Form 8-K Weber Inc. For: Dec 08

Fiscal year 2021 net sales increased 30%, to $1.98 billion, from $1.53 billion in the prior year.

Net sales increased 25% in the Americas, to $1,102 million, from $881 million in the prior year; EMEA increased 34%, to $726 million, from $542 million in the prior year; and APAC increased 49%, to $154 million from $103 million in the prior year.

Revenue growth enabled by continued strategic investments in new product innovation, expanded digital marketing reach, accelerated geographic expansion, and amplified direct-to-consumer (DTC) initiatives, driving 46% DTC growth versus last year.

Gross profit increased 35% to $825 million, or 41.6% of net sales, compared to $610 million or 40.0% of net sales in the prior year.

Net income decreased 94%, to $6 million, or 0.3% of net sales, compared to $89 million, or 5.8% of net sales in the prior year, primarily reflecting the non-cash, stock-based-compensation charge associated with the August 2021 IPO. Adjusted net income increased 28%, to $161 million, or 8.1% of net sales, compared to $126 million, or 8.3% of net sales in the prior year.

Adjusted EBITDA increased 35%, to $307 million, or 15.5% of net sales, compared to $227 million, or 14.9% of net sales in the prior year.

Net cash provided by operating activities was $54 million for the fiscal year ended September 30, 2021, as compared to $305 million in the prior year, with the variance driven primarily by the return to more normalized inventory levels and accounts payable timing from the prior year.

As of September 30, 2021, the Company had cash and cash equivalents of $108 million and $294 million of available borrowings under its revolving credit facility. Total debt at the end of the quarter was $1.02 billion, and average net debt to adjusted EBITDA ratio was 2.9x.

Net sales decreased 5% to $350 million, from $368 million in the prior year quarter; on a two-year stack basis, net sales increased 77%.

Net sales decreased 9% in the Americas, to $211 million, from $231 million in the prior year quarter; EMEA increased 1%, to $108 million, from $107 million in the prior year quarter; and APAC increased 3%, to $31 million, from $30 million in the prior year quarter.

Net loss of $86 million, or (24.6%) of net sales, compared to a net loss of $14 million, or (3.9%) of net sales, in the prior year quarter. Adjusted net loss was $35 million, or (10.1%) of net sales, compared to adjusted net income of $5 million, or 1.2% of net sales, in the prior year quarter.

Adjusted EBITDA loss of $14 million, or (4.0%) of net sales, compared to $28 million, or 7.6% of net sales, in the prior year quarter.

[email protected]

Brian Eichenlaub

[email protected]

Kristina Peterson-Lohman

Assets

Current assets:

Cash and cash equivalents

Accounts receivable, less allowances ⁽¹⁾

Inventories, net

Prepaid expenses and other current assets ⁽²⁾

Total current assets

Property, equipment and leasehold improvements, net

Operating lease right-of-use assets ⁽³⁾

Other long-term assets

Trademarks, net

Other intangible assets, net

Goodwill

Total assets

Liabilities and equity (deficit)

Current liabilities:

Trade accounts payable

Accrued expenses ⁽⁴⁾

Income taxes payable

Current portion of long-term debt and other borrowings

Current portion of long-term financing obligation

Total current liabilities

Long-term debt, less current portion

Long-term financing obligation, less current portion

Non-current operating lease liabilities ⁽⁵⁾

Tax receivable agreement liability, net of current portion

Other long-term liabilities

Total liabilities

Commitments and Contingencies

Members’ deficit

Class A Common Stock, $0.001 par value—3,000,000,000 shares authorized, 52,533,388 shares issued and outstanding as of September 30, 2021

Class B Common Stock, $0.00001 par value—1,500,000,000 shares authorized, 233,572,370 shares issued and outstanding as of September 30, 2021

Preferred Stock, $0.0001 par value—1,500,000,000 shares authorized, zero shares issued and outstanding as of September 30, 2021

Additional paid-in capital

Accumulated other comprehensive loss

Retained (deficit) earnings

Total Weber Inc. (deficit) equity

Noncontrolling interests

Total (deficit) equity

Total liabilities and (deficit) equity

Includes related party royalty receivables of $119 and $220 at September 30, 2021 and 2020, respectively.

Includes related party prepaid royalties of zero and $10,044 at September 30, 2021 and 2020, respectively.

Includes related party operating lease assets of $1,629 and $4,111 at September 30, 2021 and 2020, respectively.

Includes related party operating lease liabilities of $431 and zero at September 30, 2021 and 2020, respectively.

Includes related party operating lease liabilities of $1,198 and $4,139 at September 30, 2021 and 2020, respectively.

Net sales ⁽¹⁾

Cost of goods sold ⁽²⁾

Gross profit

Operating expenses:

Selling, general and administrative ⁽³⁾⁽⁴⁾

Amortization of intangible assets

Gain on disposal of assets held for sale

(Loss) income from operations

Foreign currency (gain) loss

Interest income ⁽⁵⁾

Interest expense

Loss from early extinguishment of debt

(Loss) income before taxes

Income tax (benefit) expense

Loss (gain) from investments in unconsolidated affiliates

Net (loss) income

Net (loss) income 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

Includes related party royalty revenue of $172 and $70 for the three months ended September 30, 2021 and 2020, respectively, and $247 and $386 for the fiscal years ended September 30, 2021 and 2020, respectively.

Includes related party rental expense of $71 and $180 for the three months ended September 30, 2021 and 2020, respectively, and $676 and $718 for the fiscal years ended September 30, 2021 and 2020, respectively.

Includes related party rental expense of $573 and $59 for the three months ended September 30, 2021 and 2020, respectively, and $538 and $235 for the fiscal years ended September 30, 2021 and 2020, respectively.

Includes related party royalty expense of zero and $(283) for the three months ended September 30, 2021 and 2020, respectively, and $268 and $1,291 for the fiscal years ended September 30, 2021 and 2020, respectively.

Includes related party interest income of $3 and $24 for the three months ended September 30, 2021 and 2020, respectively, and $47 and $56 for the fiscal years ended September 30, 2021 and 2020, respectively.

Operating activities

Net income

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for depreciation

Provision for amortization of intangible assets

Provision for amortization of deferred financing costs

Deferred income tax (benefit) expense

Management incentive plan compensation, net of forfeitures

(Gain) loss from investments in unconsolidated affiliates

Gain on disposal of assets held for sale

Stock/unit-based compensation

Loss from early extinguishment of debt

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 provided by operating activities

Investing activities

Proceeds from disposal of property, equipment and leasehold improvements

Additions to property, equipment and leasehold improvements

Payments for acquisitions

Net cash used in investing activities

Financing activities

Proceeds from issuance of long-term debt

Payments for deferred financing costs

Payments for capitalized offering costs

Payments under agreement with iDevices

Interest rate swap settlement payments

Proceeds from contribution of capital, net

Proceeds from Initial Public Offering

Proceeds received from Greenshoe option

Repurchase of Class A shares and LLC units

Repurchase of members’ interests

Members’ distributions

Proceeds from financing obligation

Borrowings from revolving credit facility

Payments on revolving credit facility

Payments of long-term debt

Payment for the acquired Q Grill Trademark

Service on financing obligation

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash and cash equivalents

(Decrease) increase 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 $4,336 and $730, respectively

Supplemental disclosures of non-cash investing and financing information:

Property and equipment included in accounts payable and accrued expenses

Capitalized offering costs included in accounts payable and accrued expenses

Settlement of existing relationship through business combination

Issuance of common units for business acquisition

(Loss) income from operations

Adjustments:

Foreign currency gain (loss)⁽¹⁾

Non-cash stock compensation / LTIP and profits interest
expense⁽²⁾

Business transformation costs⁽³⁾

Operational transformation costs⁽⁴⁾

Debt refinancing and IPO costs⁽⁵⁾

COVID-19 costs⁽⁶⁾

Gain on disposal of assets held for sale

Adjusted (loss) income from operations

Net (loss) income

Adjustments:

Non-cash stock compensation / LTIP and profits interest
expense⁽²⁾

Business transformation costs⁽³⁾

Operational transformation costs⁽⁴⁾

Debt refinancing and IPO costs⁽⁵⁾

COVID-19 costs⁽⁶⁾

Loss from early extinguishment of debt

Gain on disposal of assets held for sale

Tax impact of adjusting items

Adjusted net (loss) income

Net (loss) income

Adjustments:

Interest expense, net

Income tax (benefit) expense

Depreciation and amortization

EBITDA

Non-cash stock compensation / LTIP and profits interest
expense⁽²⁾

Business transformation costs⁽³⁾

Operational transformation costs⁽⁴⁾

Debt refinancing and IPO costs⁽⁵⁾

COVID-19 costs⁽⁶⁾

Loss from early extinguishment of debt

Gain on disposal of assets held for sale

Adjusted EBITDA

Adjusted (loss) income from operations includes foreign currency gain (loss) in order to align adjusted (loss) income from operations with Adjusted EBITDA, with the exception of depreciation and amortization and loss (gain) from investments in unconsolidated affiliates.

Our financial results reflect an increase in compensation expense related to an increase in the value of our LTIP and profits interest units as well as a change in accounting methodology from the intrinsic value method to the fair value method during the fiscal year ended September 30, 2021. These changes resulted in total compensation expense of approximately $32 million and $126 million for the three months and fiscal year ended September 30, 2021, respectively.

“Business transformation costs” are defined as costs incurred to implement the leadership team’s plans to transition the organization to the future operating structure. These costs include major business transformation initiatives that require severance or other costs to transition to a new operating model.

“Operational transformation costs” are defined as restructuring and transformation initiatives related to major supply chain, operational moves and startups that are designed to enable future productivity. These costs also include significant systems integration costs, as well was plant shutdown and closure costs that will drive future efficiencies.

“Debt refinancing and IPO costs” are defined as certain non-capitalizable costs from the refinancing of the Company’s term loan and costs related to the initial public offering.

During the fiscal years ended September 30, 2021 and 2020, the Company incurred a number of significant costs related to the global COVID-19 pandemic. These non-recurring costs included plant shutdown costs, the impact of enhanced employee safety and social distancing protocols as well as overtime and expedited freight costs to fulfill significant unexpected demand increases driven by stay-at-home orders in many of our key markets. These costs have normalized in Fiscal Year 2021.