Latham Group, Inc. · NASDAQ:SWIM
Latham — Q1 2023 Earnings Presentation
14 slides from Latham's earnings presentation, May 9, 2023
Slide 1: Q1 2023 Earnings Call
Q1 2023 Earnings Call May 9, 2023
Slide 2: Disclaimer
Disclaimer Forward-looking Statements Certain statements in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation other than statements of historical fact may constitute forwar
Slide 3: Q1 2023 Highlights
Q1 2023 Highlights Net sales and Adjusted EBITDA results above our expectations in 1 spite of the continued challenging macroeconomic environment and difficult year-over-year comparison Benefited from previously announced cost reduction and ongoing 2 lean and value engineering initiatives Right size
Slide 4: Lead Generation Engine and Digital Tools Indicate Strong Underlying Consumer Interest in Pool Ownership
Lead Generation Engine and Digital Tools Indicate Strong Underlying Consumer Interest in Pool Ownership My Latham Users / Profiles Pool Cost Estimator Submissions Augmented Reality App Downloads +100% +40% +40% YoY YoY YoY Q1 2022 Q1 2023 Q1 2022 Q1 2023 Q1 2022 Q1 2023
Slide 5: Fiberglass Continues to Present an Attractive Opportunity to Drive Long-term Growth
Fiberglass Continues to Present an Attractive Opportunity to Drive Long-term Growth Fiberglass Share of U.S. Pool Installations International Fiberglass Market Penetration (% of residential in-ground swimming pools) (% of residential in-ground swimming pools) 70% + 3% pts 52% 35% 40% 40% 18% 18% 21%
Slide 6: Strong Momentum in Our Covers Products
Strong Momentum in Our Covers Products • Latham has been championing awareness of automatic safety covers, translating into topline results o Grew net sales for automatic safety covers in Q1’23 vs. Q1’22 o Doubled net sales for automatic safety covers in FY’22 vs. FY’19 Automatic Safety Cover • Prev
Slide 7: Q1 2023 Financial Results
Q1 2023 Financial Results Net Sales ($ in millions) Key Drivers $192 • Pool market returned to pre-2020 seasonality $138 • Elevated backlogs and production in Q1’22 • Wholesale channel continued to destock packaged pool inventory Q1 2022 Q1 2023 • Continued macroeconomic challenges Adjusted EBITDA(1
Slide 8: Disciplined Approach to Capital Allocation
Disciplined Approach to Capital Allocation • Targeted investments in organic growth opportunities that generate significant returns Reinvesting in the Business and value creation • Focus on fiberglass production / delivery equipment and new fiberglass molds Selective Strategic Investments • Strong h
Slide 9: Fiscal 2023 Outlook
Fiscal 2023 Outlook(1) Metric Low High Net Sales $565 million $615 million Adjusted EBITDA(2) $90 million $110 million Capital Expenditures $35 million $40 million Reflects: • First quarter fiscal 2023 results • The impact of macroeconomic challenges on consumer spending and demand, resulting in ant
Slide 10: Looking Ahead: Strong Fundamentals and Long-Term Growth Opportunities
Looking Ahead: Strong Fundamentals and Long-Term Growth Opportunities Drive Fiberglass Conversion From Concrete • Drove year-over-year U.S. fiberglass penetration expansion in 2022, proving fiberglass’s ability to take share and outperform the overall U.S. pool market Enhance Fiberglass Manufacturin
Slide 11: Q&A
Q&A
Slide 12: Appendix
Appendix Latham Group SWIM | Nasdaq Listed
Slide 13: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted EBITDA and Adjusted EBITDA Margin Fiscal Quarter Ended ($ in thousands) April 1, 2023 April 2, 2022 Net loss $ (14,368) $ (2,840) Depreciation and amortization 9,258 9,494 Interest expense 10,804 1,765 Income tax (benefit) expense (2,928) 5,307 Loss on sale and disp
Slide 14: Non-GAAP Reconciliations
Non-GAAP Reconciliations Net Debt and Net Debt Leverage Ratio (in thousands) As of April 1, 2023 Total debt $ 360,461 Less: Cash (55,016) Net Debt 305,455 LTM Adjusted EBITDA(a) 106,323 Net Debt Leverage Ratio 2.9x (a) LTM Adjusted EBITDA is the sum of the Company’s Adjusted EBITDA for the four fisc