Latham Group, Inc. · NASDAQ:SWIM
Latham — Q4 2023 Earnings Presentation
16 slides from Latham's earnings presentation, Mar 12, 2024
Slide 1: Q4 2023 Earnings Call
Q4 2023 Earnings Call March 12, 2024
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: 2023 Highlights
2023 Highlights Continued to drive the conversion to fiberglass pools over concrete pools 1 • Outperformed the decline in new pool starts in the U.S. by ~10 percentage points Maintained strong competitive position with leading market share, an energized dealer network, and greater consumer engagemen
Slide 4: U.S. Fiberglass Penetration Continues to Grow
U.S. Fiberglass Penetration Continues to Grow New U.S. In-ground Residential Pool Installations(1) (000s of residential in-ground swimming pool installed) • 15% CAGR since 2019, in a market that 96 117 98 was -2.7% CAGR 78 70 • Fiberglass represented 73% of in-ground pool sales in 2023 (1) 2019 2020
Slide 5: Enhancing Value Proposition of Fiberglass and Expanding Strategic Partnerships
Enhancing Value Fiberglass and Expanding Proposition Strategic Partnerships with Latham G Cost(1) • ~25-30% lower upfront costs vs. concrete • ~35-40% lower overall cost of ownership over time Installation • Can be installed as fast as one day, and two to three days on average, versus three to six m
Slide 6: Conversion Driven by Latham's Marketing Initiatives
Conversion Driven by Latham’s Marketing Initiatives Unique direct-to-homeowner and dealer strategies continue to yield results Successful dealer productivity & recruitment efforts • In 2023, Latham had approximately 300 fiberglass Grand dealers who sold at least 5 pools – approximately 100 more than
Slide 7: Pool Covers & Liners
Pool Covers & Liners ~47% of Latham’s total 2023 sales came from our cover and liner product lines o The majority are replacement products that are more resilient to cyclical downturns • Automatic safety covers saw continued consumer adoption and demand in 2023 – also offering homeowners energy, wat
Slide 8: Q4 and FY 2023 Financial Highlights
Q4 and FY 2023 Financial Highlights Q4 Net Sales Adjusted EBITDA(1) ($ in millions) ($ in millions) 2023 Key Drivers $108 $10 $91 • Year-over-year volume declines due to continued macroeconomic challenges $4 10.9% 4.1% • Sell-through of higher-cost inventory Q4 2022 Q4 2023 Q4 2022 Q4 2023 • Reducin
Slide 9: Balance Sheet & Cash Flow Highlights
Balance Sheet & Cash Flow Highlights $103 million • Substantial financial flexibility to navigate a range of economic Year-End Cash Balance + $70 million scenarios versus 2022 $116 million • Strong cash generation of our business augmented by reduction 2023 Operating Cash Flow + $84 million of inven
Slide 10: Full Year 2024 Outlook
Full Year 2024 Outlook(1) $ in millions Updated Outlook Metric Low High Net Sales $490 $520 Adjusted EBITDA(2) $60 $70 Capital Expenditures $18 $22 Reflects • Managing to ~15% decline in new in-ground pool installations in 2024, planning for recovery in 2025; • Benefits from our cost containment, pr
Slide 11: 2024 Priorities
2024 Priorities Drive material conversion to fiberglass & autocover adoption Gain additional operating efficiencies through value engineering and lean manufacturing Maintain a strong balance sheet 11
Slide 12: Latham: A Compelling Long-term Growth Story
Serving a large and attractive market benefitting from fiberglass market share gains The leading consumer brand in the residential pool market Latham: A Unique direct-to-homeowner model driving business for our dealer partners Compelling Long-term 1 Broadest portfolio of branded products known for q
Slide 13: Q&A
Q&A
Slide 14: Appendix
Appendix Qatham Group SWIM | Nasdaq Listed
Slide 15: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted EBITDA and Adjusted EBITDA Margin Quarter Ended Year Ended Dec 31, 2023 Dec 31, 2022 Dec 31, 2023 Dec 31, 2022 (in thousands) Net income (loss) $ 111 $ (19,033) $ (2,388) $ (5,694) Depreciation and amortization 10,966 9,341 40,751 38,175 Interest expense, net 9,646
Slide 16: Non-GAAP Reconciliations
Non-GAAP Reconciliations Net Debt and Net Debt Leverage Ratio (in thousands) December 31, 2023 December 31, 2022 Total debt $ 301,201 $ 312,881 Less: Cash (102,763) (32,626) Net Debt 198,438 280,255 LTM Adjusted EBITDA(a) 88,025 143,252 Net Debt Leverage Ratio 2.25x 2.0x (a) LTM Adjusted EBITDA is t