FIRST QUARTER FISCAL 2024 SUMMARY
- Net Sales of $212.6 million
- Net Income of $9.8 million
- Adjusted EBITDA* of $45.0 million
- Diluted EPS of $0.04 and adjusted diluted EPS* of $0.08
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 30, 2024 of its
fiscal year 2024. Comparisons are to financial results for the
prior-year first fiscal quarter.
CEO COMMENTS
“I am pleased to report first quarter results consistent with
expectations,” said Kevin Holleran, Hayward’s President and Chief
Executive Officer. “We delivered strong gross margin expansion of
260 basis points and improved cash flow through continuous
improvement in operations and working capital management. As we
proactively manage our cost structure, we are funding our strategic
growth initiatives and introducing innovative new pool solutions.
The economic and interest rate environment remains uncertain, and
our customers are taking a prudent approach. However, our team
continues to demonstrate the ability to execute and drive robust
profitability despite current market conditions. The year-over-year
increase in our cash balance at the end of the first quarter and
expected strong collections in the second quarter gave us the
confidence and flexibility to initiate a voluntary early debt
repayment subsequent to quarter end.”
FIRST QUARTER FISCAL 2024 CONSOLIDATED RESULTS
Net sales increased by 1% to $212.6 million for the first
quarter of fiscal 2024. The increase in net sales during the
quarter was the result of modest increases in both net price and
volume. The volume growth resulted from increased early buy
shipments in North America.
Gross profit increased by 7% to $104.6 million for the first
quarter of fiscal 2024. Gross profit margin increased 260 basis
points to 49.2%. The increase in gross profit margin was primarily
due to operational efficiencies in our manufacturing
operations.
Selling, general, and administrative expense (“SG&A”)
increased by 9% to $60.0 million for the first quarter of fiscal
2024. The increase in SG&A was driven by increased warranty,
marketing and selling costs. As a percentage of net sales, SG&A
increased 210 basis points to 28.2%, compared to the prior-year
period of 26.1%, driven by the factors discussed above. Research,
development, and engineering expenses were $6.3 million for the
first quarter of fiscal 2024, or 3% of net sales, as compared to
$6.0 million for the prior-year period, or 3% of net sales.
Operating income increased by 11% to $30.9 million for the first
quarter of fiscal 2024, due to the aggregated effects of the items
described above. Operating income as a percentage of net sales
(“operating margin”) was 14.5% for the first quarter of fiscal
2024, a 120 basis point increase from the 13.3% operating margin in
the prior-year period.
Interest expense, net, decreased by approximately 4% to $18.6
million for the first quarter of fiscal 2024 primarily due to an
increase in net interest income from the interest rate swaps and
interest on cash investment balances.
Income tax expense for the first quarter of fiscal 2024 was $3.1
million for an effective tax rate of 23.8%, compared to income tax
expense of $0.8 million for an effective tax rate of 9.0% for the
prior-year period. The change in the effective tax rate was
primarily due to a decrease in the tax benefit from stock
compensation.
Net income increased by 17% to $9.8 million for the first
quarter of fiscal 2024.
Adjusted EBITDA* increased to $45.0 million for the first
quarter of fiscal 2024 from $44.9 million in the prior-year period.
Adjusted EBITDA margin* decreased 20 basis points to 21.2%.
Diluted EPS of $0.04 for the first quarter of fiscal 2024 was
consistent with $0.04 for the prior-year period. Adjusted diluted
EPS* increased by 14% to $0.08 for the first quarter of fiscal
2024.
FIRST QUARTER FISCAL 2024 SEGMENT RESULTS
North America
Net sales increased by 7% to $173.4 million for the first
quarter of fiscal 2024. The increase was primarily the result of
higher volumes along with positive net price. The growth in volume
was driven by increased early-buy shipments.
Segment income increased by 19% to $39.7 million for the first
quarter of fiscal 2024. Adjusted segment income* increased by 15%
to $45.3 million.
Europe & Rest of World
Net sales decreased by 17% to $39.1 million for the first
quarter of fiscal 2024. The decline was primarily due to lower
volume, driven by delayed shipments as a result of the
consolidation of our manufacturing operations in Europe.
Segment income decreased by 39% to $6.0 million for the first
quarter of fiscal 2024. Adjusted segment income* decreased by 37%
to $6.3 million.
BALANCE SHEET AND CASH FLOW
As of March 30, 2024, Hayward had cash and cash equivalents of
$115.9 million and approximately $347.8 million available for
future borrowings under its revolving credit facilities. Cash flow
used by operations for the three months ended March 30, 2024 of
approximately $77 million was a reduction of approximately $14
million from the prior-year period. The decrease in cash used was
driven by less cash used for working capital compared to the
prior-year period and an increase in net income.
VOLUNTARY DEBT PAYMENT
In April 2024, the Company used $123.1 million of cash on hand
to fund voluntary principal prepayments of the incremental term
loan portion of the First Lien Term Facility (the “Incremental Term
Loan B”). As a result of these prepayments, the Company had zero
aggregate principal outstanding on the Incremental Term Loan B as
of April 30, 2024.
OUTLOOK
Hayward is reaffirming its full-year 2024 guidance reflecting a
return to sales and earnings growth driven by solid execution
across the organization, positive price realization and increasing
technology adoption. The guidance range contemplates uncertainty
around global macro conditions and consumer spending, coupled with
progressively leaner channel inventory positions. For fiscal year
2024, Hayward continues to expect net sales of approximately $1.010
billion to $1.060 billion, or an increase of approximately 2% to
7%, and Adjusted EBITDA* of $255 million to $275 million, or an
increase of approximately 3% to 11%.
The pool industry remains attractive and benefits from
sustainable secular demand trends in outdoor living. Hayward
continues to leverage our competitive advantages and drive
increasing adoption of our leading SmartPad™ 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 2, 2024 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 (888)
886-7786 or (416) 764-8658.
For those unable to listen to the live conference call, a replay
will be available approximately two 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
03240328. The replay will be available until 11:59 p.m. Eastern
Time on May 16, 2024.
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, filters, heaters,
cleaners, sanitizers, LED lighting, and water features all
digitally connected through Hayward’s intuitive IoT-enabled
SmartPad™.
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 reliance upon the safe harbor
provisions of the Act. However, there may be events in the future
that Hayward is not able to accurately predict or control, and
actual results may differ materially from the expectations it
describes in its forward-looking statements.
Examples of forward-looking statements include, among others,
statements Hayward makes regarding: Hayward’s 2024 guidance;
business plans and objectives; general economic and industry
trends; business prospects; future product development and
acquisition strategies; future channel stocking levels; and growth
and expansion opportunities. The forward-looking statements in this
earnings release are only predictions. Hayward may not achieve the
plans, intentions or expectations disclosed in Hayward’s
forward-looking statements, and you should not place significant
reliance on its forward-looking statements. Hayward has based these
forward-looking statements largely on its current expectations and
projections about future events and financial trends that it
believes may affect its business, financial condition and results
of operations. Moreover, neither Hayward nor any other person
assumes responsibility for the accuracy and completeness of
forward-looking statements taken from third-party industry and
market reports.
Important factors that could affect Hayward’s future results and
could cause those results or other outcomes to differ materially
from those indicated in its forward-looking statements include the
following: its relationships with and the performance of
distributors, builders, buying groups, retailers and servicers who
sell Hayward’s products to pool owners; impacts on Hayward’s
business from the sensitivity of its business to seasonality and
unfavorable economic business and weather conditions; competition
from national and global companies, as well as lower-cost
manufacturers; Hayward’s ability to develop, manufacture and
effectively and profitably market and sell its new planned and
future products; its ability to execute on its growth strategies
and expansion opportunities; Hayward’s exposure to credit risk on
its accounts receivable, impacts on Hayward’s business from
political, regulatory, economic, trade, and other risks associated
with operating foreign businesses, including risks associated with
geopolitical conflict; its ability to maintain favorable
relationships with suppliers and manage disruptions to its global
supply chain and the availability of raw materials; Hayward’s
ability to identify emerging technological and other trends in its
target end markets; failure of markets to accept new product
introductions and enhancements; the ability to successfully
identify, finance, complete and integrate acquisitions; its
reliance on information technology systems and susceptibility to
threats to those systems, including cybersecurity threats, and
risks arising from its collection and use of personal information
data; regulatory changes and developments affecting Hayward’s
current and future products; volatility in currency exchange rates
and interest rates; Hayward’s ability to service its existing
indebtedness and obtain additional capital to finance operations
and its growth opportunities; Hayward’s ability to establish and
maintain intellectual property protection for its products, as well
as its ability to operate its business without infringing,
misappropriating or otherwise violating the intellectual property
rights of others; the impact of material cost and other inflation;
Hayward’s ability to attract and retain senior management and other
qualified personnel; the impact of changes in laws, regulations and
administrative policy, including those that limit U.S. tax
benefits, impact trade agreements and tariffs, or address the
impacts of climate change; the outcome of litigation and
governmental proceedings; impacts on Hayward’s product
manufacturing disruptions, including as a result of catastrophic
and other events beyond its control; uncertainties related to
distribution channel inventory practices and the impact on net
sales volumes; Hayward’s ability to realize cost savings from
restructuring activities; Hayward’s and its customers’ ability to
manage product inventory in an effective and efficient manner; and
other factors set forth in Hayward’s most recent Annual Report on
Form 10-K.
Many of these factors are macroeconomic in nature and are,
therefore, beyond Hayward’s control. Should one or more of these
risks or uncertainties materialize, or should underlying
assumptions prove incorrect, Hayward’s actual results, performance
or achievements may vary materially from those described in this
earnings release as anticipated, believed, estimated, expected,
intended, planned or projected. The forward-looking statements
included in this earnings release are made only as of the date of
this earnings release. Unless required by United States federal
securities laws, Hayward neither intends nor assumes any obligation
to update these forward-looking statements for any reason after the
date of this earnings release to conform these statements to actual
results or to changes in Hayward’s expectations.
*NON-GAAP FINANCIAL MEASURES
This earnings release includes certain financial measures not
presented in accordance with the generally accepted accounting
principles in the United States (“GAAP”) including adjusted net
income, adjusted basic EPS, adjusted diluted EPS, EBITDA, adjusted
EBITDA, adjusted EBITDA margin, total segment income, adjusted
total segment income, adjusted total segment income margin,
adjusted segment income and adjusted segment income margin. These
financial measures are not measures of financial performance in
accordance with GAAP and may exclude items that are significant in
understanding and assessing the Company’s financial results.
Hayward believes these non-GAAP measures provide analysts,
investors and other interested parties with additional insight into
the underlying trends of its business and assist these parties in
analyzing the Company’s performance across reporting periods on a
consistent basis by excluding items that it does not believe are
indicative of its core operating performance, which allows for a
better comparison against historical results and expectations for
future performance. Management uses these non-GAAP measures to
understand and compare operating results across reporting periods
for various purposes including internal budgeting and forecasting,
short and long-term operating planning, employee incentive
compensation, and debt compliance. Therefore, these measures should
not be considered in isolation or as an alternative to net income,
segment income or other measures of profitability, performance or
financial condition under GAAP. You should be aware that the
Company’s presentation of these measures may not be comparable to
similarly titled measures used by other companies, which may be
defined and calculated differently. See the appendix for a
reconciliation of historical non-GAAP measures to the most directly
comparable GAAP measures.
Reconciliation of full fiscal year 2024 adjusted EBITDA outlook
to the comparable GAAP measure is not being provided, as Hayward
does not currently have sufficient data to accurately estimate the
variables and individual adjustments for such reconciliation.
Adjusted EBITDA outlook for full year 2024 is calculated in a
manner consistent with the historical presentation of this measure
in the appendix.
Hayward Holdings, Inc. Unaudited
Condensed Consolidated Balance Sheets (In thousands)
March 30, 2024
December 31, 2023
Assets
Current assets
Cash and cash equivalents
$
115,873
$
178,097
Short-term investments
—
25,000
Accounts receivable, net of allowances of
$2,990 and $2,870, respectively
351,330
270,875
Inventories, net
220,856
215,180
Prepaid expenses
10,876
14,331
Income tax receivable
5,839
9,994
Other current assets
15,873
11,264
Total current assets
720,647
724,741
Property, plant, and equipment, net of
accumulated depreciation of $99,509 and $95,917, respectively
159,976
158,979
Goodwill
932,575
935,013
Trademark
736,000
736,000
Customer relationships, net
200,001
206,308
Other intangibles, net
91,160
94,082
Other non-current assets
87,306
91,161
Total assets
$
2,927,665
$
2,946,284
Liabilities and Stockholders’
Equity
Current liabilities
Current portion of long-term debt
$
15,585
$
15,088
Accounts payable
75,881
68,943
Accrued expenses and other liabilities
122,575
155,543
Income taxes payable
—
109
Total current liabilities
214,041
239,683
Long-term debt, net
1,078,266
1,079,280
Deferred tax liabilities, net
248,485
248,967
Other non-current liabilities
66,381
66,896
Total liabilities
1,607,173
1,634,826
Stockholders’ equity
Preferred stock, $0.001 par value,
100,000,000 authorized, no shares issued or outstanding as of March
30, 2024 and December 31, 2023
—
—
Common stock $0.001 par value, 750,000,000
authorized; 243,382,758 issued and 214,716,389 outstanding at March
30, 2024; 242,832,045 issued and 214,165,676 outstanding at
December 31, 2023
244
243
Additional paid-in capital
1,083,676
1,080,894
Common stock in treasury; 28,666,369 and
28,666,369 at March 30, 2024 and December 31, 2023,
respectively
(358,110
)
(357,755
)
Retained earnings
590,749
580,909
Accumulated other comprehensive income
3,933
7,167
Total stockholders’ equity
1,320,492
1,311,458
Total liabilities, redeemable stock, and
stockholders’ equity
$
2,927,665
$
2,946,284
Hayward Holdings, Inc. Unaudited
Condensed Consolidated Statements of Operations (Dollars in
thousands, except per share data)
Three Months Ended
March 30, 2024
April 1, 2023
Net sales
$
212,569
$
210,136
Cost of sales
107,990
112,245
Gross profit
104,579
97,891
Selling, general and administrative
expense
60,014
54,887
Research, development and engineering
expense
6,302
5,977
Acquisition and restructuring related
expense
504
1,563
Amortization of intangible assets
6,900
7,617
Operating income
30,859
27,847
Interest expense, net
18,592
19,361
Other (income) expense, net
(638
)
(759
)
Total other expense
17,954
18,602
Income from operations before income
taxes
12,905
9,245
Provision for income taxes
3,065
835
Net income
$
9,840
$
8,410
Earnings per share
Basic
$
0.05
$
0.04
Diluted
$
0.04
$
0.04
Weighted average common shares
outstanding
Basic
214,357,439
212,523,221
Diluted
221,076,443
220,501,177
Hayward Holdings, Inc. Unaudited
Condensed Consolidated Statements of Cash Flows (In
thousands)
Three Months Ended
March 30, 2024
April 1, 2023
Cash flows from operating
activities
Net income
$
9,840
$
8,410
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation
4,310
4,362
Amortization of intangible assets
8,543
9,254
Amortization of deferred debt issuance
fees
1,180
1,090
Stock-based compensation
1,983
2,047
Deferred income taxes
(1,083
)
(328
)
Allowance for bad debts
150
145
(Gain) loss on sale of property, plant and
equipment
(40
)
32
Changes in operating assets and
liabilities
Accounts receivable
(81,753
)
(98,802
)
Inventories
(7,087
)
9,933
Other current and non-current assets
9,743
8,150
Accounts payable
7,364
1,855
Accrued expenses and other liabilities
(30,354
)
(37,030
)
Net cash used in operating activities
(77,204
)
(90,882
)
Cash flows from investing
activities
Purchases of property, plant, and
equipment
(5,932
)
(6,239
)
Proceeds from sale of property, plant, and
equipment
47
—
Proceeds from short-term investments
25,000
—
Net cash provided by (used in) investing
activities
19,115
(6,239
)
Cash flows from financing
activities
Proceeds from revolving credit
facility
—
139,200
Payments on revolving credit facility
—
(52,500
)
Proceeds from issuance of long-term
debt
2,194
—
Payments of long-term debt
(3,230
)
(3,074
)
Payments of short-term notes payable
(1,719
)
(2,214
)
Other, net
(327
)
358
Net cash (used in) provided by financing
activities
(3,082
)
81,770
Effect of exchange rate changes on cash
and cash equivalents
(1,053
)
201
Change in cash and cash equivalents
(62,224
)
(15,150
)
Cash and cash equivalents, beginning of
period
178,097
56,177
Cash and cash equivalents, end of
period
$
115,873
$
41,027
Supplemental disclosures of cash flow
information
Cash paid-interest
$
19,002
$
18,898
Cash paid-income taxes
109
2,384
Equipment financed under finance
leases
132
—
Reconciliations
Consolidated
Reconciliations
Adjusted EBITDA and Adjusted EBITDA Margin Reconciliations
(Non-GAAP)
Following is a reconciliation from net income to adjusted
EBITDA:
(Dollars in thousands)
Three Months Ended
March 30, 2024
April 1, 2023
Net income
$
9,840
$
8,410
Depreciation
4,310
4,362
Amortization
8,543
9,254
Interest expense
18,592
19,361
Income taxes
3,065
835
EBITDA
44,350
42,222
Stock-based compensation (a)
190
357
Currency exchange items (b)
54
(74
)
Acquisition and restructuring related
expense, net (c)
504
1,563
Other (d)
(57
)
861
Total Adjustments
691
2,707
Adjusted EBITDA
$
45,041
$
44,929
Adjusted EBITDA margin
21.2
%
21.4
%
(a)
Represents non-cash stock-based
compensation expense related to equity awards issued to management,
employees, and directors. The adjustment includes only expense
related to awards issued under the 2017 Equity Incentive Plan,
which were awards granted prior to the effective date of Hayward’s
initial public offering (the “IPO”).
(b)
Represents unrealized non-cash
losses on foreign denominated monetary assets and liabilities and
foreign currency contracts.
(c)
Adjustments in the three months
ended March 30, 2024 are primarily driven by $0.4 million of
separation and other costs associated with the centralization of
operations in Europe. Adjustments in the three months ended April
1, 2023 are primarily driven by $0.8 million of separation costs
associated with the enterprise cost reduction program initiated in
2022, $0.3 million of integration costs from prior acquisitions and
$0.3 million of costs associated with the relocation of the
corporate headquarters.
(d)
Adjustments in the three months
ended March 30, 2024 are primarily driven by gains on the sale of
assets, partially offset by costs incurred related to ongoing
securities litigation. Adjustments in the three months ended April
1, 2023 primarily includes $0.4 million of transitional expenses
incurred to enable go-forward public company regulatory compliance
and $0.4 million of costs incurred related to the selling
stockholder offering of shares in March 2023.
Following is a reconciliation from net income to adjusted EBITDA
for the last twelve months:
(Dollars in thousands)
Last Twelve Months(e)
Fiscal Year
March 30, 2024
December 31, 2023
Net income
$
82,117
$
80,687
Depreciation
15,931
15,983
Amortization
36,368
37,079
Interest expense
72,815
73,584
Income taxes
22,630
20,400
EBITDA
229,861
227,733
Stock-based compensation (a)
1,103
1,270
Currency exchange items (b)
914
786
Acquisition and restructuring related
expense, net (c)
12,154
13,213
Other (d)
3,353
4,271
Total Adjustments
17,524
19,540
Adjusted EBITDA
$
247,385
$
247,273
Adjusted EBITDA margin
24.9
%
24.9
%
(a)
Represents non-cash stock-based
compensation expense related to equity awards issued to management,
employees, and directors. The adjustment includes only expense
related to awards issued under the 2017 Equity Incentive Plan,
which were awards granted prior to the effective date of the
IPO.
(b)
Represents unrealized non-cash
losses on foreign denominated monetary assets and liabilities and
foreign currency contracts.
(c)
Adjustments in the last twelve
months ended March 30, 2024 include $6.7 million of costs related
to the discontinuation of a product line leading to an impairment
of the associated fixed assets, inventory and intangible assets,
$2.9 million related to programs to centralize and consolidate
operations and professional services in Europe, $1.7 million of
costs associated with the relocation of the corporate headquarters,
$0.5 million of integration costs from prior acquisitions and $0.4
million separation costs associated with a reduction-in-force from
the 2022 enterprise cost-reduction program.
Adjustments in the year ended
December 31, 2023 primarily include $6.7 million of costs related
to the discontinuation of a product line leading to an impairment
of the associated fixed assets, inventory and intangible assets,
$2.4 million related to programs to centralize and consolidate
operations and professional services in Europe, $1.9 million of
costs associated with the relocation of the corporate headquarters
to Charlotte, North Carolina, $1.2 million separation costs
associated with the 2022 cost reduction program and $0.8 million of
costs associated with integration costs from prior
acquisitions.
(d)
Adjustments in the last twelve
months ended March 30, 2024 primarily include $1.7 million of costs
related to inventory and fixed assets as part of the centralization
of operations in Europe and $1.1 million of costs associated with
follow-on equity offerings.
Adjustments in the year ended
December 31, 2023 primarily include $1.8 million related to
inventory and fixed asset write-offs in Europe and $1.5 million of
costs incurred related to the selling stockholder offerings of
shares in March, May and August 2023, which are reported in
SG&A in our consolidated statements of operations.
(e)
Items for the last twelve months
ended March 30, 2024 are calculated by adding the items for the
three months ended March 30, 2024 plus fiscal year ended December
31, 2023 and subtracting the items for the three months ended April
1, 2023.
Adjusted Net Income and Adjusted EPS Reconciliation
(Non-GAAP)
Following is a reconciliation of net income to adjusted net
income and earnings per share to adjusted earnings per share:
(Dollars in thousands)
Three Months Ended
March 30, 2024
April 1, 2023
Net income
$
9,840
$
8,410
Tax adjustments (a)
(147
)
(1,548
)
Other adjustments and amortization:
Stock-based compensation (b)
190
357
Currency exchange items (c)
54
(74
)
Acquisition and restructuring related
expense, net (d)
504
1,563
Other (e)
(57
)
861
Total other adjustments
691
2,707
Amortization
8,543
9,254
Tax effect (f)
(2,298
)
(3,084
)
Adjusted net income
$
16,629
$
15,739
Weighted average number of common shares
outstanding, basic
214,357,439
212,523,221
Weighted average number of common shares
outstanding, diluted
221,076,443
220,501,177
Basic EPS
$
0.05
$
0.04
Diluted EPS
$
0.04
$
0.04
Adjusted basic EPS
$
0.08
$
0.07
Adjusted diluted EPS
$
0.08
$
0.07
(a)
Tax adjustments for the three
months ended March 30, 2024 reflect a normalized tax rate of 24.9%
compared to the Company’s effective tax rate of 23.8%. The
Company’s effective tax rate for the three months ended March 30,
2024 includes the tax benefits resulting from stock compensation.
Tax adjustments for the three months ended April 1, 2023 reflect a
normalized tax rate of 25.8% compared to the effective tax rate of
9.0%. The Company’s effective tax rate for the three ended April 1,
2023 includes the tax benefit resulting from the exercise of stock
options. All non-tax adjustments are effected at the normalized
rate.
(b)
Represents non-cash stock-based
compensation expense related to equity awards issued to management,
employees, and directors. The adjustment includes only expense
related to awards issued under the 2017 Equity Incentive Plan,
which were awards granted prior to the effective date of the
IPO.
(c)
Represents unrealized non-cash
losses on foreign denominated monetary assets and liabilities and
foreign currency contracts.
(d)
Adjustments in the three months
ended March 30, 2024 are primarily driven by $0.4 million of
separation and other costs associated with the centralization of
operations in Europe. Adjustments in the three months ended April
1, 2023 are primarily driven by $0.8 million of separation costs
associated with the enterprise cost reduction program initiated in
2022, $0.3 million of integration costs from prior acquisitions and
$0.3 million of costs associated with the relocation of the
corporate headquarters.
(e)
Adjustments in the three months
ended March 30, 2024 are primarily driven by gains on the sale of
assets, partially offset by costs incurred related to ongoing
securities litigation. Adjustments in the three months ended April
1, 2023 primarily includes $0.4 million of transitional expenses
incurred to enable go-forward public company regulatory compliance
and $0.4 million of costs incurred related to the selling
stockholder offering of shares in March 2023.
(f)
The tax effect represents the
immediately preceding adjustments at the normalized tax rates as
discussed in footnote (a) above.
Segment Reconciliations
Following is a reconciliation from segment income to adjusted
segment income for the North America (“NAM”) and Europe & Rest
of World (“E&RW”) segments:
(Dollars in thousands)
Three Months Ended
Three Months Ended
March 30, 2024
April 1, 2023
Total
NAM
E&RW
Total
NAM
E&RW
Net sales
$
212,569
$
173,429
$
39,140
$
210,136
$
162,704
$
47,432
Gross profit
$
104,579
$
89,877
$
14,702
$
97,891
$
79,013
$
18,878
Gross profit margin %
49.2
%
51.8
%
37.6
%
46.6
%
48.6
%
39.8
%
Income from operations before income
taxes
$
12,905
$
9,245
Expenses not allocated to segments
Corporate expense, net
7,515
6,099
Acquisition and restructuring related
expense
504
1,563
Amortization of intangible assets
6,900
7,617
Interest expense, net
18,592
19,361
Other (income) expense, net
(638
)
(759
)
Segment income
$
45,778
$
39,742
$
6,036
$
43,126
$
33,276
$
9,850
Segment income margin %
21.5
%
22.9
%
15.4
%
20.5
%
20.5
%
20.8
%
Depreciation
$
4,144
$
3,887
$
257
$
4,305
$
4,088
$
217
Amortization
1,643
1,643
—
1,637
1,637
—
Stock-based compensation
22
12
10
173
162
11
Other (a)
19
19
—
98
98
—
Total adjustments
5,828
5,561
267
6,213
5,985
228
Adjusted segment income
$
51,606
$
45,303
$
6,303
$
49,339
$
39,261
$
10,078
Adjusted segment income margin %
24.3
%
26.1
%
16.1
%
23.5
%
24.1
%
21.2
%
(a)
The three months ended March 30,
2024 for NAM represents losses on the sale of assets. The three
months ended April 1, 2023 includes miscellaneous items the Company
believes are not representative of its ongoing business
operations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240502053332/en/
Investor Relations: Kevin Maczka
investor.relations@hayward.com
Media Relations: Tanya McNabb tmcnabb@hayward.com
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