Latham group Inc. · Q2 2024 earnings

Briefing

Latham Group reported strong execution with substantial increases in profitability despite difficult industry conditions. Margin expansion was a key highlight, reflecting improved cost structure and production efficiencies.

Latham Group's Q2 2024 net sales were $160.1 million, a decrease of 9.6% year-over-year. However, gross profit increased by 5.6% to $53.0 million, with gross margin expanding to 33.1%. Net income more than doubled to $13.3 million, or $0.11 per diluted share, and adjusted EBITDA increased by 11.2% to $34.5 million.

• Net sales decreased by 9.6% to $160.1 million compared to the prior year's second quarter.
• Gross profit increased by 5.6% to $53.0 million, with gross margin expanding by 470 basis points to 33.1%.
• Net income more than doubled to $13.3 million, or $0.11 per diluted share.
• Adjusted EBITDA increased by 11.2% to $34.5 million, with adjusted EBITDA margin reaching 21.5%.

Headline financials

Revenue & EPS history

Latham is effectively managing through challenging industry conditions in 2024 through actions to improve cost structure, drive productivity gains, and reduce working capital needs. The increase in the midpoint of sales guidance reflects the expected five-month contribution of the Coverstar Central acquisition. The midpoint of adjusted EBITDA guidance range increased by $15 million, $12 million of which is organic growth attributable to ongoing business performance, and the remaining $3 million reflects a contribution from the acquisition.