HAYW - Earnings call transcript Q1 2024

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Operator

Good morning, ladies and gentlemen, and welcome to Hayward Holdings First Quarter 2024 Earnings Call. My name is Lesser, and I will be your operator for today. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Kevin Maczka, Vice President of Investor Relations. Mr. begin. may you Maczka, Mr. me, Excuse you may begin. Maczka,

Kevin Maczka

our Thank quarter XXXX and been to section good morning, morning, first our posted of Relations Investor issued We the at earnings has investor.hayward.com. everyone. which you, website press this release

an can today and that joined we slide you Eifion President Holleran, Kevin Financial President during Here, Officer. Executive earnings call. Jones, Officer; Vice reference and this presentation Chief find also I'm by will and Chief Senior

that the results and including during could I those of uncertainties, statements. make Securities future would like to for subject differ most everyone to discussed Exchange variety are company are to Before including to XXXX statements recent forward-looking such Commission duty call, we The undertake may this cause any our not remind certain that considered begin, the forward-looking management's company filing update and does that statements Such actual a in risks periods. in nature, and materially. with Form XX-K outlook

Additionally, non-GAAP would to turn non-GAAP Kevin measures, and GAAP call our appendix during release can call presentation. this slide be Holleran. Reconciliations will to the measures to earnings discuss company discussed on historical found measures the of now in to call, like the I the today's the comparable over

Kevin Holleran

today's the X% modest from volume. earnings expanded with morning, I'll well and cash quarter quarter basis presentation year delivering consecutive lower points business XXX start profitability in performance represents and results team of expansion. also profitability at in sales my I'm last fourth improved through and Kevin. flow reinvest of X achieved the proud growth the messages. Gross the during a the We line XX.X% contributions drive volumes fifth pleasure increased quarter year-over-year Cash quarter. Strong cash soft our we It's flow the sales seasonally quarter with of of and quarter, the Hayward's to everyone. gross price report improved and margins earnings during Hayward executed to to first call. first expectations. the both to flow. Net robust during sequential Thanks, year-over-year you on Good to period. I'm productivity. welcome to entire all record of in margin pleased us matches Slide key This year-over-year enable

debt launch in the presentation. are As exciting completed number we to new and we leader our I'll details the confidence to moment. end, early generation. Subsequent -- industry, introducing for share another will reflecting an of business flow outlook innovation later in in quarter products repayment, share details a provide in performance a voluntary a on Eifion cash

Finally, we guidance. are maintaining year our full

a to For to X% adjusted approximately full XXXX, and to sales sales and to return X% we year net X% with XX%. increasing continue growth approximately increasing EBITDA earnings expect

Incoming the but levels orders in Turning now in the The increased focused in pool the Europe. segment, complete ramped declined $XXX sales segment in market are double North first multiyear X, the the our North and of to the quarter of part related commercial were By quarter. We're increased the sales in actions Slide expectations. to to and continuing Net impacted volumes up XX% results World. in year-over-year in driving Rest America growth production manufacturing Europe consistent by during America to and with on delays trend. highlighting sales X% were million, in footprint for consolidating expected has the digits operations commercial and quarter, in of the X% Europe increased second quarter, healthy net quarter.

was quarter points in $X.XX. was quarterly record. in the year-over-year adjusted expanded margin Adjusted gross profit the first margins XXX first mentioned, EPS EBITDA matching As basis quarter, the XX.X% to XX.X% I and

performing resilient, for by to but demand our is has largest higher discretionary the Hayward uncertain. Nondiscretionary construction demand in the business for was with environment current now interest been products and aftermarket U.S. new remodel upgrade near-term remains End Slide rates. our but Turning the economic and market, a quarter with X expectations solidly, for consistent conditions overall update. demand impacted

season, OEM and recent we relative were more cost the we quarter. sequentially of of trends higher inventory the outlook, capital. channel As second approach peak normal partners to demand current the pool economic seasonal rebalancing lead expect our improvement times level in normalized In with the quarters,

expected As to level approach, implemented the channel prudent XXXX previously is their levels we inventory reset for we on the recalibrating industry behind commented be has hand but normalized have and and inventory on Pool us, the of the appropriately support continuously previously, a taking to disciplined post-pandemic is annual positioned neutrality. increases demand. Historically, price/cost price, maintain very price customer to been largely

better the net of X% terms. We sales the We this customer early in facilities margins. to of realization buy year facility continue initiated to get in discounted key plan approximately last modern a mix Spain closer actual first to to in the expected year price leverage as below customers, quarter to positive expect a due level for Europe contribution modestly support consolidate on the with and

we achieving full Officer Commercial chain XX lean April, Global As [indiscernible] Officer. Operational Eric advantage historically in strategies excellence for operations, quarter. in rates chain. the for second experience Eric competitive a global complete, who has mentioned, project Chief to Operations is years of advance supply we this end-to-end brings than Collins, and of Hayward Hayward is been production world-class I manufacturing leadership and more and a John supply now announced appointment appointed Chief the succeeding as In are

from This to most XXXX of produce year as innovation Environmental to consecutive STAR to Finally, the our U.S. our were Agency, recognition. we our customers. sustainability testament ENERGY fourth Partner energy-efficient the Protection the solutions receive strive commitment and ENERGY to the a Year of STAR honored we for Award is

Turning now Slide X. to

Tiger robot share on technologies our early introduced and product new more Shark programmable robotic advanced R-XXX whole news and navigation, best these of models as Building two active cleaner pool key of highlighted RXXX both the Both the cleaners to units exciting and convenience The some in-ground model, pool speed line. an showcased pool. filters target new as smart units series in scrubbing represent we I'll On quality market, for quarter such With cleaning the being complementing residential XXXX. fourth surfaces, our the in simplicity. cleaner features automatic the on and easy-to-use today, all momentum, robots. call, for of interface feature we RXXX that user interchangeable

such our automatic market longer represent U.S. pool the We X suction Over call this for Eifion, our the important has will CAGR, cleaner about a technologies pressure. new at models These as and turn initial over in and road plans map later look who step years, technologies, forward sharing cleaner to to in robotic product an double-digit cleaner grown product cleaners. this discuss year. financial outpacing With past to other other like more the for category detail. more that, robotic information a results I'd

Eifion Jones

Kevin, on and good morning. I'll on a you, be comparisons Thank start made basis. All Slide year-over-year X. will

gross in the early the at performance. our quarter, quarter the deploy balance second pleased first confidence cash strong the flexibility and delivered margin repayment. for end expected year-over-year stated, outstanding we to expansion. debt the were sales collections given Net financial are in with for first and and The quarter increase line in As of with our us expectations quarter we cash Kevin have

to volume. first the profit net increases $XXX detail. basis and in manufacturing gross in both adjusted first sales strong at and was X% million, the in is EBITDA Net XXX increased and profit driven driven by Gross more EBITDA Looking million in $XX modest to and XX.X%. a continuous margin price our was in results quarter, for result, primarily margin first points efficiency quarter This $XXX of improvement the gains the quarter XX.X%. increased by million, operations. Adjusted

to EPS was rate prior was XX% Adjusted in the items. the quarter the in quarter primarily timing was first $X.XX. the tax Our in of compared change discrete The period. due to year effective X%

increased net higher quarter to due market timing been driven and to points expansion. deliveries. segment increased consecutive volumes. largely a to the significantly sequentially on increased and XX.X%, X. with Adjusted I'll profit X% fifth discuss basis quarter margin the by financing Gross reportable XX.X%. The impacted Canadian million, XXX America increased $XXX sales in points Now robust costs our XX Net North economic margin for U.S. by the in Beginning first Canada. segment the results. sales was basis X% margin has quarter XX% representing in of Slide conditions sales higher and year-over-year income of year-over-year

and XX% in Europe the $XX Rest Net sales volumes. in quarter Net million first due lower XX% to for XX% to and sales Europe decreased of to Rest World. World. declined Turning and of

delay the in resulted Europe margin adjusted margin Gross was in program consolidation certain footprint income our XX.X%, noted, was deliveries. Kevin and As customer segment of XX.X%. profit

flow and to a Slide XX quarter. to Turning cash of Xx was highlights. sheet review Net our for debt first adjusted the of the end at EBITDA balance

credit We deleveraging $XXX cash and was $XXX of range continue plus equivalents our Xx the million, back facilities our and within of X million. year. Total be the under million liquidity to at expect of this of to targeted to quarter prioritize availability end $XXX including

have plans. provides our near-term we in and matures XXXX our financial in schedule This as no undrawn debt attractive flexibility strategic matures We the on maturity maturities ABL The XXXX debt. execute

in tied interest first Our XXXX, through XXXX rate limiting for cash of borrowing the to agreements term currently rate quarter. rate interest benefits million from on swap the in X.X% maturing $XXX facilities debt fixed our

for Overall, has pleased attributes on business Our high-quality quality rate earnings. average global earned by interest the X.X%. free cash quarter with we balance was cash flow are generation of sheet. The our driven strong the deposits

inventories uses the second in and to has $X and quarter cash improvement working $XX This reduced a was strong buy related XX% seasonal period. and improvement in consequently, of reminder, generation levels. Total use the year-over-year. first the is in free declined first quarter, $XX $XX primarily cash compared million. flow by early capital cash first year to collection ago million in receivables. management, flow in Cash cash in CapEx used of inventory flow the reflects quarter or operations $XX million continuous a typically in million million the was payment was company quarter the As

We continue of full cash XXXX year income, greater with approximately flow of to of XXX% conversion cash free net expect $XXX million. than free flow

seasonal we our cash in increase and debt the the quarter second in a balance in strong quarter, Given year-over-year voluntary completed collections to repayments subsequent cash early confidence the end. our

cash our of to term incremental B full on the repay outstanding used loan we balance hand approximately million. $XXX Specifically, on

approximately to We impact. net year result million XXXX savings reflecting fiscal expense of of interest this year for million, expect in $X are approximately of net savings $XX the million interest $X income, annualized expected partial

XX. on capital Slide Turning allocation now to

while returns maintaining disciplined highlighted approach, financial are the balanced maintain As we financial emphasizing we CapEx, leverage. a debt we've In strategic prudent take term, growth shareholder before, prioritizing and investments investments growth near and a repayment. policy and

in We which opportunities geographic to product the in consider and complement to opportunistic relationships acquisition strategic share serve we to repurchases. commercial also addition continue our offering, footprint

Turning now XX Slide for our outlook. to

for XXXX is outlook Our unchanged.

growth by solid driven We increased sales continue to the execution across realization adoption. positive to to and price technology year, for and anticipate return organization, full earnings the

range inventory regarding channel trends, guidance in global Our conditions our consumer coupled macro spending and expectation contemplates levels. with uncertainty current

For billion, million year XXXX, the of anticipate cash to We $XXX with $X.XX to continues sales $XXX X% $X.XX Hayward million. to fiscal flow to free increase expect of million. a to $XXX equivalent EBITDA approximately full range X%, year net of approximately adjusted to full billion

$XX is expectation of remainder forecast forecast expense million. The to XX% a $XX tax the rate our also year, million, effective approximately Our at reduced is of and remains early by repayment. the for as CapEx $X million spending unchanged debt approximately interest result the

very XXXX, profile health about remain beyond particularly of growth the Pool aftermarket. positive the the out of Looking strength we and the industry, long-term

that, confident execute the to to our turn Kevin. with growth our strategic are plans. in call ability back We now And successfully I'll

Kevin Holleran

Jones. Eifion Slide XX. I'll back Thanks, on pick up

delivered for Before we presentation. close, from first expectations outlook the let and results takeaways our key me quarter with the today's reiterate year. reaffirmed We consistent

to incremental in strategies drive and new execute for cash the improve creation. With leading allowing we strong confident the innovation, the results to that ready to repay shareholder fund pool expansion margin line loan our financial our value right to bringing I'm to strategy delivering continues to We're early. we're term market fully have team growth and us now ownership improved in and that, place questions. solutions and gross compelling open experience. Our talent flow,

Operator

Carter Andrew comes [Operator first Instructions] me, Your Carter Excuse from first from comes your Andrew question from from Stifel. Stifel. question

W. Andrew Carter

Yes.

Sorry meat I about figure that. phone. can't my function the out on

here. little So to I gross dig about to margin the in wanted ask a bit

XXX were quarter. the You points up basis in

quite to slows and focus basis there was Europe that upside kind points. margin, performance. then look the on down XXX maintained gross guidance the full you I at bifurcated of Your implies guess is know as for year there? onetime issues. of kind I a the bit call the the the some out takes out margin headwind and in Could you year? the quarter. called puts just you of remainder And

Eifion Jones

the the margin. into We've leverage, gross Look, we Yes, question. footprint. record this very the We stepped matched global XXXX. our main talked We've convert will X in benefits the We're about QX. production work a expansion: of over achieved manufacturing volume be in with back continue basics we're across cost XX.X% last quarter in the of to that the output thanks obviously program before, full X margin seeing One certain of manufacturing of remaining now for achieved our Eifion. It's progressively neutrality we've of We've to is the price done XXXX to the facilities as lean lot pillars first years maximize pleased 'XX. into our have four manufacturing now we We're and in operating footprint. collapse and our practices. walls that

of Hayward continue the many, should on buy as Kevin model. we pricing disciplined this mechanism. mentioned, of have, to is, October higher sticky attributes management and a And new QX, to to early a seeing Price introduce which that. through very year. with we're and products, we industry many X. back balance mentioned, on practicing the in Pricing decades, higher see and with continue and of step as of cost lean the but has blend really typically informative I as there's initiated come attribute We the develop QX was organization a price as Obviously, over pricing value-based higher we margin pricing strong a hallmark

we Obviously, there's in the Europe Europe North recognize to scale America. delta a to comparison relates a and lack look, of it there's the mean, situation, American As I North between European market. the in

We continue to tackle that issue.

adoption plans, It's We Spain, yield, a different base. growth which European across will our competitive in It fragmented remains footprint and of have manufacturing a a consolidated have spectrum. landscape manufacturing we the different cost ultimately believe, leverage installed and the type technology across we market.

over So reasons we're the why All there we of are the time, and are being we course that. believe differentials. tackling see some of capable improved

year, in basis to the believe we We XXX As forward We've it nice relates the of we year-over-year. improvement across and will margin? call achieve full expansion. approximately as this year do in upside points to balance this done talked we a business the margin that expect get of year, step We believe returns earlier the there's the about do year. do that this QX leverage we'll

margin very, So our opportunities we feel good in business. the very about

W. Andrew Carter

first South. -- of us in lot April? trended? expectations has readout, quarter, to called wanted of of kind remind in year impact of the a that readout that just into in how I quarter, How your question, -- America? second the for And of pool was kind there North out in was weather a And kind drill full how on kind that did the there of trended what particularly kind are know that

Kevin Holleran

volume Rest really XX%. upgrade of market international more from more Yes, discretionary increase, guidance, than aftermarket remains pressure closer a to standpoint a World, year. that both that the I'll XX% which flat, was U.S., aspects, standpoint, in to calling some all obviously. whether down start discretionary markets, down or From around from we're Andrew, U.S. and feel calling to that's this But new built our build, remodel, a really there. in remain we're unchanged, and pricing standpoint, X% really the but It

to between we a through that'd XX% gets now X% up us, X% in there adding with feel destock here after So should flows a kind that as experienced headwinds, guidance X% X%. volume is channel to that X% that the tailwind Obviously, FX that of or standpoint, so you down that and be from about modest reverse the and XXXX price. a for midpoint year last

rolls the start nationally, as obviously using some all impacted or warm As season as for here weather construction, markets. which weather start to that QX, the spring but improving the that's the hurts us of was flow prohibits There also pool of and up expected very and but is some inhibits obviously, QX, of seems the the markets in in for in in be order we're year-round April season. picking rain, as

the much and is, be with channel sales and calls, destock historic us, in on shipments a this we're through that's prior playing said the and their into here now see we the that to behind we've QX healthier matching out XXXX. with what back season really that in to through pool our out So position more

Operator

Your William Blair. from Ryan next comes from Merkel question

Ryan Merkel

had start the one good sales guess a question and and year. Congrats on a to I I on pricing.

are of in up sort we following thoughts here? last as think new renovation enter to 'XX? and new Kevin, I the question. you Any about the for that pools outlook thinking how season

Kevin Holleran

thoughts, isn't really new there No, Ryan.

I think or international in XX original seeing, closely. that We we're original sticking to down what track assumption guide we're in that markets. the permits -- to from very the guide the down we're closer XX, around

from the may that may but than worse some input our well industry. that we QX, we a And of frankly, something based out. plays covering You dealers, that improve in little think as year saw, upon we're the as hearing that,

construction. get that of been done. some work we're which data, Folks weren't right the XX%. the best the last over largely to we some again, remodel, is discussion to new we're has the has permit several in the holding to down builders have the pushed So -- There U.S., where prioritized able years, that

forever. that defer can't You

enough around us some to and assumption in original our interest pickup activity our was so in not alter remodel. But So for does what guide. the to the there be seem

So holding that, to Ryan. we're

Ryan Merkel

Got it.

Okay.

So early ready still We're as see it little demand not the relates you but like sounds [indiscernible]. pent-up Got it to yet. renovation, believe story it. in a to it

then great just promotional to would I'm curious, that And the your year. environment? X% will Okay. the Any there? be how hear you describe for price changes

Kevin Holleran

I more more a the pandemic, it promotional something to was industry feels the guess obviously, but the that experienced, with need we're I normal for that activity. pre-pandemic in say would back that back demand we're normal. to There

some a more So much we a was nothing of as not may standard standard early buy, and that this activity. early terms market-driven, activity. the of causing us end promotional offered that's what order That's view but buy alarm. the obviously There's normal and delivery rates. Obviously, program flow experience promotional in

So back to it grew or getting what of season, pool the start XXXX expected it's all it feels we pre-pandemic to feels like out the And environment in expect here from like period. an really right? the we're that that's playing

Operator

Your next Jeff Hammond question comes KeyBanc. from from

Kevin Holleran

We if can't Jeff, talking. you, hear you're

Jeffrey Hammond

Yes. hear now? Can you me

Kevin Holleran

Jeff. now, you We got Yes.

Jeffrey Hammond

Great. Awesome. Okay.

So then income XQ that go the Rest or of I of of sales? want pick sometime up this is on year? kind sales do And just disruption to to kind basis quantify you this World. in from Or just impact you consolidation? back Can lost in and the later

Kevin Holleran

Rest than Europe as order actually there. See little in the overall, the a was our Europe bit of we that less So look we as Europe, QX. said. flow at XX%, down in to was expectation World was weighting

the in QX, were of but were fourth a first we quarter job we team aggressive there outside location on X This that The two we're the locations, view starts where hitting to really us Barcelona. those -- would now. and original running years done fantastic and consolidating the was some there concerned state. quarter. with both right a the there an inflow of about some kind singular fits occurred it necessarily to commissioned that that quarter, this has about really from a We new getting So and of earlier into in schedule there late rates us. was be And into weren't expected order Spain nothing through just be, ago, facility about first

of terms good the for the in to order QX be in So European continues market. flow early -- the

able of that that close quarter to gap ourselves virtue make we're by up full our and this in expecting for -- holding year for guide, we're to first year. created we So the be of

Jeffrey Hammond

had into that because material still I noise? Okay. just you Or some Canada And of anything saw to impact is think numbers where XQ but said timing. enough weak, good you pull Is is that then forward?

Kevin Holleran

a Canadian No. is QX. QX, Look, from that large out the a slipped in of frankly, performance shipment pickup

be So X-quarter if the at on you would period, really Canadian performance over look a Jeff, expectations. it

and fourth So that product a wasn't just offshore built this was quarter. in received is it

to there. mortgage interest call close that have continues up a It So we on up rate concerns market tailwind keep we're the be some we winter tabs Canada ready and and concerns not obviously, to of there.

to there, back. So is impression QX I our don't solid up a be seem stabilizing things want to point. win that give starting is the to which But strong necessarily turning

Jeffrey Hammond

Okay. last And you a for early And just one kind product this set from business that is more of upgrade customers? and Can of then brand-new changes? kind a is any on is of us level on this this just Or then market. you? cleaner feedback how big

Kevin Holleran

cleaning as TAM has over so -- the And has X-year grown has and It's cleaning actually, on certainly automated. technology, pressure. It or it an been CAGR. people we've it as period, something actually double-digit has been of -- category, Yes. suction both really the a from the effect had whole more increased last to said, hand the go I seen this older bit a

a market. So it's into grown large

the a frankly, in But in have there. Shark. Tiger line a very underrepresented the We solid bit category we're

in Jeff. product this line. More automation, a these here initial introduction and come we're great end to to models into key with few market, bring expectations higher building we the our feature [indiscernible] help aspirations the with aggressively to and segment, start So us more have into moving more performance robotic excited on out playing really and strong to great ground really products with

Operator

from comes Saree Your next from question Jefferies. Boroditsky

Jae Hyun Ko

This is James on for Saree.

on the to So gross back margin. I of kind wanted go

quarter gross when margin [indiscernible] lower growth. pricing the sales also So volume looking the having last you last at higher a to despite specifically, and like compared the North quarter much posted America

margin in think we about in America North So should going how the XXXX? cadence forward

Eifion Jones

what we're to able It's very where have Yes, greater where manufacturing with majority technology our see we've we North of the James. we been America. base. the look, It's adoption. pleased achieve in

margin get across those two largest we manufacturing underpinning pillars And base leverage our to the expansion. develop operating do peak of as seasonal period. We our are expect margins cost so see in to QX

there you'd So of modest be in-season move there. obviously, our be to top discounted that too don't specific. tailwind expect expectations margin. that and leverage, get sales buy we margin expansion. with some is margin some to of that there'll I development But want into Plus more a will out mix blends early to is terms also line, pricing, the

I mentioned within last what really to improve done significant amount to of have our business. think X is the understand manufacturing the years what's work a we over base important cost earlier, I

from XXXX, teams management progressively, XXXX, Our West the collapsed back contributor see consolidate in to with benefit in of of but been manufacturing have, very Coast pandemic that's now to margin. a neutralized, A little the through the to cost that's the challenges mass then coming and the And full price over and remaining the Hayward. exit of the as work course significant agile period really the we've that Pomona you margin are due locations businesses, into hard over time. of bit collapse, cost And expansion we've been that a we've lot those starting facilities facility. base, the done acquired we

to say continue I ambitions with to grow got over want of at or time. highly the right we're specifics, to I expectations we've good where now. into get encouraged good but we're course don't So

Jae Hyun Ko

on kind go like inventory. back of Great. to wanted And channel I the

during of like kind inventory think continued in I So Paul quarter. normalization noted the

what kind on you the of perspective? inventory you're comment seeing from can So customer

Kevin Holleran

Yes.

look that us. partners. So say, the exited behind channel would as obviously with experience We our closely destock we the as inventory, at COVID we very is through XXXX we work really channel

channel them levels. we match, as a end with match some be for can in pull through into more desire there to preventing is market, see own stock normal the with inventory if Now more [indiscernible] shipments the outs. judicious our environment their while they

carrying working obviously expense we're additional them. closely So cost. with to There's the

necessarily see So if as serve incentive without was there historically. much to together there's market needing we inventory the as can

you've that possible. working other working in the that as as So with aware and as desire, channel closely be comments fully public to and levels try of we're with partners heard some capital of our efficient

that ] us we're the possible SKUs to as high good places so good I at levels to be internally service as And right channel. to that, something through able [ think getting that reactive right identify to pulled priority are for that's here build the through our what's So the and forecasting at. very time

by So we continue out sales [indiscernible] our the to I of guidance match inventory -- their sales contemplate saying in in And incrementally better guidance with work closely of should with them channel. did and the channels. our some lower levels

working closely some fully are we're that the that with there. aware and of the highlights what the fact channel, of we're just again, actions So

Operator

comes next from Mike Your question Baird. Halloran from

Unknown Analyst

[indiscernible] This on for Mike. is

of Can given most how split you wanted what to So business of which aftermarket? towards take margins impact and different that talk I at about And products mix skewing be? are the heavily kind growth the going. to look impacted a is maybe might

Eifion Jones

in we the Yes. obviously. aftermarket, see mean I what

continue margin of As a tend products. to equipment see need the life, adoption for price high very But great we in end have we as value our this and to items proposition a category, rates of get good those we've for heating attribute strong which lifestyle is to call urgent and an create replacement automation for pool and They higher items, continue occurs have the aftermarket almost previously is journey adoption seeing attributes. lighting core arises. installed protect need you also the the that aftermarket business consumer, controls, this here. we're call those category, continue what when replaced And has to fantastic for products, environment, those categories to see product attributes, take-on those higher immediately

Unknown Analyst

Understood.

I clarification aftermarket? and the as existing considered want something had -- an some maybe I had just is part I the lighting bucket? that I maybe considered of I have just of on part part lighting the upgrade would of amount have, definition. So that be increase pool to but If a break, of Or

Eifion Jones

define categories. four our business So we into

construction New the categories: is to every Upgrade, years. XX remodeled, pool item which the Remodel typically represents X understood aftermarket is three to new I think construction. periodically, mentioned. as you clearly The be has just because

our of expanding that your the [indiscernible] as third you're then maintenance your entirety that XX% represents or classified maintenance. would have base. of of in And defined And have of aftermarket, on our you about pool, If needed aftermarket as the element maintenance experience. upgrading which of we attributes repair. business the we life end is the And that wheel when replacement is

Unknown Analyst

begin time? That's implementation on of spending where the of be Or projects any -- in carrying of of addition going initially of Got believe one roles. is going was And with? excellence? there just a one kind are that helpful. to Eric, is the operational it on and changing he's it. I some COO to Where quick the torch to Are after up be the more this there picking then going

Kevin Holleran

we QX. are done skills brings of mean, latter product to ramp very a competitive it's a in in there's to new things. compelling it. set that here there part. that several experiences We've are make he I volumes But got launches and Certainly, and Obviously, advantage, a sure seamlessly. want

So facilities. there's our demand on placed greater

a XXXX. there schedule year midst We then later this implementation. go of are ERP in and live in There's the

on price gross during is places that we entire here margin on to has drive obviously, the this and obviously, which achieved And obviously, that cost few year a lot to the through but continuing big organization, of a Eifion working a on call. work that. then part improvement these activities of operations touched times last the team neutrality, maintain So morning

So a he high organization. showing work that results lot be of done, to group expectations continue performing entire and to the through on and

Operator

Jadrosich Bank Your last question comes from of Rafe America. from

Rafe Jadrosich

buying home [indiscernible]? the center you're exposure of do between or wanted there little talk distributor, or retail then about to have and differences today? any know Home you're potential related I just you're are one distribution, there? by can impacts but to can lot opportunities And seeing you first e-commerce Depot talk wholesale from trends you The you and then out bit a about SRS ask And Heritage? I the that, a primarily seeing

Kevin Holleran

Yes.

The to market we across of But to primary serve product of some don't historically. there. we shift wouldn't shift there's to first, obviously, that a distribution [indiscernible] channels, kind of the no, channels There trade. to channel say transacted market, rate -- that have see a mix seen is to through committed the continues e-commerce I and channel distribution participated have playing kind out be kind the we're any any has professional we and

the of closed and announcement terms month know we last In deal the yet. between has not Depot SRS, Home all

at X in the progresses. view us which as industry. we see them. SRS Home as They're this and place, expect business TAM their strategies pool the the spoken with very can But impact run going help with on as pool learn which with great that verticals, behind capabilities And brings we've on and the So expand Depot brand Depot they that that in telling overall that, resources to that is more across the plenty to that And interest as a team to have certainly, be remain with -- Home one, independently this has certainly hopeful we're management Heritage we positive and growth they're of team. SRS team obviously. and all really to usual growth of same continue that the

anxious I there, was home of thing much that have have this center your exposure as don't we don't plays question. And So be next We the how them part today, as acquisition and deal the great closely we partner see they occurs, exposure. think expect. work Rafe, a or the so, to over we're can out of that integration with the and year

Rafe Jadrosich

just It remind are of ask copper terms there's recently. what seeing wanted us what the in to side And What could Like opportunity. on you costs? material inflation I be year? key of some is been -- you are And expecting there's this raw you interesting can exposure the there? then on input for

For an to impact expect start you example, to P&L? that like when to would have your

Eifion Jones

Yes.

So we it's -- Eifion.

this are specialty compensating others we some but have cost decreased bit environment think a We've into goods. elevated, is basket I got that in the metals, more copper called coming there year-over-year. year. inflation appropriately our are little which of Obviously, in

X% inflation we've aggregate into that's basket baked our the and we'd think just out of I over expected. got forecast, balance, kind in on playing So as

take have, of talked comfortable right we adequately another And feel year, the through half of processes. against before, about procurement We'll but also pricing primary we're fixed have this the here. as or get least the through season copper, protected look and where we We with current contractual protection into now. the mechanisms, to second we either elevation hedging our feel through we at at in

about any over is start pricing that. But that period. a elevation on year, the we what I to latest great managed got we're that go structures. we've consideration that pricing And to And allowed to we're our market think to X with last need if demonstrate inflation normal. expecting to we for think summer a years in opportunity price/cost reason right have to us correctly be have moving X. notable we we'll we for as a combat October think to be agility. to current And now, price back do to in the Every needs prepared inflation, we're has

Operator

at time. questions with your Kevin, closing further no are There remarks. proceed this please

Kevin Holleran

for Lester. Thanks, thank their like to I'd in Hayward. everyone interest

earnings work, the ahead. deliver talking well Our we around the Please stakeholders second value the Lester, in navigate with employers you the quarter for partners questions, dedication contact follow-up you the resilience look business now any call. our of near-term world. on again is you years and all positioned to and the and and if end forward wouldn't very hard to call. to our possible can have be This team Thanks, challenges

Operator

this today's gentlemen, you concludes and Ladies conference joining. call. Thank for

You disconnect. may now

Hayward (HAYW) 2 May 242024 Q1 Earnings call transcript