What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-07 compared with 2024-05-08 · 142 added, 113 removed, 383 unchanged (40% 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

31 unchanged sentences

Preferred stock, $ 0.0001 par value;

100,000,000 shares authorized as of both March 30, 2024 and December 31, 2023;

no shares issued and outstanding as of both March 30, 2024 and December 31, 2023

100,000,000 shares authorized as of both June 29, 2024 and December 31, 2023;

no shares issued and outstanding as of both June 29, 2024 and December 31, 2023

Common stock, $ 0.0001 par value;

900,000,000 shares authorized as of March 30, 2024 and December 31, 2023;

115,389,689 and 114,871,782 shares issued and outstanding , as of March 30, 2024 and December 31, 2023, respectively

900,000,000 shares authorized as of June 29, 2024 and December 31, 2023;

115,577,103 and 114,871,782 shares issued and outstanding , as of June 29, 2024 and December 31, 2023, respectively

Additional paid-in capital

8 unchanged sentences

Fiscal Quarter Ended

March 30, 2024

April 1, 2023

Two Fiscal Quarters Ended

June 29, 2024

Cost of sales

Selling, general, and administrative expense

Loss from operations

Income from operations

Other expense:

Interest expense, net

Other expense, net

Other expense (income), net

Total other expense, net

Earnings from equity method investment

Loss before income taxes

Income tax expense (benefit)

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

March 30, 2024

April 1, 2023

Other comprehensive loss, net of tax:

Two Fiscal Quarters Ended

June 29, 2024

Net income (loss)

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments

Total other comprehensive loss, net of tax

Comprehensive loss

Total other comprehensive income (loss), net of tax

Comprehensive income (loss)

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

Repurchase and retirement of common stock under repurchase program

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.

9 unchanged sentences

Balances at March 30, 2024

Foreign currency translation adjustments

Issuance of common stock upon release of restricted stock units

Stock-based compensation expense

Balances at June 29, 2024

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 operating activities:

Depreciation and amortization

14 unchanged sentences

Other long-term liabilities

Net cash used in operating activities

Net cash provided by operating activities

Cash flows from investing activities :

4 unchanged sentences

Proceeds from borrowings on revolving credit facility

Payments on revolving credit facilities

Repayments of finance lease obligations

Net cash (used in) provided by financing activities

Net cash used in financing activities

Effect of exchange rate changes on cash

14 unchanged sentences

(the “Company”) wholly owns Latham Pool Products, Inc.

(“Latham Pool Products”) (together, “Latham”), a designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand.

Latham offers a portfolio of in-ground swimming pools and related products, including pool liners and pool covers.

(“Latham Pool Products”), a designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand.

Latham Pool Products offers a portfolio of in-ground swimming pools and related products, including pool liners and pool covers.

Stock Split, Initial Public Offering and Reorganization

1 unchanged sentence

On April 13, 2021, the Company effected a 109,673,709 for-one stock split of its issued and outstanding shares of common stock.

Accordingly, all share and per share data included in these condensed consolidated financial statements and notes thereto have been adjusted retroactively to reflect the impact of the amended and restated certificate of incorporation and the stock split.

Accordingly, all share and per share data included in these condensed consolidated financial statements and notes thereto reflect the impact of the amended and restated certificate of incorporation and the stock split.

On April 27, 2021, the Company completed its initial public offering (the “IPO”), pursuant to which it issued and sold 23,000,000 shares of common stock, inclusive of 3,000,000 shares sold by the Company pursuant to the full exercise of the underwriters’ option to purchase additional shares.

8 unchanged sentences

The unaudited condensed consolidated balance sheet at December 31, 2023 was derived from audited financial statements but does not include all disclosures required by GAAP.

The accompanying unaudited condensed consolidated financial statements as of March 30, 2024 and for the fiscal quarters ended March 30, 2024 and April 1, 2023, respectively, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements.

The accompanying unaudited condensed consolidated financial statements as of June 29, 2024 and for the fiscal quarter and two fiscal quarters ended June 29, 2024 and July 1, 2023, respectively, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements.

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

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 March 30, 2024 are not necessarily indicative of the results of operations that may be expected for the fiscal year ending December 31, 2024 or other interim periods thereof.

The Company’s results of operations for the fiscal quarter and two fiscal quarters ended June 29, 2024 are not necessarily indicative of the results of operations that may be expected for the fiscal year ending December 31, 2024 or other interim periods thereof.

Use of Estimates

2 unchanged sentences

The Company bases its estimates on historical experience, known trends, and other market-specific relevant factors that it believes to be reasonable under the circumstances.

Estimates are evaluated on an ongoing basis and revised as there are changes in circumstances, facts, and experience.

Estimates are evaluated on an ongoing basis and

revised as there are changes in circumstances, facts, and experience.

Changes in estimates are recorded in the period in which they become known.

11 unchanged sentences

Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which improves financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful analysis.

For all entities, ASU 2023-07 is effective for fiscal years beginning after December 15, 2023.

For all entities, ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The amendments should be applied retrospectively to all prior periods presented in the financial statements, with early adoption permitted.

3 unchanged sentences

For all entities, ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.

The a mendments should be applied prospectively with retrospective application permitted.

The amendments should be applied prospectively with retrospective application permitted.

Early adoption is also permitted.

2 unchanged sentences

Scope Application of Profits Interest and Similar Awards (“ASU 2024-01”), which improves financial reporting by providing clarity on when an entity should apply the scope guidance in paragraph 718-10-15-3.

For all public entities, ASU 2024-01 is effective for fiscal years beginning after December 15, 2024.

ASU 2024-01 is effective for public business entities for fiscal years beginning after December 15, 2024.

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 notes to the condensed consolidated financial statements.

The Company is currently evaluating ASU 2024-01 and its potential impact on the condensed consolidated financial statements.

FAIR VALUE MEASUREMENTS

12 unchanged sentences

market approach, income approach or cost approach.

There were no transfers between fair value measurement levels during the fiscal quarters ended March 30, 2024 and April 1, 2023.

There were no transfers between fair value measurement levels during the two fiscal quarters ended June 29, 2024 or July 1, 2023.

Assets and liabilities measured at fair value on a nonrecurring basis

3 unchanged sentences

The Company considers the carrying amounts of cash, trade receivables, prepaid expenses and other current assets, accounts payable, and accrued expenses and other current liabilities to approximate fair value because of the short-term maturities of these instruments.

The Company’s term loan (see Note 6) is carried at amortized cost;

The Company’s Term Loan (as defined below;

see Note 6) is carried at amortized cost;

however, the Company estimates the fair value of the Term Loan for disclosure purposes.

1 unchanged sentence

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

March 30, 2024

June 29, 2024

December 31, 2023

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 March 30, 2024 and December 31, 2023, the fair value of the Company’s interest rate swap was an asset of $ 0.6 million and a liability of $ 1.2 million, respectively, which were recorded within other assets and other long-term liabilities on the condensed consolidated balance sheets, respectively.

As of June 29, 2024 and December 31, 2023, the fair value of the Company’s interest rate swap was an asset of $ 0.9 million and a liability of $ 1.2 million, respectively, which were recorded within other assets and other long-term liabilities, respectively, on the condensed consolidated balance sheets.

GOODWILL AND INTANGIBLE ASSETS, NET

The carrying amount of goodwill as of March 30, 2024 and as of December 31, 2023 was $ 131.0 million and $ 131.4 million, respectively.

The change in the carrying value during the fiscal quarter ended March 30, 2024 was solely because of fluctuations in foreign currency exchange rates.

The carrying amount of goodwill as of June 29, 2024 and as of December 31, 2023 was $ 131.2 million and $ 131.4 million, respectively.

The change in the carrying value during the two fiscal quarters ended June 29, 2024 was solely because of fluctuations in foreign currency exchange rates.

Intangible Assets

Intangible assets, net as of March 30, 2024 consisted of the following (in thousands):

March 30, 2024

Intangible assets, net as of June 29, 2024 consisted of the following (in thousands):

June 29, 2024

Trade names and trademarks

4 unchanged sentences

Non-competition agreements

The Company recognized $ 6.4 million of amortization expense related to intangible assets during the fiscal quarter ended March 30, 2024.

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

The Company recognized $ 6.4 million and $ 12.8 million of amortization expense related to intangible assets during the fiscal quarter and two fiscal quarters ended June 29, 2024.

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.

Intangible assets, net as of December 31, 2023 consisted of the following (in thousands):

6 unchanged sentences

Non-competition agreements

The Company estimates that amortization expense related to definite-lived intangible assets will be as follows in each of the next five years and thereafter (in thousands):

The Company estimates that amortization expense related to definite-lived intangible assets will be as follows in each of the next five fiscal years and thereafter (in thousands):

Estimated Future

Fiscal Year Ending

Remainder of fiscal year 2024

1 unchanged sentence

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

March 30, 2024

June 29, 2024

December 31, 2023

3 unchanged sentences

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

March 30, 2024

June 29, 2024

December 31, 2023

5 unchanged sentences

Dollar senior secured term loan facility (the “Term Loan”) in an initial principal amount of $ 325.0 million.

As of March 30, 2024, the Company was in compliance with all financial covenants under the Credit Agreement.

As of June 29, 2024, the Company was in compliance with all financial covenants under the Credit Agreement.

Revolving Credit Facility

The Revolving Credit Facility may be utilized to finance ongoing general corporate and working capital needs and permits Latham Pools Products to borrow loans in U.S.

The Revolving Credit Facility may be utilized to finance ongoing general corporate and working capital needs and permits Latham Pool Products to borrow loans in U.S.

Dollars, Canadian Dollars, Euros and Australian Dollars.

3 unchanged sentences

Loans outstanding under the Revolving Credit Facility denominated in Euros or Australian Dollars bear interest based on EURIBOR or the AUD Rate (each, as defined in the Credit Agreement), respectively, plus a margin of 3.50 %.

A commitment fee accrues on any unused portion of the commitments under the Revolving Credit Facility.

The commitment fee is due and payable quarterly in arrears, and initially was 0.375 % per annum and thereafter accrues at a rate per annum ranging from 0.25 % to 0.50 %, depending on the First Lien Net Leverage Ratio (as defined in the Credit Agreement, the “First Lien Net Leverage Ratio”).

A commitment fee accrues on any unused portion of the commitments under the Revolving

Credit Facility.

Borrowings under the Revolving Credit Facility are due at maturity.

3 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 March 30, 2024, there were no outstanding borrowings on the Revolving Credit Facility and $ 75.0 million was available for future borrowing.

As of June 29, 2024, 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.

2 unchanged sentences

The Credit Agreement contains customary mandatory prepayment provisions for the Term Loan, including requirements to make mandatory prepayments with 50 % of any excess cash flow and with 100 % of the net cash proceeds from the incurrence of indebtedness not otherwise permitted to be incurred by the covenants, asset sales, and casualty and condemnation events, in each case, subject to customary exceptions.

During the quarter ended March 30, 2024, the Company made a payment of $ 18.0 million.

Outstanding borrowings as of March 30, 2024 were $ 282.8 million, net of unamortized discount and debt issuance costs of $ 7.7 million.

During the two fiscal quarters ended June 29, 2024, the Company made a payment of $ 18.0 million.

Outstanding borrowings as of June 29, 2024 were $ 282.4 million, net of unamortized discount and debt issuance costs of $ 7.3 million.

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

As of March 30, 2024, the unamortized debt issuance costs and discount on the Term Loan were $ 4.3 million and $ 3.4 million, respectively.

The effective interest rate was 9.89 % at March 30, 2024, including the impact of the Company’s interest rate swaps.

As of June 29, 2024, the unamortized debt issuance costs and discount on the Term Loan were $ 4.1 million and $ 3.3 million, respectively.

The effective interest rate was 9.98 % at June 29, 2024, including the impact of the Company’s interest rate swaps.

Interest Rate Risk

11 unchanged sentences

Principal payments due on the outstanding debt, excluding the Revolving Credit Facility, in the next five fiscal years, excluding any potential payments based on excess cash flow, are as follows (in thousands):

Fiscal Year Ending

Remainder of fiscal year 2024

The obligations under the Credit Agreement are guaranteed by certain wholly owned subsidiaries (the “Guarantors”) of the Company as defined in the security agreement.

The obligations under the Credit Agreement are 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.

The obligations under the Credit Agreement are secured by substantially all of the Guarantors’ tangible and intangible assets, including their accounts receivables, equipment, intellectual property, inventory, cash and cash equivalents, deposit accounts, and security accounts.

2 unchanged sentences

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

Fiscal Quarter Ended

March 30, 2024

April 1, 2023

Two Fiscal Quarters Ended

June 29, 2024

Balance at the beginning of the fiscal year

9 unchanged sentences

The Company also leases certain vehicles and equipment under finance leases.

The Company determines if an arrangement is a lease at inception.

The Company determines if an arrangement is a lease at

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

The components of lease expense for the fiscal quarters ended March 30, 2024 and April 1, 2023 were as follows (in thousands):

The components of lease expense for the fiscal quarter and two fiscal quarters ended June 29, 2024 and July 1, 2023 were as follows (in thousands):

Fiscal Quarter Ended

March 30, 2024

April 1, 2023

Two Fiscal Quarters Ended

June 29, 2024

Operating lease expense

4 unchanged sentences

Total lease expense

Operating and finance lease right-of-use assets and lease-related liabilities as of March 30, 2024 and December 31, 2023 were as follows (in thousands):

March 30, 2024

Operating and finance lease right-of-use assets and lease-related liabilities as of June 29, 2024 and December 31, 2023 were as follows (in thousands):

June 29, 2024

December 31, 2023

15 unchanged sentences

Total lease liabilities

The table below presents supplemental information related to leases as of March 30, 2024 and December 31, 2023:

March 30, 2024

The table below presents supplemental information related to leases as of June 29, 2024 and December 31, 2023:

June 29, 2024

December 31, 2023

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

March 30, 2024

April 1, 2023

Two Fiscal Quarters Ended

June 29, 2024

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

Operating cash flows for operating leases

The following table summarizes maturities of operating lease liabilities as of March 30, 2024 (in thousands):

The following table summarizes fiscal year maturities of operating lease liabilities as of June 29, 2024 (in thousands):

Operating Leases

5 unchanged sentences

Fiscal Quarter Ended

March 30, 2024

April 1, 2023

Two Fiscal Quarters Ended

June 29, 2024

In-ground Swimming Pools

The effective income tax rate for the fiscal quarter ended March 30, 2024 was ( 7.2 )% compared to 16.9 % for the fiscal quarter ended April 1, 2023.

The effective income tax rate for the fiscal quarter and two fiscal quarters ended June 29, 2024 was 3.2 % and 15.2 %, respectively, compared to 46.1 % and ( 29.2 )% for the fiscal quarter and two fiscal quarters ended July 1, 2023.

The differences between the U.S.

federal statutory income tax rate and our effective income tax rates for the fiscal quarter ended March 30, 2024 and the fiscal quarter ended April 1, 2023 were primarily attributable to the discrete impact of stock compensation expense for which there is no associated tax benefit.

federal statutory income tax rate and our effective income tax rates for the fiscal quarter ended June 29, 2024 and the fiscal quarter ended July 1, 2023 were primarily attributable to the impacts of stock-based compensation expense and foreign income.

STOCKHOLDERS’ EQUITY

3 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 March 30, 2024, $ 77.0 million remained available for share repurchases pursuant to the Repurchase Program.

The Company did no t repurchase any shares of its common stock during the fiscal quarter ended March 30, 2024.

As of June 29, 2024, $ 77.0 million remained available for share repurchases pursuant to the Repurchase Program.

The Company did not repurchase any shares of its common stock during the fiscal quarter ended June 29, 2024.

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

STOCK-BASED COMPENSATION

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.

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.

The 2021 Omnibus Equity Plan provides for the issuance of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock units and other stock-based and cash-based awards.

The maximum grant date fair value of cash and equity awards that may be awarded to a non-employee director under the 2021 Omnibus Equity Plan during any one fiscal year, together with any cash fees paid to such non-employee director during such fiscal year, is $ 750,000 .

The maximum grant date fair value of cash and equity awards that may be awarded to a

non-employee director under the 2021 Omnibus Equity Plan during any one fiscal year, together with any cash fees paid to such non-employee director during such fiscal year, is $ 750,000 .

On May 2, 2023, at the 2023 annual meeting of stockholders of the Company, the stockholders approved the first amendment (the “First Amendment”) to the 2021 Omnibus Equity Plan, which was previously approved by the Board of Directors of the Company.

5 unchanged sentences

Fiscal Quarter Ended

March 30, 2024

April 1, 2023

Two Fiscal Quarters Ended

June 29, 2024

Cost of sales

Selling, general, and administrative

As of March 30, 2024, total unrecognized stock-based compensation expense related to all unvested stock-based awards was $ 13.3 million, which is expected to be recognized over a weighted-average period of 2.2 years.

As of June 29, 2024, total unrecognized stock-based compensation expense related to all unvested stock-based awards was $ 12.8 million, which is expected to be recognized over a weighted-average period of 2.1 years.

Restricted Stock Awards

The following table represents the Company’s restricted stock awards activity during the fiscal quarter ended March 30, 2024:

The following table represents the Company’s restricted stock awards activity during the two fiscal quarters ended June 29, 2024:

Average Grant-

1 unchanged sentence

Outstanding at January 1, 2024

Outstanding at March 30, 2024

Outstanding at June 29, 2024

Restricted Stock Units

The following table represents the Company’s restricted stock units activity during the fiscal quarter ended March 30, 2024:

The following table represents the Company’s restricted stock units activity during the two fiscal quarters ended June 29, 2024:

Average Grant-

1 unchanged sentence

Outstanding at January 1, 2024

Outstanding at March 30, 2024

Outstanding at June 29, 2024

Stock Options

The following table represents the Company’s stock option activity during the fiscal quarter ended March 30, 2024:

The following table represents the Company’s stock options activity during the two fiscal quarters ended June 29, 2024:

Exercise Price

3 unchanged sentences

Outstanding at January 1, 2024

Outstanding at March 30, 2024

Vested and expected to vest at March 30, 2024

Options exercisable at March 30, 2024

Outstanding at June 29, 2024

Vested and expected to vest at June 29, 2024

Options exercisable at June 29, 2024

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 .

4 unchanged sentences

On May 2, 2023, following stockholder approval of the First Amendment, the foregoing stock appreciation right awards became effective without condition.

The following table represents the Company’s stock appreciation rights activity during the fiscal quarter ended March 30, 2024:

The following table represents the Company’s stock appreciation rights activity during the two fiscal quarters ended June 29, 2024:

Exercise Price

3 unchanged sentences

Outstanding at January 1, 2024

Outstanding at March 30, 2024

Vested and expected to vest at March 30, 2024

Stock appreciation rights exercisable at March 30, 2024

Outstanding at June 29, 2024

Vested and expected to vest at June 29, 2024

Stock appreciation rights exercisable at June 29, 2024

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

No stock appreciation rights were granted under this plan during the fiscal quarter ended March 30, 2024.

Performance Stock Units

During the fiscal quarter ended March 30, 2024 the Compensation Committee of the Board of Directors approved the grant of performance stock units (“PSUs”) as a portion of the annual equity award to the Company’s executive officers for an aggregate of 427,145 shares of the Company’s common stock.

The PSUs will be earned at 0 % to 200 % of the target PSUs (with 100 % of PSUs being earned at target performance, and linear interpolation between threshold and target and maximum performance) based on the Company’s achievement of Adjusted EBITDA, as defined in the award agreement, over a one-year performance period ending December 31, 2024.

During the two fiscal quarters ended June 29, 2024, the Compensation Committee of the Board of Directors approved the grant of performance stock units (“PSUs”) as a portion of the annual equity award to the Company’s executive officers.

Any earned PSUs cliff vest on the third anniversary of the grant date.

3 unchanged sentences

Compensation expense related to unvested PSUs is recognized ratably over the service period.

The following table represents the Company’s PSU activity during the fiscal quarter ended March 30, 2024:

The following table represents the Company’s PSU activity during the two fiscal quarters ended June 29, 2024:

Outstanding at January 1, 2024

Adjustment for expected performance achievement (1)

Outstanding at March 30, 2024 (2)

(1) Represents the adjustment to previously granted PSUs based on performance expectations as of the end of each respective fiscal year.

(2) An additional 427,145 PSUs could potentially be included if the maximum performance level of 200 % is earned for all PSUs outstanding as of March 30, 2024 .

NET LOSS PER SHARE

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

Outstanding at June 29, 2024 (2)

(1) Represents the adjustment to previously granted PSUs based on the Company’s performance expectations as of June 29, 2024.

(2) An additional 443,100 PSUs could potentially be included if the maximum performance level of 200 % is earned for all PSUs outstanding as of June 29, 2024.

NET INCOME (LOSS) PER SHARE

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

Fiscal Quarter Ended

March 30, 2024

April 1, 2023

Net loss attributable to common stockholders

Two Fiscal Quarters Ended

June 29, 2024

Net income (loss) attributable to common stockholders

Weighted-average common shares outstanding

Net loss per share attributable to common stockholders:

As of March 30, 2024 and December 31, 2023, 115,346,803 and 114,828,896 shares of common stock were issued and outstanding for accounting purposes, respectively.

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

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

As of June 29, 2024 and December 31, 2023, 115,555,660 and 114,828,896 shares of common stock were issued and outstanding for accounting purposes, respectively.

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

Fiscal Quarter Ended

March 30, 2024

April 1, 2023

Two Fiscal Quarters Ended

June 29, 2024

Restricted stock awards

6 unchanged sentences

Starting in 2020, BrightAI Corporation (“BrightAI”) has rendered services to the Company, for which the cost has been capitalized as internal-use software.

A co-founder of BrightAI Services served on the Company’s Board of Directors from December 9, 2020 until his resignation on February 21, 2024.

A co-founder of BrightAI served on the Company’s Board of Directors from December 9, 2020 until his resignation on February 21, 2024.

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

The Company had no material transactions with BrightAI during the quarters ended March 30, 2024 and April 1, 2023.

During the two fiscal quarters ended June 29, 2024 and July 1, 2023, the Company incurred no material amounts and $ 0.8 million, respectively, associated with services performed by BrightAI, which was recorded as construction in progress within property and equipment, net on the condensed consolidated balance sheet as of July 1, 2023.

As of December 31, 2023, the Company had no accounts payable related to BrightAI.

2 unchanged sentences

The plan involved a reduction in the Company’s workforce as well as closures of various manufacturing facilities.

The Company had an exit or disposal cost related liability of $ 0.1 million as of March 30, 2024 and $ 0.2 million as of December 31, 2023.

The Company had an exit or disposal cost related liability of less than $ 0.1 million as of June 29, 2024 and $ 0.2 million as of December 31, 2023.

SUBSEQUENT EVENT

On August 2, 2024, the Company completed a stock acquisition of CoverStar Central, LLC.

(“CoverStar Central”), the Company’s exclusive dealer of automatic safety covers in 29 states – mainly in the center of the U.S.

The purchase price was $ 64.5 million, subject to certain adjustments, including for working capital as compared to an agreed target and transaction expenses.

The Company fully funded the transaction with cash on hand.

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