Latham Group, Inc. Form 8-K Summary
Business context and reporting period
Latham Group, Inc. filed a Form 8-K dated July 9, 2021, under Item 2.02 to update expectations for stock-based compensation following its April 2021 initial public offering. The company is a Delaware corporation headquartered in Latham, New York, and its common stock trades on Nasdaq under the symbol SWIM.
Key financial metrics
| Metric | Company expectation |
|---|---|
| Fiscal 2021 stock-based compensation expense | Approximately $138 million |
| Expense related to conversion of Class B units | Approximately $131 million |
| Second-quarter fiscal 2021 stock-based compensation expense | Approximately $76 million |
| Second-quarter charges related to accelerated Class B units | $49.5 million |
| Second-half fiscal 2021 expense timing | Remaining expense expected to be distributed approximately evenly between the third and fourth quarters |
The filing states that stock-based compensation is a non-cash expense. It does not provide revenue, net income, cash flow, margin, debt, liquidity, or other operating performance figures.
Material changes versus the prior comparable period
The filing does not present comparative period financial results. The material update is the company’s revised disclosure of expected fiscal 2021 stock-based compensation, including accelerated recognition of certain Class B units following the reorganization and IPO-related conversion of units into restricted and common stock.
Guidance, outlook, commentary, and risks
Management expects approximately $138 million of stock-based compensation expense for fiscal 2021, with approximately $76 million recognized in the second quarter and the balance allocated approximately evenly across the third and fourth quarters. These estimates are forward-looking and may differ from actual results.
Risks identified include changes in consumer demand for swimming pools and outdoor living, economic conditions and COVID-19 impacts, consumer credit availability and interest rates, weather, supplier and transportation availability and costs, product quality, litigation, intellectual property matters, employee retention, international operations, cybersecurity, catastrophic events, and increased regulation including environmental laws.
Facts investors should verify
- Whether actual fiscal 2021 stock-based compensation expense approximated the $138 million expectation.
- The amount and timing of charges associated with the Class B unit conversion and IPO-related acceleration.
- The impact of the non-cash expense on reported earnings, per-share results, and any adjusted financial measures.
- Subsequent filings for actual revenue, profitability, cash flow, debt, liquidity, and operating trends.
- Whether the risks identified in the filing materially affected demand, production, supply chains, or financial results.