Whole Earth Brands, Inc. (the “Company” or “we” or “our”) (Nasdaq:
FREE), a global food company enabling healthier lifestyles
by providing access to premium plant-based sweeteners, flavor
enhancers and other foods through a diverse portfolio of trusted
brands and delicious products, today announced its financial
results for its fourth quarter and full year ended December 31,
2020. The Company also provided fiscal year 2021 guidance and
updated its long-term growth targets.
Irwin D. Simon, Executive Chairman, stated, “We
are delighted by our strategic and operational accomplishments in
our first eight months as a public company. With the completion of
our acquisitions of Swerve during the fourth quarter and of
Wholesome in February, we are poised for a strong 2021, supported
by a portfolio of leading brands, global distribution capabilities,
and a high-quality asset-lite model, while continuing to generate
strong free cash flow and manage our capital allocation model
thoughtfully.”
Albert Manzone, Chief Executive Officer,
commented, “We delivered strong fourth quarter performance as we
saw an acceleration of our Branded CPG segment product revenue
growth with notable market share gains in our natural products
business. We believe we are well-positioned to compete in this
growing market. Our addressable market in the ‘better-for-you
sweetener’ category has sustainable, secular tailwinds that our
Branded CPG portfolio is distinctly able to take advantage of given
our innovative products, distribution strength, and global scale.
Despite certain COVID-19 headwinds that impacted our Flavors &
Ingredients segment, the business continues to produce strong
operating income driven by its diverse end-markets. Looking ahead,
the additions of Swerve and Wholesome significantly strengthen our
leadership position and the integration of both is proceeding as
planned. With a healthy balance sheet, a clear vision for our
future, and an exceptional team, we believe we can achieve
sustainable growth through innovation, continued brand building,
increased market penetration in the U.S. and globally, and a world
class supply chain. As a result, we are excited to increase our
long-term product revenue growth target.”
FOURTH QUARTER 2020
HIGHLIGHTS
Our consolidated financials reflect both
predecessor and successor periods indicative of the June 25, 2020
business combination date. The fourth quarter results discussed
below compare the successor’s 2020 fourth quarter results ended
December 31, 2020 to the predecessor’s 2019 fourth quarter results
ended December 31, 2019.
Additionally, we completed the acquisition of
Swerve on November 10, 2020. Our reported results include Swerve
from that date onwards.
-
Consolidated product revenues were $75.7 million, an increase of
10.1% on a reported basis and an increase of 8.5% on a constant
currency basis, as compared to the prior year fourth quarter.
Included in Q4 2020 revenue was $4.3 million related to the Swerve
acquisition. Excluding Swerve, organic product revenue grew 3.8%,
or increased 2.2% on a constant currency basis, compared to the
prior year fourth quarter.
-
Branded CPG segment product revenues were $53.3 million, an
increase of 24.6% and an increase of 22.1% on a constant currency
basis, as compared to the prior year fourth quarter. Constant
currency results reflect the combination of strong growth in North
America retail and e-commerce channels partially offset by
foodservice channel softness associated with the COVID-19 pandemic.
Excluding Swerve, segment organic product revenue grew 14.5%
compared to the prior year fourth quarter, or increased 12.0% on a
constant currency basis.
-
Flavors & Ingredients segment product revenues were $22.4
million, a decrease of 13.9% in the fourth quarter, driven by
timing within 2020 and COVID-19 impact on customer orders.
-
Reported gross profit was $25.2 million, down from $26.2 million in
the prior year fourth quarter, and gross profit margin of 33.3% in
the fourth quarter of 2020, was down from 38.1% in the prior year
period. Results were negatively influenced by a $3.9 million
non-cash purchase accounting charge, partially offset by a $1.5
million contribution from the Swerve acquisition.
-
Adjusted Gross Profit Margin, when adjusting for all non-cash and
cash adjustments, was 41.8% up from 41.1% in the prior year driven
by favorable product mix in the Branded CPG segment and
productivity.
-
Consolidated operating loss was $6.9 million compared to operating
income of $5.5 million in the prior year and consolidated net loss
was $5.1 million in the fourth quarter of 2020 compared to net
income of $12.9 million in the prior year. These two figures
reflect $5.0 million of M&A transaction costs, $4.4 million of
both ongoing and one-time public company costs and $3.9 million
non-cash purchase accounting adjustments which were not incurred in
the prior year’s predecessor period.
-
Consolidated Adjusted EBITDA increased 5.8% to $14.0 million driven
by revenue growth and productivity, partially offset by public
company costs.
SEGMENT RESULTS
Branded CPG Segment
Branded CPG segment product revenues increased
$10.5 million, or 24.6%, to $53.3 million for the fourth quarter of
2020, compared to $42.8 million for the same period in the prior
year. On a constant currency basis, product revenues increased
22.1% driven by strong retail and e-commerce growth in our North
American business and the addition of Swerve, partially offset by
foodservice softness. Excluding Swerve, segment organic product
revenue grew 14.5% compared to the prior year fourth quarter, an
increase of 12.0% on a constant currency basis.
Operating loss on a GAAP basis was $4.9 million
in the fourth quarter of 2020 compared to operating income, on a
GAAP basis, of $2.6 million for the same period in the prior year.
The decrease was driven primarily by $5.0 million of M&A
transaction costs and $4.4 million of both ongoing and one-time
public company costs that are included in the Company’s Branded CPG
segment.
Flavors & Ingredients
Segment
Flavors & Ingredients segment product
revenues decreased 13.9% to $22.4 million for the fourth quarter of
2020, compared to $26.0 million for the same period in the prior
year. The decrease was primarily driven by timing of shipments
within 2020 and impacts from COVID-19.
Operating loss was $2.0 million in the fourth
quarter of 2020 compared to operating income of $2.9 million in the
prior year period. The decrease was driven by a $3.4 million
non-cash purchase accounting adjustment related to inventory
revaluations and $1.4 million of amortization of intangible assets
resulting from the June 25, 2020 business combination.
FULL YEAR 2020 HIGHLIGHTS
Our consolidated financial statements reflect
both predecessor and successor periods indicative of the June 25,
2020 business combination date. The full year results disclosed
below combine the successor period from June 26, 2020 through
December 31, 2020 with the predecessor period from January 1, 2020
through June 25, 2020. The combined full year results are compared
to the predecessor’s 2019 full year results.
Additionally, we completed the acquisition of
Swerve on November 10, 2020. Our reported results include Swerve
from that date onwards.
-
Consolidated product revenues of $275.5 million, an increase of
1.2% compared to full year 2019; also an increase of 1.2% on a
constant currency basis. Included in full year 2020 revenue was
$4.3 million related to the Swerve acquisition. Excluding Swerve,
organic product revenue decreased 0.3% compared to the full year
2019.
-
Branded CPG segment product revenues of $177.6 million, an increase
of 7.1%; also an increase of 7.1% on a constant currency basis.
Excluding Swerve, segment organic product revenue grew 4.5%
compared to the prior year on both a reported and constant currency
basis. Growth was driven by strong retail and e-commerce category
growth and share gains globally partially offset by softness in the
foodservice channel. Growth was led by North America and Western
Europe. Operating loss was $17.9 million compared to operating
income of $10.3 million in the prior year period. The decrease was
driven by a $11.1 million goodwill asset impairment charge, $9.1
million of ongoing and one-time public company costs, $7.5 million
of business combination transaction costs, $5.0 million of M&A
transaction costs and $4.0 million for a non-cash purchase
accounting adjustment related to inventory which are not comparable
to prior year.
-
Flavors & Ingredients segment product revenues of $97.9
million, a decrease of 7.9% as compared to the prior year. The
decline was driven by lower revenues in the international business.
Operating loss of $26.4 million, compared to operating income of
$19.4 million in the prior year period. The decrease was driven by
$29.5 million of asset impairment charges, $8.6 million of non-cash
purchase accounting adjustment related to inventory revaluations,
$4.2 million of transaction costs and $2.7 million of higher
amortization of intangible assets resulting from the business
combination, all not comparable to prior year.
-
Reported gross profit was $96.3 million, a decrease of $12.2
million from $108.5 million in the prior year, and gross profit
margin was 34.9% in 2020, down from 39.9% in the prior year.
Results were negatively influenced by a $12.6 million non-cash
purchase accounting charges.
-
Adjusted Gross Profit Margin, when adjusting for all non-cash and
cash adjustments, was 42.0% down from 42.6% in the prior year
driven by product mix.
-
Consolidated operating loss was $44.3 million compared to $29.7
million of operating income in the prior year and consolidated net
loss was $42.6 million for full year 2020 compared to net income of
$30.8 million in the prior year. The decreases reflect non-cash
asset impairment charges, purchase accounting adjustments, business
combination transaction related costs and ongoing and one-time
public company expenses which are not comparable to the prior
year’s predecessor period.
-
Consolidated Adjusted EBITDA decreased 4.2% to $54.5 million driven
by new ongoing public company costs, lower product revenues in our
Flavors and Ingredients international business, partially offset by
increased Branded CPG product revenues and productivity.
CASH FLOW & BALANCE
SHEET
The Company generated consolidated cash from
operating activities of $10.5 million and capital expenditures were
$8.0 million during full year 2020.
As of December 31, 2020, the Company had cash
and cash equivalents of $16.9 million and $179.7 million of debt,
net of unamortized debt issuance costs.
Subsequent to the end of fourth quarter, on
February 5, 2021, the Company entered into an amended and restated
credit agreement, in part, to finance its acquisition of WSO
Investments, Inc. the holding company for Wholesome Sweeteners
Incorporated (“Wholesome”). The new agreement provides for a new
$75 million five-year revolving credit facility, and a $375 million
seven-year senior secured first-lien term loan B.
Reducing balance sheet leverage is a corporate priority and the
Company estimates that it will achieve a ratio of net debt to
Adjusted EBITDA of approximately 4.0x by December 31,
2021.
RECENT STRATEGIC
ACQUISITIONS
During the fourth quarter, on November 10, 2020,
the Company closed on its acquisition of Swerve, L.L.C and Swerve
IP, L.L.C. (collectively, “Swerve”). Swerve is a marketer of the
“Ultimate Sugar Replacement” and provides a key growth platform for
the Company to expand its existing offerings in the alternative
better-for-you sweetener space, which complements its existing
sweetener portfolio.
As previously announced on February 8, 2021, the
Company closed on its acquisition of Wholesome, the #1 organic
sweetener brand in North America.
The acquisition of Wholesome and its previous
purchase of Swerve, a rapidly growing manufacturer and marketer of
a portfolio of zero sugar, keto-friendly, and plant-based
sweeteners and baking mixes, have doubled the Company’s North
American market share in only seven months since the closing of its
business combination on June 25, 2020. These acquisitions
significantly move the Company’s portfolio mix toward natural
sweeteners, which now represent approximately 88% of its North
American Branded CPG business.
OUTLOOK
The Company is introducing its outlook for full
year 2021, including the impact of its recent acquisitions of
Swerve and Wholesome. The outlook includes expectations for growth
on a proforma organic basis and margins for the combined business.
The Company defines proforma organic growth to be as if the Company
owned both Swerve and Wholesome for the full years 2020 and 2021.
The Company’s 2021 outlook is as follows:
- Net Product Revenues:
$493 million to $505 million (representing reported growth of
greater than 78%, and proforma organic growth of 3% to 5%)
- Adjusted EBITDA: $82
million to $85 million (representing reported growth of greater
than 50%, and proforma organic growth of 3% to 5%)
- Adjusted Gross Profit
Margin: 34% to 35% of product revenues
- Adjusted EBITDA Margin:
Approximately 17% of product revenues
- Capital Expenditures:
$10 million to $12 million
- Tax Rate: Approximately
23%
The Company also updated its 3 to 5 year
compound growth targets, which reflects the impact of its recent
acquisitions, as follows:
- Net Product Revenues Growth: Mid single Digits
- Adjusted EBITDA Growth: Mid to High single
Digits
- Adjusted Gross Profit Margin: 34% to 36%
- Adjusted EBITDA Margin: 17% to 19%
- Capital Expenditures: Approximately 1.5% of product
revenues
- Tax Rate: Approximately 23%
CONFERENCE CALL DETAILS
The Company will host a conference call and
webcast to review its fourth quarter and full year results today,
Tuesday, March 16, 2021 at 8:30am EDT. The conference call can be
accessed live over the phone by dialing (877) 705-6003 or for
international callers by dialing (201) 493-6725. A replay of the
call will be available until March 30, 2021 by dialing (844)
512-2921 or for international callers by dialing (412) 317-6671;
the passcode is 13716176.
The live audio webcast of the conference call
will be accessible in the News & Events section on the
Company's Investor Relations website at
investor.wholeearthbrands.com. An archived replay of the webcast
will also be available shortly after the live event has
concluded.
About Whole Earth Brands
Whole Earth Brands is a global food company
enabling healthier lifestyles and providing access to premium
plant-based sweeteners, flavor enhancers and other foods through
our diverse portfolio of trusted brands and delicious products,
including Whole Earth Sweetener®, Wholesome®, Swerve®, Pure Via®,
Equal® and Canderel®. With food playing a central role in people’s
health and wellness, Whole Earth Brands’ innovative product
pipeline addresses the growing consumer demand for more dietary
options, baking ingredients and taste profiles. Our world-class
global distribution network is the largest provider of plant-based
sweeteners in more than 100 countries with a vision to expand
our portfolio to responsibly meet local preferences. We
are committed to helping people enjoy life’s everyday moments and
the celebrations that bring us together. For more information on
how we “Open a World of Goodness®,” please visit
www.WholeEarthBrands.com.
Forward-Looking Statements
This press release contains forward-looking
statements (including within the meaning of the Private Securities
Litigation Reform Act of 1995) concerning Whole Earth Brands, Inc.
and other matters. These statements may discuss goals, intentions
and expectations as to future plans, trends, events, results of
operations or financial condition, or otherwise, based on current
beliefs of management, as well as assumptions made by, and
information currently available to, management.
Forward-looking statements may be accompanied by
words such as “achieve,” “aim,” “anticipate,” “believe,” “can,”
“continue,” “could,” “drive,” “estimate,” “expect,” “forecast,”
“future,” “guidance,” “grow,” “improve,” “increase,” “intend,”
“may,” “outlook,” “plan,” “possible,” “potential,” “predict,”
“project,” “should,” “target,” “will,” “would,” or similar words,
phrases or expressions. Factors that could cause actual results to
differ materially from those in the forward-looking statements
include, but are not limited to, the Company’s ability to integrate
Wholesome and Swerve and achieve the anticipated benefits of the
transaction in a timely manner or at all; the extent of the impact
of the COVID-19 pandemic, including the duration, spread, severity,
and any recurrence of the COVID-19 pandemic, the duration and scope
of related government orders and restrictions, the impact on our
employees, and the extent of the impact of the COVID-19 pandemic on
overall demand for the Company’s products; local, regional,
national, and international economic conditions that have
deteriorated as a result of the COVID-19 pandemic, including the
risks of a global recession or a recession in one or more of the
Company’s key markets, and the impact they may have on the Company
and its customers and management’s assessment of that impact;
extensive and evolving government regulations that impact the way
the Company operates; and the impact of the COVID-19 pandemic on
the Company’s suppliers, including disruptions and inefficiencies
in the supply chain.
These forward-looking statements are subject to
risks, uncertainties and other factors, many of which are outside
of the Company’s control, which could cause actual results to
differ materially from the results contemplated by the
forward-looking statements. These statements are subject to the
risks and uncertainties indicated from time to time in the
documents the Company files (or furnishes) with the U.S. Securities
and Exchange Commission.
You are cautioned not to place undue reliance
upon any forward-looking statements, which are based only on
information currently available to the Company and speak only as of
the date made. The Company undertakes no commitment to publicly
update or revise the forward-looking statements, whether written or
oral that may be made from time to time, whether as a result of new
information, future events or otherwise, except as required by
law.
Contacts:Investor Relations
Contact:Whole Earth
Brands312-840-5001investor@wholeearthbrands.com
ICRJeff
Sonnek646-277-1263jeff.sonnek@icrinc.com
Media Relations Contact:Wyecomm Penny
Kozakos202-390-4409Penny.Kozakos@wyecomm.com
Whole Earth Brands,
Inc.Consolidated and Combined Balance
Sheets(In thousands of dollars, except for share
and per share data)
|
(Successor) |
|
|
(Predecessor) |
|
December 31, 2020 |
|
|
December 31, 2019 |
Assets |
|
|
|
|
Current
Assets |
|
|
|
|
Cash and cash equivalents |
$ |
16,898 |
|
|
|
$ |
10,395 |
|
Accounts receivable (net of allowances of $955 and $2,832,
respectively) |
56,423 |
|
|
|
55,031 |
|
Inventories |
111,699 |
|
|
|
121,129 |
|
Prepaid expenses and other current assets |
5,045 |
|
|
|
7,283 |
|
Total current assets |
190,065 |
|
|
|
193,838 |
|
|
|
|
|
|
Property, Plant and
Equipment, net |
47,285 |
|
|
|
20,340 |
|
|
|
|
|
|
Other
Assets |
|
|
|
|
Operating lease right-of-use assets |
12,193 |
|
|
|
— |
|
Goodwill |
153,537 |
|
|
|
130,870 |
|
Other intangible assets, net |
184,527 |
|
|
|
251,243 |
|
Deferred tax assets, net |
2,671 |
|
|
|
1,368 |
|
Other assets |
6,260 |
|
|
|
2,192 |
|
Total Assets |
$ |
596,538 |
|
|
|
$ |
599,851 |
|
Whole Earth Brands,
Inc.Consolidated and Combined Balance
Sheets(In thousands of dollars, except for share
and per share data)
|
(Successor) |
|
|
(Predecessor) |
|
December 31, 2020 |
|
|
December 31, 2019 |
Liabilities and
Stockholders’ Equity |
|
|
|
|
Current
Liabilities |
|
|
|
|
Accounts payable |
$ |
25,200 |
|
|
|
$ |
26,240 |
|
Accrued expenses and other current liabilities |
29,029 |
|
|
|
28,040 |
|
Current portion of operating lease liabilities |
3,623 |
|
|
|
— |
|
Current portion of long-term debt |
7,000 |
|
|
|
— |
|
Total current liabilities |
64,852 |
|
|
|
54,280 |
|
Non-Current
Liabilities |
|
|
|
|
Long-term debt |
172,662 |
|
|
|
— |
|
Due to related party |
— |
|
|
|
8,400 |
|
Deferred tax liabilities, net |
23,297 |
|
|
|
31,538 |
|
Operating lease liabilities, less current portion |
11,324 |
|
|
|
— |
|
Other liabilities |
15,557 |
|
|
|
17,883 |
|
Total Liabilities |
287,692 |
|
|
|
112,101 |
|
Commitments and
Contingencies |
— |
|
|
|
— |
|
Stockholders’
Equity |
|
|
|
|
Preferred shares, $0.0001 par value; 1,000,000 shares authorized;
none issued and outstanding |
— |
|
|
|
— |
|
Common stock, $0.0001 par value; 220,000,000 shares authorized;
38,426,669 shares issued andoutstanding |
4 |
|
|
|
— |
|
Additional paid-in capital |
325,679 |
|
|
|
— |
|
Accumulated deficit |
(25,442 |
) |
|
|
— |
|
Accumulated other comprehensive income |
8,605 |
|
|
|
— |
|
Net parent investment |
— |
|
|
|
487,750 |
|
Total stockholders’ equity |
308,846 |
|
|
|
487,750 |
|
Total Liabilities and Stockholders’ Equity |
$ |
596,538 |
|
|
|
$ |
599,851 |
|
Whole Earth Brands,
Inc.Consolidated and Combined Statements of
Operations(In thousands of dollars, except for
share and per share data)
|
(Successor) |
|
|
(Predecessor) |
|
Three MonthsEndedDecember
31,2020 |
|
From June 26, 2020 toDecember
31,2020 |
|
|
From January 1, 2020 toJune 25,
2020 |
|
Three MonthsEndedDecember
31,2019 |
|
Year EndedDecember 31,2019 |
Product revenues, net |
$ |
75,688 |
|
|
$ |
147,168 |
|
|
|
$ |
128,328 |
|
|
$ |
68,769 |
|
|
$ |
272,123 |
|
Cost of goods sold |
50,520 |
|
|
101,585 |
|
|
|
77,627 |
|
|
42,597 |
|
|
163,634 |
|
Gross profit |
25,168 |
|
|
45,583 |
|
|
|
50,701 |
|
|
26,172 |
|
|
108,489 |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
27,789 |
|
|
44,616 |
|
|
|
43,355 |
|
|
16,876 |
|
|
65,896 |
|
Amortization of intangible
assets |
3,180 |
|
|
6,021 |
|
|
|
4,927 |
|
|
2,756 |
|
|
10,724 |
|
Asset impairment charges |
— |
|
|
— |
|
|
|
40,600 |
|
|
— |
|
|
— |
|
Restructuring and other
expenses |
1,052 |
|
|
1,052 |
|
|
|
— |
|
|
1,043 |
|
|
2,193 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income |
(6,853 |
) |
|
(6,106 |
) |
|
|
(38,181 |
) |
|
5,497 |
|
|
29,676 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
(2,210 |
) |
|
(4,371 |
) |
|
|
(238 |
) |
|
(158 |
) |
|
(500 |
) |
Other (expense) income,
net |
(346 |
) |
|
(578 |
) |
|
|
801 |
|
|
(164 |
) |
|
(830 |
) |
(Loss) income before income
taxes |
(9,409 |
) |
|
(11,055 |
) |
|
|
(37,618 |
) |
|
5,175 |
|
|
28,346 |
|
Benefit for income taxes |
(4,312 |
) |
|
(2,618 |
) |
|
|
(3,482 |
) |
|
(7,694 |
) |
|
(2,466 |
) |
Net (loss) income |
$ |
(5,097 |
) |
|
$ |
(8,437 |
) |
|
|
$ |
(34,136 |
) |
|
$ |
12,869 |
|
|
$ |
30,812 |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share – Basic and
diluted |
$ |
(0.13 |
) |
|
$ |
(0.22 |
) |
|
|
|
|
|
|
|
Whole Earth Brands,
Inc.Consolidated and Combined Statements of Cash
Flows(In thousands of dollars)
|
(Successor) |
|
|
(Predecessor) |
|
From June 26, 2020to December 31,2020 |
|
|
From January 1,2020 to June 25,
2020 |
|
Year EndedDecember 31, 2019 |
|
Year EndedDecember 31, 2018 |
Operating
activities |
|
|
|
|
|
|
|
|
Net (loss) income |
$ |
(8,437 |
) |
|
|
$ |
(34,136 |
) |
|
$ |
30,812 |
|
|
$ |
20,841 |
|
Adjustments to reconcile net (loss) income to net cash
provided by operating activities: |
|
|
|
|
|
|
|
|
Stock-based compensation |
1,262 |
|
|
|
— |
|
|
— |
|
|
— |
|
Depreciation |
1,652 |
|
|
|
1,334 |
|
|
3,031 |
|
|
3,591 |
|
Amortization of intangible assets |
6,021 |
|
|
|
4,927 |
|
|
10,724 |
|
|
11,111 |
|
Deferred income taxes |
(2,842 |
) |
|
|
(5,578 |
) |
|
(10,500 |
) |
|
(6,060 |
) |
Asset impairment charges |
— |
|
|
|
40,600 |
|
|
— |
|
|
— |
|
Pension |
(169 |
) |
|
|
126 |
|
|
(1,648 |
) |
|
1,658 |
|
Amortization of inventory fair value adjustments |
12,613 |
|
|
|
— |
|
|
— |
|
|
— |
|
Changes in current assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
(4,554 |
) |
|
|
7,726 |
|
|
1,311 |
|
|
2,488 |
|
Inventories |
(5,305 |
) |
|
|
3,576 |
|
|
2,004 |
|
|
(692 |
) |
Prepaid expenses and other current assets |
(2,066 |
) |
|
|
3,330 |
|
|
(3,097 |
) |
|
236 |
|
Accounts payable, accrued liabilities and income taxes |
(7,939 |
) |
|
|
507 |
|
|
(3,057 |
) |
|
269 |
|
Other, net |
319 |
|
|
|
(2,504 |
) |
|
2,085 |
|
|
362 |
|
Net cash (used in) provided by
operating activities |
(9,445 |
) |
|
|
19,908 |
|
|
31,665 |
|
|
33,804 |
|
|
|
|
|
|
|
|
|
|
Investing
activities |
|
|
|
|
|
|
|
|
Capital expenditures |
(4,489 |
) |
|
|
(3,532 |
) |
|
(4,037 |
) |
|
(4,039 |
) |
Acquisitions, net of cash
acquired |
(456,508 |
) |
|
|
— |
|
|
— |
|
|
— |
|
Proceeds from sale of fixed
assets |
— |
|
|
|
— |
|
|
— |
|
|
1,858 |
|
Transfer from trust
account |
178,875 |
|
|
|
— |
|
|
— |
|
|
— |
|
Net cash used in investing
activities |
(282,122 |
) |
|
|
(3,532 |
) |
|
(4,037 |
) |
|
(2,181 |
) |
|
|
|
|
|
|
|
|
|
Financing
activities |
|
|
|
|
|
|
|
|
Proceeds from revolving credit
facility |
47,855 |
|
|
|
3,500 |
|
|
1,500 |
|
|
7,500 |
|
Repayments of revolving credit
facility |
— |
|
|
|
(8,500 |
) |
|
— |
|
|
(600 |
) |
Long-term borrowings |
140,000 |
|
|
|
— |
|
|
— |
|
|
— |
|
Repayments of long-term
borrowings |
(3,500 |
) |
|
|
— |
|
|
— |
|
|
— |
|
Debt issuance costs |
(7,139 |
) |
|
|
— |
|
|
— |
|
|
— |
|
Proceeds from sale of common
stock and warrants |
75,000 |
|
|
|
— |
|
|
— |
|
|
— |
|
Funding to Parent, net |
— |
|
|
|
(11,924 |
) |
|
(25,442 |
) |
|
(35,432 |
) |
Net cash provided by (used in)
financing activities |
252,216 |
|
|
|
(16,924 |
) |
|
(23,942 |
) |
|
(28,532 |
) |
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
714 |
|
|
|
215 |
|
|
(496 |
) |
|
(24 |
) |
Net change in cash and
cash equivalents |
(38,637 |
) |
|
|
(333 |
) |
|
3,190 |
|
|
3,067 |
|
Cash and cash equivalents,
beginning of period |
55,535 |
|
|
|
10,395 |
|
|
7,205 |
|
|
4,138 |
|
Cash and cash equivalents, end
of period |
$ |
16,898 |
|
|
|
$ |
10,062 |
|
|
$ |
10,395 |
|
|
$ |
7,205 |
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information |
|
|
|
|
|
|
|
|
Interest paid |
$ |
3,328 |
|
|
|
$ |
798 |
|
|
$ |
— |
|
|
$ |
— |
|
Taxes paid, net of
refunds |
$ |
3,110 |
|
|
|
$ |
2,244 |
|
|
$ |
4,571 |
|
|
$ |
5,175 |
|
Whole Earth Brands, Inc.
Reconciliation of GAAP and Non-GAAP Financial
Measures (Unaudited)
The Company reports its financial results in
accordance with accounting principles generally accepted in the
United States (“GAAP”). However, management believes that also
presenting certain non-GAAP financial measures provides additional
information to facilitate the comparison of the Company’s
historical operating results and trends in its underlying operating
results, and provides additional transparency on how the Company
evaluates its business. Management uses these non-GAAP financial
measures in making financial, operating and planning decisions and
in evaluating the Company’s performance. The Company also believes
that presenting these measures allows investors to view its
performance using the same measures that the Company uses in
evaluating its financial and business performance and trends. The
Company considers quantitative and qualitative factors in assessing
whether to adjust for the impact of items that may be significant
or that could affect an understanding of its ongoing financial and
business performance and trends. The adjustments generally fall
within the following categories: constant currency adjustments,
intangible asset non-cash impairments, purchase accounting charges,
transaction related costs, long-term incentive expense, non-cash
pension expenses, severance and related expenses associated with a
restructuring, public company readiness, M&A transaction
expenses and other one-time items affecting comparability of
operating results. See below for a description of adjustments to
the Company’s U.S. GAAP financial measures included herein.
Non-GAAP information should be considered as supplemental in nature
and is not meant to be considered in isolation or as a substitute
for the related financial information prepared in accordance with
U.S. GAAP. In addition, the Company’s non-GAAP financial measures
may not be the same as or comparable to similar non-GAAP measures
presented by other companies.
DEFINITIONS OF THE COMPANY’S NON-GAAP
FINANCIAL MEASURES
The Company’s non-GAAP financial measures and
corresponding metrics reflect how the Company evaluates its
operating results currently and provide improved comparability of
operating results. As new events or circumstances arise, these
definitions could change. When these definitions change, the
Company provides the updated definitions and presents the related
non-GAAP historical results on a comparable basis. When items no
longer impact the Company’s current or future presentation of
non-GAAP operating results, the Company removes these items from
its non-GAAP definitions.
The following is a list of non-GAAP financial
measures which the Company has discussed or expects to discuss in
the future:
-
Constant Currency Presentation: We evaluate our product revenue
results on both a reported and a constant currency basis. The
constant currency presentation, which is a non-GAAP measure,
excludes the impact of fluctuations in foreign currency exchange
rates. We believe providing constant currency information provides
valuable supplemental information regarding our product revenue
results, thereby facilitating period-to-period comparisons of our
business performance and is consistent with how management
evaluates the Company's performance. We calculate constant currency
percentages by converting our current period local currency product
revenue results using the prior period exchange rates and comparing
these adjusted amounts to our current period reported product
revenues.
-
Adjusted EBITDA: We define Adjusted EBITDA as net income or loss
from our consolidated statements of operations before interest
income and expense, income taxes, depreciation and amortization, as
well as certain other items that arise outside of the ordinary
course of our continuing operations specifically described below:
-
Asset impairment charges: We exclude the impact of charges related
to the impairment of goodwill and other long-lived intangible
assets. Impairment charges during the calendar year 2020 were
incurred only during the predecessor period. We believe that the
exclusion of these impairments, which are non-cash, allows for more
meaningful comparisons of operating results to peer companies. We
believe that this increases period-to-period comparability and is
useful to evaluate the performance of the total company.
-
Purchase accounting adjustments: We exclude the impact of purchase
accounting adjustments, including the revaluation of inventory at
the time of the business combination. These adjustments are
non-cash and we believe that the adjustments of these items more
closely correlate with the sustainability of our operating
performance.
-
Transaction-related expenses: We exclude transaction-related
expenses including transaction bonuses that were paid for by the
seller of the businesses acquired by the Company on June 25, 2020.
We believe that the adjustments of these items more closely
correlate with the sustainability of our operating
performance.
-
Long-term incentive plan: We exclude the impact of costs relating
to the long-term incentive plan. We believe that the adjustments of
these items more closely correlate with the sustainability of our
operating performance.
-
Non-cash pension expenses: We exclude non-cash pension
expenses/credits related to closed, defined pension programs of the
Company. We believe that the adjustments of these items more
closely correlate with the sustainability of our operating
performance.
-
Severance and related expenses: We exclude employee severance and
associated expenses related to roles that have been eliminated or
reduced in scope as a productivity measure taken by the Company. We
believe that the adjustments of these items more closely correlate
with the sustainability of our operating performance.
-
Public company readiness: We exclude non-recurring organization and
consulting costs incurred to establish required public company
capabilities. We believe that the adjustments of these items more
closely correlate with the sustainability of our operating
performance.
-
Brand Introduction expenses: To measure operating performance, we
exclude the Company’s sampling program costs with Starbucks. We
believe the exclusion of such amounts allows management and the
users of the financial statements to better understand our
financial results.
-
Restructuring: To measure operating performance, we exclude
restructuring costs. We believe that the adjustments of these items
more closely correlate with the sustainability of our operating
performance.
-
M&A transaction expenses: We exclude expenses directly related
to the acquisition of businesses after the business combination on
June 25, 2020. We believe that the adjustments of these items more
closely correlate with the sustainability of our operating
performance.
-
Other items: To measure operating performance, we exclude certain
expenses and include certain gains that we believe are operational
in nature. We believe the exclusion or inclusion of such amounts
allows management and the users of the financial statements to
better understand our financial results.
Adjusted EBITDA is not a presentation made in
accordance with GAAP, and our use of the term Adjusted EBITDA may
vary from the use of similarly-titled measures by others in our
industry due to the potential inconsistencies in the method of
calculation and differences due to items subject to interpretation.
Adjusted EBITDA margin is Adjusted EBITDA for a particular period
expressed as a percentage of product revenues for that period.
We use Adjusted EBITDA to measure our
performance from period to period both at the consolidated level as
well as within our operating segments, to evaluate and fund
incentive compensation programs and to compare our results to those
of our competitors. In addition to Adjusted EBITDA being a
significant measure of performance for management purposes, we also
believe that this presentation provides useful information to
investors regarding financial and business trends related to our
results of operations and that when non-GAAP financial information
is viewed with GAAP financial information, investors are provided
with a more meaningful understanding of our ongoing operating
performance.
Adjusted EBITDA should not be considered as an
alternative to net income or loss, operating income, cash flows
from operating activities or any other performance measures derived
in accordance with GAAP as measures of operating performance or
cash flows as measures of liquidity. Adjusted EBITDA has important
limitations as an analytical tool and should not be considered in
isolation or as a substitute for analysis of our results as
reported under GAAP.
The Company cannot reconcile its expected
Adjusted EBITDA to Net Income under “Outlook” without unreasonable
effort because certain items that impact net income and other
reconciling metrics are out of the Company’s control and/or cannot
be reasonably predicted at this time. These items include, but are
not limited to, share-based compensation expense, impairment of
assets, acquisition-related charges and COVID-19 related expenses.
These items are uncertain, depend on various factors, and could
have a material impact on GAAP reported results for the guidance
period.
Adjusted Gross Profit Margin: We define Adjusted
Gross Profit Margin as Gross Profit excluding all cash and non-cash
adjustments, impacting Cost of Goods Sold, included in the Adjusted
EBITDA reconciliation, as a percentage of Product Revenues, net.
Such adjustments include: depreciation, purchase accounting
adjustments, long term incentives and other items adjusted by
management to better understand our financial results.
The Company cannot reconcile its expected
Adjusted Gross Profit Margin to Gross Profit Margin under “Outlook”
without unreasonable effort because certain items that impact Gross
Profit Margin and other reconciling metrics are out of the
Company’s control and/or cannot be reasonably predicted at this
time. These items include, but are not limited to, share-based
compensation expense, impairment of assets, acquisition-related
charges and COVID-19 related expenses. These items are uncertain,
depend on various factors, and could have a material impact on GAAP
reported results for the guidance period.
Whole Earth Brands,
Inc.Adjusted EBITDA
reconciliation(In thousands of dollars)
(Unaudited)
|
(Successor) |
|
|
(Predecessor) |
|
Three MonthsEnded |
|
From |
|
|
From |
|
Three MonthsEnded |
|
Twelve MonthsEnded |
December 31,2020 |
June 26, 2020 toDecember 31,2020 |
January 1, 2020 toJune 25, 2020 |
December 31,2019 |
December 31,2019 |
Product revenues, net |
|
75,688 |
|
|
|
147,168 |
|
|
|
|
128,328 |
|
|
|
68,769 |
|
|
|
272,123 |
|
Net (loss)
income |
$ |
(5,097 |
) |
|
$ |
(8,437 |
) |
|
|
$ |
(34,136 |
) |
|
$ |
12,869 |
|
|
$ |
30,812 |
|
Benefit for
income taxes |
|
(4,312 |
) |
|
|
(2,618 |
) |
|
|
|
(3,482 |
) |
|
|
(7,694 |
) |
|
|
(2,466 |
) |
Other
expense (income), net |
|
346 |
|
|
|
578 |
|
|
|
|
(801 |
) |
|
|
164 |
|
|
|
830 |
|
Interest
expense, net |
|
2,210 |
|
|
|
4,371 |
|
|
|
|
238 |
|
|
|
158 |
|
|
|
500 |
|
Operating
(loss) income |
|
(6,853 |
) |
|
|
(6,106 |
) |
|
|
|
(38,181 |
) |
|
|
5,497 |
|
|
|
29,676 |
|
Depreciation |
|
855 |
|
|
|
1,652 |
|
|
|
|
1,334 |
|
|
|
794 |
|
|
|
3,023 |
|
Amortization
of intangible assets |
|
3,180 |
|
|
|
6,021 |
|
|
|
|
4,927 |
|
|
|
2,756 |
|
|
|
10,724 |
|
Asset
impairment charges |
|
- |
|
|
|
- |
|
|
|
|
40,600 |
|
|
|
- |
|
|
|
- |
|
Purchase
accounting adjustments |
|
3,911 |
|
|
|
12,613 |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Transaction
related expenses |
|
431 |
|
|
|
1,314 |
|
|
|
|
10,348 |
|
|
|
- |
|
|
|
- |
|
Long term
incentive plan |
|
1,798 |
|
|
|
2,155 |
|
|
|
|
562 |
|
|
|
(9 |
) |
|
|
1,151 |
|
Non-cash
pension expense |
|
98 |
|
|
|
130 |
|
|
|
|
335 |
|
|
|
1,178 |
|
|
|
2,767 |
|
Severance
and related expenses |
|
425 |
|
|
|
791 |
|
|
|
|
1,105 |
|
|
|
1,115 |
|
|
|
1,411 |
|
Public
company readiness |
|
2,370 |
|
|
|
4,583 |
|
|
|
|
569 |
|
|
|
- |
|
|
|
- |
|
Brand
introduction costs |
|
- |
|
|
|
229 |
|
|
|
|
1,131 |
|
|
|
885 |
|
|
|
3,463 |
|
Restructuring |
|
1,052 |
|
|
|
1,052 |
|
|
|
|
- |
|
|
|
1,043 |
|
|
|
2,193 |
|
M&A
transaction expenses |
|
4,985 |
|
|
|
5,068 |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Other
items |
|
1,739 |
|
|
|
1,671 |
|
|
|
|
634 |
|
|
|
(34 |
) |
|
|
2,493 |
|
Adjusted
EBITDA |
$ |
13,990 |
|
|
$ |
31,171 |
|
|
|
$ |
23,366 |
|
|
$ |
13,226 |
|
|
$ |
56,900 |
|
|
|
|
|
|
|
|
|
|
|
|
Whole Earth
Brands, Inc.Constant Currency Product Revenues,
Net Reconciliation(In thousands of
dollars)
$ in Thousands |
Three Months Ended December 31, |
|
|
|
|
$ change |
% change |
|
Product revenues, net |
2020 (1) |
|
2019 |
|
Reported |
|
|
ConstantDollar |
|
|
ForeignExchange (2) |
|
Reported |
|
ConstantDollar |
|
ForeignExchange |
|
Branded CPG |
$ |
53,300 |
|
$ |
42,765 |
|
$ |
10,535 |
|
|
$ |
9,455 |
|
|
$ |
1,080 |
|
24.6 |
% |
|
22.1 |
% |
|
2.5 |
% |
|
Flavors & Ingredients |
$ |
22,388 |
|
$ |
26,004 |
|
$ |
(3,616 |
) |
|
$ |
(3,616 |
) |
|
$ |
- |
|
-13.9 |
% |
|
-13.9 |
% |
|
0.0 |
% |
|
Combined |
$ |
75,688 |
|
$ |
68,769 |
|
$ |
6,919 |
|
|
$ |
5,839 |
|
|
$ |
1,080 |
|
10.1 |
% |
|
8.5 |
% |
|
1.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
Swerve acquisition |
$ |
4,320 |
|
$ |
- |
|
$ |
4,320 |
|
|
$ |
4,320 |
|
|
$ |
- |
nm |
nm |
nm |
|
|
|
|
|
|
|
|
|
|
|
Organic Product revenues, net |
|
|
|
|
|
|
|
|
|
|
Branded CPG |
$ |
48,980 |
|
$ |
42,765 |
|
$ |
6,215 |
|
|
$ |
5,135 |
|
|
$ |
1,080 |
|
14.5 |
% |
|
12.0 |
% |
|
2.5 |
% |
|
Flavors & Ingredients |
$ |
22,388 |
|
$ |
26,004 |
|
$ |
(3,616 |
) |
|
$ |
(3,616 |
) |
|
$ |
- |
|
-13.9 |
% |
|
-13.9 |
% |
|
0.0 |
% |
|
Combined |
$ |
71,368 |
|
$ |
68,769 |
|
$ |
2,599 |
|
|
$ |
1,519 |
|
|
$ |
1,080 |
|
3.8 |
% |
|
2.2 |
% |
|
1.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ in Thousands |
Twelve Months Ended December 31, |
|
|
|
|
$ change |
% change |
|
Product revenues, net |
2020 (1) |
|
2019 |
|
Reported |
|
|
ConstantDollar |
|
|
ForeignExchange (2) |
|
Reported |
|
ConstantDollar |
|
ForeignExchange |
|
Branded CPG |
$ |
177,606 |
|
$ |
165,863 |
|
$ |
11,743 |
|
|
$ |
11,703 |
|
|
$ |
40 |
|
7.1 |
% |
|
7.1 |
% |
|
0.0 |
% |
|
Flavors & Ingredients |
$ |
97,890 |
|
$ |
106,260 |
|
$ |
(8,370 |
) |
|
$ |
(8,370 |
) |
|
$ |
- |
|
-7.9 |
% |
|
-7.9 |
% |
|
0.0 |
% |
|
Combined |
$ |
275,496 |
|
$ |
272,123 |
|
$ |
3,373 |
|
|
$ |
3,333 |
|
|
$ |
40 |
|
1.2 |
% |
|
1.2 |
% |
|
0.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
Swerve acquisition |
$ |
4,320 |
|
$ |
- |
|
$ |
4,320 |
|
|
$ |
4,320 |
|
|
$ |
- |
nm |
nm |
nm |
|
|
|
|
|
|
|
|
|
|
|
Organic Product revenues, net |
|
|
|
|
|
|
|
|
|
|
Branded CPG |
$ |
173,286 |
|
$ |
165,863 |
|
$ |
7,423 |
|
|
$ |
7,383 |
|
|
$ |
40 |
|
4.5 |
% |
|
4.5 |
% |
|
0.0 |
% |
|
Flavors & Ingredients |
$ |
97,890 |
|
$ |
106,260 |
|
$ |
(8,370 |
) |
|
$ |
(8,370 |
) |
|
$ |
- |
|
-7.9 |
% |
|
-7.9 |
% |
|
0.0 |
% |
|
Combined |
$ |
271,176 |
|
$ |
272,123 |
|
$ |
(947 |
) |
|
$ |
(987 |
) |
|
$ |
40 |
|
-0.3 |
% |
|
-0.4 |
% |
|
0.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
(1) Product revenues,
net for the three and twelve months ended December 31, 2020 combine
the successor and predecessor periods for better comparability to
the 2019 periods. |
|
(2) The "foreign
exchange" amounts presented, reflect the estimated impact from
fluctuations in foreign currerncy exchange rates on product
revenues. |
|
Whole Earth Brands,
Inc.GAAP to Adjusted EBITDA
Reconciliation(In thousands of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
$ in
Thousands |
Three Months Ended December 31, 2019 |
|
Three Months Ended December 31, 2020 |
|
|
|
GAAP |
Non-cashadj. |
Cash adj. |
AdjustedEBITDA |
|
GAAP |
Non-cashadj. |
Cash adj. |
AdjustedEBITDA |
|
Changevs. 2019 |
Product revenues, net |
$ |
68,769 |
|
$ |
- |
|
$ |
- |
|
$ |
68,769 |
|
|
$ |
75,688 |
|
$ |
- |
|
$ |
- |
|
$ |
75,688 |
|
|
10.1% |
|
Cost of goods sold |
|
42,597 |
|
|
(794 |
) |
|
(1,307 |
) |
|
40,496 |
|
|
|
50,520 |
|
|
(5,035 |
) |
|
(1,445 |
) |
|
44,040 |
|
|
8.8% |
|
Gross profit |
|
26,172 |
|
|
794 |
|
|
1,307 |
|
|
28,273 |
|
|
|
25,168 |
|
|
5,035 |
|
|
1,445 |
|
|
31,648 |
|
|
11.9% |
|
Gross profit margin % |
|
38.1% |
|
|
- |
|
|
- |
|
|
41.1% |
|
|
|
33.3% |
|
|
- |
|
|
- |
|
|
41.8% |
|
|
0.7% |
|
Selling, general and administrative expenses |
|
16,876 |
|
|
(1,178 |
) |
|
(651 |
) |
|
15,047 |
|
|
|
27,789 |
|
|
(1,091 |
) |
|
(9,040 |
) |
|
17,658 |
|
|
17.4% |
|
Amortization of intangible assets |
|
2,756 |
|
|
(2,756 |
) |
|
- |
|
|
- |
|
|
|
3,180 |
|
|
(3,180 |
) |
|
- |
|
|
- |
|
|
- |
|
Asset impairment charges |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Restructuring and other non-recurring expenses |
|
1,043 |
|
|
- |
|
|
(1,043 |
) |
|
- |
|
|
|
1,052 |
|
|
- |
|
|
(1,052 |
) |
|
- |
|
|
- |
|
Operating income |
$ |
5,497 |
|
$ |
4,728 |
|
$ |
3,001 |
|
$ |
13,226 |
|
|
$ |
(6,853 |
) |
$ |
9,306 |
|
$ |
11,537 |
|
$ |
13,990 |
|
|
5.8% |
|
Operating margin % |
|
8.0% |
|
|
- |
|
|
- |
|
|
19.2% |
|
|
|
(9.1% |
) |
|
- |
|
|
- |
|
|
18.5% |
|
|
(0.7% |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ in
Thousands |
Twelve Months Ended December 31, 2019 |
|
Twelve Months Ended December 31, 2020 |
|
|
|
GAAP |
Non-cashadj. |
Cash adj. |
AdjustedEBITDA |
|
GAAP |
Non-cashadj. |
Cash adj. |
AdjustedEBITDA |
|
Changevs. 2019 |
Product revenues, net |
$ |
272,123 |
|
$ |
- |
|
$ |
- |
|
$ |
272,123 |
|
|
$ |
275,496 |
|
$ |
- |
|
$ |
- |
|
$ |
275,496 |
|
|
1.2% |
|
Cost of goods sold |
|
163,634 |
|
|
(3,023 |
) |
|
(4,299 |
) |
|
156,313 |
|
|
|
179,212 |
|
|
(15,868 |
) |
|
(3,622 |
) |
|
159,722 |
|
|
2.2% |
|
Gross profit |
|
108,489 |
|
|
3,023 |
|
|
4,299 |
|
|
115,810 |
|
|
|
96,284 |
|
|
15,868 |
|
|
3,622 |
|
|
115,774 |
|
|
(0.0% |
) |
Gross profit margin % |
|
39.9% |
|
|
- |
|
|
- |
|
|
42.6% |
|
|
|
34.9% |
|
|
- |
|
|
- |
|
|
42.0% |
|
|
(0.5% |
) |
Selling, general and administrative expenses |
|
65,896 |
|
|
(2,767 |
) |
|
(4,218 |
) |
|
58,910 |
|
|
|
87,971 |
|
|
(1,458 |
) |
|
(25,277 |
) |
|
61,236 |
|
|
3.9% |
|
Amortization of intangible assets |
|
10,724 |
|
|
(10,724 |
) |
|
- |
|
|
- |
|
|
|
10,948 |
|
|
(10,948 |
) |
|
- |
|
|
- |
|
|
- |
|
Asset impairment charges |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
40,600 |
|
|
(40,600 |
) |
|
- |
|
|
- |
|
|
- |
|
Restructuring and other non-recurring expenses |
|
2,193 |
|
|
- |
|
|
(2,193 |
) |
|
- |
|
|
|
1,052 |
|
|
- |
|
|
(1,052 |
) |
|
- |
|
|
- |
|
Operating income |
$ |
29,676 |
|
$ |
16,514 |
|
$ |
10,710 |
|
$ |
56,900 |
|
|
$ |
(44,287 |
) |
$ |
68,873 |
|
$ |
29,951 |
|
$ |
54,537 |
|
|
(4.2% |
) |
Operating margin % |
|
10.9% |
|
|
- |
|
|
- |
|
|
20.9% |
|
|
|
(16.1% |
) |
|
- |
|
|
- |
|
|
19.8% |
|
|
(1.1% |
) |
Note – 2020 combines predecessor and successor periods.
Whole Earth Brands,
Inc.Adjustment to Operating Income by Income
Statement line and nature(In thousands of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ in
Thousands |
Three Months Ended December 31, 2019 |
|
Three Months Ended December 31, 2020 |
|
Non-Cash adjustments |
Cost ofGoodsSold |
SG&A |
Amort. OfIntangibles |
Assetimpair-ment |
Restruct-uring |
OperatingIncome |
|
Cost ofGoodsSold |
SG&A |
Amort. OfIntangibles |
Assetimpair-ment |
Restruct-uring |
OperatingIncome |
|
Depreciation |
794 |
- |
|
- |
- |
- |
794 |
|
|
855 |
- |
- |
- |
- |
855 |
|
Amortization of intangible assets |
- |
- |
|
2,756 |
- |
- |
2,756 |
|
|
- |
- |
3,180 |
- |
- |
3,180 |
|
Asset impairment charges |
- |
- |
|
- |
- |
- |
- |
|
|
- |
- |
- |
- |
- |
- |
|
Non-cash pension expense |
- |
1,178 |
|
- |
- |
- |
1,178 |
|
|
- |
98 |
- |
- |
- |
98 |
|
Long term incentive plan |
- |
- |
|
- |
- |
- |
- |
|
|
269 |
993 |
- |
- |
- |
1,262 |
|
Purchase accounting costs |
- |
- |
|
- |
- |
- |
- |
|
|
3,911 |
-- |
- |
- |
- |
3,911 |
|
Total non-cash adjustments |
794 |
1,178 |
|
2,756 |
- |
- |
4,728 |
|
|
5,035 |
1,091 |
3,180 |
- |
- |
9,306 |
|
Cash adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring |
- |
- |
|
- |
- |
1,043 |
1,043 |
|
|
- |
- |
- |
- |
1,052 |
1,052 |
|
Long term incentive plan |
- |
(9 |
) |
- |
- |
- |
(9 |
) |
|
65 |
471 |
- |
- |
- |
536 |
|
Transaction related expenses |
- |
- |
|
- |
- |
- |
- |
|
|
- |
431 |
- |
- |
- |
431 |
|
Severance and related expenses |
- |
1,115 |
|
- |
- |
- |
1,115 |
|
|
- |
425 |
- |
- |
- |
425 |
|
Public company readiness |
- |
- |
|
- |
- |
- |
- |
|
|
- |
2,370 |
- |
- |
- |
2,370 |
|
Brand introduction costs |
885 |
- |
|
- |
- |
- |
885 |
|
|
- |
- |
- |
- |
- |
- |
|
M&A transaction expenses |
- |
- |
|
- |
- |
- |
- |
|
|
- |
4,985 |
- |
- |
- |
4,985 |
|
Other items |
422 |
(456 |
) |
- |
- |
- |
(34 |
) |
|
1,380 |
359 |
- |
- |
- |
1,739 |
|
Total cash adjustments |
1,307 |
651 |
|
- |
- |
1,043 |
3,001 |
|
|
1,445 |
9,040 |
- |
- |
1,052 |
11,537 |
|
Total adjustments |
2,101 |
1,829 |
|
2,756 |
- |
1,043 |
7,729 |
|
|
6,480 |
10,131 |
3,180 |
- |
1,052 |
20,843 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ in
Thousands |
Twelve Months Ended December 31, 2019 |
|
Twelve Months Ended December 31, 2020 |
|
Non-Cash adjustments |
Cost ofGoodsSold |
SG&A |
Amort. OfIntangibles |
Assetimpair-ment |
Restruct-uring |
OperatingIncome |
|
Cost ofGoodsSold |
SG&A |
Amort. OfIntangibles |
Assetimpair-ment |
Restruct-uring |
OperatingIncome |
|
Depreciation |
3,023 |
- |
|
- |
- |
- |
3,023 |
|
|
2,986 |
- |
- |
- |
- |
2,986 |
|
Amortization of intangible assets |
- |
- |
|
10,724 |
- |
- |
10,724 |
|
|
- |
- |
10,948 |
- |
- |
10,948 |
|
Asset impairment charges |
- |
- |
|
- |
- |
- |
- |
|
|
- |
- |
- |
40,600 |
- |
40,600 |
|
Non-cash pension expense |
- |
2,767 |
|
- |
- |
- |
2,767 |
|
|
- |
465 |
- |
- |
- |
465 |
|
Long term incentive plan |
- |
- |
|
- |
- |
- |
- |
|
|
269 |
993 |
- |
- |
- |
1,262 |
|
Purchase accounting costs |
- |
- |
|
- |
- |
- |
- |
|
|
12,613 |
- |
- |
- |
- |
12,613 |
|
Total non-cash adjustments |
3,023 |
2,767 |
|
10,724 |
- |
- |
16,514 |
|
|
15,868 |
1,458 |
10,948 |
40,600 |
- |
68,873 |
|
Cash adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring |
- |
- |
|
- |
- |
2,193 |
2,193 |
|
|
- |
- |
- |
- |
1,052 |
1,052 |
|
Long term incentive plan |
253 |
898 |
|
- |
- |
- |
1,151 |
|
|
186 |
1,269 |
- |
- |
- |
1,455 |
|
Transaction related expenses |
- |
- |
|
- |
- |
- |
- |
|
|
433 |
11,229 |
- |
- |
- |
11,662 |
|
Severance and related expenses |
- |
1,411 |
|
- |
- |
- |
1,411 |
|
|
- |
1,897 |
- |
- |
- |
1,897 |
|
Public company readiness |
- |
- |
|
- |
- |
- |
- |
|
|
- |
5,152 |
- |
- |
- |
5,152 |
|
Brand introduction costs |
3,463 |
- |
|
- |
- |
- |
3,463 |
|
|
1,360 |
- |
- |
- |
- |
1,360 |
|
M&A transaction expenses |
- |
- |
|
- |
- |
- |
- |
|
|
- |
5,068 |
- |
- |
- |
5,068 |
|
Other items |
583 |
1,910 |
|
- |
- |
- |
2,493 |
|
|
1,643 |
662 |
- |
- |
- |
2,305 |
|
Total cash adjustments |
4,299 |
4,218 |
|
- |
- |
2,193 |
10,710 |
|
|
3,622 |
25,277 |
- |
- |
1,052 |
29,951 |
|
Total adjustments |
7,321 |
6,986 |
|
10,724 |
- |
2,193 |
27,224 |
|
|
19,490 |
26,735 |
10,948 |
40,600 |
1,052 |
98,824 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash adjustments: Within the Adjusted EBITDA
reconciliation include certain transactions that are non-cash in
nature. Such items include depreciation, amortization of
intangibles, asset impairment charges, non-cash pension expense,
long term incentive plan expenses (stock based compensation) and
purchase accounting adjustments.
Cash adjustments: Within the Adjusted EBITDA
reconciliation include certain transactions that are one-off,
non-recurring in nature, but have been or will be settled with
Company cash.
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