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Core Insights - Latham, The Pool Company has been recognized as one of America's Greatest Companies 2025 by Newsweek, highlighting its commitment to innovation, sustainability, and employee experience [1][3]. Company Performance - The recognition is based on a comprehensive study evaluating companies with over $75 million in annual revenue, involving over 151,000 employees and 3.3 million company reviews on various performance metrics [2]. - Latham's selection was influenced by its financial performance, employee satisfaction, innovation, and sustainability efforts [1][2]. Sustainability Efforts - Latham achieved a 50% reduction in waste from fiberglass pool production in 2023 compared to 2022, and recycled thousands of tons of materials, including scrap vinyl, galvanized steel, and aluminum [3]. - The company expanded energy-efficient LED lighting to nearly half of its fiberglass facilities, contributing to its environmental stewardship [3]. Employee Commitment - Latham's President and CEO emphasized the company's dedication to fostering a culture that empowers employees and drives innovation, which is reflected in the recognition received [3][4]. - The company aims to build brand trust, which is crucial for consumer decisions in the outdoor products market [4]. Company Overview - Latham Group, Inc. is the largest designer, manufacturer, and marketer of in-ground residential swimming pools and pool accessories in North America, Australia, and New Zealand, with over 60 years of experience [5].

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 [1] - The company is headquartered in Latham, NY, and operates with approximately 1,850 employees across 30 locations [1] Investor Conferences - On August 13, 2025, the President and CEO, Scott Rajeski, along with CFO Oliver Gloe, will host investor meetings at the Barclays 2025 Housing, Building, and Building Products Conference in New York, NY [2] - On August 19, 2025, CFO Oliver Gloe will host investor meetings at the Wolfe Research August Small Group/1x1 Conference, which will take place virtually [2]

Latham Group (SWIM) came out with quarterly earnings of $0.14 per share, beating the Zacks Consensus Estimate of $0.13 per share. This compares to earnings of $0.15 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +7.69%. A quarter ago, it was expected that this swimming pool maker would post a loss of $0.05 per share when it actually produced a loss of $0.03, delivering a surprise of +40%. Over the last four quarters, the com ...

Financial Data and Key Metrics Changes - Year-on-year revenue growth of 7.8% and adjusted EBITDA growth of 15.7% were reported for the second quarter [5][19] - Net sales for the second quarter were $173 million, up from $160 million, reflecting both organic and acquisition-related growth [16] - Adjusted EBITDA increased to $39.9 million, with an adjusted EBITDA margin of 23.1%, a 160 basis point improvement [19][20] Business Line Data and Key Metrics Changes - In-ground pool sales were $79 million, down 2.9%, impacted by adverse weather conditions [17] - Cover sales increased to $37 million, reflecting a 46% growth due to acquisitions and organic growth [17] - Liner sales grew by 5.8% to $57 million, driven by the adoption of the proprietary AI measuring tool [17][18] Market Data and Key Metrics Changes - Fiberglass pools are projected to account for approximately 75% of in-ground pool sales for the full year [6] - The company expects fiberglass pools to gain another 1% market penetration in 2025 [7] - The Sand States (Florida, Texas, Arizona, California) represent a substantial growth opportunity, accounting for two-thirds of annual new pool starts in the U.S. [12] Company Strategy and Development Direction - The company is focused on increasing awareness and adoption of fiberglass pools and auto covers, particularly in the Sand States [12][14] - Recent acquisitions have strengthened the margin profile and contributed to sales growth [6][22] - Lean manufacturing and value engineering initiatives are expected to drive production efficiencies and margin improvements [6][14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the second half of the year despite challenging market conditions [24] - The company reconfirmed its 2025 guidance of 8% net sales growth and 19% adjusted EBITDA growth at the midpoint [23][24] - Management noted that the current pool market is in a trough period, with expectations of a rebound as conditions improve [26] Other Important Information - The company has integrated recent acquisitions fully and is seeing anticipated benefits in sales and margins [22] - The balance sheet remains strong, with cash of $27 million at the end of the quarter and a net debt leverage ratio of 3.0 [20][21] - The company plans to invest between $27 million to $33 million in capital expenditures for 2025 [21] Q&A Session Summary Question: How is the company measuring success in marketing campaigns? - Management indicated that the focus is on driving brand awareness and dealer capacity, with significant increases in website activity and leads generated from marketing efforts [34][36] Question: Update on the Sand State strategy? - Management reported good progress in recruiting new dealers and entering master plan communities, with expectations for increased revenue from these markets [38][41] Question: Were fiberglass pool sales affected by weather? - Management confirmed that fiberglass pool sales were impacted but showed a positive trajectory in June and July as weather improved [46][48] Question: What is the outlook for gross margins? - Management expressed satisfaction with the gross margin performance, attributing improvements to acquisitions and lean manufacturing initiatives [49][50] Question: How is labor availability affecting installation? - Management noted no issues with labor availability for fiberglass pool installations, highlighting the efficiency of fiberglass compared to traditional materials [70][72] Question: What are the capital allocation priorities going forward? - Management outlined priorities as investing in the business, pursuing M&A opportunities, and debt repayment [88][90]

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 risks and other factors that are set forth in our Annual Report on Form 10-K and subsequ ...

[Overview of Q2 2025 Performance](index=1&type=section&id=Latham%20Group%2C%20Inc.%20Reports%20Second%20Quarter%202025%20Financial%20Results) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Latham Group reported strong financial results for the second quarter and first six months of 2025, highlighted by net sales growth, significant gross margin expansion, and a double-digit increase in Adjusted EBITDA for the quarter Q2 2025 Financial Highlights | Metric | Value | | :--- | :--- | | Net Sales | $172.6 million | | Net Income | $16.0 million | | Net Income per Diluted Share | $0.13 | | Adjusted EBITDA | $39.9 million | | Adjusted EBITDA Margin | 23.1% | Six Months 2025 Financial Highlights | Metric | Value | | :--- | :--- | | Net Sales | $284.1 million | | Net Income | $10.0 million | | Net Income per Diluted Share | $0.08 | | Adjusted EBITDA | $51.0 million | | Adjusted EBITDA Margin | 18.0% | - The company reconfirmed its full-year guidance, which includes midpoints of **8% net sales growth** and **19% Adjusted EBITDA growth**[4](index=4&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) The CEO attributed strong Q2 performance to successful execution of key strategies, including driving fiberglass pool and autocover adoption, expanding in Sand State markets, and improving margins through operational efficiencies and acquisitions - Strategic focus areas include driving awareness and adoption of fiberglass pools and autocovers, expanding in Sand State markets, and improving margins through lean manufacturing and acquisitions[2](index=2&type=chunk) - Fiberglass pool sales are projected to be about **75%** of the company's full-year 2025 in-ground pool sales, with a significant number of new dealers added in the Sand States[3](index=3&type=chunk) - Autocover sales increased by **46%** in Q2, driven by organic growth and the acquisition of Coverstar businesses, while liner sales also grew by **6%** year-over-year[5](index=5&type=chunk) - Gross margin expanded by **400 basis points** to **37.1%** due to higher volumes, lean manufacturing initiatives, and recent acquisitions, with Adjusted EBITDA margin growing by **160 basis points** to **23.1%**[6](index=6&type=chunk) [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) [Second Quarter 2025 Results](index=2&type=section&id=Second%20Quarter%202025%20Results) In Q2 2025, Latham Group's net sales increased 7.8% year-over-year to $172.6 million, driven by both organic and acquisition-related growth, with gross profit rising 20.6% to $64.0 million, and net income growing to $16.0 million [Overall Performance](index=2&type=section&id=Q2%20Overall%20Performance) The company achieved broad-based growth in Q2 2025, with a 7.8% increase in net sales and a 20.6% rise in gross profit, while net income and Adjusted EBITDA saw significant year-over-year growth of 20.3% and 15.7% respectively Q2 2025 vs Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $172.6M | $160.1M | +7.8% | | Gross Profit | $64.0M | $53.0M | +20.6% | | Gross Margin | 37.1% | 33.1% | +400 bps | | SG&A Expenses | $31.9M | $26.6M | +20.1% | | Net Income | $16.0M | $13.3M | +20.3% | | Adjusted EBITDA | $39.9M | $34.5M | +15.7% | | Adjusted EBITDA Margin | 23.1% | 21.5% | +160 bps | - The increase in Selling, general, and administrative (SG&A) expenses was primarily driven by investments in marketing for the Sand State strategy, a new ERP system, and the inclusion of Coverstar Central[10](index=10&type=chunk) [Net Sales by Product Line](index=2&type=section&id=Q2%20Net%20Sales%20by%20Product%20Line) In the second quarter, sales growth was led by the Covers segment, which increased 46.0% year-over-year, and the Liners segment, which grew 6.0%, while sales for In-ground Swimming Pools experienced a slight decline of 2.9% Q2 Net Sales by Product Line (in thousands) | Product Line | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | In-ground Swimming Pools | $78,601 | $80,958 | -2.9% | | Covers | $37,245 | $25,503 | +46.0% | | Liners | $56,793 | $53,661 | +6.0% | | **Total** | **$172,639** | **$160,122** | **+7.8%** | [Six Months 2025 Results](index=3&type=section&id=Six%20Months%202025%20Results) For the first six months of 2025, net sales grew 4.9% to $284.1 million, gross margin expanded by 320 basis points to 34.1%, and net income nearly doubled to $10.0 million, with Adjusted EBITDA increasing by 9.1% to $51.0 million Six Months 2025 vs 2024 Performance | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $284.1M | $270.8M | +4.9% | | Gross Profit | $96.8M | $83.6M | +15.8% | | Gross Margin | 34.1% | 30.9% | +320 bps | | Net Income | $10.0M | $5.4M | +85.2% | | Adjusted EBITDA | $51.0M | $46.8M | +9.1% | | Adjusted EBITDA Margin | 18.0% | 17.3% | +70 bps | - Similar to the quarterly results, the six-month increase in SG&A expenses was primarily due to investments in the Sand State strategy, a new ERP system, and the inclusion of Coverstar Central[15](index=15&type=chunk) [Balance Sheet, Cash Flow, and Liquidity](index=3&type=section&id=Balance%20Sheet%2C%20Cash%20Flow%2C%20and%20Liquidity) As of Q2 2025, Latham Group reported **$26.9 million** in cash, **$281.5 million** in total debt with a **3.0** net debt leverage ratio, and generated **$36.0 million** in operating cash flow for the quarter - Ended Q2 2025 with **$26.9 million** in cash[17](index=17&type=chunk) - Total debt stood at **$281.5 million**, with a net debt leverage ratio of **3.0**[18](index=18&type=chunk) - Net cash provided by operating activities was **$36.0 million** in Q2 2025[17](index=17&type=chunk) - Capital expenditures were **$6.8 million** in Q2 2025 and **$10.3 million** for the first half of the year[18](index=18&type=chunk) [Business Outlook](index=4&type=section&id=Business%20Outlook) [Summary and Outlook](index=4&type=section&id=Summary%20and%20Outlook%20Narrative) Management expressed confidence in outperforming the market and reaffirmed full-year 2025 guidance, projecting growth through market share gains in fiberglass pools, autocovers, and liners, supported by competitive advantages and recent acquisitions despite an estimated 60,000 new U.S. pool starts - The company continues to project approximately **60,000** new U.S. pool starts in 2025, consistent with original estimates[19](index=19&type=chunk) - Guidance for **8% net sales growth** and **19% Adjusted EBITDA growth** (at midpoints) is driven by expected category share gains and contributions from the Coverstar Central acquisition[19](index=19&type=chunk) - Key competitive advantages cited include high-quality products, the industry's largest manufacturing footprint, and a strong network of dealers and contractors[20](index=20&type=chunk) [Full-Year 2025 Guidance](index=4&type=section&id=FY%202025%20Guidance%20Ranges) Latham Group reaffirmed its full-year 2025 financial guidance, projecting net sales in the range of $535 million to $565 million and Adjusted EBITDA between $90 million and $100 million, with capital expenditures expected to be between $27 million and $33 million FY 2025 Guidance | Metric | Low | High | | :--- | :--- | :--- | | Net Sales | $535 million | $565 million | | Adjusted EBITDA | $90 million | $100 million | | Capital Expenditures | $27 million | $33 million | [Appendix: Financial Statements and Reconciliations](index=9&type=section&id=Appendix%3A%20Financial%20Statements%20and%20Reconciliations) [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The income statement reflects year-over-year increases in net sales and gross profit for both Q2 and the first six months of 2025, with net income rising to $16.0 million in Q2 and $10.0 million for the six-month period Condensed Consolidated Statements of Operations (in thousands) | | Fiscal Quarter Ended | Two Fiscal Quarters Ended | | :--- | :--- | :--- | | | **June 28, 2025** | **June 29, 2024** | **June 28, 2025** | **June 29, 2024** | | **Net sales** | **$172,639** | **$160,122** | **$284,059** | **$270,751** | | Gross profit | $63,963 | $53,022 | $96,844 | $83,611 | | Income from operations | $24,724 | $20,006 | $19,793 | $17,933 | | **Net income** | **$15,980** | **$13,279** | **$10,018** | **$5,415** | | Diluted EPS | $0.13 | $0.11 | $0.08 | $0.05 | [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 28, 2025, the balance sheet reported total assets of $822.1 million, total liabilities of $423.7 million, a decrease in cash to $26.9 million, and an increase in total stockholders' equity to $398.4 million Key Balance Sheet Items (in thousands) | Account | June 28, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $26,943 | $56,398 | | Total current assets | $214,368 | $178,298 | | **Total assets** | **$822,142** | **$794,207** | | Total current liabilities | $89,868 | $70,977 | | Long-term debt, net | $278,243 | $278,271 | | **Total liabilities** | **$423,714** | **$406,985** | | **Total stockholders' equity** | **$398,428** | **$387,222** | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash used in operating activities was $10.9 million, a reversal from the prior year, leading to a $29.5 million decrease in the company's cash balance Six Months Ended Cash Flow Summary (in thousands) | Cash Flow Activity | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(10,905) | $17,911 | | Net cash used in investing activities | $(15,278) | $(9,833) | | Net cash used in financing activities | $(3,580) | $(20,005) | | **Net decrease in cash** | **$(29,455)** | **$(11,995)** | | Cash at end of period | $26,943 | $90,768 | [Non-GAAP Reconciliations](index=12&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations for the non-GAAP financial measures used in the report, specifically Adjusted EBITDA and the Net Debt Leverage Ratio, bridging them to the most directly comparable GAAP figures [Adjusted EBITDA Reconciliation](index=12&type=section&id=Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA for Q2 2025 was $39.9 million and $51.0 million for the first six months, reconciled from net income by adjusting for items such as depreciation, interest, and stock-based compensation Adjusted EBITDA Reconciliation Summary (in thousands) | | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net income** | **$15,980** | **$13,279** | **$10,018** | **$5,415** | | Depreciation and amortization | $12,697 | $10,593 | $25,097 | $20,967 | | Interest expense, net | $7,149 | $6,013 | $13,520 | $10,995 | | Income tax expense | $5,130 | $442 | $1,051 | $974 | | Stock-based compensation | $1,381 | $2,100 | $3,352 | $3,343 | | Other adjustments | $(1,425) | $2,150 | $(951) | $5,075 | | **Adjusted EBITDA** | **$39,887** | **$34,478** | **$51,027** | **$46,770** | | **Adjusted EBITDA margin** | **23.1%** | **21.5%** | **18.0%** | **17.3%** | [Net Debt Leverage Ratio](index=13&type=section&id=Net%20Debt%20Leverage%20Ratio) As of June 28, 2025, the company's Net Debt was calculated at $254.6 million, resulting in a Net Debt Leverage Ratio of 3.0 based on a Last Twelve Months (LTM) Adjusted EBITDA of $84.5 million Net Debt Leverage Ratio Calculation (as of June 28, 2025, in thousands) | Metric | Value | | :--- | :--- | | Total Debt | $281,493 | | Less: Cash | $(26,943) | | **Net Debt** | **$254,550** | | LTM Adjusted EBITDA | $84,476 | | **Net Debt Leverage Ratio** | **3.0** |

Financial Performance - Latham Group reported net sales of $172.6 million for Q2 2025, an increase of $12.5 million or 7.8% from $160.1 million in Q2 2024, driven by both organic and acquisition-related growth [6][7] - Gross profit for Q2 2025 was $64.0 million, up 20.6% from $53.0 million in the prior year, with a gross margin expansion of 400 basis points to 37.1% [9][10] - Net income for Q2 2025 was $16.0 million, or $0.13 per diluted share, compared to $13.3 million, or $0.11 per diluted share in Q2 2024 [11][12] Product Line Performance - In-ground swimming pools generated $78.6 million in sales for Q2 2025, a slight decrease from $80.9 million in Q2 2024, while covers sales increased by 46% to $37.2 million [9][10] - Liner sales grew by 6% year-over-year, contributing to the overall growth in Q2 [4][9] - Fiberglass pools are projected to represent approximately 75% of the company's full-year 2025 in-ground pool sales, supported by targeted marketing initiatives [3][4] Strategic Initiatives - The company is focusing on increasing awareness and adoption of fiberglass pools and autocovers, particularly in the Sand State markets, which has led to a significant increase in dealer additions [2][3] - Marketing campaigns have successfully driven substantial increases in website traffic and consumer engagement in key target locations [3][4] - The acquisition of Coverstar businesses has contributed to the growth in autocover sales and overall market presence [4][5] Margin and Expense Management - Adjusted EBITDA for Q2 2025 was $39.9 million, reflecting a 15.7% increase from $34.5 million in Q2 2024, with an adjusted EBITDA margin of 23.1% [12][16] - Selling, general, and administrative expenses rose to $31.9 million, primarily due to increased marketing and personnel investments related to the Sand State strategy [10][15] Outlook and Guidance - The company reaffirms its full-year guidance of 8% net sales growth and 19% adjusted EBITDA growth at the midpoints, driven by category share gains in fiberglass pools, autocovers, and liners [19][22] - Latham anticipates approximately 60,000 new U.S. pool starts in 2025, aligning with original estimates despite challenging market conditions [19][20]

Core Insights - Latham Group, Inc. has appointed Jeffrey J. Jackson as an independent member of its Board of Directors and as a member of the Audit Committee, increasing the board size from eight to nine directors [1][2]. Group 1: Appointment Details - Jeffrey J. Jackson is currently the CEO of Cabinetworks Group, Inc., the largest privately-owned kitchen cabinet manufacturer in the U.S. [2] - Jackson has a notable background, having served as President and CEO of PGT Innovations, Inc., where he led the company to significant growth and national brand recognition in the fenestration industry [2][3]. - His previous executive roles include positions at The Hershey Company, Mrs. Smith's Bakeries, and The Coca-Cola Company, showcasing a diverse experience across various sectors [2]. Group 2: Board Commentary - James C. Cline, Chairman of the Latham Board, expressed enthusiasm about Jackson's appointment, highlighting his visionary leadership and extensive expertise in executive management and finance [3]. - Cline noted that Jackson's broad sector knowledge and industry relationships will provide valuable operational and strategic experience to support Latham's growth and competitive positioning [3]. Group 3: 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 [4]. - The company operates with approximately 1,850 employees across 30 locations, indicating a robust operational platform [4].

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 [4] - The company operates with approximately 1,850 employees across 30 locations [4] Financial Results Announcement - Latham Group will release its financial results for the second quarter of 2025 on August 5, 2025, after the close of the U.S. market [1] - A conference call to discuss the results will take place on the same day at 4:30 PM Eastern Time [1] Conference Call Details - Participants are encouraged to pre-register for the conference call via a provided link [2] - A live audio webcast of the conference call will be available online [3] - For those unable to listen live, an archived webcast will be accessible approximately two hours after the call, lasting until August 5, 2026 [3]