Hayward (US:HAYW)2025-10-29 14:00Financial 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 [6][14] - Adjusted EBITDA increased by 16% to $59 million, with an adjusted EBITDA margin of 24.2%, up 170 basis points [6][14] - Gross profit margin expanded by 150 basis points to 51.2% [6][14] - Cash flow generation was strong, reducing net leverage to 1.8 times, the lowest level in nearly four years [5][18] Business Line Data and Key Metrics Changes - North American net sales increased by 7% to $208 million, with a 7% increase in net price realization and stable volume [15][16] - 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 [16][17] - Adjusted segment income margins in Europe increased to 18.5% from 8.4% a year ago [17] Market Data and Key Metrics Changes - Strong demand trends were reported, particularly in Canada, which saw a 21% increase in net sales [16][26] - The U.S. market experienced improved out-the-door sales growth rates for Hayward products, particularly in September [7][25] - The aftermarket model remains resilient, with approximately 85% of sales aligned with serving the aftermarket needs of the existing installed base [7][8] Company Strategy and Development Direction - The company is focused on expanding customer relationships, developing innovative products, and leveraging operational excellence [5][10] - Investments are being made in advanced engineering and product development, particularly with the introduction of the OmniX automation platform [10][11] - The company is actively pursuing acquisition opportunities in residential and commercial pool markets to augment organic growth [19][50] 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 [5][21] - The company expects net sales to increase approximately 4% to 5.5% for the full year, with adjusted EBITDA projected to increase by 5% to 7% [21][22] - Management noted that the tariff environment remains uncertain but emphasized ongoing tariff mitigation actions [9][75] Other Important Information - The company authorized a share repurchase program of up to $450 million over three years [19] - Year-to-date cash flow from operations was $283 million, reflecting improved profitability and working capital management [19] Q&A Session Summary Question: How did the season progress since July, and where did you see the upside in the third quarter? - Management noted strong sales out demand, particularly in September, and highlighted improved performance in Canada [25][26] Question: How do you think about the early buy program relative to the market being flat? - The early buy program is tracking expectations, and the company aims to level load factories while managing price increases due to inflation and tariffs [29][30] Question: Can you discuss your investments in new products and their impact on sales? - The company is making targeted investments in engineering and new product development, with a focus on technology and innovation [31][32] Question: What are your capital allocation priorities moving forward? - The company plans to increase CapEx for automation and supply chain improvements while also considering M&A opportunities [41][45] Question: How do you view the impact of the recent tariff refunds on margins? - The company received a cumulative tariff refund that positively impacted margins, and it will continue to pursue eligible tariff refunds [73][75]