a.k.a. Brands (US:AKA)2024-03-07 21:08Financial Performance - For the year ended December 31, 2023, net sales decreased to $546.3 million, down 10.7% from $611.7 million in 2022[344] - Gross profit for 2023 was $300.3 million, representing a gross margin of 54.9%, compared to $337.2 million and a margin of 55.1% in 2022[344] - The company reported a net loss of $98.9 million for 2023, an improvement from a net loss of $176.7 million in 2022[344] - The net loss for the year ended December 31, 2023, was $98,886 thousand, a decrease from a net loss of $176,697 thousand in 2022[350] - The Company reported a loss before income taxes of $96,965 million in 2023, a decrease from a loss of $180,614 million in 2022[470] Assets and Liabilities - Total current assets decreased to $135.7 million in 2023, down 31.3% from $197.6 million in 2022[341] - Total liabilities decreased to $213.1 million in 2023, down 18.9% from $262.6 million in 2022[341] - Cash and cash equivalents decreased to $21.9 million in 2023, down 52.8% from $46.3 million in 2022[341] - The company’s accumulated deficit increased to $267.4 million in 2023, compared to $168.5 million in 2022[341] - Total prepaid expenses and other current assets increased to $15.846 million as of December 31, 2023, compared to $13.378 million in 2022, with significant increases in security deposits and inventory prepayments[444] Goodwill and Impairments - The company incurred a goodwill impairment of $68.5 million in 2023, compared to $173.8 million in 2022[344] - Goodwill decreased significantly to $94.9 million as of December 31, 2023, from $167.7 million in 2022, following a non-cash goodwill impairment charge of $68.5 million in Q3 2023[446] - The Company recorded a total non-cash goodwill impairment charge of $173.8 million during the year ended December 31, 2022, due to unfavorable economic trends and changing customer preferences[447] Cash Flow and Financing Activities - Cash flows from operating activities provided $33,426 thousand in 2023, compared to a cash outflow of $319 thousand in 2022[350] - The Company’s cash flow from financing activities resulted in a net outflow of $52,829 thousand in 2023, contrasting with a net inflow of $33,260 thousand in 2022[350] - The Company issued $25.0 million in senior subordinated notes to an affiliate of Summit in connection with the acquisition of Culture Kings, which were paid in full and terminated during the IPO[507] Equity and Stock Transactions - The weighted average shares outstanding for basic and diluted net loss per share was approximately 10.7 million in 2023, compared to 10.7 million in 2022[344] - The Company repurchased shares worth $2,100 thousand in 2023, with no repurchases reported in 2022[350] - The Company repurchased 348,468 shares of its common stock for $2.3 million in 2023, at an average price of $6.72 per share[501] Expenses - Operating expenses totaled $383.7 million in 2023, a decrease from $509.3 million in 2022, primarily due to reduced selling and administrative costs[344] - Selling expenses, including shipping and handling costs, totaled $69.3 million for the year ended December 31, 2023, down from $80.5 million in 2022[414] - The Company recognized total equity-based compensation expense of $7.64 million in 2023, an increase from $6.73 million in 2022[495] Tax and Deferred Revenue - The provision for income taxes in 2023 was $1,921 million, compared to a benefit of $(3,917) million in 2022[471] - Total deferred revenue as of December 31, 2023, was $11,782 million, slightly up from $11,421 million in 2022[479] Inventory and Assets Management - The company reported a significant increase in inventory, with a change of $32,149 thousand in 2023, compared to a decrease of $16,257 thousand in 2022[350] - The Company’s inventory is valued at the lower of cost or net realizable value, with provisions for excess and obsolete inventory based on future demand assumptions[372] Debt and Interest - As of December 31, 2023, total debt was $93.394 million, down from $143.649 million in 2022, with a term loan balance of $94.450 million[463] - Interest expense for the year ended December 31, 2023, totaled $11.2 million, an increase from $7.0 million in 2022[464] - The all-in interest rate for the Company's term loan and revolving line of credit was 8.47% as of December 31, 2023[462] Subsequent Events and Compliance - The Company has evaluated subsequent events through March 7, 2024, and identified events requiring disclosure in the financial statements[508] - The Company maintained compliance with all debt covenants as of December 31, 2023, including a maximum total net leverage ratio of 3.50 to 1.00[456]