Form 8-K - Current report

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): November 20, 2024

 

Latham Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware	001-40358	83-2797583
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

 

787 Watervliet Shaker Road, Latham, NY		12110
(Address of principal executive offices)		(Zip Code)

[phone]
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, par value $0.0001 per share		SWIM		The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

Item 7.01

Regulation FD Disclosure.

 

On November 20, 2024, Latham Group, Inc. ("Latham") will host current and prospective investors and certain coverage analysts at its Zephyrhills, Florida fiberglass pool manufacturing and training site.  The Zephyrhills site visit will include a tour of the facility, demonstrations of fiberglass pool production and installation and management presentations followed by questions and answers regarding Latham's business strategy, including its strategy to increase fiberglass pool adoption and sales in the states of Florida, Texas, Arizona, Nevada and California.

 

A copy of the materials to be presented by Latham’s management team are attached hereto as Exhibit 99 and incorporated herein by reference. The information furnished with this Item 7.01 (including Exhibit 99) of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

 

Item 9.01

Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.		Description
99		Presentation, dated November 20, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: November 20, 2024

 

	LATHAM GROUP, INC.
	By:	/s/ Scott M. Rajeski
	Name:	Scott M. Rajeski
	Title:	Chief Executive Officer and President

 

 

 

 

Exhibit 99

 

Latham Group Zephyrhills, FL Site Visit November 20, 2024

 

 

Forward - looking Statements Certain statements in this presentation constitute forward - looking statements within the meaning of the Private Securities Litig ation Reform Act of 1995. All statements contained in this presentation other than statements of historical fact may constitute forward - looking statements, including statements regarding our future operating results, sales re venue, earnings and financial position, our business strategy and plans, such as our Sand State strategy, the growth of our automatic safety covers and the potential benefits of our Measure by Latham introduction, busines s a nd market trends, including potential new pool starts, our objectives for future operations, macroeconomic and geopolitical conditions, the implementation of our lean manufacturing, value engineering and other cost red uct ion activities, 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 inv olv e 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 fro m any future results, performance or achievements expressed or implied by the forward - looking statements, including: unfavorable economic conditions and related impact on consumer spending; adverse weather conditions im pac ting our sales, and can lead to significant variability of sales in reporting periods; our ability to successfully execute our strategy to increase product sales in the Sand States (Florida, Texas, Arizona, Nevada an d C alifornia); our ability to inform prospective customers of the advantages of fiberglass swimming pools and our other products and influence their purchase decisions; natural disasters, including resulting from climate chan ge, geopolitical events, war, terrorism, public health issues or other catastrophic events; competitive risks; our ability to attract, develop and retain highly qualified personnel; inflationary impacts, including on con sumer demand; our ability to source raw materials and components for manufacturing our products; our ability to collect account receivables from customers; our ability to keep pace with technological developments and stand ard s, such as generative artificial intelligence; the consequences of industry consolidation on our customer base and pricing; interruption of our production capability at our manufacturing facilities from accident, fire, cal ami ty, regulatory action or other causes; product quality issues, warranty claims or safety concerns such as those due to the failure of builders to follow our product installation instructions and specifications; delays in, o r s ystems disruptions issues caused by the implementation of our enterprise resource planning system; cyber - security breaches and data leaks, and our dependence on information technology systems; compliance with government regulat ions; our ability to obtain transportation services; the protection of our intellectual property and defense of third - party infringement claims; international business risks; and our ability to secure financing and o ur substantial indebtedness; and other factors set forth under “Risk Factors” and elsewhere in our most recent Annual Report on Form 10 - K and subsequent reports we file or furnish with the SEC. Moreover, we operate in a very co mpetitive and rapidly changing environment, and new risks emerge from time to time that may impair our business, financial condition, results of operations and cash flows. 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 statemen ts 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 t rends. 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 state ments, 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 fur ther do not reflect the potential impact of any future acquisitions, merger, dispositions, joint ventures or investments we may undertake. Non - GAAP Financial Measures This presentation includes Adjusted EBITDA on a historical and pro forma basis, and Adjusted EBITDA Margin, which are non - GAAP f inancial measures. Our pro forma presentation gives effect to the Coverstar Central, LLC (“Coverstar Central”) acquisition as if it occurred as of January 1, 2023. These non - GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to GAAP financial measures and should not be construed as an inference that our future results will be unaffected by unusual or non - recurring items. A reco nciliation of Latham’s projected Adjusted EBITDA and Adjusted EBITDA Margin to directly comparable GAAP financial measures are not available without unreasonable effort due to uncertainty related to our future inc ome tax expense (benefit). Reconciliations of directly comparable GAAP financial measures to our historical non - GAAP financial measures can be found in the Appendix to this presentation. For the definitions of certain non - GAAP financial measures, how such non - GAAP financial measures provide useful information to i nvestors, how management utilizes them and the limitations on their use, see our earnings release issued as of November 5, 2024. Disclaimer 2

 

 

On - Site Agenda President & CEO CFO Scott Rajeski Oliver Gloe Business & Financial Overview Director of Sales, Sand States Josh Rickaby Accelerating the Sand State Strategy Technical Field Specialist President & CEO, Concord Pools & Spas Director of Strategy, Concord Pools & Spas Wayne Hoban Jon Foshee Gregg Pidgeon Building the Fiberglass Dealer Network: Dealer Training Conversation with a Dealer All Presenters Q&A COO VP, Fiberglass Operations Sanjeev Bahl Steve Miller Facility Tour All Presenters Wrap - Up & Final Q&A

 

 

Business & Financial Overview

 

 

5 Year - To - Date Accomplishments Completed accretive acquisition , paid for with cash on hand On track to outperform the market again in 2024 Increased investments to position Latham for future growth Continue to gain production efficiencies that have structurally changed our cost base Retained a strong financial position $

 

 

28% 11% 11% 17% 33% Non - Sand States 24K Pools Florida 20K Pools Arizona 8K Pools California 12K Pools Texas 8K Pools 2023 Pool Starts by State (2) (1) 2023 PK Data (2) Estimated based on permit data (3) Latham Fiberglass pool share in the US 2023 Latham Fiberglass Poo ls (3) ~15% ~85% Sand State Strategy | Driving Fiberglass Adoption 6 Total Pool Sales 72K Total Pools 2023 New In - Ground Pools by State (1) Sand States Non - Sand States Vast Majority of In - Ground Pool Sales Happen in the Sand States - FL, TX, AZ & CA

 

 

Sand State Strategy | Key Priorities 7 Expanding the Pool Dealer Base • Driving pool builder expansion and development • Opportunities to “stand up” new builders and convert concrete builders to Fiberglass Marketing to Consumers & Builders • Highlight Fiberglass benefits to consumers: faster installation, lower cost of ownership than concrete • Highlight Fiberglass benefits to builders: more profitable, faster to scale than concrete • Launched a new Fiberglass marketing campaign – “Get Out Of The Stone Age” (GOOTSA) – with plans to broaden its reach in 2025 Targeting Master Planned Communities (MPC’s) • Massive opportunity in Master Planned Communities; ~30K new homes constructed in Master Planned Communities in 2023 • 75% of largest Master Planned Communities found in Florida and Texas 1 2 4 Aligning Products with Demand • Rectangular shapes, pool/spa combos, and plunge pools are increasingly popular in the Sand States • Extending pool model offerings to meet this demand 3

 

 

Productivity Gains | Cost Structure 8 $1 $1 $2 $2 $3 $4 $4 $6 $6 $3 $2 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Lean Manufacturing / Value Engineering Restructuring Drove Meaningful Cost Structure Improvements Since 2023 (in millions) $7 $7 $5 $4

 

 

Zephyrhills Productivity Gains | Lean Manufacturing & Value Engineering 9 Lean Manufacturing : Product Flow Value Engineering : Fabric Utilization Before Kaizen After Kaizen Lean Manufacturing improvements: • >50% reduction in shell travel time • Lower forklift / crane wear and tear • Improving operator safety 53 miles in part travel reduction / year Before Initiative After Initiative Value Engineering improvements: • Reduction in the variation of cut lengths • Higher consistency of cuts • Reduction in floor space at production 50 lbs. of fabric & resin reduction / pool

 

 

10 Latham Key Growth Drivers Accelerating Fiberglass Share Gain in the Sand States along with ongoing market penetration 1 Continuing to Drive Awareness and Adoption of Automatic Safety Covers 2 Full Roll - Out of “Measure by Latham” for Pool Liners & Winter Covers 3 Our goal of continuing to outperform the market Significant long - term growth in Net Sales & Adjusted EBITDA These Drivers Support:

 

 

Impact of Growth Initiatives & Production Efficiencies 11 (1) Historical pool starts determined from PK Data; 2024 and beyond are based on management estimates. (2) Unaudited (3) Management model (4) 25 - year average (1999 - 2024) (5) See Appendix for reconciliation of Adjusted EBITDA. Adjusted EBITDA Margin is Adjusted EBITDA divided by Net Sales. $36 $61 $80 ~ $160 $223 $318 $505 ~ $750 2015 2019 2024 est. Future Adj. EBITDA 61K Pool Starts 78K Pool Starts 61K Pool Starts ~78K Pool Starts 16% 19% 16% 21% (in millions, except for Adjusted EBITDA Margin) Growth Trajectory Adj. EBITDA % (2) (3) LT Average: 100K Pool Starts (4) 61 67 75 80 78 96 117 98 72 61 ~78 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Future (in thousands) US Pool Starts (1) (2) Initiatives 1. Drive growth in Fiberglass share in the Sand States 2. Drive growth in Automatic Safety Covers , aided by the Coverstar Central acquisition 3. Drive growth in pool Liners and Covers, aided by the full roll - out of “Measure by Latham” 4. Continued impacts of Lean Manufacturing & Value Engineering (3) (3) Net Sales (5) (5)

 

 

Accelerating the Sand State Strategy

 

 

Converting Concrete Dealers to Fiberglass “Standing Up” New Dealers Increasing Productivity of Existing Dealers Expanding Fiberglass Penetration 13 • Engaging with existing dealers to provide training on productivity enhancement • Targeting to increase number of pools built per year, per dealer • Removing obstacles to Fiberglass adoption via training and education • Highlighting advantages of Fiberglass for dealers: speed, efficiency, scalability, cash flow • Exploring new channels through which to increase the installation base, ex: pool services companies, landscaping companies Keys to Fiberglass Penetration in the Sand States: • Creating Installation Capacity • Increasing Consumer & Builder Awareness

 

 

Marketing to Consumers & Builders 14 Marketing to Consumers & Builders • Fiberglass benefits to consumers : faster installation, lower cost of ownership than concrete • Fiberglass benefits to builders : more profitable, faster to scale than concrete • New Fiberglass marketing campaign – “Get Out Of The Stone Age” (GOOTSA) – in targeted areas around Master Planned Communities Keys to Fiberglass Penetration in the Sand States: • Creating Installation Capacity • Increasing Consumer & Builder Awareness “GOOTSA” Campaign Example

 

 

Targeting FL and TX Master Planned Communities 15 Sand State Master Planned Communities Present A Massive Growth Opportunity 2025 Focus: Babcock Ranch (FL) & Silverado (TX) Master Planned Community Silverleaf The Villages Viera Traditional Miranda Lakewood Ranch Babcock Ranch Ave Maria Wellen Park Top Communities Mission Ridge Santa Rita Bridgeland Marvida Sunterra Baytown Silverado

 

 

Building the Fiberglass Dealer Network: Dealer Training

 

 

Benefits of Fiberglass Installation vs. Concrete 17 Control Over The Entire Installation Environment Not Reliant On Multiple Sub - Contractors Faster Installation From Start To Finish Vastly Improved Consumer Experience

 

 

Dealer Bootcamp | Training for Installation 18 Total 2024 (2) 2023 2022 2021 (1) 2020 Bootcamp 54 18 11 8 11 6 Number of Training Events 468 103 121 71 65 108 Fiberglass Bootcamps 188 51 34 54 34 15 Packaged Pool Bootcamps 656 154 155 125 99 123 Total Bootcamp Dealer Participants Hands - On Installation Instruction Available at On - Site Training Center in Zephyrhills, FL (1) Virtual (2) Additional two Fiberglass Bootcamps scheduled for December 2024 Number of Dealers

 

 

Building the Fiberglass Dealer Network: A Conversation with A Dealer

 

 

Achievements & Highlights • Ranked in the Top 1% of pool builders nationwide (1) • More than 100 Fiberglass pools installed per year • Vertically integrated business model; positioning for “portability” – growth beyond the New York market Company History • Established in 1972 • Headquartered in Latham, NY • Recognized as an industry - leading pool builder and pioneer of innovation Key Operational Efforts • Several showrooms and pool centers; open year - round • Highly trained, professional staff • Superior commitment to Quality, Service & Reputation Concord Pools & Spas 20 About Concord (1) Ranked as one of Pool & Spa News’ Top 50 Builders of 2024, out of more than 16,000 pool builders in the US, as estimated by I BIS World.

 

 

Best Fiberglass Pools in the Market Benefits of Market Intelligence Leading Technological Innovation Partnering for Growth 21 Partnering with Latham • Latham’s Fiberglass pools are feature - rich with high - quality finishes and unmatched warranties • Real - time responsiveness from the industry’s largest in - ground pool manufacturer leads to the development of products that meet current market demand • Latham is an early developer and adopter of tools that drive business development and efficiency in the field • Latham acts as a business partner – unique in the pool industry – to drive growth for both Latham and their dealers

 

 

Babcock Ranch 22 About Babcock Key Highlights • Babcock Ranch is a Master Planned Community located in Southwest Florida • Targeting young millennials, growing families, empty nesters, and retirees • The site sits on 17K acres of land, and will ultimately include 19.5K homes, developed by 10 unique builders • At build - out, Babcock Ranch will offer up to 6M sq. ft. of retail, commercial, medical facilities, schools, hotels, office space, and over 100 miles of trails • 4K homes sold as of May 2024 • The upcoming development “ MidTown ” will introduce six new neighborhoods, more amenities, and a shopping center Fiberglass Opportunity • ~60% of homes install a pool withing 18 months of being built (1) Concord Pools & Spas estimates

 

 

Marketing Investment in Master Planned Communities 23 Marketing Investment Marketing Activities • Sponsored events at Master Planned Communities • Showcases Fiberglass pool benefits • Reaches thousands of potential pool owners • Educational seminars, “Why Fiberglass?” • “GOOTSA” marketing campaign launching in FL in Q1 • Ripple effect of each Fiberglass pool installation; fast installation generates interest from neighbors • Opening Design Center showcasing Fiberglass pools Concord Design Center

 

 

Q&A

 

 

Appendix

 

 

(a) Represents the cost of shutting down production and warehouse facilities in Decatur, Georgia and Mississauga, Ontario, Canada , i ncluding the cost to transfer and dispose of property and equipment and involuntary workforce reductions. Also includes severance and other costs for our executive management changes. (b) Represents management fees paid to our Principal Stockholders in accordance with our arrangement. (c) Represents foreign currency transaction (gains) and losses associated with our international subsidiaries and changes in the fai r value of the contingent consideration recorded in connection with the acquisition of Narellan . (d) Represents fees paid to external consultants for our strategic initiatives, including our rebranding initiative. (e) Represents acquisition and integration costs primarily related to the acquisition of Narellan in 2019 and the Wynnchurch acquisition of Latham in 2015, as well as other costs related to a transaction that was abandoned. (f) Other costs consist of other discrete items as determined by management, primarily including: ( i ) fees paid to external advisors for various matters, (ii) non - cash adjustments to record the step - up in the fair value of inven tory related to the acquisition by Pamplona and the acquisition of Narellan , which are amortized through cost of sales in the annual consolidated statements of operations, and (iii) other items. Non - GAAP Reconciliations Adjusted EBITDA and Adjusted EBITDA Margin 26 Year Ended December 31, 2015 (unaudited) 2019 (in thousands) (9,992) $ 7,457 $ Net (loss) income 14,466 21,659 Depreciation and amortization 8,228 22,639 Interest expense 3,384 (4,671) Income tax expense (benefit) — 680 Loss on sale and disposal of property and equipment — 980 Restructuring charges (a) 539 500 Management fees (b) — 808 Stock - based compensation expense 505 (300) Unrealized losses (gains) on foreign currency transactions  (c) 587 964 Strategic initiative costs (d) 11,696 3,612 Acquisition and integration related costs (e) 6,703 6,722 Other (f) 36,116 $ 61,050 $ Adjusted EBITDA 223,103 $ 317,975 $ Net sales (4.5)% 2.3% Net (loss) income margin 16.2% 19.2% Adjusted EBITDA margin

 

Fiberglass Pool Installation Process 27 Video: Ease of Fiberglass Pool Installation

Cover	Nov. 20, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 20, 2024
Entity File Number	001-40358
Entity Registrant Name	Latham Group, Inc.
Entity Central Index Key	0001833197
Entity Tax Identification Number	83-2797583
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	787 Watervliet Shaker Road
Entity Address, City or Town	Latham
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	12110
City Area Code	800
Local Phone Number	833-3800
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, par value $0.0001 per share
Trading Symbol	SWIM
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false

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