Advantage Solutions Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS ADVANTAGE SOLUTIONS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except per share data) March 31, 2021 December 31, 2020 ASSETS Current assets Cash and cash equivalents $ 156,351 $ 204,301 Restricted cash 17,473 15,665 Accounts receivable, net of allowance for expected credit losses of $ 16,533 and $ 16,377 , respectively 576,282 574,142 Prepaid expenses and other current assets 137,085 105,643 Total current assets 887,191 899,751 Property and equipment, net 73,876 80,016 Goodwill 2,173,924 2,163,339 Other intangible assets, net 2,412,136 2,452,796 Investments in unconsolidated affiliates 116,176 115,624 Other assets 62,867 65,966 Total assets $ 5,726,170 $ 5,777,492 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Current portion of long-term debt $ 13,304 $ 63,745 Accounts payable 189,846 195,452 Accrued compensation and benefits 123,335 142,136 Other accrued expenses 141,467 121,758 Deferred revenue 54,187 51,898 Total current liabilities 522,139 574,989 Long-term debt, net of current portion 2,028,090 2,029,328 Deferred income tax liabilities, net 492,185 491,242 Warrant liability 26,761 21,234 Other long-term liabilities 134,178 141,910 Total liabilities 3,203,353 3,258,703 Commitments and contingencies (Note 10) Redeemable noncontrolling interest 1,873 — Equity attributable to stockholders of Advantage Solutions Inc. Preferred stock, no par value, 10,000,000 shares authorized; no ne issued and outstanding as of March 31, 2021 and December 31, 2020, respectively — — Common stock, $ 0.0001 par value, 3,290,000,000 shares authorized; 318,449,966 and 318,425,182 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively 32 32 Additional paid in capital 3,354,383 3,348,546 Accumulated deficit ( 921,217 ) ( 921,101 ) Loans to Topco ( 6,322 ) ( 6,316 ) Accumulated other comprehensive (loss) income ( 1,746 ) 674 Total equity attributable to stockholders of Advantage Solutions Inc. 2,425,130 2,421,835 Nonredeemable noncontrolling interest 95,814 96,954 Total stockholders’ equity 2,520,944 2,518,789 Total liabilities, redeemable noncontrolling interest, and stockholders’ equity $ 5,726,170 $ 5,777,492 See Notes to the Condensed Consolidated Financial Statements. 3 Table of Contents ADVANTAGE SOLUTIONS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) Three Months Ended March 31, (in thousands, except share and per share data) 2021 2020 Revenues $ 791,021 $ 879,396 Cost of revenues (exclusive of depreciation and amortization shown separately below) 653,339 746,693 Selling, general, and administrative expenses 40,481 41,056 Depreciation and amortization 59,613 60,209 Total expenses 753,433 847,958 Operating income 37,588 31,438 Other expenses: Change in fair value of warrant liability 5,526 — Interest expense, net 30,865 51,794 Total other expenses 36,391 51,794 Income (loss) before income taxes 1,197 ( 20,356 ) Provision for income taxes 1,743 1,367 Net loss ( 546 ) ( 21,723 ) Less: net loss attributable to noncontrolling interest ( 430 ) ( 15 ) Net loss attributable to stockholders of Advantage Solutions Inc. ( 116 ) ( 21,708 ) Other comprehensive loss, net of tax: Foreign currency translation adjustments ( 2,420 ) ( 8,160 ) Total comprehensive loss attributable to stockholders of Advantage Solutions Inc. $ ( 2,536 ) $ ( 29,868 ) Net loss per common share: Basic and diluted $ ( 0.00 ) $ ( 0.11 ) Weighted-average number of common shares: Basic and diluted 317,601,345 203,750,000 See Notes to the Condensed Consolidated Financial Statements. 4 Table of Contents ADVANTAGE SOLUTIONS INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) Accumulated Advantage Additional Loans Other Solutions Inc. Nonredeemable Total Common Stock Paid-in Accumulated to Comprehensive Stockholders’ noncontrolling Stockholders’ (in thousands, except share data) Shares Amount Capital Deficit Topco Income (Loss) Equity Interests Equity Balance at January 1, 2021 318,425,182 $ 32 $ 3,348,546 $ ( 921,101 ) $ ( 6,316 ) $ 674 $ 2,421,835 $ 96,954 $ 2,518,789 Comprehensive loss Net loss — — — ( 116 ) — — ( 116 ) ( 430 ) ( 546 ) Foreign currency translation adjustments — — — — — ( 2,420 ) ( 2,420 ) ( 710 ) ( 3,130 ) Total comprehensive loss ( 2,536 ) ( 1,140 ) ( 3,676 ) Loans to Topco — — — — ( 6 ) — ( 6 ) — ( 6 ) Equity-based compensation of Topco — — ( 4,049 ) — — — ( 4,049 ) — ( 4,049 ) Vesting of stock based compensation awards 24,784 — — — — — — — — Stock-based compensation expense — — 9,886 — — — 9,886 — 9,886 Balance at March 31, 2021 318,449,966 $ 32 $ 3,354,383 $ ( 921,217 ) $ ( 6,322 ) $ ( 1,746 ) $ 2,425,130 $ 95,814 $ 2,520,944 Accumulated Advantage Additional Loans Other Solutions Inc. Nonredeemable Total Common Stock Paid-in Accumulated to Comprehensive Stockholders’ noncontrolling Stockholders’ (in thousands, except share data) Shares Amount Capital Deficit Topco Income (Loss) Equity Interests Equity Balance at January 1, 2020 203,750,000 $ 20 $ 2,337,471 $ ( 745,295 ) $ ( 6,244 ) $ ( 8,153 ) $ 1,577,799 $ 92,007 $ 1,669,806 Comprehensive loss Net loss — — — ( 21,708 ) — — ( 21,708 ) ( 15 ) ( 21,723 ) Foreign currency translation adjustments — — — — — ( 8,160 ) ( 8,160 ) ( 4,289 ) ( 12,449 ) Total comprehensive loss ( 29,868 ) ( 4,304 ) ( 34,172 ) Balance at March 31, 2020 203,750,000 $ 20 $ 2,337,471 $ ( 767,003 ) $ ( 6,244 ) $ ( 16,313 ) $ 1,547,931 $ 87,703 $ 1,635,634 See Notes to the Condensed Consolidated Financial Statements. 5 Table of Contents ADVANTAGE SOLUTIONS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31, (in thousands) 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ ( 546 ) $ ( 21,723 ) Adjustments to reconcile net loss to net cash provided by operating activities Noncash interest (income) expense ( 3,084 ) 4,121 Depreciation and amortization 59,613 60,209 Changes in fair value of warrant liability 5,526 — Fair value adjustments related to contingent consideration ( 584 ) 4,607 Deferred income taxes 1,793 22,987 Equity-based compensation of Topco ( 4,048 ) — Stock-based compensation 9,886 — Equity in earnings of unconsolidated affiliates ( 1,513 ) ( 1,112 ) Distribution received from unconsolidated affiliates 150 221 Loss on disposal of property and equipment 1,566 — Changes in operating assets and liabilities, net of effects from purchases of businesses: Accounts receivable ( 781 ) 37,343 Prepaid expense and other assets ( 25,917 ) ( 23,401 ) Accounts payable ( 7,779 ) ( 28,998 ) Accrued compensation and benefits ( 18,349 ) ( 6,020 ) Deferred revenues 2,538 7,062 Other accrued expenses and other liabilities 11,416 ( 4,331 ) Net cash provided by operating activities 29,887 50,965 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of businesses, net of cash acquired ( 14,034 ) ( 51,389 ) Purchase of property and equipment ( 5,247 ) ( 8,453 ) Net cash used in investing activities ( 19,281 ) ( 59,842 ) CASH FLOWS FROM FINANCING ACTIVITIES Borrowings under lines of credit 8,773 89,529 Payments on lines of credit ( 59,604 ) ( 9,703 ) Principal payments on long-term debt ( 3,510 ) ( 6,524 ) Contingent consideration payments — ( 2,150 ) Holdback payments ( 173 ) — Net cash (used in) provided by financing activities ( 54,514 ) 71,152 Net effect of foreign currency fluctuations on cash ( 2,234 ) ( 6,883 ) Net change in cash, cash equivalents and restricted cash ( 46,142 ) 55,392 Cash, cash equivalents and restricted cash, beginning of period 219,966 199,025 Cash, cash equivalents and restricted cash, end of period $ 173,824 $ 254,417 SUPPLEMENTAL CASH FLOW INFORMATION Purchase of property and equipment recorded in accounts payable and accrued expenses $ 869 $ 876 See Notes to the Condensed Consolidated Financial Statements. 6 Table of Contents ADVANTAGE SOLUTIONS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Organization and Significant Accounting Policies Advantage Solutions Inc. ( “Advantage” or the “Company”) is a provider of outsourced solutions to consumer goods companies and retailers. On September 7, 2020, ASI Intermediate Corp., then known as Advantage Solutions Inc. (“Legacy Advantage”), entered into an agreement and plan of merger (as amended, modified, supplemented or waived, the “Merger Agreement”), with Conyers Park II Acquisition Corp., a Delaware corporation (“Conyers Park”), now known as Advantage Solutions Inc., CP II Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Conyers Park (“Merger Sub”), and Karman Topco L.P., then the parent company of Legacy Advantage (“Topco”). Conyers Park neither engaged in any operations nor generated any revenue. Based on Conyers Park’s business activities, it was a “shell company” as defined under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). On October 28, 2020 (the “Closing Date”), Conyers Park consummated the merger pursuant to the Merger Agreement, and Merger Sub was merged with and into Legacy Advantage with Legacy Advantage surviving the merger as a wholly owned subsidiary of Conyers Park (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Transactions”). On the Closing Date, and in connection with the closing of the Transactions (the “Closing”), Conyers Park changed its name to Advantage Solutions Inc. and Legacy Advantage changed its name to ASI Intermediate Corp. The Company’s Class A common stock is listed on the Nasdaq Global Select Market under the symbol “ADV” and warrants to purchase the Class A common stock at an exercise price of $ 11.50 per share are listed on the Nasdaq Global Select M arket under the symbol “ADVWW”. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. The unaudited condensed consolidated financial statements do not include all of the information required by accounting principles generally accepted in the United States (“ U.S. GAAP ”). The Condensed Consolidated Balance Sheet at December 31, 2020 was derived from the audited Consolidated Balance Sheet at that date and does not include all the disclosures required by U.S. GAAP. In the opinion of management, all adjustments which are of a normal recurring nature and necessary for a fair statement of the results as of March 31, 2021 and for the three months ended March 31, 2021 and 2020 have been reflected in the condensed consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2020 and the related footnotes thereto. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period. COVID-19 Pandemic COVID-19 continues to spread throughout the United States and other countries across the world, and the duration and severity of the effects are currently unknown. The COVID-19 pandemic has impacted the Company and could materially impact our financial results in the future. The Consolidated Condensed Financial Statements presented herein reflect estimates and assumptions made by management at March 31, 2021. Such estimates and assumptions affect, among other things, the Company’s goodwill, long-lived asset and indefinite-lived intangible asset valuation, assessment of the annual effective tax rate and the allowance for expected credit losses and bad debt. Events and changes in circumstances, including those resulting from the impacts of COVID-19, will be reflected in management’s estimates for future periods. 7 Table of Contents Recent Accounting Standards Recent Accounting Standards Adopted by the Company In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (“ ASU 2019-12 ”), which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes , and clarifies certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company adopted ASU 2019-12 on January 1, 2021 and the adoption of this accounting standard did not have a material impact on the Company’s condensed consolidated financial statements. Accounting Standards Recently Issued but Not Yet Adopted by the Company In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This guidance provides optional expedients and exceptions for U.S. GAAP to contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate if certain criteria are met. The amendments in this update are effective for reporting periods that include or are subsequent to March 12, 2020. Once adopted, the amendments in this update must be applied prospectively for all eligible contract modifications for that topic. The Company is evaluating the potential impact of this adoption on its consolidated financial statements. In May 2021, the FAS issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force) . The guidance clarifies certain aspects of the current guidance to promote consistency among reporting of an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted for all entities, including adoption in an interim period. The Company is evaluating the potential impact of this adoption on its consolidation financial statements. All other new accounting pronouncements issued, but not yet effective or adopted have been deemed to be not relevant to the Company and, accordingly, are not expected to have a material impact once adopted. 2. Revenue Recognition The Company recognizes revenue when control of promised goods or services are transferred to the client in an amount that reflects the consideration that the Company expects to be entitled to in exchange for such goods or services. Substantially all of the Company’s contracts with clients involve the transfer of a service to the client, which represents a performance obligation that is satisfied over time because the client simultaneously receives and consumes the benefits of the services provided. In most cases, the contracts consist of a performance obligation that is comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service). For these contracts, the Company allocates the ratable portion of the consideration based on the services provided in each period of service to such period. Revenues related to the sales segment are primarily recognized in the form of commissions, fee-for-service, or on a cost-plus basis for providing headquarter relationship management, analytics, insights and intelligence services, administrative services, retail services, retailer client relationships and in-store media programs, and digital technology solutions (which include business intelligence solutions, e-commerce services, and content services). Marketing segment revenues are primarily recognized in the form of fee-for-service (including retainer fees, fees charged to clients based on hours incurred, project-based fees, or fees for executing in-person consumer engagements or experiences, which engagements or experiences the Company refers to as “events”), commissions, or on a cost-plus basis for providing experiential marketing, shopper and consumer marketing services, private label development and digital, social, and media services. 8 Table of Contents The Company disaggregates revenues from contracts with clients by reportable segment. Revenues within each segment are further disaggregated between brand-centric services and retail-centric services. Brand-centric services are centered on providing solutions to support manufacturers’ sales and marketing strategies. Retail-centric services are centered on providing solutions to retailers. Disaggregated revenues were as follows: Three Months Ended March 31, (in thousands) 2021 2020 Sales brand-centric services $ 293,531 $ 317,598 Sales retail-centric services 240,793 190,200 Total sales revenues 534,324 507,798 Marketing brand-centric services 116,982 96,365 Marketing retail-centric services 139,715 275,233 Total marketing revenues 256,697 371,598 Total revenues $ 791,021 $ 879,396 Substantially all of the Company’s contracts with its clients either have a contract term that is less than one year with options for renewal and/or can be cancelled by either party upon 30 to 120 days’ notice. The Company does not have significant consideration allocated to remaining performance obligations for contracts with a contract term that exceeds one year. When the Company satisfies its performance obligation and recognizes revenues, the Company has a present and unconditional right to payment and records the receivable from clients in Accounts receivable, net of allowance for expected credit losses in the Condensed Consolidated Balance Sheets. For certain contracts with clients, the Company is entitled to additional fees upon meeting specific performance goals or thresholds, which are referred to as bonus revenues. Bonus revenues are variable consideration and are estimated using an expected value/most likely amount approach. Bonus revenues are recognized as revenues as the related services are performed for the client. The Company records an adjustment to revenues for differences between estimated revenues and the amounts ultimately invoiced to the client. Adjustments to revenues during the current period related to services transferred during prior periods were not material for the three months ended March 31, 2021 and 2020. The Company evaluates each client contract individually in accordance with the applicable accounting guidance to determine whether the Company acts as a principal (whereby the Company would present revenues on a gross basis), or as an agent (whereby the Company would present revenues on a net basis). While the Company primarily acts as a principal in its arrangements and reports revenues on a gross basis, the Company will occasionally act as an agent and accordingly presents revenues on a net basis. For example, for certain advertising arrangements, the Company’s clients purchase media content in advance, and the Company does not take on any risk of recovering its cost to acquire the media content. As a result, the Company determined it acts as the agent in these arrangements and records revenues and their related costs on a net basis. However, in cases where media content is not purchased in advance by its clients, the Company records such revenues and its related costs on a gross basis, as it bears the risk of recovering the costs to acquire the revenues related to such media content and it is responsible for fulfillment of the services thereunder. Contract liabilities represent deferred revenues which are cash payments that are received in advance of the Company’s satisfaction of the applicable obligation(s) and are included in Deferred revenues in the Condensed Consolidated Balance Sheets. Deferred revenues are recognized as revenues when the related services are performed for the client. Revenues recognized during the three months ended March 31, 2021 that were included in Deferred revenues as of December 31, 2020 were $ 26.1 million. Revenues recognized during the three months ended March 31, 2020 that were included in Deferred revenues as of December 31, 2019 were $ 24.0 million. 9 Table of Contents 3. Acquisitions 2021 Acquisitions The Company acquired two businesses during the three months ended March 31, 2021, which were two sales agencies. The acquisitions were accounted for under the acquisition method of accounting. As such, the purchase consideration for each acquired business was allocated to the acquired tangible and intangible assets and liabilities assumed based upon their respective fair values. Assets acquired and liabilities assumed in the business combination were recorded on the Company’s financial statements as of the acquisition date based upon the estimated fair value at such date. The excess of the purchase consideration over the estimated fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill. The allocation of the excess purchase price was based upon preliminary estimates and assumptions and is subject to revision when the Company receives final information. Accordingly, the measurement period for such purchase price allocations will end when the information, or the facts and circumstances, becomes available, but will not exceed twelve months. The results of operations of each acquired business has been included in the Condensed Consolidated Statements of Comprehensive Loss since its respective date of acquisition. The aggregate purchase price for the acquisitions referenced above was $ 18.2 million, which includes $ 14.0 million paid in cash, $ 2.7 million recorded as contingent consideration liabilities, and $ 1.4 million recorded as holdback amounts. Contingent consideration payments are determined based on future financial performance and payment obligations (as defined in the applicable purchase agreement) and recorded at fair value. The maximum potential payment outcome related to the acquisitions is $ 7.0 million. Holdback amounts are used to withhold a portion of the initial purchase price payment until certain post-closing conditions are satisfied and are typically settled within 18 months of the acquisition. The goodwill related to the acquisitions represented the value paid for the assembled workforce, geographic presence, and expertise. Of the resulting goodwill relating to these acquisitions, $ 4.5 million is deductible for tax purposes. The preliminary fair values of the identifiable assets and liabilities of the acquisitions completed during the three months ended March 31, 2021, as of the applicable acquisition dates, are as follows: (in thousands) Consideration: Cash $ 14,034 Holdbacks 1,443 Fair value of contingent consideration 2,692 Total consideration $ 18,169 Recognized amounts of identifiable assets acquired and liabilities assumed: Assets Accounts receivable $ 2,998 Property and equipment 87 Identifiable intangible assets 9,103 Total assets 12,188 Liabilities Total liabilities 3,678 Redeemable noncontrolling interest 1,804 Total identifiable net assets 6,706 Goodwill arising from acquisitions $ 11,463 10 Table of Contents The identifiable intangible assets are being amortized on a straight-line basis over their estimated useful lives. The preliminary fair value and estimated useful lives of the intangible assets acquired are as follows: (in thousands) Amount Weighted Average Useful Life Client relationships $ 8,102 8 years Trade Names 1,001 5 years Total identifiable intangible assets $ 9,103 The operating results of the businesses acquired during the three months ended March 31, 2021 contributed total revenues of $ 4.7 million in the three months ended March 31, 2021. The Company has determined that the presentation of net income from the date of acquisition is impracticable due to the integration of the operations upon acquisition. During the three months ended March 31, 2021, the Company incurred $ 0.2 million in transaction costs related to the acquisitions described above. These costs have been included in “Selling, general, and administrative expenses” in the Condensed Consolidated Statements of Comprehensive Loss. Supplemental Pro Forma Information Supplemental information on a pro forma basis, presented as if the acquisitions executed during the period from January 1, 2021 to May 17, 2021 and for the year ended December 31, 2020, had been consummated as of the beginning of the comparative prior period, is as follows: Three Months Ended March 31, (in thousands, except per share data) 2021 2020 Total revenues $ 792,444 $ 881,119 Net income (loss) attributable to stockholders of Advantage Solutions Inc. $ ( 300 ) $ ( 21,804 ) Basic and diluted net income (loss) per common share $ ( 0.00 ) $ ( 0.10 ) The unaudited pro forma supplemental information is based on estimates and assumptions which the Company believes are reasonable and reflects the pro forma impact of additional amortization related to the fair value of acquired intangible assets, the pro forma impact of acquisition costs which consisted of legal, advisory and due diligence fees and expenses, and the pro forma tax effect of the pro forma adjustments for the three months ended March 31, 2021 and 2020. This supplemental pro forma information has been prepared for comparative purposes and does not purport to be indicative of what would have occurred had the acquisition been consummated during the periods for which pro forma information is presented. 4. Goodwill and Intangible Assets Changes in goodwill for the three months ended March 31, 2021 are as follows: (in thousands) Sales Marketing Total Gross carrying amount as of December 31, 2020 $ 2,114,378 $ 700,961 $ 2,815,339 Accumulated impairment charge (1) ( 652,000 ) — ( 652,000 ) Balance at December 31, 2020 $ 1,462,378 $ 700,961 $ 2,163,339 Acquisitions 11,463 — 11,463 Measurement period adjustments 167 ( 1,045 ) ( 878 ) Balance at March 31, 2021 1,474,008 699,916 2,173,924 (1) During the fiscal year ended December 31, 2018, the Company recognized a non-cash goodwill impairment cha rge of $ 652.0 million related to the Company’s sales reporting unit as a result of the Company’s annual evaluation of goodwill impairment test. 11 Table of Contents The following tables set forth information for intangible assets: March 31, 2021 (in thousands) Weighted Average Useful Life Gross Carrying Value Accumulated Amortization Accumulated Impairment Charges (1) Net Carrying Value Finite-lived intangible assets: Client relationships 14 years $ 2,463,217 $ 1,022,275 $ — $ 1,440,942 Trade names 8 years 134,749 69,307 — 65,442 Developed technology 5 years 10,160 6,497 — 3,663 Covenant not to compete 5 years 6,100 4,011 — 2,089 Total finite-lived intangible assets 2,614,226 1,102,090 — 1,512,136 Indefinite-lived intangible assets: Trade names 1,480,000 — 580,000 900,000 Total other intangible assets $ 4,094,226 $ 1,102,090 $ 580,000 $ 2,412,136 (1) During the fiscal year ended December 31, 2018, the Company recognized a non-cash intangible asset impairment charge of $ 580.0 million, related to the Company’s sales trade name as a result of the Company’s annual impairment test for indefinite-lived intangible assets. December 31, 2020 (in thousands) Weighted Average Useful Life Gross Carrying Value Accumulated Amortization Accumulated Impairment Charges Net Carrying Value Finite-lived intangible assets: Client relationships 14 years $ 2,455,360 $ 977,140 $ — $ 1,478,220 Trade names 8 years 134,220 66,209 — 68,011 Developed technology 5 years 10,160 5,989 — 4,171 Covenant not to compete 5 years 6,100 3,706 — 2,394 Total finite-lived intangible assets 2,605,840 1,053,044 — 1,552,796 Indefinite-lived intangible assets: Trade names 1,480,000 — 580,000 900,000 Total other intangible assets $ 4,085,840 $ 1,053,044 $ 580,000 $ 2,452,796 As of March 31, 2021, estimated future amortization expenses of the Company’s existing intangible assets are as follows: (in thousands) Remainder of 2021 147,319 2022 194,208 2023 190,663 2024 189,711 2025 184,576 Thereafter 605,659 Total amortization expense $ 1,512,136 12 Table of Contents 5. Debt March 31, December 31, (in thousands) 2021 2020 New Term Loan Facility $ 1,321,688 $ 1,325,000 Notes 775,000 775,000 New Revolving Credit Facility — 50,000 Notes payable and deferred obligations 2,973 3,618 2,099,661 2,153,618 Less: current portion 13,304 63,745 Less: debt issuance costs 58,267 60,545 Long-term debt, net of current portion $ 2,028,090 $ 2,029,328 As of March 31, 2021, the Company had $ 1.3 billion of debt outstanding under the New Term Loan Facility and $ 775 million of debt outstanding under the Notes with maturity dates of October 28, 2027 and November 15, 2028 , respectively. The Company was in compliance with all of its affirmative and negative covenants under the New Term Loan Facility and Notes as of March 31, 2021. In addition, the Company was required to repay the principal under the New Term Loan Facility (as such term was defined in the New Term Loan Facility Agreement) in the greater amount of its excess cash flow, as defined in the New Term Loan Facility Agreement, or $ 13.3 million, per annum, in quarterly payments. The Company made the minimum quarterly principal payments of $ 3.3 million during the three months ended March 31, 2021 and no payments under the excess cash flow calculation were required. During the three months ended March 31, 2020, the Company made the minimum quarterly principal payments of $ 6.5 million pursuant to its then outstanding first lien term loans that existed prior to consummation of the Transactions. Future minimum principal payments on long-term debt are as follows as of March 31, 2021: (in thousands) Remainder of 2021 $ 9,987 2022 13,294 2023 13,293 2024 13,274 2025 13,277 Thereafter 2,036,536 Total future minimum principal payments $ 2,099,661 13 Table of Contents 6. Fair Value of Financial Instruments The Company measures fair value based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. The following table sets forth the Company’s financial assets and liabilities measured on a recurring basis at fair value, categorized by input level within the fair value hierarchy. March 31, 2021 (in thousands) Fair Value Level 1 Level 2 Level 3 Assets measured at fair value Cash and cash equivalents $ 156,351 $ 156,351 $ — $ — Derivative financial instruments 7,281 — 7,281 — Total assets measured at fair value $ 163,632 $ 156,351 $ 7,281 $ — Liabilities measured at fair value Derivative financial instruments $ 1,515 $ — $ 1,515 $ — Warrant liability 26,761 — — 26,761 Contingent consideration liabilities 46,841 — — 46,841 Total liabilities measured at fair value $ 75,117 $ — $ 1,515 $ 73,602 December 31, 2020 (in thousands) Fair Value Level 1 Level 2 Level 3 Assets measured at fair value Cash and cash equivalents $ 204,301 $ 204,301 $ — $ — Derivative financial instruments 1,824 — 1,824 — Total assets measured at fair value $ 206,125 $ 204,301 $ 1,824 $ — Liabilities measured at fair value Derivative financial instruments $ 1,882 $ — $ 1,882 $ — Warrant liability 21,234 — — 21,234 Contingent consideration liabilities 45,901 — — 45,901 Total liabilities measured at fair value $ 69,017 $ — $ 1,882 $ 67,135 Interest Rate Cap Agreements The Company had interest rate cap contracts with an aggregate notional value of principal of $ 2.2 billion as of e ach of March 31, 2021 and December 31, 2020, from various financial institutions to manage the Company’s exposure to interest rate movements on variable rate credit facilities. As of March 31, 2021, the aggregate fair value of the Company’s outstanding interest rate caps represented an outstanding net asset of $ 7.3 million and an outstanding net liability of $ 1.5 million. As of December 31, 2020, the aggregate fair value of the Company’s outstanding interest rate caps represented an outstanding net asset of $ 1.8 million and an outstanding net liability of $ 1.9 million. As of March 31, 2021, $ 7.3 million and $ 1.5 million of fair value of the Company’s outstanding interest rate caps were included in “Prepaid expenses and other current assets” and “Other accrued expenses” in the Consolidated Balance Sheets, respectively, with changes in fair value recognized as a component of “Interest expense, net” in the Consolidated Statements of Operations and Comprehensive Loss. As of December 31, 2020, $ 1.8 million, $ 1.0 million, and $ 0.9 million of fair value of the Company’s outstanding interest rate caps were included in “Prepaid expenses and other current assets”, “Other accrued expenses”, and “Other long-term liabilities” in the Consolidated Balance Sheets, respectively, with changes in fair value recognized as a component of “Interest expense, net” in the Consolidated Statements of Operations and Comprehensive Loss. 14 Table of Contents During the three months ended March 31, 2021 and 2020, the Company recorded a gain within interest expense, net in the amount of $ 5.4 million, and $ 0.1 million, respectively, related to changes in the fair value of its derivative instruments. Forward Contracts As of March 31, 2021, the Company had two open Euro forward contracts to hedge foreign currency exposure on a total of € 1.2 million, with maturities in fiscal year 2021 . As of December 31, 2020, the Company had no open Euro forward contracts. During the three months ended March 31, 2021 and 2020, the Company recognized a gain less than $ 0.1 million and $ 0.1 million, respectively, related to changes in fair value of the forward contracts as a component of “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Comprehensive Loss. Warrant Liability The estimated fair value of the liability is recorded using significant unobservable measures and other fair value inputs and is therefore classified as a Level 3 financial instrument. The fair value of the warrants on the date of issuance and on each remeasurement date of certain warrants issued by the Company in a private placement in connection with the Closing (the “private placement warrants”) and classified as liabilities is estimated using the Black-Scholes option pricing model using the following assumptions: March 31, 2021 December 31, 2020 Fair value warrants per share $ 3.65 $ 2.90 Share Price $ 11.81 $ 13.17 Exercise price per share $ 11.50 $ 11.50 Term (years) 4.6 years 4.8 years Implied volatility 34.0 % 17.0 % Risk-free interest rate 0.9 % 0.4 % Dividend yield 0.0 % 0.0 % As of March 31, 2021, 7,333,333 private placement warrants remained outstanding at a fair value of $ 26.7 million resulting in a $ 5.5 million expense related to the change in fair value of warrant liability for the three months ended March 31, 2021. The warrant liability is stated at fair value at each reporting period with the change in fair value recorded on the Consolidated Statement of Operations and Comprehensive Loss until the warrants are exercised, expire or other facts and circumstances lead the warrant liability to be reclassified as an equity instrument. Contingent Consideration Liabilities Each reporting period, the Company measures the fair value of its contingent liabilities by evaluating the significant unobservable inputs and probability weightings using Monte Carlo simulations. Any resulting decreases or increases in the fair value result in a corresponding gain or loss reported in “Selling, general, and administrative expenses” in the Condensed Consolidated Statements of Comprehensive Loss. 15 Table of Contents As of March 31, 2021, the maximum potential payment outcomes were $ 289.9 million. The following table summarizes the changes in the carrying value of estimated contingent consideration liabilities: March 31, (in thousands) 2021 2020 Beginning of the period $ 45,901 $ 47,649 Fair value of acquisitions 2,692 17,210 Payments — ( 2,375 ) Measurement period adjustments ( 1,181 ) — Changes in fair value ( 584 ) 4,577 Foreign exchange translation effects 13 ( 775 ) End of the period $ 46,841 $ 66,286 Since the initial preliminary estimates reported in 2020, the Company has updated certain amounts reflected in the preliminary purchase price allocation, as summarized in the fair values of assets acquired and liabilities assumed as set forth above. Specifically, contingent consideration decreased $ 1.2 million due to fair value measurement period adjustments. Measurement period adjustments are recognized in the reporting period in which the adjustments are determined and calculated as if the accounting had been completed at the acquisition date. Long-term Debt The following table sets forth the carrying values and fair values of the Company’s financial liabilities measured on a recurring basis, categorized by input level within the fair value hierarchy: (in thousands) Carrying Value Fair Value (Level 2) Balance at March 31, 2021 New Term Loan Credit Facility $ 1,321,688 $ 1,451,134 Notes 775,000 902,118 Notes payable and deferred obligations 2,973 2,973 Total long-term debt $ 2,099,661 $ 2,356,225 (in thousands) Carrying Value Fair Value (Level 2) Balance at December 31, 2020 New Term Loan Credit Facility $ 1,325,000 $ 1,447,993 Notes 775,000 884,826 New Revolving Credit Facility 50,000 50,000 Notes payable and deferred obligations 3,618 3,618 Total long-term debt $ 2,153,618 $ 2,386,437 7. Related Party Transactions Conyers Park and the Transactions In May 2019, Conyers Park II Sponsor LLC, an affiliate of Centerview Capital Management, LLC, which was Conyer Park’s sponsor prior to the Merger (“CP Sponsor”) purchased 11,500,000 of Conyers Park’s Class B ordinary shares for an aggregate purchase price of $ 25,000 in cash, or approximately $ 0.002 per share. In June 2019, CP Sponsor transferred 25,000 shares to each of four individuals, including a current member of the board of directors of the Company. At the time of the Closing, the 11,250,000 shares of Conyers Park Class B common stock, par value $ 0.0001 per share, then held by CP Sponsor and its directors automatically converted into shares of our Class A common stock. CP Sponsor also purchased 7,333,333 private placement warrants for a purchase price of $ 1.50 per whole warrant, or $ 11,000,000 in the aggregate, in private placement transactions that occurred simultaneously with the closing of the Conyers Park’s initial public offering and related over-allotment option. As a result of the Closing, each private placement warrant entitles CP Sponsor to purchase one share of our Class A Common Stock at $ 11.50 per share. Concurrent with the execution of the Merger Agreement, Conyers Park entered into the subscription agreements with certain investors (collectively, the “Subscription Agreements”), pursuant to which, among other things, Conyers Park agreed to issue and sell in a private placement shares of Conyers Park Class A common stock for a purchase price of $ 10.00 per share. Certain of the Advantage Sponsors or their affiliates agreed to purchase an aggregate of 34,410,000 shares of Conyers Park Class A common stock. Conyers Park also entered into a stockholders agreement (the “Stockholders Agreement”) with CP Sponsor, Topco, and certain of the Advantage Sponsors and their affiliates (collectively, the “Stockholder Parties”). The Stockholders Agreement provides, among other things, that the Stockholder Parties agree to cast their votes such that the Company’s board of directors is constituted as set forth in the Stockholders Agreement and the Merger Agreement and will have certain rights to designate directors to the Company’s board of directors, in each case, on the terms and subject to the conditions therein. Additionally, Conyers Park entered into a Registration Rights Agreement with CP Sponsor, Topco, the Advantage Sponsors and their affiliates and the other parties thereto, pursuant to which the Company have agreed to register for resale certain shares of Class A common stock and other equity securities that are held by the parties thereto from time to time. Overlapping Directors Three members of the board of directors of Topco served as the members of the board of directors of a client of the Company. During the three months ended March 31, 2021, the Company recognized revenues of $ 1.0 million from this client. Accounts receivable from this client were less than $ 0.1 million as of March 31, 2021, and December 31, 2020, respectively. From June 25, 2019 until October 28, 2020, a member of the board of directors of Topco served as a member of the board of directors of another client of the Company. During the three months ended March 31, 2020, the Company recognized revenues of $ 4.8 million from this client. Accounts receivable from this client were zero as of March 31 , 2021 and December 31 , 2020 . 16 Table of Contents Until February 2, 2020, a member of the board of directors of Topco served as a member of the board of directors for a holding company of a client. During the three months ended March 31, 2020, the Company recognized revenues of $ 3.9 million, from this client. Accounts receivable from this client were zero as of March 31, 2021 and December 31, 2020. Investment in Unconsolidated Affiliates During the three months ended March 31, 2021 and 2020, the Company recognized revenues of $ 4.7 million and $ 4.8 millio n, respectively, from a parent company of an unconsolidated affiliate. Accounts receivable from this client we re $ 2.5 million and $ 2.2 million as of March 31, 2021 and December 31, 2020, respectively. 8. Income Taxes The Company’s effective tax rate was 145.6 % and ( 6.7 ) % during the three months ended March 31, 2021 and 2020, respectively. The effective tax rate is based upon the estimated income or loss before taxes for the year, by jurisdiction, and adjusted for estimated permanent tax adjustments. The fluctuation in the Company’s effective tax rate was primarily due to a difference in projected book income/loss used in the annual effective tax rate and unfavorable permanent book/tax differences related to officers’ compensation and fair value adjustments for warrant liabilities. Also, the company recorded a valuation allowance of $ 1.3 million as a discrete item to the quarter for its Mexico operations which resulted in a higher tax provision overall for the three months ended March 31, 2021. Without the $ 1.3 million valuation allowance, the Company’s effective tax rate would be 31.5 % during the three months ended March 31, 2021. 9. Segments The Company’s operations are organized into two reportable segments: sales and marketing. The operating segments reported below are the segments of the Company for which separate financial information is available and for which segment results are evaluated regularly by the chief operating decision maker ( i.e ., the Company’s Chief Executive Officer) in deciding how to allocate resources and in assessing performance. Through the Company’s sales segment, the Company serves as a strategic intermediary between consumer goods manufacturers and retailer partners and performs critical merchandizing services on behalf of both consumer goods manufacturers and retail partners. Through the Company’s marketing segment, the Company develops and executes marketing programs for manufacturers and retailers. These reportable segments are organized by the types of services provided, similar economic characteristics, and how the Company manages its business. The assets and liabilities of the Company are managed centrally and are reported internally in the same manner as the consolidated financial statements; therefore, no additional information is produced or included herein. The Company and its chief operating decision maker evaluate performance based on revenues and operating income. (in thousands) Sales Marketing Total Three Months Ended March 31, 2021 Revenues $ 534,324 $ 256,697 $ 791,021 Depreciation and amortization $ 42,564 $ 17,049 $ 59,613 Operating income $ 35,148 $ 2,440 $ 37,588 Three Months Ended March 31, 2020 Revenues $ 507,798 $ 371,598 $ 879,396 Depreciation and amortization $ 43,107 $ 17,102 $ 60,209 Operating income $ 24,194 $ 7,244 $ 31,438 17 Table of Contents 10. Commitments and Contingencies Litigation The Company is involved in various legal matters that arise in the ordinary course of its business. Some of these legal matters purport or may be determined to be class and/or representative actions, or seek substantial damages, or penalties. The Company has accrued amounts in connection with certain legal matters, including with respect to certain of the matters described below. There can be no assurance, however, that these accruals will be sufficient to cover such matters or other legal matters or that such matters or other legal matters will not materially or adversely affect the Company’s business, financial position, or results of operations. Employment Matters The Company has also been involved in various litigation, including purported class or representative actions with respect to matters arising under the California Labor Code and Private Attorneys General Act. The Company has retained outside counsel to represent it in these matters and is vigorously defending its interests. Legal Matters Related to Take 5 On April 1, 2018, the Company acquired certain assets and assumed liabilities of Take 5 Media Group (“Take 5”). In June 2019, as a result of a review of internal allegations related to inconsistency of data provided by Take 5 to its clients, the Company commenced an investigation into Take 5’s operations. In July 2019, as a result of the Company’s investigation, the Company determined that revenue during the fiscal year ended December 31, 2018 attributable to the Take 5 business had been recognized for services that were not performed on behalf of clients of Take 5 and that inaccurate reports were made to Take 5 clients about those services (referred to as the “Take 5 Matter”). As a result of these findings, in July 2019, the Company terminated all operations of Take 5, including the use of its associated trade names and the offering of its services to its clients and offered refunds to Take 5 clients of collected revenues attributable to Take 5 since the Company’s acquisition of Take 5. 18 Table of Contents USAO and FBI Voluntary Disclosure and Investigation Related to Take 5 The Company voluntarily disclosed to the United States Attorney’s Office and the Federal Bureau of Investigation certain misconduct occurring at Take 5, a line of business that the Company closed in July 2019. The Company intends to cooperate in this and any other governmental investigations that may arise in connection with the Take 5 Matter. At this time, the Company cannot predict the ultimate outcome of any investigation related to the Take 5 Matter and is unable to estimate the potential impact such an investigation may have on the Company. Arbitration Proceedings Related to Take 5 In August 2019, as a result of the Take 5 Matter, the Company provided a written indemnification claim notice to the sellers of Take 5 (the “Take 5 Sellers”) seeking monetary damages (including interest, fees and costs) based on allegations of breach of the asset purchase agreement (the “Take 5 APA”), as well as fraud. In September 2019, the Take 5 Sellers initiated arbitration proceedings against the Company, alleging breach of the Take 5 APA as a result of the Company’s decision to terminate the operations of the Take 5 business, and seeking monetary damages equal to all unpaid earn-out payments under the Take 5 APA (plus interest, fees and costs). ). In 2020, the Take 5 sellers amended their statement of claim to allege defamation, relating to statements the Company made to customers in connection with terminating the operations of the Take 5 business, and seeking monetary damages for the alleged injury to their reputation. The Company filed its response to the Take 5 Sellers’ claims, and asserted indemnification, fraud and other claims against the Take 5 Sellers as counterclaims and cross-claims in the arbitration proceedings. The Company is currently unable to estimate the potential impact related to these arbitration proceedings, but the Company has retained outside counsel to represent the Company in these matters and intends to vigorously pursue the Company’s interests. Other Legal Matters Related to Take 5 The Take 5 Matter may result in additional litigation against the Company, including lawsuits from clients, or governmental investigations, which may expose the Company to potential liability in excess of the amounts being offered by the Company as refunds to Take 5 clients. The Company is currently unable to determine the amount of any potential liability, costs or expenses (above the amounts already being offered as refunds) that may result from any lawsuits or investigations associated with the Take 5 Matter or determine whether any such issues will have any future material adverse effect on the Company’s financial position, liquidity, or results of operations. Although the Company has insurance covering certain liabilities, the Company cannot assure that the insurance will be sufficient to cover any potential liability or expenses associated with the Take 5 Matter. Surety Bonds In the ordinary course of business, the Company is required to provide financial commitments in the form of surety bonds to third parties as a guarantee of its performance on and its compliance with certain obligations, including workers’ compensation insurance. If the Company were to fail to perform or comply with these obligations, any draws upon surety bonds issued on its behalf would then trigger the Company’s payment obligation to the surety bond issuer. The Company has outstanding surety bonds issued for its benefit of $ 7.5 million and $ 0.5 million as of March 31, 2021 and December 31, 2020, respectively. 11. Redeemable Noncontrolling Interest The Company is party to a put and call option agreement with respect to the common securities that represent the remaining noncontrolling interest from a majority-owned subsidiary, which was established through a majority-owned international joint venture during the three months ended March 31, 2021. The put and call option agreement representing 20 % of the total outstanding noncontrolling equity interest of that subsidiary, may be exercised at the discretion of the noncontrolling interest holder by providing written notice to the Company beginning in 2026 and expiring in 2028 . The redemption value of the put and call option agreement is based on a multiple of the majority-owned subsidiary earnings before interest, taxes, depreciation and amortization subject to certain adjustments. The noncontrolling interest is subject to a put option that is outside of the Company’s control, and is presented as redeemable non-controlling interest in the temporary equity section of the Condensed Consolidated Balance Sheets. The Company recorded its redeemable noncontrolling interest at fair value on the 19 Table of Contents date of the related business combination transaction and recognizes changes in the redemption value at the end of each reporting period. The carrying value of the redeemable noncontrolling interest was $ 1.9 million as of March 31, 2021. (in thousands) 2021 Beginning Balance $ — Fair value at acquisition 1,804 Net income attributable to redeemable noncontrolling interests 38 Foreign currency translation adjustment 31 Ending Balance $ 1,873 1 2 . Stock-based compensation The Company has issued nonqualified stock options, restricted stock units, and performance share units under the Advantage Solutions Inc. 2020 Incentive Award Plan (the “Plan”). As of March 31, 2021, the number of nonqualified stock options outstanding was immaterial. Our restricted stock units and performance share units, as described below, are expensed and reported as non-vested shares. We recognized share-based compensation expense of $ 8.7 million in the three months ended March 31, 2021. Performance Stock Units Performance restricted stock units (“PSUs”) are subject to the achievement of certain performance conditions based on the Company’s Adjusted EBITDA and revenues targets in the respective measurement period and the recipient’s continued service to the Company. The PSUs are scheduled to vest over a three-year period from the date of grant and may vest from 0 % to 150 % of the number of shares set forth in the table below. During the three months ended March 31, 2021, the following activity involving PSUs occurred under the Plan: Number of PSUs Weighted Average Grant Date Fair Value Outstanding at January 1, 2021 — $ — Granted 2,594,566 $ 13.21 Vested 24,784 $ 13.33 Forfeited — $ — Outstanding at March 31, 2021 2,569,782 $ 13.21 Restricted Stock Units Restricted stock units (“RSUs”) are subject to the recipient’s continued service to the Company. The RSUs are generally scheduled to vest over three years (though RSUs associated with 125,000 shares of Class A common stock are scheduled to vest over two years ) and are subject to the provisions of the agreement under the Plan. 20 Table of Contents During the three months ended March 31, 2021, the following activity involving RSUs occurred under the Plan: Number of RSUs Weighted Average Grant Date Fair Value Outstanding at January 1, 2021 — $ — Granted 1,745,087 $ 13.19 Vested — $ — Forfeited 23,810 $ 13.33 Outstanding at March 31, 2021 1,721,277 $ 13.18 As of March 31, 2021, the total remaining unrecognized compensation cost related to non-vested PSUs, and RSUs amounted to $ 29.1 million, $ 21.1 million, respectively, which will be amortized over the weighted-average remaining requisite service periods of 2.8 years, and 2.7 years, respectively. Joint Venture – Preferred Dividends The Company also has cumulative preferred dividends, undeclared and unpaid associated with its joint venture. These preferred shares do not represent a participating security, but preference dividends would be considered in determining income available to common stockholders. The amount of the preference dividends was immaterial to all periods presented. 1 3 . Earnings Per Share The Company calculates earnings per share (“EPS”) using a dual presentation of basic and diluted earnings per share. Basic earnings per share is calculated by dividing net income (loss) attributable to stockholders’ of the Company by the weighted-average shares of common stock outstanding without the consideration for potential dilutive shares of common stock. Diluted earnings per share represents basic earnings per share adjusted to include the potentially dilutive effect of outstanding share option awards, non-vested share awards, common stock warrants, and Performance Shares (as defined below). Diluted earnings per share is computed by dividing the net income by the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method and if-converted method, as applicable. During periods of net loss, diluted loss per share is equal to basic loss per share because the antidilutive effect of potential common shares is disregarded. As a result of the Transactions, the Company has retrospectively adjusted the weighted-average number of common shares outstanding prior to October 28, 2020 by multiplying them by the exchange ratio used to determine the number of common shares into which they converted. There were no adjustments required to be made to weighted-average common shares outstanding for purposes of computing basic and diluted earnings per share and there were no securities outstanding in any period presented, which were excluded from the computation of earnings per share other than antidilutive stock options, restricted stock awards, restricted stock units, and PSUs. For the three months ended March 31 , 2021 , there were 0.2 million stock options, outstanding that were antidilutive, as determined under the treasury stock method, and excluded from the computation of diluted earnings. The numb er of RSUs and PSUs that were antidilutive, as determined under the treasury stock method, were 1.7 million and 2.6 million for the three months ended March 31 , 2021 , respectively. During periods of net loss, diluted loss per share is equal to basic loss per share because the antidilutive effect of potential common shares is disregarded. 21 Table of Contents The following is a reconciliation of basic and diluted net loss per common share: (in thousands, except share and earnings per share data) March 31, 2021 March 31, 2020 Basic and diluted: Net loss attributable to stockholders of Advantage Solutions Inc. $ ( 116 ) $ ( 21,708 ) Weighted-average number of common shares 317,601,345 203,750,000 Basic and diluted net loss per common share $ ( 0.00 ) $ ( 0.11 ) As part of the Transactions, 5,000,000 shares of Class A common stock were issued to Topco at Closing (the “Performance Shares ”), which were subject to vesting upon satisfaction of a market performance condition for any period of 20 trading days out of 30 consecutive trading days during the five-year period after the Closing. Topco was not able to vote or sell such shares until vesting. The Performance Shares vested on January 15, 2021, when the closing price for the Class A common stock exceeded $ 12.00 per share for 20 trading days out of 30 consecutive trading days and were included in the March 31, 2021 earnings per share calculation. The Company had 18,583,333 warrants, including 7,333,333 private placement warrants held by the CP Sponsor, to purchase Class A common stock at $ 11.50 per share at the Closing, and no such warrants were exercised during the three months ended March 31, 2021 and 2020, respectively. 22 Table of Contents