Hayward (HAYW) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales rose 3.3% year-over-year to $227.6 million, driven by positive pricing and acquisitions, partially offset by lower volumes.

• Gross profit margin expanded 190 basis points to 49.7%, marking the seventh consecutive quarter of year-over-year margin expansion.

• Net income increased 40% year-over-year to $16.5 million, with net income margin up 190 bps to 7.3%.

• Adjusted EBITDA for Q3 was $51.1 million (22.5% margin, up 110 bps year-over-year); adjusted diluted EPS rose 22% to $0.11.

• Cash from operations increased 27% year-to-date to $275.8 million, supporting growth initiatives and debt reduction.

Financial highlights

• Q3 net sales: $227.6 million (+3.3% year-over-year); North America up 5.3% to $195 million, Europe & Rest of World down 7.5% to $32.6 million.

• Q3 gross profit: $113.1 million (+7.3%); gross margin: 49.7% (+190 bps); Q3 net income: $16.5 million (net margin 7.3%, up 190 bps).

• Q3 adjusted EBITDA: $51.1 million (+8.2%); margin: 22.5% (+110 bps).

• Year-to-date cash flow from operations at $275.8 million, up 27%; free cash flow up 34% to $258 million.

• Net debt to adjusted EBITDA improved to 2.8x from 3.9x a year ago.

Outlook and guidance

• FY2024 net sales expected between $1.020 billion and $1.040 billion, up 3%–5% from FY2023.

• Adjusted EBITDA guidance raised to $260–$270 million, up 5%–9% from FY2023.

• Free cash flow guidance at approximately $160 million; CapEx at $25 million.

• Effective tax rate for the remainder of the year expected at 25%.

• Outlook reflects resilient aftermarket, margin expansion, and ongoing macroeconomic and interest rate pressures on new construction and remodels.