Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies [Abstract]

Basis of Accounting

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements.

Consolidation

The unaudited consolidated financial statements include the accounts of the Company and its Subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation.

Reclassifications

Reclassifications

Certain prior period amounts have been reclassified to conform to the current presentation. The Company reclassified $4.6 million and $9.5 million of events and other miscellaneous selling costs from the general and administration expenses line to the selling expenses line on the consolidated statement of income for the three- and nine-month periods ended September 30, 2021, respectively. The Company believes these costs are better reflected in selling expenses. The reclassification had no impact on operating income for the three- and nine-month periods ended September 30, 2021.

Accounting Pronouncements

Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued, ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited time to ease the potential burden in accounting for the effects of reference rate reform on financial reporting. The guidance provides optional expedients and exceptions for applying US GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. ASU 2020-04 applies only to contracts and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The amendments in ASU 2020-04 are elective and are effective upon issuance for all entities. The Company had previously elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. In the second quarter of 2022, the Company elected the hedge accounting expedient that allows an update to the hedged risk in active hedging relationships without de-designation as the Company’s debt transitioned to Secured Overnight Financing Rate (“SOFR”). Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

Inventory

Inventory

Inventories consist of the following (U.S. dollars in thousands):

	September 30, 2022		December 31, 2021
Raw materials	$	141,823	$	179,891
Finished goods		185,658		220,040
Total Inventory, net	$	327,481	$	399,931

Revenue Recognition

Revenue Recognition

Contract Liabilities – Customer Loyalty Programs

Contract liabilities, recorded as deferred revenue within the accrued expenses line in the consolidated balance sheets, include loyalty point program deferrals with certain customers which are accounted for as a reduction in the transaction price and are generally recognized as points are redeemed for additional products.

The balance of deferred revenue related to contract liabilities as of September 30, 2022 and December 31, 2021 was $17.7 million and $22.0 million, respectively. The contract liabilities impact to revenue for the three-month periods ended September 30, 2022, and 2021 was an increase of $0.7 million and a decrease of $0.7 million, respectively. The impact to revenue for the nine-month periods ended September 30, 2022, and 2021 was an increase of $4.3 million and  a decrease of $6.3 million, respectively.