Latham (US:SWIM)2024-11-05 21:10Financial 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].