Hayward Holdings, Inc 10-Q for FY2025 Q1
Hayward Holdings, Inc. (HAYW)
10-Q
2025-05-01
For: 2025-03-29
View Original
Added on
April 12, 2026
About this 10-Q
Hayward Holdings, Inc filed this 10-Q on May 1, 2025, covering the quarter ended March 29, 2025 (FY2025 Q1).
Headline figures
Quarter ended March 29, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $228.84M
- up 7.7% from $212.57M a year earlier
- Net income
- $14.33M
- up 45.7% from net income of $9.84M a year earlier
- Diluted EPS
- $0.06
- up 50.0% from $0.04 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended March 29, 2025
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission file number 001-40208
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of
incorporation or organization)
(Address of Principal Executive
Office)
(I.R.S. Employer Identification No.)
(Zip Code)
(704 ) 837-8002
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
| ☒ | Accelerated filer | ☐ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The registrant had outstanding 216,287,902 shares of common stock as of April 29, 2025.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q of Hayward Holdings, Inc. (the “Company,” “we” or “us”) contains certain “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. Such forward-looking statements relating to us are based on the beliefs of our management as well as assumptions made by, and information currently available to, us. These forward-looking statements include, but are not limited to, statements about our strategies, plans, objectives, expectations, intentions, expenditures and assumptions and other statements contained in or incorporated by reference in this Quarterly Report on Form 10-Q that are not historical facts. When used in this document, words such as “may,” “will,” “should,” “could,” “intend,” “potential,” “continue,” “anticipate,” “believe,” “estimate,” “expect,” “plan,” “target,” “predict,” “project,” “seek” and similar expressions as they relate to us are intended to identify forward-looking statements. We believe that it is important to communicate our future expectations to our shareholders, and we therefore make forward-looking statements in reliance upon the safe harbor provisions of the Act. However, there may be events in the future that we are not able to accurately predict or control, and actual results may differ materially from the expectations we describe in our forward-looking statements.
Examples of forward-looking statements include, among others, statements we make regarding: our financial position; business plans and objectives; general economic and industry trends; business prospects; future product development and acquisition strategies; future channel stocking levels; growth and expansion opportunities; operating results; and working capital and liquidity. The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We may not achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place significant reliance on our forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Moreover, neither we 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 our future results and could cause those results or other outcomes to differ materially from those indicated in our forward-looking statements include the following:
• our relationships with and the performance of distributors, builders, buying groups, retailers, e-tailers and servicers who sell our products to pool owners;
• the impact of changes in laws, regulations and administrative policy, including those that limit U.S. tax benefits, impact trade agreements, or address the impacts of climate change;
• impacts on our business from the sensitivity of our business to seasonality and unfavorable economic and business conditions;
• our ability to develop, manufacture and effectively and profitably market and sell our new planned and future products;
• the impact of product manufacturing disruptions, including as a result of catastrophe, procurement challenges and other events beyond our control;
• competition from national and global companies, as well as lower-cost manufacturers;
• the imposition, or threat of imposition, of tariffs and other trade restrictions could adversely affect our business, including as a result of an adverse impact on general economic conditions;
• our ability to execute on growth strategies and expansion opportunities;
• our exposure to credit risk on our accounts receivable;
• impacts on our business from political, regulatory, economic, trade and other risks associated with operating foreign businesses, including risks associated with geopolitical conflict;
• our ability to maintain favorable relationships with suppliers and manage disruptions to our global supply chain and the availability of raw materials;
• our ability to identify emerging technological and other trends in our target end markets;
• failure of markets to accept new product introductions and enhancements;
• the ability to successfully identify, finance, complete and integrate acquisitions;
• our reliance on information technology systems and susceptibility to threats to those systems, including cybersecurity threats, and risks arising from our collection and use of personal information data;
• misuse of our technology-enabled products could lead to reduced sales, liability claims or harm to our reputation;
• regulatory changes and developments affecting our current and future products;
• volatility in currency exchange rates and interest rates;
• our ability to service our existing indebtedness and obtain additional capital to finance operations and our growth opportunities;
• our ability to establish, maintain and effectively enforce intellectual property protection for our products, as well as our ability to operate our business without infringing, misappropriating or otherwise violating the intellectual property rights of others;
• the impact of material cost and other inflation, including as a result of new or increased tariffs;
• our ability to attract and retain senior management and other qualified personnel;
• the outcome of litigation and governmental proceedings;
• uncertainties related to distribution channel inventory practices and the impact on our net sales volumes;
• our ability to realize cost savings from restructuring activities; and
• other factors set forth in the respective “Risk Factors” section of this Quarterly Report on Form 10-Q and of our Annual Report on Form 10-K for the year ended December 31, 2024.
Many of these factors are macroeconomic in nature and are, therefore, beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from those described in this Quarterly Report on Form 10-Q as anticipated, believed, estimated, expected, intended, planned or projected. The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date of this report. Unless required by United States federal securities laws, we neither intend nor assume any obligation to update these forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q to conform these statements to actual results or to changes in our expectations.
| HAYWARD HOLDINGS, INC. | |||||||||||
| Table of Contents | |||||||||||
Financial Statements (unaudited) | |||||||||||
Unaudited Condensed Consolidated Balance Sheets | |||||||||||
ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | ||||||||||
| ITEM 5. | |||||||||||
ITEM 6. | |||||||||||
i
| PART I - FINANCIAL INFORMATION | ||
ITEM 1. FINANCIAL STATEMENTS
Hayward Holdings, Inc.
Unaudited Condensed Consolidated Balance Sheets
(Dollars in thousands, except per share data)
| March 29, 2025 | December 31, 2024 | |||||||||||||
| Assets | ||||||||||||||
| Current assets | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
Accounts receivable, net of allowances of $ | ||||||||||||||
| Inventories, net | ||||||||||||||
| Prepaid expenses | ||||||||||||||
| Income tax receivable | ||||||||||||||
| Other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
Property, plant, and equipment, net of accumulated depreciation of $ | ||||||||||||||
| Goodwill | ||||||||||||||
| Trademark | ||||||||||||||
| Customer relationships, net | ||||||||||||||
| Other intangibles, net | ||||||||||||||
| Other non-current assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||
| Current liabilities | ||||||||||||||
| Current portion of long-term debt | $ | $ | ||||||||||||
| Accounts payable | ||||||||||||||
| Accrued expenses and other liabilities | ||||||||||||||
| Income taxes payable | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Long-term debt, net | ||||||||||||||
| Deferred tax liabilities, net | ||||||||||||||
| Other non-current liabilities | ||||||||||||||
| Total liabilities | ||||||||||||||
Commitments and contingencies (Note 12) | ||||||||||||||
Stockholders’ equity | ||||||||||||||
Preferred stock, $ | ||||||||||||||
Common stock $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
Common stock in treasury; | ( | ( | ||||||||||||
| Retained earnings | ||||||||||||||
| Accumulated other comprehensive income | ( | ( | ||||||||||||
Total stockholders’ equity | ||||||||||||||
Total liabilities, redeemable stock, and stockholders’ equity | $ | $ | ||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
1
Hayward Holdings, Inc.
Unaudited Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share data)
| Three Months Ended | ||||||||||||||||||||||||||
| March 29, 2025 | March 30, 2024 | |||||||||||||||||||||||||
| Net sales | $ | $ | ||||||||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||
| Selling, general and administrative expense | ||||||||||||||||||||||||||
| Research, development and engineering expense | ||||||||||||||||||||||||||
| Acquisition and restructuring related expense | ||||||||||||||||||||||||||
| Amortization of intangible assets | ||||||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||
| Interest expense, net | ||||||||||||||||||||||||||
| Other expense (income), net | ( | |||||||||||||||||||||||||
| Total other expense | ||||||||||||||||||||||||||
| Income from operations before income taxes | ||||||||||||||||||||||||||
| Provision for income taxes | ||||||||||||||||||||||||||
| Net income | $ | $ | ||||||||||||||||||||||||
| Earnings per share | ||||||||||||||||||||||||||
| Basic | $ | $ | ||||||||||||||||||||||||
| Diluted | $ | $ | ||||||||||||||||||||||||
| Weighted average common shares outstanding | ||||||||||||||||||||||||||
| Basic | ||||||||||||||||||||||||||
| Diluted | ||||||||||||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
2
Hayward Holdings, Inc.
Unaudited Condensed Consolidated Statements of Comprehensive Income
(In thousands)
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||
| March 29, 2025 | March 30, 2024 | |||||||||||||||||||||||||||||||||||||
| Gross | Taxes | Net | Gross | Taxes | Net | |||||||||||||||||||||||||||||||||
| Net income | $ | $ | ||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss): | ||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ( | ||||||||||||||||||||||||||||||||||||
Net change on cash flow hedges | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Comprehensive income | $ | $ | ||||||||||||||||||||||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
3
Hayward Holdings, Inc.
Unaudited Condensed Consolidated Statements of Changes in Redeemable Stock and Stockholders' Equity
(Dollars in thousands)
| Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of Common Stock | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of stock | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 29, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of Common Stock | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of stock | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 30, 2024 | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
4
Hayward Holdings, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands)
| Three Months Ended | ||||||||||||||
| March 29, 2025 | March 30, 2024 | |||||||||||||
| Cash flows from operating activities | ||||||||||||||
| Net income | $ | $ | ||||||||||||
| Adjustments to reconcile net income to net cash used in operating activities | ||||||||||||||
| Depreciation | ||||||||||||||
| Amortization of intangible assets | ||||||||||||||
| Amortization of deferred debt issuance fees | ||||||||||||||
| Stock-based compensation | ||||||||||||||
| Deferred income taxes | ( | ( | ||||||||||||
| Allowance for bad debts | ( | |||||||||||||
| (Gain) loss on sale of property, plant and equipment | ( | |||||||||||||
| Changes in operating assets and liabilities | ||||||||||||||
| Accounts receivable | ( | ( | ||||||||||||
| Inventories | ( | ( | ||||||||||||
| Other current and non-current assets | ||||||||||||||
| Accounts payable | ||||||||||||||
| Accrued expenses and other liabilities | ( | ( | ||||||||||||
| Net cash used in operating activities | ( | ( | ||||||||||||
| Cash flows from investing activities | ||||||||||||||
| Purchases of property, plant, and equipment | ( | ( | ||||||||||||
| Software development costs | ( | ( | ||||||||||||
| Proceeds from sale of property, plant, and equipment | ||||||||||||||
| Proceeds from short-term investments | ||||||||||||||
| Net cash (used in) provided by investing activities | ( | |||||||||||||
| Cash flows from financing activities | ||||||||||||||
| Proceeds from issuance of long-term debt | ||||||||||||||
| Payments of long-term debt | ( | ( | ||||||||||||
| Payments of short-term notes payable | ( | ( | ||||||||||||
| Purchase of common stock | ( | ( | ||||||||||||
| Other, net | ( | |||||||||||||
| Net cash used in financing activities | ( | ( | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | |||||||||||||
| Change in cash and cash equivalents | ( | ( | ||||||||||||
| Cash and cash equivalents, beginning of period | ||||||||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||||||||
| Supplemental disclosures of cash flow information: | ||||||||||||||
| Cash paid-interest | $ | $ | ||||||||||||
| Cash paid-income taxes | ||||||||||||||
| Non-cash investing and financing activities: | ||||||||||||||
| Accrued and unpaid purchases of property, plant, and equipment | $ | $ | ||||||||||||
| Equipment financed under finance leases | ||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
5
Hayward Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
1. Nature of Operations and Organization
Hayward Holdings, Inc. (“Holdings,” the “Company,” “we” or “us”) is a global designer and manufacturer of pool and outdoor living technology. The Company has seven manufacturing facilities worldwide, which are located in North Carolina, Georgia, Tennessee, Rhode Island, Spain (two) and China, and other facilities in the United States, Canada, France and Australia. Cash flow is impacted by the seasonality of the swimming pool business. Cash flow is usually higher in the second and third quarters due to terms of sale to our customers.
We establish actual interim closing dates using a fiscal calendar in which our fiscal quarters end on the Saturday closest to the calendar quarter end, with the exception of year-end, which ends on December 31 of each fiscal year. The interim closing date for the first, second and third quarters of 2025 are March 29, June 28, and September 27, compared to the respective March 30, June 29, and September 28, 2024 dates. We had three less working days for the three months ended March 29, 2025 compared to the respective 2024 period.
2. Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of such information. All such adjustments are of a normal recurring nature. Certain information and note disclosures, including a description of significant accounting policies normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), have been condensed or omitted pursuant to such rules and regulations.
Hayward Holdings, Inc. and its direct wholly owned subsidiary, Hayward Intermediate, Inc., are holding companies with no other operations, material assets or liabilities other than the ownership by Hayward Intermediate, Inc. of all of the equity interests in Hayward Industries, Inc., which is the borrower under our First Lien Term Facility and ABL Revolving Credit Facility (collectively “Credit Facilities”). Refer to Note 21. Condensed Financial Information of Registrant (Parent Company Only) of Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2024 for the financial information detail of the holding company, Hayward Holdings, Inc.
These interim financial statements should be read in conjunction with the Company’s annual consolidated financial statements and notes thereto for the fiscal year ended December 31, 2024. The results of operations for the three months ended March 29, 2025 are not necessarily indicative of the results for any subsequent periods or the entire fiscal year ending December 31, 2025.
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified for comparative purposes to conform to the current presentation.
Accounts Receivable, Net
On July 3, 2024, the Company entered into a Receivables Purchase Agreement under which it may offer to sell eligible accounts receivable. The agreement is uncommitted and the eligible accounts receivable to be sold under the agreement consist of up to $125 million in accounts receivable generated by sales to specified customers of the Company. The Company will be paid a discounted purchase price for each receivable sold. The discount rate used to determine the purchase price for the subject receivables is based upon an annual interest rate equal to the forward-looking term rate based on the secured overnight financing rate for the period of time between payment to the Company and the due date for the receivable plus a buffer period specific to the obligor, plus a margin applicable to the specified obligor.
6
Hayward Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Recently Issued Accounting Standards
Income Taxes
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which is intended to improve income tax disclosure requirements by requiring (i) consistent categories and greater disaggregation of information in the rate reconciliation and (ii) the disaggregation of income taxes paid by jurisdiction. The guidance makes several other changes to the income tax disclosure requirements. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and is required to be applied prospectively with the option of retrospective application. The Company is evaluating the impact of the standard on its income tax disclosures and does not intend to early adopt.
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which includes requirements that an entity disclose in the notes to the financial statements specified information about certain costs and expenses, including the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation and (d) intangible asset amortization included in each relevant expense caption presented on the statement of operations. The standard also requires disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, as well as the total amount of selling expenses and an entity’s definition of selling expenses. The amendments in this update are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact of the standard on its disclosures.
3. Revenue
The following table disaggregates net sales between product groups and geographic regions, respectively (in thousands):
| Three Months Ended | ||||||||||||||||||||||||||
| March 29, 2025 | March 30, 2024 | |||||||||||||||||||||||||
| Product groups | ||||||||||||||||||||||||||
| Residential pool | $ | $ | ||||||||||||||||||||||||
| Commercial pool | ||||||||||||||||||||||||||
| Flow control | ||||||||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||||||
| Geographic | ||||||||||||||||||||||||||
| United States | $ | $ | ||||||||||||||||||||||||
| Canada | ||||||||||||||||||||||||||
| Europe | ||||||||||||||||||||||||||
| Rest of World | ||||||||||||||||||||||||||
| Total International | ||||||||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||||||
4. Inventories
Inventories, net, consist of the following (in thousands):
| March 29, 2025 | December 31, 2024 | |||||||||||||
| Raw materials | $ | $ | ||||||||||||
| Work in progress | ||||||||||||||
| Finished goods | ||||||||||||||
| Total | $ | $ | ||||||||||||
7
Hayward Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
5. Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities consist of the following (in thousands):
| March 29, 2025 | December 31, 2024 | |||||||||||||
| Selling, promotional and advertising | $ | $ | ||||||||||||
| Insurance reserve | ||||||||||||||
| Warranty reserve | ||||||||||||||
| Inventory purchases | ||||||||||||||
| Employee compensation and benefits | ||||||||||||||
| Operating lease liability - short term | ||||||||||||||
| Freight | ||||||||||||||
| Accrued Interest | ||||||||||||||
| Deferred income | ||||||||||||||
| Payroll taxes | ||||||||||||||
| Taxes - non income | ||||||||||||||
| Professional fees | ||||||||||||||
| Business restructuring costs | ||||||||||||||
| Short-term notes payable | ||||||||||||||
| Other accrued liabilities | ||||||||||||||
| Total | $ | $ | ||||||||||||
The Company offers warranties on certain of its products and records an accrual for estimated future claims. Such accruals are based on historical experience and management’s estimate of the level of future claims.
The following table summarizes the warranty reserve activities (in thousands):
Balance at December 31, 2024 | $ | |||||||
| Accrual for warranties issued during the period | ||||||||
| Payments | ( | |||||||
Balance at March 29, 2025 | ||||||||
Balance at December 31, 2023 | $ | |||||||
| Accrual for warranties issued during the period | ||||||||
| Payments | ( | |||||||
Balance at March 30, 2024 | ||||||||
Warranty expenses for the three months ended March 29, 2025 and March 30, 2024 were $8.1 million and $8.2 million, respectively.
6. Income Taxes
The Company’s effective tax rate for the three months ended March 29, 2025 and March 30, 2024 was 23.3 % and 23.8 %, respectively, after discrete items. The change in the Company's effective tax rate was primarily due to a reduction in the foreign rate differential.
The Company will recognize a tax benefit in the financial statements for an uncertain tax position only if the Company’s assessment is that the position is “more likely than not” (i.e., a likelihood greater than 50 percent) to be allowed by the tax jurisdiction based solely on the technical merits of the position. The term “tax position” refers to a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for financial reporting purposes. There were uncertain tax positions of $1.3
8
Hayward Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities and projected future taxable income in making this assessment. Management evaluates the need for valuation allowances on the deferred tax assets according to the provisions of ASC 740, Income Taxes. In making this determination, the Company assesses all available evidence (positive and negative) including recent earnings, internally-prepared income tax projections, and historical financial performance.
7. Long-Term Debt
Long-term debt, net, consists of the following (in thousands):
| March 29, 2025 | December 31, 2024 | |||||||||||||
| First Lien Term Facility, due May 28, 2028 | $ | $ | ||||||||||||
| ABL Revolving Credit Facility | ||||||||||||||
| Other bank debt | ||||||||||||||
| Finance lease obligations | ||||||||||||||
| Subtotal | ||||||||||||||
| Less: Current portion of the long-term debt | ( | ( | ||||||||||||
| Less: Unamortized debt issuance costs | ( | ( | ||||||||||||
| Total | $ | $ | ||||||||||||
In April 2024, the Company made $123.1 million of 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, there is zero aggregate principal outstanding remaining on the Incremental Term Loan B.
On June 26, 2024, the Company entered into the Fourth Amendment to its existing ABL Revolving Credit Facility (the “ABL Facility”) to replace the Canadian reference rate from the Canadian Dollar Offered Rate (“CDOR”) to the Canadian Overnight Repo Rate Average (“CORRA”).
8. Derivatives and Hedging Transactions
The Company holds derivative financial instruments for the purpose of hedging the risks of certain identifiable and anticipated transactions. In general, the types of risks hedged are those relating to the variability of future earnings and cash flows caused by movements in foreign currency exchange rates and interest rates. In hedging these transactions, the Company holds the following types of derivatives in the normal course of business.
Interest Rate Swap Agreements
The Company enters into interest rate swap agreements designated as cash flow hedges to manage interest rate risk related to its variable rate debt obligations. As cash flow hedges, unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. The interest rate swap agreements are highly correlated to the changes in interest rates to which the Company is exposed. Unrealized gains and losses on these instruments have been designated as effective and as such, the related gains or losses have been recorded as a component of accumulated other comprehensive income, net of tax. Other comprehensive income or loss is reclassified into current period income when the hedged interest expense affects earnings.
9
Hayward Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
As of March 29, 2025 and December 31, 2024, the Company was a party to interest rate swap agreements that hedged a notional amount of $600.0
Foreign Exchange Contracts
The Company enters into foreign exchange contracts to manage risks associated with future intercompany and foreign currency transactions that may be adversely affected by changes in exchange rates. These contracts are marked-to-market with the resulting gains and losses recognized in earnings. For the three months ended March 29, 2025 and March 30, 2024, the Company recognized $0.8 million of expense and $1.1 million of income, respectively, in Other (income) expense, net, related to foreign exchange contracts.
The following table summarizes the gross fair values and location of the significant derivative instruments within the Company’s unaudited condensed consolidated balance sheets (in thousands):
| Other Current Assets | Other Non-Current Assets | Other Non-Current Liabilities | Other Current Assets | Other Non-Current Assets | Other Non-Current Liabilities | ||||||||||||||||||||||||||||||||||||||||||
| March 29, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate swaps | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
The following table presents the effects of derivative instruments by contract type in accumulated other comprehensive income (“AOCI”) in the Company’s unaudited condensed consolidated statements of comprehensive income (in thousands):
Gain (Loss) Recognized in AOCI (1) | Gain (Loss) Reclassified From AOCI to Earnings (2) | Location of Gain (Loss) Reclassified from AOCI into Earnings | |||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||
| March 29, 2025 | March 30, 2024 | March 29, 2025 | March 30, 2024 | ||||||||||||||||||||||||||
Interest rate swaps (3) | $ | ( | $ | $ | $ | Interest expense, net | |||||||||||||||||||||||
(1) The tax benefit and expense, respectively, on the (loss) gain recognized in AOCI for the three months ended March 29, 2025 and March 30, 2024 was $ | |||||||||||||||||||||||||||||
(2) The tax expense on the gain reclassified from AOCI to earnings for the three months ended March 29, 2025 and March 30, 2024 was $ | |||||||||||||||||||||||||||||
(3) The Company estimates that $ | |||||||||||||||||||||||||||||
9. Fair Value Measurements
The Company is required to disclose the estimated fair values of all financial instruments, even if they are not carried at their fair value. The fair values of financial instruments are estimates based upon market conditions and perceived risks. These estimates require management’s judgment and may not be indicative of the future fair values of the assets and liabilities.
The accounting guidance for fair value measurements and disclosures establishes a three-level fair value hierarchy:
•Level 1 - Inputs are based on quoted prices in active markets for identical assets and liabilities.
•Level 2 - Inputs are based on observable inputs other than quoted prices in active markets for identical or similar assets and liabilities.
•Level 3 - One or more inputs are unobservable and significant.
Financial and nonfinancial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s financial instruments include cash and cash equivalents, accounts
10
Hayward Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
receivable, and accounts payable. The carrying amount of these instruments approximate fair value because of their short-term nature.
The Company’s interest rate swaps and foreign exchange contracts are measured in the financial statements at fair value on a recurring basis. The fair values of these instruments are estimated using industry standard valuation models using market-based observable inputs, including interest rate curves. These instruments are customary, over-the-counter contracts with various bank counterparties. Accordingly, the fair value measurements of the interest rate swaps and foreign exchange contracts are categorized as Level 2.
The Company’s investment plan assets as part of the nonqualified Hayward Industries Supplemental Retirement Plan (the “Supplemental Retirement Plan”) are presented in the financial statements at fair value on a recurring basis and are based on quoted market prices in active markets. Accordingly, the fair value measurements of the Supplemental Retirement Plan assets are categorized as Level 1. The value of investments related to the Supplemental Retirement Plan is included in other assets and a corresponding liability to participants is recorded in other liabilities.
The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis (in thousands):
| March 29, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts | |||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Retirement Plan assets | |||||||||||||||||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Supplemental Retirement Plan liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
The estimated fair value of the long-term debt and related current maturities (excluding finance leases, the ABL Facility, and other bank debt) is based on observable quoted prices in active markets for similar liabilities and is classified as a Level 2 input. The fair value of the ABL Facility approximates its carrying value.
The following table sets forth the Company’s financial liabilities that were not carried at fair value (in thousands):
| March 29, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Long-term debt and related current maturities | $ | $ | $ | $ | |||||||||||||||||||
11
Hayward Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
10. Segments and Related Information
The Company’s operational and management structure is aligned to its key geographies and go-to market strategy resulting in two reportable segments: North America (“NAM”) and Europe & Rest of World (“E&RW”). Operating segments have not been aggregated to form the reportable segments. The Company's CODM is the President and Chief Executive Officer. The Company determined its reportable segments based on how the Company’s Chief Operating Decision Maker (“CODM”) reviews the Company’s operating results in assessing performance and allocating resources. The CODM uses segment income in assessing performance of and allocating resources to the reportable segments. Segment income is defined as net sales less cost of sales, less segment selling, general and administrative expense (“SG&A”) and research development and engineering expense (“RD&E”), excluding acquisition and restructuring related expense, as well as amortization of intangible assets recorded within segment SG&A expense.
The CODM does not evaluate reportable segments using asset information as these are managed on an enterprise-wide basis. The accounting policies of the segments are the same as those of Holdings.
The North America segment manufactures and sells residential and commercial swimming pool equipment and supplies as well as equipment that controls the flow of fluids.
The Europe & Rest of World segment manufactures and sells residential and commercial swimming pool equipment and supplies.
The Company sells its products primarily through distributors and retailers. Financial information by reportable segment, net of intercompany transactions, is included in the following summary (in thousands):
| Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||||||||||
| March 29, 2025 | March 30, 2024 | |||||||||||||||||||||||||||||||||||||
| North America | Europe & Rest of World | Total | North America | Europe & Rest of World | Total | |||||||||||||||||||||||||||||||||
| External net sales | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Significant Segment Expenses | ||||||||||||||||||||||||||||||||||||||
| Cost of Sales | ||||||||||||||||||||||||||||||||||||||
| Segment selling, general and administrative expense | ||||||||||||||||||||||||||||||||||||||
| Research, development and engineering expense | ||||||||||||||||||||||||||||||||||||||
| Segment income | ||||||||||||||||||||||||||||||||||||||
Capital expenditures (1) | ||||||||||||||||||||||||||||||||||||||
Depreciation and amortization (1)(2) | ||||||||||||||||||||||||||||||||||||||
| Intersegment sales | ||||||||||||||||||||||||||||||||||||||
(1) Capital expenditures and depreciation associated with Corporate are not included in these totals.
(2) Amortization expense excluded from segment income is not included in these totals.
12
Hayward Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
The following table presents a reconciliation of segment income to income from operations before income taxes (in thousands):
| Three Months Ended | ||||||||||||||||||||||||||
| March 29, 2025 | March 30, 2024 | |||||||||||||||||||||||||
| Total segment income | $ | $ | ||||||||||||||||||||||||
| Corporate expense, net | ||||||||||||||||||||||||||
| Acquisition and restructuring related expense | ||||||||||||||||||||||||||
| Amortization of intangible assets | ||||||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||
| Interest expense, net | ||||||||||||||||||||||||||
| Other (income) expense, net | ( | |||||||||||||||||||||||||
| Total other expense | ||||||||||||||||||||||||||
| Income from operations before income taxes | $ | $ | ||||||||||||||||||||||||
11. Earnings Per Share
The following table sets forth the computation of basic and diluted net income per share attributable to common stockholders (in thousands, except share and per share data):
| Three Months Ended | ||||||||||||||||||||||||||
| March 29, 2025 | March 30, 2024 | |||||||||||||||||||||||||
| Net income attributable to common stockholders | $ | $ | ||||||||||||||||||||||||
| Weighted average number of common shares outstanding, basic | ||||||||||||||||||||||||||
Effect of dilutive securities(a) | ||||||||||||||||||||||||||
| Weighted average number of common shares outstanding, diluted | ||||||||||||||||||||||||||
| Earnings per share attributable to common stockholders, basic | $ | $ | ||||||||||||||||||||||||
| Earnings per share attributable to common stockholders, diluted | $ | $ | ||||||||||||||||||||||||
13
Hayward Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
12. Commitments and Contingencies
Litigation
The Company is involved in litigation arising in the normal course of business, including involving product liability claims. Where appropriate, these matters have been submitted to the Company’s insurance carrier. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. It is not possible to quantify the ultimate liability, if any, in these matters.
As of December 11, 2024, during the discovery phase of litigation in which the Company was one of several named defendants, the Company reached a mutual understanding to settle its liability in a wrongful death lawsuit related to a discontinued product. We expect the resolution to include payment in the amount of $22.0 million, which amount will be paid entirely by the Company’s insurance carriers pursuant to agreement among the Company and its insurance carriers. Accordingly, the Company has an accrual for a loss contingency of $22.0 million and insurance receivables of $22.0 million, which are recorded within other current assets and accrued expenses and other liabilities on the unaudited condensed consolidated balance sheets, respectively. The Company expects the resolution payment to be made within the next three to six months.
On August 2, 2023, a securities class action complaint was filed in the United States District Court for the District of New Jersey against the Company and certain of its current directors and officers (Kevin Holleran and Eifion Jones) and MSD Partners, L.P. and CCMP Capital Advisors, LP on behalf of a putative class of stockholders who acquired shares of the Company’s common stock between March 2, 2022 and July 27, 2022. That action is captioned City of Southfield Fire and Police Retirement System vs. Hayward Holdings, Inc., et al., 2:23-cv-04146-WJM-ESK (D.N.J.) (“City of Southfield”). On September 28, 2023, a second, related securities class action complaint was filed in the United States District Court for the District of New Jersey against the Company and certain of its current directors and officers (Kevin Holleran and Eifion Jones) and MSD Partners, L.P. and CCMP Capital Advisors, LP on behalf of a putative class of stockholders who acquired shares of the Company’s common stock between October 27, 2021 and July 28, 2022. That action is captioned Erie County Employees’ Retirement System vs. Hayward Holdings, Inc., et al., 2:23-cv-04146-WJM-ESK (D.N.J.) (“Erie County”). On December 19, 2023, the Court issued a ruling consolidating the two securities class actions (City of Southfield and Erie County) under the City of Southfield docket (the “Securities Class Action”) and appointing a lead plaintiff. In a consolidated class action complaint filed March 4, 2024, the Securities Class Action alleged on behalf of a putative class of stockholders who acquired shares of our common stock between October 27, 2021 and July 28, 2022, among other things, that the Company, Kevin Holleran, and Eifion Jones violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by, among other things, making materially false or misleading statements regarding inventory, growth, and demand trends and the Company’s financial projections for 2022. On October 2, 2024, the Court issued an Opinion and Order dismissing the consolidated class action complaint and granting the lead plaintiff leave to file an amended complaint within 30 days. On November 1, 2024, lead plaintiff filed a consolidated amended class action complaint making substantially similar allegations as in the consolidated class action complaint, but adding additional defendants affiliated with MSD Partners, L.P. and CCMP Capital Advisors, LP. On December 18, 2024, the Company and all other defendants moved to dismiss the consolidated amended class action complaint. The briefing on the motion to dismiss was completed on March 4, 2025. The Securities Class Action seeks unspecified monetary damages on behalf of a putative class and an award of costs and expenses, including reasonable attorneys’ fees.
On November 27, 2023, a shareholder derivative lawsuit was filed in the United States District Court for the District of New Jersey against current and past officers and directors of the Company captioned Heicklen v. Holleran, et al., 2:23-cv-22649 (D.N.J.) (the “Derivative Action”). The Derivative Action alleges breaches of fiduciary duties to Company stockholders, aiding and abetting breaches of fiduciary duties, unjust enrichment, corporate waste, and violations of Section 10(b) of the Securities Exchange Act of 1934 in connection with the claims in the Securities Class Action. The Derivative Action seeks recovery of unspecified damages and attorney’s fees and costs, as well as improvements to the Company’s corporate governance and internal procedures. The Derivative Action has been stayed pending final decision on the motion to dismiss filed in the Securities Class Action.
We dispute the allegations of wrongdoing in the Securities Class Action and the Derivative Action and intend to vigorously defend ourselves in these matters. In view of the complexity and ongoing and uncertain nature of the outstanding proceedings and inquiries, at this time we are unable to estimate a reasonably possible financial loss or range of financial loss, if any, that we may incur to resolve the Securities Class Action and the Derivative Action.
14
Hayward Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
13. Leases
The Company’s operating and finance lease portfolio is described in Note 15. Leases of Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2024.
Supplemental cash flow information related to leases was as follows (in thousands):
| Three Months Ended | |||||||||||
| March 29, 2025 | March 30, 2024 | ||||||||||
| Right-of-use assets obtained in exchange for lease obligations: | |||||||||||
| Operating leases | $ | $ | |||||||||
| Finance leases | |||||||||||
Supplemental balance sheet information related to leases was as follows (in thousands):
| March 29, 2025 | December 31, 2024 | ||||||||||
| Operating leases | |||||||||||
| $ | $ | ||||||||||
| Total operating lease liabilities | |||||||||||
| Finance leases | |||||||||||
| Property, plant and equipment | |||||||||||
| Accumulated depreciation | ( | ( | |||||||||
| Total finance lease liabilities | $ | $ | |||||||||
14. Stockholders’ Equity
Preferred Stock
The Company’s Second Restated Certificate of Incorporation authorizes the Company to issue up to 100,000,000 shares of preferred stock, $0.001 value per share, all of which is undesignated.
Common Stock
The Company’s Second Restated Certificate of Incorporation authorizes the Company to issue up to 750,000,000 shares of Common Stock, $0.001 value per share. Each share of Common Stock is entitled to one vote on all matters submitted to a vote of the Company’s stockholders. The holders of Common Stock are entitled to receive dividends, if any, as may be declared by the Board of Directors.
Dividends paid
For the three months ended March 29, 2025 and March 30, 2024, no
Share Repurchase Program
The Board of Directors authorized the Company’s share repurchase program (the “Share Repurchase Program”) such that the Company is authorized to repurchase from time to time up to an aggregate of $450 million of its outstanding shares of common stock, which authorization expires on July 26, 2025. The Company had no repurchases of its common stock in the quarter ended March 29, 2025 under the Share Repurchase Program. As of March 29, 2025, $400.0 million remained available for additional share repurchases under the program.
15
Hayward Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
15. Stock-based Compensation
Stock-based compensation expense recorded in the unaudited condensed consolidated statements of operations for equity-classified stock-based awards for the three months ended March 29, 2025 and March 30, 2024 was $2.9 million and $2.0 million, respectively.
The Company has established two equity incentive plans, the 2021 Equity Incentive Plan and the 2017 Equity Incentive Plan. The Company no longer grants awards under the 2017 Equity Incentive Plan.
2021 Equity Incentive Plan
In March 2021, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”). Under the 2021 Plan, up to 13,737,500 shares of common stock may be granted to employees, directors and consultants in the form of stock options, restricted stock units and other stock-based awards. The terms of awards granted under the 2021 Plan are determined by the Compensation Committee of the Board of Directors, subject to the provisions of the 2021 Plan.
Options granted under the 2021 Plan expire no later than ten years from the date of grant. Options and time-based restricted stock units granted under the 2021 Plan generally vest ratably over a three-year period and performance-based restricted stock units vest at the end of three years subject to the performance criteria.
During the three months ended March 29, 2025, the Company granted 477,354 time-based restricted stock units and 353,162 performance-based restricted stock units (at the target performance level) under the 2021 Plan with a weighted-average grant-date fair value per share of $14.49 and $14.49 , respectively.
16. Acquisitions and Restructuring
Acquisition and restructuring related expense, net consists of the following (in thousands):
| Three Months Ended | |||||||||||||||||||||||
| March 29, 2025 | March 30, 2024 | ||||||||||||||||||||||
| Business restructuring costs | $ | $ | |||||||||||||||||||||
| Acquisition transaction and integration costs | |||||||||||||||||||||||
| Total | $ | $ | |||||||||||||||||||||
During the third quarter of 2023, the Company initiated programs to centralize and consolidate operations and professional services in Europe. For the three months ended March 29, 2025 and March 30, 2024, the Company incurred zero and $0.4 million of expense related to the programs, respectively. The total costs incurred to execute the programs were $3.2 million.
The following tables summarize the status of the Company’s restructuring related expense and related liability balances (in thousands):
2025 Activity | ||||||||||||||||||||||||||||||||
Liability as of December 31, 2024 | Costs Recognized | Cash Payments | Liability as of March 29, 2025 | |||||||||||||||||||||||||||||
| One-time termination benefits | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Other | ( | |||||||||||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
2024 Activity | |||||||||||||||||||||||||||||
Liability as of December 31, 2023 | Costs Recognized | Cash Payments | Non-cash charges | Liability as of March 30, 2024 | |||||||||||||||||||||||||
| One-time termination benefits | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
| Facility-related | ( | ||||||||||||||||||||||||||||
| Other | ( | ||||||||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
16
Hayward Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Restructuring costs are included within acquisition and restructuring related costs on the Company’s unaudited condensed consolidated statements of operations, while the restructuring liability is included as a component of accrued expenses and other liabilities on the Company’s unaudited condensed consolidated balance sheets.
Acquisitions
On June 26, 2024, the Company acquired the equity interests of ChlorKing HoldCo, LLC and related entities (“ChlorKing”). The acquired business includes pool saline chlorinators and UV disinfection systems serving the commercial pools and water treatment market segments. The acquisition broadens the Company’s commercial portfolio of products and expands the market of commercial customers while furthering the Company's commitment to sustainable and energy-efficient technology for both commercial and residential pools. The acquisition is included in our North America segment.
17. Related-Party Transactions
During the three months ended March 29, 2025 and March 30, 2024, the Company did not incur any significant related-party transactions.
18. Accumulated Other Comprehensive Income
The changes in accumulated other comprehensive income are provided in the tables below (in thousands):
| Cumulative Translation Adjustment | Unrecognized (Losses) Gain on Derivative Instruments for Cash Flow Hedges | Accumulated Other Comprehensive Income, Net of Taxes | |||||||||||||||
| Balance at December 31, 2024 | $ | ( | $ | $ | ( | ||||||||||||
| Other comprehensive (loss) income before reclassifications | ( | ||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income | ( | ( | |||||||||||||||
| Net current period other comprehensive (loss) income | ( | ( | |||||||||||||||
| Tax Amounts | |||||||||||||||||
| Balance at March 29. 2025 | $ | ( | $ | $ | ( | ||||||||||||
| Cumulative Translation Adjustment | Unrecognized (Losses) Gain on Derivative Instruments for Cash Flow Hedges | Accumulated Other Comprehensive Income, Net of Taxes | |||||||||||||||
| Balance at December 31, 2023 | $ | ( | $ | $ | |||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income | ( | ( | |||||||||||||||
| Net current period other comprehensive income (loss) | ( | ( | |||||||||||||||
| Tax Amounts | ( | ( | |||||||||||||||
| Balance at March 30, 2024 | $ | ( | $ | $ | |||||||||||||
17
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical financial information, this discussion and analysis includes forward-looking statements that reflect our plans, estimates and beliefs and involve risks and uncertainties. As a result of many factors, including those set forth in the section “Special Note Regarding Forward-looking Statements” in this Quarterly Report on Form 10-Q, our actual results may differ materially from those contained in or implied by any forward-looking statements. The results of operations for the three months ended March 29, 2025 are not necessarily indicative of the results for any subsequent periods or the entire fiscal year ending December 31, 2025.
Our Company
The Company is a leading global designer and manufacturer of pool and outdoor living technology. With the pool as the centerpiece of the growing outdoor living space, the pool industry has attractive market characteristics, including significant aftermarket requirements (such as the ongoing repair, replacement, remodeling and upgrading of equipment for existing pools), innovation-led growth opportunities, and a favorable industry structure. We are a leader in this market with a highly-recognized brand, one of the largest installed bases of pool equipment in the world, decades-long relationships with our key channel partners and trade customers and a history of technological innovation. Our engineered products, which include various energy efficient and more environmentally sustainable offerings, enhance the pool owner’s outdoor living lifestyle while also delivering high quality water, pleasant ambiance and ease of use for the ultimate backyard experience. Aftermarket replacements and upgrades to higher value Internet of Things and energy efficient models are a primary growth driver for our business.
We have an estimated North American residential pool market share of approximately 33%. We believe that we are well-positioned for future growth. Historically aftermarket sales have represented approximately 80% of net sales and are generally recurring in nature since these products are critical to the ongoing operation of pools given requirements for water quality and sanitization. Our product replacement cycle of approximately 8 to 11 years drives multiple replacement opportunities over the typical life of a pool, creating opportunities to generate aftermarket product sales as pool owners repair, remodel and upgrade their pools. We estimate aftermarket sales based upon feedback from certain representative customers and management’s interpretation of available industry and government data, and not upon our GAAP net sales results.
The Company has seven manufacturing facilities worldwide, which are located in North Carolina, Georgia, Tennessee, Rhode Island, Spain (two) and China, and other facilities in the United States, Canada, France and Australia.
Segments
Our business is organized into two reportable segments: North America (“NAM”) and Europe & Rest of World (“E&RW”). The Company determined its reportable segments based on how the Chief Operating Decision Maker (“CODM”) reviews the Company’s operating results in assessing performance and allocating resources.
The NAM segment manufactures and sells a complete line of residential and commercial swimming pool equipment and supplies in the United States and Canada, and manufactures and sells flow control products.
The E&RW segment manufactures and sells residential and commercial swimming pool equipment and supplies in Europe, Central and South America, the Middle East, Australia and other Asia Pacific countries.
NAM accounted for 82% of total net sales for the three months ended March 29, 2025 and March 30, 2024, and E&RW accounted for 18% of total net sales for the three months ended March 29, 2025 and March 30, 2024.
Factors Affecting the Comparability of our Results of Operations
Our results of operations for the three months ended March 29, 2025 and the three months ended March 30, 2024 have been affected by the following, among other events, which must be understood to assess the comparability of our period-to-period financial performance and condition.
Our fiscal quarters end on the Saturday closest to the calendar quarter end, with the exception of year end which ends on December 31 of each fiscal year. The interim closing date for the first, second and third quarters of 2025 are March 29, June 28, and September 27, compared to the respective March 30, June 29, and September 28, 2024 date. This resulted in three less working days for the three months ended March 29, 2025 compared to the respective 2024 period. Throughout this discussion
18
we may refer to the three months ended March 29, 2025 and the three months ended March 30, 2024 as the “First Quarter” and “Comparable Quarter,” respectively.
Seasonality
Our business is seasonal, with sales typically higher in the second and fourth quarters. During the second quarter, sales are higher in anticipation of the start of the summer pool season, and in the fourth quarter, we incentivize trade customers to buy and stock in preparation for next year’s pool season under an “Early Buy” program, which features a price discount and extended payment terms. Shipments for the 2024 Early Buy program began in the late third quarter and will continue through approximately the first quarter of 2025. The favorable payment terms extended as part of the Early Buy program generally do not exceed 180 days. We aim to keep our manufacturing plants running at a constant level throughout the year and consequently we typically build inventory in the first and third quarters, and inventory is sold-down in the second and fourth quarters. Our accounts receivable balance increases from September to April as a result of the Early Buy extended terms. Also, because the majority of our sales are to distributors whose inventory of our products may vary, including due to reasons beyond our control, such as end-user demand, supply chain lead times and macroeconomic factors, our revenue may fluctuate from period to period.
Tariffs, Trade Restrictions and Other Geopolitical Events
The imposition of, and threat of imposition of, tariffs and other trade restrictions by the United States government in 2025, and tariffs announced by foreign governments in response to these actions, have created substantial uncertainty in the global economy. This uncertainty, as well as the direct impact of these tariffs and other trade restrictions, may adversely affect the Company’s business by reducing market demand for the Company’s products, increasing the Company’s supply costs that cannot be passed on to customers and/or adversely affecting the competitiveness of the Company’s products against those of manufacturers not subject to such tariffs and trade restrictions. Geopolitical conflicts around the world have also created substantial uncertainty in the global economy, including as a result of sanctions and penalties imposed in response to these conflicts. In particular, armed conflicts in the Middle East and in Ukraine and Russia have adversely affected market demand in the Middle East and Asia, which has negatively impacted our results in our E&RW segment. See “—Segment—Europe & Rest of World (“E&RW”),” below. Given the nature of our business and global operations, if these or other geopolitical conflicts continue or worsen, our business and results of operations may be adversely affected.
Key Measures We Use to Evaluate Our Business
We consider a variety of financial and operating measures in assessing the performance of our business. The key GAAP measures we use are net sales, gross profit and gross profit margin, selling, general, and administrative expense (“SG&A”), research, development, and engineering expense (“RD&E”), operating income and operating income margin. The key non-GAAP measures we use are EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted segment income, and adjusted segment income margin.
For information about our use of Non-GAAP measures and a reconciliation of these metrics to the most relevant GAAP measure see “—Non-GAAP Reconciliation.”
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Results of Operations
Consolidated
The following tables summarize key components of our results of operations for the periods indicated. We derived the consolidated statements of operations for the three months ended March 29, 2025 and March 30, 2024 from our unaudited condensed consolidated financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future. The following table summarizes our results of operations:
| (In thousands) | Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||
| March 29, 2025 | March 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 228,841 | $ | 212,569 | ||||||||||||||||||||||||||||||||||||||||
| Cost of sales | 115,466 | 107,990 | ||||||||||||||||||||||||||||||||||||||||||
| Gross profit | 113,375 | 104,579 | ||||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expense | 65,117 | 60,014 | ||||||||||||||||||||||||||||||||||||||||||
| Research, development and engineering expense | 5,986 | 6,302 | ||||||||||||||||||||||||||||||||||||||||||
| Acquisition and restructuring related expense | 1,926 | 504 | ||||||||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 6,835 | 6,900 | ||||||||||||||||||||||||||||||||||||||||||
| Operating income | 33,511 | 30,859 | ||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 13,651 | 18,592 | ||||||||||||||||||||||||||||||||||||||||||
| Other expense (income), net | 1,179 | (638) | ||||||||||||||||||||||||||||||||||||||||||
| Total other expense | 14,830 | 17,954 | ||||||||||||||||||||||||||||||||||||||||||
| Income from operations before income taxes | 18,681 | 12,905 | ||||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | 4,348 | 3,065 | ||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | 14,333 | $ | 9,840 | ||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA (a) | $ | 49,102 | $ | 45,041 | ||||||||||||||||||||||||||||||||||||||||
(a) See “—Non-GAAP Reconciliation.”
Net sales
Net sales increased to $228.8 million for the three months ended March 29, 2025 from $212.6 million for the three months ended March 30, 2024, an increase of $16.2 million, or 7.7%. See the segment discussion below for further information.
The year-over-year net sales increase was driven by the following:
| Three Months Ended | ||||||||||||||
| March 29, 2025 | ||||||||||||||
| Volume | 3.4 | % | ||||||||||||
| Acquisitions | 2.6 | % | ||||||||||||
| Price, net of discounts and allowances | 2.5 | % | ||||||||||||
| Currency and other | (0.8) | % | ||||||||||||
| Total | 7.7 | % | ||||||||||||
The net sales increase for the three months ended March 29, 2025 was driven by an increase in volume, the favorable impact from acquisitions and 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 and gross profit margin
Gross profit increased to $113.4 million for the three months ended March 29, 2025 from $104.6 million for the three months ended March 30, 2024, an increase of $8.8 million, or 8.4%.
Gross profit margin increased to 49.5% for the three months ended March 29, 2025 compared to 49.2% for the three months ended March 30, 2024, an increase of 30 basis points, due to positive net price.
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Selling, general, and administrative expense
Selling, general, and administrative expense (SG&A) increased to $65.1 million for the three months ended March 29, 2025 from $60.0 million for the three months ended March 30, 2024, an increase of $5.1 million, or 8.5%, primarily due to normalized incentive compensation and investments in our customer care and selling teams.
As a percentage of net sales, SG&A increased to 28.5% for the three months ended March 29, 2025 as compared to 28.2% for the three months ended March 30, 2024, an increase of 30 basis points, driven by the factors discussed above.
Research, development, and engineering expense
Research, development, and engineering expense (RD&E) decreased to $6.0 million for the three months ended March 29, 2025 from $6.3 million for the three months ended March 30, 2024, primarily as a result of timing of projects compared to the three months ended March 30, 2024. RD&E spend continues to be focused on new product development and new product quality.
As a percentage of net sales, RD&E was 2.6% for the three months ended March 29, 2025, compared to 3.0% for the three months ended March 30, 2024.
Acquisition and restructuring related expense
For the three months ended March 29, 2025, we incurred $1.9 million of acquisition and restructuring related expense as compared to $0.5 million of expense for the three months ended March 30, 2024. The expense in the First Quarter was primarily driven by costs associated with the acquisition of ChlorKing HoldCo, LLC and related entities (“ChlorKing”), including the deferred purchase price treated as compensation cost over the twelve-month service period from the date of acquisition, compared to the Comparable Quarter which was primarily related to severance and other costs associated with the centralization and consolidation of operations in Europe.
Amortization of intangible assets
For the three months ended March 29, 2025, amortization of intangible assets decreased by $0.1 million compared to the three months ended March 30, 2024 due to the amortization pattern of certain intangible asset classes based on the declining balance method.
Operating income
For the three months ended March 29, 2025, operating income increased $2.7 million due to the aggregated effect of the items described above.
Interest expense, net
Interest expense, net, decreased to $13.7 million for the three months ended March 29, 2025 from $18.6 million for the three months ended March 30, 2024.
Interest expense, net, for the three months ended March 29, 2025 consisted of $14.3 million of interest expense on the outstanding debt and $0.9 million of amortization of deferred financing fees, partially offset by $1.5 million of interest income on cash deposits. The effective interest rate on our borrowings, including the impact of an interest rate hedge, was 6.31% for the three months ended March 29, 2025.
Interest expense, net, for the three months ended March 30, 2024 consisted of $19.1 million of interest expense on the outstanding debt and $1.2 million of amortization of deferred financing fees, partially offset by $1.7 million of interest income on cash deposits. The effective interest rate on our borrowings, including the impact of an interest rate hedge, was 7.28% for the three months ended March 30, 2024.
Interest expense, net, decreased by $4.9 million for the First Quarter compared to the Comparable Quarter, primarily due to reduced debt as a result of the repayment of the Incremental Term Loan B principal balance in April 2024 and lower interest rates.
Provision for income taxes
We incurred income tax expense of $4.3 million for the three months ended March 29, 2025 compared to income tax expense of $3.1 million for the three months ended March 30, 2024, an increase of $1.2 million, or 41.9%.
The decrease in the Company’s effective tax rate from 23.8% for the three months ended March 30, 2024 to 23.3% for the three months ended March 29, 2025 was primarily due to a reduction in the foreign rate differential.
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Net income and net income margin
As a result of the foregoing, net income increased $4.5 million for the three months ended March 29, 2025.
Net income margin increased to 6.3% for the three months ended March 29, 2025 compared to 4.6% for the three months ended March 30, 2024, an increase of 170 basis points.
Adjusted EBITDA and Adjusted EBITDA margin
Adjusted EBITDA increased to $49.1 million for the three months ended March 29, 2025 from $45.0 million for the three months ended March 30, 2024, an increase of $4.1 million, or 9.0%, driven primarily by increased net sales and higher gross profit, partially offset by an increase in SG&A expense.
Adjusted EBITDA margin increased to 21.5% for the three months ended March 29, 2025 compared to 21.2% for the three months ended March 30, 2024, an increase of 30 basis points.
See “— Non-GAAP Reconciliation” for a reconciliation of adjusted EBITDA and adjusted EBITDA margin to the most directly comparable GAAP metric.
Segment
The Company manages its business primarily on a geographic basis. The Company’s reportable segments consist of NAM and E&RW. We evaluate performance based on net sales, gross profit, segment income and adjusted segment income, and we use gross profit margin, segment income margin and adjusted segment income margin as comparable performance measures for our reporting segments.
Segment income represents segment net sales less cost of sales, segment SG&A and RD&E, excluding acquisition and restructuring related expense as well as amortization of intangible assets. A reconciliation of segment income to our operating income is detailed below. Adjusted segment income represents segment income adjusted for the impact of depreciation, amortization of intangible assets recorded within cost of sales, stock-based compensation and certain non-cash, nonrecurring or other items that are included in segment income that we do not consider indicative of the ongoing segment operating performance. See “—Non-GAAP Reconciliation” for a reconciliation of these metrics to the most directly comparable GAAP metric.
North America (“NAM”)
| (Dollars in thousands) | Three Months Ended | |||||||||||||||||||||||||||||||||||||
| March 29, 2025 | March 30, 2024 | |||||||||||||||||||||||||||||||||||||
| Net sales | $ | 187,069 | $ | 173,429 | ||||||||||||||||||||||||||||||||||
| Gross profit | $ | 98,739 | $ | 89,877 | ||||||||||||||||||||||||||||||||||
| Gross profit margin % | 52.8 | % | 51.8 | % | ||||||||||||||||||||||||||||||||||
| Segment income | $ | 43,454 | $ | 39,742 | ||||||||||||||||||||||||||||||||||
| Segment income margin % | 23.2 | % | 22.9 | % | ||||||||||||||||||||||||||||||||||
Adjusted segment income (a) | $ | 50,657 | $ | 45,303 | ||||||||||||||||||||||||||||||||||
Adjusted segment income margin % (a) | 27.1 | % | 26.1 | % | ||||||||||||||||||||||||||||||||||
(a) See “—Non-GAAP Reconciliation.”
Net sales
Net sales increased to $187.1 million for the three months ended March 29, 2025 from $173.4 million for the three months ended March 30, 2024, an increase of $13.7 million, or 7.9%.
The year-over-year net sales increase was driven by the following factors:
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| Three Months Ended | ||||||||||||||
| March 29, 2025 | ||||||||||||||
| Acquisitions | 3.1 | % | ||||||||||||
| Price, net of allowances and discounts | 2.8 | % | ||||||||||||
| Volume | 2.4 | % | ||||||||||||
| Currency and other | (0.4) | % | ||||||||||||
| Total | 7.9 | % | ||||||||||||
The net sales increase for the three months ended March 29, 2025 was driven by the acquisition and successful integration of the ChlorKing business, positive net price and volume growth due to the timing of orders in the 2025 season.
Gross profit and gross profit margin
Gross profit increased to $98.7 million for the three months ended March 29, 2025 from $89.9 million for the three months ended March 30, 2024, an increase of $8.8 million, or 9.9%.
Gross profit margin increased to 52.8% for the three months ended March 29, 2025 from 51.8% for the three months ended March 30, 2024, an increase of 100 basis points. Gross margin increased due to positive net price.
Segment income and segment income margin
Segment income increased to $43.5 million for the three months ended March 29, 2025 from $39.7 million for the three months ended March 30, 2024, an increase of $3.8 million, or 9.3%. This was primarily driven by an increase in sales and gross profit as discussed above, partially offset by an increase in SG&A due to normalized incentive compensation.
Segment income margin increased to 23.2% for the three months ended March 29, 2025 from 22.9% for the three months ended March 30, 2024, an increase of 30 basis points. The increase was driven by the same factors discussed above in segment income.
Adjusted segment income and Adjusted segment income margin
Adjusted segment income increased to $50.7 million for the three months ended March 29, 2025 from $45.3 million for the three months ended March 30, 2024, an increase of $5.4 million, or 11.8%. This was driven by the increase in segment income as discussed above, after adjusting for the non-cash and specified costs discussed below in “— Non-GAAP Reconciliation.”
Adjusted segment income margin increased to 27.1% for the three months ended March 29, 2025 from 26.1% for the three months ended March 30, 2024, an increase of 100 basis points.
Refer to “—Non-GAAP Reconciliation” for a reconciliation of segment income to adjusted segment income.
Europe & Rest of World (“E&RW”)
| (Dollars in thousands) | Three Months Ended | |||||||||||||||||||||||||||||||||||||
| March 29, 2025 | March 30, 2024 | |||||||||||||||||||||||||||||||||||||
| Net sales | $ | 41,772 | $ | 39,140 | ||||||||||||||||||||||||||||||||||
| Gross profit | $ | 14,636 | $ | 14,702 | ||||||||||||||||||||||||||||||||||
| Gross profit margin % | 35.0 | % | 37.6 | % | ||||||||||||||||||||||||||||||||||
| Segment income | $ | 6,538 | $ | 6,036 | ||||||||||||||||||||||||||||||||||
| Segment income margin % | 15.7 | % | 15.4 | % | ||||||||||||||||||||||||||||||||||
Adjusted segment income (a) | $ | 6,952 | $ | 6,303 | ||||||||||||||||||||||||||||||||||
Adjusted segment income margin % (a) | 16.6 | % | 16.1 | % | ||||||||||||||||||||||||||||||||||
(a) See “—Non-GAAP Reconciliation.”
Net sales
Net sales increased to $41.8 million for the three months ended March 29, 2025 from $39.1 million for the three months ended March 30, 2024, an increase of $2.7 million, or 6.7%.
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The year-over-year net sales increase was driven by the following:
| Three Months Ended | ||||||||||||||
| March 29, 2025 | ||||||||||||||
| Volume | 8.0 | % | ||||||||||||
| Price, net of allowances and discounts | 1.1 | % | ||||||||||||
| Currency and other | (2.4) | % | ||||||||||||
| Total | 6.7 | % | ||||||||||||
The increase for the three months ended March 29, 2025 in net sales 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.
Gross profit and Gross profit margin
Gross profit decreased to $14.6 million for the three months ended March 29, 2025 from $14.7 million for the three months ended March 30, 2024, a decrease of $0.1 million, or 0.4%.
Gross profit margin decreased to 35.0% for the three months ended March 29, 2025 from 37.6% for the three months ended March 30, 2024, a decrease of 260 basis points, primarily driven by underutilization in our Europe manufacturing facilities and unfavorable mix, partially offset by higher net price.
Segment income and Segment income margin
Segment income increased to $6.5 million for the three months ended March 29, 2025 from $6.0 million for the three months ended March 30, 2024, an increase of $0.5 million, or 8.3%. This was primarily driven by an increase in net sales as discussed above.
Segment income margin increased by 30 basis points from 15.4% for the three months ended March 30, 2024 to 15.7% for the three months ended March 29, 2025, resulting from higher net sales.
Adjusted segment income and Adjusted segment income margin
Adjusted segment income increased to $7.0 million for the three months ended March 29, 2025 from $6.3 million for the three months ended March 30, 2024, an increase of $0.7 million or 10.3%. This was primarily driven by the increased sales after adjusting for the non-cash and specified costs described in “—Non-GAAP Reconciliation” below.
Adjusted segment income margin increased to 16.6% for the three months ended March 29, 2025 from 16.1% for the three months ended March 30, 2024, an increase of 50 basis points.
Refer to “—Non-GAAP Reconciliation” for a reconciliation of segment income to adjusted segment income.
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Non-GAAP Reconciliation
The Company uses EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted segment income and adjusted segment income margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies. These metrics are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures.
EBITDA is defined as earnings before interest (including amortization of debt costs), income taxes, depreciation, and amortization. Adjusted EBITDA is defined as EBITDA adjusted for the impact of restructuring related income or expenses, stock-based compensation, currency exchange items, and certain non-cash, nonrecurring, or other items that are included in net income and EBITDA that we do not consider indicative of our ongoing operating performance. Adjusted EBITDA margin is defined as adjusted EBITDA divided by net sales. Adjusted segment income is defined as segment income adjusted for the impact of depreciation, amortization of intangible assets recorded within cost of sales, stock-based compensation and certain non-cash, nonrecurring or other items that are included in segment income that we do not consider indicative of the ongoing segment operating performance. Adjusted segment income margin is defined as adjusted segment income divided by segment net sales.
EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted segment income and adjusted segment income margin are not recognized measures of financial performance under GAAP. We believe these non-GAAP measures provide analysts, investors and other interested parties with additional insight into the underlying trends of our business and assist these parties in analyzing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our 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. These non-GAAP measures are not intended to replace the presentation of our financial results in accordance with GAAP.
EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted segment income and adjusted segment income margin are not calculated in the same manner by all companies, and accordingly, are not necessarily comparable to similarly titled measures of other companies and may not be an appropriate measure for performance relative to other companies. EBITDA, adjusted EBITDA, adjusted segment income should not be construed as indicators of a company’s operating performance in isolation from, or as a substitute for, net income (loss) and segment income which are prepared in accordance with GAAP. We have presented EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted segment income and adjusted segment income margin solely as supplemental disclosure because we believe it allows for a more complete analysis of results of operations. In the future we may incur expenses such as those added back to calculate adjusted EBITDA. Our presentation of adjusted EBITDA and adjusted segment income should not be construed as an inference that our future results will be unaffected by these items.
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Net Income to Adjusted EBITDA and Adjusted EBITDA Margin
Following is a reconciliation from net income to adjusted EBITDA and adjusted EBITDA margin for the three months ended March 29, 2025 and March 30, 2024:
| (Dollars in thousands) | Three Months Ended | |||||||||||||||||||||||||||||||||||||
| March 29, 2025 | March 30, 2024 | |||||||||||||||||||||||||||||||||||||
| Net income | $ | 14,333 | $ | 9,840 | ||||||||||||||||||||||||||||||||||
| Depreciation | 6,263 | 4,310 | ||||||||||||||||||||||||||||||||||||
| Amortization | 8,535 | 8,543 | ||||||||||||||||||||||||||||||||||||
Interest expense, net | 13,651 | 18,592 | ||||||||||||||||||||||||||||||||||||
| Income taxes | 4,348 | 3,065 | ||||||||||||||||||||||||||||||||||||
| EBITDA | 47,130 | 44,350 | ||||||||||||||||||||||||||||||||||||
Stock-based compensation (a) | 46 | 190 | ||||||||||||||||||||||||||||||||||||
Currency exchange items (b) | (6) | 54 | ||||||||||||||||||||||||||||||||||||
Acquisition and restructuring related expense, net (c) | 1,926 | 504 | ||||||||||||||||||||||||||||||||||||
Other (d) | 6 | (57) | ||||||||||||||||||||||||||||||||||||
| Total Adjustments | 1,972 | 691 | ||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 49,102 | $ | 45,041 | ||||||||||||||||||||||||||||||||||
| Net income margin | 6.3 | % | 4.6 | % | ||||||||||||||||||||||||||||||||||
| Adjusted EBITDA margin | 21.5 | % | 21.2 | % | ||||||||||||||||||||||||||||||||||
| (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 (gains) losses on foreign denominated monetary assets and liabilities and foreign currency contracts. | |||||||
| (c) | Adjustments in the three months ended March 29, 2025 are primarily driven by $1.7 million of transaction and integration costs associated with the acquisition of the ChlorKing business and $0.2 million of separation costs for the consolidation of operations in North America. 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. | |||||||
| (d) | Adjustments in the three months ended March 29, 2025 are primarily driven by losses on the sale of assets. 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 litigation. | |||||||
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Following is a reconciliation from segment income to adjusted segment income for NAM for the three months ended March 29, 2025 and March 30, 2024 (dollars in thousands):
| NAM | Three Months Ended | |||||||||||||||||||||||||
| March 29, 2025 | March 30, 2024 | |||||||||||||||||||||||||
| Segment income | $ | 43,454 | $ | 39,742 | ||||||||||||||||||||||
| Depreciation | 5,500 | 3,887 | ||||||||||||||||||||||||
| Amortization | 1,700 | 1,643 | ||||||||||||||||||||||||
| Stock-based compensation | — | 12 | ||||||||||||||||||||||||
Other (a) | 3 | 19 | ||||||||||||||||||||||||
| Total adjustments | 7,203 | 5,561 | ||||||||||||||||||||||||
| Adjusted segment income | $ | 50,657 | $ | 45,303 | ||||||||||||||||||||||
| Segment income margin | 23.2 | % | 22.9 | % | ||||||||||||||||||||||
| Adjusted segment income margin | 27.1 | % | 26.1 | % | ||||||||||||||||||||||
| (a) | The three months ended March 29, 2025 and March 30, 2024 represents losses on the sale of assets, which the Company believes are not representative of its ongoing business operations. | |||||||
Following is a reconciliation from segment income to adjusted segment income for E&RW for the three months ended March 29, 2025 and March 30, 2024 (dollars in thousands):
| E&RW | Three Months Ended | |||||||||||||||||||||||||
| March 29, 2025 | March 30, 2024 | |||||||||||||||||||||||||
| Segment income | $ | 6,538 | $ | 6,036 | ||||||||||||||||||||||
| Depreciation | 414 | 257 | ||||||||||||||||||||||||
| Amortization | — | — | ||||||||||||||||||||||||
| Stock-based compensation | — | 10 | ||||||||||||||||||||||||
| Total Adjustments | 414 | 267 | ||||||||||||||||||||||||
| Adjusted segment income | $ | 6,952 | $ | 6,303 | ||||||||||||||||||||||
| Segment income margin | 15.7 | % | 15.4 | % | ||||||||||||||||||||||
| Adjusted segment income margin | 16.6 | % | 16.1 | % | ||||||||||||||||||||||
Liquidity and Capital Resources
Our primary sources of liquidity are net cash provided by operating activities and availability under the ABL Revolving Credit Facility (“ABL Facility”).
Primary working capital requirements are for raw materials, component and certain finished goods inventories and supplies, payroll, manufacturing, freight and distribution, facility, and other operating expenses. Cash flow from operations and working capital requirements fluctuate during the year, driven primarily by the seasonal demand for our products, an Early Buy program, the timing of inventory purchases and receipt of customer payments, and as such, the utilization of the ABL Facility may fluctuate during the year.
Unrestricted cash and cash equivalents totaled $181.3 million as of March 29, 2025, which is a decrease of $15.3 million from $196.6 million at December 31, 2024.
We focus on increasing cash flow, solidifying the liquidity position through working capital initiatives, and paying our debt obligations, while continuing to fund business growth initiatives and return of capital to shareholders. We believe that net cash
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provided by operating activities and availability under the ABL Facility will be adequate to finance our working capital requirements, inclusive of capital expenditures, and debt service over the next 12 months.
Accounts Receivable Sales
On July 3, 2024, we entered into a Receivables Purchase Agreement under which we may offer to sell eligible accounts receivable. The agreement is uncommitted and the eligible accounts receivable to be sold under the agreement consist of up to $125 million in accounts receivable generated by sales to specified customers of the Company. The Company will be paid a discounted purchase price for each receivable sold. The discount rate used to determine the purchase price for the subject receivables is based upon an annual interest rate equal to the forward-looking term rate based on the secured overnight financing rate for the period of time between payment to the Company and the due date for the receivable plus a buffer period specific to the obligor, plus a margin applicable to the specified obligor.
Transactions under this agreement are accounted for as sales of accounts receivable, and the receivables sold are removed from the unaudited condensed consolidated balance sheets at the time of the sales transaction. For ease of administration, the Company collects customer payments related to the receivables sold and remits those payments to the purchaser. Proceeds received from the sales of accounts receivable are classified as operating cash flows and collections of previously sold accounts receivable not yet submitted to the financial institution are classified as financing cash flows in the unaudited condensed consolidated statements of cash flows. We record the discount in the “Other expense, net” line in the unaudited condensed consolidated statements of operations.
During the three months ended March 29, 2025, there were $99.1 million of proceeds from the sale of $100.0 million of receivables under the Receivables Purchase Agreement, and $100.0 million of sold receivables remained to be collected and remitted to the transferee as of March 29, 2025. The loss recognized on the sales for the three months ended March 29, 2025 was $0.9 million.
Credit Facilities
The First Lien Term Facility and ABL Facility (collectively “Credit Facilities”) contain various restrictions, covenants and collateral requirements. Refer to Note 7. Long-Term Debt of notes to our unaudited condensed consolidated financial statements for further information on the terms of the Credit Facilities. We also have a revolving credit facility for our Spain subsidiary in the amount of €0.5 million as a local source of liquidity. As of March 29, 2025, the Spain revolving facility balance was zero with a borrowing availability of €0.5 million.
Long-term debt consisted of the following (in thousands):
| March 29, 2025 | December 31, 2024 | |||||||||||||
| First Lien Term Facility, due May 28, 2028 | $ | 965,000 | $ | 965,000 | ||||||||||
| ABL Revolving Credit Facility | — | — | ||||||||||||
| Other bank debt | 5,871 | 6,461 | ||||||||||||
| Finance lease obligations | 1,886 | 2,448 | ||||||||||||
| Subtotal | 972,757 | 973,909 | ||||||||||||
| Less: Current portion of the long-term debt | (13,637) | (13,991) | ||||||||||||
| Less: Unamortized debt issuance costs | (8,744) | (9,356) | ||||||||||||
| Total | $ | 950,376 | $ | 950,562 | ||||||||||
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ABL Facility
The ABL Facility provides for an aggregate amount of borrowings up to $425.0 million, with a peak season commitment of $475.0 million, subject to a borrowing base calculation based on available eligible receivables, eligible inventory, and qualified cash in North America. Accounts receivable for customers whose receivables are eligible for purchase under the Receivables Purchase Agreement, regardless of whether any amount of outstanding accounts receivable with those specific customers have been sold under the Receivables Purchase Agreement, are not eligible accounts receivable under the ABL Facility. An amount of up to 30% (or up to 40% with agent consent) of the then-outstanding commitments under the ABL Facility is available to our Canada and Spain subsidiaries. A portion of the ABL Facility not to exceed $50 million is available for the issuance of letters of credit in U.S. Dollars, of which $20.0 million is available for the issuance of letters of credit in Canadian dollars. The ABL Facility also includes a $50.0 million swingline loan facility and a $13.1 million First-In, Last-Out Sublimit (“FILO Sublimit”). The maturity of the facility is June 1, 2026.
On June 26, 2024, the Company entered into the Fourth Amendment to its existing ABL Revolving Credit Facility (the “ABL Facility”) to replace the Canadian reference rate from the Canadian Dollar Offered Rate (“CDOR”) to the Canadian Overnight Repo Rate Average (“CORRA”).
The borrowings under the ABL Facility bear interest at a rate equal to the Secured Overnight Financing Rate (“Term SOFR”) plus a 0.10% credit spread adjustment and a margin of between 1.25% to 1.75%, or at a base rate plus a margin of 0.25% to 0.75% with no credit spread adjustment, while the FILO Sublimit borrowings bear interest at a rate equal to Term SOFR or a base rate plus a margin of between 2.25% to 2.75% or 1.25% to 1.75%, respectively.
For the three months ended March 29, 2025, the average borrowing base under the ABL Facility was $190.9 million and the average loan balance outstanding was zero. As of March 29, 2025, the loan balance was zero with a borrowing availability of $216.2 million.
First Lien Term Facilities
The Company's First Lien Term Facility bears interest at a rate equal to a base rate or SOFR, plus, in either case, an applicable margin. The applicable margin is 2.75% per annum with a 0.50% floor, with a stepdown to 2.50% per annum with a 0.50% floor when net secured leverage as defined by the First Lien Credit Agreement is less than 2.5x. The loan under the First Lien Term Facility amortizes quarterly at a rate of 0.25% of the original principal amount and requires a $2.5 million repayment of principal on the last business day of each March, June, September and December.
Under the agreement governing the First Lien Credit Facility (the “First Lien Credit Agreement”), the Company must make an annual mandatory prepayment of principal for between 0% and 50% of the excess cash and subject to permitted deductions, as defined in the First Lien Credit Agreement, generated in the prior calendar year. The amount due varies with the First Lien Leverage Ratio as defined in the First Lien Credit Agreement, from zero if the First Lien Leverage Ratio is less than or equal to 2.5x, to fifty percent if the First Lien Leverage Ratio is greater than 3.0x, in each case as of December 31 of the prior year. The First Lien Term Facility matures on May 28, 2028.
As of March 29, 2025, the balance outstanding under the First Lien Term Facility was $965.0 million.
For the three months ended March 29, 2025, the effective interest rate on borrowings under the First Lien Term Facility, including the impact of an interest rate hedge, was 6.02%. The effective interest rate is comprised of 6.94% for interest and 0.26% for financing costs, partially offset by 1.18% for interest income on the interest rate swaps.
Covenant Compliance
The Credit Facilities contain various restrictions, covenants and collateral requirements. As of March 29, 2025, we were in compliance with all covenants under the Credit Facilities.
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Sources and Uses of Cash
Following is a summary of our cash flows from operating, investing, and financing activities:
| (Dollars in thousands) | Three Months Ended | |||||||||||||
| March 29, 2025 | March 30, 2024 | |||||||||||||
| Net cash used in operating activities | $ | (5,850) | $ | (77,204) | ||||||||||
| Net cash (used in) provided by investing activities | (6,111) | 19,115 | ||||||||||||
| Net cash used in financing activities | (3,735) | (3,082) | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 440 | (1,053) | ||||||||||||
| Change in cash and cash equivalents | $ | (15,256) | $ | (62,224) | ||||||||||
Net cash used in operating activities
Net cash used in operating activities decreased to $5.9 million for the three months ended March 29, 2025 from $77.2 million for the three months ended March 30, 2024, a decrease of $71.3 million, or 92.4%. The decrease in cash used was 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.
Net cash (used in) provided by investing activities
Net cash used in investing activities was $6.1 million for the three months ended March 29, 2025 compared to net cash provided by investing activities of $19.1 million for the three months ended March 30, 2024, a change of $25.2 million, or 132.0%. The cash used in the three months ended March 29, 2025 was driven by purchases of property, plant and equipment compared to the prior-year period which had cash provided by investing activities driven by the proceeds of certificates of deposit investments.
Net cash used in financing activities
Net cash used in financing activities was $3.7 million for the three months ended March 29, 2025 compared to $3.1 million for the three months ended March 30, 2024, an increase of $0.6 million, or 21.2%. The increase in cash used was primarily driven by increased purchases of common stock associated with stock based compensation activity.
Off-Balance Sheet Arrangements
We had $4.2 million and $4.3 million of outstanding letters of credit on our ABL Revolving Credit Facility as of March 29, 2025 and December 31, 2024, respectively.
Critical Accounting Estimates
Our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of financial statements requires management to make estimates and assumptions that affect amounts reported therein. The estimates that require management’s most difficult, subjective or complex judgments are described in Part II, Item 7, under the heading “Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2024 (our “Annual Report on Form 10-K”), which section is incorporated herein by reference, and remain unchanged through the first three months of 2025.
Recently Issued Accounting Standards
See Note 2. Significant Accounting Policies of notes to our unaudited condensed consolidated financial statements for additional information.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the potential economic loss that may result from adverse changes in the fair value of financial instruments. We are exposed to various market risks, including changes in interest rates and foreign currency rates. Periodically, we use derivative financial instruments to manage or reduce the impact of changes in interest rates and foreign currency rates.
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Counterparties to all derivative contracts are major financial institutions. All instruments are entered into for other than trading purposes.
There have been no material changes in the interest rate risk during the three months ended March 29, 2025 from what we reported in our Annual Report on Form 10-K.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to provide reasonable assurance that information, which is required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting during the three months ended March 29, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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| PART II - OTHER INFORMATION | ||
ITEM 1. LEGAL PROCEEDINGS
In addition to the matters discussed in this report and in the notes to our unaudited condensed consolidated financial statements, we are from time to time subject to, and are presently involved in, other litigation and legal proceedings arising in the ordinary course of business. These proceedings could relate to commercial or contractual disputes with suppliers, customers or parties to acquisitions and divestitures, intellectual property matters, product liability, the use or installation of our products, consumer matters, employment and labor matters, and environmental, safety and health matters, including claims based on alleged exposure to asbestos-containing product components. Where appropriate, these matters have been submitted to the Company’s insurance carriers. We believe that the outcome of such other litigation and legal proceedings will not have a material adverse effect on our business, financial condition, results of operations and cash flows.
On August 2, 2023, a securities class action complaint was filed in the United States District Court for the District of New Jersey against the Company and certain of our current directors and officers (Kevin Holleran and Eifion Jones) and MSD Partners and CCMP Capital Advisors, LP on behalf of a putative class of stockholders who acquired shares of our common stock between March 2, 2022 and July 27, 2022. That action is captioned City of Southfield Fire and Police Retirement System vs. Hayward Holdings, Inc., et al., 2:23-cv-04146-WJM-ESK (D.N.J.) (“City of Southfield”). On September 28, 2023, a second, related securities class action complaint was filed in the United States District Court for the District of New Jersey against the Company and certain of our current directors and officers (Kevin Holleran and Eifion Jones) and MSD Partners and CCMP Capital Advisors, LP on behalf of a putative class of stockholders who acquired shares of our common stock between October 27, 2021 and July 28, 2022. That action is captioned Erie County Employees’ Retirement System vs. Hayward Holdings, Inc., et al., 2:23-cv-04146-WJM-ESK (D.N.J.) (“Erie County”). On December 19, 2023, the Court issued a ruling consolidating the two securities class actions (City of Southfield and Erie County) under the City of Southfield docket (the “Securities Class Action”) and appointing a lead plaintiff. In a consolidated class action complaint filed March 4, 2024, the Securities Class Action alleged on behalf of a putative class of stockholders who acquired shares of our common stock between October 27, 2021 and July 28, 2022, among other things, that the Company, Kevin Holleran, and Eifion Jones violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by, among other things, making materially false or misleading statements regarding inventory, growth, and demand trends and the Company’s financial projections for 2022. On October 2, 2024, the Court issued an Opinion and Order dismissing the consolidated class action complaint and granting the lead plaintiff leave to file an amended complaint within 30 days. On November 1, 2024, lead plaintiff filed a consolidated amended class action complaint making substantially similar allegations as in the consolidated class action complaint, but adding additional defendants affiliated with MSD Partners and CCMP Capital Advisors, LP. On December 18, 2024, the Company and all other defendants moved to dismiss the consolidated amended class action complaint. The briefing on the motion to dismiss was completed on March 4, 2025. The Securities Class Action seeks unspecified monetary damages on behalf of a putative class and an award of costs and expenses, including reasonable attorneys’ fees.
On November 27, 2023, a shareholder derivative lawsuit was filed in the United States District Court for the District of New Jersey against current and past officers and directors of the Company captioned Heicklen v. Holleran, et al., 2:23-cv-22649 (D.N.J.) (the “Derivative Action”). The Derivative Action alleges breaches of fiduciary duties to Company stockholders, aiding and abetting breaches of fiduciary duties, unjust enrichment, corporate waste, and violations of Section 10(b) of the Securities Exchange Act of 1934 in connection with the claims in the Securities Class Action. The Derivative Action seeks recovery of unspecified damages and attorney’s fees and costs, as well as improvements to the Company’s corporate governance and internal procedures. The Derivative Action has been stayed pending final decision on the motion to dismiss filed in the Securities Class Action.
We dispute the allegations of wrongdoing in the Securities Class Action and the Derivative Action and intend to vigorously defend ourselves in these matters. In view of the complexity and ongoing and uncertain nature of the outstanding proceedings and inquiries, at this time we are unable to estimate a reasonably possible financial loss or range of financial loss, if any, that we may incur to resolve or settle the Securities Class Action and the Derivative Action.
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ITEM 1A. RISK FACTORS
An investment in our common stock involves risks. For a detailed discussion of the risks that affect our business please refer to the section titled “Risk Factors” in our Annual Report on Form 10-K. There have been no material changes to our risk factors as previously disclosed in our Annual Report on Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The Company had no repurchases of its common stock, par value $0.001 per share, in the quarter ended March 29, 2025. On July 26, 2022, the Board of Directors renewed the initial authorization of its share repurchase program (the “Share Repurchase Program”) such that the Company is authorized, commencing at that time, to repurchase from time to time up to an aggregate of $450.0 million of its common stock with such authority expiring on July 26, 2025.
Under the Share Repurchase Program, the Company may purchase shares of its common stock on a discretionary basis from time to time and may be conducted through privately negotiated transactions, including with our significant stockholders, as well as through open market repurchases or other means, including through Rule 10b5-1(c) trading plans or through the use of other techniques such as accelerated share repurchases. The amount and timing of future repurchases may vary depending on market conditions and the level of operating, financing and other investing activities.
As of March 29, 2025, $400.0 million remained available under the current authorization for additional share repurchases. The Company did not make purchases of its common stock under the Share Repurchase Program for the three months ended March 29, 2025.
| Period | (a) Total Number of Shares Purchased | (b) Average Price Paid per Share | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Program | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Program | ||||||||||||||||||||||
| January 1 – February 1, 2025 | — | $ | — | — | $ | 400,000,000 | ||||||||||||||||||||
| February 2 – March 1, 2025 | — | — | — | 400,000,000 | ||||||||||||||||||||||
| March 2 – March 29, 2025 | — | — | — | 400,000,000 | ||||||||||||||||||||||
| Total | — | $ | — | — | $ | 400,000,000 | ||||||||||||||||||||
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ITEM 5. OTHER INFORMATION
Securities Trading Plans
During the three months ended March 29, 2025, certain of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) entered into contracts, instructions, or written plans for the purchase or sale of our securities that are intended to satisfy the conditions specified in Rule 10b5-1(c) under the Exchange Act for an affirmative defense against liability for trading in securities on the basis of material nonpublic information. We refer to these contracts, instructions, and written plans as “Rule 10b5-1 Trading Plans” and each one as a “Rule 10b5-1 Trading Plan.”
We describe the material terms of all such trading plans below.
Kevin Holleran, President, Chief Executive Officer
Eifion Jones, Senior Vice President, Chief Financial Officer
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ITEM 6. EXHIBITS
| Exhibit No. | Description | ||||||||||||||||
Form of Restricted Stock Unit Agreement under the Registrant's 2021 Plan (Revised 2025) | |||||||||||||||||
Form of Performance Stock Unit Agreement under the Registrant's 2021 Plan (Revised 2025) | |||||||||||||||||
| Certification of Chief Executive Officer of Hayward Holdings, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||||||||||||
| Certification of Chief Financial Officer of Hayward Holdings, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||||||||||||
| Certification of Chief Executive Officer of Hayward Holdings, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||||||||||||
| Certification of Chief Financial Officer of Hayward Holdings, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||||||||||||
| 101.INS | Inline XBRL Instance Document. | ||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | ||||||||||||||||
| 101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document. | ||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Label Linkbase Document. | ||||||||||||||||
| 101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document. | ||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted as Exhibits 101.*) | ||||||||||||||||
35
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this day of May 1, 2025.
| HAYWARD HOLDINGS, INC. | ||||||||
| By: | /s/ Eifion Jones | |||||||
| Name: | Eifion Jones | |||||||
| Title: | Senior Vice President & Chief Financial Officer | |||||||
36
Exhibit 10.1
| Name: | <NAME> | ||||
Number of Restricted Stock Units: | <# Granted> | ||||
Date of Grant: | <DATE> | ||||
Vesting Commencement Date: | <DATE> | ||||
HAYWARD HOLDINGS, INC. 2021 EQUITY INCENTIVE PLAN
Restricted Stock Unit Agreement
This agreement (this “Agreement”) evidences a grant (the “Award”) of Restricted Stock Units (“RSUs”) by Hayward Holdings, Inc., a Delaware corporation (the “Company”), to the individual named above (the “Participant”), pursuant to and subject to the terms of the Hayward Holdings, Inc. 2021 Equity Incentive Plan (as from time to time amended and in effect, the “Plan”). Except as otherwise defined herein, all capitalized terms used herein have the same meaning as in the Plan.
1.Grant of RSUs. On the date of grant set forth above (the “Date of Grant”), the Company granted to the Participant the number of Restricted Stock Units (“RSUs”) set forth above, giving the Participant the conditional right to receive, without payment and pursuant to and subject to the terms and conditions set forth in this Agreement and in the Plan, one share of Stock (a “Share”) with respect to each RSU subject to this Award, subject to adjustment pursuant to Section 7 of the Plan in respect of transactions occurring after the date hereof.
The RSUs are granted to the Participant in connection with the Participant’s Employment with the Company.
2.Vesting. Unless earlier terminated, forfeited, relinquished or expired, one-third (1/3) of the RSUs will vest on each of the first three (3) anniversaries (each, a “Vesting Date”) of the vesting commencement date set forth above (the “Vesting Commencement Date”), with the number of RSUs that vest on each such date being rounded down to the nearest whole RSU except for the third (3rd) anniversary of the Vesting Commencement Date when the Award will become vested as to one hundred percent (100%) of the RSUs, subject to the Participant remaining in continuous Employment from the Date of Grant through the applicable Vesting Date. In the event of a Change in Control in connection with which an acquiring or surviving entity assumes, continues or substitutes for all or any portion of this Award pursuant to Section 7(a)(1) of the Plan and the Participant’s Employment is terminated by the Company, any successor thereto, or any of their respective affiliates without Cause or, if the Participant is party to an employment, change of control or severance-benefit agreement with the Company or any of its subsidiaries that contains a definition of “Good Reason,” if the Participant resigns for Good Reason), in either case, on or within the eighteen (18)-month period following the consummation of the Change in Control, such RSUs, or any rights or property substituted therefor, to the extent then unvested and outstanding, will vest in full as of immediately prior to such termination of Employment. If the RSUs (or any portion thereof) are not assumed, continued or substituted in connection with the Change in Control pursuant to Section 7(a)(1) of the Plan, the RSUs (or such
-1- | ||
portion), to the extent then unvested, will vest in full as of immediately prior to such Change in Control.
3.Cessation of Service. If the Participant’s Employment ceases for any reason, except as expressly provided for below or in Section 2 above or in a written agreement between the Participant and the Company or one of its affiliates that is in effect at the time of such cessation of Employment, the RSUs, to the extent not then vested, will be immediately forfeited for no consideration and the RSUs, to the extent then outstanding and vested (including as a result of any accelerated vesting in connection with such cessation of Employment under Section 2 above or such a written agreement), will be settled in accordance with Section 4 below. Notwithstanding the foregoing, (a) if the Participant’s Employment is terminated for Cause or occurs in circumstances that in the determination of the Administrator would have constituted grounds for the Participant’s Employment to be terminated for Cause (in each case, without regard to the lapsing of any required notice or cure periods in connection therewith), any vested RSUs will be immediately forfeited for no consideration and (b) if the Participant’s Employment ceases due to the Participant’s Retirement, the unvested RSUs scheduled to vest on the next-scheduled Vesting Date (the “Retirement Vesting Date”) shall become immediately vested upon the Retirement Vesting Date, in an amount equal to the product of the total number of RSUs scheduled to vest on the Retirement Vesting Date multiplied by the quotient of (i) the whole number of calendar months (with any portion of a calendar month greater than 15 days being considered a whole calendar month and any portion of a month constituting 15 or fewer days not being considered a whole calendar month) from the Date of Grant or the last scheduled Vesting Date (whichever is later) to the date of the Participant’s Retirement, which shall not exceed 12, divided by (ii) 12; provided, however, that no RSUs will vest under this clause (b) if (x) the Participant’s Retirement occurs within six months of the Date of Grant or (y) the Participant engages, directly or indirectly, whether as principal, agent, employee, consultant, distributor, representative or otherwise in any Relevant Business on or prior to the Retirement Vesting Date (other than serving as a non-employee director). For purposes of this Section 3, “Retirement” shall mean a Participant’s Employment ceasing (other than as a result of termination by the Company) if the Participant (x) is at least 60 years of age, (y) has, at the time of the cessation of the Participant’s Employment, been an Employee of the Company for at least five years of continuous Employment, and (z) provides to the Company a written attestation indicating the Participant’s intent to retire from active employment with any Relevant Business (other than serving as a non-employee director); and “Relevant Business” shall mean any company (other than the Company) with securities registered pursuant to Section 12(b) or Section 12(g) of the Securities Exchange Act of 1934, as amended, as determined by the Administrator in its sole discretion. The Administrator shall have the sole and absolute discretion to determine whether a Retirement has occurred and whether the Participant has complied with the conditions of Retirement through the Retirement Vesting Date.
4.Delivery of Shares. The Company shall, as soon as practicable upon the vesting of any RSUs (but in no event later than thirty (30) days following the date on which such RSUs vest), effect delivery of the Shares with respect to such vested RSUs to the Participant (or, in the event of the RSUs have passed to the estate or beneficiary of the Participant or a permitted transferee, by such estate or beneficiary or permitted transferee) and, following such delivery of Shares, such vested RSUs shall cease to be outstanding.
-2- | ||
5.Nontransferability. The RSUs may not be transferred except as expressly permitted under Section 6(a)(3) of the Plan.
6.Forfeiture; Recovery of Compensation. By accepting, or being deemed to have accepted, the RSUs, the Participant expressly acknowledges and agrees that his or her rights, and those of any permitted transferee, with respect to the RSUs, including the right to any Shares acquired in respect of the RSUs and any amounts received in respect thereof, are subject to Section 6(a)(5) of the Plan (including any successor provision). The Participant further agrees to be bound by the terms of any applicable clawback or recoupment policy of the Company. Nothing in the preceding sentence will be construed as limiting the general application of Section 8 of this Agreement.
7.Taxes. The Participant expressly acknowledges and agrees that the Participant’s rights hereunder, including the right to be issued Shares upon settlement of the Award, are subject to the Participant promptly paying to the Company in cash or by check (or by such other means as may be acceptable to the Administrator) all taxes and other amounts required to be withheld. No Shares will be issued in respect of the Award unless and until the Participant has remitted to the Company an amount in cash sufficient to satisfy any withholding requirements, or has made other arrangements satisfactory to the Company with respect to such amounts. Unless otherwise determined by the Company, the Company shall automatically satisfy any tax withholding obligations by withholding from the Shares that would otherwise be delivered in connection with a Vesting Date a number of Shares having a fair market value equal to the minimum statutory amount required to be withheld to satisfy such tax withholding obligations and/or by causing such number of Shares to be sold in accordance with a sell-to-cover arrangement. The Participant authorizes the Company and its subsidiaries to withhold any amounts due in respect of any required withholdings by withholding from the Shares otherwise deliverable in connection with the RSUs, by causing such Shares to be sold in accordance with a sell-to-cover arrangement and/or by withholding from any amounts otherwise owed to the Participant. Nothing in this Section 7, however, shall be construed as relieving the Participant of any liability for satisfying his or her tax obligations relating to the Award. If a sell-to-cover arrangement is selected as contemplated hereunder the Participant shall bear all costs associated with the sale of Shares under such arrangement.
8.Provisions of the Plan. This Agreement is subject in its entirety to the provisions of the Plan, which are incorporated herein by reference. A copy of the Plan as in effect on the Date of Grant has been made available to the Participant. By accepting, or being deemed to have accepted, the Award, the Participant agrees to be bound by the terms of the Plan and this Agreement. In the event of any conflict between the terms of this Agreement and the Plan, the terms of the Plan will control.
9.Acknowledgements. The Participant acknowledges and agrees that (i) this Agreement may be executed in two or more counterparts, each of which will be an original and all of which together will constitute one and the same instrument, (ii) this Agreement may be executed and exchanged using facsimile, portable document format (PDF) or electronic signature, which, in each case, will constitute an original signature for all purposes hereunder, and (iii) such signature by the Company will be binding against the Company and will create a legally binding agreement when this Agreement is countersigned by the Participant.
-3- | ||
[Signature page follows.]
-4- | ||
The Company, by its duly authorized officer, and the Participant have executed this Agreement.
HAYWARD HOLDINGS, INC.
By:
Name: Raymond Lewis
Senior Vice President,
Title: Chief Human Resources Officer
Agreed and Accepted:
By
<NAME>
Signature Page to Restricted Stock Unit Agreement
Exhibit 10.2
| Name: | #ParticipantName# | ||||
| Number of Performance Stock Units at Target: | #QuantityGranted# | ||||
Date of Grant: | #GrantDate# | ||||
HAYWARD HOLDINGS, INC.
2021 EQUITY INCENTIVE PLAN
2021 EQUITY INCENTIVE PLAN
20[ ] Performance Stock Unit Agreement
This agreement (this “Agreement”) evidences a grant (the “Award”) of Performance Stock Units (“PSUs”) by Hayward Holdings, Inc., a Delaware corporation (the “Company”), to the individual named above (the “Participant”), pursuant to and subject to the terms of the Hayward Holdings, Inc. 2021 Equity Incentive Plan (as from time to time amended and in effect, the “Plan”). Except as otherwise defined herein, all capitalized terms used herein have the same meaning as in the Plan.
1.Grant of PSUs. On the date of grant set forth above (the “Date of Grant”), the Company granted to the Participant Performance Stock Units (“PSUs”). The number of PSUs the Participant will earn will depend on the performance of the Company relative to certain performance goals for the three-year performance cycle from January 1, 20[ ] through December 31, 20[ ] (the “Performance Cycle”), as may be adjusted by a modifier based on the relative total shareholder return ( “Relative TSR”) of the Company’s common stock for the Performance Cycle, as compared to the S&P SmallCap 600 Industrials Index. The performance goals and their relative weightings with respect to the PSUs, as well as the formula for calculating the modifier based on the Company’s Relative TSR (the “TSR Modifier”), are set forth in Appendix A hereto (“Appendix A”). The Award grants the Participant the conditional right to receive, without payment and pursuant to and subject to the terms and conditions set forth in this Agreement and in the Plan, one share of Stock (a “Share”) for each PSU that is earned based on achievement of the performance goals for the Performance Cycle, as modified by the TSR Modifier, as set forth in Appendix A, subject to adjustment pursuant to Section 7 of the Plan in respect of transactions occurring after the date hereof. The number of PSUs set forth above is based upon achievement of the “Target” level of performance with respect to each of the performance goals specified in Appendix A, before application of the TSR Modifier. The Participant will not earn any PSUs under the Award if the Company’s performance during the Performance Cycle is below “Threshold” performance level for all of the performance goals specified in Appendix A. If actual performance with respect to a performance goal for the Performance Cycle equals or exceeds “Threshold” level specified in Appendix A for a performance goal, the number of PSUs earned will range from the Target number of PSUs set forth above based on the level of attainment against the performance goal and the weighting of the performance goal as specified in Appendix A, as adjusted by the application of the TSR Modifier. The Award is granted to the Participant in connection with the Participant’s Employment with the Company.
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2.Determination of Achievement of Performance Levels. The determination of whether, and the extent to which, the performance goals have been satisfied will be made by the Compensation Committee (the “Compensation Committee”) of the Company’s Board of Directors, in its sole and absolute discretion, following the end of the Performance Cycle. The Compensation Committee may in its sole discretion increase or decrease the number of PSUs determined to be earned to equitably account for any events or developments affecting achievement of the performance goals occurring during the Performance Cycle that were not anticipated at the Date of Grant or for the application of the TSR Modifier. In the event of a Covered Transaction, including a Change in Control, the Administrator may, in its sole and absolute discretion, take such actions with respect to the Award as are permitted under Section 7(a) of the Plan, including accelerating the Award and determining the appropriate levels of achievement of the performance goals.
3.Cessation of Service-General. Except as expressly provided for in this Section 3, Section 4 hereof or in a written agreement between the Participant and the Company or one of its affiliates that is in effect at the time of such cessation of Employment, if the Participant’s Employment ceases for any reason at any time prior to the later of (i) the completion of the Performance Cycle or (ii) the determination by the Compensation Committee, pursuant to Section 2 hereof, of the extent to which the performance goals for the Performance Cycle have been satisfied and the extent of any modification by application of the TSR Modifier (such later date being referred to as the “Vesting Date”), the Award will be immediately forfeited for no consideration. Notwithstanding the foregoing, if the Participant’s Employment ceases prior to the Vesting Date (i) due to Participant’s Disability, the Participant’s PSUs earned will be adjusted pro rata, based upon the full number of calendar months elapsed (with any portion of a calendar month greater than 15 days being considered a whole calendar month and any portion of a month constituting 15 or fewer days not being considered a whole calendar month) at the time of termination of Employment (but not to exceed the total number of months in the Performance Cycle) relative to the total number of calendar months in the Performance Cycle, with the actual payout of Shares with respect to the PSUs not occurring until after the end of the Performance Cycle and the determination by the Compensation Committee of the extent to which the performance goals for the Performance Cycle have been satisfied and the extent of any modification of the PSUs earned as a result of the application of the TSR Modifier; (ii) due to the Participant’s death, the Participant’s PSUs earned will be based on performance at the “Target” level of achievement of the performance goals, with no modification due to the TSR Modifier, adjusted pro rata for the full number of calendar months elapsed at the time of the Participant’s death since January 1, 20[ ] (but not to exceed the total number of months in the Performance Cycle) relative to the total number of calendar months in the Performance Cycle; or (iii) due to the Participant’s Retirement, the Participant’s PSUs earned will be adjusted pro rata, based upon the full number of calendar months (with any portion of a calendar month greater than 15 days being considered a whole calendar month and any portion of a month constituting 15 or fewer days not being considered a whole calendar month) elapsed from the Date of Grant to the time of Retirement (but not to exceed the total number of months in the Performance Cycle) relative to the total number of calendar months in the Performance Cycle (the “Pro Rata Portion”), with the actual payout of Shares with respect to the PSUs not occurring until after the end of the Performance Cycle and the determination by the Compensation Committee of the extent to
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which the performance goals for the Performance Cycle have been satisfied and the extent of any modification of the PSUs earned as a result of the application of the TSR Modifier; provided, however, that no Shares will be paid under this clause (iii) if (x) the Participant’s Retirement occurs within six months of the Date of Grant or (y) the Participant engages, directly or indirectly, whether as principal, agent, employee, consultant, distributor, representative or otherwise in any Relevant Business on or prior to the Vesting Date (other than serving as a non-employee director); and provided, further, that if the Participant’s Retirement occurs within two years of the Date of Grant, the number of Shares earned under this clause (iii) shall equal the lesser of (A) the Pro Rata Portion of the PSUs based on actual performance in the Performance Cycle as determined by the Administrator in accordance with Appendix A and (B) the Pro Rata Portion of the PSUs based on an assumed achievement of all performance goals at their “Target” level as set forth in Appendix A with no adjustment for the TSR Modifier. For purposes of this Section 3, “Retirement” shall mean a Participant’s Employment ceasing (other than as a result of termination by the Company) if the Participant (x) is at least 60 years of age, (y) has, at the time of the cessation of the Participant’s Employment, been an Employee of the Company for at least five years of continuous Employment, and (z) provides to the Company a written attestation indicating the Participant’s intent to retire from active employment with any Relevant Business (other than serving as a non-employee director); and “Relevant Business” shall mean any company (other than the Company) with securities registered pursuant to Section 12(b) or Section 12(g) of the Securities Exchange Act of 1934, as amended, as determined by the Administrator in its sole discretion. The Administrator shall have the sole and absolute discretion to determine whether a Retirement has occurred and whether the Participant has complied with the conditions of Retirement through the Retirement Vesting Date.
4.Termination without Cause or for Good Reason In Connection with a Change in Control. If the Participant’s Employment ceases after the completion of a Covered Transaction other than a dissolution or liquidation of the Company, due to the termination by the Company of the Participant’s Employment without Cause or the Participant’s termination of Employment for “Good Reason” (as defined below) (a cessation of Employment under either such circumstance being a “Qualifying Termination”), to the extent that the Award has not previously been forfeited or terminated (including a termination effected by the granting of an award in substitution of the Award as contemplated under Section 7(a) of the Plan), the PSUs will vest upon such termination of Employment and the payout level under the Award shall be deemed to have been earned based upon the greater of (a) an assumed achievement of all performance goals at their “Target” level as set forth in Appendix A with no adjustment for the TSR Modifier or (b), the actual level of achievement of the performance goals determined as of the Company’s fiscal quarter end preceding the Qualified Termination, with no adjustment for the TSR Modifier. “Good Reason” shall have the meaning ascribed to such term in the employment agreement between the Participant and the Company or its affiliate in place as of the date of grant of the Award or, in the absence of such term being in or defined in such employment agreement or in the absence of any such agreement between the Participant and the Company or any of its affiliates, the term “Good Reason” shall mean (i) in each case following the completion of the Covered Transaction: (a) a material diminution in the Participant’s authority, duties or responsibilities; (b) a material diminution in the authority, duties or responsibilities of the supervisor to whom the Participant reports, (c) a material diminution in the budget over which
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the Participant has authority; (d) a material diminution of the Participant’s base salary; (e) a material change in the annual or long-term incentive plan in which the Participant participates such that the Participant’s opportunity to earn incentive compensation is materially impaired; (f) a material reduction, in the aggregate, of the benefit plans and programs in which the Participant participates; (g) a substantial and material increase in Participant’s obligation to travel on the Company’s business; or (h) a material change in the geographic location at which the Participant provides services to the Company, provided that such change shall be more than fifty (50) miles; and (ii) provided in each such case that (a) the Participant provides notice to the Company of the existence of a condition identified in clause (i) within ninety (90) days of the condition first occurring, (b) the Company has been provided a period of thirty (30) days to cure such condition and (c) the Participant terminates his or her employment within one hundred eighty (180) days following the initial existence of such condition.
5.Delivery of Shares. The Company shall, as soon as practicable upon the determination by the Compensation Committee, pursuant to Section 2 hereof, of the extent to which the performance goals for the Performance Cycle have been satisfied, the application of the TSR Modifier and the number of PSUs determined to be earned or, in the event of the Participant’s death prior to the Vesting Date, as soon as practicable after the Participant’s death or, in the event of a Qualifying Termination, as soon as practicable following the Qualifying Termination (but, in each such case, not later than thirty (30) days thereafter), effect delivery of the Shares with respect to such earned PSUs to the Participant (or, in the event of the PSUs have passed to the estate or beneficiary of the Participant upon the Participant’s death or a permitted transferee, to such estate or beneficiary or permitted transferee) and, following such delivery of Shares, the Award shall cease to be outstanding.
6.Nontransferability; Impact on Other Plans. The PSUs may not be transferred except as expressly permitted under Section 6(a)(3) of the Plan. The Participant agrees and acknowledges that any income the Participant derives from a payout of the Award will not be considered eligible earnings under any pension plans, savings plans, profit sharing plans or other benefit plans of the Company or any of its subsidiaries.
7.Forfeiture; Recovery of Compensation. By accepting, or being deemed to have accepted, the Award, the Participant expressly acknowledges and agrees that his or her rights, and those of any permitted transferee, with respect to the Award, including the right to any Shares acquired in respect of the PSUs and any amounts received in respect thereof, are subject to Section 6(a)(5) of the Plan (including any successor provision). The Participant further agrees to be bound by the terms of any applicable clawback or recoupment policy of the Company. Nothing in the preceding sentence will be construed as limiting the general application of Section 9 of this Agreement.
8.Taxes. The Participant expressly acknowledges and agrees that the Participant’s rights hereunder, including the right to be issued Shares upon settlement of the Award, are subject to the Participant promptly paying to the Company in cash or by check (or by such other means as may be acceptable to the Administrator) all taxes and other amounts required to be withheld. No Shares will be issued in respect of the Award unless and until the Participant has
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remitted to the Company an amount in cash sufficient to satisfy any withholding requirements, or has made other arrangements satisfactory to the Company with respect to such amounts. Unless otherwise determined by the Company, the Company shall automatically satisfy any tax withholding obligations by withholding from the Shares that would otherwise be delivered with respect to the Award a number of Shares having a fair market value equal to the minimum statutory amount required to be withheld to satisfy such tax withholding obligations and/or by causing such number of Shares to be sold in accordance with a sell-to-cover arrangement. The Participant authorizes the Company and its subsidiaries to withhold any amounts due in respect of any required withholdings by withholding from the Shares otherwise deliverable in connection with the Award, by causing such Shares to be sold in accordance with a sell-to-cover arrangement and/or by withholding from any amounts otherwise owed to the Participant. Nothing in this Section 8, however, shall be construed as relieving the Participant of any liability for satisfying his or her tax obligations relating to the Award. If a sell-to-cover arrangement is selected as contemplated hereunder the Participant shall bear all costs associated with the sale of Shares under such arrangement.
9.Provisions of the Plan. This Agreement is subject in its entirety to the provisions of the Plan, which are incorporated herein by reference. A copy of the Plan as in effect on the Date of Grant has been made available to the Participant. By accepting, or being deemed to have accepted, the Award, the Participant agrees to be bound by the terms of the Plan and this Agreement. In the event of any conflict between the terms of this Agreement and the Plan, the terms of the Plan will control.
10.Acknowledgements. The Participant acknowledges and agrees that (i) this Agreement may be executed in two or more counterparts, each of which will be an original and all of which together will constitute one and the same instrument, (ii) this Agreement may be executed and exchanged using facsimile, portable document format (PDF) or electronic signature, which, in each case, will constitute an original signature for all purposes hereunder, and (iii) such signature by the Company will be binding against the Company and will create a legally binding agreement when this Agreement is countersigned by the Participant.
[Signature page follows.]
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The Company, by its duly authorized officer, and the Participant have executed this Agreement.
HAYWARD HOLDINGS, INC.
| By: | |||||
| Name: | Raymond Lewis | ||||
| Title: | Senior Vice President, Chief Human Resources Officer | ||||
Agreed and Accepted:
By_______________________________
#ParticipantName#
Signature Page to Performance Stock Unit Agreement
APPENDIX A
| 20[ ] – 20[ ] Performance Cycle | ||||||||||||||
Performance Goals (2) | ||||||||||||||
Percentage Earned Relative to Target Amount of the Award (1) | [Performance Goal A] | [Performance Goal B] | [Performance Goal C] | |||||||||||
| Threshold | [ ]% | [ ] | [ ] | [ ] | ||||||||||
| Target | 100% | [ ] | [ ] | [ ] | ||||||||||
| Maximum | [ ]% | [ ] | [ ] | [ ] | ||||||||||
| Weightings | [ ] | [ ] | [ ] | |||||||||||
(1) Performance below the Threshold level for a performance goal results in no PSUs being earned with respect to that performance goal. Performance above the Maximum level for a performance goal results no additional PSUs being earned in excess of the payout percentage specified for the performance goal at the Maximum level. Performance between the Threshold and Target levels or between the Target and Maximum levels is to be linearly interpolated. [Insert a description of any performance goal if such performance goal is not a measure under Generally Accepted Accounting Principles in the United States.]
(2) [Insert a description of TSR Modifier]
Exhibit 31.1
CERTIFICATION PURSUANT TO RULES 13A-14(A) AND 15D-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Kevin Holleran, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Hayward Holdings, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 1, 2025 | By: /s/ Kevin Holleran | ||||
Kevin Holleran | |||||
President and Chief Executive Officer | |||||
(Principal Executive Officer) | |||||
Exhibit 31.2
CERTIFICATION PURSUANT TO RULES 13A-14(A) AND 15D-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Eifion Jones, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Hayward Holdings, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 1, 2025 | By: /s/ Eifion Jones | ||||
Eifion Jones | |||||
Senior Vice President and Chief Financial Officer | |||||
(Principal Financial Officer and Principal Accounting Officer) | |||||
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Hayward Holdings, Inc. (the “Company”) for the period ended March 29, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Kevin Holleran, President and Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 1, 2025 | By: /s/ Kevin Holleran | ||||
Kevin Holleran | |||||
President and Chief Executive Officer | |||||
(Principal Executive Officer) | |||||
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Hayward Holdings, Inc. (the “Company”) for the period ended March 29, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Eifion Jones, Senior Vice President and Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 1, 2025 | By: /s/ Eifion Jones | ||||
Eifion Jones | |||||
Senior Vice President and Chief Financial Officer | |||||
(Principal Financial Officer and Principal Accounting Officer) | |||||