Hayward Holdings Reports First Quarter Fiscal Year 2025 Financial Results and Confirms 2025 Guidance

FIRST QUARTER FISCAL 2025 SUMMARY

   -- Net Sales increased 8% year-over-year to $228.8 million 
   -- Net Income increased 46% year-over-year to $14.3 million 
   -- Adjusted EBITDA* increased 9% year-over-year to $49.1 million 
   -- Diluted EPS increased 50% year-over-year to $0.06 
   -- Adjusted diluted EPS* increased 25% year-over-year to $0.10 
CHARLOTTE, N.C.--(BUSINESS WIRE)--May 01, 2025-- 

Hayward Holdings, Inc. (NYSE: HAYW) ("Hayward" or the "Company"), a global designer, manufacturer and marketer of a broad portfolio of pool and outdoor living technology, today announced financial results for the first quarter ended March 29, 2025 of its fiscal year 2025. Comparisons are to financial results for the prior-year first fiscal quarter.

CEO COMMENTS

"I am pleased to report solid first quarter results ahead of expectations," said Kevin Holleran, Hayward's President and Chief Executive Officer. "Net sales increased 8% year-over-year with growth across both the North America and Europe and Rest of World segments. Positive volume growth and price realization, coupled with robust profitability and working capital management, enabled us to maintain net leverage within our targeted range at 2.8x at the end of the first quarter while funding our growth strategies and launching innovative new products. During this period of increased tariffs and heightened global economic uncertainty, we are aggressively executing our plans to support profitability and position the Company for continued growth. With a resilient aftermarket model and strong balance sheet, we are confident in our ability to navigate this evolving environment."

FIRST QUARTER FISCAL 2025 CONSOLIDATED RESULTS

Net sales increased by 8% to $228.8 million for the first quarter of fiscal 2025. The increase in net sales during the quarter was the result of volume growth, the favorable impact from acquisitions and positive net price, partially offset by the unfavorable impact of foreign currency translation. The growth in volume was driven by the U.S. and Europe and the favorable timing of orders.

Gross profit increased by 8% to $113.4 million for the first quarter of fiscal 2025. Gross profit margin increased 30 basis points to 49.5%. The increase in gross profit margin was due to positive net price.

Selling, general, and administrative expense ("SG&A") increased by 9% to $65.1 million for the first quarter of fiscal 2025. The increase in SG&A was primarily due to normalized incentive compensation expense and investments in our customer-care and selling teams. As a percentage of net sales, SG&A increased 30 basis points to 28.5%, compared to the prior-year period of 28.2%, driven by the factors discussed above. Research, development, and engineering expenses were $6.0 million for the first quarter of fiscal 2025, or 3% of net sales, as compared to $6.3 million for the prior-year period, or 3% of net sales.

Operating income increased by 9% to $33.5 million for the first quarter of fiscal 2025, due to the aggregated effects of the items described above. Operating income as a percentage of net sales ("operating margin") was 14.6% for the first quarter of fiscal 2025, a 10 basis point increase from the 14.5% operating margin in the prior-year period.

Interest expense, net, decreased by 27% to $13.7 million for the first quarter of fiscal 2025 driven by reduced debt as a result of the repayment of the Incremental Term Loan B principal balance in April 2024 and lower interest rates.

Income tax expense for the first quarter of fiscal 2025 was $4.3 million, for an effective tax rate of 23.3%, compared to income tax expense of $3.1 million, for an effective tax rate of 23.8%, for the prior-year period. The change in the effective tax rate was primarily due to a reduction in the foreign rate differential.

Net income increased by 46% to $14.3 million for the first quarter of fiscal 2025. Net income margin expanded 170 basis points to 6.3%.

Adjusted EBITDA* increased by 9% to $49.1 million for the first quarter of fiscal 2025 from $45.0 million in the prior-year period. Adjusted EBITDA margin* expanded 30 basis points to 21.5%.

Diluted EPS increased by 50% to $0.06 for the first quarter of fiscal 2025. Adjusted diluted EPS* increased by 25% to $0.10 for the first quarter of fiscal 2025.

FIRST QUARTER FISCAL 2025 SEGMENT RESULTS

North America

Net sales increased by 8% to $187.1 million for the first quarter of fiscal 2025. The increase was driven by the acquisition and successful integration of the ChlorKing business acquired in June 2024, positive net price and volume growth due to the timing of orders in the 2025 season.

Segment income increased by 9% to $43.5 million for the first quarter of fiscal 2025. Adjusted segment income* increased by 12% to $50.7 million.

Europe & Rest of World

Net sales increased by 7% to $41.8 million for the first quarter of fiscal 2025. The increase was primarily due to volume growth and positive net price, partially offset by the unfavorable impact of foreign currency translation. The increase in volume is due to improved operational performance compared to the prior-year period.

Segment income increased by 8% to $6.5 million for the first quarter of fiscal 2025. Adjusted segment income* increased by 10% to $7.0 million.

BALANCE SHEET AND CASH FLOW

As of March 29, 2025, Hayward had cash and cash equivalents of $181.3 million and approximately $216.7 million available for future borrowings under its revolving credit facilities. Cash flow used in operations for the three months ended March 29, 2025 of $5.9 million was a decrease of $71.4 million from the prior-year period cash used of $77.2 million. The decrease in cash used was primarily driven by the sale of $100.0 million of accounts receivable under the Receivables Purchase Agreement, partially offset by higher accounts receivable related to the Early Buy program.

OUTLOOK

Hayward is confirming its full year 2025 guidance, reflecting the implications of the current tariff environment and aggressive execution of mitigation action plans. For fiscal year 2025, Hayward continues to expect net sales of approximately $1.060 billion to $1.100 billion and Adjusted EBITDA* of $280 million to $290 million.

Hayward is excited about the long-term dynamics of the pool industry. The installed base of pools increases every year, providing continued growth opportunities, and the Company benefits from favorable secular demand trends in outdoor living, sunbelt migration, and technology adoption. Hayward continues to leverage its competitive advantages and drive increasing adoption of its leading SmartPad$(TM)$ pool equipment products both in new construction and the aftermarket, which has historically represented approximately 80% of net sales. Hayward is confident in its long-term outlook for profitable growth and robust cash flow generation, driven by its technology leadership, operational excellence, strong brand and installed base, and multi-channel capabilities.

Please see the Forward-Looking Statements section of this release for a discussion of certain risks relevant to Hayward's outlook.

CONFERENCE CALL INFORMATION

Hayward will hold a conference call to discuss the results today, May 1, 2025 at 9:00 a.m. $(ET)$.

Interested investors and other parties can listen to a webcast of the live conference call by logging onto the Investor Relations section of the Company's website at https://investor.hayward.com/events-and-presentations/default.aspx. An earnings presentation will be posted to the Investor Relations section of the Company's website prior to the conference call.

The conference call can also be accessed by dialing (877) 423-9813 or (201) 689-8573.

For those unable to listen to the live conference call, a replay will be available approximately three hours after the call through the archived webcast on the Hayward website or by dialing (844) 512-2921 or (412) 317-6671. The access code for the replay is 13752897. The replay will be available until 11:59 p.m. Eastern Time on May 15, 2025.

ABOUT HAYWARD HOLDINGS, INC.

Hayward Holdings, Inc. (NYSE: HAYW) is a leading global designer and manufacturer of pool and outdoor living technology. With a mission to deliver exceptional products, outstanding service and innovative solutions to transform the experience of water, Hayward offers a full line of energy-efficient and sustainable residential and commercial pool equipment including pumps, heaters, sanitizers, filters, LED lighting, water features, and cleaners all digitally connected through Hayward's intuitive IoT-enabled SmartPad(TM).

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains certain statements that are "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995 (the "Act") and releases issued by the Securities and Exchange Commission (the "SEC"). Such forward-looking statements relating to Hayward are based on the beliefs of Hayward's management as well as assumptions made by, and information currently available to it. These forward-looking statements include, but are not limited to, statements about Hayward's strategies, plans, objectives, expectations, intentions, expenditures and assumptions and other statements contained in or incorporated by reference in this earnings release that are not historical facts. When used in this document, words such as "guidance," "outlook," "may," "will," "should," "could," "intend, " "potential," "continue," "anticipate," "believe," "estimate," "expect, " "plan," "target," "predict," "project," "seek" and similar expressions as they relate to Hayward are intended to identify forward-looking statements. Hayward believes that it is important to communicate its future expectations to its stockholders, and it therefore makes forward-looking statements in

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