Financial Data and Key Metrics Changes - Net sales increased by 7% to $244 million, driven by a 5% increase in net price and a 2% increase in volume [4][7][15] - Adjusted EBITDA increased by 16% to $59 million, with adjusted EBITDA margin expanding by 170 basis points to 24.2% [4][7][15] - Gross profit margin increased by 150 basis points to 51.2% [4][7][15] - Net leverage reduced to 1.8x, the lowest level in nearly four years [5][19] Business Line Data and Key Metrics Changes - North American net sales increased by 7% to $208 million, with net price realization increasing by 7% and stable volume [16][17] - European and rest of the world net sales increased by 11% to $36 million, with an 8% increase in volume offsetting a 1% reduction in net price realization [17][18] Market Data and Key Metrics Changes - Strong demand trends were reported, particularly in North America and Canada, with Canada seeing over 20% growth [8][27] - The aftermarket model remains resilient, with approximately 85% of sales aligned with serving the aftermarket needs of the existing installed base [8][9] Company Strategy and Development Direction - The company is focused on expanding customer relationships, developing innovative products, and leveraging operational excellence capabilities [5][6] - Investments are being made in advanced engineering and product development, particularly with the introduction of the OmniX automation platform [11][12][34] - The company is also pursuing additional acquisition opportunities in residential and commercial pool sectors [21][47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the dynamic environment and raised full-year guidance for net sales and adjusted EBITDA [6][22][23] - The company anticipates solid cash flow generation and a conversion of greater than 100% of net income [23] - Management noted that the macroeconomic and tariff environment continues to evolve, but they remain positive about the long-term growth outlook for the pool industry [24][23] Other Important Information - The company is implementing AI tools to enhance customer service, with new AI agents resolving approximately 80% of inbound calls without human intervention [14][13] - The company has authorized a share repurchase program of up to $450 million over three years [21][22] Q&A Session Summary Question: Demand trends since July and upside in Q3 - Management noted strong sales out demand, particularly in September, and highlighted improved performance in Canada and Europe [26][27][28] Question: Early buy program and price increase reception - The early buy program is tracking well, with discounts offered to mitigate price increases due to inflation and tariffs [29][30] Question: Investments in new products and their impact on sales - The company is making targeted investments in new product development, particularly in technology and innovation, which is expected to drive future sales [33][34] Question: Impact of private label competition - Management believes that their loyal dealer base will continue to appreciate the value proposition of Hayward products despite competition from lower-priced alternatives [40][41] Question: Increase in cash flow guidance - The increase in cash flow guidance is attributed to improved EBITDA, project timing, and working capital management [43][44] Question: International market margin improvements - European margins improved due to stabilization of production capabilities and a cumulative tariff refund [74][75] Question: Tariff refunds and supply chain realignment - The company is actively pursuing tariff refunds and has made significant progress in reducing exposure to China [82][84]