Hayward Holdings, Inc.

Welcome to Hayward Holdings' third quarter 2025 earnings call. My name is Donna, and I will be your operator for today's call. At this time, all participants are on a listen-only mode. Later, we will conduct a question-and-answer session. During the question-and-answer session, if you have a question, please press star, then 1 on your touchtone phone. Please note that this conference is being recorded. I will now turn the call over to Kevin Maska, Vice President, Investor Relations, and FP&A. Mr. Maska, you may begin.

Thank you, and good morning, everyone. We issued our third quarter 2025 earnings press release this morning, which has been posted to the investor relations section of the website at investor.hayward.com. There you can also find the earnings slide presentation referenced during this call. I'm joined today by Kevin Halloran, President and Chief Executive Officer, and Ivian Jones, Senior Vice President and Chief Financial Officer. Before we begin, I would like to remind everyone that during this call, the company may make certain statements that are considered forward-looking in nature, including management's outlook for 2025 and future periods. Such statements are subject to a variety of risks and uncertainties, including those discussed in our most recent forms 10-K and 10-Q filed with the Securities and Exchange Commission that could cause actual results to differ materially. The company does not undertake any duty to update such forward-looking statements. Additionally, during today's call, the company will discuss non-GAAP measures. Reconciliations of historical non-GAAP measures discussed on this call to the comparable GAAP measures can be found in our earnings release and the appendix to the slide presentation. All comparisons will be made on a year-over-year basis unless otherwise indicated. I will now turn the call over to Kevin Halloran.

Thank you, Kevin, and good morning, everyone. It's my pleasure to welcome all of you to Hayward's third quarter earnings call. I'll begin on slide four of our earnings presentation with today's key messages. I'm pleased to report third quarter results ahead of expectations, marking another quarter of strong execution by our global team. Our performance reflects the resiliency of our aftermarket model and continued traction in our strategic initiatives. Net sales increased 7%, With growth across both our North America and Europe and rest of world segments, an adjusted EBITDA increased 16%. We delivered further solid margin expansion driven by increased operational efficiencies, tariff mitigation actions, and disciplined cost management. Gross profit margin increased 150 basis points to 51.2%, and adjusted EBITDA margin increased 170 basis points to 24.2%. Cash flow generation was also strong, enabling us to further strengthen the balance sheet and reduce net leverage to 1.8 times the lowest level in nearly four years. This provides enhanced financial flexibility as we execute our growth plans and fund our capital deployment priorities. During the quarter, we continued advancing key strategic initiatives to position for profitable growth. This included expanding our customer relationships, developing innovative new products to further our technology leadership position, and leveraging our operational excellence capabilities. At the same time, our teams are aggressively executing tariff mitigation action plans to support margins and deliver on our commitments to shareholders and customers. We've made great progress, and I'm confident in our team's ability to navigate this dynamic environment. As a result of our strong year-to-date performance and solid participation in our early buy programs with increased orders, we're raising our full year guidance. We now expect net sales to increase approximately 4% to 5.5% compared to our prior guidance of 2% to 5%. We now expect adjusted EBITDA to increase 5% to 7% to a range of 292 to 297 million. compared to our prior guidance of 280 to $290 million. Turning now to slide five, highlighting the results in the third quarter. Net sales increased 7% to 244 million, driven by a 5% increase in net price and a 2% increase in volume. By segment, net sales increased 7% in North America and 11% in Europe and rest of world. As I mentioned, gross profit margin expanded 150 basis points to 51.2%. Adjusted EBITDA increased 16% to 59 million and adjusted EBITDA margin increased 170 basis points to 24.2%. This is a strong result in a seasonally lower sales quarter as we continue to make targeted investments in the business to drive future growth. Finally, adjusted diluted earnings per share increased 27 to 14 cents turning now to slide six for a business update starting with the demand environment we are encouraged by recent trends we had a solid finish to the 2025 pool season as our primary u.s channel partners communicated improved out the door sales growth rates for hayward products in the third quarter with stronger growth as the quarter progressed This reflects the strength and stability of our aftermarket model as approximately 85% of our sales are aligned with serving the aftermarket needs of the existing installed base. Consistent with the trends in prior quarters, non-discretionary aftermarket maintenance demand remains resilient. We also see continued adoption of our technology solutions to automate and control pools. Homeowners are adding technology to improve the pool ambiance and experience rather than D featuring to reduce costs as evidenced by the average value per pool pad continues to increase. As a result, we saw a double digit growth in this critical product category of Omni controls during the quarter, nearly twice the overall Hayward growth rate. The early buy programs are nearing completion in North America and international markets, and we are pleased with the progress to date. Incoming orders are trending in line with expectations. We anticipate solid customer participation and increased orders relative to the prior year. Importantly, we are working closely with our channel partners to maintain appropriate levels of Hayward inventory on hand relative to current demand levels and forward expectations. The pool industry has always been very disciplined on price. We increased pricing this year as needed to combat tariffs, and other inflations, and we continue to expect positive net price realization of mid single digits in 2025. We are progressing with our value-based pricing and skew rationalization initiatives to optimize our price structure and enable our products to be priced appropriately relative to the exceptional value provided to pool owners. We expect these initiatives to yield further positive results going forward. The tariff environment remains uncertain. Our team is aggressively executing our mitigation action plans to offset the increased costs, and we are making great progress. As previously communicated, we are accelerating our lean initiatives and significantly reducing our exposure, lowering direct sourcing from China into the US as a percentage of cost of goods sold from approximately 10% to 3% by year end. We intend to achieve this target regardless of any further tariff negotiation. as it de-risks our supply chain and limits exposure to geopolitical uncertainty. Our teams are responding to the current enacted tariffs while monitoring the ongoing media reports, and we remain agile and ready to take further action as needed. We continue to make investments to drive future growth. On the product side, we are investing in advanced engineering and product development to continue bringing innovative new products to market. We previously introduced you to OmniX, an industry-first automation platform providing a cost-effective way to accelerate technology adoption in the installed base and increase average equipment content per pool pad. While early in the rollout, we are pleased with the continued dealer response to the new OmniX-enabled variable speed pump, and we will launch other product categories with embedded OmniX control capabilities in the coming quarters. We are ramping up our targeted sales and marketing strategies to further increase our presence in high value yet under penetrated regions. This is already translating into wins with important dealers converting to Hayward. We're also improving the customer experience with the continued rollout of the Hayward hub training and support centers and hosting premier industry events. In the second quarter, Hayward sponsored the prestigious 2025 pool and spa network top 50 builder award event, And in the third quarter, we hosted our 25th PACE conference to educate and inspire our industry's most accomplished pool professionals. As we continue to invest in the industry and build upon our customer-first approach, we are seeing greater engagement and traction with dealers. As a technology leader in the industry, we are implementing AI tools to drive value for our customers. Our new AI agents are progressively fielding inbound customer service calls with no on hold wait times resolving approximately 80% of these calls without the need for human intervention and even proposing enhancements to our training programs. Hayward has a long standing commitment to continuous improvement throughout the entire organization. And this is a great example of an early success in customer experience. With that, I'd like to turn the call over to Avian to discuss our financial results in more detail.