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]

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 ...

Investors interested in Electronics - Miscellaneous Products stocks are likely familiar with Hayward Holdings, Inc. (HAYW) and Hoya Corp. (HOCPY) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look. There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an e ...

Financial Data and Key Metrics Changes - Net sales for the second quarter increased modestly year-over-year to $284 million, with adjusted EBITDA increasing 4% to $83 million and adjusted EBITDA margin rising 100 basis points year-over-year to 29% [22][23][39] - Gross profit margin expanded 290 basis points year-over-year to a record 51%, marking the sixth consecutive quarter of year-over-year margin expansion [23][37] - Cash flow from operations increased 26% year-over-year in the first half, contributing to a year-to-date free cash flow increase of 32% to $199 million [10][55] Business Line Data and Key Metrics Changes - North American net sales increased 2% to $241 million, driven by favorable pricing, while net sales in Europe and Rest of World decreased 6% to $43 million due to lower volumes [52][53] - Commercial pool sales in North America continued to increase on an organic basis, reflecting a multiyear trend of robust growth [12] Market Data and Key Metrics Changes - The number of U.S. permits for new pools is down in the mid to high teens, but the value of permits remains resilient, indicating strength in high-end new construction and remodel segments [41][108] - Europe saw a 7% sales growth in the quarter, while Rest of World sales declined 21% due to macroeconomic and geopolitical conditions [39][53] Company Strategy and Development Direction - The company is focused on driving growth in the commercial segment through both organic and inorganic means, including the acquisition of ChlorKing, which is expected to nearly double sales in the commercial market [5][47] - The company is implementing value-based pricing strategies and SKU rationalization to optimize pricing and ensure products are appropriately priced relative to the value provided [18][45] 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, despite current challenges in new construction and remodels [57][111] - The company narrowed its full-year guidance, expecting net sales to increase approximately 2% to 5% and adjusted EBITDA to increase approximately 3% to 9% [11][29] Other Important Information - The company completed a voluntary early debt repayment of approximately $123 million, resulting in annualized interest expense savings of about $10 million [28] - Total liquidity at the end of the quarter was $448 million, providing financial flexibility for strategic plans [54] Q&A Session Summary Question: What are the opportunities seen with the acquisition of ChlorKing? - Management highlighted that ChlorKing positions the company well in the commercial market, particularly in the Class A segment, and offers cross-selling opportunities with existing products [86][90] Question: What is the outlook for new pool construction? - Management indicated that while the current year is weak, they believe this is a low watermark and expect a rebound in new pool construction as interest rates stabilize [109][111] Question: Can you provide details on ChlorKing's revenue contribution? - ChlorKing is expected to contribute approximately $25 million in annualized revenue, with a more significant impact in the first half of the year [71] Question: How does the company view pricing and SKU optimization? - Management noted that SKU rationalization has received increased attention, and they see opportunities to adjust pricing to better reflect the value provided [84][117] Question: What is the company's approach to capital allocation? - The company maintains a disciplined financial policy, prioritizing strategic growth investments and debt repayment while considering opportunistic share repurchases [63][144]

Over the last four quarters, the company has surpassed consensus EPS estimates two times. Hayward Holdings shares have lost about 0.8% since the beginning of the year versus the S&P 500's gain of 14.5%. While Hayward Holdings has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this ...

Adjusted EBITDA* increased to $82.6 million for the second quarter of fiscal 2024 from $79.5 million in the prior-year period. Adjusted EBITDA margin* expanded 100 basis points to 29.0%. North America BALANCE SHEET AND CASH FLOW The pool industry remains attractive and benefits from sustainable secular demand trends in outdoor living. Hayward continues to leverage our competitive advantages and drive increasing adoption of our leading SmartPad™ pool equipment products both in new construction and the afterm ...