Q1 2025 Latham Group Inc Earnings Call Transcript
Key Points
- Latham Group Inc (SWIM) reported a 190-basis-point expansion in gross margin, reflecting benefits from lean manufacturing and value engineering initiatives.
- The company saw relative strength in its fiberglass and auto cover product categories, with fiberglass pools expected to gain another 1% of market share in 2025.
- Latham Group Inc (SWIM) made notable progress on its Sand States expansion strategy, targeting significant growth opportunities in Florida, Texas, Arizona, and California.
- Sales of autocovers outperformed in the first quarter, driven by both organic growth and the benefits of recent acquisitions.
- The company maintained a strong financial position with a cash position of $24 million and plans to fully repay its revolver by the end of the second quarter.
- Net sales for the first quarter were only slightly above the previous year, reflecting soft industry conditions and adverse weather impacts.
- In-ground pool sales were down 4% from Q1 2024, indicating challenges in the market.
- SG&A expenses increased significantly, largely due to strategic investments in sales and marketing, impacting overall profitability.
- First-quarter adjusted EBITDA was $11 million, $1 million below the prior-year period, primarily due to higher sales and marketing spend.
- The company faces tariff-related uncertainties, with a potential headwind of 350 to 400 basis points on costs, although mitigation efforts are underway.
Good day and welcome to the Latham Group Inc., first-quarter 2025 earnings conference call. (Operator Instructions) Please note, this event is being recorded.
I would now like to turn the conference over to Ms. Casey Kotary, Investor Relations representative. Please go ahead.
Thank you. This afternoon, we issued our first-quarter 2025 earnings press release, which is available on the Investor Relations portion of our website. On today's call, our Latham's President and CEO, Scott Rajeski; and CFO, Oliver Gloe. Following their remarks, we will open the call to questions.
During this call, the company may make certain statements that constitute forward-looking statements, which reflect the company's views with respect to future events and financial performance as of today or the date specified. Actual events and results may differ materially from those contemplated by such forward-looking statements due to risks and other factors that are set forth in the company's annual report on Form 10-K
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