Latham Group Inc (SWIM)

History and Background

Latham Group, Inc. was founded in 1956 and is a leading designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and Europe. They pioneered the use of fiberglass and polymer composite materials in pool construction.

Core Business Areas

• North America: This segment designs, manufactures, and sells pool components and related products, including fiberglass pools, automatic safety covers, and other aftermarket products primarily to the residential in-ground swimming pool market. It accounts for the majority of the company's revenue.
• Europe, Australia and New Zealand (EANZ): This segment focuses on the same business activities as North America but is tailored to the specific demands and requirements of overseas market regions of Europe, Australia and New Zealand.

Leadership and Structure

The leadership team includes Scott M. Rajeski (President and CEO), Robert LeClair (CFO). The organizational structure is comprised of distinct operational segments that oversee product development and sales for particular geographical regions.

Key Offerings

• Fiberglass Pools: Fiberglass pools are pre-molded shells installed in-ground, known for their durability and quick installation. Latham is a leading manufacturer in this segment. Market data suggest Latham and its subsidiaries account for a significant share of the fiberglass pool market globally. Competitors include San Juan Pools and Thursday Pools. Revenue from this product contributes significantly to overall sales.
• Polymer Pools: Polymer pools are constructed using composite wall panels, offering design flexibility. Latham holds a sizeable share in this category as well, especially in areas where fiberglass transport is expensive. Competitors include Viking Pools and Leisure Pools. Revenue from this product contributes to overall sales.
• Pool Covers and Accessories: Automatic pool covers and other aftermarket products, such as safety covers, liners, and steps. While market share figures are fragmented across many manufacturers, Latham has a leading position in the aftermarket pool accessories. Numerous competitors exist in this category, contributing to a highly competitive market landscape. Revenue from aftermarket pool accessories contributes incrementally to overall sales.

Industry Overview

The in-ground residential swimming pool industry is influenced by housing market trends, consumer discretionary spending, and geographic factors. Growth is seen due to rising home prices and a desire for outdoor home improvement projects, especially with recent trends to have a home-based oasis post covid lockdowns.

Positioning

Latham is positioned as a leading manufacturer of fiberglass and polymer pools, emphasizing quality, innovation, and a comprehensive product portfolio. Its competitive advantages include brand recognition, a large distribution network, and technological expertise in composite materials. They are positioned in a space where they manufacture the pools that are then installed by third party installers.

Total Addressable Market (TAM)

The global in-ground swimming pool market is expected to reach approximately $18 billion. Latham is positioned to capture a significant share through its established presence and continued product development efforts.

Key Competitors

• POOL
• POOLCORP
• Hayward Holdings, Inc

Competitive Landscape

Latham competes on product quality, innovation, distribution reach, and pricing. Their advantage lies in their established brand and extensive product portfolio. Disadvantages include reliance on housing market cycles and competition from larger distribution companies such as Pool Corp that also produce some of their own components and pools.

Narellan Pools

• Year: 2021
• Acquisition Price (USD millions): 140
• Strategic Rationale: Narellan Pools acquisition increased Latham's presence in Australia and globally, expanding its product offerings and distribution network.

Historical Growth: Historical growth analysis requires pulling of current and historical data that I don't have access to. Previously, they've grown through organic sales growth and strategic acquisitions.

Future Projections: Future projections require pulling of current and historical data that I don't have access to. Look for the company's and analyst's forecasts for revenue growth and profitability.

Recent Initiatives: Recent initiatives include product innovation (e.g., new pool designs and smart pool technology), expansion of the distribution network, and cost-saving measures. They have also pursued acquisitions of other pool companies.

Latham Group, Inc. has a leading position in the in-ground pool industry, particularly in fiberglass and polymer pools, with a strong brand presence. However, its performance is cyclical and tied to the housing market, and carries debt from acquisitions. Its strengths include a large distribution network and innovative products but needs to be mindful of raw materials and consumer habits regarding home improvements.

Data Sources:

• Company Filings (SEC)
• Industry Reports
• Analyst Estimates
• Company Website

Disclaimers:

This analysis is based on available data and general market knowledge and should not be considered financial advice. Investors should conduct their own research and consult with a financial professional before making any investment decisions.