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What changed in Latham Group, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Latham Group, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+491 added−499 removedSource: 10-K (2026-03-04) vs 10-K (2025-03-05)

Top changes in Latham Group, Inc.'s 2025 10-K

491 paragraphs added · 499 removed · 414 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

79 edited+10 added−10 removed67 unchanged
Biggest changeLiners We are the largest replacement liner manufacturer in the North American residential in-ground swimming pool market, serving a market with large, non-discretionary replacement demand. Vinyl liners are a required component for the interior surface of a vinyl pool and our liners are highly customizable in shape, size, color, and pattern.
Biggest changeSince our covers can be used for any pool, regardless of materials, shape, or size, we are able to replace covers for both our legacy homeowners and homeowners previously served by smaller, regional manufacturers. Liners We are the largest pool liner manufacturer in the North American residential in-ground swimming pool market, serving a market with large, non-discretionary replacement demand.
We strive to maintain strong and collaborative relationships with our suppliers and believe that the sources for these inputs are well-established, generally available on world markets, and in sufficient quantity. We do not undertake defined purchase agreements requiring fixed commitments or “take or pay” requirements with our suppliers.
We strive to maintain strong and collaborative relationships with our suppliers and believe that the sources for these inputs are well-established, generally available on world markets, and in sufficient quantity. We generally do not undertake defined purchase agreements requiring fixed commitments or “take or pay” requirements with our suppliers.
Based on our knowledge of our dealers, we believe it takes three months or more to install a concrete pool compared to two to three days for fiberglass. We do not participate in the concrete pool market other than to provide automatic safety covers and all-season covers for concrete pools.
Based on our knowledge of our dealers, we believe it takes three months or more to install a concrete pool compared to two to three days for fiberglass. We do not participate in the concrete pool market other than to provide automatic safety covers and all-season pool covers for concrete pools.
New emerging risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business, financial condition, results of operations and cash flows. We operate in a very competitive and rapidly changing environment, and new risks emerge from time to time.
New emerging risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business, financial condition, results of operations and cash flows. We operate in a very competitive and rapidly changing environment, and new risks emerge from time to time that may impair our business, financial condition, results of operations and cash flows.
Our highly-engineered plastic molding machines provide us the leading-edge capability to mold high-quality structural panels in customized, proprietary shapes. For our steel panel vinyl pools, we have various processes and highly-engineered metal processing machines that have the capability to convert flat coil steel through various steps into panels that have been punched, bent, seamed, welded, and stacked.
Our highly-engineered plastic molding machines provide us the leading-edge capability to mold high-quality structural panels in customized, proprietary shapes. For our steel panel vinyl pools, we have various processes and highly-engineered and automated metal processing machines that have the capability to convert flat coil steel through various steps into panels that have been punched, bent, seamed, welded, and stacked.
Fiberglass pools are underpenetrated in the United States residential in-ground swimming pool market relative to other geographic markets, such as Australia, New Zealand, and Western Europe. A conversion to fiberglass pools from legacy pool construction materials is being driven by greater homeowner awareness of the benefits of fiberglass products.
Fiberglass pools are underpenetrated in the United States residential in-ground swimming pool market relative to other geographic markets, such as Canada, Australia, New Zealand, and Western Europe. A conversion to fiberglass pools from legacy pool construction materials is being driven by greater homeowner awareness of the benefits of fiberglass products.
Fiberglass pools can be installed in as little as two to three days, compared to up to three or more months for concrete pools of comparable size. ● Premium quality and aesthetics . We believe our fiberglass pool offering is the most attractive on the market.
Fiberglass pools can be installed in as little as two to three days, compared to three or more months for concrete pools of comparable size. • Premium quality and aesthetics . We believe our fiberglass pool offering is the most attractive on the market.
See “Risk Factors—Risks Related to Our Operations and Industry—We face competition both from within our industry and from other outdoor living products and if we are not able to compete effectively, our prospects for future success will be jeopardized.” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Performance—Volume of Products Sold.” 10 Table of Contents Seasonality Although we generally have demand for our products throughout the year, our business is seasonal, and weather is one of the principal external factors affecting the business.
See “Risk Factors—Risks Related to Our Operations and Industry—We face competition both from within our industry and from other outdoor living products and if we are not able to compete effectively, our prospects for future success will be jeopardized.” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Performance—Volume of Products Sold.” Seasonality Although we generally have demand for our products throughout the year, our business is seasonal, and weather is one of the principal external factors affecting the business.
In order to strengthen our relationship with our most loyal dealer partners, we have implemented our “Latham Grand” dealer program, whereby we have secured exclusivity with over 300 of our largest dealers in North America. We also have a strong distribution network with over 475 distributor branch locations that represent our products.
In order to strengthen our relationship with our most loyal dealer partners, we have implemented our “Latham Grand” dealer program, whereby we have secured exclusivity with over 375 of our largest dealers in North America. We also have a strong distribution network with over 475 distributor branch locations that represent our products.
Beginning in 2022, we published an annual ESG report highlighting our progress in each of the priority ESG topics and actions that are most relevant to our business and our stakeholders that were determined by a materiality assessment conducted in 2021.
Beginning in 2022, we published an annual sustainability report highlighting our progress in each of the priority sustainability topics and actions that are most relevant to our business and our stakeholders that were determined by a materiality assessment conducted in 2021.
Partnership with our dealers is integral to our collective success, and we have enjoyed long-tenured relationships averaging over 14 years. We support our dealer network with business development tools, co-branded marketing programs, and in-house training.
Partnership with our dealers is integral to our collective success, and we have enjoyed long-tenured relationships averaging over 15 years. We support our dealer network with business development tools, co-branded marketing programs, and in-house training.
Our primary focus in the Sand States is driving the conversion to fiberglass pools from concrete but we also see this as an opportunity to increase adoption of automatic safety covers. Utilize Leading Brand and Digital Assets to Generate Greater Volumes and Quality of Homeowner Leads Since 2019, we have increased our investments in our digital strategies and consumer marketing.
Our primary focus in the Sand States is driving the conversion to fiberglass pools from concrete but we also see this as an opportunity to increase awareness and adoption of automatic safety covers. Utilize Leading Brand and Digital Assets to Generate Greater Volumes and Quality of Homeowner Leads We have increased our investments in our digital strategies and consumer marketing.
Our reputation for exceptional products, services and quality relies on having exceptional people, so we ensure that our team is rewarded, engaged, and developed to build fulfilling careers. We provide competitive employee wages that are appropriate to employee positions, skill levels, experience, knowledge, and geographic location, and we provide additional rewards including incentive plans, bonus plans, and achievement awards.
Our reputation for exceptional products, services and quality relies on having exceptional people, so we ensure that our team is rewarded, engaged, and developed to build fulfilling careers. We provide competitive employee wages that are appropriate to employee positions, skill levels, experience, knowledge, and geographic location, and we provide additional rewards including incentive plans, bonus plans, and achievement awards.
These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “confident,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology.
These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “confident,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “plan,” 12 Table of Contents “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology.
The main alternative to vinyl and fiberglass pools are concrete pools, which are built in the ground and are constructed by pouring concrete over steel rods to create the shell of the pool. Concrete pools require frequent and more costly maintenance than fiberglass.
An alternative to vinyl and fiberglass pools are concrete pools, which are built in the ground and are constructed by pouring concrete over steel rods to create the shell of the pool. Concrete pools require frequent and more costly maintenance than fiberglass.
With our differentiated portfolio of products, manufacturing capabilities, customer service, and homeowner connectivity, we have developed a reputation as an innovative and dependable partner to our dealers and distributors. Through our “Latham University” training program, our dealer partners discover firsthand the benefits of fiberglass pools, including the ease and speed of installation.
With our differentiated portfolio of products, manufacturing capabilities, customer service, and homeowner connectivity, we have developed a reputation as an innovative and dependable partner to our dealers and distributors. Through our “Latham University” training program, our dealer partners discover firsthand the benefits of fiberglass pools, including the ease and 4 Table of Contents speed of installation.
Our Board of Directors (“Board”) views oversight and effective management of ESG related risks and opportunities as essential to the Company’s ability to execute its strategy and achieve long-term sustainable growth.
Our Board of Directors (“Board”) views oversight and effective management of sustainability related risks and opportunities as essential to the Company’s ability to execute its strategy and achieve long-term sustainable growth.
Our forward-looking statements do not reflect the potential impact of any future acquisitions, merger, dispositions, joint ventures, or investments we may undertake. We qualify all of our forward-looking statements by these cautionary statements.
Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may undertake. We qualify all of our forward-looking statements by these cautionary statements.
We benchmark our compensation and benefits plan regularly to ensure our employee value proposition remains competitive and attractive to new talent. The health and safety of our people is a primary concern for us, so we have implemented a comprehensive health and safety program to manage workplace safety hazards and to protect employees.
We benchmark our compensation and benefits plan regularly to ensure our employee value proposition remains competitive and attractive to new talent. The health and safety of our people is a primary concern for us, so we have implemented a comprehensive health and safety program to manage workplace safety hazards and to protect employees.
We provide regular training and competency development to verify and ensure compliance with health and safety procedures and regulations. Employee Engagement and Inclusion Employee engagement and inclusion, and belonging are fundamental principles in our culture. We are committed to fostering, cultivating, celebrating, and preserving a culture of belonging among our employees, customers, 11 Table of Contents and suppliers.
We provide regular training and competency development to verify and ensure compliance with health and safety procedures and regulations. Employee Engagement and Inclusion Employee engagement and inclusion, and belonging are fundamental principles in our culture. We are committed to fostering, cultivating, celebrating, and preserving a culture of belonging among our employees, customers, and suppliers.
For example, the Latham Augmented Reality Pool Visualizer app allows homeowners to browse fiberglass 4 Table of Contents models and to select from a variety of options from their mobile device. Our digital strategy has resulted in superior search engine optimization performance.
For example, the Latham Augmented Reality Pool Visualizer app allows homeowners to browse fiberglass models and to select from a variety of options from their mobile device. Our digital strategy has resulted in superior search engine optimization performance.
Our coast-to-coast network of facilities allows us to be within a close proximity to our customers with shorter lead times and lower transportation costs. This is a key competitive advantage as transportation costs of fiberglass pools become increasingly expensive with longer shipping distances.
Our coast-to-coast network of facilities allows us to be within a close proximity to our customers with industry leading lead times and lower transportation costs. This is a key competitive advantage as transportation costs of fiberglass pools become increasingly expensive with longer shipping distances.
Our management team develops ESG strategy and related goals and policies through an ESG working group, and our ESG program is overseen by the Nominating and Corporate Governance Committee of our Board. The working group is a cross-functional team managing the day-to-day implementation of company initiatives and accountability for performance.
Our management team develops sustainability strategy and related goals and policies through a sustainability working group, and our sustainability program is overseen by the Nominating and Corporate Governance Committee of our Board. The working group is a cross-functional team managing the day-to-day implementation of Company initiatives and accountability for performance.
Health, Safety, and Wellness Our health and safety policies and practices include an employee training and competency development program to train, verify, and encourage compliance with health and safety procedures and regulations annually.
Health, Safety and Wellness Our health and safety policies and practices include an employee training and competency development program to regularly train, verify, and encourage compliance with health and safety procedures and regulations.
Some of the environmental laws applicable to us provide that a current or previous owner or operator of real property may be liable for the costs of removal or remediation of environmental contamination on, under, or in that property or other impacted properties.
Some of the environmental laws applicable to us provide that a current or previous owner or operator of real property may be liable for the costs of removal or remediation of environmental contamination on, under, or in that 11 Table of Contents property or other impacted properties.
Our Nominating and Corporate Governance Committee reviews the Company’s progress towards the achievement of its ESG strategy and goals on a periodic basis.
Our Nominating and Corporate Governance Committee reviews the Company’s progress towards the achievement of its sustainability strategy and goals on a periodic basis.
Demand for our products has also been affected by the level of interest rates and the availability of credit, consumer confidence and spending, housing affordability, demographic trends, employment levels, and other macroeconomic factors that may influence the extent to which consumers engage in renovations to their backyard, including pool installation projects to enhance the outdoor living spaces of their homes.
Demand for our products has also been affected by the level of interest rates and the availability of credit, consumer confidence and ability and willingness to spend, housing affordability, demographic trends, employment levels, tariffs and other macroeconomic factors that may influence the extent to which consumers engage in renovations to their backyard, including pool installation projects to enhance the outdoor living spaces of their homes.
We monitor our total recordable incident rate monthly and review workplace injury and claims trends with our carriers monthly to identify areas of focus and opportunities for implementing new programs to protect our employees.
We regularly monitor our total recordable incident rate and review workplace injury and claims trends monthly to identify areas of focus and opportunities for implementing new programs to protect our employees.
These statements involve known and unknown risks, uncertainties, assumptions and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or 13 Table of Contents achievements expressed or implied by the forward-looking statements, including those set forth under the section of this Annual Report titled “Risk Factors,” "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Annual Report, or as described on other subsequent reports we file or furnish with the SEC.
These statements involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside of our control, which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including those set forth under the section of this Annual Report titled “Risk Factors,” "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Annual Report, or as described on other subsequent reports we file or furnish with the SEC.
Our largest distributor, which provides valuable local market support with a network of over 300 locations, accounted for 21.0% of our net sales in 2024, 20.3% of our net sales in 2023, and 20.3% of our net sales in 2022.
Our largest distributor, which provides valuable local market support with a network of over 300 locations, accounted for 22.6% of our net sales in 2025, 21.0% of our net sales in 2024, and 20.3% of our net sales in 2023.
For additional information, see Note 4 to our Consolidated Financial Statements included elsewhere in this Annual Report. 7 Table of Contents We have long-term relationships with both our dealers and distributors.
For additional information, see Note 4 to our Consolidated Financial Statements included elsewhere in this Annual Report. We have long-term relationships with both our dealers and distributors.
Latham’s initiatives include, but are not limited to, our practices and policies on recruitment and selection; compensation; benefits plan design; professional development and training; promotions; transfers; internal communications; social and recreational programs; terminations; and both ongoing development of a work environment that encourages and enforces respectful communication, teamwork, work/life balance, and engaging in community efforts that promote a greater understanding and respect for the principles of diversity.
Latham’s initiatives include, but are not limited to, our practices and policies on recruitment and selection; compensation; benefits plan design; professional development and training; promotions; transfers; internal communications; social and recreational programs; terminations; and both ongoing development of a work environment that encourages and enforces respectful communication, teamwork, work/life balance, and engaging in community efforts.
Our supply agreements with key suppliers are typically negotiated on an annual basis. The cost of the raw materials used in our manufacturing processes has historically varied and has been affected by changes in supply and demand. We have minimal fixed-price contracts with our major vendors.
Our supply agreements with key suppliers are typically negotiated on an annual basis. The cost of the raw materials used in our manufacturing processes has historically varied and has been affected by changes in supply and demand. We have minimal fixed-price contracts with our major vendors. Prices for spot market purchases are negotiated on a continuous basis.
All statements contained in this report other than statements of historical fact may constitute forward-looking statements, including statements regarding our future operating results and financial position, our business strategy and plans, business and market trends, our objectives for future operations, macroeconomic and geopolitical conditions, changes in U.S. trade priorities, policies, regulations and tariffs, the implementation of our cost reduction plans and expected benefits, and the sufficiency of our cash balances, working capital and cash generated from operating, investing, and financing activities for our future liquidity and capital resource needs.
All statements contained in this report other than statements of historical fact may constitute forward-looking statements, including statements regarding our future operating results and financial position, our business strategy and plans, business and market trends, our objectives for future operations, macroeconomic and geopolitical conditions, acquisitions and related benefits, the implementation of our cost reduction plans and expected benefits, and the sufficiency of our cash balances, working capital and cash generated from operating, investing, and financing activities for our future liquidity and capital resource needs.
With an operating history that spans over 65 years, we offer the industry’s broadest portfolio of pools and related products, including in-ground swimming pools, pool covers, and pool liners. We have a heritage of innovation.
We are Latham, The Pool Company TM . With an operating history that spans over 70 years, we offer the industry’s broadest portfolio of pools and related products, including in-ground swimming pools, pool covers, and pool liners. We have a heritage of innovation.
Since launching our formal environmental, social and governance (“ESG”) program in 2021, we have worked with independent consultants to assess our ESG performance, benchmark our efforts against our competitors, and establish and implement a comprehensive strategy to manage ESG risks and opportunities effectively.
Since launching our formal sustainability program in 2021 we have worked with independent consultants to assess our sustainability performance, benchmark our efforts against our competitors, and establish and implement a comprehensive strategy to manage sustainability risks and opportunities effectively.
Distribution Our products are sold through both one-step and two-step business-to-business distribution channels. In our one-step distribution channel, which we exclusively use to sell our fiberglass pools, we sell our products directly to dealers who, in turn, sell our products to homeowners. Latham provides the delivery service for our dealers, shipping direct from our factories to the consumers’ backyard.
In our one-step distribution channel, which we exclusively use to sell our fiberglass pools, we sell our products directly to dealers who, in turn, sell our products to homeowners. Latham provides the delivery service for our dealers, shipping direct from our factories to the consumers’ backyard.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Key Factors Affecting Our Performance — Acquisitions and Partnerships.” Human Capital Resources As of December 31, 2024, we had 1,817 full-time employees, of whom 142 were based outside of North America.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Key Factors Affecting Our Performance — Acquisitions and Partnerships.” 10 Table of Contents Human Capital Resources As of December 31, 2025, we had 1,804 full-time employees, of whom 137 were based outside of North America.
Measure is an end-to-end solution that provides dealers with a simple, cost-effective user experience, high-performance measuring accuracy, and a modernized ordering process. As of February 2025, we have added the capability to measure vinyl liners. To facilitate the decision to buy, we offer warranties for our products.
Measure is an end-to-end solution that provides dealers with a simple, cost-effective user experience, high-performance measuring accuracy, and a modernized ordering process. In 2025, we added the capability to measure vinyl liners with our MeasurePro tool and our mobile app, MeasureGo. To facilitate the decision to buy, we offer warranties for our products.
Our goals in executing this strategy are to expand our pool dealer base, target planned communities, align our product offerings with market demand, and address our marketing campaigns specifically to consumers and builders in these regions.
This provides a clear opportunity for our market share expansion and our goals in executing this strategy are to expand our pool dealer base, target master planned communities, align our product offerings with market demand, and address our marketing campaigns specifically to consumers and builders in these regions.
Acquisitions and Partnerships We have made five strategic acquisitions and one strategic investment since 2019: the purchase of CoverStar Central, an automatic safety cover dealer, in August 2024; the purchase of certain fiberglass pool manufacturing assets in Seminole, Oklahoma, in November 2022; the purchase of Radiant Pools, a manufacturer of vinyl-lined and aluminum-walled swimming pools, in November 2021; the purchase of GLI, a vinyl liner and safety cover manufacturer based in Ohio, in October 2020; and the purchase of Narellan, a manufacturer of fiberglass pools in Australia and New Zealand, in May 2019.
Acquisitions and Partnerships We have made seven strategic acquisitions and one strategic investment since 2019: the purchase of Coverstar Central, an automatic safety cover dealer, in August 2024, followed shortly after by the purchase of two smaller Coverstar dealers in New York and Tennessee in February 2025; the purchase of certain fiberglass pool manufacturing assets in Seminole, Oklahoma, in November 2022; the purchase of Radiant Pools, a manufacturer of vinyl-lined and aluminum-walled swimming pools, in November 2021; the purchase of GLI, a vinyl liner and all-season pool cover manufacturer based in Ohio, in October 2020; and the purchase of Narellan, a manufacturer of fiberglass pools in Australia and New Zealand, in May 2019.
In 2024, we purchased supplies from 236 suppliers, with 64% of supplies being purchased from our top ten suppliers and 13% of supplies being purchased from our largest supplier. The primary raw materials used in our products are PVC, galvanized steel, fiberglass, aluminum, various resins, high impact polystyrene, gelcoat and polypropylene fabric.
In 2025, we purchased supplies from 233 suppliers, with 60% of supplies being purchased from our top ten suppliers and 12% of supplies being purchased from our largest supplier. 8 Table of Contents The primary raw materials used in our products are PVC, galvanized steel, fiberglass, aluminum, various resins, high impact polystyrene, gelcoat and polypropylene fabric.
The contents of our website or any other website referenced are not a part of this report. ​ Cautionary Note Regarding Forward-Looking Statements Certain statements in this Annual Report on Form 10-K (this “Annual Report” or “report” constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Cautionary Note Regarding Forward-Looking Statements Certain statements in this Annual Report on Form 10-K (this “Annual Report” or “report”) constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Item 1. Business Overview We are the largest designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand. We hold the leading position in North America in every product category in which we compete.
Item 1. Business Overview We are the largest designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand. We hold the leading position in North America in every product category in which we compete. It is our view that we are the most sought-after brand in the pool industry.
Additionally, we provide on-site installation assistance to our new dealer partners on their initial fiberglass pool installation. In 2024, we continued the roll-out of Measure by Latham ("Measure"), a proprietary advanced AI-powered device that significantly reduces dealer time and error in measuring swimming pool safety covers, which we initially launched in early 2023.
Additionally, we provide on-site installation assistance to our new dealer partners on their initial fiberglass pool installation. We also offer Measure by Latham ("Measure"), a proprietary advanced AI-powered device that significantly reduces dealer time and error in measuring swimming pool safety covers.
Brands In North America, we operate under one banner, Latham, the Pool Company. Our literature for dealers, marketing materials, our website, social media, advertising and promotion and our co-branding of dealer premises each reflect the Latham branding. Our sub-brands, which sit under the Latham master brand, include Narellan TM , CoverStar TM , Radiant, and GLI, among others.
Brands In North America, we operate under one banner, Latham, The Pool Company TM . Our literature for dealers, marketing materials, our website, social media, advertising and promotion and our co-branding of dealer premises each reflect the Latham branding.
This allows us to provide high quality, purchase-ready leads to our dealer partners. Our new digital platform engages the consumer early in the pool buying process and facilitates the buying journey from inspiration and design to a Latham pool purchase.
We are generating our own leads, including via our online platform, mobile app, and dedicated marketing and promotional activities. This allows us to provide high quality, purchase-ready leads to our dealer partners. Our new digital platform engages the consumer early in the pool buying process and facilitates the buying journey from inspiration and design to a Latham pool purchase.
We regularly monitor our total recordable incident rate. We employ an environmental, health, and safety team that is responsible for managing, auditing, and executing unified, companywide safety and compliance programs, as well as working directly with site leadership and associates on safety awareness, reports, and preventative measures. Websites and Additional Information ​ The U.S.
We employ an environmental, health, and safety team that is responsible for managing, auditing, and executing unified, companywide safety and compliance programs, as well as working directly with site leadership and associates on safety awareness, reports, and preventative measures.
Prices for spot market purchases are negotiated on a continuous basis in line or better than current market prices. Other than occasional strategic purchases of larger quantities of certain raw materials, we generally buy materials on an as-needed basis. Changes in prices of our raw materials have a direct impact on our cost of sales.
Other than opportunistic strategic purchases of larger quantities of certain raw materials, we generally buy materials on an as-needed basis. Changes in prices of our raw materials have a direct impact on our cost of sales.
We have continuously invested to expand our manufacturing capacity and to improve our manufacturing processes for efficiency and consistency. In particular, we have implemented significant value engineering and lean manufacturing initiatives in the last two years. We have sufficient capacity and capability to support our growth targets over the next several years.
Our manufacturing processes require significant capital investment and expertise. We have continuously invested to expand our manufacturing capacity and to improve our manufacturing processes for efficiency and consistency. In particular, we have implemented significant value engineering and lean manufacturing initiatives in the last two years.
As a result of material conversion away from legacy pool construction materials such as concrete, market share growth of fiberglass pool starts in the United States is meaningfully outpacing that of the broader in-ground swimming pool market.
As a result of material conversion away from legacy pool construction materials such as concrete, market growth of fiberglass pool starts in the United States is meaningfully outpacing that of the broader in-ground swimming pool market. Despite this growth, fiberglass pools still have significant runway for growth in the United States relative to comparable international markets.
Our top ten dealer and distributor relationships accounted for 42.8% of our net sales in 2024, 40.4% of our net sales in 2023 and 39.4% of our net sales in 2022. Manufacturing We are a global manufacturer based in the United States, delivering quality products with a competitive cost position. Our manufacturing processes require significant capital investment and expertise.
Our top ten dealer and distributor relationships accounted for 49.0% of our net sales in 2025, 42.8% of our net sales in 2024, and 40.4% of our net sales in 2023. Manufacturing We are a global manufacturer with manufacturing sites in the United States, Canada, Australia and New Zealand, delivering quality products with a competitive cost position.
Despite this growth, fiberglass pools still have significant runway for growth in the United States relative to comparable international markets. 3 Table of Contents The benefits of fiberglass products include: ● Lower up-front and lifecycle costs . Fiberglass pools cost less and have lower operating and repair expenses compared to concrete pools. ● Faster and easier installation .
The benefits of fiberglass products include: • Lower up-front and lifecycle costs . Fiberglass pools cost less and have lower operating and repair expenses compared to concrete pools. 3 Table of Contents • Faster and easier installation .
Our centralized sourcing model focuses on achieving competitive costs and ensuring supply availability. The manufacturing facilities coordinate all material deliveries with respect to volume and timing to ensure proper alignment between consumption and working capital programs. In particular, we have implemented enhanced procurement programs to further diversify our supplier base in the last two years.
Our centralized sourcing model focuses on ensuring best in class product quality, achieving competitive costs and ensuring supply availability. The manufacturing facilities coordinate all material deliveries with respect to volume and timing to ensure proper alignment between consumption and working capital programs.
In addition, to assist consumers in financing their pool purchase, we connect them to specialist pool financing providers with which we partner. Competition We hold the leading position in each of our product categories in North America, Australia and New Zealand.
In addition, to assist consumers in financing their pool purchase, we connect them to specialist pool financing providers with which we partner. 9 Table of Contents Competition We hold the leading position in North America in every product category in which we compete.
The benefits include lower up-front and total cost of ownership, quicker installation, easier maintenance, and a more convenient buying experience. Additionally, the connectivity we have built with our homeowners has provided us with the insights needed to stay ahead of homeowner demand trends that shape our market.
The benefits include lower up-front and lifecycle costs, faster and easier installation, better quality and fewer chemicals. Additionally, the connectivity we have built with our homeowners has provided us with the insights needed to stay ahead of homeowner demand trends that shape our market.
We believe that the shift in material from concrete to fiberglass that the North American in-ground swimming pool industry is undergoing will favor our business.
We believe that the ongoing shift in material from concrete to fiberglass in North America will favor our business.
In-ground Swimming Pools Fiberglass Pools We are the largest fiberglass pool manufacturer in North America, Australia and New Zealand. Demand for our fiberglass pools is driven by both accelerating material conversion from legacy pool construction materials, especially concrete, and the long-term value that our pools deliver to our homeowners through both lower up-front and lifecycle costs.
Demand for our fiberglass pools is driven by both material conversion from legacy pool construction materials, especially concrete, and the long-term value that our pools deliver to our homeowners through lower up-front and lifecycle costs, faster and easier installation, better quality and fewer chemicals.
Securities and Exchange Commission (“SEC”) maintains an Internet website at www.sec.gov that contains reports, proxy statements, and other information regarding our Company. In addition, we maintain an Investor Relations website at https://ir.lathampool.com/.
We have since published, and plan to continue to publish, an annual sustainability report to update our stakeholders on our ongoing journey. Websites and Additional Information The U.S. Securities and Exchange Commission (“SEC”) maintains an Internet website at www.sec.gov that contains reports, proxy statements, and other information regarding our Company. In addition, we maintain an Investor Relations website at https://ir.lathampool.com/.
Drive Fiberglass and Automatic Safety Cover Adoption in the Sand States In 2024, the Sand States (which we define as Florida, Texas, Arizona and California) accounted for approximately two-thirds of the pool starts in the United States. As the largest pool manufacturer in the United States, this provides a clear opportunity for our market share expansion.
Drive Fiberglass and Automatic Safety Cover Adoption in the Sand States In 2025, the Sand States (which we define as Florida, Texas, Arizona and California) accounted for approximately two-thirds of the pool starts in the United States where fiberglass pools are underrepresented.
Our products are recognized by homeowners, dealers, and distributors for their quality, durability, performance, compelling value proposition, ease of installation and diverse style and design options.
Products Our residential pool product portfolio is highly complementary and allows us to provide a wide-range of solutions to our homeowners. Our products are recognized by homeowners, dealers, and distributors for their quality, durability, performance, compelling value proposition, ease of installation and diverse style and design options.
We do not charge any fees to view, print, or access these reports on our website.
We do not charge any fees to view, print, or access these reports on our website. The contents of our website or any other website referenced are not a part of this report.
We manufacture fiberglass pools by applying various layers of materials onto a mold, ending with the fiberglass finish that gives these pools their name. We have the largest mold portfolio in the industry, designed to meet customer needs. We use an eight-layer building process to provide an industry-leading thickness and durability formula for our fiberglass pools.
In-ground Swimming Pools The manufacture of fiberglass pools requires highly specialized equipment and a technically skilled workforce. We manufacture fiberglass pools by applying various layers of materials onto a mold, ending with the fiberglass finish that gives these pools their name. We have the largest mold portfolio in the industry, designed to meet customer needs.
Latham Grand dealers agree to use us as their exclusive provider of fiberglass pools. Latham Grand dealers also agree, among other things, to receive fiberglass training and provide the highest level of customer satisfaction for installation.
Latham Grand dealers agree to feature us as their exclusive provider of fiberglass pools. Latham Grand dealers also, among other things, receive fiberglass training and provide the highest level of customer satisfaction for installation. Each Latham Grand dealer operates in specified territories, and our agreements with our Latham Grand dealers are generally perpetual and terminable at will by both parties.
We are in the middle of our digital transformation effort to upgrade our enterprise technology and resource planning systems. We use our own fleet of trucks and drivers, as well as third-party common carriers to ship our finished products. In-ground Swimming Pools The manufacture of fiberglass pools requires highly specialized equipment and a technically skilled workforce.
We have sufficient capacity and capability to support our growth targets over the next several years. We are in the middle of our digital transformation effort to upgrade our enterprise technology and resource planning systems. We use our own fleet of trucks and drivers, as well as third-party common carriers to ship our finished products.
We also have a thermoforming machine that produces all of our thermoformed one piece drop-in steps utilizing a wide variety of specialized molds of various shapes and sizes. 8 Table of Contents Covers Our automatic safety cover manufacturing facilities cut, sew, and assemble highly engineered motorized safety covers in a build-to-order model at or better than the industry standard delivery window, from design to shipment.
Covers Our automatic safety cover manufacturing facilities cut, sew, and assemble highly engineered motorized safety covers in a build-to-order model at or better than the industry standard delivery window, from design to shipment.
Our broad and compelling product offering, proven ability to serve as a value added partner to our dealers and distributors, 5 Table of Contents and our connectivity with homeowners have been critical in achieving the leading position in every pool product category in which we compete. Below is a summary of our products.
Our broad and compelling product offering and our connectivity with homeowners have been critical in achieving the leading position in North America in every pool product category in which we compete. Below is a summary of our products. In-ground Swimming Pools Fiberglass Pools We are the largest fiberglass pool manufacturer in North America, Australia and New Zealand.
Additionally, more and more pool owners are buying covers as local building codes push for safer pools. We also offer the most complete automatic safety cover portfolio when compared to our competitors, since our products range from affordable luxury options to premium covers.
We also offer the most complete automatic safety cover portfolio when compared to our competitors, since our products range from affordable luxury options to premium covers. Additionally, our automatic safety covers are compatible with fiberglass, vinyl, and concrete pools of almost any shape, size and brand, driving homeowner preference for our CoverStar TM brand.
Our environmental compliance costs in the future will depend, in part, on the nature and extent of our manufacturing activities, regulatory developments and future requirements that cannot presently be predicted. 12 Table of Contents Environmental, Social, and Governance To achieve long-term success as a business, we recognize the need to align our business strategy and priorities with the expectations of our stakeholders, and our ambition is to lead our industry towards a more sustainable future.
Sustainability To achieve long-term success as a business, we recognize the need to align our business strategy and priorities with the expectations of our stakeholders, and our ambition is to lead our industry towards a more sustainable future.
Our mission is to design and manufacture high-quality pool products, with the homeowner in mind, and to be a value-added partner to our dealers.
The broad geographic reach of our national manufacturing and distribution network allows us to service our customers on short lead times and to deliver our products in a cost-effective manner. Our mission is to design and manufacture high-quality pool products, with the homeowner in mind, and to be a value-added partner to our dealers.
We offer an extensive portfolio of fiberglass pools with customizable features that include unique colors, elaborate finishes, floor mosaics, lighting options, water features, in-floor cleaning, tanning ledges, and spillover spas. Our pools come in a variety of different shapes and sizes and are known by homeowners for their premium quality and aesthetics.
Our fiberglass pools can be installed in as little as two to three days, compared to three months or more for comparable concrete pools. We offer an extensive portfolio of fiberglass pools with customizable features that include unique colors, elaborate finishes, floor mosaics, lighting options, water features, in-floor cleaning, tanning ledges, and spillover spas.
Our fiberglass pools offer significant cost, installation, and maintenance advantages over traditional concrete pools while requiring fewer chemicals. Our innovative product portfolio is made up of a fiberglass, carbon fiber and Kevlar build and is backed by a lifetime warranty to the original purchaser, providing our homeowners with peace of mind and security.
Our innovative product portfolio is made up of a fiberglass, carbon fiber and Kevlar build and is backed by a lifetime warranty to the original purchaser, providing our homeowners with peace of mind and security. 5 Table of Contents While we believe that our fiberglass pools are the future of the industry and meet the majority of the market of pools sold, fiberglass pools do have some limitations.
While these covers extend the lives of our homeowners’ pools, they typically need to be replaced every eight to ten years, providing us with replacement revenue. Since our covers can be used for any pool, regardless of materials, shape, or size, we are able to replace covers for both our legacy homeowners and homeowners previously served by smaller, regional manufacturers.
All-Season Pool Covers Our winterizing mesh and solid pool covers are used during the off-season, reducing maintenance requirements for our homeowners. While these covers extend the lives of our homeowners’ pools, they typically need to be replaced every eight to ten years, providing us with replacement revenue.
We have made meaningful, ongoing investments to position Latham as the brand of choice for the homeowner. 9 Table of Contents Our continued investment in consumer engagement has been a key driver of our historical sales growth. We are generating our own leads, including via our online platform, mobile app, and consumer hotline.
Latham’s unique “direct-to-homeowner” marketing strategy is driving a greater understanding of the benefits of owning a pool, specifically a fiberglass pool, and generating significant consumer demand. We have made meaningful, ongoing investments to position Latham as the brand of choice for the homeowner. Our continued investment in consumer engagement has been a key driver of our historical sales growth.
The full resources of our company are dedicated to designing and manufacturing high-quality pool products, with the homeowner in mind, and positioning ourselves as a value-added partner to our dealers. We conduct our business as one operating and reportable segment that designs, manufactures, and markets in-ground swimming pools, pool covers, and pool liners.
The full resources of our Company are dedicated to designing and manufacturing high-quality pool products, with the homeowner in mind, and positioning ourselves as a value-added partner to our dealers. Our operations consist of approximately 1,850 employees on average across approximately 30 locations.
Our processing equipment offers tight tolerance and flexible manufacturing with compressed lead times across the various laser cutters, bending, assembly, and test equipment.
Our processing equipment offers tight tolerance and flexible manufacturing with compressed lead times across the various laser cutters, bending, assembly, and test equipment. Our all-season pool cover manufacturing facilities cut, sew, and build precisely designed and engineered all-season pool covers that are made to order and shipped at industry leading service levels.
Replacement vinyl liners provide us with a significant source of stable recurring revenue. 6 Table of Contents Automatic Safety Covers Our automatic safety covers provide increased safety, especially for children, and convenience for our homeowners while also driving savings by reducing energy, chemical and cleaning costs, and lowering water evaporation.
Automatic Safety Covers Our automatic safety covers provide increased safety, especially for children, and convenience for our homeowners while also driving savings by reducing energy, chemical and cleaning costs, and lowering water evaporation. Additionally, more and more pool owners are buying covers as local building codes push for safer pools.
We will continue to focus on acquiring high-quality, market-leading businesses with teams, capabilities, and technologies that are complementary to our existing offerings and that enable us to better serve homeowners and dealer partners. Products Our residential pool product portfolio is highly complementary and allows us to provide a wide-range of solutions to our homeowners.
With key integration activities complete, our revenue synergy initiatives are underway through an integrated marketing and sales strategy to effectively reach the builder and consumer markets. We will continue to focus on acquiring high-quality, market-leading businesses with teams, capabilities, and technologies that are complementary to our existing offerings and that enable us to better serve homeowners and dealer partners.
For example, in August 2024, we acquired Coverstar Central, LLC (“Coverstar Central”), our exclusive dealer of automatic safety covers in 29 states and our trusted partner since 2006. With key integration activities complete, our revenue synergy initiatives are underway through an integrated marketing and sales strategy to effectively reach the builder and consumer markets.
For example, in August 2024, we acquired Coverstar Central, LLC (“Coverstar Central”), our exclusive dealer of automatic safety covers in 29 states and, in February 2025 followed with the acquisition of two smaller Coverstar dealers in New York and Tennessee.
Removed
It is our view that we are the most sought-after brand in the pool industry and the only pool company that has established a direct relationship with the homeowner. We are Latham, The Pool Company TM .

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese risks include, but are not limited to, the following: ● unfavorable economic conditions and the related impact on consumer spending and demand for our products; ● inflationary impacts, including on our costs of labor, raw materials and services and on consumer demand for pool products; ● our reliance on global third-party suppliers and related impact on price, quality and quantity of raw materials; ● the impact of trade policies, including tariffs, on products, raw materials and components we import into the U.S.; ● declining home ownership rates adversely affect demand for our products; ● competition that we face; ● natural disasters, including resulting from climate change, geopolitical events, war, terrorism, public health emergencies or other catastrophic events; ● our reliance on our information technology systems and potential disturbances or breaches to our technological infrastructure; ● adverse weather conditions impacting our sales and timing of sales; ● pricing pressures resulting from industry consolidation; 14 Table of Contents ● interruption of our production capability at one or more of our manufacturing facilities from accident, fire, calamity or other causes or events affecting the global economy; ● product quality issues, warranty claims, installation or safety concerns and other claims, including those due to the failure of builders to follow our product installation instructions and specifications and our installation of autocovers; ● our ability to keep pace with rapidly evolving technological developments and standards, such as generative artificial intelligence; ● delays in, or systems disruptions issues caused by, the implementation of our enterprise resource planning system; ● our ability to attract, develop and retain highly qualified personnel; ● our ability to collect accounts receivables from our customers; ● compliance with new and existing government regulations; ● our ability to obtain transportation services to deliver our product and to obtain raw materials timely or increases in the cost of transportation; ● our ability to obtain, maintain and enforce intellectual property protection for our current and future products, and third-party claims against us for violation of their intellectual property; ● the risks of doing business internationally; ● our ability to realize the anticipated growth opportunities and cost synergies from acquisitions; ● possible impairments to our goodwill, other intangible assets or fixed assets; ● our ability to secure financing and our substantial indebtedness; and ● the other factors set forth under “Risk Factors.” ​ Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business, financial condition, results of operations and cash flows. 15 Table of Contents Risks Related to Our Operations and Industry Net sales of our swimming pools and related products are adversely affected by unfavorable economic conditions and the related impact on consumer spending, which are driven by factors outside of our control.
Biggest changeThese risks include, but are not limited to, the following: • potential cyber-attacks or system failures on our information technology infrastructure; • global and domestic political uncertainty and instability resulting in changes in international trade relationships and financial market volatility could make it more difficult for us to access financing and adversely affect our business and operations; • inflationary impacts, including on our costs of labor, raw materials and services and on consumer demand for pool products; • the impact of trade policies, including tariffs, on products, raw materials and components we import into the U.S.; • catastrophic events such as natural disasters, including those resulting from earthquakes, wildfires and floods, war, terrorism, public health emergencies such as pandemics; • adverse weather conditions impacting our sales and timing of sales; • interruption of our production capability at one or more of our manufacturing facilities from accident, fire, calamity or other causes or events affecting the global economy; • adverse economic conditions and the related impact on consumer spending and demand for our products; 13 Table of Contents • our ability to keep pace with and integrate into our operations rapidly evolving technological developments and standards, such as artificial intelligence; • compliance with new and existing government regulations; • declining home ownership rates adversely affecting demand for our products; • delays in, or systems disruptions issues caused by, the implementation of our enterprise resource planning system; • our reliance on global third-party suppliers and related impact on price, quality and quantity of raw materials; • competition that we face; • our ability to generate sufficient cash flow to satisfy our debt service obligations; • product quality issues, warranty claims, installation or safety concerns and other claims, including those due to the failure of builders to follow our product installation instructions and specifications and our installation of autocovers; • our ability to realize the anticipated growth opportunities and cost synergies from acquisitions; • our ability to attract, develop and retain highly qualified personnel; • pricing pressures resulting from industry consolidation; • our ability to collect accounts receivables from our customers; • our ability to obtain, maintain and enforce intellectual property protection for our current and future products, and third-party claims against us for violation of their intellectual property; • the risks of doing business internationally; • possible impairments to our goodwill, other intangible assets or fixed assets; and • the other factors set forth under “Risk Factors.” Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business, financial condition, results of operations and cash flows.
These provisions include: ● providing that our Board will be divided into three classes, with each class of directors serving staggered three-year terms; ● providing for the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 2/3% in voting power of all the then-outstanding shares of stock of the Company entitled to vote thereon, voting together as a single class, if less than a majority of the voting power of our outstanding common stock is beneficially owned by our Principal Stockholders; ● empowering only the Board to fill any vacancy on our Board (other than in respect of our Principal Stockholders’ directors (as defined below)), whether such vacancy occurs as a result of an increase in the number of directors or otherwise, if less than a majority of the voting power of our outstanding common stock is beneficially owned by our Principal Stockholders; ● authorizing the issuance of “blank check” preferred stock without any need for action by stockholders; 32 Table of Contents ● prohibiting stockholders from acting by written consent if less than a majority of the voting power of our outstanding common stock is beneficially owned by our Principal Stockholders; ● to the extent permitted by law, prohibiting stockholders from calling a special meeting of stockholders if less than a majority of the voting power of our outstanding common stock is beneficially owned by our Principal Stockholders; and ● establishing advance notice requirements for nominations for election to our Board or for proposing matters that can be acted on by stockholders at stockholder meetings.
These provisions include: • providing that our Board will be divided into three classes, with each class of directors serving staggered three-year terms; • providing for the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 2/3% in voting power of all the then-outstanding shares of stock of the Company entitled to vote thereon, voting together as a single class, if less than a majority of the voting power of our outstanding common stock is beneficially owned by our Principal Stockholders; • empowering only the Board to fill any vacancy on our Board (other than in respect of our Principal Stockholders’ directors (as defined below)), whether such vacancy occurs as a result of an increase in the number of directors or otherwise, if less than a majority of the voting power of our outstanding common stock is beneficially owned by our Principal Stockholders; • authorizing the issuance of “blank check” preferred stock without any need for action by stockholders; • prohibiting stockholders from acting by written consent if less than a majority of the voting power of our outstanding common stock is beneficially owned by our Principal Stockholders; 29 Table of Contents • to the extent permitted by law, prohibiting stockholders from calling a special meeting of stockholders if less than a majority of the voting power of our outstanding common stock is beneficially owned by our Principal Stockholders; and • establishing advance notice requirements for nominations for election to our Board or for proposing matters that can be acted on by stockholders at stockholder meetings.
Any strategic transactions that we may pursue may involve a number of risks, including but not limited to some or all of the following: (i) difficulty in identifying acceptable acquisition candidates; (ii) the inability to consummate acquisitions or strategic transactions on favorable terms and to obtain adequate financing, which financing may not be available to us at times, in amounts or on terms acceptable to us, if at all; (iii) the diversion of management’s attention from our core businesses; (iv) disruptions to our ongoing business; (v) entry into sectors in which we have limited or no experience; (vi) the inability to integrate our acquisitions or enter into strategic transactions without substantial costs, delays or other problems; (vii) unexpected liabilities for which we may not be adequately indemnified; (viii) inability to enforce indemnification and non-compete agreement; (ix) failing to successfully incorporate acquired product lines or brands into our business; (x) the failure of the acquired business or strategic transaction to perform as well as anticipated; (xi) the failure to realize expected synergies and cost savings; (xii) the loss of key employees or customers of the acquired business; (xiii) increasing demands on our operational systems and the potential inability to implement adequate internal controls covering an acquired business; (xiv) any requirement that we make divestitures of operations or property in order to comply with applicable antitrust laws; (xv) possible adverse effects on our reported operating results, particularly during the first several reporting periods after the acquisition is completed; and (xvii) impairment of goodwill relating to an acquired business, which could reduce reported income.
Any strategic transactions that we may pursue may involve a number of risks, including but not limited to some or all of the following: (i) difficulty in identifying acceptable acquisition candidates; (ii) the inability to consummate acquisitions or strategic transactions on favorable terms and to obtain adequate financing, which financing may not be available to us at times, in amounts or on terms acceptable to us, if at all; (iii) the diversion of management’s attention from our core businesses; (iv) disruptions to our ongoing business; (v) entry into sectors in which we have limited or no experience; (vi) the inability to integrate our acquisitions or enter into strategic transactions without substantial costs, 21 Table of Contents delays or other problems; (vii) unexpected liabilities for which we may not be adequately indemnified; (viii) inability to enforce indemnification and non-compete agreement; (ix) failing to successfully incorporate acquired product lines or brands into our business; (x) the failure of the acquired business or strategic transaction to perform as well as anticipated; (xi) the failure to realize expected synergies and cost savings; (xii) the loss of key employees or customers of the acquired business; (xiii) increasing demands on our operational systems and the potential inability to implement adequate internal controls covering an acquired business; (xiv) any requirement that we make divestitures of operations or property in order to comply with applicable antitrust laws; (xv) possible adverse effects on our reported operating results, particularly during the first several reporting periods after the acquisition is completed; and (xvii) impairment of goodwill relating to an acquired business, which could reduce reported income.
Advances in computer and software capabilities, encryption technology and other discoveries such as generative AI increase the complexity of our technological environment, including how each interact with our various software platforms.
Advances in computer and software capabilities, encryption technology and other discoveries such as generative and agentic AI increase the complexity of our technological environment, including how each interact with our various software platforms.
Specifically, our level of indebtedness could have important consequences, including: ● limiting our ability to obtain additional financing to fund capital expenditures, investments, acquisitions or other general corporate requirements; ● requiring a substantial portion of our cash flow to be dedicated to payments to service our indebtedness instead of other purposes, thereby reducing the amount of cash flow available for capital expenditures, investments, acquisitions and other general corporate purposes; ● increasing our vulnerability to and the potential impact of adverse changes in general economic, industry and competitive conditions; ● limiting our flexibility in planning for and reacting to changes in the industry in which we compete; ● placing us at a disadvantage compared to other, less leveraged competitors or competitors with comparable debt at more favorable interest rates; and ● increasing our costs of borrowing.
Specifically, our level of indebtedness could have important consequences, including: 26 Table of Contents • limiting our ability to obtain additional financing to fund capital expenditures, investments, acquisitions or other general corporate requirements; • requiring a substantial portion of our cash flow to be dedicated to payments to service our indebtedness instead of other purposes, thereby reducing the amount of cash flow available for capital expenditures, investments, acquisitions and other general corporate purposes; • increasing our vulnerability to and the potential impact of adverse changes in general economic, industry and competitive conditions; • limiting our flexibility in planning for and reacting to changes in the industry in which we compete; • placing us at a disadvantage compared to other, less leveraged competitors or competitors with comparable debt at more favorable interest rates; and • increasing our costs of borrowing.
Any of these events, especially in our peak selling season, could have a material adverse effect on our business and results of operations. 24 Table of Contents Our business operations could suffer if we fail to protect adequately our intellectual property rights, and we may experience claims by third parties that we are violating their intellectual property rights.
Any of these events, especially in our peak selling season, could have a material adverse effect on our business and results of operations. 23 Table of Contents Our business operations could suffer if we fail to protect adequately our intellectual property rights, and we may experience claims by third parties that we are violating their intellectual property rights.
The United States, Canada, Australia, New Zealand, the European Union, the United Kingdom and other countries in which we operate are increasingly adopting or revising privacy, information security and data protection laws and regulations that could have a significant impact on our current and planned privacy, data protection and information security-related practices, our collection, use, sharing, retention and safeguarding of customer, consumer and/or employee information, as well as any other third-party information we receive, and some of our current or planned business activities.
The United States, Canada, Australia, New Zealand, the European Union, the United Kingdom and other countries in which we operate are increasingly adopting or revising privacy, information security and data protection laws and regulations that could have a significant impact on our current and planned privacy, data protection and information security-related practices, our 25 Table of Contents collection, use, sharing, retention and safeguarding of customer, consumer and/or employee information, as well as any other third-party information we receive, and some of our current or planned business activities.
Our operations and financial results have been, and may be in the future, adversely impacted by local, regional, national or global catastrophic events or extraordinary circumstances, such as: natural or environmental disasters; weather events driven by climate change or other factors; public health emergencies, epidemics or pandemics; other serious disruption to our facilities due to fire, flood, hurricane, earthquake, war, acts of terrorism, civil insurrection or social unrest; political uncertainty; and regional or global conflicts, including the conflicts in the Middle East and Ukraine.
Our operations and financial results have been, and may be in the future, adversely impacted by local, regional, national or global catastrophic events or extraordinary circumstances, such as: natural or environmental disasters; weather events; public health emergencies, epidemics or pandemics; other serious disruption to our facilities due to fire, flood, hurricane, earthquake, war, acts of terrorism, civil insurrection or social unrest; political uncertainty; and regional or global conflicts, including the conflicts in the Middle East and Ukraine.
Moreover, ownership of our shares by affiliates of our Principal Stockholders may also adversely affect the trading price for our common stock to the extent investors perceive disadvantages in owning shares of a company with a controlling shareholder.
Moreover, ownership of our shares by affiliates of our Principal Stockholders may also adversely affect the trading price for our common stock to the extent investors perceive disadvantages in owning shares of a company with a large shareholder.
These potential conflicts of interest could have a material adverse effect on our business, financial condition, results of operations, or prospects if attractive corporate opportunities are allocated by one 33 Table of Contents of our Principal Stockholders to itself or its affiliated funds, the portfolio companies owned by such funds or any affiliates of a Principal Stockholder instead of to us.
These potential conflicts of interest could have a material adverse effect on our business, financial condition, results of operations, or prospects if attractive corporate opportunities are allocated by one of our Principal Stockholders to itself or its affiliated funds, the portfolio companies owned by such funds or any affiliates of a Principal Stockholder instead of to us.
In addition, cybersecurity threats may cause us to incur significant remediation costs, result in delays and disruptions to key business operations, damage business relationships or our reputation or divert attention of management and key information technology resources. With some employees working remotely, there may be increased opportunities for unauthorized access and cybersecurity threats.
In addition, cybersecurity threats may cause us to incur significant remediation costs, result in delays and disruptions to key business operations, damage business relationships or our reputation or divert attention of management 14 Table of Contents and key information technology resources. With some employees working remotely, there may be increased opportunities for unauthorized access and cybersecurity threats.
Department of The Treasury’s Office of Foreign Assets Control; ● tariffs and other import/export trade restrictions; ● currency fluctuations; ● limitations on our ability to enforce legal rights and remedies with third parties or partners outside the United States; ● foreign investment and cash repatriation regulations; ● adverse tax consequences; and ● dependence on other economies.
Department of The Treasury’s Office of Foreign Assets Control; 24 Table of Contents • tariffs and other import/export trade restrictions; • currency fluctuations; • limitations on our ability to enforce legal rights and remedies with third parties or partners outside the United States; • foreign investment and cash repatriation regulations; • adverse tax consequences; and • dependence on other economies.
As with most companies, we have experienced cybersecurity threats, attempts to breach our systems and other similar incidents, none of which were material to our operations or financial results in 2024.
As with most companies, we have experienced cybersecurity threats, attempts to breach our systems and other similar incidents, none of which were material to our operations or financial results in 2025.
For example, in 2024, we continued the roll-out of Measure, a proprietary advanced AI-powered device that significantly reduces dealer time and error in measuring swimming pool safety covers.
For example, in 2025, we continued the roll-out of Measure, a proprietary advanced AI-powered device that significantly reduces dealer time and error in measuring swimming pool safety covers.
In particular, we believe that the availability of credit is an important factor enabling the purchase of new pools because a significant percentage of consumers finance their pool installations. The recent and continued combination of high interest rates and high inflation have reduced the affordability of mortgages and increased the cost of home improvement projects.
In particular, we believe that the availability of credit is an important factor enabling the purchase of new pools because a significant percentage of consumers finance their pool installations. The continued combination of higher interest rates and inflation have reduced the affordability of mortgages and increased the cost of home improvement projects.
However, if factors exist that could indicate an impairment in the future, including a sustained decrease in our stock price, we may be required to record impairment charges in future periods. 28 Table of Contents Risks Related to Our Indebtedness Our substantial indebtedness could adversely affect our financial condition. We have a significant amount of indebtedness.
However, if factors exist that could indicate an impairment in the future, including a sustained decrease in our stock price, we may be required to record impairment charges in future periods. Risks Related to Our Indebtedness Our substantial indebtedness could adversely affect our financial condition. We have a significant amount of indebtedness.
We rely on information technology systems to support our business operations. A significant disturbance or breach of our technological infrastructure could adversely affect our business, financial condition and results of operations. Additionally, failure to maintain the security of confidential information could damage our reputation and expose us to litigation.
Risks Related to Our Operations and Industry We rely on information technology systems to support our business operations. A significant disturbance or breach of our technological infrastructure could adversely affect our business, financial condition and results of operations. Additionally, failure to maintain the security of confidential information could damage our reputation and expose us to litigation.
Our ability to collect accounts receivables from our customers may adversely impact our cash flows and our ability to reduce our debt. We extend credit to our customers (dealers in one-step distribution channel or distributor in two-step distribution channel), and we generally do not require collateral to secure these extensions of credit.
Our ability to collect accounts receivables from our customers may adversely impact our cash flows and our ability to reduce our debt. 22 Table of Contents We extend credit to our customers (dealers in one-step distribution channel or distributor in two-step distribution channel), and we generally do not require collateral to secure these extensions of credit.
Even if we are successful in integrating acquired businesses, these integrations may not result in the realization of the full benefit of any anticipated growth opportunities or cost synergies or we may not realize these benefits within 27 Table of Contents the expected time frames, which could result in an impairment of acquired assets.
Even if we are successful in integrating acquired businesses, these integrations may not result in the realization of the full benefit of any anticipated growth opportunities or cost synergies or we may not realize these benefits within the expected time frames, which could result in an impairment of acquired assets.
In the event that these service providers do not appropriately protect our data, the result could be a security breach or loss of our data. Any such loss of data by our third-party service providers could have a 19 Table of Contents material adverse impact on our business and results of operations.
In the event that these service providers do not appropriately protect our data, the result could be a security breach or loss of our data. Any such loss of data by our third-party service providers could have a material adverse impact on our business and results of operations.
If a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition, and results of operations. ​ Item 1B.
If a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition, and results of operations. Item 1B. Unresolved Staff Comments None
We sell all of our products to key channel partners, dealers and distributors, who resell the products to consumers and other dealers, respectively. Some of our customers also sell our competitors’ products. The customers’ 20 Table of Contents success in reselling our products to consumers is a key driver of our net sales.
We sell all of our products to key channel partners, dealers and distributors, who resell the products to consumers and other dealers, respectively. Some of our customers also sell our competitors’ products. The customers’ success in reselling our products to consumers is a key driver of our net sales.
Given the seasonality inherent in our business, the impact of such events or circumstances on our business would be particularly severe if the timing coincides with the peak months of swimming pool use and pool installation and maintenance.
Given the 16 Table of Contents seasonality inherent in our business, the impact of such events or circumstances on our business would be particularly severe if the timing coincides with the peak months of swimming pool use and pool installation and maintenance.
We do not anticipate paying quarterly cash dividends, and accordingly, stockholders must rely on stock appreciation for any return on their investment. We do not currently anticipate declaring quarterly cash dividends to holders of our common stock.
We do not anticipate paying quarterly cash dividends, and accordingly, stockholders must rely on stock appreciation for any return on their investment. 30 Table of Contents We do not currently anticipate declaring quarterly cash dividends to holders of our common stock.
Moreover, compliance with such laws and regulations in the future could prove to be costly. Although we presently do not expect to incur any capital or other expenditures relating to regulatory 23 Table of Contents matters in amounts that may be material to us, we may be required to make such expenditures in the future.
Moreover, compliance with such laws and regulations in the future could prove to be costly. Although we presently do not expect to incur any capital or other expenditures relating to regulatory matters in amounts that may be material to us, we may be required to make such expenditures in the future.
Any write-down would have a negative effect on our consolidated financial statements and may be material. Based on the results of the assessment performed for our one reporting unit, we determined that goodwill was not impaired at September 29, 2024.
Any write-down would have a negative effect on our consolidated financial statements and may be material. Based on the results of the assessment performed for our one reporting unit, we determined that goodwill was not impaired at September 28, 2025.
Our international operations, which accounted for 15.6% of our net sales in 2024 and a significant portion of our purchased supplies, expose us to certain additional risks, including: ● difficulty in staffing international subsidiary operations and increased costs of managing international operations; ● different political, economic, and regulatory conditions; 25 Table of Contents ● local laws and customs and enforcement thereof; ● violations of anti-bribery and anti-corruption laws, such as the United States Foreign Corrupt Practices Act; ● violations of economic sanctions laws, such as the regulations enforced by the U.S.
Our international operations, which accounted for 15.4% of our net sales in 2025 and a significant portion of our purchased supplies, expose us to certain additional risks, including: • difficulty in staffing international subsidiary operations and increased costs of managing international operations; • different political, economic, and regulatory conditions; • local laws and customs and enforcement thereof; • violations of anti-bribery and anti-corruption laws, such as the United States Foreign Corrupt Practices Act; • violations of economic sanctions laws, such as the regulations enforced by the U.S.
In particular, we rely on a technically skilled workforce to operate the specialized equipment required to manufacture 22 Table of Contents fiberglass pools, panels, liners and pool covers in a challenging production environment that may not appeal to many potential workers.
In particular, we rely on a technically skilled workforce to operate the specialized equipment required to manufacture fiberglass pools, panels, liners and pool covers in a challenging production environment that may not appeal to many potential workers.
Our assets or cash flows may not be sufficient to fully repay borrowings under our outstanding debt instruments if accelerated upon an event of default.
Our assets or cash flows may not be 27 Table of Contents sufficient to fully repay borrowings under our outstanding debt instruments if accelerated upon an event of default.
Product improvements and new product introductions also require significant research, planning, design, development, engineering, and testing at the technological, product, and manufacturing process levels, and we may not be able to timely develop and introduce product improvements or new products.
Product improvements 20 Table of Contents and new product introductions also require significant research, planning, design, development, engineering, and testing at the technological, product, and manufacturing process levels, and we may not be able to timely develop and introduce product improvements or new products.
We strive to comply with all applicable laws, policies, legal obligations, and industry codes of conduct relating to privacy and data 26 Table of Contents protection to the extent possible.
We strive to comply with all applicable laws, policies, legal obligations, and industry codes of conduct relating to privacy and data protection to the extent possible.
Following the acquisition of CoverStar Central in April 2024, we are now directly involved in 21 Table of Contents the installation of autocovers for some homeowners, and we may be subject to direct customer claims based on dissatisfaction with the installation of our autocovers.
Following the acquisition of CoverStar Central in August 2024, we are now directly involved in the installation of autocovers for some homeowners, and we may be subject to direct customer claims based on dissatisfaction with the installation of our autocovers.
As of December 31, 2024, we have $288.1 million face value of indebtedness in the form of the Term Loan outstanding under the Credit Agreement and $75.0 million of availability under the Revolving Credit Facility under the Credit Agreement (each as defined below). Our obligations under the Credit Agreement are secured by substantially all of our and our subsidiaries’ assets.
As of December 31, 2025, we have $279.8 million face value of indebtedness in the form of the Term Loan outstanding under the Credit Agreement and $75.0 million of availability under the Revolving Credit Facility under the Credit Agreement (each as defined below). Our obligations under the Credit Agreement are secured by substantially all of our and our subsidiaries’ assets.
Exposure to various types of cybersecurity threats such as malware, computer viruses, worms or other malicious acts, as well as human error, also could potentially disrupt our operations or result in a significant interruption in the delivery of our goods and services.
Exposure to various types of cybersecurity threats such as malware, phishing, computer viruses, worms, ransomware attacks or other malicious acts, as well as human error, also could potentially disrupt our operations, lead to unauthorized payments or result in a significant interruption in the delivery of our goods and services.
Even in generally favorable economic conditions, severe and/or prolonged downturns in the housing market could have a material adverse impact on our financial performance due to our industry’s alignment with the housing market. Inflation could adversely impact our financial condition and results of operations.
Even in generally favorable economic conditions, severe and/or prolonged downturns in the housing market could have a material adverse impact on our financial performance due to our industry’s alignment with the housing market.
These laws also require us to obtain and maintain certificates, registrations, licenses, permits, and other regulatory approvals in order to conduct regulated activities, including the construction and operation of our facilities. Our products must also comply with local, state, and international building codes and safety rules and regulations. Further, we are subject to anti-corruption, anti-bribery, antitrust and other similar laws.
These laws also require us to obtain and maintain certificates, registrations, licenses, permits, and other regulatory approvals in order to conduct regulated activities, including the construction and operation of our facilities. Our products must also comply with local, state, and international building codes and safety rules and regulations.
So long as our Principal Stockholders continue to directly or indirectly own a significant amount of our equity, even if such amount is less than 50%, our Principal Stockholders will continue to be able to substantially influence or effectively control our ability to enter into corporate transactions.
So long as our Principal Stockholders continue to directly or indirectly own a significant amount of our equity, our Principal Stockholders will continue to be able to substantially influence or effectively control our ability to enter into corporate transactions.
Further, the development, adoption, and uses for generative AI technologies are still in their early stages and ineffective or inadequate AI development or deployment practices by the Company or our third-party vendors could result in unintended consequences, which could impact our future growth and increase our costs and liability risk.
Further, the development, adoption, and uses for generative and agentic AI technologies is rapidly evolving and ineffective or inadequate AI development or deployment practices by the Company or our third-party vendors could result in unintended consequences, which could impact our future growth and increase our costs and liability risk.
Any significant change to applicable laws, regulations or industry practices regarding the use or disclosure of personal information could result in increased compliance costs. Any of the foregoing could materially adversely affect our brand, reputation, business, results of operations, and financial condition.
Any significant change to applicable laws, regulations or industry practices regarding the use or disclosure of personal information could result in increased compliance costs. Any of the foregoing could materially adversely affect our brand, reputation, business, results of operations, and financial condition. Our insurance coverage may be inadequate to protect against the potential hazards inherent to our business.
If we are unable to pass price increases on to our customer base or otherwise mitigate the costs or availability of products and raw materials associated with tariffs and other similar trade policies, our business, financial condition and operating results could be materially adversely affected. 17 Table of Contents Declining home ownership rates could lead to reduced demand for our products and adversely affect our business, financial condition and results of operations.
If we are unable to pass price increases on to our customer base or otherwise mitigate the costs or availability of products and raw materials associated with tariffs and other similar trade policies, our business, financial condition and operating results could be materially adversely affected.
In addition, the stock markets, and the market for growth stocks in particular, have from time to time experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors may significantly affect the market price of our common stock, regardless of our actual operating performance.
In addition, the stock markets, and the market for growth stocks in particular, have from time to time experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies.
These risks are heightened with respect to our largest customer, which accounted for 21.0% of our net sales in 2024, and our top ten dealers and distributors, which accounted for 42.8% of our net sales in 2024.
These risks are heightened with respect to our largest customer, which accounted for 22.6% of our net sales in 2025, and our top ten dealers and distributors, which accounted for 49.0% of our net sales in 2025.
The nature of our business subjects us to compliance with employment, environmental, health, transportation, safety, anti-corruption, trade, and other governmental regulations. We are subject to regulation under federal, state, local and international employment, environmental, health, transportation, and safety requirements, which govern such things as the manufacture of fiberglass pools, which is our key product.
We are subject to regulation under federal, state, local and international employment, environmental, health, transportation, and safety requirements, which govern such things as the manufacture of fiberglass pools, which is our key product.
We had approximately $152.6 million of goodwill and $292.9 million of intangible assets, net on our consolidated balance sheet as of December 31, 2024, which represented 19.2% and 36.9% of our total assets, respectively, as of such date.
We had approximately $155.2 million of goodwill and $268.1 million of intangible assets, net on our consolidated balance sheet as of December 31, 2025, which represented 18.9% and 32.6% of our total assets, respectively, as of such date.
You may not realize any return on your investment in us and may lose some or all of your investment. Our Principal Stockholders continue to have significant influence over us, including control over decisions that require the approval of stockholders, which could limit your ability to influence the outcome of matters submitted to stockholders for a vote.
Our Principal Stockholders continue to have significant influence over us, including control over decisions that require the approval of stockholders, which could limit your ability to influence the outcome of matters submitted to stockholders for a vote.
Natural disasters, including resulting from climate change, geopolitical events, war, terrorism, public health emergencies, or other catastrophic events could adversely affect our business. financial condition and results of operations.
Catastrophic events, including earthquakes, wildfires, floods, war, terrorism, public health emergencies, or other such events could adversely affect our business. financial condition and results of operations.
Further, increased energy or compliance costs and expenses as a result thereof may cause disruptions in, or an increase in the costs associated with, the manufacturing and distribution of our products.
Further, increased energy or compliance costs and expenses as a result thereof may cause disruptions in, or an increase in the costs associated with, the manufacturing and distribution of our products. Delays in, or systems disruptions issues caused by, the implementation of our new enterprise resource planning system could adversely affect our operations and results of operations.
In economic downturns such as we experienced in 2023 and 2024, and which is expected to continue into 2025, the demand for swimming pools and related products has declined and we expect that such demand will be constrained in the future until we see a recovery in discretionary consumer spending among pool eligible households.
In economic downturns such as we experienced in 2024 and 2025, and which is expected to continue into 2026, the demand for swimming pools and related products has declined and we expect that such demand will be constrained in the future until we see a recovery in discretionary consumer spending among pool eligible households. 17 Table of Contents Any substantial deterioration in general economic conditions that diminishes consumer confidence or discretionary income, or consumer access to credit, may reduce our sales and materially adversely affect our business, financial condition, and results of operations.
It is also possible that the AI tools we use may negatively affect our reputation, disrupt our operations, or have a material adverse impact on our business, financial condition, and results of operations. Delays in, or systems disruptions issues caused by, the implementation of our new enterprise resource planning system could adversely affect our operations and results of operations.
It is also possible that the AI tools we use may negatively affect our reputation, disrupt our operations, or have a material adverse impact on our business, financial condition, and results of operations. Declining home ownership rates could lead to reduced demand for our products and adversely affect our business, financial condition and results of operations.
The aggregate principal amount of our debt that we may issue may be significant; see “Risks Related to Our Indebtedness” for additional information on the risks of increased leverage. Our insurance coverage may be inadequate to protect against the potential hazards inherent to our business.
The aggregate principal amount of our debt that we may issue may be significant; see “Risks Related to Our Indebtedness” for additional information on the risks of increased leverage. We depend on our ability to attract, develop, and retain highly qualified personnel.
To the extent we are unable to recover higher operating costs resulting from inflation or otherwise mitigate the impact of such costs on our business, our net sales and gross margins could decrease, and our financial condition and results of operations could be adversely affected. ​ 16 Table of Contents We depend on a global network of third-party suppliers to provide components and raw materials essential to the manufacturing of our pools and price increases or deviations in the quantity or quality of the raw materials used to manufacture our products could adversely affect our net sales and operating results.
To the extent we are unable to recover higher operating costs resulting from inflation or otherwise mitigate the impact of such costs on our business, our net sales and gross margins could decrease, and our financial condition and results of operations could be adversely affected.
We procure certain raw materials and components we use in the manufacturing of our products directly or indirectly from outside of the U.S. We also import finished products into the U.S. from our Canadian production facility in Kingston, Ontario.
We also import finished products into the U.S. from our Canadian production facility in Kingston, Ontario.
If interest rates increase, our debt service obligations on our variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease. 30 Table of Contents Risks Related to Ownership of Our Common Stock Our stock price has been volatile, and you may not be able to resell our common stock at or above the price you paid.
If interest rates increase, our debt service obligations on our variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease.
If we are unable to refinance any of our indebtedness on commercially reasonable terms or at all or to effect any other action relating to our indebtedness on satisfactory terms or at all, our business may be harmed. 29 Table of Contents Our Credit Agreement has restrictive terms and our failure to comply with any of these terms could put us in default, which would have an adverse effect on our business and prospects.
If we are unable to refinance any of our indebtedness on commercially reasonable terms or at all or to effect any other action relating to our indebtedness on satisfactory terms or at all, our business may be harmed.
Unless and until we repay all outstanding borrowings under our Credit Agreement we will remain subject to the restrictive terms of these borrowings.
Our Credit Agreement has restrictive terms and our failure to comply with any of these terms could put us in default, which would have an adverse effect on our business and prospects. Unless and until we repay all outstanding borrowings under our Credit Agreement we will remain subject to the restrictive terms of these borrowings.
There have recently been a number of tariffs and retaliatory tariffs announced by the U.S. and other countries that would impact certain of our raw materials and finished products, the implementation, size and timing of which remain uncertain and rapidly evolving.
The variability and complexity of tariffs and duties exposes us to the risk of higher costs and inadvertent noncompliance associated with our imported products. Tariffs and retaliatory tariffs announced by the U.S. and other countries could impact the cost of certain of our raw materials and finished products, the implementation, size and timing of which remain uncertain and rapidly evolving.
The implementation may also cause complications to ongoing operations, result in material weaknesses to our internal control framework, increase regulatory compliance risks, and impact our ability to process transactions efficiently, all of which may have a material adverse effect on our business and results of operations. We depend on our ability to attract, develop, and retain highly qualified personnel.
The implementation may also cause complications to ongoing operations, result in material weaknesses to our internal control framework, increase regulatory compliance risks, and impact our ability to process transactions efficiently, all of which may have a material adverse effect on our business and results of operations. 19 Table of Contents We depend on a global network of third-party suppliers to provide components and raw materials essential to the manufacturing of our pools and price increases or deviations in the quantity or quality of the raw materials used to manufacture our products could adversely affect our net sales and operating results.
The foregoing risks are heightened with respect to our largest supplier, which accounted for 13% of our purchased supplies in 2024, and our top ten suppliers, which accounted for 64% of our purchased supplies in 2024. Changes in trade policies, including the imposition of or increase in tariffs, could negatively impact our business, financial condition, and results of operations.
The foregoing risks are heightened with respect to our largest supplier, which accounted for 12% of our purchased supplies in 2025, and our top ten suppliers, which accounted for 60% of our purchased supplies in 2025.
Any such event could disrupt our supply chain, our ability to manufacture and deliver our products, and our dealers’ and distributors’ ability to install our products, as well as adversely impact customer demand for our products. 18 Table of Contents For example, the conflict in the Middle East could disrupt our ability to deliver product to customers in Israel resulting in delayed or lost sales.
Any such event could disrupt our supply chain, our ability to manufacture and deliver our products, and our dealers’ and distributors’ ability to install our products, as well as adversely impact customer demand for our products. Further, such events could also adversely impact consumer discretionary spending, and resulting in a macroeconomic downturn and disruption in the financial markets.
In addition, Pamplona has certain Board nomination rights that may enable it to exercise substantial control over all corporate actions.
Affiliates of our Principal Stockholders together own approximately 60.2% of the outstanding shares of our common stock as of February 16, 2026. In addition, Pamplona has certain Board nomination rights that may enable it to exercise substantial influence over all corporate actions.
Even in generally favorable economic conditions, severe and/or prolonged downturns affecting the U.S. housing market could have a similar material adverse impact on our financial performance. We face competition both from within our industry and from other outdoor living products and if we are not able to compete effectively, our prospects for future success will be jeopardized.
We face competition both from within our industry and from other outdoor living products and if we are not able to compete effectively, our prospects for future success will be jeopardized. Within our industry, we directly compete against various international, regional and local pool manufacturing companies.
Our stock price has been highly volatile in recent years.
Risks Related to Ownership of Our Common Stock Our stock price has been volatile, and you may not be able to resell our common stock at or above the price you paid. Our stock price has been highly volatile in recent years.
Removed
Any substantial deterioration in general economic conditions that diminishes consumer confidence or discretionary income, or consumer access to credit, may reduce our sales and materially adversely affect our business, financial condition, and results of operations.
Added
Global political uncertainty and financial market volatility caused by political instability, changes in international trade relationships and conflicts could make it more difficult for us to access financing and could adversely affect our business and operations.
Removed
While inflation in the United States began to plateau or subside in 2024, higher costs of labor and services, and could continue to cause costs to increase as well as scarcity of certain products and there are indications that recent deflation in raw material costs may reverse.
Added
Political uncertainty, an increase in trade protectionism or geopolitical conflict could have a material adverse effect on global macroeconomic activities and trade and adversely affect our business, results of operations and financial condition. The rise of economic nationalist sentiments, trade protectionism and geopolitical security has led to increasing political uncertainty and unpredictability throughout the world.
Removed
The variability and complexity of tariffs and duties exposes us to the risk of higher costs and inadvertent noncompliance associated with our imported products.
Added
Additionally, there can be no assurance that additional or new trade tensions, imposition of import and export restrictions and tariffs will not arise between various trade partners.
Removed
Within our industry, we directly compete against various international, regional and local pool manufacturing companies.
Added
These potential developments, market perceptions concerning these and related issues and the attendant regulatory uncertainty regarding, for example, the posture of governments with respect to international trade or national security issues, could have a material adverse effect on global trade and economic growth which, in turn, can adversely affect our business, results of operation and financial condition. 15 Table of Contents Increased trade protectionism or the perception that it may occur could materially adversely affect our business.
Removed
Further, such events could also adversely impact consumer discretionary spending, causing geopolitical uncertainty, and resulting in a macroeconomic downturn and disruption in the financial markets.
Added
Increasing trade protectionism may cause an increase in the cost of products exported from regions globally, the length of time required to transport products, and the risks associated with exporting products. Such increases may have an adverse impact on our business, operating schedule and financial condition.
Removed
For example, as a result of the hurricanes that impacted the west coast of Florida and other areas of the southeastern U.S. in the second half of 2024, we experienced a temporary decline in demand for our products and prospective customers were focused on recovering from the damage caused by the storms to their homes.
Added
If the current global economy or outlook is undermined by downside risks and there is a prolonged economic downturn, governments may resort to new or enhanced trade barriers to protect their domestic industries against imports, thereby depressing demand.
Removed
Affiliates of our Principal Stockholders together own approximately 57.7% of the outstanding shares of our common stock as of February 28, 2025.
Added
Protectionist developments or adverse international political tensions or developments, or the perception they may occur, may have a material adverse effect on global economic conditions, and may significantly reduce global trade. Increasing trade protectionism in the markets could increase the risks associated with exporting goods to such markets.
Removed
As long as affiliates of our Principal Stockholders own or control a majority of our outstanding voting power, our Principal Stockholders and their affiliates have the ability to exercise substantial 31 Table of Contents control over all corporate actions requiring stockholder approval, irrespective of how our other stockholders may vote, including: ● the election and removal of directors and the size of our Board; ● any amendment of our articles of incorporation or bylaws; or ● the approval of mergers and other significant corporate transactions, including a sale of substantially all of our assets.
Added
These developments could have a material adverse effect on our business, results of operations and financial condition. Inflation could adversely impact our financial condition and results of operations. Higher costs of labor, goods and services, and could continue to cause costs to increase as well as scarcity of certain products.
Removed
Unresolved Staff Comments None ​ ​ 34 Table of Contents
Added
Changes in trade policies, including the imposition of or increase in tariffs, could negatively impact our business, financial condition, and results of operations. We procure certain raw materials and components we use in the manufacturing of our products directly or indirectly from outside of the U.S.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs with most companies, we have experienced cyber-attacks, attempts to breach our systems and other similar incidents. However, risks from cybersecurity threats, including from prior cyber incidents, have not materially affected in 2024, and are not reasonably likely to materially affect in 2025 , our Company, including our business strategy, results of operations or financial condition.
Biggest changeWe expect such incidents to continue as cyber criminals use increasingly sophisticated methods to seek to infiltrate company information technology systems. Risks from cybersecurity threats, including from prior cyber incidents, have not materially affected our Company in 2025, including our business strategy, results of operations or financial condition.
Our risk mitigation steps include engagements with third-party service providers with expertise in cybersecurity that assist us in assessing risk, including vulnerability assessments and penetration testing, and the implementation of risk mitigation measures.
Our risk mitigation steps include engagements with third-party service providers with expertise in cybersecurity that assist us in assessing risk, including vulnerability assessments and penetration testing, and the implementation of risk mitigation 31 Table of Contents measures.
Item 1C. Cybersecurity Information technology supports several aspects of our business, including product ordering and fulfillment, pricing, customer service, transaction processing, financial reporting, collections, and cost management. Further, our business operations rely on the secure collection, storage, transmission, and other processing of proprietary, confidential, and sensitive data of the Company and third parties.
Item 1C. Cybersecurity Information technology supports a number of our business processes, including product ordering and fulfillment, pricing, customer service, transaction processing, financial reporting, collections, and cost management. Further, our business operations rely on the secure collection, storage, transmission, and other processing of proprietary, confidential, and sensitive data of the Company and third parties.
Our executive leadership team , which includes our Chief Executive Officer and CIO/CISO, manages the Company’s efforts to address cybersecurity threats by receiving weekly reports from our CIO/CISO on potential threats, mitigation steps, the sufficiency of cybersecurity resources (including personnel, third party resources, hardware and software), and employee training and communications.
Our management team and Board conduct simulation exercises to test our level of preparedness to respond to potential cybersecurity threats. 32 Table of Contents Our executive leadership team, which includes our Chief Executive Officer and CIO/CISO, manages the Company’s efforts to address cybersecurity threats by receiving weekly reports from our CIO/CISO on potential threats, mitigation steps, the sufficiency of cybersecurity resources (including personnel, third party resources, hardware and software), and employee training and communications.
We have implemented and maintain various technical, physical, and organizational measures, processes, standards, and/or policies designed to manage and mitigate material risks from cybersecurity threats to our information systems and data.
Risk Management and Strategy We have prioritized cybersecurity risks and made investments of time and resources to mitigate this risk area. We have implemented and maintain various technical, physical, and organizational measures, processes, standards, and/or policies designed to manage and mitigate material risks from cybersecurity threats to our information systems and data.
Additionally, failure to maintain the security of confidential information could damage our reputation and expose us to litigation,” for additional discussion about cybersecurity-related risks. 35 Table of Contents Governance Oversight Our Board oversees the Company’s cybersecurity program by receiving quarterly reports (or more often, if necessary) from our Chief Executive Officer and our combined Chief Information Officer and Chief Information Security Officer (our “CIO/CISO”) on potential threats (including emerging risks) and any incidents, and the measures we have taken to prevent and to mitigate the impact of cyber-attacks on our systems.
Governance Oversight Our Board oversees the Company’s cybersecurity program by receiving regular reports (or more often, if necessary) from our Chief Executive Officer and our combined Chief Information Officer and Chief Information Security Officer (our “CIO/CISO”) on potential threats (including emerging risks) and any incidents, and the measures we have taken to prevent and to mitigate the impact of cyber-attacks on our systems.
We maintain a managed detection and response system and a security operations center that operates 24 hours per day, seven days per week.
Further, we test employee knowledge of our cybersecurity policies through threat simulations throughout the year. We maintain a managed detection and response system and a security operations center that operates 24 hours per day, seven days per week.
Risk Management and Strategy We assess, identify and manage the material risks associated with cybersecurity threats as part of our annual enterprise risk management (“ERM”) program addressing our strategic, operational, compliance and financial risks across the organization. Our ERM program incorporates feedback from senior management, certain functional leaders and third-party service providers.
We also assess, identify and manage the material risks associated with cybersecurity threats at the enterprise level as part of our enterprise risk management ("ERM") program addressing our strategic, operational, compliance and financial risks across the organization. As with most companies, we have experienced cyber-attacks, attempts to breach our systems and other similar incidents.
A significant disturbance or breach of our technological infrastructure could adversely affect our business, financial condition and results of operations.
A significant disturbance or breach of our technological infrastructure could adversely affect our business, financial condition and results of operations. Additionally, failure to maintain the security of confidential information could damage our reputation and expose us to litigation,” for additional discussion about cybersecurity-related risks.
Removed
Each identified high-level risk is assigned to a member of senior management as the risk owner for oversight, with the risk owner developing a risk mitigation plan that is tracked to completion. We have prioritized cybersecurity risks and made investments of time and resources in recent years to mitigate this risk area.
Added
As part of our cybersecurity program, we conduct mandatory training for employees on how to recognize potential cyber threats and we have communicated reporting procedures for employees to bring any such threats to the immediate attention of our IT security team. New hires and employees who join our Company as the result of acquisitions must complete this required training.
Added
Further, as we integrate acquired organizations and their information technology systems, we assess potential vulnerabilities to cybersecurity threats and make the investments necessary to mitigate such vulnerabilities. As part of our integration process, we apply the same technical, physical and organizational measures, processes, standards and/or policies to the acquired organizations.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe have a coast to coast network of nine fiberglass plants across continental North America and an additional three fiberglass plants in Australia and New Zealand. We lease most of these properties and/or own a portion of these properties. We believe our facilities are adequate and suitable for our current need s. ​
Biggest changeWe have a coast to coast network of nine fiberglass plants across continental North America and an additional three fiberglass plants in Australia and New Zealand. We lease most of these properties and/or own a portion of these properties. We believe our facilities are adequate and suitable for our current needs.
Item 2. Properties As of December 31, 2024, we have around 30 locations across the United States, Canada, New Zealand and Australia, which are primarily for manufacturing, warehouse, storage and office space. Our headquarters is located in Latham, New York.
Item 2. Properties As of December 31, 2025, we have approximately 30 locations across the United States, Canada, New Zealand and Australia, which are primarily for manufacturing, warehouse, storage and office space. Our headquarters is located in Latham, New York.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings From time to time, we may be involved in legal proceedings in the ordinary course of business, including, among others, contract and employment claims, personal injury claims, intellectual property claims, product liability claims and warranty claims.
Biggest changeItem 3. Legal Proceedings From time to time, we may be involved in legal proceedings in the ordinary course of business, including, among others, contract and employment claims, personal injury claims, intellectual property claims, product liability claims and warranty claims, some of which may be covered by insurance.
Currently, there are no legal proceedings against us that we believe will have a material adverse effect on our business, financial condition, results of operations or cash flows. Further, no material legal proceedings were terminated, settled, or otherwise resolved during the fourth quarter of the year ended December 31, 2024.
Currently, there are no legal proceedings against us that we believe will have a material adverse effect on our business, financial condition, results of operations or cash flows. Further, no material legal proceedings were terminated, settled, or otherwise resolved during the fourth quarter of the year ended December 31, 2025.
However, the results of any current or future legal proceedings cannot be predicted with certainty and, regardless of the outcome, we may incur significant costs and experience a diversion of management resources as a result of legal proceedings. ​ Item 4. Mine Safety Disclosures Not applicable. 36 Table of Contents Part II
However, the results of any current or future legal proceedings cannot be predicted with certainty and, regardless of the outcome, we may incur significant costs and experience a diversion of management resources as a result of legal proceedings. Item 4. Mine Safety Disclosures Not applicable. 33 Table of Contents Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe did not pay any dividends during the period reflected in the graph. 37 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4/23/2021 ​ 12/31/2021 ​ 12/31/2022 ​ 12/31/2023 ​ 12/31/2024 Latham Group, Inc. ​ $ 100.00 ​ $ 91.85 ​ $ 11.82 ​ $ 9.65 ​ $ 25.54 Russell 2000 ​ $ 100.00 ​ $ 99.56 ​ $ 79.21 ​ $ 92.62 ​ $ 103.31 S&P SmallCap 600 Consumer Discretionary Index ​ $ 100.00 ​ $ 98.11 ​ $ 70.82 ​ $ 73.83 ​ $ 77.79 ​ ​ Item 6.
Biggest changeWe did not pay any dividends during the period reflected in the graph. 34 Table of Contents 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 Latham Group, Inc. $ 91.85 $ 11.82 $ 9.65 $ 25.54 $ 23.30 Russell 2000 $ 99.56 $ 79.21 $ 92.62 $ 103.31 $ 116.54 S&P SmallCap 600 Consumer Discretionary Index $ 98.11 $ 70.82 $ 73.83 $ 77.79 $ 74.66 Item 6.
Issuer Purchases of Equity Securities On May 10, 2022, our Board approved a stock repurchase program, which authorizes us to repurchase up to $100.0 million of our shares of common stock over the next three years. We may effect these repurchases in open market transactions, privately negotiated purchases, or other acquisitions.
Issuer Purchases of Equity Securities On May 10, 2022, our Board approved a stock repurchase program, which authorized us to repurchase up to $100.0 million of our shares of common stock over the next three years. We were authorized to effect these repurchases in open market transactions, privately negotiated purchases, or other acquisitions.
The graph assumes, in each case, an initial investment of $100 on April 23, 2021, based on the market price at the end of each month through and including December 31, 2024, and that all dividends paid by companies included in these indices have been reinvested.
The graph assumes, in each case, an initial investment of $100 on December 31, 2021, based on the market price at the end of each month through and including December 31, 2025, and that all dividends paid by companies included in these indices have been reinvested.
See “Risk Factors—Risks Relating Ownership of our Common Stock—We do not anticipate paying any quarterly cash dividends, and accordingly, stockholders must rely on stock appreciation for any return on their investment” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” Performance Graph The following graph compares the cumulative total return on our common stock since it began trading on the Nasdaq Global Select Market on April 23, 2021 with the cumulative total return of the Russell 2000 Index and the S&P SmallCap 600 Consumer Discretionary Index.
See “Risk Factors—Risks Relating to Ownership of our Common Stock—We do not anticipate paying any quarterly cash dividends, and accordingly, stockholders must rely on stock appreciation for any return on their investment” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” Performance Graph The following graph compares the cumulative total return on our common stock on the Nasdaq Global Select Market since December 31, 2021 with the cumulative total return of the Russell 2000 Index and the S&P SmallCap 600 Consumer Discretionary Index.
On December 31, 2024, there were 27 registered holders of record of our common stock. A greater number of holders are “street name” or beneficial holders, whose shares are held of record by banks, brokers, and other financial institutions.
On December 31, 2025, there were 21 registered holders of record of our common stock. A greater number of holders are “street name” or beneficial holders, whose shares are held of record by banks, brokers, and other financial institutions.
We are not obligated to repurchase any of our shares of our common stock under the program and the timing and amount of any repurchases will depend on market conditions, our stock price, alternative uses of capital, the terms of our debt instruments, and other factors.
We were not obligated to repurchase any of our shares of our common stock under the program and the timing and amount of any repurchases was subject to market conditions, our stock price, alternative uses of capital, the terms of our debt instruments, and other factors.
No shares were repurchased during the fourth quarter of the year ended December 31, 2024. As of December 31, 2024, $77.0 million remained available under our stock repurchase program. Dividends We currently do not intend to pay cash dividends on our common stock. However, we may in the future decide to pay dividends on our common stock.
The Repurchase Program expired on May 10, 2025, and the Board has not authorized a new stock repurchase program. Dividends We currently do not intend to pay cash dividends on our common stock. However, we may in the future decide to pay dividends on our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

95 edited+27 added−24 removed68 unchanged
Biggest changeFor a discussion of Adjusted EBITDA and Adjusted EBITDA margin and the limitations on their use, and the reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, and our calculation of Adjusted EBITDA margin see “— Non-GAAP Financial Measures” below. ​ 44 Table of Contents Results of Operations Year ended December 31, 2024 Compared to Year ended December 31, 2023 The following table summarizes our results of operations for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change ​ ​ ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ Change ​ % of ​ ​ 2024 Net Sales 2023 Net Sales Amount Net Sales ​ ​ (dollars in thousands) Net sales ​ $ 508,520 ​ 100.0 % $ 566,492 ​ 100.0 % $ (57,972) ​ — % Cost of sales ​ 354,776 69.8 % 413,548 73.0 % (58,772) (3.2) % Gross profit ​ 153,744 30.2 % 152,944 27.0 % 800 3.2 % Selling, general, and administrative expense ​ 108,364 21.3 % 110,296 19.5 % (1,932) 1.8 % Amortization ​ 27,103 5.3 % 26,519 4.7 % 584 0.6 % Income from operations ​ 18,277 3.6 % 16,129 2.8 % 2,148 0.8 % Other expense (income): ​ ​ ​ ​ ​ ​ ​ Interest expense, net ​ 24,840 4.9 % 30,916 5.5 % (6,076) (0.6) % Other expense (income), net ​ 6,237 1.2 % (1,004) (0.2) % 7,241 1.4 % Total other expense, net ​ 31,077 6.1 % 29,912 5.3 % 1,165 0.8 % Earnings from equity method investment ​ ​ 4,060 ​ 0.8 % ​ 3,723 ​ 0.7 % ​ 337 ​ 0.1 % Loss before income taxes ​ (8,740) (1.7) % (10,060) (1.8) % 1,320 0.1 % Income tax expense (benefit) ​ 9,120 1.8 % (7,672) (1.4) % 16,792 3.2 % Net loss ​ $ (17,860) (3.5) % $ (2,388) (0.4) % $ (15,472) (3.1) % Adjusted EBITDA ​ $ 80,219 15.8 % $ 88,025 15.5 % $ (7,806) 0.3 % ​ Net Sales Net sales was $508.5 million for the year ended December 31, 2024, compared to $566.5 million for the year ended December 31, 2023.
Biggest changeYear ended December 31, 2024 Compared to Year ended December 31, 2023 Year Ended December 31, Change % of % of Change % of 2024 Net Sales 2023 Net Sales Amount Net Sales (dollars in thousands) Net sales $ 508,520 100.0 % $ 566,492 100.0 % $ (57,972) — % Cost of sales $ 354,776 69.8 % $ 413,548 73.0 % $ (58,772) (3.2) % Gross profit $ 153,744 30.2 % $ 152,944 27.0 % $ 800 3.2 % Selling, general, and administrative expense $ 108,364 21.3 % $ 110,296 19.5 % $ (1,932) 1.8 % Amortization $ 27,103 5.3 % $ 26,519 4.7 % $ 584 0.6 % Income from operations $ 18,277 3.6 % $ 16,129 2.8 % $ 2,148 0.8 % Other expense (income): Interest expense, net $ 24,840 4.9 % $ 30,916 5.5 % $ (6,076) (0.6) % Other expense (income), net $ 6,237 1.2 % $ (1,004) (0.2) % $ 7,241 1.4 % Total other expense, net $ 31,077 6.1 % $ 29,912 5.3 % $ 1,165 0.8 % Earnings from equity method investment $ 4,060 0.8 % $ 3,723 0.7 % $ 337 0.1 % Loss before income taxes $ (8,740) (1.7) % $ (10,060) (1.8) % $ 1,320 0.1 % Income tax expense (benefit) $ 9,120 1.8 % $ (7,672) (1.4) % $ 16,792 3.2 % Net loss $ (17,860) (3.5) % $ (2,388) (0.4) % $ (15,472) (3.1) % Adjusted EBITDA $ 80,219 15.8 % $ 88,025 15.5 % $ (7,806) 0.3 % For discussion on comparison of the years ended December 31, 2024 and 2023, see the Results of Operations section disclosed in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 5, 2025.
Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures and should not be considered as alternatives to net income (loss) as a measure of financial performance or any other performance measure derived in accordance with GAAP, and they should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures and should not be considered as alternatives to net income (loss) as a measure of financial performance or any other performance measure derived in accordance with GAAP, and they should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
In addition, other companies, including companies in our industry, may not calculate Adjusted EBITDA and Adjusted EBITDA margin at all or may calculate Adjusted EBITDA and Adjusted EBITDA margin differently and accordingly, are not necessarily comparable to similarly entitled measures of other companies, which reduces the usefulness of Adjusted EBITDA and Adjusted EBITDA margin as tools for comparison.
In addition, other companies, including companies in our industry, may not calculate Adjusted EBITDA and Adjusted EBITDA margin at all or may calculate Adjusted EBITDA and Adjusted EBITDA margin differently and accordingly, are not necessarily comparable to similarly entitled measures of other companies, which reduces the usefulness of Adjusted EBITDA and Adjusted EBITDA margin as tools for comparison.
Financing Activities During the year ended December 31, 2024, financing activities used $22.0 million of cash, consisting of repayments on long-term debt borrowings of $21.2 million, and repayments of finance lease obligations of $0.8 million.
During the year ended December 31, 2024, financing activities used $22.0 million of cash, consisting of repayments on long-term debt borrowings of $21.2 million, and repayments of finance lease obligations of $0.8 million.
Some of these limitations are that Adjusted EBITDA and Adjusted EBITDA margin: ● do not reflect every expenditure, future requirements for capital expenditures or contractual commitments; ● do not reflect changes in our working capital needs; ● do not reflect the interest expense, or the amounts necessary to service interest or principal payments, on our outstanding debt; ● do not reflect income tax (benefit) expense, and because the payment of taxes is part of our operations, tax expense is a necessary element of our costs and ability to operate; ● do not reflect non-cash stock-based compensation, which will remain a key element of our overall compensation package; and ● do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations.
Some of these limitations are that Adjusted EBITDA and Adjusted EBITDA margin: • do not reflect every expenditure, future requirements for capital expenditures or contractual commitments; • do not reflect changes in our working capital needs; • do not reflect the interest expense, net, or the amounts necessary to service interest or principal payments, on our outstanding debt; • do not reflect income tax expense (benefit), and because the payment of taxes is part of our operations, tax expense is a necessary element of our costs and ability to operate; • do not reflect non-cash stock-based compensation, which will remain a key element of our overall compensation package; and • do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations.
Risk Factors” and our audited consolidated financial statements and related notes for the three years ended December 31, 2024, 2023 and 2022, included elsewhere in this Annual Report. As used in this Annual Report, references to “Latham,” “the Company,” “we,” “us,” and “our” refer to the Company and its consolidated subsidiaries unless otherwise indicated of the context requires otherwise.
Risk Factors” and our audited consolidated financial statements and related notes for the three years ended December 31, 2025, 2024 and 2023, included elsewhere in this Annual Report. As used in this Annual Report, references to “Latham,” “the Company,” “we,” “us,” and “our” refer to the Company and its consolidated subsidiaries unless otherwise indicated of the context requires otherwise.
Customer Rebates and Cash Discounts We offer rebates to our customers based on factors such as the total amount of the customer’s purchase and expected sales for a particular customer during the year. Rebates are estimated by applying the portfolio approach using the most-likely-amount method and are deducted from revenue at the time of sale.
Customer Rebates We offer rebates to our customers based on factors such as the total amount of the customer’s purchase and expected sales for a particular customer during the year. Rebates are estimated by applying the portfolio approach using the most-likely-amount method and are deducted from revenue at the time of sale.
(b) Represents non-cash stock-based compensation expense. (c) Represents unrealized foreign currency transaction losses associated with our international subsidiaries. (d) Represents fees paid to external consultants and other expenses for our strategic initiatives. (e) Represents acquisition and integration costs as well as other costs related to potential transactions.
(b) Represents non-cash stock-based compensation expense. (c) Represents unrealized foreign currency transaction gains or losses associated with our international subsidiaries. (d) Represents fees paid to external consultants and other expenses for our strategic initiatives. (e) Represents acquisition and integration costs as well as other costs related to potential transactions.
For a description of our contractual obligations and commitments, see Notes 9 and 13 to our Consolidated Financial Statements included elsewhere in this Annual Report. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States.
For a description of our contractual obligations and commitments, see Notes 9 and 12 to our Consolidated Financial Statements included elsewhere in this Annual Report. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States.
Our volume of product sales in a given period will be impacted by changes in our distribution platform and by our ability to generate leads for our dealers. ● Material conversion: We have continued to consummate sales of our products through our focused efforts to drive material conversion and market penetration of our products, specifically our fiberglass pools, which continue to take market share from traditional concrete pools and enable meaningfully improved economics for consumers, dealers, and pool installers.
Our volume of product sales in a given period will be impacted by changes in our distribution platform and by our ability to generate leads for our dealers. 37 Table of Contents • Material conversion: We have continued to consummate sales of our products through our focused efforts to drive material conversion and market penetration of our products, specifically our fiberglass pools, which continue to take market share from traditional concrete pools and enable meaningfully improved economics for consumers, dealers, and pool installers.
These assumptions require a significant amount of judgment, including estimates of future taxable income. As of December 31, 2024 and 2023, our valuation allowance was $8.7 million and $3.1 million, respectively. We continue to assess whether any significant changes in circumstances or assumptions have occurred that could materially affect our ability to realize deferred tax assets.
These assumptions require a significant amount of judgment, including estimates of future taxable income. As of December 31, 2025 and 2024, our valuation allowance was $8.3 million and $8.7 million, respectively. We continue to assess whether any significant changes in circumstances or assumptions have occurred that could materially affect our ability to realize deferred tax assets.
Sales are recognized net of any estimated rebates, returns, allowances, cash discounts or other sales incentives. Revenue that is derived from our extended service warranties, which are separately priced and sold, is recognized over the term of the contracts.
Sales are recognized net of any estimated rebates, returns, allowances or other sales incentives. Revenue that is derived from our extended service warranties, which are separately priced and sold, is recognized over the term of the contracts.
Contractual Obligations Our largest contractual obligations as of December 31, 2024 consisted of principal payments related to our long-term indebtedness that are included in our consolidated balance sheet and the related periodic interest payments, and non-cancelable operating leases.
Contractual Obligations Our largest contractual obligations as of December 31, 2025 consisted of principal payments related to our long-term indebtedness that are included in our consolidated balance sheet and the related periodic interest payments, and non-cancelable operating leases.
With an operating history that spans over 65 years, we offer the industry’s broadest portfolio of pools and related products, including in-ground swimming pools, pool covers, and pool liners. We have a heritage of innovation.
With an operating history that spans over 70 years, we offer the industry’s broadest portfolio of pools and related products, including in-ground swimming pools, pool covers, and pool liners. We have a heritage of innovation.
We sell liners for the interior surface of vinyl pools (including pools that were not manufactured by us). We also sell all-season covers, which are winterizing mesh or solid 42 Table of Contents pool covers that protect pools against debris and cold or inclement weather, and automatic safety covers for pools that can be operated with a switch.
We sell liners for the interior surface of vinyl pools (including pools that were not manufactured by us). We also sell all-season pool covers, which are winterizing mesh or solid pool covers that protect pools against debris and cold or inclement weather, and automatic safety covers for pools that can be operated with a switch.
Loans outstanding under the Term Loan bear interest, at the borrower’s option, at a rate per annum based on Term SOFR (as defined in the Credit Agreement), plus a margin ranging from 3.75% to 4.00%, depending on the First Lien Net Leverage Ratio (as defined in the Credit Agreement, the “First Lien Net Leverage Ratio”), or based on the Base Rate (as defined in the Credit Agreement), plus a margin ranging from 2.75% to 3.00%, depending on the First Lien Net Leverage Ratio.
Loans outstanding under the Term Loan bear interest, at the borrower’s option, at a rate per annum based on Term SOFR (as defined in the Credit Agreement), plus a margin ranging from 3.75% to 4.00%, depending on the First Lien Net Leverage Ratio, or based on the Base Rate (each as defined in the Credit Agreement), plus a margin ranging from 2.75% to 3.00%, depending on the First Lien Net Leverage Ratio.
We use Adjusted EBITDA and Adjusted EBITDA margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to utilize as a significant performance metric in our annual management incentive bonus plan compensation, and to compare our performance against that of other companies using similar measures.
We use Adjusted EBITDA and Adjusted EBITDA margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to utilize as a significant performance metric in our annual management incentive bonus plan compensation, and to compare our performance against that of other 43 Table of Contents companies using similar measures.
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%. 51 Table of Contents A commitment fee accrues on any unused portion of the commitments under the Revolving Credit Facility.
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.
Demand for our products is also affected by the level of interest rates and the availability of credit, consumer confidence and spending, housing affordability, demographic trends, employment levels, and other macroeconomic factors that may influence the extent to which consumers engage in renovations to their backyard, including pool installation projects to enhance the outdoor living spaces of their homes. ● Seasonality and weather: Although we generally have demand for our products throughout the year, our business is seasonal, and weather is one of the principal external factors affecting the business.
Demand for our products is also affected by the level of interest rates and the availability of credit, consumer confidence and ability and willingness to spend, housing affordability, demographic trends, employment levels, tariffs and other macroeconomic factors that may influence the extent to which consumers engage in renovations to their backyard, including pool installation projects to enhance the outdoor living spaces of their homes. • Seasonality and weather: Although we generally have demand for our products throughout the year, our business is seasonal, and weather is one of the principal external factors affecting the business.
For discussion on operating, investing, and financing activities of the year ended December 31, 2022, see the Liquidity and Capital Resources section disclosed in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on March 13, 2024.
For discussion on operating, investing, and financing activities of the year ended December 31, 2023, see the Liquidity and Capital Resources section disclosed in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 5, 2025.
There can be no assurance that we will not modify the presentation of Adjusted EBITDA and 43 Table of Contents Adjusted EBITDA margin in the future, and any such modification may be material. Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed to imply that our future results will be unaffected by any such adjustments.
There can be no assurance that we will not modify the presentation of Adjusted EBITDA and Adjusted EBITDA margin in the future, and any such modification may be material. Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed to imply that our future results will be unaffected by any such adjustments.
We have presented Adjusted EBITDA and Adjusted EBITDA margin solely as supplemental disclosures because we believe they allow for a more complete analysis of results of operations and assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as (i) depreciation and amortization, (ii) interest expense, net, (iii) income tax expense (benefit), (iv) loss (gain) on sale and disposal of property and equipment, (v) restructuring charges, (vi) stock-based compensation expense, (vii) unrealized (gains) losses on foreign currency transactions, (viii) strategic initiative costs, (ix) acquisition and integration related costs, (x) loss on extinguishment of debt, (xi) underwriting fees related to offering of common stock, (xii) the Odessa fire and other such unusual events, and (xiii) other.
We have presented Adjusted EBITDA and Adjusted EBITDA margin solely as supplemental disclosures because we believe they allow for a more complete analysis of results of operations and assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as (i) depreciation and amortization, (ii) interest expense, net, (iii) income tax expense (benefit), (iv) (gain) loss on sale and disposal of property and equipment, (v) restructuring charges, (vi) stock-based compensation expense, (vii) unrealized (gains) losses on foreign currency transactions, (viii) strategic initiative costs, (ix) acquisition and integration related costs, (x) the Odessa fire and other such unusual events, and (xi) other.
The quantitative analysis requires comparing the carrying value of the reporting unit, including goodwill, to its fair value. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and no further testing is required.
The quantitative analysis requires comparing the carrying value of the reporting unit, including goodwill, to its fair value. If the fair value of the reporting unit exceeds its carrying amount, 49 Table of Contents goodwill is not considered to be impaired and no further testing is required.
Catastrophic events, such as hurricanes, tornadoes, and 41 Table of Contents earthquakes can cause interruptions to our operations, as well as our dealers and distributors, and may cause customers to delay purchases. These scenarios are partially mitigated by our geographic diversity, both across the United States and through international markets.
Catastrophic events, such as hurricanes, tornadoes, and earthquakes can cause interruptions to our operations, as well as our dealers and distributors, and may cause customers to delay purchases. These scenarios are partially mitigated by our geographic diversity, both across the United States and through international markets.
We have elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company.
We have elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company, which will occur no later than December 31, 2026.
We have presented Adjusted EBITDA and Adjusted EBITDA margin solely as 48 Table of Contents supplemental disclosures because we believe they allow for a more complete analysis of results of operations and assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as (i) depreciation and amortization, (ii) interest expense, net, (iii) income tax expense (benefit), (iv) loss (gain) on sale and disposal of property and equipment, (v) restructuring charges, (vi) stock-based compensation expense, (vii) unrealized (gains) losses on foreign currency transactions, (viii) strategic initiative costs, (ix) acquisition and integration related costs, (x) loss on extinguishment of debt, (xi) underwriting fees related to offering of common stock, (xii) the Odessa fire and other such unusual events, and (xiii) other.
We have presented Adjusted EBITDA and Adjusted EBITDA margin solely as supplemental disclosures because we believe they allow for a more complete analysis of results of operations and assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as (i) depreciation and amortization, (ii) interest expense, net, (iii) income tax expense (benefit), (iv) (gain) loss on sale and disposal of property and equipment, (v) restructuring charges, (vi) stock-based compensation expense, (vii) unrealized (gains) losses on foreign currency transactions, (viii) strategic initiative costs, (ix) acquisition and integration related costs, (x) the Odessa fire and other such unusual events, and (xi) other.
The commitment fee is due and payable quarterly in arrears and is, initially, 0.375% per annum and will, thereafter, accrue at a rate per annum ranging from 0.25% to 0.50%, depending on the First Lien Net Leverage Ratio. The Revolving Credit Facility is not subject to amortization. Term Loan The Term Loan matures on February 23, 2029.
The commitment fee is due and payable quarterly in arrears and is, initially, 0.375% per annum and will, thereafter, accrue at a rate per annum ranging from 0.25% to 0.50%, depending on the First Lien Net Leverage Ratio. The Revolving Credit Facility is not subject to amortization.
Volume of Products Sold Our net sales depend primarily on the volume of products we sell during any given period, and volume is affected by the following items, among others: ● Sales, distribution, and marketing: While we have traditionally relied on our dealers and distributors to raise awareness of our products, we pioneered the first “direct-to-homeowner” digital and social marketing strategy that has transformed the homeowner’s purchase journey.
Volume of Products Sold Our net sales depend primarily on the volume of products we sell during any given period, and volume is affected by the following items, among others: • Sales, distribution, and marketing: In addition to the efforts of our dealers and distributors to raise awareness of our products, we pioneered the first “direct-to-homeowner” digital and social marketing strategy that has transformed the homeowner’s purchase journey.
Partnership with our dealers is integral to our collective success, and we have enjoyed long-tenured relationships averaging over 14 years. We support our dealer network with business development tools, co-branded marketing programs.
Partnership with our dealers is integral to our collective success, and we have enjoyed long-tenured relationships averaging over 15 years. We support our dealer network with business development tools, co-branded marketing programs, and in-house training.
Cost of Sales and Gross Margin Cost of sales was $354.8 million for the year ended December 31, 2024, compared to $413.5 million for the year ended December 31, 2023, and decreased as a percentage of net sales by 3.2%.
Cost of Sales and Gross Margin Cost of sales was $363.8 million for the year ended December 31, 2025, compared to $354.8 million for the year ended December 31, 2024, and decreased as a percentage of net sales by 3.2%.
Our investment in Premier Pools & Spas is reflected as an equity method investment on our consolidated balance sheet as of December 31, 2024 and 2023, and our proportionate share of earnings or losses of Premier Pools & Spas is recognized in earnings (losses) from equity method investment in our consolidated statement of operations on a three-month lag.
Our investment in Premier Pools & Spas is reflected as an equity method investment on our consolidated balance sheets as of December 31, 2025 and 2024, and our proportionate share of earnings or losses of Premier Pools & Spas is recognized in earnings (losses) from equity method investment in our consolidated statements of operations on a three-month lag.
Adjusted EBITDA and Adjusted EBITDA margin have their limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP.
Adjusted EBITDA and Adjusted EBITDA margin have their limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.
Net cash provided in changes in our operating assets and liabilities for the year ended December 31, 2023 consisted primarily of a $68.2 million decrease in inventories, a $13.0 million decrease in trade receivables, a $2.8 million increase in other long-term liabilities and a $1.3 million decrease in income tax receivable, partially offset by a $11.9 million decrease in accrued expenses and other current liabilities, a $8.5 million decrease in accounts payable, a $4.3 million increase in other assets and a $1.3 million increase in prepaid expenses and other current assets.
Net cash used in changes in our operating assets and liabilities for the year ended December 31, 2025 consisted primarily of a $9.2 million increase in trade receivables, a $8.2 million increase in income tax receivable, a $6.1 million decrease in accrued expenses and other current liabilities, a $1.6 million increase in prepaid expenses and other current assets, a $0.6 million decrease in other long-term liabilities and a $0.2 million increase in other assets, partially offset by a $5.8 million increase in accounts payable and $2.8 million decrease in inventories.
First, the vertical integration of our automatic safety cover product line in the acquired geographies is expected to increase margins. Second, as one company with a fully integrated sales and marketing strategy, we expect to accelerate the sales growth of this product line.
First, the vertical integration of our automatic safety cover product line in the acquired geographies increased margins. Second, as one company with a fully integrated sales and marketing strategy, we were able to accelerate the sales growth of this product line.
The first step is recognition, where an individual tax position is evaluated as to whether it has a likelihood of greater than 50% of being sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation processes.
We record liabilities for uncertain income tax positions based on a two-step process. The first step is recognition, where an individual tax position is evaluated as to whether it has a likelihood of greater than 50% of being sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation processes.
You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA and Adjusted EBITDA margin, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation.
We encourage evaluation of these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA and Adjusted EBITDA margin, be mindful that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation.
You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA and Adjusted EBITDA margin, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation.
We encourage evaluation of these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA and Adjusted EBITDA margin, be mindful that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation.
We have selected the first day of the fourth quarter to perform our annual goodwill impairment testing. We may assess our goodwill for impairment initially using a qualitative approach, or step zero, to determine whether conditions exist to indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying value.
We may assess our goodwill for impairment initially using a qualitative approach, or step zero, to determine whether conditions exist to indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying value.
On August 2, 2024, we completed a stock acquisition of Coverstar Central, our exclusive dealer of automatic safety covers in 29 states – mainly in the center of the U.S. Coverstar Central has been our trusted partner since 2006, and this acquisition represents a valuable strategic opportunity that we expect to benefit from in multiple ways.
On August 2, 2024, we completed an acquisition of Coverstar Central, our exclusive dealer of automatic safety covers in 29 states – mainly in the center of the U.S. Coverstar Central was our trusted partner since 2006, and this acquisition represented a valuable strategic opportunity that we benefited from in multiple ways.
Net Loss Margin Net loss margin was 3.5% for the year ended December 31, 2024, compared to net loss margin of 0.4% for the year ended December 31, 2023.
Net Income (Loss) Margin Net income margin was 2.0% for the year ended December 31, 2025, compared to net loss margin of 3.5% for the year ended December 31, 2024.
Selling, General, and Administrative Expense Selling, general, and administrative expense was $108.4 million for the year ended December 31, 2024, compared to $110.3 million for the year ended December 31, 2023, and increased as a percentage of net sales by 1.8%.
Selling, General, and Administrative Expense Selling, general, and administrative expense was $122.6 million for the year ended December 31, 2025, compared to $108.4 million for the year ended December 31, 2024, and increased as a percentage of net sales by 1.2%.
From our perspective this will be a long-term trend toward material conversion from traditional concrete pools. We believe that our fiberglass pools offer a compelling value proposition because of their lower up-front and lifecycle cost of ownership, less maintenance, higher quality, lower usage of harsh chemicals, quicker installation, and more convenient experience, compared to products manufactured from traditional materials.
From our perspective this will be a long-term trend toward material conversion from traditional concrete pools. We believe that our fiberglass pools offer a compelling value proposition because of their lower up-front and lifecycle costs, better quality, fewer chemicals, faster and easier installation, and more convenient experience, compared to products manufactured from traditional materials.
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.
The Revolving Credit Facility matures on February 23, 2027. Loans outstanding under the Revolving Credit Facility denominated in U.S.
Revenue from custom products is recognized over time utilizing an input method that compares the cost of cumulative work-in-process to date to the most current estimates for the entire cost of the performance obligation. Custom products are generally delivered to the customer within three days of receipt of the purchase order.
Revenue from custom products is recognized over time utilizing an input method that compares the cost of cumulative work-in-process to date to the most current estimates for the entire cost of the performance obligation.
Other Expense (Income), Net Other expense (income), net was $6.2 million for the year ended December 31, 2024, compared to $ (1.0) million for the year ended December 31, 2023. The $7.2 million increase in other expense (income), net was primarily driven by an unfavorable change in net foreign currency transaction gains and losses associated with our international subsidiaries.
Other (Income) Expense, Net Other income, net was $3.5 million for the year ended December 31, 2025, compared to other expense of $6.2 million for the year ended December 31, 2024. The $9.7 million increase in other income, net was primarily driven by a favorable change in net foreign currency transaction gains and losses associated with our international subsidiaries.
Earnings from Equity Method Investments Earnings from equity method investment of Premier Pools & Spas was $4.1 million for the year ended December 31, 2024, compared to $3.7 million for the year ended December 31, 2023, primarily because of the financial performance of Premier Pools & Spas.
Earnings from Equity Method Investments Earnings from equity method investment of Premier Pools & Spas was $5.2 million for the year ended December 31, 2025, compared to $4.1 million for the year ended December 31, 2024, due to the financial performance of Premier Pools & Spas.
Cash Flows The following table summarizes our sources and uses of cash for each of the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 2023 2022 ​ ​ (in thousands) Net cash provided by operating activities ​ $ 61,307 ​ $ 116,369 ​ $ 32,309 Net cash used in investing activities ​ (84,643) ​ (31,726) ​ (45,018) Net cash (used in) provided by financing activities ​ (22,021) ​ (13,875) ​ 3,775 Effect of exchange rate changes on cash ​ (1,008) ​ (631) ​ (2,392) Net (decrease) increase in cash ​ $ (46,365) ​ $ 70,137 ​ $ (11,326) ​ Operating Activities During the year ended December 31, 2024, operating activities provided $61.3 million of cash.
Cash Flows The following table summarizes our sources and uses of cash for each of the periods presented: Year Ended December 31, 2025 2024 2023 (in thousands) Net cash provided by operating activities $ 63,430 $ 61,307 $ 116,369 Net cash used in investing activities (42,319) (84,643) (31,726) Net cash used in financing activities (6,973) (22,021) (13,875) Effect of exchange rate changes on cash 507 (1,008) (631) Net increase (decrease) in cash $ 14,645 $ (46,365) $ 70,137 Operating Activities During the year ended December 31, 2025, operating activities provided $63.4 million of cash.
Customer rebates, returns, allowances, cash discounts, and other sales incentives are estimated by applying the portfolio approach using the most-likely-amount method and are recorded as a reduction to revenue.
We recognize revenue on the transaction price less any estimated rebates, returns, allowances or other sales incentives. Customer rebates, returns, allowances and other sales incentives are estimated by applying the portfolio approach using the most-likely-amount method and are recorded as a reduction to revenue.
We consider the historical volatility of our stock price, as well as implied volatility. We utilized a dividend yield of zero, as we have no history or plan of declaring dividends on our common stock. The assumptions underlying these valuations represented our best estimate, which involved inherent uncertainties and the application of judgment.
The historical volatility is calculated based on a period of time corresponding with expected term assumption. We utilized a dividend yield of zero, as we have no history or plan of declaring dividends on our common stock. The assumptions underlying these valuations represented our best estimate, which involved inherent uncertainties and the application of judgment.
We invest in our exclusive dealers through localized marketing spend, co-branding opportunities, tailored offerings, and priority lead generation. We also provide our dealers with enhanced product literature, in-store display samples, and other initiatives to drive sales. We have directed a significant portion of our advertising spend to digital channels, including social media and search advertising.
We also provide our dealers with enhanced product literature, in-store display samples, and other initiatives to drive sales. We have directed a significant portion of our advertising spend to digital channels, including social media and search advertising.
The $6.1 million, or 19.7%, decrease in interest expense, net was primarily the result of the change in the fair value of our interest rate swap, compared to the year ended December 31, 2023.
The $1.0 million, or 3.9%, increase in interest expense, net was primarily the result of the change in the fair value of our interest rate swap, compared to the year ended December 31, 2024.
Our primary cash needs are to fund working capital, capital expenditures, debt service requirements, and any acquisitions or investments we may undertake. As of December 31, 2024, we had $56.4 million of cash, $281.5 million of outstanding borrowings, and an additional $75.0 million of availability under our Revolving Credit Facility. On August 2, 2024, we completed the Coverstar Central Acquisition.
Our primary cash needs are to fund working capital, capital expenditures, debt service requirements, and any acquisitions or investments we may undertake. As of December 31, 2025, we had $71.0 million of cash, $279.8 million of outstanding borrowings, and an additional $75.0 million of availability under our Revolving Credit Facility.
Our primary working capital requirements are for the purchase of inventory, payroll, rent, facility costs and other selling, general, and administrative costs. Our working capital requirements fluctuate during the year, driven primarily by seasonality and the timing of raw material purchases. Our capital expenditures are primarily related to our growth strategy, including production capacity, storage, and delivery equipment.
Our primary working capital requirements are for the purchase of inventory, payroll, rent, facility costs and other selling, general, and administrative costs. Our working capital requirements fluctuate during the year, driven primarily by 45 Table of Contents seasonality and the timing of raw material purchases.
Management compensates for these limitations by primarily relying on our GAAP results, while using Adjusted EBITDA and Adjusted EBITDA margin as supplements to the corresponding GAAP financial measures. 49 Table of Contents The following table provides a reconciliation of our net loss to Adjusted EBITDA for the periods presented and the calculation of Adjusted EBITDA margin: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 2022 ​ (in thousands) Net loss $ (17,860) ​ $ (2,388) ​ $ (5,694) ​ Depreciation and amortization 44,446 ​ 40,751 ​ 38,175 ​ Interest expense, net 24,840 ​ 30,916 ​ 15,753 ​ Income tax expense (benefit) 9,120 ​ (7,672) ​ 19,415 ​ Loss on sale and disposal of property and equipment 408 ​ 138 ​ 193 ​ Restructuring charges (a) 512 ​ 3,727 ​ 1,607 ​ Stock-based compensation expense (b) 7,392 ​ 18,804 ​ 50,634 ​ Unrealized losses (gains) on foreign currency transactions (c) 6,223 ​ (110) ​ 2,534 ​ Strategic initiative costs (d) 3,329 ​ 4,092 ​ 3,948 ​ Acquisition and integration related costs (e) 2,348 ​ 911 ​ 326 ​ Loss on extinguishment of debt (f) ​ — ​ ​ — ​ ​ 3,465 ​ Underwriting fees related to offering of common stock (g) ​ — ​ ​ — ​ ​ 11,437 ​ Odessa fire (h) ​ — ​ ​ (2,600) ​ ​ 869 ​ Other (i) ​ (539) ​ 1,456 ​ 590 ​ Adjusted EBITDA $ 80,219 ​ $ 88,025 ​ $ 143,252 ​ Net sales $ 508,520 ​ $ 566,492 ​ $ 695,736 ​ Net loss margin (3.5) % (0.4) % (0.8) % Adjusted EBITDA margin 15.8 % 15.5 % 20.6 % (a) Represents costs related to a cost reduction plan that includes severance and other costs for our executive management changes and additional costs related to our cost reduction plans, which include further actions to reduce our manufacturing overhead by reducing headcount in addition to facility shutdowns.
Management compensates for these limitations by primarily relying on our GAAP results, while using Adjusted EBITDA and Adjusted EBITDA margin as supplements to the corresponding GAAP financial measures. 44 Table of Contents The following table provides a reconciliation of our net income (loss) to Adjusted EBITDA for the periods presented and the calculation of Adjusted EBITDA margin: Year Ended December 31, 2025 2024 2023 Net income (loss) $ 11,124 $ (17,860) $ (2,388) Depreciation and amortization 51,354 44,446 40,751 Interest expense, net 25,805 24,840 30,916 Income tax expense (benefit) 2,364 9,120 (7,672) (Gain) loss on sale and disposal of property and equipment (21) 408 138 Restructuring charges(a) 523 512 3,727 Stock-based compensation expense(b) 9,247 7,392 18,804 Unrealized (gains) losses on foreign currency transactions(c) (4,131) 6,223 (110) Strategic initiative costs(d) 2,806 3,329 4,092 Acquisition and integration related costs(e) 785 2,348 911 Odessa fire(f) — — (2,600) Other(g) (25) (539) 1,456 Adjusted EBITDA $ 99,831 $ 80,219 $ 88,025 Net sales $ 545,912 $ 508,520 $ 566,492 Net income (loss) margin 2.0 % (3.5) % (0.4) % Adjusted EBITDA margin 18.3 % 15.8 % 15.5 % ________________________________________________________ (a) Represents costs related to a cost reduction plan that includes severance and other costs for our executive management changes and additional costs related to our cost reduction plans.
We anticipate that sales of our fiberglass pool products will continue to benefit from material conversion. The success of our efforts to drive conversion during any given period will impact the volume of our products sold during that period. ● Product innovation : We continue to develop and introduce innovative products to accelerate material conversion and to expand our markets.
We completed acquisitions in 2025 to improve our market share in autocovers. The success of our efforts to drive conversion during any given period will impact the volume of our products sold during that period. • Product innovation: We continue to develop and introduce innovative products to accelerate material conversion and to expand our markets.
The decrease in total net sales across our product lines was $38.6 million for in-ground swimming pools, $9.7 million for liners and $9.6 million for covers.
The increase in total net sales across our product lines was $29.4 million for covers, $5.2 million for liners and $2.7 million for in-ground swimming pools.
We believe that the following critical accounting policies affect the most significant estimates and management judgments used in preparation of the consolidated financial statements. 53 Table of Contents Revenue Recognition With the exception of our extended service warranties and our custom product contracts, we recognize our revenue at a point in time when control of the promised goods is transferred to our customers, and in an amount that reflects the consideration we expect to be entitled to in exchange for those goods.
Revenue Recognition With the exception of our extended service warranties and our custom product contracts, we recognize our revenue at a point in time when control of the promised goods is transferred to our customers, and in an amount that reflects the consideration we expect to be entitled to in exchange for those goods.
For a discussion of Adjusted EBITDA and Adjusted EBITDA margin and the limitations on their use, and the reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, and our calculation of Adjusted EBITDA margin see “— Non-GAAP Financial Measures” below.
For a discussion of Adjusted EBITDA and Adjusted EBITDA margin and the limitations on their use, and the reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, and our calculation of Adjusted EBITDA margin see “— Non-GAAP Financial Measures” below. 42 Table of Contents Adjusted EBITDA Margin Adjusted EBITDA margin was 18.3% for the year ended December 31, 2025, compared to 15.8% for the year ended December 31, 2024.
Overview We are the largest designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand. We hold the leading position in North America in every product category in which we compete.
Overview We are the largest designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand. We hold the leading position in North America in every product category in which we compete. It is our view that we are the most sought-after brand in the pool industry. We are Latham, The Pool Company TM .
We evaluate these estimates on an ongoing basis. Actual results may differ from estimates. Our significant accounting policies are presented in Note 2 to our Consolidated Financial Statements.
We evaluate these estimates on an ongoing basis. Actual results may differ from estimates. Our significant accounting policies are presented in Note 2 to our Consolidated Financial Statements. We believe that the following critical accounting policies affect the most significant estimates and management judgments used in preparation of the consolidated financial statements.
We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies. 56 Table of Contents Recently Issued and Adopted Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations, or cash flows is disclosed in Note 2 to our Consolidated Financial Statements included elsewhere in this Annual Report. ​ 57 Table of Contents ​
Recently Issued and Adopted Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations, or cash flows is disclosed in Note 2 to our Consolidated Financial Statements included elsewhere in this Annual Report. 51 Table of Contents
The cost of the raw materials used in our manufacturing processes is subject to volatility and has been affected by changes in supply and demand. We have minimal fixed-price contracts with our major vendors. We have not entered into hedges of our raw material costs historically, but we may choose to enter into such hedges in the future.
The cost of the raw materials used in our manufacturing processes is subject to volatility and has been affected by changes in supply and demand. We have minimal fixed-price contracts with 38 Table of Contents our major vendors.
Revenue from custom products is recognized over time utilizing an input method that compares the cost of cumulative work-in-process to date to the most current estimates for the entire cost of the performance obligation. See “— Critical Accounting Policies and Estimates — Revenue Recognition .” Gross Margin Gross margin is gross profit as a percentage of our net sales.
Revenue from custom products is recognized over time utilizing an input method that compares the cost of cumulative work-in-process to date to the most current estimates for the entire cost of the performance obligation.
The 3.2% increase in gross margin was primarily driven by production efficiencies from lean manufacturing and value engineering initiatives, improved procurement, and modest deflation.
The 3.2% increase in gross margin was primarily driven by production efficiencies from our lean manufacturing and value engineering initiatives and the accretive benefit of the three Coverstar acquisitions.
Income Tax Expense (Benefit) Income tax expense was $9.1 million for the year ended December 31, 2024, compared to a $ (7.7) million income tax benefit for the year ended December 31, 2023. Our effective tax rate was (104.3)% for the year ended December 31, 2024, compared to 76.3% for the year ended December 31, 2023.
Income Tax Expense Income tax expense was $2.4 million for the year ended December 31, 2025, compared to $9.1 million for the year ended December 31, 2024. Our effective tax rate was 17.5% for the year ended December 31, 2025, compared to (104.4)% for the year ended December 31, 2024.
We continue to make progress executing our strategy to drive adoption and awareness of fiberglass pools and automatic safety covers and gain additional operating efficiencies through value engineering and lean manufacturing initiatives.
We continue to make progress executing our strategy to drive adoption and awareness of fiberglass pools and automatic safety covers and gain additional operating efficiencies through value engineering and lean manufacturing initiatives. We continue to take a disciplined approach to capital investments, with the focus on product innovation, facility upgrades and technology and systems.
Loans under the Term Loan are subject to scheduled quarterly amortization payments equal to 0.25% of the initial principal amount of the Term Loan.
Loans under the Term Loan are subject to scheduled quarterly amortization payments equal to 0.25% of the initial principal amount of the Term Loan. As of December 31, 2025, we had $279.8 million of outstanding borrowings under the Term Loan.
Pricing In general, our products are priced to be competitive in the in-ground swimming pool market, including the prices for concrete pools, and to keep in line with changes in our input costs.
Pricing In general, our products are priced to be competitive in the in-ground swimming pool market, including the prices for concrete pools, and to keep in line with changes in our input costs, while also maintaining a good value proposition for the homeowner. We continue to monitor the potential impact of tariffs in our pricing models.
Net Loss Net loss was $17.9 million for the year ended December 31, 2024, compared to $2.4 million for the year ended December 31, 2023. The $15.5 million, or 647.9%, increase in net loss was primarily driven by the factors described above.
Net Income (Loss) Net income was $11.1 million for the year ended December 31, 2025, compared to net loss of $17.9 million for the year ended December 31, 2024. The $29.0 million, or 162.3%, increase in net income was primarily driven by the factors described above.
The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized on ultimate settlement. The actual benefits ultimately realized may differ from the estimates. We classify interest and penalties related to unrecognized tax benefits as a component of income tax expense (benefit) within the consolidated statements of operations.
The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized on ultimate settlement. The actual benefits ultimately realized may differ from the estimates.
Prices for spot market purchases are negotiated on a continuous basis in line with current market prices. Other than occasional strategic purchases of larger quantities of certain raw materials, we generally buy materials on an as-needed basis. Changes in prices of our raw materials have a direct impact on our cost of sales.
Other than occasional strategic purchases of larger quantities of certain raw materials, we generally buy materials on an as-needed basis. Changes in prices of our raw materials have a direct impact on our cost of sales. Acquisitions and Partnerships Strategic transactions continue to be part of our growth strategy.
Gross margin increased by 3.2% to 30.2% for the year ended December 31, 2024, compared to 27.0% for the year ended December 31, 2023. The $58.7 million, or 14.2%, decrease in cost of sales was primarily the result of a decrease in sales volume.
Gross margin increased by 3.2% to 33.4% for the year ended December 31, 2025, compared to 30.2% for the year ended December 31, 2024. The $9.0 million, or 2.6%, increase in cost of sales was primarily the result of an increase in sales volume, partially offset by the impact of production efficiencies.
However, if factors exist that could indicate an impairment in the future, including a sustained decrease in our stock price, we may be required to record impairment charges in future periods. For our quantitative impairment test performed for our reporting unit at October 1, 2023, we estimated the fair value of our reporting unit based on a market approach.
Based on the results of the qualitative assessment performed for our one reporting unit, we determined that goodwill was not impaired at September 28, 2025 and September 29, 2024. However, if factors exist that could indicate an impairment in the future, including a sustained decrease in our stock price, we may be required to record impairment charges in future periods.
The estimated royalty rate is determined based on the assessment of a reasonable royalty rate that a third party would negotiate in an arm’s-length license agreement for the use of the trade name, trademark, or proprietary pool design. 54 Table of Contents Impairment of Goodwill We evaluate goodwill for impairment at least annually, or more frequently when events or changes in circumstances indicate that the carrying value may not be recoverable.
The estimated royalty rate is determined based on the assessment of a reasonable royalty rate that a third party would negotiate in an arm’s-length license agreement for the use of the trade name, trademark, or proprietary pool design.
The 3.1% increase in net loss margin was driven by a $15.5 million increase in net loss and a $58.0 million decrease in net sales, compared to the year ended December 31, 2023 because of the factors described above. 46 Table of Contents Adjusted EBITDA Adjusted EBITDA was $80.2 million for the year ended December 31, 2024, compared to $88.0 million for the year ended December 31, 2023.
The 5.5% increase in net income margin was driven by a $29.0 million increase in net income and a $37.4 million increase in net sales, compared to the year ended December 31, 2024 because of the factors described above.
Our liabilities for uncertain tax positions were $0.0 million and $0.0 million for the years ended December 31, 2024 and 2023, respectively. Changes in recognition and measurement estimates are recorded in income tax expense (benefit)and liability in the period in which such changes occur.
Changes in recognition and measurement estimates are recorded in income tax expense (benefit) and liability in the period in which such changes occur.
The changes in accrued expenses and other current liabilities, and accounts payable were primarily because of volume of purchases and timing of payments, as well as an increase in incentive compensation. During the year ended December 31, 2023, operating activities provided $116.4 million of cash. Net loss, after adjustments for non-cash items, provided cash of $57.1 million.
The changes in accrued expenses and other current liabilities, and accounts payable were primarily because of volume of purchases and timing of payments, as well as an increase in incentive compensation.
Recent Developments Highlights for the year ended December 31, 2024 ● Decrease in net sales of 10.2%, or $58.0 million, to $508.5 million for the year ended December 31, 2024, compared to $566.5 million for the year ended December 31, 2023. ● Increase in net loss of $15.5 million, to $17.9 million for the year ended December 31, 2024, compared to a net loss of $2.4 million for the year ended December 31, 2023, representing a 3.5% net loss margin for the year ended December 31, 2024. ● Decrease in Adjusted EBITDA (as defined below) of $7.8 million, to $80.2 million for the year ended December 31, 2024, compared to $88.0 million for the year ended December 31, 2023. 39 Table of Contents Business Update Ongoing macroeconomic softness has impacted and is expected to continue to impact consumer spending and demand.
Recent Developments Highlights for the year ended December 31, 2025 • Increase in net sales of 7.4%, or $37.4 million, to $545.9 million for the year ended December 31, 2025, compared to $508.5 million for the year ended December 31, 2024. • Increase in net income of $29.0 million, to $11.1 million for the year ended December 31, 2025 and representing a 2.0% net income margin for the year ended December 31, 2025, compared to a net loss of $17.9 million for the year ended December 31, 2024. • Increase in Adjusted EBITDA (as defined below) of $19.6 million, to $99.8 million for the year ended December 31, 2025, compared to $80.2 million for the year ended December 31, 2024.
Amortization Amortization was $27.1 million for the year ended December 31, 2024, compared to $26.5 million for the year ended December 31, 2023. The $0.6 million, or 2.2%, increase in amortization was driven by the acquisition of Coverstar Central.
The $1.8 million, or 6.8%, increase in amortization was driven by the three Coverstar acquisitions. Interest Expense, Net Interest expense, net was $25.8 million for the year ended December 31, 2025, compared to $24.8 million for the year ended December 31, 2024.
Our mission is to design and manufacture high-quality pool products, with the homeowner in mind, and to be a value-added partner to our dealers.
The broad geographic reach of our national manufacturing and distribution network allows us to service our customers on short lead times and to deliver our products in a cost-effective manner. Our mission is to design and manufacture high-quality pool products, with the homeowner in mind, and to be a value-added partner to our dealers.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

157 edited+25 added−41 removed103 unchanged
Biggest changeConsolidated Statements of Cash Flows (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2024 2023 2022 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ ​ $ (17,860) ​ $ (2,388) ​ $ (5,694) Adjustments to reconcile net loss to net cash provided by operating activities: ​ ​ ​ ​ Depreciation and amortization ​ ​ 44,446 ​ 40,751 ​ 38,175 Gain on insurance proceeds received for capital ​ ​ ​ — ​ ​ (1,463) ​ ​ — Unrealized foreign currency loss (gains) ​ ​ ​ 6,223 ​ ​ (110) ​ ​ 2,534 Amortization of deferred financing costs and debt discount ​ ​ 1,720 ​ 1,720 ​ 1,570 Non-cash lease expense ​ ​ ​ 7,111 ​ ​ 7,675 ​ ​ 7,400 Change in fair value of interest rate swap ​ ​ (808) ​ 4,729 ​ (2,984) Deferred income taxes ​ ​ (1,678) ​ (9,685) ​ (3,802) Stock-based compensation expense ​ ​ 7,392 ​ 18,804 ​ 50,634 Underwriting fees related to offering of common stock ​ ​ ​ — ​ ​ — ​ ​ 11,437 Loss on extinguishment of debt ​ ​ ​ — ​ ​ — ​ ​ 3,465 Bad debt expense ​ ​ ​ 2,069 ​ ​ 5,379 ​ ​ 2,011 Other non-cash, net ​ ​ ​ 1,115 ​ ​ 16 ​ ​ 1,454 Earnings from equity method investment ​ ​ ​ (4,060) ​ ​ (3,723) ​ ​ (4,230) Distributions received from equity method investment ​ ​ ​ 5,109 ​ ​ 2,878 ​ ​ 2,497 Provision on liability for uncertain tax positions ​ ​ — ​ (7,503) ​ 1,434 Changes in operating assets and liabilities: ​ ​ ​ ​ ​ Trade receivables ​ ​ (2,378) ​ 13,040 ​ 8,992 Inventories ​ ​ 22,695 ​ 68,190 ​ (57,034) Prepaid expenses and other current assets ​ ​ (1,992) ​ (1,326) ​ 4,722 Income tax receivable ​ ​ (2,981) ​ 1,333 ​ 1,723 Other assets ​ ​ ​ 1,263 ​ ​ (4,346) ​ ​ (466) Accounts payable ​ ​ (4,039) ​ (8,512) ​ (12,358) Accrued expenses and other current liabilities ​ ​ (1,329) ​ (11,938) ​ (19,420) Other long-term liabilities ​ ​ (711) ​ 2,848 ​ 249 Net cash provided by operating activities ​ ​ 61,307 ​ 116,369 ​ 32,309 Cash flows from investing activities : ​ ​ ​ ​ Purchases of property and equipment ​ ​ (20,116) ​ (33,189) ​ (39,684) Capital reimbursed from insurance proceeds ​ ​ ​ — ​ ​ 1,463 ​ ​ — Proceeds from the sale of property and equipment ​ ​ — ​ — ​ 24 Acquisition of business, net of cash acquired ​ ​ (64,527) ​ — ​ (5,358) Net cash used in investing activities ​ ​ (84,643) ​ (31,726) ​ (45,018) Cash flows from financing activities : ​ ​ ​ ​ Proceeds from long-term debt borrowings ​ ​ — ​ — ​ 320,125 Payments on long-term debt borrowings ​ ​ (21,250) ​ (13,250) ​ (286,447) Proceeds from borrowings on revolving credit facility ​ ​ ​ — ​ ​ 48,000 ​ ​ 25,000 Payments on revolving credit facilities ​ ​ ​ — ​ ​ (48,000) ​ ​ (25,000) Deferred financing fees paid ​ ​ ​ — ​ ​ — ​ ​ (6,865) Proceeds from the issuance of common stock ​ ​ — ​ — ​ 257,663 Repayments of finance lease obligations ​ ​ ​ (771) ​ ​ (625) ​ ​ — Repurchase and retirement of common stock ​ ​ ​ — ​ ​ — ​ ​ (280,701) Net cash (used in) provided by financing activities ​ ​ (22,021) ​ (13,875) ​ 3,775 Effect of exchange rate changes on cash ​ ​ (1,008) ​ (631) ​ (2,392) Net (decrease) increase in cash ​ ​ (46,365) ​ 70,137 ​ (11,326) Cash at beginning of period ​ ​ 102,763 ​ 32,626 ​ 43,952 Cash at end of period ​ ​ $ 56,398 ​ $ 102,763 ​ $ 32,626 Supplemental cash flow information : ​ ​ ​ ​ Cash paid for interest ​ ​ $ 24,894 ​ $ 25,747 ​ $ 12,621 Income taxes paid, net ​ ​ ​ 15,475 ​ ​ 6,990 ​ ​ 20,313 Supplemental disclosure of non-cash investing and financing activities : ​ ​ ​ ​ Purchases of property and equipment included in accounts payable and accrued expenses ​ ​ $ 510 ​ $ 955 ​ $ 6,029 Capitalized internal-use software included in accounts payable – related party ​ ​ ​ — ​ ​ — ​ ​ 350 Right-of-use operating and finance lease assets obtained in exchange for lease liabilities ​ ​ ​ 5,426 ​ ​ 6,193 ​ ​ 46,244 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 66 Table of Contents Notes to Consolidated Financial Statements 1.
Biggest changeConsolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net income (loss) $ 11,124 $ (17,860) $ (2,388) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 51,354 44,446 40,751 Gain on insurance proceeds received for capital — — (1,463) Unrealized foreign currency (gains) loss (4,131) 6,223 (110) Amortization of deferred financing costs and debt discount 1,720 1,720 1,720 Non-cash lease expense 7,502 7,111 7,675 Change in fair value of interest rate swap 717 (808) 4,729 Deferred income taxes 2,405 (1,678) (9,685) Stock-based compensation expense 9,247 7,392 18,804 Bad debt expense 1,736 2,069 5,379 Other non-cash, net 651 1,115 16 Earnings from equity method investment (5,222) (4,060) (3,723) Distributions received from equity method investment 3,632 5,109 2,878 Provision on liability for uncertain tax positions — — (7,503) Changes in operating assets and liabilities: Trade receivables (9,223) (2,378) 13,040 Inventories 2,840 22,695 68,190 Prepaid expenses and other current assets (1,622) (1,992) (1,326) Income tax receivable (8,214) (2,981) 1,333 Other assets (244) 1,263 (4,346) Accounts payable 5,803 (4,039) (8,512) Accrued expenses and other current liabilities (6,072) (1,329) (11,938) Other long-term liabilities (573) (711) 2,848 Net cash provided by operating activities 63,430 61,307 116,369 Cash flows from investing activities: Purchases of property and equipment (25,385) (20,116) (33,189) Deposit on property purchases (12,000) — — Capital reimbursed from insurance proceeds — — 1,463 Acquisition of business, net of cash acquired (4,934) (64,527) — Net cash used in investing activities (42,319) (84,643) (31,726) Cash flows from financing activities: Payments on long-term debt borrowings (3,250) (21,250) (13,250) Proceeds from borrowings on revolving credit facility 25,000 — 48,000 Payments on revolving credit facilities (25,000) — (48,000) Repayments of finance lease obligations (823) (771) (625) Common stock withheld for taxes on restricted stock units (2,900) — — Net cash used in financing activities (6,973) (22,021) (13,875) Effect of exchange rate changes on cash 507 (1,008) (631) Net increase (decrease) in cash 14,645 (46,365) 70,137 Cash at beginning of period 56,398 102,763 32,626 Cash at end of period $ 71,043 $ 56,398 $ 102,763 Supplemental cash flow information: Cash paid for interest $ 26,990 $ 24,894 $ 25,747 Income taxes paid, net 8,180 15,475 6,990 Supplemental disclosure of non-cash investing and financing activities: Purchases of property and equipment included in accounts payable and accrued expenses $ 1,148 $ 510 $ 955 Right-of-use operating and finance lease assets obtained in exchange for lease liabilities 10,353 5,426 6,193 The accompanying notes are an integral part of these consolidated financial statements. 59 Table of Contents Notes to Consolidated Financial Statements 1.
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.
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 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.
The weighted-average estimated useful lives (in years) of the Company’s definite-lived intangible assets are as follows: ​ ​ ​ ​ ​ ​ Estimated Asset Useful Life Trade names and trademarks 9 – 25 years Technology ​ 15 years Pool designs 14 – 15 years Dealer relationships 5 – 13 years Patented technology 5 – 10 years Non-competition agreements 5 years Franchise relationships 4 years Order backlog 10 – 12 months ​ Goodwill The Company accounts for goodwill as the excess of the purchase price over the net amount of identifiable assets acquired and liabilities assumed in a business combination measured at fair value.
The weighted-average estimated useful lives (in years) of the Company’s definite-lived intangible assets are as follows: Asset Estimated Useful Life Trade names and trademarks 9 – 25 years Technology 15 years Pool designs 14 – 15 years Dealer relationships 5 – 13 years Patented technology 5 – 10 years Non-competition agreements 5 years Franchise relationships 4 years Order backlog 10 – 12 months Goodwill The Company accounts for goodwill as the excess of the purchase price over the net amount of identifiable assets acquired and liabilities assumed in a business combination measured at fair value.
Transaction gains and losses associated with the Company’s international subsidiaries, which are denominated in currencies other than the Company’s foreign entities’ functional currencies, are recognized as a component of other expense (income), net within the consolidated statements of operations.
Transaction gains and losses associated with the Company’s international subsidiaries, which are denominated in currencies other than the Company’s foreign entities’ functional currencies, are recognized as a component of other (income) expense, net within the consolidated statements of operations.
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.
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.
Preexisting relationships are effectively settled since such a relationship becomes intercompany upon the acquisition and is eliminated in post-combination financial statements. The cash consideration was funded with cash on hand. The Company incurred $0.9 million in transaction costs. The results of Coverstar Central’s operations have been included in the condensed consolidated financial statements since that date.
Preexisting relationships are effectively settled since such a relationship becomes intercompany upon the acquisition and is eliminated in post-combination financial statements. The cash consideration was funded with cash on hand. The Company incurred $0.9 million in transaction costs. The results of Coverstar Central’s operations have been included in the consolidated financial statements since that date.
Loans outstanding under the Term Loan bear interest, at the borrower’s option, at a rate per annum based on Term SOFR (as defined in the Credit Agreement), plus a margin ranging from 3.75% to 4.00%, depending on the First Lien Net Leverage Ratio, or based on the Base Rate (as defined in the Credit Agreement), plus a margin ranging from 2.75% to 3.00%, depending on the First Lien Net Leverage Ratio.
Loans outstanding under the Term Loan bear interest, at the borrower’s option, at a rate per annum based on Term SOFR (each, 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.
Segment Reporting The Company identifies operating segments based on how the chief operating decision maker manages the business, allocates resources, makes operating decisions, and evaluates operating performance. The Company conducts its business as one operating and reportable segment that designs, manufactures, and markets in-ground swimming pools, pool covers, and pool liners.
Segment Reporting The Company identifies operating segments based on how the chief operating decision maker ("CODM") manages the business, allocates resources, makes operating decisions, and evaluates operating performance. The Company conducts its business as one operating and reportable segment that designs, manufactures, and markets in-ground swimming pools, pool covers, and pool liners.
Revenue Recognition Under ASC 606, Revenue from Contracts with Customers (“ASC 606”), the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services.
Revenue Recognition Under FASB ASC 606, Revenue from Contracts with Customers (“ASC 606”), the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services.
The Company historically has concluded that it held common stock of Premier Pools & Spas and had the ability to exercise significant influence over Premier Pools & Spas but did not have a controlling financial interest.
The Company historically concluded that it held common stock of Premier Pools & Spas and had the ability to exercise significant influence over Premier Pools & Spas but did not have a controlling financial interest.
Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Latham Group, Inc. and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).
Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Latham Group, Inc. and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”).
Assets and liabilities are translated using the current rate of exchange at the balance sheet date or historical rates of exchange, as applicable. Revenue and expenses are translated using the average monthly exchange rates prevailing throughout the reporting period. The related foreign currency translation adjustments are recorded as a component of accumulated other comprehensive (income) loss in stockholders’ equity.
Assets and liabilities are translated using the current rate of exchange at the balance sheet dates or historical rates of exchange, as applicable. Revenue and expenses are translated using the average monthly exchange rates prevailing throughout the reporting period. The related foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity.
As of December 31, 2024 and 2023, substantially all of the consolidated net assets of Latham Pool Products are considered restricted net assets as defined in Rule 4-08(e)(3) of Regulation S-X. Latham Group, Inc. is able to transfer assets from Latham Pool Products in order to pay certain tax liabilities.
As of December 31, 2025 and 2024, substantially all of the consolidated net assets of Latham Pool Products are considered restricted net assets as defined in Rule 4-08(e)(3) of Regulation S-X. Latham Group, Inc. is able to transfer assets from Latham Pool Products in order to pay certain tax liabilities.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Customer rebates, cash discounts, and other sales incentives are estimated by applying the portfolio approach using the most-likely-amount method and are recorded as a reduction to revenue. Estimates are updated each reporting period and any changes are allocated to the performance obligations on the same basis as at inception.
Customer rebates and other sales incentives are estimated by applying the portfolio approach using the most-likely-amount method and are recorded as a reduction to revenue. Estimates are updated each reporting period and any changes are allocated to the performance obligations on the same basis as at inception.
Assets and liabilities measured at fair value using Level 3 inputs are based on one or more of the following valuation techniques: market approach, income approach or cost approach. There were no transfers between fair value measurement levels during the years ended December 31, 2024 and December 31, 2023.
Assets and liabilities measured at fair value using Level 3 inputs are based on one or more of the following valuation techniques: market approach, income approach or cost approach. There were no transfers between fair value measurement levels during the years ended December 31, 2025 and December 31, 2024.
As of December 31, 2024, there were no outstanding borrowings on the Revolving Credit Facility and $75.0 million was available for future borrowing. Term Loan Pursuant to the Credit Agreement, Latham Pool Products borrowed $325.0 million in term loans. The Term Loan matures on February 23, 2029.
As of December 31, 2025, there were no outstanding borrowings on the Revolving Credit Facility and $75.0 million was available for future borrowing. Term Loan Pursuant to the Credit Agreement, Latham Pool Products borrowed $325.0 million in term loans. The Term Loan matures on February 23, 2029.
RELATED PARTY TRANSACTIONS Expense Reimbursement The Company entered into a Stockholders’ Agreement with the Sponsor and Wynnchurch Capital, L.P. on April 27, 2021. The Stockholders’ Agreement requires the Company to reimburse the Sponsor and Wynnchurch Capital, L.P. the reasonable out-of-pocket costs and expenses in connection with monitoring and overseeing their investment in the Company.
RELATED PARTY TRANSACTIONS Expense Reimbursement The Company entered into a Stockholders’ Agreement with Pamplona Capital Management ("the Sponsor") and Wynnchurch Capital, L.P. on April 27, 2021. The Stockholders’ Agreement requires the Company to reimburse the Sponsor and Wynnchurch Capital, L.P. the reasonable out-of-pocket costs and expenses in connection with monitoring and overseeing their investment in the Company.
The Company accounted for the Coverstar Central 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. Inventories were valued using the comparative sales method.
The Company accounted for the Coverstar Central Acquisition using the acquisition method of accounting in accordance with FASB ASC 805, Business Combinations . This requires that the assets acquired and liabilities assumed be measured at fair value. Inventories were valued using the comparative sales method.
Depreciation and amortization expense are recognized using the straight-line method over the estimated useful lives of each respective asset category as follows: ​ ​ ​ ​ ​ ​ Estimated ​ Useful Life Building and improvements ​ 25 years Molds and dyes ​ 5 – 10 years Machinery and equipment (including computer equipment and software) ​ 3 – 10 years Furniture and fixtures ​ 5 – 7 years Vehicles ​ 5 years ​ 71 Table of Contents Leasehold improvements are amortized over the shorter of the term of the related lease or the estimated useful lives of the improvements.
Depreciation and amortization expense are recognized using the straight-line method over the estimated useful lives of each respective asset category as follows: Estimated Useful Life Building and improvements 25 years Molds and dyes 5 – 10 years Machinery and equipment (including computer equipment and software) 3 – 10 years Furniture and fixtures 5 – 7 years Vehicles 5 years Leasehold improvements are amortized over the shorter of the term of the related lease or the estimated useful lives of the improvements.
The ownership chain between Latham Pool Products and the Company consists of a series of holding companies with no material assets, liabilities, or standalone operations other than indirect equity interests in Latham Pool Products. ​ ​ 84 Table of Contents 10.
The ownership chain between Latham Pool Products and the Company consists of a series of holding companies with no material assets, liabilities, or standalone operations other than indirect equity interests in Latham Pool Products. 75 Table of Contents 10.
Each product shipped is considered to be one performance obligation. For each product shipped, the transaction price by product is specified in the purchase order. The Company recognizes revenue on the transaction price less any estimated rebates, cash discounts, or other sales incentives.
Each product shipped is considered to be one performance obligation. For each product shipped, the transaction price by product is specified in the purchase order. The Company recognizes revenue on the transaction price less any estimated rebates or other sales incentives.
To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the Company satisfies a performance obligation.
To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify 60 Table of Contents the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the Company satisfies a performance obligation.
The Term Loan contains customary mandatory prepayment provisions, including requirements to make mandatory prepayments with 50% of any excess cash flow and with 100% of the net cash proceeds from the incurrence of indebtedness not otherwise permitted to be incurred by the covenants, asset sales, and casualty and condemnation events, in each case, subject to customary exceptions.
The Term Loan contains customary mandatory prepayment provisions, including requirements to make mandatory prepayments with 50% of any excess cash flow and with 100% of the net cash proceeds from the incurrence of 74 Table of Contents indebtedness not otherwise permitted to be incurred by the covenants, asset sales, and casualty and condemnation events, in each case, subject to customary exceptions.
Transaction gains and losses associated with purchases made by Canadian subsidiaries that are denominated in currencies other than Canadian dollar are recognized as a component of other expense (income), net within the consolidated statements of operations. 58 Table of Contents Currently, our largest foreign currency exposure is that with respect to the Australian dollar and the Canadian dollar.
Transaction gains and losses associated with purchases made by Canadian subsidiaries that are denominated in currencies other than Canadian dollar are recognized as a component of other (income) expense, net within the consolidated statements of operations. Currently, our largest foreign currency exposure is that with respect to the Australian dollar and the Canadian dollar.
Construction in progress recorded as of December 31, 2024 and 2023 primarily related to an ongoing effort to increase fiberglass molds and fiberglass production capacity as well as our ongoing digital transformation project costs.
Construction in progress recorded as of December 31, 2025 and 2024 primarily related to an ongoing effort to increase fiberglass molds and fiberglass production capacity as well as our ongoing digital transformation project costs.
At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses as incurred the costs related to such legal proceedings. ​ ​ 90 Table of Contents 16.
At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses as incurred the costs related to such legal proceedings. 16.
The Company reinvests earnings of foreign operations indefinitely and, accordingly, does not provide for income taxes that could result from the remittance of such earnings. The Company has evaluated the impact of Pillar Two (as defined below) in the jurisdictions in which the Company operates and has determined no additional top up tax is required.
The Company reinvests earnings of foreign operations indefinitely and, accordingly, does not provide for income taxes that could result from the remittance of such earnings. The Company has evaluated the impact of Pillar Two in the jurisdictions in which the Company operates and has determined no additional top up tax is required.
Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company evaluates the realizability of its deferred tax assets and establishes a valuation allowance when it is more likely than not that all or a portion of the deferred tax assets will not be realized.
Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company evaluates the realizability of its deferred tax assets and establishes a valuation 65 Table of Contents allowance when it is more likely than not that all or a portion of the deferred tax assets will not be realized.
The Company does not engage in contracts greater than one year, and therefore does not have any contract costs capitalized as of December 31, 2024, and 2023.
The Company does not engage in contracts greater than one year, and therefore does not have any contract costs capitalized as of December 31, 2025, and 2024.
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.
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, which will occur no later than December 31, 2026.
Refer to Note 3 for additional detail. 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 70 Table of Contents not have a controlling financial interest.
Refer to Note 3 for additional detail. 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.
As of December 31, 2024 and 2023, the Company’s reserve for estimated slow moving products or obsolescence was $8.3 million and $9.1 million, respectively. Property and Equipment, Net Property and equipment are recorded at cost and presented net of accumulated depreciation. Property and equipment acquired through business combinations are recorded at fair value at the acquisition date.
As of December 31, 2025 and 2024, the Company’s reserve for estimated slow moving products or obsolescence was $6.9 million and $8.3 million, respectively. Property and Equipment, Net Property and equipment are recorded at cost and presented net of accumulated depreciation. Property and equipment acquired through business combinations are recorded at fair value at the acquisition date.
The January 1, 2024 supply agreement terminated effective January 16, 2025 and was replaced with a non-exclusive, preferred supplier agreement. As of December 31, 2024 and 2023, the Company’s carrying amount for the equity method investment in Premier Pools & Spas was $24.9 million and $25.9 million, respectively.
The January 1, 2024 supply agreement terminated effective January 16, 2025 and was replaced with a non-exclusive, preferred supplier agreement. As of December 31, 2025 and 2024, the Company’s carrying amount for the equity method investment in Premier Pools & Spas was $26.5 million and $24.9 million, respectively.
The Company’s allowance for bad debt as of December 31, 2024 and 2023 was $5.9 million and $7.5 million, respectively. Concentration of Credit Risk Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and trade receivables.
The Company’s allowance for bad debt as of December 31, 2025 and 2024 was $6.5 million and $5.9 million, respectively. Concentration of Credit Risk Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and trade receivables.
The Company’s Chief Executive Officer, who is the chief operating decision maker (“CODM”), reviews financial information presented on a consolidated basis for purposes of assessing financial performance and allocating resources. The Company reports consolidated net income (loss), as management believes that is the measure most consistent with the measurement principles in the Company’s consolidated financial statements.
The Company’s Chief Executive Officer, who is the CODM, reviews financial information presented on a consolidated basis for purposes of assessing financial performance and allocating resources. The Company reports consolidated net income (loss), as management believes that is the measure most consistent with the measurement principles in the Company’s consolidated financial statements.
The Company’s Chief Executive Officer, who is the chief operating decision maker, reviews financial information presented on a consolidated basis for purposes of assessing financial performance and allocating resources. Income Taxes The Company accounts for income taxes using the asset and liability method.
The Company’s Chief Executive Officer, who is the CODM, reviews financial information presented on a consolidated basis for purposes of assessing financial performance and allocating resources. Income Taxes The Company accounts for income taxes using the asset and liability method.
A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company does not have material finance leases.
The Company determines if an arrangement is a lease at inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company does not have material finance leases.
The Company had less than $0.1 million in transactions with the Sponsor or Wynnchurch Capital, L.P. during the years ended December 31, 2024, 2023 and 2022. 95 Table of Contents 20. SEGMENT REPORTING The Company conducts business as one operating and reportable segment that designs, manufactures, and markets in-ground swimming pools, pool covers, and pool liners.
The Company had less than $0.1 million in transactions with the Sponsor or Wynnchurch Capital, L.P. during the years ended December 31, 2025, 2024 and 2023. 20. SEGMENT REPORTING The Company conducts business as one operating and reportable segment that designs, manufactures, and markets in-ground swimming pools, pool covers, and pool liners.
The amendments should be applied retrospectively to all prior periods presented in the financial statements, with early adoption permitted. The Company is currently evaluating ASU 2024-03 and its potential impact on the consolidated financial statements.
The amendments should be applied retrospectively to all prior periods presented in the financial statements, with early adoption permitted. The Company is currently evaluating ASU 2025-11 and its potential impact on the consolidated financial statements.
LEASES The Company leases vehicles, manufacturing facilities, office space, land, and equipment under operating leases. As of December 31, 2024, our operating leases substantially have remaining terms of one year to eleven years, some of which include options to extend and/or terminate the leases.
LEASES The Company leases manufacturing facilities, office space, land, and certain vehicles under operating leases. The Company also leases certain vehicles and equipment under finance leases. As of December 31, 2025, our operating leases substantially have remaining terms of one year to eleven years, some of which include options to extend and/or terminate the leases.
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 December 31, 2024, the unamortized debt issuance costs and discount on the Term Loan were $3.6 million and $2.9 million, respectively.
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 December 31, 2025, the unamortized debt issuance costs and discount on the Term Loan were $2.8 million and $2.2 million, respectively.
To meet our working capital needs, we borrow periodically on our Revolving Credit Facility under the Credit Agreement. As of December 31, 2024, we had outstanding borrowings of $288.1 million face value under our Term Loan and no borrowings on the Revolving Credit Facility. The Term Loan and Revolving Credit Facility bear interest at variable rates.
To meet our working capital needs, we borrow periodically on our Revolving Credit Facility under the Credit Agreement. As of December 31, 2025, we had outstanding borrowings of $284.8 million face value under our Term Loan and no borrowings on the Revolving Credit Facility. The Term Loan and Revolving Credit Facility bear interest at variable rates.
In such a case, the decline in value below the carrying amount of its equity method investment is recognized in the consolidated statements of operations in the period the impairment occurs. Inventories, Net Inventories, primarily raw materials and finished goods, are stated at the lower of cost or net realizable value. Cost is determined under the first-in, first-out method.
In such a case, the decline in value below the carrying amount of its equity method investment is recognized in the consolidated statements of operations in the period the impairment occurs. 63 Table of Contents Inventories, Net Inventories, primarily raw materials and finished goods, are stated at the lower of cost or net realizable value.
We believe that our audits provide a reasonable basis for our opinion. ​ /s/ Deloitte & Touche LLP Hartford, Connecticut March 5, 2025 ​ We have served as the Company’s auditor since 2020. ​ ​ ​ ​ ​ 61 Table of Contents Latham Group, Inc.
We believe that our audits provide a reasonable basis for our opinion. /s/ Deloitte & Touche LLP Hartford, Connecticut March 4, 2026 We have served as the Company’s auditor since 2020. 54 Table of Contents Latham Group, Inc.
During the fiscal year ended December 31, 2024, the Company made a payment of $18.0 million in addition to the required annual payments $3.3 million. No additional payments are expected in the year ended December 31, 2025. Outstanding borrowings as of December 31, 2024 were $281.5 million, net of discount and debt issuance costs of $6.5 million.
During the fiscal year ended December 31, 2024, the Company made a payment of $18.0 million in addition to the required annual payments $3.3 million. No additional payments were made in the year ended December 31, 2025. Outstanding borrowings as of December 31, 2025 were $279.8 million, net of unamortized discount and debt issuance costs of $5.0 million.
Refer to Note 5 for additional detail. ​ Debt Maturities ​ Principal payments due on the outstanding debt in the next five fiscal years, excluding any potential payments based on excess cash flow levels, are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ending ​ Term Loan 2025 $ 3,250 2026 ​ 3,250 2027 ​ 3,250 2028 ​ 3,250 2029 ​ ​ 275,063 ​ ​ $ 288,063 ​ Guarantees ​ The obligations under the Credit Agreement are guaranteed by certain wholly owned subsidiaries (the “Guarantors”) of the Company that are party to that certain security agreement, which was executed in connection with the Credit Agreement.
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 levels, are as follows (in thousands): Fiscal Year Ending Term Loan 2026 $ 3,250 2027 3,250 2028 3,250 2029 275,063 $ 284,813 Guarantees The obligations under the Credit Agreement are guaranteed by certain wholly owned subsidiaries (the “Guarantors”) of the Company that are party to that certain security agreement, which was executed in connection with the Credit Agreement.
PRODUCT WARRANTIES The warranty reserve activity consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ December 31, ​ ​ 2024 2023 ​ 2022 Balance at the beginning of the fiscal year ​ ​ $ 3,161 ​ $ 3,990 ​ $ 4,909 Adjustments to reserve ​ ​ 2,615 ​ 5,319 ​ 4,567 Less: Settlements made (in cash or in kind) ​ ​ (3,129) ​ (6,148) ​ (5,486) Balance at the end of the fiscal year ​ ​ $ 2,647 ​ $ 3,161 ​ $ 3,990 ​ ​ 12.
PRODUCT WARRANTIES The warranty reserve activity consisted of the following (in thousands): Year Ended December 31, 2025 2024 2023 Balance at the beginning of the fiscal year $ 2,647 $ 3,161 $ 3,990 Adjustments to reserve 3,834 2,615 5,319 Less: Settlements made (in cash or in kind) (3,132) (3,129) (6,148) Balance at the end of the fiscal year $ 3,349 $ 2,647 $ 3,161 12.
The commitment fee is due and payable quarterly in arrears and is, initially, 0.375% per annum and will, thereafter, accrue at a rate per annum ranging from 0.25% to 0.50%, depending on the First Lien Net Leverage Ratio (as defined in the Credit Agreement, the “First Lien Net Leverage Ratio”). Borrowings under the Revolving Credit Facility are due at maturity.
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). Borrowings under the Revolving Credit Facility are not subject to amortization and are due at maturity.
The Company’s policy is to classify interest and penalties related to unrecognized tax benefits as a component of income tax expense (benefit) within the consolidated statements of operations. The Company had $0.0 million of 73 Table of Contents accrued interest and no accrued penalties as of December 31, 2024 and December 31, 2023.
The Company’s policy is to classify interest and penalties related to unrecognized tax benefits as a component of income tax expense (benefit) within the consolidated statements of operations. The Company had no accrued interest and no accrued penalties as of December 31, 2025 and December 31, 2024.
The Company recorded its interest in net earnings of Premier Pools & Spas of $4.1 million and $3.7 million for the years ended December 31, 2024 and 2023, respectively, which included basis difference adjustments of $0.2 million and $0.2 million, respectively. ​ 5.
The Company recorded its interest in net earnings of Premier Pools & Spas of $5.2 million and $4.1 million for the years ended December 31, 2025 and 2024, respectively, which included basis difference adjustments of $0.2 million and $0.2 million, respectively. 70 Table of Contents 5.
GOODWILL AND INTANGIBLE ASSETS, NET Goodwill The following table presents the changes in the carrying value of goodwill during the years ended December 31, 2024 and 2023 (in thousands): ​ ​ ​ ​ ​ ​ Amount Balance as of December 31, 2022 ​ $ 131,383 Foreign currency translation adjustment ​ (20) Balance as of December 31, 2023 ​ ​ 131,363 Acquisition ​ ​ 22,047 Foreign currency translation adjustment ​ ​ (785) Balance as of December 31, 2024 ​ $ 152,625 ​ The Company performed an annual test for goodwill impairment in the fourth quarter of the year ended December 31, 2024 in accordance with Step 0 of ASC 350 and determined that goodwill was not impaired.
GOODWILL AND INTANGIBLE ASSETS, NET Goodwill The following table presents the changes in the carrying value of goodwill during the years ended December 31, 2025 and 2024 (in thousands): Amount Balance as of December 31, 2023 $ 131,363 Acquisition 22,047 Foreign currency translation adjustment (785) Balance as of December 31, 2024 152,625 Acquisition 1,947 Foreign currency translation adjustment 617 Balance as of December 31, 2025 $ 155,189 The Company performed an annual test for goodwill impairment in the fourth quarter of the years ended December 31, 2025 and December 31, 2024 in accordance with Step 0 of FASB ASC 350, Intangibles - Goodwill and Other and determined that goodwill was not impaired.
(Parent Company Only) Condensed Statement of Cash Flows (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2024 2023 2022 Cash flows from operating activities: ​ ​ ​ Net loss ​ $ (17,860) ​ $ (2,388) ​ $ (5,694) Adjustments to reconcile net loss to net cash provided by operating activities: ​ ​ ​ Equity in net loss of subsidiary ​ 17,860 ​ 2,388 ​ 5,694 Net cash provided by operating activities ​ — ​ — ​ — Cash flows from investing activities: ​ ​ ​ Distribution from subsidiary ​ ​ — ​ ​ — ​ ​ 23,038 Net cash provided by investing activities ​ — ​ — ​ 23,038 Cash flows from financing activities: ​ ​ ​ Proceeds from issuance of common stock ​ ​ — ​ ​ — ​ ​ 257,663 Repurchase and retirement of common stock ​ ​ — ​ ​ — ​ ​ (280,701) Net cash used in financing activities ​ — ​ — ​ (23,038) Net increase in cash ​ — ​ — ​ — Cash at beginning of period ​ — ​ — ​ — Cash at end of period ​ $ — ​ $ — ​ $ — ​ The accompanying notes are an integral part of these condensed financial statements. ​ 101 Table of Contents Notes to Condensed Financial Statements of Registrant (Parent Company Only) 1.
(Parent Company Only) Condensed Statement of Cash Flows (in thousands) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net income (loss) $ 11,124 $ (17,860) $ (2,388) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Equity in net (income) loss of subsidiary (11,124) 17,860 2,388 Net cash provided by operating activities — — — Cash flows from investing activities: Distribution from subsidiary — — — Net cash provided by investing activities — — — Cash flows from financing activities: Proceeds from issuance of common stock — — — Repurchase and retirement of common stock — — — Net cash used in financing activities — — — Net increase in cash: — — — Cash at beginning of period — — — Cash at end of period $ — $ — $ — The accompanying notes are an integral part of these condensed financial statements. 93 Table of Contents Notes to Condensed Financial Statements of Registrant (Parent Company Only) 1.
The following table sets forth the carrying amount and fair value of the term loans (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ 2024 ​ 2023 ​ ​ ​ Carrying ​ Estimated ​ Carrying ​ Estimated ​ ​ Value Fair Value Value Fair Value Term Loan ​ ​ $ 281,521 ​ $ 276,946 ​ $ 301,201 ​ $ 289,153 ​ 79 Table of Contents Interest rate swap The Company estimates the fair value of the interest rate swap on a quarterly basis using Level 2 inputs, including the forward SOFR curve.
The following table sets forth the carrying amount and fair value of the term loans (in thousands): December 31, 2025 2024 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Term Loan $ 279,841 $ 279,841 $ 281,521 $ 276,946 Interest rate swap The Company estimates the fair value of the interest rate swap on a quarterly basis using Level 2 inputs, including the forward SOFR curve.
Inventory costs include all costs directly attributable to the products, including all manufacturing overhead, and excludes costs to distribute. The Company periodically reviews its inventory for slow moving or obsolete items and writes down the related products to estimated net realizable value.
Cost is determined under the first-in, first-out method. Inventory costs include all costs directly attributable to the products, including all manufacturing overhead, and excludes costs to distribute. The Company periodically reviews its inventory for slow moving or obsolete items and writes down the related products to estimated net realizable value.
These fair value estimates will be reevaluated and adjusted, if needed, during the measurement period of up to one year from the Acquisition Date, and recorded as adjustments to goodwill. ​ 76 Table of Contents The following summarizes the allocation for the Company’s acquisition of Coverstar Central as of December 31, 2024: ​ ​ ​ ​ (in thousands) August 2, 2024 Total consideration ​ $ 71,516 Allocation: ​ Cash ​ 2,084 Trade receivables ​ 7,020 Inventories ​ 4,293 Prepaid expenses and other current assets ​ 53 Property and equipment ​ 344 Intangible assets ​ 38,220 Deferred tax assets ​ 43 Total assets acquired, excluding goodwill ​ 52,057 Accounts payable ​ 131 Accrued expenses and other current liabilities ​ 2,457 Total liabilities assumed ​ 2,588 Total fair value of net assets acquired, excluding goodwill ​ 49,469 Goodwill ​ $ 22,047 ​ The excess of the total consideration over the fair value of the identifiable assets acquired and the liabilities assumed in the acquisition was allocated to goodwill in the amount of $22.0 million.
These fair value estimates were evaluated during the measurement period of up to one year from the Acquisition Date, and are no longer subject to change. 68 Table of Contents The following summarizes the purchase price allocation for the Company’s acquisition of Coverstar Central: (in thousands) August 2, 2024 Total consideration $ 71,516 Allocation: Cash 2,084 Trade receivables 7,020 Inventories 4,293 Prepaid expenses and other current assets 53 Property and equipment 344 Intangible assets 38,220 Deferred tax assets 43 Total assets acquired, excluding goodwill 52,057 Accounts payable 131 Accrued expenses and other current liabilities 2,457 Total liabilities assumed 2,588 Total fair value of net assets acquired, excluding goodwill 49,469 Goodwill $ 22,047 The excess of the total consideration over the fair value of the identifiable assets acquired and the liabilities assumed in the acquisition was allocated to goodwill in the amount of $22.0 million.
LONG-TERM DEBT The components of the Company’s outstanding debt obligations consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 2023 Term Loan ​ ​ $ 288,063 ​ $ 309,313 Revolving Credit Facility ​ ​ ​ — ​ ​ — Less: Unamortized discount and debt issuance costs ​ ​ (6,542) ​ (8,112) Total debt ​ ​ 281,521 ​ 301,201 Less: Current portion of long-term debt ​ ​ (3,250) ​ (21,250) Total long-term debt ​ ​ $ 278,271 ​ $ 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.
LONG-TERM DEBT The components of the Company’s outstanding debt obligations consisted of the following (in thousands): December 31, 2025 2024 Term Loan $ 284,813 $ 288,063 Revolving Credit Facility — — Less: Unamortized discount and debt issuance costs (4,972) (6,542) Total debt 279,841 281,521 Less: Current portion of long-term debt (3,250) (3,250) Total long-term debt $ 276,591 $ 278,271 On February 23, 2022, Latham Pool Products and certain subsidiary guarantors entered into a credit and guaranty 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.
The following table summarizes the Company’s stock-based compensation expense (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ December 31, ​ ​ ​ 2024 ​ 2023 2022 ​ Cost of sales ​ $ — ​ $ 81 ​ $ 3,762 ​ Selling, general, and administrative ​ 7,392 ​ 18,723 ​ 46,872 ​ ​ ​ $ 7,392 ​ $ 18,804 ​ $ 50,634 ​ ​ The recognized income tax benefit related to stock-based compensation was $0.6 million, $0.5 million and $0.8 million for the years ended December 31, 2024, December 31, 2023, and December 31, 2022 respectively.
The following table summarizes the Company’s stock-based compensation expense (in thousands): Year Ended December 31, 2025 2024 2023 Cost of sales $ — $ — $ 81 Selling, general, and administrative 9,247 7,392 18,723 $ 9,247 $ 7,392 $ 18,804 83 Table of Contents The recognized income tax benefit related to stock-based compensation was $0.7 million, $0.6 million and $0.5 million for the years ended December 31, 2025, 2024 and 2023, respectively.
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. 67 Table of Contents The Company leases vehicles, manufacturing facilities, office space, land, and equipment under operating leases. The Company determines if an arrangement is a lease at inception.
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 under operating leases. The Company also leases certain vehicles and equipment under finance leases.
(Parent Company Only) Condensed Balance Sheets (in thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Assets ​ ​ ​ Investment in subsidiary ​ $ 387,222 ​ $ 399,200 Total assets ​ $ 387,222 ​ $ 399,200 Liabilities and Stockholders’ Equity ​ ​ Total liabilities ​ $ — ​ $ — Stockholders’ Equity ​ ​ Preferred stock, $0.0001 par value; 100,000,000 shares authorized as of both December 31, 2024 and December 31, 2023; no shares issued and outstanding as of both December 31, 2024 and December 31, 2023 ​ ​ — ​ ​ — Common stock, $0.0001 par value; 900,000,000 shares authorized as of December 31, 2024 and December 31, 2023; 115,764,839 and 114,871,782 shares issued and outstanding , as of December 31, 2024 and December 31, 2023, respectively ​ 12 ​ 11 Additional paid-in capital ​ 467,076 ​ 459,684 Accumulated deficit ​ (74,816) ​ (56,956) Accumulated other comprehensive loss ​ (5,050) ​ (3,539) Total stockholders’ equity ​ 387,222 ​ 399,200 Total liabilities and stockholders’ equity ​ $ 387,222 ​ $ 399,200 ​ The accompanying notes are an integral part of these condensed financial statements. ​ 98 Table of Contents Latham Group, Inc.
(Parent Company Only) Condensed Balance Sheets (in thousands, except share and per share data) December 31, 2025 2024 Assets Investment in subsidiary $ 405,861 $ 387,222 Total assets $ 405,861 $ 387,222 Liabilities and Stockholders’ Equity Total liabilities $ — $ — Stockholders’ Equity Preferred stock, $0.0001 par value; 100,000,000 shares authorized as of both December 31, 2025 and December 31, 2024; no shares issued and outstanding as of both December 31, 2025 and December 31, 2024 — — Common stock, $0.0001 par value; 900,000,000 shares authorized as of December 31, 2025 and December 31, 2024; 116,766,927 and 115,764,839 shares issued and outstanding, as of December 31, 2025 and December 31, 2024, respectively 12 12 Additional paid-in capital 473,423 467,076 Accumulated deficit (63,692) (74,816) Accumulated other comprehensive loss (3,882) (5,050) Total stockholders’ equity 405,861 387,222 Total liabilities and stockholders’ equity $ 405,861 $ 387,222 The accompanying notes are an integral part of these condensed financial statements. 90 Table of Contents Latham Group, Inc.
The Company does not have any federal audits in process. Examinations in material jurisdictions or changes in laws, rules, regulations, or interpretations by local taxing authorities could result in impacts to tax years open under statute or to foreign operating structures currently in place.
Examinations in material jurisdictions or changes in laws, rules, regulations or interpretations by local taxing authorities could result in impacts to tax years open under statute or to foreign operating structures currently in place.
(2) Other selling, general and administrative expense includes total selling, general and administrative expense (as presented in the statements of operations) excluding depreciation, amortization, stock-based compensation, strategic initiative costs, acquisition and integration related costs, and Odessa fire costs. (3) inclusive of finance lease amortization.
(2) Other selling, general and administrative expense includes total selling, general and administrative expense (as presented in the statements of operations) excluding depreciation, amortization, stock-based compensation, strategic initiative costs, acquisition and integration related costs, and Odessa fire costs. (3) Inclusive of finance lease amortization. (4) Represents fees paid to external consultants and other expenses for our strategic initiatives.
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.
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.
For all other entities, the amendments are effective for fiscal years beginning after December 15, 2025. The amendments should be applied retrospectively to all prior periods presented in the financial statements, with early adoption permitted. The Company is currently evaluating ASU 2024-01 and its potential impact on the condensed consolidated financial statements.
ASU 2024-03 is effective for public business entities for fiscal 67 Table of Contents years beginning after December 15, 2026. The amendments should be applied retrospectively to all prior periods presented in the financial statements, with early adoption permitted. The Company is currently evaluating ASU 2024-03 and its potential impact on the consolidated financial statements.
(Parent Company Only) Condensed Statements of Operations (in thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2024 2023 2022 Equity in net loss of subsidiary ​ $ (17,860) ​ $ (2,388) ​ $ (5,694) Net loss attributable to common stockholders ​ $ (17,860) ​ $ (2,388) ​ $ (5,694) Net loss per share ​ ​ ​ Net loss per share attributable to common stockholders – basic and diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ (0.15) ​ $ (0.02) ​ $ (0.05) Diluted ​ $ (0.15) ​ $ (0.02) ​ $ (0.05) Weighted-average common shares outstanding – basic and diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ ​ 115,434,828 ​ ​ 112,899,586 ​ ​ 113,245,421 Diluted ​ 115,434,828 ​ 112,899,586 ​ 113,245,421 ​ The accompanying notes are an integral part of these condensed financial statements. ​ 99 Table of Contents Latham Group, Inc.
(Parent Company Only) Condensed Statements of Operations (in thousands, except share and per share data) Year Ended December 31, 2025 2024 2023 Equity in net income (loss) of subsidiary $ 11,124 $ (17,860) $ (2,388) Net income (loss) attributable to common stockholders $ 11,124 $ (17,860) $ (2,388) Net income (loss) per share Net income (loss) per share attributable to common stockholders – basic and diluted Basic $ 0.10 $ (0.15) $ (0.02) Diluted $ 0.09 $ (0.15) $ (0.02) Weighted-average common shares outstanding – basic and diluted Basic 116,424,673 115,434,828 112,899,586 Diluted 119,822,088 115,434,828 112,899,586 The accompanying notes are an integral part of these condensed financial statements. 91 Table of Contents Latham Group, Inc.
NET LOSS PER SHARE Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 2023 2022 Numerator: ​ ​ ​ ​ ​ ​ ​ Net loss attributable to common stockholders ​ ​ $ (17,860) ​ $ (2,388) ​ $ (5,694) Denominator: ​ ​ ​ ​ Weighted-average common shares outstanding ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ ​ ​ 115,434,828 ​ ​ 112,899,586 ​ ​ 113,245,421 Diluted ​ ​ ​ 115,434,828 ​ ​ 112,899,586 ​ ​ 113,245,421 Net loss per share attributable to common stockholders: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ ​ $ (0.15) ​ $ (0.02) ​ $ (0.05) Diluted ​ ​ $ (0.15) ​ $ (0.02) ​ $ (0.05) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table includes the number of shares that may be dilutive common shares in the future that were not included in the computation of diluted net loss per share because the effect was anti-dilutive: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 2023 2022 Restricted stock awards ​ ​ 10,722 697,822 1,904,037 Restricted stock units ​ ​ 22,275 ​ 188,548 ​ 202,622 Stock options ​ ​ 1,410,382 1,702,316 1,757,336 Stock appreciation rights ​ ​ 326,395 ​ 491,386 ​ — Performance stock units ​ ​ 20,781 ​ — ​ — ​ ​ 19.
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): Year Ended December 31, 2025 2024 2023 Numerator: Net income (loss) attributable to common stockholders $ 11,124 $ (17,860) $ (2,388) Denominator: Weighted-average common shares outstanding Basic 116,424,673 115,434,828 112,899,586 Diluted 119,822,088 115,434,828 112,899,586 Net income (loss) per share attributable to common stockholders: Basic $ 0.10 $ (0.15) $ (0.02) Diluted $ 0.09 $ (0.15) $ (0.02) 86 Table of Contents The following table includes the number of shares that may be dilutive common shares in the future that were not included in the computation of diluted net loss per share because the effect was anti-dilutive: Year Ended December 31, 2025 2024 2023 Restricted stock awards — 10,722 697,822 Restricted stock units 192,039 22,275 188,548 Stock options 1,150,250 1,410,382 1,702,316 Stock appreciation rights — 326,395 491,386 Performance stock units 99,311 20,781 — 19.
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.
The 2023 Interest Rate Swap had an effective date of May 18, 2023 and a termination date of May 18, 2026. Under the terms of the 2023 Interest Rate Swap, the Company fixed its SOFR borrowing rate at 4.3725% on a notional amount of $161.0 million.
Consolidated Statements of Comprehensive Loss (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 2022 Net loss ​ $ (17,860) ​ $ (2,388) ​ $ (5,694) Other comprehensive loss, net of tax: ​ ​ ​ Foreign currency translation adjustments ​ (1,511) ​ (6) ​ (3,903) Total other comprehensive loss, net of tax ​ (1,511) ​ (6) ​ (3,903) Comprehensive loss ​ $ (19,371) ​ $ (2,394) ​ $ (9,597) ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 64 Table of Contents Latham Group, Inc.
Consolidated Statements of Comprehensive Income (Loss) (in thousands) Year Ended December 31, 2025 2024 2023 Net income (loss) $ 11,124 $ (17,860) $ (2,388) Other comprehensive income (loss), net of tax: Foreign currency translation adjustments 1,168 (1,511) (6) Total other comprehensive income (loss), net of tax 1,168 (1,511) (6) Comprehensive income (loss) $ 12,292 $ (19,371) $ (2,394) The accompanying notes are an integral part of these consolidated financial statements. 57 Table of Contents Latham Group, Inc.
(Parent Company Only) Condensed Statements of Comprehensive Loss (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2024 2023 2022 Net loss ​ $ (17,860) ​ $ (2,388) ​ $ (5,694) Equity in other comprehensive loss of subsidiary ​ (1,511) ​ (6) ​ (3,903) Comprehensive loss ​ $ (19,371) ​ $ (2,394) ​ $ (9,597) ​ The accompanying notes are an integral part of these condensed financial statements. ​ 100 Table of Contents Latham Group, Inc.
(Parent Company Only) Condensed Statements of Comprehensive Income (Loss) (in thousands) Year Ended December 31, 2025 2024 2023 Net income (loss) $ 11,124 $ (17,860) $ (2,388) Equity in other comprehensive income (loss) of subsidiary 1,168 (1,511) (6) Comprehensive income (loss) $ 12,292 $ (19,371) $ (2,394) The accompanying notes are an integral part of these condensed financial statements. 92 Table of Contents Latham Group, Inc.
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 consolidated balance sheet and are being amortized over the life of the Revolving Credit Facility. The Company is required to meet certain financial covenants, including maintaining specific liquidity measurements.
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 consolidated balance sheet and are being amortized over the life of the Revolving Credit Facility.
(6) Represents costs related to a cost reduction plan that includes severance and other costs for our executive management changes and additional costs related to our cost reduction plans, which include further actions to reduce our manufacturing overhead by reducing headcount in addition to facility shutdowns. 96 Table of Contents (7) Represents costs incurred and insurance recoveries related to a production facility fire in Odessa, Texas. 21.
(6) Represents costs related to a cost reduction plan that includes severance and other costs for our executive management changes and additional costs related to our cost reduction plans, which include further actions to reduce our manufacturing overhead by reducing headcount in addition to facility shutdowns.
During the year ended December 31, 2024, Premier Pools & Spas paid the Company dividends of $5.1 million that are presented on the consolidated statement of cash flows as distribution received from equity method investment.
Premier Pools & Spas paid the Company dividends that are presented on the consolidated statements of cash flows as distribution received from equity method investment of $3.6 million and $5.1 million for the years ended December 31, 2025 and 2024, respectively.
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.
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.
As of December 31, 2024 and 2023, the Company’s interest rate swap was a liability of $0.4 million and $1.2 million, respectively, which was recorded within other long-term liabilities on the consolidated balance sheets. ​ 6.
As of December 31, 2025 and 2024, the Company’s interest rate swap was a liability of $1.1 million and $0.4 million, respectively, which was recorded within other long-term liabilities on the consolidated balance sheets. See Note 9 for further detail. 71 Table of Contents 6.
These condensed parent company financial statements have been prepared using the same accounting principles and policies described in the notes to the condensed financial statements, with the only exception being that the parent company accounts for its subsidiary using the equity method. 2.
These condensed parent company financial statements have been prepared using the same accounting principles and policies described in Note 2 of the consolidated financial statements, with the only exception being that the parent company accounts for its subsidiary using the equity method compared to the consolidation method employed by Latham Pool Products with its subsidiaries. 2.
Foreign Currency Translation and Foreign Currency Transactions The financial statements of the Company’s foreign operations are denominated in local currency and are then translated to U.S. dollars. Assets and liabilities are translated using the current rate of exchange at the balance sheet dates or historical rates of exchange, as applicable.
Foreign Currency Risk Our foreign operations are denominated in local currency, which is the functional currency and is then translated to U.S. dollars. Assets and liabilities are translated using the current rate of exchange at the balance sheet date or historical rates of exchange, as applicable.
In the prior year, there was a valuation allowance for the Company's capital loss carryforward deferred tax asset which was reversed in the current year because the capital loss carryforward expired.
During the year ended December 31, 2023, there was a valuation allowance for the Company's capital loss carryforward deferred tax asset which was reversed in 2024 because the capital loss carryforward expired.
The Company allocated a portion of the total consideration to specific intangible asset categories as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value ​ Amortization Definite-lived intangible assets: (in thousands) Period (in years) Dealer relationships ​ $ 37,800 13 Order backlog ​ 420 1 ​ The following are the incremental net sales and incremental net loss from Coverstar Central included in the Company’s results from the Acquisition Date through December 31, 2024: ​ ​ ​ ​ ​ (in thousands) Amount Net sales ​ $ 8,236 Net loss ​ $ (1,332) ​ Pro Forma Financial Information (Unaudited) The following pro forma financial information presents the statements of operations of the Company with Coverstar Central as if the acquisition occurred on January 1, 2022.
The Company allocated a portion of the total consideration to specific intangible asset categories as follows: Definite-lived intangible assets: Fair Value (in thousands) Amortization Period (in years) Dealer relationships $ 37,800 13 Order backlog 420 1 Pro Forma Financial Information (Unaudited) The following pro forma financial information presents the statements of operations of the Company with Coverstar Central as if the acquisition occurred on January 1, 2023.
Tax years and tax periods from June 30, 2021 through present are currently open for examination in Canada. Tax years and tax periods from June 30, 2020 through present are currently open for examination in Australia.
Tax years and tax periods from June 30, 2021 through present are currently open for examination in Australia. Tax years and tax periods from March 31, 2021 through present are currently open for examination in New Zealand. 15.
If the estimated fair value of the reporting unit exceeds the carrying amount, the Company considers that goodwill is not impaired. If the carrying value exceeds estimated fair value, there is an impairment of goodwill and an impairment loss is recorded.
The Company may also choose to bypass the qualitative assessment and perform the quantitative test. If the estimated fair value of the reporting unit exceeds the carrying amount, the Company considers that goodwill is not impaired. If the carrying value exceeds estimated fair value, there is an impairment of goodwill and an impairment loss is recorded.

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