SWIM - Earnings call transcript Q1 2024

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Operator

Good afternoon, and welcome to the Latham Group First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.I would now like to turn the conference over to Casey Kotary, Investor Relations Representative. Please go ahead.

Casey Kotary

Thank you. This afternoon, we issued our first quarter 2024 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. Latham's CEO, are CFO, Rajeski; call Gloe. Oliver today's President Scott and and On

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

Scott Rajeski

call to key business first Good everyone, latest takeaways. all our afternoon, joining and review Casey. you, today's XXXX you Thank of discuss results thank quarter terms trends.In our and for

fourth conference guidance time the pleased start results. call year exceeded First, in we They the quarter with our March. we represented to quarter the first at of provided solid were and our a

and structure demonstrated maintain flexibility in and effectively with and value plants, manufacturing actions of lean efforts efficiencies ability providing our and continue cash the provides resources repayment. capacity usual significant engineering manage and conditions QX. our even order advantage cost we production the at to more an for start a to of resilience And to benefits outlay debt with third, lead during After to performance cash through flows periods industry This our $XX.X our and taken have orders These after accelerate look execute mid-March. for in position reduced ongoing industry-leading opportunities to serve the a in a slow our take saw to we continue Second, million reflects Latham soft future drive of substantial to quarter, seasonal incremental our the uneven times. significant closer pool working actions the to the pickup initiatives. customers us starting business to a drive growth.Taking capital we

to able pool X X while relative majority our do for year-on-year, was priorities we in-ground of pool fiberglass team Latham's and showed strength times on down achieving days. a execution, On lead to earnings of XXXX. conference great cited to our operations last Our call, job continue sales, the sales. represent

pool space Providence increasingly entry with site relaunched Tuscan California, rehabilitation. as the awareness first quarter, series In the dealer adoption plant, cost attractive popular exercises to trendy homeowner Plunge provide lower for aquatic Arizona important refreshed new serves we considerable we launched the options our areas also an the that markets. of and and as covers. a in Enchantment becoming quarter, both fiberglass the wins.During saving, we safety to in quarter, plunge the North was first very new The automatic and as which the are the California which and introductions feature. with series they Nevada made And the America, in and well continue pool progress drive first ideal is product pools are rectangular of and for

new largest a built-in on to touches of our finishing has the that available and features, spa seating model fiberglass a currently broad put that dealers. including is pool we array swim-up a Additionally,

inground in in key in continue which coming work automatic awareness to also these distribution more well the priority liner concrete with cover competitors' pools many are network our on products. category, line are of another early adoption pool We to pool for the as stages pool of we months.With rolling respect out that us, of builders as including our of advance safety vinyl to our a covers, dealers, and plunge

unparalleled in In to significant auto covers resource and savings heating chemical these a up costs protection, providing reduction both offer pool addition resulting XX% usage. to in

plants operational drive auto to capacity. incremental cover lead in times our continuing reduce are We to improvements and gain

Latham, Our and cover for its the orders. simplify and AI-powered capabilities. operations for to our dealers kind integrated of the will with our all and pool and and measurement submit points with to project enables a our on it is price This minutes launched changes easy-to-use ensure and process precise also portal, cover working covers provides pool liners, all quickly and our accuracy And that auto and vinyl ready.We which pool to to that measuring management expand swimming specifications of tool easily receive in within liner installers. dealers quotes Measure focus track device lineup high-performance are of by with team inground quoting making successful all newly continued first key rollout models category the we're product also

been dealers As with you can a positive imagine, this and response our contractors. very tool from met has

lineup, to it enable and our appealing dealers. quarter, Canada key make and the all growth new times and the to its our convert levels several the together will extensive strengthening best-in-class in place continue pool to of will markets. drive service several in continue In U.S. all and sure lead functionalities first We have new dealers dealers of we attract ahead penetration industry-leading and XXXX our with in we to to were season.Latham's that believe ability are able the rollout product building us

the to products. by the time, are dealers, end builders, installation their experience when shorter earnings aesthetics be on market they both homeowners. often for a new to working these boot most while increased of to conditions of the structural as experienced in and in and dealers maximize additional They well fiberglass of camp In neighboring with which XXXX be as for success.The motivated even leads is product, be profile volumes. established important programs the installation in expect priority to efficiencies will to and on trained lean which, that These margin attractive an through engineering of our from our call for will mentioned go this value with For for continue second their to us we additional operating are them cost pool we consumers gain improved their much benefits drive Latham, course, manufacturing ease the very some have initiatives. impact fiberglass of installation first result positive XXXX a Latham's long-term will factor last

For and efficiency, example, these and in XX% from employee throughput the and including an initial safety. increase in our benefits improvement improvement and in overall liner largest labor programs plant, cover a X% manufacturing health

financial maintaining support but first very on environment strong details All sheet provide quarter of this flex and conditions can quarter in retain moment, spending in Oliver have contributed response financial future flexibility the a will to soft balance market resilience both for in to resources well our to review. we've opportunities retain to market down to margin been a to performance.Lastly, that in we up the of growth.With Oliver today's I as Gloe, to our CFO, operational and first as over growth. the say our take drive will that, and and prioritized call our future that I disciplined advantage turn our Oliver?

Oliver Gloe

cost Thank compared today to fiscal on you, comparisons that XXXX, and the all value engineering year-over-year otherwise first savings and lean initiatives. expectations, strong our basis reflecting results afternoon, good that Scott, note exceeded first everyone. quarter and will a unless noted.Our I discuss our quarter are Please of execution,

As first factors our manufacturing driven benefited in reduction headwinds as wage XXXX sales. increases.SG&A as remainder high-cost cost in inground compared efforts by and XX.X%. pool lower strength to sales. million were million margin under-absorption gross impact from noncash down increased pool replacement Latham's of programs, declining we XXXX. in actions lower expense. material demand, relative challenging quarter packaged XX.X% the and reflecting stock-based Net which lower The sales than our offset expenses costs to covers pool XXXX, and of to $XX.X while down impacting the show comparisons increase sales cycle meaningful $XXX.X due XX.X% starts. have were utilization and the to took resulted points initiatives. was due $XXX.X of QX compensation our These continue we decrease million, million, plants. or fiberglass majority for This primarily pool carryover conditions primarily our consuming $X.X the to QX reduction in of million decreased large to down ongoing decline remained macroeconomic pool Year-on-year XXX inventory cost due from and reduced was a the more at in and raw X.X% lower products, reduction well volumes also resilient, million the from to see continue anticipated, these more $X.X our inground that lower Liners comparisons inventory to to X products XX.X%.We lean of basis benefits account pleased were $XX.X despite

amount to was Adjusted is X% to market, or million. the first or compared compared the This with a For quarter. net approximately of initiatives.Adjusted million noncash million margin was compensation in our year $XX.X savings $X.X result and million per period. up prior value XXXX. engineering prior the primarily performance in period execution XX.X%, $XX.X QX and improvement XXXX, from of a by per to year Net loss $XX $X to compared considerable lean $X.XX million to the million is or expected solid was share prior share XX.X% $X.X made EBITDA to due for a of difficult stock-based strong in year's EBITDA loss $X.XX progress cost

our guidance for future normalized investments our and this accelerate transformation R&D compensation.Turning involves primarily growth. you decremental to to balance implies to continued year programs sheet. remainder Notably, full investments EBITDA performance-based margins engineering sales ongoing in digital As and the XXXX, and in of pool know, XXXX marketing, products, reflecting fiberglass our planned conversion

the million the was million in quarter first company expenditures XXXX, peak $XXX.X net leverage in debt at period million of activities were in debt the $XX.X the $X.X capital selling our pool QX. million seasonal repayment strong and increase cash end lower financial for reflecting ratio We of of continue considerably season. million in enters of of with the the was debt maintain capital a the to cash with X.Xx, in used prior a working $XX.X after position million for Total Net million, net quarter the $XX.X operating as a $X.X year. in than $XX

reflect We our in quarterly capital best strategy comparable opportunistically cash and are run continue economic our said, given conditions throughout growth as capital improve. position well and in deploy rate That to as us will with for line CapEx our allocation as market uncertain outlook. expectations expect seasonality conservative accelerated the a XXXX.Our we to position expenditures capital profitable

metrics First guidance provided quarter earnings the turn quarter the that, I together results, our XXXX fourth of his the to closing with back release.With our call Scott at time for visibility, will underpin current remarks. we

Scott Rajeski

amid organization a quarter executed very and possible. a small pleased to the performance our adjusted team commitment season. our revenues quarterly are start you, the engagement initiatives this strong cost first with to annual and ability of that the members and execution, execute Oliver.While represents made all of exceeded we our choppy how our savings demonstrated lean and well EBITDA, Thank who value teams Latham's Latham's guidance appreciate our efficiently.We and contributed throughout engineering to percentage

strong to want customers and Latham. be who also suppliers all continue thank We our of to of supporters

quarter current to stronger year results the like for to open our to guidance our call effectively as full even ability would Latham's navigate company.Operator, support XXXX confidence market expectations environment I and first Our emerge underpin an questions. the in and

Operator

Truist. from first Instructions] from question Our comes Bettenhausen [Operator Jonathan

Jonathan Bettenhausen

for on evening. this Hughes Keith I'm

cost about million incremental been I $X realization, looks It indicated last like So XQ. How right? has maybe in most savings. already savings you progressing? here maybe at targeting realized on that Am I of the looking XXXX quarter, think is in that that

Oliver Gloe

Yes.

right. absolutely You're

remainder from savings $X had Of million in implemented. about fully for initiatives our QX. million initiatives. QX being we a All million, our $X are $X.X that the So with left cost spillover about the

Jonathan Bettenhausen

Okay. surprises the into kind Got in it. momentum heading Was sales about the second what And in the were there March? demand quarter? you any expected of ramp

Scott Rajeski

Yes.

weeks we think at QX we've start time around February us, think the in then right how and call. out look And on little think our from jump this you as a earnings seasonality, I January back the slower here we off move a kind look expected, part heard pickup as the saw QX start bit that season March, moving I I if a as for So few I'd really of kind today. took we I we were there played on of in season nice the well, we as and guidance through ramping say others, maybe there the reconfirmed April with of through as think out track is the

Operator

question from Baird. Wojs next comes from The Tim

Timothy Wojs

Maybe just Everybody. Scott. question, first

just dealer the of incremental propensity be also guess, of Just seeing of, wondering about to seeing pool the prepared consider the adds. Latham you've the and slower of kind with I'm that then part fiberglass are in I of traction kind if kind you some investments on and consider And incremental an kind remarks, just then dealers you to network? talked environment, of from if kind made

Scott Rajeski

Yes. all what Look, done dealers on we've of really I to aspects big lines, as always track product think, part a over talked constantly and focus, Tim, fiberglass. Latham the recruit new is of years, we've all right,

look you cost the to say, consumer drastically then that the you lower we've financing. the think resonate I at speed cost I at value and the homeowner lower when concrete pools, that at level, compared pool dealer let's the and giving option, the a install right, to, come then of fiberglass, both especially just of of with proposition level, think back the continues increased combine cost as them of the cost seen and

us, themselves we this and I look, giving up, pools. and dealer, gone get it's a through efficiency establish their the It's is I and market them, nice all ready think for right? again, for well camps productivity just be And think they'll them rebounds, volume increase be When trained opportunity dealers. play in" rapidly those long-term boot fiberglass an positioned, they'll their be to of "jump kind to incremental show they'll have trained, for as they'll a right?

Timothy Wojs

Okay.

of time. a increased you've the of It's just it's and for say share there's over kind of a that, you So kind sort kind of fiberglass, it's kind environment, kind kind of seen not of that there's constant what slower view of more any hey, of you're seeing.

Scott Rajeski

Yes. Yes.

a clarification It's one out good I Look, bit there. think a little maybe become more aggressive point. there, we've Tim.

maybe number we've So you could and say dealers is that the adding supply better X, been during of the dealers than quality issues. challenge years X, the difficult chain last much in X of the

they're entire our got this, country. great I we one, look, look at why the you a think right, if footprint, footprint throughout choosing

we And good a we kind you that's the respond a and the So we're is serve was a stand right through the for us lower throughout quality to our post bring kind enabled signals question all ability demand if pools to where position. from some really in results cost we out -- there. as dealers up really standpoint, in of XQ, it quickly gate And back in XQ look and our here, what came country. of lead really service of to March to incremental at Jonathan's time good then of to

Timothy Wojs

Okay.

impact, to X a the and from little a just would mean, QX a Okay. -- highest see And Just sequencing from how seasonality haven't and normal of kind the should phase we lower the mean, would then then guess, QX? in seasonality Good. kind I then bit through And trying guess think profitability years. kind how about should perspective, I revenue what, of of of kind be about QX X think drop of be I perspective, seasonality a to is I or seen year? in in that kind off also in

Scott Rajeski

Yes.

I seen So XX for XX Tim, about I've was was -- business in driving a this think normal of fair When the years. I question. in years. I season morning, been I've thinking don't

what We've the the more there. been a came in bulk really anymore years, season. probably Clearly, is has say, XX-XX talked I'm seen. kind with season of XQ the argue, XX%. what So right? typical little returning of not of the split, over But of could think you everything to over a sure we're we've normal seasonality I'd and XQ XQ just is out

but And had last we've to similar I So around could XX%-ish ballpark, conversation profile it, decremental a would just then Oliver be and address think we little on XQ give then a said, in coming argue in the let or that. XQ. the that But take XQ rounds, again, a call. balance probably the you few I'll EBITDA

just as of move we of year. kind But through that ramping. how got happy with the watch the you to is the we're So rest season again,

nice want think Oliver, the guidance it's it profitability really overall market to to our flows know lining about don't I I expectations. and you through. up if profile as talk

Oliver Gloe

being in quarter QX, that QX. therefore, Yes. Tim, most contribution now million, sitting From with that, majority left sales small midpoint contributed that take by million, of right at deduct quarters our you're if a EBITDA $XX with contribution an are about Now to our QX. by -- EBITDA, first far These you our right? activity by guidance from those $XX.X think share most with and

Operator

question comes next from The from Andrew Carter Stifel.

W. Andrew Carter

POOLCORP I strong. you the ask kind of Northeast late but about related in to to hate the you hit Just said to called quarter south, shipments the obviously, talk you're wanted weather, out hit the picked up. outperformance, know and it, where

you what pools as think for of I but hate channel, see talk the shipments between guess, the about, as you I the covers? Did inventory. to well you In went like know particularly, anything something kind and the channel packaged addition, of your again, difference out

Scott Rajeski

Yes.

there. question good Andrew, So

we're we right, for regional a up the of to Northeast really is point little looked in key the liners, right, the we wetter, slowly QX that inground as take season. a flow, off the for we moving if cases again, fiberglass, with the was really Fiberglass in few to at to started started was I it us as to think X-day push times a where in cycle some differences, north. convert extremely you're ramp in But X- tougher, And a able warmer lead take bit liners, orders of the the to that were X-, season and us for really in other it, South, started -- there.And we of climates well. those us, the a point plants right? kind those really the I to strong bit for colder and -- X-day little or start advantage performed think saw as sitting

the inventory We common models lot the ground a the of territories. have on and in

orders get say, where rolling those pools the weather more was were and we in dealers, get them out able let's As the ground. pushed to in were to favorable,

So team making good execution of the operations the inground customers the and majority both the category. there. across up chunk Fiberglass our board by is the still of

through to and think starts XQ what out move see July. pool part or in that Heritage, big think is the there. We've little be orders June pull-through other bit really it's whether POOLCORP distribution building season we'll not we a hit restocking year slow And distribution partners, product peak I and the seen that's us. et off we or to May, the cetera, any continue really I of for branches, as to start shelf move from the as

W. Andrew Carter

million. second looking knows got the of who at of the in final question, when how -- is would say, ], charges, I've million avoid. comp know your incentive it that season? to know year, accelerate. SBC can't the There's I there much X but wrong, increase months And Could for [ Xs? flat. so investment, any over some And That's you at math variable? starts excluding be back final truly SG&A like looks variable that what restoration that in dimensionalize you that SG&A you could some you pull there and kind really The granted, savings cost my that you not were not the kind there's of up pull And excluding $XX $XX is you get you to point wanted there. when in as could also whether or ready quickly But back? also

Scott Rajeski

portion the in in When of mid-June, get Yes. is pull back which pool there. season the we typically really first read with of I'll wait terms part, the how May out until we late our into give -- a for kind will spend the to expectations first. the would the anything last Look, Andrew, us is anything. able or line of you the playing hit be starts on variable

to So also incremental too want we're in anything build drastic we've where doing have don't that waiting early, but game start about peak made of we too investments. we talked

We are trying to retain folks.

out to leads there with push marketing to and trying are efforts. dealers our We sales

to others if I So that's in trigger that's the worsened to toggle, pull probably roughly down the there's But expectations right? were. tracking what than variable the again, starts key want than more further last year's we outlook and too think we had versus new And down we our piece that XX% quickly. don't in point, in that we're market the pool market number. think industry, a there the for the Our if was

Oliver, want of first part you levers we play address pull there. got and the the we've to can So many question?

Oliver Gloe

Yes, absolutely.

the year-over-year. with comes to $X mentioned So investments back. to million Scott performance-based market that the about $X then SG&A snapback just We over-proportionately talked X drivers of participate And compensation the once future about million. growth increased into

are So there for those drivers the really X SG&A.

Operator

from of The comes Shaun from next Bank question Calnan America.

Shaun Calnan

to a raise you beat in to your were or expectation? of Just you the if pickup and any if through went in quarter kind the sales maybe not it, the talking in slow doesn't given about forward March, curious orders your was versus see it demand guys -- and April through guidance? like there original reason we is quarter starting chose sound just pull as I'm there the but the

Scott Rajeski

Yes.

what we up, expectation had market it had quarter's was out. how the an We timing, you Shaun, total to partly of do. probably profiled just think could going I chalk

conservative that work the look probably in had we a of try as the of start. look, see of the quarter. Again, and a a nice did season -- through January did of we time And think of out We in the took what little any luxury in I demand. we to March. how a bit approach February it I assuming more at bit believe a was we point back ramp-up like. pull normal seeing playing orders was QX, does slower forward when little don't

the I think others it orders.And still market was We've a time a quarter ability dealers roughly believe lead of XX% and weather. ramps, completed still through XX% through just right. think season weather down look was really to had talk us. good in the here, this quickly in there I those were our when from little view fight Look, the how some move year see the over We a we've feels to industry, about position overall XQ, us. and turn markets I to of that in helped for being good only short-cycle out we big

I up I we assessment through I a like. look think chat XQ able to the weeks get I'd we top, mentioned and As think projections tracking say tracking extremely towards far. are into our so are. And we year quarter is things the full X in got think that's to when what guide here. well, And take when full of what be going August to we'll

Shaun Calnan

then any revenue terms adoption in at on or tool have you early by the of Measure this Okay. And dealers Got metrics point? it. do

Scott Rajeski

covers, Yes. Look, about out you us it's if in it right, the for kicks just right? rolling And for really there the in season cover think fall.

the geared opening pools as field evaluating there all the pools, do of there the while get into for right? the those out it's out to units now measurements So getting push the the get need a a covers out take They're on view with inspect they the up. replacement, or dealers, the deployed there, measure trained with they're them, encourage they're them covers, mass season, up,

the for early out training. in of big we're is units success still this us on of beta good a there testing terms deploy Again, the that. doing, in and look, So the what We're liners.

them do processing. units, where hands, be of at also a be to as units the any XXXX early we're talking the that that to dealers' number launch about net measuring teaching it's we're liners So for not season.But of number in get significance they can units ready metrics how point of fall we we we're in want for

We orders. are taking

on liner to they're device is productivity quality a huge fool-proofing going they're that get those are able out share been measurements and processing may also the time-saving to orders cover for been phenomenal. of them thing plants, the and by acceptance them our because taking, attracting and coming almost be ensuring I the accuracy it. the We of has we'll gains are this again, And going here to response because able to it back I we're rate about in achieve be shipping to the excited from the they measurements think market through talk as intel who to based AI about we're will moves Latham dealers. know think really is have dealers the through and dead eventually system.So the on look, key device manufacturers buying other out there And

I through game the move and as couple will next us. we'll And and units through. on think number be unit dealers this we breaking start stuff of of for deployed, information disclosing processing quarters, volumes more

out to there get that a data too little yet. with early Just

Operator

[Operator Barclays. from comes Instrucitons] Matthew from And the next Bouley question

Anika Dholakia

You have Dholakia Anika for on Matt.

question first customer the your is kind on base. of So

second And lower-end seeing into current how effects curious just and more spoken the challenged macro seen could for you're the you have given to half some backdrop? we've if pools. maybe their trend industry demand similar mix So I'm peers think this

Scott Rajeski

that coin I'd help guide again, in there's sides reconfirmed, lower-cost a the all and this of But pools. fiberglass, Yes. bit issued really little X drag. and good the was we're No, that's And a versus say, us similar it's really For one X contemplated concrete this really because views. -- right? a again, that option of one we that performance seeing

are points, from working the packaged a vinyl of consumers pool middle $XXX,XXX trading other concrete consumer that's of pools, of more in business, the to well to which but lot the So doing really piece or the us stepping are occurs for again, a okay, of price as That's in where inground point.The price pool America. $XX,XXX they're it's fiberglass financing the there. down out kind that's

a trending we for option because lower But we're I what's with compared pool Radian the entry you level and had is expected see. stepping to priced we're inground those be think panels bit is nice a vinyl other into that, that's on-ground really a that, overall. level more step Radiant options traction because to liner your down would maybe in say, numbers consumers or pool and second or seeing Pools above-ground our at Radiant let's happening the out really, good say, you'd little our versus panel pool I hate there to guide pool to typical

So when a But like Radiant bag. traction at fiberglass, to that's what We'd out well. the the mixed see. there we we getting as Pool acceptance little bit with of the look the to like and a see we're

Anika Dholakia

off capacity maybe investment, is Kingston near helpful. curious, current some And just really that holding how then cost about investment maybe Should That's on assume capacity today? to levels initiatives, term? be Or that. you going you're given the additional your other thinking are second, in there guys we

Scott Rajeski

Yes.

lower They're fiberglass, looking pass just capacity as more on get right? much have opportunity to Kingston, capacity consumers They to online. us on than we of gives right? really It their cost we the their them the locations, Latham investments, to demand. And to before. getting those with a like gives the capacity where at manufacturer choice. So from more backyard in new to all with now attract Kingston about today dealers It a brought model had capacity thinking side, we sit

really, had and we nice really win up, there. a up So customer pick

on to to pools. continue particular there I product might think features, ledges, pool fiberglass whether briefly good call.Similar are will we new have got consumers new the and plunge in a invest it's touched these about Where series we're and that times. other product launches, bigger tanning levels the for we've some side models, that a of and new some of pools. smaller the We capacity great in entry, market, getting lead feature-rich we out lot cocktail/plunge models looking areas service in or last where of lineup, leads is talked

team So really drive lot and in like broken it's to more I value operations a events of sound facilities were but facilities, freeing record, the those back which to good last types of taking team capacity.So a all do because continues up But big of you really, creating engineering go reduction we the initiatives able we're year, think not locations position. And offline. cost to X investments. the lean a capacity. the actually It's good operations in look, those of is efforts and to

do capacity. to now, we of sure make the chunky of 'XX, looking where will each need the go starts type to facilities new small tweaks of we're it's and positioned not be. As to right pool 'XX, like It's in 'XX out market

Operator

Sachs. The next from comes question from Maklari Susan Goldman

Susan Maklari

And environment, the cost balance are input bit quarter. things? that chemicals the a and or changes little the Everyone. those of My of the Any that question coming price thoughts is, any types as there? just perhaps about through cost, about up the came just seeing outlook then how quarter how year, together you through on any that the think you're first trended thinking that

Oliver Gloe

that, Yes, let me take Susan.

start go QX. to back and then I'll that back So and let with me our take guidance, annual

baskets, on and quite in favorable. aluminum, in expectations, recently our increases more a driven the film, seeing in line So also we've PVC on bit some and we flattish and maybe deflation, But styrene our by our most of benzene. better, our guys QX, little primarily we're with guide. inflation several we guided added modest seen And some deflation price, resins, to parts

overall, is would on our some being our pricing So said a QX, prices side. We our took the saw for say, the we price. last the modest sticking. for true year flattish deflation product we intact we in guidance down I QX that confirmed bit. a flattish by quite again, performance.I'll we is see guide But comment took similar give generally same towards some that a you earnings of QX. little little a overall, categories call, In and And a up bit, our pricing

Susan Maklari

kind any seeing about couple the you of that of of moved about And I just last right. Has how our some into in get you then to as you That's dealers? just your season. kind as we the sound that perhaps there look on think higher hearing get move-in rates have from of coverage, so. we when like Okay. rates? to have seeing the moderation the pool some of and what ground And across we core talked a in are are weeks helpful. It talk response summer? that are But companies there do been the Scott, I All the a or are spring guess, as doesn't the you activity thinking into can bit

Scott Rajeski

Yes.

new So down Susan, entire and of expecting the guide the go is, to we we've I I think, around commentary And further back people XX% right, kind a than to activity rest year, down others pool right to financing number, we closer probably of again, There's for of call out be now. for of lot if really seen our the industry. were there the out pool think our are some there not starts. it, starts experiencing

at can extremely as this of ] I have continue rates where our end buyers. of they trend that holding impacting point, bounce type that's market, as really consumer up typically seeing capital purchase. trend to pool think deploy up, the make the base. more pool the [ dealers, cash down, well backyards We're to thousand We individuals the don't So they actually the have higher those our are the X,XXX-plus

as to here. all forward we So I think helpful go us

the we're see look, think when will I a to good go starts Fed there, all So to I looking start Susan.And allow think really we're rates down position the in to into to that because back forward come others from limits. is think We bit third-party new companies. little think getting And they're they're now of the just creative. market. doing financing a -- up the I they've one our I And what got credit they've some tightened intel

now One that the They or the introduced XX-year year of X. back our have loan again. over partners pulled has last

the of that scaling out a dream the there. is for finance back overall payment the are you folks I also there lower the think for go and getting a keeping And project So monthly for now years. consumer, homeowner out can helps which XX in. the to fact of very overall look, pool creative projects the we're you, backyard, full in quote fire it They've out lighting, the backyard are their saying, do right?Homeowners for got And pool, coming outdoor pit, going landscaping. all but hey, kitchen, I pavilion, are the think segments. they're we'll huge the dealers patio, their dealers the

only year we pool fit and concrete X, way. and feet in, your we into If you look in a what outdoor want or back you fire dream like in And get can let's can afford that the then and with a and there your in bigger payment budget your X finish will come let's of of backyard up then and put patio, getting get so your kitchen. you whole the to that

the we're as their to and looking and Susan, there. on environment.So factors getting model think forward it's they're think look, engaged business readjust -- still I'd different creative. pool keep have trough. hate flow We to keep they will really, say, 'XX. some to lower say, out start I to of I employees we're But the several price there, pricing 'XX out to So cases, try lower into working had to In be their in their demand dealers consumer new being it's accumulation people a lower

starts, pool don't keep should in and how any out I company investments than 'XX as a barring year. go rebounds. They when looking launches be we're year We because next product any making want up, capacity. got where they the personnel. actions unforeseen our forward to could this the we are market incident, worse conservative but sure see plants model that's they and We've be to investing new we've here, 'XX the and got in in New new

Operator

for questions more Scott remarks. session. turn over our This concludes to I question-and-answer no are There would back in Rajeski the queue. conference closing to the like any

Scott Rajeski

meetings. good next until talk. thanks, hope Yes. afternoon's conferences evening, for the safe summer seeing in you everyone Look, care. Look a everyone, all and call. forward this our time has have everyone, at we to I participating and Take a upcoming

Operator

today's The you presentation. conference has now for concluded. Thank attending

may now disconnect. You

Latham (SWIM) 7 May 242024 Q1 Earnings call transcript