HAYW - Earnings call transcript Q4 2024

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Operator

Welcome to Hayward Holdings Fourth Quarter 2024 Earnings Call. My name is Christine, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. [Operator Instructions] please note that this conference is being recorded.

I will now turn the call over to Kevin Maczka, Vice President, Investor Relations and SG&A. Mr. begin. may you Maczka,

Kevin Maczka

at presentation good press earnings We has release Financial Investor our Kevin this Senior by we to will and President can quarter been our Vice Eifion XXXX Officer. Jones, and Chief President also call. slide the website of reference joined section Chief I'm earnings this Relations There, find morning, you, that you an issued everyone. and and fourth today posted investor.hayward.com. Holleran, Thank morning, during Executive which Officer;

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

the release during GAAP found the the company will to historical non-GAAP basis. comparisons on can discuss measures Additionally, slide and earnings will measures the discussed All today's appendix in year-over-year this presentation. call measures. our Reconciliations be on made a non-GAAP call, of comparable to be

the turn to Kevin over now call will I Holleran.

Kevin Holleran

welcome begin XXX-year to company's tremendous all a earnings Thank you, of on Award, by our you to of call. in everyone. for XXXX. the Kevin. X presentation of pleasure milestone morning, fourth my founding the Slide quarter Good Hayward's It's earnings anniversary I'll highlighting

the tool company with the as by founding Irving market public on journey in to acquiring XXXXs we our a this we maker pride and entering As are pool immense to global die Davis the business achievement, the Oscar reflect the Hayward celebrate we and from today.

is a services, products and resilience testament served past celebration our customers to with accomplishments. and we've Centennial century, a outstanding our our and For

Our future a for solid creation. value company has foundation growth and

about our long-term for excited execute extremely and prospects are our pool industry the to We the growth plans. ability

for for exceeding on price. Turning X expanded sales and margin to significantly earnings and positive This the year in-quarter solid finished now and to key the to Net margins expectations. our results, increased report XXXX growth, our for early messages. year high pleased upcoming We fourth flow contributions X% Gross demand levels flow XX% profit season. sales strong record today's note and with in quarter full cash buy year of and guidance. for cash I'm robust a volume plus both expansion orders XX%, resulted better-than-anticipated generation. the Slide through full the increased quarter from exceeding increased free presentation

net of cash early and debt leverage reduce us and to capital while profitability accretive completing to X repayment our a acquisition. enabled range targeted flow Xx Solid into deployments for strategic

and proud environment. XXXX, reflect I vendor As like challenging to the customers partners our all And was I'm team on thank our I'd a their successful in year during the Hayward. of performance for global valued for efforts a year. of it

capabilities. customer and in financial solid moment. introduction detail This delivering the excellence of team leveraging results, with initiatives leadership us for our position strategic position to further new in strengthened addition accomplishments discuss more operational expanding I'll executed profitable and In the key senior our included leadership to our innovative a technology advancing products we growth. our relationships,

to XXXX. Moving

year a full We growth earnings on deliver in dynamic expect environment. basis continued operating and to a sales

For year the net X%. expect to XXXX, X% sales full we approximately increase to

in sales in increased sales and million, results to year. in driven price increase a the highlighting a in now quarter Net margin $X.XX. points basis adjusted America EBITDA sequentially By the EPS fourth increased Turning XX.X%. and $XXX year-over-year Europe XX% XX% XXX and by XX.X%. segment, increased robust increased expanded Adjusted North double-digit World. quarter to basis was to of a of diluted full and points and XXX the fourth margins X% to net Slide record EBITDA quarter, Adjusted and profit fourth XX% Rest Gross X, in XX% volume. the

the For on the profitability EBITDA $XXX margin most EBITDA full the full year for to year delivered a strong $X.XX. guidance. XX% exceeding was basis. to net XX% full XX% and EPS increased sales and with our adjusted X% diluted margins increased billion exceeding increased XX.X% recent to each We XXXX, adjusted first for time $X.XXX the year Adjusted gross million,

faced the to share like the on now delivered successful was challenges commitments We our and industry. despite strengthened a a industry. macroeconomic the financial I'd for by Slide our year. to as premier the Turning position on X. some year company pool XXXX Hayward in perspective

several increased the in both support We examples to leader, Two and offering great heat pool the launched for engineering plunge. XX unit technology ability investment innovations product low single-unit a the we our differentiated as are a and of during products degrees water as microchannel innovation. As control it successfully both R&D new commitment industry-first to temperature year. and to cold cool

again monitoring in a Secondly, operational in excited and initiatives by excellence Hayward our demonstrated XXXX, these our gross of the expanding of adoption in proprietary for in and products trade marketplace. and manufacturing investing and continuous Spain, culture has unique productivity professionals, equipment capabilities OmniPro configuration. productivity improvement. app, margins. enabling our We tool consolidating automation long-standing the remote cloud-based footprint real-time a We're

for during excellence. Hayward value we distributor As leadership a customers, to with was separate product and operational our testament both largest and and by performance innovation awards global operational recognized the the year the provide

new We dealer and respective businesses. loyalty strengthen help and side, increased and in care, expand partner to customer technologies trips investment to customer to commercial we our the customer leveraging summit On our experience. grow programs, rewards relationships tools enhance upgraded our

growth trade training Hayward for support market. of and We kind also Texas, facility important in DFW and its dealers launched Hayward this in Hub first a professionals

strengthened accomplished leadership appointing organization. X senior we the by team the to further the During positions key executives within year,

in With to a these continued we and strategies. growth to additions to capabilities, solid leadership, our return right sales including contributed place talent execute I'm the performance, growth financial achievements margin and expanded $XXX enabled convinced These debt us in position net commercial market. million of while to expansion. business. pool acquisition leverage reduce the advancing and completing in our ChlorKing our reinvesting Repaying early This strategic of the the have

now X. to Slide Turning

strategy XXXX, to to Following are At forward our I'd that like review company. compelling products and we at drive shareholder the growth highlight of company's core, value. look a

for and experience road teams practices deliver industry. ownership. Our setting to the are driving product maps to of automated of energy-efficient, the best pool increase capturing enjoyment are actively global designed water innovative, the trends, and and solutions Leveraging engineering and transform management the innovation pace our

We and commercial a advocacy the in To sales, us enable in brand, service this, investment train well professionals. technical support, are key partners teams teams category. commercial further and and acquisition as growth. The solutions for our with customer creating focused relationships professionals our professionals Organizational trade to our Hayward to incremental investment allow pool as value-added driving ChlorKing develop product trade was strengthening marketing develop and our new continue turn, our on to new in changes Hayward. for attract

introductions. its additional see with focused to with performance this pleased grow new many opportunities leadership category and are product We and

have our industry. water expanding flow existing Hayward, to opportunity integrate ChlorKing UV control are into into water valves now to with cross-selling and engineered systems a in our identifying opportunities we the broad We addition we core treatment team. As specify chemical thermoplastic and

already robust expansion a from proven margin to levels. drive ability have We

leverage Specifically, nearly for by utilization our of gross strategy. profit XXXX basis long given margin XXX XX.X% pandemic. cost points proactive and despite Productivity basis and driven XXX points since term, of opportunity resulting after expanded the last X margin upside as reduced higher-margin gains pillars industry the our products, volumes margin a operational in further current the to over low see capacity technology price over mix the excellence key levels years We management. the X from culture, normalized our operating

investments to to strategic emphasizing highlighted a and and complement and Finally, before, approach commercial opportunities footprint acquisition our offering, as maintain we've balanced allocation, organic we geographic capital growth relationships. disciplined product

growth the with drive Eifion And right to call financial In to to in more the turn confident our strategy profitable over returns. Jones shareholder in like discuss compelling we summary, I'd results have detail. and I'm that, place to

Eifion Jones

Thank you, Kevin, and good X. morning. I'll on start Slide

with expansion very stated, fourth cash financial Net increase pleased sales we and generated and exceeded our margin are Kevin quarter free outstanding As performance. We delivered flow. better-than-expected expectations.

profit increased X% points the and positive in the basis EBITDA for fourth to acquisition the XX% million. million June. net EBITDA to in contribution fourth of increased increase quarterly detail. Net was basis in a year-over-year XXX in a sequentially of X% Adjusted the a to volume, price driven This XX% quarter adjusted margin XX% realization $XXX increased Gross million. by XXX to points and was from points $XXX completed record the at in Looking profit results and Gross fourth XX.X%. ChlorKing basis quarter, XXX XX.X%. more increased $XX margin quarter sales

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

by us largely to care X% with XXXX, contribution margins exceeding full was XXX $XXX X% most profit and volume million, $XXX for Net exceeded from increasing X% increased points prior for [indiscernible] on normalized the increased the the the billion. to increased for Turning annual results. low selling to full and EBITDA comparable X% our result and XXX to price XXXX commitment customer increased adjusted Strong our basis increased to a innovation. and growth review margin increased XX% enabled X% fiscal research now year margin higher points ChlorKing ChlorKing SG&A $XXX by Slide in to development to a acquired a In basis of our year XX% million profit growth to for we for profit EBITDA XX the to incentive a to driven million. $X.XX investments compensation $XX year in XX% and Gross time first expenses engineering acquisition. in business. Adjusted reinvest to the basis. million, full Gross year the sales to This support realization, year XX% positive guidance, by year, driven SG&A. recent XX.X%. XX.X%, relative investment

in XXXX. rate XX% tax was XXXX in for the increased diluted full compared year XX% and to XX% to $X.XX Adjusted effective XXXX. Our EPS in

discuss reportable segment our I'll Now results.

segment buy for XX% demand the of Slide robust pool primarily in the U.S. to by XXX results adjusted a sales increased a by and net $XXX volume points XX% higher Turning Canada. in reportable realization, driven XXX the in-quarter The acquisition. North points X% Net increased for volume sales upcoming segment million, plus income quarter XX% early XX our quarter, and XXXX fourth X% from for the review ChlorKing margin net the XX.X%. driven XX% to profit America increased margin basis was and increase increased Gross to increased strong XX.X% demand season. to basis robust price in

quarter segment and profit the XX.X%. translation. by Net Net XX.X% favorable income offset $XX X% and benefited Turning from increased for World. of in sales margin volume, of World pricing higher increased sales Rest Europe Rest and X% X%. was net to increased currency partially to X% Europe margin Gross Net adjusted from million. and X% was X% sales foreign

by a U.S. reportable volume, driven America XX%, increased and X% net X% from results and $XXX contribution for the and ChlorKing. in Canada respectively. for XX Slide increased a X% to to Sales year. the X% North plus of price higher our sales full million, segment Turning review

increase with XX.X% margin pricing of points and income improved adjusted XX.X%. million, profit segment XX% World in and full We X% offset income We by are by gross basis in Rest approximately segment to margin exceptional X%, profit Europe points of with profitability encouraged XX.X%. Rest World, performance up Canada. margins net In reduced for volumes. $XXX to reduced the reduced margin was and adjusted X% Europe and XXX The of lower up year basis sales X% Sales a was XXX delivered the to Gross net XX%.

improve throughout of and XXXX the signs performance to to pleased fourth in the segment took are quarter. see of steps improvement We this

leadership senior in We operating new going to model trends sales margin forward. simplifying and result expect our appointing the proactive actions, including improved and

of review sheet XX balance and flow Slide to for highlights. cash Turning a the

improved and $XXX XXXX year million, XXXX, end sheet our the and with of of debt equivalents range of in availability our flow cash liquidity the We under are credit the adjusted to to and at the million. Total including with was EBITDA million $XXX target of at performance facilities cash year. X balance pleased $XXX plus short-term Xx. the X.Xx during X.Xx strong at of investments consistent Net very from improvement the to significantly end end

no undrawn have maturities We in the in matures near-term and term The ABL debt. our on matures XXXX XXXX.

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

rate the of Overall, average global are balance Our interest our quality cash we sheet. on for earned the year with X%. was deposits pleased

to Our business EBITDA flow below to year year the increased was prior full free characteristics Full timing. in to $XX driven continued which million working and Cash million has operations increased due from XXXX million year XX% $XXX management. capital for cash of Free CapEx due XXXX. generation strong to $XXX flow growth earnings, by increased cash investments. the XX% high-quality support flow project

on now to allocation capital XX. Turning Slide

disciplined As shareholder maintaining take returns maintain Kevin a policy growth leverage. approach, a investments we prudent and while balanced and strategic financial discussed, financial emphasizing

to addition growth to pursue our additional continue We opportunistic acquisition repurchases. to augment share opportunities organic in

Turning XX Slide now for to the outlook.

introducing solid the technology are execution adoption. guidance across and and earnings by driven positive realization reflecting organization, price continued We growth, XXXX sales

growth XXXX, Hayward the expect to construction the billion with modest increase volume $X.XX to to approximately of discretionary X% in maintenance For fiscal elements in reductions outlook reflects billion. $X.X sales new to upgrade. X% aftermarket This nondiscretionary year market, remodel and more net modest

necessary net does consequence that to on as price pricing any approximately positive become of based tariff X% pricing announcements a include a of expect We the environment. actions contribution the X% year. may new evolving for This not prior

with to evaluate we'll respond needed. continue chain and actions We as supply situation, and appropriate the pricing

is business Our seasonal.

We with expect with of to full million in normal consistent the million. fourth $XXX second the year. We seasonal strength XXXX generally quarters and adjusted quarterly anticipate the prior year $XXX cadence EBITDA

again net million. conversion solid We also of greater in than income the of approximately flow at generation cash with XXXX XXX% $XXX expect

environments the We are confident remain particularly outlook the and positive pool successfully the to our very in ability about in growth industry, execute of strength for dynamic the long-term aftermarket.

the back call And to with turn I'll now Kevin. that,

Kevin Holleran

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

let am to that close, strong had I We quarter year throughout proud how reiterate for a successful team's we Before performance expectations. a exceeded thankful a XXXX. me finish the with and fourth

For growth cash the to fund year, strategies. we strong delivering allowing growth, impressive margin expansion to returned our flow, sales and us

about are and in longer-term earnings our XXXX forward, expect we sales Looking continued growth and extremely excited prospects.

the our XXX-year year. to in ready We creation. I'm now confident strategy place will throughout results right compelling be have and line to With talent celebrating open that, the value for we financial anniversary questions. drive we're the and shareholder

Operator

Instructions] please [Operator for moment One while poll questions. we

comes line Wolfe of Coe Nigel Research. with first the Our question from

Nigel Coe

Congratulations XXXth on anniversary, anniversary. the

dig XX% the just volume of So in just maybe growth a I America to kind in wanted deeper on quarter. this North bit

but buy. demand strong early in-quarter strong about talked also You a

the So the strengthen strength consider we quarter. I'm XQ? on of from just [indiscernible] saw should on end there's back any XQ wondering in you that in can the kind if way And there maybe any impact early is we buy of

Eifion Jones

as had in-quarter good It was to North is mentioned, mean America. quarter Yes, demand again, QX. fair good volumetrically overall, up I we a were XX%. you in It period that say Nigel. we in a

little buy XXXX. Our shipments was bit a our were and ship orders important in to to it's Net of year-over-year. demand. we early due than really But 'XX understand proportionately in-season up did in less price that that early orders buy we stronger

on positively impact price. expectations, translated the better North in little positive than and a Canada. has earnings that So America a which was affects FX bit obviously

does consequently to XXXX. year. early up, balance for strengthening stronger, would mentioned component. fine structurally the evaluate of probably demand, coming we environment the appropriate the that into as similar a And of of remarks, to in-season into we a I the buy to XXXX sheet But backlog as to enabling Because expect the stronger. stronger throughout you due continue set to it's were quarter. we obviously, bit flow our cash prior margins prepared in remind think price I QX very we fully It helpful. was that say, be step

Kevin Holleran

regions. on the opened -- of underpenetrated these the the put commercial Dallas Worth that that to I on activity add invest just some nice and in some I growth related of circumstances moment. investing touched some app Nigel, first owners. upon. QX, but demand just marketing specifically the stronger for the an that's throughout launched necessarily the did pool just on QX, QX there acquisition volume I'd hub. for, a any drive delivered in is achievements our also would was the finer And of We like many hurricane while some in-quarter business, and some delivering accolades some ChlorKing a Eifion to products the more a in that We to some pause to beyond year, hope industry point new on had aren't receiving was there that impact Hayward in things the on the some and OmniPro just look us to in high-value had fantastic sales first side, opportunities. our market the Fort presenting cross-selling R&D in

North X% that, net all of my in Financially, of XX% prepared I XX%. drove of in said flow free X% growth sales adjusted as cash of America, -- EBITDA in remarks,

delivering to be which sure margins, about really gross talk So north Q&A, of. is I'm a further of XX% proud we'll in here record the something

X-year But EBITDA XX% growth. in over adjusted delivered X.X% XX% sometimes pool last a on the U.S., and standpoint, same over we've that including XX% overlooked. sales, now, gets from CAGR So the this of net period X commercial with

of. nice growth some again, over great numbers past strong to quarter. a was a it and proud be X the So year

Nigel Coe

we've little tariffs want touch but because the and some Yes. headlines the come remind on some got well, impact, China, in bit new headlines March, hurricane I to us in -- No where to -- are. the type you Kevin, the on if just back could got we've Q&A, Canada. of I'm tariffs on a maybe Mexico exposures we'll wondering just import probably early question. your on did

Mexico. I but no think of bit China there's a

So just just we maybe rebasis today. where stand on

Kevin Holleran

Yes, let me touch on that.

the some I would of net remaining, of XX% it, from say either directly thing that cost in out operations. first American sourced in America. European of sales China North operate roughly produced or I So call goods XX% would be are we The products North is facility a guess our

good It's to get standpoint cost X a around arms Tier harder So our there. would X a we Tier understanding of have components. little and goods from completely be supply

of Our working supply across But is clarity haven't really went this that around live is X on that. We was from morning as diligently more took to to chain some really I on is we fully February goods facility, get of Mexico China, Wuxi our have goods yet. that just impact finished know Canada. something focused and team X for continue that terms a exactly -- some of or we from clarity that out more call X before Tier effect a know Tier on X. XX% the in that. came digested that get Mexico there finished we and what Tier

there's So with at point this don't believe Canada. much we impact that

think we believe be been think of the at impact either. in that the that, that, a this and Our to sizable we there, our reciprocal And Nigel. more don't steel is aluminum, to be then understanding have I by determined equipment that's impacted some will don't news point, pool business but the tariffs --

Eifion Jones

protect price on We're to we in. identified in impact, any tariff add, through. price increase, I everything react the to put demonstrated we've to would Nigel, we're cost prepared that learning, the guided fully put periods ability tackle profitability past the based so to just

Operator

from Jefferies. Badisky question comes next line Our of Saree with the

Saree Boroditsky

margin but year. takes So puts next obviously, guidance gross it the just about outlook? in implies with Could exiting strong about year you And included performance? flattish the and talk you're looks like that what thinking about performance, margin are margins EBITDA how

Eifion Jones

When of basis XXX I growing line, in you've points, say, Yes. XXXX and expectations from basis. margin adjusted little down around at X-year we gross to our expected. adjusted would the bit margin, basis What we really at better stack the runway XXXX important we had points into look look and a it's think gross great a respectively, look, line than guidance XXX it and I got built performance the EBITDA the year, a

look X-year always linear. adjusted of being us midpoint So pretty XXXX, overall Adjusted and and that term, around have I progress. EBITDA about and it make to the good We've growth more in conversion. not the approach talked in great invest above over We're rates really to particular But point. and a at make pragmatic the some taking 'XX growth XX% at we're We'll growth experienced a 'XX, stack for subsequent progress. margin you the proud is think rate we is both at the medium We'll this EBITDA conversion bit of margin sales conversion. X%. we're

Saree Boroditsky

That's aftermarket, provided you maybe helpful. on resilient remodel. some and new the weaker nondiscretionary And then color

quantify embedded guidance? Just about the how in markets thinking you're limited given those volume

Kevin Holleran

Yes.

at kind a again, greater or to look revenue the built. -- sales, from goes already product of as break the our derived XX% that the is than that is a on meaning aftermarket, down net -- pool pool we So of

a point, really teens north renovations. say our under goes our resilient, that's to with That of say there very of we and remodels So feel rates. XX% construction. interest that something that elevated new is in revenue, be [indiscernible] percentage again, primarily reliable. We rates, is percent At the very aftermarket, high that, to derived along would pressure. larger overall revenue of scale But this of we from XX-plus continues interest through of nondiscretionary would and

year see Saree. think in nondiscretionary will of flattish under pressure, that of half, the full this based business, pressure, to what data we And that's out of least coming keep a saw at very upon kind point, our first XXXX, eye what we be that look, continue under that we at close permit we the for on, XXXX to we As 'XX. of really elements slightly in stay is down

Operator

the of line next with Stifel. comes Andrew from Carter Our question

W. Andrew Carter

of just of kind I to underlying. warranty circle is reset expense, higher right of want X-year of this the look through expectations. if XXXX, to of kind back back in the basis also I initial years, would guidance. take I get But down incentives X terms kind just pike of -- guess the us you at and kind SG&A kind

So I There's Europe. in that's [indiscernible] and plus assume a here fourth takes fully including for in gross lot built a . of margin performance, the puts the quarter one-timer

you the just it help of So just gross kind flow-through us understand SG&A? can Is margin why pressures. stepped-up isn't stronger expecting next you some just year? Are

You've from cross got Just tariffs the Is extra any in it there? currency here? Canada? help

Eifion Jones

got I quite last would were second of results we the we're approach. from Again, of Andrew, half say, operational our in margin than We year, a improvement and pragmatic those. lean bit XXXX better cleaned expected. initiatives a taking The after in

We a bit gross able the earlier realize margin also into little were to line. synergy acquisition the of benefits ChlorKing

of these in XXXX. So results accumulating great all

XXXX XXXX management X-year ending to internal expect a exactly where it would little from basis, I It's accelerated a is here we're X-year adjusted it at just Again, of the within look and the as [indiscernible] into look for guidance expectations. midpoint end of from at the EBITDA to the 'XX rates, gross where flow-through growth stack the team the period. both to basis you If baseline our be. at look we, all our estimated bit EBITDA, an ask you sales of conversion the 'XX stack on to

business. making are investments the We into

expect publicly SG&A, into full acquisition, out well. run You're the customer expecting 'XX also results to the than selling implicit modestly. through XXXX I great rate terms conversion business, X we gross made But focusing and of side business, have XX% as in guide in Obviously, the as margin X-year Good in year a SG&A XXs. and terms XXXX, down in of years how into of adjusted to play of side SG&A particularly to with at rather would from in growth, stack investments talked basis, 'XX modest point in expenses EBITDA. 'XX, in I 'XX. acquired margin consequence low look We success experience right we each at please we improvement about we're these gross out but will it of individually. again, We that exactly the initiatives. the were it the to a our ChlorKing year the in segment had marketing down before, to corporate come rates

W. Andrew Carter

kind capital on expectations -- -- kind getting of of stateside flow the this how for then on plus in it's my there's to what's working there's capital your I of not next about de came high? stock. outlook working well an headwind kind working safety coming kind year, with free strong stay here that taking lean almost. you're conversion of math, know minimis anything that kind surprised some capital apologize. the can as your of And of Understood. capital from but ahead of Kind the year. is and how But side of operational inventory pretty cash [indiscernible] it's working improve is continuing -- just just kind the

Eifion Jones

Yes.

And improvement. Look, several the evaluate We very our Okay. our working on capital Look, working had plus around conversion saw of cash conversion. improvement cash focused days, days. capital accounts initiatives metric cycle, which is we our minus payable reducing our in inventory we've absolutely. initiative focused AR a state days

the the days stepped end right have right in from place. right terms of the at to Again, the of end the our X we time make a days, we down products sure around inventory, lot XXXX. focus In inventory of

before. that say me heard You've

We receivable, We that net days payable call reduction meaningful in accounts initiative, discrete enabling accounts rationalization days successful I'd initiatives, reduced our which call also metric. year-over-year. have out out several is SKU our inventory also over of a XX took reductions. terms But

more So we and in 'XX continue 'XX, we've think in achieved capital what Hayward the team we more of team to from to very initiatives. the see appreciation shout reductions. And use in I'll is to good working focused. capital got results collective do here. they much working Again, here to out achieve work cash the

Kevin Holleran

of product reasonable all our able we seriously times I'll our just to that, market really to be and point the that get doing out, to lead ability supply in while take very Andrew, commitments.

to capital working on operational of is continue while of overall the So be continue our continuing supplier to channel to excellence a partners. from work winning these accolades mission down driving some and choice hopefully

Operator

Our with of Baird. line Mike next the question comes Halloran from

Michael Halloran

So on you seasonality just pre-buy. the think I the response to I clarifying comment made in question of -- earlier impact assume the

that than I mentioned the 'XX. take in 'XX was in was think lower you prebuy rate it

by cadencing could that? you mean And related, normal process, relatively that front through year stable demand assuming -- process are the of works Is from that just of then the history? you perspective? clarify how prebuy volume in a So what thought thought the things relatively then the is versus half the is

Kevin Holleran

we ship as buy early in our with an partners the it incrementally did from channel that of were from pleased participation standpoint, higher saw first response less in there. in year-on-year. was XXXX. was we Eifion I And the From than that we standpoint, we a percentage think mentioned that XXXX

for across we're with entire do moving a the So our into as But larger covers an we have you slightly And quarter. order never that the trend that markets. as starting of backlog year. we're presents us all new looking the a having warming luxury March, know, file

quarters and what We we're one as you in it in know, QX, but than So QX, Mike, early don't QX. seasonality softer quarterly, out the plays Again, normal is as you answer is for buy we sales on less seasonality. guide of the can QX else is that how out. expecting

would somewhere calling, full to the be we're for seasonal be. year net normality XX% QX on again, what sales range So of guide in our that

Eifion Jones

seasonally add we that's approach with I quarter would the last campaigning. do legacy I full the overall, overall not sales, very a less prior is into of to point just how QX some which early shipment one to as construct Kevin larger campaign much may of luxury as said, we But you the we lowest add sales. when the is just XX% which We of in as coming QX, typically buying backlog normal. XX% a Typically, been than here. would do as year year, quarter get of I'll QX into to was -- slightly percentage -- of QX typical 'XX due guide year. And

Michael Halloran

-- then at bottom And sort -- if pools of helpful. bottom new super housing the the I was or here. new a second is are starts one, construction know That Great. you at the

mix take the of at attachment year, the things do too bit housing rate any pools homes, a of through new on of but house noticeable the if typical rate side If if a probably is any now? the percentage of on new little you a short you you a moving work size right relatively history, or as seeing start size, given of see or little bit lower sample with the seeing versus disassociation difference look pools the the you're homes you curious

Kevin Holleran

Yes.

not has I this attach single-family starts that construction is high when And big don't more have historically BI on, What to more and became X of year. think of rates would anything. pool that single-family another been XXXX, XXXX. I we as new say lower there's course, much home rates between more clear know Mike, standpoint But seen do being staggered it's home existing from it's at so just you correlation to we're less know, year final I do but on home become in you levels last would lower starts, new driver As that to construction we number that and attach with XXXX. new know, that we work XX,XXX is turnover. as a us as built was yet that even as range, that starting and pools of construction, in And in new number. assuming much believe that look that back

Operator

the of comes KeyBanc. Jeff Our Hammond question line from with next

Unknown Analyst

on Jeff. David This Tunneling for is

color up Is demand color follow commentary. recent the repair on to it there us Could hurricanes? give some you what helpful. in-quarter the look think sell-through on like from it? driving and benefits what would was Just be Any you trends mostly

Kevin Holleran

growth that partner occurred Yes, in the some does activity of market had meaningful, some was hurricane in in benefits. I that last that believe repair to the specifically. in-quarter indicated point Florida do I market that think QX week large had which A just channel

So, yes.

say fourth region highest of in was to prioritize So key inflow for us terms order have I that an shipments. did priority hurricane that us. quarter, impact was for shipment would in We activity

homeowners activities support the impacted repair areas, to So in were the and looking we David. rebuild in the

Unknown Analyst

of your international the entitlement what with impact margin then us gives the on the XXXX, color you give on And is off goes could us that of the thoughts kind here and margins noise maybe give peak? just in longer-term Great. into away? that, well you moving what margins the inventory you Okay. some then size the think confidence maybe And

Eifion Jones

Dave. QX, XX, we margins compression of and I'll some items and were look, both Yes. weren't one, of the that They in inventory in Yes, QX repeat. take onetime discrete World events, material. weren't Europe which some Rest which had

the not mover margin, did [indiscernible] going particular those be full needle quarters. type impact to they're year for big they but overall So a

World growth in profit line. We at the year-over-year of Rest are at looking margin and gross Europe

focus remarks, here to As some selling we consequential have there. manufacturing leadership line we're initiatives, of particular in looking some in on Kevin and region change, his structures targeted mentioned [indiscernible] footprint, consolidation at cost of materials our the and product

But a don't lot between between change progressively some to close opinion, never American projects We to to will structural North Rest as in me. of I in which to World, our quite but ambition the a underway Europe it's of the activity. a see aggressively think grow. close -- margin but will it 'XX, in it, equating excuse structure do differences the make gap market. are going gap, there and we're gap step So margin have the got close market, an

Kevin Holleran

-- some a and an business, to from XXXX supply Europe, on really leadership was have of role. things some ex-pat feel -- just World Rest the Eifion benefit our in year of with touched in We some the transitional and see chain undertaken, kind lead yet still we're we're strength. full I for that that bench of ways changes do

area fits to we out then Barcelona, role we consolidated presented consolidated just mentioned, some to role a simplifications Engineering that which headwind there. there and operating were location I G&A aware, a exited a nice in the model new facilities, We footprint standardization, I single be some of location. year that product a there. that Greater one in into is think you're back-office business, in Madrid of ongoing the drive which one altered David, bit addition going into and line some little top global starts underperforming And And just Chief the the consolidating introduction region to some in XXXX. through

performance and the sales net the We're sitting XXXX, that's with pleased So not going progressively overall get margin or still. to forward. we're not in moving necessarily better

Operator

Our Sachs. of next question comes Brian from line Goldman the Lee with

Unknown Analyst

bit tech or just we world? a second on a Or rationalization. you or is do This able Or could Would SKU products. versus color on at how potential line or Nick ongoing? give mentioned quarter, think that? could or as more so quantify possibly here. on how you And Brian top on more little for headwind be you some to much half? this Or lower all this tailwinds also Is of is U.S. the be XX in up half this to about if margin to first well. any more retiring follow of just redundant rest this Last is

Eifion Jones

much be position, months, of a aspects looking in at level. of continue statement quality We've it doing goods We're and now program Certainly, maybe the the obviously our raw expected rationalization. finished our into agile at at more Yes. X lean made SKU top all and to the headwind both earnings initial to inventory. inside income line. We're We're SKU structures, been very to particularly this a level of good have and about material the improve We've the years. to not structure capital working for progress. XX

the products, products, legacy promoting raw We to the current to negative implication no on keep the top warranty of focus to line. moving continue products We technology-based have get with for When out more again, purposes. to obviously, legacy good some obviously we finished materials.

look opening structures play. our do material the material gross they more looking to to are could time. do continually to of the as is we be manufacturing to giving in platforms. platforms, But be accretive structures. at course play finished legacy from other not of raw the have the will provide common top up materials, common promote and And platforms as initiative in across what get all in rationalized that [indiscernible] raw margin to over in have line common of to around say the accretive We're initiatives WIP will Our away we can guidance margin. technology-based how the as that's globe facilities, those what time we all raw to of over an that more this course Hopefully, be specific as goods we and than well

Operator

Our Jadrosich Bank the from next America. line comes of question with Rafe of

Rafe Jadrosich

changes? Can wanted think Also, carryover assumed to included you sell-through? guidance that growth a channel what's I a on is more ask few what's Or versus just give little we it's color restock XXXX M&A then or just any XX? any should international? expect that is is assumption volume there there? Should destock America there for all we questions the And for assumptions. North the on

Kevin Holleran

That June our of of in closed guide end X% was terms the about XXXX. In in right carryover. there's at ChlorKing,

year will carry half So over.

reductions expecting As partners, some XXXX, modest our would back having In then I'll inventory we as that that some with way the additional in terms channel over positions hearing what current from other XXXX, levels, not perspective say we work is or turn in of inventory days And really we're our one channel or in segment guide after [indiscernible]. inventory, they're anything on pleased we're channel to hand. in with that a for their right?

Eifion Jones

of will negatively Europe weighted higher to towards implication, say to X% a world. World. breaks is in overall America little Rest and X% overall more than FX be the bit will pricing the minus of which in X% guidance over and to dynamic down and be rest price Our Europe Hayward a North

guidance, Rest movements X. when lower and you by midpoint in North roughly think say at overall the Hayward higher and America Europe single-digit of between about for in World So I'd X%,

Rafe Jadrosich

really and as when products is of are to XXXX, That's that into are really helpful. just XXXX, to opportunity even we or then warranty long And come in lot you replacement benefit go volume starting we a lasts? for us -- off typically had your you XXXX. a where can you just now either point 'XX the would there your warranty maybe coming And remind strong in how then

Kevin Holleran

I product for SKUs. some which years when omnichannel a X-year online some WX of differences, line, of would are period for through warranty trade but say SKU our really or the That's on would more those specific X and There then be products rate. sales sold

on the XXXX some with warranty the through started starting that pandemic product yes, when the to of I volume. So placed, market late we're X-year, impacting period call X-year really think standard move was it, that

in start So we due to to that come years. coming the would expect

Operator

like Mr. questions turn you Holleran, the floor to this for I'd over to at further no time. comments. back have we closing

Kevin Holleran

partners closing, Thanks, In world. Great. and Christine. to employees sincerely I'd like valued the dedicated around all thank our

interest excited you success. your may forward hard XXX Your follow-up and the the and talking driving call. We've look you years, the passion now about Hayward. for end foundation and if more you work, team opportunities our built first first Christine, call. are contact you unwavering questions, our that the and Thank Please growth couldn't to strong behind any lie be earnings for we force a in in value ahead. commitment creation have our quarter again on to I

Operator

Ladies and does gentlemen, today's this conclude teleconference.

and participation, You your have for at this may you disconnect your wonderful lines day. time. a Thank

Hayward (HAYW) 27 Feb 252024 Q4 Earnings call transcript