false
0001753706
0001753706
2024-05-09
2024-05-09
0001753706
us-gaap:CommonStockMember
2024-05-09
2024-05-09
0001753706
us-gaap:WarrantMember
2024-05-09
2024-05-09
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 9, 2024
Whole
Earth Brands, Inc.
(Exact name of registrant as specified in its
charter)
Delaware | |
001-38880 | |
38-4101973 |
(State or other jurisdiction of
incorporation) | |
(Commission File
Number) | |
(IRS Employer Identification
No.) |
125
S. Wacker Drive
Suite 1250
Chicago, IL
60606
(Address of principal executive offices, including
zip code)
Registrant’s telephone number, including
area code: (312) 840-6000
Not Applicable
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of
each class | |
Trading
Symbol(s) | |
Name of
each exchange on which registered |
Common
stock, par value $0.0001 per share | |
FREE | |
The
NASDAQ Stock Market LLC |
Warrants
to purchase one-half of one share of common stock | |
FREEW | |
The
NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2
of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging
growth company x
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02. |
Results of Operations and Financial Condition. |
On May 9, 2024, Whole Earth Brands, Inc.
(the “Company”) issued a press release announcing certain financial and other results
for the fiscal quarter ended March 31, 2024. The full text of the press release is furnished
as Exhibit 99.1 to this Current Report on Form 8-K (this “Current Report”) and is incorporated herein by reference.
The information
furnished under Item 2.02 of this Current Report (including Exhibit 99.1) shall not be deemed “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities
of that Section, nor shall it be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933,
as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such filing.
Additional
Information and Where to Find It
As previously
disclosed in the Current Report on Form 8-K filed on February 13, 2024, the Company entered into an Agreement of Merger (the “Merger
Agreement”) with Ozark Holdings, LLC, a Delaware limited liability company (“Parent”) and Sweet Oak Merger Sub, LLC,
a Delaware limited liability company and a wholly-owned subsidiary of Parent (“Merger Sub”). Upon the terms and subject to
the conditions set forth in the Merger Agreement, upon the closing of the transaction (the “Transaction”), Merger Sub will
merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of Parent.
In connection
with the Transaction, the Company initially filed a preliminary proxy statement (as amended and supplemented, the “Proxy Statement”)
with the U.S. Securities and Exchange Commission (the “SEC”) on March 15, 2024. The Proxy Statement, which relates to the
special meeting of the Company’s stockholders to approve the Transaction, contains important information about the Transaction
and related matters. INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO
AND ANY DOCUMENTS INCORPORATED BY REFERENCE THEREIN) AND OTHER DOCUMENTS THAT MAY BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY
IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION. Investors and stockholders will
be able to obtain free copies of these documents and other documents containing important information about the Company once such documents
are filed with the SEC through the website maintained by the SEC at www.sec.gov. The Company may file other relevant materials with the
SEC in connection with the Transaction. The Company will make available copies of materials they file with, or furnish to, the SEC free
of charge at www.WholeEarthBrands.com.
No Offer
or Solicitation
This press
release shall not constitute an offer to buy or sell any securities, or the solicitation of an offer to buy or sell any securities, nor
shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus
meeting the requirements of Section 10 of the Securities Act.
Participants
in the Solicitation
The Company, its respective directors, executive
officers and certain employees and other persons may be deemed to be participants in the solicitation of proxies from the Company’s
stockholders in connection with the Transaction. Stockholders may obtain information regarding the names, affiliations and interests of
the Company’s directors and executive officers in the Proxy Statement and its Annual Report on Form 10-K for the year ended December
31, 2023, initially filed with the SEC on March 12, 2024, as amended by Amendment No. 1 which was filed with the SEC on April 29, 2024.
Other information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security
holdings or otherwise, may be contained in other relevant materials to be filed with the SEC regarding the Transaction when such materials
become available. Investors should read such materials carefully when they become available before making any voting or investment decisions.
You may obtain free copies of these documents from the Company using the sources indicated above.
Item 9.01. |
Financial Statements and Exhibits. |
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
Whole Earth Brands, Inc. |
|
|
Dated: May 9, 2024 |
By: |
/s/ Bernardo Fiaux |
|
Name: |
Bernardo Fiaux |
|
Title: |
Chief Financial Officer |
Exhibit 99.1
Whole Earth Brands Reports First Quarter 2024
Results
Chicago, Illinois – May 9, 2024 –
Whole Earth Brands, Inc. (the “Company” or “we” or “our”) (Nasdaq: FREE), a global food company enabling
healthier lifestyles through premium plant-based sweeteners, flavor enhancers and other foods, today announced its financial results for
its first quarter ended March 31, 2024.
First Quarter Highlights
| · | Consolidated revenue of $129.5 million, a decrease
of 2.2% on a reported basis and 2.3% on a constant currency basis compared to the prior year period. |
| · | Branded CPG revenue decreased 3.5% on a reported
basis and 3.5% on a constant currency basis as compared to 2023 primarily due to lower volumes. |
| · | Flavors & Ingredients revenue grew 2.1% on
a reported basis and 1.9% on a constant currency basis compared to the prior year period, driven by volume growth and price increases. |
| · | Operating income of $3.1 million and Adjusted
EBITDA of $19.1 million. |
|
|
First Quarter Net Segment Revenue
Growth Overview |
|
|
Reported |
|
Foreign Currency Exchange |
|
Constant Currency |
Branded CPG |
|
(3.5%) |
|
0.1% |
|
(3.5%) |
Flavors & Ingredients |
2.1% |
|
0.2% |
|
1.9% |
Consolidated |
|
(2.2%) |
|
0.1% |
|
(2.3%) |
"We’re pleased with our first quarter
performance, which marked our third consecutive quarter of meaningful gross margin expansion," said Irwin D. Simon, Executive Chairman.
"Our team has remained focused on executing our strategic plan, which is centered around driving efficiencies across our two business
segments as a means to delivering improved free cash flow and reducing our balance sheet leverage. We are progressing toward the completion
of our pending go-private transaction with Ozark Holdings, LLC, which we expect to close later in the second quarter of 2024, subject
to customary closing conditions and stockholder approval."
FIRST QUARTER 2024 RESULTS
| · | Consolidated product revenues were $129.5 million,
a decrease of 2.2% on a reported basis and 2.3% on a constant currency basis, as compared to the prior year first quarter. |
| · | Reported gross profit was $37.3 million, compared
to $32.3 million in the prior year first quarter. The increase was largely driven by lower raw material and freight costs, a decline in
costs associated with the supply chain reinvention project, and favorable product mix. Adjusted gross profit was $42.1 million, compared
to $39.5 million in the prior year first quarter. |
| · | Reported gross profit margin increased to 28.8%
in the first quarter of 2024, compared to 24.4% in the prior year period. Adjusted gross profit margin increased to 32.5%, compared to
29.9% in the prior year first quarter. |
| · | Consolidated operating income was $3.1 million
compared to $3.0 million in the prior year first quarter. The increase was driven by the improvement in gross margin, which was partially
offset by costs associated with the Company’s pending merger. |
| · | Consolidated net loss was $9.4 million in the
first quarter of 2024 compared to a net loss of $19.8 million in the prior year period. |
| · | Consolidated Adjusted EBITDA was $19.1 million
compared to $16.6 million in the prior year quarter, representing an increase of 15.2% driven by lower costs. |
SEGMENT RESULTS
Branded CPG Segment
Branded CPG segment product revenues were $98.5
million for the first quarter of 2024, compared to $102.0 million for the same period in the prior year, a decrease of $3.6 million, or
3.5% on both a reported and constant currency basis. The decrease was driven by lower volumes, which was partially offset by higher pricing.
Operating
income was $5.0 million in the first quarter of 2024 compared to an operating loss of $0.8 million for the same period in the prior year.
The increase in operating income was primarily due to lower raw material and freight costs, a decline in costs associated with the supply
chain reinvention project, and lower sugar import tariffs.
Flavors & Ingredients Segment
Flavors & Ingredients segment product revenues
increased 2.1% to $31.0 million in the first quarter of 2024, compared to $30.4 million for the same period in the prior year. On a constant
currency basis, segment product revenues increased 1.9% driven by higher volumes and pricing.
Operating income was $8.6 million in the first
quarter of 2024 compared to $9.5 million for the same period in the prior year. The decline was primarily due to unfavorable product mix,
partially offset by higher revenue.
Corporate
Corporate expenses for the first quarter of 2024
were $10.4 million, compared to $5.7 million of expenses in the prior year period. The increase was primarily attributed to costs associated
with the Company’s pending merger and higher bonus expense.
Balance
Sheet
As of March 31, 2024, the Company had cash and
cash equivalents of $23.8 million and $422.4 million of long-term debt, net of unamortized debt issuance costs. At March 31, 2024, there
was $69 million drawn on its $125 million revolving credit facility.
Cash used in operating activities was $9.6 million
for the three months ended March 31, 2024, as compared to cash provided by operating activities of $4.1 million in the prior year period.
The decline was primarily due to bonus payments related to 2023 that occurred in the first quarter and timing of inventory purchases.
DEFINITIVE AGREEMENT TO BE ACQUIRED
As previously announced, on February 12, 2024,
the Company entered into a definitive agreement pursuant to which Ozark Holdings, LLC (which, going forward, intends to do business as
Sweet Oak Parent) (“Sweet Oak”), an affiliate of Sababa Holdings FREE, LLC (“Sababa”), will acquire all of the
outstanding shares of the Company’s common stock that it does not already own in an all-cash transaction for $4.875 per share (the
“Transaction”). This represents a 56% premium over the Company’s share price at market close on June 23, 2023 prior
to receiving Sababa’s initial $4.00 per share bid and a 37% premium over the Company’s 60-day volume-weighted average price
(“VWAP”) as of February 12, 2024.
A special committee of the Company’s board
of directors (the “Board”), consisting solely of disinterested members of the Board, in consultation with its independent
financial and legal advisors, unanimously recommended the Transaction and the disinterested members of the Board unanimously approved
the Transaction.
The Transaction is expected to close later in
the second quarter of 2024. Consummation of the Transaction is conditioned on, among other things, the approval at a special meeting of
the Company’s stockholders (i) of the holders of a majority in voting power of the Company’s outstanding stock and (ii) of
the holders of 66 2/3% of the Company’s outstanding stock not owned by Sababa, and is subject to other customary closing conditions.
The Transaction is not subject to any financing conditions.
In connection with the Transaction, the Company
initially filed a preliminary proxy statement (as amended and supplemented, the “Proxy Statement”) with the U.S. Securities
and Exchange Commission (the “SEC”) on March 15, 2024. The Proxy Statement, which relates to the special meeting of the Company's
stockholders to approve the Transaction, contains important information about the Transaction and related matters. The Company’s
stockholders are urged to read the Proxy Statement carefully and in its entirety before making any decision regarding the Transaction.
Investors and shareholders will be able to obtain free copies of these documents (if and when available) and other documents containing
important information about the Company once such documents are filed with the SEC through the website maintained by the SEC at www.sec.gov.
The Company may file other relevant materials with the SEC in connection with the Transaction. The Company will make available copies
of materials they file with, or furnish to, the SEC free of charge at www.WholeEarthBrands.com.
About Whole Earth Brands
Whole Earth Brands is a global food company enabling
healthier lifestyles and providing access to high quality plant-based sweeteners, flavor enhancers and other foods through our diverse
portfolio of trusted brands and delicious products, including Whole Earth®, Pure Via®, Wholesome®, Swerve®, Canderel®
and Equal®. With food playing a central role in people’s health and wellness, Whole Earth Brands’ innovative product
pipeline addresses the growing consumer demand for more dietary options, baking ingredients and taste profiles. Our world-class global
distribution network is the largest provider of plant-based sweeteners in more than 100 countries with a vision to expand our portfolio
to responsibly meet local preferences. We are committed to helping people enjoy life’s everyday moments and the celebrations that
bring us together. For more information on how we “Open a World of Goodness®,” please visit www.WholeEarthBrands.com.
Forward-Looking
Statements
Certain of the matters discussed in this communication
constitute forward-looking statements. The forward-looking statements include, among other things, statements regarding the intent, belief
or expectations of the Company and can be identified by the use of words such as “achieve,” “aim,” “anticipate,”
“believe,” “can,” “continue,” “could,” “drive,” “estimate,” “expect,”
“forecast,” “future,” “guidance,” “grow,” “improve,” “increase,”
“intend,” “maintain,” “may,” “opportunities,” “plan,” “possible,”
“potential,” “predict,” “project,” “should,” “strategy,” “will,”
“will be,” “will continue,” “will likely result,” “would,” or the negative version of
these words and other comparable terms. Examples of forward-looking statements include, but are not limited to, the statements made by
Mr. Simon.
All of our forward-looking statements are subject
to risks and uncertainties that may cause actual results to differ materially from those that we are expecting. There are a number of
factors that could have material adverse effects on our future results, performance or achievements and cause our actual results to differ
materially from the forward-looking statements. These factors include, but are not limited to, the ability of the parties to satisfy the
conditions precedent and consummate the proposed Transaction, the timing of consummation of the proposed Transaction, the ability of the
parties to secure any required stockholder approval in a timely manner or on the terms desired or anticipated, failure of Sweet Oak to
obtain the financing required to consummate the Transaction, the ability to achieve anticipated benefits and savings of the proposed Transaction,
risks related to the potential disruption of management’s attention due to the pending Transaction, operating results and businesses
generally, the outcome of any legal proceedings related to the proposed Transaction and the general risks associated with the respective
businesses of the Company and Sweet Oak, including the general volatility of the capital markets, terms and employment of capital, the
volatility of the Company’s share price, interest rates or general economy, potential adverse effects or changes to the relationships
with the parties’ customers, competitors, suppliers or employees or other parties resulting from the announcement or completion
of the proposed Transaction, unpredictability and severity of catastrophic events, including but not limited to the risks related to the
effects of pandemics and global outbreaks of contagious diseases (such as the COVID-19 pandemic) and domestic or geopolitical crises,
such as terrorism, military conflict (including the outbreak of hostilities between Russia and Ukraine and Israel and Hamas), war or the
perception that hostilities may be imminent, political instability or civil unrest, or other conflict. Discussions of some of these other
important factors and assumptions are contained in the Company’s filings with the SEC and are available at the SEC’s website
at http://www.sec.gov, including Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2023 and, with respect to the Transaction, see the Proxy Statement initially filed by the Company with the SEC on March 15,
2024. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this
communication, unless noted otherwise. Except as required under the federal securities laws and the rules and regulations of the SEC,
the Company does not undertake any obligation to release publicly any revisions to the forward-looking statements to reflect events or
circumstances after the date of this communication or to reflect the occurrence of unanticipated events.
Contacts:
Investor Relations Contact:
Whole Earth Brands
312-840-5001
investor@wholeearthbrands.com
ICR
Jeff Sonnek
646-277-1263
jeff.sonnek@icrinc.com
Whole Earth Brands, Inc.
Reconciliation of GAAP and Non-GAAP Financial
Measures
(Unaudited)
The Company reports its financial results in accordance
with accounting principles generally accepted in the United States (“GAAP”). However, management believes that also presenting
certain non-GAAP financial measures provides additional information to facilitate the comparison of the Company’s historical operating
results and trends in its underlying operating results, and provides additional transparency on how the Company evaluates its business.
Management uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s
performance. The Company also believes that presenting these measures allows investors to view its performance using the same measures
that the Company uses in evaluating its financial and business performance and trends. The Company considers quantitative and qualitative
factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of its ongoing
financial and business performance and trends. The adjustments generally fall within the following categories: constant currency adjustments,
intangible asset non-cash impairments, purchase accounting charges, transaction-related costs, long-term incentive expense, non-cash pension
expenses, severance and related expenses associated with productivity initiatives, public company readiness, M&A transaction expenses,
supply chain reinvention costs and other one-time items affecting comparability of operating results. See below for a description of adjustments
to the Company’s U.S. GAAP financial measures included herein. Non-GAAP information should be considered as supplemental in nature
and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with U.S.
GAAP. In addition, the Company’s non-GAAP financial measures may not be the same as or comparable to similar non-GAAP measures presented
by other companies.
DEFINITIONS OF THE COMPANY’S NON-GAAP
FINANCIAL MEASURES
The Company’s non-GAAP financial measures
and corresponding metrics reflect how the Company evaluates its operating results currently and provide improved comparability of operating
results. As new events or circumstances arise, these definitions could change. When these definitions change, the Company provides the
updated definitions and presents the related non-GAAP historical results on a comparable basis. When items no longer impact the Company’s
current or future presentation of non-GAAP operating results, the Company removes these items from its non-GAAP definitions.
The following is a list
of non-GAAP financial measures which the Company has discussed or expects to discuss in the future:
· | Constant Currency Presentation: We evaluate
our product revenue results on both a reported and a constant currency basis. The constant currency presentation, which is a non-GAAP
measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides
valuable supplemental information regarding our product revenue results, thereby facilitating period-to-period comparisons of our business
performance and is consistent with how management evaluates the Company’s performance. We calculate constant currency percentages
by converting our current period local currency product revenue results using the prior period exchange rates and comparing these adjusted
amounts to our prior period reported product revenues. |
· | Adjusted EBITDA: We define Adjusted EBITDA
as net income or loss from our consolidated statements of operations before interest income and expense, income taxes, depreciation and
amortization, as well as certain other items that arise outside of the ordinary course of our continuing operations specifically described
below: |
| o | Goodwill impairment charges: We exclude the impact of charges related to the impairment of goodwill.
We believe that the exclusion of these impairments, which are non-cash, allows for more meaningful comparisons of operating results to
peer companies. We believe that this increases period-to-period comparability and is useful to evaluate the performance of the company. |
| o | Long-term incentive plan: We exclude the impact of costs relating to the long-term incentive plan.
We believe that the adjustments of these items allow for more meaningful comparison of our operating results. |
| o | Severance and related expenses: We exclude employee severance and associated expenses related to
roles that have been eliminated or reduced in scope as a productivity measure taken by the Company. We believe that the adjustments of
these items allow for more meaningful comparison of our operating results. |
| o | M&A transaction/strategic review: We exclude expenses directly related to the acquisition of
businesses, the Company’s strategic review and pending merger. We believe that the adjustments of these items allow for more meaningful
comparison of our operating results. |
| o | Supply chain reinvention: To measure operating performance, we exclude certain one-time and other
costs associated with reorganizing our North America Branded CPG operations and facilities in connection with our supply chain reinvention
program, which will drive long-term productivity and cost savings. These costs include incremental expenses such as hiring, training,
startup, exit and other temporary costs. We believe that the adjustments of these items allow for more meaningful comparison of our operating
results. |
| o | Other items: To measure operating performance, we exclude certain expenses and include certain
gains that we believe are not operational in nature. We believe the exclusion or inclusion of such amounts allows management and the users
of the financial statements to better understand our financial results. |
Adjusted EBITDA is not
a presentation made in accordance with GAAP, and our use of the term Adjusted EBITDA may vary from the use of similarly titled measures
by others in our industry due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation.
Adjusted EBITDA margin is Adjusted EBITDA for a particular period expressed as a percentage of product revenues for that period.
We use Adjusted EBITDA
to measure our performance from period to period both at the consolidated level as well as within our operating segments, to evaluate
and fund incentive compensation programs and to compare our results to those of our competitors. In addition to Adjusted EBITDA being
a significant measure of performance for management purposes, we also believe that this presentation provides useful information to investors
regarding financial and business trends related to our results of operations and that when non-GAAP financial information is viewed with
GAAP financial information, investors are provided with a more meaningful understanding of our ongoing operating performance.
Adjusted EBITDA should
not be considered as an alternative to net income or loss, operating income, cash flows from operating activities or any other performance
measures derived in accordance with GAAP as measures of operating performance or cash flows as measures of liquidity. Adjusted EBITDA
has important limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results
as reported under GAAP.
The Company cannot reconcile its expected Adjusted
EBITDA to Net Income under “Outlook” without unreasonable effort because certain items that impact net income and other reconciling
metrics are out of the Company’s control and/or cannot be reasonably predicted. These items include, but are not limited to, stock-based
compensation expense and acquisition-related charges. These items are uncertain, depend on various factors, and could have a material
impact on GAAP reported results for the guidance period.
Adjusted Gross Profit Margin: We define
Adjusted Gross Profit Margin as Gross Profit excluding all cash and non-cash adjustments impacting Cost of Goods Sold, included in the
Adjusted EBITDA reconciliation, as a percentage of Product Revenues, net. Such adjustments include: depreciation, purchase accounting
adjustments, long-term incentives and other items adjusted by management to better understand our financial results.
Whole Earth Brands, Inc.
Condensed Consolidated Balance Sheets
(In thousands of dollars, except for share and per share data)
(Unaudited)
| |
March 31, 2024 | | |
December 31, 2023 | |
Assets | |
| | | |
| | |
Current Assets | |
| | | |
| | |
Cash and cash equivalents | |
$ | 23,750 | | |
$ | 30,513 | |
Accounts receivable (net of allowances of $1,281 and $1,460, respectively) | |
| 70,067 | | |
| 74,012 | |
Inventories | |
| 218,040 | | |
| 209,271 | |
Prepaid expenses and other current assets | |
| 7,502 | | |
| 6,429 | |
Total current assets | |
| 319,359 | | |
| 320,225 | |
| |
| | | |
| | |
Property, Plant and Equipment, net | |
| 53,887 | | |
| 54,937 | |
| |
| | | |
| | |
Other Assets | |
| | | |
| | |
Operating lease right-of-use assets | |
| 25,218 | | |
| 19,223 | |
Goodwill | |
| 186,479 | | |
| 193,610 | |
Other intangible assets, net | |
| 222,821 | | |
| 229,936 | |
Deferred tax assets, net | |
| 509 | | |
| 500 | |
Other assets | |
| 7,362 | | |
| 7,266 | |
Total Assets | |
$ | 815,635 | | |
$ | 825,697 | |
| |
| | | |
| | |
Liabilities and Stockholders’ Equity | |
| | | |
| | |
Current Liabilities | |
| | | |
| | |
Accounts payable | |
$ | 58,592 | | |
$ | 55,662 | |
Accrued expenses and other current liabilities | |
| 25,949 | | |
| 32,173 | |
Current portion of operating lease liabilities | |
| 7,273 | | |
| 7,370 | |
Current portion of long-term debt | |
| 3,750 | | |
| 3,750 | |
Total current liabilities | |
| 95,564 | | |
| 98,955 | |
Non-Current Liabilities | |
| | | |
| | |
Long-term debt | |
| 422,379 | | |
| 417,929 | |
Deferred tax liabilities, net | |
| 32,021 | | |
| 31,579 | |
Operating lease liabilities, less current portion | |
| 20,133 | | |
| 14,336 | |
Other liabilities | |
| 11,551 | | |
| 11,208 | |
Total Liabilities | |
| 581,648 | | |
| 574,007 | |
Commitments and Contingencies | |
| — | | |
| — | |
Stockholders’ Equity | |
| | | |
| | |
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding at March 31, 2024 and December 31, 2023 | |
| — | | |
| — | |
Common stock, $0.0001 par value; 220,000,000 shares authorized; 43,058,541 and 42,853,468 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively | |
| 4 | | |
| 4 | |
Additional paid-in capital | |
| 367,026 | | |
| 365,721 | |
Accumulated deficit | |
| (132,680 | ) | |
| (123,284 | ) |
Accumulated other comprehensive (loss) income | |
| (363 | ) | |
| 9,249 | |
Total stockholders’ equity | |
| 233,987 | | |
| 251,690 | |
Total Liabilities and Stockholders’ Equity | |
$ | 815,635 | | |
$ | 825,697 | |
Whole Earth Brands, Inc.
Condensed Consolidated Statements of Operations
(In thousands of dollars, except for share and per share data)
(Unaudited)
| |
Three Months Ended | |
| |
March 31, 2024 | | |
March 31, 2023 | |
Product revenues, net | |
$ | 129,500 | | |
$ | 132,417 | |
Cost of goods sold | |
| 92,193 | | |
| 100,076 | |
Gross profit | |
| 37,307 | | |
| 32,341 | |
| |
| | | |
| | |
Selling, general and administrative expenses | |
| 29,494 | | |
| 24,689 | |
Amortization of intangible assets | |
| 4,688 | | |
| 4,651 | |
| |
| | | |
| | |
Operating income | |
| 3,125 | | |
| 3,001 | |
| |
| | | |
| | |
Interest expense, net | |
| (10,859 | ) | |
| (10,704 | ) |
Other income (expense), net | |
| 230 | | |
| (629 | ) |
Loss before income taxes | |
| (7,504 | ) | |
| (8,332 | ) |
Provision for income taxes | |
| 1,892 | | |
| 11,465 | |
Net loss | |
$ | (9,396 | ) | |
$ | (19,797 | ) |
| |
| | | |
| | |
Net loss per share: | |
| | | |
| | |
Basic | |
$ | (0.22 | ) | |
$ | (0.47 | ) |
Diluted | |
$ | (0.22 | ) | |
$ | (0.47 | ) |
Whole Earth Brands, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands of dollars)
(Unaudited)
| |
Three Months Ended | |
| |
March 31, 2024 | | |
March 31, 2023 | |
Operating activities | |
| | | |
| | |
Net loss | |
$ | (9,396 | ) | |
$ | (19,797 | ) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |
| | | |
| | |
Stock-based compensation | |
| 2,024 | | |
| 1,792 | |
Depreciation | |
| 1,642 | | |
| 1,690 | |
Amortization of intangible assets | |
| 4,688 | | |
| 4,651 | |
Deferred income taxes | |
| 492 | | |
| (124 | ) |
Amortization of debt issuance costs and original issue discount | |
| 587 | | |
| 522 | |
Change in fair value of warrant liabilities | |
| (2 | ) | |
| (154 | ) |
Changes in current assets and liabilities: | |
| | | |
| | |
Accounts receivable | |
| 2,430 | | |
| 706 | |
Inventories | |
| (9,626 | ) | |
| 1,579 | |
Prepaid expenses and other current assets | |
| (1,416 | ) | |
| (740 | ) |
Accounts payable, accrued liabilities and income taxes | |
| (1,184 | ) | |
| 14,084 | |
Other, net | |
| 197 | | |
| (142 | ) |
Net cash (used in) provided by operating activities | |
| (9,564 | ) | |
| 4,067 | |
| |
| | | |
| | |
Investing activities | |
| | | |
| | |
Capital expenditures | |
| (1,085 | ) | |
| (1,556 | ) |
Proceeds from the sale of equity method investment | |
| 200 | | |
| — | |
Net cash used in investing activities | |
| (885 | ) | |
| (1,556 | ) |
| |
| | | |
| | |
Financing activities | |
| | | |
| | |
Proceeds from revolving credit facility | |
| 11,000 | | |
| — | |
Repayments of revolving credit facility | |
| (6,000 | ) | |
| (4,000 | ) |
Repayments of long-term borrowings | |
| (938 | ) | |
| (938 | ) |
Tax withholdings related to net share settlements of stock awards | |
| (463 | ) | |
| (405 | ) |
Net cash provided by (used in) financing activities | |
| 3,599 | | |
| (5,343 | ) |
| |
| | | |
| | |
Effect of exchange rate changes on cash and cash equivalents | |
| 87 | | |
| 788 | |
Net change in cash and cash equivalents | |
| (6,763 | ) | |
| (2,044 | ) |
Cash and cash equivalents, beginning of period | |
| 30,513 | | |
| 28,676 | |
Cash and cash equivalents, end of period | |
$ | 23,750 | | |
$ | 26,632 | |
| |
| | | |
| | |
Supplemental disclosure of cash flow information | |
| | | |
| | |
Interest paid | |
$ | 10,364 | | |
$ | 10,284 | |
Taxes paid, net of refunds | |
$ | 1,212 | | |
$ | 3,228 | |
Whole Earth Brands, Inc.
Adjusted EBITDA Reconciliation
(In thousands of dollars)
(Unaudited)
| |
Three Months Ended
March 31, 2024 | | |
Three Months Ended
March 31, 2023 | |
Product revenues, net | |
$ | 129,500 | | |
$ | 132,417 | |
Net loss | |
$ | (9,396 | ) | |
$ | (19,797 | ) |
Provision for income taxes | |
| 1,892 | | |
| 11,465 | |
Other (income) expense, net | |
| (230 | ) | |
| 629 | |
Interest expense, net | |
| 10,859 | | |
| 10,704 | |
Operating income | |
| 3,125 | | |
| 3,001 | |
Depreciation | |
| 1,642 | | |
| 1,690 | |
Amortization of intangible assets | |
| 4,688 | | |
| 4,651 | |
Long term incentive plan | |
| 2,024 | | |
| 1,279 | |
Severance and related expenses | |
| (19 | ) | |
| (30 | ) |
M&A transaction/strategic review | |
| 3,589 | | |
| - | |
Supply chain reinvention | |
| 1,844 | | |
| 4,886 | |
Other items | |
| 2,204 | | |
| 1,099 | |
Adjusted EBITDA | |
$ | 19,097 | | |
$ | 16,577 | |
Whole Earth Brands, Inc.
Constant Currency Product Revenues, Net Reconciliation
(In thousands of dollars)
(Unaudited)
| |
Three Months Ended March 31, | |
| |
| | |
| | |
$ change | | |
% change | |
Product revenues,
net | |
2024 | | |
2023 | | |
Reported | | |
Constant
Dollar | | |
Foreign
Exchange (1) | | |
Reported | | |
Constant
Dollar | | |
Foreign
Exchange | |
Branded CPG | |
$ | 98,453 | | |
$ | 102,010 | | |
$ | (3,557 | ) | |
$ | (3,610 | ) | |
$ | 53 | | |
| -3.5 | % | |
| -3.5 | % | |
| 0.1 | % |
Flavors & Ingredients | |
| 31,047 | | |
| 30,407 | | |
| 640 | | |
| 566 | | |
| 74 | | |
| 2.1 | % | |
| 1.9 | % | |
| 0.2 | % |
Consolidated | |
$ | 129,500 | | |
$ | 132,417 | | |
$ | (2,917 | ) | |
$ | (3,044 | ) | |
$ | 127 | | |
| -2.2 | % | |
| -2.3 | % | |
| 0.1 | % |
| (1) | The
"foreign exchange" amounts presented, reflect the estimated impact from fluctuations
in foreign currency exchange rates on product revenues. |
Whole
Earth Brands, Inc.
GAAP
to Adjusted EBITDA Reconciliation
(In
thousands of dollars)
(Unaudited)
|
Three
Months Ended March 31, 2024 |
|
Three
Months Ended March 31, 2023 |
|
|
|
|
GAAP |
Non-cash
adj. |
Cash
adj. |
Adjusted
EBITDA |
|
GAAP |
Non-cash
adj. |
Cash
adj. |
Adjusted
EBITDA |
|
$
Change |
%
Change |
Product
revenues, net |
$ |
129,500 |
$ |
- |
$ |
- |
$ |
129,500 |
|
$ |
132,417 |
$ |
- |
$ |
- |
$ |
132,417 |
|
$ |
(2,917) |
(2.2%) |
Cost
of goods sold |
92,193 |
(3,112) |
(1,669) |
87,413 |
|
100,076 |
(2,307) |
(4,898) |
92,871 |
|
(5,459) |
(5.9%) |
Gross
profit |
37,307 |
3,112 |
1,669 |
42,087 |
|
32,341 |
2,307 |
4,898 |
39,546 |
|
2,542 |
6.4% |
Gross
profit margin % |
28.8% |
|
|
32.5% |
|
24.4% |
|
|
29.9% |
|
|
2.6% |
Selling,
general and administrative expenses |
29,494 |
(2,622) |
(3,882) |
22,990 |
|
24,689 |
(1,761) |
41 |
22,968 |
|
22 |
0.1% |
Amortization
of intangible assets |
4,688 |
(4,688) |
- |
- |
|
4,651 |
(4,651) |
- |
- |
|
- |
- |
Operating
income |
$ |
3,125 |
$ |
10,422 |
$ |
5,550 |
$ |
19,097 |
|
$ |
3,001 |
$ |
8,720 |
$ |
4,857 |
$ |
16,577 |
|
$ |
2,520 |
15.2% |
Operating
margin % |
2.4% |
|
|
14.7% |
|
2.3% |
|
|
12.5% |
|
|
2.2% |
Whole Earth Brands, Inc.
Adjustments to Operating Income by Income Statement Line and Nature
(In thousands of dollars)
(Unaudited)
|
Three
Months Ended March 31, 2024 |
|
Three
Months Ended March 31, 2023 |
Non-Cash
adjustments |
Cost
of Goods Sold |
SG&A |
Amort.
Of Intangibles |
Operating
Income |
|
Cost
of Goods Sold |
SG&A |
Amort.
Of Intangibles |
Operating
Income |
Depreciation |
$ |
1,462 |
$ |
181 |
$ |
- |
$ |
1,642 |
|
$ |
1,484 |
$ |
206 |
$ |
- |
$ |
1,690 |
Amortization
of intangible assets |
- |
- |
4,688 |
4,688 |
|
- |
- |
4,651 |
4,651 |
Long
term incentive plan |
142 |
1,881 |
- |
2,024 |
|
237 |
1,042 |
- |
1,279 |
Supply
chain reinvention |
166 |
- |
- |
166 |
|
- |
- |
- |
- |
Other
items |
1,342 |
560 |
- |
1,902 |
|
586 |
513 |
- |
1,099 |
Total
non-cash adjustments |
$ |
3,112 |
$ |
2,622 |
$ |
4,688 |
$ |
10,422 |
|
$ |
2,307 |
$ |
1,761 |
$ |
4,651 |
$ |
8,720 |
Cash
adjustments |
|
|
|
|
|
|
|
|
|
Severance
and related expenses |
- |
(19) |
- |
(19) |
|
- |
(30) |
- |
(30) |
M&A
transaction/strategic review |
- |
3,589 |
- |
3,589 |
|
- |
- |
- |
- |
Supply
chain reinvention |
1,669 |
10 |
- |
1,678 |
|
4,898 |
(11) |
- |
4,886 |
Other
items |
- |
301 |
- |
301 |
|
- |
- |
- |
- |
Total
cash adjustments |
$ |
1,669 |
$ |
3,882 |
$ |
- |
$ |
5,550 |
|
$ |
4,898 |
$ |
(41) |
$ |
- |
$ |
4,857 |
Total
adjustments |
$ |
4,780 |
$ |
6,504 |
$ |
4,688 |
$ |
15,972 |
|
$ |
7,205 |
$ |
1,721 |
$ |
4,651 |
$ |
13,576 |
v3.24.1.u1
Cover
|
May 09, 2024 |
Document Information [Line Items] |
|
Document Type |
8-K
|
Amendment Flag |
false
|
Document Period End Date |
May 09, 2024
|
Entity File Number |
001-38880
|
Entity Registrant Name |
Whole
Earth Brands, Inc.
|
Entity Central Index Key |
0001753706
|
Entity Tax Identification Number |
38-4101973
|
Entity Incorporation, State or Country Code |
DE
|
Entity Address, Address Line One |
125
S. Wacker Drive
|
Entity Address, Address Line Two |
Suite 1250
|
Entity Address, City or Town |
Chicago
|
Entity Address, State or Province |
IL
|
Entity Address, Postal Zip Code |
60606
|
City Area Code |
312
|
Local Phone Number |
840-6000
|
Written Communications |
false
|
Soliciting Material |
false
|
Pre-commencement Tender Offer |
false
|
Pre-commencement Issuer Tender Offer |
false
|
Entity Emerging Growth Company |
true
|
Elected Not To Use the Extended Transition Period |
false
|
Common Stock [Member] |
|
Document Information [Line Items] |
|
Title of 12(b) Security |
Common
stock, par value $0.0001 per share
|
Trading Symbol |
FREE
|
Security Exchange Name |
NASDAQ
|
Warrant [Member] |
|
Document Information [Line Items] |
|
Title of 12(b) Security |
Warrants
to purchase one-half of one share of common stock
|
Trading Symbol |
FREEW
|
Security Exchange Name |
NASDAQ
|
X |
- DefinitionBoolean flag that is true when the XBRL content amends previously-filed or accepted submission.
+ References
+ Details
Name: |
dei_AmendmentFlag |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionFor the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.
+ References
+ Details
Name: |
dei_DocumentPeriodEndDate |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:dateItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
+ References
+ Details
Name: |
dei_DocumentType |
Namespace Prefix: |
dei_ |
Data Type: |
dei:submissionTypeItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionAddress Line 1 such as Attn, Building Name, Street Name
+ References
+ Details
Name: |
dei_EntityAddressAddressLine1 |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionAddress Line 2 such as Street or Suite number
+ References
+ Details
Name: |
dei_EntityAddressAddressLine2 |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- Definition
+ References
+ Details
Name: |
dei_EntityAddressCityOrTown |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionCode for the postal or zip code
+ References
+ Details
Name: |
dei_EntityAddressPostalZipCode |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionName of the state or province.
+ References
+ Details
Name: |
dei_EntityAddressStateOrProvince |
Namespace Prefix: |
dei_ |
Data Type: |
dei:stateOrProvinceItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityCentralIndexKey |
Namespace Prefix: |
dei_ |
Data Type: |
dei:centralIndexKeyItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionIndicate if registrant meets the emerging growth company criteria.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityEmergingGrowthCompany |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
+ References
+ Details
Name: |
dei_EntityFileNumber |
Namespace Prefix: |
dei_ |
Data Type: |
dei:fileNumberItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
+ References
+ Details
Name: |
dei_EntityIncorporationStateCountryCode |
Namespace Prefix: |
dei_ |
Data Type: |
dei:edgarStateCountryItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityRegistrantName |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityTaxIdentificationNumber |
Namespace Prefix: |
dei_ |
Data Type: |
dei:employerIdItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionLocal phone number for entity.
+ References
+ Details
Name: |
dei_LocalPhoneNumber |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 13e -Subsection 4c
+ Details
Name: |
dei_PreCommencementIssuerTenderOffer |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 14d -Subsection 2b
+ Details
Name: |
dei_PreCommencementTenderOffer |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTitle of a 12(b) registered security.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b
+ Details
Name: |
dei_Security12bTitle |
Namespace Prefix: |
dei_ |
Data Type: |
dei:securityTitleItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionName of the Exchange on which a security is registered.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection d1-1
+ Details
Name: |
dei_SecurityExchangeName |
Namespace Prefix: |
dei_ |
Data Type: |
dei:edgarExchangeCodeItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Section 14a -Number 240 -Subsection 12
+ Details
Name: |
dei_SolicitingMaterial |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
+ References
+ Details
Name: |
dei_TradingSymbol |
Namespace Prefix: |
dei_ |
Data Type: |
dei:tradingSymbolItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Securities Act -Number 230 -Section 425
+ Details
Name: |
dei_WrittenCommunications |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- Details
Name: |
us-gaap_StatementClassOfStockAxis=us-gaap_CommonStockMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
us-gaap_StatementClassOfStockAxis=us-gaap_WarrantMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
Whole Earth Brands (NASDAQ:FREEW)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Whole Earth Brands (NASDAQ:FREEW)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024