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Jun 29, 2024
Latham Q2 2024 Earnings Report
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.
Key Takeaways
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%.
Revenue by Segment
Forward Guidance
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.
Positive Outlook
- Advance the adoption and awareness of both fiberglass pools and automatic safety covers.
- Implement value engineering and lean manufacturing programs to reduce structural costs.
- Invest in organic growth initiatives.
- Evaluate other opportunistic acquisitions.
- Expected five-month contribution of the Coverstar Central acquisition.
Challenges Ahead
- Navigating a year of lower pool starts.
- Challenging industry conditions in 2024.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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