Latham Group, Inc.SWIM

Latham Group, Inc. Segments Disclosure

10-KFiled Mar 4, 20262 min read
SEGMENT REPORTING
The Company conducts business as one 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 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):
Year Ended December 31,
202520242023
Net sales$545,912 $508,520 $566,492 
Other cost of sales(1)
346,540 339,078 398,293 
Other selling, general and administrative expense(2)
104,078 93,138 86,385 
Depreciation21,560 16,494 13,817 
Amortization(3)
29,794 27,952 26,934 
Stock-based compensation expense9,247 7,392 18,804 
Strategic initiative costs(4)
2,806 3,329 4,092 
Acquisition and integration related costs(5)
785 2,348 911 
Restructuring charges(6)
523 512 3,727 
Interest expense, net25,805 24,840 30,916 
Odessa fire(7)
— — (2,600)
Other (income) expense, net(3,492)6,237 (1,004)
Earnings from equity method investment(5,222)(4,060)(3,723)
Income tax expense (benefit)2,364 9,120 (7,672)
Net income (loss)$11,124 $(17,860)$(2,388)
(1)Other cost of sales includes total cost of sales (as presented in the 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 statements of operations) excluding depreciation, amortization, stock-based compensation, strategic initiative costs, acquisition and integration related costs, and Odessa fire 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 as well as other costs related to potential transactions.
(6)Represents costs related to a cost reduction plan that includes severance and other costs for our executive management changes and additional costs related to our cost reduction plans, which include further actions to reduce our manufacturing overhead by reducing headcount in addition to facility shutdowns.
(7)Represents costs incurred and insurance recoveries related to a production facility fire in Odessa, Texas.
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Historical Timeline

Fiscal YearFiled
2025Mar 4, 2026Showing above
2024Mar 5, 2025
2023Mar 13, 2024

About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

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