Whole Earth Brands(FREE) - 2022 Q4 - Annual Report

Financial Performance - Product revenues for the year ended December 31, 2022, were $538.272 million, an increase from $493.973 million in 2021, representing a growth of approximately 8.5%[298]. - The net loss for the year ended December 31, 2022, was $58.752 million, compared to a net income of $0.083 million in 2021, indicating a significant decline in profitability[300]. - Gross profit for 2022 was $140.212 million, down from $158.755 million in 2021, reflecting a decrease of about 11.6%[298]. - Operating loss for the year ended December 31, 2022, was $(24.646) million, compared to an operating income of $22.816 million in 2021, highlighting a substantial operational downturn[298]. - Total comprehensive loss for 2022 was $(69.481) million, compared to a comprehensive income of $1.165 million in 2021, indicating a significant deterioration in overall financial performance[300]. - The company reported asset impairment charges of $46.500 million in 2022, which were not present in 2021, impacting the financial results significantly[298]. Assets and Liabilities - As of December 31, 2022, Whole Earth Brands, Inc. reported total assets of $849 million, a decrease from $922 million in 2021[296]. - The company had $368 million in outstanding principal under its Term Loan Facility and $76 million under its Revolving Credit Facility as of December 31, 2022[280]. - The long-term debt increased to $432.2 million in 2022 from $383.5 million in 2021[296]. - The company had an accumulated deficit of $85.2 million as of December 31, 2022, compared to $26.4 million in 2021[296]. - The company reported a total stockholders' equity of $274.6 million as of December 31, 2022, down from $313.9 million in 2021[296]. Cash Flow and Financing - The company had a net cash used in operating activities of $(5.810) million for the year ended December 31, 2022, compared to net cash provided of $9.482 million in 2021[305]. - Capital expenditures for 2022 were $(8.887) million, down from $(12.198) million in 2021, indicating a reduction in investment in physical assets[305]. - The company raised $54.000 million from a revolving credit facility in 2022, compared to $25.000 million in 2021, reflecting an increase in financing activities[305]. - Cash and cash equivalents at the end of the period increased to $28,676 million from $28,296 million, reflecting a net change of $380 million[307]. - Interest paid increased to $28,386 million from $21,203 million, indicating a rise of approximately 34%[307]. - Taxes paid, net of refunds, rose to $9,113 million from $4,523 million, representing an increase of about 101%[307]. Foreign Exchange and Market Risks - A 10% fluctuation in the Swiss Franc, Euro, Chinese Yuan, and British Pound Sterling against the USD would lead to an approximate 4% change in revenue for the year ended December 31, 2022[282]. - The company is subject to risks from the ongoing military conflict in Ukraine, which may impact sales, operations, and supply chain[280]. Expenses - Selling, general and administrative expenses decreased to $99.735 million in 2022 from $113.141 million in 2021, a reduction of approximately 11.8%[298]. - Research and development expenses were approximately $3.9 million for 2022, up from $3.4 million in 2021[336]. - Marketing and advertising expenses were $11.8 million in 2022, down from $17.0 million in 2021[344]. - The Company recognized restructuring and other expenses of $4.5 million during the year ended December 31, 2021[356]. Acquisitions - The Company acquired Swerve for a total purchase price of $79.032 million, funded by cash and a revolving loan facility[368][369]. - The acquisition of Wholesome was completed for an initial cash purchase price of $180 million, with an additional potential earn-out of up to $55 million based on financial metrics[372][373]. - Wholesome contributed $179.6 million in product revenues and $20.6 million in operating income for the year ended December 31, 2021[382]. - The Company recorded goodwill of $36.081 million from the Swerve acquisition and $80.763 million from the Wholesome acquisition, reflecting future economic benefits[369][378]. Taxation - The Company reported a total provision for income taxes of $5,789,000 for the year ended December 31, 2022, compared to a benefit of $(7,144,000) for the year ended December 31, 2021[437]. - The effective tax rate for the Company was (10.9)% for the year ended December 31, 2022, compared to 101.2% for the year ended December 31, 2021[437]. - The Company recognized a discrete tax benefit of $4.1 million in 2021 due to a beneficial Switzerland tax ruling allowing amortization of intangible assets over a 10-year period[440]. Pension and Employee Benefits - The Company froze its qualified pension plan on December 31, 2019, and unfunded non-qualified plans were frozen on December 31, 2022[446]. - The projected benefit obligations decreased from $20.3 million at the end of 2021 to $7.7 million at the end of 2022, reflecting a reduction of approximately 62%[449]. - The net pension liability improved from $(7.4) million in 2021 to $(5.2) million in 2022, indicating a reduction of approximately 30%[450]. - The Company recorded compensation expense related to defined contribution plans of $1.2 million for 2022, up from $1.0 million in 2021[465]. Stock-Based Compensation - Stock-based compensation expense for the year ended December 31, 2022, was $4.9 million, a decrease from $8.7 million in 2021[469]. - The aggregate fair value of RSUs that vested in 2022 was $1.5 million, compared to $7.2 million in 2021[472]. - The weighted average grant date fair value per share of RSUs granted in 2022 was $5.42, significantly lower than $13.48 in 2021[471].