Yahoo Finance Latham Group Inc (SWIM) Q1 2024 Earnings: Narrower Losses and Revenue Decline Amid Economic ...
Revenue: Reported at $110.6 million, surpassing estimates of $101.49 million.
Net Loss: Recorded at $7.9 million, an improvement from the previous year and better than the estimated loss of $10.26 million.
Earnings Per Share (EPS): Reported a loss of $0.07 per share, better than the estimated loss of $0.08 per share.
Gross Margin: Increased to 27.7%, up from 24.2% in the previous year, reflecting improved cost structures and productivity.
Adjusted EBITDA: Amounted to $12.3 million, showing an increase from $11.0 million year-over-year and surpassing guidance expectations.
Debt Repayment: Ended the quarter with significant debt repayment, reducing total debt to $282.8 million and maintaining a net debt leverage ratio of 2.7.
Capital Expenditures: Decreased to $5.3 million from $9.9 million in the prior year, aligning with strategic cost management efforts.
Latham Group Inc (NASDAQ:SWIM), a leading designer and manufacturer of in-ground residential swimming pools, released its 8-K filing on May 7, 2024, detailing the financial outcomes for the first quarter ended March 30, 2024. The company reported a net loss of $7.9 million on net sales of $110.6 million, reflecting a significant revenue decline from the previous year but an improvement in net loss figures.
Company Overview
Latham Group Inc is renowned for its comprehensive range of in-ground swimming pools, liners, and covers, primarily serving markets in North America, Australia, and New Zealand. The majority of its revenue is generated from the United States, where it holds a commanding market presence.
Financial Performance Insights
The first quarter of 2024 saw Latham Group Inc posting net sales of $110.6 million, a decrease of 19.7% from $137.7 million in the prior year's first quarter. This decline was attributed to tough economic conditions, a lower backlog at the beginning of the year, and normalized seasonality. Despite the revenue dip, the company managed to reduce its net loss to $7.9 million, or $0.07 per share, improving from a loss of $14.4 million, or $0.13 per share, year-over-year.
Gross profit stood at $30.6 million with a gross margin of 27.7%, up from 24.2% in the previous year, driven by enhanced cost structures and productivity from ongoing lean and value engineering efforts. Selling, general, and administrative expenses decreased by 20.6% to $26.3 million, primarily due to lower non-cash stock-based compensation and reduced headcount.
Strategic Developments and Product Innovations
President and CEO Scott Rajeski highlighted the company's strategic advancements, including the introduction of new fiberglass pool models and the rollout of Measure by Latham, an AI-powered measurement tool for covers and liners. These initiatives are part of Latham's broader strategy to enhance product offerings and drive demand amidst challenging market conditions.
"Our first quarter results represented a good start to 2024 and reflected the benefits of Lathams strong execution, cost savings, and lean and value engineering initiatives," stated Scott Rajeski.
Operational and Financial Metrics
Adjusted EBITDA for the quarter was $12.3 million, marking an 11.4% increase from the prior year, with an adjusted EBITDA margin of 11.1%. The company ended the quarter with $43.8 million in cash, after repaying $18.8 million of debt, and reported a net debt leverage ratio of 2.7.
Outlook and Forward Guidance
Latham Group Inc reaffirmed its full-year 2024 guidance, projecting net sales between $490 million and $520 million, and adjusted EBITDA between $60 million and $70 million. These projections reflect the company's cautious optimism about overcoming current industry challenges through strategic growth initiatives and cost management.
The company remains committed to driving the adoption of fiberglass pools and automatic safety covers, alongside implementing cost-reduction strategies to improve profitability and market position in the upcoming peak pool building season.
For more detailed information and to participate in the upcoming conference call discussing these results, investors and interested parties can access the call through Latham's investor relations website.
Latham Group Inc's strategic maneuvers in product innovation and market adaptation underscore its resilience in navigating prevailing economic headwinds, setting a cautiously optimistic tone for the fiscal year ahead.
Explore the complete 8-K earnings release (here) from Latham Group Inc for further details.
This article first appeared on GuruFocus.
