Latham Group, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

1. NATURE OF THE BUSINESS

Latham Group, Inc. (the “Company” or “Latham”) wholly owns Latham Pool Products, Inc. (“Latham Pool Products”), a designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand. Latham Pool Products offers a portfolio of pools and related products, including in-ground swimming pools, pool covers, and pool liners.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and 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 unaudited condensed consolidated balance sheet at December 31, 2025 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements as of September 26, 2026 and for the fiscal quarters and three fiscal quarters ended September 26, 2026 and September 27, 2025, respectively, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. 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 fiscal year ended December 31, 2025 included in the Company’s 2025 Annual Report on Form 10-K, filed with the SEC on March 4, 2026 (the “Annual Report”). In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of these condensed consolidated financial statements, have been included. The Company’s results of operations for the fiscal quarter and three fiscal quarters ended September 26, 2026 are not necessarily indicative of the results of operations that may be expected for the fiscal year ending December 31, 2026 or other interim periods thereof.

Use of Estimates

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. In general, net sales and net income are highest (or net loss is the lowest) during the second and third quarters, representing the peak months of swimming pool use, pool installation, and remodeling and repair activities. Severe weather may also affect net sales in all periods.

Significant Accounting Policies

Refer to the Annual Report for a discussion of the Company’s significant accounting policies.

Recently Issued Accounting Pronouncements

The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected to “opt in” to the extended transition period related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and nonpublic companies, the Company will adopt the new or revised standard at the time nonpublic companies adopt the new or revised standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company, which will occur no later than December 31, 2026. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”), which improves disclosures to provide more detailed information about a business entity’s expenses. ASU 2024-03 is effective for public business entities for fiscal years beginning after December 15, 2026. The amendments should be applied retrospectively to all prior periods presented in the financial statements, with early adoption permitted. The Company is currently evaluating ASU 2024-03 and its potential impact on the condensed consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) (“ASU 2025-11”), which improves the navigability of the required interim disclosures and clarifies when that guidance is applicable. ASU 2025-11 is effective for public business entities for interim reporting periods within annual fiscal years beginning after December 15, 2027. The amendments should be applied retrospectively to all prior periods presented in the financial statements, with early adoption permitted. The Company is currently evaluating ASU 2025-11 and its potential impact on the condensed consolidated financial statements.

3. ACQUISITIONS

Business Combinations

In February 2025, the Company completed the acquisition oftwo autocover dealers located in New York and Tennessee for a purchase price of $5.6 million. In February 2026, the Company completed the acquisition of Freedom Pools in Australia for a purchase price of $15.4 million, including a holdback of $1.6 million that has been accrued for on the Company's condensed consolidated balance sheet. Each of these acquisitions qualified as a business combination. These transactions resulted in an increase to goodwill and intangibles, but were not material to the Company's condensed consolidated financial statements, and as a result, additional business combination disclosures for these acquisitions have been omitted.

4. 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 September 26, 2026 or September 27, 2025.

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 and remeasured to fair value when an impairment charge is recognized. Such fair value measurements are based predominantly on Level 2 and Level 3 inputs.

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 because of the short-term maturities of these instruments.

Term loans

Term loans (see Note 7) are carried at amortized cost; however, the Company estimates the fair value of term loans for disclosure purposes. The fair value of a term loan is determined using inputs based on observable market data of a non-public exchange, which are classified as Level 2 inputs. The following table sets forth the carrying amount and fair value of the term loans (in thousands):

Interest rate swap

The Company estimates the fair value of the interest rate swap on a quarterly basis using Level 2 inputs, including the forward SOFR 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 SOFR curve. As of September 26, 2026 and December 31, 2025, the Company’s interest rate swap was an asset of $0.3 million and a liability of $1.1 million, respectively, which were recorded within other assets and other long-term liabilities, respectively, on the condensed consolidated balance sheets. See Note 7 for further detail.

5. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

The carrying amount of goodwill as of September 26, 2026 and as of December 31, 2025 was $161.7 million and $155.2 million, respectively. The change in the carrying value during the three fiscal quarters ended September 26, 2026 was primarily driven by the acquisition of Freedom Pools made in the first fiscal quarter of 2026.

Intangible Assets

Intangible assets, net as of September 26, 2026 consisted of the following (in thousands):

The Company recognized $7.4 million and $21.9 million of amortization expense related to intangible assets during the fiscal quarter and three fiscal quarters ended September 26, 2026. The Company recognized $7.2 million and $21.7 million of amortization expense related to intangible assets during the fiscal quarter and three fiscal quarters ended September 27, 2025.

The changes in the carrying values of dealer relationships, trade names and trademarks and backlog during the three fiscal quarters ended September 26, 2026 were driven primarily by the acquisition of Freedom Pools made in the first fiscal quarter of 2026.

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

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

6. INVENTORIES, NET

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

7. DEBT

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

On August 20, 2026 (the "Closing Date"), Latham Pool Products and certain subsidiary guarantors entered into a new credit agreement (the "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 (the "New Revolving Credit Facility"), 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 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").

The New Credit Agreement was evaluated under ASC 470-50, Debt - Modifications and Extinguishments. The borrowings under the Refinancing represent a loan syndication. As such, the New Credit Agreement was evaluated on a lender-by-lender basis and resulted in new borrowings, extinguishments and modifications depending on each lender's participation or lack thereof in the New Term Loan and the New Revolving Credit Facility. As part of the New Credit Agreement, $1.0 million of previously capitalized debt issuance costs were expensed within loss on extinguishment and modification of debt in the condensed consolidated statement of operations for the three fiscal quarters ended September 26, 2026.

The Company is 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 the Company’s 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.

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.

New Revolving Credit Facility

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 Leverage Ratio. Borrowings under the New Revolving Credit Facility are not subject to amortization and are due at maturity.

The Company incurred debt issuance costs of $0.8 million related to the New Revolving Credit Facility. The debt issuance costs were recorded within other assets on the condensed consolidated balance sheet and are being amortized over the life of the New Revolving Credit Facility.

As of September 26, 2026, there were no outstanding borrowings on the New Revolving Credit Facility and $75.0 million was available for future borrowing.

New Term Loan

Pursuant to the New Credit Agreement, Latham Pool Products borrowed $300.0 million in term loans. The New Term Loan matures on August 20, 2033. Loans outstanding under the New Term Loan bear interest, at the borrower’s option, at a rate per annum based on Term SOFR (as defined in the New Credit Agreement), plus a margin of 4.00%, or based on the Alternate Base Rate (as defined in the New Credit Agreement), plus a margin of 3.00%. Loans under the New Term Loan are subject to scheduled quarterly amortization payments of $750,000, which represents 0.25% of the initial principal amount of the New Term Loan.

The Company recorded debt issuance costs of $5.2 million and $2.5 million of debt discount related to the New Term Loan as a direct reduction to the carrying amount of long-term debt on the condensed consolidated balance sheet.

Outstanding borrowings under the New Term Loan as of September 26, 2026 were $292.5 million, net of unamortized discount and debt issuance costs of $7.5 million.

As of September 26, 2026, the unamortized debt issuance costs and discount on the New Term Loan were $5.1 million and $2.4 million, respectively. The effective interest rate was 8.26% at September 26, 2026, including the impact of the Company’s interest rate swap.

Prior Revolving Credit Facility

On February 23, 2022, the Company entered into a revolving credit facility with Barclays Bank, PLC under the Prior Credit Agreement that was utilized to finance ongoing general corporate and working capital needs and permitted Latham Pool Products to borrow loans in U.S. Dollars, Canadian Dollars, Euros and Australian Dollars up to $75.0 million (the "Prior Revolving Credit Facility"). The Prior Revolving Credit Facility had a maturity date of February 23, 2027 but was terminated as of the Closing Date of the Refinancing.

During the three fiscal quarters ended September 26, 2026, the Company repaid $35.0 million of outstanding borrowings on the Prior Revolving Credit Facility before the Refinancing.

Prior Term Loan

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.

Interest Rate Risk

Interest rate risk associated with the Prior Credit Agreement was, and with the New Credit Agreement is, mitigated partially through interest rate swaps.

The Company entered into an interest rate swap that was executed on March 10, 2023 (the “2023 Interest Rate Swap”). The 2023 Interest Rate Swap had an effective date of May 18, 2023 and a termination date of May 18, 2026. Under the terms of the 2023 Interest Rate Swap, the Company fixed its SOFR borrowing rate at 4.3725% on a notional amount of $161.0 million. The 2023 Interest Rate Swap was not designated as a hedging instrument for accounting purposes (see Note 4).

Subsequently, the Company entered into a new interest rate swap that was executed on June 4, 2025 (the “2025 Interest Rate Swap”). As part of the 2025 Interest Rate Swap, the Company terminated the 2023 Interest Rate Swap prior to its May 18, 2026 termination date. The 2025 Interest Rate Swap became effective on May 19, 2025 and has a termination date of May 18, 2027. Under the terms of the 2025 Interest Rate Swap, the Company fixed its SOFR borrowing rate at 3.92% on a notional amount of $140.0 million. The 2025 Interest Rate Swap is not designated as a hedging instrument for accounting purposes (see Note 4).

Debt Maturities

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

Guarantees

The obligations under the New Credit Agreement are guaranteed by LIMC and the wholly-owned domestic subsidiaries of LIMC (other than Latham Pool Products) as set forth in the loan guaranty (the “Guarantors”), which was executed in connection with the New Credit Agreement. The obligations under the New Credit Agreement are secured by substantially all of the Guarantors’ tangible and intangible assets, including their accounts receivable, equipment, intellectual property and inventory. The New Credit Agreement also restricts payments and other distributions unless certain conditions are met, which could restrict the Company’s ability to pay dividends. The ownership chain between Latham Pool Products and the Company consists of a series of holding companies with no material assets, liabilities, or standalone operations other than indirect equity interests in Latham Pool Products.

8. PRODUCT WARRANTIES

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

9. LEASES

For leases with initial terms greater than 12 months, the Company considers these right-of-use assets and records the related asset and obligation at the present value of lease payments over the term. For leases with initial terms equal to or less than 12 months, the Company does not consider them as right-of-use assets and instead considers them short-term lease costs that are recognized on a straight-line basis over the lease term. The Company’s leases may include escalation clauses, renewal options, and/or termination options that are factored into the Company’s determination of lease term and lease payments when it is reasonably certain the option will be exercised. The Company elected to take the practical expedient and not separate lease and non-lease components of contracts. The Company estimates an incremental borrowing rate to discount the lease payments based on information available at lease commencement because the implicit rate of the lease is generally not known.

The Company leases manufacturing facilities, office space, land, and certain vehicles and equipment under operating leases. The Company also leases certain vehicles and equipment under finance leases. The Company determines if an arrangement is a lease at inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The components of lease expense for the fiscal quarter and three fiscal quarters ended September 26, 2026 and September 27, 2025 were as follows (in thousands):

Operating and finance lease right-of-use assets and lease-related liabilities as of September 26, 2026 and December 31, 2025 were as follows (in thousands):

The table below presents supplemental information related to leases as of September 26, 2026 and December 31, 2025:

The table below presents supplemental information related to the cash flows for operating leases recorded on the condensed consolidated statements of cash flows (in thousands):

The following table summarizes fiscal year maturities of operating and finance lease liabilities as of September 26, 2026 (in thousands):

10. NET SALES

The following table sets forth the Company’s disaggregation of net sales by product line (in thousands):

11. INCOME TAXES

The effective income tax rate for the fiscal quarter and three fiscal quarters ended September 26, 2026 was 19.7% and 27.8%, respectively, compared to 47.9% and 32.0%, respectively, for the fiscal quarter and three fiscal quarters ended September 27, 2025. The differences between the U.S. federal statutory income tax rate and the Company's effective income tax rates for the fiscal quarter ended September 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.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S. The OBBBA maintained the 21% corporate tax rate and made permanent many of the beneficial expired and expiring tax provisions originally enacted in the Tax Cuts and Jobs Act of 2017, including the immediate expensing of domestic research and development expenditures, more favorable interest deductibility and 100% bonus depreciation with effective dates in 2025. Revisions to the international tax framework are effective in 2026. The OBBBA did not have a material impact on the Company's effective tax rate.

12. STOCK-BASED COMPENSATION

On April 12, 2021, the Company’s stockholders approved the Latham Group, Inc. 2021 Omnibus Equity Incentive Plan (as amended, the “2021 Omnibus Equity Plan”), which became effective on April 22, 2021, and was further amended on May 2, 2023 and April 30, 2026. Such amendments, among other things, collectively increased the maximum aggregate number of shares reserved for issuance under the 2021 Omnibus Equity Plan to 24,570,212 shares. The 2021 Omnibus Equity Plan provides for the issuance of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock units and other stock-based and cash-based awards.

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

As of September 26, 2026, total unrecognized stock-based compensation expense related to all unvested stock-based awards was $9.8 million, which is expected to be recognized over a weighted-average period of 2.2 years.

Restricted Stock Units

The following table represents the Company’s restricted stock units activity during the three fiscal quarters ended September 26, 2026:

Stock Options

The following table represents the Company’s stock options activity during the three fiscal quarters ended September 26, 2026:

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

Stock Appreciation Rights

The following table represents the Company’s stock appreciation rights activity during the three fiscal quarters ended September 26, 2026:

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

Performance Stock Units

During the year ended December 31, 2025, the Compensation Committee of the Board of Directors of the Company approved the grant of performance stock units (“PSUs”) as a portion of the annual equity award to the Company’s senior management. The 2025 PSU program includes three equal tranches of grants. Each tranche has an annual performance period, with performance goals established for the first tranche of PSUs granted in 2025 in dollars, and second and third tranches of PSUs granted or to be granted in 2026 and 2027, respectively, as a percentage of growth from actual performance in the prior year. Any earned PSUs cliff vest on the third anniversary of the grant date for the first tranche. Thirty-three percent of the target number of PSUs awarded on each grant date will be earned at 0% to 200% of the target number of PSUs based on the Company’s achievement of the applicable Adjusted EBITDA performance goal (with 100% of PSUs being earned at target performance, and linear interpolation between threshold and target performance and between target and maximum performance) as defined in the award agreement, for each year of thethree-year performance period beginning on January 1, 2025 and ending December 31, 2027. The first and second tranches of PSUs under the 2025 PSU program were granted in March 2025 and 2026, respectively.

During the three fiscal quarters ended September 26, 2026, additional PSU grants were approved for the 2026 PSU program. The 2026 PSU program includes three equal tranches of grants. Each tranche has an annual performance period, with performance goals established for the first tranche of PSUs granted in 2026 in dollars, and second and third tranches of PSUs to be granted in 2027 and 2028, respectively, as a percentage of growth from actual performance in the prior year. Any earned PSUs cliff vest on the third anniversary of the grant date for the first tranche. Thirty-three percent of the target number of PSUs awarded on each grant date will be earned at 0% to 200% of the target number of PSUs based on the Company’s achievement of the applicable Adjusted EBITDA performance goal (with 100% of PSUs being earned at target performance, and linear interpolation between threshold and target performance and between target and maximum performance) as defined in the award agreement, for each year of thethree-year performance period beginning on January 1, 2026 and ending December 31, 2028. The first tranche of PSUs under the 2026 PSU program was granted in March 2026.

Adjusted EBITDA is considered a performance condition and the grant date fair value corresponds with management’s expectation of the probable outcome of the performance condition as of the grant date. The grant date fair value was determined based on the fair market value of the Company’s stock at market close on the grant date multiplied by the target number of shares subject to the award and adjusted for management’s expectation of the probable outcome of the performance condition. The probability of achieving the performance criteria is assessed quarterly during the performance period. Compensation expense related to unvested PSUs is recognized ratably over the performance period.

The following table represents the Company’s PSU activity during the three fiscal quarters ended September 26, 2026:

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

(2)An additional 358,180 PSUs could potentially be included if the maximum performance level of 200% is earned for all PSUs granted on or after January 1, 2025 and outstanding as of September 26, 2026.

13. NET INCOME PER SHARE

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

As of September 26, 2026 and December 31, 2025,117,750,570 and 116,766,927 shares of common stock were issued and outstanding, respectively.

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

14. SEGMENT REPORTING

The Company conducts business asone operating and reportable segment that designs, manufactures, and markets in-ground swimming pools, pool covers, and pool liners. The Company’s Chief Executive Officer, who is the chief operating decision maker (“CODM”), reviews financial information presented on a consolidated basis for purposes of assessing financial performance and allocating resources.

The Company reports consolidated net income (loss), as management believes that is the measure most consistent with the measurement principles in the Company’s consolidated financial statements. Consolidated net income (loss) is used by the CODM predominantly in the annual budget and forecasting, including consideration of budget-to-actual variances when making decisions about the allocation of operating and capital resources.

Operations of the Company’s single segment consisted of the following (in thousands):

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

(2)Other selling, general and administrative expense includes total selling, general and administrative expense (as presented in the condensed consolidated statements of operations) excluding depreciation, amortization, stock-based compensation, strategic initiative costs and acquisition and integration related costs.

(3)Inclusive of finance lease amortization.

(4)Represents fees paid to external consultants and other expenses for our strategic initiatives.

(5)Represents acquisition and integration costs, including the earn-out related to the Coverstar Central acquisition, as well as other costs related to potential transactions.

(6)Represents costs that include severance and other expenses for our program to optimize certain operational and administrative functions.

(7)Represents the loss on extinguishment and modification of debt in connection with the Refinancing.

15. SUBSEQUENT EVENTS

On October 27, 2026, the Latham Board of Directors approved a stock repurchase program (the “Repurchase Program”) which authorized the Company to repurchase up to $100 million of the Company’s shares of common stock over the next three years. The Company may effect these repurchases in open market transactions, privately negotiated purchases or other acquisitions. The Company is not obligated to repurchase any of its shares of its common stock under the Repurchase Program and the timing and amount of any repurchases will depend on market conditions, the Company’s stock price, alternative uses of capital, the terms of the Company’s debt instruments and other factors.