Traeger(COOK)

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Traeger(COOK) - 2023 Q1 - Earnings Call Transcript
2023-05-13 13:20
Financial Data and Key Metrics Changes - First quarter revenues were $153 million, a decline of 32% year-over-year, but came in towards the higher end of guidance [10][22] - Adjusted EBITDA for the quarter was $22 million, exceeding the high end of guidance by $2 million [10][44] - Net income for the first quarter was $8 million, compared to a net loss of $9 million in the same period last year [43] - Gross profit decreased to $55 million from $83 million year-over-year, with a gross profit margin of 36.2%, down 80 basis points [31][32] Business Line Data and Key Metrics Changes - Grill revenues declined 40% to $90 million, impacted by lower unit volumes due to retailer destocking [22] - Consumables revenues were $30 million, down 24% year-over-year, affected by lower pellet volumes and loss of a customer [22][28] - Accessories revenue decreased 1% to $33 million due to lower unit volumes of Traeger branded accessories [31] Market Data and Key Metrics Changes - North American revenues were down 33%, while revenues from the Rest of World decreased by 13% [31] - Sell-through of grills remained negative compared to the first quarter last year, but was in line with forecasts [12][22] Company Strategy and Development Direction - The company aims to increase household penetration from 3.5% by enhancing brand awareness and improving distribution network productivity [23] - Product innovation is a key focus, with successful launches of the new Ironwood and Flatrock griddle [20][24] - The company is optimizing its pellet manufacturing footprint by consolidating mills to improve efficiency and reduce costs [15][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance despite current challenges, reiterating revenue expectations between $560 million and $590 million [11][47] - The company anticipates a return to growth in the second half of 2023 as inventory levels normalize and sales trends improve [34][30] - Management noted that the macroeconomic environment remains volatile, but they are prepared to adapt [48] Other Important Information - The company achieved annualized cost savings exceeding $20 million due to restructuring efforts [16][43] - Social media engagement increased, with a 19% growth in followers and a 16% increase in user-generated content [17][18] Q&A Session Summary Question: Can you elaborate on the pellet mills consolidation and its impact? - The consolidation of two pellet mills is part of a broader strategy to optimize costs and improve unit economics for pellets [39][50] Question: How is the engagement and demand for pellets being affected? - Engagement is tracking back to pre-pandemic levels, with consistent usage rates among different consumer cohorts [51][62] Question: What are the expectations for gross margin improvement throughout the year? - Gross margin is expected to improve in the second half of the year as higher-cost inventory is cleared and transportation costs decrease [56][65] Question: How are channel inventories performing relative to expectations? - Channel inventories have improved ahead of plan, positioning the company well for the peak selling season [99][100] Question: What is the strategy for brand awareness and retail partnerships? - The company continues to invest in retail partnerships and community engagement to drive brand awareness and sales [71][92]
Traeger(COOK) - 2023 Q1 - Quarterly Report
2023-05-09 16:00
[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=6&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) Q1 2023 net income of **$8.0 million** reversed a **$9.0 million** loss in Q1 2022, despite a **31.5%** revenue drop, primarily due to reclassified swap gains Condensed Consolidated Statements of Operations (Q1 2023 vs Q1 2022) | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | **Revenue** | $153,161 | $223,710 | | **Gross Profit** | $55,423 | $82,644 | | **Loss from Operations** | $(3,263) | $(3,515) | | **Net Income (Loss)** | $8,018 | $(8,960) | | **Net Income (Loss) per Share** | $0.07 | $(0.08) | Condensed Consolidated Balance Sheet Highlights | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | $287,738 | $274,238 | | **Total Assets** | $937,997 | $946,715 | | **Total Current Liabilities** | $141,383 | $112,907 | | **Total Liabilities** | $610,608 | $611,846 | | **Total Stockholders' Equity** | $327,389 | $334,869 | Condensed Consolidated Statements of Cash Flows (Q1 2023 vs Q1 2022) | Cash Flow Activity | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | **Net Cash Used in Operating Activities** | $(23,590) | $(46,911) | | **Net Cash Provided by (Used in) Investing Activities** | $245 | $(4,648) | | **Net Cash Provided by (Used in) Financing Activities** | $(478) | $45,917 | | **Net Decrease in Cash** | $(23,823) | $(5,642) | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, revenue concentration with three major customers, and the **$23.4 million** gain reclassified from an interest rate swap dedesignation - The company is an '**emerging growth company**' under the JOBS Act, allowing it to use an extended transition period for adopting new accounting standards, which may affect comparability with other public companies[1](index=1&type=chunk) - Three major retail customers (A, B, and C) accounted for **17%**, **22%**, and **12%** of net sales, respectively, for the three months ended March 31, 2023, indicating significant customer concentration[132](index=132&type=chunk)[221](index=221&type=chunk) Revenue by Product Category (in thousands) | Product Category | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Grills | $89,738 | $150,431 | | Consumables | $30,045 | $39,651 | | Accessories | $33,378 | $33,628 | | **Total Revenue** | **$153,161** | **$223,710** | - In January 2023, the company changed the interest reset period on its term loan, causing its interest rate swap to no longer qualify for hedge accounting. This resulted in the reclassification of **$23.4 million** from accumulated other comprehensive income (AOCI) to other income[10](index=10&type=chunk)[198](index=198&type=chunk) - In April 2023, the Board approved the cancellation of unearned CEO and IPO Performance Stock Units (PSUs), which is expected to result in the recognition of approximately **$27.5 million** of stock-based compensation expense in the second quarter of 2023[67](index=67&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=25&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) MD&A details a **31.5%** revenue decline due to lower volumes, stable gross margin, reduced operating expenses, and a significant shift to **$11.4 million** in other income from a swap dedesignation [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Q1 2023 revenue declined **31.5%** to **$153.2 million**, driven by lower grill sales, while operating expenses decreased significantly, and other income surged due to a swap gain Key Operating Results (Q1 2023 vs Q1 2022, in thousands) | Metric | Q1 2023 | Q1 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $153,161 | $223,710 | $(70,549) | (31.5)% | | **Gross Profit** | $55,423 | $82,644 | $(27,221) | (32.9)% | | **Sales and Marketing** | $22,075 | $34,854 | $(12,779) | (36.7)% | | **General and Administrative** | $26,679 | $40,716 | $(14,037) | (34.5)% | | **Total Other Income (Expense)** | $11,445 | $(5,293) | $16,738 | 316.2% | - The decrease in revenue was driven by lower unit volume for grills (down **40.3%**) and consumables (down **24.2%**), partially offset by higher average selling prices for grills due to new product introductions[83](index=83&type=chunk)[304](index=304&type=chunk)[271](index=271&type=chunk) - The decrease in G&A expense was primarily driven by lower stock-based compensation expense of **$6.4 million**, lower professional service fees, and lower employee expenses[106](index=106&type=chunk) - The significant increase in total other income was primarily due to the hedge dedesignation of the interest rate swap, which resulted in a reclassification of gains to other income[108](index=108&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained **$15.2 million** cash and **$82.6 million** borrowing capacity as of March 31, 2023, with improved operating cash flow and compliance with amended debt covenants - As of March 31, 2023, the company had cash and cash equivalents of **$15.2 million**, restricted cash of **$12.5 million**, and total available borrowing capacity of approximately **$82.6 million** across its credit facilities[309](index=309&type=chunk) - Net cash used in operating activities was **$23.6 million** for Q1 2023, an improvement from **$46.9 million** used in Q1 2022. The change was primarily due to a smaller increase in accounts receivable ($57.1M in 2023 vs $70.4M in 2022) and a decrease in inventories in 2023 versus an increase in 2022[90](index=90&type=chunk)[311](index=311&type=chunk)[328](index=328&type=chunk) - The company amended its First Lien Credit Agreement to increase the First Lien Net Leverage Ratio covenant from **6.20:1.00** to **8.50:1.00** for a 'Covenant Amendment Period' ending no later than June 30, 2023. The company was in compliance with these amended covenants as of March 31, 2023[21](index=21&type=chunk)[95](index=95&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) No material changes occurred in the company's market risk disclosures compared to its Annual Report on Form 10-K for the year ended December 31, 2022 - There have been no material changes to the company's market risk disclosures as presented in the Annual Report on Form 10-K[337](index=337&type=chunk) [Controls and Procedures](index=36&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2023, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level[320](index=320&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the quarter ended March 31, 2023[321](index=321&type=chunk) [PART II. OTHER INFORMATION](index=36&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=36&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company does not expect current legal proceedings to materially adversely affect its operations or financial position - The company does not expect any currently pending litigation to have a material adverse effect on its operations or financial position[23](index=23&type=chunk)[339](index=339&type=chunk) [Risk Factors](index=36&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes occurred in the company's risk factors compared to its Annual Report on Form 10-K for the year ended December 31, 2022 - There have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K[340](index=340&type=chunk)
Traeger(COOK) - 2022 Q4 - Earnings Call Presentation
2023-03-17 01:02
UPROXX | --- | --- | --- | --- | --- | --- | --- | |-------------------------|-------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------|-------|-------| | | | | | | | | | Live Like Tyrese Gibson | | | | | | | | | | | | | | | | | | | engadget Traeger's redesigned Ironwood grills pack touchscreen controls and more efficiency The new models have many of the same features ...
Traeger(COOK) - 2022 Q4 - Annual Report
2023-03-15 16:00
PART III 68 Item 10. Directors, Executive Officers and Corporate Governance 68 Item 11. Executive Compensation 70 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 70 Item 13. Certain Relationships and Related Transactions, and Director Independence 70 Item 14. Principal Accountant Fees and Services 71 PART IV 72 Item 15. Exhibits and Financial Statement Schedules 72 Item 16. Form 10-K Summary 75 PART II 50 Item 5. Market for Registrant's Common Equity, ...
Traeger(COOK) - 2022 Q3 - Quarterly Report
2022-11-13 16:00
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to | --- | |-------------------------------------------------------------| | | | | | Commission File Number 001-40694 | | Traeger, Inc. | | (Exact name ...
Traeger(COOK) - 2022 Q3 - Earnings Call Transcript
2022-11-12 22:01
Financial Data and Key Metrics Changes - The company experienced a 42% decline in third quarter sales, with grill sales down 64% compared to the previous year [6][31] - Gross profit decreased to $26 million from $54 million last year, with a gross profit margin of 27.7%, down 580 basis points year-over-year [34] - Net loss for the third quarter was $210 million, compared to a net loss of $89 million in the same period last year, resulting in a net loss per diluted share of $1.75 [38] Business Line Data and Key Metrics Changes - Consumables revenue decreased 10% to $25 million, while accessories revenue increased 18% to $30 million, driven by strong growth at MEATER [32][33] - Grill revenue decline was attributed to lower unit volumes as retailers reduced replenishment orders, partially offset by higher average selling prices [31] Market Data and Key Metrics Changes - North American revenue faced challenges due to a decline in the U.S. business and negative growth in Canada, while the rest of the world business grew 10% [33] - The company noted that more than two-thirds of the anticipated decline in grill sales in the second half of the year was due to retailer destocking rather than lower consumer demand [11] Company Strategy and Development Direction - The company is focused on reducing costs, rightsizing inventories, and driving improvements in gross margin as part of its near-term strategic priorities [14][18] - The company aims to enhance brand awareness, with unaided brand awareness hitting an all-time high, improving by 15% year-to-date [20] - Product innovation remains a key growth pillar, with plans to launch two new grills in 2023 and a collaboration with WhistlePig for new consumables [23][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging operating environment due to high inflation and geopolitical uncertainty, impacting consumer sentiment and retailer ordering behavior [6][10] - The company expects full-year sales to be at or slightly below the low end of prior guidance, anticipating continued pressure from retailer destocking into the first half of 2023 [10][44] - Management remains optimistic about long-term growth, emphasizing the resilience of the outdoor cooking category and the commitment of retail partners to the Traeger brand [12][29] Other Important Information - The company recorded a $110 million noncash impairment charge to goodwill due to adverse macroeconomic conditions [38] - Cash and cash equivalents totaled $8 million at the end of the third quarter, with total net debt of $444 million and a net leverage ratio of 8.9% [39] Q&A Session Summary Question: How does the company assess supply versus demand dynamics? - Management indicated that while there is softness in demand, sell-through trends have shown stability, and promotional activities have helped improve sell-through [51][52] Question: What is the current state of channel inventory? - Management confirmed good visibility into channel inventory levels, noting sequential improvements and the need for time to work through excess inventory [58] Question: How significant is the impact of a large retailer's private label pellet business? - Management acknowledged the retailer's importance but expressed confidence in the stability of Traeger pellet sales, excluding the impact of the private label [60][62] Question: What are the plans for capital expenditures and deleveraging? - Management plans to keep capital expenditures minimal and focus on improving liquidity and profitability to aid in deleveraging efforts [66][85]
Traeger(COOK) - 2022 Q2 - Quarterly Report
2022-08-14 16:00
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to | --- | --- | |-------------------------------------------------------|----------------| | | | | | | | Commission File Number 001-40694 | | | Traeger, In ...
Traeger(COOK) - 2022 Q2 - Earnings Call Presentation
2022-08-11 04:37
TRAEGER INVESTOR PRESENT ATION SECOND QUARTER 2022 SAFE HARBOR STATEMENT This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation 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 2022 results, our expected annualized savings from our cost reduction plan, our ...
Traeger(COOK) - 2022 Q1 - Earnings Call Presentation
2022-05-13 15:12
TRAEGER INVESTOR PRESENT ATION · FIRST QUARTER 2022 | --- | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...
Traeger(COOK) - 2022 Q1 - Quarterly Report
2022-05-11 16:00
[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the company's unaudited financial statements and management's discussion for the quarter [Financial Statements (Unaudited)](index=6&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) Presents unaudited condensed consolidated financial statements for Q1 2022, including balance sheets, operations, equity, and cash flows [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a summary of the company's financial position as of March 31, 2022, and December 31, 2021 Balance Sheet Summary (in thousands) | Balance Sheet Items | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$1,268,544** | **$1,181,024** | | Total Current Assets | $351,188 | $269,741 | | Inventories | $164,127 | $145,038 | | Goodwill | $297,047 | $297,047 | | **Total Liabilities** | **$645,387** | **$571,504** | | Total Current Liabilities | $200,311 | $166,225 | | Notes Payable | $417,734 | $379,395 | | **Total Stockholders' Equity** | **$623,157** | **$609,520** | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) This section details the company's financial performance, including revenue, gross profit, and net income (loss) for the three months ended March 31, 2022 and 2021 Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Revenue | $223,710 | $235,573 | | Gross Profit | $83,565 | $100,631 | | Income (Loss) from Operations | $(2,987) | $47,923 | | **Net Income (Loss)** | **$(8,432)** | **$38,929** | | **Net Income (Loss) per Share** | **$(0.07)** | **$0.36** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2022 and 2021 Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(46,911) | $(26,544) | | Net cash used in investing activities | $(4,648) | $(4,975) | | Net cash provided by financing activities | $45,917 | $37,064 | | **Net (decrease) increase in cash** | **$(5,642)** | **$5,545** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain financial statements, covering accounting policies, revenue, business combinations, debt, and equity compensation - Three major retail customers accounted for **17%**, **23%**, and **14%** of net sales for the three months ended March 31, 2022[40](index=40&type=chunk) Revenue by Product Category (in thousands) | Product Category | Q1 2022 Revenue | Q1 2021 Revenue | | :--- | :--- | :--- | | Grills | $150,431 | $178,655 | | Consumables | $39,651 | $40,813 | | Accessories | $33,628 | $16,105 | - The company acquired Apption Labs (MEATER smart thermometer) on July 1, 2021, for a total purchase consideration of approximately **$78.3 million**, which included a contingent consideration obligation[48](index=48&type=chunk)[49](index=49&type=chunk) - As of March 31, 2022, the company had **$379.2 million** outstanding on its First Lien Term Loan Facility, had drawn **$47.0 million** on its Revolving Credit Facility, and **$49.2 million** on its Accounts Receivable Credit Facility[81](index=81&type=chunk)[82](index=82&type=chunk)[87](index=87&type=chunk) - Equity-based compensation expense increased significantly to **$15.5 million** in Q1 2022 from **$1.0 million** in Q1 2021, following the IPO and related RSU/PSU grants[96](index=96&type=chunk)[155](index=155&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=25&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's financial performance, liquidity, and capital resources for Q1 2022 [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Analyzes revenue, gross profit, operating expenses, and net income (loss) for Q1 2022 compared to the prior year Key Performance Metrics Comparison | Metric | Q1 2022 | Q1 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $223.7M | $235.6M | (5.0)% | | Gross Profit | $83.6M | $100.6M | (17.0)% | | Gross Margin | 37.4% | 42.7% | (530 bps) | | Operating Income (Loss) | $(3.0)M | $47.9M | (106.2)% | | Net Income (Loss) | $(8.4)M | $38.9M | (121.7)% | - The decrease in revenue was driven by lower unit volume for grills (**-15.8%**) and consumables (**-2.8%**), partially offset by a **108.8%** increase in accessories revenue, which benefited from the Apption Labs acquisition[148](index=148&type=chunk)[149](index=149&type=chunk)[151](index=151&type=chunk) - General and administrative expenses surged by **216.2%** to **$42.9 million**, primarily due to a **$13.6 million** increase in equity-based compensation expense and higher personnel-related costs[155](index=155&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, available credit facilities, and ability to fund operations - As of March 31, 2022, the company had cash and cash equivalents of **$11.1 million**[161](index=161&type=chunk) - The company has access to a **$125.0 million** Revolving Credit Facility and a Receivables Financing Agreement with a capacity of up to **$100.0 million** to support liquidity[173](index=173&type=chunk)[180](index=180&type=chunk) - Net cash used in operating activities for the quarter was **$46.9 million**, an increase from the **$26.5 million** used in the prior-year period, driven by a net loss and changes in working capital, particularly an increase in accounts receivable[164](index=164&type=chunk)[165](index=165&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) No material changes to market risk disclosures since the Annual Report on Form 10-K - There have been no material changes to the company's market risk disclosures from those in its Annual Report on Form 10-K[186](index=186&type=chunk) [Controls and Procedures](index=33&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls were effective as of March 31, 2022, with no material changes to internal controls - Management concluded that as of March 31, 2022, the company's disclosure controls and procedures were effective at a reasonable assurance level[189](index=189&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[190](index=190&type=chunk) [PART II. OTHER INFORMATION](index=34&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, and other miscellaneous information [Legal Proceedings](index=34&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company faces various legal proceedings but expects no material adverse effects on operations or financial position - The company states that the ultimate resolution of current legal matters is not expected to have a material adverse effect on its business, financial condition, or operating results[192](index=192&type=chunk) [Risk Factors](index=34&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company reports no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K[193](index=193&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECU RITIES%20AND%20USE%20OF%20PROCEEDS) No unregistered equity sales reported; IPO proceeds primarily used for debt prepayment - The company completed its IPO on August 2, 2021, raising net proceeds of **$138.5 million** after deducting underwriter discounts and other expenses[195](index=195&type=chunk) - Approximately **$130.8 million** of the IPO proceeds were used to prepay debt under the First Lien Term Loan Facility, with the remainder used for general corporate and working capital purposes[196](index=196&type=chunk) [Defaults Upon Senior Securities](index=34&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reports no defaults upon senior securities - None[197](index=197&type=chunk) [Mine Safety Disclosures](index=35&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - Not applicable[204](index=204&type=chunk) [Other Information](index=35&type=section&id=ITEM%205.%20OTHER%20INFORMATION) The company reports no other information for this item - None[205](index=205&type=chunk) [Exhibits](index=35&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the report, including CEO and CFO certifications and XBRL data files - Lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL documents[201](index=201&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk)