a.k.a. Brands (AKA) - 2024 Q4 - Annual Report

Financial Performance - Net sales for 2024 were $574.7 million, an increase of 5.4$546.3 million in 2023[330]. - Gross profit for 2024 was $327.5 million, up from$300.3 million in 2023, reflecting a gross margin improvement[330]. - The net loss for 2024 was $26.0 million, significantly improved from a net loss of$98.9 million in 2023[330]. - The company reported a net loss per share of $2.46 for 2024, compared to$9.24 in 2023[330]. - Total comprehensive loss decreased to $36.57 million in 2024 from$103.97 million in 2023, reflecting a reduction of about 64.8%[333]. - Revenue for the year ended December 31, 2024, was $574.7 million, an increase of 5.5$546.3 million in 2023, but a decrease of 6.1% from $611.7 million in 2022[382]. - Selling expenses for 2024 were$72.2 million, compared to $69.3 million in 2023 and$80.5 million in 2022, indicating a decrease of 3.9% year-over-year[384]. - Gross margin for 2024 improved to 57.0%, up from 55.0% in 2023, with net sales of $574.70 million[452]. Assets and Liabilities - Total assets increased to$385.2 million in 2024 from $361.7 million in 2023, driven by higher cash and inventory levels[329]. - Current liabilities rose to$97.0 million in 2024, up from $86.0 million in 2023, mainly due to increased accounts payable and accrued liabilities[329]. - The company’s total liabilities increased to$267.6 million in 2024 from $213.1 million in 2023, reflecting higher long-term debt[329]. - Cash and cash equivalents at the end of 2024 were$24.2 million, compared to $21.9 million at the end of 2023[329]. - As of December 31, 2024, total debt was$111.7 million, with a breakdown of $89.05 million in term loans and$23.3 million in revolving credit facility[411]. - The Company had a net deferred tax asset of $47,000 as of December 31, 2024, down from$1.569 million in 2023[420]. - Total accrued liabilities increased to $31.216 million from$25.223 million in 2023, reflecting a rise of approximately 23.6%[425]. Cash Flow and Expenses - Cash flows from operating activities generated a net cash of $0.67 million in 2024, a recovery from a cash inflow of$33.43 million in 2023, contrasting with a cash outflow of $0.32 million in 2022[337]. - The company reported depreciation expense of$6.55 million in 2024, slightly down from $7.61 million in 2023[337]. - The interest expense for the year ended December 31, 2024, totaled$10.3 million, compared to $11.2 million in 2023 and$7.0 million in 2022[411]. - Operating lease costs for the year ended December 31, 2024, were $12.845 million, an increase from$10.005 million in 2023[415]. Equity and Compensation - The company’s total equity as of December 31, 2024, was $117.63 million, a decrease from$148.62 million in 2023, reflecting a decline of approximately 20.8%[335]. - Total equity-based compensation expense for 2024 is $7.98 million, an increase from$7.64 million in 2023[442]. - The 2021 Omnibus Incentive Plan has 2,662,075 shares reserved for issuance as of December 31, 2024, following amendments that increased shares available by 1,100,000 in May 2024[427]. - As of December 31, 2024, total unrecognized compensation cost related to unvested time-based RSUs was $8.2 million, expected to be recognized over an average period of 1.8 years[436]. Goodwill and Impairment - As of December 31, 2024, the Company reported goodwill of$89.3 million, down from $94.9 million in 2023, indicating a decrease of approximately 5.9$68.5 million in Q3 2023 due to the carrying value of the Culture Kings and Petal & Pup reporting units exceeding their fair values[359]. - The company incurred a loss on disposal of businesses amounting to $0.67 million in 2024, down from$1.53 million in 2023[337]. Future Plans and Market Strategy - The company plans to continue focusing on market expansion and new product development to drive future growth[14]. - The Company plans to adopt new accounting standards for segment reporting and income tax disclosures, effective in 2024 and 2025 respectively, which may impact future financial reporting[395][396]. Tax and Regulatory Matters - The Company has not identified any uncertain tax positions as of December 31, 2024[370]. - The provision for income taxes for the year ended December 31, 2024, was $4.329 million, compared to$1.921 million in 2023[419]. - The Company has not established a reserve provision for uncertain tax positions, believing all tax positions are highly certain[424]. Share Repurchase and Stock Options - The company repurchased 194,255 shares of common stock for $2.6 million at an average price of$13.36 per share during the year ended December 31, 2024[448]. - The company has authorized a total of $5.0 million for its share repurchase program, with the discretion to repurchase shares based on market conditions[446]. - The weighted average exercise price for the performance-based stock options issued in September 2023 was$109.27, with no options vested as of December 31, 2024[432]. Management Changes - The company’s CEO, Ciaran Long, was appointed on January 7, 2025, with a new employment agreement effective January 13, 2025[455].