Latham Group Inc (SWIM) 2024 Q2 法說會逐字稿

Good afternoon and welcome to the Latham Group second quarter 2024 earnings conference call. (Operator instructions)

下午好，歡迎參加瑞生集團 2024 年第二季財報電話會議。（操作員說明）

I would now like to turn the conference over to Casey Kotary, Investor Relations Representative. Please go ahead.

我現在想將會議交給投資者關係代表凱西·科塔里 (Casey Kotary)。請繼續。

Thank you. This afternoon. We issued our second 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. On today's call are Latham's President and COO, Scott Rajeski, and CFO, Oliver Gloe. Following their remarks, we will open the call to questions.

謝謝。今天下午。我們發布了 2024 年第二季收益新聞稿，您可以在我們網站的投資者關係部分找到該新聞稿，您也可以在其中找到伴隨我們準備好的評論的幻燈片簡報。參加今天電話會議的有瑞生總裁兼營運長 Scott Rajeski 和財務長 Oliver Gloe。在他們發表講話後，我們將開始提問。

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.

在此次電話會議中，公司可能會做出某些構成前瞻性陳述的陳述，這些陳述反映了公司對未來事件和截至今天或指定日期的財務表現的看法。由於公司 10-K 表格年度報告和向 SEC 提交或提供的後續報告以及今天的收益中列出的風險和其他因素，實際事件和結果可能與此類前瞻性聲明中預期的存在重大差異發布。除適用法律要求外，該公司明確不承擔更新任何前瞻性聲明的義務。

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 accompanies our prepared remarks, which can be found on our Investor Relations website. I'll now turn the call over to Scott Rajeski.

此外，在今天的電話會議上，該公司將討論某些非公認會計準則財務措施。直接可比較的公認會計準則衡量標準與這些非公認會計準則衡量標準的調節可以在我們準備好的評論隨附的幻燈片演示文稿中找到，這些演示文稿可以在我們的投資者關係網站上找到。我現在將把電話轉給 Scott Rajeski。

Thank you, Casey. Good afternoon, everyone, and thank you for participating in today's call to review our second quarter and first half 2024 results. We will also discuss our business outlook for the rest of the year. We have effectively managed through soft business conditions in the second quarter, drove substantial year-on-year gains and profitability, and strengthened our competitive position. As you have seen from our release, this performance, together with our announced acquisition of Coverstar Central, enabled us to increase our adjusted EBITDA guidance for full year 2024 by $15 million.

謝謝你，凱西。大家下午好，感謝您參加今天的電話會議，回顧我們 2024 年第二季和上半年的業績。我們也將討論今年剩餘時間的業務前景。我們有效地應對了第二季度疲軟的經營狀況，實現了同比大幅增長和盈利，並增強了我們的競爭地位。正如您從我們的發布中看到的，這一業績，加上我們宣布收購 Coverstar Central，使我們能夠將 2024 年全年調整後 EBITDA 指導增加 1500 萬美元。

In terms of this quarter's key takeaways. First, market conditions played out in line with our original expectations for an approximate 15% decline in new pool starts this year. This is what we plan for and what our guidance for full year sales was based off. Our pool start forecast reflects a strong process, including the unique visibility that Latham has given our strong relationships with dealers and contractors in the fields.

就本季的主要要點而言。首先，市場狀況符合我們最初的預期，即今年新開工量將下降約 15%。這就是我們的計劃，也是我們全年銷售指導的基礎。我們的聯營開工預測反映了一個強大的過程，包括萊瑟姆為我們與該領域經銷商和承包商建立的牢固關係提供的獨特可見性。

Second, we substantially outperformed on profitability, achieving a 400 basis point year over year increase in adjusted EBITDA margin despite lower sales volumes, driven by our restructuring programs, production efficiencies from our lean and value engineering programs, ongoing cost containment, and lower raw material costs. And lastly, we continue to build upon our leadership in fiberglass pools, which have shown relative strength in the first half of this year, thanks to their significant advantages over concrete pools.

其次，在我們的重組計劃、精益和價值工程計劃的生產效率、持續的成本控制以及原材料價格下降的推動下，儘管銷量下降，但我們的盈利能力大幅超越，調整後的EBITDA 利潤率同比增長了400 個基點成本。最後，我們繼續鞏固我們在玻璃纖維池領域的領導地位，由於其相對於混凝土水池的顯著優勢，玻璃纖維水池在今年上半年表現出了相對優勢。

In addition to our second quarter activities, we recently effectively deployed capital by completing an accretive acquisition that is expected to expand our margins, accelerate the sales of our automatic safety cover product line and provide opportunities for us to increase fiberglass pool market penetration. As you can see, we have a lot to talk about this quarter. I will begin by reviewing our progress on the three key priorities we called out when we provided full year 2024 guidance in early March.

除了第二季的活動外，我們最近還完成了一項增值收購，有效部署了資本，預計這將擴大我們的利潤，加速我們的自動安全罩產品線的銷售，並為我們提供提高玻璃纖維池市場滲透率的機會。正如您所看到的，本季我們有很多要討論的內容。首先，我將回顧我們在 3 月初提供 2024 年全年指導時提出的三個關鍵優先事項的進展。

The first priority we noted was to continue to drive awareness and adoption of fiberglass pools and automatic safety covers, which we view as key long-term growth drivers for Latham. I am pleased to report that year-to-date fiberglass pool sale, while down year on year showed relative strength and continued to represent the majority of our in-ground pool sales. Our market intelligence indicates that fiberglass pools have gained share year to date and are increasingly being recognized for their cost efficiency, fast and easy installation, and eco-friendly advantages over concrete pools.

我們指出的首要任務是繼續提高人們對玻璃纖維水池和自動安全罩的認識和採用，我們認為這是萊生的關鍵長期成長動力。我很高興地報告，今年迄今為止的玻璃纖維泳池銷售雖然同比下降，但仍顯示出相對強勁的勢頭，並繼續占我們地下泳池銷售的大部分。我們的市場情報表明，玻璃纖維水池今年以來的市場份額有所增加，並且因其成本效益、安裝快速簡便以及相對於混凝土水池的環保優勢而越來越受到認可。

These advantages, together with our industry-leading service levels and best-in-class lead times, are strengthening our ability to attract new dealers. In the second quarter, we continued to invest in innovation with the addition of the Astoria 14 to our best selling the story of fiberglass pool collection. This new model is designed to narrower outdoor spaces and offers a full relaxation experience complete with a built-in spot tanning ledge features that are especially appealing in the sand states.

這些優勢，加上我們領先業界的服務水準和一流的交貨時間，正在增強我們吸引新經銷商的能力。第二季度，我們繼續投資於創新，將 Astoria 14 添加到我們最暢銷的玻璃纖維泳池系列中。這款新型號專為狹窄的戶外空間而設計，提供全面的放鬆體驗，並配有內置的局部曬黑壁架功能，在沙州特別有吸引力。

The plunge pool category has seen increased demand as these models provide the homeowner with space-saving, lower cost options that are ideal for a lot of exercises and rehabilitation as well as for social gatherings. We are capitalizing on the popularity of this product line with preparations for a vinyl plunged full launch in the spring of 2025.

小型泳池類別的需求不斷增加，因為這些型號為房主提供了節省空間、成本較低的選擇，非常適合大量運動和康復以及社交聚會。我們正在利用該產品線的受歡迎程度，準備在 2025 年春季全面推出黑膠唱片。

Our offering will include four models providing consumers with a choice of features designed to meet their budgets, a quick installation timeline, in style preferences for a broad range of consumers across North America. We also moved ahead with the rollout measured by Latham, the only pool in the marketplace that's simple by the pool measurement and quoting process for pool liner and cover installers while ensuring their accuracy. This pool continues to meet with a very positive response of our dealers and contractors and our objective is for all of our dealers they had it with all the functionality in place ahead of the 2025 pool building season.

我們的產品將包括四種型號，為消費者提供滿足其預算的功能選擇、快速的安裝時間表以及適合北美廣大消費者的風格偏好。我們還推進了 Latham 測量的推出，這是市場上唯一的泳池，透過泳池內襯和蓋子安裝人員的泳池測量和報價過程變得簡單，同時確保其準確性。泳池繼續得到我們的經銷商和承包商的非常積極的回應，我們的目標是讓我們所有的經銷商在 2025 年泳池建設季節之前擁有該泳池並具備所有功能。

Another key accomplishment for Latham was the accretive acquisition of Coverstar Central, which was completed on August 2, in which we further detailed in a separate release today. Coverstar Central is Latham's exclusive automatic safety cover dealer in 29 states in the Northeast, Southeast, and Midwest, including Texas. We have partnered together for almost 20 years and view this transaction as mutually beneficial in several ways. First, we expect the vertical integration of this product to expand our adjusted EBITDA margin by approximately 140 basis points on an annualized basis.

Latham 的另一項關鍵成就是對 Coverstar Central 的增值收購，該收購於 8 月 2 日完成，我們在今天的單獨新聞稿中進一步詳細介紹了該收購。Coverstar Central 是 Latham 在東北部、東南部和中西部 29 個州（包括德克薩斯州）的獨家自動安全蓋經銷商。我們已經合作了近 20 年，並認為這筆交易在多個方面都是互惠互利的。首先，我們預期該產品的垂直整合將使我們的調整後 EBITDA 利潤率以年化計算擴大約 140 個基點。

Second with an integrated sales and marketing strategy and our combined resources, we expect to accelerate sales drove this excellent product, which can be fitted on all types of in-ground pools. Our automatic safety covers provide unparalleled safety and offers significant resource savings that can result in up to a 70% reduction in both pool heating costs and chemical usage.

其次，透過整合的銷售和行銷策略以及我們的綜合資源，我們期望加速銷售，推動這款優秀產品的銷售，該產品可以安裝在所有類型的地下泳池上。我們的自動安全蓋可提供無與倫比的安全性，並可大幅節省資源，使泳池加熱成本和化學品使用量減少高達 70%。

Third, we see opportunities to leverage the long-standing relationship that Coverstar Central has developed with the 400 plus pool builders they serve to drive further awareness and adoption of fiberglass pools.

第三，我們看到了利用 Coverstar Central 與其服務的 400 多家泳池建造商建立的長期關係的機會，以進一步推動玻璃纖維泳池的認知和採用。

And lastly, with this transaction, we are bringing a dedicated and talented group of business professionals and industry experts to lead them who share our commitment to superior customer service. The Latham team is happy to welcome our new team members from Coverstar Central. Oliver will provide additional financial details on the acquisition a little later in this call. I just would like to comment that we were very pleased to have the capital available to pay for the transaction with cash on hand, which reflects how effectively we are managing through this industry downturn.

最後，透過這項交易，我們將帶來一支由業務專業人士和行業專家組成的敬業且才華橫溢的團隊來領導他們，他們與我們一樣致力於提供卓越的客戶服務。Latham 團隊很高興歡迎來自 Coverstar Central 的新團隊成員。奧利弗將在稍後的電話會議中提供有關此次收購的更多財務細節。我只是想評論一下，我們很高興擁有可用手頭現金來支付交易的資金，這反映了我們如何有效地度過這個行業低迷期。

The second priority we outlined was to continue to gain additional operating efficiencies through our value engineering and lean manufacturing initiatives. I am pleased to report that these initiatives are leading to significant structural cost benefits that might be a long-term positive impact on Latham's margin profile, amongst the many first half achievements for a 27% year on year reduction in production time across our North American fiberglass plants in labor efficiencies of 8% in our safety cover in vinyl liner manufacturing facilities.

我們概述的第二個優先事項是透過我們的價值工程和精益製造計劃繼續提高營運效率。我很高興地向大家報告，這些舉措正在帶來顯著的結構性成本效益，這可能會對瑞生的利潤狀況產生長期的積極影響，其中包括我們北美地區生產時間同比減少 27% 的上半年成就在我們的乙烯基襯裡製造設施中，玻璃纖維工廠的勞動效率提高了8%。

Our third key priority was to maintain a strong financial position. Oliver will provide details on the success of our financial strategy in a moment. I would like to congratulate the Latham team on the discipline they have shown in our tremendous accomplishments in improving our cost structure, driving productivity gains, and reducing working capital needs. Through these actions, Latham have the operating and financial flexibility to remain resilient in the current soft industry environment, while maintaining the resources to invest in organic growth initiatives and consider other accretive acquisitions that position Latham for accelerated profitable growth when pools start to rebound.

我們的第三個關鍵優先事項是保持強勁的財務狀況。奧利佛稍後將提供有關我們財務策略成功的詳細資訊。我要祝賀瑞生團隊在改善成本結構、提高生產力和減少營運資金需求方面所取得的巨大成就，他們所展現的紀律性。透過這些行動，瑞生擁有營運和財務靈活性，可以在當前疲軟的行業環境中保持彈性，同時保留資源投資於有機增長計劃，並考慮其他增值收購，使瑞生在資金池開始反彈時能夠加速盈利增長。

With that, I'll turn the call over to Oliver, our CFO, for a financial review. Oliver.

這樣，我會將電話轉給我們的財務長奧利佛進行財務審查。奧利佛.

Thank you, Scott, and good afternoon, everyone. I am pleased to report on our second quarter financial performance, which reflected the benefits of actions we have taken to effectively manage through a soft industry environment. Also, I'm pleased to provide further insight into the financial impact of our Coverstar Central acquisition. Please note that all comparisons that I discussed today on a year-over-year basis compared to second quarter and first half of 2023, unless otherwise noted.

謝謝斯科特，大家下午好。我很高興地報告我們第二季的財務業績，這反映了我們為有效管理軟產業環境所採取的行動所帶來的好處。此外，我很高興進一步深入了解收購 Coverstar Central 的財務影響。請注意，除非另有說明，我今天討論的所有比較都是與 2023 年第二季度和上半年相比的同比情況。

Net sales for the second quarter were $160.1 million compared to $177.1 million, down $17 million or 9.6%, reflecting the impact of continued challenging macroeconomic conditions on new pool starts and a return to a normalized quarterly sales cadence. As Scott mentioned, we continue to track to our forecast of a 15% decline in new pool starts for 2024. The sequential improvement in our absolute sales numbers from Q1 to Q2 reflects the expected seasonal improvement as we entered peak pool building season.

第二季淨銷售額為 1.601 億美元，較 1.771 億美元下降 1,700 萬美元，或 9.6%，反映了宏觀經濟狀況持續嚴峻對新池開工和回歸正常季度銷售節奏的影響。正如 Scott 所提到的，我們繼續追蹤 2024 年新泳池開工量下降 15% 的預測。從第一季到第二季度，我們的絕對銷售量的連續改善反映了我們進入泳池建設高峰季節時預期的季節性改善。

Across all product categories, in-ground pools sales declined 10.6% in the second quarter, liners declined 7.2% in the quarter, and covers were down 11.3%. Gross margin expanded by 470 basis points to 33.1% in the second quarter despite lower sales. This meaningful increase was primarily driven due to the impact of previously announced restructuring projects, continued progress on our lean manufacturing and value engineering initiatives and our cost containment programs. We also saw a benefit from lower material cost due to supply optimization in addition to modest levels of deflation in line with prior expectations.

在所有產品類別中，地下泳池銷售額第二季下降了 10.6%，內襯下降了 7.2%，池蓋下降了 11.3%。儘管銷售額下降，第二季毛利率仍成長了 470 個基點，達到 33.1%。這一有意義的成長主要是由於先前宣布的重組項目的影響、我們的精益製造和價值工程計劃以及我們的成本控制計劃的持續進展。我們也看到了供應優化帶來的材料成本降低以及符合先前預期的適度通貨緊縮的好處。

SG&A expenses decreased to $26.6 million, down $3.6 million, primarily due to a $4.3 million decrease in noncash stock-based compensation expense as well as $4.1 million from our cost containment initiatives and restructuring projects, which more than offset our increased spending on initiatives designed to position Latham for meaningful profitable growth as poll starts recover as well as increased performance-based compensation.

SG&A 費用下降至2660 萬美元，減少了360 萬美元，主要是由於非現金股票薪酬費用減少了430 萬美元，以及我們的成本控制舉措和重組項目減少了410 萬美元，這遠遠抵消了我們在旨在實現以下目標的措施上增加的支出：隨著民意調查開始恢復以及基於績效的薪酬增加，瑞生將實現有意義的利潤增長。

Net income was $13.3 million or $0.11 per diluted share, more than double the net income of $5.7 million, or $0.05 per diluted share for the prior year's second quarter. Adjusted EBITDA of $34.5 million increased $3.5 million or 11.2% from last year's $31 million, exceeding our expectations and our adjusted EBITDA margin expanded to 21.5%, a 400 basis points improvement over 17.5% in the prior year period. This outperformance was driven by improved gross margin as well as our focus on expense management.

淨利潤為 1,330 萬美元，即稀釋後每股收益 0.11 美元，是去年第二季淨利 570 萬美元，即稀釋後每股收益 0.05 美元的兩倍多。調整後EBITDA 為3,450 萬美元，比去年同期的3,100 萬美元增加了350 萬美元，即11.2%，超出了我們的預期，調整後EBITDA 利潤率擴大至21.5%，比去年同期的17.5% 提高了400個基點。這種優異的表現是由於毛利率的提高以及我們對費用管理的關注所推動的。

We have fully implemented our previously announced restructuring programs with a total annualized impact of $24 million, which contributed $2 million in savings in the second quarter. Now turning to our first half year-over-year results comparison, net sales were $270.8 million compared to $314.8 million, reflecting the impact of continued challenging macroeconomic conditions on new pool starts and a return to normalized quarterly sales cadence.

我們已經全面實施了先前宣布的重組計劃，年度影響總額為 2,400 萬美元，為第二季節省了 200 萬美元。現在轉向我們上半年的同比業績比較，淨銷售額為 2.708 億美元，而去年同期為 3.148 億美元，反映了持續充滿挑戰的宏觀經濟條件對新池開工和回歸正常季度銷售節奏的影響。

Net income was $5.4 million versus a loss of $8.7 million. Even with lower first half sales, we were able to increase adjusted EBITDA by 11.4% to $46.8 million from $42 million. Adjusted EBITDA margin increased 400 basis points to 17.3% from 13.3%. This outperformance was driven by improved gross margins from our restructuring programs, lean and value engineering initiatives, our focus on expense management, and lower raw material costs while continuing to invest in our future growth.

淨利潤為 540 萬美元，而虧損為 870 萬美元。即使上半年銷售額較低，我們仍能將調整後 EBITDA 從 4,200 萬美元增加到 4,680 萬美元，增幅為 11.4%。調整後 EBITDA 利潤率從 13.3% 增加 400 個基點至 17.3%。這種優異的表現是由於我們的重組計劃、精益和價值工程計劃、我們對費用管理的關注以及原材料成本的降低，同時繼續投資於我們的未來增長而提高的毛利率。

Turning to our balance sheet and cash flow statement, we continue to maintain a strong financial position with cash of $90.8 million at the end of the quarter after the repayment of $19.6 million of debt year to date. Net cash provided by operating activities was $52.4 million in the second quarter and $17.9 million for the first half. This includes an additional benefit of approximately $15 million from inventory reduction beyond our usual seasonality to further improve inventory efficiency.

談到我們的資產負債表和現金流量表，在償還年初至今的 1,960 萬美元債務後，我們繼續保持強勁的財務狀況，截至本季末，現金為 9,080 萬美元。第二季經營活動提供的淨現金為 5,240 萬美元，上半年為 1,790 萬美元。這包括超出我們通常季節性的庫存減少帶來的約 1500 萬美元的額外收益，以進一步提高庫存效率。

Total debt for the period was $282.4 million with a net debt leverage ratio of 2.1 times and our capital expenditure were $4.5 million for the second quarter of 2024. CapEx is in line with our guidance of approximately $5 million per quarter and our CapEx expectations for the rest of the year remain unchanged. Scott reviewed the Coverstar Central acquisition from a strategic business perspective.

2024 年第二季的總負債為 2.824 億美元，淨負債槓桿率為 2.1 倍，資本支出為 450 萬美元。資本支出符合我們每季約 500 萬美元的指導，我們對今年剩餘時間的資本支出預期保持不變。Scott 從策略業務角度審視了 Coverstar Central 的收購。

From a financial viewpoint this acquisition represents an accretive transaction that is expected to add $20 million of net sales and expand our total company adjusted EBITDA margin by approximately 140 basis points on an annual basis, as we vertically integrate our automatic safety cover line in the acquired geographies.

從財務角度來看，此次收購代表了一項增值交易，預計將增加2,000 萬美元的淨銷售額，並將我們公司調整後的EBITDA 利潤率每年擴大約140 個基點，因為我們將自動安全防護生產線垂直整合到收購的公司。

As Scott mentioned, we were very pleased to be able to source the approximately $65 million purchase price from internally generated funds. This speaks to the success we have had in improving our cost structure, driving productivity gains, and increasing working capital efficiency and our confidence to continue generating cash despite soft market conditions.

正如 Scott 所提到的，我們很高興能夠透過內部資金籌集約 6,500 萬美元的購買價格。這說明了我們在改善成本結構、推動生產力提高和提高營運資金效率方面所取得的成功，以及我們在市場疲軟的情況下繼續產生現金的信心。

Moving on to our growth. While we are maintaining our macro forecast for an approximate 15% decline in new pool starts for the year, we are pleased to increase our 2024 guidance. Our revenue guidance range for 2024 increases by $5 million to $495 million to $525 million. This increase represents the expected five months' contribution of the Coverstar Central acquisition.

繼續我們的成長。雖然我們維持今年新開工量將下降約 15% 的宏觀預測，但我們很高興上調 2024 年指引。我們 2024 年的收入指引範圍增加了 500 萬美元，達到 4.95 億美元到 5.25 億美元。這一成長代表了收購 Coverstar Central 預計五個月的貢獻。

In addition, we are increasing adjusted EBITDA guidance by $15 million to a range of $75 million to $85 million. $12 million of this $15 million increase is a function of our better margin performance, reflecting the success of our ongoing lean manufacturing, value engineering, and cost containment programs with the remaining $3 million, representing the expected 2024 contribution from the Coverstar Central acquisition. As a reminder, our guidance for the remainder of 2024 also reflects the normal modest seasonal slowdown in the second half of the year, impacting both sales and margin levels versus the first half.

此外，我們還將調整後 EBITDA 指引值增加 1,500 萬美元，達到 7,500 萬至 8,500 萬美元。這1500 萬美元的成長中的1200 萬美元是我們更好的利潤表現的結果，反映了我們正在進行的精益製造、價值工程和成本控制計劃的成功，剩下的300 萬美元代表了收購Coverstar Central預計在2024 年做出的貢獻。提醒一下，我們對 2024 年剩餘時間的指導也反映了下半年正常的適度季節性放緩，與上半年相比，這對銷售額和利潤水平產生了影響。

We also note that year-over-year comparisons will become more difficult as the year progresses, given the relative better performance in the second half of 2023 as the cumulative impact from our cost savings initiative and other discrete items positively impacted second half 2023 results.

我們也注意到，鑑於2023 年下半年的業績相對較好，隨著時間的推移，同比比較將變得更加困難，因為我們的成本節約計劃和其他離散項目的累積影響對2023 年下半年的業績產生了正面影響。

With that, I will turn the call back to Scott for his closing remarks.

接下來，我將把電話轉回給斯科特，讓他發表結束語。

Thank you, Oliver. We are very pleased with how well our teams executed amid soft industry conditions, gain traction for fiberglass pools, launching new products, driving cost savings, and productivity gains throughout the organization, and of course, completing an important acquisition that will drive incremental growth for our company. Latham is also pleased to increase guidance this year, and this is due to how well positioned we are in the marketplace and how committed our leadership and team members are to meeting and exceeding our objectives, while ensuring the very best in customer service.

謝謝你，奧利佛。我們對我們的團隊在疲軟的行業條件下的執行情況感到非常滿意，獲得了玻璃纖維池的牽引力，推出了新產品，推動了整個組織的成本節約和生產力提高，當然，完成了一項重要的收購，這將推動玻璃纖維池的增量成長我們公司。瑞生也很高興今年增加了指導，這是因為我們在市場中的地位非常好，以及我們的領導層和團隊成員對實現和超越我們的目標的承諾，同時確保提供最好的客戶服務。

In summary, this has been a period of considerable progress for Latham. Our priorities remain the same, and we are confident in our ability to continue to effectively navigate the current environment and emerge as an even stronger company. Operator, I would like to open the call to questions.

總而言之，這是萊瑟姆取得長足進步的時期。我們的優先事項保持不變，我們對繼續有效應對當前環境並成為更強大的公司的能力充滿信心。接線員，我想開始提問。

We will now begin the question-and-answer session. (Operator Instructions)

我們現在開始問答環節。（操作員說明）

Tim Wojs, Baird.

提姆·沃伊斯，貝爾德。

Hey, everybody.

嘿，大家。

Good afternoon. Nice job on the margins. Maybe just to start off, Scott, just I guess on fiberglass first, it sounds like the fiberglass business did better than the total company. So I just kind of wanted to confirm that. And then I guess, second, just any quantitative details that maybe you could add or color around just kind of the dealer interest that you're seeing in fiberglass kind of incrementally as this downturn has kind of gone out now for 18 to 24 months? Just trying to understand if you're seeing more dealer sign-ups or if you're actually seeing any sort of mix shift within your current dealer base now that things have kind of slowed down relative to the last few years?

午安.邊緣工作做得很好。也許只是為了開始，斯科特，我想首先是玻璃纖維，聽起來玻璃纖維業務比整個公司做得更好。所以我只是想確認一下。然後我想，第二，隨著經濟低迷已經過去 18 到 24 個月，您可能會添加或著色經銷商對玻璃纖維的興趣，從而逐漸增加任何定量細節？只是想了解您是否看到了更多的經銷商註冊，或者您是否確實看到了當前經銷商基礎中的任何形式的組合轉變，因為情況相對於過去幾年有所放緩？

Yes. So, Tim, as we've said on the last several calls, right, fiberglass overall continues to outperform the total market in terms of new small starts and fiberglass growth internally outperforms in the in-ground pool category. It's that one and we continue to see the ongoing penetration and adoption of fiberglass.

是的。因此，蒂姆，正如我們在最近幾次電話會議中所說的那樣，就新的小規模開工而言，玻璃纖維總體上繼續跑贏整個市場，並且玻璃纖維內部增長在地下泳池類別中表現優於。就是這樣，我們繼續看到玻璃纖維的不斷滲透和採用。

So we're really happy with what the team's been able to do there and what our dealers have been able to do. And I think, right, it is a lower cost product versus a concrete pool. So, there's benefits to the consumer to making that switch. On the dealer front, the team has done a really nice job continuing to add new dealers, right? This has been a focus for us for the last 12 to 18 months.

因此，我們對團隊以及我們的經銷商所做的事情感到非常滿意。我認為，與混凝土水池相比，這是一種成本較低的產品。因此，做出這種轉變對消費者來說是有好處的。在經銷商方面，團隊做得非常好，不斷增加新經銷商，對嗎？過去 12 至 18 個月，這一直是我們關注的焦點。

I think in an environment where maybe there's not as much as demand that they've seen, going back to the 21, 22 timeframe, they do have a little bit more time to look at the product, try all the products, attend one of our boot camps, get educated on all the benefits of fiberglass go through the training, see how our lead generation works. We can show how we can generate leads for them and then the full support we deliver with our footprint of the fiberglass facilities that they'd be able to ship pools quicker.

我認為，在一個可能沒有他們所看到的需求那麼多的環境中，回到 21、22 的時間範圍，他們確實有更多的時間來查看產品，嘗試所有產品，參加其中之一我們的訓練營，了解玻璃纖維的所有優點，透過培訓，了解我們的潛在客戶開發如何運作。我們可以展示如何為他們產生潛在客戶，然後透過我們的玻璃纖維設施足跡提供全面支持，使他們能夠更快地運送泳池。

And with our lead times in our service are in phenomenal position where we can quickly turn pools to them. So I think we've seen a nice trend with new dealers sign up in those that have been with us for, let's say, more than a year progressing and growing their business with kind of the walk and willingness to actually grow the business environment where pool starts are down overall.

我們的服務交付時間非常出色，可以快速將資源池轉給他們。因此，我認為我們已經看到了一個很好的趨勢，新經銷商加入了那些已經與我們合作一年多的經銷商，他們的業務取得了進展並發展了業務，並願意真正發展商業環境，其中泳池開工率整體下降。

Okay. Okay. That's helpful. Tanks for that. And then just on Coverstar Central, can you remind us just how big the auto-cover businesses as a percentage of the covered business for you in total? And then I guess, how incrementally aggressive will you kind of be or plan to be on M&A? Just the weakness that you're kind of seeing in this downturn, I'm just kind of curious if you're in a position to continue to do M&A if those opportunities kind of present themselves. Thanks.

好的。好的。這很有幫助。坦克。然後，在 Coverstar Central 上，您能否提醒我們汽車覆蓋業務佔您覆蓋業務總數的比例有多大？然後我猜想，您在併購方面將採取或計劃採取何種漸進式積極態度？只是你在這次經濟低迷中看到的弱點，我只是有點好奇，如果這些機會出現的話，你是否能夠繼續進行併購。謝謝。

Yeah, Tim, Enteno cover business in that cover product category did not really split out the numbers between the two, but I think it's safe to say auto-covers is the larger of that category in that hopes of a product breakout we do for covers. You also remember right, it's similar to fiberglass, lack of awareness, lack of adoption of the product in the marketplace by both dealer and consumer and great financial benefits and returns for the homeowner in terms of water conservation, energy savings, lower chemical usage, water conservation, and more importantly, the safety aspect of cover.

是的，Tim，Enteno 封面產品類別中的封面業務並沒有真正區分兩者之間的數字，但我認為可以肯定地說，汽車封面是該類別中較大的一個，因為我們希望封面產品能夠取得突破。您還記得沒錯，它與玻璃纖維類似，缺乏認識，經銷商和消費者在市場上缺乏對產品的採用，並且在節水、節能、減少化學品使用方面為房主帶來巨大的經濟利益和回報，節約用水，更重要的是保障安全方面。

You can't beat that, right. The pool is inaccessible when that cover is on the pool. I think particular for this, what it does is the auto-cover category for us in all of our dealers who support that network out there, they really act as an extension of the Latham team, right? They're part of our sales force. They provide distribution, technical support, installation for the builder and the dealer. They're out there representing our company day in and day out, and many people have viewed them over the years in part and believe Latham team and family, which they truly are, I think, particularly Coverstar Central 29 state, our largest auto-cover costs or dealer out there in our network, great partnership and relationship with that team.

你無法擊敗它，對吧。當泳池蓋上蓋子時，泳池將無法進入。我認為特別是這一點，它所做的是我們所有支持該網絡的經銷商中的汽車覆蓋類別，他們確實充當了瑞生團隊的延伸，對吧？他們是我們銷售隊伍的一部分。他們為建築商和經銷商提供分銷、技術支援和安裝服務。他們日復一日地代表我們公司，多年來，許多人都部分地看過他們並相信 Latham 團隊和家庭，我認為他們確實是這樣，特別是 Coverstar Central 29 州，我們最大的汽車公司支付我們網絡中經銷商的費用，與該團隊建立良好的合作關係。

I think is going to really help us drive the adoption and awareness much faster in this category, somewhat of fiberglass. But more importantly, it's going to give us access to a lot of dealers. We do not do business with today, right? We're that team is putting auto-covers on, concrete pools, competitor Zeinal pools, competitors, fiberglass pools.

我認為這將真正幫助我們更快地推動這個類別（某種程度上是玻璃纖維）的採用和認知。但更重要的是，這將使我們能夠接觸到許多經銷商。我們今天不做生意吧？我們是那個正在安裝汽車罩的團隊，混凝土水池，競爭對手的 Zeinal 水池，競爭對手的玻璃纖維水池。

We'll not have the ability to jointly share a lot of data. We did not share before to accelerate dealer conversion, drive more covers on pools and basically get a hold of the population of people in our 400 plus dealers who are not buying Latham products today, other than maybe an auto-cover exposure to that product for us. And we're really excited.

我們將沒有能力共同分享大量數據。我們之前沒有進行分享，以加速經銷商轉化，推動更多的覆蓋池，並基本上掌握我們 400 多家經銷商中目前不購買瑞生產品的人數，除了可能在汽車覆蓋範圍內接觸該產品之外我們。我們真的很興奮。

And then on your question on M&A, we'll continue to evaluate the market as opportunities exist out there for transactions that can be accretive in all our product categories. It's been a history of our company, is a core part of our DNA. So I think we'll continue to look at the opportunities as they exist and continued dialogues with anyone out there who would be looking potentially come jointly developed with where and when it makes sense and at the right value.

然後，關於您關於併購的問題，我們將繼續評估市場，因為存在可以在我們所有產品類別中增值的交易機會。這是我們公司的歷史，也是我們 DNA 的核心部分。因此，我認為我們將繼續專注於存在的機會，並與任何有可能尋求共同開發的人繼續對話，並在有意義的時間和地點以正確的價值進行共同開發。

Okay. Okay. Thanks for all that, Scott.

好的。好的。謝謝你所做的一切，斯科特。

Ryan Merkel, William Blair.

瑞恩·梅克爾、威廉·布萊爾。

Good afternoon, guys. Mike Francis on for Ryan. Great quarter here. First thing I want to ask can you give some details within the factors that you gave as to what led to the better gross margins? Anything you could quantify between all those factors would be great.

下午好，夥計們。麥克·弗朗西斯替補瑞安。這裡很棒。我想問的第一件事是，您能否在您給出的因素中提供一些細節，說明是什麼導致了更好的毛利率？任何你能在所有這些因素之間進行量化的東西都會很棒。

Sure. I'll gladly take that. So, we are very pleased with our outperformance in Q2 here posting EBITDA margins increase of about 400 basis points, on 10% lower volume. Couple of couple of areas where that outperformance is coming from. One is cost management and an outlook on cost controls continues to be a strong point here. We ended that at the end of Q1 as well. And that's really driving the right balance between minimizing the operating costs on the call, while investing in future growth. And it's future growth investments such as lead generation, fiberglass conversion, marketing, digital transformation.

當然。我很樂意接受。因此，我們對第二季度的優異表現感到非常滿意，EBITDA 利潤率增長了約 400 個基點，但銷量下降了 10%。這種優異表現來自於幾個領域。一是成本管理，而成本控制的前景仍是這裡的重點。我們也在第一季末結束了這一點。這確實在最大限度地降低通話營運成本和投資未來成長之間取得了適當的平衡。這是未來的成長投資，例如潛在客戶開發、玻璃纖維轉換、行銷、數位轉型。

The second area of outperformance is lean and value engineering. The programs are doing extremely well. The benefits are coming and are very visible in our P&L. As a matter of fact, they're coming a little bit earlier than we expected. And I think the last point I would like to offer is material costs. And those two components deflation, I would say is roughly as expected and guided in prior calls. But then we are seeing benefits from what I call in my prepared remarks, supply optimization.

第二個表現優異的領域是精實和價值工程。這些計劃進展得非常好。好處即將到來，並且在我們的損益表中非常明顯。事實上，他們來得比我們預期的早。我想我想提出的最後一點是材料成本。我想說，這兩個組成部分的通貨緊縮大致符合先前電話會議的預期和指導。但隨後我們看到了我在準備好的發言中所說的「供應優化」所帶來的好處。

So over the last few quarters and coming out of COVID and supply chain shortages, we onboard new suppliers and we are actively allocating business for better quality, for supply availability and stability, and then also for economic reasons. And we saw some tailwind from that in the second quarter. Again, very pleased with a 400 basis point outperformance year-over-year on 10% lower.

因此，在過去的幾個季度中，在擺脫了新冠疫情和供應鏈短缺的影響後，我們引入了新的供應商，並積極分配業務，以提高品質、供應可用性和穩定性，同時也出於經濟原因。我們在第二季度看到了一些順風車。再次，我們對同比下降 10%、跑贏 400 個基點感到非常滿意。

Perfect. And then second one for me. Can you give an update on some of the refresh and the new pool models that you discussed last quarter and then also within the fiberglass segment in particular? Has there been a difference in demand trends between sort of more like higher price pools and the lower price?

完美的。然後是我的第二個。您能否介紹一下上個季度討論的一些更新和新泳池模型的最新情況，特別是在玻璃纖維領域？較高價格池和較低價格池之間的需求趨勢是否有差異？

Thank you.

謝謝。

Yes. So specific to the fiberglass models, again, we're constantly taking a pulse of the consumer interest and pool that they're on our website, looking at the various models we have, dealer feedback of what consumers are looking for and I think the trends are more and more rectangular pools, extremely feature rich. And if you look at the Astoria Collection, right? It's got the built-in spot, got the bigger tanning ledge is, it's got a lot of bench seating. A very feature rich pool that I think, resonates very well at the consumer and dealer level and again, launching some of these pools in 12 foot and 14-foot wide, people are moving more towards smaller pools. Backyard space are getting smaller.

是的。因此，具體到玻璃纖維型號，我們會不斷把握消費者興趣的脈搏，並在我們的網站上收集他們的信息，查看我們擁有的各種型號，經銷商對消費者正在尋找的產品的反饋，我認為趨勢是水池越來越長方形，功能極為豐富。如果你看看阿斯托里亞系列，對嗎？它有內置的地方，有更大的曬黑壁架，有很多長凳。我認為這是一個功能豐富的泳池，在消費者和經銷商層面產生了很好的共鳴，並且推出了一些 12 英尺和 14 英尺寬的泳池，人們越來越傾向於較小的泳池。後院空間越來越小。

The pool becomes part of an overall backyard entertainment experience, and that continues to resonate by all levels. And I think that's why we've got the green gala which is the cocktail pool we've won several years ago. You know, people continue to gravitate towards those pools and one of the other benefits is right. Our auto-covers fit perfectly well on all of those pools with the rectangle.

游泳池成為整個後院娛樂體驗的一部分，並繼續引起各個層面的共鳴。我認為這就是我們舉辦綠色晚會的原因，這是我們幾年前贏得的雞尾酒池。您知道，人們繼續傾向於這些池，而其他好處之一是正確的。我們的自動蓋非常適合所有這些矩形泳池。

That's a much easier install. I'll again give you that protection for the pool. And I think launching this new lineup of vinyl liner plunge pools, again, a basic pool and then moving on out to multiple features, work with a very feature rich pool will allow the consumer an opportunity to have a lower cost model facility, beautiful looking vinyl pool that would mirror what we're doing in the fiberglass world.

這樣安裝就容易多了。我會再次為您提供游泳池的保護。我認為推出這個新系列的乙烯基襯裡小型泳池，同樣是一個基本的泳池，然後轉向多種功能，與功能非常豐富的泳池合作將使消費者有機會擁有成本更低的模型設施，外觀漂亮乙烯基池將反映我們在玻璃纖維世界中所做的事情。

So it's all about making sure we can touch every aspect of the market from that entry level all the way up through, let's say, a big fiberglass pool. And all of those models are definitely much lower cost upfront on than a comparable concrete pool and then the ease of maintenance that comes along with all of that just doors the experiences of the concrete pool.

因此，這一切都是為了確保我們能夠觸及市場的各個方面，從入門級一直到大型玻璃纖維池。所有這些模型的前期成本肯定比同類混凝土水池低得多，而且隨之而來的易於維護性也提高了混凝土水池的體驗。

Very perfect. Thank you guys.

非常完美。謝謝你們。

Matthew Bouley, Barclays.

馬修·博利，巴克萊銀行。

(technical difficulty) for Matt today. Thanks for taking my question. I wanted to first ask on recent demand trends. I'm curious what you guys are seeing in terms of the recent demand as far as July? I know seasonally it's better this quarter, but if you can give any specifics on how it multiplies months to months, that would be really helpful? Thanks.

（技術難度）今天對馬特來說。感謝您提出我的問題。我想先詢問最近的需求趨勢。我很好奇你們對最近 7 月的需求有何看法？我知道從季節性角度來看，本季度會更好，但如果您能提供有關它如何逐月乘法的具體信息，那真的會有幫助嗎？謝謝。

Yes, I think if we kind of just look back at 2Q, when we were together last time a quarter ago with 1Q earnings results, we talked about how we saw a significant uptick in demand in the market exiting March. That trend really continued and carrying through all of 2Q, we never saw that big peak boom, like you typically would see in May and June from the peak building season. I think that the reflection of new pool starts being down 15% overall, but we just saw nice sequential continued consistent growth order rates through the entire quarter. I would say that trend has continued through July, albeit at a slightly lower rate.

是的，我認為，如果我們回顧一下第二季度，當我們上一次在一個季度前討論第一季度的盈利結果時，我們討論瞭如何看到 3 月份退出市場的需求顯著上升。這種趨勢確實持續了整個第二季度，我們從未見過像您通常在五月和六月建築高峰期看到的那樣的高峰繁榮。我認為新池的反映開始總體下降 15%，但我們剛剛看到整個季度訂單率連續持續穩定增長。我想說，這種趨勢一直持續到七月，儘管速度略低。

Just because we are exiting the peak two Q bill 3Q is still a big piece or just really entering the winter safety cover season here in the next 30 to 45 days. So I think demand is tracking exactly what we said in the beginning of the year. New pool starts down 15%, fiberglass outperform, nice growth with auto-covers and then the recurring revenue piece of the business with liners and covers performing kind of as expected. If we look at consumer demand, right, this is the big one watch. The interest in pooled is still out there and it's pretty big.

僅僅因為我們即將退出第二季的高峰期，第三季的帳單仍然是一大塊，或在接下來的 30 到 45 天內真正進入冬季安全保障季節。所以我認為需求與我們年初所說的完全一致。新池開始下降 15%，玻璃纖維跑贏大盤，汽車覆蓋件增長良好，然後襯裡和覆蓋件業務的經常性收入部分錶現符合預期。如果我們看看消費者的需求，對吧，這是一款大手錶。人們對匯集的興趣仍然存在，而且相當大。

We look at all the stats of Taiwan website, interest in pools, accounts being signed up, leads being generated. All those metrics are really good indicators that the interest in pool is out there. The consumer is just on the sideline, waiting to make that purchase. And look, our service levels operationally in a really good position where when that demand comes and someone makes the decision we can quickly satisfy that demand. Some cases, being able to turn a product in two or three days for a dealer that they can close this deal with the consumer who's ready to kind of make the purchase.

我們查看台灣網站的所有統計資料、池的興趣、正在註冊的帳戶、正在產生的潛在客戶。所有這些指標都是很好的指標，顯示人們對礦池的興趣是存在的。消費者只是在一旁等待購買。看，我們的服務水準在營運上處於非常好的位置，當需求出現並且有人做出決定時，我們可以快速滿足該需求。在某些情況下，能夠在兩三天內為經銷商提供產品，他們就可以與準備購買的消費者完成交易。

Awesome. Super helpful. Thanks. And then my second question. I'm curious if you talk a little bit about volume and pricing expectations for the year. Are you still expecting flattish price (technical difficulty) and if you could walk through Q3, Q4 guidance? Thanks.

驚人的。超有幫助。謝謝。然後是我的第二個問題。我很好奇您是否能談談今年的銷售和定價預期。您是否仍期望價格持平（技術難度）？謝謝。

I want to say, nothing has changed the guidance of last two calls. We generally see prices sticking in the market. That doesn't mean that we run certain promotions or come off quite a bit increase in some of the categories. But overall, net-net, pricing is exactly where we guided and I would still say that overall, it's flattish throughout the year comparing 2024 with 2023.

我想說，過去兩次電話會議的指導方針沒有任何改變。我們通常會看到市場上的價格堅挺。這並不意味著我們會進行某些促銷活動或在某些類別上大幅增加。但總體而言，淨淨定價正是我們所指導的，我仍然想說，總體而言，與 2024 年和 2023 年相比，全年定價持平。

Thank you.

謝謝。

Andrew Carter, Stifel.

安德魯卡特，斯蒂菲爾。

Thank you. Good evening. So a question about kind of the updated guidance. It looks like the increase in organic EBITDA, $12 million is due entirely to kind of, I guess, potentially outperformance of gross margin in the quarter and you were guiding to flat previously was up, I guess, 500 basis points. So that got all the EBITDA. But could you give an updated expectation of what you're expecting for the gross margin for the year? And I know you mentioned that there are -- you are increasing investments for recovery and then there's also incentive comp, have your assumptions around those two items changed at all?

謝謝。晚安.關於更新指南的問題。看起來有機 EBITDA 的成長（1200 萬美元）完全是由於本季度毛利率的潛在表現，而您之前的指導是持平的，我猜是上升了 500 個基點。這樣就得到了所有的 EBITDA。但您能否給出今年毛利率的最新預期？我知道你提到過——你正在增加復甦投資，然後還有激勵補償，你對這兩個項目的假設有沒有改變？

Thanks for the question. So the updated guidance being $12 million, reflecting the ongoing performance, partially driven by Q2, but not fully driven by Q2. And then $3 million is the additional incremental impact from the acquisition of Coverstar Central. I already mentioned, the three drivers being cost management, lean value engineering, and material costs.

謝謝你的提問。因此，更新後的指導值為 1200 萬美元，反映了持續的業績，部分由第二季度驅動，但並非完全由第二季度驅動。300 萬美元是收購 Coverstar Central 的額外增量影響。我已經提到過，三個驅動因素是成本管理、精實價值工程和材料成本。

We saw a nice contribution in Q2. And we don't expect anything less from Q3 and Q4, plus the addition of the restructuring projects that are not fully in our run rate. All of that from when we when we talk about gross margin guidance prior to our call today, we guided flat gross margins. I would probably change that to being a couple of percentage points up sort of last year was 27%, prior guidance was 27%. Gross margin for the year at 29% to 30%.

我們在第二季度看到了很好的貢獻。我們預計第三季和第四季不會有任何下降，再加上未完全納入我們運行速度的重組項目的增加。所有這些都是從今天我們在電話會議之前討論毛利率指導時開始的，我們指導毛利率持平。我可能會將其更改為比去年高出幾個百分點的 27%，而先前的指導為 27%。全年毛利率在29%至30%之間。

Perfect. That's helpful. And then just to get a little bit more about Coverstar Central, you're kind of taking on this acquisition. I know this is a unique. It's a dealer with exclusives. I guess number one, could you quantify because if I look at the math correctly, it's very heavily penetrated in the South. Could you kind of quantify kind of your penetration in those markets there for kind of the incremental dealer opportunities? And are there any risks here around channel conflicts, because I know you use other distributors? And I would assume you're not interested in distributing other products through these guys. Maybe they don't have the capabilities? Thanks.

完美的。這很有幫助。然後，為了進一步了解 Coverstar Central，您就接受了這次收購。我知道這是獨一無二的。這是一家獨家經銷商。我想第一，你能量化一下嗎，因為如果我正確地計算數學，它在南方的滲透率非常高。您能否量化一下您在這些市場的滲透程度，以獲得增量經銷商機會？因為我知道你們使用其他經銷商，所以通路衝突是否有任何風險？我假設您對透過這些人分銷其他產品不感興趣。也許他們沒有這個能力？謝謝。

Yeah. So Andrew, of course, Coverstar Central kind of thing that they play in kind of the central part of the US, crop from the south, right up through the Canadian border, some into the Northeast a little bit on a few of the states, kind of Mississippi for the East Coast and through the sand states. First, there's not a lot auto-covers in the sands data pools, right? People are not putting covers on the pools.

是的。所以安德魯，當然，Coverstar Central 的那種東西，他們在美國中部地區播放，從南部作物，一直穿過加拿大邊境，有些進入東北部的一些州，類似於密西西比州的東海岸和沙州。首先，沙子資料池中沒有太多自動覆蓋，對嗎？人們沒有給泳池蓋上蓋子。

So similarly, fiberglass, a massive, massive opportunity for growth to drive the adoption and awareness there as we launch our covers distinctly in those markets. A good penetration through a lot of the Midwest with this product, I think Coverstar Central has done a phenomenal job of growing the business over the years and working not only with dealers, but also working with several of our distribution partners that are out there in this space.

同樣，玻璃纖維是一個巨大的成長機會，當我們在這些市場上推出我們的封面時，可以推動那裡的採用和認知度。我認為 Coverstar Central 多年來在業務成長方面做得非常出色，不僅與經銷商合作，而且還與我們在美國的幾個分銷合作夥伴合作。

We don't see any conflict today. We don't see any conflict tomorrow based on how the model works. And that applies not only Coverstar Central but all of our other auto-covered partners throughout North America. I think it is a very unique network in terms of how we go to business here and like I said earlier, you got a beauty guidance there, an extension of our sales force team. They're out there providing technical support for builders and dealers.

今天我們沒有看到任何衝突。根據模型的工作原理，我們明天不會看到任何衝突。這不僅適用於 Coverstar Central，也適用於我們整個北美地區的所有其他汽車保險合作夥伴。我認為就我們如何在這裡開展業務而言，這是一個非常獨特的網絡，就像我之前所說的那樣，你在那裡得到了美容指導，是我們銷售團隊的延伸。他們為建築商和經銷商提供技術支援。

They're actively promoting the product with very unique marketing opportunities and things these teams do. We've got a large auto-cover deal that runs all of the Canadian market for us based in Vancouver and coming all way into the Greater Montreal, Greater Toronto area. They're just great business partners with us at all of our dealer conferences or with us at all of our pool shows.

他們透過非常獨特的行銷機會和這些團隊所做的事情積極推廣產品。我們獲得了一項大型汽車覆蓋交易，該交易為我們經營整個加拿大市場，總部設在溫哥華，並一直延伸到大蒙特利爾、大多倫多地區。在我們所有的經銷商會議或我們所有的泳池表演中，他們都是我們出色的業務合作夥伴。

And like I said, they're an extension of the team. I think it just makes sense at this point in time to take another step to just try to drive the awareness of this business and more importantly, provide more growth opportunities because they do access a lot of dealers we don't touch today. And that's probably the exciting part, not just the auto-cover piece. But what we can do, we're converting concrete dealers, the fiberglass where they're putting covers on those pools for those dealers.

正如我所說，他們是團隊的延伸。我認為在這個時候採取另一步驟來提高該業務的知名度是有意義的，更重要的是，提供更多的成長機會，因為他們確實接觸到了許多我們今天沒有接觸過的經銷商。這可能是令人興奮的部分，而不僅僅是汽車蓋部分。但我們能做的是，我們正在改變混凝土經銷商，他們為這些經銷商的水池蓋上玻璃纖維。

Thanks. I'll pass it on.

謝謝。我會把它傳遞下去。

(Operator Instructions)

（操作員說明）

Susan Maklari, Goldman Sachs.

蘇珊·馬克拉里，高盛。

Thank you. Good afternoon, everybody.

謝謝。大家下午好。

Good afternoon, Susan.

下午好，蘇珊。

Good afternoon, Scott. My first question is, can you talk a bit about the raw materials? I think that you mentioned in your remarks that you have seen some relief on that side. Can you just give a bit more color on that?

下午好，史考特。我的第一個問題是，你能談談原料嗎？我認為你在演講中提到，你已經看到了這一方面的一些緩解。你能對此多加一點顏色嗎？

Sure. So we continue to see slight deflation. It's coming from selected resins and PVC film from sequentially. Probably, deflation is less obvious versus year over year as we did see in 2023, as I said in my prepared remarks, some relief mid-year in terms of the raw material costs. And it's small on the 2023 release that we saw that anything sequentially, we see all the raw material basket for the last couple of quarters, relatively stable. And again, our guidance remains unchanged for modest level of inflation, again, primarily driven by more 2023 versus 2024.

當然。因此，我們繼續看到輕微的通貨緊縮。它是由精選的樹脂和PVC薄膜依次製成。正如我在準備好的演講中所說，與去年同期相比，通貨緊縮可能不太明顯，正如我們在 2023 年所看到的那樣，年中原材料成本有所緩解。在 2023 年發布的版本中，我們看到任何連續的事情都很小，我們看到過去幾季的所有原料籃子都相對穩定。同樣，我們對溫和通膨水準的指引保持不變，這主要是由於 2023 年通膨率高於 2024 年。

Okay. That's helpful. And then you mentioned in your prepared remarks as well that you expect to see 140 basis points of margin benefit from the Coverstar deal as is integrated and comes through. Any thoughts on the timing of when we could start to see that and how it will flow through over the upcoming quarters?

好的。這很有幫助。然後，您在準備好的發言中也提到，您希望從整合並完成的 Coverstar 交易中看到 140 個基點的利潤率收益。關於我們什麼時候可以開始看到這一點以及它在未來幾季將如何發展有什麼想法嗎？

Yes. I think when you saw this, the 140 basis points comment is sort of a full year number as a combined business, the seasonality and cadence both on sales as well as EBITDA is closely mirroring the base of mass we are competing in the same markets yet. So on a pro forma basis, again, 140 basis point seasonality is roughly in line with our seasonality at Latham.

是的。我認為當您看到這一點時，140 個基點的評論是作為一個綜合業務的全年數字，銷售以及 EBITDA 的季節性和節奏密切反映了我們在同一市場競爭的大眾基礎。因此，在預期的基礎上，140 個基點的季節性與瑞生的季節性大致一致。

Okay. All right. Thank you for the color and good luck with everything.

好的。好的。謝謝你的顏色，祝一切順利。

Thank you, Susan.

謝謝你，蘇珊。

This concludes our question-and-answer session. I would like to turn the conference back over to Scott Rajeski for any closing remarks.

我們的問答環節到此結束。我想將會議轉回斯科特·拉耶斯基（Scott Rajeski）發表閉幕詞。

Thank you for your time here this afternoon. We really appreciate everyone's continued support for Latham. We look forward to seeing you all at upcoming conferences and meetings at our next earnings call. And I hope everyone has a great rest of summer and have a safe summer as well. Take care everyone. Have a good evening.

感謝您今天下午來到這裡。我們非常感謝大家對瑞生的持續支持。我們期待在下次財報電話會議上與大家見面。我希望每個人都能度過一個愉快的夏天，並度過一個安全的夏天。大家保重。祝你晚上愉快。

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

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。