Latham Group, Inc.
For the period ended Sep 26, 2026. Filed Nov 4, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 26, 2026 · Filed Nov 4, 2026
SWIM$7.85-0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-27; filed 2026-08-05.
0001628280-26-052925
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-26; filed 2026-11-04.
0001628280-26-069797
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 149 previous paragraphs and 163 current paragraphs.
86 unchanged; 48 reworded; 26 added; 15 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
•Increase in net sales of 12.5%, or $20.3 million, to $182.2 million for the fiscal quarter ended September 26, 2026, compared to $161.9 million for the fiscal quarter ended September 27, 2025.
Current report
Highlights for the three fiscal quarters ended September 26, 2026
Current report
•Increase in net sales of 11.4%, or $51.0 million, to $497.0 million for the three fiscal quarters ended September 26, 2026, compared to $446.0 million for the three fiscal quarters ended September 27, 2025.
Current report
We delivered strong third quarter and year-to-date results, demonstrating continued success in material conversion and underpinning our expectation that Latham continues to gain share across our product lines. Third quarter net sales increased by 12.5%, including 8.4% organic growth, led by in-ground pool sales, which grew by 22.6%, or 13.9% organically, compared to last year’s third quarter.
Current report
The substantial increase in in-ground pool sales was driven almost entirely by fiberglass pools, which are increasingly being recognized by consumers and pool builders for their competitive advantages over concrete, namely fast and easy installation, cost efficiency, durability, lifetime warranty and lower maintenance costs. Similarly, autocovers continued to gain momentum as they have strong safety benefits, offer significant cost savings to pool owners and are compatible with all types of in-ground pools. Cover sales showed substantial organic growth of autocovers, where we are achieving meaningful revenue synergies following the acquisitions of several of our Coverstar dealers over the last two years.
Current report
The Sand States remain a key growth market for Latham, which we believe has the potential to drive a step-change in companywide sales. Sales growth in the Sand States accelerated to 21.1% in the third quarter and increased 16.6% year-to- date, led by strong performance in Florida and Texas. We are making meaningful progress in executing the Sand States growth strategy we outlined earlier this year, delivering on key initiatives that position us to drive continued growth by building on our refined market development framework. We also partnered with a national homebuilder to offer Latham fiberglass pools as an option in their new home construction in Florida. In parallel, we continued to strengthen our sales capabilities, adding field sales resources in Florida, with further expansion planned in Texas and Arizona, while targeted marketing initiatives are gaining traction and contributing to growth.
Current report
Additionally, we completed the build-out of our commercial organization, including hiring a Chief Commercial Officer.
Current report
Debt Refinancing
Current report
Loss on Extinguishment and Modification of Debt
Current report
Loss on extinguishment and modification of debt was $5.0 million for the fiscal quarter ended September 26, 2026, compared to none for the fiscal quarter ended September 27, 2025 due to the Refinancing that was completed in August 2026.
Current report
Net income was $12.1 million for the fiscal quarter ended September 26, 2026, compared to $8.1 million for the fiscal quarter ended September 27, 2025. The $3.9 million, or 48.5%, increase in net income was primarily driven by an increase in net sales, as well as the other factors described above.
Current report
Three Fiscal Quarters Ended September 26, 2026 Compared to Three Fiscal Quarters Ended September 27, 2025
Current report
Amortization was $21.9 million for the three fiscal quarters ended September 26, 2026 compared to $21.7 million for the three fiscal quarters ended September 27, 2025. The $0.2 million, or 0.9%, increase in amortization expense was driven by the acquisition of Freedom Pools.
Current report
Loss on Extinguishment and Modification of Debt
Current report
Loss on extinguishment and modification of debt was $5.0 million for the three fiscal quarters ended September 26, 2026, compared to none for the three fiscal quarters ended September 27, 2025 due to the Refinancing that was completed in August 2026.
Current report
Net income was $16.3 million for the three fiscal quarters ended September 26, 2026, compared to $18.1 million for the three fiscal quarters ended September 27, 2025. The $1.9 million, or 10.3%, decrease in net income was primarily driven by a one-time loss on extinguishment and modification of debt related to the Refinancing, as well as the other factors described above.
Current report
Adjusted EBITDA margin was 20.5% for the three fiscal quarters ended September 26, 2026 compared to 20.0% for the three fiscal quarters ended September 27, 2025. The 0.5% increase in Adjusted EBITDA margin was primarily because of the increase in net sales as well as the other factors described above.
Current report
(f)Represents the loss on extinguishment and modification of debt in connection with the Refinancing.
Current report
On August 20, 2026 (the "Closing Date"), we completed the Refinancing. Latham Pool Products and certain subsidiary guarantors, entered into New Credit Agreement with Jefferies Finance LLC, which provides a senior secured multicurrency revolving line of credit in an initial principal amount of $75.0 million, which includes a sub-limit for letters of credit, and a U.S. Dollar senior secured term loan facility in an initial principal amount of $300.0 million. On the Closing Date, proceeds from the borrowings under the New Credit Agreement were used to repay and replace all outstanding obligations under, and terminate, the Credit and Guaranty Agreement, dated as of February 23, 2022, among Latham Pool Products, Latham International Manufacturing Corp. ("LIMC") and the other guarantors party thereto, the lenders party thereto and Barclays Bank PLC, as administrative agent (the "Prior Credit Agreement").
Current report
The New Credit Agreement contains customary mandatory prepayment provisions, including requirements to make mandatory prepayments with 50% of any excess cash flow and with 100% of the net cash proceeds from the incurrence of nonpermitted indebtedness, asset sales and casualty and condemnation events, in each case, subject to customary exceptions.
Current report
New Revolving Credit Facility
Current report
New Term Loan
Current report
As of September 26, 2026, we had $292.5 million of outstanding borrowings under the New Term Loan.
Current report
Prior Revolving Credit Facility
Current report
Prior Term Loan
Current report
Pursuant to the Prior Credit Agreement, Latham Pool Products also borrowed $325.0 million in term loans (the "Prior Term Loan"). The Prior Term Loan was repaid and terminated as of the Closing Date of the Refinancing.
Removed paragraphs (15)
Previous report
•Increase in net sales of 14.4%, or $24.8 million, to $197.5 million for the fiscal quarter ended June 27, 2026, compared to $172.6 million for the fiscal quarter ended June 28, 2025.
Previous report
Highlights for the two fiscal quarters ended June 27, 2026
Previous report
•Increase in net sales of 10.8%, or $30.7 million, to $314.8 million for the two fiscal quarters ended June 27, 2026, compared to $284.1 million for the two fiscal quarters ended June 28, 2025.
Previous report
Second quarter sales growth was driven by execution of our strategic priorities and supports our expectations of continued share gains across our product lines. Our in-ground pool sales increased 22.5%, or 13.6% organically, led by fiberglass pool sales, which are on track to account for approximately 80% of our full year in-ground pool sales in 2026. Cover sales were up 10% in the second quarter, led by growth in autocovers, indicating a steady increase in attachment rates on new pool installations.
Previous report
We continued to gain traction in the Sand States, a key growth market for Latham, where second quarter sales increased at a double-digit rate. As noted last quarter, we are moving ahead with several new initiatives to accelerate our growth in these geographies, which have the potential to drive a step-change in companywide sales. In the last several months, we have made considerable progress in building our commercial organization, identified multiple target micro-markets as part of a refined market development framework around segmentation by communities, and added sales resources in the field to facilitate the sales process in concert with our dealers.
Previous report
Second quarter gross profit increased, supported by higher volume and continued progress with lean manufacturing and value engineering initiatives. Demand for fiberglass pools accelerated faster than our typical seasonal ramp-up, resulting in approximately $2.8 million of incremental costs in the quarter, which represented a gross margin headwind of approximately 140 basis points. The majority of these costs are expected to be recovered in the second half of the year. Adjusted EBITDA increased 11.9% year over year, with Adjusted EBITDA margin of 22.6%, reflecting the impact of lower gross margin and the timing of sales and marketing investments. We also completed a program to optimize certain operational and administrative functions, which is enabling us to redeploy resources to sales and marketing initiatives designed to accelerate growth.
Previous report
Net income was $12.8 million for the fiscal quarter ended June 27, 2026, compared to $16.0 million for the fiscal quarter ended June 28, 2025. The $3.2 million, or 20.2%, decrease in net income was primarily driven by an unfavorable change in net foreign currency transaction gains and losses associated with our international subsidiaries of $5.0 million, as well as the other factors described above.
Previous report
Two Fiscal Quarters Ended June 27, 2026 Compared to Two Fiscal Quarters Ended June 28, 2025
Previous report
Amortization was $14.5 million for both the two fiscal quarters ended June 27, 2026 and June 28, 2025.
Previous report
Net income was $4.2 million for the two fiscal quarters ended June 27, 2026, compared to $10.0 million for the two fiscal quarters ended June 28, 2025. The $5.8 million, or 57.9%, decrease in net income was primarily driven by an unfavorable change in net foreign currency transaction gains and losses associated with our international subsidiaries of $6.4 million, as well as the other factors described above.
Previous report
Adjusted EBITDA margin was 18.0% and remained flat for the two fiscal quarters ended June 27, 2026 compared to the two fiscal quarters ended June 28, 2025.
Previous report
The obligations under the Credit Agreement are guaranteed by certain of our wholly owned subsidiaries 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, but not limited to, their accounts receivables, equipment, intellectual property, inventory, cash and cash equivalents, deposit accounts and security accounts.
Previous report
Revolving Credit Facility
Previous report
Term Loan
Previous report
As of June 27, 2026, we had $279.8 million of outstanding borrowings under the Term Loan.
Reworded paragraphs (48)
Previous wording
•Decrease in net income of $3.2 million to $12.8 million and representing a 6.5% net income margin for the fiscal quarter ended June 27, 2026, compared to $16.0 million and representing a 9.3% net income margin for the fiscal quarter ended June 28, 2025.
Current wording
•Increase in net income of $3.9 million to $12.1 million and representing a 6.6% net income margin for the fiscal quarter ended September 26, 2026, compared to $8.1 million and representing a 5.0% net income margin for the fiscal quarter ended September 27, 2025.
Previous wording
•Increase in Adjusted EBITDA (as defined below) of $4.7 million to $44.6 million for the fiscal quarter ended June 27, 2026, compared to $39.9 million for the fiscal quarter ended June 28, 2025. Adjusted EBITDA margin decreased from 23.1% to 22.6%.
Current wording
•Increase in Adjusted EBITDA (as defined below) of $6.9 million to $45.3 million for the fiscal quarter ended September 26, 2026, compared to $38.3 million for the fiscal quarter ended September 27, 2025. Adjusted EBITDA margin increased from 23.7% to 24.8%.
Previous wording
•Decrease in net income of $5.8 million to a net income of $4.2 million and representing a 1.3% net income margin for the two fiscal quarters ended June 27, 2026, compared to net income of $10.0 million and representing a 3.5% net income margin for the two fiscal quarters ended June 28, 2025.
Current wording
•Decrease in net income of $1.9 million to $16.3 million and representing a 3.3% net income margin for the three fiscal quarters ended September 26, 2026, compared to net income of $18.1 million and representing a 4.1% net income margin for the three fiscal quarters ended September 27, 2025.
Previous wording
•Increase in Adjusted EBITDA of $5.7 million to $56.8 million for the two fiscal quarters ended June 27, 2026, compared to $51.0 million for the two fiscal quarters ended June 28, 2025. Adjusted EBITDA margin remained flat at 18.0%.
Current wording
•Increase in Adjusted EBITDA of $12.7 million to $102.0 million for the three fiscal quarters ended September 26, 2026, compared to $89.4 million for the three fiscal quarters ended September 27, 2025. Adjusted EBITDA margin increased from 20.0% to 20.5%.
Previous wording
Strategic transactions continue to be part of our growth strategy. On February 26, 2026, we completed the acquisition of Freedom Pools, a fiberglass pool manufacturer and installer operating in Australia and New Zealand. The acquisition has been and is expected to continue to be immediately accretive to our earnings, adding approximately $20.0 million in net sales and approximately $4.0 million in Adjusted EBITDA, on an annualized basis, before acquisition synergies. The GAAP purchase price was $15.4 million, and included a holdback of $1.6 million that has been accrued on our condensed consolidated balance sheet. The transaction was fully funded with cash on hand.
Current wording
Strategic transactions continue to be part of our growth strategy. On February 26, 2026, we completed the acquisition of Freedom Pools, a fiberglass pool manufacturer and installer operating in Australia and New Zealand. The acquisition has been and is expected to continue to be accretive to our earnings, adding approximately $20.0 million in net sales and approximately $4.0 million in Adjusted EBITDA, on an annualized basis, before acquisition synergies. The purchase price was $15.4 million, and included a holdback of $1.6 million that has been accrued on our condensed consolidated balance sheet. The transaction was fully funded with cash on hand.
Previous wording
During the fiscal quarter ended March 28, 2026, we purchased four fiberglass production facilities that had previously been leased. The transaction was completed on February 6, 2026 for a total purchase price of $17.6 million. The purchase price included a $12 million deposit made in the fourth quarter of 2025, and $5.6 million paid at closing. This purchase was the primary reason for the increase of property and equipment, net on the condensed consolidated balance sheet as of June 27, 2026.
Current wording
During the fiscal quarter ended March 28, 2026, we purchased four fiberglass production facilities that had previously been leased. The transaction was completed on February 6, 2026 for a total purchase price of $17.6 million. The purchase price included a $12.0 million deposit made in the fourth quarter of 2025, and $5.6 million paid at closing. This purchase was the primary reason for the increase in property and equipment, net on the condensed consolidated balance sheet as of September 26, 2026.
Previous wording
On February 23, 2022, Latham Pool Products, Inc. (“Latham Pool Products”), our wholly owned subsidiary, entered into the Credit Agreement with Barclays Bank PLC (the "Credit Agreement"), which provides a senior secured multicurrency revolving line of credit (the "Revolving Credit Facility") in an initial principal amount of $75.0 million and a U.S. Dollar senior secured term loan (the “Term Loan”) in an initial principal amount of $325.0 million.
Current wording
On August 20, 2026, we entered into an agreement (the “New Credit Agreement”) with Jefferies Finance LLC, which provides a senior secured multicurrency revolving line of credit (the “New Revolving Credit Facility”) in an initial principal amount of $75.0 million and a U.S. Dollar senior secured term loan facility (the “New Term Loan”) in an initial principal amount of $300.0 million (collectively, the “Refinancing”). On the Closing Date, proceeds under the agreement were used to repay and replace all outstanding obligations under, and terminate the Prior Credit Agreement (as defined below) and for general corporate purposes.
Previous wording
Adjusted EBITDA and Adjusted EBITDA margin are key metrics used by management and our Board of Directors of the Company (the “Board”) to assess our financial performance. Adjusted EBITDA and Adjusted EBITDA margin are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures. We use Adjusted EBITDA and Adjusted EBITDA margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to utilize as a significant performance metric in our annual management incentive bonus plan compensation, and to compare our performance against that of other companies using similar measures. We have presented Adjusted EBITDA and Adjusted EBITDA margin solely as supplemental disclosures because we believe they allow for a more complete analysis of results of operations and assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as (i) depreciation and amortization, (ii) interest expense, net, (iii) income tax expense (benefit), (iv) (gain) loss on sale and disposal of property and equipment, (v) restructuring charges, (vi) stock-based compensation expense, (vii) unrealized losses (gains) on foreign currency transactions, (viii) strategic initiative costs, (ix) acquisition and integration related costs and (x) other.
Current wording
Adjusted EBITDA and Adjusted EBITDA margin are key metrics used by management and the Board of Directors of the Company (the “Board”) to assess our financial performance. Adjusted EBITDA and Adjusted EBITDA margin are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures. We use Adjusted EBITDA and Adjusted EBITDA margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to utilize as a significant performance metric in our annual management incentive bonus plan compensation, and to compare our performance against that of other companies using similar measures. We have presented Adjusted EBITDA and Adjusted EBITDA margin solely as supplemental disclosures because we believe they allow for a more complete analysis of results of operations and assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as (i) depreciation and amortization, (ii) interest expense, net, (iii) income tax expense (benefit), (iv) (gain) loss on sale and disposal of property and equipment, (v) restructuring charges, (vi) stock-based compensation expense, (vii) unrealized losses (gains) on foreign currency transactions, (viii) strategic initiative costs, (ix) acquisition and integration related costs and (x) other.
Previous wording
Net sales was $197.5 million for the fiscal quarter ended June 27, 2026, compared to $172.6 million for the fiscal quarter ended June 28, 2025. The $24.8 million, or 14.4%, increase in net sales was due to a $19.0 million increase in sales volume and a $5.8 million increase from higher pricing. The increase in net sales was primarily driven by organic growth in each of our product lines, particularly the growth of our in-ground pool sales, sales growth in the Sand States, the acquisition of Freedom Pools and the full year benefit of the 2025 price increase. The increase in net sales of $24.8 million across our product lines consisted of an increase of $17.7 million for in-ground swimming pools, $3.7 million for covers and $3.4 million for liners.
Current wording
Net sales was $182.2 million for the fiscal quarter ended September 26, 2026, compared to $161.9 million for the fiscal quarter ended September 27, 2025. The $20.3 million, or 12.5%, increase in net sales was due to a $16.7 million increase in sales volume and a $3.6 million increase from higher pricing. The increase in net sales was primarily driven by organic growth in our in-ground pool sales including sales growth in the Sand States, organic growth of autocovers and the benefit of recent price increases, as well as the acquisition of Freedom Pools. The increase in net sales of $20.3 million across our product lines consisted of an increase of $17.1 million for in-ground swimming pools and $4.8 million for covers, partially offset by a decrease of $1.5 million for liners.
Previous wording
Cost of sales was $127.4 million for the fiscal quarter ended June 27, 2026, compared to $108.7 million for the fiscal quarter ended June 28, 2025. Gross margin decreased by 1.6%, to 35.5% of net sales for the fiscal quarter ended June 27, 2026, compared to 37.1% of net sales for the fiscal quarter ended June 28, 2025. The $18.7 million, or 17.2%, increase in cost of sales was primarily the result of the increase in sales volume, partially offset by the impact of production efficiencies resulting from lean manufacturing and value engineering programs. The 1.6% decrease in gross margin was primarily driven by quarter specific ramp-up costs of $2.8 million.
Current wording
Cost of sales was $115.3 million for the fiscal quarter ended September 26, 2026, compared to $104.6 million for the fiscal quarter ended September 27, 2025. The $10.8 million, or 10.3%, increase in cost of sales was primarily the result of the increase in sales volume, partially offset by the impact of production efficiencies resulting from lean manufacturing and value engineering programs. Gross margin increased by 1.3%, to 36.7% of net sales for the fiscal quarter ended September 26, 2026, compared to 35.4% of net sales for the fiscal quarter ended September 27, 2025. The 1.3% increase in gross margin was primarily driven by greater plant absorption on higher volumes and the ongoing benefits of our lean manufacturing and value engineering initiatives.
Previous wording
Selling, general, and administrative expense was $37.6 million for the fiscal quarter ended June 27, 2026, compared to $31.9 million for the fiscal quarter ended June 28, 2025. The $5.7 million, or 17.8%, increase in selling, general, and administrative expense was primarily due to investments in our growth strategies, the timing of sales and marketing initiatives to accelerate the fiberglass conversion strategy in the Sand States, acquisition and integration related costs, which included $2.2 million of performance-based compensatory earn-out expenses related to our Coverstar Central acquisition in 2024, as well as our digital transformation efforts.
Current wording
Selling, general and administrative expense was $35.9 million for the fiscal quarter ended September 26, 2026, compared to $28.6 million for the fiscal quarter ended September 27, 2025. The $7.3 million, or 25.5%, increase in selling, general and administrative expense was primarily due to investments in support of our growth strategies and market share expansion, sales and marketing initiatives to accelerate the fiberglass conversion strategy in the Sand States, acquisition and integration related costs, which included $3.2 million of performance-based compensatory earn-out expenses related to our Coverstar Central acquisition in 2024, as well as costs related to our digital transformation program.
Previous wording
Amortization was $7.4 million for the fiscal quarter ended June 27, 2026 and $7.3 million for the fiscal quarter ended June 28, 2025. The $0.1 million, or 0.9%, increase in amortization was due to the Freedom Pools acquisition.
Current wording
Amortization was $7.4 million for the fiscal quarter ended September 26, 2026 and $7.2 million for the fiscal quarter ended September 27, 2025. The $0.1 million, or 2.0%, increase in amortization was due to the Freedom Pools acquisition.
Previous wording
Interest expense, net was $5.9 million for the fiscal quarter ended June 27, 2026, compared to $7.1 million for the fiscal quarter ended June 28, 2025. The $1.2 million, or 17.1%, decrease in interest expense, net was primarily the result of the change in the fair value of our interest rate swap and a decrease in interest rates, compared to the fiscal quarter ended June 28, 2025.
Current wording
Interest expense, net was $5.4 million for the fiscal quarter ended September 26, 2026, compared to $6.1 million for the fiscal quarter ended September 27, 2025. The $0.6 million, or 10.6%, decrease in interest expense, net was primarily the result of the change in the fair value of our interest rate swap, a decrease in interest rates and a change in the amortization of financing fees related to the Refinancing (defined below), compared to the fiscal quarter ended September 27, 2025.
Previous wording
Other expense, net was $1.4 million for the fiscal quarter ended June 27, 2026, compared to other income, net of $3.0 million for fiscal quarter ended June 28, 2025. The $4.4 million increase in other expense, net was primarily driven by an unfavorable change in net foreign currency transaction gains and losses associated with our international subsidiaries.
Current wording
Other income, net was $0.1 million for the fiscal quarter ended September 26, 2026, compared to other expense, net of $1.2 million for fiscal quarter ended September 27, 2025. The $1.2 million increase in other income, net was primarily driven by a favorable change in net foreign currency transaction gains and losses associated with our international subsidiaries.
Previous wording
Earnings from our equity method investment in Premier Pools & Spas was $1.1 million for the fiscal quarter ended June 27, 2026, compared to $0.5 million for the fiscal quarter ended June 28, 2025, due to the financial performance of Premier Pools & Spas.
Current wording
Earnings from our equity method investment in Premier Pools & Spas was $1.8 million for the fiscal quarter ended September 26, 2026, compared to $1.3 million for the fiscal quarter ended September 27, 2025, due to the financial performance of Premier Pools & Spas.
Previous wording
Income tax expense was $6.1 million for the fiscal quarter ended June 27, 2026, compared to $5.1 million for the fiscal quarter ended June 28, 2025. Our effective tax rate was 32.4% for the fiscal quarter ended June 27, 2026, compared to 24.3% for the fiscal quarter ended June 28, 2025. The differences between the U.S. federal statutory income tax rate and our effective income tax rates for the fiscal quarter ended June 27, 2026 and the fiscal quarter ended June 28, 2025 were primarily attributable to the discrete impact of stock compensation expense for which there is no associated tax benefit, the effects of branch accounting for Latham Canada and the jurisdictional mix of income.
Current wording
Income tax expense was $3.0 million for the fiscal quarter ended September 26, 2026, compared to $7.5 million for the fiscal quarter ended September 27, 2025. Our effective tax rate was 19.7% for the fiscal quarter ended September 26, 2026, compared to 47.9% for the fiscal quarter ended September 27, 2025. The differences between the U.S. federal statutory income tax rate and our effective income tax rates for the fiscal quarter ended September 26, 2026 and the fiscal quarter ended September 27, 2025 were primarily attributable to the jurisdictional mix of income, the discrete impact of stock-based compensation forfeitures or windfalls and exercises and the effects of branch accounting for Latham Canada.
Previous wording
Net income margin was 6.5% for the fiscal quarter ended June 27, 2026, compared to 9.3% for the fiscal quarter ended June 28, 2025. The 2.8% decrease in net income margin was primarily driven by the $3.2 million decrease in net income, as well as the other factors described above.
Current wording
Net income margin was 6.6% for the fiscal quarter ended September 26, 2026, compared to 5.0% for the fiscal quarter ended September 27, 2025. The 1.6% increase in net income margin was primarily driven by the $3.9 million increase in net income, as well as the other factors described above.
Previous wording
Adjusted EBITDA was $44.6 million for the fiscal quarter ended June 27, 2026, compared to $39.9 million for the fiscal quarter ended June 28, 2025. The $4.7 million, or 11.9%, increase in Adjusted EBITDA was primarily because of the factors described above.
Current wording
Adjusted EBITDA was $45.3 million for the fiscal quarter ended September 26, 2026, compared to $38.3 million for the fiscal quarter ended September 27, 2025. The $6.9 million, or 18.1%, increase in Adjusted EBITDA was primarily because of higher gross margin that more than offset higher sales and marketing expenses, as well as the factors described above.
Previous wording
Adjusted EBITDA margin was 22.6% for the fiscal quarter ended June 27, 2026, compared to 23.1% for the fiscal quarter ended June 28, 2025. The 0.5% decrease in Adjusted EBITDA margin was primarily because of the decrease in gross margin and the timing of sales and marketing campaigns to accelerate market penetration in the Sand States as well as the other factors described above.
Current wording
Adjusted EBITDA margin was 24.8% for the fiscal quarter ended September 26, 2026, compared to 23.7% for the fiscal quarter ended September 27, 2025. The 1.1% increase in Adjusted EBITDA margin was primarily because of the increase in net sales as well as the other factors described above.
Previous wording
The following table summarizes our results of operations for the two fiscal quarters ended June 27, 2026 and June 28, 2025:
Current wording
The following table summarizes our results of operations for the three fiscal quarters ended September 26, 2026 and September 27, 2025 (dollars in thousands):
Previous wording
Net sales were $314.8 million for the two fiscal quarters ended June 27, 2026, compared to $284.1 million for the two fiscal quarters ended June 28, 2025. The $30.7 million, or 10.8%, increase in net sales was due to a $22.0 million increase in sales volume and a $8.7 million increase from higher pricing. The sales volume increase was primarily due to organic growth of 7.5% with the acquisition of Freedom Pools contributing the remainder. The increase in net sales across our product lines consisted of an increase of $19.7 million for in-ground swimming pools, $5.6 million for covers and $5.4 million for liners.
Current wording
Net sales was $497.0 million for the three fiscal quarters ended September 26, 2026, compared to $446.0 million for the three fiscal quarters ended September 27, 2025. The $51.0 million, or 11.4%, increase in net sales was due to a $38.8 million increase in sales volume and a $12.2 million increase from higher pricing. The sales volume increase was primarily due to organic growth of 7.9% with the acquisition of Freedom Pools contributing the remainder. The increase in net sales across our product lines consisted of an increase of $36.8 million for in-ground swimming pools, $10.4 million for covers and $3.9 million for liners.
Previous wording
Cost of sales was $207.6 million for the two fiscal quarters ended June 27, 2026, compared to $187.2 million for the two fiscal quarters ended June 28, 2025. Gross margin was 34.1% of net sales for the two fiscal quarters ended June 27, 2026 and June 28, 2025. The $20.3 million increase in cost of sales was primarily the result of the increase in sales volume, partially offset by the impact of production efficiencies resulting from lean manufacturing and value engineering programs. Gross margin was in line with prior year, and included second-quarter-specific ramp-up costs that offset the benefits of lean manufacturing and value engineering initiatives.
Current wording
Cost of sales was $322.9 million for the three fiscal quarters ended September 26, 2026, compared to $291.8 million for the three fiscal quarters ended September 27, 2025. The $31.1 million increase in cost of sales was primarily the result of the increase in sales volume, partially offset by the impact of production efficiencies resulting from lean manufacturing and value engineering programs. Gross margin increased by 0.4% and was 35.0% of net sales for the three fiscal quarters ended September 26, 2026, compared to 34.6% of net sales for the three fiscal quarters ended September 27, 2025. The increase in gross margin reflects the benefits of our incremental lean manufacturing and value engineering initiatives.
Previous wording
Selling, general, and administrative expense was $74.2 million for the two fiscal quarters ended June 27, 2026, compared to $62.6 million for the two fiscal quarters ended June 28, 2025. The $11.6 million, or 18.6%, increase in selling, general, and administrative expense was primarily driven by increased sales and marketing investments to accelerate our fiberglass conversion strategy in the Sand States, acquisition and integration related costs, which included $4.5 million of performance-based compensatory earn-out expenses related to our Coverstar Central acquisition in 2024 and costs related to our digital transformation program.
Current wording
Selling, general and administrative expense was $110.1 million for the three fiscal quarters ended September 26, 2026, compared to $91.1 million for the three fiscal quarters ended September 27, 2025. The $18.9 million, or 20.8%, increase in selling, general and administrative expense was primarily driven by increased sales and marketing investments to accelerate our fiberglass conversion strategy in the Sand States, acquisition and integration related costs, which included $7.7 million of performance-based compensatory earn-out expenses related to our Coverstar Central acquisition in 2024 and costs related to our digital transformation program.
Previous wording
Interest expense, net was $10.7 million for the two fiscal quarters ended June 27, 2026, compared to $13.5 million for the two fiscal quarters ended June 28, 2025. The $2.8 million, or 21.0%, decrease in interest expense, net was the result of the change in the fair value of our interest rate swap and a decrease in the outstanding balance of long-term debt, compared to the two fiscal quarters ended June 28, 2025.
Current wording
Interest expense, net was $16.1 million for the three fiscal quarters ended September 26, 2026, compared to $19.6 million for the three fiscal quarters ended September 27, 2025. The $3.5 million, or 17.8%, decrease in interest expense, net was the result of the change in the fair value of our interest rate swap and lower interest rates, compared to the three fiscal quarters ended September 27, 2025.
Previous wording
Other expense, net was $2.2 million for the two fiscal quarters ended June 27, 2026, compared to other income, net of $3.4 million for the two fiscal quarters ended June 28, 2025. The $5.5 million increase in other expense, net was primarily driven by an unfavorable change in net foreign currency transaction gains and losses associated with our international subsidiaries.
Current wording
Other expense, net was $2.1 million for the three fiscal quarters ended September 26, 2026, compared to other income, net of $2.2 million for the three fiscal quarters ended September 27, 2025. The $4.3 million increase in other expense, net was primarily driven by an unfavorable change in net foreign currency transaction gains and losses associated with our international subsidiaries.
Previous wording
Earnings from our equity method investment in Premier Pools & Spas were $1.9 million for the two fiscal quarters ended June 27, 2026, compared to $1.4 million for the two fiscal quarters ended June 28, 2025, due to the financial performance of Premier Pools & Spas.
Current wording
Earnings from our equity method investment in Premier Pools & Spas were $3.7 million for the three fiscal quarters ended September 26, 2026, compared to $2.8 million for the three fiscal quarters ended September 27, 2025, due to the financial performance of Premier Pools & Spas.
Previous wording
Income tax expense was $3.3 million for the two fiscal quarters ended June 27, 2026, compared to income tax expense of $1.1 million for the two fiscal quarters ended June 28, 2025. Our effective tax rate was 43.9% for the two fiscal quarters ended June 27, 2026, compared to 9.5% for the two fiscal quarters ended June 28, 2025. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for both the two fiscal quarters ended June 27, 2026 and June 28, 2025 was primarily attributable to the discrete impact of stock compensation expense for which there is no associated tax benefit, the effects of branch accounting for Latham Canada and the jurisdictional mix of income.
Current wording
Income tax expense was $6.3 million for the three fiscal quarters ended September 26, 2026, compared to income tax expense of $8.5 million for the three fiscal quarters ended September 27, 2025. Our effective tax rate was 27.8% for the three fiscal quarters ended September 26, 2026, compared to 32.0% for the three fiscal quarters ended September 27, 2025. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for both the three fiscal quarters ended September 26, 2026 and September 27, 2025 was primarily attributable to the jurisdictional mix of income, the discrete impact of stock-based compensation forfeitures or windfalls and exercises and the effects of branch accounting for Latham Canada.
Previous wording
Net income margin was 1.3% for the two fiscal quarters ended June 27, 2026, compared to 3.5% for the two fiscal quarters ended June 28, 2025. The 2.2% decrease in net income margin was driven by a $5.8 million decrease in net income as well as the other factors described above.
Current wording
Net income margin was 3.3% for the three fiscal quarters ended September 26, 2026, compared to 4.1% for the three fiscal quarters ended September 27, 2025. The 0.8% decrease in net income margin was driven by a $1.9 million decrease in net income as well as the other factors described above.
Previous wording
Adjusted EBITDA was $56.8 million for the two fiscal quarters ended June 27, 2026, compared to $51.0 million for the two fiscal quarters ended June 28, 2025. The $5.7 million, or 11.3%, increase in Adjusted EBITDA was driven by the factors described above.
Current wording
Adjusted EBITDA was $102.0 million for the three fiscal quarters ended September 26, 2026, compared to $89.4 million for the three fiscal quarters ended September 27, 2025. The $12.7 million, or 14.2%, increase in Adjusted EBITDA was driven by the factors described above.
Previous wording
Adjusted EBITDA and Adjusted EBITDA margin are key metrics used by management and our Board to assess our financial performance. Adjusted EBITDA and Adjusted EBITDA margin are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures. We use Adjusted EBITDA and Adjusted EBITDA margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to utilize as a significant performance metric in our annual management incentive bonus plan compensation, and to compare our performance against that of other companies using similar measures. We have presented Adjusted EBITDA and Adjusted EBITDA margin solely as supplemental disclosures because we believe they allow for a more complete analysis of results of operations and assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as (i) depreciation and amortization, (ii) interest expense, net, (iii) income tax expense (benefit), (iv) (gain) loss on sale and disposal of property and equipment, (v) restructuring charges, (vi) stock-based compensation expense, (vii) unrealized losses (gains) on foreign currency transactions, (viii) strategic initiative costs, (ix) acquisition and integration related costs and (x) other.
Current wording
Adjusted EBITDA and Adjusted EBITDA margin are key metrics used by management and our Board to assess our financial performance. Adjusted EBITDA and Adjusted EBITDA margin are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures. We use Adjusted EBITDA and Adjusted EBITDA margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to utilize as a significant performance metric in our annual management incentive bonus plan compensation, and to compare our performance against that of other companies using similar measures. We have presented Adjusted EBITDA and Adjusted EBITDA margin solely as supplemental disclosures because we believe they allow for a more complete analysis of results of operations and assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as (i) depreciation and amortization, (ii) interest expense, net, (iii) income tax expense (benefit), (iv) (gain) loss on sale and disposal of property and equipment, (v) restructuring charges, (vi) stock-based compensation expense, (vii) unrealized (gains) losses on foreign currency transactions, (viii) strategic initiative costs, (ix) acquisition and integration related costs, (x) loss on extinguishment and modification of debt and (xi) other.
Previous wording
(a)Represents costs that include severance and other expenses for our executive management changes.
Current wording
(a)Represents costs that include severance and other expenses for our program to optimize certain operational and administrative functions.
Previous wording
(f)Other costs consist of other discrete items as determined by management, primarily including (i) fees paid to external advisors for various matters and (ii) other items.
Current wording
(g)Other costs consist of other discrete items as determined by management, primarily including (i) fees paid to external advisors for various matters and (ii) other items.
Previous wording
Our primary sources of liquidity are net cash provided by operating activities and availability under our Revolving Credit Facility (as defined below). Historically, we have funded working capital requirements, capital expenditures, payments related to acquisitions, and debt service requirements with internally generated cash on hand, through borrowings under our credit facilities, and through the issuance of shares of our common stock. Our primary cash needs are to fund working capital, capital expenditures, debt service requirements and any acquisitions or investments we may undertake.
Current wording
Our primary sources of liquidity are net cash provided by operating activities and availability under our New Revolving Credit Facility (as defined below). Historically, we have funded working capital requirements, capital expenditures, payments related to acquisitions, and debt service requirements with internally generated cash on hand, through borrowings under our credit facilities, and through the issuance of shares of our common stock. Our primary cash needs are to fund working capital, capital expenditures, debt service requirements and any acquisitions or investments we may undertake.
Previous wording
As of June 27, 2026, we had $43.5 million of cash, $279.8 million of outstanding borrowings and an additional $75.0 million of borrowing availability under our Revolving Credit Facility.
Current wording
As of September 26, 2026, we had $94.8 million of cash, $292.5 million of outstanding borrowings and an additional $75.0 million of borrowing availability under our New Revolving Credit Facility.
Previous wording
Our primary working capital requirements are for the purchase of inventory, payroll, rent, facility costs and other selling, general, and administrative costs. Our working capital requirements fluctuate during the fiscal year, driven primarily by seasonality and the timing of raw material purchases. Our capital expenditures are primarily related to our growth strategy, including production capacity, diversifying our product offerings, storage, and delivery equipment. We are currently undergoing a digital transformation effort to upgrade all of our technology and enterprise resource planning ("ERP") systems. We expect to fund these capital expenditures from net cash provided by operating activities or the utilization of a portion of our borrowing availability under our Revolving Credit Facility.
Current wording
Our primary working capital requirements are for the purchase of inventory, payroll, rent, facility costs and other selling, general and administrative costs. Our working capital requirements fluctuate during the fiscal year, driven primarily by seasonality and the timing of raw material purchases. Our capital expenditures are primarily related to our growth strategy, including production capacity, diversifying our product offerings, storage, and delivery equipment. We are currently undergoing a digital transformation program to upgrade all of our technology and enterprise resource planning ("ERP") systems. We expect to fund these capital expenditures from net cash provided by operating activities or the utilization of a portion of our borrowing availability under our New Revolving Credit Facility.
Previous wording
It is our belief that our existing cash, cash generated from operations and availability under our Revolving Credit Facility (which maturity is expected to be extended in the ordinary course before it matures) will be adequate to fund our operating expenses and capital expenditure requirements over the next 12 months, as well as our longer-term liquidity needs. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. We may issue debt or equity securities, which may provide an additional source of liquidity. However, there can be no assurance equity or debt financing will be available to us when we need it or, if available, the terms will be satisfactory to us and not dilutive to our then-current stockholders.
Current wording
It is our belief that our existing cash, cash generated from operations and availability under our New Revolving Credit Facility will be adequate to fund our operating expenses and capital expenditure requirements over the next 12 months, as well as our longer-term liquidity needs. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. We may issue debt or equity securities, which may provide an additional source of liquidity. However, there can be no assurance equity or debt financing will be available to us when we need it or, if available, the terms will be satisfactory to us and not dilutive to our then-current stockholders.
Previous wording
We are required to meet certain financial covenants, including maintaining specific liquidity measurements. There are also negative covenants, including certain restrictions on our ability and the ability of our subsidiaries to incur additional indebtedness, create liens, make investments, consolidate or merge with other entities, enter into transactions with affiliates, make prepayments with respect to certain indebtedness, make dividend payments, loans, or advances to us, declare dividends and make restricted payments and other distributions.
Current wording
We are required to meet certain financial covenants, including maintaining specific liquidity measurements. To the extent that outstanding usage of the New Revolving Credit Facility exceeds 40% of the commitments under the New Revolving Credit Facility as of the last day of any fiscal quarter, LIMC is required to be in compliance with a maximum First Lien Net Leverage Ratio (as defined below) of 5.20:1.00 as of the last day of such fiscal quarter. There are also negative covenants, including certain restrictions on our ability to incur additional indebtedness, create liens, make investments, consolidate or merge with other entities, enter into transactions with affiliates, make prepayments with respect to certain indebtedness and make restricted payments and other distributions.
Previous wording
As of June 27, 2026, we were in compliance with all covenants under the Credit Agreement.
Current wording
As of September 26, 2026, we were in compliance with all covenants under the New Credit Agreement.
Previous wording
The Revolving Credit Facility may be utilized to finance ongoing general corporate and working capital needs and permits Latham Pool Products to borrow loans in U.S. Dollars, Canadian Dollars, Euros and Australian Dollars. The Revolving Credit Facility matures on February 23, 2027. We are currently in discussions to extend the Revolving Credit Facility before it matures. Loans outstanding under the Revolving Credit Facility denominated in U.S. Dollars and Canadian Dollars bear interest, at the borrower’s option, at a rate per annum based on Term SOFR or CDO (each, as defined in the Credit Agreement), as applicable, plus a margin of 3.50%, or at a rate per annum based on the Base Rate or the Canadian Prime Rate (each, as defined in the Credit Agreement), plus a margin of 2.50%. Loans outstanding under the Revolving Credit Facility denominated in Euros or Australian Dollars bear interest based on EURIBOR or the AUD Rate (each, as defined in the Credit Agreement), respectively, plus a margin of 3.50%. A commitment fee accrues on any unused portion of the commitments under the Revolving Credit Facility. The commitment fee is due and payable quarterly in arrears, and initially was 0.375% per annum and, thereafter accrues at a rate per annum ranging from 0.25% to 0.50%, depending on the First Lien Net Leverage Ratio. Borrowings under the Revolving Credit Facility are not subject to amortization and are due at maturity.
Current wording
The New Revolving Credit Facility may be utilized to finance working capital and other general corporate purposes and permits Latham Pool Products to borrow loans in U.S. Dollars, Canadian Dollars, Euros and Australian Dollars. The New Revolving Credit Facility matures on August 20, 2031. Loans outstanding under the New Revolving Credit Facility denominated in U.S. Dollars and Canadian Dollars bear interest, at the borrower’s option, at a rate per annum based on Term SOFR or the Term CORRA Rate (each, as defined in the New Credit Agreement), as applicable, plus a margin ranging from 3.25% to 3.50%, depending on the First Lien Net Leverage Ratio (as defined in the New Credit Agreement, the “First Lien Net Leverage Ratio”), or at a rate per annum based on the Alternate Base Rate or the Canadian Prime Rate (each, as defined in the New Credit Agreement), plus a margin ranging from 2.25% to 2.50%, depending on the First Lien Net Leverage Ratio. Loans outstanding under the New Revolving Credit Facility denominated in Euros or Australian Dollars bear interest based on EURIBOR or the BBSY (each, as defined in the New Credit Agreement), respectively, plus a margin ranging from 3.25% to 3.50%, depending on the First Lien Net Leverage Ratio. A commitment fee accrues on any unused portion of the commitments under the New Revolving Credit Facility. The commitment fee is due and payable quarterly in arrears and accrues at a rate per annum ranging from 0.25% to 0.50%, depending on the First Lien Net
Previous wording
During the two fiscal quarters ended June 27, 2026, we repaid $35.0 million of outstanding borrowings on the Revolving Credit Facility. As of June 27, 2026, we had no outstanding borrowings under the Revolving Credit Facility and $75.0 million was available for future borrowing.
Current wording
As of September 26, 2026, we had no outstanding borrowings under the New Revolving Credit Facility and $75.0 million was available for future borrowing.
Showing the first 40 of 48 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Leverage Ratio. Borrowings under the New Revolving Credit Facility are not subject to amortization and are due at maturity.
Current report — wording carried from elsewhere
On February 23, 2022, the Company entered into a prior revolving credit facility with Barclays Bank, PLC that was utilized to finance ongoing general corporate and working capital needs and permits Latham Pool Products to borrow loans in U.S Dollars, Canadian Dollars, Euros and Australian Dollars up to $75 million (the "Prior Revolving Credit Facility"). The Prior Revolving Credit Facility would have matured on February 23, 2027 but was terminated in connection with the Refinancing.
Current report — wording carried from elsewhere
During the three fiscal quarters ended September 26, 2026, we repaid $35.0 million of outstanding borrowings on the Prior Revolving Credit Facility, before the Refinancing.