Latham Group (SWIM) risk factors, FY2025 10-K

Risks Related to Our Operations and Industry

1. 01Global political uncertainty and financial market volatility caused by political instability, changes in international trade relationships and conflicts could make it more difficult for us to access financing and could adversely affect our business and operationsNew
2. 02Political uncertainty, an increase in trade protectionism or geopolitical conflict could have a material adverse effect on global macroeconomic activities and trade and adversely affect our business, results of operations and financial conditionNew
3. 03Inflation could adversely impact our financial condition and results of operations
4. 04Changes in trade policies, including the imposition of or increase in tariffs, could negatively impact our business, financial condition, and results of operations
5. 05Catastrophic events, including earthquakes, wildfires, floods, war, terrorism, public health emergencies, or other such events could adversely affect our business. financial condition and results of operationsNew
6. 06Adverse weather conditions could negatively impact our sales, as well as result in significant variability of sales in reporting periods22% rewritten
7. 07An interruption of our production capability at one or more of our manufacturing facilities from accident, calamity or other causes, or events affecting the global economy, could adversely affect our business and results of operations72% rewritten
8. 08Net sales of our swimming pools and related products are adversely affected by unfavorable economic conditions and the related impact on consumer spending, which are driven by factors outside of our control
9. 09Our ability to keep pace with rapidly evolving technological developments and standards, such as generative artificial intelligence, could impact our future growth and increase our costs and liability risk
10. 10Declining home ownership rates could lead to reduced demand for our products and adversely affect our business, financial condition and results of operations
11. 11The nature of our business subjects us to compliance with employment, environmental, health, transportation, safety, anti-corruption, trade, and other governmental regulations57% rewritten
12. 12Delays in, or systems disruptions issues caused by, the implementation of our new enterprise resource planning system could adversely affect our operations and results of operations
13. 13We depend on a global network of third-party suppliers to provide components and raw materials essential to the manufacturing of our pools and price increases or deviations in the quantity or quality of the raw materials used to manufacture our products could adversely affect our net sales and operating results
14. 14We face competition both from within our industry and from other outdoor living products and if we are not able to compete effectively, our prospects for future success will be jeopardized72% rewritten
15. 15We depend on our ability to attract, develop, and retain highly qualified personnel
16. 16Our ability to collect accounts receivables from our customers may adversely impact our cash flows and our ability to reduce our debt
17. 17Industry consolidation, including among our network of dealers and distributors could lead to downward pressure on the price of our products or the loss of our largest customers, which could adversely affect our business, financial condition, and results of operations
18. 18We depend on third parties for transportation services to some extent, and the lack of availability of and/or increases in the cost of transportation could have a material adverse effect on our business and results of operations
19. 19Our business operations could suffer if we fail to protect adequately our intellectual property rights, and we may experience claims by third parties that we are violating their intellectual property rights
20. 20Moreover, since our patents, trademarks and service marks are primarily registered in the United States and Canada, we may not be successful in asserting patent or trademark protection in other countries
21. 21We conduct business internationally, which exposes us to additional risks
22. 22We process, store, and use personal information and other data, which subjects us to governmental regulation and other legal obligations related to privacy, and violation of these privacy obligations could result in a claim for damages, regulatory action, loss of business, or unfavorable publicity
23. 23Our insurance coverage may be inadequate to protect against the potential hazards inherent to our business
24. 24If our goodwill, other intangible assets or fixed assets become impaired, we may be required to record a significant charge to earnings

Risks Related to Our Indebtedness

1. 25Our substantial indebtedness could adversely affect our financial condition
2. 26We may be unable to generate sufficient cash flow to satisfy our significant debt service obligations, which would adversely affect our financial condition and results of operations
3. 27Our Credit Agreement has restrictive terms and our failure to comply with any of these terms could put us in default, which would have an adverse effect on our business and prospects
4. 28Our indebtedness is variable rate, subjecting us to interest rate risk, which could cause our indebtedness service obligations to increase significantly

Risks Related to Ownership of Our Common Stock

1. 29Our stock price has been volatile, and you may not be able to resell our common stock at or above the price you paid
2. 30Our Principal Stockholders continue to have significant influence over us, including control over decisions that require the approval of stockholders, which could limit your ability to influence the outcome of matters submitted to stockholders for a vote28% rewritten
3. 31Our organizational documents and Delaware law may impede or discourage a takeover, which could deprive our investors of the opportunity to receive a premium on their shares
4. 32Our certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities
5. 33We do not anticipate paying quarterly cash dividends, and accordingly, stockholders must rely on stock appreciation for any return on their investment