SWIM · Latham Group, Inc.

Latham Group delivered solid Q1 2026 results with 5.3% year-over-year net sales growth to $117.3 million, driven by organic strength in covers and liners, contributions from the Freedom Pools acquisition, and double-digit fiberglass pool sales growth in Florida — the initial target market under its Sand State strategy. Gross margin expanded meaningfully by 220 basis points to 31.7%, reflecting volume leverage and sustained benefits from lean manufacturing and value engineering initiatives. While SG&A rose 19.5% to $36.6 million — primarily due to acquisition integration costs, increased sales and marketing investment in Sand State markets, and digital transformation efforts — Adjusted EBITDA grew 9.2% to $12.2 million (10.4% of net sales), outpacing top-line growth and underscoring strong operating leverage. The company reaffirmed its full-year 2026 guidance: 9.0% net sales growth and 12.7% Adjusted EBITDA growth at the midpoints, anchored by expectations of flat U.S. in-ground pool starts and Latham’s continued outperformance relative to the broader market. Capital allocation activity was elevated: $22.5 million in capex included $17.6 million tied to the purchase of four key fiberglass production sites, and the $17.0 million Freedom Pools acquisition closed during the quarter. Concurrently, shareholders approved a 3.4 million-share increase to the 2021 Omnibus Equity Incentive Plan, raising the total share pool to 24.57 million — enhancing flexibility for future equity-based compensation aligned with long-term strategic goals. These developments collectively signal disciplined execution across growth, margin, and capital deployment fronts, reinforcing management’s credibility on guidance and strategic sequencing.