10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For transition period from         to

Commission File Number 001-40694

Traeger, Inc.

(Exact name of registrant as specified in its charter)

Delaware	82-2739741
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

    

1215 E Wilmington Ave, Suite 200
Salt Lake City, Utah	84106
(Address of principal executive offices)	(Zip code)

(801) 701-7180

(Registrants telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.0001 par value	COOK	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

As of May 9, 2022, there were 118,211,775 shares of the registrant's common stock, par value $0.0001 outstanding.

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)	1
Condensed Consolidated Balance Sheets	1
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	2
Condensed Consolidated Statements of Changes in Member's and Stockholders' Equity	3
Condensed Consolidated Statements of Cash Flows	4
Notes to Unaudited Condensed Consolidated Financial Statements	6
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	19
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	27
ITEM 4. CONTROLS AND PROCEDURES	27
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	28
ITEM 1A. RISK FACTORS	28
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	28
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	28
ITEM 4. MINE SAFETY DISCLOSURES	29
ITEM 5. OTHER INFORMATION	29
ITEM 6. EXHIBITS	29
SIGNATURES	30

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates," “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to statements regarding our future results of operations and financial position, industry and business trends, equity compensation, business strategy, plans, market growth and our objectives for future operations.

The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, our history of operating losses, our ability to manage our future growth effectively, our ability to expand into additional markets, our ability to maintain and strengthen our brand to generate and maintain ongoing demand for our products, our ability to cost-effectively attract new customers and retain our existing customers, our failure to maintain product quality and product performance at an acceptable cost, the impact of product liability and warranty claims and product recalls, the highly competitive market in which we operate, the use of social media and community ambassadors, a decline in sales of our grills, our dependence on three major retailers, the impact of the COVID-19 pandemic on certain aspects of our business, risks associated with our international operations, our reliance on a limited number of third-party manufacturers and problems with (or loss of) our suppliers or an inability to obtain raw materials, and the ability of our stockholders to influence corporate matters and the other important factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 29, 2022. The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.

BASIS OF PRESENTATION

As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires, references to “we,” “us,” “our,” the “Company,” “Traeger” and similar references refer: (1) following the consummation of our statutory conversion to a Delaware corporation on July 28, 2021 in connection with our initial public offering, to Traeger, Inc., and (2) prior to the completion of such conversion, to TGPX Holdings I LLC. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Corporate Conversion and Initial Public Offering” in this Quarterly Report on Form 10-Q for further information.

ii

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

TRAEGER, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except share and per share amounts)

	March 31, 2022		December 31, 2021
ASSETS
Current Assets
Cash and cash equivalents	$	11,098	$	16,740
Accounts receivable, net	163,239		92,927
Inventories	164,127		145,038
Prepaid expenses and other current assets	12,724		15,036
Total current assets	351,188		269,741
Property, plant, and equipment, net	64,691		55,477
Goodwill	297,047		297,047
Intangible assets, net	544,579		555,151
Other long-term assets	11,039		3,608
Total assets	$	1,268,544	$	1,181,024
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	38,366	$	42,694
Accrued expenses	98,969		69,773
Line of credit	49,160		41,138
Current portion of capital leases	414		420
Current portion of contingent consideration	12,400		12,200
Other current liabilities	1,002		—
Total current liabilities	200,311		166,225
Notes payable	417,734		379,395
Capital leases, net of current portion	624		677
Contingent consideration, net of current portion	14,600		13,100
Deferred tax liability	11,681		11,673
Other non-current liabilities	437		434
Total liabilities	645,387		571,504
Commitments and contingencies—See Note 11
Stockholders' equity:
Preferred stock, $0.0001 par value; 25,000,000 shares authorized and no shares issued or outstanding as of March 31, 2022 and December 31, 2021	—		—
Common stock, $0.0001 par value; 1,000,000,000 shares authorized
Issued and outstanding shares - 118,077,546 and 117,547,916 as of March 31, 2022 and December 31, 2021	12		12
Additional paid-in capital	809,896		794,413
Accumulated deficit	(193,251)		(184,819)
Accumulated other comprehensive income (loss)	6,500		(86)
Total stockholders' equity	623,157		609,520
Total liabilities and stockholders' equity	$	1,268,544	$	1,181,024

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

1

TRAEGER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(unaudited)

(in thousands, except share and per share amounts)

	Three Months Ended March 31,
	2022		2021
Revenue	$	223,710	$	235,573
Cost of revenue	140,145		134,942
Gross profit	83,565		100,631
Operating expenses:
Sales and marketing	33,094		30,851
General and administrative	42,869		13,556
Amortization of intangible assets	8,889		8,301
Change in fair value of contingent consideration	1,700		—
Total operating expense	86,552		52,708
Income (loss) from operations	(2,987)		47,923
Other income (expense):
Interest expense	(5,837)		(7,812)
Other income (expense), net	544		(458)
Total other expense	(5,293)		(8,270)
Income (loss) before provision for income taxes	(8,280)		39,653
Provision for income taxes	152		724
Net income (loss)	$	(8,432)	$	38,929
Net income (loss) per share, basic and diluted	$	(0.07)	$	0.36
Weighted average common shares outstanding, basic and diluted	117,889,233		108,724,387
Other comprehensive income (loss):
Foreign currency translation adjustments	$	(3)	$	—
Change in cash flow hedge	6,589		—
Total other comprehensive income	6,586		—
Comprehensive income (loss)	$	(1,846)	$	38,929

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

2

TRAEGER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER'S AND STOCKHOLDERS' EQUITY

(unaudited)

(in thousands, except unit and share amounts)

	Three Months Ended March 31, 2022
	Common Units			Common Stock			Members Capital		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Member's and Stockholders'  Equity
	Units	No Par Value		Shares	Amount
Balance at December 31, 2021	—	$	—	117,547,916	$	12	$	—	$	794,413	$	(184,819)	$	(86)	$	609,520
Issuance of common stock under stock plan	—	—		529,630	—				—		—		—		—
Equity-based compensation	—	—		—	—		—		15,483		—		—		15,483
Net loss	—	—		—	—		—		—		(8,432)		—		(8,432)
Foreign currency translation adjustments	—	—		—	—		—		—		—		(3)		(3)
Change in cash flow hedge	—	—		—	—		—		—		—		6,589		6,589
Balance at March 31, 2022	—	$	—	118,077,546	$	12	$	—	$	809,896	$	(193,251)	$	6,500	$	623,157
	Three Months Ended March 31, 2021
	Common Units			Common Stock			Members Capital		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Member's and Stockholders'  Equity
	Units	No Par Value		Shares	Amount
Balance at December 31, 2020	108,724,422	$	—	—	$	—	$	571,038	$	—	$	(95,998)	$	—	$	475,040
Equity-based compensation	—	—		—	—		956		—		—		—		956
Net income	—	—		—	—		—		—		38,929		—		38,929
Balance at March 31, 2021	108,724,422	$	—	—	$	—	$	571,994	$	—	$	(57,069)	$	—	$	514,925

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

3

TRAEGER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

	Three Months Ended March 31,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(8,432)	$	38,929
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation of property, plant and equipment	2,481		2,225
Amortization of intangible assets	10,645		8,466
Amortization of deferred financing costs	495		749
Loss on disposal of property, plant and equipment	152		79
Equity-based compensation expense	15,483		956
Bad debt expense	72		—
Unrealized loss on derivative contracts	570		3,349
Change in fair value of contingent consideration	1,700		—
Change in operating assets and liabilities:
Accounts receivable	(70,383)		(99,293)
Inventories, net	(19,089)		(6,697)
Prepaid expenses and other current assets	1,741		(1,844)
Other long-term assets	4		—
Accounts payable and accrued expenses	17,638		26,531
Other non-current liabilities	12		6
Net cash used in operating activities	(46,911)		(26,544)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant, and equipment	(4,524)		(4,865)
Capitalization of patent costs	(124)		(110)
Net cash used in investing activities	(4,648)		(4,975)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds on line of credit	46,100		50,000
Repayments on line of credit	(78)		(12,000)
Repayments of long-term debt	—		(852)
Principal payments on capital lease obligations	(105)		(84)
Net cash provided by financing activities	45,917		37,064
Net increase (decrease) in cash and cash equivalents	(5,642)		5,545
Cash and cash equivalents at beginning of period	16,740		11,556
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	11,098	$	17,101

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

4

TRAEGER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

(Continued)	Three Months Ended March 31,
	2022		2021
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest	$	4,897	$	6,928
Cash paid for income taxes	$	654	$	—
NON-CASH FINANCING AND INVESTING ACTIVITIES
Equipment purchased under capital leases	$	56	$	219
Property, plant, and equipment included in accounts payable and accrued expenses	$	7,226	$	992

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

5

TRAEGER, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Nature of Operations – Traeger, Inc. and its wholly owned Subsidiaries (collectively "Traeger" or the "Company") design, source, sell, and support wood pellet fueled barbecue grills sold to retailers, distributors, and direct to consumers. The Company produces and sells the pellets used to fire the grills and also sells Traeger-branded rubs, spices, sauces and premium frozen meal kits, as well as grill accessories (including covers, barbecue tools, trays, liners, MEATER smart thermometers and merchandise). A significant portion of the Company’s sales are generated from customers throughout the United States ("U.S."), and the Company continues to develop distribution in Canada and Europe. The Company’s headquarters are in Salt Lake City, Utah.

In July 2021, the Company effected a forward split of its 10 common units into 108,724,422 common units. All unit, per unit and related information presented in the accompanying consolidated financial statements have been retroactively adjusted, where applicable, to reflect the impact of the split of common units.

Immediately prior to the effectiveness of the registration statement pertaining to the Company’s initial public offering ("IPO") on July 28, 2021, the Company converted from a Delaware limited liability company into a Delaware corporation, and changed its name from TGPX Holdings I LLC to Traeger, Inc. Pursuant to the statutory corporate conversion (the "Corporate Conversion"), all of the outstanding limited liability company interests of TGPX Holdings I LLC were converted into shares of common stock of Traeger, Inc., and TGP Holdings LP (the "Partnership") became the holder of such shares of common stock of Traeger, Inc. In connection with the Corporate Conversion, the Partnership liquidated and distributed these shares of common stock to the holders of partnership interests in the Partnership in direct proportion to their respective interests in the Partnership based upon the value of Traeger, Inc. at the time of the IPO, with a value implied by the initial public offering price of the shares of common stock sold in the IPO. Based on the IPO price of $18.00 per share, following the Partnership’s liquidation and distribution, including the elimination of any fractional shares resulting therefrom, and the Corporate Conversion, the Company had 108,724,387 shares of common stock outstanding immediately prior to the IPO.

Basis of Presentation and Principles of Consolidation – The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

The balance sheet as of December 31, 2021 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 29, 2022 (the "Annual Report on Form 10-K").

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to fairly present the consolidated financial position, results of operations and cash flows for the interim periods presented. Operating results for the three months ended March 31, 2022 are not necessarily indicative of results that may be expected for any other interim period or for the year ended December 31, 2022.

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.    

Emerging Growth Company Status – The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 ("JOBS Act"). Under the JOBS Act, emerging growth companies can delay adopting new or revised financial accounting standards until such time as those standards apply to private companies. The Company has elected to use the extended transition period for complying with the adoption of new or revised accounting standards and as a result of this election, its financial statements may not be comparable to companies that comply with public company effective dates. The Company will remain an emerging growth company until the earliest of (i) the end of the fiscal year in which the market value of its common stock that is held by non-affiliates is at least $700 million as of the last business day of its most recently completed second fiscal quarter, (ii) the end of the fiscal year in which the Company has total annual gross revenues of $1.07 billion or more during such fiscal year, (iii) the date on which the Company issues more than $1.0 billion in non-convertible debt in a three-year period, or (iv) December 31, 2026.

6

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates – The preparation of these financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates and the assumptions made by management that present the greatest amount of estimation uncertainty include business combination accounting for the fair value of assets acquired, liabilities assumed, and contingent considerations, customer credits and returns, obsolete inventory reserves, valuation and impairment of intangible assets including goodwill, unrealized positions on derivatives and reserves for warranty. Actual results could differ from these estimates.

Concentrations – Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash in banks, trade accounts receivable, foreign currency contracts, and business activity with certain third-party contract manufacturers of our products. Credit is extended to customers based on an evaluation of the customer’s financial condition and collateral is not generally required in the Company’s sales transactions. Three customers (each large U.S. retailers) that accounted for a significant portion of net sales are as follows:

	Three Months Ended March 31,
	2022		2021
Customer A	17	%	24	%
Customer B	23	%	23	%
Customer C	14	%	16	%

As of March 31, 2022, customers A, B, and C accounted for a significant portion of trade accounts receivable of 22%, 25%, and 13%, compared to 45%, 13%, and 13% as of December 31, 2021. Concentrations of credit risk exist to the extent credit terms are extended with these three large customers. A business failure on the part of any one of the three customers could result in a material amount of exposure to the Company. No other single customer accounted for greater than 10% of the Company’s net sales for the three months ended March 31, 2022 and 2021, respectively. Additionally, no other single customer accounted for greater than 10% of trade accounts receivable as of March 31, 2022 and December 31, 2021.

The Company’s sales to dealers and distributors located outside the United States are generally denominated in U.S. dollars. The Company does have sales to certain dealers located in the European Union, the United Kingdom and Canada which are denominated in Euros, British Pounds and Canadian Dollars, respectively.

The Company relies on a limited number of suppliers for its contract manufacturing of grills and accessories. A significant disruption in the operations of certain of these manufacturers, or in the transportation of parts and accessories would impact the production of the Company’s products for a substantial period of time, which could have a material adverse effect on the Company’s business, financial condition and results of operations.

Recently Issued Accounting Standards

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and the FASB has also certain subsequent related ASUs that supplement and amend Topic 842. The guidance in Topic 842 replaces the leasing guidance in Topic 840, Leases. Under the new guidance, lessees are required to recognize right of use assets related to the leases and lease liabilities on the balance sheet. For leases with terms of 12 months or less, the lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2021 and for interim periods within fiscal years beginning after December 15, 2022.

The Company has adopted this guidance effective January 1, 2022 and will present the impact of the new guidance in its annual statements as of December 31, 2022 and its interim statements thereafter. Management is currently in the process of evaluating its existing portfolio of operating leases for right of use assets and lease liabilities that would need be recognized upon implementation and the impact of this guidance on its consolidated financial statements and related disclosures.

There have been no material changes to the implementation or evaluation of “Recently Issued Accounting Standards” as described in the Company's annual audited financial statements for the period ended December 31, 2021.

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3 – REVENUE

The following table disaggregates revenue by product category, geography, and sales channel for the periods indicated (in thousands):

	Three Months Ended March 31,
Revenue by product category	2022		2021
Grills	$	150,431	$	178,655
Consumables	39,651		40,813
Accessories	33,628		16,105
Total revenue	$	223,710	$	235,573

	Three Months Ended March 31,
Revenue by geography	2022		2021
North America	$	207,339	$	226,251
Rest of world	16,371		9,322
Total revenue	$	223,710	$	235,573

	Three Months Ended March 31,
Revenue by sales channel	2022		2021
Retail	$	203,217	$	229,827
Direct to consumer	20,493		5,746
Total revenue	$	223,710	$	235,573

4 – BUSINESS COMBINATION

On July 1, 2021 (the "Acquisition Date"), pursuant to a share purchase agreement (the "Share Purchase Agreement"), the Company acquired all outstanding shares of Apption Labs Limited and its subsidiaries (collectively "Apption Labs"), a technology company that specializes in the manufacture and design of innovative hardware and software related to small kitchen appliances, including the MEATER smart thermometer and related technology. The total purchase consideration was approximately $78.3 million, net of cash acquired, which is comprised of cash paid, contingent consideration, net working capital adjustments, and escrow consideration. The acquisition of Apption Labs will help facilitate the Company's entry into the adjacent accessories markets with a highly complementary product that the Company believes will bolster our existing portfolio, create efficiencies for consumers and expose the Company to new growth channels.

The purchase consideration includes contingent cash consideration payable to the sellers based on achievement of certain revenue thresholds for fiscal years 2021 and 2022 as detailed in the Share Purchase Agreement. The acquisition date fair value of contingent consideration obligation of $21.5 million is estimated based on the probability assessments with respect to the likelihood of achieving the performance targets and discount rates consistent with the level of risk of achievement. In April 2022, the Company paid $12.6 million associated with the contingent cash consideration to the sellers based on achievement of certain revenue thresholds for fiscal year 2021. The range of the remaining undiscounted amounts the Company may be required to pay under the contingent consideration arrangement is between $0 and $27.4 million for fiscal year 2022. See Note 9 – Fair Value Measurement for subsequent measurements of this contingent liability as of March 31, 2022.

The Company recognized $1.8 million of acquisition-related costs during fiscal year 2021 that were recorded in general and administrative expense in the condensed consolidated statements of operations and comprehensive income (loss).

The operating results of Apption Labs have been included in the Company's condensed consolidated statements of operations and comprehensive income (loss) since the acquisition date. Actual and pro forma revenue and results of operations for the acquisition have not been presented because they do not have a material impact to the consolidated revenue and results of operations, either individually or in the aggregate.

Determination and allocation of the consideration transferred to net tangible and intangible assets is based upon preliminary estimates. These preliminary estimates and assumptions could change significantly during the measurement period as the Company finalizes the valuations of the net tangible and intangible assets acquired and liabilities assumed. Balances subject to adjustments include, but are not limited to, the valuation of contingent consideration, net working capital adjustments, fair value

8

of acquired inventory, net, fair value of identified intangible assets, goodwill, and the associated deferred tax implications. During the measurement period, the Company may record adjustments to the provisional amounts recognized in the Company’s initial accounting for the acquisition. The Company expects the allocation of the consideration transferred to be final within the measurement period (up to one year from the acquisition date). Any change could result in variances between our future financial results and the amounts recognized in the financial information presented below, including variances in fair values recorded, as well as expenses associated with these items.

The acquisition was accounted for under the acquisition method in accordance with ASC 805. The following table summarizes the preliminary estimated fair values of the consideration transferred, assets acquired and liabilities assumed as of the Acquisition Date (in thousands):

Consideration Transferred	Fair Value
Cash paid, net of cash acquired	$	36,957
Contingent consideration	21,500
Other closing consideration	19,890
Total purchase consideration, net of cash acquired	$	78,347
Assets acquired
Accounts receivable, net	$	2,190
Inventory, net	5,431
Prepaid and other current assets	293
Property and equipment	1,357
Intangible Assets	53,100
Goodwill	40,200
Total assets acquired	102,571
Liabilities assumed
Accounts payable and accrued liabilities	8,474
Deferred tax liability	12,646
Other current liabilities	344
Other non-current liabilities	2,760
Total liabilities assumed	24,224
Total net assets, net of cash acquired	$	78,347

The excess purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, none of which is expected to be deductible for tax purposes. The goodwill generated from these transactions is attributable to the expected synergies to be achieved upon consummation of the business combinations and the assembled workforce values.

The following table details the identifiable intangible assets acquired at their fair value and their corresponding useful lives at the Acquisition Date (amounts in thousands):

Identifiable Intangible Assets	Fair Value		Estimated Useful Life (in years)
Technology	$	32,300	5
Trademarks	17,700		10
Distributor relationships	2,400		8
Non-compete arrangements	700		2.5
	$	53,100

Identifiable intangible assets acquired primarily include technology, trademarks, distributor relationship, and non-compete arrangements. The fair value of technology acquired in the acquisition was determined using the excess earnings model, the trademarks acquired was determined using a relief from royalty model, the distributor relationships acquired was determined using the distributor model, and the non-compete arrangements acquired were determined using the with and without model. These models utilize certain unobservable inputs, including discounted cash flows, historical and projected financial information, royalty rates, distributor attrition rates, and technology obsolescence rates, classified as Level 3 measurements as defined by Fair Value Measurement (Topic 820). Amortization of technology is recorded in cost of revenue and amortization of

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trademarks, distributor relationships and non-compete arrangements are recorded in amortization of intangible assets in the condensed consolidated statements of operations and comprehensive income (loss).

5 – ACCOUNTS RECEIVABLES, NET

Accounts receivable consists of the following (in thousands):

	March 31, 2022		December 31, 2021
Trade accounts receivable	$	183,190	$	108,620
Allowance for doubtful accounts	(1,140)		(1,090)
Reserve for returns, discounts and allowances	(18,811)		(14,603)
Total accounts receivable, net	$	163,239	$	92,927

6 – INVENTORIES

Inventories consisted of the following (in thousands):

	March 31, 2022		December 31, 2021
Raw materials	$	1,743	$	3,106
Work in process	14,199		11,523
Finished goods	148,185		130,409
Inventories	$	164,127	$	145,038

Included within inventories are adjustments of $0.9 million and $0.7 million at March 31, 2022 and December 31, 2021, respectively, to record inventory to net realizable value.

7 – ACCRUED EXPENSES

Accrued expenses consisted of the following (in thousands):

	March 31, 2022		December 31, 2021
Accrual for inventories in-transit	$	31,370	$	28,536
Warranty accrual	8,731		8,326
Accrued compensation and bonus	8,904		7,025
Build-to-suit lease liability	8,823		4,273
Other	41,141		21,613
Accrued expenses	$	98,969	$	69,773

The changes in the Company’s warranty accrual, included in accrued expenses on the accompanying condensed consolidated balance sheets, were as follows for the fiscal periods indicated (in thousands):

	Three Months Ended March 31,
	2022		2021
Warranty accrual, beginning of period	$	8,326	$	6,728
Warranty claims	(1,484)		(1,461)
Warranty costs accrued	1,889		2,804
Warranty accrual, end of period	$	8,731	$	8,071

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8 – DERIVATIVES

Interest Rate Swap

On February 25, 2022, the Company entered into a floating-to-fixed interest rate swap agreement to hedge or otherwise protect against the Eurocurrency Base Rate (as defined in the First Lien Credit Agreement) fluctuations on a portion of the Company's variable rate debt. The agreement provides for a notional amount of $379.2 million, fixed rate of 2.08% and a maturity date of February 28, 2026. This agreement was designated as a cash flow hedge on the exposure of the variability of future cash flows subject to the variable monthly interest rates on $379.2 million of the term loan portion under the First Lien Term Loan Facility (as defined below). The Company assessed hedge effectiveness at the time of entering into the agreement, utilizing a regression analysis, and determined the hedge is expected to be highly effective.

As a cash flow hedge, the interest rate swap is revalued at current market rates, with the changes in valuation being recorded in other comprehensive income within the condensed consolidated statements of operations and comprehensive income (loss), to the extent that the hedge is effective. The gains or losses on the interest rate swaps are recorded in accumulated other comprehensive income (loss) within the condensed consolidated balance sheets and are reclassified into interest expense in the periods in which the interest rate swap affects earnings. The cash flows related to interest settlements and changes in valuation are classified consistent with the treatment of the hedged monthly interest payments generally as operating activities on the condensed consolidated statement of cash flows.

The Company evaluates hedge effectiveness of the interest rate swap quarterly, or more frequently if necessary, by verifying the critical terms of the interest rate swap continue to match the critical terms of the hedged monthly interest payments and the hedge was expected to be highly effective as of March 31, 2022. Thus, the change in fair value of the derivative instrument offsets the change in fair value on the hedged debt, and there is no ineffectiveness to be recorded in earnings.

As of March 31, 2022, the net asset balance derived from the monthly interest settlements related to the single cash flow hedge contract was $6.6 million.

Foreign Currency Contracts

The Company is exposed to foreign currency exchange rate risk related to its purchases and international operations. The Company utilizes foreign currency contracts to manage foreign currency risk in purchasing inventory and capital equipment, and future settlement of foreign denominated assets and liabilities. The volume of the Company’s foreign currency contract activity is limited by the amount of transaction exposure in each foreign currency and the Company’s election as to whether to hedge the transactions. There are no derivative instruments entered into for speculative purposes.

The Company had outstanding foreign currency contracts as of March 31, 2022 and December 31, 2021. The Company did not elect hedge accounting for any of these contracts. All outstanding contracts are with the same counterparty and thus the fair market value of the contracts in an asset position are offset by the fair market value of the contracts in a liability position to reach a net position. For periods where the net position is an asset balance, the balance is recorded within prepaid expenses and other current assets on the condensed consolidated balance sheets and for periods where the net position is a liability balance, the balance is recorded within derivative liabilities on the condensed consolidated balance sheets. Changes in the net fair value of contracts are recorded in other expense in the condensed consolidated statements of operations and comprehensive income (loss).

The gross and net balances from foreign currency contract positions were as follows (in thousands):

	March 31, 2022		December 31, 2021
Gross Asset Fair Value	$	869	$	1,439
Gross Liability Fair Value	—		—
Net Asset Fair Value	$	869	$	1,439

Gains (losses) from foreign currency contracts were recorded in other income (expense) within the accompanying condensed consolidated statements of operations and comprehensive income (loss) as follows (in thousands):

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	Three Months Ended March 31,
	2022		2021
Realized gains	$	1,165	$	2,549
Unrealized losses	(570)		(3,349)
Total gains (losses)	$	595	$	(800)

9 – FAIR VALUE MEASUREMENTS

Financial assets and liabilities valued using Level 1 inputs are based on unadjusted quoted market prices within active markets. Financial assets and liabilities valued using Level 2 inputs are based primarily on observable trades and/or prices for similar assets or liabilities in active or inactive markets. Financial assets and liabilities valued using Level 3 inputs are primarily valued using management’s assumptions about the assumptions market participants would utilize in pricing the asset or liability.

The following table presents information about the fair value measurement of the Company’s financial instruments (in thousands):

Financial Instruments Recorded at Fair Value on a Recurring Basis:	Fair Value Measurement Level	As of March 31, 2022		As of December 31, 2021
Assets:
Derivative assets—foreign currency contracts (1)	2	$	869	$	1,439
Derivative assets—interest rate swap contract (2)	2	7,590		—
Total assets		$	8,459	$	1,439
Liabilities:
Contingent consideration—earn out (3)	3	$	27,000	$	25,300
Derivative liability—interest rate swap contract (4)	2	1,002		—
Total liabilities		$	28,002	$	25,300

(1)Included in prepaid expenses and other current assets in the condensed consolidated balance sheets

(2)Included in other long-term assets in the condensed consolidated balance sheets

(3)Included in current and long-term contingent consideration in the condensed consolidated balance sheets

(4)Included in other current liabilities in the condensed consolidated balance sheets

Transfers of assets and liabilities among Level 1, Level 2 and Level 3 are recorded as of the actual date of the events or change in circumstances that caused the transfer. As of March 31, 2022 and December 31, 2021, there were no transfers between levels of the fair value hierarchy of the Company’s assets or liabilities measured at fair value.

The fair value of the Company’s derivative assets through its foreign currency contracts is based upon observable market-based inputs that reflect the present values of the differences between estimated future foreign currency rates versus fixed future settlement prices per the contracts, and therefore, are classified within Level 2. The fair value of the Company's interest rate swap contracts held with financial institutions are classified as Level 2 financial instruments, which are valued using observable underlying interest rates and market-determined risk premiums at the reporting date.

The fair values of the Company's contingent consideration earn out obligation associated with the Apption Labs business combination is estimated using a Monte Carlo model. Key assumptions used in these estimates include probability assessments with respect to the likelihood of achieving the performance targets and discount rates of 11.41% and 11.47% for each respective earn out period, consistent with the level of risk of achievement. As these are significant unobservable inputs, the contingent consideration earn out obligation is included in Level 3 inputs.

At each reporting date, the Company revalues the contingent consideration obligation to its fair value and records increases and decreases in fair value in the revaluation of contingent consideration in our condensed consolidated statements of operations and comprehensive income (loss). Changes in the fair value of the contingent consideration obligation results from changes in discount periods and rates, and changes in probability assumptions with respect to the likelihood of achieving the performance targets.

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The following table presents the fair value contingent consideration (in thousands):

Balance at December 31, 2021	$	25,300
Payments of contingent consideration	—
Change in fair value of contingent consideration	1,700
Balance at March 31, 2022	$	27,000

The following financial instruments are recorded at their carrying amount (in thousands):

	As of March 31, 2022				As of December 31, 2021
Financial Instruments Recorded at Carrying Amount:	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Liabilities:
Debt—First Lien (1)	$	426,200	$	409,254	$	388,195	$	386,139
Total liabilities	$	426,200	$	409,254	$	388,195	$	386,139

(1)Included in notes payable in the consolidated balance sheet. Due to the unobservable nature of the inputs these financial instruments are considered to be Level 3 instruments in the fair value hierarchy.

10 – DEBT AND FINANCING ARRANGEMENTS

Notes Payable

On June 29, 2021, the Company refinanced its existing credit facilities and entered into a new first lien credit agreement, as borrower, with Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and other lenders party thereto as joint lead arrangers and joint bookrunners (the "First Lien Credit Agreement"). The First Lien Credit Agreement provides for a $560.0 million senior secured term loan facility (the "First Lien Term Loan Facility"), including a $50.0 million delayed draw term loan, and a $125.0 million revolving credit facility (the "Revolving Credit Facility" and, together with the First Lien Term Loan Facility, the "Credit Facilities").

The First Lien Term Loan Facility accrues interest at a rate per annum that considers both fixed and floating components. Following the completion of the Company's IPO in July 2021, the fixed component ranges from 3.00% to 3.25% per annum based on the Company's Public Debt Rating (as defined in the First Lien Credit Agreement). The floating component is based on the Eurocurrency Base Rate (as defined in the First Lien Credit Agreement) for the relevant interest period. The First Lien Term Loan Facility requires periodic principal payments from December 2021 through June 2028, with any remaining unpaid principal and any accrued and unpaid interest due on the maturity date of June 29, 2028. The delayed draw term loan includes a variable commitment fee, which is based on the fixed interest rate and ranges from 0% to the Applicable Rate (as defined in the First Lien Credit Agreement). As of March 31, 2022, the total principal amount outstanding on the First Lien Term Loan Facility was $379.2 million, and the Company had no outstanding principal balance under the delayed draw term loan. In April 2022, the Company borrowed $12.5 million under the delayed draw term loan for purposes of financing the earn out obligation associated with the acquisition of Apption Labs as described in Note 4 – Business Combinations.

Loans under the Revolving Credit Facility accrue interest at a rate per annum that considers both fixed and floating components. Following completion of the Company's IPO in July 2021, the fixed component ranges from 2.75% to 3.25% per annum based on the Company's most recently determined First Lien Net Leverage Ratio (as defined in the First Lien Credit Agreement). The floating component is based on the Eurocurrency Base Rate for the relevant interest period. The Revolving Credit Facility also has a variable commitment fee, which is based on the Company's most recently determined First Lien Net Leverage Ratio and ranges from 0.25% to 0.50% per annum on undrawn amounts. Letters of credit may be issued under the Revolving Credit Facility in an amount not to exceed $15.0 million which, when issued, lower the overall borrowing capacity of the facility. The Revolving Credit Facility expires on June 29, 2026 and no principal payments are due before such date. As of March 31, 2022, the Company had drawn down $47.0 million under the Revolving Credit Facility for general corporate and working capital purposes.

The First Lien Credit Agreement contains certain affirmative and negative covenants that limit the Company's ability to, among other things, incur additional indebtedness or liens (with certain exceptions), make certain investments, engage in fundamental changes or transactions including changes of control, transfer or dispose of certain assets, make restricted payments (including dividends), engage in new lines of business, make certain prepayments and engage in certain affiliate transactions. In addition, the Company is subject to a financial covenant and is required to maintain a First Lien Net Leverage Ratio (as defined in the

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First Lien Credit Agreement) not to exceed 6.20 to 1.00. As of March 31, 2022, the Company was in compliance with the covenants under the Credit Facilities.

Accounts Receivable Credit Facility

On November 2, 2020, the Company entered into a receivables financing agreement (as amended, the "Receivables Financing Agreement"). Through the Receivables Financing Agreement, the Company participates in a trade receivables securitization program, administered on its behalf by MUFG Bank Ltd. ("MUFG"), using outstanding accounts receivable balances as collateral, which have been contributed by the Company to its wholly owned subsidiary and special purpose entity, Traeger SPE LLC (the "SPE"). While the Company provides operational services to the SPE, the receivables are owned by the SPE once contributed to it by the Company. The Company is the primary beneficiary and holds all equity interests of the SPE, thus the Company consolidates the SPE without any significant judgments.

On June 29, 2021, the Company entered into Amendment No. 1 to the Receivables Financing Agreement and increased the net borrowing capacity from the prior range of $30.0 million to $45.0 million up to $100.0 million. The borrowing capacity fluctuates at each month end based upon the amount of eligible outstanding domestic accounts receivables to be used as collateral. As of March 31, 2022, the Company had drawn down $49.2 million under this facility for general corporate and working capital purposes. The Company is required to pay an annual upfront fee for the facility, along with fixed interest on outstanding cash advances of 1.7%, a floating component based on the CP Rate (as defined in the Receivables Financing Agreement), and an unused capacity charge that ranges from 0.25% to 0.5%. The facility is set to terminate on June 29, 2024.

In connection with aged accounts receivable that resulted from a new payment program implemented by one of the Company's largest customers, the Company amended the covenants under the Receivables Financing Agreement with MUFG for the month of January 2022. By February 1, 2022, the Company had collected the majority of the aged accounts receivable balance and was in compliance with the covenants under the Receivables Financing Agreement. As of March 31, 2022, the Company was in compliance with the covenants under the Receivables Financing Agreement.

11 – COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company is subject to various claims, complaints and legal actions in the normal course of business. The Company does not believe it has any currently pending litigation of which the outcome will have a material adverse effect on its operations or financial position.

12 – EQUITY-BASED COMPENSATION

Incentive Units

On September 25, 2017, AEA Investors LP, TCP Traeger Holdings SPV LLC, Ontario Limited, and other management and limited partners purchased a 100% equity stake (the "Transaction") in Traeger Pellet Grills Holdings LLC through a merger agreement in which TGP Holdings LP was formed. In connection with the Transaction, TGP Holdings LP established a management incentive equity pool, authorizing a maximum of 99,389 total units, or 15% of the total authorized units, for purposes of issuing compensatory awards to employees and certain directors of the Company, and its subsidiaries. Pursuant to the Amended and Restated Limited Partnership Agreement of TGP Holdings LP, dated as of September 25, 2017, eligible management employees and directors were granted a certain number of Class B Units of TGP Holdings LP which were intended to be treated as profit interests for tax purposes. The participation threshold of the Class B Units was historically established for each grant based on the fair market value of TGP Holdings LP membership units at the date of the grant.

On July 12, 2021, the board of directors of TGP Holdings GP Corp, a Delaware corporation and the then general partner of TGP Holdings LP, approved the acceleration of vesting of all unvested and outstanding Class B Units, subject to the successful completion of the Company's IPO. The approval for the acceleration of vesting was determined to be a modification. As a result, the Company evaluated each of the modified awards to determine the necessary accounting. At the time of the IPO, awards where vesting was probable prior to and after the modification, resulted in an acceleration of the remaining expense based on the original grant date fair value and awards where vesting was not probable, resulted in recognition of the fair value of the modified awards as of the modification date.

In connection with the completion of the Company’s IPO, Class B Units that were outstanding and vested were, as part of the Corporate Conversion, converted into shares of common stock of the Company. The Company recorded equity compensation expense of approximately $47.4 million as a result of the acceleration of vesting of the unvested Class B Units based on the IPO

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price of $18.00. Given the proximity of the modification to the IPO, the expense recorded by the Company was based on the actual conversion of the Class B Unit into common stock and the valuation of the Company at time of the IPO.

Restricted Stock Unit Awards

The Traeger, Inc. 2021 Incentive Award Plan (the "2021 Plan"), became effective as of July 28, 2021, the day prior to the first public trading date of our common stock. The 2021 Plan provides for the grant of stock options, including incentive stock options, and nonqualified stock options, restricted stock, dividend equivalents, restricted stock units, stock appreciation rights, and other stock or cash awards to the Company’s employees and consultants and directors of the Company and its subsidiaries. Subject to the adjustment described in the following sentence, the initial number of shares of the Company's common stock available for issuance under awards granted pursuant to the 2021 Plan is equal to 14,105,750 shares, which shares may be authorized but unissued shares, treasury shares, or shares purchased in the open market. On January 1, 2022, an additional 5,877,395 shares of common stock became available for issuance under awards granted pursuant to the 2021 Plan, as a result of the operation of an automatic annual increase provision in the 2021 Plan. Notwithstanding anything to the contrary in the 2021 Plan, no more than 100,000,000 shares of our common stock may be issued pursuant to the exercise of incentive stock options under the 2021 Plan.

The Company's equity-based compensation was classified as follows in the condensed consolidated statements of operations and comprehensive income (loss) (in thousands):

	Three Months Ended March 31,
	2022		2021
Cost of revenue	$	138	$	6
Sales and marketing	1,763		215
General and administrative	13,582		735
Total equity-based compensation	$	15,483	$	956

On July 20, 2021, the Board approved grants of restricted stock units ("RSUs") covering 12,163,242 shares of common stock that became effective in connection with the completion of the Company’s IPO, which include RSUs covering 7,782,957 shares granted to the Company's Chief Executive Officer ("CEO") and RSUs covering 4,380,285 shares granted to other employees, directors, and certain non-employees.

CEO Awards

The awards include a combination of time-based and performance-based awards. Specifically, time-based RSUs covering 2,594,319 shares ("RSU CEO Award") and performance-based RSUs ("PSUs") covering 5,188,638 shares ("PSU CEO Award") were granted to the CEO.

RSU CEO Award

The RSU CEO Award will vest as to 20% of the underlying shares on each of the first, second, third, fourth and fifth anniversaries of the closing of the IPO, subject to continued service with the Company as its CEO or executive chairman of its Board.

Upon a termination of the CEO's service by the Company without cause, by the CEO for good reason, or due to the CEO's disability (each as defined in his award agreement) or due to his death (each, a "CEO Qualifying Termination"), then, subject to the CEO's (or his estate's) timely execution and non revocation of a general release of claims and continued compliance with the restrictive covenants to which the CEO is bound through the effective date of the general release of claims, any unvested portion of the RSU CEO Award will vest. To the extent any of the RSU CEO Award vests, the CEO must hold the vested and settled shares for two years following their vesting date, subject to certain exceptions set forth in the award agreement.

PSU CEO Award

The PSU CEO Awards will become earned based on the achievement of stock price goals (measured as a volume-weighted stock price over 60 consecutive trading days) at any time until the tenth anniversary of the closing of the IPO. The PSU CEO Award is divided into five tranches, with the first tranche having a stock price goal of 125% of the IPO price, and each of the next four stock prices goals equal to 125% of the immediately preceding stock price goal. As of March 31, 2022, the first vesting tranche of the PSU CEO Award has been earned based upon achievement of the applicable stock price goal and will vest based on the table below. The PSU CEO Award will vest on the applicable vesting date described in the following table or,

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if later, the date on which the applicable stock price goal is achieved, subject to the CEO's continued service as our CEO or executive chairman of the Board:

Earned PSUs’ Vesting Tranche	Vesting Date
First Vesting Tranche	50% on the first anniversary and 50% on the second anniversary of the closing of the IPO
Second Vesting Tranche	50% on the second anniversary and 50% on the third anniversary of the closing of the IPO
Third Vesting Tranche	50% on the third anniversary and 50% on the fourth anniversary of the closing of the IPO
Fourth Vesting Tranche	50% on the fourth anniversary and 50% on the fifth anniversary of the closing of the IPO
Fifth Vesting Tranche	50% on the fifth anniversary and 50% on the sixth anniversary of the closing of the IPO

Upon a CEO Qualifying Termination, then, subject to the CEO’s (or his estate's) timely execution and non-revocation of a general release of claims and continued compliance with the restrictive covenants to which the CEO is bound, any previously earned PSUs subject to the CEO PSU Award will vest, and any remaining PSUs that were not previously earned will be forfeited and terminated without consideration. To the extent any of the PSUs subject to the CEO PSU Award vest, the CEO must hold such vested shares for two years following their vesting date, subject to certain exceptions set forth in the award agreement. If the CEO experiences a termination of service other than a CEO Qualifying Termination, all PSUs (including earned PSUs) subject to the PSU CEO Award which have not become vested will be automatically forfeited and terminated as of the termination date without consideration.

In the event the Company incurs a change in control, then any previously-earned PSUs will vest and any remaining PSUs will vest based on the price per share received by or payable with respect to the common stockholders in connection with the transaction, pro-rated to reflect a price per share that falls between two stock price goals.

PSUs that remain unvested as of the expiration date automatically will be forfeited and terminated without consideration.

Other IPO Awards

The RSUs granted to other employees, directors, and certain non-employees, included 3,635,287 time-based RSUs ("IPO RSUs") and 744,998 performance-based RSUs ("IPO PSUs") granted to certain senior level executives of the Company.

IPO RSUs

The IPO RSUs vest based on certain time-based conditions set forth in the applicable award agreement. IPO RSUs granted to certain senior executives of the Company vest as to 50% of the underlying shares on each of the third and fourth anniversaries of the closing of the IPO, subject to continued employment with the Company or one of its subsidiaries.

IPO PSUs

The IPO PSUs consist of two equal tranches, with the first tranche having a stock price goal of 200% of the IPO price and the second tranche having a stock price goal of 300% of the IPO price. Once earned, the applicable IPO PSU will vest as to (i) 50% of the earned PSU upon the later of the first anniversary of the closing of the IPO or the achievement of the applicable stock price goal and (ii) 50% of the earned PSUs upon the later of the second anniversary of the closing of the IPO or the first anniversary of when the respective stock price goal is achieved with respect to the applicable vesting tranche, in each case, subject to continued employment with the Company or one of its subsidiaries.

Upon a termination of employment due to an executive’s disability (each defined in the applicable award agreement) or due to his or her death, then, subject to such executive’s (or his or her estate’s) timely execution and non-revocation of a general release of claims and continued compliance with the restrictive covenants to which such executive is bound, any previously earned PSUs subject to the IPO PSUs will vest, and any remaining PSUs subject to the IPO PSU award that were not previously earned will be automatically forfeited and terminated as of the termination date without consideration.

In the event the Company incurs a change in control, then any previously-earned PSUs will vest and any remaining PSUs will vest based on the price per share received by or payable with respect to the common stockholders in connection with the transaction, pro-rated to reflect a price per share that falls between two stock price goals.

PSUs that remain unvested as of the expiration date automatically will be forfeited and terminated without consideration.

For RSUs and PSUs, the compensation expense is recognized on a straight-line basis over the vesting schedule and on an accelerated basis over the tranche's requisite service period, respectively. In addition, when an award is forfeited prior to the

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vesting date, the Company will recognize an adjustment for the previously recognized expense in the period of the forfeiture, with the exception of performance-based awards for which the requisite service period has been provided.

The Company uses the Monte Carlo pricing model to estimate the fair value of its PSUs as of the grant date, and uses various simulations of future stock prices through the Stochastic model to estimate the fair value over the remaining term of the performance period as of the grant date.

A summary of the time-based restricted stock unit activity during the three months ended March 31, 2022 was as follows:

	Units	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2021	6,274,860	$	18.08
Granted at fair value	4,814	9.97
Vested	(529,907)	18.00
Forfeited	(53,759)	18.14
Outstanding at March 31, 2022	5,696,008	$	18.08

As of March 31, 2022, the Company had $84.1 million of unrecognized equity-based compensation expense related to unvested time-based restricted stock units that is expected to be recognized over a weighted-average period of 3.88 years.

A summary of the performance-based restricted stock unit activity during the three months ended March 31, 2022 was as follows:

	Units	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2021	5,933,636	$	13.25
Granted at fair value	—	—
Vested	—	—
Forfeited	—	—
Outstanding at March 31, 2022	5,933,636	$	13.25

As of March 31, 2022, the Company had $60.0 million of unrecognized equity-based compensation expense related to unvested performance-based units that is expected to be recognized over a weighted-average period of 3.48 years.

13 – INCOME TAXES

For the three months ended March 31, 2022 and 2021, the Company recorded an income tax expense of $0.2 million and $0.7 million, respectively.

The Company regularly evaluates the realizability of its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all the deferred tax assets will not be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, loss carryback and tax planning strategies. Generally, more weight is given to objectively verifiable evidence, such as the cumulative loss in recent years, as a significant piece of negative evidence to overcome. As of March 31, 2022, the Company's U.S. operations have resulted in losses, and as such, the Company maintains a valuation allowance against substantially all its U.S. deferred tax assets.

14 – RELATED PARTY TRANSACTIONS

The Company outsources a portion of its customer service and support through a third party who is an affiliate of the Company through common ownership. The total amount of expenses the Company recorded associated with such services totaled $1.7 million and $1.8 million for the three months ended March 31, 2022 and 2021, respectively. Amounts payable to the third party as of March 31, 2022 and December 31, 2021 was $1.2 million and $1.2 million, respectively.

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15 – EARNINGS (LOSS) PER SHARE

The Company computes basic earnings (loss) per share ("EPS") attributable to common stockholders by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted EPS is calculated by adjusting weighted average shares outstanding for the dilutive effect of potential common shares, determined using the treasury-stock method. For purposes of the diluted EPS calculation, restricted stock units are considered to be potential common shares.

The following table sets forth the computation of the Company’s basic and diluted EPS attributable to common stockholders for the fiscal periods indicated (in thousands, except share and per share amounts):

	Three Months Ended March 31,
	2022		2021
Net income (loss)	$	(8,432)	$	38,929
Weighted-average common shares outstanding—basic (1)	117,889,233		108,724,387
Effect of dilutive securities:
Restricted stock units	—		—
Weighted-average common shares outstanding—diluted (1)	117,889,233		108,724,387
Earnings (loss) per share
Basic and diluted	$	(0.07)	$	0.36

(1)For the three months ended March 31, 2021, the Company retrospectively applied shares of common stock outstanding upon the Corporate Conversion, immediately prior to the IPO. Refer to Note 1 – Description of Business and Basis of Presentation for a description of the Corporate Conversion.

The following table includes the number of units that may be dilutive common shares in the future, and were not included in the computation of diluted earnings (loss) per share because the effect was anti-dilutive for the fiscal periods indicated:

	Three Months Ended March 31,
	2022	2021
Restricted stock units	11,629,644	—

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of financial condition and results of operations should be read together with our consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the year ended December 31, 2021 (our "Annual Report on Form 10-K"), filed with the Securities and Exchange Commission (the “SEC”), on March 29, 2022. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. As a result of many important factors, such as those set forth in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K, our actual results may differ materially from those anticipated in these forward-looking statements. For convenience of presentation, some of the numbers have been rounded in the text below.

Overview

Traeger is the creator and category leader of the wood pellet grill, an outdoor cooking system that ignites all-natural hardwoods to grill, smoke, bake, roast, braise, and barbecue. Our grills are versatile and easy to use, empowering cooks of all skill sets to create delicious meals with a wood-fired flavor that cannot be replicated with gas, charcoal, or electric grills. Grills are at the core of our platform and are complemented by Traeger wood pellets, rubs, sauces, premium frozen meal kits and accessories.

Our marketing strategy has been instrumental in building our brand and driving customer advocacy and revenue. We have disrupted the outdoor cooking market and created a passionate community, the Traegerhood, which includes foodies, pitmasters, backyard heroes, moms and dads, professional athletes, outdoorsmen and outdoorswomen, and world-class chefs. This community, together with our various marketing initiatives, has helped to promote our brand and products to the wider consumer population and supported our efforts to redefine outdoor cooking as an experience accessible to everyone. We have an active online and social media presence and a content-rich website that drives significant customer engagement and brings our Traegerhood together. We also directly engage with our current and target customers by sponsoring and participating in a variety of events, including live shows, outdoor festivals, rodeos, music and film festivals, barbecue competitions, fishing tournaments, and retailer events. We believe the style and authenticity of our customer engagement reinforces our brand and drives new and existing customer interest in our products and community.

Our revenue is primarily generated through the sale of our wood pellet grills, consumables and accessories. We currently offer three series of grills – Pro, Ironwood and Timberline – as well as a selection of smaller, portable grills. Our grills are available in a number of different sizes and can be upgraded through a variety of accessories. A growing number of our grills feature WiFIRE technology, which allows users to monitor and adjust their grills remotely using our Traeger app. Our consumables include our wood pellets, which are made from natural, virgin hardwood and are available in a variety of flavors, as well as rubs, sauces and our premium frozen meal kits consisting of high-quality ingredients, supplies and easy-to-follow instructions. Our accessories include grill covers, liners, tools, MEATER smart thermometers, apparel and other ancillary items.

We sell our grills using an omnichannel distribution strategy that consists primarily of retail and direct to consumer ("DTC") channels. Our retail channel covers brick-and-mortar retailers, e-commerce platforms, and multichannel retailers, who, in turn, sell our grills to their end customers. Our retailers include Ace Hardware, Amazon.com, Costco, The Home Depot, and William Sonoma, among others, as well as a significant number of independent retailers that cater to local communities and specific categories, such as hardware, camping, outdoor, farm, ranch, barbecue and other categories. Our DTC channel covers sales directly to customers through our website and Traeger app, as well as certain country- and region-specific Traeger or distributor websites. Our consumables and accessories are available through the same channels as our grills, except that our "Traeger Provisions" product line is only available through our DTC channel.

Over the last several years, we have made significant investments in our supply chain and manufacturing operations. Our supply chain includes third party manufacturers for our grills and accessories and pellet production facilities for our wood pellets that we own or lease. We work closely with our manufacturers to evolve on design, manufacturing process and product quality. Our grills are currently manufactured in China and Vietnam, and we expect that they will also be manufactured in Mexico beginning later this year, and our wood pellets are produced at facilities located in New York, Oregon, Georgia, Virginia, and Texas. We have entered into manufacturing agreements covering the supply of substantially all of our grills and accessories, pursuant to which we make purchases on a purchase order basis. We rely on several third-party suppliers for the components used in our grills, including integrated circuits, processors, and system on chips.

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Our revenue decreased by 5.0% for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021, and was $223.7 million for the three months ended March 31, 2022, down from $235.6 million for the three months ended March 31, 2021. We recorded a net loss of $8.4 million for the three months ended March 31, 2022, compared to net income of $38.9 million for the three months ended March 31, 2021.

Impact of COVID-19

The COVID-19 pandemic has caused various elements of disruption to economies, businesses, markets and communities around the globe. In the interest of public health, many governments closed physical stores and business locations deemed to be non-essential, which drove higher unemployment levels and resulted in the closure of certain businesses. The COVID-19 pandemic has had a variety of impacts to the businesses of our retailers and suppliers, as well as customer behavior and discretionary spending. Although we cannot predict when the United States and global economy will fully recover from the COVID-19 pandemic, we believe that our business is well positioned to attract new customers, capitalize on existing and growing trends in our industry and benefit from the revival of the economy and discretionary spending. Nevertheless, we do not have certainty that a full economic recovery will happen in the near future, and it is possible that the prolonging of the COVID-19 pandemic could have certain adverse effects on our business, financial condition, and results of operations. Furthermore, our growth in the past year may obscure the extent to which seasonality and other trends have affected our business and may continue to affect our business. For more information regarding the potential impact of the COVID-19 pandemic on our business, refer to Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K.

In response to the COVID-19 pandemic, we have focused on business continuity across our value chain and operations, and made strategic pivots and reprioritized key initiatives to focus on our immediate response to the COVID-19 pandemic and maintain a nimble approach to our long-term strategy as we continued to monitor the situation.

Components of Results of Operations

Revenue

We derive substantially all of our revenue from the sale of grills, consumables and accessories in North America, which includes the United States and Canada. We recognize revenue, net of product returns, for our grills, consumables and accessories generally at the time of delivery to retailers through our retail channel and to customers through our DTC channel. Estimated product returns are recorded as a reduction of revenue at the time of recognition and are calculated based on product returns history, observable changes in return behavior, and expected returns based on sales volume and mix. We also have certain contractual programs that can give rise to elements of variable consideration, such as volume incentive rebates, with estimated amounts of credits recorded as a reduction to revenue.

Although we experience demand for our products throughout the year, we believe there can be certain seasonal fluctuations in our revenue. We have typically experienced moderately higher levels of sales of our grills in the first and second quarters of the year as our retailers purchase inventory in advance of warmer weather, when demand for outdoor cooking products is the highest across our key markets. Higher sales also coincide with social events and national holidays, which occur during the same warm weather timeframe.

Gross Profit

Gross profit reflects revenue less cost of revenue. Cost of revenue consists of product costs, including the costs of components, costs of products from our third-party manufacturers, direct and indirect manufacturing costs across all products, packaging, inbound freight and duties, warehousing and fulfillment, warranty costs, product quality testing and inspection costs, excess and obsolete inventory write-downs, cloud-hosting costs for our WiFIRE connected grills, depreciation of tooling and manufacturing equipment, amortization of internal use software and patented technology, and certain employee-related expenses.

We calculate gross margin as gross profit divided by revenue. Gross margin can be impacted by several factors, including, in particular, product mix and sales channel mix. For example, gross margin on sales through our DTC channel is generally higher than gross margin on sales through our retail channel. If our DTC sales grow faster than sales from our retail channel, and if we are able to realize greater economies of scale or product cost improvements through engineering and sourcing, we would expect a favorable impact to overall gross margin over time. Additionally, gross margin on sales of certain of our products is higher than for others. If revenue from sales of wood pellets increased as a percentage of total revenue, we would expect to see an increase in overall gross margin. These favorable anticipated gross margin impacts may not be realized, or may be offset by other unfavorable gross margin factors. Additionally, any new products that we develop, or our planned

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expansion into new geographies, may impact our future gross margin. External factors beyond our control, such as duties and tariffs and costs of doing business in certain geographies can also impact gross margin.

Sales and Marketing

Sales and marketing expense consists primarily of the costs associated with advertising and marketing of our products and employee-related expenses, including salaries, benefits, and equity-based compensation expense, as well as sales incentives and professional services. These costs can include print, internet and television advertising, travel-related expenses, direct customer acquisition costs, costs related to conferences and events, and broker commissions. We expect our sales and marketing expense to increase on an absolute dollar basis for the foreseeable future as we continue to increase the scope of outreach to potential new customers to drive our revenue growth. We also anticipate that sales and marketing expense as a percentage of revenue will fluctuate from period to period based on revenue for such period and the timing of the expansion of our sales and marketing functions, as these activities may vary in scope and scale over future periods.

General and Administrative

General and administrative expense consists primarily of employee-related expenses and facilities for our executive, finance, accounting, legal, human resources, information technology and other administrative functions. General and administrative expense also includes fees for professional services, such as external legal, accounting, and information and technology services, and insurance.

In addition, general and administrative expense includes research and development expenses incurred to develop and improve our future products and processes, which primarily consist of employee and facilities-related expenses, including salaries, benefits and equity-based compensation expense, as well as fees for professional services, costs related to prototype tooling and materials, and software platform costs. Research and development expense was $4.9 million and $2.0 million for the three months ended March 31, 2022 and 2021, respectively.

We expect general and administrative expense, including our research and development expenses and external legal and accounting expenses, to increase on an absolute dollar basis for the foreseeable future as we continue to increase investments to support our growth and develop new and enhance existing products and interactive software. We also anticipate increased administrative and compliance costs as a result of being a public company. We anticipate that general and administrative expense as a percentage of revenue will vary from period to period, but we expect to leverage these expenses over time as we grow our revenue.

Amortization of Intangible Assets

Amortization of intangible assets primarily consists of amortization of identified finite-lived customer relationships, distributor relationships, non-compete arrangements and trademark assets that were allocated a considerable portion of the purchase price from the corporate reorganization and acquisition of our business in 2017, as well as the July 2021 acquisition of Apption Labs Limited and its subsidiaries (collectively, "Apption Labs") pursuant to a share purchase agreement (the "Share Purchase Agreement"). These costs are amortized on a straight-line basis over 2.5 to 25 year useful lives and, as a result, amortization expense on these assets is expected to remain stable over the coming years. Future business acquisitions may result in incremental amortization of intangible assets acquired in any such transactions.

Change in Fair Value of Contingent Consideration

The fair values of our contingent consideration earn out obligation associated with the Apption Labs business combination is estimated based on probability adjusted present values of the consideration expected to be transferred using significant inputs. At each reporting date, we revalue the contingent consideration obligation to its fair value and records increases and decreases in fair value in the general and administrative expenses in our condensed consolidated statements of operations and comprehensive income (loss). Changes in the fair value of the contingent consideration obligation results from changes in discount periods and rates, and changes in probability assumptions with respect to the likelihood of achieving the performance targets in the Share Purchase Agreement.

Total Other Income (Expense)

Total other income (expense) consists of interest expense and other income (expense). Interest expense includes interest and other fees associated with our Credit Facilities and Receivables Financing Agreement (each as defined below). Other

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income (expense) also consists of any gains (losses) on the sale of long-lived assets and from the foreign currency contracts that we use to manage our exposure to foreign currency exchange rate risk related to our purchases and international operations.

Results of Operations

The following tables summarize key components of our results of operations for the periods presented. The period-to-period comparisons of our historical results are not necessarily indicative of the results that may be expected in the future.

	Three Months Ended March 31,				Change
	2022		2021		Amount		%
	(unaudited)
	(dollars in thousands)
Revenue	$	223,710	$	235,573	$	(11,863)	(5.0)	%
Cost of revenue	140,145		134,942		5,203		3.9	%
Gross profit	83,565		100,631		(17,066)		(17.0)	%
Operating expenses:
Sales and marketing	33,094		30,851		2,243		7.3	%
General and administrative	42,869		13,556		29,313		216.2	%
Amortization of intangible assets	8,889		8,301		588		7.1	%
Change in fair value of contingent consideration	1,700		—		1,700		100.0	%
Total operating expense	86,552		52,708		33,844		64.2	%
Income (loss) from operations	(2,987)		47,923		(50,910)		(106.2)	%
Other income (expense):
Interest expense	(5,837)		(7,812)		(1,975)		(25.3)	%
Other income (expense), net	544		(458)		1,002		218.8	%
Total other expense	(5,293)		(8,270)		(2,977)		(36.0)	%
Income (loss) before provision for income taxes	(8,280)		39,653		(47,933)		(120.9)	%
Provision for income taxes	152		724		(572)		(79.0)	%
Net income (loss)	$	(8,432)	$	38,929	$	(47,361)	(121.7)	%

Comparison of the Three Months Ended March 31, 2022 and 2021

Revenue

	Three Months Ended March 31,				Change
	2022		2021		Amount		%
	(dollars in thousands)
Revenue:
Grills	$	150,431	$	178,655	$	(28,224)	(15.8)	%
Consumables	39,651		40,813		(1,162)		(2.8)	%
Accessories	33,628		16,105		17,523		108.8	%
Total Revenue	$	223,710	$	235,573	$	(11,863)	(5.0)	%

Revenue decreased by $11.9 million, or 5.0%, to $223.7 million for the three months ended March 31, 2022 compared to $235.6 million for the three months ended March 31, 2021. The decrease was driven by lower unit volume for grills and consumables, partially offset by higher selling prices. Accessories revenue benefited from incremental revenue due to sales of MEATER smart thermometers following the July 2021 acquisition of Apption Labs.

Revenue from our grills decreased by $28.2 million, or 15.8%, to $150.4 million for the three months ended March 31, 2022 compared to $178.7 million for the three months ended March 31, 2021. The decrease was primarily driven by lower unit volume, partially offset by a higher average selling price resulting from price increases taken in the second half of 2021 and early 2022.

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Revenue from our consumables decreased by $1.2 million, or 2.8%, to $39.7 million for the three months ended March 31, 2022 compared to $40.8 million for the three months ended March 31, 2021. The decrease was driven by reduced unit volume of wood pellets and other consumables, partially offset by higher average selling prices of wood pellets.

Revenue from our accessories grew by $17.5 million, or 108.8%, to $33.6 million for the three months ended March 31, 2022 compared to $16.1 million for the three months ended March 31, 2021. The increase was driven primarily by incremental revenue due to sales of MEATER smart thermometers following the July 2021 acquisition of Apption Labs combined with high demand for Traeger-branded accessories.

Gross Profit

	Three Months Ended March 31,						Change
	2022			2021			Amount		%
	(dollars in thousands)
Gross profit	$	83,565		$	100,631		$	(17,066)	(17.0)	%
Gross margin (Gross profit as a percentage of revenue)	37.4		%	42.7		%

Gross profit decreased by $17.1 million, or 17.0%, to $83.6 million for the three months ended March 31, 2022 compared to $100.6 million for the three months ended March 31, 2021. Gross margin decreased to 37.4% for the three months ended March 31, 2022 from 42.7% for the three months ended March 31, 2021. The decrease in gross margin was driven primarily by higher inbound shipping costs, partially offset by increased selling prices.

Sales and Marketing

	Three Months Ended March 31,						Change
	2022			2021			Amount		%
	(dollars in thousands)
Sales and marketing	$	33,094		$	30,851		$	2,243	7.3	%
As a percentage of revenue	14.8		%	13.1		%

Sales and marketing expense increased by $2.2 million, or 7.3%, to $33.1 million for the three months ended March 31, 2022 compared to $30.9 million for the three months ended March 31, 2021. As a percentage of revenue, sales and marketing expense increased to 14.8% for the three months ended March 31, 2022 from 13.1% for the three months ended March 31, 2021. The increase in sales and marketing expense was driven by an increase in advertising costs to drive brand awareness, demand and conversion, higher equity-based compensation expense, and higher travel expenses.

General and Administrative

	Three Months Ended March 31,						Change
	2022			2021			Amount		%
	(dollars in thousands)
General and administrative	$	42,869		$	13,556		$	29,313	216.2	%
As a percentage of revenue	19.2		%	5.8		%

General and administrative expense increased by $29.3 million, or 216.2%, to $42.9 million for the three months ended March 31, 2022 compared to $13.6 million for the three months ended March 31, 2021. As a percentage of revenue, general and administrative expense increased to 19.2% for the three months ended March 31, 2022 from 5.8% for the three months ended March 31, 2021. The increase in general and administrative expense was driven by higher equity-based compensation expense of $13.6 million, as well as personnel-related expenses associated with an increase in headcount in our marketing, customer experience, and sales functions, increased professional services fees primarily related to consulting, and expenses related to Apption Labs that are not reflected in the comparable period results.

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Amortization of Intangible Assets

	Three Months Ended March 31,						Change
	2022			2021			Amount		%
	(dollars in thousands)
Amortization of intangible assets	$	8,889		$	8,301		$	588	7.1	%
As a percentage of revenue	4.0		%	3.5		%

Amortization of intangible assets, substantially attributable to the 2017 corporate reorganization and acquisition of the Company and the July 2021 acquisition of Apption Labs, increased $0.6 million, or 7.1%, to $8.9 million for the three months ended March 31, 2022 compared to $8.3 million for the three months ended March 31, 2021.

Change in Fair Value of Contingent Consideration

	Three Months Ended March 31,						Change
	2022			2021			Amount		%
	(dollars in thousands)
Change in fair value of contingent consideration	$	1,700		$	—		$	1,700	100.0	%
As a percentage of revenue	0.8		%	—		%

Change in fair value of contingent consideration, attributable to the revalued earn out obligation associated with the Apption Labs business combination, increased $1.7 million, or 100.0%, to $1.7 million for the three months ended March 31, 2022 compared to $0 for the three months ended March 31, 2021. The change in fair value was primarily driven by the increase in the likelihood of achieving the revenue performance targets in the Share Purchase Agreement, and a shorter discount period.

Total Other Expense

	Three Months Ended March 31,						Change
	2022			2021			Amount		%
	(dollars in thousands)
Interest expense	$	(5,837)		$	(7,812)		$	(1,975)	(25.3)	%
Other income (expense), net	544			(458)			1,002		218.8	%
Total other expense	$	(5,293)		$	(8,270)		$	(2,977)	(36.0)	%
As a percentage of revenue	(2.4)		%	(3.5)		%

Total other expense decreased by $3.0 million, or 36.0%, to $5.3 million for the three months ended March 31, 2022 compared to $8.3 million for the three months ended March 31, 2021. This decrease was primarily due to a lower applicable interest rate on our First Lien Term Loan Facility (as defined below) as a result of refinancing of our long-term debt in June 2021 and a favorable change from our derivative instruments.

Liquidity and Capital Resources

Historically, our cash requirements have principally been for working capital purposes, capital expenditures, and debt service payments. We have funded our operations through cash flows from operating activities, cash on hand, and borrowings under our Credit Facilities and Receivables Financing Agreement.

As of March 31, 2022, we had cash and cash equivalents of $11.1 million, $78.0 million borrowing capacity under our Revolving Credit Facility (as defined below) and $16.0 million borrowing capacity under our Receivables Financing Agreement (as defined below). As of March 31, 2022, we had drawn down $47.0 million on the Revolving Credit Facility and $49.2 million on the Receivables Financing Agreement. As of March 31, 2022, the total principal amount outstanding under our First Lien Term Loan Facility was $379.2 million. We believe that our existing cash and cash equivalents, availability under our Revolving Credit Facility and Receivables Financing Agreement, and our cash flows from operating activities will be sufficient to fund our working capital requirements and planned capital expenditures, and to service our debt obligations, for at least the next 12 months. However, our future working capital requirements will depend on many factors, including our rate of revenue growth and profitability, the timing and size of future acquisitions, and the timing of introductions of new products and investments in our supply chain and implementation of technologies. We may from time to time seek to raise additional equity

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or debt financing to support our growth or in connection with the acquisition of complementary businesses. Any equity financing we may undertake could be dilutive to our existing stockholders, and any additional debt financing we may undertake could require debt service and financial and operational requirements that could adversely affect our business. There is no assurance we would be able to obtain future financing on acceptable terms or at all. See Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K.

Cash Flows

The following table sets forth cash flow data for the periods indicated therein:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Net cash used in operating activities	$	(46,911)	$	(26,544)
Net cash used in investing activities	(4,648)		(4,975)
Net cash provided by financing activities	45,917		37,064
Net increase (decrease) in cash and cash equivalents	$	(5,642)	$	5,545

Cash Flow from Operating Activities

During the three months ended March 31, 2022, net cash used in operating activities consisted of a net loss of $8.4 million and non-cash adjustments to net loss of $31.6 million, partially offset by net changes in operating assets and liabilities of $70.1 million. Non-cash adjustments consisted of depreciation of property, plant, and equipment of $2.5 million, amortization of intangible assets of $10.6 million, equity-based compensation of $15.5 million, and unrealized gains on derivative contracts of $0.6 million. The decrease in net cash from net changes in operating assets and liabilities during the three months ended March 31, 2022 was primarily due to an increase in accounts receivable of $70.4 million and an increase in inventories of $19.1 million, partially offset by an increase in accounts payable and accrued expenses of $17.6 million.

During the three months ended March 31, 2021, net cash used in operating activities consisted of net income of $38.9 million and non-cash adjustments to net income of $15.8 million, partially offset by net changes in operating assets and liabilities of $81.3 million. Non-cash adjustments consisted of depreciation of property, plant, and equipment of $2.2 million, amortization of intangible assets of $8.5 million, unrealized losses on derivative contracts of $3.3 million, equity-based compensation of $1.0 million, and amortization of deferred financing costs of $0.7 million. The decrease in net cash from net changes in operating assets and liabilities during the three months ended March 31, 2021 was primarily due to an increase in accounts receivable of $99.3 million, partially offset by an increase in inventories of $6.7 million and an increase in accounts payable and accrued expenses of $26.5 million.

Cash Flow from Investing Activities

During the three months ended March 31, 2022, net cash used in investing activities was $4.6 million. The cash flow used was driven primarily by the purchase of property, plant, and equipment of $4.5 million primarily related to the purchase of tooling equipment, the purchase of wood pellet production equipment, and internal-use software and website development costs.

During the three months ended March 31, 2021, net cash used in investing activities was $5 million. The cash flow used was driven by the purchase of property, plant, and equipment of $4.9 million primarily related to internal-use software and website developments costs.

Cash Flow from Financing Activities

During the three months ended March 31, 2022, net cash provided by financing activities was 45.9 million. The cash flow provided was driven primarily by net borrowings on our lines of credit under the Revolving Credit Facility and Receivables Financing Agreement of $46.0 million for general corporate and working capital purposes.

During the three months ended March 31, 2021, net cash provided by financing activities was $37.1 million. The cash flow used was driven primarily by net borrowings on our line of credit under the Receivables Financing Agreement of $38.0 million combined with principal repayments under our old first lien term loan of $0.9 million.

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Credit Facilities

On June 29, 2021, we refinanced our existing credit facilities and entered into a new first lien credit agreement, as borrower, with Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and other lenders party thereto as joint lead arrangers and joint bookrunners (the "First Lien Credit Agreement"). The First Lien Credit Agreement provides for a senior secured term loan facility (the "First Lien Term Loan Facility") and a revolving credit facility (the "Revolving Credit Facility" and, together with the First Lien Term Loan Facility, the "Credit Facilities").

First Lien Credit Agreement

The First Lien Credit Agreement provides for a $560.0 million First Lien Term Loan Facility (including a $50.0 million delayed draw term loan) and a $125.0 million Revolving Credit Facility.

The First Lien Term Loan Facility accrues interest at a rate per annum that considers both fixed and floating components. Following the completion of our IPO in July 2021, the fixed component ranges from 3.00% to 3.25% per annum based on our Public Debt Rating (as defined in the First Lien Credit Agreement). The floating component is based on the Eurocurrency Base Rate (as defined in the First Lien Credit Agreement) for the relevant interest period. The First Lien Term Loan Facility requires periodic principal payments from December 2021 through June 2028, with any remaining unpaid principal and any accrued and unpaid interest due on the maturity date of June 29, 2028. The delayed draw term loan includes a variable commitment fee, which is based on the fixed interest rate and ranges from 0% to the Applicable Rate (as defined in the First Lien Credit Agreement). As of March 31, 2022, the total principal amount outstanding on the First Lien Term Loan Facility was $379.2 million, and we had no outstanding principal balance under the delayed draw term loan. In April 2022, we borrowed $12.5 million under the delayed draw term loan for purposes of financing the earn out obligation associated with the acquisition of Apption Labs as described in Note 4 – Business Combinations to the unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.

Loans under the Revolving Credit Facility accrue interest at a rate per annum that considers both fixed and floating components. Following completion of our IPO in July 2021, the fixed component ranges from 2.75% to 3.25% per annum based on our most recently determined First Lien Net Leverage Ratio (as defined in the First Lien Credit Agreement). The floating component is based on the Eurocurrency Base Rate for the relevant interest period. The Revolving Credit Facility also has a variable commitment fee, which is based on our most recently determined First Lien Net Leverage Ratio and ranges from 0.25% to 0.50% per annum on undrawn amounts. Letters of credit may be issued under the Revolving Credit Facility in an amount not to exceed $15.0 million which, when issued, lower the overall borrowing capacity of the facility. The Revolving Credit Facility expires on June 29, 2026 and no principal payments are due before such date. As of March 31, 2022 we had drawn down $47.0 million under the Revolving Credit Facility for general corporate and working capital purposes.

Except as noted below, the Credit Facilities are collateralized by substantially all of the assets of TGP Holdings III LLC, TGPX Holdings II LLC, Traeger Pellet Grills Holdings LLC and certain subsidiaries of Traeger Pellet Grills Holdings LLC, including intellectual property, mortgages and the equity interest of each of these respective entities. The assets of Traeger SPE LLC, substantively consisting of our accounts receivable, collateralize the receivables financing agreement discussed below and do not collateralize the Credit Facilities. There are no guarantees from parent entities above Traeger, Inc.

The First Lien Credit Agreement contains certain affirmative and negative covenants that limit our ability to, among other things, incur additional indebtedness or liens (with certain exceptions), make certain investments, engage in fundamental changes or transactions including changes of control, transfer or dispose of certain assets, make restricted payments (including dividends), engage in new lines of business, make certain prepayments and engage in certain affiliate transactions. In addition, we are subject to a financial covenant whereby we are required to maintain a First Lien Net Leverage Ratio (as defined in the First Lien Credit Agreement) not to exceed 6.20 to 1.00. As of March 31, 2022, we were in compliance with the covenants under the Credit Facilities.

Accounts Receivable Credit Facility

On November 2, 2020, we entered into a receivables financing agreement (as amended, the “Receivables Financing Agreement”). Through the Receivables Financing Agreement, we participate in a trade receivables securitization program, administered on our behalf by MUFG Bank Ltd. ("MUFG"), using outstanding accounts receivables balances as collateral, which have been contributed by us to our wholly owned subsidiary, Traeger SPE LLC (the "SPE"). While we provide operational services to the SPE, the receivables are owned by the SPE once contributed to it by us. We are the primary beneficiary and hold all equity interests of the SPE, thus we consolidate the SPE without any significant judgments.

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On June 29, 2021, we entered into Amendment No. 1 to the Receivables Financing Agreement and increased the net borrowing capacity from the prior range of $30.0 million to $45.0 million up to $100.0 million. The borrowing capacity fluctuates at each month end based upon the amount of eligible outstanding domestic accounts receivables to be used as collateral. As of March 31, 2022, we had drawn down $49.2 million under this facility for general corporate and working capital purposes. Absent any cash advances that exceed the SPE’s available cash, the SPE collects proceeds from the receivables and transfers available cash to us on a regular basis. We are required to pay an annual upfront fee for the facility, along with fixed interest on outstanding cash advances of 1.7%, a floating component based on the CP Rate (as defined in the Receivables Financing Agreement), and an unused capacity charge that ranges from 0.25% to 0.50%. The facility is set to terminate on June 29, 2024.

In connection with aged accounts receivable that resulted from a new payment program implemented by one of our largest customers, we amended the covenants under the Receivables Financing Agreement with MUFG for the month of January 2022. By February 1, 2022, we had collected the majority of the aged accounts receivable balance and were in compliance with the covenants under the Receivables Financing Agreement. As of March 31, 2022, we were in compliance with the covenants under the Receivables Financing Agreement.

Initial Public Offering

On August 2, 2021, after our statutory conversion and related transactions, we completed our initial public offering ("IPO") in which we issued and sold 8,823,529 shares of common stock at a public offering price of $18.00 per share, generating aggregate gross proceeds of $158.8 million before underwriter discounts and commissions, fees and expenses totaling $20.3 million. Additionally, certain selling stockholders sold an aggregate of 18,235,293 shares (including 3,529,411 shares pursuant to the underwriters’ exercise of their option to purchase additional shares).

Contractual Obligations

There have been no material changes to our contractual obligations as of March 31, 2022 from those disclosed in our Annual Report on Form 10-K. Refer to the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" included in our Annual Report on Form 10-K for a discussion of our debt and operating lease obligations, respectively.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The preparation of our financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

Our critical accounting policies are described under the heading "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K, the notes to the consolidated financial statements included therein and Note 2 - Summary of Significant Accounting Policies to the unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q. During the three months ended March 31, 2022, there were no material changes to our critical accounting policies from those discussed in our Annual Report on Form 10-K.

Recent Accounting Pronouncements

For information regarding recent accounting pronouncements, see Note 2 - Summary of Significant Accounting Policies to the unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes to our disclosures regarding our exposure to market risk as described in Part II, Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” of our Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

27

Limitations on effectiveness of controls and procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of disclosure controls and procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2022, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are from time to time subject to various legal proceedings, claims, and governmental inspections, audits, or investigations that arise in the ordinary course of our business. We believe that the ultimate resolution of these matters would not be expected to have a material adverse effect on our business, financial condition, or operating results.

ITEM 1A. RISK FACTORS

There have been no material changes with respect to the risk factors disclosed in Part I, Item 1A. "Risk Factors" of our Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Securities; Purchases of Equity Securities by the Issuer or Affiliated Purchaser

None.

Use of Proceeds

On August 2, 2021, we completed our IPO in which we issued and sold 8,823,529 shares of common stock at a public offering price of $18.00 per share. We raised net proceeds of $138.5 million after deducting underwriter discounts and commissions, fees and expenses of $20.3 million. Additionally, certain selling stockholders sold an aggregate of 18,235,293 shares (including 3,529,411 shares pursuant to the underwriters’ exercise of their option to purchase additional shares) at the same price. All shares sold were registered pursuant to a registration statement on Form S-1 (File No. 333-257714), as amended (the “Registration Statement”), declared effective by the SEC on July 28, 2021.

We used approximately $130.8 million of the net proceeds to us from the IPO to prepay amounts outstanding under our First Lien Term Loan Facility, and we used the remaining net proceeds for general corporate and working capital purposes. There has been no material change in the expected use of the net proceeds from our IPO as described in our prospectus, dated July 28, 2021.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

28

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

		Incorporated by Reference
Exhibit No.	Exhibit Description	Form	Date	Number	Filed/Furnished Herewith
3.1	Certificate of Incorporation of Traeger, Inc.	8-K	08/03/21	3.1
3.2	Bylaws of Traeger, Inc.	8-K	08/03/21	3.2
10.1	Amendment No. 2 to the Receivables Financing Agreement, by and among Traeger SPE LLC, MUFG Bank, Ltd., Traeger Pellet Grills LLC and the lenders party thereto, dated February 18, 2022.	10-K	03/29/22	10.19
31.1	Certificate of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)				*
31.2	Certificate of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)				*
32.1	Certificate of Chief Executive Officer pursuant to 18 U.S.C. Section 1350				**
32.2	Certificate of Chief Financial Officer pursuant to 18 U.S.C. Section 1350				**
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.				*
101.SCH	Inline XBRL Taxonomy Extension Schema Document				*
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document				*
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document				*
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document				*
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document				*
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)				*

* Filed herewith.

** Furnished herewith.

29

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TRAEGER, INC.
Date: May 12, 2022
	By:	/s/ Jeremy Andrus
	Name:	Jeremy Andrus
	Title:	Chief Executive Officer
		(Principal Executive Officer)
Date: May 12, 2022
	By:	/s/ Dominic Blosil
	Name:	Dominic Blosil
	Title:	Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

30

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Jeremy Andrus, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Traeger, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    [omitted];

(c)    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 12, 2022	By:	/s/ Jeremy Andrus
		Jeremy Andrus
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Dominic Blosil, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Traeger, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    [omitted];

(c)    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 12, 2022	By:	/s/ Dominic Blosil
		Dominic Blosil
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Traeger, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeremy Andrus, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)    The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: May 12, 2022	By:	/s/ Jeremy Andrus
		Jeremy Andrus
		Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Traeger, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dominic Blosil, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)    The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: May 12, 2022	By:	/s/ Dominic Blosil
		Dominic Blosil
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

XML

Cover - shares	3 Months Ended
	Mar. 31, 2022	May 09, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	001-40694
Entity Registrant Name	Traeger, Inc
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	82-2739741
Entity Address, Address Line One	1215 E Wilmington Ave
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Salt Lake City
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84106
City Area Code	801
Local Phone Number	701-7180
Title of 12(b) Security	Common stock, $0.0001 par value
Trading Symbol	COOK
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		118,211,775
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Central Index Key	0001857853
Current Fiscal Year End Date	--12-31

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Current Assets
Cash and cash equivalents	$ 11,098	$ 16,740
Accounts receivable, net	163,239	92,927
Inventories	164,127	145,038
Prepaid expenses and other current assets	12,724	15,036
Total current assets	351,188	269,741
Property, plant, and equipment, net	64,691	55,477
Goodwill	297,047	297,047
Intangible assets, net	544,579	555,151
Other long-term assets	11,039	3,608
Total assets	1,268,544	1,181,024
Current Liabilities
Accounts payable	38,366	42,694
Accrued expenses	98,969	69,773
Line of credit	49,160	41,138
Current portion of capital leases		420
Current portion of capital leases	414
Current portion of contingent consideration	12,400	12,200
Other current liabilities	1,002	0
Total current liabilities	200,311	166,225
Notes payable	417,734	379,395
Capital leases, net of current portion		677
Capital leases, net of current portion	624
Contingent consideration, net of current portion	14,600	13,100
Deferred tax liability	11,681	11,673
Other non-current liabilities	437	434
Total liabilities	645,387	571,504
Commitments and contingencies—See Note 11
Stockholders' equity:
Preferred stock, $0.0001 par value; 25,000,000 shares authorized and no shares issued or outstanding as of March 31, 2022 and December 31, 2021	0	0
Common stock value	12	12
Additional paid-in capital	809,896	794,413
Accumulated deficit	(193,251)	(184,819)
Accumulated other comprehensive income (loss)	6,500	(86)
Total stockholders' equity	623,157	609,520
Total liabilities and stockholders' equity	$ 1,268,544	$ 1,181,024

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parentheticals) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Preferred stock par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock authorized (in shares)	25,000,000	25,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock authorized (in shares)	1,000,000,000	1,000,000,000
Common stock issued (in shares)	118,077,546	117,547,916
Common stock outstanding (in shares)	118,077,546	117,547,916

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Statement [Abstract]
Revenue	$ 223,710	$ 235,573
Cost of revenue	140,145	134,942
Gross profit	83,565	100,631
Operating expenses:
Sales and marketing	33,094	30,851
General and administrative	42,869	13,556
Amortization of intangible assets	8,889	8,301
Change in fair value of contingent consideration	1,700	0
Total operating expense	86,552	52,708
Income (loss) from operations	(2,987)	47,923
Other income (expense):
Interest expense	(5,837)	(7,812)
Other income (expense), net	544	(458)
Total other expense	(5,293)	(8,270)
Income (loss) before provision for income taxes	(8,280)	39,653
Provision for income taxes	152	724
Net income (loss)	$ (8,432)	$ 38,929
Net income (loss) per share - basic (in dollars per share)	$ (0.07)	$ 0.36
Net income (loss) per share - diluted (in dollars per share)	$ (0.07)	$ 0.36
Weighted average common shares outstanding - basic (in shares)	117,889,233	108,724,387
Weighted average common shares outstanding - diluted (in shares)	117,889,233	108,724,387
Other comprehensive income (loss):
Foreign currency translation adjustments	$ (3)	$ 0
Change in cash flow hedge	6,589	0
Total other comprehensive income	6,586	0
Comprehensive income (loss)	$ (1,846)	$ 38,929

XML

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER'S AND STOCKHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands	Total	Common Units	Common Stock	Members Capital	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)
Beginning balance (in shares) at Dec. 31, 2020		108,724,422
Beginning balance at Dec. 31, 2020	$ 475,040	$ 0		$ 571,038	$ 0	$ (95,998)	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation	956			956
Net income (loss)	38,929					38,929
Foreign currency translation adjustments	0
Change in cash flow hedge	0
Ending balance (in shares) at Mar. 31, 2021		108,724,422
Ending balance at Mar. 31, 2021	514,925	$ 0		$ 571,994	0	(57,069)	0
Beginning balance (in shares) at Dec. 31, 2021			117,547,916
Beginning balance at Dec. 31, 2021	609,520		$ 12		794,413	(184,819)	(86)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock under stock plan (in shares)			529,630
Issuance of common stock under stock plan	0
Equity-based compensation	15,483				15,483
Net income (loss)	(8,432)					(8,432)
Foreign currency translation adjustments	(3)						(3)
Change in cash flow hedge	6,589						6,589
Ending balance (in shares) at Mar. 31, 2022			118,077,546
Ending balance at Mar. 31, 2022	$ 623,157		$ 12		$ 809,896	$ (193,251)	$ 6,500

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ (8,432)	$ 38,929
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation of property, plant and equipment	2,481	2,225
Amortization of intangible assets	10,645	8,466
Amortization of deferred financing costs	495	749
Loss on disposal of property, plant and equipment	152	79
Equity-based compensation expense	15,483	956
Bad debt expense	72	0
Unrealized loss on derivative contracts	570	3,349
Change in fair value of contingent consideration	1,700	0
Change in operating assets and liabilities:
Accounts receivable	(70,383)	(99,293)
Inventories, net	(19,089)	(6,697)
Prepaid expenses and other current assets	1,741	(1,844)
Other long-term assets	4	0
Accounts payable and accrued expenses	17,638	26,531
Other non-current liabilities	12	6
Net cash used in operating activities	(46,911)	(26,544)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant, and equipment	(4,524)	(4,865)
Capitalization of patent costs	(124)	(110)
Net cash used in investing activities	(4,648)	(4,975)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds on line of credit	46,100	50,000
Repayments on line of credit	(78)	(12,000)
Repayments of long-term debt	0	(852)
Principal payments on capital lease obligations	(105)
Principal payments on capital lease obligations		(84)
Net cash provided by financing activities	45,917	37,064
Net increase (decrease) in cash and cash equivalents	(5,642)	5,545
Cash and cash equivalents at beginning of period	16,740	11,556
CASH AND CASH EQUIVALENTS AT END OF PERIOD	11,098	17,101
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest	4,897	6,928
Cash paid for income taxes	654	0
NON-CASH FINANCING AND INVESTING ACTIVITIES
Equipment purchased under capital leases	56	219
Property, plant, and equipment included in accounts payable and accrued expenses	$ 7,226	$ 992

XML

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Nature of Operations – Traeger, Inc. and its wholly owned Subsidiaries (collectively "Traeger" or the "Company") design, source, sell, and support wood pellet fueled barbecue grills sold to retailers, distributors, and direct to consumers. The Company produces and sells the pellets used to fire the grills and also sells Traeger-branded rubs, spices, sauces and premium frozen meal kits, as well as grill accessories (including covers, barbecue tools, trays, liners, MEATER smart thermometers and merchandise). A significant portion of the Company’s sales are generated from customers throughout the United States ("U.S."), and the Company continues to develop distribution in Canada and Europe. The Company’s headquarters are in Salt Lake City, Utah.

In July 2021, the Company effected a forward split of its 10 common units into 108,724,422 common units. All unit, per unit and related information presented in the accompanying consolidated financial statements have been retroactively adjusted, where applicable, to reflect the impact of the split of common units.

Immediately prior to the effectiveness of the registration statement pertaining to the Company’s initial public offering ("IPO") on July 28, 2021, the Company converted from a Delaware limited liability company into a Delaware corporation, and changed its name from TGPX Holdings I LLC to Traeger, Inc. Pursuant to the statutory corporate conversion (the "Corporate Conversion"), all of the outstanding limited liability company interests of TGPX Holdings I LLC were converted into shares of common stock of Traeger, Inc., and TGP Holdings LP (the "Partnership") became the holder of such shares of common stock of Traeger, Inc. In connection with the Corporate Conversion, the Partnership liquidated and distributed these shares of common stock to the holders of partnership interests in the Partnership in direct proportion to their respective interests in the Partnership based upon the value of Traeger, Inc. at the time of the IPO, with a value implied by the initial public offering price of the shares of common stock sold in the IPO. Based on the IPO price of $18.00 per share, following the Partnership’s liquidation and distribution, including the elimination of any fractional shares resulting therefrom, and the Corporate Conversion, the Company had 108,724,387 shares of common stock outstanding immediately prior to the IPO.

Basis of Presentation and Principles of Consolidation – The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

The balance sheet as of December 31, 2021 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 29, 2022 (the "Annual Report on Form 10-K").

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to fairly present the consolidated financial position, results of operations and cash flows for the interim periods presented. Operating results for the three months ended March 31, 2022 are not necessarily indicative of results that may be expected for any other interim period or for the year ended December 31, 2022.

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.    

Emerging Growth Company Status – The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 ("JOBS Act"). Under the JOBS Act, emerging growth companies can delay adopting new or revised financial accounting standards until such time as those standards apply to private companies. The Company has elected to use the extended transition period for complying with the adoption of new or revised accounting standards and as a result of this election, its financial statements may not be comparable to companies that comply with public company effective dates. The Company will remain an emerging growth company until the earliest of (i) the end of the fiscal year in which the market value of its common stock that is held by non-affiliates is at least $700 million as of the last business day of its most recently completed second fiscal quarter, (ii) the end of the fiscal year in which the Company has total annual gross revenues of $1.07 billion or more during such fiscal year, (iii) the date on which the Company issues more than $1.0 billion in non-convertible debt in a three-year period, or (iv) December 31, 2026.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates – The preparation of these financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates and the assumptions made by management that present the greatest amount of estimation uncertainty include business combination accounting for the fair value of assets acquired, liabilities assumed, and contingent considerations, customer credits and returns, obsolete inventory reserves, valuation and impairment of intangible assets including goodwill, unrealized positions on derivatives and reserves for warranty. Actual results could differ from these estimates.

Concentrations – Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash in banks, trade accounts receivable, foreign currency contracts, and business activity with certain third-party contract manufacturers of our products. Credit is extended to customers based on an evaluation of the customer’s financial condition and collateral is not generally required in the Company’s sales transactions. Three customers (each large U.S. retailers) that accounted for a significant portion of net sales are as follows:

	Three Months Ended March 31,
	2022		2021
Customer A	17	%	24	%
Customer B	23	%	23	%
Customer C	14	%	16	%

As of March 31, 2022, customers A, B, and C accounted for a significant portion of trade accounts receivable of 22%, 25%, and 13%, compared to 45%, 13%, and 13% as of December 31, 2021. Concentrations of credit risk exist to the extent credit terms are extended with these three large customers. A business failure on the part of any one of the three customers could result in a material amount of exposure to the Company. No other single customer accounted for greater than 10% of the Company’s net sales for the three months ended March 31, 2022 and 2021, respectively. Additionally, no other single customer accounted for greater than 10% of trade accounts receivable as of March 31, 2022 and December 31, 2021.

The Company’s sales to dealers and distributors located outside the United States are generally denominated in U.S. dollars. The Company does have sales to certain dealers located in the European Union, the United Kingdom and Canada which are denominated in Euros, British Pounds and Canadian Dollars, respectively.

The Company relies on a limited number of suppliers for its contract manufacturing of grills and accessories. A significant disruption in the operations of certain of these manufacturers, or in the transportation of parts and accessories would impact the production of the Company’s products for a substantial period of time, which could have a material adverse effect on the Company’s business, financial condition and results of operations.

Recently Issued Accounting Standards

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and the FASB has also certain subsequent related ASUs that supplement and amend Topic 842. The guidance in Topic 842 replaces the leasing guidance in Topic 840, Leases. Under the new guidance, lessees are required to recognize right of use assets related to the leases and lease liabilities on the balance sheet. For leases with terms of 12 months or less, the lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2021 and for interim periods within fiscal years beginning after December 15, 2022.

The Company has adopted this guidance effective January 1, 2022 and will present the impact of the new guidance in its annual statements as of December 31, 2022 and its interim statements thereafter. Management is currently in the process of evaluating its existing portfolio of operating leases for right of use assets and lease liabilities that would need be recognized upon implementation and the impact of this guidance on its consolidated financial statements and related disclosures.

There have been no material changes to the implementation or evaluation of “Recently Issued Accounting Standards” as described in the Company's annual audited financial statements for the period ended December 31, 2021.

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REVENUE

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

REVENUE

REVENUE

The following table disaggregates revenue by product category, geography, and sales channel for the periods indicated (in thousands):

	Three Months Ended March 31,
Revenue by product category	2022		2021
Grills	$	150,431	$	178,655
Consumables	39,651		40,813
Accessories	33,628		16,105
Total revenue	$	223,710	$	235,573

	Three Months Ended March 31,
Revenue by geography	2022		2021
North America	$	207,339	$	226,251
Rest of world	16,371		9,322
Total revenue	$	223,710	$	235,573

	Three Months Ended March 31,
Revenue by sales channel	2022		2021
Retail	$	203,217	$	229,827
Direct to consumer	20,493		5,746
Total revenue	$	223,710	$	235,573

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BUSINESS COMBINATIONS

3 Months Ended

Mar. 31, 2022

Business Combination and Asset Acquisition [Abstract]

BUSINESS COMBINATIONS

BUSINESS COMBINATION

On July 1, 2021 (the "Acquisition Date"), pursuant to a share purchase agreement (the "Share Purchase Agreement"), the Company acquired all outstanding shares of Apption Labs Limited and its subsidiaries (collectively "Apption Labs"), a technology company that specializes in the manufacture and design of innovative hardware and software related to small kitchen appliances, including the MEATER smart thermometer and related technology. The total purchase consideration was approximately $78.3 million, net of cash acquired, which is comprised of cash paid, contingent consideration, net working capital adjustments, and escrow consideration. The acquisition of Apption Labs will help facilitate the Company's entry into the adjacent accessories markets with a highly complementary product that the Company believes will bolster our existing portfolio, create efficiencies for consumers and expose the Company to new growth channels.

The purchase consideration includes contingent cash consideration payable to the sellers based on achievement of certain revenue thresholds for fiscal years 2021 and 2022 as detailed in the Share Purchase Agreement. The acquisition date fair value of contingent consideration obligation of $21.5 million is estimated based on the probability assessments with respect to the likelihood of achieving the performance targets and discount rates consistent with the level of risk of achievement. In April 2022, the Company paid $12.6 million associated with the contingent cash consideration to the sellers based on achievement of certain revenue thresholds for fiscal year 2021. The range of the remaining undiscounted amounts the Company may be required to pay under the contingent consideration arrangement is between $0 and $27.4 million for fiscal year 2022. See Note 9 – Fair Value Measurement for subsequent measurements of this contingent liability as of March 31, 2022.

The Company recognized $1.8 million of acquisition-related costs during fiscal year 2021 that were recorded in general and administrative expense in the condensed consolidated statements of operations and comprehensive income (loss).

The operating results of Apption Labs have been included in the Company's condensed consolidated statements of operations and comprehensive income (loss) since the acquisition date. Actual and pro forma revenue and results of operations for the acquisition have not been presented because they do not have a material impact to the consolidated revenue and results of operations, either individually or in the aggregate.

Determination and allocation of the consideration transferred to net tangible and intangible assets is based upon preliminary estimates. These preliminary estimates and assumptions could change significantly during the measurement period as the Company finalizes the valuations of the net tangible and intangible assets acquired and liabilities assumed. Balances subject to adjustments include, but are not limited to, the valuation of contingent consideration, net working capital adjustments, fair value

of acquired inventory, net, fair value of identified intangible assets, goodwill, and the associated deferred tax implications. During the measurement period, the Company may record adjustments to the provisional amounts recognized in the Company’s initial accounting for the acquisition. The Company expects the allocation of the consideration transferred to be final within the measurement period (up to one year from the acquisition date). Any change could result in variances between our future financial results and the amounts recognized in the financial information presented below, including variances in fair values recorded, as well as expenses associated with these items.

The acquisition was accounted for under the acquisition method in accordance with ASC 805. The following table summarizes the preliminary estimated fair values of the consideration transferred, assets acquired and liabilities assumed as of the Acquisition Date (in thousands):

Consideration Transferred	Fair Value
Cash paid, net of cash acquired	$	36,957
Contingent consideration	21,500
Other closing consideration	19,890
Total purchase consideration, net of cash acquired	$	78,347
Assets acquired
Accounts receivable, net	$	2,190
Inventory, net	5,431
Prepaid and other current assets	293
Property and equipment	1,357
Intangible Assets	53,100
Goodwill	40,200
Total assets acquired	102,571
Liabilities assumed
Accounts payable and accrued liabilities	8,474
Deferred tax liability	12,646
Other current liabilities	344
Other non-current liabilities	2,760
Total liabilities assumed	24,224
Total net assets, net of cash acquired	$	78,347

The excess purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, none of which is expected to be deductible for tax purposes. The goodwill generated from these transactions is attributable to the expected synergies to be achieved upon consummation of the business combinations and the assembled workforce values.

The following table details the identifiable intangible assets acquired at their fair value and their corresponding useful lives at the Acquisition Date (amounts in thousands):

Identifiable Intangible Assets	Fair Value		Estimated Useful Life (in years)
Technology	$	32,300	5
Trademarks	17,700		10
Distributor relationships	2,400		8
Non-compete arrangements	700		2.5
	$	53,100

Identifiable intangible assets acquired primarily include technology, trademarks, distributor relationship, and non-compete arrangements. The fair value of technology acquired in the acquisition was determined using the excess earnings model, the trademarks acquired was determined using a relief from royalty model, the distributor relationships acquired was determined using the distributor model, and the non-compete arrangements acquired were determined using the with and without model. These models utilize certain unobservable inputs, including discounted cash flows, historical and projected financial information, royalty rates, distributor attrition rates, and technology obsolescence rates, classified as Level 3 measurements as defined by Fair Value Measurement (Topic 820). Amortization of technology is recorded in cost of revenue and amortization of

trademarks, distributor relationships and non-compete arrangements are recorded in amortization of intangible assets in the condensed consolidated statements of operations and comprehensive income (loss).

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ACCOUNTS RECEIVABLES, NET

3 Months Ended

Mar. 31, 2022

Receivables [Abstract]

ACCOUNTS RECEIVABLES, NET

ACCOUNTS RECEIVABLES, NET

Accounts receivable consists of the following (in thousands):

	March 31, 2022		December 31, 2021
Trade accounts receivable	$	183,190	$	108,620
Allowance for doubtful accounts	(1,140)		(1,090)
Reserve for returns, discounts and allowances	(18,811)		(14,603)
Total accounts receivable, net	$	163,239	$	92,927

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INVENTORIES

3 Months Ended

Mar. 31, 2022

Inventory Disclosure [Abstract]

INVENTORIES

INVENTORIES

Inventories consisted of the following (in thousands):

	March 31, 2022		December 31, 2021
Raw materials	$	1,743	$	3,106
Work in process	14,199		11,523
Finished goods	148,185		130,409
Inventories	$	164,127	$	145,038

Included within inventories are adjustments of $0.9 million and $0.7 million at March 31, 2022 and December 31, 2021, respectively, to record inventory to net realizable value.

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ACCRUED EXPENSES

3 Months Ended

Mar. 31, 2022

Payables and Accruals [Abstract]

ACCRUED EXPENSES

ACCRUED EXPENSES

Accrued expenses consisted of the following (in thousands):

	March 31, 2022		December 31, 2021
Accrual for inventories in-transit	$	31,370	$	28,536
Warranty accrual	8,731		8,326
Accrued compensation and bonus	8,904		7,025
Build-to-suit lease liability	8,823		4,273
Other	41,141		21,613
Accrued expenses	$	98,969	$	69,773

The changes in the Company’s warranty accrual, included in accrued expenses on the accompanying condensed consolidated balance sheets, were as follows for the fiscal periods indicated (in thousands):

	Three Months Ended March 31,
	2022		2021
Warranty accrual, beginning of period	$	8,326	$	6,728
Warranty claims	(1,484)		(1,461)
Warranty costs accrued	1,889		2,804
Warranty accrual, end of period	$	8,731	$	8,071

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DERIVATIVES

3 Months Ended

Mar. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES

DERIVATIVES

Interest Rate Swap

On February 25, 2022, the Company entered into a floating-to-fixed interest rate swap agreement to hedge or otherwise protect against the Eurocurrency Base Rate (as defined in the First Lien Credit Agreement) fluctuations on a portion of the Company's variable rate debt. The agreement provides for a notional amount of $379.2 million, fixed rate of 2.08% and a maturity date of February 28, 2026. This agreement was designated as a cash flow hedge on the exposure of the variability of future cash flows subject to the variable monthly interest rates on $379.2 million of the term loan portion under the First Lien Term Loan Facility (as defined below). The Company assessed hedge effectiveness at the time of entering into the agreement, utilizing a regression analysis, and determined the hedge is expected to be highly effective.

As a cash flow hedge, the interest rate swap is revalued at current market rates, with the changes in valuation being recorded in other comprehensive income within the condensed consolidated statements of operations and comprehensive income (loss), to the extent that the hedge is effective. The gains or losses on the interest rate swaps are recorded in accumulated other comprehensive income (loss) within the condensed consolidated balance sheets and are reclassified into interest expense in the periods in which the interest rate swap affects earnings. The cash flows related to interest settlements and changes in valuation are classified consistent with the treatment of the hedged monthly interest payments generally as operating activities on the condensed consolidated statement of cash flows.

The Company evaluates hedge effectiveness of the interest rate swap quarterly, or more frequently if necessary, by verifying the critical terms of the interest rate swap continue to match the critical terms of the hedged monthly interest payments and the hedge was expected to be highly effective as of March 31, 2022. Thus, the change in fair value of the derivative instrument offsets the change in fair value on the hedged debt, and there is no ineffectiveness to be recorded in earnings.

As of March 31, 2022, the net asset balance derived from the monthly interest settlements related to the single cash flow hedge contract was $6.6 million.

Foreign Currency Contracts

The Company is exposed to foreign currency exchange rate risk related to its purchases and international operations. The Company utilizes foreign currency contracts to manage foreign currency risk in purchasing inventory and capital equipment, and future settlement of foreign denominated assets and liabilities. The volume of the Company’s foreign currency contract activity is limited by the amount of transaction exposure in each foreign currency and the Company’s election as to whether to hedge the transactions. There are no derivative instruments entered into for speculative purposes.

The Company had outstanding foreign currency contracts as of March 31, 2022 and December 31, 2021. The Company did not elect hedge accounting for any of these contracts. All outstanding contracts are with the same counterparty and thus the fair market value of the contracts in an asset position are offset by the fair market value of the contracts in a liability position to reach a net position. For periods where the net position is an asset balance, the balance is recorded within prepaid expenses and other current assets on the condensed consolidated balance sheets and for periods where the net position is a liability balance, the balance is recorded within derivative liabilities on the condensed consolidated balance sheets. Changes in the net fair value of contracts are recorded in other expense in the condensed consolidated statements of operations and comprehensive income (loss).

The gross and net balances from foreign currency contract positions were as follows (in thousands):

	March 31, 2022		December 31, 2021
Gross Asset Fair Value	$	869	$	1,439
Gross Liability Fair Value	—		—
Net Asset Fair Value	$	869	$	1,439

Gains (losses) from foreign currency contracts were recorded in other income (expense) within the accompanying condensed consolidated statements of operations and comprehensive income (loss) as follows (in thousands):

	Three Months Ended March 31,
	2022		2021
Realized gains	$	1,165	$	2,549
Unrealized losses	(570)		(3,349)
Total gains (losses)	$	595	$	(800)

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FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

Financial assets and liabilities valued using Level 1 inputs are based on unadjusted quoted market prices within active markets. Financial assets and liabilities valued using Level 2 inputs are based primarily on observable trades and/or prices for similar assets or liabilities in active or inactive markets. Financial assets and liabilities valued using Level 3 inputs are primarily valued using management’s assumptions about the assumptions market participants would utilize in pricing the asset or liability.

The following table presents information about the fair value measurement of the Company’s financial instruments (in thousands):

Financial Instruments Recorded at Fair Value on a Recurring Basis:	Fair Value Measurement Level	As of March 31, 2022		As of December 31, 2021
Assets:
Derivative assets—foreign currency contracts (1)	2	$	869	$	1,439
Derivative assets—interest rate swap contract (2)	2	7,590		—
Total assets		$	8,459	$	1,439
Liabilities:
Contingent consideration—earn out (3)	3	$	27,000	$	25,300
Derivative liability—interest rate swap contract (4)	2	1,002		—
Total liabilities		$	28,002	$	25,300

(1)Included in prepaid expenses and other current assets in the condensed consolidated balance sheets

(2)Included in other long-term assets in the condensed consolidated balance sheets

(3)Included in current and long-term contingent consideration in the condensed consolidated balance sheets

(4)Included in other current liabilities in the condensed consolidated balance sheets

Transfers of assets and liabilities among Level 1, Level 2 and Level 3 are recorded as of the actual date of the events or change in circumstances that caused the transfer. As of March 31, 2022 and December 31, 2021, there were no transfers between levels of the fair value hierarchy of the Company’s assets or liabilities measured at fair value.

The fair value of the Company’s derivative assets through its foreign currency contracts is based upon observable market-based inputs that reflect the present values of the differences between estimated future foreign currency rates versus fixed future settlement prices per the contracts, and therefore, are classified within Level 2. The fair value of the Company's interest rate swap contracts held with financial institutions are classified as Level 2 financial instruments, which are valued using observable underlying interest rates and market-determined risk premiums at the reporting date.

The fair values of the Company's contingent consideration earn out obligation associated with the Apption Labs business combination is estimated using a Monte Carlo model. Key assumptions used in these estimates include probability assessments with respect to the likelihood of achieving the performance targets and discount rates of 11.41% and 11.47% for each respective earn out period, consistent with the level of risk of achievement. As these are significant unobservable inputs, the contingent consideration earn out obligation is included in Level 3 inputs.

At each reporting date, the Company revalues the contingent consideration obligation to its fair value and records increases and decreases in fair value in the revaluation of contingent consideration in our condensed consolidated statements of operations and comprehensive income (loss). Changes in the fair value of the contingent consideration obligation results from changes in discount periods and rates, and changes in probability assumptions with respect to the likelihood of achieving the performance targets.

The following table presents the fair value contingent consideration (in thousands):

Balance at December 31, 2021	$	25,300
Payments of contingent consideration	—
Change in fair value of contingent consideration	1,700
Balance at March 31, 2022	$	27,000

The following financial instruments are recorded at their carrying amount (in thousands):

	As of March 31, 2022				As of December 31, 2021
Financial Instruments Recorded at Carrying Amount:	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Liabilities:
Debt—First Lien (1)	$	426,200	$	409,254	$	388,195	$	386,139
Total liabilities	$	426,200	$	409,254	$	388,195	$	386,139

(1)Included in notes payable in the consolidated balance sheet. Due to the unobservable nature of the inputs these financial instruments are considered to be Level 3 instruments in the fair value hierarchy.

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DEBT AND FINANCING ARRANGEMENTS

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

DEBT AND FINANCING ARRANGEMENTS

DEBT AND FINANCING ARRANGEMENTS

Notes Payable

On June 29, 2021, the Company refinanced its existing credit facilities and entered into a new first lien credit agreement, as borrower, with Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and other lenders party thereto as joint lead arrangers and joint bookrunners (the "First Lien Credit Agreement"). The First Lien Credit Agreement provides for a $560.0 million senior secured term loan facility (the "First Lien Term Loan Facility"), including a $50.0 million delayed draw term loan, and a $125.0 million revolving credit facility (the "Revolving Credit Facility" and, together with the First Lien Term Loan Facility, the "Credit Facilities").

The First Lien Term Loan Facility accrues interest at a rate per annum that considers both fixed and floating components. Following the completion of the Company's IPO in July 2021, the fixed component ranges from 3.00% to 3.25% per annum based on the Company's Public Debt Rating (as defined in the First Lien Credit Agreement). The floating component is based on the Eurocurrency Base Rate (as defined in the First Lien Credit Agreement) for the relevant interest period. The First Lien Term Loan Facility requires periodic principal payments from December 2021 through June 2028, with any remaining unpaid principal and any accrued and unpaid interest due on the maturity date of June 29, 2028. The delayed draw term loan includes a variable commitment fee, which is based on the fixed interest rate and ranges from 0% to the Applicable Rate (as defined in the First Lien Credit Agreement). As of March 31, 2022, the total principal amount outstanding on the First Lien Term Loan Facility was $379.2 million, and the Company had no outstanding principal balance under the delayed draw term loan. In April 2022, the Company borrowed $12.5 million under the delayed draw term loan for purposes of financing the earn out obligation associated with the acquisition of Apption Labs as described in Note 4 – Business Combinations.

Loans under the Revolving Credit Facility accrue interest at a rate per annum that considers both fixed and floating components. Following completion of the Company's IPO in July 2021, the fixed component ranges from 2.75% to 3.25% per annum based on the Company's most recently determined First Lien Net Leverage Ratio (as defined in the First Lien Credit Agreement). The floating component is based on the Eurocurrency Base Rate for the relevant interest period. The Revolving Credit Facility also has a variable commitment fee, which is based on the Company's most recently determined First Lien Net Leverage Ratio and ranges from 0.25% to 0.50% per annum on undrawn amounts. Letters of credit may be issued under the Revolving Credit Facility in an amount not to exceed $15.0 million which, when issued, lower the overall borrowing capacity of the facility. The Revolving Credit Facility expires on June 29, 2026 and no principal payments are due before such date. As of March 31, 2022, the Company had drawn down $47.0 million under the Revolving Credit Facility for general corporate and working capital purposes.

The First Lien Credit Agreement contains certain affirmative and negative covenants that limit the Company's ability to, among other things, incur additional indebtedness or liens (with certain exceptions), make certain investments, engage in fundamental changes or transactions including changes of control, transfer or dispose of certain assets, make restricted payments (including dividends), engage in new lines of business, make certain prepayments and engage in certain affiliate transactions. In addition, the Company is subject to a financial covenant and is required to maintain a First Lien Net Leverage Ratio (as defined in the

First Lien Credit Agreement) not to exceed 6.20 to 1.00. As of March 31, 2022, the Company was in compliance with the covenants under the Credit Facilities.

Accounts Receivable Credit Facility

On November 2, 2020, the Company entered into a receivables financing agreement (as amended, the "Receivables Financing Agreement"). Through the Receivables Financing Agreement, the Company participates in a trade receivables securitization program, administered on its behalf by MUFG Bank Ltd. ("MUFG"), using outstanding accounts receivable balances as collateral, which have been contributed by the Company to its wholly owned subsidiary and special purpose entity, Traeger SPE LLC (the "SPE"). While the Company provides operational services to the SPE, the receivables are owned by the SPE once contributed to it by the Company. The Company is the primary beneficiary and holds all equity interests of the SPE, thus the Company consolidates the SPE without any significant judgments.

On June 29, 2021, the Company entered into Amendment No. 1 to the Receivables Financing Agreement and increased the net borrowing capacity from the prior range of $30.0 million to $45.0 million up to $100.0 million. The borrowing capacity fluctuates at each month end based upon the amount of eligible outstanding domestic accounts receivables to be used as collateral. As of March 31, 2022, the Company had drawn down $49.2 million under this facility for general corporate and working capital purposes. The Company is required to pay an annual upfront fee for the facility, along with fixed interest on outstanding cash advances of 1.7%, a floating component based on the CP Rate (as defined in the Receivables Financing Agreement), and an unused capacity charge that ranges from 0.25% to 0.5%. The facility is set to terminate on June 29, 2024.

In connection with aged accounts receivable that resulted from a new payment program implemented by one of the Company's largest customers, the Company amended the covenants under the Receivables Financing Agreement with MUFG for the month of January 2022. By February 1, 2022, the Company had collected the majority of the aged accounts receivable balance and was in compliance with the covenants under the Receivables Financing Agreement. As of March 31, 2022, the Company was in compliance with the covenants under the Receivables Financing Agreement.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company is subject to various claims, complaints and legal actions in the normal course of business. The Company does not believe it has any currently pending litigation of which the outcome will have a material adverse effect on its operations or financial position.

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EQUITY-BASED COMPENSATION

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

EQUITY-BASED COMPENSATION

EQUITY-BASED COMPENSATION

Incentive Units

On September 25, 2017, AEA Investors LP, TCP Traeger Holdings SPV LLC, Ontario Limited, and other management and limited partners purchased a 100% equity stake (the "Transaction") in Traeger Pellet Grills Holdings LLC through a merger agreement in which TGP Holdings LP was formed. In connection with the Transaction, TGP Holdings LP established a management incentive equity pool, authorizing a maximum of 99,389 total units, or 15% of the total authorized units, for purposes of issuing compensatory awards to employees and certain directors of the Company, and its subsidiaries. Pursuant to the Amended and Restated Limited Partnership Agreement of TGP Holdings LP, dated as of September 25, 2017, eligible management employees and directors were granted a certain number of Class B Units of TGP Holdings LP which were intended to be treated as profit interests for tax purposes. The participation threshold of the Class B Units was historically established for each grant based on the fair market value of TGP Holdings LP membership units at the date of the grant.

On July 12, 2021, the board of directors of TGP Holdings GP Corp, a Delaware corporation and the then general partner of TGP Holdings LP, approved the acceleration of vesting of all unvested and outstanding Class B Units, subject to the successful completion of the Company's IPO. The approval for the acceleration of vesting was determined to be a modification. As a result, the Company evaluated each of the modified awards to determine the necessary accounting. At the time of the IPO, awards where vesting was probable prior to and after the modification, resulted in an acceleration of the remaining expense based on the original grant date fair value and awards where vesting was not probable, resulted in recognition of the fair value of the modified awards as of the modification date.

In connection with the completion of the Company’s IPO, Class B Units that were outstanding and vested were, as part of the Corporate Conversion, converted into shares of common stock of the Company. The Company recorded equity compensation expense of approximately $47.4 million as a result of the acceleration of vesting of the unvested Class B Units based on the IPO

price of $18.00. Given the proximity of the modification to the IPO, the expense recorded by the Company was based on the actual conversion of the Class B Unit into common stock and the valuation of the Company at time of the IPO.

Restricted Stock Unit Awards

The Traeger, Inc. 2021 Incentive Award Plan (the "2021 Plan"), became effective as of July 28, 2021, the day prior to the first public trading date of our common stock. The 2021 Plan provides for the grant of stock options, including incentive stock options, and nonqualified stock options, restricted stock, dividend equivalents, restricted stock units, stock appreciation rights, and other stock or cash awards to the Company’s employees and consultants and directors of the Company and its subsidiaries. Subject to the adjustment described in the following sentence, the initial number of shares of the Company's common stock available for issuance under awards granted pursuant to the 2021 Plan is equal to 14,105,750 shares, which shares may be authorized but unissued shares, treasury shares, or shares purchased in the open market. On January 1, 2022, an additional 5,877,395 shares of common stock became available for issuance under awards granted pursuant to the 2021 Plan, as a result of the operation of an automatic annual increase provision in the 2021 Plan. Notwithstanding anything to the contrary in the 2021 Plan, no more than 100,000,000 shares of our common stock may be issued pursuant to the exercise of incentive stock options under the 2021 Plan.

The Company's equity-based compensation was classified as follows in the condensed consolidated statements of operations and comprehensive income (loss) (in thousands):

	Three Months Ended March 31,
	2022		2021
Cost of revenue	$	138	$	6
Sales and marketing	1,763		215
General and administrative	13,582		735
Total equity-based compensation	$	15,483	$	956

On July 20, 2021, the Board approved grants of restricted stock units ("RSUs") covering 12,163,242 shares of common stock that became effective in connection with the completion of the Company’s IPO, which include RSUs covering 7,782,957 shares granted to the Company's Chief Executive Officer ("CEO") and RSUs covering 4,380,285 shares granted to other employees, directors, and certain non-employees.

CEO Awards

The awards include a combination of time-based and performance-based awards. Specifically, time-based RSUs covering 2,594,319 shares ("RSU CEO Award") and performance-based RSUs ("PSUs") covering 5,188,638 shares ("PSU CEO Award") were granted to the CEO.

RSU CEO Award

The RSU CEO Award will vest as to 20% of the underlying shares on each of the first, second, third, fourth and fifth anniversaries of the closing of the IPO, subject to continued service with the Company as its CEO or executive chairman of its Board.

Upon a termination of the CEO's service by the Company without cause, by the CEO for good reason, or due to the CEO's disability (each as defined in his award agreement) or due to his death (each, a "CEO Qualifying Termination"), then, subject to the CEO's (or his estate's) timely execution and non revocation of a general release of claims and continued compliance with the restrictive covenants to which the CEO is bound through the effective date of the general release of claims, any unvested portion of the RSU CEO Award will vest. To the extent any of the RSU CEO Award vests, the CEO must hold the vested and settled shares for two years following their vesting date, subject to certain exceptions set forth in the award agreement.

PSU CEO Award

The PSU CEO Awards will become earned based on the achievement of stock price goals (measured as a volume-weighted stock price over 60 consecutive trading days) at any time until the tenth anniversary of the closing of the IPO. The PSU CEO Award is divided into five tranches, with the first tranche having a stock price goal of 125% of the IPO price, and each of the next four stock prices goals equal to 125% of the immediately preceding stock price goal. As of March 31, 2022, the first vesting tranche of the PSU CEO Award has been earned based upon achievement of the applicable stock price goal and will vest based on the table below. The PSU CEO Award will vest on the applicable vesting date described in the following table or,

if later, the date on which the applicable stock price goal is achieved, subject to the CEO's continued service as our CEO or executive chairman of the Board:

Earned PSUs’ Vesting Tranche	Vesting Date
First Vesting Tranche	50% on the first anniversary and 50% on the second anniversary of the closing of the IPO
Second Vesting Tranche	50% on the second anniversary and 50% on the third anniversary of the closing of the IPO
Third Vesting Tranche	50% on the third anniversary and 50% on the fourth anniversary of the closing of the IPO
Fourth Vesting Tranche	50% on the fourth anniversary and 50% on the fifth anniversary of the closing of the IPO
Fifth Vesting Tranche	50% on the fifth anniversary and 50% on the sixth anniversary of the closing of the IPO

Upon a CEO Qualifying Termination, then, subject to the CEO’s (or his estate's) timely execution and non-revocation of a general release of claims and continued compliance with the restrictive covenants to which the CEO is bound, any previously earned PSUs subject to the CEO PSU Award will vest, and any remaining PSUs that were not previously earned will be forfeited and terminated without consideration. To the extent any of the PSUs subject to the CEO PSU Award vest, the CEO must hold such vested shares for two years following their vesting date, subject to certain exceptions set forth in the award agreement. If the CEO experiences a termination of service other than a CEO Qualifying Termination, all PSUs (including earned PSUs) subject to the PSU CEO Award which have not become vested will be automatically forfeited and terminated as of the termination date without consideration.

In the event the Company incurs a change in control, then any previously-earned PSUs will vest and any remaining PSUs will vest based on the price per share received by or payable with respect to the common stockholders in connection with the transaction, pro-rated to reflect a price per share that falls between two stock price goals.

PSUs that remain unvested as of the expiration date automatically will be forfeited and terminated without consideration.

Other IPO Awards

The RSUs granted to other employees, directors, and certain non-employees, included 3,635,287 time-based RSUs ("IPO RSUs") and 744,998 performance-based RSUs ("IPO PSUs") granted to certain senior level executives of the Company.

IPO RSUs

The IPO RSUs vest based on certain time-based conditions set forth in the applicable award agreement. IPO RSUs granted to certain senior executives of the Company vest as to 50% of the underlying shares on each of the third and fourth anniversaries of the closing of the IPO, subject to continued employment with the Company or one of its subsidiaries.

IPO PSUs

The IPO PSUs consist of two equal tranches, with the first tranche having a stock price goal of 200% of the IPO price and the second tranche having a stock price goal of 300% of the IPO price. Once earned, the applicable IPO PSU will vest as to (i) 50% of the earned PSU upon the later of the first anniversary of the closing of the IPO or the achievement of the applicable stock price goal and (ii) 50% of the earned PSUs upon the later of the second anniversary of the closing of the IPO or the first anniversary of when the respective stock price goal is achieved with respect to the applicable vesting tranche, in each case, subject to continued employment with the Company or one of its subsidiaries.

Upon a termination of employment due to an executive’s disability (each defined in the applicable award agreement) or due to his or her death, then, subject to such executive’s (or his or her estate’s) timely execution and non-revocation of a general release of claims and continued compliance with the restrictive covenants to which such executive is bound, any previously earned PSUs subject to the IPO PSUs will vest, and any remaining PSUs subject to the IPO PSU award that were not previously earned will be automatically forfeited and terminated as of the termination date without consideration.

In the event the Company incurs a change in control, then any previously-earned PSUs will vest and any remaining PSUs will vest based on the price per share received by or payable with respect to the common stockholders in connection with the transaction, pro-rated to reflect a price per share that falls between two stock price goals.

PSUs that remain unvested as of the expiration date automatically will be forfeited and terminated without consideration.

For RSUs and PSUs, the compensation expense is recognized on a straight-line basis over the vesting schedule and on an accelerated basis over the tranche's requisite service period, respectively. In addition, when an award is forfeited prior to the

vesting date, the Company will recognize an adjustment for the previously recognized expense in the period of the forfeiture, with the exception of performance-based awards for which the requisite service period has been provided.

The Company uses the Monte Carlo pricing model to estimate the fair value of its PSUs as of the grant date, and uses various simulations of future stock prices through the Stochastic model to estimate the fair value over the remaining term of the performance period as of the grant date.

A summary of the time-based restricted stock unit activity during the three months ended March 31, 2022 was as follows:

	Units	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2021	6,274,860	$	18.08
Granted at fair value	4,814	9.97
Vested	(529,907)	18.00
Forfeited	(53,759)	18.14
Outstanding at March 31, 2022	5,696,008	$	18.08

As of March 31, 2022, the Company had $84.1 million of unrecognized equity-based compensation expense related to unvested time-based restricted stock units that is expected to be recognized over a weighted-average period of 3.88 years.

A summary of the performance-based restricted stock unit activity during the three months ended March 31, 2022 was as follows:

	Units	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2021	5,933,636	$	13.25
Granted at fair value	—	—
Vested	—	—
Forfeited	—	—
Outstanding at March 31, 2022	5,933,636	$	13.25

As of March 31, 2022, the Company had $60.0 million of unrecognized equity-based compensation expense related to unvested performance-based units that is expected to be recognized over a weighted-average period of 3.48 years.

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INCOME TAXES

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

For the three months ended March 31, 2022 and 2021, the Company recorded an income tax expense of $0.2 million and $0.7 million, respectively.

The Company regularly evaluates the realizability of its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all the deferred tax assets will not be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, loss carryback and tax planning strategies. Generally, more weight is given to objectively verifiable evidence, such as the cumulative loss in recent years, as a significant piece of negative evidence to overcome. As of March 31, 2022, the Company's U.S. operations have resulted in losses, and as such, the Company maintains a valuation allowance against substantially all its U.S. deferred tax assets.

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RELATED PARTY TRANSACTIONS	3 Months Ended
	Mar. 31, 2022
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	RELATED PARTY TRANSACTIONSThe Company outsources a portion of its customer service and support through a third party who is an affiliate of the Company through common ownership. The total amount of expenses the Company recorded associated with such services totaled $1.7 million and $1.8 million for the three months ended March 31, 2022 and 2021, respectively. Amounts payable to the third party as of March 31, 2022 and December 31, 2021 was $1.2 million and $1.2 million, respectively.

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EARNINGS (LOSS) PER SHARE

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

EARNINGS (LOSS) PER SHARE

EARNINGS (LOSS) PER SHARE

The Company computes basic earnings (loss) per share ("EPS") attributable to common stockholders by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted EPS is calculated by adjusting weighted average shares outstanding for the dilutive effect of potential common shares, determined using the treasury-stock method. For purposes of the diluted EPS calculation, restricted stock units are considered to be potential common shares.

The following table sets forth the computation of the Company’s basic and diluted EPS attributable to common stockholders for the fiscal periods indicated (in thousands, except share and per share amounts):

	Three Months Ended March 31,
	2022		2021
Net income (loss)	$	(8,432)	$	38,929
Weighted-average common shares outstanding—basic (1)	117,889,233		108,724,387
Effect of dilutive securities:
Restricted stock units	—		—
Weighted-average common shares outstanding—diluted (1)	117,889,233		108,724,387
Earnings (loss) per share
Basic and diluted	$	(0.07)	$	0.36

(1)For the three months ended March 31, 2021, the Company retrospectively applied shares of common stock outstanding upon the Corporate Conversion, immediately prior to the IPO. Refer to Note 1 – Description of Business and Basis of Presentation for a description of the Corporate Conversion.

The following table includes the number of units that may be dilutive common shares in the future, and were not included in the computation of diluted earnings (loss) per share because the effect was anti-dilutive for the fiscal periods indicated:

	Three Months Ended March 31,
	2022	2021
Restricted stock units	11,629,644	—

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

The balance sheet as of December 31, 2021 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 29, 2022 (the "Annual Report on Form 10-K").

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to fairly present the consolidated financial position, results of operations and cash flows for the interim periods presented. Operating results for the three months ended March 31, 2022 are not necessarily indicative of results that may be expected for any other interim period or for the year ended December 31, 2022.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of these financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates and the assumptions made by management that present the greatest amount of estimation uncertainty include business combination accounting for the fair value of assets acquired, liabilities assumed, and contingent considerations, customer credits and returns, obsolete inventory reserves, valuation and impairment of intangible assets including goodwill, unrealized positions on derivatives and reserves for warranty. Actual results could differ from these estimates.

Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash in banks, trade accounts receivable, foreign currency contracts, and business activity with certain third-party contract manufacturers of our products. Credit is extended to customers based on an evaluation of the customer’s financial condition and collateral is not generally required in the Company’s sales transactions. Three customers (each large U.S. retailers) that accounted for a significant portion of net sales are as follows:

	Three Months Ended March 31,
	2022		2021
Customer A	17	%	24	%
Customer B	23	%	23	%
Customer C	14	%	16	%

As of March 31, 2022, customers A, B, and C accounted for a significant portion of trade accounts receivable of 22%, 25%, and 13%, compared to 45%, 13%, and 13% as of December 31, 2021. Concentrations of credit risk exist to the extent credit terms are extended with these three large customers. A business failure on the part of any one of the three customers could result in a material amount of exposure to the Company. No other single customer accounted for greater than 10% of the Company’s net sales for the three months ended March 31, 2022 and 2021, respectively. Additionally, no other single customer accounted for greater than 10% of trade accounts receivable as of March 31, 2022 and December 31, 2021.

The Company’s sales to dealers and distributors located outside the United States are generally denominated in U.S. dollars. The Company does have sales to certain dealers located in the European Union, the United Kingdom and Canada which are denominated in Euros, British Pounds and Canadian Dollars, respectively.

The Company relies on a limited number of suppliers for its contract manufacturing of grills and accessories. A significant disruption in the operations of certain of these manufacturers, or in the transportation of parts and accessories would impact the production of the Company’s products for a substantial period of time, which could have a material adverse effect on the Company’s business, financial condition and results of operations.

Recently Issued Accounting Standards

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and the FASB has also certain subsequent related ASUs that supplement and amend Topic 842. The guidance in Topic 842 replaces the leasing guidance in Topic 840, Leases. Under the new guidance, lessees are required to recognize right of use assets related to the leases and lease liabilities on the balance sheet. For leases with terms of 12 months or less, the lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2021 and for interim periods within fiscal years beginning after December 15, 2022.

The Company has adopted this guidance effective January 1, 2022 and will present the impact of the new guidance in its annual statements as of December 31, 2022 and its interim statements thereafter. Management is currently in the process of evaluating its existing portfolio of operating leases for right of use assets and lease liabilities that would need be recognized upon implementation and the impact of this guidance on its consolidated financial statements and related disclosures.

There have been no material changes to the implementation or evaluation of “Recently Issued Accounting Standards” as described in the Company's annual audited financial statements for the period ended December 31, 2021.

Fair Value Measurements

Financial assets and liabilities valued using Level 1 inputs are based on unadjusted quoted market prices within active markets. Financial assets and liabilities valued using Level 2 inputs are based primarily on observable trades and/or prices for similar assets or liabilities in active or inactive markets. Financial assets and liabilities valued using Level 3 inputs are primarily valued using management’s assumptions about the assumptions market participants would utilize in pricing the asset or liability.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Schedule of Significant Portion of Net Sales

Three customers (each large U.S. retailers) that accounted for a significant portion of net sales are as follows:

	Three Months Ended March 31,
	2022		2021
Customer A	17	%	24	%
Customer B	23	%	23	%
Customer C	14	%	16	%

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REVENUE (Tables)

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following table disaggregates revenue by product category, geography, and sales channel for the periods indicated (in thousands):

	Three Months Ended March 31,
Revenue by product category	2022		2021
Grills	$	150,431	$	178,655
Consumables	39,651		40,813
Accessories	33,628		16,105
Total revenue	$	223,710	$	235,573

	Three Months Ended March 31,
Revenue by geography	2022		2021
North America	$	207,339	$	226,251
Rest of world	16,371		9,322
Total revenue	$	223,710	$	235,573

	Three Months Ended March 31,
Revenue by sales channel	2022		2021
Retail	$	203,217	$	229,827
Direct to consumer	20,493		5,746
Total revenue	$	223,710	$	235,573

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BUSINESS COMBINATIONS (Tables)

3 Months Ended

Mar. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of Preliminary Fair Value of Assets Acquired and Liabilities Assumed

The following table summarizes the preliminary estimated fair values of the consideration transferred, assets acquired and liabilities assumed as of the Acquisition Date (in thousands):

Consideration Transferred	Fair Value
Cash paid, net of cash acquired	$	36,957
Contingent consideration	21,500
Other closing consideration	19,890
Total purchase consideration, net of cash acquired	$	78,347
Assets acquired
Accounts receivable, net	$	2,190
Inventory, net	5,431
Prepaid and other current assets	293
Property and equipment	1,357
Intangible Assets	53,100
Goodwill	40,200
Total assets acquired	102,571
Liabilities assumed
Accounts payable and accrued liabilities	8,474
Deferred tax liability	12,646
Other current liabilities	344
Other non-current liabilities	2,760
Total liabilities assumed	24,224
Total net assets, net of cash acquired	$	78,347

Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination

The following table details the identifiable intangible assets acquired at their fair value and their corresponding useful lives at the Acquisition Date (amounts in thousands):

Identifiable Intangible Assets	Fair Value		Estimated Useful Life (in years)
Technology	$	32,300	5
Trademarks	17,700		10
Distributor relationships	2,400		8
Non-compete arrangements	700		2.5
	$	53,100

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ACCOUNTS RECEIVABLES, NET (Tables)

3 Months Ended

Mar. 31, 2022

Receivables [Abstract]

Schedule of Accounts Receivable

Accounts receivable consists of the following (in thousands):

	March 31, 2022		December 31, 2021
Trade accounts receivable	$	183,190	$	108,620
Allowance for doubtful accounts	(1,140)		(1,090)
Reserve for returns, discounts and allowances	(18,811)		(14,603)
Total accounts receivable, net	$	163,239	$	92,927

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INVENTORIES (Tables)

3 Months Ended

Mar. 31, 2022

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consisted of the following (in thousands):

	March 31, 2022		December 31, 2021
Raw materials	$	1,743	$	3,106
Work in process	14,199		11,523
Finished goods	148,185		130,409
Inventories	$	164,127	$	145,038

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ACCRUED EXPENSES (Tables)

3 Months Ended

Mar. 31, 2022

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

Accrued expenses consisted of the following (in thousands):

	March 31, 2022		December 31, 2021
Accrual for inventories in-transit	$	31,370	$	28,536
Warranty accrual	8,731		8,326
Accrued compensation and bonus	8,904		7,025
Build-to-suit lease liability	8,823		4,273
Other	41,141		21,613
Accrued expenses	$	98,969	$	69,773

Schedule of Changes in Warranty Liability

The changes in the Company’s warranty accrual, included in accrued expenses on the accompanying condensed consolidated balance sheets, were as follows for the fiscal periods indicated (in thousands):

	Three Months Ended March 31,
	2022		2021
Warranty accrual, beginning of period	$	8,326	$	6,728
Warranty claims	(1,484)		(1,461)
Warranty costs accrued	1,889		2,804
Warranty accrual, end of period	$	8,731	$	8,071

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DERIVATIVES (Tables)

3 Months Ended

Mar. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Foreign Exchange Contracts

The gross and net balances from foreign currency contract positions were as follows (in thousands):

	March 31, 2022		December 31, 2021
Gross Asset Fair Value	$	869	$	1,439
Gross Liability Fair Value	—		—
Net Asset Fair Value	$	869	$	1,439

Schedule of Gain (Loss) from Foreign Currency Contracts

Gains (losses) from foreign currency contracts were recorded in other income (expense) within the accompanying condensed consolidated statements of operations and comprehensive income (loss) as follows (in thousands):

	Three Months Ended March 31,
	2022		2021
Realized gains	$	1,165	$	2,549
Unrealized losses	(570)		(3,349)
Total gains (losses)	$	595	$	(800)

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table presents information about the fair value measurement of the Company’s financial instruments (in thousands):

Financial Instruments Recorded at Fair Value on a Recurring Basis:	Fair Value Measurement Level	As of March 31, 2022		As of December 31, 2021
Assets:
Derivative assets—foreign currency contracts (1)	2	$	869	$	1,439
Derivative assets—interest rate swap contract (2)	2	7,590		—
Total assets		$	8,459	$	1,439
Liabilities:
Contingent consideration—earn out (3)	3	$	27,000	$	25,300
Derivative liability—interest rate swap contract (4)	2	1,002		—
Total liabilities		$	28,002	$	25,300

(1)Included in prepaid expenses and other current assets in the condensed consolidated balance sheets

(2)Included in other long-term assets in the condensed consolidated balance sheets

(3)Included in current and long-term contingent consideration in the condensed consolidated balance sheets

(4)Included in other current liabilities in the condensed consolidated balance sheets

Schedule of Fair Value Contingent Consideration

The following table presents the fair value contingent consideration (in thousands):

Balance at December 31, 2021	$	25,300
Payments of contingent consideration	—
Change in fair value of contingent consideration	1,700
Balance at March 31, 2022	$	27,000

Schedule of Financial Instruments Recorded at Carrying Amount

The following financial instruments are recorded at their carrying amount (in thousands):

	As of March 31, 2022				As of December 31, 2021
Financial Instruments Recorded at Carrying Amount:	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Liabilities:
Debt—First Lien (1)	$	426,200	$	409,254	$	388,195	$	386,139
Total liabilities	$	426,200	$	409,254	$	388,195	$	386,139

(1)Included in notes payable in the consolidated balance sheet. Due to the unobservable nature of the inputs these financial instruments are considered to be Level 3 instruments in the fair value hierarchy.

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EQUITY-BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Schedule of Equity-Based Compensation, Expensed and Capitalized Amount

The Company's equity-based compensation was classified as follows in the condensed consolidated statements of operations and comprehensive income (loss) (in thousands):

	Three Months Ended March 31,
	2022		2021
Cost of revenue	$	138	$	6
Sales and marketing	1,763		215
General and administrative	13,582		735
Total equity-based compensation	$	15,483	$	956

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award

The PSU CEO Award will vest on the applicable vesting date described in the following table or,

if later, the date on which the applicable stock price goal is achieved, subject to the CEO's continued service as our CEO or executive chairman of the Board:

Earned PSUs’ Vesting Tranche	Vesting Date
First Vesting Tranche	50% on the first anniversary and 50% on the second anniversary of the closing of the IPO
Second Vesting Tranche	50% on the second anniversary and 50% on the third anniversary of the closing of the IPO
Third Vesting Tranche	50% on the third anniversary and 50% on the fourth anniversary of the closing of the IPO
Fourth Vesting Tranche	50% on the fourth anniversary and 50% on the fifth anniversary of the closing of the IPO
Fifth Vesting Tranche	50% on the fifth anniversary and 50% on the sixth anniversary of the closing of the IPO

Share-based Payment Arrangement, Outstanding Award, Activity, Excluding Option

A summary of the time-based restricted stock unit activity during the three months ended March 31, 2022 was as follows:

	Units	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2021	6,274,860	$	18.08
Granted at fair value	4,814	9.97
Vested	(529,907)	18.00
Forfeited	(53,759)	18.14
Outstanding at March 31, 2022	5,696,008	$	18.08

A summary of the performance-based restricted stock unit activity during the three months ended March 31, 2022 was as follows:

	Units	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2021	5,933,636	$	13.25
Granted at fair value	—	—
Vested	—	—
Forfeited	—	—
Outstanding at March 31, 2022	5,933,636	$	13.25

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EARNINGS (LOSS) PER SHARE (Tables)

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted EPS Attributable for Common Stockholders

The following table sets forth the computation of the Company’s basic and diluted EPS attributable to common stockholders for the fiscal periods indicated (in thousands, except share and per share amounts):

	Three Months Ended March 31,
	2022		2021
Net income (loss)	$	(8,432)	$	38,929
Weighted-average common shares outstanding—basic (1)	117,889,233		108,724,387
Effect of dilutive securities:
Restricted stock units	—		—
Weighted-average common shares outstanding—diluted (1)	117,889,233		108,724,387
Earnings (loss) per share
Basic and diluted	$	(0.07)	$	0.36

(1)For the three months ended March 31, 2021, the Company retrospectively applied shares of common stock outstanding upon the Corporate Conversion, immediately prior to the IPO. Refer to Note 1 – Description of Business and Basis of Presentation for a description of the Corporate Conversion.

Schedule of Antidilutive Securities Excluded from Computation of Diluted Earnings (loss) Per Share

The following table includes the number of units that may be dilutive common shares in the future, and were not included in the computation of diluted earnings (loss) per share because the effect was anti-dilutive for the fiscal periods indicated:

	Three Months Ended March 31,
	2022	2021
Restricted stock units	11,629,644	—

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) - $ / shares	Mar. 31, 2022	Dec. 31, 2021	Jul. 31, 2021	Jul. 28, 2021
Business Acquisition [Line Items]
Common unit outstanding (in shares)			108,724,422
Common stock outstanding (in shares)	118,077,546	117,547,916		108,724,387
Previously Reported
Business Acquisition [Line Items]
Common unit outstanding (in shares)			10
IPO
Business Acquisition [Line Items]
Sale of stock, price per share (in dollars per share)				$ 18.00

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Customer Concentration Risk	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Revenue from Contract with Customer, Product and Service Benchmark | Customer A
Concentration Risk [Line Items]
Concentration risk percentage	17.00%	24.00%
Revenue from Contract with Customer, Product and Service Benchmark | Customer B
Concentration Risk [Line Items]
Concentration risk percentage	23.00%	23.00%
Revenue from Contract with Customer, Product and Service Benchmark | Customer C
Concentration Risk [Line Items]
Concentration risk percentage	14.00%	16.00%
Accounts Receivable | Customer A
Concentration Risk [Line Items]
Concentration risk percentage	22.00%		45.00%
Accounts Receivable | Customer B
Concentration Risk [Line Items]
Concentration risk percentage	25.00%		13.00%
Accounts Receivable | Customer C
Concentration Risk [Line Items]
Concentration risk percentage	13.00%		13.00%

XML

REVENUE (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Disaggregation of Revenue [Line Items]
Total revenue	$ 223,710	$ 235,573
Retail
Disaggregation of Revenue [Line Items]
Total revenue	203,217	229,827
Direct to consumer
Disaggregation of Revenue [Line Items]
Total revenue	20,493	5,746
North America
Disaggregation of Revenue [Line Items]
Total revenue	207,339	226,251
Rest of world
Disaggregation of Revenue [Line Items]
Total revenue	16,371	9,322
Grills
Disaggregation of Revenue [Line Items]
Total revenue	150,431	178,655
Consumables
Disaggregation of Revenue [Line Items]
Total revenue	39,651	40,813
Accessories
Disaggregation of Revenue [Line Items]
Total revenue	$ 33,628	$ 16,105

XML

BUSINESS COMBINATIONS - Narrative (Details) - Apption Labs Limited - USD ($) $ in Thousands		1 Months Ended	12 Months Ended
	Jul. 01, 2021	Apr. 30, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Total purchase consideration, net of cash acquired	$ 78,347
Contingent consideration	21,500
Business combination, low value of outcomes	0
Business combination, high value of outcomes	$ 27,400
Acquisition related costs			$ 1,800
Subsequent Event
Business Acquisition [Line Items]
Payment of contingent consideration		$ 12,600

XML

BUSINESS COMBINATIONS - Preliminary Fair Value Assets and Liabilities Assumed (Details) - USD ($) $ in Thousands	Jul. 01, 2021	Mar. 31, 2022	Dec. 31, 2021
Assets acquired
Goodwill		$ 297,047	$ 297,047
Apption Labs Limited
Consideration Transferred
Cash paid, net of cash acquired	$ 36,957
Contingent consideration	21,500
Other closing consideration	19,890
Total purchase consideration, net of cash acquired	78,347
Assets acquired
Accounts receivable, net	2,190
Inventory, net	5,431
Prepaid and other current assets	293
Property and equipment	1,357
Intangible Assets	53,100
Goodwill	40,200
Total assets acquired	102,571
Liabilities assumed
Accounts payable and accrued liabilities	8,474
Deferred tax liability	12,646
Other current liabilities	344
Other non-current liabilities	2,760
Total liabilities assumed	24,224
Total net assets, net of cash acquired	$ 78,347

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BUSINESS COMBINATIONS - Summary of Amount Assigned to Identifiable Intangible Assets (Details) - Apption Labs Limited $ in Thousands	Jul. 01, 2021 USD ($)
Business Acquisition [Line Items]
Finite-lived intangible assets acquired	$ 53,100
Technology
Business Acquisition [Line Items]
Finite-lived intangible assets acquired	$ 32,300
Useful life (in years)	5 years
Trademarks
Business Acquisition [Line Items]
Finite-lived intangible assets acquired	$ 17,700
Useful life (in years)	10 years
Distributor relationships
Business Acquisition [Line Items]
Finite-lived intangible assets acquired	$ 2,400
Useful life (in years)	8 years
Non-compete arrangements
Business Acquisition [Line Items]
Finite-lived intangible assets acquired	$ 700
Useful life (in years)	2 years 6 months

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ACCOUNTS RECEIVABLES, NET (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Receivables [Abstract]
Trade accounts receivable	$ 183,190	$ 108,620
Allowance for doubtful accounts	(1,140)	(1,090)
Reserve for returns, discounts and allowances	(18,811)	(14,603)
Total accounts receivable, net	$ 163,239	$ 92,927

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INVENTORIES (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 1,743	$ 3,106
Work in process	14,199	11,523
Finished goods	148,185	130,409
Inventories	164,127	145,038
Inventory adjustments	$ 900	$ 700

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ACCRUED EXPENSES - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Payables and Accruals [Abstract]
Accrual for inventories in-transit	$ 31,370	$ 28,536
Warranty accrual	8,731	8,326	$ 8,071	$ 6,728
Accrued compensation and bonus	8,904	7,025
Build-to-suit lease liability	8,823	4,273
Other	41,141	21,613
Accrued expenses	$ 98,969	$ 69,773

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ACCRUED EXPENSES - Change in Warranty Liability (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward]
Warranty accrual, beginning of period	$ 8,326	$ 6,728
Warranty claims	(1,484)	(1,461)
Warranty costs accrued	1,889	2,804
Warranty accrual, end of period	$ 8,731	$ 8,071

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DERIVATIVES - Narratives (Details) - USD ($) $ in Millions	Mar. 31, 2022	Feb. 25, 2022
Interest Rate Swap
Derivatives, Fair Value [Line Items]
Notional amount		$ 379.2
Fixed interest rate		2.08%
Interest Rate Swap | Cash Flow Hedging
Derivatives, Fair Value [Line Items]
Net asset fair value	$ 6.6
First Lein Term Loan Facility | Secured Debt
Derivatives, Fair Value [Line Items]
Long-term debt		$ 379.2

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DERIVATIVES - Summary of Gross and Net Fair Value of Cash Flow Hedge Position (Details) $ in Millions	Mar. 31, 2022 USD ($)
Cash Flow Hedging | Interest Rate Swap
Derivatives, Fair Value [Line Items]
Net Asset Fair Value	$ 6.6

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DERIVATIVES - Summary of Gross and Net Fair Value of Foreign Currency Contracts (Details) - Foreign currency contract - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Derivatives, Fair Value [Line Items]
Gross Asset Fair Value	$ 869	$ 1,439
Gross Liability Fair Value	0	0
Net Asset Fair Value	$ 869	$ 1,439

XML

DERIVATIVES - Summary of Gains (Losses) from Foreign Currency Contracts (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Realized gains	$ 1,165	$ 2,549
Unrealized losses	(570)	(3,349)
Total gains (losses)	$ 595	$ (800)

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FAIR VALUE MEASUREMENTS - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Level 2 | Interest rate contract
Assets:
Derivative asset	$ 7,590
Liabilities:
Derivative liability	1,002	$ 0
Fair Value, Recurring
Assets:
Total assets	8,459	1,439
Liabilities:
Total liabilities	28,002	25,300
Fair Value, Recurring | Level 2 | Interest rate contract
Assets:
Derivative asset		0
Fair Value, Recurring | Level 2 | Foreign currency contract
Assets:
Derivative asset	869	1,439
Fair Value, Recurring | Level 3
Liabilities:
Contingent consideration	$ 27,000	$ 25,300

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FAIR VALUE MEASUREMENTS - Narrative (Details) - Level 3 - Measurement Input, Discount Rate	Mar. 31, 2022
Apption Labs Limited, Earn Out Period One
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Contingent consideration, measurement input	0.1141
Apption Labs Limited, Earn Out Period Two
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Contingent consideration, measurement input	0.1147

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FAIR VALUE MEASUREMENTS - Schedule of Fair value Consideration Payments (Details) - Level 3 $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 25,300
Payments of contingent consideration	0
Change in fair value of contingent consideration	1,700
Ending balance	$ 27,000

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FAIR VALUE MEASUREMENTS - Summary of Financial Instruments Reported at Carrying Amount (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total liabilities	$ 426,200	$ 388,195
Carrying Amount | First Lein Term Loan Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt	426,200	388,195
Estimated Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total liabilities	409,254	386,139
Estimated Fair Value | Level 3 | First Lein Term Loan Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt	$ 409,254	$ 386,139

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DEBT AND FINANCING ARRANGEMENTS (Details) - USD ($)	Jun. 29, 2021	Apr. 30, 2022	Mar. 31, 2022	Jul. 31, 2021	Jun. 28, 2021
First Lein Term Loan Facility | Minimum
Debt Instrument [Line Items]
Fixed interest rate				3.00%
First Lein Term Loan Facility | Maximum
Debt Instrument [Line Items]
Fixed interest rate				3.25%
First Lein Term Loan Facility | Secured Debt
Debt Instrument [Line Items]
Face amount	$ 560,000,000
Outstanding principal balance			$ 379,200,000
Debt instrument, covenant, minimum leverage ratio	620.00%
First Lein Term Loan Facility | Delayed Draw Term Loan
Debt Instrument [Line Items]
Face amount	$ 50,000,000
Outstanding principal balance			0
First Lein Term Loan Facility | Delayed Draw Term Loan | Subsequent Event
Debt Instrument [Line Items]
Outstanding principal balance		$ 12,500,000
First Lein Term Loan Facility | Delayed Draw Term Loan | Minimum
Debt Instrument [Line Items]
Upfront fee percentage	0.00%
First Lein Term Loan Facility | Line of Credit | Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 125,000,000
Outstanding principal balance			$ 47,000,000
First Lein Term Loan Facility | Line of Credit | Revolving Credit Facility | Minimum
Debt Instrument [Line Items]
Fixed interest rate				2.75%
Unused capacity percentage	0.25%
First Lein Term Loan Facility | Line of Credit | Revolving Credit Facility | Maximum
Debt Instrument [Line Items]
Fixed interest rate				3.25%
Unused capacity percentage	0.50%
First Lein Term Loan Facility | Line of Credit | Letter of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 15,000,000
Accounts Receivable Credit Facility | Line of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity	100,000,000
Outstanding principal balance	$ 49,200,000
Accounts Receivable Credit Facility | Line of Credit | CP Rate
Debt Instrument [Line Items]
Upfront fee percentage	1.70%
Accounts Receivable Credit Facility | Line of Credit | Minimum
Debt Instrument [Line Items]
Unused capacity percentage	0.25%
Current borrowing capacity					$ 30,000,000
Accounts Receivable Credit Facility | Line of Credit | Maximum
Debt Instrument [Line Items]
Unused capacity percentage	0.50%
Current borrowing capacity					$ 45,000,000

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EQUITY-BASED COMPENSATION - Narrative (Details) $ / shares in Units, $ in Millions				3 Months Ended
	Aug. 02, 2021 USD ($) $ / shares	Jul. 20, 2021 tranche shares	Sep. 25, 2017 shares	Mar. 31, 2022 USD ($) shares	Jan. 01, 2022 shares
2021 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based arrangement, maximum authorized units (in shares)				100,000,000
Number of shares available for grant (in shares)				14,105,750
Number of additional shares available for grant (in shares)					5,877,395
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based arrangement, maximum authorized units (in shares)		12,163,242
Restricted stock units | Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based arrangement, maximum authorized units (in shares)		7,782,957
Required period to hold shares after vesting		2 years
Restricted stock units | Employees, Directors And Certain Non-Employees, Excluding Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based arrangement, maximum authorized units (in shares)		4,380,285
Restricted stock units | Employees, Directors And Certain Non-Employees, Excluding Chief Executive Officer | First Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage		50.00%
Restricted stock units | Employees, Directors And Certain Non-Employees, Excluding Chief Executive Officer | Second Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage		50.00%
Time-Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock based compensation expense | $				$ 84.1
Share-based payment arrangement, unrecognized compensation, weighted average period (in years)				3 years 10 months 17 days
Time-Based Restricted Stock Units | Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based arrangement, maximum authorized units (in shares)		2,594,319
Time-Based Restricted Stock Units | Chief Executive Officer | Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage		20.00%
Time-Based Restricted Stock Units | Chief Executive Officer | Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage		20.00%
Time-Based Restricted Stock Units | Chief Executive Officer | Tranche Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage		20.00%
Time-Based Restricted Stock Units | Chief Executive Officer | Tranche Four
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage		20.00%
Time-Based Restricted Stock Units | Chief Executive Officer | Tranche Five
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage		20.00%
Time-Based Restricted Stock Units | Employees, Directors And Certain Non-Employees, Excluding Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based arrangement, maximum authorized units (in shares)		3,635,287
Performance-Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock based compensation expense | $				$ 60.0
Share-based payment arrangement, unrecognized compensation, weighted average period (in years)				3 years 5 months 23 days
Performance-Based Restricted Stock Units | Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based arrangement, maximum authorized units (in shares)		5,188,638
Required period to hold shares after vesting		2 years
Award vesting period		60 days
Term of awards		10 years
Number of tranches | tranche		5
Performance-Based Restricted Stock Units | Chief Executive Officer | First Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of outstanding common stock		125.00%
Performance-Based Restricted Stock Units | Chief Executive Officer | Second Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of outstanding common stock		125.00%
Performance-Based Restricted Stock Units | Chief Executive Officer | Third Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of outstanding common stock		125.00%
Performance-Based Restricted Stock Units | Chief Executive Officer | Fourth Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of outstanding common stock		125.00%
Performance-Based Restricted Stock Units | Chief Executive Officer | Fifth Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of outstanding common stock		125.00%
Performance-Based Restricted Stock Units | Chief Executive Officer | Tranche One | First Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage				50.00%
Performance-Based Restricted Stock Units | Chief Executive Officer | Tranche Two | First Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage				50.00%
Performance-Based Restricted Stock Units | Chief Executive Officer | Tranche Two | Second Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage				50.00%
Performance-Based Restricted Stock Units | Chief Executive Officer | Tranche Three | Second Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage				50.00%
Performance-Based Restricted Stock Units | Chief Executive Officer | Tranche Three | Third Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage				50.00%
Performance-Based Restricted Stock Units | Chief Executive Officer | Tranche Four | Third Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage				50.00%
Performance-Based Restricted Stock Units | Chief Executive Officer | Tranche Four | Fourth Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage				50.00%
Performance-Based Restricted Stock Units | Chief Executive Officer | Tranche Five | Fourth Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage				50.00%
Performance-Based Restricted Stock Units | Chief Executive Officer | Tranche Five | Fifth Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage				50.00%
Performance-Based Restricted Stock Units | Employees, Directors And Certain Non-Employees, Excluding Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based arrangement, maximum authorized units (in shares)		744,998
Performance-Based Restricted Stock Units | Employees, Directors And Certain Non-Employees, Excluding Chief Executive Officer | First Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of outstanding common stock		200.00%
Award vesting rights percentage		50.00%
Performance-Based Restricted Stock Units | Employees, Directors And Certain Non-Employees, Excluding Chief Executive Officer | Second Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of outstanding common stock		300.00%
Award vesting rights percentage		50.00%
Common Class B
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity compensation expense | $	$ 47.4
TGP Holdings LP | Common Class B
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based arrangement, maximum authorized units (in shares)			99,389
Share-based arrangement, maximum authorized unit percentage			15.00%
TGP Holdings LP | Common Class B | Traeger Pellet Grills Holsings LLC
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity stake percentage			100.00%
IPO
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share price (in dollars per share) | $ / shares	$ 18.00
IPO | Performance-Based Restricted Stock Units | Employees, Directors And Certain Non-Employees, Excluding Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of tranches | tranche		2

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EQUITY-BASED COMPENSATION - Schedule of Equity-based Compensation, Expensed and Capitalized Amount (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based arrangement, compensation expense	$ 15,483	$ 956
Cost of revenue
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based arrangement, compensation expense	138	6
Sales and marketing
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based arrangement, compensation expense	1,763	215
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based arrangement, compensation expense	$ 13,582	$ 735

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EQUITY-BASED COMPENSATION - Vesting Schedule of PSUs (Details) - Performance-Based Restricted Stock Units - Chief Executive Officer	3 Months Ended
	Mar. 31, 2022
First Anniversary | First Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage	50.00%
Second Anniversary | First Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage	50.00%
Second Anniversary | Second Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage	50.00%
Third Anniversary | Second Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage	50.00%
Third Anniversary | Third Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage	50.00%
Fourth Anniversary | Third Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage	50.00%
Fourth Anniversary | Fourth Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage	50.00%
Fifth Anniversary | Fourth Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage	50.00%
Fifth Anniversary | Fifth Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage	50.00%
Sixth Anniversary | Fifth Vesting Tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage	50.00%

XML

EQUITY-BASED COMPENSATION - Restricted Stock Unit Activity (Details)	3 Months Ended
	Mar. 31, 2022 $ / shares shares
Time-Based Restricted Stock Units
Stock Appreciation Rights Activity
Outstanding at December 31, 2021 (in shares) | shares	6,274,860
Granted (in shares) | shares	4,814
Vested (in shares) | shares	(529,907)
Forfeited (in shares) | shares	(53,759)
Outstanding at March 31, 2021 (in shares) | shares	5,696,008
Weighted Average Grant Date Fair Value
Outstanding, Weighted average grant date fair value at December 30, 2021 (in dollars per share) | $ / shares	$ 18.08
Granted, Weighted average grant date fair value (in dollars per share) | $ / shares	9.97
Vested, Weighted average grant date fair value (in dollars per share) | $ / shares	18.00
Forfeited, Weighted average grant date fair value (in dollars per share) | $ / shares	18.14
Outstanding, Weighted average grant date fair value at March 31, 2021 (in dollars per share) | $ / shares	$ 18.08
Performance-Based Restricted Stock Units
Stock Appreciation Rights Activity
Outstanding at December 31, 2021 (in shares) | shares	5,933,636
Granted (in shares) | shares	0
Vested (in shares) | shares	0
Forfeited (in shares) | shares	0
Outstanding at March 31, 2021 (in shares) | shares	5,933,636
Weighted Average Grant Date Fair Value
Outstanding, Weighted average grant date fair value at December 30, 2021 (in dollars per share) | $ / shares	$ 13.25
Granted, Weighted average grant date fair value (in dollars per share) | $ / shares	0
Vested, Weighted average grant date fair value (in dollars per share) | $ / shares	0
Forfeited, Weighted average grant date fair value (in dollars per share) | $ / shares	0
Outstanding, Weighted average grant date fair value at March 31, 2021 (in dollars per share) | $ / shares	$ 13.25

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Tax Disclosure [Abstract]
Income tax expense	$ 152	$ 724

XML

RELATED PARTY TRANSACTIONS (Details) - Affiliated Entity - Customer Service and Support - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Related Party Transaction [Line Items]
Related party transaction expenses	$ 1.7	$ 1.8
Amount payable to third party	$ 1.2		$ 1.2

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EARNINGS (LOSS) PER SHARE - Schedule of Computation of Basic and Diluted EPS Attributable for Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Earnings Per Share [Abstract]
Net income (loss)	$ (8,432)	$ 38,929
Weighted average common shares outstanding - basic (in shares)	117,889,233	108,724,387
Effect of dilutive securities:
Restricted stock (in shares)	0	0
Weighted average common shares outstanding - diluted (in shares)	117,889,233	108,724,387
Earnings (loss) per share
Earnings (loss) per share - basic (in dollars per share)	$ (0.07)	$ 0.36
Earnings (loss) per share - diluted (in dollars per share)	$ (0.07)	$ 0.36

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EARNINGS (LOSS) PER SHARE - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities (in shares)	11,629,644	0