What changed in this filing

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Item 1. Financial Statements

2026-05-06 compared with 2025-11-05 · 206 added, 254 removed, 347 unchanged (57% of the section changed)

3 unchanged sentences

Condensed Consolidated Statements of Operations

Condensed Consolidated Statements of Comprehensive Income

Condensed Consolidated Statements of Comprehensive Loss

Condensed Consolidated Statements of Stockholders’ Equity

4 unchanged sentences

(in thousands, except share and per share data)

September 27,

2026 December 31,

Current assets:

Cash $ 27,481 $ 71,043

Trade receivables, net 89,213 39,914

7 unchanged sentences

Operating lease right-of-use assets 29,621 30,723

Goodwill 161,144 155,189

Intangible assets, net 265,541 268,073

Other assets 3,699 4,214

Total assets $ 856,405 $ 823,223

Liabilities and Stockholders’ Equity

1 unchanged sentence

Accounts payable $ 29,874 $ 19,283

Revolving credit facility 31,000 —

Current maturities of long-term debt 3,250 3,250

Income tax payable 619 —

Current operating lease liabilities 6,792 7,630

9 unchanged sentences

Preferred stock, $ 0.0001 par value;

100,000,000 shares authorized as of both September 27, 2025 and December 31, 2024;

no shares issued and outstanding as of both September 27, 2025 and December 31, 2024

100,000,000 shares authorized as of both March 28, 2026 and December 31, 2025;

no shares issued and outstanding as of both March 28, 2026 and December 31, 2025

Common stock, $ 0.0001 par value;

900,000,000 shares authorized as of September 27, 2025 and December 31, 2024;

116,655,775 and 115,764,839 shares issued and outstanding , as of September 27, 2025 and December 31, 2024, respectively

900,000,000 shares authorized as of March 28, 2026 and December 31, 2025;

117,407,719 and 116,766,927 shares issued and outstanding, as of March 28, 2026 and December 31, 2025, respectively

Additional paid-in capital 472,145 473,423

8 unchanged sentences

Fiscal Quarter Ended

Three Fiscal Quarters Ended

September 27, 2025

September 28, 2024

September 27, 2025

September 28, 2024

March 28, 2026 March 29, 2025

Net sales $ 117,315 $ 111,420

Cost of sales 80,158 78,539

Gross profit 37,157 32,881

Selling, general, and administrative expense 36,589 30,620

Income from operations

Amortization 7,169 7,192

Loss from operations ( 6,601 ) ( 4,931 )

Other expense:

3 unchanged sentences

Earnings from equity method investment 835 953

Income before income taxes

Income tax expense (benefit)

Net income per share attributable to common stockholders:

Loss before income taxes ( 11,340 ) ( 10,041 )

Income tax benefit ( 2,806 ) ( 4,079 )

Net loss $ ( 8,534 ) $ ( 5,962 )

Net loss per share attributable to common stockholders:

Basic $ ( 0.07 ) $ ( 0.05 )

Diluted $ ( 0.07 ) $ ( 0.05 )

Weighted-average common shares outstanding – basic and diluted

Basic 116,894,080 115,885,111

Diluted 116,894,080 115,885,111

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

Latham Group, Inc.

Condensed Consolidated Statements of Comprehensive Income

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

Fiscal Quarter Ended

Three Fiscal Quarters Ended

September 27, 2025

September 28, 2024

September 27, 2025

September 28, 2024

March 28, 2026 March 29, 2025

Net loss $ ( 8,534 ) $ ( 5,962 )

Other comprehensive income, net of tax:

1 unchanged sentence

Total other comprehensive income, net of tax 653 217

Comprehensive income

Comprehensive loss $ ( 7,881 ) $ ( 5,745 )

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

2 unchanged sentences

(in thousands, except share amounts)

Shares Amount Additional

Capital Accumulated

Deficit Accumulated

Comprehensive

1 unchanged sentence

Balances at December 31, 2024 115,764,839 $ 12 $ 467,076 $ ( 74,816 ) $ ( 5,050 ) $ 387,222

Net loss — — — ( 5,962 ) — ( 5,962 )

Foreign currency translation adjustments — — — — 217 217

Issuance of common stock upon release of restricted stock units 941,370 — — — — —

Common stock withheld for taxes on restricted stock units ( 343,232 ) — ( 2,306 ) — — ( 2,306 )

Stock-based compensation expense — — 1,971 — — 1,971

Balances at March 29, 2025 116,362,977 $ 12 $ 466,741 $ ( 80,778 ) $ ( 4,833 ) $ 381,142

Foreign currency translation adjustments

Issuance of common stock upon release of restricted stock units

Stock-based compensation expense

Balances at June 29, 2024

Foreign currency translation adjustments

Issuance of common stock upon release of restricted stock units

Stock-based compensation expense

Balances at September 28, 2024

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

2 unchanged sentences

(in thousands, except share amounts)

Shares Amount Additional

Capital Accumulated

Deficit Accumulated

Comprehensive

1 unchanged sentence

Balances at December 31, 2025 116,766,927 $ 12 $ 473,423 $ ( 63,692 ) $ ( 3,882 ) $ 405,861

Net loss — — — ( 8,534 ) — ( 8,534 )

Foreign currency translation adjustments — — — — 653 653

3 unchanged sentences

Balances at March 28, 2026 117,407,719 $ 12 $ 472,145 $ ( 72,226 ) $ ( 3,229 ) $ 396,702

Foreign currency translation adjustments

Issuance of common stock upon release of restricted stock units

Common stock withheld for taxes on restricted stock units

Stock-based compensation expense

Balances at June 28, 2025

Foreign currency translation adjustments

Issuance of common stock upon release of restricted stock units

Common stock withheld for taxes on restricted stock units

Stock-based compensation expense

Balances at September 27, 2025

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

2 unchanged sentences

(in thousands)

Three Fiscal Quarters Ended

September 27,

September 28,

Fiscal Quarter Ended

2026 March 29,

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Net loss $ ( 8,534 ) $ ( 5,962 )

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

Depreciation and amortization 13,067 12,400

Unrealized foreign currency (gain) loss

Unrealized foreign currency loss (gain) 848 ( 417 )

Amortization of deferred financing costs and debt discount 430 430

5 unchanged sentences

Earnings from equity method investment ( 835 ) ( 953 )

Distributions received from equity method investment

Changes in operating assets and liabilities:

Trade receivables ( 49,505 ) ( 52,550 )

Inventories ( 9,630 ) ( 9,559 )

Prepaid expenses and other current assets ( 836 ) 189

Income tax receivable ( 3,025 ) ( 4,624 )

Other assets ( 120 ) ( 10 )

Accounts payable 9,708 14,271

1 unchanged sentence

Other long-term liabilities ( 4 ) ( 78 )

Net cash provided by operating activities

Net cash used in operating activities ( 47,720 ) ( 46,882 )

Cash flows from investing activities:

3 unchanged sentences

Cash flows from financing activities:

Payments on long-term debt borrowings

Proceeds from borrowings on revolving credit facility 31,000 25,000

Payments on revolving credit facilities

Repayments of finance lease obligations ( 216 ) ( 201 )

Common stock withheld for taxes on restricted stock units ( 2,382 ) ( 2,306 )

Net cash used in financing activities

Net cash provided by financing activities 28,402 22,493

Effect of exchange rate changes on cash 655 343

Net increase (decrease) in cash

Net decrease in cash ( 43,562 ) ( 32,432 )

Cash at beginning of period 71,043 56,398

6 unchanged sentences

Right-of-use operating and finance lease assets obtained in exchange for lease liabilities 7,785 994

Purchase of property and equipment through settlement of deposit 12,000 —

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

12 unchanged sentences

The unaudited condensed consolidated balance sheet at December 31, 2025 was derived from audited financial statements but does not include all disclosures required by GAAP.

The accompanying unaudited condensed consolidated financial statements as of September 27, 2025 and for the fiscal quarter and three fiscal quarters ended September 27, 2025 and September 28, 2024, 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 March 28, 2026 and for the fiscal quarters ended March 28, 2026 and March 29, 2025, 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 and three fiscal quarters ended September 27, 2025 are not necessarily indicative of the results of operations that may be expected for the fiscal year ending December 31, 2025 or other interim periods thereof.

The Company’s results of operations for the fiscal quarter ended March 28, 2026 are not necessarily indicative of the results of operations that may be expected for the fiscal year ending December 31, 2026 or other interim periods thereof.

Use of Estimates

10 unchanged sentences

Recently Issued Accounting Pronouncements

The Company qualifies as “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected to “opt in” to the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and nonpublic companies, the Company will adopt the new or revised standard at the time nonpublic companies adopt the new or revised standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company.

The Company qualifies as an “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.

The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”), in an effort to enhance the transparency and decision usefulness of income tax disclosures.

For all entities, ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025.

The amendments should be applied prospectively with retrospective application permitted.

Early adoption is also permitted.

The Company is currently evaluating ASU 2023-09 and its potential impact on the notes to the condensed consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40 (“ASU 2024-03”)), which improves disclosures to provide more detailed information about a business entity’s expenses.

6 unchanged sentences

The amendments should be applied prospectively.

The Company has evaluated ASU 2025-05 and determined to not adopt the practical expedient.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) (“ASU 2025-11”), which improves the navigability of the required interim disclosures and clarifying when that guidance is applicable.

ASU 2025-11 is effective for public business entities for interim reporting periods within annual fiscal years beginning after December 15, 2027.

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 condensed consolidated financial statements.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”), requiring public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis.

The Company adopted ASU 2023-07 during the year ended December 31, 2024.

See Note 14 for further detail.

Coverstar Central, LLC

On August 2, 2024 (the “Acquisition Date”), Latham Pool Products acquired Coverstar Central, LLC (“Coverstar Central”) for total consideration of $ 71.5 million (the “Coverstar Central Acquisition”).

The total consideration included $ 66.5 million in cash (including a net working capital adjustment of $ 1.2 million) and a non-cash settlement of preexisting obligations of $ 4.9 million.

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.

Coverstar Central is an automatic safety cover dealer based in the United States.

The acquisition allows for vertical integration of the Company’s automatic safety cover product category.

Additionally, the acquisition provides the Company with an increase in dealer and franchise relationships.

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.

Specific to intangible assets, backlog and customer relationships were valued using the multi-period excess earnings method.

The Company recorded the assets acquired and liabilities assumed at their respective fair values as of the Acquisition Date.

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.

The following summarizes the purchase price allocation for the Company’s acquisition of Coverstar Central:

(in thousands)

August 2, 2024

Total consideration

Trade receivables

Prepaid expenses and other current assets

Property and equipment

Intangible assets

Deferred tax assets

Total assets acquired, excluding goodwill

Accounts payable

Accrued expenses and other current liabilities

Total liabilities assumed

Total fair value of net assets acquired, excluding goodwill

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.

Goodwill resulting from the acquisition was attributable to vertical integration, the expanded market share and broader geographical footprint.

The goodwill recognized is deductible for tax purposes.

The Company allocated a portion of the total consideration to specific intangible asset categories as follows:

Definite-lived intangible assets:

(in thousands)

Period (in years)

Dealer relationships

Order backlog

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, 2024.

The pro forma results do not include any anticipated synergies, cost savings or other expected benefits of the acquisition.

The pro forma financial information is not necessarily indicative of what the financial results would have been had the acquisition been completed on January 1, 2024 and is not necessarily indicative of the Company’s future financial results.

Three Fiscal Quarters Ended

September 27,

September 28,

(in thousands)

The pro forma financial information presented above reflects the effects as a result of the acquisition, including the amortization expense from acquired intangible assets, the additional cost of sales from acquired inventory, the elimination of intercompany transactions and the removal of certain costs (primarily payroll costs) that would not have occurred and any related tax effects.

Transaction costs for Coverstar Central are reflected within pro forma net income for the three fiscal quarters ended September 28, 2024.

Other Business Combinations

During the fiscal quarter ended March 29, 2025, the Company completed the acquisition of two autocover dealers located in New York and Tennessee that qualified as a business combination.

This transaction resulted in an increase to goodwill and intangibles, but was not material to our condensed consolidated financial statements, and as a result, additional business combination disclosures for this acquisition have been omitted.

Business Combinations

In February 2025, the Company completed the acquisition of two autocover dealers located in New York and Tennessee for a purchase price of $ 5.6 million.

In February 2026, the Company completed the acquisition of Freedom Pools in Australia for a purchase price of $ 15.4 million, including a holdback of $ 1.6 million that has been accrued for on the Company's condensed consolidated balance sheet.

Each of these acquisitions qualified as a business combination.

These transactions resulted in an increase to goodwill and intangibles, but were not material to the Company's condensed consolidated financial statements, and as a result, additional business combination disclosures for these acquisitions have been omitted.

FAIR VALUE MEASUREMENTS

12 unchanged sentences

market approach, income approach or cost approach.

There were no transfers between fair value measurement levels during the three fiscal quarters ended September 27, 2025 or September 28, 2024.

There were no transfers between fair value measurement levels during the fiscal quarters ended March 28, 2026 or March 29, 2025.

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 the term loans (in thousands):

September 27, 2025

December 31, 2024

March 28, 2026 December 31, 2025

Value Estimated

Fair Value Carrying

Value Estimated

Term Loan $ 280,233 $ 278,482 $ 279,841 $ 279,841

Interest rate swap

1 unchanged sentence

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 September 27, 2025 and December 31, 2024, the Company’s interest rate swap was a liability of $ 1.0 million and $ 0.4 million, respectively, which were recorded within other long-term liabilities on the condensed consolidated balance sheets.

As of March 28, 2026 and December 31, 2025, the Company’s interest rate swap was a liability of $ 0.3 million and $ 1.1 million, respectively, which were recorded within other long-term liabilities on the condensed consolidated balance sheets.

See Note 7 for further detail.

GOODWILL AND INTANGIBLE ASSETS, NET

The carrying amount of goodwill as of September 27, 2025 and as of December 31, 2024 was $ 155.0 million and $ 152.6 million, respectively.

The change in the carrying value during the three fiscal quarters ended September 27, 2025 was primarily driven by acquisitions made in the first fiscal quarter of 2025.

The carrying amount of goodwill as of March 28, 2026 and as of December 31, 2025 was $ 161.1 million and $ 155.2 million, respectively.

The change in the carrying value during the fiscal quarter ended March 28, 2026 was primarily driven by the acquisition of Freedom Pools made in the first fiscal quarter of 2026.

Intangible Assets

Intangible assets, net as of September 27, 2025 consisted of the following (in thousands):

September 27, 2025

Intangible assets, net as of March 28, 2026 consisted of the following (in thousands):

March 28, 2026

Amount Foreign

Translation Accumulated

Amortization Net

Trade names and trademarks $ 149,305 $ 62 $ 44,442 $ 104,925

Patented technology 16,126 — 12,144 3,982

Franchise relationships

Technology 13,000 — 3,757 9,243

Pool designs 13,628 67 5,079 8,616

Dealer relationships 241,457 ( 81 ) 102,929 138,447

Order backlog 2,389 ( 10 ) 2,051 328

Non-competition agreements

The Company recognized $ 7.2 million and $ 21.7 million of amortization expense related to intangible assets during the fiscal quarter and three fiscal quarters ended September 27, 2025, respectively.

The Company recognized $ 7.0 million and $ 19.8 million of amortization expense related to intangible assets during the fiscal quarter and three fiscal quarters ended September 28, 2024, respectively.

The change in the carrying value of dealer relationships is driven by the acquisitions made in the three fiscal quarters ended September 27, 2025.

$ 435,905 $ 38 $ 170,402 $ 265,541

The Company recognized $ 7.2 million of amortization expense related to intangible assets during each of the fiscal quarters ended March 28, 2026 and March 29, 2025.

The changes in the carrying values of dealer relationships, trade names and trademarks and backlog are driven by the acquisition of Freedom Pools made in the fiscal quarter ended March 28, 2026.

Intangible assets, net as of December 31, 2025 consisted of the following (in thousands):

December 31, 2025

Amount Foreign

Translation Accumulated

Amortization Net

Trade names and trademarks $ 148,100 $ ( 112 ) $ 42,784 $ 105,204

Patented technology 16,126 — 11,776 4,350

Franchise relationships

Technology 13,000 — 3,540 9,460

Pool designs 13,628 ( 78 ) 4,845 8,705

Dealer relationships 238,551 — 98,197 140,354

Order backlog 2,020 — 2,020 —

Non-competition agreements

$ 431,425 $ ( 190 ) $ 163,162 $ 268,073

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

Fiscal Year Ending Estimated Future

Remainder of fiscal year 2026 $ 22,084

Thereafter 141,558

INVENTORIES, NET

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

September 27, 2025

December 31, 2024

March 28, 2026 December 31, 2025

Raw materials $ 60,680 $ 50,973

Finished goods 26,929 23,953

LONG-TERM DEBT

$ 87,609 $ 74,926

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

September 27, 2025

December 31, 2024

March 28, 2026 December 31, 2025

Term Loan $ 284,813 $ 284,813

Revolving Credit Facility 31,000 —

Unamortized discount and debt issuance costs ( 4,580 ) ( 4,972 )

Total debt 311,233 279,841

Current portion of Revolving Credit Facility ( 31,000 ) —

Current portion of long-term debt ( 3,250 ) ( 3,250 )

7 unchanged sentences

Dollars, Canadian Dollars, Euros and Australian Dollars.

The Revolving Credit Facility matures on February 23, 2027.

The Revolving Credit Facility matures on February 23, 2027, which is within one year after the date after these financial statements are issued.

The Company is currently in discussions to extend the Revolving Credit Facility before it matures.

Loans outstanding under the Revolving Credit Facility denominated in U.S.

6 unchanged sentences

The debt issuance costs were recorded within other assets on the condensed consolidated balance sheet and are being amortized over the life of the Revolving Credit Facility.

During the three fiscal quarters ended September 27, 2025, the Company repaid the $ 25.0 million of outstanding borrowings on the Revolving Credit Facility.

As of September 27, 2025, there were no outstanding borrowings on the Revolving Credit Facility and $ 75.0 million was available for future borrowing.

As of March 28, 2026, there was $ 31.0 million in outstanding borrowings on the Revolving Credit Facility and $ 44.0 million was available for future borrowing.

Pursuant to the Credit Agreement, Latham Pool Products borrowed $ 325.0 million in term loans.

The Term Loan matures on February 23, 2029.

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.

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.

Loans under the Term Loan are subject to scheduled quarterly amortization payments of $ 812,500 , equal to 0.25 % of the initial principal amount of the Term Loan.

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.

During the three fiscal quarters ended September 28, 2024, the Company made a pre-payment of $ 18.0 million in addition to the required annual payments of $ 3.3 million.

No additional pre-payments are required to be made during the year ending December 31, 2025.

Outstanding borrowings as of September 27, 2025 were $ 281.1 million, net of unamortized discount and debt issuance costs of $ 5.4 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 September 27, 2025, the unamortized debt issuance costs and discount on the Term Loan were $ 3.0 million and $ 2.4 million, respectively.

The effective interest rate was 9.22 % at September 27, 2025, including the impact of the Company’s interest rate swap.

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.

Outstanding borrowings as of March 28, 2026 were $ 280.2 million, net of unamortized discount and debt issuance costs of $ 4.6 million.

As of March 28, 2026, the unamortized debt issuance costs and discount on the Term Loan were $ 2.5 million and $ 2.1 million, respectively.

The effective interest rate was 8.84 % at March 28, 2026, including the impact of the Company’s interest rate swap.

Interest Rate Risk

4 unchanged sentences

The 2023 Interest Rate Swap was not designated as a hedging instrument for accounting purposes (see Note 4).

Additionally, the Company entered into a new interest rate swap that was executed on June 4, 2025 (the “2025 Interest Rate Swap”).

Subsequently, the Company entered into a new interest rate swap that was executed on June 4, 2025 (the “2025 Interest Rate Swap”).

As part of the 2025 Interest Rate Swap, the Company terminated the 2023 Interest Rate Swap prior to its May 18, 2026 termination date.

4 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 levels, are as follows (in thousands):

Fiscal Year Ending

Fiscal Year Ending Term Loan

Remainder of fiscal year 2026 $ 3,250

2 unchanged sentences

The Credit Agreement also restricts payments and other distributions unless certain conditions are met, which could restrict the Company’s ability to pay dividends.

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.

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.

PRODUCT WARRANTIES

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

Three Fiscal Quarters Ended

September 27, 2025

September 28, 2024

Fiscal Quarter Ended

March 28, 2026 March 29, 2025

Balance at the beginning of the fiscal year $ 3,349 $ 2,647

11 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 quarter and three fiscal quarters ended September 27, 2025 and September 28, 2024 were as follows (in thousands):

The components of lease expense for the fiscal quarters ended March 28, 2026 and March 29, 2025 were as follows (in thousands):

Fiscal Quarter Ended

Three Fiscal Quarters Ended

September 27, 2025

September 28, 2024

September 27, 2025

September 28, 2024

March 28, 2026 March 29, 2025

Operating lease expense $ 2,287 $ 2,162

4 unchanged sentences

Total lease expense $ 2,867 $ 2,736

Operating and finance lease right-of-use assets and lease-related liabilities as of September 27, 2025 and December 31, 2024 were as follows (in thousands):

September 27, 2025

December 31, 2024

Classification

Operating and finance lease right-of-use assets and lease-related liabilities as of March 28, 2026 and December 31, 2025 were as follows (in thousands):

March 28, 2026 December 31, 2025 Classification

Lease right-of-use assets:

Operating leases

Operating lease right-of-use assets

Finance leases

Operating leases $ 29,621 $ 30,723 Operating lease right-of-use assets

Finance leases 2,619 2,714 Other assets

Total lease right-of-use assets $ 32,240 $ 33,437

Lease-related liabilities:

Operating leases

Current operating lease liabilities

Finance leases

Accrued expenses and other current liabilities

Operating leases

Non-current operating lease liabilities

Finance leases

Other long-term liabilities

Operating leases $ 6,792 $ 7,630 Current operating lease liabilities

Finance leases 834 815 Accrued expenses and other current liabilities

Operating leases 23,633 23,964 Non-current operating lease liabilities

Finance leases 2,011 2,125 Other long-term liabilities

Total lease liabilities $ 33,270 $ 34,534

The table below presents supplemental information related to leases as of September 27, 2025 and December 31, 2024:

September 27, 2025

December 31, 2024

The table below presents supplemental information related to leases as of March 28, 2026 and December 31, 2025:

March 28, 2026 December 31, 2025

Weighted-average remaining lease term (years):

5 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):

Three Fiscal Quarters Ended

September 27, 2025

September 28, 2024

Fiscal Quarter Ended

March 28, 2026 March 29, 2025

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

Operating cash flows for operating leases $ 1,807 $ 1,829

The following table summarizes fiscal year maturities of operating lease liabilities as of September 27, 2025 (in thousands):

Operating Leases

Finance Leases

The following table summarizes fiscal year maturities of operating lease liabilities as of March 28, 2026 (in thousands):

Operating Leases Finance Leases Total

Remainder of fiscal year 2026 $ 6,584 $ 785 $ 7,369

2027 7,003 948 7,951

2028 5,671 936 6,607

2029 5,035 451 5,486

2030 4,266 120 4,386

Thereafter 7,932 7 7,939

Total lease payments 36,491 3,247 39,738

Interest ( 6,066 ) ( 402 ) ( 6,468 )

Present value of lease liability $ 30,425 $ 2,845 $ 33,270

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Fiscal Quarter Ended

Three Fiscal Quarters Ended

September 27, 2025

September 28, 2024

September 27, 2025

September 28, 2024

March 28, 2026 March 29, 2025

In-ground Swimming Pools $ 59,731 $ 57,734

The effective income tax rate for the fiscal quarter and the three fiscal quarters ended September 27, 2025 was 47.9 % and 32.0 %, respectively, compared to ( 0.7 )% and 7.6 % for the fiscal quarter and the three fiscal quarters ended September 28, 2024.

Covers 33,498 31,611

Liners 24,086 22,075

$ 117,315 $ 111,420

The effective income tax rate for the fiscal quarter ended March 28, 2026 was 24.8 %, compared to 40.6 % for the fiscal quarter ended March 29, 2025.

The differences between the U.S.

federal statutory income tax rate and the Company's effective income tax rates for the fiscal quarter ended September 27, 2025 and the fiscal quarter ended September 28, 2024 were primarily attributable to the discrete impact of stock-based compensation expense for which there is no associated tax benefit and the effects of branch accounting for Latham Canada.

federal statutory income tax rate and the Company's effective income tax rates for the fiscal quarter ended March 28, 2026 and the fiscal quarter ended March 29, 2025 were primarily attributable to the discrete impact of stock-based compensation expense for which there is no associated tax benefit and the effects of branch accounting for Latham Canada.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The new provisions did not have a material impact on the Company’s 2025 effective tax rate.

The OBBBA maintained the 21% corporate tax rate and makes permanent many of the beneficial expired and expiring tax provisions originally enacted in the Tax Cuts and Jobs Act of 2017, including the immediate expensing of domestic research and development expenditures, more favorable interest deductions and 100% bonus depreciation with effective dates during the year ended December 31, 2025.

Revisions to the international tax framework are effective in the year ending December 31, 2026.

The OBBBA did not have a material impact on the Company's effective tax rate.

STOCK-BASED COMPENSATION

On April 12, 2021, the Company’s stockholders approved the Latham Group, Inc.

2021 Omnibus Equity Incentive Plan (the “2021 Omnibus Equity Plan”), which became effective on April 22, 2021.

2021 Omnibus Equity Incentive Plan (the “2021 Omnibus Equity Plan”), which became effective on April 22, 2021, and was further amended on May 2, 2023 to, among other things, increase the maximum aggregate number of shares reserved for issuance under the 2021 Omnibus Equity Plan to 21,170,212 shares.

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

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

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

The Equity Plan 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 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 Equity Plan First Amendment, the other terms of the 2021 Omnibus Equity Plan remain in full force and effect.

Subsequent to the Equity Plan First Amendment, the maximum aggregate number of shares reserved for issuance under the 2021 Omnibus Equity Plan is 21,170,212 shares.

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

Fiscal Quarter Ended

Three Fiscal Quarters Ended

September 27, 2025

September 28, 2024

September 27, 2025

September 28, 2024

March 28, 2026 March 29, 2025

Selling, general, and administrative $ 1,104 $ 1,971

As of September 27, 2025, total unrecognized stock-based compensation expense related to all unvested stock-based awards was $ 10.3 million, which is expected to be recognized over a weighted-average period of 1.9 years.

As of March 28, 2026, total unrecognized stock-based compensation expense related to all unvested stock-based awards was $ 14.1 million, which is expected to be recognized over a weighted-average period of 1.8 years.

Restricted Stock Units

The following table represents the Company’s restricted stock units activity during the three fiscal quarters ended September 27, 2025:

The following table represents the Company’s restricted stock units activity during the fiscal quarter ended March 28, 2026:

Shares Weighted-

Average Grant-

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Outstanding at January 1, 2026 3,335,594 $ 4.22

( 1,231,008 )

Outstanding at September 27, 2025

Granted 737,053 6.30

Vested ( 1,005,086 ) 4.34

Forfeited ( 279,273 ) 4.18

Outstanding at March 28, 2026 2,788,288 $ 4.74

Stock Options

The following table represents the Company’s stock options activity during the three fiscal quarters ended September 27, 2025:

The following table represents the Company’s stock options activity during the fiscal quarter ended March 28, 2026:

Shares Weighted-

Exercise Price

Contract Term

per Share Weighted-

Contract Term Aggregate

Intrinsic Value

(in thousands)

(in years) (in thousands)

Outstanding at January 1, 2026 1,150,712 $ 14.84

Outstanding at September 27, 2025

Vested and expected to vest at September 27, 2025

Options exercisable at September 27, 2025

Exercised — —

Forfeited — —

Outstanding at March 28, 2026 1,150,712 $ 14.84 4.34 $ 9

Vested and expected to vest at March 28, 2026 1,150,712 $ 14.84 4.34 $ 9

Options exercisable at March 28, 2026 1,091,290 $ 15.28 4.24 $ 7

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

Stock Appreciation Rights

The following table represents the Company’s stock appreciation rights activity during the three fiscal quarters ended September 27, 2025:

The following table represents the Company’s stock appreciation rights activity during the fiscal quarter ended March 28, 2026:

Shares Weighted-

Exercise Price

Contract Term

per Share Weighted-

Contract Term Aggregate

Intrinsic Value

(in thousands)

(in years) (in thousands)

Outstanding at January 1, 2026 514,503 $ 3.12

Outstanding at September 27, 2025

Vested and expected to vest at September 27, 2025

Stock appreciation rights exercisable at September 27, 2025

Granted 907,591 6.44

Exercised — —

Forfeited — —

Outstanding at March 28, 2026 1,422,094 $ 5.24 7.89 $ 1,115

Vested and expected to vest at March 28, 2026 1,422,094 $ 5.24 7.89 $ 1,115

Stock appreciation rights exercisable at March 28, 2026 359,679 $ 3.16 4.46 $ 768

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.

Performance Stock Units

During the three fiscal quarters ended September 27, 2025, the Compensation Committee of the Board approved the grant of performance stock units (“PSUs”) as a portion of the annual equity award to the Company’s executive officers.

Thirty-three percent of the target number of PSUs awarded on the grant date will be earned annually at 0 % to 200 % of the target number of PSUs based on the Company’s achievement of Adjusted EBITDA (with 100 % of PSUs being earned at target performance, and linear interpolation between threshold and target and maximum performance) as defined in the award agreement, for each year of the three-year performance period beginning January 1, 2025 and ending December 31, 2027.

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

During the year ended December 31, 2025, the Compensation Committee of the Board approved the grant of performance stock units (“PSUs”) as a portion of the annual equity award to the Company’s senior management.

The 2025 PSU program includes three equal tranches of grants.

Each tranche has an annual performance period, with performance goals established for the first tranche of PSUs granted in 2025 in dollars, and second and third tranches of PSUs granted or to be granted in 2026 and 2027, respectively, as a percentage of growth from actual performance in the prior year.

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

Thirty-three percent of the target number of PSUs awarded on each grant date will be earned at 0 % to 200 % of the target number of PSUs based on the Company’s achievement of the applicable Adjusted EBITDA performance goal (with 100 % of PSUs being earned at target performance, and linear interpolation between threshold and target and maximum performance) as defined in the award agreement, for each year of the three-year performance period beginning on January 1, 2025 and ending December 31, 2027.

The first and second tranches of PSUs under the 2025 PSU program were granted in March 2025 and 2026, respectively.

During the quarter ended March 28, 2026, an additional round of PSU grants were approved.

The 2026 PSU program includes three equal tranches of grants.

Each tranche has an annual performance period, with performance goals established for the first tranche of PSUs granted in 2026 in dollars, and second and third tranches of PSUs to be granted in 2027 and 2028 as a percentage of growth from actual performance in the prior year.

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

The first tranche of PSUs under the 2026 PSU program were granted in March 2026.

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.

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

The following table represents the Company’s PSU activity during the three fiscal quarters ended September 27, 2025:

The following table represents the Company’s PSU activity during the fiscal quarter ended March 28, 2026:

Shares Weighted-

Outstanding at January 1, 2026 941,803 $ 5.23

Granted 314,026 6.30

Adjustment for performance achievement (1)

Outstanding at September 27, 2025 (2)

Forfeited ( 99,397 ) 7.20

Outstanding at March 28, 2026 ⁽²⁾ 1,156,432 $ 5.35

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

(2) An additional 292,870 PSUs could potentially be included if the maximum performance level of 200 % is earned for all PSUs granted on or after January 1, 2025 and outstanding as of September 27, 2025.

NET INCOME PER SHARE

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

(2) An additional 409,883 PSUs could potentially be included if the maximum performance level of 200 % is earned for all PSUs granted on or after January 1, 2025 and outstanding as of March 28, 2026.

NET LOSS PER SHARE

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

Fiscal Quarter Ended

Three Fiscal Quarters Ended

September 27, 2025

September 28, 2024

September 27, 2025

September 28, 2024

Net income attributable to common stockholders

March 28, 2026 March 29, 2025

Net loss attributable to common stockholders $ ( 8,534 ) $ ( 5,962 )

Weighted-average common shares outstanding

Net income per share attributable to common stockholders:

As of September 27, 2025 and December 31, 2024, 116,655,775 and 115,764,839 shares of common stock were issued and outstanding, 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 per share because the effect was anti-dilutive:

Basic 116,894,080 115,885,111

Diluted 116,894,080 115,885,111

Net loss per share attributable to common stockholders:

Basic $ ( 0.07 ) $ ( 0.05 )

Diluted $ ( 0.07 ) $ ( 0.05 )

As of March 28, 2026 and December 31, 2025, 117,407,719 and 116,766,927 shares of common stock were issued and outstanding, respectively.

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

Fiscal Quarter Ended

Three Fiscal Quarters Ended

September 27, 2025

September 28, 2024

September 27, 2025

September 28, 2024

March 28, 2026 March 29, 2025

Restricted stock awards — —

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Fiscal Quarter Ended

Three Fiscal Quarters Ended

September 27, 2025

September 28, 2024

September 27, 2025

September 28, 2024

March 28, 2026 March 29, 2025

Net sales $ 117,315 $ 111,420

Other cost of sales (1)

75,619 74,580

Other selling, general and administrative expense (2)

30,550 26,684

Depreciation 5,682 4,998

Amortization (3)

6 unchanged sentences

Earnings from equity method investment ( 835 ) ( 953 )

Income tax expense (benefit)

Income tax benefit ( 2,806 ) ( 4,079 )

Net loss $ ( 8,534 ) $ ( 5,962 )

(1) Other cost of sales includes total cost of sales (as presented in the condensed consolidated statements of operations) excluding depreciation, stock-based compensation, restructuring charges, and strategic initiative costs.

5 unchanged sentences

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