Latham Group, Inc. · NASDAQ:SWIM
Latham — Q2 2022 Earnings Presentation
16 slides from Latham's earnings presentation, Aug 11, 2022
Slide 1: Q2 2022 Earnings Call
Q2 2022 EARNINGS CALL AUGUST 11, 2022
Slide 2: Disclaimer
Disclaimer Forward-looking Statements Certain statements contained in this presentation are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are
Slide 3: Q2 / 1H 2022 Highlights
Q2 / 1H 2022 Highlights Q2 2022 NET SALES ADJUSTED EBITDA1 ($ IN MILLIONS) ($ IN MILLIONS) • Continued topline growth driven by favorable price and strength +14% +14% of fiberglass, liners and covers segments; offset by softening $207 $49 volume of in-ground pools driven by packaged pools $181 $43 •
Slide 4: Q2 2022 Operational Achievements
Q2 2022 Operational Achievements Q2 was another quarter of sequential operational improvements, and we are well-positioned from a manufacturing and supply chain perspective for 2H22 Improved North Progress on Raw Streamlined American Fiberglass Material Challenges Operations Production • 14% growth
Slide 5: Resetting Fiscal 2022 Guidance
Resetting Fiscal 2022 Guidance 1H22 2H22 Destocking of Destocking dynamic expected to continue Recent accelerated elevated packaged macro uncertainty pool inventory in distribution channel Dealers have full installation schedules, preventing catch up on installs delayed due to weather Strong growth
Slide 6: Fiberglass Conversion Provides Significant Runway for Growth
Fiberglass Conversion Provides Significant Runway for Growth Premium quality and exceptional design 1 With impressive strength that outperforms concrete and our proprietary stunning finishes, our fiberglass pools are the most durable and attractive swimming pools in the market 2 Less chemicals, salt
Slide 7: Digital Initiatives Remain a Key Differentiator
Digital Initiatives Remain a Key Differentiator SUITE OF DIGITAL ASSETS Lead engine is delivering purchase-ready leads • Lead generation engine continues to improve the quality and quantity of leads for our LAUNCHED IN 2019, dealer partners OUR NEW WEBSITE • Implemented new lead qualification progra
Slide 8: Inaugural ESG Report
Inaugural ESG Report • On July 6, 2022, Latham published the release of our inaugural Environmental, Social and Governance report • This is just the first step in our efforts to set clear goals, measure progress and increase transparency of Latham’s environmental impacts, social outcomes and busines
Slide 9: Resilient Pool Market Underpinned by R&R
Resilient Pool Market Underpinned by R&R HOMEOWNER TRENDS • Pool ownership has highest ranked customer satisfaction • Generational shift in spending from indoor to outdoor • Meaningful migration to suburban areas from urban areas as well as southern states where pool ownership is higher …DRIVING POO
Slide 10: Q2 / 1H 2022 Financial Highlights
Q2 / 1H 2022 Financial Highlights Q2 2022 NET SALES ADJUSTED EBITDA1 ($ IN MILLIONS) ($ IN MILLIONS) +14% +14% $207 $49 $181 $43 Q2 2021 Q2 2022 Q2 2021 Q2 2022 1H 2022 NET SALES ADJUSTED EBITDA1 ($ IN MILLIONS) ($ IN MILLIONS) +21% +27% $398 $97 $330 $76 1H 2021 1H 2022 1H 2021 1H 2022 ____________
Slide 11: Capital Allocation Priorities
11 Capital Allocation Priorities Capital Philosophy: Maintaining the ability to execute on our strategic growth objectives through the cycle to maximize value for our shareholders Reinvesting in the business to enhance future growth opportunities Selective tuck in M&A and business development invest
Slide 12: Financial Outlook
Financial Outlook FISCAL 2022 OUTLOOK1 THREE TO FIVE YEAR TARGETS2 Net Sales Net Sales Growth $750 million to $770 million 10% to 12% Adjusted EBITDA Adjusted EBITDA Growth $165 million to $175 million 12% to 15% Capital Expenditures Adjusted EBITDA Margin $40 million to $50 million +500 bps Key Dri
Slide 13: Latham: A Compelling Growth Story
Latham: A Compelling 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 1 Broadest portfolio of branded products known for quality,
Slide 14: The Pool Company
The Pool Company *
Slide 15: Appendix
Appendix
Slide 16: Non-GAAP Reconciliations
Non-GAAP Reconciliations (in thousands) Fiscal Quarter Ended Two Fiscal Quarters Ended July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 Net income (loss) $ 4,303 $ (53,598) $ 1,463 $ (45,065) Depreciation and amortization 9,780 7,770 19,274 15,670 Interest expense 3,164 7,516 4,929 16,572 Income