Hayward (HAYW) - 2024 Q4 - Annual Results

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]