Latham Group (SWIM) Q4 2024 earnings summary

Executive summary

• Outperformed the U.S. pool market in 2024, increasing fiberglass pool market share to 24% of U.S. pool starts and expanding automatic safety cover business through acquisitions.

• Fiberglass pools accounted for 75% of in-ground pool sales, up from 73% in 2023.

• Focused on expanding in the Sand States, which represent about two-thirds of U.S. pool starts, and launched targeted marketing campaigns that increased dealer leads.

• Benefited from CoverStar Central, New York, and Tennessee acquisitions, strengthening the automatic safety cover segment and contributing to sales and margin expansion.

• Achieved year-on-year margin expansion through cost discipline, lean manufacturing, and $9 million in cost reductions.

Financial highlights

• Q4 2024 net sales were $87.3 million, down 4% year-over-year; full-year net sales were $509 million, down 10%.

• Q4 gross margin improved to 25% (up 130 bps); full-year gross margin was 30% (up 320 bps).

• Q4 net loss was $29.2 million, including $8.7 million non-cash tax expense and $6.2 million FX loss; full-year net loss was $17.9 million.

• Q4 adjusted EBITDA was $3.6 million (4.2% margin), down 63%; full-year adjusted EBITDA was $80.2 million (15.8% margin), down from $88 million.

• Ended 2024 with $56 million cash, $282 million total debt, and net debt leverage ratio of 2.8 (2.6 pro forma).

Outlook and guidance

• 2025 guidance: net sales of $535–$565 million and adjusted EBITDA of $90–$100 million, representing 8% and 19% growth at the midpoint.

• Q1 2025 net sales expected to be flat year-over-year, with growth ramping in Q2 and Q3.

• Capital expenditures projected at $27–$33 million, up from $20.1 million in 2024, mainly for new fiberglass pool molds and facility expansions in Florida and Oklahoma.

• Guidance assumes flat U.S. pool starts, with upside if consumer confidence improves.