Core Insights - The pool industry is experiencing significant transformation driven by innovation and automation, enhancing comfort, convenience, and design options for homeowners [1][2] Industry Trends - **Aesthetic Evolution**: Modern pool designs are shifting towards sleek, streamlined shapes with dark blue colors replacing softer neutrals, and continuous patterns being favored over tile borders [3] - **Fiberglass Popularity**: Fiberglass pools are gaining traction due to their durability, low maintenance, and rapid installation, often completed within 2-3 days [4] - **Rise of Plunge Pools**: Plunge pools are becoming popular for their compact size and functionality, offering lower water usage and maintenance costs, making them eco-friendly [5][6] - **Pool/Spa Combinations**: Integrated pool and spa designs are in demand, providing dual functionality and luxury, with features like soothing jets and spillover spas enhancing the experience [7] - **Automation Advancements**: Pool automation technologies, such as cloud-based smart monitors, are revolutionizing pool management, offering convenience and efficiency [8][9][10] Company Overview - Latham Group, Inc. is the largest designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand, with over 60 years of experience [12]

Core Viewpoint - Latham Group, Inc. is set to host investor meetings at the Wolfe December Small Group/1x1 Conference on December 10, 2024, with key executives participating in a virtual format [1]. Company Overview - Latham Group, Inc. is the largest designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand [2]. - The company operates with approximately 1,850 employees across 30 locations, showcasing a coast-to-coast operations platform [2].

Core Insights - Latham Group, Inc. has launched a firmware update for its Measure by Latham Pools system, enhancing its capability to measure vinyl pool liners with high accuracy and efficiency [1][2] Company Overview - Latham Group, Inc. is the largest designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand, with over 60 years of experience and operations across 24 locations [7] Product Innovation - The Measure by Latham Pools system utilizes artificial intelligence, HD camera, and LiDAR laser technology to streamline the measurement process for pool liners and covers, allowing a technician to measure an entire pool perimeter in under 30 minutes [2][3] - The system is reported to be up to 3 times faster than traditional measuring methods, significantly reducing lead times for pool cover and liner projects [3] System Components - The Measure by Latham system includes an M1 scanner, transit extendable tripod, 64GB iPad Air, AR Tag/Stick assembly, a 20,000mAh battery, and protective carrying case, all designed for durability and ease of use in various outdoor conditions [3][4] Integration and Efficiency - The Measure App integrates with the Measure device, providing builders with access to a Builder Management Portal for project management, enabling quick access to drawings for quoting and reducing ordering time from days to hours [4] Market Reception - Early adopters of the Measure by Latham system have praised its impact on their business, describing it as a "gamechanger" and expressing satisfaction with the speed and efficiency it brings to the measuring process [5] Industry Positioning - Latham Group positions itself as a leader in innovation within the pool industry, aiming to modernize the measurement process and eliminate the labor-intensive manual measuring methods that have been prevalent [5]

Core Viewpoint - Latham Group, Inc. is launching a new line of plunge pools at the International Pool, Spa, & Patio Expo, aimed at providing luxury and leisure options for various backyard sizes, featuring both fiberglass and vinyl liner options [1][2]. Product Features - The Latham Plunge Pools collection includes six designs that cater to homeowners looking for elegant and compact pool solutions [1][3]. - The plunge pools are designed for easy maintenance, energy efficiency, and reduced chemical usage, making them budget-friendly and suitable for small backyards [2][3]. - Customizable features include tanning ledges, benches, integrated seating, and LED lighting, allowing for personalization [3][8]. Specific Models - Two fiberglass models, Milan (10' x 16') and Enchantment (9' x 17'), offer luxury with features like slip-resistant steps and built-in tanning ledges [4][5]. - The Calypso vinyl liner plunge pools (8' x 16') provide flexible configurations and faster installation, ideal for inground or semi-inground setups [6][7]. Additional Offerings - Latham has also introduced four new designs to its Latham Grand collection of full-sized fiberglass pools, including models like Apollo 14 and Astoria 14, which feature tanning ledges and varying depths [9]. - All Latham pools come with a lifetime warranty and are autocover-ready for enhanced safety [8]. Company Background - Latham Group, Inc. is the largest designer, manufacturer, and marketer of inground residential swimming pools in North America, Australia, and New Zealand, with over 60 years of experience [11].

Core Insights - Latham Group, Inc. is the largest designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand [2] - The company will participate in the Baird 2024 Global Industrial Conference on November 13, 2024, with a fireside chat scheduled at 12:00pm CT [1] - Latham has approximately 1,850 employees across 30 locations, indicating a significant operational scale [2] Company Overview - Latham Group, Inc. is headquartered in Latham, NY, and operates a coast-to-coast platform [2] - The company focuses on the residential swimming pool market, highlighting its leadership position in the industry [2]

Financial Data and Key Metrics Changes - Net sales for Q3 2024 were $150.5 million, down from $160.8 million in the prior year, a decrease of 6.4% primarily due to lower sales volumes [22][23] - Gross margin expanded by 250 basis points to 32.4% despite lower utilization rates, reflecting successful cost reduction initiatives [23][14] - Net income was $5.9 million or $0.05 per diluted share, compared to $6.2 million or $0.05 per diluted share for the prior year's third quarter [25] - Adjusted EBITDA was $29.8 million, a decrease of 17.3% from last year's $36.1 million, with an adjusted EBITDA margin of 19.8% [25][26] Business Line Data and Key Metrics Changes - In-ground pool sales declined by 9.8% in Q3, while liners declined by 8.1%, with covers remaining approximately in line with the prior year due to the acquisition of Coverstar Central [22][23] - Fiberglass pool sales showed relative strength, expected to account for about 75% of total in-ground pool sales in 2024 [11][10] Market Data and Key Metrics Changes - Market conditions indicated an approximate 15% decline in new pool starts for 2024, consistent with expectations [6][31] - The company is focusing on increasing market share in the Sand States, which represent 70% to 75% of all new pool starts [54][55] Company Strategy and Development Direction - The company is investing in sales and marketing initiatives, particularly in the Sand States, to drive awareness and adoption of fiberglass pools and automatic safety covers [17][45] - The acquisition of Coverstar Central is expected to add $20 million in net sales and expand adjusted EBITDA margin by approximately 140 basis points annually [30][12] - The company aims to structurally change its operational model to increase underlying earnings capabilities amid industry recovery [16][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to and exceeding 20% EBITDA margins as market conditions improve [40][38] - The company anticipates that consumer confidence and potential interest rate reductions will encourage pool starts in 2025 [43][44] - Management noted that the operational and financial model has changed, allowing for longer-term margin expansion [16][19] Other Important Information - The company ended Q3 with approximately $60 million in cash after the acquisition of Coverstar Central and repayment of debt [8][27] - The company reported no physical harm to employees from recent hurricanes, although some orders were pushed out due to plant shutdowns [20][50] Q&A Session Summary Question: Can you unpack the structural changes for higher margins? - Management highlighted cost reduction initiatives and increased scale as key factors for achieving higher margins, aiming to return to over 20% EBITDA margins [36][38] Question: How are dealers feeling about next year? - Dealers are optimistic about 2025, expecting improvements in consumer confidence and potential interest rate reductions [41][44] Question: Can you quantify the impact of hurricanes on shipments? - Management estimated a $1.5 million to $2 million impact in Q3 and an equal amount in Q4 due to rescheduled shipments [50] Question: What are the gross margin differentials between product lines? - Management indicated that gross margins across product categories are closely aligned, with no significant differences [51] Question: What is the strategy for the Sand States? - The company is focusing on increasing its presence in the Sand States, which are underrepresented in its portfolio, targeting significant market share growth [54][55] Question: What are the expectations for material and labor inflation in 2025? - Management noted that raw material costs have been stable, with modest inflation expected, but it is too early to provide precise guidance [91]

Latham Group (SWIM) came out with quarterly earnings of $0.07 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.05 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this swimming pool maker would post earnings of $0.04 per share when it actually produced earnings of $0.15, delivering a surprise of 275%.Over the last four quarters, the company has surpassed consensus EPS estimates two times.Latham Group, which belo ...

Q3 2024 Earnings Call November 5, 2024 latham Group SWIM | Nasdaq Listed Disclaimer Forward-looking Statements Certain statements in this presentation constitute forward-looking statements under federal securities laws. These forward-looking statements reflect our views with respect to future events and financial performance as of the date of this presentation or otherwise specified herein. Actual events and results may differ materially from those contemplated by such forward-looking statements due to risk ...

Financial Performance - Third quarter 2024 net sales were $150.5 million, a decrease of $10.3 million or 6.4% from $160.8 million in the prior year's third quarter[4]. - Net income for the third quarter was $5.9 million, or $0.05 per diluted share, compared to $6.2 million, or $0.05 per diluted share, in the prior year[7]. - Adjusted EBITDA for the third quarter was $29.8 million, down $6.3 million or 17.3% from $36.1 million in the prior year's third quarter, with an adjusted EBITDA margin of 19.8%[7]. - Gross profit for the third quarter was $48.7 million, with a gross margin of 32.4%, an increase of 250 basis points from 29.9% in the prior year[5]. - Income from operations decreased to $13.4 million from $18.1 million in the prior year, reflecting a decline of 26.9%[28]. - Net income for the quarter was $5.9 million, compared to $6.2 million in the same quarter last year, representing a decrease of 4.2%[28]. - Adjusted EBITDA for the quarter was $29,829 thousand, down from $36,083 thousand year-over-year, resulting in an adjusted EBITDA margin of 19.8% compared to 22.4%[31]. Sales and Market Performance - Year-to-date fiberglass pool sales are expected to reach approximately 75% of total in-ground pool sales in 2024[2]. - The acquisition of Coverstar Central contributed approximately two months of sales in the third quarter, enhancing the company's safety cover product line[2]. - Net sales for the quarter ended September 28, 2024, were $150.5 million, a decrease of 6.9% compared to $160.8 million for the same quarter in 2023[28]. Expenses and Liabilities - Selling, general, and administrative expenses increased to $28.3 million, up 20.9% from $23.4 million in the prior year, primarily due to increased marketing spending[6]. - Total liabilities increased slightly to $436.8 million from $435.8 million at the end of the previous year[29]. - The company reported an increase in accounts payable to $28.3 million from $17.1 million year-over-year, indicating potential cash flow pressures[29]. Cash Flow and Debt - Total debt at the end of the third quarter was $282.8 million, with a net debt leverage ratio of 2.6, up from 2.1 at the end of the second quarter[13]. - Cash balance as of September 28, 2024, was $59.9 million, down from $102.8 million at the end of 2023[29]. - Cash provided by operating activities was $55,150 thousand, a decrease from $88,123 thousand in the prior year[30]. - Cash paid for interest was $20,481 thousand, compared to $18,538 thousand in the prior year, indicating rising interest expenses[30]. - The net debt leverage ratio increased to 2.6x from 2.1x in the previous quarter, reflecting higher debt levels relative to adjusted EBITDA[32]. Future Outlook and Strategic Initiatives - Full year 2024 guidance for net sales is narrowed to $500-510 million, and adjusted EBITDA guidance is set at $77-83 million[16]. - The company is focused on implementing cost reduction plans and digital transformation initiatives to improve operational efficiency[26]. - Future outlook includes potential non-cash impairment charges for goodwill and the integration of the recent acquisition of Coverstar Central[26]. Capital Expenditures - Capital expenditures totaled $4.0 million in the third quarter, consistent with the company's guidance of approximately $5 million per quarter[14]. - Stock-based compensation expense decreased to $5,187 thousand from $14,887 thousand year-over-year[31].

In-Ground Pool Market in Line with ExpectationsLatham Fiberglass Pool Sales Continue to Show Relative StrengthLean Manufacturing, Value Engineering Initiatives and Improved Procurement Drive Meaningful Cost ReductionsNarrows Full Year 2024 Net Sales and Adjusted EBITDA Guidance Ranges Third Quarter 2024 Financial Highlights: Net sales of $150.5 millionNet income of $5.9 million / Earnings per diluted share of $0.05Adjusted EBITDA of $29.8 million / 19.8% of Net sales Nine Months 2024 Financial Highlights: ...