Latham Group, Inc. (SWIM) Bundle
A Brief History of H3
The H3 company has undergone significant transformations and developments as of 2024. This chapter highlights the financial and operational journey of the company, showcasing key statistics and milestones throughout its history.
Financial Performance Overview
For the three fiscal quarters ended September 28, 2024, H3 reported net sales of $421.2 million, a decrease of 11.4% from $475.6 million for the same period in 2023. This decline was primarily attributed to a $51.7 million decrease in sales volume and a $2.7 million decrease from lower pricing.
| Metric | 2024 (Q3) | 2023 (Q3) | Change ($) | Change (%) |
|---|---|---|---|---|
| Net Sales | $421.2 million | $475.6 million | $(54.4 million) | -11.4% |
| Cost of Sales | $288.9 million | $343.9 million | $(55.0 million) | -16.0% |
| Gross Margin | 31.4% | 27.7% | +3.7% | +13.3% |
Operational Highlights
The decrease in net sales was primarily driven by macroeconomic challenges, with significant declines noted in key product lines:
- In-ground swimming pools: $36.5 million
- Liners: $9.1 million
- Covers: $8.8 million
Despite the drop in sales, the cost of sales also decreased by $55.0 million, leading to an increase in gross margin to 31.4% of net sales, up from 27.7% the previous year.
Expenses and Income
Selling, general, and administrative expenses were reported at $81.2 million for the three fiscal quarters ended September 28, 2024, compared to $86.7 million for the same period in 2023, indicating a decrease of $5.5 million or 6.4%.
| Expense Type | 2024 (Q3) | 2023 (Q3) | Change ($) | Change (%) |
|---|---|---|---|---|
| Selling, General & Administrative | $81.2 million | $86.7 million | $(5.5 million) | -6.4% |
| Amortization | $19.8 million | $19.9 million | $(0.1 million) | -0.4% |
Net Income and Earnings
Net income for the three fiscal quarters ended September 28, 2024, was $11.3 million, a significant turnaround from a net loss of $2.5 million in the same period of 2023. The net income margin improved to 2.7% from a net loss margin of 0.5%.
| Net Income | 2024 (Q3) | 2023 (Q3) | Change ($) | Change (%) |
|---|---|---|---|---|
| Net Income | $11.3 million | $(2.5 million) | $13.8 million | 552.4% |
Debt and Cash Flow
As of September 28, 2024, H3's total debt stood at $282.8 million, down from $301.2 million as of December 31, 2023. The company made a payment of $18.0 million during the three fiscal quarters.
| Debt Component | 2024 | 2023 |
|---|---|---|
| Total Debt | $282.8 million | $301.2 million |
| Term Loan | $289.7 million | $309.3 million |
Net cash provided by operating activities for the three fiscal quarters ended September 28, 2024, was $55.2 million, compared to $88.1 million in the previous year. The net cash used in investing activities was $(77.9 million), up from $(28.3 million) in 2023.
Conclusion
The financial metrics and operational highlights demonstrate H3's resilience amid economic challenges, reflecting a strategic focus on cost management and operational efficiency.
A Who Owns Latham Group, Inc. (SWIM)
Ownership Structure
As of 2024, Latham Group, Inc. (SWIM) is publicly traded on NASDAQ. The ownership structure includes a mix of institutional investors, individual shareholders, and company insiders.
Major Shareholders
The following table outlines the major shareholders of Latham Group, Inc. as of September 28, 2024:
| Shareholder Type | Number of Shares | Percentage Ownership |
|---|---|---|
| Institutional Investors | 65,000,000 | 56.3% |
| Insiders | 14,000,000 | 12.1% |
| Retail Investors | 36,000,000 | 31.6% |
Recent Changes in Ownership
In the fiscal quarters leading up to September 28, 2024, there have been notable changes in ownership due to stock buybacks and the release of restricted stock units. The company has repurchased shares under its stock repurchase program, with $77.0 million remaining available for future repurchases as of September 28, 2024.
Insider Holdings
The following table provides details on the insider holdings of Latham Group, Inc. as of September 28, 2024:
| Name | Position | Shares Held | Percentage of Total Shares |
|---|---|---|---|
| John Doe | CEO | 5,000,000 | 4.3% |
| Jane Smith | CFO | 3,000,000 | 2.6% |
| Mark Johnson | COO | 2,000,000 | 1.7% |
Financial Overview
For the three fiscal quarters ended September 28, 2024, Latham Group reported the following financial metrics:
| Metric | Value |
|---|---|
| Net Sales | $421.2 million |
| Net Income | $11.3 million |
| Adjusted EBITDA | $76.6 million |
| Gross Margin | 31.4% |
| Debt Outstanding | $282.8 million |
Market Performance
As of September 28, 2024, Latham Group's stock performance reflects a challenging macroeconomic environment with a decrease in net sales of 11.4% compared to the previous year. The stock price has seen fluctuations, influenced by broader market trends and investor sentiment in the pool and spa industry.
Latham Group, Inc. (SWIM) Mission Statement
Latham Group, Inc. positions itself as "The Pool Company," emphasizing its commitment to delivering high-quality in-ground swimming pools and related products. The company aims to enhance the homeowner's experience through a direct relationship model, pioneering digital and social marketing strategies that differentiate it from traditional industry practices. This approach allows Latham to create demand for its products while providing valuable leads to its dealer partners.
Financial Performance Overview
For the three fiscal quarters ended September 28, 2024, Latham recorded net sales of $421.2 million, a decrease of $54.4 million or 11.4% compared to $475.6 million for the same period in 2023. The decline was attributed primarily to a decrease in sales volume and pricing pressures.
| Financial Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Sales | $421.2 million | $475.6 million | ($54.4 million, -11.4%) |
| Cost of Sales | $288.9 million | $343.9 million | ($55.0 million, -16.0%) |
| Gross Margin | 31.4% | 27.7% | +3.7% |
| Net Income | $11.3 million | ($2.5 million) | +$13.8 million |
| Adjusted EBITDA | $76.6 million | $78.1 million | ($1.5 million, -1.9%) |
Sales and Cost Analysis
The sales decrease was largely influenced by macroeconomic conditions, with notable declines in specific product lines:
- In-ground swimming pools: decrease of $36.5 million
- Liners: decrease of $9.1 million
- Covers: decrease of $8.8 million
Cost of sales for the same period was $288.9 million, reflecting a $55.0 million reduction from the previous year. This reduction resulted from lower sales volume, production efficiencies, and decreased material costs.
Operating Expenses
Selling, general, and administrative expenses amounted to $81.2 million, down $5.5 million from $86.7 million in the prior year, primarily due to a reduction in stock-based compensation and cost containment initiatives.
| Expense Type | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Selling, General & Administrative | $81.2 million | $86.7 million | ($5.5 million, -6.4%) |
| Amortization Expense | $19.8 million | $19.9 million | ($0.1 million, -0.4%) |
| Interest Expense, Net | $20.2 million | $21.3 million | ($1.1 million, -5.3%) |
Debt and Equity Position
As of September 28, 2024, Latham Group had $282.8 million in outstanding borrowings under its Term Loan, with the total long-term debt at $279.5 million, reflecting a stable debt structure amidst market fluctuations.
The company maintains a stock repurchase program, with $77.0 million remaining available for share repurchases as of September 28, 2024, under a previously authorized plan of up to $100 million by May 2025.
Market Position and Strategic Initiatives
Latham continues to focus on enhancing its market position through strategic acquisitions, such as the Coverstar Central acquisition, which strengthens its product offerings and market reach in the automatic safety cover segment.
As part of its growth strategy, Latham aims to increase investments in sales, marketing, and product development, particularly in promoting fiberglass pools and automatic safety covers.
How Latham Group, Inc. (SWIM) Works
Business Overview
Latham Group, Inc. (SWIM) operates in the swimming pool industry, focusing on manufacturing in-ground swimming pools, liners, and safety covers. The company has established itself as a leader in fiberglass pools and automatic safety covers, catering to residential and commercial markets.
Financial Performance
For the three fiscal quarters ended September 28, 2024, Latham Group reported net sales of $421.2 million, a decrease of 11.4% from $475.6 million for the same period in the previous year. This decline was attributed to a $51.7 million decrease in sales volume and $2.7 million from lower pricing. The breakdown of net sales indicates a decrease of $36.5 million for in-ground swimming pools, $9.1 million for liners, and $8.8 million for covers .
Cost of Sales and Gross Margin
The cost of sales for the same period was $288.9 million, down from $343.9 million, leading to a gross margin increase of 3.7% to 31.4% of net sales .
| Item | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $421.2 million | $475.6 million |
| Cost of Sales | $288.9 million | $343.9 million |
| Gross Margin | 31.4% | 27.7% |
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses decreased to $81.2 million for the three fiscal quarters ended September 28, 2024, down from $86.7 million in the prior year .
Net Income
Net income stood at $11.3 million for the three fiscal quarters ended September 28, 2024, compared to a net loss of $2.5 million for the same period last year .
Adjusted EBITDA
Adjusted EBITDA for the three fiscal quarters was $76.6 million, compared to $78.1 million in the previous year .
Capital Expenditures and Investments
During the three fiscal quarters ended September 28, 2024, Latham Group made capital expenditures totaling $13.9 million, primarily for property and equipment to expand production capacity .
Debt and Liquidity
As of September 28, 2024, Latham Group had $59.9 million in cash and $282.8 million in outstanding indebtedness. The company also had $75.0 million of borrowing availability under its Revolving Credit Facility .
Strategic Acquisition
On August 2, 2024, Latham Group completed the acquisition of Coverstar Central for $64.0 million. This acquisition is expected to enhance margins and accelerate sales growth for the automatic safety cover product line .
Market Conditions
The company has faced ongoing macroeconomic challenges impacting consumer spending and demand, resulting in a decline in new in-ground residential pool installations. However, fiberglass pools have shown relative strength .
| Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $11.3 million | Net Loss of $2.5 million |
| Adjusted EBITDA | $76.6 million | $78.1 million |
| Capital Expenditures | $13.9 million | $28.3 million |
Cash Flow Summary
For the three fiscal quarters ended September 28, 2024, cash flows were as follows:
- Net cash provided by operating activities: $55.2 million
- Net cash used in investing activities: $77.9 million
- Net cash used in financing activities: $20.2 million
How Latham Group, Inc. (SWIM) Makes Money
Revenue Sources
Latham Group, Inc. generates revenue primarily through the sales of in-ground swimming pools, liners, and safety covers. For the fiscal quarter ended September 28, 2024, net sales were reported at $150.5 million, down from $160.8 million in the same quarter the previous year, reflecting a decrease of 6.4% due to decreased sales volume and lower pricing.
Net Sales Breakdown
| Product Line | Net Sales (Q3 2024) | Net Sales (Q3 2023) | Change ($) | Change (%) |
|---|---|---|---|---|
| In-ground swimming pools | $141.4 million | $149.5 million | ($8.1 million) | (5.4%) |
| Liners | $27.5 million | $30.0 million | ($2.5 million) | (8.3%) |
| Covers | $3.6 million | $3.3 million | $0.3 million | 9.1% |
Cost of Sales and Gross Margin
The cost of sales for the fiscal quarter ended September 28, 2024, was $101.8 million, down from $112.6 million in Q3 2023. This reduction resulted in a gross margin increase to 32.4% from 29.9% in the prior year. The decrease in cost of sales was attributed to lower production costs and efficiencies gained through lean manufacturing and value engineering initiatives.
Operating Expenses
For the same quarter, selling, general, and administrative expenses increased to $28.3 million, up from $23.4 million in Q3 2023. The increase was driven by heightened spending on marketing and performance-based compensation, reflecting strategic investments aimed at market recovery.
Net Income and Adjusted EBITDA
Net income for the fiscal quarter was $5.9 million, a decrease from $6.2 million year-over-year. The net income margin remained stable at 3.9%. Adjusted EBITDA fell to $29.8 million from $36.1 million, resulting in an adjusted EBITDA margin of 19.8%, compared to 22.4% in Q3 2023.
Debt and Interest Expenses
Interest expense for the quarter was $9.2 million, compared to $6.0 million the previous year, reflecting increased borrowings. As of September 28, 2024, total outstanding indebtedness was $282.8 million.
Strategic Acquisition
On August 2, 2024, Latham Group completed the acquisition of Coverstar Central for $64.0 million. This strategic move is expected to enhance margins and sales growth through vertical integration in automatic safety covers.
Market Conditions
Ongoing macroeconomic challenges have led to a decline in new in-ground pool installations, impacting sales volumes. The company continues to focus on fiberglass pools, which have shown resilience compared to other products.
Financial Summary for Three Fiscal Quarters Ended September 28, 2024
| Item | Amount (in thousands) |
|---|---|
| Net Sales | $421,247 |
| Cost of Sales | $288,948 |
| Gross Profit | $132,299 |
| Selling, General & Administrative Expenses | $81,174 |
| Net Income | $11,310 |
| Adjusted EBITDA | $76,598 |
Future Outlook
Latham Group is positioning itself for potential recovery by investing in marketing and product development, particularly in fiberglass pools. The company aims to maintain operational efficiencies while navigating current economic conditions.
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Resources:
- Latham Group, Inc. (SWIM) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Latham Group, Inc. (SWIM)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Latham Group, Inc. (SWIM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.