What changed in this filing

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Item 1. Financial Statements

2023-08-08 compared with 2023-05-09 · 133 added, 105 removed, 394 unchanged (38% of the section changed)

3 unchanged sentences

Condensed Consolidated Statements of Operations

Condensed Consolidated Statements of Comprehensive Loss

Condensed Consolidated Statements of Comprehensive Income (Loss)

Condensed Consolidated Statements of Stockholders’ Equity

32 unchanged sentences

Preferred stock, $ 0.0001 par value;

100,000,000 shares authorized as of both April 1, 2023 and December 31, 2022;

no shares issued and outstanding as of both April 1, 2023 and December 31, 2022

100,000,000 shares authorized as of both July 1, 2023 and December 31, 2022;

no shares issued and outstanding as of both July 1, 2023 and December 31, 2022

Common stock, $ 0.0001 par value;

900,000,000 shares authorized as of April 1, 2023 and December 31, 2022;

114,690,053 and 114,667,975 shares issued and outstanding , as of April 1, 2023 and December 31, 2022, respectively

900,000,000 shares authorized as of July 1, 2023 and December 31, 2022;

114,734,756 and 114,667,975 shares issued and outstanding , as of July 1, 2023 and December 31, 2022, respectively

Additional paid-in capital

8 unchanged sentences

Fiscal Quarter Ended

April 1, 2023

April 2, 2022

Two Fiscal Quarters Ended

Cost of sales

1 unchanged sentence

Underwriting fees related to offering of common stock

(Loss) income from operations

Income from operations

Other expense (income):

Interest expense

Interest expense, net

Loss on extinguishment of debt

Other expense (income), net

Other (income) expense, net

Total other expense, net

Earnings from equity method investment

(Loss) income before income taxes

Income tax (benefit) expense

Net loss per share attributable to common stockholders:

Income (loss) before income taxes

Income tax expense

Net income (loss)

Net income (loss) per share attributable to common stockholders:

Weighted-average common shares outstanding – basic and diluted

1 unchanged sentence

Latham Group, Inc.

Condensed Consolidated Statements of Comprehensive Loss

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

Fiscal Quarter Ended

April 1, 2023

April 2, 2022

Other comprehensive (loss) income, net of tax:

Two Fiscal Quarters Ended

Net income (loss)

Other comprehensive loss, net of tax:

Foreign currency translation adjustments

Total other comprehensive (loss) income, net of tax

Comprehensive loss

Total other comprehensive loss, net of tax

Comprehensive income (loss)

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

4 unchanged sentences

Stockholders'

Income (Loss)

Balances at December 31, 2021

8 unchanged sentences

Balances at April 2, 2022

Foreign currency translation adjustments

Repurchase and retirement of common stock under repurchase program

( 2,026,231 )

Issuance of common stock upon release of restricted stock units

Stock-based compensation expense

Balances at July 2, 2022

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

9 unchanged sentences

Balances at April 1, 2023

Foreign currency translation adjustments

Retirement of restricted stock

Issuance of common stock upon release of restricted stock units

Stock-based compensation expense

Balances at July 1, 2023

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

2 unchanged sentences

(in thousands)

Fiscal Quarter Ended

Two Fiscal Quarters Ended

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization

5 unchanged sentences

Loss on extinguishment of debt

Bad debt expense

Other non-cash, net

7 unchanged sentences

Other long-term liabilities

Net cash used in operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities :

Purchases of property and equipment

Proceeds from the sale of property and equipment

Acquisitions of businesses, net of cash acquired

Net cash used in investing activities

3 unchanged sentences

Proceeds from borrowings on revolving credit facilities

Payments on revolving credit facility

Payments on revolving credit facilities

Deferred financing fees paid

2 unchanged sentences

Repurchases and retirements of common stock

Net cash provided by financing activities

Net cash (used in) provided by financing activities

Effect of exchange rate changes on cash

28 unchanged sentences

The unaudited condensed consolidated balance sheet at December 31, 2022 was derived from audited financial statements but does not include all disclosures required by GAAP.

The accompanying unaudited condensed consolidated financial statements as of April 1, 2023 and for the fiscal quarters ended April 1, 2023 and April 2, 2022 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements.

The accompanying unaudited condensed consolidated financial statements as of July 1, 2023 and for the fiscal and two fiscal quarters ended July 1, 2023 and July 2, 2022 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements.

Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

1 unchanged sentence

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of these condensed consolidated financial statements, have been included.

The Company’s results of operations for the fiscal quarter ended April 1, 2023 are not necessarily indicative of the results of operations that may be expected for the fiscal year ending December 31, 2023.

The Company’s results of operations for the fiscal quarter and two fiscal quarters ended July 1, 2023 are not necessarily indicative of the results of operations that may be expected for the fiscal year ending December 31, 2023.

Use of Estimates

7 unchanged sentences

Although the Company generally has demand for its products throughout the fiscal year, its business is seasonal and weather is one of the principal external factors affecting the business.

Historically, net sales and net income are highest during the second and

third fiscal quarters, representing the peak months of swimming pool use, pool installation, and remodeling and repair activities.

Historically, net sales and net income are highest during the second and third fiscal quarters, representing the peak months of swimming pool use, pool installation, and remodeling and repair activities.

Severe weather may also affect net sales in all periods.

36 unchanged sentences

market approach, income approach or cost approach.

There were no transfers between fair value measurement levels during the fiscal quarter ended April 1, 2023 or April 2, 2022.

There were no transfers between fair value measurement levels during the two fiscal quarters ended July 1, 2023 or July 2, 2022.

Assets and liabilities measured at fair value on a nonrecurring basis

7 unchanged sentences

The following table sets forth the carrying amount and fair value of its term loan (in thousands):

April 1, 2023

December 31, 2022

2 unchanged sentences

The fair value is estimated by comparing (i) the present value of all future monthly fixed rate payments versus (ii) the variable payments based on the forward SOFR curve.

As of April 1, 2023 and December 31, 2022, the net fair value of the Company’s interest rate swaps was a $ 1.4 million liability and a $ 3.5 million asset, respectively, which were recorded within other long-term liabilities and other assets on the condensed consolidated balance sheets, respectively.

As of July 1, 2023 and December 31, 2022, the net fair value of the Company’s interest rate swaps was an asset balance of $ 0.6 million and $ 3.5 million, respectively, which were recorded within other assets on the condensed consolidated balance sheets.

GOODWILL AND INTANGIBLE ASSETS, NET

The carrying amount of goodwill as of April 1, 2023 and as of December 31, 2022 was $ 131.2 million and $ 131.4 million, respectively.

The change in the carrying value during the fiscal quarter ended April 1, 2023 was solely because of fluctuations in foreign currency exchange rates.

The carrying amount of goodwill as of July 1, 2023 and as of December 31, 2022 was $ 131.2 million and $ 131.4 million, respectively.

The change in the carrying value during the two fiscal quarters ended July 1, 2023 was solely because of fluctuations in foreign currency exchange rates.

Intangible Assets

Intangible assets, net as of April 1, 2023 consisted of the following (in thousands):

April 1, 2023

Intangible assets, net as of July 1, 2023 consisted of the following (in thousands):

Trade names and trademarks

4 unchanged sentences

Non-competition agreements

The Company recognized $ 6.6 million of amortization expense related to intangible assets during the fiscal quarter ended April 1, 2023.

The Company recognized $ 7.2 million of amortization expense related to intangible assets during the fiscal quarter ended April 2, 2022.

The Company recognized $ 6.6 million and $ 13.3 million of amortization expense related to intangible assets during the fiscal quarter and two fiscal quarters ended July 1, 2023.

The Company recognized $ 7.2 million and $ 14.3 million of amortization expense related to intangible assets during the fiscal quarter and two fiscal quarters ended July 2, 2022.

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

11 unchanged sentences

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

April 1, 2023

December 31, 2022

3 unchanged sentences

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

April 1, 2023

December 31, 2022

Revolving Credit Facility

Unamortized discount and debt issuance costs

18 unchanged sentences

There are also negative covenants, including certain restrictions on the Company’s and its subsidiaries’ ability to incur additional indebtedness, create liens, make investments, consolidate, or merge with other entities, enter into transactions with affiliates, make prepayments with respect to certain indebtedness, make dividend payments, loans, or advances to the Company, declare dividends and make restricted payments and other distributions.

As of April 1, 2023, there was $48.0 million outstanding on the Revolving Credit Facility.

As of July 1, 2023, there were no outstanding borrowings on the Revolving Credit Facility and $ 75.0 million was available for future borrowing.

The Term Loan matures on February 23, 2029.

3 unchanged sentences

The Company recorded $ 6.1 million of debt issuance costs and $ 4.9 million of debt discount related to the Term Loan as a direct reduction to the carrying amount of long-term debt on the condensed consolidated balance sheet as of the applicable period.

Outstanding borrowings as of April 1, 2023 were $ 312.5 million, net of discount and debt issuance costs of $ 9.3 million.

Outstanding borrowings as of July 1, 2023 were $ 312.0 million, net of discount and debt issuance costs of $ 8.9 million.

In connection with the Term Loan, the Company is subject to various negative, reporting, financial, and other covenants, including maintaining specific liquidity measurements.

As of April 1, 2023, the unamortized debt issuance costs and discount on the Term Loan were $ 5.2 million and $ 4.1 million, respectively.

The effective interest rate was 9.96 % at April 1, 2023, including the impact of the Company’s interest rate swaps.

As of April 1, 2023, the Company was in compliance with all financial covenants under the Credit Agreement.

As of July 1, 2023, the unamortized debt issuance costs and discount on the Term Loan were $ 5.0 million and $ 3.9 million, respectively.

The effective interest rate was 10.23 % at July 1, 2023, including the impact of the Company’s interest rate swaps.

As of July 1, 2023, the Company was in compliance with all financial covenants under the Credit Agreement.

Interest Rate Risk

1 unchanged sentence

The Company executed an interest rate swap on April 30, 2020.

The swap has an effective date of May 18, 2020 and a termination date of May 18, 2023.

The swap had an effective date of May 18, 2020 and a termination date of May 18, 2023.

In February of 2022, the Company amended its interest rate swap to change the index rate from LIBOR to SOFR in connection with the entry into the Credit Agreement.

Under the terms of the amended swap, the Company fixed its SOFR borrowing rate at 0.496 % on a notional amount of $ 200.0 million.

The interest rate swap is not designated as a hedging instrument for accounting purposes (see Note 3).

The interest rate swap was not designated as a hedging instrument for accounting purposes (see Note 3).

Additionally, the Company entered into an interest rate swap that was executed on March 10, 2023.

11 unchanged sentences

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

Fiscal Quarter Ended

April 1, 2023

April 2, 2022

Two Fiscal Quarters Ended

Balance at the beginning of the fiscal year

14 unchanged sentences

A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The components of lease expense for the fiscal quarters ended April 1, 2023 and April 2, 2022 were as follows (in thousands):

The components of lease expense for the fiscal quarters ended July 1, 2023 and July 2, 2022 were as follows (in thousands):

Fiscal Quarter Ended

April 1, 2023

April 2, 2022

Two Fiscal Quarters Ended

Operating lease expense

4 unchanged sentences

Total lease expense

Operating and finance lease right-of-use assets and lease-related liabilities as of April 1, 2023 and December 31, 2022 were as follows (in thousands):

April 1, 2023

Operating and finance lease right-of-use assets and lease-related liabilities as of July 1, 2023 and December 31, 2022 were as follows (in thousands):

December 31, 2022

14 unchanged sentences

Other long-term liabilities

Total finance lease liabilities

The table below presents supplemental information related to leases as of April 1, 2023 and December 31, 2022:

April 1, 2023

Total lease liabilities

The table below presents supplemental information related to leases as of July 1, 2023 and December 31, 2022:

December 31, 2022

6 unchanged sentences

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

Fiscal Quarter Ended

April 1, 2023

April 2, 2022

Two Fiscal Quarters Ended

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows for operating leases

The following table summarizes maturities of operating lease liabilities as of April 1, 2023 (in thousands):

The following table summarizes maturities of operating lease liabilities as of July 1, 2023 (in thousands):

Operating Leases

5 unchanged sentences

Fiscal Quarter Ended

April 1, 2023

April 2, 2022

Two Fiscal Quarters Ended

In-ground Swimming Pools

The effective income tax rate for the fiscal quarter ended April 1, 2023 was 16.9 %, compared to 215.1 % for the fiscal quarter ended April 2, 2022.

The difference between the U.S.

federal statutory income tax rate and the Company’s effective income tax rate for both the fiscal quarters ended April 1, 2023 and April 2, 2022 was primarily attributable to the discrete impact of stock-based compensation expense.

The Inflation Reduction Act ("IRA") was passed into law on August 16, 2022.

Key provisions from the IRA include the implementation of a 15% corporate alternative minimum tax, an excise tax on stock buybacks, and significant tax incentives for energy and climate initiatives.

Enactment of the IRA has not impacted the Company’s financial condition, results of operations, or cash flows for the period ended April 1, 2023 and the Company does not expect a material impact on its future results.

The effective income tax rate for the fiscal and two fiscal quarters ended July 1, 2023 was 46.1 % and ( 29.2 )%, respectively, compared to 71.9 % and 91.8 % for the fiscal and two fiscal quarters ended July 2, 2022, respectively.

The differences between the U.S.

federal statutory income tax rate and the Company’s effective income tax rates for the fiscal quarter ended July 1, 2023 and the fiscal quarter ended July 2, 2022 were primarily attributable to the discrete impacts of stock-based compensation expense for which there is no associated tax benefit.

The Inflation Reduction Act ("IRA") is effective beginning in 2023.

Key provisions from the IRA include the implementation of a 15% corporate alternative minimum tax for corporations with book income in excess of $1 billion, an excise tax on the fair market value of stock buybacks (offset by the fair market value of stock issued in the same tax year), and significant tax incentives for energy and climate initiatives.

Enactment of the new law has not impacted the Company’s financial condition, results of operations or cash flows for the period ended July 1, 2023 and the Company does not expect a material impact on our future results at this time.

The Company will continue to monitor any impacts of further guidance on the IRA as released and assess any impacts as applicable.

STOCKHOLDERS’ EQUITY

7 unchanged sentences

The Company is not obligated to repurchase any of its shares of its common stock under the Repurchase Program and the timing and amount of any repurchases will depend on market conditions, the Company’s stock price, alternative uses of capital, the terms of the Company’s debt instruments, and other factors.

As of April 1, 2023, approximately $ 77.0 million remained available for share repurchases pursuant to the Repurchase Program.

The Company did not repurchase any shares of its common stock during the fiscal quarter ended April 1, 2023.

As of July 1, 2023, approximately $ 77.0 million remained available for share repurchases pursuant to the Repurchase Program.

The Company did not repurchase any shares of its common stock during the fiscal quarter ended July 1, 2023.

The Company accounts for the excess of the repurchase price over the par value of shares acquired as a reduction to additional paid-in capital.

STOCK-BASED COMPENSATION

On April 12, 2021, the Company’s stockholders approved the 2021 Omnibus Incentive Plan (the “Omnibus Incentive Plan”), which became effective on April 22, 2021, upon pricing of its initial public offering.

The Omnibus Incentive Plan provides for the issuance of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based and cash-based awards.

The maximum aggregate number of shares reserved for issuance under the Omnibus Incentive Plan is 13,170,212 shares.

The maximum grant date fair value of cash and equity awards that may be awarded to a non-employee director under the Omnibus Incentive Plan during any one fiscal year, together with any cash fees paid to such non-employee director during such fiscal year, is $ 750,000 .

The following table summarizes the Company’s stock-based compensation expense:

On April 12, 2021, the Company’s stockholders approved the 2021 Omnibus Equity Incentive Plan (the “2021 Omnibus Equity Plan”), which became effective on April 22, 2021, upon pricing of its initial public offering.

The Omnibus Equity Plan provides for the issuance of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based and cash-based awards.

The maximum grant date fair value of cash and equity awards that may be awarded to a non-employee director under the Omnibus Equity Plan during any one fiscal year, together with any cash fees paid to such non-employee director during such fiscal year, is $ 750,000 .

On May 2, 2023, at the 2023 annual meeting of stockholders the Company, the stockholders approved the first amendment (the “First Amendment”) to the Latham Group, Inc.

2021 Omnibus Equity Plan, which was previously approved by the Board of Directors of the Company.

The First Amendment became effective upon stockholder approval, and provides for (i) an increase by 8,000,000 shares of the share pool, i.e.

the maximum number of shares of the Company’s common stock that may be issued pursuant to awards granted under the 2021 Omnibus Equity Plan, (ii) a prohibition on recycling of shares withheld or remitted to pay taxes for all awards, (iii) a minimum vesting period of one year for all awards, with an exception for shares representing 5% of the share pool, and (iv) a prohibition on the transfer of stock options and stock appreciation rights for value or to third-party financial institutions without stockholder approval.

Except as amended by the First Amendment, the other terms of the 2021 Omnibus Equity Plan remain in full force and effect.

Subsequent to the First Amendment, the maximum aggregate number of shares reserved for issuance under the Omnibus Equity Plan is 21,170,212 shares.

The following table summarizes the Company’s stock-based compensation expense (in thousands):

Fiscal Quarter Ended

April 1, 2023

April 2, 2022

Two Fiscal Quarters Ended

Cost of sales

Selling, general, and administrative

As of April 1, 2023, total unrecognized stock-based compensation expense related to all unvested stock-based awards was $ 21.1 million, which is expected to be recognized over a weighted-average period of 1.44 years.

As of July 1, 2023, total unrecognized stock-based compensation expense related to all unvested stock-based awards was $ 14.4 million, which is expected to be recognized over a weighted-average period of 1.5 years.

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

April 2, 2022

Two Fiscal Quarters Ended

Risk-free interest rate

2 unchanged sentences

Expected dividend yield

No stock options were granted under this plan during the fiscal quarter ended April 1, 2023.

No stock options were granted under this plan during the fiscal quarter ended July 1, 2023.

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

Two Fiscal Quarters Ended

Risk-free interest rate

Expected volatility

Expected term (in years)

Expected dividend yield

Restricted Stock Awards

The following table represents the Company’s restricted stock awards activity during the fiscal quarter ended April 1, 2023:

The following table represents the Company’s restricted stock awards activity during the two fiscal quarters ended July 1, 2023:

Average Grant-

1 unchanged sentence

Outstanding at January 1, 2023

Outstanding at April 1, 2023

( 1,239,520 )

Outstanding at July 1, 2023

Restricted Stock Units

The following table represents the Company’s restricted stock units activity during the fiscal quarter ended April 1, 2023:

The following table represents the Company’s restricted stock units activity during the two fiscal quarters ended July 1, 2023:

Average Grant-

1 unchanged sentence

Outstanding at January 1, 2023

Outstanding at April 1, 2023

Outstanding at July 1, 2023

Stock Options

The following table represents the Company’s stock option activity during the fiscal quarter ended April 1, 2023:

The following table represents the Company’s stock option activity during the two fiscal quarters ended July 1, 2023:

Exercise Price

3 unchanged sentences

Outstanding at January 1, 2023

Outstanding at April 1, 2023

Vested and expected to vest at April 1, 2023

Options exercisable at April 1, 2023

Outstanding at July 1, 2023

Vested and expected to vest at July 1, 2023

Options exercisable at July 1, 2023

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

NET LOSS PER SHARE

Stock Appreciation Rights

During the fiscal quarter ended April 1, 2023, as a portion of the annual equity award grants to the Company’s executive officers, the Compensation Committee of the Board of Directors approved stock appreciation rights for an aggregate of 790,181 shares of the Company’s common stock, with a strike price of $ 3.24 per share (the “Contingent Grants”).

At the time of such approval, the Company did not have enough shares of the Company’s common stock in the share pool under the Omnibus Equity Plan to support such grant.

As of April 1, 2023, the Contingent Grants remained subject to stockholder approval of the First Amendment.

2023, following stockholder approval of the First Amendment, the foregoing stock appreciation right awards became effective without condition.

The following table represents the Company’s stock appreciation rights activity during the two fiscal quarters ended July 1, 2023:

Exercise Price

Contract Term

Intrinsic Value

(in thousands)

Outstanding at January 1, 2023

Outstanding at July 1, 2023

Vested and expected to vest at July 1, 2023

Stock appreciation rights exercisable at July 1, 2023

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

NET INCOME (LOSS) PER SHARE

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

Fiscal Quarter Ended

April 1, 2023

April 2, 2022

Net loss attributable to common stockholders

Two Fiscal Quarters Ended

Net income (loss) attributable to common stockholders

Weighted-average common shares outstanding

Net loss per share attributable to common stockholders:

As of April 1, 2023 and December 31, 2022, 112,113,834 and 112,091,756 shares of common stock were issued and outstanding for accounting purposes, respectively.

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

Net income (loss) per share attributable to common stockholders:

As of July 1, 2023 and December 31, 2022, 113,452,328 and 112,091,756 shares of common stock were issued and outstanding for accounting purposes, respectively.

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

Fiscal Quarter Ended

April 1, 2023

April 2, 2022

Two Fiscal Quarters Ended

Restricted stock awards

1 unchanged sentence

Stock options

Stock appreciation awards

RELATED PARTY TRANSACTIONS

3 unchanged sentences

In December 2022, the Company executed an additional agreement with BrightAI for the provision of hardware that will run the technology developed by BrightAI and the Company.

During the fiscal quarter ended April 1, 2023 and the fiscal year ended December 31, 2022, the Company incurred less than $ 0.1 million and $ 0.2 million, respectively, associated with services performed by BrightAI, which is recorded as construction in progress within property and equipment, net on the condensed consolidated balance sheet as of April 1, 2023.

As of both April 1, 2023 and December 31, 2022, the Company had accounts payable related to BrightAI of $ 0.4 million.

During the two fiscal quarters ended July 1, 2023 and the fiscal year ended December 31, 2022, the Company incurred $ 0.8 million and $ 0.2 million, respectively, associated with services performed by BrightAI, which is recorded as construction in progress within property and equipment, net on the condensed consolidated balance sheet as of July 1, 2023.

As of July 1, 2023 and December 31, 2022, the Company had accounts payable related to BrightAI of $ 0.3 million and $ 0.4 million, respectively.

Expense Reimbursement

3 unchanged sentences

the reasonable out-of-pocket costs and expenses in connection with monitoring and overseeing their investment in the Company.

The Company recognized $ 0.2 million for the reimbursement of out-of-pocket costs and expenses to Wynnchurch Capital, L.P.

and no amounts for the reimbursement of out-of-pocket costs and expenses to the Sponsor during the fiscal quarter ended April 1, 2023.

The Company recognized less than $ 0.1 million and $ 0.2 million for the reimbursement of out-of-pocket costs and expenses to Wynnchurch Capital, L.P.

and no amounts for the reimbursement of out-of-pocket costs and expenses to the Sponsor during the fiscal quarter and two fiscal quarters ended July 1, 2023, respectively.

The Company did not reimburse any out-of-pocket costs or expenses to the Sponsor and Wynnchurch Capital, L.P.

during the fiscal quarter ended April 2, 2022.

As of both April 1, 2023 and December 31, 2022, there was less than $ 0.1 million outstanding amounts payable to the Sponsor and no outstanding amounts payable to Wynnchurch Capital, L.P.

during the fiscal quarter and the two fiscal quarters ended July 2, 2022.

As of both July 1, 2023 and December 31, 2022, there was less than $ 0.1 million outstanding amounts payable to the Sponsor and no outstanding amounts payable to Wynnchurch Capital, L.P.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements