Financial Performance - Latham Group reported net sales of $172.6 million for Q2 2025, an increase of $12.5 million or 7.8% from $160.1 million in Q2 2024, driven by both organic and acquisition-related growth [6][7] - Gross profit for Q2 2025 was $64.0 million, up 20.6% from $53.0 million in the prior year, with a gross margin expansion of 400 basis points to 37.1% [9][10] - Net income for Q2 2025 was $16.0 million, or $0.13 per diluted share, compared to $13.3 million, or $0.11 per diluted share in Q2 2024 [11][12] Product Line Performance - In-ground swimming pools generated $78.6 million in sales for Q2 2025, a slight decrease from $80.9 million in Q2 2024, while covers sales increased by 46% to $37.2 million [9][10] - Liner sales grew by 6% year-over-year, contributing to the overall growth in Q2 [4][9] - Fiberglass pools are projected to represent approximately 75% of the company's full-year 2025 in-ground pool sales, supported by targeted marketing initiatives [3][4] Strategic Initiatives - The company is focusing on increasing awareness and adoption of fiberglass pools and autocovers, particularly in the Sand State markets, which has led to a significant increase in dealer additions [2][3] - Marketing campaigns have successfully driven substantial increases in website traffic and consumer engagement in key target locations [3][4] - The acquisition of Coverstar businesses has contributed to the growth in autocover sales and overall market presence [4][5] Margin and Expense Management - Adjusted EBITDA for Q2 2025 was $39.9 million, reflecting a 15.7% increase from $34.5 million in Q2 2024, with an adjusted EBITDA margin of 23.1% [12][16] - Selling, general, and administrative expenses rose to $31.9 million, primarily due to increased marketing and personnel investments related to the Sand State strategy [10][15] Outlook and Guidance - The company reaffirms its full-year guidance of 8% net sales growth and 19% adjusted EBITDA growth at the midpoints, driven by category share gains in fiberglass pools, autocovers, and liners [19][22] - Latham anticipates approximately 60,000 new U.S. pool starts in 2025, aligning with original estimates despite challenging market conditions [19][20]

Summary of Latham's Conference Call Company Overview - Latham is a leading producer of inground residential pools, specializing in fiberglass pools, vinyl liners, and pool covers [2][4] - The company is the largest manufacturer of inground swimming pools in North America, Australia, and New Zealand [4] Industry Insights - Fiberglass pools are gaining market share over concrete pools due to lower costs and faster installation [2][12] - The U.S. market for inground pools is currently at 62,000 pools sold in 2024, with expectations of a flat market in 2025 [15][42] - Fiberglass pools represent 23% of all pools installed in the U.S., a number that has increased from 16% in 2019 [14][48] - The company holds a 50% market share in the fiberglass category and is the market leader in other categories with shares of 30-40% [6][7] Growth Strategies - Focus on expanding market share in the "sand states" (Florida, Texas, Arizona, California) where fiberglass pools are underrepresented [4][8] - Strategic priorities include increasing customer awareness, expanding the dealer base, and tailoring products to regional market needs [9][24][30] - The company aims to increase fiberglass pool adoption in the sand states, leveraging demographic similarities to Australia, where fiberglass pools hold a 70% market share [23][24] Financial Performance - The company has implemented restructuring projects to improve operating efficiencies and reduce costs [5][41] - Guidance for 2025 includes an 8% increase in net sales, driven by organic growth and contributions from recent acquisitions [42][43] - EBITDA is projected to increase by 19% compared to 2024, with a target of $95 million in EBITDA for 2025 [44] Market Dynamics - The company has seen a consistent annual conversion rate of 100 basis points towards fiberglass pools [48] - Tariffs are expected to create a $20 million headwind in 2025, but the company has mitigated some of this impact through supply chain strategies and price increases [50][51] - There are no significant cancellations or delays reported, as current installations are based on long-term decisions made by cash buyers [52] Key Takeaways - Latham is well-positioned for growth in the fiberglass pool market, particularly in underrepresented regions - The company is actively managing costs while pursuing strategic growth initiatives - Financial projections indicate a strong outlook for the coming years, despite market challenges and external pressures like tariffs [41][44]

Market Position and Strategy - Latham is the largest manufacturer of in-ground swimming pools in North America, Australia, and New Zealand[6] - The company holds the number one share in every subcategory in which it competes[8] - A key strategic priority is accelerating fiberglass share gain in the Sand States[20] - The company aims to outperform the market and achieve significant long-term growth in Net Sales & Adjusted EBITDA[20] Product Portfolio and Market Share - In-Ground Swimming Pools account for 51% of net sales, Liners 23%, and Covers 26%[8] - Fiberglass constitutes 75% of Latham's fiberglass pool sales, while Packaged Pools make up 25%[10] - Latham holds approximately 50% share of the fiberglass category in North America[9] - Replacement sales account for 51% of Liners & Covers sales[12] Financial Outlook - The company's full year 2025 outlook projects net sales between $535 million and $565 million, representing 8% year-over-year growth at the midpoint[49] - Adjusted EBITDA for 2025 is projected to be between $90 million and $100 million, a 19% year-over-year increase at the midpoint[49]

Financial Data and Key Metrics Changes - Net sales for Q1 2025 were $111.4 million, slightly above $110.6 million in Q1 2024, reflecting positive momentum in fiberglass pools and auto covers [18] - Gross margin increased by 190 basis points to approximately 30% from 28% in the prior year, driven by lean manufacturing and value engineering initiatives [19][20] - SG&A expenses rose to $31 million, up from $26 million in Q1 2024, primarily due to strategic investments in sales and marketing [20] - Net loss narrowed to $6 million or $0.05 per diluted share from a net loss of $8 million or $0.07 per diluted share in the prior year [20] Business Line Data and Key Metrics Changes - Inground pool sales were $58 million, down 4% from Q1 2024, impacted by soft industry conditions and adverse weather [19] - Cover sales increased by 18% to $32 million, benefiting from organic growth and acquisitions [19] - Liner sales decreased by 8% to $22 million compared to Q1 2024 [19] Market Data and Key Metrics Changes - Fiberglass pools are expected to gain an additional 1% market share in the in-ground pool sector in 2025, driven by cost advantages and eco-friendly attributes [6][7] - Labor scarcity is seen as a tailwind for fiberglass pools due to lower labor intensity compared to concrete pools [8] Company Strategy and Development Direction - The company is focusing on expanding its presence in Florida, Texas, Arizona, and California, which account for about two-thirds of annual new pool starts [13] - Key priorities include expanding the dealer base, targeting master plan communities, aligning product offerings with market demand, and targeted marketing campaigns [13] - The company aims to significantly increase its market share in the Sand States through strategic partnerships and new product launches [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the market, noting a slight improvement in industry conditions compared to the previous year, but still expecting trough market conditions to persist in 2025 [5][23] - The company maintains its revenue growth expectation of 8% for 2025, with approximately 5% organic growth and 3% from acquisitions [23] Other Important Information - The company has implemented targeted price increases to mitigate the impact of tariffs on raw materials, which represent about 15% to 20% of the materials used in manufacturing [22] - The company is confident in its ability to offset raw material cost increases through strategic pre-purchasing and operational adjustments [22] Q&A Session Summary Question: Outlook for margin expansion and SG&A leverage - Management indicated that SG&A leverage is expected to increase as year-over-year growth sets in, with sales projected to increase by about 8% [27] Question: Reaction to new molds and marketing efforts in Sand States - Management reported positive trends in sales and strong progress in aligning with builders in the Sand States, with expectations for continued improvement [29][30] Question: Risks and opportunities in fiberglass pool demand - Management noted that while fiberglass pools can be installed quickly, the buying decision is a longer process, and they have not seen any slowdown in trends [36][39] Question: Impact of tariffs on pricing and margins - Management quantified the tariff headwind at approximately 350 to 400 basis points, with pricing increases aimed at mitigating the remaining impact [41][42] Question: Strength in auto covers and organic growth - The auto cover business outperformed primarily due to acquisitions, but there was also a positive organic impact [76] Question: Demand environment and potential marketing expense adjustments - Management plans to maintain marketing expenses as part of a long-term strategy, despite potential fluctuations in discretionary spending [78][81]

Financial Data and Key Metrics Changes - Net sales for Q1 2025 were $111.4 million, slightly above $110.6 million in Q1 2024, reflecting positive momentum in fiberglass pools and auto covers [18] - Gross margin increased by 190 basis points to approximately 30% compared to 28% in the prior year, driven by lean manufacturing and value engineering initiatives [19][20] - SG&A expenses rose to $31 million, up from $26 million in Q1 2024, primarily due to strategic investments in sales and marketing [20] - Net loss narrowed to $6 million or $0.05 per diluted share from a net loss of $8 million or $0.07 per diluted share in the prior year [20] Business Line Data and Key Metrics Changes - Inground pool sales were $58 million, down 4% from Q1 2024, impacted by soft industry conditions and adverse weather [19] - Cover sales increased by 18% to $32 million, benefiting from organic growth and acquisitions [19] - Liner sales decreased by 8% to $22 million compared to the first quarter of 2024 [19] Market Data and Key Metrics Changes - Fiberglass pools are expected to gain an additional 1% market share in the inground pool sector in 2025 due to cost advantages and easier installation compared to concrete pools [6][7] - Labor scarcity is seen as a tailwind for fiberglass pools, with 46% of pool builders citing limited access to qualified labor as a significant issue [8] Company Strategy and Development Direction - The company is focusing on expanding its presence in Florida, Texas, Arizona, and California, which account for about two-thirds of annual new pool starts [13] - Key priorities include expanding the dealer base, targeting master plan communities, aligning product offerings with market demand, and targeted marketing campaigns [13] - The company aims to significantly increase its market share in the Sand States through strategic partnerships and new product launches [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the market, noting a slight improvement in industry conditions compared to the previous year, but still expecting trough market conditions to persist in 2025 [5][23] - The company maintains its revenue growth expectation of 8% for 2025, with approximately 5% organic growth and 3% from acquisitions [23] - Management highlighted the importance of brand visibility and engagement, noting that Latham is the most searched brand among major fiberglass manufacturers [12] Other Important Information - The company announced the resignation of its Chief Commercial Officer, but emphasized the strength of its commercial team [17] - Capital expenditures are expected to range between $27 million and $33 million in 2025, reflecting investments in new production modes and facility expansions [22] Q&A Session Summary Question: Outlook for margin expansion and SG&A leverage - Management indicated that SG&A leverage is expected to increase as year-over-year sales grow, with a focus on maintaining flat SG&A expenses in the latter part of the year [27][28] Question: Reaction to new molds and marketing efforts in Sand States - Management reported positive trends in sales and strong progress in aligning with builders in the Sand States, with expectations for continued improvement [30][31] Question: Risks and opportunities in the fiberglass pool market - Management noted that while the decision to purchase a pool is a long-term process, they have not seen any significant slowdown in consumer interest or buying decisions [39][41] Question: Impact of tariffs on costs and pricing strategy - Management quantified the tariff headwind at approximately 350 to 400 basis points, with pricing strategies aimed at mitigating the remaining impact [43][44] Question: Strength of auto cover sales and organic growth - The auto cover business outperformed primarily due to acquisitions, but also saw positive organic growth, with a significant portion of sales coming from existing pools [77] Question: Demand environment and potential adjustments to marketing expenses - Management plans to maintain marketing investments despite potential changes in discretionary spending, emphasizing a long-term growth strategy [80][81]

Financial Data and Key Metrics Changes - Net sales for Q1 2025 were $111.4 million, slightly above $110.6 million in Q1 2024, reflecting positive momentum in fiberglass pools and auto covers [17] - Gross margin increased by 190 basis points to approximately 30% from 28% in the prior year, driven by lean manufacturing and value engineering initiatives [18][19] - SG&A expenses rose to $31 million, up from $26 million in Q1 2024, primarily due to strategic investments in sales and marketing [19] Business Line Data and Key Metrics Changes - Inbound pool sales were $58 million, down 4% from Q1 2024, impacted by soft industry conditions and adverse weather [18] - Cover sales increased by 18% to $32 million, benefiting from organic growth and acquisitions [18] - Liner sales decreased by 8% to $22 million compared to the previous year [18] Market Data and Key Metrics Changes - Fiberglass pools are expected to gain an additional 1% market share in the in-ground pool sector in 2025, driven by cost advantages and easier installation compared to concrete pools [6] - Labor scarcity is seen as a tailwind for fiberglass pools, with 46% of pool builders citing limited access to qualified labor as a significant issue [7] Company Strategy and Development Direction - The company is focusing on expanding its presence in Florida, Texas, Arizona, and California, which account for about two-thirds of annual new pool starts [13] - Key priorities include expanding the dealer base, targeting master plan communities, aligning product offerings with market demand, and targeted marketing campaigns [13] - The company aims to significantly increase its market share in the Sand States through strategic partnerships and new product launches [14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the pool market, maintaining expectations for 2025 revenue growth of 8% at the midpoint [23] - The company anticipates continued progress in fiberglass awareness and adoption initiatives, supported by positive feedback from dealers and increased consumer engagement [22] - Management noted that the current business trends are encouraging, with a solid start to 2025 and expectations for higher year-on-year comparisons in the stronger second and third quarters [24] Other Important Information - The company announced the resignation of its Chief Commercial Officer, with confidence in the strength of its commercial team to continue executing the sales and marketing strategy [16] - Capital expenditures are expected to range between $27 million and $33 million in 2025, reflecting investments in new production modes and facility expansions [21] Q&A Session Summary Question: Outlook for margin expansion and SG&A leverage - Management indicated that SG&A leverage is expected to increase as year-over-year growth sets in, with sales projected to increase by about 8% [27] Question: Reaction to new molds and marketing efforts in Sand States - Management reported positive trends in sales and strong progress with builders in Florida, indicating an acceleration in market share gains [28][30] Question: Risks and opportunities in the fiberglass pool market - Management noted that while the decision to purchase a pool is a long-term process, they have not seen any slowdown in consumer interest or buying decisions [36][39] Question: Impact of tariffs on costs and pricing strategy - Management quantified the tariff headwind at approximately 350 to 400 basis points, with pricing increases aimed at mitigating the remaining impact [41][42] Question: Demand environment and consumer appetite for automatic safety covers - Management confirmed strong demand for auto covers, with high attachment rates on new pools and significant interest in safety features [75][72]

Financial Performance & Outlook - The company projects net sales for 2025 to be between $535 million and $565 million, representing a year-over-year growth of 8% at the midpoint[24] - Adjusted EBITDA for 2025 is projected to be between $90 million and $100 million, a 19% year-over-year increase at the midpoint[24] - Capital expenditures for 2025 are estimated to be between $27 million and $33 million[24] - In Q1 2025, Adjusted EBITDA was $11.139 million, with a margin of 10.0%, compared to $12.293 million and 11.1% in Q1 2024[38] - Net sales in Q1 2025 were $111.420 million compared to $110.629 million in Q1 2024[38] Market Position & Growth Strategy - The company holds the 1 market share in every subcategory in which it competes[7] - Fiberglass constitutes 75% of the company's in-ground pool sales, while packaged pools make up 25%[9] - Fiberglass accounts for 23% of total pool installs, up 600 bps since 2019[9] - Replacement sales account for 51% of the company's liners and covers sales[11] - The company estimates that approximately 180,000 to 200,000 vinyl liners are replaced annually in the U S[13]

Core Insights - Cooper-Standard Holdings Inc. has experienced a significant stock price increase of 43.8% since reporting first-quarter 2025 results, outperforming the S&P 500 index's 1.5% rise, with a remarkable 77% gain over the past month compared to the S&P 500's 12.4% increase [1] Revenue & Earnings - For the quarter ended March 31, 2025, Cooper-Standard reported revenues of $667.1 million, a decrease of 1.4% from $676.4 million a year earlier, primarily due to unfavorable foreign currency exchange rates [2] - The company achieved a net income of $1.6 million, reversing a net loss of $31.7 million from the previous year, with adjusted net income at $3.5 million or 19 cents per diluted share, compared to an adjusted loss of $30.6 million or $1.75 per diluted share last year [2] Profitability Metrics - Gross profit increased to $77.2 million from $61.6 million, raising the margin from 9.1% to 11.6% [3] - Adjusted EBITDA rose to $58.7 million from $29.3 million, increasing the margin from 4.3% to 8.8%, driven by cost efficiencies and restructuring savings [3] Operational Performance - Cooper-Standard achieved a 99% green quality scorecard and a 97% green scorecard for customer service, with 47 plants recording a perfect safety record [4] - Lean manufacturing and purchasing initiatives resulted in $20 million in savings, while restructuring activities contributed an additional $8 million in cost reductions [4] Business Development - The company secured $55 million in net new business awards during the quarter, validating its value proposition across various vehicle platforms [5] Leadership Insights - CEO Jeff Edwards highlighted the quarter as one of the best in terms of operations and customer service, attributing improvements to the alignment around four strategic imperatives [6] - CFO Jon Banas noted improved profitability despite inflationary pressures and consistent cash usage in operations, with capital expenditure of $17.5 million focused on new customer programs [7] Factors Influencing Results - The revenue decline was largely due to a $15 million impact from foreign exchange, partially offset by a favorable $6 million volume and mix shift [8] - EBITDA gains were driven by $20 million in lean savings, $8 million from restructuring, and additional benefits from lower SG&A and favorable FX impacts [8] Financial Position - Cooper-Standard ended the quarter with $140 million in cash and $160 million in undrawn ABL availability, with a net leverage ratio of 4.6X, targeting a reduction below 2X by 2027 [9] Guidance & Outlook - Management reaffirmed expectations for double-digit adjusted EBITDA margins and improving cash flow, while acknowledging potential macro uncertainties related to tariffs and trade policies [10][11] - The company anticipates strong tailwinds from increasing hybrid vehicle production, estimating an 80% surge in content per vehicle opportunity in this segment [12] Product Development - The ongoing commercialization of the eCoFlow Switch Pump, designed for hybrid and electric vehicle thermal management systems, is expected to support long-term growth as production ramps up [13] Summary - Cooper-Standard's first-quarter 2025 results indicate a significant turnaround in profitability and operational execution, supported by lean initiatives, innovation, and trends in hybrid vehicle growth [14]

Core Insights - Red Cat Holdings, Inc. has appointed Shawn Webb as President of FlightWave Aerospace Systems Corporation, effective immediately, to enhance operational strategy and manufacturing capacity [1][4] Company Overview - Red Cat Holdings, Inc. is a drone technology company that integrates robotic hardware and software for military, government, and commercial operations [7] - The company operates through two subsidiaries, Teal Drones and FlightWave Aerospace, and has developed a Family of Systems including the Black Widow™, TRICHON™, and FANG™ [7] Leadership Experience - Shawn Webb brings over 25 years of experience in operational strategy and engineering in the aerospace sector, previously serving as Vice President of Operations at AeroVironment Inc. [2][3] - At AeroVironment, he led significant capacity and revenue expansion in the Loitering Munition Systems Business Segment [2] - Webb has also held senior roles at BEGA North America and Bombardier Aerospace, focusing on continuous improvement and lean manufacturing [3] Strategic Vision - Webb's appointment is seen as crucial for scaling FlightWave's manufacturing capacity and ramping up production of the Edge 130 Blue, which will evolve into TRICHON™ with enhanced capabilities [4][5] - The defense industry is experiencing significant opportunities for small Unmanned Aerial Systems (sUAS), aligning with Red Cat's vision for integrated ISR and precision strike capabilities [5] Product Information - FlightWave Aerospace Systems Corporation manufactures dual-use VTOL drones, including the Edge 130, which is noted for its industry-leading flight endurance and AI capabilities [8]