Latham Group (SWIM) investor relations material

Executive summary

• Achieved year-over-year sales growth across all product lines, with positive trends continuing into April despite adverse weather in North America.

• Expanded margins through operating leverage, lean manufacturing, and value engineering initiatives.

• Integration of the Freedom Pools acquisition is progressing as planned, expanding presence in Australia and New Zealand.

• Double-digit sales growth in Florida, driven by new dealer sign-ups and targeted marketing as part of the Sand State strategy.

• Leadership transition with Sean Gadd appointed CEO in January 2026.

Financial highlights

• Q1 2026 net sales increased 5.3% year-over-year to $117.3 million, with 3% organic growth and 2% from Freedom Pools acquisition.

• Adjusted EBITDA rose 9.2% to $12.2 million, with margin improving to 10.4% from 10.0% year-over-year.

• Gross margin expanded to 32% (up 220 bps), with gross profit at $37.2 million (31.7% of net sales).

• Net loss was $8.5 million ($0.07/share), with net loss margin at 7.3%, up from 5.4% last year, mainly due to higher SG&A and integration costs.

• SG&A expenses rose to $37 million (+20%), primarily from increased sales/marketing and acquisition-related costs.

Outlook and guidance

• Reaffirmed 2026 guidance: net sales growth of 9% and adjusted EBITDA growth of 12.7–13% at the midpoint.

• Full-year 2026 net sales guidance: $580–$610 million; adjusted EBITDA: $105–$120 million; CapEx: $42–$48 million.

• U.S. in-ground pool market expected to remain flat versus 2025; guidance includes moderate increases in transportation and commodity costs.

• April sales trends and Q2 order book are strong and in line with expectations.

• Freedom Pools acquisition expected to add $20 million in annual net sales and $4 million in adjusted EBITDA before synergies.