What changed in this filing

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Item 1. Financial Statements

2024-08-09 compared with 2024-05-10 · 255 added, 168 removed, 470 unchanged (47% of the section changed)

30 unchanged sentences

Common stock, $ 0.0001 par value, 3,290,000,000 shares authorized;

323,894,143 and 322,235,261 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

323,020,596 and 322,235,261 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Additional paid in capital

3 unchanged sentences

Treasury stock, at cost;

6,600,075 and 3,600,075 shares as of March 31, 2024 and December 31, 2023, respectively

8,875,170 and 3,600,075 shares as of June 30, 2024 and December 31, 2023, respectively

Total equity attributable to stockholders of Advantage Solutions Inc.

Nonredeemable noncontrolling interest

Noncontrolling interest

Total stockholders’ equity

Total liabilities, redeemable noncontrolling interest, and stockholders’ equity

Total liabilities, noncontrolling interest, and stockholders’ equity

See Notes to the Condensed Consolidated Financial Statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands, except share and per share data)

1 unchanged sentence

Selling, general, and administrative expenses

Impairment of goodwill

Depreciation and amortization

Income from unconsolidated investments

(Income) loss from unconsolidated investments

Total operating expenses

Operating (loss) income from continuing operations

Other expenses (income):

Other (income) expenses:

Change in fair value of warrant liability

5 unchanged sentences

Net income (loss) from discontinued operations, net of tax

net income from continuing operations attributable to noncontrolling interest

net income (loss) from discontinued operations attributable to noncontrolling interest

1 unchanged sentence

Net loss per common share:

Basic net loss per common share from continuing operations

Basic net income (loss) per common share from discontinued operations

Basic net loss per common share attributable to stockholders of Advantage Solutions Inc.

Basic loss per common share from continuing operations

Basic earnings (loss) per common share from discontinued operations

Basic loss per common share attributable to stockholders of Advantage Solutions Inc.

Diluted net loss per share:

Diluted net loss per common share from continuing operations

Diluted net income (loss) per common share from discontinued operations

Diluted net loss per common share attributable to stockholders of Advantage Solutions Inc.

Diluted loss per common share from continuing operations

Diluted earnings (loss) per common share from discontinued operations

Diluted loss per common share attributable to stockholders of Advantage Solutions Inc.

Weighted-average number of common shares:

1 unchanged sentence

Net loss attributable to stockholders of Advantage Solutions Inc.

Other comprehensive loss, net of tax:

Other comprehensive income, net of tax:

Foreign currency translation adjustments

5 unchanged sentences

Solutions Inc.

Nonredeemable

Comprehensive

4 unchanged sentences

Income (Loss)

Balance at April 1, 2024

Comprehensive (loss) income

Foreign currency translation adjustments

Total comprehensive (loss) income

Interest on loans to Karman Topco L.P.

Purchase of treasury stock

Equity-based compensation of Karman Topco L.P.

Payments for taxes related to net share settlement under 2020 Incentive Award Plan

Shares issued under 2020 Incentive Award Plan

Sale of a business

Stock-based compensation expense

Balance at June 30, 2024

Treasury Stock

Solutions Inc.

Comprehensive

Stockholders'

Noncontrolling

Stockholders'

(in thousands, except share data)

Income (Loss)

Balance at April 1, 2023

Comprehensive (loss) income

Net (loss) income

Foreign currency translation adjustments

Total comprehensive (loss) income

Interest on loans to Karman Topco L.P.

Equity-based compensation of Karman Topco L.P.

Shares issued under 2020 Incentive Award Plan

Stock-based compensation expense

Balance at June 30, 2023

See Notes to the Condensed Consolidated Financial Statements.

Treasury Stock

Solutions Inc.

Comprehensive

Stockholders'

Noncontrolling

Stockholders'

(in thousands, except share data)

Income (Loss)

Balance at January 1, 2024

9 unchanged sentences

Shares issued under 2020 Incentive Award Plan

Sale of a business

Stock-based compensation expense

Balance at March 31, 2024

Balance at June 30, 2024

Solutions Inc.

Nonredeemable

Treasury Stock

7 unchanged sentences

Comprehensive (loss) income

Net (loss) income

Foreign currency translation adjustments

6 unchanged sentences

Stock-based compensation expense

Balance at March 31, 2023

Balance at June 30, 2023

See Notes to the Condensed Consolidated Financial Statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

4 unchanged sentences

Noncash interest income

Deferred financing fees related to repricing of long-term debt

Amortization of deferred financing fees

Impairment of goodwill

Depreciation and amortization

4 unchanged sentences

Stock-based compensation

Equity in earnings of unconsolidated affiliates

Loss from unconsolidated investments

Distribution received from unconsolidated affiliates

Gain on repurchases of Senior Secured Notes

Gain on disposal of property and equipment

Changes in operating assets and liabilities, net of effects from divestitures and purchases of businesses:

Gain on repurchases of Senior Secured Notes and Term Loan Facility debt

Changes in operating assets and liabilities, net of effects from divestitures:

Accounts receivable, net

4 unchanged sentences

Other accrued expenses and other liabilities

Net cash (used in) provided by operating activities from continuing operations

Net cash provided by operating activities from continuing operations

Net cash provided by operating activities from discontinued operations

Net cash (used in) provided by operating activities

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

1 unchanged sentence

Purchase of property and equipment

Proceeds from divestitures

Proceeds from divestitures, net of cash

Net cash provided by (used in) investing activities from continuing operations

6 unchanged sentences

Repurchases of Senior Secured Notes and Term Loan Facility debt

Debt issuance costs

Proceeds from issuance of common stock

2 unchanged sentences

Holdback payments

Redemption of noncontrolling interest

Purchase of treasury stock

Net cash used in financing activities from continuing operations

Net cash used in financing activities from discontinued operations

Net cash (used in) provided by financing activities from discontinued operations

Net cash used in financing activities

21 unchanged sentences

The Condensed Consolidated Balance Sheet at December 31, 2023 was derived from the audited Consolidated Balance Sheet at that date and does not include all the disclosures required by GAAP.

In the opinion of management, all adjustments which are of a normal recurring nature and necessary for a fair statement of the results as of March 31, 2024 and for the three months ended March 31, 2024 and 2023 have been reflected in the condensed consolidated financial statements.

In the opinion of management, all adjustments which are of a normal recurring nature and necessary for a fair statement of the results as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 have been reflected in the condensed consolidated financial statements.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2023 and the related footnotes thereto.

Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period.

As of March 31, 2024, the Company determined that certain businesses that have been disposed of and businesses classified as held for sale as of March 31, 2024 met the criteria for discontinued operations presentation.

For all periods presented, the operating results associated with the businesses disposed of and classified as held for sale have been reclassified into net income (loss) from discontinued operations, net of income taxes and net income (loss) from discontinued operations attributable to non-controlling interest in the Consolidated Statements of Operations.

The assets and liabilities associated with these businesses have been reflected as current and long-term assets and liabilities of discontinued operations in the Consolidated Balance Sheets, and the Cash flows from the Company’s discontinued operations are presented in the Consolidated Statements of Cash Flows for all periods presented Refer to Note 2— Held for Sale, Divestitures and Discontinued Operations for additional information on the Company’s assets and liabilities classified as held for sale and the Company's discontinued operations.

Certain prior period balances related to the Company's reportable segments and discontinued operations have been reclassified to conform to the current presentation in the financial statements and accompanying notes.

Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period.

The Company has reorganized its portfolio of businesses into a new, simplified structure that more closely aligns its business capabilities with economic buyers.

As a result of this reorganization, the Company revised its reportable segments and identified non-core businesses for disposition (“Divestiture plan”).

In the first quarter of 2024, the Company determined its Divestiture plan met the criteria for discontinued operations as it represented a strategic shift that had a major effect on the Company’s operations and financial results.

As such, the results of businesses meeting the criteria to be classified as held for sale or disposed of in the current or prior periods in accordance with the Company’s Divestiture plan have been reclassified to discontinued operations.

Refer to Note 2— Held for Sale, Divestitures and Discontinued Operations for additional information on the Company’s assets and liabilities classified as held for sale and the Company's discontinued operations.

Certain prior period balances related to the Company's reportable segments and discontinued operations have been reclassified to conform to the current presentation in the condensed consolidated financial statements and accompanying notes.

The notes to the condensed consolidated financial statements are presented on a continuing operations basis unless otherwise noted.

3 unchanged sentences

Effective January 1, 2024, Advantage Solutions Inc.

revised its reportable segments to align with the Company's business strategy, and the manner in which the Chief Executive Officer, the Company's chief operating decision maker, assesses performance and makes decisions regarding the allocation of resources for the Company.

revised its reportable segments to align with the Company's business strategy, and the manner in which the Chief Executive Officer, the Company's chief operating decision maker (“CODM”), assesses performance and makes decisions regarding the allocation of resources for the Company.

The Company’s revised operating and reportable segments consist of Branded Services, Experiential Services, and Retailer Services.

This change had no impact on the Company’s Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations and Comprehensive Loss, and Condensed Consolidated Statements of Stockholders' Equity.

This change had no impact on the Company’s Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations and Comprehensive Loss, Condensed Consolidated Statements of Stockholders' Equity and Condensed Consolidated Statements of Cash Flows.

Prior period segment results have been reclassified to reflect the Company’s new reportable segments on a continuing operations basis.

Refer to Note 8— Segments for additional information on the Company’s reportable segments.

Discontinued Operations

The Company presents discontinued operations when there is a disposal of a component or a group of components that represents a strategic shift that will have a major effect on operations and financial results.

The results of discontinued operations are reported in net income (loss) from discontinued operations in the condensed consolidated statements of operations for all periods presented, commencing in the period in which the business is either disposed of or is classified as held for sale, including any gain or loss recognized on closing or adjustment of the carrying amount to fair value less costs to sell.

Assets and liabilities related to a business classified as held for sale which also meets the criteria for discontinued operations are segregated in the condensed consolidated balance sheets for the current and prior periods presented.

Cash flows for continuing and discontinued operations are segregated in the condensed consolidated cash flows for the current and prior periods.

When proceeds are not utilized to paydown long-term debt, the assets and liabilities associated with discontinued operations in the current period balance sheet are classified as current.

Goodwill represents the excess of the purchase price over the fair value of the net identifiable tangible and intangible assets acquired in an acquisition.

8 unchanged sentences

The Company compared a weighted average of the output from the income and market approaches to compute the fair value of the reporting units.

The assumptions in the income and market approach are based on significant inputs not observable in the market and thus represent Level three measurements within the fair value hierarchy.

The assumptions in the income and market approach are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy.

The uncertainty and volatility in the economic environment in which the Company operates could have an impact on the Company's future growth and could result in future impairment charges.

There is no assurance that actual future earnings, cash flows or other assumptions for the reporting units will not significantly decline from these projections.

In conjunction with the tests performed as of January 1, 2024, each of the fair values for the reporting units tested was in excess of its carrying amount.

The fair values of the Branded Agencies and Experiential Services reporting units exceeded their respective carrying values by less than 20 %.

As of March 31, 2024, there were no indicators of goodwill impairment.

During the three months ended June 30, 2024, the Company determined a triggering event occurred and an impairment assessment was warranted for the Branded Agencies reporting unit goodwill due to the pending sale of one of the businesses that comprised a substantial portion of the assets, liabilities and prospective cash flows of the Branded Agencies reporting unit.

As a result of the impairment test performed, the Company recognized a non-cash goodwill impairment charge of $ 99.7 million related to the Company's Branded Agencies reporting unit goodwill during the three months ended June 30, 2024, which has been reflected in “Impairment of goodwill” in the Condensed Consolidated Statements of Comprehensive (Loss) Income.

As a result of this charge, an immaterial amount of goodwill remains in this reporting unit.

Indefinite Lived Intangible Assets

Intangible assets with indefinite useful lives are not amortized but tested annually, at the beginning of the fourth quarter, for impairment or more often if events occur or circumstances change that would create a triggering event.

Intangible assets with indefinite useful lives are not amortized but tested annually for impairment, at the beginning of the fourth quarter, or more often if events occur or circumstances change that would create a triggering event.

Prior to the segment change, the Company went to market with the Advantage Trade Name being specifically used and assessed for impairment in the Sales and Marketing businesses.

As a result of the change in the Company's reportable segments effective as of January 1, 2024, the Company determined, based on the change in the planned use of the Advantage Trade Name intangible asset, that the Advantage Trade Name should be considered an entity-wide asset for reporting and impairment testing purposes.

As a result of the change in the Company's reportable segments effective as of January 1, 2024, the Company determined, based on the change in the planned use of the

Advantage Trade Name intangible asset, that the Advantage Trade Name should be considered an entity-wide asset for reporting and impairment testing purposes.

As of January 1, 2024, the Company concluded there was a triggering event for an interim impairment assessment due to the change in unit of account of the indefinite-lived intangibles.

Based on the interim impairment assessment, the estimated fair values exceeded their carrying values, thus no impairment was recorded.

Based on the interim impairment assessment, the estimated fair value exceeded the carrying value by approximately 6 %, thus no impairment was recorded.

For the three months ended June 30, 2024, no events or circumstances were noted that would indicate a triggering event for the Company’s intangible assets with indefinite useful lives.

The uncertainty and volatility in the economic environment in which the Company operates could have an impact on the Company’s future growth and could result in future impairment charges.

There is no assurance that actual cash flows or other assumptions for the this intangible will not significantly decline from these projections.

Revenue Recognition

5 unchanged sentences

Revenues within the Branded Services segment are further disaggregated between brokerage services, branded merchandising services, omni-commerce marketing services, and revenues related to the Company's international joint venture (prior to the deconsolidation during fiscal year 2023).

Brokerage services revenues are primarily outsourced

sales and services for branded consumer goods manufacturers at retailer headquarters, in-store and online.

Brokerage services revenues are primarily outsourced sales and services for branded consumer goods manufacturers at retailer headquarters, in-store and online.

Branded merchandising services relate to merchandising in-store and online for branded consumer goods manufacturers.

7 unchanged sentences

Disaggregated revenues were as follows:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

Branded Services

Omni-commerce marketing services

Brokerage services

Branded merchandising services

Omni-commerce marketing services

International joint venture

4 unchanged sentences

Retailer Services

Agency services

Advisory services

Retailer merchandising services

Advisory services

Agency services

Total Retailer Services revenue

2 unchanged sentences

Deferred revenues are recognized as revenues when the related services are performed for the client.

Revenues recognized during the three months ended March 31, 2024 included in Deferred revenues as of December 31, 2023 were $ 13.3 million.

Revenues recognized during the three months ended March 31, 2023 included in Deferred revenues as of December 31, 2022 were $ 12.8 million.

Revenues recognized during the three and six months ended June 30, 2024 that were included in Deferred revenues as of December 31, 2023 were $ 3.5 million and $ 16.8 million, respectively.

Revenues recognized during the three and six months ended June 30, 2023 included in Deferred revenues as of December 31, 2022 were $ 4.4 million and $ 14.5 million, respectively.

Accounting Standards Recently Issued but Not Yet Adopted by the Company

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires entities to expand their existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid.

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In December 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires entities to disclose incremental segment information on an annual and interim

basis, including significant segment expenses and measures of profit or loss that are regularly provided to the chief operating decision maker (“CODM”).

Improvements to Reportable Segment Disclosures , which requires entities to disclose incremental segment information on an annual and interim basis, including significant segment expenses and measures of profit or loss that are regularly provided to the CODM.

The standard is effective for the Company beginning in fiscal year 2024 and interim periods within fiscal year 2025, with early adoption permitted.

The Company is currently evaluating the impact of ASU 2023-07 on the consolidated financial statements and related disclosures and expects to adopt the new standard using a retrospective approach.

In March 2024, the Securities Exchange Commission (“SEC”) adopted final climate-related disclosure rules under SEC Release Nos.

In March 2024, the Securities and Exchange Commission (“SEC”) adopted final climate-related disclosure rules under SEC Release Nos.

33-11275 and 34-99678, The Enhancement and Standardization of Climate-Related Disclosures for Investors .

7 unchanged sentences

Held for Sale

As of March 31, 2024, and December 31 2023, the Company classified certain assets and liabilities as held for sale in the condensed consolidated balance sheet, primarily relating assets and liabilities to be disposed of by sale (“disposal groups”) which are “held for sale” if their carrying amounts are principally expected to be recovered through a sale transaction rather than through continuing use.

Assets and liabilities to be disposed of by sale are classified as held for sale if the carrying amount is principally expected to be recovered through a sale rather than through continuing use.

The classification occurs when the disposal group is available for immediate sale and the sale is probable.

These criteria are generally met when an agreement to sell exists, or management has committed to a plan to sell the assets within one year.

When the criteria are met and the proceeds from the sale will not be utilized to pay down long-term borrowings, the Company classifies these assets and liabilities held for sale as current.

Disposal groups are measured at the lower of carrying amount or fair value less costs to sell, and long-lived assets included within the disposal group are not depreciated or amortized.

As of June 30, 2024 and December 31, 2023, the Company classified certain assets and liabilities as held for sale in the Condensed Consolidated Balance Sheets, primarily related to assets and liabilities to be disposed of by sale (“disposal groups”).

The fair value of a disposal group, less any costs to sell, is assessed each reporting period it remains classified as held for sale and any remeasurement to the lower of carrying value or fair value less costs to sell is reported as an adjustment to the carrying value of the disposal group.

The Company determined that the disposal groups classified as held for sale met the criteria for classification as discontinued operations as discussed below.

The assets and liabilities related to these businesses are included in the discontinued operations captions in the Condensed Consolidated Balance Sheets.

In May 2024, the Company entered into an agreement and sold a branded marketing agency that was held for sale as of March 31, 2024.

The Company received approximately $ 42.5 million less estimated working capital adjustments.

The Company is currently in the process of finalizing the accounting for this transaction and has determined that the gain or loss on this sale is impractical to report as of the date of this filing.

The assets and liabilities related to these businesses are included in the discontinued operations captions in the Condensed Consolidated Balance Sheets for all periods presented.

2023 Divestitures

In April 2023, the Company entered into an agreement to sell certain assets and liabilities classified as held for sale as of March 31, 2023 (collectively, the “2023 Divestitures”).

The Company determined that the disposal groups classified as held for sale did not meet the criteria for classification as discontinued operations as of March 31, 2023.

During the three months ended March 31, 2023, the Company recorded a loss of $ 11.7 million to remeasure the disposal group to fair value plus costs to sell and a loss of $ 4.8 million loss on divestitures as a component of “Net income (loss) from discontinued operations, net of tax” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

In 2023, the Company entered into an agreement to sell certain assets and liabilities (collectively, the “2023 Divestitures”).

The Company determined that the disposal groups did not meet the criteria for classification as discontinued operations as of June 30, 2023.

During the three and six months ended June 30, 2023, the Company recorded a loss of $ 1.2 million and $ 17.7 million, respectively, on divestitures as a component of “Net income (loss) from discontinued operations, net of tax” in the Condensed Consolid ated Statements of Operations and Comprehensive Loss.

2024 Divestitures

On January 31, 2024, the Company sold a collection of foodservice businesses, previously classified as held for sale (as current assets) as of December 31, 2023 (collectively the 2024 “Divestitures”) .

On January 31, 2024, the Company sold a collection of foodservice businesses, previously classified as held for sale (as current assets) as of December 31, 2023.

As part of the sale, the foodservice businesses were combined with an entity owned by the buyer, with the Company receiving approximately $ 91.0 million, subject to working capital adjustments and an ongoing 7.5 % interest in the combined business.

1 unchanged sentence

Upon the close of the transaction, the retained 7.5 % interest was recognized at fair value of $ 8.4 million, valued using unobservable inputs (i.e., Level 3 inputs), primarily discounted cash flow.

During the three months ended March 31, 2024, the Company recorded a gain on the divestiture of the collection of foodservice businesses of $ 56.6 million reported as a component of “Net income (loss) from discontinued operations, net of tax” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

Proceeds from the sale were classified as cash provided by investing activities from continuing operations in the Condensed Consolidated Statements of Cash Flows.

Effective February 1, 2024, the Company’s investment in the combined foodservice business is accounted for under the equity method of accounting, with the investment reported in “Investments in unconsolidated affiliates” on the Condensed Consolidated Balance Sheets and an immaterial amount of equity income (loss) reported in “Income from unconsolidated investments” on the Condensed Consolidated Statements of Operations and Other Comprehensive Loss for the three months ended March 31, 2024.

The investment is reported in “Investments in unconsolidated affiliates” on the Condensed Consolidated Balance Sheets and an immaterial amount of equity income (loss) reported in “Income from unconsolidated investments” on the Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2024.

Transactions between the Company and the combined foodservice entity are considered to be related-party transactions subsequent to the divesture.

During the three months ended June 30, 2024, the Company sold two agencies in the Branded Services segment, one agency in the Experiential Services segment and one agency in the Retailer Services segment (collectively the “ 2024 Divestitures”).

The Company received $ 65.2 million including estimated working capital adjustments.

During the three and six months ended June 30, 2024, the Company recorded a gain from the 2024 Divestitures of $ 13.2 million and $ 70.2 million, respectively, as a component of “Net income (loss) from discontinued operations, net of tax” in the Condensed Consolid ated Statements of Operations and Comprehensive Loss.

Proceeds from the sales were classified as cash provided by investing activities from continuing operations in the Condensed Consolidated Statements of Cash Flows.

As of June 30, 2024, certain assets and liabilities of the Jun Group business were classified as held for sale.

On July 31, 2024, the Company completed the sale of the Jun Group business in exchange for proceeds of approximately $ 185.0 million less any adjustments.

The Company received approximately $ 130.0 million in cash upon completion of the sale.

As part of the purchase agreement, the buyer has agreed to remit the remaining consideration to the Company in two additional installments of $ 22.5 million ($ 27.5 million less $ 5 million estimated adjustments) and $ 27.5 million, 12 and 18 months , respectively, after the completion of the sale.

Discontinued Operations

The Company classifies a business that has been disposed of or is classified as held for sale as a discontinued operation when the criteria prescribed by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 205, Presentation of Financial Statements are met.

While the 2023 Divestitures did not previously qualify for presentation as discontinued operations, the Company concluded that, in the aggregate, the sales of these businesses along with the 2024 Divestitures and businesses held for sale as of March 31, 2024 met the criteria for discontinued operations presentation during the three months ended March 31, 2024 (collectively, the “discontinued operations”), which are part of a single disposal plan.

As a result, each of these businesses has been reclassified to discontinued operations in the Condensed Consolidated Statements of Operations and Condensed Consolidated Balance sheets for all periods presented.

As part of the agreements for the 2023 Divestitures and 2024 Divestitures, the Company has agreed to provide certain transitional services as defined within the respective Transition Services Agreement for a period of time after sale.

Income and expenses related to these transitional services are immaterial and are reported in “Net loss from continuing operations” on the Condensed Consolidated Statements of Operations and Other Comprehensive Loss.

The Company classifies a business that has been disposed of or is classified as held for sale as a discontinued operation when the criteria prescribed by the FASB Accounting Standards Codification (“ASC”) 205, Presentation of Financial Statements are met.

While the 2023 Divestitures did not previously qualify for presentation as discontinued operations, the Company concluded that, in the aggregate, the sales of these businesses along with the 2024 Divestitures and businesses held for sale as of June 30, 2024 (collectively, the “discontinued operations” that are all part of the divestiture plan) met the criteria for discontinued operations presentation as their dispositions represent a strategic shift that has had a major effect on the Company's operations and financial results.

As a result, each of these businesses has been reclassified to discontinued operations in the Condensed Consolidated Statements of Operations, Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows for all periods presented.

As part of the agreements for certain of the divestitures the Company has agreed to provide certain transitional services as detailed within respective transition services agreements for a period of time after sale.

The following table presents the summarized balance sheets of discontinued operations.

(in thousands)

March 31, 2024

June 30, 2024

December 31, 2023

5 unchanged sentences

Other intangible assets, net

Investments in unconsolidated affiliates

Total assets of discontinued operations (1)

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The following table presents the summarized statements of operations of discontinued operations.

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

3 unchanged sentences

(Gain) loss on divestitures

Total operating (income) expenses

Total operating expenses

Operating income (loss) from discontinued operations

2 unchanged sentences

Total other expenses

Income (loss) before income taxes from discontinued operations, net of tax

Provision for (benefit from) income taxes from discontinued operations

Net income (loss) from discontinued operations

Income (loss) before income taxes from discontinued operations

(Benefit from) provision for income taxes from discontinued operations

Net income (loss) from discontinued operations, net of tax

net income (loss) from discontinued operations attributable to noncontrolling interest

7 unchanged sentences

Balance at December 31, 2023

Balance at March 31, 2024

Accumulated impairment losses related to goodwill were $ 2.0 billion as of March 31, 2024 and December 31, 2023.

Impairment charge

Balance at June 30, 2024

Accumulated impairment losses related to goodwill were $ 2.1 billion and $ 2.0 billion as of June 30, 2024 and December 31, 2023, respectively.

The following tables set forth information for intangible assets:

March 31, 2024

June 30, 2024

(amounts in thousands)

4 unchanged sentences

Client relationships

Developed technology

Total finite-lived intangible assets

8 unchanged sentences

Client relationships

Developed technology

Total finite-lived intangible assets

1 unchanged sentence

Total other intangible assets

Amortization of intangible assets was $ 45.8 million an d $ 49.7 million for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, estimated future amortization expense of the Company’s finite-lived intangible assets are as follows:

Amortization of intangible assets was $ 44.2 million an d $ 47.0 million for the three months ended June 30, 2024 and 2023 , respectively, and $ 88.5 million and $ 94.0 million for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, estimated future amortization expense of the Company’s finite-lived intangible assets are as follows:

(in thousands)

8 unchanged sentences

Long-term debt, net of current portion

As of March 31, 2024 , the Company had $ 1.1 billion of debt outstanding under the Term Loan Facility and $ 692.0 million of debt outstanding under the Notes (both as defined in the Annual Report on Form 10-K filed March 1, 2024 for the year ended D ecember 31, 2023 (the “2023 Annual Report”) with maturity dates of October 28, 2027 and November 15, 2028 , respectively.

As of June 30, 2024, the Company had $ 1.1 billion of debt outstanding under the Term Loan Facility (as defined below) and $ 665.5 million of debt outstanding under the Notes (both as defined in the Annual Report on Form 10-K filed March 1, 2024 for the year ended December 31, 2023 (the “2023 Annual Report”)) with maturity dates of October 28, 2027 and November 15, 2028 , respectively.

In April 2024 (the “Third Lien Amendment Effective Date” ), the Company amended the Term Loan Facility to (i) reduce the applicable interest rate margin (a) from 4.50 % to 4.25 % for SOFR loans or (b) from 3.50 % to 3.25 % for base rate loans;

and (ii) reset the period for six months following the Third Lien Amendment Effective Date in which a 1.00 % prepayment premium shall apply to any prepayment of the term loans in connection with a Repricing Event (as defined in the amended First Lien Credit Agreement).

The Term Loan Facility bears interest at a floating rate of Term SOFR plus an applicable margin of 4.25 % per annum, subject to an additional spread adjustment on SOFR ranging from 0.11 % to 0.26 %.

Interest on the Notes is payable semi-annually in arrears at a rate of 6.50 % per annum.

The Company was in compliance with all of its affirmative and negative covenants under the Term Loan Facility and Notes as of March 31, 2024 .

The Company was in compliance with all of its affirmative and negative covenants under the Term Loan Facility and Notes as of June 30, 2024 .

In addition, the Company is required to repay the principal under the Term Loan Facility in the greater amount of its excess cash flow, as such term is defined in the agreement governing the Term Loan Facility, or $ 13.3 million, per annum, in quarterly payments.

The Company made the minimum quarterly principal payments of $ 3.3 million during the three months ended March 31, 2024 and 2023.

The Company made the minimum quarterly principal

payments of $ 3.3 million and $ 6.6 million during the three and six months ended June 30, 2024 and 2023, respectively.

No payments under the excess cash flow calculation were required in such periods.

1 unchanged sentence

Dollar LIBOR provisions with SOFR, effective June 30, 2023.

The Company voluntarily repurchased an aggregate of $ 51.0 million principal amount of its Senior Secured Notes during the three months ended March 31, 2024.

The Company recognized a gain on the repurchase of the Senior Secured Notes of $ 2.7 million for the three months ended March 31, 2024, as a component of “Interest expense, net” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

The Company voluntarily repurchased an aggregate of $ 1.7 million principal amount from the Term Loan Facility during the three months ended March 31, 2023.

The Company recognized a gain on the repurchase from the Term Loan Facility of $ 0.3 million for the three months ended March 31, 2023, as a component of “Interest expense, net” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

As of March 31, 2024, the Company had no borrowings under the Revolving Credit Facility (as defined in the 2023 Annual Report).

The Company voluntarily repurchased an aggregate of $ 26.5 million and $ 77.5 million principal amount of its Senior Secured Notes during the three and six months ended June 30, 2024, respectively.

The Company recognized a gain on the repurchase of the Senior Secured Notes of $ 2.4 million and $ 5.1 million for the three and six months ended June 30, 2024, respectively, as a component of “Interest expense, net” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

The Company voluntarily repurchased an aggregate of $ 52.4 million and $ 54.4 million principal amount of its Term Loan Facility during the three and six months ended June 30, 2023, respectively.

The Company recognized a gain on the repurchase of $ 4.7 million and $ 5.0 million for the three and six months ended June 30, 2023, respectively, as a component of “Interest expense, net” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

As of June 30, 2024, the Company had no borrowings under the Revolving Credit Facility (as defined in the 2023 Annual Report).

All borrowings under the Revolving Credit Facility are subject to the satisfaction of certain customary conditions.

Borrowings under the credit agreement bear interest at a floating rate, which at the option may be either (i) a base rate or Canadian Prime Rate plus an applicable margin of 0.75 %, 1.00 %, or 1.25 % per annum or (ii) Term SOFR or Alternative Currency Spread plus an applicable margin of 1.75 %, 2.00 % or 2.25 % per annum.

Borrowings under the credit agreement bear interest at a floating rate, which at the option of the Company may be either (i) a base rate or Canadian Prime Rate plus an applicable margin of 0.75 %, 1.00 %, or 1.25 % per annum or (ii) Term SOFR or Alternative Currency Spread plus an applicable margin of 1.75 %, 2.00 % or 2.25 % per annum.

The Company is required to pay a commitment fee ranging from 0.250 % to 0.375 % per annum in respect of the average daily unused commitments under the Revolving Credit Facility.

In April 2024, the Company's Term Loan Facility was further amended to (I) reduce the applicable interest rate margin on the term loan by 0.25 % (a) from 4.50 % to 4.25 % for SOFR loans or (b) from 3.50 % to 3.25 % for base rate loans;

and (II) reset the period for six months in which a 1.00 % prepayment premium shall apply to any prepayment of the term loans in connection with certain events.

Fair Value of Financial Instruments

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Level 1, defined as observable inputs, such as quoted prices in active markets;

Level 2, defined as inputs other than quoted prices in

active markets that are either directly or indirectly observable;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable;

and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The following table sets forth the Company’s financial assets and liabilities measured on a recurring basis at fair value, categorized by input level within the fair value hierarchy.

March 31, 2024

June 30, 2024

(in thousands)

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Interest Rate Cap Agreements

The Company had interest rate cap and collar contracts with an aggregate notional value of principal of $ 950.0 million as of March 31, 2024 and December 31, 2023 from various financial institutions to manage the Company’s exposure to interest rate movements on variable rate credit facilities.

The Company had interest rate cap and collar contracts with an aggregate notional value of principal of $ 950.0 million as of June 30, 2024 and December 31, 2023 from various financial institutions to manage the Company’s exposure to interest rate movements on variable rate credit facilities.

The interest rate cap and collar contracts will mature on December 16, 2024 and April 5, 2026, respectively.

The fair value of the Company’s outstanding interest rate caps and collars of $ 22.5 million and $ 26.3 million, respectively, were included in “Prepaid expenses and other current assets” in the Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023, respectively, with changes in fair value recognized as a component of “Interest expense, net” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

During the three months ended March 31, 2024 and 2023, the Company recorded a gain o f $ 4.2 million and a gain of $ 1.9 million, respectively, within Interest expense , net, related to changes in the fair value of its derivative instruments.

The fair value of the Company’s outstanding interest rate caps and collars of $ 15.8 million and $ 26.3 million, respectively, were included in “Prepaid expenses and other current assets” and "Other assets" in the Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023, respectively, with changes in fair value recognized as a component of “Interest expense, net” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

During the three months ended June 30, 2024 and 2023, the Company recorded a gain o f $ 1.2 million and $ 11.4 million, respectively, within “ Interest expense , net, ” related to changes in the fair value of its derivative instruments.

During the six months ended June 30, 2024 and 2023 , the Company recorded a gain of $ 5.4 million and $ 9.5 million, respectively, within “ Interest expense , ” net, related to changes in the fair value of its derivative instruments.

Subsequent to June 30, 2024 the Company entered into two interest rate collar contracts with a notional value of principal of $ 200.0 million each.

The interest rate collar contracts are effective December 16, 2024 and will mature on April 5, 2027 and 2028.

Contingent Consideration Liabilities

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Any resulting decreases or increases in the fair value result in a corresponding gain or loss reported in “Selling, general, and administrative expenses” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

As of March 31, 2024 , the maximum potential payment outcomes were $ 44.2 million .

As of June 30, 2024 , the maximum potential payment outcomes were $ 6.5 million .

The following table summarizes the changes in the carrying value of estimated contingent consideration liabilities:

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Carrying Value

Balance at March 31, 2024

Balance at June 30, 2024

Term Loan Facility

9 unchanged sentences

Beginning February 2023, an officer of the Company has served as a member of the board of directors of a client of the Company.

The Company recognized $ 1.3 million and $ 0.8 million of revenues from such client during the three months ended March 31, 2024 and 2023, respectively.

Accounts receivable from this client were $ 0.6 million and $ 0.6 million as of March 31, 2024 and December 31, 2023, respectively.

The Company recognized $ 1.2 million and $ 1.1 million of revenues from such client during the three months ended June 30, 2024 and 2023, respectively.

The Company recognized $ 2.5 million and $ 2.0 million of revenues from such client during the six months ended June 30, 2024 and 2023, respectively.

Accounts receivable from this client were $ 0.7 million and $ 0.6 million as of June 30, 2024 and December 31, 2023, respectively.

Beginning July 2023, a member of the board of directors of the Company has served as an officer of a client of the Company.

The Company recognized $ 1.6 million of revenues from such client during the three months ended March 31, 2024.

Accounts receivable from this client were $ 0.3 million and $ 0.5 million as of March 31, 2024 and December 31, 2023, respectively.

Investments in Unconsolidated Affiliates

During the three months ended March 31, 2024 and 2023 , the Company recognized revenues of $ 6.5 million and $ 3.7 million, respectively, from its investment in unconsolidated affiliates.

Accounts receivable from investment in unconsolidated affiliates were $ 3.1 million and $ 3.7 million as of March 31, 2024 and December 31, 2023 , respectively.

The Company’s effective tax rates were 21.8 % and 15.0 % for the three months ended March 31, 2024 and 2023, respectively.

The Company recognized $ 2.3 million and $ 3.9 million of revenues from such client during the three and six months ended June 30, 2024, respectively.

Accounts receivable from this client were $ 0.4 million and $ 0.5 million as of June 30, 2024 and December 31, 2023, respectively.

Unconsolidated Affiliates

During the three months ended June 30, 2024 and 2023 , the Company recognized revenues of $ 4.8 million and $ 4.5 million, respectively, from transactions with unconsolidated affiliates.

During the six months ended June 30, 2024 and 2023, the Company recognized revenues of $ 11.3 million and $ 8.3 million, respectively, from transactions with unconsolidated affiliates.

Accounts receivable from transactions with unconsolidated affiliates were $ 1.1 million and $ 3.7 million as of June 30, 2024 and December 31, 2023 , respectively.

The Company’s effective tax rates were 13.3% and 14.7% for the three months ended June 30, 2024 and 2023, respectively.

The effective tax rate is based upon the estimated income or loss before taxes for the year, by jurisdiction, and adjusted for estimated permanent tax adjustments.

The fluctuation in the Company’s effective tax rate was primarily due to a difference in projected book income/loss used in the annual effective tax rate, the application of the windfall of $ 0.7 million of stock based compensation for the three months ended March 31, 2024, as compared to a $ 2.3 million

shortfall for the three months ended March 31, 2023, and the release of the valuation allowance of $ 1.1 million related to one of the Company’s investments for the three months ended March 31, 2024.

The income tax expense from discontinued operations was $ 12.1 million for the three months ended March 31, 2024, while the income tax benefit from discontinued operations was $ 1.7 million for the three months ended March 31, 2023.

The income tax expense for the three months ended March 31, 2024 was impacted primarily by the sale of the company’s foodservice businesses.

The income tax benefit for the three months ended March 31, 2023 was primarily the result of pre-tax loss.

Effective January 1, 2024, the Company revised its reportable segments to align with the Company’s business strategy, and the manner in which the Chief Executive Officer, the Company's chief operating decision maker, assesses the performance and makes decisions regarding the allocation of resources for the Company.

The difference in the Company’s effective tax rate versus the statutory tax rate is primarily due to additional tax expense from foreign operations, a benefit from the federal work opportunity tax credit ("WOTC") and the effect of a pretax loss.

The difference also includes additional tax expense during the three months ended June 30, 2024 due to a goodwill impairment which was treated as nondeductible and a difference in the stock based compensation windfall of $0.4 million for the three months ended June 30, 2024, as compared to a $0.9 million shortfall for the three months ended June 30, 2023.

The income tax benefit from discontinued operations was $ 2.4 million for the three months ended June 30, 2024.

The income tax expense from discontinued operations was $ 1.8 million for the three months ended June 30, 2023.

The Company’s effective tax rates were 16.9 % and 16.1 % for the six months ended June 30, 2024 and 2023, respectively.

The effective tax rate is based upon the estimated income or loss before taxes for the year, by jurisdiction, and adjusted for estimated permanent tax adjustments.

The difference in the Company's effective tax rate versus the statutory tax rate is primarily due to the additional tax expense from foreign operations, a benefit from WOTC and the effect of a pretax loss.

The difference also includes additional tax expense during the six months ended June 30, 2024 due to a goodwill impairment which the Company treated as nondeductible, a difference in the windfall of $ 1.1 million of stock based compensation for the six months ended June 30, 2024, as compared to a $ 3.2 million shortfall for the six months ended June 30, 2023, and the release of the valuation allowance of $ 1.1 million that was determined to be not necessary for the six months ended June 30, 2024.

Income tax expense from discontinued operations was $ 11.9 million and $ 1.3 million for the six months ended June 30, 2024 and 2023, respectively.

Income tax expense for the six months ended June 30, 2024 and 2023 was

impacted primarily by the sale of the divested entities and changes in the income (loss) before income taxes from discontinued operations.

Effective January 1, 2024, the Company revised its reportable segments to align with the Company’s business strategy, and the manner in which the Chief Executive Officer, the Company's CODM, assesses the performance and makes decisions regarding the allocation of resources for the Company.

The Company’s revised reportable segments consist of Branded Services, Experiential Services, and Retailer Services.

The reportable segments reported below are the segments of the Company for which separate financial information is available and for which segment results are evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The reportable segments reported below are the segments of the Company for which separate financial information is available and for which segment results are evaluated regularly by the CODM in deciding how to allocate resources and in assessing performance.

Through the Company's Branded Services segment, the Company offers capabilities in brokerage, branded merchandising and omni-commerce marketing services to consumer goods manufacturers.

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therefore, no additional information is produced or included herein.

The Company and its chief operating decision maker evaluate performance based on revenues and operating (loss) income.

D iscontinued operations are not included in the applicable reportable segments.

The Company and its CODM evaluate performance based on revenues and operating (loss) income.

Discontinued operations are not included in the applicable reportable segments.

Refer to Note 2— Held for Sale, Divestitures and Discontinued Operations.

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Experiential Services

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Depreciation and amortization

Income from unconsolidated investments

Operating loss from continuing operations

Three Months Ended March 31, 2023

Impairment of goodwill

Operating (loss) income from continuing operations

Three Months Ended June 30, 2023

Depreciation and amortization

Operating income (loss) from continuing operations

Three Months Ended March 31,

(amounts in thousands)

Operating income from continuing operations

(in thousands)

Branded Services

Experiential Services

Retailer Services

Total revenues from discontinued operations

Experiential Services

Six Months Ended June 30, 2024

Depreciation and amortization

Loss from unconsolidated investments

Impairment of goodwill

Operating (loss) income from continuing operations

Six Months Ended June 30, 2023

Depreciation and amortization

Operating income from continuing operations

Commitments and Contingencies

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The Company is currently unable to determine the amount of any potential liability, costs or expenses (above the amounts already being offered as refunds) that may result from any lawsuits or investigations associated with the Take 5 Matter or determine whether any such issues will have any future material adverse effect on the Company’s financial position, liquidity, or results of operations.

Although the Company has insurance covering certain liabilities, the Company cannot assure that the insurance will be sufficient to cover any potential liability or expenses associated with the Take 5 Matter.

Although the Company has insurance covering certain liabilities, the Company cannot be certain that the insurance will be sufficient to cover any potential liability or expenses associated with the Take 5 Matter.

Stock-Based Compensation

3 unchanged sentences

The Company recognized stock-based compensation expense and equity-based compensation expense associated with the Common Series C Units of Karman Topco L.P.

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

4 unchanged sentences

Performance Restricted Stock Units

PSUs are subject to the achievement of certain performance conditions based on the Company’s revenues (“PSU Revenues”) and Adjusted EBITDA (“PSU EBITDA”) targets in the respective measurement period and the recipient’s continued service to the Company.

The PSUs are scheduled to vest over a three-year period from the date of grant and may vest from 0 % to 150 % of the number of shares set forth in the table below.

PSUs granted in 2024 are subject to achievement of certain performance conditions based on measurements of the Company’s Adjusted EBITDA margin and cash earnings.

The Company’s Adjusted EBITDA margin and cash earnings relative to specified targets will be measured each year over the three-year period of 2024, 2025 and 2026, and an annual achievement percentage will be determined.

The annual achievement percentages for each of 2024, 2025 and 2026 will

be averaged following the completion of the three-year performance period to determine the final achievement percentage.

In addition, the earned PSUs are subject to further adjustment depending on the Company’s performance against a specified peer group for total stockholder return during the three-year performance period.

This adjustment can either put a floor or a cap on the calculation of the final PSUs value.

Subject to certain termination events, these PSUs are scheduled to cliff-vest on the third-year anniversary of the date of grant and may vest from 0 % to 200 % of the “target” number of PSUs specified in the table below.

PSUs are subject to the recipient's continued service to the Company.

PSUs granted in 2021, 2022 and 2023 are subject to achievement of certain performance conditions based on the Company’s revenues (“PSU Revenues”) and Adjusted EBITDA (“PSU EBITDA”) targets in the respective measurement period and the recipient’s continued service to the Company.

The measurement period is based on the twelve months of the respective fiscal year.

The PSUs are sche duled to vest over a three-year period from the date of grant and may vest from 0 % to 150 % of the number of shares set forth in the table below.

The number of PSUs earned shall be adjusted to be proportional to the partial performance between the Threshold Goals, Target Goals and Maximum Goals.

Details for each aforementioned defined term for each grant have been provided in the table below.

During the three months ended March 31, 2024, the Compensation Committee determined that the achievement of the performance objectives applicable to the 2023 PSU EBITDA and 2023 PSU Revenues objectives were 150 % of Target Goals.

During the six months ended June 30, 2024 , the Human Capital Committee determined that the achievement of the performance objectives applicable to the 2023 PSU EBITDA and 2023 PSU Revenues objectives were 150 % of Target Goals.

The value of these PSU awards above the Target Goals remain subject to additional performance requirements (i.e., the above target performance must be maintained in 2024 and 2025, respectively) and service-based vesting conditions.

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Recognition of expense associated with performance-based stock is not permitted until achievement of the performance targets are probable of occurring.

The measurement period is based on the twelve months of the respective fiscal year.

Measurement Period

2 unchanged sentences

(in thousands, except share and per share data)

The following table summarizes the PSU activity for the three months ended March 31, 2024:

The following table summarizes the PSU activity for the six months ended June 30, 2024:

Performance Share Units

3 unchanged sentences

PSU performance adjustment

Outstanding at March 31, 2024

Outstanding at June 30, 2024

Restricted Stock Units

1 unchanged sentence

RSUs are generally scheduled to vest over three years and are subject to the provisions of the agreement under the Plan.

During the three months ended March 31, 2024, the following activities involving RSUs occurred under the Plan:

During the six months ended June 30, 2024, the following activities involving RSUs occurred under the Plan:

Number of RSUs

2 unchanged sentences

Outstanding at January 1, 2024

Outstanding at March 31, 2024

As of March 31, 2024 , the total remaining unrecognized compensation cost related to RSUs amounted to $ 23.0 million, net of forfeitures, which is expected to be amortized over the weighted-average remaining requisite service periods of 1.9 years.

Outstanding at June 30, 2024

As of June 30, 2024 , the total remaining unrecognized compensation cost related to RSUs amounted to $ 30.7 million, which is expected to be amortized over the weighted-average remaining requisite service periods of 2.3 years.

Stock Options

During the three months ended March 31, 2024, the following activities involving stock options occurred under the Plan:

During the six months ended June 30, 2024, the following activities involving stock options occurred under the Plan:

Stock Options

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Cancelled/Expired

Outstanding at March 31, 2024

As of March 31, 2024 , the Company had approximately $ 5.1 million of total unrecognized compensation expense related to stock options, net of related forfeiture estimates, which the Company expects to recognize over a weighted-average period of approximately 2.7 years.

The weighted average remaining contractual term of all options outstanding as of March 31, 2024 was 8.7 years.

The intrinsic value of all outstanding options as of March 31, 2024 was $ 10.6 million based on the market price of the Company's common stock of $ 4.33 per share.

There were no options exercised during the three months ended March 31, 2024 and 2023 .

Outstanding at June 30, 2024

As of June 30, 2024 , the Company had approximately $ 9.4 million of total unrecognized compensation expense related to stock options, net of forfeitures, which the Company expects to recognize over a weighted-average period of approximately 2.7 years.

The weighted average remaining contractual term of all options outstanding as of June 30, 2024 was 8.0 years.

The intrinsic value of all outstanding options as of June 30, 2024 was $ 4.8 million based on the market price of the Company's common stock of $ 3.22 per share.

There were no options exercised during the six months ended June 30, 2024 and 2023 .

Earnings Per Share

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The following is a reconciliation of basic and diluted net earnings per common share:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands, except share and earnings per share data)

1 unchanged sentence

Net loss from continuing operations

net income from continuing operations attributable to noncontrolling interest

Net loss from continuing operations attributable to stockholders of Advantage Solutions Inc.

Net income (loss) from discontinued operations, net of tax

2 unchanged sentences

Weighted average common shares - basic

Basic net loss per common share from continuing operations

Basic net income (loss) per common share from discontinued operations

Basic net loss per common share attributable to stockholders of Advantage Solutions Inc.

Basic loss per common share from continuing operations

Basic earnings (loss) per common share from discontinued operations

Basic earnings (loss) per common share from continuing operations attributable to stockholders of Advantage Solutions Inc.

Basic earnings (loss) per common share from discontinued operations attributable to stockholders of Advantage Solutions Inc.

1 unchanged sentence

Net loss from continuing operations

net income from continuing operations attributable to noncontrolling interest

Net loss from continuing operations attributable to stockholders of Advantage Solutions Inc.

Net income (loss) from discontinued operations, net of tax

1 unchanged sentence

Net income (loss) from discontinued operations attributable to stockholders of Advantage Solutions Inc.

Weighted average common shares outstanding

Performance stock units

Restricted stock units

Employee stock purchase plan and stock options

Weighted average common shares - diluted

Diluted net loss per common share from continuing operations

Diluted net income (loss) per common share from discontinued operations

Diluted net loss per common share attributable to stockholders of Advantage Solutions Inc.

Diluted loss per common share from continuing operations

Diluted earnings (loss) per common share from discontinued operations

Diluted loss per common share from continuing operations attributable to stockholders of Advantage Solutions Inc.

Diluted earnings (loss) per common share from discontinued operations attributable to stockholders of Advantage Solutions Inc.

The Company had 18,578,321 warrants to purchase Class A common stock at $ 11.50 per share outstanding at March 31, 2024 and 2023, which have been excluded in the calculation of diluted earnings per common share, as the weighted average market price of the common stock during the three months ended March 31, 2024 and 2023 did not exceed the exercise price of the warrants.

In accordance with the treasury method the weighted average shares outstanding assuming dilution include the incremental effect of stock-based awards, except when such effect would be antidilutive.

Stock-based awards of 20.2 million weighted-average shares were outstanding for the three months ended March 31, 2024 , but were not included in the computation of diluted (loss) earnings per common share because the net loss position of the Company made them antidilutive.

Stock-based awards of 2.2 million weighted-average shares were outstanding for the three months ended March 31, 2023 , but were not included in the computation of diluted loss per common share because the net loss

position of the Company made them antidilutive.

In addition, PSUs related to 4.8 million shares assuming achievement of the Target Goals were outstanding for the three months ended March 31, 2023, but were not included in the computation of diluted loss per common share attributable, as the performance targets were not yet met during the three months ended March 31, 2023 .

The Company had 18,578,321 warrants to purchase Class A common stock at $ 11.50 per share outstanding at June 30, 2024 and 2023, which have been excluded from the calculation of diluted earnings per common share, as the weighted average market price of the common stock during the three and six months ended June 30, 2024 and 2023 did not exceed the exercise price of the warrants.

In accordance with the treasury stock method the weighted average shares outstanding assuming dilution include the incremental effect of stock-based awards, except when such effect would be antidilutive.

Stock-based awards of 15.6 million and 17.9 million weighted-average shares were outstanding for the three and six months ended June 30, 2024 , respectively, but were not included in the computation of diluted (loss) earnings per common share because the net loss position of the Company made them antidilutive.

Stock-based awards of 1.2 million and 1.7 million weighted-average shares were outstanding for the three and six months ended June 30, 2023 , respectively, but were not included in the

computation of diluted loss per common share because the net loss position of the Company made them antidilutive.

In addition, PSUs related to 6.0 million shares assuming achievement of the target level performance were outstanding for the six months ended June 30, 2024, but were not included in the computation of diluted loss per common share, as the performance targets were not yet met during the six months ended June 30, 2024.

PSUs related to an immaterial number of shares assuming achievement of the target level performance were outstanding for the six months ended June 30, 2023, but were not included in the computation of diluted (loss) earnings per common share, as the performance targets were not yet met during the six months ended June 30, 2023.

Subsequent Events

In April 2024, the Company granted 5.3 million RSUs, 1.1 million PSUs and 3.0 million of stock options, with an estimated aggregate grant date fair value of $ 23.2 million, $ 4.6 million and $ 5.5 million, respectively.

On July 31, 2024, the Company entered into an arrangement to voluntarily repurchase $ 10.0 million of its Term Loan Facility for $ 9.7 million.

From July 1, 2024 through August 8, 2024, the Company executed open market purchases of $ 12.2 million our Class A common stock under the 2021 Share Repurchase Program.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements