v3.25.3
Stockholder's Equity
 12 Months Ended
Dec. 31, 2024
Equity [Abstract]  
Stockholder's Equity Stockholders' Equity
Trust Common Shares
The Trust is authorized to issue 500,000,000 Trust common shares and the LLC is authorized to issue a corresponding number of LLC interests. The Company will, at all times, have the identical number of LLC interests outstanding as Trust shares. Each Trust share represents an undivided beneficial interest in the Trust, and each Trust share is entitled to one vote per share on any matter with respect to which members of the LLC are entitled to vote.
Private Placement
On December 15, 2023, the Company completed the sale of 3,550,000 common shares in a private placement to
Allspring Special Small Cap Value Fund for consideration per share equal to $21.18 per share, or an aggregate sale price of approximately $75.2 million. In connection with the issuance of the shares, we paid a commission equal to 1% of the aggregate sales price, or approximately $0.8 million. The sale of the common shares was made pursuant to a subscription agreement pursuant to which the buyer agreed not to dispose of the common shares for a period of six months following the date of the private placement.
At-The-Market Equity Offering Program - common shares
On September 5, 2024, the Company refreshed its at-the-market program for the common shares of the Trust, which was initially established on September 7, 2021, by filing a prospectus supplement pursuant to which the Company may, but has no obligation to, issue and sell up to $500 million common shares of the Trust in amounts and at times to be determined by the Company. Actual sales will depend on a variety of factors to be determined by us from time to time, including, market conditions, the trading price of Trust common shares and determinations by us regarding appropriate sources of funding.
In connection with refreshing the program, the Company entered into an Amended and Restated At Market Issuance Sales Agreement (the “Amended Common Sales Agreement”) with B. Riley Securities, Inc. ("B. Riley Securities"), Goldman Sachs & Co. LLC ("Goldman") and TD Securities (USA) LLC (each a “Common Sales Agent” and, collectively, the “Common Sales Agents”). The Amended Common Sales Agreement provides that the Company may offer and sell Trust common shares from time to time through or to the Common Sales Agents, as sales agent or principal, up to $500 million, in amounts and at times to be determined by the Company. Pursuant to the Amended Common Sales Agreement, the shares may be offered and sold through each Common Sales Agent, acting separately, in ordinary brokers’ transactions, to or through a market maker, on or through the New York Stock Exchange or any other market venue where the securities may be traded, in the over-the-counter market, in privately negotiated transactions, in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act or through a combination of any such methods of sale. The Amended Common Sales Agreement amended and restated in its entirety the At Market Issuance Sales Agreement (collectively with the Amended Common Sales Agreement, the “Common Sales Agreement”), dated September 7, 2021, between the Company, B. Riley Securities and Goldman, which provided for the offer and sale of Trust common shares up to $500 million under the terms substantially same as those under the Amended Common Sales Agreement.
During the year ended December 31, 2024, the Company sold 381,957 Trust common shares under the Sales Agreement. For the same period, the Company received total net proceeds of approximately $8.4 million from these sales, and incurred approximately $0.1 million in commissions payable to the Sales Agents.
During the year ended December 31, 2023, there were no sales of Trust common shares under the Sales Agreement as the at-the-market program is not active when the share repurchase program is active.
During the year ended December 31, 2022, the Company sold 3,464,844 Trust common shares under the Sales Agreement. For the same period, the Company received total net proceeds of approximately $84.0 million from these sales, and incurred approximately $1.5 million in commissions payable to the Sales Agents.
The Company incurred $0.6 million in total expenses related to the ATM program during the year ended December 31, 2024 and $0.2 million during both the years ended December 31, 2023 and 2022, respectively.
Please see "Note T – Subsequent Events” for additional information concerning the Amended Common Sales Agreement.
Share Repurchase Program
On October 15, 2024, the Board approved a share repurchase program authorizing the Company to repurchase, through December 31, 2024, subject to extension by the Board, up to $100 million of its outstanding common shares. The Company repurchased 416,320 shares for approximately $9.7 million during the year ended December 31, 2024. The share repurchase program expired on December 31, 2024.
In January 2023, the Board approved a share repurchase program authorizing the Company to repurchase, through December 31, 2023, up to $50 million of its outstanding common shares. The Company repurchased 482,400 shares for approximately $9.2 million during the year ended December 31, 2023. The share repurchase program expired on December 31, 2023.
Trust Preferred Shares
The Trust is authorized to issue up to 50,000,000 Trust preferred shares and the Company is authorized to issue a corresponding number of Trust Interests.
At-the-market equity offering program - preferred shares
On September 5, 2024, the Company refreshed its at-the-market program for certain preferred shares of the Trust, which was initially established in the first quarter of 2024, by filing a prospectus supplement pursuant to which the Company may, but has no obligation to, issue and sell up to $200 million of the Trust’s 7.250% Series A Preferred Shares (the “Series A Preferred Shares”), 7.875% Series B Preferred Shares (the “Series B Preferred Shares”), and 7.875% Series C Preferred Shares (the “Series C Preferred Shares” and together with the Series A Preferred Shares, the Series B Preferred Shares, and the Series C Preferred Shares, the “Preferred Shares”), each representing beneficial interests in the Trust. The at-the-market program for preferred shares of the Trust was initially established on March 20, 2024 and allowed for the issuance and sale of up to $100 million of the Trust’s preferred shares.
In connection with refreshing the program, the Company entered into an Amended and Restated At Market Issuance Sales Agreement (the “Amended Preferred Sales Agreement”) with B. Riley Securities, Inc. (the “Preferred Sales Agent”). The Amended Preferred Sales Agreement provides that the Company may offer and sell Trust preferred shares from time to time through or to the Preferred Sales Agent, as sales agent or principal, up to $200 million, in amounts and at times to be determined by the Company. Pursuant to the Amended Preferred Sales Agreement, the shares may be offered and sold through the Preferred Sales Agent in ordinary brokers’ transactions, to or through a market maker, on or through the New York Stock Exchange or any other market venue where the securities may be traded, in the over-the-counter market, in privately negotiated transactions, in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act or through a combination of any such methods of sale. The Amended Preferred Sales Agreement amended and restated in its entirety the At Market Issuance Sales Agreement (collectively with the Amended Preferred Sales Agreement, the “Preferred Sales Agreement”), dated March 20, 2024, between the Company and B. Riley Securities, which provided for the offer and sale of Trust preferred shares up to $100 million under the terms substantially same as those under the Amended Preferred Sales Agreement.
The following table reflects the activity in the preferred share ATM program during the year ended December 31, 2024 (in thousands, except share data):
Twelve Months Ended December 31, 2024
Number of Shares SoldNet ProceedsCommissions Paid
Series A Preferred Shares550,736 $12,832 $264 
Series B Preferred Shares2,192,267 51,481 1,062 
Series C Preferred Shares2,154,081 50,821 1,074 
     Total4,897,084 $115,134 $2,400 
The Company incurred approximately $0.3 million in total costs related to the preferred share ATM program during the year ended December 31, 2024.
Please see "Note T – Subsequent Events” for additional information concerning the Amended Preferred Sales Agreement.
Series C Preferred Shares
On November 20, 2019, the Trust issued 4,000,000 7.875% Series C Preferred Shares (the "Series C Preferred Shares") with a liquidation preference of $25.00 per share, and on December 2, 2019, the Trust issued 600,000 of the Series C Preferred Shares which were sold pursuant to an option to purchase additional shares by the underwriters. Total proceeds from the issuance of the Series C Preferred Shares were $115.0 million, or $111.0 million net of underwriters' discount and issuance costs. Distributions on the Series C Preferred Shares will be payable quarterly in arrears, when and as declared by the Board on January 30, April 30, July 30, and October 30 of each year, beginning on January 30, 2020, at a rate per annum of 7.875%. Distributions on the Series C Preferred Shares are cumulative and at December 31, 2024, $1.5 million of Series C distributions are accumulated and unpaid. Unless full cumulative distributions on the Series C Preferred Shares have been or contemporaneously are declared and set apart for payment of the Series C Preferred Shares for all past distribution periods, no distribution may be declared or paid for payment on the Trust common shares. The Series C Preferred Shares are not convertible into Trust common shares and have no voting rights, except in limited circumstances as provided for in the share designation for the Series C Preferred Shares. The Series C Preferred Shares may be redeemed at the
Company's option, in whole or in part, at any time after January 30, 2025, at a price of $25.00 per share, plus any accumulated and unpaid distributions (thereon whether authorized or declared) to, but excluding, the redemption date. Holders of Series C Preferred Shares will have no right to require the redemption of the Series C Preferred Shares and there is no maturity date.
If a certain tax redemption event occurs prior to January 30, 2025, the Series C Preferred Shares may be redeemed at the Company's option, in whole but not in part, upon at least 30 days’ notice, within 60 days of the occurrence of such tax redemption event, at a price of $25.25 per share, plus accumulated and unpaid distributions to, but excluding, the redemption date. If a certain fundamental change related to the Series C Preferred Shares or the Company occurs (whether before, on or after January 30, 2025), the Company will be required to repurchase the Series C Preferred Shares at a price of $25.25 per share, plus accumulated and unpaid distributions to, but excluding, the date of purchase. If (i) a fundamental change occurs and (ii) the Company does not give notice prior to the 31st day following the fundamental change to repurchase all the outstanding Series C Preferred Shares, the distribution rate per annum on the Series C Preferred Shares will increase by 5.00%, beginning on the 31st day following such fundamental change. Notwithstanding any requirement that the Company repurchase all of the outstanding Series C Preferred Shares, the increase in the distribution rate is the sole remedy to holders in the event the Company fails to do so, and following any such increase, the Company will be under no obligation to repurchase any Series C Preferred Shares.
Series B Preferred Shares
On March 13, 2018, the Trust issued 4,000,000 7.875% Series B Preferred Shares (the "Series B Preferred Shares") with a liquidation preference of $25.00 per share, for gross proceeds of $100.0 million, or $96.5 million net of underwriters' discount and issuance costs. Distributions on the Series B Preferred Shares are payable quarterly in arrears, when and as declared by the Board on January 30, April 30, July 30, and October 30 of each year, beginning on July 30, 2018, at a rate per annum of 7.875%. Holders of the Series B Preferred Shares are entitled to receive cumulative cash distributions (i) from and including the date of issuance to, but excluding, April 30, 2028 at a rate equal to 7.875% per annum and (ii) from and including April 30, 2028, at a floating
rate equal to the then applicable three-month LIBOR (or a successor rate) plus a spread of 4.985% per annum. Subsequent to April 30, 2028, the distribution rate will be reset quarterly. At December 31, 2024, $1.3 million of Series B distributions are accumulated and unpaid. Unless full cumulative distributions on the Series B Preferred Shares have been or contemporaneously are declared and set apart for payment of the Series B Preferred Shares for all past distribution periods, no distribution may be declared or paid for payment on the Trust common shares. The Series B Preferred Shares are not convertible into Trust common shares and have no voting rights, except in limited circumstances as provided for in the share designation for the Series B Preferred Shares. The Series B Preferred Shares may be redeemed at the Company's option, in whole or in part, at any time after April 30, 2028, at a price of $25.00 per share, plus any accumulated and unpaid distributions (thereon whether authorized or declared) to, but excluding, the redemption date. Holders of Series B Preferred Shares will have no right to require the redemption of the Series B Preferred Shares and there is no maturity date.
If a certain tax redemption event occurs prior to April 30, 2028, the Series B Preferred Shares may be redeemed at the Company's option, in whole but not in part, upon at least 30 days’ notice, within 60 days of the occurrence of such tax redemption event, at a price of $25.25 per share, plus accumulated and unpaid distributions to, but excluding, the redemption date. If a certain fundamental change related to the Series B Preferred Shares or the Company occurs (whether before, on or after April 30, 2028), the Company will be required to repurchase the Series B Preferred Shares at a price of $25.25 per share, plus accumulated and unpaid distributions to, but excluding, the date of purchase. If (i) a fundamental change occurs and (ii) the Company does not give notice prior to the 31st day following the fundamental change to repurchase all the outstanding Series B Preferred Shares, the distribution rate per annum on the Series B Preferred Shares will increase by 5.00%, beginning on the 31st day following such fundamental change. Notwithstanding any requirement that the Company repurchase all of the outstanding Series B Preferred Shares, the increase in the distribution rate is the sole remedy to holders in the event the Company fails to do so, and following any such increase, the Company will be under no obligation to repurchase any Series B Preferred Shares.
Series A Preferred Shares
On June 28, 2017, the Trust issued 4,000,000 7.250% Series A Preferred Shares (the "Series A Preferred Shares") with a liquidation preference of $25.00 per share, for gross proceeds of $100.0 million, or $96.4 million net of underwriters' discount and issuance costs. When, and if declared by the Board, distribution on the Series A Preferred Shares will be payable quarterly on January 30, April 30, July 30, and October 30 of each year, beginning
on October 30, 2017, at a rate per annum of 7.250%. Distributions on the Series A Preferred Shares are discretionary and non-cumulative. The Company has no obligation to pay distributions for a quarterly distribution period if the Board does not declare the distribution before the scheduled record of date for the period, whether or not distributions are paid for any subsequent distribution periods with respect to the Series A Preferred Shares, or the Trust common shares. If the Board does not declare a distribution for the Series A Preferred Shares for a quarterly distribution period, during the remainder of that quarterly distribution period the Company cannot declare or pay distributions on the Trust common shares. The Series A Preferred Shares are not convertible into Trust common shares and have no voting rights, except in limited circumstances as provided for in the share designation for the Series A Preferred Shares.
The Series A Preferred Shares may be redeemed at the Company's option, in whole or in part, at any time after July 30, 2022, at a price of $25.00 per share, plus declared and unpaid distribution to, but excluding, the redemption date, without payment of any undeclared distributions. Holders of Series A Preferred Shares will have no right to require the redemption of the Series A Preferred Shares and there is no maturity date.
If a certain tax redemption event occurs prior to July 30, 2022, the Series A Preferred Shares may be redeemed at the Company's option, in whole but not in part, upon at least 30 days’ notice, within 60 days of the occurrence of such tax redemption event, at a price of $25.25 per share, plus declared and unpaid distributions to, but excluding, the redemption date, without payment of any undeclared distributions. If a certain fundamental change related to the Series A Preferred Shares or the Company occurs (whether before, on or after July 30, 2022), the Company will be required to repurchase the Series A Preferred Shares at a price of $25.25 per share, plus declared and unpaid distributions to, but excluding, the date of purchase, without payment of any undeclared distributions. If (i) a fundamental change occurs and (ii) the Company does not give notice prior to the 31st day following the fundamental change to repurchase all the outstanding Series A Preferred Shares, the distribution rate per annum on the Series A Preferred Shares will increase by 5.00%, beginning on the 31st day following such fundamental change. Notwithstanding any requirement that the Company repurchase all of the outstanding Series A Preferred Shares, the increase in the distribution rate is the sole remedy to holders in the event the Company fails to do so, and following any such increase, the Company will be under no obligation to repurchase any Series A Preferred Shares.
Allocation Interests
The holders of the Allocation Interests (“Holders”), through Sostratus LLC, are entitled to receive distributions pursuant to a profit allocation formula upon the occurrence of certain events. The distributions of the profit allocation is paid upon the occurrence of the sale of a material amount of capital stock or assets of one of the Company’s businesses (“Sale Event”) or, at the option of the Holders, at each five year anniversary date of the acquisition of one of the Company’s businesses (“Holding Event”). The Company records distributions of the profit allocation to the Holders upon occurrence of a Sale Event or Holding Event as dividends declared on Allocation Interests to stockholders’ equity when they are approved by the Board.
The following is a summary of the profit allocation payments made to the Holders of the Allocation Interest for Sale Events and Holding Events during the years ended December 31, 2024 and 2023. There were no profit allocation payments during the year ended December 31, 2022.
Year ended December 31, 2024
•The sale of Ergobaby in December 2024 represented a Sale Event, however the calculation of the profit allocation payment resulted in a negative amount therefore no profit allocation payment was due to the Holders. The negative amount will offset future profit allocation payments due to the Holders.
•The sale of Marucci in November 2023 represented a Sale Event and the Board approved a distribution of $48.9 million in the first quarter of 2024 (refer to Note E - "Dispositions"). This distribution was paid to the Holders of the Allocation Interests in the first quarter of 2024.
Year ended December 31, 2023
•The sale of Advanced Circuits in February 2023 represented a Sale Event and the Board approved a distribution of $24.4 million paid to the Holders of the Allocation Interests in the second quarter of 2023 (refer to Note E - "Dispositions").
•The Board approved a distribution of $2.1 million paid to the Holders of the Allocation Interests related to various sale proceeds received related to previous Sale Events. These distributions were in the second
quarter of 2023.
Reconciliation of net income (loss) available to common shares of Holdings (as restated)
The following table reconciles net income from continuing operations attributable to Holdings to net income (loss) from continuing operations attributable to the common shares of Holdings:
Year ended December 31,
202420232022
(in thousands)
(As Restated)(As Restated)(As Restated)
Net income (loss) from continuing operations attributable to Holdings$(216,797)$(198,890)$(93,189)
Less: Distributions paid - Allocation Interests48,941 26,475 — 
Less: Distributions paid - Preferred Shares25,458 24,181 24,181 
Less: Accrued distributions - Preferred Shares4,319 2,869 2,869 
Net loss from continuing operations attributable to common shares of Holdings$(295,515)$(252,415)$(120,239)
Earnings per share (as restated)
Basic and diluted earnings per share for the fiscal year ended December 31, 2024, 2023 and 2022 is calculated as follows:
Year ended December 31,
202420232022
(in thousands, except per share data)(As Restated)(As Restated)(As Restated)
Net loss from continuing operations attributable to common shares of Holdings$(295,515)$(252,415)$(120,239)
Less: Effect of contribution based profit—Holding Event1,627 5,285 7,815 
Loss from continuing operations attributable to common shares$(297,142)$(257,700)$(128,054)
Income from discontinued operations attributable to Holdings$7,936 $307,537 $33,966 
Less: Effect of contribution based profit— — 2,558 
Income from discontinued operations of Holdings attributable to common shares$7,936 $307,537 $31,408 
Basic and diluted weighted average common shares of Holdings outstanding75,454 72,105 70,715 
Basic and fully diluted income (loss) per common share attributable to Holdings
Continuing operations$(3.94)$(3.57)$(1.81)
Discontinued operations0.11 4.27 0.44 
$(3.83)$0.70 $(1.37)
Distributions
The following table summarizes information related to our quarterly cash distributions on our Trust common and preferred shares:
PeriodCash Distribution per ShareTotal Cash DistributionsRecord DatePayment Date
(in thousands)
Trust Common Shares:
October 1, 2024 - December 31, 2024 (1)
$0.25 $18,809 January 16, 2025January 23, 2025
July 1, 2024 - September 30, 2024$0.25 $18,913 October 17, 2024October 24, 2024
April 1, 2024 - June 30, 2024$0.25 $18,913 July 18, 2024July 25, 2024
January 1, 2024 - March 31, 2024$0.25 $18,846 April 18, 2024April 25, 2024
October 1, 2023 - December 31, 2023 $0.25 $18,818 January 18, 2024January 25, 2024
July 1, 2023 - September 30, 2023$0.25 $17,955 October 19, 2023October 26, 2023
April 1, 2023 - June 30, 2023$0.25 $17,974 July 20, 2023July 27, 2023
January 1, 2023 - March 31, 2023$0.25 $17,987 April 20, 2023April 27, 2023
October 1, 2022 - December 31, 2022 $0.25 $18,051 January 19, 2023January 26, 2023
July 1, 2022 - September 30, 2022 $0.25 $18,051 October 20, 2022October 27, 2022
April 1, 2022 - June 30, 2022 $0.25 $17,931 July 21, 2022July 28, 2022
January 1, 2022 - March 31, 2022 $0.25 $17,510 April 21, 2022April 28, 2022
Series A Preferred Shares:
October 30, 2024 - January 29, 2025 (1)
$0.453125 $2,062 January 15, 2025January 30, 2025
July 30, 2024 - October 29, 2024$0.453125 $1,930 October 15, 2024October 30, 2024
April 30, 2024 - July 29, 2024$0.453125 $1,852 July 15, 2024July 30, 2024
January 30, 2024 - April 29, 2024$0.453125 $1,822 April 15, 2024April 30, 2024
October 30, 2023 - January 29, 2024 $0.453125 $1,813 January 15, 2024January 30, 2024
July 30, 2023 - October 29, 2023$0.453125 $1,813 October 15, 2023October 30, 2023
April 30, 2023 - July 29, 2023$0.453125 $1,813 July 15, 2023July 30, 2023
January 30, 2023 - April 29, 2023$0.453125 $1,813 April 15, 2023April 30, 2023
October 30, 2022 - January 29, 2023 $0.453125 $1,813 January 15, 2023January 30, 2023
July 30, 2022 - October 29, 2022$0.453125 $1,813 October 15, 2022October 30, 2022
April 30, 2022 - July 29, 2022$0.453125 $1,813 July 15, 2022July 30, 2022
January 30, 2022 - April 29, 2022$0.453125 $1,813 April 15, 2022April 30, 2022
Series B Preferred Shares:
October 30, 2024 - January 29, 2025 (1)
$0.4921875 $3,048 January 15, 2025January 30, 2025
July 30, 2024 - October 29, 2024$0.4921875 $2,347 October 15, 2024October 30, 2024
April 30, 2024 - July 29, 2024$0.4921875 $2,064 July 15, 2024July 30, 2024
January 30, 2024 - April 29, 2024$0.4921875 $1,983 April 15, 2024April 30, 2024
October 30, 2023 - January 29, 2024 $0.4921875 $1,969 January 15, 2024January 30, 2024
July 30, 2023 - October 29, 2023$0.4921875 $1,969 October 15, 2023October 30, 2023
April 30, 2023 - July 29, 2023$0.4921875 $1,969 July 15, 2023July 30, 2023
January 30, 2023 - April 29, 2023$0.4921875 $1,969 April 15, 2023April 30, 2023
October 30, 2022 - January 29, 2023 $0.4921875 $1,969 January 15, 2023January 30, 2023
July 30, 2022 - October 29, 2022$0.4921875 $1,969 October 15, 2022October 30, 2022
April 30, 2022 - July 29, 2022$0.4921875 $1,969 July 15, 2022July 30, 2022
January 30, 2022 - April 29, 2022$0.4921875 $1,969 April 15, 2022April 30, 2022
Series C Preferred Shares:
October 30, 2024 - January 29, 2025 (1)
$0.4921875 $3,324 January 15, 2025January 30, 2025
July 30, 2024 - October 29, 2024$0.4921875 $2,690 October 15, 2024October 30, 2024
April 30, 2024 - July 29, 2024$0.4921875 $2,430 July 15, 2024July 30, 2024
January 30, 2024 - April 29, 2024$0.4921875 $2,295 April 15, 2024April 30, 2024
October 30, 2023 - January 29, 2024 $0.4921875 $2,264 January 15, 2024January 30, 2024
July 30, 2023 - October 29, 2023$0.4921875 $2,264 October 15, 2023October 30, 2023
April 30, 2023 - July 29, 2023$0.4921875 $2,264 July 15, 2023July 30, 2023
January 30, 2023 - April 29, 2023$0.4921875 $2,264 April 15, 2023April 30, 2023
October 30, 2022 - January 29, 2023$0.4921875 $2,264 January 15, 2023January 30, 2023
July 30, 2022 - October 29, 2022$0.4921875 $2,264 October 15, 2022October 30, 2022
April 30, 2022 - July 29, 2022$0.4921875 $2,264 July 15, 2022July 30, 2022
January 30, 2022 - April 29, 2022$0.4921875 $2,264 April 15, 2022April 30, 2022
(1) This distribution was     declared on January 3, 2025.