Latham Group, Inc. reported net sales of $150.5 million for the third quarter of 2024, a decrease of 6.4% from $160.8 million in the prior year's third quarter. This decline was primarily attributed to lower sales volumes resulting from continued soft industry conditions and a challenging macroeconomic environment.
Despite the sales decrease, gross profit for the quarter was $48.7 million, slightly above $48.1 million in the prior year, with gross margin expanding by 250 basis points to 32.4%. This improvement was driven by production efficiencies from lean manufacturing and the contribution from the Coverstar Central acquisition, which closed in early August 2024.
Selling, general, and administrative expenses increased by 20.9% to $28.3 million, primarily due to increased investments in sales and marketing and the inclusion of Coverstar Central's expenses. Adjusted EBITDA for the third quarter decreased by 17.3% to $29.8 million, with the Adjusted EBITDA margin falling to 19.8%.
For the first nine months of 2024, net sales were $421.2 million, down 11.4%, but net income improved to $11.3 million compared to a net loss of $2.5 million in the prior year period. Adjusted EBITDA for the nine months was $76.6 million, a slight decrease of 1.9%.
Latham ended the third quarter with $59.9 million in cash and total debt of $282.8 million, resulting in a net debt leverage ratio of 2.6. The company narrowed its full year 2024 guidance for net sales to $500 million to $510 million and Adjusted EBITDA to $77 million to $83 million, reflecting the end of the pool building season and potential impacts from recent hurricanes.
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