On July 30, 2024, Hayward Holdings Inc (HAYW, Financial) released its 8-K filing for the second quarter of fiscal year 2024, showcasing a robust financial performance that exceeded analyst expectations. Hayward Holdings, a leading manufacturer of energy-efficient swimming pool equipment and pool automation systems, reported significant year-over-year growth in key financial metrics.
Company Overview
Hayward Holdings Inc (HAYW, Financial) is a prominent global designer, manufacturer, and marketer of a broad portfolio of pool and outdoor living technology. Headquartered in Charlotte, North Carolina, the company employs around 2,000 full-time employees and generated approximately $1.0 billion in revenue in 2023. Hayward's product offerings include pumps, filters, heaters, LED lights, and sanitization systems, all aimed at enhancing energy efficiency and automation in swimming pools.
Q2 Fiscal 2024 Financial Highlights
Hayward Holdings Inc (HAYW, Financial) reported net sales of $284.4 million for the second quarter of fiscal 2024, slightly surpassing the analyst estimate of $282.58 million. The company also reported a net income of $37.6 million, a 28% increase year-over-year, and diluted earnings per share (EPS) of $0.17, meeting the analyst estimate of $0.17.
Key Financial Metrics
| Metric | Q2 FY 2024 | Q2 FY 2023 | Change |
|---|---|---|---|
| Net Sales | $284.4 million | $283.5 million | +0.3% |
| Net Income | $37.6 million | $29.5 million | +28% |
| Adjusted EBITDA | $82.6 million | $79.5 million | +4% |
| Diluted EPS | $0.17 | $0.13 | +31% |
Performance Analysis
The modest increase in net sales was driven by price improvements, partially offset by a decline in volume due to market declines in the Middle East and Asia, and lower new construction and remodels in the U.S. However, growth in Europe and Canada provided a positive offset. Gross profit increased by 6% to $145.1 million, with a gross profit margin of 51.0%, up 290 basis points from the previous year, primarily due to operational efficiencies and price increases.
Challenges and Strategic Initiatives
Despite the positive financial performance, Hayward Holdings Inc (HAYW, Financial) faces challenges such as an uncertain economic and interest rate environment and leaner channel inventory positions. However, the company continues to execute at a high level, as highlighted by CEO Kevin Holleran:
"We delivered record gross margins and increased cash flow through ongoing operational execution and working capital management. This performance enabled us to further strengthen the balance sheet and fund our growth initiatives."
During the quarter, Hayward completed a strategic acquisition of ChlorKing, a leader in commercial pool water sanitization, which is expected to expand its product offering and customer base.
Segment Performance
In North America, net sales increased by 2% to $241.1 million, driven by price improvements and volume growth in Canada. However, the U.S. market saw a modest decline in volume due to lower new construction and remodels. Segment income for North America increased by 6% to $75.3 million.
In the Europe & Rest of World segment, net sales decreased by 6% to $43.3 million, primarily due to market declines in the Middle East and Asia. Segment income decreased by 12% to $8.3 million.
Balance Sheet and Cash Flow
As of June 29, 2024, Hayward Holdings Inc (HAYW, Financial) had cash and cash equivalents of $215.1 million and approximately $232.6 million available for future borrowings under its revolving credit facilities. Year-to-date cash flow from operations increased by 26% year-over-year to $209.8 million, driven by greater cash generated by working capital and an increase in net income.
Outlook
Hayward Holdings Inc (HAYW, Financial) has narrowed its full-year 2024 guidance, reflecting better-than-expected margins offset by a more challenging demand environment. The company now expects net sales of $1.010 billion to $1.040 billion, including a contribution from the ChlorKing acquisition, and Adjusted EBITDA of $255 million to $270 million.
For more detailed financial information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Hayward Holdings Inc for further details.
