Latham Group CEO on Growth Beyond the Housing Slowdown

0:00Welcome back to Market on Closet Mouse Coffee Inn from Marley and Sam. Joining me now is Sean Gad, the president and CEO of the Latham Group. First off, congratulations on ringing the opening bell earlier at the NASDAQ. Exciting time. I'm sure and congratulations on the anniversaries for the company as well. Sean, kind of high level for our viewers who maybe aren't familiar with Latham Group and what you guys do. You want to give us sort of the elevator pitch? Yeah, no problem. Thank you, Alex. You know, we are the largest pool manufacturer in the industry around the world, actually. And so we do vinyl and fiberglass pools in ground and are the market leader here in the US, Canada, Australia and New Zealand. All right. And building on that, you recently reported your quarter four and kind of your full year 2025 was buttoned up then the earnings results.

1:00What did the last year's performance, you know, kind of tell you about the consumer demand in your space given what we keep hearing about this high rate, more cautious spending environment that consumers are facing? Yeah, I think despite the tough environment and certainly housing stocks or pool starts are significantly down again. Latham has been able to outperform the market and we're able to take share. I think the key here is fiberglass is a growing category and we are the number one player there and so we're able to capture share from others. So I think despite all the things that have gone against us, we're able to do and really perform at a level we like. I think from a you know, it starts perspective, you know, we are still relatively low, low penetration in the southern markets and so really the market being where it is doesn't really matter. There's enough pool starts for us to go

2:00after and we're we're continuing to taking share. And you know, you recently announced as well the acquisition of freedom pools. What did that deal specifically add strategically and why was it the right time to make that purchase? I think strategically for us we are already pretty big in Australia and this really gives us enough momentum now in Australia but we're probably close to 25% market share there that it allows us to be significant enough that we want to actually spend some energy and dollars to invest to continue to go their business. Secondly, it opens up markets for us in Australia that we don't actually participate in. Namely, we've got the Perth market which will predominantly today East Coast, Perth opens up and so does Adelaide and so we've got the opportunity to drive our brand and our products into new markets and then they

3:03also allow us to deliver new products that we can potentially bring into the Latham brand which is exciting for us and with all that we know we're able to do this deal at the right time and these things don't always work out is actually how you want them to but this is relatively small business and then we able to capture the business at a pretty low multiple so we feel very good that it's a creative from day one. And it's also of course continuing to build as you said for that international presence for those who are looking at you guys and where you may fit in a portfolio not only being a US market certainly brings you a different level of kind of into a portfolio from a diversification standpoint but Sean I got to ask again and congratulations on all the success recently in the anniversaries but as you look ahead from now is there anything that you can share to our viewers that you're excited about maybe in the next year or something you guys are looking to do? I think from my perspective you know being new to Latham you know I think I'm going to bring the opportunity to

4:08do some good market development and bring in some knowledge around how you go and capture the consumer and make sure the consumer understands and we understand the journey that a consumer goes on and also the emotional sale that a consumer goes through when they try to put a pool in their backyard. I think we have the opportunity to describe it in a better way we have an opportunity to design it in a better way people are looking for designs that fit their lifestyles I think Latham has exactly that and I think we have the opportunity to bring the inside out and so memories are made in the backyard and we have the right we have the right to describe it that way and we have the ability to so we're looking forward to doing that and sort of investing further in our marketing plan for next year. Well we look forward to watching the journey and we appreciate you taking the time here today that's Sean Gad the President and CEO of Latham Group.