Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 02, 2021 | Nov. 09, 2021 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Oct. 2, 2021 | |
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 $0.0001 per share | |
Trading Symbol | SWIM | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 119,849,589 | |
Entity Central Index Key | 0001833197 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 02, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 90,869 | $ 59,310 |
Trade receivables, net | 75,314 | 32,758 |
Inventories, net | 80,705 | 64,818 |
Income tax receivable | 6,129 | 4,377 |
Prepaid expenses and other current assets | 10,676 | 6,063 |
Total current assets | 263,693 | 167,326 |
Property and equipment, net | 58,767 | 47,357 |
Equity method investment | 21,997 | 25,384 |
Deferred tax assets | 793 | 345 |
Deferred offering costs | 1,041 | |
Goodwill | 115,158 | 115,750 |
Intangible assets, net | 271,831 | 289,473 |
Other assets | 1,506 | 0 |
Total assets | 733,745 | 646,676 |
Current liabilities: | ||
Accounts payable | 39,921 | 29,789 |
Accounts payable - related party | 1,050 | 500 |
Current maturities of long-term debt | 14,234 | 13,042 |
Accrued expenses and other current liabilities | 59,454 | 50,606 |
Total current liabilities | 114,659 | 93,937 |
Long-term debt, net of discount and current portion | 219,967 | 208,454 |
Deferred income tax liabilities, net | 55,949 | 55,193 |
Liability for uncertain tax positions | 5,649 | 5,540 |
Other long-term liabilities | 2,026 | 1,943 |
Total liabilities | 398,250 | 365,067 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value; 100,000,000 and no shares authorized as of October 2, 2021 and December 31, 2020 respectively; no shares issued and outstanding as of both October 2, 2021 and December 31, 2020 | ||
Common stock, $0.0001 par value; 900,000,000 and 500,000,000 shares authorized as of October 2, 2021 and December 31, 2020, respectively; 119,849,589 and 118,854,249 shares issued and outstanding as of October 2, 2021 and December 31, 2020, respectively | 12 | 12 |
Additional paid-in capital | 377,649 | 265,478 |
(Accumulated deficit) retained earnings | (42,596) | 13,765 |
Accumulated other comprehensive income | 430 | 2,354 |
Total stockholders' equity | 335,495 | 281,609 |
Total liabilities and stockholders' equity | $ 733,745 | $ 646,676 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Oct. 02, 2021 | Dec. 31, 2020 |
Condensed Consolidated Balance Sheets | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 100,000,000 | 0 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 900,000,000 | 500,000,000 |
Common stock, shares issued | 119,849,589 | 118,854,249 |
Common stock, shares outstanding | 119,849,589 | 118,854,249 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Condensed Consolidated Statements of Operations | ||||
Net sales | $ 161,957 | $ 127,512 | $ 491,592 | $ 291,468 |
Cost of sales | 110,965 | 77,204 | 329,805 | 186,699 |
Gross profit | 50,992 | 50,308 | 161,787 | 104,769 |
Selling, general and administrative expense | 48,072 | 20,096 | 170,532 | 50,888 |
Amortization | 5,486 | 4,047 | 16,560 | 12,173 |
(Loss) income from operations | (2,566) | 26,165 | (25,305) | 41,708 |
Other expense (income): | ||||
Interest expense | 4,271 | 3,992 | 20,843 | 13,633 |
Other (income) expense, net | (2,538) | (1,378) | (3,887) | 1,121 |
Total other expense, net | 1,733 | 2,614 | 16,956 | 14,754 |
Earnings from equity method investment | 810 | 1,808 | ||
(Loss) income before income taxes | (3,489) | 23,551 | (40,453) | 26,954 |
Income tax expense | 7,807 | 5,811 | 15,908 | 8,251 |
Net (loss) income | $ (11,296) | $ 17,740 | $ (56,361) | $ 18,703 |
Net (loss) income per share attributable to common stockholders: | ||||
Basic | $ (0.10) | $ 0.18 | $ (0.51) | $ 0.19 |
Diluted | $ (0.10) | $ 0.18 | $ (0.51) | $ 0.19 |
Weighted average common shares outstanding: | ||||
Basic | 112,153,832 | 97,393,002 | 110,121,240 | 96,665,708 |
Diluted | 112,153,832 | 98,011,795 | 110,121,240 | 97,122,885 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Condensed Consolidated Statements of Comprehensive (Loss) Income | ||||
Net (loss) income | $ (11,296) | $ 17,740 | $ (56,361) | $ 18,703 |
Other comprehensive (loss) income, net of tax: | ||||
Foreign currency translation adjustments | (887) | 47 | (1,924) | 404 |
Comprehensive (loss) income | $ (12,183) | $ 17,787 | $ (58,285) | $ 19,107 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | (Accumulated Deficit) Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Balance, beginning of period at Dec. 31, 2019 | $ 10 | $ 196,474 | $ (2,218) | $ (471) | $ 193,795 |
Balance, beginning of period (in shares) at Dec. 31, 2019 | 96,498,943 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | (15,451) | (15,451) | |||
Foreign currency translation adjustments | (1,938) | (1,938) | |||
Repurchase and retirement of treasury stock | (400) | (400) | |||
Repurchase and retirement of treasury stock (in shares) | (200,173) | ||||
Stock-based compensation expense | 224 | 224 | |||
Balance, end of period at Mar. 28, 2020 | $ 10 | 196,298 | (17,669) | (2,409) | 176,230 |
Balance, end of period (in shares) at Mar. 28, 2020 | 96,298,770 | ||||
Balance, beginning of period at Dec. 31, 2019 | $ 10 | 196,474 | (2,218) | (471) | 193,795 |
Balance, beginning of period (in shares) at Dec. 31, 2019 | 96,498,943 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | 18,703 | ||||
Balance, end of period at Sep. 26, 2020 | $ 10 | 200,163 | 16,485 | (67) | 216,591 |
Balance, end of period (in shares) at Sep. 26, 2020 | 97,187,596 | ||||
Balance, beginning of period at Dec. 31, 2019 | $ 10 | 196,474 | (2,218) | (471) | 193,795 |
Balance, beginning of period (in shares) at Dec. 31, 2019 | 96,498,943 | ||||
Balance, end of period at Dec. 31, 2020 | $ 12 | 265,478 | 13,765 | 2,354 | 281,609 |
Balance, end of period (in shares) at Dec. 31, 2020 | 118,854,249 | ||||
Balance, beginning of period at Mar. 28, 2020 | $ 10 | 196,298 | (17,669) | (2,409) | 176,230 |
Balance, beginning of period (in shares) at Mar. 28, 2020 | 96,298,770 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | 16,414 | 16,414 | |||
Foreign currency translation adjustments | 2,295 | 2,295 | |||
Repurchase and retirement of treasury stock | (176) | (176) | |||
Repurchase and retirement of treasury stock (in shares) | (75,065) | ||||
Stock-based compensation expense | 240 | 240 | |||
Balance, end of period at Jun. 27, 2020 | $ 10 | 196,362 | (1,255) | (114) | 195,003 |
Balance, end of period (in shares) at Jun. 27, 2020 | 96,223,705 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | 17,740 | 17,740 | |||
Foreign currency translation adjustments | 47 | 47 | |||
Issuance of common stock and Net proceeds from initial public offering | 2,823 | 2,823 | |||
Issuance of common stock and Net proceeds from initial public offering (shares) | 963,891 | ||||
Stock-based compensation expense | 978 | 978 | |||
Balance, end of period at Sep. 26, 2020 | $ 10 | 200,163 | 16,485 | (67) | 216,591 |
Balance, end of period (in shares) at Sep. 26, 2020 | 97,187,596 | ||||
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 (loss) income | 8,533 | 8,533 | |||
Foreign currency translation adjustments | (1,201) | (1,201) | |||
Dividend ($1.00 per share) | (110,033) | (110,033) | |||
Repurchase and retirement of treasury stock | $ (2) | (64,936) | (64,938) | ||
Repurchase and retirement of treasury stock (in shares) | (21,666,653) | ||||
Stock-based compensation expense | 1,464 | 1,464 | |||
Balance, end of period at Apr. 03, 2021 | $ 10 | 91,973 | 22,298 | 1,153 | 115,434 |
Balance, end of period (in shares) at Apr. 03, 2021 | 97,187,596 | ||||
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 (loss) income | (56,361) | ||||
Balance, end of period at Oct. 02, 2021 | $ 12 | 377,649 | (42,596) | 430 | 335,495 |
Balance, end of period (in shares) at Oct. 02, 2021 | 119,849,589 | ||||
Balance, beginning of period at Apr. 03, 2021 | $ 10 | 91,973 | 22,298 | 1,153 | 115,434 |
Balance, beginning of period (in shares) at Apr. 03, 2021 | 97,187,596 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | (53,598) | (53,598) | |||
Foreign currency translation adjustments | 164 | 164 | |||
Issuance of common stock and Net proceeds from initial public offering | $ 2 | 399,262 | 399,264 | ||
Issuance of common stock and Net proceeds from initial public offering (shares) | 23,000,000 | ||||
Repurchase and retirement of treasury stock | $ (1) | (216,699) | (216,700) | ||
Repurchase and retirement of treasury stock (in shares) | (12,264,438) | ||||
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 (in shares) | 4,145,987 | ||||
Stock-based compensation expense | 75,511 | 75,511 | |||
Balance, end of period at Jul. 03, 2021 | $ 12 | 350,046 | (31,300) | 1,317 | 320,075 |
Balance, end of period (in shares) at Jul. 03, 2021 | 120,409,271 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | (11,296) | (11,296) | |||
Foreign currency translation adjustments | (887) | (887) | |||
Retirement of restricted stock (in shares) | (559,682) | ||||
Stock-based compensation expense | 27,603 | 27,603 | |||
Balance, end of period at Oct. 02, 2021 | $ 12 | $ 377,649 | $ (42,596) | $ 430 | $ 335,495 |
Balance, end of period (in shares) at Oct. 02, 2021 | 119,849,589 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) | 3 Months Ended |
Apr. 03, 2021$ / shares | |
Condensed Consolidated Statements of Stockholders' Equity | |
Dividend per share | $ 1 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (56,361) | $ 18,703 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 23,689 | 17,461 |
Amortization of deferred financing costs and debt discount | 5,907 | 1,867 |
Stock-based compensation expense | 104,578 | 1,442 |
Other non-cash | 1,349 | 825 |
Gain on sale of equity method investment | (3,856) | |
Earnings from equity method investment | (1,808) | |
Distributions received from equity method investment | 1,808 | |
Changes in operating assets and liabilities: | ||
Trade receivables | (43,134) | (18,732) |
Inventories | (16,128) | (2,202) |
Prepaid expenses and other current assets | (4,774) | 279 |
Income tax receivable | (1,752) | (1,287) |
Other assets | (465) | |
Accounts payable | 10,550 | 16,192 |
Accrued expenses and other current liabilities | 9,740 | 20,449 |
Other long-term liabilities | 83 | 59 |
Net cash provided by operating activities | 29,426 | 55,056 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (19,242) | (9,677) |
Proceeds from the sale of property and equipment | 33 | 560 |
Return of equity method investment | 447 | |
Proceeds from the sale of equity method investment | 6,796 | |
Net cash used in investing activities | (11,966) | (9,117) |
Cash flows from financing activities: | ||
Proceeds from long-term debt borrowings | 172,813 | |
Payments on term loan borrowings | (164,833) | (20,925) |
Proceeds from borrowings on revolving credit facility | 16,000 | 5,000 |
Payments on revolving credit facility borrowings | (16,000) | (5,000) |
Deferred financing fees paid | (1,250) | |
Dividend to Class A unitholders | (110,033) | |
Proceeds from issuance of common stock and initial public offering, net of underwriting discounts and commissions | 399,264 | 615 |
Repurchase and retirement of treasury stock | (281,638) | (576) |
Payments of Narellan Group Pty Limited contingent consideration | (6,624) | |
Net cash provided by (used in) financing activities | 14,323 | (27,510) |
Effect of exchange rate changes on cash | (224) | 769 |
Net increase (decrease) in cash | 31,559 | 19,198 |
Cash at beginning of period | 59,310 | 56,655 |
Cash at end of period | 90,869 | 75,853 |
Supplemental cash flow information: | ||
Cash paid for interest | 14,208 | 12,693 |
Income taxes paid, net | 15,213 | 9,100 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Purchases of property and equipment included in accounts payable and accrued expenses | 226 | 635 |
Capitalized internal-use software included in accounts payable - related party | $ 1,050 | |
Fair value of equity issued by Parent to settle contingent consideration in connection with the acquisition of Narellan Group Pty Limited | $ 2,208 |
NATURE OF THE BUSINESS
NATURE OF THE BUSINESS | 9 Months Ended |
Oct. 02, 2021 | |
NATURE OF THE BUSINESS | |
NATURE OF THE BUSINESS | 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”) and is 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. On December 18, 2018, Latham Investment Holdings, LP (“Parent”), an investment fund managed by affiliates of Pamplona Capital Management (the “Sponsor”), Wynnchurch Capital, L.P. and management acquired all of the outstanding equity interests of Latham Topco., Inc., a newly incorporated entity in the State of Delaware. Latham Topco, Inc. changed its name to Latham Group, Inc. on March 3, 2021. Initial Public Offering, Reorganization and Stock Split 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 “Closing of the IPO”), the Company’s parent entity, Parent, merged with and into Latham Group, Inc., with Latham Group, Inc. surviving the merger (the “Reorganization”). The purpose of the Reorganization was to allow existing indirect owners of the Company to become direct shareholders of the Company. In connection with the Reorganization, Class A units of the Parent (the “Class A units”) were converted into shares of the Company’s common stock, and Class B units of the Parent (the “Class B units”) were converted into an economically equivalent number of restricted and unrestricted shares of the Company’s common stock on a pro rata basis. The Reorganization was accounted for as an equity reorganization between entities under common control. As the Class A units were akin to common shares as all holders held economic interest of the Parent and were entitled to distributions on a pro rata basis to their ownership, the conversion of Class A units to common shares as part of the Reorganization was considered to be equivalent to a stock split , which requires retrospective treatment for accounting purposes. Accordingly, all share and per share amounts in these condensed consolidated financial statements and related notes have been retroactively restated, where applicable, to give effect to the conversion ratio applied in connection with the Reorganization. Class B units were historically accounted for as compensatory arrangements in accordance with ASC 718 “ Compensation – Stock Compensation |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Oct. 02, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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 consolidated balance sheet at December 31, 2020 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements as of October 2, 2021 and for the fiscal quarters and three fiscal quarters ended October 2, 2021 and September 26, 2020 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 year ended December 31, 2020 included in the Company’s Registration Statement on Form S-1, as amended, File No. 333-254930 on file with the SEC. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s financial position as of October 2, 2021 and results of operations for the fiscal quarters and three fiscal quarters ended October 2, 2021 and September 26, 2020 and cash flows for the three fiscal quarters ended October 2, 2021 and September 26, 2020 have been made. The Company’s results of operations for the fiscal quarter and three fiscal quarters ended October 2, 2021 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2021. 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 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. Historically, 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. Accounting Policies Refer to the Company’s final prospectus for the IPO filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on April 26, 2021 (“the Prospectus”) for a discussion of the Company’s accounting policies, as updated below. Stock-based Compensation Stock-based compensation is measured and recognized based on the grant date fair value of the awards. The Class B units of the Parent were granted to employees in the form of Profits Interest Units (“PIUs”). The Company determined the grant date fair value of PIUs using the Black-Scholes option pricing model. 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 underlying common stock. The fair value of the awards is expensed 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. 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 PIUs 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 implied volatility. The Company utilized a dividend yield of zero, as it had 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. Contemporaneously with the pricing of the Company’s IPO, on April 22, 2021, the Company effected its Omnibus Incentive Plan in which it granted to certain employees of the Company restricted stock awards, restricted stock units and option awards inclusive of the as converted Class B units as a result of the Reorganization (see Note 14). 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. 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 from equity method investment in the condensed 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 condensed consolidated statements of operations on a three-month lag. The Company recorded its interest in the net earnings of Premier Pools & Spas of $0.8 million and $1.8 million, respectively, for the fiscal quarter and three fiscal quarters ended October 2, 2021, which included a $0.1 million and $0.2 million adjustment for the amortization of basis differences, within earnings from equity method investment in the condensed consolidated statements of operations during the fiscal quarter and three fiscal quarters ended October 2, 2021. As the Company initially invested in Premier Pools & Spas on October 30, 2020, there was no earnings from equity method investment recorded during the fiscal quarter and the three fiscal quarters ended September 26, 2020. The Company received distributions of $1.1 million and $2.2 million during the fiscal quarter and three fiscal quarters ended October 2, 2021, respectively. For presentation in the condensed 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 be 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 condensed consolidated statements of operations in the period the impairment occurs. 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 February 2016, the FASB issued ASU 2016-02 , Leases (Topic 842) recognized based on an effective interest method or on a straight-line basis over the term of the lease. In addition, a lessee is required to record (i) a right-of-use asset and a lease liability on its balance sheet for all leases with accounting lease terms of more than 12 months regardless of whether it is an operating or financing lease and (ii) lease expense in its consolidated statement of operations for operating leases and amortization and interest expense in its consolidated statement of operations for financing leases. Leases with a term of 12 months or less may be accounted for similar to prior guidance for operating leases today. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments — Credit Losses Financial Instruments — Credit Losses (Topic 326): Targeted Transition Relief In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In January 2020, the FASB issued ASU 2020-01, Investments — Equity Securities (Topic 321), Investments — Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) interim periods within those reporting periods. The Company is currently evaluating the impact that the adoption of ASU 2020-01 will have on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Oct. 02, 2021 | |
ACQUISITIONS | |
ACQUISITIONS | 3. ACQUISITIONS GL International, LLC On October 22, 2020, Latham Pool Products acquired GL International, LLC (“GLI”) for a total purchase price of $79.7 million (the “GLI Acquisition”). The results of GLI’s operations have been included in the condensed consolidated financial statements since that date. GLI specializes in manufacturing custom pool liners and safety covers. As a result, this acquisition expanded the Company’s liner and safety cover product offerings. In connection with the GLI Acquisition, consideration paid was $79.7 million in cash, or $74.7 million net of cash acquired of $5.0 million, and excluding a net working capital adjustment receivable of $0.8 million. The net working capital adjustment receivable was settled during fiscal quarter ended April 3, 2021. The cash consideration was funded from existing cash on hand. The Company incurred $2.4 million in transaction costs. The Company accounted for the GLI Acquisition using the acquisition method of accounting in accordance with FASB ASC 805, Business Combinations (“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, dealer relationships were valued using the multi-period excess earnings method, whereas trade names 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 GLI Acquisition: (in thousands) October 22, 2020 Total consideration $ 79,743 Allocation of purchase price: Cash 5,007 Trade receivables 10,639 Inventories 11,854 Prepaid expenses and other current assets 3,949 Property and equipment 1,402 Intangible assets 46,700 Total assets acquired 79,551 Accounts payable 3,536 Accrued expenses and other current liabilities 8,853 Other long-term liabilities 524 Total liabilities assumed 12,913 Total fair value of net assets acquired, excluding goodwill: 66,638 Goodwill $ 13,105 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 $13.1 million. Goodwill resulting from the GLI Acquisition was attributable to the expanded market share and product offerings. Goodwill resulting from the GLI 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 Period Definite-lived intangible assets: (in thousands) (in years) Trade names $ 9,500 9 Dealer relationships 37,200 8 $ 46,700 Pro Forma Financial Information (Unaudited) The following pro forma financial information presents the statements of operations of the Company combined with GLI as if the acquisition occurred on January 1, 2020. 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, 2020 and is not necessarily indicative of the Company’s future financial results. Fiscal Quarter Ended Three Fiscal Quarters Ended (in thousands) September 26, 2020 September 26, 2020 Net sales $ 152,508 $ 345,200 Net loss $ 22,598 $ 21,952 The pro forma financial information presented above has been calculated after adjusting for the results of the GLI Acquisition for the fiscal quarter and the three fiscal quarters ended September 26, 2020 to reflect the accounting 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. |
EQUITY METHOD INVESTMENT
EQUITY METHOD INVESTMENT | 9 Months Ended |
Oct. 02, 2021 | |
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 condensed consolidated statements of operations during the fiscal quarter ended October 2, 2021. The Company’s post-sale ownership interest in Premier Pools & Spas is 20.1%. The Company concluded, both before and after the sale of common units on August 6, 2021, that it holds common stock of Premier Pools & Spas and has the ability to exercise significant influence over Premier Pools & Spas but does not have a controlling financial interest. Accordingly, the Company accounts for this investment using the equity method of accounting. The Company’s proportionate share of the earnings or losses of the investee are reported as a separate line in the condensed 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”). 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 package pool products. The initial term of the supply agreement is ten years. For the first three years of the supply agreement, 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. As of October 2, 2021, the Company’s carrying amount for the equity method investment in Premier Pools & Spas was $22.0 million. During the three fiscal quarters ended October 2, 2021, Premier Pools & Spas paid the Company dividends of $2.2 million that are presented on the condensed consolidated statement of cash flows as distribution received from equity method investment of $1.8 million and return of equity method investment of $0.4 million, respectively. The Company has elected a three-month financial reporting lag. The Company recorded its interest in net earnings of Premier Pools & Spas of $0.8 million and $1.8 million for the fiscal quarter and three fiscal quarters ended October 2, 2021, along with a basis difference adjustment of $0.1 million and $0.2 million, respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Oct. 02, 2021 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 5. 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 three fiscal quarters ended October 2, 2021 or September 26, 2020. 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 or remeasured to fair value when an impairment charge is recognized. Such fair value measurements are based predominantly on Level 2 and Level 3 inputs. Assets and liabilities measured at fair value on a recurring basis On May 31, 2019 (the “Acquisition Date”), Latham Pool Products acquired Narellan Group Pty Limited and its subsidiaries (collectively “Narellan”) for a total purchase price of $35.2 million (the “Narellan Acquisition”). In connection with the Narellan Acquisition, consideration paid included $20.2 million in cash, $7.6 million in equity consideration and $7.4 million of contingent consideration as of the Acquisition Date. The Company agreed to pay the contingent consideration in the form of cash and equity consideration to the seller if certain EBITDA targets were achieved for any of the trailing twelve months periods ended December 31, 2019, June 30, 2020 or the year ended December 31, 2020 (the “Contingent Consideration”). The fair value of the Contingent Consideration at the Acquisition Date was $7.4 million. On September 25, 2020, the Company amended the terms of the Narellan Share Purchase Agreement and settled the Contingent Consideration with the selling shareholders of Narellan based upon estimated EBITDA for the year ended December 31, 2020. The fair value of the Company’s Contingent Consideration was measured and recorded on the condensed consolidated balance sheets using Level 3 inputs because it was valued based on unobservable inputs and other estimation techniques due to the absence of quoted market prices. The Company valued the Contingent Consideration using a Monte Carlo simulation, which relied on management’s projections of EBITDA and the estimated probability of achieving such targets. Estimates of fair value are subjective in nature, involve uncertainties and matters of significant judgment, and are made at a specific point in time. Thus, changes in key assumptions from period to period could significantly affect the estimate of fair value. Pension Plan The fair value of the benefit plan assets related to the Company’s pension plan was historically measured and recorded on the condensed consolidated balance sheets using Level 2 inputs. During the fiscal quarter ended September 26, 2020, the Company terminated its defined benefit pension plan. 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 due to the short-term maturities of these instruments. Term loan The term loan 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 using, which are classified as Level 2 inputs. The following table sets forth the carrying amount and fair value of the term loan (in thousands): October 2, 2021 December 31, 2020 Carrying Estimated Carrying Estimated Value Fair Value Value Fair Value Term loan $ 234,201 $ 235,372 $ 221,496 $ 221,081 Interest rate swap The Company estimates the fair value of the interest rate swap (see Note 8) on a quarterly basis using Level 2 inputs, including the forward LIBOR 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 LIBOR curve. As of October 2, 2021 and December 31, 2020, the Company’s interest rate swap liability was $0.6 million and $0.3 million, respectively, which was recorded within other long-term liabilities on the condensed consolidated balance sheets. |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, NET | 9 Months Ended |
Oct. 02, 2021 | |
GOODWILL AND INTANGIBLE ASSETS, NET | |
GOODWILL AND INTANGIBLE ASSETS, NET | 6. GOODWILL AND INTANGIBLE ASSETS, NET Goodwill The carrying amount of goodwill as of October 2, 2021 and as of December 31, 2020 was $115.2 million and $115.8 million, respectively. The change in the carrying value during the three fiscal quarters ended October 2, 2021 was solely due to fluctuations in foreign currency exchange rates. Intangible Assets Intangible assets, net as of October 2, 2021 consisted of the following (in thousands): October 2, 2021 Gross Foreign Carrying Currency Accumulated Net Amount Translation Amortization Amount Trade names and trademarks $ 135,100 $ 476 $ 14,839 $ 120,737 Patented technology 16,126 70 4,772 11,424 Pool designs 5,728 286 956 5,058 Franchise relationships 1,187 59 694 552 Dealer relationships 160,376 23 27,434 132,965 Non-competition agreements 2,476 — 1,381 1,095 $ 320,993 $ 914 $ 50,076 $ 271,831 The Company recognized $5.5 million and $16.6 million of amortization expense related to intangible assets during the fiscal quarter and the three fiscal quarters ended October 2, 2021, respectively. Intangible assets, net as of December 31, 2020 consisted of the following (in thousands): December 31, 2020 Gross Foreign Carrying Currency Accumulated Net Amount Translation Amortization Amount Trade names and trademarks $ 135,100 $ 1,047 $ 10,258 $ 125,889 Patented technology 16,126 155 3,452 12,829 Pool designs 5,728 629 648 5,709 Franchise relationships 1,187 130 470 847 Dealer relationships 160,376 52 17,697 142,731 Non-competition agreements 2,476 — 1,008 1,468 $ 320,993 $ 2,013 $ 33,533 $ 289,473 The Company recognized $4.0 million and $12.2 million of amortization expense related to intangible assets during the fiscal quarter and the three fiscal quarters ended September 26, 2020, 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 Year Ended Amortization Expense Remainder of fiscal 2021 $ 5,415 2022 21,959 2023 21,768 2024 20,948 2025 20,791 Thereafter 180,950 $ 271,831 |
INVENTORIES, NET
INVENTORIES, NET | 9 Months Ended |
Oct. 02, 2021 | |
INVENTORIES, NET | |
INVENTORIES, NET | 7. INVENTORIES, NET Inventories, net consisted of the following (in thousands): October 2, 2021 December 31, 2020 Raw materials $ 57,165 $ 37,010 Finished goods 23,540 27,808 $ 80,705 $ 64,818 |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Oct. 02, 2021 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 8. LONG-TERM DEBT The components of the Company’s outstanding debt obligations consisted of the following (in thousands): October 2, 2021 December 31, 2020 Term loan $ 238,314 $ 228,147 Less: Unamortized discount and debt issuance costs (4,113) (6,651) Total debt 234,201 221,496 Less: Current portion of long-term debt (14,234) (13,042) Total long-term debt $ 219,967 $ 208,454 Revolving Credit Facility On December 18, 2018, the Latham Pool Products entered into an agreement (the “Credit Agreement”) with Nomura Corporate Funding Americas, LLC (“Nomura”) that included a revolving line of credit (the “Revolver”) and letters of credit (“Letters of Credit” or collectively with the Revolver, the “Revolving Credit Facility”), as well as a term loan (as described below). The Revolving Credit Facility is available to finance ongoing general corporate and working capital needs with the Revolver of up to $30.0 million. The Revolving Credit Facility matures on December 18, 2023. On April 27, 2021, upon completion of the IPO, the Company used $16.0 million of the net proceeds from the IPO to repay $16.0 million then outstanding on the Revolver. The Revolving Credit Facility allows 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 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 equal to the applicable margin times the actual daily amount by which the $30.0 million initial commitment exceeds the sum of the outstanding borrowings under the Revolver and outstanding Letters of Credit obligations. The applicable margin ranges 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 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 and make prepayments. As of October 2, 2021 and December 31, 2020, the Company was in compliance with all financial-related covenants related to the Credit Agreement. There were no amounts outstanding as of both October 2, 2021 and December 31, 2020, on the Revolving Credit Facility or Letters of Credit. Term Loan Facility On December 18, 2018, in connection with the Acquisition, the Company entered into the Credit Agreement with Nomura to borrow $215.0 million (the “Original Term Loan”). The Company incurred debt issuance costs of $11.5 million related to the transaction. The Original Term Loan was amended on May 29, 2019, to provide additional borrowings of $23.0 million at a discount of $0.7 million (the “First Amendment”) to fund the Narellan Acquisition. Any portion of the First Amendment not used to fund the Narellan Acquisition was required to be applied to repay the First Amendment in an aggregate amount equal to such portion of the First Amendment, without any premium or penalty. On August 6, 2020, the Company entered into a Form of Affiliated Lender Assignment and Assumption with Nomura (the “Assignment”). Under the Assignment, the Company repaid $5.0 million of the outstanding principal balance. On October 14, 2020, the Company entered into a subsequent amendment under the Original Term Loan with Nomura to borrow an additional $20.0 million (the “Second Amendment” and collectively with the Original Term Loan and the First Amendment, the “Term Loan”). The Company accounted for the borrowings under the Second Amendment as new debt and recorded $0.1 million of third-party costs as a direct reduction to the carrying amount of long-term debt on the condensed consolidated balance sheet. There were no financing costs incurred with the Second Amendment. The Term Loan has a maturity date of June 18, 2025. Interest and principal payments are due quarterly. On January 25, 2021, the Company entered into a subsequent amendment to the Term Loan with Nomura to borrow an additional $175.0 million (the “Third Amendment” and collectively with the “Term Loan”, the “Amended Term Loan”). In connection with the Third Amendment, the Company is required to repay the outstanding principal balance of the Amended Term Loan in fixed quarterly payments of $5.8 million, commencing March 31, 2021. The amendment did not change the maturity date of the Term Loan and the Amended Term Loan bears interest under the same terms as the Term Loan. The Company accounted for $165.0 million of the borrowings under the Third Amendment as new debt and $10.0 million of the borrowings under the Third Amendment as a debt modification. The Company recorded an aggregate of $1.2 million of debt issuance costs as a direct reduction to the carrying amount of long-term debt on the condensed consolidated balance sheet. During the fiscal quarter ended July 3, 2021, in accordance with the terms of the Amended Term Loan, the Company elected to change the terms of the prepayment schedule from an inverse application to a pro rata application and as a result the Company is required to repay the outstanding principal balance of the Amended Term Loan in fixed quarterly payments of $3.6 million, commencing June 30, 2021. The Amended Term Loan allowed for the $175.0 million of proceeds to be distributed to Class A unitholders. On February 2, 2021, the Company used the proceeds of the Amended Term Loan to repurchase and retire treasury stock of $64.9 million and to pay a dividend to Class A unitholders of $110.0 million. 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 Amended Term Loan. The Term Loan bears interest at (1) a base rate equal to the highest of (i) the Federal Funds Rate plus 1∕2 of 1% As of October 2, 2021, the unamortized debt issuance costs and discount on the Term Loan were $2.9 million and $1.2 million, respectively. As of December 31, 2020, the unamortized debt issuance costs and discount on the Term Loan were $6.3 million and $0.4 million, respectively. The effective interest rate was 7.24% at October 2, 2021. Interest rate risk associated with the Company’s Credit Agreement is managed through an interest rate swap which the Company executed on April 30, 2020. The swap has an effective date of May 18, 2020 and a termination date of May 18, 2023. Under the terms of the swap, the Company fixed its LIBOR borrowing rate at 0.442% on a notional amount of $200.0 million. The interest rate swap is not designated as a hedging instrument for accounting purposes (see Note 2 and Note 5). 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 Facility Remainder of fiscal 2021 $ 3,558 2022 14,234 2023 14,234 2024 14,234 2025 192,054 $ 238,314 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. |
PRODUCT WARRANTIES
PRODUCT WARRANTIES | 9 Months Ended |
Oct. 02, 2021 | |
PRODUCT WARRANTIES | |
PRODUCT WARRANTIES | 9. PRODUCT WARRANTIES The warranty reserve activity consisted of the following (in thousands): Three Fiscal Quarters Ended October 2, 2021 September 26, 2020 Balance at the beginning of the year $ 2,882 $ 2,846 Accruals for warranties issued 4,369 2,270 Less: Settlements made (in cash or in kind) (3,825) (2,501) Balance at the end of the year $ 3,426 $ 2,615 |
NET SALES
NET SALES | 9 Months Ended |
Oct. 02, 2021 | |
NET SALES | |
NET SALES | 10. NET SALES The following table sets forth the Company’s disaggregation of net sales by product line (in thousands): Fiscal Quarter Ended Three Fiscal Quarters Ended October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020 In-ground Swimming Pools $ 84,060 $ 78,094 $ 285,704 $ 169,681 Covers 44,125 25,695 94,354 53,528 Liners 33,772 23,723 111,534 68,259 $ 161,957 $ 127,512 $ 491,592 $ 291,468 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Oct. 02, 2021 | |
INCOME TAXES | |
INCOME TAXES | 11. INCOME TAXES The effective income tax rate for the fiscal quarter and three fiscal quarters ended October 2, 2021 was (223.8)% and (39.3)%, respectively, compared to 24.7% and 30.6% for the fiscal quarter and three fiscal quarters ended September 26, 2020, respectively. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the fiscal quarter and three fiscal quarters ended October 2, 2021 was primarily attributable to the discrete impact of stock compensation expense pursuant to the Reorganization. The results for the quarter include pre-tax stock compensation expense of $25.4 million and $98.9 million for fiscal quarters and three fiscal quarters ended October 2, 2021 related to the Reorganization for which there is no associated tax benefit. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the fiscal quarter and three fiscal quarters ended September 26, 2020 was impacted by a variety of factors, primarily stemming from impact of state taxes. The pre-tax income for three fiscal quarters ended September 26, 2020 included losses in tax jurisdictions for which the company did not record a tax benefit, which increased the effective income tax rate for the fiscal quarter ended September 26, 2020. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 9 Months Ended |
Oct. 02, 2021 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | 12. SHAREHOLDERS’ EQUITY Equity Structure Prior to Reorganization Prior to the IPO and the Reorganization, the Parent owned 100% of the issued and outstanding common stock of the Company. The capital structure of the Parent consisted of two different classes of limited partnership interests, Class A and Class B units (profits interests). Prior to the Reorganization, none of the Class B units would have been vested for accounting purposes due to the Parent’s $0 Repurchase Right, which applied in the event of a voluntary termination or termination without cause, since it functions as a vesting condition. Equity Structure Subsequent to the Reorganization On April 13, 2021, the Company’s certificate of incorporation was amended, which amended and restated certain terms of the certificate of incorporation. Under the amended certificate of incorporation, the Company had 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 As a part of the equity Reorganization, on April 22, 2021, 194,207,115 Class A units converted into 97,187,596 shares of common stock and 26,158,894 Class B units converted into 4,145,987 shares of common stock and 8,340,126 shares of unvested restricted stock. Refer to Note 1 for detail regarding the Company’s Reorganization and conversion of Class A and Class B units to common and restricted shares. 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. As of October 2, 2021 and December 31, 2020, 112,153,832 and 118,854,249 shares of common stock are issued and outstanding for accounting purposes, respectively. |
PROFITS INTEREST UNITS
PROFITS INTEREST UNITS | 9 Months Ended |
Oct. 02, 2021 | |
PROFITS INTEREST UNITS | |
PROFITS INTEREST UNITS | 13. PROFITS INTEREST UNITS Prior to the Reorganization, the Company’s Parent granted 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. The following table summarizes the activity for all PIUs during the three fiscal quarters ended October 2, 2021 and the year ended December 31, 2020: Weighted-Average Grant-Date Number of PIUs Fair Value Balance at January 1, 2020 21,734,170 $ 0.60 Granted 7,843,107 0.35 Forfeited (2,152,315) 0.43 Balance at December 31, 2020 27,424,962 Granted — Forfeited (1,266,068) 0.34 Balance at April 21, 2021 26,158,894 Converted at IPO in connection with the Reorganization (26,158,894) $ 0.43 Balance at October 2, 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 cancellation of the original award and a new grant under the revised terms. A cumulative catch-up charge of $1.1 million was recorded during the fiscal 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. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Oct. 02, 2021 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 14. STOCK-BASED COMPENSATION On April 12, 2021, the Company’s stockholders approved the 2021 Omnibus Incentive Plan (the “Omnibus Incentive Plan”), which became effective on April 22, 2021, upon pricing of the IPO. The Omnibus Incentive 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 aggregate number of shares reserved for issuance under the Omnibus Incentive Plan is 13,170,212 shares. The maximum grant date fair value of cash and equity awards that may be awarded to a non-employee director under the Omnibus Incentive Plan during any one fiscal year, together with any cash fees paid to such non-employee director during such fiscal year, will be $750 thousand. Contemporaneously with the pricing of the Company’s IPO, on April 22, 2021 the Company granted 8,340,126 of restricted stock awards, 341,301 of restricted stock units and 886,862 of option awards under the Omnibus Incentive Plan to employees of the Company. Of the 8,340,126 restricted stock awards granted, (i) 6,799,414 vest every six months in equal installments beginning on December 27, 2021 and ending on December 27, 2023, and (ii) 1,540,712 vest every six months in equal installments, beginning on December 27, 2021 and ending on December 27, 2024. Of the 341,301 restricted stock unit awards granted, (i) 251,828 vest 1/3 1/3 1/3 Stock-based compensation expense for the fiscal quarters and three fiscal quarters ended October 2, 2021 was $27.6 million and $104.6 million, respectively. Stock-based compensation expense for the fiscal quarters and three fiscal quarters ended September 26, 2020 was and $1.0 million and $1.4 million, respectively. Stock-based compensation expense of $1.9 million and $25.7 was recorded in cost of sales and selling, general and administrative expense, respectively, for the fiscal quarter ended October 2, 2021. Stock-based compensation expense of $6.8 million and $97.8 was recorded in cost of sales and selling, general and administrative expense, respectively, for the three fiscal quarters ended October 2, 2021. Stock-based compensation expense for the fiscal quarters and three fiscal quarters ended September 26, 2020 was recorded in selling, general and administrative expense on the condensed consolidated statements of operations. Of the $104.6 million of stock-based compensation expense recorded during the three fiscal quarters ended October 2, 2021, $0.5 million was due to the accelerated vesting of restricted stock and $49.0 million was due to the modification as a result of the Reorganization. Refer to Note 12 above for detail regarding the Company’s equity-based awards issued in the form of PIUs prior to the Reorganization and IPO. As of October 2, 2021, total unrecognized stock-based compensation expense related to all unvested stock-based awards of $106.2 million, which is expected to be recognized over a weighted-average period of 1.49 years. 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: Three Fiscal Quarters Ended October 2, 2021 Risk-free interest rate 0.63 % Expected volatility 38.16 % Expected term (in years) 6.25 Expected dividend yield 0.00 % Restricted Stock Awards The following table represents the Company’s restricted stock awards activity during the three fiscal quarters ended October 2, 2021: Weighted- Average Grant- Shares Date Fair Value Outstanding at January 1, 2021 — $ — Granted 8,340,126 19.00 Vested (84,687) — Forfeited (559,682) 19.00 Outstanding at October 2, 2021 7,695,757 $ 19.00 Restricted Stock Units The following table represents the Company’s restricted stock units activity during the three fiscal quarters ended October 2, 2021: Weighted- Average Grant- Shares Date Fair Value Outstanding at January 1, 2021 — $ — Granted 341,301 19.00 Vested — — Forfeited (16,767) 19.00 Outstanding at October 2, 2021 324,534 $ 19.00 Stock Options The following table represents the Company’s stock option activity during the three fiscal quarters ended October 2, 2021: Weighted- Weighted- Average Average Exercise Price Remaining Aggregate Shares per Share Contract Term Intrinsic Value (in years) (in thousands) Outstanding on January 1, 2021 — $ — — $ — Granted 886,862 19.00 Exercised — Forfeited (81,092) Outstanding at October 2, 2021 805,770 $ 19.00 9.55 $ — Vested and expected to vest at October 2, 2021 805,770 $ 19.00 9.55 $ — Options exercisable at October 2, 2021 — — — — 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 The weighted average grant-date fair value of stock options granted during the three fiscal quarters ended October 2, 2021 was $7.20 per share. |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 9 Months Ended |
Oct. 02, 2021 | |
NET INCOME (LOSS) PER SHARE | |
NET INCOME (LOSS) PER SHARE | 15. NET INCOME (LOSS) PER SHARE Basic and diluted net income (loss) per share attributable to common stockholders was calculated as follows (in thousands, except share and per share data): Fiscal Quarter Ended Three Fiscal Quarters Ended October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020 Numerator: Net (loss) income attributable to common stockholders $ (11,296) $ 17,740 $ (56,361) $ 18,703 Denominator: Weighted-average common shares outstanding Basic 112,153,832 97,393,002 110,121,240 96,665,708 Diluted 112,153,832 98,011,795 110,121,240 97,122,885 Net (loss) income per share attributable to common stockholders: Basic $ (0.10) $ 0.18 $ (0.51) $ 0.19 Diluted $ (0.10) $ 0.18 $ (0.51) $ 0.19 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 income (loss) per share because the effect was anti-dilutive: Fiscal Quarter Ended Three Fiscal Quarters Ended October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020 Restricted stock awards 2,952,422 47,690 6,813,166 47,446 Restricted stock units 146,398 — 84,866 — Stock options — — 4,235 — |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Oct. 02, 2021 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 16. 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 has served on the Company’s board of directors since December 9, 2020. During the three fiscal quarters ended October 2, 2021 and the year ended December 31, 2020, the Company incurred $1.9 million and $0.5 million, respectively, associated with services performed by BrightAI, which is recorded as construction in progress within property and equipment, net on the condensed consolidated balance sheet as of October 2, 2021. As of October 2, 2021 and December 31, 2020, the Company had accounts payable - related party to BrightAI of $1.1 million and $0.5 million, respectively. There were no services rendered by BrightAI during the three fiscal quarters ended September 26, 2020. Expense Reimbursement and Management Fees The Company had an expense reimbursement agreement (the “management fee arrangement”) with the Sponsor and Wynnchurch Capital, L.P. for ongoing consulting and advisory services. The management fee arrangement provided for the aggregate payment of up to $1.0 million each year for reimbursement of expenses incurred with services provided and, depending on the extent of services provided, management fees. The management fee arrangement terminated upon consummation of the Company’s IPO. 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. There were no management fees incurred by the Company during the three fiscal quarters ended October 2, 2021 and September 26, 2020. The Company reimbursed less than $0.1 million of out-of-pocket costs and expenses to the Sponsor and Wynnchurch Capital, L.P. during both the three fiscal quarters ended October 2, 2021 and September 26, 2020. As of October 2, 2021, there were no outstanding amounts payable to the Sponsor and Wynnchurch Capital, L.P. As of September 26, 2020, there was less than $0.1 million outstanding amounts payable to the Sponsor and Wynnchurch Capital, L.P. Operating Lease In May 2019, in connection with the Narellan Acquisition, the Company assumed an operating lease for the manufacture, sale and storage of swimming pools and associated equipment with Acquigen Pty Ltd, which is owned by an employee who is also a shareholder of the Company. The lease expires in June 2028. As of October 2, 2021 and December 31, 2020, future minimum lease payments related to this lease totaled $3.6 million and $4.2 million, respectively. The Company recognized $0.1 million of rent expense related to this lease during each of the fiscal quarters ended October 2, 2021 and September 26, 2020, as well as $0.4 million and $0.3 million of rent expense during the three fiscal quarters ended October 2, 2021 and September 26, 2020, which is recognized within selling, general and administrative expense on the condensed consolidated statements of operations. |
SEGMENT AND GEOGRAPHIC INFORMAT
SEGMENT AND GEOGRAPHIC INFORMATION | 9 Months Ended |
Oct. 02, 2021 | |
SEGMENT AND GEOGRAPHIC INFORMATION | |
SEGMENT AND GEOGRAPHIC INFORMATION | 17. SEGMENT AND GEOGRAPHIC INFORMATION Segment Information During 2020, the Company made operational changes in how its CODM manages the business including organizational alignment, performance assessment and resource allocation. The segment disclosure is based on the intention to provide the users of the financial statements with a view of the business from the Company’s perspective. The Company conducts its business as one operating 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): Fiscal Quarter Ended Three Fiscal Quarters Ended October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020 Net sales United States $ 123,477 $ 102,663 $ 385,259 $ 234,439 Canada 28,103 16,785 76,619 38,197 Australia 6,330 5,439 18,581 13,187 New Zealand 1,749 941 5,277 2,357 Other 2,298 1,684 5,856 3,288 Total $ 161,957 $ 127,512 $ 491,592 $ 291,468 Our long-lived assets by geographic area, which consist of property and equipment, net assets were as follows (in thousands): October 2, December 31, 2021 2020 Long-lived assets United States $ 48,158 $ 37,680 Canada 4,358 3,050 Australia 4,394 4,979 New Zealand 1,857 1,648 Total $ 58,767 $ 47,357 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Oct. 02, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation and Unaudited Interim Financial Information | 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 consolidated balance sheet at December 31, 2020 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements as of October 2, 2021 and for the fiscal quarters and three fiscal quarters ended October 2, 2021 and September 26, 2020 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 year ended December 31, 2020 included in the Company’s Registration Statement on Form S-1, as amended, File No. 333-254930 on file with the SEC. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s financial position as of October 2, 2021 and results of operations for the fiscal quarters and three fiscal quarters ended October 2, 2021 and September 26, 2020 and cash flows for the three fiscal quarters ended October 2, 2021 and September 26, 2020 have been made. The Company’s results of operations for the fiscal quarter and three fiscal quarters ended October 2, 2021 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2021. |
Use of Estimates | 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 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 | 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. Historically, 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. |
Accounting Policies | Accounting Policies Refer to the Company’s final prospectus for the IPO filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on April 26, 2021 (“the Prospectus”) for a discussion of the Company’s accounting policies, as updated below. |
Stock-based Compensation | Stock-based Compensation Stock-based compensation is measured and recognized based on the grant date fair value of the awards. The Class B units of the Parent were granted to employees in the form of Profits Interest Units (“PIUs”). The Company determined the grant date fair value of PIUs using the Black-Scholes option pricing model. 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 underlying common stock. The fair value of the awards is expensed 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. 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 PIUs 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 implied volatility. The Company utilized a dividend yield of zero, as it had 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. Contemporaneously with the pricing of the Company’s IPO, on April 22, 2021, the Company effected its Omnibus Incentive Plan in which it granted to certain employees of the Company restricted stock awards, restricted stock units and option awards inclusive of the as converted Class B units as a result of the Reorganization (see Note 14). |
Equity Method Investments | 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. 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 from equity method investment in the condensed 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 condensed consolidated statements of operations on a three-month lag. The Company recorded its interest in the net earnings of Premier Pools & Spas of $0.8 million and $1.8 million, respectively, for the fiscal quarter and three fiscal quarters ended October 2, 2021, which included a $0.1 million and $0.2 million adjustment for the amortization of basis differences, within earnings from equity method investment in the condensed consolidated statements of operations during the fiscal quarter and three fiscal quarters ended October 2, 2021. As the Company initially invested in Premier Pools & Spas on October 30, 2020, there was no earnings from equity method investment recorded during the fiscal quarter and the three fiscal quarters ended September 26, 2020. The Company received distributions of $1.1 million and $2.2 million during the fiscal quarter and three fiscal quarters ended October 2, 2021, respectively. For presentation in the condensed 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 be 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 condensed consolidated statements of operations in the period the impairment occurs. |
Recently Issued Accounting Pronouncements | 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 February 2016, the FASB issued ASU 2016-02 , Leases (Topic 842) recognized based on an effective interest method or on a straight-line basis over the term of the lease. In addition, a lessee is required to record (i) a right-of-use asset and a lease liability on its balance sheet for all leases with accounting lease terms of more than 12 months regardless of whether it is an operating or financing lease and (ii) lease expense in its consolidated statement of operations for operating leases and amortization and interest expense in its consolidated statement of operations for financing leases. Leases with a term of 12 months or less may be accounted for similar to prior guidance for operating leases today. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments — Credit Losses Financial Instruments — Credit Losses (Topic 326): Targeted Transition Relief In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In January 2020, the FASB issued ASU 2020-01, Investments — Equity Securities (Topic 321), Investments — Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) interim periods within those reporting periods. The Company is currently evaluating the impact that the adoption of ASU 2020-01 will have on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
ACQUISITIONS | |
Summary of purchase price allocation | (in thousands) October 22, 2020 Total consideration $ 79,743 Allocation of purchase price: Cash 5,007 Trade receivables 10,639 Inventories 11,854 Prepaid expenses and other current assets 3,949 Property and equipment 1,402 Intangible assets 46,700 Total assets acquired 79,551 Accounts payable 3,536 Accrued expenses and other current liabilities 8,853 Other long-term liabilities 524 Total liabilities assumed 12,913 Total fair value of net assets acquired, excluding goodwill: 66,638 Goodwill $ 13,105 |
Schedule of purchase price to specific intangible asset categories | Fair Value Amortization Period Definite-lived intangible assets: (in thousands) (in years) Trade names $ 9,500 9 Dealer relationships 37,200 8 $ 46,700 |
Schedule of pro forma financial information | Fiscal Quarter Ended Three Fiscal Quarters Ended (in thousands) September 26, 2020 September 26, 2020 Net sales $ 152,508 $ 345,200 Net loss $ 22,598 $ 21,952 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Term loan | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Schedule of financial liabilities at fair value on a recurring basis | October 2, 2021 December 31, 2020 Carrying Estimated Carrying Estimated Value Fair Value Value Fair Value Term loan $ 234,201 $ 235,372 $ 221,496 $ 221,081 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
GOODWILL AND INTANGIBLE ASSETS, NET | |
Schedule of Intangible assets | Intangible assets, net as of October 2, 2021 consisted of the following (in thousands): October 2, 2021 Gross Foreign Carrying Currency Accumulated Net Amount Translation Amortization Amount Trade names and trademarks $ 135,100 $ 476 $ 14,839 $ 120,737 Patented technology 16,126 70 4,772 11,424 Pool designs 5,728 286 956 5,058 Franchise relationships 1,187 59 694 552 Dealer relationships 160,376 23 27,434 132,965 Non-competition agreements 2,476 — 1,381 1,095 $ 320,993 $ 914 $ 50,076 $ 271,831 Intangible assets, net as of December 31, 2020 consisted of the following (in thousands): December 31, 2020 Gross Foreign Carrying Currency Accumulated Net Amount Translation Amortization Amount Trade names and trademarks $ 135,100 $ 1,047 $ 10,258 $ 125,889 Patented technology 16,126 155 3,452 12,829 Pool designs 5,728 629 648 5,709 Franchise relationships 1,187 130 470 847 Dealer relationships 160,376 52 17,697 142,731 Non-competition agreements 2,476 — 1,008 1,468 $ 320,993 $ 2,013 $ 33,533 $ 289,473 |
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 Year Ended Amortization Expense Remainder of fiscal 2021 $ 5,415 2022 21,959 2023 21,768 2024 20,948 2025 20,791 Thereafter 180,950 $ 271,831 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
INVENTORIES, NET | |
Schedule of inventories, net | Inventories, net consisted of the following (in thousands): October 2, 2021 December 31, 2020 Raw materials $ 57,165 $ 37,010 Finished goods 23,540 27,808 $ 80,705 $ 64,818 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
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): October 2, 2021 December 31, 2020 Term loan $ 238,314 $ 228,147 Less: Unamortized discount and debt issuance costs (4,113) (6,651) Total debt 234,201 221,496 Less: Current portion of long-term debt (14,234) (13,042) Total long-term debt $ 219,967 $ 208,454 |
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 Facility Remainder of fiscal 2021 $ 3,558 2022 14,234 2023 14,234 2024 14,234 2025 192,054 $ 238,314 |
PRODUCT WARRANTIES (Tables)
PRODUCT WARRANTIES (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
PRODUCT WARRANTIES | |
Warranty reserve activity | The warranty reserve activity consisted of the following (in thousands): Three Fiscal Quarters Ended October 2, 2021 September 26, 2020 Balance at the beginning of the year $ 2,882 $ 2,846 Accruals for warranties issued 4,369 2,270 Less: Settlements made (in cash or in kind) (3,825) (2,501) Balance at the end of the year $ 3,426 $ 2,615 |
NET SALES (Tables)
NET SALES (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
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): Fiscal Quarter Ended Three Fiscal Quarters Ended October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020 In-ground Swimming Pools $ 84,060 $ 78,094 $ 285,704 $ 169,681 Covers 44,125 25,695 94,354 53,528 Liners 33,772 23,723 111,534 68,259 $ 161,957 $ 127,512 $ 491,592 $ 291,468 |
PROFITS INTEREST UNITS (Tables)
PROFITS INTEREST UNITS (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
PROFITS INTEREST UNITS | |
Summary of the activity for all PIUs | Weighted-Average Grant-Date Number of PIUs Fair Value Balance at January 1, 2020 21,734,170 $ 0.60 Granted 7,843,107 0.35 Forfeited (2,152,315) 0.43 Balance at December 31, 2020 27,424,962 Granted — Forfeited (1,266,068) 0.34 Balance at April 21, 2021 26,158,894 Converted at IPO in connection with the Reorganization (26,158,894) $ 0.43 Balance at October 2, 2021 — |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
STOCK-BASED COMPENSATION | |
Summary of significant assumptions used in the Black-Scholes option-pricing model on a weighted-average basis 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 option awards granted: Three Fiscal Quarters Ended October 2, 2021 Risk-free interest rate 0.63 % Expected volatility 38.16 % Expected term (in years) 6.25 Expected dividend yield 0.00 % |
Summary of restricted stock awards activity | The following table represents the Company’s restricted stock awards activity during the three fiscal quarters ended October 2, 2021: Weighted- Average Grant- Shares Date Fair Value Outstanding at January 1, 2021 — $ — Granted 8,340,126 19.00 Vested (84,687) — Forfeited (559,682) 19.00 Outstanding at October 2, 2021 7,695,757 $ 19.00 |
Summary of restricted stock units activity | The following table represents the Company’s restricted stock units activity during the three fiscal quarters ended October 2, 2021: Weighted- Average Grant- Shares Date Fair Value Outstanding at January 1, 2021 — $ — Granted 341,301 19.00 Vested — — Forfeited (16,767) 19.00 Outstanding at October 2, 2021 324,534 $ 19.00 |
Summary of stock option activity | The following table represents the Company’s stock option activity during the three fiscal quarters ended October 2, 2021: Weighted- Weighted- Average Average Exercise Price Remaining Aggregate Shares per Share Contract Term Intrinsic Value (in years) (in thousands) Outstanding on January 1, 2021 — $ — — $ — Granted 886,862 19.00 Exercised — Forfeited (81,092) Outstanding at October 2, 2021 805,770 $ 19.00 9.55 $ — Vested and expected to vest at October 2, 2021 805,770 $ 19.00 9.55 $ — Options exercisable at October 2, 2021 — — — — |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
NET INCOME (LOSS) PER SHARE | |
Basic and diluted earnings (loss) per share | Basic and diluted net income (loss) per share attributable to common stockholders was calculated as follows (in thousands, except share and per share data): Fiscal Quarter Ended Three Fiscal Quarters Ended October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020 Numerator: Net (loss) income attributable to common stockholders $ (11,296) $ 17,740 $ (56,361) $ 18,703 Denominator: Weighted-average common shares outstanding Basic 112,153,832 97,393,002 110,121,240 96,665,708 Diluted 112,153,832 98,011,795 110,121,240 97,122,885 Net (loss) income per share attributable to common stockholders: Basic $ (0.10) $ 0.18 $ (0.51) $ 0.19 Diluted $ (0.10) $ 0.18 $ (0.51) $ 0.19 |
Schedule of antidilutive securities excluded from computation of dilutive 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 income (loss) per share because the effect was anti-dilutive: Fiscal Quarter Ended Three Fiscal Quarters Ended October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020 Restricted stock awards 2,952,422 47,690 6,813,166 47,446 Restricted stock units 146,398 — 84,866 — Stock options — — 4,235 — |
SEGMENT AND GEOGRAPHIC INFORM_2
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
SEGMENT AND GEOGRAPHIC INFORMATION | |
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): Fiscal Quarter Ended Three Fiscal Quarters Ended October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020 Net sales United States $ 123,477 $ 102,663 $ 385,259 $ 234,439 Canada 28,103 16,785 76,619 38,197 Australia 6,330 5,439 18,581 13,187 New Zealand 1,749 941 5,277 2,357 Other 2,298 1,684 5,856 3,288 Total $ 161,957 $ 127,512 $ 491,592 $ 291,468 |
Long-lived assets by geographic area | Our long-lived assets by geographic area, which consist of property and equipment, net assets were as follows (in thousands): October 2, December 31, 2021 2020 Long-lived assets United States $ 48,158 $ 37,680 Canada 4,358 3,050 Australia 4,394 4,979 New Zealand 1,857 1,648 Total $ 58,767 $ 47,357 |
NATURE OF THE BUSINESS (Details
NATURE OF THE BUSINESS (Details) - USD ($) $ in Millions | Apr. 27, 2021 | Apr. 22, 2021 |
Class A units | ||
Subsequent Event [Line Items] | ||
Number of shares issued upon conversion of units | 97,187,596 | |
Class B units | ||
Subsequent Event [Line Items] | ||
Number of shares issued upon conversion of units | 4,145,987 | |
IPO | ||
Subsequent Event [Line Items] | ||
Common stock shares issued | 23,000,000 | |
Net proceeds from the IPO | $ 399.3 | |
Underwriters Option | ||
Subsequent Event [Line Items] | ||
Common stock shares issued | 3,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Schedule of Equity Method Investments [Line Items] | ||||
Interest in net earnings | $ 810 | $ 1,808 | ||
Distributions received from equity method investment | 1,808 | |||
Premier Pools & Spas | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Interest in net earnings | 800 | $ 0 | 1,800 | $ 0 |
Adjustment for the amortization of basis differences | 100 | 200 | ||
Distributions received from equity method investment | $ 1,100 | $ 2,200 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | Oct. 22, 2020 | Oct. 02, 2021 | Dec. 31, 2020 |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Goodwill | $ 115,158 | $ 115,750 | |
GL International, LLC | |||
Business Acquisition [Line Items] | |||
Total purchase price | $ 79,700 | ||
Total purchase price in cash | 79,700 | ||
Total purchase price, net of cash acquired | 74,700 | ||
Cash acquired | 5,000 | ||
Net working capital adjustment receivable excluded from consideration paid | 800 | ||
Transaction costs | 2,400 | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Total consideration | 79,743 | ||
Cash | 5,007 | ||
Trade receivables | 10,639 | ||
Inventories | 11,854 | ||
Prepaid expenses and other current assets | 3,949 | ||
Property and equipment | 1,402 | ||
Intangible assets | 46,700 | ||
Total assets acquired | 79,551 | ||
Accounts payable | 3,536 | ||
Accrued expenses and other current liabilities | 8,853 | ||
Other long-term liabilities | 524 | ||
Total liabilities assumed | 12,913 | ||
Total fair value of net assets acquired, excluding goodwill: | 66,638 | ||
Goodwill | $ 13,105 | $ 13,100 |
ACQUISITIONS - Financial Inform
ACQUISITIONS - Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Business Acquisition, Pro Forma Information [Abstract] | |||
Net sales | $ 152,508 | $ 345,200 | |
Net income (loss) | $ 22,598 | $ 21,952 | |
GL International, LLC | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Fair Value | $ 46,700 | ||
Trade names | GL International, LLC | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Fair Value | $ 9,500 | ||
Amortization Period | 9 years | ||
Dealer relationships | GL International, LLC | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Fair Value | $ 37,200 | ||
Amortization Period | 8 years |
EQUITY METHOD INVESTMENT (Detai
EQUITY METHOD INVESTMENT (Details) - USD ($) $ in Thousands | Oct. 30, 2020 | Dec. 31, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Aug. 06, 2021 |
Schedule of Equity Method Investments [Line Items] | |||||||
Proceeds from the sale of equity method investment | $ 6,796 | ||||||
Gain on sale of equity method investment | 3,856 | ||||||
Equity method investment | $ 25,384 | $ 21,997 | 21,997 | ||||
Distributions received from equity method investment | 1,808 | ||||||
Return of equity method investment | 400 | ||||||
Interest in net earnings | $ 810 | $ 1,808 | |||||
Premier Pools & Spas | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership percentage | 28.00% | 20.10% | 20.10% | ||||
Consideration paid | $ 25,400 | ||||||
Proceeds from the sale of equity method investment | $ 6,800 | ||||||
Gain on sale of equity method investment | 3,900 | ||||||
Term of the supply agreement | 3 months | 10 years | |||||
Period defined in agreement for calculating percentage of rebates | 3 years | ||||||
Equity method investment | 22,000 | $ 22,000 | |||||
Distributions received from equity method investment | 1,100 | 2,200 | |||||
Interest in net earnings | 800 | $ 0 | 1,800 | $ 0 | |||
Basis difference adjustment | $ 100 | $ 200 | |||||
Premier Pools & Spas | Premier Group Holdings Inc. | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership percentage | 29.80% |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and liabilities measured at fair value on a recurring basis (Details) $ in Millions | May 31, 2019USD ($) |
Contingent consideration | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Fair value of contingent consideration as of the acquisition date | $ 7.4 |
Change in the fair value of the Contingent Consideration | 7.4 |
Narellan Acquisition | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Cash consideration | 35.2 |
Narellan Acquisition | Contingent consideration | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Cash consideration | 20.2 |
Equity consideration | $ 7.6 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair value of financial instruments (Details) - Level 2 - USD ($) $ in Thousands | Oct. 02, 2021 | Dec. 31, 2020 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative liabilities | $ 600 | $ 300 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amount | 234,201 | 221,496 |
Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amount | $ 235,372 | $ 221,081 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS, NET - Goodwill (Details) - USD ($) $ in Thousands | Oct. 02, 2021 | Dec. 31, 2020 |
GOODWILL AND INTANGIBLE ASSETS, NET | ||
Carrying amount of goodwill | $ 115,158 | $ 115,750 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS, NET - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 320,993 | $ 320,993 | $ 320,993 | ||
Foreign Currency Translation | 914 | 2,013 | |||
Accumulated Amortization | 50,076 | 50,076 | 33,533 | ||
Net Amount | 271,831 | 271,831 | 289,473 | ||
Amortization of Intangible Assets | 5,486 | $ 4,047 | 16,560 | $ 12,173 | |
Trade names and trademarks | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 135,100 | 135,100 | 135,100 | ||
Foreign Currency Translation | 476 | 1,047 | |||
Accumulated Amortization | 14,839 | 14,839 | 10,258 | ||
Net Amount | 120,737 | 120,737 | 125,889 | ||
Patented technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 16,126 | 16,126 | 16,126 | ||
Foreign Currency Translation | 70 | 155 | |||
Accumulated Amortization | 4,772 | 4,772 | 3,452 | ||
Net Amount | 11,424 | 11,424 | 12,829 | ||
Pool designs | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 5,728 | 5,728 | 5,728 | ||
Foreign Currency Translation | 286 | 629 | |||
Accumulated Amortization | 956 | 956 | 648 | ||
Net Amount | 5,058 | 5,058 | 5,709 | ||
Franchise relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 1,187 | 1,187 | 1,187 | ||
Foreign Currency Translation | 59 | 130 | |||
Accumulated Amortization | 694 | 694 | 470 | ||
Net Amount | 552 | 552 | 847 | ||
Dealer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 160,376 | 160,376 | 160,376 | ||
Foreign Currency Translation | 23 | 52 | |||
Accumulated Amortization | 27,434 | 27,434 | 17,697 | ||
Net Amount | 132,965 | 132,965 | 142,731 | ||
Non-competition agreements | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 2,476 | 2,476 | 2,476 | ||
Accumulated Amortization | 1,381 | 1,381 | 1,008 | ||
Net Amount | $ 1,095 | $ 1,095 | $ 1,468 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS, NET - Amortization Expense (Details) - USD ($) $ in Thousands | Oct. 02, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of fiscal 2021 | $ 5,415 | |
2022 | 21,959 | |
2023 | 21,768 | |
2024 | 20,948 | |
2025 | 20,791 | |
Thereafter | 180,950 | |
Total | $ 271,831 | $ 289,473 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Thousands | Oct. 02, 2021 | Dec. 31, 2020 |
INVENTORIES, NET | ||
Raw materials | $ 57,165 | $ 37,010 |
Finished goods | 23,540 | 27,808 |
Inventory, Net, Total | $ 80,705 | $ 64,818 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Oct. 02, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Debt, principal amount outstanding | $ 0 | $ 0 |
Less: Unamortized discount and debt issuance costs | (4,113) | (6,651) |
Total debt | 234,201 | 221,496 |
Less: Current portion of long-term debt | (14,234) | (13,042) |
Total long-term debt | 219,967 | 208,454 |
Term loan | ||
Debt Instrument [Line Items] | ||
Debt, principal amount outstanding | 238,314 | 228,147 |
Less: Unamortized discount and debt issuance costs | $ (4,100) | $ (6,700) |
LONG-TERM DEBT - Revolving Cred
LONG-TERM DEBT - Revolving Credit Facility (Details) - USD ($) $ in Thousands | Apr. 27, 2021 | Dec. 18, 2018 | Oct. 02, 2021 | Sep. 26, 2020 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||||
Aggregate net proceeds received from IPO | $ 399,264 | $ 615 | |||
Repayment of Revolver credit facility | 16,000 | $ 5,000 | |||
Debt, principal amount outstanding | $ 0 | $ 0 | |||
Minimum | |||||
Debt Instrument [Line Items] | |||||
Commitment fee rate range, depending on leverage ratio | 0.375% | ||||
Maximum | |||||
Debt Instrument [Line Items] | |||||
Commitment fee rate range, depending on leverage ratio | 0.50% | ||||
Revolving credit facility | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | $ 30,000 | ||||
Aggregate net proceeds received from IPO | $ 16,000 | ||||
Repayment of Revolver credit facility | $ 16,000 | ||||
Eurocurrency | Minimum | |||||
Debt Instrument [Line Items] | |||||
Interest rate range, depending on leverage ratio | 4.50% | ||||
Eurocurrency | Maximum | |||||
Debt Instrument [Line Items] | |||||
Interest rate range, depending on leverage ratio | 4.75% | ||||
Base | Minimum | |||||
Debt Instrument [Line Items] | |||||
Interest rate range, depending on leverage ratio | 3.50% | ||||
Base | Maximum | |||||
Debt Instrument [Line Items] | |||||
Interest rate range, depending on leverage ratio | 3.75% |
LONG-TERM DEBT - Term Loan Faci
LONG-TERM DEBT - Term Loan Facility (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Apr. 27, 2021 | Feb. 02, 2021 | Jan. 25, 2021 | Oct. 14, 2020 | Aug. 06, 2020 | Dec. 18, 2018 | Oct. 02, 2021 | Oct. 02, 2021 | Sep. 26, 2020 | Dec. 31, 2020 | May 29, 2019 |
Debt Instrument [Line Items] | ||||||||||||
Additional borrowings under amendment | $ 23,000 | |||||||||||
Repayment of debt | $ 164,833 | $ 20,925 | ||||||||||
Aggregate net proceeds received from IPO | 399,264 | 615 | ||||||||||
Repayment of Revolver credit facility | 16,000 | $ 5,000 | ||||||||||
Proceeds used to pay dividend to Parent | $ 110,000 | |||||||||||
Discount and debt issuance costs | $ 4,113 | 4,113 | $ 6,651 | |||||||||
Effective interest rate | 7.24% | |||||||||||
Term loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Original term loan | $ 215,000 | |||||||||||
Debt issuance costs incurred | $ 1,200 | $ 100 | $ 11,500 | |||||||||
Additional borrowings under amendment | 175,000 | $ 20,000 | ||||||||||
Debt discount | $ 1,200 | $ 1,200 | 400 | 700 | ||||||||
Repayment of debt | $ 5,000 | |||||||||||
Repayment amount to be paid quarterly | $ 3,600 | 5,800 | ||||||||||
Aggregate net proceeds received from IPO | $ 152,700 | |||||||||||
Repayment of Revolver credit facility | $ 152,700 | |||||||||||
Borrowings treated as principal | 165,000 | |||||||||||
Borrowings treated as debt modification | 10,000 | |||||||||||
Proceeds used to repay note to Parent | $ 64,900 | $ 175,000 | ||||||||||
Principal payments calculated as percent of outstanding principal | 0.629% | |||||||||||
Outstanding Borrowings | $ 234,200 | 221,500 | ||||||||||
Discount and debt issuance costs | 4,100 | 4,100 | 6,700 | |||||||||
Unamortized debt issuance costs | 2,900 | 2,900 | 6,300 | |||||||||
Unamortized discount | $ 1,200 | $ 1,200 | $ 400 | $ 700 | ||||||||
Term loan | Federal Funds Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest added to the specified index rate | 0.50% | |||||||||||
Eurocurrency | Term loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest added to the specified index rate | 6.00% | |||||||||||
Base | Term loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest added to the specified index rate | 5.00% |
LONG-TERM DEBT - Interest rate
LONG-TERM DEBT - Interest rate swap (Details) - Interest rate swap $ in Millions | May 18, 2020USD ($) |
Derivative [Line Items] | |
LIBOR borrowings fixed interest rate | 0.442 |
LIBOR borrowings hedged | $ 200 |
LONG-TERM DEBT - Principal paym
LONG-TERM DEBT - Principal payments due (Details) - USD ($) $ in Thousands | Oct. 02, 2021 | Dec. 31, 2020 |
Principal payments due | ||
Total payments due | $ 0 | $ 0 |
Term loan | ||
Principal payments due | ||
Remainder of fiscal 2021 | 3,558 | |
2022 | 14,234 | |
2023 | 14,234 | |
2024 | 14,234 | |
2025 | 192,054 | |
Total payments due | $ 238,314 | $ 228,147 |
PRODUCT WARRANTIES (Details)
PRODUCT WARRANTIES (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance at the beginning of the year | $ 2,882 | $ 2,846 |
Accruals for warranties issued | 4,369 | 2,270 |
Less: Settlements made (in cash or in kind) | (3,825) | (2,501) |
Balance at the end of the year | $ 3,426 | $ 2,615 |
NET SALES (Details)
NET SALES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 161,957 | $ 127,512 | $ 491,592 | $ 291,468 |
In-ground swimming pools | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 84,060 | 78,094 | 285,704 | 169,681 |
Covers | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 44,125 | 25,695 | 94,354 | 53,528 |
Liners | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 33,772 | $ 23,723 | $ 111,534 | $ 68,259 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Oct. 02, 2021 | Jul. 03, 2021 | Apr. 03, 2021 | Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Effective income tax rate | (223.80%) | 24.70% | (39.30%) | 30.60% | ||||
Stock-based compensation expense | $ 27,603 | $ 75,511 | $ 1,464 | $ 978 | $ 240 | $ 224 | ||
Reorganization | ||||||||
Stock-based compensation expense | $ 25,400 | $ 98,900 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) $ / shares in Units, $ in Thousands | Apr. 27, 2021shares | Apr. 22, 2021$ / sharesshares | Apr. 13, 2021$ / sharesshares | Oct. 02, 2021USD ($)$ / sharesshares | Sep. 26, 2020USD ($) | Dec. 31, 2020$ / sharesshares |
Class of Stock [Line Items] | ||||||
Common stock, shares authorized | 900,000,000 | 500,000,000 | 900,000,000 | 500,000,000 | ||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Stock split ratio | 109,673.71 | |||||
Preferred stock shares authorized | 100,000,000 | 100,000,000 | 0 | |||
Preferred stock par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Aggregate net proceeds received from IPO | $ | $ 399,264 | $ 615 | ||||
Common stock issued and outstanding | 112,153,832 | 118,854,249 | ||||
Total authorized shares under certificate of incorporation | 1,000,000,000 | |||||
Latham Investment Holdings, LP | ||||||
Class of Stock [Line Items] | ||||||
Ownership interest of parent before reorganization | 100.00% | |||||
Class A units | ||||||
Class of Stock [Line Items] | ||||||
Number of units converted | 194,207,115 | |||||
Number of shares issued upon conversion of units | 97,187,596 | |||||
Class B units | ||||||
Class of Stock [Line Items] | ||||||
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 | |||||
IPO | ||||||
Class of Stock [Line Items] | ||||||
Common stock shares issued | 23,000,000 | |||||
Underwriters Option | ||||||
Class of Stock [Line Items] | ||||||
Common stock shares issued | 3,000,000 |
PROFITS INTEREST UNITS -Summary
PROFITS INTEREST UNITS -Summary of the activity for all PIUs (Details) - Performance-vesting Units - $ / shares | 2 Months Ended | 4 Months Ended | 5 Months Ended | 12 Months Ended |
Jul. 03, 2021 | Apr. 21, 2021 | Oct. 02, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||||
Balance at beginning of the period | 26,158,894 | 27,424,962 | 26,158,894 | 21,734,170 |
Granted | 7,843,107 | |||
Forfeited | (1,266,068) | (2,152,315) | ||
Converted at IPO in connection with the Reorganization | (26,158,894) | |||
Balance at end of the period | 26,158,894 | 27,424,962 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||
Outstanding at the beginning (in dollars per share) | $ 0.60 | |||
Weighted average grant date fair, Granted | 0.35 | |||
Weighted average grant date fair, Forfeited | $ 0.34 | $ 0.43 | ||
Weighted average grant date fair, Converted at IPO in connection with the Reorganization | $ 0.43 |
PROFITS INTEREST UNITS (Details
PROFITS INTEREST UNITS (Details) - USD ($) $ in Millions | Jan. 29, 2021 | Apr. 21, 2021 | Oct. 02, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Cumulative catch-up charge from modification | $ 0.5 | ||||
Terminated Employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Cumulative catch-up charge from modification | $ 1.1 | ||||
Performance-vesting Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Units forfeited | 1,266,068 | 2,152,315 | |||
Vested and nonvested units held at time of termination | 26,158,894 | 27,424,962 | 21,734,170 | ||
Performance-vesting Units | Terminated Employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Units forfeited | 1,055,057 | ||||
Time-vesting units | Terminated Employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vested and nonvested units held at time of termination | 527,528 | ||||
Vested units at time of termination, pre-modification | 211,011 | ||||
Accelerated vesting, number of units | 105,506 | ||||
Vested units at time of termination, after modification | 316,517 |
PROFITS INTEREST UNITS - Additi
PROFITS INTEREST UNITS - Additional Information (Details) - Class B units | Apr. 22, 2021shares |
Class of Stock [Line Items] | |
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 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) $ in Thousands | Apr. 12, 2021USD ($)shares |
STOCK-BASED COMPENSATION | |
Maximum aggregate number of shares reserved for issuance | shares | 13,170,212 |
Maximum grant date fair value of cash and equity awards that may be awarded to a non-employee director | $ | $ 750 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 22, 2021 | Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expiration term | 10 years | ||||
Stock-based compensation expense | $ 27.6 | $ 1 | $ 104.6 | $ 1.4 | |
Stock-based compensation expense due to accelerated vesting of restricted stock | 0.5 | ||||
Stock-based compensation expense due to the modification | 49 | ||||
Total unrecognized stock-based compensation expense | 106.2 | $ 106.2 | |||
Total unrecognized stock-based compensation expense expected to be recognized over a weighted-average period | 1 year 5 months 26 days | ||||
weighted average grant-date fair | $ 7.20 | ||||
Cost of sales | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | 1.9 | $ 6.8 | |||
Selling, general and administrative expenses | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 25.7 | $ 97.8 | |||
Vest every six months in equal installments beginning on December 27, 2021 and ending on December 27, 2023 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of awards other than options vested | 6,799,414 | ||||
Vest every six months in equal installments, beginning on December 27, 2021 and ending on December 27, 2024 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of awards other than options vested | 1,540,712 | ||||
Vest 1/3 on the nine-month anniversary of the Closing of the IPO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of awards other than options vested | 251,828 | ||||
Vesting percentage | 33.33% | ||||
Vest 1/3 on the first anniversary of the Closing of the IPO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 33.33% | ||||
Vest 1/3 on the two-year anniversary of the Closing of the IPO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 33.33% | ||||
Vest on the first anniversary of the Closing of the IPO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of awards other than options vested | 22,367 | ||||
Vest on the nine-month anniversary of the Closing of the IPO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of awards other than options vested | 51,316 | ||||
Vest evenly on each of the first three anniversaries of the Closing of the IPO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of awards other than options vested | 15,790 | ||||
Vest 25% annually on each of the first four anniversaries of the Closing of the IPO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 25.00% | ||||
Restricted stock awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted | 8,340,126 | 8,340,126 | |||
Number of awards other than options vested | 84,687 | ||||
Restricted stock awards | Vest every six months in equal installments beginning on December 27, 2021 and ending on December 27, 2023 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted | 8,340,126 | ||||
Restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted | 341,301 | 341,301 | |||
Option awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of options granted | 886,862 | 886,862 | |||
Strike price | $ 19 | ||||
Option awards | Vest 25% annually on each of the first four anniversaries of the Closing of the IPO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of options granted | 886,862 |
STOCK-BASED COMPENSATION - Weig
STOCK-BASED COMPENSATION - Weighted average basis for fair value option award granted (Details) | 9 Months Ended |
Oct. 02, 2021 | |
STOCK-BASED COMPENSATION | |
Risk-free interest rate | 0.63% |
Expected volatility | 38.16% |
Expected term (in years) | 6 years 3 months |
Expected dividend yield | 0.00% |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Awards (Details) - Restricted stock awards - $ / shares | Apr. 22, 2021 | Oct. 02, 2021 |
Shares | ||
Granted | 8,340,126 | 8,340,126 |
Vested | (84,687) | |
Forfeited | (559,682) | |
Outstanding at the end | 7,695,757 | |
Weighted-Average Grant-Date Fair Value | ||
Granted (in dollars per share) | $ 19 | |
Forfeited (in dollars per share) | 19 | |
Outstanding at the end (in dollars per share) | $ 19 |
STOCK-BASED COMPENSATION - Re_2
STOCK-BASED COMPENSATION - Restricted Stock Units (Details) - Restricted stock units - $ / shares | Apr. 22, 2021 | Oct. 02, 2021 |
Shares | ||
Granted | 341,301 | 341,301 |
Forfeited | (16,767) | |
Outstanding at the end | 324,534 | |
Weighted-Average Grant-Date Fair Value | ||
Granted (in dollars per share) | $ 19 | |
Forfeited (in dollars per share) | 19 | |
Outstanding at the end (in dollars per share) | $ 19 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Options (Details) - Option awards - USD ($) $ / shares in Units, $ in Thousands | Apr. 22, 2021 | Oct. 02, 2021 | Dec. 31, 2020 |
Shares | |||
Outstanding at the beginning | 0 | ||
Granted | 886,862 | 886,862 | |
Forfeited | (81,092) | ||
Outstanding at the end | 805,770 | 0 | |
Vested and expected to vest at the end | 805,770 | ||
Options exercisable at the end | 0 | ||
Weighted-Average Exercise Price per Share | |||
Outstanding at the beginning (in dollars per share) | $ 0 | ||
Granted (in dollars per share) | 19 | ||
Outstanding at the end (in dollars per share) | 19 | $ 0 | |
Vested and expected to vest at the end (in dollars per share) | 19 | ||
Options exercisable at the end (in dollars per share) | $ 0 | ||
Weighted-Average Remaining Contract Term | |||
Outstanding at the end (in years) | 9 years 6 months 18 days | 0 years | |
Vested and expected to vest at the end (in years) | 9 years 6 months 18 days | ||
Options exercisable at the end (in years) | 0 years | ||
Outstanding at the end (in dollars) | $ 0 | ||
Options exercisable at the end (in dollars) | $ 0 |
NET INCOME (LOSS) PER SHARE - B
NET INCOME (LOSS) PER SHARE - Basic and diluted net income (loss) per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Oct. 02, 2021 | Jul. 03, 2021 | Apr. 03, 2021 | Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Numerator: | ||||||||
Net income (loss) attributable to common stockholders | $ (11,296) | $ (53,598) | $ 8,533 | $ 17,740 | $ 16,414 | $ (15,451) | $ (56,361) | $ 18,703 |
Weighted average common shares outstanding: | ||||||||
Basic | 112,153,832 | 97,393,002 | 110,121,240 | 96,665,708 | ||||
Diluted | 112,153,832 | 98,011,795 | 110,121,240 | 97,122,885 | ||||
Net (loss) income per share attributable to common stockholders: | ||||||||
Basic | $ (0.10) | $ 0.18 | $ (0.51) | $ 0.19 | ||||
Diluted | $ (0.10) | $ 0.18 | $ (0.51) | $ 0.19 |
NET INCOME (LOSS) PER SHARE - A
NET INCOME (LOSS) PER SHARE - Antidilutive securities (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Restricted stock awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted net income (loss) pe share | 2,952,422 | 47,690 | 6,813,166 | 47,446 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted net income (loss) pe share | 146,398 | 84,866 | ||
Option awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted net income (loss) pe share | 4,235 |
RELATED PARTY TRANSACTIONS - Br
RELATED PARTY TRANSACTIONS - Bright AI Services (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
Bright AI Services | Development Of Internal Use Software | ||
Related Party Transaction [Line Items] | ||
Costs incurred | $ 1.9 | $ 0.5 |
RELATED PARTY TRANSACTIONS - Pu
RELATED PARTY TRANSACTIONS - Purchase of Treasury Stock (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jul. 03, 2021 | Apr. 03, 2021 | Jun. 27, 2020 | Mar. 28, 2020 | Oct. 02, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | ||||||
Purchases and retirement of treasury stock | $ 216,700 | $ 64,938 | $ 176 | $ 400 | ||
Parent | ||||||
Related Party Transaction [Line Items] | ||||||
Purchases and retirement of treasury stock (in shares) | 1.1 | |||||
Purchases and retirement of treasury stock | $ 500 |
RELATED PARTY TRANSACTIONS - Ex
RELATED PARTY TRANSACTIONS - Expense Reimbursement and Management Fees (Details) - Sponsor - Management Fee Arrangement - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Related Party Transaction [Line Items] | ||
Maximum annual reimbursement | $ 1,000 | |
Management fees incurred | 0 | $ 0 |
Reimbursement of out-of-pocket costs and expenses | 100 | 100 |
Amounts payable | $ 0 | $ 100 |
RELATED PARTY TRANSACTIONS - Op
RELATED PARTY TRANSACTIONS - Operating Lease (Details) - Acquigen Pty Ltd. - Lease Agreement - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||||
Future minimum lease payments | $ 3.6 | $ 3.6 | $ 4.2 | ||
Rent expense | $ 0.1 | $ 0.1 | $ 0.4 | $ 0.3 |
SEGMENT AND GEOGRAPHIC INFORM_3
SEGMENT AND GEOGRAPHIC INFORMATION - Segment Information (Details) | 9 Months Ended |
Oct. 02, 2021segment | |
SEGMENT AND GEOGRAPHIC INFORMATION | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
SEGMENT AND GEOGRAPHIC INFORM_4
SEGMENT AND GEOGRAPHIC INFORMATION - Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Dec. 31, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net sales | $ 161,957 | $ 127,512 | $ 491,592 | $ 291,468 | |
Property and equipment, net | 58,767 | 58,767 | $ 47,357 | ||
United States | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net sales | 123,477 | 102,663 | 385,259 | 234,439 | |
Property and equipment, net | 48,158 | 48,158 | 37,680 | ||
Canada | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net sales | 28,103 | 16,785 | 76,619 | 38,197 | |
Property and equipment, net | 4,358 | 4,358 | 3,050 | ||
Australia | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net sales | 6,330 | 5,439 | 18,581 | 13,187 | |
Property and equipment, net | 4,394 | 4,394 | 4,979 | ||
New Zealand | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net sales | 1,749 | 941 | 5,277 | 2,357 | |
Property and equipment, net | 1,857 | 1,857 | $ 1,648 | ||
Other | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net sales | $ 2,298 | $ 1,684 | $ 5,856 | $ 3,288 |