Financial Data and Key Metrics Changes - Fourth quarter revenues increased by 15%, reaching $100 million compared to $87 million in Q4 2024, driven by strong Fiberglass pool sales and increased demand for auto covers [4][17] - Full year 2025 net sales were $546 million, up 7% from $509 million in 2024, despite a decline in the U.S. in-ground pool market [20][24] - Adjusted EBITDA for the fourth quarter was $10 million, up from $3.6 million in the prior year, with an Adjusted EBITDA margin of 11%, a 630 basis point increase year-over-year [19][20] - Full year Adjusted EBITDA was $100 million, up $20 million from $80 million in 2024, with an Adjusted EBITDA margin of 18.3%, a 250 basis point increase [24][25] Business Line Data and Key Metrics Changes - In-ground pool sales for Q4 were $50 million, up 15% year-over-year, with full year sales at $262 million, a 1% increase despite a declining market [18][22] - Auto cover sales grew by 19% in Q4, reaching $37 million, and full year sales were $161 million, up 22% [18][22] - Liner sales increased by 2% in Q4 to $13 million and by 4% for the full year to $123 million, supported by industry-leading lead times and the rollout of the AI-powered measuring tool [18][22][23] Market Data and Key Metrics Changes - Fiberglass pools accounted for 76.5% of in-ground pool sales in 2025, with a year-on-year growth of approximately 2.5% [5][6] - The market penetration of Fiberglass pools in the U.S. increased to approximately 24% in 2025, up from 16% in 2019 [6][7] - Sales volumes from the Sand States remained steady at approximately 17%, with significant growth in Florida offsetting declines in Texas [10][11] Company Strategy and Development Direction - The company plans to increase investment in branding and marketing in 2026 to enhance consumer awareness and drive adoption of Fiberglass pools and auto covers [15][31] - Latham aims to accelerate organic growth while considering select acquisitions to expand geographic reach and revenue synergies [15][27] - The recent acquisition of Freedom Pools is expected to significantly expand market position in Australia and New Zealand, providing immediate earnings accretion [16][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth opportunities in the Sand States, particularly Florida, despite challenging market conditions [30][31] - The company anticipates U.S. in-ground pool starts in 2026 to be approximately in line with 2025 levels, with expectations for continued outperformance in the market [27][30] - Management highlighted the importance of educating consumers about Fiberglass pools to improve conversion rates and sales [94][96] Other Important Information - The company ended the year with a strong cash position of $71 million and total debt of $280 million, maintaining a net debt leverage ratio of 2.1 [25] - Capital expenditures for 2025 were $25 million, with plans for $42 million to $48 million in 2026, including investments in manufacturing facilities [26][28] Q&A Session Summary Question: What excites you about the company and any changes in strategy? - Management is excited about opportunities in the Sand States and plans to focus on lead generation and dealer positioning to drive market development [35][36] Question: Can you unpack the 2026 guidance on a segment basis? - The majority of growth is expected to come from Fiberglass pools, with all product categories projected to grow [40] Question: How are dealer backlogs looking as you enter the year? - Dealer backlogs are reported to be strong, with optimism about the upcoming year despite some weather-related challenges [84] Question: What is the outlook for pricing in 2026? - Pricing is expected to add approximately 2% to the top line, influenced by previous price increases and normal seasonal adjustments [62] Question: What is the impact of interest rates on pool installations? - Lower interest rates are seen as a potential tailwind, but current market conditions are still challenging [63][65]

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]