Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries CORRECTING and REPLACING Traeger Announces Second Quarter Fiscal 2023 Results By: Traeger, Inc. via Business Wire August 08, 2023 at 06:00 AM EDT Traeger, Inc. ("Traeger" or the "Company") (NYSE: COOK), creator and category leader of the wood pellet grill, today announced corrections to its press release issued August 2, 2023, announcing the Company’s unaudited financial results for the second quarter ended June 30, 2023. The corrections to the financials presented in the press release are non-cash, and do not change the Company's revenues, Adjusted net income, or Adjusted EBITDA. The corrections do not change the Company’s 2023 revenue or Adjusted EBITDA guidance, and the Company reiterates the guidance it provided in its second quarter earnings release issued on August 2, 2023. The corrections relate to accounting treatment for the Company’s dedesignation of its interest rate swap which occurred in the first quarter of 2023, in which the Company discontinued cash flow hedge accounting, and result in a decrease in net loss to $30.2 million for the three months ended June 30, 2023 and an increase in net loss to $41.1 million for the six months ended June 30, 2023. The corrected press release reads: TRAEGER ANNOUNCES SECOND QUARTER FISCAL 2023 RESULTS Second Quarter FY 23 Results Total revenues decreased 14.4% to $171.5 million Gross profit margin of 36.9%, up 25 basis points compared to prior year Net loss of $30.2 million compared to net loss of $133.1 million compared to the prior year Adjusted EBITDA of $21.5 million, up from $17.0 million in the prior year 26% sequential reduction in balance sheet inventory driven by strategic inventory management Raises FY 2023 revenue and Adjusted EBITDA guidance Operating Results for the Second Quarter Total revenue decreased by 14.4% to $171.5 million, compared to $200.3 million in the second quarter last year. Grills decreased 20.9% to $93.1 million as compared to the second quarter last year. The decrease was primarily driven by lower average selling prices in addition to decreased unit volumes. Consumables decreased 17.1% to $34.9 million as compared to the second quarter last year. The decrease was driven by lower unit volumes in addition to decreased average selling prices. Accessories increased 7.4% to $43.5 million as compared to the second quarter last year. This increase was driven primarily by increased average selling prices for Traeger branded accessories and increased revenue due to sales of MEATER smart thermometers. North America revenue declined 15.6% in the second quarter compared to the prior year. Rest of World revenues increased 3.0% in the second quarter compared to the prior year. Gross profit decreased to $63.3 million, compared to $73.4 million in the second quarter last year. Gross profit margin was 36.9% in the second quarter, compared to 36.7% in the same period last year. The increase in gross margin was driven primarily by favorability from freight costs and foreign exchange rates, offset by increased dilution. Sales and marketing expenses were $27.9 million, compared to $42.1 million in the second quarter last year. The decrease in sales and marketing expense was driven by reduced investments in advertising costs and lower costs for commissions and travel related expenses. General and administrative expenses were $52.4 million, compared to $31.4 million in the second quarter last year. The increase in general and administrative expense was driven by higher equity-based compensation expense of $32.1 million primarily due to the cancellation of the unearned CEO and initial public offering performance-based restricted stock units, as well as higher costs for professional fees. The increases were partially offset by lower employee related costs. Net loss was $30.2 million in the second quarter, or a loss of $0.25 per diluted share, as compared to net loss of $133.1 million in the second quarter of last year, or a loss of $1.13 per diluted share.1 Adjusted net income was $4.3 million, or $0.04 per diluted share as compared to adjusted net income of $3.9 million, or $0.03 per diluted share in the second quarter last year.2 Adjusted EBITDA was $21.5 million in the second quarter as compared to $17.0 million in the same period last year.2 1 There were no potentially dilutive securities outstanding as of June 30, 2023 and 2022. 2 Reconciliations of GAAP to non-GAAP financial measures, as well as definitions for the non-GAAP financial measures included in this press release and the reasons for their use, are presented below. Balance Sheet Cash and cash equivalents at the end of the second quarter totaled $14.5 million, compared to $39.1 million at December 31, 2022. Inventory at the end of the second quarter was $97.8 million, compared to $153.5 million at December 31, 2022. The decrease in inventory was driven primarily by strategic inventory management. Guidance For Full Year Fiscal 2023 The Company is increasing its total revenue and Adjusted EBITDA guidance for Fiscal 2023. The Company's updated outlook reflects better than anticipated results in the first half of the year and expected growth in revenue and EBITDA in the second half of the year. Total revenue is expected to be between $585 million and $600 million Gross Margin is expected to be between 36% and 37% Adjusted EBITDA is expected to be between $55 million and $59 million A reconciliation of Adjusted EBITDA guidance to Net Loss on a forward-looking basis cannot be provided without unreasonable efforts, as the Company is unable to provide reconciling information with respect to provision for income taxes, interest expense, depreciation and amortization, other (income) expense, stock-based compensation, goodwill impairment, non-routine legal expenses, change in fair value of contingent consideration, and other adjustment items all of which are adjustments to Adjusted EBITDA. About Traeger Traeger, headquartered in Salt Lake City, is the creator and category leader of the wood pellet grill, an outdoor cooking system that ignites all-natural hardwoods to grill, smoke, bake, roast, braise, and barbecue. In 2023, Traeger entered the griddle category, further establishing its leadership position in the outdoor cooking space. Traeger grills are versatile and easy to use, empowering cooks of all skill sets to create delicious meals with flavor that cannot be replicated. Grills are at the core of our platform and are complemented by Traeger wood pellets, rubs, sauces, accessories, and MEATER smart thermometers. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding our anticipated full year fiscal 2023 results. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, our history of operating losses, our ability to manage our future growth effectively, our ability to expand into additional markets, our ability to maintain and strengthen our brand to generate and maintain ongoing demand for our products, our ability to cost-effectively attract new customers and retain our existing customers, our failure to maintain product quality and product performance at an acceptable cost, the impact of product liability and warranty claims and product recalls, the highly competitive market in which we operate, the use of social media and community ambassadors, a decline in sales of our grills, our dependence on three major retailers, risks associated with our international operations, our reliance on a limited number of third-party manufacturers and problems with (or loss of) our suppliers or an inability to obtain raw materials, and the ability of our stockholders to influence corporate matters and the other important factors discussed under the caption "Risk Factors" in our periodic and current reports filed with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K for the year ended December 31, 2022, as updated by Part II, Item 1A. "Risk Factors" our Quarterly Report on Form 10-Q for the period ended June 30, 2023. Any such forward-looking statements represent management's estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. TRAEGER, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) June 30, 2023 December 31, 2022 (unaudited) ASSETS Current Assets Cash and cash equivalents $ 14,496 $ 39,055 Restricted cash — 12,500 Accounts receivable, net 83,290 42,050 Inventories 97,803 153,471 Prepaid expenses and other current assets 29,842 27,162 Total current assets 225,431 274,238 Property, plant, and equipment, net 52,274 55,510 Operating lease right-of-use assets 11,284 13,854 Goodwill 74,725 74,725 Intangible assets, net 491,700 512,858 Other non-current assets 14,231 15,530 Total assets $ 869,645 $ 946,715 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Accounts payable $ 18,563 $ 29,841 Accrued expenses 49,094 52,295 Line of credit 40,000 11,709 Current portion of notes payable 250 250 Current portion of operating lease liabilities 4,109 5,185 Current portion of contingent consideration 13,110 12,157 Other current liabilities 2,143 1,470 Total current liabilities 127,269 112,907 Notes payable, net of current portion 396,722 468,108 Operating leases liabilities, net of current portion 7,470 9,001 Contingent consideration, net of current portion — 10,590 Deferred tax liability 10,378 10,370 Other non-current liabilities 281 870 Total liabilities 542,120 611,846 Commitments and contingencies—See Note 10 Stockholders' equity: Preferred stock, $0.0001 par value; 25,000,000 shares authorized and no shares issued or outstanding as of June 30, 2023 and December 31, 2022 — — Common stock, $0.0001 par value; 1,000,000,000 shares authorized Issued and outstanding shares - 123,960,782 and 122,624,414 as of June 30, 2023 and December 31, 2022 12 12 Additional paid-in capital 923,048 882,069 Accumulated deficit (611,571 ) (570,475 ) Accumulated other comprehensive income 16,036 23,263 Total stockholders' equity 327,525 334,869 Total liabilities and stockholders' equity $ 869,645 $ 946,715 TRAEGER, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) (in thousands, except share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenue $ 171,512 $ 200,270 $ 324,673 $ 423,980 Cost of revenue 108,181 126,829 205,919 267,895 Gross profit 63,331 73,441 118,754 156,085 Operating expenses: Sales and marketing 27,915 42,051 49,990 76,905 General and administrative 52,371 31,436 79,050 72,152 Amortization of intangible assets 8,888 8,888 17,777 17,777 Change in fair value of contingent consideration 1,765 255 2,808 1,955 Goodwill impairment — 111,485 — 111,485 Total operating expense 90,939 194,115 149,625 280,274 Loss from operations (27,608 ) (120,674 ) (30,871 ) (124,189 ) Other income (expense): Interest expense (7,810 ) (7,064 ) (15,891 ) (12,901 ) Other income (expense), net 5,450 (5,350 ) 6,028 (4,806 ) Total other expense (2,360 ) (12,414 ) (9,863 ) (17,707 ) Loss before provision for income taxes (29,968 ) (133,088 ) (40,734 ) (141,896 ) Provision for income taxes 198 46 362 198 Net loss $ (30,166 ) $ (133,134 ) $ (41,096 ) $ (142,094 ) Net loss per share, basic and diluted $ (0.25 ) $ (1.13 ) $ (0.33 ) $ (1.20 ) Weighted average common shares outstanding, basic and diluted 123,027,759 118,211,168 122,864,345 118,051,090 Other comprehensive income (loss): Foreign currency translation adjustments $ 35 $ 12 $ 3 $ 9 Change in cash flow hedge — 5,735 (2,088 ) 12,324 Amortization of dedesignated cash flow (2,769 ) — (5,142 ) — Total other comprehensive income (loss) (2,734 ) 5,747 (7,227 ) 12,333 Comprehensive loss $ (32,900 ) $ (127,387 ) $ (48,323 ) $ (129,761 ) TRAEGER, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) Six Months Ended June 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (41,096 ) $ (142,094 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation of property, plant and equipment 7,462 6,023 Amortization of intangible assets 21,378 21,337 Amortization of deferred financing costs 1,026 979 Loss on disposal of property, plant and equipment 1,689 1,176 Stock-based compensation expense 40,979 27,434 Bad debt expense 189 (127 ) Unrealized loss (gain) on derivative contracts (2,066 ) 2,864 Amortization of dedesignated cash flow hedge (5,142 ) — Change in fair value of contingent consideration 2,588 (1,325 ) Goodwill impairment — 111,485 Other non-cash adjustments (17 ) — Change in operating assets and liabilities: Accounts receivable (40,979 ) (18,709 ) Inventories, net 55,668 (17,781 ) Prepaid expenses and other current assets (1,074 ) (2,394 ) Other non-current assets (13 ) 23 Accounts payable and accrued expenses (14,154 ) (18,954 ) Other non-current liabilities (582 ) 13 Net cash provided by (used in) operating activities 25,856 (30,050 ) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant, and equipment (8,854 ) (12,422 ) Capitalization of patent costs (223 ) (305 ) Proceeds from sale of property, plant, and equipment 2,450 — Net cash used in investing activities (6,627 ) (12,727 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from line of credit 86,500 110,600 Repayments on line of credit (130,209 ) (73,927 ) Proceeds from long-term debt — 12,500 Repayments of long-term debt (103 ) — Principal payments on capital lease obligations (251 ) (217 ) Payment of acquisition related contingent consideration (12,225 ) (9,275 ) Taxes paid related to net share settlement of equity awards — (41 ) Net cash provided by (used in) financing activities (56,288 ) 39,640 Net decrease in cash, cash equivalents and restricted cash (37,059 ) (3,137 ) Cash, cash equivalents and restricted cash at beginning of period 51,555 16,740 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 14,496 $ 13,603 TRAEGER, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) (Continued) Six Months Ended June 30, 2023 2022 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for interest $ 20,487 $ 11,781 Cash paid for income taxes $ 1,576 $ 1,988 NON-CASH FINANCING AND INVESTING ACTIVITIES Equipment purchased under finance leases $ 383 $ 344 Property, plant, and equipment included in accounts payable and accrued expenses $ 1,813 $ 8,736 TRAEGER, INC. RECONCILIATIONS OF AND OTHER INFORMATION REGARDING NON-GAAP FINANCIAL MEASURES (unaudited) In addition to our results and measures of performance determined in accordance with U.S. GAAP, we believe that certain non-GAAP financial measures are useful in evaluating and comparing our financial and operational performance over multiple periods, identifying trends affecting our business, formulating business plans and making strategic decisions. Each of Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per share, Adjusted EBITDA Margin, and Adjusted Net Income Margin are key performance measures that our management uses to assess our financial performance and is also used for internal planning and forecasting purposes. We believe that these non-GAAP financial measures are useful to investors and other interested parties in analyzing our financial performance because it provides a comparable overview of our operations across historical periods. In addition, we believe that providing each of Adjusted EBITDA and Adjusted Net Income, together with a reconciliation of Net Loss to each such measure, and providing Adjusted Net Income per share, together with a reconciliation of Net Loss per share to such measure, and Adjusted EBITDA Margin and Adjusted Net Income Margin, together with a reconciliation of Net Loss Margin to such measures, helps investors make comparisons between our company and other companies that may have different capital structures, different tax rates, and/or different forms of employee compensation. For example, due to finite-lived intangible assets included on our balance sheet following our corporate reorganization in 2017, we have significant non-cash amortization expense attributable to the nature of our capital structure. Each of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share are used by our management team as an additional measure of our performance for purposes of business decision-making, including managing expenditures, and evaluating potential acquisitions. Period-to-period comparisons of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share help our management identify additional trends in our financial results that may not be shown solely by period-to-period comparisons of Net Loss or Loss from Continuing Operations or Net Loss per share. In addition, we may use Adjusted EBITDA in the incentive compensation programs applicable to some of our employees. Each of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share has inherent limitations because of the excluded items, and may not be directly comparable to similarly titled metrics used by other companies. The following table presents a reconciliation of Net Loss, Net Loss Margin and Net Loss per share, the most directly comparable financial measures calculated in accordance with U.S. GAAP, to Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income Margin and Adjusted Net Income per share, respectively, on a consolidated basis. Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (dollars in thousands, except share and per share amounts) Net loss $ (30,166 ) $ (133,134 ) $ (41,096 ) $ (142,094 ) Adjustments: Other (income) expense (1) (9,298 ) 3,401 (10,658 ) 4,075 Goodwill impairment — 111,485 — 111,485 Stock-based compensation 33,036 11,951 40,979 27,434 Non-routine legal expenses (2) 248 1,051 481 2,969 Amortization of acquisition intangibles (3) 8,253 8,253 16,507 16,507 Change in fair value of contingent consideration 1,765 255 2,808 1,955 Other adjustment items (4) 526 668 669 1,081 Tax impact of adjusting items (5) (46 ) — 106 — Adjusted net income $ 4,318 $ 3,930 $ 9,796 $ 23,412 Net loss $ (30,166 ) $ (133,134 ) $ (41,096 ) $ (142,094 ) Adjustments: Provision for income taxes 198 46 362 198 Interest expense 7,810 7,064 15,891 12,901 Depreciation and amortization 14,587 14,242 28,841 27,419 Other (income) expense (6) (6,529 ) 3,401 (5,516 ) 4,075 Goodwill impairment — 111,485 — 111,485 Stock-based compensation 33,036 11,951 40,979 27,434 Non-routine legal expenses (2) 248 1,051 481 2,969 Change in fair value of contingent consideration 1,765 255 2,808 1,955 Other adjustment items (4) 526 668 669 1,081 Adjusted EBITDA $ 21,475 $ 17,029 $ 43,419 $ 47,423 Revenue $ 171,512 $ 200,270 $ 324,673 $ 423,980 Net loss margin (17.6 )% (66.5 )% (12.7 )% (33.5 )% Adjusted net income margin 2.5 % 2.0 % 3.0 % 5.5 % Adjusted EBITDA margin 12.5 % 8.5 % 13.4 % 11.2 % Net loss per diluted share $ (0.25 ) $ (1.13 ) $ (0.33 ) $ (1.20 ) Adjusted net income per diluted share $ 0.04 $ 0.03 $ 0.08 $ 0.20 Weighted average common shares outstanding - diluted 123,027,759 118,211,168 122,864,345 118,051,090 Represents realized and unrealized gains on the interest rate swap, including amortization of dedesignated cash flow hedge, losses on the disposal of property, plant, and equipment, and unrealized gains (losses) from foreign currency transactions and derivatives. Represents external legal expenses for litigation, patent and trademark defense. Represents the amortization expense associated with intangible assets recorded in connection with the 2017 acquisition of Traeger Pellet Grills Holdings LLC. Represents non-routine operational wind-down costs, non-cash ground lease expense associated with a build-to-suit lease in 2022, as well as write-offs and restoration costs at our wood pellet production facility due to flood damage sustained as a result of a tropical storm. Represents an adjusted tax rate equal to our annual estimated tax rate on Adjusted Net Income. This rate is based on our estimated annual GAAP income (loss) tax rate forecast, adjusted to account for items excluded from GAAP income (loss) in calculating the non-GAAP financial measures presented above. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to our estimated annual tax rates, our estimated tax rate on Adjusted Net Income may differ from our GAAP tax rate and from our actual tax liabilities. Represents realized and unrealized gains on the interest rate swap, losses on the disposal of property, plant, and equipment, and unrealized gains (losses) from foreign currency transactions and derivatives. View source version on businesswire.com: https://www.businesswire.com/news/home/20230802925468/en/Contacts Investors: Nick Bacchus Traeger, Inc. investor@traeger.com Media: The Brand Amp Traeger@thebrandamp.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
CORRECTING and REPLACING Traeger Announces Second Quarter Fiscal 2023 Results By: Traeger, Inc. via Business Wire August 08, 2023 at 06:00 AM EDT Traeger, Inc. ("Traeger" or the "Company") (NYSE: COOK), creator and category leader of the wood pellet grill, today announced corrections to its press release issued August 2, 2023, announcing the Company’s unaudited financial results for the second quarter ended June 30, 2023. The corrections to the financials presented in the press release are non-cash, and do not change the Company's revenues, Adjusted net income, or Adjusted EBITDA. The corrections do not change the Company’s 2023 revenue or Adjusted EBITDA guidance, and the Company reiterates the guidance it provided in its second quarter earnings release issued on August 2, 2023. The corrections relate to accounting treatment for the Company’s dedesignation of its interest rate swap which occurred in the first quarter of 2023, in which the Company discontinued cash flow hedge accounting, and result in a decrease in net loss to $30.2 million for the three months ended June 30, 2023 and an increase in net loss to $41.1 million for the six months ended June 30, 2023. The corrected press release reads: TRAEGER ANNOUNCES SECOND QUARTER FISCAL 2023 RESULTS Second Quarter FY 23 Results Total revenues decreased 14.4% to $171.5 million Gross profit margin of 36.9%, up 25 basis points compared to prior year Net loss of $30.2 million compared to net loss of $133.1 million compared to the prior year Adjusted EBITDA of $21.5 million, up from $17.0 million in the prior year 26% sequential reduction in balance sheet inventory driven by strategic inventory management Raises FY 2023 revenue and Adjusted EBITDA guidance Operating Results for the Second Quarter Total revenue decreased by 14.4% to $171.5 million, compared to $200.3 million in the second quarter last year. Grills decreased 20.9% to $93.1 million as compared to the second quarter last year. The decrease was primarily driven by lower average selling prices in addition to decreased unit volumes. Consumables decreased 17.1% to $34.9 million as compared to the second quarter last year. The decrease was driven by lower unit volumes in addition to decreased average selling prices. Accessories increased 7.4% to $43.5 million as compared to the second quarter last year. This increase was driven primarily by increased average selling prices for Traeger branded accessories and increased revenue due to sales of MEATER smart thermometers. North America revenue declined 15.6% in the second quarter compared to the prior year. Rest of World revenues increased 3.0% in the second quarter compared to the prior year. Gross profit decreased to $63.3 million, compared to $73.4 million in the second quarter last year. Gross profit margin was 36.9% in the second quarter, compared to 36.7% in the same period last year. The increase in gross margin was driven primarily by favorability from freight costs and foreign exchange rates, offset by increased dilution. Sales and marketing expenses were $27.9 million, compared to $42.1 million in the second quarter last year. The decrease in sales and marketing expense was driven by reduced investments in advertising costs and lower costs for commissions and travel related expenses. General and administrative expenses were $52.4 million, compared to $31.4 million in the second quarter last year. The increase in general and administrative expense was driven by higher equity-based compensation expense of $32.1 million primarily due to the cancellation of the unearned CEO and initial public offering performance-based restricted stock units, as well as higher costs for professional fees. The increases were partially offset by lower employee related costs. Net loss was $30.2 million in the second quarter, or a loss of $0.25 per diluted share, as compared to net loss of $133.1 million in the second quarter of last year, or a loss of $1.13 per diluted share.1 Adjusted net income was $4.3 million, or $0.04 per diluted share as compared to adjusted net income of $3.9 million, or $0.03 per diluted share in the second quarter last year.2 Adjusted EBITDA was $21.5 million in the second quarter as compared to $17.0 million in the same period last year.2 1 There were no potentially dilutive securities outstanding as of June 30, 2023 and 2022. 2 Reconciliations of GAAP to non-GAAP financial measures, as well as definitions for the non-GAAP financial measures included in this press release and the reasons for their use, are presented below. Balance Sheet Cash and cash equivalents at the end of the second quarter totaled $14.5 million, compared to $39.1 million at December 31, 2022. Inventory at the end of the second quarter was $97.8 million, compared to $153.5 million at December 31, 2022. The decrease in inventory was driven primarily by strategic inventory management. Guidance For Full Year Fiscal 2023 The Company is increasing its total revenue and Adjusted EBITDA guidance for Fiscal 2023. The Company's updated outlook reflects better than anticipated results in the first half of the year and expected growth in revenue and EBITDA in the second half of the year. Total revenue is expected to be between $585 million and $600 million Gross Margin is expected to be between 36% and 37% Adjusted EBITDA is expected to be between $55 million and $59 million A reconciliation of Adjusted EBITDA guidance to Net Loss on a forward-looking basis cannot be provided without unreasonable efforts, as the Company is unable to provide reconciling information with respect to provision for income taxes, interest expense, depreciation and amortization, other (income) expense, stock-based compensation, goodwill impairment, non-routine legal expenses, change in fair value of contingent consideration, and other adjustment items all of which are adjustments to Adjusted EBITDA. About Traeger Traeger, headquartered in Salt Lake City, is the creator and category leader of the wood pellet grill, an outdoor cooking system that ignites all-natural hardwoods to grill, smoke, bake, roast, braise, and barbecue. In 2023, Traeger entered the griddle category, further establishing its leadership position in the outdoor cooking space. Traeger grills are versatile and easy to use, empowering cooks of all skill sets to create delicious meals with flavor that cannot be replicated. Grills are at the core of our platform and are complemented by Traeger wood pellets, rubs, sauces, accessories, and MEATER smart thermometers. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding our anticipated full year fiscal 2023 results. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, our history of operating losses, our ability to manage our future growth effectively, our ability to expand into additional markets, our ability to maintain and strengthen our brand to generate and maintain ongoing demand for our products, our ability to cost-effectively attract new customers and retain our existing customers, our failure to maintain product quality and product performance at an acceptable cost, the impact of product liability and warranty claims and product recalls, the highly competitive market in which we operate, the use of social media and community ambassadors, a decline in sales of our grills, our dependence on three major retailers, risks associated with our international operations, our reliance on a limited number of third-party manufacturers and problems with (or loss of) our suppliers or an inability to obtain raw materials, and the ability of our stockholders to influence corporate matters and the other important factors discussed under the caption "Risk Factors" in our periodic and current reports filed with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K for the year ended December 31, 2022, as updated by Part II, Item 1A. "Risk Factors" our Quarterly Report on Form 10-Q for the period ended June 30, 2023. Any such forward-looking statements represent management's estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. TRAEGER, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) June 30, 2023 December 31, 2022 (unaudited) ASSETS Current Assets Cash and cash equivalents $ 14,496 $ 39,055 Restricted cash — 12,500 Accounts receivable, net 83,290 42,050 Inventories 97,803 153,471 Prepaid expenses and other current assets 29,842 27,162 Total current assets 225,431 274,238 Property, plant, and equipment, net 52,274 55,510 Operating lease right-of-use assets 11,284 13,854 Goodwill 74,725 74,725 Intangible assets, net 491,700 512,858 Other non-current assets 14,231 15,530 Total assets $ 869,645 $ 946,715 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Accounts payable $ 18,563 $ 29,841 Accrued expenses 49,094 52,295 Line of credit 40,000 11,709 Current portion of notes payable 250 250 Current portion of operating lease liabilities 4,109 5,185 Current portion of contingent consideration 13,110 12,157 Other current liabilities 2,143 1,470 Total current liabilities 127,269 112,907 Notes payable, net of current portion 396,722 468,108 Operating leases liabilities, net of current portion 7,470 9,001 Contingent consideration, net of current portion — 10,590 Deferred tax liability 10,378 10,370 Other non-current liabilities 281 870 Total liabilities 542,120 611,846 Commitments and contingencies—See Note 10 Stockholders' equity: Preferred stock, $0.0001 par value; 25,000,000 shares authorized and no shares issued or outstanding as of June 30, 2023 and December 31, 2022 — — Common stock, $0.0001 par value; 1,000,000,000 shares authorized Issued and outstanding shares - 123,960,782 and 122,624,414 as of June 30, 2023 and December 31, 2022 12 12 Additional paid-in capital 923,048 882,069 Accumulated deficit (611,571 ) (570,475 ) Accumulated other comprehensive income 16,036 23,263 Total stockholders' equity 327,525 334,869 Total liabilities and stockholders' equity $ 869,645 $ 946,715 TRAEGER, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) (in thousands, except share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenue $ 171,512 $ 200,270 $ 324,673 $ 423,980 Cost of revenue 108,181 126,829 205,919 267,895 Gross profit 63,331 73,441 118,754 156,085 Operating expenses: Sales and marketing 27,915 42,051 49,990 76,905 General and administrative 52,371 31,436 79,050 72,152 Amortization of intangible assets 8,888 8,888 17,777 17,777 Change in fair value of contingent consideration 1,765 255 2,808 1,955 Goodwill impairment — 111,485 — 111,485 Total operating expense 90,939 194,115 149,625 280,274 Loss from operations (27,608 ) (120,674 ) (30,871 ) (124,189 ) Other income (expense): Interest expense (7,810 ) (7,064 ) (15,891 ) (12,901 ) Other income (expense), net 5,450 (5,350 ) 6,028 (4,806 ) Total other expense (2,360 ) (12,414 ) (9,863 ) (17,707 ) Loss before provision for income taxes (29,968 ) (133,088 ) (40,734 ) (141,896 ) Provision for income taxes 198 46 362 198 Net loss $ (30,166 ) $ (133,134 ) $ (41,096 ) $ (142,094 ) Net loss per share, basic and diluted $ (0.25 ) $ (1.13 ) $ (0.33 ) $ (1.20 ) Weighted average common shares outstanding, basic and diluted 123,027,759 118,211,168 122,864,345 118,051,090 Other comprehensive income (loss): Foreign currency translation adjustments $ 35 $ 12 $ 3 $ 9 Change in cash flow hedge — 5,735 (2,088 ) 12,324 Amortization of dedesignated cash flow (2,769 ) — (5,142 ) — Total other comprehensive income (loss) (2,734 ) 5,747 (7,227 ) 12,333 Comprehensive loss $ (32,900 ) $ (127,387 ) $ (48,323 ) $ (129,761 ) TRAEGER, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) Six Months Ended June 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (41,096 ) $ (142,094 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation of property, plant and equipment 7,462 6,023 Amortization of intangible assets 21,378 21,337 Amortization of deferred financing costs 1,026 979 Loss on disposal of property, plant and equipment 1,689 1,176 Stock-based compensation expense 40,979 27,434 Bad debt expense 189 (127 ) Unrealized loss (gain) on derivative contracts (2,066 ) 2,864 Amortization of dedesignated cash flow hedge (5,142 ) — Change in fair value of contingent consideration 2,588 (1,325 ) Goodwill impairment — 111,485 Other non-cash adjustments (17 ) — Change in operating assets and liabilities: Accounts receivable (40,979 ) (18,709 ) Inventories, net 55,668 (17,781 ) Prepaid expenses and other current assets (1,074 ) (2,394 ) Other non-current assets (13 ) 23 Accounts payable and accrued expenses (14,154 ) (18,954 ) Other non-current liabilities (582 ) 13 Net cash provided by (used in) operating activities 25,856 (30,050 ) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant, and equipment (8,854 ) (12,422 ) Capitalization of patent costs (223 ) (305 ) Proceeds from sale of property, plant, and equipment 2,450 — Net cash used in investing activities (6,627 ) (12,727 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from line of credit 86,500 110,600 Repayments on line of credit (130,209 ) (73,927 ) Proceeds from long-term debt — 12,500 Repayments of long-term debt (103 ) — Principal payments on capital lease obligations (251 ) (217 ) Payment of acquisition related contingent consideration (12,225 ) (9,275 ) Taxes paid related to net share settlement of equity awards — (41 ) Net cash provided by (used in) financing activities (56,288 ) 39,640 Net decrease in cash, cash equivalents and restricted cash (37,059 ) (3,137 ) Cash, cash equivalents and restricted cash at beginning of period 51,555 16,740 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 14,496 $ 13,603 TRAEGER, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) (Continued) Six Months Ended June 30, 2023 2022 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for interest $ 20,487 $ 11,781 Cash paid for income taxes $ 1,576 $ 1,988 NON-CASH FINANCING AND INVESTING ACTIVITIES Equipment purchased under finance leases $ 383 $ 344 Property, plant, and equipment included in accounts payable and accrued expenses $ 1,813 $ 8,736 TRAEGER, INC. RECONCILIATIONS OF AND OTHER INFORMATION REGARDING NON-GAAP FINANCIAL MEASURES (unaudited) In addition to our results and measures of performance determined in accordance with U.S. GAAP, we believe that certain non-GAAP financial measures are useful in evaluating and comparing our financial and operational performance over multiple periods, identifying trends affecting our business, formulating business plans and making strategic decisions. Each of Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per share, Adjusted EBITDA Margin, and Adjusted Net Income Margin are key performance measures that our management uses to assess our financial performance and is also used for internal planning and forecasting purposes. We believe that these non-GAAP financial measures are useful to investors and other interested parties in analyzing our financial performance because it provides a comparable overview of our operations across historical periods. In addition, we believe that providing each of Adjusted EBITDA and Adjusted Net Income, together with a reconciliation of Net Loss to each such measure, and providing Adjusted Net Income per share, together with a reconciliation of Net Loss per share to such measure, and Adjusted EBITDA Margin and Adjusted Net Income Margin, together with a reconciliation of Net Loss Margin to such measures, helps investors make comparisons between our company and other companies that may have different capital structures, different tax rates, and/or different forms of employee compensation. For example, due to finite-lived intangible assets included on our balance sheet following our corporate reorganization in 2017, we have significant non-cash amortization expense attributable to the nature of our capital structure. Each of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share are used by our management team as an additional measure of our performance for purposes of business decision-making, including managing expenditures, and evaluating potential acquisitions. Period-to-period comparisons of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share help our management identify additional trends in our financial results that may not be shown solely by period-to-period comparisons of Net Loss or Loss from Continuing Operations or Net Loss per share. In addition, we may use Adjusted EBITDA in the incentive compensation programs applicable to some of our employees. Each of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share has inherent limitations because of the excluded items, and may not be directly comparable to similarly titled metrics used by other companies. The following table presents a reconciliation of Net Loss, Net Loss Margin and Net Loss per share, the most directly comparable financial measures calculated in accordance with U.S. GAAP, to Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income Margin and Adjusted Net Income per share, respectively, on a consolidated basis. Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (dollars in thousands, except share and per share amounts) Net loss $ (30,166 ) $ (133,134 ) $ (41,096 ) $ (142,094 ) Adjustments: Other (income) expense (1) (9,298 ) 3,401 (10,658 ) 4,075 Goodwill impairment — 111,485 — 111,485 Stock-based compensation 33,036 11,951 40,979 27,434 Non-routine legal expenses (2) 248 1,051 481 2,969 Amortization of acquisition intangibles (3) 8,253 8,253 16,507 16,507 Change in fair value of contingent consideration 1,765 255 2,808 1,955 Other adjustment items (4) 526 668 669 1,081 Tax impact of adjusting items (5) (46 ) — 106 — Adjusted net income $ 4,318 $ 3,930 $ 9,796 $ 23,412 Net loss $ (30,166 ) $ (133,134 ) $ (41,096 ) $ (142,094 ) Adjustments: Provision for income taxes 198 46 362 198 Interest expense 7,810 7,064 15,891 12,901 Depreciation and amortization 14,587 14,242 28,841 27,419 Other (income) expense (6) (6,529 ) 3,401 (5,516 ) 4,075 Goodwill impairment — 111,485 — 111,485 Stock-based compensation 33,036 11,951 40,979 27,434 Non-routine legal expenses (2) 248 1,051 481 2,969 Change in fair value of contingent consideration 1,765 255 2,808 1,955 Other adjustment items (4) 526 668 669 1,081 Adjusted EBITDA $ 21,475 $ 17,029 $ 43,419 $ 47,423 Revenue $ 171,512 $ 200,270 $ 324,673 $ 423,980 Net loss margin (17.6 )% (66.5 )% (12.7 )% (33.5 )% Adjusted net income margin 2.5 % 2.0 % 3.0 % 5.5 % Adjusted EBITDA margin 12.5 % 8.5 % 13.4 % 11.2 % Net loss per diluted share $ (0.25 ) $ (1.13 ) $ (0.33 ) $ (1.20 ) Adjusted net income per diluted share $ 0.04 $ 0.03 $ 0.08 $ 0.20 Weighted average common shares outstanding - diluted 123,027,759 118,211,168 122,864,345 118,051,090 Represents realized and unrealized gains on the interest rate swap, including amortization of dedesignated cash flow hedge, losses on the disposal of property, plant, and equipment, and unrealized gains (losses) from foreign currency transactions and derivatives. Represents external legal expenses for litigation, patent and trademark defense. Represents the amortization expense associated with intangible assets recorded in connection with the 2017 acquisition of Traeger Pellet Grills Holdings LLC. Represents non-routine operational wind-down costs, non-cash ground lease expense associated with a build-to-suit lease in 2022, as well as write-offs and restoration costs at our wood pellet production facility due to flood damage sustained as a result of a tropical storm. Represents an adjusted tax rate equal to our annual estimated tax rate on Adjusted Net Income. This rate is based on our estimated annual GAAP income (loss) tax rate forecast, adjusted to account for items excluded from GAAP income (loss) in calculating the non-GAAP financial measures presented above. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to our estimated annual tax rates, our estimated tax rate on Adjusted Net Income may differ from our GAAP tax rate and from our actual tax liabilities. Represents realized and unrealized gains on the interest rate swap, losses on the disposal of property, plant, and equipment, and unrealized gains (losses) from foreign currency transactions and derivatives. View source version on businesswire.com: https://www.businesswire.com/news/home/20230802925468/en/Contacts Investors: Nick Bacchus Traeger, Inc. investor@traeger.com Media: The Brand Amp Traeger@thebrandamp.com
Traeger, Inc. ("Traeger" or the "Company") (NYSE: COOK), creator and category leader of the wood pellet grill, today announced corrections to its press release issued August 2, 2023, announcing the Company’s unaudited financial results for the second quarter ended June 30, 2023. The corrections to the financials presented in the press release are non-cash, and do not change the Company's revenues, Adjusted net income, or Adjusted EBITDA. The corrections do not change the Company’s 2023 revenue or Adjusted EBITDA guidance, and the Company reiterates the guidance it provided in its second quarter earnings release issued on August 2, 2023. The corrections relate to accounting treatment for the Company’s dedesignation of its interest rate swap which occurred in the first quarter of 2023, in which the Company discontinued cash flow hedge accounting, and result in a decrease in net loss to $30.2 million for the three months ended June 30, 2023 and an increase in net loss to $41.1 million for the six months ended June 30, 2023. The corrected press release reads: TRAEGER ANNOUNCES SECOND QUARTER FISCAL 2023 RESULTS Second Quarter FY 23 Results Total revenues decreased 14.4% to $171.5 million Gross profit margin of 36.9%, up 25 basis points compared to prior year Net loss of $30.2 million compared to net loss of $133.1 million compared to the prior year Adjusted EBITDA of $21.5 million, up from $17.0 million in the prior year 26% sequential reduction in balance sheet inventory driven by strategic inventory management Raises FY 2023 revenue and Adjusted EBITDA guidance Operating Results for the Second Quarter Total revenue decreased by 14.4% to $171.5 million, compared to $200.3 million in the second quarter last year. Grills decreased 20.9% to $93.1 million as compared to the second quarter last year. The decrease was primarily driven by lower average selling prices in addition to decreased unit volumes. Consumables decreased 17.1% to $34.9 million as compared to the second quarter last year. The decrease was driven by lower unit volumes in addition to decreased average selling prices. Accessories increased 7.4% to $43.5 million as compared to the second quarter last year. This increase was driven primarily by increased average selling prices for Traeger branded accessories and increased revenue due to sales of MEATER smart thermometers. North America revenue declined 15.6% in the second quarter compared to the prior year. Rest of World revenues increased 3.0% in the second quarter compared to the prior year. Gross profit decreased to $63.3 million, compared to $73.4 million in the second quarter last year. Gross profit margin was 36.9% in the second quarter, compared to 36.7% in the same period last year. The increase in gross margin was driven primarily by favorability from freight costs and foreign exchange rates, offset by increased dilution. Sales and marketing expenses were $27.9 million, compared to $42.1 million in the second quarter last year. The decrease in sales and marketing expense was driven by reduced investments in advertising costs and lower costs for commissions and travel related expenses. General and administrative expenses were $52.4 million, compared to $31.4 million in the second quarter last year. The increase in general and administrative expense was driven by higher equity-based compensation expense of $32.1 million primarily due to the cancellation of the unearned CEO and initial public offering performance-based restricted stock units, as well as higher costs for professional fees. The increases were partially offset by lower employee related costs. Net loss was $30.2 million in the second quarter, or a loss of $0.25 per diluted share, as compared to net loss of $133.1 million in the second quarter of last year, or a loss of $1.13 per diluted share.1 Adjusted net income was $4.3 million, or $0.04 per diluted share as compared to adjusted net income of $3.9 million, or $0.03 per diluted share in the second quarter last year.2 Adjusted EBITDA was $21.5 million in the second quarter as compared to $17.0 million in the same period last year.2 1 There were no potentially dilutive securities outstanding as of June 30, 2023 and 2022. 2 Reconciliations of GAAP to non-GAAP financial measures, as well as definitions for the non-GAAP financial measures included in this press release and the reasons for their use, are presented below. Balance Sheet Cash and cash equivalents at the end of the second quarter totaled $14.5 million, compared to $39.1 million at December 31, 2022. Inventory at the end of the second quarter was $97.8 million, compared to $153.5 million at December 31, 2022. The decrease in inventory was driven primarily by strategic inventory management. Guidance For Full Year Fiscal 2023 The Company is increasing its total revenue and Adjusted EBITDA guidance for Fiscal 2023. The Company's updated outlook reflects better than anticipated results in the first half of the year and expected growth in revenue and EBITDA in the second half of the year. Total revenue is expected to be between $585 million and $600 million Gross Margin is expected to be between 36% and 37% Adjusted EBITDA is expected to be between $55 million and $59 million A reconciliation of Adjusted EBITDA guidance to Net Loss on a forward-looking basis cannot be provided without unreasonable efforts, as the Company is unable to provide reconciling information with respect to provision for income taxes, interest expense, depreciation and amortization, other (income) expense, stock-based compensation, goodwill impairment, non-routine legal expenses, change in fair value of contingent consideration, and other adjustment items all of which are adjustments to Adjusted EBITDA. About Traeger Traeger, headquartered in Salt Lake City, is the creator and category leader of the wood pellet grill, an outdoor cooking system that ignites all-natural hardwoods to grill, smoke, bake, roast, braise, and barbecue. In 2023, Traeger entered the griddle category, further establishing its leadership position in the outdoor cooking space. Traeger grills are versatile and easy to use, empowering cooks of all skill sets to create delicious meals with flavor that cannot be replicated. Grills are at the core of our platform and are complemented by Traeger wood pellets, rubs, sauces, accessories, and MEATER smart thermometers. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding our anticipated full year fiscal 2023 results. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, our history of operating losses, our ability to manage our future growth effectively, our ability to expand into additional markets, our ability to maintain and strengthen our brand to generate and maintain ongoing demand for our products, our ability to cost-effectively attract new customers and retain our existing customers, our failure to maintain product quality and product performance at an acceptable cost, the impact of product liability and warranty claims and product recalls, the highly competitive market in which we operate, the use of social media and community ambassadors, a decline in sales of our grills, our dependence on three major retailers, risks associated with our international operations, our reliance on a limited number of third-party manufacturers and problems with (or loss of) our suppliers or an inability to obtain raw materials, and the ability of our stockholders to influence corporate matters and the other important factors discussed under the caption "Risk Factors" in our periodic and current reports filed with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K for the year ended December 31, 2022, as updated by Part II, Item 1A. "Risk Factors" our Quarterly Report on Form 10-Q for the period ended June 30, 2023. Any such forward-looking statements represent management's estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. TRAEGER, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) June 30, 2023 December 31, 2022 (unaudited) ASSETS Current Assets Cash and cash equivalents $ 14,496 $ 39,055 Restricted cash — 12,500 Accounts receivable, net 83,290 42,050 Inventories 97,803 153,471 Prepaid expenses and other current assets 29,842 27,162 Total current assets 225,431 274,238 Property, plant, and equipment, net 52,274 55,510 Operating lease right-of-use assets 11,284 13,854 Goodwill 74,725 74,725 Intangible assets, net 491,700 512,858 Other non-current assets 14,231 15,530 Total assets $ 869,645 $ 946,715 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Accounts payable $ 18,563 $ 29,841 Accrued expenses 49,094 52,295 Line of credit 40,000 11,709 Current portion of notes payable 250 250 Current portion of operating lease liabilities 4,109 5,185 Current portion of contingent consideration 13,110 12,157 Other current liabilities 2,143 1,470 Total current liabilities 127,269 112,907 Notes payable, net of current portion 396,722 468,108 Operating leases liabilities, net of current portion 7,470 9,001 Contingent consideration, net of current portion — 10,590 Deferred tax liability 10,378 10,370 Other non-current liabilities 281 870 Total liabilities 542,120 611,846 Commitments and contingencies—See Note 10 Stockholders' equity: Preferred stock, $0.0001 par value; 25,000,000 shares authorized and no shares issued or outstanding as of June 30, 2023 and December 31, 2022 — — Common stock, $0.0001 par value; 1,000,000,000 shares authorized Issued and outstanding shares - 123,960,782 and 122,624,414 as of June 30, 2023 and December 31, 2022 12 12 Additional paid-in capital 923,048 882,069 Accumulated deficit (611,571 ) (570,475 ) Accumulated other comprehensive income 16,036 23,263 Total stockholders' equity 327,525 334,869 Total liabilities and stockholders' equity $ 869,645 $ 946,715 TRAEGER, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) (in thousands, except share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenue $ 171,512 $ 200,270 $ 324,673 $ 423,980 Cost of revenue 108,181 126,829 205,919 267,895 Gross profit 63,331 73,441 118,754 156,085 Operating expenses: Sales and marketing 27,915 42,051 49,990 76,905 General and administrative 52,371 31,436 79,050 72,152 Amortization of intangible assets 8,888 8,888 17,777 17,777 Change in fair value of contingent consideration 1,765 255 2,808 1,955 Goodwill impairment — 111,485 — 111,485 Total operating expense 90,939 194,115 149,625 280,274 Loss from operations (27,608 ) (120,674 ) (30,871 ) (124,189 ) Other income (expense): Interest expense (7,810 ) (7,064 ) (15,891 ) (12,901 ) Other income (expense), net 5,450 (5,350 ) 6,028 (4,806 ) Total other expense (2,360 ) (12,414 ) (9,863 ) (17,707 ) Loss before provision for income taxes (29,968 ) (133,088 ) (40,734 ) (141,896 ) Provision for income taxes 198 46 362 198 Net loss $ (30,166 ) $ (133,134 ) $ (41,096 ) $ (142,094 ) Net loss per share, basic and diluted $ (0.25 ) $ (1.13 ) $ (0.33 ) $ (1.20 ) Weighted average common shares outstanding, basic and diluted 123,027,759 118,211,168 122,864,345 118,051,090 Other comprehensive income (loss): Foreign currency translation adjustments $ 35 $ 12 $ 3 $ 9 Change in cash flow hedge — 5,735 (2,088 ) 12,324 Amortization of dedesignated cash flow (2,769 ) — (5,142 ) — Total other comprehensive income (loss) (2,734 ) 5,747 (7,227 ) 12,333 Comprehensive loss $ (32,900 ) $ (127,387 ) $ (48,323 ) $ (129,761 ) TRAEGER, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) Six Months Ended June 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (41,096 ) $ (142,094 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation of property, plant and equipment 7,462 6,023 Amortization of intangible assets 21,378 21,337 Amortization of deferred financing costs 1,026 979 Loss on disposal of property, plant and equipment 1,689 1,176 Stock-based compensation expense 40,979 27,434 Bad debt expense 189 (127 ) Unrealized loss (gain) on derivative contracts (2,066 ) 2,864 Amortization of dedesignated cash flow hedge (5,142 ) — Change in fair value of contingent consideration 2,588 (1,325 ) Goodwill impairment — 111,485 Other non-cash adjustments (17 ) — Change in operating assets and liabilities: Accounts receivable (40,979 ) (18,709 ) Inventories, net 55,668 (17,781 ) Prepaid expenses and other current assets (1,074 ) (2,394 ) Other non-current assets (13 ) 23 Accounts payable and accrued expenses (14,154 ) (18,954 ) Other non-current liabilities (582 ) 13 Net cash provided by (used in) operating activities 25,856 (30,050 ) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant, and equipment (8,854 ) (12,422 ) Capitalization of patent costs (223 ) (305 ) Proceeds from sale of property, plant, and equipment 2,450 — Net cash used in investing activities (6,627 ) (12,727 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from line of credit 86,500 110,600 Repayments on line of credit (130,209 ) (73,927 ) Proceeds from long-term debt — 12,500 Repayments of long-term debt (103 ) — Principal payments on capital lease obligations (251 ) (217 ) Payment of acquisition related contingent consideration (12,225 ) (9,275 ) Taxes paid related to net share settlement of equity awards — (41 ) Net cash provided by (used in) financing activities (56,288 ) 39,640 Net decrease in cash, cash equivalents and restricted cash (37,059 ) (3,137 ) Cash, cash equivalents and restricted cash at beginning of period 51,555 16,740 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 14,496 $ 13,603 TRAEGER, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) (Continued) Six Months Ended June 30, 2023 2022 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for interest $ 20,487 $ 11,781 Cash paid for income taxes $ 1,576 $ 1,988 NON-CASH FINANCING AND INVESTING ACTIVITIES Equipment purchased under finance leases $ 383 $ 344 Property, plant, and equipment included in accounts payable and accrued expenses $ 1,813 $ 8,736 TRAEGER, INC. RECONCILIATIONS OF AND OTHER INFORMATION REGARDING NON-GAAP FINANCIAL MEASURES (unaudited) In addition to our results and measures of performance determined in accordance with U.S. GAAP, we believe that certain non-GAAP financial measures are useful in evaluating and comparing our financial and operational performance over multiple periods, identifying trends affecting our business, formulating business plans and making strategic decisions. Each of Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per share, Adjusted EBITDA Margin, and Adjusted Net Income Margin are key performance measures that our management uses to assess our financial performance and is also used for internal planning and forecasting purposes. We believe that these non-GAAP financial measures are useful to investors and other interested parties in analyzing our financial performance because it provides a comparable overview of our operations across historical periods. In addition, we believe that providing each of Adjusted EBITDA and Adjusted Net Income, together with a reconciliation of Net Loss to each such measure, and providing Adjusted Net Income per share, together with a reconciliation of Net Loss per share to such measure, and Adjusted EBITDA Margin and Adjusted Net Income Margin, together with a reconciliation of Net Loss Margin to such measures, helps investors make comparisons between our company and other companies that may have different capital structures, different tax rates, and/or different forms of employee compensation. For example, due to finite-lived intangible assets included on our balance sheet following our corporate reorganization in 2017, we have significant non-cash amortization expense attributable to the nature of our capital structure. Each of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share are used by our management team as an additional measure of our performance for purposes of business decision-making, including managing expenditures, and evaluating potential acquisitions. Period-to-period comparisons of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share help our management identify additional trends in our financial results that may not be shown solely by period-to-period comparisons of Net Loss or Loss from Continuing Operations or Net Loss per share. In addition, we may use Adjusted EBITDA in the incentive compensation programs applicable to some of our employees. Each of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share has inherent limitations because of the excluded items, and may not be directly comparable to similarly titled metrics used by other companies. The following table presents a reconciliation of Net Loss, Net Loss Margin and Net Loss per share, the most directly comparable financial measures calculated in accordance with U.S. GAAP, to Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income Margin and Adjusted Net Income per share, respectively, on a consolidated basis. Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (dollars in thousands, except share and per share amounts) Net loss $ (30,166 ) $ (133,134 ) $ (41,096 ) $ (142,094 ) Adjustments: Other (income) expense (1) (9,298 ) 3,401 (10,658 ) 4,075 Goodwill impairment — 111,485 — 111,485 Stock-based compensation 33,036 11,951 40,979 27,434 Non-routine legal expenses (2) 248 1,051 481 2,969 Amortization of acquisition intangibles (3) 8,253 8,253 16,507 16,507 Change in fair value of contingent consideration 1,765 255 2,808 1,955 Other adjustment items (4) 526 668 669 1,081 Tax impact of adjusting items (5) (46 ) — 106 — Adjusted net income $ 4,318 $ 3,930 $ 9,796 $ 23,412 Net loss $ (30,166 ) $ (133,134 ) $ (41,096 ) $ (142,094 ) Adjustments: Provision for income taxes 198 46 362 198 Interest expense 7,810 7,064 15,891 12,901 Depreciation and amortization 14,587 14,242 28,841 27,419 Other (income) expense (6) (6,529 ) 3,401 (5,516 ) 4,075 Goodwill impairment — 111,485 — 111,485 Stock-based compensation 33,036 11,951 40,979 27,434 Non-routine legal expenses (2) 248 1,051 481 2,969 Change in fair value of contingent consideration 1,765 255 2,808 1,955 Other adjustment items (4) 526 668 669 1,081 Adjusted EBITDA $ 21,475 $ 17,029 $ 43,419 $ 47,423 Revenue $ 171,512 $ 200,270 $ 324,673 $ 423,980 Net loss margin (17.6 )% (66.5 )% (12.7 )% (33.5 )% Adjusted net income margin 2.5 % 2.0 % 3.0 % 5.5 % Adjusted EBITDA margin 12.5 % 8.5 % 13.4 % 11.2 % Net loss per diluted share $ (0.25 ) $ (1.13 ) $ (0.33 ) $ (1.20 ) Adjusted net income per diluted share $ 0.04 $ 0.03 $ 0.08 $ 0.20 Weighted average common shares outstanding - diluted 123,027,759 118,211,168 122,864,345 118,051,090 Represents realized and unrealized gains on the interest rate swap, including amortization of dedesignated cash flow hedge, losses on the disposal of property, plant, and equipment, and unrealized gains (losses) from foreign currency transactions and derivatives. Represents external legal expenses for litigation, patent and trademark defense. Represents the amortization expense associated with intangible assets recorded in connection with the 2017 acquisition of Traeger Pellet Grills Holdings LLC. Represents non-routine operational wind-down costs, non-cash ground lease expense associated with a build-to-suit lease in 2022, as well as write-offs and restoration costs at our wood pellet production facility due to flood damage sustained as a result of a tropical storm. Represents an adjusted tax rate equal to our annual estimated tax rate on Adjusted Net Income. This rate is based on our estimated annual GAAP income (loss) tax rate forecast, adjusted to account for items excluded from GAAP income (loss) in calculating the non-GAAP financial measures presented above. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to our estimated annual tax rates, our estimated tax rate on Adjusted Net Income may differ from our GAAP tax rate and from our actual tax liabilities. Represents realized and unrealized gains on the interest rate swap, losses on the disposal of property, plant, and equipment, and unrealized gains (losses) from foreign currency transactions and derivatives. View source version on businesswire.com: https://www.businesswire.com/news/home/20230802925468/en/
Investors: Nick Bacchus Traeger, Inc. investor@traeger.com Media: The Brand Amp Traeger@thebrandamp.com