First Quarter 2022 Earnings © 2022 Hayward Holdings, Inc. 1 April 28, 2022 C HAYWARD® | --- | --- | --- | |-------|-------|-------------------------------------------------------------------------------------------------------------------------------------| | | | | | | | | | | | First Quarter 2022 | | | | Earnings Call Kevin Holleran President and Chief Executive Officer Eifion Jones Senior Vice President and Chief Financial Officer | | | | Stuart Baker Vice President of Business Development NYSE: HAYW | © ...

Part I [Business](index=9&type=section&id=Item%201.%20Business) Hayward Holdings, Inc. is a global leader in pool equipment and automation systems, leveraging a large installed base and strong channel partnerships, with aftermarket sales driving approximately 80% of its Fiscal Year 2021 net sales - The company is a leading global designer, manufacturer, and marketer of a broad portfolio of pool equipment and associated automation systems[23](index=23&type=chunk) - Aftermarket sales, driven by replacements and upgrades, are a primary growth driver, representing approximately **80% of net sales in Fiscal Year 2021**[23](index=23&type=chunk) Net Sales by Segment (Fiscal Year 2021 vs. 2020) | Segment | FY 2021 Net Sales % | FY 2020 Net Sales % | | :--- | :--- | :--- | | North America (NAM) | 83% | 81% | | Europe & Rest of World (E&RW) | 17% | 19% | - The company's largest customer, Pool Corporation, represented approximately **36% of net sales in Fiscal Year 2021**[36](index=36&type=chunk) - As of December 31, 2021, the company held approximately **199 issued U.S. patents**, **202 issued foreign patents**, and numerous trademark registrations, highlighting its focus on intellectual property[51](index=51&type=chunk) - As of December 31, 2021, the company had approximately **2,800 total full-time equivalent employees**, with about **28% located internationally**[54](index=54&type=chunk) [Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from distributor dependence, economic sensitivity, supply chain disruptions, substantial indebtedness, and material weaknesses in internal controls - The business is heavily dependent on its largest customers, with Pool Corporation representing approximately **36% of net sales in Fiscal Year 2021**[82](index=82&type=chunk) - The company relies on single-source and sole-source suppliers for certain components, and any disruption could materially affect production, sales, and profit margins[120](index=120&type=chunk)[121](index=121&type=chunk) - As of December 31, 2021, the company's total indebtedness was approximately **$1,002.8 million**, which could adversely affect its financial condition and limit operational flexibility[164](index=164&type=chunk) - The company has identified material weaknesses in its internal control over financial reporting related to the control environment, control activities, and IT general controls, which had not been remediated as of December 31, 2021[187](index=187&type=chunk)[189](index=189&type=chunk) - The company is a "controlled company" as its Sponsors collectively control a majority of the voting power, allowing them significant influence over the board and corporate actions[185](index=185&type=chunk) [Unresolved Staff Comments](index=39&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None[198](index=198&type=chunk) [Properties](index=39&type=section&id=Item%202.%20Properties) The company's corporate headquarters is relocating to Charlotte, North Carolina, and it operates eight global manufacturing facilities and twelve global distribution facilities - The company is relocating its corporate headquarters from Berkeley Heights, NJ to Charlotte, NC[199](index=199&type=chunk) Principal Property Summary (as of Dec 31, 2021) | Location | Manufacturing | Distribution | Warehouse | Corporate HQ | | :--- | :--- | :--- | :--- | :--- | | **North America** | | | | | | Arizona | 0 | 1 | 0 | 0 | | New Jersey | 0 | 0 | 0 | 1 | | North Carolina | 1 | 1 | 4 | 1 | | Rhode Island | 1 | 1 | 1 | 0 | | Tennessee | 1 | 1 | 3 | 0 | | Florida | 1 | 1 | 1 | 0 | | Canada | 0 | 1 | 0 | 0 | | **Europe & Rest of World** | | | | | | Australia | 0 | 4 | 0 | 0 | | China | 1 | 0 | 0 | 0 | | France | 0 | 1 | 0 | 0 | | Spain | 3 | 1 | 0 | 0 | [Legal Proceedings](index=40&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course litigation but does not anticipate a material adverse effect on its financial condition - The company is subject to litigation in the ordinary course of business but does not expect it to have a material adverse effect[203](index=203&type=chunk) [Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - None[204](index=204&type=chunk) [Information about our Executive Officers](index=40&type=section&id=Information%20about%20our%20Executive%20Officers) This section provides biographical information for the company's key executive officers Executive Officers | Name | Age | Position | | :--- | :--- | :--- | | Kevin Holleran | 54 | President, Chief Executive Officer and Director | | Eifion Jones | 54 | Senior Vice President, Chief Financial Officer | | Donald Smith | 55 | Senior Vice President, Chief Supply Chain Officer | | Rick Roetken | 56 | President, North America | | Fernando Blasco | 47 | Vice President, General Manager, Europe & Rest of World | Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=42&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE under "HAYW", and a **$450 million** share repurchase program was approved in December 2021, with no dividends currently expected - The company's common stock is traded on the New York Stock Exchange under the symbol "HAYW"[211](index=211&type=chunk) - On December 20, 2021, the board of directors approved a share repurchase program authorizing up to **$450 million** of common stock repurchases, expiring December 20, 2024[212](index=212&type=chunk) - No shares were repurchased during the fourth quarter of 2021; subsequent to year-end, the company repurchased **4.08 million shares for $80.8 million**[214](index=214&type=chunk) [Reserved]](index=43&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In Fiscal Year 2021, Hayward achieved substantial growth, with net sales increasing **60.1% to $1.40 billion**, driven by strong residential pool demand, improved gross profit margins, and a significant increase in net income Consolidated Results of Operations (in thousands) | | 2021 | 2020 | | :--- | :--- | :--- | | Net Sales | $1,401,794 | $875,402 | | Gross profit | $655,782 | $397,031 | | Operating income | $317,974 | $124,552 | | Net income | $203,725 | $43,302 | | Adjusted EBITDA | $421,737 | $231,551 | - Net sales for FY 2021 increased by **60.1% year-over-year**, primarily driven by a **50.4% increase in volume** and a **7.5% net price increase**[248](index=248&type=chunk)[249](index=249&type=chunk) - Gross profit margin increased by **143 basis points to 46.8%** in FY 2021, attributed to higher sales volumes, price increases, and favorable product mix[250](index=250&type=chunk) - Adjusted EBITDA margin increased by **363 basis points to 30.1%** in FY 2021 from 26.5% in FY 2020[264](index=264&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) For Fiscal Year 2021, net sales surged **60.1% to $1.4 billion**, with gross profit increasing **65.2%** and net income rising **370.5%** due to strong volume, pricing, and operating leverage Net Sales Growth Drivers (FY 2021 vs. FY 2020) | Driver | Contribution | | :--- | :--- | | Volume | 50.4% | | Price, net of discounts and allowances | 7.5% | | Currency and other | 2.2% | | **Total** | **60.1%** | - SG&A expense increased by **$72.0 million** but decreased as a percentage of net sales to **19.1% in FY 2021** from 22.3% in FY 2020, demonstrating operating leverage[251](index=251&type=chunk)[252](index=252&type=chunk) - Net interest expense, including a loss on debt extinguishment, decreased by **18.1% to $60.3 million in FY 2021**, primarily due to debt repayments totaling **$364.6 million** and lower interest rates from refinancing[259](index=259&type=chunk) - The effective income tax rate decreased to **21.7% in FY 2021** from 25.1% in FY 2020, mainly due to lower state taxes and a higher tax deduction from stock option exercises[262](index=262&type=chunk) [Segment Results of Operations](index=50&type=section&id=Segment%20Results%20of%20Operations) Both North America (NAM) and Europe & Rest of World (E&RW) segments reported robust growth in Fiscal Year 2021, driven by significant volume increases and favorable pricing Segment Performance (FY 2021 vs. FY 2020, in thousands) | Segment | Net Sales 2021 | Net Sales 2020 | Segment Income 2021 | Segment Income 2020 | Segment Income Margin % 2021 | Segment Income Margin % 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | NAM | $1,160,850 | $706,514 | $359,886 | $171,815 | 31.0% | 24.3% | | E&RW | $240,944 | $168,888 | $59,195 | $30,804 | 24.6% | 18.2% | - NAM segment net sales growth of **64.3%** was driven by a **54.5% increase in volume** and an **8.3% favorable price impact**[269](index=269&type=chunk)[270](index=270&type=chunk) - E&RW segment net sales growth of **42.7%** was driven by a **33.1% increase in volume**, a **4.0% price impact**, and a **5.6% favorable currency impact**[277](index=277&type=chunk)[278](index=278&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity improved in 2021, with cash increasing to **$265.8 million** and total debt reduced to approximately **$1.0 billion** following its IPO and debt repayments - Unrestricted cash and cash equivalents increased by **$150.9 million to $265.8 million** as of December 31, 2021[295](index=295&type=chunk) Summary of Cash Flows (in thousands) | | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $189,387 | $213,841 | | Net cash used in investing activities | $(48,777) | $(12,998) | | Net cash provided (used) by financing activities | $10,957 | $(135,121) | Long-Term Debt Summary (in thousands) | | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | First Lien Term Facility | $995,000 | $957,985 | | Incremental First Lien Term Facility | — | $150,000 | | Second Lien Term Facility | — | $205,000 | | **Total Debt (incl. finance leases)** | **$1,002,780** | **$1,322,667** | - The ABL Facility was amended to increase revolving loan commitments to **$425.0 million**, with a peak season commitment of **$475.0 million**; as of year-end, the loan balance was zero with **$128.9 million of availability**[298](index=298&type=chunk)[299](index=299&type=chunk) [Critical Accounting Estimates](index=60&type=section&id=Critical%20Accounting%20Estimates) Management's critical accounting estimates involve significant judgment for customer rebates, goodwill impairment, deferred tax asset realizability, stock-based compensation, product warranties, and inventory valuation - Goodwill and indefinite-lived intangible assets, valued at **$924.3 million** and **$736.0 million** respectively, are tested for impairment annually; for 2021, a qualitative analysis concluded that impairment was not likely[320](index=320&type=chunk)[321](index=321&type=chunk) - The realizability of deferred tax assets is evaluated quarterly, considering factors like future profitability and tax planning strategies to determine if a valuation allowance is needed[323](index=323&type=chunk)[324](index=324&type=chunk) - The company provides for product warranties at the time of sale, using historical data on the nature, frequency, and cost of claims to estimate future obligations[326](index=326&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=62&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risks from foreign currency fluctuations and interest rate changes, with **24% of 2021 net sales** from international operations and **$995.0 million** in variable rate debt - Approximately **24% of FY 2021 net sales** were from international locations using a functional currency other than the U.S. dollar; a hypothetical **10% change in currency rates** would impact net sales by about **$34 million**[332](index=332&type=chunk)[334](index=334&type=chunk) - The company has **$995.0 million of outstanding variable rate loans**; a **1% change in the effective interest rate** would cause an approximate **$6.0 million change in annual interest cost**[335](index=335&type=chunk) - The company's interest rate swap agreements, which hedged an initial notional amount of **$550.0 million**, expired on August 31, 2021[336](index=336&type=chunk)[464](index=464&type=chunk) [Financial Statements](index=64&type=section&id=Item%208.%20Financial%20Statements) This section presents the company's audited consolidated financial statements for Fiscal Year 2021, including the independent auditor's report and detailed financial statements - The independent auditor's report from PricewaterhouseCoopers LLP expresses an unqualified opinion on the consolidated financial statements[342](index=342&type=chunk) - The auditor's report identifies Revenue Recognition for product sales as a critical audit matter due to the high degree of auditor effort required, particularly in light of previously disclosed material weaknesses in the internal control environment[349](index=349&type=chunk)[350](index=350&type=chunk) [Consolidated Balance Sheets](index=67&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2021, total assets increased to **$2.98 billion**, total liabilities decreased to **$1.61 billion**, and total stockholders' equity significantly rose to **$1.37 billion** Key Balance Sheet Items (in thousands) | | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$2,978,470** | **$2,607,150** | | Cash and cash equivalents | $265,796 | $114,864 | | Goodwill | $924,264 | $920,325 | | **Total Liabilities** | **$1,608,957** | **$1,803,389** | | Long-term debt | $973,124 | $1,300,256 | | **Total Stockholders' Equity** | **$1,369,513** | **$209,261** | [Consolidated Statements of Operations and Comprehensive Income](index=68&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) For Fiscal Year 2021, net sales reached **$1.40 billion**, resulting in a net income of **$203.7 million** and diluted EPS of **$0.49** Key Income Statement Data (in thousands, except per share data) | | 2021 | 2020 | | :--- | :--- | :--- | | Net sales | $1,401,794 | $875,402 | | Gross profit | $655,782 | $397,031 | | Operating income | $317,974 | $124,552 | | Net income | $203,725 | $43,302 | | Diluted EPS | $0.49 | $0.25 | [Consolidated Statements of Cash Flows](index=71&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For Fiscal Year 2021, net cash from operating activities was **$189.4 million**, with a **$150.5 million increase** in cash and cash equivalents Cash Flow Summary (in thousands) | | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $189,387 | $213,841 | | Net cash (used in) provided by investing activities | $(48,777) | $(12,998) | | Net cash provided by (used in) financing activities | $10,957 | $(135,121) | | **Change in cash and cash equivalents** | **$150,502** | **$68,088** | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=112&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[548](index=548&type=chunk) [Controls and Procedures](index=112&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of December 31, 2021, due to unremediated material weaknesses in internal control over financial reporting, with remediation efforts underway - Management concluded that the company's disclosure controls and procedures were not effective at the reasonable assurance level as of December 31, 2021[550](index=550&type=chunk) - The ineffectiveness is due to unremediated material weaknesses in internal control over financial reporting, specifically concerning the control environment, control activities, and IT general controls[551](index=551&type=chunk)[552](index=552&type=chunk)[553](index=553&type=chunk) - Remediation efforts are underway, including developing a remediation plan, establishing an internal audit group, implementing new processes, expanding relevant teams, and engaging a third-party provider[555](index=555&type=chunk) - As a newly public company, this annual report does not include a report of management's assessment regarding internal control over financial reporting or an attestation from the registered public accounting firm[556](index=556&type=chunk) [Other Information](index=114&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[558](index=558&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=114&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[559](index=559&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=114&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's 2022 annual meeting proxy statement - Information is incorporated by reference from the definitive proxy statement for the 2022 annual meeting of shareholders[560](index=560&type=chunk) [Executive Compensation](index=114&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive and director compensation is incorporated by reference from the company's 2022 annual meeting proxy statement - Information is incorporated by reference from the definitive proxy statement for the 2022 annual meeting of shareholders[562](index=562&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=115&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership data and equity compensation plan information are incorporated by reference from the company's 2022 annual meeting proxy statement Equity Compensation Plan Information (as of Dec 31, 2021) | Plan Category | Securities to be Issued Upon Exercise (a) | Weighted-Average Exercise Price (b) | Securities Remaining Available for Future Issuance (c) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 13,544,917 | $2.83 | 12,300,095 | [Certain Relationships and Related Transactions, and Director Independence](index=115&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information concerning related person transactions and director independence is incorporated by reference from the company's 2022 annual meeting proxy statement - Information is incorporated by reference from the definitive proxy statement for the 2022 annual meeting of shareholders[567](index=567&type=chunk) [Principal Accountant Fees and Services](index=115&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's 2022 annual meeting proxy statement - Information is incorporated by reference from the definitive proxy statement for the 2022 annual meeting of shareholders[568](index=568&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=115&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements and exhibits filed as part of the Form 10-K, with no financial statement schedules included - The financial statements filed as part of the report are listed in Part II, Item 8[569](index=569&type=chunk) - No financial statement schedules are included[569](index=569&type=chunk) [Form 10-K Summary](index=118&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary for this item - None[573](index=573&type=chunk)

Financial Data and Key Metrics Changes - The company reported net sales of $352 million for Q4 2021, a 35% increase year-over-year, and adjusted EBITDA of $106 million, up 43% year-over-year [5][14]. - For the full year 2021, net sales grew by 60% to over $1.4 billion, with adjusted EBITDA reaching a record $422 million, an increase of 82% year-over-year [7][15]. - Adjusted EBITDA margin expanded by more than 360 basis points for the full year to 30.1% [7][15]. Business Line Data and Key Metrics Changes - The North America segment saw Q4 net sales increase approximately 40% to $297.6 million, driven by 24% higher sales volumes [16]. - In Europe and the Rest of the World, Q4 net sales increased 14% to $54.8 million, with gross profit margin expanding to 42.5% [18]. - For the full year, North America net sales increased 64% to $1.16 billion, while Europe and Rest of the World net sales increased 43% to $249 million [17][18]. Market Data and Key Metrics Changes - The company noted that the aftermarket represented approximately 80% of total sales in 2021, with repair, replace, and upgrade making up 65% of the sales mix [22]. - The company expects new construction to grow approximately 25% year-over-year, with strong order files carried into 2022 [22]. Company Strategy and Development Direction - The company is focused on expanding its market position through innovation, particularly in IoT products and the Omni control ecosystem [8][13]. - The M&A strategy includes acquiring technology companies to enhance product offerings and leverage existing technologies [13]. - The company aims to maintain a balanced capital allocation strategy while investing in growth initiatives and returning capital to shareholders [20]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the health of the overall pool industry, citing strong secular trends and favorable economic data supporting residential construction and remodeling activity [22]. - The company anticipates net sales growth of 9% to 12% in 2022, with adjusted EBITDA expected to be in the range of $460 to $475 million [22]. Other Important Information - The company has made significant progress in reducing net leverage from 5.2 times to 1.7 times, facilitating strong cash flow generation [19]. - The company is committed to ESG initiatives and plans to publish its inaugural ESG report later in the year [21]. Q&A Session Summary Question: Sequential margin improvement drivers and supply chain challenges - Management noted good volume growth and price realization as key drivers of margin improvement, with some supply chain improvements observed in steel and packaging, but ongoing challenges with electronic components [30]. Question: Market growth, price, and outgrowth expectations - Management indicated that the 11% to 14% growth guidance reflects a combination of price and volume growth, with expectations of continued outperformance against the market [32]. Question: European and Rest of World margins - Management highlighted improved margins in Europe due to better price management and local manufacturing leverage, with expectations for continued margin improvement in 2022 [43]. Question: Labor availability issues - Management expressed optimism about labor availability, noting that dealers are actively seeking to expand capacity to meet demand for new pools and remodels [44]. Question: Inventory levels and order credibility - Management indicated that inventory levels are returning to normal, with negligible cancellations observed, suggesting strong underlying demand [54]. Question: Aftermarket installed base penetration - Management acknowledged that there is significant growth potential in the aftermarket, particularly for salt chlorination products, and emphasized ongoing investments in new product development [68].

Hayward Holdings, Inc. (NYSE:HAYW) Q3 2021 Earnings Conference Call October 27, 2021 9:00 AM ET Company Participants Stuart Baker - VP, Global Strategic Planning and Business Development Kevin Holleran - President and CEO Eifion Jones - SVP and CFO Conference Call Participants Ryan Merkel - William Blair Nigel Coe - Wolfe Research Brian Lee - Goldman Sachs Mike Halloran - Baird Rob Wertheimer - Melius Research Jeff Hammond - KeyBanc Joshua Pokrzywinski - Morgan Stanley Joel Tiss - BMO Operator Welcome to Ha ...

Financial Data and Key Metrics Changes - The company reported record net sales of $364 million, a 66% increase year-over-year, and adjusted EBITDA of $110 million, an 81% increase year-over-year despite inflationary and supply chain challenges [6][15][18] - Gross profit increased to $168 million, a 72% increase, with a gross profit margin of 46.1%, up 160 basis points [15][16] - Net income rose to $52.8 million, a 182.3% increase, with an adjusted EBITDA margin of 30.3%, up 259 basis points [17][18] Business Line Data and Key Metrics Changes - North America segment net sales increased 66% to $293.6 million, with gross profit up 70% to $140.4 million and gross margin expanding to 47.8% [18] - Europe and rest of the world segment net sales also increased 66% to $70.8 million, with gross profit rising 81% to $27.6 million and gross margin expanding to 38.9% [19] Market Data and Key Metrics Changes - The company noted strong demand for pools and pool equipment, driven by new pool construction and upgrades, with builder backlogs expected to continue into 2022 [8][9] - The industry is supported by favorable housing dynamics, including increased home ownership and a strong repair and remodel market [8][10] Company Strategy and Development Direction - The company is focused on product innovation and expanding its environmentally sustainable product offerings, with significant investments in engineering [22][23] - The strategic emphasis is on leveraging competitive advantages such as a strong brand, extensive dealer network, and operational excellence to drive growth [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to benefit from market expansion and favorable industry trends, projecting continued strong demand beyond 2021 [7][9] - The company raised its full-year guidance, expecting net sales growth of 54% to 58% and adjusted EBITDA of $405 million to $425 million [9][10] Other Important Information - The company has made significant strides in deleveraging, reducing its leverage ratio to 2.1 times as of July 3, 2021, from 5.2 times at the end of 2020 [20] - Total liquidity at the end of the second quarter was $445 million, including $252 million in cash [20] Q&A Session Summary Question: Backlog levels and medium-term growth outlook - Management indicated that the order file is larger than usual for this time of year, reflecting strong demand and enthusiasm in the market [25][26] Question: Trends in aftermarket versus new construction - Management noted that new builds are being pushed out into 2022, with strong demand for both new construction and aftermarket upgrades [28][29] Question: Pricing outlook for the year - The company has implemented price increases of 5% to 7% and expects to normalize the price-cost dynamic by Q4 [31][33] Question: Lead times and backlog stretching - Management confirmed that they have a larger order file than usual and are working to increase production capacity to meet demand [39][40] Question: Capital usage and M&A focus - The company is prioritizing growth investments and is actively looking at M&A opportunities while maintaining a focus on deleveraging [41] Question: Sales outlook and adjusted EBITDA outlook - Management expects sales growth to contribute significantly to the bottom line, with margins improving towards the end of Q3 and fully normalizing in Q4 [44] Question: Capacity utilization and sales potential - Current capacity utilization is over 90%, with plans to expand shift models to increase production capacity [45] Question: Share gains and distributor behavior - Management highlighted that share gains are driven by builders and servicers, with a growing number of new dealers joining their rewards program [55] Question: Acquisition pipeline and technology focus - The company is focused on acquiring businesses with similar financial profiles and technology attributes to expand its market position [63] Question: Confidence in growth outlook for 2022 - Management identified several growth levers, including pricing, new construction, and aftermarket upgrades, indicating strong demand trends will continue into 2022 [66]

Second Quarter 2021 Earnings © 2021 Hayward Holdings, Inc. 1 August 2, 2021 C HAYWARD® | --- | --- | |-------|-------------------------------------------------------------------------------------------------------------------------------------| | | | | | | | | Second Quarter 2021 | | | Earnings Call Kevin Holleran President and Chief Executive Officer Eifion Jones Senior Vice President and Chief Financial Officer | | | Stuart Baker Vice President of Business Development NYSE: HAYW | © 2021 Hayward Holdings, ...

Hayward Holdings, Inc. (NYSE:HAYW) Q1 2021 Earnings Conference Call May 5, 2021 9:00 AM ET Â Company Participants Stuart Baker - Vice President, Global Strategic Planning and Business Development Kevin Holleran - President and CEO Eifion Jones - Chief Financial Officer Conference Call Participants John Lovallo - Bank of America Brian Lee - Goldman Sachs Ryan Merkel - William Blair Mike Halloran - Baird Rob Wertheimer - Melius Research Jeff Hammond - KeyBanc Capital Markets Saree Boroditsky - Jefferies Opera ...

First Quarter 2021 Earnings © 2021 Hayward Holdings, Inc. 1 May 5, 2021 C HAYWARD® First Quarter 2021 Earnings Call Kevin Holleran President and Chief Executive Officer Eifion Jones Senior Vice President and Chief Financial Officer NYSE: HAYW © 2021 Hayward Holdings, Inc. 2 Cautionary Statement SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements and information relating to the Company that are based on the beliefs of management as well as assumptions made ...