0001558370-24-003050 | 10-K | XBRL Viewer

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STOCK-BASED COMPENSATION - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Apr. 01, 2023	Dec. 31, 2023
Shares
Granted		0
Employee Stock Option [Member]
Shares
Outstanding at the beginning	1,914,670	1,914,670
Granted		0
Forfeited		(311,344)
Expired		(82,922)
Outstanding at the end		1,520,404
Vested and expected to vest		1,520,404
Options exercisable at the end		521,173
Weighted-Average Exercise Price per Share
Outstanding at the beginning (in dollars per share)	$ 14.85	$ 14.85
Forfeited (in dollars per share)		11.37
Expired (in dollars per share)		17.75
Outstanding at the end (in dollars per share)		15.40
Vested and expected to vest at the end (in dollars per share)		15.40
Options exercisable at the end (in dollars per share)		$ 16.38
Weighted-Average Remaining Contract Term
Outstanding at the end (in years)		7 years 11 months 8 days
Vested and expected to vest at the end (in years)		7 years 11 months 8 days
Options exercisable at the end (in years)		7 years 9 months 7 days
Stock Appreciation Rights (SARs)
Shares
Granted	790,181	849,058
Forfeited		(93,256)
Outstanding at the end		755,802
Vested and expected to vest		755,802
Weighted-Average Exercise Price per Share
Granted (in dollars per share)	$ 3.24	$ 3.17
Forfeited (in dollars per share)		3.24
Outstanding at the end (in dollars per share)		3.16
Vested and expected to vest at the end (in dollars per share)		$ 3.16
Weighted-Average Remaining Contract Term
Outstanding at the end (in years)		9 years 4 months 13 days
Vested and expected to vest at the end (in years)		9 years 4 months 13 days
Outstanding at the end (in dollars)		$ 24,729
Vested and expected to vest (in dollars)		$ 24,729

COMPOSITION OF CERTAIN BALANCE SHEET ACCOUNTS (Tables)

12 Months Ended

Dec. 31, 2023

COMPOSITION OF CERTAIN BALANCE SHEET ACCOUNTS

Schedule of accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	December 31,
	2023		2022
Accrued sales rebates	$	10,170	$	16,705
Accrued product warranties		2,889		3,763
Accrued incentives		1,270		2,727
Accrued vacation		2,310		2,422
Accrued payroll		4,893		5,750
Accrued interest		2,955		2,868
Income taxes payable		1,682		923
Deferred revenue		3,787		4,480
Other accrued expenses		10,735		11,247
Total accrued expenses and other current liabilities	$	40,691	$	50,885

Schedule for allowance of bad debt activity

The allowance for bad debt consisted of the following (in thousands):


	Year Ended
	December 31,
	2023		2022		2021
Balance at the beginning of the year	$	3,161	$	2,393	$	1,438
Bad debt expense		5,379		2,011		979
Write-offs, net of recoveries		(996)		(1,243)		(24)
Balance at the end of the year	$	7,544	$	3,161	$	2,393

INCOME TAXES - Components of income taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
(Loss) income before income taxes:
Domestic	$ (16,303)	$ 2,574	$ (68,261)
Foreign	6,243	11,147	14,731
Total	$ (10,060)	$ 13,721	$ (53,530)

LONG-TERM DEBT - New Term Loan Facility (Details) - USD ($)				3 Months Ended	12 Months Ended
	Feb. 23, 2022	Apr. 27, 2021	Dec. 17, 2018	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 18, 2018
Debt Instrument [Line Items]
Gross debt					$ 309,313,000
Amount outstanding, net of discount and issuance costs					301,201,000	$ 312,881,000
Discount and debt issuance costs					8,112,000	9,681,000
Repayment of long term debt					13,250,000	286,447,000	$ 169,138,000
Term Loan Facility
Debt Instrument [Line Items]
Gross debt					309,313,000	$ 322,562,000
Principal payments calculated as percent of outstanding principal	0.25%
Mandatory prepayment rate as a percentage of excess cash flow	50.00%
Mandatory prepayment rate as a percentage of non-permitted indebtedness	100.00%
Debt issuance costs					4,500,000
Unamortized discount					3,600,000
Amount outstanding, net of discount and issuance costs					$ 301,200,000
Maximum borrowing capacity	$ 325,000,000.0
Effective interest rate					10.82%
Repayment amount to be paid quarterly	$ 812,500
Repayment of long term debt				$ 18,000,000.0
Term Loan Facility \| SOFR \| Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	3.75%
Term Loan Facility \| SOFR \| Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	4.00%
Term Loan Facility \| Base Rate \| Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	2.75%
Term Loan Facility \| Base Rate \| Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	3.00%
Revolver
Debt Instrument [Line Items]
Maximum borrowing capacity								$ 30,000,000.0
Repayment of long term debt		$ 152,700,000
Revolver \| Minimum
Debt Instrument [Line Items]
Mandatory prepayment rate as a percentage of non-permitted indebtedness								0.375%
Revolver \| Maximum
Debt Instrument [Line Items]
Mandatory prepayment rate as a percentage of non-permitted indebtedness								0.50%
Revolver \| SOFR \| Minimum
Debt Instrument [Line Items]
Basis spread on variable rate			4.50%
Revolver \| SOFR \| Maximum
Debt Instrument [Line Items]
Basis spread on variable rate			4.75%
Revolver \| Base Rate \| Minimum
Debt Instrument [Line Items]
Basis spread on variable rate			3.50%
Revolver \| Base Rate \| Maximum
Debt Instrument [Line Items]
Basis spread on variable rate			3.75%

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Consolidated Statements of Comprehensive Loss
Net Income (Loss)	$ (2,388)	$ (5,694)	$ (62,348)
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	(6)	(3,903)	(1,984)
Total other comprehensive loss, net of tax	(6)	(3,903)	(1,984)
Comprehensive loss	$ (2,394)	$ (9,597)	$ (64,332)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

INVENTORIES, NET

12 Months Ended

Dec. 31, 2023

INVENTORIES, NET

INVENTORIES, NET

7.INVENTORIES, NET

Inventories, net consisted of the following (in thousands):


	December 31,
	2023		2022
Raw materials	$	55,081	$	95,388
Finished goods		42,056		69,832
	$	97,137	$	165,220

NET SALES (Details) - USD ($) $ in Thousands	12 Months Ended
NET SALES (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Disaggregation of Revenue [Line Items]
Net sales	$ 566,492	$ 695,736	$ 630,456
In-ground Swimming Pools
Disaggregation of Revenue [Line Items]
Net sales	297,828	385,467	368,465
Covers
Disaggregation of Revenue [Line Items]
Net sales	140,949	158,449	132,126
Liners
Disaggregation of Revenue [Line Items]
Net sales	$ 127,715	$ 151,820	$ 129,865

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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+ Details

INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
INCOME TAXES
Federal statutory tax rate		21.00%	21.00%	21.00%
Operating loss ("NOL") carryforwards	$ 6,700	$ 6,700
Accrued interest	0	0	$ 600
Accrued penalty	0	0	0
Valuation allowance	3,114	$ 3,114			$ 12,704
Liability related to uncertain tax positions, exclusive of interest			$ 6,400
Net decrease of uncertain tax position liability from expiration of the statute of limitations	7,500
Gross decrease of uncertain tax position liability from expiration of the statute of limitations	10,600
Income tax on gross decrease of uncertain tax position liability from expiration of the statute of limitations	$ 3,100

PROFITS INTEREST UNITS - Fair value of the PIUs (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
PROFITS INTEREST UNITS
Expected volatility	40.34%	39.68%	55.00%
Risk-free interest rate	3.54%	2.06%	0.20%
Expected term (in years)	6 years 3 months	6 years 3 months	3 years 2 months 14 days
Expected dividend yield	0.00%	0.00%

LEASES - Maturities of operating lease liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
LEASES
2024	$ 8,542
2025	7,410
2026	5,880
2027	4,141
2028	3,137
Thereafter	7,660
Total lease payments	36,770
Less: Interest	(4,850)
Present value of lease liability	31,920
Finance Leases
2024	1,049
2025	995
2026	899
2027	823
2028	811
Thereafter	377
Total lease payments	4,954
Less: Interest	(923)
Present value of lease liability	4,031
Total
2024	9,591
2025	8,405
2026	6,779
2027	4,964
2028	3,948
Thereafter	8,037
Total lease payments	41,724
Less: Interest	(5,773)
Present value of lease liability	$ 35,951	$ 39,612

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of estimated useful lives of property, plant and equipment


		Estimated
		Useful Life
Building and improvements		25 years
Molds and dyes		5 – 10 years
Machinery and equipment (including computer equipment and software)		3 – 10 years
Furniture and fixtures		5 – 7 years
Vehicles		5 years

Schedule of weighted-average estimated useful lives of finite lived intangible assets


		Estimated
Asset		Useful Life
Trade names and trademarks		9 – 25 years
Technology		15 years
Pool designs		14 – 15 years
Dealer relationships		5 – 13 years
Patented technology		5 – 10 years
Non-competition agreements		5 years
Franchise relationships		4 years
Order backlog		10 months

CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) - Condensed Statement of Cash Flows (Details) - USD ($) $ in Thousands		12 Months Ended
	Jan. 11, 2022	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Cash flows from operating activities:
Net loss		$ (2,388)	$ (5,694)	$ (62,348)
Adjustments to reconcile net loss to net cash provided by operating activities:
Net cash provided by operating activities		116,369	32,309	33,690
Cash flows from investing activities:
Net cash used in investing activities		(31,726)	(45,018)	(108,205)
Cash flows from financing activities:
Proceeds from initial public offering, net of underwriting discounts, commissions and offering costs				399,264
Proceeds from the issuance of common stock			257,663
Repurchase and retirement of common stock			(280,701)	(281,638)
Net cash (used in) provided by financing activities		(13,875)	3,775	60,018
Net increase in cash		70,137	(11,326)	(15,358)
Cash at beginning of period		32,626	43,952	59,310
Cash at end of period		102,763	32,626	43,952
Supplemental cash flow information:
Cash paid for interest		25,747	12,621	17,371
Parent
Cash flows from operating activities:
Net loss		(2,388)	(5,694)	(62,348)
Adjustments to reconcile net loss to net cash provided by operating activities:
Equity in net loss (income) of subsidiary		$ 2,388	5,694	62,348
Cash flows from investing activities:
Distribution from subsidiary			23,038
Investment in subsidiary				(117,626)
Net cash used in investing activities			23,038	(117,626)
Cash flows from financing activities:
Proceeds from initial public offering, net of underwriting discounts, commissions and offering costs				399,264
Proceeds from the issuance of common stock	$ 257,700		257,663
Repurchase and retirement of common stock			(280,701)	(281,638)
Net cash (used in) provided by financing activities			$ (23,038)	$ 117,626

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

INCOME TAXES - Uncertain tax positions (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
INCOME TAXES
Balance at the beginning of the year	$ 10,303	$ 10,011
Gross amounts of increases and decreases in unrecognized tax benefits as a result of tax positions taken during a prior period	379
The amounts of decreases in the unrecognized tax benefits relating to settlements with taxing authorities		292
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations	$ (10,682)
Balance at the end of the year		$ 10,303

ACQUISITIONS - Financial Information (Details) - USD ($) $ in Thousands		12 Months Ended
	Nov. 24, 2021	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Business Acquisition, Pro Forma Information [Abstract]
Net sales				$ 662,282
Net income (loss)				$ (50,382)
Trojan Leisure Products, LLC d/b/a Radiant Pools
Acquired Finite-Lived Intangible Assets [Line Items]
Fair Value	$ 72,500
Business Acquisition, Pro Forma Information [Abstract]
Net sales			$ 2,211
Net income (loss)			$ 3
Trade names \| Trojan Leisure Products, LLC d/b/a Radiant Pools
Acquired Finite-Lived Intangible Assets [Line Items]
Fair Value	$ 13,000
Amortization Period	25 years
Pool designs \| Trojan Leisure Products, LLC d/b/a Radiant Pools
Acquired Finite-Lived Intangible Assets [Line Items]
Fair Value	$ 7,900
Amortization Period	15 years
Technology
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization Period		15 years
Technology \| Trojan Leisure Products, LLC d/b/a Radiant Pools
Acquired Finite-Lived Intangible Assets [Line Items]
Fair Value	$ 13,000
Amortization Period	15 years
Franchise relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization Period		4 years
Backlog
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization Period		10 months
Backlog \| Trojan Leisure Products, LLC d/b/a Radiant Pools
Acquired Finite-Lived Intangible Assets [Line Items]
Fair Value	$ 1,600
Amortization Period	10 months
Dealer relationships \| Trojan Leisure Products, LLC d/b/a Radiant Pools
Acquired Finite-Lived Intangible Assets [Line Items]
Fair Value	$ 37,000
Amortization Period	13 years

STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2023

PROFITS INTEREST UNITS

Summary of stock-based compensation expense


	Year Ended
	December 31,
	2023		2022		2021
Cost of sales	$	81	$	3,762	$	8,697
Selling, general, and administrative		18,723		46,872		120,078
	$	18,804	$	50,634	$	128,775

Schedule of assumptions used to determine the fair value of option awards granted

The following table sets forth the significant assumptions used in the Black-Scholes option-pricing model on a weighted-average basis to determine the fair value of stock appreciation rights awards granted:


	Year Ended
	December 31, 2023
Risk-free interest rate	3.54	%
Expected volatility	40.34	%
Expected term (in years)	6.25
Expected dividend yield	0.00	%

The following table sets forth the significant assumptions used in the Black-Scholes option-pricing model on a weighted-average basis to determine the fair value of option awards granted:


	Year Ended
	December 31, 2022
Risk-free interest rate	2.06	%
Expected volatility	39.68	%
Expected term (in years)	6.25
Expected dividend yield	0.00	%

Schedule of restricted stock awards

The following table represents the Company’s restricted stock awards activity during the year ended December 31, 2023:


		Weighted-
		Average Grant-
	Shares	Date Fair Value
Outstanding at January 1, 2023	2,576,219	$	19.00
Granted	—		—
Vested	(2,377,883)		19.00
Forfeited	(155,450)		19.00
Outstanding at December 31, 2023	42,886	$	19.00

Schedule of restricted stock units

The following table represents the Company’s restricted stock units activity during the year ended December 31, 2023:


		Weighted-
		Average Grant-
	Shares	Date Fair Value
Outstanding at January 1, 2023	617,941	$	8.37
Granted	2,345,746		3.18
Vested	(465,863)		7.63
Forfeited	(262,345)		3.90
Outstanding at December 31, 2023	2,235,479	$	3.60

Schedule of stock option activity

The following table represents the Company’s stock option activity during the year ended December 31, 2023:


			Weighted-	Weighted-
			Average	Average
		Exercise Price		Remaining	Aggregate
	Shares	per Share		Contract Term	Intrinsic Value
				(in years)	(in thousands)
Outstanding at January 1, 2023	1,914,670	$	14.85
Granted	—		—
Exercised	—		—
Forfeited	(311,344)		11.37
Expired	(82,922)		17.75
Outstanding at December 31, 2023	1,520,404	$	15.40	7.94	$	—
Vested and expected to vest at December 31, 2023	1,520,404	$	15.40	7.94	$	—
Options exercisable at December 31, 2023	521,173	$	16.38	7.77	$	—

Schedule of stock appreciation rights activity

The following table represents the Company’s stock appreciation rights activity during the year ended December 31, 2023:


			Weighted-	Weighted-
			Average	Average
		Exercise Price		Remaining	Aggregate
	Shares	per Share		Contract Term	Intrinsic Value
				(in years)	(in thousands)
Outstanding at January 1, 2023	—	$	—
Granted	849,058		3.17
Exercised	—		—
Forfeited	(93,256)		3.24
Outstanding at December 31, 2023	755,802	$	3.16	9.37	$	24,729
Vested and expected to vest at December 31, 2023	755,802	$	3.16	9.37	$	24,729
Stock appreciation rights exercisable at December 31, 2023	—	$	—	—	$	—

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Trade Receivables, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Allowance for bad debt	$ 7,544	$ 3,161	$ 2,393	$ 1,438

INCOME TAXES - Changes in the valuation allowance (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2021
INCOME TAXES
Balance at January 1		$ 12,704
Additions	$ 3,114
Deductions		$ (12,704)
Balance at December 31	$ 3,114

RELATED PARTY TRANSACTIONS - Bright AI Services (Details) - Bright AI Services - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Related Party Transaction [Line Items]
Accounts payable	$ 0.0	$ 0.4
Costs incurred	$ 2.0	$ 0.2	$ 2.1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill, Deferred Offering Costs, Segments, Taxes (Details) $ in Millions	12 Months Ended
	Dec. 31, 2023 USD ($) segment	Dec. 31, 2022 USD ($)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of reporting units	1
Number of operating segments	1
Number of reportable segments	1
Accrued interest on unrecognized tax benefits \| $	$ 0.0	$ 0.6
Accrued penalties on unrecognized tax benefits \| $	$ 0.0	$ 0.0

PROFITS INTEREST UNITS (Details) - USD ($) $ in Thousands		3 Months Ended	12 Months Ended
PROFITS INTEREST UNITS (Details) - USD ($) $ in Thousands	Jan. 29, 2021	Apr. 03, 2021	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Forfeited					1,266,068
Stock-based compensation expense			$ 18,804	$ 50,634	$ 128,775
Selling, general and administrative expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense			$ 18,723	$ 46,872	$ 120,078
Time-Vesting PIUs \| Terminated employee holder
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units vested	211,011
Forfeited	1,055,057
Granted	527,528
Accelerated Time-Vesting PIUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cumulative catch-up charge		$ 1,100
Accelerated Time-Vesting PIUs \| Terminated employee holder
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units vested	105,506
Forfeited	211,011
Vested units at time of termination, after modification	316,517

LONG-TERM DEBT - Term Loan Facility (Details) - USD ($) $ in Thousands	Nov. 24, 2021	Dec. 31, 2023	Jan. 25, 2021	Oct. 14, 2020	May 29, 2019
Debt Instrument [Line Items]
Gross debt		$ 309,313
Term loan
Debt Instrument [Line Items]
Gross debt					$ 215,000
Additional borrowings under amendment	$ 50,000		$ 175,000	$ 20,000	$ 23,000
Amended Term Loan
Debt Instrument [Line Items]
Principal payments calculated as percent of outstanding principal	0.629%
Amended Term Loan \| Federal Funds Rate
Debt Instrument [Line Items]
Basis spread on variable rate	0.50%
Amended Term Loan \| SOFR
Debt Instrument [Line Items]
Basis spread on variable rate	6.00%
Amended Term Loan \| Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate	5.00%

STOCK-BASED COMPENSATION - Restricted Stock Units (Details) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2021
Shares
Balance at beginning		27,424,962
Forfeited		(1,266,068)
Weighted-Average Grant Date Fair Value
Balance at beginning		$ 0.43
Forfeited		$ 0.34
Restricted stock units
Shares
Balance at beginning	617,941
Granted	2,345,746
Vested	(465,863)
Forfeited	(262,345)
Balance at ending	2,235,479
Weighted-Average Grant Date Fair Value
Balance at beginning	$ 8.37
Granted	3.18
Vested	7.63
Forfeited	3.90
Balance at ending	$ 3.60

STOCK-BASED COMPENSATION - Narrative (Details) - USD ($)		12 Months Ended
	Apr. 12, 2021	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	May 02, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for issuance		21,170,212			8,000,000
Maximum grant date fair value of cash and equity awards that may be awarded to a non-employee director	$ 750,000
Stock-based compensation expense		$ 18,804,000	$ 50,634,000	$ 128,775,000
Total unrecognized stock-based compensation expense		$ 7,400,000
Total unrecognized stock-based compensation expense expected to be recognized over a weighted-average period		1 year 6 months 10 days
Weighted average grant-date fair value			$ 5.53
Recognized income tax benefit related to stock-based compensation		$ 500,000	$ 800,000	100,000
Cost of sales
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		81,000	3,762,000	8,697,000
Selling, general and administrative expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		$ 18,723,000	$ 46,872,000	$ 120,078,000

PROPERTY AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2023

PROPERTY AND EQUIPMENT, NET

Schedule of Property and Equipment, net

Property and equipment, net consisted of the following (in thousands):


	December 31,
	2023		2022
Land	$	2,758	$	1,811
Building and improvements		38,994		9,946
Machinery and equipment		49,257		31,765
Furniture and fixtures		2,061		1,585
Computer equipment and software		10,389		6,888
Molds and dyes		21,838		16,934
Leasehold improvements		12,358		9,640
Vehicles		4,923		4,883
Construction in progress		17,599		46,581
		160,177		130,033
Less: Accumulated depreciation		(47,163)		(31,849)
	$	113,014	$	98,184

ACQUISITIONS - Acquisition Date (Details) - USD ($) $ in Thousands			12 Months Ended
	Nov. 25, 2021	Nov. 24, 2021	Dec. 31, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Total purchase price, net of cash acquired			$ 5,358	$ 90,508
Proceeds from long term debt used to pay Acquisition consideration			$ 320,125	$ 222,813
Trojan Leisure Products, LLC d/b/a Radiant Pools
Business Acquisition [Line Items]
Cash acquired		$ 200
Total purchase price, net of cash acquired		90,500
Proceeds from long term debt used to pay Acquisition consideration		50,000
Business acquisition, transaction costs		$ 2,900
Measurement period adjustment	$ 400

ACQUISITIONS (Details) - USD ($) $ in Thousands		12 Months Ended
ACQUISITIONS (Details) - USD ($) $ in Thousands	Nov. 24, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2023
Business Acquisition [Line Items]
Total purchase price, net of cash acquired		$ 5,358	$ 90,508
Proceeds from long term debt used to pay Acquisition consideration		320,125	222,813
Goodwill		131,383	128,871	$ 131,363
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Goodwill		$ 131,383	$ 128,871	$ 131,363
Trojan Leisure Products, LLC d/b/a Radiant Pools
Business Acquisition [Line Items]
Total purchase price	$ 90,700
Cash acquired	200
Total purchase price, net of cash acquired	90,500
Business Acquisition, Transaction Costs	2,900
Proceeds from long term debt used to pay Acquisition consideration	50,000
Goodwill	14,102
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Total consideration	91,109
Cash	217
Trade receivables	2,805
Inventories	5,528
Prepaid expenses and other current assets	396
Property and equipment	1,263
Intangible assets	72,500
Total assets acquired	82,709
Accounts payable	1,744
Accrued expenses and other current liabilities	1,038
Deferred tax liabilities	2,920
Total liabilities assumed	5,702
Total fair value of net assets acquired, excluding goodwill:	77,007
Goodwill	$ 14,102

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment, Net (Details)	Dec. 31, 2023
Building and improvements
Property, Plant and Equipment [Line Items]
Estimated useful life	25 years
Molds and dyes \| Maximum
Property, Plant and Equipment [Line Items]
Estimated useful life	10 years
Molds and dyes \| Minimum
Property, Plant and Equipment [Line Items]
Estimated useful life	5 years
Machinery and equipment (including computer equipment and software) \| Maximum
Property, Plant and Equipment [Line Items]
Estimated useful life	10 years
Machinery and equipment (including computer equipment and software) \| Minimum
Property, Plant and Equipment [Line Items]
Estimated useful life	3 years
Furniture and fixtures \| Maximum
Property, Plant and Equipment [Line Items]
Estimated useful life	7 years
Furniture and fixtures \| Minimum
Property, Plant and Equipment [Line Items]
Estimated useful life	5 years
Vehicles
Property, Plant and Equipment [Line Items]
Estimated useful life	5 years
Software
Property, Plant and Equipment [Line Items]
Estimated useful life	5 years

PROPERTY AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2023

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET

8.PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following (in thousands):


	December 31,
	2023		2022
Land	$	2,758	$	1,811
Building and improvements		38,994		9,946
Machinery and equipment		49,257		31,765
Furniture and fixtures		2,061		1,585
Computer equipment and software		10,389		6,888
Molds and dyes		21,838		16,934
Leasehold improvements		12,358		9,640
Vehicles		4,923		4,883
Construction in progress		17,599		46,581
		160,177		130,033
Less: Accumulated depreciation		(47,163)		(31,849)
	$	113,014	$	98,184

Depreciation and amortization expense related to property and equipment during the years ended December 31, 2023, 2022 and 2021 was $13.8 million, $10.0 million, and $9.7 million, respectively. Construction in progress recorded as of December 31, 2023 and 2022 primarily related to an ongoing effort to increase fiberglass molds and fiberglass production capacity as well as ERP costs. The Company recorded aggregate losses on sales and disposals of property and equipment of $0.3 million, $0.2 million, and $0.3 million during the years ended December 31, 2023, 2022 and 2021, respectively.

PROFITS INTEREST UNITS (Tables)

12 Months Ended

Dec. 31, 2023

PROFITS INTEREST UNITS

Schedule of activity of all PIUs


		Weighted-Average
		Grant-Date
	Number of PIUs	Fair Value
Balance at January 1, 2021	27,424,962	$	0.43
Forfeited	(1,266,068)		0.34
Converted at IPO in connection with the Reorganization	(26,158,894)		0.43
Balance at December 31, 2021	—	$	—

Schedule of assumptions in conjunction with the Contingent Claims Analysis Model to estimate the fair value of the PIUs

The Company used the following assumptions in conjunction with the Contingent Claims Analysis Model to estimate the fair value of the PIUs:


	Year Ended
	December 31, 2021
Expected volatility	55.00	%
Risk-free interest rate	0.20	%
Expected term (in years)	3.2
Expected dividend yield	—	%

INCOME TAXES

12 Months Ended

Dec. 31, 2023

INCOME TAXES

INCOME TAXES

15.INCOME TAXES

The Company is subject to United States federal, state, and local income taxes, as well as other foreign income taxes. The domestic and foreign components of its (loss) income before income taxes are as follows (in thousands):


	Year Ended
	December 31,
	2023		2022		2021
(Loss) income before income taxes:
Domestic	$	(16,303)	$	2,574	$	(68,261)
Foreign		6,243		11,147		14,731
Total	$	(10,060)	$	13,721	$	(53,530)

Current and deferred income tax (benefit) expense is composed of the following (in thousands):


	Year Ended
	December 31,
	2023		2022		2021
Current income tax expense:
Domestic	$	1,225	$	22,133	$	19,855
Foreign		788		1,084		991
Total current tax expense		2,013		23,217		20,846
Deferred income tax (benefit) expense:
Domestic		(9,965)		(6,020)		(1,912)
Foreign		280		2,218		(10,116)
Total deferred tax (benefit)		(9,685)		(3,802)		(12,028)
Total income tax (benefit) expense	$	(7,672)	$	19,415	$	8,818

The reconciliation of the statutory federal income tax rate with the Company’s effective income tax rate is as follows (% of (Loss) Income Before Income Taxes):


	Year Ended		Year Ended		Year Ended
	December 31, 2023		December 31, 2022		December 31, 2021
Federal statutory tax rate	21.0	%	21.0	%	21.0	%
Foreign rate differential	(5.6)	%	4.1	%	(1.4)	%
State income tax, net of federal benefit	14.0	%	14.0	%	(3.3)	%
Uncertain tax positions	101.7	%	2.1	%	(0.3)	%
Change in valuation allowance	(30.9)	%	—	%	23.8	%
GILTI (FDII)	(3.7)	%	(4.0)	%	0.8	%
Meals and entertainment	(3.1)	%	0.7	%	(0.2)	%
Foreign expenses not deductible for tax	(3.7)	%	3.2	%	(0.8)	%
Transaction costs not deductible for tax	—	%	18.8	%	(0.2)	%
Other non-deductible expense	(6.8)	%	—	%	—	%
Nondeductible stock compensation	(24.1)	%	67.3	%	(48.0)	%
Stock compensation shortfall (windfall)	(1.5)	%	1.2	%	—	%
Other compensation	(4.6)	%	—	%	(0.9)	%
Canadian branch income	1.3	%	8.8	%	(9.1)	%
Foreign tax restructuring	21.3	%	—	%	—	%
Other permanent items	0.9	%	4.3	%	2.1	%
	76.2	%	141.5	%	(16.5)	%

The following table summarizes changes in the valuation allowance (in thousands):


	Year Ended
	December 31,
	2023		2022		2021
Balance at January 1	$	—	$	—	$	(12,704)
Additions		3,114		—		—
Deductions		—		—		12,704
Balance at December 31	$	3,114	$	—	$	—

The Inflation Reduction Act (IRA) was passed into law on August 16, 2022. The key provisions from the IRA include the implementation of a 15% alternative book income minimum tax, an excise tax on stock buybacks, and significant tax incentives for energy and climate initiatives. The Company evaluated the key provisions under the IRA and concluded that the provisions are not applicable to Latham for year ended December 31, 2023.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the U.S. Tax Cuts and Jobs Act of 2017 (the “Act”). The Act made broad and complex changes to the U.S. tax code, including, but not limited to (1) reducing the U.S. federal corporate tax rate from 35% to 21% effective January 1, 2018, (2) bonus depreciation that allows for full expensing of qualified property, (3) interest expense deduction limitation rules, and (4) new international tax provisions including, but not limited to, GILTI and Foreign Derived Intangible Income (“FDII”). The Act also required companies to record/pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred. The one-time transition tax was based on the Company’s total post-1986 earnings and profits (“E&P”) that were previously deferred for U.S. income tax purposes. The Company did not record a liability for the one-time transition tax for all of its foreign subsidiaries as the Company did not have aggregate E&P from those foreign subsidiaries.

During the year ended December 31, 2019, the Company finalized the computations of the income tax effects of the Act. Although the Company has completed its accounting for the effects of the Act, the determination of the Act’s income tax effects may change following future legislation or further interpretation of the Act based on the publication of recently proposed U.S. Treasury regulations and guidance from the Internal Revenue Service and state tax authorities. The Company has elected with respect to its treatment of GILTI to account for taxes on GILTI as incurred.

As of 2022, the Act's amendments to Section 174 no longer permitted an immediate deduction for research and development (R&D) expenditures, including those related to internally developed software, in the tax year that such costs are incurred. Instead, companies are required to capitalize and amortize all R&D expenditures and taxpayers are required to determine the proper amount of their Section 174 costs. The Company considered these requirements and recorded a deferred tax asset on the capitalization of the R&D expenditures.

In addition, the Act provides for a change to the interest deduction limitation (Section 163(j)) for tax years starting January 1, 2022, and later. Taxable income no is longer adjusted for depreciation, amortization, and depletion in arriving at adjusted taxable income ("ATI"), resulting in lower ATI and potentially a greater interest expense disallowance. The Company's interest expense deduction is limited in the current year and has established a deferred tax asset for the carry-forward balance.

The Coronavirus Aid, Relief, and Economic Security ("CARES") Act was passed into law on March 27, 2020 and included a provision to temporarily increased the bonus depreciation deduction from 80% to 100% for qualified property acquired and placed in service after September 27, 2017, and before January 1, 2023. The 100% bonus depreciation provision under the CARES Act expired on December 31, 2022 and as a result, the Company has reverted to the 80% bonus depreciation rate for qualified property acquired and placed in service during 2023.

Deferred Income Taxes

Deferred income taxes recognize the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the carrying amounts used for income tax purposes, and the

impact of available net operating loss (“NOL”) and tax credit carryforwards. These items are stated at the enacted tax rates that are expected to be in effect when taxes are actually paid or recovered.

Deferred income tax assets and liabilities recorded on the balance sheets as of December 31, 2023 and 2022 consist of the following (in thousands):


	December 31,
	2023		2022
Deferred tax assets:
Net operating loss carryforwards	$	6,715	$	7,267
Capital loss carryforwards		3,114		—
Inventories, net		3,234		2,663
Warranty reserve		595		783
Trade receivables		1,737		719
Profits interest units		2,581		1,885
Section 163(j)		2,345		—
Accrued expenses		509		352
Transaction costs		1,052		1,211
Future branch taxes		(1,691)		(1,820)
Other		2,082		1,335
Gross deferred tax assets		22,273		14,395
Valuation allowance		(3,114)		—
Total deferred tax asset		19,159		14,395
Less: Foreign deferred tax benefit		(7,485)		(7,762)
Total domestic deferred tax asset		11,674		6,633
Deferred tax liabilities:
Intangible assets		(45,150)		(49,257)
Property and equipment, net		(5,656)		(6,078)
Prepaid expenses and other		(644)		(1,161)
Investments in partnerships		(312)		(318)
Total deferred tax liabilities		(51,762)		(56,814)
Net deferred tax liabilities	$	(40,088)	$	(50,181)

ASC 740, Income Taxes, requires that the Company reduce its deferred income tax assets by a valuation allowance if, based on the weight of the available evidence, it is more likely than not that all or a portion of a deferred tax asset will not be realized.

As of December 31, 2023, after consideration of all evidence, both positive and negative, management concluded that it is not more likely than not that it would be able to realize all of its deferred tax assets and that a valuation allowance of $3.1 million for the Company's capital loss carryforward deferred tax asset was necessary as of December 31, 2023. This deferred tax asset was previously presented net in the balance sheet with the Company's uncertain tax position liability. With the release of the Company's uncertain tax position liability during the fourth quarter of 2023, management concluded a valuation allowance was necessary for the capital loss carryforward. It is reasonably possible that the Company’s estimates of future taxable income may change within the next 12 months, resulting in a change to the valuation allowance in one or more jurisdictions.

As of December 31, 2023, the Company had net NOL carryforwards of approximately $6.7 million (tax effected), which will be available to offset future taxable income. The foreign NOL carryforwards expire in calendar years 2036 through 2040.

The Company reinvests earnings of foreign operations indefinitely and, accordingly, does not provide for income taxes that could result from the remittance of such earnings. The Company acknowledges that it would need to accrue and pay taxes should it decide to repatriate cash generated from earnings of its foreign subsidiaries that are considered indefinitely reinvested but expects that the potential tax liability would be insignificant.

Tax Uncertainties

The liability related to uncertain tax positions, exclusive of interest, was $6.4 million at December 31, 2022. As of December 31, 2023, the statute of limitations expired with respect to the Company’s 2019 U.S. Federal income tax return for which the uncertain tax position liability had been recorded. As a result of the expiration of the statute of limitations, the Company released the uncertain tax position liability with a corresponding net tax benefit of $7.5 million (a gross tax benefit of $10.6 million from the liability release offset by tax expense of $3.1 million from establishing a valuation allowance on an associated deferred tax asset) during the fourth fiscal quarter of 2023.

The Company is subject to income taxes in the U.S., certain states, and numerous foreign jurisdictions. While the Company believes it has adequately provided for all tax positions, amounts asserted by taxing authorities could be greater than its accrued position. Accordingly, additional provisions on federal and foreign tax-related matters could be recorded in the future as revised estimates are made or the underlying matters are settled or otherwise resolved.

The Company files a federal consolidated tax return that includes all U.S. entities as well several combined/consolidated state tax returns and separate state tax returns. In addition, the Company files Canadian and Australian tax returns for its Canadian, Australian, and New Zealand entities. The Company is subject to the regular examination of our income tax returns by tax authorities. The Company does not have any federal audits in process. Examinations in material jurisdictions or changes in laws, rules, regulations, or interpretations by local taxing authorities could result in impacts to tax years open under statute or to foreign operating structures currently in place. The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations or changes in laws, rules, regulations, or interpretations to determine the adequacy of our provision for taxes. It is possible the outcomes from these examinations will have a material adverse effect on our financial condition and operating results.

Tax years from the year ended December 31, 2020 through present are open for examination in the U.S. Tax years and tax periods ended December 31, 2019 through present are open for state examination. The Latham 2019 and 2020 Illinois returns are currently under examination by the state of Illinois. Tax years and tax periods from June 30, 2020 through present are currently open for examination in Canada. Tax years and tax periods from June 30, 2019 through present are currently open for examination in Australia. Tax years and tax periods from March 31, 2019 through present are currently open for examination in New Zealand.

The following is a reconciliation of the beginning and ending amount of uncertain tax positions (in thousands):


	Year Ended
	December 31,
	2023		2022
Balance at the beginning of the year	$	10,303	$	10,011
Gross amounts of increases and decreases in unrecognized tax benefits as a result of tax positions taken during a prior period		379		—
Gross amounts of increases and decreases in unrecognized tax benefits as a result of tax positions taken during the current period		—		—
The amounts of decreases in the unrecognized tax benefits relating to settlements with taxing authorities		—		292
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations		(10,682)		—
Balance at the end of the year	$	—	$	10,303

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

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+ Details

NATURE OF THE BUSINESS

12 Months Ended

Dec. 31, 2023

NATURE OF THE BUSINESS

NATURE OF THE BUSINESS

1.NATURE OF THE BUSINESS

Latham Group, Inc. (the “Company”) wholly owns Latham Pool Products, Inc. (“Latham Pool Products”) (together, “Latham”), a designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand. Latham offers a portfolio of pools and related products, including in-ground swimming pools, pool liners, and pool covers.

Stock Split, Initial Public Offering and Reorganization

On April 13, 2021, the Company’s certificate of incorporation was amended and restated. On April 13, 2021, the Company effected a 109,673.709-for-one stock split of its issued and outstanding shares of common stock. Accordingly, all share and per share data included in these consolidated financial statements and notes thereto have been adjusted retroactively to reflect the impact of the amended and restated certificate of incorporation and the stock split. Refer to Note 19 for additional detail.

On April 27, 2021, the Company completed its initial public offering (the “IPO”), pursuant to which it issued and sold 23,000,000 shares of common stock, inclusive of 3,000,000 shares sold by the Company pursuant to the full exercise of the underwriters’ option to purchase additional shares. The aggregate net proceeds received by the Company from the IPO were $399.3 million, after deducting underwriting discounts and commissions and other offering costs.

Prior to the closing of the Company’s IPO on April 27, 2021, the Company’s parent entity, Latham Investment Holdings, L.P. (“Parent”), merged with and into Latham Group, Inc. (the “Reorganization”). Refer to Note 19 for additional detail.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Credit Risk (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($) customer	Dec. 31, 2022 USD ($) customer	Dec. 31, 2021 customer
Concentration Risk [Line Items]
Number of largest customers \| customer	1	1	1
Trade receivables	$ 30,407	$ 48,847
Net sales \| Customer concentration \| Customer one
Concentration Risk [Line Items]
Concentration risk percentage	20.30%	20.30%	25.00%
Trade receivables	$ 2,600	$ 1,600

FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2023

FAIR VALUE MEASUREMENTS

Schedule of financial liabilities at fair value on a recurring basis


	December 31,
	2023				2022
	Carrying		Estimated		Carrying		Estimated
	Value		Fair Value		Value		Fair Value
Term Loan	$	301,201	$	289,153	$	312,881	$	290,979

LONG-TERM DEBT - Schedule of prepayments based on excess cash flow (Details)	12 Months Ended
	Dec. 31, 2023
> 3.50:1.00
Debt Instrument [Line Items]
Mandatory Prepayment Percentage	0.90%
> 3.00:1.00 and 3.50:1.00
Debt Instrument [Line Items]
Mandatory Prepayment Percentage	0.75%
> 2.50:1.00 and 3.00:1.00
Debt Instrument [Line Items]
Mandatory Prepayment Percentage	0.50%
> 2.00:1.00 and 2.50:1.00
Debt Instrument [Line Items]
Mandatory Prepayment Percentage	0.25%
2.00:1.00
Debt Instrument [Line Items]
Mandatory Prepayment Percentage	0.00%

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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+ Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements and notes have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company’s consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company bases its estimates on historical experience, known trends, and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are evaluated on an ongoing basis and revised as there are changes in circumstances, facts, and experience. Changes in estimates are recorded in the period in which they become known.

Seasonality

Although the Company generally has demand for its products throughout the year, its business is seasonal and weather is one of the principal external factors affecting the business. In general, net sales and net income are highest during spring and summer, representing the peak months of swimming pool use, pool installation, and remodeling and repair activities. Sales periods having severe weather may also affect net sales.

Leases

On January 1, 2022, the Company adopted ASU 2016-02, “Leases (Topic 842),” and the related amendments The optional transition method of adoption was used, in which the cumulative effect of initially applying the new standard to existing leases was $0.3 million to record the operating lease right-of-use assets and the related liabilities as of January 1, 2022. Under this method of adoption, the comparative information has not been revised and continues to be reported under the previously applicable lease accounting guidance (“ASC 840”).

For leases with initial terms greater than 12 months, the Company considers these right-of-use assets and records the related asset and obligation at the present value of lease payments over the term. For leases with initial terms equal to or less than 12 months, the Company does not consider them as right-of-use assets and instead considers them short-term lease costs that are recognized on a straight-line basis over the lease term. The Company’s leases may include escalation clauses, renewal options and/or termination options that are factored into the Company’s determination of lease term and lease payments when it is reasonably certain the option will be exercised. The Company has elected to take the practical expedient and not separate lease and non-lease components of contracts. The Company estimates an incremental borrowing rate to discount the lease payments based on information available at lease commencement because the implicit rate of the lease is generally not known.

The Company leases vehicles, manufacturing facilities, office space, land, and equipment under operating leases. The Company determines if an arrangement is a lease at inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company does not have material finance leases.

Revenue Recognition

Under ASC 606, Revenue from Contracts with Customers (“ASC 606”), the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract, determines which goods or services are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when, or as, that performance obligation is satisfied.

The Company sells its products through business-to-business distribution channels. With the exception of its extended service warranties and custom product contracts, the Company recognizes its revenue at a point in time when control of the promised goods is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. Control of the goods is considered to have been transferred upon shipping or upon arrival at the customer’s destination, depending on the terms of the purchase order. Revenue that is derived from its extended service warranties, which are separately priced and sold, is recognized over the term of the contract. Refer to Warranties within this same Note for further information.

Revenue from custom products is recognized over time utilizing an input method that compares the cost of cumulative work-in-process to date to the most current estimates for the entire cost of the performance obligation. Custom products are generally delivered to the customer within three days of receipt of the purchase order.

Each product shipped is considered to be one performance obligation. For each product shipped, the transaction price by product is specified in the purchase order. The Company recognizes revenue on the transaction price less any estimated rebates, cash discounts, or other sales incentives. Customer rebates, cash discounts, and other sales incentives

are estimated by applying the portfolio approach using the most-likely-amount method and are recorded as a reduction to revenue. Estimates are updated each reporting period and any changes are allocated to the performance obligations on the same basis as at inception. The Company believes the most-likely-amount method best predicts the amount of consideration to which it will be entitled.

The Company has elected to account for shipping and handling costs as activities to fulfill the promise to transfer the goods. As a result of this accounting policy election, the Company does not consider shipping and handling activities as promised services to its customers. Therefore, shipping and handling costs billed to customers are recorded in net sales, and the related costs in cost of sales.

The Company does not engage in contracts greater than one year, and therefore does not have any contract costs capitalized as of December 31, 2023, and 2022.

As a practical expedient, the Company does not adjust the promised amount of consideration for the effects of a significant financing component since the period between the transfer of a promised good to a customer and when the customer pays for that product is one year or less.

Warranties

The Company offers limited assurance-type warranties on most of its products, which assure that the product will comply with agreed upon specifications. These assurance-type warranties are not separately priced and are not considered separate performance obligations. The Company also offers optional extended service contracts that are separately priced. The Company recognizes revenue related to extended service contracts over the term of the contract.

The Company’s assurance-type warranties generally range from five years to lifetime warranties. At the time product revenue is recognized, the Company records a liability for estimated costs that may be incurred under its warranties. The costs are estimated based on historical experience and any specific warranty issues that have been identified. The accuracy of the estimate of additional costs is dependent on the number and cost of future claims submitted during the warranty periods. Although historical warranty costs have been within expectations, there can be no assurance that future warranty costs will not exceed historical amounts. The Company believes that the reserves established for estimated and probable future product warranty claims are adequate. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the balance as necessary. Warranty costs are recorded within cost of sales on the consolidated statements of operations. The Company’s provision for product warranties was recorded within accrued expenses and other current liabilities and other long-term liabilities on the consolidated balance sheets as of December 31, 2023 and 2022.

Cost of Sales

Cost of sales includes the cost of materials and all costs to make products saleable, such as labor, materials, inbound freight, including inter-plant freight, purchasing, and receiving costs, operating lease costs related to distribution and manufacturing facilities, and warehousing and distributions costs. In addition, all depreciation expense associated with assets used to manufacture products and make them saleable is included in cost of sales. The Company records shipping and handling costs associated with outbound freight as cost of sales when the related revenue is recognized in the consolidated statements of operations.

Exit or Disposal Costs

The Company accounts for exit or disposal of activities in accordance with ASC 420, Exit or Disposal Cost Obligations. The Company defines an exit or disposal activity as one that includes but is not limited to a program which is planned and controlled by management and materially changes either the scope of a business or the manner in which that business is conducted. Business exit costs may include (i) one-time termination benefits related to employee separations, (ii) contract termination costs and (iii) other related costs associated with exit or disposal activities. The Company records one-time employee termination benefits as an operating expense when the benefit arrangement is communicated to the employee and no significant future services are required.

Trade Receivables, Net

Trade receivables are recorded at the original invoiced amount and do not bear interest. The Company maintains an allowance for bad debt. The allowance for bad debt is based on the best estimate of the amount of probable credit losses in existing accounts receivable. The Company determines the allowances based on historical write-off experience. The Company’s allowance for bad debt as of December 31, 2023 and 2022 was $7.5 million and $3.2 million, respectively.

Concentration of Credit Risk

Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and trade receivables. The Company from time to time may have bank deposits in excess of insurance limits of the Federal Deposit Insurance Corporation. The Company also has bank deposits in international accounts. The Company has not historically sustained any credit losses in such accounts and believes it is not exposed to any significant credit risk related to its cash. The Company routinely reviews the financial strength of its customers before extending credit and believes that its trade receivables credit risk exposure is limited. Generally, the Company does not require collateral from its customers. The Company provides extended payment terms to certain customers.

During the years ended December 31, 2023, 2022 and 2021, one customer represented approximately 20.3%, 20.3% and 25.0% of the Company’s net sales, respectively. As of December 31, 2023 and 2022, outstanding trade receivables related to this customer were $2.6 million and $1.6 million, respectively.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value.

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Inputs, other than quoted prices in active markets, that are observable either directly or indirectly.

Level 3 — Unobservable inputs that reflect the Company’s own assumptions incorporated into valuation techniques. These valuations require significant judgment.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. When there is more than one input at different levels within the hierarchy, the fair value is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Assessment of the significance of a particular input to the fair value measurement in its entirety requires substantial judgment and consideration of factors specific to the asset or liability. Level 3 inputs are inherently difficult to estimate. Changes to these inputs can have significant impact on fair value measurements. Assets and liabilities measured at fair value using Level 3 inputs are based on one or more of the following valuation techniques: market approach, income approach, or cost approach. There were no transfers between fair value measurement levels during the years ended December 31, 2023, 2022 and 2021.

Business Combinations

In determining whether an acquisition should be accounted for as a business combination or asset acquisition, the Company first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this is the case, the single identifiable asset or the group of similar assets is not deemed to be a business, and is instead deemed to be an asset. If this is not the case, the Company then further evaluates whether the single identifiable asset or group of similar identifiable assets and activities includes, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. If so, the Company concludes that the single identifiable asset or group of similar identifiable assets and activities is a business.

The Company accounts for business combinations that are deemed to be businesses using the acquisition method of accounting. Application of this method of accounting requires that (i) identifiable assets acquired (including identifiable intangible assets) and liabilities assumed generally be measured and recognized at fair value as of the acquisition date and (ii) the excess of the purchase price over the net fair value of identifiable assets acquired and liabilities assumed be recognized as goodwill, which is not amortized for accounting purposes but is subject to testing for impairment at least annually. Any contingent assets acquired and contingent liabilities assumed are also recognized at fair value if the Company can reasonably estimate fair value during the measurement period (which cannot exceed one year from the acquisition date). The Company re-measures any contingent liabilities at fair value in each subsequent reporting period. Transaction costs related to business combinations are expensed as incurred. Determining the fair value of assets acquired and liabilities assumed in a business combination requires management to use significant judgment and estimates, especially with respect to intangible assets.

During the measurement period, which extends no later than one year from the acquisition date, the Company may record certain adjustments to the carrying value of the assets acquired and liabilities assumed with the corresponding offset to goodwill. After the measurement period, all adjustments are recorded in the consolidated statements of operations as operating expenses or income.

Acquisition-related contingent consideration was recorded in the consolidated balance sheets at its acquisition-date estimated fair value, in accordance with the acquisition method of accounting. The fair value of the acquisition-related contingent consideration was remeasured each reporting period, with changes in fair value recorded in other expense (income), net in the consolidated statements of operations. The fair value measurement is based on significant inputs not observable by market participants and thus represents a Level 3 input in the fair value hierarchy.

Equity Method Investments

Investments and ownership interests in common stock or in-substance common stock are accounted for under the equity method accounting if the Company has the ability to exercise significant influence over the entity, but does not have a controlling financial interest. The Company also uses the equity method of accounting for investments in a partnership or limited liability company with specific ownership accounts, if the Company has an ownership interest of 5% or more. Under the equity method, investments are initially recognized at cost and adjusted to reflect the Company’s interest in net earnings, dividends received and other-than-temporary impairments. The Company records its interest in the net earnings of its equity method investee, along with adjustments for amortization of basis differences, investee capital transactions and other comprehensive income (loss), within earnings (losses) from equity method investment in the consolidated statements of operations. Basis differences represent differences between the cost of the investment and the underlying equity in net assets of the investment and are generally amortized over the lives of the related assets that gave rise to the underlying basis differences. Profits or losses related to intra-entity sales with its equity method investee are eliminated until realized by the investor or investee.

The Company records its proportionate share of earnings or losses of Premier Holdco, LLC (“Premier Pools & Spas”) within earnings from equity method investment in the consolidated statements of operations on a three-month lag. For presentation in the consolidated statements of cash flows, the Company utilizes the cumulative earnings approach for purposes of determining whether distributions should be classified as either a return on investment, which are included in operating activities, or a return of investment, which would be included in investing activities. Under the cumulative

earnings approach, the Company compares the distributions received to its cumulative equity-method earnings since inception. Any distributions received up to the amount of cumulative equity earnings are be considered a return on investment and classified in operating activities. Any excess distributions would be considered a return of investment and classified in investing activities.

Equity method goodwill is not amortized or tested for impairment; instead the Company evaluates equity method investments for impairment when events or changes in circumstances indicate that the decline in value below the carrying amount of its equity method investment is determined to be other than temporary. In such a case, the decline in value below the carrying amount of its equity method investment is recognized in the consolidated statements of operations in the period the impairment occurs.

Inventories, Net

Inventories, primarily raw materials and finished goods, are stated at the lower of cost or net realizable value. Cost is determined under the first-in, first-out method. Inventory costs include all costs directly attributable to the products, including all manufacturing overhead, and excludes costs to distribute. The Company periodically reviews its inventory for slow moving or obsolete items and writes down the related products to estimated net realizable value. As of December 31, 2023 and 2022, the Company’s reserve for estimated slow moving products or obsolescence was $9.1 million and $4.6 million, respectively.

Property and Equipment, Net

Property and equipment are recorded at cost and presented net of accumulated depreciation. Property and equipment acquired through business combinations are recorded at fair value at the acquisition date. Expenditures for betterments and major improvements that substantially enhance the value and increase the estimated useful life of the assets are capitalized and depreciated over the new estimated useful life. Normal repairs and maintenance costs are expensed as incurred. Depreciation and amortization expense are recognized using the straight-line method over the estimated useful lives of each respective asset category as follows:


		Estimated
		Useful Life
Building and improvements		25 years
Molds and dyes		5 – 10 years
Machinery and equipment (including computer equipment and software)		3 – 10 years
Furniture and fixtures		5 – 7 years
Vehicles		5 years

Leasehold improvements are amortized over the shorter of the term of the related lease or the estimated useful lives of the improvements. When property and equipment is sold or retired, the asset cost and accumulated depreciation and amortization are removed from the respective accounts and a gain or loss is recognized, if any, on the consolidated statements of operations.

The Company capitalizes external costs and directly attributable internal costs to acquire or create internal-use software that are incurred subsequent to the completion of the preliminary project state. These costs relate to activities such as software design, configuration, coding, testing, and installation, and they exclude training and maintenance. Once the software is substantially complete and ready for its intended use, capitalized development costs are amortized straight-line over the estimated useful life of the software, generally not to exceed five years.

Long-Lived Assets

Long-lived assets include property and equipment and definite-lived intangible assets. The Company evaluates the carrying value of its long-lived assets for impairment whenever events or circumstances indicate that the carrying value of the assets may not be recoverable. Conditions that may indicate impairment include, but are not limited to, a significant decrease in the market price of an asset, a significant adverse change in the extent or manner in which an

asset is being used or a significant decrease in its physical condition, and operating or cash flow performance that demonstrates continuing losses associated with an asset or asset group. The Company also considers non-financial data such as changes in the operating environment, competitive information, market trends, and business relationships.

A potential impairment has occurred if the projected future undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group are less than the carrying value of the asset or asset group. The estimate of cash flows includes management’s assumptions of cash inflows and outflows directly resulting from the use of the asset in operation. If the carrying value exceeds the sum of the undiscounted cash flows, an impairment charge is recorded equal to the excess of the asset or asset group’s carrying value over its fair value. Fair value is measured using appropriate valuation methodologies that would typically include a projected discounted cash flow model using a discount rate the Company believes is commensurate with the risk inherent in its business. The Company did not recognize any impairment losses on long-lived assets during the years ended December 31, 2023 and 2022.

The Company amortizes its definite-lived intangible assets using the straight-line method. The weighted-average estimated useful lives (in years) of the Company’s definite-lived intangible assets are as follows:


		Estimated
Asset		Useful Life
Trade names and trademarks		9 – 25 years
Technology		15 years
Pool designs		14 – 15 years
Dealer relationships		5 – 13 years
Patented technology		5 – 10 years
Non-competition agreements		5 years
Franchise relationships		4 years
Order backlog		10 months

Goodwill

The Company accounts for goodwill as the excess of the purchase price over the net amount of identifiable assets acquired and liabilities assumed in a business combination measured at fair value. Goodwill is not subject to amortization; rather, the Company tests goodwill for impairment annually on the first day of the Company’s fourth quarter and whenever events occur or changes in circumstances indicate that impairment may have occurred. The Company has one reporting unit for goodwill impairment testing purposes.

Impairment testing is performed for the Company’s reporting unit by first assessing qualitative factors to see if further testing of goodwill is required. If the Company concludes that it is more likely than not that its reporting unit’s fair value is less than its carrying amount based on the qualitative assessment, then a quantitative test is required. The Company may also choose to bypass the qualitative assessment and perform the quantitative test.

If the estimated fair value of the reporting unit exceeds the carrying amount, the Company considers that goodwill is not impaired. If the carrying value exceeds estimated fair value, there is an impairment of goodwill and an impairment loss is recorded. The Company calculates the impairment loss by comparing the fair value of its reporting unit less the carrying amount, including goodwill. Goodwill impairment would be limited to the carrying value of the goodwill.

Debt Issuance Costs

The Company defers costs incurred in conjunction with acquiring third-party financing. The Company amortizes debt issuance costs over the term of the related long-term debt instruments using the effective interest method. Debt issuance costs related to long-term debt are recorded as a direct reduction to the carrying amount of long-term debt on the consolidated balance sheets.

Segment Reporting

The Company identifies operating segments based on how the chief operating decision maker manages the business, allocates resources, makes operating decisions, and evaluates operating performance.

The Company conducts its business as one operating and reportable segment that designs, manufactures, and markets in-ground swimming pools, liners, and covers. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information presented on a consolidated basis for purposes of assessing financial performance and allocating resources.

Income Taxes

The Company accounts for income taxes using the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities, using enacted tax rates expected to be applicable in the years in which the temporary differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company evaluates the realizability of its deferred tax assets and establishes a valuation allowance when it is more likely than not that all or a portion of the deferred tax assets will not be realized. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected, scheduling of anticipated reversals of taxable temporary differences, and considering prudent and feasible tax planning strategies. If in future periods the Company were to determine that it would be able to realize its deferred tax assets in excess of the net recorded amount, an adjustment to the deferred tax assets, particularly a release of the valuation allowance, would increase income in the period such determination was made.

The Company records liabilities for uncertain income tax positions based on a two-step process. The first step is recognition, where an individual tax position is evaluated as to whether it has a likelihood of greater than 50% of being sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation processes. For tax positions that are currently estimated to have less than a 50% likelihood of being sustained, no tax benefit is recorded. For tax positions that have met the recognition threshold in the first step, the Company performs the second step of measuring the benefit to be recorded. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized on ultimate settlement. The actual benefits ultimately realized may differ from the estimates. In future periods, changes in facts, circumstances, and new information may require the Company to change the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recorded in income tax expense (benefit) and liability in the period in which such changes occur.

The Company’s policy is to classify interest and penalties related to unrecognized tax benefits as a component of income tax expense (benefit) within the consolidated statements of operations. The Company had $0.0 million of accrued interest and no accrued penalties as of December 31, 2023. The Company had $0.6 million of accrued interest and no accrued penalties as of December 31, 2022. The Company reinvests earnings of foreign operations indefinitely and, accordingly, does not provide for income taxes that could result from the remittance of such earnings.

Stock-Based Compensation

Stock-based compensation is measured and recognized based on the grant date fair value of the awards. The fair value of the Company’s common stock is determined based on the quoted market price of the Company’s common stock for purposes of computing stock-based compensation expense. For stock options, the Company uses a Black-Scholes model for estimating the grant date fair value. The Black-Scholes pricing model requires critical assumptions including risk-free rate, volatility, expected term and expected dividend yield. The expected term is computed using the simplified method. The Company uses the simplified method to calculate expected term of the stock options as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues similar in duration to the expected term of the stock-based award. The Company considers the historical volatility of the Company’s stock price, as well as its implied volatility. The Company utilized a dividend yield of zero, since it has no history or plan of declaring

dividends on its common stock. The assumptions underlying these valuations represented the Company’s best estimate, which involved inherent uncertainties and the application of judgment. As a result, if the Company had used significantly different assumptions or estimates, the fair value of the Company’s stock-based compensation expense could have been materially different.

For stock options, restricted stock awards, restricted stock units and stock appreciation rights, stock-based compensation is recognized using a graded vesting method over the requisite service period in which employees earn the awards. The Company accounts for forfeitures of stock-based awards as they occur rather than applying an estimated forfeiture rate to stock-based compensation expense.

Employee Benefit Plans

The Company has various retirement savings plans covering substantially all employees of the Company. These plans allow eligible employees to make discretionary contributions. The Company makes discretionary matching and other contributions depending on the plan and recognized expense of $1.4 million, $1.7 million, and $2.0 million related to such plans during the years ended December 31, 2023, 2022 and 2021, respectively.

Foreign Currency Translation and Foreign Currency Transactions

The financial statements of the Company’s foreign operations are denominated in local currency and are then translated to U.S. dollars. Assets and liabilities are translated using the current rate of exchange at the balance sheet dates or historical rates of exchange, as applicable. Revenue and expenses are translated using the average monthly exchange rates prevailing throughout the reporting period. The related foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Transaction gains and losses associated with the Company’s international subsidiaries, which are denominated in currencies other than the Company’s foreign entities’ functional currencies, are recognized as a component of other expense (income), net within the consolidated statements of operations.

Advertising Costs

Advertising costs, consisting of costs related to dealer conferences and commercials, are expensed as incurred and are included in selling, general, and administrative expense on the consolidated statements of operations. Total advertising costs were $9.2 million, $9.8 million, and $7.6 million during the years ended December 31, 2023, 2022 and 2021, respectively.

Comprehensive Income (Loss)

Comprehensive income (loss) is a measure of net income (loss) and all other changes in equity that result from transactions other than with equity holders and would normally be recorded in the consolidated statements of stockholders’ equity and the consolidated statements of comprehensive income. Other comprehensive income (loss) consists of foreign currency translation adjustments and defined benefit plan adjustments.

Income tax (benefit) expense on the components of other comprehensive income (loss) was not significant for the years ended December 31, 2023, 2022 and 2021.

Earnings Per Share

Basic net income (loss) per share is calculated by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted net income (loss) per share is calculated by dividing net income (loss) available to common stockholders by the diluted weighted-average number of shares of common stock outstanding for the period. Potentially dilutive shares are included in the diluted per-share calculations when the effect of their inclusion is dilutive. In periods where the Company reports a net loss, the effect of anti-dilutive stock options, restricted stock awards, restricted stock units and stock appreciation rights are excluded and diluted loss per share is equal to basic loss per share.

Treasury Stock

The Company accounts for treasury stock acquisitions using the cost method. The Company accounts for the retirement of treasury stock by deducting its par value from common stock and reflecting any excess of cost over par value as a deduction from additional paid-in capital on the consolidated balance sheets.

Recently Issued Accounting Pronouncements

The Company qualifies as “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected to “opt in” to the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and nonpublic companies, the Company will adopt the new or revised standard at the time nonpublic companies adopt the new or revised standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments — Credit Losses, which narrowed the scope and changed the effective date for nonpublic entities for ASU 2016-13. The FASB subsequently issued supplemental guidance within ASU 2019-05, Financial Instruments — Credit Losses (Topic 326): Targeted Transition Relief (“ASU 2019-05”). ASU 2019-05 provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For public entities that are SEC filers, excluding entities eligible to be smaller reporting companies, ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, ASU 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. The adoption of this standard on January 1, 2023 did not have a material impact on the Company’s consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which amends ASC 805 by requiring acquiring entities to apply ASC 606 to recognize and measure contract assets and contract liabilities in a business combination. For public entities, ASU 2021-08 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2022. For all other entities, ASU 2021-08 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023. The amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments, with early adoption permitted. The Company adopted this standard early on January 1, 2023 and it did not have a material impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which improves financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful analysis. For all entities, ASU 2023-07 is effective for fiscal years beginning after December 15, 2023. The amendments should be applied retrospectively to all prior periods presented in the financial statements, with early adoption permitted. The Company is currently evaluating ASU 2023-07 and its potential impact on the notes to the consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), in an effort to enhance the transparency and decision usefulness of income tax disclosures. For all entities, ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The

amendments should be applied prospectively with retrospective application permitted. Early adoption is also permitted. The Company is currently evaluating ASU 2023-09 and its potential impact on the notes to the consolidated financial statements.

STOCK-BASED COMPENSATION - Weighted average basis for fair value option award granted (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
PROFITS INTEREST UNITS
Risk-free interest rate	3.54%	2.06%	0.20%
Expected volatility	40.34%	39.68%	55.00%
Expected term (in years)	6 years 3 months	6 years 3 months	3 years 2 months 14 days
Expected dividend yield	0.00%	0.00%

EQUITY METHOD INVESTMENT

12 Months Ended

Dec. 31, 2023

EQUITY METHOD INVESTMENT

EQUITY METHOD INVESTMENT

4.EQUITY METHOD INVESTMENT

On October 30, 2020, the Company entered into a securities purchase agreement to purchase 28% of the common units of Premier Pools & Spas for $25.4 million. On August 6, 2021, the Company entered into a securities purchase agreement, together with Premier Holdco LLC, Premier Pools Management Corp. Holdco, Premier Franchise Management Holdco, PFC Holdco, and PPSF, LLC, pursuant to which Premier Group Holdings Inc., an affiliate of Wynnchurch Capital, L.P., acquired 29.8% of the common units of Premier Pools & Spas in aggregate from all sellers, including the Company. Sellers who were not related parties of Wynnchurch Capital, L.P. or the Company determined

the purchase price per common unit paid by Premier Group Holdings Inc., indicating the amount paid for the common units of Premier Pools & Spas reflects the price that would be paid in an arm’s-length transaction. As a result of the transaction, the Company received cash proceeds of $6.8 million and recorded a gain on the sale of equity method investment of $3.9 million, which was recorded within other (income) expense, net on the consolidated statements of operations for the year ended December 31, 2021. The Company’s post-sale ownership interest in Premier Pools & Spas was 20.1% following such transaction. On December 17, 2021, Premier Pools & Spas issued additional non-voting common units to Premier Group Holdings Inc. As a result of the transaction, the Company recorded a gain on the sale of equity method investment of $1.0 million. The Company’s ownership interest in Premier Pools & Spas after the issuance of additional non-voting common units is 18.2% while its’ voting interest remains 20.1%.

The Company historically has concluded that it held common stock of Premier Pools & Spas and had the ability to exercise significant influence over Premier Pools & Spas but did not have a controlling financial interest. As required when there is a change in facts or circumstances, the Company reassessed its ability to exercise significant influence during the quarter ended December 31, 2022. The Company concluded that it no longer had the ability to exercise significant influence. However, the Company also considered that it has an ownership interest of greater than 5% in Premier Pools & Spas, which is a limited liability company with specific ownership accounts. Accordingly, because of the legal form of the investee, the Company continues to account for this investment using the equity method of accounting since it is not required to demonstrate the ability to exercise significant influence under the relevant guidance. The Company’s proportionate share of the earnings or losses of the investee are reported as a separate line in the consolidated statements of operations.

Premier Pools & Spas is a holding company for its manufacturing and franchising companies including PFC LLC, Premier Franchise Management LLC, Premier Pools Management LLC, and Premier Fiberglass LLC (the “Premier Companies”). The Premier Companies are a leading swimming pool-building brand that uses its franchisee network to sell and install pools around the United States.

In connection with Latham’s investment in Premier Pools & Spas, the Company entered into an exclusive supply agreement with Premier Pools & Spas, the Premier Companies, and Premier Pools & Spas’ franchisees (“Premier Franchisees”) (together, the “Customer”). In February 2024, a new supply agreement was entered into with an effective date of January 1, 2024. Premier Pools & Spas does not consolidate the operations of the Premier Franchisees. Per the supply agreement, Latham is the exclusive supplier of the Premier Franchisees for specific pool and pool products. These products include fiberglass products and packaged pool products. The term of the supply agreement runs through October 20, 2030.

The Customer is entitled to a low-teens percentage rebate for all fiberglass pools sold and an additional growth rebate of a low single-digit to low-teens percentage based on year over year sales growth on fiberglass pools (the “Rebates”). The Rebates will be paid directly to Premier Pools Management Corp. Holdco, assuming the Premier Franchisees are in good standing with respect to amounts owed to the Company.

As of December 31, 2023 and 2022, the Company’s carrying amount for the equity method investment in Premier Pools & Spas was $25.9 million and $25.1 million, respectively. During the year ended December 31, 2023, Premier Pools & Spas paid the Company dividends of $2.9 million that are presented on the consolidated statement of cash flows as distribution received from equity method investment. During the year ended December 31, 2022, Premier Pools & Spas paid the Company dividends of $2.5 million that are presented on the consolidated statement of cash flows as distribution received from equity method. The Company recorded its interest in net earnings of Premier Pools & Spas of $3.7 million and $4.2 million for the years ended December 31, 2023 and 2022, respectively, which included basis difference adjustments of $0.2 million and $0.2 million, respectively.

GEOGRAPHIC INFORMATION - Geographic Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	$ 566,492	$ 695,736	$ 630,456
Property and equipment, net	113,014	98,184
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	475,024	558,827	491,870
Property and equipment, net	68,148	62,598
Canada
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	58,443	91,579	98,662
Property and equipment, net	39,469	29,638
Australia
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	22,534	25,827	25,216
Property and equipment, net	3,980	4,173
New Zealand
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	6,030	9,346	8,055
Property and equipment, net	1,417	1,775
Other
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	$ 4,461	$ 10,157	$ 6,653

- Definition

+ References

+ Details

SHAREHOLDER'S EQUITY (Details) $ / shares in Units, $ in Thousands						12 Months Ended
	May 10, 2022 USD ($)	Jan. 11, 2022 USD ($) $ / shares shares	Apr. 27, 2021 shares	Apr. 22, 2021 $ / shares shares	Apr. 13, 2021 $ / shares	Dec. 31, 2023 USD ($) $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) shares
Stock split ratio					109,673.709
Total authorized shares under certificate of incorporation				1,000,000,000
Common stock, par value \| $ / shares		$ 0.0001		$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001
Value of shares repurchased and retired \| $							$ 257,663	$ 281,638
Underwriting fees \| $							11,437
Class A Units
Number of units converted				194,207,115
Number of shares issued upon conversion of units				97,187,596
Class B Units
Number of units converted				26,158,894
Number of shares issued upon conversion of units				4,145,987
Number of restricted shares issued upon conversion of units				8,340,126
Repurchase Program
Value of shares repurchased and retired \| $							$ 23,038
Amount authorized \| $	$ 100,000
Term of repurchase program	3 years
Amount remaining for repurchases \| $						$ 77,000
IPO
Proceeds from sale of common stock (in shares)			23,000,000
Underwriters Option
Proceeds from sale of common stock (in shares)			3,000,000
Common Stock
Proceeds from sale of common stock (in shares)		13,800,000					13,800,000	23,000,000
Number of shares issued upon conversion of units								4,145,987
Offering price per share \| $ / shares		$ 19.50
Value of shares repurchased and retired \| $		$ 257,700					$ 1	$ 3
Underwriting fees \| $		$ 11,400
Number of shares repurchased and retired during the period		13,800,000					13,800,244	33,931,091
Common Stock \| Repurchase Program
Value of shares repurchased and retired \| $							$ 1
Number of shares repurchased and retired during the period						0	4,483,620
Common Stock \| Underwriters Option
Proceeds from sale of common stock (in shares)		1,800,000

SHAREHOLDER'S EQUITY

12 Months Ended

Dec. 31, 2023

STOCKHOLDER'S EQUITY

SHAREHOLDER'S EQUITY

19.SHAREHOLDER’S EQUITY

Equity Structure

On April 13, 2021, the Company’s certificate of incorporation was amended and restated. Under the amended and restated certificate of incorporation, the Company has authority to issue 500,000,000 shares of common stock, par value $0.0001 per share. On April 12, 2021, the Company’s Board of Directors declared and on April 13, 2021, the Company effected a 109,673.709-for-one stock split of its issued and outstanding shares of common stock.

As a part of the equity Reorganization, on April 22, 2021, 194,207,115 Class A units of the Parent converted into 97,187,596 shares of common stock and 26,158,894 Class B units of the Parent converted into 4,145,987 shares of common stock and 8,340,126 shares of unvested restricted stock.

Amendment and Restatement of Certificate of Incorporation

On April 22, 2021, the Company’s certificate of incorporation was further amended and restated to, among other things, increase the authorized shares to 1,000,000,000, of which 900,000,000 are shares of common stock, par value $0.0001 per share, and 100,000,000 are shares of preferred stock, par value 0.0001 per share.

Offering of Common Stock

On January 11, 2022, the Company completed an offering of 13,800,000 shares of common stock, par value $0.0001 per share, including the exercise in full by the underwriters of their option to purchase up to 1,800,000 additional shares of common stock, at a public offering price of $19.50 per share. The Company received proceeds of $257.7 million from this offering, net of $11.4 million of underwriting fees. The proceeds of $257.7 million were used to purchase 13,800,000 shares of common stock from certain of the Company’s stockholders, primarily investment funds managed by Pamplona Capital Management (the “Sponsor”) and Wynnchurch Capital, L.P., and also a small percentage of shares of common stock owned by some of the Company’s directors and executive officers.

Repurchase Program

On May 10, 2022, the Board of Directors of the Company approved a stock repurchase program (the “Repurchase Program”), which authorizes the Company to repurchase up to $100 million of the Company’s shares of common stock over the next three years. The Company may effect these repurchases in open market transactions, privately negotiated purchases, or other acquisitions. The Company is not obligated to repurchase any of its shares of its common stock under the Repurchase Program and the timing and amount of any repurchases will depend on market conditions, the Company’s stock price, alternative uses of capital, the terms of the Company’s debt instruments, and other factors.

During the year ended December 31, 2022, the Company repurchased and concurrently retired 4,483,620 shares of the Company’s common stock for an aggregate amount of $23.0 million, pursuant to the Repurchase Program. All of the shares were repurchased under a Rule 10b5-1 trading plan. No shares were repurchased during the year ended December 31, 2023. As of December 31, 2023, $77.0 million remained available under our Repurchase Program.

As of and December 31, 2023 and 2022, 114,828,896 and 112,091,756 shares of common stock were issued and outstanding for accounting purposes, respectively.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 505
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481004/946-505-50-6

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480237/815-40-50-6

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480008/505-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 505
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Name Accounting Standards Codification
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

+ Details

ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2023

Business Acquisition [Line Items]

Schedule of pro forma financial information




(in thousands)	2021
Net sales	$	662,282
Net loss	$	(50,382)

Trojan Leisure Products, LLC d/b/a Radiant Pools

Business Acquisition [Line Items]

Summary of purchase price allocation

The following summarizes the purchase price allocation for the Company’s acquisition of Radiant:


(in thousands)	November 24, 2021
Total consideration	$	91,109
Allocation of purchase price:
Cash		217
Trade receivables		2,805
Inventories		5,528
Prepaid expenses and other current assets		396
Property and equipment		1,263
Intangible assets		72,500
Total assets acquired		82,709
Accounts payable		1,744
Accrued expenses and other current liabilities		1,038
Deferred income tax liabilities		2,920
Total liabilities assumed		5,702
Total fair value of net assets acquired, excluding goodwill		77,007
Goodwill	$	14,102

Schedule of purchase price to specific intangible asset categories

The Company allocated a portion of the purchase price to specific intangible asset categories as follows:


	Fair Value		Amortization
Definite-lived intangible assets:	(in thousands)		Period
Dealer relationships	$	37,000	13 years
Trade names		13,000	25 years
Technology		13,000	15 years
Pool designs		7,900	15 years
Order backlog		1,600	10 months
	$	72,500

Schedule of net sales and net loss from acquiree included in the Company's results from the Acquisition Date

The following are the net sales and net income from Radiant included in the Company’s results from the Radiant Acquisition Date through December 31, 2021:


	Year Ended
(in thousands)	December 31, 2021
Net sales	$	2,211
Net income	$	3

NET LOSS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Numerator:
Net income (loss) attributable to common stockholders	$ (2,388)	$ (5,694)	$ (62,348)
Weighted-average common shares outstanding
Basic	112,899,586	113,245,421	110,644,366
Diluted	112,899,586	113,245,421	110,644,366
Net loss per share attributable to common stockholders:
Basic	$ (0.02)	$ (0.05)	$ (0.56)
Diluted	$ (0.02)	$ (0.05)	$ (0.56)
Common stock issued and outstanding for accounting purposes	114,828,896	112,091,756
Restricted stock awards
Net loss per share attributable to common stockholders:
Potentially dilutive securities outstanding	697,822	1,904,037	5,909,089
Restricted stock units
Net loss per share attributable to common stockholders:
Potentially dilutive securities outstanding	188,548	202,622	106,917
Employee Stock Option
Net loss per share attributable to common stockholders:
Potentially dilutive securities outstanding	1,702,316	1,757,336	39
Stock appreciation rights
Net loss per share attributable to common stockholders:
Potentially dilutive securities outstanding	491,386

Pay vs Performance Disclosure - USD ($) $ in Thousands	12 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Pay vs Performance Disclosure
Net Income (Loss)	$ (2,388)	$ (5,694)	$ (62,348)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

COMPOSITION OF CERTAIN BALANCE SHEET ACCOUNTS - Bad Debts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Allowance for bad debt activity roll forward
Balance at the beginning of the year	$ 3,161	$ 2,393	$ 1,438
Bad debt expense	5,379	2,011	979
Write-offs, net of recoveries	(996)	(1,243)	(24)
Balance at the end of the year	$ 7,544	$ 3,161	$ 2,393

PROFITS INTEREST UNITS - Number of PIUs and Weighted-Average Grant-Date Fair Value (Details)	12 Months Ended
	Dec. 31, 2021 $ / shares shares
Number of PIUs
Balance at beginning \| shares	27,424,962
Forfeited \| shares	(1,266,068)
Converted at IPO in connection with the Reorganization \| shares	(26,158,894)
Weighted-Average Grant Date Fair Value
Balance at beginning \| $ / shares	$ 0.43
Forfeited \| $ / shares	0.34
Converted at IPO in connection with the Reorganization \| $ / shares	$ 0.43

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

INCOME TAXES

Schedule of domestic and foreign components of its income (loss) before income taxes


	Year Ended
	December 31,
	2023		2022		2021
(Loss) income before income taxes:
Domestic	$	(16,303)	$	2,574	$	(68,261)
Foreign		6,243		11,147		14,731
Total	$	(10,060)	$	13,721	$	(53,530)

Schedule of current and deferred income tax (benefit) expense

Current and deferred income tax (benefit) expense is composed of the following (in thousands):


	Year Ended
	December 31,
	2023		2022		2021
Current income tax expense:
Domestic	$	1,225	$	22,133	$	19,855
Foreign		788		1,084		991
Total current tax expense		2,013		23,217		20,846
Deferred income tax (benefit) expense:
Domestic		(9,965)		(6,020)		(1,912)
Foreign		280		2,218		(10,116)
Total deferred tax (benefit)		(9,685)		(3,802)		(12,028)
Total income tax (benefit) expense	$	(7,672)	$	19,415	$	8,818

Schedule of reconciliation of statutory federal income tax rate with Company's effective income tax rate

The reconciliation of the statutory federal income tax rate with the Company’s effective income tax rate is as follows (% of (Loss) Income Before Income Taxes):


	Year Ended		Year Ended		Year Ended
	December 31, 2023		December 31, 2022		December 31, 2021
Federal statutory tax rate	21.0	%	21.0	%	21.0	%
Foreign rate differential	(5.6)	%	4.1	%	(1.4)	%
State income tax, net of federal benefit	14.0	%	14.0	%	(3.3)	%
Uncertain tax positions	101.7	%	2.1	%	(0.3)	%
Change in valuation allowance	(30.9)	%	—	%	23.8	%
GILTI (FDII)	(3.7)	%	(4.0)	%	0.8	%
Meals and entertainment	(3.1)	%	0.7	%	(0.2)	%
Foreign expenses not deductible for tax	(3.7)	%	3.2	%	(0.8)	%
Transaction costs not deductible for tax	—	%	18.8	%	(0.2)	%
Other non-deductible expense	(6.8)	%	—	%	—	%
Nondeductible stock compensation	(24.1)	%	67.3	%	(48.0)	%
Stock compensation shortfall (windfall)	(1.5)	%	1.2	%	—	%
Other compensation	(4.6)	%	—	%	(0.9)	%
Canadian branch income	1.3	%	8.8	%	(9.1)	%
Foreign tax restructuring	21.3	%	—	%	—	%
Other permanent items	0.9	%	4.3	%	2.1	%
	76.2	%	141.5	%	(16.5)	%

Schedule of changes in valuation allowance

The following table summarizes changes in the valuation allowance (in thousands):


	Year Ended
	December 31,
	2023		2022		2021
Balance at January 1	$	—	$	—	$	(12,704)
Additions		3,114		—		—
Deductions		—		—		12,704
Balance at December 31	$	3,114	$	—	$	—

Schedule of deferred income tax assets and liabilities

Deferred income tax assets and liabilities recorded on the balance sheets as of December 31, 2023 and 2022 consist of the following (in thousands):


	December 31,
	2023		2022
Deferred tax assets:
Net operating loss carryforwards	$	6,715	$	7,267
Capital loss carryforwards		3,114		—
Inventories, net		3,234		2,663
Warranty reserve		595		783
Trade receivables		1,737		719
Profits interest units		2,581		1,885
Section 163(j)		2,345		—
Accrued expenses		509		352
Transaction costs		1,052		1,211
Future branch taxes		(1,691)		(1,820)
Other		2,082		1,335
Gross deferred tax assets		22,273		14,395
Valuation allowance		(3,114)		—
Total deferred tax asset		19,159		14,395
Less: Foreign deferred tax benefit		(7,485)		(7,762)
Total domestic deferred tax asset		11,674		6,633
Deferred tax liabilities:
Intangible assets		(45,150)		(49,257)
Property and equipment, net		(5,656)		(6,078)
Prepaid expenses and other		(644)		(1,161)
Investments in partnerships		(312)		(318)
Total deferred tax liabilities		(51,762)		(56,814)
Net deferred tax liabilities	$	(40,088)	$	(50,181)

Schedule of reconciliation of beginning and ending amount of uncertain tax positions

The following is a reconciliation of the beginning and ending amount of uncertain tax positions (in thousands):


	Year Ended
	December 31,
	2023		2022
Balance at the beginning of the year	$	10,303	$	10,011
Gross amounts of increases and decreases in unrecognized tax benefits as a result of tax positions taken during a prior period		379		—
Gross amounts of increases and decreases in unrecognized tax benefits as a result of tax positions taken during the current period		—		—
The amounts of decreases in the unrecognized tax benefits relating to settlements with taxing authorities		—		292
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations		(10,682)		—
Balance at the end of the year	$	—	$	10,303

COMPOSITION OF CERTAIN BALANCE SHEET ACCOUNTS

12 Months Ended

Dec. 31, 2023

COMPOSITION OF CERTAIN BALANCE SHEET ACCOUNTS

COMPOSITION OF CERTAIN BALANCE SHEET ACCOUNTS

10.COMPOSITION OF CERTAIN BALANCE SHEET ACCOUNTS

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	December 31,
	2023		2022
Accrued sales rebates	$	10,170	$	16,705
Accrued product warranties		2,889		3,763
Accrued incentives		1,270		2,727
Accrued vacation		2,310		2,422
Accrued payroll		4,893		5,750
Accrued interest		2,955		2,868
Income taxes payable		1,682		923
Deferred revenue		3,787		4,480
Other accrued expenses		10,735		11,247
Total accrued expenses and other current liabilities	$	40,691	$	50,885

Allowance for Bad Debt

The allowance for bad debt consisted of the following (in thousands):


	Year Ended
	December 31,
	2023		2022		2021
Balance at the beginning of the year	$	3,161	$	2,393	$	1,438
Bad debt expense		5,379		2,011		979
Write-offs, net of recoveries		(996)		(1,243)		(24)
Balance at the end of the year	$	7,544	$	3,161	$	2,393

CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) - Condensed Statements of Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Condensed Statement of Income Captions [Line Items]
Net Income (Loss)	$ (2,388)	$ (5,694)	$ (62,348)
Equity in other comprehensive (loss) income of subsidiary	(6)	(3,903)	(1,984)
Comprehensive loss	(2,394)	(9,597)	(64,332)
Parent
Condensed Statement of Income Captions [Line Items]
Net Income (Loss)	(2,388)	(5,694)	(62,348)
Equity in other comprehensive (loss) income of subsidiary	(6)	(3,903)	(1,984)
Comprehensive loss	$ (2,394)	$ (9,597)	$ (64,332)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

INCOME TAXES - Current and deferred income tax (benefit) expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Current income tax expense:
Domestic	$ 1,225	$ 22,133	$ 19,855
Foreign	788	1,084	991
Total current tax expense	2,013	23,217	20,846
Deferred income tax (benefit) expense:
Domestic	(9,965)	(6,020)	(1,912)
Foreign	280	2,218	(10,116)
Total deferred tax (benefit)	(9,685)	(3,802)	(12,028)
Total income tax (benefit) expense	$ (7,672)	$ 19,415	$ 8,818

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

NET SALES (Tables)

12 Months Ended

Dec. 31, 2023

NET SALES.

Summary of disaggregation of net sales by product line

The following table sets forth the Company’s disaggregation of net sales by product line (in thousands):


	Year Ended
	December 31,
	2023		2022		2021
In-ground Swimming Pools	$	297,828	$	385,467	$	368,465
Covers		140,949		158,449		132,126
Liners		127,715		151,820		129,865
	$	566,492	$	695,736	$	630,456

ACQUISITIONS - Consideration (Details) $ in Millions	Nov. 24, 2021 USD ($)
Trojan Leisure Products, LLC d/b/a Radiant Pools
Business Combination, Consideration Transferred [Abstract]
Total consideration	$ 90.7

LONG-TERM DEBT - Principal payments due (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Principal payments due
2024	$ 21,250
2025	3,250
2026	3,250
2027	3,250
2028	3,250
Thereafter	275,063
Total payments due	$ 309,313

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current assets:
Cash	$ 102,763	$ 32,626
Trade receivables, net	30,407	48,847
Inventories, net	97,137	165,220
Income tax receivable	983	2,316
Prepaid expenses and other current assets	7,327	5,998
Total current assets	238,617	255,007
Property and equipment, net	113,014	98,184
Equity method investment	25,940	25,095
Deferred tax assets	7,485	7,762
Operating lease right-of-use assets	30,788	38,308
Goodwill	131,363	131,383
Intangible assets, net	282,793	309,215
Other assets	5,003	4,729
Total assets	835,003	869,683
Current liabilities:
Current maturities of long-term debt	21,250	3,250
Current operating lease liabilities	7,133	6,923
Accrued expenses and other current liabilities	40,691	50,885
Total current liabilities	86,206	86,865
Long-term debt, net of discount, debt issuance costs, and current portion	279,951	309,631
Deferred income tax liabilities, net	40,088	50,181
Liability for uncertain tax positions		7,123
Non-current operating lease liabilities	24,787	32,391
Other long-term liabilities	4,771	702
Total liabilities	435,803	486,893
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.0001 par value; 100,000,000 shares authorized as of both December 31, 2023 and December 31, 2022; no shares issued and outstanding as of both December 31, 2023 and December 31, 2022	0	0
Common stock, $0.0001 par value; 900,000,000 shares authorized as of December 31, 2023 and December 31, 2022; 114,871,782 and 114,667,975 shares issued and outstanding, as of December 31, 2023 and December 31, 2022, respectively	11	11
Additional paid-in capital	459,684	440,880
Accumulated deficit	(56,956)	(54,568)
Accumulated other comprehensive loss	(3,539)	(3,533)
Total stockholders' equity	399,200	382,790
Total liabilities and stockholders' equity	835,003	869,683
Related Party
Current liabilities:
Accounts payable	8	358
Nonrelated Party
Current liabilities:
Accounts payable	$ 17,124	$ 25,449

PRODUCT WARRANTIES

12 Months Ended

Dec. 31, 2023

PRODUCT WARRANTIES

PRODUCT WARRANTIES

11.PRODUCT WARRANTIES

The warranty reserve activity consisted of the following (in thousands):


	Year Ended
	December 31,
	2023		2022		2021
Balance at the beginning of the fiscal year	$	3,990	$	4,909	$	2,882
Adjustments to reserve		5,319		4,567		8,824
Warranty liabilities assumed in Radiant Acquisition		—		—		50
Less: Settlements made (in cash or in kind)		(6,148)		(5,486)		(6,847)
Balance at the end of the fiscal year	$	3,161	$	3,990	$	4,909

EXIT OR DISPOSAL COSTS (Details) - USD ($) $ in Millions	12 Months Ended
EXIT OR DISPOSAL COSTS (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
November 2022 Cost Reduction Plan
Restructuring Cost and Reserve [Line Items]
Exit or disposal costs recognized	$ 0.5	$ 1.6
2023 Additional Cost Reduction Plan
Restructuring Cost and Reserve [Line Items]
Exit or disposal costs recognized	2.8
2023 Additional Cost Reduction Plan \| Fixed asset and facility related expenses
Restructuring Cost and Reserve [Line Items]
Exit or disposal costs recognized	1.7
2023 Additional Cost Reduction Plan \| Severance and related costs
Restructuring Cost and Reserve [Line Items]
Exit or disposal costs recognized	$ 1.1

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

GOODWILL AND INTANGIBLE ASSETS, NET - Amortization Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2024	$ 25,709
2025	25,551
2026	25,551
2027	25,551
2028	24,593
Thereafter	155,838
Net Amount	$ 282,793	$ 309,215

STOCK-BASED COMPENSATION - Restricted Stock Awards (Details) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2021
Shares
Balance at beginning		27,424,962
Forfeited		(1,266,068)
Weighted-Average Grant Date Fair Value
Balance at beginning		$ 0.43
Forfeited		$ 0.34
Restricted stock awards
Shares
Balance at beginning	2,576,219
Vested	(2,377,883)
Forfeited	(155,450)
Balance at ending	42,886
Weighted-Average Grant Date Fair Value
Balance at beginning	$ 19.00
Vested	19.00
Forfeited	19.00
Balance at ending	$ 19.00

INCOME TAXES - Reconciliation of the statutory tax rate with effective tax rate (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
INCOME TAXES
Federal statutory tax rate	21.00%	21.00%	21.00%
Foreign rate differential	(5.60%)	4.10%	(1.40%)
State income tax, net of federal benefit	14.00%	14.00%	(3.30%)
Uncertain tax positions	101.70%	2.10%	(0.30%)
Change in valuation allowance	(30.90%)		23.80%
GILTI (FDII)	(3.70%)	(4.00%)	0.80%
Meals and entertainment	(3.10%)	0.70%	(0.20%)
Foreign expenses not deductible for tax	(3.70%)	3.20%	(0.80%)
Transaction costs not deductible for tax		18.80%	(0.20%)
Other non-deductible expense	(6.80%)
Nondeductible stock compensation	(24.10%)	67.30%	(48.00%)
Stock compensation shortfall (windfall)	(1.50%)	1.20%
Other compensation	(4.60%)		(0.90%)
Canadian branch income	1.30%	8.80%	(9.10%)
Foreign tax restructuring	21.30%
Other permanent items	0.90%	4.30%	2.10%
Total	76.20%	141.50%	(16.50%)

STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2023

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

18.STOCK-BASED COMPENSATION

On April 12, 2021, the Company’s stockholders approved the 2021 Omnibus Equity Incentive Plan (the “2021 Omnibus Equity Plan”), which became effective on April 22, 2021, upon pricing of its initial public offering. The 2021 Omnibus Equity Plan provides for the issuance of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based and cash-based awards. The maximum grant date fair value of cash and equity awards that may be awarded to a non-employee director under the 2021 Omnibus Equity Plan during any one fiscal year, together with any cash fees paid to such non-employee director during such fiscal year, is $750,000.

On May 2, 2023, at the 2023 annual meeting of stockholders the Company, the stockholders approved the first amendment (the “Equity Plan First Amendment”) to the Latham Group, Inc. 2021 Omnibus Equity Plan, which was previously approved by the Board of Directors of the Company. The Equity Plan First Amendment became effective upon stockholder approval, and provides for (i) an increase by 8,000,000 shares of the share pool, i.e. the maximum number of shares of the Company’s common stock that may be issued pursuant to awards granted under the 2021 Omnibus Equity Plan, (ii) a prohibition on recycling of shares withheld or remitted to pay taxes for all awards, (iii) a minimum vesting period of one year for all awards, with an exception for shares representing 5% of the share pool, and (iv) a prohibition on the transfer of stock options and stock appreciation rights for value or to third-party financial institutions without stockholder approval.

Except as amended by the Equity Plan First Amendment, the other terms of the 2021 Omnibus Equity Plan remain in full force and effect. Subsequent to the Equity Plan First Amendment, the maximum aggregate number of shares reserved for issuance under the 2021 Omnibus Equity Plan is 21,170,212 shares. The following table summarizes the Company’s stock-based compensation expense (in thousands):


	Year Ended
	December 31,
	2023		2022		2021
Cost of sales	$	81	$	3,762	$	8,697
Selling, general, and administrative		18,723		46,872		120,078
	$	18,804	$	50,634	$	128,775

The recognized income tax benefit related to stock-based compensation was $0.5 million for the year ended December 31, 2023. The recognized income tax benefit related to stock-based compensation was $0.8 million for the year ended December 31, 2022. The recognized income tax benefit related to stock-based compensation was $0.1 million for the year ended December 31, 2021. As of December 31, 2023, total unrecognized stock-based compensation expense related to all unvested stock-based awards was $7.4 million, which is expected to be recognized over a weighted-average period of 1.53 years.


	Year Ended
	December 31, 2023
Risk-free interest rate	3.54	%
Expected volatility	40.34	%
Expected term (in years)	6.25
Expected dividend yield	0.00	%

The following table sets forth the significant assumptions used in the Black-Scholes option-pricing model on a weighted-average basis to determine the fair value of option awards granted:


	Year Ended
	December 31, 2022
Risk-free interest rate	2.06	%
Expected volatility	39.68	%
Expected term (in years)	6.25
Expected dividend yield	0.00	%

No stock options were granted under this plan during the year ended December 31, 2023.

Restricted Stock Awards

The following table represents the Company’s restricted stock awards activity during the year ended December 31, 2023:


		Weighted-
		Average Grant-
	Shares	Date Fair Value
Outstanding at January 1, 2023	2,576,219	$	19.00
Granted	—		—
Vested	(2,377,883)		19.00
Forfeited	(155,450)		19.00
Outstanding at December 31, 2023	42,886	$	19.00

Restricted Stock Units

The following table represents the Company’s restricted stock units activity during the year ended December 31, 2023:


		Weighted-
		Average Grant-
	Shares	Date Fair Value
Outstanding at January 1, 2023	617,941	$	8.37
Granted	2,345,746		3.18
Vested	(465,863)		7.63
Forfeited	(262,345)		3.90
Outstanding at December 31, 2023	2,235,479	$	3.60

Stock Options

The following table represents the Company’s stock option activity during the year ended December 31, 2023:


			Weighted-	Weighted-
			Average	Average
		Exercise Price		Remaining	Aggregate
	Shares	per Share		Contract Term	Intrinsic Value
				(in years)	(in thousands)
Outstanding at January 1, 2023	1,914,670	$	14.85
Granted	—		—
Exercised	—		—
Forfeited	(311,344)		11.37
Expired	(82,922)		17.75
Outstanding at December 31, 2023	1,520,404	$	15.40	7.94	$	—
Vested and expected to vest at December 31, 2023	1,520,404	$	15.40	7.94	$	—
Options exercisable at December 31, 2023	521,173	$	16.38	7.77	$	—

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock.

No stock options were granted during the year ended December 31, 2023. The weighted average grant-date fair value of stock options granted during the year ended December 31, 2022 was $5.53 per share.

Stock Appreciation Rights

During the quarter ended April 1, 2023, as a portion of the annual equity award grants to the Company’s executive officers, the Compensation Committee of the Board of Directors approved stock appreciation rights for an aggregate of 790,181 shares of the Company’s common stock, with a strike price of $3.24 per share (the “Contingent Grants”). At the time of such approval, the Company did not have enough shares of the Company’s common stock in the share pool under the 2021 Omnibus Equity Plan to support such grant. As of April 1, 2023, the Contingent Grants remained subject to stockholder approval of the Equity Plan First Amendment. On May 2, 2023, following stockholder approval of the Equity Plan First Amendment, the foregoing stock appreciation right awards became effective without condition.

The following table represents the Company’s stock appreciation rights activity during the year ended December 31, 2023:


			Weighted-	Weighted-
			Average	Average
		Exercise Price		Remaining	Aggregate
	Shares	per Share		Contract Term	Intrinsic Value
				(in years)	(in thousands)
Outstanding at January 1, 2023	—	$	—
Granted	849,058		3.17
Exercised	—		—
Forfeited	(93,256)		3.24
Outstanding at December 31, 2023	755,802	$	3.16	9.37	$	24,729
Vested and expected to vest at December 31, 2023	755,802	$	3.16	9.37	$	24,729
Stock appreciation rights exercisable at December 31, 2023	—	$	—	—	$	—

The aggregate intrinsic value of stock appreciation rights is calculated as the difference between the strike price of the stock appreciation rights and the fair value of the Company’s common stock for those stock appreciation rights that had strike prices lower than the fair value of the Company’s common stock.

The weighted average grant-date fair value of stock appreciation rights granted during the year ended December 31, 2023 was $1.08 per share.

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock Repurchase Program	Common Stock	Additional Paid-in Capital Repurchase Program	Additional Paid-in Capital	(Accumulated Deficit) Retained Earnings Cumulative Effect, Period of Adoption, Adjustment	(Accumulated Deficit) Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Cumulative Effect, Period of Adoption, Adjustment	Repurchase Program	Total
Balance, beginning of period at Dec. 31, 2020		$ 12		$ 265,478		$ 13,765	$ 2,354			$ 281,609
Balance, beginning of period (in shares) at Dec. 31, 2020		118,854,249
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)						(62,348)				(62,348)
Foreign currency translation adjustments							(1,984)			(1,984)
Dividend to Class A unitholders				(110,033)						(110,033)
Issuance of restricted stock in connection with the Reorganization		$ 1		(1)
Issuance of restricted stock in connection with the Reorganization (in shares)		8,340,126
Issuance of common stock upon conversion of Class B units		4,145,987
Sale of common stock		$ 2		399,262						399,264
Sale of common stock (in shares)		23,000,000
Repurchase and retirement of common stock		$ (3)		(281,635)						(281,638)
Repurchase and retirement of common stock (in shares)		(33,931,091)
Retirement of restricted stock (in shares)		(1,014,976)
Issuance of common stock upon release of restricted stock units (in shares)		51,316
Stock-based compensation expense				128,775						128,775
Balance, end of period at Dec. 31, 2021		$ 12		401,846		(48,583)	370			353,645
Balance, end of period (in shares) at Dec. 31, 2021		119,445,611
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)						(5,694)				(5,694)
Foreign currency translation adjustments							(3,903)			(3,903)
Sale of common stock		$ 1		269,099						269,100
Sale of common stock (in shares)		13,800,000
Repurchase and retirement of common stock	$ (1)	$ (1)	$ (23,037)	(257,662)					$ (23,038)	(257,663)
Repurchase and retirement of common stock (in shares)	(4,483,620)	(13,800,244)
Retirement of restricted stock (in shares)		(480,385)
Issuance of common stock upon release of restricted stock units (in shares)		186,613
Stock-based compensation expense				50,634						50,634
Balance, end of period at Dec. 31, 2022		$ 11		440,880	$ (291)	(54,568)	(3,533)	$ (291)		382,790
Balance, end of period (in shares) at Dec. 31, 2022		114,667,975
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)						(2,388)				(2,388)
Foreign currency translation adjustments							(6)			(6)
Repurchase and retirement of common stock (in shares)	0
Retirement of restricted stock (in shares)		(155,450)
Issuance of common stock upon release of restricted stock units (in shares)		359,257
Stock-based compensation expense				18,804						18,804
Balance, end of period at Dec. 31, 2023		$ 11		$ 459,684		$ (56,956)	$ (3,539)			$ 399,200
Balance, end of period (in shares) at Dec. 31, 2023		114,871,782

INVENTORIES, NET (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
INVENTORIES, NET
Raw materials	$ 55,081	$ 95,388
Finished goods	42,056	69,832
Inventory, Net, Total	$ 97,137	$ 165,220

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Consolidated Statements of Operations
Net sales	$ 566,492	$ 695,736	$ 630,456
Cost of sales	413,548	479,267	426,294
Gross profit	152,944	216,469	204,162
Selling, general, and administrative expense	110,296	146,842	217,775
Underwriting fees related to offering of common stock		11,437
Amortization	26,519	28,180	22,566
Income (loss) from operations	16,129	30,010	(36,179)
Other expense:
Interest expense, net	30,916	15,753	24,433
Loss on extinguishment of debt		3,465
Other (income) expense, net	(1,004)	1,301	(4,860)
Total other expense, net	29,912	20,519	19,573
Earnings from equity method investment	3,723	4,230	2,222
(Loss) income before income taxes	(10,060)	13,721	(53,530)
Income tax (benefit) expense	(7,672)	19,415	8,818
Net loss	$ (2,388)	$ (5,694)	$ (62,348)
Net loss per share attributable to common stockholders:
Basic	$ (0.02)	$ (0.05)	$ (0.56)
Diluted	$ (0.02)	$ (0.05)	$ (0.56)
Weighted-average common shares outstanding - basic and diluted
Basic	112,899,586	113,245,421	110,644,366
Diluted	112,899,586	113,245,421	110,644,366

GOODWILL AND INTANGIBLE ASSETS, NET (Tables)

12 Months Ended

Dec. 31, 2023

GOODWILL AND INTANGIBLE ASSETS, NET

Schedule of changes in the carrying value of goodwill

The following table presents the changes in the carrying value of goodwill during the years ended December 31, 2023 and 2022 (in thousands):


	Amount
Balance as of December 31, 2021	$	128,871
Acquisition		2,753
Measurement period adjustment		384
Foreign currency translation adjustment		(625)
Balance as of December 31, 2022		131,383
Foreign currency translation adjustment		(20)
Balance as of December 31, 2023	$	131,363

Schedule of Intangible assets

Intangible assets, net as of December 31, 2023 consisted of the following (in thousands):


	December 31, 2023
	Gross		Foreign
	Carrying		Currency		Accumulated		Net
	Amount		Translation		Amortization		Amount
Trade names and trademarks	$	148,100	$	72	$	29,583	$	118,589
Patented technology		16,126		1		8,713		7,414
Technology		13,000		—		1,806		11,194
Pool designs		13,628		35		2,973		10,690
Franchise relationships		1,187		—		1,187		—
Dealer relationships		197,376		—		62,470		134,906
Order backlog		1,600		—		1,600		—
Non-competition agreements		2,476		—		2,476		—
	$	393,493	$	108	$	110,808	$	282,793

Intangible assets, net as of December 31, 2022 consisted of the following (in thousands):


	December 31, 2022
	Gross		Foreign
	Carrying		Currency		Accumulated		Net
	Amount		Translation		Amortization		Amount
Trade names and trademarks	$	148,100	$	(84)	$	22,982	$	125,034
Patented technology		16,126		37		6,959		9,204
Technology		13,000		—		939		12,061
Pool designs		13,628		(10)		2,037		11,581
Franchise relationships		1,187		45		1,064		168
Dealer relationships		197,376		13		46,699		150,690
Order backlog		1,600		—		1,600		—
Non-competition agreements		2,476		—		1,999		477
	$	393,493	$	1	$	84,279	$	309,215

Schedule of estimated amortization expense related to definite-lived intangible assets

The Company estimates that amortization expense related to definite-lived intangible assets will be as follows in each of the next five years and thereafter (in thousands):


	Estimated Future
	Amortization
Year Ended	Expense
2024	$	25,709
2025		25,551
2026		25,551
2027		25,551
2028		24,593
Thereafter		155,838
	$	282,793

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

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-Topic 350
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+ Details

NET SALES

12 Months Ended

Dec. 31, 2023

NET SALES.

NET SALES

14.NET SALES

The following table sets forth the Company’s disaggregation of net sales by product line (in thousands):


	Year Ended
	December 31,
	2023		2022		2021
In-ground Swimming Pools	$	297,828	$	385,467	$	368,465
Covers		140,949		158,449		132,126
Liners		127,715		151,820		129,865
	$	566,492	$	695,736	$	630,456

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

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-Subparagraph (c)
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-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org//606/tableOfContent

+ Details

PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 160,177	$ 130,033
Less: Accumulated depreciation	(47,163)	(31,849)
Property and equipment, net	113,014	98,184
Depreciation and amortization expense	13,800	10,000	$ 9,700
Loss on sales and disposal of Property and Equipment	300	200	$ 300
Land
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	2,758	1,811
Building and improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	38,994	9,946
Machinery and equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	49,257	31,765
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	2,061	1,585
Computer equipment and software
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	10,389	6,888
Molds and dyes
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	21,838	16,934
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	12,358	9,640
Vehicles
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	4,923	4,883
Construction in progress
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 17,599	$ 46,581

ACQUISITIONS

12 Months Ended

Dec. 31, 2023

ACQUISITION

ACQUISITIONS

3.ACQUISITIONS

Trojan Leisure Products, LLC d/b/a Radiant Pools

On November 24, 2021, Latham Pool Products acquired Trojan Leisure Products, LLC d/b/a Radiant Pools (“Radiant”) for a total purchase price of $90.7 million (the “Radiant Acquisition”). The results of Radiant’s operations have been included in the consolidated financial statements since that date. Radiant specializes in manufacturing proprietary vinyl liner aluminum swimming pools that can be built completely in-ground, semi-in-ground, or above ground. As a result, this acquisition expanded the Company’s product offerings. In connection with the Radiant Acquisition, consideration paid was $90.7 million in cash, or $90.5 million net of cash acquired of $0.2 million. The cash consideration was funded, in part, through long-term debt proceeds of $50.0 million. The Company incurred $2.9 million in transaction costs.

Subsequent to the acquisition date, there was an additional amount due to the seller of $0.4 million related to the finalization of the net working capital adjustment, which was accounted for as a measurement period adjustment. The measurement period adjustment resulted in an increase in the total consideration transferred of $0.4 million and an increase to goodwill of $0.4 million. The net working capital adjustment was paid during the quarter ended July 2, 2022.

The Company accounted for the Radiant Acquisition using the acquisition method of accounting in accordance with ASC 805. This requires that the assets acquired and liabilities assumed be measured at fair value. The Company estimated, using Level 3 inputs, the fair value of certain fixed assets using a combination of the cost approach and the market approach. Inventories were valued using the comparative sales method, less the cost of disposal. Specific to intangible assets, customer relationships and order backlog were valued using the multi-period excess earnings method, whereas trade names, technology, and pool designs were valued using the relief from royalty method. The Company recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date.

The following summarizes the purchase price allocation for the Company’s acquisition of Radiant:


(in thousands)	November 24, 2021
Total consideration	$	91,109
Allocation of purchase price:
Cash		217
Trade receivables		2,805
Inventories		5,528
Prepaid expenses and other current assets		396
Property and equipment		1,263
Intangible assets		72,500
Total assets acquired		82,709
Accounts payable		1,744
Accrued expenses and other current liabilities		1,038
Deferred income tax liabilities		2,920
Total liabilities assumed		5,702
Total fair value of net assets acquired, excluding goodwill		77,007
Goodwill	$	14,102

The excess of the purchase price over the fair value of the identifiable assets acquired and the liabilities assumed in the acquisition was allocated to goodwill in the amount of $14.1 million. Goodwill resulting from the Radiant Acquisition was attributable to the expanded market share and product offerings. Goodwill resulting from the Radiant Acquisition is deductible for tax purposes.

The Company allocated a portion of the purchase price to specific intangible asset categories as follows:


	Fair Value		Amortization
Definite-lived intangible assets:	(in thousands)		Period
Dealer relationships	$	37,000	13 years
Trade names		13,000	25 years
Technology		13,000	15 years
Pool designs		7,900	15 years
Order backlog		1,600	10 months
	$	72,500

The following are the net sales and net income from Radiant included in the Company’s results from the Radiant Acquisition Date through December 31, 2021:


	Year Ended
(in thousands)	December 31, 2021
Net sales	$	2,211
Net income	$	3

Other Business Combinations

During the quarter ended December 31, 2022, the Company completed the acquisition of certain fiberglass pool manufacturing assets in Seminole, Oklahoma that qualified as a business combination. This transaction resulted in an increase to goodwill, but was not material to our consolidated financial statements, and as a result, additional business combination disclosures for this acquisition have been omitted.

Pro Forma Financial Information (Unaudited)

The following pro forma financial information presents the statements of operations of the Company with Radiant as if the acquisition occurred on January 1, 2021. The pro forma results do not include any anticipated synergies, cost savings, or other expected benefits of an acquisition. The pro forma financial information is not necessarily indicative of what the financial results would have been had the acquisition been completed on January 1, 2021, and is not necessarily indicative of the Company’s future financial results.




(in thousands)	2021
Net sales	$	662,282
Net loss	$	(50,382)

The pro forma financial information presented above reflects the effects as a result of the acquisition, including the amortization expense from acquired intangible assets, the depreciation and amortization expense from acquired property and equipment, the additional cost of sales from acquired inventory, interest expense from debt financing, and any related tax effects. Transaction costs for Radiant are reflected within pro forma net loss for the year ended December 31, 2021.

LEASES - Lease expense (Details) - USD ($) $ in Thousands	12 Months Ended
LEASES - Lease expense (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
LEASES
Retained earnings	$ (56,956)	$ (54,568)
Components of lease expense:
Operating lease expense	9,350	9,085
Finance lease amortization of assets	679	48
Finance lease interest on lease liabilities	296	11
Short-term lease expense	319	156
Variable lease expense	1,180	573
Total lease expense	$ 11,824	$ 9,873

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

GOODWILL AND INTANGIBLE ASSETS, NET - Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
GOODWILL AND INTANGIBLE ASSETS, NET
Beginning balance	$ 131,383	$ 128,871
Acquisition		2,753
Measurement period adjustment		384
Foreign currency translation adjustment	(20)	(625)
Ending balance	$ 131,363	$ 131,383

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) - Additional information (Details) - USD ($) $ / shares in Units, $ in Thousands			12 Months Ended
	Jan. 11, 2022	Apr. 27, 2021	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Apr. 22, 2021	Apr. 13, 2021
Condensed Financial Statements, Captions [Line Items]
Common stock, par value	$ 0.0001		$ 0.0001	$ 0.0001		$ 0.0001	$ 0.0001
Proceeds from Issuance of Common Stock				$ 257,663
Underwriting fees				11,437
Value of shares issued during the period				269,100	$ 399,264
Net cash provided by financing activities			$ (13,875)	$ 3,775	60,018
IPO
Condensed Financial Statements, Captions [Line Items]
Sale of common stock (in shares)		23,000,000
Net proceeds from the IPO		$ 399,300
Underwriters Option
Condensed Financial Statements, Captions [Line Items]
Sale of common stock (in shares)		3,000,000
Parent
Condensed Financial Statements, Captions [Line Items]
Number of shares repurchased and retired during the period	13,800,000
Sale of common stock (in shares)	13,800,000
Common stock, par value	$ 0.0001		$ 0.0001	$ 0.0001
Proceeds from Issuance of Common Stock	$ 257,700			$ 257,663
Underwriting fees	$ 11,400
Net cash provided by financing activities				$ (23,038)	$ 117,626
Parent \| IPO
Condensed Financial Statements, Captions [Line Items]
Sale of common stock (in shares)		23,000,000
Net proceeds from the IPO		$ 399,300
Parent \| Underwriters Option
Condensed Financial Statements, Captions [Line Items]
Sale of common stock (in shares)	1,800,000	3,000,000
Offering price per share	$ 19.50
Parent \| Repurchase Program [Member]
Condensed Financial Statements, Captions [Line Items]
Number of shares repurchased and retired during the period				4,483,620
Net cash provided by financing activities				$ 23,000

EXIT OR DISPOSAL COSTS

12 Months Ended

Dec. 31, 2023

RESTRUCTURING COSTS

EXIT OR DISPOSAL COSTS

12.EXIT OR DISPOSAL COSTS

On November 8, 2022, the Company approved a plan to implement cost reduction programs and lean manufacturing initiatives the structurally reduce our cost basis. The plan involved the closure of the Company’s manufacturing facility in Bossier City, Louisiana, and a reduction to the Company’s workforce. The Company incurred charges for employee severance and related costs, as well as fixed asset and facility related expenses, of approximately $0.5 million and $1.6 million during the years ended December 31, 2023 and 2022, respectively.

During the second and third quarters of 2023, the Company initiated an additional plan focused on efforts to improve efficiencies and decrease costs. The plan involved a reduction in the Company’s workforce as well as closures

of various manufacturing facilities. During the year ended December 31, 2023, the Company recognized costs related to the plan totaling $2.8 million, comprised primarily of $1.1 million for severance and related costs and $1.7 million relating to the facility closures. These charges were included in cost of sales and selling, general, and administrative expenses in the consolidated statements of operations. The Company had an exit or disposal cost related liability of $0.2 million as of December 31, 2023 and no liability as of December 31, 2022.

PROFITS INTEREST UNITS

12 Months Ended

Dec. 31, 2023

PROFITS INTEREST UNITS

PROFITS INTEREST UNITS

17.PROFITS INTEREST UNITS

Prior to the Reorganization, the Company’s Parent granted profit interest units (“PIUs”) in the form of Class B units of the Parent to certain key employees and directors for purposes of retaining them and enabling such individuals to participate in the long-term growth and financial success of the Company. As part of the Reorganization, the vested and unvested PIUs of the Parent were converted on a pro rata basis into equivalent restricted stock units and restricted stock awards of the Company’s common stock. The following table summarizes the activity for all PIUs during the years ended December 31, 2021:


		Weighted-Average
		Grant-Date
	Number of PIUs	Fair Value
Balance at January 1, 2021	27,424,962	$	0.43
Forfeited	(1,266,068)		0.34
Converted at IPO in connection with the Reorganization	(26,158,894)		0.43
Balance at December 31, 2021	—	$	—

On January 29, 2021, an employee holder of PIUs terminated his employment with the Company, at which time all 1,055,057 of his performance-vesting units were forfeited. At the time of his termination, the employee held 527,528 of time-vesting units, of which 211,011 time-vesting units were vested. Per the terms of his termination agreement, the Company accelerated the vesting of an additional 105,506 time-vesting units, such that the total time-vesting units vested were equal to 316,517 upon his termination and the remaining 211,011 of unvested time-vesting units were forfeited upon his termination. As the employee’s profits interest units had not vested from an accounting perspective, the retention and immediate vesting of the retained time-vesting units was accounted for as a modification. A cumulative catch-up charge of $1.1 million was recorded during the quarter ended April 3, 2021 to reflect the incremental fair value of the awards as of the date of the modification, as compared to the grant-date fair value.

The Company used the following assumptions in conjunction with the Contingent Claims Analysis Model to estimate the fair value of the PIUs:


	Year Ended
	December 31, 2021
Expected volatility	55.00	%
Risk-free interest rate	0.20	%
Expected term (in years)	3.2
Expected dividend yield	—	%

NET LOSS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2023

NET INCOME (LOSS) PER SHARE

Schedule of basic and diluted net income (loss) per share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share data):


	Year Ended December 31,
	2023		2022		2021
Numerator:
Net loss attributable to common stockholders	$	(2,388)	$	(5,694)	$	(62,348)
Denominator:
Weighted-average common shares outstanding
Basic		112,899,586		113,245,421		110,644,366
Diluted		112,899,586		113,245,421		110,644,366
Net loss per share attributable to common stockholders:
Basic	$	(0.02)	$	(0.05)	$	(0.56)
Diluted	$	(0.02)	$	(0.05)	$	(0.56)

Schedule of antidilutive securities excluded from computation of diluted net income (loss) per share

The following table includes the number of shares that may be dilutive common shares in the future that were not included in the computation of diluted net loss per share because the effect was anti-dilutive:


	Year Ended December 31,
	2023	2022	2021
Restricted stock awards	697,822	1,904,037	5,909,089
Restricted stock units	188,548	202,622	106,917
Stock options	1,702,316	1,757,336	39
Stock appreciation rights	491,386	—	—

EQUITY METHOD INVESTMENT (Details) - USD ($) $ in Thousands			12 Months Ended
EQUITY METHOD INVESTMENT (Details) - USD ($) $ in Thousands	Dec. 17, 2021	Oct. 30, 2020	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Aug. 06, 2021
Schedule of Equity Method Investments [Line Items]
Proceeds from the sale of equity method investment					$ 6,796
Equity Method Investments			$ 25,940	$ 25,095
Earnings from equity method investment			(3,723)	(4,230)	(2,222)
Distributions received from equity method investment			$ 2,878	$ 2,497	1,808
Premier Group Holdings Inc. Member
Schedule of Equity Method Investments [Line Items]
Ownership percentage						29.80%
Premier Pools & Spas
Schedule of Equity Method Investments [Line Items]
Ownership percentage		28.00%	18.20%	20.10%
Consideration paid		$ 25,400
Proceeds from the sale of equity method investment					6,800
Gain on Sale of Investments	$ 1,000				$ 3,900
Equity Method Investments			$ 25,900	$ 25,100
Earnings from equity method investment			3,700	4,200
Equity Method Investments Basis Difference Adjustment			200	200
Distributions received from equity method investment			$ 2,900	$ 2,500
Percentage of voting interests			20.10%

CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) - Condensed Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Assets
Total assets	$ 835,003	$ 869,683
Liabilities and Stockholders' Equity
Total liabilities	435,803	486,893
Stockholders' equity:
Preferred stock, $0.0001 par value; 100,000,000 shares authorized as of both December 31, 2023 and December 31, 2022; no shares issued and outstanding as of both December 31, 2023 and December 31, 2022	0	0
Common stock, $0.0001 par value; 900,000,000 shares authorized as of December 31, 2023 and December 31, 2022; 114,871,782 and 114,667,975 shares issued and outstanding, as of December 31, 2023 and December 31, 2022, respectively	11	11
Additional paid-in capital	459,684	440,880
Accumulated deficit	(56,956)	(54,568)
Accumulated other comprehensive loss	(3,539)	(3,533)
Total stockholders' equity	399,200	382,790	$ 353,645	$ 281,609
Total liabilities and stockholders' equity	835,003	869,683
Parent
Assets
Investment in subsidiary	399,200	382,790
Total assets	399,200	382,790
Stockholders' equity:
Common stock, $0.0001 par value; 900,000,000 shares authorized as of December 31, 2023 and December 31, 2022; 114,871,782 and 114,667,975 shares issued and outstanding, as of December 31, 2023 and December 31, 2022, respectively	11	11
Additional paid-in capital	459,684	440,880
Accumulated deficit	(56,956)	(54,568)
Accumulated other comprehensive loss	(3,539)	(3,533)
Total stockholders' equity	399,200	382,790
Total liabilities and stockholders' equity	$ 399,200	$ 382,790

LONG-TERM DEBT

12 Months Ended

Dec. 31, 2023

LONG-TERM DEBT

LONG-TERM DEBT

9.LONG-TERM DEBT

The components of the Company’s outstanding debt obligations consisted of the following (in thousands):


	December 31,
	2023		2022
Term Loan	$	309,313	$	322,562
Revolving Credit Facility		—		—
Less: Unamortized discount and debt issuance costs		(8,112)		(9,681)
Total debt		301,201		312,881
Less: Current portion of long-term debt		(21,250)		(3,250)
Total long-term debt	$	279,951	$	309,631

On February 23, 2022, Latham Pool Products entered into an agreement (the “New Credit Agreement”) with Barclays Bank PLC, which provides a senior secured multicurrency revolving line of credit (the “Revolving Credit Facility”) in an initial principal amount of $75.0 million and a U.S. Dollar senior secured term loan (the “Term Loan”) in an initial principal amount of $325.0 million. On the closing date, proceeds under the Credit Agreement were used to terminate the Prior Credit Agreement (as defined below) by repayment of $294.0 million of outstanding debt thereunder and for general corporate purposes. As of December 31, 2023, the Company was in compliance with all financial covenants under the New Credit Agreement.

Revolving Credit Facility

The Revolving Credit Facility may be utilized to finance ongoing general corporate and working capital needs and permits Latham Pools Products to borrow loans in U.S. Dollars, Canadian Dollars, Euros, and Australian Dollars. The Revolving Credit Facility matures on February 23, 2027. Loans outstanding under the Revolving Credit Facility denominated in U.S. Dollars and Canadian Dollars bear interest, at the borrower’s option, at a rate per annum based on Term SOFR or CDO (each, as defined in the New Credit Agreement), as applicable, plus a margin of 3.50%, or at a rate

per annum based on the Base Rate or the Canadian Prime Rate (each, as defined in the New Credit Agreement), plus a margin of 2.50%. Loans outstanding under the New Revolving Credit Facility denominated in Euros or Australian Dollars bear interest based on EURIBOR or the AUD Rate (each, as defined in the New Credit Agreement), respectively, plus a margin of 3.50%. A commitment fee accrues on any unused portion of the commitments under the Revolving Credit Facility. The commitment fee is due and payable quarterly in arrears and is, initially, 0.375% per annum and will, thereafter, accrue at a rate per annum ranging from 0.25% to 0.50%, depending on the First Lien Net Leverage Ratio (as defined in the New Credit Agreement, the “First Lien Net Leverage Ratio”). Borrowings under the Revolving Credit Facility are due at maturity.

The Company incurred debt issuance costs of $0.8 million related to the New Revolving Credit Facility. The debt issuance costs were recorded within other assets on the consolidated balance sheet and are being amortized over the life of the Revolving Credit Facility.

The Company is required to meet certain financial covenants, including maintaining specific liquidity measurements. There are also negative covenants, including certain restrictions on the Company’s ability to incur additional indebtedness, create liens, make investments, consolidate, or merge with other entities, enter into transactions with affiliates, make prepayments with respect to certain indebtedness, and make restricted payments and other distributions.

As of December 31, 2023, there were no outstanding borrowings on the Revolving Credit Facility and $75.0 million was available for future borrowing.

Term Loan

Pursuant to the New Credit Agreement, Latham Pool Products borrowed $325.0 million in term loans. The Term Loan matures on February 23, 2029. Loans outstanding under the Term Loan bear interest, at the borrower’s option, at a rate per annum based on Term SOFR (as defined in the Credit Agreement), plus a margin ranging from 3.75% to 4.00%, depending on the First Lien Net Leverage Ratio, or based on the Base Rate (as defined in the Credit Agreement), plus a margin ranging from 2.75% to 3.00%, depending on the First Lien Net Leverage Ratio. Loans under the Term Loan are subject to scheduled quarterly amortization payments of $812,500, equal to 0.25% of the initial principal amount of the Term Loan. The Term Loan contains customary mandatory prepayment provisions, including requirements to make mandatory prepayments with 50% of any excess cash flow and with 100% of the net cash proceeds from the incurrence of indebtedness not otherwise permitted to be incurred by the covenants, asset sales, and casualty and condemnation events, in each case, subject to customary exceptions.

During the first quarter of 2024, the Company made a payment of $18.0 million.

Outstanding borrowings as of December 31, 2023 were $301.2 million, net of discount and debt issuance costs of $8.1 million. In connection with the New Term Loan, the Company is subject to various negative, reporting, financial, and other covenants, including maintaining specific liquidity measurements.

As of December 31, 2023, the unamortized debt issuance costs and discount on the New Term Loan were $4.5 million and $3.6 million, respectively. The effective interest rate was 10.82% at December 31, 2023, including the impact of the Company’s interest rate swap.

As of December 31, 2023, the Company was in compliance with all financial covenants under the Credit Agreement.

Prior Revolving Credit Facility

On December 18, 2018, Latham Pool Products entered into an agreement (the “Credit Agreement”) with Nomura Corporate Funding Americas, LLC that included a revolving line of credit (the “Revolver”) and letters of credit (“Letters of Credit” or collectively with the Revolver, the “Prior Revolving Credit Facility”) in the amount of up to $30.0

million, as well as the Prior Term Loan (as described and defined below). The Prior Revolving Credit Facility was utilized to finance ongoing general corporate and working capital needs.

The Prior Revolving Credit Facility allowed for either Eurocurrency borrowings, bearing interest ranging from 4.50% to 4.75%, or base rate borrowings, bearing interest ranging from 3.50% to 3.75% depending on the First Lien Net Leverage Ratio, as defined in the Credit Agreement. A commitment fee accrued on any unused portion of the commitments under the Prior Revolving Credit Facility. The commitment fee was due and payable quarterly in arrears and was equal to the applicable margin times the actual daily amount by which the $30.0 million initial commitment exceeded the sum of the outstanding borrowings under the Revolver and outstanding Letters of Credit obligations. The applicable margin ranged from 0.375% to 0.500% as determined by the Company’s First Lien Net Leverage Ratio as defined in the Credit Agreement.

The Company was required to meet certain financial covenants, including maintaining specific liquidity measurements. There were also negative covenants, including certain restrictions on the Company’s ability to incur additional indebtedness, create liens, make investments, consolidate or merge with other entities, enter into transactions with affiliates, and make prepayments.

Prior Term Loan

Pursuant to the Credit Agreement, Latham Pool Products also borrowed $215.0 million in term loans (the “Prior Term Loan”). The Prior Term Loan was amended on May 29, 2019, to provide additional borrowings of $23.0 million, which was accounted for as a modification to the Prior Term Loan, to fund the Company’s acquisition of Narellan Group Pty Limited and its subsidiaries (the “First Amendment”). On October 14, 2020, Latham Pool Products amended the First Amendment to provide additional borrowings of $20.0 million, which was accounted for as new debt (the “Second Amendment”). The Second Amendment was further amended on January 25, 2021, to provide an additional incremental term loan of $175.0 million (the “Third Amendment”). On January 25, 2021, Latham Pool Products borrowed the incremental term loan, and the proceeds were used on February 2, 2021 to purchase and retire equity interests and to pay a distribution. On March 31, 2021, Latham Pool Products amended its Term Loan to revise the applicable reporting requirements (the “Fourth Amendment”). On April 27, 2021, upon completion of the IPO, the Company used $152.7 million of the net proceeds from the IPO to repay $152.7 million of the Prior Term Loan. On November 24, 2021, Latham Pool Products amended the Term Loan to provide additional borrowings of $50.0 million (the “Fifth Amendment”). The proceeds from this incremental term loan were used to finance the Radiant Acquisition in part. The Prior Term Loan, collectively with the First Amendment, Second Amendment, Third Amendment, the Fourth Amendment, and the Fifth Amendment, is referred to as the “Amended Prior Term Loan.”

The Amended Prior Term Loan bore interest at (1) a base rate equal to the highest of (i) the Federal Funds Rate plus 1∕2 of 1%, (ii) the “prime rate” published in the Money Rates section of the Wall Street Journal and (iii) LIBOR (2) plus a Loan Margin of (i) 6.00% for Eurocurrency Rate Loans and (ii) 5.00% for Base Rate Loans, as defined in the Credit Agreement. Principal payments under the First Amendment were calculated as 0.629% of the outstanding principal balance. In connection with the Amended Prior Term Loan, the Company was subject to various financial reporting, financial and other covenants, including maintaining specific liquidity measurements.

Under the Amended Prior Term Loan, the Company was required to make mandatory prepayments based on the Company’s excess cash flow for the year, as follows (as a percentage of the Company’s excess cash flow for the year):


	Mandatory
	Prepayment
Net Leverage Ratio	Percentage
> 3.50:1.00	90	%
> 3.00:1.00 and ≤ 3.50:1.00	75	%
> 2.50:1.00 and ≤ 3.00:1.00	50	%
> 2.00:1.00 and ≤ 2.50:1.00	25	%
≤ 2.00:1.00	0	%

Net Leverage Ratio in the table above was defined, as of any date of determination, as the ratio of net indebtedness at such date to consolidated earnings before interest, taxes, depreciation, and amortization.

Interest Rate Risk

Interest rate risk associated with the Credit Agreement is mitigated partially through interest rate swaps.

The Company executed an interest rate swap on April 30, 2020. The swap had an effective date of May 18, 2020 and a termination date of May 18, 2023. In February 2022, the Company amended its interest rate swap to change the index rate from LIBOR to SOFR in connection with the entry into the Credit Agreement. Under the terms of the amended swap, the Company fixed its SOFR borrowing rate at 0.496% on a notional amount of $200.0 million. The interest rate swap was not designated as a hedging instrument for accounting purposes (see Note 5).

Additionally, the Company entered into an interest rate swap that was executed on March 10, 2023. The swap has an effective date of May 18, 2023 and a termination date of May 18, 2026. Under the terms of the swap, the Company fixed its SOFR borrowing rate at 4.3725% on a notional amount of $161.0 million. The interest rate swap is not designated as a hedging instrument for accounting purposes (see Note 5).

Debt Maturities

Principal payments due on the outstanding debt in the next five fiscal years, excluding any potential payments based on excess cash flow levels, are as follows (in thousands):



Year Ended	Term Loan
2024	$	21,250
2025		3,250
2026		3,250
2027		3,250
2028		3,250
Thereafter		275,063
	$	309,313

The obligations under the Credit Agreement are guaranteed by certain wholly owned subsidiaries (the “Guarantors”) of the Company as defined in the security agreement. The obligations under the Credit Agreement are secured by substantially all of the Guarantors’ tangible and intangible assets, including their accounts receivables, equipment, intellectual property, inventory, cash and cash equivalents, deposit accounts, and security accounts. The Credit Agreement also restricts payments and other distributions unless certain conditions are met, which could restrict the Company’s ability to pay dividends. The ownership chain between Latham Pool Products and the Company consists of a series of holding companies with no material assets, liabilities, or standalone operations other than indirect equity interests in Latham Pool Products.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

COMPOSITION OF CERTAIN BALANCE SHEET ACCOUNTS - Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
COMPOSITION OF CERTAIN BALANCE SHEET ACCOUNTS
Accrued sales rebates	$ 10,170	$ 16,705
Accrued product warranties	2,889	3,763
Accrued incentives	1,270	2,727
Accrued vacation	2,310	2,422
Accrued payroll	4,893	5,750
Accrued interest	2,955	2,868
Income taxes payable	1,682	923
Deferred revenue	3,787	4,480
Other accrued expenses	10,735	11,247
Total accrued expenses and other current liabilities	$ 40,691	$ 50,885

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SBC, Pension and Other Postretirement Plans, Advertising , EPS (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Discretionary matching and other contributions	$ 1.4	$ 1.7	$ 2.0
Total advertising costs	$ 9.2	$ 9.8	$ 7.6

LONG-TERM DEBT (Details) - USD ($) $ in Thousands	Feb. 23, 2022	Dec. 31, 2023	Dec. 31, 2022	May 29, 2019
Debt Instrument [Line Items]
Gross debt		$ 309,313
Less: Unamortized discount and debt issuance costs		(8,112)	$ (9,681)
Total debt		301,201	312,881
Less: Current portion of long-term debt		(21,250)	(3,250)
Total long-term debt		279,951	$ 309,631
Repayment of debt	$ 294,000
Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 75,000	$ 75,000
Term loan
Debt Instrument [Line Items]
Gross debt				$ 215,000

PRODUCT WARRANTIES (Details) - USD ($) $ in Thousands	12 Months Ended
PRODUCT WARRANTIES (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Movement in Standard Product Warranty Accrual [Roll Forward]
Balance at the beginning of the fiscal year	$ 3,990	$ 4,909	$ 2,882
Adjustments to reserve	5,319	4,567	8,824
Warranty liabilities assumed in Radiant Acquisition			50
Less: Settlements made (in cash or in kind)	(6,148)	(5,486)	(6,847)
Balance at the end of the fiscal year	$ 3,161	$ 3,990	$ 4,909

INVENTORIES, NET (Tables)

12 Months Ended

Dec. 31, 2023

INVENTORIES, NET

Schedule of inventories, net

Inventories, net consisted of the following (in thousands):


	December 31,
	2023		2022
Raw materials	$	55,081	$	95,388
Finished goods		42,056		69,832
	$	97,137	$	165,220

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Long-Lived Assets (Details)	12 Months Ended
	Dec. 31, 2023
Technology
Finite-Lived Intangible Assets [Line Items]
Weighted-average estimated useful lives (in years)	15 years
Non-competition agreements
Finite-Lived Intangible Assets [Line Items]
Weighted-average estimated useful lives (in years)	5 years
Franchise relationships
Finite-Lived Intangible Assets [Line Items]
Weighted-average estimated useful lives (in years)	4 years
Order backlog
Finite-Lived Intangible Assets [Line Items]
Weighted-average estimated useful lives (in years)	10 months
Maximum \| Trade names and trademarks
Finite-Lived Intangible Assets [Line Items]
Weighted-average estimated useful lives (in years)	25 years
Maximum \| Pool designs
Finite-Lived Intangible Assets [Line Items]
Weighted-average estimated useful lives (in years)	15 years
Maximum \| Dealer relationships
Finite-Lived Intangible Assets [Line Items]
Weighted-average estimated useful lives (in years)	13 years
Maximum \| Patented technology
Finite-Lived Intangible Assets [Line Items]
Weighted-average estimated useful lives (in years)	10 years
Minimum \| Trade names and trademarks
Finite-Lived Intangible Assets [Line Items]
Weighted-average estimated useful lives (in years)	9 years
Minimum \| Pool designs
Finite-Lived Intangible Assets [Line Items]
Weighted-average estimated useful lives (in years)	14 years
Minimum \| Dealer relationships
Finite-Lived Intangible Assets [Line Items]
Weighted-average estimated useful lives (in years)	5 years
Minimum \| Patented technology
Finite-Lived Intangible Assets [Line Items]
Weighted-average estimated useful lives (in years)	5 years

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2023

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

16.COMMITMENTS AND CONTINGENCIES

Litigation

In the normal course of its business, the Company is involved in various legal proceedings involving contractual and employment relationships, product liability claims, trademark rights, and a variety of other matters. The Company does not believe there are any pending legal proceedings that will have a material impact on the Company’s

financial position, results of operations, or cash flows. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses as incurred the costs related to such legal proceedings.

INCOME TAXES - Deferred Income Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2020
Deferred tax assets:
Net operating loss carryforwards	$ 6,715	$ 7,267
Capital loss carryforwards	3,114
Inventories, net	3,234	2,663
Warranty reserve	595	783
Trade receivables	1,737	719
Profits interest units	2,581	1,885
Section 163(j)	2,345
Accrued expenses	509	352
Transaction costs	1,052	1,211
Future branch taxes	(1,691)	(1,820)
Other	2,082	1,335
Gross deferred tax assets	22,273	14,395
Valuation allowance	(3,114)		$ (12,704)
Total deferred tax asset	19,159	14,395
Less: Foreign deferred tax benefit	(7,485)	(7,762)
Total domestic deferred tax asset	11,674	6,633
Deferred tax liabilities:
Intangible assets	(45,150)	(49,257)
Property and equipment, net	(5,656)	(6,078)
Prepaid expenses and other	(644)	(1,161)
Investments in partnerships	(312)	(318)
Total deferred tax liabilities	(51,762)	(56,814)
Net deferred tax liabilities	$ (40,088)	$ (50,181)

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2023	Dec. 31, 2022	Jan. 11, 2022	Apr. 22, 2021	Apr. 13, 2021
Consolidated Balance Sheets
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	100,000,000	100,000,000		100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001
Common stock, shares authorized	900,000,000	900,000,000		900,000,000	500,000,000
Common stock, shares issued	114,871,782	114,667,975
Common stock, shares outstanding	114,871,782	114,667,975

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2023	Mar. 08, 2024	Jun. 30, 2023
Document and Entity Information [Abstract]
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2023
Entity File Number	001-40358
Entity Registrant Name	Latham Group, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	83-2797583
Entity Address State Or Province	NY
Entity Address, Address Line One	787 Watervliet Shaker Road
Entity Address, City or Town	Latham
Entity Address, Postal Zip Code	12110
City Area Code	800
Local Phone Number	833-3800
Title of 12(b) Security	Common stock, par value $0.0001 per share
Trading Symbol	SWIM
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
ICFR Auditor Attestation Flag	false
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Public Float			$ 144,310,808
Entity Common Stock, Shares Outstanding		115,386,472
Entity Central Index Key	0001833197
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Amendment Flag	false
Auditor Name	Deloitte & Touche LLP
Auditor Firm ID	34
Auditor Location	Hartford Connecticut
Document Financial Statement Error Correction [Flag]	false

LONG-TERM DEBT (Tables)

12 Months Ended

Dec. 31, 2023

LONG-TERM DEBT

Components of the Company's outstanding debt obligations

The components of the Company’s outstanding debt obligations consisted of the following (in thousands):


	December 31,
	2023		2022
Term Loan	$	309,313	$	322,562
Revolving Credit Facility		—		—
Less: Unamortized discount and debt issuance costs		(8,112)		(9,681)
Total debt		301,201		312,881
Less: Current portion of long-term debt		(21,250)		(3,250)
Total long-term debt	$	279,951	$	309,631

Schedule of mandatory prepayments based on Company's excess cash flow for the year


	Mandatory
	Prepayment
Net Leverage Ratio	Percentage
> 3.50:1.00	90	%
> 3.00:1.00 and ≤ 3.50:1.00	75	%
> 2.50:1.00 and ≤ 3.00:1.00	50	%
> 2.00:1.00 and ≤ 2.50:1.00	25	%
≤ 2.00:1.00	0	%

Principal payments due on the outstanding debt

Principal payments due on the outstanding debt in the next five fiscal years, excluding any potential payments based on excess cash flow levels, are as follows (in thousands):



Year Ended	Term Loan
2024	$	21,250
2025		3,250
2026		3,250
2027		3,250
2028		3,250
Thereafter		275,063
	$	309,313

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

LEASES - Minimum annual rental commitments under non-cancelable operating leases (Details) $ in Millions	12 Months Ended
	Dec. 31, 2021 USD ($)
Minimum annual rental commitments under non-cancelable operating leases
Rental expense	$ 8.8

RELATED PARTY TRANSACTIONS - Operating Lease (Details) $ in Thousands	Dec. 31, 2023 USD ($)
RELATED PARTY TRANSACTIONS
Future minimum lease payments	$ 36,770

GOODWILL AND INTANGIBLE ASSETS, NET

12 Months Ended

Dec. 31, 2023

GOODWILL AND INTANGIBLE ASSETS, NET

GOODWILL AND INTANGIBLE ASSETS, NET

6.GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

The following table presents the changes in the carrying value of goodwill during the years ended December 31, 2023 and 2022 (in thousands):


	Amount
Balance as of December 31, 2021	$	128,871
Acquisition		2,753
Measurement period adjustment		384
Foreign currency translation adjustment		(625)
Balance as of December 31, 2022		131,383
Foreign currency translation adjustment		(20)
Balance as of December 31, 2023	$	131,363

The Company performed an annual test for goodwill impairment in the fourth quarter of the year ended December 31, 2023 in accordance with Step 1 of ASC 350 and determined that goodwill was not impaired. The Company performed an annual test for goodwill impairment in the fourth quarter of the year ended December 31, 2022 in accordance with Step 0 of ASC 350 and determined that goodwill was not impaired.

Intangible Assets

Intangible assets, net as of December 31, 2023 consisted of the following (in thousands):


	December 31, 2023
	Gross		Foreign
	Carrying		Currency		Accumulated		Net
	Amount		Translation		Amortization		Amount
Trade names and trademarks	$	148,100	$	72	$	29,583	$	118,589
Patented technology		16,126		1		8,713		7,414
Technology		13,000		—		1,806		11,194
Pool designs		13,628		35		2,973		10,690
Franchise relationships		1,187		—		1,187		—
Dealer relationships		197,376		—		62,470		134,906
Order backlog		1,600		—		1,600		—
Non-competition agreements		2,476		—		2,476		—
	$	393,493	$	108	$	110,808	$	282,793

Intangible assets, net as of December 31, 2022 consisted of the following (in thousands):


	December 31, 2022
	Gross		Foreign
	Carrying		Currency		Accumulated		Net
	Amount		Translation		Amortization		Amount
Trade names and trademarks	$	148,100	$	(84)	$	22,982	$	125,034
Patented technology		16,126		37		6,959		9,204
Technology		13,000		—		939		12,061
Pool designs		13,628		(10)		2,037		11,581
Franchise relationships		1,187		45		1,064		168
Dealer relationships		197,376		13		46,699		150,690
Order backlog		1,600		—		1,600		—
Non-competition agreements		2,476		—		1,999		477
	$	393,493	$	1	$	84,279	$	309,215

The Company recognized $26.5 million, $28.2 million, and $22.6 million of amortization expense related to intangible assets during the years ended December 31, 2023, 2022, and 2021, respectively.

The Company estimates that amortization expense related to definite-lived intangible assets will be as follows in each of the next five years and thereafter (in thousands):


	Estimated Future
	Amortization
Year Ended	Expense
2024	$	25,709
2025		25,551
2026		25,551
2027		25,551
2028		24,593
Thereafter		155,838
	$	282,793

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventories, Net (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reserves for estimated slow moving products or obsolescence	$ 9.1	$ 4.6

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2023

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

21.RELATED PARTY TRANSACTIONS

BrightAI Services

Starting in 2020, BrightAI rendered services to the Company, for which the cost was capitalized as internal-use software. A co-founder of BrightAI Services served on the Company’s Board of Directors from December 9, 2020 until his resignation on February 21, 2024. During the years ended December 31, 2023, 2022 and 2021, the Company incurred $2.0 million, $0.2 million, and $2.1 million, respectively, associated with services performed by BrightAI, which is recorded as construction in progress within property and equipment, net on the consolidated balance sheets as of December 31, 2023 and 2022. As of December 31, 2023 and 2022, the Company had accounts payable to BrightAI of $0.0 million and $0.4 million, respectively.

Expense Reimbursement

The Company entered into a Stockholders’ Agreement with the Sponsor and Wynnchurch Capital, L.P. on April 27, 2021. The Stockholders’ Agreement requires the Company to reimburse the Sponsor and Wynnchurch Capital, L.P. the reasonable out-of-pocket costs and expenses in connection with monitoring and overseeing their investment in the Company.

The Company did not have any material transactions with the Sponsor or Wynnchurch Capital, L.P. during the years ended December 31, 2023, 2022 and 2021.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

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+ Details

LEASES - Operating and finance lease right-of-use assets and liabilities and Supplemental information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Lease right-of-use assets:
Operating leases	$ 30,788	$ 38,308
Finance leases	$ 3,912	$ 316
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Other Assets	Other Assets
Total lease right-of-use assets	$ 34,700	$ 38,624
Lease-related liabilities
Operating leases, Current	7,133	6,923
Finance leases, Current	$ 746	$ 105
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Other Liabilities, Current	Other Liabilities, Current
Operating leases, Non-current	$ 24,787	$ 32,391
Finance leases, Non-current	$ 3,285	$ 193
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other Liabilities, Noncurrent	Other Liabilities, Noncurrent
Total finance lease liabilities	$ 35,951	$ 39,612
Weighted-average remaining lease term (years)
Finance leases	5 years 2 months 12 days	2 years 9 months 18 days
Operating leases	5 years 8 months 12 days	6 years 6 months
Weighted-average discount rate
Finance leases	8.20%	5.40%
Operating leases	5.10%	4.90%
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 7,551	$ 6,920
Maximum
Leases
Term of lease	11 years
Minimum
Leases
Term of lease	1 year

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Cash flows from operating activities:
Net loss	$ (2,388)	$ (5,694)	$ (62,348)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	40,751	38,175	32,230
Gain on insurance proceeds received for capital	(1,463)
Amortization of deferred financing costs and debt discount	1,720	1,570	6,419
Non-cash lease expense	7,675	7,400
Change in fair value of interest rate swaps	4,729	(2,984)	(858)
Deferred income taxes	(9,685)	(3,802)	(12,028)
Stock-based compensation expense	18,804	50,634	128,775
Underwriting fees related to offering of common stock		11,437
Loss on extinguishment of debt		3,465
Bad debt expense	5,379	2,011	986
Other non-cash, net	(94)	3,988	365
Gain on sale of portion of equity method investment			(4,806)
Earnings from equity method investment	(3,723)	(4,230)	(2,222)
Distributions received from equity method investment	2,878	2,497	1,808
Provision on liability for uncertain tax positions	(7,503)
Provision on liability for uncertain tax positions		1,434	149
Changes in operating assets and liabilities:
Trade receivables	13,040	8,992	(26,015)
Inventories	68,190	(57,034)	(39,656)
Prepaid expenses and other current assets	(1,326)	4,722	(4,455)
Income tax receivable	1,333	1,723	338
Other assets	(4,346)	(466)	800
Accounts payable	(8,512)	(12,358)	10,678
Accrued expenses and other current liabilities	(11,938)	(19,420)	4,686
Other long-term liabilities	2,848	249	(1,156)
Net cash provided by operating activities	116,369	32,309	33,690
Cash flows from investing activities:
Purchases of property and equipment	(33,189)	(39,684)	(24,975)
Capital reimbursed from insurance proceeds	1,463
Proceeds from the sale of property and equipment		24	35
Acquisitions of businesses, net of cash acquired		(5,358)	(90,508)
Return of equity method investment			447
Proceeds from the sale of portion of equity method investment			6,796
Net cash used in investing activities	(31,726)	(45,018)	(108,205)
Cash flows from financing activities:
Proceeds from long-term debt borrowings		320,125	222,813
Payments on long-term debt borrowings	(13,250)	(286,447)	(169,138)
Proceeds from borrowings on revolving credit facilities	48,000	25,000	16,000
Payments on revolving credit facilities	(48,000)	(25,000)	(16,000)
Deferred financing fees paid		(6,865)	(1,250)
Dividend to Class A unitholders			(110,033)
Proceeds from the issuance of common stock		257,663
Repayments of finance lease obligations	(625)
Proceeds from initial public offering, net of underwriting discounts, commissions and offering costs			399,264
Repurchase and retirement of common stock		(280,701)	(281,638)
Net cash (used in) provided by financing activities	(13,875)	3,775	60,018
Effect of exchange rate changes on cash	(631)	(2,392)	(861)
Net increase (decrease) in cash	70,137	(11,326)	(15,358)
Cash at beginning of period	32,626	43,952	59,310
Cash at end of period	102,763	32,626	43,952
Supplemental cash flow information:
Cash paid for interest	25,747	12,621	17,371
Income taxes paid, net	6,990	20,313	20,054
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued expenses	955	6,029	664
Capitalized internal-use software included in accounts payable - related party		350	$ 850
Right-of-use operating and finance lease assets obtained in exchange for lease liabilities	$ 6,193	$ 46,244

FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2023

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

5.FAIR VALUE MEASUREMENTS

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Inputs, other than quoted prices in active markets, that are observable either directly or indirectly.

Level 3 — Unobservable inputs that reflect the Company’s own assumptions incorporated into valuation techniques. These valuations require significant judgment.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. When there is more than one input at different levels within the hierarchy, the fair value is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Assessment of the significance of a particular input to the fair value measurement in its entirety requires substantial judgment and consideration of factors specific to the asset or liability. Level 3 inputs are inherently difficult to estimate. Changes to these inputs can have significant impact on fair value measurements. Assets and liabilities measured at fair value using Level 3 inputs are based on one or more of the following valuation techniques: market approach, income approach or cost approach. There were no transfers between fair value measurement levels during the years ended December 31, 2023 and December 31, 2022.

Assets and liabilities measured at fair value on a nonrecurring basis

The Company’s non-financial assets such as goodwill, intangible assets and property and equipment are measured at fair value upon acquisition and remeasured to fair value when an impairment charge is recognized. Such fair value measurements are based predominantly on Level 2 and Level 3 inputs.

Fair value of financial instruments

The Company considers the carrying amounts of cash, trade receivables, prepaid expenses and other current assets, accounts payable, and accrued expenses and other current liabilities, to approximate fair value because of the short-term maturities of these instruments.

Term loans

Term loans are carried at amortized cost; however, the Company estimates the fair value of term loans for disclosure purposes. The fair value of a term loan is determined using inputs based on observable market data of a non-public exchange, which are classified as Level 2 inputs. The following table sets forth the carrying amount and fair value of the term loans (in thousands):


	December 31,
	2023				2022
	Carrying		Estimated		Carrying		Estimated
	Value		Fair Value		Value		Fair Value
Term Loan	$	301,201	$	289,153	$	312,881	$	290,979

Interest rate swap

The Company estimates the fair value of the interest rate swap on a quarterly basis using Level 2 inputs, including the forward SOFR curve. The fair value is estimated by comparing (i) the present value of all future monthly fixed rate payments versus (ii) the variable payments based on the forward SOFR curve. As of December 31, 2023 and

2022, the Company’s interest rate swap was a liability of $1.2 million and an asset of $3.5 million, respectively, which was recorded within other long-term liabilities and other assets on the consolidated balance sheets, respectively.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

NET LOSS PER SHARE

12 Months Ended

Dec. 31, 2023

NET INCOME (LOSS) PER SHARE

NET LOSS PER SHARE

20.NET LOSS PER SHARE

Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share data):


	Year Ended December 31,
	2023		2022		2021
Numerator:
Net loss attributable to common stockholders	$	(2,388)	$	(5,694)	$	(62,348)
Denominator:
Weighted-average common shares outstanding
Basic		112,899,586		113,245,421		110,644,366
Diluted		112,899,586		113,245,421		110,644,366
Net loss per share attributable to common stockholders:
Basic	$	(0.02)	$	(0.05)	$	(0.56)
Diluted	$	(0.02)	$	(0.05)	$	(0.56)


	Year Ended December 31,
	2023	2022	2021
Restricted stock awards	697,822	1,904,037	5,909,089
Restricted stock units	188,548	202,622	106,917
Stock options	1,702,316	1,757,336	39
Stock appreciation rights	491,386	—	—

LONG-TERM DEBT - Revolving Credit Facility (Details) - Revolving Credit Facility - USD ($) $ in Millions	Feb. 23, 2022	Dec. 31, 2023
Debt Instrument [Line Items]
Amount outstanding		$ 0.0
Maximum borrowing capacity	$ 75.0	$ 75.0
Commitment fee rate range, depending on leverage ratio	0.375%
Debt issuance costs	$ 0.8
Minimum
Debt Instrument [Line Items]
Commitment fee rate range, depending on leverage ratio	0.25%
Maximum
Debt Instrument [Line Items]
Commitment fee rate range, depending on leverage ratio	0.50%
SOFR
Debt Instrument [Line Items]
Basis spread on variable rate	3.50%
Canadian Prime Rate
Debt Instrument [Line Items]
Basis spread on variable rate	2.50%
EURIBOR or AUD Rate
Debt Instrument [Line Items]
Basis spread on variable rate	3.50%

FAIR VALUE MEASUREMENTS - Fair value of financial instruments (Details) - Level 2 - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Term Loan Facility \| Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amount	$ 301,201	$ 312,881
Term Loan Facility \| Estimated Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amount	289,153	290,979
Interest Rate Swap
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of interest rate swap asset		$ 3,500
Fair value of interest rate swap liability	$ 1,200

CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) - Condensed Statements of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Net loss per share attributable to common stockholders:
Net (loss) income per share attributable to common stockholders - basic	$ (0.02)	$ (0.05)	$ (0.56)
Net (loss) income per share attributable to common stockholders - diluted	$ (0.02)	$ (0.05)	$ (0.56)
Weighted-average common shares outstanding - basic	112,899,586	113,245,421	110,644,366
Weighted-average common shares outstanding - diluted	112,899,586	113,245,421	110,644,366
Parent
Condensed Income Statements, Captions [Line Items]
Equity in net (loss) income of subsidiary	$ (2,388)	$ (5,694)	$ (62,348)
Net (loss) income attributable to common stockholders	$ (2,388)	$ (5,694)	$ (62,348)
Net loss per share attributable to common stockholders:
Net (loss) income per share attributable to common stockholders - basic	$ (0.02)	$ (0.05)	$ (0.56)
Net (loss) income per share attributable to common stockholders - diluted	$ (0.02)	$ (0.05)	$ (0.56)
Weighted-average common shares outstanding - basic	112,899,586	113,245,421	110,644,366
Weighted-average common shares outstanding - diluted	112,899,586	113,245,421	110,644,366

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

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-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
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-URI https://asc.fasb.org//1943274/2147483443/250-10-50-3

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

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+ Details

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities, and addition from assumption of issuance of common shares for dilutive potential common shares; of income (loss) available to common shareholders.

+ References + Details

GEOGRAPHIC INFORMATION (Tables)

12 Months Ended

Dec. 31, 2023

GEOGRAPHIC INFORMATION

Schedule of net sales by geography

Net sales by geography is based on the delivery address of the customer as specified in purchase order. Net sales by geographic area was as follows (in thousands):


	December 31,
	2023		2022		2021
Net sales
United States	$	475,024	$	558,827	$	491,870
Canada		58,443		91,579		98,662
Australia		22,534		25,827		25,216
New Zealand		6,030		9,346		8,055
Other		4,461		10,157		6,653
Total	$	566,492	$	695,736	$	630,456

Schedule of long-lived assets by geographic area

Our long-lived assets by geographic area, which consist of property and equipment, net were as follows (in thousands):


	December 31,
	2023		2022
Long-lived assets
United States	$	68,148	$	62,598
Canada		39,469		29,638
Australia		3,980		4,173
New Zealand		1,417		1,775
Total	$	113,014	$	98,184

GEOGRAPHIC INFORMATION

12 Months Ended

Dec. 31, 2023

GEOGRAPHIC INFORMATION

GEOGRAPHIC INFORMATION

22.GEOGRAPHIC INFORMATION

Net sales by geography is based on the delivery address of the customer as specified in purchase order. Net sales by geographic area was as follows (in thousands):


	December 31,
	2023		2022		2021
Net sales
United States	$	475,024	$	558,827	$	491,870
Canada		58,443		91,579		98,662
Australia		22,534		25,827		25,216
New Zealand		6,030		9,346		8,055
Other		4,461		10,157		6,653
Total	$	566,492	$	695,736	$	630,456

Our long-lived assets by geographic area, which consist of property and equipment, net were as follows (in thousands):


	December 31,
	2023		2022
Long-lived assets
United States	$	68,148	$	62,598
Canada		39,469		29,638
Australia		3,980		4,173
New Zealand		1,417		1,775
Total	$	113,014	$	98,184

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-15

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//280/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 26
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-26

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 34
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-34

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

+ Details

LEASES

12 Months Ended

Dec. 31, 2023

LEASES

LEASES

13.LEASES

The Company leases vehicles, manufacturing facilities, office space, land, and equipment under operating leases. As of December 31, 2023, our operating leases substantially have remaining terms of one year to eleven years, some of which include options to extend and/or terminate the leases. The Company does not have material finance leases.

The components of lease expense for the years ended December 31, 2023 and 2022 were as follows (in thousands):


	Year Ended
	December 31, 2023		December 31, 2022
Operating lease expense	$	9,350	$	9,085
Finance lease amortization of assets		679		48
Finance lease interest on lease liabilities		296		11
Short-term lease expense		319		156
Variable lease expense		1,180		573
Total lease expense	$	11,824	$	9,873

Operating and finance lease right of use assets and lease-related liabilities as of December 31, 2023 and 2022 were as follows (in thousands):


	December 31, 2023		December 31, 2022		Classification

Lease right-of-use assets:
Operating leases	$	30,788	$	38,308	Operating lease right-of-use assets
Finance leases		3,912		316	Other assets
Total lease right-of-use assets	$	34,700	$	38,624

Lease-related liabilities
Current
Operating leases	$	7,133	$	6,923	Current operating lease liabilities
Finance leases		746		105	Accrued expenses and other current liabilities
Non-current
Operating leases		24,787		32,391	Non-current operating lease liabilities
Finance leases		3,285		193	Other long-term liabilities
Total lease liabilities	$	35,951	$	39,612

The table below presents supplemental information related to leases as of December 31, 2023 and 2022:


	December 31, 2023			December 31, 2022
Weighted-average remaining lease term (years)
Finance leases		5.2			2.8
Operating leases		5.7			6.5
Weighted-average discount rate
Finance leases		8.2	%		5.4	%
Operating leases		5.1	%		4.9	%

The table below presents supplemental information related to the cash flows for operating leases recorded on the consolidated statements of cash flows (in thousands):


	Year Ended
	December 31, 2023		December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	7,551	$	6,920

The following table summarizes maturities of operating lease liabilities as of the years ended December 31, 2023 (in thousands):


	Operating Leases		Finance Leases		Total
2024	$	8,542	$	1,049	$	9,591
2025		7,410		995		8,405
2026		5,880		899		6,779
2027		4,141		823		4,964
2028		3,137		811		3,948
Thereafter		7,660		377		8,037
Total lease payments		36,770		4,954		41,724
Less: Interest		(4,850)		(923)		(5,773)
Present value of lease liability	$	31,920	$	4,031	$	35,951

Under ASC 840, rental expense during the year ended December 31, 2021 was $8.8 million.

CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) - Condensed Balance Sheets (Parenthetical) (Details) - $ / shares	Dec. 31, 2023	Dec. 31, 2022	Jan. 11, 2022	Apr. 22, 2021	Apr. 13, 2021
Condensed Balance Sheet Statements, Captions [Line Items]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	100,000,000	100,000,000		100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001
Common stock, shares authorized	900,000,000	900,000,000		900,000,000	500,000,000
Common stock, shares issued	114,871,782	114,667,975
Common stock, shares outstanding	114,871,782	114,667,975
Parent
Condensed Balance Sheet Statements, Captions [Line Items]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001	$ 0.0001
Common stock, shares authorized	900,000,000	900,000,000
Common stock, shares issued	114,871,782	114,667,975
Common stock, shares outstanding	114,871,782	114,667,975

CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) (Tables)

12 Months Ended

Dec. 31, 2023

CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY)

Schedule of condensed balance sheets

Latham Group, Inc.

(Parent Company Only)

Condensed Balance Sheets

(in thousands, except share and per share data)


	December 31,
	2023		2022
Assets
Investment in subsidiary	$	399,200	$	382,790
Total assets	$	399,200	$	382,790
Liabilities and Stockholders’ Equity
Total liabilities	$	—	$	—
Stockholders’ Equity
Preferred stock, $0.0001 par value; 100,000,000 shares authorized as of both December 31, 2023 and December 31, 2022; no shares issued and outstanding as of both December 31, 2023 and December 31, 2022		—		—
Common stock, $0.0001 par value; 900,000,000 shares authorized as of December 31, 2023 and December 31, 2022; 114,871,782 and 114,667,975 shares issued and outstanding, as of December 31, 2023 and December 31, 2022, respectively		11		11
Additional paid-in capital		459,684		440,880
Accumulated deficit		(56,956)		(54,568)
Accumulated other comprehensive loss		(3,539)		(3,533)
Total stockholders’ equity		399,200		382,790
Total liabilities and stockholders’ equity	$	399,200	$	382,790

Schedule of condensed statements of operations

Latham Group, Inc.

(Parent Company Only)

Condensed Statements of Operations

(in thousands, except share and per share data)


	Year Ended
	December 31,
	2023		2022		2021
Equity in net loss of subsidiary	$	(2,388)	$	(5,694)	$	(62,348)
Net loss attributable to common stockholders	$	(2,388)	$	(5,694)	$	(62,348)
Net loss per share
Net loss per share attributable to common stockholders – basic and diluted
Basic	$	(0.02)	$	(0.05)	$	(0.56)
Diluted	$	(0.02)	$	(0.05)	$	(0.56)
Weighted-average common shares outstanding – basic and diluted
Basic		112,899,586		113,245,421		110,644,366
Diluted		112,899,586		113,245,421		110,644,366

Schedule of condensed statements of comprehensive income

Latham Group, Inc.

(Parent Company Only)

Condensed Statements of Comprehensive Loss

(in thousands)


	Year Ended
	December 31,
	2023		2022		2021
Net loss	$	(2,388)	$	(5,694)	$	(62,348)
Equity in other comprehensive loss of subsidiary		(6)		(3,903)		(1,984)
Comprehensive loss	$	(2,394)	$	(9,597)	$	(64,332)

Schedule of condensed statements of cash flows

Latham Group, Inc.

(Parent Company Only)

Condensed Statement of Cash Flows

(in thousands)


	Year Ended
	December 31,
	2023		2022		2021
Cash flows from operating activities:
Net loss	$	(2,388)	$	(5,694)	$	(62,348)
Adjustments to reconcile net loss to net cash provided by operating activities:
Equity in net loss of subsidiary		2,388		5,694		62,348
Net cash provided by operating activities		—		—		—
Cash flows from investing activities:
Distribution from subsidiary		—		23,038		—
Investment in subsidiary		—		—		(117,626)
Net cash provided by (used in) investing activities		—		23,038		(117,626)
Cash flows from financing activities:
Proceeds from initial public offering, net of underwriting discounts, commissions and offering costs		—		—		399,264
Proceeds from issuance of common stock		—		257,663		—
Repurchase and retirement of common stock		—		(280,701)		(281,638)
Net cash (used in) provided by financing activities		—		(23,038)		117,626
Net increase in cash		—		—		—
Cash at beginning of period		—		—		—
Cash at end of period	$	—	$	—	$	—

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Leases and Revenue Recognition (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Jan. 01, 2022
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets	$ 30,788	$ 38,308
Revenue, Practical Expedient, Financing Component [true false]	true
Product warranty term	5 years
ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets			$ 300

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 50
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147477123/405-50-65-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
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+ Details

CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY)

12 Months Ended

Dec. 31, 2023

CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY)

23.CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY)

Latham Group, Inc.

(Parent Company Only)

Condensed Balance Sheets

(in thousands, except share and per share data)


	December 31,
	2023		2022
Assets
Investment in subsidiary	$	399,200	$	382,790
Total assets	$	399,200	$	382,790
Liabilities and Stockholders’ Equity
Total liabilities	$	—	$	—
Stockholders’ Equity
Preferred stock, $0.0001 par value; 100,000,000 shares authorized as of both December 31, 2023 and December 31, 2022; no shares issued and outstanding as of both December 31, 2023 and December 31, 2022		—		—
Common stock, $0.0001 par value; 900,000,000 shares authorized as of December 31, 2023 and December 31, 2022; 114,871,782 and 114,667,975 shares issued and outstanding, as of December 31, 2023 and December 31, 2022, respectively		11		11
Additional paid-in capital		459,684		440,880
Accumulated deficit		(56,956)		(54,568)
Accumulated other comprehensive loss		(3,539)		(3,533)
Total stockholders’ equity		399,200		382,790
Total liabilities and stockholders’ equity	$	399,200	$	382,790

The accompanying notes are an integral part of these condensed financial statements.

Latham Group, Inc.

(Parent Company Only)

Condensed Statements of Operations

(in thousands, except share and per share data)


	Year Ended
	December 31,
	2023		2022		2021
Equity in net loss of subsidiary	$	(2,388)	$	(5,694)	$	(62,348)
Net loss attributable to common stockholders	$	(2,388)	$	(5,694)	$	(62,348)
Net loss per share
Net loss per share attributable to common stockholders – basic and diluted
Basic	$	(0.02)	$	(0.05)	$	(0.56)
Diluted	$	(0.02)	$	(0.05)	$	(0.56)
Weighted-average common shares outstanding – basic and diluted
Basic		112,899,586		113,245,421		110,644,366
Diluted		112,899,586		113,245,421		110,644,366

The accompanying notes are an integral part of these condensed financial statements.

Latham Group, Inc.

(Parent Company Only)

Condensed Statements of Comprehensive Loss

(in thousands)


	Year Ended
	December 31,
	2023		2022		2021
Net loss	$	(2,388)	$	(5,694)	$	(62,348)
Equity in other comprehensive loss of subsidiary		(6)		(3,903)		(1,984)
Comprehensive loss	$	(2,394)	$	(9,597)	$	(64,332)

The accompanying notes are an integral part of these condensed financial statements.

Latham Group, Inc.

(Parent Company Only)

Condensed Statement of Cash Flows

(in thousands)


	Year Ended
	December 31,
	2023		2022		2021
Cash flows from operating activities:
Net loss	$	(2,388)	$	(5,694)	$	(62,348)
Adjustments to reconcile net loss to net cash provided by operating activities:
Equity in net loss of subsidiary		2,388		5,694		62,348
Net cash provided by operating activities		—		—		—
Cash flows from investing activities:
Distribution from subsidiary		—		23,038		—
Investment in subsidiary		—		—		(117,626)
Net cash provided by (used in) investing activities		—		23,038		(117,626)
Cash flows from financing activities:
Proceeds from initial public offering, net of underwriting discounts, commissions and offering costs		—		—		399,264
Proceeds from issuance of common stock		—		257,663		—
Repurchase and retirement of common stock		—		(280,701)		(281,638)
Net cash (used in) provided by financing activities		—		(23,038)		117,626
Net increase in cash		—		—		—
Cash at beginning of period		—		—		—
Cash at end of period	$	—	$	—	$	—

The accompanying notes are an integral part of these condensed financial statements.

Notes to Condensed Financial Statements of Registrant (Parent Company Only)

1.Basis of Presentation

These condensed parent company-only financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X. Latham Group, Inc. has no material assets or standalone operations other than its ownership in its consolidated subsidiaries. Under the terms of the New Credit Agreement entered into by the Latham Pool Products, a wholly owned subsidiary of LIMC, which itself is a wholly owned subsidiary of Latham Group, Inc., Latham Pool Products is restricted from making dividend payments, loans or advances to Latham Group, Inc., unless certain conditions are met. As of December 31, 2023 and 2022, substantially all of the consolidated net assets of Latham Pool Products are considered restricted net assets as defined in Rule 4-08(e)(3) of Regulation S-X.

Latham Group, Inc. is able to transfer assets from Latham Pool Products in order to pay certain tax liabilities.

These condensed parent company financial statements have been prepared using the same accounting principles and policies described in the notes to the condensed financial statements, with the only exception being that the parent company accounts for its subsidiary using the equity method.

2.Common Stock

On January 11, 2022, the Company completed an offering of 13,800,000 shares of common stock, par value $0.0001 per share, including the exercise in full by the underwriters of their option to purchase up to 1,800,000 additional shares of common stock, at a public offering price of $19.50 per share. The Company received proceeds of $257.7 million from this offering, net of $11.4 million of underwriting fees. The proceeds of $257.7 million were used to purchase 13,800,000 shares of common stock from certain of the Company’s stockholders, primarily investment funds managed by the Sponsor and Wynnchurch Capital, L.P., and also a small percentage of shares of common stock owned by some of the Company’s directors and executive officers.

LEASES (Tables)

12 Months Ended

Dec. 31, 2023

LEASES

Summary of components of lease expense


	Year Ended
	December 31, 2023		December 31, 2022
Operating lease expense	$	9,350	$	9,085
Finance lease amortization of assets		679		48
Finance lease interest on lease liabilities		296		11
Short-term lease expense		319		156
Variable lease expense		1,180		573
Total lease expense	$	11,824	$	9,873

Schedule of supplemental lease information

Operating and finance lease right of use assets and lease-related liabilities as of December 31, 2023 and 2022 were as follows (in thousands):


	December 31, 2023		December 31, 2022		Classification

Lease right-of-use assets:
Operating leases	$	30,788	$	38,308	Operating lease right-of-use assets
Finance leases		3,912		316	Other assets
Total lease right-of-use assets	$	34,700	$	38,624

Lease-related liabilities
Current
Operating leases	$	7,133	$	6,923	Current operating lease liabilities
Finance leases		746		105	Accrued expenses and other current liabilities
Non-current
Operating leases		24,787		32,391	Non-current operating lease liabilities
Finance leases		3,285		193	Other long-term liabilities
Total lease liabilities	$	35,951	$	39,612

The table below presents supplemental information related to leases as of December 31, 2023 and 2022:


	December 31, 2023			December 31, 2022
Weighted-average remaining lease term (years)
Finance leases		5.2			2.8
Operating leases		5.7			6.5
Weighted-average discount rate
Finance leases		8.2	%		5.4	%
Operating leases		5.1	%		4.9	%

The table below presents supplemental information related to the cash flows for operating leases recorded on the consolidated statements of cash flows (in thousands):


	Year Ended
	December 31, 2023		December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	7,551	$	6,920

Summary of maturities of operating lease liabilities


	Operating Leases		Finance Leases		Total
2024	$	8,542	$	1,049	$	9,591
2025		7,410		995		8,405
2026		5,880		899		6,779
2027		4,141		823		4,964
2028		3,137		811		3,948
Thereafter		7,660		377		8,037
Total lease payments		36,770		4,954		41,724
Less: Interest		(4,850)		(923)		(5,773)
Present value of lease liability	$	31,920	$	4,031	$	35,951

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company does not engage in contracts greater than one year, and therefore does not have any contract costs capitalized as of December 31, 2023, and 2022.

Warranties

Cost of Sales

Exit or Disposal Costs

Trade Receivables, Net

Concentration of Credit Risk

Fair Value Measurements

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Inputs, other than quoted prices in active markets, that are observable either directly or indirectly.

Level 3 — Unobservable inputs that reflect the Company’s own assumptions incorporated into valuation techniques. These valuations require significant judgment.

Business Combinations

Equity Method Investments

Inventories, Net

Property and Equipment, Net


		Estimated
		Useful Life
Building and improvements		25 years
Molds and dyes		5 – 10 years
Machinery and equipment (including computer equipment and software)		3 – 10 years
Furniture and fixtures		5 – 7 years
Vehicles		5 years

Long-Lived Assets


		Estimated
Asset		Useful Life
Trade names and trademarks		9 – 25 years
Technology		15 years
Pool designs		14 – 15 years
Dealer relationships		5 – 13 years
Patented technology		5 – 10 years
Non-competition agreements		5 years
Franchise relationships		4 years
Order backlog		10 months

Goodwill

Debt Issuance Costs

Segment Reporting

The Company identifies operating segments based on how the chief operating decision maker manages the business, allocates resources, makes operating decisions, and evaluates operating performance.

Income Taxes

Stock-Based Compensation

Employee Benefit Plans

Foreign Currency Translation and Foreign Currency Transactions

Advertising Costs

Comprehensive Income (Loss)

Income tax (benefit) expense on the components of other comprehensive income (loss) was not significant for the years ended December 31, 2023, 2022 and 2021.

Earnings Per Share

Treasury Stock

Recently Issued Accounting Pronouncements

NATURE OF THE BUSINESS - (Details) $ in Millions	Apr. 27, 2021 USD ($) shares	Apr. 13, 2021
Business Acquisition [Line Items]
Stock split ratio		109,673.709
IPO
Business Acquisition [Line Items]
Proceeds from sale of common stock (in shares)	23,000,000
Net proceeds from the IPO \| $	$ 399.3
Underwriters Option
Business Acquisition [Line Items]
Proceeds from sale of common stock (in shares)	3,000,000

PRODUCT WARRANTIES (Tables)

12 Months Ended

Dec. 31, 2023

PRODUCT WARRANTIES

Warranty reserve activity

The warranty reserve activity consisted of the following (in thousands):


	Year Ended
	December 31,
	2023		2022		2021
Balance at the beginning of the fiscal year	$	3,990	$	4,909	$	2,882
Adjustments to reserve		5,319		4,567		8,824
Warranty liabilities assumed in Radiant Acquisition		—		—		50
Less: Settlements made (in cash or in kind)		(6,148)		(5,486)		(6,847)
Balance at the end of the fiscal year	$	3,161	$	3,990	$	4,909

STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Apr. 01, 2023	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options granted		0
Stock-based compensation expense		$ 18,804	$ 50,634	$ 128,775
Total unrecognized stock-based compensation expense		$ 7,400
Total unrecognized stock-based compensation expense expected to be recognized over a weighted-average period		1 year 6 months 10 days
Weighted average grant-date fair value			$ 5.53
Cost of sales
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		$ 81	$ 3,762	8,697
Selling, general and administrative expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		$ 18,723	$ 46,872	$ 120,078
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of awards other than options vested		2,377,883
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted		2,345,746
Number of awards other than options vested		465,863
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options granted		0
Stock Appreciation Rights (SARs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options granted	790,181	849,058
Weighted average grant-date fair value		$ 1.08

GOODWILL AND INTANGIBLE ASSETS, NET - Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 393,493	$ 393,493
Foreign Currency Translation	108	1
Accumulated Amortization	110,808	84,279
Net Amount	282,793	309,215
Amortization of Intangible Assets	26,519	28,180	$ 22,566
Trade names and trademarks
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	148,100	148,100
Foreign Currency Translation	72	(84)
Accumulated Amortization	29,583	22,982
Net Amount	118,589	125,034
Patented technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	16,126	16,126
Foreign Currency Translation	1	37
Accumulated Amortization	8,713	6,959
Net Amount	7,414	9,204
Technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	13,000	13,000
Accumulated Amortization	1,806	939
Net Amount	11,194	12,061
Pool designs
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	13,628	13,628
Foreign Currency Translation	35	(10)
Accumulated Amortization	2,973	2,037
Net Amount	10,690	11,581
Franchise relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,187	1,187
Foreign Currency Translation		45
Accumulated Amortization	1,187	1,064
Net Amount		168
Dealer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	197,376	197,376
Foreign Currency Translation		13
Accumulated Amortization	62,470	46,699
Net Amount	134,906	150,690
Order backlog
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,600	1,600
Accumulated Amortization	1,600	1,600
Non-competition agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	2,476	2,476
Accumulated Amortization	$ 2,476	1,999
Net Amount		$ 477

LONG-TERM DEBT - Interest rate swap (Details) - Interest Rate Swap - SOFR - USD ($) $ in Millions	Mar. 10, 2023	Feb. 28, 2022
Derivative [Line Items]
Fixed borrowing rate	4.3725%	0.496%
Derivative notional amount	$ 161.0	$ 200.0