Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 07, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-40836 | |
Entity Registrant Name | Brilliant Earth Group, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 87-1015499 | |
Entity Address, Address Line One | 300 Grant Avenue | |
Entity Address, Address Line Two | Third Floor | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94108 | |
City Area Code | 800 | |
Local Phone Number | 691-0952 | |
Title of 12(b) Security | Class A common stock, $0.0001 par value per share | |
Trading Symbol | BRLT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001866757 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Common Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 12,039,540 | |
Common Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 35,616,783 | |
Common Class C | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 49,119,976 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 149,605 | $ 154,649 |
Restricted cash | 207 | 205 |
Inventories, net | 39,413 | 39,331 |
Prepaid expenses and other current assets | 10,938 | 11,764 |
Total current assets | 200,163 | 205,949 |
Property and equipment, net | 22,200 | 16,554 |
Deferred tax assets | 9,367 | 8,948 |
Operating lease right of use assets | 38,333 | 27,812 |
Other assets | 3,266 | 3,311 |
Total assets | 273,329 | 262,574 |
Current liabilities: | ||
Accounts payable | 9,496 | 11,032 |
Accrued expenses and other current liabilities | 34,163 | 37,833 |
Current portion of deferred revenue | 22,258 | 18,505 |
Current portion of operating lease liabilities | 4,983 | 3,873 |
Current portion of long-term debt | 3,250 | 3,250 |
Total current liabilities | 74,150 | 74,493 |
Long-term debt, net of debt issuance costs | 57,924 | 59,462 |
Operating lease liabilities | 39,712 | 28,537 |
Payable pursuant to the Tax Receivable Agreement | 7,897 | 6,893 |
Other long-term liabilities | 12 | 48 |
Total liabilities | 179,695 | 169,433 |
Commitments and contingencies (Note 10) | ||
Equity | ||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, none issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 0 | 0 |
Additional paid-in capital | 7,882 | 7,256 |
Retained earnings | 3,759 | 3,663 |
Equity attributable to Brilliant Earth Group, Inc. | 11,651 | 10,929 |
NCI attributable to Brilliant Earth, LLC | 81,983 | 82,212 |
Total equity | 93,634 | 93,141 |
Total liabilities and equity | 273,329 | 262,574 |
Common Class A | ||
Equity | ||
Common stock, value, issued | 1 | 1 |
Common Class B | ||
Equity | ||
Common stock, value, issued | 4 | 4 |
Common Class C | ||
Equity | ||
Common stock, value, issued | 5 | 5 |
Common Class D | ||
Equity | ||
Common stock, value, issued | $ 0 | $ 0 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Preferred stock, par or stated value per share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common Class A | ||
Common stock, par or stated value per share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,200,000,000 | 1,200,000,000 |
Common stock, shares issued (in shares) | 12,037,565 | 11,246,694 |
Common stock, shares outstanding (in shares) | 12,037,565 | 11,246,694 |
Common Class B | ||
Common stock, par or stated value per share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 35,583,600 | 35,482,534 |
Common stock, shares outstanding (in shares) | 35,583,600 | 35,482,534 |
Common Class C | ||
Common stock, par or stated value per share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 49,119,976 | 49,119,976 |
Common stock, shares outstanding (in shares) | 49,119,976 | 49,119,976 |
Common Class D | ||
Common stock, par or stated value per share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Net sales | $ 110,184 | $ 108,809 | $ 207,882 | $ 208,847 |
Cost of sales | 46,695 | 50,988 | 90,717 | 100,910 |
Gross profit | 63,489 | 57,821 | 117,165 | 107,937 |
Operating expenses: | ||||
Selling, general and administrative | 62,129 | 52,145 | 115,895 | 96,961 |
Income from operations | 1,360 | 5,676 | 1,270 | 10,976 |
Interest expense | (1,280) | (1,146) | (2,486) | (2,922) |
Other income (expense), net | 1,192 | (49) | 2,035 | (108) |
Loss on extinguishment of debt | 0 | (617) | 0 | (617) |
Income before tax | 1,272 | 3,864 | 819 | 7,329 |
Income tax expense | (37) | (113) | (24) | (209) |
Net income | 1,235 | 3,751 | 795 | 7,120 |
Net income allocable to non-controlling interest | 1,087 | 3,327 | 699 | 6,340 |
Net income allocable to Brilliant Earth Group, Inc. | $ 148 | $ 424 | $ 96 | $ 780 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.01 | $ 0.04 | $ 0.01 | $ 0.07 |
Diluted (in dollars per share) | $ 0.01 | $ 0.03 | $ 0.01 | $ 0.06 |
Weighted average shares of common stock outstanding: | ||||
Basic (in shares) | 11,796,639 | 10,810,627 | 11,593,416 | 10,412,922 |
Diluted (in shares) | 96,889,854 | 96,208,702 | 96,820,285 | 96,386,862 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Additional Paid-In Capital | Retained Earnings | Stockholders' Equity | Non-Controlling Interest | Common Class A | Common Class A Common Stock | Common Class B | Common Class B Common Stock | Common Class C | Common Class C Common Stock |
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2021 | 9,614,523 | 35,658,013 | 49,505,250 | ||||||||
Stockholders' equity, beginning balance at Dec. 31, 2021 | $ 82,838 | $ 6,865 | $ 1,528 | $ 8,403 | $ 1 | $ 4 | $ 5 | ||||
Units, beginning balance (in shares) at Dec. 31, 2021 | 85,163,263 | ||||||||||
Units, beginning balance at Dec. 31, 2021 | $ 74,435 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Tax distributions to members | (6,874) | $ (6,874) | |||||||||
Conversion of convertible securities (in shares) | (1,053,914) | 1,053,914 | (668,640) | (385,274) | |||||||
RSU vesting during period (in shares) | 40,019 | ||||||||||
Class B shares issued upon vesting of LLC units (in shares) | 337,323 | 337,323 | |||||||||
Change in deferred tax asset from step-up tax basis related to redemption of LLC Units and set-up of TRA liability | 605 | 605 | 605 | ||||||||
Equity-based compensation | 2,104 | 2,028 | 2,028 | $ 76 | |||||||
Net income (loss) | 3,369 | 356 | 356 | 3,013 | |||||||
Rebalancing of controlling and non-controlling interest | (2,159) | (2,159) | $ 2,159 | ||||||||
Stockholders' equity, ending balance (in shares) at Mar. 31, 2022 | 10,708,456 | 35,326,696 | 49,119,976 | ||||||||
Stockholders' equity, ending balance at Mar. 31, 2022 | 82,042 | 7,339 | 1,884 | 9,233 | $ 1 | $ 4 | $ 5 | ||||
Units, ending balance (in shares) at Mar. 31, 2022 | 84,446,672 | ||||||||||
Units, ending balance at Mar. 31, 2022 | $ 72,809 | ||||||||||
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2021 | 9,614,523 | 35,658,013 | 49,505,250 | ||||||||
Stockholders' equity, beginning balance at Dec. 31, 2021 | 82,838 | 6,865 | 1,528 | 8,403 | $ 1 | $ 4 | $ 5 | ||||
Units, beginning balance (in shares) at Dec. 31, 2021 | 85,163,263 | ||||||||||
Units, beginning balance at Dec. 31, 2021 | $ 74,435 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | 7,120 | ||||||||||
Stockholders' equity, ending balance (in shares) at Jun. 30, 2022 | 10,835,394 | 35,357,593 | 49,119,976 | ||||||||
Stockholders' equity, ending balance at Jun. 30, 2022 | 79,754 | 6,749 | 2,308 | 9,067 | $ 1 | $ 4 | $ 5 | ||||
Units, ending balance (in shares) at Jun. 30, 2022 | 84,477,569 | ||||||||||
Units, ending balance at Jun. 30, 2022 | $ 70,687 | ||||||||||
Stockholders' equity, beginning balance (in shares) at Mar. 31, 2022 | 10,708,456 | 35,326,696 | 49,119,976 | ||||||||
Stockholders' equity, beginning balance at Mar. 31, 2022 | 82,042 | 7,339 | 1,884 | 9,233 | $ 1 | $ 4 | $ 5 | ||||
Units, beginning balance (in shares) at Mar. 31, 2022 | 84,446,672 | ||||||||||
Units, beginning balance at Mar. 31, 2022 | $ 72,809 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Tax distributions to members | (8,100) | $ (8,100) | |||||||||
Conversion of convertible securities (in shares) | (110,000) | 110,000 | (110,000) | 0 | |||||||
RSU vesting during period (in shares) | 16,938 | ||||||||||
Class B shares issued upon vesting of LLC units (in shares) | 140,897 | 140,897 | |||||||||
Change in deferred tax asset from step-up tax basis related to redemption of LLC Units and set-up of TRA liability | (87) | (87) | (87) | ||||||||
Equity-based compensation | 2,148 | 2,079 | 2,079 | $ 69 | |||||||
Net income (loss) | 3,751 | 424 | 424 | 3,327 | |||||||
Rebalancing of controlling and non-controlling interest | 0 | (2,582) | (2,582) | $ 2,582 | |||||||
Stockholders' equity, ending balance (in shares) at Jun. 30, 2022 | 10,835,394 | 35,357,593 | 49,119,976 | ||||||||
Stockholders' equity, ending balance at Jun. 30, 2022 | 79,754 | 6,749 | 2,308 | 9,067 | $ 1 | $ 4 | $ 5 | ||||
Units, ending balance (in shares) at Jun. 30, 2022 | 84,477,569 | ||||||||||
Units, ending balance at Jun. 30, 2022 | $ 70,687 | ||||||||||
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2022 | 11,246,694 | 11,246,694 | 35,482,534 | 35,482,534 | 49,119,976 | 49,119,976 | |||||
Stockholders' equity, beginning balance at Dec. 31, 2022 | 93,141 | 7,256 | 3,663 | 10,929 | $ 1 | $ 4 | $ 5 | ||||
Units, beginning balance (in shares) at Dec. 31, 2022 | 84,602,510 | ||||||||||
Units, beginning balance at Dec. 31, 2022 | $ 82,212 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Tax distributions to members | $ (1,468) | ||||||||||
Conversion of convertible securities (in shares) | (71,886) | 71,886 | (71,886) | ||||||||
RSU vesting during period (in shares) | 252,941 | ||||||||||
Class B shares issued upon vesting of LLC units (in shares) | 115,437 | 115,437 | |||||||||
Change in deferred tax asset from step-up tax basis related to redemption of LLC Units and set-up of TRA liability | (65) | (65) | (65) | ||||||||
Equity-based compensation | 2,258 | 2,204 | 2,204 | $ 54 | |||||||
Net income (loss) | (440) | (52) | (52) | (388) | |||||||
Rebalancing of controlling and non-controlling interest | 0 | (1,780) | (1,780) | $ 1,780 | |||||||
Stockholders' equity, ending balance (in shares) at Mar. 31, 2023 | 11,571,521 | 35,526,085 | 49,119,976 | ||||||||
Stockholders' equity, ending balance at Mar. 31, 2023 | 93,426 | 7,615 | 3,611 | 11,236 | $ 1 | $ 4 | $ 5 | ||||
Units, ending balance (in shares) at Mar. 31, 2023 | 84,646,061 | ||||||||||
Units, ending balance at Mar. 31, 2023 | $ 82,190 | ||||||||||
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2022 | 11,246,694 | 11,246,694 | 35,482,534 | 35,482,534 | 49,119,976 | 49,119,976 | |||||
Stockholders' equity, beginning balance at Dec. 31, 2022 | 93,141 | 7,256 | 3,663 | 10,929 | $ 1 | $ 4 | $ 5 | ||||
Units, beginning balance (in shares) at Dec. 31, 2022 | 84,602,510 | ||||||||||
Units, beginning balance at Dec. 31, 2022 | $ 82,212 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | 795 | ||||||||||
Stockholders' equity, ending balance (in shares) at Jun. 30, 2023 | 12,037,565 | 12,037,565 | 35,583,600 | 35,583,600 | 49,119,976 | 49,119,976 | |||||
Stockholders' equity, ending balance at Jun. 30, 2023 | 93,634 | 7,882 | 3,759 | 11,651 | $ 1 | $ 4 | $ 5 | ||||
Units, ending balance (in shares) at Jun. 30, 2023 | 84,703,576 | ||||||||||
Units, ending balance at Jun. 30, 2023 | $ 81,983 | ||||||||||
Stockholders' equity, beginning balance (in shares) at Mar. 31, 2023 | 11,571,521 | 35,526,085 | 49,119,976 | ||||||||
Stockholders' equity, beginning balance at Mar. 31, 2023 | 93,426 | 7,615 | 3,611 | 11,236 | $ 1 | $ 4 | $ 5 | ||||
Units, beginning balance (in shares) at Mar. 31, 2023 | 84,646,061 | ||||||||||
Units, beginning balance at Mar. 31, 2023 | $ 82,190 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Tax distributions to members | (3,660) | $ (3,660) | |||||||||
Conversion of convertible securities (in shares) | (54,600) | 54,600 | (54,600) | ||||||||
RSU vesting during period (in shares) | 411,444 | ||||||||||
Class B shares issued upon vesting of LLC units (in shares) | 112,115 | 112,115 | |||||||||
Change in deferred tax asset from step-up tax basis related to redemption of LLC Units and set-up of TRA liability | 6 | 6 | 6 | ||||||||
Equity-based compensation | 2,627 | 2,574 | 2,574 | $ 53 | |||||||
Net income (loss) | 1,235 | 148 | 148 | 1,087 | |||||||
Rebalancing of controlling and non-controlling interest | 0 | (2,313) | (2,313) | $ 2,313 | |||||||
Stockholders' equity, ending balance (in shares) at Jun. 30, 2023 | 12,037,565 | 12,037,565 | 35,583,600 | 35,583,600 | 49,119,976 | 49,119,976 | |||||
Stockholders' equity, ending balance at Jun. 30, 2023 | $ 93,634 | $ 7,882 | $ 3,759 | $ 11,651 | $ 1 | $ 4 | $ 5 | ||||
Units, ending balance (in shares) at Jun. 30, 2023 | 84,703,576 | ||||||||||
Units, ending balance at Jun. 30, 2023 | $ 81,983 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Operating activities | ||
Net income (loss) | $ 795 | $ 7,120 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 1,891 | 747 |
Equity-based compensation | 4,885 | 4,252 |
Non-cash operating lease cost | 2,368 | 1,462 |
Amortization of debt issuance costs | 134 | 452 |
Loss on extinguishment of debt | 0 | 617 |
Deferred tax benefit | 23 | 0 |
Other | 66 | (56) |
Changes in assets and liabilities: | ||
Inventories | (138) | (10,544) |
Prepaid expenses and other current assets | 2,141 | (1,945) |
Other assets | (2) | (665) |
Accounts payable, accrued expenses and other current liabilities | (3,091) | 461 |
Deferred revenue | 3,717 | 3,580 |
Operating lease liabilities | (1,919) | (608) |
Net cash provided by operating activities | 10,870 | 4,873 |
Investing activities | ||
Purchases of property and equipment | (9,159) | (4,068) |
Net cash used in investing activities | (9,159) | (4,068) |
Financing activities | ||
Payments on SVB term loan | (1,625) | 0 |
Proceeds received from Silicon Valley Bank term loan facility | 0 | 65,000 |
Repayment of Runway term loan | 0 | (58,158) |
Principal payments on Runway term loan | 0 | (6,842) |
Final payment and prepayment penalty on Runway term loan | 0 | (2,408) |
Payments of debt issuance costs | 0 | (755) |
Tax distributions to members | (5,128) | (14,974) |
Net cash used in financing activities | (6,753) | (18,137) |
Net decrease in cash, cash equivalents and restricted cash | (5,042) | (17,332) |
Cash, cash equivalents and restricted cash at beginning of period | 154,854 | 173,070 |
Cash, cash equivalents and restricted cash at end of period | 149,812 | 155,738 |
Reconciliation of cash, cash equivalents and restricted cash | ||
Cash and cash equivalents | 149,605 | 155,533 |
Restricted cash | 207 | 205 |
Total cash, cash equivalents, and restricted cash | 149,812 | 155,738 |
Non-cash investing and financing activities | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | 14,204 | 3,716 |
Deferred tax assets associated with redemption of LLC Units | 442 | 3,891 |
TRA Obligation associated with redemption of LLC Units | 502 | 3,373 |
Purchases of property and equipment included in accounts payable and accrued liabilities | (1,612) | 1,219 |
Change in APIC related to redemption of LLC Units | (80) | 518 |
Debt issuance costs included in accounts payable and accrued liabilities | $ 0 | $ 487 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Brilliant Earth Group, Inc. was formed as a Delaware corporation on June 2, 2021 for the purpose of facilitating an initial public offering ("IPO") and executing other related organizational transactions to acquire and carry on the business of Brilliant Earth, LLC. Brilliant Earth, LLC was originally incorporated in Delaware on August 25, 2005, and subsequently converted to a limited liability company on November 29, 2012. Brilliant Earth Group, Inc., the sole managing member of Brilliant Earth, LLC, consolidates Brilliant Earth, LLC and both are collectively referred to herein as "the Company". The Company designs, procures and sells ethically-sourced diamonds, gemstones and jewelry online and through 32 showrooms operating within the United States ("U.S.") as of June 30, 2023. Co-headquarters are located in San Francisco, California and Denver, Colorado. Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and the requirements of the Securities and Exchange Commission (the "SEC") for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2023, or for any other interim period or for any other future year. The condensed consolidated balance sheet as of December 31, 2022 has been derived from the audited consolidated financial statements of the Company, which are included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 (the "2022 Form 10-K"). In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments consisting only of normal recurring adjustments necessary to state fairly the financial position, results of operations and cash flows for the periods presented in conformity with U.S. GAAP applicable to interim periods. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2022, as disclosed in the 2022 Form 10-K . There have been no material changes or updates to the Company's significant accounting policies from those described in the audited consolidated financial statements included in the 2022 Form 10-K except for the updates noted below. Principles of Consolidation and Non-Controlling Interest The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary, Brilliant Earth, LLC, which it controls due to ownership of the voting interest or pursuant to variable interest entity ("VIE") accounting guidance. All intercompany balances and transactions have been eliminated in consolidation. The non-controlling interest on the unaudited condensed consolidated statements of operations represents the portion of earnings or loss attributable to the economic interest in Brilliant Earth, LLC held by the Continuing Equity Owners. The non-controlling interest on the unaudited condensed consolidated balance sheets represents the portion of net assets of the Company attributable to the Continuing Equity Owners, based on the portion of the LLC Interests owned by such unit holders. As of June 30, 2023, the non-controlling interest was 87.6%. At the end of each reporting period, equity related to Brilliant Earth, LLC that is attributable to Brilliant Earth Group, Inc. and Continuing Equity Owners is rebalanced to reflect Brilliant Earth Group, Inc.'s and Continuing Equity Owners' ownership in Brilliant Earth, LLC. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Some of the more significant estimates include inventory valuation, allowance for sales returns, estimates of current and deferred income taxes, payable pursuant to the tax receivable agreement, useful lives and depreciation of long-lived assets, and fair value of equity-based compensation. Actual results could differ materially from those estimates. On an ongoing basis, the Company reviews its estimates to ensure that they appropriately reflect changes in its business or new information available. Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. U.S. GAAP prescribes three levels of inputs that may be used to measure fair value: Level 1 Valuation based on quoted prices (unadjusted) observed in active markets for identical assets or liabilities. Level 2 Valuation techniques based on inputs that are quoted prices of similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not in active markets; inputs other than quoted prices used in a valuation model that are observable for that instrument; and inputs that are derived from, or corroborated by, observable market data by correlation or other means. Level 3 Valuation techniques with significant unobservable market inputs. The Company is required to disclose its estimate of the fair value of material financial instruments, including those recorded as assets or liabilities in its financial statements, in accordance with U.S. GAAP. At June 30, 2023 and December 31, 2022, there were no financial instruments (assets or liabilities) measured at fair value on a recurring basis. The carrying amounts of cash and cash equivalents, restricted cash, accounts payable and accrued expenses and other current liabilities approximate fair value due to their short-term maturities and were classified as Level 1. The carrying value of long-term debt, net of debt issuance costs, also approximates its fair value, which has been estimated by management based on the consideration of applicable interest rates (including certain instruments at variable or floating rates) for similar types of borrowing arrangements and were classified as Level 2. Recent Accounting Pronouncements The Company has considered all recent accounting pronouncements issued, but not yet effective, and does not expect any to have a material effect on the Company’s condensed consolidated financial statements. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHAREBasic earnings per share is computed by dividing net income applicable to Brilliant Earth Group, Inc. by the weighted average shares of Class A common stock outstanding (and Class D common stock, if outstanding) during the period. Diluted earnings per share is computed by adjusting the net income available to Brilliant Earth Group, Inc. and the weighted average shares outstanding to give effect to potentially dilutive securities. Shares of Class B and Class C common stock are not entitled to receive any distributions or dividends and are therefore excluded from this presentation since they are not participating securities. Basic and diluted earnings per share of common stock for the three and six months ended June 30, 2023 and 2022 have been computed as follows (in thousands, except share and per share amounts): Three Months Ended June 30, Six Months Ended June 30, Numerator: 2023 2022 2023 2022 Net income attributable to Brilliant Earth Group, Inc., BASIC $ 148 $ 424 $ 96 $ 780 Add: Net income impact from assumed redemption of all LLC Units to common stock 1,087 3,327 699 6,340 Less: Income tax expense on net income attributable to NCI (281) (850) (181) (1,603) Net income attributable to Brilliant Earth Group, Inc., after adjustment for assumed conversion, DILUTED $ 954 $ 2,901 $ 614 $ 5,517 Denominator: Weighted average shares of common stock outstanding, BASIC 11,796,639 10,810,627 11,593,416 10,412,922 Dilutive effects of: Vested LLC Units that are exchangeable for common stock 84,638,225 84,404,337 84,628,063 84,630,379 Unvested LLC Units that are exchangeable for common stock 378,310 929,489 439,436 1,276,767 RSUs and stock options 76,680 64,249 159,370 66,794 Weighted average shares of common stock outstanding, DILUTED 96,889,854 96,208,702 96,820,285 96,386,862 BASIC earnings per share $ 0.01 $ 0.04 $ 0.01 $ 0.07 DILUTED earnings per share $ 0.01 $ 0.03 $ 0.01 $ 0.06 Net income attributable to the non-controlling interest added back to net income in the fully dilutive computation has been adjusted for income taxes which would have been expensed had the income been recognized by Brilliant Earth Group, Inc., a taxable entity. The weighted average common shares outstanding in the diluted computation per share assumes all outstanding LLC Units are converted and the Company will elect to issue shares of common stock upon redemption rather than cash-settle. For the three and six months ended June 30, 2023 and 2022, the dilutive impact of LLC Units convertible into common stock were included in the computation of diluted earnings per share under the if-converted method; the dilutive impact of unvested LLC Units and RSUs were included using the treasury stock method. The following table presents the shares underlying stock options and RSUs for the three and six months ended June 30, 2023 and 2022 that have been excluded from the computation of earnings per share because such impact is anti-dilutive: Three Months Ended Six Months Ended 2023 2022 2023 2022 RSUs 3,524,279 2,369,323 2,896,832 1,990,846 Stock options 799,329 1,132,666 815,650 1,316,755 |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | REVENUE Disaggregation of Revenue The following table discloses total net sales by geography for the three and six months ended June 30, 2023 and 2022 (in thousands): For the Three Months Ended For the Six Months Ended June 30, 2023 2022 2023 2022 United States $ 104,854 $ 102,232 $ 197,469 $ 195,998 International 5,330 6,577 10,413 12,849 Total net sales $ 110,184 $ 108,809 $ 207,882 $ 208,847 Deferred Revenue Transactions where payment has been received from customers, but control has not transferred, are recorded as customer deposits in deferred revenue and revenue recognition is deferred until delivery has occurred. Deferred revenue also includes payments on the Company's three-year extended service plan that customers have elected to purchase. As of June 30, 2023 and December 31, 2022, total deferred revenue was $22.3 million and $18.6 million, respectively, of which less than $0.1 million and less than $0.1 million, respectively, were included within other long-term liabilities in the unaudited condensed consolidated balance sheets. During the six months ended June 30, 2023 and 2022, the Company recognized $17.8 million and $18.1 million of revenue, respectively, that was deferred as of December 31, 2022 and December 31, 2021, respectively. Sales Returns and Allowances A returns asset account and a refund liabilities account are maintained to record the effects of estimated product returns and sales returns allowance. Returns asset and refund liabilities are updated at the end of each financial reporting period and the effect of such changes are accounted for in the period in which such changes occur. The Company estimates anticipated product returns in the form of a refund liability based on historical return percentages and current period sales levels and accrues a related returns asset for goods expected to be returned in salable condition less any expected costs to recover such goods, including return shipping costs that the Company may incur. |
Inventories, Net
Inventories, Net | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | INVENTORIES, NET Inventories, net consist of the following (in thousands): June 30, December 31, 2023 2022 Loose diamonds $ 11,507 $ 11,894 Fine jewelry and other 28,269 27,744 Allowance for inventory obsolescence (363) (307) Total inventories, net $ 39,413 $ 39,331 The allowance for inventory obsolescence consists of the following (in thousands): June 30, June 30, 2023 2022 Balance at beginning of period $ (307) $ (260) Change in allowance for inventory obsolescence (56) 57 Balance at end of period $ (363) $ (203) As of June 30, 2023 and December 31, 2022, the Company had $23.0 million and $27.6 million, respectively, in consigned inventory held on behalf of suppliers which is not recorded in the unaudited condensed consolidated balance sheets. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 6 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following (in thousands): June 30, December 31, 2023 2022 Vendor expenses $ 12,122 $ 14,769 Inventory received not billed 9,736 7,973 Payroll expenses 3,923 5,301 Sales and other tax payable 3,002 4,137 Provision for sales returns and allowances 1,599 2,332 Current portion of TRA — 502 Other 3,781 2,819 Total accrued expenses and other current liabilities $ 34,163 $ 37,833 Included in accrued expenses and other current liabilities is a provision for sales returns and allowances. Returns are estimated based on past experience and current expectations and are recorded as an adjustment to revenue. Activity for the six months ended June 30, 2023 and 2022 was as follows (in thousands): June 30, June 30, 2023 2022 Balance at beginning of period $ 2,332 $ 2,338 Provision 10,133 10,817 Returns and allowances (10,866) (11,609) Balance at end of period $ 1,599 $ 1,546 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Leases | LEASES The Company leases its executive offices, retail showrooms, office and operational locations under operating leases. The fixed, non-cancelable terms of our real estate leases are generally 5-10 years. Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised and therefore are not factored into the determination of lease payments. Most of the real estate leases require payment of real estate taxes, insurance and certain common area maintenance costs in addition to future minimum lease payments. Total operating lease ROU assets and lease liabilities were as follows (in thousands): Assets Classification As of June 30, 2023 As of June 30, 2022 Operating ROU assets at cost Operating lease right of use assets $ 43,930 $ 22,889 Accumulated amortization Operating lease right of use assets (5,597) (1,462) Net book value $ 38,333 $ 21,427 Liabilities Classification As of June 30, 2023 As of June 30, 2022 Current: Operating leases Current portion of operating lease liabilities $ 4,983 $ 3,025 Noncurrent: Operating leases Operating lease liabilities 39,712 21,399 Total lease liabilities $ 44,695 $ 24,424 Total operating lease costs were as follows (in thousands): Classification For the three months ended June 30, 2023 For the three months ended June 30, 2022 For the six months ended June 30, 2023 For the six months ended June 30, 2022 Operating lease costs Selling, general and administrative expense $ 1,799 $ 1,054 $ 3,352 $ 1,978 Variable lease costs Selling, general and administrative expense 327 — 592 — Total lease costs $ 2,126 $ 1,054 $ 3,944 $ 1,978 The maturity analysis of the operating lease liabilities as of June 30, 2023 was as follows (in thousands): Amount For the six months ending December 31, 2023 $ 3,025 Years ending December 31, 2024 7,718 2025 7,768 2026 7,523 2027 6,135 2028 5,125 Thereafter 16,119 Total minimum lease payments 53,413 Less: imputed interest (8,718) Net present value of operating lease liabilities 44,695 Less: current portion (4,983) Long-term portion $ 39,712 The table summarizes the weighted-average remaining lease term and weighted-average discount rate on long-term leases as follows (in thousands): June 30, 2023 June 30, 2022 Weighted-average remaining lease term - operating leases 7.5 years 5.7 years Weighted-average discount rate - operating leases 4.5 % 4.2 % Supplemental cash flow information related to operating leases is as follows: Cash paid for amounts included in the measurement of lease liabilities $ 1,919 $ 2,253 ROU assets obtained in exchange for new operating lease liabilities $ 14,204 $ 3,716 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | DEBT The following table summarizes the net carrying amount of the Term Loans as of June 30, 2023 and December 31, 2022, net of debt issuance costs (in thousands): June 30, 2023 December 31, 2022 Outstanding principal Debt issuance costs Net carrying amount Outstanding principal Debt issuance costs Net carrying amount Term Loans $ 61,750 $ (576) $ 61,174 $ 63,375 $ (663) $ 62,712 Total debt $ 61,750 $ (576) $ 61,174 $ 63,375 $ (663) $ 62,712 Current portion $ 3,250 $ — $ 3,250 $ 3,250 $ — $ 3,250 Long term 58,500 (576) 57,924 60,125 (663) 59,462 Total debt $ 61,750 $ (576) $ 61,174 $ 63,375 $ (663) $ 62,712 Runway Term Loan Agreement - Runway Growth Credit Finance Corp. On September 30, 2019, the Company entered into a Loan and Security Agreement with Runway Growth Finance Corp. (f/k/a Runway Growth Credit Fund Inc.) ("Runway") which, as subsequently amended, provided for up to $65.0 million of borrowings (as subsequently amended, the "Runway Term Loan"). The Runway Term Loan bore interest at a variable rate equal to LIBOR (at a floor of 0.50%) plus 7.75%. The Runway Term Loan was secured by substantially all of the assets of the Company and required us to comply with various affirmative and negative debt covenants. In connection with the origination of the Runway Term Loan, a warrant for 333,333 Class P Units was issued. The fair value of the warrant was $0.1 million at the time of issuance which was accounted for as a debt origination cost (contra-liability). The Company was required to make interest-only payments on the Runway Term Loan through April 15, 2022, at which time the Runway Term Loan began amortizing, with equal monthly payments of principal, which would have fully amortized the principal amount of the Runway Term Loan by October 15, 2023, plus interest being paid by the Company to Runway in consecutive monthly installments until October 15, 2023. The Runway Term Loan carried a prepayment fee of 3.00% declining to 0.00% based on the anniversary date of payment, and a final payment fee equal to 4.5% of the principal amount repaid upon prepayment, plus $0.2 million. On May 24, 2022, concurrently with entry into the SVB Credit Agreement (as defined below), the Company repaid all outstanding amounts under the Runway Term Loan, totaling $58.2 million with proceeds from the SVB Credit Agreement. In connection with the repayment and termination of the Runway Term Loan, the Company was required to pay a 1.00% prepayment fee, plus a final payment fee. The Runway Term Loan was scheduled to mature on October 15, 2023. As a result of the extinguishment of the Runway Term Loan, the Company recognized a loss on debt extinguishment of $0.6 million associated with the prepayment fee and the write-off of unamortized debt issuance costs. Credit Agreement - Silicon Valley Bank On May 24, 2022 (the "Closing Date"), Brilliant Earth, LLC, as borrower, and Silicon Valley Bank, as administrative agent and collateral agent for the lenders, entered into a credit agreement (the "SVB Credit Agreement") which provides for a secured term loan credit facility of $65.0 million (the "SVB Term Loan Facility") and a secured revolving credit facility in an amount of up to $40.0 million (the "SVB Revolving Credit Facility," and together with the SVB Term Loan Facility, the "SVB Credit Facilities"). The SVB Credit Facilities were used to refinance existing indebtedness, pay related fees and expenses, and will be used from and after the Closing Date for working capital and general corporate purposes. The Credit Facilities mature on May 24, 2027 (the "SVB Maturity Date"). The SVB Credit Facilities are secured by substantially all assets of Brilliant Earth, LLC and any of its future material subsidiaries, subject to customary exceptions. Brilliant Earth, LLC's future material subsidiaries (subject to certain customary exceptions) will guarantee repayment of the SVB Credit Facilities. Borrowings under the SVB Credit Facilities bear interest at either (a) a secured overnight financing rate plus an annual adjustment of 0.125%, plus an applicable margin of 2.25% to 2.75%, depending on the Consolidated Total Leverage Ratio (defined below), or an alternate base rate plus an applicable margin of 1.25% to 1.75%, depending on the Consolidated Total Leverage Ratio, each subject to a 0.00% floor. In addition, Brilliant Earth, LLC has agreed to pay a commitment fee on the first day of each quarter on the unused amount of the SVB Revolving Credit Facility, equal to 0.25% to 0.35% per annum depending on the Consolidated Total Leverage Ratio. The Consolidated Total Leverage Ratio is defined as the ratio, as of the last day of any four fiscal quarter period, of (a) Consolidated Total Indebtedness of the Company and its subsidiaries to (b) the Consolidated EBITDA for such period (each term as further defined in the Credit Agreement). The SVB Term Loan Facility is required to be repaid on the last day of each calendar quarter (commencing on September 30, 2022), in an amount equal to 1.25% per quarter through June 30, 2024, 1.875% per quarter from September 30, 2024 through June 30, 2025, and 2.50% per quarter thereafter, with the balance payable on the SVB Maturity Date. The SVB Term Loan Facility is also subject to certain mandatory prepayment requirements in connection with asset sales, casualty events and debt incurrence, subject to customary exceptions. The SVB Credit Facilities are subject to customary affirmative covenants and negative covenants as well as financial maintenance covenants. The financial covenants are tested at the end of each fiscal quarter, and require that (a) the Company and its subsidiaries not have a Consolidated Fixed Charge Coverage Ratio (defined as the ratio of (i) Consolidated EBITDA, less cash taxes (including tax distributions), less certain capital expenditures, less cash dividends and other cash restricted payments, to (ii) the sum of cash interest expense and scheduled principal payments on outstanding debt (in each case, as further defined in the SVB Credit Agreement)) of less than 1.25 to 1.00, (b) the Company and its subsidiaries not have a Consolidated Total Leverage Ratio of more than 4.00 to 1.00, and (c) Brilliant Earth, LLC and its subsidiaries not have a Consolidated Borrower Leverage Ratio (defined substantially similar as Consolidated Total Leverage Ratio, but limited to Brilliant Earth, LLC and its subsidiaries) in excess of 3.00 to 1.00 (which level is subject to temporary increases to 4.00 to 1.00 in connection with certain acquisitions). As of June 30, 2023 the Company was in compliance with such covenants. At June 30, 2023, deferred issuance costs included in other assets totaled $0.4 million, net of accumulated amortization of $0.1 million. At June 30, 2023, deferred issuance costs included in long-term debt totaled $0.6 million, net of accumulated amortization of $0.2 million. These costs are being amortized to interest expense over the term of the loan. The Company's debt effective interest rate was 8.21% and 7.10% for the three months ended June 30, 2023 and 2022, respectively. Interest expense was $1.2 million, and $1.1 million for the three months ended June 30, 2023 and 2022, respectively; and the amortization of deferred issuance costs was $0.1 million and $0.4 million for the three months ended June 30, 2023 and 2022, respectively. The Company's debt effective interest rate was 7.96% and 9.07% for the six months ended June 30, 2023 and 2022, respectively. Interest expense was $2.4 million and $2.4 million for the six months ended June 30, 2023 and 2022, respectively; and the amortization of deferred issuance costs was $0.1 million and $0.5 million for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, there were no amounts outstanding under the SVB Revolving Credit Facility. On March 10, 2023, SVB was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation ("FDIC") was appointed as receiver. On March 14, 2023, the FDIC announced the establishment of Silicon Valley Bridge Bank, N.A., which assumed the deposits and obligations of SVB. On March 26, 2023, the FDIC announced that it had entered into a purchase and assumption agreement with First-Citizens Bank & Trust Company, Raleigh, North Carolina ("First Citizens") under which all deposits and loans of SVB were assumed by First Citizens. As of June 30, 2023, the aggregate future principal payments under the SVB Term Loan Facility were as follows (in thousands): Principal For the six months ending December 31, 2023 $ 1,625 Years ending December 31, 2024 4,062 2025 5,688 2026 6,500 2027 43,875 Total aggregate future principal payments $ 61,750 |
Equity-Based Compensation
Equity-Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Equity-Based Compensation | EQUITY-BASED COMPENSATION Grants of Restricted Stock Units The following table summarizes the activity related to the Company's restricted stock units ("RSUs") for the six months ended June 30, 2023: Number of RSUs Weighted average grant date fair value Balance as of December 31, 2022, unvested 3,158,686 $ 9.01 Granted 2,128,923 $ 4.58 Vested (664,385) $ 9.04 Forfeited (572,258) $ 7.96 Balance as of June 30, 2023, unvested 4,050,966 $ 6.82 Total compensation expense for RSUs was ap proximately $2.4 million and $4.4 million for the three and six months ended June 30, 2023, respectively, and $1.8 million and $3.2 million for the three and six months ended June 30, 2022, r espectively, and is included in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations. As of June 30, 2023, total compensation cost related to unvested RSUs not yet recognized is $25.6 million and is expected to be recognized over a weighted-average period of approximately 2.9 years. Grants of Stock Options The following table summarizes the activity related to the outstanding and exercisable stock options for the six months ended June 30, 2023: Number of options Weighted average exercise price Weighted average grant date fair value Weighted average remaining contractual term (years) Outstanding as of December 31, 2022 857,615 $ 12.00 $ 4.27 8.7 Forfeited (62,177) $ 12.00 $ 4.29 — Outstanding as of June 30, 2023 795,438 $ 12.00 $ 4.27 8.2 Exercisable as of June 30, 2023 517,283 $ 12.00 $ 4.26 8.2 Unvested as of June 30, 2023 278,155 $ 12.00 $ 4.29 8.2 Vested and expected to vest as of June 30, 2023 795,438 $ 12.00 $ 4.27 8.2 As of June 30, 2023, the vested stock options did not have an aggregated intrinsic value as the exercise price exceeded the estimated fair market value of the stock options. Total compensation expense for stock options was approximately $0.2 million and $0.4 million , for the three and six months ended June 30, 2023, respectively, and $0.3 million and $0.9 million for the three and six months ended June 30, 2022, respectively, and is included in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations. As of June 30, 2023, total compensation cost related to unvested options not yet recognized is $1.2 million and is expected to be recognized over a weighted-average period of approximately 1.7 years. Outstanding Restricted LLC Units The following table summarizes the activity related to the unvested restricted LLC Units for the six months ended June 30, 2023 : Number of restricted LLC Units Weighted average Balance, December 31, 2022, unvested 615,000 $ 0.61 Vested (227,552) $ 0.47 Forfeited (19,950) $ 0.32 Balance, June 30, 2023, unvested 367,498 $ 0.71 Total compensation expense for unvested restricted LLC Units was $0.1 million and $0.1 million for the three and six months ended June 30, 2023, respectively, and $0.1 million and $0.1 million for the three and six months ended June 30, 2022, respectively, and is included in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations. As of June 30, 2023 , total compensation cost related to unvested restricted LLC Units not yet recognized is $0.3 million and is expected to be recognized over a weighted-average period of approximately 1.6 years. |
Income Taxes and Tax Receivable
Income Taxes and Tax Receivable Agreement | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes and Tax Receivable Agreement | INCOME TAXES AND TAX RECEIVABLE AGREEMENT Overview of Income Taxes Brilliant Earth Group, Inc. is taxed as a subchapter C corporation and is subject to federal and state income taxes. Brilliant Earth Group, Inc.'s sole material asset is its ownership interest in Brilliant Earth, LLC, which is a limited liability company that is taxed as a partnership for U.S. federal and certain state and local income tax purposes. Brilliant Earth, LLC's net taxable income or loss and related tax credits, if any, are passed through to its members on a pro-rata basis and included in the member's tax returns. The income tax burden on the earnings taxed to the non-controlling interest holders is not reported by the Company in its unaudited condensed consolidated financial statements under U.S. GAAP. The Company files U.S. federal and certain state income tax returns. The income tax returns of the Company are subject to examination by U.S. federal and state taxing authorities for various time periods, depending on those jurisdictions' rules, generally after the income tax returns are filed. Tax Provision and Deferred Tax Asset In calculating the provision for interim income taxes in accordance with ASC Topic 740, Income Taxes , an estimated annual effective tax rate is applied to year-to-date ordinary income. At the end of each interim period, Brilliant Earth Group, Inc. estimates the effective tax rate expected to be applicable for the full fiscal year. This differs from the method utilized at the end of an annual period. The Company's effective tax rate of 2.97% for the six months ended June 30, 2023, differs from the U.S. federal statutory tax rate of 21% primarily due to income associated with the non-controlling interest, state tax expense and other permanent items. The Company recorded net increases in deferred tax assets of $0.4 million during the six months ended June 30, 2023, with a corresponding increase to additional paid in capital, resulting from changes in the outside basis difference on Brilliant Earth's investment in LLC. The Company has determined it is more-likely-than-not that it will be able to realize this deferred tax asset in the future. The Company's income tax provision was less than $0.1 million for both the three and six months ended June 30, 2023, respectively, and $0.1 million and $0.2 million for the three and six months ended June 30, 2022, respectively. Tax Receivable Agreement As each of the Continuing Equity Owners elect to convert their LLC Interests into Class A common stock or Class D common stock, as applicable, Brilliant Earth Group, Inc. will succeed to their aggregate historical tax basis which will create a net tax benefit to the Company. These tax benefits are expected to be amortized over 15 years pursuant to Sections 743(b) and 197 of the Code. The Company will only recognize a deferred tax asset for financial reporting purposes when it is "more-likely-than-not" that the tax benefit will be realized. In addition, as part of the IPO, the Company entered into a tax receivable agreement (the "TRA") with the Continuing Equity Owners to pay 85% of the tax savings from the tax basis adjustment to them as such savings are realized. Amounts payable under the TRA are contingent upon, among other things, generation of sufficient future taxable income during the term of the TRA. The amounts to be recorded for both the deferred tax assets and the liability for our obligations under the TRA will be estimated at the time of any purchase or redemption as a reduction to shareholders' equity, and the effects of changes in any of our estimates after this date will be included in net income. Similarly, the effect of subsequent changes in the enacted tax rates will be included in net income. As of June 30, 2023 , related to the TRA, the Company has recorded (i) a deferred tax asset in the amount of $9.4 million, (ii) a corresponding estimated liability with a balance of $7.9 million representing 85% of the projected tax benefits to the Continuing Equity Owners; and (iii) $1.5 million of additional paid-in capital. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Legal Proceedings In the ordinary course of business, the Company may be subject from time to time to various proceedings, lawsuits, disputes or claims. In addition, the Company is regularly audited by various tax authorities. Although the Company cannot predict with assurance the outcome of any litigation or audit, it does not believe there are currently any such actions that, if resolved unfavorably, would have a material impact on the Company's financial condition, results of operations or cash flows. The Company accrues for loss contingencies when losses become probable and are reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. The Company does not accrue for contingent losses that, in its judgment, are considered to be reasonably possible, but not probable; however, to the extent possible, the Company discloses the range of such reasonably possible losses. On December 5, 2022, plaintiff Veronica Cusimano, a former employee of the Company, filed a representative action against the Company pursuant to the Private Attorneys General Act of 2004 in California Superior Court, Los Angeles County. The complaint alleges, on behalf of the plaintiff and similarly situated employees and former employees in California, various claims under the California Labor Code related to wages, overtime, meal and rest breaks, reimbursement of business expenses, wage statements and records, and other similar allegations. The plaintiff seeks civil penalties, attorneys' fees and costs in unspecified amounts, and other unspecified damages. On February 10, 2023, the Company filed a petition to compel arbitration on the basis of an agreement between the plaintiff and the Company to arbitrate any claims between them. On April 28, 2023, the petition was denied. The Company intends to vigorously defend the alleged individual and representative claims, and, on May 9, 2023, the Company appealed the Superior Court's denial of its petition to compel arbitration to the California Court of Appeal, Second Appellate District. At this time, any liability related to the alleged claims is not currently probable or reasonably estimable. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and the requirements of the Securities and Exchange Commission (the "SEC") for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2023, or for any other interim period or for any other future year. The condensed consolidated balance sheet as of December 31, 2022 has been derived from the audited consolidated financial statements of the Company, which are included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 (the "2022 Form 10-K"). In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments consisting only of normal recurring adjustments necessary to state fairly the financial position, results of operations and cash flows for the periods presented in conformity with U.S. GAAP applicable to interim periods. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2022, as disclosed in the 2022 Form 10-K |
Principles of Consolidation and non-controlling interest | The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary, Brilliant Earth, LLC, which it controls due to ownership of the voting interest or pursuant to variable interest entity ("VIE") accounting guidance. All intercompany balances and transactions have been eliminated in consolidation. The non-controlling interest on the unaudited condensed consolidated statements of operations represents the portion of earnings or loss attributable to the economic interest in Brilliant Earth, LLC held |
Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Some of the more significant estimates include inventory valuation, allowance for sales returns, estimates of current and deferred income taxes, payable pursuant to the tax receivable agreement, useful lives and depreciation of long-lived assets, and fair value of equity-based compensation. Actual results could differ materially from those estimates. On an ongoing basis, the Company reviews its estimates to ensure that they appropriately reflect changes in its business or new information available. |
Fair Value Measurements | Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. U.S. GAAP prescribes three levels of inputs that may be used to measure fair value: Level 1 Valuation based on quoted prices (unadjusted) observed in active markets for identical assets or liabilities. Level 2 Valuation techniques based on inputs that are quoted prices of similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not in active markets; inputs other than quoted prices used in a valuation model that are observable for that instrument; and inputs that are derived from, or corroborated by, observable market data by correlation or other means. Level 3 Valuation techniques with significant unobservable market inputs. The Company is required to disclose its estimate of the fair value of material financial instruments, including those recorded as assets or liabilities in its financial statements, in accordance with U.S. GAAP. At June 30, 2023 and December 31, 2022, there were no financial instruments (assets or liabilities) measured at fair value on a recurring basis. The carrying amounts of cash and cash equivalents, restricted cash, accounts payable and accrued expenses and other current liabilities approximate fair value due to their short-term maturities and were |
Recent Accounting Pronouncements | The Company has considered all recent accounting pronouncements issued, but not yet effective, and does not expect any to have a material effect on the Company’s condensed consolidated financial statements. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Basic and diluted earnings per share of common stock for the three and six months ended June 30, 2023 and 2022 have been computed as follows (in thousands, except share and per share amounts): Three Months Ended June 30, Six Months Ended June 30, Numerator: 2023 2022 2023 2022 Net income attributable to Brilliant Earth Group, Inc., BASIC $ 148 $ 424 $ 96 $ 780 Add: Net income impact from assumed redemption of all LLC Units to common stock 1,087 3,327 699 6,340 Less: Income tax expense on net income attributable to NCI (281) (850) (181) (1,603) Net income attributable to Brilliant Earth Group, Inc., after adjustment for assumed conversion, DILUTED $ 954 $ 2,901 $ 614 $ 5,517 Denominator: Weighted average shares of common stock outstanding, BASIC 11,796,639 10,810,627 11,593,416 10,412,922 Dilutive effects of: Vested LLC Units that are exchangeable for common stock 84,638,225 84,404,337 84,628,063 84,630,379 Unvested LLC Units that are exchangeable for common stock 378,310 929,489 439,436 1,276,767 RSUs and stock options 76,680 64,249 159,370 66,794 Weighted average shares of common stock outstanding, DILUTED 96,889,854 96,208,702 96,820,285 96,386,862 BASIC earnings per share $ 0.01 $ 0.04 $ 0.01 $ 0.07 DILUTED earnings per share $ 0.01 $ 0.03 $ 0.01 $ 0.06 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents the shares underlying stock options and RSUs for the three and six months ended June 30, 2023 and 2022 that have been excluded from the computation of earnings per share because such impact is anti-dilutive: Three Months Ended Six Months Ended 2023 2022 2023 2022 RSUs 3,524,279 2,369,323 2,896,832 1,990,846 Stock options 799,329 1,132,666 815,650 1,316,755 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table discloses total net sales by geography for the three and six months ended June 30, 2023 and 2022 (in thousands): For the Three Months Ended For the Six Months Ended June 30, 2023 2022 2023 2022 United States $ 104,854 $ 102,232 $ 197,469 $ 195,998 International 5,330 6,577 10,413 12,849 Total net sales $ 110,184 $ 108,809 $ 207,882 $ 208,847 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net | Inventories, net consist of the following (in thousands): June 30, December 31, 2023 2022 Loose diamonds $ 11,507 $ 11,894 Fine jewelry and other 28,269 27,744 Allowance for inventory obsolescence (363) (307) Total inventories, net $ 39,413 $ 39,331 The allowance for inventory obsolescence consists of the following (in thousands): June 30, June 30, 2023 2022 Balance at beginning of period $ (307) $ (260) Change in allowance for inventory obsolescence (56) 57 Balance at end of period $ (363) $ (203) |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses and other current liabilities consist of the following (in thousands): June 30, December 31, 2023 2022 Vendor expenses $ 12,122 $ 14,769 Inventory received not billed 9,736 7,973 Payroll expenses 3,923 5,301 Sales and other tax payable 3,002 4,137 Provision for sales returns and allowances 1,599 2,332 Current portion of TRA — 502 Other 3,781 2,819 Total accrued expenses and other current liabilities $ 34,163 $ 37,833 |
Schedule of Accrued Expenses And Other Current Liabilities Provision For Sales Returns | Activity for the six months ended June 30, 2023 and 2022 was as follows (in thousands): June 30, June 30, 2023 2022 Balance at beginning of period $ 2,332 $ 2,338 Provision 10,133 10,817 Returns and allowances (10,866) (11,609) Balance at end of period $ 1,599 $ 1,546 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Total Operating Lease ROU Assets and Lease Liabilities | Total operating lease ROU assets and lease liabilities were as follows (in thousands): Assets Classification As of June 30, 2023 As of June 30, 2022 Operating ROU assets at cost Operating lease right of use assets $ 43,930 $ 22,889 Accumulated amortization Operating lease right of use assets (5,597) (1,462) Net book value $ 38,333 $ 21,427 Liabilities Classification As of June 30, 2023 As of June 30, 2022 Current: Operating leases Current portion of operating lease liabilities $ 4,983 $ 3,025 Noncurrent: Operating leases Operating lease liabilities 39,712 21,399 Total lease liabilities $ 44,695 $ 24,424 |
Additional Lease Information | Total operating lease costs were as follows (in thousands): Classification For the three months ended June 30, 2023 For the three months ended June 30, 2022 For the six months ended June 30, 2023 For the six months ended June 30, 2022 Operating lease costs Selling, general and administrative expense $ 1,799 $ 1,054 $ 3,352 $ 1,978 Variable lease costs Selling, general and administrative expense 327 — 592 — Total lease costs $ 2,126 $ 1,054 $ 3,944 $ 1,978 The table summarizes the weighted-average remaining lease term and weighted-average discount rate on long-term leases as follows (in thousands): June 30, 2023 June 30, 2022 Weighted-average remaining lease term - operating leases 7.5 years 5.7 years Weighted-average discount rate - operating leases 4.5 % 4.2 % Supplemental cash flow information related to operating leases is as follows: Cash paid for amounts included in the measurement of lease liabilities $ 1,919 $ 2,253 ROU assets obtained in exchange for new operating lease liabilities $ 14,204 $ 3,716 |
Schedule of Future Minimum Lease Payments Under Long-term Non-cancelable Operating Leases | The maturity analysis of the operating lease liabilities as of June 30, 2023 was as follows (in thousands): Amount For the six months ending December 31, 2023 $ 3,025 Years ending December 31, 2024 7,718 2025 7,768 2026 7,523 2027 6,135 2028 5,125 Thereafter 16,119 Total minimum lease payments 53,413 Less: imputed interest (8,718) Net present value of operating lease liabilities 44,695 Less: current portion (4,983) Long-term portion $ 39,712 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table summarizes the net carrying amount of the Term Loans as of June 30, 2023 and December 31, 2022, net of debt issuance costs (in thousands): June 30, 2023 December 31, 2022 Outstanding principal Debt issuance costs Net carrying amount Outstanding principal Debt issuance costs Net carrying amount Term Loans $ 61,750 $ (576) $ 61,174 $ 63,375 $ (663) $ 62,712 Total debt $ 61,750 $ (576) $ 61,174 $ 63,375 $ (663) $ 62,712 Current portion $ 3,250 $ — $ 3,250 $ 3,250 $ — $ 3,250 Long term 58,500 (576) 57,924 60,125 (663) 59,462 Total debt $ 61,750 $ (576) $ 61,174 $ 63,375 $ (663) $ 62,712 |
Schedule of Maturities of Long-term Debt | As of June 30, 2023, the aggregate future principal payments under the SVB Term Loan Facility were as follows (in thousands): Principal For the six months ending December 31, 2023 $ 1,625 Years ending December 31, 2024 4,062 2025 5,688 2026 6,500 2027 43,875 Total aggregate future principal payments $ 61,750 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Nonvested Share Activity | The following table summarizes the activity related to the Company's restricted stock units ("RSUs") for the six months ended June 30, 2023: Number of RSUs Weighted average grant date fair value Balance as of December 31, 2022, unvested 3,158,686 $ 9.01 Granted 2,128,923 $ 4.58 Vested (664,385) $ 9.04 Forfeited (572,258) $ 7.96 Balance as of June 30, 2023, unvested 4,050,966 $ 6.82 |
Schedule of Stock Options Roll Forward | The following table summarizes the activity related to the outstanding and exercisable stock options for the six months ended June 30, 2023: Number of options Weighted average exercise price Weighted average grant date fair value Weighted average remaining contractual term (years) Outstanding as of December 31, 2022 857,615 $ 12.00 $ 4.27 8.7 Forfeited (62,177) $ 12.00 $ 4.29 — Outstanding as of June 30, 2023 795,438 $ 12.00 $ 4.27 8.2 Exercisable as of June 30, 2023 517,283 $ 12.00 $ 4.26 8.2 Unvested as of June 30, 2023 278,155 $ 12.00 $ 4.29 8.2 Vested and expected to vest as of June 30, 2023 795,438 $ 12.00 $ 4.27 8.2 |
Schedule of Activity Related to the Unvested LLC Units | The following table summarizes the activity related to the unvested restricted LLC Units for the six months ended June 30, 2023 : Number of restricted LLC Units Weighted average Balance, December 31, 2022, unvested 615,000 $ 0.61 Vested (227,552) $ 0.47 Forfeited (19,950) $ 0.32 Balance, June 30, 2023, unvested 367,498 $ 0.71 Total compensation expense for unvested restricted LLC Units was $0.1 million and $0.1 million for the three and six months ended June 30, 2023, respectively, and $0.1 million and $0.1 million for the three and six months ended June 30, 2022, respectively, and is included in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations. As of June 30, 2023 , total compensation cost related to unvested restricted LLC Units not yet recognized is $0.3 million and is expected to be recognized over a weighted-average period of approximately 1.6 years. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Details) | Jun. 30, 2023 showroom |
Noncontrolling Interest [Line Items] | |
Number of showrooms | 32 |
Brilliant Earth, LLC | |
Noncontrolling Interest [Line Items] | |
Noncontrolling interest, ownership percentage | 87.60% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net income attributable to Brilliant Earth Group, Inc., BASIC | $ 148 | $ 424 | $ 96 | $ 780 |
Add: Net income impact from assumed redemption of all LLC Units to common stock | 1,087 | 3,327 | 699 | 6,340 |
Less: Income tax expense on net income attributable to NCI | (281) | (850) | (181) | (1,603) |
Net income attributable to Brilliant Earth Group, Inc., after adjustment for assumed conversion, DILUTED | $ 954 | $ 2,901 | $ 614 | $ 5,517 |
Weighted average shares of common stock outstanding, BASIC (in shares) | 11,796,639 | 10,810,627 | 11,593,416 | 10,412,922 |
Weighted average shares of common stock outstanding, DILUTED (in shares) | 96,889,854 | 96,208,702 | 96,820,285 | 96,386,862 |
BASIC earnings per share (in dollars per share) | $ 0.01 | $ 0.04 | $ 0.01 | $ 0.07 |
DILUTED earnings per share (in dollars per share) | $ 0.01 | $ 0.03 | $ 0.01 | $ 0.06 |
Vested LLC Units that are exchangeable for common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Dilutive effects (in shares) | 84,638,225 | 84,404,337 | 84,628,063 | 84,630,379 |
Unvested LLC Units that are exchangeable for common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Dilutive effects (in shares) | 378,310 | 929,489 | 439,436 | 1,276,767 |
RSUs and stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Dilutive effects (in shares) | 76,680 | 64,249 | 159,370 | 66,794 |
RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded (in shares) | 3,524,279 | 2,369,323 | 2,896,832 | 1,990,846 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded (in shares) | 799,329 | 1,132,666 | 815,650 | 1,316,755 |
Revenue from Contract with Cust
Revenue from Contract with Customer - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 110,184 | $ 108,809 | $ 207,882 | $ 208,847 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 104,854 | 102,232 | 197,469 | 195,998 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 5,330 | $ 6,577 | $ 10,413 | $ 12,849 |
Revenue from Contract with Cu_2
Revenue from Contract with Customer- Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||||
Extended service plan period | 3 years | |||
Deferred revenue | $ 22,300 | $ 18,600 | ||
Contract with customer, liability, noncurrent | 100 | 100 | ||
Revenue recognized | 17,800 | $ 18,100 | ||
Provision for sales returns and allowances | 1,599 | $ 1,546 | 2,332 | $ 2,338 |
Refund assets | $ 600 | $ 900 |
Inventories, Net - Schedule of
Inventories, Net - Schedule of Inventories, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory [Line Items] | ||||
Allowance for inventory obsolescence | $ (363) | $ (307) | $ (203) | $ (260) |
Total inventories, net | 39,413 | 39,331 | ||
Loose diamonds | ||||
Inventory [Line Items] | ||||
Inventory, gross | 11,507 | 11,894 | ||
Fine jewelry and other | ||||
Inventory [Line Items] | ||||
Inventory, gross | $ 28,269 | $ 27,744 |
Inventories, Net - Allowance fo
Inventories, Net - Allowance for Inventory Obsolescence (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Inventory Valuation Reserves [Roll Forward] | ||
Balance at beginning of period | $ (307) | $ (260) |
Change in allowance for inventory obsolescence | (56) | 57 |
Balance at end of period | $ (363) | $ (203) |
Inventories, Net - Narratives (
Inventories, Net - Narratives (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Consigned inventory | $ 23 | $ 27.6 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Accrued Expenses And Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||||
Vendor expenses | $ 12,122 | $ 14,769 | ||
Inventory received not billed | 9,736 | 7,973 | ||
Payroll expenses | 3,923 | 5,301 | ||
Sales and other tax payable | 3,002 | 4,137 | ||
Provision for sales returns and allowances | 1,599 | 2,332 | $ 1,546 | $ 2,338 |
Current portion of TRA | 0 | 502 | ||
Other | 3,781 | 2,819 | ||
Total accrued expenses and other current liabilities | $ 34,163 | $ 37,833 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities - Accrued Expenses and Other Current Liabilities is a Provision For Sales Returns (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Contract with Customer, Refund Liability [Roll Forward] | ||
Balance at beginning of period | $ 2,332 | $ 2,338 |
Provision | 10,133 | 10,817 |
Returns and allowances | (10,866) | (11,609) |
Balance at end of period | $ 1,599 | $ 1,546 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Jun. 30, 2023 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Term of contracts | 5 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Term of contracts | 10 years |
Leases - Total Operating Lease
Leases - Total Operating Lease Right-of-Use Assets and Operating Lease Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Assets | |||||
Operating ROU assets at cost | $ 43,930 | $ 22,889 | $ 43,930 | $ 22,889 | |
Accumulated amortization | (5,597) | (1,462) | (5,597) | (1,462) | |
Net book value | 38,333 | 21,427 | 38,333 | 21,427 | $ 27,812 |
Liabilities | |||||
Less: current portion | 4,983 | 3,025 | 4,983 | 3,025 | 3,873 |
Long-term portion | 39,712 | 21,399 | 39,712 | 21,399 | $ 28,537 |
Net present value of operating lease liabilities | 44,695 | 24,424 | 44,695 | 24,424 | |
Income and Expenses | |||||
Operating lease costs | 1,799 | 1,054 | 3,352 | 1,978 | |
Variable lease costs | 327 | 0 | 592 | 0 | |
Total lease costs | $ 2,126 | $ 1,054 | $ 3,944 | $ 1,978 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments Under Long-term Non-cancelable Operating Leases (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Leases [Abstract] | |||
For the six months ending December 31, 2023 | $ 3,025 | ||
2024 | 7,718 | ||
2025 | 7,768 | ||
2026 | 7,523 | ||
2027 | 6,135 | ||
2028 | 5,125 | ||
Thereafter | 16,119 | ||
Total minimum lease payments | 53,413 | ||
Less: imputed interest | (8,718) | ||
Net present value of operating lease liabilities | 44,695 | $ 24,424 | |
Less: current portion | (4,983) | $ (3,873) | (3,025) |
Long-term portion | $ 39,712 | $ 28,537 | $ 21,399 |
Leases - Weighted Average Remai
Leases - Weighted Average Remaining Lease Term and Weighted Average Discount Rate (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Leases [Abstract] | ||
Weighted-average remaining lease term - operating leases | 7 years 6 months | 5 years 8 months 12 days |
Weighted-average discount rate - operating leases | 4.50% | 4.20% |
Cash paid for amounts included in the measurement of lease liabilities | $ 1,919 | $ 2,253 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 14,204 | $ 3,716 |
Long-Term Debt - Term Loan (Det
Long-Term Debt - Term Loan (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Outstanding principal | $ 61,750 | $ 63,375 |
Debt issuance costs | (576) | (663) |
Net carrying amount | 61,174 | 62,712 |
Current portion | 3,250 | 3,250 |
Long term outstanding principal | 58,500 | 60,125 |
Long term net carrying amount | 57,924 | 59,462 |
Secured Debt | Term Loan Agreement | ||
Debt Instrument [Line Items] | ||
Outstanding principal | 61,750 | 63,375 |
Debt issuance costs | (576) | (663) |
Net carrying amount | $ 61,174 | $ 62,712 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
May 24, 2022 | Sep. 30, 2019 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Debt Instrument [Line Items] | ||||||
Debt instrument, final prepayment fee, percent | 4.50% | |||||
Early repayment of senior debt | $ 0 | $ 58,158,000 | ||||
Loss on extinguishment of debt | $ 0 | $ (617,000) | 0 | (617,000) | ||
Quarterly payment percent, period one | 1.25% | |||||
Quarterly payment percent, period two | 1.875% | |||||
Quarterly payment percent, period three | 2.50% | |||||
Accumulated amortization, debt issuance costs | (100,000) | (100,000) | ||||
Accumulated amortization, debt issuance costs, noncurrent | (200,000) | (200,000) | ||||
Amortization of debt issuance costs | 100,000 | $ 400,000 | 134,000 | $ 452,000 | ||
Long term line of credit | 0 | 0 | ||||
Class P Warrants | ||||||
Debt Instrument [Line Items] | ||||||
Number of securities called by warrants (in shares) | 333,333 | |||||
Warrant liability, fair value disclosure | $ 100,000 | |||||
Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 40,000,000 | |||||
Debt issuance costs, noncurrent, net | 400,000 | 400,000 | ||||
Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 65,000,000 | |||||
Fixed charge coverage ratio | 125% | |||||
Consolidated rotal leverage ratio | 400% | |||||
Consolidated borrower leverage ratio | 300% | |||||
Temporary increase to the consolidated borrower leverage ratio | 400% | |||||
Debt issuance costs, noncurrent, net | $ 600,000 | $ 600,000 | ||||
Secured Debt | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Commitment fee percentage | 0.35% | |||||
Secured Debt | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Commitment fee percentage | 0.25% | |||||
Secured Debt | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||||
Debt Instrument [Line Items] | ||||||
Annual adjustment percent | 0.125% | |||||
Secured Debt | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.75% | |||||
Secured Debt | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.25% | |||||
Secured Debt | Alternative Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0% | |||||
Secured Debt | Alternative Base Rate | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.75% | |||||
Secured Debt | Alternative Base Rate | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.25% | |||||
Secured Debt | Runway Term Loan Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 65,000,000 | |||||
Debt instrument, final prepayment fee, percent | 1% | |||||
Early repayment of senior debt | $ 58,200,000 | |||||
Loss on extinguishment of debt | $ 600,000 | |||||
Secured Debt | Runway Term Loan Agreement | London Interbank Offered Rate | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate floor | 0.50% | |||||
Basis spread on variable rate | 7.75% | |||||
Secured Debt | Term Loan Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, final prepayment fee | $ 200,000 | |||||
Interest rate during period | 8.21% | 7.10% | 7.96% | 9.07% | ||
Interest expense, debt | $ 1,200,000 | $ 1,100,000 | $ 2,400,000 | $ 2,400,000 | ||
Secured Debt | Term Loan Agreement | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment fee, percent | 0.0003% | |||||
Secured Debt | Term Loan Agreement | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment fee, percent | 0% |
Long-Term Debt - Debt Maturity
Long-Term Debt - Debt Maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Outstanding principal | $ 61,750 | $ 63,375 |
Secured Debt | Term Loan Agreement | ||
Debt Instrument [Line Items] | ||
For the six months ending December 31, 2023 | 1,625 | |
2024 | 4,062 | |
2025 | 5,688 | |
2026 | 6,500 | |
2027 | 43,875 | |
Outstanding principal | $ 61,750 | $ 63,375 |
Equity-Based Compensation - Nar
Equity-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Option, cost not yet recognized | $ 1.2 | $ 1.2 | ||
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 2.4 | $ 1.8 | 4.4 | $ 3.2 |
Unamortized compensation cost | 25.6 | $ 25.6 | ||
Cost not yet recognized, period for recognition | 2 years 10 months 24 days | |||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 0.2 | 0.3 | $ 0.4 | 0.9 |
Cost not yet recognized, period for recognition | 1 year 8 months 12 days | |||
LLC Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unamortized compensation cost | 0.3 | $ 0.3 | ||
Cost not yet recognized, period for recognition | 1 year 7 months 6 days | |||
LLC Units | Selling, General and Administrative Expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
Equity-Based Compensation - RSU
Equity-Based Compensation - RSU Activity (Details) - RSUs | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Number of RSUs | |
Unvested, beginning balance (in shares) | shares | 3,158,686 |
Grants in period (in shares) | shares | 2,128,923 |
Vested (in shares) | shares | (664,385) |
Forfeited (in shares) | shares | (572,258) |
Unvested, ending balance (in shares) | shares | 4,050,966 |
Weighted average grant date fair value | |
Unvested beginning balance (in dollars per share) | $ / shares | $ 9.01 |
Granted (in dollars per share) | $ / shares | 4.58 |
Vested (in dollars per share) | $ / shares | 9.04 |
Forfeited (in dollars per share) | $ / shares | 7.96 |
Unvested ending balance (in dollars per share) | $ / shares | $ 6.82 |
Equity-Based Compensation - Sto
Equity-Based Compensation - Stock Option Activity (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Number of options | ||
Outstanding as of December 31, 2022 (in shares) | 857,615 | |
Forfeited (in shares) | (62,177) | |
Outstanding as of June 30, 2023 (in shares) | 795,438 | 857,615 |
Weighted average exercise price | ||
Outstanding as of December 31, 2022 (in dollars per share) | $ 12 | |
Forfeited (in dollars per share) | 12 | |
Outstanding as of March 31, 2023 (in dollars per share) | 12 | $ 12 |
Weighted average exercise price | ||
Outstanding as of December 31, 2022 (in dollars per share) | 4.27 | |
Forfeited (in dollars per share) | 4.29 | |
Outstanding as of June 30, 2023 (in dollars per share) | $ 4.27 | $ 4.27 |
Weighted average remaining contractual term (years) | ||
Weighted average remaining contractual term | 8 years 2 months 12 days | 8 years 8 months 12 days |
Weighted average remaining contractual term, exercisable | 8 years 2 months 12 days | |
Weighted average remaining contractual term, Unvested | 8 years 2 months 12 days | |
Weighted average remaining contractual term, vested and expected to vest | 8 years 2 months 12 days | |
Options, Vested and Expected to Vest | ||
Options exercisable (in shares) | 517,283 | |
Options unvested (in shares) | 278,155 | |
Options, vested and expected to vest (in shares) | 795,438 | |
Options exercisable, weighted average exercise price (in dollars per share) | $ 12 | |
Options unvested, weighted average exercise price (in dollars per share) | 12 | |
Vested and expected to vest, weighted average exercise price (in dollars per share) | 12 | |
Options exercisable, weighted average grant date fair value (in dollars per share) | 4.26 | |
Options unvested, weighted average grant date fair value (in dollars per share) | 4.29 | |
Options vested and expected to vest, weighted average grant date fair value (in dollars per share) | $ 4.27 |
Equity-Based Compensation - LLC
Equity-Based Compensation - LLC Unit Activity (Details) - LLC Units | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Number of restricted LLC Units | |
Unvested, beginning balance (in shares) | shares | 615,000 |
Vested (in shares) | shares | (227,552) |
Forfeited (in shares) | shares | (19,950) |
Unvested, ending balance (in shares) | shares | 367,498 |
Weighted average grant date fair value | |
Unvested beginning balance (in dollars per share) | $ / shares | $ 0.61 |
Vested (in dollars per share) | $ / shares | 0.47 |
Forfeited (in dollars per share) | $ / shares | 0.32 |
Unvested ending balance (in dollars per share) | $ / shares | $ 0.71 |
Income Taxes and Tax Receivab_2
Income Taxes and Tax Receivable Agreement - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Contingency [Line Items] | ||||
Effective income tax rate | 2.97% | |||
Changes in outside basis difference | $ 400 | $ 400 | ||
Income tax expense | $ 37 | $ 113 | $ 24 | $ 209 |
Tax benefit distributions to noncontrolling interest holders, percent | 85% | 85% | ||
Deferred tax assets related to tax receivable agreement | $ 9,400 | $ 9,400 | ||
Tax receivable agreement liability | 7,900 | 7,900 | ||
Tax receivable agreement, recognition in additional-paid-in-capital | 1,500 | 1,500 | ||
Maximum | ||||
Income Tax Contingency [Line Items] | ||||
Income tax expense | $ 100 | $ 100 |