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CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY)

12 Months Ended

Dec. 31, 2023

CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY)

23.CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY)

Latham Group, Inc.

(Parent Company Only)

Condensed Balance Sheets

(in thousands, except share and per share data)


		December 31,
		2023			2022
Assets
Investment in subsidiary		$	399,200		$	382,790
Total assets		$	399,200		$	382,790
Liabilities and Stockholders’ Equity
Total liabilities		$	—		$	—
Stockholders’ Equity
Preferred stock, $0.0001 par value; 100,000,000 shares authorized as of both December 31, 2023 and December 31, 2022; no shares issued and outstanding as of both December 31, 2023 and December 31, 2022			—			—
Common stock, $0.0001 par value; 900,000,000 shares authorized as of December 31, 2023 and December 31, 2022; 114,871,782 and 114,667,975 shares issued and outstanding, as of December 31, 2023 and December 31, 2022, respectively			11			11
Additional paid-in capital			459,684			440,880
Accumulated deficit			(56,956)			(54,568)
Accumulated other comprehensive loss			(3,539)			(3,533)
Total stockholders’ equity			399,200			382,790
Total liabilities and stockholders’ equity		$	399,200		$	382,790

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

Latham Group, Inc.

(Parent Company Only)

Condensed Statements of Operations

(in thousands, except share and per share data)


		Year Ended
		December 31,
		2023			2022			2021
Equity in net loss of subsidiary		$	(2,388)		$	(5,694)		$	(62,348)
Net loss attributable to common stockholders		$	(2,388)		$	(5,694)		$	(62,348)
Net loss per share
Net loss per share attributable to common stockholders – basic and diluted
Basic		$	(0.02)		$	(0.05)		$	(0.56)
Diluted		$	(0.02)		$	(0.05)		$	(0.56)
Weighted-average common shares outstanding – basic and diluted
Basic			112,899,586			113,245,421			110,644,366
Diluted			112,899,586			113,245,421			110,644,366

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

Latham Group, Inc.

(Parent Company Only)

Condensed Statements of Comprehensive Loss

(in thousands)


		Year Ended
		December 31,
		2023			2022			2021
Net loss		$	(2,388)		$	(5,694)		$	(62,348)
Equity in other comprehensive loss of subsidiary			(6)			(3,903)			(1,984)
Comprehensive loss		$	(2,394)		$	(9,597)		$	(64,332)

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

Latham Group, Inc.

(Parent Company Only)

Condensed Statement of Cash Flows

(in thousands)


		Year Ended
		December 31,
		2023			2022			2021
Cash flows from operating activities:
Net loss		$	(2,388)		$	(5,694)		$	(62,348)
Adjustments to reconcile net loss to net cash provided by operating activities:
Equity in net loss of subsidiary			2,388			5,694			62,348
Net cash provided by operating activities			—			—			—
Cash flows from investing activities:
Distribution from subsidiary			—			23,038			—
Investment in subsidiary			—			—			(117,626)
Net cash provided by (used in) investing activities			—			23,038			(117,626)
Cash flows from financing activities:
Proceeds from initial public offering, net of underwriting discounts, commissions and offering costs			—			—			399,264
Proceeds from issuance of common stock			—			257,663			—
Repurchase and retirement of common stock			—			(280,701)			(281,638)
Net cash (used in) provided by financing activities			—			(23,038)			117,626
Net increase in cash			—			—			—
Cash at beginning of period			—			—			—
Cash at end of period		$	—		$	—		$	—

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

Notes to Condensed Financial Statements of Registrant (Parent Company Only)

1.Basis of Presentation

These condensed parent company-only financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X. Latham Group, Inc. has no material assets or standalone operations other than its ownership in its consolidated subsidiaries. Under the terms of the New Credit Agreement entered into by the Latham Pool Products, a wholly owned subsidiary of LIMC, which itself is a wholly owned subsidiary of Latham Group, Inc., Latham Pool Products is restricted from making dividend payments, loans or advances to Latham Group, Inc., unless certain conditions are met. As of December 31, 2023 and 2022, substantially all of the consolidated net assets of Latham Pool Products are considered restricted net assets as defined in Rule 4-08(e)(3) of Regulation S-X.

Latham Group, Inc. is able to transfer assets from Latham Pool Products in order to pay certain tax liabilities.

These condensed parent company financial statements have been prepared using the same accounting principles and policies described in the notes to the condensed financial statements, with the only exception being that the parent company accounts for its subsidiary using the equity method.

2.Common Stock

During the year ended December 31, 2022, the Company repurchased and concurrently retired 4,483,620 shares of the Company’s common stock for an aggregate amount of $23.0 million, pursuant to the Repurchase Program.

On January 11, 2022, the Company completed an offering of 13,800,000 shares of common stock, par value $0.0001 per share, including the exercise in full by the underwriters of their option to purchase up to 1,800,000 additional shares of common stock, at a public offering price of $19.50 per share. The Company received proceeds of $257.7 million from this offering, net of $11.4 million of underwriting fees. The proceeds of $257.7 million were used to purchase 13,800,000 shares of common stock from certain of the Company’s stockholders, primarily investment funds managed by the Sponsor and Wynnchurch Capital, L.P., and also a small percentage of shares of common stock owned by some of the Company’s directors and executive officers.

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 $399.3 million, after deducting underwriting discounts and commissions and other offering costs.