- Year-Over-Year Sales Growth Achieved Across All Three Product Lines; Positive Sales Trends Continued in April
- Sand State Strategy on Track with Double-Digit Sales Growth in
Florida - Gross Margin Expanded by 220 Basis Points Benefiting from Volume Leverage, Lean Manufacturing and Value Engineering Efficiencies
- Reaffirms Full Year Guidance for 9.0% Net Sales Growth and 12.7% Adjusted EBITDA Growth at the Midpoints
First Quarter 2026 Financial Highlights:
- Net sales of
$117.3 million , up 5.3% - Net loss of
$8.5 million / Net loss per diluted share of$0.07 - Adjusted EBITDA of
$12.2 million / 10.4% of net sales
Commenting on the results,
“We continued to gain traction in
First Quarter 2026 Results Compared to the Prior-Year Period
Net sales increased 5.3% to
| First Quarter (in thousands) | ||||
| Fiscal Quarter Ended | ||||
| In-Ground Swimming Pools | $ | 59,731 | $ | 57,734 |
| Covers | 33,498 | 31,611 | ||
| Liners | 24,086 | 22,075 | ||
| Total | $ | 117,315 | $ | 111,420 |
Gross profit increased by 13.0% to
Selling, general, and administrative expenses (“SG&A”) increased by 19.5% to
Net loss was
Adjusted EBITDA increased by 9.2% to
Balance Sheet, Cash Flow, and Liquidity
Total debt was
Capital expenditures totaled
Summary and Outlook
“Latham continues to be distinguished in the marketplace by our consistent outperformance compared to new
“We are pleased to reaffirm our guidance, which is contained in the table below and represents year-over-year sales growth of 9.0% and adjusted EBITDA growth of 12.7%, at the midpoints, within a
| FY 2026 Guidance Ranges | ||
| Low | High | |
| Adjusted EBITDA1 | ||
| Capital Expenditures | ||
1) A reconciliation of Latham’s projected Adjusted EBITDA to net income (loss) for 2026 is not available without unreasonable effort due to uncertainty related to our future income tax expense (benefit).
Conference Call Details
Participants are encouraged to pre-register for the conference call by visiting https://dpregister.com/sreg/10207783/103af06e389. Callers who pre-register will be sent a confirmation e-mail including a conference passcode and unique PIN to gain immediate access to the call. Participants may pre-register at any time, including up to and after the call start time. To ensure you are connected for the full call, please register at least 10 minutes before the start of the call.
A live audio webcast of the conference call, along with related presentation materials, will be available online at https://ir.lathampool.com/ under “Events & Presentations”.
Those without internet access or unable to pre-register may dial in by calling:
PARTICIPANT DIAL IN (TOLL FREE): 1-833-953-2435
PARTICIPANT INTERNATIONAL DIAL IN: 1-412-317-5764
An archived webcast will be available approximately two hours after the conclusion of the call, through
About
Non-GAAP Financial Measures
We track our non-GAAP financial measures to monitor and manage our underlying financial performance. This earnings release includes the presentation of Adjusted EBITDA, Adjusted EBITDA margin, net debt and net debt leverage ratio which are non-GAAP financial measures that exclude the impact of certain costs, losses, and gains that are required to be included under
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA and Adjusted EBITDA margin are key metrics used by management and our board of directors to assess our financial performance. Adjusted EBITDA and Adjusted EBITDA margin are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures. We use Adjusted EBITDA and Adjusted EBITDA margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to utilize as a significant performance metric in our incentive compensation plans, and to compare our performance against that of other companies using similar measures. We have presented Adjusted EBITDA and Adjusted EBITDA margin solely as supplemental disclosures because we believe they allow for a more complete analysis of results of operations and assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as (i) depreciation and amortization, (ii) interest expense, net, (iii) income tax expense (benefit), (iv) (gain) loss on sale and disposal of property and equipment, (v) restructuring charges, (vi) stock-based compensation expense, (vii) unrealized (gains) losses on foreign currency transactions, (viii) strategic initiative costs, (ix) acquisition and integration related costs and (x) other.
Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures and should not be considered as alternatives to net income (loss) as a measure of financial performance or any other performance measure derived in accordance with GAAP, and they should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. We encourage you to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA and Adjusted EBITDA margin, you should be mindful that in the future we may incur expenses that are the same as or similar to some of the adjustments in this earnings release. There can be no assurance that we will not modify the presentation of Adjusted EBITDA and Adjusted EBITDA margin in the future, and any such modification may be material. In addition, other companies, including companies in our industry, may not calculate Adjusted EBITDA and Adjusted EBITDA margin at all or may calculate Adjusted EBITDA and Adjusted EBITDA margin differently and accordingly, are not necessarily comparable to similarly entitled measures of other companies, which reduces the usefulness of Adjusted EBITDA and Adjusted EBITDA margin as tools for comparison.
Adjusted EBITDA and Adjusted EBITDA margin have their limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are that Adjusted EBITDA and Adjusted EBITDA margin:
- do not reflect every expenditure, future requirements for capital expenditures or contractual commitments;
- do not reflect changes in our working capital needs;
- do not reflect the interest expense, net, or the amounts necessary to service interest or principal payments, on our outstanding debt;
- do not reflect income tax (benefit) expense, and because the payment of taxes is part of our operations, tax expense is a necessary element of our costs and ability to operate;
- do not reflect non-cash stock-based compensation, which will remain a key element of our overall compensation package; and
- do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations.
Although depreciation and amortization are eliminated in the calculation of Adjusted EBITDA and Adjusted EBITDA margin, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA and Adjusted EBITDA margin do not reflect any costs of such replacements.
Net Debt and Net Debt Leverage Ratio
Net Debt and Net Debt Leverage Ratio are non-GAAP financial measures used in monitoring and evaluating our overall liquidity, financial flexibility, and leverage. Other companies may calculate similarly titled non-GAAP measures differently, limiting their usefulness as comparative measures. We define Net Debt as total debt less cash and cash equivalents. We define the Net Debt Leverage Ratio as Net Debt divided by last twelve months (“LTM”) of Adjusted EBITDA. We believe this measure is an important indicator of our ability to service our long-term debt obligations. There are material limitations to using Net Debt Leverage Ratio as we may not always be able to use cash to repay debt on a dollar-for-dollar basis.
Forward-Looking Statements
Certain statements in this earnings release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this release other than statements of historical fact may constitute forward-looking statements, including statements regarding our future operating results and financial position, our business strategy and plans, business and market trends, our objectives for future operations, macroeconomic and geopolitical conditions, acquisitions and related benefits, the implementation of our cost reduction plans and expected benefits, and the sufficiency of our cash balances, working capital and cash generated from operating, investing, and financing activities for our future liquidity and capital resource needs. These statements involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside of our control, which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including: potential breaches to our technological infrastructure and information systems; geopolitical instability and market instability caused by such instability, including as a result of the conflict in the
Although we believe that the expectations reflected in the forward-looking statements are reasonable and our expectations based on third-party information and projections are from sources that management believes to be reputable, we cannot guarantee future results, levels of activities, performance or achievements. These forward-looking statements reflect our views with respect to future events as of the date hereof or the date specified herein, and we have based these forward-looking statements on our current expectations and projections about future events and trends. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we undertake no obligation to update or review publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date hereof. We anticipate that subsequent events and developments will cause our views to change. Our forward-looking statements further do not reflect the potential impact of any future acquisitions, merger, dispositions, joint ventures or investments we may undertake.
Contact:
ADVISIR
lathamir@advisiry.com
212-750-5800
Condensed Consolidated Statements of Operations (in thousands, except share and per share data) (unaudited) | |||||||||
| Fiscal Quarter Ended | |||||||||
| Net sales | $ | 117,315 | $ | 111,420 | |||||
| Cost of sales | 80,158 | 78,539 | |||||||
| Gross profit | 37,157 | 32,881 | |||||||
| Selling, general, and administrative expense | 36,589 | 30,620 | |||||||
| Amortization | 7,169 | 7,192 | |||||||
| Loss from operations | (6,601 | ) | (4,931 | ) | |||||
| Other expense: | |||||||||
| Interest expense, net | 4,756 | 6,371 | |||||||
| Other expense (income), net | 818 | (308 | ) | ||||||
| Total other expense, net | 5,574 | 6,063 | |||||||
| Earnings from equity method investment | 835 | 953 | |||||||
| Loss before income taxes | (11,340 | ) | (10,041 | ) | |||||
| Income tax benefit | (2,806 | ) | (4,079 | ) | |||||
| Net loss | $ | (8,534 | ) | $ | (5,962 | ) | |||
| Net loss per share attributable to common stockholders: | |||||||||
| Basic | $ | (0.07 | ) | $ | (0.05 | ) | |||
| Diluted | $ | (0.07 | ) | $ | (0.05 | ) | |||
| Weighted-average common shares outstanding?–?basic and diluted | |||||||||
| Basic | 116,894,080 | 115,885,111 | |||||||
| Diluted | 116,894,080 | 115,885,111 | |||||||
Condensed Consolidated Balance Sheets (in thousands, except share and per share data) (unaudited) | ||||||||
| 2026 | 2025 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 27,481 | $ | 71,043 | ||||
| Trade receivables, net | 89,213 | 39,914 | ||||||
| Inventories, net | 87,609 | 74,926 | ||||||
| Income tax receivable | 15,203 | 12,178 | ||||||
| Prepaid expenses and other current assets | 10,367 | 20,943 | ||||||
| Total current assets | 229,873 | 219,004 | ||||||
| Property and equipment, net | 138,154 | 118,820 | ||||||
| Equity method investment | 27,317 | 26,482 | ||||||
| Deferred tax assets | 1,056 | 718 | ||||||
| Operating lease right-of-use assets | 29,621 | 30,723 | ||||||
| 161,144 | 155,189 | |||||||
| Intangible assets, net | 265,541 | 268,073 | ||||||
| Other assets | 3,699 | 4,214 | ||||||
| Total assets | $ | 856,405 | $ | 823,223 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 29,874 | $ | 19,283 | ||||
| Revolving Credit Facility | 31,000 | — | ||||||
| Current maturities of long-term debt | 3,250 | 3,250 | ||||||
| Income tax payable | 619 | — | ||||||
| Current operating lease liabilities | 6,792 | 7,630 | ||||||
| Accrued expenses and other current liabilities | 50,732 | 48,979 | ||||||
| Total current liabilities | 122,267 | 79,142 | ||||||
| Long-term debt, net of discount, debt issuance costs, and current portion | 276,983 | 276,591 | ||||||
| Deferred income tax liabilities, net | 34,269 | 34,269 | ||||||
| Non-current operating lease liabilities | 23,633 | 23,964 | ||||||
| Other long-term liabilities | 2,551 | 3,396 | ||||||
| Total liabilities | $ | 459,703 | $ | 417,362 | ||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, | — | — | ||||||
| Common stock, | 12 | 12 | ||||||
| Additional paid-in capital | 472,145 | 473,423 | ||||||
| Accumulated deficit | (72,226 | ) | (63,692 | ) | ||||
| Accumulated other comprehensive loss | (3,229 | ) | (3,882 | ) | ||||
| Total stockholders’ equity | 396,702 | 405,861 | ||||||
| Total liabilities and stockholders’ equity | $ | 856,405 | $ | 823,223 | ||||
Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) | ||||||||
| Fiscal Quarter Ended | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (8,534 | ) | $ | (5,962 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 13,067 | 12,400 | ||||||
| Gain on insurance proceeds received for capital | ||||||||
| Unrealized foreign currency loss (gain) | 848 | (417 | ) | |||||
| Amortization of deferred financing costs and debt discount | 430 | 430 | ||||||
| Non-cash lease expense | 1,855 | 1,776 | ||||||
| Change in fair value of interest rate swap | (841 | ) | 283 | |||||
| Stock-based compensation expense | 1,104 | 1,971 | ||||||
| Bad debt expense | 815 | 875 | ||||||
| Other non-cash, net | 62 | (63 | ) | |||||
| Earnings from equity method investment | (835 | ) | (953 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Trade receivables | (49,505 | ) | (52,550 | ) | ||||
| Inventories | (9,630 | ) | (9,559 | ) | ||||
| Prepaid expenses and other current assets | (836 | ) | 189 | |||||
| Income tax receivable | (3,025 | ) | (4,624 | ) | ||||
| Other assets | (120 | ) | (10 | ) | ||||
| Accounts payable | 9,708 | 14,271 | ||||||
| Accrued expenses and other current liabilities | (2,279 | ) | (4,861 | ) | ||||
| Other long-term liabilities | (4 | ) | (78 | ) | ||||
| Net cash used in operating activities | (47,720 | ) | (46,882 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (10,500 | ) | (3,452 | ) | ||||
| Acquisition of business, net of cash acquired | (14,399 | ) | (4,934 | ) | ||||
| Net cash used in investing activities | (24,899 | ) | (8,386 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from borrowings on revolving credit facility | 31,000 | 25,000 | ||||||
| Repayments of finance lease obligations | (216 | ) | (201 | ) | ||||
| Common stock withheld for taxes on restricted stock units | (2,382 | ) | (2,306 | ) | ||||
| Net cash provided by financing activities | 28,402 | 22,493 | ||||||
| Effect of exchange rate changes on cash | 655 | 343 | ||||||
| Net decrease in cash | (43,562 | ) | (32,432 | ) | ||||
| Cash at beginning of period | 71,043 | 56,398 | ||||||
| Cash at end of period | $ | 27,481 | $ | 23,966 | ||||
| Supplemental cash flow information: | ||||||||
| Cash paid for interest | $ | 5,348 | $ | 6,266 | ||||
| Income taxes paid, net | (118 | ) | 344 | |||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Purchases of property and equipment included in accounts payable and accrued expenses | $ | 698 | $ | 1,360 | ||||
| Right-of-use operating and finance lease assets obtained in exchange for lease liabilities | 7,785 | 994 | ||||||
| Purchase of property and equipment through settlement of deposit | 12,000 | — | ||||||
Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation (Non-GAAP Reconciliation) (in thousands) | ||||||||
| Fiscal Quarter Ended | ||||||||
| Net loss | $ | (8,534 | ) | $ | (5,962 | ) | ||
| Depreciation and amortization | 13,067 | 12,400 | ||||||
| Interest expense, net | 4,756 | 6,371 | ||||||
| Income tax benefit | (2,806 | ) | (4,079 | ) | ||||
| Gain on sale and disposal of property and equipment | — | (69 | ) | |||||
| Restructuring charges(a) | — | 15 | ||||||
| Stock-based compensation expense(b) | 1,104 | 1,971 | ||||||
| Unrealized losses (gains) on foreign currency transactions(c) | 997 | (417 | ) | |||||
| Strategic initiative costs(d) | 450 | 644 | ||||||
| Acquisition and integration related costs(e) | 3,126 | 267 | ||||||
| Other(f) | — | (2 | ) | |||||
| Adjusted EBITDA | $ | 12,160 | $ | 11,139 | ||||
| Net sales | $ | 117,315 | $ | 111,420 | ||||
| Net loss margin | (7.3 | ) | % | (5.4 | ) | % | ||
| Adjusted EBITDA margin | 10.4 | % | 10.0 | % | ||||
(a) Represents costs that include severance and other expenses for our executive management changes.
(b) Represents non-cash stock-based compensation expense.
(c) Represents unrealized foreign currency transaction losses (gains) associated with our international subsidiaries.
(d) Represents fees paid to external consultants and other expenses for our strategic initiatives.
(e) Represents acquisition and integration costs, as well as other costs related to potential transactions.
(f) Other costs consist of other discrete items as determined by management, primarily including: (i) fees paid to external advisors for various matters and (ii) other items.
Net Debt Leverage Ratio (Non-GAAP Reconciliation) (in thousands) | ||||
| Total Debt | $ | 311,233 | ||
| Less: | ||||
| Cash | (27,481 | ) | ||
| Net Debt | 283,752 | |||
| LTM Adjusted EBITDA(1) | 100,852 | |||
| Net Debt Leverage Ratio | 2.81x | |||
(1) LTM Adjusted EBITDA is defined as Adjusted EBITDA for the most recent 12-month period.
