Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 30, 2024 | May 03, 2024 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 30, 2024 | |
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 $0.0001 per share | |
Trading Symbol | SWIM | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 115,572,774 | |
Entity Central Index Key | 0001833197 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 30, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash | $ 43,811 | $ 102,763 |
Trade receivables, net | 73,944 | 30,407 |
Inventories, net | 95,151 | 97,137 |
Income tax receivable | 1,411 | 983 |
Prepaid expenses and other current assets | 6,996 | 7,327 |
Total current assets | 221,313 | 238,617 |
Property and equipment, net | 112,795 | 113,014 |
Equity method investment | 26,341 | 25,940 |
Deferred tax assets | 7,310 | 7,485 |
Operating lease right-of-use assets | 28,696 | 30,788 |
Goodwill | 130,987 | 131,363 |
Intangible assets, net | 275,876 | 282,793 |
Other assets | 5,294 | 5,003 |
Total assets | 808,612 | 835,003 |
Current liabilities: | ||
Current maturities of long-term debt | 3,250 | 21,250 |
Current operating lease liabilities | 6,823 | 7,133 |
Accrued expenses and other current liabilities | 35,781 | 40,691 |
Total current liabilities | 70,876 | 86,206 |
Long-term debt, net of discount, debt issuance costs, and current portion | 279,531 | 279,951 |
Deferred income tax liabilities, net | 40,088 | 40,088 |
Non-current operating lease liabilities | 22,963 | 24,787 |
Other long-term liabilities | 3,386 | 4,771 |
Total liabilities | 416,844 | 435,803 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value; 100,000,000 shares authorized as of both March 30, 2024 and December 31, 2023; no shares issued and outstanding as of both March 30, 2024 and December 31, 2023 | ||
Common stock, $0.0001 par value; 900,000,000 shares authorized as of March 30, 2024 and December 31, 2023; 115,389,689 and 114,871,782 shares issued and outstanding, as of March 30, 2024 and December 31, 2023, respectively | 11 | 11 |
Additional paid-in capital | 460,927 | 459,684 |
Accumulated deficit | (64,820) | (56,956) |
Accumulated other comprehensive loss | (4,350) | (3,539) |
Total stockholders' equity | 391,768 | 399,200 |
Total liabilities and stockholders' equity | 808,612 | 835,003 |
Related Party | ||
Current liabilities: | ||
Accounts payable | 8 | |
Nonrelated Party | ||
Current liabilities: | ||
Accounts payable | $ 25,022 | $ 17,124 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 30, 2024 | Dec. 31, 2023 |
Consolidated Balance Sheets | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 900,000,000 | 900,000,000 |
Common stock, shares issued | 115,389,689 | 114,871,782 |
Common stock, shares outstanding | 115,389,689 | 114,871,782 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2024 | Apr. 01, 2023 | |
Consolidated Statements of Operations | ||
Net sales | $ 110,629 | $ 137,719 |
Cost of sales | 80,040 | 104,349 |
Gross profit | 30,589 | 33,370 |
Selling, general, and administrative expense | 26,250 | 33,057 |
Amortization | 6,412 | 6,632 |
Loss from operations | (2,073) | (6,319) |
Other expense: | ||
Interest expense, net | 4,982 | 10,804 |
Other expense, net | 1,586 | 210 |
Total other expense, net | 6,568 | 11,014 |
Earnings from equity method investment | 1,309 | 37 |
Loss before income taxes | (7,332) | (17,296) |
Income tax expense (benefit) | 532 | (2,928) |
Net loss | $ (7,864) | $ (14,368) |
Net loss per share attributable to common stockholders: | ||
Basic | $ (0.07) | $ (0.13) |
Diluted | $ (0.07) | $ (0.13) |
Weighted-average common shares outstanding - basic and diluted | ||
Basic | 115,038,929 | 112,102,198 |
Diluted | 115,038,929 | 112,102,198 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2024 | Apr. 01, 2023 | |
Consolidated Statements of Comprehensive Loss | ||
Net loss | $ (7,864) | $ (14,368) |
Other comprehensive loss, net of tax: | ||
Foreign currency translation adjustments | (811) | (144) |
Total other comprehensive loss, net of tax | (811) | (144) |
Comprehensive loss | $ (8,675) | $ (14,512) |
Consolidated Statements of Stoc
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, 2022 | $ 11 | $ 440,880 | $ (54,568) | $ (3,533) | $ 382,790 |
Balance, beginning of period (in shares) at Dec. 31, 2022 | 114,667,975 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (14,368) | (14,368) | |||
Foreign currency translation adjustments | (144) | (144) | |||
Issuance of common stock upon release of restricted stock units (in shares) | 22,078 | ||||
Stock-based compensation expense | 6,769 | 6,769 | |||
Balance, end of period at Apr. 01, 2023 | $ 11 | 447,649 | (68,936) | (3,677) | 375,047 |
Balance, end of period (in shares) at Apr. 01, 2023 | 114,690,053 | ||||
Balance, beginning of period at Dec. 31, 2023 | $ 11 | 459,684 | (56,956) | (3,539) | 399,200 |
Balance, beginning of period (in shares) at Dec. 31, 2023 | 114,871,782 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (7,864) | (7,864) | |||
Foreign currency translation adjustments | (811) | (811) | |||
Issuance of common stock upon release of restricted stock units (in shares) | 517,907 | ||||
Stock-based compensation expense | 1,243 | 1,243 | |||
Balance, end of period at Mar. 30, 2024 | $ 11 | $ 460,927 | $ (64,820) | $ (4,350) | $ 391,768 |
Balance, end of period (in shares) at Mar. 30, 2024 | 115,389,689 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2024 | Apr. 01, 2023 | |
Cash flows from operating activities: | ||
Net loss | $ (7,864) | $ (14,368) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 10,374 | 9,258 |
Amortization of deferred financing costs and debt discount | 430 | 430 |
Non-cash lease expense | 1,780 | 1,877 |
Change in fair value of interest rate swaps | (1,804) | 4,866 |
Stock-based compensation expense | 1,243 | 6,769 |
Bad debt expense | 1,299 | 1,700 |
Other non-cash, net | 1,757 | 860 |
Earnings from equity method investment | (1,309) | (37) |
Distributions received from equity method investment | 908 | |
Changes in operating assets and liabilities: | ||
Trade receivables | (44,895) | (55,286) |
Inventories | 1,648 | 15,615 |
Prepaid expenses and other current assets | 467 | (593) |
Income tax receivable | (428) | (2,816) |
Other assets | (146) | (1,225) |
Accounts payable | 8,179 | 20,947 |
Accrued expenses and other current liabilities | (5,987) | (3,190) |
Other long-term liabilities | (164) | 717 |
Net cash used in operating activities | (34,512) | (14,476) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (5,345) | (9,942) |
Net cash used in investing activities | (5,345) | (9,942) |
Cash flows from financing activities: | ||
Payments on long-term debt borrowings | (18,813) | (813) |
Proceeds from borrowings on revolving credit facility | 48,000 | |
Repayments of finance lease obligations | (189) | (101) |
Net cash (used in) provided by financing activities | (19,002) | 47,086 |
Effect of exchange rate changes on cash | (93) | (278) |
Net (decrease) increase in cash | (58,952) | 22,390 |
Cash at beginning of period | 102,763 | 32,626 |
Cash at end of period | 43,811 | 55,016 |
Supplemental cash flow information: | ||
Cash paid for interest | 9,513 | 5,123 |
Income taxes paid, net | 39 | 637 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Purchases of property and equipment included in accounts payable and accrued expenses | 426 | 5,849 |
Capitalized internal-use software included in accounts payable - related party | 359 | |
Right-of-use operating and finance lease assets obtained in exchange for lease liabilities | $ 198 | $ 1,625 |
NATURE OF THE BUSINESS
NATURE OF THE BUSINESS | 3 Months Ended |
Mar. 30, 2024 | |
NATURE OF THE BUSINESS | |
NATURE OF THE BUSINESS | 1. NATURE OF THE BUSINESS Latham Group, Inc. (the “Company”) wholly owns Latham Pool Products, Inc. (“Latham Pool Products”) (together, “Latham”), a designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand. Latham offers a portfolio of in-ground swimming pools and related products, including pool liners and pool covers. Stock Split, Initial Public Offering and Reorganization On April 13, 2021, the Company’s certificate of incorporation was amended and restated. On April 13, 2021, the Company effected a 109,673.709-for-one stock split of its issued and outstanding shares of common stock. Accordingly, all share and per share data included in these condensed consolidated financial statements and notes thereto have been adjusted retroactively to reflect the impact of the amended and restated certificate of incorporation and the stock split. 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, the Company’s parent entity, Latham Investment Holdings, L.P., merged with and into Latham Group, Inc. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 30, 2024 | |
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 unaudited condensed consolidated balance sheet at December 31, 2023 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements as of March 30, 2024 and for the fiscal quarters ended March 30, 2024 and April 1, 2023, respectively, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with Latham Group, Inc.’s audited consolidated financial statements and the notes thereto for the fiscal year ended December 31, 2023 included in the Company’s 2023 Annual Report on Form 10-K, filed with the SEC on March 13, 2024 (the “Annual Report”). In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of these condensed consolidated financial statements, have been included. The Company’s results of operations for the fiscal quarter ended March 30, 2024 are not necessarily indicative of the results of operations that may be expected for the fiscal year ending December 31, 2024 or other interim periods thereof. Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company bases its estimates on historical experience, known trends, and other market-specific relevant factors that it believes to be reasonable under the circumstances. Estimates are evaluated on an ongoing basis and revised as there are changes in circumstances, facts, and experience. Changes in estimates are recorded in the period in which they become known. Reclassifications Certain prior period balances have been reclassified to conform to the current period presentation in the condensed consolidated financial statements and the accompanying notes. Seasonality Although the Company generally has demand for its products throughout the fiscal year, its business is seasonal and weather is one of the principal external factors affecting the business. Historically, net sales and net income are highest (or net loss is lowest) during the second and third fiscal quarters, representing the peak months of swimming pool use, pool installation, and remodeling and repair activities. Severe weather may also affect net sales in all periods. Significant Accounting Policies Refer to the Annual Report for a discussion of the Company’s significant accounting policies, as updated below. Recently Issued Accounting Pronouncements The Company qualifies as “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected to “opt in” to the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and nonpublic companies, the Company will adopt the new or revised standard at the time nonpublic companies adopt the new or revised standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures mendments should be applied prospectively with retrospective application permitted. Early adoption is also permitted. The Company is currently evaluating ASU 2023-09 and its potential impact on the notes to the condensed consolidated financial statements. In March 2024, the FASB issued ASU 2024-01, Compensation – Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 30, 2024 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 3. FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value. Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs, other than quoted prices in active markets, that are observable either directly or indirectly. Level 3 — Unobservable inputs that reflect the Company’s own assumptions incorporated into valuation techniques. These valuations require significant judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. When there is more than one input at different levels within the hierarchy, the fair value is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Assessment of the significance of a particular input to the fair value measurement in its entirety requires substantial judgment and consideration of factors specific to the asset or liability. Level 3 inputs are inherently difficult to estimate. Changes to these inputs can have significant impact on fair value measurements. Assets and liabilities measured at fair value using Level 3 inputs are based on one or more of the following valuation techniques: market approach, income approach or cost approach. There were no transfers between fair value measurement levels during the fiscal quarters ended March 30, 2024 and April 1, 2023. Assets and liabilities measured at fair value on a nonrecurring basis The Company’s non-financial assets such as goodwill, intangible assets, and property and equipment are measured at fair value upon acquisition and remeasured to fair value when an impairment charge is recognized. Such fair value measurements are based predominantly on Level 2 and Level 3 inputs. Fair value of financial instruments The Company considers the carrying amounts of cash, trade receivables, prepaid expenses and other current assets, accounts payable, and accrued expenses and other current liabilities to approximate fair value because of the short-term maturities of these instruments. Term loan The Company’s term loan (see Note 6) is carried at amortized cost; however, the Company estimates the fair value of the term loan for disclosure purposes. The fair value of the term loan is determined using inputs based on observable market data of a non-public exchange, which are classified as Level 2 inputs. The following table sets forth the carrying amount and fair value of its term loan (in thousands): March 30, 2024 December 31, 2023 Carrying Estimated Carrying Estimated Value Fair Value Value Fair Value Term Loan $ 282,781 $ 277,832 $ 301,201 $ 289,153 Interest rate swap The Company estimates the fair value of interest rate swaps (see Note 6) on a fiscal quarterly basis using Level 2 inputs, including the forward SOFR curve. The fair value is estimated by comparing (i) the present value of all future monthly fixed rate payments versus (ii) the variable payments based on the forward SOFR curve. As of March 30, 2024 and December 31, 2023, the fair value of the Company’s interest rate swap was an asset of $0.6 million and a liability of $1.2 million, respectively, which were recorded within other assets and other long-term liabilities on the condensed consolidated balance sheets, respectively. |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, NET | 3 Months Ended |
Mar. 30, 2024 | |
GOODWILL AND INTANGIBLE ASSETS, NET | |
GOODWILL AND INTANGIBLE ASSETS, NET | 4. GOODWILL AND INTANGIBLE ASSETS, NET Goodwill The carrying amount of goodwill as of March 30, 2024 and as of December 31, 2023 was $131.0 million and $131.4 million, respectively. The change in the carrying value during the fiscal quarter ended March 30, 2024 was solely because of fluctuations in foreign currency exchange rates. Intangible Assets Intangible assets, net as of March 30, 2024 consisted of the following (in thousands): March 30, 2024 Gross Foreign Carrying Currency Accumulated Net Amount Translation Amortization Amount Trade names and trademarks $ 148,100 $ (251) $ 31,233 $ 116,616 Patented technology 16,126 (4) 9,111 7,011 Technology 13,000 — 2,023 10,977 Pool designs 13,628 (124) 3,207 10,297 Franchise relationships 1,187 — 1,187 — Dealer relationships 197,376 (1) 66,400 130,975 Order backlog 1,600 — 1,600 — Non-competition agreements 2,476 — 2,476 — $ 393,493 $ (380) $ 117,237 $ 275,876 The Company recognized $6.4 million of amortization expense related to intangible assets during the fiscal quarter ended March 30, 2024. The Company recognized $6.6 million of amortization expense related to intangible assets during the fiscal quarter ended April 1, 2023. Intangible assets, net as of December 31, 2023 consisted of the following (in thousands): December 31, 2023 Gross Foreign Carrying Currency Accumulated Net Amount Translation Amortization Amount Trade names and trademarks $ 148,100 $ 72 $ 29,583 $ 118,589 Patented technology 16,126 1 8,713 7,414 Technology 13,000 — 1,806 11,194 Pool designs 13,628 35 2,973 10,690 Franchise relationships 1,187 — 1,187 — Dealer relationships 197,376 — 62,470 134,906 Order backlog 1,600 — 1,600 — Non-competition agreements 2,476 — 2,476 — $ 393,493 $ 108 $ 110,808 $ 282,793 The Company estimates that amortization expense related to definite-lived intangible assets will be as follows in each of the next five years and thereafter (in thousands): Estimated Future Amortization Year Ended Expense Remainder of fiscal year 2024 $ 19,282 2025 25,551 2026 25,551 2027 25,551 2028 24,593 Thereafter 155,348 $ 275,876 |
INVENTORIES, NET
INVENTORIES, NET | 3 Months Ended |
Mar. 30, 2024 | |
INVENTORIES, NET | |
INVENTORIES, NET | 5. INVENTORIES, NET Inventories, net consisted of the following (in thousands): March 30, 2024 December 31, 2023 Raw materials $ 53,145 $ 55,081 Finished goods 42,006 42,056 $ 95,151 $ 97,137 |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 30, 2024 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 6. LONG-TERM DEBT The components of the Company’s outstanding long-term debt obligations consisted of the following (in thousands): March 30, 2024 December 31, 2023 Term Loan $ 290,500 $ 309,313 Revolving Credit Facility — — Less: Unamortized discount and debt issuance costs (7,719) (8,112) Total debt 282,781 301,201 Less: Current portion of long-term debt (3,250) (21,250) Total long-term debt $ 279,531 $ 279,951 On February 23, 2022, Latham Pool Products entered into an agreement (the “Credit Agreement”) with Barclays Bank PLC, which provides a senior secured multicurrency revolving line of credit (the “Revolving Credit Facility”) in an initial principal amount of $75.0 million and a U.S. Dollar senior secured term loan facility (the “Term Loan”) in an initial principal amount of $325.0 million. As of March 30, 2024, the Company was in compliance with all financial covenants under the Credit Agreement. Revolving Credit Facility The Revolving Credit Facility may be utilized to finance ongoing general corporate and working capital needs and permits Latham Pools Products to borrow loans in U.S. Dollars, Canadian Dollars, Euros and Australian Dollars. The Revolving Credit Facility matures on February 23, 2027. Loans outstanding under the Revolving Credit Facility denominated in U.S. Dollars and Canadian Dollars bear interest, at the borrower’s option, at a rate per annum based on Term SOFR or CDO (each, as defined in the Credit Agreement), as applicable, plus a margin of 3.50%, or at a rate per annum based on the Base Rate or the Canadian Prime Rate (each, as defined in the Credit Agreement), plus a margin of 2.50%. Loans outstanding under the Revolving Credit Facility denominated in Euros or Australian Dollars bear interest based on EURIBOR or the AUD Rate (each, as defined in the Credit Agreement), respectively, plus a margin of 3.50%. A commitment fee accrues on any unused portion of the commitments under the Revolving Credit Facility. The commitment fee is due and payable quarterly in arrears, and initially was 0.375% per annum and thereafter accrues at a rate per annum ranging from 0.25% to 0.50%, depending on the First Lien Net Leverage Ratio (as defined in the Credit Agreement, the “First Lien Net Leverage Ratio”). Borrowings under the Revolving Credit Facility are due at maturity. The Company incurred debt issuance costs of $0.8 million related to the Revolving Credit Facility. The debt issuance costs were recorded within other assets on the condensed consolidated balance sheet as of the applicable period and are being amortized over the life of the Revolving Credit Facility. The Company is required to meet certain financial covenants in connection with the Revolving Credit Facility, including maintaining specific liquidity measurements. There are also negative covenants, including certain restrictions on the Company’s and its subsidiaries’ ability to incur additional indebtedness, create liens, make investments, consolidate, or merge with other entities, enter into transactions with affiliates, make prepayments with respect to certain indebtedness, make dividend payments, loans, or advances to the Company, declare dividends and make restricted payments and other distributions. As of March 30, 2024, there were no outstanding borrowings on the Revolving Credit Facility and $75.0 million was available for future borrowing. Term Loan The Term Loan matures on February 23, 2029. The Term Loan bears interest, at the borrower’s option, at a rate per annum based on Term SOFR (as defined in the Credit Agreement), plus a margin ranging from 3.75% to 4.00%, depending on the First Lien Net Leverage Ratio, or based on the Base Rate (as defined in the Credit Agreement), plus a margin ranging from 2.75% to 3.00%, depending on the First Lien Net Leverage Ratio. The Term Loan is subject to scheduled quarterly amortization payments of $812,500, equal to 0.25% of the initial principal amount of the Term Loan. The Credit Agreement contains customary mandatory prepayment provisions for the Term Loan, including requirements to make mandatory prepayments with 50% of any excess cash flow and with 100% of the net cash proceeds from the incurrence of indebtedness not otherwise permitted to be incurred by the covenants, asset sales, and casualty and condemnation events, in each case, subject to customary exceptions. During the quarter ended March 30, 2024, the Company made a payment of $18.0 million. Outstanding borrowings as of March 30, 2024 were $282.8 million, net of unamortized discount and debt issuance costs of $7.7 million. In connection with the Term Loan, the Company is subject to various negative, reporting, financial, and other covenants, including maintaining specific liquidity measurements. As of March 30, 2024, the unamortized debt issuance costs and discount on the Term Loan were $4.3 million and $3.4 million, respectively. The effective interest rate was 9.89% at March 30, 2024, including the impact of the Company’s interest rate swaps. Interest Rate Risk Interest rate risk associated with the Credit Agreement is mitigated partially through interest rate swaps. The Company executed an interest rate swap on April 30, 2020. The swap had an effective date of May 18, 2020 and a termination date of May 18, 2023. In February 2022, the Company amended its interest rate swap to change the index rate from LIBOR to SOFR in connection with the entry into the Credit Agreement. Under the terms of the amended swap, the Company fixed its SOFR borrowing rate at 0.496% on a notional amount of $200.0 million. The interest rate swap was not designated as a hedging instrument for accounting purposes (see Note 3). Additionally, the Company entered into an interest rate swap that was executed on March 10, 2023. The swap has an effective date of May 18, 2023 and a termination date of May 18, 2026. Under the terms of the swap, the Company fixed its SOFR borrowing rate at 4.3725% on a notional amount of $161.0 million. The interest rate swap is not designated as a hedging instrument for accounting purposes (see Note 3). Debt Maturities Principal payments due on the outstanding debt, excluding the Revolving Credit Facility, in the next five fiscal years, excluding any potential payments based on excess cash flow, are as follows (in thousands): Year Ended Term Loan Remainder of fiscal year 2024 $ 2,438 2025 3,250 2026 3,250 2027 3,250 2028 3,250 Thereafter 275,062 $ 290,500 Guarantees The obligations under the Credit Agreement are guaranteed by certain wholly owned subsidiaries (the “Guarantors”) of the Company as defined in the security agreement. The obligations under the Credit Agreement are secured by substantially all of the Guarantors’ tangible and intangible assets, including their accounts receivables, equipment, intellectual property, inventory, cash and cash equivalents, deposit accounts, and security accounts. The Credit Agreement also restricts payments and other distributions unless certain conditions are met, which could restrict the Company’s ability to pay dividends. |
PRODUCT WARRANTIES
PRODUCT WARRANTIES | 3 Months Ended |
Mar. 30, 2024 | |
PRODUCT WARRANTIES | |
PRODUCT WARRANTIES | 7. PRODUCT WARRANTIES The warranty reserve activity consisted of the following (in thousands): Fiscal Quarter Ended March 30, 2024 April 1, 2023 Balance at the beginning of the fiscal year $ 3,161 $ 3,990 Adjustments to reserve 537 354 Less: Settlements made (in cash or in kind) (679) (761) Balance at the end of the fiscal quarter $ 3,019 $ 3,583 |
LEASES
LEASES | 3 Months Ended |
Mar. 30, 2024 | |
LEASES | |
LEASES | 8. LEASES For leases with initial terms greater than 12 months, the Company considers these right-of-use assets and records the related asset and obligation at the present value of lease payments over the term. For leases with initial terms equal to or less than 12 months, the Company does not consider them as right-of-use assets and instead considers them short-term lease costs that are recognized on a straight-line basis over the lease term. The Company’s leases may include escalation clauses, renewal options, and/or termination options that are factored into the Company’s determination of lease term and lease payments when it is reasonably certain the option will be exercised. The Company elected to take the practical expedient and not separate lease and non-lease components of contracts. The Company estimates an incremental borrowing rate to discount the lease payments based on information available at lease commencement because the implicit rate of the lease is generally not known. The Company leases manufacturing facilities, office space, land, and certain vehicles and equipment under operating leases. The Company also leases certain vehicles and equipment under finance leases. The Company determines if an arrangement is a lease at inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The components of lease expense for the fiscal quarters ended March 30, 2024 and April 1, 2023 were as follows (in thousands): Fiscal Quarter Ended March 30, 2024 April 1, 2023 Operating lease expense $ 2,163 $ 2,351 Finance lease amortization of assets 212 109 Finance lease interest on lease liabilities 84 52 Short-term lease expense 56 54 Variable lease expense 158 327 Total lease expense $ 2,673 $ 2,893 Operating and finance lease right-of-use assets and lease-related liabilities as of March 30, 2024 and December 31, 2023 were as follows (in thousands): March 30, 2024 December 31, 2023 Classification Lease right-of-use assets: Operating leases $ 28,696 $ 30,788 Operating lease right-of-use assets Finance leases 3,887 3,912 Other assets Total lease right-of-use assets $ 32,583 $ 34,700 Lease-related liabilities Current Operating leases $ 6,823 $ 7,133 Current operating lease liabilities Finance leases 782 746 Accrued expenses and other current liabilities Non-current Operating leases 22,963 24,787 Non-current operating lease liabilities Finance leases 3,247 3,285 Other long-term liabilities Total lease liabilities $ 33,815 $ 35,951 The table below presents supplemental information related to leases as of March 30, 2024 and December 31, 2023: March 30, 2024 December 31, 2023 Weighted-average remaining lease term (years) Finance leases 5.0 5.2 Operating leases 5.6 5.7 Weighted-average discount rate Finance leases 8.2 % 8.2 % Operating leases 5.0 % 5.1 % The table below presents supplemental information related to the cash flows for operating leases recorded on the condensed consolidated statements of cash flows (in thousands): Fiscal Quarter Ended March 30, 2024 April 1, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 1,794 $ 1,817 The following table summarizes maturities of operating lease liabilities as of March 30, 2024 (in thousands): Operating Leases Finance Leases Total Remainder of fiscal year 2024 $ 6,260 $ 813 $ 7,073 2025 7,309 1,030 8,339 2026 5,805 934 6,739 2027 4,097 858 4,955 2028 3,111 845 3,956 Thereafter 7,637 436 8,073 Total lease payments 34,219 4,916 39,135 Less: Interest (4,433) (886) (5,319) Present value of lease liability $ 29,786 $ 4,030 $ 33,816 |
NET SALES
NET SALES | 3 Months Ended |
Mar. 30, 2024 | |
NET SALES. | |
NET SALES | 9. NET SALES The following table sets forth the Company’s disaggregation of net sales by product line (in thousands): Fiscal Quarter Ended March 30, 2024 April 1, 2023 In-ground Swimming Pools $ 59,832 $ 78,612 Covers 26,868 32,745 Liners 23,929 26,362 $ 110,629 $ 137,719 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 30, 2024 | |
INCOME TAXES | |
INCOME TAXES | 10. INCOME TAXES The effective income tax rate for the fiscal quarter ended March 30, 2024 was (7.2)% compared to 16.9% for the fiscal quarter ended April 1, 2023. The differences between the U.S. federal statutory income tax rate and our effective income tax rates for the fiscal quarter ended March 30, 2024 and the fiscal quarter ended April 1, 2023 were primarily attributable to the discrete impact of stock compensation expense for which there is no associated tax benefit. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 30, 2024 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | 11. STOCKHOLDERS’ EQUITY Repurchase Program On May 10, 2022, the Board of Directors of the Company approved a stock repurchase program (the “Repurchase Program”), which authorizes the Company to repurchase up to $100 million of the Company’s shares of common stock by May 2025. The Company may effect these repurchases in open market transactions, privately negotiated purchases, or other acquisitions. The Company is not obligated to repurchase any of its shares of its common stock under the Repurchase Program and the timing and amount of any repurchases will depend on market conditions, the Company’s stock price, alternative uses of capital, the terms of the Company’s debt instruments, and other factors. As of March 30, 2024, $77.0 million remained available for share repurchases pursuant to the Repurchase Program. The Company did not repurchase any shares of its common stock during the fiscal quarter ended March 30, 2024. The Company accounts for the excess of the repurchase price over the par value of shares acquired as a reduction to additional paid-in capital. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 30, 2024 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 12. STOCK-BASED COMPENSATION On April 12, 2021, the Company’s stockholders approved the 2021 Omnibus Equity Incentive Plan (the “2021 Omnibus Equity Plan”), which became effective on April 22, 2021, upon pricing of its initial public offering. The 2021 Omnibus Equity Plan provides for the issuance of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock units and other stock-based and cash-based awards. The maximum grant date fair value of cash and equity awards that may be awarded to a non-employee director under the 2021 Omnibus Equity Plan during any one fiscal year, together with any cash fees paid to such non-employee director during such fiscal year, is $750,000. On May 2, 2023, at the 2023 annual meeting of stockholders of the Company, the stockholders approved the first amendment (the “First Amendment”) to the 2021 Omnibus Equity Plan, which was previously approved by the Board of Directors of the Company. The First Amendment became effective upon stockholder approval, and included an increase by 8,000,000 shares of the share pool, i.e. the maximum number of shares of the Company’s common stock that may be issued pursuant to awards granted under the 2021 Omnibus Equity Plan. Except as amended by the First Amendment, the other terms of the 2021 Omnibus Equity Plan remain in full force and effect. Subsequent to the First Amendment, the maximum aggregate number of shares reserved for issuance under the 2021 Omnibus Equity Plan is 21,170,212 shares. The following table summarizes the Company’s stock-based compensation expense (in thousands): Fiscal Quarter Ended March 30, 2024 April 1, 2023 Cost of sales $ — $ 426 Selling, general, and administrative 1,243 6,343 $ 1,243 $ 6,769 As of March 30, 2024, total unrecognized stock-based compensation expense related to all unvested stock-based awards was $13.3 million, which is expected to be recognized over a weighted-average period of 2.2 years. Restricted Stock Awards The following table represents the Company’s restricted stock awards activity during the fiscal quarter ended March 30, 2024: Weighted- Average Grant- Shares Date Fair Value Outstanding at January 1, 2024 42,886 $ 19.00 Granted — — Vested — — Forfeited — — Outstanding at March 30, 2024 42,886 $ 19.00 Restricted Stock Units The following table represents the Company’s restricted stock units activity during the fiscal quarter ended March 30, 2024: Weighted- Average Grant- Shares Date Fair Value Outstanding at January 1, 2024 2,235,479 $ 3.60 Granted 2,282,336 2.87 Vested (411,301) 3.94 Forfeited (85,392) 2.93 Outstanding at March 30, 2024 4,021,122 $ 3.17 Stock Options The following table represents the Company’s stock option activity during the fiscal quarter ended March 30, 2024: Weighted- Weighted- Average Average Exercise Price Remaining Aggregate Shares per Share Contract Term Intrinsic Value (in years) (in thousands) Outstanding at January 1, 2024 1,554,294 $ 15.43 Granted — — Exercised — — Forfeited (42,004) 16.92 Expired (57,616) 17.78 Outstanding at March 30, 2024 1,454,674 $ 15.30 7.58 $ — Vested and expected to vest at March 30, 2024 1,454,674 $ 15.30 7.58 $ — Options exercisable at March 30, 2024 678,477 $ 16.10 7.38 $ — 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 Stock Appreciation Rights During the fiscal quarter ended April 1, 2023, as a portion of the annual equity award grants to the Company’s executive officers, the Compensation Committee of the Board of Directors approved stock appreciation rights for an aggregate of 790,181 shares of the Company’s common stock, with a strike price of $3.24 per share. At the time of such approval, the Company did not have enough shares of the Company’s common stock in the share pool under the 2021 Omnibus Equity Plan to support such grant. As of April 1, 2023, the contingent grant of stock appreciation rights remained subject to stockholder approval of the First Amendment. On May 2, 2023, following stockholder approval of the First Amendment, the foregoing stock appreciation right awards became effective without condition. The following table represents the Company’s stock appreciation rights activity during the fiscal quarter ended March 30, 2024: Weighted- Weighted- Average Average Exercise Price Remaining Aggregate Shares per Share Contract Term Intrinsic Value (in years) (in thousands) Outstanding at January 1, 2024 755,802 $ 3.16 Granted — — Exercised — — Forfeited (49,342) 3.24 Outstanding at March 30, 2024 706,460 $ 3.15 9.13 $ 569,296 Vested and expected to vest at March 30, 2024 706,460 $ 3.15 9.13 $ 569,296 Stock appreciation rights exercisable at March 30, 2024 161,893 $ 3.24 9.09 $ 116,563 The aggregate intrinsic value of stock appreciation rights is calculated as the difference between the strike price of the stock appreciation rights and the fair value of the Company’s common stock for those stock appreciation rights that had strike prices lower than the fair value of the Company’s common stock. No stock appreciation rights were granted under this plan during the fiscal quarter ended March 30, 2024. Performance Stock Units During the fiscal quarter ended March 30, 2024 the Compensation Committee of the Board of Directors approved the grant of performance stock units (“PSUs”) as a portion of the annual equity award to the Company’s executive officers for an aggregate of 427,145 shares of the Company’s common stock. The PSUs will be earned at 0% to 200% of the target PSUs (with 100% of PSUs being earned at target performance, and linear interpolation between threshold and target and maximum performance) based on the Company’s achievement of Adjusted EBITDA, as defined in the award agreement, over a one-year performance period ending December 31, 2024. Any earned PSUs cliff vest on the third anniversary of the grant date. Adjusted EBITDA is considered a performance condition and the grant date fair value corresponds with management’s expectation of the probable outcome of the performance condition as of the grant date. The grant date fair value is determined based on the fair market value of the Company’s stock at market close on the grant date multiplied by the target number of shares subject to the award. The probability of achieving the performance criteria is assessed quarterly during the performance period. Compensation expense related to unvested PSUs is recognized ratably over the service period. The following table represents the Company’s PSU activity during the fiscal quarter ended March 30, 2024: Weighted- Average Grant Date Shares Fair Value Outstanding at January 1, 2024 — $ — Granted 427,145 2.87 Adjustment for expected performance achievement (1) — — Forfeited — — Outstanding at March 30, 2024 (2) 427,145 $ 2.87 (1) Represents the adjustment to previously granted PSUs based on performance expectations as of the end of each respective fiscal year. (2) An additional 427,145 PSUs could potentially be included if the maximum performance level of 200% is earned for all PSUs outstanding as of March 30, 2024 . |
NET LOSS PER SHARE
NET LOSS PER SHARE | 3 Months Ended |
Mar. 30, 2024 | |
NET LOSS PER SHARE | |
NET LOSS PER SHARE | 13. NET LOSS PER SHARE Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share data): Fiscal Quarter Ended March 30, 2024 April 1, 2023 Numerator: Net loss attributable to common stockholders $ (7,864) $ (14,368) Denominator: Weighted-average common shares outstanding Basic 115,038,929 112,102,198 Diluted 115,038,929 112,102,198 Net loss per share attributable to common stockholders: Basic $ (0.07) $ (0.13) Diluted $ (0.07) $ (0.13) As of March 30, 2024 and December 31, 2023, 115,346,803 and 114,828,896 shares of common stock were issued and outstanding for accounting purposes, respectively. The following table includes the number of shares that may be dilutive common shares in the future that were not included in the computation of diluted net loss per share because the effect was anti-dilutive: Fiscal Quarter Ended March 30, 2024 April 1, 2023 Restricted stock awards 42,886 2,576,219 Restricted stock units 24,146 500,751 Stock options 1,521,158 1,886,497 Stock appreciation rights 657,999 — Performance stock units 75,937 — |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 30, 2024 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 14. RELATED PARTY TRANSACTIONS BrightAI Services Starting in 2020, BrightAI Corporation (“BrightAI”) has rendered services to the Company, for which the cost has been capitalized as internal-use software. A co-founder of BrightAI Services served on the Company’s Board of Directors from December 9, 2020 until his resignation on February 21, 2024. In December 2022, the Company executed an additional agreement with BrightAI for the provision of hardware to run the technology developed by BrightAI and the Company. The Company had no material transactions with BrightAI during the quarters ended March 30, 2024 and April 1, 2023. As of December 31, 2023, the Company had no accounts payable related to BrightAI. |
RESTRUCTURING COSTS
RESTRUCTURING COSTS | 3 Months Ended |
Mar. 30, 2024 | |
RESTRUCTURING COSTS | |
RESTRUCTURING COSTS | 15. RESTRUCTURING COSTS During the second and third fiscal quarters of 2023, the Company initiated an additional plan focused on efforts to improve efficiencies and decrease costs. The plan involved a reduction in the Company’s workforce as well as closures of various manufacturing facilities. The Company had an exit or disposal cost related liability of $0.1 million as of March 30, 2024 and $0.2 million as of December 31, 2023. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 30, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company’s unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Unaudited Interim Financial Information The unaudited condensed consolidated balance sheet at December 31, 2023 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements as of March 30, 2024 and for the fiscal quarters ended March 30, 2024 and April 1, 2023, respectively, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with Latham Group, Inc.’s audited consolidated financial statements and the notes thereto for the fiscal year ended December 31, 2023 included in the Company’s 2023 Annual Report on Form 10-K, filed with the SEC on March 13, 2024 (the “Annual Report”). In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of these condensed consolidated financial statements, have been included. The Company’s results of operations for the fiscal quarter ended March 30, 2024 are not necessarily indicative of the results of operations that may be expected for the fiscal year ending December 31, 2024 or other interim periods thereof. |
Use of Estimates | Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company bases its estimates on historical experience, known trends, and other market-specific relevant factors that it believes to be reasonable under the circumstances. Estimates are evaluated on an ongoing basis and revised as there are changes in circumstances, facts, and experience. Changes in estimates are recorded in the period in which they become known. |
Reclassifications | Reclassifications Certain prior period balances have been reclassified to conform to the current period presentation in the condensed consolidated financial statements and the accompanying notes. |
Seasonality | Seasonality Although the Company generally has demand for its products throughout the fiscal year, its business is seasonal and weather is one of the principal external factors affecting the business. Historically, net sales and net income are highest (or net loss is lowest) during the second and third fiscal quarters, representing the peak months of swimming pool use, pool installation, and remodeling and repair activities. Severe weather may also affect net sales in all periods. |
Significant Accounting Policies | Significant Accounting Policies Refer to the Annual Report for a discussion of the Company’s significant accounting policies, as updated below. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The Company qualifies as “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected to “opt in” to the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and nonpublic companies, the Company will adopt the new or revised standard at the time nonpublic companies adopt the new or revised standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures mendments should be applied prospectively with retrospective application permitted. Early adoption is also permitted. The Company is currently evaluating ASU 2023-09 and its potential impact on the notes to the condensed consolidated financial statements. In March 2024, the FASB issued ASU 2024-01, Compensation – Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 30, 2024 | |
FAIR VALUE MEASUREMENTS | |
Schedule of financial liabilities at fair value on a recurring basis | The following table sets forth the carrying amount and fair value of its term loan (in thousands): March 30, 2024 December 31, 2023 Carrying Estimated Carrying Estimated Value Fair Value Value Fair Value Term Loan $ 282,781 $ 277,832 $ 301,201 $ 289,153 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 3 Months Ended |
Mar. 30, 2024 | |
GOODWILL AND INTANGIBLE ASSETS, NET | |
Schedule of Intangible assets | Intangible assets, net as of March 30, 2024 consisted of the following (in thousands): March 30, 2024 Gross Foreign Carrying Currency Accumulated Net Amount Translation Amortization Amount Trade names and trademarks $ 148,100 $ (251) $ 31,233 $ 116,616 Patented technology 16,126 (4) 9,111 7,011 Technology 13,000 — 2,023 10,977 Pool designs 13,628 (124) 3,207 10,297 Franchise relationships 1,187 — 1,187 — Dealer relationships 197,376 (1) 66,400 130,975 Order backlog 1,600 — 1,600 — Non-competition agreements 2,476 — 2,476 — $ 393,493 $ (380) $ 117,237 $ 275,876 Intangible assets, net as of December 31, 2023 consisted of the following (in thousands): December 31, 2023 Gross Foreign Carrying Currency Accumulated Net Amount Translation Amortization Amount Trade names and trademarks $ 148,100 $ 72 $ 29,583 $ 118,589 Patented technology 16,126 1 8,713 7,414 Technology 13,000 — 1,806 11,194 Pool designs 13,628 35 2,973 10,690 Franchise relationships 1,187 — 1,187 — Dealer relationships 197,376 — 62,470 134,906 Order backlog 1,600 — 1,600 — Non-competition agreements 2,476 — 2,476 — $ 393,493 $ 108 $ 110,808 $ 282,793 |
Schedule of estimated amortization expense related to definite-lived intangible assets | The Company estimates that amortization expense related to definite-lived intangible assets will be as follows in each of the next five years and thereafter (in thousands): Estimated Future Amortization Year Ended Expense Remainder of fiscal year 2024 $ 19,282 2025 25,551 2026 25,551 2027 25,551 2028 24,593 Thereafter 155,348 $ 275,876 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 3 Months Ended |
Mar. 30, 2024 | |
INVENTORIES, NET | |
Schedule of inventories, net | Inventories, net consisted of the following (in thousands): March 30, 2024 December 31, 2023 Raw materials $ 53,145 $ 55,081 Finished goods 42,006 42,056 $ 95,151 $ 97,137 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Mar. 30, 2024 | |
LONG-TERM DEBT | |
Schedule of components of the Company's outstanding debt obligations | The components of the Company’s outstanding long-term debt obligations consisted of the following (in thousands): March 30, 2024 December 31, 2023 Term Loan $ 290,500 $ 309,313 Revolving Credit Facility — — Less: Unamortized discount and debt issuance costs (7,719) (8,112) Total debt 282,781 301,201 Less: Current portion of long-term debt (3,250) (21,250) Total long-term debt $ 279,531 $ 279,951 |
Schedule of principal payments due on the outstanding debt | Principal payments due on the outstanding debt, excluding the Revolving Credit Facility, in the next five fiscal years, excluding any potential payments based on excess cash flow, are as follows (in thousands): Year Ended Term Loan Remainder of fiscal year 2024 $ 2,438 2025 3,250 2026 3,250 2027 3,250 2028 3,250 Thereafter 275,062 $ 290,500 |
PRODUCT WARRANTIES (Tables)
PRODUCT WARRANTIES (Tables) | 3 Months Ended |
Mar. 30, 2024 | |
PRODUCT WARRANTIES | |
Schedule of warranty reserve activity | The warranty reserve activity consisted of the following (in thousands): Fiscal Quarter Ended March 30, 2024 April 1, 2023 Balance at the beginning of the fiscal year $ 3,161 $ 3,990 Adjustments to reserve 537 354 Less: Settlements made (in cash or in kind) (679) (761) Balance at the end of the fiscal quarter $ 3,019 $ 3,583 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 30, 2024 | |
LEASES | |
Summary of components of lease expense | The components of lease expense for the fiscal quarters ended March 30, 2024 and April 1, 2023 were as follows (in thousands): Fiscal Quarter Ended March 30, 2024 April 1, 2023 Operating lease expense $ 2,163 $ 2,351 Finance lease amortization of assets 212 109 Finance lease interest on lease liabilities 84 52 Short-term lease expense 56 54 Variable lease expense 158 327 Total lease expense $ 2,673 $ 2,893 |
Schedule of supplemental lease information | Operating and finance lease right-of-use assets and lease-related liabilities as of March 30, 2024 and December 31, 2023 were as follows (in thousands): March 30, 2024 December 31, 2023 Classification Lease right-of-use assets: Operating leases $ 28,696 $ 30,788 Operating lease right-of-use assets Finance leases 3,887 3,912 Other assets Total lease right-of-use assets $ 32,583 $ 34,700 Lease-related liabilities Current Operating leases $ 6,823 $ 7,133 Current operating lease liabilities Finance leases 782 746 Accrued expenses and other current liabilities Non-current Operating leases 22,963 24,787 Non-current operating lease liabilities Finance leases 3,247 3,285 Other long-term liabilities Total lease liabilities $ 33,815 $ 35,951 The table below presents supplemental information related to leases as of March 30, 2024 and December 31, 2023: March 30, 2024 December 31, 2023 Weighted-average remaining lease term (years) Finance leases 5.0 5.2 Operating leases 5.6 5.7 Weighted-average discount rate Finance leases 8.2 % 8.2 % Operating leases 5.0 % 5.1 % The table below presents supplemental information related to the cash flows for operating leases recorded on the condensed consolidated statements of cash flows (in thousands): Fiscal Quarter Ended March 30, 2024 April 1, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 1,794 $ 1,817 |
Summary of maturities of operating lease liabilities | The following table summarizes maturities of operating lease liabilities as of March 30, 2024 (in thousands): Operating Leases Finance Leases Total Remainder of fiscal year 2024 $ 6,260 $ 813 $ 7,073 2025 7,309 1,030 8,339 2026 5,805 934 6,739 2027 4,097 858 4,955 2028 3,111 845 3,956 Thereafter 7,637 436 8,073 Total lease payments 34,219 4,916 39,135 Less: Interest (4,433) (886) (5,319) Present value of lease liability $ 29,786 $ 4,030 $ 33,816 |
NET SALES (Tables)
NET SALES (Tables) | 3 Months Ended |
Mar. 30, 2024 | |
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 March 30, 2024 April 1, 2023 In-ground Swimming Pools $ 59,832 $ 78,612 Covers 26,868 32,745 Liners 23,929 26,362 $ 110,629 $ 137,719 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 30, 2024 | |
STOCK-BASED COMPENSATION | |
Summary of stock-based compensation expense | The following table summarizes the Company’s stock-based compensation expense (in thousands): Fiscal Quarter Ended March 30, 2024 April 1, 2023 Cost of sales $ — $ 426 Selling, general, and administrative 1,243 6,343 $ 1,243 $ 6,769 |
Schedule of restricted stock awards | The following table represents the Company’s restricted stock awards activity during the fiscal quarter ended March 30, 2024: Weighted- Average Grant- Shares Date Fair Value Outstanding at January 1, 2024 42,886 $ 19.00 Granted — — Vested — — Forfeited — — Outstanding at March 30, 2024 42,886 $ 19.00 |
Schedule of restricted stock units | The following table represents the Company’s restricted stock units activity during the fiscal quarter ended March 30, 2024: Weighted- Average Grant- Shares Date Fair Value Outstanding at January 1, 2024 2,235,479 $ 3.60 Granted 2,282,336 2.87 Vested (411,301) 3.94 Forfeited (85,392) 2.93 Outstanding at March 30, 2024 4,021,122 $ 3.17 |
Schedule of stock option activity | The following table represents the Company’s stock option activity during the fiscal quarter ended March 30, 2024: Weighted- Weighted- Average Average Exercise Price Remaining Aggregate Shares per Share Contract Term Intrinsic Value (in years) (in thousands) Outstanding at January 1, 2024 1,554,294 $ 15.43 Granted — — Exercised — — Forfeited (42,004) 16.92 Expired (57,616) 17.78 Outstanding at March 30, 2024 1,454,674 $ 15.30 7.58 $ — Vested and expected to vest at March 30, 2024 1,454,674 $ 15.30 7.58 $ — Options exercisable at March 30, 2024 678,477 $ 16.10 7.38 $ — |
Schedule of stock appreciation rights activity | The following table represents the Company’s stock appreciation rights activity during the fiscal quarter ended March 30, 2024: Weighted- Weighted- Average Average Exercise Price Remaining Aggregate Shares per Share Contract Term Intrinsic Value (in years) (in thousands) Outstanding at January 1, 2024 755,802 $ 3.16 Granted — — Exercised — — Forfeited (49,342) 3.24 Outstanding at March 30, 2024 706,460 $ 3.15 9.13 $ 569,296 Vested and expected to vest at March 30, 2024 706,460 $ 3.15 9.13 $ 569,296 Stock appreciation rights exercisable at March 30, 2024 161,893 $ 3.24 9.09 $ 116,563 |
Schedule of PSU activity | The following table represents the Company’s PSU activity during the fiscal quarter ended March 30, 2024: Weighted- Average Grant Date Shares Fair Value Outstanding at January 1, 2024 — $ — Granted 427,145 2.87 Adjustment for expected performance achievement (1) — — Forfeited — — Outstanding at March 30, 2024 (2) 427,145 $ 2.87 (1) Represents the adjustment to previously granted PSUs based on performance expectations as of the end of each respective fiscal year. (2) An additional 427,145 PSUs could potentially be included if the maximum performance level of 200% is earned for all PSUs outstanding as of March 30, 2024 . |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 3 Months Ended |
Mar. 30, 2024 | |
NET LOSS PER SHARE | |
Schedule of basic and diluted net loss per share | Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share data): Fiscal Quarter Ended March 30, 2024 April 1, 2023 Numerator: Net loss attributable to common stockholders $ (7,864) $ (14,368) Denominator: Weighted-average common shares outstanding Basic 115,038,929 112,102,198 Diluted 115,038,929 112,102,198 Net loss per share attributable to common stockholders: Basic $ (0.07) $ (0.13) Diluted $ (0.07) $ (0.13) |
Schedule of antidilutive securities excluded from computation of diluted net loss per share | Fiscal Quarter Ended March 30, 2024 April 1, 2023 Restricted stock awards 42,886 2,576,219 Restricted stock units 24,146 500,751 Stock options 1,521,158 1,886,497 Stock appreciation rights 657,999 — Performance stock units 75,937 — |
NATURE OF THE BUSINESS (Details
NATURE OF THE BUSINESS (Details) $ in Millions | Apr. 27, 2021 USD ($) shares | Apr. 13, 2021 |
Business Acquisition [Line Items] | ||
Stock split ratio | 109,673.709 | |
IPO | ||
Business Acquisition [Line Items] | ||
Proceeds from sale of common stock (in shares) | 23,000,000 | |
Net proceeds from the IPO | $ | $ 399.3 | |
Underwriters Option | ||
Business Acquisition [Line Items] | ||
Proceeds from sale of common stock (in shares) | 3,000,000 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair value of financial instruments (Details) - Level 2 - USD ($) $ in Thousands | Mar. 30, 2024 | Dec. 31, 2023 |
Term Loan | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amount | $ 282,781 | $ 301,201 |
Term Loan | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amount | 277,832 | 289,153 |
Interest rate swap | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of interest rate swap asset | $ 600 | |
Fair value of interest rate swap liability | $ 1,200 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS, NET - Goodwill (Details) - USD ($) $ in Thousands | Mar. 30, 2024 | Dec. 31, 2023 |
GOODWILL AND INTANGIBLE ASSETS, NET | ||
Goodwill | $ 130,987 | $ 131,363 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS, NET - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 30, 2024 | Apr. 01, 2023 | Dec. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 393,493 | $ 393,493 | |
Foreign Currency Translation | (380) | 108 | |
Accumulated Amortization | 117,237 | 110,808 | |
Net Amount | 275,876 | 282,793 | |
Amortization of Intangible Assets | 6,412 | $ 6,632 | |
Trade names and trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 148,100 | 148,100 | |
Foreign Currency Translation | (251) | 72 | |
Accumulated Amortization | 31,233 | 29,583 | |
Net Amount | 116,616 | 118,589 | |
Patented technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 16,126 | 16,126 | |
Foreign Currency Translation | (4) | 1 | |
Accumulated Amortization | 9,111 | 8,713 | |
Net Amount | 7,011 | 7,414 | |
Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 13,000 | 13,000 | |
Accumulated Amortization | 2,023 | 1,806 | |
Net Amount | 10,977 | 11,194 | |
Pool designs | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 13,628 | 13,628 | |
Foreign Currency Translation | (124) | 35 | |
Accumulated Amortization | 3,207 | 2,973 | |
Net Amount | 10,297 | 10,690 | |
Franchise relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 1,187 | 1,187 | |
Accumulated Amortization | 1,187 | 1,187 | |
Dealer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 197,376 | 197,376 | |
Foreign Currency Translation | (1) | ||
Accumulated Amortization | 66,400 | 62,470 | |
Net Amount | 130,975 | 134,906 | |
Order backlog | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 1,600 | 1,600 | |
Accumulated Amortization | 1,600 | 1,600 | |
Non-competition agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 2,476 | 2,476 | |
Accumulated Amortization | $ 2,476 | $ 2,476 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS, NET - Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 30, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of fiscal year 2024 | $ 19,282 | |
2025 | 25,551 | |
2026 | 25,551 | |
2027 | 25,551 | |
2028 | 24,593 | |
Thereafter | 155,348 | |
Net Amount | $ 275,876 | $ 282,793 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Thousands | Mar. 30, 2024 | Dec. 31, 2023 |
INVENTORIES, NET | ||
Raw materials | $ 53,145 | $ 55,081 |
Finished goods | 42,006 | 42,056 |
Inventory, net, Total | $ 95,151 | $ 97,137 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Mar. 30, 2024 | Dec. 31, 2023 | Feb. 23, 2022 |
Debt Instrument [Line Items] | |||
Gross debt | $ 290,500 | ||
Less: Unamortized discount and debt issuance costs | (7,719) | $ (8,112) | |
Total debt | 282,781 | 301,201 | |
Less: Current portion of long-term debt | (3,250) | (21,250) | |
Total long-term debt | 279,531 | 279,951 | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 75,000 | $ 75,000 | |
Term Loan | |||
Debt Instrument [Line Items] | |||
Gross debt | $ 290,500 | $ 309,313 | |
Maximum borrowing capacity | $ 325,000 |
LONG-TERM DEBT - Revolving Cred
LONG-TERM DEBT - Revolving Credit Facility (Details) - Revolving Credit Facility - USD ($) $ in Millions | Feb. 23, 2022 | Mar. 30, 2024 |
Debt Instrument [Line Items] | ||
Commitment fee rate range, depending on leverage ratio | 0.375% | |
Debt issuance costs | $ 0.8 | |
Amount outstanding | $ 0 | |
Maximum borrowing capacity | $ 75 | $ 75 |
Minimum | ||
Debt Instrument [Line Items] | ||
Commitment fee rate range, depending on leverage ratio | 0.25% | |
Maximum | ||
Debt Instrument [Line Items] | ||
Commitment fee rate range, depending on leverage ratio | 0.50% | |
SOFR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.50% | |
Canadian Prime Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.50% | |
EURIBOR or AUD Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.50% |
LONG-TERM DEBT - Term Loan (Det
LONG-TERM DEBT - Term Loan (Details) - USD ($) | 3 Months Ended | |||
Feb. 23, 2022 | Mar. 30, 2024 | Apr. 01, 2023 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | ||||
Repayment of long term debt | $ 18,813,000 | $ 813,000 | ||
Amount outstanding, net of discount and issuance costs | 282,781,000 | $ 301,201,000 | ||
Discount and debt issuance costs | 7,719,000 | $ 8,112,000 | ||
Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Repayment amount to be paid quarterly | $ 812,500 | |||
Principal payments calculated as percent of outstanding principal | 0.25% | |||
Mandatory prepayment rate as a percentage of excess cash flow | 50% | |||
Mandatory prepayment rate as a percentage of non-permitted indebtedness | 100% | |||
Repayment of long term debt | 18,000,000 | |||
Amount outstanding, net of discount and issuance costs | 282,800,000 | |||
Debt issuance costs | 4,300,000 | |||
Unamortized discount | $ 3,400,000 | |||
Effective interest rate | 9.89% | |||
Term Loan Facility | SOFR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.75% | |||
Term Loan Facility | SOFR | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 4% | |||
Term Loan Facility | Base Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.75% | |||
Term Loan Facility | Base Rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3% |
LONG-TERM DEBT - Interest rate
LONG-TERM DEBT - Interest rate swap (Details) - Interest rate swap - USD ($) $ in Millions | Mar. 10, 2023 | Feb. 28, 2022 |
Derivative [Line Items] | ||
Derivative notional amount | $ 161 | $ 200 |
SOFR | ||
Derivative [Line Items] | ||
Fixed borrowing rate | 4.3725% | 0.496% |
LONG-TERM DEBT - Principal paym
LONG-TERM DEBT - Principal payments due (Details) $ in Thousands | Mar. 30, 2024 USD ($) |
Principal payments due | |
Remainder of fiscal year 2024 | $ 2,438 |
2025 | 3,250 |
2026 | 3,250 |
2027 | 3,250 |
2028 | 3,250 |
Thereafter | 275,062 |
Total payments due | $ 290,500 |
PRODUCT WARRANTIES (Details)
PRODUCT WARRANTIES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2024 | Apr. 01, 2023 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance at the beginning of the fiscal year | $ 3,161 | $ 3,990 |
Adjustments to reserve | 537 | 354 |
Less: Settlements made (in cash or in kind) | (679) | (761) |
Balance at the end of the fiscal quarter | $ 3,019 | $ 3,583 |
LEASES - Lease expense (Details
LEASES - Lease expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2024 | Apr. 01, 2023 | |
Components of lease expense: | ||
Operating lease expense | $ 2,163 | $ 2,351 |
Finance lease amortization of assets | 212 | 109 |
Finance lease interest on lease liabilities | 84 | 52 |
Short-term lease expense | 56 | 54 |
Variable lease expense | 158 | 327 |
Total lease expense | $ 2,673 | $ 2,893 |
LEASES - Operating and finance
LEASES - Operating and finance lease right-of-use assets and liabilities and Supplemental information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 30, 2024 | Apr. 01, 2023 | Dec. 31, 2023 | |
Lease right-of-use assets: | |||
Operating leases | $ 28,696 | $ 30,788 | |
Finance leases | $ 3,887 | $ 3,912 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets | Other Assets | |
Total lease right-of-use assets | $ 32,583 | $ 34,700 | |
Lease-related liabilities | |||
Operating leases, Current | 6,823 | 7,133 | |
Finance leases, Current | $ 782 | $ 746 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Current | Other Liabilities, Current | |
Operating leases, Non-current | $ 22,963 | $ 24,787 | |
Finance leases, Non-current | $ 3,247 | $ 3,285 | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent | |
Total finance lease liabilities | $ 33,815 | $ 35,951 | |
Weighted-average remaining lease term (years) | |||
Finance leases | 5 years | 5 years 2 months 12 days | |
Operating leases | 5 years 7 months 6 days | 5 years 8 months 12 days | |
Weighted-average discount rate | |||
Finance leases | 8.20% | 8.20% | |
Operating leases | 5% | 5.10% | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ 1,794 | $ 1,817 |
LEASES - Maturities of operatin
LEASES - Maturities of operating lease liabilities (Details) - USD ($) $ in Thousands | Mar. 30, 2024 | Dec. 31, 2023 |
Operating Leases | ||
Remainder of fiscal 2024 | $ 6,260 | |
2025 | 7,309 | |
2026 | 5,805 | |
2027 | 4,097 | |
2028 | 3,111 | |
Thereafter | 7,637 | |
Total lease payments | 34,219 | |
Less: Interest | (4,433) | |
Present value of lease liability | 29,786 | |
Finance Leases | ||
Remainder of fiscal 2024 | 813 | |
2025 | 1,030 | |
2026 | 934 | |
2027 | 858 | |
2028 | 845 | |
Thereafter | 436 | |
Total lease payments | 4,916 | |
Less: Interest | (886) | |
Present value of lease liability | 4,030 | |
Total | ||
Remainder of fiscal year 2024 | 7,073 | |
2025 | 8,339 | |
2026 | 6,739 | |
2027 | 4,955 | |
2028 | 3,956 | |
Thereafter | 8,073 | |
Total lease payments | 39,135 | |
Less: Interest | (5,319) | |
Present value of lease liability | 33,815 | $ 35,951 |
Rounding (member) | ||
Total | ||
Present value of lease liability | $ 33,816 |
NET SALES (Details)
NET SALES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2024 | Apr. 01, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 110,629 | $ 137,719 |
In-ground Swimming Pools | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 59,832 | 78,612 |
Covers | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 26,868 | 32,745 |
Liners | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 23,929 | $ 26,362 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2024 | Apr. 01, 2023 | |
INCOME TAXES | ||
Effective income tax rate | (7.20%) | 16.90% |
Tax benefits | $ 0 | $ 0 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - Repurchase Program - USD ($) $ in Millions | 3 Months Ended | |
Mar. 30, 2024 | May 10, 2022 | |
Amount authorized | $ 100 | |
Amount remaining for repurchases | $ 77 | |
Common Stock | ||
Number of shares repurchased during the period | 0 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Apr. 12, 2021 | Mar. 30, 2024 | Apr. 01, 2023 | May 02, 2023 | |
STOCK-BASED COMPENSATION | ||||
Maximum grant date fair value of cash and equity awards that may be awarded to a non-employee director | $ 750,000 | |||
Shares reserved for issuance | 21,170,212 | 8,000,000 | ||
Share based compensation expense | $ 1,243 | $ 6,769 | ||
Total unrecognized stock-based compensation expense | $ 13,300 | |||
Total unrecognized stock-based compensation expense expected to be recognized over a weighted-average period | 2 years 2 months 12 days | |||
Cost of sales | ||||
STOCK-BASED COMPENSATION | ||||
Share based compensation expense | 426 | |||
Selling, general and administrative | ||||
STOCK-BASED COMPENSATION | ||||
Share based compensation expense | $ 1,243 | $ 6,343 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Awards (Details) - Restricted stock awards | 3 Months Ended |
Mar. 30, 2024 $ / shares shares | |
Shares | |
Balance at beginning | shares | 42,886 |
Granted | shares | |
Balance at ending | shares | 42,886 |
Weighted Average Grant Date Fair Value | |
Balance at beginning | $ / shares | $ 19 |
Granted | $ / shares | |
Balance at ending | $ / shares | $ 19 |
STOCK-BASED COMPENSATION - Re_2
STOCK-BASED COMPENSATION - Restricted Stock Units (Details) - Restricted stock units | 3 Months Ended |
Mar. 30, 2024 $ / shares shares | |
Shares | |
Balance at beginning | shares | 2,235,479 |
Granted | shares | 2,282,336 |
Vested | shares | (411,301) |
Forfeited | shares | (85,392) |
Balance at ending | shares | 4,021,122 |
Weighted Average Grant Date Fair Value | |
Balance at beginning | $ / shares | $ 3.60 |
Granted | $ / shares | 2.87 |
Vested | $ / shares | 3.94 |
Forfeited | $ / shares | 2.93 |
Balance at ending | $ / shares | $ 3.17 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 30, 2024 | Apr. 01, 2023 | Dec. 31, 2023 | |
Employee Stock Option | |||
Shares | |||
Outstanding at the beginning | 1,554,294 | ||
Forfeited | (42,004) | ||
Expired | (57,616) | ||
Outstanding at the end | 1,454,674 | 1,554,294 | |
Vested and expected to vest | 1,454,674 | ||
Options exercisable at the end | 678,477 | ||
Weighted-Average Exercise Price per Share | |||
Outstanding at the beginning (in dollars per share) | $ 15.43 | ||
Forfeited (in dollars per share) | 16.92 | ||
Expired (in dollars per share) | 17.78 | ||
Outstanding at the end (in dollars per share) | 15.30 | $ 15.43 | |
Vested and expected to vest at the end (in dollars per share) | 15.30 | ||
Options exercisable at the end (in dollars per share) | $ 16.10 | ||
Weighted-Average Remaining Contract Term | |||
Outstanding at the end (in years) | 7 years 6 months 29 days | 0 years | |
Vested and expected to vest at the end (in years) | 7 years 6 months 29 days | ||
Options exercisable at the end (in years) | 7 years 4 months 17 days | ||
Stock Appreciation Rights (SARs) | |||
Shares | |||
Outstanding at the beginning | 755,802 | ||
Granted | 0 | 790,181 | |
Forfeited | (49,342) | ||
Outstanding at the end | 706,460 | 755,802 | |
Vested and expected to vest | 706,460 | ||
Options exercisable at the end | 161,893 | ||
Weighted-Average Exercise Price per Share | |||
Outstanding at the beginning (in dollars per share) | $ 3.16 | ||
Granted (in dollars per share) | 3.24 | ||
Forfeited (in dollars per share) | 3.24 | ||
Outstanding at the end (in dollars per share) | 3.15 | $ 3.16 | |
Vested and expected to vest at the end (in dollars per share) | 3.15 | ||
Options exercisable at the end (in dollars per share) | $ 3.24 | ||
Weighted-Average Remaining Contract Term | |||
Outstanding at the end (in years) | 9 years 1 month 17 days | ||
Vested and expected to vest at the end (in years) | 9 years 1 month 17 days | ||
Options exercisable at the end (in years) | 9 years 1 month 2 days | ||
Outstanding at the end (in dollars) | $ 569,296 | ||
Vested and expected to vest (in dollars) | 569,296 | ||
Options exercisable at the end (in dollars) | $ 116,563 |
STOCK-BASED COMPENSATION - Perf
STOCK-BASED COMPENSATION - Performance Stock Units (Details) - $ / shares | 3 Months Ended | |
Mar. 30, 2024 | May 02, 2023 | |
Weighted Average Grant Date Fair Value | ||
Shares reserved for issuance | 21,170,212 | 8,000,000 |
Performance Stock Units | ||
Shares | ||
Granted | 427,145 | |
Balance at ending | 427,145 | |
Weighted Average Grant Date Fair Value | ||
Granted | $ 2.87 | |
Balance at ending | $ 2.87 | |
Shares reserved for issuance | 427,145 | |
Performance level percent | 100% | |
Performance period | 1 year | |
Additional shares authorized | 427,145 | |
Performance Stock Units | Maximum | ||
Weighted Average Grant Date Fair Value | ||
Performance level percent | 200% | |
Performance Stock Units | Minimum | ||
Weighted Average Grant Date Fair Value | ||
Performance level percent | 0% | |
Performance Stock Units | Maximum performance level | ||
Weighted Average Grant Date Fair Value | ||
Performance level percent | 200% |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 30, 2024 | Apr. 01, 2023 | Dec. 31, 2023 | |
Numerator: | |||
Net loss | $ (7,864) | $ (14,368) | |
Weighted-average common shares outstanding | |||
Basic | 115,038,929 | 112,102,198 | |
Diluted | 115,038,929 | 112,102,198 | |
Net loss per share attributable to common stockholders: | |||
Basic | $ (0.07) | $ (0.13) | |
Diluted | $ (0.07) | $ (0.13) | |
Common stock issued and outstanding for accounting purposes | 115,346,803 | 114,828,896 | |
Restricted stock awards | |||
Net loss per share attributable to common stockholders: | |||
Potentially dilutive securities outstanding | 42,886 | 2,576,219 | |
Restricted stock units | |||
Net loss per share attributable to common stockholders: | |||
Potentially dilutive securities outstanding | 24,146 | 500,751 | |
Employee Stock Option | |||
Net loss per share attributable to common stockholders: | |||
Potentially dilutive securities outstanding | 1,521,158 | 1,886,497 | |
Stock appreciation rights | |||
Net loss per share attributable to common stockholders: | |||
Potentially dilutive securities outstanding | 657,999 | ||
Performance stock units | |||
Net loss per share attributable to common stockholders: | |||
Potentially dilutive securities outstanding | 75,937 |
RELATED PARTY TRANSACTIONS - Br
RELATED PARTY TRANSACTIONS - Bright AI Services (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Bright AI Services | |
Related Party Transaction [Line Items] | |
Accounts payable | $ 0 |
RESTRUCTURING COSTS (Details)
RESTRUCTURING COSTS (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 30, 2024 | Dec. 31, 2023 | |
RESTRUCTURING COSTS | ||
Exit or disposal cost | $ 0.1 | $ 0.2 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2024 | Apr. 01, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (7,864) | $ (14,368) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |