Related Parties

6 Months Ended

Mar. 31, 2022

Related Party Transactions [Abstract]

Related Parties

9. Related Parties

Periodically, the Company engages in transactions with related parties, which include entities that are owned in whole or in part by certain owners or employees of the Company.

The Company has historically leased certain manufacturing and office facilities in the U.S. from a related party. During the fourth quarter of fiscal year 2021, the related party sold the leased properties to a third party. Accordingly, the Company will no longer recognize these leases as related party transactions. Rental expense amounted to zero and $0.3 million for the three months ended March 31, 2022 and 2021, respectively, and zero and $0.5 million for the six months ended March 31, 2022 and 2021, respectively.

During fiscal year 2021, the Company leased office facilities in Australia from a related party. Rental expense amounted to $0.1 million and zero for the three months ended March 31, 2022 and 2021, respectively, and $0.3 million and zero for the six months ended March 31, 2022 and 2021, respectively. The Company had related party operating right-of-use assets of $1.5 million and $1.6 million at March 31, 2022 and September 30, 2021, respectively. Additionally, the Company had related party current operating lease liabilities of $0.4 million and $0.4 million and non-current operating lease liabilities of $1.1 million and $1.2 million at March 31, 2022 and September 30, 2021, respectively.

The Company has a royalty agreement with a related party for the use of the Company’s trademark. Royalty revenue from this agreement was $0.1 million and $(0.1) million for the three months ended March 31, 2022 and 2021, respectively, and $0.3 million and $(0.1) million for the six months ended March 31, 2022 and 2021, respectively. Fiscal year 2021 royalty revenues reflect the impact of a retroactive discount totaling $0.1 million, which was granted to the related party as a COVID-19 concession. The Company had a royalty receivable of $0.1 million from this related party at both March 31, 2022 and September 30, 2021.

During fiscal year 2019, the Company entered into a series of transactions with June. As a result of the acquisition described in Note 2, June has become a wholly-owned subsidiary of the Company and is consolidated in its financial statements. As such, the Company no longer records related party transactions with June. Royalty expense was zero for both the three months ended March 31, 2022 and 2021, and zero and $0.3 million for the six months ended March 31, 2022 and 2021, respectively.

In connection with the IPO, the Company entered into the Tax Receivable Agreement with the Pre-IPO LLC Members, which provides for the payment by Weber Inc. of 85% of certain cash tax benefits that Weber Inc. actually realizes, or in some cases is deemed to realize. The Tax Receivable Agreement liability was $9.2 million at both March 31, 2022 and September 30, 2021. The Tax Receivable Agreement is considered a related party transaction.

In connection with the Incremental Term Loan discussed in Note 5, the Company paid arrangement fees and structuring fees totaling $0.6 million to a related party. These fees were capitalized as part of the total deferred financing costs during the fiscal quarter ended March 31, 2022.

In March 2022, the Company reassigned the beneficiary of a life insurance policy to a related party. As a result, the Company recognized selling, general and administrative expense of $0.4 million for the three and six months ended March 31, 2022.

The Company historically had notes receivable due from members, which were fully repaid during the first quarter of fiscal year 2022. The balance of the notes receivable due from members, including interest, was zero and $11.3 million at March 31, 2022 and September 30, 2021, respectively. Related party interest income associated with the full recourse member notes was immaterial for the three and six months ended March 31, 2022 and 2021. See Note 15 for further information.