Hayward Holdings, Inc. Q4 FY2024 earnings call

• Celebrated 100-year anniversary, reflecting on journey from tool and die maker to global public company.
• Strong fourth quarter results with net sales up 17% for the quarter and 6% for the year, gross profit margins at record levels, and full-year free cash flow up 22%.
• Product innovations: Microchannel Temperature Control Unit and OmniPro app.
• Operational excellence: Consolidated manufacturing in Spain, invested in automation, and expanded gross margins.
• Customer care investments: Upgraded loyalty programs, launched Hayward Hub DFW, and strengthened senior leadership team.

North America: Fourth quarter net sales increased 20% to $286 million, driven by 5% net price realization, 13% higher volume, and 2% from ClorKing acquisition. Full-year North America net sales increased 9% to $896 million. Europe and the rest of the world: Fourth quarter net sales increased 2% to $41 million. Full-year net sales in Europe and the rest of the world reduced 8% to $156 million.

• 2025 net sales expected to increase approximately 1% to 5% ($1.06 to $1.1 billion).
• Full-year 2025 adjusted EBITDA expected to be $280 million to $290 million.
• Solid cash flow generation anticipated in 2025 with conversion of greater than 100% of net income at approximately $160 million.

• Tariffs and evolving tariff environment could impact pricing and profitability.
• Macroeconomic challenges in the pool industry, including uncertainties in new construction and remodel markets.
• Inventory and supply chain risks, including potential disruptions in sourcing components.

Q: Could you give more color on what's assumed for North America versus international in 2025 guidance?

A: Pricing dynamic in North America is expected to be higher than in Europe and the rest of the world, with FX implications negatively impacting Europe and the rest of the world more.

Q: How long is the typical warranty for products, and is there a replacement opportunity ahead?

A: Warranty typically lasts 3 years for some products, with some SKUs having a 1-year warranty. Products placed late 2020 are starting to come due, expecting replacement opportunities in coming years.