Whole Earth Brands, Inc. (the “Company” or “we” or “our”) (Nasdaq:
FREE), a global food company enabling healthier lifestyles through
premium plant-based sweeteners, flavor enhancers and other foods,
today announced its financial results for its fourth quarter and
full year ended December 31, 2021. The Company also provided
initial 2022 guidance.
Full Year Highlights
- Reported consolidated revenue
growth of 79%, including strategic acquisitions
- Branded CPG proforma organic
constant currency revenue growth of approximately 12% on a two-year
stacked basis versus 2019 and approximately 1% compared to
2020
- Flavors & Ingredients revenue
growth of approximately 7% compared to 2020
- Operating income of $22.8 million
and adjusted EBITDA of $82.2 million, an increase of approximately
51%
Fourth Quarter Highlights
- Reported consolidated revenue
growth of 75%, including strategic acquisitions
- Branded CPG proforma organic
constant currency revenue growth of approximately 9% on a two-year
stacked basis versus 2019 and a decrease of approximately 4%
compared to 2020
- Flavors & Ingredients revenue
growth of approximately 21% compared to 2020
- Operating income of $6.4 million
and adjusted EBITDA of $20.6 million, an increase of approximately
47%
Irwin D. Simon, Executive Chairman, stated, “In
the 18 months since our business combination, we have significantly
grown revenue and adjusted EBITDA, and transformed the business
through two successful acquisitions, all while managing through a
complex environment. Looking ahead to 2022, we are well positioned
with our diversified and resilient global platform that has a
market presence in approximately 100 countries and is focused on
driving profitable growth, establishing formal environmental,
social and governance practices, and creating value for
shareholders.”
Albert Manzone, Chief Executive Officer,
commented, “We made great strides this year to expand our reach and
drive distribution gains by leveraging our broad product assortment
and innovations across all geographies to service a global base of
diverse customers utilizing all sales channels. To complement our
commercial efforts, we continue to execute, and have accelerated,
our North American Supply Chain Reinvention leveraging the
increased scale from the Swerve and Wholesome acquisitions to
ensure that we remain well positioned to meet future demand despite
a challenging supply chain environment.”
Mr. Manzone continued, “The power of our
portfolio of brands, geographies, channels and segments allowed us
to deliver revenue and adjusted EBITDA within our guidance, despite
headwinds from product supply and rising supply chain costs.
Heading into 2022, we expect our recent pricing actions and
productivity improvements will offset current inflationary
pressures. We remain laser focused on executing our strategies to
deliver on our short and long-term objectives.”
FOURTH QUARTER 2021 RESULTS
The Company’s reported consolidated financials
reflect the completed acquisitions of Swerve on November 10, 2020
and Wholesome on February 5, 2021 from those respective dates.
Proforma comparisons include the impact of these acquisitions for
both the current and prior year periods.
- Consolidated product revenues were
$132.7 million, an increase of 75.3% on a reported basis, as
compared to the prior year fourth quarter. On a proforma basis,
organic constant currency product revenues were flat with the prior
year fourth quarter.
- Reported gross profit was $38.7
million, compared to $25.2 million in the prior year fourth
quarter. The increase was largely driven by contributions from the
Swerve and Wholesome acquisitions and a $5.9 million favorable
change in non-cash purchase accounting adjustments related to
inventory revaluations, partially offset by $6.2 million of costs
associated with our supply chain reinvention project.
- Gross profit margin was 29.2% in
the fourth quarter of 2021, compared to 33.3% in the prior year
period. Adjusted gross profit margin was 34.0%, down from 42.0% in
the prior year due primarily to the inclusion of Wholesome in 2021,
which has lower margins, and other product mix.
- Consolidated operating income was
$6.4 million compared to an operating loss of $6.9 million in the
prior year fourth quarter and consolidated net loss was $0.4
million in the fourth quarter of 2021 compared to a net loss of
$5.1 million in the prior year period.
- Consolidated Adjusted EBITDA of
$20.6 million increased 47.5% driven by contributions from the
Swerve and Wholesome acquisitions and revenue growth, partially
offset by higher bonus expense compared to 2020.
SEGMENT RESULTS
Branded CPG SegmentBranded CPG
segment product revenues increased $52.3 million, or 98.1%, to
$105.6 million for the fourth quarter of 2021, compared to $53.3
million for the same period in the prior year, driven primarily by
the addition of Swerve and Wholesome. On a proforma basis, organic
constant currency product revenue decreased 4.3% compared to the
prior year fourth quarter primarily due to temporary supply
constraints that were partially offset by solid volume growth at
Wholesome. On a two-year stacked basis, when comparing fourth
quarter 2021 to fourth quarter 2019, Branded CPG segment proforma
organic constant currency revenue increased 9.1% driven by volume
growth.
Operating income was $4.4 million in the fourth
quarter of 2021 compared to operating income of $6.2 million for
the same period in the prior year. The decrease was driven by
temporary supply constraints, higher bonus expense, and costs
associated with our supply chain reinvention project, partially
offset by contributions from the acquired Swerve and Wholesome
businesses, and lower purchase accounting adjustments.
Flavors & Ingredients
SegmentFlavors & Ingredients segment product revenues
increased 21.2% to $27.1 million for the fourth quarter of 2021,
compared to $22.4 million for the same period in the prior year
primarily due to strong volume growth across all product categories
including licorice extracts, pure derivatives and the Magnasweet
product lines driven by innovation and commercial expansion.
Operating income was $7.6 million in the fourth
quarter of 2021, compared to an operating loss of $2.0 million in
the prior year period primarily due to a $5.9 million favorable
change in purchase accounting adjustments related to inventory
revaluations, revenue growth and lower operating costs.
CorporateCorporate expenses for
the fourth quarter of 2021 were $5.7 million, compared to $11.1
million of expenses in the prior year period. The decrease is
primarily due to lower M&A transaction fees and non-recurring
public company readiness expenses.
FULL YEAR 2021 RESULTS
The Company’s consolidated financial results
reflect both predecessor and successor periods indicative of the
June 25, 2020 business combination date. The full year results
discussed below compare the results for the year ended December 31,
2021 to the combined year ended December 31, 2020, which includes
the successor period from June 26, 2020 through December 31, 2020
and the predecessor period from January 1, 2020 through June 25,
2020.
Additionally, the Company’s consolidated
reported financial results reflect the completed acquisitions of
Swerve on November 10, 2020 and Wholesome on February 5, 2021 from
those respective dates onwards. Proforma comparisons include the
impact of both acquisitions for both the current and prior full
years.
- Consolidated product revenues were
$494.0 million, an increase of 79.3% compared to the full year
2020. On a proforma basis, organic constant currency product
revenue increased 2.0%, compared to the prior year.
- Branded CPG segment product
revenues were $389.2 million, an increase of 119.1%, reflecting the
acquisitions of Wholesome and Swerve. On a proforma basis, organic
constant currency product revenues increased 0.7% compared to the
prior year and grew 11.9% on a two-year stacked basis as compared
to the full year 2019 driven by portfolio innovation and
distribution gains.
- Flavors & Ingredients segment
product revenues were $104.8 million, an increase of 7.1% as
compared to the prior year, driven by product innovation and
commercial expansion.
- Reported gross profit was $158.8
million, an increase of $62.5 million from $96.3 million in the
prior year, and gross profit margin was 32.1% in the full year
ended December 31, 2021 as compared to 34.9% in the prior year.
Adjusted gross profit margin was 34.5%, down from 42.0% in the
prior year driven primarily by the inclusion of Wholesome.
- Consolidated operating income was
$22.8 million compared to an operating loss of $44.3 million in the
prior year and consolidated net income was $0.1 million for the
year ended December 31, 2021 compared to a net loss of $42.6
million in the prior year.
- Consolidated Adjusted EBITDA
increased 50.7% to $82.2 million driven by contributions from the
acquired Swerve and Wholesome businesses and revenue growth,
partially offset by higher bonus expense.
BALANCE SHEET
As of December 31, 2021, the Company had cash
and cash equivalents of $28.3 million and $383.5 million of
long-term debt, net of unamortized debt issuance costs.
OUTLOOK
The Company is providing its initial outlook for
full year 2022, which includes the full year impact of its recent
acquisition of Wholesome. The outlook includes expectations for
growth on a proforma organic basis. The Company defines proforma
organic growth to be as if the Company owned Wholesome for the full
year 2021. The Company’s 2022 outlook is as follows:
- Net Product Revenues: $530 million
to $545 million (representing reported growth of 7% to 10%, and
proforma organic growth of 3% to 6%)
- Adjusted EBITDA: $84 million to $87
million
- Capital Expenditures: Approximately
$10 million
Outlook is provided in the context of greater
than usual volatility as a result of current geo-political events
and the on-going COVID-19 pandemic.
CONFERENCE CALL DETAILS
The Company will host a conference call and
webcast to review its fourth quarter and full year results today,
March 14, 2022 at 8:30 am ET. 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 28, 2022 by dialing (844) 512-2921 or for
international callers by dialing (412) 317-6671; the passcode is
13726948.
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. Examples of forward-looking statements
include, but are not limited to, the statements made by Messrs.
Simon and Manzone, and our 2022 guidance. 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 achieve the anticipated benefits of the
integration of Wholesome and Swerve in a timely manner or at all;
the ongoing conflict in Ukraine and related economic disruptions
and new governmental regulations on our business, including but not
limited to the potential impact on our sales, operations and supply
chain; adverse changes in the global or regional general business,
political and economic conditions, including the impact of
continuing uncertainty and instability in certain countries, that
could affect our global markets and the potential adverse economic
impact and related uncertainty caused by these items; 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:KWT Global Larry
Larsen312-497-0655llarsen@kwtglobal.com
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.
- Supply chain
reinvention: To measure operating performance, we exclude certain
one-time and other costs associated with reorganizing our North
America Branded CPG operations and facilities in connection with
our supply chain reinvention program, which will drive long-term
productivity and cost savings. These costs for 2021 include
incremental expenses such as hiring, training and other temporary
costs primarily related to taking control over production that was
previously outsourced to a contract manufacturer. 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.Consolidated Balance
Sheets(In thousands of dollars, except for share
and per share data)
|
December 31, 2021 |
|
December 31, 2020 |
Assets |
|
|
|
Current
Assets |
|
|
|
Cash and cash equivalents |
$ |
28,296 |
|
|
$ |
16,898 |
|
Accounts receivable (net of allowances of $1,285 and $955,
respectively) |
|
69,590 |
|
|
|
56,423 |
|
Inventories |
|
212,930 |
|
|
|
111,699 |
|
Prepaid expenses and other current assets |
|
7,585 |
|
|
|
5,045 |
|
Total current assets |
|
318,401 |
|
|
|
190,065 |
|
|
|
|
|
Property, Plant and
Equipment, net |
|
58,503 |
|
|
|
47,285 |
|
|
|
|
|
Other
Assets |
|
|
|
Operating lease right-of-use assets |
|
26,444 |
|
|
|
12,193 |
|
Goodwill |
|
242,661 |
|
|
|
153,537 |
|
Other intangible assets, net |
|
266,939 |
|
|
|
184,527 |
|
Deferred tax assets, net |
|
1,993 |
|
|
|
2,671 |
|
Other assets |
|
7,638 |
|
|
|
6,260 |
|
Total Assets |
$ |
922,579 |
|
|
$ |
596,538 |
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
Current
Liabilities |
|
|
|
Accounts payable |
$ |
55,182 |
|
|
$ |
25,200 |
|
Accrued expenses and other current liabilities |
|
30,733 |
|
|
|
29,029 |
|
Contingent consideration payable |
|
54,113 |
|
|
|
— |
|
Current portion of operating lease liabilities |
|
7,950 |
|
|
|
3,623 |
|
Current portion of long-term debt |
|
3,750 |
|
|
|
7,000 |
|
Total current liabilities |
|
151,728 |
|
|
|
64,852 |
|
Non-Current
Liabilities |
|
|
|
Long-term debt |
|
383,484 |
|
|
|
172,662 |
|
Warrant liabilities |
|
2,053 |
|
|
|
— |
|
Deferred tax liabilities, net |
|
35,090 |
|
|
|
23,297 |
|
Operating lease liabilities, less current portion |
|
22,575 |
|
|
|
11,324 |
|
Other liabilities |
|
13,778 |
|
|
|
15,557 |
|
Total Liabilities |
|
608,708 |
|
|
|
287,692 |
|
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;
38,871,646 and 38,426,669 shares issued and outstanding at December
31, 2021 and December 31, 2020, respectively |
|
4 |
|
|
|
4 |
|
Additional paid-in capital |
|
330,616 |
|
|
|
325,679 |
|
Accumulated deficit |
|
(26,436 |
) |
|
|
(25,442 |
) |
Accumulated other comprehensive income |
|
9,687 |
|
|
|
8,605 |
|
Total stockholders’ equity |
|
313,871 |
|
|
|
308,846 |
|
Total Liabilities and Stockholders’ Equity |
$ |
922,579 |
|
|
$ |
596,538 |
|
Whole Earth Brands,
Inc.Consolidated and Combined Statements of
Operations(In thousands of dollars, except for per
share data)
|
(Successor) |
|
|
(Predecessor) |
|
Three Months EndedDecember 31,
2021 |
|
Three Months EndedDecember 31,
2020 |
|
Year EndedDecember 31, 2021 |
|
From June 26, 2020to December 31, 2020 |
|
|
From January 1, 2020to June 25, 2020 |
Product revenues, net |
$ |
132,714 |
|
|
$ |
75,688 |
|
|
$ |
493,973 |
|
|
$ |
147,168 |
|
|
|
$ |
128,328 |
|
Cost of goods sold |
|
93,994 |
|
|
|
50,520 |
|
|
|
335,218 |
|
|
|
101,585 |
|
|
|
|
77,627 |
|
Gross profit |
|
38,720 |
|
|
|
25,168 |
|
|
|
158,755 |
|
|
|
45,583 |
|
|
|
|
50,701 |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
27,568 |
|
|
|
27,789 |
|
|
|
113,141 |
|
|
|
44,616 |
|
|
|
|
43,355 |
|
Amortization of intangible
assets |
|
4,763 |
|
|
|
3,180 |
|
|
|
18,295 |
|
|
|
6,021 |
|
|
|
|
4,927 |
|
Asset impairment charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
40,600 |
|
Restructuring and other
expenses |
|
— |
|
|
|
1,052 |
|
|
|
4,503 |
|
|
|
1,052 |
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
6,389 |
|
|
|
(6,853 |
) |
|
|
22,816 |
|
|
|
(6,106 |
) |
|
|
|
(38,181 |
) |
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of
warrant liabilities |
|
454 |
|
|
|
— |
|
|
|
29 |
|
|
|
— |
|
|
|
|
— |
|
Interest expense, net |
|
(6,562 |
) |
|
|
(2,210 |
) |
|
|
(24,589 |
) |
|
|
(4,371 |
) |
|
|
|
(238 |
) |
Loss on extinguishment and
debt transaction costs |
|
— |
|
|
|
— |
|
|
|
(5,513 |
) |
|
|
— |
|
|
|
|
— |
|
Other income (expense),
net |
|
476 |
|
|
|
(346 |
) |
|
|
196 |
|
|
|
(578 |
) |
|
|
|
801 |
|
Income (loss) before income
taxes |
|
757 |
|
|
|
(9,409 |
) |
|
|
(7,061 |
) |
|
|
(11,055 |
) |
|
|
|
(37,618 |
) |
Provision (benefit) for income
taxes |
|
1,150 |
|
|
|
(4,312 |
) |
|
|
(7,144 |
) |
|
|
(2,618 |
) |
|
|
|
(3,482 |
) |
Net (loss) income |
$ |
(393 |
) |
|
$ |
(5,097 |
) |
|
$ |
83 |
|
|
$ |
(8,437 |
) |
|
|
$ |
(34,136 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net (loss) earnings per
share: |
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.01 |
) |
|
$ |
(0.13 |
) |
|
$ |
0.00 |
|
|
$ |
(0.22 |
) |
|
|
|
Diluted |
$ |
(0.01 |
) |
|
$ |
(0.13 |
) |
|
$ |
0.00 |
|
|
$ |
(0.22 |
) |
|
|
|
Whole Earth Brands,
Inc.Consolidated and Combined Statements of Cash
Flows(In thousands of dollars)
|
(Successor) |
|
|
(Predecessor) |
|
Year EndedDecember 31, 2021 |
|
From June 26, 2020to December 31, 2020 |
|
|
From January 1,
2020to June 25, 2020 |
|
Year EndedDecember 31, 2019 |
Operating
activities |
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
83 |
|
|
$ |
(8,437 |
) |
|
|
$ |
(34,136 |
) |
|
$ |
30,812 |
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
Stock-based compensation |
|
8,715 |
|
|
|
1,262 |
|
|
|
|
— |
|
|
|
— |
|
Depreciation |
|
4,727 |
|
|
|
1,652 |
|
|
|
|
1,334 |
|
|
|
3,031 |
|
Amortization of intangible assets |
|
18,295 |
|
|
|
6,021 |
|
|
|
|
4,927 |
|
|
|
10,724 |
|
Deferred income taxes |
|
(12,300 |
) |
|
|
(2,842 |
) |
|
|
|
(5,578 |
) |
|
|
(10,500 |
) |
Asset impairment charges |
|
— |
|
|
|
— |
|
|
|
|
40,600 |
|
|
|
— |
|
Amortization of inventory fair value adjustments |
|
(3,396 |
) |
|
|
12,613 |
|
|
|
|
— |
|
|
|
— |
|
Non-cash loss on extinguishment of debt |
|
4,435 |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Change in fair value of warrant liabilities |
|
(29 |
) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Changes in current assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
964 |
|
|
|
(4,554 |
) |
|
|
|
7,726 |
|
|
|
1,311 |
|
Inventories |
|
(22,957 |
) |
|
|
(5,305 |
) |
|
|
|
3,576 |
|
|
|
2,004 |
|
Prepaid expenses and other current assets |
|
(1,030 |
) |
|
|
(2,066 |
) |
|
|
|
3,330 |
|
|
|
(3,097 |
) |
Accounts payable, accrued liabilities and income taxes |
|
12,050 |
|
|
|
(7,939 |
) |
|
|
|
507 |
|
|
|
(3,057 |
) |
Other, net |
|
(75 |
) |
|
|
150 |
|
|
|
|
(2,378 |
) |
|
|
437 |
|
Net cash provided by (used in)
operating activities |
|
9,482 |
|
|
|
(9,445 |
) |
|
|
|
19,908 |
|
|
|
31,665 |
|
|
|
|
|
|
|
|
|
|
Investing
activities |
|
|
|
|
|
|
|
|
Capital expenditures |
|
(12,198 |
) |
|
|
(4,489 |
) |
|
|
|
(3,532 |
) |
|
|
(4,037 |
) |
Acquisitions, net of cash
acquired |
|
(190,231 |
) |
|
|
(456,508 |
) |
|
|
|
— |
|
|
|
— |
|
Proceeds from sale of fixed
assets |
|
4,516 |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Transfer from trust
account |
|
— |
|
|
|
178,875 |
|
|
|
|
— |
|
|
|
— |
|
Net cash used in investing
activities |
|
(197,913 |
) |
|
|
(282,122 |
) |
|
|
|
(3,532 |
) |
|
|
(4,037 |
) |
|
|
|
|
|
|
|
|
|
Financing
activities |
|
|
|
|
|
|
|
|
Proceeds from revolving credit
facility |
|
25,000 |
|
|
|
47,855 |
|
|
|
|
3,500 |
|
|
|
1,500 |
|
Repayments of revolving credit
facility |
|
(47,855 |
) |
|
|
— |
|
|
|
|
(8,500 |
) |
|
|
— |
|
Long-term borrowings |
|
375,000 |
|
|
|
140,000 |
|
|
|
|
— |
|
|
|
— |
|
Repayments of long-term
borrowings |
|
(139,314 |
) |
|
|
(3,500 |
) |
|
|
|
— |
|
|
|
— |
|
Debt issuance costs |
|
(11,589 |
) |
|
|
(7,139 |
) |
|
|
|
— |
|
|
|
— |
|
Proceeds from sale of common
stock and warrants |
|
1 |
|
|
|
75,000 |
|
|
|
|
— |
|
|
|
— |
|
Tax withholdings related to
net share settlements of stock-based awards |
|
(1,913 |
) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Funding to Parent, net |
|
— |
|
|
|
— |
|
|
|
|
(11,924 |
) |
|
|
(25,442 |
) |
Net cash provided by (used in)
financing activities |
|
199,330 |
|
|
|
252,216 |
|
|
|
|
(16,924 |
) |
|
|
(23,942 |
) |
Whole Earth Brands,
Inc.Consolidated and Combined Statements of Cash
Flows (Continued)(In thousands of
dollars)
|
(Successor) |
|
|
(Predecessor) |
|
Year EndedDecember 31, 2021 |
|
From June 26, 2020to December 31, 2020 |
|
|
From January 1,
2020to June 25, 2020 |
|
Year EndedDecember 31, 2019 |
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
499 |
|
|
714 |
|
|
|
|
215 |
|
|
|
(496 |
) |
Net change in cash and
cash equivalents |
|
11,398 |
|
|
(38,637 |
) |
|
|
|
(333 |
) |
|
|
3,190 |
|
Cash and cash equivalents,
beginning of period |
|
16,898 |
|
|
55,535 |
|
|
|
|
10,395 |
|
|
|
7,205 |
|
Cash and cash equivalents, end
of period |
$ |
28,296 |
|
$ |
16,898 |
|
|
|
$ |
10,062 |
|
|
$ |
10,395 |
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information |
|
|
|
|
|
|
|
|
Interest paid |
$ |
21,203 |
|
$ |
3,328 |
|
|
|
$ |
798 |
|
|
$ |
— |
|
Taxes paid, net of refunds |
$ |
4,523 |
|
$ |
3,091 |
|
|
|
$ |
2,244 |
|
|
$ |
4,571 |
|
Supplemental
disclosure of non-cash investing |
|
|
|
|
|
|
|
|
Non-cash capital expenditures |
$ |
3,796 |
|
$ |
— |
|
|
|
$ |
— |
|
|
$ |
— |
|
Whole Earth Brands,
Inc.Adjusted EBITDA
Reconciliation(In thousands of dollars)
(Unaudited)
|
(Successor) |
|
|
(Predecessor) |
|
|
Three Months EndedDecember 31, 2021 |
|
Three Months EndedDecember 31, 2020 |
|
Twelve Months EndedDecember 31, 2021 |
|
From June 26, 2020to December 31, 2020 |
|
|
From January 1, 2020to June 25, 2020 |
|
Product revenues, net |
$ |
132,714 |
|
|
$ |
75,688 |
|
|
$ |
493,973 |
|
|
$ |
147,168 |
|
|
|
$ |
128,328 |
|
|
Net income
(loss) |
$ |
(393 |
) |
|
$ |
(5,097 |
) |
|
$ |
83 |
|
|
$ |
(8,437 |
) |
|
|
$ |
(34,136 |
) |
|
(Benefit)
provision for income taxes |
|
1,150 |
|
|
|
(4,312 |
) |
|
|
(7,144 |
) |
|
|
(2,618 |
) |
|
|
|
(3,482 |
) |
|
Other
expense (income) |
|
(476 |
) |
|
|
346 |
|
|
|
(196 |
) |
|
|
578 |
|
|
|
|
(801 |
) |
|
Loss on
extinguishment and debt transaction costs |
|
- |
|
|
|
- |
|
|
|
5,513 |
|
|
|
- |
|
|
|
|
- |
|
|
Interest
expense, net |
|
6,562 |
|
|
|
2,210 |
|
|
|
24,589 |
|
|
|
4,371 |
|
|
|
|
238 |
|
|
Change in
fair value of warrant liabilities |
|
(454 |
) |
|
|
- |
|
|
|
(29 |
) |
|
|
- |
|
|
|
|
- |
|
|
Operating
income (loss) |
|
6,389 |
|
|
|
(6,853 |
) |
|
|
22,816 |
|
|
|
(6,106 |
) |
|
|
|
(38,181 |
) |
|
Depreciation |
|
1,497 |
|
|
|
855 |
|
|
|
4,727 |
|
|
|
1,652 |
|
|
|
|
1,334 |
|
|
Amortization
of intangible assets |
|
4,763 |
|
|
|
3,180 |
|
|
|
18,295 |
|
|
|
6,021 |
|
|
|
|
4,927 |
|
|
Asset
impairment charges |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
40,600 |
|
|
Purchase
accounting adjustments |
|
(2,514 |
) |
|
|
3,911 |
|
|
|
(3,396 |
) |
|
|
12,613 |
|
|
|
|
- |
|
|
Transaction
related expenses |
|
- |
|
|
|
431 |
|
|
|
415 |
|
|
|
1,314 |
|
|
|
|
10,348 |
|
|
Long term
incentive plan |
|
1,694 |
|
|
|
1,798 |
|
|
|
9,423 |
|
|
|
2,155 |
|
|
|
|
562 |
|
|
Non-cash
pension expense |
|
237 |
|
|
|
98 |
|
|
|
237 |
|
|
|
130 |
|
|
|
|
335 |
|
|
Severance
and related expenses |
|
- |
|
|
|
425 |
|
|
|
- |
|
|
|
791 |
|
|
|
|
1,105 |
|
|
Public
company readiness |
|
945 |
|
|
|
2,370 |
|
|
|
3,303 |
|
|
|
4,583 |
|
|
|
|
569 |
|
|
Brand
introduction costs |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
229 |
|
|
|
|
1,131 |
|
|
Restructuring |
|
- |
|
|
|
1,052 |
|
|
|
4,503 |
|
|
|
1,052 |
|
|
|
|
- |
|
|
M&A
transaction expenses |
|
519 |
|
|
|
4,985 |
|
|
|
10,956 |
|
|
|
5,068 |
|
|
|
|
- |
|
|
Supply Chain
Reinvention |
|
6,169 |
|
|
|
- |
|
|
|
7,931 |
|
|
|
- |
|
|
|
|
- |
|
|
Other
items |
|
933 |
|
|
|
1,739 |
|
|
|
2,996 |
|
|
|
1,671 |
|
|
|
|
634 |
|
|
Adjusted
EBITDA |
$ |
20,632 |
|
|
$ |
13,990 |
|
|
$ |
82,206 |
|
|
$ |
31,171 |
|
|
|
$ |
23,366 |
|
|
Whole Earth Brands,
Inc.Constant Currency Product Revenues, Net
Reconciliation(In thousands of
dollars)
|
Three Months Ended December 31, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ change |
|
% change |
|
Product revenues, net |
|
2021 |
|
2020 |
Reported |
ConstantDollar |
ForeignExchange
(2) |
|
Reported |
ConstantDollar |
ForeignExchange |
|
Branded CPG |
$ |
105,589 |
$ |
53,300 |
$ |
52,289 |
|
$ |
52,665 |
|
$ |
(376 |
) |
|
98.1 |
% |
98.8 |
% |
-0.7 |
% |
|
Flavors & Ingredients |
|
27,125 |
|
22,388 |
|
4,737 |
|
|
4,737 |
|
|
- |
|
|
21.2 |
% |
21.2 |
% |
0.0 |
% |
|
Combined |
$ |
132,714 |
$ |
75,688 |
$ |
57,026 |
|
$ |
57,402 |
|
$ |
(376 |
) |
|
75.3 |
% |
75.8 |
% |
-0.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proforma Organic(1) |
|
|
|
|
|
|
|
|
|
|
Branded CPG |
$ |
105,589 |
$ |
110,750 |
$ |
(5,161 |
) |
$ |
(4,785 |
) |
$ |
(376 |
) |
|
-4.7 |
% |
-4.3 |
% |
-0.3 |
% |
|
Flavors & Ingredients |
|
27,125 |
|
22,388 |
|
4,737 |
|
|
4,737 |
|
|
- |
|
|
21.2 |
% |
21.2 |
% |
0.0 |
% |
|
Combined |
$ |
132,714 |
$ |
133,138 |
$ |
(424 |
) |
$ |
(48 |
) |
$ |
(376 |
) |
|
-0.3 |
% |
-0.0 |
% |
-0.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ change |
|
% change |
|
Product revenues, net |
|
2021 |
|
2020 |
Reported |
ConstantDollar |
ForeignExchange
(2) |
|
Reported |
ConstantDollar |
Foreign Exchange |
|
Branded CPG |
$ |
389,174 |
$ |
177,606 |
$ |
211,568 |
|
$ |
206,357 |
|
$ |
5,211 |
|
|
119.1 |
% |
116.2 |
% |
2.9 |
% |
|
Flavors & Ingredients |
|
104,799 |
|
97,890 |
|
6,909 |
|
|
6,909 |
|
|
- |
|
|
7.1 |
% |
7.1 |
% |
0.0 |
% |
|
Combined |
$ |
493,973 |
$ |
275,496 |
$ |
218,477 |
|
$ |
213,266 |
|
$ |
5,211 |
|
|
79.3 |
% |
77.4 |
% |
1.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proforma Organic(1) |
|
|
|
|
|
|
|
|
|
|
Branded CPG |
$ |
409,548 |
$ |
401,449 |
$ |
8,099 |
|
$ |
2,888 |
|
$ |
5,211 |
|
|
2.0 |
% |
0.7 |
% |
1.3 |
% |
|
Flavors & Ingredients |
|
104,799 |
|
97,890 |
|
6,909 |
|
|
6,909 |
|
|
- |
|
|
7.1 |
% |
7.1 |
% |
0.0 |
% |
|
Combined |
$ |
514,347 |
$ |
499,339 |
$ |
15,008 |
|
$ |
9,797 |
|
$ |
5,211 |
|
|
3.0 |
% |
2.0 |
% |
1.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Product revenues,
net shown on a like for like basis, including the impact of both
acquisitions for all periods in both the current and prior year
periods |
|
(2) The "foreign
exchange" amounts presented, reflect the estimated impact from
fluctuations in foreign currency exchange rates on product
revenues. |
|
Whole Earth Brands,
Inc.GAAP to Adjusted EBITDA
Reconciliation(In thousands of
dollars)
|
Three Months Ended December 31, 2020 |
|
Three Months Ended December 31, 2021 |
|
|
|
|
|
GAAP |
Non-cashadj. |
Cash adj. |
AdjustedEBITDA |
|
GAAP |
Non-cashadj. |
Cash adj. |
AdjustedEBITDA |
|
$Change |
%Change |
|
Product revenues, net |
$ |
75,688 |
|
$ |
- |
|
$ |
- |
|
$ |
75,688 |
|
|
$ |
132,714 |
|
$ |
- |
|
$ |
- |
|
$ |
132,714 |
|
|
$ |
57,026 |
75.3 |
% |
|
Cost of goods sold |
|
50,520 |
|
|
(5,035 |
) |
|
(1,555 |
) |
|
43,930 |
|
|
|
93,994 |
|
|
(775 |
) |
|
(5,693 |
) |
|
87,526 |
|
|
|
43,596 |
99.2 |
% |
|
Gross profit |
|
25,168 |
|
|
5,035 |
|
|
1,555 |
|
|
31,758 |
|
|
|
38,720 |
|
|
775 |
|
|
5,693 |
|
|
45,188 |
|
|
|
13,430 |
42.3 |
% |
|
Gross profit margin % |
|
33.3 |
% |
|
|
|
42.0 |
% |
|
|
29.2 |
% |
|
|
|
34.0 |
% |
|
|
(7.9 |
%) |
|
Selling, general and administrative expenses |
|
27,789 |
|
|
(1,091 |
) |
|
(8,930 |
) |
|
17,768 |
|
|
|
27,568 |
|
|
(1,461 |
) |
|
(1,552 |
) |
|
24,555 |
|
|
|
6,787 |
38.2 |
% |
|
Amortization of intangible assets |
|
3,180 |
|
|
(3,180 |
) |
|
- |
|
|
- |
|
|
|
4,763 |
|
|
(4,763 |
) |
|
- |
|
|
- |
|
|
|
- |
- |
|
|
Asset impairment charges |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
- |
- |
|
|
Restructuring and other non-recurring expenses |
|
1,052 |
|
|
- |
|
|
(1,052 |
) |
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
- |
- |
|
|
Operating income |
$ |
(6,853 |
) |
$ |
9,305 |
|
$ |
11,537 |
|
$ |
13,990 |
|
|
$ |
6,389 |
|
$ |
6,999 |
|
$ |
7,245 |
|
$ |
20,632 |
|
|
$ |
6,643 |
47.5 |
% |
|
Operating margin % |
|
(9.1 |
%) |
|
|
|
18.5 |
% |
|
|
4.8 |
% |
|
|
|
15.5 |
% |
|
|
(2.9 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31, 2020 |
|
Twelve Months Ended December 31, 2021 |
|
|
|
|
|
GAAP |
Non-cashadj. |
Cash adj. |
AdjustedEBITDA |
|
GAAP |
Non-cashadj. |
Cash adj. |
AdjustedEBITDA |
|
$Change |
%Change |
|
Product revenues, net |
$ |
275,496 |
|
$ |
- |
|
$ |
- |
|
$ |
275,496 |
|
|
$ |
493,973 |
|
$ |
- |
|
$ |
- |
|
$ |
493,973 |
|
|
$ |
218,477 |
79.3 |
% |
|
Cost of goods sold |
|
179,212 |
|
|
(15,868 |
) |
|
(3,622 |
) |
|
159,722 |
|
|
|
335,218 |
|
|
(3,293 |
) |
|
(8,571 |
) |
|
323,354 |
|
|
|
163,631 |
102.4 |
% |
|
Gross profit |
|
96,284 |
|
|
15,868 |
|
|
3,622 |
|
|
115,774 |
|
|
|
158,755 |
|
|
3,293 |
|
|
8,571 |
|
|
170,619 |
|
|
|
54,846 |
47.4 |
% |
|
Gross profit margin % |
|
34.9 |
% |
|
|
|
42.0 |
% |
|
|
32.1 |
% |
|
|
|
34.5 |
% |
|
|
(7.5 |
%) |
|
Selling, general and administrative expenses |
|
87,971 |
|
|
(1,458 |
) |
|
(25,277 |
) |
|
61,236 |
|
|
|
113,141 |
|
|
(10,519 |
) |
|
(14,209 |
) |
|
88,413 |
|
|
|
27,177 |
44.4 |
% |
|
Amortization of intangible assets |
|
10,948 |
|
|
(10,948 |
) |
|
- |
|
|
- |
|
|
|
18,295 |
|
|
(18,295 |
) |
|
- |
|
|
- |
|
|
|
- |
- |
|
|
Asset impairment charges |
|
40,600 |
|
|
(40,600 |
) |
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
- |
- |
|
|
Restructuring and other non-recurring expenses |
|
1,052 |
|
|
- |
|
|
(1,052 |
) |
|
- |
|
|
|
4,503 |
|
|
(358 |
) |
|
(4,145 |
) |
|
- |
|
|
|
- |
- |
|
|
Operating income |
$ |
(44,287 |
) |
$ |
68,873 |
|
$ |
29,951 |
|
$ |
54,537 |
|
|
$ |
22,816 |
|
$ |
32,465 |
|
$ |
26,926 |
|
$ |
82,206 |
|
|
$ |
27,669 |
50.7 |
% |
|
Operating margin % |
|
(16.1 |
%) |
|
|
|
19.8 |
% |
|
|
4.6 |
% |
|
|
|
16.6 |
% |
|
|
(3.2 |
%) |
|
Whole Earth Brands,
Inc.Adjustments to Operating Income by Income
Statement Line and Nature(In thousands of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2020 |
|
Three Months Ended December 31, 2021 |
|
Non-Cash adjustments |
Cost ofGoods Sold |
SG&A |
Amort. OfIntangibles |
Assetimpairment |
Restructuring |
OperatingIncome |
|
Cost ofGoods Sold |
SG&A |
Amort. OfIntangibles |
Assetimpairment |
Restructuring |
OperatingIncome |
|
Depreciation |
$ |
855 |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
855 |
|
$ |
873 |
|
$ |
623 |
|
$ |
- |
$ |
- |
$ |
- |
$ |
1,496 |
|
|
Amortization of intangible assets |
|
- |
|
- |
|
3,180 |
|
- |
|
- |
|
3,180 |
|
|
- |
|
|
- |
|
|
4,763 |
|
- |
|
- |
|
4,763 |
|
|
Asset impairment charges |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
- |
|
- |
|
|
Restructuring |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
- |
|
- |
|
|
Non-cash pension expense |
|
- |
|
98 |
|
- |
|
- |
|
- |
|
98 |
|
|
- |
|
|
237 |
|
|
- |
|
- |
|
- |
|
237 |
|
|
Long term incentive plan |
|
269 |
|
993 |
|
- |
|
- |
|
- |
|
1,262 |
|
|
1,106 |
|
|
587 |
|
|
- |
|
- |
|
- |
|
1,694 |
|
|
Purchase accounting costs |
|
3,911 |
|
- |
|
- |
|
- |
|
- |
|
3,911 |
|
|
(2,514 |
) |
|
- |
|
|
- |
|
- |
|
- |
|
(2,514 |
) |
|
Other items |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
1,309 |
|
|
13 |
|
|
- |
|
- |
|
- |
|
1,322 |
|
|
Total non-cash adjustments |
$ |
5,035 |
$ |
1,091 |
$ |
3,180 |
$ |
- |
$ |
- |
$ |
9,305 |
|
$ |
775 |
|
$ |
1,461 |
|
$ |
4,763 |
$ |
- |
$ |
- |
$ |
6,999 |
|
|
Cash adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring |
|
- |
|
- |
|
- |
|
- |
|
1,052 |
|
1,052 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
- |
|
- |
|
|
Long term incentive plan |
|
139 |
|
397 |
|
- |
|
- |
|
- |
|
536 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
- |
|
- |
|
|
Transaction related expenses |
|
- |
|
431 |
|
- |
|
- |
|
- |
|
431 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
- |
|
- |
|
|
Severance and related expenses |
|
- |
|
425 |
|
- |
|
- |
|
- |
|
425 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
- |
|
- |
|
|
Public company readiness |
|
- |
|
2,370 |
|
- |
|
- |
|
- |
|
2,370 |
|
|
- |
|
|
945 |
|
|
- |
|
- |
|
- |
|
945 |
|
|
Brand introduction costs |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
- |
|
- |
|
|
M&A transaction expenses |
|
- |
|
4,985 |
|
- |
|
- |
|
- |
|
4,985 |
|
|
- |
|
|
520 |
|
|
- |
|
- |
|
- |
|
520 |
|
|
Supply Chain Reinvention |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
6,160 |
|
|
9 |
|
|
- |
|
- |
|
- |
|
6,169 |
|
|
Other items |
|
1,416 |
|
323 |
|
- |
|
- |
|
- |
|
1,739 |
|
|
(467 |
) |
|
79 |
|
|
- |
|
- |
|
- |
|
(388 |
) |
|
Total cash adjustments |
$ |
1,555 |
$ |
8,930 |
$ |
- |
$ |
- |
$ |
1,052 |
$ |
11,537 |
|
$ |
5,693 |
|
$ |
1,552 |
|
$ |
- |
$ |
- |
$ |
- |
$ |
7,245 |
|
|
Total adjustments |
$ |
6,590 |
$ |
10,021 |
$ |
3,180 |
$ |
- |
$ |
1,052 |
$ |
20,843 |
|
$ |
6,468 |
|
$ |
3,013 |
|
$ |
4,763 |
$ |
- |
$ |
- |
$ |
14,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31, 2020 |
|
Twelve Months Ended December 31, 2021 |
|
Non-Cash adjustments |
Cost ofGoods Sold |
SG&A |
Amort. OfIntangibles |
Assetimpairment |
Restructuring |
OperatingIncome |
|
Cost ofGoods Sold |
SG&A |
Amort. OfIntangibles |
Assetimpairment |
Restructuring |
OperatingIncome |
|
Depreciation |
$ |
2,986 |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
2,986 |
|
$ |
3,858 |
|
$ |
868 |
|
$ |
- |
$ |
- |
$ |
- |
$ |
4,726 |
|
|
Amortization of intangible assets |
|
- |
|
- |
|
10,948 |
|
- |
|
- |
|
10,948 |
|
|
- |
|
|
- |
|
|
18,295 |
|
|
|
18,295 |
|
|
Asset impairment charges |
|
- |
|
- |
|
- |
|
40,600 |
|
- |
|
40,600 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
- |
|
- |
|
|
Restructuring |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
358 |
|
358 |
|
|
Non-cash pension expense |
|
- |
|
465 |
|
- |
|
- |
|
- |
|
465 |
|
|
- |
|
|
237 |
|
|
- |
|
- |
|
- |
|
237 |
|
|
Long term incentive plan |
|
269 |
|
993 |
|
- |
|
- |
|
- |
|
1,262 |
|
|
1,380 |
|
|
8,139 |
|
|
- |
|
- |
|
- |
|
9,519 |
|
|
Purchase accounting costs |
|
12,613 |
|
- |
|
- |
|
- |
|
- |
|
12,613 |
|
|
(3,396 |
) |
|
- |
|
|
- |
|
- |
|
- |
|
(3,396 |
) |
|
Other items |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
1,450 |
|
|
1,275 |
|
|
- |
|
- |
|
- |
|
2,725 |
|
|
Total non-cash adjustments |
$ |
15,868 |
$ |
1,458 |
$ |
10,948 |
$ |
40,600 |
$ |
- |
$ |
68,873 |
|
$ |
3,293 |
|
$ |
10,519 |
|
$ |
18,295 |
$ |
- |
$ |
358 |
$ |
32,465 |
|
|
Cash adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring |
|
- |
|
- |
|
- |
|
- |
|
1,052 |
|
1,052 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
4,145 |
|
4,145 |
|
|
Long term incentive plan |
|
186 |
|
1,269 |
|
- |
|
- |
|
- |
|
1,455 |
|
|
(22 |
) |
|
(75 |
) |
|
- |
|
- |
|
- |
|
(97 |
) |
|
Transaction related expenses |
|
433 |
|
11,229 |
|
- |
|
- |
|
- |
|
11,662 |
|
|
- |
|
|
415 |
|
|
- |
|
- |
|
- |
|
415 |
|
|
Severance and related expenses |
|
- |
|
1,897 |
|
- |
|
- |
|
- |
|
1,897 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
- |
|
- |
|
|
Public company readiness |
|
- |
|
5,152 |
|
- |
|
- |
|
- |
|
5,152 |
|
|
- |
|
|
3,303 |
|
|
- |
|
- |
|
- |
|
3,303 |
|
|
Brand introduction costs |
|
1,360 |
|
- |
|
- |
|
- |
|
- |
|
1,360 |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
- |
|
- |
|
|
M&A transaction expenses |
|
- |
|
5,068 |
|
- |
|
- |
|
- |
|
5,068 |
|
|
- |
|
|
10,957 |
|
|
- |
|
- |
|
- |
|
10,957 |
|
|
Supply Chain Reinvention |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
7,923 |
|
|
9 |
|
|
- |
|
- |
|
- |
|
7,931 |
|
|
Other items |
|
1,643 |
|
662 |
|
- |
|
- |
|
- |
|
2,305 |
|
|
670 |
|
|
(399 |
) |
|
- |
|
- |
|
- |
|
272 |
|
|
Total cash adjustments |
$ |
3,622 |
$ |
25,277 |
$ |
- |
$ |
- |
$ |
1,052 |
$ |
29,951 |
|
$ |
8,571 |
|
$ |
14,209 |
|
$ |
- |
$ |
- |
$ |
4,145 |
$ |
26,926 |
|
|
Total adjustments |
$ |
19,490 |
$ |
26,735 |
$ |
10,948 |
$ |
40,600 |
$ |
1,052 |
$ |
98,824 |
|
$ |
11,864 |
|
$ |
24,728 |
|
$ |
18,295 |
$ |
- |
$ |
4,503 |
$ |
59,390 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note – The twelve months ended December 31, 2020 combines the
successor period from June 26, 2020 through December 31, 2020 and
the predecessor period from January 1, 2020 through June 25,
2020.
Non-cash adjustments: The Adjusted EBITDA
reconciliation includes 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: The Adjusted EBITDA
reconciliation includes certain transactions that are one-off,
non-recurring in nature, but have been or will be settled in
cash.
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