Latham (US:SWIM)2026-03-04 22:26Supplier Relationships and Raw Materials - The company maintains strong relationships with suppliers and believes alternative sources for raw materials are available, although disruptions may occur during transitions[57]. Marketing and Consumer Engagement - The "direct-to-homeowner" digital marketing strategy has significantly increased consumer demand for fiberglass pools, positioning the company as a preferred brand[58]. - Continued investment in consumer engagement has driven historical sales growth, with a focus on generating high-quality leads through digital platforms and mobile apps[59]. - The company has a sales organization across North America, Australia, and New Zealand, focusing on dealer growth and increased market penetration through enhanced marketing efforts[60]. - The establishment of "Latham University" provides training and support to dealers, improving lead conversion rates and installation quality[61]. Strategic Acquisitions - The company has made seven strategic acquisitions since 2019, including the purchase of Coverstar Central and Radiant Pools, to expand its portfolio of outdoor living products[67]. Employee Engagement and Development - As of December 31, 2025, the company employed 1,804 full-time employees, with 137 based outside North America, emphasizing the importance of employee engagement and development[68]. Sustainability Initiatives - The company recognizes the need for sustainability and has implemented a formal sustainability program since 2021, with annual reports to update stakeholders on progress[78][80]. Seasonal Business Trends - The business is seasonal, with peak sales typically occurring in the second and third quarters, influenced by weather conditions[65]. Market Position and Competition - The company holds a leading position in North America across all product categories, competing effectively on brand recognition, quality, and product characteristics[63]. Financial Position and Debt Management - As of December 31, 2025, the company had outstanding borrowings of $284.8 million under its Term Loan and no borrowings on the Revolving Credit Facility[311]. - The company fixed its SOFR borrowing rate at 3.92% on a notional amount of $140.0 million through an interest rate swap[311]. - Approximately 50.8% of the company's debt, or $144.8 million, is subject to variable rates, with a 1.0% change in the effective interest rate impacting annual interest expense by approximately $1.5 million[311]. Customer Concentration and Credit Risk - One customer represented approximately 22.6% of the company's net sales for the year ended December 31, 2025, with outstanding trade receivables of $5.9 million[313]. - The company does not hedge its foreign currency risk, with significant exposure to the Australian and Canadian dollars[316]. - A 10% change in the exchange rate between the U.S. dollar and the Australian or Canadian dollar is not expected to materially impact the company's operating results or financial position[316]. - The company has not historically sustained any credit losses related to cash and believes its trade receivables credit risk exposure is limited[312]. Risk Management - The company manages market risks through normal operating and financing activities, including interest rate and foreign currency exchange rate risks[310]. - The company has bank deposits in excess of insurance limits from time to time, but has not faced significant credit risk related to these deposits[312]. Forward-Looking Statements - The company anticipates that future events and developments may cause its views and forward-looking statements to change[84].