tra-20230930

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, 2023


☐			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 of registrant as specified in its charter)


Delaware						82-2739741
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)


1215 E Wilmington Ave, Suite 200
Salt Lake City, Utah						84106
(Address of principal executive offices)						(Zip code)

(801) 701-7180

(Registrants telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	COOK	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☒

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

As of November 3, 2023, there were 125,809,285 shares of the registrant's common stock, par value $0.0001 per share, outstanding.

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TABLE OF CONTENTS


			Page
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)			1
Condensed Consolidated Balance Sheets			1
Condensed Consolidated Statements of Operations and Comprehensive Loss			2
Condensed Consolidated Statements of Changes in Stockholders' Equity			3
Condensed Consolidated Statements of Cash Flows			5
Notes to Unaudited Condensed Consolidated Financial Statements			7
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			20
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			34
ITEM 4. CONTROLS AND PROCEDURES			35

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS			35
ITEM 1A. RISK FACTORS			35
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES			36
ITEM 3. DEFAULTS UPON SENIOR SECURITIES			36
ITEM 4. MINE SAFETY DISCLOSURES			36
ITEM 5. OTHER INFORMATION			36
ITEM 6. EXHIBITS			37
SIGNATURES			38

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates," “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to statements regarding our future results of operations and financial position, general macroeconomic trends, industry and business trends, equity compensation, business strategy, plans, market growth and our objectives for future operations.

The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, our history of operating losses, our ability to manage our future growth effectively, our ability to expand into additional markets, our ability to maintain and strengthen our brand to generate and maintain ongoing demand for our products, our ability to cost-effectively attract new customers and retain our existing customers, our failure to maintain product quality and product performance at an acceptable cost, the impact of product liability and warranty claims and product recalls, the highly competitive market in which we operate, the use of social media and community ambassadors, a decline in sales of our grills, our dependence on three major retailers, risks associated with our international operations, our reliance on a limited number of third-party manufacturers and problems with (or loss of) our suppliers or an inability to obtain raw materials, the ability of our stockholders to influence corporate matters, our ability to successfully remediate the material weakness in our internal control over financial reporting in an appropriate and timely manner or at all, and the other important factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on March 16, 2023, as updated by Part II, Item 1A "Risk Factors" in this Quarterly Report on Form 10-Q. The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TRAEGER, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)


	September 30, 2023		December 31, 2022
	(unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	11,280	$	39,055
Restricted cash	—		12,500
Accounts receivable, net	50,996		42,050
Inventories	101,891		153,471
Prepaid expenses and other current assets	35,051		27,162
Total current assets	199,218		274,238
Property, plant, and equipment, net	55,232		55,510
Operating lease right-of-use assets	11,922		13,854
Goodwill	74,725		74,725
Intangible assets, net	481,155		512,858
Other non-current assets	14,468		15,530
Total assets	$	836,720	$	946,715
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	26,028	$	29,841
Accrued expenses	40,682		52,295
Line of credit	25,000		11,709
Current portion of notes payable	250		250
Current portion of operating lease liabilities	3,772		5,185
Current portion of contingent consideration	10,810		12,157
Other current liabilities	1,726		1,470
Total current liabilities	108,268		112,907
Notes payable, net of current portion	397,009		468,108
Operating leases liabilities, net of current portion	8,418		9,001
Contingent consideration, net of current portion	—		10,590
Deferred tax liability	10,373		10,370
Other non-current liabilities	879		870
Total liabilities	524,947		611,846
Commitments and contingencies—See Note 10
Stockholders' equity:
Preferred stock, $0.0001 par value; 25,000,000 shares authorized and no shares issued or outstanding as of September 30, 2023 and December 31, 2022	—		—
Common stock, $0.0001 par value; 1,000,000,000 shares authorized
Issued and outstanding shares - 125,658,970 and 122,624,414 as of September 30, 2023 and December 31, 2022	13		12
Additional paid-in capital	929,249		882,069
Accumulated deficit	(630,832)		(570,475)
Accumulated other comprehensive income	13,343		23,263
Total stockholders' equity	311,773		334,869
Total liabilities and stockholders' equity	$	836,720	$	946,715

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

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TRAEGER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

(in thousands, except share and per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue	$	117,730	$	93,788	$	442,403	$	517,768
Cost of revenue	73,064		68,710		278,983		336,605
Gross profit	44,666		25,078		163,420		181,163
Operating expenses:
Sales and marketing	25,913		25,496		75,903		102,401
General and administrative	24,823		70,485		103,873		142,637
Amortization of intangible assets	8,889		8,889		26,666		26,666
Change in fair value of contingent consideration	(2,300)		1,820		508		3,775
Restructuring costs	225		8,036		225		8,036
Goodwill impairment	—		110,837		—		222,322
Total operating expense	57,550		225,563		207,175		505,837
Loss from operations	(12,884)		(200,485)		(43,755)		(324,674)
Other income (expense):
Interest expense	(7,517)		(7,337)		(23,408)		(20,238)
Other income (expense), net	1,992		(3,545)		8,020		(8,351)
Total other expense	(5,525)		(10,882)		(15,388)		(28,589)
Loss before provision (benefit) for income taxes	(18,409)		(211,367)		(59,143)

SEC Form 10-Q filed by Traeger Inc.