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Item 1. Financial Statements

2023-11-09 compared with 2023-08-10 · 156 added, 149 removed, 521 unchanged (37% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

July 2, 2023 and January 1, 2023

October 1, 2023 and January 1, 2023

(In thousands)

October 1, 2023

As of January 1, 2023

32 unchanged sentences

1,000,000,000 shares authorized;

81,141,417 and 80,882,334 shares issued and outstanding as of July 2, 2023 and January 1, 2023, respectively

81,141,417 and 80,882,334 shares issued and outstanding as of October 1, 2023 and January 1, 2023, respectively

Shares of Class V Common Stock, $ 0.0001 par value;

61,249,000 shares authorized;

59,349,000 shares issued and outstanding as of July 2, 2023 and January 1, 2023

59,349,000 shares issued and outstanding as of October 1, 2023 and January 1, 2023

Additional paid-in capital 938,898 926,919

8 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the thirteen and twenty-six weeks ended July 2, 2023 and July 3, 2022

(In thousands, except share information)

(in thousands) Thirteen weeks ended July 2, 2023 Thirteen weeks ended July 3, 2022 Twenty-six weeks ended July 2, 2023 Twenty-six weeks ended July 3, 2022

For the thirteen and thirty-nine weeks ended October 1, 2023 and October 2, 2022

(In thousands, except share information) (Unaudited)

(in thousands) Thirteen weeks ended October 1, 2023 Thirteen weeks ended October 2, 2022 Thirty-nine weeks ended October 1, 2023 Thirty-nine weeks ended October 2, 2022

Net sales $ 371,852 $ 362,818 $ 1,086,138 $ 1,053,732

7 unchanged sentences

Income (loss) from operations 5,277 15,005 5,840 ( 2,190 )

Other (expense) income

Interest expense ( 15,019 ) ( 10,727 ) ( 29,397 ) ( 19,830 )

Other income (expense)

Gain on remeasurement of warrant liability 2,808 5,760 576 7,704

Other (expense) income, net ( 11,939 ) ( 5,612 ) ( 26,934 ) ( 12,251 )

Loss before taxes ( 9,278 ) ( 320 ) ( 26,371 ) ( 29,446 )

Interest expense ( 15,537 ) ( 11,648 ) ( 44,934 ) ( 31,478 )

Other income, net 392 205 2,279 80

Gain (loss) on remeasurement of warrant liability 15,984 ( 3,672 ) 16,560 4,032

Other income (expense), net 839 ( 15,115 ) ( 26,095 ) ( 27,366 )

Income (loss) before taxes 6,116 ( 110 ) ( 20,255 ) ( 29,556 )

Income tax benefit ( 10,099 ) ( 1,595 ) ( 13,435 ) ( 1,688 )

Net (loss) income ( 8,553 ) 2,545 ( 23,035 ) ( 29,353 )

Net loss attributable to noncontrolling interest 4,429 634 9,784 14,962

Net (loss) income attributable to controlling interest $ ( 4,124 ) $ 3,179 $ ( 13,251 ) $ ( 14,391 )

Net income (loss) 16,215 1,485 ( 6,820 ) ( 27,868 )

Net (income) loss attributable to noncontrolling interest ( 222 ) ( 2,373 ) 9,562 12,589

Net income (loss) attributable to controlling interest $ 15,993 $ ( 888 ) $ 2,742 $ ( 15,279 )

Earnings (loss) per Class A Common stock:

4 unchanged sentences

Diluted 83,444,275 80,812,835 83,567,756 79,852,137

Net (loss) income $ ( 8,553 ) $ 2,545 $ ( 23,035 ) $ ( 29,353 )

Net income (loss) $ 16,215 $ 1,485 $ ( 6,820 ) $ ( 27,868 )

Other comprehensive income:

1 unchanged sentence

Comprehensive income (loss) 20,262 21,140 ( 3,526 ) 22,607

Net comprehensive loss (income) attributable to noncontrolling interest 383 ( 647 ) 10,105 1,715

Net comprehensive income (loss) attributable to controlling interest $ 1,402 $ 4,909 $ ( 13,683 ) $ 3,182

Net comprehensive (income) loss attributable to noncontrolling interest ( 1,932 ) ( 10,696 ) 8,173 ( 8,981 )

Net comprehensive income attributable to controlling interest $ 18,330 $ 10,444 $ 4,647 $ 13,626

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF EQUITY

For the thirteen and twenty-six weeks ended July 2, 2023 and July 3, 2022

For the thirteen and thirty-nine weeks ended October 1, 2023 and October 2, 2022

(In thousands, except share data) (Unaudited)

4 unchanged sentences

Share-based compensation 1,062,817 — — 5,779 — — 5,779 — 5,779

Issuance of common stock in connection with private placement sale 2,105,373 — — 28,000 — — 28,000 — 28,000

Tax impact arising from share issuance — — ( 561 ) — — ( 561 ) — ( 561 )

1 unchanged sentence

Other comprehensive income — — — — 17,573 17,573 13,247 30,820

Balance at April 3, 2022 78,597,175 8 59,349,000 6 909,144 ( 254,168 ) 19,558 674,548 752,606 1,427,154

Cash dividends declared ($ 0.108 per share of Class A Common Stock)

— — — ( 8,604 ) — ( 8,604 ) — ( 8,604 )

Distribution to noncontrolling interest — — — — — — ( 6,410 ) ( 6,410 )

Balance at July 3, 2022 80,812,835 8 59,349,000 6 939,575 ( 259,593 ) 21,288 701,284 746,843 1,448,127

Stock-based compensation — — 1,800 — — 1,800 — 1,800

Issuance of common stock in connection with private placement sale 2,105,373 28,000 28,000 28,000

Tax impact arising from share issuance — — ( 1,969 ) — — ( 1,969 ) — ( 1,969 )

Net income — — — 3,179 — 3,179 ( 634 ) 2,545

Net (loss) income — — — ( 888 ) — ( 888 ) 2,373 1,485

Other comprehensive income — — — — 11,332 11,332 8,323 19,655

2 unchanged sentences

Distribution to noncontrolling interest — — — — — — ( 3,205 ) ( 3,205 )

Balance at July 3, 2022 80,812,835 $ 8 59,349,000 $ 6 $ 939,575 $ ( 259,593 ) $ 21,288 $ 701,284 $ 746,843 $ 1,448,127

Balance at October 2, 2022 80,812,835 $ 8 59,349,000 $ 6 $ 941,375 $ ( 264,845 ) $ 32,620 $ 709,164 $ 754,334 $ 1,463,498

Balance at January 1, 2023 80,882,334 $ 8 59,349,000 $ 6 $ 926,919 $ ( 254,564 ) $ 30,777 $ 703,146 $ 748,538 $ 1,451,684

2 unchanged sentences

Net loss — — — ( 13,251 ) — ( 13,251 ) ( 9,784 ) ( 23,035 )

Cash dividends declared — — — ( 56 ) — ( 56 ) — ( 56 )

Cash dividends declared ($ 0.114 per share of Class A Common Stock)

— — — ( 9,296 ) — ( 9,296 ) — ( 9,296 )

Other comprehensive loss — — — — ( 432 ) ( 432 ) ( 321 ) ( 753 )

Balance at April 2, 2023 81,012,868 8 59,349,000 6 930,964 ( 263,747 ) 24,819 692,050 738,816 1,430,866

Distribution to noncontrolling interest — — — — — — ( 6,766 ) ( 6,766 )

Balance at July 2, 2023 81,141,417 8 59,349,000 6 935,269 ( 277,111 ) 30,345 688,517 731,667 1,420,184

Stock-based compensation — — 3,629 — — 3,629 — 3,629

Net loss — — — ( 4,124 ) — ( 4,124 ) ( 4,429 ) ( 8,553 )

Net income (loss) — — — 15,993 — 15,993 222 16,215

Other comprehensive income — — — — 2,337 2,337 1,710 4,047

2 unchanged sentences

Distribution to noncontrolling interest — — — — — — ( 3,383 ) ( 3,383 )

Balance at July 2, 2023 81,141,417 $ 8 59,349,000 $ 6 $ 935,269 $ ( 277,111 ) $ 30,345 $ 688,517 $ 731,667 $ 1,420,184

Balance at October 1, 2023 81,141,417 $ 8 59,349,000 $ 6 $ 938,898 $ ( 265,743 ) $ 32,682 $ 705,851 $ 730,216 $ 1,436,067

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the twenty-six weeks ended July 2, 2023 and July 3, 2022

For the thirty-nine weeks ended October 1, 2023 and October 2, 2022

(In thousands)

Twenty-six weeks ended July 2, 2023 Twenty-six weeks ended July 3, 2022

Thirty-nine weeks ended October 1, 2023

Thirty-nine weeks ended October 2, 2022

Cash flows from operating activities

13 unchanged sentences

Accounts payable and accrued expenses and other 6,016 21,358

Net cash used in operating activities ( 4,315 ) ( 26,268 )

Net cash provided by operating activities 49,130 8,071

Cash flows from investing activities

16 unchanged sentences

Distribution to noncontrolling interest ( 10,149 ) ( 6,410 )

Net cash provided by financing activities 35,825 51,754

Net increase (decrease) in cash and cash equivalents 727 ( 21,765 )

Net cash (used in) provided by financing activities ( 24,461 ) 54,776

Net (decrease) increase in cash and cash equivalents ( 12,836 ) 9,907

Cash and cash equivalents at beginning of period 72,930 41,898

47 unchanged sentences

ASC 740-10 prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns.

The benefit of tax positions taken or expected to be taken in the Company’s income tax returns is recognized in the financial statements if such positions are more likely than not of being sustained upon examination by taxing authorities.

The benefit of tax positions taken or expected to be taken in the Company’s income tax returns is recognized in the financial statements if such positions are more likely than not capable of being sustained upon examination by taxing authorities.

Differences between tax positions taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to the interpretation are referred to as "unrecognized benefits".

2 unchanged sentences

The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and penalties as selling, distribution, and administrative expenses.

As of July 2, 2023 and January 1, 2023, no liability for unrecognized tax benefits was required to be reported.

As of October 1, 2023 and January 1, 2023, no liability for unrecognized tax benefits was required to be reported.

The Company does not expect any significant changes in its unrecognized tax benefits in the next fiscal year.

Goodwill and Other Identifiable Intangible Assets – The Company allocates the cost of acquired companies to the identifiable tangible and intangible assets acquired and liabilities assumed, with the remaining amount classified as goodwill.

The identification and valuation of these intangible assets and the determination of the estimated useful lives at the time of acquisition, as well as the completion of impairment tests, require significant management judgments and estimates.

The identification and valuation of these intangible assets and the determination of their estimated useful lives at the time of acquisition, as well as the completion of impairment tests, require significant management judgments and estimates.

These estimates are made based on, among other factors, review of projected future operating results and business plans, economic projections, anticipated highest and best use of future cash flows and the cost of capital.

13 unchanged sentences

For the latest qualitative analysis performed, which took place on the first day of the fourth quarter of 2022, the Company took into consideration all the events and circumstances listed in Topic 350 in addition to other entity-specific factors that had taken place.

The Company determined that there was no significant impact that affected the fair value of the reporting unit through July 2, 2023.

The Company determined that there was no significant impact that affected the fair value of the reporting unit through October 1, 2023.

Therefore, the Company determined that it was not necessary to perform a quantitative goodwill impairment test for the reporting unit.

Fair Value of Financial Instruments – Financial instruments held by the Company include cash and cash equivalents, accounts receivable, hedging instruments, purchase commitments on commodities, accounts payable and debt.

Fair Value of Financial Instruments – Financial instruments held by the Company include cash and cash equivalents, accounts receivable, hedging instruments, warrants, purchase commitments on commodities, accounts payable and debt.

The carrying value of all cash and cash equivalents, accounts receivable and accounts payable approximate their fair value due to their short-term nature.

9 unchanged sentences

Shipping and/or handling costs that occur before the customer obtains control of the goods are deemed to be fulfillment activities and are accounted for as fulfillment costs.

Applicable shipping and handling are included in customer billing and are recorded as revenue as the products’ control is transferred to customers.

Applicable shipping and handling are included in customer billing and are recorded as revenue as control of the products’ is transferred to customers.

The Company assesses the goods promised in customer purchase orders and identifies a performance obligation for each promise to transfer a good that is distinct.

3 unchanged sentences

The recognition of these costs therefore requires management judgment regarding the volume of promotional offers that will be redeemed by either the retail trade customer or consumer.

These estimates are made using various techniques including historical data on performance of similar promotional programs.

The Company has reserves in place of $ 32.0 million as of July 2, 2023, which include adjustments taken by customers of $ 16.6 million that are awaiting final processing, and reserves of $ 46.3 million as of January 1, 2023, which include adjustments taken by customers of $ 32.8 million that are awaiting final processing.

These estimates are made using various techniques including using historical data on performance of similar promotional programs.

The Company has reserves in place of $ 21.9 million as of October 1, 2023, which include adjustments taken by customers of $ 12.4 million that are awaiting final processing, and reserves of $ 46.3 million as of January 1, 2023, which include adjustments taken by customers of $ 32.8 million that are awaiting final processing.

Differences between estimated expense and actual redemptions are recognized as a change in management estimate as actual redemptions are incurred.

7 unchanged sentences

Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill.

Distributor Buyouts - During the first and second fiscal quarters of 2022, the Company bought out and terminated the contracts of multiple third-party distributors who had previously been providing services to the Company.

These transactions were accounted for as contract terminations and resulted in expense of $ 23.0 million for twenty-six weeks ended July 3, 2022, and are included within selling and distribution expense on the Consolidated Statement of Operations and Comprehensive Income (Loss).

Distributor Buyouts - During 2022, the Company bought out and terminated the contracts of multiple third-party distributors who had previously been providing services to the Company.

These transactions were accounted for as contract terminations and resulted in expense of $ 23.0 million for thirty-nine weeks ended October 2, 2022, and are included within selling and distribution expense on the Consolidated Statement of Operations and Comprehensive Income (Loss).

Use of Estimates – Management uses estimates and assumptions in preparing the consolidated financial statements in accordance with U.S.

4 unchanged sentences

(in thousands) As of

October 1, 2023

As of January 1, 2023

6 unchanged sentences

(in thousands) As of

October 1, 2023

As of January 1, 2023

8 unchanged sentences

Property, plant and equipment, net $ 329,846 $ 345,198

Depreciation expense was $ 10.6 million and $ 12.7 million for the thirteen weeks ended July 2, 2023 and July 3, 2022, respectively, and $ 20.9 million and $ 25.1 million for the twenty-six weeks ended July 2, 2023 and July 3, 2022, respectively.

Depreciation expense is classified in cost of goods sold, selling, distribution, and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss).

During the thirteen weeks ended July 2, 2023, the Company made the decision to permanently cease operations at the Company’s manufacturing facility located in Birmingham, Alabama (the “Birmingham Facility”) effective in June 2023 (the “Manufacturing Closure”).

Golden Flake ® and other products that were produced at the Birmingham Facility have continued to be produced at other manufacturing facilities.

The Manufacturing Closure reduced the Company's workforce by approximately 130 employees and the Company maintains its distribution center in Birmingham.

The Company has recorded expense of $ 8.9 million in connection with the Manufacturing Closure, which includes $ 1.3 million in severance and related costs and $ 7.6 million of asset impairments related to fixed assets.

The severance and related expenses are recorded in the cost of goods sold line on the Consolidated Statement of Operations and Comprehensive Income (Loss) for

the thirteen weeks ended July 2, 2023.

Depreciation expense was $ 10.0 million and $ 12.0 million for the thirteen weeks ended October 1, 2023 and October 2, 2022, respectively, and $ 30.9 million and $ 37.1 million for the thirty-nine weeks ended October 1, 2023 and October 2, 2022, respectively.

Depreciation expense is classified in Cost of goods sold and Selling, distribution, and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss).

The Company recorded expenses of $ 8.9 million in connection with the closure of the Company's manufacturing facility in Birmingham, Alabama (the "Manufacturing Closure"), which included $ 1.3 million in severance and related costs and $ 7.6 million of asset impairments related to fixed assets.

The severance and related expenses are recorded in the cost of goods sold line on the Consolidated Statement of Operations and Comprehensive Income (Loss) for the thirty-nine weeks ended October 1, 2023.

The fixed asset impairments are recorded in the administrative expenses line on the Consolidated Statement of Operations and Comprehensive Income (Loss).

In addition, during the twenty-six weeks ended July 2, 2023, the Company recognized expense of $ 1.9 million related to the impairment of property, plant, and equipment unrelated to the Manufacturing Closure.

In addition, during the thirty-nine weeks ended October 1, 2023, the Company recognized expense of $ 1.9 million related to the impairment of property, plant, and equipment unrelated to the Manufacturing Closure.

During the thirteen weeks ended October 1, 2023, the Company completed the sale of the Company's manufacturing facility in Bluffton, Indiana, which resulted in a loss on sale of the assets of $ 13.4 million.

Additionally, the Company entered into a supply agreement with the buyer pursuant to which the buyer is obligated to co-manufacture certain products at below market rates for up to one year .

The Company recorded a tolling asset of $ 0.6 million for the difference between the rate charged and the market rate for these services.

If the buyer defaults on its obligations to manufacture any of the committed products, a financial penalty will be assessed based on the contractual terms required in the supply agreement.

In a separate transaction, the Company completed the sale of land in Hanover, Pennsylvania to a separate third-party for a gain of $ 4.0 million.

GOODWILL AND INTANGIBLE ASSETS, NET

There were no changes to goodwill during the twenty-six weeks ended July 2, 2023.

There were no changes to goodwill during the thirty-nine weeks ended October 1, 2023.

Intangible assets, net, consisted of the following:

(in thousands) As of

October 1, 2023

As of January 1, 2023

11 unchanged sentences

During the first fiscal quarter of 2022, the Company shifted the relationship with that manufacturer and converted that shelf space to Company-branded products.

As a result, the Company recorded impairment expense of $ 2.0 million and the amortizable master distribution rights decreased by $ 2.2 million during the twenty-six weeks ended July 3, 2022.

There were no significant changes to intangible assets during the twenty-six weeks ended July 2, 2023, other than those which arise from the normal course of business of buying and selling of Company-owned route assets and amortization.

Amortization of the distributor/customer relationships, technology, and trade names amounted to $ 9.4 million and $ 9.4 million for the thirteen weeks ended July 2, 2023 and July 3, 2022, respectively, and $ 18.8 million and $ 18.8 million for the twenty-six weeks ended July 2, 2023 and July 3, 2022, respectively.

As a result, the Company recorded impairment expense of $ 2.0 million and the amortizable master distribution rights decreased by $ 2.2 million during the thirty-nine weeks ended October 2, 2022.

There were no significant changes to intangible assets during the thirty-nine weeks ended October 1, 2023, other than those which arise from the normal course of business of buying and selling of Company-owned route assets and amortization.

Amortization of the distributor/customer relationships, technology, and trade names amounted to $ 9.4 million for the thirteen weeks ended October 1, 2023 and October 2, 2022, and $ 28.3 million for the thirty-nine weeks ended October 1, 2023 and October 2, 2022.

The expense related to the amortization of intangibles is classified in administrative expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss).

1 unchanged sentence

The Company has undertaken a program in recent years to sell Company-managed DSD distribution routes to independent operators (“IOs”).

Contracts are executed between the Company and the IOs for the sale of the product distribution route, including a note in favor of the Company, in certain cases.

Contracts are executed between the Company and the IOs for the sale of the product distribution routes, including a note in favor of the Company, in certain cases.

The notes bear interest at rates ranging from 0.00 % to 10.40 % with terms ranging, generally, from one to ten years .

The notes receivable balances due from IOs at July 2, 2023 and January 1, 2023 totaled $ 19.6 million and $ 22.0 million, respectively, and are collateralized by the routes for which the loans are made.

During the twenty-six weeks ended July 2, 2023, the loss recorded by the Company on note receivables for which the Company reclaimed the collateral due to credit losses was less than $ 0.1 million.

The Company has a corresponding notes payable liability, related to the IOs notes receivables, of $ 19.0 million and $ 21.1 million at July 2, 2023 and January 1, 2023, respectively.

The notes receivable balances due from IOs at October 1, 2023 and January 1, 2023 totaled $ 18.7 million and $ 22.0 million, respectively, and are collateralized by the routes for which the loans are made.

During the thirty-nine weeks ended October 1, 2023, the loss recorded by the Company on note receivables for which the Company reclaimed the collateral due to credit losses was less than $ 0.1 million.

The Company has a corresponding notes payable liability, related to the IOs notes receivables, of $ 16.9 million and $ 21.1 million as of October 1, 2023 and January 1, 2023, respectively.

The related notes payable liability is discussed in further detail within Note 7.

"Long-Term Debt."

Other notes receivable totaled $ 0.1 million as of both July 2, 2023 and January 1, 2023.

Other notes receivable totaled $ 0.1 million as of both October 1, 2023 and January 1, 2023.

ACCRUED EXPENSES AND OTHER

Current accrued expenses and other consisted of the following:

(in thousands) As of July 2, 2023 As of January 1, 2023

(in thousands) As of October 1, 2023 As of January 1, 2023

Accrued compensation and benefits $ 18,300 $ 38,974

8 unchanged sentences

Non-current accrued expenses and other consisted of the following:

(in thousands) As of July 2, 2023 As of January 1, 2023

(in thousands) As of October 1, 2023 As of January 1, 2023

Operating right of use liability $ 44,349 $ 35,331

1 unchanged sentence

Supplemental retirement and salary continuation plans 6,666 6,512

Long term hedge 1,538 —

Total accrued expenses and other $ 75,551 $ 67,269

2 unchanged sentences

On November 21, 2017, UBH entered into an asset based revolving credit facility (as amended, the "ABL facility"), pursuant to the terms of that certain First Lien Term Loan Credit Agreement, dated November 21, 2017 (the "Credit Agreement").

On September 22, 2022, the ABL facility was amended to further increase the credit limit up to $ 175.0 million and replaced the interest rate benchmark from LIBOR to SOFR.

On September 22, 2022, the ABL facility was amended to further increase the credit limit to $ 175.0 million and replaced the interest rate benchmark from London Interbank Offered Rate (“LIBOR”) to Term SOFR Screen Rate (“SOFR”).

Availability under the ABL facility is based on a monthly accounts receivable and inventory borrowing base certification, which is net of outstanding letters of credit.

As of July 2, 2023 and January 1, 2023, $ 96.6 million and $ 163.0 million, respectively, was available for borrowing, net of letters of credit.

The ABL facility is also subject to unused line fees ( 0.5 % at July 2, 2023) and other fees and expenses and was set to mature on August 22, 2024 as of July 2, 2023.

On July 20, 2023 the ABL facility was further amended to increase the credit limit to $ 225.0 million and extend the maturity through the earlier of July 20, 2028, or 90 days prior to the maturity of the Term Loan B, as described further with Note 7.

"Long-Term" Debt, which would be October 22, 2027.

See Note 17." Subsequent Events" for additional details regarding this amendment.

Standby letters of credit in the amount of $ 14.3 million and $ 12.0 million have been issued as of July 2, 2023 and January 1, 2023, respectively.

As of October 1, 2023 and January 1, 2023, $ 149.3 million and $ 163.0 million, respectively, was available for borrowing, net of letters of credit.

The ABL facility is also subject to unused line fees ( 0.5 % at October 1, 2023) and other fees and expenses.

On July 20, 2023, the ABL facility was further amended to increase the credit limit to $ 225.0 million and extend the maturity through the earlier of July 20, 2028, or 91 days prior to the maturity of the Term Loan B (as defined below).

The Company incurred fees of $ 0.7 million in connection with the amendment to the ABL facility.

Standby letters of credit in the amount of $ 12.2 million and $ 12.0 million have been issued as of October 1, 2023 and January 1, 2023, respectively.

The standby letters of credit are primarily issued for insurance purposes.

1 unchanged sentence

(the "Bridge Credit Agreement").

The proceeds of the Bridge Credit Agreement were used to fund the Company’s acquisition of Truco and the IP Purchase (each as defined below) from OTB Acquisition, LLC, in which the Company withdrew $ 490.0 million to finance the acquisition of Truco Holdco Inc.

The Company used $ 490.0 million from the proceeds of the Bridge Credit Agreement to finance the acquisition of Truco Holdco Inc.

("Truco" and such acquisition, the "Truco Acquisition") and certain intellectual property from OTB Acquisition, LLC (the "IP Purchase").

4 unchanged sentences

Pursuant to the terms of Amendment No.

2, the Company raised $ 720 million in aggregate principal of Term Loan B ("Term Loan B") which bore interest at LIBOR plus 3.00 %, and extended the maturity of the Bridge Credit Agreement to January 20, 2028.

2, the Company raised $ 720 million in aggregate principal of Term Loan B ("Term Loan B") which then bore interest at LIBOR plus 3.00 %, and extended the maturity of the Bridge Credit Agreement to January 20, 2028.

The proceeds were used, together with cash on hand and proceeds from the Company's exercised warrants, to redeem the outstanding principal amount of Term Loan B and Bridge Credit Agreement of $ 410 million and $ 358 million, respectively.

6 unchanged sentences

The Company incurred additional debt issuance costs and original issuance discounts of $ 0.7 million related to the incremental funding.

On October 12, 2022, the Company, through its subsidiaries UQF, Kennedy and Condor Snack Foods, LLC (together with UQF and Kennedy, the “Real Estate Financing Borrowers”), entered into a loan agreement (the “Real Estate Term Loan”) with City National Bank which was secured by a majority of the Real Estate Financing Borrowers’ real estate assets.

The Real Estate Term Loan holds a principal balance of $ 88.1 million, with net proceeds of approximately $ 85.0 million after transaction fees and expenses.

The Real Estate Term Loan has a ten-year maturity and amortizes approximately $ 3.5 million in principal annually, with a balloon payment due at maturity.

On October 12, 2022, the Company, through its subsidiaries UQF, Kennedy Endeavors, LLC (“Kennedy”) and Condor Snack Foods, LLC (together with UQF and Kennedy, the “Real Estate Financing Borrowers”), entered into a loan agreement (the “Real Estate Term Loan”) with City National Bank which was secured by a majority of the Real Estate Financing Borrowers’ real estate assets.

The Real Estate Term Loan initially held a principal balance of $ 88.1 million, with net proceeds of approximately $ 85.0 million after transaction fees and expenses.

The Company used a portion of the proceeds from the Real Estate Term Loan to pay off the ABL facility.

2 unchanged sentences

“Derivative Financial Instruments and Purchase Commitments”.

The Term Loan B and the ABL facility are collateralized by substantially all of the assets and liabilities of UBH and its subsidiaries, excluding the real estate assets secured by the Real Estate Term Loan and including equity interests in certain of UBH’s subsidiaries.

In September 2023, the Company made an additional $ 4.4 million paydown of the Real Estate Term Loan using net proceeds from the sale of land to a third-party, as discussed within Note 3.

“Property, Plant, and Equipment, Net”, as well as cash on hand.

Following such paydown, the loan will amortize approximately $ 3.3 million in principal annually through maturity, subject to any additional advanced paydowns.

The Term Loan B and the ABL facility are collateralized by substantially all of the assets and liabilities of UBH and its subsidiaries, excluding the real estate assets, which secure the Real Estate Term Loan and including equity interests in certain of UBH’s subsidiaries.

The credit agreements contain certain affirmative and negative covenants as to operations and the financial condition of UBH and its subsidiaries.

UBH and its subsidiaries were in compliance with its financial covenants as of July 2, 2023.

UBH and its subsidiaries were in compliance with its financial covenants as of October 1, 2023.

Debt (in thousands)

Issue Date Principal Balance Maturity Date July 2, 2023 January 1, 2023

Issue Date Principal Balance Maturity Date October 1, 2023 January 1, 2023

Term loan B (1)

June-21 $ 795,000 January-28 $ 773,323 $ 779,286

Real Estate Loan October-22 88,140 October-32 86,377 88,140

Real Estate Term Loan October-22 88,140 October-32 81,019 88,140

Equipment loans (2)

9 unchanged sentences

4"), which replaced the interest rate benchmark from LIBOR to SOFR.

The weighted average interest rate on the Term Loan B debt, without consideration of the hedge, was 8.10 % for the thirteen weeks ended July 2, 2023.

(2) In July 2021, the Company entered into two separate finance lease obligations with Banc of America Leasing & Capital, LLC, which have been treated as secured borrowing.

The Company made a series of draws upon these agreements throughout fiscal year 2021 totaling $ 26.5 million and has drawn a total of $ 32.4 million in fiscal year 2022 and $ 3.2 million in fiscal year 2023.

The weighted average interest rate on the Term Loan B debt, without consideration of the hedge, was 8.36 % for the thirteen weeks ended October 1, 2023.

(2) The Company has finance lease obligations with Banc of America Leasing & Capital, LLC, which are treated as secured borrowing.

The Company made a series of draws upon these agreements totaling $ 4.3 million in fiscal year 2023.

These draws bear interest ranging from 3.26 % through 7.25 % and have varying maturities up through 2028.

(3) The facility bore interest at an annual rate based on LIBOR, or SOFR plus a 0.10 % credit spread adjustment after the amendment on September 22, 2022, plus an applicable margin of 1.75 % (ranging from 1.50 % to 2.00 % based on availability) or the prime rate plus an applicable margin of 0.75 % (ranging from 0.50 % to 1.00 %).

The Company generally utilizes the prime rate for amounts that the Company expects to pay down within 30 days.

The interest rate on the facility as of July 2, 2023

would have been 8.75 %, under the prime rate.

The Company elects to use the LIBOR, prior to the amendment on September 22, 2022 which changed the reference rate to SOFR as described above, for balances that are expected to be carried longer than 30 days.

The interest rate on the ABL facility as of July 2, 2023 was 6.75 %.

The Company generally utilizes the prime

rate for amounts that the Company expects to pay down within 30 days.

The interest rate on the facility as of October 1, 2023 would have been 9.25 %, under the prime rate.

The Company elected to use the LIBOR, prior to the amendment on September 22, 2022 which changed the reference rate to SOFR as described above, for balances that were expected to be carried longer than 30 days.

The interest rate on the ABL facility as of October 1, 2023 was 7.17 %.

Other Notes Payable and Finance Leases

During the first fiscal quarter of 2022, the Company bought out and terminated the contracts of multiple distributors who had previously been providing services to the Company.

These transactions were accounted for as contract terminations and resulted in expense of $ 23.0 million for the twenty-six weeks ended July 3, 2022.

The outstanding balance of these transactions was $ 0.5 million as of January 1, 2023, and was paid off during the twenty-six weeks ended July 2, 2023.

During the first fiscal quarter of 2020, the Company purchased intellectual property that includes a deferred purchase price of $ 0.5 million, of which $ 0.2 million and $ 0.3 million was outstanding as of July 2, 2023 and January 1, 2023, respectively.

Amounts outstanding under notes payable consisted of the following:

(in thousands) As of

October 1, 2023

As of January 1, 2023

6 unchanged sentences

From time to time, the Company sells notes receivable from IOs to a financial institution.

During the twenty-six weeks ended July 2, 2023, the Company sold an additional $ 2.2 million of notes receivable from IOs on its books for $ 2.2 million to a financial institution.

Due to the structure of these transactions, they did not qualify for sale accounting treatment and the Company has recorded the notes payable obligation owed by the IOs to the financial institution on its books;

the corresponding notes receivable also remained on the Company’s books.

During the thirty-nine weeks ended October 1, 2023, the Company sold $ 4.1 million of notes receivable from IOs to a financial institution.

The Company services the loans for the financial institution by collecting principal and interest from the IOs and passing it through to the institution.

The underlying notes have various maturity dates through June 2033.

The Company partially guarantees the outstanding loans, as discussed in further detail within Note 10.

3 unchanged sentences

Interest expense consisted of the following:

(in thousands) Thirteen weeks ended July 2, 2023 Thirteen weeks ended July 3, 2022 Twenty-six weeks ended July 2, 2023 Twenty-six weeks ended July 3, 2022

(in thousands) Thirteen weeks ended October 1, 2023 Thirteen weeks ended October 2, 2022 Thirty-nine weeks ended October 1, 2023 Thirty-nine weeks ended October 2, 2022

Company’s term loans, ABL facility, and other long-term debt $ 14,582 $ 10,916 $ 42,971 $ 29,320

6 unchanged sentences

Both the fixed and floating payment streams were based on a notional amount of $ 250 million.

On December 21, 2021, with an effective date of December 31, 2021, the Company entered into an accreting interest rate swap contract with a counter-party to make a series of payments based on a fixed interest rate of 1.3885 % and receive a series of payments based on the greater of LIBOR or 0.00 %.

On December 21, 2021, the Company entered into an accreting interest rate swap contract with a counter-party, with an effective date of December 31, 2021, to make a series of payments based on a fixed interest rate of 1.3885 % and receive a series of payments based on the greater of LIBOR or 0.00 %.

Both the fixed and floating payment streams were based on a notional amount of $ 250 million and have accreted to $ 500 million, and mature on September 30, 2026.

Effective on September 30, 2022, the Company amended the swap contract to reference the 1-month SOFR plus a credit spread adjustment (“CSA”) of 11.448 basis points, as well as setting the new fixed rate to 1.408 %.

under this amended swap agreement the Company will receive a series of payments based on the greater of SOFR plus CSA, or 0.00 %.

On October 12, 2022 and effective on November 1, 2022, the Company entered into a 10 -year swap contract, with an effective date of November 1, 2022, with a counter-party to make a series of payments based on a fixed interest rate of 3.83 % and receive a series of payments based on the greater of the 1-month SOFR or 0.00 %.

The agreement covers $ 86.4 million as of July 2, 2023.

Under the amended swap agreement, the Company will receive a series of payments based on the greater of SOFR plus CSA, or 0.00 %.

On October 12, 2022, the Company entered into a 10 -year swap contract, with an effective date of November 1, 2022, with a counter-party to make a series of payments based on a fixed interest rate of 3.83 % and receive a series of payments based on the greater of the 1-month SOFR or 0.00 %.

The agreement covers $ 85.5 million as of October 1, 2023.

This swap effectively fixes the rate of the Real Estate Term Loan to 5.93 %.

1 unchanged sentence

The Company entered into these transactions to reduce its exposure to changes in cash flows associated with the Real Estate Term Loan and has designated this derivative as a cash flow hedge.

At July 2, 2023, the effective fixed interest rate on the long-term debt hedged by these contracts was 5.72 %.

As of October 1, 2023, the effective fixed interest rate on the long-term debt hedged by these contracts was 5.81 %.

For further treatment of the Company’s interest rate swap, refer to Note 9.

4 unchanged sentences

"Warrants" for additional information on the Company's warrant liabilities.

A reconciliation of the changes in the warrant liability during the twenty-six weeks ended July 2, 2023 is as follows:

A reconciliation of the changes in the warrant liability during the thirty-nine weeks ended October 1, 2023 is as follows:

(in thousands)

Fair value of warrant liabilities as of January 1, 2023 $ 45,504

Loss on remeasurement of warrant liability 2,232

Fair value of warrant liabilities as of April 2, 2023 $ 47,736

Gain on remeasurement of warrant liability ( 576 )

Fair value of warrant liabilities as of July 2, 2023 $ 44,928

Gain on remeasurement of warrant liability ( 15,984 )

Fair value of warrant liabilities as of October 1, 2023 $ 28,944

Purchase Commitments

The Company has outstanding purchase commitments for specific quantities at fixed prices for certain key ingredients to economically hedge commodity input prices.

These purchase commitments totaled $ 110.4 million as of July 2, 2023.

These purchase commitments totaled $ 84.4 million as of October 1, 2023.

The Company accrues for losses on firm purchase commitments in a loss position at the end of each reporting period to the extent that there is an active observable market.

The Company has recorded purchase commitment gains (losses) totaling $ 2.4 million and $ 1.1 million for the thirteen weeks ended July 2, 2023 and July 3, 2022, respectively, and $( 0.3 ) million and $ 1.0 million for the twenty-six weeks ended July 2, 2023 and July 3, 2022, respectively.

The Company has recorded purchase commitment gains (losses) totaling $( 1.7 ) million and $ 1.0 million for the thirteen weeks ended October 1, 2023 and October 2, 2022, respectively, and $( 1.9 ) million and $ 0.0 million for the thirty-nine weeks ended October 1, 2023 and October 2, 2022, respectively.

FAIR VALUE MEASUREMENTS

6 unchanged sentences

Level II - Valuations are based on quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active.

Financial asset or liabilities which are included in this category are securities where all significant inputs are observable, either directly or indirectly;

Level III - Financial asset or liabilities which are included in this category have prices or valuations that are unobservable or there is little, if any, market activity for these financial assets or liabilities.

Financial assets or liabilities which are included in this category are securities where all significant inputs are observable, either directly or indirectly;

Level III - Financial assets or liabilities which are included in this category have prices or valuations that are unobservable or there is little, if any, market activity for these financial assets or liabilities.

The inputs into the determination of fair value inputs for these investments require significant management judgment or estimation.

3 unchanged sentences

Derivative assets and liabilities included in Level 2 primarily represent commodity and interest rate swap contracts.

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of July 2, 2023:

(in thousands) Level 1 Level 2 Level 3 Total

4 unchanged sentences

Commodity contracts $ — $ 867 $ — $ 867

Interest rate swaps — 244 — 244

Private placement warrants — 28,944 — 28,944

17 unchanged sentences

The Company partially guarantees loans made to IOs by Cadence Bank for the purchase of routes.

The outstanding balance of loans guaranteed was $ 0.9 million and $ 1.5 million at July 2, 2023 and January 1, 2023, respectively, all of which was recorded by the Company as off balance sheet arrangements.

The outstanding balance of loans guaranteed was $ 0.8 million and $ 1.5 million as of October 1, 2023 and January 1, 2023, respectively, all of which was recorded by the Company as off balance sheet arrangements.

The maximum amount of future payments the Company could be required to make under the guarantees equates to 25 % of the outstanding loan balance up to $ 2.0 million.

2 unchanged sentences

The Company partially guarantees loans made to IOs by Bank of America for the purchase of routes.

The outstanding balance of loans guaranteed that were issued by Bank of America was $ 42.9 million and $ 36.0 million at July 2, 2023 and January 1, 2023, respectively, which are off balance sheet arrangements.

The outstanding balance of loans guaranteed that were issued by Bank of America was $ 49.6 million and $ 36.0 million as of October 1, 2023 and January 1, 2023, respectively, which are off balance sheet arrangements.

As discussed in Note 7.

"Long-Term Debt", the Company also sold notes receivable on its books to Bank of America during fiscal years 2019, 2021, and 2022, which the Company partially guarantees.

The outstanding balance of notes purchased by Bank of America at July 2, 2023 and January 1, 2023 was $ 16.6 million and $ 17.9 million, respectively.

Due to the structure of the transactions, the sale did not qualify for sale accounting treatment, and as such the Company records the notes payable obligation owed by the IOs to the financial institution on its Consolidated Balance Sheets;

the corresponding note receivable also remained on the Company’s Consolidated Balance Sheets.

The outstanding balance of notes purchased by Bank of America as of October 1, 2023 and January 1, 2023 was $ 15.3 million and $ 17.9 million, respectively.

The maximum amount of future payments the Company could be required to make under these guarantees equates to 25 % of the outstanding loan balance on the first day of each calendar year plus 25 % of the amount of any new loans issued during such calendar year.

3 unchanged sentences

The agreement with M&T Bank was amended in January 2020 so that the Company guaranteed up to 25 % of the greater of the aggregate principal amount of loans outstanding on the payment date or January 1 st of the subject year.

The outstanding balance of loans guaranteed was $ 2.7 million and $ 3.4 million at July 2, 2023 and January 1, 2023, respectively, all of which were included in the Company's Consolidated Balance Sheets.

The outstanding balance of loans guaranteed was $ 2.5 million and $ 3.4 million as of October 1, 2023 and January 1, 2023, respectively, all of which were included in the Company's Consolidated Balance Sheets.

These loans are collateralized by the routes for which the loans are made.

1 unchanged sentence

ACCUMULATED OTHER COMPREHENSIVE INCOME

Total accumulated other comprehensive income was $ 50.2 million as of July 2, 2023 and $ 51.0 million as of January 1, 2023.

Total accumulated other comprehensive income was $ 54.3 million as of October 1, 2023 and $ 51.0 million as of January 1, 2023.

Total accumulated other comprehensive income consists solely of unrealized gains from the Company’s derivative financial instruments accounted for as cash flow hedges.

4 unchanged sentences

Unrealized gain on cash flow hedges 30,820

Balance as of April 3, 2022 31,524

Unrealized gain on cash flow hedges 3,011

Balance as of July 3, 2022 34,535

Less balance attributable to noncontrolling interest as of July 3, 2022 13,247

Balance attributable to controlling interest as of July 3, 2022 $ 21,288

Unrealized gain on cash flow hedges 19,655

Balance as of October 2, 2022 $ 54,190

Less balance attributable to noncontrolling interest as of October 2, 2022 21,570

Balance attributable to controlling interest as of October 2, 2022 $ 32,620

Balance as of January 1, 2023 $ 50,994

Unrealized loss on cash flow hedges ( 753 )

Balance as of April 2, 2023 40,669

Unrealized gain on cash flow hedges 9,572

Balance as of July 2, 2023 50,241

Less balance attributable to noncontrolling interest as of July 2, 2023 19,896

Balance attributable to controlling interest as of July 2, 2023 $ 30,345

Unrealized gain on cash flow hedges 4,047

Balance as of October 1, 2023 $ 54,288

Less balance attributable to noncontrolling interest as of October 1, 2023 21,606

Balance attributable to controlling interest as of October 1, 2023 $ 32,682

SUPPLEMENTARY CASH FLOW INFORMATION

(in thousands) Twenty-six weeks ended July 2, 2023 Twenty-six weeks ended July 3, 2022

(in thousands) Thirty-nine weeks ended October 1, 2023 Thirty-nine weeks ended October 2, 2022

Cash paid for interest $ 44,310 $ 29,682

6 unchanged sentences

The Company has acquired various domestic entities taxed as corporations, which are now wholly-owned by us or our subsidiaries.

Where required or allowed, these subsidiaries also file and pay tax as a consolidated group for federal and state income tax purposes.

Where required or allowed, these subsidiaries also file and pay taxes as a consolidated group for federal and state income tax purposes.

The Company anticipates this structure to remain in existence for the foreseeable future.

The Company recorded income tax benefit for the thirteen and twenty-six weeks ended July 2, 2023 of $( 0.7 ) million and $( 3.3 ) million, respectively.

Comparably, the Company recorded income tax benefit for the thirteen and twenty-six weeks ended July 3, 2022 of $( 2.9 ) million and $( 0.1 ) million, respectively.

The effective tax rates for the thirteen and twenty-six weeks ended July 2, 2023 were 7.8 % and 12.7 %, respectively.

Comparably, the effective tax rates for the thirteen and twenty-six weeks ended July 3, 2022 were 894.8 % and 0.3 %, respectively.

The Company recorded income tax (benefit) for the thirteen and thirty-nine weeks ended October 1, 2023 of $( 10.1 ) million and $( 13.4 ) million, respectively.

Comparably, the Company recorded income tax (benefit) for the thirteen and thirty-nine weeks ended October 2, 2022 of $( 1.6 ) million and $( 1.7 ) million, respectively.

The effective tax rates for the thirteen and thirty-nine weeks ended October 1, 2023 were ( 165.1 )% and 66.3 %, respectively.

Comparably, the effective tax rates for the thirteen and thirty-nine weeks ended October 2, 2022 were 1450.0 % and 5.7 %, respectively.

The Company’s effective tax rates differ from the federal statutory rate of 21% primarily due to the impact of UBH, which is a partnership, is not taxed at the Company level, and is required to allocate some of its taxable results to the Continuing Members, as well as state taxes and the fair value impact of warrant liabilities.

The Company’s effective tax rate for the thirteen and twenty-six weeks ended July 2, 2023 are 6.5 % and 12.8 %, respectively, before consideration of any discrete items.

During the thirteen and twenty-six weeks ended July 2, 2023, the effective tax rate was impacted by statutory state tax rate changes which resulted in a nominal discrete tax expense.

The Company’s effective tax rate for the thirteen and thirty-nine weeks ended October 1, 2023 were 88.5 % and 33.0 %, respectively, before consideration of any discrete items.

During the thirteen and thirty-nine weeks ended October 1, 2023, the effective tax rate was impacted by return to provision items, statutory state tax rate and apportionment changes, and updated apportionment estimates in response to network optimization efforts that included the sale of the Bluffton, Indiana facility which resulted in a discrete tax (benefit) of $( 1.4 ) million and $( 1.3 ) million, respectively.

The Company regularly evaluates valuation allowances established for deferred tax assets (“DTA's”) for which future realization is uncertain.

The Company assessed the available positive and negative evidence to estimate whether future taxable income would be generated to permit use of the existing DTA's.

As of July 2, 2023, a significant piece of objective negative evidence evaluated was the twelve-quarter cumulative loss before taxes.

As of October 1, 2023, a significant piece of objective negative evidence evaluated was the twelve-quarter cumulative loss before taxes.

Such objective evidence limits the ability to consider other subjective evidence, such as projections for future growth.

8 unchanged sentences

The amount of DTA considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as projections for growth.

As of July 2, 2023, tax years 2019 through 2023 remain open and subject to examination by the Internal Revenue Service and in the majority of the states where the Company has nexus, and tax years 2018 through 2023 remain open and subject to examination in selected states that have a longer statute of limitations.

As of October 1, 2023, tax years 2020 through 2023 remain open and subject to examination by the Internal Revenue Service and in the majority of the states where the Company has nexus, and tax years 2018 through 2023 remain open and subject to examination in selected states that have a longer statute of limitations.

Upon audit, tax authorities may challenge all or part of a tax position.

A tax position successfully challenged by a taxing authority could result in an adjustment to our provision for income taxes in the period in which a final determination is made.

The Company did not maintain any unrecognized tax benefits as of July 2, 2023 and January 1, 2023.

The Company did not maintain any unrecognized tax benefits as of October 1, 2023 and January 1, 2023.

Tax receivable agreement liability

10 unchanged sentences

The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the timing and amount of taxable income generated by the Company each year, as well as the tax rate then applicable, among other factors.

As of July 2, 2023 and January 1, 2023, the Company had a liability of $ 24.5 million and $ 25.4 million, respectively, related to its projected obligations under the TRA, which is reflected as non-current accrued expenses in the Consolidated Balance Sheets.

As of October 1, 2023 and January 1, 2023, the Company had a liability of $ 24.6 million and $ 25.4 million, respectively, related to its projected obligations under the TRA.

The liability is reflected as current and non-current accrued expenses of $ 0.1 million and $ 24.5 million in the Consolidated Balance Sheets, respectively.

Prior to the Business Combination, CCH issued 15,833,332 warrants that were initially sold by CCH in its initial public offering of securities (the "Public Warrants"), including 1,166,666 warrants issued at the closing of the Business Combination (“Forward Purchase Warrants”) pursuant to those certain Forward Purchase Agreements entered into by CCH, CCH's Sponsor (the "Sponsor"), and the independent directors of CCH (the "Forward Purchase Agreements"), and 7,200,000 warrants initially sold to the Sponsor simultaneously with the closing of its initial public offering (the "Private Placement Warrants," collectively, with the Public Warrants and Forward Purchase Warrants, the "Warrants").

As a result of the Business Combination, the Company assumed the CCH warrants and such warrants are now exercisable for shares of UBI Class A Common Stock instead of Class A ordinary shares of CCH.

As a result of the Business Combination, the Company assumed the Warrants and such Warrants are now exercisable for shares of UBI Class A Common Stock instead of Class A ordinary shares of CCH.

All other features of the Warrants remain unchanged.

On December 14, 2020, the Company provided notice to the holders of the Public Warrants and Forward Purchase Warrants that their warrants would be redeemed in accordance with the original terms on January 14, 2021.

As of July 2, 2023 and January 1, 2023, there were 7,200,000 Private Placement Warrants outstanding and all Public Warrants and Forward Purchase Warrants have been exercised (except for the Public Warrants that were redeemed by the Company on January 14, 2021).

As of October 1, 2023 and January 1, 2023, there were 7,200,000 Private Placement Warrants outstanding and all Public Warrants and Forward Purchase Warrants have been exercised (except for the Public Warrants that were redeemed by the Company on January 14, 2021).

The Private Placement Warrants and the shares of Class A Common Stock issuable upon the exercise of the Private Placement Warrants were not transferable, assignable or salable until after the completion of the Business Combination, subject to certain limited exceptions.

2 unchanged sentences

The Warrants are accounted for as derivative liabilities in accordance with ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity ("ASC 815-40"), due to certain settlement provisions in the corresponding warrant agreement that do not meet the criteria to be classified in stockholders’ equity.

Pursuant to ASC 815-40, the Warrants are now classified as a liability at fair value on the Company’s Consolidated Balance Sheet, and the change in the fair value of such liability in each period is recognized as a non-cash gain or loss in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss).

Pursuant to ASC 815-40, the Warrants are now classified as a

liability at fair value on the Company’s Consolidated Balance Sheet, and the change in the fair value of such liability in each period is recognized as a non-cash gain or loss in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss).

The Warrants are deemed equity instruments for income tax purposes, and accordingly, there is no tax accounting relating to changes in the fair value of the Warrants recognized.

The remeasurement of the warrant liability resulted in a gain (loss) of $ 2.8 million and $ 5.8 million for the thirteen weeks ended July 2, 2023 and July 3, 2022, respectively, and of $ 0.6 million and $ 7.7 million for the twenty-six weeks ended July 2, 2023 and July 3, 2022, respectively.

The remeasurement of the warrant liability resulted in a gain (loss) of $ 16.0 million and $( 3.7 ) million for the thirteen weeks ended October 1, 2023 and October 2, 2022, respectively, and of $ 16.6 million and $ 4.0 million for the thirty-nine weeks ended October 1, 2023 and October 2, 2022, respectively.

Class A Common Stock

The Company is authorized to issue 1,000,000,000 shares of Class A Common Stock, par value $ 0.0001 per share, of which 81,141,417 and 80,882,334 shares of UBI were issued and outstanding on July 2, 2023 and January 1, 2023, respectively.

Class V Common Stock

1 unchanged sentence

Each of the Continuing Members' common limited liability company units of UBH along with a share of Class V Common Stock may be exchanged for one share of Class A Common Stock of the Company upon certain restrictions being satisfied.

As of July 2, 2023 and January 1, 2023, there were 59,349,000 shares of Class V Common Stock outstanding.

As of October 1, 2023 and January 1, 2023, there were 59,349,000 shares of Class V Common Stock outstanding.

EARNINGS (LOSS) PER SHARE

2 unchanged sentences

The following table reconciles the numerators and denominators used in the computations of both basic and diluted earnings per share:

(in thousands, except share data) Thirteen weeks ended July 2, 2023 Twenty-six weeks ended July 2, 2023 Twenty-six weeks ended July 3, 2022

(in thousands, except share data) Thirteen weeks ended October 2, 2022 Thirty-nine weeks ended October 2, 2022

Basic and diluted earnings per share:

9 unchanged sentences

Class V Common Stock not subject to earnings per share calculation 59,349,000 59,349,000

Net loss attributable to noncontrolling interest $ ( 4,429 ) $ ( 9,784 ) $ ( 14,962 )

(in thousands, except share data) Thirteen weeks ended July 3, 2022

Net income (loss) attributable to noncontrolling interest $ 2,373 $ ( 12,589 )

(in thousands, except share data) Thirteen weeks ended October 2, 2023 Thirty-nine weeks ended October 2, 2023

Basic and diluted earnings per share:

7 unchanged sentences

Warrants 1,828,748 2,142,492

RSUs 338,373 242,903

PSUs 135,737 121,083

Stock options — 317

2 unchanged sentences

Weighted average Class V Common Stock not subject to earnings per share calculation 59,349,000 59,349,000

Net loss attributable to noncontrolling interest $ 634

Net (income) loss attributable to noncontrolling interest $ ( 222 ) $ 9,562

The diluted earnings (loss) per share computation excludes the effect of certain restricted stock units ("RSUs"), performance stock units ("PSUs"), and stock options granted to directors and management which convert to Class A Common Stock upon vesting or being exercised, as their inclusion would have been anti-dilutive.

1 unchanged sentence

The PSUs and RSUs, were not considered participating securities in the Successor period despite the holders of these stock-based compensation awards being entitled to participate in dividends declared on Class A Common Stock, if and when declared, on a one -to-one per-share basis, because the dividends are only payable upon full vesting the awards, and as such, the dividend is forfeitable.

As of July 2, 2023 and January 1, 2023, the Continuing Members held all 59,349,000 shares of Class V Common Stock issued and outstanding and also held an equal number of common limited liability company units of UBH, which comprise the noncontrolling interest.

As of October 1, 2023 and January 1, 2023, the Continuing Members held all 59,349,000 shares of Class V Common Stock issued and outstanding and also held an equal number of common limited liability company units of UBH, which comprise the noncontrolling interest.

SUBSEQUENT EVENTS

On July 20, 2023, the Company amended the ABL Facility to increase the credit limit up to $ 225.0 million and extend the maturity until October 2027 at the earliest.

The Company performed a review of events subsequent to the balance sheet date through the date the financial statements were issued and determined that there were no such events requiring recognition or disclosure in the 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.

What changed 10-Q

Item 1. Financial Statements