Hayward (HAYW) 8 May 212021 Q1 Earnings call transcript

Welcome to Hayward Earnings -- Holdings First Quarter 2021 Earnings Call. My name is Alicia, and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator instructions] Please note that this conference is being recorded. the Planning to and turn President, Baker, now Strategic Global Business would call Stuart over Vice I Development. Mr. Baker, you may begin.

morning, to portion that we Thank release also find investor.hayward.com, Good everyone. reference slide our can issued you. presentation earnings earnings where this you morning the during the of Relations will an Investor website at We press this call.

may to our in fiscal any about These include the duty meaning forward-looking would indicated like subject our expectations, Litigation XXXX. from and statements. and risks, company during the the forecast, that release factors implied company that undertake not statements of Securities to estimates, variety this XX-Q with constitute are statements. company’s that actual such the plans, and a year everyone I does forth website make Exchange prospects. those will remarks update remind begin, uncertainties Reform statements we of Before Private within are future certain statements Commission. posted call, other quarter cause anticipation, factors by other earnings could Such such beliefs, Securities filed Such in Act just provided the risks for to set and forward-looking on differ of materially the or and Form XXXX results The be in first of to

this Form would turn well be measures discussed income prepared be for Kevin with believe GAAP, I in this substitute today’s Reconciliations discuss in Holleran. in call over results our our call, in the will quarter in earnings be additional we considered now not as non-GAAP our measures, XX-Q could to year like other our adjusted useful fiscal XXXX. should call EBITDA reconciliations GAAP. for as isolation as be to during performance. and Additionally, the release can first of the accordance included found a on net of will presentation information calculated company evaluating for which on to or The of non-GAAP

agile these highlights a to our net results. innovative of the you, of capabilities supply advantages from look first and ago production, to shareholders demand exceptional I of for following earnings our We earnings very will public generate great to adjusted slide public presentation It’s morning, value outcome. EBITDA a completion pleasure thank nearly Thank to were four of all continuing Hayward’s pool I’d a those with call we to some by lineup welcome involved and our company to year doubled which partnering to leveraging years record our growth, forward from tripled grow which able from in like in-market in and in particularly accelerate on for equipment. in well-positioned as offering business focus my manufacturing initial an profitability quarter our our on March. We process basis, We chain the our resulting as on our and first results competitive all new tremendous of the sales with the products. with good delivered quarterly being creating U.S., everyone. start the Stuart, come. to successful you

and compared IPO proceeds balance also important our quarter to We on sheet strengthen Hayward March first our as increase completed the for successful financial The our included we a XXth. very milestone used the growth first ratio reduced the quarter, down pursue opportunities. We to end of X.X at leverage debt to we year end as times X.X times flexibility XXXX. at which paid our

has as creation will truly significant ahead first forward. opportunity touch energized our on Our and company results value outlook, going at favorable I IPO, record look quarter we next, which the

with This will industry into activity. backlog year. Builders commentary summarize demand XXXX our the this than Now, on alone participants to earlier highlight industry was through a and are outlook ended and five. I with pool now even consistent from is it should outlook recent XXXX. stronger quoting and other extend that XXXX slide moving sizable some new why leaves trends backlog,

dynamics, housing Our strong work-from-home industry is market. ahead. trend, Belt, supported a that we look Sun tailwind and believe provide underinvestment We the by in will of suburbs favorable to and including the housing the the a as sustainable migration construction years U.S. stock

using seeing people supply they outstripping due often. environment demand an and created their resulting able channel. and strong been in supply factors the saw to We these in XXXX. pass more in which are we pools the constraints to We and that limitations, have extending labor are These have chain earlier XXXX is have season, evidence pool which trends through into inflation, higher continued

to chain. our a these addition positive trends, there position given the of value In number drivers in industry are unique Hayward-specific

heaters, a controls. First, and have variable LED we pumps, in upgrade-oriented and very products, position chlorination, automation strong speed key like, lights, salt competitive

This the price was third, was in effective in are plan meet to original allowing pricing production capabilities industry faster approximate operating QX new than an This increase And our of in our demand, date order source to an let XX% in us X% and production year. not late we with a year-over-year. including Second, increase more ramp for to pricing announced QX. increase offset inflation.

beyond. year to-date, anticipate the adjusted XXXX and million, strength million We reflecting and we healthy these for EBITDA product of are $XXX XX% demand to XXXX XX% and our broad-based guidance growth. XX% across of growth XX% of year-over-year trends $XXX portfolio range through market to the remain full overall continued year-over-year our and to sales providing performance net to Given in above

and we line at QX in quarter believe that largely expect will QX, be As specifically performance of QX. we favorable another look with results

slide a what makes Now, I’d six turn Hayward to like to to more talk about different. moment take and

operational First is excellence. on our focus

apart with in allowed and us to of ramp our Our rapid the by than dedicated U.S., recruitment to our for challenging achieving during and significant from production us associates, in personally capacity moment I to availability. their our This, resilience, increase a labor our resources to supply team actions safe commitment which up has manufacturing these operating early These set together capabilities, to results. thank XX%. vertical to includes more have chain quarter global take production onboarding and demand allowed in-market extraordinary us entire and capacity our in want by sourcing our integration despite competitors. a global to helped creative combined the the teamwork respond workplace increasing

a Second, it. pioneer as market, to connected share and pool in highly products, grow allows as our and of which the developed leader us Hayward products living engineered outdoor is market well

industry like the and leading plastic of generations constructed helped brands flow control establish standards shift market-leading products for Our energy-efficient heaters.

innovation pool and health-conscious, that through continued connected We energy-efficient products.

platform shows water provides and ways and of Our Omni The top essential sanitization, temperature, to create strengthens mobile pool with light app and mobile with proprietary of pool every features rated manages to of level to everything Hayward. app filtration ultimate scheduling numerous provides function. controlling cleaners, automation manage from customers water Omni and Hayward the the running backyard further experience. automatic value engagement relationship that our great the

key and the an strategy technology relationships I and won’t We value the and global through storied these and is important provides diversified But continue to customers have global across time which seven. Totally to Hayward. e-commerce. leading beginning our will that advantages in equipment construction, attractive a and as our and teams on walk experience. our the environment. channels, leading incremental deep pool little page. steps a primarily COVID-impacted residential service market. Hayward have have and on I’d on bringing the like organization pool a innovative all shortly. slide the program loyalty recognized be all can to industry’s capabilities the portfolio outdoor trusted pure-play most called we spend more focused see, offer to about products Collectively, been partner product weighting of technical historically and this competitive Hayward sustainable talking including go aftermarket and back more with key talented market we retail, in on I you distribution, sales and and the long provide we through environmentally and provider, brand, go new platform, decades market builders reputation touch broad and Third, this a and

North position more We our which America, have very represents sales. than a XX% of in strong

in to are over and the increased excited really showing increased market consumers Outdoor has their long-term the interest boomers increase the retiring their past market underpin to living outdoor choose in time and growing base has toward home environmentally a and customers. industry replacement, millennials directed has remodeling replacement outdoor installed technologically traditional suburbs grown outdoor are characteristics, continued outdoor and growth. We long with the and specifically play opportunity. sustainable including healthy investments. advanced projects improvements has homes attractive are we and decade pool in homeowners baby living Consumer spending spent in The base revenue about home larger products home The as toward The pool of migrating which to recurring at our demand repair, continue remodeling expanding living backyard. repair, for spaces. equipment investing products, than as tail increasingly aftermarket of an and helped industry opportunities as outdoor important faster are has trend make a been

of our larger are recurring an which builds sales pool the new the of is the base, XX% as provides opportunity grow they aftermarket, While annuity important sales. represents and

investment reliable prioritize the in leads million growing past to we outdoor is the in Over homeowners XX base installed over living of the seen estimate experience, pools installed increase we year, of XXXX, globally, a which spending. further base aftermarket have as

of and shift connectivity I Things pillars more to slide by and technology the eight touch aftermarket value more driven move on enabled Internet key of increasing the energy-efficient and new opportunities that our range market. products, a sustainable environmentally primarily automation. drive Our and pool will are increase products, to higher ahead to

to grown X% historically Our has in the industry range. X%

of space look the backyard strong new four upgrades. long-term trends, home suburbs tailwind trends and the growth opportunity season helped investment a lifestyle. underpinned to important creates we the outdoor the part should truly a the living more years and forward, With for components the Sun centerpiece in of the and extending usage changes see are As trend ahead. and secular an movement pool the growth. reset the such the demand Demographic There in provide the owners have compelling as pent-up pool home need for the of demand, and is equipment to and healthy the by drive while pool as Belt we

the and annuity-like this over one of time. equipment world’s installed have pool replacement of bases repair We and equipment of largest benefit from

innovative including experience customer’s desire enhancements, sustainable, products provide and New more a tailwind and connected and products. pool environmentally upgrades a as friendly

and investment and big And construction growth home continued files projects and industry track provide outdoor the a in lastly, trends. in long strong ticket price of living given increases. remodeling has construction annual through the New inflation activity support which order industry record pool favorable management

I Hayward’s supported of drive and is and profile structural focus pressure to on continues earnings mentioned inflation long-term team recent position, operational attractive potential product consisting industry and industry offering growth tailwinds. As market inflationary earlier, experiencing on excellence and our management. focus financial revenue the trends our by

As Jones new upgrades we for more continued turn who I’d pool over financial strong detail. our usage, discuss growing builds, product a in With like growth. results we and rising our to the file to ahead, call Eifion that, look the believe increased the order will support will base, prices installed

made All on will be and Thank make morning. a Kevin, nine. I on start slide you, comparisons good basis. will I year-over-year that

our million pleased in for higher very X, of are earnings living gross net and with record increase X.X% we surging residential $XXX.X XXXX capacity our increase sales accelerate first resulting expand foreign acceleration above, increase new million, to to currency discussed The the was increase $XX.X resulting $XX.X to IPO-related a results Selling gross the XX.X% trends margin volume demand sales in by invested continued higher expenses net logistics or from of net X% savings, ability an of the increased along million an primarily a of expenses. stock-based our the rebates strong months leverage, expansion XXX.X%. three earlier, a production price profit sales, demand of favorable favorable North partially was The general XX% the for and from capitalize compared mentioned ended and our a price along special XXX XX% in first increased IPO, same while Net pool addition significant period year. profit cost materials on expenses delivering and performance. inflationary to raw in of pool pool mix well April impact, and and an million points, as outdoor with offset prior with effects shipments equipment in margin quarter for reduced million quarter other driven of increase XXXX. $XXX.X the Gross or net million America result As manufacturing $XXX.X mainly result administrative increased sales deal the as environment, and upgrades expenses. in price or equipment, related margin An compensation $XX.X by of basis as volumes increases increase to to to constructions.

As gross the X% decreased $X.X debt in partially of profit SG&A development million, $XX.X are the of due year million essentially and million of expansion, reduction $XX.X in million. and the or Net XXX to to our expenses. driven rates million a net engineering decreased Operating and a rate income XX.X%, percentage by increase $X.X million margin $X.X prior improvement sales, income on our interest to higher expenses interest XXX% The net a ABL SG&A expense sales operating Research by in to by reduced basis facility. increased flat or $XX.X was points. floating offset period. or high an from by use

we with IPO. quarter, extinguishment $X.X our first debt of debt after losses, associated were repayments the million incurred During which our

a income compared $X from During million was benefit tax period. income the expense prior $XX.X of to for an tax million, to incurred due operations. increased year primarily quarter, we of This the and

a $XX.X of XX.X%, to income by million an $XX.X to XXX%. net prior Adjusted to increase compared increased $XX.X year for period. increased effective the in tax year Our increased prior loss increased million income $XXX.X compared Net to to million, EBITDA Adjusted $XX.X XX% period. rate million, million XX.X%. the representing from EBITDA or margin of

expansion resulting increased is to XXX% North beginning key the America, quarter. XX. In residential two structure first and and XXX raw sales North sales was leverage segment by to reportable net Gross partially turning expanded margin basis import Now, increases, aligned in points by increased higher related The profit net management geographies to $XXX.X by pricing. Hayward’s material, driven margin manufacturing of The and XX.X%. slide increases driven cost to of for and savings, price freight $XX.X XXX% higher World. increased was offset income Gross and SG&A million. America, North duties. segment increase our $XXX.X from Adjusted $XX.X to million. Europe partially higher its increased sales, million. on mainly increased equipment America increased by million by operational XXX% gross The pool strategy to XXX% volume to Rest segment segments, offset to income segment higher driven results expense. go-to-market and inflationary

driven by raw World expanded Rest well the period, by price partially primarily by outbound as offset higher currency inbound volume pool exchange. XX.X% continued Gross material foreign segment $XX.X Rest a increased million. segment to year $XX.X to inflationary XX increased Europe million. to shipping from and for XXX% net impact points to World, costs. from costs, to primarily as and XX.X% Adjusted and income of profit slide demand In from income by strong million. of $X.X for million for Gross $X.X a favorable increased increase The million Turning and currency. to increased margin segment Europe XX% driven due the by the income higher tailwind to period. and $XX.X sales for leverage, The from XXX prior impact products by mix $XX.X increase year XX% prior was was favorable volume, in million basis from the and increases

Turning sheet. to our balance

our quarter times XXXX, end of XXXX at strengthen adjusted to to growth X.X fiscal proceeds facilitated pay the our debt, EBITDA. of with down IPO the well at end from the first times position the deleveraging LTM as to continue the by the We year X.X from of in as

hand terms channel we anticipation of the During use investments credit million, typically comprising and use a XX% and investing the collected position accounts for a second expand Consequently, These a on season. million capacity. extended cash end an was first operations resulting the Total in used or million year of receivable the million available $X.X in first under million of period. of liquidity the pool million, our used quarter the $XXX.X compared $X.X cash was $XX.X from build $XXX.X to of they year, to cash ABL use year continues Cash million credit prior positions $XXX our in increase in the revolving of inventories future of the in equipment million, cash are first quarter $XX.X the our the flow grants facility. calendar their prior decrease as borrowings substantially over was quarter of business to cash activities receivable from The at due in to prioritize period. customers have from quarter. $XX.X

of mentioned, XX% for the we for adjusted issued growth year-over-year full now $XXX million, The the million As back EBITDA in Kevin. the ranges I Kevin XX% year-over-year free turn a an to to of reflecting guidance now XXXX and to And flow year $XXX will cash range XX% sales $XXX that, XX% of to $XXX outlook million to net call growth. between with million.

XX. will core pick ESG. up Thanks, commitment drive Hayward’s Eifion. on our to values I slide back

us a environmental well as benefits our products, of the lot talk our manufacturing as about You capabilities. hear

be diverse water chemical our years, generate on conserve committed expand sustainable kilowatts we leading employees. which we organization. products. efficient, through and over built slide helped energy And used at and of products compared is to policies as focus our integrity product We our for have offerings, past generators. backgrounds the avoid by We are by reduce unique speed the installation savings, to the product forefront the XX, three finally, innovation focused pumps being generation are previous ethics strong an with million ensuring more On providing highlight XX% to approximately on example that and our a chlorine and usage and continually billion safe X.X design environmental-friendly of solar few pounds a throughout work with We we environment examples, a team pump energy approximately leadership usage. To of in energy compliance remain and strong have reduction attractive we creating a chlorine committed to culture and and solutions. all the harsh talents have XX of variable with

installation to XX% pool system, following to chlorine water. the up less the treat will Additionally, of UV require ozone the properly the

have of gallons technologically we X transition Finally, the market and to approximately highlight strong wrap billion saved cartridge our leading offerings, filters. XX focus living I with pure-play in competitive product on up our and positioning and treated brand, excellence. position as operational a chemically water space, outdoor innovative Hayward’s the and slide heated on will driven

opportunities. see We demand continue supporting structural growth robust to long-term trends and

to them progress. for as know are We to journey Operator, public getting shareholders line questions. and look begin our excited open company we on ready to With that, are our company a our to and the our new now forward and educating

first you. question from Your of Thank comes America. instructions] John Bank [Operator the of line of Lovallo

taking Hey, questions morning. this guys. you Thank for my

go those X% on degree is, recent inputs resins one of you price increase that key side us forecasts? the of expecting And first are to The and enough to back the the component lines, and just needed? are, like, can with and ability market what the what’s your in your your along additional is in in remind inflation motors increases you material

of you mean, Eifion on key Yeah. terms hit some intel month fluid resins will But percentages. a that we to -- believe back enough, or those lot give before turn we of of increase Hey, of it’s it out We a a in obviously, I some inputs, a looked announced them. of so. good some on we size price believe and ago the John. deciding our half but electronics, that with I situation. to is

a there we effect which time normal of takes Xst an believe you more that opportunity around timeframe. as I price October year also have for on We -- increases,

inflation if that we what are in inflationary believe, So we is are believe some at to a we decisions point, the half a face. But ago month to there make hit headwinds that this we that additional continues us sufficient feeling. there and opportunities the for announced

John. morning, Eifion. It’s Good Yeah.

primarily cycle the copper, As are addition with programs. establish as resins, When pricing, Kevin how at actions cycle of the season, we out taken of balance price across initiated covers commodity action informs raw on we mentioned, that will of inflation protect have you main beginning out are basket our into side, March, our be effective increase I we the think Those about QX inflation and expected we for to we the about materials, and the the then we steel typically through to have which, in at think pricing Globally, year. contributors which the the the mentioned, really inflation substantially the X% of to margin. of communicated pool in will mitigation previously price that. increase we of become end QX us Kevin

you I it. just a follow-up, financial was can curious, then That’s the as stronger than the monthly with quarter progression month I of prior? each Got am What in the us And help results? helpful. forecasting what drove you in what mid-February. get you am you and between reported can have key the us drivers get some help been the that trying maybe delta is at of to

optimism. year I the into Yeah. we some with came mean, cautious

QX very balance be We a growth XX% already flat, strong have assuming we at communicated. quarter, We year did guidance. year-on-year year-on-year line would with can the which infers as full QX of you do as XX% we a the XX% topline. time, to seen full expect not be That at the XX% to project had up from this first growth, see year in

seasonal Kevin comp a obviously order a have in very expect the setting good period, still buy bit comp is up too sales XXXX, strong, QX a in we through for migration time period QX but to year-over-year. But, file But into early to remains beyond his visibility little as is expect year. exiting remains lower Belt up channel, period. early that up industry strong millennial QX. that QX mentioned again, focus XXXX remarks, We be seasonally sentiment to good the have continues, indicate investments. the period great continues, Outdoor year-over-year. to Sun living sentiment strong. It’s earlier the a we to

in continue All industry. of us influx to of these the profile themes inform an demand in

very much. Okay. Thanks

would… John, I

Okay. Go ahead.

strong. just add, demand like, would is I

I think growth, market is inside now that to for products demand the continues file strong. very order the Hayward Right escalate.

We to with And continue on able how increase and is labor Eifion what just view with quarter-on-quarter. to to and best be our capacity a production to everything capitalize capacity happen market continues said and our we really to production the can match demand. order material that inflow

Thanks, guys.

Thanks, John.

Your from Research. of the next of Nigel question Coe Wolfe comes line

how on Hey. were to I’d some [ph] capacity able This for that just you more expansion reworking Good product capacity a the bit footage opportunity a Brian you morning, the demand I little you say robust? left square dive congrats there wanted And walk and or extending the just in able have then utilize if very continues to remain do on everybody. on expansions. to good was to Nigel. idle Can quarter. of you also shifts much is how through lines? without do were

ensuring I mentioned, as labor Good and expanding about morning. our Good you shifts, the the our would Yes. obviously but into match can say, bringing question, material company componentry really it’s Brian. and more that desire. some

it’s So in working really there. lockstep

additional investments. globe we big the need to opportunities have around before centers six of capacity contemplate Our capital excellence

market can going continue to this our increasing So satisfy demand forward. production by we opportunistically

Yeah. I mean…

Okay.

morning. good Brian,

Just to build upon that.

placed us facilities the channel. is think globally, mentioned, three have we shifts. service Kevin in inside As as our proposition be But America, large the speedy mentioned, for which primary expanded North Kevin market with to an advantage six to give we

capacity tremendous remaining manufacturing left We our within have footprint.

We distribution have our months six expanded last in additionally, these network.

as in We has which utilize we marketplace have enabled XX%, Arizona, the facility our model additional to to distribution to West existing by shifts. which has again footprint continue a machinery timely variablization our added us increased production continue But Coast service through our further way. expand a Phoenix, through we in the

of Great. shift whether in Thanks. quick is, responding, those along the follow-up IPO? And the the lines? you be competitors then how it And competitive have M&A kind since or any seen a of or IPO or dynamics anything announcement marketplace the are in

have mean, I wouldn’t I I industry. this a I change. really think, seen well-structured say anything is

is is we to are understand gains the individually introductions partnerships, new really share there. what’s really we good of in interested all in think I inside what’s channel going service drive, growing and that and product pie

So, I mean, we interest. have an

You the mentioned on side. acquisition

pretty are now and as front seeing as active topline in well grow to inorganically. can that we continue We organically, both right how

two no, or public. have been wouldn’t months so say shift of we in So, the the aftermath been I since that. There’s competitive much in

will on. Thanks. I Great. pass

Thanks.

Brian. Thanks,

of of next Sachs. question Goldman Your Brian line comes from the Lee

Hey, guys. morning. Good

morning. Good

Kudos on a…

morning. Good

the sounds Maybe of in out well. here quarter obviously the visibility, XXXX like …great it’s delved sort back going gate. pretty to earlier question about of growth and

guys algorithm volume you of a going talked industry that’s really the organic I perspective and about to into like percentage points sort lot at you to visibility, out guess points think mix, at of revenue far least are a the Hayward. percentage that’s of right I growth had for X moving medium-term trying for of that’s high about think things the of time bounds. and heading they we of right, ask to from X this right XXXX. then just IPO if year, as said price, am single-digit the Just the mid-single still you for

out bounds we kind continue So should about of time, it’s some be growth medium-term you is of think to where whether algorithm that you whether of sort revenue of rates? or right track for it’s on growth, can just at price, period still as strong XXXX the these volume on

of understand dealers from on upon job this all size XX then have construction. there. along, a is from industry lot this frankly I inflection XXXX to reason continue a it’s out this from touches Yeah. because, based the that There’s remodel leads what overall hear your those It’s short-term what XX% the upgrades, and new can’t usage of our we just has upon and done year is mentioned aftermarket, and right absorb really components Pricing based our We be could previously up The mind well. market think industry which builder to seeing here outlook into great That in now frankly, no on XX is which a that repair other and current -- to that that driving as our replace. being Brian. pass think too, that and how mind that the great able I it’s is there there. question. on disproportionately given we to that

group and to of think comps off But And pass be. will as leave different single-digit guidance stay we would we really in like expectation of we as that XXXX. we comp we I would clear kind absolutely here that through. believe where if and with off the will we to the touch are I larger out get and is in year something to will for mid-term. to think XXXX we high now the that through hold XXXX going Obviously, like plays still beyond this play look giving than see on

for adjusted when to we XXs, levels obviously, revenue how going mean, is model peak a of But that balance kind are prior moderation enough. of sort we pretty how in much dial to thinking And of annualized in out question you target here, -- past? kind seen level leveling Fair margins, year for we I running or is peaks. of look the have right in simple the the of margin, as moving question like the EBITDA historically, just above see sort the sustainable I high we year should what’s on think, a one be at terms XX% out the the you an are move just it. high have kind about above of at seen level impressive, the in the of then or XXs basis, around level, you bit, level it’s through XX% another Okay. this the is the the

achieve bps quarter-over-quarter margin, and leverage we XXX question. a at with gross are model we and really variablized we year-over-year really able very Yeah. been Thanks, which production tremendous operating was Again, up Brian. margin the development being to the on that the XXX ramp pleased basis. reflects that of more bps as Look, good level, both have the

achieved believe a levels structure. the business learnings continue we at we to higher have now in structural that our that that we in shift is on as model those So operate

We base govern and continue leverage our management cost strong to have our a we SG&A investments within program area. that to

balance bottomline, still XX% the for a growth we good full year, the of the but be XX% expect So slight we moderation in toward there our think when from QX, year. our about will

it. I it Okay. Thanks Appreciate on. so much. will pass

Brian. Thanks,

from comes of Ryan of question next line Merkel Blair. the William Your

Thanks. Hey.

a question from First said, EBITDA about quite quarter. to lists me, I typically first bit just but you thinking would EBITDA, XQ the think second quarter the quarter, it for similar be first

So So just second get you upside don’t is yourselves there to just seasonality typical XQ? a the simply quarter to want clarify, or could to strong this guide? a ahead of little be

played QX, started at know out start The there shift Ryan. QX still sort to aware I the Well, you XXXX orders. of early I is with really year, very way seasonality really a know are because in-season the are fulfilling this us buying strong that, you we such in looking and close so last when manufacturers of I But of think, were shift industry, a slight the it.

QX were and So very deliver were which of able able we of a to harvest kind buys, backlog we build to start strong here. and with early

rate inventories it of So, that not with frankly, are, through. there’s out selling it’s enough there the

similar see kind guiding again, really is to So, if able these at extremely in -- the strong. we demand point pools through usage will the headwinds, we QX. say whatever But in and work are is But, to of certainly this we are the to demand and there interest there. here The the QX. backyards is out of underscore could play what to

Okay. there work Makes and how taxes quarter Thanks. And you secondly, from see the a might more repair in Yeah. can the you sense. in comment of lift the that be second much of did on quarter? then, and

Yeah.

There’s would much elsewhere given have in earlier I what’s It’s on. as none we hope. able region, terrible earnings to get of calls, heard have out been put you the some triaging Frankly, think product going strong of a the as been echo into a think, would As demand I event. us lot we there.

more fix. finds a I think to create into out it’s permanent continue region material its as be play QX more able going to of the into to way to

a heater if taking I are yet, be I the water think there’s heater that kind been found of -- people flowing to get a lot of can’t think offline just water and treated.

out going results. a I there a an for had think had don’t enough in impact impact So question, in answering Ryan. impact but large me your It It put really to huge QX QX, it number on continue. but to our it’s not is some

I will All Thanks. it on. Great. right. pass

comes next Baird. question from of Your of Halloran Mike line the

Hey. Good morning, everyone.

Just or comments here. some questions

or on of whether the any variance side, First seeing e-commerce, you kinds four those channels, the channel, through major builders? distribution retail between are

think mean, of real I the, No. that so. I there’s those right through don’t now. think I all growth channels

primary through to is our the means know, you market distribution. As

supporting are and partnerships builders the servicers. strong retail, Our there, they the

Ryan’s pick -- were I they think a triage quicker. affected question, up region that to there, turning folks to in like in that, they I if find see for inventory to place on think to could Texas the the some equipment internet do

So a base maybe the across some pickup of channels. there, but broad the all think I -- all pretty slight

thoughts about a of little tough are the are And what bit? your I have capacity distributors on that question channel normalizing timeframe any catching major production or things. start thinking saying. the some or own starts talking the commentary builders which maybe but are backlog, from guys makes maybe a on that your backlog That How you on But maybe can how whether of can kind that’s you when here, then that to when about start up normalizing sense.

to Eifion. talk continue build The Yeah. through The the QX order Great -- into capacity address to expectations to morning. backlog. you production good QX will again. is file to This current strong

we This in the to of order terms end QX the the normalization will value the daily backlog absolute and believe in as expect into interesting to file expect we we QX, backlog, QX. of normalize. an exit sales We profile QX within Normalize into the continues business inflect move term. start But of a into is back will change.

Appreciate Thanks it. for that.

Wertheimer of Research. next Your the Melius line Rob of comes question from

everyone. Good Hi. morning,

it allowed obviously your on channel inventories basically seems industry. the any And you quite booming, wonder outperformed you a is have and sales share. I comment long good, are have of a So shot. gain the bit seem to industry little if much by operations like risen as results our just you -- like as doesn’t It

stuff course position you go the maybe industry the a you better order you are usually share of do over little to, have year, in that So your think doesn’t distribution, a just to of that see fulfilling an I with to am bit share about in out others shift gain and do to allowed restart growth than anything want better you distribution curious or somewhere characterizing whether point maybe there’s it? that you that else stuff you else. Thanks. in some

Yeah. Great question, or Mike Yeah. Rob, sorry.

you I highlighting think I operations. appreciate the

with You been ramps of Hayward satisfy there. first I some And be closely quarters could there that on demand, gains we share because think, deserves orders, as it’s able I our itself. execution operational not do ultimately, able kind because which quarter, team builds high to of that was got out running, think some what I up some have it in past think market several believe brand just lead around our chain to beget accomplished production that it do I to of working that production. that our praise this been additional the your for frankly, question to a ramp but supply for

you as want inventories now. The necessarily sell-through not and any of said, channel right them. where is So us very are brisk

more everyone’s production. for So looking

product and a are saying, our showing close and connected environmentally response bringing looking our are do and that we the some that and believe for marketplace we reaction. trade I It’s Our would launches strong folks recent think had partners out I are nice looking partners us. great pull-through to some there. lifeblood that’s build to channel just initial great more by products sustainable we have to

how that’s Rob. it, of So I kind see

Thanks so much.

question Markets. Hammond final Jeff of line And your of comes from KeyBanc the Capital

Hey. Good guys. morning,

Jeff. morning, Good

Good morning.

I component of what’s the the and standpoint have sell-through outperforming. want just you to where are obviously, just a very But growth busy? on, just guys on and are seeing touch they kind contractor obviously job great on doing a of you to be from just constraints very, governor -- got base, kind around

Yeah. question. Yeah. Good

integrated apart convert up materials I potentially a we with think is, assembly components industry. the others end we as which vertically think have take from raw and finished of us manufacturer, that I Hayward we into those in one are differentiators that commodity sets goods. the We into basic

capabilities. in in think steel gives chain component So an copper, there’s we of supply I we less are resins, the metals. and some Clearly, reliant tightness specialist commodity manufacturers, supply that edge on which see us and communicated we some our have

suppliers. have to We close continued to stay our

those made more provides so think supply work and have into than to we marketplace vertically remain Hayward suppliers differentiators others. our for open. large a the commodities I investments us with is, that to one again, continue the in and We that, of of strategic big, to will integrated some we are the sure But, secure volume make lines agility

what kind of -- or that guide then how in rebuild to inventories inventory might I the around of mean, how year that kind end does inventories, rebuild the And success kind your Great. years? and Okay. out just the on contemplate impact of

about we we -- addressed feel with positions was will Hayward. saying, start how years. area. Yeah. we sheet over when at into comfortable I inventory years the management by three focal can Look, inventory started And last improve and balance the a think now inventory ago, overinvestment we progressively to right three our have that We

year. again of really XXXX raw inventory positions there and haven’t production. the by see the will don’t the expect the build particular centric our end at ensure to values around is to inventory up material We QX, that’s of of investments to absolute for end point supply from gone You end this

to marketplace the continue with and manufacture will production. serve We

are balance step channel into the the I model on which revised discipline we remain to more their is much As sheet the that real-time the has that needs. and introducing, think future service accepted we will years,

invent are channel. if sorry, specifically -- about in inventory the, you asking Jeff, in in channel the the

of months this have anticipated are to sales inventory we based the going it’s of really demand. -- to upon going season I not through think,

are able back positions So weather think, year dependent, to inventory later historic levels. out to it’s this into really I get anticipated probably the we before

Thanks. Good guys. Okay. color, Great.

Thanks.

Thanks, Jeff.

Boroditsky of And Saree the your next Jefferies. from of question line comes

for fitting me Thanks in.

about and large your price ahead of You -- actually lag backlog? your this increases when see increase a you given pricing you there additional into put runs a to Did price effect. P&L between is talked when and obviously just it going pre-buy you in

Saree. announced effective two segments morning, slightly different announced -- We dates. Good Yeah. the

March late much be the an it of see that of announced Rest we America, before QX the Xst. We date probably much World, Europe see took P&L with before it effective that But pre-buy impacting in and will a effect. effect North or in we here really April. the So of took in May didn’t of

in what that be North So it indicated segment slightly I America. than could just sooner for

in inflation mitigation that effect in Yeah. have our suppliers and add QX. those programs be the will typically through I tenure with are to would six just we eight months month that

Saree, we will new through on QX. pressures So QX, though pricing orders but reflected inflationary mitigation mentioned, will as increase cover the effective be the on in QX, really price became invoice in the

It talked benefits your new products. like you reduce use. help the some of of about products chlorine looks Thank you. it. Got And then

the seeing Just are there, shortages for the and equipment quarter? increased did demand types of you benefit these given that

Yeah.

capacity partners partners a seeing immediate worked OEMs I actually with some in of closely some think there. the the most and aftermath nice loss that of we are very of channel Frankly, with Laura. pickup us trade Hurricane

moved production in and the aggressively pretty capabilities we some chlorine assembly generators So to production of channel. some out in toward the capabilities and increasing get salt

to tablets, have it’s use ESG But a might cut product, of which whether HydraPure actually usage pickup XX%. an of a with are or introduced UV or chemical ozone. to HydraPure a I think that’s seeing just the is late the actually you chlorination, When combo chlorine which last up that is nice it’s cut we any of we will a usage. paired salt So year, our can by the form and was alternative from salt and great believe on alternative and there touched standpoint,

your pad not. whether So system that’s alternative salt good of regardless or on you a a have

Great. Thanks for the on quarter. taking my questions. Congratulations

Thank you.

Saree. Thanks,

to for Kevin remarks. would concludes the now call like Q&A session. to Holleran turn I That closing back the over

just Thanks, like interest Alicia. everyone in their In thank Hayward. I for closing, to

can generate to phenomenal look to stakeholders to again. in is and for the team questions well-positioned talking value As to to we results, continue have are and all very producing out our ahead. you and reach business forward operational Thanks years financial our if you see, again we follow-up Please any you soon.

This conference call. concludes today’s

disconnect. now may You