Latham Group, Inc. · NASDAQ:SWIM
Latham — Q4 2024 Earnings Presentation
21 slides from Latham's earnings presentation, Mar 4, 2025
Slide 1: Q4 2024 Earnings Call
Q4 2024 Earnings Call March 4, 2025
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: 2024 Key Takeaways
2024 Key Takeaways 1 Outperformed vs. The Market 2 Increased market penetration of Fiberglass Pools Strong Adjusted EBITDA margin – 3 ahead of prior year on lower sales 4 Benefits from Coverstar Central acquisition Maintained strong financial position 5 3
Slide 4: Expanding Share in the Sand States | Key Priorities
Expanding Share in the Sand States | Key Priorities Expanding the Pool Dealer Base 1 • Driving pool builder expansion and development • Opportunities to “stand up” new builders and convert concrete builders to Fiberglass Targeting Master Planned Communities (MPC’s) 2 • Massive opportunity in Master
Slide 5: Strengthening Position in Automatic Safety Covers
Strengthening Position in Automatic Safety Covers Opportunity & Benefits • Autocovers represent a large market opportunity, especially in the Sand States • Consumers benefit from unparalleled safety and savings benefits; the cost of an Autocover is offset by maintenance savings to the homeowner with
Slide 6: 2025 Outperformance
2025 Outperformance Forecasting new U.S. pool starts flat vs. 2024; currently in market trough Drivers of Outperformance vs. The Market: Accelerating Fiberglass Share Gain in the Sand States along with ongoing market penetration 1 Continuing to Drive Awareness and Adoption of Automatic Safety Covers
Slide 7: Q4 2024 Financial Highlights
Q4 2024 Financial Highlights Net Sales ($ in millions) Q4 Q1 2024 2024 Key Key Drivers Drivers $100 $91 $87 $80 • YoY volume declines from industry $60 softness; Q4 is the seasonally slowest $40 period $20 $- • Declines partially offset by Fiberglass Q4 2023 Q4 2024 conversion, Coverstar Central acq
Slide 8: Full Year 2024 Financial Highlights
Full Year 2024 Financial Highlights Net Sales ($ in millions) FY Q12024 2024Key KeyDrivers Drivers $566 $509 $400 • Sales volumes primarily impacted by industry softness $200 • Despite lower sales, achieved 30% gross $- margin, up 320 bps YoY FY 2023 FY 2024 • Gross margin benefits driven by: Adjust
Slide 9: 2024 Lean Manufacturing & Value Engineering Initiative Highlights
2024 Lean Manufacturing & Value Engineering Initiative Highlights Drove gross margin expansion by 320 bps in 2024, despite lower YoY sales MARGIN IMPROVEMENT Continued earning substantial benefits from lean manufacturing & value engineering initiatives COST REDUCTIONS Achieved $4M in savings from re
Slide 10: Ended Q4 With A Strong Balance Sheet
Ended Q4 With A Strong Balance Sheet Strong cash position post-Coverstar Central acquisition & repayment of debt Significant resilience managing through market trough Capital allocation strategy supported by strong cash flow, with flexibility to be opportunistic 10
Slide 11: Balance Sheet & Cash Flow Highlights
Balance Sheet & Cash Flow Highlights $131 million • Maintained substantial financial flexibility even post-$65M Year-End Liquidity(1) vs. $178 million Coverstar Central acquisition and $21M debt repayment at YE 2023 Net Cash Provided by $6 million • Includes approx. $23M benefit from inventory reduc
Slide 12: Productivity Gains | Cost Structure
Productivity Gains | Cost Structure Drove Meaningful Cost Structure Improvements Since 2023 (in millions) $7 $7 Lean Manufacturing / Value Engineering Restructuring $4 $4 $6 $6 $2 $2 $4 $4 $3 $2 $2 $2 $1 $1 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 12
Slide 13: Coverstar Acquisitions
Coverstar Acquisitions • Acquisition closed in August 2024 Coverstar Central • $20M expected increase in annualized Net Sales • 140 bps expected expansion in annualized Adj. EBITDA Margin Coverstar New York • Both acquisitions closed earlier in Q1 • $5M expected increase in annualized Net Sales, com
Slide 14: Full Year 2025 Outlook
Full Year 2025 Outlook(1) $ in millions Outlook Metric Low High Net Sales $535 $565 Adjusted EBITDA(2) $90 $100 Capital Expenditures $27 $33 Reflects • Forecasting flat new U.S. pool starts in 2025 vs. 2024. • Targeting growth in Net Sales and Adjusted EBITDA driven by accelerated Fiberglass Pool sh
Slide 15: Impact of Growth Initiatives & Production Efficiencies
Impact of Growth Initiatives & Production Efficiencies Growth Trajectory Initiatives (in millions, except for Adjusted EBITDA Margin) 1. Drive growth in Fiberglass share in the Sand States 21% 2. Drive growth in Automatic Safety Covers, aided by the Coverstar 19% Central acquisition ~$750 3. Drive g
Slide 16: 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 17: Q&A
Q&A
Slide 18: Appendix
Appendix Latham Group SWIM | Nasdaq Listed
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted EBITDA and Adjusted EBITDA Margin Fiscal Quarter Ended Fiscal Year Ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 (in thousands) Net (loss) income $ (29,170) $ 111 $ (17,860) $ (2,388) Depreciation and amortization 12,156 10,966 44,446
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations Net Debt and Net Debt Leverage Ratio (in thousands) December 31, 2024 Total debt $ 281,521 Less: Cash (56,398) Net Debt 225,123 LTM Adjusted EBITDA(a) 80,219 Net Debt Leverage Ratio 2.8x LTM Pro Forma Adjusted EBITDA(2) 87,965 Pro Forma Net Debt Leverage Ratio 2.6x (1) LTM A
Slide 21: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted EBITDA and Adjusted EBITDA Margin Year Ended December 31, 2019 2015 (unaudited) (in thousands) Net (loss) income $ 7,457 $ (9,992) Depreciation and amortization 21,659 14,466 Interest expense 22,639 8,228 Income tax expense (benefit) (4,671) 3,384 Loss on sale and d