Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 05, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-40683 | |
Entity Registrant Name | SNAP ONE HOLDINGS CORP. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-1952221 | |
Entity Address, Address Line One | 1800 Continental Boulevard | |
Entity Address, Address Line Two | Suite 200 | |
Entity Address, City or Town | Charlotte | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 28273 | |
City Area Code | 704 | |
Local Phone Number | 927-7620 | |
Title of 12(b) Security | Common stock, par value $.01 per share | |
Trading Symbol | SNPO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 76,222,149 | |
Amendment Flag | false | |
Entity Central Index Key | 0001856430 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-29 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 34,452 | $ 21,117 |
Accounts receivable, net | 50,415 | 48,174 |
Inventories | 313,555 | 314,588 |
Prepaid expenses | 23,042 | 22,913 |
Other current assets | 3,771 | 5,930 |
Total current assets | 425,235 | 412,722 |
Long-term assets: | ||
Property and equipment, net | 41,426 | 34,958 |
Goodwill | 592,195 | 592,186 |
Other intangible assets, net | 541,996 | 554,419 |
Operating lease right-of-use assets | 51,541 | 54,041 |
Other assets | 4,949 | 4,195 |
Total assets | 1,657,342 | 1,652,521 |
Current liabilities: | ||
Current maturities of long-term debt | 5,200 | 5,063 |
Accounts payable | 66,704 | 77,443 |
Accrued liabilities | 64,255 | 64,605 |
Current operating lease liability | 9,964 | 10,574 |
Current tax receivable agreement liability | 23,195 | 10,191 |
Total current liabilities | 169,318 | 167,876 |
Long-term liabilities: | ||
Revolving credit facility, net | 48,876 | 10,800 |
Long-term debt, net of current portion | 496,054 | 496,795 |
Deferred income tax liabilities, net | 37,670 | 43,515 |
Operating lease liability, net of current portion | 52,195 | 50,896 |
Tax receivable agreement liability, net of current portion | 78,211 | 101,262 |
Other liabilities | 25,641 | 24,206 |
Total liabilities | 907,965 | 895,350 |
Commitments and contingencies (Note 14) | ||
Stockholders’ equity: | ||
Common stock, $0.01 par value, 500,000 shares authorized; 75,252 shares issued and outstanding as of March 31, 2023 and 75,042 shares issued and outstanding at December 30, 2022 | 752 | 750 |
Preferred stock, $0.01 par value; 50,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Additional paid-in capital | 855,202 | 848,703 |
Accumulated deficit | (102,594) | (88,046) |
Accumulated other comprehensive loss | (3,983) | (4,236) |
Total stockholders’ equity | 749,377 | 757,171 |
Total liabilities and stockholders’ equity | $ 1,657,342 | $ 1,652,521 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued (in shares) | 75,252,000 | 75,042,000 |
Common stock, outstanding (in shares) | 75,252,000 | 75,042,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Preferred stock, issued (in shares) | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Apr. 01, 2022 | |
Income Statement [Abstract] | ||
Net sales | $ 252,040 | $ 277,434 |
Costs and expenses: | ||
Cost of sales, exclusive of depreciation and amortization | 145,813 | 172,332 |
Selling, general and administrative expenses | 93,797 | 86,527 |
Depreciation and amortization | 15,202 | 14,889 |
Total costs and expenses | 254,812 | 273,748 |
Income (loss) from operations | (2,772) | 3,686 |
Other expenses (income): | ||
Interest expense | 13,949 | 6,723 |
Other expense (income), net | 827 | (420) |
Total other expenses | 14,776 | 6,303 |
Loss before income taxes | (17,548) | (2,617) |
Income tax benefit | (3,000) | (361) |
Net loss | (14,548) | (2,256) |
Net loss attributable to noncontrolling interest | 0 | (20) |
Net loss attributable to Company | $ (14,548) | $ (2,236) |
Net loss per share, basic (in dollars per share) | $ (0.19) | $ (0.03) |
Net loss per share, diluted (in dollars per share) | $ (0.19) | $ (0.03) |
Weighted average shares outstanding - basic (in shares) | 75,291 | 74,464 |
Weighted average shares outstanding - diluted (in shares) | 75,291 | 74,464 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Apr. 01, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (14,548) | $ (2,256) |
Other comprehensive loss, net of tax: | ||
Foreign currency translation adjustments | 253 | 6 |
Comprehensive loss | (14,295) | (2,250) |
Comprehensive loss attributable to noncontrolling interest | 0 | (20) |
Comprehensive loss attributable to Company | $ (14,295) | $ (2,230) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest |
Balance at beginning of period (in shares) at Dec. 31, 2021 | 74,427,000 | |||||
Balance at beginning of period at Dec. 31, 2021 | $ 748,275 | $ 744 | $ 826,718 | $ (79,420) | $ (28) | $ 261 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (2,256) | (2,236) | (20) | |||
Foreign currency translation adjustments | 6 | 6 | ||||
Equity-based compensation | 5,599 | 5,599 | ||||
Issuance of common stock pursuant to equity incentive plans (in shares) | 53,000 | |||||
Issuance of common stock pursuant to equity incentive plans | 0 | $ 1 | (1) | |||
Balance at end of period (in shares) at Apr. 01, 2022 | 74,480,000 | |||||
Balance at end of period at Apr. 01, 2022 | 751,624 | $ 745 | 832,316 | (81,656) | (22) | 241 |
Balance at beginning of period (in shares) at Dec. 31, 2021 | 74,427,000 | |||||
Balance at beginning of period at Dec. 31, 2021 | $ 748,275 | $ 744 | 826,718 | (79,420) | (28) | 261 |
Balance at end of period (in shares) at Dec. 30, 2022 | 75,042,000 | 75,042,000 | ||||
Balance at end of period at Dec. 30, 2022 | $ 757,171 | $ 750 | 848,703 | (88,046) | (4,236) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (14,548) | (14,548) | ||||
Foreign currency translation adjustments | 253 | 253 | ||||
Equity-based compensation | 7,577 | 7,577 | ||||
Repurchase and retirement of common stock (in shares) | (27,000) | |||||
Repurchase and retirement of common stock | (238) | (238) | ||||
Issuance of common stock pursuant to equity incentive plans (in shares) | 332,000 | |||||
Issuance of common stock pursuant to equity incentive plans | 0 | $ 3 | (3) | |||
Tax withholding on net share settlement of equity awards (in shares) | (95,000) | |||||
Tax withholding on net share settlement of equity awards | (1,024) | $ (1) | (1,023) | |||
Employee stock purchase plan | $ 186 | 186 | ||||
Balance at end of period (in shares) at Mar. 31, 2023 | 75,252,000 | 75,252,000 | ||||
Balance at end of period at Mar. 31, 2023 | $ 749,377 | $ 752 | $ 855,202 | $ (102,594) | $ (3,983) | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Apr. 01, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (14,548) | $ (2,256) |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Depreciation and amortization | 15,202 | 14,889 |
Amortization of debt issuance costs | 772 | 458 |
Unrealized loss on interest rate cap | 818 | 0 |
Deferred income taxes | (5,869) | (2,965) |
Equity-based compensation | 7,763 | 5,599 |
Non-cash operating lease expense | 3,310 | 2,985 |
Bad debt expense | 307 | 74 |
Fair value adjustment to contingent value rights | 600 | (2,800) |
Valuation adjustment to TRA liability | 144 | 0 |
Other, net | 130 | 0 |
Change in operating assets and liabilities: | ||
Accounts receivable | (2,614) | (2,804) |
Inventories | 1,205 | (25,032) |
Prepaid expenses and other assets | 1,268 | 2,269 |
Accounts payable, accrued liabilities and operating lease liabilities | (11,118) | (13,439) |
Net cash used in operating activities | (2,630) | (23,022) |
Cash flows from investing activities: | ||
Acquisition of business, net of cash acquired | 0 | (25,639) |
Purchases of property and equipment | (9,164) | (3,312) |
Issuance of notes receivable | 0 | (600) |
Other, net | 39 | 30 |
Net cash used in investing activities | (9,125) | (29,521) |
Cash flows from financing activities: | ||
Payments on long-term debt | (1,300) | 0 |
Proceeds from revolving credit facility | 38,000 | 37,000 |
Repurchase and retirement of common stock | (293) | 0 |
Payment of tax withholding obligation on settlement of equity awards | (1,024) | 0 |
Payments of tax receivable agreement | (10,191) | 0 |
Contingent consideration payments | (250) | 0 |
Net cash provided by financing activities | 24,942 | 37,000 |
Effect of exchange rate changes on cash and cash equivalents | 148 | 21 |
Net increase (decrease) in cash and cash equivalents | 13,335 | (15,522) |
Cash and cash equivalents at beginning of the period | 21,117 | 40,577 |
Cash and cash equivalents at end of the period | 34,452 | 25,055 |
Supplementary cash flow information: | ||
Cash paid for interest | 14,098 | 7,710 |
Cash paid for taxes, net | 969 | 1,018 |
Noncash investing and financing activities: | ||
Capital expenditure in accounts payable | $ 937 | $ 305 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of BusinessSnap One Holdings Corp. (referred to herein as “Snap One” or the “Company”) is incorporated in Delaware with its principal executive offices located in Charlotte, North Carolina and Lehi, Utah. The Company provides products, services, and software to its network of professional integrators that enable them to deliver smart living experiences for their residential and business end users. The Company’s hardware and software portfolio includes leading proprietary and third-party offerings across connected, infrastructure, and entertainment categories. Additionally, the Company provides value-added services and workflow solutions to support the integrator throughout the project lifecycle, enhancing their operations and helping them to profitably grow their businesses. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation — The accompanying condensed consolidated financial statements are unaudited and have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial statements. The condensed consolidated financial statements were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods presented. The condensed consolidated financial statements include the accounts of the Company and all subsidiaries required to be consolidated. All intercompany balances and transactions have been eliminated in the condensed consolidated financial statements. The condensed consolidated balance sheet as of December 30, 2022, has been derived from the audited consolidated financial statements of the Company. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the fiscal year ended December 30, 2022, appearing in the Company’s Annual Report on Form 10-K for the annual period ended December 30, 2022 filed with the Securities and Exchange Commission on March 15, 2023. There have been no changes to the Company’s critical accounting estimates and policies or application since the date of the Annual Report except as discussed below. The Company’s fiscal year is the 52- or 53-week period that ends on the last Friday of December. Fiscal year 2023 is a 52-week period, and fiscal year 2022 was a 52-week period. The three months ended March 31, 2023 and April 1, 2022 were 13-week periods. Use of Accounting Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes. Accordingly, the actual amounts could differ from those estimates. If actual amounts differ from estimates, revisions are included in the condensed consolidated statements of operations in the period the actual amounts become known. Recently Adopted Accounting Pronouncements — In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Accounting Standards Codification 848, “ASC 848”) . ASC 848 provides practical expedients and exceptions for an entity to elect not to apply certain modification accounting requirements to contracts affected by reference rate reform if certain criteria are met. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848) . The objective of the new reference rate reform standard is to clarify the scope of Topic 848 and provide explicit guidance to help companies applying optional expedients and exceptions. The provisions of these updates were only initially available until December 31, 2022, however, in March of 2021 the UK Financial Conduct Authority (“FCA”) announced that the cessation date has been moved to June 30, 2023. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 which extends the availability of the provisions of ASU 2021-01 until December 31, 2024. The Company’s exposure related to the expected cessation of the London InterBank Offered Rate (“LIBOR”) is limited to (i) the interest expense and certain fees it incurs on balances outstanding under its credit facilities, which the Company amended April 17, 2023 to replace LIBOR with the Secured Overnight Financing Rate (“SOFR”) (see Note 19. Subsequent Events for further discussion), (ii) certain interest rates that may become applicable pursuant to our Tax Receivable Agreement (“TRA”) which may be amended by the Company and the TRA Party Representative if such interest rates become applicable and LIBOR is no longer available and (iii) the Company’s interest rate cap agreement may be subject to amendment to align with the Company’s credit agreement. The Company does not expect that there will be a material impact to its financial statements as a result of adopting these ASUs. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 606): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires that an entity recognize and measure contract assets and liabilities from contracts with customers in a business combination in accordance with ASC 606 as if it had originated the contracts. The amendment in this update is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The guidance should be applied prospectively to business combinations occurring on or after the effective date of the amendment in this update. The Company adopted the standard as of the beginning of fiscal year 2023 and the adoption did not have a material impact on the condensed consolidated financial statements. However, the ultimate impact is dependent upon the size and frequency of future acquisitions. In September 2022, the FASB issued ASU 2022-04, Liabilities- Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions The Company completed no acquisitions during the three month period ended March 31, 2023 and three acquisitions during fiscal year 2022, as described further in the section below. The Company’s acquisitions have been accounted for under ASC 805, Business Combinations . Accordingly, the accounts of the acquired companies, after adjustments to reflect fair values assigned to assets and liabilities, have been included in the condensed consolidated financial statements from their respective dates of acquisition. The Company records purchase price in excess of amounts allocated to identifiable assets and liabilities as goodwill. Goodwill includes, but is not limited to, the value of the workforce in place, ability to generate profits and cash flows, and an established going concern. Customer relationships have been valued using the multi-period excess earnings method, a derivative of the income approach. The multi-period excess earnings method estimates the discounted net earnings attributable to the customer relationships that were acquired after considering items such as possible customer attrition. Estimated useful lives were determined based on the length and trend of projected cash flows. The length of the projected cash flow period was determined based on the expected attrition of the customer relationships, which is based on the Company’s historical experience in renewing and extending similar customer relationships and future expectations for renewing and extending similar existing customer relationships. The useful life of the customer relationships intangible assets represents the number of years over which the Company expects the customer relationships to economically contribute to the business. The trade names have been valued using the relief from royalty method under the income approach to estimate the cost savings that will accrue to the Company, which would otherwise have to pay royalties or license fees on revenue earned by using the asset. The useful lives of the assets were determined based on management’s estimate of the period of time the name will be in use. Technology has been valued using the multi-period excess earnings method, a derivative of the income approach. The net earnings attributed to the existing technology considers items such as projected research and development costs expected to be incurred to maintain the technology. The useful lives were determined based on the length and trend of projected cash flows after considering items such as the projected research and development expected to be incurred to maintain the technology. Transactions Completed in fiscal year 2022 On October 24, 2022, the Company acquired the remaining outstanding interest of its majority-owned subsidiary, Remote Maintenance Systems LP, doing business as Parasol (“Parasol”), the provider of 24/7 remote support service based on the Company’s remote management tool, OvrC, creating new opportunities for the Company’s integrators. The Company acquired the remaining outstanding equity shares of Parasol in exchange of $1,100 of the Company’s common shares. The Company made an initial investment and established its controlling interest in 2018, and has included the results of operations, assets and liabilities in its consolidated financial reports since 2018. The Company completed two additional acquisitions during fiscal year 2022 with Clare Controls, LLC (“Clare”) on August 8, 2022 and Staub Electronics, LTD (“Staub”) on January 20, 2022. The acquisitions added either products to the Company’s proprietary product lines or distribution services. The final allocation of the purchase price for Clare and Staub is as follows: Clare Staub Total purchase consideration $ 6,300 $ 26,395 Cash and cash equivalents $ — $ 756 Accounts receivable — 1,801 Inventory — 5,472 Prepaid expenses 263 1,616 Property and equipment, net 26 451 Operating lease right-of-use assets 160 2,309 Identifiable intangible assets 4,300 14,209 Total identifiable assets acquired 4,749 26,614 Accounts payable 568 1,570 Accrued liabilities 284 2,206 Current operating lease liability 43 343 Deferred income tax liabilities — 3,585 Operating lease liability, net of current portion 117 1,953 Other liabilities 183 — Total liabilities assumed 1,195 9,657 Net identifiable assets acquired 3,554 16,957 Goodwill 2,746 9,438 Net assets acquired $ 6,300 $ 26,395 The Company recorded intangible assets related to the acquisitions based on estimated fair value, which consisted of the following: Clare Staub Useful Lives Acquired Value Useful Lives Acquired Value Customer relationships — $ — 10 $ 12,684 Technology 4 3,400 — — Trade name 6 900 6 1,525 Total intangible assets $ 4,300 $ 14,209 Goodwill arising from the Clare acquisition primarily consists of synergies from integrating Clare’s automation and security products into the Company’s existing product portfolio. Goodwill arising from the Staub acquisition primarily consists of synergies from integrating the distribution channels of Staub into the Company’s distribution channels. As a result of the Clare transaction, the Company had, for income tax purposes, goodwill of $2,746 that will be deductible in future periods. The Company recognized $328 of transaction-related expenses for Staub consisting primarily of advisory, legal, and other professional fees, during the three months ended April 1, 2022, which were included in selling, general, and administrative expenses in the consolidated statement of operations. Pro forma financial information related to the Clare and Staub acquisitions has not been provided as it is not material to the Company’s consolidated results of operations. The results of operations of the Staub acquisition are included in the Company’s consolidated results of operations from the date of acquisition and were not significant for the three months ended April 1, 2022. |
Revenue and Geographic Informat
Revenue and Geographic Information | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue and Geographic Information | Revenue and Geographic Information Contract Balances — Amounts invoiced in advance of revenue recognition are recorded as deferred revenue on the condensed consolidated balance sheets. Deferred revenue primarily relates to unspecified software updates and upgrades, hosting, technical support, marketing incentive programs, and subscription services. The following table represents the changes in deferred revenue for the three months ended March 31, 2023 and April 1, 2022: Three Months Ended March 31, April 1, Deferred revenue – beginning of period $ 35,051 $ 33,385 Amounts billed, but not recognized 8,548 8,531 Recognition of revenue (8,728) (7,281) Deferred revenue – end of period $ 34,871 $ 34,635 The Company recorded deferred revenue of $22,679 and $22,611 in accrued liabilities and $12,192 and $12,440 in other liabilities as of March 31, 2023 and December 30, 2022, respectively. Disaggregation of Revenue — The following table sets forth revenue by geography between the United States and all geographies outside of the United States for the three months ended March 31, 2023 and April 1, 2022: Three Months Ended March 31, April 1, Domestic integrators (a) $ 209,477 $ 225,406 Domestic other (b) 9,242 13,353 International (c) 33,321 38,675 Total $ 252,040 $ 277,434 (a) Domestic integrators is defined as professional “do-it-for-me” integrator customers who transact with Snap One through a traditional integrator channel in the United States, excluding the impact of revenue earned by our Access Networks enterprise grade network solution business, a recently acquired business. (b) Domestic other is defined as Access Networks revenue and revenue generated through managed transactions with non-integrator customers, such as national accounts. (c) International consists of all integrators and distributors who transact with Snap One outside of the United States. The following table sets forth revenue by product type between proprietary products and third-party products for the three months ended March 31, 2023 and April 1, 2022: Three Months Ended March 31, April 1, Proprietary products (a) $ 171,375 $ 187,797 Third-party products (b) 80,665 89,637 Total $ 252,040 $ 277,434 (a) Proprietary products consist of products and services internally developed by Snap One and sold under one of Snap One’s proprietary brands. (b) Third-party products consist of products that Snap One distributes but to which Snap One does not own the intellectual property. Additionally, the Company’s revenue includes amounts recognized over time and at a point in time, and are as follows for the three months ended March 31, 2023 and April 1, 2022: Three Months Ended March 31, April 1, Products transferred at a point in time $ 243,312 $ 270,153 Services transferred over time 8,728 7,281 Total $ 252,040 $ 277,434 |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | Balance Sheet Components Accounts Receivable, net: As of March 31, 2023 and December 30, 2022, the Company’s accounts receivable, net consisted of the following: March 31, December 30, Accounts receivable $ 52,673 $ 50,445 Allowance for credit losses (2,258) (2,271) Accounts receivable, net $ 50,415 $ 48,174 Inventories: As of March 31, 2023 and December 30, 2022, the Company’s inventory consisted of the following: March 31, December 30, Finished goods $ 307,584 $ 308,768 Raw materials 19,025 19,457 Work in process 430 500 Reserve for obsolete and slow-moving inventory (13,484) (14,137) Total inventories $ 313,555 $ 314,588 Accrued Liabilities: Accrued liabilities as of March 31, 2023 and December 30, 2022, consisted of the following: March 31, December 30, Deferred revenue $ 22,679 $ 22,611 Payroll, vacation, and bonus accruals 13,186 11,068 Warranty reserve 10,312 10,682 Sales return allowance 5,494 5,148 Customer rebate program 4,861 5,863 Incurred but not reported self-insurance 1,880 1,860 Taxes 945 944 Interest payable 658 1,578 Other accrued liabilities 4,240 4,851 Total accrued liabilities $ 64,255 $ 64,605 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | Goodwill and Other Intangible Assets, Net Goodwill as of March 31, 2023 and December 30, 2022, was $592,195 and $592,186, respectively. Changes in goodwill reflect the impact of foreign currency translation. As of March 31, 2023 and December 30, 2022, other intangible assets, net, consisted of the following: March 31, 2023 Estimated Gross Carrying Amount (a) Accumulated Net Carrying Customer relationships 5 – 25 years $ 520,838 $ (129,976) $ 390,862 Technology 4 – 15 years 98,478 (58,557) 39,921 Trade names – definite 2 – 10 years 59,964 (25,315) 34,649 Trade names – indefinite indefinite 76,564 — 76,564 Total intangible assets $ 755,844 $ (213,848) $ 541,996 December 30, 2022 Estimated Gross Carrying Amount (a) Accumulated Net Carrying Customer relationships 5 – 25 years $ 520,825 $ (123,393) $ 397,432 Technology 4 – 15 years 98,478 (54,391) 44,087 Trade names – definite 2 – 10 years 59,963 (23,627) 36,336 Trade names – indefinite indefinite 76,564 — 76,564 Total intangible assets $ 755,830 $ (201,411) $ 554,419 (a) Amounts also include any net changes in intangible asset balances for the periods presented that resulted from foreign currency translation. Total amortization expense for intangible assets for the three months ended March 31, 2023 and April 1, 2022, was $12,437 and $12,661, respectively. The weighted-average useful life remaining for amortizing definite lived intangible assets was approximately 14.3 years as of March 31, 2023. As of March 31, 2023, the estimated amortization expense for intangible assets for the next five fiscal years and thereafter are as follows: Remainder of 2023 $ 37,148 2024 43,204 2025 35,588 2026 35,233 2027 34,417 2028 and thereafter 279,842 Total $ 465,432 |
Debt Agreements
Debt Agreements | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt Agreements | Debt Agreements On December 8, 2021, the Company entered into and became a party to a credit agreement by and between the Company, the various financial institutions and Morgan Stanley Senior Funding, Inc., as administrative agent (the “Administrative Agent”) (as amended from time to time, the “Credit Agreement”) consisting of $465,000 in aggregate principal amount of senior secured term loans maturing in seven years (the “Term Loan”) and a $100,000 senior secured revolving credit facility (which includes borrowing capacity available for letters of credit) maturing in five years (the “Revolving Credit Facility”). Additionally, on October 2, 2022, the Company became a party to an incremental agreement (the “Incremental Agreement”) with the lenders party thereto and the Administrative Agent to provide incremental term loans (the “Incremental Term Loan”) in an aggregate principal amount of $55,000. The Incremental Term Loan matures in three years. The Incremental Agreement amended the Credit Agreement (the Credit Agreement, as amended by the Incremental Agreement, the “Amended Credit Agreement”). On October 26, 2022, the Company entered into an interest rate cap agreement, on the London Inter-bank offered rate (“LIBOR”) component of interest, with Bank of America as the counterparty. The interest rate cap became effective December 31, 2022. The Company will pay a premium of $6,573 at the maturity date of December 31, 2025. The notional amount of the interest rate cap is $350,000 and has a strike rate of 5.00%, which effectively caps the LIBOR rate on $350,000 of the floating rate debt at 5.00%. Borrowings under the Term Loan will bear interest at a rate per annum equal to, at the Company’s option, either (1) an applicable margin plus a base rate determined by reference to the highest of (a) 0.50% per annum plus the federal funds effective rate, (b) the prime rate and (c) the eurocurrency rate determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month adjusted for certain additional costs, plus 1.00%; provided that such rate is not lower than a floor of 1.50% or (2) an applicable margin plus a eurocurrency rate determined by reference to the cost of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs; provided that such rate is not lower than a floor of 0.50%. Borrowings under the Incremental Term Loan will bear interest at a rate per annum equal to, at the Company’s option, either (1) an applicable margin plus a base rate determined by reference to the highest of (a) 0.50% per annum plus the federal funds effective rate, (b) the prime rate and (c) the forward-looking term rate based on the Secured Overnight Financing Rate (“SOFR”) for an interest period of one month plus 1.00%; provided that such rate is not lower than a floor of 1.50% or (2) an applicable margin plus a forward-looking rate based on SOFR for the interest period relevant to such borrowing provided that such rate is not lower than a floor of 0.50%. The interest rate for the Term Loan was 9.13% as of March 31, 2023 and 7.38% as of December 30, 2022. The interest rate for the Incremental Term Loan was 11.48% as of March 31, 2023 and 10.42% as of December 30, 2022. Borrowings under the Revolving Credit Facility will bear interest at a rate per annum equal to an applicable margin based upon a leverage-based pricing grid, plus, at the Company’s option, either (1) a base rate determined by reference to the highest of (a) 0.50% per annum plus the federal funds effective rate, (b) the prime rate and (c) the eurocurrency rate determined by reference to the cost of funds adjusted for certain additional costs, plus 1.00%; provided such rate is not lower than a floor of 1.00% or (2) a eurocurrency rate determined by reference to the applicable cost of funds for such borrowing adjusted for certain additional costs; provided such rate is not lower than a floor of zero. The interest rate for the Revolving Credit Facility was 9.39% as of March 31, 2023 and 9.22% as of December 30, 2022. Subsequent to the period end, the Company, on April 17, 2023, amended the Credit Agreement to modify the eurocurrency rate determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month adjusted for certain additional costs to utilize the forward-looking term rate based on the Secured Overnight Financing Rate (“SOFR”) in place of LIBOR going forward. See Note 19. Subsequent Events for further discussion. The Term Loan amortizes in fixed equal quarterly installments in an amount equal to 1.00% per annum of the total aggregate principal amount thereof immediately after borrowing, with the balance due at maturity. The Company may voluntarily prepay loans or reduce commitments under the Credit Agreement, in whole or in part, subject to minimum amounts, with prior notice but without premium or penalty (subject to customary exceptions). The Company’s outstanding debt as of March 31, 2023 and December 30, 2022 was as follows: Instrument Maturity Date March 31, 2023 December 30, 2022 Credit Agreement Term Loan December 8, 2028 $ 460,350 $ 461,513 Incremental Term Loan October 2, 2025 $ 54,863 $ 55,000 Revolving Credit Facility December 8, 2026 $ 50,000 $ 12,000 Outstanding letters of Credit December 8, 2026 $ 9,760 $ 5,060 The amount available under the Revolving Credit Facility was $40,240 and $82,940 as of March 31, 2023 and December 30, 2022, respectively. As of March 31, 2023, the future scheduled maturities of the above notes payable are as follows: Remainder of 2023 $ 3,900 2024 3,900 2025 58,688 2026 54,650 2027 5,813 Thereafter 438,262 Total future maturities of debt 565,213 Unamortized debt issuance costs (15,083) Total indebtedness 550,130 Less: Current maturities of long-term debt 5,200 Long-term debt and revolving credit facility $ 544,930 Unamortized costs related to the issuance of the Term Loan were $13,959 and $14,655 as of March 31, 2023 and December 30, 2022, respectively, and were presented as a direct deduction from the carrying amount of long-term debt. Unamortized costs related to the issuance of the Revolving Credit Facility were $1,124 and $1,200 as of March 31, 2023 and December 30, 2022, respectively, and were presented as a direct deduction from the carrying amount of the revolving credit facility. The costs related to debt issuances are amortized to interest expense over the life of the related debt. As of March 31, 2023, the future amortization of debt issuance costs was as follows: Remainder of 2023 $ 2,395 2024 3,396 2025 3,374 2026 2,123 2027 1,918 Thereafter 1,877 Total $ 15,083 Debt Covenants and Default Provisions — There have been no changes to the debt covenants or default provisions related to the Company’s outstanding debt arrangements or other obligations during the current year. The Company was in compliance with all debt covenants as of March 31, 2023 and December 30, 2022. For additional information on the Company’s debt arrangements, debt covenants and default provisions, see Note 8 of the Notes to the Consolidated Financial Statements for the year ended December 30, 2022, in the Annual Report. The Company may also be required to make additional payments under the financing agreement equal to a percentage of the Company’s annual excess cash flows or net proceeds from any non-ordinary course asset sales or certain debt issuances, if any. The lender has the option to decline the prepayment. As of December 30, 2022, the Company did not incur a required additional payment. |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement Fair Value of Financial Instruments — The fair values and related carrying values of financial instruments that are not required to be remeasured at fair value on the condensed consolidated statements of operations were as follows: As of March 31, 2023 As of December 30, 2022 Carrying Amount Fair Value Carrying Amount Fair Value Assets Notes receivable, net $ 21 $ 21 $ 59 $ 59 Liabilities Term Loan $ 460,350 $ 418,919 $ 461,513 $ 421,130 Incremental Term Loan $ 54,863 $ 51,571 $ 55,000 $ 51,700 The fair values of notes receivable are estimated using a discounted cash flow analysis using interest rates currently offered for loans with similar credit quality which represent Level 2 inputs, and are included in other assets and other current assets on the balance sheet. The fair value of long-term debt was established using current market rates for similar instruments traded in secondary markets representing Level 2 inputs. The fair value of the Revolving Credit Facility approximates carrying value as the related interest rates approximate the Company’s incremental borrowing rate for similar obligations. Additionally, cash and cash equivalents, accounts receivable, net, prepaid expenses, accounts payable, and accrued liabilities are classified as Level 1 and the carrying value of these assets and liabilities approximates the fair value due to the short-term nature of these financial instruments. Notes Receivable — During the three months ended September 30, 2022, the Company acquired Clare, which had an outstanding unsecured loan with the Company. The Company recorded a of $5,872 loss on the settlement of the unsecured loan from Clare during the three months ended July 1, 2022. At the acquisition date, the Company settled the notes receivable for $1,400 as part of the transaction. See Note 3 for more information regarding the Clare acquisition. Assets and Liabilities that are Measured at Fair Value on a Recurring Basis — On October 26, 2022, the Company entered into an interest rate cap agreement on the LIBOR component of interest. The interest rate cap became effective December 31, 2022. The interest rate cap agreement does not qualify for hedge accounting treatment and, accordingly, the Company records the fair value of the agreements as an asset or liability and the change in fair value as income or expense during the period in which the change occurs. The fair value of the interest rate cap is determined using widely accepted valuation techniques based on its maturity and observable market-based inputs, including interest rate curves. This measurement is considered a Level 2 measurement. The interest rate cap had a fair value of $3,381 and $2,563 as of March 31, 2023 and December 30, 2022, respectively, and is recorded in other liabilities on the Company’s consolidated balance sheet. The fair value of the contingent consideration liability related to the Access Networks acquisition is based on unobservable inputs, including management estimates and assumptions about future revenues, and is, therefore, classified as Level 3. During the year ended December 30, 2022, the agreement was modified to change the covered revenue period, reducing expected payouts based on future revenues. As a result of the modification, the fair value of the contingent consideration was reduced to $250 and was paid during the three months ending March 31, 2023. The Company recorded a liability of $250 as of December 30, 2022 in accrued liabilities. The Company utilizes a Monte Carlo simulation in an option pricing framework, where a range of possible scenarios are simulated, in order to determine the fair value of the contingent value rights (“CVRs”). Any future increase in the fair value of the CVR obligations, based on an increased likelihood that the underlying milestones will be achieved, and the associated payment or payments will, therefore, become due and payable, will result in a charge to selling, general and administrative expenses in the period in which the increase is determined. Similarly, any future decrease in the fair value of the CVR obligations will result in a reduction in selling, general and administrative expenses. CVR liabilities are categorized as other liabilities in the accompanying condensed consolidated balance sheets and are classified as Level 3. Fair value at March 31, 2023 Valuation Technique Unobservable Input Volatility Contingent Value Rights $2,300 Monte Carlo Volatility 55% Changes in the CVRs for the three months ended March 31, 2023 and April 1, 2022 were as follows: March 31, April 1, CVR fair value – beginning of period $ 1,700 $ 8,900 Fair value adjustments 600 (2,800) CVR fair value – end of period $ 2,300 $ 6,100 There were no transfers into or out of Level 3 during the three months ended March 31, 2023 or April 1, 2022. |
Warranties
Warranties | 3 Months Ended |
Mar. 31, 2023 | |
Guarantees and Product Warranties [Abstract] | |
Warranties | Warranties Changes in the Company’s accrued warranty liability for the three months ended March 31, 2023 and April 1, 2022 were as follows: March 31, April 1, Accrued warranty – beginning of period $ 15,039 $ 18,772 Warranty claims (2,945) (2,323) Warranty provisions 1,944 175 Accrued warranty – end of period $ 14,038 $ 16,624 As of March 31, 2023, the Company has recorded accrued warranty liabilities of $10,312 in accrued liabilities and $3,726 in other liabilities in the accompanying condensed consolidated balance sheet. As of December 30, 2022, the Company has recorded accrued warranty liabilities of $10,682 in accrued liabilities and $4,357 in other liabi lities. |
Retirement Plan
Retirement Plan | 3 Months Ended |
Mar. 31, 2023 | |
Retirement Benefits [Abstract] | |
Retirement Plan | Retirement PlanThe Company has a 401(k) plan |
Equity Agreements and Incentive
Equity Agreements and Incentive Equity Plans | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Equity Agreements and Incentive Equity Plans | Equity Agreements and Incentive Equity Plans Former Parent Incentive Plan — In October 2017, the Former Parent Entity approved the Class B Unit Incentive Plan (the “2017 Plan”) pursuant to the Company’s partnership agreement. Class B-1 Incentive Units (“B-1 Units”) issued under the 2017 Plan vest in installments over a five-year period, subject to the grantee’s continued employment or service. Class B-2 Incentive Units (“B-2 Units” and collectively with the B-1 Units, “Incentive Units”) issued under the 2017 Plan contained both service conditions consistent with the B-1 Units and market-based vesting conditions that required the achievement of a specified return hurdle to the controlling shareholders in order to vest. 2021 Incentive Plan — On July 16, 2021, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”) in order to provide a means through which to attract, retain, and motivate key personnel. Awards available for grant under the 2021 Plan include non-qualified and incentive stock options, restricted shares of our common stock, and other equity-based awards tied to the value of our common stock and cash-based awards. During the quarter ended March 31, 2023, upon the settlement date of certain outstanding equity awards, shares were withheld to cover the required withholding tax, which was based on the value of a share on the settlement date as determined by the closing price of our common stock on the trading day of the applicable settlement date. The remaining shares were delivered to the recipient as shares of our common stock. The amount remitted to the tax authorities for the employees’ tax obligation was reflected as a financing activity on our consolidated statements of cash flows. These shares withheld by us as a result of the net settlement of equity awards issued under the 2021 Plan were not considered issued and outstanding. These shares were returned to the 2021 Plan reserve and are available for future issuance thereunder. We may also require employees to sell a portion of the shares that they received upon the vesting of equity awards in order to cover any required withholding taxes. Equity Award Conversion — During the year ended December 31, 2021, and in connection with the Company’s initial public offering (“ IPO”), all outstanding unvested Incentive Units were replaced with newly issued shares of our restricted common stock. Vested Incentive Units were exchanged into shares of our common stock using the same formula as unvested Incentive Units (together, the “Equity Award Conversion”). The restricted shares of common stock that the holders received in exchange for their unvested B-1 Units are subject to the same vesting terms that applied to the B-1 Units prior to the Equity Award Conversion. The restricted stock awards issued to replace B-2 Units vest based upon achievement of one or more hurdles, which are substantially the same as the previous market-condition vesting criteria of the B-2 Units. Although the restricted stock awards that replace the B-2 Units do not contain an explicit service condition, the vesting is subject to continued employment, resulting in a derived service period. For additional information on the Equity Award Conversion, see Note 13 of the Notes to the Consolidated Financial Statements for the year ended December 30, 2022, in the Annual Report. Restricted Stock Awards In connection with the IPO, the Company issued restricted common stock to holders of unvested B-1 Units and B-2 Units. The grant date fair value of restricted stock awards was determined to be $18.00 per share, based on the initial listing price of the Company’s common stock on the grant date. The summary of the Company’s restricted stock awards activity is as follows: Restricted Stock Awards B-1 Incentive Units B-2 Incentive Units Number of Weighted- Average Grant-Date Fair Value Number of Weighted- Average Grant-Date Fair Value Outstanding at December 30, 2022 223 $ 18.00 792 $ 18.00 Granted — — — — Vested 46 18.00 — — Forfeited 5 18.00 — — Outstanding at March 31, 2023 172 $ 18.00 792 $ 18.00 Stock Options In connection with the IPO, the Company granted options to holders of B-1 Units (“Time-based Options”) and options to holders of B-2 Units (“Market-based Options” and collectively with the Time-based Options, “Leverage Replacement Options”), as further discussed in Note 13 of the Notes to the Consolidated Financial Statements for the year ended December 30, 2022, in the Annual Report. The summary of the Company’s option activity is as follows: Time-based Options Market-based Options Number of Weighted- Average Grant-Date Fair Value Aggregate Intrinsic Value (a) Number of Weighted- Average Grant-Date Fair Value Aggregate Intrinsic Value (a) Outstanding at December 30, 2022 4,233 $ 6.47 $ — 1,125 $ 5.66 $ — Granted — $ — — — $ — — Exercised — $ — — — $ — — Forfeited 132 $ 6.29 — — $ — — Outstanding at March 31, 2023 4,101 $ 6.47 $ — 1,125 $ 5.66 $ — Options exercisable at March 31, 2023 3,199 $ 6.24 $ — — $ — $ — (a) The intrinsic value represents the amount by which the fair value of the Company’s stock exceeds the option exercise price as of December 30, 2022 and March 31, 2023. Restricted Stock Units — The Company grants restricted stock units (“RSUs”) with time-based vesting requirements under the 2021 Plan. These RSUs typically have an initial annual cliff vest and then vest quarterly over the remaining service period, which is generally one The summary of the Company’s RSU activity is as follows: Restricted Stock Units Number of Weighted-Average Grant-Date Fair Value Outstanding at December 30, 2022 1,360 $ 17.05 Granted 1,809 11.31 Vested 301 17.33 Forfeited 19 18.52 Outstanding at March 31, 2023 2,849 $ 13.37 As of March 31, 2023, there were 99 vested and unissued restricted stock units. Performance Stock Units — During the three months ended March 31, 2023 and April 1, 2022, the Company granted performance-based restricted stock units (“PSUs”) to certain employees under the 2021 Plan. The fair value of PSUs granted is based on the Company’s closing stock price on the date of grant. Total units earned for grants may vary between 0% and 200% of the units granted based on the attainment of company-specific targets during the performance period and upon continued service. Compensation expense for PSUs is recognized on a graded-vesting basis if it is probable that the performance conditions will be achieved. Adjustments to compensation expense are made each period based on changes in our estimate of the number of PSUs that are probable of vesting. PSUs will vest with continued service and upon achievement of the relevant performance targets. The awards issued during the three months ended March 31, 2023 contain three separate tranches, each for a separate one-year performance period and each with a performance target to be established concurrently with the annual budget process. Accordingly, each tranche is accounted for as a separate grant. The Company-specific targets include: (i) adjusted EBITDA, (ii) adjusted EBITDA margin, and (iii) the results of an engagement survey administered annually in the fourth quarter to employees below the level of director. The awards issued during the three months ended April 1, 2022, vest in annual tranches over a three-year service period, subject to a one-year performance target. Total units earned for grants are based on the attainment of net sales and Company-specific adjusted EBITDA targets during the performance period (generally the fiscal year of the date of the grant) and upon continued service. For the year-ended December 30, 2022, the Company determined that, based on actual performance with respect to Adjusted EBITDA and Net Sales combined, the awards were earned at 51%. The summary of the Company’s PSU activity is as follows: Performance Stock Units Number of Weighted-Average Grant-Date Fair Value Outstanding at December 30, 2022 254 $ 17.96 Granted 322 11.31 Vested 132 15.65 Forfeited — — Outstanding at March 31, 2023 444 $ 13.82 As of March 31, 2023, there were 71 vested and unissued performance share units. Total equity-based compensation expense — Equity-based compensation expense is included within selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. For all equity-based compensation awards, the Company recognizes forfeitures as they occur. Compensation expense for the three months ended March 31, 2023 and April 1, 2022, and unrecognized stock compensation expense and weighted average remaining expense period as of March 31, 2023 consisted of: Compensation Expense As of March 31, 2023 Three Months Ended March 31, 2023 Three Months Ended April 1, 2022 Unrecognized Compensation Expense Weighted-Average Remaining Contractual Term (Years) 2021 Plan Restricted stock awards $ 633 $ 1,145 $ 3,598 0.98 Time-based options 1,022 1,729 6,294 1.80 Market-based options 629 645 2,142 0.85 Restricted stock units 3,543 1,436 35,193 3.24 Performance stock units 1,650 565 4,469 1.01 Other equity-based compensation 100 79 728 1.81 Total $ 7,577 $ 5,599 $ 52,424 2.00 Employee Stock Purchase Plan — The Company’s board of directors adopted, and its shareholders approved, the Snap One Holdings Corp. 2021 Employee Stock Purchase Plan (the “ESPP”). The ESPP initially reserved 750 shares for issuance. The number of shares available for issuance under the ESPP is subject to adjustment for certain changes in our capitalization. In addition, the ESPP contains an evergreen provision such that each January 1 starting in 2022 and ending in 2031, the number of shares available for issuance shall be increased by that number of shares equal to the lesser of (i) a number of shares such that the aggregate amount of shares available following the increase is equal to 1% of the fully diluted shares outstanding on December 31 of the preceding year, or (ii) a lesser amount determined by our Compensation Committee. Pursuant to this provision we increased the number of shares in the ESPP by approximately 186 shares. Under the ESPP, shares of common stock may be purchased by eligible participants during defined purchase periods at 85% of the lesser of the closing price of the Company’s common stock on the first day or last day of each purchase period. The Company used a Black-Scholes option pricing model to value the common stock purchased as part of the Company’s ESPP. The fair value estimated by the option pricing model is affected by the price of the common stock as well as subjective variables that include assumed interest rates, our expected dividend yield, and the expected share volatility over the term of the award. Offering periods are generally six months long and begin on May 23 and November 23 of each year. Eligible participants contributed $985 and $287 as of March 31, 2023 and December 30, 2022, respectively, which is included in accrued liabilities in the accompanying condensed consolidated balance sheet. The Company recorded compensation expense of $186, which is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2023. Unrecognized compensation expense as of March 31, 2023 associated with the remaining ESPP purchase period through May 22, 2023 was $109. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective income tax rate for the Company was a benefit of 17.1% for the three months ended March 31, 2023, as compared to a benefit of 13.8% for the three months ended April 1, 2022. The change in the effective tax rate for the three months ended March 31, 2023, and the difference from the U.S. federal statutory rate of 21%, was primarily the result of stock compensation, global intangible low tax income offset by foreign derived intangible income, foreign rate differential, and R&D credits offset by uncertain tax positions and valuation allowance. Income tax benefit was $3,000 during the three months ended March 31, 2023, compared to a benefit of $361 during the three months ended April 1, 2022. |
Tax Receivable Agreement
Tax Receivable Agreement | 3 Months Ended |
Mar. 31, 2023 | |
Tax Receivable Agreement [Abstract] | |
Tax Receivable Agreement | Tax Receivable AgreementOn July 29, 2021, the Company executed a Tax Receivable Agreement (“TRA”) with certain pre-IPO owners (“TRA Participants”). The TRA provides for payment by the Company to the TRA Participants of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that the Company utilizes in the future from net operating losses and certain other tax benefits that arose prior to the IPO. The Company recognizes this contingent liability in its condensed consolidated financial statements when incurrence of the liability becomes probable and amounts are reasonably estimable. Subsequent changes to the measurement of the TRA liability are recognized in the condensed consolidated statement of operations as a component of other expense (income), net. The Company will retain the benefit of the remaining 15% of these cash tax savings. As of March 31, 2023, the Company recognized a total liability of $101,406, of which $23,195 and $78,211 are recorded within the current and noncurrent tax receivable agreement liability financial statement line items, respectively. As of December 30, 2022, the Company recognized a total liability of $111,453, of which $10,191 and $101,262 was recorded within the current and noncurrent tax receivable agreement liability financial statement line items, respectively. For the three months ended March 31, 2023, the Company recognized a measurement adjustment of $144, which was recognized in other expense on the condensed consolidated statements of operations. During the three months ended March 31, 2023 the Company made its first payment to TRA participants of $10,468, which included interest of $277. With respect to certain pre-IPO owners that are not TRA Participants, the Company has recorded amounts held in escrow for these participants in prepaid expense of $890 and $1,169 as of March 31, 2023 and December 30, 2022, respectively. During the three months ended March 31, 2023 and April 1, 2022, the Company recorded $279, for each of the periods, respectively, in compensation expense within selling, general and administrative expenses in the accompanying condensed consolidated statement of operations. |
Commitment and Contingencies
Commitment and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings — During the normal course of business, the Company is occasionally involved with various claims and litigation. Reserves are established in connection with such matters when a loss is probable, and the amount of such loss can be reasonably estimated. As of March 31, 2023 and December 30, 2022, no significant reserves were recorded. The determination of probability and the estimation of the actual amount of any such loss are inherently unpredictable, and it is therefore possible that the eventual outcome of such claims and litigation could exceed the estimated reserves, if any. However, the Company does not expect the outcome of the matters currently pending will have a material adverse effect on the condensed consolidated financial statements. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company determines if an arrangement is a lease or contains a lease at inception. For all leases with a term longer than 12 months, operating leases are recorded under the noncurrent asset operating lease financial statement line item and the current and noncurrent operating lease liability financial statement line items on our condensed consolidated balance sheets. The Company has lease agreements with lease and non-lease components, which the Company has elected to account for as a single lease component for all asset classes. Lease expense is recognized on a straight-line basis over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Since most of the Company’s leases do not provide an implicit rate, the Company uses its own incremental borrowing rate (“IBR”) on a collateralized basis in determining the present value of lease payments. The Company utilizes a market-based approach to estimate the IBR. The Company’s lease arrangements primarily consist of operating leases for offices, warehouse space, and distribution centers. The leases have remaining lease terms of 1 year to 10 years, some of which include options to extend for up to an additional 5 years, and some of which include options to terminate prior to completion of the contractual lease term with or without penalties. The Company’s lease term only includes periods covered by options if those options are reasonably certain of being exercised (or not reasonably certain of being exercised as it relates to termination options). Variable lease payments that depend on an index or rate (such as the Consumer Price Index or a market interest rate) are included in the measurement of ROU assets and lease liabilities using the index or rate at the commencement date. Variable payments, other than those dependent upon an index or rate, are excluded from the measurement of the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. The variable lease cost primarily represents variable payments related to common area maintenance and utilities. The Company’s leases do not contain any material residual value guarantees. The components of the Company’s lease costs are: Three Months Ended March 31, 2023 April 1, 2022 Operating lease cost (a) $ 4,226 $ 3,539 Variable lease cost 1,371 1,056 Short-term lease cost 72 110 Total lease cost $ 5,669 $ 4,705 (a) Included in cost of sales, exclusive of depreciation and amortization, and selling, general and administrative expenses in the Company’s unaudited condensed consolidated statement of operations. Supplemental cash flow information and non-cash activity related to the Company’s operating leases are as follows: Three Months Ended March 31, 2023 April 1, 2022 Cash paid for amounts included in the measurement of lease liabilities $ 3,683 $ 3,405 Non-cash activity: Right-of-use assets obtained in exchange for lease obligations $ 985 $ 44,055 Weighted-average remaining lease term and discount rate for the Company’s operating leases are as follows: As of Weighted-average remaining lease term 6.71 years Weighted-average discount rate 7.40 % As of March 31, 2023, future lease payments under non-cancelable lease commitments for the next five fiscal years and thereafter were as follows: Remainder of 2023 $ 10,363 2024 14,004 2025 12,902 2026 10,808 2027 9,029 Thereafter 26,386 Total lease payments 83,492 Less: Imputed interest 19,999 Less: Lease incentive receivable 1,334 Present value of lease liabilities $ 62,159 During the three months ended March 31, 2023, the Company completed its move from its former leased location in Draper, UT to its new location in Lehi, UT. The lease has an operational commencement date of February 1, 2023 and an expiration date of September 30, 2033. As of March 31, 2023, the Company has entered into additional lease agreements for office space that have not yet commenced. Aggregate lease payments for these leases total $3,825 on an undiscounted basis. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Holders of voting common stock are entitled to one vote per share and to receive dividends. The Company had a noncontrolling interest prior to the fourth quarter of the year ended December 30, 2022. Changes in noncontrolling interests each period include net income attributable to noncontrolling interests and cash contributions by minority partners to the Company’s consolidated subsidiaries. There were no cash contributions by minority partners for the three months ended March 31, 2023 or April 1, 2022. Share Repurchase Program — On May 12, 2022, the Company announced that its board of directors authorized a $25,000 share repurchase program. Under the share repurchase program, Snap One may purchase shares of common stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions or other means, including through Rule 10b5-1 trading plans or through the use of other techniques such as accelerated share repurchases. The timing and number of shares repurchased will depend on a variety of factors, including stock price, trading volume, and general business and market conditions. The repurchase program expires at the end of 2023, does not obligate the Company to acquire a specified number of shares and may be modified, suspended or discontinued at any time at the board of directors’ discretion. Share repurchase activity consists of the following: Three Months Ended March 31, 2023 Number of shares repurchased 27 Total cost $ 238 Average per share cost including commissions $ 8.81 |
Loss Per Share
Loss Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per Share Basic loss per share represents net loss divided by the weighted-average shares outstanding. Diluted loss per share is the same as basic income or loss per share. The Company was in a loss position during the three months ended March 31, 2023 and April 1, 2022, respectively. The following table presents the calculations of basic and diluted loss per share for the three months ended March 31, 2023 and April 1, 2022: Three Months Ended March 31, April 1, Net loss attributable to Company $ (14,548) $ (2,236) Weighted-average shares outstanding - basic and diluted 75,291 74,464 Loss per share - basic and diluted $ (0.19) $ (0.03) The Company’s restricted stock awards, stock options, restricted stock units and performance stock units were excluded from the computation of diluted net loss per share because their effect would have been anti-dilutive. Awards with performance and market-based vesting conditions are excluded from the calculation of dilutive potential common shares until the conditions have been satisfied. The following potentially dilutive shares were excluded from the computation of diluted net income (loss) per share attributable to common stockholders: Three Months Ended March 31, April 1, Restricted stock awards 979 1,412 Time-based options 4,150 4,368 Market-based options 1,126 1,155 Restricted stock units 2,042 787 Performance stock units 321 186 Other equity-based compensation 69 56 Total 8,687 7,964 |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Parties | Related PartiesThe Company’s controlling shareholder, Hellman & Friedman, LLC (“H&F”), has an ownership interest in a human capital management, payroll, HR service and workforce management vendor used by the Company. For the three months ended March 31, 2023 and April 1, 2022, the Company incurred $56 and $113 of expenses, respectively, related to this vendor. These expenses are included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. Amounts owed by the Company in connection with the expenses described above were not material as of March 31, 2023 and April 1, 2022, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn April 17, 2023, the Company entered into an Amendment to the Credit Agreement the Administrative Agent (the “Amendment to the Credit Agreement”), further amending the Credit Agreement dated as of December 8, 2021 (as amended by Incremental Agreement No. 1 dated as of October 2, 2022) (the “Credit Agreement”). The Amendment to the Credit Agreement replaces LIBOR for SOFR as the interest rate benchmark for certain loans as provided thereunder along with other conforming changes. Other than the foregoing, the parties to the Credit Agreement continue to have the same obligations set forth in the Credit Agreement prior to the effectiveness of the Amendment to the Credit Agreement. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation — The accompanying condensed consolidated financial statements are unaudited and have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial statements. The condensed consolidated financial statements were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods presented. The condensed consolidated financial statements include the accounts of the Company and all subsidiaries required to be consolidated. All intercompany balances and transactions have been eliminated in the condensed consolidated financial statements. The condensed consolidated balance sheet as of December 30, 2022, has been derived from the audited consolidated financial statements of the Company. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the fiscal year ended December 30, 2022, appearing in the Company’s Annual Report on Form 10-K for the annual period ended December 30, 2022 filed with the Securities and Exchange Commission on March 15, 2023. There have been no changes to the Company’s critical accounting estimates and policies or application since the date of the Annual Report except as discussed below. |
Fiscal Period | The Company’s fiscal year is the 52- or 53-week period that ends on the last Friday of December. Fiscal year 2023 is a 52-week period, and fiscal year 2022 was a 52-week period. The three months ended March 31, 2023 and April 1, 2022 were 13-week periods. |
Use of Accounting Estimates | Use of Accounting Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes. Accordingly, the actual amounts could differ from those estimates. If actual amounts differ from estimates, revisions are included in the condensed consolidated statements of operations in the period the actual amounts become known. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements — In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Accounting Standards Codification 848, “ASC 848”) . ASC 848 provides practical expedients and exceptions for an entity to elect not to apply certain modification accounting requirements to contracts affected by reference rate reform if certain criteria are met. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848) . The objective of the new reference rate reform standard is to clarify the scope of Topic 848 and provide explicit guidance to help companies applying optional expedients and exceptions. The provisions of these updates were only initially available until December 31, 2022, however, in March of 2021 the UK Financial Conduct Authority (“FCA”) announced that the cessation date has been moved to June 30, 2023. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 which extends the availability of the provisions of ASU 2021-01 until December 31, 2024. The Company’s exposure related to the expected cessation of the London InterBank Offered Rate (“LIBOR”) is limited to (i) the interest expense and certain fees it incurs on balances outstanding under its credit facilities, which the Company amended April 17, 2023 to replace LIBOR with the Secured Overnight Financing Rate (“SOFR”) (see Note 19. Subsequent Events for further discussion), (ii) certain interest rates that may become applicable pursuant to our Tax Receivable Agreement (“TRA”) which may be amended by the Company and the TRA Party Representative if such interest rates become applicable and LIBOR is no longer available and (iii) the Company’s interest rate cap agreement may be subject to amendment to align with the Company’s credit agreement. The Company does not expect that there will be a material impact to its financial statements as a result of adopting these ASUs. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 606): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires that an entity recognize and measure contract assets and liabilities from contracts with customers in a business combination in accordance with ASC 606 as if it had originated the contracts. The amendment in this update is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The guidance should be applied prospectively to business combinations occurring on or after the effective date of the amendment in this update. The Company adopted the standard as of the beginning of fiscal year 2023 and the adoption did not have a material impact on the condensed consolidated financial statements. However, the ultimate impact is dependent upon the size and frequency of future acquisitions. In September 2022, the FASB issued ASU 2022-04, Liabilities- Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Preliminary Purchase Price | The final allocation of the purchase price for Clare and Staub is as follows: Clare Staub Total purchase consideration $ 6,300 $ 26,395 Cash and cash equivalents $ — $ 756 Accounts receivable — 1,801 Inventory — 5,472 Prepaid expenses 263 1,616 Property and equipment, net 26 451 Operating lease right-of-use assets 160 2,309 Identifiable intangible assets 4,300 14,209 Total identifiable assets acquired 4,749 26,614 Accounts payable 568 1,570 Accrued liabilities 284 2,206 Current operating lease liability 43 343 Deferred income tax liabilities — 3,585 Operating lease liability, net of current portion 117 1,953 Other liabilities 183 — Total liabilities assumed 1,195 9,657 Net identifiable assets acquired 3,554 16,957 Goodwill 2,746 9,438 Net assets acquired $ 6,300 $ 26,395 |
Acquired Intangible Assets | The Company recorded intangible assets related to the acquisitions based on estimated fair value, which consisted of the following: Clare Staub Useful Lives Acquired Value Useful Lives Acquired Value Customer relationships — $ — 10 $ 12,684 Technology 4 3,400 — — Trade name 6 900 6 1,525 Total intangible assets $ 4,300 $ 14,209 |
Revenue and Geographic Inform_2
Revenue and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Changes in Deferred Revenue | The following table represents the changes in deferred revenue for the three months ended March 31, 2023 and April 1, 2022: Three Months Ended March 31, April 1, Deferred revenue – beginning of period $ 35,051 $ 33,385 Amounts billed, but not recognized 8,548 8,531 Recognition of revenue (8,728) (7,281) Deferred revenue – end of period $ 34,871 $ 34,635 |
Disaggregation of Revenue | The following table sets forth revenue by geography between the United States and all geographies outside of the United States for the three months ended March 31, 2023 and April 1, 2022: Three Months Ended March 31, April 1, Domestic integrators (a) $ 209,477 $ 225,406 Domestic other (b) 9,242 13,353 International (c) 33,321 38,675 Total $ 252,040 $ 277,434 (a) Domestic integrators is defined as professional “do-it-for-me” integrator customers who transact with Snap One through a traditional integrator channel in the United States, excluding the impact of revenue earned by our Access Networks enterprise grade network solution business, a recently acquired business. (b) Domestic other is defined as Access Networks revenue and revenue generated through managed transactions with non-integrator customers, such as national accounts. (c) International consists of all integrators and distributors who transact with Snap One outside of the United States. The following table sets forth revenue by product type between proprietary products and third-party products for the three months ended March 31, 2023 and April 1, 2022: Three Months Ended March 31, April 1, Proprietary products (a) $ 171,375 $ 187,797 Third-party products (b) 80,665 89,637 Total $ 252,040 $ 277,434 (a) Proprietary products consist of products and services internally developed by Snap One and sold under one of Snap One’s proprietary brands. (b) Third-party products consist of products that Snap One distributes but to which Snap One does not own the intellectual property. Additionally, the Company’s revenue includes amounts recognized over time and at a point in time, and are as follows for the three months ended March 31, 2023 and April 1, 2022: Three Months Ended March 31, April 1, Products transferred at a point in time $ 243,312 $ 270,153 Services transferred over time 8,728 7,281 Total $ 252,040 $ 277,434 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accounts Receivable | As of March 31, 2023 and December 30, 2022, the Company’s accounts receivable, net consisted of the following: March 31, December 30, Accounts receivable $ 52,673 $ 50,445 Allowance for credit losses (2,258) (2,271) Accounts receivable, net $ 50,415 $ 48,174 |
Schedule of Inventory | As of March 31, 2023 and December 30, 2022, the Company’s inventory consisted of the following: March 31, December 30, Finished goods $ 307,584 $ 308,768 Raw materials 19,025 19,457 Work in process 430 500 Reserve for obsolete and slow-moving inventory (13,484) (14,137) Total inventories $ 313,555 $ 314,588 |
Schedule of Accrued Liabilities | Accrued liabilities as of March 31, 2023 and December 30, 2022, consisted of the following: March 31, December 30, Deferred revenue $ 22,679 $ 22,611 Payroll, vacation, and bonus accruals 13,186 11,068 Warranty reserve 10,312 10,682 Sales return allowance 5,494 5,148 Customer rebate program 4,861 5,863 Incurred but not reported self-insurance 1,880 1,860 Taxes 945 944 Interest payable 658 1,578 Other accrued liabilities 4,240 4,851 Total accrued liabilities $ 64,255 $ 64,605 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | As of March 31, 2023 and December 30, 2022, other intangible assets, net, consisted of the following: March 31, 2023 Estimated Gross Carrying Amount (a) Accumulated Net Carrying Customer relationships 5 – 25 years $ 520,838 $ (129,976) $ 390,862 Technology 4 – 15 years 98,478 (58,557) 39,921 Trade names – definite 2 – 10 years 59,964 (25,315) 34,649 Trade names – indefinite indefinite 76,564 — 76,564 Total intangible assets $ 755,844 $ (213,848) $ 541,996 December 30, 2022 Estimated Gross Carrying Amount (a) Accumulated Net Carrying Customer relationships 5 – 25 years $ 520,825 $ (123,393) $ 397,432 Technology 4 – 15 years 98,478 (54,391) 44,087 Trade names – definite 2 – 10 years 59,963 (23,627) 36,336 Trade names – indefinite indefinite 76,564 — 76,564 Total intangible assets $ 755,830 $ (201,411) $ 554,419 (a) Amounts also include any net changes in intangible asset balances for the periods presented that resulted from foreign currency translation. |
Schedule of Indefinite-Lived Intangible Assets | As of March 31, 2023 and December 30, 2022, other intangible assets, net, consisted of the following: March 31, 2023 Estimated Gross Carrying Amount (a) Accumulated Net Carrying Customer relationships 5 – 25 years $ 520,838 $ (129,976) $ 390,862 Technology 4 – 15 years 98,478 (58,557) 39,921 Trade names – definite 2 – 10 years 59,964 (25,315) 34,649 Trade names – indefinite indefinite 76,564 — 76,564 Total intangible assets $ 755,844 $ (213,848) $ 541,996 December 30, 2022 Estimated Gross Carrying Amount (a) Accumulated Net Carrying Customer relationships 5 – 25 years $ 520,825 $ (123,393) $ 397,432 Technology 4 – 15 years 98,478 (54,391) 44,087 Trade names – definite 2 – 10 years 59,963 (23,627) 36,336 Trade names – indefinite indefinite 76,564 — 76,564 Total intangible assets $ 755,830 $ (201,411) $ 554,419 (a) Amounts also include any net changes in intangible asset balances for the periods presented that resulted from foreign currency translation. |
Schedule of Finite-Lived Intangible Assets, Estimated Amortization Expense | As of March 31, 2023, the estimated amortization expense for intangible assets for the next five fiscal years and thereafter are as follows: Remainder of 2023 $ 37,148 2024 43,204 2025 35,588 2026 35,233 2027 34,417 2028 and thereafter 279,842 Total $ 465,432 |
Debt Agreements (Tables)
Debt Agreements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s outstanding debt as of March 31, 2023 and December 30, 2022 was as follows: Instrument Maturity Date March 31, 2023 December 30, 2022 Credit Agreement Term Loan December 8, 2028 $ 460,350 $ 461,513 Incremental Term Loan October 2, 2025 $ 54,863 $ 55,000 Revolving Credit Facility December 8, 2026 $ 50,000 $ 12,000 Outstanding letters of Credit December 8, 2026 $ 9,760 $ 5,060 |
Schedule of Maturities of Long-term Debt | As of March 31, 2023, the future scheduled maturities of the above notes payable are as follows: Remainder of 2023 $ 3,900 2024 3,900 2025 58,688 2026 54,650 2027 5,813 Thereafter 438,262 Total future maturities of debt 565,213 Unamortized debt issuance costs (15,083) Total indebtedness 550,130 Less: Current maturities of long-term debt 5,200 Long-term debt and revolving credit facility $ 544,930 |
Schedule of Future Amortization of Debt Issuance Cost | As of March 31, 2023, the future amortization of debt issuance costs was as follows: Remainder of 2023 $ 2,395 2024 3,396 2025 3,374 2026 2,123 2027 1,918 Thereafter 1,877 Total $ 15,083 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | The fair values and related carrying values of financial instruments that are not required to be remeasured at fair value on the condensed consolidated statements of operations were as follows: As of March 31, 2023 As of December 30, 2022 Carrying Amount Fair Value Carrying Amount Fair Value Assets Notes receivable, net $ 21 $ 21 $ 59 $ 59 Liabilities Term Loan $ 460,350 $ 418,919 $ 461,513 $ 421,130 Incremental Term Loan $ 54,863 $ 51,571 $ 55,000 $ 51,700 |
Level 3 Measurement Valuation | Fair value at March 31, 2023 Valuation Technique Unobservable Input Volatility Contingent Value Rights $2,300 Monte Carlo Volatility 55% |
CRV Reconciliation | Changes in the CVRs for the three months ended March 31, 2023 and April 1, 2022 were as follows: March 31, April 1, CVR fair value – beginning of period $ 1,700 $ 8,900 Fair value adjustments 600 (2,800) CVR fair value – end of period $ 2,300 $ 6,100 |
Warranties (Tables)
Warranties (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Guarantees and Product Warranties [Abstract] | |
Schedule of Product Warranty Liability | Changes in the Company’s accrued warranty liability for the three months ended March 31, 2023 and April 1, 2022 were as follows: March 31, April 1, Accrued warranty – beginning of period $ 15,039 $ 18,772 Warranty claims (2,945) (2,323) Warranty provisions 1,944 175 Accrued warranty – end of period $ 14,038 $ 16,624 |
Equity Agreements and Incenti_2
Equity Agreements and Incentive Equity Plans (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Restricted Stock Awards | The summary of the Company’s restricted stock awards activity is as follows: Restricted Stock Awards B-1 Incentive Units B-2 Incentive Units Number of Weighted- Average Grant-Date Fair Value Number of Weighted- Average Grant-Date Fair Value Outstanding at December 30, 2022 223 $ 18.00 792 $ 18.00 Granted — — — — Vested 46 18.00 — — Forfeited 5 18.00 — — Outstanding at March 31, 2023 172 $ 18.00 792 $ 18.00 |
Summary of Option Activity | The summary of the Company’s option activity is as follows: Time-based Options Market-based Options Number of Weighted- Average Grant-Date Fair Value Aggregate Intrinsic Value (a) Number of Weighted- Average Grant-Date Fair Value Aggregate Intrinsic Value (a) Outstanding at December 30, 2022 4,233 $ 6.47 $ — 1,125 $ 5.66 $ — Granted — $ — — — $ — — Exercised — $ — — — $ — — Forfeited 132 $ 6.29 — — $ — — Outstanding at March 31, 2023 4,101 $ 6.47 $ — 1,125 $ 5.66 $ — Options exercisable at March 31, 2023 3,199 $ 6.24 $ — — $ — $ — (a) The intrinsic value represents the amount by which the fair value of the Company’s stock exceeds the option exercise price as of December 30, 2022 and March 31, 2023. |
Summary of RSU Activity | The summary of the Company’s RSU activity is as follows: Restricted Stock Units Number of Weighted-Average Grant-Date Fair Value Outstanding at December 30, 2022 1,360 $ 17.05 Granted 1,809 11.31 Vested 301 17.33 Forfeited 19 18.52 Outstanding at March 31, 2023 2,849 $ 13.37 |
Summary of PSU Activity | The summary of the Company’s PSU activity is as follows: Performance Stock Units Number of Weighted-Average Grant-Date Fair Value Outstanding at December 30, 2022 254 $ 17.96 Granted 322 11.31 Vested 132 15.65 Forfeited — — Outstanding at March 31, 2023 444 $ 13.82 |
Summary of Stock Compensation Expense | Compensation expense for the three months ended March 31, 2023 and April 1, 2022, and unrecognized stock compensation expense and weighted average remaining expense period as of March 31, 2023 consisted of: Compensation Expense As of March 31, 2023 Three Months Ended March 31, 2023 Three Months Ended April 1, 2022 Unrecognized Compensation Expense Weighted-Average Remaining Contractual Term (Years) 2021 Plan Restricted stock awards $ 633 $ 1,145 $ 3,598 0.98 Time-based options 1,022 1,729 6,294 1.80 Market-based options 629 645 2,142 0.85 Restricted stock units 3,543 1,436 35,193 3.24 Performance stock units 1,650 565 4,469 1.01 Other equity-based compensation 100 79 728 1.81 Total $ 7,577 $ 5,599 $ 52,424 2.00 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of Lease Costs | The components of the Company’s lease costs are: Three Months Ended March 31, 2023 April 1, 2022 Operating lease cost (a) $ 4,226 $ 3,539 Variable lease cost 1,371 1,056 Short-term lease cost 72 110 Total lease cost $ 5,669 $ 4,705 (a) Included in cost of sales, exclusive of depreciation and amortization, and selling, general and administrative expenses in the Company’s unaudited condensed consolidated statement of operations. Supplemental cash flow information and non-cash activity related to the Company’s operating leases are as follows: Three Months Ended March 31, 2023 April 1, 2022 Cash paid for amounts included in the measurement of lease liabilities $ 3,683 $ 3,405 Non-cash activity: Right-of-use assets obtained in exchange for lease obligations $ 985 $ 44,055 Weighted-average remaining lease term and discount rate for the Company’s operating leases are as follows: As of Weighted-average remaining lease term 6.71 years Weighted-average discount rate 7.40 % |
Schedule of Future Minimum Lease Payments | As of March 31, 2023, future lease payments under non-cancelable lease commitments for the next five fiscal years and thereafter were as follows: Remainder of 2023 $ 10,363 2024 14,004 2025 12,902 2026 10,808 2027 9,029 Thereafter 26,386 Total lease payments 83,492 Less: Imputed interest 19,999 Less: Lease incentive receivable 1,334 Present value of lease liabilities $ 62,159 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Share Repurchase Activity | Share repurchase activity consists of the following: Three Months Ended March 31, 2023 Number of shares repurchased 27 Total cost $ 238 Average per share cost including commissions $ 8.81 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Loss Per Share | The following table presents the calculations of basic and diluted loss per share for the three months ended March 31, 2023 and April 1, 2022: Three Months Ended March 31, April 1, Net loss attributable to Company $ (14,548) $ (2,236) Weighted-average shares outstanding - basic and diluted 75,291 74,464 Loss per share - basic and diluted $ (0.19) $ (0.03) |
Schedule of Antidilutive Securities Excluded from Computation of Net Income (Loss) Per Share | The following potentially dilutive shares were excluded from the computation of diluted net income (loss) per share attributable to common stockholders: Three Months Ended March 31, April 1, Restricted stock awards 979 1,412 Time-based options 4,150 4,368 Market-based options 1,126 1,155 Restricted stock units 2,042 787 Performance stock units 321 186 Other equity-based compensation 69 56 Total 8,687 7,964 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2023 acquistion | Dec. 30, 2022 acquistion | Oct. 24, 2022 USD ($) | Aug. 08, 2022 USD ($) | Apr. 01, 2022 USD ($) | |
Business Acquisition [Line Items] | |||||
Number of businesses acquired | acquistion | 0 | 3 | |||
Remote Maintenance Systems LP | |||||
Business Acquisition [Line Items] | |||||
Equity interest issued or issuable, value | $ 1,100 | ||||
Staub and Clare | |||||
Business Acquisition [Line Items] | |||||
Number of businesses acquired | acquistion | 2 | ||||
Clare | |||||
Business Acquisition [Line Items] | |||||
Carryover basis in goodwill | $ 2,746 | ||||
Staub | |||||
Business Acquisition [Line Items] | |||||
Transaction related expenses | $ 328 |
Acquisitions - Preliminary Purc
Acquisitions - Preliminary Purchase Price (Details) - USD ($) $ in Thousands | Aug. 08, 2022 | Jan. 20, 2022 | Mar. 31, 2023 | Dec. 30, 2022 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 592,195 | $ 592,186 | ||
Clare | ||||
Business Acquisition [Line Items] | ||||
Total purchase consideration | $ 6,300 | |||
Cash and cash equivalents | 0 | |||
Accounts receivable | 0 | |||
Inventory | 0 | |||
Prepaid expenses | 263 | |||
Property and equipment, net | 26 | |||
Operating lease right-of-use assets | 160 | |||
Identifiable intangible assets | 4,300 | |||
Total identifiable assets acquired | 4,749 | |||
Accounts payable | 568 | |||
Accrued liabilities | 284 | |||
Current operating lease liability | 43 | |||
Deferred income tax liabilities | 0 | |||
Operating lease liability, net of current portion | 117 | |||
Other liabilities | 183 | |||
Total liabilities assumed | 1,195 | |||
Net identifiable assets acquired | 3,554 | |||
Goodwill | 2,746 | |||
Net assets acquired | $ 6,300 | |||
Staub | ||||
Business Acquisition [Line Items] | ||||
Total purchase consideration | $ 26,395 | |||
Cash and cash equivalents | 756 | |||
Accounts receivable | 1,801 | |||
Inventory | 5,472 | |||
Prepaid expenses | 1,616 | |||
Property and equipment, net | 451 | |||
Operating lease right-of-use assets | 2,309 | |||
Identifiable intangible assets | 14,209 | |||
Total identifiable assets acquired | 26,614 | |||
Accounts payable | 1,570 | |||
Accrued liabilities | 2,206 | |||
Current operating lease liability | 343 | |||
Deferred income tax liabilities | 3,585 | |||
Operating lease liability, net of current portion | 1,953 | |||
Other liabilities | 0 | |||
Total liabilities assumed | 9,657 | |||
Net identifiable assets acquired | 16,957 | |||
Goodwill | 9,438 | |||
Net assets acquired | $ 26,395 |
Acquisitions - Acquired Intangi
Acquisitions - Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Aug. 08, 2022 | Jan. 20, 2022 | Mar. 31, 2023 | |
Business Acquisition [Line Items] | |||
Useful Lives | 14 years 3 months 18 days | ||
Clare | |||
Business Acquisition [Line Items] | |||
Acquired Value | $ 4,300,000 | ||
Clare | Technology | |||
Business Acquisition [Line Items] | |||
Useful Lives | 4 years | ||
Acquired Value | $ 3,400,000 | ||
Clare | Trade names | |||
Business Acquisition [Line Items] | |||
Useful Lives | 6 years | ||
Acquired Value | $ 900,000 | ||
Staub | |||
Business Acquisition [Line Items] | |||
Acquired Value | $ 14,209 | ||
Staub | Customer relationships | |||
Business Acquisition [Line Items] | |||
Useful Lives | 10 years | ||
Acquired Value | $ 12,684 | ||
Staub | Trade names | |||
Business Acquisition [Line Items] | |||
Useful Lives | 6 years | ||
Acquired Value | $ 1,525 |
Revenue and Geographic Inform_3
Revenue and Geographic Information - Changes in Deferred Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Apr. 01, 2022 | |
Change In Contract With Customer Liability [Roll Forward] | ||
Deferred revenue – beginning of period | $ 35,051 | $ 33,385 |
Amounts billed, but not recognized | 8,548 | 8,531 |
Recognition of revenue | (8,728) | (7,281) |
Deferred revenue – end of period | $ 34,871 | $ 34,635 |
Revenue and Geographic Inform_4
Revenue and Geographic Information - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 30, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Deferred revenue | $ 22,679 | $ 22,611 |
Noncurrent deferred revenue | $ 12,192 | $ 12,440 |
Revenue and Geographic Inform_5
Revenue and Geographic Information - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Apr. 01, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 252,040 | $ 277,434 |
Products transferred at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 243,312 | 270,153 |
Services transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 8,728 | 7,281 |
Proprietary Products | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 171,375 | 187,797 |
Third Party Products | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 80,665 | 89,637 |
United States integrators | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 209,477 | 225,406 |
United States other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 9,242 | 13,353 |
International | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 33,321 | $ 38,675 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 30, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts receivable | $ 52,673 | $ 50,445 |
Allowance for credit losses | (2,258) | (2,271) |
Accounts receivable, net | $ 50,415 | $ 48,174 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 30, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods | $ 307,584 | $ 308,768 |
Raw materials | 19,025 | 19,457 |
Work in process | 430 | 500 |
Reserve for obsolete and slow-moving inventory | (13,484) | (14,137) |
Total inventories | $ 313,555 | $ 314,588 |
Balance Sheet Components - Sc_3
Balance Sheet Components - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 30, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deferred revenue | $ 22,679 | $ 22,611 |
Payroll, vacation, and bonus accruals | 13,186 | 11,068 |
Warranty reserve | 10,312 | 10,682 |
Sales return allowance | 5,494 | 5,148 |
Customer rebate program | 4,861 | 5,863 |
Incurred but not reported self-insurance | 1,880 | 1,860 |
Taxes | 945 | 944 |
Interest payable | 658 | 1,578 |
Other accrued liabilities | 4,240 | 4,851 |
Total accrued liabilities | $ 64,255 | $ 64,605 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, Net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Apr. 01, 2022 | Dec. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 592,195 | $ 592,186 | |
Amortization of intangible assets | $ 12,437 | $ 12,661 | |
Weighted average useful life | 14 years 3 months 18 days |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 30, 2022 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ (213,848) | $ (201,411) |
Total | 465,432 | |
Intangible assets, gross | 755,844 | 755,830 |
Other intangible assets, net | 541,996 | 554,419 |
Trade names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 76,564 | 76,564 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 520,838 | 520,825 |
Accumulated Amortization | (129,976) | (123,393) |
Total | $ 390,862 | $ 397,432 |
Customer relationships | Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 5 years | 5 years |
Customer relationships | Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 25 years | 25 years |
Technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 98,478 | $ 98,478 |
Accumulated Amortization | (58,557) | (54,391) |
Total | $ 39,921 | $ 44,087 |
Technology | Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 4 years | 4 years |
Technology | Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 15 years | 15 years |
Trade names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 59,964 | $ 59,963 |
Accumulated Amortization | (25,315) | (23,627) |
Total | $ 34,649 | $ 36,336 |
Trade names | Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 2 years | 2 years |
Trade names | Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 10 years | 10 years |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets, Net - Estimated Amortization Expense (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2023 | $ 37,148 |
2024 | 43,204 |
2025 | 35,588 |
2026 | 35,233 |
2027 | 34,417 |
2028 and thereafter | 279,842 |
Total | $ 465,432 |
Debt Agreements - Narrative (De
Debt Agreements - Narrative (Details) - USD ($) | Oct. 26, 2022 | Oct. 02, 2022 | Dec. 08, 2021 | Mar. 31, 2023 | Dec. 30, 2022 |
Debt Instrument [Line Items] | |||||
Debt issuance costs | $ 15,083,000 | ||||
Bank of America | Interest Rate Cap | |||||
Debt Instrument [Line Items] | |||||
Derivative, cost of hedge | $ 6,573,000 | ||||
Derivative, notional amount | $ 350,000 | ||||
Derivative, cap interest rate | 5% | ||||
Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Debt issuance costs | $ 15,083,000 | ||||
Credit Agreement | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 465,000,000 | ||||
Debt instrument, term | 7 years | ||||
Interest rate, stated percentage | 9.39% | 9.22% | |||
Quarterly amortization installment, percentage of aggregate principal amount | 1% | ||||
Credit Agreement | Line of Credit | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, term | 5 years | ||||
Maximum borrowing capacity | $ 100,000,000 | ||||
Incremental Agreement | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 55,000 | ||||
Debt instrument, term | 3 years | ||||
Term Loan | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 460,350,000 | $ 461,513,000 | |||
Term Loan | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Interest rate, stated percentage | 9.13% | 7.38% | |||
Term Loan | Secured Debt | Fed Funds Effective Rate Overnight Index Swap Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Term Loan | Secured Debt | Eurodollar | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1% | ||||
Variable rate floor percent | 1.50% | ||||
Term Loan | Secured Debt | Eurodollar | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Term Loan | Secured Debt | Secured Overnight Financing Rate (SOFR) | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1% | ||||
Term Loan | Secured Debt | Secured Overnight Financing Rate (SOFR) | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Incremental Term Loan | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 54,863,000 | $ 55,000,000 | |||
Incremental Term Loan | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Interest rate, stated percentage | 11.48% | 10.42% | |||
Revolving Credit Facility | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 50,000,000 | $ 12,000,000 | |||
Available borrowing capacity | 40,240,000 | 82,940,000 | |||
Debt issuance costs | 1,124,000 | 1,200,000 | |||
Revolving Credit Facility | Line of Credit | Fed Funds Effective Rate Overnight Index Swap Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Revolving Credit Facility | Line of Credit | Eurodollar | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1% | ||||
Variable rate floor percent | 1% | ||||
New Initial Term Loan Facility | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Debt issuance costs | $ 13,959,000 | $ 14,655,000 |
Debt Agreements - Schedule of D
Debt Agreements - Schedule of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 30, 2022 |
Term Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 460,350 | $ 461,513 |
Incremental Term Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | 54,863 | 55,000 |
Revolving Credit Facility | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | 50,000 | 12,000 |
Revolving Credit Facility | Letter of Credit | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 9,760 | $ 5,060 |
Debt Agreements - Schedule of M
Debt Agreements - Schedule of Maturities of Long-term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 30, 2022 |
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ (15,083) | |
Less: Current maturities of long-term debt | 5,200 | $ 5,063 |
Long-term debt and revolving credit facility | 496,054 | $ 496,795 |
Secured Debt | ||
Debt Instrument [Line Items] | ||
Remainder of 2023 | 3,900 | |
2024 | 3,900 | |
2025 | 58,688 | |
2026 | 54,650 | |
2027 | 5,813 | |
Thereafter | 438,262 | |
Total future maturities of debt | 565,213 | |
Unamortized debt issuance costs | (15,083) | |
Total indebtedness | 550,130 | |
Less: Current maturities of long-term debt | 5,200 | |
Long-term debt and revolving credit facility | $ 544,930 |
Debt Agreements - Schedule of F
Debt Agreements - Schedule of Future Amortization of Debt Issuance Cost (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
Remainder of 2023 | $ 2,395 |
2024 | 3,396 |
2025 | 3,374 |
2026 | 2,123 |
2027 | 1,918 |
Thereafter | 1,877 |
Total | $ 15,083 |
Fair Value Measurement - Fair V
Fair Value Measurement - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 30, 2022 |
Carrying Amount | ||
Assets | ||
Notes receivable, net | $ 21 | $ 59 |
Carrying Amount | Term Loan | ||
Liabilities | ||
Debt instrument | 460,350 | 461,513 |
Carrying Amount | Incremental Term Loan | ||
Liabilities | ||
Debt instrument | 54,863 | 55,000 |
Fair Value | ||
Assets | ||
Notes receivable, net | 21 | 59 |
Fair Value | Term Loan | ||
Liabilities | ||
Debt instrument | 418,919 | 421,130 |
Fair Value | Incremental Term Loan | ||
Liabilities | ||
Debt instrument | $ 51,571 | $ 51,700 |
Fair Value Measurement - Narrat
Fair Value Measurement - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Aug. 08, 2022 | Jul. 01, 2022 | Mar. 31, 2023 | Dec. 30, 2022 | |
Interest Rate Cap | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative, fair value | $ 3,381 | $ 2,563 | ||
Clare | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Provision for credit losses on notes receivable | $ 5,872 | |||
Extinguishment of debt | $ 1,400 | |||
ANLA, LLC | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Business Combination, Contingent Consideration, Liability, Current | $ 250 | $ 250 |
Fair Value Measurement - Level
Fair Value Measurement - Level 3 Measurement Valuation (Details) - Fair Value, Recurring - Valuation Technique, Option Pricing Model - Fair Value, Inputs, Level 3 $ in Thousands | Mar. 31, 2023 USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Value Rights | $ 2,300 |
Measurement Input, Price Volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Volatility | 0.55 |
Fair Value Measurement - CRV Re
Fair Value Measurement - CRV Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Apr. 01, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
CVR fair value – beginning of period | $ 1,700 | $ 8,900 |
Fair value adjustments | 600 | (2,800) |
CVR fair value – end of period | $ 2,300 | $ 6,100 |
Warranties - Schedule of Produc
Warranties - Schedule of Product Warranty Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Apr. 01, 2022 | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||
Accrued warranty – beginning of period | $ 15,039 | $ 18,772 |
Warranty claims | (2,945) | (2,323) |
Warranty provisions | 1,944 | 175 |
Accrued warranty – end of period | $ 14,038 | $ 16,624 |
Warranties - Narrative (Details
Warranties - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 30, 2022 |
Guarantees and Product Warranties [Abstract] | ||
Warranty reserve | $ 10,312 | $ 10,682 |
Warranty accrual, noncurrent | $ 3,726 | $ 4,357 |
Retirement Plan (Details)
Retirement Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Apr. 01, 2022 | |
Retirement Benefits [Abstract] | ||
Defined Contribution Plan, Tax Status [Extensible Enumeration] | Qualified Plan [Member] | |
Employer matching contribution, percent of match | 100% | |
Employer matching contribution, percent of employees' gross pay (up to) | 3% | |
Employers matching contribution, annual vesting percentage | 50% | |
Maximum annual contribution percentage per employee (up to) | 6% | |
Contribution cost | $ 1,335 | $ 1,531 |
Equity Agreements and Incenti_3
Equity Agreements and Incentive Equity Plans - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Apr. 01, 2022 | Dec. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Contributions to employee stock purchase plan | $ 186 | ||
Share-based compensation expense | 7,577 | $ 5,599 | |
Unrecognized compensation expense | $ 52,424 | ||
B-1 Incentive Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 5 years | ||
Granted (in dollars per share) | $ 0 | ||
Restricted stock awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in dollars per share) | 18 | ||
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in dollars per share) | $ 11.31 | ||
Vested and unissued performance share units (in shares) | 99,000 | ||
Restricted Stock Units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year | ||
Restricted Stock Units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Performance Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Granted (in dollars per share) | $ 11.31 | ||
Vested and unissued performance share units (in shares) | 71,000 | ||
Number of shares granted based on target award, percentage | 51% | ||
Performance Stock Units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of total units granted | 0% | ||
Performance Stock Units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of total units granted | 200% | ||
Employee Stock | 2022 Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares reserves for issuance (in shares) | 750,000 | ||
Aggregate amount of shares available , percentage | 1% | ||
Number of additional shares authorized (in shares) | 186,000 | ||
Purchase price of common stock, percent | 85% | ||
Contributions to employee stock purchase plan | $ 985 | $ 287 | |
Share-based compensation expense | 186 | ||
Unrecognized compensation expense | $ 109 |
Equity Agreements and Incenti_4
Equity Agreements and Incentive Equity Plans - Summary of Restricted Stock Awards, RSUs, and PSUs (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
B-1 Incentive Units | |
Number of Units | |
Outstanding balance at beginning of period (in shares) | shares | 223 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | 46 |
Forfeited (in shares) | shares | 5 |
Outstanding balance at end of period (in shares) | shares | 172 |
Weighted- Average Grant-Date Fair Value | |
Outstanding balance at beginning of period (in dollars per share) | $ / shares | $ 18 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 18 |
Forfeited (in dollars per share) | $ / shares | 18 |
Outstanding balance at end of period (in dollars per share) | $ / shares | $ 18 |
B-2 Incentive Units | |
Number of Units | |
Outstanding balance at beginning of period (in shares) | shares | 792 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Outstanding balance at end of period (in shares) | shares | 792 |
Weighted- Average Grant-Date Fair Value | |
Outstanding balance at beginning of period (in dollars per share) | $ / shares | $ 18 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Outstanding balance at end of period (in dollars per share) | $ / shares | $ 18 |
Restricted Stock Units | |
Number of Units | |
Outstanding balance at beginning of period (in shares) | shares | 1,360 |
Granted (in shares) | shares | 1,809 |
Vested (in shares) | shares | 301 |
Forfeited (in shares) | shares | 19 |
Outstanding balance at end of period (in shares) | shares | 2,849 |
Weighted- Average Grant-Date Fair Value | |
Outstanding balance at beginning of period (in dollars per share) | $ / shares | $ 17.05 |
Granted (in dollars per share) | $ / shares | 11.31 |
Vested (in dollars per share) | $ / shares | 17.33 |
Forfeited (in dollars per share) | $ / shares | 18.52 |
Outstanding balance at end of period (in dollars per share) | $ / shares | $ 13.37 |
Performance Stock Units | |
Number of Units | |
Outstanding balance at beginning of period (in shares) | shares | 254 |
Granted (in shares) | shares | 322 |
Vested (in shares) | shares | 132 |
Forfeited (in shares) | shares | 0 |
Outstanding balance at end of period (in shares) | shares | 444 |
Weighted- Average Grant-Date Fair Value | |
Outstanding balance at beginning of period (in dollars per share) | $ / shares | $ 17.96 |
Granted (in dollars per share) | $ / shares | 11.31 |
Vested (in dollars per share) | $ / shares | 15.65 |
Forfeited (in dollars per share) | $ / shares | 0 |
Outstanding balance at end of period (in dollars per share) | $ / shares | $ 13.82 |
Equity Agreements and Incenti_5
Equity Agreements and Incentive Equity Plans - Summary of Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Time-based Options | |
Number of Units | |
Outstanding balance at beginning of period (in shares) | shares | 4,233 |
Granted (in shares) | shares | 0 |
Issuance of common stock pursuant to equity incentive plans (in shares) | shares | 0 |
Forfeited (in shares) | shares | 132 |
Outstanding balance at end of period (in shares) | shares | 4,101 |
Options exercisable at period end (in shares) | shares | 3,199 |
Weighted- Average Grant-Date Fair Value | |
Outstanding balance at beginning of period (in dollars per shares) | $ / shares | $ 6.47 |
Granted (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 6.29 |
Outstanding balance at end of period (in dollars per shares) | $ / shares | 6.47 |
Options exercisable at period end (in dollars per share) | $ / shares | $ 6.24 |
Aggregate Intrinsic Value | |
Outstanding balance at beginning of period | $ | $ 0 |
Granted | $ | 0 |
Exercised | $ | 0 |
Forfeited | $ | 0 |
Outstanding balance at end of period | $ | 0 |
Options exercisable at period end | $ | $ 0 |
Market-based Options | |
Number of Units | |
Outstanding balance at beginning of period (in shares) | shares | 1,125 |
Granted (in shares) | shares | 0 |
Issuance of common stock pursuant to equity incentive plans (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Outstanding balance at end of period (in shares) | shares | 1,125 |
Options exercisable at period end (in shares) | shares | 0 |
Weighted- Average Grant-Date Fair Value | |
Outstanding balance at beginning of period (in dollars per shares) | $ / shares | $ 5.66 |
Granted (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Outstanding balance at end of period (in dollars per shares) | $ / shares | 5.66 |
Options exercisable at period end (in dollars per share) | $ / shares | $ 0 |
Aggregate Intrinsic Value | |
Outstanding balance at beginning of period | $ | $ 0 |
Granted | $ | 0 |
Exercised | $ | 0 |
Forfeited | $ | 0 |
Outstanding balance at end of period | $ | 0 |
Options exercisable at period end | $ | $ 0 |
Equity Agreements and Incenti_6
Equity Agreements and Incentive Equity Plans - Stock Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Apr. 01, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation Expense | $ 7,577 | $ 5,599 |
Unrecognized Compensation Expense | $ 52,424 | |
Weighted-Average Remaining Contractual Term (Years) | 2 years | |
2021 Plan | Restricted stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation Expense | $ 633 | 1,145 |
Unrecognized Compensation Expense | $ 3,598 | |
Weighted-Average Remaining Contractual Term (Years) | 11 months 23 days | |
2021 Plan | Time-based Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation Expense | $ 1,022 | 1,729 |
Unrecognized Compensation Expense | $ 6,294 | |
Weighted-Average Remaining Contractual Term (Years) | 1 year 9 months 18 days | |
2021 Plan | Market-based Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation Expense | $ 629 | 645 |
Unrecognized Compensation Expense | $ 2,142 | |
Weighted-Average Remaining Contractual Term (Years) | 10 months 6 days | |
2021 Plan | Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation Expense | $ 3,543 | 1,436 |
Unrecognized Compensation Expense | $ 35,193 | |
Weighted-Average Remaining Contractual Term (Years) | 3 years 2 months 26 days | |
2021 Plan | Performance Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation Expense | $ 1,650 | 565 |
Unrecognized Compensation Expense | $ 4,469 | |
Weighted-Average Remaining Contractual Term (Years) | 1 year 3 days | |
Other equity-based compensation | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation Expense | $ 100 | $ 79 |
Unrecognized Compensation Expense | $ 728 | |
Weighted-Average Remaining Contractual Term (Years) | 1 year 9 months 21 days |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Apr. 01, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective income benefit tax rate | 17.10% | 13.80% |
Income tax benefit | $ 3,000 | $ 361 |
Tax Receivable Agreement (Detai
Tax Receivable Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2023 | Apr. 01, 2022 | Dec. 30, 2022 | Jul. 29, 2021 | |
Tax Receivable Agreement [Abstract] | ||||
Payment to certain owners related to taxes expected to be utilized on future losses | 85% | |||
Proportion of tax benefits, cash tax savings, percent | 15% | |||
Noncash tax receivable agreement liability | $ 101,406 | $ 111,453 | ||
Current tax receivable agreement liability | 23,195 | 10,191 | ||
Tax receivable agreement, liability, total | 78,211 | 101,262 | ||
Tax receivable agreement, liability, measurement adjustments | 144 | |||
Payments of tax receivable agreement, including accrued interest | 10,468 | |||
Payments of tax receivable agreement, accrued interest | 277 | |||
IPO payments held in escrow | 890 | $ 1,169 | ||
Compensation expense | $ 279 | $ 279 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Lessee, Lease, Description [Line Items] | |
Operating lease, renewal term | 5 years |
Lease not yet commenced, liability | $ 3,825 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, term of contract | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, term of contract | 10 years |
Leases - Components of Lease Co
Leases - Components of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Apr. 01, 2022 | |
Leases [Abstract] | ||
Operating lease cost | $ 4,226 | $ 3,539 |
Variable lease cost | 1,371 | 1,056 |
Short-term lease cost | 72 | 110 |
Total lease cost | $ 5,669 | $ 4,705 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information and Non-cash Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Apr. 01, 2022 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 3,683 | $ 3,405 |
Non-cash activity: | ||
Right-of-use assets obtained in exchange for lease obligations | $ 985 | $ 44,055 |
Leases - Weighted Average Remai
Leases - Weighted Average Remaining Lease Term and Discount Rate (Details) | Mar. 31, 2023 |
Leases [Abstract] | |
Weighted-average remaining lease term | 6 years 8 months 15 days |
Weighted-average discount rate | 7.40% |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Lessor, Operating Lease, Payments, Fiscal Year Maturity [Abstract] | |
Remainder of 2023 | $ 10,363 |
2024 | 14,004 |
2025 | 12,902 |
2026 | 10,808 |
2027 | 9,029 |
Thereafter | 26,386 |
Total lease payments | 83,492 |
Less: Imputed interest | 19,999 |
Less: Lease incentive receivable | 1,334 |
Present value of lease liabilities | $ 62,159 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 USD ($) vote | Apr. 01, 2022 USD ($) | Dec. 30, 2022 USD ($) | May 12, 2022 USD ($) | |
Class of Stock [Line Items] | ||||
Number of votes per common share | vote | 1 | |||
Contributions from minority partners | $ 0 | $ 0 | ||
Stock repurchase program, authorized amount | $ 25,000,000 | |||
Treasury stock, acquired | $ 238,000 | |||
Accrued Liabilities | ||||
Class of Stock [Line Items] | ||||
Treasury stock, acquired | $ 55,000 |
Stockholders' Equity - Share Re
Stockholders' Equity - Share Repurchase Activity (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Equity [Abstract] | |
Number of shares repurchased | shares | 27,000 |
Total cost | $ | $ 238 |
Average per share cost including commissions | $ / shares | $ 8.81 |
Loss Per Share - Schedule of Lo
Loss Per Share - Schedule of Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Apr. 01, 2022 | |
Earnings Per Share [Abstract] | ||
Net loss attributable to Company | $ (14,548) | $ (2,236) |
Weighted-average shares outstanding - basic (in shares) | 75,291 | 74,464 |
Weighted-average shares outstanding - diluted (in shares) | 75,291 | 74,464 |
Loss per share - basic (in dollars per share) | $ (0.19) | $ (0.03) |
Loss per share - diluted (in dollars per share) | $ (0.19) | $ (0.03) |
Loss Per Share - Schedule of An
Loss Per Share - Schedule of Antidilutive Securities Excluded from Computation of Net Income (Loss) Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Apr. 01, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of income (loss) per share (in shares) | 8,687 | 7,964 |
Restricted stock awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of income (loss) per share (in shares) | 979 | 1,412 |
Time-based Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of income (loss) per share (in shares) | 4,150 | 4,368 |
Market-based Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of income (loss) per share (in shares) | 1,126 | 1,155 |
Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of income (loss) per share (in shares) | 2,042 | 787 |
Performance Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of income (loss) per share (in shares) | 321 | 186 |
Other equity-based compensation | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of income (loss) per share (in shares) | 69 | 56 |
Related Parties (Details)
Related Parties (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Apr. 01, 2022 | |
Affiliated Entity | Employee, HR Service, And Workforce Management Vendor Usage | Hellman & Friedman, LLC | ||
Related Party Transaction [Line Items] | ||
Selling, general and administrative expenses | $ 56 | $ 113 |