Latham Group (SWIM) shares rallied 14.6% in the last trading session to close at $5.73. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 31.1% loss over the past four weeks.Following President Trump's announcement to suspend U.S. tariffs on most countries for 90 days, Latham Group shares soared, reflecting renewed investor optimism.This swimming pool maker is expected to post quarterly loss of $0.04 per share ...

LATHAM, N.Y., April 08, 2025 (GLOBE NEWSWIRE) -- Latham Group, Inc. (NASDAQ:SWIM), the largest designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand, today announced that it will release financial results for the first quarter 2025 on Tuesday, May 6, 2025, after the close of the U.S. market. The Company will hold a conference call to discuss the results that same day at 4:30 PM Eastern Time. We encourage participants to pre-register for the ...

Latham Group (SWIM) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.Since a changing ear ...

Latham Group, Inc. (NASDAQ: SWIM ) happens to be one of the major names in designing, manufacturing, and selling in-ground residential pools and related products. Having spent decades in the industry, it's built a solid presence across North America, Australia, and New Zealand.The mission of Grassroots Trading rests on the following principles: providing objective, unbiased, and balanced research, backed by solid data and completely void of emotional influences or preference for companies; focusing on small ...

Strategic Acquisitions and Growth - Latham has made five strategic acquisitions since 2019, including the purchase of CoverStar Central in August 2024 and Radiant Pools in November 2021, to expand its portfolio of outdoor living products[72]. - The company anticipates continued growth in the fiberglass pool market as consumers shift from concrete to fiberglass pools, which require less maintenance and shorter installation times[68]. - Latham Pool Products acquired Coverstar Central, LLC for a total consideration of $71.5 million, including $66.5 million in cash and $4.9 million in non-cash settlements[444]. - The acquisition resulted in the recognition of $22.0 million in goodwill, attributed to vertical integration and expanded market share[447]. - Coverstar Central contributed net sales of $8.236 million and a net loss of $1.332 million from the acquisition date through December 31, 2024[448]. Sales and Revenue Performance - Net sales for 2024 were $508,520, a decrease of 10.2% from $566,492 in 2023 and a decline of 26.9% from $695,736 in 2022[365]. - For the year ended December 31, 2024, the company's net sales were $520.795 million, down from $586.717 million in 2023[450]. - Net sales for in-ground swimming pools were $259,214,000 in 2024, down from $297,828,000 in 2023, a decrease of about 12.9%[497]. Financial Position and Assets - As of December 31, 2024, total assets decreased to $794.2 million from $835.0 million in 2023, reflecting a decline of approximately 4.9%[363]. - Cash reserves dropped significantly from $102.8 million in 2023 to $56.4 million in 2024, a decrease of about 45%[363]. - The carrying amount for the equity method investment in Premier Pools & Spas was $24.9 million as of December 31, 2024, down from $25.9 million in 2023[457]. - As of December 31, 2024, the company's intangible assets net amounted to $292.913 million, with trade names and trademarks valued at $111.325 million[469]. Profitability and Losses - The net loss for 2024 was $(17,860), compared to a net loss of $(2,388) in 2023 and $(5,694) in 2022, indicating a significant increase in losses[368]. - The company recorded a net loss of $12.634 million for the year ended December 31, 2024, compared to a net income of $4.380 million in 2023[450]. - The company reported a total loss before income taxes of $(8,740,000) in 2024, compared to a loss of $(10,060,000) in 2023, indicating an improvement of approximately 13.1%[498]. Debt and Financing - Long-term debt remained relatively stable at $278.3 million in 2024, down slightly from $280.0 million in 2023[363]. - The company has outstanding borrowings of $288.1 million under its Term Loan as of December 31, 2024, with no borrowings on the Revolving Credit Facility[347]. - The effective interest rate on the term loan was 8.61% as of December 31, 2024, including the impact of the company's interest rate swap[484]. Operational Efficiency and Costs - The company spent $20,116 on property and equipment in 2024, down from $33,189 in 2023[373]. - Total lease expense decreased to $10,772,000 in 2024 from $11,824,000 in 2023, representing a decline of approximately 8.9%[495]. - The company recorded aggregate losses on sales and disposals of property and equipment of $0.1 million in 2024, compared to $0.3 million in 2023[473]. Employee and Operational Metrics - As of December 31, 2024, Latham employed 1,817 full-time employees, with 142 based outside North America[73]. - The company recognized expenses related to employee benefit plans of $1.5 million, $1.4 million, and $1.7 million for the years ended December 31, 2024, 2023, and 2022, respectively[429]. Marketing and Consumer Engagement - Latham's digital marketing strategy has generated significant consumer demand, with ongoing investments aimed at positioning the brand as the preferred choice for homeowners[61]. - The company has developed the Latham Augmented Reality Pool Visualizer app, enhancing consumer engagement and facilitating the pool buying process[63]. Risk Management and Compliance - The company has implemented a comprehensive health and safety program, regularly monitoring its total recordable incident rate to ensure workplace safety[79]. - The company has published annual ESG reports since 2022 to update stakeholders on its progress in managing environmental, social, and governance risks and opportunities[87]. - The company does not currently hedge its foreign currency risk, with significant exposure to the Australian and Canadian dollars[353].

Financial Data and Key Metrics Changes - Net sales for Q4 2024 were $87 million, down 4% from $91 million in Q4 2023, reflecting lower volumes due to industry softness [22] - Full year net sales were $509 million, down 10% compared to $566 million in the prior year, primarily due to lower sales volume [26] - Adjusted EBITDA for Q4 was $4 million, down 63% from $10 million in the prior period, with an adjusted EBITDA margin of 4%, a decline of 670 basis points year over year [25] - Full year adjusted EBITDA was $80 million, compared to $88 million in the prior year, with an adjusted EBITDA margin of 15.8%, up 30 basis points from 15.5% in 2023 [29] Business Line Data and Key Metrics Changes - In-ground pool sales for Q4 were $44 million, down 5% from Q4 2023, while cover sales were $31 million, down 2% [22] - Full year in-ground pool sales were $259 million, down 13% year over year, but above the estimated 15% decline in in-ground pool starts in the US [26] - Liner sales for the full year were $180 million, down 8%, and cover sales were $131 million, down 7% [27] Market Data and Key Metrics Changes - Fiberglass pools represented 24% of US pool starts in 2024, up from 23% in 2023, indicating increased market penetration [7] - Approximately 17% of Latham Group's total fiberglass pool sales in 2024 were in the sand states, which account for about two-thirds of US pool starts [12] Company Strategy and Development Direction - The company is focused on expanding market share in the sand states (Florida, Texas, Arizona, California) and increasing fiberglass pool penetration [11] - Key priorities include expanding the dealer base, targeting master-planned communities, aligning product offerings with market demand, and addressing marketing campaigns specifically to consumers and builders in those markets [13] - The company plans to launch new fiberglass pool models tailored to the preferences of consumers in the sand states [13] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the operating environment, noting that while industry conditions remain challenging, they expect to outperform the market in 2025 [19] - The company anticipates that new US pool starts in 2025 will be similar to 2024 levels, but they are prepared to ramp up quickly to capture any increase in market demand [19] - Management highlighted the importance of strategic investments in growth initiatives, particularly in fiberglass pools and automatic safety covers [11] Other Important Information - The company ended 2024 with a strong financial position, including a cash position of $56 million and total debt of $282 million [30] - Capital expenditures for 2024 were $20 million, with projections for 2025 to be in the range of $27 million to $33 million [36] Q&A Session Summary Question: Breakdown of the 8% sales growth guidance - The 8% sales growth is expected to come from approximately 3% from the full-year run rate effect of acquisitions and about 5% from organic growth driven by fiberglass penetration and the sand states strategy [43][44] Question: Feedback from dealers in the sand states - Dealer feedback has been more positive compared to the previous year, with many reporting flat or increasing backlogs, particularly in the sand states [48][50] Question: Exposure to tariffs and its impact - The company has limited exposure to tariffs, with around $15 million in material buys from impacted countries, and has diversified its supplier base to mitigate risks [59][61] Question: Effectiveness of the sand state strategy - The sand state market is significantly underpenetrated for fiberglass pools, presenting a substantial growth opportunity [75] Question: EBITDA bridge and key drivers - The increase in adjusted EBITDA is expected to be driven by volume leverage, lean value engineering, and the impact of acquisitions, with some headwinds from increased SG&A spending [81][82] Question: Future capital expenditures related to the sand states - The company plans to make smaller capital investments to improve production flow and introduce new models tailored to the sand states market, without the need for large investments like the Kingston plant in the near term [70]

Q4 2024 Earnings Call March 4, 2025 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 risks and other factors that are set fort ...

Core Insights - Latham Group reported a quarterly loss of $0.17 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.09, marking an earnings surprise of -88.89% [1] - The company generated revenues of $87.27 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 2.07%, but down from $90.87 million year-over-year [2] - Latham Group shares have declined approximately 20.8% since the beginning of the year, contrasting with the S&P 500's decline of -0.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.02 on revenues of $114 million, and for the current fiscal year, it is $0.11 on revenues of $528 million [7] - The estimate revisions trend for Latham Group is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Building Products - Miscellaneous industry, to which Latham Group belongs, is currently ranked in the bottom 20% of over 250 Zacks industries, suggesting a challenging environment for stock performance [8] - Another company in the same industry, Quanex Building Products, is expected to report a quarterly loss of $0.06 per share, reflecting a year-over-year change of -133.3% [9]

Financial Performance - Latham Group reported net sales of $87.3 million for Q4 2024, a decrease of 4.0% from $90.9 million in Q4 2023, primarily due to challenging industry conditions [6]. - For the full year 2024, net sales totaled $508.5 million, down 10.2% from $566.5 million in 2023, attributed to a 15% decline in U.S. pool starts [12]. - Latham's adjusted EBITDA for Q4 2024 was $3.6 million, a decline of 63.4% from $9.9 million in Q4 2023, with an adjusted EBITDA margin of 4.2% [11]. - The full year 2024 adjusted EBITDA was $80.2 million, down 8.9% from $88.0 million in 2023, with an adjusted EBITDA margin of 15.8% [17]. - Net sales for the fiscal quarter ended December 31, 2024, were $87,273,000, a decrease of 4% compared to $90,867,000 for the same period in 2023 [39]. - Net loss for the year ended December 31, 2024, was $17,860,000 compared to a net loss of $2,388,000 for the year ended December 31, 2023 [43]. - The company reported a net loss of $29,170,000 for the fiscal quarter ended December 31, 2024, compared to a net income of $111,000 in the same quarter of 2023 [39]. - Basic net loss per share attributable to common stockholders was $(0.25) for the quarter ended December 31, 2024, compared to $0.00 for the same period in 2023 [39]. - Adjusted EBITDA for the year ended December 31, 2024, was $80,219,000, with an adjusted EBITDA margin of 15.8% [45]. - Net sales for the year ended December 31, 2024, were $508,520,000, down from $566,492,000 in 2023 [45]. Cash Flow and Debt Management - The company ended 2024 with a cash balance of $56 million after spending approximately $65 million on the Coverstar Central acquisition and repaying $21 million in debt [6]. - Cash and cash equivalents decreased to $56,398,000 as of December 31, 2024, from $102,763,000 in 2023, indicating a need for improved cash flow management [41]. - Net cash provided by operating activities decreased to $61,307,000 from $116,369,000 year-over-year [43]. - Total debt as of December 31, 2024, was $281,521,000, resulting in a net debt leverage ratio of 2.8x [49]. - Cash paid for interest in 2024 was $24,894,000, slightly down from $25,747,000 in 2023 [43]. - The company’s long-term debt, net of discount and issuance costs, was $278,271,000 as of December 31, 2024, slightly down from $279,951,000 in 2023 [41]. Operational Efficiency and Strategic Initiatives - The company achieved a gross margin of 30.2% for the full year 2024, an increase of 320 basis points from 27.0% in the prior year, driven by production efficiencies and improved procurement [14]. - The company is focusing on digital transformation and lean manufacturing activities to enhance operational efficiency and reduce costs [35]. - Latham anticipates 8% sales growth and 19% growth in adjusted EBITDA for 2025, driven by market share gains in fiberglass pools and the benefits of the Coverstar Central acquisition [22]. - Capital expenditures for 2025 are expected to be approximately $30 million, an increase of $10 million over 2024 levels, to support fiberglass adoption initiatives [22]. - The company incurred $64,527,000 in acquisitions of businesses, net of cash acquired, during the year [43]. Market Conditions and Future Outlook - Latham's leadership in fiberglass pools contributed to outperforming the U.S. pool market, which saw a 15% decline in pool starts in 2024 [4]. - The company plans to manage to new U.S. pool starts in 2025 that approximate 2024 levels, while being prepared to ramp up quickly to capture any increase in market demand [21]. - Future outlook includes addressing macroeconomic challenges and potential impacts on consumer demand, with a commitment to strategic acquisitions and market expansion [35]. - The company experienced a significant unrealized foreign currency loss of $6,223,000 in 2024 compared to a gain of $110,000 in 2023 [43]. - Total current assets decreased to $178,298,000 as of December 31, 2024, down from $238,617,000 in 2023, primarily due to a reduction in cash and inventories [41]. - Total liabilities decreased to $406,985,000 as of December 31, 2024, compared to $435,803,000 in 2023, reflecting improved financial management [41]. - Stock-based compensation expense for the year was $7,392,000, down from $18,804,000 in the previous year [45].

Core Insights - Latham Group, Inc. reported financial results for Q4 and full year 2024, highlighting a year of substantial achievement despite challenging industry conditions [1][2][6]. Financial Performance - Q4 2024 net sales were $87.3 million, a decrease of $3.6 million or 4.0% from Q4 2023, primarily due to difficult industry conditions [7][41]. - Full year 2024 net sales totaled $508.5 million, down $58.0 million or 10.2% from $566.5 million in 2023, attributed to lower sales volume and a 15% decline in U.S. pool starts [13][19]. - Gross profit for Q4 2024 was $21.4 million, slightly above $21.2 million in the prior year, with a gross margin of 24.6%, an increase of 130 basis points from 23.3% [9][41]. - Full year gross profit was $153.7 million, slightly above $152.9 million in 2023, with a gross margin expansion of 320 basis points to 30.2% [15][19]. Market Position and Strategy - Latham's fiberglass pools represented 75% of in-ground pool sales in 2024, up from 73% in 2023, gaining one percentage point of total market share [3][6]. - The company successfully expanded margins despite lower utilization, with gross margin expansion driven by lean manufacturing and improved procurement activities [4][6]. - The acquisition of Coverstar Central contributed to sales performance and increased awareness of automatic safety covers, enhancing Latham's market position [3][4]. Cash Flow and Financial Flexibility - Operating cash flow for the full year 2024 exceeded $60 million, with a year-end cash balance of $56 million after significant acquisition and debt repayment [5][20]. - Total debt at year-end was $281.5 million, with a net debt leverage ratio of 2.8, indicating a strong balance sheet and financial flexibility for future growth [20][53]. Guidance and Outlook - For 2025, Latham anticipates 8% sales growth and 19% growth in adjusted EBITDA at midpoints, driven by market share gains in fiberglass pools and benefits from the Coverstar Central acquisition [24][26]. - The company expects capital expenditures to increase to approximately $30 million in 2025, reflecting planned initiatives to drive fiberglass adoption [24][26].