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Viking Pools (Latham International) Files for Chapter 11 Bankruptcy

  
  
  

In a stunning turn of events, Latham Manufacturing Corp, who is the largest manufacturer of inground pools in North America, as well Viking Poolsas the parent company of Viking Fiberglass Pools (Viking Pools) and Composite Pool Corporation (CPC), has filed for Chapter 11 Bankruptcy protection. Such is major news in the fiberglass pool industry, considering Viking Pools is one of the most well known fiberglass pool manufacturers in the country.  

As all my readers know, I literally just wrote a blog discussing the future of fiberglass pool manufacturers and alluded to the fact that the business models of these manufacturers are quite flawed, with too many plants to support and not enough pools to build because of a lower demand. A look at the rise and fall of Latham, including their relationship with Viking, is a perfect example of how such a model can cost a company their financial well-being.

Back in 2005, right when the swimming pool market was at its peak due to the housing boom/easy credit-for-everyone phase, Latham International purchased Viking Pools. In fact, in October of that year, Bob Dumas of Pool and Spa News reported:

"In yet another major industry acquisition, Latham International, the nation's leading manufacturer of packaged inground swimming pools, has purchased Viking Pools, one of the largest makers of fiberglass shells.

It is the fourth high-profile acquisition for Latham since 2002. Terms of the agreement were not disclosed.

"Fiberglass is a growing segment of the market," said Mark Laven, president/CEO of Latham, which up until now had only purchased companies related to the vinyl-liner pool segment. "It's appealing to builders because it's labor-saving, and it's appealing to consumers as well."......... Todd Stahl called Viking and Latham's pairing a "compelling combination" and said that his company is "very excited about our partnership."

"Teaming with Latham was an opportunity we couldn't pass up," he said. He added that he believes the acquisition will elevate Viking's professional profile. "We were a family operation--they're all mom-and-pop operations in the fiberglass industry. But we wanted to be recognized as a leader in the industry, and it's hard to do that when you're a small morn-and-pop business. Now we are at a level that no fiberglass pool company has ever been at before."

Latham, N.Y.-based Latham International also owns Pacific Pools, a leading package-pool maker. The firm has averaged one major acquisition per year since 2002, including:

* Triac, November 2002

* Kafko, November 2003

* Fort Wayne Pools, December 2004

                                                        

Each of Latham's acquisitions has been designed to expand the company's geographical reach and broaden its product offerings, according to Laven. The firm currently employs approximately 1,200 people at 15 locations throughout the United States and Canada." (end quote)

So those were the thoughts 4 years ago of Todd Stahl and Mark Laven. Essentially, Latham tried to buy up a major company in just about every market of the swimming pool industry. The problem, as we all can now clearly see, is that they did not anticipate a fall in the market. In fact, Latham's bankruptcy papers state:

"As of November 30,2009, on an unaudited consolidated basis, the Debtors reported total assets of approximately $66,994,161, including approximately $5,783,601 in accounts receivable and $16,838,340 in inventory, and $239,438,055 in liabilities, which included $2,261,529 in accounts payable and $197,529,346 of long term debt, as discussed more fully below. For the 2009 fiscal year through November, the Company, on an unaudited consolidated basis, reported net sales and losses of$90,190,350 and ($181,414,993) respectively.

C. Circumstances Leading to the Commencement of the Chapter 11 Cases

Significant declines in market demand for the industry's products over the past three years have resulted in lower sales and significant unused manufacturing capacity in the Debtors' product lines. The downturn in the economy has negatively impacted sales industry-wide. The Debtors estimate that industry sales for 2009 will be down approximately 45% from 2008 and 70 to 75% from 2005. As a result of declining sales, there is significant excess industry capacity in the market. Historical sales have been best correlated with consumer sentiment and the availability of credit for customers to purchase the Debtors' products. The housing boom earlier in the decade, and corresponding home equity cash outs and rising prices for the Debtors' products, provided robust sales for the Debtors' products and the market in general. However, commencing in 2007 and continuing today, the housing bust and deteriorating economic climate resulted in declining industry sales. The continued downward spiral of consumer sentiment due to the state of the economy has contributed to the declining sales experienced industry-wide. In addition, traditional lenders who provide financing to consumers, such as GE and KeyBank, have ceased lending for pool purchases...... In response to these economic challenges, the Company aggressively worked to mitigate the economic impact caused by the above circumstances. During the period from 2007 to 2009, the Company made significant headcount reductions over each of the Company's divisions. Along with reducing headcount, management has actively worked to decrease the Company's legacy manufacturing footprint, reducing manufacturing facilities from 32 to 15. Additionally, a significant SKU reduction initiative was implemented in order to simplify manufacturing operations and reduce inventory, and the Company is taking advantage of these changes in 2009. This program has been a key component of managements ability to successfully reduce inventory levels and subsequently drive profitability and cash flow.....While these efforts have, in part, helped the Company weather the current economic decline, the Company still requires additional cash to purchase inventory in the near-term in order to operate their business. Because of the seasonal nature of the industry, the Company must spend approximately $25,000,000 during the first half of 2010 to satisfy the Company's peak seasonal working capital needs, as well as to reduce their existing debt load, in order to continue their operations." (end quote)

 

 Although they could have prognosticated a heck of a lot better in my opinion, I won't make that the focus of my article here. As I stated in my last blog, I've been asked by readers all over the country lately the current state of many swimming pool companies and manufacturers.  Latham's filing for Chapter 11 speaks volumes regarding the stability of some of the industry's most well known brands. 

So What's This All Mean?

Essentially, this all means that the swimming pool industry is similar to just about every other industry out there right now. With the economy struggling, it has created a refiner's fire for the biggest and smallest of companies. As I've stated before, I call it the ‘Bubba Gump' principle. Yes, there is quite a storm out there right now, but just as Forrest's boat survived the storm due to their strong foundation and went on to be extremely successful, so will many small and large swimming pool companies get through these difficult times even stronger. Latham and Viking Pools are not the last pool companies we'll see suffer major financial problems in the coming months. In fact, if I wasn't worried about frivolous lawsuits I'd throw out some predictions. But in an effort to keep things simple, I'll just report events as they happen.

Also, I'd like to state for the record that I strongly hope Viking, Composite Pool Corporation, and some of these other struggling manufacturers are able to weather this difficult storm. When I see a company like Latham, with its 1200+ employees on the brink of failure, it saddens me to know that these companies and their employees, as well as the families of their employees, are passing through a very difficult time.

Marcus Sheridan

http://www.riverpoolsandspas.com/ / http://www.poolschool.us/

**To receive further updates regarding the state of the swimming pool industry as well as other news and information,  be sure to subscribe by email to our blog in the upper right hand portion of this page.**

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Comments

A very well written article Marc, keep up the good work.
Posted @ Wednesday, December 23, 2009 10:36 AM by Jim
Marcus, 
 
Viking Pools is NOT going out of business. This is simply a debt restructuring under Chapter 11. Latham took this action voluntarily because we believe it will make us more financially stable and will help ensure a long and successful future. We intend to continue to operate normally by serving our customers and continuing to purchase goods and services to meet the requirements of our business.  
 
 
 
We have taken steps to ensure that our customers are unaffected by the Chapter 11 process. We remain committed to providing all of our customers with the same high quality products and services that they expect from us, and we will honor all warranties, rebate programs and customer commitments. 
 
 
 
We expect the Plan to be approved by the Court and to emerge from Chapter 11 within 30 to 60 days.  
 
 
 
If anyone has any questions they are encouraged to contact their local sales representative, Viking Pools corporate (304) 884-6954 (Tom Straub, National Sales Manager or Todd Stahl, President), or Latham International (800) 833-3800 (Amy Mengel, Corporate Communications Manager or Mark Laven, CEO).  
 
 
 
Sincerely, 
 
Todd Stahl 
 
President 
 
Viking Pools LLC 
 
Posted @ Wednesday, December 23, 2009 1:55 PM by Todd Stahl
Hi Todd, and thanks for commenting. I'm glad to hear that things are moving in a positive direction. As mentioned, I do hope Latham, and Viking, make a complete recovery.
Posted @ Wednesday, December 23, 2009 6:20 PM by Marcus Sheridan
It was nice to see that Todd can write something to you without an undertone of condescension. 
 
 
 
Good luck to them and all of their employees, I do hope thay manage to pull out of this.
Posted @ Wednesday, December 23, 2009 10:08 PM by Jim Assurian
I have been installing fiberglass pools since 1988 and have worked with most of the manufactures building fiberglass pools. Out of all the companies Viking has been an excellent company to work with. I know the Stahl family will make the company better than ever. Also Vikings managers and emloyees are great to work with! I am sure Viking pools will do everything possible to make sure their warranty is honored just as they have since we started with them over 12 years ago. Happy Swimming!
Posted @ Tuesday, January 05, 2010 9:34 PM by Scott Hoover
Has anyone used Tallman Fiberglass Pools Company from Jonesboro, GA? What is your opinion of their service and product?  
 
Thanks, Bob
Posted @ Friday, March 12, 2010 7:45 PM by Curious
Thanks for your great site and info. Trilogy F G P is a great company.
Posted @ Thursday, December 16, 2010 9:55 AM by Danny Matthews
has anyone had any problems with southeasternpools from n.c.
Posted @ Friday, August 17, 2012 3:11 PM by Bill
need contact from rep. to verify inspection of Viking product used at 78325 Desert Mountain Circle in Berumuda Dunes CA 92211 by FPD services(Stoker Pools) to close claim against contractor customer claims product defect need record of the inspection that your rep. allegedly completed, for the contractor, Thank you my phone is 626-422-9721
Posted @ Thursday, October 24, 2013 2:24 PM by Paul Eaton/consultant
I would like to talk to Mr.Stahl regarding a problem we purchased from Tim Shirley pools in Winchester, VA . We signed a contract to have a the laguna installed . The construction was suppose to complete by the 2n week of August and construction did not even get started until the first week of September . We stressed we wanted a pool the was 14 feet in width on the inside and MR. Shirley assured us the Laguna was the perfect pool for that . Upon the pool being set in the ground we quickly realized this was not the size we said we wanted. We tried to make arrangements with Mr. Shirley to correct the situation he was not accommodating .We feel we have been lied to and suffered unnecessary cost . We love the Viking pool but feel that Tim Shirley pools of Winchester VA has left a very sour feeling towards this company . We are now in legal proceedings to try and straighten this situation out . After all of this came about we have talked to other Viking dealers about the same pool and found we were grossly over charged anywhere from $15,000.00-$20,000.00.
Posted @ Tuesday, January 28, 2014 10:00 AM by Robert Luttrell
I like to read about these products. The information is amazing.
Posted @ Saturday, March 22, 2014 6:25 AM by Bankruptcy Attorney Glendale
I was searching for this information for a long time. I was interested to know many thing about it. Finally I got it on your blog. 
Posted @ Saturday, March 22, 2014 9:45 AM by Personal Injury Attorneys Phoenix
Earls Pool installed our fiberglass (Viking) pool in 2004. In about 2011, we noticed a hump and crack in the deep end. We contacted Lynn Bush with Earls Pool and he came out t see it. He told us that when it started losing water, to call him and he would contact Viking. This year, we started losing water...fast. We contacted Lynn and he contacted Viking. Rick Black of Viking came out and told us they would be out here the week of May 19 to fix it. 2 days ago, we got an email and phone call from Rick Black telling us we would be paying all of the repair fees. He said it was due to water movement in the ground, and the warranty won't cover it. There is NO documentation that backs up their claim as to the reason for the crack. What good is a lifetime warranty if Viking is going to make up a reason not to stand behind it?? We're about to lawyer up!!
Posted @ Friday, May 16, 2014 4:54 PM by Rhonda Helbing
Concerning the above post about Viking and Earls Pools, Rick Black seems to be trying to negotiate a deal with my husband that I was not aware of at the time of the post. I hope they do the right thing, and I will be back in a few days to make everyone aware if it turns out well...or not! I tried to delete the post until I know more, but I don't see any way to do that. I will def give kudos to Viking if they are fair!!
Posted @ Monday, May 19, 2014 8:58 PM by Rhonda Helbing
That was a great and enlightening article by Marcus WRT Latham Chapter 11 filings. 
As a Viking Pool owner since May 2008, I have had my share of issues with Viking and their so-called authorized dealers 
Presently, I had to replace both lights that broke away from the shell. More troubling was that the gel coat had disintegrated  
from the shell, where hundreds (if not thousands) of osmotic blisters have formed. 
A Viking technician finally came to my house to assess the claims. He was shocked at what he saw; the color was nearly white from  
the original light brown, there were hairline cracks throughout the shell, and the blisters were quite visible to the eye and touch. 
He said it was the worse he has seen and that it should have never happened. 
 
Unfortunately, once the report made its way up the Latham ladder, we were told that they didn't think it was pool built under the NEW 
ownership. When I asked why that mattered, I was told that the NEW Viking will not honor OLD Viking warranties. After much back and forth 
I was told that they (Viking) would cover 20% of the repair and I would cover the remainder (nearly $10,000). As a disabled veteran with limited funds,  
I pushed back. I was never given a warranty from the dealer that installed my pool, but what I did know was that the Viking website (at the time) 
was plastering something much different that what is being conveyed to me presently. 
 
Mr. Black, who's name appears in a few of the blogs on this site contacted me today to clarify the situation, which I found out to mean "make me see things his way". 
He mentioned that warranties are not always what they appear, and other banter which ended in a hang-up. 
 
I am appalled that a company such as Latham can file bankruptcy and wipe off all warranty burdens from that point, leaving 1,000's of consumers without a security net.  
I kept being told that the new owner did not assume warranty from old owner, but from the sound of things - the owner has always been Latham. 
 
Since my warranty claim was submitted, the Viking Pools website has made changes to include: a Viking Dealer Disclaimer, and a few warranty related additions etc.. 
 
As a consumer that feels as if I was misled and ultimately ripped off, I feel it is important to let others who either have a Viking Pool or are thinking about getting 
a Viking pool that what they see is not what they get. 
 
Thanks!
Posted @ Saturday, May 31, 2014 3:04 PM by Craig Marsh
Comments have been closed for this article.