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Latham (SWIM)

Latham, the Pool Company™, headquartered in Latham, NY, is the largest designer, manufacturer and marketer of in-ground residential swimming pools in North America, Australia and New Zealand. With a coast-to-coast operations platform consisting of over 2,000 employees across 32 facilities, Latham has sold over 8,700 fiberglass pools in the United States in 2020.

SWIM stock data

Calendar

11 Aug 22
12 Aug 22
31 Dec 22
Quarter (USD) Jul 22 Apr 22 Dec 21 Oct 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 25.22M 25.22M 25.22M 25.22M 25.22M 25.22M
Cash burn (monthly) (no burn) 4.27M (no burn) (no burn) (no burn) (no burn)
Cash used (since last report) n/a 5.84M n/a n/a n/a n/a
Cash remaining n/a 19.38M n/a n/a n/a n/a
Runway (months of cash) n/a 4.5 n/a n/a n/a n/a

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
4 Aug 22 Robert L. Masson II Common Stock, par value $0.0001 per share Grant Acquire A No No 0 54,592 0 54,592
4 Aug 22 Robert L. Masson II Stock option Common stock Grant Acquire A No No 2.49 151,807 378K 151,807
2 May 22 Pamplona Capital Partners V Common Stock Other Acquire J Yes No 0 12,961,421 0 51,845,685
2 May 22 Pamplona Capital Partners V Common Stock Other Dispose J Yes No 0 12,961,421 0 38,884,264
2 May 22 Pamplona Capital Management Common Stock Other Acquire J Yes No 0 12,961,421 0 51,845,685
2 May 22 Pamplona Capital Management Common Stock Other Dispose J Yes No 0 12,961,421 0 38,884,264
99.7% owned by funds/institutions
13F holders Current Prev Q Change
Total holders 106 3 +3433.3%
Opened positions 103 2 +5050.0%
Closed positions 0 66 EXIT
Increased positions 1 1
Reduced positions 0 0
13F shares Current Prev Q Change
Total value 2.11B 1.73B +21.8%
Total shares 119.24M 84.02M +41.9%
Total puts 0 0
Total calls 0 0
Total put/call ratio
Largest owners Shares Value Change
Pamplona Capital Partners V 61.48M $1.54B 0.0%
Wynnchurch Capital Partners Iv 14.98M $0 0.0%
Kayne Anderson Rudnick Investment Management 8.96M $118.62M +18.6%
Fred Alger Management 6.04M $79.98M NEW
Alliancebernstein 5.06M $67.01M NEW
Vanguard 3.74M $49.48M NEW
BLK Blackrock 2.48M $32.78M NEW
ACK Asset Management 1.91M $25.27M NEW
FHI Federated Hermes 1.48M $19.6M NEW
WFC Wells Fargo & Co. 906.78K $12.01M NEW
Largest transactions Shares Bought/sold Change
Fred Alger Management 6.04M +6.04M NEW
Alliancebernstein 5.06M +5.06M NEW
Vanguard 3.74M +3.74M NEW
BLK Blackrock 2.48M +2.48M NEW
ACK Asset Management 1.91M +1.91M NEW
FHI Federated Hermes 1.48M +1.48M NEW
Kayne Anderson Rudnick Investment Management 8.96M +1.4M +18.6%
WFC Wells Fargo & Co. 906.78K +906.78K NEW
Intrinsic Edge Capital Management 882.79K +882.79K NEW
Zimmer Partners 861.4K +861.4K NEW

Financial report summary

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Risks
  • The demand for our swimming pools and related products may be adversely affected by unfavorable economic conditions and trends in consumer spending.
  • We are susceptible to adverse weather conditions.
  • Our products are sold to other businesses for resale to consumers, and inability to attract dealers and distributors to purchase our products or the loss of our largest customer could adversely affect our results of operations.
  • We may be unable to sustain further growth in our business.
  • A failure to meet customer specifications or consumer expectations could result in lost sales, increased expenses, negative publicity, claims for damages and harm to our brand and reputation.
  • We depend on a global network of third-party suppliers to provide components and raw materials essential to the manufacturing of our pools and price increases or deviations in the quality of the raw materials used to manufacture our products could adversely affect our net sales and operating results.
  • The current outbreak of COVID-19, or the future outbreak of any other highly infectious or contagious diseases, has caused, and may continue to cause, disruption to our business and operations.
  • Mandatory COVID-19 vaccination of employees could impact our workforce and suppliers and have a material adverse effect on our business and results of operations.
  • We depend on third parties for transportation services to some extent, and the lack of availability of and/or increases in the cost of transportation could have a material adverse effect on our business and results of operations.
  • Product quality, warranty claims or safety concerns and other claims in the ordinary course of business could negatively impact our sales, lead to increased costs and expose us to litigation.
  • Our business operations could suffer if we fail to protect adequately our intellectual property rights, and we may experience claims by third parties that we are violating their intellectual property rights.
  • If we are unable to continue to enhance existing products and/or technology and develop and market, including via our digital marketing strategy, new or enhanced products that respond to customer needs and preferences, we may experience a decrease in demand for our products and our business could suffer.
  • We depend on our ability to attract, develop and retain highly qualified personnel.
  • We conduct business internationally, which exposes us to additional risks.
  • We rely on information technology systems to support our business operations. A significant disturbance or breach of our technological infrastructure could adversely affect our financial condition and results of operations. Additionally, failure to maintain the security of confidential information could damage our reputation and expose us to litigation.
  • We process, store and use personal information and other data, which subjects us to governmental regulation and other legal obligations related to privacy, and violation of these privacy obligations could result in a claim for damages, regulatory action, loss of business, or unfavorable publicity.
  • Our insurance coverage may be inadequate to protect against the potential hazards inherent to our business.
  • We continuously evaluate and may in the future enter into additional strategic transactions. Any such transaction could happen at any time, be material to our business and take any number of forms, including, for example, an acquisition, merger, sale of certain of our assets, refinancing, or other recapitalization or material strategic transaction. Evaluating potential transactions and integrating completed ones may divert the attention of our management from ordinary operating matters.
  • An interruption of our production capability at one or more of our manufacturing facilities from accident, calamity or other causes, or events affecting the global economy, could adversely affect our business and results of operations.
  • The nature of our business subjects us to compliance with employment, environmental, health, transportation, safety and other governmental regulations.
  • We face competition both from within our industry and from other outdoor living products and if we are not able to compete effectively, our prospects for future success will be jeopardized.
  • Changes in trade policies, including the imposition of tariffs, could negatively impact our business, financial condition and results of operations.
  • Our substantial indebtedness could adversely affect our financial condition.
  • We may be unable to generate sufficient cash flow to satisfy our significant debt service obligations, which would adversely affect our financial condition and results of operations.
  • Our New Credit Agreement has restrictive terms and our failure to comply with any of these terms could put us in default, which would have an adverse effect on our business and prospects.
  • Our indebtedness is variable rate, subjecting us to interest rate risk, which could cause our indebtedness service obligations to increase significantly.
  • Developments with respect to the London Interbank Offered Rate (“LIBOR”) may affect our borrowings under our debt facilities.
  • Our stock price may be volatile, and you may not be able to resell our common stock at or above the price you paid.
  • We will continue to incur increased costs as a result of operating as a public company and our management will continue to be required to devote substantial time to new compliance initiatives, investor relations and corporate governance practices.
  • We are an “emerging growth company,” and the reduced disclosure requirements applicable to such companies could make our common stock less attractive to investors.
  • We are a “controlled company” within the meaning of the NASDAQ rules and, as a result, qualify for and intend to rely on exemptions from certain corporate governance requirements.
  • Our Principal Stockholders continue to have significant influence over us, including control over decisions that require the approval of stockholders, which could limit your ability to influence the outcome of matters submitted to stockholders for a vote.
  • Our organizational documents and Delaware law may impede or discourage a takeover, which could deprive our investors of the opportunity to receive a premium on their shares.
  • Our certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities.
  • Our ability to raise capital in the future may be limited.
  • If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
  • Securities analysts may not publish favorable research or reports about our business or may publish no information at all, which could cause our stock price or trading volume to decline.
  • We do not anticipate paying any cash dividends, and accordingly, stockholders must rely on stock appreciation for any return on their investment.
  • We are a holding company and rely on dividends, distributions and other payments, advances and transfers of funds from our subsidiaries to meet our obligations.
  • Our certificate of incorporation provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
  • Future sales, or the perception of future sales, of our common stock may depress the price of our common stock. In addition, a significant portion of our common stock is restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.
Management Discussion
  • (a)Adjusted EBITDA is a non-GAAP measure. See “Non-GAAP Measures” for a reconciliation to net income (loss), the most directly comparable GAAP measure, and for information regarding our use of Adjusted EBITDA.
  • Net sales was $206.8 million for the fiscal quarter ended July 2, 2022, compared to $180.9 million for the fiscal quarter ended July 3, 2021. The $25.9 million, or 14.3%, increase in net sales was due to a $8.3 million decrease from volume and a $34.2 million increase from pricing. The $34.2 million price increase reflects the impact of pricing actions to address inflationary pressures. The $8.3 million volume decrease was largely in packaged pools, which were impacted by destocking in the wholesale distribution channel as a result of the current macro-economic environment and more days of unseasonable weather in certain regions limiting installation days. The increase in total net sales of $25.9 million across our product lines was $4.2 million for in-ground swimming pools, $9.6 million for liners and $12.1 million for covers.
  • Cost of sales was $139.2 million for the fiscal quarter ended July 2, 2022, compared to $122.5 million for the fiscal quarter ended July 3, 2021. Gross margin increased by 0.4%, to 32.7% of net sales for the fiscal quarter ended July 2, 2022 compared to 32.3% of net sales for the fiscal quarter ended July 3, 2021. The $16.7 million, or 13.6%, increase in cost of sales was primarily the result of cost inflation, partially offset by a $3.8 million decrease in non-cash stock-based compensation expense. The 0.4% increase in gross margin was primarily driven by benefits from pricing actions to address inflation, benefits from the build of inventory, and lower non-cash stock-based compensation expense, partially offset by negative fixed cost leverage due to investments to support future growth, including fiberglass expansion initiatives.

Content analysis

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Positive
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Uncertain
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Legalese
Litigous
Readability
H.S. junior Avg
New words: concurrently, destocking, disposition, environment, expansion, incidental, largely, Odessa, oral, settlement, unseasonable, wholesale, xiv
Removed: clarify, CODM, headcount, intended, interaction, rebate, relating