SharkNinja(SN) - 2023 Q4 - Annual Report

Financial Performance - Net sales for the year ended December 31, 2023, increased by $536.3 million, or 14.4$4,253.7 million compared to $3,717.4 million in 2022[384] - Gross profit for 2023 was$1,907.9 million, representing a 35.3% increase from $1,410.2 million in 2022[390] - Net income for 2023 was$167.1 million, down from $232.4 million in 2022[380] - Adjusted Net Sales for 2023 were$4,176.2 million, compared to $3,619.9 million in 2022, reflecting a significant increase[415] - Adjusted Net Income for 2023 was$449.3 million, up 36% from $330.4 million in 2022[423] - Adjusted EBITDA for 2023 reached$719.7 million, a 38% increase compared to $519.6 million in 2022[428] - Adjusted Gross Profit for 2023 was$1,958.6 million, with an Adjusted Gross Margin of 46.9%[417] Operating Expenses - Total operating expenses rose to $1,534.3 million in 2023, a 40.9$1,088.8 million in 2022[394] - Research and development expenses increased by 15.6% to $249.4 million in 2023, accounting for 5.9$897.6 million in 2023, representing 21.1% of net sales[394] - General and administrative expenses increased by 54.2% to $387.3 million in 2023, making up 9.1$82.3 million in transaction-related costs in 2023, compared to $2.9 million in 2022[420] - Share-based compensation expenses increased significantly to$47.0 million in 2023 from $5.5 million in 2022[423] Interest and Taxation - Interest expense, net, increased to$(44.9) million in 2023 from $(27.0) million in 2022[380] - Provision for income taxes increased by$56.5 million, or 81.2%, for the year ended December 31, 2023, with an effective tax rate of 43.0%[408] - Interest expense, net increased by $17.9 million, or 66.2$25.2 million increase in interest expense on term loans[402] Sales Performance by Category - The Cooking and Beverage Appliances category saw a significant sales increase of 33.7%, reaching $1,441.6 million in 2023[387] Cash Flow and Financing - Cash and cash equivalents as of December 31, 2023, totaled$154.1 million, with an additional $490.2 million available under the 2023 Revolving Facility[431] - The company has$280.6 million in net cash provided by operating activities for the year ended December 31, 2023, an increase from $205.0 million in 2022[439] - Cash used in investing activities for 2023 was$118.1 million, primarily for property and equipment purchases of $122.7 million[445] - Cash used in financing activities for 2023 totaled$234.9 million, including repayment of $442.6 million on the 2020 Term Loans[449] - As of December 31, 2023, the company had$804.9 million in debt outstanding under the 2023 Credit Agreement[437] - The company plans to utilize existing cash and cash equivalents, along with cash generated from operations, to support its core business operations and strategic plans for market expansion[432] - The company may need to seek additional equity or debt financing to fund its activities if current resources are insufficient[432] Intangible Assets - Acquired intangible assets include developed software technology, customer relationships, and trade names, recorded at fair value on acquisition date[462] - Intangible assets are amortized over their estimated useful lives, except for trade names and trademarks which have an indefinite life[462] - The company evaluates intangible assets for impairment indicators based on significant adverse changes in business climate or market conditions[462] - Future cash flow estimates are critical for measuring the recoverability of intangible assets, with potential impairments if estimates change[462] - An asset is considered impaired if its carrying amount exceeds the undiscounted future net cash flows expected to be generated[462]