Company Quick10K Filing
e.l.f. Beauty
Price18.27 EPS0
Shares51 P/E470
MCap931 P/FCF31
Net Debt85 EBIT2
TEV1,016 TEV/EBIT482
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-12-31 Filed 2021-02-04
10-Q 2020-09-30 Filed 2020-11-05
10-Q 2020-06-30 Filed 2020-08-06
10-K 2020-03-31 Filed 2020-05-28
10-Q 2019-12-31 Filed 2020-02-06
10-Q 2019-09-30 Filed 2019-11-07
10-Q 2019-06-30 Filed 2019-08-08
10-Q 2019-03-31 Filed 2019-05-09
10-K 2018-12-31 Filed 2019-02-28
10-Q 2018-09-30 Filed 2018-11-06
10-Q 2018-06-30 Filed 2018-08-09
10-Q 2018-03-31 Filed 2018-05-10
10-K 2017-12-31 Filed 2018-03-01
10-Q 2017-09-30 Filed 2017-11-09
10-Q 2017-06-30 Filed 2017-08-11
10-Q 2017-03-31 Filed 2017-05-12
10-K 2016-12-31 Filed 2017-03-15
10-Q 2016-09-30 Filed 2016-11-14
8-K 2021-02-03 Earnings, Exhibits
8-K 2020-11-12
8-K 2020-11-04
8-K 2020-08-27
8-K 2020-08-05
8-K 2020-06-30
8-K 2020-05-28
8-K 2020-05-21
8-K 2020-04-08
8-K 2020-03-30
8-K 2020-02-05
8-K 2019-12-03
8-K 2019-11-06
8-K 2019-08-07
8-K 2019-05-21
8-K 2019-05-08
8-K 2019-04-19
8-K 2019-03-20
8-K 2019-03-13
8-K 2019-02-26
8-K 2019-02-14
8-K 2019-01-10
8-K 2018-12-07
8-K 2018-11-05
8-K 2018-08-08
8-K 2018-06-12
8-K 2018-05-22
8-K 2018-05-09
8-K 2018-03-22
8-K 2018-02-27
8-K 2018-01-08

ELF 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Note 1 - Nature of Operations
Note 2 - Summary of Significant Accounting Policies
Note 3 - Acquisitions
Note 4 - Investment in Equity Securities
Note 5 - Goodwill and Intangible Assets
Note 6 - Accrued Expenses and Other Current Liabilities
Note 7 - Debt
Note 8 - Commitments and Contingencies
Note 9 - Stock - Based Compensation
Note 10 - Restructuring and Other Related Costs
Note 11 - Repurchase of Common Stock
Note 12 - Net Income per Share
Note 13 - Leases
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part II. Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Item 6. Exhibits.
EX-10.1 q321ex101firstamendmenttoo.htm
EX-31.1 q321exhibit311.htm
EX-31.2 q321exhibit312.htm
EX-32.1 q321exhibit321.htm

e.l.f. Beauty Earnings 2020-12-31

Balance SheetIncome StatementCash Flow
0.50.40.30.20.10.02015201620182020
Assets, Equity
0.10.10.0-0.0-0.1-0.12015201620182020
Rev, G Profit, Net Income
0.10.10.0-0.0-0.1-0.12015201620182020
Ops, Inv, Fin

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 December 31, 2020
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 001-37873
_______________________________________________________________ 
e.l.f. Beauty, Inc.
(Exact name of registrant as specified in its charter)
_______________________________________________________________
Delaware 46-4464131
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
570 10th Street
Oakland,
CA94607
 (Address of principal executive offices, including zip code)
_______________________________________________________________ 
(510)
778-7787
(Registrant’s telephone number, including area code)
_______________________________________________________________ 
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareELFNew 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, 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. (Check one):
Large accelerated filerAccelerated filer
Non- accelerated filerSmaller 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
The number of shares of the registrant’s common stock, par value $0.01 per share, outstanding as of January 29, 2021 was 51,240,997 shares.




e.l.f. Beauty, Inc.
Table of Contents

2



PART I. FINANCIAL INFORMATION
Item 1. Financial statements (unaudited)
e.l.f. Beauty, Inc. and subsidiaries
Condensed consolidated balance sheets
(unaudited)
(in thousands, except share and per share data)
December 31, 2020March 31, 2020December 31, 2019
Assets
Current assets:
Cash and cash equivalents$35,439 $46,167 $74,740 
Accounts receivable, net44,555 29,721 35,082 
Inventory, net68,567 46,209 48,382 
Prepaid expenses and other current assets11,728 10,263 8,054 
Total current assets160,289 132,360 166,258 
Property and equipment, net16,790 17,171 16,487 
Intangible assets, net96,317 102,410 91,893 
Goodwill171,620 171,321 157,264 
Investments2,875 2,875 2,875 
Other assets33,014 26,967 21,474 
Total assets$480,905 $453,104 $456,251 
Liabilities and stockholders' equity  
Current liabilities:  
Current portion of long-term debt and finance lease obligations$15,250 $12,568 $11,939 
Accounts payable20,108 12,390 19,589 
Accrued expenses and other current liabilities31,322 26,165 29,767 
Total current liabilities66,680 51,123 61,295 
Long-term debt and finance lease obligations114,421 126,088 129,236 
Deferred tax liabilities16,247 21,892 17,633 
Long-term operating lease obligations18,370 11,239 5,084 
Other long-term liabilities585 591 556 
Total liabilities216,303 210,933 213,804 
Commitments and contingencies (Note 8)
Stockholders' equity:  
Common stock, par value of $0.01 per share; 250,000,000 shares authorized as of December 31, 2020, March 31, 2020 and December 31, 2019; 51,240,997, 50,003,531 and 49,914,987 shares issued and outstanding as of December 31, 2020, March 31, 2020 and December 31, 2019, respectively
497 489 486 
Additional paid-in capital769,380 753,213 753,151 
Accumulated deficit(505,275)(511,531)(511,190)
Total stockholders' equity264,602 242,171 242,447 
Total liabilities and stockholders' equity$480,905 $453,104 $456,251 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3


e.l.f. Beauty, Inc. and subsidiaries
Condensed consolidated statements of operations and comprehensive income
(unaudited)
(in thousands, except share and per share data)
 Three months ended December 31,Nine months ended December 31,
 2020201920202019
Net sales$88,562 $80,760 $225,439 $208,139 
Cost of sales31,443 28,240 77,841 75,080 
Gross profit57,119 52,520 147,598 133,059 
Selling, general and administrative expenses50,828 39,632 136,330 110,131 
Restructuring expense (income) 8  (5,982)
Operating income 6,291 12,880 11,268 28,910 
Other (expense) income, net(677)(335)(1,566)602 
Interest expense, net(855)(1,560)(3,228)(4,920)
Income before provision for income taxes4,759 10,985 6,474 24,592 
Income tax provision(462)(2,983)(218)(6,367)
Net income $4,297 $8,002 $6,256 $18,225 
Comprehensive income$4,297 $8,002 $6,256 $18,225 
Net income per share:
Basic$0.09 $0.16 $0.13 $0.38 
Diluted$0.08 $0.16 $0.12 $0.36 
Weighted average shares outstanding:
Basic49,459,837 48,525,904 49,178,138 48,430,871 
Diluted52,335,821 50,966,550 51,675,651 50,741,492 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4


e.l.f. Beauty, Inc. and subsidiaries
Condensed consolidated statements of stockholders’ equity
(unaudited)
(in thousands, except share data)


 Common stockAdditional
paid-in
capital
Accumulated deficitTotal
stockholders'
equity
 SharesAmount
Balance as of March 31, 202048,874,742 $489 $753,213 $(511,531)$242,171 
Net income— — — 1,512 1,512 
Stock-based compensation— — 4,627 — 4,627 
Exercise of stock options and vesting of restricted stock175,561 2 396 — 398 
Balance as of June 30, 202049,050,303 $491 $758,236 $(510,019)$248,708 
Net income— — — 447 447 
Stock-based compensation— — 5,385 — 5,385 
Exercise of stock options and vesting of restricted stock263,726 3 110 — 113 
Balance as of September 30, 202049,314,029 $494 $763,731 $(509,572)$254,653 
Net income— — — 4,297 4,297 
Stock-based compensation— — 5,028 — 5,028 
Exercise of stock options and vesting of restricted stock349,282 3 621 — 624 
Balance as of December 31, 202049,663,311 $497 $769,380 $(505,275)$264,602 

5


 Common stockAdditional
paid-in
capital
Accumulated deficitTotal
stockholders'
equity
 SharesAmount
Balance as of March 31, 201948,288,720 $483 $744,147 $(529,415)$215,215 
Net income— — — 3,706 3,706 
Stock-based compensation— — 3,926 — 3,926 
Exercise of stock options and vesting of restricted stock179,225 2 238 — 240 
Repurchase of common stock(89,610)(1)(1,078)— (1,079)
Balance as of June 30, 201948,378,335 $484 $747,233 $(525,709)$222,008 
Net income— — — 6,517 6,517 
Stock-based compensation— — 4,004 — 4,004 
Exercise of stock options and vesting of restricted stock236,803 2 624 — 626 
Repurchase of common stock(89,026)(1)(1,466)— (1,467)
Balance as of September 30, 201948,526,112 $485 $750,395 $(519,192)$231,688 
Net income— — — 8,002 8,002 
Stock-based compensation— — 3,352 — 3,352 
Exercise of stock options and vesting of restricted stock93,182 2 406 — 408 
Repurchase of common stock(60,127)(1)(1,002)— (1,003)
Balance as of December 31, 201948,559,167 $486 $753,151 $(511,190)$242,447 
The accompanying notes are an integral part of these condensed consolidated financial statements.
6


e.l.f. Beauty, Inc. and subsidiaries
Condensed consolidated statements of cash flows
(unaudited)
(in thousands)
 Nine months ended December 31,
 20202019
Cash flows from operating activities:  
Net income $6,256 $18,225 
Adjustments to reconcile net income to net cash provided by operating activities:
 
Depreciation and amortization18,808 16,863 
Restructuring income (5,982)
Stock-based compensation expense15,040 11,282 
Amortization of debt issuance costs and discount on debt641 565 
Deferred income taxes(5,684)880 
Other, net54 410 
Changes in operating assets and liabilities:  
Accounts receivable(14,870)(3,027)
Inventories(22,351)(4,603)
Prepaid expenses and other assets(5,013)(3,260)
Accounts payable and accrued expenses11,421 17,628 
Other liabilities(2,352)(11,181)
Net cash provided by operating activities1,950 37,800 
Cash flows from investing activities:  
Purchase of property and equipment(3,958)(7,073)
Net cash used in investing activities(3,958)(7,073)
Cash flows from financing activities:  
Proceeds from revolving line of credit20,000  
Repayment of revolving line of credit(20,000) 
Repayment of long-term debt(8,663)(7,013)
Debt issuance costs paid(334) 
Repurchase of common stock (3,546)
Cash received from issuance of common stock882 1,272 
Other, net(605)(574)
Net cash used in financing activities(8,720)(9,861)
Net (decrease) increase in cash and cash equivalents(10,728)20,866 
Cash and cash equivalents - beginning of period46,167 53,874 
Cash and cash equivalents - end of period$35,439 $74,740 
The accompanying notes are an integral part of these condensed consolidated financial statements.
7

e.l.f. Beauty, Inc. and subsidiaries
Notes to condensed consolidated financial statements (unaudited)

Note 1—Nature of operations
e.l.f. Beauty, Inc. (“e.l.f. Beauty,” and together with its subsidiaries, the “Company” or “we”) was formed as a Delaware corporation on December 20, 2013. e.l.f. Beauty is organized as a holding company and operates through its subsidiaries, e.l.f. Cosmetics, Inc. and W3LL PEOPLE, Inc. The Company’s brands are e.l.f Cosmetics, W3LL PEOPLE and Keys Soulcare. e.l.f. Cosmetics makes the best of beauty accessible to every eye, lip and face by offering high-quality, prestige-inspired cosmetics and skincare products at an extraordinary value, 100% vegan and cruelty-free. W3LL PEOPLE is a clean beauty pioneer, raising the standard for high-performance, plant-powered, cruelty-free cosmetics since 2008. Keys Soulcare is a lifestyle beauty brand created with artist, producer, actress and New York Times best-selling author Alicia Keys. With an inclusive point of view, an authentic voice and a line of skin-loving, dermatologist-developed, cruelty-free products, Keys Soulcare aims to bring new meaning to beauty by honoring ritual in our daily life and practicing intention in every action.
Note 2—Summary of significant accounting policies
Basis of presentation
The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of the Company, these interim financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of December 31, 2020, March 31, 2020 and December 31, 2019, and its results of operations and stockholders' equity for the three and nine months ended December 31, 2020 and December 31, 2019 and its cash flows for the nine months ended December 31, 2020 and December 31, 2019. All intercompany balances and transactions have been eliminated in consolidation.
These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2020 (the “Annual Report”). Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year.
Change in filing status
The Company is currently an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012. Because the market value of the Company's common stock held by non-affiliates exceeded $700 million as of September 30, 2020, commencing April 1, 2021, the Company will be a large accelerated filer and, accordingly, will no longer qualify as an emerging growth company.
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Segment reporting
Operating segments are components of an enterprise for which separate financial information is available that is evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Utilizing these criteria, the Company manages its business on the basis of one operating segment and one reportable segment. It is impracticable for the Company to provide revenue by brand.
Significant accounting policies
Business combinations
The purchase price of a business acquisition is allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the business combination date. The excess of purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. Determining fair value of identifiable assets, particularly intangibles, and liabilities
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acquired also requires the Company to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset. Unanticipated events or circumstances may occur that could affect the accuracy of the Company's fair value estimates, and under different assumptions, the resulting valuations could be materially different.
Costs that are incurred to complete the business combination, such as legal and other professional fees, are not considered as a part of consideration transferred and are charged to selling, general and administrative expense as they are incurred.
The Company made no other material changes in the application of its significant accounting policies that were disclosed in Note 2, “Summary of significant accounting policies,” to the audited consolidated financial statements as of and for the fiscal year ended March 31, 2020 included in the Annual Report.
Revenue recognition
The Company distributes products both through national and international retailers, as well as direct-to-consumers through its e-commerce channel. The marketing and consumer engagement benefits that the direct-to-consumer channel provides is integral to the Company’s brand and product development strategy and drives sales across channels. As such, the Company views its two primary distribution channels as components of one integrated business, as opposed to discrete revenue streams.
The Company sells a variety of beauty products but does not consider them to be meaningfully different revenue streams given similarities in the nature of the products, the target consumer and the innovation and distribution processes.
The following table provides disaggregated revenue from contracts with customers by geographical market, as the nature, amount, timing and uncertainty of revenue and cash flows can differ between domestic and international customers (in thousands).
 Three months ended December 31,Nine months ended December 31,
Net sales by geographic region:2020201920202019
United States$79,454 $74,282 $201,006 $187,793 
International9,108 6,478 24,433 20,346 
Total net sales$88,562 $80,760 $225,439 $208,139 
As of December 31, 2020, other than accounts receivable, the Company had no material contract assets, contract liabilities or deferred contract costs recorded on its condensed consolidated balance sheet.
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Recent accounting pronouncements
The following table provides a brief description of recent accounting pronouncements that could have a material effect on the Company’s financial statements:
Recently adopted accounting standards
StandardDescriptionDate of adoptionEffect on the financial statements or other significant matters
ASU 2018-15, Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40)
The standard requires customers in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets or expense as incurred. Certain implementation costs incurred during the application development stage would be deferred and capitalized (e.g., costs of integration with on-premises software, coding, configuration, customization). Other costs incurred during the preliminary project and post-implementation stages would be expensed (e.g., planning the project, training, maintenance after implementation, data conversion). The amendments in the ASU can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption.April 1, 2020The Company adopted ASU 2018-15 prospectively, and the adoption of the standard did not have a material impact on the Company’s consolidated financial statements.
Note 3—Acquisitions
On February 24, 2020, the Company, through its wholly owned subsidiary, e.l.f. Cosmetics, Inc., completed its acquisition of W3LL People, Inc., a Santa Fe, New Mexico-based privately held, clean beauty company with a mission to create premium quality clean products that help people be well, look well and do well. The purchase price of $25.9 million was in all cash and the total consideration in connection with the acquisition is subject to adjustment based on (i) purchase price adjustment provisions and (ii) indemnification obligations of W3LL People, Inc.'s stockholders after the closing of the acquisition.
The acquisition has been accounted for as a business combination under the acquisition method and, accordingly, the total purchase price is allocated to the tangible and intangible assets acquired and the liabilities assumed based on their respective fair values on the acquisition date. The purchase price allocation and calculation of residual goodwill was finalized during the quarter ended September 30, 2020. W3LL People, Inc.'s results of operations have been included in the Company's consolidated financial statements from the date of acquisition.

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The following table presents the purchase price allocation recorded in the Company's consolidated balance sheet on acquisition date and upon finalization during the quarter ended September 30, 2020. An incremental adjustment of $0.3 million was recorded to increase contract liabilities and increase goodwill. The adjustment reflects finalization of purchase accounting for facts and circumstances that existed upon the acquisition date as follows (in thousands):
Net tangible assets $1,978 
Goodwill(1)
14,357 
Intangible assets 12,340 
Net deferred tax liability(2,752)
Total purchase price consideration $25,923 
(1) The goodwill represents the excess value over both tangible and intangible assets acquired and liabilities assumed. The goodwill recognized in this transaction is primarily attributable to expected operational synergies. None of the goodwill is expected to be deductible for tax purposes.
Intangible assets
Fair ValueEstimated Useful Life
(in thousands)(in years)
Customer relationships – retailers$8,800 10
Customer relationships – e-commerce40 3
Trademarks3,500 10
Total identified intangible assets$12,340 
Note 4—Investment in equity securities
On April 14, 2017, the Company invested $2.9 million in a social media analytics company, which is included in investments on its condensed consolidated balance sheets. The Company has elected the measurement alternative for equity investments that do not have readily determinable fair values. The Company did not record an impairment charge on its investment during the three and nine months ended December 31, 2020 and December 31, 2019, as any identified events or changes in circumstances did not result in an indicator for impairment. Further, there were no observable price changes in orderly transactions for the identical or a similar investment of the same issuer during the three and nine months ended December 31, 2020.
Note 5—Goodwill and intangible assets
Information regarding the Company’s goodwill and intangible assets as of December 31, 2020 is as follows (in thousands):
 Estimated useful lifeGross carrying amountAccumulated amortizationNet carrying amount
Customer relationships – retailers10 years$77,600 $(48,320)$29,280 
Customer relationships – e-commerce3 years3,940 (3,911)29 
Trademarks10 years3,500 (292)3,208 
Total finite-lived intangibles85,040 (52,523)32,517 
TrademarksIndefinite63,800 — 63,800 
Goodwill171,620  171,620 
Total goodwill and other intangibles$320,460 $(52,523)$267,937 
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Information regarding the Company’s goodwill and intangible assets as of March 31, 2020 is as follows (in thousands):
 Estimated useful lifeGross carrying amountAccumulated amortizationNet carrying amount
Customer relationships – retailers10 years$77,600 $(42,500)$35,100 
Customer relationships – e-commerce3 years3,940 (3,901)39 
Trademarks10 years3,500 (29)3,471 
Total finite-lived intangibles85,040 (46,430)38,610 
TrademarksIndefinite63,800 — 63,800 
Goodwill171,321  171,321 
Total goodwill and other intangibles$320,161 $(46,430)$273,731 
Information regarding the Company’s goodwill and intangible assets as of December 31, 2019 is as follows (in thousands):
 Estimated useful lifeGross carrying amountAccumulated amortizationNet carrying amount
Customer relationships – retailers10 years$68,800 $(40,707)$28,093 
Customer relationships – e-commerce3 years3,900 (3,900) 
Total finite-lived intangibles72,700 (44,607)28,093 
TrademarksIndefinite63,800 — 63,800 
Goodwill157,264  157,264 
Total goodwill and other intangibles$293,764 $(44,607)$249,157 
Amortization expense on finite-lived intangible assets was $2.0 million and $6.1 million in the three and nine months ended December 31, 2020, respectively, and $1.7 million and $5.2 million in the three and nine months ended December 31, 2019, respectively. Certain trademark assets have been classified as indefinite-lived intangible assets and accordingly, are not subject to amortization. There were no impairments of goodwill or intangible assets recorded in the three and nine months ended December 31, 2020 and December 31, 2019.
An incremental adjustment $0.3 million of goodwill was recorded in the quarter ended September 30, 2020 as the result of finalization of purchase accounting from the W3LL PEOPLE acquisition.
The estimated future amortization expense related to finite-lived intangible assets, assuming no impairment as of December 31, 2020 is as follows (in thousands):
Remainder of Fiscal 2021$2,031 
20228,123 
20238,122 
20246,963 
20251,230 
Thereafter6,048 
Total$32,517 

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Note 6—Accrued expenses and other current liabilities
Accrued expenses and other current liabilities as of December 31, 2020, March 31, 2020 and December 31, 2019 consisted of the following (in thousands):
 December 31, 2020March 31, 2020December 31, 2019
Accrued expenses$14,815 $12,518 $15,489 
Current portion of operating lease liabilities3,517 3,083 2,916 
Accrued compensation9,492 9,542 7,134 
Other current liabilities3,498 1,022 4,228 
Accrued expenses and other current liabilities$31,322 $26,165 $29,767 
Note 7—Debt
The Company’s outstanding debt as of December 31, 2020, March 31, 2020 and December 31, 2019 consisted of the following (in thousands):
 December 31, 2020March 31, 2020December 31, 2019
Term loan(1)
$127,566 $135,853 $138,199 
Finance lease obligations2,406 3,012 3,209 
Total debt(2)
129,972 138,865 141,408 
Less: debt issuance costs(301)(209)(233)
Total debt, net of issuance costs129,671 138,656 141,175 
Less: current portion(15,250)(12,568)(11,939)
Long-term portion of debt$114,421 $126,088 $129,236 
(1) See Note 10, “Debt,” to the consolidated financial statements included in the Annual Report for details regarding the Senior Secured Credit Agreement (the "Credit Agreement”). As of December 31, 2020, the Company was in compliance with all applicable financial covenants under the Credit Agreement.
(2) The gross carrying amounts of the Company’s long-term debt, before reduction of the debt issuance costs, and finance lease obligations approximate their fair values, based on Level 2 inputs (quoted prices for similar assets and liabilities in active markets or inputs that are observable), as the stated rates approximate market rates for loans with similar terms. The Company did not transfer any liabilities measured at fair value on a recurring basis to or from Level 2 for any of the periods presented.
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April 2020 Credit Agreement Amendment
On April 8, 2020, the Company entered into a Third Amendment to Credit Agreement (the "Amendment"), amending the Credit Agreement to modify the Company’s quarterly maintenance covenants, and to add interest rates with respect to borrowings associated with the added increased maximum permitted total net leverage ratios.
Pursuant to the Amendment, borrowings under both the $50.0 million revolving line of credit (the “Revolving Credit Facility”) and the $165.0 million term loan (the “Term Loan Facility”) bear interest, at the Company's option, at either a rate per annum equal to (i) a rate per annum equal to an adjusted LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for the applicable interest period (subject to a minimum floor of 0%) plus an applicable margin ranging from 1.50% to 3.25% based on the Company's consolidated total net leverage ratio or (ii) a floating base rate plus an applicable margin ranging from 0.50% to 2.25% based on the Company's consolidated total net leverage ratio. The interest rate as of December 31, 2020 for the Term Loan Facility was approximately 1.8%.

All amounts under the Revolving Credit Facility are available for draw until the maturity date on August 25, 2022. The Revolving Credit Facility is collateralized by substantially all of the Company's assets and requires payment of an unused fee ranging from 0.35% to 0.25% (based on the Company's consolidated total net leverage ratio) times the average daily amount of unutilized commitments under the Revolving Credit Facility. The Revolving Credit Facility also provides for sub-facilities in the form of a $7.0 million letter of credit and a $5.0 million swing line loan; however, all amounts under the Revolving Credit Facility cannot exceed $50.0 million. The unused balance of the Revolving Credit Facility as of December 31, 2020 was $49.8 million.
Note 8 —Commitments and contingencies
Legal contingencies
From time to time, the Company is involved in legal proceedings, claims and litigation arising in the ordinary course of business. The Company is not currently a party to any matters that management expects will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.
Note 9—Stock-based compensation
Service-based vesting stock options
The following table summarizes the activity for options that vest solely based upon the satisfaction of a service condition for the nine months ended December 31, 2020:
 Shares subject to options
outstanding
Weighted-average exercise priceWeighted-average remaining
contractual life
(in years)
Aggregate intrinsic
values
(in thousands)
Balance as of March 31, 20201,999,553 $13.17   
Exercised(256,347)3.73   
Canceled or forfeited(19,816)24.29   
Balance as of December 31, 20201,723,390 $14.45 6.3$18,602 
Exercisable, December 31, 20201,234,544 $14.33 5.7$13,475 
The aggregate intrinsic value is calculated as the difference between the exercise price of the options and the Company's closing stock price of $25.19, as reported on the New York Stock Exchange on December 31, 2020.
The Company recognized stock-based compensation cost related to service-based vesting options of $0.3 million and $1.4 million in the three and nine months ended December 31, 2020, respectively, and $0.5 million and $1.7 million in the three and nine months ended December 31, 2019, respectively. As of December 31, 2020, there was $1.8 million of total unrecognized stock-based compensation cost related to unvested service-based stock options, which is expected to be recognized over the remaining weighted-average period of 2.0 years. All stock-based compensation cost is recorded in selling, general and administrative expenses.
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Performance-based and market-based vesting stock options
The following table summarizes the activity for stock options that vest based upon the satisfaction of performance- or market-based vesting conditions for the nine months ended December 31, 2020:
 
Shares subject to options
outstanding
Weighted-average exercise priceWeighted-average remaining
contractual life
(in years)
Aggregate intrinsic
values
(in thousands)
Balance as of March 31, 20201,252,932 $7.97   
Exercised(96,400)1.84   
Balance as of December 31, 20201,156,532 $8.44 4.3$19,863 
Exercisable, December 31, 2020856,532 $2.00 3.6$19,863 
The aggregate intrinsic value is calculated as the difference between the exercise price of the options and the Company's closing stock price of $25.19, as reported on the New York Stock Exchange on December 31, 2020.
As of December 31, 2020 and December 31, 2019, there was no unrecognized compensation cost related to stock options with performance-based and market-based vesting conditions.

Restricted stock and RSUs
The following table summarizes the activities for restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) for the nine months ended December 31, 2020:
 RSUs and shares of restricted stock outstandingWeighted-average grant date fair value
Balance as of March 31, 20202,311,768 $12.86 
Granted 1,188,620 17.33 
Vested(435,822)13.57 
Canceled or forfeited(159,362)14.26 
Balance as of December 31, 20202,905,204 $14.51 
As of December 31, 2020, there were 1,577,686 unvested shares subject to RSAs outstanding.
The Company recognized stock-based compensation cost related to RSAs and RSUs of $4.7 million and $13.6 million in the three and nine months ended December 31, 2020, respectively, and $2.8 million and $9.6 million in the three and nine months ended December 31, 2019, respectively. As of December 31, 2020, there was $29.7 million of total unrecognized stock-based compensation cost related to unvested RSAs and RSUs, which is expected to be recognized over a weighted-average period of 2.2 years.
Note 10—Restructuring and other related costs
In February 2019, the Company closed all 22 e.l.f. retail stores and implemented a workforce reduction of employees that operated and managed the e.l.f. retail stores (the “Restructuring Plan”).
The following table presents the restructuring (income) expenses incurred for the three and nine months ended December 31, 2020 and December 31, 2019, respectively (in thousands) in connection with the Restructuring Plan:
Three months ended December 31,Nine months ended December 31,
2020201920202019
Gain from extinguishment of lease liabilities$ $ $ $(7,733)
Other costs, including other asset write-offs 8  1,751 
Total $ $8 $ $(5,982)
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The gain from extinguishment of lease liabilities represents the difference between the aggregate operating lease liability and the aggregate cash payment incurred to extinguish such liability. The majority of the other costs incurred during the three and nine months ended December 31, 2019 are legal fees related to these extinguishments. As of March 31, 2020, the Company had settled all outstanding lease liabilities related to its e.l.f. retail store closures and does not expect to incur additional costs associated with the Restructuring Plan. Accordingly, there were no restructuring expenses incurred during the three and nine months ended December 31, 2020.
Liabilities related to the Restructuring Plan are reported within accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets. There were no costs incurred or cash disbursements made during the three and nine months ended December 31, 2020. The following table presents a roll-forward of the Company's restructuring liability for the three and nine months ended December 31, 2019 (in thousands):
Employee severance and related expensesOther costsTotal
September 30, 2019$ $837 $837 
    Costs incurred 8 8 
    Cash disbursements (6)(6)
    Other adjustments (2)(2)
December 31, 2019$ $837 $837 
Employee severance and related expensesOther costsTotal
March 31, 2019$96 $675 $771 
    Costs incurred(22)1,773 1,751 
    Cash disbursements(74)(1,472)(1,546)
    Other adjustments (139)(139)
December 31, 2019$ $837 $837 
Outstanding lease liabilities are not included in the table above, as those liabilities were established upon adoption of ASC 842, not in connection with the Restructuring Plan.
Note 11—Repurchase of common stock
On May 8, 2019, the Company announced that its board of directors authorized a share repurchase program to acquire up to $25.0 million of the Company’s common stock (the “Share Repurchase Program”). Purchases under the Share Repurchase Program may be made from time to time through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades, accelerated share repurchase transactions, or by any combination of such methods. The timing and amount of any repurchases pursuant to the Share Repurchase Program will be determined based on market conditions, share price and other factors. The Share Repurchase Program does not require the Company to repurchase any specific number of shares of its common stock, and may be modified, suspended or terminated at any time without notice. There is no guarantee that any additional shares will be purchased under the Share Repurchase Program and such shares are intended to be retired after purchase.
The Company did not repurchase any shares during the three and nine months ended December 31, 2020. A total of $17.1 million remains available for purchase under the Share Repurchase Program as of December 31, 2020.
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Note 12—Net income per share
The Company computes basic net income per share using the weighted-average number of shares of common stock outstanding. Diluted net income per share amounts are calculated using the treasury stock method for equity-based compensation awards. The following is a reconciliation of the numerator and denominator in the basic and diluted net income per common share computations (in thousands, except share and per share data):
 Three months ended December 31,Nine months ended December 31,
 2020201920202019
Numerator:    
Net income $4,297 $8,002 $6,256 $18,225 
Denominator:    
Weighted-average common shares outstanding – basic49,459,837 48,525,904 49,178,138 48,430,871 
Dilutive common equivalent shares from equity awards2,875,984 2,440,646 2,497,513 2,310,621 
Weighted-average common shares outstanding –diluted52,335,821 50,966,550 51,675,651 50,741,492 
Net income per share:    
Basic$0.09 $0.16 $0.13 $0.38 
Diluted$0.08 $0.16 $