Latham Group, Inc. (“Latham” or “the Company”) (Nasdaq: SWIM), the
largest designer, manufacturer, and marketer of in-ground
residential swimming pools in North America, Australia, and New
Zealand, today announced financial results for the first quarter of
its fiscal year 2023 ended April 1, 2023.
First Quarter Fiscal 2023 Highlights:
- Net sales of $137.7 million, down 28.1% year-over-year
- Net loss of $14.4 million versus net loss of $2.8 million in
the prior year period, representing a 10.4% net loss margin
- Adjusted EBITDA of $11.0 million, representing an 8.0% Adjusted
EBITDA margin
“Our operational execution enabled us to deliver first quarter
results above our expectations in spite of the continued
challenging macroenvironment and a difficult year-over-year
comparison,” said Scott Rajeski, President and Chief Executive
Officer of Latham. “We have taken deliberate actions to right size
our costs and inventories in response to the market conditions. We
have also ramped up our digital marketing efforts that produced
year-over-year increases in our website activity and leads for our
dealer partners.”
Mr. Rajeski continued, “We continue to make progress in driving
material conversion from concrete to fiberglass swimming pools. In
2022, we grew fiberglass pool volumes in a down U.S. in-ground pool
installation market, and we expect that continued momentum in
fiberglass will position us to outperform the market again this
year.”
“We are uniquely positioned to drive consumer demand in a
difficult macroeconomic environment as we expand our dealer base,
deepen our existing dealer partnerships, and execute our
direct-to-homeowner and fiberglass conversion strategies. These
efforts, combined with ongoing productivity gains from our lean and
value engineering initiatives, position us well to deliver on our
fiscal 2023 outlook,” Mr. Rajeski concluded.
First Quarter Fiscal 2023 Results
Net sales for the first quarter of fiscal 2023 were $137.7
million, down $53.9 million, or 28.1% from first quarter of fiscal
2022. The decrease was primarily attributable to volume declines as
the pool market returned to pre-2020 seasonality, the wholesale
channel continued to destock packaged pool inventory, and
macroeconomic challenges continued.
Gross profit for the first quarter of fiscal 2023 was $33.4
million, down $37.3 million, or 52.8% from the prior fiscal year’s
first quarter. Gross margin was 24.2%, compared to 36.9% in the
prior year period. Gross profit and gross margin were driven by
reduced sales, negative fixed cost leverage from volume declines,
the impact of inflation, and the right sizing of our inventory.
Selling, general, and administrative expenses (“SG&A”)
decreased to $33.1 million from $45.2 million in the first quarter
of fiscal 2022, driven primarily by a $9.4 million decrease in
stock-based compensation expense and benefits from the cost
reduction actions taken in the fourth quarter of fiscal 2022.
SG&A as a percentage of net sales increased to 24.0% from
23.6%. Excluding non-cash stock-based compensation expense,
SG&A decreased by $2.7 million from the prior year period.
Net loss was $14.4 million, or ($0.13) per share compared to a
net loss of $2.8 million, or ($0.02) per share, for the prior
fiscal year’s first quarter. Net loss margin was 10.4%, compared to
a net loss margin of 1.5% for the first quarter of fiscal 2022.
Adjusted EBITDA for the first quarter of fiscal 2023 was $11.0
million, down $37.0 million or 77.0%, from the prior fiscal year’s
first quarter, primarily driven by the decrease in gross profit and
partially offset by the reduction in SG&A expenses. Adjusted
EBITDA margin decreased to 8.0% from 25.0% for the prior year
period.
Balance Sheet, Cash Flow, and Liquidity
As of April 1, 2023, the Company had cash and cash equivalents
of $55.0 million and $27.0 million of borrowing availability under
its $75.0 million revolving credit facility, giving the Company
total liquidity of $82.0 million as it enters peak pool selling
season, a period during which the Company typically generates the
majority of its cash. Total debt was $360.5 million as of April 1,
2023.
Net cash used in operating activities was $14.5 million for the
fiscal quarter ended April 1, 2023 versus $57.5 million in the
prior fiscal year first quarter, primarily driven by a decrease in
inventories to meet demand outlook while maintaining lead times and
service levels.
Capital expenditures totaled $9.9 million in the first quarter
of fiscal 2023 compared to $6.7 million in the first quarter of
fiscal 2022. The increase in capital spending was primarily related
to the Company’s fiberglass capacity expansion initiatives, most
notably the Kingston manufacturing facility project.
Fiscal 2023 Outlook
Latham affirms its existing net sales, adjusted EBITDA, and
capital expenditures guidance for the full year fiscal 2023. The
Company’s financial outlook reflects:
- First quarter fiscal 2023 results;
- The impact of macroeconomic challenges on consumer spending and
demand, resulting in anticipated declines in the industry for U.S.
new in-ground pool installations;
- Normalization of packaged pool channel inventory in the
wholesale distribution channel from elevated levels, which is
expected to remain a headwind through at least the first half of
2023;
- Continued progress executing our strategy to drive material
conversion from concrete to fiberglass swimming pools, supported by
our continued momentum on our lead generation efforts and digital
tools;
- Benefits from previously announced cost reduction actions and
continuous improvement initiatives; and
- Disciplined capital investments with
a focus on the completion of projects for the Kingston, Ontario and
Seminole, Oklahoma fiberglass manufacturing facilities.
Metric |
Low |
High |
Net Sales |
$565 million |
$615 million |
Adjusted EBITDA1 |
$90 million |
$110 million |
Capital Expenditures |
$35 million |
$40 million |
1A reconciliation of Latham’s projected Adjusted EBITDA to net
loss for fiscal 2023 is not available due to uncertainty related to
our future income tax expense.
Conference Call Details
Latham will hold a conference call to discuss its first quarter
fiscal 2023 financial results today, May 9, 2023, at 9:00 AM
Eastern Time.
Participants are encouraged to pre-register for the conference
call by visiting
https://dpregister.com/sreg/10177471/f8f79d4316.
Callers who pre-register will be sent a confirmation e-mail
including a conference passcode and unique PIN to gain immediate
access to the call. Participants may pre-register at any time,
including up to and after the call start time. To ensure you are
connected for the full call, please register at least 10 minutes
before the start of the call.
A live audio webcast of the conference call, along with related
presentation materials, will be available online
at https://ir.lathampool.com/ under “Events &
Presentations”.
Those without internet access or unable to pre-register may dial
in by calling:PARTICIPANT DIAL IN (TOLL FREE):
1-833-953-2435PARTICIPANT INTERNATIONAL DIAL
IN: 1-412-317-5764
A replay will be available approximately two hours after the
conclusion of the call on the Company’s investor relations website
under “Events & Presentations” or by dialing 1-877-344-7529 or
1-412-317-0088. The conference ID for the replay is 9816691. The
replay will be available through May 23, 2023.
About Latham Group, Inc.
Latham Group, Inc., headquartered in Latham, NY, is the largest
designer, manufacturer, and marketer of in-ground residential
swimming pools in North America, Australia, and New Zealand. Latham
has coast-to-coast operations consisting of over 2,000 employees
across over 30 locations.
Non-GAAP Financial Measures
We track our non-GAAP financial measures to monitor and manage
our underlying financial performance. This news release includes
the presentation of Adjusted EBITDA and Adjusted EBITDA margin,
which are non-GAAP financial measures that exclude the impact of
certain costs, losses, and gains that are required to be included
in our profit and loss measures under GAAP. Although we believe
these measures are useful to investors and analysts for the same
reasons it is useful to management, as discussed below, these
measures are neither a substitute for, nor superior to, U.S. GAAP
financial measures or disclosures. Other companies may calculate
similarly-titled non-GAAP measures differently, limiting their
usefulness as comparative measures. We have reconciled our historic
Adjusted EBITDA to the applicable most comparable GAAP measure, net
loss, in this news release.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA and Adjusted EBITDA margin are key metrics used
by management and our board of directors 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, (iii) income tax (benefit) expense, (iv)
loss (gain) 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, (x) loss on extinguishment of debt, (xi)
underwriting fees related to offering of common stock, (xii) Odessa
fire and (xiii) other items that we do not believe are indicative
of our core operating performance.
Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP
financial measures and should not be considered as alternatives to
net loss as a measure of financial performance or any other
performance measure derived in accordance with GAAP, and they
should not be construed as an inference that our future results
will be unaffected by unusual or non-recurring items. You are
encouraged to evaluate these adjustments and the reasons we
consider them appropriate for supplemental analysis. In evaluating
Adjusted EBITDA and Adjusted EBITDA margin, you should be aware
that in the future we may incur expenses that are the same as or
similar to some of the adjustments in this news release. There can
be no assurance that we will not modify the presentation of
Adjusted EBITDA and Adjusted EBITDA margin in the future, and any
such modification may be material. In addition, other companies,
including companies in our industry, may not calculate Adjusted
EBITDA and Adjusted EBITDA margin at all or may calculate Adjusted
EBITDA and Adjusted EBITDA margin differently and accordingly, are
not necessarily comparable to similarly entitled measures of other
companies, which reduces the usefulness of Adjusted EBITDA and
Adjusted EBITDA margin as tools for comparison.
Adjusted EBITDA and Adjusted EBITDA margin have their
limitations as analytical tools, and you should not consider them
in isolation or as a substitute for analysis of our results as
reported under GAAP. Some of these limitations are that Adjusted
EBITDA and Adjusted EBITDA margin:
- do not reflect every expenditure,
future requirements for capital expenditures or contractual
commitments;
- do not reflect changes in our
working capital needs;
- do not reflect the interest
expense, or the amounts necessary to service interest or principal
payments, on our outstanding debt;
- do not reflect income tax (benefit)
expense, and because the payment of taxes is part of our
operations, tax expense is a necessary element of our costs and
ability to operate;
- do not reflect non-cash stock-based
compensation, which will remain a key element of our overall
compensation package; and
- do not reflect the impact of
earnings or charges resulting from matters we consider not to be
indicative of our ongoing operations.
Although depreciation and amortization are eliminated in the
calculation of Adjusted EBITDA and Adjusted EBITDA margin, the
assets being depreciated and amortized will often have to be
replaced in the future, and Adjusted EBITDA and Adjusted EBITDA
margin do not reflect any costs of such replacements.
Forward-looking Statements
Certain statements in this earnings release constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements contained
in this release other than statements of historical fact may
constitute forward-looking statements, including statements
regarding our future operating results and financial position, our
business strategy and plans, business and market trends, our
objectives for future operations, macroeconomic and geopolitical
conditions, and the sufficiency of our cash balances, working
capital and cash generated from operating, investing, and financing
activities for our future liquidity and capital resource needs.
These statements involve known and unknown risks, uncertainties,
assumptions and other important factors, many of which are outside
of our control, which may cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements, including: secular shifts in consumer
demand for swimming pools and spending on outdoor living spaces;
slow pace of material conversion from concrete pools to fiberglass
pools in the pool industry; changes in access to consumer credit or
increases in interest rates impacting consumers’ ability to finance
their purchases of pools; macroeconomic conditions; our ability to
sustain further growth in our business; adverse weather conditions;
natural disasters, war, terrorism, public health issues or other
catastrophic events; our ability to attract, develop and retain
highly qualified personnel; our ability to attract dealers and
distributors to purchase our products; the loss of our largest
customers or suppliers; our ability to source the quantity or
quality of raw materials and components, and increases in costs
thereof; inflationary impacts; product quality issues, warranty
claims or safety concerns; competition; failure to meet customer
specifications or consumer expectations; our inability to collect
accounts receivables from our customers; challenges in the
implementation of our enterprise resource planning system; changes
or increases in environmental, health, safety, transportation and
other government regulations; the effects of climate change and the
expanding legal and regulatory restrictions intended to address
climate change; our ability to obtain transportation services to
deliver our product and to obtain raw materials timely, and
increases in transportation costs; enforcement of intellectual
property rights by or against us; the risks of doing business
internationally; cyber security breaches and data leaks, and our
dependence on information technology systems; and other factors set
forth under “Risk Factors” and elsewhere in our most recent Annual
Report on Form 10-K and subsequent reports we file or furnish with
the SEC. New emerging risks and uncertainties not presently known
to us or that we currently deem immaterial also may impair our
business, financial condition, results of operations and cash
flows.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable and our expectations
based on third-party information and projections are from sources
that management believes to be reputable, we cannot guarantee
future results, levels of activities, performance or achievements.
These forward-looking statements reflect our views with respect to
future events as of the date hereof or the date specified herein,
and we have based these forward-looking statements on our current
expectations and projections about future events and trends. Given
these uncertainties, you should not place undue reliance on these
forward-looking statements. Except as required by law, we undertake
no obligation to update or review publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise after the date hereof. We anticipate that subsequent
events and developments will cause our views to change. Our
forward-looking statements further do not reflect the potential
impact of any future acquisitions, merger, dispositions, joint
ventures or investments we may undertake.
Investors Contact:Nicole Harlowe Edelman for
Lathamlatham@edelman.com646 750 7235Media
Contact:Jeff AnzulewiczLatham, The Pool
Companyjeffanzulewicz@lathampool.com 717 813 3093
Latham Group, Inc. Condensed Consolidated
Statements of Operations(in thousands, except share and
per share data) (unaudited) |
|
|
|
Fiscal Quarter Ended |
|
April 1, 2023 |
|
April 2, 2022 |
Net sales |
$ |
137,719 |
|
|
$ |
191,614 |
|
Cost of sales |
|
104,349 |
|
|
|
120,960 |
|
Gross profit |
|
33,370 |
|
|
|
70,654 |
|
Selling, general, and
administrative expense |
|
33,057 |
|
|
|
45,225 |
|
Underwriting fees
related to offering of common stock |
|
— |
|
|
|
11,437 |
|
Amortization |
|
6,632 |
|
|
|
7,192 |
|
(Loss) income from
operations |
|
(6,319 |
) |
|
|
6,800 |
|
Other expense
(income): |
|
|
|
|
|
Interest expense |
|
10,804 |
|
|
|
1,765 |
|
Loss on extinguishment of debt |
|
— |
|
|
|
3,465 |
|
Other expense (income), net |
|
210 |
|
|
|
(355 |
) |
Total other expense, net |
|
11,014 |
|
|
|
4,875 |
|
Earnings from equity
method investment |
|
37 |
|
|
|
542 |
|
(Loss) income before income taxes |
|
(17,296 |
) |
|
|
2,467 |
|
Income tax (benefit)
expense |
|
(2,928 |
) |
|
|
5,307 |
|
Net loss |
$ |
(14,368 |
) |
|
$ |
(2,840 |
) |
Net loss per share
attributable to common stockholders: |
|
|
|
|
|
Basic |
$ |
(0.13 |
) |
|
$ |
(0.02 |
) |
Diluted |
$ |
(0.13 |
) |
|
$ |
(0.02 |
) |
Weighted-average
common shares outstanding – basic and diluted |
|
|
|
|
|
Basic |
|
112,102,198 |
|
|
|
113,698,513 |
|
Diluted |
|
112,102,198 |
|
|
|
113,698,513 |
|
Latham Group, Inc. |
Condensed Consolidated Balance Sheets |
(in thousands, except share and per share data) (unaudited) |
|
April 1, |
|
December 31, |
|
2023 |
|
|
2022 |
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash |
$ |
55,016 |
|
|
$ |
32,626 |
|
Trade receivables, net |
|
102,374 |
|
|
|
48,847 |
|
Inventories, net |
|
149,555 |
|
|
|
165,220 |
|
Income tax receivable |
|
5,132 |
|
|
|
2,316 |
|
Prepaid expenses and other current assets |
|
6,579 |
|
|
|
5,998 |
|
Total current assets |
|
318,656 |
|
|
|
255,007 |
|
Property and equipment,
net |
|
105,167 |
|
|
|
98,184 |
|
Equity method investment |
|
25,132 |
|
|
|
25,095 |
|
Deferred tax assets |
|
7,867 |
|
|
|
7,762 |
|
Operating lease right-of-use
assets |
|
36,927 |
|
|
|
38,308 |
|
Goodwill |
|
131,196 |
|
|
|
131,383 |
|
Intangible assets, net |
|
302,299 |
|
|
|
309,215 |
|
Other assets |
|
2,408 |
|
|
|
4,729 |
|
Total assets |
$ |
929,652 |
|
|
$ |
869,683 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
48,835 |
|
|
$ |
25,449 |
|
Accounts payable – related party |
|
367 |
|
|
|
358 |
|
Current maturities of long-term debt |
|
3,250 |
|
|
|
3,250 |
|
Current operating lease liabilities |
|
7,084 |
|
|
|
6,923 |
|
Accrued expenses and other current liabilities |
|
46,747 |
|
|
|
50,885 |
|
Total current liabilities |
|
106,283 |
|
|
|
86,865 |
|
Long-term debt, net of
discount and current portion |
|
357,211 |
|
|
|
309,631 |
|
Deferred income tax
liabilities, net |
|
50,181 |
|
|
|
50,181 |
|
Liability for uncertain tax
positions |
|
7,248 |
|
|
|
7,123 |
|
Non-current operating lease
liabilities |
|
30,905 |
|
|
|
32,391 |
|
Other long-term
liabilities |
|
2,777 |
|
|
|
702 |
|
Total liabilities |
|
554,605 |
|
|
|
486,893 |
|
Commitments and
contingencies |
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
Preferred stock, $0.0001 par
value; 100,000,000 shares authorized as of both April 1, 2023 and
December 31, 2022; no shares issued and outstanding as of both
April 1, 2023 and December 31, 2022 |
|
— |
|
|
|
— |
|
Common stock, $0.0001 par
value; 900,000,000 shares authorized as of April 1, 2023 and
December 31, 2022; 114,690,053 and 114,667,975 shares issued and
outstanding, as of April 1, 2023 and December 31, 2022,
respectively |
|
11 |
|
|
|
11 |
|
Additional paid-in
capital |
|
447,649 |
|
|
|
440,880 |
|
Accumulated deficit |
|
(68,936 |
) |
|
|
(54,568 |
) |
Accumulated other
comprehensive loss |
|
(3,677 |
) |
|
|
(3,533 |
) |
Total stockholders’ equity |
|
375,047 |
|
|
|
382,790 |
|
Total liabilities and stockholders’ equity |
$ |
929,652 |
|
|
$ |
869,683 |
|
Latham Group, Inc.Condensed
Consolidated Statements of Cash Flows(in
thousands)(unaudited) |
|
Fiscal Quarter Ended |
|
|
April 1, |
April 2, |
|
|
2023 |
2022 |
|
Cash flows from
operating activities: |
|
|
|
|
|
Net loss |
$ |
(14,368 |
) |
|
$ |
(2,840 |
) |
Adjustments to reconcile net
loss to net cash provided by operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
9,258 |
|
|
|
9,494 |
|
Amortization of deferred financing costs and debt discount |
|
430 |
|
|
|
280 |
|
Non-cash lease expense |
|
1,877 |
|
|
|
1,780 |
|
Change in fair value of interest rate swaps |
|
4,866 |
|
|
|
(2,781 |
) |
Stock-based compensation expense |
|
6,769 |
|
|
|
16,925 |
|
Underwriting fees related to offering of common stock |
|
— |
|
|
|
11,437 |
|
Loss on extinguishment of debt |
|
— |
|
|
|
3,465 |
|
Other non-cash, net |
|
2,560 |
|
|
|
1,374 |
|
Earnings from equity method investment |
|
(37 |
) |
|
|
(542 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
Trade receivables |
|
(55,286 |
) |
|
|
(78,947 |
) |
Inventories |
|
15,615 |
|
|
|
(30,490 |
) |
Prepaid expenses and other current assets |
|
(593 |
) |
|
|
(790 |
) |
Income tax receivable |
|
(2,816 |
) |
|
|
(26 |
) |
Other assets |
|
(1,225 |
) |
|
|
(328 |
) |
Accounts payable |
|
20,947 |
|
|
|
17,494 |
|
Accrued expenses and other current liabilities |
|
(3,190 |
) |
|
|
(3,234 |
) |
Other long-term liabilities |
|
717 |
|
|
|
261 |
|
Net cash used in operating activities |
|
(14,476 |
) |
|
|
(57,468 |
) |
Cash flows from
investing activities: |
|
|
|
|
|
Purchases of property and
equipment |
|
(9,942 |
) |
|
|
(6,666 |
) |
Net cash used in investing activities |
|
(9,942 |
) |
|
|
(6,666 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
Proceeds from long-term debt
borrowings |
|
— |
|
|
|
320,125 |
|
Payments on long-term debt
borrowings |
|
(813 |
) |
|
|
(284,009 |
) |
Proceeds from borrowings on
revolving credit facilities |
|
48,000 |
|
|
|
20,000 |
|
Payments on revolving credit
facility |
|
— |
|
|
|
(10,000 |
) |
Deferred financing fees
paid |
|
— |
|
|
|
(6,865 |
) |
Proceeds from the issuance of
common stock |
|
— |
|
|
|
257,663 |
|
Repayments of finance lease
obligations |
|
(101 |
) |
|
|
— |
|
Repurchases and retirements of
common stock |
|
— |
|
|
|
(257,663 |
) |
Net cash provided by financing activities |
|
47,086 |
|
|
|
39,251 |
|
Effect of exchange rate changes on cash |
|
(278 |
) |
|
|
(411 |
) |
Net increase
(decrease) in cash |
|
22,390 |
|
|
|
(25,294 |
) |
Cash at beginning of
period |
|
32,626 |
|
|
|
43,952 |
|
Cash at end of period |
$ |
55,016 |
|
|
$ |
18,658 |
|
Supplemental cash flow
information: |
|
|
|
|
|
Cash paid for interest |
$ |
5,123 |
|
|
$ |
1,628 |
|
Income taxes paid, net |
|
637 |
|
|
|
578 |
|
Supplemental
disclosure of non-cash investing and financing
activities: |
|
|
|
|
|
Purchases of property and
equipment included in accounts payable and accrued expenses |
$ |
5,849 |
|
|
$ |
337 |
|
Capitalized internal-use
software included in accounts payable – related party |
|
359 |
|
|
|
900 |
|
Right-of-use operating and
finance lease assets obtained in exchange for lease
liabilities |
|
1,625 |
|
|
|
33,839 |
|
Latham Group, Inc.Adjusted EBITDA and Adjusted EBITDA
Margin Reconciliation(Non-GAAP Reconciliation)(in
thousands) |
|
Fiscal Quarter Ended |
|
|
April 1, 2023 |
|
|
April 2, 2022 |
|
|
Net loss |
$ |
(14,368 |
) |
|
$ |
(2,840 |
) |
|
Depreciation and
amortization |
|
9,258 |
|
|
|
9,494 |
|
|
Interest
expense |
|
10,804 |
|
|
|
1,765 |
|
|
Income tax
(benefit) expense |
|
(2,928 |
) |
|
|
5,307 |
|
|
Loss on sale and
disposal of property and equipment |
|
8 |
|
|
|
— |
|
|
Restructuring
charges(a) |
|
519 |
|
|
|
13 |
|
|
Stock-based
compensation expense(b) |
|
6,769 |
|
|
|
16,925 |
|
|
Unrealized losses
(gains) on foreign currency transactions(c) |
|
730 |
|
|
|
(4 |
) |
|
Strategic
initiative costs(d) |
|
1,067 |
|
|
|
1,818 |
|
|
Acquisition and
integration related costs(e) |
|
11 |
|
|
|
257 |
|
|
Loss on
extinguishment of debt(f) |
|
— |
|
|
|
3,465 |
|
|
Underwriting fees
related to offering of common stock(g) |
|
— |
|
|
|
11,437 |
|
|
Odessa
fire(h) |
|
(864 |
) |
|
|
— |
|
|
Other(i) |
|
27 |
|
|
|
325 |
|
|
Adjusted
EBITDA |
$ |
11,033 |
|
|
$ |
47,962 |
|
|
Net sales |
$ |
137,719 |
|
|
$ |
191,614 |
|
|
Net loss
margin |
|
(10.4 |
) |
% |
|
(1.5 |
) |
% |
Adjusted EBITDA
margin |
|
8.0 |
|
% |
|
25.0 |
|
% |
|
(a) Represents costs related to a cost reduction plan announced
in 2022 to optimize production and shift schedules, implement a
workforce reduction, and to shut down our Bossier City, Louisiana
facility. Also includes severance and other costs for our executive
management changes.(b) Represents non-cash stock-based compensation
expense. (c) Represents unrealized foreign currency transaction
losses (gain) associated with our international subsidiaries.(d)
Represents fees paid to external consultants for our strategic
initiatives.(e) Represents acquisition and integration costs
primarily related to the acquisition of Radiant, the equity
investment in Premier Pools & Spas, as well as other costs
related to potential transactions.(f) Represents the loss on
extinguishment of debt in connection with our debt refinancing on
February 23, 2022.(g) Represents underwriting fees related to our
offering of common stock that was completed in January 2022.(h)
Represents costs incurred and insurance recoveries in excess of
costs incurred for the period related to a production facility fire
in Odessa, Texas. (i) Other costs consist of other discrete items
as determined by management, primarily including (i) fees paid to
external advisors for various matters, (ii) non-cash adjustments to
record the step-up in the fair value of inventory related to the
acquisition of Radiant, which was amortized through cost of sales
in the condensed consolidated statements of operations, and (iii)
other items.
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