UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
OR
For the transition period from to
Commission file number:
(Exact name of registrant as specified in its charter)
| ||
(State or other jurisdiction of | (I.R.S. Employer Identification No.) | |
(Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of November 1, 2024,
2
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Index to Condensed Consolidated Financial Statements (Unaudited)
| 4 | |
5 | ||
Condensed Consolidated Statements of Comprehensive Income (Loss) | 6 | |
7 | ||
9 | ||
10 |
3
Latham Group, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
September 28, | December 31, | ||||||
| 2024 |
| 2023 | ||||
Assets | |||||||
Current assets: |
|
|
|
| |||
Cash | $ | | $ | | |||
Trade receivables, net |
| |
| | |||
Inventories, net |
| |
| | |||
Income tax receivable |
| |
| | |||
Prepaid expenses and other current assets |
| |
| | |||
Total current assets |
| |
| | |||
Property and equipment, net |
| |
| | |||
Equity method investment |
| |
| | |||
Deferred tax assets |
| |
| | |||
Operating lease right-of-use assets | | | |||||
Goodwill |
| |
| | |||
Intangible assets, net |
| |
| | |||
Other assets | | | |||||
Total assets | $ | | $ | | |||
Liabilities and Stockholders’ Equity |
|
|
|
| |||
Current liabilities: |
|
|
|
| |||
Accounts payable | $ | | $ | | |||
Accounts payable – related party |
| |
| | |||
Current maturities of long-term debt |
| |
| | |||
Current operating lease liabilities | | | |||||
Accrued expenses and other current liabilities |
| |
| | |||
Total current liabilities |
| |
| | |||
Long-term debt, net of discount, debt issuance costs, and current portion |
| |
| | |||
Deferred income tax liabilities, net |
| |
| | |||
Non-current operating lease liabilities | | | |||||
Other long-term liabilities |
| |
| | |||
Total liabilities | $ | | $ | | |||
Commitments and contingencies |
|
|
|
| |||
Stockholders’ equity: |
|
|
|
| |||
Preferred stock, $ | | | |||||
Common stock, $ |
| |
| | |||
Additional paid-in capital |
| |
| | |||
Accumulated deficit |
| ( |
| ( | |||
Accumulated other comprehensive loss |
| ( |
| ( | |||
Total stockholders’ equity |
| |
| | |||
Total liabilities and stockholders’ equity | $ | | $ | | |||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
Latham Group, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
Fiscal Quarter Ended | Three Fiscal Quarters Ended | |||||||||||
| September 28, 2024 |
| September 30, 2023 |
| September 28, 2024 |
| September 30, 2023 | |||||
Net sales | $ | | $ | | $ | | $ | | ||||
Cost of sales |
| |
| |
| |
| | ||||
Gross profit |
| |
| |
| |
| | ||||
Selling, general, and administrative expense |
| |
| |
| |
| | ||||
Amortization |
| |
| |
| |
| | ||||
Income from operations |
| |
| |
| |
| | ||||
Other expense: |
|
|
|
|
|
|
|
| ||||
Interest expense, net |
| |
| |
| |
| | ||||
Other (income) expense, net |
| ( |
| |
| |
| | ||||
Total other expense, net |
| |
| |
| |
| | ||||
Earnings from equity method investment | | | | | ||||||||
Income before income taxes |
| |
| |
| |
| | ||||
Income tax (benefit) expense |
| ( |
| |
| |
| | ||||
Net income (loss) | $ | | $ | | $ | | $ | ( | ||||
Net income (loss) per share attributable to common stockholders: |
|
|
|
|
|
|
|
| ||||
Basic | $ | | $ | | $ | | $ | ( | ||||
Diluted | $ | | $ | | $ | | $ | ( | ||||
Weighted-average common shares outstanding – basic and diluted |
|
|
|
|
|
|
|
| ||||
Basic |
| |
| |
| |
| | ||||
Diluted |
| |
| |
| |
| | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
Latham Group, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
(unaudited)
Fiscal Quarter Ended | Three Fiscal Quarters Ended | |||||||||||
| September 28, 2024 |
| September 30, 2023 |
| September 28, 2024 |
| September 30, 2023 | |||||
Net income (loss) | $ | | $ | | $ | | $ | ( | ||||
Other comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
| ||||
Foreign currency translation adjustments |
| |
| ( |
| |
| ( | ||||
Total other comprehensive income (loss), net of tax |
| |
| ( |
| |
| ( | ||||
Comprehensive income (loss) | $ | | $ | | $ | | $ | ( | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
Latham Group, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(in thousands, except share amounts)
(unaudited)
|
|
|
|
| Accumulated |
| |||||||||||
Additional | Other | Total | |||||||||||||||
Paid-in | Accumulated | Comprehensive | Stockholders' | ||||||||||||||
Shares | Amount | Capital | Deficit | Loss | Equity | ||||||||||||
Balances at December 31, 2022 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
Net loss |
| — |
| — |
| — |
| ( |
| — |
| ( | |||||
Foreign currency translation adjustments |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||
Issuance of common stock upon release of restricted stock units | | — | — | — | — | — | |||||||||||
Stock-based compensation expense |
| — |
| — |
| |
| — |
| — |
| | |||||
Balances at April 1, 2023 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
Net income |
| — |
| — |
| — |
| |
| — |
| | |||||
Foreign currency translation adjustments |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||
Repurchase and retirement of common stock under repurchase program |
| ( |
| — |
| — |
| — |
| — |
| — | |||||
Issuance of common stock upon release of restricted stock units | | — | — | — | — | — | |||||||||||
Stock-based compensation expense | — | — | | — | — | | |||||||||||
Balances at July 1, 2023 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
Net income |
| — |
| — |
| — |
| |
| — |
| | |||||
Foreign currency translation adjustments |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||
Retirement of restricted stock | ( | — | — | — | — | — | |||||||||||
Issuance of common stock | | — | — | — | — | — | |||||||||||
Stock-based compensation expense | — | — | | — | — | | |||||||||||
Balances at September 30, 2023 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
Latham Group, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(in thousands, except share amounts)
(unaudited)
|
|
|
|
| Accumulated |
| |||||||||||
Additional | Other | Total | |||||||||||||||
Paid-in | Accumulated | Comprehensive | Stockholders' | ||||||||||||||
Shares | Amount | Capital | Deficit | Loss | Equity | ||||||||||||
Balances at December 31, 2023 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
Net loss |
| — |
| — |
| — |
| ( |
| — |
| ( | |||||
Foreign currency translation adjustments |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||
Issuance of common stock upon release of restricted stock units | | — | — | — | — | — | |||||||||||
Stock-based compensation expense |
| — |
| — |
| |
| — |
| — |
| | |||||
Balances at March 30, 2024 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
Net income |
| — |
| — |
| — |
| |
| — |
| | |||||
Foreign currency translation adjustments |
| — |
| — |
| — |
| — |
| |
| | |||||
Issuance of common stock upon release of restricted stock units | | | — | — | — | | |||||||||||
Stock-based compensation expense | — | — | | — | — | | |||||||||||
Balances at June 29, 2024 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
Net income |
| — |
| — |
| — |
| |
| — |
| | |||||
Foreign currency translation adjustments |
| — |
| — |
| — |
| — |
| |
| | |||||
Issuance of common stock upon release of restricted stock units | | — | — | — | — | — | |||||||||||
Stock-based compensation expense | — | — | | — | — | | |||||||||||
Balances at September 28, 2024 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8
Latham Group, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Fiscal Quarters Ended | |||||||
September 28, | September 30, | ||||||
2024 |
| 2023 | |||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | | $ | ( | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
| |||
Depreciation and amortization |
| |
| | |||
Amortization of deferred financing costs and debt discount |
| |
| | |||
Non-cash lease expense |
| |
| | |||
Change in fair value of interest rate swaps |
| |
| | |||
Stock-based compensation expense |
| |
| | |||
Bad debt expense | | | |||||
Other non-cash, net | | | |||||
Earnings from equity method investment | ( | ( | |||||
Distributions received from equity method investment | | | |||||
Changes in operating assets and liabilities: |
|
|
|
| |||
Trade receivables |
| ( |
| ( | |||
Inventories |
| |
| | |||
Prepaid expenses and other current assets |
| ( |
| ( | |||
Income tax receivable |
| ( |
| ( | |||
Other assets | | ( | |||||
Accounts payable |
| |
| | |||
Accrued expenses and other current liabilities |
| |
| ( | |||
Other long-term liabilities |
| ( |
| | |||
Net cash provided by operating activities |
| |
| | |||
Cash flows from investing activities: |
|
|
|
| |||
Purchases of property and equipment |
| ( |
| ( | |||
Acquisition of business, net of cash acquired |
| ( |
| | |||
Net cash used in investing activities |
| ( |
| ( | |||
Cash flows from financing activities: |
|
|
|
| |||
Payments on long-term debt borrowings |
| ( |
| ( | |||
Proceeds from borrowings on revolving credit facility | | | |||||
Payments on revolving credit facilities | | ( | |||||
Repayments of finance lease obligations | ( | ( | |||||
Net cash used in financing activities |
| ( |
| ( | |||
Effect of exchange rate changes on cash |
| |
| ( | |||
Net (decrease) increase in cash |
| ( |
| | |||
Cash at beginning of period |
| |
| | |||
Cash at end of period | $ | | $ | | |||
Supplemental cash flow information: |
|
|
|
| |||
Cash paid for interest | $ | | $ | | |||
Income taxes paid, net | | | |||||
Supplemental disclosure of non-cash investing and financing activities: |
|
|
| ||||
Purchases of property and equipment included in accounts payable and accrued expenses | $ | | $ | | |||
Right-of-use operating and finance lease assets obtained in exchange for lease liabilities | | | |||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
9
Notes to Condensed Consolidated Financial Statements
1. NATURE OF THE BUSINESS
Latham Group, Inc. (the “Company”) 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 in-ground swimming pools and related products, including pool liners and pool covers.
Stock Split, Initial Public Offering and Reorganization
On April 13, 2021, the Company’s certificate of incorporation was amended and restated. On April 13, 2021, the Company effected a
On April 27, 2021, the Company completed its initial public offering (the “IPO”), pursuant to which it issued and sold
Prior to the closing of the Company’s IPO, the Company’s parent entity, Latham Investment Holdings, L.P., merged with and into Latham Group, Inc.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements and accompanying 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, 2023 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 28, 2024 and for the fiscal quarter and three fiscal quarters ended September 28, 2024 and September 30, 2023, 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, 2023 included in the Company’s 2023 Annual Report on Form 10-K, filed with the SEC on March 13, 2024 (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 28, 2024 are not necessarily indicative of the results of operations that may be expected for the fiscal year ending December 31, 2024 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 relevant factors that it believes to be reasonable under the circumstances. Estimates are evaluated on an ongoing basis and
10
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 fiscal year, its business is seasonal and weather is one of the principal external factors affecting the business. Historically, net sales and net income are highest (or net loss is lowest) during the second and third fiscal 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, as updated below.
Recently Issued Accounting Pronouncements
The Company qualifies as “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected to “opt in” to the extended transition 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. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which improves financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful analysis. For all entities, ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. 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 2023-07 and its potential impact on the notes to the condensed consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), in an effort to enhance the transparency and decision usefulness of income tax disclosures. For all entities, ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The amendments should be applied prospectively with retrospective application permitted. Early adoption is also permitted. The Company is currently evaluating ASU 2023-09 and its potential impact on the notes to the condensed consolidated financial statements.
In March 2024, the FASB issued ASU 2024-01, Compensation – Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards (“ASU 2024-01”), which improves financial reporting by providing clarity on when an entity should apply the scope guidance in paragraph 718-10-15-3. ASU 2024-01 is effective for public business entities for fiscal years beginning after December 15, 2024. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2025. 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 2024-01 and its potential impact on the condensed consolidated financial statements.
11
3. ACQUISITIONS
Coverstar Central, LLC
On August 2, 2024 (the “Acquisition Date”), Latham Pool Products acquired Coverstar Central, LLC (“Coverstar Central”) for total consideration of $
The Company accounted for the Coverstar Central Acquisition using the acquisition method of accounting in accordance with FASB ASC 805, Business Combinations (“ASC 805”). This requires that the assets acquired and liabilities assumed be measured at fair value. Inventories were valued using the comparative sales method. Specific to intangible assets, backlog and customer relationships were valued using the multi-period excess earnings method. The Company recorded the assets acquired and liabilities assumed at their respective fair values as of the Acquisition Date. The fair value of assets acquired and liabilities assumed recorded in the condensed consolidated financial statements may be subject to adjustment pending completion of final evaluation. These fair value estimates will be reevaluated and adjusted, if needed, during the measurement period of up to one year from the Acquisition Date, and recorded as adjustments to goodwill.
The following summarizes the preliminary allocation for the Company’s acquisition of Coverstar Central as of September 28, 2024:
(in thousands) |
| August 2, 2024 | |
Total consideration | $ | | |
Allocation: |
|
| |
Cash |
| | |
Trade receivables |
| | |
Inventories |
| | |
Prepaid expenses and other current assets |
| | |
Property and equipment |
| | |
Intangible assets |
| | |
Deferred tax assets |
| | |
Total assets acquired, excluding goodwill |
| | |
Accounts payable |
| | |
Accrued expenses and other current liabilities |
| | |
Total liabilities assumed |
| | |
Total fair value of net assets acquired, excluding goodwill |
| | |
Goodwill | $ | | |
The excess of the total consideration over the fair value of the identifiable assets acquired and the liabilities assumed in the acquisition was allocated to goodwill in the amount of $
12
The Company allocated a portion of the total consideration to specific intangible asset categories as follows:
Fair Value | Amortization | ||||
Definite-lived intangible assets: |
| (in thousands) |
| Period (in years) | |
Dealer relationships | $ | |
| ||
Order backlog |
| |
| ||
The following are the incremental net sales and incremental net loss from Coverstar Central included in the Company’s results from the Acquisition Date through September 28, 2024:
(in thousands) |
| Amount | |
Net sales | $ | | |
Net loss | $ | ( | |
Pro Forma Financial Information (Unaudited)
The following pro forma financial information presents the statements of operations of the Company with Coverstar Central as if the acquisition occurred on January 1, 2023. The pro forma results do not include any anticipated synergies, cost savings or other expected benefits of the acquisition. The pro forma financial information is not necessarily indicative of what the financial results would have been had the acquisition been completed on January 1, 2023 and is not necessarily indicative of the Company’s future financial results.
Three Fiscal Quarters Ended | |||||||
September 28, | September 30, | ||||||
(in thousands) |
|
| 2024 |
| 2023 | ||
Net sales | $ | | $ | | |||
Net income | $ | | $ | | |||
The pro forma financial information presented above reflects the effects as a result of the acquisition, including the amortization expense from acquired intangible assets, the additional cost of sales from acquired inventory, the elimination of intercompany transactions and the removal of certain costs (primarily payroll costs) that would not have occurred and any related tax effects. Transaction costs for Coverstar Central are reflected within pro forma net income for the three fiscal quarters ended September 30, 2023.
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.
13
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 three fiscal quarters ended September 28, 2024 or September 30, 2023.
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 loan
The Company’s Term Loan (as defined below; see Note 7) is carried at amortized cost; however, the Company estimates the fair value of the Term Loan for disclosure purposes. The fair value of the 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 its Term Loan (in thousands):
September 28, 2024 | December 31, 2023 | ||||||||||||
Carrying | Estimated | Carrying | Estimated | ||||||||||
| Value |
| Fair Value |
| Value |
| Fair Value | ||||||
Term Loan | $ | | $ | | $ | | $ | | |||||
Interest rate swap
The Company estimates the fair value of interest rate swaps (see Note 7) on a fiscal 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 28, 2024 and December 31, 2023, the fair value of the Company’s interest rate swap was a liability of $
5. GOODWILL AND INTANGIBLE ASSETS, NET
Goodwill
The carrying amount of goodwill as of September 28, 2024 and as of December 31, 2023 was $
14
Intangible Assets
Intangible assets, net as of September 28, 2024 consisted of the following (in thousands):
September 28, 2024 | ||||||||||||
Gross | Foreign | |||||||||||
Carrying | Currency | Accumulated | Net | |||||||||
| Amount |
| Translation |
| Amortization |
| Amount | |||||
Trade names and trademarks | $ | | $ | | $ | | $ | | ||||
Patented technology |
| |
| |
| |
| | ||||
Technology | | | | | ||||||||
Pool designs |
| |
| |
| |
| | ||||
Franchise relationships |
| |
| |
| |
| | ||||
Dealer relationships |
| |
| |
| |
| | ||||
Order backlog | | | | | ||||||||
Non-competition agreements |
| |
| |
| |
| | ||||
$ | | $ | | $ | | $ | | |||||
The Company recognized $
Intangible assets, net as of December 31, 2023 consisted of the following (in thousands):