7 unchanged sentences
We caution you that actual outcomes and results may differ materially from what is expressed, implied or forecasted by our forward-looking statements.
−Removed: More information regarding these risks and uncertainties and other important factors that could cause actual results to differ materially from those in the forward-looking statements is set forth in “Risk Factors” of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2024.
+Added: More information regarding these risks and uncertainties and other important factors that could cause actual results to differ materially from those in the forward-looking statements is set forth in “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”).
Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made.
−Removed: Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions or otherwise.
+Added: Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission (the “SEC”), we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions or otherwise.
Executive Overview
3 unchanged sentences
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: 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.
−Removed: Our revised reportable segments consist of Branded Services, Experiential Services, and Retailer Services.
−Removed: We have reorganized our portfolio of businesses into a new, simplified structure that more closely aligns our business capabilities with economic buyers.
−Removed: As a result of this reorganization, we have formally disposed of certain business units.
−Removed: In addition to the business units already disposed of, there are certain other business units which are part of the overall reorganization plan that have not yet been disposed of or abandoned.
−Removed: 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.
−Removed: Refer to Note 2— Held for Sale, Divestitures and Discontinued Operations.
−Removed: We continue to evaluate opportunities to further simplify our operations so we can focus more resources on our core businesses.
−Removed: Through our Branded Services segment, which generated approximately 36.8% and 45.6% of our revenues in the nine months ended September 30, 2024 and 2023, respectively, we provide services to branded consumer goods manufacturers through three main categories:
+Added: Through our Branded Services segment, which generated approximately 35.3% and 38.2% of our revenues in the three months ended March 31, 2025 and 2024, respectively, we provide services to branded consumer goods manufacturers through three main categories:
brokerage, branded merchandising and omni-commerce marketing services.
1 unchanged sentence
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.
−Removed: Our omni-commerce marketing services primarily relate to digital and field marketing services,
−Removed: including shopper marketing, targeted advertising, interactive design and development, inventory management, application development and content management solutions.
−Removed: Through our Experiential Services segment, which generated approximately 36.3% and 29.3% of our revenues in the nine months ended September 30, 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: 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 38.2% and 35.7% of our revenues in the three months ended March 31, 2025 and 2024, respectively, we help brands and retailers reach consumers and convert shoppers into buyers through in-store and online sampling and demonstrations.
We manage highly customized, large-scale sampling programs for leading brands and retailers.
We also manage, organize and execute special events for brands and retailers, including large-scale meetings, mobile tours, summits and festivals.
−Removed: Through our Retailer Services segment, which generated approximately 27.0% and 25.1% of our revenues in the nine months ended September 30, 2024 and 2023, respectively, we provide end-to-end advisory, retailer merchandising and agency services to retailers.
+Added: Through our Retailer Services segment, which generated approximately 26.5% and 26.1% of our revenues in the three months ended March 31, 2025 and 2024, respectively, we provide end-to-end advisory, retailer merchandising and agency services to retailers.
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.
−Removed: 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: Retailer merchandising services primarily relate to the execution of merchandising
+Added: strategies, including traditional services such as interior store construction, store resets, category updates and new item implementation.
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.
−Removed: Our financial performance for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 includes:
+Added: Our financial performance for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 includes:
• Revenues decreased by $39.6 million, or 4.6%, to $821.8 million;
−Removed: • Operating income from continuing operations decreased by $9.9 million to an operating loss of $3.2 million;
+Added: • Operating loss from continuing operations decreased by $15.3 million to $14.6 million;
• Net loss from continuing operations increased by $6.0 million to $56.1 million;
• Adjusted Net Income decreased by $25.3 million, or 274.5%, to $16.1 million;
−Removed: • Adjusted EBITDA from Continuing Operations increased by $7.6 million or 8.1%, to $100.9 million.
−Removed: Our financial performance for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 includes:
−Removed: • Revenues decreased by $234.2 million, or 8.1%, to $2,674.0 million;
−Removed: • Operating income from continuing operations decreased by $150.3 million to an operating loss of $124.4 million;
−Removed: • Net loss from continuing operations increased by $122.0 million to $200.5 million;
−Removed: • Adjusted Net Income increased by $9.1 million, or 14.2%, to $54.9 million;
• Adjusted EBITDA from Continuing Operations decreased by $12.5 million or 17.6%, to $58.2 million.
Factors Affecting Our Business and Financial Reporting
−Removed: There are a number of factors, in addition to the deconsolidation of our European joint venture in December 2023 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 that affect the performance of our business and the comparability of our results from period to period including:
• Organic Growth.
3 unchanged sentences
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.
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.
4 unchanged sentences
We continue to evaluate opportunities to further simplify our operations so we can focus more resources on our core businesses.
−Removed: • Contingent Consideration.
−Removed: Many of our acquisition agreements include contingent consideration arrangements, which are generally based on the achievement of financial performance thresholds by the operations attributable to the acquired businesses.
−Removed: The contingent consideration arrangements are based upon our valuations of the acquired businesses and are intended to share the investment risk with the sellers of such businesses if projected financial results are not achieved.
−Removed: The fair values of these contingent consideration arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates.
−Removed: For each transaction, we estimate the fair value of contingent consideration payments as part of the initial purchase price.
−Removed: 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 unobservable inputs are reported in “Selling, general, and administrative expenses” in our Condensed Consolidated Statements of Operations and Comprehensive Loss.
• Depreciation and Amortization.
17 unchanged sentences
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.
−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 and divestitures, which we refer to as organic revenues and acquired revenues, respectively.
−Removed: We define organic revenues as any revenues that are not acquired revenues.
−Removed: 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.
−Removed: 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, 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.
−Removed: 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.
−Removed: 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 October 1, 2023 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, 2022 to September 30, 2023 to be acquired revenues during the period from October 1, 2023 to September 30, 2024, with any differences from that amount actually generated during the latter period to be organic revenues.
−Removed: 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, 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.
−Removed: For example, if we completed a divestiture on October 1, 2023 for a business, we would consider the amount of revenues from the divested business from October 1, 2022 to September 30, 2023 to be subtracted from acquired revenues during the period from October 1, 2023 to September 30, 2024.
−Removed: 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
5 unchanged sentences
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 Securities and Exchange Commission (“SEC”), as well as higher expenses for general and director and officer insurance, investor relations, and related 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 our internal reorganization activities, including our restructuring plan, acquisition and divestiture 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 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 divestitures activities.
−Removed: Impairment of Goodwill
−Removed: Goodwill represents the excess of the purchase price over the fair value of the net identifiable tangible and intangible assets acquired in an acquisition.
−Removed: 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: Changes to our operating segments effective January 1, 2024, as described in Note 8— Segments , resulted in a change to our reporting units (Branded Services, Branded Agencies, Experiential Services, Merchandising and Retailer Agencies).
−Removed: 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.
−Removed: The assets and liabilities were reassigned to the applicable reporting units and allocated goodwill using the relative fair value approach.
−Removed: The estimated fair values of the underlying reporting units were determined based on a combination of the income and market approaches.
−Removed: 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.
−Removed: 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.
−Removed: The Company compared a weighted average of the output from the income and market approaches to compute the fair value of the reporting units.
−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.
−Removed: We based our fair value estimates on assumptions we believe to be reasonable but which are unpredictable and inherently uncertain.
−Removed: 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.
−Removed: 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 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.
−Removed: The fair values of the Branded Agencies and Experiential Services reporting units exceeded their respective carrying values by less than 20%.
−Removed: During the second quarter of fiscal year 2024, the Company determined a triggering event occurred and an impairment assessment was warranted for the Branded Agencies reporting unit goodwill due to the pending sale of one of the businesses that comprised a substantial portion of the Branded Agencies reporting unit.
−Removed: As a result, the Company recognized a non-cash goodwill impairment charge of $99.7 million related to the Company's Branded Agencies reporting unit goodwill during the nine months ended September 30, 2024, which has been reflected in “Impairment of goodwill” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.
Other (Income) Expenses
1 unchanged sentence
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
−Removed: 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.
+Added: 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.
Interest Expense
−Removed: Interest expense relates primarily to borrowings under our material debt agreements as described below.
+Added: Interest expense relates primarily to borrowings under our debt agreements as described below as well as gains on repurchases of debt and fair value adjustments for our derivative financial instruments.
See “ — Liquidity and Capital Resources .”
4 unchanged sentences
We have ascribed value to identifiable intangible assets other than goodwill in our purchase price allocations for companies we have acquired.
−Removed: These assets include, but are not limited to, client relationships and trade names.
+Added: These assets include, client relationships and trade names.
To the extent we ascribe value to identifiable intangible assets that have finite lives, we amortize those values over the estimated useful lives of the assets.
2 unchanged sentences
Depreciation Expense
−Removed: Depreciation expense relates to the property and equipment that we own, which represented less than 1% of our total assets at September 30, 2024 and 2023, respectively.
+Added: Depreciation expense relates to the property and equipment that we own, which represented less than 1% of our total assets at March 31, 2025 and 2024, respectively.
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.
1 unchanged sentence
See “ —Liquidity and Capital Resources.
−Removed: Our principal sources of liquidity are cash flows from operations, borrowings under the Revolving Credit Facility, divestitures and other debt.
−Removed: Our principal uses of cash are operating expenses, working capital requirements, investments in our technology platforms, acquisitions and repayment of debt.
−Removed: During the nine months ended September 30, 2024, we sold five businesses.
−Removed: Additionally, we classified certain assets and liabilities which are expected to be recovered through a sale transaction rather than through continuing use as held for sale as of September 30, 2024.
−Removed: 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.
+Added: Our principal sources of liquidity are cash receipts for services performed, borrowings under the Revolving Credit Facility and other debt.
+Added: Our principal uses of cash are operating expenses, working capital requirements, investments in our technology platforms, repayment of debt and repurchases of our Class A common shares.
Adjusted Net Income
Adjusted Net Income is a non-GAAP financial measure.
−Removed: Adjusted Net Income means net (loss) income before (i) net income attributable to noncontrolling interest, (ii) impairment of goodwill and indefinite-lived assets, (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
−Removed: 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.
+Added: Adjusted Net Income means net (loss) income before (i) net income attributable to noncontrolling interest, (ii) impairment of goodwill and indefinite-lived assets, (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) gain on repurchases of Term Loan Facility and Notes debt, (xiii) costs associated with (recovery from) the Take 5 Matter, (xiv) other adjustments that management believes are helpful in evaluating our operating performance, and (xv) 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.
2 unchanged sentences
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.
−Removed: Adjusted EBITDA from Continuing Operations and Adjusted EBITDA from Discontinued Operations means net (loss) 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.
−Removed: 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: Adjusted EBITDA from Continuing Operations and Adjusted EBITDA from Discontinued Operations means net (loss) 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 (recovery from) the Take 5 Matter, (xvi) EBITDA for economic interests in investments and (xvii) 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 (recovery from) the Take 5 Matter, (xii) EBITDA for economic interests in investments and (xiii) other adjustments that management believes are helpful in evaluating our operating performance, in each case, attributable to such segment.
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.
7 unchanged sentences
In July 2024, we announced a restructuring plan as part of our continued transformation strategy to improve our cost structure and intend to implement various other efforts to improve operating efficiency.
−Removed: The restructuring plan was designed to simplify the organization that supports the new segments after the divestitures and related transitions.
−Removed: The overall project is expected to be substantially completed by the end of 2024.
−Removed: Reorganization expenses
−Removed: Beginning in the first quarter of 2023, the Company engaged third-party professional service consultants to assist in identifying and implementing operational efficiencies and cost-saving strategies.
−Removed: These efforts focused on internal process optimization and workforce alignment to the Company’s cost structure with current business needs.
−Removed: During the three and nine months ended September 30, 2024, the Company incurred $18.6 million and $74.0 million, respectively, in reorganization expenses related to various internal reorganization activities, including professional fees, lease exit costs, severance, and nonrecurring compensation costs, compared to $21.4 million and $38.3 million during three and nine months ended September 30, 2023.
−Removed: These amounts were recognized in "Selling, general, and administrative expenses" in the Condensed Consolidated Statements of Operations and Comprehensive Loss.
−Removed: The reorganization plan was designed to simplify the organization that supports the new segments after the divestitures and related transitions.
−Removed: Restructuring expenses
−Removed: In the third quarter of 2024, the Company implemented restructuring plans as a result of the overall reorganization.
−Removed: During the third quarter of fiscal year 2024, the Company offered a Voluntary Early Retirement Program (“VERP”) to certain eligible U.S.-based associates.
−Removed: During the three and nine months ended September 30, 2024, the Company recorded $21.4 million of settlement charges and special termination benefits in “Selling, general, and administrative expenses” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.
−Removed: In connection with our reorganization initiatives, in September 2024, the Company announced a cost savings program to improve operational performance and align cost structures consistent with revenue levels associated with business changes, which includes employee termination benefits associated with a reduction-in-force (“2024 RIF”) and other optimization initiatives expected to be completed in Fiscal 2024.
−Removed: Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023
−Removed: The following table sets forth items derived from the Company’s consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023 in dollars and as a percentage of total revenues.
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
+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 the clients.
+Added: The overall project was substantially completed at the end of fiscal year 2024.
+Added: We are in the process of implementing a new global enterprise resource planning (“ERP”) system, which is expected to occur in phases throughout fiscal year 2025.
+Added: During the three months ended March 31, 2025, the Company deployed the new ERP for our North America operations.
+Added: As part of the implementation, the Company completed significant pre-implementation testing and post-implementation testing and monitoring and recognized reorganization related expenses related to the implementation.
+Added: Results of Operations for the Three Months Ended March 31, 2025 and 2024
+Added: The following table sets forth items derived from the Company’s consolidated statements of operations for the three months ended March 31, 2025 and 2024 in dollars and as a percentage of total revenues.
+Added: Three Months Ended March 31,
(amounts in thousands)
1 unchanged sentence
Selling, general, and administrative expenses
−Removed: Impairment of goodwill and indefinite-lived assets
Depreciation and amortization
1 unchanged sentence
Total operating expenses
−Removed: Operating (loss) income from continuing operations
−Removed: Other expenses (income):
+Added: Operating loss from continuing operations
+Added: Other expenses:
Change in fair value of warrant liability
1 unchanged sentence
Total other expenses
−Removed: Loss from continuing operations before income taxes
−Removed: Benefit from income taxes from continuing operations
+Added: Loss from continuing operations before provision for (benefit from) income taxes
+Added: Provision for (benefit from) income taxes from continuing operations
Net loss from continuing operations
−Removed: Net (loss) income from discontinued operations, net of tax
−Removed: net (loss) from continuing operations attributable to noncontrolling interest, net of tax
−Removed: net (loss) from discontinued operations attributable to noncontrolling interest, net of tax
+Added: Net income from discontinued operations, net of tax
+Added: net income from discontinued operations attributable to noncontrolling interest, net of tax
Net loss attributable to stockholders of Advantage Solutions Inc.
4 unchanged sentences
For a discussion of our presentation of Adjusted Net Income and Adjusted EBITDA from Continuing Operations and reconciliations of Net income to Adjusted Net Income and Adjusted EBITDA from Continuing Operations, see “ —Non-GAAP Financial Measures .”
−Removed: Comparison of the Three Months Ended September 30, 2024 and 2023
−Removed: Three Months Ended September 30,
−Removed: (amounts in thousands)
−Removed: Branded Services
−Removed: Experiential Services
−Removed: Retailer Services
−Removed: Total revenues
−Removed: Total revenues decreased by $80.4 million, or 7.9%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.
−Removed: Excluding $104.8 million revenues from the deconsolidation of our European joint venture, revenues increased 2.4%.
−Removed: The Branded Services segment revenues decreased $119.8 million during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.
−Removed: Excluding $104.8 million revenues from the
−Removed: deconsolidation of our European joint venture, the segment experienced a decrease of $15.0 million in revenues primarily due to an intentional client resignation and a weaker economic environment for our consumer packaged goods clients.
−Removed: The Experiential Services segment revenues increased $34.4 million during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.
−Removed: The increase in revenues was primarily due to an increase in our events per day volume.
−Removed: The Retailer Services segment revenues remained relatively unchanged during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.
−Removed: Cost of Revenues
−Removed: Cost of revenues as a percentage of revenues for the three months ended September 30, 2024 was 84.6%, as compared to 87.5% for the three months ended September 30, 2023.
−Removed: 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.
−Removed: Selling, General, and Administrative Expenses
−Removed: Selling, general, and administrative expenses as a percentage of revenues for the three months ended September 30, 2024 was 10.5%, compared to 6.7% for the three months ended September 30, 2023.
−Removed: The increase as a percentage of revenues was primarily due to a $21.2 million increase in costs associated with our internal reorganization and restructuring activities, largely related to professional fees and severance and continued investment in our support services, including our technology solutions.
−Removed: Depreciation and Amortization Expense
−Removed: Depreciation and amortization expense was $51.9 million for the three months ended September 30, 2024 compared to $52.4 million for the three months ended September 30, 2023.
−Removed: Operating Income (Loss) from Continuing Operations
−Removed: Three Months Ended September 30,
−Removed: (amounts in thousands)
−Removed: Branded Services
−Removed: Not Meaningful
−Removed: Experiential Services
−Removed: Retailer Services
−Removed: Total operating (loss) income from continuing operations
−Removed: In the Branded Services segment, the decrease in operating income during the three months ended September 30, 2024 was primarily due to the decrease in revenue noted above combined with an increase in costs associated with our internal reorganization activities and continued investment in our support services, including our technology solutions.
−Removed: In the Experiential Services segment, the decrease in operating income during the three months ended September 30, 2024 was due to the increase in revenues as described above, partially offset by an increase in costs associated with our internal reorganization activities and continued investment in our support services, including our technology solutions.
−Removed: In the Retailer Services segment, the increase in operating income during the three months ended September 30, 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.
−Removed: Change in Fair Value of Warrant Liability
−Removed: Change in fair value of warrant liability was an immaterial non-cash expense for the three months ended September 30, 2024 compared to $0.6 million of non-cash expense resulting from a fair value adjustment to warrant liability with respect to the private placement warrants for the three months ended September 30, 2023.
−Removed: Interest Expense, net
−Removed: Interest expense, net decreased by $3.3 million, or 7.8%, to $39.0 million for the three months ended September 30, 2024, from $42.3 million for the three months ended September 30, 2023.
−Removed: The decrease in interest expense was primarily due to lower debt balance 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 .”
−Removed: Benefit from Income Taxes
−Removed: Benefit from income taxes was $4.9 million for the three months ended September 30, 2024 as compared to $6.6 million of benefit from income taxes for the three months ended September 30, 2023.
−Removed: The fluctuation was primarily attributable to the application of a shortfall of $0.3 million of stock-based compensation for the three months ended September 30, 2024, as compared to a $1.0 million shortfall for stock-based compensation for the three months ended September 30, 2023 and $2.6 million of tax expense from return to provision adjustments during the three months ended September 30, 2024.
−Removed: Provision for income taxes from discontinued operations was $29.5 million for the three months ended September 30, 2024, while the income tax provision from discontinued operations was $2.3 million for the three months ended September 30, 2023.
−Removed: The income tax expense for the three months ended September 30, 2024 and 2023 was impacted primarily by the result of pre-tax income and divested entities.
−Removed: Net Loss from Continuing Operations
−Removed: Net loss from continuing operations was $37.3 million for the three months ended September 30, 2024, compared to net loss from continuing operations of $29.6 million for the three months ended September 30, 2023.
−Removed: The increase in net loss from continuing operations was primarily driven by a reduction in cost of sales as a percentage of revenue and a $3.3 million decrease in interest expense, partially offset by a $21.2 million increase in costs associated with our internal reorganization and restructuring activities, largely related to professional fees and severance and a $1.7 million decrease in the benefit from income taxes from continuing operations.
−Removed: Net Income (Loss) from Discontinued Operations
−Removed: Net loss from discontinued operations was $5.5 million for the three months ended September 30, 2024, compared to net income from discontinued operations of $7.1 million for the three months ended September 30, 2023.
−Removed: Adjusted Net Income
−Removed: Adjusted Net Income for the three months ended September 30, 2024 remained relatively unchanged from the three months ended September 30, 2023.
−Removed: For a reconciliation of Adjusted Net Income to Net income, see “ — Non-GAAP Financial Measures.”
−Removed: Adjusted EBITDA from Continuing Operations and Adjusted EBITDA by Segment
−Removed: Three Months Ended September 30,
−Removed: (amounts in thousands)
−Removed: Branded Services
−Removed: Experiential Services
−Removed: Retailer Services
−Removed: Total Adjusted EBITDA from Continuing Operations
−Removed: Adjusted EBITDA from Continuing Operations was $100.9 million for the three months ended September 30, 2024, compared to $93.3 million for the three months ended September 30, 2023.
−Removed: The increase in Adjusted EBITDA was primarily attributable to an increase in the Experiential Services segment.
−Removed: In the Branded Services segment, the decrease was primarily attributable to the decline in revenues offset by the decline in cost of revenues as described above.
−Removed: In the Experiential Services segment, the increase was driven largely by the growth in revenues from the in-store sampling and demonstration services as described above offset by continued investment in our support services including our technology solutions.
−Removed: In the Retailer Services segment, the increase was primarily attributable to increase in margins driven by price.
−Removed: For a reconciliation of Adjusted EBITDA from Continuing Operations to Net income, see “—Non-GAAP Financial Measures.”
−Removed: Comparison of the Nine Months Ended September 30, 2024 and 2023
−Removed: Nine Months Ended September 30,
+Added: Comparison of the Three Months Ended March 31, 2025 and 2024
+Added: Three Months Ended March 31,
(amounts in thousands)
3 unchanged sentences
Total revenues
−Removed: Total revenues decreased by $234.2 million, or 8.1%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023.
−Removed: Excluding revenues from the deconsolidation of our European joint venture, revenues increased 2.2%.
−Removed: The Branded Services segment revenues decreased by $344.4 million during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.
−Removed: Excluding $298.8 million revenues from the deconsolidation of our European joint venture, the segment experienced a decrease of $45.6 million in revenues primarily due to an intentional client resignation and a weaker economic environment for our consumer package goods clients.
−Removed: The Experiential Services segment revenues increased by $118.9 million during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.
+Added: Total revenues decreased by $39.6 million, or 4.6%, during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.
+Added: The Branded Services segment revenues decreased $39.2 million during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
+Added: The decrease in revenues was primarily due to a weaker economic environment for our consumer package goods clients and an intentional client resignation during fiscal year 2024.
+Added: The Experiential Services segment revenues increased $6.7 million during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
The increase in revenues was primarily due to an increase in our events per day volume.
−Removed: The Retailer Services segment revenues remained relatively unchanged during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.
+Added: The Retailer Services segment revenues decreased $7.1 million during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
+Added: The decrease in revenues was primarily due to staffing challenges, partially offset by improved pricing strategies.
Cost of Revenues
−Removed: Cost of revenues as a percentage of revenues for the nine months ended September 30, 2024 was 85.9%, as compared to 87.8% for the nine months ended September 30, 2023.
−Removed: The decrease as a percentage of revenues was largely attributable to the change in the revenue mix of our services primarily the 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.
+Added: Cost of revenues as a percentage of revenues for the three months ended March 31, 2025 was 87.9%, as compared to 87.3% for the three months ended March 31, 2024.
+Added: The increase as a percentage of revenues was largely attributable to higher IT-related expenses, partially offset by lower compensation expense.
Selling, General, and Administrative Expenses
−Removed: Selling, general, and administrative expenses as a percentage of revenues for the nine months ended September 30, 2024 was 9.4%, compared to 5.9% for the nine months ended September 30, 2023.
−Removed: The increase as a percentage of revenues was primarily due to a $57.4 million increase in costs associated with our internal reorganization activities, largely related to professional fees and severance and the continued investment in our support services including our technology solutions.
−Removed: Impairment of Goodwill
−Removed: We recognized a $99.7 million non-cash goodwill impairment charge during the nine months ended September 30, 2024.
−Removed: The impairment charges were due to the pending sale of one of the businesses that comprised a substantial portion of the Branded Agencies reporting unit.
+Added: Selling, general, and administrative expenses as a percentage of revenues for the three months ended March 31, 2025 was 7.9%, compared to 10.3% for the three months ended March 31, 2024.
+Added: The decrease as a percentage of revenues was primarily due to a $22.8 million decrease in costs associated with our internal reorganization activities.
Depreciation and Amortization Expense
−Removed: Depreciation and amortization expense was $152.9 million for the nine months ended September 30, 2024 compared to $157.4 million for the nine months ended September 30, 2023.
−Removed: The decrease is largely attributable to a decrease in the depreciation and amortization from the deconsolidation of our European joint venture.
−Removed: Operating Income (Loss) from Continuing Operations
−Removed: Nine Months Ended September 30,
+Added: Depreciation and amortization expense was $50.4 million for the three months ended March 31, 2025 compared to $49.7 million for the three months ended March 31, 2024.
+Added: The increase was due to a $1.9 million increase in depreciation expense as a result of an increase in property and equipment, partially offset by a $1.4 million decrease in amortization expense as a result of intangible asset impairment charges incurred during fiscal year 2024.
+Added: Operating (Loss) Income from Continuing Operations
+Added: Three Months Ended March 31,
(amounts in thousands)
Branded Services
−Removed: Not Meaningful
Experiential Services
Retailer Services
−Removed: Total operating (loss) income from continuing operations
−Removed: In the Branded Services segment, the decrease in operating income during the nine months ended September 30, 2024 was primarily due to the goodwill impairment 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.
−Removed: In the Experiential Services segment, the increase in operating income during the nine months ended September 30, 2024 was due to the increase in revenues as described above, partially offset by an increase in costs associated with our internal reorganization activities combined with continued investment in our support services including our technology solutions.
−Removed: In the Retailer Services segment, the increase in operating income during the nine months ended September 30, 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.
+Added: Total operating loss from continuing operations
+Added: In the Branded Services segment, the decrease in operating loss during the three months ended March 31, 2025 was primarily due to a decrease in costs associated with our internal reorganization activities, partially offset by the decrease in revenues described above.
+Added: In the Experiential Services segment, operating loss during the three months ended March 31, 2025 was relatively unchanged.
+Added: During the three months ended March 31, 2025, revenue increased as described above, however this increase was largely offset by increased labor costs.
+Added: In the Retailer Services segment, operating loss improved $8.4 million to operating income for the three months ended March 31, 2025.
+Added: The increase in operating income was primarily due to a decrease in costs associated with our internal reorganization activities, partially offset by the decrease in revenues described above.
Change in Fair Value of Warrant Liability
−Removed: Change in fair value of warrant liability was $0.4 million of non-cash gain for the nine months ended September 30, 2024, whereas the nine months ended September 30, 2023 had a non-cash loss of $0.6 million.
+Added: Change in fair value of warrant liability was an immaterial non-cash expense for the three months ended March 31, 2025 compared to $0.3 million of non-cash expense resulting from a fair value adjustment to warrant liability with respect to the private placement warrants for the three months ended March 31, 2024.
Interest Expense, net
−Removed: Interest expense, net decreased by $5.4 million, or 4.5%, to $114.5million for the nine months ended September 30, 2024, from $119.9 million for the nine months ended September 30, 2023.
−Removed: The decrease in interest expense 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 nine months ended September 30, 2024.
−Removed: Benefit from Income Taxes
−Removed: Benefit from income taxes was $38.0 million for the nine months ended September 30, 2024 as compared to $16.0 million of benefit from income taxes for the nine months ended September 30, 2023.
−Removed: The fluctuation was primarily attributable to a larger pre-tax loss during the nine months ended September 30, 2024 compared to a smaller pre-tax loss during the nine months ended September 30, 2023 and $2.6 million of tax expense from return to provision adjustments during the nine months ended September 30, 2024.
−Removed: Also contributing to the variance was the application of the windfall of $0.8 million of stock-based compensation for the nine months ended September 30, 2024, as compared to a $4.1
−Removed: million shortfall for stock-based compensation for the nine months ended September 30, 2023 and the release of the valuation allowance of $1.1 million that was determined not to be necessary for the nine months ended September 30, 2024.
−Removed: Provision for income taxes from discontinued operations was $41.4 million for the nine months ended September 30, 2024, while the income tax provision from discontinued operations was $3.6 million for the nine months ended September 30, 2023.
−Removed: The income tax expense for the nine months ended September 30, 2024 and 2023 was impacted primarily by the result of pre-tax income and divested entities.
+Added: Interest expense, net decreased by $1.4 million, or 3.9%, to $34.4 million for the three months ended March 31, 2025, from $35.8 million for the three months ended March 31, 2024.
+Added: The decrease in interest expense was primarily due to lower debt balance as a result of repurchases of Term Loan Facility and Notes as further described in “ Liquidity and Capital Resources—Description of Credit Facilities—Senior Secured Notes, ” partially offset by a $0.9 million decrease in gains from the repurchases of Notes and a $5.8 million increase for fair value adjustments for our derivative financial instruments.
+Added: Provision for (Benefit from) Income Taxes
+Added: Provision for income taxes was $7.1 million for the three months ended March 31, 2025 as compared to $15.9 million of benefit from income taxes for the three months ended March 31, 2024.
+Added: The fluctuation in the income tax provision was primarily attributable to a decrease in the pretax loss during the three months ended March 31, 2025 in comparison to the pretax loss incurred during the three months ended March 31, 2024.
+Added: Further, an additional valuation allowance was established on interest expense limitation carryforward for the three months ended March 31, 2025.
Net Loss from Continuing Operations
−Removed: Net loss from continuing operations was $200.5 million for the nine months ended September 30, 2024, compared to net loss from continuing operations of $78.5 million for the nine months ended September 30, 2023.
−Removed: The increase in net loss from continuing operations was primarily driven by goodwill impairment recorded in 2024.
−Removed: Net Income (Loss) from Discontinued Operations
−Removed: Net income from discontinued operations was $53.7 million for the nine months ended September 30, 2024, compared to net loss from discontinued operations of $0.4 million for the nine months ended September 30, 2023.
−Removed: The increase in net income from discontinued operations was primarily driven by the $95.3 million gain on divestitures for the nine months ended September 30, 2024.
+Added: Net loss from continuing operations was $56.1 million for the three months ended March 31, 2025, compared to net loss from continuing operations of $50.1 million for the three months ended March 31, 2024.
+Added: The increase in net loss from continuing operations was primarily driven by the decrease in revenues noted above, partially offset by the decrease in expense associated with our internal reorganization activities.
Adjusted Net Income
−Removed: The decrease in Adjusted Net Income for the nine months ended September 30, 2024 was primarily attributable to increases in selling, general, and administrative expenses, partially offset by an increase in the benefit from income taxes.
+Added: The decrease in Adjusted Net Income for the three months ended March 31, 2025 was primarily attributable to a decrease in revenues, partially offset by a decrease in selling, general and administrative expenses.
For a reconciliation of Adjusted Net Income to Net income, see “ — Non-GAAP Financial Measures.”
Adjusted EBITDA from Continuing Operations and Adjusted EBITDA by Segment
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
(amounts in thousands)
3 unchanged sentences
Total Adjusted EBITDA from Continuing Operations
−Removed: Adjusted EBITDA from Continuing Operations decreased by $3.9 million, or 1.5%, to $261.5 million for the nine months ended September 30, 2024, from $265.4 million for the nine months ended September 30, 2023.
−Removed: In the Branded Services segment, the decrease was primarily attributable to the decline in revenues as described above.
−Removed: In the Experiential Services segment, the increase was driven largely by the growth in revenues from the in-store sampling and demonstration services as described above.
−Removed: In the Retailer Services segment, Adjusted EBITDA was relatively unchanged.
−Removed: All three of our segments experienced increased costs from continued investment in our support services including our technology solutions.
+Added: Adjusted EBITDA from Continuing Operations was $58.2 million for the three months ended March 31, 2025, compared to $70.6 million for the three months ended March 31, 2024.
+Added: The decrease in Adjusted EBITDA was primarily attributable to a decrease in the Branded Services segment, which was driven by the decrease in revenues as described above partially offset by a decrease in costs associated with our internal reorganization activities.
+Added: In the Experiential Services segment, the decrease in Adjusted EBITDA was primarily driven by an increase in labor costs, partially offset by the increase in revenues as described above.
+Added: In the Retailer Services segment, the decrease in Adjusted EBITDA was primarily attributable to the decrease in revenues described above, partially offset by a decrease in costs associated with our internal reorganization activities.
For a reconciliation of Adjusted EBITDA from Continuing Operations to Net income, see “—Non-GAAP Financial Measures.”
1 unchanged sentence
Adjusted Net Income is a non-GAAP financial measure.
−Removed: Adjusted Net Income means net (loss) income before (i) net income attributable to noncontrolling interest, (ii) impairment of goodwill and indefinite-lived assets, (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.
+Added: Adjusted Net Income means net (loss) income before (i) net income attributable to noncontrolling interest, (ii) impairment of goodwill and indefinite-lived assets, (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) gain on repurchases of Term Loan Facility and Notes debt, (xiii) costs associated with (recovery from) the Take 5 Matter, (xiv) other adjustments that management believes are helpful in evaluating our operating performance, and (xv) 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.
2 unchanged sentences
A reconciliation of Adjusted Net Income to Net loss is provided in the following table:
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
(in thousands)
−Removed: net income attributable to noncontrolling interests
−Removed: Impairment of goodwill and indefinite-lived assets
+Added: Net loss from continuing operations
Equity-based compensation of Karman Topco L.P.
−Removed: Changes in fair value of warrant liability
+Added: Change in fair value of warrant liabilities
Fair value adjustments related to contingent consideration related to acquisitions (b)
2 unchanged sentences
Reorganization expenses (e)
−Removed: Litigation expenses (recovery) (f)
+Added: Litigation expenses (f)
Amortization of intangible assets (g)
−Removed: Costs associated with COVID-19, net of benefits received (h)
−Removed: Gain on repurchases of Term Loan Facility and Senior Secured Notes debt (i)
−Removed: Costs associated with the Take 5 Matter, net of (recoveries) (j)
−Removed: Tax adjustments related to non-GAAP adjustments (k)
+Added: Gain on repurchases of Term Loan Facility and Senior Secured Notes (h)
+Added: Costs associated with the Take 5 Matter (i)
+Added: Tax adjustments related to non-GAAP adjustments (j)
Adjusted Net Income
−Removed: __________________
−Removed: 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 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.
Represents adjustments to the estimated fair value of our contingent consideration liabilities related to our acquisitions, for the applicable periods.
−Removed: 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: Represents fees and costs associated with activities related to our acquisitions, divestitures, and related activities, including professional fees, due diligence, and integration activities.
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.
−Removed: Restructuring expenses include costs associated with the Voluntary Early Retirement Program (“VERP”) and employee termination benefits associated with a reduction-in-force ("2024 RIF") and other optimization initiatives.
+Added: Restructuring expenses include costs associated with the Voluntary Early Retirement Program and employee termination benefits associated with a reduction-in-force and other optimization initiatives.
Represents fees and costs associated with various internal reorganization activities, including professional fees, lease exit costs, severance, and nonrecurring compensation costs.
1 unchanged sentence
Represents the amortization of intangible assets recorded in connection with the 2014 Topco Acquisition and our other acquisitions.
−Removed: 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;
−Removed: and (ii) benefits received from government grants for COVID-19 relief.
−Removed: Represents a gain associated with the repurchases of Term Loan Facility and Senior Secured Notes, net of deferred financing fees related to repricing of Term Loan Facility.
−Removed: For additional information, refer to Note 4—Debt to our unaudited condensed financial statements for the three and nine months ended September 30, 2024 and 2023.
−Removed: 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 a gain associated with the repurchases of Term Loan Facility and Notes, net of deferred financing fees related to repricing of Term Loan Facility.
+Added: For additional information, refer to Note 4—Debt to our unaudited condensed financial statements for the three months ended March 31, 2025 and 2024.
+Added: Represents costs associated with collection and remediation activities related to the Take 5 Matter, primarily professional fees and other related costs.
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
1 unchanged sentence
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.
−Removed: Adjusted EBITDA from Continuing Operations and Adjusted EBITDA from Discontinued Operations mean net (loss) 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.
−Removed: 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: Adjusted EBITDA from Continuing Operations and Adjusted EBITDA from Discontinued Operations mean net (loss) 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 (recovery from) the Take 5 Matter, (xvi) EBITDA for economic interests in investments and (xvii) 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 (recovery from) the Take 5 Matter, (xii) EBITDA for economic interests in investments and (xiii) other adjustments that management believes are helpful in evaluating our operating performance, in each case, attributable to such segment.
Unallocated shared costs associated with discontinued operations from certain shared administrative functions, through the close of the discontinued operations;
1 unchanged sentence
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.
−Removed: See Note 2 – Held for Sale, Divestitures and Discontinued Operations in Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for further details.
+Added: See Note 2 – Discontinued Operations in Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for further details.
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.
−Removed: These measures adjust for items that we believe do not reflect the ongoing operating performance of our
−Removed: business, such as certain noncash items, unusual or infrequent items or items that change from period to period without any material relevance to our operating performance.
+Added: These measures adjust for items that we believe do not reflect the ongoing operating performance of our business, such as certain noncash 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 from Continuing Operations and Adjusted EBITDA from Discontinued Operations.
+Added: Furthermore, the agreements governing our indebtedness contain covenants and
+Added: other tests based on measures substantially similar to Adjusted EBITDA from Continuing Operations and Adjusted EBITDA from Discontinued Operations.
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, our most directly comparable measure presented on a GAAP basis.
3 unchanged sentences
Continuing Operations
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
(in thousands)
1 unchanged sentence
Interest expense, net
−Removed: Benefit from income taxes from continuing operations
+Added: Provision for (benefit from) income taxes from continuing operations
Depreciation and amortization
−Removed: Impairment of goodwill and indefinite-lived assets
Changes in fair value of warrant liability
5 unchanged sentences
Reorganization expenses (f)
−Removed: Litigation (recovery) expenses (g)
−Removed: Costs associated with COVID-19, net of benefits received (h)
−Removed: Costs associated with the Take 5 Matter, net of (recoveries) (i)
−Removed: EBITDA for economic interests in investments (j)
+Added: Litigation expenses (g)
+Added: Costs associated with the Take 5 Matter (h)
+Added: EBITDA for economic interests in investments (i)
Adjusted EBITDA from Continuing Operations
−Removed: Reconciliations of Adjusted EBITDA from Discontinued Operations to Net income (loss) from discontinued operations is provided in the following table:
+Added: Reconciliation of Adjusted EBITDA from Discontinued Operations to Net income from discontinued operations is provided in the following table:
Discontinued Operations
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
(in thousands)
−Removed: Net (loss) income from discontinued operations, net of tax
+Added: Three Months Ended March 31, 2024
+Added: Net income from discontinued operations, net of tax
Interest expense, net
1 unchanged sentence
Depreciation and amortization
−Removed: (Gain) loss on divestitures (k)
+Added: Gain on divestitures (k)
Stock-based compensation expense (a)
Fair value adjustments related to contingent consideration related to acquisitions (c)
−Removed: Acquisition and divestiture related expenses (d)
+Added: Divestiture related expenses (d)
Reorganization expenses (f)
−Removed: EBITDA for economic interests in investments (j)
+Added: EBITDA for economic interests in investments (i)
Adjusted EBITDA from Discontinued Operations
−Removed: Financial information by segment, including a reconciliation of Adjusted EBITDA by Segment to operating income, the closest GAAP financial measure, is provided in the following table:
+Added: 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:
Branded Services segment
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
(in thousands)
−Removed: Operating (loss) income
+Added: Operating loss
Depreciation and amortization
−Removed: Impairment of goodwill
Stock-based compensation expense (a)
5 unchanged sentences
Litigation expenses (g)
−Removed: Costs associated with COVID-19, net of benefits received (h)
−Removed: Costs associated with the Take 5 Matter, net of (recoveries) (i)
−Removed: EBITDA for economic interests in investments (j)
+Added: Costs associated with the Take 5 Matter (h)
+Added: EBITDA for economic interests in investments (i)
Branded Services segment Adjusted EBITDA
Experiential Services segment
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
(in thousands)
−Removed: Operating income
+Added: Operating loss
Depreciation and amortization
1 unchanged sentence
Equity-based compensation of Karman Topco L.P.
−Removed: Fair value adjustments related to contingent consideration related to acquisitions (c)
Acquisition and divestiture related expenses (d)
2 unchanged sentences
Litigation expenses (g)
−Removed: Costs associated with COVID-19, net of benefits received (h)
Experiential Services segment Adjusted EBITDA
Retailer Services segment
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
(in thousands)
−Removed: Operating income
+Added: Operating income (loss)
Depreciation and amortization
1 unchanged sentence
Equity-based compensation of Karman Topco L.P.
−Removed: Fair value adjustments related to contingent consideration related to acquisitions (c)
Acquisition and divestiture related expenses (d)
1 unchanged sentence
Reorganization expenses (f)
−Removed: Litigation (recovery) expenses (g)
−Removed: Costs associated with COVID-19, net of benefits received (h)
−Removed: EBITDA for economic interests in investments (j)
+Added: Litigation expenses (recovery) (g)
Retailer Services segment Adjusted EBITDA
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.
−Removed: 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 expenses related to equity-based compensation expense associated with grants of Common Series D Units of Karman Topco L.P.
+Added: made to one of the sponsors of the Company.
Represents adjustments to the estimated fair value of our contingent consideration liabilities related to our acquisitions, for the applicable periods.
−Removed: 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: Represents fees and costs associated with activities related to our acquisitions, divestitures, and related activities, including professional fees, due diligence, and integration activities.
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.
−Removed: Restructuring expenses include costs associated with the Voluntary Early Retirement Program (“VERP”) and employee termination benefits associated with a reduction-in-force ("2024 RIF") and other optimization initiatives.
+Added: Restructuring expenses include costs associated with the Voluntary Early Retirement Program and employee termination benefits associated with a reduction-in-force and other optimization initiatives.
Represents fees and costs associated with various internal reorganization activities, including professional fees, lease exit costs, severance, and nonrecurring compensation costs.
Represents legal settlements, reserves, and expenses that are unusual or infrequent costs associated with our operating activities.
−Removed: 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;
−Removed: and (ii) benefits received from government grants for COVID-19 relief.
−Removed: 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 costs associated with collection and remediation activities related to the Take 5 Matter, primarily professional fees and other related costs.
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.
−Removed: 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 are 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 receipts for services performed, borrowings under the Revolving Credit Facility, and other debt.
+Added: Our principal uses of cash are operating expenses, working capital requirements, interest on debt and repayment of debt.
Principal uses of cash used in investing activities includes our enterprise resource planning initiative, which includes upgrading our information system platform.
A summary of our cash operating, investing and financing activities from continuing operations are shown in the following table:
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
(in thousands)
−Removed: Net cash provided by operating activities from continuing operations
−Removed: Net cash provided by (used in) investing activities from continuing operations
−Removed: Net cash used in financing activities from continuing operations
−Removed: Net effect of foreign currency changes on cash from continuing operations
+Added: Net cash used in operating activities
+Added: Net cash (used in) provided by investing activities
+Added: Net cash used in financing activities
+Added: Net effect of foreign currency changes on cash, cash equivalents and restricted cash
Net change in cash, cash equivalents and restricted cash
−Removed: Net Cash Provided by Operating Activities
−Removed: Net cash provided by operating activities from continuing operations during the nine months ended September 30, 2024 consisted of net loss of $200.5 million adjusted for certain non-cash items, including impairment of goodwill of $99.7 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 $152.9 million, stock-based compensation of $24.2 million and effects of changes in working capital.
−Removed: Net cash provided by operating activities from continuing operations during the nine months ended September 30, 2023 consisted of net loss of $78.5 million adjusted for certain non-cash items, including depreciation and amortization of $157.4 million, stock-based compensation of $29.4 million and effects of changes in working capital.
−Removed: The decrease in cash provided by operating activities from continuing operations during the nine months ended September 30, 2024 relative to the same period in 2023 was primarily due to an increase in one-time transformation costs during the nine months ended September 30, 2024.
−Removed: Net Cash Provided by (Used in) Investing Activities
−Removed: Net cash provided by investing activities from continuing operations during the nine months ended September 30, 2024 primarily consisted of the proceeds from divestitures of $275.7 million, partially offset by the purchase of property and equipment of $50.4 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.
−Removed: Net cash used in investing activities during the nine months ended September 30, 2023 primarily consisted of the purchase of property and equipment of $24.4 million and proceeds from divestitures of $12.8 million.
+Added: Net Cash Used in Operating Activities
+Added: Net cash used in operating activities from continuing operations during the three months ended March 31, 2025 consisted of net loss of $56.1 million adjusted for certain non-cash items, including gain on repurchases of Notes, net of cost of extinguishments, of $1.6 million, depreciation and amortization of $50.4 million, stock-based compensation of $6.5 million and effects of changes in working capital.
+Added: Net cash used in operating activities from continuing operations during the three months ended March 31, 2024 consisted of net loss of $50.1 million adjusted for certain non-cash items, including depreciation and amortization of $49.8 million, stock-based compensation of $8.6 million and effects of changes in working capital.
+Added: The change in net cash used in operating activities from continuing operations during the three months ended March 31, 2025 relative to the same period in 2024 was primarily due to an increase in accounts receivable during the three months ended March 31, 2025 as compared to a decrease in accounts receivable during the three months ended March 31, 2024.
+Added: Net Cash (Used in) Provided by Investing Activities
+Added: Net cash used in investing activities from continuing operations during the three months ended March 31, 2025 primarily consisted of the purchase of property and equipment of $15.1 million, primarily related to our enterprise resource planning initiative, which includes upgrading our information system platform, and the purchase of investments in unconsolidated affiliates of $3.3 million.
+Added: Net cash provided by investing activities during the three months ended March 31, 2024 primarily consisted of the purchase of property and equipment of $15.4 million and proceeds from divestitures of $87.4 million.
Net Cash Used in Financing Activities
−Removed: Cash flows used in financing activities from continuing operations during the nine months ended September 30, 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 $9.9 million\, payments for taxes related to net share settlement of $11.7 million, payments of contingent consideration of $5.7 million and payments related to the share repurchase program of $34.1 million.
−Removed: Cash flows used in financing activities during the nine months ended September 30, 2023 were primarily related to repurchases of the Term Loan Facility of $104.0 million, repayment of principal on our Term Loan Facility of $10.2 million, payments of contingent consideration and holdback payments of $1.9 million, payments for taxes related to net share settlement of $1.3 million, partially offset by $2.2 million related to proceeds from the issuance of Class A common stock.
+Added: Cash flows used in financing activities from continuing operations during the three months ended March 31, 2025 were primarily related to repurchases of Notes of $18.2 million, repayment of principal on our Term Loan Facility of $3.3 million, payments for taxes related to net share settlement of $0.7 million, payments for taxes related to share settlement under the 2020 Incentive Award Plan and payments related to the share repurchase program of $0.9 million.
+Added: Cash flows used in financing activities during the three months ended March 31, 2024 were primarily related to repurchases of the Term Loan Facility of $47.9 million, repayment of principal on our Term Loan Facility of $3.3 million, payments of contingent consideration and holdback payments of $1.9 million, payments for taxes related to net share settlement of $3.3 million, partially offset by $1.2 million related to proceeds from the issuance of Class A common stock.
Description of Credit Facilities
1 unchanged sentence
Advantage Sales & Marketing Inc.
−Removed: (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”).
+Added: (the “Borrower”), our indirect wholly-owned subsidiary, 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
6 unchanged sentences
We may use borrowings under the Revolving Credit Facility to fund working capital and for other general corporate purposes, including permitted acquisitions and other investments.
−Removed: As of September 30, 2024, we had unused capacity under our Revolving Credit Facility available to us of $500.0 million, subject to borrowing base limitations (without giving effect to approximately $44.1 million of outstanding letters of credit and the borrowing base limitations for additional borrowings).
+Added: As of March 31, 2025, we had unused capacity under our Revolving Credit Facility available to us of $451.0 million, subject to borrowing base limitations (without giving effect to approximately $51.6 million of outstanding letters of credit and the borrowing base limitations for additional borrowings).
Borrowings under the Revolving Credit Facility are limited by borrowing base calculations based on the sum of specified percentages of eligible accounts receivable plus specified percentages of qualified cash, minus the amount of any applicable reserves.
19 unchanged sentences
The Term Loan Facility is a term loan facility denominated in U.S.
−Removed: dollars in an aggregate principal amount of $1.1 billion as of September 30, 2024.
+Added: dollars in an aggregate principal amount of $1.1 billion as of March 31, 2025.
Borrowings under the Term Loan Facility amortize in equal quarterly installments in an amount equal to 1.00% per annum of the original issued amount of $1.3 billion principal amount.
1 unchanged sentence
The Borrower may voluntarily prepay loans or reduce commitments under the Term Loan Facility, in whole or in part, subject to minimum amounts, with prior notice but without premium or penalty.
−Removed: The Company voluntarily repurchased an aggregate of $29.8 million principal amount of its Term Loan Facility during the nine months ended September 30, 2024.
−Removed: The Company recognized a gain on the repurchases of $0.5 million for the nine months ended September 30, 2024 as a component of “Interest expense, net” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.
The Borrower will be required to prepay the Term Loan Facility with 100% of the net cash proceeds of certain asset sales (such percentage subject to reduction based on the achievement of specific first lien net leverage ratios) and subject to certain reinvestment rights, 100% of the net cash proceeds of certain debt issuances and 50% of excess cash flow (such percentage subject to reduction based on the achievement of specific first lien net leverage ratios).
9 unchanged sentences
(in its capacity as the issuer of the Notes, the “Issuer”), with the Issuer continuing as the surviving entity and assuming the obligations of Finco.
−Removed: The Notes were sold to BofA Securities, Inc., Deutsche Bank Securities Inc., Morgan Stanley & Co.
−Removed: LLC and Apollo Global Securities, LLC.
−Removed: The Notes were resold to certain non-U.S.
−Removed: persons pursuant to Regulation S under the Securities Act of 1933, as amended (the “Securities
−Removed: Act”), and to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act at a purchase price equal to 100% of their principal amount.
The terms of the Notes are governed by an Indenture, dated as of October 28, 2020 (the “Indenture”), among Finco, the Issuer, the guarantors named therein (the “Notes Guarantors”) and Wilmington Trust, National Association, as trustee and collateral agent.
−Removed: The Borrower may voluntarily prepay loans or reduce commitments under the Senior Secured Notes, in whole or in part, subject to minimum amounts, with prior notice but without premium or penalty.
−Removed: The Company voluntarily repurchased an aggregate of $127.9 million principal amount of its Senior Secured Notes during the nine months ended September 30, 2024.
−Removed: The Company recognized a gain on the repurchase of $8.6 million for the nine months ended September 30, 2024, as a component of “Interest expense, net” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.
−Removed: There were no repurchases of Senior Secured Notes during the nine months ended September 30, 2023.
+Added: The Issuer may voluntarily prepay loans or reduce commitments under the Notes, in whole or in part, subject to minimum amounts, with prior notice but without premium or penalty.
+Added: The Company voluntarily repurchased an aggregate of $20.0 million principal amount of the Notes during the three months ended March 31, 2025.
+Added: recognized a gain on the repurchase of the Notes of $1.8 million for the three months ended March 31, 2025, as a component of “Interest expense, net” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.
Interest and maturity
14 unchanged sentences
incur additional indebtedness or guarantee indebtedness;
−Removed: pay dividends or make other distributions in respect
−Removed: of, or repurchase or redeem, the Issuer’s or a parent entity’s capital stock;
+Added: pay dividends or make other distributions in respect of, or repurchase or redeem, the Issuer’s or a parent entity’s capital stock;
prepay, redeem or repurchase certain indebtedness;
21 unchanged sentences
Cash and Cash Equivalents Held Outside the United States
−Removed: As of September 30, 2024, and December 31, 2023, $64.7 million and $43.8 million, respectively, of our cash and cash equivalents were held by foreign subsidiaries.
−Removed: As of September 30, 2024, and December 31, 2023, $23.7 million and $30.4 million, respectively, of our cash and cash equivalents were held by foreign branches.
−Removed: We assessed our determination as to our indefinite reinvestment intent for certain of our foreign subsidiaries and recorded a deferred tax liability of approximately $0.5 million of withholding tax as of September 30, 2024 for unremitted earnings in Canada with respect to which we do not have an indefinite reinvestment assertion.
+Added: As of March 31, 2025 and December 31, 2024, $67.5 million and $65.0 million, respectively, of our cash and cash equivalents were held by foreign subsidiaries.
+Added: As of March 31, 2025, and December 31, 2024, $25.2 million and $18.5 million, respectively, of our cash and cash equivalents were held by foreign branches.
+Added: We assessed our determination as to our indefinite reinvestment intent for certain of our foreign subsidiaries and recorded a deferred tax liability of approximately $0.6 million of withholding tax as of March 31, 2025 for unremitted earnings in Canada with respect to which we do not have an indefinite reinvestment assertion.
We will continue to evaluate our cash needs, however we currently do not intend, nor do we foresee a need, to repatriate funds from the foreign subsidiaries except for Canada.
4 unchanged sentences
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 September 30, 2024, to be indefinitely reinvested and, accordingly, no provision has been made for taxes in excess of the $0.5 million noted above.
+Added: We consider the majority of the undistributed earnings of our foreign subsidiaries, as of March 31, 2025, 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
3 unchanged sentences
Critical Accounting Policies and Estimates
−Removed: Our critical accounting policies and estimates are included in our 2023 Annual Report and did not materially change during the nine months ended September 30, 2024 except as included below.
−Removed: Goodwill represents the excess of the purchase price over the fair value of the net identifiable tangible and intangible assets acquired in an acquisition.
−Removed: 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 client, distribution methods and regulatory environment.
−Removed: 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).
−Removed: 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.
−Removed: 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.
−Removed: The fair values of the Branded Agencies and Experiential Services reporting units exceeded their respective carrying values by less than 20%.
−Removed: Notwithstanding the foregoing, 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.
−Removed: 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 rates, discount rates, and incremental net working capital, all of which require significant management judgment.
−Removed: 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.
−Removed: The guideline companies are first screened by industry group and then further narrowed based on the reporting units’ business descriptions, markets served, competitors, EBITDA margins and revenue size.
−Removed: Market multiples are then selected from within the range of these guideline companies’ multiples based on the subject reporting unit.
−Removed: We compare a weighted average of the output from the income and market approaches to the carrying value of each reporting unit.
−Removed: 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.
−Removed: We based our fair value estimates on assumptions we believe to be reasonable but which are unpredictable and inherently uncertain.
−Removed: 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.
−Removed: 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: 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 second quarter of fiscal year 2024, which has been reflected in “Impairment of goodwill” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.
−Removed: As a result of this charge, an immaterial amount of goodwill remains in this reporting unit.
−Removed: 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.
−Removed: 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: Our critical accounting policies and estimates are included in our 2024 Annual Report and did not materially change during the three months ended March 31, 2025.
Recently Issued Accounting Pronouncements
2 unchanged sentences
Improvements to Income Tax Disclosures , which requires entities to expand their existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid.
−Removed: The standard is effective for us beginning in fiscal year 2025, with early adoption permitted.
−Removed: The new standard is expected to
−Removed: be applied prospectively, but retrospective application is permitted.
−Removed: We are currently evaluating the impact of ASU 2023-09 on the consolidated financial statements and related disclosures.
−Removed: In December 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):
−Removed: Improvements to Reportable Segment Disclosures, which requires entities to disclose incremental segment information on an annual and interim basis, including significant segment expenses and measures of profit or loss that are regularly provided to the CODM.
−Removed: The standard is effective for us beginning in fiscal year 2024 and interim periods within fiscal year 2025.
+Added: The standard is effective for our annual report for fiscal year 2025.
+Added: The new standard is expected to be applied prospectively,
+Added: but retrospective application is permitted.
We are currently evaluating the impact of ASU 2023-09 on the consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):
−Removed: Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis.
−Removed: The standard is effective for the Company beginning in fiscal year 2026 and interim periods within fiscal year 2027, with early adoption permitted.
+Added: Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued ASU 2025-01, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):
+Added: Clarifying the Effective Date (“ASU 2025-01”).
+Added: ASU 2024-03 requires public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis.
+Added: ASU 2024-03, as clarified by ASU 2025-01, is effective for us beginning in fiscal year 2026 and interim periods within fiscal year 2027, with early adoption permitted.
The new standard is expected to be applied prospectively, but retrospective application is permitted.
−Removed: The Company is currently evaluating the impact of ASU 2024-03 on the consolidated financial statements and related disclosures.
+Added: We are currently evaluating the impact of ASU 2024-03 on the consolidated financial statements and related disclosures.
+Added: Other new accounting pronouncements recently issued or newly effective were not applicable to us, did not have a material impact on our condensed consolidated financial statements or are not expected to have a material impact on our condensed consolidated financial statements.
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.