Latham (US:SWIM)2025-06-05 14:40Summary 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]