600) | (28,361) | (12,436) |
Cash flows used in investing activities: | |||
Capital expenditures for intangible assets | (6,547) | (4,415) | (316) |
Capital expenditures for property and equipment | (10,847) | (11,201) | (3,501) |
Cash paid for asset acquisition | (1,475) | 0 | 0 |
Cash paid for business acquisitions, net of cash acquired | 0 | (22,896) | 0 |
Repayment of notes receivables from stockholders | 0 | 781 | 0 |
Net cash used in investing activities | (18,869) | (37,731) | (3,817) |
Cash flows from financing activities: | |||
Repurchases of Class A Common Shares | (160,000) | 0 | (154) |
Payment of equity forward contract in connection with accelerated share repurchase | (40,000) | 0 | 0 |
Payments of tax withholdings on vested stock awards | (927) | 0 | 0 |
Payment of contingent consideration related to acquisitions | (4,315) | 0 | 0 |
Proceeds from issuance of convertible senior notes | 0 | 750,000 | 0 |
Purchase of capped calls related to convertible senior notes | 0 | (90,150) | 0 |
Proceeds from exercise of warrants | 0 | 188,378 | 0 |
Proceeds from revolving facility | 0 | 5,000 | 6,500 |
Repayment of revolving facility | 0 | (5,000) | (15,000) |
Proceeds from term loan | 0 | 0 | 30,000 |
Payment of debt issuance costs | 0 | (21,341) | (77) |
Proceeds from Business Combination, net of transaction costs | 0 | 357,634 | 0 |
Repayment of term loan | 0 | (225,486) | (1,772) |
Payments for transaction costs | 0 | 0 | (323) |
Deferred payment for acquisition | 0 | 0 | (901) |
Net cash (used in) provided by financing activities | (205,242) | 959,035 | 18,273 |
Net increase in cash and cash equivalents | (330,711) | 892,943 | 2,020 |
Effect of foreign currency translation on cash | (2,978) | (543) | 159 |
Cash and cash equivalents, beginning of period | 901,886 | 9,486 | 7,307 |
Cash and cash equivalents, end of period | 568,197 | 901,886 | 9,486 |
Supplemental Cash Flow Information [Abstract] | |||
Cash paid for interest | 9,818 | 10,249 | 13,536 |
Common stock issued for asset acquisition | 500 | 0 | 0 |
Cash (received) paid for income taxes | (1,339) | 1,700 | 2,434 |
Capital expenditures included in accounts payable | 90 | 321 | 240 |
Issuance of earn-out shares | 0 | 136,575 | 0 |
Trade receivables due from seller | 0 | 6,623 | 0 |
Notes payable to seller | 0 | 2,153 | 0 |
Contingent consideration | 0 | 783 | 0 |
Issuance of Class A Common Stock in connection with business acquisitions | 0 | 9,341 | 0 |
Deferred unpaid offering costs | $ 0 | $ 0 | $ 2,036 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business The Beauty Health Company, formerly known as Vesper Healthcare Acquisition Corp. (the “Company” or “BeautyHealth”), was incorporated in Delaware on July 8, 2020. The Company was originally formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. On May 4, 2021, the Company consummated the previously announced business combination pursuant to that certain Agreement and Plan of Merger, dated December 8, 2020 (the “Merger Agreement”), by and among Vesper Healthcare Acquisition Corp. (“Vesper”), Hydrate Merger Sub I, Inc. (“Merger Sub I”), Hydrate Merger Sub II, LLC (“Merger Sub II”), LCP Edge Intermediate, Inc., the indirect parent of Edge Systems LLC d/b/a The Hydrafacial Company (“Hydrafacial”), and LCP Edge Holdco, LLC (“LCP,” or “Former Parent,” and, in its capacity as the stockholders’ representative, the “Stockholders’ Representative”), which provided for: (a) the merger of Merger Sub I with and into Hydrafacial, with Hydrafacial continuing as the surviving corporation (the “First Merger”), and (b) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of Hydrafacial with and into Merger Sub II, with Merger Sub II continuing as the surviving entity (the “Second Merger” and, together with the First Merger, the “Mergers” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). As a result of the First Merger, the Company owns 100% of the outstanding common stock of Hydrafacial and each share of common stock and preferred stock of Hydrafacial has been cancelled and converted into the right to receive a portion of the consideration payable in connection with the Mergers. As a result of the Second Merger, the Company owns 100% of the outstanding interests in Merger Sub II. In connection with the closing of the Business Combination (the “Closing”), the Company owns, directly or indirectly, 100% of the stock of Hydrafacial and its subsidiaries and the stockholders of Hydrafacial as of immediately prior to the effective time of the First Merger (the “Hydrafacial Stockholders”) hold a portion of the Company’s Class A Common Stock, par value $0.0001 per share (the “Class A Common Stock”). In connection with the Closing, the Company changed its name from “Vesper Healthcare Acquisition Corp.” to “The Beauty Health Company.” Following the Closing, on May 6, 2021, the Company’s Class A Common Stock and publicly traded warrants were listed on the Nasdaq Capital Market (“Nasdaq”) under the symbols, “SKIN” and “SKINW”, respectively. The transactions set forth in the Merger Agreement constitute a “Business Combination” as contemplated by Vesper’s Second Amended and Restated Certificate of Incorporation. Unless the context otherwise requires, in this Annual Report on Form 10-K, the “Company” refers to Vesper Healthcare Acquisition Corp. prior to the closing of the Business Combination and to the combined company and its subsidiaries following the Closing and “Hydrafacial” refers to the business of LCP Edge Intermediate, Inc. and its subsidiaries prior to the Closing. References to “Vesper” refer to Vesper Healthcare Acquisition Corp. prior to the consummation of the Business Combination. The Company is a category-creating beauty health company focused on bringing innovative products to market. The Company and its subsidiaries design, develop, manufacture, market, and sell a/esthetic technologies and products. The Company’s flagship brand, Hydrafacial, is a non-invasive and approachable beauty health platform and ecosystem. Hydrafacial uses a unique delivery system to cleanse, extract, and hydrate with their patented hydradermabrasion technology and serums that are made with nourishing ingredients. The COVID-19 pandemic has had, and may continue to have adverse impacts on our business. Related government and private sector responsive actions, as well as changes in consumer spending behaviors, supply chain challenges, and intermittent store closures in certain parts of the world have adversely affected and may continue to adversely affect our business, financial condition and results of operations. We will continue to monitor mandates, guidelines, and recommendations issued by the U.S. Department of State, Center for Disease Control (“CDC”) and World Health Organization (“WHO”), and local governments as they are released, and revise our health and safety protocols accordingly. The extent to which the COVID-19 pandemic impacts our business going forward will depend on numerous factors we cannot reliably predict, including the duration and scope of the pandemic; businesses and individuals’ actions in response to the pandemic; and the impact on economic activity including the possibility of recession or financial market instability. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of presentation and consolidation The Business Combination was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Under this method of accounting, the Company is treated as the “acquired” company for financial reporting purposes and Hydrafacial is treated as the accounting acquirer. This determination was primarily based on the following: • the Hydrafacial stockholders as of immediately prior to the effective time of the First Merger considered in the aggregate have the largest minority interest of the voting power in the combined entity after taking into account actual redemptions; • the operations of Hydrafacial prior to the acquisition comprise the only ongoing operations of the post-combination company; • senior management of Hydrafacial comprises the senior management of the post-combination company; • the relative size and valuation of Hydrafacial compared to the Company; and • pursuant to that certain Investor Rights Agreement, dated as of May 4, 2021, by and between the Company and Hydrafacial, Hydrafacial was given the right to designate certain initial members of the board of directors of the Company immediately after giving effect to the transactions contemplated by the Merger Agreement. Consideration was also given to the fact that the Company paid a purchase price consisting of a combination of cash and equity consideration and its stockholders may have a significant amount of voting power, should the Company’s public stockholders be considered in the aggregate. However, based on the aforementioned factors of management, board representation, largest minority stockholder as noted above, and the continuation of the Hydrafacial business as well as its size, it was determined that accounting for the Business Combination as a reverse recapitalization was appropriate. Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of Hydrafacial with the acquisition being treated as the equivalent of Hydrafacial issuing stock for the net assets of the Company, accompanied by a recapitalization. The net assets of the Company are stated at historical cost, with no goodwill or other intangible assets recorded. In connection with the Business Combination each share of Hydrafacial common stock outstanding immediately prior to the Business Combination converted into the right to receive 653.109 shares (the “Exchange Ratio”) of Class A Common Stock of the Company. The recapitalization of the number of shares of Class A Common Stock attributable to Hydrafacial is reflected retroactively to the earliest period presented based upon the Exchange Ratio and is utilized for calculating earnings per share in all prior periods presented. The Consolidated Financial Statements in this Annual Report on Form 10-K are presented in accordance with GAAP and include the Company’s consolidated domestic and international subsidiaries. Intercompany accounts and transactions have been eliminated. Use of estimates and assumptions in preparing consolidated financial statements In preparing its consolidated financial statements in conformity with GAAP, the Company makes assumptions, estimates, and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of net sales and expenses during the reported periods. On an ongoing basis, the Company evaluates its estimates, including, among others, those related to revenue related reserves, allowance for estimated credit losses, the realizability of inventory, fair value measurements including common stock, warrant liabilities and earn-out shares liability valuations, useful lives of property and equipment, goodwill and finite-lived intangible assets, accounting for income taxes, stock-based compensation expense and commitments and contingencies. The Company’s estimates are based on historical experience and on its future expectations that are believed to be reasonable. The combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from current estimates and those differences may be material. Cash and Cash Equivalents All highly liquid investments, including credit card receivables due from banks, with original maturities of 90 days or less at date of purchase, are reported at fair value and are considered to be cash equivalents. The balances of cash at financial Accounts Receivable Accounts receivable primarily arise out of product purchases by customers from various distribution channels. Typical payment terms provide that customers pay within 30 to 120 days of the invoice. The allowance for estimated credit losses represents management's best estimate of probable credit losses in accounts receivable. The allowance is based upon a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history, the specific customer’s ability to pay its obligation and any other forward-looking data regarding customers’ ability to pay which may be available. In addition, management considered other qualitative factors, particularly in relation to the volatility in the economies of certain foreign jurisdictions that arose from the COVID-19 pandemic. Receivables are written off against the allowance when management believes that the amount receivable will not be recovered. Inventories Inventories are stated at the lower of cost (determined using the average cost method which approximates the first-in, first-out method) or net realizable value. Obsolete inventory or inventory in excess of management’s estimated usage is written-down to its estimated net realizable value. Inherent in the net realizable value are management’s estimates related to economic trends, future demand for products, and technological obsolescence of our products. Cost is determined using weighted-average costs, and includes all costs incurred to deliver inventory to the Company’s distribution centers including freight, non-refundable taxes, duty, and other landing costs. The Company periodically reviews its inventories and makes a provision as necessary to appropriately value goods that are obsolete, have quality issues, or are damaged. The amount of the provision is equal to the difference between the cost of the inventory and its net realizable value based upon assumptions about product quality, damages, future demand, selling prices, and market conditions. If changes in market conditions result in reductions in the estimated net realizable value of its inventory below its previous estimate, the Company would decrease its basis in the inventory in the period in which it made such a determination. Business Combinations The purchase price of an acquisition is measured as the aggregate of the fair value of the consideration transferred including the acquisition-date fair value of the Company’s previously held equity interests. The purchase price is allocated to the fair values of the tangible and intangible assets acquired and liabilities assumed, with any excess recorded as goodwill. These fair value determinations require judgment and may involve the use of significant estimates and assumptions. The purchase price allocation may be provisional during a measurement period of up to one year to provide reasonable time to obtain the information necessary to identify and measure the assets acquired and liabilities assumed. Any such measurement period adjustments are recognized in the period in which the adjustment amount is determined. Transaction costs associated with the acquisition are expensed as incurred. Goodwill Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the assets acquired and liabilities assumed. Goodwill is not amortized but is evaluated for impairment annually or more frequently if indicators of impairment are present or changes in circumstances suggest that impairment may exist. The Company has one reporting unit and management evaluates the carrying value of the Company’s goodwill annually at the end of its fiscal year or whenever events or changes in circumstances indicate that an impairment may exist. When testing goodwill for impairment, management has the option of first performing a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as the basis to determine if it is necessary to perform a quantitative goodwill impairment test. In performing the qualitative assessment, management considers the extent to which unfavorable events or circumstances identified, such as changes in economic conditions, industry and market conditions or company specific events, could affect the comparison of the reporting unit’s fair value with its carrying amount. If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management is required to perform a quantitative impairment test. Quantitative impairment testing for goodwill is based upon the fair value of a reporting unit as compared to its carrying value. Under a quantitative impairment test, management will make certain judgments and assumptions in allocating assets and liabilities to determine carrying values for our reporting unit. The impairment loss recognized would be the difference between a reporting unit’s carrying value and fair value in an amount not to exceed the carrying value of the reporting unit’s goodwill. Testing goodwill for impairment requires management to estimate fair values of reporting units using significant estimates and assumptions. The assumptions made will impact the outcome and ultimate results of the testing. Management will use industry accepted valuation models and set criteria that are reviewed and approved by various levels of management and, in certain instances, we will engage independent third-party valuation specialists for advice. The key estimates and factors used in the valuation models would include revenue growth rates and profit margins based on our internal forecasts, our specific weighted-average cost of capital used to discount future cash flows, and comparable market multiples for the industry segment, when applicable, as well as our historical operating trends. Certain future events and circumstances, including deterioration of market conditions, higher cost of capital, a decline in actual and expected consumer consumption and demands, could result in changes to these assumptions and judgments. A revision of these assumptions could cause the fair values of the reporting units to fall below their respective carrying values, resulting in a non-cash impairment charge. Such charge could have a material effect on the consolidated financial statements. Intangible Assets Intangible assets are composed of developed technology, customer relationships and trademarks. At initial recognition, intangible assets acquired in a business combination are recognized at their fair value as of the date of acquisition. Following initial recognition, intangible assets are carried at cost less accumulated amortization and impairment losses, if any, and are amortized on a straight-line basis over the estimated useful life of the asset. We assess the impairment of intangible assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If necessary, we will use an industry accepted valuation model to estimate the fair value of the intangible assets. The fair value calculation requires significant judgments in determining both the assets’ estimated cash flows potentially the appropriate discount and royalty rates applied to those cash flows to determine fair value. Variations in economic conditions or a change in general consumer demands, operating results estimates or the application of alternative assumptions could produce significantly different results. If these assumptions differ materially from future results, we may record impairment charges in the future. Property and Equipment Property and equipment is stated at cost less accumulated depreciation. Repair and maintenance costs are expensed as incurred. Depreciation commences when an asset is ready for its intended use. Depreciation is recorded on a straight-line basis over each asset’s estimated useful life. Leasehold improvements are depreciated on a straight-line basis over the lesser of the length of the lease and the estimated useful life of the improvement. Impairment of long-lived Assets Long-lived assets, including intangible assets with finite lives, held for use are evaluated for impairment when the occurrence of events or a change in circumstances indicates that the carrying value of the assets may not be recoverable as measured by comparing their carrying value to the estimated undiscounted future cash flows generated by their use and eventual disposition. Impaired assets are recorded at fair value, determined principally by discounting the future cash flows expected from their use and eventual disposition. Reductions in asset values resulting from impairment valuations are recognized in income in the period that the impairment is determined. Leased Property and Equipment Prior to the adoption of ASU No. 2016-02, Leases (“ASC 842”), the Company recognized rent expense for operating leases on a straight‑line basis (including the effect of reduced or free rent and rent escalations) over the lease term. The difference between the cash paid to the landlord and the amount recognized as rent expense on a straight‑line basis was recognized as an adjustment to deferred rent in the consolidated balance sheets. Cash reimbursements received from landlords for leasehold improvements and other cash payments received from landlords as lease incentives were recorded as an asset and depreciated using the straight‑line method over the lease term as an offset to rent expense. ASC 842 became effective for the Company in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021, with an effective date of January 1, 2021. Subsequent to the adoption of ASC 842 on January 1, 2021, the first day of fiscal 2021, operating and finance lease liabilities are recognized at the lease commencement date based on the present value of the fixed lease payments using the Company’s incremental borrowing rates for its population of leases. The Company uses an incremental borrowing rate to determine the present value of lease payments as the rate implicit in the lease is generally not readily determinable. The Company’s incremental borrowing rate is the rate of interest that it would have to pay to borrow an amount equal to the lease payments, on a collateralized basis and in a similar economic environment over a similar term. The Company determines if an arrangement is or contains a lease at inception. This determination depends on whether the arrangement conveys the right to control the use of an explicitly or implicitly identified asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed if the Company obtains the right to direct the use of and obtains substantially all of the economic benefits from using the underlying asset. As a result of the adoption of the new accounting standard, the Company elected transition-related practical expedients as accounting policies which allowed it to not reassess, as of the adoption date, (1) whether any expired or existing contracts are or contain leases, (2) the classification of any expired or existing leases, and (3) if previously capitalized initial direct costs qualify for capitalization under ASC 842. The Company elected the practical expedient option to not separate lease and non-lease components for all of its leases, and also elected the short-term lease recognition exemption that keeps leases with an initial term of 12 months or less excluded from balance sheet capitalization. This results in recognizing those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. Related operating and finance lease right-of-use assets are recognized based on the initial present value of the fixed lease payments, reduced by cash payments received from landlords as lease incentives, plus any prepaid rent and other direct costs from executing the leases. Amortization of both operating and finance lease right-of-use assets is performed on a straight-line basis and recorded as part of rent expense in cost of goods sold and selling, general and administrative expenses on the consolidated statements of operations. The interest expense amortization component of the finance lease liabilities is recorded within interest expense on the consolidated statements of operations. Convertible Senior Notes On September 14, 2021, the Company issued an aggregate of $750 million in principal amount of its 1.25% Convertible Senior Notes due 2026 (the “Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of September 14, 2021, between the Company and U.S. Bank National Association, as trustee (the “Trustee”). The Company accounts for the Notes under Accounting Standards Codification (“ASC”) ASC 470-20 - Debt with Conversion and Other Options and Derivatives and Hedging—Contracts in Entity's Own Equity (“ASU 2020-06”), which the Company early adopted in the first quarter of 2021 concurrent with the issuance of the Notes. The Company records the Notes as a long-term liability at face value net of issuance costs. If any of the conditions to the convertibility of the Notes is satisfied, or the Notes become due within one year, then the Company may be required under applicable accounting standards to reclassify the carrying value of the Notes as a current, rather than a long-term liability. Refer to Note 10 — Long-term Debt for further detail. Capped Call Transactions Capped call transactions cover the aggregate number of shares of the Company’s common stock that will initially underlie the Notes, and generally reduce potential dilution to the Company’s common stock upon any conversion of Notes and/or offset any cash payments the Company may make in excess of the principal amount of the converted Notes, as the case may be, with such reduction and/or offset subject to a cap, based on the cap price of the capped call transactions. The Company determined that the freestanding capped call option contracts qualify as equity under the accounting guidance on indexation and equity classification, and recognized the contract by recording an entry to “Additional paid-in capital” (“APIC”) in stockholders’ equity in its Consolidated Balance Sheet. The Company also determined that the capped call option contracts meet the definition of a derivative under ASC 815 — Derivatives and Hedging (“ASC 815”), but are not required to be accounted for as a derivative as they meet the scope exception outlined in ASC 815. The capped call options are recorded in APIC and not remeasured. Issuance Costs Issuance costs related to our Notes offering were capitalized and offset against proceeds from the Notes. Issuance costs consist of legal and other direct costs related to the issuance of the Notes and are amortized to interest expense over the term of the Notes. Refer to Note 10 – Long-term Debt for further detail. Warrant Liabilities During October 2020, in connection with Vesper’s initial public offering, the Company issued 15,333,333 warrants to purchase shares of the Company’s common stock at $11.50 per share (the “Public Warrants”). Simultaneously, with the consummation of Vesper’s initial public offering, the Company issued 9,333,333 warrants to purchase shares of the Company’s common stock at $11.50 per share (the “Private Placement Warrants”), to BLS Investor Group LLC (the “Sponsor”). On November 3, 2021 all of the Public Warrants that were outstanding were redeemed (the “Redemption Date”). As of December 31, 2022 and 2021, no Public Warrants were outstanding and approximately 7 million Private Placement Warrants remain outstanding. As of December 31, 2022 the Private Placement Warrants are measured at fair value using a Monte Carlo simulation because these warrants are not subject to redemption if the reference value of the common stock, as defined, is between $10.00 and $18.00 per share. The Private Placement Warrants are classified as a Level 3 financial instruments as of December 31, 2022. The Private Placement Warrants expire five years after the Business Combination. The Company classified the Public Warrants and currently classifies the Private Placement Warrants as liabilities on its Consolidated Balance Sheets as these instruments are precluded from being indexed to our own stock given the terms allow for a settlement adjustment that does not meet the scope of the fixed-for-fixed exception in ASC 815, Derivatives and Hedging . In certain events outside of the Company’s control, the Private Placement Warrant holders are entitled to receive cash while in certain scenarios the holders of the Company’s common stock are not entitled to receive cash or may receive less than 100% of any proceeds in cash, which precludes these instruments from being classified within equity pursuant to ASC 815-40. The Public and Private Placement Warrants were initially recorded at fair value on the date of the Business Combination and are subsequently adjusted to fair value at each subsequent reporting date. Changes in the fair value of these instruments are recognized within change in fair value of warrant liabilities in the Company’s Consolidated Statements of Comprehensive Income (Loss) . Earn-out Shares Liability In addition to the consideration paid at the closing of the Business Combination, the former stockholders of Hydrafacial received contingent consideration in the form of an aggregate of 7.5 million shares of the Company’s Class A Common Stock (the “Earn-out Shares”) as a result of the Company’s completion of the acquisitions of four target businesses, as contemplated by the Merger Agreement, in June and July 2021 that were identified by Hydrafacial. With the closing of these four distributor acquisitions in Australia, France, Germany and Mexico, the 7.5 million Earn-out Shares were earned and subsequently issued on July 15, 2021. The Company accounted for the Earn-out Shares liability as contingent consideration and recorded an Earn-out Shares liability for the Earn-out Shares in accordance with ASC 480 – Distinguishing Liabilities from Equity . The liability was included as part of the consideration transferred in the Business Combination and was recorded at its then current fair value. The Earn-out Shares liability was recorded at fair value and remeasured at the end of each reporting period, with the corresponding gain or loss recorded in the Company’s Consolidated Statements of Comprehensive Income (Loss) as change in the fair value of earn-out shares liability. Revenue Recognition Net sales consist of the sale of products to retail and wholesale customers through e-commerce and distributor sales. The Company generates revenue through manufacturing and selling Hydrafacial Delivery Systems (“Delivery Systems”). In conjunction with the sale of Delivery Systems, the Company also sells its serum solutions and consumables (collectively “Consumables”). Original Consumables are sold solely and exclusively by the Company (and from authorized retailers) and are available for purchase separately from the purchase of Delivery Systems. For both Delivery Systems and Consumables, revenue is recognized upon transfer of control to the customer, which generally takes place at the point of shipment. The Company distributes products to customers both through national and international retailers as well as direct-to-consumers through its e-commerce and store channels. The Company sells to direct customers, including non-corporate customers (such as spas and dermatologist offices), corporate customers, and international distributors. For non-corporate customers, a contract exists when the customer initiates an order by submitting a purchase request. Such requests are accepted by the Company upon issuance of a corresponding invoice. For corporate customers, a contract exists when the customer submits a purchase order and is accepted upon issuance of a subsequent invoice. For distributors, a customer submits an order request which is processed in the system by a sales representative. This is also considered accepted upon the subsequent issuance of an invoice by the Company. For all customers, each invoice is considered a separate contract for accounting purposes. Revenue is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for the sale of its products which is determined based upon the sales price per the invoice or contract. Discounts applied to invoices are not associated with future purchases and solely relate to the product invoiced. As a result, the invoice and transaction price are recorded net of any discounts. The Company’s sales terms for its Delivery Systems allow for the right of return within 30 days, subject to a restocking fee. Estimates for variable consideration, which relate to sales returns associated with Delivery Systems, are based on the expected amount the Company will be entitled to receive, subject to constraint, and is recorded as a reduction against net sales. Sales returns are estimated based on historical sales and returns data and have not significantly impacted net sales because sales returns are not material. Depending on the type of Delivery System that was purchased, the Company offers its customers with a one-year or two-year standard type warranty that provides the customer with the assurance that its Delivery Systems will function as intended. Returns related to warranty have been immaterial. The Company also has a loyalty program that allows members to receive points based on qualifying Consumable purchases that may be redeemed as a discount on future consumable purchases. This customer option is a material right and, accordingly, represents a separate performance obligation to the customer. The related loyalty program deferred revenue included in other accrued expenses on the consolidated balance sheet was approximately $0.8 million and $1.2 million as of December 31, 2021 and 2022, respectively. In addition, during fiscal 2022 the Company provided certain customers with the option to trade-in their existing Delivery System and apply the fair value of their old Delivery System towards the transaction price of the Company’s new Syndeo Delivery System. The Company determined that the trade-in is viewed as a marketing offer due to the fact that it does not constitute the Company’s customary business practice and was not offered at contract inception. Therefore, the trade-in is accounted for under ASC 606 and represents a type of noncash consideration, which the Company measures at its estimated fair value. The estimated fair value represents the estimated selling price, less the cost to refurbish the inventory and the expected margin to be earned on the refurbishment, along with the expected margin to be earned on the selling effort. The estimated selling price is determined based on the Company’s historical experience of reselling refurbished Delivery Systems. The total value of these refurbished Delivery Systems included in inventory as of December 31, 2022 was $8.8 million. Payment terms vary by customer but typically provide for the customer to pay within 30 to 120 days; however, the Company provides an option for qualified customers to pay for Delivery Systems over 12 monthly installments. Therefore, customer payment terms are for 12 months or less and do not include significant financing components. The Company performs credit evaluations of customers and evaluates the need for allowances for potential credit losses based on historical experience, as well as current and expected general economic conditions. Cost of Sales The Company’s cost of sales consists of Delivery Systems and Consumables product costs, including the cost of materials, labor costs, overhead, depreciation and amortization of developed technology, shipping and handling costs, and the costs associated with excess and obsolete inventory. As the Company launches new products and expand presence internationally, the Company expects to incur higher cost of sales as a percentage of sales because we have not yet achieved economies of scale with these items. Selling and Marketing Expense Selling and marketing expense consists of personnel-related expenses, sales commissions, travel costs, and advertising expenses incurred in connection with the sale of our products. The Company intends to continue to invest in sales and marketing capabilities in the future and expect this expense to increase in absolute dollars in future periods as it releases new products, grow our global footprint, and drive consumer demand in the ecosystem. Selling and marketing expense as a percentage of total revenue may fluctuate from period to period based on total revenue and the timing of investments in sales and marketing functions as these investments may vary in scope and scale over future periods. Advertising costs are expensed in the period in which they are incurred. Total advertising costs, included in selling and marketing expenses on the Consolidated Statements of Comprehensive Income (Loss), were $3.8 million, $3.2 million and $3.3 million for each of the three years ending December 31, 2022, 2021, and 2020 respectively. Research and Development Costs Research and development expense primarily consists of personnel-related expenses, tooling and prototype materials, technology investments, and other expenses incurred in connection with the development of new products and internal technologies. The Company expects research and development expenses to increase in absolute dollars in future periods and vary from period to period as a percentage of total revenue, as the Company plans to continue to innovate and invest in new technologies and to enhance existing technologies to fuel future growth as a category creator. General and Administrative Expense General and administrative expense includes personnel-related expenses, professional fees, credit card and wire fees and facilities-related costs primarily for our executive, finance, accounting, legal, human resources, and IT functions. General and administrative expense also includes fees for professional services principally comprising legal, audit, tax and accounting services and insurance. The Company expects to continue to incur additional general and administrative expenses as a result of operating as a public company, including expenses related to compliance and reporting obligations of public companies, and increased costs for insurance, investor relations expenses, and professional services. In addition, the Company expects to continue to incur additional IT expenses as the Company scales and enhances its e-commerce, digital and data utilization capabilities. As a result, the Company expects that our general and administrative expenses will increase in absolute dollars in future periods and vary from period to period as a percentage of revenue. Interest Expense, Net Interest expense consists of interest accrued on the Company’s Convertible Senior Notes and amortization of debt issuance costs relating to the Notes. The Notes mature on October 1, 2026 and accrue interest at a rate of 1.25% per annum. Debt issuance costs are being amortized over the term of the Notes using the effective interest method. If the Notes are repurchased, redeemed, or converted prior to the maturity date, the interest on the Notes would no longer be accrued and the amortization of debt issuance costs would be accelerated. The Company expects interest expense to increase in absolute dollars as the Company grows internationally and obtains more financing to support such growth. Interest expense a |
Business Combinations and Asset
Business Combinations and Asset Acquisitions | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations and Asset Acquisitions | Business Combinations and Asset Acquisitions Business Combination — Reverse Recapitalization The closing of the Business Combination occurred on May 4, 2021. In connection with the Business Combination: • Certain accredited investors (the “PIPE Investors”) entered into subscription agreements (the “PIPE Subscription Agreements”) pursuant to which the PIPE Investors agreed to purchase 35,000,000 shares (the “PIPE Shares”) of the Company’s Class A Common Stock at a purchase price per share of $10.00 for an aggregate purchase price of $350.0 million (the “PIPE Investment”). The PIPE Investment was consummated substantially concurrently with the Closing of the Business Combination. • Prior to the Business Combination, the Company issued an aggregate of 11,500,000 shares of the Company’s Class B Common Stock (the “Founder Shares”) to the Sponsor for an aggregate purchase price of $25,000 in cash. All outstanding Founder Shares were automatically converted into shares of the Company’s Class A Common Stock on a one-for-one basis at the Closing and will continue to be subject to the transfer restrictions applicable to such shares. • In connection with the Closing, holders of 2,672,690 shares of the Company’s Class A Common Stock exercised their rights for the Company to redeem their respective shares for cash at an approximate price of $10.00 per share, for an aggregate of approximately $26.7 million, which was paid to such holders at Closing. • Immediately after giving effect to the Merger and the PIPE Investment, there were 125,329,053 shares of the Company’s Class A Common Stock issued and outstanding. • The aggregate gross cash consideration received by the Company in connection with the Business Combination was $783 million, which consisted of proceeds of $350 million from the PIPE Investment, plus approximately $433 million of cash from the Company’s trust account that held the proceeds from the Company’s initial public offering (the “Trust Account”). The aggregate gross cash consideration received was reduced by $368 million, which consisted of cash payments made to the former stockholders of Hydrafacial, and further reduced by an additional $57 million for the payment of direct transaction costs incurred by Hydrafacial and the Company which were reflected as a reduction of proceeds. The Company used the net proceeds to repay all of its outstanding indebtedness at the Closing. The remainder of the consideration paid to the Hydrafacial stockholders consisted of 35,501,743 newly issued shares of Class A Common Stock (the “Stock Consideration”). The net cash received from the Business Combination was subject to a working capital adjustment of $0.9 million. The Company also issued 70,860 shares related to the working capital adjustment. The following table reconciles the elements of the Business Combination to the Company’s Consolidated Statements of Cash Flows and the Consolidated Statements of Stockholders’ Equity (Deficit) for the year ended December 31, 2021: (in thousands) Recapitalization Cash in trust, net of redemptions $ 433,382 Cash — PIPE 350,000 Less: Cash paid out to Former Parent (367,870) Less: Transaction costs and advisory fees (56,976) Less: Cash paid out from net working capital adjustment related to acquisitions (902) Net Cash Received from Business Combination $ 357,634 The number of shares of Class A Common Stock issued following the consummation of the Business Combination: Number of Shares Class A common stock outstanding prior to Business Combination 46,000,000 Less: Redemption of Vesper Class A Common Stock (2,672,690) Class A common stock of Vesper 43,327,310 Founder shares (Vesper Class B Common Stock) 11,500,000 PIPE Shares 35,000,000 Business Combination and PIPE shares 89,827,310 Legacy Hydrafacial shares (1) 35,501,743 Working capital adjustment Class A Common Stock issued 70,860 Total Shares of Class A Common Stock after Business Combination 125,399,913 _______________ (1) The number of Legacy Hydrafacial shares was determined from the 54,358 shares of Hydrafacial common stock outstanding immediately prior to the closing of the Business Combination multiplied by the Exchange Ratio of 653.109. Distributor Acquisitions On June 4, 2021, the Company acquired High Tech Laser, Australia Pty Ltd (“HTL”), a distributor of the Company’s products in Australia. On July 1, 2021, the Company acquired Wigmore Medical France (“Wigmore”), Ecomedic GmbH (“Ecomedic”) and Sistemas Dermatologicos Internacionales (“Sidermica”), distributors of the Company’s products in France, Germany and Mexico, respectively. Through these acquisitions, the Company plans to directly sell to the respective markets and improve services for its products. Cash paid for the four distributors totaled $25.7 million. Subsequent to the purchase price measurement period, the Company made contingent consideration payments totaling $1.6 million in connection with the Ecomedic and Sidermica acquisitions which were recorded in other expense, net in the consolidated statements of comprehensive income (loss). The Company applied the acquisition method of accounting and established a new basis of accounting on the dates of the respective acquisitions. The assets acquired by the Company are accordingly measured at their estimated fair values as of the acquisition date. The goodwill arising from the acquisitions consists largely of the business reputation of the acquired company in the marketplace and its assembled workforce. The goodwill is not deductible for income tax purposes. The Company finalized the valuation of assets acquired and liabilities assumed for the distributor acquisitions as of June 30, 2022. The following table summarizes the consideration and fair values assigned to the assets acquired and liabilities assumed at the dates of acquisition for the Wigmore, Ecomedic and Sidermica acquisitions and summarizes the HTL acquisition after measurement period adjustments. (in thousands) HTL Wigmore (2) Ecomedic (3) Sidermica (4) Consideration paid: Cash, net of cash acquired $ 4,920 $ 2,540 $ 11,338 $ 6,861 Class A Common Stock issued (1) 1,557 456 6,513 815 Trade receivables due from seller 1,027 2,336 1,679 1,581 Notes payable to seller — — 2,153 — $ 7,504 $ 5,332 $ 21,683 $ 9,257 Identifiable assets acquired and liabilities assumed Accounts receivable $ 1,110 $ 2,079 $ 15 $ 1,657 Non-compete agreement 100 60 588 100 Customer relationships 2,696 2,276 5,487 2,700 Inventory and other assets 354 341 1,262 454 Accounts payable (45) (456) (772) — Deferred tax liabilities, net (675) (842) (2,008) — Accrued and other liabilities (802) (317) (340) — Total identifiable net assets 2,738 3,141 4,232 4,911 Goodwill $ 4,766 $ 2,191 $ 17,451 $ 4,346 ___________ (1) Class A Common Stock issued as consideration for the acquisitions was 110,726, 28,157, 401,021 and 50,195 shares for HTL, Wigmore, Ecomedic and Sidermica, respectively. (2) During the fourth quarter of 2021, adjustments were made to the Wigmore valuation pertaining to contingent consideration and intangible assets. Goodwill was adjusted due to an increase of $0.3 million in contingent consideration and a decrease of $1.0 million in intangible assets. Contingent consideration payments for the Wigmore acquisition were paid during the three months ended March 31, 2022. (3) During the first quarter of 2022, adjustments were made to the Ecomedic valuation pertaining to acquisition date tax liability. Goodwill was adjusted due to an increase of $0.2 million to acquisition date tax liability. (4) During the second quarter of 2022, adjustments were made to the Sidermica valuation pertaining to contingent consideration. Goodwill was adjusted due to finalization of the valuation of contingent consideration of $1.98 million. Contingent consideration payments for the Sidermica acquisition were paid during the three months ended June 30, 2022. Intangible assets acquired included customer relationships and non-compete agreements. The valuation of the acquired intangible asset was estimated by performing projections of discounted cash flows, whereby revenues and costs associated with each intangible asset are forecasted to derive expected cash flow which is discounted to present value at discount rates commensurate with perceived risk. The valuation and projection process is inherently subjective and relies on significant unobservable inputs (Level 3 inputs). The weighted average amortization period of customer relationship was 5 years, while the non-compete agreements are amortized over 3 years. The operating results of the distributor acquisitions from the dates of acquisitions are included in the Consolidated Statements of Comprehensive Income (Loss). The historical operating results are not material to the consolidated financial statements, and, therefore, the Company has not presented the unaudited pro forma results of operations for the distributor acquisitions. Acquisition of The Personalized Beauty Company, Inc. (“Mxt”) On April 12, 2022, the Company, through its indirect, wholly-owned subsidiary, Edge Systems Intermediate, LLC, acquired The Personalized Beauty Company, Inc., a Delaware corporation d.b.a. Mxt. Consideration paid in the aggregate was $1.5 million plus equity consideration of $0.5 million or 28,733 shares of the Company’s Class A Common Stock. Depending on the achievement of certain revenue milestones, the former Mxt shareholders are entitled to receive up to $30 million of earnout payments. The estimated fair value of the earnout was not material as of the acquisition date and as of December 31, 2022. The Company accounted for this transaction as an asset acquisition based on an evaluation of the U.S. GAAP guidance for business combinations and concluded that the Company acquired developed technology of $1.9 million and inventory of $0.1 million. The Company concluded that the developed technology acquired from Mxt comprised substantially all of the fair value |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregated Revenue The Company generates revenue through manufacturing and selling Hydrafacial Delivery Systems. In conjunction with the sale of Delivery Systems, the Company also sells its Consumables. Original Consumables are sold solely and exclusively by the Company (and from authorized retailers) and are available for purchase separately from the purchase of Delivery Systems. For both Delivery Systems and Consumables, revenue is recognized upon transfer of control to the customer, which generally takes place at the point of shipment. The Company’s revenue disaggregated by major product line consists of the following for the periods indicated: Year Ended December 31, (in thousands) 2022 2021 2020 Net Sales Delivery Systems $ 206,235 $ 139,464 $ 53,372 Consumables 159,641 120,622 65,720 Total net sales $ 365,876 $ 260,086 $ 119,092 See Note 18 — Segment Reporting for revenue disaggregated by geographical region. |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Balance Sheet Components | Balance Sheet Components Inventories consist of the following as of the periods indicated: (in thousands) December 31, 2022 December 31, 2021 Raw materials $ 38,373 $ 12,024 Finished goods 78,057 23,237 Total inventories $ 116,430 $ 35,261 Accrued payroll-related expenses consist of the following as of the periods indicated: (in thousands) December 31, 2022 December 31, 2021 Accrued compensation $ 4,154 $ 15,262 Accrued payroll taxes 1,357 922 Accrued benefits 5,643 3,022 Accrued sales commissions 10,523 9,456 Total accrued payroll-related expenses $ 21,677 $ 28,662 Other accrued expenses consist of the following as of the periods indicated: (in thousands) December 31, 2022 December 31, 2021 Sales and VAT tax payables $ 4,904 $ 5,817 Accrued interest 2,344 2,786 Contingent consideration — 783 Note payable due seller 1,819 2,153 Royalty liabilities 2,348 1,074 Other 3,768 2,109 Total other accrued expenses $ 15,183 $ 14,722 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company does not own any real estate. The majority of the Company’s lease liability consists of the Company’s international office spaces and warehouses, all of which are classified as operating leases. The Company’s finance leases relate to leased equipment such as office and warehouse equipment. The finance lease balances are not material and are included in property and equipment, other accrued expenses, and other long-term liabilities of the Consolidated Balance Sheets. Lease terms include the non-cancellable portion of the underlying leases along with any reasonably certain lease periods associated with available renewal periods, termination options and purchase options. The Company's leases do not contain significant restrictive provisions nor residual value guarantees. Operating and finance lease right-of-use (“ROU”) liabilities are recognized at the lease commencement date based on the present value of the fixed lease payments using the Company’s incremental borrowing rates for its population of leases. Related operating and finance lease ROU assets are recognized based on the initial present value of the fixed lease payments, reduced by cash payments received from landlords as lease incentives, plus any prepaid rent and other direct costs from executing the leases. The interest expense amortization component of the finance lease ROU liabilities is recorded within interest expense on the Consolidated Statements of Comprehensive Income (Loss). ROU assets are tested for impairment in the same manner as long-lived assets. Operating ROU assets and liabilities as of December 31, 2022 and December 31, 2021 comprises the following: (in thousands) Assets Balance Sheet Classification December 31, 2022 December 31, 2021 Operating lease assets Right-of-use assets, net $ 15,637 $ 14,992 Liabilities Operating Lease liabilities, current $ 4,958 $ 3,712 Operating Lease liabilities, non-current $ 12,689 $ 12,781 Total lease liabilities $ 17,647 $ 16,493 Total lease cost for the years ended December 31, 2022 and December 31, 2021 are summarized in the table below. The variable lease costs were not included in the measurement of the lease liabilities. These primarily include property taxes, property insurance, and common area maintenance expenses. (in thousands) Statement of Operations Classification December 31, 2022 December 31, 2021 Operating lease cost Operating lease cost Cost of sales $ 835 $ 811 Operating lease cost Selling and marketing, general and administrative 4,139 2,535 4,974 3,346 Short-term lease cost Short-term lease cost Selling and marketing, general and administrative 1,662 879 1,662 879 Variable lease cost Variable lease cost Cost of sales — 236 Variable lease cost Selling and marketing, general and administrative — 270 — 506 Total operating lease cost $ 6,636 $ 4,731 The following table summarizes future operating lease payments as of December 31, 2022 : (in thousands) Future Minimum Payments 2023 $ 5,407 2024 4,532 2025 1,729 2026 1,372 2027 1,096 Thereafter 5,145 Total 19,281 Less: Imputed Interest (1,634) Present value of net lease payments $ 17,647 The following table includes supplemental lease information: Supplemental Cash Flow Information (dollars in thousands) December 31, 2022 December 31, 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 2,981 $ 3,041 Lease liabilities arising from new ROU assets Operating leases $ 4,476 $ 5,707 Weighted average remaining lease term (in years) Operating leases 6.0 6.3 Weighted average discount rate Operating leases 2.98 % 2.75 % |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2022 and 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. As of December 31, 2022 and 2021, the value of the Private Placement Warrants was determined using a Monte Carlo simulation. The Private Placement Warrants are classified as a Level 3 financial instrument. There was no activity in Warrant liability related to the Private Placement Warrants during the periods presented. The contingent consideration outstanding as of December 31, 2021 was paid in the second quarter of 2022. As of December 31, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents: Money market funds $ 513,009 $ — $ — $ 513,009 Liabilities Warrant liability — Private Placement Warrants — — 15,473 15,473 As of December 31, 2021 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents: Money market funds $ 861,943 $ — $ — $ 861,943 Liabilities Contingent consideration $ — $ — $ 783 $ 783 Warrant liability — Private Placement Warrants $ — $ — $ 93,816 $ 93,816 Money Market Funds The Company’s investment in money market funds that are classified as cash equivalents hold underlying investments with a weighted average maturity of 90 days or less and are recognized at fair value. The valuations of these securities are based on quoted prices in active markets for identical assets, when available, or pricing models whereby all significant inputs are observable or can be derived from or corroborated by observable market data. The Company reviews security pricing and assesses liquidity on a quarterly basis. As of December 31, 2022 , the Company’s U.S. portfolio had no material exposure to money market funds with a fluctuating net asset value. Warrant Liabilities The Public Warrants and Private Placement Warrants (collectively, the “Warrants”) are accounted for as liabilities in accordance with ASC 815-40 and are presented within Warrant liabilities on the Company’s Consolidated Balance Sheets. The Warrants are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the Company’s Consolidated Statements of Comprehensive Income (Loss) . On October 4, 2021, the Company issued a press release stating that it would redeem all of the Public Warrants that remained outstanding on November 3, 2021, for a redemption price of $0.10 per Public Warrant. On November 3, 2021, all 16.2 million outstanding Public Warrants were either exercised for cash or on a cashless basis or were redeemed. These outstanding Public Warrants that were exercised comprised 15.3 million Public Warrants issued in connection with the Vesper initial public offering and an additional 0.9 million warrants that became Public Warrants due to the sale of Private Placement Warrants. Approximately 16.1 million Public Warrants were exercised for cash at an exercise price of $11.50 per share of Class A Common Stock, 74,104 Public Warrants were exercised on a cashless basis in exchange for an aggregate of 26,732 shares of Class A Common Stock, and 75,016 warrants were redeemed for $0.10 per warrant, in each case in accordance with the terms of the Warrant Agreement. In 2021, total cash proceeds generated from exercises of the Public Warrants were $185.4 million. In addition, 0.3 million Private Placement Warrants were exercised in 2021 for total cash proceeds of $3.0 million. Accordingly, as of December 31, 2022 and 2021, there were no Public Warrants outstanding. At December 31, 2022 and 2021 , the outstanding Private Placement Warrants were valued using a Monte Carlo simulation. As of December 31, 2022, the Company had approximately 7 million Private Placement Warrants outstanding. Contingent Consideration |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment consist of the following as of the periods indicated: (in thousands) Useful life (years) December 31, 2022 December 31, 2021 Furniture and fixtures 2-7 $ 5,364 $ 4,074 Computers and equipment 3-5 4,901 4,010 Machinery and equipment 2-5 6,427 3,669 Autos and trucks 5 161 1,163 Tooling 5 638 1,389 Leasehold improvements Shorter of remaining lease 11,812 5,086 Total property and equipment 29,303 19,391 Less: accumulated depreciation and amortization (12,494) (8,561) Construction in progress 1,375 5,353 Property and equipment, net $ 18,184 $ 16,183 During the year ended December 31, 2022, the Company recorded a loss on the disposal of property and equipment, net of $2.0 million. The loss on disposal of property and equipment, net was recorded in the Consolidated Statements of Comprehensive Income (Loss) primarily in general and administrative expense. Depreciation expense was as follows for the periods indicated: Year Ended December 31, (in thousands) 2022 2021 2020 Cost of sales $ 2,126 $ 1,313 $ 1,161 General and administrative 3,295 1,625 1,391 Selling and marketing 1,743 1,548 — Total depreciation expense $ 7,164 $ 4,486 $ 2,552 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | Goodwill and Intangible Assets, net The gross carrying amount and accumulated amortization of the Company’s intangible assets, net, as of December 31, 2022 were as follows: (in thousands) Gross Accumulated Net Carrying Estimated Trademarks $ 10,907 $ (4,119) $ 6,788 15 Non-compete agreement 776 (395) 381 3 Customer relationships 18,089 (7,602) 10,487 5-10 Developed technology 73,188 (54,422) 18,766 3-8 Patents 2,226 (375) 1,851 3-19 Capitalized software 9,620 (1,507) 8,113 3-5 Total intangible assets $ 114,806 $ (68,420) $ 46,386 During the year ended December 31, 2022, the Company recorded a loss on the disposal of intangible assets of $2.5 million. The loss on disposal of intangible assets was recorded in the Consolidated Statements of Comprehensive Income (Loss) primarily in general and administrative expense. The gross carrying amount and accumulated amortization of the Company’s intangible assets, net, as of December 31, 2021 were as follows: (in thousands) Gross Accumulated Net Carrying Estimated Trademarks $ 10,048 $ (3,442) $ 6,606 15 Non-compete agreement 809 (139) 670 3 Customer relationships 18,625 (4,391) 14,234 5-10 Developed technology 70,900 (45,051) 25,849 8 Patents 2,050 (295) 1,755 3-19 Capitalized software 9,867 (2,971) 6,896 3-5 Total intangible assets $ 112,299 $ (56,289) $ 56,010 Amortization expense was as follows for the periods indicated: Year Ended December 31, (in thousands) 2022 2021 2020 Cost of sales $ 9,450 $ 9,000 $ 9,465 General and administrative 2,969 2,477 2,384 Selling and marketing 2,433 1,820 — Total amortization expense $ 14,852 $ 13,297 $ 11,849 The changes in the carrying value of goodwill are as follows: Year Ended December 31, (in thousands) 2022 2021 2020 Beginning balance $ 123,694 $ 98,531 $ 98,520 Measurement period adjustments 2,154 26,600 — Foreign currency translation impact (1,255) (1,437) 11 Ending balance $ 124,593 $ 123,694 $ 98,531 The measurement period adjustments include a $0.2 million increase due to adjustment of acquisition date tax liability for Ecomedic and a $1.98 million increase due to the finalization of the fair value of contingent consideration related to Sidermica during the year ended December 31, 2022 |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Amended and Restated Credit Facility On November 14, 2022, the Company, as successor by assumption to Hydrafacial (formerly known as Edge Systems LLC), a California limited liability company, entered into an Amended and Restated Credit Agreement (as it may be further amended, restated, supplemented or modified from time to time, the “Credit Agreement”) with JPMorgan Chase Bank, N.A. (the “Administrative Agent”). Hydrafacial and the Administrative Agent were party to that certain Credit Agreement, dated as of December 30, 2021 (the “Original Credit Agreement”). The Company, Hydrafacial, the other loan parties thereto, the lenders party thereto, and the Administrative Agent agreed to amend and restate the Original Credit Agreement in order to (i) extend the maturity date with respect to the existing revolving credit facility under the Original Credit Agreement to November 14, 2027, (ii) re-evidence the “Obligations” under, and as defined in, the Original Credit Agreement, which shall be repayable in accordance with the terms of the Credit Agreement, (iii) set forth the terms and conditions under which the lenders will, from time to time, make loans and extend other financial accommodations to or for the benefit of the Company and (iv) transition from LIBOR to the secured overnight financing rate (SOFR), (v) provide that the Company shall assume all of the rights and “Obligations” of Hydrafacial under, and as each such term is defined in, the Original Credit Agreement and (vi) provide that Hydrafacial shall be released and discharged solely from the obligations of the “Borrower” under, and as defined in, the Original Credit Agreement, and shall be a subsidiary guarantor and a loan party thereunder. The Credit Agreement provides for a $50 million revolving credit facility with a maturity date of November 14, 2027. In addition, the Borrower has the ability from time to time to increase the revolving commitments or enter into one or more tranches of term loans up to an additional aggregate amount not to exceed $50 million, subject to receipt of lender commitments and certain conditions precedent. Borrowings under the Credit Agreement are secured by certain collateral of the loan parties and are guaranteed by all of the Company’s domestic subsidiaries, each of whom will derive substantial benefit from the revolving credit facility. In specified circumstances, additional guarantors are required to be added. The Credit Agreement contains various restrictive covenants subject to certain exceptions, including limitations on the Company’s ability to incur indebtedness and certain liens, make certain investments, become liable under contingent obligations in certain circumstances, make certain restricted payments, make certain dispositions within guidelines and limits, engage in certain affiliate transactions, alter its fundamental business or make certain fundamental changes, and requirements to maintain financial covenants, including maintaining a leverage ratio of no greater than 3.00 to 1.00 and maintaining a fixed charge coverage ratio of not less than 1.15 to 1.00. As of December 31, 2022 the Company was in compliance with all restricted and financial covenants of the Credit Agreement. The leverage ratio also determines pricing under the Credit Agreement. At the Borrower’s option, borrowings under the revolving credit facility accrue interest at a rate equal to either Term SOFR Rate or a specified base rate plus an applicable margin. The applicable margin is linked to the leverage ratio. The margins range from 1.50% to 2.00% per annum for Term SOFR Rate loans and 0.50% to 1.00% per annum for base rate loans. The revolving credit facility is subject to a commitment fee payable on the unused revolving credit facility commitments ranging from 0.25% to 0.35%, depending on the Borrower’s leverage ratio. As of December 31, 2022 the Company’s unused commitment rate was 0.25%. The Borrower is also required to pay certain fees to the administrative agent and letter of credit issuers under the revolving credit facility. During the term of the revolving credit facility, the Borrower may borrow, repay and re-borrow amounts available under the revolving credit facility, subject to voluntary reductions of the swing line, letter of credit and revolving credit commitments. In addition, the Credit Agreement includes events (including, without limitation, a non-payment under the loan, a breach of warranties and representations in any material respect, non-compliance with covenants by a loan party, cross-default for payment defaults and cross-acceleration for other defaults under material debt or a change of control) which, if not cured within the time period, if any, specified would constitute an event of default. Upon the occurrence of such events of default, the Company could not request borrowings and the lenders may elect to accelerate the outstanding principal and accrued and unpaid interest under the revolving credit facility. Further, outstanding principal and accrued and unpaid interest thereon automatically accelerate upon the entry of an order for relief with respect to any loan party under any bankruptcy, insolvency or other similar law. As of December 31, 2022 the Credit Agreement remains undrawn and there is no outstanding balance under the revolving credit facility. Convertible Senior Notes On September 14, 2021, the Company issued an aggregate of $750 million in principal amount of its 1.25% Convertible Senior Notes due 2026 (the “Notes”). The Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of September 14, 2021, between the Company and U.S. Bank National Association, as trustee. Pursuant to the purchase agreement between the Company and the initial purchasers of the Notes, the Company granted the initial purchasers an option to purchase, for settlement within a period of 13 days from, and including, the date the Notes were first issued, up to an additional $100 million principal amount of Notes. The Notes issued on September 14, 2021 include the $100 million principal amount of Notes issued pursuant to the full exercise by the initial purchasers of such option. The Notes are the Company’s senior, unsecured obligations and are (i) equal in right of payment with the Company’s existing and future senior, unsecured indebtedness; (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the Notes; (iii) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries. The Notes accrue interest at a rate of 1.25% per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2022. The Notes mature on October 1, 2026, unless earlier repurchased, redeemed or converted. Before April 1, 2026, noteholders have the right to convert their Notes only upon the occurrence of certain events. From and after April 1, 2026, noteholders may convert their Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. The initial conversion rate is 31.4859 shares of common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $31.76 per share of common stock. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. The conversion price as of December 31, 2022 was $31.76 per share of common stock. The Notes are redeemable, in whole or in part (subject to certain limitations described below), at the Company’s option at any time, and from time to time, on or after October 6, 2024, and on or before the 40 th scheduled trading day immediately before the maturity date, but only if certain liquidity conditions are satisfied and the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. However, the Company may not redeem less than all of the outstanding notes unless at least $100.0 million aggregate principal amount of notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice. The redemption price will be a cash amount equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, calling any Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption. If certain corporate events that constitute a “Fundamental Change” (as defined in the Indenture) occur, then, subject to a limited exception for certain cash mergers, noteholders may require the Company to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock. The Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Indenture), which include the following: (i) certain payment defaults on the Notes (which, in the case of a default in the payment of interest on the Notes, will be subject to a 30-day cure period); (ii) the Company’s failure to send certain notices under the Indenture within specified periods of time; (iii) the Company’s failure to convert a Note upon the exercise of the conversion right with respect to such Note, subject to a three business-day cure period; (iv) the Company’s failure to comply with certain covenants in the Indenture relating to the Company’s ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to another person; (v) a default by the Company in its other obligations or agreements under the Indenture or the Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Indenture; (vi) certain defaults by the Company or any of its subsidiaries with respect to indebtedness for money borrowed of at least $45,000,000; (vii) the rendering of certain judgments against the Company or any of its significant subsidiaries for the payment of at least $45,000,000, where such judgments are not discharged or stayed within 60 days after the date on which the right to appeal has expired or on which all rights to appeal have been extinguished and (viii) certain events of bankruptcy, insolvency and reorganization involving the Company or any of its significant subsidiaries. If an Event of Default involving bankruptcy, insolvency or reorganization events with respect to the Company (and not solely with respect to a significant subsidiary of the Company) occurs, then the principal amount of, and all accrued and unpaid interest on, all of the Notes then outstanding will immediately become due and payable without any further action or notice by any person. If any other Event of Default occurs and is continuing, then, the Trustee, by notice to the Company, or noteholders of at least 25% of the aggregate principal amount of Notes then outstanding, by notice to the Company and the Trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the Notes then outstanding to become due and payable immediately. However, notwithstanding the foregoing, the Company may elect, at its option, that the sole remedy for an Event of Default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture consists exclusively of the right of the noteholders to receive special interest on the Notes for up to 180 days at a specified rate per annum not exceeding 1.00% on the principal amount of the Notes. The Notes were issued to the initial purchasers of such Notes in transactions not involving any public offering in reliance upon Section 4(a)(2) of the Securities Act. The Notes were resold by the initial purchasers to persons whom the initial purchasers reasonably believe are “qualified institutional buyers,” as defined in, and in accordance with, Rule 144A under the Securities Act. The total amount of debt issuance costs of $21.3 million was recorded as a reduction to “Convertible senior notes, net” in the Company’s Consolidated Balance Sheets and are being amortized as interest expense over the term of the Notes using the effective interest method. During the years ended December 31, 2022 and December 31, 2021, the Company recognized $4.2 million and $1.3 million in interest expense related to the amortization of the debt issuance costs related to the Notes, respectively. The following is a summary of the Company’s Notes as of December 31, 2022: Fair Value (in thousands) Principal Amount Unamortized Issuance Costs Net Carrying Amount Level 1.25% Convertible Notes due 2026 $ 750,000 $ 15,857 $ 734,143 $ 567,000 Level 2 The following is a summary of the Company’s Notes as of December 31, 2021: Fair Value (in thousands) Principal Amount Unamortized Issuance Costs Net Carrying Amount Level 1.25% Convertible Notes due 2026 $ 750,000 $ 20,086 $ 729,914 $ 794,325 Level 2 The Notes are carried at face value less the unamortized debt issuance costs on the Company’s Consolidated Balance Sheets. As of December 31, 2022, the estimated fair value of the Notes was approximately $567 million. The estimated fair value of the Notes was determined based on the actual bid price of the Notes on December 31, 2022. The Notes mature on October 2026, and as of December 31, 2022, the remaining life of the Notes is approximately 3.8 years. Capped Call Transactions On September 9, 2021, in connection with the pricing of the offering of Notes, the Company entered into privately negotiated capped call transactions (the “Base Capped Call Transactions”) with Bank of Montreal, Credit Suisse Capital LLC, Deutsche Bank AG, London Branch, Goldman Sachs & Co. LLC, JPMorgan Chase Bank, National Association, Mizuho Markets Americas LLC and Wells Fargo Bank, National Association (the “Option Counterparties”). In addition, on September 10, 2021, in connection with the initial purchasers’ exercise of their option to purchase additional Notes, the Company entered into additional capped call transactions (the “Additional Capped Call Transactions,” and, together with the Base Capped Call Transactions, the “Capped Call Transactions”) with each of the Option Counterparties. The Capped Call Transactions cover, subject to customary anti-dilution adjustments, the aggregate number of shares of the Company’s common stock that initially underlie the Notes, and are expected generally to reduce potential dilution to the Company’s common stock upon any conversion of Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap, based on the cap price of the Capped Call Transactions. The cap price of the Capped Call Transactions is initially $47.94, which represents a premium of 100% over the last reported sale price of the Company’s common stock on September 9, 2021. The cost of the Capped Call Transactions was approximately $90.2 million. The Capped Call Transactions are separate transactions, each between the Company and the applicable Option Counterparty, and are not part of the terms of the Notes and do not affect any holder’s rights under the Notes or the Indenture. Holders of the Notes will not have any rights with respect to the Capped Call Transactions. Business Combination In connection with the Closing of the Business Combination, all of Hydrafacial’s existing debt under its credit facilities were repaid and its credit facilities were extinguished. T he related write-off of the deferred financing costs totaled $2.3 million and prepayment penalties totaled $2.0 million in 2021. Both are included in the Other expense (income), net on the Company’s Consolidated Statements of Comprehensive Income (Loss). Defer red financing costs expense for the year ended December 31, 2021 amounted to $0.5 million for the existing debt prior to the Closing of the Business Combination while the amortization of issuance costs for the Notes amounted to $1.3 million during 2021 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law. The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, the creation of certain refundable employee retention credits, and technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property (“QIP”). On December 27, 2020, the United States enacted the Consolidated Appropriations Act which extended many of the benefits of the CARES Act that were scheduled to expire. The Company does not expect a material impact of Consolidated Appropriations Act on the Company’s Consolidated Financial Statements and related disclosures. On June 29, 2020, the State of California passed Assembly Bill 85 which suspends the California net operating loss deduction for the 2020-2022 tax years and the research and development credit usage for the same period (for credit usages in excess of $5.0 million). On March 11, 2021 the United States enacted the American Rescue Plan Act of 2021 (“American Rescue Plan”). The American Rescue Plan includes various income and payroll tax measures. The Company does not expect a material impact of the American Rescue Plan on the Company’s Consolidated Financial Statements and related disclosures. The Inflation Reduction Act, signed into law on August 16, 2022, provides tax incentives for certain industries and imposes a 15% minimum tax on the book income of certain large corporations and a 1% excise tax on stock buybacks. The Company may be subject to the new excise tax on certain stock buybacks that occur after December 31, 2022. The Company does not anticipate a material impact from the Inflation Reduction Act on the Company's consolidated financial statements. The following table presents domestic and foreign components of net income (loss) before income taxes as follows for the periods indicated: Year Ended December 31, (in thousands) 2022 2021 Domestic $ 43,641 $ (375,542) Foreign 1,391 (1,808) Income (loss) before taxes $ 45,032 $ (377,350) The federal, state and foreign components of the income tax expense (benefit) are summarized as follows: Year Ended December 31, (in thousands) 2022 2021 Current: Federal $ 407 $ (727) State 306 513 Foreign 1,722 1,735 Total current income tax expense 2,435 1,521 Deferred: Federal (257) (3,319) State (166) (80) Foreign (1,364) (364) (1,787) (3,763) Total income tax expense (benefit) $ 648 $ (2,242) The effective tax rate of the provision for income tax differs from the federal statutory rate as follows for the periods indicated: Year Ended December 31, (in thousands) 2022 2021 Federal statutory income tax rate $ 9,443 21.0 % $ (79,243) 21.0 % State taxes, net of federal benefit (1,041) (2.3) (1,041) 0.3 Officer compensation 2,324 5.2 486 (0.1) Change in fair value of warrants (16,452) (36.6) 58,236 (15.4) Change in fair value of earn-out shares — — 9,891 (2.6) Transaction Costs (32) (0.1) 3,312 (0.9) Foreign rate differential (85) (0.2) 475 (0.1) R&D credit (900) (2.0) (152) — Change in valuation allowance 5,914 13.2 4,064 (1.1) Other 1,477 3.3 1,730 (0.5) Income tax expense (benefit) $ 648 1.5 % $ (2,242) 0.6 % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts more likely than not to be realized. The components of the deferred tax assets are as follows for the periods indicated: Year Ended December 31, (in thousands) 2022 2021 Deferred income tax assets State taxes $ 55 $ 69 Accrued expenses 1,608 3,610 Inventories 4,772 1,905 Accounts receivable 625 639 Section 163(j) limitation 4,782 3,224 Net operating loss carryforwards 3,680 5,354 Stock-based compensation 5,072 1,883 Lease liabilities 4,469 4,104 Other 685 220 Total deferred income tax assets 25,748 21,008 Deferred income tax liabilities Goodwill and intangibles (3,852) (7,922) Prepaid expenses (435) (526) Right-of-use Assets (3,966) (3,733) Property and equipment (3,852) (3,134) Total deferred tax liabilities (12,105) (15,315) Valuation allowance (14,839) (8,924) Net deferred income tax liabilities $ (1,196) $ (3,231) The Company’s net deferred tax liability as presented in the consolidated balance sheets consists of the following items as of the dates indicated: (in thousands) December 31, 2022 December 31, 2021 Deferred income tax assets $ 815 $ 330 Deferred income tax liabilities (2,011) (3,561) Net deferred income tax liability $ (1,196) $ (3,231) The Company has established a valuation allowance against a portion of its remaining deferred tax assets because it is more likely than not that certain deferred tax assets will not be realized. In determining whether deferred tax assets are realizable, the Company considered numerous factors including historical profitability, the amount of future taxable income and the existence of taxable temporary differences that can be used to realize deferred tax assets. The valuation allowance increased approximately $5.9 million in 2022 from 2021 primarily due to recognizing valuation allowances against deferred tax assets of certain state and foreign net operating loss carryforwards and federal and state interest carryforwards. If the Company were to release the valuation allowance upon management determining that it is more likely than not the deferred tax assets could be recognized, approximately $14.8 million of income tax benefit would be recorded to continuing operations. At December 31, 2022, the Company had gross federal, state and foreign net operating loss carryforwards of approximately $9.0 million, $14.7 million and $4.7 million, respectively. The state losses expire beginning in 2025 and the foreign losses beginning in 2026. The federal net operating losses carryforward indefinitely. As of December 31, 2022 and December 31, 2021, the Company had recorded gross unrecognized tax benefits of approximately $0.7 million and $0.2 million, respectively. All of the unrecognized tax benefits as of December 31, 2022, if recognized, would not materially impact the effective tax rate. As of December 31, 2022, there were no unrecognized tax benefits that the Company expects would change significantly over the next twelve months. The Company recognizes interest expense and penalties associated with uncertain tax positions as a component of income tax expense. The Company has not recognized any interest or penalties because of losses. A reconciliation of the beginning and ending balances of unrecognized tax benefits is as follows: (in thousands) December 31, 2022 December 31, 2021 Unrecognized tax benefits at beginning of period $ 210 $ 270 Increases for tax positions in prior periods 260 $ — Decreases for tax positions in prior periods (36) $ (60) Increases for tax positions in current period 240 $ — Total unrecognized tax benefits $ 674 $ 210 The Company is subject to taxation and files income tax returns in the United States federal jurisdiction and many state and foreign jurisdictions. The Company is not currently under examination by income tax authorities in federal, state or other jurisdictions. The Company’s tax returns remain open for examination in the United States for years 2019 through 2021. Our foreign subsidiaries are generally subject to examination three years following the year in which the tax obligation originated. The years subject to audit may be extended if the entity substantially understates corporate income tax. APB 23 (codified as FASB ASC 740-10-25-3) allows an exception to the general rule that a U.S. multinational company must accrue U.S. taxes on foreign earnings of its controlled non-U.S. subsidiaries. The Company will continue to indefinitely reinvest earnings from its foreign subsidiaries, which are not significant. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit PlanThe Company sponsors a defined contribution 401(k) and profit sharing plan that all regular employees are eligible to participate in after one month of service. The Plan is administered by a third-party administrator. Contributions to the plans were $2.2 million, $1.4 million and $0.8 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation The Beauty Health Company 2021 Incentive Award Plan (the “2021 Plan”) became effective upon the consummation of the Business Combination. Pursuant to the 2021 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, other stock or cash based awards to eligible service providers. The aggregate number of shares of the Company’s Class A Common Stock that may be issued pursuant to awards granted under the 2021 Plan is the sum of (i) 14,839,640 and (ii) an annual increase on January 1 of each calendar year (commencing with January 1, 2022 and ending on and including January 1, 2031) equal to a number of shares equal to 4% of the aggregate shares outstanding as of December 31 of the immediately preceding calendar year (or such lesser number of shares as is determined by the Company’s Board of Directors), subject to adjustment by the plan administrator in the event of certain changes in our corporate structure. The annual increase on January 1, 2022 amounted to 6.0 million shares of the Company’s Class A Common Stock. The maximum number of shares that may be granted with respect to incentive stock options (“ISOs”) under the 2021 Plan is 7,500,000. At December 31, 2022 , an aggregate 9.9 million shares of the Company’s Class A Common Stock were reserved for the issuance of awards under the 2021 Plan. ESPP The Company maintains the Employee Stock Purchase Plan (the “ESPP”) for employees located in the United States, which became effective upon the consummation of the Business Combination. The aggregate number of shares of the Company’s Class A Common Stock initially reserved for issuance pursuant to rights granted under the ESPP was 2,000,000. In addition, on the first day of each calendar year beginning on January 1, 2022 and ending on (and including) January 1, 2031, the number of shares available for issuance under the ESPP will be increased by a number of shares equal to the lesser of (1) one percent (1%) of the shares outstanding on the final day of the immediately preceding calendar year, and (2) such smaller number of shares as determined by the Company’s Board of Directors. Under the ESPP, eligible employees can have up to 10% of their earnings withheld, up to certain maximums, to be used to purchase shares of the Company’s Class A Common Stock at certain purchase dates. The price of the Company’s Class A Common Stock purchased under the ESPP for the offering periods is equal to 85% of the lesser of the fair market value of a share of Class A Common Stock of the Company on the beginning or the end of the offering period. As of December 31, 2022, there were 206,112 shares of the Company’s Class A Common Stock that were purchased under the ESPP. The Company is currently going through its third offering period which ends May 19, 2023. The Company recognized an immaterial amount of compensation expense related to the ESPP for the year ended December 31, 2022. As of December 31, 2021, there were no shares of the Company’s Class A Common Stock that were purchased under the ESPP. The Company recognized an immaterial amount of compensation expense related to the ESPP for the year ended December 31, 2021. Stock Options The following table summarizes the Company’s stock option activity for the year ended December 31, 2022: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding - January 1, 2022 6,785,020 $ 15.64 9.45 $ 59,482 Granted 10,500 22.68 Forfeited (1,144,700) 18.60 Expired (49,050) 15.77 Outstanding - December 31, 2022 5,601,770 15.21 8.34 — Vested and Exercisable - December 31, 2022 1,446,117 15.31 8.06 — Options vested and expected to vest - December 31, 2022 5,601,770 $ 15.21 8.34 $ — The weighted-average grant date fair value of the stock options granted during the year ended December 31, 2022 and 2021 was $12.23 and $7.84, respectively. At December 31, 2022, aggregate unrecognized compensation cost for unvested stock options was $27.1 million recognized over a weighted average period of 2.46 years. At December 31, 2021, aggregate unrecognized compensation cost for unvested stock options was $49.0 million recognized over a weighted average period of 3.48 years. The stock options granted generally vest over a four year period. Restricted Stock Units (“RSUs”) and Performance-based Restricted Stock Units (“PSUs”) The Company reserves the right to grant RSUs to certain employees, executives and directors. The RSUs granted are eligible to vest over the service period, which is generally over three PSUs are awarded to select executive officers pursuant to the 2021 Plan and vest based on either (i) the performance of the Company’s Class A Common Stock (“Top-hat”) or (ii) the total shareholder return of the Company’s Class A Common Stock relative to a defined peer group (“TSR”). Top-hat PSUs are earned over a four-year performance period, based on the performance of the Company’s Class A Common Stock, and subject to the recipient’s continued employment through the end of the performance period. The actual number of shares of the Company’s Class A Common Stock to be issued, ranging from 0% to 100% of the number of PSUs granted, will be determined based on the greater of (i) the Company’s average stock price during the 90-day period ending on the third anniversary of the vesting commencement date and (ii) the Company’s average stock price during the 90-day period ending on the fourth anniversary of the vesting commencement date. TSR PSUs are earned over a three-year performance period, based on the attainment of pre-determined goals related to the Company’s total shareholder return relative to a defined peer group, and subject to the recipient’s continued employment through the end of the performance period. The actual number of shares of the Company’s Class A Common Stock to be issued will range from 0% to 200% of the number of PSUs granted. The fair value of PSU awards is recognized on a straight-line basis over their measurement period as compensation expense, and is not subject to reversal even if the market condition is not achieved. The fair value of PSUs was determined using a Monte Carlo simulation subject to the performance conditions of the underlying PSUs with the following assumptions: Input 2022 Grants 2021 Grants Risk-free interest rate 1.52% - 4.23% 0.50% - 0.65% Expected volatility of the Company’s Class A Common Stock 57.7% - 66.0% 55.0% The following table summarizes the Company’s equity award activity for the year ended December 31, 2022: Weighted Average Grant Date Fair Value RSUs PSUs RSUs PSUs Outstanding - January 1, 2022 380,775 975,000 $ 25.88 $ 11.39 Granted 2,936,252 1,734,864 13.47 8.79 Vested (207,164) — 20.12 — Forfeited (529,711) (209,738) 14.95 14.30 Outstanding - December 31, 2022 2,580,152 2,500,126 14.47 9.34 The fair value of equity awards that vested, determined based on their respective fair values at vesting date, was $2.7 million for the fiscal year ended December 31, 2022, and $0.7 million for the fiscal year ended December 31, 2021. All of the outstanding equity awards are expected to vest. At December 31, 2022, the aggregate unrecognized compensation cost for unvested RSUs and PSUs was $28.6 million and $16.4 million, respectively, recognized over a weighted average period of 2.42 years and 2.00 years, respectively. Compensation expense attributable to net stock-based compensation was as follows for the periods indicated: Year Ended December 31, (in thousands) 2022 2021 2020 Cost of sales 839 405 67 Selling and marketing 9,363 3,547 58 Research and development 602 195 — General and administrative 17,691 8,271 238 Stock-based compensation expense $ 28,495 $ 12,418 $ 363 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies On October 21, 2020, Hydrafacial filed a complaint against Ageless Serums LLC (“Ageless”) in the United States District Court for the Central District of California, Western Division, captioned Edge Systems LLC v. Ageless Serums LLC , Case No. 2:20-cv-09669-FMO-PVC (the “California Case”), for contributory trademark infringement, false designation of origin, induced breach of contract, tortious interference with contractual relations, and unfair competition. In the complaint, Hydrafacial alleges that Ageless is selling its serums to Hydrafacial customers and intentionally encouraging those customers to market treatments performed by such customers as “Hydrafacial Treatments,” in violation of the customers’ license agreements with Hydrafacial and that Ageless improperly markets its products for use as part of the Hydrafacial treatment. Hydrafacial is seeking monetary damages and injunctive relief. Additionally, on December 22, 2020, Hydrafacial filed a complaint against Ageless in the United States District Court for the Southern District of Texas, Houston Division, captioned Edge Systems LLC v. Ageless Serums LLC , Case No. 4:20-cv 04335 (“the Texas Case”), alleging infringement of six of Hydrafacial’s patents. Hydrafacial is seeking monetary damages and injunctive relief. Ageless ultimately answered and asserted counterclaims in both actions. On May 5, 2022, Ageless filed a Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the Southern District of Texas, Houston Division, and the California Case and Texas Case were stayed. On September 7, 2022, Hydrafacial filed a proof of claim, asserting a $12,616,983 general unsecured claim for damages arising from claims alleged in the California Case and Texas Case. On January 4, 2023, Hydrafacial filed an Objection to the Confirmation of Debtor’s Subchapter V Plan of Reorganization and Brief in Support. Hydrafacial plans to continue a vigorous pursuit of its claims against Ageless. On December 14, 2020, Hydrafacial filed a complaint against Cartessa Aesthetics, LLC (“Cartessa”) in the United States District Court for the Eastern District of New York, captioned Edge Systems LLC v. Cartessa Aesthetics, LLC , Case No. 1:20-cv-6082, for patent infringement arising from Cartessa’s sale of a delivery system that allegedly infringes five of Hydrafacial’s |
Concentrations
Concentrations | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Concentrations | ConcentrationsNo single customer accounted for 10% or more of consolidated Net sales during the years ended December 31, 2022 and December 31, 2021.As of December 31, 2022 the Company had one customer that accounted for 12% of the Company’s accounts receivable balance. As of December 31, 2021, the Company had no customers that accounted for 10% or more of the accounts receivable balance. |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions Registration Rights Agreement In connection with the consummation of the Business Combination, on May 4, 2021, the Company entered into that certain Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”) with BLS Investor Group LLC and the Hydrafacial stockholders. Pursuant to the terms of the Registration Rights Agreement, (i) any outstanding shares of Class A Common Stock or any other equity securities (including the Private Placement Warrants and including shares of Class A Common Stock issued or issuable upon the exercise of any other equity security) of the Company held by the Sponsor or the Hydrafacial stockholders (together, the “Restricted Stockholders”) as of the date of the Registration Rights Agreement or thereafter acquired by a Restricted Stockholder (including the shares of Class A Common Stock issued upon conversion of the 11,500,000 Founder Shares that were owned by the Sponsor and converted into shares of Class A Common Stock in connection with the Business Combination and upon exercise of any Private Placement Warrants) and shares of Class A Common Stock issued as earn-out shares to the Hydrafacial stockholders and (ii) any other equity security of the Company issued or issuable with respect to any such share of common stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise will be entitled to registration rights. The Registration Rights Agreement provides that the Company will, within 60 days after the consummation of the Business Combination, file with the SEC a shelf registration statement registering the resale of the shares of common stock held by the Restricted Stockholders and will use its reasonable best efforts to have such registration statement declared effective as soon as practicable after the filing thereof, but in no event later than 60 days following the filing deadline. The Company filed such registration statement on July 19, 2021 and it was declared effective by the SEC on July 26, 2021. The Hydrafacial stockholders are entitled to make up to an aggregate of two demands for registration, excluding short form demands, that the Company register shares of common stock held by these parties. In addition, the Restricted Stockholders have certain “piggy-back” registration rights. The Company will bear the expenses incurred in connection with the filing of any registration statements filed pursuant to the terms of the Registration Rights Agreement. The Company and the Restricted Stockholders agree in the Registration Rights Agreement to provide customary indemnification in connection with any offerings of common stock effected pursuant to the terms of the Registration Rights Agreement. Pursuant to the Registration Rights Agreement, the Sponsor agreed to restrictions on the transfer of its securities issued in the Company’s initial public offering, which (i) in the case of the Founder Shares is one year after the completion of the Business Combination unless (A) the closing price of the common stock equals or exceeds $12.00 per share for 20 days out of any 30-trading-day period commencing at least 150 days following the Closing of the Business Combination or (B) the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property, and (ii) in the case of the Private Placement Warrants and the respective Class A Common Stock underlying the Private Placement Warrants is 30 days after the completion of the Business Combination. The Sponsor and its permitted transferees will also be required, subject to the terms and conditions in the Registration Rights Agreement, not to transfer their Private Placement Warrants (as defined in the Registration Rights Agreement) or shares of common stock issuable upon the exercise thereof for 30 days following the Closing. Investor Rights Agreement In connection with the consummation of the Business Combination, on May 4, 2021, the Company and LCP Edge Holdco, LLC entered into that certain Investor Rights Agreement (the “Investor Rights Agreement”). Pursuant to the Investor Rights Agreement, LCP has the right to designate a number of directors for appointment or election to the Company’s board of directors as follows: (i) one director for so long as LCP holds at least 10% of the outstanding Class A Common Stock, (ii) two directors for so long as LCP holds at least 15% of the outstanding Class A Common Stock, and (iii) three directors for so long as LCP holds at least 40% of the outstanding Class A Common Stock. Pursuant to the Investor Rights Agreement, for so long as LCP holds at least 10% of the outstanding Class A Common Stock, LCP will be entitled to have at least one of its designees represented on the compensation committee and nominating committee and corporate governance committee of the Company’s board of directors. Amended and Restated Management Services Agreement Hydrafacial entered into a Management Services Agreement, dated December 1, 2016 with Linden Capital Partners III LP (“Linden Capital Partners III”) and DW Management Services, L.L.C. (“DW Management Services”) pursuant to which the parties receive quarterly monitoring fees of the greater of (a) $125,000 and (b) 1.25% of Last Twelve Months EBITDA multiplied by the quotient of (x) the aggregate capital invested by the investors of DW Healthcare Partners IV (B), L.P. (“DWHP Investors”) into LCP and/or its subsidiaries as of such date, divided by (y) the sum of (i) the aggregate capital invested by the DWHP Investors into LCP and/or its subsidiaries, plus (ii) the aggregate capital invested by Linden Capital Partners III into LCP and/or its subsidiaries as of the date of payment. In addition, the management services agreement provides for other fees in relation to services that may be provided in connection with equity and/or debt financing, acquisition of any other business, company, product line or enterprise, or divestiture of any division, business, and product or material assets. The fees vary between 1% and 2% of the related transaction amount. Linden Capital Partners III also received a transaction fee upon the consummation of the Business Combination. In connection with the consummation of the Business Combination, on May 4, 2021, the Company, its subsidiary, Edge Systems LLC, and Linden Capital III LLC, the general partner of Linden Manager III LP (the “Linden Manager”) entered into an Amended and Restated Management Services Agreement (the “Linden Management Services Agreement”) pursuant to which the Linden Manager may continue to provide advisory services at the request of the Company related to mergers and acquisitions for one year following the Business Combination. As consideration for such services, the Company will pay a fee, equal to 1% of enterprise value of the target acquired, to the Linden Manager upon the consummation of any such transaction (the “1% Fee”). The Company has also agreed to reimburse Linden Manager for certain expenses in connection with such advisory services. However, pursuant to the Linden Management Services Agreement, the Company’s obligation to pay the 1% Fee expired twelve months after the consummation of the Business Combination on May 4, 2022. Hydrafacial recorded approximately $0.2 million of charges related to management services fees for th e year ended December 31, 2021. There were no management fees during the year ended December 31, 2022. These amounts are included in General and administrative expenses on the Company’s Consolidated Statements of Comprehensive Income (Loss). In relation to the consummation of the Business Combination, $21.0 million in transaction fees was paid to the Former Parent. These amounts are included in General and administrative expenses on the Company’s Consolidated Statements of Comprehensive Income (Loss). Miami Beach Office For the year ended December 31, 2022, the Company maintained an office in Miami Beach, Florida, whereby the Company, on a monthly basis, reimbursed an entity owned by the Company’s Executive Chairman that makes such office available to the Company for its employees and affiliates. Expense for this property was not material for the year ended December 31, 2022. No such expenses existed for the year ended December 31, 2021 . |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity Common Stock The Company is authorized to issue 320,000,000 shares of Class A Common Stock, par value of $0.0001 per share. Holders of Class A Common Stock are entitled to one vote for each share. As of December 31, 2022 and December 31, 2021, there were 132,214,695 and 150,598,047, respectively, of Class A Common Stock issued and outstanding. The Company has not declared or paid any dividends with respect to its Class A Common Stock . In connection with the Business Combination on May 4, 2021, the Company issued 35,000,000 shares of Class A Common Stock to certain qualified institutional buyers and accredited investors that agreed to purchase such shares in connection with the Business Combination for aggregate consideration of $350 million. The Company also issued 35,501,743 shares of Class A Common Stock as partial compensation to the Hydrafacial stockholders for the Business Combination. Common Stock Repurchases On September 26, 2022, the Company’s board of directors approved a common stock repurchase program pursuant to which the Company may repurchase up to $200 million of its outstanding shares of Class A Common Stock. Under the share repurchase program, repurchases can be made from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions, or accelerated share repurchase programs. The Company entered into two accelerated share repurchase agreements on September 27, 2022 and November 9, 2022, respectively, with a financial institution to repurchase a total of $200 million of Class A Common Stock. On September 27, 2022 and November 9, 2022, the Company made a payment of $100 million and $100 million, respectively, and received initial deliveries of approximately 7.7 million shares and 9.5 million shares, respectively, which represented 80% of the payment amount divided by the Company’s closing stock price on those respective dates. Under the September 27, 2022 accelerated share repurchase agreement, the Company received a final settlement of 1.6 million shares on December 16, 2022, which was based upon the average daily volume weighted average price of the Company’s Class A Common Stock during the repurchase period, less agreed upon discount. The final settlement of the November 9, 2022 accelerated share repurchase agreement is expected to occur no later than June 30, 2023. The accelerated share repurchase agreements are accounted for as a repurchases and retirements of shares and as equity forward contracts indexed to the Company’s Class A Common Stock. The equity forward contracts are classified as equity instruments under ASC 815-40, Contracts in Entity's Own Equity . The par value of the initial shares received is recorded as a reduction to the Company’s Class A Common Stock and the excess of par value is recognized as a reduction to additional paid in capital. The equity forward stock purchase contracts are classified as equity instruments and are recognized as a reduction to additional paid in capital. The initial deliveries of 7.7 million shares and 9.5 million shares under the accelerated share repurchase agreements as well as the final settlement of shares reduced the number of Class A Common Stock outstanding on the transaction date and, as a result, reduced the weighted average number of shares of Class A Common Stock outstanding used to calculate basic income per share and diluted income per share for the year ended December 31, 2022. The Company performed analysis of the average of the daily volume-weighted average price of our Class A Common Stock since the transaction dates and has determined, as of December 31, 2022, that the potential final settlement of shares of Class A Common Stock under the November 9, 2022 accelerated share repurchase agreement is anti-dilutive and therefore excluded from the calculation of diluted earnings per share. Preferred Stock The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At December 31, 2022 and December 31, 2021 , there were no shares of preferred stock issued or outstanding. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company manages its business on the basis of one operating segment and one reportable segment. As a result, the chief operating decision maker, who is the Chief Executive Officer, decides how to allocate resources and assess performance, reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocates resources and evaluates financial performance. Net sales by geographic region were as follows for the periods indicated: Year Ended December 31, (in thousands) 2022 2021 2020 Americas $ 243,243 $ 169,426 $ 81,453 Asia-Pacific 54,306 43,701 14,464 Europe, the Middle East and Africa 68,327 46,959 23,175 Total net sales $ 365,876 $ 260,086 $ 119,092 As of December 31, 2022 and December 31, 2021 substantially all of the Company’s property and equipment were held in the United States. |
Net Income (Loss) Attributable
Net Income (Loss) Attributable to Common Shareholders | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Attributable to Common Shareholders | Net Income (Loss) Attributable to Common Stockholders The following table sets forth the calculation of both basic and diluted net income (loss) per share as follows for the periods indicated: Year Ended December 31, (in thousands, except share and per share amounts) 2022 2021 2020 Net income (loss) available to common stockholders - basic $ 44,384 $ (375,108) $ (29,175) Less: Income on Private placement warrants (78,343) — — Net loss available to common stockholders - diluted $ (33,959) $ (375,108) $ (29,175) Weighted average common shares outstanding - basic 147,554,090 102,114,949 34,293,271 Effect of dilutive shares: Private placement warrants 952,222 — — Weighted average common shares outstanding - diluted 148,506,312 102,114,949 34,293,271 Basic net income (loss) per share: $ 0.30 $ (3.67) $ (0.85) Diluted net income (loss) per share $ (0.23) $ (3.67) $ (0.85) The following shares have been excluded from the calculation of the weighted average diluted shares outstanding as the effect would have been anti-dilutive or requisite performance conditions were not met: Year Ended December 31, 2022 2021 2020 Convertible Notes 23,614,425 23,614,425 — RSUs 2,580,152 380,775 — PSUs 2,500,126 975,000 — Stock Options 5,601,770 6,785,020 542 The Company performed analysis of the average of the daily volume-weighted average price of our Class A Common Stock since the transaction date and has determined, as of December 31, 2022, that the potential final settlement of shares of Class A Common Stock under the November 9, 2022 accelerated share repurchase agreement is anti-dilutive and therefore excluded from the calculation of diluted earnings per share. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsStock Purchase Agreement - Esthetic Medical Inc.On February 27, 2023, Edge Systems Intermediate, LLC, an indirect, wholly-owned subsidiary of the Company, entered into a Stock Purchase Agreement with Dr. Lawrence Groop, Kristin Groop, and Esthetic Education, LLC. Pursuant to the Stock Purchase Agreement, Edge Systems Intermediate, LLC will purchase all of the outstanding shares of Esthetic Medical Inc. in exchange for a total consideration of $16.3 million, which includes stock equal to $1.3 million in the form of Class A common stock of the Company, at par value, and a cash payment equal to $15.0 million, which is inclusive of the payment of up to an additional $3.2 million in contingent consideration based upon the achievement of certain conditions as described in the Stock Purchase Agreement. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The Business Combination was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Under this method of accounting, the Company is treated as the “acquired” company for financial reporting purposes and Hydrafacial is treated as the accounting acquirer. This determination was primarily based on the following: • the Hydrafacial stockholders as of immediately prior to the effective time of the First Merger considered in the aggregate have the largest minority interest of the voting power in the combined entity after taking into account actual redemptions; • the operations of Hydrafacial prior to the acquisition comprise the only ongoing operations of the post-combination company; • senior management of Hydrafacial comprises the senior management of the post-combination company; • the relative size and valuation of Hydrafacial compared to the Company; and • pursuant to that certain Investor Rights Agreement, dated as of May 4, 2021, by and between the Company and Hydrafacial, Hydrafacial was given the right to designate certain initial members of the board of directors of the Company immediately after giving effect to the transactions contemplated by the Merger Agreement. Consideration was also given to the fact that the Company paid a purchase price consisting of a combination of cash and equity consideration and its stockholders may have a significant amount of voting power, should the Company’s public stockholders be considered in the aggregate. However, based on the aforementioned factors of management, board representation, largest minority stockholder as noted above, and the continuation of the Hydrafacial business as well as its size, it was determined that accounting for the Business Combination as a reverse recapitalization was appropriate. Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of Hydrafacial with the acquisition being treated as the equivalent of Hydrafacial issuing stock for the net assets of the Company, accompanied by a recapitalization. The net assets of the Company are stated at historical cost, with no goodwill or other intangible assets recorded. |
Consolidation | The Consolidated Financial Statements in this Annual Report on Form 10-K are presented in accordance with GAAP and include the Company’s consolidated domestic and international subsidiaries. Intercompany accounts and transactions have been eliminated. |
Use of estimates and assumptions in preparing consolidated financial statements | Use of estimates and assumptions in preparing consolidated financial statements In preparing its consolidated financial statements in conformity with GAAP, the Company makes assumptions, estimates, and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of net sales and expenses during the reported periods. On an ongoing basis, the Company evaluates its estimates, including, among others, those related to revenue related reserves, allowance for estimated credit losses, the realizability of inventory, fair value measurements including common stock, warrant liabilities and earn-out shares liability valuations, useful lives of property and equipment, goodwill and finite-lived intangible assets, accounting for income taxes, stock-based compensation expense and commitments and contingencies. The Company’s estimates are based on historical experience and on its future expectations that are believed to be reasonable. The combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from current estimates and those differences may be material. |
Cash and Cash Equivalents | Cash and Cash Equivalents All highly liquid investments, including credit card receivables due from banks, with original maturities of 90 days or less at date of purchase, are reported at fair value and are considered to be cash equivalents. The balances of cash at financial |
Accounts Receivable | Accounts Receivable Accounts receivable primarily arise out of product purchases by customers from various distribution channels. Typical payment terms provide that customers pay within 30 to 120 days of the invoice. The allowance for estimated credit losses represents management's best estimate of probable credit losses in accounts receivable. The allowance is based upon a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history, the specific customer’s ability to pay its obligation and any other forward-looking data regarding customers’ ability to pay which may be available. In addition, management considered other qualitative factors, particularly in relation to the volatility in the economies of certain foreign jurisdictions that arose from the COVID-19 pandemic. Receivables are written off against the allowance when management believes that the amount receivable will not be recovered. |
Inventories | Inventories Inventories are stated at the lower of cost (determined using the average cost method which approximates the first-in, first-out method) or net realizable value. Obsolete inventory or inventory in excess of management’s estimated usage is written-down to its estimated net realizable value. Inherent in the net realizable value are management’s estimates related to economic trends, future demand for products, and technological obsolescence of our products. Cost is determined using weighted-average costs, and includes all costs incurred to deliver inventory to the Company’s distribution centers including freight, non-refundable taxes, duty, and other landing costs. The Company periodically reviews its inventories and makes a provision as necessary to appropriately value goods that are obsolete, have quality issues, or are damaged. The amount of the provision is equal to the difference between the cost of the inventory and its net realizable value based upon assumptions about product quality, damages, future demand, selling prices, and market conditions. If changes in market conditions result in reductions in the estimated net realizable value of its inventory below its previous estimate, the Company would decrease its basis in the inventory in the period in which it made such a determination. |
Business Combinations | Business Combinations The purchase price of an acquisition is measured as the aggregate of the fair value of the consideration transferred including the acquisition-date fair value of the Company’s previously held equity interests. The purchase price is allocated to the fair values of the tangible and intangible assets acquired and liabilities assumed, with any excess recorded as goodwill. These fair value determinations require judgment and may involve the use of significant estimates and assumptions. The purchase price allocation may be provisional during a measurement period of up to one year to provide reasonable time to obtain the information necessary to identify and measure the assets acquired and liabilities assumed. Any such measurement period adjustments are recognized in the period in which the adjustment amount is determined. Transaction costs associated with the acquisition are expensed as incurred. |
Goodwill | Goodwill Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the assets acquired and liabilities assumed. Goodwill is not amortized but is evaluated for impairment annually or more frequently if indicators of impairment are present or changes in circumstances suggest that impairment may exist. The Company has one reporting unit and management evaluates the carrying value of the Company’s goodwill annually at the end of its fiscal year or whenever events or changes in circumstances indicate that an impairment may exist. When testing goodwill for impairment, management has the option of first performing a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as the basis to determine if it is necessary to perform a quantitative goodwill impairment test. In performing the qualitative assessment, management considers the extent to which unfavorable events or circumstances identified, such as changes in economic conditions, industry and market conditions or company specific events, could affect the comparison of the reporting unit’s fair value with its carrying amount. If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management is required to perform a quantitative impairment test. Quantitative impairment testing for goodwill is based upon the fair value of a reporting unit as compared to its carrying value. Under a quantitative impairment test, management will make certain judgments and assumptions in allocating assets and liabilities to determine carrying values for our reporting unit. The impairment loss recognized would be the difference between a reporting unit’s carrying value and fair value in an amount not to exceed the carrying value of the reporting unit’s goodwill. Testing goodwill for impairment requires management to estimate fair values of reporting units using significant estimates and assumptions. The assumptions made will impact the outcome and ultimate results of the testing. Management will use industry accepted valuation models and set criteria that are reviewed and approved by various levels of management and, in certain instances, we will engage independent third-party valuation specialists for advice. The key estimates and factors used in the valuation models would include revenue growth rates and profit margins based on our internal forecasts, our specific weighted-average cost of capital used to discount future cash flows, and comparable market multiples for the industry segment, when applicable, as well as our historical operating trends. Certain future events and circumstances, including deterioration of market conditions, higher cost of capital, a decline in actual and expected consumer consumption and demands, could result in changes to these assumptions and judgments. A revision of these assumptions could cause the fair values of the reporting units to fall below their respective carrying values, resulting in a non-cash impairment charge. Such charge could have a material effect on the consolidated financial statements. |
Intangible Assets | Intangible Assets Intangible assets are composed of developed technology, customer relationships and trademarks. At initial recognition, intangible assets acquired in a business combination are recognized at their fair value as of the date of acquisition. Following initial recognition, intangible assets are carried at cost less accumulated amortization and impairment losses, if any, and are amortized on a straight-line basis over the estimated useful life of the asset. We assess the impairment of intangible assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If necessary, we will use an industry accepted valuation model to estimate the fair value of the intangible assets. The fair value calculation requires significant judgments in determining both the assets’ estimated cash flows potentially the appropriate discount and royalty rates applied to those cash flows to determine fair value. Variations in economic conditions or a change in general consumer demands, operating results estimates or the application of alternative assumptions could produce significantly different results. If these assumptions differ materially from future results, we may record impairment charges in the future. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost less accumulated depreciation. Repair and maintenance costs are expensed as incurred. Depreciation commences when an asset is ready for its intended use. Depreciation is recorded on a straight-line basis over each asset’s estimated useful life. Leasehold improvements are depreciated on a straight-line basis over the lesser of the length of the lease and the estimated useful life of the improvement. |
Impairment Long-Lived Assets | Impairment of long-lived Assets Long-lived assets, including intangible assets with finite lives, held for use are evaluated for impairment when the occurrence of events or a change in circumstances indicates that the carrying value of the assets may not be recoverable as measured by comparing their carrying value to the estimated undiscounted future cash flows generated by their use and eventual disposition. Impaired assets are recorded at fair value, determined principally by discounting the future cash flows expected from their use and eventual disposition. Reductions in asset values resulting from impairment valuations are recognized in income in the period that the impairment is determined. |
Leased Property and Equipment | Leased Property and Equipment Prior to the adoption of ASU No. 2016-02, Leases (“ASC 842”), the Company recognized rent expense for operating leases on a straight‑line basis (including the effect of reduced or free rent and rent escalations) over the lease term. The difference between the cash paid to the landlord and the amount recognized as rent expense on a straight‑line basis was recognized as an adjustment to deferred rent in the consolidated balance sheets. Cash reimbursements received from landlords for leasehold improvements and other cash payments received from landlords as lease incentives were recorded as an asset and depreciated using the straight‑line method over the lease term as an offset to rent expense. ASC 842 became effective for the Company in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021, with an effective date of January 1, 2021. Subsequent to the adoption of ASC 842 on January 1, 2021, the first day of fiscal 2021, operating and finance lease liabilities are recognized at the lease commencement date based on the present value of the fixed lease payments using the Company’s incremental borrowing rates for its population of leases. The Company uses an incremental borrowing rate to determine the present value of lease payments as the rate implicit in the lease is generally not readily determinable. The Company’s incremental borrowing rate is the rate of interest that it would have to pay to borrow an amount equal to the lease payments, on a collateralized basis and in a similar economic environment over a similar term. The Company determines if an arrangement is or contains a lease at inception. This determination depends on whether the arrangement conveys the right to control the use of an explicitly or implicitly identified asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed if the Company obtains the right to direct the use of and obtains substantially all of the economic benefits from using the underlying asset. As a result of the adoption of the new accounting standard, the Company elected transition-related practical expedients as accounting policies which allowed it to not reassess, as of the adoption date, (1) whether any expired or existing contracts are or contain leases, (2) the classification of any expired or existing leases, and (3) if previously capitalized initial direct costs qualify for capitalization under ASC 842. The Company elected the practical expedient option to not separate lease and non-lease components for all of its leases, and also elected the short-term lease recognition exemption that keeps leases with an initial term of 12 months or less excluded from balance sheet capitalization. This results in recognizing those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. Related operating and finance lease right-of-use assets are recognized based on the initial present value of the fixed lease payments, reduced by cash payments received from landlords as lease incentives, plus any prepaid rent and other direct costs from executing the leases. Amortization of both operating and finance lease right-of-use assets is performed on a straight-line basis and recorded as part of rent expense in cost of goods sold and selling, general and administrative expenses on the consolidated statements of operations. The interest expense amortization component of the finance lease liabilities is recorded within interest expense on the consolidated statements of operations. |
Convertible Senior Notes and Issuance Costs | Convertible Senior Notes On September 14, 2021, the Company issued an aggregate of $750 million in principal amount of its 1.25% Convertible Senior Notes due 2026 (the “Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of September 14, 2021, between the Company and U.S. Bank National Association, as trustee (the “Trustee”). The Company accounts for the Notes under Accounting Standards Codification (“ASC”) ASC 470-20 - Debt with Conversion and Other Options and Derivatives and Hedging—Contracts in Entity's Own Equity Issuance Costs Issuance costs related to our Notes offering were capitalized and offset against proceeds from the Notes. Issuance costs consist of legal and other direct costs related to the issuance of the Notes and are amortized to interest expense over the term of the Notes. Refer to Note 10 – Long-term Debt for further detail. |
Capped Call Transactions | Capped Call Transactions Capped call transactions cover the aggregate number of shares of the Company’s common stock that will initially underlie the Notes, and generally reduce potential dilution to the Company’s common stock upon any conversion of Notes and/or offset any cash payments the Company may make in excess of the principal amount of the converted Notes, as the case may be, with such reduction and/or offset subject to a cap, based on the cap price of the capped call transactions. The Company determined that the freestanding capped call option contracts qualify as equity under the accounting guidance on indexation and equity classification, and recognized the contract by recording an entry to “Additional paid-in capital” (“APIC”) in stockholders’ equity in its Consolidated Balance Sheet. The Company also determined that the capped call option contracts meet the definition of a derivative under ASC 815 — Derivatives and Hedging (“ASC 815”), but are not required to be accounted for as a derivative as they meet the scope exception outlined in ASC 815. The capped call options are recorded in APIC and not remeasured. |
Warrant Liabilities | Warrant Liabilities During October 2020, in connection with Vesper’s initial public offering, the Company issued 15,333,333 warrants to purchase shares of the Company’s common stock at $11.50 per share (the “Public Warrants”). Simultaneously, with the consummation of Vesper’s initial public offering, the Company issued 9,333,333 warrants to purchase shares of the Company’s common stock at $11.50 per share (the “Private Placement Warrants”), to BLS Investor Group LLC (the “Sponsor”). On November 3, 2021 all of the Public Warrants that were outstanding were redeemed (the “Redemption Date”). As of December 31, 2022 and 2021, no Public Warrants were outstanding and approximately 7 million Private Placement Warrants remain outstanding. As of December 31, 2022 the Private Placement Warrants are measured at fair value using a Monte Carlo simulation because these warrants are not subject to redemption if the reference value of the common stock, as defined, is between $10.00 and $18.00 per share. The Private Placement Warrants are classified as a Level 3 financial instruments as of December 31, 2022. The Private Placement Warrants expire five years after the Business Combination. The Company classified the Public Warrants and currently classifies the Private Placement Warrants as liabilities on its Consolidated Balance Sheets as these instruments are precluded from being indexed to our own stock given the terms allow for a settlement adjustment that does not meet the scope of the fixed-for-fixed exception in ASC 815, Derivatives and Hedging . In certain events outside of the Company’s control, the Private Placement Warrant holders are entitled to receive cash while in certain scenarios the holders of the Company’s common stock are not entitled to receive cash or may receive less than 100% of any proceeds in cash, which precludes these instruments from being classified within equity pursuant to ASC 815-40. The Public and Private Placement Warrants were initially recorded at fair value on the date of the Business Combination and are subsequently adjusted to fair value at each subsequent reporting date. Changes in the fair value of these instruments are recognized within change in fair value of warrant liabilities in the Company’s Consolidated Statements of Comprehensive Income (Loss) . |
Earn-out Shares Liability | Earn-out Shares Liability In addition to the consideration paid at the closing of the Business Combination, the former stockholders of Hydrafacial received contingent consideration in the form of an aggregate of 7.5 million shares of the Company’s Class A Common Stock (the “Earn-out Shares”) as a result of the Company’s completion of the acquisitions of four target businesses, as contemplated by the Merger Agreement, in June and July 2021 that were identified by Hydrafacial. With the closing of these four distributor acquisitions in Australia, France, Germany and Mexico, the 7.5 million Earn-out Shares were earned and subsequently issued on July 15, 2021. The Company accounted for the Earn-out Shares liability as contingent consideration and recorded an Earn-out Shares liability for the Earn-out Shares in accordance with ASC 480 – Distinguishing Liabilities from Equity . The liability was included as part of the consideration transferred in the Business Combination and was recorded at its then current fair value. The Earn-out Shares liability was recorded at fair value and remeasured at the end of each reporting period, with the corresponding gain or loss recorded in the Company’s Consolidated Statements of Comprehensive Income (Loss) as change in the fair value of earn-out shares liability. |
Revenue Recognition | Revenue Recognition Net sales consist of the sale of products to retail and wholesale customers through e-commerce and distributor sales. The Company generates revenue through manufacturing and selling Hydrafacial Delivery Systems (“Delivery Systems”). In conjunction with the sale of Delivery Systems, the Company also sells its serum solutions and consumables (collectively “Consumables”). Original Consumables are sold solely and exclusively by the Company (and from authorized retailers) and are available for purchase separately from the purchase of Delivery Systems. For both Delivery Systems and Consumables, revenue is recognized upon transfer of control to the customer, which generally takes place at the point of shipment. The Company distributes products to customers both through national and international retailers as well as direct-to-consumers through its e-commerce and store channels. The Company sells to direct customers, including non-corporate customers (such as spas and dermatologist offices), corporate customers, and international distributors. For non-corporate customers, a contract exists when the customer initiates an order by submitting a purchase request. Such requests are accepted by the Company upon issuance of a corresponding invoice. For corporate customers, a contract exists when the customer submits a purchase order and is accepted upon issuance of a subsequent invoice. For distributors, a customer submits an order request which is processed in the system by a sales representative. This is also considered accepted upon the subsequent issuance of an invoice by the Company. For all customers, each invoice is considered a separate contract for accounting purposes. Revenue is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for the sale of its products which is determined based upon the sales price per the invoice or contract. Discounts applied to invoices are not associated with future purchases and solely relate to the product invoiced. As a result, the invoice and transaction price are recorded net of any discounts. The Company’s sales terms for its Delivery Systems allow for the right of return within 30 days, subject to a restocking fee. Estimates for variable consideration, which relate to sales returns associated with Delivery Systems, are based on the expected amount the Company will be entitled to receive, subject to constraint, and is recorded as a reduction against net sales. Sales returns are estimated based on historical sales and returns data and have not significantly impacted net sales because sales returns are not material. Depending on the type of Delivery System that was purchased, the Company offers its customers with a one-year or two-year standard type warranty that provides the customer with the assurance that its Delivery Systems will function as intended. Returns related to warranty have been immaterial. The Company also has a loyalty program that allows members to receive points based on qualifying Consumable purchases that may be redeemed as a discount on future consumable purchases. This customer option is a material right and, accordingly, represents a separate performance obligation to the customer. The related loyalty program deferred revenue included in other accrued expenses on the consolidated balance sheet was approximately $0.8 million and $1.2 million as of December 31, 2021 and 2022, respectively. In addition, during fiscal 2022 the Company provided certain customers with the option to trade-in their existing Delivery System and apply the fair value of their old Delivery System towards the transaction price of the Company’s new Syndeo Delivery System. The Company determined that the trade-in is viewed as a marketing offer due to the fact that it does not constitute the Company’s customary business practice and was not offered at contract inception. Therefore, the trade-in is accounted for under ASC 606 and represents a type of noncash consideration, which the Company measures at its estimated fair value. The estimated fair value represents the estimated selling price, less the cost to refurbish the inventory and the expected margin to be earned on the refurbishment, along with the expected margin to be earned on the selling effort. The estimated selling price is determined based on the Company’s historical experience of reselling refurbished Delivery Systems. The total value of these refurbished Delivery Systems included in inventory as of December 31, 2022 was $8.8 million. |
Cost of Sales | Cost of Sales The Company’s cost of sales consists of Delivery Systems and Consumables product costs, including the cost of materials, labor costs, overhead, depreciation and amortization of developed technology, shipping and handling costs, and the costs associated with excess and obsolete inventory. As the Company launches new products and expand presence internationally, the Company expects to incur higher cost of sales as a percentage of sales because we have not yet achieved economies of scale with these items. |
Selling and Marketing Expense and General and Administrative Expense | Selling and Marketing Expense Selling and marketing expense consists of personnel-related expenses, sales commissions, travel costs, and advertising expenses incurred in connection with the sale of our products. The Company intends to continue to invest in sales and marketing capabilities in the future and expect this expense to increase in absolute dollars in future periods as it releases new products, grow our global footprint, and drive consumer demand in the ecosystem. Selling and marketing expense as a percentage of total revenue may fluctuate from period to period based on total revenue and the timing of investments in sales and marketing functions as these investments may vary in scope and scale over future periods. General and Administrative Expense General and administrative expense includes personnel-related expenses, professional fees, credit card and wire fees and facilities-related costs primarily for our executive, finance, accounting, legal, human resources, and IT functions. General and administrative expense also includes fees for professional services principally comprising legal, audit, tax and accounting services and insurance. The Company expects to continue to incur additional general and administrative expenses as a result of operating as a public company, including expenses related to compliance and reporting obligations of public companies, and increased costs for insurance, investor relations expenses, and professional services. In addition, the Company expects to continue to incur additional IT expenses as the Company scales and enhances its e-commerce, digital and data utilization capabilities. As a result, the Company expects that our general and administrative expenses will increase in absolute dollars in future periods and vary from period to period as a percentage of revenue. |
Research and Development Costs | Research and Development Costs Research and development expense primarily consists of personnel-related expenses, tooling and prototype materials, technology investments, and other expenses incurred in connection with the development of new products and internal technologies. The Company expects research and development expenses to increase in absolute dollars in future periods and vary from period to period as a percentage of total revenue, as the Company plans to continue to innovate and invest in new technologies and to enhance existing technologies to fuel future growth as a category creator. |
Interest Expense, Net | Interest Expense, Net Interest expense consists of interest accrued on the Company’s Convertible Senior Notes and amortization of debt issuance costs relating to the Notes. The Notes mature on October 1, 2026 and accrue interest at a rate of 1.25% per annum. Debt issuance costs are being amortized over the term of the Notes using the effective interest method. If the Notes are repurchased, redeemed, or converted prior to the maturity date, the interest on the Notes would no longer be accrued and the amortization of debt issuance costs would be accelerated. The Company expects interest expense to increase in absolute dollars as the Company grows internationally and obtains more financing to support such growth. Interest expense as a percentage of revenue will fluctuate period to period along with fluctuations in interest rates, which is not related to normal business operations. |
Interest Income | Interest IncomeInterest income consists of interest earned from investments in money market funds that the Company classifies as cash equivalents. Interest income as a percentage of revenue will fluctuate period to period along with fluctuations in interest rates, which is not related to normal business operations. |
Change In Fair Value Of Warrant Liabilities | Change in Fair Value of Warrant Liabilities In accordance with ASC 815-40 – Contracts in Entity's Own Equity , the Company’s Public and Private Placement Warrants are accounted for as liabilities in the Consolidated Balance Sheets and measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the Company’s Consolidated Statements of Comprehensive Income (Loss). There were no Public Warrants outstanding as of December 31, 2022. The value of the Private Placement Warrants was determined at year end using the Monte Carlo simulation model. Changes around share price volatility and assumptions and inputs used in the Monte Carlo model can result in an increase or decrease in fair value which can substantially impact the outstanding liability and the change in fair value of warrant liabilities. Changes in fair value of warrant liabilities as a percentage of revenue will fluctuate period to period along with fluctuations in fair value, which is not related to normal business operations. |
Change In Fair Value Of Earn-out Shares Liability | Change in Fair Value of Earn-out Shares Liability In accordance with ASC 480 – Distinguishing Liabilities from Equity , the Company accounted for its Earn-out Shares liability as contingent consideration and recorded an Earn-out Shares liability for the Earn-out Shares. The Earn-out Shares liability was recorded at fair value and remeasured at the end of each reporting period, with the corresponding gain or loss |
Foreign Currency Transaction (Gain) Loss, Net | Foreign Currency Transaction (Gain) Loss, Net Foreign currency transaction gains and losses are generated by settlements of intercompany balances and invoices denominated in other currencies other than the reporting currency. Foreign currency gains and losses as a percentage of revenue will fluctuate period to period along with fluctuations in exchange rates, which is not related to normal business operations. Foreign Currency The functional currency for each entity included in these consolidated financial statements that is domiciled outside of the United States is generally the applicable local currency. Assets and liabilities of each foreign entity are translated into U.S. dollars at the exchange rate in effect on the balance sheet date. Net revenue and expenses are translated at the average rate in effect during the period. Unrealized translation gains and losses are recorded as a foreign currency translation adjustment, which is included in other comprehensive income or loss, which is a component of accumulated other comprehensive income or loss included in stockholders’ equity. Transactions between the parent company and its foreign subsidiaries are denominated in US Dollars. Accordingly, amounts due to or from the parent company are remeasured from local currency to its US Dollar equivalent on the balance sheet date. This remeasurement is recorded as a foreign currency transaction gain or loss in the consolidated statements of comprehensive income. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets (DTA)s and deferred tax liabilities (DTL)s for the expected future tax consequences of events that have been included in the financial statements. Under this method, we determine DTAs and DTLs on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on DTAs and DTLs is recognized in income in the period that includes the enactment date. The Company recognizes DTAs to the extent that it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized based on currently available evidence. If the Company determines that it would be able to realize our DTAs in the future in excess of the net recorded amount, it would make an adjustment to the DTA valuation allowance, which would reduce the provision for income taxes. The Company would record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) it determined whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. If any, the Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company primarily maintains its operating cash balance with a major financial institution. At times, cash balances may be in excess of Federal Deposit Insurance Corporation insurance limits. The Company has not experienced any losses in these accounts and does not believe it is exposed to any significant credit risk in this area. Accounts receivable are unsecured and the Company is at risk to the extent such amounts become uncollectible. Concentration of credit risk with respect to accounts receivable is generally mitigated by the Company performing ongoing credit evaluations of its customers. |
Stock-based Compensation | Stock-based Compensation Stock-based compensation is accounted for under FASB ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). The Company accounts for all stock-based compensation transactions using a fair-value method and recognizes the fair value of each award as an expense over the service period. The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing model. The use of the Black-Scholes model requires a number of estimates, including the expected option term, the expected volatility in the price of the Company’s common stock, the risk-free rate of interest and the dividend yield on the Company’s common stock. The fair value of the Company’s restricted stock units is the closing price of the Company’s common stock on the grant date. The fair value of the Company’s performance-based restricted stock units is estimated using a Monte Carlo simulation model. The consolidated financial statements include amounts that are based on the Company’s best estimates and judgments. The Company classifies compensation expense related to these awards in the Consolidated Statements of Comprehensive Income (Loss) based on the department to which the recipient reports. The Company’s policy is to account for forfeitures in period that they occur. |
Earnings per Share | Earnings per Share Earnings per share is calculated using the weighted-average number of common and exchangeable shares outstanding during the period. Exchangeable shares are the equivalent of common shares in all material respects. Diluted earnings per share is calculated by dividing net income available to stockholders for the period by the diluted weighted-average number of shares outstanding during the period. Diluted earnings per share reflects the potential dilution from common shares issuable through stock options, performance-based restricted stock units that have satisfied their performance factor, restricted shares, and restricted stock units using the treasury stock method. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: • Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; • Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and • Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. The fair value of the Notes that are recorded at historical cost was $567 million as of December 31, 2022, and was determined using the last trade price in active markets. With the exception of the Company’s Notes, the fair value of the Company’s assets and liabilities that are recorded at historical amounts and that qualify as financial instruments under ASC 820, Fair Value Measurement , approximates the carrying amounts represented in the Company’s Consolidated Balance Sheets, primarily due to their short-term nature. |
New Accounting Pronouncements Not Yet Adopted | New Accounting Pronouncements Not Yet Adopted In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2021-08, Business Combinations (Topic 805), which primarily relates to the accounting for contract assets and contract liabilities from contracts with customers in a business combination. The standard will be effective for annual reporting periods beginning after December 31, 2022, including interim reporting periods within those periods, with early adoption permitted. We are currently evaluating the impact of adopting this new accounting guidance on our consolidated financial statements. |
Business Combinations and Ass_2
Business Combinations and Asset Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of reverse recapitalization | The following table reconciles the elements of the Business Combination to the Company’s Consolidated Statements of Cash Flows and the Consolidated Statements of Stockholders’ Equity (Deficit) for the year ended December 31, 2021: (in thousands) Recapitalization Cash in trust, net of redemptions $ 433,382 Cash — PIPE 350,000 Less: Cash paid out to Former Parent (367,870) Less: Transaction costs and advisory fees (56,976) Less: Cash paid out from net working capital adjustment related to acquisitions (902) Net Cash Received from Business Combination $ 357,634 The number of shares of Class A Common Stock issued following the consummation of the Business Combination: Number of Shares Class A common stock outstanding prior to Business Combination 46,000,000 Less: Redemption of Vesper Class A Common Stock (2,672,690) Class A common stock of Vesper 43,327,310 Founder shares (Vesper Class B Common Stock) 11,500,000 PIPE Shares 35,000,000 Business Combination and PIPE shares 89,827,310 Legacy Hydrafacial shares (1) 35,501,743 Working capital adjustment Class A Common Stock issued 70,860 Total Shares of Class A Common Stock after Business Combination 125,399,913 _______________ (1) The number of Legacy Hydrafacial shares was determined from the 54,358 shares of Hydrafacial common stock outstanding immediately prior to the closing of the Business Combination multiplied by the Exchange Ratio of 653.109. |
Summary of assets acquired at fair value | The following table summarizes the consideration and fair values assigned to the assets acquired and liabilities assumed at the dates of acquisition for the Wigmore, Ecomedic and Sidermica acquisitions and summarizes the HTL acquisition after measurement period adjustments. (in thousands) HTL Wigmore (2) Ecomedic (3) Sidermica (4) Consideration paid: Cash, net of cash acquired $ 4,920 $ 2,540 $ 11,338 $ 6,861 Class A Common Stock issued (1) 1,557 456 6,513 815 Trade receivables due from seller 1,027 2,336 1,679 1,581 Notes payable to seller — — 2,153 — $ 7,504 $ 5,332 $ 21,683 $ 9,257 Identifiable assets acquired and liabilities assumed Accounts receivable $ 1,110 $ 2,079 $ 15 $ 1,657 Non-compete agreement 100 60 588 100 Customer relationships 2,696 2,276 5,487 2,700 Inventory and other assets 354 341 1,262 454 Accounts payable (45) (456) (772) — Deferred tax liabilities, net (675) (842) (2,008) — Accrued and other liabilities (802) (317) (340) — Total identifiable net assets 2,738 3,141 4,232 4,911 Goodwill $ 4,766 $ 2,191 $ 17,451 $ 4,346 ___________ (1) Class A Common Stock issued as consideration for the acquisitions was 110,726, 28,157, 401,021 and 50,195 shares for HTL, Wigmore, Ecomedic and Sidermica, respectively. (2) During the fourth quarter of 2021, adjustments were made to the Wigmore valuation pertaining to contingent consideration and intangible assets. Goodwill was adjusted due to an increase of $0.3 million in contingent consideration and a decrease of $1.0 million in intangible assets. Contingent consideration payments for the Wigmore acquisition were paid during the three months ended March 31, 2022. (3) During the first quarter of 2022, adjustments were made to the Ecomedic valuation pertaining to acquisition date tax liability. Goodwill was adjusted due to an increase of $0.2 million to acquisition date tax liability. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | The Company’s revenue disaggregated by major product line consists of the following for the periods indicated: Year Ended December 31, (in thousands) 2022 2021 2020 Net Sales Delivery Systems $ 206,235 $ 139,464 $ 53,372 Consumables 159,641 120,622 65,720 Total net sales $ 365,876 $ 260,086 $ 119,092 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventories consist of the following as of the periods indicated: (in thousands) December 31, 2022 December 31, 2021 Raw materials $ 38,373 $ 12,024 Finished goods 78,057 23,237 Total inventories $ 116,430 $ 35,261 |
Schedule of accrued payroll-related expenses | Accrued payroll-related expenses consist of the following as of the periods indicated: (in thousands) December 31, 2022 December 31, 2021 Accrued compensation $ 4,154 $ 15,262 Accrued payroll taxes 1,357 922 Accrued benefits 5,643 3,022 Accrued sales commissions 10,523 9,456 Total accrued payroll-related expenses $ 21,677 $ 28,662 |
Schedule of accrued expenses | Other accrued expenses consist of the following as of the periods indicated: (in thousands) December 31, 2022 December 31, 2021 Sales and VAT tax payables $ 4,904 $ 5,817 Accrued interest 2,344 2,786 Contingent consideration — 783 Note payable due seller 1,819 2,153 Royalty liabilities 2,348 1,074 Other 3,768 2,109 Total other accrued expenses $ 15,183 $ 14,722 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of ROU assets and liabilities | Operating ROU assets and liabilities as of December 31, 2022 and December 31, 2021 comprises the following: (in thousands) Assets Balance Sheet Classification December 31, 2022 December 31, 2021 Operating lease assets Right-of-use assets, net $ 15,637 $ 14,992 Liabilities Operating Lease liabilities, current $ 4,958 $ 3,712 Operating Lease liabilities, non-current $ 12,689 $ 12,781 Total lease liabilities $ 17,647 $ 16,493 |
Schedule of lease cost and supplemental lease information | Total lease cost for the years ended December 31, 2022 and December 31, 2021 are summarized in the table below. The variable lease costs were not included in the measurement of the lease liabilities. These primarily include property taxes, property insurance, and common area maintenance expenses. (in thousands) Statement of Operations Classification December 31, 2022 December 31, 2021 Operating lease cost Operating lease cost Cost of sales $ 835 $ 811 Operating lease cost Selling and marketing, general and administrative 4,139 2,535 4,974 3,346 Short-term lease cost Short-term lease cost Selling and marketing, general and administrative 1,662 879 1,662 879 Variable lease cost Variable lease cost Cost of sales — 236 Variable lease cost Selling and marketing, general and administrative — 270 — 506 Total operating lease cost $ 6,636 $ 4,731 The following table includes supplemental lease information: Supplemental Cash Flow Information (dollars in thousands) December 31, 2022 December 31, 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 2,981 $ 3,041 Lease liabilities arising from new ROU assets Operating leases $ 4,476 $ 5,707 Weighted average remaining lease term (in years) Operating leases 6.0 6.3 Weighted average discount rate Operating leases 2.98 % 2.75 % |
Schedule of lease liability maturity, operating | The following table summarizes future operating lease payments as of December 31, 2022 : (in thousands) Future Minimum Payments 2023 $ 5,407 2024 4,532 2025 1,729 2026 1,372 2027 1,096 Thereafter 5,145 Total 19,281 Less: Imputed Interest (1,634) Present value of net lease payments $ 17,647 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on recurring basis | The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2022 and 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. As of December 31, 2022 and 2021, the value of the Private Placement Warrants was determined using a Monte Carlo simulation. The Private Placement Warrants are classified as a Level 3 financial instrument. There was no activity in Warrant liability related to the Private Placement Warrants during the periods presented. The contingent consideration outstanding as of December 31, 2021 was paid in the second quarter of 2022. As of December 31, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents: Money market funds $ 513,009 $ — $ — $ 513,009 Liabilities Warrant liability — Private Placement Warrants — — 15,473 15,473 As of December 31, 2021 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents: Money market funds $ 861,943 $ — $ — $ 861,943 Liabilities Contingent consideration $ — $ — $ 783 $ 783 Warrant liability — Private Placement Warrants $ — $ — $ 93,816 $ 93,816 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consist of the following as of the periods indicated: (in thousands) Useful life (years) December 31, 2022 December 31, 2021 Furniture and fixtures 2-7 $ 5,364 $ 4,074 Computers and equipment 3-5 4,901 4,010 Machinery and equipment 2-5 6,427 3,669 Autos and trucks 5 161 1,163 Tooling 5 638 1,389 Leasehold improvements Shorter of remaining lease 11,812 5,086 Total property and equipment 29,303 19,391 Less: accumulated depreciation and amortization (12,494) (8,561) Construction in progress 1,375 5,353 Property and equipment, net $ 18,184 $ 16,183 During the year ended December 31, 2022, the Company recorded a loss on the disposal of property and equipment, net of $2.0 million. The loss on disposal of property and equipment, net was recorded in the Consolidated Statements of Comprehensive Income (Loss) primarily in general and administrative expense. Depreciation expense was as follows for the periods indicated: Year Ended December 31, (in thousands) 2022 2021 2020 Cost of sales $ 2,126 $ 1,313 $ 1,161 General and administrative 3,295 1,625 1,391 Selling and marketing 1,743 1,548 — Total depreciation expense $ 7,164 $ 4,486 $ 2,552 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | The gross carrying amount and accumulated amortization of the Company’s intangible assets, net, as of December 31, 2022 were as follows: (in thousands) Gross Accumulated Net Carrying Estimated Trademarks $ 10,907 $ (4,119) $ 6,788 15 Non-compete agreement 776 (395) 381 3 Customer relationships 18,089 (7,602) 10,487 5-10 Developed technology 73,188 (54,422) 18,766 3-8 Patents 2,226 (375) 1,851 3-19 Capitalized software 9,620 (1,507) 8,113 3-5 Total intangible assets $ 114,806 $ (68,420) $ 46,386 During the year ended December 31, 2022, the Company recorded a loss on the disposal of intangible assets of $2.5 million. The loss on disposal of intangible assets was recorded in the Consolidated Statements of Comprehensive Income (Loss) primarily in general and administrative expense. The gross carrying amount and accumulated amortization of the Company’s intangible assets, net, as of December 31, 2021 were as follows: (in thousands) Gross Accumulated Net Carrying Estimated Trademarks $ 10,048 $ (3,442) $ 6,606 15 Non-compete agreement 809 (139) 670 3 Customer relationships 18,625 (4,391) 14,234 5-10 Developed technology 70,900 (45,051) 25,849 8 Patents 2,050 (295) 1,755 3-19 Capitalized software 9,867 (2,971) 6,896 3-5 Total intangible assets $ 112,299 $ (56,289) $ 56,010 |
Schedule of intangible assets amortization expense | Amortization expense was as follows for the periods indicated: Year Ended December 31, (in thousands) 2022 2021 2020 Cost of sales $ 9,450 $ 9,000 $ 9,465 General and administrative 2,969 2,477 2,384 Selling and marketing 2,433 1,820 — Total amortization expense $ 14,852 $ 13,297 $ 11,849 |
Schedule of goodwill | The changes in the carrying value of goodwill are as follows: Year Ended December 31, (in thousands) 2022 2021 2020 Beginning balance $ 123,694 $ 98,531 $ 98,520 Measurement period adjustments 2,154 26,600 — Foreign currency translation impact (1,255) (1,437) 11 Ending balance $ 124,593 $ 123,694 $ 98,531 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | The following is a summary of the Company’s Notes as of December 31, 2022: Fair Value (in thousands) Principal Amount Unamortized Issuance Costs Net Carrying Amount Level 1.25% Convertible Notes due 2026 $ 750,000 $ 15,857 $ 734,143 $ 567,000 Level 2 The following is a summary of the Company’s Notes as of December 31, 2021: Fair Value (in thousands) Principal Amount Unamortized Issuance Costs Net Carrying Amount Level 1.25% Convertible Notes due 2026 $ 750,000 $ 20,086 $ 729,914 $ 794,325 Level 2 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of income before income (loss) tax, domestic and foreign | The following table presents domestic and foreign components of net income (loss) before income taxes as follows for the periods indicated: Year Ended December 31, (in thousands) 2022 2021 Domestic $ 43,641 $ (375,542) Foreign 1,391 (1,808) Income (loss) before taxes $ 45,032 $ (377,350) |
Schedule of components of income tax expense (benefit) | The federal, state and foreign components of the income tax expense (benefit) are summarized as follows: Year Ended December 31, (in thousands) 2022 2021 Current: Federal $ 407 $ (727) State 306 513 Foreign 1,722 1,735 Total current income tax expense 2,435 1,521 Deferred: Federal (257) (3,319) State (166) (80) Foreign (1,364) (364) (1,787) (3,763) Total income tax expense (benefit) $ 648 $ (2,242) |
Schedule of effective income tax rate reconciliation | The effective tax rate of the provision for income tax differs from the federal statutory rate as follows for the periods indicated: Year Ended December 31, (in thousands) 2022 2021 Federal statutory income tax rate $ 9,443 21.0 % $ (79,243) 21.0 % State taxes, net of federal benefit (1,041) (2.3) (1,041) 0.3 Officer compensation 2,324 5.2 486 (0.1) Change in fair value of warrants (16,452) (36.6) 58,236 (15.4) Change in fair value of earn-out shares — — 9,891 (2.6) Transaction Costs (32) (0.1) 3,312 (0.9) Foreign rate differential (85) (0.2) 475 (0.1) R&D credit (900) (2.0) (152) — Change in valuation allowance 5,914 13.2 4,064 (1.1) Other 1,477 3.3 1,730 (0.5) Income tax expense (benefit) $ 648 1.5 % $ (2,242) 0.6 % |
Schedule of deferred tax assets and liabilities | The components of the deferred tax assets are as follows for the periods indicated: Year Ended December 31, (in thousands) 2022 2021 Deferred income tax assets State taxes $ 55 $ 69 Accrued expenses 1,608 3,610 Inventories 4,772 1,905 Accounts receivable 625 639 Section 163(j) limitation 4,782 3,224 Net operating loss carryforwards 3,680 5,354 Stock-based compensation 5,072 1,883 Lease liabilities 4,469 4,104 Other 685 220 Total deferred income tax assets 25,748 21,008 Deferred income tax liabilities Goodwill and intangibles (3,852) (7,922) Prepaid expenses (435) (526) Right-of-use Assets (3,966) (3,733) Property and equipment (3,852) (3,134) Total deferred tax liabilities (12,105) (15,315) Valuation allowance (14,839) (8,924) Net deferred income tax liabilities $ (1,196) $ (3,231) The Company’s net deferred tax liability as presented in the consolidated balance sheets consists of the following items as of the dates indicated: (in thousands) December 31, 2022 December 31, 2021 Deferred income tax assets $ 815 $ 330 Deferred income tax liabilities (2,011) (3,561) Net deferred income tax liability $ (1,196) $ (3,231) |
Summary of income tax contingencies | A reconciliation of the beginning and ending balances of unrecognized tax benefits is as follows: (in thousands) December 31, 2022 December 31, 2021 Unrecognized tax benefits at beginning of period $ 210 $ 270 Increases for tax positions in prior periods 260 $ — Decreases for tax positions in prior periods (36) $ (60) Increases for tax positions in current period 240 $ — Total unrecognized tax benefits $ 674 $ 210 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of stock option activity | The following table summarizes the Company’s stock option activity for the year ended December 31, 2022: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding - January 1, 2022 6,785,020 $ 15.64 9.45 $ 59,482 Granted 10,500 22.68 Forfeited (1,144,700) 18.60 Expired (49,050) 15.77 Outstanding - December 31, 2022 5,601,770 15.21 8.34 — Vested and Exercisable - December 31, 2022 1,446,117 15.31 8.06 — Options vested and expected to vest - December 31, 2022 5,601,770 $ 15.21 8.34 $ — |
Summary of valuation assumptions | The fair value of PSUs was determined using a Monte Carlo simulation subject to the performance conditions of the underlying PSUs with the following assumptions: Input 2022 Grants 2021 Grants Risk-free interest rate 1.52% - 4.23% 0.50% - 0.65% Expected volatility of the Company’s Class A Common Stock 57.7% - 66.0% 55.0% |
Schedule of unvested share activity | The following table summarizes the Company’s equity award activity for the year ended December 31, 2022: Weighted Average Grant Date Fair Value RSUs PSUs RSUs PSUs Outstanding - January 1, 2022 380,775 975,000 $ 25.88 $ 11.39 Granted 2,936,252 1,734,864 13.47 8.79 Vested (207,164) — 20.12 — Forfeited (529,711) (209,738) 14.95 14.30 Outstanding - December 31, 2022 2,580,152 2,500,126 14.47 9.34 |
Summary of share based compensation | Compensation expense attributable to net stock-based compensation was as follows for the periods indicated: Year Ended December 31, (in thousands) 2022 2021 2020 Cost of sales 839 405 67 Selling and marketing 9,363 3,547 58 Research and development 602 195 — General and administrative 17,691 8,271 238 Stock-based compensation expense $ 28,495 $ 12,418 $ 363 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Summary of net sales by geographic region | Net sales by geographic region were as follows for the periods indicated: Year Ended December 31, (in thousands) 2022 2021 2020 Americas $ 243,243 $ 169,426 $ 81,453 Asia-Pacific 54,306 43,701 14,464 Europe, the Middle East and Africa 68,327 46,959 23,175 Total net sales $ 365,876 $ 260,086 $ 119,092 |
Net Income (Loss) Attributabl_2
Net Income (Loss) Attributable to Common Shareholders (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | The following table sets forth the calculation of both basic and diluted net income (loss) per share as follows for the periods indicated: Year Ended December 31, (in thousands, except share and per share amounts) 2022 2021 2020 Net income (loss) available to common stockholders - basic $ 44,384 $ (375,108) $ (29,175) Less: Income on Private placement warrants (78,343) — — Net loss available to common stockholders - diluted $ (33,959) $ (375,108) $ (29,175) Weighted average common shares outstanding - basic 147,554,090 102,114,949 34,293,271 Effect of dilutive shares: Private placement warrants 952,222 — — Weighted average common shares outstanding - diluted 148,506,312 102,114,949 34,293,271 Basic net income (loss) per share: $ 0.30 $ (3.67) $ (0.85) Diluted net income (loss) per share $ (0.23) $ (3.67) $ (0.85) |
Schedule of antidilutive securities excluded from earnings per share computation | The following shares have been excluded from the calculation of the weighted average diluted shares outstanding as the effect would have been anti-dilutive or requisite performance conditions were not met: Year Ended December 31, 2022 2021 2020 Convertible Notes 23,614,425 23,614,425 — RSUs 2,580,152 380,775 — PSUs 2,500,126 975,000 — Stock Options 5,601,770 6,785,020 542 |
Description of Business (Detail
Description of Business (Details) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 | May 04, 2021 | May 03, 2021 |
Business Acquisition [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
HydraFacial | ||||
Business Acquisition [Line Items] | ||||
Reverse recapitalization, ownership percentage | 100% | |||
Hydrate Merger Sub I, Inc. | ||||
Business Acquisition [Line Items] | ||||
Reverse recapitalization, ownership percentage | 100% | |||
Hydrate Merger Sub II, LLC | ||||
Business Acquisition [Line Items] | ||||
Reverse recapitalization, ownership percentage | 100% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 2 Months Ended | 12 Months Ended | |||||||
Jul. 15, 2021 shares | May 04, 2021 shares | Jul. 31, 2021 business | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) | Nov. 03, 2021 $ / shares | Sep. 14, 2021 USD ($) | Oct. 31, 2020 $ / shares shares | |
Class of Warrant or Right [Line Items] | |||||||||
Recapitalization exchange ratio (in shares) | 653.109 | ||||||||
Earn-out consideration (in shares) | shares | 7,500,000 | ||||||||
Number of acquisitions | business | 4 | ||||||||
Reverse recapitalization transaction, net (in shares) | shares | 7,500,000 | 89,827,310 | |||||||
Inventory | $ 116,430,000 | $ 35,261,000 | |||||||
Revenue, performance obligation, description of payment terms | Payment terms vary by customer but typically provide for the customer to pay within 30 to 120 days; however, the Company provides an option for qualified customers to pay for Delivery Systems over 12 monthly installments. Therefore, customer payment terms are for 12 months or less and do not include significant financing components. | ||||||||
Advertising expense | $ 3,800,000 | 3,200,000 | $ 3,300,000 | ||||||
Delivery Systems | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Inventory | 8,800,000 | ||||||||
Loyalty Program | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Other accrued expenses | $ 1,200,000 | $ 800,000 | |||||||
Level 3 | Minimum | Exercise price | Monte Carlo simulation | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Warrant, measurement input | 10 | ||||||||
Level 3 | Maximum | Exercise price | Monte Carlo simulation | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Warrant, measurement input | 18 | ||||||||
Public warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Warrants outstanding (in shares) | shares | 0 | 0 | 15,333,333 | ||||||
Warrants, exercise price (in dollars per share) | $ / shares | $ 11.50 | $ 11.50 | |||||||
Private placement warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Warrants outstanding (in shares) | shares | 7,000,000 | 7,000,000 | 9,333,333 | ||||||
Warrants, exercise price (in dollars per share) | $ / shares | $ 11.50 | ||||||||
Warrants, term | 5 years | ||||||||
Convertible Debt | 1.25% Convertible Senior Notes Due 2026 | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Face amount | $ 750,000,000 | ||||||||
Stated interest rate | 1.25% | 1.25% | 1.25% | ||||||
Convertible Debt | 1.25% Convertible Senior Notes Due 2026 | Level 2 | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Fair value of debt | $ 567,000,000 | $ 794,325,000 |
Business Combinations and Ass_3
Business Combinations and Asset Acquisitions- Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 2 Months Ended | 12 Months Ended | |||||
Apr. 12, 2022 USD ($) shares | May 04, 2021 USD ($) $ / shares shares | May 03, 2021 USD ($) shares | Jul. 02, 2021 USD ($) business | Jul. 31, 2021 business | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) | |
Business Acquisition [Line Items] | ||||||||
Consideration received on transaction | $ 350,000 | |||||||
Common stock, conversion ratio | 1 | |||||||
Shares redeemed | $ 154 | |||||||
Common stock, shares issued (in shares) | shares | 132,214,695 | 150,598,047 | ||||||
Common stock, shares outstanding (in shares) | shares | 125,399,913 | 54,358 | 132,214,695 | 150,598,047 | ||||
Gross consideration received | $ 783,000 | |||||||
Cash acquired from trust account | 433,000 | $ 433,382 | ||||||
Cash consideration paid to stockholders | 368,000 | 367,870 | ||||||
Payment of transaction costs | $ 57,000 | 56,976 | ||||||
Legacy HydraFacial shares (in shares) | shares | 35,501,743 | |||||||
Reverse Recapitalization, Cash Paid For Working Capital Adjustments | $ 900 | 902 | ||||||
Working capital adjustment Class A Common Stock issued (in shares) | shares | 70,860 | |||||||
Number of acquisitions | business | 4 | |||||||
Cash paid for business acquisitions, net of cash acquired | $ 0 | 22,896 | 0 | |||||
Deferred payment for acquisition | 4,315 | 0 | 0 | |||||
Cash paid for asset acquisition | $ 1,475 | $ 0 | $ 0 | |||||
Mxt | ||||||||
Business Acquisition [Line Items] | ||||||||
Weighted average amortization period | 3 years | |||||||
Cash paid for asset acquisition | $ 1,500 | |||||||
Asset acquisition, equity consideration | $ 500 | |||||||
Asset acquisition, equity consideration (in shares) | shares | 28,733 | |||||||
Asset acquisition, contingent consideration (up to) | $ 30,000 | |||||||
Intangible assets acquired | 1,900 | |||||||
Inventory acquired | $ 100 | |||||||
HTL, Wigmore, Ecomedic and Sidermica acquisitions | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of acquisitions | business | 4 | |||||||
Cash paid for business acquisitions, net of cash acquired | $ 25,700 | |||||||
Deferred payment for acquisition | $ 1,600 | |||||||
HTL, Wigmore, Ecomedic and Sidermica acquisitions | Customer relationships | ||||||||
Business Acquisition [Line Items] | ||||||||
Weighted average amortization period | 5 years | |||||||
HTL, Wigmore, Ecomedic and Sidermica acquisitions | Non-compete agreement | ||||||||
Business Acquisition [Line Items] | ||||||||
Weighted average amortization period | 3 years | |||||||
Class A common stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration received on transaction (in shares) | shares | 35,000,000 | |||||||
Stock purchase price (in dollars per share) | $ / shares | $ 10 | |||||||
Consideration received on transaction | $ 350,000 | |||||||
Stock redeemed (in shares) | shares | 2,672,690 | |||||||
Stock redeemed, price (in dollars per share) | $ / shares | $ 10 | |||||||
Shares redeemed | $ 26,700 | |||||||
Common stock, shares issued (in shares) | shares | 125,329,053 | |||||||
Common stock, shares outstanding (in shares) | shares | 125,329,053 | |||||||
Legacy HydraFacial shares (in shares) | shares | 35,501,743 | |||||||
Class B Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration received on transaction (in shares) | shares | 11,500,000 | |||||||
Consideration received on transaction | $ 25 |
Business Combinations and Ass_4
Business Combinations and Asset Acquisitions - Schedule of reverse recapitalization consideration (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 04, 2021 | Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | ||
Cash in trust, net of redemptions | $ 433,000 | $ 433,382 |
Cash — PIPE | 350,000 | |
Less: Cash paid out to Former Parent | (368,000) | (367,870) |
Less: Transaction costs and advisory fees | (57,000) | (56,976) |
Less: Cash paid out from net working capital adjustment related to acquisitions | $ (900) | (902) |
Net Cash Received from Business Combination | $ 357,634 |
Business Combinations and Ass_5
Business Combinations and Asset Acquisitions - Schedule of reverse recapitalization shares issued (Details) | Jul. 15, 2021 shares | May 04, 2021 shares | May 03, 2021 shares | Dec. 31, 2022 shares | Dec. 31, 2021 shares |
Reverse Recapitalization [Line Items] | |||||
Common stock, shares outstanding (in shares) | 125,399,913 | 54,358 | 132,214,695 | 150,598,047 | |
PIPE Shares | 35,000,000 | ||||
Reverse recapitalization transaction, net (in shares) | 7,500,000 | 89,827,310 | |||
Legacy HydraFacial shares (in shares) | 35,501,743 | ||||
Working capital adjustment Class A Common Stock issued (in shares) | 70,860 | ||||
Recapitalization exchange ratio (in shares) | 653.109 | ||||
Common shareholders | |||||
Reverse Recapitalization [Line Items] | |||||
Business combination shares (in shares) | 43,327,310 | ||||
Vesper Founders | |||||
Reverse Recapitalization [Line Items] | |||||
Business combination shares (in shares) | 11,500,000 | ||||
Vesper | |||||
Reverse Recapitalization [Line Items] | |||||
Common stock, shares outstanding (in shares) | 46,000,000 | ||||
Less: Redemption of Vesper Class A common stock (in shares) | (2,672,690) |
Business Combinations and Ass_6
Business Combinations and Asset Acquisitions - Summary of assets acquired at fair value (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Consideration paid: | ||||||||
Cash, net of cash acquired | $ 0 | $ 22,896 | $ 0 | |||||
Identifiable assets acquired and liabilities assumed | ||||||||
Goodwill | $ 123,694 | 124,593 | 123,694 | 98,531 | $ 98,520 | |||
Contingent consideration | 0 | 783 | 0 | |||||
Measurement period adjustments | 2,154 | $ 26,600 | $ 0 | |||||
HTL | ||||||||
Consideration paid: | ||||||||
Cash, net of cash acquired | $ 4,920 | |||||||
Class A Common Stock issued | 1,557 | |||||||
Trade receivables due from seller | 1,027 | |||||||
Notes payable to seller | 0 | |||||||
Total consideration | 7,504 | |||||||
Identifiable assets acquired and liabilities assumed | ||||||||
Accounts receivable | $ 1,110 | 1,110 | ||||||
Inventory and other assets | 354 | 354 | ||||||
Accounts payable | (45) | (45) | ||||||
Deferred tax liabilities, net | (675) | (675) | ||||||
Accrued and other liabilities | (802) | (802) | ||||||
Total identifiable net assets | 2,738 | 2,738 | ||||||
Goodwill | 4,766 | $ 4,766 | ||||||
Equity consideration (in shares) | 110,726 | |||||||
HTL | Non-compete agreement | ||||||||
Identifiable assets acquired and liabilities assumed | ||||||||
Intangible assets | 100 | $ 100 | ||||||
HTL | Customer relationships | ||||||||
Identifiable assets acquired and liabilities assumed | ||||||||
Intangible assets | 2,696 | 2,696 | ||||||
Wigmore | ||||||||
Consideration paid: | ||||||||
Cash, net of cash acquired | 2,540 | |||||||
Class A Common Stock issued | 456 | |||||||
Trade receivables due from seller | 2,336 | |||||||
Notes payable to seller | 0 | |||||||
Total consideration | 5,332 | |||||||
Identifiable assets acquired and liabilities assumed | ||||||||
Accounts receivable | 2,079 | 2,079 | ||||||
Inventory and other assets | 341 | 341 | ||||||
Accounts payable | (456) | (456) | ||||||
Deferred tax liabilities, net | (842) | (842) | ||||||
Accrued and other liabilities | (317) | (317) | ||||||
Total identifiable net assets | 3,141 | 3,141 | ||||||
Goodwill | 2,191 | $ 2,191 | ||||||
Equity consideration (in shares) | 28,157 | |||||||
Contingent consideration | 300 | |||||||
Decrease to intangible assets | $ 1,000 | |||||||
Wigmore | Non-compete agreement | ||||||||
Identifiable assets acquired and liabilities assumed | ||||||||
Intangible assets | 60 | $ 60 | ||||||
Wigmore | Customer relationships | ||||||||
Identifiable assets acquired and liabilities assumed | ||||||||
Intangible assets | 2,276 | 2,276 | ||||||
Ecomedic | ||||||||
Consideration paid: | ||||||||
Cash, net of cash acquired | 11,338 | |||||||
Class A Common Stock issued | 6,513 | |||||||
Trade receivables due from seller | 1,679 | |||||||
Notes payable to seller | 2,153 | |||||||
Total consideration | 21,683 | |||||||
Identifiable assets acquired and liabilities assumed | ||||||||
Accounts receivable | 15 | 15 | ||||||
Inventory and other assets | 1,262 | 1,262 | ||||||
Accounts payable | (772) | (772) | ||||||
Deferred tax liabilities, net | (2,008) | (2,008) | ||||||
Accrued and other liabilities | (340) | (340) | ||||||
Total identifiable net assets | 4,232 | 4,232 | ||||||
Goodwill | 17,451 | $ 17,451 | ||||||
Equity consideration (in shares) | 401,021 | |||||||
Measurement period adjustments | $ 200 | 200 | ||||||
Ecomedic | Non-compete agreement | ||||||||
Identifiable assets acquired and liabilities assumed | ||||||||
Intangible assets | 588 | $ 588 | ||||||
Ecomedic | Customer relationships | ||||||||
Identifiable assets acquired and liabilities assumed | ||||||||
Intangible assets | 5,487 | 5,487 | ||||||
Sidermica | ||||||||
Consideration paid: | ||||||||
Cash, net of cash acquired | 6,861 | |||||||
Class A Common Stock issued | 815 | |||||||
Trade receivables due from seller | 1,581 | |||||||
Notes payable to seller | 0 | |||||||
Total consideration | 9,257 | |||||||
Identifiable assets acquired and liabilities assumed | ||||||||
Accounts receivable | 1,657 | 1,657 | ||||||
Inventory and other assets | 454 | 454 | ||||||
Accounts payable | 0 | 0 | ||||||
Deferred tax liabilities, net | 0 | 0 | ||||||
Accrued and other liabilities | 0 | 0 | ||||||
Total identifiable net assets | 4,911 | 4,911 | ||||||
Goodwill | 4,346 | $ 4,346 | ||||||
Equity consideration (in shares) | 50,195 | |||||||
Measurement period adjustments | 1,980 | $ 1,980 | ||||||
Sidermica | Non-compete agreement | ||||||||
Identifiable assets acquired and liabilities assumed | ||||||||
Intangible assets | 100 | $ 100 | ||||||
Sidermica | Customer relationships | ||||||||
Identifiable assets acquired and liabilities assumed | ||||||||
Intangible assets | $ 2,700 | $ 2,700 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 365,876 | $ 260,086 | $ 119,092 |
Delivery Systems | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 206,235 | 139,464 | 53,372 |
Consumables | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 159,641 | $ 120,622 | $ 65,720 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 38,373 | $ 12,024 |
Finished goods | 78,057 | 23,237 |
Total inventories | $ 116,430 | $ 35,261 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of accrued payroll-related expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Accrued compensation | $ 4,154 | $ 15,262 |
Accrued payroll taxes | 1,357 | 922 |
Accrued benefits | 5,643 | 3,022 |
Accrued sales commissions | 10,523 | 9,456 |
Total accrued payroll-related expenses | $ 21,677 | $ 28,662 |
Balance Sheet Components - Sc_3
Balance Sheet Components - Schedule of accrued expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Sales and VAT tax payables | $ 4,904 | $ 5,817 |
Accrued interest | 2,344 | 2,786 |
Contingent consideration | 0 | 783 |
Note payable due seller | 1,819 | 2,153 |
Royalty liabilities | 2,348 | 1,074 |
Other | 3,768 | 2,109 |
Total other accrued expenses | $ 15,183 | $ 14,722 |
Leases - Schedule of ROU assets
Leases - Schedule of ROU assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Operating lease assets | $ 15,637 | $ 14,992 |
Liabilities | ||
Lease liabilities, current | 4,958 | 3,712 |
Lease liabilities, non-current | 12,689 | 12,781 |
Total lease liabilities | $ 17,647 | $ 16,493 |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | $ 4,974 | $ 3,346 |
Short-term lease cost | 1,662 | 879 |
Variable lease cost | 0 | 506 |
Total operating lease cost | 6,636 | 4,731 |
Cost of sales | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 835 | 811 |
Variable lease cost | 0 | 236 |
Selling and marketing, general and administrative | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 4,139 | 2,535 |
Short-term lease cost | 1,662 | 879 |
Variable lease cost | $ 0 | $ 270 |
Leases - Schedule of Lease Liab
Leases - Schedule of Lease Liability Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Future Minimum Payments | ||
2023 | $ 5,407 | |
2024 | 4,532 | |
2025 | 1,729 | |
2026 | 1,372 | |
2027 | 1,096 | |
Thereafter | 5,145 | |
Total | 19,281 | |
Less: Imputed Interest | (1,634) | |
Present value of net lease payments | $ 17,647 | $ 16,493 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Lease Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 2,981 | $ 3,041 |
Lease liabilities arising from new ROU assets | $ 4,476 | $ 5,707 |
Weighted average remaining lease term (in years) | 6 years | 6 years 3 months 18 days |
Weighted average discount rate | 2.98% | 2.75% |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of assets and liabilities measured at fair value on recurring basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Liabilities | ||
Warrant liabilities | $ 15,473 | $ 93,816 |
Recurring | Money market funds | ||
Assets | ||
Money market funds | 513,009 | 861,943 |
Recurring | Private placement warrants | ||
Liabilities | ||
Contingent consideration | 783 | |
Warrant liabilities | 15,473 | 93,816 |
Level 1 | Recurring | Money market funds | ||
Assets | ||
Money market funds | 513,009 | 861,943 |
Level 1 | Recurring | Private placement warrants | ||
Liabilities | ||
Contingent consideration | 0 | |
Warrant liabilities | 0 | 0 |
Level 2 | Recurring | Money market funds | ||
Assets | ||
Money market funds | 0 | 0 |
Level 2 | Recurring | Private placement warrants | ||
Liabilities | ||
Contingent consideration | 0 | |
Warrant liabilities | 0 | 0 |
Level 3 | Recurring | Money market funds | ||
Assets | ||
Money market funds | 0 | 0 |
Level 3 | Recurring | Private placement warrants | ||
Liabilities | ||
Contingent consideration | 783 | |
Warrant liabilities | $ 15,473 | $ 93,816 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Nov. 03, 2021 | May 04, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Stock issued upon conversion (in shares) | 11,500,000 | |||||
Proceeds from exercise of warrants | $ 0 | $ 188,378 | $ 0 | |||
Public warrants | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Warrant redemption price (in dollars per share) | $ 0.10 | |||||
Warrants exercised (in shares) | 16,200,000 | |||||
Warrants exercised, cash (in shares) | 16,100,000 | |||||
Warrants, exercise price (in dollars per share) | $ 11.50 | $ 11.50 | ||||
Warrants exercised, cashless basis (in shares) | 74,104 | |||||
Stock issued upon conversion (in shares) | 26,732 | |||||
Warrants redeemed (in shares) | 75,016 | |||||
Proceeds from exercise of warrants | $ 185,400 | |||||
Warrants outstanding (in shares) | 0 | 0 | 15,333,333 | |||
Public warrants, initial public offer | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Warrants exercised (in shares) | 15,300,000 | |||||
Public warrants, converted from private warrant sale | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Warrants exercised (in shares) | 900,000 | |||||
Private placement warrants | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Warrants exercised (in shares) | 300,000 | |||||
Warrants, exercise price (in dollars per share) | $ 11.50 | |||||
Proceeds from exercise of warrants | $ 3,000 | |||||
Warrants outstanding (in shares) | 7,000,000 | 7,000,000 | 9,333,333 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Less: accumulated depreciation and amortization | $ (12,494) | $ (8,561) | |
Property and equipment, net | 18,184 | 16,183 | |
Loss on disposal of property and equipment, net | 2,000 | ||
Depreciation of property and equipment | 7,164 | 4,486 | $ 2,552 |
Cost of sales | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation of property and equipment | 2,126 | 1,313 | 1,161 |
General and administrative | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation of property and equipment | 3,295 | 1,625 | 1,391 |
Selling and marketing | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation of property and equipment | 1,743 | 1,548 | $ 0 |
Depreciable property and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Plant and equipment, including finance lease, gross | 29,303 | 19,391 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Plant and equipment, including finance lease, gross | $ 5,364 | 4,074 | |
Furniture and fixtures | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (years) | 2 years | ||
Furniture and fixtures | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (years) | 7 years | ||
Computers and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Plant and equipment, including finance lease, gross | $ 4,901 | 4,010 | |
Computers and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (years) | 3 years | ||
Computers and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (years) | 5 years | ||
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Plant and equipment, including finance lease, gross | $ 6,427 | 3,669 | |
Machinery and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (years) | 2 years | ||
Machinery and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (years) | 5 years | ||
Autos and trucks | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (years) | 5 years | ||
Plant and equipment, including finance lease, gross | $ 161 | 1,163 | |
Tooling | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (years) | 5 years | ||
Plant and equipment, including finance lease, gross | $ 638 | 1,389 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Plant and equipment, including finance lease, gross | 11,812 | 5,086 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Plant and equipment, including finance lease, gross | $ 1,375 | $ 5,353 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, net - Intangible assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 114,806 | $ 112,299 | |
Accumulated Amortization | (68,420) | (56,289) | |
Net Carrying Value | 46,386 | 56,010 | |
Amortization expense | 14,852 | 13,297 | $ 11,849 |
Cost of sales | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 9,450 | 9,000 | 9,465 |
General and administrative | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 2,969 | 2,477 | 2,384 |
Selling and marketing | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 2,433 | 1,820 | $ 0 |
Trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | 10,907 | 10,048 | |
Accumulated Amortization | (4,119) | (3,442) | |
Net Carrying Value | $ 6,788 | $ 6,606 | |
Estimated Useful Life (Years) | 15 years | 15 years | |
Non-compete agreement | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 776 | $ 809 | |
Accumulated Amortization | (395) | (139) | |
Net Carrying Value | $ 381 | $ 670 | |
Estimated Useful Life (Years) | 3 years | 3 years | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 18,089 | $ 18,625 | |
Accumulated Amortization | (7,602) | (4,391) | |
Net Carrying Value | $ 10,487 | $ 14,234 | |
Customer relationships | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life (Years) | 5 years | 5 years | |
Customer relationships | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life (Years) | 10 years | 10 years | |
Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 73,188 | $ 70,900 | |
Accumulated Amortization | (54,422) | (45,051) | |
Net Carrying Value | $ 18,766 | $ 25,849 | |
Estimated Useful Life (Years) | 8 years | ||
Developed technology | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life (Years) | 3 years | ||
Developed technology | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life (Years) | 8 years | ||
Patents | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 2,226 | $ 2,050 | |
Accumulated Amortization | (375) | (295) | |
Net Carrying Value | $ 1,851 | $ 1,755 | |
Patents | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life (Years) | 3 years | 3 years | |
Patents | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life (Years) | 19 years | 19 years | |
Capitalized software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 9,620 | $ 9,867 | |
Accumulated Amortization | (1,507) | (2,971) | |
Net Carrying Value | $ 8,113 | $ 6,896 | |
Capitalized software | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life (Years) | 3 years | 3 years | |
Capitalized software | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life (Years) | 5 years | 5 years |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Loss on disposal of intangible assets | $ 2,500 | ||||
Increase in goodwill | 2,154 | $ 26,600 | $ 0 | ||
Ecomedic | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Increase in goodwill | $ 200 | 200 | |||
Sidermica | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Increase in goodwill | $ 1,980 | $ 1,980 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, net - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | |||
Beginning balance | $ 123,694 | $ 98,531 | $ 98,520 |
Measurement period adjustments | 2,154 | 26,600 | 0 |
Foreign currency translation impact | (1,255) | (1,437) | 11 |
Ending balance | $ 124,593 | $ 123,694 | $ 98,531 |
Long-term Debt - Narrative (Det
Long-term Debt - Narrative (Details) | 12 Months Ended | ||||
Dec. 30, 2021 USD ($) | Sep. 14, 2021 USD ($) day $ / shares | Sep. 09, 2021 USD ($) $ / shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | |||||
Event of default, default interest rate, maximum | 1% | ||||
Purchase of capped calls related to Convertible Senior Notes | $ 90,150,000 | ||||
Write off of deferred finance costs | 2,300,000 | ||||
Debt prepayment cost | 2,000,000 | ||||
Call option | |||||
Debt Instrument [Line Items] | |||||
Initial cap price (in dollars per share) | $ / shares | $ 47.94 | ||||
Premium over sales price | 100% | ||||
Purchase of capped calls related to Convertible Senior Notes | $ 90,200,000 | ||||
Credit Agreement Due 2026 | Revolving credit facility | Line of credit | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 50,000,000 | ||||
Line of credit, accordion feature | $ 50,000,000 | ||||
Leverage ratio, maximum | 3 | ||||
Fixed charge coverage ratio, minimum | 1.15 | ||||
Unused commitment fee percentage | 0.25% | ||||
Long-term debt | $ 0 | ||||
Credit Agreement Due 2026 | Revolving credit facility | Line of credit | Minimum | |||||
Debt Instrument [Line Items] | |||||
Unused commitment fee percentage | 0.25% | ||||
Credit Agreement Due 2026 | Revolving credit facility | Line of credit | Minimum | LIBOR | Variable rate one | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.50% | ||||
Credit Agreement Due 2026 | Revolving credit facility | Line of credit | Minimum | Base rate | Variable rate two | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Credit Agreement Due 2026 | Revolving credit facility | Line of credit | Maximum | |||||
Debt Instrument [Line Items] | |||||
Unused commitment fee percentage | 0.35% | ||||
Credit Agreement Due 2026 | Revolving credit facility | Line of credit | Maximum | LIBOR | Variable rate one | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 2% | ||||
Credit Agreement Due 2026 | Revolving credit facility | Line of credit | Maximum | Base rate | Variable rate two | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1% | ||||
1.25% Convertible Senior Notes Due 2026 | Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 734,143,000 | $ 729,914,000 | |||
Face amount | $ 750,000,000 | ||||
Stated interest rate | 1.25% | 1.25% | 1.25% | ||
Accordion feature, settlement period | 13 days | ||||
Accordion feature, increase limit | $ 100,000,000 | ||||
Conversion price (in dollars per share) | $ / shares | $ 31.76 | $ 31.76 | |||
Convertible, threshold percentage of stock price trigger | 130% | ||||
Convertible, threshold trading days | day | 20 | ||||
Convertible, threshold consecutive trading days | day | 30 | ||||
Convertible, minimum aggregate principal outstanding | $ 100,000,000 | ||||
Event of default, cure period, interest payments | 30 days | ||||
Event of default, cure period | 60 days | ||||
Event of default, indebtedness threshold amount | $ 45,000,000 | ||||
Event of default, minimum percent of aggregate outstanding principal due | 25% | ||||
Event of default, default interest rate period | 180 days | ||||
Debt issuance costs | $ 21,300,000 | ||||
Amortization of debt issuance costs | $ 4,200,000 | $ 1,300,000 | |||
Debt term | 3 years 9 months 18 days | ||||
Conversion ratio | 0.0314859 | ||||
1.25% Convertible Senior Notes Due 2026 | Convertible Debt | Level 2 | |||||
Debt Instrument [Line Items] | |||||
Fair value of debt | $ 567,000,000 | 794,325,000 | |||
Existing Debt Prior to the Closing of the Business Combination | |||||
Debt Instrument [Line Items] | |||||
Amortization of debt issuance costs | $ 500,000 |
Long-term Debt - Schedule of lo
Long-term Debt - Schedule of long-term debt (Details) - Convertible Debt - 1.25% Convertible Senior Notes Due 2026 - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 14, 2021 |
Debt Instrument [Line Items] | |||
Stated interest rate | 1.25% | 1.25% | 1.25% |
Principal Amount | $ 750,000 | $ 750,000 | |
Unamortized Issuance Costs | 15,857 | 20,086 | |
Net Carrying Value | 734,143 | 729,914 | |
Level 2 | |||
Debt Instrument [Line Items] | |||
Fair value of debt | $ 567,000 | $ 794,325 |
Income Taxes - Schedule of inco
Income Taxes - Schedule of income before income tax, domestic and foreign (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 43,641 | $ (375,542) | |
Foreign | 1,391 | (1,808) | |
Income (loss) before provision for income taxes | $ 45,032 | $ (377,350) | $ (38,483) |
Income Taxes - Schedule of comp
Income Taxes - Schedule of components of income tax expense (benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Federal | $ 407 | $ (727) | |
State | 306 | 513 | |
Foreign | 1,722 | 1,735 | |
Total current income tax expense | 2,435 | 1,521 | |
Deferred: | |||
Federal | (257) | (3,319) | |
State | (166) | (80) | |
Foreign | (1,364) | (364) | |
Total deferred income tax benefit | (1,787) | (3,763) | $ (4,341) |
Total income tax expense (benefit) | $ 648 | $ (2,242) | $ (9,308) |
Income Taxes - Schedule of effe
Income Taxes - Schedule of effective income tax rate reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Amount | |||
Federal statutory income tax rate | $ 9,443 | $ (79,243) | |
State taxes, net of federal benefit | (1,041) | (1,041) | |
Officer compensation | 2,324 | 486 | |
Change in fair value of warrants | (16,452) | 58,236 | |
Change in fair value of earn-out shares | 0 | 9,891 | |
Transaction Costs | (32) | 3,312 | |
Foreign rate differential | (85) | 475 | |
R&D credit | (900) | (152) | |
Change in valuation allowance | 5,914 | 4,064 | |
Other | 1,477 | 1,730 | |
Total income tax expense (benefit) | $ 648 | $ (2,242) | $ (9,308) |
Percent | |||
Federal statutory income tax rate | 21% | 21% | |
State taxes, net of federal benefit | (2.30%) | 0.30% | |
Officer compensation | 5.20% | (0.10%) | |
Change in fair value of warrants | (36.60%) | (15.40%) | |
Change in fair value of earn-out shares | 0% | (2.60%) | |
Transaction Costs | (0.10%) | (0.90%) | |
Foreign rate differential | (0.20%) | (0.10%) | |
R&D credit | (2.00%) | 0% | |
Change in valuation allowance | 13.20% | (1.10%) | |
Other | 3.30% | (0.50%) | |
Effective tax rate (as a percent) | 1.50% | 0.60% |
Income Taxes - Schedule of defe
Income Taxes - Schedule of deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred income tax assets | ||
State taxes | $ 55 | $ 69 |
Accrued expenses | 1,608 | 3,610 |
Inventories | 4,772 | 1,905 |
Accounts receivable | 625 | 639 |
Section 163(j) limitation | 4,782 | 3,224 |
Net operating loss carryforwards | 3,680 | 5,354 |
Stock-based compensation | 5,072 | 1,883 |
Lease liabilities | 4,469 | 4,104 |
Other | 685 | 220 |
Total deferred income tax assets | 25,748 | 21,008 |
Deferred income tax liabilities | ||
Goodwill and intangibles | (3,852) | (7,922) |
Prepaid expenses | (435) | (526) |
Right-of-use Assets | (3,966) | (3,733) |
Property and equipment | (3,852) | (3,134) |
Total deferred tax liabilities | (12,105) | (15,315) |
Valuation allowance | (14,839) | (8,924) |
Net deferred income tax liabilities | (1,196) | (3,231) |
Deferred income tax assets, net | 815 | 330 |
Deferred income tax liabilities, net | $ (2,011) | $ (3,561) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance increase | $ (5,900) | ||
Significant change in unrecognized tax benefits, amount that would be recorded in continuing operations | 14,800 | ||
Gross unrecognized tax benefits | 674 | $ 210 | $ 270 |
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 9,000 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 14,700 | ||
Foreign | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | $ 4,700 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits at beginning of period | $ 210 | $ 270 |
Increases for tax positions in prior periods | 260 | 0 |
Decreases for tax positions in prior periods | (36) | (60) |
Increases for tax positions in current period | 240 | 0 |
Unrecognized tax benefits at end of period | $ 674 | $ 210 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Defined contribution plan, service period | 1 month | ||
Defined contribution plan, contribution cost | $ 2.2 | $ 1.4 | $ 0.8 |
Equity-Based Compensation - Nar
Equity-Based Compensation - Narrative (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 shares | Dec. 31, 2022 USD ($) tradingDay $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost, options | $ | $ 27.1 | ||
Fair value of equity awards vested | $ | $ 2.7 | $ 0.7 | |
Stock options forfeited (in shares) | 1,144,700 | ||
2021 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 14,839,640 | ||
Increase in shares, percentage of aggregate shares outstanding | 4% | ||
Common stock reserved for future issuance (in shares) | 9,900,000 | ||
Incentive Stock Options | 2021 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 7,500,000 | ||
Incentive Stock Options | 2021 Plan | Class A common stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Annual increase (in share) | 6,000,000 | ||
ESPP | 2021 ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 2,000,000 | ||
Increase in shares, percentage of aggregate shares outstanding | 1% | ||
Maximum employee subscription rate | 10% | ||
Discount from market price during offering period | 85% | ||
ESPP | 2021 ESPP | Class A common stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock purchase (in shares) | 206,112 | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant date fair value of options granted (in dollars per share) | $ / shares | $ 12.23 | $ 7.84 | |
Unrecognized compensation cost, options | $ | $ 49 | ||
Unrecognized compensation cost, period for recognition | 2 years 5 months 15 days | 3 years 5 months 23 days | |
Award vesting period | 4 years | ||
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost, period for recognition | 2 years 5 months 1 day | ||
Unrecognized compensation cost | $ | $ 28.6 | ||
RSUs | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
RSUs | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 4 years | ||
PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost, period for recognition | 2 years | ||
Unrecognized compensation cost | $ | $ 16.4 | ||
PSUs | 2021 Plan, 2021 Grants | Tranche one | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Award vesting, threshold trading days | tradingDay | 90 | ||
PSUs | 2021 Plan, 2021 Grants | Tranche two | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 1 year | ||
Award vesting, threshold trading days | tradingDay | 90 | ||
PSUs | 2021 Plan, 2021 Grants | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 0% | ||
PSUs | 2021 Plan, 2021 Grants | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 100% | ||
PSUs | 2021 Plan, 2022 Grants | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 0% | ||
PSUs | 2021 Plan, 2022 Grants | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 200% |
Equity-Based Compensation - Sch
Equity-Based Compensation - Schedule of stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Options | |||
Outstanding, beginning balance (in shares) | 6,785,020 | 6,785,020 | |
Granted (in shares) | 10,500 | ||
Unvested forfeited (in shares) | (1,144,700) | ||
Vested Expired (in shares) | (49,050) | ||
Outstanding, ending balance (in shares) | 5,601,770 | 6,785,020 | |
Options exercisable (in shares) | 1,446,117 | ||
Options vested and expected to vest (in shares) | 5,601,770 | ||
Weighted Average Exercise Price | |||
Outstanding, beginning balance (in dollars per share) | $ 15.64 | $ 15.64 | |
Granted (in dollars per share) | 22.68 | ||
Unvested forfeited (in dollars per share) | 18.60 | ||
Vested Expired (in dollars per share) | 15.77 | ||
Outstanding, ending balance (in dollars per share) | 15.21 | $ 15.64 | |
Options exercisable (in dollars per share) | $ 15.31 | ||
Options vested and expected to vest (in dollars per share) | $ 15.21 | ||
Weighted Average Remaining Contractual Term (in years) | |||
Options outstanding, weighted average remaining contractual term | 8 years 4 months 2 days | 9 years 5 months 12 days | |
Options exercisable, weighted average remaining contractual term | 8 years 21 days | ||
Options vested and expected to vest, weighted average remaining contractual term | 8 years 4 months 2 days | ||
Options outstanding, aggregate intrinsic value | $ 0 | $ 59,482 | |
Options exercisable, aggregate intrinsic value | $ 0 | ||
Options vested and expected to vest, aggregate intrinsic value | $ 0 |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of valuation assumptions (Details) - PSUs | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
2021 Plan, 2021 Grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility of the Company’s Class A Common Stock | 55% | |
Minimum | 2021 Plan, 2022 Grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.52% | |
Expected volatility of the Company’s Class A Common Stock | 57.70% | |
Minimum | 2021 Plan, 2021 Grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 0.50% | |
Maximum | 2021 Plan, 2022 Grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 4.23% | |
Expected volatility of the Company’s Class A Common Stock | 66% | |
Maximum | 2021 Plan, 2021 Grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 0.65% |
Equity Based Compensation - Sch
Equity Based Compensation - Schedule of unvested share activity (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
RSUs | |
Shares | |
Outstanding, beginning balance (in shares) | shares | 380,775 |
Granted (in shares) | shares | 2,936,252 |
Vested (in shares) | shares | (207,164) |
Forfeited (in shares) | shares | (529,711) |
Outstanding, ending balance (in shares) | shares | 2,580,152 |
Weighted Average Grant Date Fair Value | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 25.88 |
Granted (in dollars per share) | $ / shares | 13.47 |
Vested (in dollars per share) | $ / shares | 20.12 |
Forfeited (in dollars per share) | $ / shares | 14.95 |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 14.47 |
PSUs | |
Shares | |
Outstanding, beginning balance (in shares) | shares | 975,000 |
Granted (in shares) | shares | 1,734,864 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | (209,738) |
Outstanding, ending balance (in shares) | shares | 2,500,126 |
Weighted Average Grant Date Fair Value | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 11.39 |
Granted (in dollars per share) | $ / shares | 8.79 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 14.30 |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 9.34 |
Equity Based Compensation - Sum
Equity Based Compensation - Summary of share based compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | $ 28,495 | $ 12,418 | $ 363 |
Cost of sales | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | 839 | 405 | 67 |
Selling and marketing | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | 9,363 | 3,547 | 58 |
Research and development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | 602 | 195 | 0 |
General and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | $ 17,691 | $ 8,271 | $ 238 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) | Sep. 07, 2022 USD ($) |
California Case And Texas Case Against Ageless Serums LLC | |
Loss Contingencies [Line Items] | |
Litigation case, damages sought | $ 12,616,983 |
Concentrations (Details)
Concentrations (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Customer Concentration Risk | Accounts receivable | Customer one | |
Concentration Risk [Line Items] | |
Concentration risk (as a percent) | 12% |
Related-Party Transactions (Det
Related-Party Transactions (Details) | 12 Months Ended | |||
May 04, 2021 USD ($) tradingDay $ / shares shares | Dec. 01, 2016 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Related Party Transaction [Line Items] | ||||
Stock issued upon conversion (in shares) | shares | 11,500,000 | |||
Payment of transaction costs | $ 57,000,000 | $ 56,976,000 | ||
Private placement warrants | ||||
Related Party Transaction [Line Items] | ||||
Reverse recapitalization, contingent consideration, earnout period | 30 days | |||
Financial and management advisory services | Affiliated entity | ||||
Related Party Transaction [Line Items] | ||||
Monitoring fee, quarterly amount | $ 125,000 | |||
Monitoring fee, percentage of preceding 12-month EBITDA | 1.25% | |||
Transaction rate | 1% | |||
Related party, agreement term | 1 year | |||
Related party, expiration period | 12 months | |||
Transaction amount | $ 0 | 200,000 | ||
Payment of transaction costs | 21,000,000 | |||
Financial and management advisory services | Minimum | Affiliated entity | ||||
Related Party Transaction [Line Items] | ||||
Transaction rate | 1% | |||
Financial and management advisory services | Maximum | Affiliated entity | ||||
Related Party Transaction [Line Items] | ||||
Transaction rate | 2% | |||
Miami Beach Office reimbursement expense | Affiliated entity | ||||
Related Party Transaction [Line Items] | ||||
Transaction amount | $ 0 | $ 0 | ||
Vesper Founders | ||||
Related Party Transaction [Line Items] | ||||
Reverse recapitalization, contingent consideration, earnout period | 1 year | |||
Reverse recapitalization, contingent consideration, stock price trigger (in dollars per share) | $ / shares | $ 12 | |||
Reverse recapitalization, contingent consideration, threshold days | tradingDay | 20 | |||
Reverse recapitalization, contingent consideration, consecutive threshold days | tradingDay | 30 | |||
Reverse recapitalization, contingent consideration, commencement period | 150 days | |||
LCP | ||||
Related Party Transaction [Line Items] | ||||
Reverse recapitalization, threshold percentage to designate one director | 10% | |||
Reverse recapitalization, threshold percentage to designate two directors | 15% | |||
Reverse recapitalization, threshold percentage to designate three directors | 40% | |||
Reverse recapitalization, threshold percentage to designate one director on board | 10% |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||||||
Dec. 16, 2022 shares | Nov. 09, 2022 USD ($) shares | Sep. 27, 2022 USD ($) shares | May 04, 2021 USD ($) shares | Dec. 31, 2022 USD ($) vote $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) | Sep. 26, 2022 USD ($) | May 03, 2021 $ / shares shares | |
Class of Stock [Line Items] | |||||||||
Common stock, shares authorized (in shares) | 320,000,000 | 320,000,000 | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Common stock, number of votes | vote | 1 | ||||||||
Common stock, shares issued (in shares) | 132,214,695 | 150,598,047 | |||||||
Common stock, shares outstanding (in shares) | 125,399,913 | 132,214,695 | 150,598,047 | 54,358 | |||||
Consideration received on transaction | $ | $ 350,000 | ||||||||
Legacy HydraFacial shares (in shares) | 35,501,743 | ||||||||
Initial payment | $ | $ 160,000 | $ 0 | $ 154 | ||||||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | |||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||||
Preferred stock, shares issued (in shares) | 0 | 0 | |||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | |||||||
Accelerated Share Repurchase | |||||||||
Class of Stock [Line Items] | |||||||||
Initial payment | $ | $ 100,000 | $ 100,000 | |||||||
Stock repurchased (in shares) | 1,600,000 | 9,500,000 | 7,700,000 | ||||||
Stock repurchased during period percentage | 80% | 80% | |||||||
Class A common stock | |||||||||
Class of Stock [Line Items] | |||||||||
Common stock, shares issued (in shares) | 125,329,053 | ||||||||
Common stock, shares outstanding (in shares) | 125,329,053 | ||||||||
Consideration received on transaction (in shares) | 35,000,000 | ||||||||
Consideration received on transaction | $ | $ 350,000 | ||||||||
Legacy HydraFacial shares (in shares) | 35,501,743 | ||||||||
Common stock repurchase authorized | $ | $ 200,000 | ||||||||
Stock repurchased (in shares) | 2,672,690 | ||||||||
Class A common stock | Accelerated Share Repurchase | |||||||||
Class of Stock [Line Items] | |||||||||
Common stock repurchase authorized | $ | $ 200,000 | $ 200,000 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Disaggregation of Revenue [Line Items] | |||
Number of operating segments | segment | 1 | ||
Number of reportable segments | segment | 1 | ||
Net sales | $ 365,876 | $ 260,086 | $ 119,092 |
Americas | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 243,243 | 169,426 | 81,453 |
Asia-Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 54,306 | 43,701 | 14,464 |
Europe, the Middle East and Africa | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 68,327 | $ 46,959 | $ 23,175 |
Net Income (Loss) Attributabl_3
Net Income (Loss) Attributable to Common Shareholders - Schedule of basic and diluted earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Net income (loss) available to common stockholders - basic | $ 44,384 | $ (375,108) | $ (29,175) |
Less: Income on Private placement warrants | (78,343) | 0 | 0 |
Net loss available to common stockholders - diluted | $ (33,959) | $ (375,108) | $ (29,175) |
Weighted average common shares outstanding - basic (in shares) | 147,554,090 | 102,114,949 | 34,293,271 |
Effect of dilutive shares: | |||
Private placement warrants (in shares) | 952,222 | 0 | 0 |
Weighted average common shares outstanding - diluted (in shares) | 148,506,312 | 102,114,949 | 34,293,271 |
Basic net income (loss) per share (in dollars per share) | $ 0.30 | $ (3.67) | $ (0.85) |
Diluted net income (loss) per share (in dollars per share) | $ (0.23) | $ (3.67) | $ (0.85) |
Net Income (Loss) Attributabl_4
Net Income (Loss) Attributable to Common Shareholders - Schedule of antidilutive securities excluded from earnings per share computation (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Convertible Notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded (in shares) | 23,614,425 | 23,614,425 | 0 |
RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded (in shares) | 2,580,152 | 380,775 | 0 |
PSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded (in shares) | 2,500,126 | 975,000 | 0 |
Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded (in shares) | 5,601,770,000 | 6,785,020 | 542 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent event - Esthetic Medical Inc. $ in Millions | Feb. 27, 2023 USD ($) |
Subsequent Event [Line Items] | |
Total consideration | $ 16.3 |
Equity consideration | 1.3 |
Payment to acquire business, gross | 15 |
Contingent consideration | $ 3.2 |