Hayward (HAYW) 1 May 222022 Q1 Earnings call transcript

Good morning, and welcome to Hayward Holdings First Quarter 2022 Earnings Call. My name is Austin, and I'll be the moderator for today's call. [Operator Instructions]. Please note that this conference is being recorded. I will now turn the call over to Stuart Baker, Vice President, Global Strategic Planning and Business Development. Mr. begin. may you Baker,

presentation at good press We has release earnings Officer. Investor Kevin our this Vice to by we will President, and can President quarter Jones, Senior Chief been our XXXX the website of portion earnings Executive this Relations and also call. slide where reference morning, joined you, you issued everyone. first Financial I'm posted find that an investors.hayward.com, Eifion Chief Thank today morning, Holleran, during Officer; which and

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

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

end quarter, morning, inaugural personally X-year to as good welcome this celebrated earnings the of to all partners and thank great making everyone. year It's my the to and channel a of success. a I'd employees, you, dealers, for our you our quarter we like first Near Hayward's Thank Stuart, vendor company. pleasure public anniversary call.

last As back be have months, we I look over proud the accomplishments XX to many of.

yielding to over net to in sales a the which sales, XXXX. QX first exceptional public an year-over-year strategic and X growth build start million both in QX delivered We track production position M&A leader integrated meaningful year-over-year growth organically some record margin. operational share current a portfolio on teammates as on top work has quarter that have beneficial earnings in marked as especially in across advanced reputation our highlights strong EBITDA a all of supply executed by strong performance. product key our forward strengthened consistently significantly our was $XXX by quarter. company of made and We of and a Hayward's XX% advantages Adjusted create leveraging This success record performance initiatives very to I'll of We as through our presentation XX% hard $XXX of many XX% from the we to look grew global of stakeholders. chain We financial net our and our XX% innovative years the strive for on have a record and proved the to investments of value XXXX market technology. with to vertically have model. in environment, gains. organization in of Slide our another led million, of resulting continue market The

Leadership, on our Slide As the Sustainability. Conversions, Dealer ability Products, execute by New Environmental driven Access Broad and growth: to to Digital Channel be X, our Excellence, Operational of continues performance on core outlined drivers

have range and through we more look gives confidence factors diversification in detail being items this address we to of Operational as wide expand key presentation. I'll to me these as on let Importantly, our a the of some the But growth, our move success, supporting pillar provide years first, of our come. a we our business me that Excellence.

us and to ability the to structural provided recent chain expertise profile. improvements maintaining Our have operations supply vertically-integrated procurement output margin the while our greater increase flexibility, our giving

production quality facility the at allows industry, will is breadth the SmartPad offering. are of product I'll on product of new availability these sales the in most for more lines. and excellence in challenges leadership the product the through in opening our to companies On Omni as us focused creating despite focus region SmartPad, than of automation help taking powerful by in on Omni our led X, report Our the IoT and digital to the place sanitization the well us devices. focus doubling logistical driven We're automation pleased in the systems our operational capacity to and Europe on expand as highlight that Slide operational a experiencing. ensure heart pull conversion also technologies by our IoT-enabled our

launches year-over-year. all simplicity ColorLogic industry top new index Variable with of the continues rate the driven recent by lights, technologies, categories product new including salt SX controls, supported vitality these has Heater of pumps, in color XE X controls, and of chlorine variable LED which PL array Speed speed base Small outperform generator, our XX% to Hayward's Footprint growth of increased Universal heaters a being the Gas growth power lights, with in adoption Our by to increase industry, continues and have of Omni LED AquaRite categories sanitization. use XX%. broad pumps, improve user product The connectivity and

allowing remodeling upgrade, provides key our construction. new replace, offering complete and markets of end Our pool aftermarket to across diversification, participate repair fully and us

significantly aftermarket in new conversion strategy upgrade salt to aftermarket of speed higher key products the level chlorination that a Moving and variable opportunities X, compared is of to Energy. and controls, Slide rate construction highlight Chemical I'd part the our for current take such important Digital, for pool pumps. as like There is to penetration an growth

working Our sales exciting as with teams technologies new these professionals trade promote to aftermarket are upgrades.

seen The is the evidenced for typically as by new dealer participation. Hayward user. loyalty energy than the a levels. compelling see On equipment and the as highlight and sustainability increasing $X,XXX of acceptance, the remodel initial growth non-automated Totally full-scale by penetration spend a simply incremental X, between have these our program new adoption greater a our We greater Slide construction opportunity the revenue this we XX% lower for SmartPad key end in in and technology, to around technology technology, manufacturer, We pool billion feature-rich pool market construction benefits aftermarket X to and the at categories lifetime aftermarket or stream. difference SmartPad the point efficiency the provides legacy $X

around which on as typical lifetime opportunity trade this of our a technology years, Slide we equipment every the discuss feel we a long pool an has for backyard M&A stream Given the replacement briefly work adjacencies. with I as associated well vision. professionals runway X, there sales or execute conversion, which lifetime focus years, with XX tuck-ins to a our core and is will focuses XX teams for and strategy, On marketing as product pool key This provides one compelling value is growth.

a leading quarter closing have pool, of that X Hayward's acquisitions, tuck-in novel of variety You'll compelling at further beginning we Control recall with leveraging leading technologies announced the of LED ambience and strategic backyard Omni our of the increase which spa the from to technology. the features, all the and which benefit water lighting solutions of

are our product portfolio. about good with second products would contribution launched leading for Hayward the XXXX into lifestyle Channel help product quarter, time the We We partners these expect are they and these season. differentiate progress the make be in family, in will making increasingly to businesses releases pool to further integrating fully Hayward across excited

As over like we pipeline to capital continue who and are in will we strong an I'd have will look important Jones, more discuss With forward, acquisitions be our that, we of financial detail. to opportunities component turn allocation. Eifion to pursuing results our the call of that a

good year-over-year made morning. be you, I'll on start will XX. a comparisons and All Thank on basis. Kevin, Slide

foreign prior year aftermarket. achieved growth to impact previously-announced period As in both first the growth XXX Sales costs price driven XX% sales results throughout supported quarter demand cost pool by new of of resulting the the by connected impact in in margin the for inflation particularly excellent in an in channel, adoption construction was are impact increased escalating continues during quarter growth pressures. commodities a freight increasing driven pressure pleased accumulative by of by $XXX.X in price currency Omni volume to and pool currency first The was Gross volume devaluation. more earlier, the basis products, Volume of from inflationary SmartPad the partially are growth $XXX.X report Europe year-on-year. and, Kevin improved price in unfavorable increases XXXX driven the a primarily and be for the with our decrease the capabilities profit increase to in Gross and reflected of million. foreign record well positive our first adoption equipment of healthy circumstances points, XX% to impact. and quarter continued we realization, geopolitical operational suite Rest mix, of unfavorable mitigate X% as quarter region. the a with our increased The by the importantly, the products seeing quarter. net XX% results by XX.X%, mentioned offset the to X% Net that North production muted World as profit aftermarket from was lifestyle and we million, over America, certain

increased persists. This distribution, X% company a and primarily driven marketing pricing well and and to profile expenses and increased prior have inflationary capabilities partially challenging beginning surcharge cycle. compensation as have but price the the environment to incentive a IPO. been as remain our our in customers. administrative Russian-owned the regulatory the for increased during Selling, the the period write-offs and Our the to impact margin business, of of also which was successful included warehousing evaluating to a further confident traded general the in expenses inflation expenses in supply which in we're and in public first operate for offset maintaining related expense, implemented $XX.X period, we structural stock-based We mitigate inflation, compared to compensation lower are by by in quarter initiatives as lengthy costs ability surcharge the remain navigating as place million, help includes and year at need of debt prior this price to increases chain bad the and

we leverage growth of achieved a decrease and have product the percentage Research, a XXX As decreased $X.X during support grown. increased net business points, XX.X%, to expenses basis development and investment to to development. reflecting SG&A engineering the sales, million, as the business quarter of X% reflecting continued has

to profitability. facilities. primarily expense the year, prior net debt sales, period. quarter As sales This $X.X quarter. a decreased million in RD&E the lower credit driven quarter million was and and increase in to percentage Net Operating to first net to XX% operating was compared second X.X% for rates year amendment result of repayment first of XX% income by the increased due in prior income as higher to interest and the the a $XXX.X the to interest to XXXX conversion compared X.X%

prior to result EBITDA and a margin we XXX% increase XX% increased $XX as Adjusted quarter, impact During decreased Adjusted the income the basis million XXX incurred first an of supply $XX.X materials, EBITDA of the million higher or chain compared XX.X% demand to constraints. result tax higher a decline million period. freight of sales raw net is year income. primarily to as margin operating increased on for the to the in to quarter, expense of and prior in $XX.X million. the points due an to $XXX.X The compared year income representing and Net period. inflationary labor

Now, segment results reportable quarter. discuss the I'll for our

a million, decreased first to raw XX% resulting key primarily Europe geographies Gross and management profit in decreased As the favorable Hayward's higher America to stubborn Slide Adjusted increased quarter basis go-to-market and million. materials $XXX.X approximately freight. volumes. North increased to million. and points Gross segment world. by XX%. X% sales margin to $XXX.X aligned rest XX% net quarter and sales XXX strategy, operational to its in the for income the segment and to America margin increased and The to XX. due while driven adjusted XX% North $XXX.X the basis income Segment was impact price increased increase XXX XX.X% XX% X income inflation a $XXX.X points is of reportable Beginning segments: on million. XX% for structure to reminder,

basis margin X% expanded XXX million. the XX.X%, million. XX% XX% income Turning by the on impact. income in at million, to X% world geopolitical and to of XX.X% increased Gross profit quarter segment $XX increased XXX Europe were net or points approximately margin points. for sales impressive increased from but yielding a to The Europe Adjusted to $XX.X an quarter X% the $XX.X in favorable income time. X% negative increase by increase $XX.X favorable sales an customer price and was first driven muted rest to Gross million. to due XX. Slide of circumstances volume benefited and partially by unfavorable Net primarily mix. Net of increases to segment basis foreign Segment the currency offset product adjusted increased price this

million, the $XXX.X first period used share to early of due was in cash the period, The the last the EBITDA quarter, seasonal the period comprised the In early Xx seasonal higher in season support working hand at and for that, million. use program $XX.X million, with expenditures. during million. quarter, million the a cash of the months and the prior to prior prior activities the debt $XX use million, quarter for which reflects similarly on $XXX.X to buy million was flow in million $XXX.X And credit compared first I'll requirement the adjusted $X.X $XXX the as on Kevin. liquidity facility. XXXX. of capital unrestricted sales from repurchase, first $XXX use XX for XX, to back of 'XX/'XX limited period. increase capital comparison was prior X.Xx was our prior million the call now working capital Investing of investing working December from seasonal a were the to activities of programs. operations quarter comprised cash expenditures. in of reduced cash quarter working year was first completed end Total capital Despite the the of to in was buying use the year for million of a cash the primarily use compared cash a $X.X for a For primarily inclusive was cash $XXX revolving of compared turn for capital the to leverage capital to Net availability There

Hayward, or Thanks, Slide pick important At I'll and and always has important shareholders social Eifion. back us, as it's on know our that governance, to ESG, XX. well. we up been environmental, to

map. safe new making pride energy to as We road our focus we to and focus our as a culture. the strong product development sustainable throughout on a ourselves inclusive products company well workplace, consumption continue of our operations We on key diverse, strive promote and

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XXXX continued Meeting subject Board report approval month. to side We Directors of Independent Ward the Stockholders to governance the as with stockholder Annual are also Ed of next at to Director on progress of the the pleased nomination

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have of the the secular raised which is are Strong very the backyard positive of the trends centerpiece. health industry. pool for appreciation pool the long-term the about We significantly

levels we see aftermarket construction healthy activity. only not addition, supports In but that favorable of stronger data economic even new

has of with in our of tracking rising such opportunity While focused trends and trend upgrade, and incorporated the XXXX. I'll mix. And developments, outlook presents, repair XXXX sales closely on elevated XXXX year installed we of products this Growth up business historical are a the continues new was macroeconomic products, XX% as interest expect inflation, growth our sales other key of we expand. as Slide Omni below aftermarket onto geopolitical finally, well We up remains made growth. but remain rates to as the replace median discuss wrap along core healthy to aging and full made up XX% and source lifestyle construction an which on our total XX levels. base pool SmartPad outpaced in continue for fiscal

affirm and XXXX. trading to less and comprised to year sales first partially X% the off the good are to of XX% are to offset volume range of growth guidance year, XX% supply second the some broader combined of half This and for one We in pleased to inflationary net to FX the Despite strong performance during and compared our macroeconomic pressures, price uncertainty in growth of day a is including we start by XX% in sales chain in range profitability quarter. with ongoing the XXXX. a

range adjusted $XXX in to XXXX, year-over-year. to million of growth for be the to We representing EBITDA million also $XXX expect XX% of X%

IoT trends, the of pool aging the towards positive pools. health stock, outdoor on living SmartPad market, ongoing longer-term increased the demographic we As and focus and I the at space, conversion look see

we tied environment pool evolving, of home runway new particularly aging growth. construction growth markets. the current existing price visible the the year-round provides and an are the X With demographics over base, the years entering macro housing market, XX% sales last dynamics While approximately appreciation see a to in of new in of

products, environmentally we In ability our Finally, growth Smarts their the to and to for expand pool about develop Omni operator, and to and in sustainable driving open opportunities further strengthens opportunity Hayward's XXXX come. pad to to summary, the within With to advanced to now line in aftermarket. the achievements our technologically the owners that, market confident pool position be upgrade ready the continue upon existing years questions. we're

[Operator Instructions].

Our KeyBanc Jeff is from first question Hammond Markets. of Capital

on just to kind I just about So thinking know to the the I to you wanted guidance, surcharges, the if those because X% Just topic, I you're And just and change have didn't stick? those have in? on price there. you're including update that. clarify how is that thought don't on increases that like an think of

we lists. question, say into pressures stay the but price Yes, as more that need have likelihood yet when Haven't I part Jeff, in the basis, the doing longer The we'll we are it the structural greater that the these -- We would upon them. inflationary them, -- place of roll are on the the abating. they inflationary the not a the pressures month-to-month for transitory implemented is longer second done based for still that. that were surcharges we hoped

In fact, had prior through more contemplated. increases inflationary we QX felt price necessarily pressure than

Jeff. Yes,

Kevin not guidance year it of of of those balance month-to-month. is again, But consider of the just parts question, surcharge. In does inclusion mentioned, as evaluated no, terms your the the

Okay.

the volume mean, more So and, there's there. I the what I the Is probably guess, are within guess of pieces? start you're the view moving in that the Or your the offset assumptions lowering with pricing -- strong guide? year I

of year. and single-digit in in looking thought high dollar. we the the year-on-year dollar terms originally But FX so year. of still balance guide, than into other we're mean, coming than Australian headwind, for euro growth for price the a currencies, a headwind more I is the FX the a Certainly, Sure. certainly is of more against the the Canadian

we digits, still year. bit of we're volume, that, It and year. to growth looking a start for of lower balance balance the the for for terms is, the little the the volume good as it's full mentioned the mid-single of previously, than a year, in year good given In the

just if And one then sneak could I Okay. in.

supply Just better worse, dynamics? of freight chain any change, or in

our we complex We because into a know. some some around We in lots were -- sanitization were other in port the we as to improvement would quarter of components material into seeing as metals as They flow parts, some pressure really even specialty it's go say components. but and levels, and China, congestions product into dynamics. that pumps. be were material continue improvement critical to flow nice quarantines have progressed shutdowns, there's go elevated of turned Shanghai and certainly moving at question variable some speed QX, I the some in seeing and the the say some our that I'd you pricing the even increased on ports

month-to-month So in like I'd second feels better we we're a week-to-week like right last process say of half this Jeff. or than it's were it now, overall, year. incrementally a feels But

from question Wertheimer Research. next is from Rob Our Melius

So we don't in maybe back. can the next Rob try why come line, one

Our is of Ryan next question William Merkel Blair. from

little just order I surprised the are signs a high guess off, cancellations consumer you any was slowing bottom in spending down raise guidance here. file? end the didn't of seeing any I First or you level, of

close of seen plenty on both gotten of We in has the much kind We're XXXX. generation price despite the channel partners dealers, both in any And position channel contact pretty into lead work books a inventory of start We're going the in the remain the season strong haven't with and our better and obviously, really increases. cancellations. new position better. and

still is seems be and strong and seeing still going to on be pressure to in order we're backyard. product is and installed tested, file books the demand no, So very robust the the

the so And are my gross a on hear. see still inflation margin. quarter? second in running is to is margin great you mentioned, second sounds It That's like going it. then you year-over-year expansion gross question Got little as bit to hotter

we've fixed we accumulating before, that. mentioned would Those price them X Yes, as of beginning Ryan, much certain at coming price We XX% mean, arrangements. concessions into expect our make some with actions, We up over pricing did year. off I QX. roll pretty the of Eifion. the -- to on it's

we get will contribution in QX a price that did margin QX, higher accretive. in we and be So should than

it on. Pass Perfect.

from Goldman is Sachs. Lee question Brian from next Our

revenue Maybe to I back first prior to midpoint up just reading But I follow up guidance and implies and the that. incorporating rest one, year in Gross flatlined EBITDA pricing the question. or the midpoint margins XQ, it I of out, understand guidance into, guess, bps the to for of strong all actions start QX, in kind XX year. if to XXX of margins down of to the the EBITDA the

below else just later on margin is the Or not out reading half year? So see margin the into EBITDA? per happening into some metrics that second the is expansion gross you're better line we EBITDA something where something se

year more in something of year. we out for start to very and then started the we indication a into and And of year. it the Yes. a a the than remain as in end everything But view the with year is to about I'd the QX. remain the deal this drivers where strong, new more get of and remain start QX get would a on say it's rest strength complete the macroeconomic the the say half Kevin want bit say season strong. we strength is the underlying Europe growth every we industry maybe trends policies both I pointing have had last QX in world, margin very mentioned, to we're higher U.S. to bit the the the Good second difficult and It's that strong, cautious what is with. the in see year, particular is mean, Secular and great And full of year. as is question. we'll to 'XX to pleased strong. and Hayward. I the climate, 'XX We than fair and

a really reflects the of just may our how on terms it in half cautionary So develop. guidance, second view

the As continued a the we update a in of where I second is half, is on of out implementation little year-on-year terms the in it as the the of line feel margin QX. the high the at, given EBITDA good does of you FX we price about growth said view still surcharge. single-digit But before, headwind. guys climate. of in structural But current we're and bit before caution represent come we'll

showing the in think, environment past, pressure trends. in commentary this some any builder the makes That Maybe with And then any pass in maybe those. missed this, on. home I'll sense. seeing might up of going speak hopped I high-level from have of sort and seeing late, more shifts you've just quantified builder trends? yes. lot Just kind pool additional to And Okay, of you can rates one a of new are and mortgage around backlog it on you're where question you me but I up part I the market?

is in recent had builders a into for in report we're interesting published XXXX. I'd XXXX. Most lot say data of between what statistics the time increased has a hearing starts, job until are that A on is increase ground, this shovel quoting one really the homeowner still strong And signing. out PK book really put but focused the was by appreciably. it, that I a in

have the and wind maybe kind the of of we any there, But we've most that is that at have. If the is grown the standpoint. I'll upon said, into back we're a moment and feel labor this remodels the now. contractors lot labor, world industry's still interest confident our been new a we kind Brian, the of slowing demand I and this, industry over factor really control a right dealing XX-plus to say last is each that as the last things construction up what we're focused of That very new which construction years pressures of and a pushed the just interest others in some construction, years. labor the of percent is the still there's new construction. there in pivot for constraint based that rates that, they right of and The And there hearing, there. on and industry really is think with. still been but of has that out in weather from couple -- still touched on not is inflationary have on X of new speaks feel full-scale saying feeling that to least pent have certainly,

start the in Approximately for to I is fuels strong than our there's aftermarket and to to aftermarket success slowing that's if industry's the that our the So But continue for construction. new industry a XX% look new more ones think offset determine going driven, potential down. success frankly, we growth.

it. Absolutely. Yes. Appreciate

Our Research. next Rob Wertheimer Melius is from question from

the about My earlier. fault. Sorry confusion

on about us on the end, steady? So any of to to or of not think your are higher cetera. but that's a to you couple new back There's thoughts I don't of you a home XX% it. kind posts just you've guide a consternation or to maybe What if haven't obviously seen for Any consumers historically sensitivity? sensitivity the go the out lot on rising rates, times, Kevin, there what wanted just that's touched you I this that mentioned, business. interest and et refis of core equity of have loans build, more about that know business

already seeing that the add the aftermarket existing in Yes, decision sustainability someone we're or has looking that for piece equipment to -- I pull-through who functionality on or on didn't that's or a maybe a of for greater in a different really -- is enjoyment would backyard an piece exist to it's say what do upgrade pool that backyard. the

even comfortable continue that or pad rates necessarily, environment very of full in piece a and increased be driving circumstances. the feel circumstances with pieces again, economic XXXX couple installed here beyond XX%, of we that's incremental not that a in different inflationary interest that, despite or that So new to will and

validated there our how Hayward network remodelers and and that's That's some out it. certainly look the Totally that So we service, at in our rebuilders being even of by network. are

now 'XX. as Yes. right continued Kevin I'll seeing that, to is, permitting into mean, we're Rob. new I mentioned what add construction earlier, just

-- it discretionary decisions, when But of talk about see We it's a comes of it's backlogs. the for majority aftermarket, the not to builders non a continue it's not the decision. type to strong a --

maintain pool. to pool or have building qualitative attribute, that of cost the terms the energy-efficient products products in which your we're today market You the of have the pool a your enjoyment we're to most of saving a And your to bringing. increases

what and and as market, when large it's of the in seeing about in all at we controls, categories. X gaining would those place stories And we're at in is So in product where industry, higher efficiency those and is which it's we conversion those look taking categories, margin there's come and price energy we've think, sanitization, higher points Hayward the qualitative for strength energy-saving before, attachment. talked Hayward

the believe new environment. rate So we the believe to We construction, from don't that aftermarket will interest don't going even is suffer. in suffer it

Our Mike next from question is from Halloran Baird.

be a leverage, quarter your willingness to buyback to but -- guys the trying in plus the So position you point? just do I $XXX how said term. in think about liquidity, know to guys you thinking transaction do would the million the balance If about comes gauge right put that sheet you at Obviously, X%. be first guys over work you balance to of usage actual? along, this in minus how short

are, Mike. absolutely We

side. pretty to in organically. actively on We X continues be deployment pipeline have to so continuing our top now, our legs of one a That strategy, priority. That's robust fund capital we're engaged right the M&A

the some well. the early QX some also as use the then of involved for mentioned, use projects cash some share QX with And of have we then we've here We on you there. been with directed and in repurchase books both repurchase that -- as

balance close usage. of all paying to attention X avenues sheet really we're So

and looking maybe how your how and terms to expect work on is and would about just thinking your build just sense channel year? in the then they what they some guys the as inventory view the your about you are how like or of channel build inventory talk And can And expectations to obviously, at hear are on restocking, get of markets not some partners channel chatter public for side, their through inventory inventory? we partners of

balance. It's some perfect then year. they support that with inventory I all in so over pumps, do keep years. overall obviously, to it's solve and categories feel of We material but few it. it controls, sand industry grown, needs that a think tabs based than product and over said, upon in the share the look sale. season channel the Hayward, sure mind the some a end few largely starting would for Hayward of. variable that in to channel. the product our period. need there But embedded a been positions the we it's they than XXXX gains, things we with the sale, improved require amount either of specifically value filters, In are higher And point XXXX price in QX staged last There lot at a there the as keep there has close then on days that the also make Maybe a dollars, some to not incremental of which were absolute speed better much XX-plus be inventory in on has from has to standpoint, to years. at to some more it and as I are SKUs growth, we more X position in for partners much the comfortable are closer prior availability additional that from They of our Yes. percent of replenished need inventory a industry some -- The last hand inventory same of

the inventory hand position from at comfortable here we So of standpoint on feel the a our all said, days season. start with that

close into than Mike. start will into And that guidance keep are that the the with assumes guidance to continue sell sell our Our we're greater XXXX tabs out the -- the and during updates season. there channel as going through and XXXX, out look year these things work be we on

Great.

Nigel next Wolfe. Our is of question Coe from

margins? again us Eifion, give seasonality? year, the be in normal terms sort environment, a just quick normal in normal could revenues maybe would of about the but in a correct, dedication weakest of current typically So your you and quarter, I nothing XQ mean, there's

Yes.

perspective. into was Our levels, more year previous than we do see the through certainly, fact of and the QX mentioned sales, QX through slightly then is the backlog. in year We full from as has working XX% that we some to coming seasonal that's was but the and in I XX% similar the a and QX still experienced at call. still to than elevated. year. seasonality have really higher we would and to work make a QX that year, a into this normal 'XX, were seasonality continue QX want normally being QX would higher we to quarter channel stocked We consequential say, And reappearing think normal large sure the appropriately

specific level weaker little is after Kevin than It full normal. very across do, needed We SKUs out we the And period. the have build customer production our QX were very, mentioned. as normally, a to more year the get to those after ability a to complement manufacturing pleased of some footprint bit this the to channel to with satisfy what was yes, orders. higher Still products. at get But

Yes.

given I -- than be on that normal higher Okay. then today, QX I would so you what on based see expect you than -- normal see reappearing, be And of you mean, seasonality sort based QX as based higher what QX with Eifion. to mean, QX? today

Yes.

around guidance us the as each higher the period to would say requirements season. we for is specific likely service to is quarter, giving the out QX I to fill channel be continue for not we're but a So what

Is rising? the think Is consumer And half then would supply got conservative your biggest you've the right in second year, inflation? you concern rates guide. very -- help concern is really availability? is is your when obviously, half about of back it what chain I assumption a right now? Is the it your What say labor now, with mean, it you it biggest Kevin?

middle mean, get that year. We trained I able through think standpoint. a too are -- to our key availability building feel I actually up from that was a folks Yes. from all I much and feeling, labor There's we the still labor we're focus but where product. pretty last think turnover good standpoint, of companies

I cautionary the of think movement and second in we manufacturing-concentrated we're with it's quarantines the to right of into wise happening product some look what global as half. seeing I of think around the now regions, that are some be

of industry, interest that rate ourselves through just there's second for incredibly While being are the to a wise now. out be -- lot And is us of I season a consumer optimism books from and there's are demand hikes still work hikes just we so of part getting and gives strong the early here about what's strong think on an when talked as and as this point, unknowns us half company being before at the right it's ahead many Nigel. the cautious that

continuing? of then and Maybe I to dealer just North sort -- The extraordinary is rates degree your and Are an adding also have that dealers, of what convert could adds North to to Great, last just are in number in about can. you America? conversions one year, if they talk more from America. you dealer you managing still growth

Yes.

in marketplace. to that share it's we've see Hayward to a of the and backyard. the doing size continue some -- great just continuing more to has for years. of some story expansions, job the growth the to the fully some contributed of expand our contributors obviously, share last and is of thirdly, on marketplace our new some When of team that brand then continue That expect display products the marketing the Hayward have the brought of I we've sell and to gains about confidence the placing into into the And enjoy the couple adoption that absolutely think Hayward We delivered and that family few backyard. market gains greater think capacity in been sales the to in product new great and years, it X the early their launches future. able of the have working really Operationally, last I the we advocating of -- in folks than one over us and

too a of it's us the years, into we expect Nigel, all dividends think paid last and over of that's for combination the really I those, X So future. that few

Jadrosich Our America. next Bank Rafe from is from of question

the stays longer few I'm expect First, you as market supply to you then could improves, last taking been I be you've wondering you about kind term? quarters. would it market chain how sure over sticky? of share And kind that, that of looks wanted those to like gains -- make conversion share if some talk the do

We're experience terms of sales pool. categories, statement, balance the quite We're a of lines efficiency within product proud the the results. necessary very our Yes, we on introducing time capabilities. addressing back needs cap energy very are grown consumer sticky. And products both product over And for costs these a are It products into XX% really We're into share has that our we're informative our production now to flowing also ability the index qualitative not We're new clear those sheet. in bit the as both predicated of in new percentage investing vitality products it's quite of income gains substantially spending the the in the with through firmly to and just and year-over-year. those the development of that capability. our but believe well out into comes investing of overall the research in build service in marketplace. terms engineering terms that fact of are to of market the the the market coming of us terms

back So terms we core gaining the believe outpaced though what industry. our that we're categories platform now ability we really the are to that in in in we showed has leveraging comes where it some share supply to technology competition, of

upon So yes, we that heavily have. the sticky, firmly, it's product and we predicated it is portfolio believe

the growth? terms that? of channel of last on what's the your then the really great. compared inventory component quite commented sales growth units, curious, to inventories, growth inflation That's a you sort -- were -- than just or helpful. bit inventory sales in Like few like XX% has quarters. if question, that second been I'm at Okay, to own but rate faster dollar of look we And your what's growing just by

Yes.

COGS about think index, about period it's comparable year, XX%. QX you when the versus last the So in 'XX

certain to in get get in to can service of say position raw strategic have position -- an products a future, that from terms on through. inflation XX% secure where has position goods run get be in the have materials. areas, X then in finished again, our So And the materials. able that the that we've balance -- taken we those important Knowing we positions certain can finished strategic But a increase, to that's second is outside materials, goods of market. demand index the in is position. out to in be manufacturing One the we into curve particularly in the the inventory are really climb COGS the inflation, raw raw we to hard we taken of sheet. I'd And inventory where come taken we see that

helpful. very That's Great. Okay.

registered, There at conference [Operator are are so remarks. I'd for to the questions Holleran There no back to this no turn further questions like Kevin further any time. closing Instructions].

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

forward look you world. around for follow-up business growth employees see, to years and This and resilience call all would July partners the excellent on can is to producing well and you the XX. hard be continue generate our in team XXXX commencing the questions, to Thank and to very during positioned our our stakeholders ahead. not any contact Please week we work, our have and results you. without As of if you dedication earnings we're QX financial operational again and possible the talking

Holding the Haywards your Call. Thank Earnings First participation. for XXXX concludes Quarter you That

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