Core Viewpoint - Solo Brands, Inc. is actively engaging with investors by participating in the 16th Annual Midwest IDEAS Investor Conference, showcasing its commitment to investor relations and transparency [1][2]. Company Overview - Solo Brands, headquartered in Grapevine, TX, operates as a leading omnichannel lifestyle brand company, offering innovative products through five lifestyle brands: Solo Stove, TerraFlame, Chubbies, ISLE, and Oru Kayak [3]. - The company specializes in outdoor and apparel industries, with products including firepits, stoves, casual apparel, paddle boards, and origami folding kayaks [3]. Investor Engagement - The company will host one-on-one investor meetings and has scheduled a presentation on August 27, 2025, from 10:45 to 11:20 AM CT [2]. - Key executives, including the CEO, CFO, and Senior Director of Treasury & IR, will represent Solo Brands at the conference [2]. - The presentation will be available via live webcast, with a replay accessible shortly after the event [2].

Core Points - ESPN and FOX One have announced a bundled streaming service for $39.99 per month starting October 2, 2025 [1][4] - The collaboration aims to enhance consumer access to premium sports content, including major leagues and events [2][3] - The ESPN DTC offering will provide access to all ESPN networks and 47,000 live events annually, along with on-demand content [2][5] ESPN DTC Offering - ESPN's direct-to-consumer service will launch on August 21, 2025, offering a full suite of networks and services [4][5] - The service includes an enhanced ESPN App with features like game stats, betting information, and personalized content [5] FOX One Service - FOX One will aggregate all FOX's news, sports, and entertainment content into a single streaming platform [3][6] - The service targets cord-cutters and will provide live and on-demand access to various FOX brands [6][8] Consumer Experience - The bundle aims to streamline the user experience for sports fans, providing access to a wide range of sports content [2][3] - FOX One will utilize technology from Tubi Media Group to enhance personalization and user engagement [6]

Financial Data and Key Metrics Changes - The consolidated net sales for the second quarter were $92.3 million, down 29.9% year-over-year but up 19.4% sequentially from Q1 [15][19] - Adjusted EBITDA for the quarter was $10.5 million, with a margin of 11.4% of net sales, compared to $15.4 million or 11.7% of net sales in the prior year [19] - The second quarter GAAP net loss was $20.8 million, while adjusted non-GAAP net income was essentially breakeven at $1 million [19] Business Segment Data and Key Metrics Changes - The Chubby segment reported sales of $44.5 million, up 13.1% due to retail expansion and increased direct-to-consumer (DTC) sales [16] - The Solo Stove segment sales were $32.4 million, down significantly due to a decline in DTC channel sales as a result of prioritizing Minimum Advertised Price (MAP) strategies [16][19] Market Data and Key Metrics Changes - Retail channel sales remained stable compared to the same period in 2024, driven by increased demand for Chubby's products, offset by reduced replenishment for the Solo Stove segment [17] - The company ended the quarter with inventories at $84.1 million, down $24.5 million from year-end [20] Company Strategy and Development Direction - The company is focused on driving bottom-line profitability, optimizing marketing spend, and investing in new product innovation [9][10][11] - A strategic transformation plan is in place to create a structurally smaller, profit-driven business model, with no current planned acquisitions [21][24] - The company aims to enhance customer connections through relevant product experiences rather than relying heavily on discounts [9] Management's Comments on Operating Environment and Future Outlook - The consumer landscape remains challenging, with discretionary spending under pressure and consumers showing heightened sensitivity to price and value [13] - Management is optimistic about the long-term shareholder value driven by the execution of their transformational profit-focused business model [14][19] - The company anticipates a more stable revenue cadence post-2025 as new product launches accelerate [16] Other Important Information - The company completed debt refinancing, removing the going concern disclaimer and reinstating active trading on the New York Stock Exchange [6][20] - The company has a CRM database of approximately 2.5 to 3 million customers, which is a significant asset for marketing [35] Q&A Session Summary Question: Evolution of the Solo Stove customer and brand loyalty - Management noted that a significant portion of purchases are from new customers, but core customers are also engaging with new product categories [30][34] Question: Changes in pricing and inventory management - Management confirmed that they are selectively targeting key retailers and have aligned promotional strategies to help retailers sell through excess inventory [36][38]

[FORWARD-LOOKING STATEMENTS](index=4&type=section&id=FORWARD%2DLOCKING%20STATEMENTS) Identifies forward-looking statements and associated risks, including going concern, strategic benefits, liquidity, and NYSE compliance - This section identifies forward-looking statements in the 10-Q, emphasizing that actual results may differ due to known and unknown risks, including the company's ability to continue as a going concern, realize strategic benefits, manage liquidity, and comply with NYSE listing standards[9](index=9&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk) [WHERE YOU CAN FIND MORE INFORMATION](index=4&type=section&id=WHERE%20YOU%20CAN%20FIND%20MORE%20INFORMATION) Details official channels for company information, including investor relations website, SEC filings, and social media - The company uses its investor relations website (https://investors.solobrands.com) as a distribution channel for material information, including press releases, investor presentations, and event notices[13](index=13&type=chunk)[14](index=14&type=chunk) - SEC filings (10-K, 10-Q, 8-K) are available free of charge on the SEC's website (www.sec.gov) and the company's website[14](index=14&type=chunk) - Social media channels (X, Facebook, Instagram, TikTok, LinkedIn) are also used for communication, and some information posted there may be material[13](index=13&type=chunk) [PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents unaudited consolidated financial statements, management's discussion, market risk, and controls for Q2 2025 [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) Contains unaudited consolidated financial statements and notes, detailing the company's financial health and performance [Consolidated Balance Sheets (Unaudited)](index=6&type=section&id=Consolidated%20Balance%20Sheets%20%28Unaudited%29) Consolidated Balance Sheet Highlights (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :-------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Total Assets | $459,700 | $495,060 | $(35,360) | (7.14)% | | Current Assets | $148,612 | $172,218 | $(23,606) | (13.71)% | | Non-Current Assets | $311,088 | $322,842 | $(11,754) | (3.64)% | | Total Liabilities | $303,840 | $301,703 | $2,137 | 0.71% | | Current Liabilities | $41,095 | $121,713 | $(80,618) | (66.23)% | | Non-Current Liabilities | $262,745 | $179,990 | $82,755 | 45.98% | | Total Equity | $155,860 | $193,357 | $(37,497) | (19.39)% | [Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)](index=7&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29%20%28Unaudited%29) Consolidated Statements of Operations Highlights (in thousands, except per share data) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Net sales | $92,257 | $131,550 | $(39,293) | (29.9)% | | Gross profit | $56,599 | $82,637 | $(26,038) | (31.5)% | | Income (loss) from operations | $(9,835) | $2,240 | $(12,075) | (539.1)% | | Net income (loss) | $(20,767) | $(4,037) | $(16,730) | (414.4)% | | Net income (loss) attributable to Solo Brands, Inc. | $(13,468) | $(3,111) | $(10,357) | (332.9)% | | Basic and diluted EPS | $(8.93) | $(2.14) | $(6.79) | (317.3)% | | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Net sales | $169,509 | $216,874 | $(47,365) | (21.8)% | | Gross profit | $99,204 | $133,181 | $(33,977) | (25.5)% | | Income (loss) from operations | $(20,478) | $(4,112) | $(16,366) | (398.0)% | | Net income (loss) | $(39,344) | $(10,521) | $(28,823) | (273.9)% | | Net income (loss) attributable to Solo Brands, Inc. | $(25,660) | $(6,513) | $(19,147) | (293.9)% | | Basic and diluted EPS | $(17.06) | $(4.48) | $(12.58) | (280.8)% | [Consolidated Statements of Cash Flows (Unaudited)](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20%28Unaudited%29) Consolidated Statements of Cash Flows Highlights (in thousands) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Net cash (used in) provided by operating activities | $(64,256) | $(2,848) | $(61,408) | 2156.2% | | Net cash (used in) provided by investing activities | $(6,414) | $(5,225) | $(1,189) | (22.8)% | | Net cash (used in) provided by financing activities | $76,627 | $8,241 | $68,386 | 829.8% | | Net change in cash and cash equivalents | $6,138 | $258 | $5,880 | 2279.1% | | Cash and cash equivalents, end of period | $18,118 | $20,100 | $(1,982) | (9.9)% | [Consolidated Statements of Equity (Unaudited)](index=9&type=section&id=Consolidated%20Statements%20of%20Equity%20%28Unaudited%29) Consolidated Statements of Equity Highlights (in thousands) | Item | December 31, 2024 | June 30, 2025 | Change ($) | Change (%) | | :-------------------------------------- | :---------------- | :------------ | :--------- | :--------- | | Total Shareholders' Equity | $193,357 | $155,860 | $(37,497) | (19.39)% | | Retained Earnings (Accumulated Deficit) | $(228,814) | $(254,303) | $(25,489) | 11.14% | | Additional Paid-in Capital | $363,691 | $368,686 | $4,995 | 1.37% | | Equity attributable to non-controlling interests | $59,645 | $42,676 | $(16,969) | (28.45)% | - Net income (loss) attributable to Solo Brands, Inc. for the six months ended June 30, 2025, was **$(25,660) thousand**[24](index=24&type=chunk) - Issuance of **122 thousand** Class A common stock shares in lieu of cash lender consent fee, valued at **$750 thousand**[24](index=24&type=chunk) [Notes to the Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements%20%28Unaudited%29) Provides detailed explanations for financial statements, covering accounting policies, restructuring, revenue, inventory, debt, equity, taxes, and segments [NOTE 1 – Significant Accounting Policies](index=11&type=section&id=NOTE%201%20%E2%80%93%20Significant%20Accounting%20Policies) - Unaudited consolidated financial statements are prepared in accordance with U.S. GAAP and SEC rules, including normal recurring adjustments[29](index=29&type=chunk) - A **1-for-40 reverse stock split** of common stock became effective on July 8, 2025, with retroactive effect on financial statements[30](index=30&type=chunk) - **Substantial doubt** about the company's ability to continue as a going concern, previously identified, has been **alleviated** as of August 6, 2025, due to the 2025 Refinancing Amendment and ongoing cost-saving and operational improvements[31](index=31&type=chunk)[34](index=34&type=chunk) - The 2025 Refinancing Amendment extended maturities, lowered short-term cash requirements (interest payments in-kind), and deferred compliance with certain financial covenants, providing financial flexibility[33](index=33&type=chunk) [NOTE 2 - Restructuring, Contract Termination and Impairment Charges](index=13&type=section&id=NOTE%202%20-%20Restructuring%2C%20Contract%20Termination%20and%20Impairment%20Charges) Restructuring, Contract Termination and Impairment Charges (in thousands) | Charge Type | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------------------------- | :------------------------------- | :----------------------------- | | Restructuring charges | $9,023 | $14,231 | | Impairment charges | $— | $471 | | Contract termination | $1,228 | $1,388 | | **Total Charges** | **$10,251** | **$16,090** | - Key cost-saving initiatives included retention payments to key personnel (**$5.7 million**), reduction in force (**$0.9 million**), expenses for strategic consulting firms (**$6.5 million**), termination of an underperforming licensing agreement (**$2.5 million**), and closure of two distribution centers (**$1.2 million**)[50](index=50&type=chunk) - The company anticipates continued strategic consulting activities and further cost-saving initiatives, with potential upfront costs[49](index=49&type=chunk) [NOTE 3 – Revenue](index=17&type=section&id=NOTE%203%20%E2%80%93%20Revenue) Net Sales by Channel (in thousands) | Channel | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :---------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Direct-to-consumer | $59,666 | $98,770 | $(39,104) | (39.6)% | | Retail | $32,591 | $32,780 | $(189) | (0.6)% | | **Total Net Sales** | **$92,257** | **$131,550** | **$(39,293)** | **(29.9)%** | | Channel | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :---------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Direct-to-consumer | $93,466 | $149,813 | $(56,347) | (37.6)% | | Retail | $76,043 | $67,061 | $8,982 | 13.4% | | **Total Net Sales** | **$169,509** | **$216,874** | **$(47,365)** | **(21.8)%** | [NOTE 4 – Inventory](index=17&type=section&id=NOTE%204%20%E2%80%93%20Inventory) Inventory Composition (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :-------------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Finished products on hand, net | $77,862 | $80,098 | $(2,236) | (2.79)% | | Finished products in transit | $4,283 | $21,756 | $(17,473) | (80.32)% | | Raw materials | $1,985 | $6,721 | $(4,736) | (70.47)% | | **Total Inventory** | **$84,130** | **$108,575** | **$(24,445)** | **(22.52)%** | - Inventory obsolescence reserve decreased from **$15.2 million** at December 31, 2024, to **$2.1 million** at June 30, 2025[54](index=54&type=chunk) [NOTE 5 – Prepaid Expenses and Other Current Assets](index=17&type=section&id=NOTE%205%20%E2%80%93%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) Prepaid Expenses and Other Current Assets (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :-------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Inventory deposits | $2,739 | $2,066 | $673 | 32.58% | | Retainers | $2,460 | $— | $2,460 | N/A | | Prepaid marketing | $1,564 | $535 | $1,029 | 192.34% | | Insurance | $1,271 | $2,556 | $(1,285) | (50.27)% | | **Total Prepaid expenses and other current assets** | **$14,188** | **$12,223** | **$1,965** | **16.08%** | - The increase in retainers reflects advance payments required by certain vendors in 2025[55](index=55&type=chunk) [NOTE 6 – Property and Equipment, Net](index=18&type=section&id=NOTE%206%20%E2%80%93%20Property%20and%20Equipment%2C%20Net) Property and Equipment, Net (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :-------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Property and equipment, gross | $36,069 | $39,738 | $(3,669) | (9.23)% | | Accumulated depreciation | $(18,988) | $(15,543) | $(3,445) | 22.16% | | **Property and equipment, net** | **$17,081** | **$24,195** | **$(7,114)** | **(29.40)%** | - Buildings decreased from **$4.24 million** to **$1.14 million**, and land decreased from **$1.09 million** to **$0.09 million**, primarily due to the disposition of TerraFlame manufacturing operations[56](index=56&type=chunk) - Depreciation expense for the six months ended June 30, 2025, was **$3.4 million**, **up from $2.4 million** in the prior year[56](index=56&type=chunk) [NOTE 7 – Intangible Assets, Net](index=18&type=section&id=NOTE%207%20%E2%80%93%20Intangible%20Assets%2C%20Net) Intangible Assets, Net (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :-------------------------------- | :------------ | :---------------- | :--------- | :--------- |\ | Intangible assets, gross | $278,685 | $277,667 | $1,018 | 0.37% | | Accumulated amortization and impairments | $(97,300) | $(87,966) | $(9,334) | 10.61% | | **Intangible assets, net** | **$181,385** | **$189,701** | **$(8,316)** | **(4.38)%** | - In Q1 2025, a sustained decline in Class A common stock share price and potential tariff impacts were identified as triggering events for long-lived asset impairment[59](index=59&type=chunk) - A recoverability test indicated that the carrying amounts for the long-lived asset groups were expected to be recoverable[60](index=60&type=chunk) [NOTE 8 – Goodwill](index=20&type=section&id=NOTE%208%20%E2%80%93%20Goodwill) - Goodwill balance for the Chubbies reporting unit was **$73.119 million** as of June 30, 2025, and December 31, 2024[61](index=61&type=chunk) - In Q1 2025, indications of impairment (sustained decline in share price, potential tariff impact) led to a qualitative goodwill analysis (Step 0) for the Chubbies reporting unit[63](index=63&type=chunk) - The analysis concluded that the fair value of the Chubbies reporting unit was more likely than not to exceed its carrying value as of March 31, 2025[63](index=63&type=chunk) [NOTE 9 – Other Non-Current Assets](index=20&type=section&id=NOTE%209%20%E2%80%93%20Other%20Non%2DCurrent%20Assets) Other Non-Current Assets (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :-------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Capitalized Software | $8,477 | $5,388 | $3,089 | 57.33% | | Debt Issuance Costs | $6,312 | $— | $6,312 | N/A | | Other | $1,794 | $2,756 | $(962) | (34.91)% | | **Total Other non-current assets** | **$16,583** | **$8,144** | **$8,439** | **103.63%** | - Debt issuance costs **increased by $6.3 million** due to the 2025 Refinancing Amendment[64](index=64&type=chunk) - Capitalized software **increased by $3.1 million** due to ongoing ERP and web platform development for the Solo Stove segment[64](index=64&type=chunk) [NOTE 10 – Accrued Expenses and Other Current Liabilities](index=20&type=section&id=NOTE%2010%20%E2%80%93%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued Expenses and Other Current Liabilities (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :-------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Leases | $8,005 | $9,370 | $(1,365) | (14.57)% | | Inventory | $4,963 | $14,812 | $(9,849) | (66.49)% | | Allowance for sales returns | $3,516 | $4,264 | $(748) | (17.54)% | | Non-income taxes | $2,128 | $3,602 | $(1,474) | (40.92)% | | Income taxes | $3,819 | $56 | $3,763 | 6719.64% | | Allowance for sales rebates | $1,777 | $3,434 | $(1,657) | (48.25)% | | Payroll | $1,324 | $1,834 | $(510) | (27.81)% | | Warranty | $1,232 | $844 | $388 | 45.97% | | Other | $2,339 | $3,445 | $(1,106) | (32.10)% | | **Total Accrued expenses and other current liabilities** | **$29,103** | **$41,661** | **$(12,578)** | **(30.19)%** | - Inventory line item **decreased by $9.8 million** due to timing and invoices received after December 31, 2024[65](index=65&type=chunk) - Income taxes line item **increased by $3.8 million**[65](index=65&type=chunk) [NOTE 11 – Debt, Net](index=21&type=section&id=NOTE%2011%20%E2%80%93%20Debt%2C%20Net) Debt, Net (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :-------------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Term loans | $240,580 | $74,375 | $166,205 | 223.48% | | Revolving credit facilities | $10,000 | $69,000 | $(59,000) | (85.51)% | | Unamortized debt issuance costs - Term loans | $(12,821) | $(1,315) | $(11,506) | 875.00% | | Long-term debt, net | $237,759 | $142,060 | $95,699 | 67.37% | | Current portion of long-term debt | $600 | $8,625 | $(8,025) | (93.04)% | | **Total debt, net of debt issuance costs** | **$238,359** | **$150,685** | **$87,674** | **58.18%** | - The 2025 Refinancing Amendment established a **$240 million** 2025 Term Loan and a **$90 million** 2025 Revolving Credit Facility, maturing on June 30, 2028[70](index=70&type=chunk)[72](index=72&type=chunk) - Interest on the 2025 Term Loan and Revolving Credit Facility is **payable in kind (PIK) quarterly** through March 31, 2026, and potentially longer under certain conditions[73](index=73&type=chunk) - The company was in compliance with all covenants under the Amended Credit Agreement as of June 30, 2025[81](index=81&type=chunk) - Interest expense for the six months ended June 30, 2025, **increased by 73.3%** to **$11.56 million**, due to a **higher average debt balance and higher interest rates** under the new agreement[80](index=80&type=chunk)[149](index=149&type=chunk) [NOTE 12 – Other Non-Current Liabilities](index=23&type=section&id=NOTE%2012%20%E2%80%93%20Other%20Non%2DCurrent%20Liabilities) Other Non-Current Liabilities (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :-------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Contingent consideration | $— | $7,232 | $(7,232) | (100.00)% | | Long-term non-income taxes | $1,210 | $1,130 | $80 | 7.08% | | Finance lease liability | $172 | $694 | $(522) | (75.22)% | | **Total Other non-current liabilities** | **$1,382** | **$9,056** | **$(7,674)** | **(84.74)%** | - Contingent consideration of **$7.2 million** was **alleviated** due to the disposition of TerraFlame manufacturing operations[82](index=82&type=chunk) [NOTE 13 – Equity-Based Compensation](index=23&type=section&id=NOTE%2013%20%E2%80%93%20Equity%2DBased%20Compensation) - Equity-based compensation expense was **$0.9 million** for Q2 2025, **down from $1.7 million** in Q2 2024[83](index=83&type=chunk) - For the six months ended June 30, 2025, the expense was **nominal**, with Q1 2025 showing a net benefit due to forfeitures from the departure of the former CEO and other key management[83](index=83&type=chunk) - Awards granted during the six months ended June 30, 2025, included **92 thousand** RSUs, while **37 thousand** EPSUs and **9 thousand** SPSUs were forfeited[85](index=85&type=chunk) [NOTE 14 – Income Taxes](index=24&type=section&id=NOTE%2014%20%E2%80%93%20Income%20Taxes) Income Tax Expense (Benefit) (in thousands) | Period | Income Tax Expense (Benefit) | | :------------------------------- | :--------------------------- | | Three Months Ended June 30, 2025 | $1,676 | | Three Months Ended June 30, 2024 | $2,694 | | Six Months Ended June 30, 2025 | $4,620 | | Six Months Ended June 30, 2024 | $(501) | - The effective income tax rate was **(8.7)%** for Q2 2025 and **(13.3)%** for H1 2025, primarily due to **valuation allowances on Solo Brands, Inc. deferred tax assets**[87](index=87&type=chunk) - A full valuation allowance remains in place against Oru's deferred tax assets[92](index=92&type=chunk) [NOTE 15 – Fair Value Measurements](index=25&type=section&id=NOTE%2015%20%E2%80%93%20Fair%20Value%20Measurements) - Contingent consideration of **$7.23 million** as of December 31, 2024, was a Level 3 fair value measurement related to the TerraFlame acquisition[94](index=94&type=chunk)[95](index=95&type=chunk) - This contingent consideration was **fully relieved** as of June 30, 2025, due to the disposition of TerraFlame manufacturing operations[96](index=96&type=chunk) - A **gain of $0.7 million** (Q2 2025) and **$0.8 million** (H1 2025) was recognized from the remeasurement of contingent consideration prior to disposition[96](index=96&type=chunk) [NOTE 16 – Net Income (Loss) Per Share](index=25&type=section&id=NOTE%2016%20%E2%80%93%20Net%20Income%20%28Loss%29%20Per%20Share) Net Income (Loss) Per Class A Common Stock (in thousands, except per share data) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | | Net income (loss) attributable to Solo Brands, Inc. | $(13,468) | $(3,111) | | Weighted average shares outstanding | 1,509 | 1,457 | | **Basic and diluted EPS** | **$(8.93)** | **$(2.14)** | | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to Solo Brands, Inc. | $(25,660) | $(6,513) | | Weighted average shares outstanding | 1,504 | 1,455 | | **Basic and diluted EPS** | **$(17.06)** | **$(4.48)** | - The weighted average number of shares has been retrospectively adjusted due to the **1-for-40 reverse stock split** effective July 8, 2025[99](index=99&type=chunk) [NOTE 17 - Variable Interest Entities](index=26&type=section&id=NOTE%2017%20-%20Variable%20Interest%20Entities) - Consolidates one VIE (Oru manufacturing) where it is the primary beneficiary, with **$2.5 million** in assets and **$3.1 million** in liabilities as of June 30, 2025[102](index=102&type=chunk) - Disposed of **100%** equity interests in TerraFlame manufacturing operations in June 2025 to Former Sellers, retaining exclusive IP and distribution rights for TerraFlame products[104](index=104&type=chunk)[105](index=105&type=chunk) - The disposition involved a **$2.5 million** cash payment to Former Sellers and relieved **$6.4 million** in contingent consideration[104](index=104&type=chunk)[106](index=106&type=chunk) - A **loss of $1.4 million** was recognized upon deconsolidation of TerraFlame manufacturing operations[106](index=106&type=chunk) - The company is not the primary beneficiary of the unconsolidated TerraFlame VIE, with maximum exposure to loss limited to an **$0.8 million** annual minimum purchase commitment[107](index=107&type=chunk)[108](index=108&type=chunk) [NOTE 18 - Segments](index=27&type=section&id=NOTE%2018%20-%20Segments) - Reportable segments are Solo Stove (Solo Stove and TerraFlame brands) and Chubbies (premium casual apparel and activewear)[110](index=110&type=chunk) Percentage of Net Sales by Segment | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Solo Stove | 41.5% | 53.7% | 38.0% | 56.3% | | Chubbies | 48.2% | 29.9% | 51.4% | 31.8% | - International net sales decreased from **$9.9 million** (Q2 2024) to **$6.7 million** (Q2 2025) and from **$15.7 million** (H1 2024) to **$12.3 million** (H1 2025), primarily attributable to the Solo Stove segment[113](index=113&type=chunk) - A single customer contributed over **10%** of consolidated net sales (**$18.0 million**) for Q2 2025, involving both Solo Stove and Chubbies segments[112](index=112&type=chunk) [NOTE 19 - Related Parties](index=29&type=section&id=NOTE%2019%20-%20Related%20Parties) - A related party, wholly owned by an employee and their family, purchases merchandise from Solo Brands for resale in a specific geographical market[116](index=116&type=chunk) - Amounts receivable from this related party were **nominal** as of June 30, 2025, compared to **$1.1 million** as of December 31, 2024[117](index=117&type=chunk) - **No significant sales, expenses, or liabilities** were associated with related parties for the three and six months ended June 30, 2025 or 2024[116](index=116&type=chunk)[117](index=117&type=chunk) [NOTE 20 – Subsequent Events](index=29&type=section&id=NOTE%2020%20%E2%80%93%20Subsequent%20Events) - A **1-for-40 reverse stock split** for Class A and Class B common stock became effective on July 8, 2025, to **regain NYSE listing compliance**[118](index=118&type=chunk)[119](index=119&type=chunk) - All disclosures related to common stock and per-share amounts in the Quarterly Report have been retrospectively adjusted for the reverse stock split[120](index=120&type=chunk) - "The One Big Beautiful Bill Act of 2025" was enacted on July 4, 2025, introducing changes to the U.S. corporate income tax system, effective in 2026, which the company is evaluating for future impact[121](index=121&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2025 financial condition, operations, sales decline, cost-saving initiatives, debt refinancing, and macroeconomic impacts [Overview](index=30&type=section&id=Overview) - Solo Brands operates premium brands like Solo Stove (firepits, stoves, accessories, including TerraFlame) and Chubbies (casual apparel, activewear), aiming to enhance outdoor experiences and community[123](index=123&type=chunk) - Net sales decreased from **$131.6 million** (Q2 2024) to **$92.3 million** (Q2 2025) and from **$216.9 million** (H1 2024) to **$169.5 million** (H1 2025)[124](index=124&type=chunk) - The **decline in net sales** was primarily driven by the Solo Stove segment, partially offset by **increased DTC sales** in the Chubbies segment[124](index=124&type=chunk) [Economic Factors Affecting our Performance](index=31&type=section&id=Economic%20Factors%20Affecting%20our%20Performance) - Tariffs on foreign-origin goods, especially from China, continue to **pressure input costs**[126](index=126&type=chunk) - In Q2 2025, the company **diversified its supply base** to Vietnam and Cambodia, reducing sourcing from China for Solo Stove and almost eliminating it for Chubbies[126](index=126&type=chunk) - New or increased tariffs are expected to **significantly adversely affect** results of operations and margins, and the company may **not be able to pass increased costs** to customers[128](index=128&type=chunk) - The "One Big Beautiful Bill Act of 2025," enacted July 4, 2025, includes corporate income tax changes effective in 2026, which the company is evaluating[129](index=129&type=chunk) - Current macroeconomic factors (economic/political uncertainty, market instability, high interest rates, high inflation) **remain dynamic and highly uncertain**, posing **risks to net sales, gross margin, net income, and cash flows**[130](index=130&type=chunk) [Key Factors Affecting Our Financial Condition and Results of Operations](index=32&type=section&id=Key%20Factors%20Affecting%20Our%20Financial%20Condition%20and%20Results%20of%20Operations) - Strategic consulting firms were engaged in H1 2025 to **improve financial results**, focusing on operational plans, **cost-saving initiatives**, and **enhanced internal reporting**[132](index=132&type=chunk) - Key **cost-saving initiatives** included retention payments to key personnel, reduction in force (RIF), closure of two distribution centers, termination of an underperforming licensing agreement, renegotiation of an advertising services vendor fee, revision of pricing structure, and reduction in marketing spend for Solo Stove[137](index=137&type=chunk) - These initiatives required **cash outlays** in the current period, totaling **$13.32 million** for RIF, distribution center closures, strategic consulting, and retention payments, **funded by cash from operations and credit facilities**[133](index=133&type=chunk)[134](index=134&type=chunk) - While these activities are intended for future benefit, short-term realized benefits have been **limited**, with **significant savings anticipated** in future periods[133](index=133&type=chunk) [Consolidated Results for the Three and Six Months Ended June 30, 2025 Compared to the Three and Six Months Ended June 30, 2024](index=32&type=section&id=Consolidated%20Results%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202024) Compares consolidated financial performance for Q2 and H1 2025 vs. 2024, detailing sales, profit, expenses, and tax changes [Consolidated Net Sales](index=33&type=section&id=Consolidated%20Net%20Sales) Consolidated Net Sales by Channel (in thousands) | Channel | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :---------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Net sales | $92,257 | $131,550 | $(39,293) | (29.9)% | | Direct-to-consumer | $59,666 | $98,770 | $(39,104) | (39.6)% | | Retail | $32,591 | $32,780 | $(189) | (0.6)% | | Channel | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :---------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Net sales | $169,509 | $216,874 | $(47,365) | (21.8)% | | Direct-to-consumer | $93,466 | $149,813 | $(56,347) | (37.6)% | | Retail | $76,043 | $67,061 | $8,982 | 13.4% | - The decline was primarily driven by decreased DTC sales in the Solo Stove segment due to **prioritization of price integrity over promotional activity** and **reduced marketing spend**[140](index=140&type=chunk) - Retail channel net sales were **relatively flat** in Q2 2025 YoY but showed **slight growth** in H1 2025, mainly from **increased retail demand** in the Chubbies segment[140](index=140&type=chunk) [Consolidated Gross Profit and Gross Margin](index=33&type=section&id=Consolidated%20Gross%20Profit%20and%20Gross%20Margin) Consolidated Gross Profit and Gross Margin (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :---------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Gross profit | $56,599 | $82,637 | $(26,038) | (31.5)% | | Gross margin | 61.3% | 62.8% | (150 bps) | (1.5)% | | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :---------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Gross profit | $99,204 | $133,181 | $(33,977) | (25.5)% | | Gross margin | 58.5% | 61.4% | (290 bps) | (2.9)% | - The decline in gross margin was primarily due to a **channel mix shift towards more retail sales**, which typically generate **lower gross margins**[142](index=142&type=chunk) [Consolidated Operating Expenses](index=34&type=section&id=Consolidated%20Operating%20Expenses) Consolidated Operating Expenses (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Operating expenses | $66,434 | $80,397 | $(13,963) | (17.4)% | | Selling, general & administrative expenses | $47,686 | $70,808 | $(23,122) | (32.7)% | | Restructuring, Contract Termination and Impairment Charges | $10,251 | $— | $10,251 | 100.0% | | Depreciation and amortization expenses | $6,394 | $6,406 | $(12) | (0.2)% | | Other operating expenses | $2,103 | $3,183 | $(1,080) | (33.9)% | | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Operating expenses | $119,682 | $137,293 | $(17,611) | (12.8)% | | Selling, general & administrative expenses | $86,676 | $119,218 | $(32,542) | (27.3)% | | Restructuring, Contract Termination and Impairment Charges | $16,090 | $— | $16,090 | 100.0% | | Depreciation and amortization expenses | $13,283 | $12,681 | $602 | 4.7% | | Other operating expenses | $3,633 | $5,394 | $(1,761) | (32.6)% | - Decrease in SG&A was due to **significant reductions in advertising, marketing, and distribution costs**[144](index=144&type=chunk) - Decrease in other operating expenses was due to **reduced management transition costs**, partially offset by a **loss from TerraFlame manufacturing operations disposition**[145](index=145&type=chunk) - Restructuring, contract termination, and impairment charges **increased significantly** due to cost-saving initiatives (retention payments, RIF, distribution center exits, licensing agreement termination, strategic consulting)[146](index=146&type=chunk) [Consolidated Interest Expense](index=35&type=section&id=Consolidated%20Interest%20Expense) Consolidated Interest Expense, Net (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :---------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Interest expense, net | $5,989 | $3,563 | $2,426 | 68.1% | | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :---------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Interest expense, net | $11,559 | $6,669 | $4,890 | 73.3% | - The increase is attributed to a **higher average debt balance and higher interest rates** under the 2025 Refinancing Agreement[149](index=149&type=chunk) [Consolidated Income Taxes](index=35&type=section&id=Consolidated%20Income%20Taxes) Consolidated Income Tax Expense (Benefit) (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Income tax expense (benefit) | $1,676 | $2,694 | $(1,018) | (37.8)% | | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Income tax expense (benefit) | $4,620 | $(501) | $5,121 | (1022.2)% | - Changes in income tax expense/benefit were primarily driven by **valuation allowances on deferred tax assets** generated by losses in the Solo Stove segment[151](index=151&type=chunk) [Solo Stove Segment Results for the Three and Six Months Ended June 30, 2025 Compared to the Three and Six Months Ended June 30, 2024](index=35&type=section&id=Solo%20Stove%20Segment%20Results%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202024) Solo Stove segment saw significant sales and profitability decline in Q2 and H1 2025 due to strategic shifts and reduced marketing [Solo Stove Net Sales](index=35&type=section&id=Solo%20Stove%20Net%20Sales) Solo Stove Net Sales by Channel (in thousands) | Channel | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :---------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Net sales | $38,298 | $70,660 | $(32,362) | (45.8)% | | Direct-to-consumer | $28,641 | $56,131 | $(27,490) | (49.0)% | | Retail | $9,657 | $14,529 | $(4,872) | (33.5)% | | Channel | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :---------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Net sales | $64,426 | $122,137 | $(57,711) | (47.3)% | | Direct-to-consumer | $47,153 | $93,550 | $(46,397) | (49.6)% | | Retail | $17,273 | $28,587 | $(11,314) | (39.6)% | - Declines were due to **prioritization of price integrity over promotional activity** and **reduced marketing spend**, impacting website traffic and marketplace sales[152](index=152&type=chunk) - Retail channel sales were also impacted by a **decline in replenishment orders**, as strategic retail partners **held sufficient inventory**[154](index=154&type=chunk) [Solo Stove Cost of Goods Sold](index=37&type=section&id=Solo%20Stove%20Cost%20of%20Goods%20Sold) Solo Stove Cost of Goods Sold (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :---------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Cost of goods sold | $13,730 | $25,386 | $(11,656) | (45.9)% | | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :---------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Cost of goods sold | $25,200 | $46,134 | $(20,934) | (45.4)% | - The **lessened decline** in cost of goods sold relative to net sales was driven by a **channel mix shift**, with retail sales (**higher COGS**) comprising a larger percentage of net sales[155](index=155&type=chunk) [Solo Stove Segment Operating Expenses](index=37&type=section&id=Solo%20Stove%20Segment%20Operating%20Expenses) Solo Stove Segment Operating Expenses (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Segment operating expenses | $21,174 | $30,497 | $(9,323) | (30.6)% | | Marketing expenses | $9,088 | $14,057 | $(4,969) | (35.3)% | | Employee related compensation | $2,814 | $2,350 | $464 | 19.7% | | Other segment operating expenses | $9,272 | $14,090 | $(4,818) | (34.2)% | | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Segment operating expenses | $37,318 | $53,581 | $(16,263) | (30.4)% | | Marketing expenses | $14,800 | $23,922 | $(9,122) | (38.1)% | | Employee related compensation | $6,123 | $4,531 | $1,592 | 35.1% | | Other segment operating expenses | $16,395 | $25,128 | $(8,733) | (34.8)% | - **Decreases in marketing expenses and other segment operating expenses** (seller fees, shipping) **stemmed from the decline in DTC channel net sales**[157](index=157&type=chunk) [Chubbies Segment Results for the Three and Six Months Ended June 30, 2025 Compared to the Three and Six Months Ended June 30, 2024](index=37&type=section&id=Chubbies%20Segment%20Results%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202024) Chubbies segment showed strong sales growth in Q2 and H1 2025, driven by retail partnerships and DTC demand [Chubbies Net Sales](index=37&type=section&id=Chubbies%20Net%20Sales) Chubbies Net Sales by Channel (in thousands) | Channel | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :---------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Net sales | $44,455 | $39,296 | $5,159 | 13.1% | | Direct-to-consumer | $23,451 | $22,939 | $512 | 2.2% | | Retail | $21,004 | $16,357 | $4,647 | 28.4% | | Channel | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :---------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Net sales | $87,144 | $68,953 | $18,191 | 26.4% | | Direct-to-consumer | $36,934 | $33,569 | $3,365 | 10.0% | | Retail | $50,210 | $35,384 | $14,826 | 41.9% | - **Growth** was driven by **increased retail net sales** from strategic partnerships and **strong performance** in the DTC channel (website and owned retail stores)[159](index=159&type=chunk) [Chubbies Cost of Goods Sold](index=39&type=section&id=Chubbies%20Cost%20of%20Goods%20Sold) Chubbies Cost of Goods Sold (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :---------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Cost of goods sold | $17,826 | $14,794 | $3,032 | 20.5% | | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :---------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Cost of goods sold | $35,999 | $27,202 | $8,797 | 32.3% | - The **greater increase** in cost of goods sold compared to net sales was due to the **growth in retail channel sales**, which typically have **higher COGS**[160](index=160&type=chunk) [Chubbies Segment Operating Expenses](index=39&type=section&id=Chubbies%20Segment%20Operating%20Expenses) Chubbies Segment Operating Expenses (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Segment operating expenses | $15,152 | $16,761 | $(1,609) | (9.6)% | | Marketing expenses | $4,211 | $6,139 | $(1,928) | (31.4)% | | Employee related compensation | $3,410 | $3,456 | $(46) | (1.3)% | | Other segment operating expenses | $7,531 | $7,166 | $365 | 5.1% | | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Segment operating expenses | $28,373 | $29,078 | $(705) | (2.4)% | | Marketing expenses | $7,525 | $9,787 | $(2,262) | (23.1)% | | Employee related compensation | $6,844 | $6,692 | $152 | 2.3% | | Other segment operating expenses | $14,004 | $12,599 | $1,405 | 11.2% | - **Reductions in marketing expense** were **partially offset by increases in seller fees, shipping costs, and fulfillment** within other segment operating expenses, **driven by increased DTC channel net sales**[161](index=161&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is supported by cash, operating flows, and the 2025 Revolving Credit Facility, alleviating going concern doubts [Going Concern Evaluation](index=41&type=section&id=Going%20Concern%20Evaluation) - **Substantial doubt** about the company's ability to continue as a going concern, previously concluded in 2024 and Q1 2025 filings, has been **alleviated** as of August 6, 2025[167](index=167&type=chunk)[169](index=169&type=chunk) - The alleviation is due to the 2025 Refinancing Amendment, which **restructured loans, extended maturities, lowered short-term cash requirements (PIK interest), and deferred financial covenant compliance**[168](index=168&type=chunk) - The company's plans focus on **improving financial results and liquidity** through cost-saving and operational improvements[168](index=168&type=chunk) - The **first full measurement period** for certain financial covenants under the 2025 Refinancing Amendment is Q3 2026, **beyond the 12-month look-forward period**[169](index=169&type=chunk) - The company **expects to comply with covenants** and believes current cash and operating cash flows will be **sufficient for the next twelve months**[169](index=169&type=chunk) [Revolving Credit Facilities and Term Loans](index=41&type=section&id=Revolving%20Credit%20Facilities%20and%20Term%20Loans) - The 2025 Refinancing Amendment, effective June 13, 2025, **restructured debt** into a **$90 million** 2025 Revolving Credit Facility and a **$240 million** 2025 Term Loan[172](index=172&type=chunk) - Maturity date for both facilities is **June 30, 2028**[174](index=174&type=chunk) - Interest is **payable in kind (PIK) quarterly** through March 31, 2026, and potentially longer under certain conditions[175](index=175&type=chunk) - New financial covenants include a **maximum Total Leverage Ratio** and **minimum Fixed Charge Coverage Ratio** (commencing Q3 2026), a **minimum average liquidity covenant** (commencing July 2026), and a **minimum Credit Agreement Adjusted EBITDA of $25 million** for the four fiscal quarters ending December 31, 2025[178](index=178&type=chunk) [Cash Flows](index=43&type=section&id=Cash%20Flows) Cash Flows Summary (in thousands) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Operating activities | $(64,256) | $(2,848) | $(61,408) | 2156.2% | | Investing activities | $(6,414) | $(5,225) | $(1,189) | (22.8)% | | Financing activities | $76,627 | $8,241 | $68,386 | 829.8% | - **Increase in cash used in operating activities** was due to a **$28.0 million increase** in cash usage from working capital changes (accounts payable, inventory, marketing) and a **$33.4 million increase** in cash usage from changes in net income (loss) after non-cash adjustments[180](index=180&type=chunk) - **Increase in cash used in investing activities** was primarily due to **increased capital expenditures for software**[181](index=181&type=chunk) - **Increase in cash provided by financing activities** was driven by **$67.0 million** from **net debt activity related to the 2025 Refinancing Amendment**, partially offset by a **$2.5 million payment for TerraFlame disposition**[182](index=182&type=chunk) [Contractual Obligations](index=43&type=section&id=Contractual%20Obligations) - A **$5.4 million** obligation to a former advertising services vendor was **settled for $4.0 million** during H1 2025, resulting in a **recognized gain**[183](index=183&type=chunk) - **Future maturities of principal amounts** of total debt obligations (excluding finance leases) are **$1.8 million** in 2026, **$7.8 million** in 2027, and **$241.58 million** in 2028[81](index=81&type=chunk) [Critical Accounting Estimates](index=43&type=section&id=Critical%20Accounting%20Estimates) - Financial statements are prepared using estimates and judgments that affect reported amounts of assets, liabilities, revenue, and expenses[185](index=185&type=chunk) - **No material changes to critical accounting policies and estimates** occurred during the six months ended June 30, 2025, from those in the 2024 Form 10-K[187](index=187&type=chunk) [Recent Accounting Pronouncements](index=45&type=section&id=Recent%20Accounting%20Pronouncements) - Refer to Note 1 for details on recently adopted and recently issued accounting pronouncements[188](index=188&type=chunk) [JOBS Act](index=45&type=section&id=JOBS%20Act) - The company **qualifies as an "emerging growth company"** under the JOBS Act[189](index=189&type=chunk) - It has **elected to adopt new or revised accounting guidance within the same time periods as private companies**, which may **impact comparability of financial statements**[189](index=189&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discusses market risks from interest rates, inflation, commodity prices, and foreign currency, and their financial impact [Interest Rate Risk](index=45&type=section&id=Interest%20Rate%20Risk) - As of June 30, 2025, **indebtedness included $10.0 million** under the 2025 Revolving Credit Facility (**5.94%** annualized) and **$241.2 million** under the 2025 Term Loan (**6.70%** annualized)[191](index=191&type=chunk) - A **100 basis point increase** in SOFR would **increase annual interest expense by approximately $2.5 million**[191](index=191&type=chunk) [Inflation Risk](index=45&type=section&id=Inflation%20Risk) - High inflation in the future could **adversely affect gross margin and SG&A expenses** if **selling prices do not increase with costs**[192](index=192&type=chunk) [Commodity Price Risk](index=45&type=section&id=Commodity%20Price%20Risk) - Primary raw materials include stainless steel and aluminum, which are **subject to commodity price fluctuations and tariffs**[193](index=193&type=chunk) - New or increased tariffs could **materially and adversely affect the business if increased costs cannot be recovered**[193](index=193&type=chunk) - The company does **not currently hedge commodity price risk**[193](index=193&type=chunk) [Foreign Currency Risk](index=45&type=section&id=Foreign%20Currency%20Risk) - International sales accounted for **7.2%** of consolidated net sales for H1 2025 and 2024, primarily from the Solo Stove segment[194](index=194&type=chunk)[195](index=195&type=chunk) - A **strengthening U.S. dollar may increase the cost of products for international customers**[195](index=195&type=chunk) - **Unfavorable exchange rate movements could lead suppliers to pass on additional costs, impacting gross margins**[195](index=195&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Evaluates disclosure controls and procedures, noting ineffectiveness due to a material weakness in internal control over financial reporting [Limitations on Effectiveness of Controls and Procedures](index=47&type=section&id=Limitations%20on%20Effectiveness%20of%20Controls%20and%20Procedures) - Controls and procedures can only provide **reasonable assurance** due to **inherent limitations and resource constraints**[196](index=196&type=chunk) [Evaluation of Disclosure Controls and Procedures](index=47&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Disclosure controls and procedures were **not effective at a reasonable assurance level** as of June 30, 2025[197](index=197&type=chunk) - This ineffectiveness is due to a **material weakness in internal control over financial reporting**[197](index=197&type=chunk) [Material Weakness](index=47&type=section&id=Material%20Weakness) - A **material weakness** was identified in Q4 2024, stemming from **deficiencies in segregation of duties, IT change management, and resource constraints in the accounting function**[199](index=199&type=chunk) - Individually, these deficiencies did not present a material misstatement risk, but when aggregated, the **potential for material misstatement increased to a material weakness**[199](index=199&type=chunk) [Changes in Internal Control over Financial Reporting](index=47&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - **Ongoing remediation efforts** include identifying key systems/processes/controls for improved documentation, addressing segregation of duties conflicts, developing IT change management policies, increasing staff training, and augmenting resources[200](index=200&type=chunk) - The **material weakness is not yet remediated** as of June 30, 2025, as **processes need to be in place for a sufficient period and tested for effectiveness**[200](index=200&type=chunk) - **No other material changes in internal control over financial reporting occurred** during Q2 2025, apart from ongoing remediation[201](index=201&type=chunk) [PART II. OTHER INFORMATION](index=48&type=section&id=PART%20II.%20OTHER%20INFORMATION) Covers legal proceedings, updated risk factors, equity sales, and exhibits, highlighting ongoing risks and corporate actions [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) - There have been **no material changes to the legal proceedings** previously disclosed in the company's 2024 Form 10-K[202](index=202&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) - Previous **substantial doubt about the company's ability to continue as a going concern has been alleviated**, but **recurring losses and uncertainties in realizing benefits from initiatives could raise future doubts**[204](index=204&type=chunk)[205](index=205&type=chunk) - The **1-for-40 reverse stock split**, effective July 8, 2025, was implemented to **regain NYSE listing compliance**, but its **ultimate effect on market price and liquidity of Class A common stock cannot be predicted with certainty**[207](index=207&type=chunk)[208](index=208&type=chunk) - The reverse stock split may lead to **reduced trading volumes, more volatile prices, and higher trading costs for "odd lots"**[210](index=210&type=chunk) - Future declines in stock price could lead to **delisting**, as the company is **restricted from another reverse stock split for one year**[212](index=212&type=chunk) - **Sales of a substantial number of Class A common stock shares**, including **121,998 shares** issued to a lender in June 2025, could **cause the stock price to fall and dilute existing stockholders**[213](index=213&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) - Information regarding unregistered sales of equity securities during the three months ended June 30, 2025, was **previously reported** in the company's Current Report on Form 8-K filed on June 16, 2025[216](index=216&type=chunk) [Item 3. Defaults Upon Senior Securities](index=50&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) - There were **no defaults upon senior securities** during the period[217](index=217&type=chunk) [Item 4. Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) - There were **no mine safety disclosures** for the period[218](index=218&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) - **No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement** during Q2 2025[219](index=219&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) - Lists various exhibits, including Certificate of Amendment to the Certificate of Incorporation (3.3), Amendment No. 4 to Credit Agreement (10.1), CEO/CFO Certifications (31.1, 31.2, 32.1, 32.2), and Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[220](index=220&type=chunk) [SIGNATURES](index=52&type=section&id=SIGNATURES) - Report signed by John P. Larson (President and CEO) and Laura Coffey (CFO) on August 6, 2025[225](index=225&type=chunk)

Executive Summary & Business Update [Key Strategic Highlights](index=1&type=section&id=Key%20Strategic%20Highlights) Solo Brands is transforming into a disciplined, profit-driven business, marked by successful debt refinancing, NYSE reinstatement, and a focus on cash generation - Successfully completed debt refinancing and removed the going concern disclaimer[2](index=2&type=chunk) - Class A common stock reinstated on NYSE under new ticker symbol **SBDS**[2](index=2&type=chunk) - Generated nearly **$11 million** in operating cash flow during Q2, highlighting a sharpened focus on cash generation and operational discipline[2](index=2&type=chunk) [Consolidated Second Quarter 2025 Financial Highlights](index=1&type=section&id=Consolidated%20Second%20Quarter%202025%20Financial%20Highlights) For Q2 2025, Solo Brands experienced a significant decline in net sales and an increased net loss, primarily due to headwinds in the Solo Stove segment Consolidated Second Quarter 2025 Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------------- | :------ | :------ | :----- | | Net Sales | $92.3M | $131.6M | -29.9% | | Gross Profit | $56.6M (61.3%) | $82.6M (62.8%) | -150 bps | | Adjusted Gross Profit | $56.9M (61.7%) | $83.6M (63.6%) | -190 bps | | Operating Expenses | $66.4M | $80.4M | -17.4% | | Net Loss | $(20.8)M (22.5%) | $(4.0)M (3.1%) | Increased | | Adjusted Net Income | $1.0M | $6.0M | Declined | | Adjusted EBITDA | $10.5M (11.4%) | $15.5M (11.7%) | Declined | | Basic & Diluted EPS | $(8.93) | $(2.14) | Increased Loss | | Adjusted Basic & Diluted EPS | $0.02 | $1.59 | Declined | - The decline in net sales was primarily within the Solo Stove segment's direct-to-consumer (DTC) channel[5](index=5&type=chunk) - Operating expenses decreased by **$14.0 million**, driven by decreases in marketing spend and distribution costs within the Solo Stove segment, partially offset by **$10.3 million** in restructuring, contract termination, and impairment charges[5](index=5&type=chunk) [Segment Second Quarter 2025 Performance Highlights](index=1&type=section&id=Segment%20Second%20Quarter%202025%20Performance%20Highlights) In Q2 2025, Solo Stove faced significant declines in net sales and Segment EBITDA, while Chubbies delivered strong growth in both metrics - **Solo Stove Segment:** Net sales declined **45.8%** to **$38.3 million**, driven primarily by declines in DTC sales due to prioritizing pricing integrity over significant promotional activity[5](index=5&type=chunk) - **Solo Stove Segment:** Segment EBITDA declined from **$14.8 million** (**20.9%** of net sales) in the prior year to **$3.4 million** (**8.9%** of net sales)[5](index=5&type=chunk) - **Chubbies Segment:** Net sales increased **13.1%** to **$44.5 million**, driven by strong performance within the retail sales channel and sustained solid demand in DTC sales[5](index=5&type=chunk) - **Chubbies Segment:** Segment EBITDA improved from **$7.7 million** (**19.7%** of net sales) to **$11.5 million** (**25.8%** of net sales) due to growth in net sales and more efficient marketing spend[5](index=5&type=chunk) [Consolidated Six Months Ended June 30, 2025 Financial Highlights](index=1&type=section&id=Consolidated%20Six%20Months%20Ended%20June%2030%2C%202025%20Financial%20Highlights) For the first six months of 2025, Solo Brands experienced decreased net sales and a substantial increase in net loss, primarily due to Solo Stove's declines Consolidated Six Months Ended June 30, 2025 Financial Highlights | Metric | H1 2025 | H1 2024 | Change | | :-------------------------------- | :------ | :------ | :----- | | Net Sales | $169.5M | $216.9M | -21.8% | | Gross Profit | $99.2M (58.5%) | $133.2M (61.4%) | -290 bps | | Adjusted Gross Profit | $99.7M (58.8%) | $134.4M (62.0%) | -320 bps | | Operating Expenses | $119.7M | $137.3M | -12.8% | | Net Loss | $(39.3)M (23.2%) | $(10.5)M (4.9%) | Increased | | Adjusted Net Loss | $(5.2)M | $7.7M | Declined | | Adjusted EBITDA | $14.0M (8.3%) | $19.7M (9.1%) | Declined | | Basic & Diluted EPS | $(17.06) | $(4.48) | Increased Loss | | Adjusted Basic & Diluted EPS | $(3.15) | $2.81 | Declined | - Net sales decreased by **$47.4 million**, driven by declines in both retail and DTC sales within the Solo Stove segment, partially offset by strong sales results in retail and DTC for the Chubbies segment[5](index=5&type=chunk) - Operating expenses decreased by **$17.6 million**, primarily driven by a reduction in distribution and marketing expenses, offset in part by a **$16.1 million** expenditure related to restructuring, contract termination, and impairment charges[5](index=5&type=chunk) [Segment Six Months Ended June 30, 2025 Performance Highlights](index=3&type=section&id=Segment%20Six%20Months%20Ended%20June%2030%2C%202025%20Performance%20Highlights) For the first half of 2025, Solo Stove experienced a substantial decrease in net sales and Segment EBITDA, while Chubbies demonstrated strong growth in both metrics - **Solo Stove Segment:** Net sales decreased **47.3%** to **$64.4 million**, driven primarily by declines in DTC sales due to prioritizing pricing integrity with retail partners over significant promotional activity[11](index=11&type=chunk) - **Solo Stove Segment:** Segment EBITDA declined from **$22.4 million** (**18.4%** of net sales) in the prior year to **$1.9 million** (**3.0%** of net sales)[11](index=11&type=chunk) - **Chubbies Segment:** Net sales increased **26.4%** to **$87.1 million**, driven by strong performance within the retail sales channel and continued solid demand within the DTC sales channel[11](index=11&type=chunk) - **Chubbies Segment:** Segment EBITDA improved from **$12.7 million** (**18.4%** of net sales) to **$22.8 million** (**26.1%** of net sales) due to strong net sales growth and more efficient marketing spend[11](index=11&type=chunk) [Balance Sheet & Liquidity Highlights](index=3&type=section&id=Balance%20Sheet%20%26%20Liquidity%20Highlights) Solo Brands improved its cash position and reduced inventory by June 30, 2025, successfully refinancing debt and eliminating going concern doubt Balance Sheet Highlights | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Cash and cash equivalents | $18.1M | $12.0M | +$6.1M | | Inventory | $84.1M | $108.6M | -$24.5M | | Outstanding Borrowings (Revolving Credit Facility) | $10.0M | N/A | N/A | | Outstanding Borrowings (Term Loan, net) | $241.2M | N/A | N/A | | Revolving Credit Facility Availability | $63.8M | N/A | N/A | - Cash and cash equivalents increased to **$18.1 million** as of June 30, 2025, from **$12.0 million** at December 31, 2024[6](index=6&type=chunk) - Inventory decreased to **$84.1 million** as of June 30, 2025, from **$108.6 million** at December 31, 2024, due to inventory reduction and supply chain optimization[6](index=6&type=chunk) - On June 13, 2025, the Company entered into a 2025 Refinancing Amendment, providing for a **$240.0 million** term loan and a **$90.0 million** revolving credit facility[8](index=8&type=chunk) - As a result of the refinancing, the substantial doubt about the Company's ability to continue as a going concern has been eliminated[8](index=8&type=chunk) [Corporate & Market Updates](index=3&type=section&id=Corporate%20%26%20Market%20Updates) Solo Brands announced the lifting of its Class A common stock trading suspension on the NYSE and a ticker symbol change to "SBDS" - The NYSE lifted the trading suspension of the Company's Class A common stock[12](index=12&type=chunk) - The ticker symbol for Class A common stock changed to "**SBDS**" from "**DTC**" effective July 24, 2025[12](index=12&type=chunk) Detailed Financial Performance [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) The consolidated statements show a significant increase in net loss for both the three and six months ended June 30, 2025, driven by lower net sales and higher expenses Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) | (In thousands, except per share

Core Insights - Solo Brands, Inc. reported a significant focus on transforming into a smaller, profit-driven business model, achieving nearly $11 million in cash from operations for Q2 2025 [2][3] - The company faced challenges in the Solo Stove segment due to excessive inventory and a shift away from a promotional sales strategy, while Chubbies showed strong growth with a 13.1% increase in sales [2][5] - The company successfully refinanced its debt, eliminated the going concern disclaimer, and reinstated trading of its Class A common stock under the new ticker symbol SBDS [2][12] Financial Performance - For Q2 2025, net sales decreased to $92.3 million, down 29.9% from $131.6 million in Q2 2024, primarily due to declines in the Solo Stove segment [5][9] - Gross profit for Q2 2025 was $56.6 million, representing 61.3% of net sales, a decrease of 150 basis points compared to the prior year [5][9] - Operating expenses decreased by $14.0 million to $66.4 million, a reduction of 17.4%, mainly due to lower marketing and distribution costs [5][9] Segment Performance - Solo Stove segment net sales fell to $38.3 million, a decline of 45.8%, primarily due to reduced direct-to-consumer sales [5][9] - Chubbies segment net sales increased to $44.5 million, up 13.1%, with segment EBITDA improving to $11.5 million, or 25.8% of net sales [9][25] - Adjusted EBITDA for the company was $10.5 million, or 11.4% of net sales, compared to $15.5 million, or 11.7% of net sales in the prior year [5][9] Balance Sheet and Cash Flow - As of June 30, 2025, cash and cash equivalents were $18.1 million, up from $12.0 million at the end of 2024, while inventory decreased to $84.1 million from $108.6 million [8][27] - The company reported a net loss of $20.8 million for Q2 2025, compared to a net loss of $4.0 million in Q2 2024 [5][9] - Total liabilities included $10.0 million in borrowings under the revolving credit facility and $241.2 million under the term loan as of June 30, 2025 [10][11]

Core Insights - ODDITY Tech Ltd. reported strong Q2 2025 results, with net sales and earnings exceeding estimates and showing year-over-year growth [1][3] - The company raised its full-year outlook, driven by robust top-line growth and strategic investments in innovation [2] Financial Performance - Adjusted EPS for Q2 was 92 cents, beating the estimate of 88 cents, and increased by 12.2% year-over-year [3] - Net sales reached $241.1 million, surpassing the estimate of $239 million, and grew by 25.1% from $192.8 million in the prior year [3] - Online DTC sales rose by 29.6% to $235.2 million, constituting 98% of total sales, up from 94% in the previous year [4] Margin and Cost Analysis - Gross profit was $174.4 million, a 25.3% increase from $139.1 million last year, with a gross margin of 72.3% [5] - SG&A expenses increased by 36.3% to $117.3 million, representing 48.6% of net sales, up 200 basis points year-over-year [5] - Operating income was $57.1 million, a 7.6% increase, while the operating margin declined to 23.7% [6] Strategic Developments - ODDITY's core brands, IL MAKIAGE and SpoiledChild, achieved double-digit online sales growth, supported by AI-driven personalization [10] - The company is on track to launch Brand 3 in Q4 2025, targeting the medical-grade dermatology segment, and Brand 4 is expected to launch in 2026 [11] - ODDITY raised $600 million through its first exchangeable note offering, indicating strong investor confidence [12] Future Guidance - For FY25, ODDITY expects net sales between $799 million and $804 million, reflecting 23-24% year-over-year growth [13] - Adjusted EBITDA is projected between $160 million and $162 million, with adjusted EPS expected between $2.06 and $2.09 [14] - For Q3 2025, net sales are anticipated to be between $144 million and $146 million, indicating year-over-year growth of 21-23% [14] Financial Health - As of June 30, 2025, ODDITY had cash and cash equivalents of $656.8 million, no long-term debt, and shareholders' equity of $351.2 million [9]

Core Insights - lululemon athletica inc.'s direct-to-consumer (DTC) channel is a significant growth driver, with DTC revenues increasing by 8% in Q1 fiscal 2025, accounting for 42% of total revenues [1][8] - Store traffic in North America has weakened due to macroeconomic pressures, while international markets, particularly China, continue to show double-digit growth [2][3] - The company is confident in its "Power of Three x2" strategy, focusing on DTC expansion, product innovation, and international growth to stabilize overall performance [3] Company Performance - lululemon's DTC revenues rose 8% in Q1, driven by mobile upgrades and personalized features that enhanced conversion and engagement [8] - The company's shares have declined by 46% year-to-date, compared to a 25.7% decline in the industry [7] - The Zacks Consensus Estimate for fiscal 2025 earnings indicates a year-over-year decline of 1.5%, while fiscal 2026 suggests a growth of 7.5% [10] Competitive Landscape - Competitors like NIKE and Ralph Lauren are also experiencing a shift towards DTC strength to mitigate in-store challenges [4] - NIKE's store traffic grew by 2% in Q4 fiscal 2025, while its digital sales dropped by 26% as the brand adjusted its promotional strategy [5] - Ralph Lauren reported a 6% increase in global DTC comps in Q4 fiscal 2025, with strong digital growth and plans for enhanced DTC experiences [6] Valuation Metrics - lululemon trades at a forward price-to-earnings ratio of 13.75X, which is higher than the industry average of 11.29X [9]

Group 1 - Solo Brands, Inc. plans to report its fiscal second quarter results on August 6, 2025, before the market opens [1] - A conference call for management's prepared remarks on Solo Brands' strategy and financial results is scheduled for 9:00 a.m. ET on the same day [1] - Investors and analysts can join the call by dialing the provided numbers or through a live webcast available on the company's investor relations website [2] Group 2 - A recorded replay of the conference call will be available shortly after its conclusion and will remain accessible until August 13, 2025 [3] - Solo Brands is headquartered in Grapevine, TX, and operates as an omnichannel lifestyle brand company [4] - The company offers products through four lifestyle brands: Solo Stove, Chubbies, ISLE, and Oru Kayak, each known for their innovative offerings [4]

Kelowna, British Columbia--(Newsfile Corp. - July 21, 2025) - F4 Uranium Corp. (TSXV: FFU) (OTCQB: FFUCF) (the "Company" or "F4") is pleased to announce it is now listed on the OTCQB Exchange to boost its visibility and capital access. The listing will attract more investor interest and improve trading liquidity, marking an important milestone for the company. Additionally, the Company's common shares are now eligible for settlement through the Depository Trust Company ("DTC"), a subsidiary of the Deposito ...