Latham Group, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Third quarter net sales reached $182.2 million, a 12.5% increase year-over-year, driven by 8.4% organic growth.
• Year-to-date net sales for the nine months ended September 26, 2026, were $497.0 million, up 11.4% year-over-year, with 7.9% organic growth.
• Third quarter gross profit increased 16.6% to $66.8 million, with gross margin expanding 130 basis points to 36.7% compared to the prior year.
• Nine-month gross profit increased 12.9% to $174.1 million, with gross margin up 40 basis points year-over-year.
• Third quarter net income was $12.1 million ($0.10 per diluted share), a 48.5% increase from the prior year; net income margin was 6.6%.
• Nine-month net income was $16.3 million ($0.14 per diluted share), a 10.3% decrease from the prior year; net income margin was 3.3%.
• Third quarter Adjusted EBITDA increased 18.1% to $45.3 million, representing a 24.8% margin (up 110 basis points).
• Nine-month Adjusted EBITDA increased 14.2% to $102.0 million, representing a 20.5% margin (up 50 basis points).
• Third quarter SG&A expenses increased 25.5% to $35.9 million; nine-month SG&A increased 20.8% to $110.1 million.
• Net cash provided by operating activities was $48.8 million in the third quarter and $54.6 million for the first nine months.
• Capital expenditures were $6.1 million in the third quarter and $34.2 million for the first nine months.
• Total debt was $292.5 million at quarter-end, with a net debt leverage ratio of 1.8.
• Cash balance at the end of the third quarter was $94.8 million.

Guidance and Future Outlook:

• Reaffirmed and narrowed full-year 2026 net sales guidance to $605-615 million (midpoint growth of 11.7%).
• Reaffirmed and narrowed full-year 2026 Adjusted EBITDA guidance to $112-118 million (midpoint growth of 15.2%).
• Full-year capital expenditure guidance remains $40-45 million.
• Expects to continue outperforming the U.S. in-ground pool market in 2027 and beyond.
• Anticipates fiberglass pools will gain at least one percentage point of market share in 2026, reaching approximately 25% of total U.S. in-ground pool sales.
• Plans to extend micro-market strategy to additional Sand State markets and pursue accretive acquisitions.

Business Segments and Product Lines:

• In-ground pool sales grew 22.6% year-over-year in the third quarter, or 13.9% organically.
• Fiberglass pools drove the substantial increase in in-ground pool sales due to ease of installation, cost efficiency, durability, lifetime warranty, and low maintenance.
• Cover sales increased 8.7% in the third quarter, led by substantial organic growth in autocovers.
• Sand States sales increased 21.1% in the third quarter and 16.6% year-to-date, led by performance in Florida and Texas.
• Partnered with a national homebuilder to offer Latham fiberglass pools in new home construction in Florida.
• Completed the build-out of the commercial organization with the appointment of a new Chief Commercial Officer and addition of key leadership in sales strategy and operations.
• Added field sales resources in Florida with further expansion planned in Texas and Arizona.
• Acquired Freedom Pools earlier in 2026 for $17.0 million.
• In-ground Swimming Pools segment revenue was $92.4 million (Q3 2026) vs $75.4 million (Q3 2025).
• Covers segment revenue was $59.6 million (Q3 2026) vs $54.9 million (Q3 2025).
• Liners segment revenue was $30.1 million (Q3 2026) vs $31.6 million (Q3 2025).

Market and Competitive Landscape:

• Latham is the largest designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand.
• The company believes it has the potential to drive a step-change in companywide sales through the Sand States growth strategy.
• Market share expansion is a key focus, with management citing superior execution and product quality as drivers.
• Autocovers are gaining traction due to safety benefits, cost savings, and compatibility with all in-ground pool types.

Risks and Challenges:

• Third quarter net income included a one-time loss on extinguishment and modification of debt of $5.0 million related to debt refinancing.
• SG&A expenses included $3.2 million in performance-based compensatory earn-out expenses related to the Coverstar Central acquisition.
• Nine-month SG&A included $7.7 million in performance-based compensatory earn-out expenses related to the Coverstar Central acquisition.
• Forward-looking statements note risks including inflationary impacts, trade policies, natural disasters, adverse weather, economic conditions, raw material sourcing, and competitive risks.

Management Commentary and Tone:

• President and CEO Sean Gadd stated the company delivered strong results, demonstrating success in material conversion and operating leverage.
• Management expressed confidence in achieving further market share expansion and driving meaningful growth regardless of the pace of market recovery.
• The tone is positive, highlighting the acceleration of fiberglass conversion and the success of the Sand States strategy.
• Management noted that the substantial increase in in-ground pool sales was driven almost entirely by fiberglass pools.

Other Key Points:

• Board of Directors approved a three-year $100 million share buyback program.
• Completed a debt refinancing in the third quarter, including a $75 million revolver and $300 million term loan, extending maturities until 2033.
• Acquired Freedom Pools for $17.0 million in February 2026.
• Capital expenditures for the first nine months included the purchase of four key previously leased production sites.
• Latham has approximately 1,900 employees across 40 locations.
• Conference call held on November 3, 2026, at 4:30 PM Eastern Time.