Form 8-K - Current report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 7, 2024

 

 

Advantage Solutions Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			001-38990	83-4629508
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
8001 Forsyth Blvd, Suite 1025
Clayton, Missouri				63105
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: [phone]

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

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

 

 

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Item 7.01. Regulation FD Disclosure.

Effective January 1, 2024, Advantage Solutions Inc. (the “Company”) revised its reportable segments to align with the Company's business strategy, and the manner in which the Chief Executive Officer, the Company’s chief operating decision maker, assesses performance and makes decisions regarding the allocation of resources for the Company. The Company’s revised reportable segments consist of Branded Services, Experiential Services, and Retailer Services.

•

Branded Services offers capabilities in brokerage, branded merchandising and omni-commerce marketing services to consumer goods manufacturers.

•

Experiential Services expands the reach of consumer brands and retailer products to convert shoppers into buyers through sampling and product demonstration programs executed in-store and online.

•

Retailer Services provides retailers with end-to-end advisory, retailer merchandising, and agency expertise to drive sales.

For informational purposes and to assist investors in making comparisons of the Company’s historical financial information with financial information to be made available in the future that will reflect the revised reportable segments, the Company has furnished as Exhibit 99.1 to this Form 8-K certain unaudited historical information to recast supplemental financial information and historical data that is on a basis consistent with the Company’s revised reportable segments for the three months ended March 31 and June 30, 2024, 2023 and 2022, and the three months ended September 30, and December 31, 2023 and 2022. These changes only affect segment allocation of results and do not revise or restate the Company's previously reported consolidated financial statements or the Company's previously reported non-GAAP adjustments on a consolidated basis.

As of March 31, 2024, the Company determined that certain businesses that had been disposed of and businesses classified as held for sale as of March 31, 2024 met the criteria for discontinued operations presentation. In addition, as of June 30, 2024, certain additional businesses that had been disposed of and businesses classified as held for sale as of June 30, 2024 met the criteria for discontinued operations presentation. Accordingly, for all periods presented, the operating results associated with the businesses disposed of and classified as held for sale have been reclassified into discontinued operations. Refer to Note 2—Held for Sale, Divestitures and Discontinued Operations in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2024 to be filed with the Securities and Exchange Commission (the "SEC") on or about August 9, 2024 for additional information on the Company’s assets and liabilities classified as held for sale and the Company’s discontinued operations. The Company continues to evaluate opportunities to further simplify its operations so the Company can focus more resources on its core businesses.

The information contained in this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

	Exhibit No.		Description
	99.1		Supplemental Financial Data – Segment Realignment
	104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

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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.

			ADVANTAGE SOLUTIONS INC.
Date:	August 7, 2024	By:	/s/ Christopher Growe
			Christopher Growe Chief Financial Officer

 

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EXHIBIT 99.1

ADVANTAGE SOLUTIONS INC.

SUMMARIZED QUARTERLY RESULTS

AS RECAST

(UNAUDITED)

		Three Months Ended
(in thousands)		June 30, 2024(a)				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023				December 31, 2022				September 30, 2022				June 30, 2022				March 31, 2022
Revenues
Branded Services		$	322,340			$	329,054			$	431,282			$	451,173			$	447,265			$	428,697			$	480,963			$	444,317			$	428,044			$	410,752
Experiential Services			319,508				307,351				308,727				308,381				285,174				257,167				253,557				245,752				221,863				183,058
Retailer Services			231,509				225,007				251,939				260,152				231,319				238,849				260,270				264,976				230,941				221,849
Total revenues from continuing operations		$	873,357			$	861,412			$	991,948			$	1,019,706			$	963,758			$	924,713			$	994,790			$	955,045			$	880,848			$	815,659
Revenues from discontinued operations			28,874				44,634				87,801				76,353				73,297				87,270				107,973				96,050				100,228				99,149
Previously reported revenues from continuing and discontinued operations(b)		$	902,231			$	906,046			$	1,079,749			$	1,096,059			$	1,037,055			$	1,011,983			$	1,102,763			$	1,051,095			$	981,076			$	914,808
Operating (Loss) Income
Branded Services		$	(107,280	)		$	(22,118	)		$	33,779			$	(599	)		$	8,920			$	3,286			$	(800,471	)		$	24,033			$	10,123			$	9,057
Experiential Services			6,453				(3,642	)			845				1,971				4,805				(4,326	)			(358,628	)			(1,390	)			(5,379	)			(6,503	)
Retailer Services			9,568				(4,190	)			(13,962	)			5,281				1,526				5,063				(392,537	)			14,722				5,511				7,519
Total operating (loss) income from continuing operations		$	(91,259	)		$	(29,950	)		$	20,662			$	6,653			$	15,251			$	4,023			$	(1,551,636	)		$	37,365			$	10,255			$	10,073
Operating income (loss) from discontinued operations			9,820				61,287				25,530				9,330				7,020				(12,279	)			14,098				9,477				18,011				12,951
Previously reported operating (loss) income from continuing and discontinued operations(b)		$	(81,439	)		$	31,337			$	46,192			$	15,983			$	22,271			$	(8,256	)		$	(1,537,538	)		$	46,842			$	28,266			$	23,024
Adjusted EBITDA
Branded Services		$	42,856			$	34,335			$	49,385			$	50,710			$	51,787			$	51,801			$	64,663			$	62,418			$	58,289			$	52,642
Experiential Services			22,611				16,693				13,211				16,584				16,202				7,006				7,161				10,520				4,587				3,281
Retailer Services			24,431				19,613				24,229				26,023				21,865				23,445				18,433				29,289				24,720				22,490
Total Adjusted EBITDA by segment from continuing operations		$	89,898			$	70,641			$	86,825			$	93,317			$	89,854			$	82,252			$	90,257			$	102,227			$	87,596			$	78,413
Adjusted EBITDA from discontinued operations			7,938				8,119				28,091				19,832				14,358				9,818				22,409				16,041				20,726				18,326
Previously reported Adjusted EBITDA from Continuing and Discontinued Operations(b)		$	97,836			$	78,760			$	114,916			$	113,149			$	104,212			$	92,070			$	112,666			$	118,268			$	108,322			$	96,739

__________________

(a)

Results for the three months ended June 30, 2024 have not been previously reported.

(b)

For the three months ended March 31, 2024 and 2023 revenues related to discontinued operations as reported were $44.6 million and $87.3 million, respectively. For the three months ended March 31, 2024 operating income related to discontinued operations as reported was $61.3 million. For the three months ended March 31, 2023 operating loss related to discontinued operations as reported was $12.3 million. For the three months ended March 31, 2024 and 2023 Adjusted EBITDA from Discontinued Operations was not previously reported. During the three months ended June 30, 2024, additional businesses met the criteria as held for sale representing an additional $5.0 million and $3.6 million during the three months ended March 31, 2024 and 2023, respectively.

1

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EXHIBIT 99.1

 

ADVANTAGE SOLUTIONS INC.

NON-GAAP ADJUSTED EBITDA RECONCILIATIONS

AS RECAST

(UNAUDITED)

This supplemental financial information includes certain financial measures not presented in accordance with generally accepted accounting principles (“GAAP”), including Adjusted EBITDA from Continuing Operations and Discontinued Operations, Adjusted EBITDA by segment, Adjusted EBITDA from Discontinued Operations, Revenues net of pass-through costs by segment and Revenues net of pass-through costs from discontinued operations. These are not measures of financial performance calculated in accordance with GAAP and may exclude items that are significant in understanding and assessing the financial results for Advantage Solutions Inc. (“Advantage”). Therefore, the measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP, and should not be considered in isolation or as an alternative to operating income, net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that Advantage’s presentation of these measures may not be comparable to similarly titled measures used by other companies. Reconciliations of historical non-GAAP measures to their most directly comparable GAAP counterparts are included below.

Advantage believes these non-GAAP measures provide useful information to management and investors regarding certain financial and business trends relating to Advantage’s financial condition and results of operations. Advantage believes that the use of Adjusted EBITDA from Continuing and Discontinued Operations, Adjusted EBITDA by segment, Adjusted EBITDA from Discontinued Operations, Revenues net of pass-through costs by segment and Revenues net of pass-through costs from discontinued operations each provide an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing Advantage’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. Advantage believes that Adjusted EBITDA from Continued and Discontinued Operations will help management and investors reconcile to previously reported amounts. Non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. Additionally, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore Advantage’s non-GAAP measures may not be directly comparable to similarly titled measures of other companies.

Adjusted EBITDA from Continuing and Discontinued Operations are supplemental non-GAAP financial measures of our operating performance. Adjusted EBITDA from Continuing and Discontinued Operations, means net (loss) income before (i) interest expense, net, (ii) provision for (benefit from) income taxes, (iii) depreciation, (iv) amortization of intangible assets, (v) impairment of goodwill and indefinite-lived assets, (vi) gain on deconsolidation of subsidiaries, (vii) loss (gain) on divestitures, (viii) changes in fair value of warrant liability, (ix) stock based compensation expense, (x) equity-based compensation of Karman Topco L.P., (xi) fair value adjustments of contingent consideration related to acquisitions, (xii) acquisition and divestiture related expenses, (xiii) reorganization expenses, (xiv) litigation expenses (recoveries), (xv) costs associated with COVID-19, net of benefits received, (xvi) costs associated with the Take 5 Matter, net of (recoveries), (xvii) EBITDA for economic interests in investments and (xviii) other adjustments that management believes are helpful in evaluating our operating performance.

Adjusted EBITDA by segment and Adjusted EBITDA from Discontinued Operations means, with respect to such segment or discontinued operations, as applicable, operating income (loss) before (i) depreciation, (ii) impairment of goodwill and indefinite-lived assets, (iii) amortization of intangible assets, (iv) gain on deconsolidation of subsidiaries, (v) (gain) loss on divestitures, (vi) equity-based compensation of Karman Topco L.P., (vii) changes in fair value of warrant liability, (viii) stock-based compensation expense, (ix) fair value adjustments of contingent consideration related to acquisitions, (x) acquisition and divestiture related expenses, (xi) costs associated with COVID-19, net of benefits received, (xii) EBITDA for economic interests in investments, (xiii) reorganization expenses, (xiv) litigation expenses (recovery), (xv) costs associated with the Take 5 Matter, net of (recoveries) and (xvi) other adjustments that management believes are helpful in evaluating our operating performance.

 

Revenue net of pass-through costs by segment and Revenues net of pass-through costs from discontinued operations means revenues less pass-through costs that are paid by Advantage's clients, including media, sample, retailer fees and other marketing and production costs.

2

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EXHIBIT 99.1

ADVANTAGE SOLUTIONS INC.

NON-GAAP ADJUSTED EBITDA RECONCILIATIONS

AS RECAST

(Unaudited)

 

Reconciliations of Adjusted EBITDA from Continuing and Discontinued Operations to Net (loss) income are provided in the following table:

 

		Three Months Ended
(in thousands)		June 30, 2024(a)				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023				December 31, 2022				September 30, 2022				June 30, 2022				March 31, 2022
Previously reported revenues from continuing and discontinued operations		$	902,231			$	906,046			$	1,079,749			$	1,096,059			$	1,037,055			$	1,011,983			$	1,102,763			$	1,051,095			$	981,076			$	914,808
Less: Pass-through costs(b)			(124,391	)			(134,592	)			(134,132	)			(131,926	)			(123,217	)			(110,068	)			(127,040	)			(109,480	)			(94,951	)			(73,138	)
Total revenues net of pass-through costs from continuing and discontinued operations		$	777,840			$	771,454			$	945,617			$	964,133			$	913,838			$	901,915			$	975,723			$	941,615			$	886,125			$	841,670
Net (loss) income		$	(100,835	)		$	(3,115	)		$	17,788			$	(22,582	)		$	(7,846	)		$	(47,678	)		$	(1,421,729	)		$	23,227			$	3,676			$	17,534
Add:
Interest expense, net			39,770				35,793				45,850				42,301				30,460				47,191				40,831				23,557				28,188				11,883
(Benefit from) provision for income taxes			(19,688	)			(1,628	)			(16,573	)			(4,323	)			(416	)			(7,696	)			(156,860	)			1,158				1,316				9,049
Depreciation and amortization			53,200				52,356				54,390				56,465				56,738				57,104				59,078				57,785				58,444				57,768
Impairment of goodwill and indefinite-lived assets			99,670				—				43,500				—				—				—				1,572,523				—				—				—
Gain on deconsolidation of subsidiaries			—				—				(58,891	)			—				—				—				—				—				—				—
(Gain) loss on divestitures			(13,179	)			(57,016	)			(1,140	)			2,553				1,158				16,497				81				—				—				2,782
Changes in fair value of warrant liability			(686	)			287				(873	)			587				73				(73	)			220				(1,100	)			(4,914	)			(15,442	)
Stock-based compensation expense(c)			7,630				7,220				10,370				10,074				11,226				11,210				9,919				7,174				14,961				7,771
Equity-based compensation of Karman Topco L.P.(d)			(872	)			392				754				209				(1,218	)			(2,269	)			208				(828	)			(3,519	)			(2,795	)
Fair value adjustments related to contingent consideration related to acquisitions(e)			2,872				689				(1,229	)			2,231				5,068				4,292				(674	)			(340	)			3,654				2,134
Acquisition and divestiture related expenses(f)			450				1,319				2,503				1,591				498				2,432				3,978				4,260				5,998				6,803
Reorganization expenses(g)			25,502				37,126				17,620				22,416				5,837				11,148				1,636				3,562				253				643
Litigation (recovery) expenses(h)			(993	)			284				855				4,314				4,350				—				6,157				—				(800	)			—
Costs associated with COVID-19, net of benefits received(i)			—				—				(2	)			(49	)			2,317				1,017				2,263				2,009				1,362				1,574
Costs associated with the Take 5 Matter, net of (recoveries)(j)			456				240				63				53				(1,576	)			80				377				278				723				1,087
EBITDA for economic interests in investments(k)			4,539				4,813				(69	)			(2,691	)			(2,457	)			(1,185	)			(5,342	)			(2,474	)			(1,020	)			(4,052	)
Previously reported Adjusted EBITDA from Continuing and Discontinued Operations		$	97,836			$	78,760			$	114,916			$	113,149			$	104,212			$	92,070			$	112,666			$	118,268			$	108,322			$	96,739

 

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EXHIBIT 99.1

ADVANTAGE SOLUTIONS INC.

NON-GAAP ADJUSTED EBITDA RECONCILIATIONS

AS RECAST

(Unaudited)

Financial information by segment, including reconciliations of Adjusted EBITDA by segment to Operating income (loss), the closest GAAP financial measure, is provided in the following tables:

Branded Services Segment

		Three Months Ended
(in thousands)		June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023				December 31, 2022				September 30, 2022				June 30, 2022				March 31, 2022
Branded Services
Revenues		$	322,340			$	329,054			$	431,282			$	451,173			$	447,265			$	428,697			$	480,963			$	444,317			$	428,044			$	410,752
Less: Pass-through costs(b)			(38,206	)			(46,629	)			(48,497	)			(46,227	)			(45,052	)			(39,252	)			(61,739	)			(48,383	)			(38,459	)			(29,893	)
Total revenues net of pass-through costs		$	284,134			$	282,425			$	382,785			$	404,946			$	402,213			$	389,445			$	419,224			$	395,934			$	389,585			$	380,859
Operating (loss) income		$	(107,280	)		$	(22,118	)		$	33,779			$	(599	)		$	8,920			$	3,286			$	(800,471	)		$	24,033			$	10,123			$	9,057
Depreciation and amortization			32,327				31,987				34,382				35,369				35,609				35,572				35,720				35,718				36,206				36,710
Impairment of goodwill and indefinite-lived assets			99,670				—				43,500				—				—				—				831,008				—				—				—
Gain on deconsolidation of subsidiaries			—				—				(58,891	)			—				—				—				—				—				—				—
Loss (gain) on divestitures			—				—				(18,193	)			—				—				—				81				—				—				2,782
Stock based compensation expense(c)			2,797				3,926				4,342				3,689				4,318				3,302				2,826				1,470				3,815				2,009
Equity-based compensation of Karman Topco L.P.(d)			24				498				522				275				(463	)			(1,021	)			327				(164	)			(1,558	)			(1,255	)
Fair value adjustments related to contingent consideration related to acquisitions(e)			900				778				665				1,518				4,632				4,321				(1,606	)			(985	)			7,111				2,052
Acquisition and divestiture related expenses(f)			30				74				293				159				258				1,067				(824	)			2,307				2,905				3,779
Reorganization expenses(g)			9,248				13,656				8,459				10,730				3,015				6,535				1,236				1,573				99				526
Litigation expenses(h)			50				191				187				1,994				—				—				—				—				—				—
Costs associated with COVID-19, net of benefits received(i)			—				—				3				6				(361	)			29				1,400				914				91				195
Costs associated with the Take 5 Matter, net of (recoveries)(j)			456				240				63				53				(1,576	)			80				377				278				723				1,087
EBITDA for economic interests in investments(k)			4,634				5,103				274				(2,484	)			(2,565	)			(1,370	)			(5,411	)			(2,726	)			(1,226	)			(4,300	)
Total Adjusted EBITDA		$	42,856			$	34,335			$	49,385			$	50,710			$	51,787			$	51,801			$	64,663			$	62,418			$	58,289			$	52,642

 

4

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EXHIBIT 99.1

ADVANTAGE SOLUTIONS INC.

NON-GAAP ADJUSTED EBITDA RECONCILIATIONS

AS RECAST

(Unaudited)

Experiential Services Segment

		Three Months Ended
(in thousands)		June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023				December 31, 2022				September 30, 2022				June 30, 2022				March 31, 2022
Experiential Services
Revenues		$	319,508			$	307,351			$	308,727			$	308,381			$	285,174			$	257,167			$	253,557			$	245,752			$	221,863			$	183,058
Less: Pass-through costs(b)			(84,689	)			(85,015	)			(81,506	)			(81,848	)			(75,204	)			(69,053	)			(63,076	)			(59,014	)			(54,222	)			(41,378	)
Total revenues net of pass-through costs		$	234,819			$	222,336			$	227,221			$	226,533			$	209,970			$	188,114			$	190,481			$	186,738			$	167,641			$	141,680
Operating income (loss)		$	6,453			$	(3,642	)		$	845			$	1,971			$	4,805			$	(4,326	)		$	(358,628	)		$	(1,390	)		$	(5,379	)		$	(6,503	)
Depreciation and amortization			11,015				9,920				9,298				9,221				9,002				9,063				10,465				9,485				9,466				8,491
Impairment of goodwill and indefinite-lived assets			—				—				—				—				—				—				354,452				—				—				—
Stock based compensation expense(c)			2,170				1,928				(1,560	)			(778	)			(646	)			(436	)			(456	)			(19	)			(424	)			(443	)
Equity-based compensation of Karman Topco L.P.(d)			(458	)			(44	)			129				(29	)			(358	)			(547	)			(45	)			(267	)			(792	)			(594	)
Fair value adjustments related to contingent consideration related to acquisitions(e)			—				—				—				—				7				—				—				—				—				—
Acquisition and divestiture related expenses(f)			(101	)			106				71				19				48				374				319				670				1,144				1,224
Reorganization expenses(g)			3,472				8,252				3,869				4,960				1,304				1,966				299				1,079				98				29
Litigation expenses (recovery)(h)			60				173				566				1,276				—				—				—				—				(700	)			—
Costs associated with COVID-19, net of benefits received(i)			—				—				(7	)			(56	)			2,040				912				755				962				1,174				1,077
Total Adjusted EBITDA		$	22,611			$	16,693			$	13,211			$	16,584			$	16,202			$	7,006			$	7,161			$	10,520			$	4,587			$	3,281

 

5

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EXHIBIT 99.1

ADVANTAGE SOLUTIONS INC.

NON-GAAP ADJUSTED EBITDA RECONCILIATIONS

AS RECAST

(Unaudited)

 

Retailer Services Segment

		Three Months Ended
(in thousands)		June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023				December 31, 2022				September 30, 2022				June 30, 2022				March 31, 2022
Retailer Services
Revenues		$	231,509			$	225,007			$	251,939			$	260,152			$	231,319			$	238,849			$	260,270			$	264,976			$	230,941			$	221,849
Less: Pass-through costs(b)			—				—				—				—				—				—				—				—				—				—
Total revenues net of pass-through costs		$	231,509			$	225,007			$	251,939			$	260,152			$	231,319			$	238,849			$	260,270			$	264,976			$	230,941			$	221,849
Operating income (loss)		$	9,568			$	(4,190	)		$	(13,962	)		$	5,281			$	1,526			$	5,063			$	(392,537	)		$	14,722			$	5,511			$	7,519
Depreciation and amortization			7,975				7,841				7,740				7,825				7,866				7,909				8,322				8,485				8,493				8,486
Impairment of goodwill and indefinite-lived assets			—				—				—				—				—				—				387,063				—				—				—
Loss on divestitures			—				—				18,193				—				—				—				—				—				—				—
Stock based compensation expense(c)			2,561				2,700				6,751				6,072				6,340				7,539				6,265				4,515				10,037				5,506
Equity-based compensation of Karman Topco L.P.(d)			(438	)			(62	)			103				(37	)			(397	)			(701	)			(74	)			(397	)			(1,169	)			(946	)
Fair value adjustments related to contingent consideration related to acquisitions(e)			—				—				—				—				9				—				—				—				—				—
Acquisition and divestiture related expenses(f)			(1,703	)			260				(222	)			154				89				896				3,102				983				1,765				1,576
Reorganization expenses(g)			7,571				13,144				5,501				5,682				1,475				2,637				101				823				56				51
Litigation (recovery) expenses(h)			(1,103	)			(80	)			102				1,044				4,350				—				6,157				—				(100	)			—
Costs associated with COVID-19, net of benefits received(i)			—				—				2				1				638				76				108				133				97				302
EBITDA for economic interests in investments(k)			—				—				21				1				(31	)			26				(74	)			25				30				(4	)
Total Adjusted EBITDA		$	24,431			$	19,613			$	24,229			$	26,023			$	21,865			$	23,445			$	18,433			$	29,289			$	24,720			$	22,490

 

6

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EXHIBIT 99.1

ADVANTAGE SOLUTIONS INC.

NON-GAAP ADJUSTED EBITDA RECONCILIATIONS

AS RECAST

(Unaudited)

Discontinued Operations

		Three Months Ended
(in thousands)		June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023				December 31, 2022				September 30, 2022				June 30, 2022				March 31, 2022
Discontinued Operations
Revenues		$	28,874			$	44,634			$	87,801			$	76,353			$	73,297			$	87,270			$	107,973			$	96,050			$	100,228			$	99,149
Less: Pass-through costs(b)			(1,496	)			(2,948	)			(4,129	)			(3,851	)			(2,961	)			(1,763	)			(2,225	)			(2,083	)			(2,270	)			(1,867	)
Total revenues net of pass-through costs		$	27,378			$	41,686			$	83,672			$	72,502			$	70,336			$	85,507			$	105,748			$	93,967			$	97,958			$	97,282
Operating income (loss)		$	9,820			$	61,287			$	25,530			$	9,330			$	7,020			$	(12,279	)		$	14,098			$	9,477			$	18,011			$	12,951
Depreciation and amortization			1,883				2,608				2,970				4,050				4,261				4,560				4,571				4,097				4,279				4,081
Loss on divestitures			(13,179	)			(57,016	)			(1,140	)			2,553				1,158				16,497				—				—				—				—
Stock based compensation expense(c)			102				(1,334	)			837				1,091				1,214				805				1,284				1,208				1,533				699
Fair value adjustments related to contingent consideration related to acquisitions(e)			1,972				(89	)			(1,894	)			713				420				(29	)			932				645				(3,457	)			82
Acquisition and divestiture related expenses(f)			2,224				879				2,361				1,259				103				95				1,381				300				184				224
Reorganization expenses(g)			5,211				2,074				(209	)			1,044				43				10				—				87				—				37
EBITDA for economic interests in investments(k)			(95	)			(290	)			(364	)			(208	)			139				159				143				227				176				252
Total Adjusted EBITDA from Discontinued Operations		$	7,938			$	8,119			$	28,091			$	19,832			$	14,358			$	9,818			$	22,409			$	16,041			$	20,726			$	18,326

__________________

(a)

Results for the three months ended June 30, 2024 have not been previously reported.

(b)

Pass-through costs are costs that are paid by our clients, including media, sample, retailer fees and other marketing and production costs.

(c)

Represents non-cash compensation expense related to performance stock units, restricted stock units, and stock options under the 2020 Advantage Solutions Incentive Award Plan and the Advantage Solutions 2020 Employee Stock Purchase Plan.

(d)

Represents expenses related to (i) equity-based compensation expense associated with grants of Common Series D Units of Topco made to one of the Advantage Sponsors, and (ii) equity-based compensation expense associated with the Common Series C Units of Topco.

(e)

Represents adjustments to the estimated fair value of our contingent consideration liabilities related to our acquisitions, for the applicable periods.

(f)

Represents fees and costs associated with activities related to our acquisitions, divestitures, and related reorganization activities, including professional fees, due diligence, and integration activities.

(g)

Represents fees and costs associated with various internal reorganization activities, including professional fees, lease exit costs, severance, and nonrecurring compensation costs.

(h)

Represents legal settlements, reserves, and expenses that are unusual or infrequent costs associated with our operating activities.

(i)

Represents (i) costs related to implementation of strategies for workplace safety in response to COVID-19, including employee-relief fund, additional sick pay for front-line associates, medical benefit payments for furloughed associates, and personal protective equipment; and (ii) benefits received from government grants for COVID-19 relief.

(j)

Represents cash receipts from an insurance policy for claims related to the Take 5 Matter and costs associated with investigation and remediation activities related to the Take 5 Matter, primarily, professional fees and other related costs.

(k)

Represents additions to reflect our proportional share of Adjusted EBITDA related to our equity method investments and reductions to remove the Adjusted EBITDA related to the minority ownership percentage of the entities that we fully consolidate in our financial statements.

7

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Cover	Aug. 07, 2024
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 07, 2024
Securities Act File Number	001-38990
Entity Registrant Name	Advantage Solutions Inc.
Entity Central Index Key	0001776661
Entity Tax Identification Number	83-4629508
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	8001 Forsyth Blvd
Entity Address, Address Line Two	Suite 1025
Entity Address, City or Town	Clayton
Entity Address, State or Province	MO
Entity Address, Postal Zip Code	63105
City Area Code	314
Local Phone Number	655-9333
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Class A common stock, $0.0001 par value per share
Title of 12(b) Security	Class A common stock, $0.0001 par value per share
Trading Symbol	ADV
Security Exchange Name	NASDAQ
Warrants exercisable for one share of Class A common stock at an exercise price of $11.50 per share
Title of 12(b) Security	Warrants exercisable for one share of Class A common stock at an exercise price of $11.50 per share
Trading Symbol	ADVWW
Security Exchange Name	NASDAQ

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