Latham (US:SWIM)2025-11-04 21:11Financial Performance - Net sales for Q3 2025 were $161.9 million, an increase of 7.6% from $150.5 million in Q3 2024, driven by higher sales volume and tariff-related price increases[8] - Gross profit for Q3 2025 increased by 17.7% to $57.3 million, with gross margin expanding by 300 basis points to 35.4%[10] - Net income for Q3 2025 was $8.1 million, up 37.7% from $5.9 million in Q3 2024, resulting in an earnings per diluted share of $0.07 compared to $0.05 in the prior year[12] - Adjusted EBITDA for Q3 2025 rose by 28.5% to $38.3 million, with an adjusted EBITDA margin of 23.7%, an increase of 390 basis points from the previous year[12] - For the first nine months of 2025, net sales reached $446.0 million, a 5.9% increase from $421.2 million in the prior-year period[13] - Net income for the three fiscal quarters ended September 27, 2025, was $18,135,000, a 60.5% increase from $11,310,000 for the same period in 2024[46] - Adjusted EBITDA for the three fiscal quarters ended September 27, 2025, was $89,354,000, representing a 16.6% increase from $76,598,000 in the prior year[48] - Net sales for the three fiscal quarters ended September 27, 2025, reached $445,962,000, up 5.9% from $421,247,000 in the same period of 2024[48] Guidance and Projections - The company narrowed its net sales guidance for 2025 to a range of $540-$550 million, reflecting a projected 7% growth[20] - Adjusted EBITDA guidance for 2025 is set at $92-$98 million, indicating a 19% growth at the midpoints[20] - Capital expenditures for 2025 are revised to a range of $22-$24 million, down from the previous estimate of $27-$33 million[24] - The company expects fiberglass pools to gain another percentage point of market share, reaching approximately 24% of total U.S. in-ground pool sales in 2025[22] Debt and Liquidity - Latham's net debt leverage ratio improved to 2.3 from 3.0 in the previous quarter, with total debt at $281.1 million[17] - The company reported a net debt of $277,823,000 as of September 27, 2025, with a net debt leverage ratio calculated based on last twelve months of Adjusted EBITDA[41] - Total current assets increased to $240,915,000 from $178,298,000 as of December 31, 2024, reflecting improved liquidity[44] - Total liabilities rose to $436,065,000 from $406,985,000 as of December 31, 2024, indicating a slight increase in leverage[44] - The company’s cash balance increased to $70,518,000 from $56,398,000, enhancing its financial flexibility[44] Operating Expenses - Selling, general, and administrative expenses for the quarter were $28,586,000, slightly up from $28,336,000 in the previous year[42] - The company incurred $4,934,000 in acquisition costs, significantly lower than $64,046,000 in the previous year[46] - Stock-based compensation expense for the three fiscal quarters ended September 27, 2025, was $5,332,000, slightly up from $5,187,000 in the prior year[48] Other Financial Metrics - The net cash provided by operating activities for the three fiscal quarters ended September 27, 2025, was $40,121,000, compared to $55,150,000 in the prior year, reflecting a decrease of 27.3%[46] - The adjusted EBITDA margin improved to 20.0% for the three fiscal quarters ended September 27, 2025, compared to 18.2% in the same period of 2024[48] - Cash at the end of the period was $70,518,000, an increase from $59,862,000 at the end of the same period in 2024[46] - The company experienced a foreign currency loss of $2,878,000 for the three fiscal quarters ended September 27, 2025, compared to a gain of $1,668,000 in the same period of 2024[48] Market Conditions - The company anticipates future operating results to be influenced by macroeconomic conditions and changes in consumer demand[37]