The following is a summary of the Hayward Holdings, Inc. (HAYW) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Q3 net sales increased 3% year-over-year to $228 million, driven by positive net pricing and the ChlorKing acquisition.

• Gross profit margins expanded by 190 basis points to 49.7%.

• Adjusted EBITDA increased 8% to $51 million, with an adjusted EBITDA margin increase of 110 basis points to 22.5%.

• Net leverage improved significantly, with a reduction in net debt-to-adjusted EBITDA to less than three times.

Business Progress:

• Hayward is advancing its technology leadership and expanding customer relationships, marked by the successful acquisition and integration of ChlorKing.

• The company has launched innovative products such as the Microchannel Temperature Control Unit and the Paramount RDX unblockable drain, enhancing its product offerings.

• Investments in customer service and support have been strengthened, including new leadership and the adoption of the Omni Pro app, enhancing real-time remote monitoring capabilities.

Opportunities:

• The company's early buy program and value-based pricing strategy are set to drive revenue growth and improve profitability.

• Hayward's strategic acquisition of ChlorKing enhances its position in the commercial pool market, providing opportunities for cross-leveraging customer bases and driving demand for advanced water sanitization systems.

Risks:

• Potential variability in 'Q4 forecasts with a broad range indicating uncertainty in in-season orders which primarily includes the pressure from economic conditions and interest rates affecting new construction and remodel demand.

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