Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Apr. 03, 2021 | Jun. 01, 2021 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 3, 2021 | |
Entity Registrant Name | Latham Group, Inc. | |
Title of 12(b) Security | Class A common stock, par value $0.0001 per share | |
Trading Symbol | SWIM | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 120,409,271 | |
Entity Central Index Key | 0001833197 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Apr. 03, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 19,945 | $ 59,310 |
Trade receivables, net | 92,960 | 32,758 |
Inventories, net | 74,131 | 64,818 |
Income tax receivable | 2,107 | 4,377 |
Prepaid expenses and other current assets | 5,685 | 6,063 |
Total current assets | 194,828 | 167,326 |
Property and equipment, net | 50,605 | 47,357 |
Equity method investment | 25,460 | 25,384 |
Deferred tax assets | 345 | 345 |
Deferred offering costs | 4,684 | 1,041 |
Goodwill | 115,610 | 115,750 |
Intangible assets, net | 283,617 | 289,473 |
Total assets | 675,149 | 646,676 |
Current liabilities: | ||
Accounts payable | 39,977 | 29,789 |
Accounts payable - related party | 1,000 | 500 |
Current maturities of long-term debt | 23,047 | 13,042 |
Accrued expenses and other current liabilities | 49,679 | 50,606 |
Total current liabilities | 113,703 | 93,937 |
Long-term debt, net of discount and current portion | 382,917 | 208,454 |
Related party note payable | 64,938 | |
Deferred income tax liabilities, net | 55,472 | 55,193 |
Liability for uncertain tax positions | 5,562 | 5,540 |
Other long-term liabilities | 2,061 | 1,943 |
Total liabilities | 559,715 | 430,005 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.0001 par value; 500,000,000 shares authorized as of April 3, 2021 and December 31, 2020; 109,673,709 shares issued and outstanding as of April 3, 2021 and December 31, 2020 | 11 | 11 |
Additional paid-in capital | 91,943 | 200,541 |
Retained earnings | 22,298 | 13,765 |
Accumulated other comprehensive income | 1,182 | 2,354 |
Total stockholders' equity | 115,434 | 216,671 |
Total liabilities and stockholders' equity | $ 675,149 | $ 646,676 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Apr. 03, 2021 | Dec. 31, 2020 |
Condensed Consolidated Balance Sheets | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 109,673,709 | 109,673,709 |
Common stock, shares outstanding | 109,673,709 | 109,673,709 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Condensed Consolidated Statements of Operations | ||
Net sales | $ 148,746 | $ 51,134 |
Cost of sales | 96,306 | 41,035 |
Gross profit | 52,440 | 10,099 |
Selling, general and administrative expense | 27,172 | 15,432 |
Amortization | 5,595 | 4,063 |
Income (loss) from operations | 19,673 | (9,396) |
Other expense (income): | ||
Interest expense | 9,056 | 5,333 |
Other expense (income), net | (555) | 3,741 |
Total other expense (income), net | 8,501 | 9,074 |
Earnings from equity method investment | 244 | |
Income (loss) before income taxes | 11,416 | (18,470) |
Income tax (benefit) expense | 2,883 | (3,019) |
Net income (loss) | $ 8,533 | $ (15,451) |
Net income (loss) per share attributable to common stockholders: | ||
Basic and diluted | $ 0.08 | $ (0.14) |
Weighted-average common shares outstanding - basic and diluted | ||
Basic and diluted | 109,673,709 | 109,673,709 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||
Net income (loss) | $ 8,533 | $ (15,451) |
Other comprehensive loss, net of tax: | ||
Foreign currency translation adjustments | (407) | (1,938) |
Total other comprehensive loss, net of tax | (407) | (1,938) |
Comprehensive income (loss) | $ 8,126 | $ (17,389) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Total |
Balance, beginning of period at Dec. 31, 2019 | $ 11 | $ 196,473 | $ (2,218) | $ (471) | $ 193,795 |
Balance, beginning of period (in shares) at Dec. 31, 2019 | 109,673,709 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (15,451) | (15,451) | |||
Foreign currency translation adjustments | (1,938) | (1,938) | |||
Distributions to parent | 400 | 400 | |||
Stock-based compensation expense | 224 | 224 | |||
Balance, end of period at Mar. 28, 2020 | $ 11 | 196,297 | (17,669) | (2,409) | 176,230 |
Balance, end of period (in shares) at Mar. 28, 2020 | 109,673,709 | ||||
Balance, beginning of period at Dec. 31, 2020 | $ 11 | 200,541 | 13,765 | 2,354 | 216,671 |
Balance, beginning of period (in shares) at Dec. 31, 2020 | 109,673,709 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 8,533 | 8,533 | |||
Foreign currency translation adjustments | (1,172) | (1,172) | |||
Dividend | (110,033) | (110,033) | |||
Distributions to parent | (29) | (29) | |||
Stock-based compensation expense | 1,464 | 1,464 | |||
Balance, end of period at Apr. 03, 2021 | $ 11 | $ 91,943 | $ 22,298 | $ 1,182 | $ 115,434 |
Balance, end of period (in shares) at Apr. 03, 2021 | 109,673,709 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity - (Parenthetical) | 3 Months Ended |
Apr. 03, 2021$ / shares | |
Condensed Consolidated Statements of Stockholders' Equity | |
Dividend per share | $ 1 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 8,533 | $ (15,451) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 7,900 | 5,755 |
Amortization of deferred financing costs and debt discount | 2,804 | 912 |
Stock-based compensation expense | 1,464 | 224 |
Other non-cash | 1,433 | 739 |
Earnings from equity method investment | (244) | |
Distribution received from equity method investment | 168 | |
Changes in operating assets and liabilities: | ||
Trade receivables | (60,963) | (13,322) |
Inventories | (9,238) | (10,914) |
Prepaid expenses and other current assets | 119 | 784 |
Income tax receivable | (2,107) | (2,866) |
Accounts payable | 8,642 | 9,468 |
Accrued expenses and other current liabilities | (4,074) | (1,652) |
Other long-term liabilities | 4,545 | 35 |
Net cash used in operating activities | (41,018) | (26,288) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (4,608) | (2,790) |
Proceeds from the sale of property and equipment | 1 | |
Net cash used in investing activities | (4,608) | (2,789) |
Cash flows from financing activities: | ||
Proceeds from borrowings on the term loan | 172,813 | |
Payments on term loan borrowings | (5,762) | |
Proceeds from borrowings on the revolving credit facility | 16,000 | 5,000 |
Deferred financing fees paid | (1,250) | |
Distributions to parent | (29) | (400) |
Payment of related party note payable | (64,938) | |
Dividend to parent | (110,033) | |
Payments of initial public offering costs | (747) | |
Net cash provided by financing activities | 6,054 | 4,600 |
Effect of exchange rate changes on cash | 207 | (1,694) |
Net decrease in cash | (39,365) | (26,171) |
Cash at beginning of period | 59,310 | 56,655 |
Cash at end of period | 19,945 | 30,484 |
Supplemental cash flow information: | ||
Cash paid for interest | 5,892 | 4,420 |
Income taxes paid, net | 502 | 63 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Purchases of property and equipment included in accounts payable and accrued expenses | 1,144 | $ 269 |
Capitalized internal-use software included in accounts payable - related party | 500 | |
Deferred offering costs included in accrued expenses | $ 2,896 |
NATURE OF THE BUSINESS
NATURE OF THE BUSINESS | 3 Months Ended |
Apr. 03, 2021 | |
NATURE OF THE BUSINESS | |
NATURE OF THE BUSINESS | 1. NATURE OF THE BUSINESS Latham Group, Inc. (“the Company”) wholly owns Latham Pool Products, Inc. (“Latham Pool Products”) (together, “Latham”) and is a designer, manufacturer and marketer of in-ground residential swimming pools in North America, Australia and New Zealand. Latham offers a portfolio of pools and related products, including in-ground swimming pools, pool liners and pool covers. Latham Topco, Inc. was incorporated in the State of Delaware on December 6, 2018. Latham Topco, Inc. changed its name to Latham Group, Inc. on March 3, 2021. On December 18, 2018, an investment fund managed by affiliates of Pamplona Capital Management (the “Sponsor”), Wynnchurch Capital, L.P. and management acquired all of our outstanding equity interests through the newly formed entities (the “Acquisition”). On April 27, 2021, the Company completed its initial public offering (the “IPO”), pursuant to which it issued and sold 23,000,000 shares of common stock, inclusive of 3,000,000 shares sold by the Company pursuant to the full exercise of the underwriters’ option to purchase additional shares. The aggregate net proceeds received by the Company from the IPO were $400.1 million, after deducting underwriting discounts and commissions and other offering costs. The Company used the net proceeds to (i) pay down $152.7 million of the Amended Term Loan (as defined below) under the Credit Agreement (as defined below), (ii) repay the $16.0 million outstanding on the Revolving Credit Facility (as defined below), (iii) repurchase 12,264,438 shares of common stock from certain existing shareholders for $216.7 million and (iv) fund general corporate requirements, including working capital, for $14.7 million. Prior to the closing of the Company’s IPO, the Company’s parent entity, Latham Investment Holdings, LP (“Parent”) merged with and into Latham Group, Inc., with Latham Group, Inc. surviving the merger (the “Reorganization”). The purpose of the Reorganization was to reorganize the Company’s structure so that its existing investors would own only common stock rather than limited partnership interests in the Company’s Parent. In connection with the Reorganization, holders of Class A units of the Parent received shares of the Company’s common stock and Class B units of the Parent were exchanged for an economically equivalent number of restricted and unrestricted shares of the Company’s common stock. During the fiscal quarter ended July 3, 2021, the Company recorded a stock-based compensation charge of $49.5 million in connection with the Reorganization due to modifications made to the Class B units upon their exchange for common stock that provided accelerated vesting of certain time-vesting units and removed the performance vesting criteria on the performance-vesting units, which resulted in incremental fair value resulting from the replacement of Class B time-vesting units and performance-vesting units into common stock. Impact of COVID‑19 Pandemic Since the onset of the COVID‑19 pandemic, the Company has been focused on protecting its employees’ health and safety, meeting its customers’ needs as they navigate an uncertain financial and operating environment, working closely with its suppliers to protect its ongoing business operations and rapidly adjusting its short-, medium- and long-term operational plans to proactively and effectively respond to the current and potential future public health crises. The Company continues to monitor the evolving COVID‑19 pandemic and the impact on its business and financial results. We expect the impact of the pandemic on our business and financial results in 2021 will continue to vary by location and depend on numerous evolving factors that we are not able to accurately predict. These factors include the duration and scope of the pandemic, global economic conditions during and after the pandemic, governmental actions that have been taken (or may be taken in the future) in response to the pandemic and changes in customer and supplier behavior in response to the pandemic. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Apr. 03, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company’s unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Unaudited Interim Financial Information The consolidated balance sheet at December 31, 2020 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 3, 2021 and for the fiscal quarters ended April 3, 2021 and March 28, 2020 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with Latham Group, Inc.’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2020 included in the Company’s Registration Statement on Form S‑1, as amended, File No. 333‑254930 on file with the SEC. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s financial position as of April 3, 2021 and results of operations for the fiscal quarters ended April 3, 2021 and March 28, 2020 and cash flows for the fiscal quarters ended April 3, 2021 and March 28, 2020 have been made. The Company’s results of operations for the fiscal quarter ended April 3, 2021 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2021. Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are evaluated on an ongoing basis and revised as there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Seasonality Although the Company generally has demand for its products throughout the 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 spring and summer, representing the peak months of swimming pool use, pool installation and remodeling and repair activities. Sales periods having severe weather may also affect net sales. Accounting Policies Refer to the Company’s final prospectus for the IPO filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on April 26, 2021 (“the Prospectus ”) for a discussion of the Company’s accounting policies, as updated below. Equity Method Investments Investments and ownership interests in common stock or in-substance common stock are accounted for under the equity method accounting if the Company has the ability to exercise significant influence over the entity, but does not have a controlling financial interest. Under the equity method, investments are initially recognized at cost and adjusted to reflect the Company’s interest in net earnings, dividends received and other-than-temporary impairments. The Company records its interest in the net earnings of its equity method investee, along with adjustments for amortization of basis differences, investee capital transactions and other comprehensive income (loss), within earnings from equity method investment in the condensed consolidated statements of operations. Basis differences represent differences between the cost of the investment and the underlying equity in net assets of the investment and are generally amortized over the lives of the related assets that gave rise to the underlying basis differences. Profits or losses related to intra-entity sales with its equity method investee are eliminated until realized by the investor or investee. The Company records its proportionate share of earnings or losses of Premier Holdco, LLC (“Premier Pools & Spas”) within earnings from equity method investment in the condensed consolidated statements of operations on a three-month lag. The Company recorded its interest in the net earnings of Premier Pools & Spas of $0.2 million for the period from October 30, 2020 through December 31, 2020, which included a $0.1 million adjustment for the amortization of basis differences, within earnings from equity method investment in the condensed consolidated statements of operations during the fiscal quarter ended April 3, 2021. The Company also received a distribution of $0.2 million during the fiscal quarter ended April 3, 2021. For presentation in the condensed consolidated statements of cash flows, the Company utilizes the cumulative earnings approach for purposes of determining whether distributions should be classified as either a return on investment, which are be included in operating activities, or a return of investment, which would be included in investing activities. Under the cumulative earnings approach, the Company compares the distributions received to its cumulative equity-method earnings since inception. Any distributions received up to the amount of cumulative equity earnings are be considered a return on investment and classified in operating activities. Any excess distributions would be considered a return of investment and classified in investing activities. Equity method goodwill is not amortized or tested for impairment; instead the Company evaluates equity method investments for impairment when events or changes in circumstances indicate that the decline in value below the carrying amount of its equity method investment is determined to be other than temporary. In such a case, the decline in value below the carrying amount of its equity method investment is recognized in the condensed consolidated statements of operations in the period the impairment occurs. Recently Issued Accounting Pronouncements The Company qualifies as “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected to “opt in” to the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and nonpublic companies, the Company will adopt the new or revised standard at the time nonpublic companies adopt the new or revised standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies. In February 2016, the FASB issued ASU 2016‑02 , Leases (Topic 842) (“ASU 2016‑02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. In addition, a lessee is required to record (i) a right-of-use asset and a lease liability on its balance sheet for all leases with accounting lease terms of more than 12 months regardless of whether it is an operating or financing lease and (ii) lease expense in its consolidated statement of operations for operating leases and amortization and interest expense in its consolidated statement of operations for financing leases. Leases with a term of 12 months or less may be accounted for similar to prior guidance for operating leases today. In July 2018, the FASB issued ASU No. 2018‑11, Leases (Topic 842) , which added an optional transition method that allows companies to adopt the standard as of the beginning of the year of adoption as opposed to the earliest comparative period presented. In November 2019, the FASB issued guidance delaying the effective date for all entities, except for public business entities. For nonpublic entities, this guidance is effective for annual periods beginning after December 15, 2020. In June 2020, the FASB issued additional guidance delaying the effective date for all entities, except for public business entities. For public entities, ASU 2016‑02 was effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. For nonpublic entities, this guidance is effective for annual periods beginning after December 15, 2021. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016‑02 will have on its consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016‑13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016‑13 replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. In November 2018, the FASB issued ASU 2018‑19, Codification Improvements to Topic 326, Financial Instruments — Credit Losses , which narrowed the scope and changed the effective date for nonpublic entities for ASU 2016‑13. The FASB subsequently issued supplemental guidance within ASU 2019‑05, Financial Instruments — Credit Losses (Topic 326): Targeted Transition Relief (“ASU 2019‑05”). ASU 2019‑05 provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For public entities that are SEC filers, excluding entities eligible to be smaller reporting companies, ASU 2016‑13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, ASU 2016‑13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016‑13 will have on its consolidated financial statements. In August 2017, the FASB issued ASU 2017‑12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017‑12”), which is intended to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its consolidated financial statements. In addition to that main objective, the amendments in the update make certain targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. Additional updates to further clarify the guidance in ASU 2017‑12 were issued by the FASB in October 2018 within ASU 2018‑16. For public entities, the amendment is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For nonpublic entities, ASU 2017‑12 is effective for fiscal years beginning after December 15, 2020 and interim periods beginning after December 15, 2021. Early application is permitted in any interim period after the issuance of the update. The Company is currently evaluating the impact that the adoption of ASU 2017‑12 will have on its consolidated financial statements. In December 2019, the FASB issued ASU 2019‑12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019‑12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019‑12 removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. For public entities, ASU 2019‑12 is effective for annual periods beginning after December 15, 2020, and interim periods within those reporting periods. For nonpublic companies, ASU 2019‑12 is effective for annual periods beginning after December 15, 2021, and interim periods within those reporting periods. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2019‑12 will have on its consolidated financial statements. In January 2020, the FASB issued ASU 2020‑01, Investments — Equity Securities (Topic 321), Investments — Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (“ASU 2020‑01”), which is intended to clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. For public entities, ASU 2020‑01 is effective for annual periods beginning after December 15, 2020, and interim periods within those reporting periods. For nonpublic companies, ASU 2020‑01 is effective for annual periods beginning after December 15, 2021, and interim periods within those reporting periods. The Company is currently evaluating the impact that the adoption of ASU 2020‑01 will have on its consolidated financial statements. In March 2020, the FASB issued ASU 2020‑04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. This guidance is effective for all entities upon issuance on March 12, 2020 and may be applied through December 31, 2022. The expedients and exceptions in this guidance are optional, and the Company is evaluating the potential future financial statement impact of any such expedient or exception that it may elect to apply as the Company evaluates the effects of adopting this guidance on its consolidated financial statements. In January 2021, the FASB issued ASU 2021‑01, Reference Rate Reform (Topic 848): Scope , which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. Specifically, this guidance applies to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. The ASU became effective as of March 12, 2020 and can be adopted anytime during the period of January 1, 2020 through December 31, 2022. The Company is currently evaluating the impact that the adoption of ASU 2021‑01 will have on its consolidated financial statements. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Apr. 03, 2021 | |
ACQUISITIONS | |
ACQUISITIONS | 3. ACQUISITIONS GL International, LLC On October 22, 2020, Latham Pool Products acquired GL International, LLC (“GLI”) for a total purchase price of $79.7 million (the “GLI Acquisition”). The results of GLI’s operations have been included in the condensed consolidated financial statements since that date. GLI specializes in manufacturing custom pool liners and safety covers. As a result, this acquisition expanded the Company’s liner and safety cover product offerings. In connection with the GLI Acquisition, consideration paid was $79.7 million in cash, or $74.7 million net of cash acquired of $5.0 million, and excluding a net working capital adjustment receivable of $0.8 million. The net working capital adjustment receivable was settled during fiscal quarter ended April 3, 2021. The cash consideration was funded from existing cash on hand. The Company incurred $2.4 million in transaction costs. The Company accounted for the GLI Acquisition using the acquisition method of accounting in accordance with FASB ASC 805, Business Combinations (“ASC 805”). This requires that the assets acquired and liabilities assumed be measured at fair value. The Company estimated, using Level 3 inputs, the fair value of certain fixed assets using a combination of the cost approach and the market approach. Inventories were valued using the comparative sales method, less the cost of disposal. Specific to intangible assets, dealer relationships were valued using the multi-period excess earnings method, whereas trade names were valued using the relief from royalty method. The Company recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The following summarizes the purchase price allocation for the GLI Acquisition: (in thousands) October 22, 2020 Total consideration $ 79,743 Allocation of purchase price: Cash 5,007 Trade receivables 10,639 Inventories 11,854 Prepaid expenses and other current assets 3,949 Property and equipment 1,402 Intangible assets 46,700 Total assets acquired 79,551 Accounts payable 3,536 Accrued expenses and other current liabilities 8,853 Other long-term liabilities 524 Total liabilities assumed 12,913 Total fair value of net assets acquired, excluding goodwill: 66,638 Goodwill $ 13,105 The excess of the purchase price over the fair value of the identifiable assets acquired and the liabilities assumed in the acquisition was allocated to goodwill in the amount of $13.1 million. Goodwill resulting from the GLI Acquisition was attributable to the expanded market share and product offerings. Goodwill resulting from the GLI Acquisition is deductible for tax purposes. The Company allocated a portion of the purchase price to specific intangible asset categories as follows: Amortization Fair Value Period Definite-lived intangible assets: (in thousands) (in years) Trade names $ 9,500 9 Dealer relationships 37,200 8 $ 46,700 Pro Forma Financial Information (Unaudited) The following pro forma financial information presents the statements of operations of the Company combined with GLI as if the acquisition occurred on January 1, 2020. The pro forma results do not include any anticipated synergies, cost savings or other expected benefits of an 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, 2020 and is not necessarily indicative of the Company’s future financial results. Fiscal Quarter Ended (in thousands) March 28, 2020 Net sales $ 58,920 Net loss $ (20,828) The pro forma financial information presented above has been calculated after adjusting for the results of the GLI Acquisition for the first fiscal quarter ended March 28, 2020 to reflect the accounting effects as a result of the acquisition, including the amortization expense from acquired intangible assets, the depreciation and amortization expense from acquired property and equipment, the additional cost of sales from acquired inventory, interest expense from debt financing, and any related tax effects. |
EQUITY METHOD INVESTMENT
EQUITY METHOD INVESTMENT | 3 Months Ended |
Apr. 03, 2021 | |
EQUITY METHOD INVESTMENT | |
EQUITY METHOD INVESTMENT | 4. EQUITY METHOD INVESTMENT On October 30, 2020, the Company entered into a securities purchase agreement to purchase 28% of the common units of Premier Pools & Spas for $25.4 million. The Company concluded that it holds common stock of Premier Pools & Spas and has the ability to exercise significant influence over Premier Pools & Spas, but does not have a controlling financial interest. Accordingly, the Company accounts for this investment using the equity method of accounting. The Company’s proportionate share of the earnings or losses of the investee are reported as a separate line in the condensed consolidated statements of operations. Premier Pools & Spas is a holding company for its manufacturing and franchising companies including PFC LLC, Premier Franchise Management LLC, Premier Pools Management LLC, and Premier Fiberglass LLC (the “Premier Companies”). The Premier Companies are a leading swimming pool-building brand that uses its franchisee network to sell and install pools around the United States. In connection with Latham’s Investment in Premier Pools & Spas, the Company entered into an exclusive supply agreement with Premier Pools & Spas, the Premier Companies, and Premier Pools & Spas’ franchisees (“Premier Franchisees”) (together, the “Customer”). Premier Pools & Spas does not consolidate the operations of the Premier Franchisees. Per the supply agreement, Latham is the exclusive supplier of the Premier Franchisees for specific pool and pool products. These products include fiberglass products and package pool products. The initial term of the supply agreement is ten years. For the first three years of the supply agreement, the Customer is entitled to a low-teens percentage rebate for all fiberglass pools sold and an additional growth rebate of a low single-digit to low-teens percentage based on year over year sales growth on fiberglass pools (the “Rebates”). The Rebates will be paid directly to Premier Pools Management Corp. Holdco. As of April 3 , 202 1 , the Company’s carrying amount for the equity method investment in Premier Pools & Spas was $25.4 million. In March, Premier Pools & Spas paid the Company a dividend of $0.2 million that is presented on the condensed consolidated statement of cash flows as distributions received from equity method investment. Because of the three-month financial reporting lag, the Company record ed its interest in the net earnings of Premier Pools & Spas for the period from October 30, 2020 through December 31, 2020 , along with adjustments for amortization of basis differences and any investee capital transactions, during the fiscal quarter ended April 3, 2021. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Apr. 03, 2021 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 5. FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value. Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs, other than quoted prices in active markets, that are observable either directly or indirectly. Level 3 — Unobservable inputs that reflect the Company’s own assumptions incorporated into valuation techniques. These valuations require significant judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. When there is more than one input at different levels within the hierarchy, the fair value is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Assessment of the significance of a particular input to the fair value measurement in its entirety requires substantial judgment and consideration of factors specific to the asset or liability. Level 3 inputs are inherently difficult to estimate. Changes to these inputs can have significant impact on fair value measurements. Assets and liabilities measured at fair value using Level 3 inputs are based on one or more of the following valuation techniques: market approach, income approach or cost approach. There were no transfers between fair value measurement levels during the fiscal quarters ended April 3, 2021 or March 28, 2020. Assets and liabilities measured at fair value on a nonrecurring basis The Company’s non-financial assets such as goodwill, intangible assets and property and equipment are measured at fair value upon acquisition or remeasured to fair value when an impairment charge is recognized. Such fair value measurements are based predominantly on Level 2 and Level 3 inputs. Assets and liabilities measured at fair value on a recurring basis On May 31, 2019 (the “Acquisition Date”), Latham Pool Products acquired Narellan Group Pty Limited and its subsidiaries (collectively “Narellan”) for a total purchase price of $35.2 million (the “Narellan Acquisition”). In connection with the Narellan Acquisition, consideration paid included $20.2 million in cash, $7.6 million in equity consideration and $7.4 million of contingent consideration as of the Acquisition Date. The Company agreed to pay the contingent consideration in the form of cash and equity consideration to the seller if certain EBITDA targets were achieved for any of the trailing twelve months periods ended December 31, 2019, June 30, 2020 or the year ended December 31, 2020 (the “Contingent Consideration”). The fair value of the Contingent Consideration at the Acquisition Date was $7.4 million. On September 25, 2020, the Company amended the terms of the Narellan Share Purchase Agreement and settled the Contingent Consideration with the selling shareholders of Narellan based upon estimated EBITDA for the year ended December 31, 2020. The fair value of the Company’s Contingent Consideration is measured and recorded on the condensed consolidated balance sheets using Level 3 inputs because it is valued based on unobservable inputs and other estimation techniques due to the absence of quoted market prices. The Company values the Contingent Consideration using a Monte Carlo simulation, which relies on management’s projections of EBITDA and the estimated probability of achieving such targets. The change in the fair value of the Contingent Consideration for the fiscal quarter ended March 28, 2020 of $(1.1) million was due to foreign currency translation. Estimates of fair value are subjective in nature, involve uncertainties and matters of significant judgment, and are made at a specific point in time. Thus, changes in key assumptions from period to period could significantly affect the estimate of fair value. The Monte Carlo simulation utilized the following unobservable inputs to determine the fair value of the Contingent Consideration as of March 28, 2020: Fiscal Quarter Ended March 28, 2020 EBITDA risk adjustment 17.30 % Annual EBITDA volatility 55.00 % Risk-free rate of return 2.10 % Pension Plan The fair value of the benefit plan assets related to the Company’s pension plan is measured and was recorded on the condensed consolidated balance sheets using Level 2 inputs. The fair value of the Company’s plan assets was $1.2 million as of March 28, 2020. During the year ended December 31, 2020, the Company terminated its defined benefit pension plan. Fair value of financial instruments The Company considers the carrying amounts of cash, trade receivables, prepaid expenses and other current assets, accounts payable, and accrued expenses and other current liabilities, to approximate fair value due to the short-term maturities of these instruments. Term loan The term loan is carried at amortized cost; however, the Company estimates the fair value of the term loan for disclosure purposes. The fair value of the term loan is determined using inputs based on observable market data of a non-public exchange using, which are classified as Level 2 inputs. The following table sets forth the carrying amount and fair value of the term loan (in thousands): April 3, 2021 December 31, 2020 Carrying Estimated Carrying Estimated Value Fair Value Value Fair Value Term loan $ 389,964 $ 390,638 $ 221,496 $ 221,081 Interest rate swap The Company estimates the fair value of the interest rate swap (see Note 8 ) on a quarterly basis using Level 2 inputs, including the forward LIBOR curve. The fair value is estimated by comparing (i) the present value of all future monthly fixed rate payments versus (ii) the variable payments based on the forward LIBOR curve. As of April 3, 2021 and December 31, 2020, the Company’s interest rate swap liability was $ 0.5 million and $0.3 million, respectively, which was recorded within other long-term liabilities on the condensed consolidated balance sheets. |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, NET | 3 Months Ended |
Apr. 03, 2021 | |
GOODWILL AND INTANGIBLE ASSETS, NET | |
GOODWILL AND INTANGIBLE ASSETS, NET | 6. GOODWILL AND INTANGIBLE ASSETS, NET Goodwill The carrying amount of goodwill for the fiscal quarter ended April 3, 2021 and the year ended December 31, 2020 was $115.6 million and $115.8 million, respectively. The change in the carrying value during the fiscal quarter ended April 3, 2021 was solely due to fluctuations in foreign currency exchange rates. Intangible Assets Intangible assets, net as of April 3, 2021 consisted of the following (in thousands): April 3, 2021 Gross Foreign Carrying Currency Accumulated Net Amount Translation Amortization Amount Trade names and trademarks $ 135,100 $ 912 $ 11,808 $ 124,204 Patented technology 16,126 134 3,898 12,362 Pool designs 5,728 547 752 5,523 Franchise relationships 1,187 113 546 754 Dealer relationships 160,376 45 20,989 139,432 Non-competition agreements 2,476 — 1,134 1,342 $ 320,993 $ 1,751 $ 39,127 $ 283,617 The Company recognized $5.6 million of amortization expense related to intangible assets during the fiscal quarter ended April 3, 2021. Intangible assets, net as of December 31, 2020 consisted of the following (in thousands): December 31, 2020 Gross Foreign Carrying Currency Accumulated Net Amount Translation Amortization Amount Trade names and trademarks $ 135,100 $ 1,047 $ 10,258 $ 125,889 Patented technology 16,126 155 3,452 12,829 Pool designs 5,728 629 648 5,709 Franchise relationships 1,187 130 470 847 Dealer relationships 160,376 52 17,697 142,731 Non-competition agreements 2,476 — 1,008 1,468 $ 320,993 $ 2,013 $ 33,533 $ 289,473 The Company recognized $4.1 million of amortization expense related to intangible assets during the fiscal quarter ended March 28, 2020. The Company estimates that amortization expense related to definite-lived intangible assets will be as follows in each of the next five years and thereafter (in thousands): Estimated Future Year Ended Amortization Expense Remainder of fiscal 2021 $ 16,364 2022 21,959 2023 21,768 2024 20,948 2025 20,791 Thereafter 181,787 $ 283,617 |
INVENTORIES, NET
INVENTORIES, NET | 3 Months Ended |
Apr. 03, 2021 | |
INVENTORIES, NET | |
INVENTORIES, NET | 7. INVENTORIES, NET Inventories, net consisted of the following (in thousands): April 3, December 31, 2021 2020 Raw materials $ 44,472 $ 37,010 Finished goods 29,659 27,808 $ 74,131 $ 64,818 |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Apr. 03, 2021 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 8. LONG-TERM DEBT The components of the Company’s outstanding debt obligations consisted of the following (in thousands): April 3, December 31, 2021 2020 Term loan $ 397,385 $ 228,147 Revolver 16,000 — Less: Unamortized discount and debt issuance costs (7,421) (6,651) Total debt 405,964 221,496 Less: Current portion of long-term debt (23,047) (13,042) Total long-term debt $ 382,917 $ 208,454 Revolving Credit Facility On December 18, 2018, the Latham Pool Products entered into an agreement (the “Credit Agreement”) with Nomura Corporate Funding Americas, LLC (“Nomura”) that included a revolving line of credit (the “Revolver”) and letters of credit (“Letters of Credit” or collectively with the Revolver, the “Revolving Credit Facility”), as well as a term loan (as described below). The Revolving Credit Facility was utilized to finance ongoing general corporate and working capital needs with the Revolver of up to $30.0 million. The Revolving Credit Facility matures on December 18, 2023. The Revolving Credit Facility allows for either Eurocurrency borrowings, bearing interest ranging from 4.50% to 4.75%, or base rate borrowings, bearing interest ranging from 3.50% to 3.75% depending on the First Lien Net Leverage Ratio, as defined in the Credit Agreement. 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 is equal to the applicable margin times the actual daily amount by which the $30.0 million initial commitment exceeds the sum of the outstanding borrowings under the Revolver and outstanding Letters of Credit obligations. The applicable margin ranges from 0.375% to 0.500% as determined by the Company’s First Lien Net Leverage Ratio as defined in the Credit Agreement. The Company is required to meet certain financial covenants, including maintaining specific liquidity measurements. There are also negative covenants, including certain restrictions on the Company’s ability to incur additional indebtedness, create liens, make investments, consolidate or merge with other entities, enter into transactions with affiliates and make prepayments. As of April 3, 2021 and December 31, 2020, the Company was in compliance with all financial-related covenants related to the Credit Agreement. There was $16.0 million outstanding as of April 3, 2021 and no amounts outstanding as of December 31, 2020 on the Revolving Credit Facility or Letters of Credit. Term Loan Facility On December 18, 2018, in connection with the Acquisition, the Company entered into the Credit Agreement with Nomura to borrow $215.0 million (the “Original Term Loan”). The Company incurred debt issuance costs of $11.5 million related to the transaction. The Original Term Loan was amended on May 29, 2019, to provide additional borrowings of $23.0 million at a discount of $0.7 million (the “First Amendment”) to fund the Narellan Acquisition. Any portion of the First Amendment not used to fund the Narellan Acquisition was required to be applied to repay the First Amendment in an aggregate amount equal to such portion of the First Amendment, without any premium or penalty. On August 6, 2020, the Company entered into a Form of Affiliated Lender Assignment and Assumption with Nomura (the “Assignment”). Under the Assignment, the Company repaid $5.0 million of the outstanding principal balance. On October 14, 2020, the Company entered into a subsequent amendment under the Original Term Loan with Nomura to borrow an additional $20.0 million (the “Second Amendment” and collectively with the Original Term Loan and the First Amendment, the “Term Loan”). The Company accounted for the borrowings under the Second Amendment as new debt and recorded $0.1 million of third-party costs as a direct reduction to the carrying amount of long-term debt on the condensed consolidated balance sheet. There were no financing costs incurred with the Second Amendment. The Term Loan has a maturity date of June 18, 2025. Interest and principal payments are due quarterly. On January 25, 2021, the Company entered into a subsequent amendment to the Term Loan with Nomura to borrow an additional $175.0 million (the “Third Amendment” and collectively with the “Term Loan”, the “Amended Term Loan”). In connection with the Third Amendment, the Company is required to repay the outstanding principal balance of the Amended Term Loan in fixed quarterly payments of $5.8 million, commencing March 31, 2021. The amendment did not change the maturity date of the Term Loan and the Amended Term Loan bears interest under the same terms as the Term Loan. The Company accounted for $165.0 million of the borrowings under the Third Amendment as new debt and $10.0 million of the borrowings under the Third Amendment as a debt modification. The Company recorded an aggregate of $1.2 million of debt issuance costs as a direct reduction to the carrying amount of long-term debt on the condensed consolidated balance sheet. The Amended Term Loan allowed for the $175.0 million of proceeds to be distributed to Parent. On February 2, 2021, the Company used the proceeds of the Amended Term Loan to settle in full the note payable to Parent of $64.9 million and to pay a dividend to Parent of $110.0 million. The Term Loan bears interest at (1) a base rate equal to the highest of (i) the Federal Funds Rate plus 1∕2 of 1%, (ii) the “prime rate” published in the Money Rates section of the Wall Street Journal and (iii) LIBOR plus 1.00% (2) plus a Loan Margin of (i) 6.00% for Eurocurrency Rate Loans and (ii) 5.00% for Base Rate Loans, as defined in the Credit Agreement. Principal payments under the First Amendment were calculated as 0.629% of the outstanding principal balance. Outstanding borrowings at April 3, 2021 and December 31, 2020 were $390.0 million and $221.5 million, respectively, net of discount and debt issuance costs of $7.4 million and $6.7 million, respectively. In connection with the Term Loan, the Company is subject to various financial reporting, financial and other covenants, including maintaining specific liquidity measurements. As of April 3, 2021, the unamortized debt issuance costs and discount on the Term Loan were $5.6 million and $1.8 million, respectively. As of December 31, 2020, the unamortized debt issuance costs and discount on the Term Loan were $6.3 million and $0.4 million, respectively. The effective interest rate was 9.36% and 8.03% for the fiscal quarter ended April 3, 2021 and year ended December 31, 2020, respectively. Interest rate risk associated with the Company’s Credit Agreement is managed through an interest rate swap which the Company executed on April 30, 2020. The swap has an effective date of May 18, 2020 and a termination date of May 18, 2023. Under the terms of the swap, the Company fixed its LIBOR borrowing rate at 0.442% on a notional amount of $200.0 million. The interest rate swap is not designated as a hedging instrument for accounting purposes (see Note 2 and Note 5). The Company recorded interest expense associated with the Revolving Credit Facility, Second Amendment, Third Amendment and interest rate swap, as follows (in thousands): April 3, 2021 March 28, 2020 Interest expense $ 5,892 $ 4,420 Amortization of debt issuance costs 2,073 859 Amortization of original issue discount 732 54 Interest rate swap 359 — Total interest expense $ 9,056 $ 5,333 Principal payments due on the outstanding debt in the next five fiscal years, excluding any potential payments based on excess cash flow levels, are as follows (in thousands): Term Loan Year Ended Facility Remainder of fiscal 2021 $ 17,284 2022 23,047 2023 23,047 2024 23,047 2025 310,960 $ 397,385 The obligations under the Credit Agreement are guaranteed by certain wholly owned subsidiaries (the “Guarantors”) of the Company as defined in the security agreement. The obligations under the Credit Agreement are secured by substantially all of the Guarantors’ tangible and intangible assets, including their accounts receivables, equipment, intellectual property, inventory, cash and cash equivalents, deposit accounts and security accounts. The Credit Agreement also restricts payments and other distributions unless certain conditions are met, which could restrict the Company’s ability to pay dividends. |
PRODUCT WARRANTIES
PRODUCT WARRANTIES | 3 Months Ended |
Apr. 03, 2021 | |
PRODUCT WARRANTIES | |
PRODUCT WARRANTIES | 9. PRODUCT WARRANTIES The warranty reserve activity consisted of the following (in thousands): Fiscal Quarter Year Ended Ended April 3, December 2021 31, 2020 Balance at the beginning of the period $ 2,882 $ 2,846 Accruals for warranties issued 1,706 3,966 Warranty liabilities assumed in GLI Acquisition — 118 Less: Settlements made (in cash or in kind) (1,077) (4,048) Balance at the end of the period 3,511 2,882 Less: Current portion of accrued warranty costs (3,313) (2,705) Accrued warranty costs – less current portion $ 198 $ 177 |
NET SALES
NET SALES | 3 Months Ended |
Apr. 03, 2021 | |
NET SALES | |
NET SALES | 10. NET SALES The following table sets forth the Company’s disaggregation of net sales by product line (in thousands): Fiscal Quarter Ended, April 3, 2021 March 28, 2020 In-ground Swimming Pools $ 93,643 $ 29,458 Covers 24,006 11,011 Liners 31,097 10,665 $ 148,746 $ 51,134 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Apr. 03, 2021 | |
INCOME TAXES | |
INCOME TAXES | 1 1 . INCOME TAXES The effective income tax rate for the fiscal quarter ended April 3, 2021 was 25.26%, compared to 16.34% for the fiscal quarter ended March 28, 2020. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the tax expense during the fiscal quarter ended April 3, 2021 was impacted primarily by state income tax expense. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the tax benefit during the fiscal quarter ended March 28, 2020 was primarily attributable to the benefit related to the year-to-date foreign losses in Canada. |
PROFITS INTEREST UNITS
PROFITS INTEREST UNITS | 3 Months Ended |
Apr. 03, 2021 | |
PROFITS INTEREST UNITS | |
PROFITS INTEREST UNITS | 12. PROFITS INTEREST UNITS On January 29, 2021 an employee holder of profits interest units terminated his employment with the Company, at which time all 1,055,057 of his performance-vesting units were forfeited. At the time of his termination, the employee held 527,528 of time-vesting units, of which 211,011 time-vesting units were vested. Per the terms of his termination agreement, the Company accelerated the vesting of an additional 105,506 time-vesting units, such that the total time-vesting units vested were equal to 316,517 upon his termination and the remaining 211,011 of unvested time-vesting units were forfeited upon his termination. As the employee’s profits interest units had not vested from an accounting perspective, the retention and immediate vesting of the retained time-vesting units was accounted for as a cancellation of the original award and a new grant under the revised terms. A cumulative catch-up charge of $1.1 million was recorded during the fiscal quarter ended April 3, 2021 to reflect the incremental fair value of the awards as of the date of the modification, as compared to the grant-date fair value. The effective income tax rate for the fiscal quarter ended April 3, 2021 was 25.26%, compared to 16.34% for the fiscal quarter ended March 28, 2020. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the fiscal quarter ended April 3, 2021 was impacted primarily by state income tax expense . The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the fiscal quarter ended March 28, 2020 was impacted by a variety of factors, primarily attributable to the benefit related to the year-to-date foreign losses in Canada. |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 3 Months Ended |
Apr. 03, 2021 | |
NET INCOME (LOSS) PER SHARE | |
NET INCOME (LOSS) PER SHARE | 13. 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, April 3, 2021 March 28, 2020 Numerator: Net income (loss) attributable to common stockholders $ 8,533 $ (15,451) Denominator: Weighted-average common shares outstanding, basic and diluted 109,673,709 109,673,709 Net income (loss) per share attributable to common stockholders, basic and diluted $ 0.08 $ (0.14) There were no potentially dilutive securities outstanding during the fiscal quarters ended April 3, 2021 or March 28, 2020. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Apr. 03, 2021 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 14. RELATED PARTY TRANSACTIONS BrightAI Services Starting in 2020, BrightAI rendered services to the Company, for which the cost was capitalized as internal-use software. A co-founder of BrightAI Services has served on the Company’s board of directors since December 9, 2020. During the fiscal quarter ended April 3, 2021 and the year ended December 31, 2020, the Company incurred $0.5 million and $0.5 million, respectively, associated with services performed by BrightAI, which is recorded as construction in progress within property and equipment, net and accounts payable — related party on the condensed consolidated balance sheets as of April 3, 2021. There were no services rendered by BrightAI during the fiscal quarter ended March 28, 2020. Purchase of Treasury Stock On October 14 and 20, 2020, Parent contributed an aggregate of $64.9 million to the Company in exchange for an aggregate of 32,902,113 shares of the Company’s common stock. On December 28, 2020, the Company repurchased and retired those 32,902,113 shares in exchange for a note payable in the amount of $64.9 million. Expense Reimbursement and Management Fees The Company had an expense reimbursement agreement (the “management fee arrangement”) with the Sponsor and Wynnchurch Capital, L.P. for ongoing consulting and advisory services. The management fee arrangement provided for the aggregate payment of up to $1.0 million each year for reimbursement of expenses incurred with services provided and, depending on the extent of services provided, management fees. The management fee arrangement terminated upon consummation of the Company’s IPO. There were no management fees incurred by the Company during the fiscal quarters ended April 3, 2021 and March 28, 2020. As of April 3, 2021 and March 28, 2020, there were no outstanding amounts payable to the Sponsor and Wynnchurch Capital, L.P. Operating Lease In May 2019, in connection with the Narellan Acquisition, the Company assumed an operating lease for the manufacture, sale and storage of swimming pools and associated equipment with Acquigen Pty Ltd, which is owned by an employee who is also a shareholder of the Company. The lease expires in June 2028. As of April 3, 2021 and December 31, 2020, future minimum lease payments totaled $3.7 million and $4.2 million, respectively, related to this lease. The Company recognized $0.1 million of rent expense related to this lease during each of the fiscal quarters ended April 3, 2021 and March 28, 2020, which is recognized within selling, general and administrative expense on the condensed consolidated statements of operations. |
SEGMENT AND GEOGRAPHIC INFORMAT
SEGMENT AND GEOGRAPHIC INFORMATION | 3 Months Ended |
Apr. 03, 2021 | |
SEGMENT AND GEOGRAPHIC INFORMATION | |
SEGMENT AND GEOGRAPHIC INFORMATION | 15. SEGMENT AND GEOGRAPHIC INFORMATION Segment Information During 2020, the Company made operational changes in how its CODM manages the business including organizational alignment, performance assessment and resource allocation. The segment disclosure is based on the intention to provide the users of the financial statements with a view of the business from the Company’s perspective. The Company conducts its business as one operating and reportable segment that designs, manufactures and markets in-ground swimming pools, liners and covers. Geographic Information Net sales by geography is based on the delivery address of the customer as specified in purchase order. Net sales by geographic area was as follows (in thousands): Fiscal Quarter Ended April 3, 2021 March 28, 2020 Net sales United States $ 119,070 $ 39,006 Canada 21,115 5,942 Australia 5,750 4,117 New Zealand 1,756 647 Other 1,055 1,422 Total $ 148,746 $ 51,134 Our long-lived assets by geographic area, which consist of property and equipment, net assets were as follows (in thousands): April 3, December 2021 31, 2020 Long-lived assets United States $ 41,458 $ 37,680 Canada 2,899 3,050 Australia 4,582 4,979 New Zealand 1,666 1,648 Total $ 50,605 $ 47,357 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Apr. 03, 2021 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 16. SUBSEQUENT EVENTS In connection with the Company’s IPO, 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, the date on which the Registration Statement was declared effective. 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, will be $750 thousand. If any award granted under the Omnibus Incentive Plan expires, terminates, or is canceled or forfeited without being settled, vested or exercised, shares of the Company’s common stock subject to such award will again be made available for future grants. Any shares that are surrendered or tendered to pay the exercise price of an award or to satisfy withholding taxes owed, or any shares reserved for issuance, but not issued, with respect to settlement of a stock appreciation right, will not again be available for grant under the Omnibus Incentive Plan. On April 13, 2021, the Company’s certificate of incorporation was amended, which amended and restated certain terms of the certificate of incorporation. Under the amended certificate of incorporation, the Company had authority to issue 500,000,000 shares of common stock, par value $0.0001 per share. On April 12, 2021, the Company’s board of directors declared and 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 unaudited condensed consolidated financial statements and notes thereto have been adjusted retroactively to reflect the impact of the amended certificate of incorporation and the stock split. Contemporaneous with the pricing of the Company’s IPO, on April 22, 2021 the Company granted 8,340,126 of restricted stock awards, 341,301 of restricted stock units and 886,862 of option awards under the Omnibus Incentive Plan to employees of the Company. Of the 8,340,126 restricted stock awards granted, (i) 6,799,414 vest every six months in equal installments beginning on December 27, 2021 and ending on December 27, 2023, and (ii) 1,540,712 vest every six months in equal installments, beginning on December 27, 2021 and ending on December 27, 2024. Of the 341,301 restricted stock unit awards granted, (i) 251,828 vest 1/3 on the nine-month anniversary of April 27, 2021 (“the closing of the IPO”), 1/3 on the first anniversary of the closing of the IPO, and 1/3 on the two-year anniversary of the closing of the IPO; (ii) 22,367 vest on the first anniversary of the closing of the IPO; (iii) 51,316 vest on the nine-month anniversary of the closing of the IPO; and (iv) 15,790 vest evenly on each of the first three anniversaries of the closing of the IPO. All 886,862 of the option awards vest 25% annually on each of the first four anniversaries of the closing of the IPO. The option awards were granted with a strike price of $19.00 per share. The tax effects of the Omnibus Incentive Plan have not been considered as part of tax expense for the fiscal quarter ended April 3, 2021. On May 24, 2021, the compensation committee accelerated the vesting of 84,687 shares of restricted stock, which resulted in the Company recording stock-based compensation expense of $1.6 million related to the acceleration. On April 22, 2021, the Company’s certificate of incorporation was further amended and restated to, among other things, increase the authorized shares to 1,000,000,000, of which 900,000,000 are shares of common stock, par value $0.0001 per share and 100,000,000 are shares of preferred stock, par value 0.0001 per share. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Apr. 03, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company’s unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Unaudited Interim Financial Information The consolidated balance sheet at December 31, 2020 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 3, 2021 and for the fiscal quarters ended April 3, 2021 and March 28, 2020 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with Latham Group, Inc.’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2020 included in the Company’s Registration Statement on Form S‑1, as amended, File No. 333‑254930 on file with the SEC. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s financial position as of April 3, 2021 and results of operations for the fiscal quarters ended April 3, 2021 and March 28, 2020 and cash flows for the fiscal quarters ended April 3, 2021 and March 28, 2020 have been made. The Company’s results of operations for the fiscal quarter ended April 3, 2021 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2021. |
Use of Estimates | Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are evaluated on an ongoing basis and revised as there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. |
Seasonality | Seasonality Although the Company generally has demand for its products throughout the 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 spring and summer, representing the peak months of swimming pool use, pool installation and remodeling and repair activities. Sales periods having severe weather may also affect net sales. Accounting Policies Refer to the Company’s final prospectus for the IPO filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on April 26, 2021 (“the Prospectus ”) for a discussion of the Company’s accounting policies, as updated below. |
Equity Method Investments | Equity Method Investments Investments and ownership interests in common stock or in-substance common stock are accounted for under the equity method accounting if the Company has the ability to exercise significant influence over the entity, but does not have a controlling financial interest. Under the equity method, investments are initially recognized at cost and adjusted to reflect the Company’s interest in net earnings, dividends received and other-than-temporary impairments. The Company records its interest in the net earnings of its equity method investee, along with adjustments for amortization of basis differences, investee capital transactions and other comprehensive income (loss), within earnings from equity method investment in the condensed consolidated statements of operations. Basis differences represent differences between the cost of the investment and the underlying equity in net assets of the investment and are generally amortized over the lives of the related assets that gave rise to the underlying basis differences. Profits or losses related to intra-entity sales with its equity method investee are eliminated until realized by the investor or investee. The Company records its proportionate share of earnings or losses of Premier Holdco, LLC (“Premier Pools & Spas”) within earnings from equity method investment in the condensed consolidated statements of operations on a three-month lag. The Company recorded its interest in the net earnings of Premier Pools & Spas of $0.2 million for the period from October 30, 2020 through December 31, 2020, which included a $0.1 million adjustment for the amortization of basis differences, within earnings from equity method investment in the condensed consolidated statements of operations during the fiscal quarter ended April 3, 2021. The Company also received a distribution of $0.2 million during the fiscal quarter ended April 3, 2021. For presentation in the condensed consolidated statements of cash flows, the Company utilizes the cumulative earnings approach for purposes of determining whether distributions should be classified as either a return on investment, which are be included in operating activities, or a return of investment, which would be included in investing activities. Under the cumulative earnings approach, the Company compares the distributions received to its cumulative equity-method earnings since inception. Any distributions received up to the amount of cumulative equity earnings are be considered a return on investment and classified in operating activities. Any excess distributions would be considered a return of investment and classified in investing activities. Equity method goodwill is not amortized or tested for impairment; instead the Company evaluates equity method investments for impairment when events or changes in circumstances indicate that the decline in value below the carrying amount of its equity method investment is determined to be other than temporary. In such a case, the decline in value below the carrying amount of its equity method investment is recognized in the condensed consolidated statements of operations in the period the impairment occurs. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The Company qualifies as “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected to “opt in” to the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and nonpublic companies, the Company will adopt the new or revised standard at the time nonpublic companies adopt the new or revised standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies. In February 2016, the FASB issued ASU 2016‑02 , Leases (Topic 842) (“ASU 2016‑02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. In addition, a lessee is required to record (i) a right-of-use asset and a lease liability on its balance sheet for all leases with accounting lease terms of more than 12 months regardless of whether it is an operating or financing lease and (ii) lease expense in its consolidated statement of operations for operating leases and amortization and interest expense in its consolidated statement of operations for financing leases. Leases with a term of 12 months or less may be accounted for similar to prior guidance for operating leases today. In July 2018, the FASB issued ASU No. 2018‑11, Leases (Topic 842) , which added an optional transition method that allows companies to adopt the standard as of the beginning of the year of adoption as opposed to the earliest comparative period presented. In November 2019, the FASB issued guidance delaying the effective date for all entities, except for public business entities. For nonpublic entities, this guidance is effective for annual periods beginning after December 15, 2020. In June 2020, the FASB issued additional guidance delaying the effective date for all entities, except for public business entities. For public entities, ASU 2016‑02 was effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. For nonpublic entities, this guidance is effective for annual periods beginning after December 15, 2021. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016‑02 will have on its consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016‑13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016‑13 replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. In November 2018, the FASB issued ASU 2018‑19, Codification Improvements to Topic 326, Financial Instruments — Credit Losses , which narrowed the scope and changed the effective date for nonpublic entities for ASU 2016‑13. The FASB subsequently issued supplemental guidance within ASU 2019‑05, Financial Instruments — Credit Losses (Topic 326): Targeted Transition Relief (“ASU 2019‑05”). ASU 2019‑05 provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For public entities that are SEC filers, excluding entities eligible to be smaller reporting companies, ASU 2016‑13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, ASU 2016‑13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016‑13 will have on its consolidated financial statements. In August 2017, the FASB issued ASU 2017‑12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017‑12”), which is intended to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its consolidated financial statements. In addition to that main objective, the amendments in the update make certain targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. Additional updates to further clarify the guidance in ASU 2017‑12 were issued by the FASB in October 2018 within ASU 2018‑16. For public entities, the amendment is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For nonpublic entities, ASU 2017‑12 is effective for fiscal years beginning after December 15, 2020 and interim periods beginning after December 15, 2021. Early application is permitted in any interim period after the issuance of the update. The Company is currently evaluating the impact that the adoption of ASU 2017‑12 will have on its consolidated financial statements. In December 2019, the FASB issued ASU 2019‑12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019‑12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019‑12 removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. For public entities, ASU 2019‑12 is effective for annual periods beginning after December 15, 2020, and interim periods within those reporting periods. For nonpublic companies, ASU 2019‑12 is effective for annual periods beginning after December 15, 2021, and interim periods within those reporting periods. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2019‑12 will have on its consolidated financial statements. In January 2020, the FASB issued ASU 2020‑01, Investments — Equity Securities (Topic 321), Investments — Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (“ASU 2020‑01”), which is intended to clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. For public entities, ASU 2020‑01 is effective for annual periods beginning after December 15, 2020, and interim periods within those reporting periods. For nonpublic companies, ASU 2020‑01 is effective for annual periods beginning after December 15, 2021, and interim periods within those reporting periods. The Company is currently evaluating the impact that the adoption of ASU 2020‑01 will have on its consolidated financial statements. In March 2020, the FASB issued ASU 2020‑04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. This guidance is effective for all entities upon issuance on March 12, 2020 and may be applied through December 31, 2022. The expedients and exceptions in this guidance are optional, and the Company is evaluating the potential future financial statement impact of any such expedient or exception that it may elect to apply as the Company evaluates the effects of adopting this guidance on its consolidated financial statements. In January 2021, the FASB issued ASU 2021‑01, Reference Rate Reform (Topic 848): Scope , which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. Specifically, this guidance applies to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. The ASU became effective as of March 12, 2020 and can be adopted anytime during the period of January 1, 2020 through December 31, 2022. The Company is currently evaluating the impact that the adoption of ASU 2021‑01 will have on its consolidated financial statements. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
ACQUISITIONS | |
Summary of purchase price allocation | (in thousands) October 22, 2020 Total consideration $ 79,743 Allocation of purchase price: Cash 5,007 Trade receivables 10,639 Inventories 11,854 Prepaid expenses and other current assets 3,949 Property and equipment 1,402 Intangible assets 46,700 Total assets acquired 79,551 Accounts payable 3,536 Accrued expenses and other current liabilities 8,853 Other long-term liabilities 524 Total liabilities assumed 12,913 Total fair value of net assets acquired, excluding goodwill: 66,638 Goodwill $ 13,105 |
Schedule of purchase price to specific intangible asset categories | Amortization Fair Value Period Definite-lived intangible assets: (in thousands) (in years) Trade names $ 9,500 9 Dealer relationships 37,200 8 $ 46,700 |
Schedule of pro forma financial information | Fiscal Quarter Ended (in thousands) March 28, 2020 Net sales $ 58,920 Net loss $ (20,828) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Contingent consideration | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Schedule of significant unobservable inputs for fair value measurements | Fiscal Quarter Ended March 28, 2020 EBITDA risk adjustment 17.30 % Annual EBITDA volatility 55.00 % Risk-free rate of return 2.10 % |
Term loan | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Schedule of financial liabilities at fair value on a recurring basis | The following table sets forth the carrying amount and fair value of the term loan (in thousands): April 3, 2021 December 31, 2020 Carrying Estimated Carrying Estimated Value Fair Value Value Fair Value Term loan $ 389,964 $ 390,638 $ 221,496 $ 221,081 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
GOODWILL AND INTANGIBLE ASSETS, NET | |
Schedule of Intangible assets | Intangible assets, net as of April 3, 2021 consisted of the following (in thousands): April 3, 2021 Gross Foreign Carrying Currency Accumulated Net Amount Translation Amortization Amount Trade names and trademarks $ 135,100 $ 912 $ 11,808 $ 124,204 Patented technology 16,126 134 3,898 12,362 Pool designs 5,728 547 752 5,523 Franchise relationships 1,187 113 546 754 Dealer relationships 160,376 45 20,989 139,432 Non-competition agreements 2,476 — 1,134 1,342 $ 320,993 $ 1,751 $ 39,127 $ 283,617 Intangible assets, net as of December 31, 2020 consisted of the following (in thousands): December 31, 2020 Gross Foreign Carrying Currency Accumulated Net Amount Translation Amortization Amount Trade names and trademarks $ 135,100 $ 1,047 $ 10,258 $ 125,889 Patented technology 16,126 155 3,452 12,829 Pool designs 5,728 629 648 5,709 Franchise relationships 1,187 130 470 847 Dealer relationships 160,376 52 17,697 142,731 Non-competition agreements 2,476 — 1,008 1,468 $ 320,993 $ 2,013 $ 33,533 $ 289,473 |
Schedule of estimated amortization expense related to definite-lived intangible assets | The Company estimates that amortization expense related to definite-lived intangible assets will be as follows in each of the next five years and thereafter (in thousands): Estimated Future Year Ended Amortization Expense Remainder of fiscal 2021 $ 16,364 2022 21,959 2023 21,768 2024 20,948 2025 20,791 Thereafter 181,787 $ 283,617 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
INVENTORIES, NET | |
Schedule of inventories, net | Inventories, net consisted of the following (in thousands): April 3, December 31, 2021 2020 Raw materials $ 44,472 $ 37,010 Finished goods 29,659 27,808 $ 74,131 $ 64,818 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
LONG-TERM DEBT | |
Components of the Company's outstanding debt obligations | The components of the Company’s outstanding debt obligations consisted of the following (in thousands): April 3, December 31, 2021 2020 Term loan $ 397,385 $ 228,147 Revolver 16,000 — Less: Unamortized discount and debt issuance costs (7,421) (6,651) Total debt 405,964 221,496 Less: Current portion of long-term debt (23,047) (13,042) Total long-term debt $ 382,917 $ 208,454 |
Components of interest expense | The Company recorded interest expense associated with the Revolving Credit Facility, Second Amendment, Third Amendment and interest rate swap, as follows (in thousands): April 3, 2021 March 28, 2020 Interest expense $ 5,892 $ 4,420 Amortization of debt issuance costs 2,073 859 Amortization of original issue discount 732 54 Interest rate swap 359 — Total interest expense $ 9,056 $ 5,333 |
Principal payments due on the outstanding debt | Principal payments due on the outstanding debt in the next five fiscal years, excluding any potential payments based on excess cash flow levels, are as follows (in thousands): Term Loan Year Ended Facility Remainder of fiscal 2021 $ 17,284 2022 23,047 2023 23,047 2024 23,047 2025 310,960 $ 397,385 |
PRODUCT WARRANTIES (Tables)
PRODUCT WARRANTIES (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
PRODUCT WARRANTIES | |
Warranty reserve activity | The warranty reserve activity consisted of the following (in thousands): Fiscal Quarter Year Ended Ended April 3, December 2021 31, 2020 Balance at the beginning of the period $ 2,882 $ 2,846 Accruals for warranties issued 1,706 3,966 Warranty liabilities assumed in GLI Acquisition — 118 Less: Settlements made (in cash or in kind) (1,077) (4,048) Balance at the end of the period 3,511 2,882 Less: Current portion of accrued warranty costs (3,313) (2,705) Accrued warranty costs – less current portion $ 198 $ 177 |
NET SALES (Tables)
NET SALES (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
NET SALES | |
Summary of disaggregation of net sales by product line | The following table sets forth the Company’s disaggregation of net sales by product line (in thousands): Fiscal Quarter Ended, April 3, 2021 March 28, 2020 In-ground Swimming Pools $ 93,643 $ 29,458 Covers 24,006 11,011 Liners 31,097 10,665 $ 148,746 $ 51,134 |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
NET INCOME (LOSS) PER SHARE | |
Basic and diluted earnings (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, April 3, 2021 March 28, 2020 Numerator: Net income (loss) attributable to common stockholders $ 8,533 $ (15,451) Denominator: Weighted-average common shares outstanding, basic and diluted 109,673,709 109,673,709 Net income (loss) per share attributable to common stockholders, basic and diluted $ 0.08 $ (0.14) |
SEGMENT AND GEOGRAPHIC INFORM_2
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
SEGMENT AND GEOGRAPHIC INFORMATION | |
Net sales by geography | Net sales by geography is based on the delivery address of the customer as specified in purchase order. Net sales by geographic area was as follows (in thousands): Fiscal Quarter Ended April 3, 2021 March 28, 2020 Net sales United States $ 119,070 $ 39,006 Canada 21,115 5,942 Australia 5,750 4,117 New Zealand 1,756 647 Other 1,055 1,422 Total $ 148,746 $ 51,134 |
Long-lived assets by geographic area | Our long-lived assets by geographic area, which consist of property and equipment, net assets were as follows (in thousands): April 3, December 2021 31, 2020 Long-lived assets United States $ 41,458 $ 37,680 Canada 2,899 3,050 Australia 4,582 4,979 New Zealand 1,666 1,648 Total $ 50,605 $ 47,357 |
NATURE OF THE BUSINESS (Details
NATURE OF THE BUSINESS (Details) - USD ($) $ in Thousands | Apr. 27, 2021 | Aug. 06, 2020 | Jul. 03, 2021 | Apr. 03, 2021 |
Subsequent Event [Line Items] | ||||
Repayment of long term debt | $ 5,762 | |||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Number of shares Repurchased | 12,264,438 | |||
Amount paid for repurchase of shares | $ 216,700 | |||
Funding for working capital requirement | $ 14,700 | |||
IPO | ||||
Subsequent Event [Line Items] | ||||
One-time expense in connection with the Reorganization | $ 49,500 | |||
IPO | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Shares sold | 23,000,000 | |||
Net proceeds from the IPO | $ 400,100 | |||
Underwriters Option | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Shares sold | 3,000,000 | |||
Term loan | ||||
Subsequent Event [Line Items] | ||||
Repayment of long term debt | $ 5,000 | |||
Term loan | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Repayment of long term debt | $ 152,700 | |||
Revolver | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Repayment of long term debt | $ 16,000 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended |
Dec. 31, 2020 | Apr. 03, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Income (Loss) from Equity Method Investments | $ 200 | $ 244 |
Adjustment for the amortization of basis differences | $ 100 | |
Distribution received from equity method investment | $ 168 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | Oct. 22, 2020 | Apr. 03, 2021 | Dec. 31, 2020 |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Carrying amount of goodwill | $ 115,610 | $ 115,750 | |
GL International, LLC | |||
Business Acquisition [Line Items] | |||
Total purchase price | $ 79,700 | ||
Total purchase price in cash | 79,700 | ||
Total purchase price, net of cash acquired | 74,700 | ||
Cash acquired | 5,000 | ||
Net working capital adjustment receivable excluded from consideration paid | 800 | ||
Transaction costs | 2,400 | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Total consideration | 79,743 | ||
Cash | 5,007 | ||
Trade receivables | 10,639 | ||
Inventories | 11,854 | ||
Prepaid expenses and other current assets | 3,949 | ||
Property and equipment | 1,402 | ||
Intangible assets | 46,700 | ||
Total assets acquired | 79,551 | ||
Accounts payable | 3,536 | ||
Accrued expenses and other current liabilities | 8,853 | ||
Other long-term liabilities | 524 | ||
Total liabilities assumed | 12,913 | ||
Total fair value of net assets acquired, excluding goodwill: | 66,638 | ||
Carrying amount of goodwill | $ 13,105 | $ 13,100 |
ACQUISITIONS - Financial Inform
ACQUISITIONS - Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Business Acquisition, Pro Forma Information [Abstract] | ||
Net sales | $ 58,920 | |
Net loss | $ (20,828) | |
GL International, LLC | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair Value | $ 46,700 | |
Trade names | GL International, LLC | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair Value | $ 9,500 | |
Amortization Period | 9 years | |
Dealer relationships | GL International, LLC | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair Value | $ 37,200 | |
Amortization Period | 8 years |
EQUITY METHOD INVESTMENT (Detai
EQUITY METHOD INVESTMENT (Details) - USD ($) $ in Thousands | Oct. 30, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Apr. 03, 2021 |
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment | $ 25,384 | $ 25,460 | ||
Distributions received from equity method investment | 168 | |||
Premier Pools & Spas | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 28.00% | |||
Consideration paid | $ 25,400 | $ 25,400 | ||
Term of the supply agreement | 3 months | 10 years | ||
Period defined in agreement for calculating percentage of rebates | 3 years | |||
Distributions received from equity method investment | $ 200 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and liabilities measured at fair value on a recurring basis (Details) $ in Millions | May 31, 2019USD ($) | Mar. 28, 2020USD ($) |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of plan assets | $ 1.2 | |
EBITDA risk adjustment | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Measurement inputs | 17.30 | |
Annual EBITDA volatility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Measurement inputs | 55 | |
Risk-free rate of return | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Measurement inputs | 2.10 | |
Contingent consideration | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of contingent consideration as of the acquisition date | $ 7.4 | |
Change in the fair value of the Contingent Consideration | 7.4 | |
Level 3 | Contingent consideration | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of contingent consideration as of the acquisition date | $ 1.1 | |
Narellan Acquisition | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash consideration | 35.2 | |
Narellan Acquisition | Contingent consideration | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash consideration | 20.2 | |
Equity consideration | $ 7.6 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair value of financial instruments (Details) - Level 2 - USD ($) $ in Thousands | Apr. 03, 2021 | Dec. 31, 2020 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative liabilities | $ 500 | $ 300 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amount | 389,964 | 221,496 |
Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amount | $ 390,638 | $ 221,081 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS, NET - Goodwill (Details) - USD ($) $ in Thousands | Apr. 03, 2021 | Dec. 31, 2020 |
GOODWILL AND INTANGIBLE ASSETS, NET | ||
Carrying amount of goodwill | $ 115,610 | $ 115,750 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS, NET - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 320,993 | $ 320,993 | |
Foreign Currency Translation | 1,751 | 2,013 | |
Accumulated Amortization | 39,127 | 33,533 | |
Net Amount | 283,617 | 289,473 | |
Amortization of Intangible Assets | 5,595 | $ 4,063 | |
Trade names and trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 135,100 | 135,100 | |
Foreign Currency Translation | 912 | 1,047 | |
Accumulated Amortization | 11,808 | 10,258 | |
Net Amount | 124,204 | 125,889 | |
Patented technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 16,126 | 16,126 | |
Foreign Currency Translation | 134 | 155 | |
Accumulated Amortization | 3,898 | 3,452 | |
Net Amount | 12,362 | 12,829 | |
Pool designs | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 5,728 | 5,728 | |
Foreign Currency Translation | 547 | 629 | |
Accumulated Amortization | 752 | 648 | |
Net Amount | 5,523 | 5,709 | |
Franchise relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 1,187 | 1,187 | |
Foreign Currency Translation | 113 | 130 | |
Accumulated Amortization | 546 | 470 | |
Net Amount | 754 | 847 | |
Dealer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 160,376 | 160,376 | |
Foreign Currency Translation | 45 | 52 | |
Accumulated Amortization | 20,989 | 17,697 | |
Net Amount | 139,432 | 142,731 | |
Non-competition agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 2,476 | 2,476 | |
Accumulated Amortization | 1,134 | 1,008 | |
Net Amount | $ 1,342 | $ 1,468 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS, NET - Amortization Expense (Details) - USD ($) $ in Thousands | Apr. 03, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of fiscal 2021 | $ 16,364 | |
2022 | 21,959 | |
2023 | 21,768 | |
2024 | 20,948 | |
2025 | 20,791 | |
Thereafter | 181,787 | |
Total | $ 283,617 | $ 289,473 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Thousands | Apr. 03, 2021 | Dec. 31, 2020 |
INVENTORIES, NET | ||
Raw materials | $ 44,472 | $ 37,010 |
Finished goods | 29,659 | 27,808 |
Inventory, Net, Total | $ 74,131 | $ 64,818 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Apr. 03, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Debt, principal amount outstanding | $ 16,000 | $ 0 |
Less: Unamortized discount and debt issuance costs | (7,421) | (6,651) |
Total debt | 405,964 | 221,496 |
Less: Current portion of long-term debt | (23,047) | (13,042) |
Total long-term debt | 382,917 | 208,454 |
Term loan | ||
Debt Instrument [Line Items] | ||
Debt, principal amount outstanding | 397,385 | 228,147 |
Total debt | 7,400 | $ 6,700 |
Revolver | ||
Debt Instrument [Line Items] | ||
Debt, principal amount outstanding | $ 16,000 |
LONG-TERM DEBT - Revolving Cred
LONG-TERM DEBT - Revolving Credit Facility (Details) - USD ($) $ in Thousands | Dec. 18, 2018 | Apr. 03, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||
Debt, principal amount outstanding | $ 16,000 | $ 0 | |
Minimum | |||
Debt Instrument [Line Items] | |||
Commitment fee rate range, depending on leverage ratio | 0.375% | ||
Maximum | |||
Debt Instrument [Line Items] | |||
Commitment fee rate range, depending on leverage ratio | 0.50% | ||
Revolver | |||
Debt Instrument [Line Items] | |||
Borrowing capacity | $ 30,000 | ||
Debt, principal amount outstanding | $ 16,000 | ||
Eurocurrency | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate range, depending on leverage ratio | 4.50% | ||
Eurocurrency | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate range, depending on leverage ratio | 4.75% | ||
Base | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate range, depending on leverage ratio | 3.50% | ||
Base | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate range, depending on leverage ratio | 3.75% |
LONG-TERM DEBT - Term Loan Faci
LONG-TERM DEBT - Term Loan Facility (Details) - USD ($) $ in Thousands | Feb. 02, 2021 | Jan. 25, 2021 | Oct. 14, 2020 | Aug. 06, 2020 | Dec. 18, 2018 | Apr. 03, 2021 | Dec. 31, 2020 | May 29, 2019 |
Debt Instrument [Line Items] | ||||||||
Additional borrowings under amendment | $ 23,000 | |||||||
Repayment of debt | $ 5,762 | |||||||
Proceeds used to repay note to Parent | 64,938 | |||||||
Proceeds used to pay dividend to Parent | $ 110,000 | |||||||
Amount outstanding, net of discount and issuance costs | $ 405,964 | $ 221,496 | ||||||
Effective interest rate | 9.36% | 8.03% | ||||||
Term loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Original term loan | $ 215,000 | |||||||
Debt issuance costs incurred | $ 1,200 | $ 100 | $ 11,500 | |||||
Additional borrowings under amendment | 175,000 | $ 20,000 | ||||||
Debt discount | $ 1,800 | $ 400 | 700 | |||||
Repayment of debt | $ 5,000 | |||||||
Repayment amount to be paid quarterly | 5,800 | |||||||
Borrowings treated as principal | 165,000 | |||||||
Borrowings treated as debt modification | 10,000 | |||||||
Proceeds used to repay note to Parent | $ 64,900 | $ 175,000 | ||||||
Principal payments calculated as percent of outstanding principal | 0.629% | |||||||
Outstanding Borrowings | $ 390,000 | 221,500 | ||||||
Amount outstanding, net of discount and issuance costs | 7,400 | 6,700 | ||||||
Unamortized debt issuance costs | 5,600 | 6,300 | ||||||
Unamortized discount | $ 1,800 | $ 400 | $ 700 | |||||
Term loan | Federal Funds Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest added to the specified index rate | 5.00% | |||||||
Term loan | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest added to the specified index rate | 1.00% | |||||||
Eurocurrency | Term loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest added to the specified index rate | 6.00% | |||||||
Base | Term loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest added to the specified index rate | 5.00% |
LONG-TERM DEBT - Interest rate
LONG-TERM DEBT - Interest rate swap (Details) - Interest rate swap $ in Millions | May 18, 2020USD ($) |
Derivative [Line Items] | |
LIBOR borrowings fixed interest rate | 0.442 |
LIBOR borrowings hedged | $ 200 |
LONG-TERM DEBT - Amendments and
LONG-TERM DEBT - Amendments and Interest rate swap (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
LONG-TERM DEBT | ||
Interest expense | $ 5,892 | $ 4,420 |
Amortization of debt issuance costs | 2,073 | 859 |
Amortization of original issue discount | 732 | 54 |
Interest rate swap | 359 | |
Total interest expense | $ 9,056 | $ 5,333 |
LONG-TERM DEBT - Principal paym
LONG-TERM DEBT - Principal payments due (Details) - USD ($) $ in Thousands | Apr. 03, 2021 | Dec. 31, 2020 |
Principal payments due | ||
Total payments due | $ 16,000 | $ 0 |
Term loan | ||
Principal payments due | ||
Remainder of fiscal 2021 | 17,284 | |
2022 | 23,047 | |
2023 | 23,047 | |
2024 | 23,047 | |
2025 | 310,960 | |
Total payments due | $ 397,385 | $ 228,147 |
PRODUCT WARRANTIES (Details)
PRODUCT WARRANTIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Apr. 03, 2021 | Dec. 31, 2020 | Apr. 03, 2021 | Dec. 31, 2020 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Balance at the beginning of the period | $ 2,882 | $ 2,846 | ||
Accruals for warranties issued | 1,706 | 3,966 | ||
Warranty liabilities assume in GLI Acquisition | 118 | |||
Less: Settlements made (in cash or in kind) | (1,077) | (4,048) | ||
Balance at the end of the period | $ 2,882 | $ 2,846 | $ 3,511 | $ 2,882 |
Less: Current portion of accrued warranty costs | (3,313) | (2,705) | ||
Accrued warranty costs - less current portion | $ 198 | $ 177 |
NET SALES (Details)
NET SALES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 148,746 | $ 51,134 |
In-ground Swimming Pools | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 93,643 | 29,458 |
Covers | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 24,006 | 11,011 |
Liners | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 31,097 | $ 10,665 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
INCOME TAXES | ||
Effective income tax rate | 25.26% | 16.34% |
PROFITS INTEREST UNITS (Details
PROFITS INTEREST UNITS (Details) - USD ($) $ in Millions | Jan. 29, 2021 | Apr. 03, 2021 | Mar. 28, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Effective income tax rate | 25.26% | 16.34% | |
Terminated Employee | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cumulative catch-up charge from modification | $ 1.1 | ||
Performance-vesting Units | Terminated Employee | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Units forfeited | 1,055,057 | ||
Time-vesting units | Terminated Employee | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vested and nonvested units held at time of termination | 527,528 | ||
Vested units at time of termination, pre-modification | 211,011 | ||
Accelerated vesting, number of units | 105,506 | ||
Vested units at time of termination, after modification | 316,517 |
NET INCOME (LOSS) PER SHARE (De
NET INCOME (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Numerator: | ||
Net income (loss) attributable to common stockholders | $ 8,533 | $ (15,451) |
Denominator: | ||
Weighted-average common shares outstanding, basic and diluted | 109,673,709 | 109,673,709 |
Net income (loss) per share attributable to common stockholders, basic and diluted | $ 0.08 | $ (0.14) |
No potentially dilutive securities outstanding | 0 | 0 |
RELATED PARTY TRANSACTIONS - Br
RELATED PARTY TRANSACTIONS - Bright AI Services (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | Dec. 31, 2020 | |
Bright AI Services | Development Of Internal Use Software | |||
Related Party Transaction [Line Items] | |||
Costs incurred | $ 500 | $ 0 | $ 500 |
RELATED PARTY TRANSACTIONS - Pu
RELATED PARTY TRANSACTIONS - Purchase of Treasury Stock (Details) - Parent - USD ($) $ in Millions | Dec. 28, 2021 | Dec. 28, 2020 | Oct. 20, 2020 | Oct. 14, 2020 |
Related Party Transaction [Line Items] | ||||
Contribution from parent for issuance of common stock | $ 64.9 | $ 64.9 | ||
Shares issued to parent | 32,902,113 | 32,902,113 | ||
Purchases and retirement of treasury stock (in shares) | 32,902,113 | |||
Purchases and retirement of treasury stock | $ 64.9 |
RELATED PARTY TRANSACTIONS - Ex
RELATED PARTY TRANSACTIONS - Expense Reimbursement and Management Fees (Details) - Sponsor - Management Fee Arrangement - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Related Party Transaction [Line Items] | ||
Maximum annual reimbursement | $ 1,000 | |
Management fees incurred | 0 | $ 0 |
Amounts payable | $ 0 | $ 0 |
RELATED PARTY TRANSACTIONS - Op
RELATED PARTY TRANSACTIONS - Operating Lease (Details) - Acquigen Pty Ltd. - Lease Agreement - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 03, 2021 | Mar. 28, 2020 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Future minimum lease payments | $ 3.7 | $ 4.2 | |
Rent expense | $ 0.1 | $ 0.1 |
SEGMENT AND GEOGRAPHIC INFORM_3
SEGMENT AND GEOGRAPHIC INFORMATION - Segment Information (Details) | 3 Months Ended |
Apr. 03, 2021segment | |
SEGMENT AND GEOGRAPHIC INFORMATION | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
SEGMENT AND GEOGRAPHIC INFORM_4
SEGMENT AND GEOGRAPHIC INFORMATION - Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 03, 2021 | Mar. 28, 2020 | Dec. 31, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | $ 148,746 | $ 51,134 | |
Property and equipment, net | 50,605 | $ 47,357 | |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 119,070 | 39,006 | |
Property and equipment, net | 41,458 | 37,680 | |
Canada | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 21,115 | 5,942 | |
Property and equipment, net | 2,899 | 3,050 | |
Australia | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 5,750 | 4,117 | |
Property and equipment, net | 4,582 | 4,979 | |
New Zealand | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 1,756 | 647 | |
Property and equipment, net | 1,666 | $ 1,648 | |
Other | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | $ 1,055 | $ 1,422 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Thousands | May 24, 2021USD ($)shares | Apr. 22, 2021item$ / sharesshares | Apr. 12, 2021USD ($)shares | Apr. 13, 2021$ / sharesshares | Apr. 03, 2021$ / sharesshares | Dec. 31, 2020$ / sharesshares |
Subsequent Event [Line Items] | ||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | ||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Common stock, shares authorized | 900,000,000 | |||||
Common stock, par value | $ / shares | $ 0.0001 | |||||
Increase in authorised share capital | 1,000,000,000 | |||||
Preferred stock shares authorised | 100,000,000 | |||||
Preferred stock par value | $ / shares | $ 0.0001 | |||||
Subsequent Event | IPO | ||||||
Subsequent Event [Line Items] | ||||||
Common stock, shares authorized | 500,000,000 | |||||
Common stock, par value | $ / shares | $ 0.0001 | |||||
Stock split ratio | 109,673.709 | |||||
Subsequent Event | Restricted stock awards | ||||||
Subsequent Event [Line Items] | ||||||
Accelerated vesting, number of restricted stock | 84,687 | |||||
Share based compensation expense | $ | $ 1,600 | |||||
Subsequent Event | Restricted stock awards | Share-based Payment Arrangement, Tranche One | ||||||
Subsequent Event [Line Items] | ||||||
Restricted stock/units expected to vest | 6,799,414 | |||||
Vesting period in equal installments | 6 months | |||||
Subsequent Event | Restricted stock awards | Share-based Payment Arrangement, Tranche Two | ||||||
Subsequent Event [Line Items] | ||||||
Restricted stock/units expected to vest | 1,540,712 | |||||
Vesting period in equal installments | 6 months | |||||
Subsequent Event | Restricted stock units | Share-based Payment Arrangement, Tranche One | ||||||
Subsequent Event [Line Items] | ||||||
Restricted stock/units expected to vest | 251,828 | |||||
Subsequent Event | Restricted stock units | Share Based Compensation Award Tranche One, Nine Month Anniversary | ||||||
Subsequent Event [Line Items] | ||||||
Percentage of stock awards vesting each anniversary of the closing of the IPO | 33.33% | |||||
Subsequent Event | Restricted stock units | Share Based Compensation Award Tranche One, First Anniversary | ||||||
Subsequent Event [Line Items] | ||||||
Percentage of stock awards vesting each anniversary of the closing of the IPO | 33.33% | |||||
Subsequent Event | Restricted stock units | Share Based Compensation Award Tranche One, Two Year Anniversary | ||||||
Subsequent Event [Line Items] | ||||||
Percentage of stock awards vesting each anniversary of the closing of the IPO | 33.33% | |||||
Subsequent Event | Restricted stock units | Share-based Payment Arrangement, Tranche Two | ||||||
Subsequent Event [Line Items] | ||||||
Restricted stock/units expected to vest | 22,367 | |||||
Number of anniversaries of closing of the IPO on which share-based compensation awards vest | item | 1 | |||||
Subsequent Event | Restricted stock units | Share-based Payment Arrangement, Tranche Three | ||||||
Subsequent Event [Line Items] | ||||||
Restricted stock/units expected to vest | 51,316 | |||||
Vesting period | 9 months | |||||
Subsequent Event | Restricted stock units | Share-based Payment Arrangement, Tranche Four | ||||||
Subsequent Event [Line Items] | ||||||
Restricted stock/units expected to vest | 15,790 | |||||
Number of anniversaries of closing of the IPO on which share-based compensation awards vest | item | 3 | |||||
Subsequent Event | Stock options | ||||||
Subsequent Event [Line Items] | ||||||
Number of options expected to vest | 886,862 | |||||
Percentage of stock awards vesting each year | 25.00% | |||||
Number of anniversaries of closing of the IPO on which share-based compensation awards vest | item | 4 | |||||
Strike price | $ / shares | $ 19 | |||||
Subsequent Event | 2021 Omnibus Incentive Plan | Non-employee director | ||||||
Subsequent Event [Line Items] | ||||||
Maximum grant date fair value annual limit | $ | $ 750 | |||||
Subsequent Event | 2021 Omnibus Incentive Plan | Share-based Payment Arrangement, Employee | ||||||
Subsequent Event [Line Items] | ||||||
Shares reserved for issuance | 13,170,212 | |||||
Subsequent Event | 2021 Omnibus Incentive Plan | Share-based Payment Arrangement, Employee | Restricted stock awards | ||||||
Subsequent Event [Line Items] | ||||||
Restricted stock/units granted | 8,340,126 | |||||
Subsequent Event | 2021 Omnibus Incentive Plan | Share-based Payment Arrangement, Employee | Restricted stock units | ||||||
Subsequent Event [Line Items] | ||||||
Restricted stock/units granted | 341,301 | |||||
Subsequent Event | 2021 Omnibus Incentive Plan | Share-based Payment Arrangement, Employee | Stock options | ||||||
Subsequent Event [Line Items] | ||||||
Options granted | 886,862 |