Good morning, and welcome to the Latham Group Q2 fiscal 2023 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 on your telephone keypad. 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 like now to turn the conference over to Nicole Harlowe, investor relations representative. Please go ahead. Thank you. Earlier this morning, we issued our Q2 fiscal 2023 earnings press release, which is available on the investor relations portion of our website, where you can also find the slide presentation that accompanies our prepared remarks. On today's call are Latham's President and CEO, Scott Rajeski, and Interim CFO, Mark Borseth. Following the remarks, we will open up the call to questions. During this call, the company may make certain statements that constitute forward-looking statements, which reflects 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 the 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. Thanks, Nicole. Good morning, everyone. Thank you for joining us for our Q2 fiscal 2023 earnings call. I'll begin today's call with a review of highlights from Q2 and a discussion of our strategic priorities. I will then turn it over to Mark to review our Q2 and first half financial results and outlook for 2023. As we've worked our way through the first 7 months of the year, we're pleased with where we sit today, given the tough macro environment and our continued confidence in our long-term growth opportunity. With our leadership position across our product categories and our unique direct-to-homeowner and dealer strategies, we continue to work towards driving the material conversion from concrete pools to fiberglass. At the same time, in the near term, we are remaining nimble across operations, including focusing on reducing costs and inventory and enhancing operating efficiencies. As a result, we have tightened our fiscal 2023 guidance for net sales and Adjusted EBITDA within the initial range we initiated at the beginning of the year. In Q2, we delivered sequential improvement in net sales from Q1 2023 to Q2 2023. This was expected as we entered our peak pool building season. Despite year-over-year declines in Q2, we were pleased to deliver quarterly sequential improvements in gross margin and Adjusted EBITDA margin in Q2 from Q1. As our fixed cost leverage improved significantly, we benefit from our cost reduction actions. Our Q2 results reflect our active management of costs and alignment of production levels and inventory with demand, while still maintaining best-in-class lead times. Our digital tools and marketing efforts continue to drive increased website activity and leads to dealers in Q2. This demonstrates that underlying interest in pool ownership remains robust, even as the consumer purchasing decision is continuing to stretch out from what we've seen over the last several years. With a strong supply chain and enhanced manufacturing capacity, we have continued to increase our focus on dealer recruitment, which will support the conversion to fiberglass over time. These efforts are bearing fruit, with continued new dealer sign-ups in Q2, in line with our expectations for the year. As expected, we enhanced our liquidity in Q2, positioning us well for the second half of 2023. As we've now cleared the first half of the year, we have better visibility in how we think 2023 will shake out. Therefore, as we think about our strategic priorities for the remainder of the year, we are focused on driving operational efficiency through our continuous improvement initiatives and prudent cost management. Our lead generation efforts continue to show strength in underlying consumer demand, giving us confidence in continued execution of our top-line growth priorities, which places us in a strong position for long-term growth. We have continued to focus on expanding the awareness and adoption of fiberglass to support the material conversion from concrete pools to fiberglass. Our strategy of targeting both homeowners and dealers has continued to yield results, and we have continued to receive positive feedback from dealers about Latham's value proposition. We are also excited about our new digital innovation that will strengthen our direct-to-consumer strategy. As we saw robust pool industry growth over the last several years, while simultaneously facing supply chain and raw material-related challenges and shortages, we focused on best positioning our business to meet increased demand. When we saw market conditions turn late last year, we took immediate actions in Q4 of 2022 to reduce our costs, which are on track to yield $12 million in cost savings in 2023. As anticipated, market conditions have remained challenging throughout 2023. We have continued to monitor this closely and respond by matching our production, staffing, and inventory levels to demand. During Q2 and into early Q3, we took further actions to enhance our operating efficiency, including the continued streamlining of our manufacturing footprint, further headcount reductions, and restricting discretionary spending. We expect to realize $12 million in annualized cost savings, with $6 million expected to be realized in fiscal 2023 from these actions. In tandem, we are gaining traction on our lean value engineering efforts, which have allowed us to improve the efficiency of our manufacturing processes. We have made good progress in redesigning several of our products with a focus on reducing material costs and improving productivity. Our lean initiatives continue to free up capacity and floor space in our facilities and drive lower inventory levels. We expect to see an increasing benefit of these actions reflected in Adjusted EBITDA margins in the second half of fiscal 2023. We firmly believe the material conversion from concrete pools to fiberglass continues to present attractive long-term growth opportunities for the business. As you'll recall, we drove fiberglass share expansion of 3 percentage points to 21% of US in-ground residential pool installations in 2022, despite the US in-ground residential pool installations being down 16% versus 2021. During Q2, we celebrated the grand opening of our two new fiberglass manufacturing facilities in Kingston, Ontario, and Oklahoma. These two facilities will allow us to better serve large markets with strong fiberglass conversion opportunities, as well as to drive improved lead times and reduced freight costs as we rebalance our manufacturing across our footprint. As we discussed on our last call, we are ramping up these facilities to match the demand we are seeing in these markets. Our lead generation efforts continued to drive year-over-year growth in website activity and leads in Q2, and we're seeing homeowners continue to use Latham's digital tools, such as the Pool Cost Estimator and my Latham. As we've advanced to our direct-to-homeowner strategies, we have focused on deeper analytics and opportunities to further support homeowners through the pool purchase journey. Notably, a number of leads in 2023 that started as prospects were nurtured by us and became highly qualified leads as a result. Roughly half of our leads in 2023 have an existing myLatham account, allowing us to better understand their preferences and budget before sending them to dealers. This helps homeowners make more informed purchase decisions and allows dealers to focus less on selling and more on installation. Beyond driving homeowner awareness and adoption of fiberglass, adding new and deepening existing dealer relationships is an important component of our strategy to drive the material conversion from concrete to fiberglass. With faster installation times and smaller crew needs compared to concrete, fiberglass pools provide dealers with the opportunity to rapidly expand their business. Our boot camps, combined with our business excellence coaching, are aimed at enhancing dealer productivity. Heading into peak pool building season, we had strong demand for our boot camps held at our training facility in Zephyrhills, Florida, We're excited to resume training again this fall. Continuing to enhance our value-added resources will enable us to attract and retain dealer partnerships. As such, we are excited to launch our new Latham Pro website later this year. This online hub will house all of our comprehensive turnkey marketing tools, including exterior signage, digital branding content, design and sales agent collateral, and product education resources. We believe this will be a game changer for dealers, allowing them to run their businesses more efficiently. Lastly, we are on track to meet the internal targets for new dealers with year-over-year growth in new dealer sign-ups in the first half of 2023. It takes time to ramp up new dealers, and many start small, but we believe expanding our dealer network will set us up for future growth. In closing, we are excited about the progress we've made on our strategic pillars. While the macroeconomic environment remains challenging, we are maneuvering our way through, positioning us well for the future. This has also enabled us to tighten our fiscal 2023 net sales and Adjusted EBITDA guidance within the initial range we initiated at the beginning of the year. Looking out to the rest of the year, we will remain nimble in responding to evolving market dynamics and balancing our production capabilities and capacity to ensure we are well positioned for future growth. At the same time, we will continue driving the conversion from concrete to fiberglass pools, expanding our direct-to-homeowner strategy, and delivering value to our dealers. With that, I'll turn the call over to Mark to review our Q2 and first half of 2023 results in greater detail. Mark? Thank you, Scott, and good morning, everyone. Please note that all comparisons we discuss today are on a year-over-year basis compared to the Q2 of fiscal 2022 and the first half of fiscal 2022, unless otherwise noted. Net sales for the Q2 of fiscal 2023 were $177 million, compared to $207 million in Q2 of 2022, a quarter in which we delivered 14% year-over-year growth from the same period in 2021. The change in Q2 fiscal 2023 sales is comprised of a 17% decline in volume, partially offset by a 3% increase in price. As expected, we were pleased to see sales sequentially improve from Q1 to Q2 as we entered into the peak pool building time of the year. Looking at our net sales results across our product categories for the quarter, in-ground pool sales were $91 million, down 19%, driven by continued softness in packaged pools as the channel continues to right-size inventories, and to a lesser degree, lower year-over-year fiberglass pool sales. As Scott mentioned, we continued to increase fiberglass penetration in the market in 2022. However, the anticipated reduction in the number of new pool starts this year is weighing on our results. Cover sales were $29 million, down 25%, while liner sales were $58 million, a 3% increase versus the prior year, and a reflection of the recurring revenue opportunity within this product line. Q2 gross profit was $50 million, compared to $68 million in Q2 2022. Gross margin was 28.4%, compared to 32.7% in Q2 of 2022. Gross profit was primarily impacted by reduced year-over-year sales. The sell-through of higher cost inventory and the right-sizing of our inventory accounted for more than the total margin reduction versus prior year. These impacts were partially offset by higher prices and benefits from our cost actions taken in Q4 of 2022 and Q2 of 2023. As we anticipated, we saw a noticeable improvement in gross margin on a sequential basis, with Q2 gross margins improving 420 basis points compared to Q1. Our fixed cost leverage improved significantly versus Q1 as we entered peak pool building season and benefited from cost reduction actions in Q4 of 2022 and Q2 of this year. We also continued to realize higher year-over-year prices. As a result of these actions, our year-over-year Q2 gross margin reduction was less than half what we saw in Q1. Looking out to the back half of the year, we expect continued gross margin improvement as we work down our higher cost inventory, lower our manufacturing overhead further, stabilize our inventory levels, realize increasing productivity, continue to benefit from higher prices, and begin to see modest levels of deflation. Selling, general, and administrative expenses decreased to $30 from 42 million in Q2 of 2022. The decrease was driven primarily by a $9 million decrease in non-cash stock-based compensation expense and cost reduction initiatives that are gaining traction. Excluding non-cash stock-based compensation expense, SG&A was $24 million, a decline of $3 million, or 10% versus prior year, as a result of lower employee incentive accruals and the benefits from the cost reduction actions taken in the Q4 of fiscal 2022 and the Q2 of this year. As a percentage of net sales, SG&A, excluding non-cash stock-based compensation, increased to 13.4% from 12.8% in Q2 of last year. As a result, Adjusted EBITDA for the Q2 was $31 million, compared to $49 million in Q2 of 2022, driven by the decrease in gross profit and partially offset by the reduction in SG&A expenses, excluding non-cash stock-based compensation expense. Adjusted EBITDA margin decreased to 17.5% from 23.5% for the prior year period. On a sequential basis, Adjusted EBITDA increased $20 million in the Q2 versus Q1, reflecting a 50% incremental profit on the incremental increase in Q2 net sales versus Q1. Adjusted EBITDA margin improved 950 basis points in Q2 versus Q1, as Scott mentioned. Turning to the first half results, net sales for the first half of fiscal 2023 were $315 million, compared to $398 million in the first half of fiscal 2022, a period in which we delivered 21% year-over-year growth from the same period in 2021, aided by elevated backlogs coming into 2022. The year-over-year change for first half fiscal 2023 is comprised of a 23% reduction in volumes and a 2% increase in price. By product line, in-ground pool sales for the first half were $169 million, down 24%. Liner sales of $84 million were down 19%, while cover sales of $62 million declined 13%. Our first half results are being impacted by the same factors we experienced in the quarter. Gross profit was $84 million, compared to the first half 2022 of $138 million, and gross margin decreased to 26.6% from 34.7% in the prior year period. First half 2023 gross profit was primarily affected by the lower sales levels referred to above. More than three quarters of the year-over-year gross margin reduction came from the sale of higher cost of inventory and the right sizing of our inventory. Negative fixed cost leverage, while significantly improved versus Q1, aided by our cost actions, remained a headwind in the first half. These impacts were partially offset by higher prices and productivity. Selling, General & Administrative expenses decreased to $63 from 87 million in the first half of fiscal 2022, reflecting an $18 million decrease in non-cash stock-based compensation, as well as the benefits from the cost reduction actions taken in the Q4 of fiscal 2022 and the Q2 of fiscal 2023. Excluding non-cash stock-based compensation, SG&A was $51 million, a decrease of $5 million, or 10%, driven by lower employee incentive accruals and benefits from the cost reduction actions taken in the Q4 of fiscal 2022 and the Q2 of this year. As a percentage of net sales, SG&A, excluding non-cash stock-based compensation, increased to 16.1% from 14.1% from the prior year period. Adjusted EBITDA was $42 million, compared to $97 million in the first half of 2022, driven by lower gross profit, which was partially offset by our lower SG&A spend, excluding non-cash stock-based compensation expense. As a result, Adjusted EBITDA margin decreased to 13.3% from 24.2% for the prior year period. As expected, we saw an increase in our liquidity during the quarter, as this is the time of the year we generate the majority of our cash. We are pleased with the strength of our balance sheet and remain disciplined in our capital allocation strategy. During the quarter, we repaid all of the $48 million of borrowing we had on our revolver. As of July 1, we had cash and cash equivalents of $43 and 75 million of borrowing availability under our revolver, giving us total liquidity of $118 million, up 44% from Q1, which is more than sufficient for the operations of the business. Net cash provided by operating activities was $36 million for the first half of fiscal year 2023, versus net cash used in operating activities of $15 million in the prior year period, propelled by reductions in inventories. Total debt was $312 million at the end of Q2, and our net debt leverage ratio was 3.0 x at the end of the quarter, compared to 2.9 x at the end of the Q1. The modest increase was driven by the year-over-year reduction in Adjusted EBITDA. Looking at CapEx spend, capital expenditures were $14 million, compared to $10 million in Q2 last year. As expected, CapEx spending increased versus Q1 as we are nearing the final payments related to the construction of our new Kingston facility. As we anticipated, CapEx for the first half of fiscal 2023 totaled $23 million, compared to $17 million in the prior year period. In our earnings release issued this morning, we tightened the range of our fiscal 2023 outlook for net sales and Adjusted EBITDA. As anticipated, ongoing macroeconomic challenges are weighing on consumer spending and demand. This is resulting in a decline for US new in-ground residential pool installations in 2023. As Scott mentioned, we continue to make progress executing our strategy to drive material conversion from concrete to fiberglass swimming pools, supported by our continued momentum on our lead generation efforts and digital tools. We continue to take a disciplined approach to capital investments, with a focus on the completion of our Kingston and Oklahoma fiberglass manufacturing facilities. As we've previously discussed, the majority of this spend was weighted to the first half of fiscal 2023. We also continue to work on improving profits and margins by focusing on operational efficiency and prudently managing our costs to better align with the current demand environment. As Scott previously mentioned, we took action in Q2 and into early Q3 of 2023 to further reduce our manufacturing overhead, headcount, and discretionary spend. We expect to realize an additional $12 million of annualized savings from these actions, with $6 million to be realized this year. This is in addition to the $12 million of savings from the cost reduction actions we took in Q4 of 2022 and expect to realize this year, for a total of $18 million of cost savings in 2023. We have already seen some benefit of our cost actions, lifting margins on a quarterly sequential basis in Q2 versus Q1. As we continue to sell through our higher cost inventory, further lower our manufacturing overhead, maintain our pricing levels, realize increasing benefits from our cost actions and productivity efforts, and begin to benefit from modest amounts of deflation, we expect to unlock margin improvement in the back half of the year versus the first half, as inferred from our full year guidance. As a result, we now expect fiscal 2023 net sales of $570 to 600 million, Adjusted EBITDA of $90 to 100 million, and capital expenditures of $32 to 38 million. Scott, with that, I'll turn it back to you for closing remarks. Thanks, Mark. Although our industry is facing near-term headwinds, which we are proactively managing through, we remain energized by the long-term opportunities we see in the business. The attractive dynamics of the outdoor repair and remodel industry remain intact. Homeowners continue to migrate to the suburbs, stay in their homes longer, and invest in the backyard. This view is supported by our lead generation engine, which points to robust underlying interest in pool ownership. We view the macroeconomic impact on consumer demand as a near-term headwind for our industry, and we are well positioned to help homeowners build the backyard of their dreams when they're ready to make their pool purchase. The installed pool base has grown significantly over the last several years, with in-ground residential pools expanding 5% from less than 5.2 million in 2016 to 5.4 million in 2022. As the installed pool base continues to age and grow over time, we are positioning ourselves to capitalize on recurring revenue opportunities within our replacement covers and liners products with the launch of our proprietary technology, Measure by Latham. As the only consumer brand in the residential pool market and the leader in every pool product category we compete in, especially fiberglass, we are well positioned to capitalize on these trends over time. Fiberglass offers significant benefits to homeowners and dealers alike, and we are expanding fiberglass share of the US in-ground residential swimming pool market as we drive the awareness of these benefits. 2023 will be a year of lower demand in the pool industry, but we believe the long-term potential is robust for all the reasons we have just mentioned. We will now open the line to questions. We will now begin the question-and-answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. We ask that you please limit yourself to one question and one follow-up. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Tim Wojs of Baird. Hey, guys. Go ahead, Tim. Good, good morning. Hey, Tim. Maybe, hey, maybe just to start, I was hoping maybe you could just give us a little bit more color, Scott, on, on some of the dealer activity that you mentioned in your prepared remarks, just, you know, maybe kind of, you know, you know, set us, you know, level set us a little bit on kind of where the, where the dealer base is today and, you know, how some of those net adds have, have been trending year to date? Good morning, Tim. You know, as I mentioned, you know, we, we proactively got back on an aggressive dealer acquisition approach, you know, mid last year, late last year, you know, clearly as a result of, you know, solidifying the supply chain and the amount of capacity we brought online and, and really targeted the fiberglass dealer to drive that, you know, conversion story from concrete to fiberglass. You know, I think we've done a really good job. Sales teams have done a really good job of, you know, adding a lot of new dealers in the territories where we, we had a lot of opportunity to, to grow and expand the dealer base, you know, in the, in the Northeast and the Southwest, you know, and I'd say throughout the majority of the country. You know, what, what we like about this is this will give us the opportunity to continue to drive and accelerate that growth and penetration of fiberglass. You know, we've been running a lot of active boot camps, getting them trained up, down in Zephyrhills. We'll resume that later here this fall as, as the dealers kind of wind down the season. You know, as we've, we've told folks time and time again, you know, the, the goal is to really get these guys to double volume year after year and, you know, increase their efficiency, you know, what they can get into the ground for the consumer. You know, clearly prove to these new dealers that also our lead generation activity is solid, and we can funnel a lot of demand to them to build that pipeline. We're, we're happy where we are. We're, you know, you know, maybe slightly ahead of what we thought we would be this time of the year, and, you know, we'll continue to, to add as we, we go throughout time. Okay. Okay, good. I guess, just maybe on the consumer kind of interaction front, I mean, how are your lead conversions? If you kind of look at the last 6 months, I mean, how have kind of the leads tracked relative to maybe what you thought coming into the year and just kind of what the overall consumer, you know, is kind of has kind of tracked? has the conversion from, like, a lead to, you know, an installed pool, I mean, has that dynamic changed at all over the last 6 to 12 months? We're happy with our lead activity. We've had a lot of success with leads, you know, both from our organic SEO and where we've run some regional campaigns, you know, where dealers wanted to see more leads. I'd say lead activity, activity on the website, number of people signing up for My Latham account, and just overall interest in pool ownership remains high across the board at the consumer level. I think what we've seen happening over the last 6-12 months is what I would say is a delay in the consumer making the purchasing decision. You know, we came into the year with nice backlogs. You know, dealers have been working through those. I'd say the consumer is, is kind of, you know, taking a little bit longer to make that purchasing decision in the uncertain macro environment that's out there. It's, you know, probably a little ahead of, you know, where, you know, we've been maybe over the last couple of years with them making that quick purchasing decision. Okay. Okay, great. I'll hop back in queue. Thanks for the color, guys. Yep. Our next question comes from Keith Hughes of Truist. Go ahead. Thank you. Kind of a twist in the guidance, do you think your business will flatten out in the Q4 as we hit that easier comp? Is that the trajectory we're on? Hey, good morning, Keith. Nice to speak with you. Thanks for the question. You know, if you look at our updated guidance and just kind of focus on the midpoints for a moment, we are expecting, you know, in that implied second half at the midpoint, we're expecting to still see some top-line softness year-over-year in the second half. Thanks to the cost actions that we put in place, you know, selling through some of the higher cost inventory, right-sizing our inventory levels, deflation, productivity, et cetera, we do believe we can drive higher year-over-year EBITDA and EBITDA margins in the second half of this year versus the second half of last year. Again, looking at the midpoints of our new outlook for the year. Okay. You had mentioned in the prepared script, $18 million of cost saves for 2023 would be a two, two programs. How much of that $18 million have you realized, and how much is left for the second half of the year? Yeah, thanks, Keith. We've, we've realized somewhere in the neighborhood of a third in the first half, which would, you know, then therefore imply two-thirds in the second half and, and, and be another driver behind to support that updated guidance we have and the improved profitability in the second half versus the second half of last year. Okay, great. Thank you. Thanks, Keith. Our next question comes from Shaun Calnan of Bank of America. Go ahead. Hi, guys. Thank you for taking my questions. Just first, in the quarter, you guys were able to outperform some of the overall, new pool construction trends. Can you just walk us through some of the drivers there? Is it that fiberglass is taking share versus concrete, or you guys are taking share within fiberglass, or is it a matter of just different geographical exposure for some of the permit data we've seen? Yeah, good morning, Shaun, and thanks again for the question. You know, as we looked at our Q2 revenue, we were very happy to see the sequential improvement versus Q1. I think our revenue jumped up $40 million versus Q1. You know, look, we, we continue to see the or feel the impact of the, the macroeconomic environment. We feel very confident in our ability to continue to drive fiberglass penetration rates as we did in 2022, when we were able to increase the penetration by 3%. We believe that that's continuing, but we are seeing, you know, the, the demand challenges, you know, on the top line. The sequential improvement, I think, positions us well for the balance of the year. I think as we enter into the second half, we do have some softer comps on the top line year-over-year. That will help us. That's factored into the updated guidance that we released this morning. Yeah, Sean, I'll, I'll add on to that. I think the other part of, let's say, the, the outperform on, on volume, maybe versus the overall market, you know, the recurring revenue piece of our business with that large installed base, you know, we've, we've seen, you know, good performance there with our liners and covers categories, which, you know, again, mitigate some of that decrease in new pool installs across the board. We, we're pretty happy with, with what we saw there and, you know, expect that to continue, you know, in the back half of the year, as well as we enter the, the replacement cover season here, you know, in, in peak. Okay. Thank you. Then just, you mentioned the impact of the higher cost inventory flowing through, being a negative impact to the gross margin. When do you expect that to kind of peak or, basically turn into a tailwind? Can you talk about how input costs are trending today? Yeah, let, let me, just start with input costs. input costs are, are, are definitely moderating. as, as you might imagine, we, we buy many different products and commodities and so forth. it, you know, it's a mixed bag, but in total, we're seeing, you know, input costs flatten with maybe very modest amounts of deflation, looking out into the second half of the year. you know, some up, some down, but in total, modest deflation in the second half of the year. As far as the higher the sell-through, the higher cost of inventory, we would expect that to become a less of a drag in the second half than it was in the first, and another one of the reasons why we feel that our ability to drive higher EBITDA and EBITDA margins in the second half versus the second half of last year is doable. Our next question comes from Matt Bouley, from Barclays. Go ahead. Morning, Scott, Mark. Thanks for taking the question, guys. Hey, Matt. On price, I think you said price was up 3% in the quarter, and I think it was up 2% in the Q1. Are you taking additional price increases or surcharges and, you know, just higher level, what are you kind of seeing on the competitive environment around pricing out there? Thank you. Yeah. Hey, Matt, nice to hear from you, thanks for the question. You know, you're right, we've seen 2% to 3% price increases in the first half of this year, which is more in line with our historical norms of what we've been able to do with the business. We would expect that to continue through the balance of the year. The fiberglass surcharge is still in place. As you recall, we put that in place to give us more flexibility in our ability to move pricing around as need be, that's still there. We're still collecting on that, again, we would expect to see that stay in place as well. As you know, Matt, you know, a number of different product lines here, we, we, you know, move prices around on, on all those, but, we still feel good about that 2% to 3% kind of falling right in that historical norm of what we've been able to do with the business. Got it. Okay, thanks for that, Mark. Second one, the, I think you, you called out on the packaged pool side that there, that there's still some kind of destocking and I guess customer, inventory right-sizing still going on. Any, any sense of kind of where we are in that process of, you know, customer inventories and packaged pools? Thank you. Yeah. Thanks, Matt. Again, I'll, I'll take that one. We are, we are still continuing to see the channel take inventory levels lower. You know, whether you call that destocking or demand, you know, what we're seeing as a result of that is a slower uptake in repeat new orders, which is baked into our updated guidance for the year. You know, we, we think the channel's getting relatively low and tight, but we're gonna see where that goes, you know, the second half of this year. We feel good right now with, with the outlook that we have baked in for packaged pools for the balance of the year. All right. Thanks, Mark. Good luck, guys. Yeah, thanks, Matt. Once again, if you have a question, please press star, then one. Our next question comes from Andrew Carter of Stifel. Please go ahead. Hey, thank you. Good morning. I guess looking at the, the performance within the quarter, the in-ground pools down 19%. Could you give us, could you quantify how much was destock? Then as you think about the two businesses, fiberglass advantage, packaged, packaged pools, probably a disadvantaged category in this environment, how are they kind of correlating around kind of the 9... minus 30% new construction numbers that are out there? Thanks. Hey, Andrew. Morning, thanks for the question. Yeah, you know, we saw our in-ground pool category, I think in the Q2, was down 19%, if I recall right, which is an improvement over what we saw in the Q1. As you know, we don't split out fiberglass and packaged pools. The bulk of that decline is coming from the, you know, the softness that we've seen in the packaged pool space as the channel has continued to take their inventory levels lower. Fiberglass pools are down year-over-year, but not to the degree that we're seeing the softness in the packaged pool space. What I would, what I would add in there, too, Andrew, is, you know, you had, you had a comment on kind of the trade down. I think we, we, we see the benefits of the trade down in, in a couple situations, right? Fiberglass is still 25% to 30% lower cost than concrete, even as both products have risen in price to the consumer. So as, as the homeowner says, "I can no longer afford a concrete pool," we're, we're seeing continued trade down with fiberglass in, in that category. Let's say if a fiberglass pool maybe is a little bit out of reach for a consumer now, right? They, they may now make the decision to trade down and, and buy a vinyl liner pool from us in that packaged pool category. I think, you know, we win on both fronts, and maybe that's why, you know, the, the performance, the, the 19% down that Mark mentioned that was in our, in our, in our comments this morning is, you know, maybe performing a little bit better overall than what the total market is doing out there, or, you know, what, what you guys have seen in, in pool permit activity in, in many regions of the country. All right. Thank you. The second question I wanted to ask about incentive comp. Number one, kind of what is kind of the tailwind for the year, this year for incentive comp, and then therefore, what comes back next year? I guess I wanted to ask, within the guidance, it's actually the midpoint's just modestly down, so is there a big change to incentive comp this year? The only difference to EBITDA is you now have the incremental $6 million in cost savings. Anything you can help us on incentive comps? Thanks. Yeah, it's a pretty small impact, Andrew, at the end of the day. I think what we're doing is, as we mentioned, we've, we've taken these additional cost out actions in the Q2 of this year and just very early into... into Q3, which is gonna give us another $12 million annualized, $6 million this year. $18 million of total cost out for the year, yet, yes, incentive comp is a small part of that. What we're really doing is staying nimble, actively looking at our, our cost structure, looking out at the demand environment, adjusting as necessary, and I think that's something that we're gonna continue to do as, as we go through the balance of the year, which is all baked into the guide, and again, part of the reason we have the confidence in delivering the second half that is implied in our guidance. Thanks. I'll pass it on. All right. Thanks, Andrew. Our next question comes from Josh Pokrzywinski of Morgan Stanley. Please go ahead. Oh, hold on one moment. If you were in the queue before, we ask again, please press star, then one. For now, we will take Susan Maklari from Goldman Sachs. Please go ahead. Thank you. Good morning, everyone, and thanks for taking the questions. Susan, morning, Susan. Good morning. You know, you talked about the ramp of the new facilities in Kingston and in Oklahoma. Can you talk a bit about how you're balancing capacity against the weaker volume? Any thoughts on how those facilities will ramp over the next couple of quarters? Yeah, Susan. You know, in regards to, let's say, both Kingston and Oklahoma, one of the things for everyone to remember here is it's really replacing 2 other facilities we had that, you know, were, were in those territories, right? Specifically with Oklahoma, right, this is replacing the lost manufacturing capacity we had in Odessa. Right, we had been manufacturing pools in other areas, transporting them in. You know, what we're doing now is ramping Oklahoma up to match that local regional demand we see, in that area, coming with a cost savings for us from no longer having to, to freight in. Really, you know, bringing that facility up, you know, kind of as planned to, to see the demand signals. Kingston, you know, similar situation. We did have the smaller facility up there, you know, supporting the, the, the greater Montreal, greater Toronto area. You know, again, with the, with the new facility, you know, fully operational, you know, again, just gaining the ramping of that, that facility, bringing it up to match the regional local demand. You know, offloading what had been being shipped up, in many cases from, you know, all over the East Coast, out of, you know, the facilities we had there. Again, you know, good, good cost savings, good benefit, you know, ability to kind of, you know, variabilize the nature of all of our businesses, businesses in terms of how we operate these facilities. You know, we can quickly turn, turn that capacity up, you know, as we see the demand signals change, but just trying to be very cautious about how we balance total production in every plant, in every region to maximize the efficiency of, of this whole operation. Okay. That, that's helpful. You made really nice progress again this quarter on taking the inventories down. As you look to the back half, any thoughts on any further progress in there in, in terms of working capital and, you know, how you're thinking about cash generation as we go through the next couple of quarters? Yeah. Hey, hey, Susan Maklari, good morning. Yeah, we're very pleased with, with the progress that we've made in, in reducing the inventory level since the end of the year. I think, as we all know, that that does come with a, with an impact, a negative impact to the P&L, but the right thing to do. We're still able to maintain our very strong lead times with this lower inventory levels. We're getting to the point now where we're probably thinking about stabilizing those levels where we're at, maybe some modest further reductions. We'll see what happens in the balance of the year. Again, not having that negative P&L impact in the first half from the pretty significant reduction in inventories is another uplift, you know, Q2 or second half versus first half. Feel really good about where our liquidity is with the way the balance sheet looks. $118 million of liquidity, which is cash on hand plus revolver availability. We did see a very modest tick up in our net debt leverage ratio to 3.0 x. We would expect, Susan, that that would drop modestly, go lower, modestly, by the end of the year. Okay. Thanks for the call, and good luck with everything. Sure. Thanks, Susan. This concludes our question and answer session. I would like to turn the conference back over to Scott Rajeski for any closing remarks. Yeah, thank you. You know, I'd like to take a moment to thank all of our employees, dealers, you know, wholesale distribution partners and, and suppliers. You know, all of your hard work and, and partnership with us, you know, is really critical to our long-term success. You know, also, I wanna thank everyone who joined, joined us for today's call. You know, really appreciate your time and continued interest and support of Latham. You know, hopefully everyone has, you know, a great rest of the summer. Be safe out there, and looking forward to catching up with everyone the next time. Take care. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.