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We are a leading business solutions provider to consumer goods manufacturers and retailers.
−Removed: We have a strong platform of competitively advantaged sales and marketing services built over multiple decades – essential, business critical services like headquarter sales, retail merchandising, in-store sampling, digital commerce and shopper marketing.
−Removed: For brands and retailers of all sizes, we help get the right products on the shelf (whether physical or digital) and into the hands of consumers (however they shop).
+Added: We have a strong platform of essential, business critical services like headquarter sales, retail merchandising, in-store sampling and private brand development.
+Added: We generate demand for brands and retailers of all sizes, helping get the right products on the shelf —whether physical or digital— and into the hands of consumers in every way they shop.
We use a scaled platform to innovate as a trusted partner with our clients, solving problems to increase their efficiency and effectiveness across a broad range of channels.
−Removed: For 2023 and 2022, we had two reportable segments:
−Removed: sales and marketing.
−Removed: Through our sales segment, which generated approximately 57.9% of our total revenues in the year ended December 31, 2023, we offer headquarter sales representation services to consumer goods manufacturers, for whom we prepare and present to retailers a business case to increase distribution of manufacturers’ products and optimize how they are displayed, priced and promoted.
−Removed: We also make in-store merchandising visits for both manufacturer and retailer clients to ensure the products we represent are adequately stocked and properly displayed.
−Removed: Through our marketing segment, which generated approximately 42.1% of our total revenues in the year ended December 31, 2023, we help brands and retailers reach consumers through two main categories within the marketing segment.
−Removed: The first and largest category is our retail experiential business, also known as in-store sampling or demonstrations, where we manage highly customized large-scale sampling programs (both in-store and online) for leading retailers.
−Removed: The second category is our collection of specialized
−Removed: agency services, in which we provide private label services to retailers and develop granular marketing programs for brands and retailers through our shopper, consumer and digital marketing agencies.
−Removed: During the fourth quarter of 2023, certain organizational changes were announced that will impact our future internal reporting.
−Removed: As a result of these changes, we expect to have three reportable segments.
−Removed: We expect that any operational changes impacting our reportable segments will be effective in the first quarter of 2024.
−Removed: Items Affecting Comparability of Financial Results
−Removed: 2024 Divestiture of Foodservice Businesses
−Removed: We have included businesses classified as held for sale within continuing operations as their dispositions do not represent a strategic shift that will have a major effect on our operations and financial results.
−Removed: As of December 31, 2023, certain assets and liabilities of a collection of foodservice businesses were classified as held for sale in Prepaid expenses and other current assets and Other accrued expenses on our Consolidated Balance Sheet.
−Removed: The collection of foodservice businesses were sold during the first quarter of 2024.
−Removed: As part of the sale, the foodservice businesses were combined with an entity owned by the buyer, and we received approximately $91.0 million, less estimated working capital adjustment and an ongoing 7.5% stake in the entity with which the foodservice businesses will be combined.
−Removed: 2023 Deconsolidation of ASL
−Removed: On November 30, 2023, we reduced our equity interest in Advantage Smollan Limited (“ASL”), our European joint venture, from a majority interest of under 60% to a minority interest of 49.6% in exchange for $1.0 million in cash.
−Removed: We also removed certain participating rights with ASL related to capital allocation and certain of our decision making rights.
−Removed: Therefore, in accordance with Accounting Standards Codification 810 (“ASC 810”), Consolidation , ASL was deconsolidated from our consolidated financial statements.
−Removed: Effective December 1, 2023, our investment in ASL is accounted for under the equity method of accounting, with the investment reported in “Investments in unconsolidated affiliates” on the Consolidated Balance Sheets and Equity income (loss) reported in “Income from unconsolidated investments” on the Consolidated Statements of Operations and Comprehensive (Loss) Income.
−Removed: Impacts of the COVID-19 Pandemic
−Removed: Our services experienced the effects from reductions in client spending due to the economic impact related to the COVID-19 pandemic.
−Removed: While mixed by services and geography, the spending reductions impacted all of our services and markets, which particularly impacted our operations in 2021.
−Removed: Globally, the most impacted services were our in-store sampling and demonstration services, which have continued to improve in 2023.
−Removed: Our financial performance for the year ended December 31, 2023 as compared to the year ended December 31, 2022 includes:
−Removed: • Revenues increased by $175.1 million, or 4.3%, to $4,224.8 million;
−Removed: • Operating loss decreased by $1,515.6 million to $76.2 million of operating income;
−Removed: • Net loss decreased by $1,317.0 million to $60.3 million;
+Added: Effective January 1, 2024, we revised our reportable segments to align our business strategy, and the manner in which the Chief Executive Officer, our chief operating decision maker, manages and assesses the performance and makes decisions regarding the allocation of resources for us.
+Added: Our revised reportable segments consist of Branded Services, Experiential Services and Retailer Services.
+Added: We have reorganized our portfolio of businesses into a new, simplified structure that more closely aligns our business capabilities with economic buyers.
+Added: As a result of this reorganization, we have formally disposed of certain business units.
+Added: We have determined that the business units disposed of met the discontinued operations accounting criteria as their dispositions represent a strategic shift that has had a major effect on our operations and financial results.
+Added: Refer to Note 2— Discontinued Operations, Deconsolidation of European Joint Venture, Divestitures and Acquisitions .
+Added: We continue to evaluate opportunities to further simplify our operations so we can focus more resources on our core businesses.
+Added: Through our Branded Services segment, which generated approximately 36.6% and 45.1% of our revenues in the years ended December 31, 2024 and 2023, respectively, we provide services to branded consumer goods manufacturers through three main categories:
+Added: brokerage, branded merchandising and omni-commerce marketing services.
+Added: Brokerage services is primarily an outsourced sales and services agency for branded consumer goods manufacturers at retailer headquarters, in-store and online.
+Added: Additionally, we lead with insights to execute branded merchandising strategies for branded consumer goods manufacturers related to merchandising in-store and online to drive product sales.
+Added: Our omni-commerce marketing services primarily relate to digital and field marketing services, including shopper marketing, targeted advertising, interactive design and development, inventory management, application development and content management solutions.
+Added: Through our Experiential Services segment, which generated approximately 36.3% and 29.7% of our revenues in the years ended December 31, 2024 and 2023, respectively, we help brands and retailers reach consumers and convert shoppers into buyers through in-store and online sampling and demonstrations.
+Added: We manage highly customized, large-scale sampling programs for leading brands and retailers.
+Added: We also manage, organize and execute special events for brands and retailers, including large-scale meetings, mobile tours, summits and festivals.
+Added: Through our Retailer Services segment, which generated approximately 27.1% and 25.2% of our revenues in the years ended December 31, 2024 and 2023, respectively, we provide end-to-end advisory, retailer merchandising and agency services to retailers.
+Added: Advisory services primarily consist of consulting services related to private brand development, including coordination related to the sourcing, manufacturing, branding and distribution of private label products to the end retailer.
+Added: Retailer merchandising services primarily relate to the execution of merchandising strategies, including traditional services such as interior store construction, store resets, category updates and new item implementation.
+Added: Agency services primarily consist of providing marketing strategies within retail locations, including retail media networks, and analyzing shopper behavior to offer planning, execution and measurement of insight-based, retailer-specific promotions that target retailers’ specific shopper base to drive product sales.
+Added: Our financial performance from continuing operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023 includes:
+Added: • Revenues decreased by $333.8 million, or 8.6%, to $3,566.3 million;
+Added: • Operating income decreased by $341.6 million to $295.0 million of operating loss;
+Added: • Net loss increased by $297.2 million to $378.4 million;
• Adjusted Net Income decreased by $3.1 million, or 3.9%, to $75.7 million;
−Removed: • Adjusted EBITDA decreased by $11.6 million, or 2.7%, to $424.3 million.
+Added: • Adjusted EBITDA increased by $3.8 million, or 1.1%, to $356.0 million.
Factors Affecting Our Business and Financial Reporting
−Removed: There are a number of factors, in addition to the deconsolidation of ASL, the impact of the COVID-19 pandemic and, inflation, that affect the performance of our business and the comparability of our results from period to period including:
+Added: There are a number of factors, in addition to certain prior period balances related to our reportable segments and discontinued operations that have been reclassified to conform to the current presentation, that affect the performance of our business and the comparability of our results from period to period including:
• Organic Growth.
−Removed: Part of our strategy is to generate organic growth by expanding our existing client relationships, continuing to win new clients, pursuing channel expansion, enhancing our service offerings, developing our international platform, delivering operational efficiencies and expanding into logical adjacencies.
−Removed: We believe that by pursuing these
−Removed: organic growth opportunities we will be able to continue to enhance our value proposition to our clients and thereby grow our business.
+Added: Part of our strategy is to generate organic growth by expanding our existing client relationships, continuing to win new clients, pursuing channel expansion, enhancing our service offerings, digital technology solutions, developing our international platform, delivering operational efficiencies and expanding into logical adjacencies.
+Added: We believe that by pursuing these organic growth opportunities we will be able to continue to enhance our value proposition to our clients and thereby grow our business.
• Acquisitions and Divestitures.
We have grown our business in part by acquiring businesses, both domestic and international.
−Removed: Many of our acquisition agreements include contingent consideration arrangements, which are described below.
+Added: Many of our acquisition agreements include contingent consideration arrangements, which are further described below.
We have completed acquisitions at what we believe are attractive purchase prices and have regularly structured our agreements to result in the generation of long-lived tax assets, which have in turn reduced our effective purchase prices when incorporating the value of those tax assets.
We continue to look for strategic acquisitions that can be completed at attractive purchase prices.
+Added: We also continue to evaluate potential opportunities to refine our focus on our core business of converting shoppers into buyers for consumer goods companies and retailers, including divesting certain businesses.
+Added: As part of the sales agreements for certain divestitures, we have agreed to provide certain transitional services as defined within the respective transition services agreements for a period of time after sale.
We continue to evaluate opportunities to further simplify our operations so we can focus more resources on our core businesses.
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We review and assess the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could differ materially from our initial estimates.
−Removed: Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in “Selling, general and administrative expenses” in the Consolidated Statements of Operations and Comprehensive (Loss) Income.
+Added: Adjustments to the estimated fair value related to changes in unobservable inputs are reported in “Selling, general and administrative expenses” in our Consolidated Statements of Operations and Comprehensive Loss.
• Depreciation and Amortization.
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Unlike depreciation expense which has an economic cost reflected by the fact that we must re-invest in property and equipment to maintain the asset base delivering our results of operations, we do not have any capital re-investment requirements associated with the acquired intangible assets, such as client relationships and trade names, that comprise the majority of the finite-lived intangible assets that create our amortization expense.
−Removed: • Impairment of Goodwill and Indefinite-Lived Assets.
−Removed: We recognized a non-cash intangible asset impairment charge of $43.5 million related to our indefinite-lived sales trade name during the year ended December 31, 2023.
−Removed: We recognized $1,275.7 million and $91.8 million impairment charges in the sales and marketing reporting units, respectively, for the year ended December 31, 2022.
−Removed: We recognized non-cash intangible asset impairment charges of $146.0 million and $59.0 million related to our indefinite-lived sales and marketing trade names, respectively, during the year ended December 31, 2022.
−Removed: The impairment charges have been reflected in “Impairment of goodwill and indefinite-lived assets” in our Consolidated Statements of Comprehensive (Loss) Income.
+Added: • Impairment of Goodwill and Indefinite-Lived Asset.
+Added: We recognized goodwill and intangible asset impairment charges of $233.2 million and $42.0 million, respectively, during the year ended December 31, 2024.
+Added: We recognized an
+Added: intangible asset impairment charge of $43.5 million related to our indefinite-lived trade name during the year ended December 31, 2023.
+Added: We recognized goodwill impairment charges of $1,367.5 million for the year ended December 31, 2022.
+Added: We recognized an intangible asset impairment charge of $205.0 million related to our indefinite-lived trade name during the year ended December 31, 2022.
+Added: The impairment charges have been reflected in “Impairment of goodwill and indefinite-lived asset” in our Consolidated Statements of Operations and Comprehensive Loss.
• Foreign Exchange Fluctuations.
Our financial results are affected by fluctuations in the exchange rate between the U.S.
−Removed: dollar and other currencies, primarily the Canadian dollars, British pounds and euros, due to our operations in such foreign jurisdictions.
+Added: dollar and other currencies, primarily the Canadian dollar due to our operations in such foreign jurisdictions.
See also “ —Quantitative and Qualitative Disclosure of Market Risk—Foreign Currency Risk.
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How We Assess the Performance of Our Business
−Removed: Revenues related to our sales segment are primarily comprised of commissions, fee-for-service and cost-plus fees for providing retail services, category and space management, headquarter relationship management and technology solutions.
−Removed: A small portion of our arrangements include performance incentive provisions, which allow us to earn additional revenues on our performance relative to specified quantitative or qualitative goals.
−Removed: We recognize the incentive portion of revenues under these arrangements when the related services are transferred to the customer.
−Removed: Marketing segment revenues are primarily recognized in the form of a fee-for-service (including retainer fees, fees charged to clients based on hours incurred, project-based fees or fees for executing in-person consumer engagements or experiences, which engagements or experiences we refer to as events), commissions or on a cost-plus basis, in each case, related to services including experiential marketing, shopper and consumer marketing services, private label development or our digital, social and media services.
−Removed: We analyze our financial performance, in part, by measuring revenue growth in two ways—revenue growth attributable to organic activities and revenue growth and declines attributable to acquisitions, which we refer to as organic revenues and acquired revenues, respectively.
+Added: Revenues related to the Branded Services segment are primarily recognized in the form of commissions, fee-for-service and cost-plus fees for providing headquarter relationship management, execution of merchandising strategies and omni-commerce marketing services.
+Added: Experiential Services segment revenues are primarily recognized in the form of fee-for-service and cost-plus fees for providing in-store, digital sampling and demonstrations, where the Company manages highly customized, large-scale sampling programs for leading brands and retailers.
+Added: Retailer Services segment revenues are primarily recognized in the form of commissions, fee-for-service and cost-plus fees for providing consulting services related to private brand development, the execution of merchandising strategies and marketing strategies within retailer locations, including retail media networks and analyzing shopper behavior.
+Added: We analyze our financial performance, in part, by measuring revenue performance in two ways—revenue growth attributable to organic activities and revenue growth and declines attributable to acquisitions and divestitures, which we refer to as organic revenues and acquired revenues, respectively.
We define organic revenues as any revenues that are not acquired revenues.
Our organic revenues exclude the impacts of acquisitions and divestitures, when applicable, which improves comparability of our results from period to period.
−Removed: In general, when we acquire a business, the acquisition includes a contingent consideration arrangement ( e.g ., an earn-out provision) and, accordingly, we separately track the financial performance of the acquired business.
+Added: In general, when we acquire a business, the acquisition includes a contingent consideration arrangement ( e.g.
+Added: , an earnout provision) and, accordingly, we separately track the financial performance of the acquired business.
In such cases, we consider revenues generated by such a business during the 12 months following its acquisition to be acquired revenues.
−Removed: For example, if we completed an acquisition on July 1, 2022 for a business that included a contingent consideration arrangement, we would consider revenues from the acquired business from July 1, 2022 to June 30, 2023 to be acquired revenues.
+Added: For example, if we completed an acquisition on September 30, 2023 for a business that included a contingent consideration arrangement, we would consider revenues from the acquired business from October 1, 2023 to September 30, 2024 to be acquired revenues.
We generally consider growth attributable to the financial performance of an acquired business after the 12-month anniversary of the date of acquisition to be organic.
If an acquisition of an acquired business does not include a contingent consideration arrangement, or we otherwise do not separately track the financial performance of the acquired business due to operational integration, we consider the revenues that the business generated in the 12 months prior to its acquisition to be our acquired revenues for the 12 months following its acquisition, and any differences in revenues actually generated during the 12 months after its acquisition to be organic.
−Removed: For example, if we completed an acquisition on July 1, 2022 for a business that did not include a contingent consideration arrangement, we would consider the amount of revenues from the acquired business from July 1, 2021 to June 30, 2022 to be acquired revenues during the period from July 1, 2022 to June 30, 2023, with any differences from that amount actually generated during the latter period to be organic revenues.
+Added: For example, if we completed an acquisition on September 30, 2024 for a business that did not include a contingent consideration arrangement, we would consider the amount of revenues from the acquired business from October 1, 2023 to September 30, 2024 to be acquired revenues during the period from October 1, 2024 to September 30, 2025, with any differences from that amount actually generated during the latter period to be organic revenues.
All revenues generated by our acquired businesses are considered to be organic revenues after the 12-month anniversary of the date of acquisition.
−Removed: When we divest a business, we consider the revenues that the divested business generated in the 12 months prior to its divestiture to be subtracted from acquired revenues for the 12 months following its divestiture.
−Removed: For example, if we completed a divestiture on July 1, 2022 for a business, we would consider the amount of revenues from the divested business from July 1, 2021 to June 30, 2022 to be subtracted from acquired revenues during the period from July 1, 2022 to June 30, 2023.
+Added: When we divest a business, unless otherwise presented as discontinued operations, we consider the revenues that the divested business generated in the 12 months prior to its divestiture to be subtracted from acquired revenues for the 12 months following its divestiture.
+Added: For example, if we completed a divestiture on October 1, 2024 for a business, we would consider the amount of revenues from the divested business from October 1, 2023 to September 30, 2024 to be subtracted from organic revenues during the period from October 1, 2024 to September 30, 2025.
We measure organic revenue growth and acquired revenue growth by comparing the organic revenues or acquired revenues, respectively, period over period, net of any divestitures.
Cost of Revenues
−Removed: Our cost of revenues consists of both fixed and variable expenses primarily attributable to the hiring, training, compensation and benefits provided to both full-time and part-time associates, as well as other project-related expenses.
−Removed: A number of costs associated with our associates are subject to external factors, including inflation, increases in market specific wages and minimum wage rates at federal, state and municipal levels and minimum pay levels for exempt roles.
+Added: Our cost of revenues consists of both fixed and variable expenses primarily attributable to the hiring, training, compensation and benefits provided to both full-time and part-time teammates, as well as other project-related expenses.
+Added: A number of costs associated with our teammates are subject to external factors, including inflation, increases in market specific wages and minimum wage rates at federal, state and municipal levels and minimum pay levels for exempt roles.
Additionally, when we enter into certain new client relationships, we may experience an initial increase in expenses associated with hiring, training and other items needed to launch the new relationship.
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Other overhead costs include information technology, professional services fees, including accounting and legal services, and other general corporate expenses.
−Removed: We also incur expenses operating as a public company, including expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as higher expenses for general and director and officer insurance, investor relations, and professional services.
−Removed: Additionally, included in selling, general and administrative expenses are costs associated with the changes in fair value of the contingent consideration of acquisitions and other costs related to acquisition or divestiture
−Removed: transactions.
+Added: We also incur expenses operating as a public company, including expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as higher expenses for general and director and officer insurance, investor relations, and related professional services.
+Added: Additionally, included in selling, general and administrative expenses are costs associated with the changes in fair value of the contingent consideration of acquisitions and other costs related to our internal reorganization activities, including our restructuring plan, acquisition and divestiture transactions.
These transaction-related costs are comprised of fees related to change of equity ownership, professional fees, due diligence and integration or divestiture activities.
−Removed: Impairment of Goodwill and Indefinite-lived Assets
+Added: Impairment of Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net identifiable tangible and intangible assets acquired in an acquisition.
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We generally combine components that have similar economic characteristics, nature of services, types of clients, distribution methods and regulatory environment.
−Removed: For 2023 and 2022 we had two reporting units, sales and marketing, which were also our operating segments.
−Removed: We test our goodwill for impairment at the beginning of the fourth quarter of a given fiscal year, and whenever events or changes in circumstances indicate that the carrying value of a reporting unit may exceed its fair value.
−Removed: Other Expenses
+Added: Changes to our operating segments effective January 1, 2024, as described in Note 17— Operating Segments and Geographic Information , resulted in a change to our reporting units (Branded Services, Branded Agencies, Experiential Services, Merchandising and Retailer Agencies).
+Added: As a result, the Company performed the required impairment assessments directly before and immediately after the change in reporting units as of January 1, 2024.
+Added: The assets and liabilities were reassigned to the applicable reporting units and allocated goodwill using the relative fair value approach.
+Added: The estimated fair values of the underlying reporting units were determined based on a combination of the income and market approaches.
+Added: The income approach utilizes estimates of discounted cash flows for the underlying business, which requires assumptions for growth rates, EBITDA margins, terminal growth rate, discount rate, and incremental net working capital, all of which require significant management judgment.
+Added: The market approach applies market multiples derived from historical earnings data of selected guideline publicly traded companies that are first screened by industry group and then further narrowed on the reporting units' business descriptions, markets served, competitors, EBITDA margins and revenue size.
+Added: We compared a weighted average of the output from the income and market approaches to compute the fair value of the reporting units.
+Added: 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.
+Added: We based our fair value estimates on assumptions we believe to be reasonable but which are unpredictable and inherently uncertain.
+Added: A change in these underlying assumptions would cause a change in the results of the tests and, as such, could cause fair value to be less than the carrying amounts and result in an impairment of goodwill in the future.
+Added: Additionally, if actual results are not consistent with the estimates and assumptions or if there are significant changes to our planned strategy, it may cause fair value to be less than the carrying amounts and result in an impairment of goodwill in the future.
+Added: Other (Income) Expenses
Change in Fair Value of Warrant Liability
Change in fair value of warrant liability represents a non-cash (income) expense resulting from a fair value adjustment to warrant liability with respect to the private placement warrants.
−Removed: Based on the availability of sufficient observable information, we determine the fair value of the liability classified private placement warrants by approximating the value with the price of the public warrants at the respective period end, which is inherently less subjective and judgmental given it is based on observable inputs.
−Removed: We believe these amounts are not correlated to future business operations.
+Added: Based on the availability of sufficient observable information, we
+Added: determine the fair value of the liability classified private placement warrants by approximating the value with the price of the public warrants at the respective period end, which is inherently less subjective and judgmental given it is based on observable inputs.
Interest Expense
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Depreciation Expense
−Removed: Depreciation expense relates to the property and equipment that we own, which represented less than 1% of our total assets at December 31, 2023.
−Removed: Income tax (benefit) expense and our effective tax rates can be affected by many factors, including state apportionment factors, our acquisition strategy, tax incentives and credits available to us, changes in judgment regarding our ability to realize our deferred tax assets, changes in our worldwide mix of pre-tax losses or earnings, changes in existing tax laws and our assessment of uncertain tax positions.
+Added: Depreciation expense relates to the property and equipment that we own, which represented less than 1% of our total assets at December 31, 2024 and 2023.
+Added: Income tax expense and our effective tax rates can be affected by many factors, including state apportionment factors, our acquisition and divestiture strategy, tax incentives and credits available to us, changes in judgment regarding our ability to realize our deferred tax assets, changes in our worldwide mix of pre-tax losses or earnings, changes in existing tax laws and our assessment of uncertain tax positions.
We have positive cash flow characteristics, as described below, due to the limited required capital investment in the fixed assets and working capital needs to operate our business in the normal course.
See “ —Liquidity and Capital Resources.
−Removed: Our principal sources of liquidity are cash flows from operations, borrowings under the Revolving Credit Facility (as defined below), and other debt.
−Removed: Our principal uses of cash are operating expenses, working capital requirements, acquisitions and repayment of debt.
+Added: Our principal sources of liquidity are cash flows from operations, borrowings under the Revolving Credit Facility (as defined below), divestitures and other debt.
+Added: Our principal uses of cash are operating expenses, working capital requirements, investments in our technology platforms, acquisitions, repayment of debt and share repurchases.
+Added: During the year ended December 31, 2024, we sold five businesses.
+Added: We expect to use the divestiture proceeds to invest in our business, reduce debt, create financial flexibility for opportunistic share repurchases or potential future acquisitions.
Adjusted Net Income
Adjusted Net Income is a non-GAAP financial measure.
−Removed: Adjusted Net Income means net loss before (i) impairment of goodwill and indefinite-lived assets, (ii) gain on deconsolidation of subsidiaries, (iii) loss on divestitures, (iv) amortization of intangible assets, (v) equity-based compensation of Karman Topco L.P., (vi) changes in fair value of warrant liability, (vii) fair value adjustments of contingent consideration related to acquisitions, (viii) acquisition and divestiture related expenses, (ix) costs associated with COVID-19, net of benefits received, (x) net income attributable to noncontrolling interest, (xi) reorganization expenses, (xii) litigation expenses, (xiii) deferred financing fees, (xiv) gain on repurchases of Term Loan Facility and Senior Secured Notes debt, (xv) recovery from and costs associated with the Take 5 Matter, (xvi) other adjustments that management believes are helpful in evaluating our operating performance, and (xvii) related tax adjustments.
+Added: Adjusted Net Income means net loss from continuing operations before (i) net income attributable to noncontrolling interest, (ii) impairment of goodwill and indefinite-lived asset, (iii) gain on deconsolidation of subsidiaries, (iv) equity-based compensation of Karman Topco L.P., (v) changes in fair value of warrant liability, (vi) fair value adjustments of contingent consideration related to acquisitions, (vii) acquisition and divestiture related expenses, (viii) restructuring expenses, (ix) reorganization expenses, (x) litigation expenses, (xi) amortization of intangible assets, (xii) costs associated with COVID-19, net of benefits received, (xiii) gain on repurchases of Term Loan Facility and Senior Secured Notes debt, (xiv) costs associated with (recovery from) the Take 5 Matter, (xv) other adjustments that management believes are helpful in evaluating our operating performance, and (xvi) related tax adjustments.
We present Adjusted Net Income because we use it as a supplemental measure to evaluate the performance of our business in a way that also considers our ability to generate profit without the impact of items that we do not believe are indicative of our operating performance or are unusual or infrequent in nature and aid in the comparability of our performance from period to period.
−Removed: Adjusted Net Income should not be considered as an alternative for net loss, our most directly comparable measure presented on a GAAP basis.
−Removed: Adjusted EBITDA and Adjusted EBITDA by Segment
−Removed: Adjusted EBITDA and Adjusted EBITDA by segment are supplemental non-GAAP financial measures of our operating performance.
−Removed: Adjusted EBITDA means net loss before (i) interest expense, net, (ii) (benefit from) provision for income taxes, (iii) depreciation, (iv) impairment of goodwill and indefinite-lived assets, (v) amortization of intangible assets, (vi) gain on deconsolidation of subsidiaries, (vii) loss on divestitures, (viii) equity-based compensation of Karman Topco L.P., (ix) changes in fair value of warrant liability, (x) stock-based compensation expense, (xi) fair value adjustments of contingent consideration related to acquisitions, (xii) acquisition and divestiture related expenses, (xiii) costs associated with COVID-19, net of benefits received, (xiv) EBITDA for economic interests in investments, (xv) reorganization expenses, (xvi) litigation expenses, (xviii) recovery from and costs associated with the Take 5 Matter and (xix) other adjustments that management believes are helpful in evaluating our operating performance.
−Removed: We present Adjusted EBITDA and Adjusted EBITDA by segment because they are key operating measures used by us to assess our financial performance.
+Added: Net Income should not be considered as an alternative for Net loss from continuing operations, our most directly comparable measure presented on a GAAP basis.
+Added: Adjusted EBITDA from Continuing Operations, Adjusted EBITDA from Discontinued Operations and Adjusted EBITDA by Segment
+Added: Adjusted EBITDA from Continuing Operations, Adjusted EBITDA from Discontinued Operations and Adjusted EBITDA by Segment are supplemental non-GAAP financial measures of our operating performance.
+Added: Adjusted EBITDA from Continuing Operations and Adjusted EBITDA from Discontinued Operations means net income before (i) interest expense (net), (ii) provision for (benefit from) income taxes, (iii) depreciation, (iv) amortization of intangible assets, (v) impairment of goodwill, (vi) changes in fair value of warrant liability, (vii) stock-based compensation expense, (viii) equity-based compensation of Karman Topco L.P., (ix) fair value adjustments of contingent consideration related to acquisitions, (x) acquisition and divestiture related expenses, (xi) (gain) loss on divestitures, (xii) restructuring expenses, (xiii) reorganization expenses, (xiv) litigation expenses (recovery), (xv) costs associated with COVID-19, net of benefits received, (xvi) costs associated with (recovery from) the Take 5 Matter, (xvii) EBITDA for economic interests in investments and (xviii) other adjustments that management believes are helpful in evaluating our operating performance.
+Added: Adjusted EBITDA by Segment means, with respect to each segment, operating (loss) income from continuing operations before (i) depreciation, (ii) amortization of intangible assets, (iii) impairment of goodwill, (iv) stock based compensation expense, (v) equity-based compensation of Karman Topco L.P., (vi) fair value adjustments of contingent consideration related to acquisitions, (vii) acquisition and divestiture related expenses, (viii) restructuring expenses, (ix) reorganization expenses, (x) litigation expenses (recovery), (xi) costs associated with COVID-19, net of benefits received, (xii) costs associated with (recovery from) the Take 5 Matter, (xiii) EBITDA for economic interests in investments and (xiv) other adjustments that management believes are helpful in evaluating our operating performance, in each case, attributable to such segment.
+Added: We present Adjusted EBITDA from Continuing Operations, Adjusted EBITDA from Discontinued Operations and Adjusted EBITDA by Segment because they are key operating measures used by us to assess our financial performance.
These measures adjust for items that we believe do not reflect the ongoing operating performance of our business, such as certain non-cash items, unusual or infrequent items or items that change from period to period without any material relevance to our operating performance.
We evaluate these measures in conjunction with our results according to GAAP because we believe they provide a more complete understanding of factors and trends affecting our business than GAAP measures alone.
−Removed: Furthermore, the agreements governing our indebtedness contain covenants and other tests based on measures substantially similar to Adjusted EBITDA.
−Removed: Neither Adjusted EBITDA nor Adjusted EBITDA by segment should be considered as an alternative for net loss or operating income (loss), respectively, our most directly comparable measures presented on a GAAP basis.
+Added: Furthermore, the agreements governing our indebtedness contain covenants and other tests based on measures substantially similar to Adjusted EBITDA from Continuing Operations and Adjusted EBITDA from Discontinued Operations.
+Added: None of Adjusted EBITDA from Continuing Operations, Adjusted EBITDA from Discontinued Operations nor Adjusted EBITDA by Segment should be considered as an alternative for Net loss or operating (loss) income, our most directly comparable measures presented on a GAAP basis.
Non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures.
Additionally, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore our non-GAAP measures may not be directly comparable to similarly titled measures of other companies.
−Removed: For a reconciliation of Adjusted EBITDA to net loss and Adjusted EBITDA by segment to operating income (loss), see “ —Non-GAAP Financial Measures.
−Removed: Take 5 Matter
−Removed: On April 1, 2018, we acquired certain assets and assumed certain liabilities of Take 5 Media Group.
−Removed: In June 2019, as a result of a review of internal allegations related to inconsistency of data provided by Take 5 to its clients, we commenced an investigation into Take 5’s operations.
−Removed: In July 2019, as a result of our investigation, we terminated all operations of Take 5 and offered refunds to Take 5 clients of collected revenues attributable to Take 5 since our acquisition of Take 5.
−Removed: For the years ended December 31, 2023, 2022 and 2021, we incurred $0.3 million, $2.5 million, and $4.9 million, respectively, of costs associated with the investigation and remediation activities in connection with the Take 5 Matter, primarily professional fees and other related costs.
−Removed: These costs were recorded in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive (Loss) Income for such years.
−Removed: Reorganization Charges
−Removed: Reorganization charges include severance plans designed to integrate and reduce costs intended to further improve efficiencies in operational activities and align cost structures consistent with revenue levels associated with business changes.
−Removed: We recorded severance expenses of $15.4 million, $3.2 million, and $1.0 million included in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2023, 2022, and 2021, respectively.
+Added: For a reconciliation of Adjusted EBITDA to net loss and Adjusted EBITDA by segment to operating (loss) income from continuing operations, see “ —Non-GAAP Financial Measures.
+Added: Transformation Strategy
+Added: In July 2024, we announced a restructuring plan as part of our transformation strategy to improve our cost structure and to implement various other efforts to improve operating efficiency.
+Added: The restructuring plan was designed to simplify the organization that supports the new segments after the divestitures and related transitions as well as to generate operational efficiencies during a time of market challenges affecting our clients.
+Added: The overall project was substantially completed at the end of fiscal year 2024.
+Added: Reorganization expenses
+Added: Beginning in the first quarter of fiscal year 2023, we engaged third-party professional service consultants to assist in identifying and implementing operational efficiencies and cost-saving strategies.
+Added: These efforts focused on internal process optimization and workforce alignment to our cost structure with current business needs.
+Added: During the year ended December 31, 2024, we incurred $88.8 million in reorganization expenses related to various internal reorganization activities, including professional fees, lease exit costs, severance, and nonrecurring compensation costs, compared to $56.1 million during the year ended December 31, 2023.
+Added: These amounts were recognized in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and
+Added: Comprehensive Loss.
+Added: The reorganization plan was designed to simplify the organization that supports the new segments after the divestitures and related transitions.
+Added: Restructuring expenses
+Added: In the third quarter of fiscal year 2024, we implemented restructuring plans as a result of the overall reorganization.
+Added: During the third quarter of fiscal year 2024, we offered a Voluntary Early Retirement Program (“VERP”) to certain eligible U.S.-based employees.
+Added: During the year ended December 31, 2024, we recorded $9.9 million of settlement charges and special termination benefits in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss.
+Added: In connection with our reorganization initiatives, in September 2024, we announced a cost savings program to improve operational performance and align cost structures consistent with revenue levels associated with business changes, which includes special termination benefits associated with a reduction-in-force (“2024 RIF”) and other optimization initiatives.
+Added: During the year ended December 31, 2024, we recorded $20.1 million of settlement charges and special termination benefits in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss.
Results of Operations for the Years Ended December 31, 2024 and 2023
+Added: The following table sets forth items derived from the Company’s consolidated statements of operations for the years ended December 31, 2024 and 2023 in dollars and as a percentage of total revenues.
Year Ended December 31,
2 unchanged sentences
Selling, general, and administrative expenses
−Removed: Impairment of goodwill and indefinite-lived assets
−Removed: Depreciation and amortization
+Added: Impairment of goodwill and indefinite-lived asset
Gain on deconsolidation of subsidiaries
−Removed: Loss on divestitures
−Removed: Income from unconsolidated investments
−Removed: Total expenses
−Removed: Operating income (loss)
−Removed: Other (income) expenses:
+Added: Depreciation and amortization
+Added: Loss from equity method investments
+Added: Total operating expenses
+Added: Operating (loss) income from continuing operations
+Added: Other expenses (income):
Change in fair value of warrant liability
1 unchanged sentence
Total other expenses
−Removed: Loss before income taxes
−Removed: Benefit from income taxes
+Added: Loss from continuing operations before income taxes
+Added: Benefit from income taxes from continuing operations
+Added: Net loss from continuing operations
+Added: Net income from discontinued operations, net of tax
+Added: net income from continuing operations attributable to noncontrolling interest, net of tax
+Added: net income from discontinued operations attributable to noncontrolling interest, net of tax
+Added: Net loss attributable to stockholders of Advantage Solutions Inc.
Other Financial Data
Adjusted Net Income (1)
−Removed: Adjusted EBITDA (1)
−Removed: (1) Adjusted Net Income and Adjusted EBITDA are financial measures that are not calculated in accordance with GAAP.
−Removed: For a discussion of our presentation of Adjusted Net Income and Adjusted EBITDA and reconciliations of net loss to Adjusted Net Income and Adjusted EBITDA, see “— Non-GAAP Financial Measures .”
+Added: Adjusted EBITDA from Continuing Operations (1)
+Added: (1) Adjusted Net Income and Adjusted EBITDA from continuing operations are financial measures that are not calculated in accordance with GAAP.
+Added: For a discussion of our presentation of Adjusted Net Income and Adjusted EBITDA from continuing operations and reconciliations of net loss to Adjusted Net Income and Adjusted EBITDA, see “— Non-GAAP Financial Measures .”
Comparison of the Years Ended December 31, 2024 and 2023
1 unchanged sentence
(amounts in thousands)
+Added: Branded Services
+Added: Experiential Services
+Added: Retailer Services
Total revenues
−Removed: Total revenues increased by $175.1 million, or 4.3%, during the year ended December 31, 2023, as compared to the year ended December 31, 2022.
−Removed: The sales segment revenues decreased $62.0 million during the year ended December 31, 2023 as compared to the year ended December 31, 2022.
−Removed: Excluding $91.4 million of revenues from divested businesses and the deconsolidation of our European joint venture, net of acquired businesses and favorable foreign exchange rates of $1.3 million, the segment experienced an increase of $28.2 million in organic revenues primarily due to an increase in our retail-centric merchandising services with an increase in volume and pricing realization as well as growth in our European joint venture, partially offset by an intentional client exit.
−Removed: The marketing segment revenues increased $237.1 million during the year ended December 31, 2023 as compared to the year ended December 31, 2022, which includes revenues of $0.3 million from acquired businesses, net of a divested business.
−Removed: Excluding revenues from acquired businesses, net of a divested business and unfavorable foreign exchange rates of $9.1 million, the segment experienced an increase of $245.9 million in organic revenues.
−Removed: The increase in revenues was primarily due to an increase in our in-store sampling and demonstration services and pricing realization, partially offset by a decrease in certain of our digital services.
+Added: Total revenues decreased by $333.8 million, or 8.6%, during the year ended December 31, 2024, as compared to the year ended December 31, 2023.
+Added: Excluding $374.4 million revenues during the year ended December 31, 2023 prior to the deconsolidation of our European joint venture, revenues increased 1%.
+Added: The Branded Services segment revenues decreased $452.1 million during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
+Added: Excluding $374.4 million revenues during the year ended December 31, 2023 prior to the
+Added: deconsolidation of our European joint venture, the segment experienced a decrease of $77.7 million in revenues primarily due to an intentional client resignation and a weaker economic environment for our consumer package goods clients.
+Added: The Experiential Services segment revenues increased $135.6 million during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
+Added: The increase in revenues was primarily due to an increase in our events per day volume.
+Added: The Retailer Services segment revenues decreased $17.3 million during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
+Added: The decrease in revenues was primarily due to reductions in the scope of services from our retailer clients as retailers respond to challenges in the broader markets in which they operate including increased commodity prices and wages.
Cost of Revenues
−Removed: Cost of revenues as a percentage of revenues for the year ended December 31, 2023 was 86.6%, as compared to 86.5% for the year ended December 31, 2022, which is consistent year over year.
+Added: Cost of revenues as a percentage of revenues for the year ended December 31, 2024 was 85.8%, as compared to 87.6% for the year ended December 31, 2023.
+Added: The decrease as a percentage of revenues was largely attributable to the change in the revenue mix of our services primarily related to the deconsolidation of our European joint venture, one time litigation expense in the prior year with recovery in the current year and decreased incentive compensation expense.
Selling, General and Administrative Expenses
Selling, general and administrative expenses as a percentage of revenues for the year ended December 31, 2024 was 9.1%, as compared to 6.4% for the year ended December 31, 2023.
−Removed: The increase as a percentage of revenues was primarily attributable to our internal reorganization activities, largely related to professional fees and severance, coupled with increased incentive compensation and technology expenses.
−Removed: Impairment of Goodwill and Indefinite-lived Assets
−Removed: We recognized a $43.5 million non-cash trade name intangible asset impairment charge during the year ended December 31, 2023.
−Removed: The impairment charges were due to the deconsolidation of our European joint venture and intended sale of the foodservice businesses.
−Removed: We recognized a $1,367.5 million non-cash goodwill impairment charge and a $205.0 million non-cash intangible asset impairment charge during the year ended December 31, 2022.
−Removed: The impairment charges were due to the confluence of sustained decline in our share price, challenges in the labor market and continued inflationary pressures, and an increase to the discount rate as a result of the increases in interest rates during 2022.
+Added: The increase as a percentage of revenues was primarily due to a $62.7 million increase in costs associated with our internal reorganization activities, largely related to professional fees, voluntary early retirement benefits and severance and the continued investment in our support services including our technology solutions.
+Added: Impairment of Goodwill and Indefinite-lived Asset
+Added: During the second quarter of fiscal year 2024, we 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.
+Added: As a result of the impairment test performed, we recognized a goodwill impairment charge of $99.7 million related to our Branded Agencies reporting unit goodwill during the year ended December 31, 2024, which has been reflected in “Impairment of goodwill and indefinite-lived asset” in the Consolidated Statements of Operations and Comprehensive Loss.
+Added: As a result of this charge, an immaterial amount of goodwill remains in this reporting unit.
+Added: During the fourth quarter of fiscal year 2024, we identified a triggering event that required an impairment assessment of goodwill for the Branded Services reporting unit.
+Added: The triggering event was due to the loss of clients and a reduction in the scope of client services as our clients implemented internal cost reduction initiatives in response to challenges in the broader markets in which they operate.
+Added: As a result of the goodwill impairment test, we recognized a goodwill impairment charge of $133.5 million related to the Branded Services reporting unit during the year ended December 31, 2024.
+Added: This charge is reflected in “Impairment of goodwill and indefinite-lived assets” in the Consolidated Statements of Operations and Comprehensive Loss.
+Added: During the fourth quarter of December 31, 2024, we recognized an intangible asset impairment charge of $42.0 million as a result of the triggering event for the Branded Services reporting unit.
+Added: We recognized a $43.5 million trade name intangible asset impairment charge during the year ended December 31, 2023 due to the deconsolidation of our European joint venture and intended sale of the foodservice businesses.
Depreciation and Amortization Expense
−Removed: Depreciation and amortization expense was $224.7 million for the year ended December 31, 2023 as compared to $233.1 million, which was primarily due to a decrease in software amortization expenses and intangible assets amortization expense.
−Removed: Gain on Deconsolidation of Subsidiaries
−Removed: On November 30, 2023, we reduced our equity interest in ASL, our European joint venture, from a majority interest of under 60% to a minority interest of 49.6% in exchange for $1.0 million in cash.
−Removed: We also removed certain participating rights with ASL related to capital allocation and certain of our decision making rights, resulting in a loss of control.
−Removed: Therefore, in accordance with ASC 810, ASL was deconsolidated from our consolidated financial statements resulting in the recognition of a $58.9 million gain for the year ended December 31, 2023.
−Removed: Effective December 1, 2023, our investment in ASL is accounted for under the equity method of accounting.
−Removed: Loss on Divestitures
−Removed: During the year ended December 31, 2023, we recognized a loss on the sale of businesses of $19.1 million.
−Removed: We determined the sale of the businesses did not meet the criteria for classification as discontinued operations.
−Removed: We received $21.1 million of proceeds, which are net of transaction fees and holdbacks.
−Removed: Income from Unconsolidated Investments
−Removed: Income from unconsolidated investments increased by $5.3 million for the year ended December 31, 2023 due to the net income attributable from our unconsolidated affiliates as a result of the deconsolidation of ASL.
−Removed: Subsequent to the deconsolidation of ASL, we anticipate that over the next few years these investments will become a growing source of income and operating cash flows.
+Added: Depreciation and amortization expense was $204.6 million for the year ended December 31, 2024 as compared to $208.9 for the year ended December 31, 2023, which was primarily due to a decrease in software amortization expenses and intangible assets amortization expense.
+Added: Income from Equity Method Investments
+Added: Income from equity method investments decreased by $3.1 million for the year ended December 31, 2024 due to the net income attributable from our investments in unconsolidated affiliates.
For additional information see Item 8.
−Removed: Financial Statements And Supplementary Data — Note 10.
−Removed: Operating Income (Loss)
+Added: Financial Statements and Supplementary Data — Note 11—Investments in Unconsolidated Affiliates.
+Added: Operating (Loss) Income from Continuing Operations
Year Ended December 31,
(amounts in thousands)
−Removed: Total operating income (loss)
−Removed: The change in operating income (loss) was primarily attributable to the non-cash goodwill and non-cash intangible asset impairment charges in the prior year and the gain on deconsolidation of ASL, partially offset by the charges in selling, general and administrative expenses and non-cash intangible asset impairment charges as described above.
+Added: Branded Services
+Added: Experiential Services
+Added: Retailer Services
+Added: Total operating (loss) income from continuing operations
+Added: In the Branded Services segment, the decrease in operating income to an operating loss for the year ended December 31, 2024 was primarily due to the goodwill impairments and the decrease in revenue noted above and an increase in costs associated with our internal reorganization activities combined with continued investment in our support services, including our technology solutions.
+Added: In the Experiential Services segment, the decrease in operating income for the year ended December 31, 2024 was due to an increase in costs associated with our internal reorganization activities combined with continued investment in our support services, including our technology solutions, partially offset by the increase in revenues as described above.
+Added: In the Retailer Services segment, the increase in operating income year ended December 31, 2024 was due to improved margins in our services partially offset by an increase in costs associated with our internal reorganization activities and continued investment in our support services, including our technology solutions.
Change in Fair Value of Warrant Liability
−Removed: Change in fair value of warrant liability represents $0.3 million of non-cash gain resulting from a fair value adjustment to the warrant liability for the private placement warrants for the year ended December 31, 2023.
+Added: Change in fair value of warrant liability represents $0.6 million and $0.3 million of non-cash income resulting from fair value adjustments to the warrant liability for the private placement warrants for the years ended December 31, 2024 and 2023, respectively.
Interest Expense, Net
−Removed: Interest expense, net increased $61.3 million, or 58.7%, to $165.8 million for the year ended December 31, 2023, from $104.5 million for the year ended December 31, 2022.
−Removed: The increase in interest expense, net was primarily due to the higher interest rates and a decrease in fair value in our derivative instruments, partially offset by gains associated with the repurchases of Term Loan Facility and Second Term debt for the year ended December 31, 2023.
−Removed: Benefit from Income Taxes
+Added: Interest expense, net decreased $18.9 million, or 11.4%, to $146.8 million for the year ended December 31, 2024, from $165.7 million for the year ended December 31, 2023.
+Added: The decrease in interest expense, net was primarily due to lower debt balances as a result of repurchases of Term Loan Facility and Senior Secured Notes as further described in “ Liquidity and Capital Resources—Description of Credit Facilities—Senior Secured Notes ”, partially offset by changes in the fair value of our derivative instruments during the year ended December 31, 2024.
+Added: Benefit from Income Taxes from Continuing Operations
Benefit from income taxes was $62.8 million for the year ended December 31, 2024 as compared to a benefit from income taxes of $37.6 million for the year ended December 31, 2023.
−Removed: The fluctuation was primarily attributable to the decrease in pre-tax loss for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
−Removed: In addition, the variance is explained by the non-cash goodwill impairment charge for the year ended December 31, 2022 and the deconsolidation of our European joint venture for the year ended December 31, 2023.
−Removed: Net loss was $60.3 million for the year ended December 31, 2023, compared to net loss of $1,377.3 million for the year ended December 31, 2022.
−Removed: The decrease in net loss was driven by the increase in operating income partially offset by the increase in interest expense as described above.
+Added: The fluctuation was primarily attributable to a larger pre-tax loss during the year ended December 31, 2024 compared to a smaller pre-tax loss during the year ended December 31, 2023.
+Added: Also contributing to the variance was the goodwill impairments during the year ended December 31, 2024 and the deconsolidation of our European joint venture during the year ended December 31, 2023.
+Added: The provision for income taxes from discontinued operations was $41.3 million for the year ended December 31, 2024, while the provision for income taxes from discontinued operations was $8.6 million for the year ended December 31, 2023.
+Added: Income tax expense for the year ended December 31, 2024 and 2023 was impacted primarily by the result of pre-tax income from discontinued operations and divested entities.
+Added: Net Loss from Continuing Operations
+Added: Net loss from continuing operations was $378.4 million for the year ended December 31, 2024, compared to net loss from continuing operations of $81.2 million for the year ended December 31, 2023.
+Added: The increase in net loss from continuing operations was primarily driven by goodwill and intangible asset impairment charges of $275.2 million during the year ended December 31, 2024, a
+Added: $62.7 million increase in costs associated with our internal reorganization and restructuring activities, largely related to professional fees and severance, partially offset by an $18.9 million decrease in interest expense and a $25.1 million increase in the benefit from income taxes.
+Added: Net Income from Discontinued Operations
+Added: Net income from discontinued operations was $53.6 million for the year ended December 31, 2024, compared to net income from discontinued operations of $20.8 million for the year ended December 31, 2023.
Adjusted Net Income
−Removed: The decrease in Adjusted Net Income for the year ended December 31, 2023 was attributable to the decrease in Adjusted EBITDA as described below coupled with the increase in interest expense.
−Removed: For a reconciliation of Adjusted Net Income to Net loss, see “ —Non-GAAP Financial Measures ”.
−Removed: Adjusted EBITDA and Adjusted EBITDA by Segment
+Added: The decrease in Adjusted Net Income for the year ended December 31, 2024 was attributable to the increase in Adjusted EBITDA as described below coupled with the decrease in interest expense.
+Added: For a reconciliation of Adjusted Net Income to Net loss from continuing operations, see “ —Non-GAAP Financial Measures ”.
+Added: Adjusted EBITDA from Continuing Operations and Adjusted EBITDA by Segment
Year Ended December 31,
(amounts in thousands)
−Removed: Total Adjusted EBITDA
−Removed: Adjusted EBITDA decreased $11.6 million, or 2.7% to $424.3 million for the year ended December 31, 2023, from $436.0 million for the year ended December 31, 2022.
−Removed: In the sales segment, the decrease in Adjusted EBITDA during the year ended December 31, 2023 was primarily attributable to decline in revenues and increase in cost of revenues, largely due to inflationary pressures, increase in incentive compensation and technology expenses.
−Removed: In the marketing segment, the increase in Adjusted EBITDA during the year ended December 31, 2023 was primarily attributable to the growth in revenues from the in-store sampling and demonstration services as described above, partially offset by headwinds in our higher-margin digital services.
−Removed: For a reconciliation of Adjusted EBITDA to net income (loss), see “—Non-GAAP Financial Measures .”
+Added: Branded Services
+Added: Experiential Services
+Added: Retailer Services
+Added: Total Adjusted EBITDA from Continuing Operations
+Added: Adjusted EBITDA from Continuing Operations was $356.0 million for the year ended December 31, 2024, compared to $352.2 million for the year ended December 31, 2023.
+Added: The increase in Adjusted EBITDA was primarily attributable to an increase in the Experiential Services segment.
+Added: In the Branded Services segment, the decrease was primarily attributable to the decline in revenues partially offset by the decline in cost of revenues as described above.
+Added: In the Experiential Services segment, the increase was driven largely by the growth in revenues from the in-store sampling and demonstration services offset by continued investment in our support services including our technology solutions.
+Added: In the Retailer Services segment, the increase was primarily attributable to increase in margins driven by price discipline.
+Added: For a reconciliation of Adjusted EBITDA from Continuing Operations to Net loss from continuing operations, see “—Non-GAAP Financial Measures.”
Non-GAAP Financial Measures
Adjusted Net Income is a non-GAAP financial measure.
−Removed: Adjusted Net Income means net (loss) income before (i) amortization of intangible assets, (ii) impairment of goodwill and indefinite-lived assets (iii) gain on deconsolidation of subsidiaries, (iv) loss on divestitures (v) equity-based compensation of Karman Topco L.P., (vi) changes in fair value of warrant liability, (vii) fair value adjustments of contingent consideration related to acquisitions, (viii) acquisition and divestiture related expenses, (iv) costs associated with COVID-19, net of benefits received, (x) net income attributable to noncontrolling interest, (xi) reorganization expenses, (xii) litigation expenses, (xiii) gain on repurchases of Term Loan Facility and Senior Secured Notes debt, (xiv) deferred financing fees, (xv) recovery from and costs associated with the Take 5 Matter, (xvi) other adjustments that management believes are helpful in evaluating our operating performance, and (xvii) related tax adjustments.
+Added: Adjusted Net Income means net loss from continuing operations before (i) net income attributable to noncontrolling interest, (ii) impairment of goodwill and indefinite-lived asset, (iii) gain on deconsolidation of subsidiaries, (iv) equity-based compensation of Karman Topco L.P., (v) changes in fair value of warrant liability, (vi) fair value adjustments of contingent consideration related to acquisitions, (vii) acquisition and divestiture related expenses, (viii) restructuring expenses, (ix) reorganization expenses, (x) litigation expenses, (xi) amortization of intangible assets, (xii) costs associated with COVID-19, net of benefits received, (xiii) gain on repurchases of Term Loan Facility and Senior Secured Notes debt, (xiv) costs associated with (recovery from) the Take 5 Matter, (xv) other adjustments that management believes are helpful in evaluating our operating performance, and (xvi) related tax adjustments.
We present Adjusted Net Income because we use it as a supplemental measure to evaluate the performance of our business in a way that also considers our ability to generate profit without the impact of items that we do not believe are indicative of our operating performance or are unusual or infrequent in nature and aid in the comparability of our performance from period to period.
−Removed: Adjusted Net Income should not be considered as an alternative for our net (loss) income, our most directly comparable measure presented on a GAAP basis.
−Removed: A reconciliation of Adjusted Net Income to Net (loss) income is provided in the following table:
+Added: Adjusted Net Income should not be considered as an alternative for our net loss from continuing operations, our most directly comparable measure presented on a GAAP basis.
+Added: Adjusted Net Income from Continuing Operations
+Added: A reconciliation of Adjusted Net Income from Continuing Operations to Net loss is provided in the following table:
Year Ended December 31,
(in thousands)
−Removed: Net (loss) income
−Removed: Net income attributable to noncontrolling interest
−Removed: Impairment of goodwill and indefinite-lived assets
+Added: Net loss from continuing operations
+Added: net income attributable to noncontrolling interests
+Added: Impairment of goodwill and indefinite-lived asset
Gain on deconsolidation of subsidiaries
−Removed: Loss on divestitures
−Removed: Change in fair value of warrant liability
Equity-based compensation of Karman Topco L.P.
−Removed: Fair value adjustments related to contingent consideration
−Removed: related to acquisitions (b)
+Added: Changes in fair value of warrant liability
+Added: Fair value adjustments related to contingent consideration related to acquisitions (b)
Acquisition and divestiture related expenses (c)
−Removed: Reorganization expenses (d)
−Removed: Litigation expenses (recovery) (e)
−Removed: Amortization of intangible assets (f)
−Removed: Costs associated with COVID-19, net of benefits received (g)
−Removed: Deferred financing fees (h)
+Added: Restructuring expenses (d)
+Added: Reorganization expenses (e)
+Added: Litigation expenses (recovery) (f)
+Added: Loss of disposal of assets
+Added: Amortization of intangible assets (g)
+Added: Costs associated with COVID-19, net of benefits received (h)
Gain on repurchases of Term Loan Facility and Senior Secured Notes debt (i)
−Removed: (Recovery from) costs associated with the Take 5 Matter (j)
+Added: Costs associated with the Take 5 Matter, net of (recoveries) (j)
Tax adjustments related to non-GAAP adjustments (k)
−Removed: Adjusted Net Income
−Removed: Adjusted EBITDA and Adjusted EBITDA by segment are supplemental non-GAAP financial measures of our operating performance.
−Removed: Adjusted EBITDA means net loss before (i) interest expense, net, (ii) (benefit from) provision for income taxes, (iii) depreciation, (iv) impairment of goodwill and indefinite-lived assets, (v) amortization of intangible assets, (vi) gain on deconsolidation of subsidiaries, (vii) loss on divestitures, (viii) equity-based compensation of Karman Topco L.P., (ix) changes in fair value of warrant liability, (x) stock-based compensation expense, (xi) fair value adjustments of contingent consideration related to acquisitions, (xii) acquisition and divestiture related expenses, (xiii) costs associated with COVID-19, net of benefits received, (xiv) EBITDA for economic interests in investments, (xv) reorganization expenses, (xvi) litigation expenses, (xvii) recovery from and costs associated with the Take 5 Matter and (xviii) other adjustments that management believes are helpful in evaluating our operating performance.
−Removed: We present Adjusted EBITDA and Adjusted EBITDA by segment because they are key operating measures used by us to assess our financial performance.
+Added: Adjusted Net Income from Continuing Operations
+Added: Represents expenses related to (i) equity-based compensation expense associated with grants of Common Series D Units of Topco made to one of the Advantage Sponsors and (ii) equity-based compensation expense associated with the Common Series C Units of Topco.
+Added: Represents adjustments to the estimated fair value of our contingent consideration liabilities related to our acquisitions, for the applicable periods.
+Added: Represents fees and costs associated with activities related to our acquisitions, divestitures, and related activities, including professional fees, due diligence, and integration activities.
+Added: Restructuring charges including programs designed to integrate and reduce costs intended to further improve efficiencies in operational activities and align cost structures consistent with revenue levels associated with business changes.
+Added: Restructuring expenses include costs associated with the VERP and special termination benefits associated with the 2024 RIF and other optimization initiatives.
+Added: Represents fees and costs associated with various internal reorganization activities, including professional fees, lease exit costs, severance, and nonrecurring compensation costs.
+Added: Represents legal settlements, reserves, and expenses that are unusual or infrequent costs associated with our operating activities.
+Added: Represents the amortization of intangible assets recorded in connection with the 2014 Topco Acquisition and our other acquisitions.
+Added: Represents (i) costs related to implementation of strategies for workplace safety in response to COVID-19, including employee-relief fund, additional sick pay for front-line teammates, medical benefit payments for furloughed teammates, and personal protective equipment;
+Added: and (ii) benefits received from government grants for COVID-19 relief.
+Added: Represents gains associated with the repurchases of Term Loan Facility and Senior Secured Notes, net of deferred financing fees related to repricing of Term Loan Facility.
+Added: For additional information, refer to Note 8— Debt to our consolidated financial statements for the years ended December 31, 2024 and 2023.
+Added: Represents cash receipts from an insurance policy for claims related to the Take 5 Matter and costs associated with investigation and remediation activities related to the Take 5 Matter, primarily professional fees and other related costs.
+Added: Represents the tax benefit associated with the adjustments above, taking into account the Company’s applicable tax rates, after excluding adjustments related to items that do not have a related tax impact.
+Added: Adjusted EBITDA
+Added: Adjusted EBITDA from Continuing Operations, Adjusted EBITDA from Discontinued Operations and Adjusted EBITDA by Segment are supplemental non-GAAP financial measures of our operating performance.
+Added: Adjusted EBITDA from Continuing Operations and Adjusted EBITDA from Discontinued Operations mean net loss from continuing operations before (i) interest expense (net), (ii) provision for (benefit from) income taxes, (iii) depreciation, (iv) amortization of intangible assets, (v) impairment of goodwill, (vi) changes in fair value of warrant liability, (vii) stock-based compensation expense, (viii) equity-based compensation of Karman Topco L.P., (ix) fair value adjustments of contingent consideration related to acquisitions, (x) acquisition and divestiture related expenses, (xi) (gain) loss on divestitures, (xii) restructuring expenses, (xiii) reorganization expenses, (xiv) litigation expenses (recovery), (xv) costs associated with COVID-19, net of benefits received, (xvi) costs associated with (recovery from) the Take 5 Matter, (xvii) EBITDA for economic interests in investments and (xviii) other adjustments that management believes are helpful in evaluating our operating performance.
+Added: Adjusted EBITDA by Segment means, with respect to each segment, operating income (loss) from continuing operations before (i) depreciation, (ii) amortization of intangible assets, (iii) impairment of goodwill, (iv) stock-based compensation expense, (v) equity-based compensation of Karman Topco L.P., (vi) fair value adjustments of contingent consideration related to acquisitions, (vii) acquisition and divestiture related expenses, (viii) restructuring expenses, (ix) reorganization expenses, (x) litigation expenses (recovery), (xi) costs associated with COVID-19, net of benefits received, (xii) costs associated with (recovery from) the Take 5 Matter, (xiii) EBITDA for economic interests in investments and (xiv) other adjustments that management believes are helpful in evaluating our operating performance, in each case, attributable to such segment.
+Added: Unallocated shared costs associated with discontinued operations from certain shared administrative functions, through the close of the discontinued operations;
+Added: excluded from income from discontinued operations as they are not a direct cost of the discontinued business but a result of indirect allocations, including but not limited to, information technology, human resources, finance and accounting, supply chain, and commercial operations.
+Added: Subsequent to the close of the divestitures, amounts attributable to unallocated shared costs would be mitigated through income from transition services agreements, subsequent strategic or restructuring initiatives, elimination of extraneous costs, or re-allocations or absorption of existing continuing operations.
+Added: See Note 2— Discontinued Operations, Deconsolidation of European Joint Venture, Divestitures and Acquisitions in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report for further details.
+Added: We present Adjusted EBITDA from Continuing Operations, Adjusted EBITDA from Discontinued Operations and Adjusted EBITDA by Segment because they are key operating measures used by us to assess our financial performance.
These measures adjust for items that we believe do not reflect the ongoing operating performance of our business, such as certain non-cash items, unusual or infrequent items or items that change from period to period without any material relevance to our operating performance.
We evaluate these measures in conjunction with our results according to GAAP because we believe they provide a more complete understanding of factors and trends affecting our business than GAAP measures alone.
−Removed: Furthermore, the agreements governing our indebtedness contain covenants and other tests based on measures substantially similar to Adjusted EBITDA.
−Removed: Neither Adjusted EBITDA nor Adjusted EBITDA by segment should be considered as an alternative for our net
−Removed: (loss) income or operating (loss) income, respectively, our most directly comparable measures presented on a GAAP basis.
+Added: Furthermore, the agreements governing our indebtedness contain covenants and other tests based on measures substantially similar to Adjusted EBITDA from Continuing Operations and Adjusted EBITDA from Discontinued Operations.
+Added: None of Adjusted EBITDA from Continuing Operations, Adjusted EBITDA from Discontinued Operations nor Adjusted EBITDA by Segment should be considered as an alternative for our Net income from discontinued operations, our most directly comparable measure presented on a GAAP basis.
Non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures.
Additionally, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore our non-GAAP measures may not be directly comparable to similarly titled measures of other companies.
−Removed: A reconciliation of Adjusted EBITDA to Net (loss) income is provided in the following table:
+Added: Reconciliation of Adjusted EBITDA from Continuing Operations to Net loss from continuing operations is provided in the following table:
+Added: Continuing Operations
Year Ended December 31,
(in thousands)
−Removed: Net (loss) income
+Added: Net loss from continuing operations
Interest expense, net
−Removed: (Benefit from) provision for income taxes
+Added: Benefit from income taxes from continuing operations
Depreciation and amortization
−Removed: Impairment of goodwill and indefinite-lived assets
−Removed: Gain on deconsolidation of subsidiaries, net
+Added: Impairment of goodwill and indefinite-lived asset
+Added: Gain on deconsolidation of subsidiaries
Loss on divestitures
−Removed: Change in fair value of warrant liability
+Added: Changes in fair value of warrant liability
+Added: Stock-based compensation expense (a)
Equity-based compensation of Karman Topco L.P.
−Removed: Fair value adjustments related to contingent consideration
−Removed: related to acquisitions (b)
−Removed: Acquisition and divestiture related expenses (c)
−Removed: Reorganization expenses (d)
−Removed: Litigation expenses (recovery) (e)
−Removed: Costs associated with COVID-19, net of benefits received (g)
−Removed: (Recovery from) costs associated with the Take 5 Matter (j)
−Removed: Stock-based compensation expense (l)
−Removed: EBITDA for economic interests in investments (m)
−Removed: Adjusted EBITDA
−Removed: Financial information by segment, including a reconciliation of Adjusted EBITDA by segment to operating (loss) income, the closest GAAP financial measure, is provided in the following table:
−Removed: Sales Segment
+Added: Fair value adjustments related to contingent consideration related to acquisitions (c)
+Added: Acquisition and divestiture related expenses (d)
+Added: Restructuring expenses (e)
+Added: Reorganization expenses (f)
+Added: Litigation (recovery) expenses (g)
+Added: Costs associated with COVID-19, net of benefits received (h)
+Added: Costs associated with the Take 5 Matter, net of (recoveries) (i)
+Added: EBITDA for economic interests in investments (j)
+Added: Adjusted EBITDA from Continuing Operations
+Added: Reconciliations of Adjusted EBITDA from Discontinued Operations to Net income from discontinued operations is provided in the following table:
+Added: Discontinued Operations
Year Ended December 31,
(in thousands)
+Added: Net income from discontinued operations, net of tax
+Added: Interest expense, net
+Added: Provision for income taxes from discontinued operations
+Added: Depreciation and amortization
+Added: (Gain) loss on divestitures (k)
+Added: Stock-based compensation expense (a)
+Added: Fair value adjustments related to contingent consideration related to acquisitions (c)
+Added: Acquisition and divestiture related expenses (d)
+Added: Reorganization expenses (f)
+Added: EBITDA for economic interests in investments (j)
+Added: Adjusted EBITDA from Discontinued Operations
+Added: Financial information by segment, including a reconciliation of Adjusted EBITDA by Segment to operating (loss) income is provided in the following table:
+Added: Branded Services segment
+Added: Year Ended December 31,
+Added: (in thousands)
Operating (loss) income
Depreciation and amortization
−Removed: Impairment of goodwill and indefinite-lived assets
+Added: Impairment of goodwill and indefinite-lived asset
Gain on deconsolidation of subsidiaries
Loss on divestitures
+Added: Stock-based compensation expense (a)
Equity-based compensation of Karman Topco L.P.
−Removed: Fair value adjustments related to contingent consideration
−Removed: related to acquisitions (b)
−Removed: Acquisition and divestiture related expenses (c)
−Removed: Reorganization expenses (d)
−Removed: Litigation expenses (recovery) (e)
−Removed: Costs associated with COVID-19, net of benefits received (g)
−Removed: Stock-based compensation expense (l)
−Removed: EBITDA for economic interests in investments (m)
−Removed: Sales Segment Adjusted EBITDA
−Removed: Marketing Segment
+Added: Fair value adjustments related to contingent consideration related to acquisitions (c)
+Added: Acquisition and divestiture related expenses (d)
+Added: Restructuring expenses (e)
+Added: Reorganization expenses (f)
+Added: Litigation expenses (g)
+Added: Costs associated with COVID-19, net of benefits received (h)
+Added: Costs associated with the Take 5 Matter, net of (recoveries) (i)
+Added: EBITDA for economic interests in investments (j)
+Added: Branded Services segment Adjusted EBITDA
+Added: Experiential Services segment
Year Ended December 31,
(in thousands)
+Added: Operating income (loss)
+Added: Depreciation and amortization
+Added: Impairment of goodwill and indefinite-lived asset
+Added: Stock-based compensation expense (a)
+Added: Equity-based compensation of Karman Topco L.P.
+Added: Fair value adjustments related to contingent consideration related to acquisitions (c)
+Added: Acquisition and divestiture related expenses (d)
+Added: Restructuring expenses (e)
+Added: Reorganization expenses (f)
+Added: Litigation expenses (recoveries) (g)
+Added: Costs associated with COVID-19, net of benefits received (h)
+Added: Experiential Services segment Adjusted EBITDA
+Added: Retailer Services segment
+Added: Year Ended December 31,
+Added: (in thousands)
Operating (loss) income
Depreciation and amortization
−Removed: Impairment of goodwill and indefinite-lived assets
−Removed: Loss on divestitures
+Added: Impairment of goodwill and indefinite-lived asset
+Added: Stock-based compensation expense (a)
Equity-based compensation of Karman Topco L.P.
−Removed: Fair value adjustments related to contingent consideration
−Removed: related to acquisitions (b)
−Removed: Acquisition and divestiture related expenses (c)
−Removed: Reorganization expenses (d)
−Removed: Litigation expenses (recovery) (e)
−Removed: Costs associated with COVID-19, net of benefits received (g)
−Removed: (Recovery from) costs associated with the Take 5 Matter (j)
−Removed: Stock-based compensation expense (l)
−Removed: EBITDA for economic interests in investments (m)
−Removed: Marketing Segment Adjusted EBITDA
−Removed: (a) Represents expenses related to (i) equity-based compensation expense associated with grants of Common Series D Units of Topco made to one of the Advantage Sponsors, and (ii) equity-based compensation expense associated with the Common Series C Units of Topco.
−Removed: (b) Represents adjustments to the estimated fair value of our contingent consideration liabilities related to our acquisitions, for the applicable periods.
−Removed: See Note 6— Other Liabilities to our audited consolidated financial statements for the year ended December 31, 2023.
−Removed: (c) Represents fees and costs associated with activities related to our acquisitions, divestitures, and related reorganization activities, including professional fees, due diligence, and integration activities.
−Removed: (d) Represents fees and costs associated with various internal reorganization activities, including professional fees, lease exit costs, severance, and nonrecurring compensation costs.
−Removed: (e) Represents legal settlements, reserves, and expenses that are unusual or infrequent costs associated with our operating activities.
−Removed: (f) Represents the amortization of intangible assets recorded in connection with the 2014 Topco Acquisition and our other acquisitions.
−Removed: (g) Represents (i) costs related to implementation of strategies for workplace safety in response to COVID-19, including employee-relief fund, additional sick pay for front-line associates, medical benefit payments for furloughed associates, and personal protective equipment;
+Added: Fair value adjustments related to contingent consideration related to acquisitions (c)
+Added: Acquisition and divestiture related expenses (d)
+Added: Restructuring expenses (e)
+Added: Reorganization expenses (f)
+Added: Litigation (recovery) expenses (g)
+Added: Costs associated with COVID-19, net of benefits received (h)
+Added: EBITDA for economic interests in investments (j)
+Added: Retailer Services segment Adjusted EBITDA
+Added: Represents non-cash compensation expense related to performance stock units, restricted stock units, and stock options under the 2020 Advantage Solutions Incentive Award Plan and the Advantage Solutions 2020 Employee Stock Purchase Plan.
+Added: Represents expenses related to (i) equity-based compensation expense associated with grants of Common Series D Units of Topco made to one of the Advantage Sponsors and (ii) equity-based compensation expense associated with the Common Series C Units of Topco.
+Added: Represents adjustments to the estimated fair value of our contingent consideration liabilities related to our acquisitions, for the applicable periods.
+Added: Represents fees and costs associated with activities related to our acquisitions, divestitures, and related reorganization activities, including professional fees, due diligence, and integration activities.
+Added: Restructuring charges including programs designed to integrate and reduce costs intended to further improve efficiencies in operational activities and align cost structures consistent with revenue levels associated with business changes.
+Added: Restructuring expenses include costs associated with the VERP and special termination benefits associated with the 2024 RIF and other optimization initiatives.
+Added: Represents fees and costs associated with various internal reorganization activities, including professional fees, lease exit costs, severance, and nonrecurring compensation costs.
+Added: Represents legal settlements, reserves, and expenses that are unusual or infrequent costs associated with our operating activities.
+Added: Represents (i) costs related to implementation of strategies for workplace safety in response to COVID-19, including employee-relief fund, additional sick pay for front-line teammates, medical benefit payments for furloughed teammates, and personal protective equipment;
and (ii) benefits received from government grants for COVID-19 relief.
−Removed: (h) Represents fees associated with the issuance of the indebtedness associated with our material debt agreements and the amendment of our term loan credit facility.
−Removed: For additional information, refer to Note 7— Debt of our audited consolidated financial statements for the year ended December 31, 2023.
−Removed: (i) Represents a gain associated with the repurchases of Term Loan Facility and Senior Secured Note debt.
−Removed: For additional information, refer to Note 7—Debt of our audited consolidated financial statements for the year ended December 31, 2023.
−Removed: (j) Represents cash receipts from an insurance policy for claims related to the Take 5 Matter and costs associated with investigation and remediation activities related to the Take 5 Matter, primarily, professional fees and other related costs.
−Removed: (k) Represents the tax provision or benefit associated with the adjustments above, taking into account the Company’s applicable tax rates, after excluding adjustments related to items that do not have a related tax impact.
−Removed: (l) Represents non-cash compensation expense related to PSUs, RSUs, and stock options under the 2020 Plan and the Advantage Solutions 2020 Employee Stock Purchase Plan.
−Removed: (m) Represents additions to reflect our proportional share of Adjusted EBITDA related to our equity method investments and reductions to remove the Adjusted EBITDA related to the minority ownership percentage of the entities that we fully consolidate in our financial statements.
+Added: Represents cash receipts from an insurance policy for claims related to the Take 5 Matter and costs associated with investigation and remediation activities related to the Take 5 Matter, primarily professional fees and other related costs.
+Added: Represents additions to reflect our proportional share of Adjusted EBITDA related to our equity method investments and reductions to remove the Adjusted EBITDA related to the minority ownership percentage of the entities that we fully consolidate in our financial statements.
+Added: Represents gains and losses on disposal of assets related to divestitures and losses on sale of businesses and assets held for sale, less cost to sell.
Liquidity and Capital Resources
−Removed: Our principal sources of liquidity were cash flows from operations, borrowings under the Revolving Credit Facility, and other debt.
−Removed: Our principal uses of cash are operating expenses, working capital requirements, acquisitions, interest on debt and repayment of debt.
+Added: Our principal sources of liquidity are cash flows from operations, borrowings under the Revolving Credit Facility, and other debt.
+Added: Our principal uses of cash are operating expenses, working capital requirements, acquisitions, interest on debt, repayment of debt and share repurchases.
+Added: Principal uses of cash used in investing activities includes our enterprise resource planning initiative, which includes upgrading our information system platform.
Share Repurchase Program
4 unchanged sentences
During the year ended December 31, 2024, we executed open market purchases of $34.1 million of our Class A common stock under the 2021 Share Repurchase Program.
−Removed: As of December 31, 2023, there remained $81.1 million of share repurchase availability under the 2021 Share Repurchase Program as of December 31, 2023.
−Removed: In December 2023, the Company entered into a trading plan under Rule 10b5-1 of the Exchange Act authorizing the repurchase of shares of the Company’s Class A common stock.
−Removed: No stock repurchases were made pursuant to this plan for the year ended December 31, 2023.
+Added: As of December 31, 2024, there remained $47.1 million of share repurchase availability under the 2021 Share Repurchase Program.
+Added: In December 2023, we entered into a trading plan under Rule 10b5-1 of the Exchange Act
+Added: authorizing the repurchase of shares of the Company’s Class A common stock.
+Added: From January 2, 2024 to April 24, 2024, we purchased 4.8 million shares of our Class A common stock.
+Added: In June 2024, we entered into another trading plan under Rule 10b5-1 of the Exchange Act authorizing the repurchase of shares of the Company’s Class A common stock.
+Added: From June 26, 2024 to August 13, 2024, we purchased 4.0 million shares of our Class A common stock.
We anticipate that our cash from operations, together with our current borrowing capacity, will be sufficient to fund purchases of our Class A common stock pursuant to the 2021 Share Repurchase Program and pay principal and interest as it comes due under our debt arrangements.
−Removed: A summary of cash provided by or used in our operating, investing and financing activities are shown in the following table:
+Added: A summary of cash provided by or used in our operating, investing and financing activities from continuing operations are shown in the following table:
Year Ended December 31,
1 unchanged sentence
Net cash provided by operating activities
−Removed: Net cash used in investing activities
+Added: Net cash provided by (used in) investing activities
Net cash used in financing activities
−Removed: Net effect of foreign currency fluctuations on cash
+Added: Net effect of foreign currency changes on cash, cash equivalents and restricted cash
Net change in cash, cash equivalents and restricted cash
Net Cash Provided by Operating Activities
−Removed: Net cash provided by operating activities during the year ended December 31, 2023, consisted of net loss of $60.3 million adjusted for certain non-cash items, including depreciation and amortization of $224.7 million, impairment charge of $43.5 million, loss on divestitures of $19.1 million, gain on deconsolidation of subsidiaries of $58.9 million, gain on repurchases of Term Loan Facility and Senior Secured Notes debt of $8.7 million, and effects of changes in working capital.
−Removed: Net cash provided by operating activities during the year ended December 31, 2022, consisted of net loss of $1,377.3 million adjusted for certain non-cash items, including depreciation and amortization of $233.1 million and effects of changes in working capital.
−Removed: The increase in cash provided by operating activities during the year ended December 31, 2023 relative to the same period in 2022 was primarily due to the increased need for working capital requirements to stand up our services during the year ended December 31, 2022.
+Added: Net cash provided by operating activities from continuing operations for the year ended December 31, 2024 consisted of net loss from continuing operations of $378.4 million adjusted for certain non-cash items, including impairment of goodwill and indefinite-lived asset of $275.2 million, gain on repurchases of Senior Secured Notes and Term Loan Facility, net of cost of extinguishments of $9.1 million, depreciation and amortization of $204.6 million, stock-based compensation of $31.0 million and effects of changes in working capital.
+Added: Net cash provided by operating activities from continuing operations during the year ended December 31, 2023, consisted of net loss of $81.2 million adjusted for certain non-cash items, including depreciation and amortization of $208.9 million, impairment charges of $43.5 million, gain on deconsolidation of subsidiaries of $58.9 million, stock-based compensation of $38.9 million, fair value adjustments related to contingent consideration of $11.2 million, gain on repurchases of Term Loan Facility and Senior Secured Notes debt of $8.7 million and effects of changes in working capital.
+Added: Net cash provided by operating activities from discontinued operations during the year ended December 31, 2024, consisted of net income of $53.7 million adjusted for certain non-cash items, including gain on divestitures of $95.3 million and effects of changes in working capital.
+Added: Net cash provided by operating activities from discontinued operations during the year ended December 31, 2023, consisted of net income of $20.9 million adjusted for certain non-cash items, including depreciation and amortization of $15.8 million, loss on divestitures of $19.1 million and effects of changes in working capital.
Net Cash Used in Investing Activities
−Removed: For the years ended December 31, 2023 and 2022, our net cash used in investing activities primarily consisted of the purchase of property and equipment of $46.3 million and $40.5 million, respectively.
−Removed: For the year ended December 31, 2023 our net cash used in investing activities included the deconsolidation of subsidiaries, net of proceeds of $31.5 million, partially offset by proceeds from divestitures of $21.1 million.
−Removed: Additionally, we invest cash for the purchase of property and equipment to support our employee and overall growth in our business.
−Removed: We expect that we will make additional capital expenditures and investments in the future to support the future growth of our business including our enterprise resource planning software.
+Added: Net cash provided by investing activities from continuing operations for the year ended December 31, 2024 primarily consisted of the proceeds from divestitures of $275.7 million, partially offset by the purchase of property and equipment and capitalized software of $55.3 million, primarily related to our ERP initiative, which includes upgrading our information system platform, and the purchase of investments in unconsolidated affiliates of $13.9 million.
+Added: Net cash provided by investing activities from continuing operations for the year ended December 31, 2023 included the deconsolidation of subsidiaries, net of proceeds of $31.5 million and purchases of property and equipment of $41.6 million, partially offset by proceeds from divestitures of $21.1 million.
+Added: Net cash used in investing activities from discontinued operations for the year ended December 31, 2024 consisted of purchases of property and equipment of $2.5 million and divestitures of cash and cash equivalents and restricted cash of $4.8 million.
+Added: Net cash used in investing activities from discontinued operations for the year ended December 31, 2023 consisted of purchases of property and equipment of $4.7 million.
Net Cash Used in Financing Activities
2 unchanged sentences
Additionally, many of our acquisition agreements include contingent consideration arrangements, which are generally based on the achievement of future financial performance by the operations attributable to the acquired companies.
−Removed: The portion of the cash payment up to the acquisition date fair
−Removed: value of the contingent consideration liability are classified as financing outflows, and amounts paid in excess of the acquisition date fair value of that liability are classified as operating outflows.
+Added: The portion of the cash payment up to the acquisition date fair value of the contingent consideration liability are classified as financing outflows, and amounts paid in excess of the acquisition date fair value of that liability are classified as operating outflows.
From time to time, we may voluntarily repurchase our long-term debt to deploy capital that deleverages our balance sheet while generating a favorable rate of return.
−Removed: Cash flows used in financing activities during the year ended December 31, 2023 were primarily related to repurchases of Term Loan Facility and Senior Secured Notes debt of $156.6 million, repayment of principal on our Term Loan Facility of $13.6 million, payments of contingent consideration and holdback payments of $6.8 million, and open market purchases of $6.4 million of our Class A common stock under the 2021 Share Repurchase Program.
−Removed: This was partially offset by $1.3 million of proceeds from a government loan for COVID-19 relief and $2.2 million related to proceeds from shares issued under the 2020 Employee Stock Purchase Plan.
−Removed: Cash flows used in financing activities during the year ended December 31, 2022 were primarily related to payments of contingent consideration and holdback payments of $34.2 million, repayment of principal on our Term Loan Facility of $13.4 million, partially offset by $3.3 million related to our 2020 Employee Stock Purchase Plan and $5.2 million of contribution from noncontrolling interest.
+Added: Cash flows used in financing activities from continuing operations during the year ended December 31, 2024 were primarily related to repurchases of Senior Secured Notes and Term Loan Facility of $147.1 million, repayment of principal on our Term Loan Facility of $13.1 million, payments for taxes related to net share settlement of $12.8 million, payments of contingent consideration of $5.7 million and payments related to the share repurchase program of $34.1 million.
+Added: Cash flows used in financing activities from continuing operations during the year ended December 31, 2023 were primarily related to repurchases of Term Loan Facility and Senior Secured Notes debt of $156.6 million, repayment of principal on our Term Loan Facility of $13.5 million, payments of contingent consideration and holdback payments of $5.8 million, and open market purchases of $6.4 million of our Class A common stock under the 2021 Share Repurchase Program.
+Added: This was partially offset by $2.2 million related to proceeds from shares issued under the 2020 Employee Stock Purchase Plan.
+Added: Cash flows used in financing activities from discontinued operations during the year ended December 31, 2024 were primarily related to contingent consideration payments of $4.4 million.
+Added: Cash flows provided by financing activities from discontinued operations during the year ended December 31, 2023 were primarily related to proceeds from government loans for COVID-19 relief, partially offset by principal payments on long-term debt and holdback payments.
Description of Credit Facilities
Senior Secured Credit Facilities
−Removed: Effective October 28, 2020, Advantage Sales & Marketing Inc., an indirect wholly-owned subsidiary of the Company (the “Borrower”), entered into the Senior Secured Credit Facilities consisting of (i) the Revolving Credit Facility, which is a senior secured asset-based revolving credit facility in an aggregate principal amount of up to $400.0 million, subject to borrowing base capacity and (ii) the Term Loan Facility, which is a secured first lien term loan credit facility in an aggregate principal amount of $1.325 billion.
+Added: Advantage Sales & Marketing Inc.
+Added: (the “Borrower”), our indirect wholly-owned subsidiary of the Company, has (i) a senior secured asset-based revolving credit facility in an aggregate principal amount of up to $500.0 million, subject to borrowing base capacity (as may be amended from time to time, the “Revolving Credit Facility”) and (ii) a secured first lien term loan credit facility in an aggregate principal amount of $1.1 billion (as may be amended from time to time, the “Term Loan Facility” and together with the Revolving Credit Facility, the “Senior Secured Credit Facilities”).
Revolving Credit Facility
10 unchanged sentences
The applicable margins for the Revolving Credit Facility are 1.75%, 2.00% or 2.25%, with respect to Term SOFR or Alternative Currency Spread rate borrowings and 0.75%, 1.00%, or 1.25%, with respect to base rate or Canadian Prime Rate borrowings, in each case depending on average excess availability under the Revolving Credit Facility.
−Removed: The Borrower’s ability to draw under the Revolving Credit Facility or issue letters of credit thereunder will be conditioned upon, among other things, the Borrower’s delivery of prior written notice of a borrowing or issuance, as applicable, the Borrower’s ability to reaffirm the representations and warranties contained in the credit agreement governing the Revolving Credit Facility and the absence of any default or event of default thereunder.
+Added: The Borrower’s ability to draw under the Revolving Credit Facility or
+Added: issue letters of credit thereunder will be conditioned upon, among other things, the Borrower’s delivery of prior written notice of a borrowing or issuance, as applicable, the Borrower’s ability to reaffirm the representations and warranties contained in the credit agreement governing the Revolving Credit Facility and the absence of any default or event of default thereunder.
The Borrower’s obligations under the Revolving Credit Facility are guaranteed by Karman Intermediate Corp.
15 unchanged sentences
Dollar LIBOR will eventually be replaced with SOFR or another interest rate benchmark to reflect the most recent standards and practices used in the industry.
−Removed: On December 2, 2022, Borrower, Holdings and certain of the Borrower’s subsidiaries, entered into the Second Amendment to ABL Revolving Credit Agreement (the “Second Amendment”), which amends the Revolving Credit Agreement, by and among the Borrower, Holdings, the lenders from time to time party thereto and Bank of America, as administrative agent, and the other parties thereto.
−Removed: The Second Amendment was entered into by the Borrower to amend certain terms and provisions of the Second Agreement, including, among other things:
+Added: On December 2, 2022, Borrower, Holdings and certain of the Borrower’s subsidiaries, entered into the Second Amendment to ABL Revolving Credit Agreement (the “Second Amendment”), which amends the ABL Revolving Credit Agreement, by and among the Borrower, Holdings, the lenders from time to time party thereto and Bank of America, as administrative agent, and the other parties thereto.
+Added: The Second Amendment was entered into by the Borrower to amend certain terms and provisions of the ABL Revolving Credit Agreement, including, among other things:
(i) increasing the aggregate amount of maximum revolving commitments available from $400.0 million to $500.0 million;
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dollars in an aggregate principal amount of $1.106 billion.
−Removed: Borrowings under the Term Loan Facility amortize in equal quarterly installments in an amount equal to 1.00% per annum of the principal amount.
+Added: Borrowings under the Term Loan Facility amortize in equal quarterly installments in an amount equal to 1.00% per
+Added: annum of the principal amount.
Borrowings will bear interest at a floating rate of Term SOFR plus an applicable margin of 4.25% per annum, subject to additional spread adjustment on SOFR ranging from 0.11% to 0.26%.
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The Term Loan Facility has a first- priority lien on the fixed asset collateral (equal in priority with the liens securing the Notes) and a second-priority lien on security interests in the current asset collateral (second in priority to the liens securing the Revolving Credit Facility), in each case, subject to other permitted liens.
−Removed: The Term Loan Facility contains certain customary negative covenants, including, but not limited to, restrictions on the Borrower’s ability and that of our restricted subsidiaries to merge and consolidate with other companies, incur indebtedness, grant
−Removed: liens or security interests on assets, pay dividends or make other restricted payments, sell or otherwise transfer assets or enter into transactions with affiliates.
+Added: The Term Loan Facility contains certain customary negative covenants, including, but not limited to, restrictions on the Borrower’s ability and that of our restricted subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, pay dividends or make other restricted payments, sell or otherwise transfer assets or enter into transactions with affiliates.
The Term Loan Facility provides that, upon the occurrence of certain events of default, the Borrower’s obligations thereunder may be accelerated.
2 unchanged sentences
1 to the First Lien Credit Agreement (the “First Lien Amendment”), which amended the First Lien Credit Agreement, dated October 28, 2020, by and among the Borrower, Holdings, Bank of America, as administrative agent and collateral agent, each lender party from time-to-time thereto, and the other parties thereto.
−Removed: The First Lien Amendment was entered into by the Borrower to reduce the applicable interest rate on the term loan to 5.25% per annum, resulting in estimated interest savings of approximately $9.9 million or $7.3 million, net of tax, per annum.
+Added: The First Lien Amendment was entered into by the Borrower to reduce the applicable interest rate on the term loan from 5.25% to 4.50% per annum, resulting in estimated interest savings of approximately $9.9 million or $7.3 million, net of tax, per annum.
Additional terms and provisions amended include (i) resetting the period for six months following October 28, 2021 in which a 1.00% prepayment premium shall apply to any prepayment of the term loan in connection with certain repricing events, and (ii) updating the provisions by which U.S.
2 unchanged sentences
Dollar LIBOR provisions with SOFR, effective June 30, 2023.
+Added: 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;
+Added: 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).
Senior Secured Notes
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and lack of perfection of liens on a material portion of the collateral, in each case subject to applicable grace periods.
−Removed: Future Cash Requirements
−Removed: The following summarizes future cash requirements as of December 31, 2023:
+Added: Contractual Obligations
+Added: The following summarizes our contractual obligations as of December 31, 2024:
(in thousands)
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Other long-term liabilities on the consolidated balance sheets
−Removed: Contingent consideration (4)
Unpaid claims (4)
+Added: Restructuring and reorganization (5)
Total contractual obligations
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Total debt excluding deferred issuance costs does not include the obligation of future interest payments.
−Removed: (4) Refer to Note 6 — Other Liabilities of our audited consolidated financial statements for the year ended December 31, 2023 for additional information regarding the contingent consideration liabilities.
(4) Represents $59.4 million of an estimated liability under our workers’ compensation programs for claims incurred but unpaid and $10.3 million of employee insurance reserves as of December 31, 2024.
+Added: (5) Refer to Note 7— Restructuring of our audited consolidated financial statements for the year ended December 31, 2024 for additional information regarding our restructuring and reorganization activities.
Cash and Cash Equivalents Held Outside the United States
As of December 31, 2024, and 2023, $65.0 million and $44.0 million, respectively, of our cash and cash equivalents were held by foreign subsidiaries.
−Removed: The decrease in cash and cash equivalents held by foreign subsidiaries during the year ended December 31, 2023 was due to the deconsolidation of ASL.
+Added: The increase in cash and cash equivalents held by foreign subsidiaries during the year ended December 31, 2024 was primarily due to an increase in cash held by our Canadian subsidiary.
As of December 31, 2024 and 2023, $18.5 million and $24.6 million, respectively, of our cash and cash equivalents were held by foreign branches.
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We have continued to assert indefinite reinvestment on all other earnings as it is necessary for continuing operations and to grow the business.
−Removed: If at a point in the future our assertion changes, we will evaluate tax-efficient means to repatriate the income.
+Added: If at a point in the future our assertion changes, we will evaluate tax-efficient means to repatriate the earnings.
In addition, we expect existing domestic cash and cash flows from operations to continue to be sufficient to fund our domestic operating activities and cash commitments for investing and financing activities, such as debt repayment and capital expenditures, for at least the next 12 months and thereafter for the foreseeable future.
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These alternatives could result in higher income tax expense or increased interest expense.
−Removed: We consider the majority of the undistributed earnings of our foreign subsidiaries, as of December 31, 2023, to be indefinitely reinvested and, accordingly, no provision has been made for taxes in excess of the $0.4 million noted above.
+Added: Excluding Canada, we consider the remaining undistributed earnings of our foreign subsidiaries, as of December 31, 2024, to be indefinitely reinvested and, accordingly, no provision has been made for taxes in excess of the $0.6 million noted above.
Off-Balance Sheet Arrangements
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Revenue Recognition
−Removed: We recognize revenues when control of promised goods or services are transferred to the client in an amount that reflects the consideration that we expect to be entitled to in exchange for such goods or services.
−Removed: Substantially all of our contracts with clients involve the transfer of a service to the client, which represents the performance obligation that is satisfied over time because the client simultaneously receives and consumes the benefits of the services provided.
−Removed: In most cases, the contracts include a performance obligation that is comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer ( i .
−Removed: e ., distinct days of service).
−Removed: We allocate variable consideration to each period of service to which it relates.
−Removed: Revenues related to the sales segment are primarily recognized in the form of commissions, fee-for-service or on a cost-plus basis for providing headquarter relationship management, analytics, insights and intelligence services, administrative services, retail services, retailer client relationships and in-store media programs and digital technology solutions (which include our business intelligence solutions, e-commerce services and content services).
−Removed: Marketing segment revenues are primarily recognized in the form of a fee-for-service (including retainer fees, fees charged to clients based on hours incurred, project-based fees or fees for executing in-person consumer engagements or experiences, which engagements or experiences we refer to as events), commissions or on a cost-plus basis for providing experiential marketing, shopper and consumer marketing services, private label development and our digital, social and media services.
+Added: We recognize revenue when control of promised goods or services is transferred to the client in an amount that reflects the consideration that we expect to be entitled to in exchange for such goods or services.
+Added: Substantially all of our contracts with clients involve the transfer of a service to the client, which represents a performance obligation that is satisfied over time because the client simultaneously receives and consumes the benefits of the services provided.
+Added: In most cases, the contracts provide for a performance obligation that is comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service).
+Added: For these contracts, we allocate the ratable portion of the consideration based on the services provided in each period of service to such period.
+Added: Revenues related to the Branded Services segment are primarily recognized in the form of commissions, fee-for-service and cost-plus fees for providing headquarter relationship management, execution of merchandising strategies and omni-commerce marketing services.
+Added: Revenues within the Branded Services segment are further disaggregated between brokerage services, branded merchandising services, omni-commerce marketing services, and revenues related to our European joint venture (prior to the deconsolidation during fiscal year 2023).
+Added: Brokerage services revenues are primarily outsourced sales and services for branded consumer goods manufacturers at retailer headquarters, in-store and online.
+Added: Branded merchandising services relate to merchandising in-store and online for branded consumer goods manufacturers.
+Added: Omni-commerce marketing services primarily relate to digital and field marketing services.
+Added: Experiential Services segment revenues are primarily recognized in the form of fee-for-service and cost-plus fees for providing in-store, digital sampling and demonstrations, where we manage highly customized, large-scale sampling programs for leading brands and retailers.
+Added: Retailer Services segment revenues are primarily recognized in the form of commissions, fee-for-service and cost-plus fees for providing consulting services related to private brand development, the execution of merchandising strategies and marketing strategies within retailer locations, including retail media networks and analyzing shopper behavior.
+Added: Revenues within the Retailer Services segment are further disaggregated between advisory services, retailer merchandising services and agency services to retailers.
+Added: Advisory services primarily consist of consulting services related to private brand development.
+Added: Retailer merchandising services primarily relate to the execution of merchandising strategies.
+Added: Agency services primarily consist of providing marketing strategies within retail locations.
Our revenue recognition policies generally result in recognition of revenues at the time services are performed.
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We recognize revenue related to variable consideration if it is probable that a significant reversal of revenue recognized will not occur.
−Removed: When such probable threshold is not satisfied, we will constrain some or all of the variable consideration, and such constrained amount will not be recognized as revenue until the probable threshold is met or the uncertainty is resolved and the final amount is known.
+Added: When such probable
+Added: threshold is not satisfied, we will constrain some or all of the variable consideration, and such constrained amount will not be recognized as revenue until the probable threshold is met or the uncertainty is resolved and the final amount is known.
We record an adjustment to revenue for differences between estimated revenues and the amounts ultimately invoiced to the client.
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While we primarily act as a principal in our arrangements and report revenues on a gross basis, given the varying terms of our client contracts, we will occasionally act as an agent and in such instances present revenues on a net basis.
−Removed: For example, for certain advertising arrangements, our clients purchase media content in advance, and we do not take on any risk of recovering the cost to acquire the media.
−Removed: As a result, we determined we act as the agent in these arrangements and record revenues and their related costs on a net basis as its agency services are performed.
−Removed: However, in cases where media is not purchased in advance by our clients, we record such revenues and the related costs on a gross basis, as we bear the risk of recovering the costs to acquire the media and are responsible for fulfillment of the services.
−Removed: We record revenues from sales of services and the related direct costs in accordance with the accounting guidance on reporting revenue gross as a principal versus net as an agent.
−Removed: In situations where we act as a principal in the transaction, we report gross revenues and cost of revenues.
−Removed: When we act as an agent, we report the revenues and their related costs on a net basis.
Goodwill represents the excess of the purchase price over the fair value of the net identifiable tangible and intangible assets acquired in an acquisition.
We test for impairment of goodwill at the reporting unit level.
−Removed: We generally combine components that have similar economic characteristics, nature of services, types of clients, distribution methods and regulatory environment.
−Removed: We have two reporting units, sales and marketing, which are also our operating segments.
−Removed: We test our goodwill for impairment at the beginning of the fourth quarter of a given fiscal year, and whenever events or changes in circumstances indicate that the carrying value of a reporting unit may exceed its fair value.
−Removed: We have the option to perform a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying value before performing a quantitative impairment test.
−Removed: To the extent that the qualitative approach indicates that it is more likely than not that the carrying amount is less than its fair value, we apply a quantitative approach.
−Removed: When it is determined that a quantitative impairment test should be performed, if the fair value of the reporting unit is less than its carrying amount, goodwill is impaired and the excess of the reporting unit’s carrying value over the fair value is recognized as an impairment loss;
−Removed: however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit.
−Removed: Our annual goodwill impairment assessment for each year is performed effective as of October 1.
+Added: We generally combine components that have similar economic characteristics, nature of services, types of client, distribution methods and regulatory environment.
+Added: In connection with the Company’s reorganization and the associated change in operating segments, the Company reassessed its reporting units and concluded that it has five reporting units (Branded Services, Branded Agencies, Experiential Services, Merchandising and Retailer Agencies).
+Added: As a result, the Company performed the required impairment assessments directly before and immediately after the change in reporting units as of January 1, 2024.
+Added: 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.
+Added: The fair values of the Branded Agencies and Experiential Services reporting units exceeded their respective carrying values by less than 20%.
+Added: During the second quarter of fiscal year 2024, we 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.
+Added: Additionally, during the fourth quarter of fiscal year 2024, we determined a triggering event occurred and an impairment assessment was warranted for the Branded Services reporting unit goodwill due to the loss of clients and a reduction in the scope of client services as our clients implemented internal cost reduction initiatives in response to challenges in the broader markets in which they operate.
We utilize a combination of income and market approaches to estimate the fair value of our reporting units.
−Removed: The income approach utilizes estimates of discounted cash flows of the reporting units, which requires assumptions for, the reporting units’ revenue growth rates, earnings before interest, taxes, depreciation and amortization (“EBITDA”) margins, terminal growth rate, discount rate, and incremental net working capital, all of which require significant management judgment.
+Added: The income approach utilizes estimates of discounted cash flows of the reporting units, which requires assumptions for the reporting units’ revenue growth rates, earnings before interest, taxes, depreciation and amortization (“EBITDA”) margins, terminal growth rates, discount rates, and incremental net working capital, all of which require significant management judgment.
The market approach applies market multiples derived from the historical earnings data of selected guideline publicly-traded companies to our reporting units’ businesses to yield a second assumed value of each reporting unit, which requires significant management judgment.
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We also compare the aggregate estimated fair value of our reporting units to the estimated value of our total market capitalization.
−Removed: 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 (described in “ Fair Value Measurements in Note 1, Organization and Significant Accounting Policies,”).
+Added: 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.
We based our fair value estimates on assumptions we believe to be reasonable but which are unpredictable and inherently uncertain.
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Additionally, if actual results are not consistent with the estimates and assumptions or if there are significant changes to our planned strategy, it may cause fair value to be less than the carrying amounts and result in an impairment of goodwill in the future.
−Removed: In connection with our annual quantitative impairment test effective as of October 1, 2023, we concluded that our goodwill was not impaired as of October 1, 2023.
−Removed: The fair value of the sales reporting unit exceeded its carrying value by 19.1% as of October 1, 2023.
−Removed: The fair value of the marketing reporting unit exceeded its carrying value by 6.8% as of October 1, 2023.
−Removed: Indefinite-Lived Assets
−Removed: Our indefinite-lived intangible assets are comprised of our sales and marketing trade names.
−Removed: 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.
+Added: During the second quarter of fiscal year 2024, we 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.
+Added: As a result of the impairment test performed, we recognized a goodwill impairment charge of $99.7 million related to the Company's Branded Agencies reporting unit goodwill during the year ended December 31, 2024, which has been reflected in “Impairment of goodwill and indefinite-lived asset” in the Consolidated Statements of Operations and Comprehensive Loss.
+Added: As a result of this charge, an immaterial amount of goodwill remains in this reporting unit.
+Added: The following table represents a sensitivity analysis on the goodwill impairment charge (under the income approach without consideration to the market approach) for the Branded Agencies reporting unit depicting the percent increase in the $99.7 million charge had the fair value been estimated with a 0.5% increase in the discount rate used, a 1.0% decrease in the long-term growth rate and a 1.0% increase in the net working capital assumptions used at May 31, 2024.
+Added: Assumption Change
+Added: % Increase in Impairment Charge
+Added: 0.5% increase in discount rate
+Added: 1.0% decrease in long-term growth rate
+Added: 1.0% increase in incremental working capital
+Added: In connection with the annual quantitative impairment test as of October 1, 2024, we concluded that the goodwill was not impaired as of October 1, 2024.
+Added: Additionally, no triggering events were identified for the Branded Agencies, Experiential Services, Merchandising and Retailer Agencies reporting units through December 31, 2024.
+Added: The fair values of the Branded Services, Branded Agencies and Merchandising reporting units exceeded their respective carrying values by less than 20%.
+Added: During the fourth quarter of fiscal year 2024, the Company identified a triggering event that required an impairment assessment of goodwill for the Branded Services reporting unit.
+Added: The triggering event was due to the loss of clients and a reduction in the scope of client services as the Company’s clients implemented internal cost reduction initiatives in response to challenges in the broader markets in which they operate.
+Added: As a result of the goodwill impairment test, the Company recognized a goodwill impairment charge of $133.5 million related to the Branded Services reporting unit during the year ended December 31, 2024.
+Added: This charge is reflected in “Impairment of goodwill and indefinite-lived asset” in the Consolidated Statements of Operations and Comprehensive Loss.
+Added: The following table represents a sensitivity analysis on the goodwill impairment charge (under the income approach without consideration to the market approach) for the Branded Services reporting unit depicting the percent increase in the $133.5 million charge had the fair value been estimated with a 0.1% increase in the discount rate used, a 0.1% decrease in the long-term growth rate and a 1.0% increase in the net working capital assumptions used at December 31, 2024.
+Added: Under each of the sensitivity scenarios presented, the resulting impairment charge would fully reduce the goodwill balance of the Branded Services reporting unit to zero as of December 31, 2024.
+Added: Assumption Change
+Added: % Increase in Impairment Charge
+Added: 0.1% increase in discount rate
+Added: 0.1% decrease in long-term growth rate
+Added: 1.0% increase in incremental working capital
+Added: The uncertainty and volatility in the economic environment which we operate could have an impact on our future growth and could result in future impairment charges.
+Added: There is no assurance that actual future earnings, cash flows or other assumptions for the reporting units will not significantly decline from these projections.
+Added: Indefinite-Lived Asset
+Added: Our indefinite-lived intangible asset is comprised of our trade name.
+Added: The intangible asset with an indefinite useful life is 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.
We have the option to perform a qualitative assessment of whether it is more likely than not that the indefinite-lived intangible asset’s fair value is less than its carrying value before performing a quantitative impairment test.
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The estimates used in the determination of fair value are subjective in nature and involve the use of significant assumptions.
−Removed: These estimates and assumptions include revenue growth rates, terminal growth rate, discount rates and royalty rate.
−Removed: which requires significant management judgment.
+Added: These estimates and assumptions include revenue growth rates, terminal growth rate, discount rates and royalty rate, which requires significant management judgment.
The assumptions are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy.
1 unchanged sentence
Actual future results may differ from the estimates.
−Removed: In connection with our annual quantitative impairment test effective as of October 1, 2023, we concluded that our indefinite-lived intangible assets were not impaired.
−Removed: The fair value of the indefinite-lived intangible asset related to sales trade name exceeded its carrying value by 23.2% as of October 1, 2023.
−Removed: The fair value of the indefinite-lived intangible asset related to marketing trade name exceeded its carrying value by 6.9% as of October 1, 2023.
−Removed: Notwithstanding the foregoing, during the fourth quarter of 2023, we determined a triggering event occurred and an impairment assessment was warranted for the sales indefinite-lived trade name due to the deconsolidation of our European joint venture and the planned divestitures of a collection of foodservice businesses.
−Removed: As a result, we recognized non-cash intangible asset impairment charges of $43.5 million related to our indefinite-lived sales trade name during the year ended December 31, 2023, which has been reflected in “Impairment of goodwill and indefinite-lived assets” in the Consolidated Statements of Comprehensive (Loss) Income.
−Removed: Additionally, during the fourth quarter of 2023, we determined a triggering event occurred and an impairment assessment was warranted for the marketing indefinite-lived trade name due to the planned divestitures of a collection of foodservice businesses.
−Removed: fair value of the indefinite-lived intangible asset related to marketing trade name exceeded its carrying value by 17.0% for the year ended December 31, 2023.
−Removed: The following table represents a sensitivity analysis on the indefinite-lived sales trade name intangible asset depicting the percent increase in the $43.5 million charge related to the indefinite-lived sales trade name had the fair value been estimated with a 0.1% increase in the discount rate used and a 0.1% decrease in the royalty rate used at December 31, 2023.
+Added: In connection with our annual quantitative impairment tests as of October 1, 2024 and 2023, we concluded that our indefinite-lived intangible asset was not impaired.
+Added: During the fourth quarter of December 31, 2024, we recognized an intangible asset impairment charge of $42.0 million as a result of the triggering event for the Branded Services reporting unit.
+Added: The following table represents a sensitivity analysis on the indefinite-lived trade name intangible asset depicting the percent increase in the $42.0 million charge related to the indefinite-lived trade name had the fair value been estimated with a 0.1% increase in the discount rate used and a 0.1% decrease in the royalty rate used at December 31, 2024.
Assumption Change
% Increase in Impairment Charge
−Removed: Sales Trade Name
0.5% increase in discount rate
−Removed: 0.1% decrease in royalty rate
+Added: 0.1% increase in royalty rate
+Added: During the fourth quarter of fiscal year 2023, we determined a triggering event occurred and an impairment assessment was warranted for our indefinite-lived trade name due to the deconsolidation of our European joint venture and the planned divestitures of a collection of foodservice businesses.
+Added: As a result, we recognized an intangible asset impairment charge of $43.5 million related to our indefinite-lived trade name during the year ended December 31, 2023, which has been reflected in “Impairment of goodwill and indefinite-lived asset” in the Consolidated Statements of Operations and Comprehensive Loss.
Stock-Based Compensation
−Removed: Performance restricted stock units (“PSUs”) are subject to the achievement of certain performance conditions based on our revenues and Adjusted EBITDA targets in the respective measurement period and the recipient’s continued service to us.
+Added: Performance restricted stock units (“PSUs”) are subject to the achievement of certain performance conditions based on measurements of our Adjusted EBITDA margin and cash earnings in the respective measurement period and the recipient’s continued service to us.
The PSUs are scheduled to vest over a three-year period from the date of grant and may vest from 0% to 200% of the number of shares.
−Removed: The number of PSUs earned is adjusted to be proportional to the partial performance between the Threshold Goals, Target Goals and Maximum Goals.
The fair value of PSU grants was equal to the closing price of our stock on the date of the applicable grant.
Restricted stock units (“RSUs”) are subject to the recipient’s continued service to us.
−Removed: The RSUs are generally scheduled to vest over three years and are subject to the provisions of the RSU agreement under the Advantage Solutions.
+Added: The RSUs are generally scheduled to vest in increments of one-third over a three year period and are subject to the provisions of the RSU agreement under the Advantage Solutions.
2020 Incentive Award Plan, as amended and restated (the “Plan”).
−Removed: Equity-based compensation of Karman Topco L.P.
−Removed: Topco, our current majority stockholder, has a long-term equity incentive plan that allows for the grant of time-and performance-based profit interests, or Common Series C Units, in Topco to certain of its and its subsidiaries’ directors and employees in exchange for services provided to us.
−Removed: Since we receive the benefit associated with such services the related expense is recorded within our Consolidated Statements of Operations and Comprehensive (Loss) Income.
−Removed: We recognized a non-cash compensation gain related to forfeitures of $3.7 million and $2.9 million for the years ended December 31, 2023 and 2022, respectively.
−Removed: Refer to Note 11— Stock Based Compensation and Other Benefit Plans to our audited consolidated financial statements included elsewhere in this Annual Report for details regarding Topco’s and our equity-based compensation plans.
+Added: Refer to Note 12— Stock Based Compensation and Other Benefit Plans to our audited consolidated financial statements included elsewhere in this Annual Report for details regarding stock-based compensation plans.
Recently Issued Accounting Pronouncements
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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.