Latham Group, Inc. Reports Fourth Quarter and Full Year 2024 Financial Results and Provides 2025 Guidance

Core Insights - Latham Group, Inc. reported financial results for Q4 and full year 2024, highlighting a year of substantial achievement despite challenging industry conditions [1][2][6]. Financial Performance - Q4 2024 net sales were $87.3 million, a decrease of $3.6 million or 4.0% from Q4 2023, primarily due to difficult industry conditions [7][41]. - Full year 2024 net sales totaled $508.5 million, down $58.0 million or 10.2% from $566.5 million in 2023, attributed to lower sales volume and a 15% decline in U.S. pool starts [13][19]. - Gross profit for Q4 2024 was $21.4 million, slightly above $21.2 million in the prior year, with a gross margin of 24.6%, an increase of 130 basis points from 23.3% [9][41]. - Full year gross profit was $153.7 million, slightly above $152.9 million in 2023, with a gross margin expansion of 320 basis points to 30.2% [15][19]. Market Position and Strategy - Latham's fiberglass pools represented 75% of in-ground pool sales in 2024, up from 73% in 2023, gaining one percentage point of total market share [3][6]. - The company successfully expanded margins despite lower utilization, with gross margin expansion driven by lean manufacturing and improved procurement activities [4][6]. - The acquisition of Coverstar Central contributed to sales performance and increased awareness of automatic safety covers, enhancing Latham's market position [3][4]. Cash Flow and Financial Flexibility - Operating cash flow for the full year 2024 exceeded $60 million, with a year-end cash balance of $56 million after significant acquisition and debt repayment [5][20]. - Total debt at year-end was $281.5 million, with a net debt leverage ratio of 2.8, indicating a strong balance sheet and financial flexibility for future growth [20][53]. Guidance and Outlook - For 2025, Latham anticipates 8% sales growth and 19% growth in adjusted EBITDA at midpoints, driven by market share gains in fiberglass pools and benefits from the Coverstar Central acquisition [24][26]. - The company expects capital expenditures to increase to approximately $30 million in 2025, reflecting planned initiatives to drive fiberglass adoption [24][26].