DEF: Latham Group Invites Stockholders to 2025 Annual Meeting, Highlights 2024 Achievements and Growth Initiatives

Latham Group announces its 2025 Annual Meeting of Stockholders and reflects on outperforming the U.S. in-ground pool market in 2024 through fiberglass share gains and strategic acquisitions.

Summary

• Latham Group will hold its 2025 Annual Meeting of Stockholders on May 1, 2025, in Saratoga Springs, NY.
• In 2024, Latham outperformed the U.S. in-ground pool market, driven by fiberglass pool sales representing 75% of total in-ground pool sales and the acquisition of Coverstar Central.
• The company is focused on expanding in the Sand States (Florida, Texas, Arizona, and California), which account for two-thirds of U.S. new in-ground pool starts, but only 17% of Latham's fiberglass pool sales in 2024.
• Lean manufacturing and value engineering initiatives led to gross margin and adjusted EBITDA margin expansion in 2024.
• Latham concluded 2024 with a cash balance of $56 million.
• The company believes its leadership in fiberglass pools, expanding automatic safety cover business, Sand States growth, and improved cost structure will support market outperformance in 2025.
• Stockholders are encouraged to vote on the election of three Class I directors and the ratification of Deloitte & Touche LLP as the independent registered public accounting firm for 2025.
• The Board is committed to effectuating fully independent standing Committees (Audit, Compensation, and Nominating and Corporate Governance) and a plurality plus resignation policy for uncontested director elections by no later than the 2028 annual meeting of stockholders.

Sentiment

Score: 7

Explanation: The document presents a generally positive outlook, highlighting market outperformance and strategic growth initiatives, but acknowledges a net loss, resulting in a moderately positive sentiment.

Positives

• Latham outperformed the U.S. in-ground pool market in 2024.
• Fiberglass pool sales are a significant driver of revenue, representing 75% of total in-ground pool sales.
• The acquisition of Coverstar Central provides access to a network of 400 pool builders and dealers.
• Lean manufacturing and value engineering initiatives have improved profitability.
• The company has a strong cash balance of $56 million, providing financial flexibility.
• The company is committed to ESG initiatives and has published a 2023 ESG report.

Negatives

• The company reported a net loss of $17.9 million in 2024.
• The U.S. pool starts declined approximately 15%.

Risks

• Challenging macroeconomic conditions could impact future performance.
• The company faces competition in the in-ground pool market.
• The company's success depends on its ability to execute its growth strategy in the Sand States.
• The company's performance is subject to risks set forth under 'Risk Factors' in the most recent Annual Report on Form 10-K.

Future Outlook

Latham believes its leadership in the growing fiberglass pool category, expanding automatic safety cover business, growth opportunities in the Sand States, and improved cost structure should support another year of market outperformance under similar industry conditions to 2024.

Industry Context

Latham is the largest designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand, holding the #1 position in North America in every product category in which it competes.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards in terms of financial performance or operational metrics.
• The document mentions outperforming the U.S. in-ground pool market, but does not provide specific details on how Latham's performance compares to its competitors.
• The document does not provide specific comparisons to companies such as Hayward Holdings, Inc., MasterCraft Boat Holdings, Inc., and Trex Company, Inc.

Management Changes

Corporate Governance

Related Party Transactions

• The Stockholders Agreement grants Pamplona the right to nominate directors to the Board based on their ownership percentage.
• The Stockholders Agreement requires the company to reimburse the reasonable out-of-pocket costs and expenses of the Principal Stockholders and their affiliates in connection with monitoring and overseeing their investment in us.
• We entered into indemnification agreements with each of our current directors and executive officers.

Stakeholder Impact

• Stockholders are encouraged to participate in the annual meeting and vote on key proposals.
• Employees are subject to a Code of Conduct and Business Ethics.
• The company is committed to ESG initiatives, which impact stakeholders including customers, suppliers, and the environment.

Next Steps

• Stockholders are encouraged to vote on the election of three Class I directors.
• Stockholders are encouraged to vote on the ratification of Deloitte & Touche LLP as the independent registered public accounting firm for 2025.

Key Dates

Keywords

Annual Meeting, Fiberglass Pools, In-ground Pools, Latham Group, Coverstar Central, Sand States, Stockholders, Directors, Proxy Statement, Deloitte & Touche, ESG