Traeger, Inc.

Previous wording

Our revenue is primarily generated through the sale of our wood pellet grills, consumables and accessories. We currently offer seven series of grills – Pro (with and without WiFIRE), Ironwood, Timberline, and Flatrock – as well as a selection of smaller, portable grills within our Town and Travel Series and a special Club Lineup through targeted channels. Our grills are available in a number of different sizes and can be upgraded through a variety of accessories. A growing number of our grills feature WiFIRE technology, which allows users to monitor and adjust their grills remotely using our Traeger app. Our consumables include our wood pellets, which are made from natural, virgin hardwood and are available in a variety of flavors, as well as rubs and sauces. Our accessories include MEATER smart thermometers, P.A.L. Pop-And-Lock accessory rails, grill covers, liners, tools, apparel and other ancillary items.

Current wording

Our revenue is primarily generated through the sale of our wood pellet grills, consumables and accessories. We currently offer eight series of grills – Woodridge, Ironwood, Timberline, Pro (with and without WiFIRE), and Flatrock – as well as a selection of smaller, portable grills within our Portable Series and a special Club Lineup through targeted channels. Our grills are available in a number of different sizes and can be upgraded through a variety of accessories. A growing number of our grills feature WiFIRE technology, which allows users to monitor and adjust their grills remotely using our Traeger app. Our consumables include our wood pellets, which are made from natural, virgin hardwood and are available in a variety of flavors, as well as rubs and sauces. Our accessories include MEATER smart thermometers, P.A.L. Pop-And-Lock accessory rails, grill covers, liners, tools, apparel and other ancillary items.

Previous wording

$435.4 million for the three and nine months ended September 30, 2024, respectively, up from $117.7 million and down from $442.4 million for the three and nine months ended September 30, 2023, respectively. We recorded a net loss of $19.8 million and $27.1 million for the three and nine months ended September 30, 2024, respectively, compared to a net loss of $19.3 million and $60.4 million for the three and nine months ended September 30, 2023, respectively.

Current wording

Our revenue decreased by 1.1% for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, and was $143.3 million for the three months ended March 31, 2025, down from $144.9 million for the three months ended March 31, 2024. We recorded a net loss of $0.8 million for the three months ended March 31, 2025, compared to a net loss of $4.7 million for the three months ended March 31, 2024.

Previous wording

There is significant uncertainty regarding how macroeconomic conditions, including sustained high levels of inflation and higher interest rates, will impact consumer demand for durable goods. While some of these conditions have negatively impacted consumer discretionary spending behavior, we continue to see demand for our products. We have, however, seen instances of consumer sensitivity to higher price points. Therefore, we have utilized promotional activity and strategic pricing action on select grills, which has primarily attributed to unit volume growth in excess of 80%, partially offset by high-double digit reduction in average selling price due to mix shift to lower priced grills, strategic pricing action on select grills, and higher mix of direct import sales for the nine months ended September 30, 2024 as compared to the prior year period. As a result, revenue from our grills increased by $7.3 million to $246.7 million for the nine months ended September 30, 2024 as compared to the prior year period.

Current wording

Continuing global economic uncertainty, terrorism and conflicts, political conditions, and fiscal challenges in the United States and abroad could result in adverse macroeconomic conditions, including inflation, slower growth, or recession. We believe there is significant uncertainty regarding how macroeconomic conditions, including as a result of tariffs, sustained high levels of inflation and higher interest rates, will impact consumer demand for durable goods. While some of these conditions have negatively impacted consumer discretionary spending behavior, we continue to see demand for our products. We have, however, seen instances of consumer sensitivity to higher price points. Therefore, we have utilized promotional activity and strategic pricing action on select grills, which has primarily attributed to unit volume growth in excess of 40%, partially offset by reduction in average selling price in excess of 20% for the three months ended March 31, 2025 as compared to the prior year period. As a result, revenue from our grills increased by $9.9 million to $86.7 million for the three months ended March 31, 2025 as compared to the prior year period.

Previous wording

In response to these macroeconomic conditions, we have taken actions to identify and execute on cost savings initiatives, while simultaneously seeking to maintain product quality and reliability across the supply chain. For example, we have partnered with certain retailers in a direct import program, executed long-term transportation contracts, and implemented operational efficiencies across our pellet mill operations. As a result, we have experienced an increase in gross margin to 42.8% for the nine months ended September 30, 2024 from 36.9% for the nine months ended September 30, 2023. We expect continued cost savings to improve operating results in the long-term, but given the uncertainty of the macroeconomic environment in the near-term, there can be no assurance regarding the outcome of our continuing efforts to help mitigate the effects of these conditions on our business. We will continue to monitor and, if necessary, take additional action to mitigate the effects of the macroeconomic environment on our business.

Current wording

In response to these macroeconomic conditions, we have taken actions to identify and execute on cost savings initiatives, while simultaneously seeking to maintain product quality and reliability across the supply chain. For example, we have partnered with certain retailers in direct import programs, executed long-term transportation contracts, and implemented operational efficiencies across our pellet mill operations. We expect continued cost savings to improve operating results in the long term, but given the uncertainty of the macroeconomic environment in the near term, including as a result of tariffs, there can be no assurance regarding the outcome of our continuing efforts to help mitigate the effects of these conditions on our business. We will continue to monitor and, if necessary, take additional action to mitigate the effects of the macroeconomic environment on our business.

Previous wording

Although we experience demand for our products throughout the year, there is seasonal fluctuations in our revenue. We have typically experienced moderately higher levels of sales of our grills in the first and second quarters of the year as our retailers purchase inventory in advance of warmer weather, when demand for outdoor cooking products is the highest across our key markets. Higher sales also coincide with social events and national holidays, which occur during the same warm weather timeframe. Additionally, we have typically experienced higher sales volume of our accessories during the fourth quarter of the year, due in part to seasonal holiday demand.

Current wording

Although we experience demand for our products throughout the year, we believe there can be certain seasonal fluctuations in our revenue. We have typically experienced moderately higher levels of sales of our grills in the first and second quarters of the year as our retailers purchase inventory in advance of warmer weather, when demand for outdoor cooking products is the highest across our key markets. Higher sales also coincide with social events and national holidays, which occur during the same warm weather timeframe. Additionally, we have typically experienced higher sales volume of our accessories during the fourth quarter of the year, due in part to seasonal holiday demand.

Previous wording

Gross profit reflects revenue less cost of revenue. Cost of revenue consists of product costs, including the costs of components, costs of products from our third-party manufacturers, direct and indirect manufacturing costs across all products, packaging, inbound freight and duties, warehousing and fulfillment, warranty costs, product quality testing and inspection costs, excess and obsolete inventory write-downs, cloud-hosting costs for our WiFIRE connected grills, depreciation of tooling and manufacturing equipment, amortization of internal use software and patented technology, and certain employee-related expenses.

Current wording

Gross profit reflects revenue less cost of revenue. Cost of revenue consists of product costs, including the costs of products from our third-party manufacturers, costs of components, direct and indirect manufacturing costs across all products, packaging, inbound freight and duties, warehousing and fulfillment, warranty costs, product quality testing and inspection costs, excess and obsolete inventory write-downs, cloud-hosting costs for our WiFIRE connected grills, depreciation of tooling and manufacturing equipment, amortization of internal use software and patented technology, and certain employee-related expenses.

Previous wording

We calculate gross margin as gross profit divided by revenue. Gross margin can be impacted by several factors, including, in particular, product mix and sales channel mix. For example, gross margin on sales through our DTC channel is generally higher than gross margin on sales through our retail channel. If our DTC sales grow faster than sales from our retail channel, and if we are able to realize greater economies of scale or product cost improvements through engineering and sourcing, we would expect a favorable impact to overall gross margin over time. Additionally, gross margin on sales of certain of our products is higher than for others. If revenue from sales of wood pellets increased as a percentage of total revenue, we would expect to see an increase in overall gross margin. These favorable anticipated gross margin impacts may not be realized, or may be offset by other unfavorable gross margin factors. Additionally, any new products that we develop, or our planned expansion into new geographies, may impact our future gross margin. External factors beyond our control, such as duties and tariffs and costs of doing business in certain geographies can also impact gross margin.

Current wording

We calculate gross margin as gross profit divided by revenue. For instance, gross margin on sales through our direct import program with certain retail partners is generally higher than that of our core retail channels. If our direct import program grows or its sales outpace those of our core retail channels, and if we are able to realize greater economies of scale and freight cost savings, we would expect a favorable impact to overall gross margin over time. Additionally, gross margin on sales of certain of our products is higher than for others. If revenue from sales of wood pellets increased as a percentage of total revenue, we would expect to see an increase in overall gross margin. These favorable anticipated gross margin impacts may not be realized, or may be offset by other unfavorable gross margin factors. Additionally, any new products that we develop, or external factors beyond our control, such as duties and tariffs and costs of doing business in certain geographies, may also impact gross margin. For example, the recently imposed tariffs on foreign goods, including a 10% tariff on product imports from almost all countries and individualized higher tariffs on other countries, 25% tariff on steel and aluminum imports, and the announcement of a retaliatory tariff on certain U.S. goods by other nations could impact our gross margin. For more information on risks to our business related to tariffs, please see Part I, Item 1A. “Risk Factors – United States trade policies that restrict imports or increase import tariffs may have a material adverse effect on our business” included in our Annual Report on Form 10-K.

Previous wording

In addition, general and administrative expense includes research and development expenses incurred to develop and improve our future products and processes, which primarily consist of employee and facilities-related expenses, including salaries, benefits and stock-based compensation expense, as well as fees for professional services, costs related to prototype tooling and materials, and software platform costs. Research and development expense was $3.3 million and $2.8 million for the three months ended September 30, 2024, and 2023, respectively, and $11.8 million and $8.0 million for the nine months ended September 30, 2024 and 2023, respectively.

Current wording

In addition, general and administrative expense includes research and development expenses incurred to develop and improve our future products and processes, which primarily consist of employee and facilities-related expenses, including salaries, benefits and stock-based compensation expense, as well as fees for professional services, costs related to prototype tooling and materials, and software platform costs. Research and development expense was $2.9 million and $3.7 million for the three months ended March 31, 2025 and 2024, respectively.

Previous wording

We continue to expect our general and administrative expenses, including our research and development expenses and external legal and accounting expenses, to normalize as we continue to manage our investments to support our growth and develop new and enhance existing products. We anticipate that general and administrative expense as a percentage of revenue will vary from period to period, but we expect to leverage these expenses over time as we grow our revenue.

Current wording

We continue to expect our general and administrative expenses, including our research and development expenses and external legal and accounting expenses, to vary as a percentage of revenue from period to period. However, as we continue to manage our investments to support our growth and develop new and enhance existing products, we expect to leverage these expenses over time as we grow our revenue.

Previous wording

Amortization of intangible assets primarily consists of amortization of identified finite-lived customer relationships, distributor relationships, non-compete arrangements and trademark assets that were allocated a considerable portion of the purchase price from the corporate reorganization and acquisition of our Company in 2017, as well as the July 2021 acquisition of Apption Labs Limited and its subsidiaries (collectively, "Apption Labs") pursuant to a share purchase agreement (the "Share Purchase Agreement"). These costs are amortized on a straight-line basis over 2.5 to 25 year useful lives and, as a result, amortization expense on these assets is expected to remain stable over the coming years. Future business acquisitions may result in incremental amortization of intangible assets acquired in any such transactions.

Current wording

Amortization of intangible assets primarily consists of amortization of identified finite-lived customer relationships, distributor relationships, non-compete arrangements and trademark assets that were allocated a considerable portion of the purchase price from the corporate reorganization and acquisition of our business in 2017, as well as the July 2021 acquisition of Apption Labs Limited and its subsidiaries (collectively, “Apption Labs”) pursuant to a share purchase agreement (the “Share Purchase Agreement”). These costs are amortized on a straight-line basis over 2.5 to 25 year useful lives and, as a result, amortization expense on these assets is expected to remain stable over the coming years. Future business acquisitions may result in incremental amortization of intangible assets acquired in any such transactions.

Previous wording

Total other expense consists of interest expense and other income (expense), net. Interest expense includes interest and other fees associated with our Credit Facilities, Receivables Financing Agreement (each as defined below) as well as the amortization of amounts recorded within accumulated other comprehensive income prior to the dedesignation of the interest rate swap derivative contracts as a cash flow hedge. Other income (expense), net consists of any realized and unrealized gains (losses) from our interest rate swap derivative contract subsequent to the dedesignation of the swap contract from a cash flow hedge, foreign currency realized and unrealized gains and losses resulting from exchange rate fluctuations on transactions denominated in a currency other than the U.S. Dollar and from the foreign currency contracts that we use to manage our exposure to foreign currency exchange rate risk related to our purchases and international operations.

Current wording

Total other expense consists of interest expense and other income, net. Interest expense includes interest and other fees associated with our Credit Facilities and Receivables Financing Agreement (each as defined below) as well as the amortization of amounts recorded within accumulated other comprehensive income prior to the dedesignation of the interest rate swap derivative contracts as a cash flow hedge. Other income, net also consists of any unrealized gains (losses) from our interest rate swap derivative contract subsequent to the dedesignation of the swap contract from a cash flow hedge, foreign currency realized and unrealized gains and losses resulting from exchange rate fluctuations on transactions denominated in a currency other than the U.S. Dollar and from the foreign currency contracts that we use to manage our exposure to foreign currency exchange rate risk related to our purchases and international operations.

Previous wording

Revenue decreased by $7.0 million, or 1.6%, to $435.4 million for the nine months ended September 30, 2024 compared to $442.4 million for the nine months ended September 30, 2023. The decrease was driven primarily by lower sales from our accessories and consumables, partially offset by higher grill sales.

Current wording

Revenue decreased by $1.6 million, or 1.1%, to $143.3 million for the three months ended March 31, 2025 compared to $144.9 million for the three months ended March 31, 2024. The decrease was primarily driven by lower sales from accessories and consumables, partially offset by higher grill sales.

Previous wording

Revenue from our grills increased by $18.4 million, or 32.5%, to $74.9 million for the three months ended September 30, 2024 compared to $56.6 million for the three months ended September 30, 2023. The increase was primarily driven by unit volume growth in excess of 80% partially offset by reduction in average selling price in excess of 20%. Higher unit volume was driven by effective promotional activity and strategic pricing action on select grills. The decrease in average selling price was primarily due to mix shift to lower priced grills, higher mix of direct import sales, and strategic pricing action on select grills.

Current wording

Revenue from our grills increased by $9.9 million, or 12.8%, to $86.7 million for the three months ended March 31, 2025 compared to $76.8 million for the three months ended March 31, 2024. The increase was primarily driven by unit volume growth in excess of 40%, partially offset by reduction in average selling price in excess of 20%. Higher unit volume was driven by the launch of our new grill offerings and seasonal sales of high volume grills. The decrease in average selling price was primarily due to mix shift of lower priced grills and higher mix of direct import sales.

Previous wording

Revenue from our consumables decreased by $2.9 million, or 11.2%, to $22.5 million for the three months ended September 30, 2024 compared to $25.4 million for the three months ended September 30, 2023. The decrease was primarily driven by high-single digit reduction in wood pellet unit volume and high-double digit reduction in food consumables unit volume. Lower wood pellet and food consumables unit volume was due to seasonal ordering shifts.

Current wording

Revenue from our consumables decreased by $2.0 million, or 6.1%, to $30.3 million for the three months ended March 31, 2025 compared to $32.3 million for the three months ended March 31, 2024. The decrease was driven by a high-single digit reduction in wood pellet sales and a mid-single digit reduction in food consumables sales. The reduction in wood pellet sales was driven by mid-double digit lower unit volume as a result of seasonal ordering shifts, partially offset by high-single digit average selling price increase driven by strategic alignment with wholesale partners. The mid-single digit reduction in sales of food consumables was primarily due to lower volume in sauces and lower average selling price of rubs with launch of lower priced offerings.

Previous wording

Revenue from our accessories decreased by $12.5 million, or 11.1%, to $100.1 million for the nine months ended September 30, 2024 compared to $112.6 million for the nine months ended September 30, 2023. The decrease was driven primarily by lower sales of MEATER smart thermometers and low-double digit unit volume reduction in Traeger branded accessories.

Current wording

Revenue from our accessories decreased by $9.5 million, or 26.6%, to $26.3 million for the three months ended March 31, 2025 compared to $35.8 million for the three months ended March 31, 2024. The decrease was driven primarily by lower sales of MEATER smart thermometers, partially offset by low-double digit increases in Traeger branded accessories.

Previous wording

Sales and marketing expense increased by $0.2 million, or 0.2%, to $76.1 million for the nine months ended September 30, 2024 compared to $75.9 million for the nine months ended September 30, 2023. As a percentage of revenue, sales and marketing expense increased to 17.5% for the nine months ended September 30, 2024 from 17.2% for the nine months ended September 30, 2023.

Current wording

Sales and marketing expense increased by $0.5 million, or 2.4%, to $22.2 million for the three months ended March 31, 2025 compared to $21.7 million for the three months ended March 31, 2024. As a percentage of revenue, sales and marketing expense increased to 15.5% for the three months ended March 31, 2025 from 15.0% for the three months ended March 31, 2024. The increase in sales and marketing expense was driven by increases in travel, entertainment and employee related expenses, partially offset by decreased demand creation costs.

Previous wording

General and administrative expense decreased by $17.1 million, or 16.5%, to $86.8 million for the nine months ended September 30, 2024 compared to $103.9 million for the nine months ended September 30, 2023. As a percentage of revenue, general and administrative expense decreased to 19.9% for the nine months ended September 30, 2024 from 23.5% for the nine months ended September 30, 2023. The decrease in general and administrative expense was driven by a decrease in stock-based compensation expense of $23.4 million primarily due to the cancellation of the unearned CEO PSUs and IPO PSUs as well as losses on the disposal of property, plant and equipment in the comparable prior year period, partially offset by increased employee and occupancy costs.

Current wording

General and administrative expense decreased by $7.1 million, or 22.2%, to $25.0 million for the three months ended March 31, 2025 compared to $32.1 million for the three months ended March 31, 2024. As a percentage of revenue, general and administrative expense decreased to 17.5% for the three months ended March 31, 2025 from 22.2% for the three months ended March 31, 2024. The decrease in general and administrative expense was driven by a decrease in stock-based compensation expense of $4.6 million primarily due to the earned and vested Performance Shares in the prior year period, as well as lower legal costs, partially offset by higher employee costs.

Previous wording

Total other expense increased by $8.9 million, or 58.0%, to $24.3 million for the nine months ended September 30, 2024 compared to $15.4 million for the nine months ended September 30, 2023. This increase was primarily due to unrealized losses from our interest rate swap as well as increased interest expense on our First Lien Term Loan Facility, partially offset by changes in realized and unrealized gains and losses from our foreign currency contracts.

Current wording

Total other expense increased by $1.4 million, or 31.0%, to $5.8 million for the three months ended March 31, 2025 compared to $4.4 million for the three months ended March 31, 2024. This increase was primarily due to a decrease in the net realized and unrealized gains from our interest rate swap, partially offset by net gains from our foreign currency contracts and favorable results due to changes in foreign currency rates.

Previous wording

Historically, our cash requirements have principally been for working capital purposes, capital expenditures, and debt service payments. We have funded our operations through cash flows from operating activities, cash on hand, and borrowings under our credit facilities and receivables financing agreement. In the event of failure of any of our financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all. Any inability to access or delay in accessing these funds could adversely affect our business and financial position.

Current wording

Historically, our cash requirements have principally been for working capital purposes, capital expenditures, and debt service payments. We have funded our operations through cash flows from operating activities, cash on hand, and borrowings under our credit facilities and receivables financing agreement. Market conditions can impact the viability of these institutions. In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all. Any inability to access or delay in accessing these funds could adversely affect our business and financial position.

Previous wording

As of September 30, 2024, we had cash and cash equivalents of $16.9 million, $125.0 million borrowing capacity under our Revolving Credit Facility (as defined below) and $34.9 million borrowing capacity under our Receivables Financing Agreement (as defined below). As of September 30, 2024, we had no outstanding loan amounts under the Revolving Credit Facility and had drawn down $12.0 million on the Receivables Financing Agreement. As of September 30, 2024, the total principal amount outstanding under our First Lien Term Loan Facility was $403.6 million. Based on our current business plan and revenue prospects, we believe that our existing cash and cash equivalents, availability under our Revolving Credit Facility and Receivables Financing Agreement, and our anticipated cash flows from operating activities will be sufficient to meet our working capital and operating resource expenditure requirements for at least the next twelve months from the date of this Quarterly Report on Form 10-Q. However, our future working capital requirements will depend on many factors, including our rate of revenue growth and profitability, the timing and size of future acquisitions, and the timing of introductions of new products and investments in our supply chain and implementation of technologies.

Current wording

As of March 31, 2025, we had cash and cash equivalents of $12.0 million, $125.0 million borrowing capacity under our Revolving Credit Facility (as defined below) and $30.5 million borrowing capacity under our Receivables Financing Agreement (as defined below). As of March 31, 2025, we had not drawn down on the Revolving Credit Facility and had drawn down $25.0 million on the Receivables Financing Agreement. As of March 31, 2025, the total principal amount outstanding under our First Lien Term Loan Facility (as defined below) was $403.5 million. Based on our current business plan and revenue prospects, we continue to believe that our existing cash and cash equivalents, availability under our Revolving Credit Facility and Receivables Financing Agreement, and our anticipated cash flows from operating activities will be sufficient to meet our working capital and operating resource expenditure requirements for at least the next twelve months from the date of this Quarterly Report on Form 10-Q. However, our future working capital requirements will depend on many factors, including our rate of revenue growth and profitability, the timing and size of future acquisitions, and the timing of introductions of new products and investments in our supply chain and implementation of technologies.

Previous wording

We may from time to time seek to raise additional equity or debt financing to support our growth or in connection with the acquisition of complementary businesses. Any equity financing we may undertake could be dilutive to our existing stockholders, and any additional debt financing we may undertake could require debt service and financial and operational requirements that could adversely affect our business. There is no assurance we would be able to obtain future financing on acceptable terms or at all. See Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K and Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q.

Current wording

We may from time to time seek to raise additional equity or debt financing to support our growth or in connection with the acquisition of complementary businesses. Any equity financing we may undertake could be dilutive to our existing stockholders, and any additional debt financing we may undertake could require debt service and financial and operational requirements that could adversely affect our business. There is no assurance we would be able to obtain future financing on acceptable terms or at all. See Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K.

Previous wording

Cash flows related to operating activities are dependent on net loss, non-cash adjustments to net loss, and changes in working capital. The decrease in cash provided by operating activities during the nine months ended September 30, 2024 compared to cash provided by operating activities during the nine months ended September 30, 2023 is primarily due to an increase in net cash used for working capital, partially offset by a decrease in net loss, adjusted for non-cash items, as compared to the prior year period. The increase in cash used for working capital was primarily due to a decrease in the change in accounts receivable in the current period, primarily driven by the collections of large trade receivable balances in the prior year period that were outstanding at the beginning of the prior year period, partially offset by a decrease in the change in inventory balances in the current period as a result of strategic inventory management in the prior year period to reduce the high inventory levels at the beginning of the prior year period.

Current wording

Cash flows related to operating activities are dependent on net loss, non-cash adjustments to net loss, and changes in working capital. The increase in cash used in operating activities during the three months ended March 31, 2025 compared to cash used in operating activities during the three months ended March 31, 2024 is primarily due to an increase in net cash used for working capital, partially offset by a decrease in net loss, adjusted for non-cash items, as compared to the prior year period. The increase in cash used in working capital was primarily due to an increase in the change in our inventory balances in the current period as a result of strategic inventory management as our retailers purchase inventory in advance of warmer weather, when demand for outdoor cooking products is generally the highest across our key markets. This is partially offset by a decrease in the change of account receivable in the current period, primarily driven by a reduction in outstanding accounts receivables from MEATER smart thermometer sales and the collection of large trade receivable balances in the prior year period.

Previous wording

The decrease in cash used in investing activities during the nine months ended September 30, 2024 was primarily related the prior year construction costs for our new corporate headquarters, partially offset by proceeds received from the prior year sale of property, plant, and equipment.

Current wording

The decrease in cash used in investing activities during the three months ended March 31, 2025 was primarily related to the decreased purchasing of tooling equipment as compared to the prior year period.

Previous wording

On June 29, 2021, we refinanced our existing credit facilities and entered into a new first lien credit agreement, as borrower, with Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and other lenders party thereto as joint lead arrangers and joint bookrunners (the "First Lien Credit Agreement"). The First Lien Credit Agreement provides for a senior secured term loan facility (the "First Lien Term Loan Facility") and a revolving credit facility (the "Revolving Credit Facility" and, together with the First Lien Term Loan Facility, the "Credit Facilities"). We entered into an agency transfer agreement on April 30, 2024, pursuant to which Morgan Stanley Senior Funding, Inc. succeeded Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent for the Credit Facilities. Our obligations under the First Lien Credit Agreement are substantively unchanged.

Current wording

On June 29, 2021, we refinanced our existing credit facilities and entered into a new first lien credit agreement, as borrower, with Credit Suisse AG, Cayman Islands Branch, as administrative agent (in such capacity, the “Administrative Agent”) and collateral agent, and other lenders party thereto as joint lead arrangers and joint bookrunners (the “First Lien Credit Agreement”). The First Lien Credit Agreement provides for a senior secured term loan facility (the "First Lien Term Loan Facility") and a revolving credit facility (the “Revolving Credit Facility” and, together with the First Lien Term Loan Facility, the “Credit Facilities”). We entered into an agency transfer agreement on April 30, 2024, pursuant to which Morgan Stanley Senior Funding, Inc. succeeded Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent for the Credit Facilities. Our obligations under the First Lien Credit Agreement are substantively unchanged.

Previous wording

The First Lien Term Loan Facility accrues interest at a rate per annum that considers both fixed and floating components. The fixed component ranges from 3.00% to 3.25% per annum based on our Public Debt Rating (as defined in the First Lien Credit Agreement). The floating component is based on the Term SOFR (as defined in the First Lien Credit Agreement) for the relevant interest period. The First Lien Term Loan Facility requires periodic principal payments from December 2021 through June 2028, with any remaining unpaid principal and any accrued and unpaid interest due on the maturity date of June 29, 2028. As of September 30, 2024, the total principal amount outstanding on the First Lien Term Loan Facility was $403.6 million.

Current wording

The First Lien Term Loan Facility accrues interest at a rate per annum that considers both fixed and floating components. The fixed component ranges from 3.00% to 3.25% per annum based on our Public Debt Rating (as defined in the First Lien Credit Agreement). The floating component is based on the Term SOFR (as defined in the First Lien Credit Agreement) for the relevant interest period. The First Lien Term Loan Facility requires periodic principal payments from December 2021 through June 2028, with any remaining unpaid principal and any accrued and unpaid interest due on the maturity date of June 29, 2028. As of March 31, 2025, the total principal amount outstanding on the First Lien Term Loan Facility was $403.5 million.

Previous wording

Loans under the Revolving Credit Facility accrue interest at a rate per annum that considers both fixed and floating components. The fixed component ranges from 2.75% to 3.25% per annum based on our most recently determined First Lien Net Leverage Ratio (as defined in the First Lien Credit Agreement). The floating component is based on the Term SOFR for the relevant interest period. The Revolving Credit Facility also has a variable commitment fee, which is based on our most recently determined First Lien Net Leverage Ratio and ranges from 0.25% to 0.50% per annum on undrawn amounts. Letters of credit may be issued under the Revolving Credit Facility in an amount not to exceed $15.0 million which, when issued, lower the overall borrowing capacity of the facility. The Revolving Credit Facility expires on June 29, 2026 and no principal payments are due before such date. As of September 30, 2024, we had no outstanding loan amounts under the Revolving Credit Facility.

Current wording

Loans under the Revolving Credit Facility accrue interest at a rate per annum that considers both fixed and floating components. The fixed component ranges from 2.75% to 3.25% per annum based on our most recently determined First Lien Net Leverage Ratio (as defined in the First Lien Credit Agreement). The floating component is based on the Term SOFR for the relevant interest period. The Revolving Credit Facility also has a variable commitment fee, which is based on our most recently determined First Lien Net Leverage Ratio and ranges from 0.25% to 0.50% per annum on undrawn amounts. Letters of credit may be issued under the Revolving Credit Facility in an amount not to exceed $11.4 million which, when issued, lower the overall borrowing capacity of the facility. The Revolving Credit Facility expires on June 29, 2026 and no principal payments are due before such date. As of March 31, 2025 we had no outstanding loan amounts under the Revolving Credit Facility.

Previous wording

Except as noted below, the Credit Facilities are collateralized by substantially all of the assets of TGP Holdings III LLC, TGPX Holdings II LLC, Traeger Pellet Grills Holdings LLC and certain subsidiaries of Traeger Pellet Grills Holdings LLC, including intellectual property, mortgages and the equity interest of each of these respective entities. The assets of Traeger SPE LLC, substantively consisting of our accounts receivable, collateralize the receivables financing agreement discussed below and do not collateralize the Credit Facilities. There are no guarantees from parent entities above Traeger, Inc.

Current wording

Except as noted below, the Credit Facilities are collateralized by substantially all of the assets of TGP Holdings III LLC, TGPX Holdings II LLC, Traeger Pellet Grills Holdings LLC and certain subsidiaries of Traeger Pellet Grills Holdings LLC, including intellectual property, mortgages and the equity interest of each of these respective entities. The assets of Traeger SPE LLC (the “SPE”), substantively consisting of our accounts receivable, collateralize the receivables financing agreement discussed below and do not collateralize the Credit Facilities. There are no guarantees from any entities above TGPX Holdings II LLC, including Traeger, Inc.

Previous wording

The First Lien Credit Agreement contains certain affirmative and negative covenants that limit our ability to, among other things, incur additional indebtedness or liens (with certain exceptions), make certain investments, engage in fundamental changes or transactions including changes of control, transfer or dispose of certain assets, make restricted payments (including dividends), engage in new lines of business, make certain prepayments and engage in certain affiliate transactions. In addition, we are subject to a financial covenant whereby we are required to maintain a First Lien Net Leverage Ratio (as defined in the First Lien Credit Agreement) not to exceed 6.20 to 1.00. As of September 30, 2024, we were in compliance with the covenants under the Credit Facilities.

Current wording

The First Lien Credit Agreement contains certain affirmative and negative covenants that limit our ability to, among other things, incur additional indebtedness or liens (with certain exceptions), make certain investments, engage in fundamental changes or transactions including changes of control, transfer or dispose of certain assets, make restricted payments (including dividends), engage in new lines of business, make certain prepayments and engage in certain affiliate transactions. In addition, when we exceed the Covenant Trigger Amount (as defined in the First Lien Credit Agreement), we are subject to a financial covenant whereby we are required to maintain a Maximum First Lien Net Leverage Ratio (as defined in the First Lien Credit Agreement) not to exceed 6.20 to 1.00. As of March 31, 2025, we were in compliance with the covenants under the Credit Facilities.

Previous wording

On November 2, 2020, we entered into a receivables financing agreement (as amended, the “Receivables Financing Agreement”). Through the Receivables Financing Agreement, we participate in a trade receivables securitization program, administered on our behalf by MUFG Bank Ltd. ("MUFG"), using outstanding accounts receivables balances as collateral, which have been contributed by us to our wholly owned subsidiary, Traeger SPE LLC (the "SPE"). While we provide operational services to the SPE, the receivables are owned by the SPE once contributed to it by us. We are the primary beneficiary and hold all equity interests of the SPE, thus we consolidate the SPE without any significant judgments.

Current wording

On November 2, 2020, we entered into a receivables financing agreement (as amended, the “Receivables Financing Agreement”). Through the Receivables Financing Agreement, we participate in a trade receivables securitization program, administered on our behalf by MUFG Bank Ltd., using outstanding accounts receivables balances as collateral, which have been contributed by us to our wholly owned subsidiary, Traeger SPE LLC. While we provide operational services to the SPE, the receivables are owned by the SPE once contributed to it by us. We are the primary beneficiary and hold all equity interests of the SPE, thus we consolidate the SPE without any significant judgments.

Previous wording

On November 8, 2023, we entered into Amendment No. 9 to the Receivables Financing Agreement in order to extend the expiration of the facility by one year to June 27, 2025. As part of the amendment, the maximum borrowing capacity was decreased from $100.0 million to $75.0 million and allows for seasonal adjustments, at our discretion (with consent of the lenders under the Receivables Financing Agreement), to change the capacity anywhere between $30.0 million and $75.0. million. We are required to pay fixed interest on outstanding cash advances of 2.5%, a floating interest based on the CP Rate (as defined in the Receivables Financing Agreement), and an unused capacity charge that ranges from 0.25% to 0.5%. Amendment No. 9 also implemented a new liquidity threshold at $42.5 million of liquidity. If our liquidity falls below this threshold, it may result in an increase in the required level of reserves, which would result in a reduction of our borrowing base under the Receivables Financing Agreement during such a liquidity shortfall.

Current wording

The maximum borrowing capacity under the Receivables Financing Agreement is between $30.0 million and $75.0 million. The Receivables Financing Agreement allows for seasonal adjustments to the maximum borrowing capacity and further adjustments can be made up to two times annually at our discretion (with consent of the lenders under the Receivables Financing Agreement). We are required to pay fixed interest on outstanding cash advances of 2.5%, a floating interest based on the CP Rate or Adjusted Term SOFR (each as defined in the Receivables Financing Agreement), and an unused capacity charge that ranges from 0.25% to 0.5%. The Receivables Financing Agreement also includes a liquidity threshold of $42.5 million and if our liquidity falls below this threshold, it may result in an increase in the required level of reserves, which would result in a reduction of the borrowing base under the Receivables Financing Agreement during such a liquidity shortfall.

Previous wording

On August 6, 2024, we entered into Amendment No. 10 to the Receivables Financing Agreement in order to extend the expiration of the facility to August 6, 2027. As part of the amendment, we are required to pay an upfront fee for the facility, along with a fixed interest rate on outstanding cash advances of approximately 2.6% and a floating interest rate based on the CP Rate or Adjusted Term SOFR (each as defined in the Receivables Financing Agreement). We were in compliance with the covenants under the Receivables Financing Agreement as of September 30, 2024.

Current wording

On August 6, 2024, we entered into Amendment No. 10 to the Receivables Financing Agreement in order to extend the expiration of the facility to August 6, 2027. As part of the amendment, we were required to pay an upfront fee for the facility, along with a fixed interest rate on outstanding cash advances of approximately 2.6% and a floating interest rate based on the CP Rate or Adjusted Term SOFR (each as defined in the Receivables Financing Agreement). We were in compliance with the covenants under the Receivables Financing Agreement as of March 31, 2025.

Previous wording

As of September 30, 2024, we had drawn down $12.0 million under this facility for general corporate and working capital purposes.

Current wording

As of March 31, 2025, we had drawn down $25.0 million under this facility for general corporate and working capital purposes.

Previous wording

Our critical accounting policies and estimates are described under the heading "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K, the notes to the consolidated financial statements included therein and Note 2 –Summary of Significant Accounting Policies to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q. During the nine months ended September 30, 2024, except as indicated below, there were no material changes to our critical accounting policies and estimates from those discussed in our Annual Report on Form 10-K.

Current wording

Our critical accounting policies and estimates are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K, the notes to the consolidated financial statements included therein and Note 2 –Summary of Significant Accounting Policies to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q. During the three months ended March 31, 2025, there were no material changes to our critical accounting policies and estimates from those discussed in our Annual Report on Form 10-K.

Previous wording

For information regarding recent accounting pronouncements, see Note 2 –Summary of Significant Accounting Policies to the unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.

Current wording

For information regarding recent accounting pronouncements, see Note 2 –Summary of Significant Accounting Policies to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.