Latham (US:SWIM)2025-03-04 21:11Financial 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].