UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
OR
For the transition period from to
Commission file number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of | (I.R.S. Employer Identification No.) | |
(Address of principal executive offices) | (Zip Code) |
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(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | ☒ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of May 3, 2024,
TABLE OF CONTENTS
2
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Index to Condensed Consolidated Financial Statements (Unaudited)
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Latham Group, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
March 30, | December 31, | ||||||
| 2024 |
| 2023 | ||||
Assets | |||||||
Current assets: |
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Cash | $ | | $ | | |||
Trade receivables, net |
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Inventories, net |
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Income tax receivable |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Equity method investment |
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Deferred tax assets |
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Operating lease right-of-use assets | | | |||||
Goodwill |
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Intangible assets, net |
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Other assets | | | |||||
Total assets | $ | | $ | | |||
Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable | $ | | $ | | |||
Accounts payable – related party |
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Current maturities of long-term debt |
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Current operating lease liabilities | | | |||||
Accrued expenses and other current liabilities |
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Total current liabilities |
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Long-term debt, net of discount, debt issuance costs, and current portion |
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Deferred income tax liabilities, net |
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Non-current operating lease liabilities | | | |||||
Other long-term liabilities |
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Total liabilities | $ | | $ | | |||
Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock, $ | |||||||
Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Accumulated other comprehensive loss |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity | $ | | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Latham Group, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
Fiscal Quarter Ended | |||||||
| March 30, 2024 |
| April 1, 2023 |
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Net sales | $ | | $ | | |||
Cost of sales |
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Gross profit |
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Selling, general, and administrative expense |
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Amortization |
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Loss from operations |
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Other expense: |
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Interest expense, net |
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Other expense, net |
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Total other expense, net |
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Earnings from equity method investment | | | |||||
Loss before income taxes |
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Income tax expense (benefit) |
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Net loss | $ | ( | $ | ( | |||
Net loss per share attributable to common stockholders: |
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Basic | $ | ( | $ | ( | |||
Diluted | $ | ( | $ | ( | |||
Weighted-average common shares outstanding – basic and diluted |
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Basic |
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Diluted |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Latham Group, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(in thousands)
(unaudited)
Fiscal Quarter Ended | |||||||
| March 30, 2024 |
| April 1, 2023 |
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Net loss | $ | ( | $ | ( | |||
Other comprehensive loss, net of tax: |
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Foreign currency translation adjustments |
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Total other comprehensive loss, net of tax |
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Comprehensive loss | $ | ( | $ | ( |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Latham Group, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(in thousands, except share amounts)
(unaudited)
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| Accumulated |
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Additional | Other | Total | |||||||||||||||
Paid-in | Accumulated | Comprehensive | Stockholders' | ||||||||||||||
Shares | Amount | Capital | Deficit | Loss | Equity | ||||||||||||
Balances at December 31, 2022 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
Net loss |
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Foreign currency translation adjustments |
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Issuance of common stock upon release of restricted stock units | | — | — | — | — | — | |||||||||||
Stock-based compensation expense |
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Balances at April 1, 2023 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
Latham Group, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(in thousands, except share amounts)
(unaudited)
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| Accumulated |
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Additional | Other | Total | |||||||||||||||
Paid-in | Accumulated | Comprehensive | Stockholders' | ||||||||||||||
Shares | Amount | Capital | Deficit | Loss | Equity | ||||||||||||
Balances at December 31, 2023 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
Net loss |
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Foreign currency translation adjustments |
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Issuance of common stock upon release of restricted stock units | | — | — | — | — | — | |||||||||||
Stock-based compensation expense |
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Balances at March 30, 2024 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8
Latham Group, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Fiscal Quarter Ended | |||||||
March 30, | April 1, | ||||||
2024 |
| 2023 | |||||
Cash flows from operating activities: | |||||||
Net loss | $ | ( | $ | ( | |||
Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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Amortization of deferred financing costs and debt discount |
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Non-cash lease expense |
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Change in fair value of interest rate swaps |
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Stock-based compensation expense |
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Bad debt expense | | | |||||
Other non-cash, net | | | |||||
Earnings from equity method investment | ( | ( | |||||
Distributions received from equity method investment | | — | |||||
Changes in operating assets and liabilities: |
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Trade receivables |
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Inventories |
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Prepaid expenses and other current assets |
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Income tax receivable |
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Other assets | ( | ( | |||||
Accounts payable |
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Accrued expenses and other current liabilities |
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Other long-term liabilities |
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Net cash used in operating activities |
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Cash flows from investing activities: |
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Purchases of property and equipment |
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Net cash used in investing activities |
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Cash flows from financing activities: |
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Payments on long-term debt borrowings |
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Proceeds from borrowings on revolving credit facility | — | | |||||
Repayments of finance lease obligations | ( | ( | |||||
Net cash (used in) provided by financing activities |
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Effect of exchange rate changes on cash |
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Net (decrease) increase in cash |
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Cash at beginning of period |
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Cash at end of period | $ | | $ | | |||
Supplemental cash flow information: |
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Cash paid for interest | $ | | $ | | |||
Income taxes paid, net | | | |||||
Supplemental disclosure of non-cash investing and financing activities: |
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Purchases of property and equipment included in accounts payable and accrued expenses | $ | | $ | | |||
Capitalized internal-use software included in accounts payable – related party | — | | |||||
Right-of-use operating and finance lease assets obtained in exchange for lease liabilities | | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Notes to Condensed Consolidated Financial Statements
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 in-ground swimming pools and related products, including 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
On April 27, 2021, the Company completed its initial public offering (the “IPO”), pursuant to which it issued and sold
Prior to the closing of the Company’s IPO, the Company’s parent entity, Latham Investment Holdings, L.P., merged with and into Latham Group, Inc.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company’s unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Unaudited Interim Financial Information
The unaudited condensed consolidated balance sheet at December 31, 2023 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements as of March 30, 2024 and for the fiscal quarters ended March 30, 2024 and April 1, 2023, respectively, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with Latham Group, Inc.’s audited consolidated financial statements and the notes thereto for the fiscal year ended December 31, 2023 included in the Company’s 2023 Annual Report on Form 10-K, filed with the SEC on March 13, 2024 (the “Annual Report”). In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of these condensed consolidated financial statements, have been included. The Company’s results of operations for the fiscal quarter ended March 30, 2024 are not necessarily indicative of the results of operations that may be expected for the fiscal year ending December 31, 2024 or other interim periods thereof.
Use of Estimates
The preparation of the Company’s condensed 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 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.
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Reclassifications
Certain prior period balances have been reclassified to conform to the current period presentation in the condensed consolidated financial statements and the accompanying notes.
Seasonality
Although the Company generally has demand for its products throughout the fiscal year, its business is seasonal and weather is one of the principal external factors affecting the business. Historically, net sales and net income are highest (or net loss is lowest) during the second and third fiscal quarters, representing the peak months of swimming pool use, pool installation, and remodeling and repair activities. Severe weather may also affect net sales in all periods.
Significant Accounting Policies
Refer to the Annual Report for a discussion of the Company’s significant accounting policies, as updated below.
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 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 condensed 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 condensed consolidated financial statements.
In March 2024, the FASB issued ASU 2024-01, Compensation – Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards (“ASU 2024-01”), which improves financial reporting by providing clarity on when an entity should apply the scope guidance in paragraph 718-10-15-3. For all public entities, ASU 2024-01 is effective for fiscal years beginning after December 15, 2024. 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 2024-01 and its potential impact on the notes to the condensed consolidated financial statements.
3. 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.
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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 fiscal quarters ended March 30, 2024 and April 1, 2023.
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 loan
The Company’s term loan (see Note 6) is carried at amortized cost; however, the Company estimates the fair value of the term loan for disclosure purposes. The fair value of the term loan is determined using inputs based on observable market data of a non-public exchange, which are classified as Level 2 inputs.
March 30, 2024 | December 31, 2023 | ||||||||||||
Carrying | Estimated | Carrying | Estimated | ||||||||||
| Value |
| Fair Value |
| Value |
| Fair Value | ||||||
Term Loan | $ | | $ | | $ | | $ | |
Interest rate swap
The Company estimates the fair value of interest rate swaps (see Note 6) on a fiscal 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 March 30, 2024 and December 31, 2023, the fair value of the Company’s interest rate swap was an asset of $
4. GOODWILL AND INTANGIBLE ASSETS, NET
Goodwill
The carrying amount of goodwill as of March 30, 2024 and as of December 31, 2023 was $
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Intangible Assets
Intangible assets, net as of March 30, 2024 consisted of the following (in thousands):
March 30, 2024 | ||||||||||||
Gross | Foreign | |||||||||||
Carrying | Currency | Accumulated | Net | |||||||||
| Amount |
| Translation |
| Amortization |
| Amount | |||||
Trade names and trademarks | $ | | $ | ( | $ | | $ | | ||||
Patented technology |
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Technology | | — | | | ||||||||
Pool designs |
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Franchise relationships |
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Dealer relationships |
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Order backlog | | — | | — | ||||||||
Non-competition agreements |
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$ | | $ | ( | $ | | $ | |
The Company recognized $
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 | $ | | $ | | $ | | $ | | ||||
Patented technology |
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Technology | | — | | | ||||||||
Pool designs |
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Franchise relationships |
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Dealer relationships |
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Order backlog | | — | | — | ||||||||
Non-competition agreements |
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$ | | $ | | $ | | $ | |
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 | |
Remainder of fiscal year 2024 | $ | | |
2025 |
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2026 |
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2027 |
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2028 |
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Thereafter |
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$ | |
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5. INVENTORIES, NET
Inventories, net consisted of the following (in thousands):
| March 30, 2024 |
| December 31, 2023 | ||||
Raw materials | $ | | $ | | |||
Finished goods |
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$ | | $ | |
6. LONG-TERM DEBT
The components of the Company’s outstanding long-term debt obligations consisted of the following (in thousands):
| March 30, 2024 |
| December 31, 2023 | ||||
Term Loan | $ | | $ | | |||
Revolving Credit Facility | — | — | |||||
Less: Unamortized discount and debt issuance costs |
| ( |
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Total debt |
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Less: Current portion of long-term debt |
| ( |
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Total long-term debt | $ | | $ | |
On February 23, 2022, Latham Pool Products entered into an agreement (the “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 $
As of March 30, 2024, the Company was in compliance with all financial covenants under the 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 Credit Agreement), as applicable, plus a margin of
The Company incurred debt issuance costs of $
The Company is required to meet certain financial covenants in connection with the Revolving Credit Facility, including maintaining specific liquidity measurements. There are also negative covenants, including certain restrictions on the Company’s and its subsidiaries’ 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, make dividend payments, loans, or advances to the Company, declare dividends and make restricted payments and other distributions.
As of March 30, 2024, there were
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Term Loan
The Term Loan matures on February 23, 2029. The Term Loan bears 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
During the quarter ended March 30, 2024, the Company made a payment of $
Outstanding borrowings as of March 30, 2024 were $
As of March 30, 2024, the unamortized debt issuance costs and discount on the Term Loan were $
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
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
Debt Maturities
Principal payments due on the outstanding debt, excluding the Revolving Credit Facility, in the next five fiscal years, excluding any potential payments based on excess cash flow, are as follows (in thousands):
Year Ended | Term Loan | ||
Remainder of fiscal year 2024 |
| $ | |
2025 |
| | |
2026 |
| | |
2027 |
| | |
2028 | | ||
Thereafter |
| | |
$ | |
Guarantees
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.
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7. PRODUCT WARRANTIES
The warranty reserve activity consisted of the following (in thousands):
Fiscal Quarter Ended | |||||||
| March 30, 2024 |
| April 1, 2023 | ||||
Balance at the beginning of the fiscal year | $ | | $ | | |||
Adjustments to reserve |
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Less: Settlements made (in cash or in kind) |
| ( |
| ( | |||
Balance at the end of the fiscal quarter | $ | | $ | |
8. LEASES
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 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 manufacturing facilities, office space, land, and certain vehicles and equipment under operating leases. The Company also leases certain vehicles and equipment under finance 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 components of lease expense for the fiscal quarters ended March 30, 2024 and April 1, 2023 were as follows (in thousands):
Fiscal Quarter Ended | |||||||
| March 30, 2024 |
| April 1, 2023 | ||||
Operating lease expense | $ | | $ | | |||
Finance lease amortization of assets | | | |||||
Finance lease interest on lease liabilities | | | |||||
Short-term lease expense |
| |
| | |||
Variable lease expense |
| |
| | |||
Total lease expense | $ | | $ | |
Operating and finance lease right-of-use assets and lease-related liabilities as of March 30, 2024 and December 31, 2023 were as follows (in thousands):
March 30, 2024 | December 31, 2023 | Classification | ||||||
Lease right-of-use assets: | ||||||||
Operating leases | $ | | $ | | Operating lease right-of-use assets | |||
Finance leases | | | ||||||
Total lease right-of-use assets | $ | | $ | | ||||
Lease-related liabilities | ||||||||
Current | ||||||||
Operating leases | $ | | $ | | Current operating lease liabilities | |||
Finance leases | | | ||||||
Non-current | ||||||||
Operating leases | | | Non-current operating lease liabilities | |||||
Finance leases | | | ||||||
Total lease liabilities | $ | | $ | |
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The table below presents supplemental information related to leases as of March 30, 2024 and December 31, 2023:
| March 30, 2024 | December 31, 2023 | ||||||
Weighted-average remaining lease term (years) | ||||||||
Finance leases | ||||||||
Operating leases | ||||||||
Weighted-average discount rate | ||||||||
Finance leases | | % | | % | ||||
Operating leases | | % | | % |
The table below presents supplemental information related to the cash flows for operating leases recorded on the condensed consolidated statements of cash flows (in thousands):
Fiscal Quarter Ended | |||||||
| March 30, 2024 |
| April 1, 2023 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||
Operating cash flows for operating leases | $ | | $ | |
The following table summarizes maturities of operating lease liabilities as of March 30, 2024 (in thousands):
| Operating Leases | Finance Leases | Total | ||||||
Remainder of fiscal year 2024 | $ | | $ | | $ | | |||
2025 | | | | ||||||
2026 | | | | ||||||
2027 | | | | ||||||
2028 | | | | ||||||
Thereafter | | | | ||||||
Total lease payments | | | | ||||||
Less: Interest | ( | ( | ( | ||||||
Present value of lease liability | $ | | $ | | $ | |
9. NET SALES
The following table sets forth the Company’s disaggregation of net sales by product line (in thousands):
Fiscal Quarter Ended | ||||||||
| March 30, 2024 |
| April 1, 2023 | |||||
In-ground Swimming Pools | $ | | $ | | ||||
Covers |
| |
| | ||||
Liners |
| |
| | ||||
$ | | $ | |
10. INCOME TAXES
The effective income tax rate for the fiscal quarter ended March 30, 2024 was (
17
11. STOCKHOLDERS’ EQUITY
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 $
As of March 30, 2024, $
12. 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, performance 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 $
On May 2, 2023, at the 2023 annual meeting of stockholders of the Company, the stockholders approved the first amendment (the “First Amendment”) to the 2021 Omnibus Equity Plan, which was previously approved by the Board of Directors of the Company. The First Amendment became effective upon stockholder approval, and included an increase by
Except as amended by the First Amendment, the other terms of the 2021 Omnibus Equity Plan remain in full force and effect. Subsequent to the First Amendment, the maximum aggregate number of shares reserved for issuance under the 2021 Omnibus Equity Plan is
The following table summarizes the Company’s stock-based compensation expense (in thousands):
Fiscal Quarter Ended | ||||||||
March 30, 2024 |
| April 1, 2023 | ||||||
Cost of sales | $ | — | $ | | ||||
Selling, general, and administrative |
| |
| | ||||
$ | | $ | |
As of March 30, 2024, total unrecognized stock-based compensation expense related to all unvested stock-based awards was $
Restricted Stock Awards
The following table represents the Company’s restricted stock awards activity during the fiscal quarter ended March 30, 2024:
Weighted- | |||||
Average Grant- | |||||
| Shares |
| Date Fair Value | ||
Outstanding at January 1, 2024 |
| | $ | | |
Granted |
|
| |||
Vested |
| — |
| — | |
Forfeited |
| — |
| — | |
Outstanding at March 30, 2024 |
| | $ | |
18
Restricted Stock Units
The following table represents the Company’s restricted stock units activity during the fiscal quarter ended March 30, 2024:
|
| Weighted- | |||
Average Grant- | |||||
Shares | Date Fair Value | ||||
Outstanding at January 1, 2024 |
| | $ | | |
Granted |
| |
| | |
Vested |
| ( |
| | |
Forfeited |
| ( |
| | |
Outstanding at March 30, 2024 |
| | $ | |
Stock Options
The following table represents the Company’s stock option activity during the fiscal quarter ended March 30, 2024:
| Weighted- |
| Weighted- |
| ||||||
Average | Average | |||||||||
Exercise Price | Remaining | Aggregate | ||||||||
| Shares |
| per Share |
| Contract Term |
|