Latham Group, Inc.

The Leiden Group, Inc. Fourth Quarter and Full Year Fiscal 2021 Earnings Conference Call. All participants will be in lesson-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. please note this event is being recorded. I would now like to turn the conference over to Nicole Breguet, Investor Relations Representative.

Please go ahead. Thank you, and welcome to Latham's Q4 and Full Year Fiscal 2021 Earnings Call. Earlier this morning, we issued our earnings press release, which is available on the Investor Relations portion of our website, where you can also find the slide presentation that accompanies our prepared remarks. On today's call are Latham's President and CEO, Scott Rogeski, and CFO Mark Borseth. Following their remarks, we will open the call up to questions. During this call, the company may make certain statements that constitute forward-looking statements. Such statements reflect the company's views with respect to future events as of today and are based on management's current expectations, estimates, forecasts, projections, assumptions, beliefs, and information. These statements are subject to a number of risks that could cause actual events and results to differ materially. Such risks and other factors are set forth in the company's earnings release posted on its investor relations website and will be provided in our Form 10-K for fiscal year 2021. The company expressly disclaims any obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments, or otherwise, except as required by applicable law. In addition, during today's call, the company will discuss non-GAAP financial measures, which we believe could be useful in evaluating our performance. Reconciliations of adjusted EBITDA to net income calculated under GAAP can be found in our earnings press release and will be included in our Form 10-K for 2021. I'll now turn the call over to Scott Rojeski.

Thanks, Nicole. Good morning. Thank you for joining us for Latham's fourth quarter and full year 2021 earnings call. Today, I'll review the key highlights from Q4 and full year 2021, provide an update on our growth initiatives, and briefly discuss our 2022 outlook. Mark will then give a detailed overview of our financial results and guidance. 2021 was a milestone year for Latham and our first as a publicly traded company. Latham posted a record fourth quarter with net sales growth of 24.1% and adjusted EVTA growth of 56.5%. In Q4, consumer interest and demand in pools remained very strong. I am also pleased to share that we made significant progress in enhancing our operations and resin supply position during Q4. Fiberglass production levels and efficiency increased as expected through the end of 2021, with our North American fiberglass production increasing 35% on a sequential basis over Q3. And we expect it to continue improving as our resin supply increases throughout 2022. This enabled us to deliver another strong year of tremendous growth for our business. Throughout 2021, we continue to execute on our growth strategy, which positions us well to capitalize on the growing consumer demand for pools and to deliver growth across our market-leading product portfolio. We continue to drive the material conversion from concrete pools to fiberglass, thanks to our direct-to-consumer model, and we continue to build out our digital tools with MyLatham and our pool cost estimator. We also expanded our addressable market by adding a new premium quality product to our portfolio at an attractive price point for homeowners with the acquisition of Radiant Pools, a leading manufacturer of vinyl-lined, insulated aluminum-walled swimming pools. This transaction, completed in late Q4, demonstrates our ability to execute on attractive tuck-in opportunities and enhance our ability to benefit from growing homeowner interest in pools. I am also very proud of the operations team and the progress they have made over the last six months. Latham has remained nimble in an ever-changing operating environment. We have diversified our raw material supply, especially in the resins used in manufacturing our fiberglass pools. Our current resin suppliers have improved fulfillment, and we continue advanced dialogues on future year supply agreements with them. We are also in the process of adding new sources to ensure we have plenty of resin to support our growth in 2022 and beyond. As we build our resin position, we have the manufacturing capacity to support our plain growth in 2022, and we will continue to add capacity as we prepare for 2023 and beyond. I am also excited to share that we have welcomed Sanjeev Ball as our new COO. Sanjeev comes to Latham with over 20 years of experience in global supply chain and procurement at companies like Newell Brands, Danaher, Stanley Black & Decker, and United Technology Group. We believe he is the ideal candidate to lead our talented operations organization as we continue to advance our resident supply chain initiatives, expand our capacity to support our long-term growth, and drive ongoing lean and productivity initiatives throughout the business. All of these efforts combined enabled us to deliver our 12th consecutive year of net sales and adjusted EVTA growth and adjusted EVTA margin expansion in 2021. We could not have achieved this success without the devotion of our employees and the commitment of all of our dealers. Diving more deeply into our progress and our key growth initiatives, The work we have done with our digital strategy, specifically search engine optimization, has enabled us to remain the digital market leader in our space. We have improved our search rankings for priority keywords and our website traffic remains very strong with over 2.5 million sessions and over 7 million page views, while scaling back our paid search spend in 2021. We also saw year-over-year growth in page duration times. This means consumers are spending more time on our site. We continue to evolve and enhance the ways we reach homeowners and dealers digitally. This includes continued enhancements to our augmented reality app, which has now had over 84,000 downloads and has resulted in nearly 350,000 virtual pools being installed since 2019. As we work to drive fiberglass share of U.S. pool installs, we are expanding our capacity to be able to meet that future demand. This includes our new fiberglass facility being built in Kingston, Canada, which we broke ground on in January. We are seeing ongoing success in expanding our strategic partnerships with Latham's exclusive dealers. We continue to teach our dealers how to scale their business to capitalize on the tremendous homeowner demand for pools through our training programs and business excellence coaching, enabling them to add more installation capacity. We see opportunities to continue to drive fiberglass penetration, especially in the sand states, Florida, Texas, Nevada, and Arizona. And we are focused on enhancing our dealer base in these regions. Our strategic partnership with Premier Pools and Spas is one of the keys to this. We are really pleased with the exceptional growth we drove with Premier in 2021. We are very excited to continue to expand on this partnership in 2022. As we look to next year, we expect to deliver exceptional growth well above our three- to five-year targets. In 2022, we are expecting full-year net sales to be $850 million to $880 million and full-year adjusted EBITDA to be $185 million to $205 million. We operate in a large and attractive market. Homeowner demand for our products is strong, driven by secular trends like the acceleration of investments in outdoor living and migration to suburban communities. Over the last several years, we have established a strong track record of outperforming the industry. A key to that is the success we're seeing in driving the conversion of fiberglass. Fiberglass's share of U.S. pool installs is well below more mature markets like Australia, where fiberglass currently enjoys a 70% share of the market. This means that Latham has a long runway for growth. We look forward to continuing to execute on our growth strategy in 2022 and working together with our suppliers and dealers to advance our mission of making high-quality swimming pools an attainable luxury for every homeowner. I will now turn the call over to Mark to review our financial results and outlook in greater detail.