Latham Group, Inc. · NASDAQ:SWIM
Latham — Q2 2023 Earnings Presentation
16 slides from Latham's earnings presentation, Aug 8, 2023
Slide 1: Q2 2023 Earnings Call
Q2 2023 Earnings Call August 8, 2023
Slide 2: Disclaimer
Disclaimer Forward-looking Statements Certain statements in this presentation constitute forward-looking statements under federal securities laws. These forward-looking statements reflect our views with respect to future events and financial performance as of the date of this presentation or otherwi
Slide 3: Q2 2023 Highlights
Q2 2023 Highlights Delivered sequential improvement in net sales, gross margin, and adjusted 1 EBITDA margin in Q2’23 vs. Q1’23 Continued to actively manage costs, production levels, and inventory to align 2 with demand while maintaining lead times Digital tools and marketing efforts continued to dr
Slide 4: Strategic Priorities
Strategic Priorities Drive material conversion from concrete to fiberglass Leverage direct-to-homeowner strategy and digital innovations Enhance and expand strategic partnerships with dealers Execute continuous improvement initiatives and prudently manage costs 4
Slide 5: Enhancing and Expanding Strategic Partnerships
Enhancing and Expanding Execute Continuous Strategic Partnerships Improvement with Latham Grand Initiatives and Continuous Dealers Manage Costs Prudently Improvement & Prudent Cost Management • Continuing to match production, staffing, and inventory levels to demand • Took further actions in Q2’23 a
Slide 6: Enhancing Fiberglass Manufacturing to Capitalize on Conversion Opportunity
Enhancing Fiberglass Manufacturing to Capitalize Drive Fiberglass on Conversion Opportunity Conversion • Celebrated the grand opening of our Kingston, Ontario and Seminole, Oklahoma fiberglass manufacturing facilities in Q2’23 Kingston, Ontario • Enable improved lead times and Seminole, Oklahoma red
Slide 7: Strong Momentum with Latham's Direct-to-Homeowner Strategy and Digital Tools
Strong Momentum with Latham’s Direct-to-Homeowner Strategy Leverage Direct-to- and Digital Tools Homeowner Strategy • Year-over-year growth in website activity and leads to dealers in Q2’23 • Homeowners continue to leverage Latham’s digital tools with momentum in Pool Cost Estimator sessions and new
Slide 8: Focus on Dealer Recruitment and Enhancing Value-added Services
Focus on Dealer Recruitment and Enhancing Value-added Services F Enhance Strategic for Latham Grand Dealers Partnerships with Dealers • Heading into peak pool building season, had strong demand for hands-on training bootcamps held at our world- class training facility in Zephyrhills, Florida • Enhan
Slide 9: Q2 and 1H 2023 Financial Highlights
Q2 and 1H 2023 Financial Highlights Key Drivers Q2 2023 • Continued macroeconomic challenges Net Sales Adjusted EBITDA(1) • Sell-through of higher cost inventory ($ in millions) ($ in millions) • Impact of inflation $207 $49 • Right sizing of our inventory $177 $31 • Ability to maintain price • Bene
Slide 10: Disciplined Approach to Capital Allocation
Disciplined Approach to Capital Allocation • Targeted investments in organic growth opportunities that generate significant returns and Reinvesting in the Business value creation • Focus on fiberglass production / delivery equipment and new fiberglass molds Selective Strategic Investments • Strong h
Slide 11: Fiscal 2023 Outlook
Fiscal 2023 Outlook(1) $ in millions Updated Outlook Prior Outlook Metric Low High Low High Net Sales $570 $600 $565 $615 Adjusted EBITDA(2) $90 $100 $90 $110 Capital $32 $38 $35 $40 Expenditures Reflects: • First half fiscal 2023 results • Current outlook for demand based on expected declines in th
Slide 12: Latham: A Compelling Long-term Growth Story
Serving a large and attractive market benefitting from material conversion The leading consumer brand in the residential pool market Unique direct-to-homeowner model driving business for our dealer partners Latham: A Compelling 1 Broadest portfolio of branded products known for quality, durability a
Slide 13: Q&A
Q&A
Slide 14: Appendix
Appendix Latham Group SWIM | Nasdaq Listed
Slide 15: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted EBITDA and Adjusted EBITDA Margin Fiscal Quarter Ended Two Fiscal Quarters Ended July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022 (in thousands) Net income (loss) $ 5,715 $ 4,303 $ (8,653) $ 1,463 Depreciation and amortization 10,026 9,780 19,284 19,274 Interest
Slide 16: Non-GAAP Reconciliations
Non-GAAP Reconciliations Net Debt and Net Debt Leverage Ratio (in thousands) As of July 1, 2023 As of April 1, 2023 Total debt $ 312,041 $ 360,461 Less: Cash (43,116) (55,016) Net Debt 268,925 305,455 LTM Adjusted EBITDA(a) 88,669 106,323 Net Debt Leverage Ratio 3.0x 2.9x (a) LTM Adjusted EBITDA is