Core Viewpoint - Hayward Holdings, Inc. (HAYW) has experienced significant selling pressure, resulting in a 15% decline in stock price over the past four weeks, but analysts anticipate improved earnings in the near future [1] Group 1: Technical Analysis - The Relative Strength Index (RSI) is utilized to determine if HAYW is oversold, with a current reading of 28.2 indicating potential for a price reversal [2][5] - RSI serves as a momentum oscillator that measures price movement speed and change, oscillating between zero and 100, with values below 30 typically indicating an oversold condition [2][3] Group 2: Fundamental Analysis - Analysts have raised earnings estimates for HAYW by 5.2% over the last 30 days, suggesting a positive trend that could lead to price appreciation [7] - HAYW holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating strong potential for a turnaround [8]

Core Viewpoint - Hayward Holdings, Inc. (HAYW) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, suggesting that institutional investors react to these changes, leading to buying or selling pressure [4][6]. - Rising earnings estimates for Hayward Holdings imply an improvement in the company's underlying business, which could lead to an increase in stock price as investors respond positively [5][10]. Zacks Rating System - The Zacks Rank stock-rating system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The system maintains a balanced distribution of ratings, ensuring that only the top 5% of stocks receive a "Strong Buy" rating, indicating superior earnings estimate revisions [9][10]. Earnings Estimate Revisions for Hayward Holdings - Hayward Holdings is projected to earn $0.85 per share for the fiscal year ending December 2026, with no year-over-year change, but the Zacks Consensus Estimate has increased by 5.2% over the past three months [8].

Core Insights - Hayward reported strong financial results for fiscal 2025, with net sales of $1.12 billion, up 7%, and Adjusted EBITDA of $299 million, up 8%, exceeding management's guidance [1][4][7] - The company emphasized its aftermarket-focused strategy and product innovation, particularly the rollout of OmniX, which contributed to sales growth and margin expansion [4][5][20] Financial Performance - For the fourth quarter, net sales reached $349 million, a 7% increase year over year, with gross profit rising 10% to $169 million and a record gross margin of 48.5% [3][7] - Adjusted diluted EPS increased 15% to $0.77 for the full year, with an effective tax rate of 18% [8][7] - Free cash flow rose approximately 20% in 2025, reducing net leverage to 1.9x and adding $164 million in liquidity [6][15] Segment Performance - North America sales increased 8% to $309 million in Q4, driven by price gains, while Europe and the rest of the world sales were roughly flat at $41 million [11][12] - For the full year, North America sales rose 7% to $959 million, with Europe and the rest of the world sales increasing 4% to $163 million [13] Strategic Initiatives - The company reduced its U.S. sourcing exposure to China from approximately 10% to 3%, incurring an incremental cost of $5 million to $6 million [5][19] - Hayward plans to increase capital expenditures to about $40 million in 2026 to modernize its manufacturing and support supply chain changes [17] Product Development - Management is focusing on expanding OmniX-enabled offerings and introducing new products aimed at aftermarket opportunities [20] - The industrial flow control business, characterized as highly profitable, is being evaluated for potential growth [21]

Hayward (NYSE:HAYW) Q4 2025 Earnings call February 25, 2026 09:00 AM ET Company ParticipantsAndrew Carter - Associate VPEwan Jones - SVP and CFOJeffrey Hammond - Managing DirectorKevin Holleran - President and CEOKevin Maczka - VP of Investor Relations and FP&ANigel Coe - Managing DirectorTyler Bissette - Equity Research AssociateConference Call ParticipantsRob Wertheimer - Founding Partner and Machinery AnalystRyan Merkel - Specialty Distribution and Building Products and Technologies Research AnalystNone ...

Financial Data and Key Metrics Changes - Net sales increased by 7% in Q4 2025 to $349 million, with a prior year comparison of 17% growth [4][6] - Gross margin expanded to a record 48%, with adjusted EBITDA increasing by 4% to $103 million [4][18] - For the full year 2025, net sales rose 7% to $1.122 billion, and adjusted EBITDA increased 8% to $299 million, exceeding guidance [7][19] - Adjusted diluted EPS grew 15% to $0.77 for the full year [7][20] Business Line Data and Key Metrics Changes - North America sales were up 8% to $309 million, driven mainly by price gains, with gross margin increasing to 50.1% [20][21] - Europe and rest of world sales remained steady at $41 million, with a gross margin increase of 590 basis points to 35.8% [21] - The aftermarket model, which constitutes approximately 85% of total sales, demonstrated resilience despite challenges in new pool construction [8][9] Market Data and Key Metrics Changes - U.S. sales increased by 8%, while Canada saw a 10% rise, indicating strong performance in key markets [20][21] - Europe sales grew by 7%, while the rest of the world experienced a 9% decline, reflecting varied market conditions [21] Company Strategy and Development Direction - The company is focused on innovation, operational excellence, and enhancing customer experience, which are seen as key to long-term value creation [5][10] - Hayward aims to leverage its aftermarket-driven model and expand its product offerings, including the OmniX automation ecosystem [10][12] - The company plans to maintain a balanced approach to capital allocation, prioritizing organic growth investments while pursuing strategic acquisitions [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the business and the ability to execute strategic growth initiatives, expecting net sales to increase approximately 4% in 2026 [6][24] - The company anticipates continued strong performance in the aftermarket, despite challenges in new pool construction [36][37] - Management highlighted the importance of disciplined execution and a cycle-tested business model in navigating the current macroeconomic environment [25][26] Other Important Information - The company achieved a significant reduction in net leverage to 1.9 times by year-end, enhancing its financial flexibility [5][22] - Increased investments in research, development, and engineering were noted, with a focus on product innovation and customer support [10][50] Q&A Session Summary Question: What was the source of the upside surprise in Q4? - Management noted that early buy orders and strong in-quarter demand contributed to the positive results, despite a challenging prior year comparison [28][30] Question: Can you discuss the assumptions for aftermarket and new pool demand? - Management indicated that they expect normal demand levels for 2026, with continued strength in the aftermarket, while new construction remains uncertain [35][36] Question: Any updates on the tariff situation and supply chain realignment? - Management reported a successful reduction in dependency on China and expressed confidence in managing tariff impacts through price increases and operational improvements [46][47] Question: Can you elaborate on the increased CapEx investments? - Management explained that the increased CapEx is aimed at upgrading U.S. manufacturing capabilities and enhancing operational efficiency [51][52] Question: What is the outlook for the 4-horsepower pump and pressure cleaner markets? - Management highlighted the significant market opportunity for these products, estimating that a quarter of all pumps are 3.5 horsepower or larger, which they previously could not serve [94]

Hayward (NYSE:HAYW) Q4 2025 Earnings call February 25, 2026 09:00 AM ET Speaker5Welcome to Hayward Holdings' fourth quarter 2025 earnings call. My name is Carrie, I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. During the question-and-answer session, if you have a question, please press Star, then one on your touchtone phone. Please note that this conference is being recorded. I will now turn the call o ...

FOURTH QUARTER AND FULL YEAR 2025 EARNINGS February 25, 2026 © 2026 Hayward Holdings, Inc. 1 FOURTH QUARTER AND FULL YEAR 2025 EARNINGS CALL KEVIN HOLLERAN President and Chief Executive Officer EIFION JONES Senior Vice President and Chief Financial Officer KEVIN MACZKA Vice President of Investor Relations and FP&A NYSE: HAYW 2 © 2026 Hayward Holdings, Inc. 2 Forward-Looking Statements and Non-GAAP Financial Measures Forward-Looking Statements This presentation includes certain statements that are "forward-l ...

Sales and Market Segments - North America and Europe & Rest of World segments accounted for approximately 85% and 15% of total net sales, respectively, for Fiscal Year 2025 and Fiscal Year 2024 [20]. - Approximately 51% of net sales are derived from non-discretionary products essential for pool operation [27]. - In Fiscal Year 2025, two largest customers represented approximately 33% and 12% of net sales [29]. - Approximately 80% of residential pool equipment in the U.S. was sold through distributors, with 15% sold directly to retailers and 5% to builders [36]. - The business is seasonal, with higher sales typically in the second and fourth quarters due to the summer pool season [39]. Employee and Supplier Relations - The company has approximately 1,980 total full-time equivalent employees, with about 24% located internationally [48]. - The company has maintained an average relationship of over 19 years with its top 30 suppliers, ensuring stable supply chains [31]. Product Development and Innovation - The company holds approximately 221 issued U.S. patents and 242 issued foreign patents as of December 31, 2025 [44]. - Recent product development focuses on energy efficiency, advanced sanitization, reduced chemical usage, and enhanced IoT-driven experiences [28]. Financial Risks and Market Conditions - The company has experienced material cost increases due to inflation, particularly in raw materials and manufacturing inputs, which may adversely affect financial results [112]. - Disruptions in financial markets could increase funding costs or reduce credit availability, adversely affecting the company's operations and financial condition [115]. - The company anticipates an increase in sales denominated in non-U.S. dollar currencies, which may expose it to currency exchange rate volatility [110]. - Increased costs and delays in obtaining raw materials and components have been attributed to geopolitical conflicts and adverse weather, impacting profitability [130]. - The cost of raw materials, including metals and resins, is subject to price volatility, which could adversely affect the company's cost of goods sold and financial condition [135]. Compliance and Regulatory Challenges - The company is subject to various environmental, health, and safety regulations, which may incur future compliance costs that could affect business operations [58]. - The company is subject to various regulatory requirements, including those related to product labeling and safety, which may incur compliance costs [61]. - Compliance with evolving governmental regulations related to environmental and data privacy laws has resulted in increased operating costs and potential liabilities [136][140]. - The company faces uncertainties regarding tariffs and trade restrictions, particularly on goods sourced from China, which have increased costs and could affect demand [132]. - The evolving nature of data privacy laws, such as GDPR and CCPA, may impose additional compliance burdens and costs, affecting operational practices [141][143]. Operational Risks - The company relies on attracting and retaining qualified personnel, and any inability to do so could adversely impact operations and strategic initiatives [113]. - The company is implementing a new ERP system and human resources information system, which may face challenges and could disrupt operations if not executed effectively [120][121]. - The company has identified material weaknesses in internal controls over financial reporting in previous fiscal years, which could affect the reliability of financial statements [123]. - The company faces cybersecurity risks that could compromise its information technology systems and lead to data loss or reputational harm [118]. - Manufacturing disruptions from catastrophic events or supply chain issues could prevent the company from meeting customer demand and increase operational costs [129][131]. Intellectual Property and Legal Matters - The company relies on third-party intellectual property licenses, which may limit its ability to commercialize certain products effectively [161]. - The company may face challenges in enforcing its intellectual property rights in foreign jurisdictions, potentially increasing competition [163]. - The company could incur significant costs defending against intellectual property infringement claims, which may adversely affect its financial condition [158]. - The company faces potential costs from investigations related to violations of anti-corruption laws, which could disrupt business operations [147]. Financial Position and Capital Management - As of December 31, 2025, the company's total indebtedness was approximately $963.5 million, including $955.0 million under the first lien term loan facility [165]. - The company has an asset-based lending facility (ABL Facility) allowing borrowing of up to $425.0 million, with $124.9 million available as of December 31, 2025 [172]. - A 1% increase in the effective interest rate would result in an increase in annual interest rate expense of approximately $3.6 million [167]. - The company may incur additional debt in the future, which could increase debt service obligations and exposure to risks associated with higher leverage [172]. - The company's ability to fund operations and expenses depends on distributions from subsidiaries, which are subject to earnings and statutory restrictions [171]. - Provisions in the company's certificate of incorporation may deter takeover efforts that stockholders may believe to be beneficial [176]. - The company does not currently expect to declare or pay dividends on common stock for the foreseeable future [171]. - Capital allocation decisions, including share repurchases, may not enhance stockholder value and could adversely affect liquidity and financial flexibility [182].

Financial Performance - Net sales increased by 7% year-over-year to $349.4 million for Q4 FY 2025, driven by positive net pricing and foreign currency translation[5]. - Net income for Q4 FY 2025 rose by 25% to $68.4 million, with a net income margin expanding by 290 basis points to 19.6%[11]. - Adjusted EBITDA for Q4 FY 2025 increased by 4% to $102.9 million, with an adjusted EBITDA margin of 29.4%[11]. - Gross profit for Q4 FY 2025 increased by 10% to $169.3 million, with a gross profit margin of 48.5%, up 160 basis points[7]. - For FY 2025, net sales increased by 7% to $1,122.2 million, primarily driven by positive net pricing and acquisitions[15]. - Net income for FY 2025 increased by 28% to $151.6 million, with a net income margin of 13.5%[19]. - Net income for the year ended December 31, 2025, reached $151,570,000, a rise from $118,655,000 in 2024, indicating a growth of approximately 27.8%[35]. - Adjusted EBITDA for the year ended December 31, 2025, was $299,279,000, up from $277,447,000 in 2024, reflecting a growth of 7.8%[43]. - Adjusted EBITDA margin for the year ended December 31, 2025, was 29.4%, compared to 26.7% in 2024, indicating an improvement of 10.1%[43]. - Adjusted net income for the year ended December 31, 2025, was $170,507,000, an increase from $147,934,000 in 2024, marking a growth of 15.2%[48]. - Basic EPS for the year ended December 31, 2025, was $0.70, compared to $0.55 in 2024, reflecting a 27.3% increase[48]. Cash Flow and Assets - Cash provided by operating activities for FY 2025 was $256.0 million, an increase of $44.0 million from FY 2024[21]. - Total cash and cash equivalents at the end of the period reached $329,648,000, up from $196,589,000 in the previous year, marking a significant increase of 67.6%[36]. - Net cash provided by operating activities rose to $256,034,000 in 2025, compared to $212,068,000 in 2024, reflecting an increase of 20.8%[36]. - Total assets as of December 31, 2025, amounted to $3,150,984,000, an increase from $2,990,624,000 in 2024, marking a growth of about 5.4%[34]. - Current liabilities as of December 31, 2025, were $323,244,000, compared to $312,982,000 in 2024, showing a slight increase of approximately 3.9%[34]. - Total liabilities as of December 31, 2025, were $1,557,976,000, a slight decrease from $1,566,977,000 in 2024, reflecting a decline of approximately 0.5%[34]. Expenses and Investments - Research, development, and engineering expenses were $8.0 million for Q4 FY 2025, representing 2.3% of net sales, reflecting investments in product innovation[9]. - Research, development, and engineering expenses for the year ended December 31, 2025, totaled $27,201,000, up from $25,778,000 in 2024, reflecting an increase of about 5.5%[35]. - Selling, general, and administrative expenses for the year ended December 31, 2025, were $246,892,000, compared to $217,147,000 in 2024, indicating a rise of approximately 13.7%[35]. - The company utilized $103,777,000 in investing activities in 2025, compared to $54,131,000 in 2024, representing an increase of 91.8%[36]. - The company reported a net cash used in financing activities of $20,846,000 in 2025, a significant decrease from $136,790,000 in 2024, reflecting a reduction of 84.7%[36]. Segment Performance - North America (NAM) segment income for Q4 2025 was $102,543,000, an increase from $95,089,000 in Q4 2024, while Europe & Rest of World (E&RW) segment income was $6,166,000, up from $4,832,000[53]. - Adjusted segment income for NAM in 2025 was $109,235,000 with a margin of 35.4%, compared to $104,926,000 and a margin of 36.7% in 2024; E&RW adjusted segment income was $6,633,000 with a margin of 16.3%[53]. - For the year ended December 31, 2025, NAM segment income was $284,758,000, up from $261,735,000 in 2024, while E&RW segment income increased to $26,540,000 from $21,632,000[55]. - Adjusted segment income for NAM for the year 2025 was $310,683,000 with a margin of 32.4%, compared to $290,964,000 and a margin of 32.5% in 2024; E&RW adjusted segment income was $28,301,000 with a margin of 17.4%[55]. Strategic Initiatives - The company continues to leverage its competitive advantages in the pool industry, focusing on technology adoption and operational excellence[23]. - The company plans to continue focusing on operational consolidation and integration costs as part of its strategic initiatives moving forward[46]. - The company continues to focus on strategic acquisitions and operational improvements to enhance segment performance and profitability[56].

Company Overview - Hayward Holdings, Inc. (NYSE:HAYW) is a leading global pool equipment manufacturer, primarily serving the residential pool market, with North America accounting for 85% of sales and over 90% of profits [3] - The company offers a range of products including Pumps, Automation and Sanitization, Heaters, Filters, Lighting and Water Features, and Cleaners [3] - Approximately 80% of total sales come from the existing installed base of pools, with 50% attributed to repair and replacement, making the business relatively resilient to economic cycles [3] Financial Performance - Hayward Holdings, Inc. has demonstrated strong margins and cash-generation potential, leading the fund to view the stock as undervalued relative to mid-cycle earnings [2] - The stock's one-month return was approximately 5.51%, and it gained about 11.59% over the last 12 months, closing at approximately $16.85 per share on January 16, 2026, with a market capitalization of about $3.65 billion [2] Market Dynamics - The pool industry experienced supercharged growth during the early stages of COVID-19, followed by a period of weak end-market demand exacerbated by destocking in the distribution channel [3] - Although the industry has stabilized, there is still lackluster demand for newly built and remodeled pools, but it is expected that the discretionary sides of the business will recover over time [3] - Hayward is positioned to continue raising prices and growing volumes within the installed base of pools due to strong pricing power, as purchase decisions are typically made by pool service professionals who are less sensitive to price [3]