Latham Group, Inc.

Good afternoon and welcome to the Latham Group first quarter 2026 earnings conference call. All participants will be in listen-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 telephone keypad. 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 Casey Coterie, Investor Relations Representative. Please go ahead. Thank you.

This afternoon we issued our first quarter 2026 earnings press release, which is available on the Investor Relations portion of our website. On today's call are Latham's President and CEO, Sean Gad, and CFO, Oliver Glow. Following their remarks, we will open the call to questions. During this call, the company may make certain statements that constitute forward-looking statements which reflect the company's views with respect to future events and financial performance as of today or the date specified. Actual events and results may differ materially from those contemplated by such forward-looking statements due to risks and other factors that are set forth in the company's annual report on Form 10-K and subsequent reports filed or furnished with the SEC as well as today's earnings release. The company expressly disclaims any obligation to update any forward-looking statements except as required by applicable law. In addition, during today's call, the company will discuss certain non-GAAP financial measures. Reconciliations of the directly comparable GAAP measures to these non-GAAP measures can be found in the slide presentation that is available on our Investor Relations website. I'll now turn the call over to Sean Gadd.

Thank you, Katie, and thank you all for joining us today to review our first quarter results and discuss our business outlook. Our first quarter results represent a good start to 2026. We are especially pleased with our performance in the adverse weather conditions that plague most of North America. There are several key takeaways from the quarter that are worth noting. First, there was another quarter in which we saw year-on-year sales growth in each of our product lines. Nathan's category leadership position across our product portfolio and our geographic diversification are key competitive advantages for us. Secondly, we continue to effectively execute our standard stage strategy, showing double-digit sales gains in five of our pools in our priority Florida market. We are taking further actions to accelerate our growth in this region. Third, we expanded our margins, benefiting from operating leverage inherent in our business model from the lean manufacturing and value engineering initiatives that continue to yield very positive results. Oliver will provide additional detail on this later on in the call. And lastly, we are pleased to confirm our 2026 guidance, which anticipates significant sales growth and even stronger growth in adjusted EBITDA within a challenging macro environment, where full starts will be about flat for last year. Our guidance includes moderate increase in transportation and commodity costs due to today's high oil prices, which we are mitigating with temporary fuel surcharges. We are closely monitoring the dynamic situation in the Middle East and the potential impacts on cost and consumer demand. Taking a closer look at our first quarter results, in-ground pool sales increased 3.5% and virtually all of that growth can be attributed to the one-month contribution from the Freedom Pools acquisitions. Adverse weather was definitely a factor in our organic performance, keeping organic in-ground pool sales steady year on year. However, April sales trends were in line with our expectations, and we are on track for fiberglass pools to approach 80% of our full year in-ground pool sales in 2026. The Freedom Pool acquisition we completed on February 26 is integrating as expected. As we've noted, the acquisition expands our presence in Australia and New Zealand. Markets where five of our school models have a strong foothold and borders our reach into new markets in Western Australia, including Perth, which is the fastest-growing city in the country. We recently spent a week in Australia bringing together the Morellan and Freedom teams. In addition to this transaction being immediately accretive to Latham and giving us a market-leading position in the country, we anticipate achieving considerable revenue synergies from this combination over time, as well as getting first-hand experience from the direct-to-consumer business model. Cover sales advanced 6% in the first quarter, driven by growth in order cover demand as consumers increasingly recognize the safety and economic benefits of this excellent product. Our industry-leading order covers are compatible with all in-ground pool types, and in many parts of the U.S. they provide the homeowner with an alternative to fencing, or delivering additional cost savings from reduced evaporation and chemical usage. Educational marketing campaign including our partnership with Olympic gold medalist and pool safety advocate, Cody Miller and his wife, Morgan, promote pool safety and serve to build consumer awareness and increase attachment rates to new pool installations. First quarter liner sales were up 9% year-on-year, protecting increased demand and buying in advance of the pool season. We continue to gain traction with our standard stage strategy in the first quarter and are moving forward with plans to accelerate our growth in this important region. Many of the investors and analysts whom I've met since taking on the CEO role in January have asked me where I see the major growth opportunities ahead for Latham and what our playbook views for capturing that growth. Let me start by saying that the opportunity is substantial. We do not need to wait. for the recovery in the U.S. pool market to drive growth. There are enough pool starts for us to go and attack the San States now, given our relatively low penetration in that region. The key here is that fiberglass is a growing category, and we are the number one player in the U.S., and so we are best positioned to gain share. Fiberglass pools are an excellent fit for the San States for many of the same reasons that the category is growing nationally. Fast and easy installation, lasting durability, low maintenance, and we have an exceptional design range of sizes and options to choose from, many of which are smaller, rectangular-shaped pools with attached bars that are perfect for our target community. Latham has laid a good foundation for growth in the SAM states. There is definitely increased brand awareness among consumers and dealers in Florida, thanks to several high-profile marketing campaigns, paired with local activations. In 2026, we plan to build on that foundation to set the stage for accelerated long-term growth. As you know, I have many years of experience successfully selling against the standard in the building product industry. When I applied that experience to Latham's current position in the San States, I have identified several actions to capture consumer demand and provide additional value to our dealers. First, we're building out a commercial organization with the key pillars being sales strategy, sales operation, and sales execution. The responsibilities to design and drive sales plans, product leadership, and sales effectiveness. Our goal is to provide a world-class commercial organization that supports our growth, not just in Florida, but across all the fan states and all of North America. Second, we have introduced a new market development framework approach at Latham that I believe will make us even more effective in capturing share. The key element of this framework is segmentation, meaning that we'll be very selective with our targeted 10 state markets in determining the specific sections and neighbourhoods that offer the greatest opportunity for us. In essence, it's all about neighbourhoods. We're looking for neighbourhoods with a large number of homes, with home values, life sizes and household incomes that fall within our parameters. These can be in, adjacent to, or outside of marketing communities. Third, we'll be adding sales resources in the field to make sure we stay close to the consumer throughout the pool buying process. In this way, we'll be able to assist our leaders in converting more leads into sales and getting greater understanding of the consumer journey. We know that consumers are looking for designs that fit their lifestyles, and we believe that Latium has the best range of products to meet those needs. In 2026, we are increasing our investment in branding and marketing in a very targeted way to capture greater consumer awareness, together with our network of trusted leaders who are able to fulfill the demand we generate. In support of all this, we are revamping our marketing and advertising campaigns to give homeowners a full understanding of the true benefits of fiberglass and why it is the right solution for their backyard to enable their dreams of creating wonderful memories to come true. With that, I will turn the call to Oliver Glow, a CFO for Financial Review.