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Item 1. Financial Statements

2024-08-01 compared with 2024-05-02 · 153 added, 103 removed, 385 unchanged (40% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

March 31, 2024 and December 31, 2023

June 30, 2024 and December 31, 2023

(In thousands, except share information)

March 31, 2024

June 30, 2024

As of December 31, 2023

33 unchanged sentences

1,000,000,000 shares authorized;

81,406,827 and 81,187,977 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

81,530,122 and 81,187,977 shares issued and outstanding as of June 30, 2024 and December 31, 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 March 31, 2024 and December 31, 2023

59,349,000 shares issued and outstanding as of June 30, 2024 and December 31, 2023

Additional paid-in capital 955,280 944,573

8 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the thirteen weeks ended March 31, 2024 and April 2, 2023

For the thirteen and twenty-six weeks ended June 30, 2024 and July 2, 2023

(In thousands, except share information)

Thirteen weeks ended March 31, 2024 Thirteen weeks ended April 2, 2023

(in thousands) Thirteen weeks ended June 30, 2024 Thirteen weeks ended July 2, 2023 Twenty-six weeks ended June 30, 2024 Twenty-six weeks ended July 2, 2023

Net sales $ 356,190 $ 362,853 $ 702,713 $ 714,286

5 unchanged sentences

Total selling, distribution, and administrative expenses 104,593 114,453 214,041 220,539

Loss on sale of assets, net ( 470 ) ( 508 )

Income (loss) from operations 9,655 ( 2,098 )

Gain (loss) on sale of assets, net 2,373 ( 279 ) 1,903 ( 787 )

Income from operations 22,534 2,661 32,189 563

Other income (expense), net

1 unchanged sentence

Interest expense ( 10,209 ) ( 15,019 ) ( 24,040 ) ( 29,397 )

Loss on debt extinguishment ( 1,273 ) — ( 1,273 ) —

Other income 198 272 1,108 1,887

Loss on remeasurement of warrant liability ( 11,808 ) ( 2,232 )

Gain on remeasurement of warrant liability 12,888 2,808 1,080 576

Other income (expense), net 1,604 ( 11,939 ) 20,890 ( 26,934 )

Income (loss) before taxes 24,138 ( 9,278 ) 53,079 ( 26,371 )

Income tax expense (benefit) 26,544 ( 2,611 )

Income tax (benefit) expense ( 1,309 ) ( 725 ) 25,236 ( 3,336 )

Net income (loss) 25,447 ( 8,553 ) 27,843 ( 23,035 )

Net (income) loss attributable to noncontrolling interest ( 5,599 ) 4,429 ( 11,986 ) 9,784

Net loss attributable to controlling interest $ ( 3,990 ) $ ( 9,127 )

Loss per Class A Common stock:

Net income (loss) attributable to controlling interest $ 19,848 $ ( 4,124 ) $ 15,857 $ ( 13,251 )

Income (loss) per Class A Common stock:

Basic $ 0.24 $ ( 0.05 ) $ 0.19 $ ( 0.16 )

8 unchanged sentences

Net comprehensive (income) loss attributable to noncontrolling interest ( 4,696 ) 383 ( 13,048 ) 10,105

Net comprehensive loss attributable to controlling interest $ ( 1,296 ) $ ( 15,085 )

Net comprehensive income (loss) attributable to controlling interest $ 18,609 $ 1,402 $ 17,312 $ ( 13,683 )

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF EQUITY

For the thirteen weeks ended March 31, 2024 and April 2, 2023

For the thirteen and twenty-six weeks ended June 30, 2024 and July 2, 2023

(In thousands, except share information)

8 unchanged sentences

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

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

Share-based compensation 128,549 — — 4,305 — — 4,305 — 4,305

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

Other comprehensive income — — — — 5,526 5,526 4,046 9,572

Cash dividends declared — — — ( 9,240 ) — ( 9,240 ) — ( 9,240 )

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

Balance at December 31, 2023 81,187,977 $ 8 59,349,000 $ 6 $ 944,573 $ ( 298,049 ) $ 22,958 $ 669,496 $ 714,187 $ 1,383,683

7 unchanged sentences

Balance at March 31, 2024 81,406,827 $ 8 59,349,000 $ 6 $ 950,092 $ ( 306,842 ) $ 25,652 $ 668,916 $ 721,172 $ 1,390,088

Share-based compensation 123,295 — — 5,261 — — 5,261 — 5,261

Deferred tax impact from divestiture — — ( 73 ) — — ( 73 ) 1 ( 72 )

Class A Common Stock Class V Common Stock Additional Paid-in Capital Accumulated (Deficit) Accumulated Other Comprehensive Income Total Stockholders' Equity Non-controlling Interest Total Equity

Shares Amount Shares Amount

Net income — — — 19,848 — 19,848 5,599 25,447

Cash dividends declared — — — ( 4,940 ) — ( 4,940 ) — ( 4,940 )

Special excess cash dividend — — — ( 1,816 ) — ( 1,816 ) — ( 1,816 )

Distribution to noncontrolling interest — — — — — — ( 3,502 ) ( 3,502 )

Tax distribution — — — — — — ( 2,596 ) ( 2,596 )

Other comprehensive loss — — — — ( 1,239 ) ( 1,239 ) ( 903 ) ( 2,142 )

Balance at June 30, 2024 81,530,122 $ 8 59,349,000 $ 6 $ 955,280 $ ( 293,750 ) $ 24,413 $ 685,957 $ 719,771 $ 1,405,728

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

1 unchanged sentence

CONSOLIDATED STATEMENT OF CASH FLOWS

For the thirteen weeks ended March 31, 2024 and April 2, 2023

For the twenty-six weeks ended June 30, 2024 and July 2, 2023

(In thousands)

Thirteen weeks ended March 31, 2024 Thirteen weeks ended April 2, 2023

Twenty-six weeks ended June 30, 2024 Twenty-six weeks ended July 2, 2023

Cash flows from operating activities

4 unchanged sentences

Gain on sale of business ( 44,015 ) —

Loss on remeasurement of warrant liability 11,808 2,232

Loss on sale of assets 470 508

Gain on remeasurement of warrant liability ( 1,080 ) ( 576 )

(Gain) loss on sale of assets ( 1,903 ) 787

Loss on debt extinguishment 1,273 —

Share-based compensation 9,174 8,939

9 unchanged sentences

Purchases of property and equipment ( 37,781 ) ( 30,158 )

Purchases of intangibles ( 9,220 ) —

Proceeds from sale of property and equipment 24,062 959

9 unchanged sentences

Repayments on term debt and notes payable ( 166,608 ) ( 11,785 )

Payment of debt issuance cost ( 733 ) —

Payments of tax withholding requirements for employee stock awards ( 1,397 ) ( 589 )

Dividends ( 4,625 ) ( 4,663 )

Dividends paid ( 9,428 ) ( 9,281 )

Distribution to noncontrolling interest ( 9,481 ) ( 6,766 )

Net cash (used in) provided by financing activities ( 126,220 ) 35,825

Net decrease in cash and cash equivalents ( 5,019 ) ( 15,009 )

Net increase in cash and cash equivalents 14,551 727

Cash and cash equivalents at beginning of period 52,023 72,930

17 unchanged sentences

All intercompany transactions and balances have been eliminated in consolidation.

Prior Period Revision - Consolidated Statement of Cash Flows – For the thirteen weeks ended March 31, 2024, the Company disclosed the borrowings of lines of credit and repayments of lines of credit as separate line items within the financing activities section of the Consolidated Statement of Cash Flows.

The Company has corrected these line items for the thirteen weeks ended April 2, 2023 for comparability purposes and deems the change to that period to be immaterial.

Prior Period Revision - Consolidated Statement of Cash Flows – For the twenty-six weeks ended June 30, 2024, the Company disclosed the borrowings of lines of credit and repayments of lines of credit as separate line items within the financing activities section of the Consolidated Statement of Cash Flows.

The Company has corrected these line items for the twenty-six weeks ended July 2, 2023 for comparability purposes and deems the change to that period to be immaterial.

Revenue Recognition – The Company’s revenues primarily consist of the sale of salty snack items to customers, including supermarkets, mass merchants, club stores, dollar and discount stores, convenience stores, independent grocery stores, drug stores, food service, vending, military, and other channels.

13 unchanged sentences

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

The Company has reserves in place of $ 10.8 million as of March 31, 2024, which include adjustments taken by customers of $ 5.1 million that are awaiting final processing and reserves of $ 17.4 million as of December 31, 2023, which include adjustments taken by customers of $ 6.2 million that are awaiting final processing.

The Company has reserves in place of $ 18.2 million as of June 30, 2024, which include adjustments taken by customers of $ 8.9 million that are awaiting final processing and reserves of $ 17.4 million as of December 31, 2023, which include adjustments taken by customers of $ 6.2 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.

14 unchanged sentences

The following table summarizes the net assets and liabilities included in the Good Health and R.W.

Garcia Sale on February 5, 2024:

Property, plant, and equipment, net

5 unchanged sentences

The gain on the Good Health and R.W.

Garcia Sale is recognized as Gain on sale of business in the Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirteen weeks ended March 31, 2024.

The Company and Our Home will operate under a transition services agreement for 12 months.

In addition, following the closing of the Good Health and R.W.

Garcia Sale, the parties will operate under reciprocal co-manufacturing agreements under which Our Home will co-manufacture certain of the Company's products and the Company will co-manufacture certain Good Health products.

Garcia Sale is recognized as Gain on sale of business in the Consolidated Statements of Operations and Comprehensive Income (Loss) for the twenty-six weeks ended June 30, 2024.

On April 22, 2024, the Company sold to Our Home™ its Berlin, PA, and Fitchburg, MA manufacturing facilities and certain related assets (the “Manufacturing Facilities Sale”).

The total consideration for the transactions is $ 18.5 million related to the facilities and certain inventory, subject to customary adjustments.

The Company recognized a gain on the Manufacturing Facilities Sale of $ 4.3 million.

The Company and Our Home will operate under transition services agreements which end during the first half of 2025.

In addition, the parties will operate under reciprocal co-manufacturing agreements under which Our Home will co-manufacture certain of the Company's products and the Company will co-manufacture certain Good Health products.

Certain Good Health products will continue to be distributed and sold on the Company's DSD network for Our Home.

The Company received approximately $ 15.5 million in advance from Our Home for certain terms under these agreements for which the Company will recognize through income from operations over the term of the transition services agreement and co-manufacturing agreements.

The Company received approximately $ 18.7 million in advance from Our Home for certain terms under these agreements for which the Company will recognize through income from operations over the term of the transition services agree ments.

Inventories consisted of the following:

(in thousands) As of

March 31, 2024

June 30, 2024

As of December 31, 2023

4 unchanged sentences

In connection with the Good Health and R.W.

Garcia Sale in February 2024, the Company sold inventory of $ 6.3 million.

Divestiture .

Garcia Sale in February 2024 and the Manufacturing Facilities Sale in April 2024, the Company sold inventory of $ 6.3 million and $ 1.6 million, respectively.

Divestitures .

PROPERTY, PLANT AND EQUIPMENT, NET

1 unchanged sentence

(in thousands) As of

March 31, 2024

June 30, 2024

As of December 31, 2023

8 unchanged sentences

Property, plant and equipment, net $ 300,050 $ 318,881

Depreciation expense was $ 8.7 million and $ 10.4 million for the thirteen weeks ended March 31, 2024 and April 2, 2023, 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 April 2, 2023, the Company recognized expense of $ 1.9 million related to the impairment of equipment.

During the thirteen weeks ended March 31, 2024, in connection with the Good Health and R.W.

Depreciation expense was $ 8.2 million and $ 10.6 million for the thirteen weeks ended June 30, 2024 and July 2, 2023, respectively, and $ 17.0 million and $ 20.9 million for the twenty-six weeks ended June 30, 2024 and July 2, 2023, respectively.

Depreciation expense is included 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 permanently ceased operations at the Company’s manufacturing facility located in Birmingham, AL (the “Birmingham Facility”) effective in June 2023 (the “Manufacturing Closure”).

Golden Flake® and other products that were produced at the Birmingham Facility continue 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 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 were 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.

The fixed asset impairments are recorded in the administrative expenses line on the Consolidated Statement of Operations and Comprehensive Income (Loss) for the thirteen weeks ended July 2, 2023.

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.

During the twenty-six weeks ended June 30, 2024, the Company sold the Birmingham Facility for proceeds of $ 6.0 million and its Gramercy, LA facility for $ 1.8 million.

Both of these facilities were classified as Assets held for sale on the Consolidated Balance Sheet at December 31, 2023.

During the twenty-six weeks ended June 30, 2024, in connection with the Good Health and R.W.

Garcia Sale as described in Note 2.

Divestiture, the Company sold its Lincolnton, NC, and Lititz, PA manufacturing facilities and certain related assets having a book value of $ 27.5 million.

The Company also sold its manufacturing facility in Birmingham, AL for proceeds of $ 6.0 million.

The Birmingham, AL manufacturing facility was classified as Assets held for sale on the Consolidated Balance Sheet at December 31, 2023.

Divestitures, the Company sold its Lincolnton, NC, and Lititz, PA manufacturing facilities and certain related assets having a net book value of $ 27.5 million.

Also, during the twenty-six weeks ended June 30, 2024 in connection with the Manufacturing Facilities Sale as described in Note 2.

Divestitures , the Company sold its Berlin, PA and Fitchburg, MA

manufacturing facilities having a net book value of $ 12.2 million and recognized a gain on the Manufacturing Facilities Sale of $ 4.3 million.

GOODWILL AND INTANGIBLE ASSETS, NET

4 unchanged sentences

Garcia Sale, Note 2.

Balance as of March 31, 2024

Balance as of June 30, 2024

Intangible assets, net, consisted of the following:

(in thousands) As of

March 31, 2024

June 30, 2024

As of December 31, 2023

8 unchanged sentences

Intangible assets, net $ 1,012,447 $ 1,063,413

The Company sold customer relationships and trademarks in the amount of $ 26.0 million and $ 18.3 million, respectively, related to the Good Health and R.W.

Divestiture for further discussion.

There were no other significant changes to intangible assets during the thirteen weeks ended March 31, 2024 and April 2, 2023 other than those which arise from the normal course of business from buying and selling of Company-owned route assets and amortization.

Amortization of the distributor/customer relationships, technology, and trade names amounted to $ 9.2 million and $ 9.4 million for the thirteen weeks ended March 31, 2024 and April 2, 2023, respectively.

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

During the thirteen weeks ended March 31, 2024, the Company sold customer relationships and trademarks in the amount of $ 26.0 million and $ 18.3 million, respectively, related to the Good Health and R.W.

Divestitures for further discussion.

In addition, during the thirteen weeks ended June 30, 2024, the Company paid $ 9.2 million to purchase an indefinite life intangible right for use of a third party brand name.

This intangible is included in indefinite life trade names.

There were no other significant changes to intangible assets during the twenty-six weeks ended June 30, 2024 and July 2, 2023 other than those which arise from the normal course of business from buying and selling of Company-owned route assets and amortization.

Amortization of the distributor/customer relationships, technology, and trade names amounted to $ 9.0 million and $ 9.4 million for the thirteen weeks ended June 30, 2024 and July 2, 2023, respectively, and $ 18.3 million and $ 18.8 million for the twenty-six weeks ended June 30, 2024 and July 2, 2023, respectively.

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

NOTES RECEIVABLE

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

Contracts are executed between the Company and independent operators (“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 4.50 % to 10.55 % with terms ranging generally from two to ten years .

The notes receivable balances due from IOs at March 31, 2024 and December 31, 2023 totaled $ 16.4 million and $ 17.6 million, respectively, and are collateralized by the routes for which the loans are made.

The Company also sold certain of these notes to Bank of America and one other bank.

The Company has a corresponding notes payable liability, related to these sold IOs notes receivables.

The notes receivable balances due from IOs at June 30, 2024 and December 31, 2023 totaled $ 14.5 million and $ 17.6 million, respectively, and are collateralized by the routes for which the loans are made.

The Company also sold certain notes to Bank of America and one other bank.

The Company has a corresponding notes payable, related to the sale of IOs notes receivables.

Contingencies.

1 unchanged sentence

Current accrued expenses and other consisted of the following:

(in thousands) As of March 31, 2024 As of December 31, 2023

(in thousands) As of June 30, 2024 As of December 31, 2023

Accrued compensation and benefits $ 14,294 $ 21,466

Accrued Federal income tax payable 18,534 —

Operating right of use liability 15,770 14,992

7 unchanged sentences

(a) See Note 2.

Divestiture , for further discussion.

Divestitures , for further discussion.

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

(in thousands) As of March 31, 2024 As of December 31, 2023

(in thousands) As of June 30, 2024 As of December 31, 2023

Operating right of use liability $ 42,715 $ 43,928

6 unchanged sentences

Term Debt and Revolving Credit Facility

Term debt and revolving credit facilities consists of the following:

On April 17, 2024, the Company amended its Term Loan B to refinance in full all of the $ 630.0 million outstanding term loan and reduce the interest rate from the Secured Overnight Financing Rate ("SOFR") plus the applicable rate of 3.00 % plus a credit spread adjustment to SOFR plus the applicable rate of 2.75 %, as well as certain other changes.

Other material terms of the Term Loan B, including the January 2028 maturity date, remain unchanged.

The Company recorded a loss on debt extinguishment of $ 1.3 million related to the refinancing of its Term Loan B in its Consolidated Statement of Operations and Comprehensive Income (Loss) for the thirteen weeks ended June 30, 2024 and twenty-six weeks ended June 30, 2024.

On April 17, 2024, the Company amended its ABL facility to reduce the rate from SOFR plus the applicable rate ranging from 1.50 %- 2.00 % plus a credit spread adjustment to SOFR plus the applicable rate ranging from 1.50 %- 2.00 %, as well as certain other changes.

Other material terms of the ABL, including maturity date, remain unchanged.

Term debt and revolving credit facilities consisted of the following:

Debt (in thousands)

Original Principal Balance Maturity Date As of

March 31, 2024

June 30, 2024

As of December 31, 2023

15 unchanged sentences

Garcia Sale as described in Note 2.

Divestiture , the Company made a $ 141.0 million payment on its Term Loan B and $ 8.5 million payment on its Real Estate Term Loan during thirteen weeks ended March 31, 2024.

Divestitures and Note 4.

Property, Plant and Equipment, Net , the Company made a $ 141.0 million accelerated payment on its Term Loan B and $ 8.5 million payment on its Real Estate Term Loan during twenty-six weeks ended June 30, 2024.

In addition, in connection with the Manufacturing Facilities Sale as described in Note 2.

Divestitures and Note 4.

Property, Plant and Equipment, Net , the Company made an additional payment of $ 9.2 million on its Real Estate Term Loan during the thirteen weeks ended June 30, 2024.

Other Notes Payable and Capital Leases

Amounts outstanding under notes payable consisted of the following:

Amounts outstanding under notes payable and capital leases consisted of the following:

(in thousands) As of

March 31, 2024

June 30, 2024

As of December 31, 2023

7 unchanged sentences

Interest expense consisted of the following:

(in thousands) Thirteen weeks ended March 31, 2024 Thirteen weeks ended April 2, 2023

Company’s ABL facility and other long-term debt $ 11,782 $ 14,142

(in thousands) Thirteen weeks ended June 30, 2024 Thirteen weeks ended July 2, 2023 Twenty-six weeks ended June 30, 2024 Twenty-six weeks ended July 2, 2023

Company’s long-term debt $ 9,191 $ 14,247 $ 20,973 $ 28,389

Amortization of deferred financing fees 749 446 2,509 451

6 unchanged sentences

Term Debt, Revolving Credit Facility, and Other Notes Payable .

In conjunction with Real Estate Term Loan pay downs during the thirteen weeks ended March 31, 2024 discussed within Note 8.

In conjunction with Real Estate Term Loan pay downs during the twenty-six weeks ended June 30, 2024 discussed within Note 8.

Term Debt, Revolving Credit Facility, and Other Notes Payable and estimated future pay downs, the Company determined that $ 36.7 million of hedged forecasted transactions were not probable of occurring.

1 unchanged sentence

As a result, the Company immediately reclassified $ 0.3 million of accumulated other comprehensive income to earnings which is reflected as a decrease to interest expense within the Consolidated Statements of Operations and Comprehensive Income (Loss).

As of March 31, 2024, $ 36.7 million of the remaining notional of the Company's interest rate swap will be recorded at fair value with mark-to-market adjustments recorded immediately in earnings.

As of and for the thirteen weeks ended March 31, 2024, there were no changes to the hedge accounting related to Term Loan B.

As of June 30, 2024, $ 46.5 million and $ 36.3 million of the notional of the Company's interest rate swap is designated under interest rate hedge accounting and at fair value with mark-to-market adjustments recorded immediately in earnings, respectively.

For the thirteen weeks ended and twenty-six weeks ended June 30, 2024, the Company recognized $ 0.3 million and $ 0.7 million, respectively, as a decrease to interest expense within the Consolidated Statements of Operations and Comprehensive Income (Loss).

As of and for the twenty-six weeks ended June 30, 2024, there were no changes to the hedge accounting related to Term Loan B.

Warrant Liabilities

As of each of March 31, 2024 and December 31, 2023, there were 7,200,000 private placement warrants outstanding which are accounted for as derivative liabilities pursuant to ASC 815-40.

A reconciliation of the changes in the warrant liability during the thirteen weeks ended March 31, 2024 is as follows:

As of each of June 30, 2024 and December 31, 2023, there were 7,200,000 private placement warrants outstanding which are accounted for as derivative liabilities pursuant to ASC 815-40.

A reconciliation of the changes in the warrant liability during the twenty-six weeks ended June 30, 2024 is as follows:

(in thousands)

2 unchanged sentences

Fair value of warrant liabilities as of March 31, 2024 $ 55,080

Gain on remeasurement of warrant liability ( 12,888 )

Fair value of warrant liabilities as of June 30, 2024 $ 42,192

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 $ 97.1 million as of March 31, 2024 and $ 66.7 million as of December 31, 2023.

These purchase commitments totaled $ 93.7 million as of June 30, 2024 and $ 66.7 million as of December 31, 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 $ 0.8 million for the thirteen weeks ended March 31, 2024 and $( 2.7 ) million for the thirteen weeks ended April 2, 2023, respectively.

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 March 31, 2024:

The Company has recorded purchase commitment gains (losses) totaling $ 0.1 million and $ 2.4 million for the thirteen weeks ended June 30, 2024 and July 2, 2023, respectively, and $ 0.9 million and $( 0.3 ) million for the twenty-six weeks ended June 30, 2024 and July 2, 2023, respectively.

(in thousands) Level 1 Level 2 Level 3 Total

22 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 $ 56.3 million and $ 52.8 million at March 31, 2024 and December 31, 2023, respectively, which are accounted for as an off balance sheet arrangement.

The outstanding balance of loans guaranteed that were issued by Bank of America was $ 59.1 million and $ 52.8 million at June 30, 2024 and December 31, 2023, respectively, which are accounted for as an off balance sheet arrangement.

As discussed in Note 6.

Term Debt, Revolving Credit Facility, and Other Notes Payable , the Company also sold notes receivable on its books to Bank of America during fiscal years 2023, and 2024, which the Company partially guarantees.

The outstanding balance of notes purchased by Bank of America at March 31, 2024 and December 31, 2023 was $ 14.0 million and $ 14.8 million, respectively.

Notes Receivable , the Company also sold notes receivable on its books to Bank of America during fiscal years 2023, and 2024, which the Company partially guarantees.

The outstanding balance of notes purchased by Bank of America at June 30, 2024 and December 31, 2023 was $ 12.3 million and $ 14.8 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 corresponding notes receivable also remained on the Company’s Consolidated Balance Sheets.

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.

Additionally, the Company guarantees loans for the purchase of routes made by two other banks.

The outstanding balances of these loans were $ 2.5 million and $ 2.9 million at March 31, 2024 and December 31, 2023, respectively, of which $ 2.0 million and $ 2.2 million was included in the Company's Consolidated Balance Sheets at March 31, 2024 and December 31, 2023, respectively.

The outstanding balances of these loans were $ 2.2 million and $ 2.9 million at June 30, 2024 and December 31, 2023, respectively, of which $ 1.8 million and $ 2.2 million was included in the Company's Consolidated Balance Sheets at June 30, 2024 and December 31, 2023, respectively.

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

2 unchanged sentences

SUPPLEMENTARY CASH FLOW INFORMATION

(in thousands) Thirteen weeks ended March 31, 2024 Thirteen weeks ended April 2, 2023

(in thousands) Twenty-six weeks ended June 30, 2024 Twenty-six weeks ended July 2, 2023

Cash paid for interest $ 34,523 $ 28,613

2 unchanged sentences

Finance lease additions $ 2,307 $ 1,194

The Company presents the gain on the sale of disposals of property and equipment, and the gain on the sale of routes within gain on sale of assets within the Consolidated Statement of Operations and Consolidated Statement of Cash Flows.

The Company is subject to federal and state income taxes with respect to our allocable share of any taxable income or loss of UBH, as well as any standalone income or loss the Company generates.

5 unchanged sentences

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

The Company recorded income tax expense of $ 26.5 million and benefit of $ 2.6 million for the thirteen weeks ended March 31, 2024 and April 2, 2023, respectively.

The effective tax rates for the thirteen weeks ended March 31, 2024 and April 2, 2023 were 91.7 % and 15.3 %, respectively.

The Company recorded income tax benefit of $ 1.3 million and expense of $ 25.2 million for the thirteen and twenty-six weeks ended June 30, 2024, respectively.

Comparably, 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.

The effective tax rates for the thirteen and twenty-six weeks ended June 30, 2024 were ( 5.4 )% and 47.5 %, respectively.

Comparably, the effective tax rates for the thirteen and twenty-six weeks ended July 2, 2023 were 7.8 % and 12.7 %, 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 weeks ended March 31, 2024 was 1.7 % before consideration of any discrete items.

During the thirteen weeks ended March 31, 2024, the effective tax rate was impacted by the sale certain assets and brands to affiliates of Our Home™ and statutory state tax rate changes which resulted in a discrete tax expense of $ 26.1 million and $ 0.5 million, respectively.

The Company’s effective tax rate for the thirteen and twenty-six weeks ended June 30, 2024 are 1.8 % and 1.9 %, respectively before consideration of any discrete items.

During the thirteen and twenty-six weeks ended June 30, 2024, the effective tax rate was impacted by the sale of certain assets and brands to affiliates of Our Home™ and statutory state tax rate changes which resulted in a discrete tax (benefit) and expense of $( 1.5 ) million and $ 25.1 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 March 31, 2024, a significant piece of objective negative evidence evaluated was the twelve-quarter cumulative loss before taxes.

As of June 30, 2024, 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.

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however, given our indefinite lived DTL will only reverse upon sale or liquidation, the Company determined that it was more appropriate to record a valuation allowance against a portion of its DTA’s.

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 March 31, 2024, tax years 2020 through 2024 remain open and subject to examination by the Internal Revenue Service and the majority of the states where the Company has nexus, and tax years 2019 through 2024 remain open and subject to examination in selected states that have a four year statute of limitations.

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 June 30, 2024, tax years 2020 through 2024 remain open and subject to examination by the Internal Revenue Service and the majority of the states where the Company has nexus, and tax years 2019 through 2024 remain open and subject to examination in selected states that have a four-year 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 March 31, 2024 and December 31, 2023.

The Company did not maintain any unrecognized tax benefits as of June 30, 2024 and December 31, 2023.

Tax receivable agreement liability

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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 March 31, 2024 and December 31, 2023, the Company had a liability of $ 24.2 million and $ 24.3 million, respectively, related to its projected obligations under the TRA, which is reflected as current and non-current accrued expenses in the Consolidated Balance Sheets.

LOSS PER SHARE

Basic loss per share is based on the weighted average number of shares of Class A Common Stock issued and outstanding during the periods.

Diluted loss per share is based on the weighted average number of shares of Class A Common Stock issued and outstanding and the effect of all dilutive common stock equivalents and potentially dilutive share-based awards outstanding during the periods.

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

(in thousands, except share data) Thirteen weeks ended March 31, 2024 Thirteen weeks ended April 2, 2023

Net loss attributable to common stockholders $ ( 3,990 ) $ ( 9,127 )

As of June 30, 2024 and December 31, 2023, the Company had a liability of $ 24.3 million and $ 24.3 million, respectively, related to its projected obligations under the TRA, which is reflected as current and non-current accrued expenses in the Consolidated Balance Sheets.

INCOME (LOSS) PER SHARE

Basic income (loss) per share is based on the weighted average number of shares of Class A Common Stock issued and outstanding during the periods.

Diluted income (loss) per share is based on the weighted average number of shares of Class A Common Stock issued and outstanding and the effect of all dilutive common stock equivalents and potentially dilutive share-based awards outstanding during the periods.

The following table reconciles the numerators and denominators used in the computations of both basic and diluted income (loss) per share:

(in thousands, except share data) Thirteen weeks ended June 30, 2024 Thirteen weeks ended July 2, 2023 Twenty-six weeks ended June 30, 2024 Twenty-six weeks ended July 2, 2023

Net income (loss) attributable to common stockholders $ 19,848 $ ( 4,124 ) $ 15,857 $ ( 13,251 )

Weighted average Class A Common Stock shares, basic 81,457,014 81,063,457 81,423,240 81,020,732

Dilutive securities included in diluted earnings per share calculation:

Warrants 2,600,077 — 2,574,638 —

RSUs 539,622 — 436,799 —

PSUs 305,818 — 285,102 —

Stock options 51,881 — 42,883 —

Total dilutive weighted average shares 84,954,412 81,063,457 84,762,662 81,020,732

Basic loss per share $ ( 0.05 ) $ ( 0.11 )

Diluted loss per share $ ( 0.05 ) $ ( 0.11 )

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

Basic income (loss) per share $ 0.24 $ ( 0.05 ) $ 0.19 $ ( 0.16 )

Diluted income (loss) per share $ 0.23 $ ( 0.05 ) $ 0.19 $ ( 0.16 )

Class V Common Stock not subject to (income) loss per share calculation 59,349,000 59,349,000 59,349,000 59,349,000

Net income (loss) attributable to noncontrolling interest $ 5,599 $ ( 4,429 ) $ 11,986 $ ( 9,784 )

The diluted loss per share computation excludes the effect of certain warrants, 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.

Anti-dilutive securities excluded from diluted earnings per share calculation are as follows:

Thirteen weeks ended March 31, 2024 Thirteen weeks ended April 2, 2023

The diluted income (loss) per share computation excludes the effect of certain warrants, 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.

Anti-dilutive securities excluded from diluted income per share calculation are as follows:

Thirteen weeks ended June 30, 2024 Thirteen weeks ended July 2, 2023 Twenty-six weeks ended June 30, 2024 Twenty-six weeks ended July 2, 2023

Warrants — 2,376,961 — 2,288,240

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Stock options

Shares of the Company’s Class V Common Stock do not participate in earnings or losses of the Company and, therefore, are not participating securities.

— 7,009 — 4,233

Shares of the Company’s Class V Common Stock do not participate in income or losses of the Company and, therefore, are not participating securities.

The PSUs and RSUs, were not considered participating securities 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 of the awards, and as such, the dividend is forfeitable.

As of each of March 31, 2024 and December 31, 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.

The net income (loss) attributable to the noncontrolling interest was $ 6.4 million and $( 5.4 ) million for the thirteen weeks ended March 31, 2024 and April 2, 2023, respectively.

As of each of June 30, 2024 and December 31, 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

In April 2024, the Company sold its Berlin, PA and Fitchburg, MA manufacturing facilities and certain related assets for $ 18.5 million.

On April 17, 2024, the Company amended its Term Loan B to refinance in full all of the $ 630.0 million outstanding term loans and reduce the interest rate from the Secured Overnight Financing Rate ("SOFR") rate plus a credit spread adjustment plus 3.00 % to the SOFR rate plus 2.75 %, as well as certain other changes.

Other material terms of the Term Loan B, including the January 2028 maturity date, remain unchanged.

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