Solo Brands, Inc.
For the period ended Jun 30, 2025. Filed Aug 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 6, 2025
SBDS$4.050.0%Stored close · as of Jul 8, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0001870600-25-000059
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0001870600-25-000102
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 86 previous paragraphs and 100 current paragraphs.
46 unchanged; 30 reworded; 22 added; 10 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 14 previous and 25 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
Tariffs
Current report
Tax Legislation
Current report
On July 4, 2025, the U.S. government enacted The One Big Beautiful Bill Act of 2025 which includes, among other provisions, changes to the U.S. corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act. Certain provisions are effective beginning in 2026. The Company is evaluating the future impact of these tax law changes on our financial statements.
Current report
•retention payments for key personnel to support the sustainment of operations and focus on cost saving and operational improvements;
Current report
•termination of an underperforming licensing agreement in an effort to redeploy the allocated funds for operational purposes;
Current report
•renegotiated a settlement of a termination fee with a former advertising services vendor at a more favorable amount to the Company, reducing the cash outflow necessary;
Current report
•revision of pricing structure throughout our brands in order to mitigate, in part, the expected impacts of tariffs in subsequent periods; and
Current report
Additionally, a decrease was realized in other operating expenses, as a result of a reduction in management transition costs consisting of severance for key management personnel and executive search fees. This decrease was offset in part by the loss recognized from the disposition of the TerraFlame manufacturing operations, in the second quarter of 2025. See Note 17, Variable Interest Entities for additional information regarding the partial disposition.
Current report
The income tax expense decrease for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 and the income tax expense increase for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, was primarily driven by valuation allowances on deferred tax assets generated by the losses from the Solo Stove segment in the current year periods.
Current report
Going Concern Evaluation
Current report
As of the filing dates of our Annual Report on Form 10-K for the year ended December 31, 2024 and Quarterly Report on Form 10-Q for the three months ended March 31, 2025, we concluded that substantial doubt existed about our ability to continue as a going concern for one year following the issuance of each of the financial statements as a result of our net losses, accumulated deficit and our liquidity position, as well as our noncompliance with certain financial covenants under our credit agreement as of March 31, 2025.
Current report
On June 13, 2025, we entered into Amendment No. 4 to Credit Agreement and Limited Waiver and Amendment No. 1 to Security Agreement (the “2025 Refinancing Amendment”), which effected a reallocation and restructuring of all revolving loans and term loans then outstanding and the waiver of certain then existing events of default. The 2025 Refinancing Amendment resulted in decreased outstanding debt, extended maturities, lower short-term cash requirements as a result of our ability to make certain interest payments in kind, and deferral with respect to compliance with certain financial covenants for a certain period of time, as further described below. As a result, the 2025 Refinancing Amendment provided us with financial flexibility and a longer runway to continue our efforts to stabilize and transform the business. Following the 2025 Refinancing Amendment, our plans continue to be focused on improving our financial results and liquidity through a variety of cost saving and operational improvements throughout 2025 and beyond as further discussed in Note 2, Restructuring, Contract Termination and Impairment Charges.
Current report
The first full measurement period for certain of our financial covenants under the 2025 Refinancing Amendment will occur in the third quarter of 2026, beyond the twelve month look-forward period for this going concern evaluation. We are required to meet a Credit Agreement Adjusted EBITDA floor for the twelve months ended December 31, 2025, in addition to compliance with other non financial covenants. While the 2025 Refinancing Amendment included amended financial covenants, as described in further detail in Note 11, Debt, Net, we expect to be in compliance with such covenants and believe our cash, cash equivalents and cash from operating activities will be sufficient to fund our obligations for at least the next twelve months following the issuance of these financial statements. As a result, the conditions that raised substantial doubt about our ability to continue as a going concern have been alleviated as of August 6, 2025.
Current report
In the longer-term, if we fail to realize the expected benefits from our cost saving and operational improvement initiatives, if our liquidity condition deteriorates, or if we pursue potential growth opportunities that are not successful, our business, operating results and financial condition could be materially adversely impacted and could result in the violation of our financial and nonfinancial covenants, which may require us to seek additional funds from issuances of equity or debt, including from additional credit facilities or loans from other sources. There is no guarantee that such sources will be available when needed, or at all.
Current report
Revolving Credit Facilities and Term Loans
Current report
On May 12, 2021, we entered into the Credit Agreement with JPMorgan Chase Bank, N.A., the Lenders and L/C Issuers party thereto (each as defined therein) and the other parties thereto. The Credit Agreement was subsequently amended on June 2, 2021, September 1, 2021, May 22, 2023 and most recently by the 2025 Refinancing Amendment. Initially, the credit agreement contemplated a revolving credit facility (the “2021 Revolving Credit Facility”), with the amendment on September 1, 2021 including a provision to borrow up to $100.0 million under a term loan (the “2021 Term Loan”).
Current report
In connection with the entry into the 2025 Refinancing Amendment, we paid down (i) $136.5 million of loans under the 2021 Revolving Credit Facility, and (ii) $32.5 million of 2021 Term Loan outstanding as of June 13, 2025.
Current report
Under the 2025 Refinancing Amendment, the maturity date of the 2025 Revolving Credit Facility and the 2025 Term Loan is June 30, 2028. We are required to make mandatory amortization payments on the 2025 Term Loan as follows: (a) beginning with the fiscal quarter ending on June 30, 2026, the aggregate outstanding principal amount of the 2025 Term Loan as of June 13, 2025 multiplied by 0.25% and (b) beginning with the fiscal quarter ending on June 30, 2027, the aggregate outstanding principal amount of the 2025 Term Loan as of June 13, 2025 multiplied by 1.00%.
Current report
Each of the 2025 Revolving Credit Facility and the 2025 Term Loan bear interest at (depending on our election from time to time) either an adjusted term rate defined in the agreement based on SOFR or the base rate defined in the Amended Credit Agreement, each plus an applicable margin. The interest is payable in kind, and thus capitalized thereon and increasing the principal balance thereof, (i) on a quarterly basis through March 31, 2026, and (ii) for the period beginning on April 1, 2026 and ending on March 31, 2027 and for which availability under the 2025 Revolving Credit Facility is less than $20.0 million, upon our election, after which time, it is only payable in cash. The unfunded portion of the commitments under the 2025 Revolving Credit Facility will accrue an annual commitment fee.
Current report
The 2025 Refinancing Amendment also requires the Company to comply with additional reporting requirements, including, among others, (i) delivering on the date that is twenty (20) days after the end of the previous calendar month (or thirty-five (35) days for the borrowing base certificate and accounts and inventory report due for the months ended May 30, 2025, June 30, 2025, and July 31, 2025), (a) a borrowing base certificate calculating the borrowing base and availability under the 2025 Revolving Credit Facility, (b) a 13-week cash flow forecast for the Company and its subsidiaries, (c) a liquidity report, and (d) an accounts and inventory report; and (ii) delivering no later than thirty (30) days after the end of the previous calendar month (commencing for the month ending June 30, 2025), a key performance indicator report and certain additional reports on the Company’s operating plan and other measures, such as Credit Agreement Adjusted EBITDA. In addition, the 2025 Refinancing Amendment extends the delivery dates for quarterly financial statement deliverables to sixty (60) days after the end of the applicable fiscal quarter.
Current report
In addition, pursuant to the 2025 Refinancing Amendment, we are required to comply with the following financial covenants: (a) a maximum Total Leverage Ratio, which is tested on a quarterly basis, commencing with the fiscal quarter ending on September 30, 2026, (b) a minimum Fixed Charge Coverage Ratio, which is tested on a quarterly basis, commencing with the fiscal quarter ending on September 30, 2026, (c) a $10.0 million average minimum liquidity covenant for the first three calendar months of each fiscal year and a $20 million average minimum liquidity covenant for the last nine calendar months of each fiscal year, which in each case, is tested on a monthly basis, commencing with the fiscal month ending on July 31, 2026; and (d) a minimum Credit Agreement Adjusted EBITDA covenant of $25 million for the four fiscal quarter period ending on December 31, 2025.
Current report
During the three and six months ended June 30, 2025, the obligation to pay a former vendor a $5.4 million payment, plus applicable interest in periods beyond January 1, 2025, as a result of terminating an agreement for advertising services in a prior period, as previously disclosed within our 2024 Form 10-K, was settled for an aggregate amount of $4.0 million. The gain recognized from the reduced settlement was recorded to restructuring, contract termination and impairment charges on the consolidated statements of operations and comprehensive income (loss).
Removed paragraphs (10)
Previous report
As previously reported, effective April 22, 2025, our Class A common stock has been suspended from trading on the New York Stock Exchange (“NYSE”). Our Class A common stock is currently being quoted on the OTC Pink Market under the symbol “DTCB”. Pursuant to our right to a review of the staff of NYSE Regulation’s determination to delist our Class A common stock by a Committee of the Board of Directors of the NYSE, on May 6, 2025, we sent a notice to the NYSE appealing the determination of the staff of NYSE Regulation to commence proceedings to delist our Class A common stock from the NYSE. During the appeal period, our Class A common stock remains listed on the NYSE, though trading in the Class A common stock is suspended.
Previous report
Income tax expense increased for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily driven by valuation allowances recorded on the Solo Brands, Inc. deferred tax assets.
Previous report
Going Concern
Previous report
Substantial doubt about our ability to continue as a going concern exists. We incurred a net loss of $18.6 million during the quarter ended March 31, 2025 and had an accumulated deficit of $241.0 million. We had cash and cash equivalents of $206.4 million and total debt outstanding of $427.9 million as of March 31, 2025. As of March 31, 2025, we were not in compliance with the interest coverage ratio and total net leverage ratio financial covenants under the credit agreement governing the Term Loan and the Revolving Credit Facility and, without a waiver or forbearance from the lenders thereunder, it is likely that we will be required to report non-compliance with these covenants under the credit agreement with the delivery of the covenant compliance certificate for the first quarter of 2025. As a result, our outstanding debt balance of $427.9 million has been reclassified from a non-current liability to a current liability, as of March 31, 2025. Upon the determination of an event of default under the credit agreement, the lenders could elect to declare all amounts outstanding under the credit facility immediately due and payable and exercise other remedies as set forth in the credit agreement.
Previous report
We are continuing our evaluation of strategies to refinance our existing debt and are engaged in discussions and negotiations with the lenders under the credit agreement governing the Term Loan and the Revolving Credit Facility. The Company’s strategies include restructuring or refinancing our debt, obtaining a waiver or forbearance, issuing new debt or entering into other financing arrangements or filing to commence proceedings under Chapter 11 of the U.S. Bankruptcy Code. In addition, our plans continue to be focused on improving our results and liquidity through a variety of cost savings and operational improvements throughout 2025, which include a reduction of force and closures of select distribution centers that were completed in the first quarter of 2025, as discussed in Note 2, Restructuring, Contract Termination and Impairment Charges. However, there can be no assurance that we will be able to refinance or restructure our debt, issue new debt or enter into other financing arrangements, obtain a waiver or forbearance or other relief from the lenders, or that we will be able to execute any further cost savings or operational improvements. While we believe our plans to refinance or restructure our indebtedness, obtain relief from the lenders, or issue new debt or enter into other financing arrangements and execute cash savings and operational improvements can alleviate the conditions that raise substantial doubt, these plans are not entirely within our control and cannot be assessed as being probable of occurring.
Previous report
Without an agreement or a waiver or forbearance from the lenders under our credit agreement, we will not be able to meet our cash obligations for the next twelve months.
Previous report
Revolving Credit Facility and Term Loan
Previous report
In addition to the above, the amendment on September 1, 2021 included a provision to borrow up to $100.0 million under a term loan (the “Term Loan”). The proceeds from the Term Loan were used to fund the Chubbies acquisition. The Term Loan matures on May 12, 2026 and bears interest at a rate equal to the base rate as defined in the agreement plus an applicable margin, which as of March 31, 2025, was based on SOFR. We were required to make quarterly principal payments on the Term Loan beginning on December 31, 2021. All outstanding principal and interest due on the Term Loan are due at maturity. All required principal payments were made on time and with available cash through the three months ended March 31, 2025. Interest payments are due on a quarterly basis under the Term Loan, with the same due dates as noted for the Revolving Credit Facility above.
Previous report
The Revolving Credit Facility and Term Loan are subject to certain financial and non-financial covenants as described in our 2024 Form 10-K in Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations.”
Previous report
As of March 31, 2025, discussion of payment with the vendor for which the remaining commitment of $5.4 million resulting from the termination of an agreement for advertising services, previously disclosed within our 2024 Form 10-K, with payment due in the first quarter of 2025, remains ongoing. We have accrued a nominal amount of interest on the unpaid balance, as required by the agreement, and anticipate resolution and payment to occur within the first half of 2025.
Reworded paragraphs (30)
Previous wording
For the three months ended March 31, 2025, we experienced a decrease in our net sales from $85.3 million for the three months ended March 31, 2024 to $77.3 million. The decline in net sales was primarily driven by the Solo Stove segment, partially the result of a lack of significant new product launches. The DTC net sales channel was additionally impacted by a reduction in marketing spend within the Solo Stove segment in the first quarter of 2025, with certain offsetting benefits realized through a reduction to operating expenses, as well as an increase in DTC channel net sales within the Chubbies segment. Retail channel net sales improved over the prior year period primarily as a result of increased retail demand over the prior year period within the Chubbies segment, offset in part by the decline in retail channel net sales within Solo Stove segment also driven by the lack of new product launches noted above, resulting in a further decline in strategic retail partner replenishments activity in the current year quarter when compared to the prior year period.
Current wording
For the three and six months ended June 30, 2025, we experienced a decrease in our net sales from $131.6 million and $216.9 million for the three and six months ended June 30, 2024 to $92.3 million and $169.5 million, respectively. The decline in net sales was primarily driven by the Solo Stove segment, offset in part by an increase in DTC channel net sales within the Chubbies segment. Retail channel net sales were relatively flat when comparing the second quarter of 2025 to the same period in 2024, with slight growth recognized over the first half of 2025 when compared to the same period in 2024, primarily as a result of increased retail demand over the prior year period within the Chubbies segment.
Previous wording
We sell our products in the U.S. as well as various foreign countries, primarily Europe, Canada and Australia. We also source and procure inventory, primarily out of China and Vietnam, with some products sourced through Mexico. As such, we are exposed to and impacted by global macroeconomic factors. In the first and second quarters of 2025, tariffs on goods manufactured in these countries increased significantly. However, the Company did not have any significant purchases in the first quarter of 2025, and as a result, the increased tariffs did not impact inventory on the consolidated balance sheets or cost of goods sold within the consolidated statements of operations and comprehensive income (loss) in such period. We expect inventory and costs of goods sold could increase significantly in future periods as a result of these tariffs, to the extent they remain or become effective.
Current wording
We sell our products in the U.S. as well as various foreign countries, primarily Europe, Canada and Australia. We also have historically sourced and procured inventory primarily out of China and Vietnam, with some products sourced through Mexico. Tariffs on certain foreign origin goods, particularly from China, continue to put pressure on our input costs. As a result of higher tariffs and tariff uncertainty, in the second quarter of 2025, we diversified our supply base and began to place a higher volume of purchase orders from Vietnam and Cambodia, reducing our sourcing from China for Solo Stove and eliminating our sourcing from China almost entirely for Chubbies. Additionally, we reduced our purchase volumes in the first half of 2025, and as a result, the increased tariffs only nominally impacted inventory on the consolidated balance sheets and cost of goods sold within the consolidated statements of operations and comprehensive income (loss) in such period. We expect inventory and costs of goods sold could increase in future periods as a result of these and anticipated tariffs, to the extent they remain effective, as applicable.
Previous wording
Tariffs on certain foreign origin goods continue to put pressure on input costs, for which we expect to reduce through contracting with suppliers in lower tariff jurisdictions, while negotiating lower product costs with our current suppliers. Our product lines involve production with steel manufactured outside the U.S., the target of recent tariff actions, impacting virtually all of our Solo Stove brand products. Further, certain of our Oru and TerraFlame brands’ products are produced in, with these products and certain Chubbies brands’ products also being distributed from, Mexico and are subject to any applicable tariffs placed on goods imported from Mexico. These tariffs and retaliatory actions, if sustained, are expected to have a significant adverse effect on our results of operations and margins and on the sales of our products outside the U.S. Any strategies we implement to mitigate the impact of such tariffs or other trade actions may not be successful. In addition, there can be no assurances that we will be able to pass any increased costs from tariffs on to our customers, that demand or profitability will not be materially adversely impacted, or that we will be successful in implementing efforts to mitigate the effect of tariffs on our business. Sourcing materials from domestic suppliers and manufacturing vendors or transitioning production to the U.S. would be a costly and lengthy process with uncertain results. For additional information, see Part I, Item 1A. "Risk Factors" in our 2024 Form 10-K,“Tariffs or other restrictions placed on foreign imports or any related counter-measures are taken by other countries harm our business and results of operations” and“Our products are manufactured by third parties outside of the United States, and our business may be harmed by legal, regulatory, economic, societal, and political risks associated with those markets.”
Current wording
New or increased tariffs and retaliatory actions, if sustained, are expected to have a significant adverse effect on our results of operations and margins and on the sales of our products outside the U.S. The strategies we have implemented and continue to implement to mitigate the impact of such tariffs or other trade actions may not be successful. In addition, there can be no assurances that we will be able to pass any increased costs from tariffs on to our customers, that demand or profitability will not be materially adversely impacted, or that we will be successful in implementing efforts to mitigate the effect of tariffs on our business. Sourcing materials from domestic suppliers and manufacturing vendors or transitioning production to the U.S. would be a costly and lengthy process with uncertain results. For additional information, see Part I, Item 1A. "Risk Factors" in our 2024 Form 10-K,“Tariffs or other restrictions placed on foreign imports or any related counter-measures are taken by other countries harm our business and results of operations” and“Our products are manufactured by third parties outside of the United States, and our business may be harmed by legal, regulatory, economic, societal, and political risks associated with those markets.”
Previous wording
In the first quarter of 2025, management, along with our Board of Directors, engaged strategic consulting firms to assist with improving the financial results of our operations. This operational improvement is being conducted, primarily, to support the potential refinancing or restructuring of our outstanding debt and included the engagement of restructuring, legal and investment banking consultants to perform financial planning, forecasting and project management activities. Certain of these strategic consulting firms have assisted and are expected to continue to assist us in developing an operational plan for the near and long-term, identify cost saving initiatives to reduce operational expenses and aid in the development of enhanced internal reporting to deliver timely insight to management. Those activities which were determined to be specifically related to the potential refinancing or restructuring of our outstanding debt have been separately capitalized as debt issuance costs. See our policy as it relates to debt issuance costs in Note 1, Significant Accounting Policies and additional information on the debt issuance costs capitalized during the first quarter of 2025 in Note 9, Debt, Net.
Current wording
In the first half of 2025, management, along with our Board of Directors, engaged strategic consulting firms to assist with improving the financial results of our operations. This operational improvement involved the engagement of restructuring, legal and investment banking consultants to perform financial planning, forecasting and project management activities. Certain of these strategic consulting firms have assisted and are expected to continue to assist us in developing and improving our operational plan for the near and long-term, identifying cost saving initiatives to reduce operational expenses and aiding in the development of enhanced internal reporting to deliver timely insight to management.
Previous wording
The cost saving initiatives identified and executed upon in the first quarter of 2025 were designed to reduce operational expenditures over the long-term, and as a result, in the short-term, the expected benefits from these initiatives have been limited. The key cost saving initiatives and operational planning activities undertaken in the first quarter of 2025 were as follows:
Current wording
The cost saving initiatives identified and executed upon in the three and six months ended June 30, 2025 were designed to reduce operational expenditures over the long-term, and as a result, in the short-term, the realized benefits from these initiatives have been limited. The key cost saving initiatives and operational planning activities undertaken in the first half of 2025 were as follows:
Previous wording
•closure of two distribution centers to reduce fixed costs in the short term and in future periods, as well as unnecessary capacity; and
Current wording
•closure of two distribution centers to reduce fixed costs in the short term and in future periods, as well as unnecessary capacity;
Previous wording
•reduction in marketing spend within the Solo Stove segment to better align product pricing with our retail partners.
Current wording
•reduction in marketing spend and promotional activity within the Solo Stove segment to better align product pricing with our retail partners.
Previous wording
We anticipate that the strategic consulting firms’ activities will continue to occur through, and potentially beyond, any potential refinancing or restructuring date in 2025. Additionally, we are evaluating and identifying additional cost saving initiatives that we may execute in the near term, with certain upfront costs to be reflected within restructuring, contract termination and impairment charges. While these activities are intended to provide future benefit to the Company, most of these activities required cash outlays in the current period, with certain additional cash outlays expected to occur throughout 2025. In order to fund these cash outlays, the Company used cash from operations and borrowings under the Revolving Credit Facility (as defined below). The following table outlines the cash outlays and the period in which they occurred.
Current wording
While these activities are intended to provide future benefit to the Company, most of these activities required cash outlays in the current period, with certain additional cash outlays expected to occur throughout 2025. In order to fund these cash outlays, the Company used cash from operations and borrowings under the 2021 Revolving Credit Facility (as defined below) and the 2025 Revolving Credit Facility (as defined below). The following table outlines the cash outlays and the period in which they occurred.
Previous wording
Consolidated Results for the Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024
Current wording
Consolidated Results for the Three and Six Months Ended June 30, 2025 Compared to the Three and Six Months Ended June 30, 2024
Previous wording
The decrease in net sales for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily driven by a decline in DTC channel net sales within the Solo Stove segment as a result of the reduction in promotional discounting and marketing spend in the current quarter and lack of new product launches, offset in part by increases in DTC channel net sales within the Chubbies segment. Retail channel net sales improved over the prior year period primarily as a result of increased retail demand over the prior year period within the Chubbies segment, offset in part by the decline in retail channel net sales within Solo Stove segment driven by the lack of new product launches and decline in strategic retail partner replenishments activity in the current quarter when compared to the prior year period.
Current wording
The decrease in net sales for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 was primarily driven by a decline in DTC channel net sales within the Solo Stove segment as a result of the prioritization of price integrity this year over significant promotional activity a year ago. Website traffic declined and marketplace sales were down, both of these the result of reduced marketing spend in the first half of 2025. These declines in the Solo Stove segment DTC channel net sales were offset in part by an increase in DTC channel net sales within the Chubbies segment. Retail channel net sales were relatively flat when comparing the second quarter of 2025 to the same period in 2024, with slight growth recognized over the first half of 2025 when compared to the same period in 2024, primarily as a result of increased retail demand over the prior year period within the Chubbies segment, offset in part by a decline in strategic retail partner replenishments for the first half of 2025 within the Solo Stove Segment.
Previous wording
Cost of goods sold decreased for the three months ended March 31, 2025 compared to the prior year period, in connection with the decline in net sales. Gross profit for the three months ended March 31, 2025 compared to the prior year period declined 400 basis points, primarily due to the channel mix shifting to more retail this year compared to last year, which generates lower gross margin.
Current wording
Cost of goods sold decreased for the three and six months ended June 30, 2025 compared to the prior year period, in connection with the decline in net sales. Gross margin for the three and six months ended June 30, 2025 compared to the prior year period declined 150 basis points and 290 basis points, respectively, primarily due to the channel mix shifting to more retail this year compared to last year, which generates lower gross margin.
Previous wording
The decrease in operating expenses for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily driven by a decrease in SG&A, as a result of the decreases in advertising and marketing expenses and a decrease in distribution costs resulting from the decline in DTC net sales.
Current wording
The decrease in operating expenses for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 was primarily driven by a decrease in SG&A, as a result of a significant decrease in advertising and marketing expenses, coupled with a decrease in distribution costs resulting from the decline in DTC net sales.
Previous wording
This decrease was partially offset by increases in restructuring, contract termination and impairment charges, primarily as a result of expenses related to the execution of cost savings initiatives, such as severance resulting from a reduction in force and the costs incurred to exit two distribution centers and engagement of strategic consulting firms for operational performance improvements, as described in detail in Note 2, Restructuring, Contract Termination and Impairment Charges.
Current wording
This decrease in SG&A and other operating expenses was partially offset by increases in restructuring, contract termination and impairment charges, as the result of expenses related to the execution of the cost saving initiatives in the first half of 2025, such as retention payments to key personnel, severance resulting from a reduction in force, the costs incurred to exit two distribution centers, termination of an underperforming licensing agreement and engagement of strategic consulting firms for operational performance improvements, as described in detail in Note 2, Restructuring, Contract Termination and Impairment Charges.
Previous wording
Interest expense, net consists primarily of interest on our Revolving Credit Facility and Term Loan (as defined herein).
Current wording
Interest expense, net consists primarily of interest on our revolving credit facilities and term loans.
Previous wording
Interest expense, net increased for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 due to a higher average debt balance.
Current wording
Interest expense, net increased for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 due to a higher average debt balance. Interest rates under the 2025 Refinancing Agreement are higher than those previously incurred, which will result in the weighted average interest rates in future periods being in excess of the current and prior periods.
Previous wording
Solo Stove Segment Results for the Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024
Current wording
Solo Stove Segment Results for the Three and Six Months Ended June 30, 2025 Compared to the Three and Six Months Ended June 30, 2024
Previous wording
The decrease in net sales for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was driven by declines in both DTC and retail channel net sales, each of which was impacted by a lack of new product launches. DTC channel net sales were further impacted by a reduction in promotional discounting to better align to our retail partners and marketing spend in the current quarter, which, while resulting in a decline in net sales, resulted in an overall reduction to operating expenses. Retail channel net sales within the Solo Stove segment were additionally impacted by a decline in replenishment orders, as many of our strategic retail partners held sufficient inventory from the fourth quarter 2024 selling season, with the prior year benefiting from replenishment orders from these vendors due to sell through of held inventory balances in the fourth quarter 2023 selling season.
Current wording
The decrease in net sales for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 was driven by declines in both DTC and retail channel net sales, each of which was impacted by the prioritization of pricing integrity over significant promotional activity in the current year periods. DTC channel net sales were further impacted by declines in website traffic and marketplace sales, the result of a reduction in marketing spend for the first half of 2025 when compared to the prior year period. Retail channel net sales within the Solo Stove segment were additionally impacted by a decline in replenishment orders, with a modest increase in activity recognized in the second quarter of 2025, however, many of our strategic retail partners held sufficient inventory from the fourth quarter 2024 selling season, with the prior year benefiting from replenishment orders from these vendors due to sell through of held inventory balances in the fourth quarter 2023 selling season.
Previous wording
The decrease in cost of goods sold for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily in line with the decrease in net sales. The lessened decline in cost of goods sold when compared to the decline in net sales was driven by channel mix, with retail channel net sales, which typically result in higher cost of goods sold, comprising a larger percentage of net sales for the current year period when compared to the prior year period.
Current wording
The decrease in cost of goods sold for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 was primarily in line with the decrease in net sales. The lessened decline in cost of goods sold when compared to the decline in net sales was driven by channel mix, with retail channel net sales, which typically result in higher cost of goods sold, comprising a larger percentage of net sales for the current year period when compared to the prior year period.
Previous wording
Segment operating expenses decreased for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, with a decrease in brand level marketing expenses, as well as decreases in other segment operating expenses as a result of a decrease in seller fees and shipping expenses, each stemming from the decline in DTC channel net sales.
Current wording
Segment operating expenses decreased for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, with a decrease in brand level marketing expenses, as well as decreases in other segment operating expenses as a result of a decrease in seller fees and shipping expenses, each stemming from the decline in DTC channel net sales.
Previous wording
Chubbies Segment Results for the Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024
Current wording
Chubbies Segment Results for the Three and Six Months Ended June 30, 2025 Compared to the Three and Six Months Ended June 30, 2024
Previous wording
The increase in net sales for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was driven by increases within the retail net sales channel as a result of continued growth within our retail strategic partnerships, coupled with the ongoing ability to identify and meet consumer demands within the DTC net sales channel, with both website and owned retail store performance exceeding the prior period.
Current wording
The increase in net sales for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 was primarily driven by increases within the retail net sales channel as a result of continued growth within our retail strategic partnerships, coupled with the ongoing ability to identify and meet consumer demands within the DTC net sales channel, with both website and owned retail store performance exceeding the prior period.
Previous wording
The increase in cost of goods sold for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily the result of the increase in net sales. The greater increase in cost of goods sold when compared to the increase in net sales was driven by channel mix, as a result of the growth in retail channel net sales, which typically result in higher cost of goods sold.
Current wording
The increase in cost of goods sold for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 was primarily the result of the increase in net sales. The greater increase in cost of goods sold when compared to the increase in net sales was driven by channel mix, as a result of the growth in retail channel net sales, which typically result in higher cost of goods sold.
Previous wording
The increase in segment operating expenses for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily driven by increases in other segment operating expenses as a result of an increase in seller fees, shipping and fulfillment related expenses as a result of the increase in DTC channel net sales.
Current wording
Segment operating expense for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, was relatively flat, with reductions in marketing expense being partially offset by increases in seller fees, shipping costs and fulfillment within other segment operating expenses. The decrease in segment operating expenses for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 was primarily driven by increases in other segment operating expenses as a result of an increase in seller fees and shipping and fulfillment related expenses as a result of the increase in DTC channel net sales.
Previous wording
Historically, our cash requirements have principally been for working capital purposes and acquisitions. In the short-term, our cash requirements are for working capital and payment of restructuring and other fees. We expect these and other cash needs to continue as we seek to develop and grow our business. In the future, potential growth opportunities, such as continued expansion into international markets and possible brand and mission consistent acquisition opportunities, would significantly increase our expenses (including our capital expenditures) and cash requirements. We fund our working capital, which is primarily comprised of inventory, accounts payable, and accounts receivable, net, and other cash requirements from cash flows from operating activities, cash on hand, and borrowings under our Revolving Credit Facility. Our cash flows from operating activities and borrowings under the Revolving Credit Facility are our principal sources of liquidity. Cash flows from operating activities result primarily from the sales of our portfolio of products. Our future product sales and our cash flows are difficult to predict, and actual sales may not be in line with our forecasts.
Current wording
Historically, our cash requirements have principally been for working capital purposes and acquisitions. In the short-term, our cash requirements are for working capital and payment of restructuring and other fees. We expect these and other cash needs to continue as we seek to improve, develop and transform our business. We fund our working capital, which is primarily comprised of inventory, accounts payable, and accounts receivable, net, and other cash requirements from cash flows from operating activities, cash on hand, and borrowings under our 2025 Revolving Credit Facility. Our cash flows from operating activities and borrowings under the 2025 Revolving Credit Facility are our principal sources of liquidity. Cash flows from operating activities result primarily from the sales of our portfolio of products. Our future product sales and our cash flows are difficult to predict, and actual sales may not be in line with our forecasts.
Previous wording
On May 12, 2021, we entered into a credit agreement with JPMorgan Chase Bank, N.A., the Lenders and L/C Issuers party thereto (each as defined therein) and the other parties thereto (as subsequently amended on June 2, 2021, September 1, 2021 and May 22, 2023, the “Revolving Credit Facility”). As so amended, the Revolving Credit Facility allows us to borrow up to $350.0 million of revolving loans, including the ability to issue up to $20.0 million in letters of credit, with $3.7 million of letters of credit issued and outstanding as of March 31, 2025. While our issuance of letters of credit does not increase our borrowings outstanding under the Revolving Credit Facility, it does reduce the amounts available under the Revolving Credit Facility. The Revolving Credit Facility matures on May 12, 2026 and bears interest at a rate equal to the base rate as defined in the agreement plus an applicable margin, which as of March 31, 2025, was based on SOFR. Interest is due on the last business day of each March, June, September and December. Principal under the Revolving Credit Facility is not due until maturity.
Current wording
After giving effect to the loan reallocation and restructuring effected pursuant to the 2025 Refinancing Amendment, the credit facilities evidenced by the Amended Credit Agreement consist of the following: (i) revolving commitments under the Revolving Credit Facility in an aggregate amount equal to $90.0 million (the “2025 Revolving Credit Facility”); and (ii) refinancing term loans, including the 2021 Term Loan (the “2025 Term Loan”) in an aggregate principal amount equal to $240.0 million. The 2025 Revolving Credit Facility also includes the ability to issue up to $20.0 million in letters of credit, with $3.7 million of letters of credit issued and outstanding as of June 30, 2025. While our issuance of letters of credit does not increase our borrowings outstanding under the 2025 Revolving Credit Facility, it does reduce the amounts available under the 2025 Revolving Credit Facility.
Previous wording
The $56.7 million increase in cash used in operating activities period over period, was due to a $41.9 million increase in cash usage from changes in operating assets and liabilities (“working capital”), which was primarily driven by an increase in cash usage in the current quarter for accounts payable as of December 31, 2024, with the significant amount of payables related to inventory purchases and marketing expenses incurred in the fourth quarter of 2024. The increase in changes in working capital was coupled with an increase in cash usage of $14.8 million from changes in net income (loss) after non-cash adjustments, driven by a decline in our operations, primarily net sales, reflected through changes in net income (loss).
Current wording
The $61.4 million increase in cash used in operating activities period over period, was due to a $28.0 million increase in cash usage from changes in operating assets and liabilities (“working capital”), which was primarily driven by an increase in cash usage in the first and second quarters of 2025 for accounts payable as of December 31, 2024, mostly related to inventory purchases and marketing expenses incurred in the fourth quarter of 2024. The increase in changes in working capital was coupled with an increase in cash usage of $33.4 million from changes in net income (loss) after non-cash adjustments, driven by a decline in our operations, primarily net sales, reflected through changes in net income (loss).
Previous wording
The $0.8 million increase in cash used in investing activities in the current period when compared to the prior period was due to an increase in capital expenditures.
Current wording
The $1.2 million increase in cash used in investing activities in the current period when compared to the prior year period was primarily due to an increase in capital expenditures for software.
Previous wording
The $256.5 million increase in cash provided by financing activities in the current period when compared to the prior period was primarily driven by a $252.3 million increase in cash provided by net draw downs and payments on our debt.
Current wording
The $68.4 million increase in cash provided by financing activities in the current period when compared to the prior year period was primarily driven by a $67.0 million increase in cash provided by net debt activity, inclusive of borrowings, repayments and debt issuance costs in relation to the 2025 Refinancing Amendment, offset in part by a $2.5 million payment in connection with the disposition of the TerraFlame manufacturing operations.
Previous wording
For information regarding our contractual obligations, see above under “Going Concern,” Note 1, Significant Accounting Policies and Note 9, Debt, Net in this Quarterly Report and Note 14, Leases and Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” included in our 2024 Form 10-K.
Current wording
For information regarding our contractual obligations, see above under “Revolving Credit Facilities and Term Loans,” Note 1, Significant Accounting Policies, Note 11, Debt, Net and Note 17, Variable Interest Entities in this Quarterly Report and Note 14, Leases and Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” included in our 2024 Form 10-K.
Previous wording
See Note 2 - Significant Accounting Policies, to the audited consolidated financial statements included in our 2024 Form 10-K for more information about our significant accounting policies, including our critical accounting policies. The critical accounting estimates that reflect our more significant judgments and estimates used in the preparation of our consolidated financial statements are described in Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” included in our 2024 Form 10-K. 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 2024 Form 10-K. Within the context of these critical accounting estimates, we are not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported.
Current wording
See Note 2 - Significant Accounting Policies, to the audited consolidated financial statements included in our 2024 Form 10-K for more information about our significant accounting policies, including our critical accounting policies. The critical accounting estimates that reflect our more significant judgments and estimates used in the preparation of our consolidated financial statements are described in Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” included in our 2024 Form 10-K. During the six months ended June 30, 2025, there were no material changes to our critical accounting policies and estimates from those discussed in our 2024 Form 10-K. Within the context of these critical accounting estimates, we are not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Our product lines involve production with steel manufactured outside the U.S., the target of recent tariff actions, impacting virtually all of our Solo Stove brand products. In addition, certain of our Oru and TerraFlame brands are manufactured in Mexico, and both these products and certain Chubbies products are also being distributed from Mexico. As such, they are subject to any applicable tariffs placed on goods imported from Mexico.
Current report — wording carried from elsewhere
We anticipate that the strategic consulting firms’ activities will continue to occur beyond the 2025 Refinancing Amendment (as defined below). Additionally, we are evaluating and identifying additional cost saving initiatives that we may execute in the near term, with certain upfront costs to be reflected within restructuring, contract termination and impairment charges.