Risk Factors Update Summary

• Sales of swimming pools and related products are expected to decline due to economic conditions. The recent decline in demand is forecasted to continue in 2024.
• Inflationary impacts, including on consumer demand for pool products, are a concern. Higher interest rates and inflation have reduced affordability and increased home improvement costs.
• "Operating results for any quarter could incur substantial costs defending and/or settling lawsuits, a portion not covered by insurance."
• Ability to source raw materials and components is critical. Changes in costs and availability could impact manufacturing and increase costs.
• "Affiliates of Principal Stockholders increased ownership from 47% to 57% of outstanding shares."
• Dependence on third-party suppliers for raw materials poses risks. Price increases or deviations in quality could adversely affect net sales and operating results.
• "Ownership by affiliates may lead to concentration risks, affecting businesses that are significant customers."
• Adverse weather conditions could impact sales and lead to variability. Weather is a significant factor affecting sales, especially due to seasonality.
• "Number of Board designees by Pamplona increased from 0 to 9, potentially impacting corporate actions."
• Cybersecurity breaches and data leaks pose risks. Incidents could result in significant costs, operational disruptions, and diversion of resources.
• "Preferred stock issuance could delay or prevent change in control, with Board authority to issue."
• Changes in trade policies could impact financial results. Tariffs and trade agreements changes may affect operations and profitability.
• "Court of Chancery of Delaware is the exclusive forum for disputes, limiting stockholders' options."
• "No anticipated quarterly cash dividends, impacting stockholders' investment decisions."