UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________

FORM 10-Q

_________________________


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~December 3031, 2022


o			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: 001-40702

_________________________

Weber Inc.

(Exact name of registrant as specified in its charter)

_________________________


DE (State or other jurisdiction of incorporation or organization)			61-1999408 (I.R.S. Employer Identification No.)
1415 S. Roselle Road Palatine, Illinois (Address of principal executive offices)			60067 (Zip Code)

(847) 934-5700

(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, par value $0.001 per share

WEBR

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. x Yes o 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). x Yes o 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 o Accelerated filer ox Non-accelerated filer xo Smaller reporting company o Emerging growth company o

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). o Yes x No

Class A Common Stock outstanding as of ~~July~~January 31, ~~2022~~2023 – 53,~~073~~747,~~680~~199 shares

Class B Common Stock outstanding as of ~~July~~January 31, ~~2022~~2023 – ~~234~~235,~~506~~307,~~736~~751 shares

Table of Contents

WEBER INC.

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION	4
Item 1.	Financial Statements (unaudited)	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive (Loss) Income	6
	Condensed Consolidated Statements of Equity (Deficit)	7
	Condensed Consolidated Statements of Cash Flows	98
	Notes to Unaudited Condensed Consolidated Financial Statements	119
	1. General	119
	2. Acquisitions	13
	2. Goodwill and Other Intangibles	11
	3. Goodwill and Other Intangibles	16
	3. Property, Equipment and Leasehold Improvements	12
	4. Property, Equipment and Leasehold Improvements	17
	4. Restructuring Costs	12
	5. Debt	1813
	6. Derivative Instruments	1915
	7. Income Taxes	2117
	8. Commitments and Contingencies	2217
	9. Related Parties	2318
	10. Fair Value of Financial Instruments	2419
	11. Stock-Based Compensation	2620
	12. Segments	2922
	13. Noncontrolling Interests	3224
	14. Earnings (Loss) Per Share	3224
	15. Member Notes	33
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
	16. Subsequent Events	34
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	36
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 4.	Controls and Procedures	36
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	52
PART II	OTHER INFORMATION	38
Item 4.	Controls and Procedures	52
Item 1.	Legal Proceedings	38
PART II	OTHER INFORMATION	53
Item 1A.	Risk Factors	38
Item 1.	Legal Proceedings	53
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 1A.	Risk Factors	53
Item 6.	Exhibits	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
Signatures		41
Item 5.	Other Events	54
Item 6.	Exhibits	55
Signatures		56

Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

We have made statements in the sections titled “Quantitative and Qualitative Disclosures About Market Risk” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in other sections of this Quarterly Report on Form 10-Q that are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those factors discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K ~~and in our Quarterly Reports on Form 10-Q~~.

Our future results could be affected by a variety of other factors, including uncertainty of the magnitude, duration, geographic reach, impact on the global economy and current and potential travel restrictions of the COVID-19 outbreak, the current, and uncertain future, impact of the COVID-19 outbreak on our business, growth, reputation, prospects, financial condition, operating results (including components of our financial results), and cash flows and liquidity, risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects,; the ability to realize the anticipated benefits and synergies from business acquisitions in the amounts and at the times expected,; the impact of competitive conditions,; the effectiveness of pricing, advertising, and promotional programs; the success of innovation, renovation and new product introductions; the recoverability of the carrying value of goodwill and other intangibles,; the success of productivity improvements and business transitions,; commodity and energy prices, transportation costs, labor costs, disruptions or inefficiencies in supply chain,; the availability of and interest rates on short-term and long-term financing,; the levels of spending on systems initiatives, properties, business opportunities, integration of acquired businesses, and other general and administrative costs,; changes in consumer behavior and preferences,; the effect of U.S. and foreign economic conditions on items such as interest rates, statutory tax rates, currency conversion and availability,; legal and regulatory factors including the impact of any product recalls; the uncertainty of the magnitude, duration, geographic reach, impact on the global economy and potential travel restrictions of the COVID-19 pandemic, including the impact on our business, growth, reputation, prospects, financial condition, operating results (including components of our financial results), and cash flows and liquidity; and business disruption or other losses from war, pandemic, terrorist acts or political unrest.

The risk factors discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K ~~and in our Quarterly Reports on Form 10-Q~~ could cause our results to differ materially from those expressed in the forward-looking statements made in this Quarterly Report on Form 10-Q. There also may be other risks that are currently unknown to us or that we are unable to predict at this time.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Forward-looking statements speak only as of the date they were made, and we are under no duty to update any of these forward-looking statements after the date of this Quarterly Report on Form 10-Q to conform our prior statements to actual results or revised expectations.

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Weber Inc.

Condensed Consolidated Balance Sheets

(dollars in thousands, except share data)

	June 30,2022		September 30,2021
	December 31,2022		September 30,2022
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	4037,~~846~~702	$	~~107~~24,~~517~~568
Accounts receivable, less allowances (1)	279,606		138,683
Accounts receivable, less allowances	89,203		54,667
Inventories, net	~~396~~391,~~669~~379		~~332~~339,~~621~~503
Prepaid expenses and other current assets	82103,~~954~~375		6891,~~236~~009
Total current assets	~~800~~621,~~075~~659		~~647~~509,~~057~~747
Property, equipment and leasehold improvements, net	~~197~~215,~~539~~757		~~162~~211,~~829~~256
Operating lease right-of-use assets (2)	79,155		66,962
Operating lease right-of-use assets	73,339		71,879
Other long-term assets	5367,~~386~~681		6172,~~454~~732
Trademarks, net	~~355~~353,~~282~~588		~~357~~354,~~821~~435
Other intangible assets, net	~~129~~121,~~514~~420		~~144~~123,~~257~~783
Goodwill	106,~~785~~864		~~110~~104,~~612~~142
Total assets	$	1,~~721~~560,~~736~~308	$	1,~~550~~447,~~992~~974
Liabilities and equity (deficit)
Current liabilities:
Trade accounts payable	$	~~379~~167,~~689~~823	$	~~330~~158,~~669~~298
Accrued expenses (3)	123,200		150,610
Accrued expenses	147,118		122,656
Income taxes payable	49,~~813~~326		45,~~823~~788
Current portion of long-term debt and other borrowings	63293,000		12186,~~500~~910
Current portion of long-term financing obligation	654		592
Short-term debt — related party	4,600		—
Total current liabilities	571,356		499,194
Current portion of long-term financing obligation	696		675
Long-term debt, less current portion	1,215,728		984,818
Total current liabilities	622,563		474,327
Long-term financing obligation, less current portion	37,891		38,394
Long-term debt, less current portion	1,210,004		1,213,235
Non-current operating lease liabilities (4)	66,888		55,329
Long-term debt — related party	60,789		—
Tax Receivable Agreement liability	—		9,226
Long-term financing obligation, less current portion	37,532		37,719
Other long-term liabilities	72,877		85,376
Non-current operating lease liabilities	61,670		60,544
Total liabilities	1,964,740		1,672,337
Other long-term liabilities	72,119		74,085
Total liabilities	2,064,677		1,859,910
Commitments and Contingencies (Note 8)
Class A Common Stock, $0.001 par value - 3,000,000,000 shares authorized, 52,899,303 and 52,533,388 shares issued and outstanding as of June 30, 2022 and September 30, 2021, respectively	53		53
Class A Common Stock, $0.001 par value - 3,000,000,000 shares authorized, 53,738,392 and 53,102,598 shares issued and outstanding as of December 31, 2022 and September 30, 2022, respectively	54		53
Class B Common Stock, $0.00001 par value - 1,500,000,000 shares authorized, 234,559,825 and 233,572,370 shares issued and outstanding as of June 30, 2022 and September 30, 2021, respectively	2		2
Class B Common Stock, $0.00001 par value - 1,500,000,000 shares authorized, 234,476,377 and 234,506,636 shares issued and outstanding as of December 31, 2022 and September 30, 2022, respectively	2		2
Preferred Stock, $0.0001 par value - 1,500,000,000 shares authorized, zero shares issued and outstanding as of both June 30, 2022 and September 30, 2021	—		—
Preferred Stock, $0.0001 par value - 1,500,000,000 shares authorized, zero shares issued and outstanding as of both December 31, 2022 and September 30, 2022	—		—
Additional paid-in capital	1815,~~715~~807		615,~~109~~735
Accumulated other comprehensive loss	(52,~~155~~072)		(94,~~280~~762)
Retained earnings (deficit)	(59115,~~485~~041)		(787,~~646~~851)
Total Weber Inc. equity (deficit)	(45101,~~870~~250)		(1076,~~762~~823)
Noncontrolling interests	(~~197~~403,~~134~~119)		(~~110~~335,~~583~~113)
Total equity (deficit)	(~~243~~504,~~004~~369)		(~~121~~411,~~345~~936)
Total liabilities and equity (deficit)	$	1,~~721~~560,~~736~~308	$	1,~~550~~447,~~992~~974

_____________

(1)Includes related party royalty receivables of $171 and $119 at June 30, 2022 and September 30, 2021, respectively (see Note 9).

(2)Includes related party operating lease assets of $1,256 and $1,629 at June 30, 2022 and September 30, 2021, respectively (see Note 9).

(3)Includes related party operating lease liabilities of $387 and $431 at June 30, 2022 and September 30, 2021, respectively (see Note 9).

(4)Includes related party operating lease liabilities of $898 and $1,198 at June 30, 2022 and September 30, 2021, respectively (see Note 9).

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

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Weber Inc.

Condensed Consolidated Statements of Operations

(dollars in thousands, except share and per share data)

(unaudited)

	Three Months Ended June 30,				Nine Months Ended June 30,
	Three Months Ended December 31,
	2022		2021		~~2022~~		~~2021~~
Net sales (1)	$	527,936	$	668,867	$	1,418,371	$	1,632,176
Net sales	$	164,899	$	283,141
Cost of goods sold (2)	374,291		369,776		992,196		912,558
Cost of goods sold	128,951		219,128
Gross profit	~~153~~35,~~645~~948		~~299~~64,~~091~~013		~~426,175~~		~~719,618~~
Operating expenses:
Selling, general and administrative (3)(4)(5)	173,494		257,758		487,515		555,744
Selling, general and administrative	122,381		148,084
Amortization of intangible assets	5,~~154~~073		5,~~226~~174		~~15,495~~		~~12,090~~
Gain on disposal of assets held for sale	—		—		—		(5,185)
Restructuring costs	(1,166)		—
(Loss) income from operations	(25,003)		36,107		(76,835)		156,969
Loss from operations	(90,340)		(89,245)
Foreign currency loss (gain)	16,766		(3,758)		20,983		(3,772)
Foreign currency (gain) loss	(11,041)		164
Interest expense, net (6)	19,267		18,031		51,813		49,780
Interest expense, net	29,519		15,531
Gain on Tax Receivable Agreement liability remeasurement	(9,226)		—		(9,226)		—
Loss before taxes	(108,818)		(104,940)
Loss from early extinguishment of debt	—		—		—		5,448
Income tax expense (benefit)	5,073		(30,387)
Other expense	68		—		502		—
Net loss	(113,891)		(74,553)
(Loss) income before taxes	(51,878)		21,834		(140,907)		105,513
Net loss attributable to noncontrolling interests	(86,701)		(91,330)
Income tax expense	121		4,009		36,958		19,398
Net (loss) income attributable to Weber Inc.	$	(27,190)	$	16,777
Gain from investments in unconsolidated affiliates	—		—		—		(5,505)
Earnings (loss) per share of Class A common stock
Net (loss) income	(51,999)		17,825		(177,865)		91,620
Basic	$	(0.50)	$	0.31
Net loss attributable to noncontrolling interests	(44,505)		—		(132,698)		—
Diluted	$	(0.50)	$	(0.19)
Net (loss) income attributable to Weber Inc.	$	(7,494)	$	17,825	$	(45,167)	$	91,620
Weighted average shares outstanding
Earnings (loss) per share of Class A common stock
Basic	54,604,105		53,309,932
Basic	$	(0.14)	N/A		$	(0.84)	N/A
Diluted	54,604,105		287,955,151
Diluted	$	(0.41)	N/A		$	(0.84)	N/A
Weighted average shares outstanding
Basic	53,875,489		N/A		53,499,650		N/A
Diluted	290,170,910		N/A		53,499,650		N/A

_____________

(1)Includes related party royalty revenue of $106 and $128 for the three months ended June 30, 2022 and 2021, respectively, and $379 and $75 for the nine months ended June 30, 2022 and 2021, respectively (see Note 9).

(2)Includes related party rental expense of zero and $213 for the three months ended June 30, 2022 and 2021, respectively, and zero and $605 for the nine months ended June 30, 2022 and 2021, respectively (see Note 9).

(3)Includes related party rental expense of $176 and $68 for the three months ended June 30, 2022 and 2021, respectively, and $513 and $196 for the nine months ended June 30, 2022 and 2021, respectively (see Note 9).

(4)Includes related party royalty expense of zero for both the three months ended June 30, 2022 and 2021 and zero and $268 for the nine months ended June 30, 2022 and 2021, respectively (see Note 9).

(5)Includes related party compensation expense of zero for both the three months ended June 30, 2022 and 2021 and $420 and zero for the nine months ended June 30, 2022 and 2021, respectively (see Note 9).

(6)Includes related party interest income of zero and $11 for the for the three months ended June 30, 2022 and 2021, respectively, and $3 and $40 for the nine months ended June 30, 2022 and 2021, respectively (see Note 9).

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

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Weber Inc.

Condensed Consolidated Statements of Comprehensive (Loss) Income

(dollars in thousands)

(unaudited)

	Three Months Ended June 30,				Nine Months Ended June 30,
	Three Months Ended December 31,
	2022		2021		~~2022~~		~~2021~~
Net (loss) income	$	(51,999)	$	17,825	$	(177,865)	$	91,620
Net loss	$	(113,891)	$	(74,553)
Other comprehensive (loss) income:
Foreign currency translation adjustments, net of income tax expense of $324, zero, zero and zero	(15,867)		577		(23,074)		2,941
Foreign currency translation adjustments, net of income tax benefit of zero and $135	17,261		(3,006)
Gain (loss) on derivative instruments, net of income tax benefit of $1,445, zero, zero and zero	13,287		(4,273)		45,523		19,320
(Loss) gain on derivative instruments, net of income tax expense of zero and $238	(2,832)		5,316
Comprehensive (loss) income	(54,579)		14,129		(155,416)		113,881
Comprehensive loss	(99,462)		(72,243)
Less: Comprehensive loss attributable to noncontrolling interests	(4774,~~526~~962)		—(89,358)		~~(114,374)~~		—
Comprehensive (loss) income attributable to Weber Inc.	$	(724,~~053~~500)	$	1417,~~129~~115	$	~~(41,042)~~	$	~~113,881~~

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

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Weber Inc.

Condensed Consolidated Statements of Equity (Deficit)
(dollars in thousands, except share data)

(unaudited)

	Three Months Ended June 30, 2022
	Three Months Ended December 31, 2022
	Class A Common Stock			Class B Common Stock			Preferred Stock					Accumulated OtherComprehensive Income (Loss)
	Shares	Amount		Shares	Amount		Shares	Amount		Additional Paid-in Capital		Cumulative Translation Adjustments		Unrealized Gain (Loss) on Derivative Instruments		Retained Earnings (Deficit)		Non-controlling Interests		Total
Balance at March 31, 2022	52,834,735	$	53	234,609,825	$	2	—	$	—	$	15,125	$	(6,751)	$	1,155	$	(49,763)	$	(153,897)	$	(194,076)
Balance at September 30, 2022	53,102,598	$	53	234,506,636	$	2	—	$	—	$	15,735	$	(13,564)	$	8,802	$	(87,851)	$	(335,113)	$	(411,936)
Deferred tax asset associated with repayment of member notes	—	—		—	—		—	—		487		—		—		—		—		487
Issuance of Class A shares for equity awards	605,535	1		—	—		—	—		(1,520)		—		—		—		—		(1,519)
Issuance of Class A shares for equity awards	14,568	—		—	—		—	—		(92)		—		—		—		—		(92)
Conversion of Paired Interests	30,259	—		(30,259)	—		—	—		—		—		—		—		—		—
Conversion of Paired Interests	50,000	—		(50,000)	—		—	—		—		—		—		—		—		—
Net loss	—	—		—	—		—	—		—		—		—		(27,190)		(86,701)		(113,891)
Net loss	—	—		—	—		—	—		—		—		—		(7,494)		(44,505)		(51,999)
Distributions to noncontrolling interests	—	—		—	—		—	—		—		—		—		—		11		11
Dividends on Class A shares and equity awards	—	—		—	—		—	—		—		—		—		(2,228)		—		(2,228)
Stock-based compensation	—	—		—	—		—	—		1,592		—		—		—		6,945		8,537
Distributions to noncontrolling interests	—	—		—	—		—	—		—		—		—		—		(9,856)		(9,856)
Foreign currency translation adjustments	—	—		—	—		—	—		—		3,218		—		—		14,043		17,261
Stock-based compensation	—	—		—	—		—	—		3,195		—		—		—		14,145		17,340
Loss on derivative instruments	—	—		—	—		—	—		—		—		(251)		—		(1,094)		(1,345)
Foreign currency translation adjustments	—	—		—	—		—	—		—		(3,184)		—		—		(12,683)		(15,867)
Reclassification of realized gain on derivative instruments to net loss	—	—		—	—		—	—		—		—		(277)		—		(1,210)		(1,487)
Gain on derivative instruments	—	—		—	—		—	—		—		—		2,876		—		7,286		10,162
Balance at December 31, 2022	53,738,392	$	54	234,476,377	$	2	—	$	—	$	15,807	$	(10,346)	$	8,274	$	(115,041)	$	(403,119)	$	(504,369)
Reclassification of realized loss on derivative instruments to net loss	—	—		—	—		—	—		—		—		749		—		2,376		3,125
Balance at June 30, 2022	52,899,303	$	53	234,559,825	$	2	—	$	—	$	18,715	$	(9,935)	$	4,780	$	(59,485)	$	(197,134)	$	(243,004)

	Three Months Ended June 30, 2021
	Three Months Ended December 31, 2021
			Accumulated OtherComprehensive Income (Loss)
	Class A Common Stock				Class B Common Stock				Preferred Stock					Accumulated OtherComprehensive Income (Loss)
	Members' Equity		Cumulative Translation Adjustments		Unrealized Gain (Loss) on Derivative Instruments		Total
	Shares		Amount		Shares		Amount		Shares	Amount		Additional Paid-in Capital		Cumulative Translation Adjustments		Unrealized Gain (Loss) on Derivative Instruments		Retained Earnings (Deficit)		Non-controlling Interests		Total
Balance at March 31, 2021	$	69,337	$	(26,091)	$	(16,532)	$	26,714
Balance at September 30, 2021	52,533,388		$	53	233,572,370		$	2	—	$	—	$	6,109	$	(5,692)	$	(3,588)	$	(7,646)	$	(110,583)	$	(121,345)
Capital contributions	11,969		—		—		11,969
Repayment of member notes	—		—		1,072,849		—		—	—		2,077		—		—		—		9,273		11,350
Issuance of common units in connection with acquisition	14,582		—		—		14,582
Deferred tax asset associated with repayment of member notes	—		—		—		—		—	—		(487)		—		—		—		—		(487)
Repurchase of members' interest	(188,860)		—		—		(188,860)
Issuance of Class A shares for equity awards	36,510		—		—		—		—	—		(351)		—		—		—		—		(351)
Interest income on notes receivable	(11)		—		—		(11)
Net loss	—		—		—		—		—	—		—		—		—		16,777		(91,330)		(74,553)
Notes receivable repayments	829		—		—		829
Interest income on notes receivable	—		—		—		—		—	—		(3)		—		—		—		—		(3)
Net income	17,825		—		—		17,825
Dividends on Class A shares and equity awards	—		—		—		—		—	—		—		—		—		(2,232)		—		(2,232)
Members’ distributions	(285,452)		—		—		(285,452)
Distributions to noncontrolling interests	—		—		—		—		—	—		—		—		—		—		(9,627)		(9,627)
Unit-based compensation	4,511		—		—		4,511
Stock-based compensation	—		—		—		—		—	—		4,670		—		—		—		20,841		25,511
Foreign currency translation adjustments	—		~~577~~—		—		~~577~~—		—	—		—		(441)		—		—		(2,565)		(3,006)
Loss on derivative instruments	—		—		(7,059)		(7,059)
Gain on derivative instruments	—		—		—		—		—	—		—		—		404		—		2,353		2,757
Reclassification of realized loss on derivative instruments to net income	—		—		2,786		2,786
Reclassification of realized loss on derivative instruments to net loss	—		—		—		—		—	—		—		—		375		—		2,184		2,559
Balance at June 30, 2021	$	(355,270)	$	(25,514)	$	(20,805)	$	(401,589)
Balance at December 31, 2021	52,569,898		$	53	234,645,219		$	2	—	$	—	$	12,015	$	(6,133)	$	(2,809)	$	6,899	$	(179,454)	$	(169,427)

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

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Weber Inc.

Condensed Consolidated Statements of Equity (Deficit)(dollars in thousands, except share data)

(unaudited)

	Nine Months Ended June 30, 2022
	Class A Common Stock			Class B Common Stock			Preferred Stock					Accumulated OtherComprehensive Income (Loss)
	Shares	Amount		Shares	Amount		Shares	Amount		Additional Paid-in Capital		Cumulative Translation Adjustments		Unrealized Gain (Loss) on Derivative Instruments		Retained Earnings (Deficit)		Non-controlling Interests		Total
Balance at September 30, 2021	52,533,388	$	53	233,572,370	$	2	—	$	—	$	6,109	$	(5,692)	$	(3,588)	$	(7,646)	$	(110,583)	$	(121,345)
Repayment of member notes	—	—		1,072,849	—		—	—		2,077		—		—		—		9,273		11,350
Issuance of Class A shares for equity awards	280,521	—		—	—		—	—		(1,412)		—		—		—		—		(1,412)
Conversion of Paired Interests	85,394	—		(85,394)	—		—	—		—		—		—		—		—		—
Net loss	—	—		—	—		—	—		—		—		—		(45,167)		(132,698)		(177,865)
Interest income on notes receivable	—	—		—	—		—	—		(3)		—		—		—		—		(3)
Dividends on Class A shares and equity awards	—	—		—	—		—	—		—		—		—		(6,672)		—		(6,672)
Distributions to noncontrolling interests	—	—		—	—		—	—		—		—		—		—		(34,547)		(34,547)
Stock-based compensation	—	—		—	—		—	—		11,944		—		—		—		53,097		65,041
Foreign currency translation adjustments	—	—		—	—		—	—		—		(4,243)		—		—		(18,831)		(23,074)
Gain on derivative instruments	—	—		—	—		—	—		—		—		6,922		—		30,728		37,650
Reclassification of realized loss on derivative instruments to net loss	—	—		—	—		—	—		—		—		1,446		—		6,427		7,873
Balance at June 30, 2022	52,899,303	$	53	234,559,825	$	2	—	$	—	$	18,715	$	(9,935)	$	4,780	$	(59,485)	$	(197,134)	$	(243,004)

	Nine Months Ended June 30, 2021
			Accumulated OtherComprehensive Income (Loss)
	Members' Equity		Cumulative Translation Adjustments		Unrealized Gain (Loss) on Derivative Instruments		Total
Balance at September 30, 2020	$	25,032	$	(28,455)	$	(40,125)	$	(43,548)
Capital contributions	12,094		—		—		12,094
Issuance of common units in connection with acquisition	14,582		—		—		14,582
Repurchase of members' interest	(188,860)		—		—		(188,860)
Interest income on notes receivable	(40)		—		—		(40)
Notes receivable repayments	981		—		—		981
Net income	91,620		—		—		91,620
Members’ distributions	(315,620)		—		—		(315,620)
Unit-based compensation	4,941		—		—		4,941
Foreign currency translation adjustments	—		2,941		—		2,941
Gain on derivative instruments	—		—		11,289		11,289
Reclassification of realized loss on derivative instruments to net income	—		—		8,031		8,031
Balance at June 30, 2021	$	(355,270)	$	(25,514)	$	(20,805)	$	(401,589)

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

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Weber Inc.

Condensed Consolidated Statements of Cash Flows

(dollars in thousands)

(unaudited)

	Nine Months Ended June 30,
	Three Months Ended December 31,
	2022		2021
Operating activities
Net (loss) income	$	(177,865)	$	91,620
Net loss	$	(113,891)	$	(74,553)
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for depreciation	2910,~~206~~033		208,~~317~~613
Provision for amortization of intangible assets	155,~~495~~073		125,~~090~~174
Provision for amortization of deferred financing costs	31,~~556~~800		21,~~813~~022
Deferred income tax expense (benefit)	22,257		(3,174)
Deferred income tax (benefit) expense	(305)		340
Stock/unit-based compensation	65,041		94,193
Stock-based compensation	8,537		25,511
Gain on Tax Receivable Agreement liability remeasurement	(9,226)		—
Gain from investments in unconsolidated affiliates	—		(5,505)
Gain on disposal of assets held for sale	—		(5,185)
Loss from early extinguishment of debt	—		5,448
Changes in operating assets and liabilities:
Accounts receivable	(~~163~~29,~~576~~242)		(~~186~~18,~~381~~345)
Inventories	(8434,~~823~~456)		(96139,~~505~~694)
Prepaid expenses and other current assets	(134,~~470~~585)		12(46,~~844~~606)
Trade accounts payable	6214,~~191~~585		~~106~~52,~~057~~464
Accrued expenses	(224,~~148)~~308		29(10,~~165~~554)
Income taxes payable	~~835~~3,226		63,~~507~~074
Other	93,~~693~~296		(95,~~844)~~661
Net cash (used in) provided by operating activities	(242,834)		74,460
Net cash used in operating activities	(111,621)		(187,893)
Investing activities
Proceeds from disposal of property, equipment and leasehold improvements	183		~~14,028~~10
Additions to property, equipment and leasehold improvements	(8024,~~362~~440)		(4025,~~503~~876)
Payments for acquisitions	—		(128,514)
Net cash used in investing activities	(24,437)		(25,866)
Net cash used in investing activities	(80,344)		(154,989)
Financing activities
Proceeds from issuance of long-term debt	250,000		1,250,000
Proceeds from issuance of long-term debt — related party	62,424		—
Payments for deferred financing costs	(96,~~700~~719)		~~(26,654)~~—
Payments for capitalized offering costs	~~(2,109)~~—		(2,~~349~~109)
Payments under agreement with iDevices	(99)		(228)
Interest rate swap settlement payments	(1,478)		(1,478)
Interest rate swap settlement payments	(4,384)		(3,903)
Proceeds from contribution of capital, net	—		11,346
Proceeds from contribution of capital, net	11,346		13,075
Dividends paid	(70)		(2,123)
Repurchase of members’ interests	—		(188,860)
Members’ distributions	11		(9,627)
Dividends paid	(6,394)		—
Borrowings from revolving credit facility	177,500		203,000
Members’ distributions	(34,547)		(315,622)
Payments on revolving credit facility	(66,500)		(42,000)
Borrowings from revolving credit facility	724,500		217,000
Borrowings from revolving loan — related party	4,600		—
Payments on revolving credit facility	(676,500)		(217,000)
Payments of other borrowings	(4,910)		—
Payments of long-term debt	(103,~~000~~750)		(~~622~~3,~~500~~125)
Shares withheld to satisfy employee tax obligations	(1,~~412~~520)		—(351)
Service on financing obligation	(441)		(382)
Other financing activities	(360)		(197)
Net cash provided by financing activities	~~240~~159,~~260~~228		~~102~~153,~~577~~336
Effect of exchange rate changes on cash and cash equivalents	16(10,~~247~~036)		~~629~~(895)
(Decrease) increase in cash and cash equivalents	(66,671)		22,677
Increase (decrease) in cash and cash equivalents	13,134		(61,318)
Cash and cash equivalents at beginning of period	~~107~~24,~~517~~568		~~123~~107,~~792~~517
Cash and cash equivalents at end of period	$	4037,~~846~~702	$	~~146~~46,~~469~~199
Supplemental disclosures of cash flow information:
Cash paid for interest	$	25,808	$	13,311
Cash paid for income taxes, net of refunds of $2,491 and zero, respectively	$	1,526	$	4,439
Supplemental disclosures of non-cash investing information:
Property and equipment included in accounts payable and accrued expenses	$	12,413	$	26,050

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Weber Inc.

Condensed Consolidated Statements of Cash Flows

(dollars in thousands)

(unaudited)

	Nine Months Ended June 30,
	2022		2021
Supplemental disclosures of cash flow information:
Cash paid for interest	$	44,860	$	42,977
Cash paid for income taxes, net of refunds of $159 and $3,213, respectively	$	14,255	$	17,090
Supplemental disclosures of non-cash investing information:
Property and equipment included in accounts payable and accrued expenses	$	18,905	$	7,253
Deferred offering costs in accrued expenses	$	—	$	1,689
Settlement of existing relationship through business combination	$	—	$	9,776
Issuance of common units for business acquisition	$	—	$	14,582

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

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Weber Inc.

~~NOTES~~Notes TOto ~~UNAUDITED~~Unaudited ~~CONDENSED~~Condensed ~~CONSOLIDATED~~Consolidated ~~FINANCIAL~~Financial ~~STATEMENTS~~Statements

1. General

Description of Business

Weber Inc. and its subsidiaries (collectively “Weber,” the “Company,” “we,” and “our”), ais ~~Delaware~~an ~~corporation,~~outdoor ~~was~~cooking ~~formed~~company in ~~April 2021 for~~ the ~~purpose~~global ofoutdoor ~~facilitating~~cooking anmarket. ~~initial~~Our ~~public~~product ~~offering~~portfolio ~~(“IPO”)~~includes oftraditional ~~its~~charcoal ~~Class~~grills, Agas ~~common~~grills, ~~stock~~smokers, ~~facilitating~~pellet ~~organizational~~grills, ~~transactions~~electric ~~and~~grills ~~to operate the business of Weber HoldCo LLC~~ and ~~its~~related ~~consolidated subsidiaries~~accessories. ~~The~~Our ~~Company~~full ~~historically~~range ~~conducted~~of ~~its~~products ~~business through Weber-Stephen Products LLC prior to the IPO. Following the Company's IPO in August 2021, Weber Inc.~~ is asold ~~holding company and its sole asset is a controlling equity interest~~ in ~~Weber~~78 ~~HoldCo LLC, a Delaware limited liability company formed in April 2021~~countries. As part of the IPO and other associated transactions (collectively referred to as the “Reorganization Transactions”), Weber-Stephen Products LLC became a wholly owned subsidiary of Weber HoldCo LLC, and will continue as the primary operating company.

Weber, together with its subsidiaries, is an outdoor cooking company in the global outdoor cooking market. Our product portfolio includes traditional charcoal grills, gas grills, smokers, pellet grills, electric grills and related accessories. Our full range of products are sold in 78 countries.

We are headquartered in Palatine, Illinois, and our stock is listed on the New York Stock Exchange (NYSE) under the symbol “WEBR.”

~~Basis~~Agreement and Plan of ~~Presentation~~Merger

~~The~~On ~~condensed~~December ~~consolidated~~11, ~~financial~~2022, ~~statements~~the ofCompany ~~Weber~~entered ~~Inc.~~into ~~were~~an ~~prepared~~Agreement inand ~~accordance~~Plan ~~with~~of ~~generally~~Merger ~~accepted accounting principles~~ (the “~~GAAP~~Merger Agreement”) inwith ~~the~~Ribeye ~~United~~Parent, ~~States~~LLC (“~~U.S.~~Parent”) ~~for~~and ~~interim~~Ribeye ~~reporting.~~Merger InSub, ~~management’s opinion~~Inc., ~~the~~a ~~interim~~wholly ~~financial~~owned ~~statements~~subsidiary ~~reflect~~of ~~all~~Parent ~~adjustments,~~(“Merger ~~which~~Sub”) ~~are~~pursuant ofto awhich ~~normal~~Merger ~~recurring~~Sub ~~nature,~~will ~~necessary~~merge ~~for~~with aand ~~fair~~into ~~presentation~~the ofCompany (the ~~results of financial position~~“Merger”), ~~operations~~with ~~and cash flows for~~ the ~~periods~~Company ~~presented~~surviving. ~~The~~Parent ~~results~~and ofMerger ~~operations~~Sub ~~for the period ended June 30, 2022~~ are ~~not~~affiliates ~~necessarily indicative~~ of ~~the~~BDT ~~operating~~Capital ~~results~~Partners ~~expected for the full fiscal year~~LLC. ~~These~~BDT ~~unaudited~~Capital ~~interim~~Partners ~~condensed~~LLC ~~consolidated~~will ~~financial~~acquire ~~statements~~all ~~should~~of bethe ~~read~~Company’s inoutstanding ~~conjunction~~shares ~~with~~of ~~the~~Class ~~audited~~A ~~consolidated~~common ~~financial~~stock ~~statements~~(other ~~included~~than in(i) ~~our~~shares ~~Annual~~of ~~Report~~Class onA ~~Form~~common ~~10-K~~stock ~~for~~held ~~the~~by ~~fiscal~~BDT ~~year~~Capital ~~ended September 30, 2021.~~Partners

~~Principles~~I-A Holdings, LLC and BDT WSP Holdings, LLC, (ii) any shares of ~~Consolidation~~common stock canceled pursuant to the Merger

~~The~~Agreement ~~condensed consolidated financial statements include the accounts~~ and ~~operations~~(iii) ofany ~~the~~dissenting ~~Company~~shares ~~and its subsidiaries. Weber HoldCo LLC is considered a variable interest entity. Weber Inc. is the primary beneficiary~~ of ~~Weber~~Class ~~HoldCo~~A ~~LLC~~common ~~and~~stock) ~~has~~for ~~decision making authority that significantly affects the economic performance of this entity~~$8.05 Asper ashare ~~result, Weber Inc. consolidates the financial statements of Weber HoldCo LLC. All significant intercompany accounts and transactions have been eliminated~~ in ~~consolidation~~cash. Noncontrolling interests reflect the entitlement of the owners of Weber-Stephen Products LLC’s outstanding equity interests prior to the IPO (“Pre-IPO LLC Members”) to a portion of Weber HoldCo LLC’s net (loss) income.

AsThe ~~the~~Merger ~~Reorganization~~is ~~Transactions~~conditioned ~~are~~upon, ~~considered~~among ~~transactions~~other ~~between entities under common control~~things, ~~the~~customary ~~condensed~~closing ~~consolidated~~conditions. ~~financial~~Subject ~~statements for periods prior~~ to the ~~IPO~~satisfaction ~~and~~(or ~~the~~if ~~Reorganization~~applicable, ~~Transactions~~waiver) ~~have~~of ~~been~~such ~~adjusted~~conditions, ~~to combine~~ the ~~previously~~Merger ~~separate~~is ~~entities~~expected ~~for~~to ~~presentation~~close ~~purposes.~~in ~~Prior to~~ the ~~Reorganization~~first ~~Transactions,~~half ~~Weber~~of ~~Inc.~~calendar ~~had~~year ~~no operations~~2023.

Consolidation and Basis of Presentation

The condensed consolidated financial statements of Weber Inc. were prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) for interim reporting. In management’s opinion, the interim financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the results of financial position, operations and cash flows for the periods presented. The results of operations for the period ended December 31, 2022 are not necessarily indicative of the operating results expected for the full fiscal year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022.

Weber HoldCo LLC is considered a variable interest entity. Weber Inc. is the primary beneficiary of Weber HoldCo LLC and has decision making authority that significantly affects the economic performance of this entity. As a result, Weber Inc. consolidates the financial statements of Weber HoldCo LLC. Noncontrolling interests reflect the entitlement of the owners of Weber-Stephen Products LLC’s outstanding equity interests prior to the IPO (“Pre-IPO LLC Members”) to a portion of Weber HoldCo LLC’s net (loss) income.

Fiscal Year

The Company’s fiscal year runs from October 1 through September 30. All references to years are to fiscal years unless otherwise stated.

Use of Estimates

The preparation of ~~condensed~~ consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the ~~condensed~~ consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The effect of the change in the estimates will be recognized in the current period of the change.

Seasonality

Although the Company generally has demand for its products throughout the year, the Company’s sales have historically experienced some seasonality. The Company has typically experienced its highest level of sales of its products in the second and third fiscal quarters as retailers across North America and Europe change over their floor sets, build inventory and fulfill consumer demand for outdoor cooking products. Sales are typically lower during the first and fourth fiscal quarters, with the exception of the Australia/New Zealand business which is counter seasonal to the balance of the business.

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in the second and third fiscal quarters as retailers across North America and Europe change over their floor sets, build inventory and fulfill consumer demand for outdoor cooking products. Sales are typically lower during the first and fourth fiscal quarters, with the exception of the Australia/New Zealand business, which is counter-seasonal to the balance of the business.

Accounts Receivable

~~Sales~~Receivables ofPurchase ~~Accounts Receivable~~Agreement

~~During~~In ~~the~~March ~~second quarter of fiscal year~~ 2022, the Company entered into an agreement to sell certain trade accounts receivable to a third party financial institution (“Receivables Purchase Agreement”). The Receivables Purchase Agreement results in the transfer of the trade accounts receivable and associated risks to the third party and provides the third party with the full benefits and burdens of ownership in exchange for cash proceeds to the Company. The trade accounts receivable transferred are accounted for as sales of receivables as they ~~have~~had satisfied the required criteria under Accounting Standards Codification (“ASC”) 860, Transfers and Servicing, and ~~are~~were de-recognized from the Company’s ~~condensed~~ consolidated balance sheets. The maximum receivables that may be sold under the Receivables Purchase Agreement at any time is $235.0 million. AsThere ofwere ~~June~~no 30trade accounts receivable sold under the Receivables Purchase Agreement during the quarter ended December 31, 2022, as the third party under the Receivables Purchase Agreement had previously informed the Company that, as permitted by the terms of the agreement, it ~~will~~would not be purchasing trade accounts receivable for an unspecified period of time. There can be no assurance that the third party will begin purchasing trade accounts receivable in the near term, or at all.

The Company has no retained interest in the trade accounts receivable sold, however, the Company does have collection and administrative responsibilities for the sold trade accounts receivable. The Company has not recorded any servicing assets or liabilities as of June 30, 2022 in conjunction with the Receivables Purchase Agreement as the fair value of these servicing arrangements and fees earned were not material.

Trade accounts receivable sold under the Receivables Purchase Agreement were $25.9 million and $141.8 million for the three and nine months ended June 30, 2022, respectively. The trade accounts receivable sold that remained outstanding as of June 30, 2022 was $0.5 million. The net proceeds received during the nine months ended June 30, 2022 were included in Net cash (used in) provided by operating activities in the condensed consolidated statements of cash flows. The difference between the carrying amount of the trade accounts receivable sold and the sum of the cash received was $0.1 million and $0.5 million for the three and nine months ended June 30, 2022, respectively, and was recorded as a loss on sale of receivables in Other expense in the condensed consolidated statements of operations. There were no sales of accounts receivable prior to the second quarter of fiscal year 2022.

Allowance for Expected Credit Losses

Accounts receivable consist primarily of amounts due to the Company from its normal business activities, offset by an allowance for expected credit losses. The Company estimates its expected credit losses based on historical experience, the aging of accounts receivable, consideration of current economic conditions and its expectations of future economic conditions. ~~The~~Additionally, ~~allowance~~the ~~for~~Company ~~expected~~establishes ~~credit~~customer-specific ~~losses~~allowances ~~was~~for $2known at-risk accounts.7 ~~million~~The ~~and~~Company $2does not require collateral from its customers.6 ~~million~~Accounts asreceivable ofare ~~June 30,~~written ~~2022~~off ~~and~~when ~~September 30,~~it ~~2021,~~is ~~respectively~~determined that the receivable will not be collected.

The Company estimates its expected credit losses based on historical experience, the aging of accounts receivable, consideration of current economic conditions and its expectations of future economic conditions. The allowance for expected credit losses was $3.5 million and $3.6 million as of December 31, 2022 and September 30, 2022, respectively.

Inventories

The components of inventory are as follows:

	June 30,2022		September 30,2021
	December 31,2022		September 30,2022
	(dollars in thousands)
Work-in-process and materials	$	7964,~~511~~916	$	6068,~~367~~186
Finished products	~~317~~326,~~158~~463		~~272~~271,~~254~~317
Total inventories, net	$	~~396~~391,~~669~~379	$	~~332~~339,~~621~~503

Prepaid expenses and other current assets

The components of prepaid expenses and other current assets are as follows:


	December 31, 2022		September 30, 2022
	(dollars in thousands)
Value added taxes receivable	$	29,816	$	30,407
Current portion of derivative instruments	26,998		22,277
Other	46,561		38,325
Total prepaid expenses and other current assets	$	103,375	$	91,009

New Accounting Pronouncements Recently Adopted

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This ASU is effective for all entities beginning as of its date of effectiveness, March 12, 2020. ~~The~~In ~~guidance is temporary and can be applied through~~ December 312022, ~~2022. The guidance has not impacted~~ the ~~condensed~~FASB ~~consolidated~~issued ~~financial statements to~~

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ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extended the date which this temporary guidance can be applied to December 31, 2024. This guidance has not impacted our condensed consolidated financial statements to date. The Company will continue to monitor the impact of the ASU on our condensed consolidated financial statements in the future.

New Accounting Pronouncements Issued but Not Yet Adopted

NoIn ~~recent~~September ~~accounting~~2022, ~~pronouncements~~the ~~were~~FASB issued byASU ~~the~~2022-04, ~~FASB~~Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. This guidance requires annual and interim disclosures for entities that use supplier finance programs in connection with the purchase of goods and services. These amendments are ~~believed~~effective byfor ~~management~~fiscal years beginning after December 15, 2022, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. This guidance is not expected to have a material impact on ~~the~~our ~~Company’s~~condensed ~~future~~consolidated financial statements.

2.No ~~Acquisitions~~other new accounting pronouncement issued or effective during the fiscal year had, or is expected to have, a material impact on our condensed consolidated financial statements.

~~June~~2. ~~Acquisition~~Goodwill and Other Intangibles

OnGoodwill ~~January 12,~~allocated ~~2021,~~to the Company's ~~acquired~~reportable ~~all~~segments ~~of the remaining outstanding stock of June Life, Inc. ("June"), a smart appliance~~ and ~~technology~~changes ~~company.~~in ~~The purpose of~~ the ~~acquisition~~carrying ~~was~~amount ~~primarily~~of togoodwill ~~advance~~during ~~consumer experiences through~~ the ~~use~~three ofmonths ~~embedded~~ended ~~technology~~December 31, in2022 ~~its~~were ~~products~~as ~~and higher quality digital products.~~ follows:

The composition of the purchase price recorded for June was as follows (dollars in thousands):


	Americas		EMEA		APAC		Total
	(dollars in thousands)
Balance as of September 30, 2022	$	72,412	$	8,965	$	22,765	$	104,142
Foreign exchange	—		824		1,898		2,722
Balance as of December 31, 2022	$	72,412	$	9,789	$	24,663	$	106,864

Cash	$	108,285
Fair value of equity interest	24,144
Settlement of existing contractual relationship	9,776
Total	$	142,205

Prior to the acquisition, the Company held an existing equity interest in June, which was historically accounted for as an equity method investment. Additionally, the Company had a license and development agreement with June to license certain software and other technology owned by June and adapt this technology to certain products of the Company. The license and development agreement included provisions for the Company to pay June royalties at varying rates based on the quantities and type of product sold containing the licensed technology. During the three months ended December 31, 2020, the Company recorded an equity method loss of $1.4 million, with an offsetting decrease in its investment in June. At acquisition, the Company remeasured the fair value of its existing equity interest, which exceeded the carrying amount of the investment and resulted in a pre-tax gain of $6.9 million. The gain offset with the equity method loss of $1.4 million was recorded within Gain from investments in unconsolidated affiliates during the nine months ended June 30, 2021.

Upon completion of the merger agreement, June became a wholly-owned subsidiary of the Company. At the time of acquisition, the fair value of the existing equity interest totaled $24.1 million, which was based on per share prices paid to the sellers of common stock and preferred stock on acquisition.

The June license and development agreement, was deemed to be an existing contractual relationship. As a result of the business combination, the Company recorded this arrangement as consideration at its January 12, 2021 fair value, which resulted in an increase in goodwill of $9.8 million.

The results of operations for June have been included in the condensed consolidated statements of operations since the acquisition date, which were not material. June operations are reflected within the Americas reportable segment. Actual and pro forma revenue and results of operations for the acquisition have not been presented because they do not have a material impact to the Company’s net sales and results of operations, either individually or in aggregate.

The June 30, 2022 and September 30, 2021 condensed consolidated balance sheets include the assets and liabilities of June, which have been measured at fair value as of the acquisition date. The Company believes that the information provides a reasonable basis for estimating the fair values of the acquired assets and assumed liabilities.

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The allocation of purchase price recorded for June was as follows (dollars in thousands):

Cash	$	6,046
Inventory	480
Accounts receivable	85
Prepaid expenses and other current assets	617
Property and equipment	104
Intangibles	109,700
Goodwill	53,193
Accounts payable	(870)
Accrued expenses	(2,670)
Other long-term liabilities	(24,480)
Total	$	142,205

The above fair values of assets acquired and liabilities are based on the information that was available as of the reporting date.

The goodwill of $53.2 million represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including an experienced workforce and expected future synergies. None of the goodwill is expected to be deductible for tax purposes. In the first quarter of fiscal year 2022, the Company recorded a reduction to accrued expenses of $1.3 million, with a corresponding decrease to goodwill, resulting from a change in the fair value of a liability.

The Company recognized $24.5 million of deferred tax liabilities due to the acquisition of June. The deferred tax liabilities have been recorded in Other long-term liabilities in the condensed consolidated balance sheets.

The gross carrying amounts allocated to intangible assets were as follows (dollars in thousands):

Trade names and trademarks	$	17,000
Developed software / patented technology	87,000
Non-competition / restrictive covenant agreements	5,700
Total	$	109,700

The useful lives assigned to intangible assets were as follows (in years):

			UsefulLives
Trade names and trademarks			20.0
Developed software / patented technology			15.0
Non-competition / restrictive covenant agreements			3.0
Total weighted average useful life			15.2

Developed software/patented technology were valued using the multi-period excess earnings method (“MPEEM”). Intangible assets consisting of trade names and trademarks and non-competition/ restrictive covenant agreements were valued using the relief from royalty (“RFR”) method and lost income method, respectively. In many cases, the determination of fair values required estimates about discount rates, future expected cash flows and other future events that are judgmental and subject to change.

As a result of the acquisition, the Company recognized $1.2 million of acquisition-related costs.

RMC Acquisition

On April 1, 2021, the Company acquired all aspects of the operations of R McDonald Co. Pty. Ltd. (“RMC”), that supported the Company’s business units in Australia and New Zealand. This included certain fixed assets, members of the RMC workforce and their related employment liabilities and the reacquired right to sell and market the Company’s products. RMC, a marketing and distribution company, had historically provided operational and marketing support to

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operate the Weber Australia and Weber New Zealand businesses on behalf of the Company. The primary purpose of the acquisition was to re-acquire those operational and marketing rights.

The composition of the purchase price recorded for RMC was as follows (dollars in thousands):

Cash	$	26,275
Equity consideration issued by the Company	14,582
Total	$	40,857

Prior to the acquisition, the Company had a preexisting contractual agreement with RMC which provided RMC the exclusive rights to sell, market, and distribute barbecue grills and accessories in Australia and New Zealand. With the acquisition, the effective settlement of this agreement resulted in the Company reacquiring rights to sell, market, and distribute products in Australia and New Zealand. In addition, RMC had a contractual agreement to provide administrative support services to the Company’s Australian and New Zealand businesses, as well as a licensing agreement for RMC to use certain trademarks of the Company. The transaction resulted in no gain or loss as the contractual terms of these agreements were at market.

The results of operations for RMC have been included in the condensed consolidated statements of operations since the acquisition date, which were not material. RMC operations are reflected within the Asia-Pacific (“APAC”) reportable segment. Actual and pro forma revenue and results of operations for the acquisition have not been presented because they do not have a material impact to the Company’s net sales and results of operations, either individually or in aggregate.

The June 30, 2022 and September 30, 2021 condensed consolidated balance sheets include the assets and liabilities of RMC, which have been measured at fair value as of the acquisition date. The Company believes that the information provides a reasonable basis for estimating the fair values of the acquired assets and assumed liabilities.

The allocation of purchase price recorded for RMC was as follows (dollars in thousands):

Property and equipment	$	432
Reacquired rights	14,300
Other long-term assets	410
Goodwill	27,120
Accrued expenses	(1,405)
Total	$	40,857

The above fair values of assets acquired and liabilities are based on the information that was available as of the reporting date.

The goodwill of $27.1 million represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including an experienced workforce and expected future synergies. None of the goodwill is expected to be deductible for tax purposes. In the period subsequent to acquisition, the Company recorded a deferred tax asset of $0.4 million in its acquisition of RMC, with a corresponding decrease to goodwill.

The reacquired rights were valued using MPEEM. The useful life of the reacquired rights were estimated to be 3.3 years. The determination of fair values required estimates about discount rates, future expected cash flows and other future events that are judgmental and subject to change.

As a result of the acquisition, the Company recognized approximately $0.3 million of acquisition-related costs.

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3. Goodwill and Other Intangibles

Goodwill allocated to the Company's reportable segments and changes in the carrying amount of goodwill during the nine months ended June 30, 2022 is shown below.

	Americas		EMEA		APAC		Total
	(dollars in thousands)
Balance as of September 30, 2021	$	73,696	$	10,589	$	26,327	$	110,612
Acquisitions(1)	(1,284)		—		—		(1,284)
Foreign exchange	—		(999)		(1,544)		(2,543)
Balance as of June 30, 2022	$	72,412	$	9,590	$	24,783	$	106,785

_____________

(1)Represents a measurement period adjustment related to the June acquisition. See Note 2 for further information.

The Company evaluates goodwill and indefinite-lived intangible assets for possible impairment during the fourth quarter of the Company's fiscal year or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

During the quarter ended June 30, 2022, the Company determined that a triggering event had occurred given the negative impact to its operating results from the current macroeconomic environment, including inflation, foreign exchange fluctuations, supply chain disruptions and higher freight and fuel costs. Accordingly, the Company performed a quantitative assessment for all reporting units, which compared the reporting units’ fair values to their respective carrying values. The Company determined that no impairment charge was required with respect to goodwill and indefinite-lived intangible assets as a result of this quantitative assessment for the nine months ended June 30, 2022.

The Company’s intangible assets consist of the following:

June 30, 2022

December 31, 2022

Weighted-Average Remaining Amortization Years

Gross Carrying Amount

Accumulated Amortization

Net Book Value

(dollars in thousands)

Trademark—Weber

N/A

310,000

—

310,000

Trademarks—Other

13.93

55,900

(1012,~~618~~312)

4543,~~282~~588

Trademarks, net

365,900

(1012,~~618~~312)

~~355~~353,~~282~~588

Customer lists

8.60

90,~~155~~685

(5456,~~080~~477)

3634,~~075~~208

Patents

6.79

3,428

(1,~~582~~711)

1,~~846~~717

In-process research and development

4.61

4,500

(2,~~438~~663)

21,~~062~~837

Developed technology

13.61

87,000

(811,~~489~~389)

7875,~~511~~611

Reacquired rights

2.1.6

12,~~961~~796

(46,~~860~~718)

86,~~101~~078

Non-compete agreement

1.61

5,700

(23,~~781~~731)

21,~~919~~969

Other intangible assets, net

~~203~~204,~~744~~109

(7482,~~230~~689)

~~129~~121,~~514~~420

Total

~~569~~570,~~644~~009

(8495,~~848~~001)

~~484~~475,~~796~~008

1611

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September 30, 2021

September 30, 2022

Gross Carrying Amount

Accumulated Amortization

Net Book Value

(dollars in thousands)

Trademark—Weber

310,000

—

310,000

Trademarks—Other

55,900

(811,~~079~~465)

4744,~~821~~435

Trademarks, net

365,900

(811,~~079~~465)

~~357~~354,~~821~~435

Customer lists

9189,~~563~~215

(5055,~~483~~279)

4133,~~080~~936

Patents

493,428

(471,~~389~~647)

21,~~039~~781

In-process research and development

4,500

(2,~~100~~550)

21,~~400~~950

Developed technology

87,000

(49,~~139~~939)

8277,~~861~~061

Reacquired rights

1312,~~568~~019

(25,~~035~~408)

116,~~533~~611

Non-compete agreement

65,~~300~~700

(13,~~956~~256)

42,~~344~~444

Other intangible assets, net

~~252~~201,~~359~~862

(~~108~~78,~~102~~079)

~~144~~123,~~257~~783

Total

~~618~~567,~~259~~762

(~~116~~89,~~181~~544)

~~502~~478,~~078~~218

The Company’s indefinite-lived intangible assets consist of Trademark—Weber.

Total amortization expense for the Company’s intangible assets was $5.21 million ~~for both the three months ended June 30, 2022~~ and ~~2021, respectively, and~~ $~~15.~~5 ~~million and $12~~.12 million for the ~~nine~~three months ended ~~June~~December 3031, 2022 and 2021, respectively.

43. Property, Equipment and Leasehold Improvements

Property, equipment and leasehold improvements, net consists of the following:

	June 30,2022		September 30,2021
	December 31,2022		September 30,2022
	(dollars in thousands)
Land	$	6,469	$	6,~~453~~469
Buildings	5859,~~151~~542		4459,~~829~~461
Computer equipment and software	84132,~~134~~523		7998,~~286~~637
Equipment	~~258~~257,~~115~~305		~~238~~254,~~601~~112
Leasehold improvements	1214,~~854~~000		13,~~156~~752
Construction-in-progress	5436,~~642~~444		3259,~~547~~131
	474,365		414,872
	506,283		491,562
Accumulated depreciation	(~~276~~290,~~826~~526)		(~~252~~280,~~043~~306)
Total	$	~~197~~215,~~539~~757	$	~~162~~211,~~829~~256

Depreciation expense amounted to $10.30 million and $68.96 million for the three months ended ~~June~~December 3031, 2022 and 2021, respectively, of which $2.90 million and $1.89 million related to the amortization of capitalized software costs, respectively. Depreciation expense amounted to $29.2 million and $20.3 million for the nine months ended June 30, 2022 and 2021, respectively, of which $8.7 million and $5.2 million related to the amortization of capitalized software costs, respectively. Unamortized software costs were $4057.84 million and $2954.10 million as of ~~June~~December 3031, 2022 and September 30, ~~2021~~2022, respectively.

174. Restructuring Costs

The Company's Board of Directors approved a restructuring plan in the fourth quarter of fiscal year 2022 as part of a cost-saving plan to preserve liquidity, expand gross margins and reduce selling, general and administrative costs. The restructuring plan included the termination of certain senior executives, a workforce reduction of non-manufacturing and distribution headcount, the termination of certain contracts and the disposal of certain other assets. The Company expects to substantially complete the restructuring plan by the end of fiscal year 2023.

The accrued restructuring costs balance of $9.7 million and $17.6 million was included in Accrued expenses as of December 31, 2022 and September 30, 2022, respectively. The accrued restructuring costs balance relates to cash payments

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for severance and other termination-related benefits that will occur over the salary-continuation period (generally of 12 months or less) and the Company’s estimate of potential obligations related to certain contract terminations. As of December 31, 2022, the total cumulative costs associated with the plan were $21.2 million, of which $9.1 million relates to Americas, $0.7 million relates to EMEA, $2.4 million relates to APAC and $9.0 million relates to Corporate/Other. No further costs are expected to be incurred.

The following table summarizes accrued restructuring costs activity:


	Severance and Other Termination-Related Benefits		Contract Termination Costs		Asset Disposals		Total
	(dollars in thousands)
Balance as of September 30, 2022	$	12,436	$	5,151	$	—	$	17,587

Adjustments to the reserve(1)	(135)		(170)		(861)		(1,166)
Cash payments and reserve usage	(6,920)		(811)		861		(6,870)
Foreign exchange	101		39		—		140
Balance as of December 31, 2022	$	5,482	$	4,209	$	—	$	9,691

_____________

(1)Of the total adjustments to the restructuring reserve, $0.9 million relates to Americas and $0.3 million relates to APAC.

5. Debt

Long-term debt consists of the following:

	June 30,2022		September 30,2021
	December 31,2022		September 30,2022
	(dollars in thousands)
Secured Credit Facility Term Loan, due October 2027	$	1,~~011~~004,~~150~~900	$	1,~~020~~008,~~525~~025
Secured Credit Facility Incremental Term Loan, due October 2027	~~249~~248,~~375~~125		—248,750
Secured Credit Facility Revolving Loan	48278,000		—167,000
Total borrowings	1,308,525		1,020,525
Unsecured 12% Term Loan, due January 2028	62,424		—
Deferred financing costs	(18,969)		(17,692)
Unsecured Revolving Loan, due December 2023	4,600		—
Original issue discount	(10,828)		(5,515)
Other borrowings	—		4,910
Total debt	1,278,728		997,318
Total borrowings	1,598,049		1,428,685
Less: Current portion of long-term debt and other borrowings	(63,000)		(12,500)
Deferred financing costs	(19,733)		(18,162)
Total long-term debt	$	1,215,728	$	984,818
Original issue discount	(9,923)		(10,378)
Total debt	1,568,393		1,400,145
Less: Current portion of long-term debt and other borrowings	(297,600)		(186,910)
Total long-term debt	$	1,270,793	$	1,213,235

Aggregate maturities of long-term debt as of ~~June~~December 3031, 2022, are as follows (dollars in thousands):

Remaining period of 2022	$	3,750
Remaining period of 2023	$	11,250
2023	15,000
2024	15,000
2025	15,000
2026	15,000
Thereafter	1,196,775
2027	15,000
	$	1,260,525
Thereafter	1,244,199
	$	1,315,449

~~Incremental Term Loan~~13

OnTable ~~March 2, 2022, the Company exercised its right under the credit facility ("Secured Credit Facility") to borrow $250.0 million~~ of incremental term loans (the “Incremental Term Loan”). In connection with the Incremental Term Loan, the Company paid financing costs totaling $9.7 million, including an original issue discount of $6.3 million. The financing costs and original issue discount were recorded as deferred financing costs in the condensed consolidated balance sheets and are amortized over the remaining life of the Incremental Term Loan.Contents

The Incremental Term Loan matures on October 30, 2027. Principal payments on the Incremental Term Loan commenced on June 30, 2022, and are payable quarterly at scheduled amounts, with the balance due at maturity. At the Company’s option, the Incremental Term Loan interest rate is based on either (a) Term secured overnight financing rate (“SOFR”) for the applicable interest period (subject to a floor of 0.75%) plus an applicable margin or (b) base rate equal to the highest of (i) the rate of interest publicly announced from time to time by the administrative agent as its “prime rate”, (ii) the federal funds effective rate plus 0.50% and (iii) Term SOFR for an interest period of one month plus 1.00% (subject to a floor of 0.75% per annum), in each case, plus an applicable margin. As of June 30, 2022, the interest rate on the Incremental Term Loan was SOFR plus 4.25%. Interest is payable on the last business day of the month for the relevant interest period selected.

Secured Credit Facility

The Company's ~~Secured~~has ~~Credit~~a ~~Facility~~credit ~~includes~~facility arrangement with an initial term loan ~~(“Term Loan”)~~ of $1,250.0 million (“Term Loan”), an Incremental Term Loan of $250.0 million (“Incremental Term Loan”) and a revolving credit facility (“Revolving Loan”) with a maximum commitment of $300.0 million, which can be restricted to a lower borrowing level based on the result of a financial covenant testing condition, as defined in the Secured Credit Facility loan agreement (collectively, the “Secured Credit Facility”). As of ~~June~~December 3031, 2022, the Revolving Loan had borrowings outstanding of $48278.0 million and letters of credit issued of $29.62 million, leaving $~~249~~12.48 million of available borrowing capacity.

18On December 27, 2022, the Company amended the Secured Credit Facility loan agreement. Pursuant to the amendment, the leverage ratio covenant was waived for the fiscal quarters ending December 31, 2022, and March 31, 2023. In connection with this amendment, the Company paid financing costs totaling $0.8 million, which were recorded as deferred financing costs and are amortized over the duration of the covenant waiver.

Unsecured 12% Term Loan

On November 8, 2022, the Company entered into a loan agreement with BDT Capital Partners Fund I, L.P. and BDT Capital Partners Fund I-A, L.P. The loan agreement provides for an unsecured term loan in an initial aggregate principal amount of $61.2 million (the “Unsecured 12% Term Loan”) and additional unsecured term loans in an aggregate principal amount of up to $150.0 million. On December 11, 2022, the loan agreement was amended to extend the maturity of the Unsecured 12% Term Loan, as well as any additional unsecured term loans entered into under the loan agreement, from January 29, 2026 to January 29, 2028.

The Unsecured 12% Term Loan, as well as any additional unsecured term loans entered into under the loan agreement, bears interest at a fixed annual rate equal to 12.0%, payable in kind or in cash, at the election of the Company, on a quarterly basis (and, in the absence of such election, interest will be paid in kind). An upfront fee of 2.0% of the principal amount was paid in kind upon funding of the Unsecured 12% Term Loan. In connection with the Unsecured 12% Term Loan, the Company paid financing costs totaling $1.7 million, which were recorded as deferred financing costs within Long-term debt — related party in the condensed consolidated balance sheets and are amortized over the life of the Unsecured 12% Term Loan.

Principal under the Unsecured 12% Term Loan, as well as any additional unsecured term loans entered into under the loan agreement, is due on the maturity date of January 29, 2028, along with any fees and interest paid in kind. As of December 31, 2022, the Unsecured 12% Term Loan balance also reflects the upfront fee of $1.2 million that was paid in kind.

The Unsecured 12% Term Loan contains no negative covenants and no financial maintenance covenant and is considered a related party transaction.

Unsecured 15% Credit Facility

Borrowings under the Unsecured 15% Credit Facility bear interest at a fixed annual rate equal to 15.0%, payable in kind or in cash, at the election of the Company, on a quarterly basis (and, in the absence of such election, interest will be paid in kind). An upfront fee of 2.0% of the aggregate revolving credit facility commitments was paid in kind on the closing date of the Unsecured 15% Credit Facility and an upfront fee of 2.0% of the principal amount will be payable in kind or in cash upon funding of the Unsecured 15% Term Loan. A commitment fee of 0.5% per annum or average daily unused commitments under the Unsecured 15% Credit Facility is payable in kind or in cash on a quarterly basis. In connection with the Unsecured Revolving Loan, the Company paid financing costs totaling $4.7 million, which were recorded as deferred financing costs within Other long-term assets in the condensed consolidated balance sheets and are amortized over the life of the Unsecured Revolving Loan.

As of December 31, 2022, the Unsecured Revolving Loan had borrowings outstanding related to the upfront fee of $4.6 million that was paid in kind. The upfront fee did not reduce the available borrowing capacity of the Unsecured

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Revolving Loan, leaving available borrowing capacity of $230.0 million as of December 31, 2022. The Company did not draw on the Unsecured 15% Term Loan as of December 31, 2022.

The Unsecured 15% Credit Facility contains no negative covenants and no financial maintenance covenant and is considered a related party transaction.

Covenants

The Secured Credit Facility contains certain restrictive covenants relating to, among other things, limitations on indebtedness, transactions with affiliates, sales of assets, acquisitions and members’ distributions. In addition, above a certain borrowing level, there is a financial covenant relating to the Company’s average leverage ratio. As of ~~June~~December 3031, 2022, the ~~Company~~leverage ~~was~~ratio incovenant ~~compliance~~was ~~with~~waived ~~all covenants in the Secured Credit Facility. However, the Company’s business is seasonal in nature with the highest level of sales of its products occurring in the second~~ and ~~third fiscal quarters; accordingly,~~ the Company ~~typically~~was ~~borrows under its short-term Revolving Loan~~ in ~~the~~compliance first and second fiscal quarters to fund working capital for building up inventory in anticipation of the higher demand in the second and third fiscal quarters. Given the current macroeconomic environment and the challenges posed by inflation, foreign exchange fluctuations, supply chain disruptions and higher freight and fuel costs, the Company expects continued pressure on its results of operations, working capital requirements and ability to comply with ~~the~~all other covenants in the Secured Credit Facility. The Company is monitoring this matter, taking certain financial transformation and cost savings actions, which include suspension of its dividend; reduction of capital expenditures, cost of goods sold and selling, general and administrative expenses; prudent management of global inventory and working capital positions; and a workforce reduction of our non-manufacturing and distribution headcount by at least 10%, while reducing overall selling, general and administrative personnel costs by at least 15%. Additionally, the Company is working with its lenders to ensure continued compliance with the Secured Credit Facility. There can be no assurance that these efforts will be successful.

The Unsecured 12% Term Loan and Unsecured 15% Credit Facility contain no negative covenants and no financial maintenance covenant.

6. Derivative Instruments

Interest Rate Swap Contracts

The Company uses interest rate swap contracts to minimize the effect of fluctuating variable interest rates under the Secured Credit Facility on Interest expense, net within its reported operating results. As cash flow hedges, the interest rate swaps are revalued at current market rates, with the changes in valuation reflected directly in Other comprehensive (loss) income, to the extent that the hedge is effective. The gains or losses on the interest rate swaps reported in Accumulated other comprehensive (loss) income in equity are reclassified into Interest expense, net in the periods in which the monthly interest settlement is paid on the interest rate swap.

The notional values of the Company’s outstanding interest rate swap contracts were as follows:

	June 30,2022		September 30,2021
	December 31,2022		September 30,2022
	(dollars in thousands)
Interest rate swap contracts	$	1,220,000	$	1,220,000

On October 30, 2020, the Company completed a series of transactions to amend and extend certain interest rate swap agreements by an additional three years. These interest rate swap transactions consisted of the following: (i) $360.0 million of the interest rate swaps were de-designated as cash flow hedges, (ii) the Company entered into a $360.0 million pay-variable receive-fixed interest rate swap which was designed to economically offset the terms of the $360.0 million of swaps in (i) and which are not designated as cash flow hedges, and (iii) the Company entered into a $500.0 million new pay-fixed interest rate swap with an extended maturity. The new pay-fixed interest rate swap is considered a hybrid instrument with a financing component and an embedded at-market derivative that was designated as a cash flow hedge (see discussion of cash flow presentation below).

At the time of the de-designation of the above $360.0 million in interest rate swaps, there was approximately $38.2 million of unrealized losses recorded in Accumulated other comprehensive (loss) income. This amount is amortized to interest expense through the remaining term of the original de-designated swaps unless it becomes probable that the cash flows originally hedged will not occur, in which case the proportionate amount of the loss will be recorded to interest expense at that time. The $360.0 million of interest rate swaps de-designated as cash flows hedges and the $360.0 million of offsetting swaps will be marked to market with changes in fair value recognized, along with the fixed and variable payments on these swaps, in interest expense which are expected to nearly offset each other. The Company presents the derivatives on a gross basis on the balance sheet.

The $500.0 million pay-fixed interest rate swap is a hybrid instrument in accordance with ASC 815, Derivatives and Hedging, consisting of a financing component and an embedded at-market derivative. The financing component is accounted for at amortized cost over the life of the swap while the embedded at-market derivative is accounted for at fair value on the balance sheet and designated as a cash flow hedge. This $500.0 million swap is indexed to one-month LIBOR and is net settled on a monthly basis with the counterparty for the difference between the fixed rate of 2.2025% and the variable rate based upon one-month LIBOR (subject to a floor of 0.75%) as applied to the notional amount of the swap. In connection with the transactions discussed above, no cash was exchanged between the Company and the counterparty. The

1915

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and is net settled on a monthly basis with the counterparty for the difference between the fixed rate of 2.2025% and the variable rate based upon one-month LIBOR (subject to a floor of 0.75%) as applied to the notional amount of the swap. In connection with the transactions discussed above, no cash was exchanged between the Company and the counterparty. The liability of the terminated interest rate swaps as well as the inception value of the receive-fixed interest rate swap was blended into the new pay-fixed interest rate swap. Cash settlements related to interest rate contracts will generally be classified as operating activities on the condensed consolidated statements of cash flows. The cash flows related to the portion of the hybrid instrument treated as debt are classified as financing activities in the condensed consolidated statements of cash flows while the portion treated as an at-market derivative is classified as operating activities.

See Note 10 for further information.

Foreign Currency Forward Contracts

The Company enters into foreign currency forward contracts to minimize the effect of fluctuating variable foreign currency denominated cash flows impacting Gross profit within its reported operating results. When entered, these financial instruments are designated as cash flow hedges of underlying exposures and de-designated when the foreign currency denominated sale of inventory is made to a third party. As cash flow hedges, the forward contracts are revalued at current foreign exchange rates with the changes in the valuation reflected directly in Accumulated other comprehensive (loss) income, to the extent that the hedge is effective. The gains or losses on the forward contracts reported in Accumulated other comprehensive (loss) income in equity (deficit) are reclassified into Cost of goods sold in the period or periods in which the foreign currency denominated sale of inventory is made to a third party and the contracts are de-designated. The gains or losses from changes in the fair value of foreign exchange contracts de-designated as cash flow hedges are recorded in Foreign currency ~~loss~~ (gain) loss. The Company also enters into foreign currency forward contracts that economically hedge its risk on foreign currency denominated receivables. The gains or losses from changes in fair value on these contracts are recorded in Foreign currency ~~loss~~ (gain) loss. Cash settlements related to forward currency forward contracts are classified as operating activities on the condensed consolidated statements of cash flows.

~~The~~There ~~notional~~were ~~values~~no ~~of the Company’s~~ outstanding foreign currency forward contracts ~~were~~ as ~~follows:~~of December 31, 2022 or September 30, 2022.

	June 30,2022		September 30,2021
	(dollars in thousands)
Foreign currency forward contracts	$	49,804	$	28,254

See Note 10 for further information.

Cash Flow Hedges Impact on the Condensed Consolidated Statements of Comprehensive (Loss) Income

For derivatives designated as cash flow hedges, the ~~gain~~ (loss) gain recognized in Other comprehensive (loss) income was:

	Three Months Ended June 30,				Nine Months Ended June 30,
	Three Months Ended December 31,
	2022		2021		~~2022~~		~~2021~~
	(dollars in thousands)
Interest rate swap contracts	$	8(1,~~929~~345)	$	(72,~~059)~~880	$	~~37,650~~	$	~~11,406~~
Foreign currency forward contracts	—		—		—		(117)
Total gain (loss) recognized	$	8,929	$	(7,059)	$	37,650	$	11,289

Cash Flow Hedges Impact on the Condensed Consolidated Statements of Operations

For derivatives designated as cash flow hedges, the gain reclassified from Accumulated other comprehensive (loss) income into the condensed consolidated statements of operations was:

	Three Months Ended June 30,				Nine Months Ended June 30,
	Three Months Ended December 31,
	2022		2021		~~2022~~		~~2021~~
	(dollars in thousands)
Interest rate swap contracts	$	2(1,~~913~~487)	$	2,~~669~~673	$	~~7,873~~	$	~~7,782~~
Foreign currency forward contracts	—		117		—		249
Total gain recognized	$	2,913	$	2,786	$	7,873	$	8,031

20For derivatives de-designated as cash flow hedges and economic hedges on foreign currency denominated receivables, the (gain) loss recognized directly into Foreign currency (gain) loss in the condensed consolidated statements of operations was:


	Three Months Ended December 31,
	2022		2021
	(dollars in thousands)
Foreign currency forward contracts	$	—	$	(320)

As of December 31, 2022, the Company estimates that it will recognize approximately $9.7 million of gains associated with the above contracts in net (loss) income within the next 12 months.

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For derivatives de-designated as cash flow hedges and economic hedges on foreign currency denominated receivables, the (gain) loss recognized directly into Foreign currency loss (gain) in the condensed consolidated statements of operations was:

	Three Months Ended June 30,				Nine Months Ended June 30,
	2022		2021		2022		2021
	(dollars in thousands)
Foreign currency forward contracts	$	(104)	$	(141)	$	(424)	$	776

As of June 30, 2022, the Company estimates that it will recognize approximately $1.1 million of gains associated with the above contracts in net (loss) income within the next 12 months.

Commodity Index Contracts

The Company ~~uses~~used commodity index contracts to reduce its exposure to fluctuations in cash flows relating to the purchases of aluminum and steel-based components and raw materials impacting Gross profit. The commodity index contracts ~~are~~were accounted for as financial instruments and the Company did not apply hedge accounting. There were no outstanding commodity index contracts as of December 31, 2022.

The notional values of the Company’s outstanding commodity index contracts were as follows:

	June 30,2022	September 30,2021
	December 31,2022	September 30,2022
	(volumes in pounds)
Aluminum index contracts	—	7,200,000
Steel index contracts	—	600,000
Steel index contracts	2,700,000	700,000

As financial instruments, the commodity index hedges ~~are~~were revalued at current commodity index rates with the changes in the valuation reflected directly in Cost of goods sold. The Company recorded a corresponding loss (gain) on the change in fair market value as follows:

	Three Months Ended June 30,				Nine Months Ended June 30,
	Three Months Ended December 31,
	2022		2021		~~2022~~		~~2021~~
	(dollars in thousands)
Commodity index contracts	$	~~1,527~~—	$	~~(1,508)~~221	$	38	$	~~(7,099)~~

See Note 10 for further information.

Counterparty Credit Risk

Using derivative instruments means assuming counterparty credit risk. Counterparty credit risk relates to the loss the Company could incur if a counterparty were to default on a derivative contract. The Company deals with only investment-grade counterparties and monitors the overall credit risk and exposure to individual counterparties. The Company did not experience any nonperformance by a counterparty during the ~~nine~~three months ended ~~June~~December 3031, 2022 or 2021. The Company did not require, nor did it post, collateral or security on such contracts.

7. Income Taxes

In accordance with ASC 740, Income Taxes, the Company makes its best estimate of the annual effective tax rate at the end of each interim period, and the impact of discrete items, if any, and adjusts the rate as necessary. AsThe ~~of June 30, 2022, the~~ Company ~~applied~~recorded ~~its~~income ~~estimated annual effective~~ tax ~~rate~~expense of 32$5.1% ~~to its loss before taxes of $140.9~~ million for the ~~nine~~three months ended ~~June~~December 3031, 2022, ~~and~~primarily ~~adjusted~~related ~~for~~to the ~~impact~~tax ofexpense ~~discrete~~incurred ~~items~~in the Company’s foreign subsidiaries, ~~resulting~~which resulted in ~~income~~an effective tax ~~expense~~rate of $0(4.17)%, ~~million~~as ~~and~~compared ~~$37.0~~to ~~million for~~ the ~~three~~federal ~~and~~statutory ~~nine~~rate ~~months~~of ~~ended June 30, 2022, respectively~~21.0%. ~~This~~The ~~resulted~~difference in the effective tax ~~rates~~rate ofwas ~~(0.2)%~~due ~~and~~to ~~(26.2)%~~foreign ~~for~~taxes ~~the~~owed ~~three~~by ~~and~~foreign ~~nine~~subsidiaries, ~~months~~previously ~~ended~~established ~~June 30,~~valuation ~~2022,~~allowances ~~respectively,~~on asU.S. ~~compared~~and tocertain ~~the~~foreign ~~federal~~pre-tax ~~statutory~~losses ~~rate~~and ofchanges 21in existing uncertain tax positions.~~0%.~~

The ~~effective~~Company recorded an income tax ~~rate~~benefit ~~was~~of ~~different~~$30.4 ~~than~~million for the ~~statutory~~three ~~rate~~months ~~primarily~~ended ~~due~~December 31, to2021, ~~the~~resulting ~~establishment~~in an effective tax rate of a29.0%, ~~valuation~~as ~~allowance~~compared to ~~reduce~~ the ~~net~~federal ~~deferred~~statutory ~~tax~~rate ~~assets~~of at21.0%. ~~Weber~~The ~~Inc.~~effective Intax ~~evaluating~~rate was higher than the ~~Company's~~statutory ~~ability~~rate due to ~~recover~~foreign ~~deferred~~taxes ~~tax~~owed ~~assets~~by foreign subsidiaries, ~~all~~uncertain ~~available~~tax ~~positive~~positions and ~~negative~~increases ~~evidence~~on ~~was~~certain ~~considered,~~previously ~~including~~established ~~scheduled~~valuation ~~reversal~~allowances. ofThese ~~deferred~~unfavorable ~~tax~~expenses ~~liabilities,~~were ~~operating~~partially ~~results~~offset ~~and~~by ~~forecasts~~a ofnoncontrolling ~~future~~interest ~~taxable~~benefit ~~income~~to inadjust ~~each~~for ofWeber ~~the~~Inc.'s ~~jurisdictions~~allocable inshare ~~which~~of ~~the~~Weber ~~Company~~HoldCo ~~operates.~~LLC's ~~Due~~net toloss for the quarter.

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the cumulative loss that was incurred over the period including fiscal year 2020, fiscal year 2021 and the nine months ending June 30, 2022, the Company established a valuation allowance to reduce the net deferred tax assets at Weber Inc. as the deferred tax assets were not more likely than not to be realized, resulting in income tax expense of $22.5 million during the nine months ended June 30, 2022.

The Company recorded income tax expense of $4.0 million and $19.4 million for the three and nine months ended June 30, 2021, respectively, resulting in effective tax rates of 18.4% and 18.4%, respectively, as compared to the federal statutory rate of 21.0%. The difference in the rate was due to nontaxable U.S. flow-through income and a discrete benefit resulting from releases of Germany, United Kingdom and South Africa valuation allowances. This benefit was partially offset by foreign taxes owed by foreign subsidiaries.

Tax Receivable Agreement

In connection with the IPO, the Company entered into the Tax Receivable Agreement with the pre-IPO LLC Members, which provides for the payment by Weber Inc. of 85% of certain cash tax benefits that Weber Inc. actually realizes, or in some cases is deemed to realize. The amounts payable under the Tax Receivable Agreement will vary depending upon a number of factors, including the amount, character and timing of the taxable income of Weber Inc. in the future. As of September 30, 2021, the Company recognized a liability of $9.2 million as an estimate of Tax Receivable Agreement payments that would be paid based on its estimates of future taxable income.

As of June 30, 2022, the Company determined that making a payment under the Tax Receivable Agreement was not probable because the Company does not believe it has sufficient taxable income to utilize deductions of certain tax attributes that would generate cash savings in U.S. federal, state and local income tax or franchise tax and result in a payment under the Tax Receivable Agreement. This conclusion was primarily a result of the required valuation allowance established during the quarter. As a result, the Company remeasured the Tax Receivable Agreement liability to zero in the condensed consolidated balance sheets as of June 30, 2022 and recorded a Gain on Tax Receivable Agreement liability remeasurement of $9.2 million in the condensed consolidated statements of operations for the three months ended June 30, 2022.

8. Commitments and Contingencies

Warranty

The Company offers warranties on most of its products. The specific terms and conditions of the warranties offered by the Company vary depending upon the product sold. The Company estimates the costs that may be incurred under its warranty plans and the period for which claims are honored, and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the Company’s warranty liability include the number of units sold, the type of products sold, historical and anticipated rates of warranty claims and cost per claim. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.

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The following is an analysis of product warranty reserves and charges against those reserves (dollars in thousands):

Balance at September 30, 2021	$	28,300
Balance at September 30, 2022	$	28,743
Accrual for warranties issued	~~7,737~~635
Warranty settlements made	(~~4,780~~893)
Balance at June 30, 2022	$	31,257
Balance at December 31, 2022	$	28,485

The balance of warranty reserves recorded in Other long-term liabilities was $~~25.3 million and $~~23.12 million as of ~~June~~both December 3031, 2022 and September 30, ~~2021, respectively~~2022. The remaining current balances of $65.03 million and $5.25 million as of ~~June~~December 3031, 2022 and September 30, ~~2021~~2022, respectively, were recorded in Accrued expenses.

Contingent Consideration

As part of the acquisition of all aspects of the business related to iGrill and Kitchen Thermometer products from iDevices, LLC (“iDevices”), the Company has future cash payments due to iDevices in conjunction with an earn-out and development agreement. Under this agreement, the Company paid iDevices a minimum of $8.0 million, and then must pay additional royalty payments at fixed rates on iGrill and Kitchen Thermometer products sold for a total of 10 years or up to $15.0 million, whichever comes first. Under the terms of the earn-out and development agreement, the Company paid $0.1 million ~~and $0.2 million~~ during both the ~~nine~~three months ended ~~June~~December 3031, 2022 and 2021. The fair value of the contingent consideration liability was $0.6 million at both December 31, ~~respectively~~2022 and September 30, 2022. The fair value of these estimated future cash payments was based on valuation methods and management’s best estimates and was recorded in Other long-term liabilities in the condensed consolidated balance sheets.

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contingent consideration liability was $0.4 million and $0.5 million at June 30, 2022 and September 30, 2021, respectively. The fair value of these estimated future cash payments was based on valuation methods and management’s best estimates and was recorded in Other long-term liabilities in the condensed consolidated balance sheets.

Europe Manufacturing Facility

During October 2021, the Company executed an agreement to expand the Europe Manufacturing Facility in Poland. The Company did not control the asset under construction, and was therefore not deemed the accounting owner of the asset under construction.

The lease term is 14 years and commenced upon completion of the building, which occurred during the quarter ended June 30, 2022. Upon commencement, the Company recorded a right-of-use asset and a lease liability. In addition, the Company has options to extend the lease term for five-year periods as allowed by local laws and regulatory requirements. The annual cash rental payments due under the lease agreement during the first year will be approximately $1.2 million. The lease also requires the Company to pay real estate taxes and maintenance costs on the facility. No lease payments were made during the nine months ended June 30, 2022.

Legal Proceedings

The Company is subject to a variety of investigations, claims, suits and other legal proceedings that arise from time to time in the ordinary course of business including, but not limited to, intellectual property, employment, tort and breach of contract matters, as well as securities litigation. The Company currently believes that the outcomes of such proceedings, individually and in the aggregate, will not have a material adverse impact on its business, cash flows, financial position or results of operations. Any legal proceedings are subject to inherent uncertainties, and management’s view of these matters and their potential effects may change in the future.

9. Related Parties

Periodically, the Company engages in transactions with related parties, which include entities that are owned in whole or in part by certain owners or employees of the Company.

The Company ~~has~~leases ~~historically leased certain manufacturing and~~ office facilities in ~~the~~Australia ~~U.S.~~ from a related party. ~~During~~Rental expense amounted to $0.2 million for the ~~fourth~~both ~~quarter~~three ofmonths ~~fiscal~~ended ~~year~~December 31, 2022 and 2021,. ~~the~~The Company had related party ~~sold~~operating ~~the~~right-of-use ~~leased~~assets ~~properties~~of to$1.0 amillion ~~third~~and ~~party~~$1.1 ~~Accordingly~~million at December 31, ~~the~~2022 ~~Company~~and ~~will~~September 30, no2022, ~~longer~~respectively. ~~recognize~~Additionally, ~~these~~the ~~leases~~Company ashad related party ~~transactions.~~current ~~Rental~~operating ~~expense~~lease ~~amounted~~liabilities toof ~~zero and~~ $0.34 million ~~for~~at ~~the~~both ~~three~~December 31, ~~months~~2022 ~~ended~~and ~~June~~September 30, 2022 and ~~2021,~~non-current ~~respectively,~~operating ~~and~~lease ~~zero~~liabilities ~~and~~of $0.87 million ~~for~~and ~~the~~$1.1 ~~nine~~million ~~months~~at ~~ended June~~December 3031, 2022 and ~~2021~~September 30, 2022, respectively.

~~During~~The ~~fiscal year 2021, the~~ Company ~~leased~~has ~~office~~a ~~facilities~~royalty inagreement ~~Australia~~with ~~from~~ a related party. ~~Rental~~for ~~expense~~the ~~amounted~~use toof ~~$0.2 million and zero for~~ the ~~three~~Company’s ~~months~~trademark. ~~ended~~Royalty ~~June 30,~~revenue ~~2022~~from ~~and~~this ~~2021,~~agreement ~~respectively,~~was ~~and~~ $0.52 million and ~~zero~~$0.1 million for the ~~nine~~three months ended ~~June~~December 3031, 2022 and 2021, respectively. The Company had ~~related~~a ~~party~~royalty ~~operating~~receivable ~~right-~~of~~-use~~ ~~assets of~~ $10.~~3 million and $~~1.6 million atfrom ~~June 30,~~this ~~2022 and September 30, 2021, respectively. Additionally, the Company had~~ related party ~~current operating lease liabilities of $0.4 million and $0.4 million and non-current operating lease liabilities of $0.9 million and $1.2 million~~ at ~~June~~both December 3031, 2022 and September 30, ~~2021, respectively~~2022.

~~The~~As ~~Company~~described ~~has~~in aNote ~~royalty~~5, ~~agreement~~in ~~with~~November a2022 ~~related party for~~ the ~~use of the~~ Company’s ~~trademark.~~entered ~~Royalty~~into ~~revenue from this agreement was $0.1 million for both~~ the ~~three~~Unsecured ~~months~~12% ~~ended~~Term ~~June 30,~~Loan ~~2022~~ and ~~2021,~~in ~~and~~December ~~$0.4~~2022 ~~million~~the ~~and~~Company ~~$0.1~~entered ~~million~~into ~~for~~ the ~~nine~~Unsecured ~~months~~15% ~~ended~~Credit ~~June 30~~Facility, ~~2022~~which ~~and~~were ~~2021,~~both ~~respectively.~~related ~~Royalty~~party ~~revenues~~transactions. In ~~for~~connection ~~the~~with ~~nine~~these ~~months~~related ~~ended~~party ~~June 30~~loans, ~~2021 reflect~~ the ~~impact~~Company ofincurred afinancing ~~retroactive~~costs ~~discount~~of ~~totaling~~ $05.18 million, which ~~was~~were ~~granted~~paid in kind to the related ~~party as a COVID-19 concession~~parties. In ~~The~~addition, the Company ~~had~~incurred ainterest ~~royalty receivable~~ of $01.23 million ~~and~~during ~~$0.1~~the ~~million~~three ~~from~~months ~~this~~ended ~~related party at June~~December 3031, 2022, ~~and~~which ~~September 30,~~was ~~2021,~~paid ~~respectively~~in kind to the related parties.

During fiscal year 2019, the Company entered into a series of transactions with June. As a result of the acquisition described in Note 2, June has become a wholly-owned subsidiary of the Company and is consolidated in its financial statements. As such, the Company no longer records related party transactions with June. Royalty expense was zero for both the three months ended June 30, 2022 and 2021, and zero and $0.3 million for the nine months ended June 30, 2022 and 2021, respectively.18

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remeasured during the third quarter of fiscal year 2022 and the liability was decreased to zero as of June 30, 2022 from $9.2 million as of September 30, 2021. The Tax Receivable Agreement is considered a related party transaction.

In connection with the Incremental Term Loan discussed in Note 5, the Company paid arrangement fees and structuring fees totaling $0.6 million to a related party. These fees were capitalized as part of the total deferred financing costs during the quarter ended March 31, 2022.

In March 2022, the Company reassigned the beneficiary of a life insurance policy to a related party pursuant to a preexisting agreement. As a result, the Company recognized selling, general and administrative expense of zero and $0.4 million for the three and nine months ended June 30, 2022, respectively.

The Company historically had notes receivable due from members, which were fully repaid during the first quarter of fiscal year 2022. The balance of the notes receivable due from members, including interest, was zero and $11.3 million at June 30, 2022 and September 30, 2021, respectively. Related party interest income associated with the full recourse member notes was immaterial for the three and nine months ended June 30, 2022 and 2021. See Note 15 for further information.

10. Fair Value of Financial Instruments

With respect to financial assets and liabilities, fair value is defined as the exchange price that would be received for an asset, or paid to transfer a liability (an exit price), in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy has been established based on three levels of inputs, of which the first two are considered observable and the last unobservable.

•Level 1—Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets.

•Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily available pricing sources for comparable instruments.

•Level 3—Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own assumptions of the data that market participants would use in pricing the asset or liability based on the best information available in the circumstances.

The Company had interest rate swap contracts held with financial institutions as of ~~June~~December 3031, 2022 and September 30, ~~2021~~2022, classified as Level 2 financial instruments, which are valued using observable underlying interest rates and market-determined risk premiums at the reporting date.

The Company had ~~foreign~~commodity ~~currency~~index ~~forward~~ contracts held with financial institutions as of ~~June~~September 30, 2022 ~~and September 30~~, ~~2021,~~ classified as Level 2 financial instruments, which ~~were~~are valued using observable ~~forward~~commodity ~~foreign~~index ~~exchange~~ rates at the reporting date.

The Company had ~~commodity~~a ~~index~~contingent ~~contracts~~consideration ~~held~~liability ~~with financial institutions~~ as of ~~June~~December 3031, 2022 and September 30, ~~2021~~2022, classified as a Level 23 ~~financial instruments~~instrument, ~~which~~in ~~are~~conjunction ~~valued~~with ~~using~~its ~~observable~~acquisition ~~commodity~~of ~~index~~all ~~rates~~aspects atof the ~~reporting~~business ~~date~~related to iGrill and Kitchen Thermometer products from iDevices. The fair value of these estimated future cash payments was determined based on valuation methods and estimates of future cash flows. See Note 8 for further details.

The Company had a contingent consideration liability as of June 30, 2022 and September 30, 2021, classified as a Level 3 instrument, in conjunction with its acquisition of all aspects of the business related to iGrill and Kitchen Thermometer products from iDevices. The fair value of these estimated future cash payments was determined based on valuation methods and estimates of future cash flows. See Note 8 for further details.

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The fair value of financial assets and liabilities measured on a recurring basis was as follows:

	June 30,2022		Level 1		Level 2		Level 3
	December 31,2022		Level 1		Level 2		Level 3
	(dollars in thousands)
Prepaid expenses and other current assets:
Foreign currency forward contracts	$	104	$	—	$	104	$	—
Interest rate swap contracts	$	26,998	$	—	$	26,998	$	—
Interest rate swap contracts	11,926		—		11,926		—
Total	$	26,998	$	—	$	26,998	$	—
Total	$	12,030	$	—	$	12,030	$	—
Other long-term assets:
Interest rate swap contracts	$	4150,~~973~~880	$	—	$	4150,~~973~~880	$	—
Total	$	4150,~~973~~880	$	—	$	4150,~~973~~880	$	—
Accrued expenses:
Commodity index contracts	$	277	$	—	$	277	$	—
Interest rate swap contracts	$	12,774	$	—	$	12,774	$	—
Interest rate swap contracts	6,235		—		6,235		—
Total	$	12,774	$	—	$	12,774	$	—
Total	$	6,512	$	—	$	6,512	$	—
Other long-term liabilities:
Interest rate swap contracts	$	2425,~~780~~520	$	—	$	2425,~~780~~520	$	—
Contingent consideration	~~404~~551		—		—		~~404~~551
Total	$	2526,~~184~~071	$	—	$	2425,~~780~~520	$	~~404~~551

	September 30,2021		Level 1		Level 2		Level 3
	(dollars in thousands)
Prepaid expenses and other current assets:
Foreign currency forward contracts	$	134	$	—	$	134	$	—
Commodity index contracts	3,378		—		3,378		—
Interest rate swap contracts	8,762		—		8,762		—
Total	$	12,274	$	—	$	12,274	$	—
Other long-term assets:
Interest rate swap contracts	$	27,267	$	—	$	27,267	$	—
Total	$	27,267	$	—	$	27,267	$	—
Accrued expenses:
Interest rate swap contracts	$	14,688	$	—	$	14,688	$	—
Total	$	14,688	$	—	$	14,688	$	—
Other long-term liabilities:
Interest rate swap contracts	$	40,392	$	—	$	40,392	$	—
Contingent consideration	503		—		—		503
Total	$	40,895	$	—	$	40,392	$	503

The carrying amounts reported in the Company’s condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, and trade accounts payable approximate their fair values due to the short-term nature of these instruments. The carrying amounts reported in the Company’s condensed consolidated balance sheets for the variable rate, revolving loan facility also approximate its fair value. The fair value of the fixed rate debt is not readily determinable, because the information is not available.

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	September 30, 2022		Level 1		Level 2		Level 3
	(dollars in thousands)
Prepaid expenses and other current assets:


Interest rate swap contracts	$	22,777	$	—	$	22,777	$	—
Total	$	22,777	$	—	$	22,777	$	—
Other long-term assets:
Interest rate swap contracts	$	60,232	$	—	$	60,232	$	—
Total	$	60,232	$	—	$	60,232	$	—
Accrued expenses:
Commodity index contracts	$	62	$	—	$	62	$	—
Interest rate swap contracts	10,590		—		10,590		—
Total	$	10,652	$	—	$	10,652	$	—
Other long-term liabilities:
Interest rate swap contracts	$	28,381	$	—	$	28,381	$	—
Contingent consideration	610		—		—		610
Total	$	28,991	$	—	$	28,381	$	610

11. Stock-Based Compensation

The Weber Inc. Omnibus Incentive Plan (the “2021 Plan”) provides for the issuance of up to 22,694,608 shares of Class A common stock in connection with equity awards granted under the 2021 Plan. The Company has three types of share-based compensation awards outstanding under the 2021 Plan: profits interest awards, options and restricted stock units (“RSUs”).

Profits Interest Awards

Prior to the Company's IPO, the Company granted profits interest units with vesting periods ranging from one to five years to certain key employees in consideration for their services to or for the benefit of the Company. A portion of the profits interest units vest based on service and a portion of the awards based on service as well as the Company’s achievement of certain performance objectives associated with net sales (“hybrid units”).

The profits interest units have distribution thresholds determined on a per common unit in Weber HoldCo LLC (“LLC unit”) basis with the holder receiving, upon exercise, a value in LLC units equal to the difference between the current fair value per LLC unit less the distribution threshold. Therefore, the distribution thresholds serve as a cashless exercise price, with holders receiving their share of the value of the Company’s implied equity value in excess of the distribution threshold. Once vested, the profits interests represent profits interest ownership in the Company tied solely to the accretion, if any, in the value of the Company in excess of the distribution threshold.

~~Weber~~During ~~Inc.~~fiscal ~~paid~~year a2022, ~~dividend~~Weber ~~of $0~~Inc.04 ~~per~~paid ~~share~~dividends to holders of Class A common stock ~~on December 17, 2021, March 18, 2022 and June 17, 2022~~. Profits interest units that were outstanding at the time of the dividends were adjusted pursuant to pre-existing anti-dilution provisions in the Company’s equity incentive plan documents. The adjustments reduced the distribution thresholds of outstanding profits interest units by the amount of the dividend per share. The adjustments did not result in incremental stock-based compensation expense as the anti-dilutive adjustments were required by pre-existing terms included within the awards. There were no changes to the profits interest units distribution thresholds during the three months ended December 31, 2022.

~~The following table summarizes the Company’s profits interest units distribution thresholds as of June 30, 2022, which serve as a cashless exercise price:~~ 20

Distribution Threshold (per unit)(1)	Service-Based UnitsOutstanding	Hybrid UnitsOutstanding
$5.38 – $6.88	—	—
$6.89 – $8.38	—	—
$8.39 – $9.38	2,011,499	1,118,019
$9.39 – $10.63	1,005,749	559,010
Total	3,017,248	1,677,029

_____________

(1)The exercise price of units outstanding as of June 30, 2022 reflect the non-cash adjustments to the units as a result of the cash dividends paid by the Company. As such, the distribution thresholds noted above have been reduced by $0.12 per unit to reflect the adjustment.

The following table summarizes the Company’s profits interest units distribution thresholds as of June 30, 2022, which serve as a cashless exercise price, and held by certain individuals who received a cash distribution during certain quarters in lieu of a distribution threshold reduction:

Distribution Threshold (per unit)(1)	Service-Based UnitsOutstanding	Hybrid UnitsOutstanding
$5.42 – $6.92	4,142,102	—
$6.93 – $8.42	4,142,102	—
$8.43 – $9.42	3,469,922	—
$9.43 – $10.67	1,289,524	—
Total	13,043,650	—

_____________

(1) The exercise price of units outstanding as of June 30, 2022 reflect the non-cash adjustments to the unit thresholds as a result of the cash dividends paid by the Company. As of June 30, 2022, certain employees received a total cash

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~~distribution~~The ~~payment~~following oftable ~~$0.04~~summarizes ~~per~~the ~~unit~~Company’s inprofits ~~lieu~~interest ofaward aactivity ~~distribution~~during ~~threshold reduction. As such,~~ the ~~distribution~~three ~~thresholds~~months ~~noted~~ended ~~above~~December 31, ~~have been reduced by $0.08 per unit to reflect the adjustment.~~2022:

The following tables summarize the Company’s profits interest award activity during the nine months ended June 30, 2022:


	Service-Based Units					Hybrid Units
	Units	Weighted Average Exercise Price		Weighted Average Fair Value		Units	Weighted Average Exercise Price		Weighted Average Fair Value
Nonvested units, September 30, 2022	2,736,414	$	8.64	$	7.19	1,185,180	$	9.50	$	8.09

Performance adjustments(1)	—	$	—	$	—	(266,665)	$	9.50	$	7.95
Nonvested units, December 31, 2022	2,736,414	$	8.64	$	7.19	918,515	$	9.50	$	8.91

	Service-Based Units					Hybrid Units
	Units	Weighted Average Exercise Price		Weighted Average Fair Value		Units	Weighted Average Exercise Price		Weighted Average Fair Value
Nonvested units,September 30, 2021	11,713,015	$	8.21	$	8.97	1,777,770	$	9.50	$	7.88
Vested units	(3,802,263)	$	8.04	$	8.82	(592,590)	$	9.50	$	7.48
Nonvested units, June 30, 2022(1)(2)	7,910,752	$	8.15	$	9.04	1,185,180	$	9.50	$	8.09

	Service-Based Units					Hybrid Units
	Units	Weighted Average Exercise Price		Weighted Average Fair Value		Units	Weighted Average Exercise Price		Weighted Average Fair Value
Vested units,September 30, 2021	4,347,883	$	7.76	$	9.15	—	$	—	$	—
Vested units	3,802,263	$	8.04	$	8.82	592,590	$	9.50	$	7.48
Adjustment to vested hybrid units(3)	—	$	—	$	—	(100,741)	$	9.50	$	7.48
Vested units, June 30, 2022(1)(2)(4)(5)	8,150,146	$	7.85	$	9.00	491,849	$	9.50	$	7.48

_____________

(1)The ~~aggregate~~hybrid ~~intrinsic~~awards ~~value~~vest based on achievement of ~~all~~a ~~nonvested~~performance ~~and~~target. ~~vested~~For ~~service-based~~the ~~units~~awards ~~outstanding~~that ~~was~~will ~~$14.1~~vest ~~million.~~during the second quarter of fiscal year 2023, 55% of the awards met the performance target resulting in a 45% reduction in the number of units that will vest.

~~(2)The~~During ~~aggregate~~the ~~intrinsic~~three ~~value~~months ended December 31, 2022, there were no profits interest unit awards granted or vested. As of ~~all~~December 31, ~~nonvested~~2022, there were 9,701,516 vested profits interest service-based units and 491,849 vested profits interest hybrid units. ~~outstanding~~As of December 31, 2022, there was $34.65 million and $1.2 million of total unrecognized compensation cost related to nonvested profits interest service-based units and hybrid units, respectively. The remaining unrecognized compensation cost is expected to be recognized over a weighted-average period of 0.5 years for service-based units and 0.1 years for hybrid units.

(3)The hybrid awards vest based on achievement of a performance target. For the awards that vested during the second quarter of fiscal year 2022, 83% of the awards met the performance target resulting in a 17% reduction in the number of vested units.

(4)The aggregate intrinsic value of all vested service-based units was $5.9 million.

(5)The aggregate intrinsic value of all vested hybrid units was $1.2 million.

As of June 30, 2022, there was $16.6 million and $4.0 million of total unrecognized compensation cost related to nonvested profits interest units for service-based vesting units and hybrid units, respectively. The remaining unrecognized compensation cost is expected to be recognized over a weighted-average period of 0.6 years for service-based units and 0.6 years for hybrid units.

Options

During the ~~nine~~three months ended ~~June~~December 3031, 2022, ~~the~~zero ~~Company granted~~ options towere certain employees of the Company. Options are awarded with an exercise price equal to the market price on the date of the grant and become exercisable in one to three years after grant. Options expire ten years after the date of grant. The Company granted ~~1,038,866 options during the nine months ended June 30, 2022. The weighted average exercise price of the options granted was $18.05 per option~~ and ~~the weighted average fair value was $7.06 per option. During the nine months ended June 30~~168,115 ~~2022, zero~~ options vested ~~and 58,651 options were forfeited~~. ~~As of June 30, 2022, the outstanding options had an intrinsic value of zero.~~

The fair value and corresponding stock-based compensation expense for options was determined using the Black-Scholes option pricing model. The weighted-average assumptions used to estimate the fair value of the options as of June 30, 2022, were as follows:

Expected term (in years)	6.0
Risk-free interest rate	1.24	%
Expected volatility	39.01	%
Expected dividend yield	—	%

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The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected holding period. The Company assumed a dividend yield of zero percent when valuing the options because, as of the grant date, the Company did not have a history of paying dividends. Expected volatility is based on the expected volatility of comparable peer companies that are publicly traded. The expected term represents the period of time that awards granted are expected to be outstanding. The Company elected to use the simplified method to estimate the expected holding period because there is not sufficient information to estimate post-vesting exercise behavior. As such, the Company will continue to use this methodology until there is sufficient history to provide a reasonable basis on which to estimate the expected term.

As of June 30, 2022, there was $3.5 million of total unrecognized compensation cost related to nonvested options. The remaining unrecognized compensation cost is expected to be recognized over a weighted-average period of 0.8 years.

RSUs

During the ~~nine~~three months ended ~~June~~December 3031, 2022 the Company granted RSUs to certain employees of the Company. The RSUs vest over a period ranging from ~~three~~one ~~months~~year to three years. The RSUs accrue dividend equivalents associated with the underlying shares of Class A common stock as the Company declares dividends. Dividends will generally be paid to holders of RSUs in cash upon the vesting date of the associated RSU and will be forfeited if the RSU does not vest. RSUs that were converted from equity awards outstanding prior to the Company’s IPO do not accrue dividends until they are fully vested. The fair value of the RSU awards was calculated utilizing the closing day stock price on the date of grant. ~~No RSUs were granted or outstanding during the nine months ended June 30, 2021.~~ Upon vesting of the award, the Company will issue shares of Class A common stock to the award holder. At the time of issuance, the Company will typically withhold the number of shares to satisfy the statutory withholding tax obligation and deliver the net number of resulting shares vested to award holder.

The following tables summarize the Company’s RSUs and activity during the ~~nine~~three months ended ~~June~~December 3031, 2022:

	Total RSUs
	Number of RSUs	Weighted Average Grant Date Fair Value
Nonvested, September 30, 2021	2,086,541	$	17.56
Nonvested, September 30, 2022	3,156,752	$	17.06
Granted	24,~~625~~756,~~545~~698	$	176.0482
Vested	(~~478~~1,~~224~~286,906)	$	1217.5273
Forfeited	(~~375~~707,~~514~~326)	$	17.8231
Nonvested, June 30, 2022	3,858,348	$	17.40
Nonvested, December 31, 2022	5,919,218	$	8.65

	Total RSUs
	Number of RSUs	Weighted Average Grant Date Fair Value
Vested, September 30, 2021	776,544	$	17.59
Units vested	478,224	$	12.52
Units settled(1)	(432,435)	$	11.97
Vested, June 30, 2022	822,333	$	16.44

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	Total RSUs
	Number of RSUs	Weighted Average Grant Date Fair Value
Vested- Not settled, September 30, 2022	914,859	$	16.16
Units vested	1,286,906	$	17.73
Units settled(1)	(886,770)	$	17.58
Vested- Not settled, December 31, 2022	1,314,995	$	16.73

_____________

(1)For RSUs granted after the Company's IPO, the settlement of awards occurs on the vesting date. For RSUs that were converted from Pre-IPO Management Incentive Compensation Plan awards, the post vesting settlement of awards can occur up to ten years after the vesting date.

As of ~~June~~December 3031, 2022, there was $3141.45 million of total unrecognized compensation cost related to RSUs. The remaining unrecognized compensation cost is expected to be recognized over a weighted-average period of 0.79 years.

Employee Stock Purchase Plan

In ~~August~~December ~~2021~~2022, the ~~Company's~~Compensation ~~Board~~Committee ofapproved ~~Directors (~~the ~~“Board”)~~termination ~~approved~~of the Employee Stock Purchase Plan (“ESPP”)~~. The ESPP allows eligible employees to purchase~~, ~~through~~which ~~payroll~~was ~~deductions,~~effective aimmediately. ~~limited~~There ~~number~~were ofno shares ofpurchased ~~Class~~under Athe ~~common~~ESPP ~~stock~~ during ~~pre-specified offering periods at a discount established by~~ the ~~Company's~~three ~~Compensation~~months ~~Committee.~~ended The purchase price will be equal to the lesser of (i) 85% of the fair market value of a share on the first trading day of the offering period and (ii) 85% of the fair market value of a share on the applicable purchase date. For the ESPPDecember 31, a 2022.

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total of 9,077,843 shares of Class A common stock were reserved for issuance and no shares have been issued during the nine months ended June 30, 2022. Withholding periods began on January 1, 2022.

The ESPP is accounted for as a compensatory plan since the number of shares a participant is permitted to purchase is not fixed based on the stock price at the beginning of the offering period and the expected withholdings. The ESPP enables a participant to “buy-up” to the plan’s share limit, if the stock price is lower on the purchase date. As a result, the fair value of the awards granted under the ESPP is calculated using the Black-Scholes option pricing model at the beginning of each offering period as the sum of:

•15% of the share price of an unvested share at the beginning of the offering period,

•85% of the fair market value of a six-month call on the unvested share aforementioned, and

•15% of the fair market value of a six-month put on the unvested share aforementioned.

Summary of Stock-Based Compensation Expense

The table below summarizes stock-based compensation expense recognized by award type:

	Three Months Ended June 30,				Nine Months Ended June 30,
	Three Months Ended December 31,
	2022		2021		~~2022~~		~~2021~~
	(dollars in thousands)
Profits interest awards:
Service-based profits interest awards	$	52,~~840~~385	$	538,~~795~~984	$	~~22,769~~	$	~~83,830~~
Hybrid profits interest awards	(1,~~111~~169)		—2,417		~~4,609~~		—
Total profits interest awards	61,~~951~~216		5311,~~795~~401		~~27,378~~		~~83,830~~
Options	~~938~~295		—957		~~2,662~~		—
Pre-IPO Management Incentive Compensation Plan awards	—		3,408		—		5,422
RSUs	7,163		12,007
RSUs	9,380		—		33,678		—
ESPP	(137)		—
ESPP	71		—		178		—
Total stock-based compensation expense(1)	$	8,537	$	24,365
Total stock-based compensation expense(1)	$	17,340	$	57,203	$	63,896	$	89,252

_____________

(1)In addition to the stock-based compensation expense recognized for the awards listed above, zero and $~~4.5 million of expense was recognized in relation to partial recourse notes during the three months ended June 30, 2022 and 2021, respectively, and $~~1.1 million ~~and $4.9 million~~ of expense was recognized inrelated ~~relation~~ to partial recourse member notes for the ~~nine~~three months ended ~~June~~December 3031, 2022 and 2021, respectively. ~~See Note 15 for further information.~~

12. Segments

The Company has three operating segments, Americas, ~~which consists of Canada~~Europe, ~~Chile, Mexico and the United States; the European,~~ Middle East and ~~African~~Africa ~~regions~~ (“EMEA”); and ~~the~~ Asia-Pacific ~~region~~ (“APAC”)~~, which includes Australia and New Zealand~~. The Company’s reportable segments consist of Americas, EMEA and APAC. Corporate/Other is not an operating segment and includes unallocated corporate and certain supply chain expenses and assets (consisting primarily of cash, land, buildings and equipment, certain intangible assets (trademark) and deferred tax assets), inter-segment eliminations and other adjustments to segment results necessary for the presentation of consolidated financial results in accordance with GAAP. Internal revenue transactions between the Company’s segments are immaterial. Each operating segment derives its revenues from the provision of gas, charcoal, electric and pellet grills and related accessories to customers.

The Company’s Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer (“CEO”). The CEO reviews financial information presented on a consolidated basis, accompanied by disaggregated information about the Company’s revenue and profitability, for purposes of making operating decisions, assessing financial performance and allocating resources. The CODM receives discrete financial information by segment.

The CODM reviews adjusted income (loss) from operations as the key segment measure of performance. Adjusted income (loss) from operations is defined as income (loss) from operations adjusted for unallocated net expenses, stock/unit-based compensation, impairment costs and gain on disposal of assets held for sale. Adjusted income (loss) from operations 22

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~~excludes~~Company’s ~~interest~~revenue ~~expense,~~and ~~net~~profitability, ~~loss~~for ~~from~~purposes ~~early extinguishment~~ of ~~debt,~~making ~~income~~operating ~~taxes~~decisions, ~~gain~~assessing ~~from~~financial ~~investments~~performance inand ~~unconsolidated~~allocating ~~affiliates,~~resources. ~~gain~~The ~~from~~CODM ~~Tax~~receives ~~Receivable~~discrete ~~Agreement~~financial ~~remeasurement~~information ~~and~~by ~~other expense~~segment.

The CODM reviews adjusted loss from operations as the key segment measure of performance. Adjusted loss from operations is defined as loss from operations adjusted for unallocated net expenses, stock-based compensation and restructuring costs. Adjusted loss from operations excludes interest expense, net, and income taxes.

The information below summarizes key financial performance measures by reportable segment:

	Three Months Ended June 30, 2022
	Three Months Ended December 31, 2022
	Americas		EMEA		APAC		Corporate/Other		Total
	(dollars in thousands)
Net sales	$	~~273~~97,~~571~~508	$	~~232~~26,~~805~~687	$	2140,~~560~~704	$	—	$	~~527~~164,~~936~~899
Adjusted income (loss) from operations(1)	$	11,753	$	41,248	$	(3,483)	$	(53,537)	$	(4,019)
Adjusted loss from operations(1)	$	1,528	$	(9,841)	$	10,980	$	(47,721)	$	(45,054)
Depreciation and amortization	$	2,~~397~~289	$	~~284~~166	$	1,~~434~~347	$	11,~~303~~304	$	15,~~418~~106
Capital expenditures	$	~~407~~333	$	~~179~~20	$	~~799~~332	$	1623,~~703~~755	$	1824,~~088~~440
	Three Months Ended June 30, 2021
	Three Months Ended December 31, 2021
	Americas		EMEA		APAC		Corporate/Other		Total
	(dollars in thousands)
Net sales	$	~~339~~156,~~441~~494	$	~~306~~62,~~668~~985	$	2263,~~758~~662	$	—	$	~~668~~283,~~867~~141
Adjusted income (loss) from operations(1)	$	61,206	$	108,380	$	1,989	$	(69,996)	$	101,579
Adjusted loss from operations(1)	$	23,286	$	10,269	$	19,347	$	(102,742)	$	(49,840)
Depreciation and amortization	$	2,~~331~~307	$	~~417~~307	$	1,~~527~~400	$	79,~~804~~773	$	1213,~~079~~787
Capital expenditures	$	26147	$	~~8,836~~910	$	~~503~~154	$	1324,~~784~~665	$	2325,~~149~~876

	Nine Months Ended June 30, 2022
	Americas		EMEA		APAC		Corporate/Other		Total
	(dollars in thousands)
Net sales	$	735,712	$	563,675	$	118,984	$	—	$	1,418,371
Adjusted income (loss) from operations(1)	$	62,904	$	129,686	$	19,880	$	(195,440)	$	17,030
Depreciation and amortization	$	7,002	$	880	$	4,250	$	32,569	$	44,701
Capital expenditures	$	634	$	1,309	$	2,308	$	76,111	$	80,362
	Nine Months Ended June 30, 2021
	Americas		EMEA		APAC		Corporate/Other		Total
	(dollars in thousands)
Net sales	$	891,649	$	617,995	$	122,532	$	—	$	1,632,176
Adjusted income (loss) from operations(1)	$	178,246	$	206,516	$	28,963	$	(163,976)	$	249,749
Depreciation and amortization	$	4,474	$	1,287	$	2,254	$	24,392	$	32,407
Capital expenditures	$	183	$	11,956	$	1,162	$	27,202	$	40,503

_____________

(1)Adjusted ~~income (~~loss) from operations for each reportable segment includes cost of goods sold transfer price allocations and distribution allocations from Corporate/Other. Corporate/Other includes unallocated corporate and certain supply chain expenses, ~~and~~ inter-segment eliminations and other adjustments, including business and operational transformation costs and financing costs.

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Reconciliations

The information below provides a reconciliation of segment adjusted income ~~(loss)~~ from operations to (loss) ~~income~~ before taxes:

	Three Months Ended June 30,				Nine Months Ended June 30,
	Three Months Ended December 31,
	2022		2021		~~2022~~		~~2021~~
	(dollars in thousands)
Segment adjusted income (loss) from operations
Segment adjusted income from operations
Americas	$	111,~~753~~528	$	6123,~~206~~286	$	~~62,904~~	$	~~178,246~~
EMEA	41(9,~~248~~841)		~~108~~10,~~380~~269		~~129,686~~		~~206,516~~
APAC	(310,~~483)~~980		119,~~989~~347		~~19,880~~		~~28,963~~
Segment adjusted income from operations for reportable segments	492,~~518~~667		~~171~~52,~~575~~902		~~212,470~~		~~413,725~~
Unallocated net expenses(1)	(7374,~~947~~595)		(69116,~~996~~800)		~~(245,247)~~		~~(163,976)~~
Adjustments to income (loss) before taxes
Adjustments to loss before taxes
Stock/unit-based compensation expense	(17,340)		(61,714)		(65,041)		(94,193)
Stock-based compensation expense	(8,537)		(25,511)
Gain on disposal of assets held for sale	—		—		—		5,185
Restructuring costs	1,166		—
Interest expense, net	(1929,~~267~~519)		(1815,~~031~~531)		~~(51,813)~~		~~(49,780)~~
Gain on Tax Receivable Agreement liability remeasurement	9,226		—		9,226		—
Loss before taxes	$	(108,818)	$	(104,940)
Loss from early extinguishment of debt	—		—		—		(5,448)
Other expense	(68)		—		(502)		—
(Loss) income before taxes	$	(51,878)	$	21,834	$	(140,907)	$	105,513

_____________

(1)Unallocated net expenses includes Corporate/Other, aswhich ~~defined~~consists inof ~~the~~unallocated ~~table~~corporate ~~above~~and certain supply chain expenses, inter-segment eliminations and other adjustments, ~~which~~including ~~include~~ business and operational transformation costs, ~~financing~~ and ~~IPO~~financing costs ~~and COVID-19 costs~~.

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The information below provides a reconciliation of segment assets to total consolidated assets:

June 30, 2022

December 31, 2022

Americas

EMEA

APAC

Corporate/Other

Total

(dollars in thousands)

Segment assets(1)

~~171~~154,~~383~~251

~~179~~186,~~619~~850

4550,~~667~~278

—

~~396~~391,~~669~~379

All other(2)

1,~~325~~168,~~067~~929

Total assets

1,~~721~~560,~~736~~308

September 30, 2021

September 30, 2022

Americas

EMEA

APAC

Corporate/Other

Total

(dollars in thousands)

Segment assets(1)

~~164~~147,~~905~~502

~~104~~138,~~219~~316

6353,~~497~~685

—

~~332~~339,~~621~~503

All other(2)

1,~~218~~108,~~371~~471

Total assets

1,~~550~~447,~~992~~974

_____________

(1)Inventory is the only segment asset reviewed by the CODM.

(2)“All other” consists of assets that are not reviewed by the CODM at a segment level: cash and cash equivalents; accounts receivable; prepaid and other tax assets; prepaid expenses and other current assets; property, equipment and leasehold improvements, net; operating lease right-of-use assets; other long-term assets; trademarks, net; other intangible assets, net; and goodwill.

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13. Noncontrolling Interests

The noncontrolling interests balance represents the economic interests in Weber HoldCo LLC held by the Pre-IPO LLC Members. The following table summarizes the ownership of LLC Units in Weber HoldCo LLC as of ~~June~~December 3031, 2022:

	LLC Units	Ownership Percentage
LLC Units held by Weber Inc.	5253,~~899~~738,~~303~~392	1819	%
Units held by Pre-IPO LLC Members	234,~~559~~476,~~825~~377	8281	%
Balance at end of period	~~287~~288,~~459~~214,~~128~~769	100	%

The noncontrolling interest holders have the right to exchange an LLC unit along with a share of Class B common stock ("Paired Interests") for Class A common stock. As such, future exchanges of Paired Interests by noncontrolling interest holders will result in a change in ownership and decrease or increase the amount recorded as noncontrolling interests and increase or decrease additional paid-in capital when Weber HoldCo LLC has positive or negative net assets, respectively. During the ~~nine~~three months ended ~~June~~December 3031, 2022, pre-IPO LLC members exchanged 8530,~~394~~259 Paired Interests for Class A common stock.

14. Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net ~~income~~ (loss) income attributable to Weber Inc. by the weighted average number of Class A common stock outstanding during the period. The weighted average number of Class A common stock outstanding during the period includes both the weighted average of Class A common stock outstanding as well as the weighted average of vested RSUs outstanding during the period. Shares of Class B common stock do not share in earnings and are not participating securities. Accordingly, separate presentation of earnings (loss) per share of Class B common stock under the two-class method has not been presented. Diluted earnings (loss) per share is calculated by giving effect to the potentially dilutive weighted average impact of profits interest awards, options, RSUs and HoldCo ~~LLC Units that are convertible into shares of our Class A common stock when paired with an equal number of shares of Class B common stock.~~

Prior to the IPO, the Weber-Stephen Products LLC structure included only LLC common units issued and outstanding to pre-IPO LLC members. The Company analyzed the calculation of earnings per unit for periods prior to the IPO and determined that it resulted in values that would not be meaningful to the users of these condensed consolidated financial statements. Therefore, earnings per share information has not been presented for the prior year periods.24

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LLC Units that are convertible into shares of our Class A common stock when paired with an equal number of shares of Class B common stock.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings (loss) per share of Class A common stock is as follows:

	Three Months EndedJune 30, 2022		Nine Months EndedJune 30, 2022
	Three Months Ended December 31,
	2022		2021
	(in thousands, except shares and per share data)
Numerator - basic:
Net loss	$	(51113,~~999~~891)	$	(~~177~~74,~~865~~553)
Less: Net loss attributable to noncontrolling interests	(4486,~~505~~701)		(~~132~~91,~~698~~330)
Net loss attributable to Weber Inc. - basic	$	(7,494)	$	(45,167)
Net loss (income) attributable to Weber Inc. - basic	$	(27,190)	$	16,777
Numerator - diluted:
Net loss attributable to Weber Inc. - basic	$	(7,494)	$	(45,167)
Net loss (income) attributable to Weber Inc. - basic	$	(27,190)	$	16,777
Net loss effect of dilutive securities:
Add: Net income (loss) attributable to dilutive impact of Paired Interests(1)	(110,997)		—
Add: Net loss attributable to dilutive impact of Paired Interests(1)	—		(71,380)
Net loss attributable to Weber Inc. - diluted	$	(~~118~~27,~~491~~190)	$	(4554,~~167~~603)
Denominator - basic:
Weighted average of Class A common stock outstanding - basic	5354,~~875~~604,~~489~~105		53,~~499~~309,~~650~~932
Denominator - diluted:
Weighted average of Class A common stock outstanding - basic	5354,~~875~~604,~~489~~105		53,~~499~~309,~~650~~932
Weighted average effect of dilutive securities:
Add: Class A common stock assumed exchange for Paired Interests(2)	~~236,295,421~~—		—234,645,219
Weighted average Class A common stock outstanding - diluted	~~290~~54,~~170~~604,~~910~~105		53287,~~499~~955,~~650~~151
Earnings (loss) per share of Class A common stock - basic	$	(0.1450)	$	(0.~~84)~~31
Earnings (loss) per share of Class A common stock - diluted	$	(0.4150)	$	(0.8419)

_____________

(1)This adjustment assumes after-tax elimination of noncontrolling interests due to the assumed exchange of all Paired Interests for shares of Class A common stock in Weber Inc. as of the beginning of the period following the if-converted method for calculating diluted net ~~income~~loss per share.

(2)The diluted weighted average shares outstanding of Class A common stock includes the effects of the if-converted method to reflect the assumed exchange of all Paired Interests on a one-for-one basis for shares of Class A common stock in Weber Inc.

The following number of weighted average potentially dilutive shares were excluded from the calculation of diluted loss per share because the effect of including such potentially dilutive shares would have been anti-dilutive:

	Three Months EndedJune 30, 2022	Nine Months EndedJune 30, 2022
	Three Months Ended December 31,
Paired Interests	—	240,381,268
	2022	2021
Profits interest awards	7,118,496	7,638,920
Paired Interests	234,492,493	—
Options	513,684	622,821
Profits interest awards	2,546,091	5,053,269
RSUs	521,621	1,100,301
Options	173,483	1,038,866
RSUs	1,303,519	4,605,088

~~15. Member Notes~~25

During the first quarter of fiscal year 2022, the Company received $10.6 million from certain borrowers for repayment of the outstanding balance, including accrued interest, of partial recourse member notes and $0.8 million for repayment of the outstanding balance, including accrued interest, of full recourse member notes. As partial recourse notes were not reflected in the condensed consolidated financial statements, the repayment of the partial recourse notes was

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accounted for as an equity issuance of the 1,072,849 LLC units (along with an equal number of shares of Class B common stock).

The Company recognized zero and $1.1 million in stock-based compensation expense during the three and nine months ended June 30, 2022, respectively, related to the repayment of partial recourse notes, as the early repayment was considered a modification to the loan term of the partial recourse notes. The Company recognized $4.5 million and $4.9 million in unit-based compensation expense during the three and nine months ended June 30, 2021, respectively, related to the issuance of partial recourse notes. The total amount due from members on the notes receivable, including interest, was zero and $11.3 million as of June 30, 2022 and September 30, 2021, respectively.

16. Subsequent Events

On July 24, 2022, the Board appointed Alan Matula, Weber’s then Chief Technology Officer, as the Interim Chief Executive Officer of the Company, to succeed Chris Scherzinger, who has departed from such role and from the Board. In addition, on August 12, 2022, the Board approved a restructuring plan, which included the termination of other senior executives, a workforce reduction of our non-manufacturing and distribution headcount by at least 10%, the termination of certain lease and other contractual obligations, and the disposal of certain other assets. We expect to substantially complete the restructuring plan by the first quarter of fiscal year 2023.

As a result of the above actions, the Company expects to incur total pre-tax charges of between approximately $30 million to $40 million, which are expected to be recorded in the fourth quarter of fiscal year 2022. Of these total charges, approximately $23 million to $30 million relates to severance and other termination-related benefits, approximately $4 million to $5 million relates to lease and other contractual terminations, and approximately $3 million to $5 million relates to the disposal of certain other assets.

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Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. The section titled “Special Note Regarding Forward-Looking Statements” should be read for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Our fiscal year end is September 30, and our fiscal quarters end on December 31, March 31, June 30 and September 30. ~~Our fiscal years ended September 30, 2022, 2021 and 2020 are referred to herein as Fiscal Year 2022, Fiscal Year 2021 and Fiscal Year 2020, respectively.~~

Our Company

Weber Inc. and its subsidiaries (collectively “Weber,” the “Company,” “we,” and “our”), ~~together with its subsidiaries,~~ is the leading outdoor cooking company in the global outdoor cooking market. Our founder George Stephen, Sr., established the outdoor cooking category when he invented the original charcoal grill ~~nearly~~ 70 years ago. In the decades since, we have built a loyal and global following of both grilling enthusiasts and barbecue professionals in backyards all around the world. Our product portfolio includes traditional charcoal grills, gas grills, smokers, pellet and electric grills and recently our Weber Connect™ technology-enabled grills. Our full range of products ~~are~~is sold in 78 countries through an omni-channel network that consists of wholesale, direct-to-consumer and e-commerce.

We operate in the global outdoor cooking market, which is comprised of outdoor products that include gas grills, charcoal grills, wood pellet grills, electric grills, smokers, grilling accessories and solid fuel products (including charcoal briquettes, lump charcoal, pellets, and wood chips and chunks). Our mission at Weber is to lead the outdoor cooking industry by innovating breakthrough new products and services that enhance our global consumers’ grilling experiences. Our purpose is to ignite inspiration and discovery through everything we do, at every touchpoint with our consumers. Grilling is about making delicious food, bringing people together and creating memories.

Key Factors Affecting Our Results of Operations

We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section titled "“Risk Factors"” in our Annual Report on Form 10-K.

Economic Conditions

Demand for our products is significantly affected by a number of economic factors impacting our customers and consumers, such as the availability of credit, consumer confidence and spending, demographic trends, employment levels and other macroeconomic factors (e.g., lockdowns, government mandates, etc.) that may influence the extent to which consumers invest in household products such as grills, and associated accessories, consumables and services. In recent months, there has been a slowdown in retail traffic, both in-store and online, which the Company believes is due to rising inflation, supply chain constraints, higher fuel prices and geopolitical uncertainty. These market factors are expected to continue and therefore continue to have a material adverse impact on our results of operation.

The Company iscontinues ~~monitoring~~to monitor developments in Russia and Ukraine as well as financial and economic sanctions imposed by the U.S. and other countries. In March 2022, the Company suspended operations in Russia, including cessations of imports into Russia, sales to retailers in Russia and e-commerce activity in Russia. During the fourth quarter of fiscal year 2022, the Company commenced activities to liquidate its on-hand inventory. While the conflict has negatively impacted our results of operations for the three ~~and nine~~ months ended ~~June~~December 3031, 2022, the Company's net sales and total assets in Russia represented less than 1% of our total consolidated net sales and total assets.

Seasonality/Weather

Although we generally have demand for our products throughout the year, our sales have historically experienced some seasonality. We have typically experienced our highest level of sales of our products in the second and third fiscal quarters as retailers across North America and Europe change over their floor sets, build inventory and fulfill consumer demand for outdoor cooking products. Sales are typically lower during our first and fourth fiscal quarters, with the exception of our Australia/ New Zealand business, which is counter-seasonal to the balance of our business. We have a long track record of investing in our business throughout the year, including in operating expenses, working capital and

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other growth initiatives. We typically borrow under our short-term revolving facility in the first and second fiscal quarters to fund working capital for building up inventory in anticipation of the higher demand we experience in the second and third fiscal quarters. While these investments drive performance during the primary selling season in our second and third fiscal quarters, they generally have a negative impact on cash flow and net income during our first and fourth fiscal quarters. Unfavorable weather during our higher sales season can also have a material adverse impact on our results, and can cause shifts in sales across fiscal quarters.

Impact of COVID-19

Since the onset of the COVID-19 pandemic, we have focused on protecting our employees’ health and safety, meeting our customers’ needs as they navigate an uncertain financial and operating environment, working closely with our suppliers to protect our ongoing business operations and rapidly adjusting our short-, medium- and long-term operational plans to proactively and effectively respond to the current and potential future public health crises. While the COVID-19 pandemic continues to present concerns for our business and operations, our employees and their families, our customers and our suppliers, we believe that we have adapted to the wide-ranging changes that the global economy is currently undergoing. For further discussion of the risks raised by the COVID-19 pandemic, see the section titled "Risk Factors" in our Annual Report on Form 10-K.

Although we have implemented measures to mitigate the impact of the COVID-19 pandemic on our business, these measures may not be fully effective. We cannot predict the degree to, or the period over, which we will be affected by the pandemic and resulting governmental and other measures. The economic effects of the COVID-19 pandemic could continue to affect demand for our products in the foreseeable future. As the COVID-19 pandemic continues, it may also have the effect of heightening many of the risks described in the section titled “Risk Factors” in our Annual Report on Form 10-K.

The severity, magnitude and duration of the current COVID-19 pandemic is uncertain. We continue to actively monitor the pandemic and adjust our mitigation strategies as necessary to address any changing health, operational or financial risks that may arise. After the onset of the pandemic, we experienced a significant increase in demand for our grills and accessories. While this demand has since moderated, we will continue to manage our production capacity during this period of volatility. We continue to monitor the business for adverse impacts of the pandemic, including volatility in the foreign exchange markets, supply chain disruptions in certain markets and potential disruptions in certain countries. In the event we experience adverse impacts from the above or other factors, we would also evaluate the need to perform interim impairment tests for our goodwill, intangible assets and property, equipment and leasehold improvements. There can be no assurance that volatility and/or disruption in the global capital and credit markets will not impair our ability to access these markets on terms acceptable to us, or at all.

Impact of Inflation

Changing costs of inbound freight, materials, components, equipment, labor and other inputs used to manufacture and sell our products and logistics costs, in particular, have impacted and may in the future impact operating costs and, accordingly, may affect the prices of our products. We are involved in continuing programs to mitigate the impact of cost increases through identification of sourcing and manufacturing efficiencies where possible. However, we may not be able to fully mitigate or pass through the increases in our operating costs, and rising prices could also affect demand for our products. Additionally, rising inflation has negatively impacted retail traffic and may continue to do so in the future.

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Impact of Foreign Exchange Rates

We conduct business in various locations throughout the world and are subject to market risk due to changes in value of foreign currencies in relation to our reporting currency, the U.S. dollar. The functional currencies of our foreign operating locations are generally the local currency in the country, however, our results of operations and assets and liabilities are reported in U.S. dollars and thus will fluctuate with changes in exchange rates between such local currencies and the U.S. dollar. Additionally, because our consolidated financial results are reported in U.S. dollars, the translation of sales or earnings generated in other currencies into U.S. dollars can result in a significant increase or decrease in the amount of those sales or earnings in our financial statements, which also affects the comparability of our results of operations and cash flows between financial periods.

~~Items Impacting Comparability~~Seasonality/Weather

~~Business~~Although ~~Combinations~~we generally have demand for our products throughout the year, our sales have historically experienced some seasonality. We have typically experienced our highest level of sales of our products in the second and third fiscal quarters as retailers across North America and Europe change over their floor sets, build inventory and fulfill consumer demand for outdoor cooking products. Sales are typically lower during our first and fourth fiscal quarters, with the exception of our Australia/ New Zealand business, which is counter-seasonal to the balance of our business. We have a long track record of investing in our business throughout the year, including in operating expenses, working capital and other growth initiatives. We typically borrow under our short-term revolving facility in the first and second fiscal quarters to fund working capital for building up inventory in anticipation of the higher demand we experience in the second and third fiscal quarters. While these investments drive performance during the primary selling season in our second and third fiscal quarters, they generally have a negative impact on cash flow and net income during our first and fourth fiscal quarters. Unfavorable weather during our higher sales season can also have a material adverse impact on our results, and can cause shifts in sales across fiscal quarters.

~~RMC~~Impact ~~Acquisition. April 1, 2021, the Company acquired all aspects~~ of the operations of R McDonald Co. Pty. Ltd. (“RMC”), that supported the Company’s business units in Australia and New Zealand. This included certain fixed assets, members of the RMC workforce and their related employment liabilities and the reacquired right to sell and market the Company’s products. The primary purpose of the acquisition was to re-acquire those operational and marketing rights. The Pandemic

36We continue to monitor the COVID-19 pandemic and adjust our mitigation strategies as necessary to address any changing health, operational or financial risks that may arise. After the onset of the pandemic, we experienced a significant increase in demand for our grills and accessories. While this demand has since moderated, we will continue to manage our production capacity. We continue to monitor the business for adverse impacts of the pandemic, including volatility in the foreign exchange markets, supply chain disruptions in certain markets and potential disruptions in certain countries. In the event we experience adverse impacts from the above or other factors, we would also evaluate the need to perform interim impairment tests for our goodwill, intangible assets and property, equipment and leasehold improvements. There can be no assurance that volatility and/or disruption in the global capital and credit markets will not impair our ability to access these markets on terms acceptable to us, or at all.

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acquisition was accounted for as a business combination, and RMC was acquired for approximately $26.3 million in cash and $14.6 million in equity.

June Acquisition. On January 12, 2021, the Company acquired all of the outstanding stock of June Life, Inc. (“June”), a smart appliance and technology company. The acquisition aligns with the Company’s strategy of revolutionizing the outdoor cooking experience through connected products, services and experiences that make grilling the perfect meal simple with our smartphone-enabled step-by-step cooking experience. Weber Connect, powered by June OS, is our award-winning smart cooking software solution developed with June. The acquisition was accounted for as a business combination, and June was acquired for aggregate consideration of $142.2 million, including $108.3 million of cash.

Gain on Disposal of Assets Held for Sale

During Fiscal Year 2020, the Company determined that one of our manufacturing sites was considered to be assets held for sale, since the asset group was being marketed for sale and all the criteria to be classified as held for sale under Accounting Standards Codification (“ASC”) 360, Property, Plant and Equipment, had been met. The related buildings and its content were vacated and we no longer required these assets for our future operations. The carrying value of these assets was $8.3 million as of September 30, 2020. Assets held for sale are measured at the lower of their carrying value or the fair value less cost to sell. On December 30, 2020, we disposed of this manufacturing site, for net cash proceeds of $13.5 million, which resulted in a gain of $5.2 million.

Loss from Early Extinguishment of Debt

On October 30, 2020, the Company retired its existing senior credit facility and entered into a new credit facility (“Secured Credit Facility”) with a syndicate of financial institutions and investors. During the three months ended December 31, 2020, the Company recorded a $5.4 million loss from early extinguishment of debt, of which $4.1 million related to the term loan of the Company’s senior credit facility and $1.3 million related to revolving credit facility of the senior credit facility, representing a write-off of unamortized deferred financing costs.

Components of our Operating Results

We consider a variety of financial and operating measures in assessing the performance of our business. The key U.S. GAAP measures we use are net sales, gross profit, ~~income (~~loss) from operations and net (loss~~) income~~.

Net Sales

We offer a broad range of products that consist of grills, accessories and consumables. Sales are recorded net of related discounts, allowances and taxes to be submitted to third parties. We discuss the net sales of our products in our three reportable segments, as defined below.

Gross Profit and Gross Margin

Gross profit is calculated by taking net sales less cost of goods sold, which includes the cost of direct materials, labor, purchased finished products and components, inbound freight, packaging, warranty and depreciation. Gross margin is defined as gross profit as a percentage of net sales.

Selling, General and Administrative

Selling, general and administrative expenses consist primarily of research and development, marketing, advertising and selling costs; non-manufacturing employee compensation and benefit costs; transportation costs of delivering our product to customers and the costs associated with a network of warehousing facilities to house inventory until the point of sale; outside services and fees; legal, insurance, accounting, audit and other administrative expenses; and general corporate infrastructure costs.

~~Reportable Segments~~27

We operate and manage our business in three reportable segments: Americas, which consists of Canada, Chile, Mexico and the United States; the European, Middle East and African regions (“EMEA”); and the Asia-Pacific region (“APAC”), which includes Australia and New Zealand. We identify our reportable segments based on the information used by the Chief Operating Decision Maker (“CODM”) to monitor performance and allocate resources. See Note 12 to our condensed consolidated financial statements for additional information regarding our reportable segments.

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Interest Expense, Net

Interest expense, net consists primarily of interest on our borrowings, including our credit facilities (term loans and revolving facilities), overdraft facility and charges for limited standby letters of credit. Interest expense, net also includes the amortization of deferred financing costs associated with our credit facilities, current year impacts of interest rate swap transactions, as well as interest resulting from a financing obligation under a sale-leaseback arrangement. Interest expense is offset by our interest income, consisting of interest earned on our cash and cash equivalents.

Reportable Segments

We operate and manage our business in three reportable segments: Americas; Europe, Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”). We identify our reportable segments based on the information used by the Chief Operating Decision Maker (“CODM”) to monitor performance and allocate resources. See Note 12 to our condensed consolidated financial statements for additional information regarding our reportable segments.

Non-GAAP Measures

In addition to the U.S. GAAP results provided in this Quarterly Report on Form 10-Q, we provide supplemental non-GAAP measures to evaluate our business, measure our performance, identify trends affecting our business and assist us in making strategic decisions. Our management team utilizes a combination of GAAP and non-GAAP financial measures to evaluate business results, to make decisions regarding the future direction of our business, and for resource allocation decisions. As a result, we believe the presentation of both GAAP and non-GAAP financial measures provides investors with increased transparency into financial measures used by our management team and improves investors’ understanding of our underlying operating performance and in their analysis of ongoing operating trends. The use of non-GAAP financial information should not be considered as an alternative to, or more meaningful than, the comparable U.S. GAAP measures. In addition, because our non-GAAP measures are not determined in accordance with U.S. GAAP, it is susceptible to differing calculations, and not all comparable or peer companies may calculate their non-GAAP measures in the same manner. Our non-GAAP measures are adjusted (loss) ~~income~~ from operations, adjusted net (loss~~) income~~, EBITDA and Adjusted EBITDA.

Adjusted (Loss) ~~Income~~ from Operations and Adjusted Net (Loss~~) Income~~

Adjusted (loss) ~~income~~ from operations and adjusted net (loss) ~~income~~are ~~is (~~loss) ~~income~~ from operations and net (loss), ~~income~~respectively, adjusted for stock~~/unit~~-based compensation expense, restructuring costs, business transformation costs, operational transformation costs, ~~impairment~~and ~~costs,~~ financing ~~and IPO~~ costs,. ~~COVID-19~~Adjusted ~~costs~~loss ~~and~~from ~~gain~~operations onalso ~~disposal~~reflects ofan ~~assets~~adjustment ~~held~~ for ~~sale,~~foreign ~~and,~~currency ingain ~~the case of adjusted net~~ (loss). ~~income,~~Adjusted net loss ~~from~~reflects ~~early~~each ~~extinguishment~~ of ~~debt, net of~~ the ~~tax~~above ~~impact of such~~ adjustments., ~~Adjusted~~except ~~income from operations is also adjusted~~ for foreign currency ~~(loss)~~ gain. ~~Adjusted~~ (loss) ~~income~~and ~~from~~the ~~operations~~tax ~~excludes~~impact ~~interest expense, net, income taxes, gain on Tax Receivable Agreement liability remeasurement, loss from early extinguishment~~ of ~~debt,~~all ~~other expense and gain from investments in unconsolidated affiliates~~adjustments.

We use adjusted (loss) ~~income~~ from operations and adjusted net (loss) ~~income~~ as indicators of the productivity of our business and our ability to manage expenses, after adjusting for certain expenses that we view as not indicative of regular operations. Adjusted (loss) ~~income~~ from operations and adjusted net (loss) ~~income~~ are not calculated in the same manner by all companies, and, accordingly, are not necessarily comparable to similarly entitled measures of other companies and may not be an appropriate measure for performance relative to other companies.

EBITDA and Adjusted EBITDA

EBITDA is net (loss) ~~income~~ before interest expense, net, income taxes and depreciation and amortization.

Adjusted EBITDA is a key metric used by management and our Board ~~of Directors~~ to assess our financial performance. Adjusted EBITDA is also frequently used by analysts, investors and other interested parties to evaluate companies in our industry, when considered alongside other U.S. GAAP measures. We use Adjusted EBITDA to supplement U.S. GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other companies using similar measures.

Adjusted EBITDA is ~~defined~~EBITDA ~~as net (loss) income before interest expense, net, income taxes and depreciation and amortization,~~ adjusted for stock~~/unit~~-based compensation expense, ~~business~~restructuring ~~transformation~~ costs, ~~operational~~business transformation costs, ~~financing~~operational ~~and~~transformation ~~IPO~~ costs, ~~COVID-19 costs, gain on Tax Receivable Agreement liability remeasurement, loss from early extinguishment of debt, gain on disposal of assets held for sale~~ and ~~other~~financing ~~expense~~costs. Adjusted EBITDA is not calculated in the same manner by all companies, and, accordingly, is not necessarily comparable to similarly entitled measures of other companies and may not be an appropriate measure for performance relative to other companies. Adjusted EBITDA should not be construed as an indicator of a company’s operating performance in isolation from, or as a substitute for, net (loss~~) income~~, cash flows from operations or cash flow data, all of which are prepared in accordance with U.S. GAAP. We have presented Adjusted EBITDA solely as supplemental disclosure because we believe it allows for a more complete analysis of results of operations. Adjusted EBITDA is not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of operating performance as determined in accordance with U.S. GAAP. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these items.

The following table reconciles (loss) income from operations to adjusted (loss) income from operations; net (loss) income to adjusted net (loss) income; net (loss) income to EBITDA; and EBITDA to Adjusted EBITDA for the periods presented: 28

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	Three Months Ended June 30,				Nine Months Ended June 30,
	2022		2021		2022		2021
	(dollars in thousands)
(Loss) income from operations	$	(25,003)	$	36,107	$	(76,835)	$	156,969
Adjustments:
Foreign currency (loss) gain(1)	(16,766)		3,758		(20,983)		3,772
Stock/unit-based compensation expense(2)	17,340		61,714		65,041		94,193
Business transformation costs(3)	11,559		6,572		26,241		9,496
Operational transformation costs(4)	8,851		5,027		22,689		10,853
Financing and IPO costs(5)	—		8,954		877		12,660
COVID-19 costs(6)	—		68		—		548
Gain on disposal of assets held for sale	—		—		—		(5,185)
Adjusted (loss) income from operations	$	(4,019)	$	122,200	$	17,030	$	283,306
Net (loss) income	$	(51,999)	$	17,825	$	(177,865)	$	91,620
Adjustments:
Stock/unit-based compensation expense(2)	17,340		61,714		65,041		94,193
Business transformation costs(3)	11,559		6,572		26,241		9,496
Operational transformation costs(4)	8,851		5,027		22,689		10,853
Financing and IPO costs(5)	—		8,954		877		12,660
COVID-19 costs(6)	—		68		—		548
Gain on Tax Receivable Agreement liability remeasurement	(9,226)		—		(9,226)		—
Loss from early extinguishment of debt	—		—		—		5,448
Gain on disposal of assets held for sale	—		—		—		(5,185)
Other expense	68		—		502		—
Tax impact of adjusting items(7)	4,245		(15,118)		(27,835)		(23,523)
Adjusted net (loss) income	$	(19,162)	$	85,042	$	(99,576)	$	196,110
Net (loss) income	$	(51,999)	$	17,825	$	(177,865)	$	91,620
Adjustments:
Interest expense, net	19,267		18,031		51,813		49,780
Income tax expense	121		4,009		36,958		19,398
Depreciation and amortization	15,418		12,079		44,701		32,407
EBITDA	$	(17,193)	$	51,944	$	(44,393)	$	193,205
Stock/unit-based compensation expense(2)	17,340		61,714		65,041		94,193
Business transformation costs(3)	11,559		6,572		26,241		9,496
Operational transformation costs(4)	8,851		5,027		22,689		10,853
Financing and IPO costs(5)	—		8,954		877		12,660
COVID-19 costs(6)	—		68		—		548
Gain on Tax Receivable Agreement liability remeasurement	(9,226)		—		(9,226)		—
Loss from early extinguishment of debt	—		—		—		5,448
Gain on disposal of assets held for sale	—		—		—		(5,185)
Other expense	68		—		502		—
Adjusted EBITDA	$	11,399	$	134,279	$	61,731	$	321,218

The following table reconciles loss from operations to adjusted loss from operations; net loss to adjusted net loss; net loss to EBITDA; and EBITDA to Adjusted EBITDA for the periods presented:


	Three Months Ended December 31,
		2022		2021
		(dollars in thousands)
Loss from operations		$	(90,340)	$	(89,245)
Adjustments:
Foreign currency gain (loss)(1)		11,041		(164)
Stock-based compensation expense(2)		8,537		25,511
Restructuring charges(3)		(1,166)		—
Business transformation costs(4)		12,734		7,410
Operational transformation costs(5)		13,603		6,648
Financing costs(6)		537		—
Adjusted loss from operations		$	(45,054)	$	(49,840)
Net loss		$	(113,891)	$	(74,553)
Adjustments:
Stock-based compensation expense(2)		8,537		25,511
Restructuring charges(3)		(1,166)		—
Business transformation costs(4)		12,734		7,410
Operational transformation costs(5)		13,603		6,648
Financing costs(6)		537		—

Tax impact of adjusting items(7)		1,596		(11,458)
Adjusted net loss		$	(78,050)	$	(46,442)
Net loss		$	(113,891)	$	(74,553)
Adjustments:
Interest expense, net		29,519		15,531
Income tax expense (benefit)		5,073		(30,387)
Depreciation and amortization		15,106		13,787
EBITDA		$	(64,193)	$	(75,622)
Stock-based compensation expense(2)		8,537		25,511
Restructuring charges(3)		(1,166)		—
Business transformation costs(4)		12,734		7,410
Operational transformation costs(5)		13,603		6,648
Financing costs(6)		537		—

Adjusted EBITDA		$	(29,948)	$	(36,053)

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______________

(1)Adjusted (loss) ~~income~~ from operations includes foreign currency gain (loss) ~~gain~~ in order to align adjusted (loss) ~~income~~ from operations with Adjusted EBITDA, with the exception of depreciation and amortization ~~and gain from investments in unconsolidated affiliates~~.

(2)See Note 11 to our condensed consolidated financial statements for further information.

(3)“~~Business~~Restructuring ~~transformation~~ costs” are costs ~~for~~associated ~~business~~with ~~transformation~~the ~~initiatives~~Company's restructuring plan that ~~require~~was ~~severance~~implemented orin ~~other~~fiscal ~~costs~~year to2022, ~~transition~~which toincluded the termination of certain senior executives, a ~~new~~workforce ~~operating~~reduction ~~model.~~of non-manufacturing and distribution headcount, the termination of certain contracts and the disposal of certain other assets.

(4)“~~Operational~~Business transformation costs” are ~~defined~~costs asfor ~~restructuring~~business ~~and~~ transformation initiatives ~~related to supply chain, operational moves and startups~~ that ~~are~~require ~~designed~~severance toor ~~enable~~other ~~future productivity. These~~ costs ~~also~~to ~~include~~transition ~~significant~~to ~~non-capitalizable~~a ~~systems~~new ~~integration~~operating ~~costs, as well was plant shutdown and closure costs that will drive future efficiencies~~model.

(5)“~~Financing~~Operational transformation costs” are defined as restructuring and ~~IPO~~transformation initiatives related to supply chain, operational moves and startups that are designed to enable future productivity. These costs” also include significant non-capitalizable ~~costs~~systems ~~relating~~integration tocosts, ~~the~~as ~~Company’s~~well ~~Secured~~was ~~Credit~~plant ~~Facility,~~shutdown ~~the~~and ~~Company's~~closure ~~IPO~~costs ~~and~~that ~~other~~will ~~financing~~drive ~~costs~~future efficiencies.

(6)During the nine months ended June 30, 2021, the Company incurred costs related to the global COVID-19 pandemic. These costs primarily resulted from the impact of enhanced employee safety and social distancing protocols.29

~~(7)“Tax~~Table ~~impact~~ of ~~adjusting items” represents the Company's effective tax rate for the nine months ended June 30, 2022 applied to the adjusting items presented.~~Contents

(6)“Financing costs” include non-capitalizable costs relating to the Company’s Secured Credit Facility and other financing costs.

(7)“Tax impact of adjusting items” represents the Company's effective tax rate applied to the adjusting items presented.

Results of Operations

Three Months Ended ~~June~~December 3031, 2022 Compared to the Three Months Ended ~~June~~December 3031, 2021

The following table sets forth our summarized condensed consolidated statements of operations data in dollars, as percentage change between the respective periods and as a percentage of net sales (the table may not foot due to rounding):

	Three Months Ended June 30,				$ VarianceIncrease/(Decrease)		% VarianceIncrease/(Decrease)		% of Net Sales
	Three Months EndedDecember 31,				$ VarianceIncrease/(Decrease)		% VarianceIncrease/(Decrease)		% of Net Sales
	2022		2021						2022		2021
	(dollars in thousands)
Net sales	$	~~527~~164,~~936~~899	$	~~668~~283,~~867~~141	$	(~~140~~118,~~931~~242)	(2142	%)	100	%	100	%
Cost of goods sold(1)(2)	~~374~~128,~~291~~951		~~369~~219,~~776~~128		4(90,~~515~~177)		1(41	%)	7178	%	5577	%
Gross profit	~~153~~35,~~645~~948		~~299~~64,~~091~~013		(~~145~~28,~~446~~065)		(4944	%)	2922	%	4523	%
Operating expenses:
Selling, general and administrative(1)(2)	~~173~~122,~~494~~381		~~257~~148,~~758~~084		(8425,~~264~~703)		(3317	%)	3374	%	3952	%
Amortization of intangible assets	5,~~154~~073		5,~~226~~174		(72101)		(12	%)	13	%	12	%
(Loss) income from operations	(25,003)		36,107		(61,110)		(64	%)	(5	%)	5	%
Restructuring costs	(1,166)		—		(1,166)		(100	%)	(1	%)	—	%
Foreign currency loss (gain)	16,766		(3,758)		20,524		(546	%)	3	%	(1	%)
Loss from operations	(90,340)		(89,245)		(1,095)		(64	%)	(55	%)	(32	%)
Interest expense, net	19,267		18,031		1,236		7	%	4	%	3	%
Foreign currency (gain) loss	(11,041)		164		(11,205)		(6832	%)	(7	%)	—	%
Gain on Tax Receivable Agreement liability remeasurement	(9,226)		—		(9,226)		100	%	(2	%)	—	%
Interest expense, net	29,519		15,531		13,988		90	%	18	%	5	%
Other expense	68		—		68		100%		—	%	—	%
Loss before taxes	(108,818)		(104,940)		(3,878)		4	%	(66	%)	(37	%)
(Loss) income before taxes	(51,878)		21,834		(73,712)		(338	%)	(10	%)	3	%
Income tax expense (benefit)	5,073		(30,387)		35,460		(117	%)	3	%	(11	%)
Income tax expense	121		4,009		(3,888)		(97	%)	—	%	1	%
Net loss	$	(113,891)	$	(74,553)	$	(39,338)	53	%	(69	%)	(26	%)
Net (loss) income	$	(51,999)	$	17,825	$	(69,824)	(392	%)	(10	%)	3	%
Adjusted loss from operations(3)	$	(45,054)	$	(49,840)	$	4,786	(10	%)	(27	%)	(18	%)
Adjusted (loss) income from operations(3)	$	(4,019)	$	122,200	$	(126,219)	(103	%)	(1	%)	18	%
Adjusted net loss(3)	$	(78,050)	$	(46,442)	$	(31,608)	68	%	(47	%)	(16	%)
Adjusted net (loss) income(3)	$	(19,162)	$	85,042	$	(104,204)	(123	%)	(4	%)	13	%
EBITDA(3)	$	(64,193)	$	(75,622)	$	11,429	(15	%)	(39	%)	(27	%)
EBITDA(3)	$	(17,193)	$	51,944	$	(69,137)	(133	%)	(3	%)	8	%
Adjusted EBITDA(3)	$	(29,948)	$	(36,053)	$	6,105	(17	%)	(18	%)	(13	%)
Adjusted EBITDA(3)	$	11,399	$	134,279	$	(122,880)	(92	%)	2	%	20	%

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______________

(1)Amounts include stock~~/unit~~-based compensation expense as follows:

	Three Months Ended June 30,
	Three Months Ended December 31,
	2022		2021
	(dollars in thousands)
Cost of goods sold	$	~~1,038~~671	$	~~504~~1,182
Selling, general and administrative	167,~~302~~866		6124,~~210~~329
Total stock/unit-based compensation expense	$	17,340	$	61,714
Total stock-based compensation expense	$	8,537	$	25,511

(2)Amount includes depreciation expense as follows:

	Three Months Ended June 30,
	Three Months Ended December 31,
	2022		2021
	(dollars in thousands)
Cost of goods sold	$	5,~~411~~604	$	34,~~354~~935
Selling, general and administrative	4,~~853~~429		3,~~499~~678
Total depreciation expense	$	10,~~264~~033	$	68,~~853~~613

(3)See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measures.”

~~Net Sales. Net sales for the three months ended June~~ 30, 2022 decreased by $140.9 million, or 21%, to $527.9 million from $668.9 million during the three months ended June 30, 2021. The decrease was attributable to lower grill revenues as consumer sales, both in-store and online, slowed due to the macroeconomic factors described in the section titled “Economic Conditions”, in comparison to the high demand realized during the same period last year. In turn, re-stock orders from our customers declined during the current quarter period, which along with the second fiscal quarter, typically reflects our highest level of sales. The decrease in sales volume was partially offset by certain pricing actions. Fluctuation in foreign exchange rates also unfavorably impacted net sales by $32.9 million, particularly the Euro as compared to the U.S. dollar. Net sales for the three months ended June 30, 2022 decreased in the Americas by 19%, EMEA by 24% and in APAC by 5% as compared to the three months ended June 30, 2021.

Cost of Goods Sold. Cost of goods sold for the three months ended June 30, 2022 increased by $4.5 million, or 1%, to $374.3 million from $369.8 million during the three months ended June 30, 2021. The increase was primarily due to higher inbound freight costs of $17.1 million and higher commodity costs of $66.3 million, mostly offset by lower sales volumes.

Gross Profit and Gross Margin. Gross profit for the three months ended June 30, 2022 decreased by $145.4 million, or 49%, to $153.6 million from $299.1 million during the three months ended June 30, 2021. Gross margin decreased by 1,561 basis points to 29% during the three months ended June 30, 2022 compared to the three months ended June 30, 2021. The decrease in gross profit and gross margin was primarily due to higher inbound freight costs and higher commodity costs, partially offset by pricing actions in all regions.

Selling, General and Administrative. Selling, general and administrative costs for the three months ended June 30, 2022 decreased by $84.3 million, or 33%, to $173.5 million from $257.8 million during the three months ended June 30, 2021. Selling, general and administrative costs as a percent of net sales decreased by 567 basis points to 33% during the three months ended June 30, 2022 compared to the three months ended June 30, 2021. The decrease in selling, general and administrative costs was primarily driven by reductions in advertising and corporate marketing expense of $28.0 million, lower incentive compensation expense of $8.6 million and lower stock/unit-based compensation expense of $44.9 million, which is primarily due to fewer unvested profits interest awards in the current year period.

Amortization of Intangible Assets. Amortization of intangible assets for the three months ended June 30, 2022 was essentially flat as compared to the prior year period.

Foreign Currency Loss (Gain). The impact of foreign exchange resulted in a loss of $16.8 million for the three months ended June 30, 2022 relative to a gain of $3.8 million for the three months ended June 30, 2021 due to the foreign exchange rate impacts on transactions with Weber affiliates conducted in foreign currencies other than the US dollar. The loss in the current year period primarily relates to Euro-denominated transactions.

Interest Expense, Net. Interest expense, net increased by $1.2 million, or 7%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021, primarily due to the commencement of the Incremental Term Loan in March 2022.

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~~Gain~~Net onSales. ~~Tax~~Net ~~Receivable~~sales ~~Agreement~~for ~~Liability~~the ~~Remeasurement.~~three ~~The~~months ~~Gain~~ended onDecember 31, ~~Tax~~2022 ~~Receivable~~decreased ~~Agreement~~by ~~liability~~$118.2 ~~remeasurement~~million, ofor 42%, to $164.9 million from $283.21 million ~~for~~during the three months ended ~~June~~December 3031, ~~2022~~2021. ~~resulted~~The decrease was attributable to higher retailer inventory carried over from ~~remeasuring~~fiscal year 2022 that drove lower customer orders, slowed consumer sales due to the ~~Tax~~macroeconomic ~~Receivable~~factors ~~Agreement~~described ~~liability~~in the section titled “Economic Conditions”. The decrease in sales volume was partially offset by certain pricing actions. Fluctuation in foreign exchange rates also unfavorably impacted net sales by $7.6 million, particularly the Australian Dollar and the Euro as compared to ~~zero~~the atU.S. ~~June~~dollar. Net sales for the three months ended December 3031, 2022 decreased in the Americas by 38%, in EMEA by 58% and in APAC by 36% as compared to the three months ended December 31, 2021.

~~Other~~Cost ~~Expense.~~of ~~Other~~Goods ~~expense~~Sold. Cost of ~~$0.1~~goods ~~million~~sold for the three months ended ~~June~~December 3031, 2022 ~~represents~~decreased ~~the~~by ~~Company's~~$90.2 ~~loss~~million, onor ~~sale~~41%, ofto ~~receivables~~$129.0 ~~under~~million from $219.1 million during the ~~Receivables~~three ~~Purchase~~months ~~Agreement~~ended December 31, 2021, primarily due to lower sales volumes.

~~Income~~Gross ~~Taxes.~~Profit ~~Income~~and ~~taxes~~Gross ~~decreased by $3~~Margin.9 ~~million~~Gross profit for the three months ended ~~June~~December 3031, 2022 ~~compared~~decreased toby ~~the~~$28.1 ~~three~~million, ~~months~~or ~~ended June 30~~44%, ~~2021. Subsequent~~ to ~~its IPO, the Company is structured as a C Corporation~~$35.9 ~~The~~million ~~current~~from ~~year period reflects income tax expense of~~ $064.10 million asduring ~~a result of~~ the ~~estimated~~three ~~annual~~months ~~effective~~ended ~~tax rate~~December 31, ~~including~~2021. ~~the~~Gross ~~impact~~margin ofdecreased ~~discrete~~by ~~items,~~81 ~~applicable~~basis points to ~~the~~22% ~~net~~during ~~loss recognized for~~ the ~~quarter.~~three Inmonths ~~the~~ended ~~prior year period~~December 31, ~~the~~2022 ~~Company,~~compared ~~through~~to ~~its~~the ~~subsidiary,~~three ~~Weber-Stephen~~months ~~Products~~ended ~~LLC~~December 31, ~~was~~2021. ~~structured~~The asdecrease ain ~~partnership~~gross profit and ~~therefore,~~gross ~~was~~margin ~~subject~~resulted tofrom ~~certain~~lower ~~LLC~~volumes ~~entity-level taxes~~ and ~~foreign~~was ~~taxes~~partially ~~but~~offset ~~generally~~by ~~not~~pricing ~~subject~~actions toin ~~U.S.~~all ~~federal income taxes~~regions.

~~Net~~Selling, ~~(Loss)~~General ~~Income~~and Administrative. ~~Net~~Selling, ~~(loss)~~general ~~income~~and administrative costs for the three months ended December 31, 2022 decreased by $6925.87 million, toor a17%, ~~net~~to ~~loss~~$122.4 ofmillion from $52148.01 million ~~for~~during the three months ended ~~June~~December 3031, ~~2022~~2021. ~~from~~Selling, ~~net~~general ~~income~~and administrative costs as a percent of ~~$17.8~~net ~~million~~sales ~~for~~increased by 2,192 basis points to 74% during the three months ended ~~June~~December 3031, ~~2021.~~2022 ~~This~~compared ~~decrease~~to ~~was~~the ~~primarily~~three ~~due~~months toended ~~lower~~December 31, ~~gross~~2021. ~~profit~~The ofdecrease ~~$145.4~~in ~~million~~selling, ~~which~~general and administrative costs was primarily driven by lower ~~net~~stock-based ~~sales~~compensation expense of $~~140~~16.95 million, ~~and~~which ~~higher~~is ~~costs~~primarily ofdue ~~goods~~to ~~sold~~fewer ofunvested ~~$4.5~~profits ~~million.~~interest ~~Additionally,~~awards ~~foreign~~and ~~currency~~Pre-IPO ~~loss~~Management ~~was~~Incentive ~~unfavorable~~Compensation byPlan ~~$20.5~~awards ~~million~~in asthe ~~compared~~current toyear ~~the~~period, ~~three~~a ~~months~~reduction ~~ended~~in ~~June~~advertising ~~30,~~expense ~~2021~~of $5.7 ~~These~~million, ~~impacts~~lower ~~were~~distribution ~~partially~~costs ~~offset~~on bylower asales ~~decrease~~of in$4.8 ~~selling,~~million ~~general~~ and ~~administrative~~lower salary costs of $842.39 million, aresulting ~~Gain~~from onthe ~~Tax~~restructuring ~~Receivable~~plan ~~Agreement~~implemented ~~liability~~in ~~remeasurement~~fiscal ofyear $92022.2 This ~~million~~was ~~and~~partially ~~lower~~offset ~~income~~by ~~taxes~~higher consulting costs of $37.9 million asduring ~~compared~~the tothree ~~the~~months ~~prior~~ended ~~year~~December 31, ~~period~~2022.

Amortization of Intangible Assets. Amortization of intangible assets for the three months ended December 31, 2022 was essentially flat as compared to the prior year period.

Restructuring Costs. During the three months ended December 31, 2022, the Company adjusted its restructuring reserve due to changes in estimates, resulting in income of $1.2 million.

Foreign Currency (Gain) Loss. The impact of foreign exchange resulted in a gain of $11.0 million for the three months ended December 31, 2022 relative to a loss of $0.2 million for the three months ended December 31, 2021 due to the foreign exchange rate impacts on transactions with Weber affiliates conducted in foreign currencies other than the US dollar. The gain in the current year period primarily relates to Euro-denominated transactions.

Interest Expense, Net. Interest expense, net increased by $14.0 million, or 90%, for the three months ended December 31, 2022 compared to the three months ended December 31, 2021, primarily due to the commencement of the Incremental Term Loan in March 2022 and higher interest rates.

Income Taxes. Income taxes increased by $35.5 million for the three months ended December 31, 2022 compared to the three months ended December 31, 2021. The increase is driven by adjustments for full valuation allowance loss entities that were established during the third quarter of fiscal year 2022, primarily for Weber Inc.

Net Loss. Net loss for the three months ended December 31, 2022 increased by $39.3 million to a net loss of $113.9 million for the three months ended December 31, 2022 from $74.6 million for the three months ended December 31, 2021. This increase was primarily due to lower gross profit of $28.1 million, which was driven by lower net sales of $118.2 million and lower costs of goods sold of $90.2 million, higher income taxes of $35.5 million and higher interest expense of $14.0 million as compared to the prior year period. This was partially offset by favorable foreign currency impacts of $11.2 million and a reduction in selling, general and administrative costs of $25.7 million for the three months ended December 31, 2022 compared to the three months ended December 31, 2021.

Segment Information

We operate and manage our business in three reportable segments: Americas, EMEA and APAC. We identify our reportable segments based on the information used by the CODM to monitor performance and allocate resources. See Note 12 of the notes to our condensed consolidated financial statements for additional information regarding our reportable segments.

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Net sales by reportable segment is summarized as follows:

	Three Months Ended June 30,				$ VarianceIncrease/(Decrease)		% VarianceIncrease/(Decrease)
	Three Months Ended December 31,				$ VarianceIncrease/(Decrease)		% VarianceIncrease/(Decrease)
	2022		2021
	(dollars in thousands)
Americas	$	~~273~~97,~~571~~508	$	~~339~~156,~~441~~494	$	(6558,~~870~~986)	(1938	%)
EMEA	~~232~~26,~~805~~687		~~306~~62,~~668~~985		(7336,~~863~~298)		(2458	%)
APAC	2140,~~560~~704		2263,~~758~~662		(122,~~198~~958)		(536	%)
Total net sales	$	~~527~~164,~~936~~899	$	~~668~~283,~~867~~141	$	(~~140~~118,~~931~~242)	(2142	%)

Adjusted income (loss) from operations by reportable segment is summarized as follows:

Three Months Ended June 30,

$ VarianceIncrease/(Decrease)

% VarianceIncrease/(Decrease)

Three Months Ended December 31,

$ VarianceIncrease/(Decrease)

% VarianceIncrease/(Decrease)

2022

2021

(dollars in thousands)

Americas

111,~~753~~528

6123,~~206~~286

(4921,~~453~~758)

(8193

EMEA

41(9,~~248~~841)

~~108~~10,~~380~~269

(6720,~~132~~110)

(62196

APAC

(310,~~483)~~980

119,~~989~~347

(58,~~472~~367)

(~~275~~43

Total adjusted income from operations

492,~~518~~667

~~171~~52,~~575~~902

(~~122~~50,~~057~~235)

(7195

The following table reconciles segment adjusted income from operations to loss from operations for the periods presented:


	Three Months Ended December 31,
	2022		2021
	(dollars in thousands)
Segment adjusted income from operations
Americas	$	1,528	$	23,286
EMEA	(9,841)		10,269
APAC	10,980		19,347
Segment adjusted income from operations for reportable segments	2,667		52,902
Corporate and supply chain costs(1)	(47,721)		(102,742)
Foreign currency (gain) loss(2)	(11,041)		164
Stock-based compensation expense(2)	(8,537)		(25,511)
Restructuring charges(2)	1,166		—
Business transformation costs(2)	(12,734)		(7,410)
Operational transformation costs(2)	(13,603)		(6,648)
Financing costs(2)	(537)		—
Loss from operations	$	(90,340)	$	(89,245)

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	Three Months Ended June 30,
	2022		2021
	(dollars in thousands)
Segment adjusted income from operations
Americas	$	11,753	$	61,206
EMEA	41,248		108,380
APAC	(3,483)		1,989
Segment adjusted income from operations for reportable segments	49,518		171,575
Corporate and supply chain costs(1)	(53,537)		(49,375)
Foreign currency loss (gain)(2)	16,766		(3,758)
Stock/unit-based compensation expense(2)	(17,340)		(61,714)
Business transformation costs(2)	(11,559)		(6,572)
Operational transformation costs(2)	(8,851)		(5,027)
Financing and IPO costs(2)	—		(8,954)
COVID-19 costs(2)	—		(68)
(Loss) income from operations	$	(25,003)	$	36,107

______________

(1)“Corporate and supply chain costs” consists primarily of corporate general and administrative costs as well as certain unallocated supply chain costs.

(2)See “Non-GAAP Measures—adjusted (loss) ~~income~~ from operations” for descriptions of reconciling items from (loss) ~~income~~ from operations to adjusted (loss) ~~income~~ from operations.

~~Americas~~ 32

The following table summarizes certain financial information relating to the Americas segment results that have been derived from our condensed consolidated financial statements:

	Three Months Ended June 30,				$ VarianceIncrease/(Decrease)		% VarianceIncrease/(Decrease)
	2022		2021
	(dollars in thousands)
Total segment net sales	$	273,571	$	339,441	$	(65,870)	(19	%)
Segment adjusted income from operations	$	11,753	$	61,206	$	(49,453)	(81	%)

Total Segment Net Sales. Total segment net sales for the three months ended June 30, 2022 decreased by $65.9 million, or 19%, to $273.6 million from $339.4 million during the three months ended June 30, 2021. The decrease was attributable to lower revenues in the U.S. and Canada as consumer traffic, both in-store and online, slowed due to the macroeconomic factors described in the section titled “Economic Conditions”, in comparison to the high demand realized during the same period last year as well as increased promotional activities. These decreases were partially offset by pricing actions. Unfavorable foreign exchange rates reduced net sales by $1.5 million, primarily driven by the Canadian dollar as compared to the U.S. dollar.

Segment Adjusted Income from Operations. Segment adjusted income from operations for the three months ended June 30, 2022 decreased by $49.5 million, or 81%, to $11.8 million from $61.2 million during the three months ended June 30, 2021. The decrease was attributable to lower sales volumes, higher inbound freight costs and increased product material costs and was partially offset by pricing actions, lower advertising spend and reduced incentive compensation expense

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EMEA

The following table summarizes certain financial information relating to the EMEA segment results that have been derived from our condensed consolidated financial statements:

	Three Months Ended June 30,				$ VarianceIncrease/(Decrease)		% VarianceIncrease/(Decrease)
	2022		2021
	(dollars in thousands)
Total segment net sales	$	232,805	$	306,668	$	(73,863)	(24	%)
Segment adjusted income from operations	$	41,248	$	108,380	$	(67,132)	(62	%)

Total Segment Net Sales. Total segment net sales for the three months ended June 30, 2022 decreased by $73.9 million, or 24%, to $232.8 million from $306.7 million during the three months ended June 30, 2021. The decrease was attributable to slowed consumer purchases across most of the region as well as unfavorable impacts of foreign exchange rates, which reduced net sales by $29.8 million. Excluding the $29.8 million unfavorable impact of foreign exchange rates, EMEA net sales for the three months ended June 30, 2022 decreased by 14%, as compared to the three months ended June 30, 2021.

Segment Adjusted Income from Operations. Segment adjusted income from operations for the three months ended June 30, 2022 decreased by $67.1 million, or 62%, to $41.2 million from $108.4 million during the three months ended June 30, 2021. This decrease was primarily attributable to lower sales, higher inbound freight and increased product material costs, partially offset by pricing actions, lower advertising costs and reduced incentive compensation expense.

APAC

The following table summarizes certain financial information relating to the APAC segment results that have been derived from our condensed consolidated financial statements:

	Three Months Ended June 30,				$ VarianceIncrease/(Decrease)		% VarianceIncrease/(Decrease)
	2022		2021
	(dollars in thousands)
Total segment net sales	$	21,560	$	22,758	$	(1,198)	(5	%)
Segment adjusted (loss) income from operations	$	(3,483)	$	1,989	$	(5,472)	(275	%)

Total Segment Net Sales. Total segment net sales for the three months ended June 30, 2022 decreased by $1.2 million, or 5%, to $21.6 million from $22.8 million during the three months ended June 30, 2021. The decrease was primarily attributable to unfavorable foreign exchange rates, specifically the Australian dollar as compared to the U.S. dollar, which reduced net sales by $1.6 million. Excluding the $1.6 million unfavorable impact of foreign exchange rates, APAC net sales for the three months ended June 30, 2022 increased by 2% as compared to the three months ended June 30, 2021. This increase was driven by higher sales in most APAC markets, with the exception of Australia where the effects of severe flooding during February and March continued to adversely affect product availability at key retailers.

Segment Adjusted (Loss) Income from Operations. Segment adjusted (loss) income from operations for the three months ended June 30, 2022 decreased by $5.5 million, or 275%, to a loss of $3.5 million from income of $2.0 million during the three months ended June 30, 2021. This decrease is primarily attributable to lower sales in Australia, elevated customer freight and distribution rates and higher inbound freight and product material costs.

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Nine Months Ended June 30, 2022 Compared to the Nine Months Ended June 30, 2021

	Nine Months Ended June 30,				$ VarianceIncrease/(Decrease)		% VarianceIncrease/(Decrease)		% of Net Sales
	2022		2021						2022		2021
	(dollars in thousands)
Net sales	$	1,418,371	$	1,632,176	$	(213,805)	(13	%)	100	%	100	%
Cost of goods sold(1)(2)	992,196		912,558		79,638		9	%	70	%	56	%
Gross profit	426,175		719,618		(293,443)		(41	%)	30	%	44	%
Operating expenses:
Selling, general and administrative(1)(2)	487,515		555,744		(68,229)		(12	%)	34	%	34	%
Amortization of intangible assets	15,495		12,090		3,405		28	%	1	%	1	%
Gain on disposal of assets held for sale(3)	—		(5,185)		5,185		(100	%)	—	%	—	%
(Loss) income from operations	(76,835)		156,969		(233,804)		(64	%)	(5	%)	10	%
Foreign currency loss (gain)	20,983		(3,772)		24,755		(656	%)	1	%	—	%
Interest expense, net	51,813		49,780		2,033		4	%	4	%	3	%
Loss from early extinguishment of debt(3)	—		5,448		(5,448)		(100	%)	—	%	—	%
Gain on Tax Receivable Agreement liability remeasurement	(9,226)		—		(9,226)		100	%	(1	%)	—	%
Other expense	502		—		502		100%		—	%	—	%
(Loss) income before taxes	(140,907)		105,513		(246,420)		(234	%)	(10	%)	6	%
Income tax expense	36,958		19,398		17,560		91	%	3	%	1	%
Gain from investments in unconsolidated affiliates	—		(5,505)		5,505		(100	%)	—	%	—	%
Net (loss) income	$	(177,865)	$	91,620	$	(269,485)	(294	%)	(13	%)	6	%
Adjusted income from operations(4)	$	17,030	$	283,306	$	(266,276)	(94	%)	1	%	17	%
Adjusted net (loss) income(4)	$	(99,576)	$	196,110	$	(295,686)	(151	%)	(7	%)	12	%
EBITDA(4)	$	(44,393)	$	193,205	$	(237,598)	(123	%)	(3	%)	12	%
Adjusted EBITDA(4)	$	61,731	$	321,218	$	(259,487)	(81	%)	4	%	20	%

______________

(1)Amounts include stock/unit-based compensation expense as follows:

	Nine Months Ended June 30,
	2022		2021
	(dollars in thousands)
Cost of goods sold	$	3,263	$	783
Selling, general and administrative	61,778		93,410
Total stock/unit-based compensation expense	$	65,041	$	94,193

(2)Amount includes depreciation expense as follows:

	Nine Months Ended June 30,
	2022		2021
	(dollars in thousands)
Cost of goods sold	$	15,629	$	9,810
Selling, general and administrative	13,577		10,507
Total depreciation expense	$	29,206	$	20,317

(3)See the section titled “Key Factors Affecting Our Results of Operations—Items Impacting Comparability.”

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(4)See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measures.”

Net Sales. Net sales for the nine months ended June 30, 2022 decreased by $213.8 million, or 13%, to $1,418.4 million from $1,632.2 million during the nine months ended June 30, 2021. The decrease was attributable to lower grill revenues as consumer traffic, both in-store and online, slowed due to the macroeconomic factors described in the section titled “Economic Conditions”, in comparison to the high demand realized during the same period last year. Net sales were also adversely impacted during the first half of fiscal year 2022 by certain product availability resulting from global supply chain disruptions. These decreases in sales volume were partially offset by certain pricing actions. Fluctuation in foreign exchange rates also decreased net sales by $54.8 million, particularly the Euro as compared to the U.S. dollar. Net sales for the nine months ended June 30, 2022 decreased in the Americas by 17%, EMEA by 9% and in APAC by 3%, as compared to the nine months ended June 30, 2021.

Cost of Goods Sold. Cost of goods sold for the nine months ended June 30, 2022 increased by $79.6 million, or 9%, to $992.2 million from $912.6 million during the nine months ended June 30, 2021. The increase was primarily due to higher inbound freight costs of $83.1 million and higher commodity costs of $151.0 million, which were partially offset by lower sales volumes.

Gross Profit and Gross Margin. Gross profit for the nine months ended June 30, 2022 decreased by $293.4 million, or 41%, to $426.2 million from $719.6 million during the nine months ended June 30, 2021. Gross margin decreased by 1,404 basis points to 30% during the nine months ended June 30, 2022 compared to the nine months ended June 30, 2021. The decrease in gross profit and gross margin was primarily due to higher inbound freight costs, higher commodity costs and lower sales volumes.

Selling, General and Administrative. Selling, general and administrative costs for the nine months ended June 30, 2022 decreased by $68.2 million, or 12%, to $487.5 million from $555.7 million during the nine months ended June 30, 2021. The decrease in selling, general and administrative costs was primarily driven by reductions in advertising and corporate marketing expense of $29.9 million, lower incentive compensation expense of $26.8 million and lower stock/unit-based compensation expense of $31.6 million, which is primarily due to fewer unvested profits interest awards in the current year period. These impacts were partially offset by higher research and development costs to support future innovation of $15.6 million and increased distribution costs of $9.5 million.

Amortization of Intangible Assets. Amortization of intangible assets for the nine months ended June 30, 2022 increased by $3.4 million, or 28%, to $15.5 million from $12.1 million for the nine months ended June 30, 2021. The increase in amortization of intangible assets was primarily driven by the amortization of intangible assets related to the June and RMC acquisitions.

Foreign Currency Loss (Gain). The impact of foreign exchange resulted in a loss of $21.0 million for the nine months ended June 30, 2022 relative to a gain of $3.8 million for the nine months ended June 30, 2021 due to the foreign exchange rate impacts on transactions with Weber affiliates conducted in foreign currencies other than the U.S. dollar. The loss in the current year period primarily relates to Euro-denominated transactions.

Interest Expense, Net. Interest expense, net increased by $2.0 million, or 4%, for the nine months ended June 30, 2022 compared to the nine months ended June 30, 2021, primarily due to higher volume of borrowings under the Revolving Loan during the current year period as well as the commencement of the Incremental Term Loan in March 2022.

Gain on Tax Receivable Agreement Liability Remeasurement. The Gain on Tax Receivable Agreement liability remeasurement of $9.2 million for the nine months ended June 30, 2022 resulted from remeasuring the Tax Receivable Agreement liability to zero at June 30, 2022.

Other Expense. Other expense of $0.5 million for the nine months ended June 30, 2022 represents the Company's loss on sale of receivables under the Receivables Purchase Agreement.

Income Taxes. Income taxes increased by $17.6 million for the nine months ended June 30, 2022 compared to the nine months ended June 30, 2021. Subsequent to its IPO, the Company is structured as a C Corporation. The current year period reflects income tax expense of $37.0 million as a result of the estimated annual effective tax rate, including the impact of discrete items, applicable to the net loss recognized for the nine months ended June 30, 2022. In the prior year period, the Company, through its subsidiary, Weber-Stephen Products LLC, was structured as a partnership and therefore, was subject to certain LLC entity-level taxes and foreign taxes but generally not subject to U.S. federal income taxes.

Gain from Investments in Unconsolidated Affiliates. No gain or loss from investments in unconsolidated affiliates was recorded for the nine months ended June 30, 2022 as the Company completed its acquisition of June in January 2021. The nine months ended June 30, 2021 reflect a gain from investments in unconsolidated affiliates of $5.5 million, which resulted from a $6.9 million gain from the remeasurement of the existing equity interest in June to fair value at the time of

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acquisition, offset by a $1.4 million loss recorded for Weber’s share of June’s losses in the first quarter of Fiscal Year 2021.

Net (Loss) Income. Net (loss) income decreased by $269.5 million to a net loss of $177.9 million for the nine months ended June 30, 2022 from net income of $91.6 million for the nine months ended June 30, 2021. This was primarily due to $293.4 million of lower gross profit, driven by lower net sales of $213.8 million and higher costs of goods sold of $79.6 million, and higher income tax expense of $17.6 million as compared to the prior year period. Additionally, foreign currency loss was unfavorable by $24.8 million as compared to the nine months ended June 30, 2021. These impacts were partially offset by lower lower selling, general and administrative costs of $68.2 million and a Gain on Tax Receivable Agreement liability remeasurement of $9.2 million.

Segment Information

Net sales by reportable segment is summarized as follows:

	Nine Months Ended June 30,				$ VarianceIncrease/(Decrease)		% VarianceIncrease/(Decrease)
	2022		2021
	(dollars in thousands)
Americas	$	735,712	$	891,649	$	(155,937)	(17	%)
EMEA	563,675		617,995		(54,320)		(9	%)
APAC	118,984		122,532		(3,548)		(3	%)
Total net sales	$	1,418,371	$	1,632,176	$	(213,805)	(13	%)

Adjusted income from operations by reportable segment is summarized as follows:

	Nine Months Ended June 30,				$ VarianceIncrease/(Decrease)		% VarianceIncrease/(Decrease)
	2022		2021
	(dollars in thousands)
Americas	$	62,904	$	178,246	$	(115,342)	(65	%)
EMEA	129,686		206,516		(76,830)		(37	%)
APAC	19,880		28,963		(9,083)		(31	%)
Total adjusted income from operations	$	212,470	$	413,725	$	(201,255)	(49	%)

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	Nine Months Ended June 30,
	2022		2021
	(dollars in thousands)
Segment adjusted income from operations
Americas	$	62,904	$	178,246
EMEA	129,686		206,516
APAC	19,880		28,963
Segment adjusted income from operations for reportable segments	212,470		413,725
Corporate and supply chain costs(1)	(195,440)		(130,419)
Foreign currency loss (gain)(2)	20,983		(3,772)
Stock/unit-based compensation expense(2)	(65,041)		(94,193)
Business transformation costs(2)	(26,241)		(9,496)
Operational transformation costs(2)	(22,689)		(10,853)
Financing and IPO costs(2)	(877)		(12,660)
COVID-19 costs(2)	—		(548)
Gain on disposal of assets held for sale(2)	—		5,185
(Loss) income from operations	$	(76,835)	$	156,969

______________

(1)“Corporate and supply chain costs” consists primarily of corporate general and administrative costs as well as certain unallocated supply chain costs.

(2)See “Non-GAAP Measures—adjusted income from operations” for descriptions of reconciling items from (loss) income from operations to adjusted income from operations.

Americas

The following table summarizes certain financial information relating to the Americas segment results that have been derived from our condensed consolidated financial statements:

	Nine Months Ended June 30,				$ VarianceIncrease/(Decrease)		% VarianceIncrease/(Decrease)
	Three Months Ended December 31,				$ VarianceIncrease/(Decrease)		% VarianceIncrease/(Decrease)
	2022		2021
	(dollars in thousands)
Total segment net sales	$	~~735~~97,~~712~~508	$	~~891~~156,~~649~~494	$	(~~155~~58,~~937~~986)	(1738	%)
Segment adjusted income from operations	$	621,~~904~~528	$	~~178~~23,~~246~~286	$	(~~115~~21,~~342~~758)	(6593	%)

Total Segment Net Sales. Total segment net sales for the ~~nine~~three months ended ~~June~~December 3031, 2022 decreased by $~~155~~59.90 million, or 1738%, to $~~735~~97.75 million from $~~891~~156.65 million during the ~~nine~~three months ended ~~June~~December 3031, 2021. The decrease was attributable to ~~lower~~higher ~~grill~~retailer ~~revenues~~inventory incarried ~~the~~over ~~U.S.~~from ~~and~~fiscal ~~Canada~~year as2022 ~~consumer~~that ~~traffic,~~drove ~~both~~lower ~~in-store~~customer ~~and online~~orders, slowed consumer sales due to the macroeconomic factors described in the section titled “Economic Conditions”, inand ~~comparison~~delayed totiming ~~the~~of ~~high~~shipments ~~demand~~related ~~realized~~to ~~during~~ the ~~same~~deployment ~~period~~of ~~last year. Additionally, certain product availability was adversely impacted by extended inventory transit times resulting from global supply chain disruptions and~~ the ~~startup~~Company's ofGlobal ~~new~~SAP/S4 ~~production~~HANA ~~lines.~~ERP platform. These decreases were partially offset by pricing actions. ~~Unfavorable foreign exchange rates reduced net sales by $1.5 million, primarily driven by the Canadian dollar as compared to the U.S. dollar.~~

Segment Adjusted Income from Operations. Segment adjusted income from operations for the ~~nine~~three months ended ~~June~~December 3031, 2022 decreased by $~~115~~21.38 million, or 6593%, to $621.95 million from $~~178~~23.23 million during the ~~nine~~three months ended ~~June~~December 3031, 2021. The decrease was ~~attributed~~attributable to lower sales volumes ~~in the U.S.~~, higher ~~inbound~~allocation ~~freight~~of ~~costs~~corporate ~~and~~supply ~~increased~~chain ~~product material~~ costs, ~~which~~and was partially offset by pricing actions, lower ~~advertising~~distribution costs ~~and~~on reduced ~~incentive~~sales ~~compensation~~and ~~expense~~lower advertising spend.

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EMEA

The following table summarizes certain financial information relating to the EMEA segment results that have been derived from our condensed consolidated financial statements:

	Nine Months Ended June 30,				$ VarianceIncrease/(Decrease)		% VarianceIncrease/(Decrease)
	Three Months Ended December 31,				$ VarianceIncrease/(Decrease)		% VarianceIncrease/(Decrease)
	2022		2021
	(dollars in thousands)
Total segment net sales	$	~~563~~26,~~675~~687	$	~~617~~62,~~995~~985	$	(5436,~~320~~298)	(958	%)
Segment adjusted income from operations	$	129,686	$	206,516	$	(76,830)	(37	%)
Segment adjusted (loss) income from operations	$	(9,841)	$	10,269	$	(20,110)	(196	%)

Total Segment Net Sales. Total segment net sales for the ~~nine~~three months ended ~~June~~December 3031, 2022 decreased by $5436.3 million, or 958%, to $~~563~~26.7 million from $~~618~~63.0 million during the ~~nine~~three months ended ~~June~~December 3031, 2021. The decrease was ~~primarily~~ attributable to ~~unfavorable~~higher ~~foreign~~retailer ~~exchange~~inventory ~~rates,~~carried ~~which~~over ~~reduced~~from ~~net~~fiscal ~~sales~~year by2022 ~~$49.1~~that ~~million~~drove lower customer orders, ~~primarily~~slowed ~~driven~~consumer bypurchases ~~the~~across ~~Euro~~most asof ~~compared~~the segment due to the ~~U.S.~~macroeconomic ~~dollar,~~factors described in the section titled “Economic Conditions” as well as ~~slowed~~unfavorable ~~consumer~~impacts ~~purchases~~of foreign exchange rates, which reduced net sales by $2.7 million. Excluding the $492.17 million unfavorable impact of foreign exchange rates, EMEA net sales for the ~~nine~~three months ended ~~June~~December 3031, 2022 decreased by 153%, as compared to the ~~nine~~three months ended ~~June~~December 3031, 2021.

Segment Adjusted (Loss) Income from Operations. Segment adjusted (loss) income from operations for the ~~nine~~three months ended ~~June~~December 3031, 2022 decreased by $7620.81 million, or 37196%, to a loss of $~~129~~9.78 million from income of $~~206~~10.53 million during the ~~nine~~three months ended ~~June~~December 3031, 2021. This decrease was primarily attributable to lower sales, higher ~~inbound~~allocation ~~freight~~of ~~and~~corporate ~~product~~supply ~~material~~chain costs, ~~which was~~ partially offset by pricing actions, lower advertising costs and reduced ~~incentive~~distribution ~~compensation~~costs ~~expense~~on lower sales.

APAC

The following table summarizes certain financial information relating to the APAC segment results that have been derived from our condensed consolidated financial statements:

	Nine Months Ended June 30,				$ VarianceIncrease/(Decrease)		% VarianceIncrease/(Decrease)
	Three Months Ended December 31,				$ VarianceIncrease/(Decrease)		% VarianceIncrease/(Decrease)
	2022		2021
	(dollars in thousands)
Total segment net sales	$	~~118~~40,~~984~~704	$	~~122~~63,~~532~~662	$	(322,~~548~~958)	(336	%)
Segment adjusted income from operations	$	1910,~~880~~980	$	2819,~~963~~347	$	(98,~~083~~367)	(3143	%)

Total Segment Net Sales. Total segment net sales for the nine months ended June 30, 2022 decreased by $3.5 million, or 3%, to $119.0 million from $122.5 million during the nine months ended June 30, 2021. The decrease was primarily attributable to unfavorable foreign exchange rates, specifically the Australian dollar as compared to the U.S. dollar, which reduced net sales by $4.2 million. Excluding the $4.2 million unfavorable impact of foreign exchange rates, APAC net sales for the nine months ended June 30, 2022 increased 1% as compared to the nine months ended June 30, 2021. This increase was driven by higher sales in most APAC markets, with the exception of Australia where the effects of severe flooding during February and March continued to adversely affect product availability at key retailers.33

~~Segment~~Table Adjusted Income from Operations. Segment adjusted income from operations for the nine months ended June 30, 2022 decreased by $9.1 million, or 31%, to $19.9 million from $29.0 million during the nine months ended June 30, 2021. This decrease is primarily attributable to lower sales in Australia and higher inbound freight and product material costs. This was partially offset by lower selling, general and administrative costs resulting from the acquisition of ~~RMC in Fiscal Year 2021.~~Contents

Total Segment Net Sales. Total segment net sales for the three months ended December 31, 2022 decreased by $23.0 million, or 36%, to $40.7 million from $63.7 million during the three months ended December 31, 2021. The decrease was attributable to lower revenues as consumer traffic, both in-store and online, slowed in comparison to the exceptional demand realized during the same period last year. In addition, unfavorable foreign exchange rates, specifically the Australian dollar as compared to the U.S. dollar, reduced net sales by $4.5 million. Excluding the $4.5 million unfavorable impact of foreign exchange rates, APAC net sales for the three months ended December 31, 2022 decreased by 29% as compared to the three months ended December 31, 2021.

Segment Adjusted Income from Operations. Segment adjusted income from operations for the three months ended December 31, 2022 decreased by $8.4 million, or 43%, to $11.0 million from $19.3 million during the three months ended December 31, 2021. This decrease is primarily attributable to lower sales in Australia, increased distribution costs and higher allocation of corporate supply chain costs.

Liquidity and Capital Resources

Overview

Our primary working capital requirements are to fund our daily operational activities like purchasing raw materials and component parts to manufacture products, and making payments to suppliers for goods and services. Our working capital requirements fluctuate during the year, driven primarily by the seasonality of market demand and the timing of inventory manufacturing and purchases, as well as the timing of cash receipts for products sold to customers. Our business is seasonal in nature with the highest level of sales of products occurring in the second and third fiscal quarters; accordingly, we historically borrowed under our short-term revolving credit facility in the first and second fiscal quarters to fund working capital for building up inventory in anticipation of the higher demand in the second and third fiscal quarters. Our capital expenditures are primarily related to growth initiatives and operational spending, including investments related to new product development, manufacturing and operational activities and investments in technology systems. In addition, in the future we may allocate capital to strategic acquisitions.

49Generally, we fund working capital requirements, capital expenditures, payments related to acquisitions and debt service requirements with a combination of both cash on hand and the borrowing capacity under the Secured Credit Facility, as discussed below. During the three months ended December 31, 2022, the Company entered into new Unsecured Loan Agreements, as discussed below, which have increased our liquidity position. The Company considers all investments with initial maturities of three months or less to be cash and cash equivalents, which consist primarily of demand deposits with major financial institutions in the U.S. and in countries where the Company’s subsidiaries operate. As of December 31, 2022, our cash and cash equivalents totaled $37.7 million, we had $12.8 million of borrowings available under the Revolving Loan, $230.0 million of borrowings available under the Unsecured Revolving Loan and $120.0 million available under the Unsecured 15% Term Loan.

~~Table~~We ofbelieve ~~Contents~~we have sufficient cash and cash equivalents, including availability under the Secured Credit Facility and new Unsecured Loan Agreements, to fund our operations, capital expenditures and debt service through fiscal year 2023.

Generally, we fund working capital requirements, capital expenditures, payments related to acquisitions and debt service requirements with a combination of both cash on hand and the borrowing capacity under the Secured Credit Facility, as discussed below. The Company considers all investments with initial maturities of three months or less to be cash and cash equivalents, which consist primarily of demand deposits with major financial institutions in the United States and in countries where the Company’s subsidiaries operate. As of June 30, 2022, our cash and cash equivalents totaled $40.8 million, and we had $249.4 million of borrowings available under the revolving credit facility.

During the second quarter of fiscal year 2022, the Company entered into an agreement to sell certain trade accounts receivable to a third party financial institution (“Receivables Purchase Agreement”). The Receivables Purchase Agreement results in the transfer of the trade accounts receivable and associated risks to the third party and provides the third party with the full benefits and burdens of ownership in exchange for cash proceeds to the Company. The trade accounts receivable transferred are accounted for as sales of receivables as they have satisfied the required criteria under Accounting Standards Codification (“ASC”) 860, Transfers and Servicing, and are de-recognized from the Company’s condensed consolidated balance sheets. The maximum receivables that may be sold under the Receivables Purchase Agreement at any time is $235.0 million. As of June 30, 2022, the third party under the Receivables Purchase Agreement informed the Company that, as permitted by the terms of the agreement, it will not be purchasing trade accounts receivable for an unspecified period of time. There can be no assurance that the third party will begin purchasing trade accounts receivable in the near term, or at all.

We believe we have sufficient cash and cash equivalents, including net cash provided by operating activities and availability under our Secured Credit Facility, to fund our operations, capital expenditures and debt service through fiscal year 2022. Given the current operating environment, we are assessing options to strengthen our balance sheet. These may include additional debt or equity financing, factoring facilities and other potential financing options. There can be no assurance that equity or debt financing will be available to us if we need it or, if available, the terms will be satisfactory to us. We are also pursuing a number of financial transformation initiatives, which include suspension of our dividend; reduction of capital expenditures, cost of goods sold and selling, general and administrative expenses; prudent management of global inventory and working capital positions; and a workforce reduction of our non-manufacturing and distribution headcount by at least 10%, while reducing overall selling, general and administrative personnel costs by at least 15%.

Secured Credit Facility

The Company has a credit facility arrangement with a term loan of $1,250.0 million (“Term Loan”), ~~and~~an aincremental ~~revolving~~term ~~credit~~loan ~~facility with a maximum commitment~~ of $~~300~~250.0 million (the “~~Secured~~Incremental ~~Credit~~Term ~~Facility~~Loan”). ~~The term loan matures on October 30, 2027~~ and ~~the~~a revolving ~~facility matures by October 30, 2025. Borrowings under the~~ credit ~~facilities~~facility ~~bear~~with ~~interest at~~ a ~~rate~~maximum ~~equal~~commitment ~~to, at our option, either (i) LIBOR for the relevant interest period, adjusted for statutory reserve requirements (subject to a floor~~ of 0$300.~~00% per annum for all revolving loans and a~~ 0~~.75%~~ ~~floor~~million ~~for the term loans), plus an applicable margin or~~ (~~ii) a base rate equal to~~ the ~~highest of (a) the rate of interest publicly announced from time to time by the administrative agent as its~~ “~~prime~~Revolving ~~rate~~Loan”,) (b)collectively, the ~~federal~~“Secured ~~funds~~Credit ~~effective rate plus 0.50% and (c~~Facility”) ~~adjusted LIBOR for an interest period of one month plus 1~~.~~00%~~ ~~(subject to a floor of 0.00% per annum), in each case, plus an applicable margin.~~

~~On March 2, 2022, the Company exercised its right under the Secured Credit Facility to borrow $250.0 million of incremental term loans (the “Incremental Term Loan”).~~ The ~~Incremental~~ Term Loan matures on October 30, 2027. ~~Principal~~and ~~payments on~~ the ~~Incremental~~revolving ~~Term~~facility ~~Loan~~matures ~~commenced~~by onOctober ~~June~~ 30, ~~2022,~~2025. ~~and~~Borrowings ~~are~~under ~~payable~~the ~~quarterly~~credit atfacilities ~~scheduled~~bear ~~amounts,~~interest ~~with~~at ~~the~~a ~~balance~~rate ~~due~~equal to, at ~~maturity.~~our ~~At the Company’s~~ option, ~~the Incremental Term Loan interest rate is based on~~ either (ai) ~~Term~~LIBOR ~~secured~~for ~~overnight~~the ~~financing~~relevant ~~rate~~interest ~~(“SOFR”)~~period, adjusted for ~~the~~statutory ~~applicable~~reserve ~~interest~~requirements ~~period~~ (subject to a floor of 0.00% per annum for all revolving loans and a 0.75% floor for the term loans), plus an applicable margin or (bii) a base rate equal to the highest of (ia) the rate of interest publicly announced from time to time by the administrative agent as its “prime rate”, (iib) the federal funds effective rate plus 0.50% and (~~iii~~c) ~~Term~~adjusted ~~SOFR~~LIBOR for an interest period of one month plus 1.00% (subject to a floor of 0.7500% per annum), in each case, plus an applicable margin. As of ~~June~~December 3031, 2022, the interest rate on the Incremental Term Loan was ~~SOFR~~LIBOR plus 43.25%. ~~Interest is payable on the last business day of the month for the relevant interest period selected.~~

AsThe ofIncremental ~~June 30,~~Term ~~2022,~~Loan wematures ~~were~~on inOctober 30, ~~compliance~~2027. ~~with~~At the ~~covenants~~Company’s ofoption, the ~~Secured~~Incremental ~~Credit~~Term ~~Facility.~~Loan ~~However,~~interest ~~our~~rate ~~business~~ is ~~seasonal~~based inon ~~nature~~either ~~with~~(a) ~~the~~Term ~~highest~~secured ~~level~~overnight offinancing ~~sales~~rate of(“SOFR”) ~~its~~for ~~products occurring in~~ the ~~second~~applicable ~~and~~interest ~~third~~period ~~fiscal~~(subject ~~quarters; accordingly, we typically borrow under our short-term revolving credit facility in the first and second fiscal quarters~~ to ~~fund~~a ~~working~~floor ~~capital for building up inventory in anticipation~~ of ~~the~~0.75%) ~~higher~~plus ~~demand~~an inapplicable ~~the~~margin ~~second~~or ~~and~~(b) ~~third~~base ~~fiscal~~rate ~~quarters.~~equal ~~Given~~to the ~~current~~highest ~~macroeconomic~~of ~~environment~~(i) ~~and~~ the ~~challenges~~rate ~~posed by inflation, foreign exchange fluctuations, supply chain disruptions and higher freight and fuel costs, we expect continued pressure on our results~~ of ~~operations,~~interest ~~working~~publicly ~~capital~~announced ~~requirements~~from ~~and~~time ~~ability~~ to ~~comply~~time ~~with~~by the ~~covenants~~administrative inagent ~~the~~as ~~Secured~~its ~~Credit~~“prime ~~Facility. We are monitoring this matter~~rate”, ~~taking~~(ii) ~~certain~~the ~~financial~~federal ~~transformation~~funds ~~and~~effective ~~cost~~rate ~~savings~~plus ~~actions,~~0.50% ~~which include suspension of its dividend; reduction of capital expenditures, cost of goods sold~~ and ~~selling,~~(iii) ~~general~~Term ~~and~~SOFR ~~administrative~~for ~~expenses;~~an ~~prudent~~interest ~~management~~period of ~~global~~one ~~inventory~~month ~~and~~plus ~~working~~1.00% ~~capital~~(subject ~~positions;~~to ~~and~~ a ~~workforce~~floor ~~reduction~~ of ~~our~~0.75% ~~non-manufacturing~~per ~~and~~annum), ~~distribution~~in each case,

5034

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~~headcount~~plus byan atapplicable ~~least~~margin. ~~10%~~As ~~while~~of ~~reducing overall selling~~December 31, ~~general and administrative personnel costs by at least 15%. Additionally~~2022, the ~~Company~~interest israte ~~working~~on ~~with its lenders to ensure continued compliance with~~ the ~~Secured~~Incremental ~~Credit~~Term ~~Facility.~~Loan ~~There~~was ~~can~~SOFR beplus ~~no assurance that these efforts will be successful~~4.25%.

On December 27, 2022, the Company amended the Secured Credit Facility loan agreement. Pursuant to the amendment, the leverage ratio covenant was waived for the fiscal quarters ending December 31, 2022, and March 31, 2023. As of December 31, 2022, the Company was in compliance with all other covenants in the Secured Credit Facility.

Unsecured Loan Agreements

On November 8, 2022, the Company entered into a loan agreement with BDT Capital Partners Fund I, L.P. and BDT Capital Partners Fund I-A, L.P. The loan agreement provides for an unsecured term loan in an initial aggregate principal amount of $61.2 million (the “Unsecured 12% Term Loan”) and additional unsecured term loans in an aggregate principal amount of up to $150.0 million. The Unsecured 12% Term Loan and any additional unsecured term loans entered into under the loan agreement mature on January 29, 2028 and bear interest at a fixed annual rate equal to 12.0%, payable in kind or in cash, at the election of the Company, on a quarterly basis (and, in the absence of such election, interest will be paid in kind).

On December 11, 2022, the Company entered into a loan agreement with Ribeye Parent, LLC, which provides for an unsecured delayed draw term loan of $120.0 million (the “Unsecured 15% Term Loan”) and an unsecured revolving credit facility with an initial aggregate commitment of $230.0 million (the “Unsecured Revolving Loan”) (collectively, the “Unsecured 15% Credit Facility”). The Unsecured 15% Term Loan and Unsecured Revolving Loan may be drawn down subject to customary closing conditions no later than December 31, 2023. Borrowings under the Unsecured 15% Credit Facility mature on December 31, 2023 and bear interest at a fixed annual rate equal to 15.0%, payable in kind or in cash, at the election of the Company, on a quarterly basis (and, in the absence of such election, interest will be paid in kind). A commitment fee of 0.5% per annum or average daily unused commitments under the Unsecured 15% Credit Facility shall also be payable in kind or in cash on a quarterly basis.

The Unsecured 12% Term Loan and Unsecured 15% Credit Facility contain no negative covenants and no financial maintenance covenant.

Summary of Cash Flows

A summary of our cash flows (used in) provided by operating, investing and financing activities is presented in the following table:

	Nine Months Ended June 30,
	Three Months Ended December 31,
	2022		2021
	(dollars in thousands)
Net cash (used in) provided by operating activities	$	(242,834)	$	74,460
Net cash used in operating activities	$	(111,621)	$	(187,893)
Net cash used in investing activities	(8024,~~344~~437)		(~~154~~25,~~989~~866)
Net cash provided by financing activities	~~240~~159,~~260~~228		~~102~~153,~~577~~336
Effect of exchange rate changes on cash and cash equivalents	16(10,~~247~~036)		~~629~~(895)
Net (decrease) increase in cash and cash equivalents	$	(66,671)	$	22,677
Net increase (decrease) in cash and cash equivalents	$	13,134	$	(61,318)

Cash (Used in) ~~Provided by~~ Operating Activities

Net cash used in operating activities was $~~242~~111.86 million for the ~~nine~~three months ended ~~June~~December 3031, 2022 as compared to ~~cash provided by operating activities of~~ $74187.59 million for the ~~nine~~three months ended ~~June~~December 3031, 2021, ana ~~increase~~decrease of $~~317~~76.3 million or ~~426~~41%. The ~~increase~~decrease in net cash used in operating activities is primarily due to ~~lower~~the ~~operating~~normalization ~~results~~of global inventory levels.

Cash Used in Investing Activities

Net cash used in investing activities was $8024.34 million for the ~~nine~~three months ended ~~June~~December 3031, 2022 as compared to $~~155~~25.09 million for the ~~nine~~three months ended ~~June~~December 3031, 2021, a decrease of $741.64 million or 486%., ~~The~~which ~~current~~was ~~year~~related ~~period~~to ~~reflects~~lower ~~the~~capital ~~absence~~expenditures. In ofboth ~~cash~~periods, ~~payments~~capital ofexpenditures ~~$102.2~~were ~~million~~primarily ~~for~~comprised ~~the acquisition~~ of ~~June~~costs ~~and $26.3 million~~ for the ~~acquisition~~Company’s implementation of ~~the~~a ~~RMC~~Global ~~business,~~SAP/S4 asHANA ~~well~~ERP asplatform ~~cash~~and ~~proceeds~~capital offor ~~$14.0 million from~~ the ~~disposal~~Europe ofManufacturing aFacility ~~manufacturing~~in ~~site~~Poland. ~~Capital~~The ~~expenditures increased $39.9 million as compared to the~~ prior year period, ~~primarily~~also ~~related~~reflects ~~to the Company’s implementation of a Global SAP/S4 HANA ERP platform,~~ building improvements for the global headquarters office in the U.S. ~~and capital for the Europe Manufacturing Facility in Poland.~~

Cash Provided by Financing Activities

Net cash provided by financing activities was $~~240~~159.32 million for the ~~nine~~three months ended ~~June~~December 3031, 2022 as compared to $~~102~~153.63 million for the ~~nine~~three months ended ~~June~~December 3031, 2021. During the ~~nine~~three months ended ~~June~~December 3031, 2022, the Company ~~received~~borrowed ~~$250.0~~a ~~million in proceeds from the Incremental Term Loan. In addition, there were~~ net ~~proceeds~~amount ~~from the revolving credit facility~~ of $48111.0 ~~million~~ ~~and proceeds of $11.3~~ million ~~for issuance of capital. The Company paid $34.5 million of member distributions, $9.7 million of issuance costs associated with the Incremental Term Loan, $10.0 million of principal repayments~~ on its ~~term~~Revolving ~~loans,~~Loan ~~$6.4~~and ~~million~~received proceeds of ~~dividends,~~ $461.~~4 million for interest rate swap settlements and $~~2.1 ~~million for certain IPO-related costs, all of which offset the cash proceeds.~~

During the nine months ended June 30, 2021, the Company refinanced its debt, resulting in proceeds of $1,250.0 million, of which $616.6 million was used to the payoff the previous credit facility. The Company paid $26.7 million of costs associated with the debt refinancing and subsequently paid down $6.3 million on the term loan. Additionally, the Company paid member distributions of $315.6 million, repurchased certain members’ interests for $188.9 million, paid interest rate swap settlements of $3.9 million and paid certain IPO-related costs of $2.3 million. These transactions were partially offset by proceeds of $13.1 million for issuance of capital. 35

Dividends/Distributions

On May 11, 2022, (i) the Weber Inc. Board of Directors declared a quarterly dividend of $0.04 per share of Class A common stock, which was paid on June 17, 2022 to stockholders of record on June 7, 2022 and (ii) Weber HoldCo LLC declared a distribution of $0.04 per LLC Unit, which was paid on June 17, 2022 to LLC Unit holders on that date.

On July 25, 2022, the Company announced that the Weber Inc. Board of Directors has suspended the quarterly cash dividend.

Other Information

As of June 30, 2022, $30.8 million of our $40.8 million in cash and cash equivalents was held in jurisdictions outside of the U.S. Cash held outside the U.S. may be repatriated, subject to certain limitations, and would be available to

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bemillion ~~used~~for toissuance ~~fund~~of ~~our~~the ~~domestic~~Unsecured ~~operations~~12% Term Loan. ~~However~~In addition, ~~repatriation~~the ofCompany ~~funds~~repaid ~~may~~$4.9 ~~result~~million inof ~~additional~~other ~~tax~~borrowings, ~~liabilities~~made $3.8 Wemillion ~~believe~~of ~~that~~principal ~~our~~repayments ~~existing~~on ~~cash~~its ~~balance~~term inloans, ~~the~~paid U$1.S5 million for interest rate swap settlements and paid $1.5 ismillion ~~sufficient~~for totaxes ~~fund~~associated ~~our~~with ~~working~~share-based ~~capital~~compensation, ~~needs~~all inof which offset the Ucash proceeds.S.

During the three months ended December 31, 2021, the Company borrowed a net amount of $161.0 million on its Revolving Loan and received proceeds of $11.3 million for issuance of capital. This was partially offset by member distributions of $9.6 million, a principal repayment of $3.1 million on the Term Loan, dividend payments of $2.1 million, payments of certain IPO-related costs of $2.1 million and interest rate swap settlements of $1.5 million.

Credit Rating

In December 2022, S&P affirmed Weber Inc.'s credit rating of CCC+.

Other Information

As of December 31, 2022, $33.1 million of our $37.7 million in cash and cash equivalents was held in jurisdictions outside of the U.S. Cash held outside the U.S. may be repatriated, subject to certain limitations, and would be available to be used to fund our domestic operations. However, repatriation of funds may result in additional tax liabilities. We believe that our existing cash balance in the U.S. is sufficient to fund our working capital needs in the U.S.

Critical Accounting Policies and Estimates

Our unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, sales and expenses and related disclosures of contingent assets and liabilities. We base these estimates on historical results and various other assumptions believed to be reasonable, all of which form the basis for making estimates concerning the carrying values of assets and liabilities that are not readily available from other sources. Actual results may differ from these estimates.

There have been no significant changes to our accounting policies during the ~~nine~~three months ended ~~June~~December 3031, 2022. See our Annual Report on Form 10-K for the year ended September 30, ~~2021~~2022 for a summary of these policies.

Recent Accounting Pronouncements

There have been no new accounting standards material to Weber Inc. that have been adopted during the ~~nine~~three months ended ~~June~~December 3031, 2022.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes with respect to the Company’s exposure to market risk disclosed in our Annual Report on Form 10-K for the year ended September 30, ~~2021~~2022.

Item 4. Controls and Procedures

Management’s Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required financial disclosure.

As of the end of the period covered by this Form 10-Q ~~Report~~, our management, under the supervision and with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e) and 15d-15(e). Based upon this evaluation, our principal executive officer and principal financial officer concluded that the design and operation of our disclosure controls and procedures were not effective atbecause aof ~~reasonable~~our ~~assurance~~previously ~~level~~reported asmaterial weakness in the design and operation of ~~June~~ information technology general controls (“ITGCs”) related to our IT applications supporting all of the Company’s internal control over financial reporting processes, including our enterprise resource planning system (“ERP”), which we describe in Part II, Item 9A of our Annual Report on Form 10-K for the fiscal year ended September 30, 2022.

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Remediation of Material Weakness

The Company is in the process of implementing changes associated with the design, implementation, and monitoring of ITGCs in the areas of user access and change management for IT applications supporting all of the Company’s financial statement preparation and reporting processes to ensure that internal controls are designed and operating effectively. A significant portion of our remediation plan to address the material weakness includes the implementation of our new global ERP system, SAP S4/HANA, which was deployed in the U.S. and significant portions of our European operations during the first quarter of fiscal year 2023. While the new system is expected to be implemented to all global operations, the Company is evaluating the timing of the implementation, which may fluctuate based on future business conditions. The new ERP system will allow us to address user access and systematic segregation of duties issues by establishing user roles specific to the nature of each job function. We are also establishing controls to ensure the appropriate authorization of new user access provisioning requests and user terminations, including the performance of routine reviews of existing user access, and appropriate controls over change management. For those portions of the business where legacy IT applications remain in place beyond our next assessment period, the Company intends to address the control deficiencies as necessary. We believe that these actions, collectively, will remediate the material weakness. However, the material weakness cannot be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Control over Financial Reporting

~~There~~Other than the ongoing remediation plans described above, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the quarter ended ~~June~~December 3031, 2022.

Limitations on the Effectiveness of Controls

Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives as specified above. Management does not expect, however, that our disclosure controls and procedures will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based on certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The information presented in Note 8 to our condensed consolidated financial statements within this Quarterly Report on Form 10-Q is incorporated herein by reference.

In addition, on July 29, 2022, a purported class action complaint was filed in the U.S. District Court for the Northern District of Illinois naming as defendants, among others, the Company, our former Chief Executive Officer, our former Chief Financial Officer, our interim Chief ~~Accounting~~Financial Officer, most of our board of directors and the banks that acted as underwriters in our initial public offering. The complaint asserts claims under U.S. federal securities laws, on behalf of a putative class of purchasers of shares of Class A common stock in the Company’s initial public offering in August 2021 (the “IPO”), alleging that the IPO Registration Statement and prospectus made false or misleading statements regarding the purported likelihood of price increases and declining demand and failed to disclose that, as a result of the foregoing, there would be an adverse impact on the Company’s financial results. The action seeks unspecified damages and an award of costs and expenses, including reasonable attorneys’ fees~~, as well as equitable relief~~.

On January 19, 2023, a purported stockholder filed a lawsuit against the Company and its Board of Directors in the U.S. District Court for the Southern District of New York. The complaint asserts claims against all defendants under Sections 14(a) and 20(a) of the Exchange Act for allegedly false or misleading statements in the Company’s preliminary information statement filed in connection with the Merger, and against the individual defendants under Section 20(a) of the Exchange Act for alleged control person liability with respect to such allegedly false and misleading statements. The complaint seeks, among other relief, (1) to enjoin defendants from consummating the Merger; (2) to rescind the Merger or recover damages, if the Merger is completed; (3) to require defendants to disseminate certain additional information as specified in the complaint; and (4) costs, including reasonable attorneys’ and experts’ fees. Since the filing of the lawsuit, the Company has also received several demand letters, alleging that the disclosures in the preliminary information statement are incomplete and demanding that the Company issue supplemental disclosures. The Company believes the claims asserted in the lawsuit and the demands are without merit.

The Company has also received several demands from purported stockholders seeking the production of books and records, pursuant to 8 Del. C. § 220, for the purported purpose of investigating potential wrongdoing in connection with the Merger. On January 17, 2023, one of the demanding stockholders filed a lawsuit against the Company in the Delaware Court of Chancery. The complaint asserts claims under 8 Del. C. § 220, and consistent with the stockholder’s demand, seeks to compel inspection of certain books and records related to the Merger. The Company is negotiating with the stockholders over the scope of a production in response to the lawsuit and demands.

Additional lawsuits arising out of the Merger may be filed in the future. No assurances can be made as to the outcome of such lawsuits or the actions filed to date.

Item 1A. Risk Factors

~~Material~~There ~~updates~~have been no material changes with respect to ~~our~~the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, ~~2021 and our Quarterly Report on Form 10-Q for the six months ended March 31,~~ 2022 ~~are disclosed below~~.

Risks Related to Our Financial Condition

We rely on our free cash flow generation and credit facilities to provide us with sufficient working capital to operate our business and finance our growth strategies.

Historically, we have relied upon our free cash flow generation and existing credit facilities to provide us with adequate working capital to operate our business. Moreover, our growth rate depends, to a large degree, on the availability of adequate capital to fund the expansion of our products offerings and market penetration, which in turn will depend in large part on cash flow generated by our business and the availability of equity and debt capital. To the extent we become more dependent upon our credit facilities to fund our operations, if our lenders reduce or terminate our access to amounts under our credit facilities, we may not have sufficient capital to fund our working capital needs or growth strategies and/or we may need to secure additional capital or financing to fund our working capital requirements, to repay outstanding debt under our credit facilities or to finance our growth strategies. Given the current macroeconomic environment, we expect continued pressure on our ability to comply with the covenants in our Secured Credit Facility (as defined herein), which could limit our borrowing capacity and result in a default. We are monitoring this matter and working with lenders under the Secured Credit Facility on options to prevent a default in the event we are not able to continue to meet the current covenants in the Secured Credit Facility. We can make no assurance that we will be successful in ensuring our availability of amounts under our credit facilities when they are needed or in connection with raising additional capital and that any amount, if raised, will be sufficient to meet our cash flow requirements. In the event we do not have available cash balances on hand for funding future operations, and if we are not able to maintain our borrowing availability under our credit facilities at that time and/or raise additional capital when needed, we may be forced to sharply curtail our efforts to manufacture and promote the sale of our products or to curtail our operations.

The implementation of our workforce reduction and restructuring plan could result in greater costs and fewer benefits than we anticipate, which could materially harm our business, financial condition and operating results.

As described in this Quarterly Report on Form 10-Q, we are in the process of initiating a restructuring plan to manage cash flows, expand gross margins and reduce selling, general and administrative expenses. The restructuring plan is comprised of a workforce reduction of the Company’s non-manufacturing and distribution headcount of at least 10%, lease exit and other contract terminations and the disposal of certain assets. In conjunction with these actions, we expect to incur pre-tax expenses totaling approximately $30 million to $40 million, which the Company expects to record during the fourth quarter of fiscal year 2022.

The process to undertake these restructuring initiatives could take more time and be more costly than anticipated. These restructuring initiatives could place substantial demands on our management, which could lead to the diversion of management’s attention from other business priorities. These initiatives could also lead to unanticipated work stoppages, low employee morale, decreased productivity, and a failure to deliver under existing commitments to third parties, which could harm our business. As a result of these or any other factors, we could fail to realize the anticipated benefits associated with the workforce reduction and restructuring initiatives, which could in turn materially harm our business, financial condition and operating results.

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Other than the new risk factors above, there have been no material changes with respect to the risk factors disclosed in our Annual Report on Form 10-K for the year ended September 30, 2021 and our Quarterly Report on Form 10-Q for the six months ended March 31, 2022.

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

There were no sales of unregistered equity securities during the three ~~and nine~~ months ended ~~June~~December 3031, 2022.

Pursuant to the terms of the ~~Amended and Restated Limited Liability Company Agreement of Weber~~ HoldCo LLC Agreement, each holder of ~~non-voting common interest units of Weber HoldCo~~ LLC ~~("LLC~~ Units") has the right to require Weber HoldCo LLC (the “HoldCo LLC Agreement”) to redeem all or a portion of its LLC Units for, at the Company’s election, newly issued shares of Class A ~~Common~~common ~~Stock~~stock on a one-for-one basis or a cash payment equal to the volume weighted average market price of one share of Class A ~~Common~~common ~~Stock~~stock for each LLC Unit redeemed (subject to customary adjustments, including for stock splits, stock dividends and reclassifications). Additionally, in the event of a redemption request by a holder of LLC Units, the Company may, at its option, effect a direct exchange of cash or Class A ~~Common~~common ~~Stock~~stock for LLC Units in lieu of such a redemption. A corresponding number of shares of Class B ~~Common~~common ~~Stock~~stock will be canceled on a one-for-one basis if the Company or Weber HoldCo LLC, following a redemption request of a holder of LLC Units, redeems or exchanges LLC Units of such holder of LLC Units.

~~Item~~The 5HoldCo LLC Agreement was amended on December 11, 2022 by certain affiliates of BDT Capital Partners, LLC. ~~Other~~ ~~Events~~As amended, holders of shares of Class B Common Stock and paired LLC Units had the right to participate in the Merger by delivering a notice of participation on or prior to January 28, 2023. Such right was provided in lieu of any right such holders have to participate in the Merger pursuant to Section 10.05(a) of the HoldCo LLC Agreement or otherwise

On August 12, 2022, as part of our cost-saving plan to preserve liquidity, expand gross margins and reduce selling, general and administrative costs, the Board approved a restructuring plan, which included a workforce reduction of our non-manufacturing and distribution headcount by at least 10%, including the termination of certain senior executives, the termination of certain lease and other contractual obligations and the disposal of certain other assets. We expect to substantially complete the restructuring plan by the first quarter of fiscal year 2023.38

As a result of these actions, the Company expects to incur total pre-tax charges of between approximately $30 million and $40 million, which are expected to be recorded in the fourth quarter of fiscal 2022. Of these total charges, approximately $23 million to $30 million relates to severance and other termination-related benefits, approximately $4 million to $5 million relates to lease and other contractual terminations, and approximately $3 million to $5 million relates to the disposal of certain other assets. Of these total costs, approximately $27 million to $35 million are expected to be paid in cash.

Also on August 12, 2022, the Board approved the departures of Mary A. Sagripanti, Chief Marketing Officer of the Company, and Troy J. Shay, Chief Executive Officer of 1952 Ventures LLC and Chief Growth Officer of the Company, from their respective roles.

As disclosed on a Form 8-K filed on July 25, 2022, the Board appointed Alan D. Matula as the Company’s Interim Chief Executive Officer, effective July 24, 2022. In connection with this appointment, on August 12, 2022 the Compensation Committee of the Board approved an increase in Mr. Matula’s annual base salary to $925,000, with a target annual incentive under the Company’s Annual Incentive Plan of 100% of his annual base salary, with such increases effective from July 24, 2022.

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redeem units of Weber HoldCo LLC during the period between the execution of the Merger Agreement and the consummation of the Merger.

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Item 6. Exhibits

Exhibit No.						Description
31.1*						Certification of Interim Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
10.1						Fourth Amendment to Credit Agreement dated as of December 27, 2022, by and among Weber-Stephen Products LLC, as the Borrower, Weber-Stephen Products Belgium BV, as the Euro Borrower, Bank of America N.A., as Administrative Agent and the Lenders party thereto (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on December 28, 2022)
31.2*						Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.1*						Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*						Certification of Interim Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
31.2*						Certification of Interim Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.2*						Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.1*						Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*						The following financial statements from Weber Inc.’s Quarterly Report on Form 10-Q for the nine months ended June 30, 2022, filed with the Securities and Exchange Commission on August 15, 2022, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive (Loss) Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Equity (Deficit), and (vi) the Notes to Condensed Consolidated Financial Statements.
32.2*						Certification of Interim Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
104**						The cover page from Weber Inc.’s Quarterly Report on Form 10-Q for the nine months ended June 30, 2022 formatted in iXBRL (Inline eXtensible Business Reporting Language) and contained in Exhibit 101.
101*						The following financial statements from Weber Inc.’s Quarterly Report on Form 10-Q for the three months ended December 31, 2022, filed with the Securities and Exchange Commission on February 9, 2023, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive (Loss) Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Equity (Deficit), and (vi) the Notes to Condensed Consolidated Financial Statements.
104**						The cover page from Weber Inc.’s Quarterly Report on Form 10-Q for the three months ended December 31, 2022 formatted in iXBRL (Inline eXtensible Business Reporting Language) and contained in Exhibit 101.

*Filed herewith.

**Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Weber Inc. By: /s/ Alan D. Matula Alan D. Matula ~~Interim~~ Chief Executive Officer (As Principal Executive Officer) By: /s/ ~~William~~Marla JY. ~~Horton~~Kilpatrick ~~William~~Marla JY. ~~Horton~~Kilpatrick Interim Chief Financial Officer (As Principal Financial Officer)

Date: ~~August~~February 159, ~~2022~~2023

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