Advantage Solutions Inc. [ADVWW] Filings

10-Q 1 adv-20230930.htm 10-Q 10-Q

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 the transition period from to

Commission File Number: 001-38990

Advantage Solutions Inc.

(Exact name of registrant as specified in its charter)


Delaware		83-4629508
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

15310 Barranca Parkway, Suite 100

Irvine, CA 92618

(Address of principal executive offices)

(949) 797-2900

(Registrant’s telephone number, including area code)

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, $0.0001 par value per share	ADV	Nasdaq Global Select Market
Warrants exercisable for one share of Class A common stock at an exercise price of $11.50 per share	ADVWW	Nasdaq Global Select Market

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 definition 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 

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 6, 2023, the registrant had 326,393,598 shares of Class A common stock outstanding.

Advantage Solutions Inc.

TABLE OF CONTENTS


		Page
PART I—FINANCIAL INFORMATION		3

Item 1. Financial Statements (Unaudited)		3

	Condensed Consolidated Balance Sheets	3

	Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income	4

	Condensed Consolidated Statements of Stockholders’ Equity	5

	Condensed Consolidated Statements of Cash Flows	7

	Notes to the Condensed Consolidated Financial Statements	8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		21

Item 3. Quantitative and Qualitative Disclosures About Market Risk		41

Item 4. Controls and Procedures		41

PART II—OTHER INFORMATION		43

Item 1. Legal Proceedings		43

Item 1A. Risk Factors		43

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		43

Item 3. Defaults Upon Senior Securities		44

Item 4. Mine Safety Disclosures		44

Item 5. Other Information		44

Item 6. Exhibits		44

Signatures		45

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ADVANTAGE SOLUTIONS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	September 30,			December 31,
(in thousands, except share data)	2023			2022
ASSETS
Current assets
Cash and cash equivalents	$	171,354		$	120,715
Restricted cash		16,265			17,817
Accounts receivable, net of allowance for expected credit losses of $32,682 and $22,752, respectively		827,845			869,000
Prepaid expenses and other current assets		103,125			149,476
Total current assets		1,118,589			1,157,008
Property and equipment, net		78,100			70,898
Goodwill		886,825			887,949
Other intangible assets, net		1,740,656			1,897,503
Investments in unconsolidated affiliates		126,991			129,491
Other assets		106,350			119,522
Total assets	$	4,057,511		$	4,262,371
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current portion of long-term debt	$	14,383		$	13,991
Accounts payable		250,476			261,464
Accrued compensation and benefits		139,096			154,744
Other accrued expenses		179,122			133,173
Deferred revenues		50,830			37,329
Total current liabilities		633,907			600,701
Long-term debt, net of current portion		1,910,013			2,022,819
Deferred income tax liabilities		240,061			297,874
Other long-term liabilities		93,439			111,507
Total liabilities		2,877,420			3,032,901
Commitments and contingencies (Note 9)

Redeemable noncontrolling interest		3,791			3,746

Equity attributable to stockholders of Advantage Solutions Inc.
Common stock, $0.0001 par value, 3,290,000,000 shares authorized; 325,774,637 and 319,690,300 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		32			32
Additional paid in capital		3,438,342			3,408,836
Accumulated deficit		(2,327,796	)		(2,247,109	)
Loans to Karman Topco L.P.		(6,381	)		(6,363	)
Accumulated other comprehensive loss		(19,312	)		(18,849	)
Treasury stock, at cost; 1,610,014 shares as of September 30, 2023 and December 31, 2022, respectively		(12,567	)		(12,567	)
Total equity attributable to stockholders of Advantage Solutions Inc.		1,072,318			1,123,980
Nonredeemable noncontrolling interest		103,982			101,744
Total stockholders’ equity		1,176,300			1,225,724
Total liabilities, redeemable noncontrolling interest, and stockholders’ equity	$	4,057,511		$	4,262,371

See Notes to the Condensed Consolidated Financial Statements.

ADVANTAGE SOLUTIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(UNAUDITED)


	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands, except share and per share data)	2023			2022			2023			2022
Revenues	$	1,096,059		$	1,051,095		$	3,145,097		$	2,946,979
Cost of revenues (exclusive of depreciation and amortization shown separately below)		947,546			908,523			2,740,347			2,536,256
Selling, general, and administrative expenses		76,065			37,945			204,445			138,594
Depreciation and amortization		56,465			57,785			170,307			173,997
Total operating expenses		1,080,076			1,004,253			3,115,099			2,848,847
Operating income		15,983			46,842			29,998			98,132
Other expenses (income):
Change in fair value of warrant liability		586			(1,100	)		587			(21,456	)
Interest expense, net		42,302			23,557			119,952			63,628
Total other expenses		42,888			22,457			120,539			42,172
(Loss) income before income taxes		(26,905	)		24,385			(90,541	)		55,960
(Benefit from) provision for income taxes		(4,323	)		1,158			(12,435	)		11,523
Net (loss) income		(22,582	)		23,227			(78,106	)		44,437
Less: net income attributable to noncontrolling interest		1,756			2,168			2,581			1,042
Net (loss) income attributable to stockholders of Advantage Solutions Inc.		(24,338	)		21,059			(80,687	)		43,395
Other comprehensive loss, net of tax:
Foreign currency translation adjustments		(5,709	)		(13,616	)		(463	)		(25,499	)
Total comprehensive (loss) income attributable to stockholders of Advantage Solutions Inc.	$	(30,047	)	$	7,443		$	(81,150	)	$	17,896

Basic (loss) earnings per common share	$	(0.07	)	$	0.07		$	(0.25	)	$	0.14
Diluted (loss) earnings per common share	$	(0.07	)	$	0.07		$	(0.25	)	$	0.14

Weighted-average number of common shares:		324,706,866			318,821,895			323,353,308			318,345,565
Weighted-average number of common shares, assuming dilution		324,706,866			319,725,065			323,353,308			319,190,804

See Notes to the Condensed Consolidated Financial Statements.

ADVANTAGE SOLUTIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)


																		Accumulated			Advantage
	Common Stock				Treasury Stock					Additional					Loans			Other			Solutions Inc.			Nonredeemable			Total
										Paid-in		Accumulated			to			Comprehensive			Stockholders'			Noncontrolling			Stockholders'
	Shares		Amount		Shares		Amount			Capital		Deficit			Topco			Income (Loss)			Equity			Interests			Equity
(in thousands, except share data)
Balance at July 1, 2023		324,481,143	$	32		1,610,014	$	(12,567	)	$	3,427,490	$	(2,303,458	)	$	(6,375	)	$	(13,603	)	$	1,091,519		$	106,087		$	1,197,606
Comprehensive (loss) income
Net (loss) income		—		—		—		—			—		(24,338	)		—			—			(24,338	)		1,622			(22,716	)
Foreign currency translation adjustments		—		—		—		—			—		—			—			(5,709	)		(5,709	)		(3,727	)		(9,436	)
Total comprehensive (loss) income																						(30,047	)		(2,105	)		(32,152	)
Interest on loans to Karman Topco L.P.		—		—		—		—			—		—			(6	)		—			(6	)		—			(6	)
Equity-based compensation of Karman Topco L.P.		—		—		—		—			209		—			—			—			209			—			209
Shares issued under 2020 Employee Stock Purchase Plan		566,464		—		—		—			1,055		—			—			—			1,055			—			1,055
Shares issued under 2020 Incentive Award Plan		727,030		—		—		—			—		—			—			—			—			—			—
Stock-based compensation expense		—		—		—		—			9,588		—			—			—			9,588			—			9,588
Balance at September 30, 2023		325,774,637	$	32		1,610,014	$	(12,567	)	$	3,438,342	$	(2,327,796	)	$	(6,381	)	$	(19,312	)	$	1,072,318		$	103,982		$	1,176,300


																			Accumulated			Advantage
	Common Stock				Treasury Stock					Additional						Loans			Other			Solutions Inc.			Nonredeemable			Total
										Paid-in			Accumulated			to			Comprehensive			Stockholders'			Noncontrolling			Stockholders'
	Shares		Amount		Shares		Amount			Capital			Deficit			Topco			Income (Loss)			Equity			Interests			Equity
(in thousands, except share data)
Balance at July 1, 2022		318,465,449	$	32	$	1,610,014	$	(12,567	)	$	3,390,899		$	(844,271	)	$	(6,351	)	$	(16,362	)	$	2,511,380		$	90,109		$	2,601,489
Comprehensive income (loss)
Net income		—		—		—		—			—			21,059			—			—			21,059			2,092			23,151
Foreign currency translation adjustments		—		—		—		—			—			—			—			(13,616	)		(13,616	)		(6,824	)		(20,440	)
Total comprehensive income (loss)																							7,443			(4,732	)		2,711
Interest on loans to Karman Topco L.P.		—		—		—		—			—			—			(6	)		—			(6	)		—			(6	)
Increase in noncontrolling interest		—		—		—		—			—			—			—			—			—			6,191			6,191
Equity-based compensation of Karman Topco L.P.		—		—		—		—			(828	)		—			—			—			(828	)		—			(828	)
Shares issued under 2020 Employee Stock Purchase Plan		470,786		—		—		—

Advantage Solutions Inc. [ADVWW] Filings
Advantage Solutions Inc. [ADV] Filings
10-Q	[2023-11-07]
10-Q	[2023-08-04]
10-Q	[2023-05-10]
10-K	[2023-03-01]
10-Q	[2022-11-09]
10-Q	[2022-08-09]
10-Q	[2022-05-10]
10-K	[2022-03-01]
10-Q	[2021-11-09]
10-Q	[2021-08-09]
10-Q	[2021-05-17]
S-1	[2021-03-25]
10-K	[2021-03-16]
S-1	[2020-11-19]
10-Q	[2020-10-22]
10-Q	[2020-08-13]
10-Q	[2020-05-13]
10-K	[2020-03-30]
10-Q	[2019-11-14]
10-Q	[2019-08-30]
S-1	[2019-06-28]

Advantage Solutions Inc. [ADVWW] Filings

Advantage Solutions Inc. [ADV] Filings