Latham Group (SWIM) Posts Breakeven Q4 Earnings, Tops on Sales
Latham Group, Inc. SWIM reported decent fourth-quarter fiscal 2023 results, delivering breakeven earnings and surpassing the Zacks Consensus Estimate for net sales.
On a year-over-year basis, the top line declined, while the bottom line increased from the prior-year quarter’s figure. The downtick was due to lower volumes of in-ground swimming pools.
Inside the Numbers
Latham Group reported breakeven earnings surpassing the Zacks Consensus Estimate of an adjusted loss per share of 14 cents. In the prior-year quarter, the company reported an adjusted loss per share of 17 cents.
Latham Group, Inc. Price, Consensus and EPS Surprise
Latham Group, Inc. price-consensus-eps-surprise-chart | Latham Group, Inc. Quote
Total net sales of $90.9 million beat the consensus mark of $88.1 million by 3.1%. However, the top line fell 15.8% on a year-over-year basis.
Segmental Detail
During fourth-quarter 2023, sales in the In-Ground Swimming Pools segment amounted to $45.8 million, down 22.6% from the prior-year quarter’s levels.
Sales in the Covers segment fell 10.1% year over year to $32 million. However, cover sales surpassed the overall market decline, partly due to the increased demand for automatic safety covers.
Liners segment’s sales of $13.1 million dropped 0.5% from the year-earlier quarter’s figure. The segment benefited from strong replacement demand, remaining stable year over year.
Operating Highlights
Gross profit margin came in at 23.3%, up 540 basis points (bps) year over year. The upside was backed by lower material costs and increased labor productivity associated with the company’s cost-reduction efforts.
Total adjusted EBITDA during the reported quarter amounted to $9.9 million, up 125.8% from $4.4 million reported in the prior-year quarter. The adjusted EBITDA margin expanded 680 bps from the prior year to 10.9%.
Fiscal 2023 Highlights
Total net sales in 2023 amounted to $566.5 million compared with $695.7 million in 2022.
Adjusted EBITDA totaled $88 million compared with $143.3 million a year ago.
Adjusted loss per share came in at 2 cents compared with 5 cents reported in the previous year.
Balance Sheet
As of Dec 31, 2023, the company had cash on hand of $102.8 million compared with $32.6 million at fiscal 2022-end. Long-term debt (net of discount, debt issuance costs and current portion) was $280 million, down from $309.6 million at the fiscal 2022-end.
First-Quarter Fiscal 2024 Outlook
For first-quarter fiscal 2024, net sales are projected to be in the range of $98-$104 million, suggesting a fall from $137.7 million a year ago.
The adjusted EBITDA is anticipated to be in the range of $6-$8 million, down from $11 million a year ago.
Fiscal 2024 Outlook
For 2024, net sales are projected to be in the range of $490-$520 million. The adjusted EBITDA is anticipated to be in the range of $60-$70 million.
Zacks Rank
Latham Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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