QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Class A |
Large accelerated filer | o | x | ||||||||||||||||||
Non-accelerated filer | o | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
Page | ||||||||
December 31, 2022 | September 30, 2022 | ||||||||||
(unaudited) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, less allowances | |||||||||||
Inventories, net | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property, equipment and leasehold improvements, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Other long-term assets | |||||||||||
Trademarks, net | |||||||||||
Other intangible assets, net | |||||||||||
Goodwill | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and equity (deficit) | |||||||||||
Current liabilities: | |||||||||||
Trade accounts payable | $ | $ | |||||||||
Accrued expenses | |||||||||||
Income taxes payable | |||||||||||
Current portion of long-term debt and other borrowings | |||||||||||
Short-term debt — related party | |||||||||||
Current portion of long-term financing obligation | |||||||||||
Total current liabilities | |||||||||||
Long-term debt, less current portion | |||||||||||
Long-term debt — related party | |||||||||||
Long-term financing obligation, less current portion | |||||||||||
Non-current operating lease liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and Contingencies (Note 8) | |||||||||||
Class A Common Stock, $ | |||||||||||
Class B Common Stock, $ | |||||||||||
Preferred Stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Retained earnings (deficit) | ( | ( | |||||||||
Total Weber Inc. equity (deficit) | ( | ( | |||||||||
Noncontrolling interests | ( | ( | |||||||||
Total equity (deficit) | ( | ( | |||||||||
Total liabilities and equity (deficit) | $ | $ |
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Net sales | $ | $ | |||||||||
Cost of goods sold | |||||||||||
Gross profit | |||||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | |||||||||||
Amortization of intangible assets | |||||||||||
Restructuring costs | ( | ||||||||||
Loss from operations | ( | ( | |||||||||
Foreign currency (gain) loss | ( | ||||||||||
Interest expense, net | |||||||||||
Loss before taxes | ( | ( | |||||||||
Income tax expense (benefit) | ( | ||||||||||
Net loss | ( | ( | |||||||||
Net loss attributable to noncontrolling interests | ( | ( | |||||||||
Net (loss) income attributable to Weber Inc. | $ | ( | $ | ||||||||
Earnings (loss) per share of Class A common stock | |||||||||||
Basic | $ | ( | $ | ||||||||
Diluted | $ | ( | $ | ( | |||||||
Weighted average shares outstanding | |||||||||||
Basic | |||||||||||
Diluted |
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Net loss | $ | ( | $ | ( | |||||||
Other comprehensive (loss) income: | |||||||||||
Foreign currency translation adjustments, net of income tax benefit of | ( | ||||||||||
(Loss) gain on derivative instruments, net of income tax expense of | ( | ||||||||||
Comprehensive loss | ( | ( | |||||||||
Less: Comprehensive loss attributable to noncontrolling interests | ( | ( | |||||||||
Comprehensive (loss) income attributable to Weber Inc. | $ | ( | $ |
Three Months Ended December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A Common Stock | Class B Common Stock | Preferred Stock | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Additional Paid-in Capital | Cumulative Translation Adjustments | Unrealized Gain (Loss) on Derivative Instruments | Retained Earnings (Deficit) | Non-controlling Interests | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Class A shares for equity awards | — | — | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Paired Interests | — | ( | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss on derivative instruments | — | — | — | — | — | — | — | — | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification of realized gain on derivative instruments to net loss | — | — | — | — | — | — | — | — | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( |
Three Months Ended December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A Common Stock | Class B Common Stock | Preferred Stock | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Additional Paid-in Capital | Cumulative Translation Adjustments | Unrealized Gain (Loss) on Derivative Instruments | Retained Earnings (Deficit) | Non-controlling Interests | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | $ | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repayment of member notes | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred tax asset associated with repayment of member notes | — | — | — | — | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Class A shares for equity awards | — | — | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest income on notes receivable | — | — | — | — | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends on Class A shares and equity awards | — | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | — | ( | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain on derivative instruments | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification of realized loss on derivative instruments to net loss | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( |
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Operating activities | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Provision for depreciation | |||||||||||
Provision for amortization of intangible assets | |||||||||||
Provision for amortization of deferred financing costs | |||||||||||
Deferred income tax (benefit) expense | ( | ||||||||||
Stock-based compensation | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ( | |||||||||
Inventories | ( | ( | |||||||||
Prepaid expenses and other current assets | ( | ( | |||||||||
Trade accounts payable | |||||||||||
Accrued expenses | ( | ||||||||||
Income taxes payable | |||||||||||
Other | |||||||||||
Net cash used in operating activities | ( | ( | |||||||||
Investing activities | |||||||||||
Proceeds from disposal of property, equipment and leasehold improvements | |||||||||||
Additions to property, equipment and leasehold improvements | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Financing activities | |||||||||||
Proceeds from issuance of long-term debt — related party | |||||||||||
Payments for deferred financing costs | ( | ||||||||||
Payments for capitalized offering costs | ( | ||||||||||
Interest rate swap settlement payments | ( | ( | |||||||||
Proceeds from contribution of capital, net | |||||||||||
Dividends paid | ( | ( | |||||||||
Members’ distributions | ( | ||||||||||
Borrowings from revolving credit facility | |||||||||||
Payments on revolving credit facility | ( | ( | |||||||||
Borrowings from revolving loan — related party | |||||||||||
Payments of other borrowings | ( | ||||||||||
Payments of long-term debt | ( | ( | |||||||||
Shares withheld to satisfy employee tax obligations | ( | ( | |||||||||
Other financing activities | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ( | |||||||||
Increase (decrease) in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Cash paid for income taxes, net of refunds of $ | $ | $ | |||||||||
Supplemental disclosures of non-cash investing information: | |||||||||||
Property and equipment included in accounts payable and accrued expenses | $ | $ | |||||||||
December 31, 2022 | September 30, 2022 | ||||||||||
(dollars in thousands) | |||||||||||
Work-in-process and materials | $ | $ | |||||||||
Finished products | |||||||||||
Total inventories, net | $ | $ |
December 31, 2022 | September 30, 2022 | ||||||||||
(dollars in thousands) | |||||||||||
Value added taxes receivable | $ | $ | |||||||||
Current portion of derivative instruments | |||||||||||
Other | |||||||||||
Total prepaid expenses and other current assets | $ | $ |
Americas | EMEA | APAC | Total | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Balance as of September 30, 2022 | $ | $ | $ | $ | |||||||||||||||||||
Foreign exchange | |||||||||||||||||||||||
Balance as of December 31, 2022 | $ | $ | $ | $ |
December 31, 2022 | |||||||||||||||||||||||
Weighted-Average Remaining Amortization Years | Gross Carrying Amount | Accumulated Amortization | Net Book Value | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Trademark—Weber | N/A | $ | $ | — | $ | ||||||||||||||||||
Trademarks—Other | ( | ||||||||||||||||||||||
Trademarks, net | ( | ||||||||||||||||||||||
Customer lists | ( | ||||||||||||||||||||||
Patents | ( | ||||||||||||||||||||||
In-process research and development | ( | ||||||||||||||||||||||
Developed technology | ( | ||||||||||||||||||||||
Reacquired rights | ( | ||||||||||||||||||||||
Non-compete agreement | ( | ||||||||||||||||||||||
Other intangible assets, net | ( | ||||||||||||||||||||||
Total | $ | $ | ( | $ |
September 30, 2022 | |||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Book Value | |||||||||||||||
(dollars in thousands) | |||||||||||||||||
Trademark—Weber | $ | $ | — | $ | |||||||||||||
Trademarks—Other | ( | ||||||||||||||||
Trademarks, net | ( | ||||||||||||||||
Customer lists | ( | ||||||||||||||||
Patents | ( | ||||||||||||||||
In-process research and development | ( | ||||||||||||||||
Developed technology | ( | ||||||||||||||||
Reacquired rights | ( | ||||||||||||||||
Non-compete agreement | ( | ||||||||||||||||
Other intangible assets, net | ( | ||||||||||||||||
Total | $ | $ | ( | $ |
December 31, 2022 | September 30, 2022 | ||||||||||
(dollars in thousands) | |||||||||||
Land | $ | $ | |||||||||
Buildings | |||||||||||
Computer equipment and software | |||||||||||
Equipment | |||||||||||
Leasehold improvements | |||||||||||
Construction-in-progress | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
Total | $ | $ |
Severance and Other Termination-Related Benefits | Contract Termination Costs | Asset Disposals | Total | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Balance as of September 30, 2022 | $ | $ | $ | $ | |||||||||||||||||||
Adjustments to the reserve(1) | ( | ( | ( | ( | |||||||||||||||||||
Cash payments and reserve usage | ( | ( | ( | ||||||||||||||||||||
Foreign exchange | |||||||||||||||||||||||
Balance as of December 31, 2022 | $ | $ | $ | $ |
December 31, 2022 | September 30, 2022 | ||||||||||
(dollars in thousands) | |||||||||||
Secured Credit Facility Term Loan, due October 2027 | $ | $ | |||||||||
Secured Credit Facility Incremental Term Loan, due October 2027 | |||||||||||
Secured Credit Facility Revolving Loan | |||||||||||
Unsecured 12% Term Loan, due January 2028 | |||||||||||
Unsecured Revolving Loan, due December 2023 | |||||||||||
Other borrowings | |||||||||||
Total borrowings | |||||||||||
Deferred financing costs | ( | ( | |||||||||
Original issue discount | ( | ( | |||||||||
Total debt | |||||||||||
Less: Current portion of long-term debt and other borrowings | ( | ( | |||||||||
Total long-term debt | $ | $ |
Remaining period of 2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
$ |
December 31, 2022 | September 30, 2022 | ||||||||||
(dollars in thousands) | |||||||||||
Interest rate swap contracts | $ | $ |
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(dollars in thousands) | |||||||||||
Interest rate swap contracts | $ | ( | $ | ||||||||
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(dollars in thousands) | |||||||||||
Interest rate swap contracts | $ | ( | $ | ||||||||
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(dollars in thousands) | |||||||||||
Foreign currency forward contracts | $ | $ | ( |
December 31, 2022 | September 30, 2022 | ||||||||||
(volumes in pounds) | |||||||||||
Steel index contracts |
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(dollars in thousands) | |||||||||||
Commodity index contracts | $ | $ |
Balance at September 30, 2022 | $ | ||||
Accrual for warranties issued | |||||
Warranty settlements made | ( | ||||
Balance at December 31, 2022 | $ |
December 31, 2022 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Prepaid expenses and other current assets: | |||||||||||||||||||||||
Interest rate swap contracts | $ | $ | $ | $ | |||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Other long-term assets: | |||||||||||||||||||||||
Interest rate swap contracts | $ | $ | $ | $ | |||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Accrued expenses: | |||||||||||||||||||||||
Interest rate swap contracts | $ | $ | $ | $ | |||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Other long-term liabilities: | |||||||||||||||||||||||
Interest rate swap contracts | $ | $ | $ | $ | |||||||||||||||||||
Contingent consideration | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
September 30, 2022 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Prepaid expenses and other current assets: | |||||||||||||||||||||||
Interest rate swap contracts | $ | $ | $ | $ | |||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Other long-term assets: | |||||||||||||||||||||||
Interest rate swap contracts | $ | $ | $ | $ | |||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Accrued expenses: | |||||||||||||||||||||||
Commodity index contracts | $ | $ | $ | $ | |||||||||||||||||||
Interest rate swap contracts | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Other long-term liabilities: | |||||||||||||||||||||||
Interest rate swap contracts | $ | $ | $ | $ | |||||||||||||||||||
Contingent consideration | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Service-Based Units | Hybrid Units | ||||||||||||||||||||||||||||||||||
Units | Weighted Average Exercise Price | Weighted Average Fair Value | Units | Weighted Average Exercise Price | Weighted Average Fair Value | ||||||||||||||||||||||||||||||
Nonvested units, September 30, 2022 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Performance adjustments(1) | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||
Nonvested units, December 31, 2022 | $ | $ | $ | $ |
Total RSUs | |||||||||||
Number of RSUs | Weighted Average Grant Date Fair Value | ||||||||||
Nonvested, September 30, 2022 | $ | ||||||||||
Granted | $ | ||||||||||
Vested | ( | $ | |||||||||
Forfeited | ( | $ | |||||||||
Nonvested, December 31, 2022 | $ |
Total RSUs | |||||||||||
Number of RSUs | Weighted Average Grant Date Fair Value | ||||||||||
Vested- Not settled, September 30, 2022 | $ | ||||||||||
Units vested | $ | ||||||||||
Units settled(1) | ( | $ | |||||||||
Vested- Not settled, December 31, 2022 | $ |
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(dollars in thousands) | |||||||||||
Profits interest awards: | |||||||||||
Service-based profits interest awards | $ | $ | |||||||||
Hybrid profits interest awards | ( | ||||||||||
Total profits interest awards | |||||||||||
Options | |||||||||||
RSUs | |||||||||||
ESPP | ( | ||||||||||
Total stock-based compensation expense(1) | $ | $ |
Three Months Ended December 31, 2022 | |||||||||||||||||||||||||||||
Americas | EMEA | APAC | Corporate/Other | Total | |||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||
Net sales | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Adjusted loss from operations(1) | $ | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Capital expenditures | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Three Months Ended December 31, 2021 | |||||||||||||||||||||||||||||
Americas | EMEA | APAC | Corporate/Other | Total | |||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||
Net sales | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
Adjusted loss from operations(1) | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Capital expenditures | $ | $ | $ | $ | $ |
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(dollars in thousands) | |||||||||||
Segment adjusted income from operations | |||||||||||
Americas | $ | $ | |||||||||
EMEA | ( | ||||||||||
APAC | |||||||||||
Segment adjusted income from operations for reportable segments | |||||||||||
Unallocated net expenses(1) | ( | ( | |||||||||
Adjustments to loss before taxes | |||||||||||
Stock-based compensation expense | ( | ( | |||||||||
Restructuring costs | |||||||||||
Interest expense, net | ( | ( | |||||||||
Loss before taxes | $ | ( | $ | ( |
December 31, 2022 | |||||||||||||||||||||||||||||
Americas | EMEA | APAC | Corporate/Other | Total | |||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||
Segment assets(1) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
All other(2) | |||||||||||||||||||||||||||||
Total assets | $ | ||||||||||||||||||||||||||||
September 30, 2022 | |||||||||||||||||||||||||||||
Americas | EMEA | APAC | Corporate/Other | Total | |||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||
Segment assets(1) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
All other(2) | |||||||||||||||||||||||||||||
Total assets | $ |
LLC Units | Ownership Percentage | ||||||||||
LLC Units held by Weber Inc. | % | ||||||||||
Units held by Pre-IPO LLC Members | % | ||||||||||
Balance at end of period | % |
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(in thousands, except shares and per share data) | |||||||||||
Numerator - basic: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Less: Net loss attributable to noncontrolling interests | ( | ( | |||||||||
Net loss (income) attributable to Weber Inc. - basic | $ | ( | $ | ||||||||
Numerator - diluted: | |||||||||||
Net loss (income) attributable to Weber Inc. - basic | $ | ( | $ | ||||||||
Net loss effect of dilutive securities: | |||||||||||
Add: Net loss attributable to dilutive impact of Paired Interests(1) | ( | ||||||||||
Net loss attributable to Weber Inc. - diluted | $ | ( | $ | ( | |||||||
Denominator - basic: | |||||||||||
Weighted average of Class A common stock outstanding - basic | |||||||||||
Denominator - diluted: | |||||||||||
Weighted average of Class A common stock outstanding - basic | |||||||||||
Weighted average effect of dilutive securities: | |||||||||||
Add: Class A common stock assumed exchange for Paired Interests(2) | |||||||||||
Weighted average Class A common stock outstanding - diluted | |||||||||||
Earnings (loss) per share of Class A common stock - basic | $ | ( | $ | ||||||||
Earnings (loss) per share of Class A common stock - diluted | $ | ( | $ | ( |
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Paired Interests | |||||||||||
Profits interest awards | |||||||||||
Options | |||||||||||
RSUs |
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(dollars in thousands) | |||||||||||
Loss from operations | $ | (90,340) | $ | (89,245) | |||||||
Adjustments: | |||||||||||
Foreign currency gain (loss)(1) | 11,041 | (164) | |||||||||
Stock-based compensation expense(2) | 8,537 | 25,511 | |||||||||
Restructuring charges(3) | (1,166) | — | |||||||||
Business transformation costs(4) | 12,734 | 7,410 | |||||||||
Operational transformation costs(5) | 13,603 | 6,648 | |||||||||
Financing costs(6) | 537 | — | |||||||||
Adjusted loss from operations | $ | (45,054) | $ | (49,840) | |||||||
Net loss | $ | (113,891) | $ | (74,553) | |||||||
Adjustments: | |||||||||||
Stock-based compensation expense(2) | 8,537 | 25,511 | |||||||||
Restructuring charges(3) | (1,166) | — | |||||||||
Business transformation costs(4) | 12,734 | 7,410 | |||||||||
Operational transformation costs(5) | 13,603 | 6,648 | |||||||||
Financing costs(6) | 537 | — | |||||||||
Tax impact of adjusting items(7) | 1,596 | (11,458) | |||||||||
Adjusted net loss | $ | (78,050) | $ | (46,442) | |||||||
Net loss | $ | (113,891) | $ | (74,553) | |||||||
Adjustments: | |||||||||||
Interest expense, net | 29,519 | 15,531 | |||||||||
Income tax expense (benefit) | 5,073 | (30,387) | |||||||||
Depreciation and amortization | 15,106 | 13,787 | |||||||||
EBITDA | $ | (64,193) | $ | (75,622) | |||||||
Stock-based compensation expense(2) | 8,537 | 25,511 | |||||||||
Restructuring charges(3) | (1,166) | — | |||||||||
Business transformation costs(4) | 12,734 | 7,410 | |||||||||
Operational transformation costs(5) | 13,603 | 6,648 | |||||||||
Financing costs(6) | 537 | — | |||||||||
Adjusted EBITDA | $ | (29,948) | $ | (36,053) |
Three Months Ended December 31, | $ Variance Increase/ (Decrease) | % Variance Increase/ (Decrease) | % of Net Sales | ||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||
Net sales | $ | 164,899 | $ | 283,141 | $ | (118,242) | (42 | %) | 100 | % | 100 | % | |||||||||||||||||||||||
Cost of goods sold(1)(2) | 128,951 | 219,128 | (90,177) | (41 | %) | 78 | % | 77 | % | ||||||||||||||||||||||||||
Gross profit | 35,948 | 64,013 | (28,065) | (44 | %) | 22 | % | 23 | % | ||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Selling, general and administrative(1)(2) | 122,381 | 148,084 | (25,703) | (17 | %) | 74 | % | 52 | % | ||||||||||||||||||||||||||
Amortization of intangible assets | 5,073 | 5,174 | (101) | (2 | %) | 3 | % | 2 | % | ||||||||||||||||||||||||||
Restructuring costs | (1,166) | — | (1,166) | (100 | %) | (1 | %) | — | % | ||||||||||||||||||||||||||
Loss from operations | (90,340) | (89,245) | (1,095) | (64 | %) | (55 | %) | (32 | %) | ||||||||||||||||||||||||||
Foreign currency (gain) loss | (11,041) | 164 | (11,205) | (6832 | %) | (7 | %) | — | % | ||||||||||||||||||||||||||
Interest expense, net | 29,519 | 15,531 | 13,988 | 90 | % | 18 | % | 5 | % | ||||||||||||||||||||||||||
Loss before taxes | (108,818) | (104,940) | (3,878) | 4 | % | (66 | %) | (37 | %) | ||||||||||||||||||||||||||
Income tax expense (benefit) | 5,073 | (30,387) | 35,460 | (117 | %) | 3 | % | (11 | %) | ||||||||||||||||||||||||||
Net loss | $ | (113,891) | $ | (74,553) | $ | (39,338) | 53 | % | (69 | %) | (26 | %) | |||||||||||||||||||||||
Adjusted loss from operations(3) | $ | (45,054) | $ | (49,840) | $ | 4,786 | (10 | %) | (27 | %) | (18 | %) | |||||||||||||||||||||||
Adjusted net loss(3) | $ | (78,050) | $ | (46,442) | $ | (31,608) | 68 | % | (47 | %) | (16 | %) | |||||||||||||||||||||||
EBITDA(3) | $ | (64,193) | $ | (75,622) | $ | 11,429 | (15 | %) | (39 | %) | (27 | %) | |||||||||||||||||||||||
Adjusted EBITDA(3) | $ | (29,948) | $ | (36,053) | $ | 6,105 | (17 | %) | (18 | %) | (13 | %) |
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(dollars in thousands) | |||||||||||
Cost of goods sold | $ | 671 | $ | 1,182 | |||||||
Selling, general and administrative | 7,866 | 24,329 | |||||||||
Total stock-based compensation expense | $ | 8,537 | $ | 25,511 |
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(dollars in thousands) | |||||||||||
Cost of goods sold | $ | 5,604 | $ | 4,935 | |||||||
Selling, general and administrative | 4,429 | 3,678 | |||||||||
Total depreciation expense | $ | 10,033 | $ | 8,613 |
Three Months Ended December 31, | $ Variance Increase/ (Decrease) | % Variance Increase/ (Decrease) | |||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Americas | $ | 97,508 | $ | 156,494 | $ | (58,986) | (38 | %) | |||||||||||||||
EMEA | 26,687 | 62,985 | (36,298) | (58 | %) | ||||||||||||||||||
APAC | 40,704 | 63,662 | (22,958) | (36 | %) | ||||||||||||||||||
Total net sales | $ | 164,899 | $ | 283,141 | $ | (118,242) | (42 | %) |
Three Months Ended December 31, | $ Variance Increase/ (Decrease) | % Variance Increase/ (Decrease) | |||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Americas | $ | 1,528 | $ | 23,286 | $ | (21,758) | (93 | %) | |||||||||||||||
EMEA | (9,841) | 10,269 | (20,110) | (196 | %) | ||||||||||||||||||
APAC | 10,980 | 19,347 | (8,367) | (43 | %) | ||||||||||||||||||
Total adjusted income from operations | $ | 2,667 | $ | 52,902 | $ | (50,235) | (95 | %) |
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(dollars in thousands) | |||||||||||
Segment adjusted income from operations | |||||||||||
Americas | $ | 1,528 | $ | 23,286 | |||||||
EMEA | (9,841) | 10,269 | |||||||||
APAC | 10,980 | 19,347 | |||||||||
Segment adjusted income from operations for reportable segments | 2,667 | 52,902 | |||||||||
Corporate and supply chain costs(1) | (47,721) | (102,742) | |||||||||
Foreign currency (gain) loss(2) | (11,041) | 164 | |||||||||
Stock-based compensation expense(2) | (8,537) | (25,511) | |||||||||
Restructuring charges(2) | 1,166 | — | |||||||||
Business transformation costs(2) | (12,734) | (7,410) | |||||||||
Operational transformation costs(2) | (13,603) | (6,648) | |||||||||
Financing costs(2) | (537) | — | |||||||||
Loss from operations | $ | (90,340) | $ | (89,245) |
Three Months Ended December 31, | $ Variance Increase/ (Decrease) | % Variance Increase/ (Decrease) | |||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Total segment net sales | $ | 97,508 | $ | 156,494 | $ | (58,986) | (38 | %) | |||||||||||||||
Segment adjusted income from operations | $ | 1,528 | $ | 23,286 | $ | (21,758) | (93 | %) |
Three Months Ended December 31, | $ Variance Increase/ (Decrease) | % Variance Increase/ (Decrease) | |||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Total segment net sales | $ | 26,687 | $ | 62,985 | $ | (36,298) | (58 | %) | |||||||||||||||
Segment adjusted (loss) income from operations | $ | (9,841) | $ | 10,269 | $ | (20,110) | (196 | %) |
Three Months Ended December 31, | $ Variance Increase/ (Decrease) | % Variance Increase/ (Decrease) | |||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Total segment net sales | $ | 40,704 | $ | 63,662 | $ | (22,958) | (36 | %) | |||||||||||||||
Segment adjusted income from operations | $ | 10,980 | $ | 19,347 | $ | (8,367) | (43 | %) |
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(dollars in thousands) | |||||||||||
Net cash used in operating activities | $ | (111,621) | $ | (187,893) | |||||||
Net cash used in investing activities | (24,437) | (25,866) | |||||||||
Net cash provided by financing activities | 159,228 | 153,336 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (10,036) | (895) | |||||||||
Net increase (decrease) in cash and cash equivalents | $ | 13,134 | $ | (61,318) |
Exhibit No. | Description | |||||||
Fourth Amendment to Credit Agreement dated as of December 27, 2022, by and among Weber-Stephen Products LLC, as the Borrower, Weber-Stephen Products Belgium BV, as the Euro Borrower, Bank of America N.A., as Administrative Agent and the Lenders party thereto (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on December 28, 2022) | ||||||||
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||
Certification of Interim Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||
Certification of Interim Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||
101* | The following financial statements from Weber Inc.’s Quarterly Report on Form 10-Q for the three months ended December 31, 2022, filed with the Securities and Exchange Commission on February 9, 2023, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive (Loss) Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Equity (Deficit), and (vi) the Notes to Condensed Consolidated Financial Statements. | |||||||
104** | The cover page from Weber Inc.’s Quarterly Report on Form 10-Q for the three months ended December 31, 2022 formatted in iXBRL (Inline eXtensible Business Reporting Language) and contained in Exhibit 101. |
Weber Inc. | ||||||||
By: | /s/ Alan D. Matula | |||||||
Alan D. Matula | ||||||||
Chief Executive Officer (As Principal Executive Officer) | ||||||||
By: | /s/ Marla Y. Kilpatrick | |||||||
Marla Y. Kilpatrick | ||||||||
Interim Chief Financial Officer (As Principal Financial Officer) |
Date: February 9, 2023 | By: | /s/ Alan D. Matula | ||||||
Alan D. Matula Chief Executive Officer (Principal Executive Officer) |
Date: February 9, 2023 | By: | /s/ Marla Y. Kilpatrick | ||||||
Marla Y. Kilpatrick Interim Chief Financial Officer (Principal Financial Officer) |
Date: February 9, 2023 | By: | /s/ Alan D. Matula | ||||||
Alan D. Matula Chief Executive Officer (Principal Executive Officer) |
Date: February 9, 2023 | By: | /s/ Marla Y. Kilpatrick | ||||||
Marla Y. Kilpatrick Interim Chief Financial Officer (Principal Financial Officer) |
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (113,891) | $ (74,553) |
Other comprehensive (loss) income: | ||
Foreign currency translation adjustments, net of income tax benefit of zero and $135 | 17,261 | (3,006) |
(Loss) gain on derivative instruments, net of income tax expense of zero and $238 | (2,832) | 5,316 |
Comprehensive loss | (99,462) | (72,243) |
Less: Comprehensive loss attributable to noncontrolling interests | (74,962) | (89,358) |
Comprehensive (loss) income attributable to Weber Inc. | $ (24,500) | $ 17,115 |
Condensed Consolidated Statements of Comprehensive (Loss) Income (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||
Foreign currency Translation adjustment, income tax benefit | $ 0 | $ 135 |
Gain (loss) on derivative instrument, Income tax expense | $ 0 | $ 238 |
Condensed Consolidated Statements of Cash Flows - Parenthetical - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Statement of Cash Flows [Abstract] | ||
Proceeds from income tax refunds | $ 2,491 | $ 0 |
General |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General | 1. General Description of Business Weber Inc. and its subsidiaries (collectively “Weber,” the “Company,” “we” and “our”) is an outdoor cooking company in the global outdoor cooking market. Our product portfolio includes traditional charcoal grills, gas grills, smokers, pellet grills, electric grills and related accessories. Our full range of products is sold in 78 countries. We are headquartered in Palatine, Illinois, and our stock is listed on the New York Stock Exchange (NYSE) under the symbol “WEBR.” Agreement and Plan of Merger On December 11, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ribeye Parent, LLC (“Parent”) and Ribeye Merger Sub, Inc., a wholly owned subsidiary of Parent (“Merger Sub”) pursuant to which Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving. Parent and Merger Sub are affiliates of BDT Capital Partners LLC. BDT Capital Partners LLC will acquire all of the Company’s outstanding shares of Class A common stock (other than (i) shares of Class A common stock held by BDT Capital Partners I-A Holdings, LLC and BDT WSP Holdings, LLC, (ii) any shares of common stock canceled pursuant to the Merger Agreement and (iii) any dissenting shares of Class A common stock) for $8.05 per share in cash. The Merger is conditioned upon, among other things, customary closing conditions. Subject to the satisfaction (or if applicable, waiver) of such conditions, the Merger is expected to close in the first half of calendar year 2023. Consolidation and Basis of Presentation The condensed consolidated financial statements of Weber Inc. were prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) for interim reporting. In management’s opinion, the interim financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the results of financial position, operations and cash flows for the periods presented. The results of operations for the period ended December 31, 2022 are not necessarily indicative of the operating results expected for the full fiscal year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022. Weber HoldCo LLC is considered a variable interest entity. Weber Inc. is the primary beneficiary of Weber HoldCo LLC and has decision making authority that significantly affects the economic performance of this entity. As a result, Weber Inc. consolidates the financial statements of Weber HoldCo LLC. Noncontrolling interests reflect the entitlement of the owners of Weber-Stephen Products LLC’s outstanding equity interests prior to the IPO (“Pre-IPO LLC Members”) to a portion of Weber HoldCo LLC’s net (loss) income. Fiscal Year The Company’s fiscal year runs from October 1 through September 30. All references to years are to fiscal years unless otherwise stated. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The effect of the change in the estimates will be recognized in the current period of the change. Seasonality Although the Company generally has demand for its products throughout the year, the Company’s sales have historically experienced some seasonality. The Company has typically experienced its highest level of sales of its products in the second and third fiscal quarters as retailers across North America and Europe change over their floor sets, build inventory and fulfill consumer demand for outdoor cooking products. Sales are typically lower during the first and fourth fiscal quarters, with the exception of the Australia/New Zealand business which is counter seasonal to the balance of the business. Accounts Receivable Receivables Purchase Agreement In March 2022, the Company entered into an agreement to sell certain trade accounts receivable to a third party financial institution (“Receivables Purchase Agreement”). The Receivables Purchase Agreement results in the transfer of the trade accounts receivable and associated risks to the third party and provides the third party with the full benefits and burdens of ownership in exchange for cash proceeds to the Company. The trade accounts receivable transferred are accounted for as sales of receivables as they had satisfied the required criteria under Accounting Standards Codification (“ASC”) 860, Transfers and Servicing, and were de-recognized from the Company’s consolidated balance sheets. The maximum receivables that may be sold under the Receivables Purchase Agreement at any time is $235.0 million. There were no trade accounts receivable sold under the Receivables Purchase Agreement during the quarter ended December 31, 2022 as the third party under the Receivables Purchase Agreement had previously informed the Company that, as permitted by the terms of the agreement, it would not be purchasing trade accounts receivable for an unspecified period of time. There can be no assurance that the third party will begin purchasing trade accounts receivable in the near term, or at all. Allowance for Expected Credit Losses Accounts receivable consist primarily of amounts due to the Company from its normal business activities, offset by an allowance for expected credit losses. The Company estimates its expected credit losses based on historical experience, the aging of accounts receivable, consideration of current economic conditions and its expectations of future economic conditions. Additionally, the Company establishes customer-specific allowances for known at-risk accounts. The Company does not require collateral from its customers. Accounts receivable are written off when it is determined that the receivable will not be collected. The Company estimates its expected credit losses based on historical experience, the aging of accounts receivable, consideration of current economic conditions and its expectations of future economic conditions. The allowance for expected credit losses was $3.5 million and $3.6 million as of December 31, 2022 and September 30, 2022, respectively. Inventories The components of inventory are as follows:
Prepaid expenses and other current assets The components of prepaid expenses and other current assets are as follows:
New Accounting Pronouncements Recently Adopted In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This ASU is effective for all entities beginning as of its date of effectiveness, March 12, 2020. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extended the date which this temporary guidance can be applied to December 31, 2024. This guidance has not impacted our condensed consolidated financial statements to date. The Company will continue to monitor the impact of the ASU on our condensed consolidated financial statements in the future. New Accounting Pronouncements Issued but Not Yet Adopted In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. This guidance requires annual and interim disclosures for entities that use supplier finance programs in connection with the purchase of goods and services. These amendments are effective for fiscal years beginning after December 15, 2022, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. This guidance is not expected to have a material impact on our condensed consolidated financial statements. No other new accounting pronouncement issued or effective during the fiscal year had, or is expected to have, a material impact on our condensed consolidated financial statements.
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangibles | 2. Goodwill and Other Intangibles Goodwill allocated to the Company's reportable segments and changes in the carrying amount of goodwill during the three months ended December 31, 2022 were as follows:
The Company’s intangible assets consist of the following:
The Company’s indefinite-lived intangible assets consist of Trademark—Weber. Total amortization expense for the Company’s intangible assets was $5.1 million and $5.2 million for the three months ended December 31, 2022 and 2021, respectively.
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Property, Equipment and Leasehold Improvements |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Equipment and Leasehold Improvements | 3. Property, Equipment and Leasehold Improvements Property, equipment and leasehold improvements, net consists of the following:
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Restructuring Costs |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Costs | 4. Restructuring Costs The Company's Board of Directors approved a restructuring plan in the fourth quarter of fiscal year 2022 as part of a cost-saving plan to preserve liquidity, expand gross margins and reduce selling, general and administrative costs. The restructuring plan included the termination of certain senior executives, a workforce reduction of non-manufacturing and distribution headcount, the termination of certain contracts and the disposal of certain other assets. The Company expects to substantially complete the restructuring plan by the end of fiscal year 2023. The accrued restructuring costs balance of $9.7 million and $17.6 million was included in Accrued expenses as of December 31, 2022 and September 30, 2022, respectively. The accrued restructuring costs balance relates to cash payments for severance and other termination-related benefits that will occur over the salary-continuation period (generally of 12 months or less) and the Company’s estimate of potential obligations related to certain contract terminations. As of December 31, 2022, the total cumulative costs associated with the plan were $21.2 million, of which $9.1 million relates to Americas, $0.7 million relates to EMEA, $2.4 million relates to APAC and $9.0 million relates to Corporate/Other. No further costs are expected to be incurred. The following table summarizes accrued restructuring costs activity:
_____________ (1)Of the total adjustments to the restructuring reserve, $0.9 million relates to Americas and $0.3 million relates to APAC.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | 5. Debt Long-term debt consists of the following:
Aggregate maturities of long-term debt as of December 31, 2022, are as follows (dollars in thousands):
Secured Credit Facility The Company has a credit facility arrangement with an initial term loan of $1,250.0 million (“Term Loan”), an Incremental Term Loan of $250.0 million (“Incremental Term Loan”) and a revolving credit facility (“Revolving Loan”) with a maximum commitment of $300.0 million, which can be restricted to a lower borrowing level based on the result of a financial covenant testing condition, as defined in the Secured Credit Facility loan agreement (collectively, the “Secured Credit Facility”). As of December 31, 2022, the Revolving Loan had borrowings outstanding of $278.0 million and letters of credit issued of $9.2 million, leaving $12.8 million of available borrowing capacity. On December 27, 2022, the Company amended the Secured Credit Facility loan agreement. Pursuant to the amendment, the leverage ratio covenant was waived for the fiscal quarters ending December 31, 2022, and March 31, 2023. In connection with this amendment, the Company paid financing costs totaling $0.8 million, which were recorded as deferred financing costs and are amortized over the duration of the covenant waiver. Unsecured 12% Term Loan On November 8, 2022, the Company entered into a loan agreement with BDT Capital Partners Fund I, L.P. and BDT Capital Partners Fund I-A, L.P. The loan agreement provides for an unsecured term loan in an initial aggregate principal amount of $61.2 million (the “Unsecured 12% Term Loan”) and additional unsecured term loans in an aggregate principal amount of up to $150.0 million. On December 11, 2022, the loan agreement was amended to extend the maturity of the Unsecured 12% Term Loan, as well as any additional unsecured term loans entered into under the loan agreement, from January 29, 2026 to January 29, 2028. The Unsecured 12% Term Loan, as well as any additional unsecured term loans entered into under the loan agreement, bears interest at a fixed annual rate equal to 12.0%, payable in kind or in cash, at the election of the Company, on a quarterly basis (and, in the absence of such election, interest will be paid in kind). An upfront fee of 2.0% of the principal amount was paid in kind upon funding of the Unsecured 12% Term Loan. In connection with the Unsecured 12% Term Loan, the Company paid financing costs totaling $1.7 million, which were recorded as deferred financing costs within Long-term debt — related party in the condensed consolidated balance sheets and are amortized over the life of the Unsecured 12% Term Loan. Principal under the Unsecured 12% Term Loan, as well as any additional unsecured term loans entered into under the loan agreement, is due on the maturity date of January 29, 2028, along with any fees and interest paid in kind. As of December 31, 2022, the Unsecured 12% Term Loan balance also reflects the upfront fee of $1.2 million that was paid in kind. The Unsecured 12% Term Loan contains no negative covenants and no financial maintenance covenant and is considered a related party transaction. Unsecured 15% Credit Facility On December 11, 2022, the Company entered into a loan agreement with Ribeye Parent, LLC, which provides for an unsecured delayed draw term loan of $120.0 million (the “Unsecured 15% Term Loan”) and an unsecured revolving credit facility with an initial aggregate commitment of $230.0 million (the “Unsecured Revolving Loan”) (collectively, the “Unsecured 15% Credit Facility”). The Unsecured 15% Term Loan and Unsecured Revolving Loan may be drawn down subject to customary closing conditions no later than December 31, 2023. Borrowings under the Unsecured 15% Credit Facility mature on December 31, 2023. Borrowings under the Unsecured 15% Credit Facility bear interest at a fixed annual rate equal to 15.0%, payable in kind or in cash, at the election of the Company, on a quarterly basis (and, in the absence of such election, interest will be paid in kind). An upfront fee of 2.0% of the aggregate revolving credit facility commitments was paid in kind on the closing date of the Unsecured 15% Credit Facility and an upfront fee of 2.0% of the principal amount will be payable in kind or in cash upon funding of the Unsecured 15% Term Loan. A commitment fee of 0.5% per annum or average daily unused commitments under the Unsecured 15% Credit Facility is payable in kind or in cash on a quarterly basis. In connection with the Unsecured Revolving Loan, the Company paid financing costs totaling $4.7 million, which were recorded as deferred financing costs within Other long-term assets in the condensed consolidated balance sheets and are amortized over the life of the Unsecured Revolving Loan. As of December 31, 2022, the Unsecured Revolving Loan had borrowings outstanding related to the upfront fee of $4.6 million that was paid in kind. The upfront fee did not reduce the available borrowing capacity of the Unsecured Revolving Loan, leaving available borrowing capacity of $230.0 million as of December 31, 2022. The Company did not draw on the Unsecured 15% Term Loan as of December 31, 2022. The Unsecured 15% Credit Facility contains no negative covenants and no financial maintenance covenant and is considered a related party transaction. Covenants The Secured Credit Facility contains certain restrictive covenants relating to, among other things, limitations on indebtedness, transactions with affiliates, sales of assets, acquisitions and members’ distributions. In addition, above a certain borrowing level, there is a financial covenant relating to the Company’s average leverage ratio. As of December 31, 2022, the leverage ratio covenant was waived and the Company was in compliance with all other covenants in the Secured Credit Facility. The Unsecured 12% Term Loan and Unsecured 15% Credit Facility contain no negative covenants and no financial maintenance covenant.
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Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | 6. Derivative Instruments Interest Rate Swap Contracts The Company uses interest rate swap contracts to minimize the effect of fluctuating variable interest rates under the Secured Credit Facility on Interest expense, net within its reported operating results. As cash flow hedges, the interest rate swaps are revalued at current market rates, with the changes in valuation reflected directly in Other comprehensive (loss) income, to the extent that the hedge is effective. The gains or losses on the interest rate swaps reported in Accumulated other comprehensive (loss) income in equity are reclassified into Interest expense, net in the periods in which the monthly interest settlement is paid on the interest rate swap. The notional values of the Company’s outstanding interest rate swap contracts were as follows:
On October 30, 2020, the Company completed a series of transactions to amend and extend certain interest rate swap agreements by an additional three years. These interest rate swap transactions consisted of the following: (i) $360.0 million of the interest rate swaps were de-designated as cash flow hedges, (ii) the Company entered into a $360.0 million pay-variable receive-fixed interest rate swap which was designed to economically offset the terms of the $360.0 million of swaps in (i) and which are not designated as cash flow hedges, and (iii) the Company entered into a $500.0 million new pay-fixed interest rate swap with an extended maturity. The new pay-fixed interest rate swap is considered a hybrid instrument with a financing component and an embedded at-market derivative that was designated as a cash flow hedge (see discussion of cash flow presentation below). At the time of the de-designation of the above $360.0 million in interest rate swaps, there was approximately $38.2 million of unrealized losses recorded in Accumulated other comprehensive (loss) income. This amount is amortized to interest expense through the remaining term of the original de-designated swaps unless it becomes probable that the cash flows originally hedged will not occur, in which case the proportionate amount of the loss will be recorded to interest expense at that time. The $360.0 million of interest rate swaps de-designated as cash flows hedges and the $360.0 million of offsetting swaps will be marked to market with changes in fair value recognized, along with the fixed and variable payments on these swaps, in interest expense which are expected to nearly offset each other. The Company presents the derivatives on a gross basis on the balance sheet. The $500.0 million pay-fixed interest rate swap is a hybrid instrument in accordance with ASC 815, Derivatives and Hedging, consisting of a financing component and an embedded at-market derivative. The financing component is accounted for at amortized cost over the life of the swap while the embedded at-market derivative is accounted for at fair value on the balance sheet and designated as a cash flow hedge. This $500.0 million swap is indexed to one-month LIBOR and is net settled on a monthly basis with the counterparty for the difference between the fixed rate of 2.2025% and the variable rate based upon one-month LIBOR (subject to a floor of 0.75%) as applied to the notional amount of the swap. In connection with the transactions discussed above, no cash was exchanged between the Company and the counterparty. The liability of the terminated interest rate swaps as well as the inception value of the receive-fixed interest rate swap was blended into the new pay-fixed interest rate swap. Cash settlements related to interest rate contracts will generally be classified as operating activities on the condensed consolidated statements of cash flows. The cash flows related to the portion of the hybrid instrument treated as debt are classified as financing activities in the condensed consolidated statements of cash flows while the portion treated as an at-market derivative is classified as operating activities. See Note 10 for further information. Foreign Currency Forward Contracts The Company enters into foreign currency forward contracts to minimize the effect of fluctuating variable foreign currency denominated cash flows impacting Gross profit within its reported operating results. When entered, these financial instruments are designated as cash flow hedges of underlying exposures and de-designated when the foreign currency denominated sale of inventory is made to a third party. As cash flow hedges, the forward contracts are revalued at current foreign exchange rates with the changes in the valuation reflected directly in Accumulated other comprehensive (loss) income, to the extent that the hedge is effective. The gains or losses on the forward contracts reported in Accumulated other comprehensive (loss) income in equity (deficit) are reclassified into Cost of goods sold in the period or periods in which the foreign currency denominated sale of inventory is made to a third party and the contracts are de-designated. The gains or losses from changes in the fair value of foreign exchange contracts de-designated as cash flow hedges are recorded in Foreign currency (gain) loss. The Company also enters into foreign currency forward contracts that economically hedge its risk on foreign currency denominated receivables. The gains or losses from changes in fair value on these contracts are recorded in Foreign currency (gain) loss. Cash settlements related to forward currency forward contracts are classified as operating activities on the condensed consolidated statements of cash flows. There were no outstanding foreign currency forward contracts as of December 31, 2022 or September 30, 2022. Cash Flow Hedges Impact on the Condensed Consolidated Statements of Comprehensive (Loss) Income For derivatives designated as cash flow hedges, the (loss) gain recognized in Other comprehensive (loss) income was:
Cash Flow Hedges Impact on the Condensed Consolidated Statements of Operations For derivatives designated as cash flow hedges, the gain reclassified from Accumulated other comprehensive (loss) income into the condensed consolidated statements of operations was:
For derivatives de-designated as cash flow hedges and economic hedges on foreign currency denominated receivables, the (gain) loss recognized directly into Foreign currency (gain) loss in the condensed consolidated statements of operations was:
As of December 31, 2022, the Company estimates that it will recognize approximately $9.7 million of gains associated with the above contracts in net (loss) income within the next 12 months. Commodity Index Contracts The Company used commodity index contracts to reduce its exposure to fluctuations in cash flows relating to the purchases of aluminum and steel-based components and raw materials impacting Gross profit. The commodity index contracts were accounted for as financial instruments and the Company did not apply hedge accounting. There were no outstanding commodity index contracts as of December 31, 2022. The notional values of the Company’s outstanding commodity index contracts were as follows:
As financial instruments, the commodity index hedges were revalued at current commodity index rates with the changes in the valuation reflected directly in Cost of goods sold. The Company recorded a corresponding loss (gain) on the change in fair market value as follows:
See Note 10 for further information. Counterparty Credit Risk Using derivative instruments means assuming counterparty credit risk. Counterparty credit risk relates to the loss the Company could incur if a counterparty were to default on a derivative contract. The Company deals with only investment-grade counterparties and monitors the overall credit risk and exposure to individual counterparties. The Company did not experience any nonperformance by a counterparty during the three months ended December 31, 2022 or 2021. The Company did not require, nor did it post, collateral or security on such contracts.
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Income Taxes |
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Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes In accordance with ASC 740, Income Taxes, the Company makes its best estimate of the annual effective tax rate at the end of each interim period, and the impact of discrete items, if any, and adjusts the rate as necessary. The Company recorded income tax expense of $5.1 million for the three months ended December 31, 2022, primarily related to the tax expense incurred in the Company’s foreign subsidiaries, which resulted in an effective tax rate of (4.7)%, as compared to the federal statutory rate of 21.0%. The difference in the effective tax rate was due to foreign taxes owed by foreign subsidiaries, previously established valuation allowances on U.S. and certain foreign pre-tax losses and changes in existing uncertain tax positions. The Company recorded an income tax benefit of $30.4 million for the three months ended December 31, 2021, resulting in an effective tax rate of 29.0%, as compared to the federal statutory rate of 21.0%. The effective tax rate was higher than the statutory rate due to foreign taxes owed by foreign subsidiaries, uncertain tax positions and increases on certain previously established valuation allowances. These unfavorable expenses were partially offset by a noncontrolling interest benefit to adjust for Weber Inc.'s allocable share of Weber HoldCo LLC's net loss for the quarter.
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Commitments and Contingencies |
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Commitments and Contingencies | 8. Commitments and Contingencies Warranty The Company offers warranties on most of its products. The specific terms and conditions of the warranties offered by the Company vary depending upon the product sold. The Company estimates the costs that may be incurred under its warranty plans and the period for which claims are honored, and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the Company’s warranty liability include the number of units sold, the type of products sold, historical and anticipated rates of warranty claims and cost per claim. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. The following is an analysis of product warranty reserves and charges against those reserves (dollars in thousands):
The balance of warranty reserves recorded in Other long-term liabilities was $23.2 million as of both December 31, 2022 and September 30, 2022. The remaining current balances of $5.3 million and $5.5 million as of December 31, 2022 and September 30, 2022, respectively, were recorded in Accrued expenses. Contingent Consideration As part of the acquisition of all aspects of the business related to iGrill and Kitchen Thermometer products from iDevices, LLC (“iDevices”), the Company has future cash payments due to iDevices in conjunction with an earn-out and development agreement. Under this agreement, the Company paid iDevices a minimum of $8.0 million, and then must pay additional royalty payments at fixed rates on iGrill and Kitchen Thermometer products sold for a total of 10 years or up to $15.0 million, whichever comes first. Under the terms of the earn-out and development agreement, the Company paid $0.1 million during both the three months ended December 31, 2022 and 2021. The fair value of the contingent consideration liability was $0.6 million at both December 31, 2022 and September 30, 2022. The fair value of these estimated future cash payments was based on valuation methods and management’s best estimates and was recorded in Other long-term liabilities in the condensed consolidated balance sheets. Legal Proceedings The Company is subject to a variety of investigations, claims, suits and other legal proceedings that arise from time to time in the ordinary course of business including, but not limited to, intellectual property, employment, tort and breach of contract matters, as well as securities litigation. The Company currently believes that the outcomes of such proceedings, individually and in the aggregate, will not have a material adverse impact on its business, cash flows, financial position or results of operations. Any legal proceedings are subject to inherent uncertainties, and management’s view of these matters and their potential effects may change in the future.
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Related Parties |
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Related Party Transactions [Abstract] | |
Related Parties | 9. Related Parties Periodically, the Company engages in transactions with related parties, which include entities that are owned in whole or in part by certain owners or employees of the Company. The Company leases office facilities in Australia from a related party. Rental expense amounted to $0.2 million for the both three months ended December 31, 2022 and 2021. The Company had related party operating right-of-use assets of $1.0 million and $1.1 million at December 31, 2022 and September 30, 2022, respectively. Additionally, the Company had related party current operating lease liabilities of $0.4 million at both December 31, 2022 and September 30, 2022 and non-current operating lease liabilities of $0.7 million and $1.1 million at December 31, 2022 and September 30, 2022, respectively. The Company has a royalty agreement with a related party for the use of the Company’s trademark. Royalty revenue from this agreement was $0.2 million and $0.1 million for the three months ended December 31, 2022 and 2021, respectively. The Company had a royalty receivable of $0.1 million from this related party at both December 31, 2022 and September 30, 2022. As described in Note 5, in November 2022 the Company entered into the Unsecured 12% Term Loan and in December 2022 the Company entered into the Unsecured 15% Credit Facility, which were both related party transactions. In connection with these related party loans, the Company incurred financing costs of $5.8 million, which were paid in kind to the related parties. In addition, the Company incurred interest of $1.3 million during the three months ended December 31, 2022, which was paid in kind to the related parties.
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | 10. Fair Value of Financial Instruments With respect to financial assets and liabilities, fair value is defined as the exchange price that would be received for an asset, or paid to transfer a liability (an exit price), in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy has been established based on three levels of inputs, of which the first two are considered observable and the last unobservable. •Level 1—Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets. •Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily available pricing sources for comparable instruments. •Level 3—Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own assumptions of the data that market participants would use in pricing the asset or liability based on the best information available in the circumstances. The Company had interest rate swap contracts held with financial institutions as of December 31, 2022 and September 30, 2022, classified as Level 2 financial instruments, which are valued using observable underlying interest rates and market-determined risk premiums at the reporting date. The Company had commodity index contracts held with financial institutions as of September 30, 2022, classified as Level 2 financial instruments, which are valued using observable commodity index rates at the reporting date. The Company had a contingent consideration liability as of December 31, 2022 and September 30, 2022, classified as a Level 3 instrument, in conjunction with its acquisition of all aspects of the business related to iGrill and Kitchen Thermometer products from iDevices. The fair value of these estimated future cash payments was determined based on valuation methods and estimates of future cash flows. See Note 8 for further details. The fair value of financial assets and liabilities measured on a recurring basis was as follows:
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Stock-Based Compensation | 11. Stock-Based Compensation The Weber Inc. Omnibus Incentive Plan (the “2021 Plan”) provides for the issuance of up to 22,694,608 shares of Class A common stock in connection with equity awards granted under the 2021 Plan. The Company has three types of share-based compensation awards outstanding under the 2021 Plan: profits interest awards, options and restricted stock units (“RSUs”). Profits Interest Awards Prior to the Company's IPO, the Company granted profits interest units with vesting periods ranging from to five years to certain key employees in consideration for their services to or for the benefit of the Company. A portion of the profits interest units vest based on service and a portion of the awards based on service as well as the Company’s achievement of certain performance objectives associated with net sales (“hybrid units”). The profits interest units have distribution thresholds determined on a per common unit in Weber HoldCo LLC (“LLC unit”) basis with the holder receiving, upon exercise, a value in LLC units equal to the difference between the current fair value per LLC unit less the distribution threshold. Therefore, the distribution thresholds serve as a cashless exercise price, with holders receiving their share of the value of the Company’s implied equity value in excess of the distribution threshold. Once vested, the profits interests represent profits interest ownership in the Company tied solely to the accretion, if any, in the value of the Company in excess of the distribution threshold. During fiscal year 2022, Weber Inc. paid dividends to holders of Class A common stock. Profits interest units that were outstanding at the time of the dividends were adjusted pursuant to pre-existing anti-dilution provisions in the Company’s equity incentive plan documents. The adjustments reduced the distribution thresholds of outstanding profits interest units by the amount of the dividend per share. The adjustments did not result in incremental stock-based compensation expense as the anti-dilutive adjustments were required by pre-existing terms included within the awards. There were no changes to the profits interest units distribution thresholds during the three months ended December 31, 2022. The following table summarizes the Company’s profits interest award activity during the three months ended December 31, 2022:
_____________ (1)The hybrid awards vest based on achievement of a performance target. For the awards that will vest during the second quarter of fiscal year 2023, 55% of the awards met the performance target resulting in a 45% reduction in the number of units that will vest. During the three months ended December 31, 2022, there were no profits interest unit awards granted or vested. As of December 31, 2022, there were 9,701,516 vested profits interest service-based units and 491,849 vested profits interest hybrid units. As of December 31, 2022, there was $4.5 million and $1.2 million of total unrecognized compensation cost related to nonvested profits interest service-based units and hybrid units, respectively. The remaining unrecognized compensation cost is expected to be recognized over a weighted-average period of 0.5 years for service-based units and 0.1 years for hybrid units. Options During the three months ended December 31, 2022, zero options were granted and 168,115 options vested. RSUs During the three months ended December 31, 2022 the Company granted RSUs to certain employees of the Company. The RSUs vest over a period ranging from one year to three years. The RSUs accrue dividend equivalents associated with the underlying shares of Class A common stock as the Company declares dividends. Dividends will generally be paid to holders of RSUs in cash upon the vesting date of the associated RSU and will be forfeited if the RSU does not vest. RSUs that were converted from equity awards outstanding prior to the Company’s IPO do not accrue dividends until they are fully vested. The fair value of the RSU awards was calculated utilizing the closing day stock price on the date of grant. Upon vesting of the award, the Company will issue shares of Class A common stock to the award holder. At the time of issuance, the Company will typically withhold the number of shares to satisfy the statutory withholding tax obligation and deliver the net number of resulting shares vested to award holder. The following tables summarize the Company’s RSUs and activity during the three months ended December 31, 2022:
_____________ (1)For RSUs granted after the Company's IPO, the settlement of awards occurs on the vesting date. For RSUs that were converted from Pre-IPO Management Incentive Compensation Plan awards, the post vesting settlement of awards can occur up to ten years after the vesting date. As of December 31, 2022, there was $41.5 million of total unrecognized compensation cost related to RSUs. The remaining unrecognized compensation cost is expected to be recognized over a weighted-average period of 0.9 years. Employee Stock Purchase Plan In December 2022, the Compensation Committee approved the termination of the Employee Stock Purchase Plan (“ESPP”), which was effective immediately. There were no shares purchased under the ESPP during the three months ended December 31, 2022. Summary of Stock-Based Compensation Expense The table below summarizes stock-based compensation expense recognized by award type:
_____________ (1)In addition to the stock-based compensation expense recognized for the awards listed above, zero and $1.1 million of expense was recognized related to partial recourse member notes for the three months ended December 31, 2022 and 2021, respectively.
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments | 12. Segments The Company has three operating segments, Americas, Europe, Middle East and Africa (“EMEA”) and Asia-Pacific (“APAC”). The Company’s reportable segments consist of Americas, EMEA and APAC. Corporate/Other is not an operating segment and includes unallocated corporate and certain supply chain expenses and assets (consisting primarily of cash, land, buildings and equipment, certain intangible assets (trademark) and deferred tax assets), inter-segment eliminations and other adjustments to segment results necessary for the presentation of consolidated financial results in accordance with GAAP. Internal revenue transactions between the Company’s segments are immaterial. Each operating segment derives its revenues from the provision of gas, charcoal, electric and pellet grills and related accessories to customers. The Company’s Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer (“CEO”). The CEO reviews financial information presented on a consolidated basis, accompanied by disaggregated information about the Company’s revenue and profitability, for purposes of making operating decisions, assessing financial performance and allocating resources. The CODM receives discrete financial information by segment. The CODM reviews adjusted loss from operations as the key segment measure of performance. Adjusted loss from operations is defined as loss from operations adjusted for unallocated net expenses, stock-based compensation and restructuring costs. Adjusted loss from operations excludes interest expense, net, and income taxes. The information below summarizes key financial performance measures by reportable segment:
_____________ (1)Adjusted loss from operations for each reportable segment includes cost of goods sold transfer price allocations and distribution allocations from Corporate/Other. Corporate/Other includes unallocated corporate and certain supply chain expenses, inter-segment eliminations and other adjustments, including business and operational transformation costs and financing costs. Reconciliations The information below provides a reconciliation of segment adjusted income from operations to loss before taxes:
_____________ (1)Unallocated net expenses includes Corporate/Other, which consists of unallocated corporate and certain supply chain expenses, inter-segment eliminations and other adjustments, including business and operational transformation costs and financing costs. The information below provides a reconciliation of segment assets to total consolidated assets:
_____________ (1)Inventory is the only segment asset reviewed by the CODM. (2)“All other” consists of assets that are not reviewed by the CODM at a segment level: cash and cash equivalents; accounts receivable; prepaid and other tax assets; prepaid expenses and other current assets; property, equipment and leasehold improvements, net; operating lease right-of-use assets; other long-term assets; trademarks, net; other intangible assets, net; and goodwill.
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Noncontrolling Interests |
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Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interests | 13. Noncontrolling Interests The noncontrolling interests balance represents the economic interests in Weber HoldCo LLC held by the Pre-IPO LLC Members. The following table summarizes the ownership of LLC Units in Weber HoldCo LLC as of December 31, 2022:
The noncontrolling interest holders have the right to exchange an LLC unit along with a share of Class B common stock ("Paired Interests") for Class A common stock. As such, future exchanges of Paired Interests by noncontrolling interest holders will result in a change in ownership and decrease or increase the amount recorded as noncontrolling interests and increase or decrease additional paid-in capital when Weber HoldCo LLC has positive or negative net assets, respectively. During the three months ended December 31, 2022, pre-IPO LLC members exchanged 30,259 Paired Interests for Class A common stock.
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Earnings (Loss) Per Share |
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Earnings Per Unit [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Share | 14. Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net (loss) income attributable to Weber Inc. by the weighted average number of Class A common stock outstanding during the period. The weighted average number of Class A common stock outstanding during the period includes both the weighted average of Class A common stock outstanding as well as the weighted average of vested RSUs outstanding during the period. Shares of Class B common stock do not share in earnings and are not participating securities. Accordingly, separate presentation of earnings (loss) per share of Class B common stock under the two-class method has not been presented. Diluted earnings (loss) per share is calculated by giving effect to the potentially dilutive weighted average impact of profits interest awards, options, RSUs and HoldCo LLC Units that are convertible into shares of our Class A common stock when paired with an equal number of shares of Class B common stock. A reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings (loss) per share of Class A common stock is as follows:
_____________ (1)This adjustment assumes after-tax elimination of noncontrolling interests due to the assumed exchange of all Paired Interests for shares of Class A common stock in Weber Inc. as of the beginning of the period following the if-converted method for calculating diluted net loss per share. (2)The diluted weighted average shares outstanding of Class A common stock includes the effects of the if-converted method to reflect the assumed exchange of all Paired Interests on a one-for-one basis for shares of Class A common stock in Weber Inc. The following number of weighted average potentially dilutive shares were excluded from the calculation of diluted loss per share because the effect of including such potentially dilutive shares would have been anti-dilutive:
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General (Policies) |
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Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | The condensed consolidated financial statements of Weber Inc. were prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) for interim reporting. In management’s opinion, the interim financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the results of financial position, operations and cash flows for the periods presented. The results of operations for the period ended December 31, 2022 are not necessarily indicative of the operating results expected for the full fiscal year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022. Weber HoldCo LLC is considered a variable interest entity. Weber Inc. is the primary beneficiary of Weber HoldCo LLC and has decision making authority that significantly affects the economic performance of this entity. As a result, Weber Inc. consolidates the financial statements of Weber HoldCo LLC. Noncontrolling interests reflect the entitlement of the owners of Weber-Stephen Products LLC’s outstanding equity interests prior to the IPO (“Pre-IPO LLC Members”) to a portion of Weber HoldCo LLC’s net (loss) income.
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Fiscal Year | Fiscal Year The Company’s fiscal year runs from October 1 through September 30. All references to years are to fiscal years unless otherwise stated. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The effect of the change in the estimates will be recognized in the current period of the change.
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Seasonality | Seasonality Although the Company generally has demand for its products throughout the year, the Company’s sales have historically experienced some seasonality. The Company has typically experienced its highest level of sales of its products in the second and third fiscal quarters as retailers across North America and Europe change over their floor sets, build inventory and fulfill consumer demand for outdoor cooking products. Sales are typically lower during the first and fourth fiscal quarters, with the exception of the Australia/New Zealand business which is counter seasonal to the balance of the business.
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Accounts Receivable | Accounts Receivable Receivables Purchase Agreement In March 2022, the Company entered into an agreement to sell certain trade accounts receivable to a third party financial institution (“Receivables Purchase Agreement”). The Receivables Purchase Agreement results in the transfer of the trade accounts receivable and associated risks to the third party and provides the third party with the full benefits and burdens of ownership in exchange for cash proceeds to the Company. The trade accounts receivable transferred are accounted for as sales of receivables as they had satisfied the required criteria under Accounting Standards Codification (“ASC”) 860, Transfers and Servicing, and were de-recognized from the Company’s consolidated balance sheets. The maximum receivables that may be sold under the Receivables Purchase Agreement at any time is $235.0 million. There were no trade accounts receivable sold under the Receivables Purchase Agreement during the quarter ended December 31, 2022 as the third party under the Receivables Purchase Agreement had previously informed the Company that, as permitted by the terms of the agreement, it would not be purchasing trade accounts receivable for an unspecified period of time. There can be no assurance that the third party will begin purchasing trade accounts receivable in the near term, or at all.
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Allowance for Expected Credit Losses | Allowance for Expected Credit Losses Accounts receivable consist primarily of amounts due to the Company from its normal business activities, offset by an allowance for expected credit losses. The Company estimates its expected credit losses based on historical experience, the aging of accounts receivable, consideration of current economic conditions and its expectations of future economic conditions. Additionally, the Company establishes customer-specific allowances for known at-risk accounts. The Company does not require collateral from its customers. Accounts receivable are written off when it is determined that the receivable will not be collected. The Company estimates its expected credit losses based on historical experience, the aging of accounts receivable, consideration of current economic conditions and its expectations of future economic conditions.
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New Accounting Pronouncements Recently Adopted | New Accounting Pronouncements Recently Adopted In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This ASU is effective for all entities beginning as of its date of effectiveness, March 12, 2020. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extended the date which this temporary guidance can be applied to December 31, 2024. This guidance has not impacted our condensed consolidated financial statements to date. The Company will continue to monitor the impact of the ASU on our condensed consolidated financial statements in the future.
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New Accounting Pronouncements Issued But Not Yet Adopted | New Accounting Pronouncements Issued but Not Yet Adopted In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. This guidance requires annual and interim disclosures for entities that use supplier finance programs in connection with the purchase of goods and services. These amendments are effective for fiscal years beginning after December 15, 2022, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. This guidance is not expected to have a material impact on our condensed consolidated financial statements. No other new accounting pronouncement issued or effective during the fiscal year had, or is expected to have, a material impact on our condensed consolidated financial statements.
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General (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Components of Inventory | The components of inventory are as follows:
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure | The components of prepaid expenses and other current assets are as follows:
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Goodwill and Other Intangibles (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Company's Goodwill | Goodwill allocated to the Company's reportable segments and changes in the carrying amount of goodwill during the three months ended December 31, 2022 were as follows:
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Summary of Company's Intangible Assets | The Company’s intangible assets consist of the following:
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Property, Equipment and Leasehold Improvements (Tables) |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Property, Equipment and Leasehold Improvements, Net | Property, equipment and leasehold improvements, net consists of the following:
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Restructuring Costs (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Restructuring and Related Costs | The following table summarizes accrued restructuring costs activity:
_____________ (1)Of the total adjustments to the restructuring reserve, $0.9 million relates to Americas and $0.3 million relates to APAC.
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Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Long-term Debt | Long-term debt consists of the following:
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Summary of Aggregate Maturities of Long-term Debt | Aggregate maturities of long-term debt as of December 31, 2022, are as follows (dollars in thousands):
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Derivative Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Notional Amounts of Outstanding Derivatives | The notional values of the Company’s outstanding interest rate swap contracts were as follows:
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Summary of Derivative Instruments, Gain (Loss) | For derivatives designated as cash flow hedges, the (loss) gain recognized in Other comprehensive (loss) income was:
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Summary of Cash Flow Hedges Included in Accumulated Other Comprehensive (Loss) Income | For derivatives designated as cash flow hedges, the gain reclassified from Accumulated other comprehensive (loss) income into the condensed consolidated statements of operations was:
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Summary of Foreign Exchange Contracts, Statement of Financial Position | For derivatives de-designated as cash flow hedges and economic hedges on foreign currency denominated receivables, the (gain) loss recognized directly into Foreign currency (gain) loss in the condensed consolidated statements of operations was:
The notional values of the Company’s outstanding commodity index contracts were as follows:
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Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability | The following is an analysis of product warranty reserves and charges against those reserves (dollars in thousands):
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Fair Value of Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis | The fair value of financial assets and liabilities measured on a recurring basis was as follows:
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Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Profits Interest Units Activity | The following table summarizes the Company’s profits interest award activity during the three months ended December 31, 2022:
_____________ (1)The hybrid awards vest based on achievement of a performance target. For the awards that will vest during the second quarter of fiscal year 2023, 55% of the awards met the performance target resulting in a 45% reduction in the number of units that will vest. The following tables summarize the Company’s RSUs and activity during the three months ended December 31, 2022:
_____________ (1)For RSUs granted after the Company's IPO, the settlement of awards occurs on the vesting date. For RSUs that were converted from Pre-IPO Management Incentive Compensation Plan awards, the post vesting settlement of awards can occur up to ten years after the vesting date.
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Summary of Stock-based Compensation Expense Recognized by Award Type | The table below summarizes stock-based compensation expense recognized by award type:
_____________ (1)In addition to the stock-based compensation expense recognized for the awards listed above, zero and $1.1 million of expense was recognized related to partial recourse member notes for the three months ended December 31, 2022 and 2021, respectively.
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Segments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Key Financial Performance Measures by Reportable Segment | The information below summarizes key financial performance measures by reportable segment:
_____________ (1)Adjusted loss from operations for each reportable segment includes cost of goods sold transfer price allocations and distribution allocations from Corporate/Other. Corporate/Other includes unallocated corporate and certain supply chain expenses, inter-segment eliminations and other adjustments, including business and operational transformation costs and financing costs.
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Summary of Reconciliation of Adjusted Income From Operations to Income Before Taxes | The information below provides a reconciliation of segment adjusted income from operations to loss before taxes:
_____________ (1)Unallocated net expenses includes Corporate/Other, which consists of unallocated corporate and certain supply chain expenses, inter-segment eliminations and other adjustments, including business and operational transformation costs and financing costs.
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Summary of Reconcilaition of Segment Assets to Total Consolidated Assets | The information below provides a reconciliation of segment assets to total consolidated assets:
_____________ (1)Inventory is the only segment asset reviewed by the CODM. (2)“All other” consists of assets that are not reviewed by the CODM at a segment level: cash and cash equivalents; accounts receivable; prepaid and other tax assets; prepaid expenses and other current assets; property, equipment and leasehold improvements, net; operating lease right-of-use assets; other long-term assets; trademarks, net; other intangible assets, net; and goodwill.
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Noncontrolling Interests (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Redeemable Noncontrolling Interest | The noncontrolling interests balance represents the economic interests in Weber HoldCo LLC held by the Pre-IPO LLC Members. The following table summarizes the ownership of LLC Units in Weber HoldCo LLC as of December 31, 2022:
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Earnings (Loss) Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Unit [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Earnings Per Share, Basic and Diluted | A reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings (loss) per share of Class A common stock is as follows:
_____________ (1)This adjustment assumes after-tax elimination of noncontrolling interests due to the assumed exchange of all Paired Interests for shares of Class A common stock in Weber Inc. as of the beginning of the period following the if-converted method for calculating diluted net loss per share. (2)The diluted weighted average shares outstanding of Class A common stock includes the effects of the if-converted method to reflect the assumed exchange of all Paired Interests on a one-for-one basis for shares of Class A common stock in Weber Inc.
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Summary of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following number of weighted average potentially dilutive shares were excluded from the calculation of diluted loss per share because the effect of including such potentially dilutive shares would have been anti-dilutive:
|
General - Narrative (Details) $ / shares in Units, $ in Millions |
1 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2022
USD ($)
|
Dec. 31, 2022
USD ($)
country
|
Dec. 11, 2022
$ / shares
|
Sep. 30, 2022
USD ($)
|
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Number of countries in which entity operates | country | 78 | |||
Receivables purchase agreement, sale of receivables, maximum amount | $ 235.0 | |||
Allowance for expected credit loss | $ 3.5 | $ 3.6 | ||
Agreement And Plan Of Merger | Class A Common Stock | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Business acquisition, share price | $ / shares | $ 8.05 |
General - Summary of Components of Inventory (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Sep. 30, 2022 |
---|---|---|
Accounting Policies [Abstract] | ||
Work-in-process and materials | $ 64,916 | $ 68,186 |
Finished products | 326,463 | 271,317 |
Total inventories, net | $ 391,379 | $ 339,503 |
General - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Sep. 30, 2022 |
---|---|---|
Accounting Policies [Abstract] | ||
Value added taxes receivable | $ 29,816 | $ 30,407 |
Current portion of derivative instruments | 26,998 | 22,277 |
Other | 46,561 | 38,325 |
Total prepaid expenses and other current assets | $ 103,375 | $ 91,009 |
Goodwill and Other Intangibles - Summary of Company's Goodwill (Details) $ in Thousands |
3 Months Ended |
---|---|
Dec. 31, 2022
USD ($)
| |
Goodwill [Roll Forward] | |
Beginning Balance | $ 104,142 |
Foreign exchange | 2,722 |
Ending Balance | 106,864 |
Americas | |
Goodwill [Roll Forward] | |
Beginning Balance | 72,412 |
Foreign exchange | 0 |
Ending Balance | 72,412 |
EMEA | |
Goodwill [Roll Forward] | |
Beginning Balance | 8,965 |
Foreign exchange | 824 |
Ending Balance | 9,789 |
APAC | |
Goodwill [Roll Forward] | |
Beginning Balance | 22,765 |
Foreign exchange | 1,898 |
Ending Balance | $ 24,663 |
Goodwill and Other Intangibles - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 5,073 | $ 5,174 |
Property, Equipment and Leasehold Improvements - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Sep. 30, 2022 |
|
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 10,033 | $ 8,613 | |
Amortization of capitalized software costs | 2,000 | $ 1,900 | |
Unamortized software costs | $ 57,400 | $ 54,000 |
Restructuring Costs - Narrative (Details) - Restructuring Plan 2022 - USD ($) $ in Millions |
Dec. 31, 2022 |
Sep. 30, 2022 |
---|---|---|
Restructuring Cost and Reserve [Line Items] | ||
Accrued restructuring costs | $ 9.7 | $ 17.6 |
Cumulative costs | 21.2 | |
Americas | ||
Restructuring Cost and Reserve [Line Items] | ||
Cumulative costs | 9.1 | |
EMEA | ||
Restructuring Cost and Reserve [Line Items] | ||
Cumulative costs | 0.7 | |
APAC | ||
Restructuring Cost and Reserve [Line Items] | ||
Cumulative costs | 2.4 | |
Corporate and Other | ||
Restructuring Cost and Reserve [Line Items] | ||
Cumulative costs | $ 9.0 |
Debt - Summary of Aggregate Maturities of Long-term Debt (Details) $ in Thousands |
Dec. 31, 2022
USD ($)
|
---|---|
Maturities of Long-term Debt [Abstract] | |
Remaining period of 2023 | $ 11,250 |
2024 | 15,000 |
2025 | 15,000 |
2026 | 15,000 |
2027 | 15,000 |
Thereafter | 1,244,199 |
Total debt | $ 1,315,449 |
Derivative Instruments - Summary of Company's Outstanding Interest Rate Swap Contracts (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Sep. 30, 2022 |
---|---|---|
Interest rate swap contracts | ||
Derivative [Line Items] | ||
Interest rate swap and foreign currency contracts | $ 1,220,000 | $ 1,220,000 |
Derivative Instruments - Summary of the (Loss) Gain Recognized in Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain (loss) recognized in Other comprehensive (loss) income | $ (2,832) | $ 5,316 |
Cash Flow Hedging | Designated as Hedging Instrument | Interest rate swap contracts | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain (loss) recognized in Other comprehensive (loss) income | $ (1,345) | $ 2,880 |
Derivative Instruments - Summary of Cash Flow Hedges (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Cash Flow Hedging | Designated as Hedging Instrument | Interest rate swap contracts | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Total gain recognized | $ (1,487) | $ 2,673 |
Derivative Instruments - Summary of Foreign Currency (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Foreign Currency Gain (Loss) | Foreign currency forward contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Foreign currency forward contracts | $ 0 | $ (320) |
Derivative Instruments - Schedule of Notional Amounts of Commodity Index (Details) - lb lb in Thousands |
Dec. 31, 2022 |
Sep. 30, 2022 |
---|---|---|
Steel index contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative nonmonetary notional amount (in pounds) | 0 | 600 |
Derivative Instruments - Schedule of loss (gain) on change in fair market value (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Commodity Contract | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Commodity index contracts | $ 0 | $ 221 |
Income Taxes - Additional information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 5,073 | $ (30,387) |
Effective income tax rate reconciliation (percent) | (4.70%) | 29.00% |
Commitments and Contingencies - Schedule of product warranty reserves and charges (Details) $ in Thousands |
3 Months Ended |
---|---|
Dec. 31, 2022
USD ($)
| |
Product Warranty [Roll Forward] | |
Balance at the beginning of the period | $ 28,743 |
Accrual for warranties issued | 635 |
Warranty settlements made | (893) |
Balance at the end of the period | $ 28,485 |
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Sep. 30, 2022 |
|
Payments under consideration agreement | $ 0.1 | $ 0.1 | |
Contingent consideration, liability | 0.6 | $ 0.6 | |
iDevices LLC | |||
Contingent consideration arrangements, high range of outcomes, value | 15.0 | ||
iDevices LLC | Earnout and development agreement | |||
Contingent consideration arrangements, minimum outcome | $ 8.0 | ||
Contingent consideration arrangements range of outcomes term (in years) | 10 years | ||
Other Noncurrent Liabilities | |||
Product warranty accrual, noncurrent | $ 23.2 | 23.2 | |
Accounts Payable and Accrued Liabilities | |||
Product warranty accrual, current | $ 5.3 | $ 5.5 |
Related Parties - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Sep. 30, 2022 |
|
Operating lease right-of-use assets | $ 73,339 | $ 71,879 | |
Non-current operating lease liabilities | 61,670 | 60,544 | |
Interest | 1,300 | ||
Unsecured Debt, 12 Percent and 15 Percent Credit Facility | |||
Amounts of related party transaction | 5,800 | ||
Royalty | |||
Revenue from related parties | 200 | $ 100 | |
Royalty receivables | 100 | 100 | |
Rental Expense | AUSTRALIA | |||
Operating lease expense | 200 | $ 200 | |
Operating lease right-of-use assets | 1,000 | 1,100 | |
Operating lease liability, current | 400 | 400 | |
Non-current operating lease liabilities | $ 700 | $ 1,100 |
Segments - Narrative (Details) |
3 Months Ended |
---|---|
Dec. 31, 2022
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Segments - Summary of Reconcilaition of Segment Assets to Total Consolidated Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Sep. 30, 2022 |
---|---|---|
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Segment assets | $ 391,379 | $ 339,503 |
All other | 1,168,929 | 1,108,471 |
Total assets | 1,560,308 | 1,447,974 |
Operating Segments | Americas | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Segment assets | 154,251 | 147,502 |
Operating Segments | EMEA | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Segment assets | 186,850 | 138,316 |
Operating Segments | APAC | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Segment assets | 50,278 | 53,685 |
Corporate/Other | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Segment assets | $ 0 | $ 0 |
Noncontrolling Interests (Details) |
3 Months Ended |
---|---|
Dec. 31, 2022
shares
| |
Class A Common Stock | Common Stock | |
Noncontrolling Interest [Line Items] | |
Conversion of paired interests (in shares) | 30,259 |
LLC Units and Units Held by Pre-IPO LLC Members | |
Noncontrolling Interest [Line Items] | |
LLC Units (in shares) | 288,214,769 |
Ownership Percentage | 100.00% |
LLC Units held by Weber Inc. | |
Noncontrolling Interest [Line Items] | |
LLC Units (in shares) | 53,738,392 |
Ownership Percentage | 19.00% |
Units held by Pre-IPO LLC Members | |
Noncontrolling Interest [Line Items] | |
LLC Units (in shares) | 234,476,377 |
Ownership Percentage | 81.00% |
Earnings (Loss) Per Share - Summary of Net Income Per Unit (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Numerator: | ||
Net loss | $ (113,891) | $ (74,553) |
Less: Net loss attributable to noncontrolling interests | (86,701) | (91,330) |
Net loss (income) attributable to Weber Inc. - basic | (27,190) | 16,777 |
Add: Net income (loss) attributable to dilutive impact of Paired Interests | 0 | (71,380) |
Net loss attributable to Weber Inc. - diluted | $ (27,190) | $ (54,603) |
Denominator: | ||
Weighted average Class A Common stock outstanding - basic (in shares) | 54,604,105 | 53,309,932 |
Add: Class A common stock assumed exchange for Paired Interests (in shares) | 0 | 234,645,219 |
Weighted average shares of Class A common stock outstanding - diluted (in shares) | 54,604,105 | 287,955,151 |
Earnings (loss) per Class A common stock - basic (in dollars per share) | $ (0.50) | $ 0.31 |
Earnings (loss) per Class A common stock - diluted (in dollars per share) | $ (0.50) | $ (0.19) |
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