Latham Group, Inc. Q4 FY2025 earnings call

• Sean Gadd noted strong fourth quarter and full year 2025 results, with fourth quarter revenues up 15% and full-year in-ground pool sales 1% above 2024 levels. Fiberglass pools showed growth, with 76.5% of in-ground pool sales in 2025 and market share gain. • Cover sales had 22% growth in 2025 due to consumer response to safety features, and partnership with Bodie Miller. • Liner sales increased 4% in 2025 with industry-leading lead times and AI-powered measuring tool. • Expanded into SAM states, with double-digit sales growth in Florida. • Recently completed acquisition of Freedom Pools, expanding market position in Australia and New Zealand, and providing immediate earnings accretion. • Oliver Globo discussed full year 2025 financials, with net sales exceeding guidance range, adjusted EBITDA above guidance range, gross margin expansion, and SG&A expenses increase due to sales and marketing investments.

Fourth quarter revenues were up 15%. In-ground pool sales were 50 million, up 15% from Q4 2024. Cover sales were 37 million in the quarter, up 19%. Liner sales were 13 million, up 2% compared to Q4 2024. Full year net sales were 546 million, up 7% compared to prior year. In-ground pool sales for full year were 262 million, up 1% year-over-year. Cover sales were $161 million, up 22% driven by organic and acquisition growth. Liner sales were $123 million, up 4% compared to prior year period. Fiberglass represented 76.5% of in-ground pool sales in 2025, with year-on-year growth of approximately 2.5%. Cover sales grew 22% in 2025 due to positive consumer response. Liner sales increased 4% in 2025 thanks to industry-leading lead times and proprietary AI-powered measuring tool.

• 2026 net sales guidance is between 580 and 610 million, representing year-on-year growth of 9% at midpoint. • 2026 adjusted EBITDA guidance is between 105 and 120 million, representing year-on-year growth of 12.7% at midpoint. • Includes mid-single digit organic growth, benefits from Freedom Pools acquisition, and increased marketing expenses. • Capital expenditures projected to be in range of $42 to $48 million, including maintenance capex and investments in acquired facilities.

Q: Greg Palm asked Sean Gadd about what he's learned as CEO, excitement, and potential strategy changes.

A: Sean Gadd mentioned excitement about San States opportunity, focusing on market development, lead generation, qualified dealers, and managing install costs.

Q: Tim Weiss asked about early demand indicators and EBITDA margin breakdown.

A: Sean Gadd said Q4 was strong due to good team performance and elongated sales cycle; Oliver Globo said margin contribution from higher gross margin, volume leverage, and higher sales and marketing investments.

Q: Scott Stringer asked about pricing outlook and customer financing.

A: Oliver Globo said price includes run rate of 2025 price increase and normal annual increase; Sean Gadd said interest rates are a trend but need stable new normal.

Q: Matthew Booley asked about MPC strategy and capacity expansion.

A: Sean Gadd talked about targeting MPCs and working towards partnering with large builders; Oliver Globo said capacity is sufficient with current facilities.

Q: Susan McElary asked about dealer backlogs and margins.

A: Sean Gadd said backlogs look good; Oliver Globo talked about lean manufacturing and value engineering.

Q: Sean Kalman asked about potential buyers holding back and acquisition impact.

A: Sean Gadd said education and decision-making are issues; Oliver Globo said acquisition replaces lease expense and additional EBITDA flows to free cash flow