QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Large accelerated filer | ☐ | Accelerated filer | ☐ | ||||||||
☒ | Smaller reporting company | ||||||||||
Emerging growth company |
Page | ||||||||||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |||||||||||||
April 3, 2021 | December 31, 2020 | |||||||||||||
Assets | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Accounts receivable, net of allowances of $ | ||||||||||||||
Inventories, net | ||||||||||||||
Prepaid expenses | ||||||||||||||
Other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Property, plant, and equipment, net of accumulated depreciation of $ | ||||||||||||||
Goodwill | ||||||||||||||
Trademark | ||||||||||||||
Customer relationships, net | ||||||||||||||
Other intangibles, net | ||||||||||||||
Other non-current assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities, Redeemable Stock, and Stockholders' Equity | ||||||||||||||
Current liabilities | ||||||||||||||
Current portion of the long-term debt | $ | $ | ||||||||||||
Accounts payable | ||||||||||||||
Accrued expenses and other liabilities | ||||||||||||||
Income taxes payable | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt, net | ||||||||||||||
Deferred tax liabilities, net | ||||||||||||||
Other non-current liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies (Note 12) | ||||||||||||||
Redeemable stock | ||||||||||||||
Class A stock $ | ||||||||||||||
Class C stock $ | ||||||||||||||
Stockholders' equity | ||||||||||||||
Common stock $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Common stock in treasury; | ( | ( | ||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive income (loss) | ( | |||||||||||||
Total stockholders' equity | ||||||||||||||
Total liabilities, redeemable stock, and stockholders' equity | $ | $ |
Three Months Ended | ||||||||||||||
April 3, 2021 | March 28, 2020 | |||||||||||||
Net sales | $ | $ | ||||||||||||
Cost of sales | ||||||||||||||
Gross profit | ||||||||||||||
Selling, general, and administrative expenses | ||||||||||||||
Research, development, and engineering | ||||||||||||||
Acquisition and restructuring related expense | ||||||||||||||
Amortization of intangible assets | ||||||||||||||
Operating income | ||||||||||||||
Interest expense, net | ||||||||||||||
Loss on extinguishment of debt | ||||||||||||||
Other expense, net | ||||||||||||||
Total other expense | ||||||||||||||
Income (loss) from operations before income taxes | ( | |||||||||||||
Provision (benefit) for income taxes | ( | |||||||||||||
Net income (loss) | $ | $ | ( | |||||||||||
Comprehensive income, net of tax | ||||||||||||||
Net income (loss) | $ | $ | ( | |||||||||||
Foreign currency translation adjustments, net of tax expense of $ | ( | |||||||||||||
Change in fair value of derivatives, net of tax expense of $ | ( | |||||||||||||
Comprehensive income (loss) | $ | $ | ( | |||||||||||
Income (loss) per common share | ||||||||||||||
Basic | $ | ( | $ | ( | ||||||||||
Diluted | $ | ( | $ | ( | ||||||||||
Weighted average common shares outstanding | ||||||||||||||
Basic | ||||||||||||||
Diluted |
Redeemable Class A and C Stock | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2021 | $ | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion to common stock upon IPO | ( | ( | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Class A stock | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of stock | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income items | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at April 3, 2021 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Class A and C Stock | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2020 | $ | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | $ | — | — | — | $ | — | $ | — | $ | ( | $ | — | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of Class A stock | — | $ | — | — | — | $ | $ | — | $ | — | $ | — | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Cash distributions | — | $ | — | — | — | $ | — | $ | — | $ | ( | $ | — | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | $ | — | — | — | $ | $ | — | $ | — | $ | — | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | ( | $ | — | — | — | $ | $ | — | $ | — | $ | — | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of stock | — | $ | — | — | — | $ | — | $ | ( | $ | — | $ | — | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||
Comprehensive loss items | — | $ | — | — | — | $ | — | $ | — | $ | — | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at March 28, 2020 | $ | $ | $ | $ | ( | $ | $ | ( | $ |
Three Months Ended | ||||||||||||||
April 3, 2021 | March 28, 2020 | |||||||||||||
Cash flows from operating activities | ||||||||||||||
Net income (loss) | $ | $ | ( | |||||||||||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities | ||||||||||||||
Depreciation | ||||||||||||||
Amortization of intangible assets | ||||||||||||||
Amortization of deferred debt issuance costs | ||||||||||||||
Stock-based compensation | ||||||||||||||
Deferred income taxes | ( | |||||||||||||
Increase (decrease) in allowance for bad debts | ( | |||||||||||||
Loss on debt extinguishment | ||||||||||||||
Net change in assets and liabilities | ||||||||||||||
Accounts receivable | ( | ( | ||||||||||||
Inventories | ( | ( | ||||||||||||
Other current and non-current assets | ( | |||||||||||||
Accounts payable and accrued expenses and other liabilities | ||||||||||||||
Net cash (used in) provided by operating activities | ( | ( | ||||||||||||
Cash flows from investing activities | ||||||||||||||
Purchases of property, plant, and equipment | ( | ( | ||||||||||||
Purchases of intangibles | ( | ( | ||||||||||||
Proceeds from settlements of investment currency hedge | ||||||||||||||
Net cash (used in) provided by investing activities | ( | ( | ||||||||||||
Cash flows from financing activities | ||||||||||||||
Proceeds from issuance of common stock from IPO | ||||||||||||||
IPO stock issuance costs | ( | |||||||||||||
Proceeds from issuance of Class A common stock | ||||||||||||||
Payments of long-term debt | ( | ( | ||||||||||||
Net change in revolving credit facility | ||||||||||||||
Payments of capital leases | ( | |||||||||||||
Purchase of common stock for treasury | ( | ( | ||||||||||||
Net cash (used in) provided by financing activities | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ( | ||||||||||||
Change in cash and cash equivalents and restricted cash | ( | |||||||||||||
Cash and cash equivalents and restricted cash, beginning of period | ||||||||||||||
Cash and cash equivalents and restricted cash, end of period | $ | $ | ||||||||||||
Supplemental disclosures of cash flow information | ||||||||||||||
Cash paid-interest | $ | $ | ||||||||||||
Cash paid-income taxes | $ | $ |
April 3, 2021 | December 31, 2020 | |||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Restricted cash (a) | ||||||||||||||
Total | $ | $ |
Three Months Ended | ||||||||||||||
April 3, 2021 | March 28, 2020 | |||||||||||||
Product groups | ||||||||||||||
Residential pool | $ | $ | ||||||||||||
Commercial pool | ||||||||||||||
Industrial flow control | ||||||||||||||
Total | $ | $ | ||||||||||||
Geographic | ||||||||||||||
United States | $ | $ | ||||||||||||
Canada | ||||||||||||||
Europe | ||||||||||||||
Rest of World | ||||||||||||||
Total international revenue | ||||||||||||||
Total | $ | $ |
April 3, 2021 | December 31, 2020 | |||||||||||||
Raw materials | $ | $ | ||||||||||||
Work in progress | ||||||||||||||
Finished goods | ||||||||||||||
Total | $ | $ |
April 3, 2021 | December 31, 2020 | |||||||||||||
Selling, promotional and advertising | $ | $ | ||||||||||||
Employee compensation and benefits | ||||||||||||||
Warranty reserve | ||||||||||||||
Inventory purchases | ||||||||||||||
Insurance reserve | ||||||||||||||
Deferred income | ||||||||||||||
Restructuring reserves | ||||||||||||||
Derivative liability | ||||||||||||||
Professional fees | ||||||||||||||
Payroll taxes | ||||||||||||||
Other accrued liabilities | ||||||||||||||
Total | $ | $ |
Balance at December 31, 2020 | $ | |||||||
Accrual for warranties issued during the period and year ended | ||||||||
Payments | ( | |||||||
Balance at April 3, 2021 | $ |
April 3, 2021 | December 31, 2020 | |||||||||||||
First Lien Term Facility, due August 4, 2024 | $ | $ | ||||||||||||
Incremental First Lien Term Facility, due August 4, 2026 | ||||||||||||||
Second Lien Term Facility | ||||||||||||||
ABL Revolving Credit Facility | ||||||||||||||
Capital lease obligations | ||||||||||||||
Subtotal | ||||||||||||||
Less: Current portion of the long-term debt | ( | ( | ||||||||||||
Less: Unamortized debt issuance costs | ( | ( | ||||||||||||
Total | $ | $ |
April 3, 2021 | December 31, 2020 | |||||||||||||||||||||||||
Other Current Assets | Accrued Expenses and Other Liabilities | Other Current Assets | Accrued Expenses and Other Liabilities | |||||||||||||||||||||||
Interest rate swaps | $ | $ | $ | $ | ||||||||||||||||||||||
Net investment hedge | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Unrealized Gain (Loss) Recognized in AOCI | Gain (Loss) Reclassified From AOCI to Earnings | Location of Gain (loss) Reclassified from AOCI into Earnings | ||||||||||||||||||||||||||||||
April 3, 2021 | March 28, 2020 | April 3, 2021 | March 28, 2020 | |||||||||||||||||||||||||||||
Interest rate swaps | $ | $ | ( | $ | $ | Interest Expense | ||||||||||||||||||||||||||
Net investment hedge | N/A | |||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ |
Three Months Ended April 3, 2021 | Three Months Ended March 28, 2020 | |||||||||||||||||||||||||||||||||||||
North America | Europe & Rest of World | Total | North America | Europe & Rest of World | Total | |||||||||||||||||||||||||||||||||
Net sales | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Gross profit | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Segment income | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Capital expenditures | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Depreciation | $ | $ | $ | $ | $ | $ |
Three Months Ended | ||||||||||||||
April 3, 2021 | March 28, 2020 | |||||||||||||
Total segment income | $ | $ | ||||||||||||
Corporate expense, net | ||||||||||||||
Acquisition and restructuring related expense | ||||||||||||||
Amortization of intangible assets | ||||||||||||||
Operating income | ||||||||||||||
Interest expense, net | ||||||||||||||
Loss on extinguishment of debt | ||||||||||||||
Other expense, net | ||||||||||||||
Total other expense | ||||||||||||||
Income (loss) from operations before income taxes | $ | $ | ( |
Three months ended | |||||||||||
April 3, 2021 | March 28, 2020 | ||||||||||
Net income (loss) | $ | $ | ( | ||||||||
Deemed Dividend - Class A stock redemption (a) | ( | ||||||||||
Dividends paid to Class C stockholders | ( | ( | |||||||||
Net income (loss) attributable to common stockholders, basic | ( | ( | |||||||||
Dilutive net income (loss) adjustments | |||||||||||
Net income (loss) attributable to common stockholders, diluted | $ | ( | $ | ( | |||||||
Weighted average number of common shares outstanding, basic | |||||||||||
Earnings per share attributable to common stockholders, basic | $ | ( | $ | ( | |||||||
Earnings per share attributable to common shareholders, diluted | $ | ( | $ | ( | |||||||
Excluded potential common shares (b) | |||||||||||
(a) represents the beneficial conversion feature related to the redemption of Class A shares for common shares as a consequence of the IPO | |||||||||||
(b) excluded from the computation of diluted EPS as the inclusion of such shares would have been anti-dilutive |
Intrinsic value in millions | Number of Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Life (years) | Aggregate Intrinsic Value | ||||||||||||||||||||||
Outstanding as of January 1, 2021 | $ | — | $ | |||||||||||||||||||||||
Granted | $ | — | $ | |||||||||||||||||||||||
Exercised | $ | — | $ | |||||||||||||||||||||||
Forfeited | $ | — | $ | |||||||||||||||||||||||
Outstanding as of April 3, 2021 | $ | $ | ||||||||||||||||||||||||
Options exercisable as of April 3, 2021 | $ | — | $ | |||||||||||||||||||||||
Options expected to vest as of April 3, 2021 | $ | $ |
April 3, 2021 | |||||
The weighted average grant date fair value of options granted in 2021 was | $ | ||||
At April 3, 2021, the total unrecognized compensation cost (in millions) related to stock options was | $ | ||||
Total compensation expense (in millions) recognized for the three months ended April 3, 2021 was | $ | ||||
This unrecognized compensation cost is expected to be recognized over a weighted average period of | |||||
The closing price of our common stock on April 3, 2021 was | $ | ||||
April 3, 2021 | ||||||||
Risk-free interest rate | % | |||||||
Expected life | ||||||||
Expected dividend yield | % | |||||||
Expected volatility | % |
Number of Shares | Weighted Average Grant Date Fair Value | |||||||||||||
Outstanding as of January 1, 2021 | ||||||||||||||
Granted | $ | |||||||||||||
Redeemed | ||||||||||||||
Outstanding as of April 3, 2021 | $ | |||||||||||||
April 3, 2021 | |||||
Total compensation expense (in millions) recognized for the three months ended April 3, 2021 was | $ | ||||
Number of years that expense related to these restricted stock unit will be recognized | |||||
As of April 3, 2021, the total unrecognized compensation cost (in millions) related to these Restricted Stock Units was | $ |
Intrinsic value in millions | Number of Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Life (years) | Aggregate Intrinsic Value | ||||||||||||||||||||||
Outstanding as of January 1, 2021 | $ | $ | ||||||||||||||||||||||||
Granted | $ | |||||||||||||||||||||||||
Exercised | ( | — | ||||||||||||||||||||||||
Forfeited | ( | $ | — | |||||||||||||||||||||||
Outstanding as April 3, 2021 | $ | $ | ||||||||||||||||||||||||
Options exercisable as of April 3, 2021 | $ | |||||||||||||||||||||||||
Options expected to vest as of April 3, 2021 | $ |
Number of Shares | Weighted-Average Grant-Date Fair Value | |||||||||||||
Options granted during the three months ended April 3, 2021 | $ | |||||||||||||
Options vested during the three months ended April 3, 2021 | $ | |||||||||||||
Options forfeited during the three months ended April 3, 2021 | $ |
April 3, 2021 | March 28, 2020 | |||||||||||||
Risk-free interest rate | % | % | ||||||||||||
Expected life (years) | ||||||||||||||
Expected dividend yield | % | % | ||||||||||||
Expected volatility | % | % |
Intrinsic value in millions | Number of Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Life (years) | Aggregate Intrinsic Value | ||||||||||||||||||||||
Outstanding as of January 1, 2021 | $ | $ | ||||||||||||||||||||||||
Granted | $ | |||||||||||||||||||||||||
Forfeited | ( | $ | — | |||||||||||||||||||||||
Outstanding as of April 3, 2021 | $ | $ | ||||||||||||||||||||||||
Options exercisable as of April 3, 2021 | ||||||||||||||||||||||||||
Number of Shares | Weighted-Average Grant-Date Fair Value | |||||||||||||
Options granted during the three months ended April 3, 2021 | $ | |||||||||||||
Options forfeited during the three months ended April 3, 2021 | $ |
April 3, 2021 | March 28, 2020 | |||||||||||||
Risk-free interest rate | % | % | ||||||||||||
Expected life (years) | ||||||||||||||
Expected dividend yield | % | % | ||||||||||||
Expected volatility | % | % |
Restricted Class A Stock | Restricted Common | |||||||||||||||||||||||||
Grant date fair value in millions | Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||||||||||||||
Outstanding as of January 1, 2021 | $ | |||||||||||||||||||||||||
Modified | ||||||||||||||||||||||||||
Forfeited | ( | $ | ||||||||||||||||||||||||
Outstanding as of April 3, 2021 | $ | |||||||||||||||||||||||||
Restricted Class A Stock | Restricted Common | |||||||||||||||||||||||||
Grant date fair value in millions | Number of shares | Weighted average grant date fair value | Number of shares | Weighted average grant date fair value | ||||||||||||||||||||||
Outstanding as of January 1, 2021 | $ | $ | ||||||||||||||||||||||||
Granted | ||||||||||||||||||||||||||
Forfeited | ||||||||||||||||||||||||||
Vested | ( | $ | ( | $ | ||||||||||||||||||||||
Redeemed | ||||||||||||||||||||||||||
Outstanding as of April 3, 2021 | ||||||||||||||||||||||||||
2020 Activity | ||||||||||||||||||||||||||
Liability as of January 1, 2020 | Costs Recognized | Cash Payments | Liability as of March 28, 2020 | |||||||||||||||||||||||
One-time termination benefits | $ | $ | $ | ( | $ | |||||||||||||||||||||
Facility-related | ( | |||||||||||||||||||||||||
Other | ( | |||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
Three Months Ended | Increase (Decrease) | Percentage Change | ||||||||||||||||||||||||||||||
April 3, 2021 | March 28, 2020 | |||||||||||||||||||||||||||||||
Net sales | $ | 334.4 | $ | 170.2 | $ | 164.2 | 96.5 | % | ||||||||||||||||||||||||
Cost of sales | 174.5 | 94.6 | 79.9 | 84.5 | % | |||||||||||||||||||||||||||
Gross profit | 159.9 | 75.6 | 84.3 | 111.5 | % | |||||||||||||||||||||||||||
Selling, general, and administrative expenses | 66.5 | 43.3 | 23.2 | 53.6 | % | |||||||||||||||||||||||||||
Research, development, and engineering | 4.8 | 4.7 | 0.1 | 2.1 | % | |||||||||||||||||||||||||||
Acquisition and restructuring related expense | — | 5.5 | (5.5) | (100.0) | % | |||||||||||||||||||||||||||
Amortization of intangible assets | 8.8 | 9.5 | (0.7) | (7.4) | % | |||||||||||||||||||||||||||
Operating income | 79.8 | 12.6 | 67.2 | 533.3 | % | |||||||||||||||||||||||||||
Interest expense, net | 18.3 | 19.6 | (1.3) | (6.6) | % | |||||||||||||||||||||||||||
Loss on extinguishment of debt | 5.8 | — | 5.8 | — | % | |||||||||||||||||||||||||||
Other expense, net | 3.6 | 6.4 | (2.8) | (43.8) | % | |||||||||||||||||||||||||||
Total other expense | 27.7 | 26.0 | 1.7 | 6.5 | % | |||||||||||||||||||||||||||
Income (loss) from operations before income taxes | 52.1 | (13.4) | 65.5 | (488.8) | % | |||||||||||||||||||||||||||
Provision (benefit) for income taxes | 15.2 | (3.0) | 18.2 | (606.7) | % | |||||||||||||||||||||||||||
Net income (loss) | $ | 36.9 | $ | (10.4) | $ | 47.3 | 454.8 | % | ||||||||||||||||||||||||
Adjusted EBITDA (a) | $ | 107.3 | $ | 35.8 | $ | 71.5 | 199.7 | % |
Volume | 89.7 | % | ||||||
Price, net of discounts and allowances | 3.0 | % | ||||||
Currency and other | 3.8 | % | ||||||
Total | 96.5 | % |
Three Months Ended April 3, 2021 | Three Months Ended March 28, 2020 | |||||||||||||||||||||||||||||||||||||
Total Hayward | NAM | E&RW | Total Hayward | NAM | E&RW | |||||||||||||||||||||||||||||||||
Net sales | $ | 334.4 | $ | 271.5 | $ | 62.9 | $ | 170.2 | $ | 132.4 | $ | 37.8 | ||||||||||||||||||||||||||
Gross profit | $ | 159.9 | $ | 134.7 | $ | 25.2 | $ | 75.6 | $ | 61.1 | $ | 14.4 | ||||||||||||||||||||||||||
Gross profit margin % | 47.8 | % | 49.6 | % | 40.1 | % | 44.4 | % | 46.1 | % | 38.1 | % | ||||||||||||||||||||||||||
Segment income | $ | 100.7 | $ | 85.8 | $ | 14.9 | $ | 28.2 | $ | 22.6 | $ | 5.6 | ||||||||||||||||||||||||||
Segment income margin % | 30.1 | % | 31.6 | % | 23.7 | % | 16.6 | % | 17.1 | % | 14.8 | % | ||||||||||||||||||||||||||
Adjusted segment income (a) | $ | 111.6 | $ | 95.8 | $ | 15.8 | $ | 36.3 | $ | 29.9 | $ | 6.4 | ||||||||||||||||||||||||||
Adjusted segment income margin % (a) | 33.4 | % | 35.3 | % | 25.1 | % | 21.3 | % | 22.6 | % | 16.9 | % | ||||||||||||||||||||||||||
Expenses not allocated to segments | ||||||||||||||||||||||||||||||||||||||
Corporate expense, net | $ | 12.1 | $ | 0.6 | ||||||||||||||||||||||||||||||||||
Acquisition and restructuring related expense (income) | $ | — | $ | 5.5 | ||||||||||||||||||||||||||||||||||
Amortization of intangible assets | $ | 8.8 | $ | 9.5 | ||||||||||||||||||||||||||||||||||
Operating income | $ | 79.8 | $ | 12.6 |
Three Months Ended | Increase (Decrease) | Percentage / bps Change | ||||||||||||||||||||||||
April 3, 2021 | March 28, 2020 | |||||||||||||||||||||||||
Net sales | $ | 271.5 | $ | 132.4 | $ | 139.1 | 105.1 | % | ||||||||||||||||||
Gross profit | $ | 134.7 | $ | 61.1 | $ | 73.6 | 120.5 | % | ||||||||||||||||||
Gross profit margin % | 49.6 | % | 46.1 | % | 3.5 | % | 347 | |||||||||||||||||||
Segment income | $ | 85.8 | $ | 22.6 | $ | 63.2 | 279.6 | % | ||||||||||||||||||
Segment income margin % | 31.6 | % | 17.1 | % | 14.5 | % | 1,453 | |||||||||||||||||||
Adjusted segment income (a) | $ | 95.8 | $ | 29.9 | $ | 65.9 | 220.4 | % | ||||||||||||||||||
Adjusted segment income margin % (a) | 35.3 | % | 22.6 | % | 12.7 | % | 1,270 |
Volume | 100.7 | % | ||||||
Price, net of allowances and discounts | 3.1 | % | ||||||
Currency and other | 1.3 | % | ||||||
Total | 105.1 | % |
Three Months Ended | Increase (Decrease) | Percentage / bps Change | ||||||||||||||||||||||||
April 3, 2021 | March 28, 2020 | |||||||||||||||||||||||||
Net sales | $ | 62.9 | $ | 37.8 | $ | 25.1 | 66.4 | % | ||||||||||||||||||
Gross profit | $ | 25.2 | $ | 14.4 | $ | 10.8 | 75.0 | % | ||||||||||||||||||
Gross profit margin % | 40.1 | % | 38.1 | % | 2.0 | % | 197 | |||||||||||||||||||
Segment income | $ | 14.9 | $ | 5.6 | $ | 9.3 | 166.1 | % | ||||||||||||||||||
Segment income margin % | 23.7 | % | 14.8 | % | 8.9 | % | 887 | |||||||||||||||||||
Adjusted segment income (a) | $ | 15.8 | $ | 6.4 | $ | 9.4 | 146.9 | % | ||||||||||||||||||
Adjusted segment income margin % (a) | 25.1 | % | 16.9 | % | 8.2 | % | 819 |
Volume | 51.5 | % | ||||||
Price, net of allowances and discounts | 2.8 | % | ||||||
Currency and other | 12.1 | % | ||||||
Total | 66.4 | % |
Three Months Ended | Increase (Decrease) | Percentage Change | ||||||||||||||||||||||||||||||||||||
April 3, 2021 | March 28, 2020 | |||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | 36.9 | $ | (10.4) | $ | 47.3 | (454.8) | % | ||||||||||||||||||||||||||||||
Depreciation | 4.7 | 4.6 | 0.1 | 2.2 | % | |||||||||||||||||||||||||||||||||
Amortization | 10.4 | 10.9 | (0.5) | (4.6) | % | |||||||||||||||||||||||||||||||||
Interest expense | 18.3 | 19.6 | (1.3) | (6.6) | % | |||||||||||||||||||||||||||||||||
Income taxes | 15.2 | (3.0) | 18.2 | n/m | ||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | 5.8 | — | 5.8 | n/m | ||||||||||||||||||||||||||||||||||
EBITDA | 91.3 | 21.7 | 69.6 | 320.7 | % | |||||||||||||||||||||||||||||||||
Stock-based compensation (a) | 10.6 | 0.7 | 9.9 | n/m | ||||||||||||||||||||||||||||||||||
Sponsor management fees (b) | 0.1 | 0.2 | (0.1) | (50.0) | % | |||||||||||||||||||||||||||||||||
Currency exchange items (c) | 3.8 | 6.1 | (2.3) | (37.7) | % | |||||||||||||||||||||||||||||||||
Acquisition and restructuring related expense, net (d) | 0.4 | 7.0 | (6.6) | (94.3) | % | |||||||||||||||||||||||||||||||||
Other (e) | 1.1 | 0.1 | 1.0 | n/m | ||||||||||||||||||||||||||||||||||
Total Adjustments | $ | 16.0 | $ | 14.1 | $ | 1.9 | 13.5 | % | ||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 107.3 | $ | 35.8 | $ | 71.5 | 199.7 | % | ||||||||||||||||||||||||||||||
Adjusted EBITDA margin | 32.1 | % | 21.0 | % | ||||||||||||||||||||||||||||||||||
(a) | Represents non-cash stock-based compensation expense related to equity awards issued and includes $9.9 million related to the post IPO vesting of certain performance based stock options and restricted stock awards for the three months ended April 3, 2021. | |||||||
(b) | Represents discretionary fees paid to our Sponsors for management services rendered pursuant to a management agreement with the Company. These payments ceased as of the effective date of our initial public offering or March 12, 2021. | |||||||
(c) | Represents non-cash mark to market gains on foreign currency contracts. | |||||||
(d) | Adjustments in the three months ended March 28, 2020 primarily include $5.5 million of business restructuring related costs, $0.8 million of severance and retention costs, and $1.3 million of operating losses related to an early stage product business acquired in 2018 that is being phased out in 2021. Adjustments in the three months ended April 3, 2021 are mostly related to the same early stage product business previously mentioned. | |||||||
(e) | Includes expenses incurred in preparation for our initial public offering and transaction related bonuses for the three months ended April 3, 2021. |
Three Months Ended | ||||||||||||||
April 3, 2021 | March 28, 2020 | |||||||||||||
Segment income | $ | 100.7 | $ | 28.2 | ||||||||||
Depreciation | 4.7 | 4.4 | ||||||||||||
Amortization | 1.6 | 1.3 | ||||||||||||
Stock-based compensation | 4.2 | 0.5 | ||||||||||||
Currency exchange items | — | 0.4 | ||||||||||||
Acquisition and restructuring related expense, net (a) | 0.4 | 1.9 | ||||||||||||
Other (b) | — | (0.4) | ||||||||||||
Total Adjustments | 10.9 | 8.1 | ||||||||||||
Adjusted segment income | $ | 111.6 | $ | 36.3 | ||||||||||
Adjusted segment income margin | 33.4 | % | 21.3 | % |
(a) | Includes non-recurring severance expenses, and operating losses related to an early stage product business acquired in 2018 that is being phased out in 2021. Included are approximately $0.4 million and $1.3 million of operating losses for the three months ended April 3, 2021 and the three months ended March 28, 2020, respectively. | |||||||
(b) | Includes professional fees, additional health and safety expenses related to COVID-19, and other miscellaneous costs we believe are not representative of our ongoing business operations for the three months ended March 28, 2020. |
Three Months Ended | ||||||||||||||
April 3, 2021 | March 28, 2020 | |||||||||||||
Segment income | $ | 85.8 | $ | 22.6 | ||||||||||
Depreciation | 4.3 | 4.1 | ||||||||||||
Amortization | 1.6 | 1.3 | ||||||||||||
Stock-based compensation | 3.7 | 0.4 | ||||||||||||
Acquisition and restructuring related expense, net (a) | 0.4 | 1.9 | ||||||||||||
Other (b) | — | (0.4) | ||||||||||||
Total Adjustments | 10.0 | 7.3 | ||||||||||||
Adjusted segment income | $ | 95.8 | $ | 29.9 | ||||||||||
Adjusted segment income margin | 35.3 | % | 22.6 | % |
(a) | Includes non-recurring severance expenses, and operating losses related to an early stage product business acquired in 2018 that is being phased out in 2021. Included are approximately $0.4 million and $1.3 million of operating losses for the three months ended April 3, 2021 and the three months ended March 28, 2020, respectively. | |||||||
(b) | Includes professional fees, additional health and safety expenses related to COVID-19, and other miscellaneous costs we believe are not representative of our ongoing business operations for the three months ended March 28, 2020. |
Three Months Ended | ||||||||||||||
April 3, 2021 | March 28, 2020 | |||||||||||||
Segment income | $ | 14.9 | $ | 5.6 | ||||||||||
Depreciation | 0.4 | 0.3 | ||||||||||||
Stock-based compensation | 0.5 | 0.1 | ||||||||||||
Currency exchange items (a) | — | 0.4 | ||||||||||||
Total Adjustments | 0.9 | 0.8 | ||||||||||||
Adjusted segment income | $ | 15.8 | $ | 6.4 | ||||||||||
Adjusted segment income margin | 25.1 | % | 16.9 | % |
(a) | Represents currency exchange impact. |
April 3, 2021 | December 31, 2020 | |||||||||||||
First Lien Term Facility, due August 4, 2024 | $ | 820.0 | $ | 958.0 | ||||||||||
Incremental First Lien Term Facility, due August 4, 2026 | 128.4 | 150.0 | ||||||||||||
Second Lien Term Facility | — | 205.0 | ||||||||||||
ABL Revolving Credit Facility | 48.8 | — | ||||||||||||
Capital lease obligations | 9.5 | 9.7 | ||||||||||||
Subtotal | $ | 1,006.7 | $ | 1,322.7 | ||||||||||
Less: Current portion of the long-term debt | (2.1) | (2.8) | ||||||||||||
Less: Unamortized debt issuance costs | (12.8) | (19.6) | ||||||||||||
Total | $ | 991.8 | $ | 1,300.3 |
Three Months Ended | Increase (Decrease) | Percentage Change | ||||||||||||||||||||||||
April 3, 2021 | March 28, 2020 | |||||||||||||||||||||||||
Net cash (used in) operating activities | $ | (131.8) | $ | (97.8) | $ | (34.0) | 34.8 | % | ||||||||||||||||||
Net cash (used in) investing activities | (4.6) | (3.9) | (0.7) | 17.9 | % | |||||||||||||||||||||
Net cash provided by financing activities | 35.7 | 147.5 | (111.8) | (75.8) | % | |||||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (0.4) | (0.6) | 0.2 | (33.3) | % | |||||||||||||||||||||
Change in cash and cash equivalents | $ | (101.1) | $ | 45.2 | $ | (146.3) | (323.9) | % |
Exhibit No. | Description | ||||||||||||||||
Second Restated Certificate of Incorporation of Hayward Holdings, Inc. (previously filed as Exhibit 4.1 to the Registration Statement on Form S-1 (File No. 333-254348) and incorporated herein by reference). | |||||||||||||||||
Amended and Restated Bylaws of Hayward Holdings, Inc. (previously filed as Exhibit 4.2 to the Registration Statement on Form S-1 (File No. 333-254348) and incorporated herein by reference). | |||||||||||||||||
Stockholders’ Agreement, by and among Hayward Holdings, Inc., CCMP Capital Investors III, L.P., CCMP Capital Investors III (Employee), L.P., MSD Aqua Partners, LLC, PE16PX Rocky Mountain Ltd., PE16GV Rocky Mountain Ltd. and certain other stockholders. | |||||||||||||||||
Certification of Chief Executive Officer of Hayward Holdings, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||||||||||||
Certification of Chief Financial Officer of Hayward Holdings, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||||||||||||
Certification of Chief Executive Officer of Hayward Holdings, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||||||||||||
Certification of Chief Financial Officer of Hayward Holdings, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||||||||||||
101.INS | XBRL Instance Document. | ||||||||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document. | ||||||||||||||||
101.CAL | XBRL Taxonomy Calculation Linkbase Document. | ||||||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | ||||||||||||||||
101.LAB | XBRL Taxonomy Label Linkbase Document. | ||||||||||||||||
101.PRE | XBRL Taxonomy Presentation Linkbase Document. |
HAYWARD HOLDINGS, INC. | ||||||||
By: | /s/ | |||||||
Name: | Eifion Jones | |||||||
Title: | Senior Vice President & Chief Financial Officer | |||||||
ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION | 1 | ||||
1.1 Definitions | 1 | ||||
1.2 Rules of Construction | 12 | ||||
ARTICLE II ISSUANCES AND TRANSFERS OF SECURITIES | 13 | ||||
2.1 Issuances and Transfers of Securities | 13 | ||||
2.2 Restriction on Transfer; Coordination | 13 | ||||
2.3 [Intentionally Omitted.] | 15 | ||||
2.4 [Intentionally Omitted.] | 15 | ||||
2.5 Call Right; Forfeiture | 15 | ||||
ARTICLE III [INTENTIONALLY OMITTED.] | 18 | ||||
ARTICLE IV [INTENTIONALLY OMITTED.] | 18 | ||||
ARTICLE V REGISTRATION RIGHTS | 18 | ||||
5.1 [Intentionally Omitted.] | 18 | ||||
5.2 Required Registration | 18 | ||||
5.3 Piggyback Registration | 20 | ||||
5.4 Registration on Form S-3 or Form S-3ASR | 21 | ||||
5.5 Holdback Agreement | 23 | ||||
5.6 Preparation and Filing | 24 | ||||
5.7 Expenses | 27 | ||||
5.8 Indemnification | 28 |
5.9 Underwriting Agreement | 30 | ||||
5.10 Information by Holder | 32 | ||||
5.11 Exchange Act Compliance | 32 | ||||
ARTICLE VI SECURITIES LAW COMPLIANCE; LEGENDS | 32 | ||||
6.1 Restrictive Legends | 32 | ||||
6.2 Notice of Transfer | 32 | ||||
6.3 Removal of Legends, Etc | 33 | ||||
6.4 Additional Legend | 33 | ||||
6.5 Future Stockholders | 34 | ||||
ARTICLE VII AMENDMENT AND WAIVER | 34 | ||||
7.1 Amendment | 34 | ||||
7.2 Waiver | 35 | ||||
ARTICLE VIII TERMINATION | 35 | ||||
ARTICLE IX MISCELLANEOUS | 35 | ||||
9.1 Severability | 35 | ||||
9.2 Entire Agreement | 35 | ||||
9.3 Independence of Agreements and Covenants | 36 | ||||
9.4 Successors and Assigns | 36 | ||||
9.5 Counterparts; Facsimile Signatures; Validity | 36 | ||||
9.6 Remedies | 36 | ||||
9.7 Notices | 37 | ||||
9.8 Governing Law; Venue | 38 | ||||
9.9 Waiver of Jury Trial | 39 | ||||
9.10 Further Assurances | 39 | ||||
9.11 Conflicting Agreements | 39 | ||||
9.12 Third Party Reliance | 40 | ||||
9.13 Subsidiaries | 40 | ||||
9.14 Adjustments | 40 | ||||
9.15 Non-Recourse | 40 |
ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION | 1 | ||||
1.1 Definitions | 1 | ||||
1.2 Rules of Construction | 12 | ||||
ARTICLE II ISSUANCES AND TRANSFERS OF SECURITIES | 13 | ||||
2.1 Issuances and Transfers of Securities | 13 | ||||
2.2 Restriction on Transfer; Coordination | 13 | ||||
2.3 [Intentionally Omitted.] | 15 | ||||
2.4 [Intentionally Omitted.] | 15 |
2.5 Call Right; Forfeiture | 15 | ||||
ARTICLE III [INTENTIONALLY OMITTED.] | 18 | ||||
ARTICLE IV [INTENTIONALLY OMITTED.] | 18 | ||||
ARTICLE V REGISTRATION RIGHTS | 18 | ||||
5.1 [Intentionally Omitted.] | 18 | ||||
5.2 Required Registration | 18 | ||||
5.3 Piggyback Registration | 20 | ||||
5.4 Registration on Form S-3 or Form S-3ASR | 21 | ||||
5.5 Holdback Agreement | 23 | ||||
5.6 Preparation and Filing | 24 | ||||
5.7 Expenses | 27 | ||||
5.8 Indemnification | 28 | ||||
5.9 Underwriting Agreement | 30 | ||||
5.10 Information by Holder | 32 | ||||
5.11 Exchange Act Compliance | 32 | ||||
ARTICLE VI SECURITIES LAW COMPLIANCE; LEGENDS | 32 | ||||
6.1 Restrictive Legends | 32 | ||||
6.2 Notice of Transfer | 32 | ||||
6.3 Removal of Legends, Etc | 33 | ||||
6.4 Additional Legend | 33 | ||||
6.5 Future Stockholders | 34 | ||||
ARTICLE VII AMENDMENT AND WAIVER | 34 | ||||
7.1 Amendment | 34 | ||||
7.2 Waiver | 35 | ||||
ARTICLE VIII TERMINATION | 35 | ||||
ARTICLE IX MISCELLANEOUS | 35 | ||||
9.1 Severability | 35 | ||||
9.2 Entire Agreement | 35 | ||||
9.3 Independence of Agreements and Covenants | 36 | ||||
9.4 Successors and Assigns | 36 | ||||
9.5 Counterparts; Facsimile Signatures; Validity | 36 | ||||
9.6 Remedies | 36 | ||||
9.7 Notices | 37 | ||||
9.8 Governing Law; Venue | 38 | ||||
9.9 Waiver of Jury Trial | 39 | ||||
9.10 Further Assurances | 39 | ||||
9.11 Conflicting Agreements | 39 | ||||
9.12 Third Party Reliance | 40 | ||||
9.13 Subsidiaries | 40 |
9.14 Adjustments | 40 | ||||
9.15 Non-Recourse | 40 |
Signature of Stockholder Print Name of Stockholder | |||||
Number of Stockholder Shares: _________shares of Common Stock | Address E-mail Telephone | ||||
ACKNOWLEDGED & ACCEPTED: HAYWARD HOLDINGS, INC. By Name: Title: |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Apr. 03, 2021 |
Dec. 31, 2020 |
---|---|---|
Allowance for credit loss | $ 1.4 | $ 1.4 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ (56.3) | $ (51.9) |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock issued (in shares) | 231,120,757 | 3,846,960 |
Common stock outstanding (in shares) | 231,120,757 | 2,772,900 |
Common treasury stock (in shares) | 4,698,584 | 4,340,310 |
Common Class A | ||
Redeemable stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Redeemable stock authorized (in shares) | 0 | 1,500,000 |
Redeemable stock issued (in shares) | 0 | 872,598 |
Redeemable stock outstanding (in shares) | 0 | 869,823 |
Common Class C | ||
Redeemable stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Redeemable stock authorized (in shares) | 0 | 100 |
Redeemable stock issued (in shares) | 0 | 100 |
Redeemable stock outstanding (in shares) | 0 | 100 |
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2021 |
Mar. 28, 2020 |
|
Income Statement [Abstract] | ||
Foreign currency translation adjustment tax expense (benefit) | $ 1.1 | $ (3.1) |
Change in fair value of derivatives, tax expense (benefit) | $ 0.6 | $ (2.0) |
Nature of Operations and Organization |
3 Months Ended |
---|---|
Apr. 03, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Organization | 1. Nature of Operations and Organization Hayward Holdings, Inc. (“Holdings” or the “Company”) is a global designer, manufacturer, and marketer of a broad portfolio of pool equipment and associated automation systems. The Company has facilities in the United States, Canada, Spain, France, Australia and China. Cash flow is impacted by the seasonality of the swimming pool business. Cash flow is usually higher in the second and third quarters due to terms of sale to our customers. Prior to March 2, 2021, the Company had three classes of stock designated as Class A, Class B and Class C stock. On March 2, 2021, the Company reclassified its Class B common stock into common stock, par value $0.001 per share ( “Common Stock”), and then effected a 195-for-1 split of its Common Stock. On March 11, 2021, the Company converted each outstanding share of Class A stock into 195 shares of Common Stock plus an additional 42.5671 shares, which amount was determined by dividing (a) the Class A preference amount of such share of Class A stock, or $683.84 per share (the “Class A Preference Amount”), by (b) the initial public offering price of $17.00 per a share of Common Stock in the Company’s initial public offering (“IPO”), net of the per share underwriting discount, and (ii) the Company redeemed each outstanding share of Class C stock for an aggregate price of $1.00. References to the “Reclassification” refer to (i) the reclassification of the Company’s Class B common stock into Common Stock on March 2, 2021, (ii) the 195-for-1 stock split of the Company’s common stock on March 2, 2021, (iii) the conversion of the Company’s Class A stock into Common Stock, (iv) the redemption of the Company’s Class C stock and (v) the filing and effectiveness of the Company’s second restated certificate of incorporation and the adoption of its amended and restated bylaws on March 16, 2021. All share and per share amounts for all periods presented in these condensed consolidated financial statements and related notes have been adjusted retroactively, where applicable, to reflect the Reclassification. On March 16, 2021, the Company completed its IPO whereby it issued 22,200,000 shares of its Common Stock, and entities affiliated with CCMP Capital Advisors, LP (“CCMP”), MSD Partners, L.P. (“MSD Partners”) and Alberta Investment Management Corporation (“AIMCo” and, together with CCMP and MSD Partners, the “Sponsors”) sold an aggregate of 20,893,665 shares of the Company’s Common Stock, inclusive of 2,815,887 shares sold by entities affiliated with the Sponsors pursuant to the partial exercise of the underwriters’ option to purchase additional shares. The shares began trading on the New York Stock Exchange on March 12, 2021. The aggregate net proceeds received by the Company from the IPO were $356.6 million, after deducting underwriting discounts and commissions and other offering costs. The Company used the net proceeds from the IPO to repay existing indebtedness outstanding under its credit facilities as further described in Note 7.
|
Significant Accounting Policies |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of such information. All such adjustments are of a normal recurring nature. Certain information and note disclosures, including a description of significant accounting policies normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the Company’s annual consolidated financial statements and notes thereto for the fiscal year ended December 31, 2020 included in the Company's final prospectus for the IPO filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended, filed with the SEC on March 15, 2021 (the "IPO Prospectus"). The results of operations for the three months ended April 3, 2021 are not necessarily indicative of the results for any subsequent periods or the entire fiscal year ending December 31, 2021. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Cash and Cash Equivalents The following table provides supplemental cash flow information and a reconciliation of cash and cash equivalents and restricted cash to amounts reported within the Company's condensed consolidated balance sheets and condensed consolidated statements of cash flows (in millions):
(a) included in Other current assets Recent Accounting Pronouncements Not Yet Adopted The Company plans to adopt the following recent accounting pronouncements based on accommodations for Emerging Growth Companies. Accounting for Leases Accounting Standards Update (the "ASU") 2016-02, Leases, was issued by Financial Accounting Standards Board (the "FASB") in February 2016. This standard requires the Company, as the lessee, to recognize most leases on the balance sheet thereby resulting in the recognition of right of use assets and lease obligations for those leases currently classified as operating leases. The standard will be effective for the Company on January 1, 2022 and it is evaluating whether it will elect the optional transition method as well as the package of practical expedients, upon adoption. In addition to the recognition of the rights of use assets and lease obligations, the Company anticipates changes in systems, processes and controls. While the requirements of the new guidance represent a material change from existing Generally Accepted Accounting Principles (the "GAAP"), the underlying economics of items in scope and related cash flows are unchanged. The Company plans to focus on gathering data, developing procedures and testing before adoption. Focus areas include, but are not limited to (i) updating procedures to reflect new guidance; (ii) developing, testing, and implementing controls for newly developed procedures, as well as for additional annual reporting requirements. New Credit Loss Standard ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, was issued by FASB in June 2016. This standard is effective January 1, 2022, and will impact, at least to some extent, the Company’s accounting and disclosure requirements for its accounts receivable. The Company will continue to identify any other financial assets not excluded from scope. The Company does not currently expect to early adopt this standard and is currently evaluating the impact of this new accounting guidance on its condensed consolidated financial statements. The Company anticipates an impact on the systems, processes and controls. While the requirements of the new guidance represent a material change from existing GAAP, the underlying economics of items in scope and related cash flows are unchanged. The Company plans to focus on gathering data, developing procedures and testing before adoption. Focus areas include, but are not limited to (i) updating procedures to reflect new guidance requiring establishment of allowance for credit losses on accounts receivable; (ii) establishing procedures to identify and review all remaining financial assets within scope, (iii) developing, testing, and implementing controls for newly developed procedures, as well as for additional annual reporting requirements. Simplifying the Accounting for Income Taxes ASU 2019-12, “Simplifying the Accounting for Income Taxes” (Topic 740), was issued by FASB in December 2019. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for the Company beginning after December 15, 2021 and interim periods beginning after December 15, 2022, with early adoption permitted. Depending on the amendment, adoption may be applied on the retrospective, modified retrospective or prospective basis. The Company is currently evaluating the effect of the standard on its ongoing financial reporting. Reference Rate Reform ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.”, was issued by FASB in March 2020. In January 2021, the FASB clarified the scope of that guidance with the issuance of ASU 2021-01, Reference Rate Reform: Scope. ASU 2020-04 provides optional expedients and exceptions to account for contracts, hedging relationships and other transactions that reference LIBOR or another reference rate if certain criteria are met. ASU 2020-04 may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating the potential effects of the adoption of ASU 2020-04.
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Revenue |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | 3. Revenue The following table disaggregates net sales between product groups and geographic destinations, respectively (in millions):
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | 4. Inventories Inventories consist of the following (in millions):
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Accrued Expenses and Other Liabilities |
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Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Liabilities | 5. Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consist of the following (in millions):
The Company offers warranties on certain of its products and records an accrual for estimated future claims. Such accruals are based on historical experience and management’s estimate of the level of future claims. Changes in the warranty reserve are as follows (in millions):
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Income Taxes |
3 Months Ended |
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Apr. 03, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. Income Taxes The Company's effective tax rate for the three months ended April 3, 2021 and three months ended March 28, 2020 were 29.1% and 22.5%, respectively. The increase in the Company’s effective tax rate for the three months ended April 3, 2021 from the three months ended March 28, 2020 was primarily due to a Global Intangible Low Tax Income ("GILTI") inclusion, changes in the relative income between jurisdictions, and a discrete tax charge relating to nondeductible GAAP stock compensation expense in excess of annual IRS compensation expense limitations due to the accelerated vesting of performance based grants due to the IPO. The Company will recognize a tax benefit in the financial statements for an uncertain tax position only if the Company's assessment is that the position is "more likely than not" (i.e., a likelihood greater than 50 percent) to be allowed by the tax jurisdiction based solely on the technical merits of the position. The term "tax position" refers to a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for financial reporting purposes. There were no uncertain tax positions at April 3, 2021 and December 31, 2020, respectively. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities and projected future taxable income in making this assessment. Management evaluates the need for valuation allowances on the deferred tax assets according to the provisions of ASC 740, Income Taxes. In making this determination, the Company assesses all available evidence (positive and negative) including recent earnings, internally-prepared income tax projections, and historical financial performance.
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Long-Term Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | 7. Long-Term Debt Long-term debt consists of the following (in millions):
The Company made $8.0 million and $356.6 million of voluntary term loan repayments on February 19, 2021 and March 19, 2021, respectively. The March 19, 2021 repayment was funded with the net proceeds received from the IPO, of which (i) $205.0 million was used to repay in full outstanding borrowings under the Company's Second Lien Term Facility, (ii) $131.1 million was used to repay outstanding borrowings under the Company's First Lien Term Facility and (iii) $20.5 million was used to repay borrowings under the Incremental First Lien Term Facility. The Company recorded a $5.8 million debt extinguishment loss related to the write off of unamortized deferred financing costs as a result of the partial repayment of the First Lien Term Facility and Incremental First Lien Term Facility. The First Lien Term Facility, Second Lien Term Facility (“Term Loan Facilities”) and ABL Revolving Credit Facility ("ABL Facility") and, together with the Term Loan Facilities (collectively “Credit Facilities”) contain various restrictions, covenants and collateral requirements. As of April 3, 2021 we were in compliance with all covenants under the Credit Facilities.
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Derivatives and Hedging Transactions |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Hedging Transactions | 8. Derivatives and Hedging Transactions The Company holds derivative financial instruments for the purpose of hedging the risks of certain identifiable and anticipated transactions. In general, the types of risks hedged are those relating to the variability of future earnings and cash flows caused by movements in foreign currency exchange rates and interest rates. In hedging the transactions, the Company in the normal course of business, holds the following types of derivatives. Interest Rate Swap Agreements The Company enters into interest rate swap agreements designated as cash flow hedges to manage its interest rate risk related to its variable rate debt obligations. As cash flow hedges, unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. The interest rate swap agreements are highly correlated to the changes in interest rates to which the Company is exposed. Unrealized gains and losses on these instruments have been designated as effective and as such, the related gains or losses have been recorded as a component of accumulated other comprehensive loss, net of tax. As of April 3, 2021, the Company was a party to two interest rate swap agreements that effectively converts an initial notional amount of $550.0 million of its variable rate debt obligations to a fixed rate debt. The interest rate swap agreements expire in August 2021. On December 23, 2020, the Company entered into three variable rate collar derivative foreign exchange contracts to hedge US $30 million of intercompany remittances through June 2021. Net Investment Hedges The Company uses net investment hedges to minimize its exposure to variability in the foreign currency translation of its net investment in one of its international subsidiaries. The effective portion of changes in the fair value of the hedging instrument is recognized in accumulated other comprehensive loss consistent with the related translation gains and losses of the hedged net investment. For net investment hedges, all critical terms of the hedged item and the hedging instrument are matched at inception and on an ongoing basis to minimize the risk of hedge ineffectiveness. At December 31, 2017, the Company entered into a four year euro-denominated cross currency swap agreement of €75.0 million to hedge the net investment in one of its foreign subsidiaries designated as a hedge expiring on August 31, 2021. Since both the notional value of the derivative designated as a hedge of a net investment in a foreign subsidiary equals the portion of the net investment designated as being hedged and the derivative relates solely to the foreign exchange rate between the functional currency of the hedged net investment and the Company’s functional currency, all changes in fair value of the derivative are reported in the cumulative translation adjustment accounts, net of tax within accumulated other comprehensive income (loss) in the Company's condensed consolidated balance sheets. The amounts recorded in accumulated other comprehensive income (loss) will be reclassified to earnings only upon the sale or liquidation of the Company’s investment in one of its international subsidiaries or on maturity of the underlying agreements. The following table summarizes the gross fair values and location of the derivative instruments within Company's condensed consolidated balance sheets (in millions):
The following tables present the effects of derivative instruments by contract type in accumulated other comprehensive income in the Company's condensed consolidated statements of operations and comprehensive income (loss) (in millions):
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Fair Value Measurements |
3 Months Ended |
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Apr. 03, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 9. Fair Value Measurements The Company is required to disclose the estimated fair values of all financial instruments, even if they are not carried at their fair value. The fair values of financial instruments are estimates based upon market conditions and perceived risks. These estimates require management’s judgment and may not be indicative of the future fair values of the assets and liabilities. The Company’s financial instruments include cash and cash equivalents, accounts receivable, and accounts payable. The carrying amount of these instruments approximate fair value because of their short-term nature. The Company’s interest rate swaps and the net investment hedge are measured in the financial statements at fair value on a recurring basis. Please refer to Footnote 8 for fair value disclosures. The fair values of the interest rate swaps are estimated using industry standard valuation models using market-based observable inputs, including interest rate curves. The fair value of the net investment hedge is estimated using readily observable market inputs, such as quotations on forward foreign exchange points and foreign interest rates. These instruments are customary, over-the-counter contracts with various bank counterparties that are not traded in active markets. Accordingly, the fair value measurements of the interest rate swaps and the net investment hedge are categorized as Level 2. As of April 3, 2021, the Company’s long-term debt instruments with a carrying value of $997.2 million (excludes capital leases) had a fair value of approximately $996.9 million. As of December 31, 2020, the Company’s long-term debt instruments with a carrying value of $1,313.0 million had a fair value of approximately $1,304.6 million. The estimated fair value of the long-term debt is based on observable quoted prices in active markets for similar liabilities and is classified as a Level 2 input. The fair value of the revolving credit facility approximates its carrying value due to its short term nature.
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Segments and Related Information |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments and Related Information | 10. Segments and Related Information The Company's operational and management structure is aligned to its key geographies and go-to market strategy resulting in two reportable segments: North America and Europe & Rest of World. Operating segments have not been aggregated to form the reportable segments. The Company determined its reportable segments based on how the Company's Chief Operating Decision Maker ("CODM") reviews the Company’s operating results in assessing performance and allocating resources. The CODM reviews net sales, gross profit and segment income for each of the reportable segments. Gross profit is defined as net sales less cost of sales incurred by the segment. The CODM does not evaluate reportable segments using asset information as these are managed on an enterprise wide basis. Segment income is defined as segment gross profit less sales, general, and administrative expenses ("SG&A") and research, development, and engineering ("RD&E"). The North America segment manufactures and sells residential and commercial swimming pool equipment and supplies as well as equipment that controls the flow of fluids. This segment is composed of three reporting units. The Europe & Rest of World segment manufactures and sells residential and commercial swimming pool equipment and supplies. This segment is composed of two reporting units. The Company sells its products primarily through distributors and retailers. Financial information by reportable segment, net of intercompany transactions, is included in the following summary (in millions):
The following table presents a reconciliation of segment income to income (loss) from operations before income taxes (in millions):
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | 11. Earnings Per Share The following table sets forth the computation of basic and diluted net income (loss) per share attributable to common stockholders (in millions, except share and per share amounts):
Net income (loss) attributable to common stockholders, used as the numerator in our EPS computation, was reduced by a non-cash charge due to a beneficial conversion feature related to the redemption of Class A shares for common shares. Such non-cash charge is treated as a deemed dividend. It is a one-time accounting reclassification within the condensed consolidated statements of changes in redeemable stock and stockholders' equity and does not have any current or future income statement impact.
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Commitments and Contingencies |
3 Months Ended |
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Apr. 03, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Litigation The Company is involved in litigation arising in the normal course of business. Where appropriate, these matters have been submitted to the Company’s insurance carrier. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. It is not possible to quantify the ultimate liability, if any, in these matters. Although the Company can give no assurances about the resolution of pending claims, litigation or other disputes and the effect such outcomes may have on the Company, in the opinion of management, it is remote that such litigation will have a material adverse effect on the financial position, results of operations or cash flows of the Company. Pentair Litigation The Company is presently a defendant in a set of consolidated patent infringement actions brought by Pentair Water Pool and Spa, Inc. and Danfoss Drives A/S(Civil Nos. 5:11-cv-459-D and 5:12-cv-251-D), pending in the United States District Court for the Eastern District of North Carolina. Collectively, the plaintiffs in these actions have asserted that certain of our variable speed pump and controller products infringe claims in seven United States patents: U.S. Patent Nos. 7,854,597; 7,815,420; 7,857,600; 7,686,587; 7,704,051; 8,019,479; and 8,043,070. The Company initiated related USPTO proceedings against certain of the asserted patents, including inter partes reexamination nos. 95/002005, 95/002006, 95/002007, and 95/002008 and inter partes review nos. IPR2013-00285 and IPR2013-00287. The Company has also raised non-infringement and invalidity defenses against each of the patents asserted against us in the district court actions, which are currently stayed. Additionally, the Company is aware of patents related to the asserted patents, including continuing, foreign and/or other related issued patents and pending patent applications, that could be asserted against us in the future. If defenses raised by the Company are not upheld, or if Pentair and/or Danfoss were to prevail in these proceedings and/or otherwise, then we may owe money damages and/or be subject to an injunction for any unexpired patent that would require the cessation of any infringing activity, which could have a negative impact on our supply chain or other business, including the ability of us, our vendor(s), and/or our customer(s) to make, use, sell, offer for sale and/or import variable speed drives or pumps, and/or the automation controllers therefor, any of which including the component(s), feature(s) and/or functionalit(ies) accused of infringement.
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Stockholders’ Equity |
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Apr. 03, 2021 | |
Equity [Abstract] | |
Stockholders’ Equity | 13. Stockholders’ Equity Prior to the Reclassification, the outstanding capital stock of the Company consisted of three classes of stock: Class A stock, par value of $0.001 per share of which 1,500,000 shares were authorized; Class B common stock par value of $0.001 per share of which 150,000 shares were authorized; and Class C stock, par value $0.001 per share of which 100 shares were authorized. In October 2020, the Board of Directors approved a distribution of $275.0 million, or $316.16 per share of Class A stock of the Company. On March 2, 2021 the Company filed a Certificate of Amendment of Amended and Restated Certificate Incorporation pursuant to which all shares of Class B common stock were reclassified into an equal number of fully paid and non-assessable Common Stock and the Company then effected a 195-for-1 split of its Common Stock. The outstanding capital stock of the Company now consists of a single class of Common Stock. Prior to the IPO, each share of Class A stock was converted into a number of shares of Common Stock equal to 237.57 which is the sum of 195.00 plus the quotient of 42.57 obtained by dividing the then outstanding preference amount of 683.84 for such share by the IPO offering price of 17.00, net of any underwriting discount or a net conversion factor of 16.07. Prior to the IPO all 100 shares of Class C stock were redeemed for $100 dollars in total. On March 16, 2021, the Company filed its Second Restated Certificate of Incorporation. Preferred Stock As of April 3, 2021, the Company’s Second Restated Certificate of Incorporation authorized the Company to issue up to 100,000,000 shares of preferred stock, $0.001 value per share, all of which is undesignated. Common Stock As of April 3, 2021, the Company’s Second Restated Certificate of Incorporation authorized the Company to issue up to 750,000,000 shares of Common Stock, $0.001 value per share. Each share of Common Stock is entitled to one vote on all matters submitted to a vote of the Company’s stockholders. The holders of Common Stock are entitled to receive dividends, if any, as may be declared by the board of directors. Through April 3, 2021, no dividends had been declared or paid.
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Stock-based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation | 14. Stock-based Compensation The Company has established two equity incentive plans as described below. The total stock-based compensation for the three months ended April 3, 2021 and the three months ended March 28, 2020 was $10.6 million and $0.7 million, respectively. 2021 Equity Incentive Plan In March 2021, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”). Under the 2021 Plan, up to 13,737,500 shares of common stock may be granted to employees, directors and consultants in the form of stock options, restricted stock units and other stock-based awards. The terms of awards granted under the 2021 Plan are determined by the Compensation Committee of the Board of Directors, subject to the provisions of the 2021 Plan. As of April 3, 2021 there were 12,361,929 shares available for future issuance under the 2021 Plan. Options granted under the 2021 Plan expire no later than 10 years from the date of grant. The vesting period of stock options and restricted stock units granted under the 2021 Plan is generally three years from the date of grant. 2021 Options
There were no exercises or vesting of these options in the three months ended April 3, 2021. The Company determined the fair value of these stock options at the date of grant using the Black-Scholes option-pricing model. The principal assumptions used in the Black-Scholes option-pricing model for these stock options granted were as follows:
2021 Restricted Stock Units
2017 Equity Incentive Plan In August 2017, the Company adopted the 2017 Equity Incentive Plan (the “2017 Plan”), which provided for the issuance of stock options, restricted stock and restricted stock awards to officers, directors and employees. The stock options granted under the 2017 Plan generally have a maximum term of up to 10 years. Restricted stock, restricted stock awards, and stock options granted under the 2017 Plan generally are eligible to vest based on continued service, generally over five years, or upon an initial public offering and post-initial public offering stock price performance. All performance-vesting conditions were satisfied on March 26, 2021 following our IPO on March 12, 2021 and subsequent stock price performance. For presentation purposes in this document we have recast the figures reported as of December 31, 2020 to recognize the 195-for-1 stock split that occurred on March 2, 2021 as if it had been effective on January 1, 2021. As of April 3, 2021 there were 7,224,906 outstanding options and 1,505,751 outstanding restricted stock awards under the 2017 Plan. No future awards will be made under the 2017 Plan following our IPO. Shares underlying awards under the 2017 Plan that expire or become unexercisable without delivery of shares, are forfeited to, or repurchased for cash by, the Company, are settled in cash, or otherwise become available again for grant will be available for future awards under the 2021 Plan (as described above). Time-Based Stock Options The following table summarizes activity for time-based stock option under the 2017 Plan:
At April 3, 2021, the total unrecognized compensation cost related to time-based stock options was $5.6 million. This cost is expected to be recognized over a weighted average period of 3.20 years. The Company determined the fair value of these time-based stock options at the date of grant using the Black-Scholes option-pricing model. The principal assumptions used in the Black-Scholes option-pricing model for these stock options granted were as follows:
The risk-free interest rate was based on the U.S. Treasury yield curve at date of grant over the expected term of these stock options. The expected volatility was based upon a comparable public company’s historical volatility. Market and Performance Condition Stock Options The following table summarizes activity for stock options with market and performance conditions under our 2017 Plan:
The performance criteria was met on March 26, 2021.
As of April 3, 2021, there was no unrecognized compensation costs related to performance-based stock options. The Company determined the fair value of these performance-based stock options at the date of grant using the Black-Scholes option pricing model. The principal assumptions used in the Black-Scholes option-pricing model for these stock options granted were as follows:
The risk-free interest rate was based on the U.S. Treasury yield curve at date of grant over the expected term of these stock options. The expected volatility was based upon comparable public companies historical volatility. Time-Based Restricted Stock Awards The following table summarizes activity for time-based restricted stock awards under the 2017 Plan:
At April 3, 2021, the Company had $0.2 million of total unrecognized compensation costs relating to these restricted stock awards, which is expected to be recognized through August 4, 2022. Performance-Based Restricted Stock Awards with Market and Performance Conditions The following table summarizes activity for performance-based restricted stock awards under our the 2017 Plan:
The performance criteria was met on March 26, 2021. Accordingly, 225,570 shares of Restricted Class A stock and 857,805 shares of Restricted Common Stock vested. The fair value of the vested shares was $1.4 million. At April 3, 2021, the Company had no unrecognized compensation costs relating to these restricted stock awards.
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Acquisition and Restructuring Related Expense (Income) |
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Acquisition and Restructuring Related Expense (Income) | 15. Acquisition and Restructuring Related Expense (Income) 2021 As of April 3, 2021, there were no unrecognized accruals or expenses related to acquisition and restructuring activities. 2020 In 2019, we announced the cessation of certain manufacturing and distribution operations and sold the real estate associated with these operations with a one year lease back arrangement to allow for the orderly restructuring of these operations. The sale and leaseback was accounted for as separate transactions based on their respective terms in accordance with ASC 840, Leases. All activities related to this were fully completed in 2020. The Company recognizes severance charges on a straight-line basis over the notification period in accordance with ASC 420, Exit or Disposal Activities. Such charges include the facility closure described above and other one-time termination benefits (in millions):
Restructuring costs are included within acquisition and restructuring related costs on the Company’s condensed consolidated statements of operations and comprehensive income (loss), while the restructuring liability is included as a component of accrued expenses and other liabilities on the Company's condensed consolidated balance sheets.
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Related Party Transactions |
3 Months Ended |
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Apr. 03, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 16. Related Party TransactionsThe Company incurred management fees to certain Sponsors in the amount of $0.2 million for three months ended April 3, 2021 and March 28, 2020, respectively. In addition, zero million and $0.1 million in Class C dividends were incurred to one Sponsor in lieu of management fees for three months ended April 3, 2021 and March 28, 2020, respectively. |
Subsequent Events |
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Apr. 03, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to the issuance date of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. The Company has evaluated subsequent events through May 18, 2021, the date that these condensed consolidated financial statements were issued. On May 17, 2021, the Company announced that its indirect, wholly owned subsidiary Hayward Industries, Inc. had successfully secured commitments for a senior secured term loan facility (“New Term Loan Facility”) in an aggregate principal amount of $1.0 billion. Proceeds will be used to refinance existing term loans and revolver borrowings, fund cash to the balance sheet, and pay related fees and expenses. The New Term Loan Facility will be issued with an original issue discount of 0.50%, will bear interest at a floating rate of LIBOR (with a 0.50% floor) plus 2.75% per annum with a step down to LIBOR plus 2.50% per annum when net secured leverage is less than 2.5x.proforma adjusted EBITDA. This transaction is expected to close in May 2021, subject to customary closing conditions, and will mature in May 2028.
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Significant Accounting Policies (Policies) |
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Apr. 03, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of such information. All such adjustments are of a normal recurring nature. Certain information and note disclosures, including a description of significant accounting policies normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the Company’s annual consolidated financial statements and notes thereto for the fiscal year ended December 31, 2020 included in the Company's final prospectus for the IPO filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended, filed with the SEC on March 15, 2021 (the "IPO Prospectus"). The results of operations for the three months ended April 3, 2021 are not necessarily indicative of the results for any subsequent periods or the entire fiscal year ending December 31, 2021. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
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Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted The Company plans to adopt the following recent accounting pronouncements based on accommodations for Emerging Growth Companies. Accounting for Leases Accounting Standards Update (the "ASU") 2016-02, Leases, was issued by Financial Accounting Standards Board (the "FASB") in February 2016. This standard requires the Company, as the lessee, to recognize most leases on the balance sheet thereby resulting in the recognition of right of use assets and lease obligations for those leases currently classified as operating leases. The standard will be effective for the Company on January 1, 2022 and it is evaluating whether it will elect the optional transition method as well as the package of practical expedients, upon adoption. In addition to the recognition of the rights of use assets and lease obligations, the Company anticipates changes in systems, processes and controls. While the requirements of the new guidance represent a material change from existing Generally Accepted Accounting Principles (the "GAAP"), the underlying economics of items in scope and related cash flows are unchanged. The Company plans to focus on gathering data, developing procedures and testing before adoption. Focus areas include, but are not limited to (i) updating procedures to reflect new guidance; (ii) developing, testing, and implementing controls for newly developed procedures, as well as for additional annual reporting requirements. New Credit Loss Standard ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, was issued by FASB in June 2016. This standard is effective January 1, 2022, and will impact, at least to some extent, the Company’s accounting and disclosure requirements for its accounts receivable. The Company will continue to identify any other financial assets not excluded from scope. The Company does not currently expect to early adopt this standard and is currently evaluating the impact of this new accounting guidance on its condensed consolidated financial statements. The Company anticipates an impact on the systems, processes and controls. While the requirements of the new guidance represent a material change from existing GAAP, the underlying economics of items in scope and related cash flows are unchanged. The Company plans to focus on gathering data, developing procedures and testing before adoption. Focus areas include, but are not limited to (i) updating procedures to reflect new guidance requiring establishment of allowance for credit losses on accounts receivable; (ii) establishing procedures to identify and review all remaining financial assets within scope, (iii) developing, testing, and implementing controls for newly developed procedures, as well as for additional annual reporting requirements. Simplifying the Accounting for Income Taxes ASU 2019-12, “Simplifying the Accounting for Income Taxes” (Topic 740), was issued by FASB in December 2019. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for the Company beginning after December 15, 2021 and interim periods beginning after December 15, 2022, with early adoption permitted. Depending on the amendment, adoption may be applied on the retrospective, modified retrospective or prospective basis. The Company is currently evaluating the effect of the standard on its ongoing financial reporting. Reference Rate Reform ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.”, was issued by FASB in March 2020. In January 2021, the FASB clarified the scope of that guidance with the issuance of ASU 2021-01, Reference Rate Reform: Scope. ASU 2020-04 provides optional expedients and exceptions to account for contracts, hedging relationships and other transactions that reference LIBOR or another reference rate if certain criteria are met. ASU 2020-04 may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating the potential effects of the adoption of ASU 2020-04.
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Significant Accounting Policies (Tables) |
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Schedule of Cash and Cash Equivalents | Cash and Cash Equivalents The following table provides supplemental cash flow information and a reconciliation of cash and cash equivalents and restricted cash to amounts reported within the Company's condensed consolidated balance sheets and condensed consolidated statements of cash flows (in millions):
(a) included in Other current assets
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Restrictions on Cash and Cash Equivalents | Cash and Cash Equivalents The following table provides supplemental cash flow information and a reconciliation of cash and cash equivalents and restricted cash to amounts reported within the Company's condensed consolidated balance sheets and condensed consolidated statements of cash flows (in millions):
(a) included in Other current assets
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Revenue (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Sales by Product Groups | The following table disaggregates net sales between product groups and geographic destinations, respectively (in millions):
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Schedule of Net Sales by Geographic Destinations | The following table disaggregates net sales between product groups and geographic destinations, respectively (in millions):
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Inventories (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories | Inventories consist of the following (in millions):
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Accrued Expenses and Other Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities and Other Current Liabilities | Accrued expenses and other liabilities consist of the following (in millions):
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Schedule of Change in Warranty Reserve | Changes in the warranty reserve are as follows (in millions):
|
Long-Term Debt (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | Long-term debt consists of the following (in millions):
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Derivatives and Hedging Transactions (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effect of Derivative Instruments in the Statement of Financial Position and Operations and Comprehensive Income (Loss) | The following table summarizes the gross fair values and location of the derivative instruments within Company's condensed consolidated balance sheets (in millions):
The following tables present the effects of derivative instruments by contract type in accumulated other comprehensive income in the Company's condensed consolidated statements of operations and comprehensive income (loss) (in millions):
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Segments and Related Information (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The Company sells its products primarily through distributors and retailers. Financial information by reportable segment, net of intercompany transactions, is included in the following summary (in millions):
The following table presents a reconciliation of segment income to income (loss) from operations before income taxes (in millions):
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Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted net income (loss) per share attributable to common stockholders (in millions, except share and per share amounts):
Net income (loss) attributable to common stockholders, used as the numerator in our EPS computation, was reduced by a non-cash charge due to a beneficial conversion feature related to the redemption of Class A shares for common shares. Such non-cash charge is treated as a deemed dividend. It is a one-time accounting reclassification within the condensed consolidated statements of changes in redeemable stock and stockholders' equity and does not have any current or future income statement impact.
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Stock-based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Option Activity |
The following table summarizes activity for time-based stock option under the 2017 Plan:
The following table summarizes activity for stock options with market and performance conditions under our 2017 Plan:
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Schedule of Restricted Stock Units Activity |
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Schedule of Option Pricing Model for Stock Options Granted | The principal assumptions used in the Black-Scholes option-pricing model for these stock options granted were as follows:
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Schedule of Restricted Stock Awards | The following table summarizes activity for time-based restricted stock awards under the 2017 Plan:
The following table summarizes activity for performance-based restricted stock awards under our the 2017 Plan:
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Acquisition and Restructuring Related Expense (Income) (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Charges For Facility Closure And Other One Time Termination Benefits | Such charges include the facility closure described above and other one-time termination benefits (in millions):
|
Significant Accounting Policies - Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions |
Apr. 03, 2021 |
Dec. 31, 2020 |
---|---|---|
Accounting Policies [Abstract] | ||
Cash and cash equivalents | $ 13.8 | $ 114.9 |
Restricted cash | 0.6 | 0.4 |
Total cash and cash equivalents and restricted cash | $ 14.4 | $ 115.3 |
Revenue (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2021 |
Mar. 28, 2020 |
|
Revenue from External Customer [Line Items] | ||
Net sales | $ 334.4 | $ 170.2 |
United States | ||
Revenue from External Customer [Line Items] | ||
Net sales | 239.8 | 116.9 |
Total international revenue | ||
Revenue from External Customer [Line Items] | ||
Net sales | 94.6 | 53.3 |
Canada | ||
Revenue from External Customer [Line Items] | ||
Net sales | 31.7 | 15.5 |
Europe | ||
Revenue from External Customer [Line Items] | ||
Net sales | 49.0 | 27.3 |
Rest of World | ||
Revenue from External Customer [Line Items] | ||
Net sales | 13.9 | 10.5 |
Residential pool | ||
Revenue from External Customer [Line Items] | ||
Net sales | 316.1 | 154.1 |
Commercial pool | ||
Revenue from External Customer [Line Items] | ||
Net sales | 7.0 | 7.1 |
Industrial flow control | ||
Revenue from External Customer [Line Items] | ||
Net sales | $ 11.3 | $ 9.0 |
Inventories (Details) - USD ($) $ in Millions |
Apr. 03, 2021 |
Dec. 31, 2020 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 82.2 | $ 67.9 |
Work in progress | 13.9 | 13.5 |
Finished goods | 63.3 | 63.9 |
Total inventory | $ 159.4 | $ 145.3 |
Accrued Expenses and Other Liabilities - Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Millions |
Apr. 03, 2021 |
Dec. 31, 2020 |
---|---|---|
Payables and Accruals [Abstract] | ||
Selling, promotional and advertising | $ 23.8 | $ 25.4 |
Employee compensation and benefits | 22.9 | 34.2 |
Warranty reserve | 21.9 | 16.4 |
Inventory purchases | 22.7 | 13.7 |
Insurance reserve | 8.8 | 9.8 |
Deferred income | 10.5 | 11.7 |
Restructuring reserves | 0.8 | 1.7 |
Derivative liability | 4.6 | 9.3 |
Professional fees | 1.2 | 2.9 |
Payroll taxes | 4.4 | 3.2 |
Other accrued liabilities | 16.4 | 13.5 |
Accrued expenses and other liabilities | $ 138.0 | $ 141.8 |
Accrued Expenses and Other Liabilities - Warranty Reserve (Details) $ in Millions |
3 Months Ended |
---|---|
Apr. 03, 2021
USD ($)
| |
Movement in Standard Product Warranty Accrual [Roll Forward] | |
Beginning balance | $ 16.4 |
Accrual for warranties issued during the period and year ended | 10.1 |
Payments | (4.6) |
Ending balance | $ 21.9 |
Income Taxes (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Apr. 03, 2021 |
Mar. 28, 2020 |
Dec. 31, 2020 |
|
Income Tax Disclosure [Abstract] | |||
Effective tax rate | 29.10% | 22.50% | |
Uncertain tax positions reserve | $ 0 | $ 0 |
Long-Term Debt - Schedule Of Long-Term Debt (Details) - USD ($) $ in Millions |
Apr. 03, 2021 |
Dec. 31, 2020 |
---|---|---|
Line of Credit Facility [Line Items] | ||
Capital lease obligations | $ 9.5 | $ 9.7 |
Long-term debt, subtotal | 1,006.7 | 1,322.7 |
Less: Current portion of the long-term debt | (2.1) | (2.8) |
Less: Unamortized debt issuance costs | (12.8) | (19.6) |
Long-term debt, net | 991.8 | 1,300.3 |
Term Loan | First Lien Term Facility, due August 4, 2024 | ||
Line of Credit Facility [Line Items] | ||
Long-term debt, gross | 820.0 | 958.0 |
Term Loan | Incremental First Lien Term Facility, due August 4, 2026 | ||
Line of Credit Facility [Line Items] | ||
Long-term debt, gross | 128.4 | 150.0 |
Term Loan | Second Lien Term Facility | ||
Line of Credit Facility [Line Items] | ||
Long-term debt, gross | 0.0 | 205.0 |
Revolving Credit Facility | ABL Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Long-term debt, gross | $ 48.8 | $ 0.0 |
Long-Term Debt - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 19, 2021 |
Feb. 19, 2021 |
Apr. 03, 2021 |
Mar. 28, 2020 |
|
Line of Credit Facility [Line Items] | ||||
Term loan repayments | $ 364.6 | $ 3.5 | ||
Loss on extinguishment of debt | 5.8 | $ 0.0 | ||
Term Loan | ||||
Line of Credit Facility [Line Items] | ||||
Term loan repayments | $ 356.6 | $ 8.0 | ||
Term Loan | Second Lien Term Facility | ||||
Line of Credit Facility [Line Items] | ||||
Term loan repayments | 205.0 | |||
Term Loan | First Lien Term Facility, due August 4, 2024 | ||||
Line of Credit Facility [Line Items] | ||||
Term loan repayments | 131.1 | |||
Term Loan | Incremental First Lien Term Facility, due August 4, 2026 | ||||
Line of Credit Facility [Line Items] | ||||
Term loan repayments | $ 20.5 | |||
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Loss on extinguishment of debt | $ 5.8 |
Derivatives and Hedging Transactions - Additional Information (Details) € in Millions, $ in Millions |
Dec. 31, 2017
EUR (€)
|
Apr. 03, 2021
USD ($)
derivative_contract
|
Dec. 23, 2020
USD ($)
derivative_contract
|
---|---|---|---|
Derivative [Line Items] | |||
Number of interest rate derivatives held | derivative_contract | 2 | ||
Interest rate swaps | Interest rate swaps | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ | $ 550.0 | ||
Foreign exchange contract | |||
Derivative [Line Items] | |||
Number of variable rate collar derivative foreign exchange contracts held | derivative_contract | 3 | ||
Derivative foreign exchange contract | $ | $ 30.0 | ||
Cross currency swap | Net investment hedge | |||
Derivative [Line Items] | |||
Derivative, notional amount | € | € 75.0 | ||
Term of derivative contract | 4 years |
Derivatives and Hedging Transactions - Gross Fair Values and Location of Derivative Instruments (Details) - USD ($) $ in Millions |
Apr. 03, 2021 |
Dec. 31, 2020 |
---|---|---|
Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | $ 0.7 | $ 0.0 |
Other Current Assets | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 0.0 | 0.0 |
Other Current Assets | Net investment hedge | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 0.7 | 0.0 |
Accrued Expenses and Other Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability | 4.0 | 9.3 |
Accrued Expenses and Other Liabilities | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability | 4.0 | 6.5 |
Accrued Expenses and Other Liabilities | Net investment hedge | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability | $ 0.0 | $ 2.8 |
Derivatives and Hedging Transactions - Effects of Derivative Instruments by Contract Type in AOCI (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2021 |
Mar. 28, 2020 |
|
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Unrealized Gain (Loss) Recognized in AOCI, Net investment hedge | $ 2.5 | $ 1.6 |
Gain (Loss) Reclassified From AOCI to Earnings, Net investment hedge | 0.0 | 0.0 |
Unrealized Gain (Loss) Recognized in AOCI, Total | 4.3 | (5.4) |
Gain (Loss) Reclassified From AOCI to Earnings, Total | 2.1 | 0.0 |
Interest Expense | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Unrealized Gain (Loss) Recognized in AOCI, Interest rate swaps | 1.8 | (7.0) |
Gain (Loss) Reclassified From AOCI to Earnings, Interest rate swaps | $ 2.1 | $ 0.0 |
Fair Value Measurements (Details) - USD ($) $ in Millions |
Apr. 03, 2021 |
Mar. 28, 2020 |
---|---|---|
Carrying value | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 997.2 | $ 1,313.0 |
Fair value | Level 2, fair value inputs | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 996.9 | $ 1,304.6 |
Segments and Related Information - Additional Information (Details) |
3 Months Ended |
---|---|
Apr. 03, 2021
segment
reporting_unit
| |
Revenue, Major Customer [Line Items] | |
Number of reportable segments | segment | 2 |
North America | |
Revenue, Major Customer [Line Items] | |
Number of reporting units | 3 |
Europe & Rest of World | |
Revenue, Major Customer [Line Items] | |
Number of reporting units | 2 |
Segments and Related Information - Financial Information by Reportable Segment (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2021 |
Mar. 28, 2020 |
|
Revenue, Major Customer [Line Items] | ||
Net sales | $ 334.4 | $ 170.2 |
Gross profit | 159.9 | 75.6 |
Operating income | 79.8 | 12.6 |
Depreciation | 4.7 | 4.6 |
Operating segments | ||
Revenue, Major Customer [Line Items] | ||
Net sales | 334.4 | 170.2 |
Gross profit | 159.9 | 75.5 |
Operating income | 100.7 | 28.2 |
Capital expenditures | 4.8 | 3.9 |
Depreciation | 4.7 | 4.4 |
North America | Operating segments | ||
Revenue, Major Customer [Line Items] | ||
Net sales | 271.5 | 132.4 |
Gross profit | 134.7 | 61.1 |
Operating income | 85.8 | 22.6 |
Capital expenditures | 4.7 | 3.7 |
Depreciation | 4.3 | 4.1 |
Europe & Rest of World | Operating segments | ||
Revenue, Major Customer [Line Items] | ||
Net sales | 62.9 | 37.8 |
Gross profit | 25.2 | 14.4 |
Operating income | 14.9 | 5.6 |
Capital expenditures | 0.1 | 0.2 |
Depreciation | $ 0.4 | $ 0.3 |
Segments and Related Information - Reconciliation of Segment Income to Income from Operations Before Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2021 |
Mar. 28, 2020 |
|
Revenue, Major Customer [Line Items] | ||
Operating income | $ 79.8 | $ 12.6 |
Acquisition and restructuring related expense | 0.0 | 5.5 |
Amortization of intangible assets | 8.8 | 9.5 |
Interest expense, net | 18.3 | 19.6 |
Loss on extinguishment of debt | 5.8 | 0.0 |
Other expense, net | 3.6 | 6.4 |
Total other expense | 27.7 | 26.0 |
Income (loss) from operations before income taxes | 52.1 | (13.4) |
Operating segments | ||
Revenue, Major Customer [Line Items] | ||
Operating income | 100.7 | 28.2 |
Corporate | ||
Revenue, Major Customer [Line Items] | ||
Operating income | $ 12.1 | $ 0.6 |
Stock-based Compensation - Valuation of Stock Option Pricing (Details) |
3 Months Ended | |
---|---|---|
Apr. 03, 2021 |
Mar. 28, 2020 |
|
2021 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.08% | |
Expected life (years) | 6 years | |
Expected dividend yield | 0.00% | |
Expected volatility | 37.00% | |
Stock option, time based | 2017 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.08% | 0.13% |
Expected life (years) | 6 years | 1 year 6 months |
Expected dividend yield | 0.00% | 0.00% |
Expected volatility | 37.00% | 58.00% |
Stock option, market and performance conditions | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.08% | 0.13% |
Expected life (years) | 1 year 6 months | 1 year 6 months |
Expected dividend yield | 0.00% | 0.00% |
Expected volatility | 37.00% | 58.00% |
Stock-based Compensation - Stock Options Activity (Details) |
3 Months Ended |
---|---|
Apr. 03, 2021
$ / shares
shares
| |
Stock option, time based | 2017 Plan | |
Number of Shares | |
Options granted (in shares) | shares | 524,063 |
Options vested (in shares) | shares | 100,718 |
Options forfeited (in shares) | shares | 26,910 |
Weighted-Average Grant-Date Fair Value | |
Options granted (in usd per share) | $ / shares | $ 2.14 |
Options vested (in usd per share) | $ / shares | 1.40 |
Options forfeited (in usd per share) | $ / shares | $ 1.13 |
Stock option, market and performance conditions | |
Number of Shares | |
Options granted (in shares) | shares | 524,063 |
Options forfeited (in shares) | shares | 26,910 |
Weighted-Average Grant-Date Fair Value | |
Options granted (in usd per share) | $ / shares | $ 2.07 |
Options forfeited (in usd per share) | $ / shares | $ 1.13 |
Acquisition and Restructuring Related Expense (Income) - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Apr. 03, 2021 |
Mar. 28, 2020 |
Dec. 31, 2019 |
|
Restructuring and Related Activities [Abstract] | |||
Acquisition and restructuring related expense | $ 0.0 | $ 5.5 | |
Terms for lease back arrangements | one year |
Acquisition and Restructuring Related Expense (Income) - Facility Closure and Other One-Time Termination Benefits (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 28, 2020
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | $ 6.3 |
Restructuring Costs | 4.3 |
Payments for Restructuring | (3.4) |
Ending Balance | 7.2 |
One-time termination benefits | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 6.3 |
Restructuring Costs | 1.3 |
Payments for Restructuring | (0.4) |
Ending Balance | 7.2 |
Facility-related | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 0.0 |
Restructuring Costs | 2.5 |
Payments for Restructuring | (2.5) |
Ending Balance | 0.0 |
Other | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 0.0 |
Restructuring Costs | 0.5 |
Payments for Restructuring | (0.5) |
Ending Balance | $ 0.0 |
Related Party Transactions (Details) - Sponsors - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2021 |
Mar. 28, 2020 |
|
Management fees | ||
Related Party Transaction [Line Items] | ||
Management fee | $ 0.2 | $ 0.2 |
Common Class C | Dividends paid in lieu of management fees | ||
Related Party Transaction [Line Items] | ||
Management fee | $ 0.0 | $ 0.1 |
Subsequent Events (Details) - Subsequent Event - Term Loan - New Term Loan Facility $ in Billions |
May 17, 2021
USD ($)
|
---|---|
Subsequent Event [Line Items] | |
Principal amount | $ 1.0 |
Discount percentage | 0.50% |
LIBOR | |
Subsequent Event [Line Items] | |
Basis spread | 2.75% |
LIBOR | Secured leverage ratio, less than 2.5x proforma adjusted EBITDA | |
Subsequent Event [Line Items] | |
Basis spread | 2.50% |
LIBOR | Minimum | |
Subsequent Event [Line Items] | |
Basis spread | 0.50% |
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