Hayward Holdings Announces Fourth Quarter and Full Year 2023 Financial Results and Introduces 2024 Guidance
- Strong Q4 FY 2023 results with net sales up 8% to $278.5 million and net income up 94% to $31.0 million.
- Adjusted EBITDA increased by 42% year-over-year to $75.7 million in Q4 FY 2023.
- Full FY 2023 saw a 24% decrease in net sales to $992.5 million and a 55% decrease in net income to $80.7 million.
- Hayward introduced 2024 guidance with expected net sales of $1.010 billion to $1.060 billion and Adjusted EBITDA of $255 million to $275 million.
- CEO Kevin Holleran emphasized the company's strong execution, technology leadership, and strategic initiatives to drive profitable growth.
- Net sales decreased by 24% to $992.5 million for the full FY 2023.
- Net income decreased by 55% year-over-year to $80.7 million for the full FY 2023.
- Adjusted EBITDA* decreased by 33% year-over-year to $247.3 million for the full FY 2023.
- Diluted EPS decreased by 53% to $0.37 for the full FY 2023.
Insights
The reported fiscal data for Hayward Holdings, Inc. indicates a mixed financial performance with a notable year-over-year increase in net sales and net income for Q4, contrasted by a year-over-year decrease for the full fiscal year. The substantial growth in Q4 net income, which nearly doubled and the significant increase in adjusted EBITDA suggest a strong operational quarter. However, the full-year figures reflect a downturn, likely influenced by broader macroeconomic factors and geopolitical tensions.
Investors should consider the improved gross profit margins as a positive indicator of efficient cost management and pricing strategies. Nevertheless, the overall decline in annual net sales and net income may raise concerns about the company's ability to maintain profitability in volatile markets. The strong cash flow from operations is a critical aspect, enhancing the company's liquidity and potentially providing resilience against economic headwinds.
Hayward's Q4 performance, particularly in the North American market, reflects a robust demand for early buy shipments, which can be attributed to the company's strategic pricing adjustments and volume growth. The expansion of gross profit margin by 690 basis points in Q4 is a testament to Hayward's operational efficiency and suggests a competitive edge in managing manufacturing costs.
The outlook for FY 2024, with an anticipated return to sales and earnings growth, indicates confidence in the company's strategic initiatives and product adoption. However, the caution around global macro conditions and consumer spending underlines the importance of closely monitoring market trends. The emphasis on SmartPad™ technology adoption highlights the company's focus on innovation and market differentiation, which is crucial for sustaining long-term growth in the competitive pool equipment industry.
The reported financial results and the forward-looking statements by Hayward Holdings, Inc. reflect broader economic trends, such as supply chain normalization and channel inventory destocking. These factors are indicative of the company's adaptation to the post-pandemic market environment. The return to established seasonal buying patterns suggests a stabilization in the market that could positively influence future sales cycles.
Despite the downturn in the full fiscal year figures, the strong Q4 performance could signify a turning point in response to inflationary pressures and shifting consumer behaviors. The decline in the effective tax rate for Q4 presents a potential financial advantage that could improve net income margins. Investors should note the company's strategic focus on operational excellence and technology leadership, which could serve as a buffer against ongoing economic uncertainties.
FOURTH QUARTER FISCAL 2023 SUMMARY
-
Net Sales increased
8% year-over-year to$278.5 million -
Net Income increased
94% year-over-year to$31.0 million -
Adjusted EBITDA* increased
42% year-over-year to$75.7 million -
Diluted EPS increased
100% year-over-year to$0.14 -
Adjusted diluted EPS* increased
82% year-over-year to$0.20
FULL FISCAL YEAR 2023 HIGHLIGHTS
-
Net Sales decreased
24% year-over-year to$992.5 million -
Net Income decreased
55% year-over-year to$80.7 million -
Adjusted EBITDA* decreased
33% year-over-year to$247.3 million -
Diluted EPS of
and adjusted diluted EPS* of$0.37 $0.56 -
Strong cash flow from operations of
$184.5 million
CEO COMMENTS
“Our fourth quarter results were consistent with expectations,” said Kevin Holleran, Hayward’s President and Chief Executive Officer. “We delivered net sales and earnings growth, record gross profit margins, and better than projected cash flow. 2023 was characterized by a normalization of supply chains, channel inventory destocking, and a return to established seasonal buying patterns. Despite the macroeconomic impact on the consumer, I am proud of the strong execution of our team, resulting in gross profit margin expansion, delivery of our SG&A cost reduction program, and robust cash flow growth. We accomplished many important strategic initiatives to strengthen our competitive advantages and drive profitable growth. This included advancing our technology leadership position with innovative connected pool solutions, leveraging our culture of continuous improvement and operational excellence, and expanding commercial relationships across sales channels. While economic conditions remain uncertain and our customers are taking a cautious approach ahead of the peak pool season, I am confident in our team’s ability to continue executing on our growth strategy and to create value for shareholders.”
FOURTH QUARTER FISCAL 2023 CONSOLIDATED RESULTS
Net sales increased by
Gross profit increased by
Selling, general, and administrative (“SG&A”) expenses increased by
Operating income increased by
Interest expense, net, increased by approximately
Income tax expense for the fourth quarter of fiscal 2023 was
Net income increased by
Adjusted EBITDA* increased by
Diluted EPS increased by
FOURTH QUARTER FISCAL 2023 SEGMENT RESULTS
Net sales increased by
Segment income increased by
Net sales decreased by
Segment income decreased by
FULL FISCAL YEAR 2023 CONSOLIDATED RESULTS
Net sales decreased by
Gross profit decreased by
Operating income decreased by
Net income decreased by
Adjusted EBITDA* decreased by
Diluted EPS decreased by
BALANCE SHEET AND CASH FLOW
As of December 31, 2023, Hayward had cash and cash equivalents of
OUTLOOK
Hayward is introducing 2024 guidance reflecting a return to sales and earnings growth driven by solid execution across the organization, positive price realization and continued technology adoption. The guidance range also contemplates continued uncertainty around global macro conditions and consumer spending, coupled with our current expectations regarding channel inventory levels. For fiscal year 2024, Hayward expects net sales of approximately
The pool industry remains attractive and continues to benefit from sustainable secular demand trends in outdoor living. Hayward continues to leverage our competitive advantages and drive increasing adoption of our leading SmartPad™ pool equipment products both in new construction and the aftermarket, which represents approximately
Please see the Forward-Looking Statements section of this release for a discussion of certain risks relevant to Hayward’s outlook.
CONFERENCE CALL INFORMATION
Hayward will hold a conference call to discuss the results today, February 29, 2024 at 9:00 a.m. (ET).
Interested investors and other parties can also listen to a webcast of the live conference call by logging onto the Investor Relations section of the company's website at https://investor.hayward.com/events-and-presentations/default.aspx. An earnings presentation will be posted to the Investor Relations section of the Company’s website prior to the conference call. The conference call may also be accessed by dialing (877) 423-9813 or (201) 689-8573.
For those unable to listen to the live conference call, a replay will be available approximately two hours after the call through the archived webcast on the Hayward website or by dialing (844) 512-2921, or (412) 317-6671. The access code for the replay is 13744093. The replay will be available until 11:59 p.m. Eastern Time on March 14, 2024.
ABOUT HAYWARD HOLDINGS, INC.
Hayward Holdings, Inc. (NYSE: HAYW) is a leading global designer and manufacturer of pool and outdoor living technology. With a mission to deliver exceptional products, outstanding service and innovative solutions to transform the experience of water, Hayward offers a full line of energy-efficient and sustainable residential and commercial pool equipment including pumps, filters, heaters, cleaners, sanitizers, LED lighting, and water features all digitally connected through Hayward’s intuitive IoT-enabled SmartPad™.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains certain statements that are “forward-looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995 (the “Act”) and releases issued by the Securities and Exchange Commission (the “SEC”). Such forward-looking statements relating to Hayward are based on the beliefs of Hayward’s management as well as assumptions made by, and information currently available to it. These forward-looking statements include, but are not limited to, statements about Hayward’s strategies, plans, objectives, expectations, intentions, expenditures and assumptions and other statements contained in or incorporated by reference in this earnings release that are not historical facts. When used in this document, words such as “guidance,” “may,” “will,” “should,” “could,” “intend,” “potential,” “continue,” “anticipate,” “believe,” “estimate,” “expect,” “plan,” “target,” “predict,” “project,” “seek” and similar expressions as they relate to Hayward are intended to identify forward-looking statements. Hayward believes that it is important to communicate its future expectations to its stockholders, and it therefore makes forward-looking statements in reliance upon the safe harbor provisions of the Act. However, there may be events in the future that Hayward is not able to accurately predict or control, and actual results may differ materially from the expectations it describes in its forward-looking statements.
Examples of forward-looking statements include, among others, statements Hayward makes regarding: Hayward’s 2024 guidance; business plans and objectives; general economic and industry trends; business prospects; future product development and acquisition strategies; future channel stocking levels; and growth and expansion opportunities. The forward-looking statements in this earnings release are only predictions. Hayward may not achieve the plans, intentions or expectations disclosed in Hayward’s forward-looking statements, and you should not place significant reliance on its forward-looking statements. Hayward has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its business, financial condition and results of operations. Moreover, neither Hayward nor any other person assumes responsibility for the accuracy and completeness of forward-looking statements taken from third-party industry and market reports.
Important factors that could affect Hayward’s future results and could cause those results or other outcomes to differ materially from those indicated in its forward-looking statements include the following: its relationships with and the performance of distributors, builders, buying groups, retailers and servicers who sell Hayward’s products to pool owners; impacts on Hayward’s business from the sensitivity of its business to seasonality and unfavorable economic business conditions; competition from national and global companies, as well as lower-cost manufacturers; Hayward’s ability to develop, manufacture and effectively and profitably market and sell its new planned and future products; its ability to execute on its growth strategies and expansion opportunities; impacts on Hayward’s business from political, regulatory, economic, trade, and other risks associated with operating foreign businesses, including risks associated with geopolitical conflict; its ability to maintain favorable relationships with suppliers and manage disruptions to its global supply chain and the availability of raw materials; Hayward’s ability to identify emerging technological and other trends in its target end markets; failure of markets to accept new product introductions and enhancements; the ability to successfully identify, finance, complete and integrate acquisitions; its reliance on information technology systems and susceptibility to threats to those systems, including cybersecurity threats, and risks arising from its collection and use of personal information data; regulatory changes and developments affecting Hayward’s current and future products; volatility in currency exchange rates and interest rates; Hayward’s ability to service its existing indebtedness and obtain additional capital to finance operations and its growth opportunities; Hayward’s ability to establish and maintain intellectual property protection for its products, as well as its ability to operate its business without infringing, misappropriating or otherwise violating the intellectual property rights of others; the impact of material cost and other inflation; Hayward’s ability to attract and retain senior management and other qualified personnel; the impact of changes in laws, regulations and administrative policy, including those that limit
Many of these factors are macroeconomic in nature and are, therefore, beyond Hayward’s control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, Hayward’s actual results, performance or achievements may vary materially from those described in this earnings release as anticipated, believed, estimated, expected, intended, planned or projected. The forward-looking statements included in this earnings release are made only as of the date of this earnings release. Unless required by
*NON-GAAP FINANCIAL MEASURES
This earnings release includes certain financial measures not presented in accordance with the generally accepted accounting principles in
Reconciliation of fiscal 2024 adjusted EBITDA guidance (which is presented on a basis similar to the presentation of historical adjusted EBITDA) is not being provided, as Hayward does not currently have sufficient data to accurately estimate the variables and individual adjustments for such reconciliation.
Hayward Holdings, Inc. Unaudited Consolidated Balance Sheets (Dollars in thousands, except per share data) |
||||||||
|
|
December 31, 2023 |
|
December 31, 2022 |
||||
Assets |
|
|
|
|
||||
Current assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
178,097 |
|
|
$ |
56,177 |
|
Short-term investments |
|
|
25,000 |
|
|
|
— |
|
Accounts receivable, net of allowances of |
|
|
270,875 |
|
|
|
209,109 |
|
Inventories, net |
|
|
215,180 |
|
|
|
283,658 |
|
Prepaid expenses |
|
|
14,331 |
|
|
|
14,981 |
|
Income tax receivable |
|
|
9,994 |
|
|
|
27,173 |
|
Other current assets |
|
|
11,264 |
|
|
|
21,186 |
|
Total current assets |
|
|
724,741 |
|
|
|
612,284 |
|
Property, plant, and equipment, net of accumulated depreciation of |
|
|
158,979 |
|
|
|
149,828 |
|
Goodwill |
|
|
935,013 |
|
|
|
932,396 |
|
Trademark |
|
|
736,000 |
|
|
|
736,000 |
|
Customer relationships, net |
|
|
206,308 |
|
|
|
230,503 |
|
Other intangibles, net |
|
|
94,082 |
|
|
|
106,673 |
|
Other non-current assets |
|
|
91,161 |
|
|
|
107,329 |
|
Total assets |
|
$ |
2,946,284 |
|
|
$ |
2,875,013 |
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity |
|
|
|
|
||||
Current liabilities |
|
|
|
|
||||
Current portion of long-term debt |
|
$ |
15,088 |
|
|
$ |
14,531 |
|
Accounts payable |
|
|
68,943 |
|
|
|
54,022 |
|
Accrued expenses and other liabilities |
|
|
155,543 |
|
|
|
163,283 |
|
Income taxes payable |
|
|
109 |
|
|
|
574 |
|
Total current liabilities |
|
|
239,683 |
|
|
|
232,410 |
|
Long-term debt, net |
|
|
1,079,280 |
|
|
|
1,085,055 |
|
Deferred tax liabilities, net |
|
|
248,967 |
|
|
|
264,111 |
|
Other non-current liabilities |
|
|
66,896 |
|
|
|
70,403 |
|
Total liabilities |
|
|
1,634,826 |
|
|
|
1,651,979 |
|
|
|
|
|
|
||||
Stockholders’ equity |
|
|
|
|
||||
Preferred stock, |
|
|
— |
|
|
|
— |
|
Common stock |
|
|
243 |
|
|
|
241 |
|
Additional paid-in capital |
|
|
1,080,894 |
|
|
|
1,069,878 |
|
Common stock in treasury; 28,666,369 and 28,666,369 at December 31, 2023 and December 31, 2022, respectively |
|
|
(357,755 |
) |
|
|
(357,415 |
) |
Retained earnings |
|
|
580,909 |
|
|
|
500,222 |
|
Accumulated other comprehensive income |
|
|
7,167 |
|
|
|
10,108 |
|
Total stockholders’ equity |
|
|
1,311,458 |
|
|
|
1,223,034 |
|
Total liabilities, redeemable stock, and stockholders’ equity |
|
$ |
2,946,284 |
|
|
$ |
2,875,013 |
|
Hayward Holdings, Inc. Unaudited Consolidated Statements of Operations (Dollars in thousands, except per share data) |
|||||||||||||||
|
|
Three Months Ended |
|
Twelve Months Ended |
|||||||||||
|
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
|||||||
Net sales |
|
$ |
278,469 |
|
|
$ |
258,967 |
|
|
$ |
992,452 |
|
$ |
1,314,136 |
|
Cost of sales |
|
|
141,331 |
|
|
|
149,475 |
|
|
|
515,502 |
|
|
717,101 |
|
Gross profit |
|
|
137,138 |
|
|
|
109,492 |
|
|
|
476,950 |
|
|
597,035 |
|
Selling, general, and administrative expense |
|
|
61,550 |
|
|
|
60,515 |
|
|
|
233,607 |
|
|
248,812 |
|
Research, development, and engineering expense |
|
|
5,520 |
|
|
|
5,948 |
|
|
|
24,547 |
|
|
22,359 |
|
Acquisition and restructuring related expense (income) |
|
|
6,993 |
|
|
|
(1,337 |
) |
|
|
13,213 |
|
|
8,162 |
|
Amortization of intangible assets |
|
|
7,584 |
|
|
|
8,301 |
|
|
|
30,361 |
|
|
32,129 |
|
Operating income |
|
|
55,491 |
|
|
|
36,065 |
|
|
|
175,222 |
|
|
285,573 |
|
Interest expense, net |
|
|
17,645 |
|
|
|
16,282 |
|
|
|
73,584 |
|
|
51,387 |
|
Other (income) expense, net |
|
|
(1,247 |
) |
|
|
(3,107 |
) |
|
|
551 |
|
|
(51 |
) |
Total other expense |
|
|
16,398 |
|
|
|
13,175 |
|
|
|
74,135 |
|
|
51,336 |
|
Income from operations before income taxes |
|
|
39,093 |
|
|
|
22,890 |
|
|
|
101,087 |
|
|
234,237 |
|
Provision for income taxes |
|
|
8,057 |
|
|
|
6,922 |
|
|
|
20,400 |
|
|
54,890 |
|
Net income |
|
$ |
31,036 |
|
|
$ |
15,968 |
|
|
$ |
80,687 |
|
$ |
179,347 |
|
|
|
|
|
|
|
|
|
|
|||||||
Earnings per share |
|
|
|
|
|
|
|
|
|||||||
Basic |
|
$ |
0.15 |
|
|
$ |
0.08 |
|
|
$ |
0.38 |
|
$ |
0.82 |
|
Diluted |
|
$ |
0.14 |
|
|
$ |
0.07 |
|
|
$ |
0.37 |
|
$ |
0.78 |
|
|
|
|
|
|
|
|
|
|
|||||||
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|||||||
Basic |
|
|
213,768,108 |
|
|
|
211,406,214 |
|
|
|
213,144,063 |
|
|
219,945,024 |
|
Diluted |
|
|
220,848,098 |
|
|
|
219,958,655 |
|
|
|
220,688,616 |
|
|
229,726,497 |
|
Hayward Holdings, Inc. Unaudited Consolidated Statements of Cash Flows (In thousands) |
|
Year Ended |
||||||
|
December 31, 2023 |
|
December 31, 2022 |
|||||
Cash flows from operating activities |
|
|
|
|
||||
Net income |
|
$ |
80,687 |
|
|
$ |
179,347 |
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
|
||||
Depreciation |
|
|
15,983 |
|
|
|
19,246 |
|
Amortization of intangible assets |
|
|
37,079 |
|
|
|
38,393 |
|
Amortization of deferred debt issuance fees |
|
|
4,696 |
|
|
|
3,271 |
|
Stock-based compensation |
|
|
9,165 |
|
|
|
7,948 |
|
Deferred income taxes |
|
|
(12,786 |
) |
|
|
(5,345 |
) |
Allowance for bad debts |
|
|
(1,067 |
) |
|
|
1,934 |
|
Loss on impairment |
|
|
6,720 |
|
|
|
— |
|
Loss on sale of property, plant and equipment |
|
|
1,000 |
|
|
|
6,128 |
|
Changes in operating assets and liabilities |
|
|
|
|
||||
Accounts receivable |
|
|
(58,700 |
) |
|
|
(3,409 |
) |
Inventories |
|
|
67,824 |
|
|
|
(35,117 |
) |
Other current and non-current assets |
|
|
24,820 |
|
|
|
(40,197 |
) |
Accounts payable |
|
|
14,551 |
|
|
|
(36,773 |
) |
Accrued expenses and other liabilities |
|
|
(5,432 |
) |
|
|
(19,482 |
) |
Net cash provided by operating activities |
|
|
184,540 |
|
|
|
115,944 |
|
|
|
|
|
|
||||
Cash flows from investing activities |
|
|
|
|
||||
Purchases of property, plant, and equipment |
|
|
(30,994 |
) |
|
|
(29,625 |
) |
Purchases of short-term investments |
|
|
(25,000 |
) |
|
|
— |
|
Acquisitions, net of cash acquired |
|
|
— |
|
|
|
(62,952 |
) |
Proceeds from sale of property, plant, and equipment |
|
|
613 |
|
|
|
4 |
|
Net cash used in investing activities |
|
|
(55,381 |
) |
|
|
(92,573 |
) |
|
|
|
|
|
||||
Cash flows from financing activities |
|
|
|
|
||||
Purchases of common stock for treasury |
|
|
(340 |
) |
|
|
(343,349 |
) |
Proceeds from issuance of long-term debt |
|
|
5,448 |
|
|
|
129,725 |
|
Debt issuance costs |
|
|
— |
|
|
|
(8,547 |
) |
Payments of long-term debt |
|
|
(12,518 |
) |
|
|
(10,445 |
) |
Proceeds from revolving credit facility |
|
|
144,100 |
|
|
|
150,000 |
|
Payments on revolving credit facility |
|
|
(144,100 |
) |
|
|
(150,000 |
) |
Proceeds from issuance of short term debt |
|
|
6,130 |
|
|
|
8,119 |
|
Payments of short term debt |
|
|
(6,894 |
) |
|
|
(5,063 |
) |
Other, net |
|
|
562 |
|
|
|
320 |
|
Net cash used in financing activities |
|
|
(7,612 |
) |
|
|
(229,240 |
) |
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents |
|
|
373 |
|
|
|
(3,750 |
) |
Change in cash and cash equivalents |
|
|
121,920 |
|
|
|
(209,619 |
) |
Cash and cash equivalents, beginning of year |
|
|
56,177 |
|
|
|
265,796 |
|
Cash and cash equivalents, end of year |
|
$ |
178,097 |
|
|
$ |
56,177 |
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information: |
|
|
|
|
||||
Cash paid-interest |
|
$ |
75,658 |
|
|
$ |
51,499 |
|
Cash paid-income taxes |
|
|
16,420 |
|
|
|
99,395 |
|
Equipment financed under finance leases |
|
|
(21 |
) |
|
|
1,603 |
|
Reconciliations
Consolidated Reconciliations
Adjusted EBITDA and Adjusted EBITDA Margin Reconciliations (Non-GAAP)
Following is a reconciliation from net income to adjusted EBITDA:
(Dollars in thousands) |
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
||||||||
Net income |
|
$ |
31,036 |
|
|
$ |
15,968 |
|
|
$ |
80,687 |
|
|
$ |
179,347 |
|
Depreciation |
|
|
2,965 |
|
|
|
5,315 |
|
|
|
15,983 |
|
|
|
19,246 |
|
Amortization |
|
|
9,276 |
|
|
|
9,956 |
|
|
|
37,079 |
|
|
|
38,393 |
|
Interest expense |
|
|
17,645 |
|
|
|
16,282 |
|
|
|
73,584 |
|
|
|
51,387 |
|
Income taxes |
|
|
8,057 |
|
|
|
6,922 |
|
|
|
20,400 |
|
|
|
54,890 |
|
EBITDA |
|
|
68,979 |
|
|
|
54,443 |
|
|
|
227,733 |
|
|
|
343,263 |
|
Stock-based compensation (a) |
|
|
269 |
|
|
|
354 |
|
|
|
1,270 |
|
|
|
1,602 |
|
Currency exchange items (b) |
|
|
(490 |
) |
|
|
(1,850 |
) |
|
|
786 |
|
|
|
926 |
|
Acquisition and restructuring related expense, net (c) |
|
|
6,993 |
|
|
|
(1,337 |
) |
|
|
13,213 |
|
|
|
8,162 |
|
Other (d) |
|
|
(96 |
) |
|
|
1,652 |
|
|
|
4,271 |
|
|
|
13,622 |
|
Total Adjustments |
|
|
6,676 |
|
|
|
(1,181 |
) |
|
|
19,540 |
|
|
|
24,312 |
|
Adjusted EBITDA |
|
$ |
75,655 |
|
|
$ |
53,262 |
|
|
$ |
247,273 |
|
|
$ |
367,575 |
|
Adjusted EBITDA margin |
|
|
27.2 |
% |
|
|
20.6 |
% |
|
|
24.9 |
% |
|
|
28.0 |
% |
(a) |
|
Represents non-cash stock-based compensation expense related to equity awards issued to management, employees, and directors. Beginning in the three months ended July 2, 2022, 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”), whereas in prior periods, the adjustment included stock-based compensation expense for all equity awards. Under the current presentation, the stock-based compensation adjustment for the year ended December 31, 2022 would have been
|
(b) |
|
Represents unrealized non-cash losses (gains) on foreign denominated monetary assets and liabilities and foreign currency contracts.
|
(c) |
|
Adjustments in the fiscal quarter ended December 31, 2023 are primarily driven by a
|
|
|
Adjustments in the fiscal quarter ended December 31, 2022 include a
|
|
|
Adjustments in the year ended December 31, 2023 primarily include
|
|
|
Adjustments in the year ended December 31, 2022 primarily include
|
(d) |
|
Adjustments in the fiscal quarter ended December 31, 2023 are primarily related to programs to centralize and consolidate operations and professional services in
|
|
|
Adjustments in the fiscal quarter ended December 31, 2022 primarily includes a
|
|
|
Adjustments in the year ended December 31, 2023 primarily include
|
|
|
Adjustments in the year ended December 31, 2022 primarily include |
Adjusted Net Income and Adjusted EPS Reconciliation (Non-GAAP)
Following is a reconciliation of net income to adjusted net income and earnings per share to adjusted earnings per share:
(Dollars in thousands, except per share data) |
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
||||||||
Net income |
|
$ |
31,036 |
|
|
$ |
15,968 |
|
|
$ |
80,687 |
|
|
$ |
179,347 |
|
Tax adjustments (a) |
|
|
974 |
|
|
|
1,164 |
|
|
|
(1,930 |
) |
|
|
(2,676 |
) |
Other adjustments and amortization: |
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation (b) |
|
|
269 |
|
|
|
354 |
|
|
|
1,270 |
|
|
|
1,602 |
|
Currency exchange items (c) |
|
|
(490 |
) |
|
|
(1,850 |
) |
|
|
786 |
|
|
|
926 |
|
Acquisition and restructuring related expense, net (d) |
|
|
6,993 |
|
|
|
(1,337 |
) |
|
|
13,213 |
|
|
|
8,162 |
|
Other (e) |
|
|
(96 |
) |
|
|
1,652 |
|
|
|
4,271 |
|
|
|
13,622 |
|
Total other adjustments |
|
|
6,676 |
|
|
|
(1,181 |
) |
|
|
19,540 |
|
|
|
24,312 |
|
Amortization |
|
|
9,276 |
|
|
|
9,956 |
|
|
|
37,079 |
|
|
|
38,393 |
|
Tax effect (f) |
|
|
(2,890 |
) |
|
|
(2,207 |
) |
|
|
(12,507 |
) |
|
|
(15,379 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Certain transactional-related adjustments (g): |
|
|
|
|
|
|
|
|
||||||||
Acquisitions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,761 |
|
Tax effect (f) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(678 |
) |
Adjusted net income |
|
$ |
45,072 |
|
|
$ |
23,700 |
|
|
$ |
122,869 |
|
|
$ |
226,080 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding, basic |
|
|
213,768,108 |
|
|
|
211,406,214 |
|
|
|
213,144,063 |
|
|
|
219,945,024 |
|
Weighted average number of common shares outstanding, diluted |
|
|
220,848,098 |
|
|
|
219,958,655 |
|
|
|
220,688,616 |
|
|
|
229,726,497 |
|
|
|
|
|
|
|
|
|
|
||||||||
Basic EPS |
|
$ |
0.15 |
|
|
$ |
0.08 |
|
|
$ |
0.38 |
|
|
$ |
0.82 |
|
Diluted EPS |
|
$ |
0.14 |
|
|
$ |
0.07 |
|
|
$ |
0.37 |
|
|
$ |
0.78 |
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted basic EPS |
|
$ |
0.21 |
|
|
$ |
0.11 |
|
|
$ |
0.58 |
|
|
$ |
1.03 |
|
Adjusted diluted EPS |
|
$ |
0.20 |
|
|
$ |
0.11 |
|
|
$ |
0.56 |
|
|
$ |
0.98 |
|
(a) |
|
Tax adjustments for the three and twelve months ended December 31, 2023 reflect a normalized tax rate of
|
(b) |
|
Represents non-cash stock-based compensation expense related to equity awards issued to management, employees, and directors. Beginning in the three months ended July 2, 2022, 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 IPO, whereas in prior periods, the adjustment included stock-based compensation expense for all equity awards. Under the current presentation, the stock-based compensation adjustment for the year ended December 31, 2022 would have been
|
(c) |
|
Represents unrealized non-cash losses (gains) on foreign denominated monetary assets and liabilities and foreign currency contracts.
|
(d) |
|
Adjustments in the fiscal quarter ended December 31, 2023 are primarily driven by a
|
|
|
Adjustments in the fiscal quarter ended December 31, 2022 include a
|
|
|
Adjustments in the year ended December 31, 2023 primarily include
|
|
|
Adjustments in the year ended December 31, 2022 primarily include
|
(e) |
|
Adjustments in the fiscal quarter ended December 31, 2023 are primarily related to programs to centralize and consolidate operations and professional services in
|
|
|
Adjustments in the fiscal quarter ended December 31, 2022 primarily includes a
|
|
|
Adjustments in the year ended December 31, 2023 primarily include
|
|
|
Adjustments in the year ended December 31, 2022 primarily include
|
(f) |
|
The tax effect represents the immediately preceding adjustments at the normalized tax rates as discussed in footnote (a) above.
|
(g) |
|
The adjustments for the twelve months ended December 31, 2022 represent adjustments related to the acquisition of the Specialty Lighting Business as if the acquisition had occurred at the beginning of the period. |
Segment Reconciliations
Following is a reconciliation from income from operations before income taxes to consolidated segment income and segment income to adjusted segment income for the
(Dollars in thousands) |
|
Three Months Ended |
|
Three Months Ended |
||||||||||||||||||||
|
|
December 31, 2023 |
|
December 31, 2022 |
||||||||||||||||||||
|
|
Total |
|
NAM |
|
E&RW |
|
Total |
|
NAM |
|
E&RW |
||||||||||||
Net sales |
|
$ |
278,469 |
|
|
$ |
238,150 |
|
|
$ |
40,319 |
|
|
$ |
258,967 |
|
|
$ |
216,809 |
|
|
$ |
42,158 |
|
Gross profit |
|
|
137,138 |
|
|
|
121,730 |
|
|
|
15,408 |
|
|
|
109,492 |
|
|
|
93,130 |
|
|
|
16,362 |
|
Gross profit margin % |
|
|
49.2 |
% |
|
|
51.1 |
% |
|
|
38.2 |
% |
|
|
42.3 |
% |
|
|
43.0 |
% |
|
|
38.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from operations before income taxes |
|
$ |
39,093 |
|
|
|
|
|
|
$ |
22,890 |
|
|
|
|
|
||||||||
Expenses not allocated to segments |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate expense, net |
|
|
8,882 |
|
|
|
|
|
|
|
6,142 |
|
|
|
|
|
||||||||
Acquisition and restructuring related expense (income) |
|
|
6,993 |
|
|
|
|
|
|
|
(1,337 |
) |
|
|
|
|
||||||||
Amortization of intangible assets |
|
|
7,584 |
|
|
|
|
|
|
|
8,301 |
|
|
|
|
|
||||||||
Interest expense, net |
|
|
17,645 |
|
|
|
|
|
|
|
16,282 |
|
|
|
|
|
||||||||
Other (income) expense, net |
|
|
(1,247 |
) |
|
|
|
|
|
|
(3,107 |
) |
|
|
|
|
||||||||
Segment income |
|
$ |
78,950 |
|
|
$ |
71,079 |
|
|
$ |
7,871 |
|
|
$ |
49,171 |
|
|
$ |
40,773 |
|
|
$ |
8,398 |
|
Segment income margin % |
|
|
28.4 |
% |
|
|
29.8 |
% |
|
|
19.5 |
% |
|
|
19.0 |
% |
|
|
18.8 |
% |
|
|
19.9 |
% |
Depreciation |
|
$ |
2,904 |
|
|
$ |
2,658 |
|
|
$ |
246 |
|
|
$ |
4,809 |
|
|
$ |
4,614 |
|
|
$ |
195 |
|
Amortization |
|
|
1,692 |
|
|
|
1,692 |
|
|
|
— |
|
|
|
1,656 |
|
|
|
1,656 |
|
|
|
— |
|
Stock-based compensation (a) |
|
|
31 |
|
|
|
20 |
|
|
|
11 |
|
|
|
(617 |
) |
|
|
(566 |
) |
|
|
(51 |
) |
Other (b) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
568 |
|
|
|
716 |
|
|
|
(148 |
) |
Total adjustments |
|
|
4,627 |
|
|
|
4,370 |
|
|
|
257 |
|
|
|
6,416 |
|
|
|
6,420 |
|
|
|
(4 |
) |
Adjusted segment income |
|
$ |
83,577 |
|
|
$ |
75,449 |
|
|
$ |
8,128 |
|
|
$ |
55,587 |
|
|
$ |
47,193 |
|
|
$ |
8,394 |
|
Adjusted segment income margin % |
|
|
30.0 |
% |
|
|
31.7 |
% |
|
|
20.2 |
% |
|
|
21.5 |
% |
|
|
21.8 |
% |
|
|
19.9 |
% |
(a) |
|
Represents non-cash stock-based compensation expense related to equity awards issued to management, employees, and directors.
|
(b) |
|
Adjustments in the fiscal quarter ended December 31, 2022 for NAM primarily includes a
|
|
|
Adjustments in the fiscal quarter ended December 31, 2022 for E&RW primarily includes collections of previously reserved bad debt expense related to certain customers impacted by the conflict in |
(Dollars in thousands) |
|
Twelve Months Ended |
|
Twelve Months Ended |
||||||||||||||||||||
|
|
December 31, 2023 |
|
December 31, 2022 |
||||||||||||||||||||
|
|
Total |
|
NAM |
|
E&RW |
|
Total |
|
NAM |
|
E&RW |
||||||||||||
Net sales |
|
$ |
992,452 |
|
|
$ |
823,276 |
|
|
$ |
169,176 |
|
|
$ |
1,314,136 |
|
|
$ |
1,108,859 |
|
|
$ |
205,277 |
|
Gross profit |
|
|
476,950 |
|
|
|
410,641 |
|
|
|
66,309 |
|
|
|
597,035 |
|
|
|
514,855 |
|
|
|
82,180 |
|
Gross profit margin % |
|
|
48.1 |
% |
|
|
49.9 |
% |
|
|
39.2 |
% |
|
|
45.4 |
% |
|
|
46.4 |
% |
|
|
40.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from operations before income taxes |
|
$ |
101,087 |
|
|
|
|
|
|
$ |
234,237 |
|
|
|
|
|
||||||||
Expenses not allocated to segments |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate expense, net |
|
|
30,147 |
|
|
|
|
|
|
|
30,151 |
|
|
|
|
|
||||||||
Acquisition and restructuring related expense |
|
|
13,213 |
|
|
|
|
|
|
|
8,162 |
|
|
|
|
|
||||||||
Amortization of intangible assets |
|
|
30,361 |
|
|
|
|
|
|
|
32,129 |
|
|
|
|
|
||||||||
Interest expense, net |
|
|
73,584 |
|
|
|
|
|
|
|
51,387 |
|
|
|
|
|
||||||||
Other (income) expense, net |
|
|
551 |
|
|
|
|
|
|
|
(51 |
) |
|
|
|
|
||||||||
Segment income |
|
$ |
248,943 |
|
|
$ |
215,425 |
|
|
$ |
33,518 |
|
|
$ |
356,015 |
|
|
$ |
308,627 |
|
|
$ |
47,388 |
|
Segment income margin % |
|
|
25.1 |
% |
|
|
26.2 |
% |
|
|
19.8 |
% |
|
|
27.1 |
% |
|
|
27.8 |
% |
|
|
23.1 |
% |
Depreciation |
|
$ |
15,550 |
|
|
$ |
14,610 |
|
|
$ |
940 |
|
|
$ |
17,815 |
|
|
$ |
17,049 |
|
|
$ |
766 |
|
Amortization |
|
|
6,718 |
|
|
|
6,718 |
|
|
|
— |
|
|
|
6,265 |
|
|
|
6,265 |
|
|
|
— |
|
Stock-based compensation (a) |
|
|
482 |
|
|
|
437 |
|
|
|
45 |
|
|
|
(434 |
) |
|
|
(494 |
) |
|
|
60 |
|
Other (b) |
|
|
503 |
|
|
|
503 |
|
|
|
— |
|
|
|
9,534 |
|
|
|
9,332 |
|
|
|
202 |
|
Total adjustments |
|
|
23,253 |
|
|
|
22,268 |
|
|
|
985 |
|
|
|
33,180 |
|
|
|
32,152 |
|
|
|
1,028 |
|
Adjusted segment income |
|
$ |
272,196 |
|
|
$ |
237,693 |
|
|
$ |
34,503 |
|
|
$ |
389,195 |
|
|
$ |
340,779 |
|
|
$ |
48,416 |
|
Adjusted segment income margin % |
|
|
27.4 |
% |
|
|
28.9 |
% |
|
|
20.4 |
% |
|
|
29.6 |
% |
|
|
30.7 |
% |
|
|
23.6 |
% |
(a) |
|
Represents non-cash stock-based compensation expense related to equity awards issued to management, employees, and directors. Beginning in the three months ended July 2, 2022, the adjustment includes only expense related to awards issued under the 2017 Equity Incentive Plan, which were awards granted prior to the effective date of the IPO, whereas in prior periods, the adjustment included stock-based compensation expense for all equity awards. Under the current presentation, the stock-based compensation adjustment for the twelve months ended December 31, 2023 would have been an income of
|
(b) |
|
Adjustments in the year ended December 31, 2023 for NAM include miscellaneous items we believe are not representative of our ongoing business operations.
|
|
|
Adjustments in the year ended December 31, 2022 for NAM include
|
|
|
Adjustments in the year ended December 31, 2022 for E&RW include |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240229946063/en/
Media Relations:
Tanya McNabb
tmcnabb@hayward.com
Investor Relations:
Kevin Maczka
investor.relations@hayward.com
Source: Hayward Holdings, Inc.
FAQ
What were Hayward Holdings' (HAYW) net sales for the fourth quarter of fiscal 2023?
How much did Hayward Holdings' (HAYW) net income increase by in the fourth quarter of fiscal 2023?
What was the change in Adjusted EBITDA* for Hayward Holdings (HAYW) in the fourth quarter of fiscal 2023?
What was the percentage change in net sales for Hayward Holdings (HAYW) in the full fiscal year 2023?