Basis of Presentation and Significant Accounting Policies | 1. Basis of Presentation and Significant Accounting Policies The accompanying condensed consolidated financial statements of Weber-Stephen Products LLC (“Weber” or the “Company”) were prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”). In the opinion of management, the interim financial data includes all adjustments, consisting only of normal recurring adjustments, necessary to present a fair statement of the results for the interim periods. Organization The Company is primarily a manufactur e Principles of Consolidation The condensed consolidated financial statements include the accounts and operations of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Fiscal Year The Company’s fiscal year runs from October 1 through September 30. All references to years are to fiscal years unless otherwise stated. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The effect of the change in the estimates will be recognized in the current period of the change. Seasonality Although the Company generally has demand for its products throughout the year, the Company’s sales have historically experienced some seasonality. The Company has typically experienced its highest level of sales of its products in the second and third fiscal quarters as retailers across North America and Europe changeover their floor sets, build inventory and fulfill consumer demand for outdoor cooking products. Sales are typically lower during the first and fourth fiscal quarters, with the exception of the Australia/New Zealand business which is counter seasonal to the balance of the business. Revenue Recognition Revenue transactions associated with the sale of grills and related accessories comprise a single performance obligation, which consists of the transfer of products to customers at a point in time. Substantially all of the Company’s revenues relate to the sales of grills and accessories. The Company satisfies the performance obligation and records revenues for grills and accessories when control has passed to the customer, based on the terms of sale. Transfer of control passes to customers at a point in time, that point in time generally being upon shipment or upon delivery of the performance obligation, depending on the written sales terms with the customer. The Company’s purchase orders from customers for specific products represent its contracts and include all key terms and conditions related to the sale of products. For all sales, no significant uncertainty exists surrounding the customers’ obligation to pay for grills and accessories. Customers’ obligations to pay are generally under normal commercial terms, with payment terms typically being 30-60 The Company offers warranties on most of its products, which are considered assurance type warranties and, therefore, are not accounted for as a separate performance obligation. The Company has elected to account for shipping and handling activities as a fulfillment cost. Accordingly, all shipping and handling activity costs are recognized as Selling, general and administrative expenses at the time the related revenue is recognized. The Company recognized shipping and handling activity costs of $52,883 and $38,352 for the three months ended June 30, 2021 and 2020, respectively, and $126,783 and $84,724 for the nine months ended June 30, 2021 and 2020, respectively. Amounts invoiced to customers for shipping and handling are recorded in Net sales. Any taxes collected on behalf of government authorities are excluded from Net sales. Accounts Receivable Accounts receivable consist primarily of amounts due to the Company from its normal business activities, offset by an allowance for expected credit losses. The Company estimates its expected credit losses based on historical experience, the aging of accounts receivable, consideration of current economic conditions and its expectations of future economic conditions. Additionally, the Company establishes customer-specific allowances for known at-risk The Company’s allowances are as follows: Balance at September 30, 2020 $ 3,262 Charges (credits) to the provision, net 325 Accounts written off, net of recoveries (1,096 ) Balance at June 30, 2021 $ 2,491 Balance at September 30, 2019 $ 2,858 Charges (credits) to the provision, net 863 Accounts written off, net of recoveries (160 ) Balance at June 30, 2020 $ 3,561 Inventories Inventories include finished products and work-in-process first-in, first-out The components of inventory are as follows: June 30, September 30, Work-in-process $ 48,041 $ 33,343 Finished products 285,894 199,984 Total Inventories, net $ 333,935 $ 233,327 Derivative Instruments During the nine months ended June 30, 2021 and 2020, the Company used interest rate swap contracts to reduce its exposure to fluctuations in interest rates. During the nine months ended June 30, 2021 and 2020, the Company also entered into foreign currency forward contracts to reduce its exposure to fluctuations in foreign currency denominated sales and the respective cash flows impacting Gross profit. When entered, these financial instruments are designated as cash flow hedges of underlying exposures and de-designated de-designated During the nine months ended June 30, 2021, the Company used commodity index contracts to reduce its exposure to fluctuations in cash flows relating to the purchases of aluminum and steel-based components and raw materials impacting Gross profit. Cash flows related to the settlement of derivative instruments designated as cash flow hedges are classified within operating activities. Changes in the fair value of a derivative that is designated as a cash flow hedge, to the extent that the hedge is effective, are recorded in accumulated other comprehensive income (loss) and reclassified to earnings when the hedged item affects earnings. Using derivative instruments means assuming counterparty credit risk. Counterparty credit risk relates to the loss the Company could incur if a counterparty were to default on a derivative contract. The Company deals with only investment-grade counterparties and monitors the overall credit risk and exposure to individual counterparties. The Company did not experience any nonperformance by a counterparty during the nine months ended June 30, 2021 or 2020. The Company did not require, nor did it post, collateral or security on such contracts. Business Combinations The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s condensed consolidated statements of income. In the event that the Company acquir e Income (Loss) Per Unit Basic income (loss) per unit is computed using the weighted-average number of outstanding common units during the period. Diluted income (loss) per unit is computed using the weighted- average number of outstanding common units and, when dilutive, potential common units outstanding during the period. For purposes of the diluted net income (loss) per unit calculation, common units issued in exchange for notes receivable with limited recourse provisions are considered to be potentially dilutive securities. See Note 15 for further information. Basic and diluted net income (loss) per unit attributable to common members is presented in conformity with the two-class two-class two-class Unit Based Compensation As described within the Change in Accounting Principle section below, in anticipation of becoming a public company, the Company changed its methodology for valuing the profits interest units and Management Incentive Compensation Plan (“LTIP”) awards from the intrinsic value methodology to fair value during the quarter ended March 31, 2021. Both the LTIP awards and the profits interest units are liability classified. The awards are re-measured The value of the LTIP awards is based on achievement of performance metrics established by the Compensation Committee of the Board of Directors. The value of the awards at the end of each reporting period is dependent upon the Company’s estimates of the underlying performance measures. As the units issued are based on performance metrics, the expense is adjusted for the ultimate number of units expected to be issued as of the end of each reporting period. The fair value of the profits interest units is estimated using the Black-Scholes option-pricing valuation model. The determination of fair value using an option-pricing model is affected by the Company’s enterprise value as well as assumptions pertaining to several variables, including expected volatility, the expected term of the unit and the risk-free rate of interest. In the option-pricing model for the Company’s profits interest units, expected volatility is based on an analysis of reported data for a group of guideline publicly-traded companies. For this analysis, the Company selects companies with comparable characteristics including enterprise value, risk profiles, and with historical share price information sufficient to meet the expected life of the units. The Company determines expected volatility using an average of the historical volatilities of the guideline group of companies. The Company expects to continue to apply this process until such time as it has adequate historical data regarding volatility. The expected term of the unit is based on expected exercise patterns of unit holders and the risk-free rate of interest is based on U.S. Treasury yields. Advertising Costs The Company expenses advertising costs upon the first display of the advertisement and includes advertising expenses in Selling, general and administrative expenses in the condensed consolidated statements of income. The Company incurred advertising expenses of $49,421 and $26,596 for the three months ended June 30, 2021 and 2020, respectively, and $84,921 and $46,991 for the nine months ended June 30, 2021 and 2020, respectively. Research and Development Costs Research and development costs are charged to expense as incurred and included in Selling, general and administrative expenses in the condensed consolidated statements of income. The Company incurred research and development expenses of $18,421 and $4,659 for the three months ended June 30, 2021 and 2020, respectively, and $28,619 and $11,967 for the nine months ended June 30, 2021 and 2020, respectively. Change in Accounting Principle Profits interest units and LTIP awards historically were accounted for as liability compensatory awards under ASC 710, Compensation—General Compensation—Stock Compensation re-measured expense of New Accounting Pronouncements Recently Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes 2019-12 2019-12 In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract 2018-15 e In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement 2018-13 . In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments off-balance New Accounting Pronouncements Issued but Not Yet Adopted No recent accounting pronouncements were issued by the FASB that are believed by management to have a material impact on the Company’s future financial statements. Property, Equipment and Leasehold Improvements During the fiscal year ended September 30, 2020, the Company determined that one of its manufacturing sites was considered to be assets held for sale, since the asset group was being marketed for sale and all the criteria to be classified as held for sale under Accounting Standards Codification (“ASC”) 360, Property, Plant and Equipment—Impairment or Disposal of Long-Lived Assets Warranty The Company offers warranties on most of its products. The specific terms and conditions of the warranties offered by the Company vary depending upon the product sold. The Company estimates the costs that may be incurred under its warranty plans and the period for which claims are honored, and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the Company’s warranty liability include the number of units sold, the type of products sold, historical and anticipated rates of warranty claims and cost per claim. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Deferred Financing Costs Deferred financing costs are amortized over the term of the related debt. The carrying value of the deferred financing costs was $25,813 and $7,422 as of June 30, 2021 and September 30, 2020, respectively. Deferred financing costs related to long-term debt are reflected as a direct reduction of the carrying value of the related debt. Amortization expense of deferred financing costs was $955 and $856 for the three months ended June 30, 2021 and 2020, respectively, and $2,813 and $2,079 for the nine months ended June 30, 2021 and 2020, respectively, and was recorded in Interest expense. Deferred Offering Costs The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process in-process Income Taxes In the U.S., the Company, a limited liability company (LLC), is taxed as a partnership under the Internal Revenue Code. The Company’s income is included in the members’ income tax returns. Accordingly, the Company generally is not subject to federal or certain state income taxes. The Company has operations that are subject to income and other similar taxes in foreign countries. A valuation allowance is provided to offset deferred tax assets if, based on available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In accordance with ASC 740, Income Taxes The Company’s practice is to recognize interest and penalties related to income tax matters in Income taxes in the accompanying condensed consolidated statements of income. For the three and nine months ended June 30, 2021 and 2020, there were no significant interest or penalties related to uncertain income tax positions that were recognized in the accompanying condensed consolidated statements of income. |