TRAEGER, INC. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-Q)

The following discussion and analysis of financial condition and results of
operations should be read together with our consolidated financial statements
and the related notes and other financial information included elsewhere in this
Quarterly Report on Form 10-Q, as well as our audited consolidated financial
statements and the related notes included in our   Annual Report on Form 10-K
for the year ended December 31, 2021 (our "Annual Report on Form 10-K"), filed
with the Securities and Exchange Commission (the "SEC"), on March 29, 2022. Some
of the information contained in this discussion and analysis or set forth
elsewhere in this Quarterly Report on Form 10-Q contains forward-looking
statements that involve risks and uncertainties. As a result of many important
factors, such as those set forth in Part I, Item 1A. "Risk Factors" of our

Annual report on Fo rm 10-K , our actual results may differ materially from those anticipated in these forward-looking statements. For ease of presentation, some figures have been rounded in the text below.

Overview

Traeger 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. Our grills are versatile and easy to use, empowering cooks
of all skill sets to create delicious meals with a wood-fired flavor that cannot
be replicated with gas, charcoal, or electric grills. Grills are at the core of
our platform and are complemented by Traeger wood pellets, rubs, sauces, premium
frozen meal kits and accessories.

Our marketing strategy has been instrumental in building our brand and driving
customer advocacy and revenue. We have disrupted the outdoor cooking market and
created a passionate community, the Traegerhood, which includes foodies,
pitmasters, backyard heroes, moms and dads, professional athletes, outdoorsmen
and outdoorswomen, and world-class chefs. This community, together with our
various marketing initiatives, has helped to promote our brand and products to
the wider consumer population and supported our efforts to redefine outdoor
cooking as an experience accessible to everyone. We have an active online and
social media presence and a content-rich website that drives significant
customer engagement and brings our Traegerhood together. We also directly engage
with our current and target customers by sponsoring and participating in a
variety of events, including live shows, outdoor festivals, rodeos, music and
film festivals, barbecue competitions, fishing tournaments, and retailer events.
We believe the style and authenticity of our customer engagement reinforces our
brand and drives new and existing customer interest in our products and
community.

Our revenue is primarily generated through the sale of our wood pellet grills,
consumables and accessories. We currently offer three series of grills - Pro,
Ironwood and Timberline - as well as a selection of smaller, portable grills.
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, sauces and our premium frozen meal kits consisting of high-quality
ingredients, supplies and easy-to-follow instructions. Our accessories include
grill covers, liners, tools, MEATER smart thermometers, apparel and other
ancillary items.

We sell our grills using an omnichannel distribution strategy that consists
primarily of retail and direct to consumer ("DTC") channels. Our retail channel
covers brick-and-mortar retailers, e-commerce platforms, and multichannel
retailers, who, in turn, sell our grills to their end customers. Our retailers
include Ace Hardware, Amazon.com, Costco, The Home Depot, and William Sonoma,
among others, as well as a significant number of independent retailers that
cater to local communities and specific categories, such as hardware, camping,
outdoor, farm, ranch, barbecue and other categories. Our DTC channel covers
sales directly to customers through our website and Traeger app, as well as
certain country- and region-specific Traeger or distributor websites. Our
consumables and accessories are available through the same channels as our
grills, except that our "Traeger Provisions" product line is only available
through our DTC channel.

Over the last several years, we have made significant investments in our supply
chain and manufacturing operations. Our supply chain includes third party
manufacturers for our grills and accessories and pellet production facilities
for our wood pellets that we own or lease. We work closely with our
manufacturers to evolve on design, manufacturing process and product quality.
Our grills are currently manufactured in China and Vietnam, and we expect that
they will also be manufactured in Mexico beginning later this year, and our wood
pellets are produced at facilities located in New York, Oregon, Georgia,
Virginia, and Texas. We have entered into manufacturing agreements covering the
supply of substantially all of our grills and accessories, pursuant to which we
make purchases on a purchase order basis. We rely on several third-party
suppliers for the components used in our grills, including integrated circuits,
processors, and system on chips.
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Our revenue decreased by 5.0% for the three months ended March 31, 2022 as
compared to the three months ended March 31, 2021, and was $223.7 million for
the three months ended March 31, 2022, down from $235.6 million for the three
months ended March 31, 2021. We recorded a net loss of $8.4 million for the
three months ended March 31, 2022, compared to net income of $38.9 million for
the three months ended March 31, 2021.

Impact of COVID-19

The COVID-19 pandemic has caused various elements of disruption to economies,
businesses, markets and communities around the globe. In the interest of public
health, many governments closed physical stores and business locations deemed to
be non-essential, which drove higher unemployment levels and resulted in the
closure of certain businesses. The COVID-19 pandemic has had a variety of
impacts to the businesses of our retailers and suppliers, as well as customer
behavior and discretionary spending. Although we cannot predict when the United
States and global economy will fully recover from the COVID-19 pandemic, we
believe that our business is well positioned to attract new customers,
capitalize on existing and growing trends in our industry and benefit from the
revival of the economy and discretionary spending. Nevertheless, we do not have
certainty that a full economic recovery will happen in the near future, and it
is possible that the prolonging of the COVID-19 pandemic could have certain
adverse effects on our business, financial condition, and results of operations.
Furthermore, our growth in the past year may obscure the extent to which
seasonality and other trends have affected our business and may continue to
affect our business. For more information regarding the potential impact of the
COVID-19 pandemic on our business, refer to Part I, Item 1A. "Risk Factors" in
our   Annual     Report on Form 10-    K  .

In response to the COVID-19 pandemic, we have focused on business continuity
across our value chain and operations, and made strategic pivots and
reprioritized key initiatives to focus on our immediate response to the COVID-19
pandemic and maintain a nimble approach to our long-term strategy as we
continued to monitor the situation.

Components of operating results

Revenue

We derive substantially all of our revenue from the sale of grills, consumables
and accessories in North America, which includes the United States and Canada.
We recognize revenue, net of product returns, for our grills, consumables and
accessories generally at the time of delivery to retailers through our retail
channel and to customers through our DTC channel. Estimated product returns are
recorded as a reduction of revenue at the time of recognition and are calculated
based on product returns history, observable changes in return behavior, and
expected returns based on sales volume and mix. We also have certain contractual
programs that can give rise to elements of variable consideration, such as
volume incentive rebates, with estimated amounts of credits recorded as a
reduction to revenue.

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.

Gross profit

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.

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
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expansion into new geographies, may impact our future gross margin. External factors beyond our control, such as duties and tariffs and operating costs in certain geographies, may also impact gross margin.

Sales and Marketing

Sales and marketing expense consists primarily of the costs associated with
advertising and marketing of our products and employee-related expenses,
including salaries, benefits, and equity-based compensation expense, as well as
sales incentives and professional services. These costs can include print,
internet and television advertising, travel-related expenses, direct customer
acquisition costs, costs related to conferences and events, and broker
commissions. We expect our sales and marketing expense to increase on an
absolute dollar basis for the foreseeable future as we continue to increase the
scope of outreach to potential new customers to drive our revenue growth. We
also anticipate that sales and marketing expense as a percentage of revenue will
fluctuate from period to period based on revenue for such period and the timing
of the expansion of our sales and marketing functions, as these activities may
vary in scope and scale over future periods.

General and administrative

General and administrative expense consists primarily of employee-related
expenses and facilities for our executive, finance, accounting, legal, human
resources, information technology and other administrative functions. General
and administrative expense also includes fees for professional services, such as
external legal, accounting, and information and technology services, and
insurance.

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 equity-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
$4.9 million and $2.0 million for the three months ended March 31, 2022 and
2021, respectively.

We expect general and administrative expense, including our research and
development expenses and external legal and accounting expenses, to increase on
an absolute dollar basis for the foreseeable future as we continue to increase
investments to support our growth and develop new and enhance existing products
and interactive software. We also anticipate increased administrative and
compliance costs as a result of being a public company. 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.

Amortization of intangible assets

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.

Change in fair value of contingent consideration

The fair values of our contingent consideration earn out obligation associated
with the Apption Labs business combination is estimated based on probability
adjusted present values of the consideration expected to be transferred using
significant inputs. At each reporting date, we revalue the contingent
consideration obligation to its fair value and records increases and decreases
in fair value in the general and administrative expenses in our condensed
consolidated statements of operations and comprehensive income (loss). Changes
in the fair value of the contingent consideration obligation results from
changes in discount periods and rates, and changes in probability assumptions
with respect to the likelihood of achieving the performance targets in the Share
Purchase Agreement.

Total other income (expenses)

Total other income (expense) consists of interest expense and other income
(expense). Interest expense includes interest and other fees associated with our
Credit Facilities and Receivables Financing Agreement (each as defined below).
Other
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income (expense) also consists of any gains (losses) on the sale of long-lived
assets 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.

Results of Operations

The following tables summarize key components of our results of operations for
the periods presented. The period-to-period comparisons of our historical
results are not necessarily indicative of the results that may be expected in
the future.

                                                      Three Months Ended
                                                           March 31,                                Change
                                                    2022               2021              Amount                 %
                                                                               (unaudited)
                                                                         (dollars in thousands)
Revenue                                         $ 223,710          $ 235,573          $ (11,863)                  (5.0) %
Cost of revenue                                   140,145            134,942              5,203                    3.9  %
Gross profit                                       83,565            100,631            (17,066)                 (17.0) %
Operating expenses:
Sales and marketing                                33,094             30,851              2,243                    7.3  %
General and administrative                         42,869             13,556             29,313                  216.2  %
Amortization of intangible assets                   8,889              8,301                588                    7.1  %
Change in fair value of contingent
consideration                                       1,700                  -              1,700                  100.0  %
Total operating expense                            86,552             52,708             33,844                   64.2  %
Income (loss) from operations                      (2,987)            47,923            (50,910)                (106.2) %
Other income (expense):
Interest expense                                   (5,837)            (7,812)            (1,975)                 (25.3) %

Other income (expense), net                           544               (458)             1,002                  218.8  %
Total other expense                                (5,293)            (8,270)            (2,977)                 (36.0) %
Income (loss) before provision for income taxes    (8,280)            39,653            (47,933)                (120.9) %
Provision for income taxes                            152                724               (572)                 (79.0) %
Net income (loss)                               $  (8,432)         $  38,929          $ (47,361)                (121.7) %

Comparison of the three months ended March 31, 2022 and 2021

Revenue

                    Three Months Ended
                        March 31,                      Change
                   2022           2021          Amount           %
                                (dollars in thousands)
Revenue:
Grills          $ 150,431      $ 178,655      $ (28,224)      (15.8) %
Consumables        39,651         40,813         (1,162)       (2.8) %
Accessories        33,628         16,105         17,523       108.8  %
Total Revenue   $ 223,710      $ 235,573      $ (11,863)       (5.0) %


Revenue decreased by $11.9 million, or 5.0%, to $223.7 million for the three
months ended March 31, 2022 compared to $235.6 million for the three months
ended March 31, 2021. The decrease was driven by lower unit volume for grills
and consumables, partially offset by higher selling prices. Accessories revenue
benefited from incremental revenue due to sales of MEATER smart thermometers
following the July 2021 acquisition of Apption Labs.

Revenue from our grills decreased by $28.2 million, or 15.8%, to $150.4 million
for the three months ended March 31, 2022 compared to $178.7 million for the
three months ended March 31, 2021. The decrease was primarily driven by lower
unit volume, partially offset by a higher average selling price resulting from
price increases taken in the second half of 2021 and early 2022.
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Revenue from our consumables decreased by $1.2 million, or 2.8%, to $39.7
million for the three months ended March 31, 2022 compared to $40.8 million for
the three months ended March 31, 2021. The decrease was driven by reduced unit
volume of wood pellets and other consumables, partially offset by higher average
selling prices of wood pellets.

Revenue from our accessories grew by $17.5 million, or 108.8%, to $33.6 million
for the three months ended March 31, 2022 compared to $16.1 million for the
three months ended March 31, 2021. The increase was driven primarily by
incremental revenue due to sales of MEATER smart thermometers following the July
2021 acquisition of Apption Labs combined with high demand for Traeger-branded
accessories.

Gross Profit

                                             Three Months Ended
                                                  March 31,                                Change
                                           2022               2021              Amount                 %
                                                                (dollars in thousands)
Gross profit                           $  83,565          $ 100,631          $ (17,066)                (17.0) %
Gross margin (Gross profit as a
percentage of revenue)                      37.4  %            42.7  %


Gross profit decreased by $17.1 millioni.e. 17.0%, at $83.6 million for the three months ended March 31, 2022 compared to $100.6 million for the three months ended March 31, 2021. Gross margin decreased to 37.4% for the three months ended March 31, 2022 42.7% for the three months ended March 31, 2021. The decrease in gross margin is mainly due to higher inbound shipping costs, partially offset by higher selling prices.

Sales and Marketing

                                  Three Months Ended
                                      March 31,                    Change
                                 2022           2021         Amount         %
                                            (dollars in thousands)
Sales and marketing           $ 33,094       $ 30,851       $ 2,243       7.3  %
As a percentage of revenue        14.8  %        13.1  %


Sales and marketing expense increased by $2.2 million, or 7.3%, to $33.1 million
for the three months ended March 31, 2022 compared to $30.9 million for the
three months ended March 31, 2021. As a percentage of revenue, sales and
marketing expense increased to 14.8% for the three months ended March 31, 2022
from 13.1% for the three months ended March 31, 2021. The increase in sales and
marketing expense was driven by an increase in advertising costs to drive brand
awareness, demand and conversion, higher equity-based compensation expense, and
higher travel expenses.

General and Administrative

                                  Three Months Ended
                                      March 31,                     Change
                                 2022           2021          Amount          %
                                             (dollars in thousands)
General and administrative    $ 42,869       $ 13,556       $ 29,313       216.2  %
As a percentage of revenue        19.2  %         5.8  %


General and administrative expense increased by $29.3 million, or 216.2%, to
$42.9 million for the three months ended March 31, 2022 compared to $13.6
million for the three months ended March 31, 2021. As a percentage of revenue,
general and administrative expense increased to 19.2% for the three months ended
March 31, 2022 from 5.8% for the three months ended March 31, 2021. The increase
in general and administrative expense was driven by higher equity-based
compensation expense of $13.6 million, as well as personnel-related expenses
associated with an increase in headcount in our marketing, customer experience,
and sales functions, increased professional services fees primarily related to
consulting, and expenses related to Apption Labs that are not reflected in the
comparable period results.


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Amortization of intangible assets

                                        Three Months Ended
                                            March 31,                   Change
                                        2022           2021        Amount        %
                                                 (dollars in thousands)

Amortization of intangible assets $8,889 $8,301 $588

    7.1  %
As a percentage of revenue                4.0  %        3.5  %


Amortization of intangible assets, substantially attributable to the 2017
corporate reorganization and acquisition of the Company and the July 2021
acquisition of Apption Labs, increased $0.6 million, or 7.1%, to $8.9 million
for the three months ended March 31, 2022 compared to $8.3 million for the three
months ended March 31, 2021.

Change in fair value of contingent consideration

                                                     Three Months Ended
                                                          March 31,                                    Change
                                                2022                      2021              Amount                 %
                                                                        (dollars in thousands)
Change in fair value of contingent
consideration                              $     1,700                $       -          $   1,700                 100.0  %
As a percentage of revenue                         0.8   %                    -  %


Change in fair value of contingent consideration, attributable to the revalued
earn out obligation associated with the Apption Labs business combination,
increased $1.7 million, or 100.0%, to $1.7 million for the three months ended
March 31, 2022 compared to $0 for the three months ended March 31, 2021. The
change in fair value was primarily driven by the increase in the likelihood of
achieving the revenue performance targets in the Share Purchase Agreement, and a
shorter discount period.

Total Other Expense

                                  Three Months Ended
                                      March 31,                     Change
                                 2022           2021          Amount          %
                                             (dollars in thousands)
Interest expense              $ (5,837)      $ (7,812)      $ (1,975)      (25.3) %

Other income (expense), net        544           (458)         1,002       218.8  %
Total other expense           $ (5,293)      $ (8,270)      $ (2,977)      (36.0) %
As a percentage of revenue        (2.4) %        (3.5) %


Total other expense decreased by $3.0 million, or 36.0%, to $5.3 million for the
three months ended March 31, 2022 compared to $8.3 million for the three months
ended March 31, 2021. This decrease was primarily due to a lower applicable
interest rate on our First Lien Term Loan Facility (as defined below) as a
result of refinancing of our long-term debt in June 2021 and a favorable change
from our derivative instruments.

Cash and capital resources

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.

As of March 31, 2022, we had cash and cash equivalents of $11.1 million, $78.0
million borrowing capacity under our Revolving Credit Facility (as defined
below) and $16.0 million borrowing capacity under our Receivables Financing
Agreement (as defined below). As of March 31, 2022, we had drawn down $47.0
million on the Revolving Credit Facility and $49.2 million on the Receivables
Financing Agreement. As of March 31, 2022, the total principal amount
outstanding under our First Lien Term Loan Facility was $379.2 million. We
believe that our existing cash and cash equivalents, availability under our
Revolving Credit Facility and Receivables Financing Agreement, and our cash
flows from operating activities will be sufficient to fund our working capital
requirements and planned capital expenditures, and to service our debt
obligations, for at least the next 12 months. 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. We may from time to time seek to raise
additional equity
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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  .

Cash Flows

The following table sets forth cash flow data for the periods indicated therein:

                                                            Three Months Ended
                                                                March 31,
                                                           2022           2021
                                                              (in thousands)
Net cash used in operating activities                   $ (46,911)     $ 

(26,544)

Net cash used in investing activities                      (4,648)        

(4,975)

Net cash provided by financing activities                  45,917         

37,064

Net increase (decrease) in cash and cash equivalents $(5,642) $5,545

Cash flow from operating activities

During the three months ended March 31, 2022, net cash used in operating
activities consisted of a net loss of $8.4 million and non-cash adjustments to
net loss of $31.6 million, partially offset by net changes in operating assets
and liabilities of $70.1 million. Non-cash adjustments consisted of depreciation
of property, plant, and equipment of $2.5 million, amortization of intangible
assets of $10.6 million, equity-based compensation of $15.5 million, and
unrealized gains on derivative contracts of $0.6 million. The decrease in net
cash from net changes in operating assets and liabilities during the three
months ended March 31, 2022 was primarily due to an increase in accounts
receivable of $70.4 million and an increase in inventories of $19.1 million,
partially offset by an increase in accounts payable and accrued expenses of
$17.6 million.

During the three months ended March 31, 2021, net cash used in operating
activities consisted of net income of $38.9 million and non-cash adjustments to
net income of $15.8 million, partially offset by net changes in operating assets
and liabilities of $81.3 million. Non-cash adjustments consisted of depreciation
of property, plant, and equipment of $2.2 million, amortization of intangible
assets of $8.5 million, unrealized losses on derivative contracts of $3.3
million, equity-based compensation of $1.0 million, and amortization of deferred
financing costs of $0.7 million. The decrease in net cash from net changes in
operating assets and liabilities during the three months ended March 31, 2021
was primarily due to an increase in accounts receivable of $99.3 million,
partially offset by an increase in inventories of $6.7 million and an increase
in accounts payable and accrued expenses of $26.5 million.

Cash flow from investing activities

In the three months ended March 31, 2022the net cash used in investing activities was $4.6 million. The cash flows used come mainly from the purchase of property, plant and equipment of $4.5 million mainly related to the purchase of tooling equipment, the purchase of wood pellet production equipment and the costs of developing software and websites for internal use.

In the three months ended March 31, 2021the net cash used in investing activities was $5 million. The cash flows used were generated by the purchase of property, plant and equipment of $4.9 million primarily related to internal software and website development costs.

Cash flow from financing activities

During the three months ended March 31, 2022, net cash provided by financing
activities was 45.9 million. The cash flow provided was driven primarily by net
borrowings on our lines of credit under the Revolving Credit Facility and
Receivables Financing Agreement of $46.0 million for general corporate and
working capital purposes.

During the three months ended March 31, 2021, net cash provided by financing
activities was $37.1 million. The cash flow used was driven primarily by net
borrowings on our line of credit under the Receivables Financing Agreement of
$38.0 million combined with principal repayments under our old first lien term
loan of $0.9 million.
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Credit facilities

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").

Senior Credit Agreement

The First Lien Credit Agreement provides for a $560.0 million First Lien Term
Loan Facility (including a $50.0 million delayed draw term loan) and a $125.0
million Revolving Credit Facility.

The First Lien Term Loan Facility accrues interest at a rate per annum that
considers both fixed and floating components. Following the completion of our
IPO in July 2021, 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 Eurocurrency Base Rate (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. The delayed draw term
loan includes a variable commitment fee, which is based on the fixed interest
rate and ranges from 0% to the Applicable Rate (as defined in the First Lien
Credit Agreement). As of March 31, 2022, the total principal amount outstanding
on the First Lien Term Loan Facility was $379.2 million, and we had no
outstanding principal balance under the delayed draw term loan. In April 2022,
we borrowed $12.5 million under the delayed draw term loan for purposes of
financing the earn out obligation associated with the acquisition of Apption
Labs as described in Note 4 - Business Combinations to the unaudited condensed
consolidated financial statements included in Item 1 of this Quarterly Report on
Form 10-Q.

Loans under the Revolving Credit Facility accrue interest at a rate per annum
that considers both fixed and floating components. Following completion of our
IPO in July 2021, 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
Eurocurrency Base Rate 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 March 31, 2022 we had drawn down $47.0 million under the Revolving
Credit Facility for general corporate and working capital purposes.

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.

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
March 31, 2022, we were in compliance with the covenants under the Credit
Facilities.

Accounts Receivable Credit Facility

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.
                                       26

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Contents

On June 29, 2021, we entered into Amendment No. 1 to the Receivables Financing
Agreement and increased the net borrowing capacity from the prior range of $30.0
million to $45.0 million up to $100.0 million. The borrowing capacity fluctuates
at each month end based upon the amount of eligible outstanding domestic
accounts receivables to be used as collateral. As of March 31, 2022, we had
drawn down $49.2 million under this facility for general corporate and working
capital purposes. Absent any cash advances that exceed the SPE's available cash,
the SPE collects proceeds from the receivables and transfers available cash to
us on a regular basis. We are required to pay an annual upfront fee for the
facility, along with fixed interest on outstanding cash advances of 1.7%, a
floating component based on the CP Rate (as defined in the Receivables Financing
Agreement), and an unused capacity charge that ranges from 0.25% to 0.50%. The
facility is set to terminate on June 29, 2024.

In connection with aged accounts receivable that resulted from a new payment
program implemented by one of our largest customers, we amended the covenants
under the Receivables Financing Agreement with MUFG for the month of January
2022. By February 1, 2022, we had collected the majority of the aged accounts
receivable balance and were in compliance with the covenants under the
Receivables Financing Agreement. As of March 31, 2022, we were in compliance
with the covenants under the Receivables Financing Agreement.

Initial public offering

On August 2, 2021, after our statutory conversion and related transactions, we
completed our initial public offering ("IPO") in which we issued and sold
8,823,529 shares of common stock at a public offering price of $18.00 per share,
generating aggregate gross proceeds of $158.8 million before underwriter
discounts and commissions, fees and expenses totaling $20.3 million.
Additionally, certain selling stockholders sold an aggregate of 18,235,293
shares (including 3,529,411 shares pursuant to the underwriters' exercise of
their option to purchase additional shares).

Contractual obligations

There have been no material changes to our contractual obligations as of
March 31, 2022 from those disclosed in our annual report on Form 10-K

.

See the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” included in our Annual Report on Form 10-K for a discussion of our indebtedness and obligations under operating leases, respectively.

Significant Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America ("U.S. GAAP"). The
preparation of our financial statements in conformity with U.S. GAAP requires us
to make estimates and assumptions that affect certain reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date
of the consolidated financial statements and the reported amounts of revenue and
expenses during the reporting period.

Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” of 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
unaudited condensed consolidated financial statements included in Item 1 of this
Quarterly Report on Form 10-Q. During the three months ended March 31, 2022,
there were no material changes to our critical accounting policies from those
discussed in our   Annual Report     on Form 10-K  .

Recent accounting pronouncements

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

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