分组1 - Hayward Holdings, Inc. reported quarterly earnings of $0.27 per share, exceeding the Zacks Consensus Estimate of $0.24 per share, and up from $0.20 per share a year ago, representing an earnings surprise of 12.50% [1] - The company posted revenues of $327.08 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 8.38%, compared to year-ago revenues of $278.47 million [2] - Over the last four quarters, Hayward Holdings has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] 分组2 - The stock has underperformed the market, losing about 6% since the beginning of the year, while the S&P 500 gained 1.3% [3] - The current consensus EPS estimate for the coming quarter is $0.10 on revenues of $222.67 million, and for the current fiscal year, it is $0.71 on revenues of $1.07 billion [7] - The Zacks Industry Rank for Electronics - Miscellaneous Products is currently in the bottom 33% of over 250 Zacks industries, indicating potential challenges for the sector [8]

Sales and Market Segments - North America and Europe & Rest of World segments accounted for approximately 85% and 15% of total net sales for Fiscal Year 2024, respectively[25]. - The company’s two largest customers represented approximately 36% and 11% of net sales in Fiscal Year 2024[34]. - Approximately 50% of net sales are derived from non-discretionary products essential for pool operation[32]. - In Fiscal Year 2024, approximately 77% of residential pool equipment in the U.S. was sold through specialty distributors, with 18% sold directly to retailers[41]. Supplier and Patent Information - The company maintains relationships with approximately 640 suppliers, with an average relationship of over 15 years across the top 30 suppliers[35][36]. - The company holds approximately 220 issued U.S. patents and 247 issued foreign patents as of December 31, 2024[51]. - The company has approximately 39 pending U.S. patent applications and 53 pending foreign patent applications as of December 31, 2024[150]. Product Development and Sustainability - Recent product development focuses on energy efficiency, advanced sanitization, reduced chemical usage, and enhanced IoT-driven experiences[33]. - The company’s environmentally sustainable products can conserve up to 92% more water compared to standard sand filters[31]. - The company is committed to sustainability through responsible manufacturing practices and innovative environmentally sustainable products[62]. - The company published its first sustainability data sheet in 2022, with updates in 2023 and 2024, indicating a commitment to transparency in sustainability reporting[64]. Operational Efficiency and Employee Engagement - The company implemented over 688 employee suggestions for improvements during the year ended December 31, 2024[69]. - The company is in the process of implementing a new ERP system and a new human resources information system to improve operational efficiency[117]. Financial Risks and Cost Management - The company has experienced material cost inflation, particularly in raw materials, and is striving for productivity improvements to mitigate these costs[107]. - The company expects an increase in sales denominated in non-dollar currencies, which may expose it to currency transaction risks[105]. - Fluctuations in the prices of raw materials, such as metals and resins, could increase the cost of goods sold and negatively affect financial results[131]. - Compliance with evolving environmental and safety regulations may result in higher operational costs and potential liabilities[135]. - The company faces potential increases in costs due to tariffs on imports, particularly from China, which could impact profit margins[130]. Regulatory and Compliance Issues - The company is subject to various federal and state regulations that could impact operations and compliance costs[72]. - The company is subject to stringent data privacy regulations, such as GDPR and CCPA, which could lead to significant compliance costs and liabilities[136]. - Misconduct by employees or third-party vendors could expose the company to regulatory investigations and substantial costs[142]. - Violations of anti-corruption laws, such as the FCPA, could result in costly investigations and sanctions, adversely affecting the company's reputation and financial condition[143]. - Changes in international trade compliance regulations and U.S. government sanctions could have a material adverse effect on the company's operations[144]. Debt and Financial Position - As of December 31, 2024, the company's total indebtedness was approximately $973.9 million, including $965.0 million under the first lien term loan facility[161]. - The company has an asset-based lending facility that allows borrowing up to $425.0 million, with $163.4 million of undrawn lines of credit available as of December 31, 2024[162]. - A 1% increase in the effective interest rate would result in an increase in interest costs of approximately $3.7 million, net of interest rate swap settlements[163]. - The company may need to refinance debt or raise additional capital if unable to generate sufficient cash flow from operations[164]. - The company’s ability to generate cash flow is subject to various external factors, which may impact its financial condition[163]. Stock and Shareholder Considerations - The company had 215,778,520 shares of common stock outstanding and 505,555,111 shares of common stock issuable upon potential exchanges and/or conversions as of December 31, 2024[177]. - The company has filed a registration statement on Form S-8 for 30,639,900 shares reserved for issuance under various equity incentive plans[177]. - The company does not currently expect to declare or pay dividends on its common stock for the foreseeable future[169]. - Future sales of common stock may dilute existing shareholders' economic and voting rights[176]. - The company’s ability to make future dividend payments is contingent upon the earnings of its subsidiaries[169]. Market and Operational Challenges - The business is seasonal, with higher sales typically in the second and fourth quarters due to the summer pool season[44]. - Disruptions in manufacturing due to natural disasters or equipment failures could significantly impact the company's ability to meet customer demand and increase operational costs[127]. - Recent geopolitical conflicts and adverse weather events have led to increased shipping costs, adversely affecting profitability[128]. - The company relies on single-source and sole-source suppliers for certain components, which poses risks of supply interruptions and increased costs[124]. - The market price of the company’s common stock has been volatile and may fluctuate significantly due to various factors[178].

Financial Performance - Net sales increased by 17% year-over-year to $327.1 million for Q4 2024, driven by higher volumes and price increases[3] - Net income for Q4 2024 rose 76% year-over-year to $54.7 million, with a net income margin expansion of 560 basis points to 16.7%[10] - Adjusted EBITDA for Q4 2024 increased by 30% year-over-year to $98.7 million, with an adjusted EBITDA margin expansion of 300 basis points to 30.2%[10] - For the full fiscal year 2024, net sales increased by 6% to $1,051.6 million, primarily due to net price increases and volume growth[14] - Gross profit for the full fiscal year 2024 rose 11% to $530.8 million, with a gross profit margin of 50.5%, an increase of 240 basis points[15] - Operating income for the full fiscal year 2024 increased by 19% to $208.8 million, with an operating margin of 19.9%, up 220 basis points[16] - Net income for the twelve months ended December 31, 2024, reached $118,655 thousand, representing a 46.9% increase from $80,687 thousand in 2023[35] - Adjusted EBITDA for the twelve months ended December 31, 2024, was $277,447,000, up from $247,273,000 in 2023, reflecting a 12.2% growth[37] - Adjusted net income for the twelve months ended December 31, 2024, was $147,934,000, compared to $122,869,000 in 2023, marking a 20.4% increase[43] Cash Flow and Assets - Cash flow from operations for fiscal 2024 was $212.1 million, an increase of $27.6 million from the prior year[19] - Total assets as of December 31, 2024, were $2,990,624 thousand, a slight increase from $2,946,284 thousand as of December 31, 2023[34] - Cash and cash equivalents increased to $196,589 thousand as of December 31, 2024, compared to $178,097 thousand at the end of 2023[36] - The company experienced a net cash provided by operating activities of $212,068 thousand for the year ended December 31, 2024, compared to $184,540 thousand in 2023[36] Segment Performance - North America segment income for Q4 2024 was $95,089,000, an increase from $71,079,000 in Q4 2023, representing a growth of 33.8%[50] - Europe & Rest of World segment income for Q4 2024 was $4,832,000, down from $7,871,000 in Q4 2023, a decline of 38.8%[50] - Adjusted segment income for North America for the twelve months ended December 31, 2024, was $290,964,000, up from $237,693,000 in 2023, reflecting a growth of 22.4%[51] - The company reported a total adjusted segment income for Europe & Rest of World of $22,857,000 for the twelve months ended December 31, 2024, down from $34,503,000 in 2023, a decrease of 33.9%[51] Expenses and Adjustments - Research, development, and engineering expenses for the twelve months ended December 31, 2024, were $25,778 thousand, up from $24,547 thousand in 2023[35] - The company incurred $3.2 million in compensation expenses for the retention of key employees from the ChlorKing acquisition, part of a total $6.3 million retention payment[39] - Total other adjustments for the twelve months ended December 31, 2024, amounted to $10,315,000, compared to $19,540,000 in 2023[43] - The company incurred $4,079,000 in other adjustments for North America in the year ended December 31, 2024, compared to $503,000 in 2023, a significant increase[51] Future Outlook - For fiscal year 2025, the company expects net sales of approximately $1.060 billion to $1.100 billion and Adjusted EBITDA of $280 million to $290 million[20] - Adjusted EBITDA guidance for fiscal 2025 is not provided due to insufficient data to estimate variables and adjustments[33] Tax and Shareholder Information - Basic EPS for the three months ended December 31, 2024, was $0.25, an increase from $0.15 in the same period of 2023[43] - The effective tax rate for the three months ended December 31, 2024, was 13.7%, compared to 20.6% for the same period in 2023[49] - The weighted average number of common shares outstanding, diluted, was 221,872,482 for the three months ended December 31, 2024, compared to 220,848,098 in the same period of 2023[43] Operational Insights - The company continues to leverage its competitive advantages in technology adoption and operational excellence to drive growth in the pool industry[21] - The installed base of pools is increasing annually, providing continued growth opportunities for the company[21] - Hayward's ability to maintain favorable relationships with suppliers and manage disruptions in its global supply chain is critical for future performance[30]

Financial Data and Key Metrics Changes - Net sales increased 3% year-over-year to $228 million, driven by positive net price realization and the acquisition of ChlorKing [9][15] - Gross profit margins expanded 190 basis points to 49.7%, marking the seventh consecutive quarter of year-over-year gross margin expansion [8][9] - Cash flow from operations increased 27% year-to-date, allowing for funding of growth initiatives and reducing balance sheet leverage to 2.8x [8][20] - Adjusted EBITDA margin increased 110 basis points year-over-year to 22.5%, with adjusted diluted EPS rising 22% to $0.11 [9][16] Business Line Data and Key Metrics Changes - North American net sales increased 5% to $195 million, while European and rest of world sales declined 7% to $33 million [17][18] - ChlorKing contributed 3% to net sales in its first full quarter of ownership [15][17] - Gross profit margin in North America increased 290 basis points to 52.3%, while Europe and rest of world saw a reduction to 34.4% due to lower volumes and unfavorable mix [17][18] Market Data and Key Metrics Changes - In North America, in-season demand was consistent with expectations, benefiting from an extended pool season [10] - The aftermarket repair and replacement segment remained resilient, although new construction and remodel demand were impacted by economic conditions and interest rates [10][38] - The value of U.S. permits remains resilient despite a decrease in the number of permits, indicating strength in high-end new construction and remodel segments [10] Company Strategy and Development Direction - The company is focused on advancing its technology leadership, continuous improvement, and expanding customer relationships [7][11] - New product introductions, such as the Microchannel Temperature Control Unit and the Paramount RDX unblockable drain, are central to the growth strategy [12][14] - The company is prioritizing organic and inorganic growth investments, considering strategic acquisition opportunities, and opportunistic share repurchases [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term health and growth profile of the pool industry, particularly in the aftermarket segment [22][23] - The company anticipates solid participation in early buy programs and expects positive net price realization of at least 2% in 2024 [11][22] - Management acknowledged the impact of recent hurricanes on demand, with expectations for incremental demand from recovery efforts [37] Other Important Information - The company raised its full-year guidance for net sales to increase approximately 3% to 5% and adjusted EBITDA to increase approximately 5% to 9% [22] - Total liquidity at the end of the quarter was $388 million, with no near-term debt maturities [20] Q&A Session Summary Question: Gross margin differential between North America and Europe - Management noted that North America’s margins are benefiting from price realization and continuous improvement, while Europe faces macroeconomic challenges [27][28] Question: Pricing in North America - The 6% price increase was attributed to year-over-year price increases, normalized discounts, and a new price increase for the upcoming season [32] Question: Rest of the World margins and demand stability - Management expects a step-up in margins in Q4, with ongoing improvements in manufacturing and distribution [34][35] Question: Early buy program participation - The early buy program is progressing well, with solid participation expected to drive seasonal shipments [40][41] Question: New construction outlook - Management indicated a decline in new pool construction, estimating around 60,000 pools for the year, down from previous peaks [74] Question: Tariff exposure - The company has reduced exposure to tariffs, with 10% to 15% of COGS impacted by tariffs, primarily on imported goods [72] Question: Sell-through value in Q3 - Sell-through was relatively flat in Q3, which is viewed positively [76]

THIRD QUARTER 2024 EARNINGS October 29, 2024 © 2024 Hayward Holdings, Inc. THIRD QUARTER 2024 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 C HAYWARD® © 2024 Hayward Holdings, Inc. 2 Forward-Looking Statements and Non-GAAP Financial Measures Forward-Looking Statements This presentation includes certain statements that are "forward-looking statements" as th ...

Core Insights - Hayward Holdings, Inc. reported quarterly earnings of $0.11 per share, exceeding the Zacks Consensus Estimate of $0.10 per share, and showing an increase from $0.09 per share a year ago, resulting in a 10% earnings surprise [1] - The company achieved revenues of $227.57 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 4.68% and up from $220.3 million year-over-year [2] - Hayward Holdings has outperformed consensus EPS estimates three times in the last four quarters and has topped revenue estimates four times in the same period [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.24 on revenues of $303.67 million, while the estimate for the current fiscal year is $0.61 on revenues of $1.02 billion [7] - The company's earnings outlook will be influenced by management's commentary during the earnings call, which will provide insights into future earnings expectations [3][4] Industry Context - Hayward Holdings operates within the Zacks Electronics - Miscellaneous Products industry, which is currently ranked in the top 26% of over 250 Zacks industries, indicating a favorable industry outlook [8] - The performance of Hayward Holdings' stock may be affected by the overall industry trends, as empirical research shows a strong correlation between near-term stock movements and earnings estimate revisions [5][8]

Financial Performance - Net sales increased by 3% year-over-year to $227.6 million for Q3 fiscal 2024[3] - Net income rose by 40% year-over-year to $16.5 million, with a net income margin expansion of 190 basis points to 7.3%[9] - Adjusted EBITDA increased by 8% year-over-year to $51.1 million, with an adjusted EBITDA margin expansion of 110 basis points to 22.5%[9] - Gross profit increased by 7% to $113.1 million, with gross profit margin rising 190 basis points to 49.7%[4] - Operating income increased by 16% to $33.4 million, resulting in an operating margin of 14.7%, up 160 basis points from the prior year[6] - Net income for the nine months ended September 28, 2024, was $63,922 thousand, up from $49,651 thousand in the same period of 2023, indicating a growth of approximately 28.67%[29] - Adjusted EBITDA for the nine months ended September 28, 2024, was $178,748,000, up from $171,618,000 in the same period of 2023, reflecting a growth of 4.6%[30] - The net income margin improved to 8.8% for the nine months ended September 28, 2024, compared to 7.0% for the same period in 2023[30] - Adjusted EBITDA margin increased to 24.7% for the nine months ended September 28, 2024, compared to 24.0% for the same period in 2023[30] Cash Flow and Assets - Cash flow from operations for the year-to-date increased by 27% year-over-year to $275.8 million[1] - Cash and cash equivalents increased to $274,184 thousand as of September 28, 2024, compared to $178,097 thousand at the end of 2023, marking a rise of about 53.93%[29] - Total current assets decreased to $649,552 thousand as of September 28, 2024, from $724,741 thousand at December 31, 2023, a decline of approximately 10.37%[25] - Total liabilities decreased to $1,516,709 thousand as of September 28, 2024, from $1,634,826 thousand at December 31, 2023, a reduction of about 7.21%[26] Sales and Market Segments - North America segment net sales increased by 5% to $195.0 million, driven by positive net price impact and volume growth in Canada[10] - For the three months ended September 28, 2024, the company reported net sales of $194.968 million in North America and $32.601 million in Europe & Rest of World, compared to $185.070 million and $35.234 million for the same period in 2023, representing a year-over-year increase of 5.1% in North America and a decrease of 7.4% in E&RW[38] - For the nine months ended September 28, 2024, net sales were $609.510 million in North America and $115.021 million in E&RW, compared to $585.126 million and $128.857 million for the same period in 2023, representing a year-over-year increase of 4.2% in North America and a decrease of 10.8% in E&RW[40] Expenses and Costs - SG&A expenses increased by 9% to $64.5 million, representing 28.3% of net sales, up from 27.0% in the prior year[5] - Research, development, and engineering expenses for the nine months ended September 28, 2024, were $18,870 thousand, slightly down from $19,027 thousand in the same period of 2023, a decrease of about 0.83%[28] - The company incurred $1.3 million in transaction and integration costs associated with the acquisition of ChlorKing during the nine months ended September 28, 2024[32] - The company incurred $0.7 million in transaction and integration costs associated with the acquisition of the ChlorKing business during the three months ended September 28, 2024[37] Future Outlook - The company expects full-year 2024 net sales of $1.020 billion to $1.040 billion, reflecting a 3% to 5% increase from fiscal year 2023[14] - ChlorKing integration is progressing well, contributing positively to the commercial pool business[2] - The company plans to continue its market expansion and integration efforts following the acquisition of ChlorKing, which is expected to enhance operational efficiencies and revenue growth[39] Earnings Per Share - The company reported a basic earnings per share of $0.30 for the nine months ended September 28, 2024, compared to $0.23 for the same period in 2023, an increase of approximately 30.43%[28] - Adjusted diluted EPS for the three months ended September 28, 2024, was $0.11, up from $0.09 in the same period of 2023, reflecting a 22.2% increase[37]

Core Insights - Investors in the Electronics - Miscellaneous Products sector should consider Hayward Holdings, Inc. (HAYW) and Garmin (GRMN) for potential value opportunities [1] Valuation Metrics - HAYW has a forward P/E ratio of 24.88, while GRMN has a forward P/E of 28.76, indicating HAYW may be undervalued compared to GRMN [5] - HAYW's PEG ratio is 2.41, which is lower than GRMN's PEG ratio of 3.01, suggesting HAYW has a more favorable earnings growth outlook relative to its price [5] - HAYW's P/B ratio is 2.42, compared to GRMN's P/B of 4.77, further indicating HAYW's relative undervaluation [6] Zacks Rank and Style Scores - HAYW currently holds a Zacks Rank of 2 (Buy), while GRMN has a Zacks Rank of 3 (Hold), suggesting a stronger earnings outlook for HAYW [3] - HAYW has a Value grade of B, whereas GRMN has a Value grade of D, indicating HAYW is viewed more favorably by value investors [6]

Core Viewpoint - Hayward Holdings, Inc. (HAYW) is currently positioned as a more attractive investment opportunity compared to Garmin (GRMN) based on valuation metrics and earnings outlook [1]. Group 1: Zacks Rank and Earnings Outlook - HAYW has a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision trend, while GRMN has a Zacks Rank of 3 (Hold) [3]. - The positive earnings outlook for HAYW suggests a stronger potential for earnings improvement compared to GRMN [3]. Group 2: Valuation Metrics - HAYW has a forward P/E ratio of 22.30, significantly lower than GRMN's forward P/E of 30.21, indicating that HAYW may be undervalued [5]. - The PEG ratio for HAYW is 2.16, while GRMN's PEG ratio is higher at 3.16, suggesting HAYW offers better value relative to its expected earnings growth [5]. - HAYW's P/B ratio stands at 2.17, compared to GRMN's P/B of 5.01, further supporting the notion that HAYW is undervalued [6]. Group 3: Value Grades - HAYW holds a Value grade of B, while GRMN has a Value grade of D, indicating that HAYW is viewed more favorably in terms of value investment criteria [6]. - The combination of Zacks Rank and Style Scores indicates that HAYW is the better option for value investors at this time [6].

Investors interested in stocks from the Electronics - Miscellaneous Products sector have probably already heard of Hayward Holdings, Inc. (HAYW) and Hoya Corp. (HOCPY) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look. We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings e ...