Latham Group (SWIM) Q4 2024 earnings summary

Executive summary

• Outperformed the U.S. pool market in 2024, increasing fiberglass pool penetration to 24% of U.S. pool starts and achieving 75% of in-ground pool sales from fiberglass, up from 73% in 2023.

• Benefited from CoverStar Central, New York, and Tennessee acquisitions, vertically integrating the automatic safety cover line and expanding EBITDA margin.

• Focused on expanding in the Sand States (FL, TX, AZ, CA), which represent two-thirds of U.S. pool starts, with targeted marketing, new product launches, and dealer expansion.

• Achieved year-on-year margin expansion through cost discipline, lean manufacturing, and restructuring savings.

• Ended 2024 with a strong financial position, enabling investment in organic growth and further acquisitions.

Financial highlights

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

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

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

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

• $4M in restructuring savings and $9M from lean manufacturing/value engineering in 2024.

Outlook and guidance

• 2025 guidance: net sales of $535M–$565M (8% growth at midpoint), adjusted EBITDA of $90M–$100M (19% growth at midpoint), and CAPEX of $27M–$33M.

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

• Long-term vision: if pool starts return to 78,000/year, revenue could reach $750M and adjusted EBITDA $160M.

• Market conditions expected to remain at trough levels through much of 2025, but positioned to ramp up if demand increases.