Latham (SWIM) - 2024 Q4 - Annual Report

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$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$794.2 million from $835.0 million in 2023, reflecting a decline of approximately 4.9$102.8 million in 2023 to $56.4 million in 2024, a decrease of about 45$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$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$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].