Provides Guidance for 2024

Traeger, Inc. ("Traeger" or the "Company") (NYSE: COOK), creator and category leader of the wood pellet grill, today announced its financial results for the fourth quarter and year ended December 31, 2023.

Fourth Quarter Highlights

• Total revenues increased 18.3% to $163.5 million
• Gross margin of 36.8%, up 230 basis points compared to prior year
• Net loss of $24.0 million; net loss of $0.19 per share
• Adjusted net loss of $9.5 million; adjusted net loss of $0.08 per share
• Adjusted EBITDA of $13.0 million, up 82% compared to the prior year

Full Year 2023 Highlights

• Total revenues decreased 7.6% to $605.9 million, exceeding prior guidance of $590 million to $600 million
• Gross margin of 36.9%, up 200 basis points compared to prior year
• Net loss of $84.4 million; net loss of $0.68 per share
• Adjusted net loss of $27.0 million; adjusted net loss of $0.22 per share
• Adjusted EBITDA of $61.1 million, up 47% compared to prior year
• Cash provided by operating activities of $64.0 million

"I am pleased with our fourth quarter results, which were ahead of our expectations and allowed us to exceed our prior guidance for Fiscal 2023," said Jeremy Andrus, CEO of Traeger. "Fourth quarter sales were up 18.3% versus prior year, driven by strong growth in our grills business as we lapped retailer destocking in the fourth quarter of last year as well as growth in our accessories business."

Mr. Andrus continued, "In 2023, we made significant progress in the face of a challenging industry environment. Our efforts to rightsize inventories and to drive Adjusted EBITDA through gross margin expansion and cost discipline have put Traeger in a materially improved financial position versus a year ago. Moreover, we continued to make progress on our long-term growth initiatives in 2023, including product innovation with the introduction of our new Ironwood and Ironwood XL grills, our entrance into the griddle category and the launch of MEATER 2 Plus."

"Looking to 2024, we will be focused on our strategic growth pillars and executing against our plan to drive household penetration. While we anticipate that consumer demand for grills will remain soft in 2024, we are guiding to growth in Adjusted EBITDA driven by our expectation for meaningful gross margin expansion. As we head into our peak selling season in the coming months, I am as confident as ever in the Traeger brand and believe that we remain well-positioned to deliver strong long-term value to our shareholders, consumers and retail partners," said Mr. Andrus.

Operating Results for the Fourth Quarter

Total revenues increased by 18.3% to $163.5 million, compared to $138.1 million in the fourth quarter last year.

• Grills revenues increased 23.9% to $59.9 million, compared to $48.3 million in the fourth quarter last year. The increase was driven by higher unit volumes, partially offset by a decrease in average selling price due to strategic pricing actions.
• Consumables revenues increased 0.5% to $24.6 million, compared to $24.4 million in the fourth quarter last year. The increase was driven by higher average selling prices of wood pellets as well as higher volumes of food consumables, partially offset by lower average selling prices of food consumables and lower volumes of wood pellets.
• Accessories revenues increased 20.9% to $79.0 million, compared to $65.4 million in the fourth quarter last year. This increase was primarily driven by higher sales of MEATER smart thermometers as well as growth of Traeger branded accessories.

North America revenues increased 12.8% in the fourth quarter compared to the prior year. Rest of World revenues increased 59.2% in the fourth quarter compared to the prior year.

Gross profit increased to $60.1 million, compared to $47.6 million in the fourth quarter last year. Gross margin was 36.8% in the fourth quarter, inclusive of an impact of 100 basis points related to the voluntary recall of the Flatrock Griddle in the quarter. This compared to 34.5% in the same period last year or 34.9% excluding restructuring costs.² The increase in gross margin in the fourth quarter of 2023 was driven primarily by favorability from freight and logistics costs.

Sales and marketing expenses were $32.8 million, compared to $28.3 million in the fourth quarter last year. The increase was driven primarily by higher variable costs.

General and administrative expenses were $25.9 million, compared to $24.2 million in the fourth quarter last year. The increase in general and administrative expense was driven primarily by higher professional service fees, partially offset by lower stock-based compensation expense.

Net loss was $24.0 million, or $0.19 per diluted share, as compared to a net loss of $28.9 million, or $0.24 per diluted share,¹ in the fourth quarter last year.

Adjusted net loss was $9.5 million, or $0.08 per diluted share as compared to adjusted net loss of $13.2 million, or $0.11 per diluted share in the fourth quarter last year.²

Adjusted EBITDA was $13.0 million compared to $7.1 million in the fourth quarter last year.²

Operating Results for the Full Year ended December 31, 2023

Total revenues decreased by 7.6% to $605.9 million, compared to $655.9 million last year.

• Grills revenues decreased 15.8% to $299.3 million, compared to $355.4 million last year. The decrease was driven primarily by lower unit volume from retail destocking in the first half of fiscal year 2023 as well as a decrease in average selling price due to strategic pricing actions.
• Consumables revenues decreased 12.5% to $114.9 million, compared to $131.3 million last year. The decrease was driven primarily by a reduction in unit volume of wood pellets and food consumables, as well as a reduction in average selling price of food consumables.
• Accessories revenues increased 13.3% to $191.6 million, compared to $169.1 million last year. This increase was primarily driven by higher sales of MEATER smart thermometers.

North America revenues decreased 10.4% compared to the prior year. Rest of World revenues increased 21.6% compared to the prior year.

Gross profit decreased to $223.6 million, compared to $228.8 million last year. Gross profit margin was 36.9%, inclusive of 30 basis points related to the voluntary recall of the Flatrock Griddle in the fourth quarter. This compares to 34.9% last year or 35.2% excluding restructuring costs.² The increase in gross margin was driven primarily by favorability from freight and logistics, partially offset by grill price changes.

Sales and marketing expenses were $108.7 million, compared to $130.7 million last year. The decrease was primarily due to a decrease in advertising costs, travel related expenses, commissions and other employee expenses, and professional fees.

General and administrative (“G&A”) expenses were $129.8 million, compared to $166.8 million last year. The decrease in G&A expenses was driven primarily by the decrease in stock-based compensation expense of $34.7 million.

Net loss was $84.4 million, or $0.68 per diluted share, as compared to net loss of $382.1 million, or $3.19 per diluted share,¹ in the same period last year.

Adjusted net loss was $27.0 million, or $0.22 per diluted share, as compared to adjusted net loss of $105.8 million, or $0.88 per diluted share in the same period last year.²

Adjusted EBITDA was $61.1 million compared to $41.5 million in the same period last year.²

Balance Sheet

Cash and cash equivalents at December 31, 2023 totaled $29.9 million, compared to $39.1 million at December 31, 2022.

Inventory at December 31, 2023 was $96.2 million, compared to $153.5 million at December 31, 2022. The decrease was driven primarily by strategic inventory management.

Guidance

The company's outlook reflects its expectation for continued softness in grill industry demand in 2024, as well as its expectation for significant improvement in gross margin, driven by lower transportation costs and the benefit of margin enhancement initiatives.

Guidance For Full Year Fiscal 2024

• Total revenue is expected to be between $580 million and $605 million
• Gross margin is expected to be between 39% and 40%
• Adjusted EBITDA is expected to be between $62 million and $71 million

Guidance For First Quarter 2024

• Total revenue is expected to be between $140 million and $145 million
• Adjusted EBITDA is expected to be between $21 million and $24 million

A reconciliation of Adjusted EBITDA guidance to Net Loss on a forward-looking basis cannot be provided without unreasonable efforts, as the Company is unable to provide reconciling information with respect to provision for income taxes, interest expense, depreciation and amortization, other (income) expense, goodwill impairment, stock-based compensation, non-routine legal expenses, change in fair value of contingent consideration, and other adjustment items all of which are adjustments to Adjusted EBITDA, respectively.

Conference Call Details

A conference call to discuss the Company's fourth quarter and full year 2023 results is scheduled for March 7, 2024, at 4:30 p.m. ET. To participate, please dial (833) 470-1428 or (929) 526-1599 for international callers, conference ID 156993. The conference call will also be webcast live at https://investors.traeger.com. A recording will be available shortly after the conclusion of the call. To access the replay, please dial (866) 813-9403, conference ID 913207. A replay of the webcast will also be available approximately two hours after the conclusion of the call on the Company's website at https://investors.traeger.com.

About Traeger

Traeger Grills, headquartered in Salt Lake City, is the creator and category leader of the wood pellet grill, an outdoor cooking system that ignites all-natural hardwoods to grill, smoke, bake, roast, braise, and barbecue. In 2023, Traeger entered the griddle category, further establishing its leadership position in the outdoor cooking space. Traeger grills are versatile and easy to use, empowering cooks of all skill sets to create delicious meals with flavor that cannot be replicated. Grills are at the core of our platform and are complemented by Traeger wood pellets, rubs, sauces, accessories and MEATER smart thermometers.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding our anticipated first quarter and full year fiscal 2024 results. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, our history of operating losses; our ability to manage or future growth effectively; our growth depending in part on our continued penetration and expansion into additional markets; our dependence on maintaining and strengthening our brand to generate and maintain ongoing demand for our products; our ability to cost-effectively attract new customers or retain our existing customers; our failure to maintain product quality and product performance at an acceptable cost; product liability and warranty claims and product recalls; the highly competitive market in which we operate; use of social media and community ambassadors affecting our reputation or subjecting us to fines or other penalties; issues in relation to environmental, social and governance matters; any decline in demand from certain retailers; risks associated with our significant international operations; our reliance on limited number of third-party manufacturers; and the other factors discussed under the caption "Risk Factors" in our periodic and current reports filed with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K for the year ended December 31, 2023. Any such forward-looking statements represent management's estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

TRAEGER, INC.

RECONCILIATIONS OF AND OTHER INFORMATION REGARDING NON-GAAP FINANCIAL MEASURES

(unaudited)

In addition to our results and measures of performance determined in accordance with U.S. GAAP, we believe that certain non-GAAP financial measures are useful in evaluating and comparing our financial and operational performance over multiple periods, identifying trends affecting our business, formulating business plans and making strategic decisions.

Each of Adjusted EBITDA, Adjusted Net Loss, Adjusted Net Loss per share, Adjusted EBITDA Margin, Adjusted Net Loss Margin, and Adjusted Gross Margin are key performance measures that our management uses to assess our financial performance and is also used for internal planning and forecasting purposes. We believe that these non-GAAP financial measures are useful to investors and other interested parties in analyzing our financial performance because it provides a comparable overview of our operations across historical periods. In addition, we believe that providing each of Adjusted EBITDA and Adjusted Net Loss, together with a reconciliation of Net Loss to each such measure, and providing Adjusted Net Loss per share, together with a reconciliation of Net Loss per share to such measure, and Adjusted EBITDA Margin, Adjusted Net Loss Margin, and Adjusted Gross Margin together with a reconciliation of Net Loss Margin and Gross Margin to such measures, helps investors make comparisons between our company and other companies that may have different capital structures, different tax rates, and/or different forms of employee compensation. For example, due to finite-lived intangible assets included on our balance sheet following our corporate reorganization in 2017, we have significant non-cash amortization expense attributable to the nature of our capital structure.

Each of Adjusted EBITDA, Adjusted Net Loss, Adjusted Net Loss per share, and Adjusted Gross Margin are used by our management team as an additional measure of our performance for purposes of business decision-making, including managing expenditures, and evaluating potential acquisitions. Period-to-period comparisons of Adjusted EBITDA, Adjusted Net Loss, Adjusted Net Loss per share, and Adjusted Gross Margin help our management identify additional trends in our financial results that may not be shown solely by period-to-period comparisons of Net Loss or Loss from Continuing Operations or Net Loss per share. In addition, we may use Adjusted EBITDA in the incentive compensation programs applicable to some of our employees. Each of Adjusted EBITDA, Adjusted Net Loss, Adjusted Net Loss per share, and Adjusted Gross Margin has inherent limitations because of the excluded items, and may not be directly comparable to similarly titled metrics used by other companies.

The following table presents a reconciliation of Gross Margin, the most directly comparable financial measure calculated in accordance with U.S. GAAP, to Adjusted Gross Margin on a consolidated basis.

The following table presents a reconciliation of Net Loss, Operating Loss, Net Loss Margin, Operating Loss Margin, and Net Loss per share, the most directly comparable financial measures calculated in accordance with U.S. GAAP, to Adjusted Net Loss, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Loss Margin and Adjusted Net Loss per share, respectively, on a consolidated basis.

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¹ There were no potentially dilutive securities outstanding as of December 31, 2023 and 2022.

² Reconciliations of GAAP to non-GAAP financial measures, as well as definitions for the non-GAAP financial measures included in this press release and the reasons for their use, are presented below.

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