Q3 2025 Hayward Holdings Inc Earnings Call

Later, we will conduct a question and answer session. During the question and answer session. If you have a question. Please press Star then one on your Touchtone phone. Please note that this conference is being recorded I will now turn the call over to Kevin Masco, Vice President Investor Relations and S. P. N a Mr. <unk> you may begin.

Speaker #3: Welcome to Hayward Holdings, Inc. third quarter 2025 Earnings call . My name is Donna , and I will be your operator for today's call .

Operator: 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 one on your touchtone phone. Please note that this conference is being recorded. I will now turn the call over to Kevin Maczka, Vice President, Investor Relations and FP&A. Mr. Maczka, 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 Dot Hayward Dot com.

Speaker #3: At this time , all participants are in 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 .

There you can also find the earnings slide presentation referenced during this call.

Speaker #3: Then one on your touch tone phone . Please note that this conference is being recorded . I will now turn the call over to Kevin Maczka Vice President , Investor Relations and Fpna .

Joined today by Kevin Holleran, President and Chief Executive Officer, and IV, and 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 in 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 six.

Speaker #3: Mr. Masuka . You may begin .

Speaker #4: 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 Comm .

Kevin Maczka: 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 Holleran, President and Chief Executive Officer, and Eifion 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.

Speaker #4: There you can also find the earnings slide presentation referenced during this call. I'm joined today by Kevin Holleran, President and Chief Executive Officer, and Eifion Jones, Senior Vice President and Chief Financial Officer.

<unk> and exchange commission that could cause actual results to differ materially the.

The company does not undertake any duty to update such forward looking statements.

Speaker #4: 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 .

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.

Speaker #4: 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 .

All comparisons will be made on a year over year basis, unless otherwise indicated.

I will now turn the call over to Kevin Howard.

Speaker #4: 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 .

Thank you Kevin and good morning, everyone. It's my pleasure to welcome all of you to <unk> third quarter earnings call I'll begin on slide four of our earnings presentation with today's key messages I am 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.

Kevin Maczka: 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 Holleran.

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, and adjusted EBITDA increased 16%.

Speaker #4: All comparisons will be made on a year over year basis , unless otherwise indicated . I will now turn the call over to Kevin Holleran .

Speaker #4: Thank you .

Speaker #5: 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 .

Kevin Holleran: Thank you, Kevin. 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, and adjusted EBITDA increased 16%. We delivered further solid margin expansion driven by increased operational efficiencies and 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%.

We delivered further solid margin expansion driven by increased operational efficiencies tariff mitigation actions and disciplined cost management.

Speaker #5: 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 .

Gross profit margin increased 150 basis points to 51, 2% and adjusted EBITDA margin increased 170 basis points to 24, 2% cash.

Speaker #5: Net sales increased 7% with growth across both our North America and Europe and rest of world segments , and adjusted EBITDA increased 16% .

Cash flow generation was also strong enabling us to further strengthen the balance sheet and reduce net leverage to one eight 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.

Speaker #5: 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% .

During the quarter, we continued advancing key strategic initiatives that 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.

Speaker #5: 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 .

Kevin Holleran: 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.

Tariff mitigation action plans to support margins and deliver on our commitments to shareholders and customers. We have made great progress and I am confident in our team's ability to navigate this dynamic environment.

Speaker #5: 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 .

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 four to five 5% compared to our prior guidance of two 5%. We now expect adjusted EBITDA to <unk>.

Speaker #5: This included expanding our customer relationships , developing innovative new products to further our technology leadership position , and leveraging our operational excellence capabilities .

Speaker #5: 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.

Kris 5% to 7% to a range of $292 million to $297 million compared to our prior guidance of $280 million to $290 million.

Speaker #5: 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 .

Turning now to slide five highlighting the results for the third quarter net sales increased 7% to $244 million driven by a 5% increase in net price and a 2% increase in volume.

Speaker #5: 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 .

Kevin Holleran: 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 million to $297 million compared to our prior guidance of $280 million 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%.

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.

Speaker #5: Turning now to slide five , highlighting the results of the third quarter . Net sales increased 7% to 244 million , driven by a 5% increase in net price and a 2% increase in volume .

Speaker #5: 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 diluted earnings per share increased 27% to 14.

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.

Speaker #5: 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 .

Kevin Holleran: 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 $0.14. Turning now to slide 6 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.

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.

Speaker #5: Finally , adjusted diluted earnings per share increased 27% to $0.14 . Turning now to slide six . For a business update . Starting with the demand environment , we are encouraged by recent trends .

Speaker #5: We had a solid finish to the 2025 pool season as our primary US channel partners communicated improved out the door sales growth rates for Hayward products in the third quarter , with stronger growth as the quarter progressed .

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 feature and to reduce cost as evidenced by the average value per pool pad continues to increase as a result, we saw a double digit growth in this critical.

Speaker #5: 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 .

<unk> 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 increase.

Speaker #5: 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.

Speaker #5: Homeowners are adding technology to improve the pool ambiance and experience , rather than trying to reduce costs , as evidenced by the average value per pool pad continues to increase .

Kevin Holleran: Homeowners are adding technology to improve the pool ambiance and experience rather than defeaturing to reduce cost as evidenced by the average value per pool pad continues to increase as a result. We saw 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.

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 <unk>.

Speaker #5: As a result , we saw double digit growth in this critical product category of omni controls during the quarter , nearly twice the overall growth rate .

Speaker #5: The early buy programs are nearing completion in North America and international markets, and we are pleased with the progress to date.

<unk> and we continue to expect positive net price realization of mid single digits. In 2025, we are progressing with our value based pricing and SKU rationalization initiatives to optimize our price structure and enable our products to be priced appropriately relative to the exceptional value provided to pool owners.

Speaker #5: Incoming orders are trending in line with expectations . We anticipate solid customer participation and increased orders relative to the 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 .

We expect these initiatives to yield further positive results going forward.

Speaker #5: 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 .

The environment remains uncertain our team is aggressively executing our mitigation action plans to offset the increased cost and we're making great progress as previously communicated we are accelerating our lean initiatives and significantly reducing our exposure lowering direct sourcing from China into the U S as a percentage of.

Kevin Holleran: 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 SKU 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 cost, 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 U.S. as a percentage of cost of goods sold from approximately 10% to 3% by year end.

Speaker #5: We are progressing with our prior value based pricing and skew rationalization initiatives to optimize our price structure and enable our products to be priced appropriately relative to .

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.

Speaker #5: The exceptional value provided to pool owners . We expect these initiatives to yield further positive results going forward . The tariff environment remains uncertain .

Speaker #5: Our team is aggressively executing our mitigation action plans to offset the increased cost , and we are making great progress . As previously communicated , we are accelerating our lean initiatives and significantly reducing our exposure , lowering direct from China into the U.S.

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 omni X and industry <unk> automation platform, providing a cost effective way to accelerate technology adoption in the installed base and increase.

Speaker #5: 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 .

Kevin Holleran: 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 Omni X, 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.

Average equipment content per pool pad, while early in the rollout. We are pleased with the continued dealer response to the new omni <unk> enabled variable speed pumps, and we will launch other product categories with embedded omni X 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 underpenetrated 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 paced conference to edge.

Kevin Holleran: While early in the rollout, we are pleased with the continued dealer response to the new Omni X enabled variable speed pump, and we will launch other product categories with embedded Omni X 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 underpenetrated 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. In the third quarter, we hosted our 25th PACE Conference to educate and inspire our industry's most accomplished pool professionals.

Kate 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 enhanced.

<unk> to our training programs.

Kevin Holleran: 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 Eifion to discuss our financial results in more detail.

<unk> has a long standing commitment to continuous improvement throughout the entire organization and this is a great example of an early success and customer experience with that I'd like to turn the call over to Ian to discuss our financial results in more detail.

Thank you Kevin and good morning, I'll start on slide seven as Kevin stated, we are very pleased with our third quarter financial performance net sales increased 7% and exceeded expectations. We delivered strong growth in adjusted EBITDA margin expansion to 51% and 24% respectively and further reduce.

Net leverage to one eight times looking at the results in more detail at the net sales increase of 7% to $244 million was driven by 5% positive net price realization and 2% higher volumes gross profit in the third quarter increased 11% to $125 million.

Eifion Jones: Thank you, Kevin, and good morning. I'll start on Slide 7. As Kevin stated, we are very pleased with our third quarter financial performance. Net sales increased 7% and exceeded expectations. We delivered strong gross and adjusted EBITDA margin expansion to 51% and 24% respectively, and further reduced net leverage to 1.8 times. Looking at the results in more detail, the net sales increase of 7% to $244 million was driven by 5% positive net price realization and 2% higher volumes. Gross profit in the third quarter increased 11% to $125 million. Gross profit margin increased 150 basis points to 51.2%. By segment, gross margin increased 50 basis points in North America, with Europe and Rest of World increasing 750 basis points year over year and 300 basis points sequentially.

Gross profit margin increased 150 basis points to 51, 2% by segment gross margin increased 50 basis points in North America, with Europe, and rest of world, increasing 750 basis points year over year, and 300 basis points sequentially adjusted EBITDA increased <unk>.

16% to $59 million in the third quarter and adjusted EBITDA margin increased 170 basis points to 24, 2%. We are delivering this level of margin expansion, while strategically reinvesting in the business to drive future growth with targeted initiatives in sales and marketing advanced engine.

Narrowing and customer service, our effective tax rate was approximately 23% in the third quarter and 24% year to date adjusted diluted EPS increased 27% to 14.

Eifion Jones: Adjusted EBITDA increased 16% to $59 million in the third quarter, and adjusted EBITDA margin increased 170 basis points to 24.2%. We are delivering this level of margin expansion while strategically reinvesting in the business to drive future growth with targeted initiatives in sales and marketing, advanced engineering, and customer service. Our effective tax rate was approximately 23% in the third quarter and 24% year to date. Adjusted diluted EPS increased 27% to $0.14. Turning to Slide 8 for a review of our reportable segment results. For the third quarter, North American net sales increased 7% to $208 million, net price realization increased 7%, and volume was stable. Net sales increased in the U.S. and 21% in Canada. As previously mentioned, we are encouraged by the recent demand trends for Hayward products, and demand as reported by our primary U.S.

Turning to slide eight for a review of our reportable segment results for the third quarter.

North American net sales increased 7% to $208 million net price realization increased 7% and volume was stable net sales increased 6% in the U S and 21% in Canada. As previously mentioned, we are encouraged by the recent demand trends for HAE with products and demand as reported.

With our increased 16% to 59 million in the third quarter and adjusted ibida. Margin increased, 170, basis points to 24.2%. We are delivering this level of margin expansion while strategically reinvesting, in the business to drive future growth with targeted initiatives, in sales and marketing, Advanced engineering and customer service. Our effective tax rate was approximately 23% in the third quarter and 24%.

Our primary U S channel partners increased late in the season, resulting in a solid third quarter performance.

The performance in Canada also continues to improve as we saw strong order growth during the quarter gross profit margin increased 50 basis points to a robust 52, 8% and adjusted segment income margin was 29, 6%.

Year-to-date adjusted diluted EPS increased 27% to $0.14. Turning to slide 8 for a review of our reportable segment results for the third quarter.

Turning to Europe, and rest of World net sales for the quarter increased 11% to $36 million, a 1% reduction in net price realization was more than offset by 8% higher volume and 3% of favorable foreign currency translation. The reduction in that price was largely due to an increased mix of disk.

Eifion Jones: channel partners increased late in the season, resulting in a solid third quarter performance. The performance in Canada also continues to improve as we saw strong order growth during the quarter. Gross profit margin increased 50 basis points to a robust 52.8%, and adjusted segment income margin was 29.6%. Turning to Europe and Rest of World, net sales for the quarter increased 11% to $36 million. A 1% reduction in net price realization was more than offset by 8% higher volume and 3% favorable foreign currency translation. The reduction in net price was largely due to an increased mix of discounted early buy shipments relative to the prior year period. Net sales increased 15% in Europe and 6% in Rest of World. We took steps in recent quarters to improve the performance in Europe and Rest of World and are pleased to see continued margin progression in the quarter.

North American, net sales, increased 7% to 208 million. Net price, realization increased 7% and volume was stable. Net sales. Increased 6% in the US and 21% in Canada. As previously mentioned, we are encouraged by the recent demand trends for Haywood products. And demand is reported by our primary us Channel Partners increased late in the season. Resulting in a solid third quarter performance.

Counted early buy shipments relative to the prior year period net sales increased 15% in Europe and 6% in rest of World. We took steps in recent quarters to improve the performance in Europe and rest of World and are pleased to see continued margin progression in the quarter gross profit margin increased 750 basis points to <unk>.

The performance in Canada also continues to improve as we saw strong order growth during the quarter. Gross profit margin increased, 50 basis points to a robust 52.8% and adjusted segment. Income margin was 29.6%.

41, 9% and increased 300 basis points sequentially from 38, 9% in the second quarter. The sequential increase was primarily related to the timing of accumulative tariff refund during the third quarter.

Turning to Europe and the rest of the world, net sales for the quarter increased 11% to $36 million, with a 1% reduction in net price. This realization was more than offset by 8% higher volume and 3% favorable foreign currency translation.

Adjusted segment income margins increased to 18, 5% from eight 4% a year ago, turning to slide nine for a review of our balance sheet and cash flow highlights. We are pleased with the quality of our balance sheet and the significant reduction in net leverage during the quarter and over the last two years net debt to <unk>.

Eifion Jones: Gross profit margin increased 750 basis points to 41.9% and increased 300 basis points sequentially from 38.9% in the second quarter. This sequential increase was primarily related to the timing of a cumulative tariff refund during the third quarter. Adjusted segment income margins increased to 18.5% from 8.4% a year ago. Turning to Slide 9 for a review of our balance sheet and cash flow highlights. We are pleased with the quality of our balance sheet and the significant reduction in net leverage during the quarter and over the last two years. Net debt to adjusted EBITDA improved to 1.8 times compared to 2.1 times at the end of the second quarter and 2.8 times in the year ago period. Reduced leverage provides additional flexibility as we execute our strategic growth plans.

Rested EBITDA improved to one eight times compared to two one times at the end of the second quarter and two eight times in the year ago period reduced leverage provides additional flexibility as we execute our strategic growth plans total liquidity at the end of the third quarter was 552 million.

The reduction in that price was largely due to an increased mix of discounted early by shipments relative to the prior year period, net sales, increased 15% in Europe, and 6% in rest of world. We took steps in recent quarters to improve the performance in Europe and rest of the world and are pleased to see continued margin progression in the quarter. Gross profit margin increased, 750 basis points to 41.9% and increased 300 basis points sequentially from 38.9%. In the second quarter, this sequential increase was primarily related to the timing of a cumulative. Tariff. Refund, during the third quarter,

Including $448 million in cash and cash equivalents short term investments and availability under our credit facilities of $104 million.

We have no near term maturities on our debt the term debt and the Undrawn ABL mature in 'twenty 'twenty eight borrowing rate benefits from $600 million in debt currently tied to fixed interest rate swap agreements, but sharing in 2026 through 2028, limiting our cash interest rate of seven facilities.

Eifion Jones: Total liquidity at the end of the third quarter was $552 million including $448 million in cash and cash equivalents, short term investments and availability under our credit facilities of $104 million. We have no near term maturities on our debt. As the term debt and the undrawn ABL mature in 2028, our borrowing rate benefits from $600 million in debt currently tied to fixed interest rate swap agreements maturing in 2026 through 2028, limiting our cash interest rate and our term facilities to 6% in the quarter. Our average interest rate earned on global cash deposits for the quarter was 4.3%. Our business has strong and seasonal free cash flow generation characteristics driven by high quality earnings. The company typically has strong cash generation in second and third quarters while using cash in the first and fourth quarters.

6% in the quarter, our average interest rates earned on global cash deposits for the quarter was four 3%.

Business has strong and seasonal free cash flow generation characteristics driven by high quality earnings. The company typically has strong cash generation in the second and third quarters, while using cash in the first and fourth quarters year to date cash flow from operations was $283 million.

Over the past two years, we adjusted to the challenges that improved our leverage to 1.8 times, compared to 2.1 times at the end of the second quarter and 2.8 times in the year-ago period. This reduced leverage provides additional flexibility as we execute our strategic growth plans. Total liquidity at the end of the third quarter was $552 million, including $448 million in cash and cash equivalents, short-term investments, and availability under our credit facilities of $104 million.

That's a $276 million in the year ago period.

Capex of $21 million year to date was modestly higher than the prior year period, reflecting strategic growth investments and project timing. Consequently at year to date free cash flow was $262 million.

We have no near-term maturities on our debt, as the term debt, and the undrawn abl mature in 2028 a borrowing rate benefits from 600 million in debt. Currently, tied to fixed interest rate swap agreements. Maturing in 2026 through 2028 limiting, our cash interest rate and our term facilities to 6% in the quarter. Our average interest rate earned on global cash deposits. For the quarter was 4.3%,

Given our outlook, we increased free cash flow guidance, the full year by $20 million from approximately $150 million to approximately $170 million. This increase reflects improved profitability Capex project timing and working capital management.

Eifion Jones: Year to date cash flow from operations was $283 million compared to $276 million in the year ago period. CapEx of $21 million year to date was modestly higher than the prior year period reflecting strategic growth, investments and project timing. Consequently, year to date free cash flow was $262 million. Given our outlook, we increased free cash flow guidance for the full year by $20 million from approximately $150 million to approximately $170 million. This increase reflects improved profitability, CapEx project timing and working capital management. Turning now to capital allocation on Slide 10, we maintain a disciplined balanced approach to capital allocation, emphasizing strategic growth investments and manufacturing asset investments for tariff mitigation, maximizing long-term shareholder returns while maintaining prudent financial leverage. We continue to pursue additional acquisition opportunities in residential pool, commercial pool, and flow control to augment our organic growth plans.

Turning now to capital allocation on slide 10, we maintain a disciplined and balanced approach to capital allocation emphasizing strategic growth investments in manufacturing asset investments for tariff mitigation maximizing long term shareholder returns, while maintaining prudent financial leverage we continue to pursue.

Our business has strong and seasonal. Free cash flow generation characteristics, driven by high quality earnings. The company typically has strong cash generation in the second, and third quarters while using cash in the first and fourth quarters year. To-day cash flow from operations was 283 million compared to 276 million in the year ago. Period capex of 21 million year to date was modestly higher.

Than the prior period, reflecting strategic growth, Investments and project timing.

Consequently, a year-to-date free cash flow was $262 million.

Additional acquisition opportunities in residential pool commercial pool and flow control to augment our organic growth plans. In addition to potential share repurchases during the third quarter <unk> Board of directors authorized a repurchase of up to $450 million in shares over three years to replace a similar.

Expired authorization.

Turning now to slide 11 for the full year 2025 outlook, we are increasing our guidance for net sales and adjusted EBITDA for the fiscal year 2025, Haywood now expects net sales to increase approximately four to five 5%.

Eifion Jones: In addition to potential share repurchases during the third quarter, Hayward's Board of Directors authorized repurchase of up to $450 million in shares over three years to replace a similar expired authorization. Turning now to Slide 11 for the full year 2025 outlook, we are increasing our guidance for net sales and adjusted EBITDA for the fiscal year 2025. Hayward now expects net sales to increase approximately 4% to 5.5% or $1.095 to $1.110 billion, with adjusted EBITDA increasing approximately 5% to 7% or $292 to $297 million. We continue to expect solid execution across the organization, positive price realization, and continued product technology adoption. Relative to our prior guidance at the midpoints, this represents a $17.5 million increase in net sales and a $9.5 million increase in adjusted EBITDA. Our guidance does not contemplate potential new tariffs effective on or after October 29.

One zero 95 to 111.

<unk> billion dollars with adjusted EBITDA, increasing approximately 5% to 7% or $292 million to $297 million. We continue to expect solid execution across the organization positive price realization and continued product technology adoption.

Given our Outlook. We increased free cash flow, guidance for the full year by 20 million, from approximately 150 million to approximately 170 million. This increase reflects improved, profitability capex project timing and working Capital Management, turning now to Capital allocation on slide 10. We maintain a disciplined balanced approach to Capital allocation emphasizing strategic growth Investments and Manufacturing asset Investments for tariff. Mitigation maximizing long-term shareholder returns while maintaining prudent financial leverage. We continue to pursue additional acquisition opportunities in residential pool commercial pool and flow control to augment. Our organic growth plans, in addition to potential sharing purchases, during the third quarter Haywood's board of directors, authorized through purchase of up to 450 million in shares. Over 3 years to replace a similar expired, authorization.

Relative to our prior guidance at the midpoint. This represents 17 and a half million dollars increase in net sales and a $9 5 million increase in adjusted EBITDA.

Guidance does not contemplate potential new tariffs effective on or after October 29, if that does materialize, we will respond accordingly with further mitigation actions as a reminder, fourth quarter 2024, net sales benefited from incremental demand related to the two major hurricanes that impacted the southeast.

And United States.

We continue to expect solid cash flow in 2025 for the conversion of greater than 100% of net income we increased our free cash flow guidance of full year to approximately $170 million. We are confident in our ability to successfully execute in a dynamic environment remained very positive about the long term.

Eifion Jones: If that does materialize, we will respond accordingly with further mitigation actions. As a reminder, fourth quarter 2024 net sales benefited from incremental demand related to the two major hurricanes that impacted the southeastern United States. We continue to expect solid cash flow in 2025 with the conversion of greater than 100% of net income. We increased our free cash flow guidance for the full year to approximately $170 million. We are confident in our ability to successfully execute in a dynamic environment and remain very positive about the long-term growth outlook for the pool industry, particularly the strength of the aftermarket. With that, I'll now turn the call back to Kevin.

Turning now, to slide 11 for the full year. 2025 Outlook, we are increasing our guidance for net sales and adjusted Eva for the fiscal year 2025, he will now expect net sales to increase approximately 4 to 5 and a half percent or 1.095 to 1.11, 0 billion, dollars with adjusted e. But are increasing approximately 5 to 7% or 292 to 297 million. We continue to expect solid execution, across the organization positive price realization and continued product technology adoption relative to our prior guidance. At the midpoints of this represents 17 and a half million increase in net sales, and a 9, and a half million increase in adjusted. Evida our guidance does not contemplate potential, new tariffs effective on or after October 29th. If that does materialize, we will respond accordingly

Loan growth outlook for the pool industry, particularly the strength of the aftermarket with that I'll now turn the call back to Kevin Thanks Ivy.

With further mitigation actions.

Pick back up on slide 12, before we close let me reiterate how appreciative I am of the team's performance Hayward delivered another strong quarter exceeding expectations net sales increased 7% and margins continued to expand as we effectively counter measure the tariff headwinds we de levered the balance sheet to under two times.

As a reminder, fourth quarter 2024 net sales benefited from incremental demand related to the two major hurricanes that impacted the southeastern United States.

While investing in the business to drive future growth and we increased our guidance for full year net sales adjusted EBITDA and free cash flow as the macroeconomic and tariff environment continues to evolve. We are excited about the fundamentals that drive our business and confident in our ability to execute our growth strategies and Cree.

Kevin Holleran: Thanks, Ivan. I'll pick back up on slide 12. Before we close, let me reiterate how appreciative I am of the team's performance. Hayward delivered another strong quarter, exceeding expectations. Net sales increased 7% and margins continued to expand as we effectively countermeasure the tariff headwinds. We delevered the balance sheet to under two times while investing in the business to drive future growth. We increased our guidance for full year net sales, adjusted EBITDA, and free cash flow. As the macroeconomic and tariff environment continues to evolve, we are excited about the fundamentals that drive our business and confident in our ability to execute our growth strategies and create shareholder value. With that, we're now ready to open the line for questions.

Shareholder value and with that we're now ready to open the line for questions.

We continue to expect solid cash flow in 2025 with the conversion of greater than 100% of net income. We increase our free cash flow, guidance for the full year to approximately 170 million. We are confident in our ability to successfully execute in a dynamic environment and remain. Very positive about the long-term growth outlook for the pool industry, particularly the strength of the aftermarket, and with that, I'll now turn the call back to Kevin. Thanks Ivan. I'll pick back up on slide 12 before we close. Let me reiterate how appreciative I am of the team's performance, Heyward delivered, another strong quarter, exceeding expectations.

Thank you the floor is now open for questions. If you would like to ask a question. Please press star one on your telephone keypad at this time, a confirmation tone will indicate that your line is in the question queue. You May press star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up the handset before pressing the star keys.

Again that is star one to ask a question at this time, we do ask you. Please keep yourself to one question and one follow up.

Our first question today is coming from Ryan Merkel of William Blair. Please go ahead.

Operator: Thank you. The floor is now open for questions. If you would like to ask a question, please press Star one on your telephone keypad at this time. A confirmation tone will indicate that your line is in the question queue. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star key again. That is Star one to ask a question at this time. We do ask though that you please keep yourself to one question and one follow up. Our first question today is coming from Ryan Merkel of William Blair. Please go ahead.

Environment continues to evolve, we are excited about the fundamentals that drive our business and confident in our ability to execute our growth strategies and create shareholder value. And with that, we're now ready to open the line for questions.

Hey, everyone. Good morning, Thanks for the question and nice quarter.

Wanted to start off on <unk>.

And just talk about how the season progressed since July and then where did you see the upside in the third quarter.

Yes, good morning, Ryan.

As you know Q3 from a shipping standpoint for Hayward as one of our lower seasonal.

Our quarters, but it's an important one for the industry from a sales out standpoint.

[Analyst 1]: Hey everyone, good morning. Thanks for the question and nice quarter. Wanted to start off on demand. Just talk about how the season progressed since July, and then where did you see the upside in the third quarter?

Thank you. The floor is now open for questions. If you would like to ask a question, please press star 1 on your telephone keypad at this time. A confirmation tone will indicate that your line is in the question queue. You may press star 2. If you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset. Before pressing the star Keys again, that is star 1 to ask a question at this time. We do ask though that, you please keep yourself to 1 question and 1 follow-up. Our first question today is coming from Ryan. Merkel of William Blair. Please go ahead.

Hey everyone. Good morning. Thanks for the question and a nice quarter.

As you are in.

The heat of the summer and closing out the seasonal year.

By the end of September.

We felt really good about the sales out demand.

Kevin Maczka: Yeah, good morning, Ryan. As you know, Q3 from a ship in standpoint for Hayward is one of our lower seasonal quarters, but it's an important one for the industry from a sales out standpoint. As you know, you're in the heat of the summer and closing out the seasonal year. By the end of September we felt really good about the sales out demand as reported back to us or communicated by our largest channel partners. We saw progressively stronger sales out for Hayward product as the quarter progressed, really culminating with a really strong September. The other positive that comes with that sales out is it's really positioning channel inventory levels properly as we close out the season to then turn to early buy and what that demand signals for our factories and for the business.

Why don't you start off on demand? Just talk about how the season progressed since July and then where did you see the upside in the third quarter?

As reported back to us or communicated by our largest channel partners. We saw progressively stronger sales out for Hayward product as the quarter progressed really culminating with with a really strong.

September.

Other positive that comes with that is with that sells out is it's really positioning channel inventory levels properly as we close out the season. So then turned to early buy.

Yeah. Uh good morning Ryan. Um you know as you know Q3 from a ship in standpoint for Hayward you know is 1 of our lower seasonal. Uh um a quarters but it's an important 1 for the industry from a sales outstanding Point. As you know you're in the the the heat of the summer and closing out the the seasonal year.

And what that demand signals for our factories for the business I would say that that weather warm weather really did help extend the season, which is always welcomed.

By the industry and that certainly played out in many regions around the around the globe.

From a product standpoint in the quarter, we consent, we continued to see nice progression with the with the reception to <unk>.

But then as I said in the prepared remarks controls and lighting and even filtration had strong performance.

Kevin Maczka: I would say that weather, warm weather really did help extend the season, which is always welcomed by the industry and that certainly played out in many regions around the globe. From a product standpoint in the quarter, we continued to see nice progression with the reception to Omni X. As I said in the prepared remarks, controls and LED lighting and even filtration had strong performance in the quarter. Outside of the U.S. I'd really like to highlight Canada. Canada had a really strong quarter, up over 20% which is welcomed. We had a nice strong bounce back in all of 2024, particularly in the third quarter. We didn't have an easy comp here comparing off a plus 17% in prior year, making the 20% growth even more impressive up there. We did see a relatively wet spring and then responded with strong seasonal flow orders which was great.

In the quarter.

Outside of the U S I'd really like to highlight Canada, Canada had a really strong.

Quarter up over 20%.

Which as well we had a nice strong bounce back in all of 2024, particularly in the third quarter. So we didn't have an easy comp here.

You know, by the end of September, uh, we felt really good, uh, about the sails out demand, uh, as reported back to us or communicated by our a largest channel Partners. We saw progressively stronger sales out for Hayward product as the quarter progressed, really culminating with a with a really strong um September, you know, the other positive that comes with that is, what would that sells out is? It's really positioning Channel. Inventory levels, uh, properly, as we close out the season to then turn to early by, uh, and and, and what that demand, uh, signals for our factories. And for the business, I would say that that whether warm weather really did help extend the season which is always welcome uh by the industry. And that certainly played out in many regions uh around the around the globe, you know, from a from a product standpoint.

Uh, in the quarter, we consented we continued to see nice progression with the, uh, with the reception to Omni X.

Paring off of plus 17 are in prime.

Higher year, making the 20% growth even more.

Precip.

There we did see a relatively wet spring and then responded with strong seasonal flow orders.

Which was which was great and there is some easing around the macro out there, particularly around some improved or lower mortgage rates continuing on that on that theme of international Europe was up kind of low teens, which is also grace.

Um but then as I said in, in the prepared remarks controls and lighting, and even filtration, I had strong performance um in in the quarter. You know, outside of the the US I'd really like to to to highlight Canada uh Canada had a really strong uh quarter up over 20.

With some improved supply chain capabilities and because we've struggled a bit with some early buy shipments last year, we actually started to.

Percent, uh, which is welcomed. We had a nice strong, uh, bounce back in all of 2024, particularly in the third quarter. So we didn't have an easy comp here, uh, comparing off a plus 17, uh, in Prior year making the the 20% growth, uh, even more, uh, impressive.

Two ships some of the 2025 early buy in to the channel kind of late third quarter. This.

Kevin Maczka: There is some easing around the macro up there, particularly around some improved or lower mortgage rates. Continuing on that theme of international, Europe was up kind of low teens which is also great with some improved supply chain capabilities. Because we struggled a bit with some early buy shipments last year, we actually started to ship some of the 2025 early buy into the channel kind of late third quarter this year. Rest of world was up mid single digits, particularly Asia up over 20% and Australia was high single digits. This quarter in particular we really did see nice balanced growth across a wide array of our markets. Now our attention obviously turns to early buy as I mentioned in the prepared remarks, which is progressing nicely. It was a good quarter from a demand standpoint, a nice progression as the quarter played out.

This year.

Rest of World was up mid single digits, particularly Asia.

Over 20% in Australia was high single digits. So this quarter in particular, we really did see nice balanced growth.

Our cross across a wide array of our of our markets. So.

Now our attention obviously turns too early by as I mentioned in the prepared remarks, which is progressing nicely. So yes. It was a good quarter from a demand standpoint, a nice progression as the quarter played out.

Up there, we did see, uh, a relatively wet spring and then responded with, with strong seasonal flow orders, uh, which was which was great. And there is some easing around the macro up there particularly around some improved or or lower mortgage rates. You know, continuing on that on that theme of international Europe, uh, was up kind of low teens, uh, which is also great, um, with some improved supply chain capabilities, and because we struggled a bit with some early buy shipments last year, uh, we actually started to, uh, to to, uh, to ship some of the 2025 early by, uh, into the channel. Kind of late, third quarter, uh, this year, but the rest of world, you know, was up mid single digits. Uh, particularly Asia, uh,

That's great color. Thanks for all that on the early buy which is my second question you called it solid and it's tracking to expectations and how do we think about those comments relative to the market being flat and what was the reception to your 6% to 7% price increase that you announced.

Yes, it will.

As is customary with early buy there is there is a discount off of that announced price increase by participating in early buy to go along with extended payment terms. The whole program allows us to more level load.

Up over 20% and Australia uh was high single digits. So you know, this quarter in particular, we really did see nice balanced growth uh across across a wide array of our of our markets. So, you know, now our attention obviously turns to to early by, as I mentioned, in the prepared remarks, uh, which is progressing, uh, nicely. So yeah, it was a good quarter uh, from a demand standpoint and nice progression as the quarter played out.

[Analyst 1]: That's great color. Thanks for all that. Yes, on the early buy, which is my second question, you called it solid and it's tracking expectations. How do we think about those comments relative to the market being flat, and what was the reception to your 6 to 7% price increase that you announced?

Our factories and have the product on the shelf for when the new season.

Breaks here in 2026.

I'd say in general.

We don't we don't want to be passing.

Kevin Maczka: Yeah, as is customary with early buy, there is a discount off of that announced price increase by participating in early buy to go along with extended payment terms. The whole program allows us to more level load our factories and have the product on the shelf for when the new season breaks here in 2026. I would say in general, we don't want to be passing the magnitude of the price increases on, which has been multiple in a row here due to inflation and tariff headwinds. I would say that in general, the whole population has inflation fatigue and our industry is really no different there. As it pertains to the tariffs, which I'm sure we'll talk more about here, what we've passed along in the early spring, which took effect really in the May timeframe, was really dollar for dollar offset to the tariff impact.

About those comments relative to the market being flat and what was the reception to your 6% to 7% that you announced.

Yeah. Well

The the magnitude of the price increases on.

Which has been.

Multiple in a row here due to inflation and tariff headwinds I would say that.

In general I'd say, the whole population has inflation fatigue, and our industry is really no different there.

As it pertains to the to the tariffs, which I'm sure we'll talk more about here.

What we've passed along in the early spring, which took effect really in the May timeframe was really dollar for dollar offset to the tariffs impact and we took it upon ourselves internally through our tariff mitigation plans to claw back the structural margin from that so.

Mary was early by there is, there is a discount off of that announced price increase by participating, uh, in early by, to go along with extended, uh, payment terms. Um, the whole program allows us to More Level load our factories and have the product on the shelf for when the new season, uh, breaks here in 2026, you know, I would say in general, um, you know, we don't we don't want to be passing, uh the the magnitude of the price increase is uh, on.

I would say that.

We're we're as anxious as anyone.

To get back to more inflationary.

Times.

And to maybe put more certainty around what the tariff environment will look like.

The sooner that that happens for our industry the more welcome that will be.

Kevin Maczka: We took it upon ourselves internally through our tariff mitigation plans to claw back the structural margin from that. I would say that we're as anxious as anyone to get back to more inflationary times and to maybe put more certainty around what the tariff environment will look like. The sooner that happens for our industry, the more welcome that will be.

Alright, perfect I'll pass it on thanks.

Um, you know, which has been, you know, uh, multiple in a row here due to inflation and and tariff headwinds. I would say that, you know, in general, I'd say the whole population has inflation fatigue and and our industry is really no different there. You know, as it pertains to the to the tariffs, which I'm sure. We'll talk more about here. You know what? We've passed along. You know, in the early spring, which took effect, really in the May time frame was really dollar for dollar offset to the Tariff impact, and we took it upon ourselves internally through our tariff, mitigation plans to claw back.

Thank you. Our next question is coming from sorry.

<unk> of Jefferies. Please go ahead.

Hi, good morning.

The structural margin from that. So, um, you know, I would say that, uh, you know, we're we're as anxious as anyone.

Hey, guys.

Pricing commentary I think one of the key inhibitors recently talked about innovation and new products, making everything a little bit more palatable. Maybe you can talk about from your investments in new products and how much of your sales are coming from this and how is it helping.

To get back to more inflationary uh uh times and to maybe put more certainty around, what the Tariff environment will look like.

and uh the sooner that uh that happens for our industry, the more welcome that will be

[Analyst 1]: All right, perfect. I'll pass it on. Thanks.

Volume versus price.

All right, perfect. I'll pass it on, thanks.

Operator: Thank you. Our next question is coming from Saree Boroditsky of Jefferies. Please go ahead.

Yeah, so as we've spoken about in <unk>.

Prior calls we had some very targeted investments.

Thank you. Our next question, is coming from, sorry, for Aditi of Jeffrey's, please go ahead.

Kevin Maczka: Hi, good morning. Maybe just building on those pricing commentaries, I think one of the key distributors recently talked about innovation in new products is making the recent price increases a little bit more palatable. Maybe to talk about some of your investments in new products and how much your sales are coming from this and how is this helping volumes versus price. As we've spoken about in prior calls, we had some very targeted investments in SG&A and operating expense in 2025 and that really continued a more recent trend. One of those targeted areas is around engineering, new product development, advanced engineering with some new technology and innovation, trying to bring some new technology to our industry. We continue to work on that and that will continue to be an area of very targeted investment.

In SG&A and operating expense.

In 2025 and that really continued.

Our more recent trend one of those targeted areas is around engineering.

New product development advanced engineering, with some new technology and innovation trying to bring some new technology to our industry. We continue to work on that and that will continue to be an area of very targeted investment.

Hi, good morning um maybe just building on those pricing commentaries. I think 1 of the key Distributors recently talked about Innovation and new products is making the recent price increases a little bit more palatable. So maybe we should talk about some of your Investments and new products and how much your sales are coming from this. And how is this helping? Um, volumes first price?

I think technology matters.

And I think that innovation will ultimately dictate winners and losers in our industry like like most.

I mentioned.

The X.

We're really proud of what that whole ecosystem brings to the aftermarket.

Yeah. So, you know as we've spoken about in uh in in Prior calls we had some very targeted investments in sg&a and operating expense, um, in 2025 and that really continued. Uh uh, a more recent Trend 1 of those targeted areas is around engineering, um, new new product development Advanced engineering.

That's a that's an enormous opportunity for our industry to really start automating the more aged.

Kevin Maczka: I think technology matters and I think that innovation will ultimately dictate winners and losers in our industry. Like most, I mentioned Omni X. We're really proud of what that whole ecosystem brings to the aftermarket. That's an enormous opportunity for our industry to really start automating the more aged pools in the installed base that were built when automation and controls didn't exist. Our approach is to bring this ecosystem one piece at a time. As break fix occurs, we have the initial product out, but there's more coming in the upcoming quarters to help automate and bring optionality and functionality and ambiance to the installed base. Appreciate that. Maybe just taking a step back on this theme, have you seen any trade offs from price versus volume? How do you think about that going forward as new pool construction especially has just gotten so much more expensive.

Our pools in the installed base that that were built with automation and controls didn't exist. So our approach is to bring this ecosystem.

One piece at a time as break fix occur.

Occurs.

We have the initial product out, but there's more coming in the in the upcoming quarters, two to help automate and bring optionality and functionality and ambiance to the to the installed base.

I appreciate that and then maybe just taking a step back on this theme.

And any trina.

On price versus volume and how do you think about that going forward.

With some new technology and Innovation trying to bring some new technology to our industry. We continue to work on that. And that will continue to be an area of very targeted investment. Um, I think technology matters and I think that Innovation, you know, will ultimately dictate winners and losers. Um, in our industry like, like most, um, I mentioned, uh, Omni X. You know, we're, we're really proud of what that whole ecosystem brings to the aftermarket. Uh, that's a, that's an enormous opportunity for our industry. To really start automating. The more aged, uh, pools in the installed base, that that we're built when Automation and controls didn't exist. So our approach is to bring this ecosystem, you know, 1 piece at a time as break, fix ours.

So much more.

Mark.

Yes.

Hi, sorry, it's I mean, we havent necessarily seen any any trade off occurring.

At this time.

Um, we have the initial product out, but there's more coming in the, uh, in the upcoming quarters to, uh, to help automate and bring optionality and functionality and ambience.

We do know that.

To the, uh, to the installed base.

Many consumers, particularly at the entry level in the marketplace remain on solid volumes.

I appreciate that.

The new pool, and maybe even some of the remodel business.

But we continue to see in our product sales profile continued adoption of technology.

Um, from Price first volume and how do you think about that going forward as new poll construction especially has just gotten so much more expensive?

Eifion Jones: Yeah, hi Saree, it's Ivan. We haven't necessarily seen any trade off occurring at this time. You know, we do know that many consumers, particularly at the entry level in the marketplace, remain on the sidelines for the new pool and maybe even some of the remodel business. We continue to see in our product sales profile continued adoption of technology throughout the aftermarket installed base. That also is reflective in the gross profit margin profiles that we're experiencing within the business. Certainly at the entry level, I'm quite sure that people are waiting for interest rates to break the ability to move homes into that next level before they put the pool in. We haven't necessarily seen larger scale trade offs across the aftermarket. Again, we see quite good adoption of new technology, great adoption in our controls category, and we're continuing to invest behind that capability.

Throughout the aftermarket installed base and that also is reflective.

In the gross profit margin profiles that we're experiencing within the business.

Um, yeah. Hi sorry. It's I mean we we, we haven't necessarily seen any any trade-off occurring, uh, at this time. Uh, you know, we do know that.

But certainly at the entry level I'm quite sure that.

People are waiting for interest rates to break.

The ability to to move homes into that next level before they put the pool and we haven't necessarily seen.

To the new pool and maybe even some of the the remodel business.

Largest scale trade offs.

Uh but you know, we continue to see in our product sales profile, continued adoption of Technology.

Across the aftermarket again, we see quite good adoption of new technology.

Great adoption not controls category.

We're continuing to invest behind that capability.

Thank you I appreciate it thank you.

Thank you. Our next question is coming from Andrew Carter of Stifel. Please go ahead.

Yes. Thank you first question I wanted to ask about given the renewed focus on private label. That's out there have you been seeing anything.

Uh, throughout the aftermarket installed base, and that also is reflective, uh, in the gross profit margin profiles that we're experiencing, uh, within the business. Uh, but certainly at the entry level, I'm quite sure that, uh, people are waiting for interest rates to break, uh, the ability to, to, to move homes into that next level before they put the pool in. But we haven't necessarily seen, uh, you know, larger scale trade-offs.

Incremental in terms of either either the positioning by the distributors the demand from your contractors and I know, it's kind of it's been mentioned that its kind of a lower commodity side, what exposure exposure do you have and I get the prices high but and in this environment would it be a lot.

Uh uh across the the aftermarket uh again we see quite good adoption of new technology. Uh great adoption in our controls category. Uh, and we're you know what? We're continuing to invest behind that capability.

Kevin Maczka: Thank you. Appreciate the question.

Thank you. Appreciate the question.

Operator: Thank you. Our next question is coming from Andrew Carter of Stifel. Please go ahead.

More difficult to do a private label program, given the tariffs et cetera. Thanks.

[Analyst 2]: Yes, thank you. First question I wanted to ask about, given the renewed focus on private label that's out there, have you been seeing anything incremental in terms of either the positioning by the distributors, the demand from your contractors? I know it's kind of, it's been mentioned that it's kind of a lower commodity side. What exposure do you have? I get the prices high. In this environment, wouldn't it be a lot more difficult to do a private label program given the tariffs, et cetera? Thanks.

Thank you. Our next question is coming from Andrew Carter of Stifel. Please go ahead.

Yes, you used the term private label I think that the way we look at it is is maybe around some exclusive distribution rights. So may be the same the same thing but.

Yes, thank you. First question: I wanted to ask about the renewed focus on private label. That's out there. Have you been seeing anything?

I would say.

Our industry has attracted lower priced offshore competitors frequently.

It's consistently occurred.

Incremental in terms of either, either the positioning by the Distributors, the demand, uh, from your contractors. And I know it's it's kind of it's been mentioned that it's kind of a lower commodity side, what exposure exposure do you have, and I get the prices as high, but, and in this environment, wouldn't it be a lot more difficult to do a private label program? Given the tariffs Etc? Thanks

Over over the over Hayward's.

Kevin Maczka: Yeah. I mean, you used the term private label. I think that the way we look at it is maybe around some exclusive distribution rights. It's maybe the same thing. I would say our industry has attracted lower priced offshore competitors frequently. I mean, it's consistently occurred over Hayward's history here and while the recent inflationary environment and the tariffs impact in the U.S. market has perhaps opened the door further, we believe that while there could be a price delta there, the loyal dealer base of totally Hayward partners will continue to appreciate the value proposition of what Hayward offers. That and the marketplace, when one of these Hayward dealers walks into a channel partner, they're asking for product by name. They're asking for a TriStar 900, not just a variable speed pump or the job that they're working on.

History here and while the recent inflationary environment and the tariffs impact in the U S market is perhaps open the door further.

Um yeah I I I mean you use the term private label I think that the way we look at it is is is maybe around some exclusive distribution uh rights. It's

We believe that.

While there could be a price delta there vas the loyal dealer base of totally Hayward partners will continue to appreciate the value proposition of what Heyward offers them in.

it's maybe the same the same thing, but um, you know, I would say

You know, our industry.

And the marketplace.

When when when one of these hayward dealers walks into a channel partner, they're asking for product by name. They are asking for a tri Starr 900, not just a variable speed pump or the job that they are working on so by no means of my dismissing.

Has attracted lower price stocks offshore competitors frequently. I mean, it's it's it's it's it's consistently occurred, you know, over over the, you know, over haywards, uh,

Um, history here. And while the recent inflationary environment and the tariffs impact in the US market has opened the door further. Um, you know, we believe that

The risk of a concern because I think it makes us sharper.

But we continue to feel confident.

Well there could be a price Delta there that the loyal dealer base of totally Hayward partners.

In our investments in innovation as we just spoke about with <unk> question around new product development.

We will continue to appreciate the value proposition of what Hayward offers them and the marketplace.

The fact that we have.

Have a complete product line ink supply the entire pool pad.

To the to the trade.

Our national coverage.

Kevin Maczka: By no means am I dismissing the risk or the concern because I think it makes us sharper, but we continue to feel confident in our investments in innovation. As we just spoke about with Saree's question around new product development, the fact that we have a complete product line and can supply the entire pool pad to the trade, our national coverage of Hayward authorized service centers and the technical resources for the trade to call upon. We proudly support the U.S. market with over 90% of the products sold in the U.S. built in one of our four U.S. manufacturing facilities in Rhode Island, North Carolina, Tennessee, and Georgia. We take pride in that. We think it's smart to shorten the supply chain to be able to satisfy the market.

Heyward authorized service centers and the technical resources for the trade to call upon.

We proudly support the U S market with over 90% of the products sold in the U S are built in one of our four U S manufacturing facilities in Rhode Island, North Carolina, Tennessee, and Georgia. So we think we take pride in that.

Um, you know, when one of these Hayward dealers walks into a channel partner, they're asking for product by name. They're asking for a TriStar 900, not just a variable speed pump or the job that they're working on. So, you know, by no means am I dismissing the risk or the concern, because I think it makes us sharper.

You know, but, but, but we continue to feel confident, you know, in our investments in Innovation as we just spoke about with Si's question around new product development. Um, the fact that we uh, have a complete product line and can supply the entire pool pad,

We think it's smart to shorten the supply chain to be able to satisfy.

To the to the trade.

Um, you know, our national coverage.

The market and I think our reputation for quality and service and dependability. That's been built over our 100 year history means more than just the lower price and I expect that to continue to serve us well.

Of Hayward, authorized service centers and the technical resources for the trade to call upon.

Second question shifting gears.

Number one.

Why the raise in the cash flow guidance for the year of 2000 $20 million and then just level set expectations I believe that you have higher capex over the next couple of years around your supply chain efforts.

Kevin Maczka: I think our reputation for quality and service and dependability that's been built over our hundred year history means more than just the lower price and I expect that to continue to serve us well.

Could you speak to that and at this point youre going to have a balance sheet, probably likely below two times over the next couple of years based on based on the estimates.

Um, you know, we proudly support the US market with over 90% of the products sold in the US are built in 1 of our 4 us manufacturing facilities in Rhode, Island, North Carolina, Tennessee, and Georgia. So we think we take pride in that, uh, we, we think it's smart to shorten the supply chain to be able to satisfy um the market. And I think our reputation for for quality and service and dependability that's been built over our 100 Year. History means more than just the lower price.

What are your capital allocation priorities would you be aggressive on share repurchase. Thanks.

And uh, I expect that to continue to serve us. Well,

[Analyst 2]: Second question, shifting gears. Number one, why the raise in the cash flow guidance for the year of $20 million, and then just level set expectations? I believe that you have higher CapEx over the next couple of years around your supply chain efforts. Could you speak to that? At this point you're going to have a balance sheet probably likely below 2 times over the next couple years based on estimates. What are your capital allocation priorities, and would you be aggressive on share repurchase? Thanks.

Andrew it's timing again coming back to the cash flow increase of approximately $20 million half of that is attributable to the increase in the midpoint of EBITDA.

From a midpoint of $2 85, an ounce at midpoint of $2 95.

We have some project timing around Capex, which will move some of the capex spend that we have planned for this year and into next year and finally, working capital improvements and we've seen some.

Modest, but welcomed working capital days on hand reduction in our inventory.

Uh, estimates: what are your capital allocation priorities? And, uh, would you be aggressive on Sherry purchases? Thanks.

Eifion Jones: Andrew, it's, I mean, again, coming back to the cash flow increase of approximately $20 million, and half of that's attributable to the increase in the midpoint of EBITDA, going from a midpoint of $285 million up to a midpoint of $295 million. We have some project timing around CapEx, which will move some of the CapEx spend that we had planned for this year into next year, and finally, working capital improvements. We've seen some modest but welcomed working capital days on hand, reduction in our inventory, and that will be accretive to the cash flow in the year. Can you just repeat to me the second part of your question, Andrew?

And that will that will be accretive to the cash flow.

um, Andrew it's not even again, uh,

In the year could you just repeat to me the second part of your question Andrew.

The next couple of years thinking about what your priorities are going to be.

Stepped up Capex spend that you might be might be doing and then just kind of with this improved balance sheet, where your capital allocation priorities lie.

Yes, Okay got it.

As we previously talked about we will be stepping up capex into the business. Historically has been around two to two 5% maybe up to 3% at times of revenue I believe over the next several years will be all of that 3% if not slightly more as we continue to invest.

[Analyst 2]: Yeah. The next couple of years thinking about what your priorities are going to be, stepped up CapEx spend that you might be doing, and then just kind of with this improved balance sheet where your capital allocation priorities lie.

Commercial flow increase of approximately, 20 million, half of that is attributable to the increase in the midpoint of ibida, uh, going from a midpoint of 285. Now, to a midpoint of 295, we we have some project timing around capex, which will move some of the capex spend that we had planned for this year into next year and finally, uh, working Capital Improvements. And we've seen some, uh, uh, modest but welcomed working capital days on hand reduction in our inventory, uh, and that will, that will be accreted to the cash flow, uh, in the in the year, could you just repeat to me that the second part of your question, Andrew?

In automating, our manufacturing and supply chain capabilities, we've already had some great success this year.

That's a call out to several of our plants, including our Nashville facility.

Eifion Jones: Yeah, okay, got it. As we've previously talked about, we will be stepping up CapEx into the business. Historically it's been around 2 to 2.5%, maybe up to 3% at times of revenue. I believe over the next several years will be all of that 3% if not slightly more as we continue to invest in automating our manufacturing and supply chain capabilities. We've already had some great success this year doing that. A call out to several of our plants including our Nashville facilities, which has made some interesting automation investments. That will be the thematic going forward over the next several years. We are completing ERP implementation. We've had some expenditures there this year and last year and that will be a continuation into 2026 and 2027.

Yeah. The next couple of years thinking about what your uh priorities are going to be uh stepped up capex, spend that. You you might be uh, might be doing and then just the kind of with this improved balance sheet where your Capital allocation priorities lie.

Which has made some some interesting automation investments, but that will be the thematic going forward over the next several years we are completing.

<unk> implementation.

Had some expenditures there this year and last year and that will be a continuation into 2006 and 2007, but the main focus of the organization right now is to take our facility capability up to the next level in terms of throughput facilitated by automation.

Yeah. Okay, got it. Uh, so as we've previously talked about we will be stepping up capex into the business historically. It's been around 2 to 2 and a half percent maybe up to 3% at times of Revenue. Uh, I believe over the next several years, we'll be all of that 3%. If not slightly more as we continue to invest, uh, in automating our manufacturing and supply chain capabilities, we've already had some great success.

New technology platforms, like AI and machine learning.

In terms of the capital allocation priorities remains remains the same.

We will continue to do the organic Capex I just mentioned, we continue to look at M&A, we nurture our pipeline of opportunities we have the optionality now to focus on residential.

Eifion Jones: The main focus of the organization right now is to take our facility capability up to the next level in terms of throughput facilitated by automation and new technology platforms like AI and machine learning. In terms of the capital allocation priorities, remains the same. We'll continue to do the organic CapEx I just mentioned. We continue to look at M&A. We nurture a pipeline of opportunities. We have the optionality now to focus on residential pool, commercial pool and our small flow control business. For accretive M&A opportunities, we did initiate a share repurchase authorization. Again, we have the opportunity to be opportunistic and maybe programmatic at some point. The nice thing about this business, which we're now beginning to very clearly demonstrate, it has great cash flow characteristics which gives us this optionality across that capital allocation spectrum.

Commercial pool, and our slow flow control business for accretive M&A opportunities.

Did initiate a share repurchase.

Program authorization again, we have the opportunity to be opportunistic and maybe programmatic at some point.

Test this year, uh, doing that. So, a call out to several of our plans including our national facility, uh, which has made some some, uh, interesting automation Investments but that will be the Thematic going forward over the next, uh, several years we are completing, uh, Erp implementation. We've had some expenditures there this year and last year, and that will be a continuation into 26 and 27. But the main focus of the organization right now is to take our facility capability up to the next level in terms of throughput uh, facilitated by Automation and new technology platforms like Ai and machine learning.

The nice thing about this business, which would not begin to very clearly demonstrate it has great cash flow characteristics, which gives us that optionality across that capital allocation spectrum.

Thanks ill pass it on.

Thank you. The next question is coming from Mike Halloran of Baird. Please go ahead.

Hey, good morning, everybody it depends on for Mike I, just want to follow up on the capital allocation side, and maybe dial in a little bit on the funnel.

How do I are you thinking about the opportunities in both residential and commercial pool.

I noticed that you have through flow control in there I know that part of the business that doesn't get a lot of love.

Maybe talk about how youre thinking about the makeup of the funnel the action ability of the funnel and to Andrew's point, obviously the leverage is.

[Analyst 2]: Thanks, I'll pass it on.

In terms of the capital, allocation priorities remains Remains the Same, uh, we'll continue to do the organic capex. I just mentioned we continue to look at m&a. We nurture our pipeline of opportunities. We have the optionality now to focus on residential pool commercial pool, and our small flow control business for a creative m&a opportunities. Uh, we did initiate a share repurchase Pro, uh program authorization. Again, we have the opportunity to be opportunistic and maybe programmatic uh, at some point. Uh, the nice thing about this business, uh, which we're now beginning to very clearly demonstrate. It has great cash flow characteristics which gives us this optionality across that Capital allocation Spectrum.

Thanks, I'll pass it on.

Operator: Thank you. The next question is coming from Mike Halloran of Baird. Please go ahead.

Continuing to progress nicely, so any color on that M&A opportunities where are you spending most of your time.

[Analyst 3]: Hey, good morning everybody. It's PEZ on for Mike. I just want to follow up on the capital allocation side and maybe dial in a little bit on the funnel. How are you thinking about the opportunities in both residential and commercial pool? I noticed that you threw flow control in there. I know that's part of the business that doesn't get a lot of love. Maybe talk about how you're thinking about the makeup of the funnel, the actionability of the funnel, and to Andrew's point, obviously the leverage is continuing to progress nicely. Any color on the M&A opportunities where you're spending most of your time and what you're seeing from a valuation perspective would be helpful.

Thank you. The next question is coming from Mike Halloran of beard. Please go ahead.

And what Youre seeing from evaluation perspective would be helpful.

Yes, so in terms of a funnel I mean, obviously with the with the deleverage that that's occurred.

Occurred over the last several quarters it puts us in a different position that said, while core King, which is now anniversaried and a little over a year old which our.

A fantastic shot in the arm for our commercial business, you haven't announced anything but we certainly have been working in the background to accelerate in and work on some diligence with some with some opportunities.

Kevin Maczka: Yeah. In terms of a funnel, obviously with the deleverage that has occurred over the last several quarters, it puts us in a different position. That said, while ChlorKing, which is now anniversaried and a little over a year old, has been a fantastic shot in the arm for our commercial business, we haven't announced anything, but we certainly have been working in the background to accelerate and work on some diligence with some opportunities that really hit the two key platforms that you mentioned, PEZ around residential. I think we've been pretty open in saying that we have aspirations for commercial to become a growth platform for us. We continue to look both organically as well as inorganically at some opportunities there. We did mention in the prepared remarks our industrial flow control business.

Hey, good morning everybody. It's Pez on for Mike, I just want to follow up on the capital, allocation side and maybe dial in a little bit on the funnel. Um, you know, how are you thinking about the opportunities in both residential and Commercial pool? Um, you know, I, I noticed that you threw flow control in there. I know that's a part of the business. That doesn't get a lot of love, you know. Maybe talk about how you're thinking about the, the makeup of the funnel that action ability of the funnel. And to Andrew's Point, obviously the Leverage is, um, continuing to progress nicely. So any color on the, the m&a opportunities, where you're spending most of your time, uh, and and what you're seeing from evaluation perspective would be helpful.

That really hits the two key platforms that you mentioned.

Around residential I.

I think we've been pretty pretty open in saying that we have aspirations for commercial to become a growth platform for us and we continue to look both organically as well as inorganically at some opportunities there.

We did.

And in the prepared remarks, our industrial flow control business it doesn't get a lot of attention.

But it's a fantastic business that.

Yeah. So in terms of a funnel, I mean, obviously with the with the deal leverage that that's that's occurred over the last several quarters, it puts us in a different position that said while Clark King which is now anniversary and a little over over a year old, which has been a, a fantastic shot in the arm for our Commercial Business. We have an announced anything, but we certainly have been working in the background to uh, to to accelerate and and work on some diligence with some, with some opportunities, uh, that really hit, you know, the 2 key platforms that you mentioned as

That provides great access to distribution.

And some nice growing end markets were relatively niche in the products that we offer today, but we're progressively spending time as a leadership team looking at what that might be able to to be for us.

So that's that's getting increased attention from a strategy standpoint again both organically.

Around residential. Um, I think we've been pretty pretty open in saying that we have aspirations for commercial, uh, to become a growth platform for us. And we continue to look both organically, uh, as well as inorganically at some opportunities there. Um, you know, we did, uh, mention in the prepared remarks, um,

Kevin Maczka: It doesn't get a lot of attention, but it's a fantastic business that provides great access to distribution and some nice growing end markets. We're relatively niche in the products that we offer today, but we're progressively spending time as a leadership team looking at what that might be able to be for. That's getting increased attention from a strategy standpoint, again, both organically as well as inorganically. We're looking across all those platforms from a product technology standpoint. What that can bring to us, does it provide regional diversity and growth for us? Looking always to capitalize and leverage our distribution relationships and partnerships and go to market strategies. Those are several of the elements that we look and assess opportunities across business.

Our industrial flow control business. It doesn't get a lot of attention. Um,

As well as.

Inorganically.

We're looking across all those platforms from a from a product technology standpoint, what that can bring to us does it provide a regional <unk>.

Diversity and growth for us and look at always to capitalize and leverage our distribution relationships partnerships and go to market strategies. So that's those are those are several of the elements that we look and assess opportunities across the us.

That uh, that provides great access to distribution. Uh, and some nice growing uh and markets were relatively niche, in the products uh that we offer today. Uh, but we're progressively spending time as a leadership team looking at what that might be able to, uh, to be for us.

Got it thank you and then.

Not just the kind of smaller part of the business, but maybe now that we're a year out of the core King acquisition, maybe talk about the success that you've seen in being.

So that's, uh, that's getting increased attention. From a strategy standpoint, again, both organically, uh, as well as, uh, inorganically. Uh, you know, we're looking, you know, across all those platforms from, uh, from a product technology standpoint. What that can bring to us? Uh, does it provide, uh, regional um, diversity, uh, and growth for us?

Being able to expand core king's reach within your distribution channels and being able to bring that up to scale a little bit and then on the flip side, maybe talk about what type of success as you've seen and pushing legacy Hayward product.

Through that commercial market.

Yes, there has been success across all of those elements.

Looking always to capitalize and leverage our distribution, uh, relationships and Partnerships, and go to market strategies. So that's, those are, those are several of the elements that we, uh, that we look and assess our opportunities across president.

[Analyst 3]: Got it, thank you. Not to stick on a smaller part of the business, but maybe now that we're a year out of the ChlorKing acquisition, maybe talk about the success that you've seen in being able to expand ChlorKing's reach within your distribution channels and being able to bring that up to scale a little bit. On the flip side, maybe talk about what type of successes you've seen in pushing legacy Hayward product through that commercial market.

We have a fantastic.

A leader over that business that joined us from core King.

With those resources with the acquisition, we melded our existing commercial team into one of one organization.

And we're seeing cross selling opportunities.

Got it. Thank you. And then, you know, not to not to stick on a smaller part of the business, but maybe now that we're a year out of the core King acquisition, maybe talk about the success that you've seen in, um, being able to expand Core King's reach within your distribution channels and, uh, being able to bring that up to scale a little bit. And then on the flip side, maybe talk about what type of successes you've seen.

Across both types of commercial tools, we talk about class, a and class B, which is really just size or the size of the commercial body.

Kevin Maczka: Yeah, there's been success across all those elements. You know, we have a fantastic leader over that business that joined us from ChlorKing with those resources. With the acquisition, we melded our existing commercial team into one organization, and we're seeing cross selling opportunities across both types of commercial pools. We talk about Class A and Class B, which is really just the size, or the size of the commercial body. You know, we had a pretty complete product line along Class B, legacy Hayward did, which are for the smaller bodies of water. Really where we weren't represented was Class A, which would be larger than 100,000 gallons, which is really a sweet spot where ChlorKing participates. With that acquisition and that integration, it brought relationships with the architects and the engineering firms and some of the specialized distribution that serves the large commercial market.

Seen in pushing Legacy Hayward products through that commercial market.

We had a we had a pretty complete product line along class B legacy Hayward did.

Which are for smaller bodies of border, but really where we werent represented was class a which would be larger than 100000 gallons, which is really a sweet spot where chlor king participates so with that acquisition and that integration it broad relationships with the architects and engineers.

Yeah, there's been success across all those elements as, um, you know, we, uh, we have a fantastic, um, leader over that business that joined us. Uh, from core king, um, with those Resources with the acquisition, we melded our existing commercial team, uh, into 1 1 organization, uh, and we're seeing cross-selling opportunities.

Hearing firms some of the some of the specialized distribution that serves the large commercial.

Mark Yes, so we're really pleased with the amount of cross selling and collaboration that's occurring across now the broader commercial market, where we were before <unk> really only participating in and growing and the class B side.

Side of the market.

Great. Thanks, I'll pass it on.

Thank you. Our next question is coming from Jeff Hammond of Keybanc capital markets. Please go ahead.

Kevin Maczka: We're really pleased with the amount of cross selling collaboration that's occurring across now the broader commercial market, where we were before ChlorKing, really only participating at and growing in the Class B side of the market.

Hi, yes, good morning.

Good morning.

Just on <unk>.

Across both types of commercial pools, we talk about class A and Class B, which is really just the size or the the size of the commercial, uh, body. You know, we had a, we had a pretty Complete product line, along Class B Legacy. Hayward did, uh, which are for the smaller bodies of water, but really where we weren't represented was class A, which would be larger than 100,000 gallons, which is really sweet spot, where Clark King, uh, participates. So with that acquisition and that, and that integration, it brought relationships with the Architects and the engineering firms. And some of the, some of the specialized uh distribution that serves uh, the large commercial uh uh market. So we're really pleased with the amount of cross-selling and collaboration that's occurring across. Now, the broader

I got on a little late so I don't know if you touched on this but.

Last year, there was a lot of storms and I think your fourth quarter benefited from some kind of repair work and I'm. Just wondering how you are contemplating.

Commercial markets where we were before, clerking really only participating in and growing in the Class B side of the market.

[Analyst 3]: Great, thanks. I'll pass it on.

That comp given given a quiet hurricane season.

Great, thanks. I'll pass it on.

Yes, that's certainly presents so what we see is a bit of a headwind for Q4 I mean, it was a big fourth quarter. As you mentioned last year I think we were up kind of high teens.

Operator: Thank you. Our next question is coming from Jeff Hammond of KeyBanc Capital Markets. Please go ahead.

[Analyst 2]: Hi.

[Analyst 3]: Yes, good morning.

Thank you. Our next question is coming from Jeff Hammond of KeyBanc Capital Markets. Please go ahead.

Kevin Maczka: Good morning.

Hi, yes. Good morning.

As business in the fourth quarter.

[Analyst 3]: I got on a little late, so I don't know if you touched on this, but last year there was a lot of storms and I think your fourth quarter benefited from some kind of repair work. I'm just wondering how you're contemplating that comp given a quiet hurricane season.

um,

It was certainly aided by a couple of unfortunate weather events that impacted the southeast with Halloween and with Hurricane milk.

So we're not expecting that to repeat.

And I think that.

Kevin Maczka: That certainly presents what we see as a bit of a headwind for Q4. It was a big fourth quarter, as you mentioned last year. I think we were up kind of high teens as a business in the fourth quarter. It was certainly aided by a couple unfortunate weather events that impacted the Southeast with Helene and with Hurricane Milton. We're not expecting that to repeat. I think that, I don't think, I know that that's factored into the guidance that we gave in our press release and our prepared remarks this morning. You know what we did talk about? I'm not sure when you joined around early buy. We have had nice participation and nice response to our early buy program. It's really closing out here in a few days in the U.S. at the end of October and it extends a little further for other international markets.

Just on. Um, I got on a little late. I don't know if you touched on this but um, you know, last year there was a lot of Storms and I think your fourth quarter benefited from some kind of repair work and I'm just wondering how you're contemplating, you know that comp given given a quiet hurricane season.

I don't think I know that that's factored into the to the guidance that we gave in our press release and our prepared remarks scorning. So.

Yeah, that's certainly presents what we see as a bit of a headwind for Q4. I mean it was a big fourth quarter as you mentioned last year. I think we were up.

What we did talk about I'm not sure when you joined around early buy.

High Teens, uh,

Our business in the fourth quarter, and

We have had nice participation a nice response to our early buy program, it's really closing out here in a few days in the U S.

At the end of October and it extends a little further for other international markets, but as were talking this morning, we feel we feel good about the participation really what that what that what that says.

<unk> channels enthusiasm and position heading into the new new year as well as what the dealer sentiment is because our programs get taken to the to the dealer base out there.

It was certainly aided by a couple unfortunate weather events that impacted the, uh, the southeast with Helen and with hurricane Milton. Uh, so we're not expecting that to, uh, to repeat. Uh, and I think that that might, I don't think I know that that's factored into the, uh, to the guidance that we, uh, that we gave in our press release on our prepared remarks this morning. So, uh,

And Thats whats culminated in aggregated into the early buy orders that we received from our channel partners. So.

You know what we did talk about. I'm not sure when you joined uh, you know, around early by we we have had nice participation and nice response to our early buy program. It's really closing out here in a few days uh, in the US.

Kevin Maczka: As we're talking this morning, we feel good about the participation, really what that says about channels, enthusiasm and position heading into the new year as well as what the dealer sentiment is because our programs get taken to the dealer base out there, and that's what's culminated and aggregated into the early buy orders that we received from our channel partners. I'll stop there. You have any of that around? Yeah, no.

I'll stop there.

Turning that around.

Yes, no I mean, I think you captured it well Kevin I would just add.

We expect.

A modest improvement in the North American early buy program to ship out in Q4 that will be slightly offset by.

Timing movement of early buy shipments in Europe, Jeff He may have not heard it shifts a little bit more.

Really. What that, what that, what that says about, uh, channels' enthusiasm and position heading into the new, uh, New Year, as well as what the dealer sentiment is because our programs, you know, get taken to the dealer base out there.

We buy in Europe in Q3, we'll do less year over year in Q4. So net for total Haywood early Bob will be a slight positive, but then as Kevin mentioned in Q4, we don't expect to ship that hurricane related business.

Um,

Eifion Jones: I mean, I think you captured it all, Kevin. I just add, you know, we expect, you know, a modest improvement in the North American early buy program to ship out in Q4. That will be slightly offset by a timing movement of early buy shipments in Europe. Jeff, you may have not heard it early. We shipped a little bit more early buy in Europe in Q3. We'll do less year over year in Q4. Net for total Hayward early buy will be a slight positive. As Kevin mentioned in Q4, we don't expect to ship that hurricane related business that benefited 2024. On a net basis volume we expect to be slightly down in Q4 versus last year. Upside to the guidance would be an extension in the season.

<unk> benefited.

2024, so on a net basis volume, we expect to be slightly down in Q4 versus last year upside to the guidance would be an extension in the season.

The low end of our guidance for Q forward group at this point pretty much reflect Dani.

Negative weather impacts.

Okay and then.

We go through the different pieces it seems like aftermarket holding up fine just maybe touch on what youre seeing on that repair replace dynamic that came up.

Over the last couple of quarters and then.

New pool.

Again, it kind of not going down but maybe.

Maybe just expand on what Youre seeing on upgrade remodel if that's still kind of the biggest question mark or are there any signs of improvement there.

Eifion Jones: The low end of our guidance for Q4 would at this point pretty much reflect on the negative weather impacts.

Yes, as you say the aftermarket it is proving to be resilient.

uh, I'll stop there. You have any of that around around 2 240? Yeah. No, I mean, I think you captured little Kevin. I just add, uh, you know, we expect, you know, a modest Improvement in the North American early, buy program to ship out in Q4, that would be slightly offset by um, a timely movement of early buy shipments in Europe. Jeff, you may have not heard it earlier. We ship it more, uh, early by, in Europe in Q3 was will do less, uh, year-over-year in Q4. So, net for total Haywood early. Bar, will be a slight positive, but then, as Kevin mentioned in Q4, we don't expect to ship that hurricane related business, uh, that, uh, benefited, uh, 2020 for. So on, on a, on a net basis. Volume, we expect to be slightly down, uh, in Q4 versus last year upside to the guidance. Would would be an extension in the season uh and the low end of our guidance for Q forward group at this point, pretty much reflect only uh negative weather impacts.

[Analyst 2]: Okay.

[Analyst 3]: As we go through the different pieces, it seems like aftermarket holding up fine. Just maybe touch on what you're seeing on that repair replace dynamic that came up over the last couple quarters, and new pool. I get it kind of not going down. Maybe just expand on what you're seeing on upgrade remodel, if that's still kind of the biggest question mark or any signs of improvement there.

A question was asked earlier, we've seen I think it was by sorry, whether we're seeing any kind of trade down frankly are are our guide contemplates may be a little bit of a little bit of mix in the aftermarket but.

But not much because it's it's holding up fine on the on the new construction side I would say that the permit.

Kevin Maczka: Yeah, as you say, the aftermarket is proving to be resilient. A question was asked earlier. We see, I think it was by Saree, whether we were seeing any kind of trade down. Frankly, our guide contemplates maybe a little bit of, a little bit of mix in the aftermarket, but not much because it's holding up fine. On the new construction side, I'd say that the permit count has moderated, which is welcomed as the year has progressed here, but still net through, call it three quarters, is still down. The trend continues that what is being built is at higher value year on year, which I think says something about, you know, the features that folks are putting on and the fact that maybe the, maybe the mid to upper end is holding up better than more the entry level pool.

Okay, and then, um, you know, as we go through the different pieces, it seems like aftermarket is holding up fine. Just maybe touch on what you're seeing on that repair-replace dynamic that came up, you know, over the last couple quarters. And then, you know, new pool, I get it, kind of not going down, but you know, maybe just expand on what you're seeing on upgrade-remodel if that's still kind of the biggest question mark or any, you know, signs of improvement there.

<unk> has has moderated which is welcomed.

As the year has progressed here, but still a nash.

yeah, as you say, the aftermarket is proving to to be uh resilient

Through call. It three quarters are still down the trend continues that what is being built is at higher value.

Year on year.

I think says something.

About the features that folks are putting on and the fact that maybe the maybe the mid to upper end is holding up better than more of the entry level pool I would say anecdotally, what we hear from our from our builders at our Remodelers is that.

Uh, question was asked earlier, are we seeing I think it was by SRI, whether we were seeing any kind of trade down, frankly, our our our our guide contemplates, maybe a little bit of a little bit of mix in the aftermarket. But, uh,

But not much.

It's holding up fine on the, on the new construction side I'd say that the permit uh account.

Moderated, which is welcome.

Theres still lots of pent up demand on the remodel side the installed base continues.

Two to age and it's moving sideways a bit I think there is stabilization.

Around the the remodel bus I think with a little bit of macro improvement.

Around interest rates around existing home sales are all of that will have very positive impact.

The year is progressed here, but still a net, uh, through call it 3/4, uh, is still down. The trend continues. That what is being built is at higher value, um, year year on year, uh, which I think says something. Um, about you know, the features that folks are putting on in the fact that maybe, the, maybe the mid to Upper end is holding up.

Kevin Maczka: I would say, you know, anecdotally what we hear from our builders and our remodelers is that there's still lots of pent up demand on the remodel side. The installed base continues to age and it's moving sideways a bit. I think there's stabilization around the remodel but, you know, I think with a little bit of macro improvement around interest rates, around existing home sales, all of that will have very positive impact on the pool industry both from a new construction as well as a refurb and remodel. I will close by saying last quarter there was, there was follow up questions around parts and what that may signal for a desire to repair versus replace. Third quarter, you know, on a year to date basis I think we're up about high single digits on part sales. You know, some of that is explained obviously by pricing.

The pool industry, both from a new construction as well as a refurb and remodel I will close by saying last quarter. There was it was follow up question's around around parts and what that may signal for a desire to repair versus.

Better than more the entry level, uh, pool. I would say, you know, anecdotally what we hear from our, from our Builders and our remodelers is that

Still lots of pent-up Demand, on the remodel side, the installed base continues, um, to uh, to age and it's moving sideways, a bit. I think there's stabilization.

Replace.

We third quarter.

Uh, around the remodel bus, you know, I think with a little bit of macro improvement. Uh,

On a year to date basis, I think we're up about high single digits on parts sales.

Some of that is explained obviously by pricing third quarter was not necessarily a strong year over year quarter for parts sales. So I think that this this this broad based question or even concern around repair versus remodeling our data does not necessarily show that there is.

Widespread repairing going on and deferral of the equipment.

Around interest rates around existing home sales. All of that will have very positive impact, uh, on the pool industry both from a new construction, as well as a refurb and remodel, I will close by saying last quarter. There was, uh, there was a follow-up questions around around parts and what that may signal for a desire to repair versus, um, uh replace

<unk>.

We third quarter, um, you know, on a year-to-date basis. I think we're up about

Okay. Thanks, so much Kevin.

Sure Joe.

Kevin Maczka: Third quarter was not necessarily a strong year over year quarter for part sales. I think that, you know, this broad based question or even concern around repair versus remodeling, our data does not necessarily show that there's widespread repairing going on and deferral of the equipment replacement. Okay, thanks so much, Kevin.

Our next question is coming from Brian Lee of Goldman Sachs. Please go ahead.

Hey, guys. Good morning, Thanks for squeezing me in I just had.

Two hopefully quick questions on a lot of ground's been covered.

And then sorry, if you already covered this but.

First question was just around the strong increase in margins in the international markets. If you could kind of provide some color around what drove that and how sustainable that is and then second question.

High single digits on part sales, you know, some of that is explained, obviously by pricing uh third quarter. Was not necessarily a strong uh year-over-year quarter for part sales. So I think that you know this this this broad-based question or even concern around repair versus re remodeling our data does not necessarily show that there's widespread repair

Ing going on and deferral of the equipment, uh, replacement.

It looks like net pricing in North America has kind of ticked up.

Okay, thanks. So

Operator: Thank you. Our next question is coming from Brian Lee of Goldman Sachs. Please go ahead.

A little bit from the beginning of the year, even from last quarter to this quarter.

[Analyst 1]: Hey guys, good morning. Thanks for squeezing me in. I just had two hopefully quick questions. I know a lot of ground's been covered and sorry if you already covered this, but first question was just around the strong increase in margins in the international markets. If you could kind of provide some color around what drove that and how sustainable that is. Then second question, it looks like net pricing in North America has kind of ticked up a little bit from the beginning of the year, even from last quarter to this quarter. In terms of net price realization, as we think about kind of the trend you're seeing into year end or the buy season, et cetera, do you think 2026 ends up being more of a normal kind of low single digit price year?

Next question is coming from Brian Lee of Goldman Sachs. Please go ahead.

In terms of net price realization.

Think about kind of the trend youre seeing into year end early buy season et cetera.

Do you think 26 end up being more of a normal.

Low single digit price year or are we going to see some of that.

Factors from this year.

Spillover into next wave would probably still going to be elevated available in mid single digits.

Historical low I'm, just trying to get a sense of where kind of that pricing paradigm is heading to 26. Thanks guys.

Good morning, Brian.

<unk>.

Let me tackle the Europe margins here, and then maybe shrink Kevin and I will talk a little bit about the price, but in terms of the European margins <unk> margins more specifically.

[Analyst 1]: Or are we going to see some of the factors from this year spill over into next where we're probably still going to be elevated, maybe more mid single digits than the historical low? Just trying to get a sense of where kind of that pricing paradigm is heading to in 2026. Thanks guys.

And the international markets, if you could kind of provide some color around what drove that and how sustainable that is. And then, second question, um, you know, it looks like net pricing in North America has kind of ticked up a little bit from the beginning of the year, even from, you know, last quarter to this quarter. Um, in terms of net price realization, as we think about kind of the trend you're seeing into your end early buy season, etc., um, do you think 2026 will end up being more of a normal, you know, kind of low single-digit price year, uh, or are we going to see some of the...

We did see an improvement year over year of 750 bps, approximately 300 bps sequentially.

Year over year, I would say it reflects the non repeat of some discrete inventory items that we had in Q3 of 'twenty also it's good to see that noise behind us we stabilize those facility.

Eifion Jones: Good morning Brian. Let me tackle the Europe margins here and then maybe between Kevin and I will talk a little bit about the price. In terms of the European margins or ERW margins more specifically, we did see an improvement year over year of 750 bps, approximately 300 bps sequentially. Year over year, I would say it reflects the non-repeat of some discrete inventory items that we had in Q3 of 2024. It's good to see that noise behind us. We've stabilized those facilities that we have in Spain. We've talked about this on previous calls. We've improved the management team there, both locally supplemented with some expat capabilities moving into that organization. Sequentially now throughout the year we've been able to post margin improvements in our European business, which is effectively positive with the overall ERWIN segment.

Factors from this year, um, uh, spill over into next where we're probably still going to be elevated, maybe more mid to more digits than the historical low. Just trying to get a sense of where kind of that pricing paradigm is heading to in 2026. Thanks, guys.

Good morning, Brian. Um,

<unk> that we have in Spain, we've talked about this on previous calls we've improved the management team.

Both locally supplemented with some ex pats are capabilities moving into that organization and sequentially now throughout the year, we've been able to post margin improvements in our <unk>.

European business, which has affected positively the overall E. W. A segment what I would say is in Q3. This year. We did have a couple of one time benefits.

Let me tackle the European margins here, and then maybe between Kevin and I, we will talk a little bit about the price. In terms of the European margins, or ERW margins more specifically, you know, we did see an improvement year-over-year of 750 basis points, approximately 300 basis points sequentially. Year-over-year, I would say it reflects the...

Including a tariff refund, which is accumulative tariff refund so that probably benefited Q3 margins basically by approximately 100 bps and then we had a couple of other one time is that additionally contributed an additional 100 basis points, but even if you discount.

Those elements, we still had good sequential margin improvements, which.

Eifion Jones: What I would say is in Q3 this year we did have a couple of one-time benefits, including a tariff refund, which is a cumulative tariff refund. That probably benefited the Q3 margins this year by approximately 100 bps. We had a couple of other one-timers that additionally contributed an additional 100 basis points. Even if you discount those elements, we still had good sequential margin improvements, which again reflects the stabilization of our production capabilities in country in Spain. We feel good about the progress that we have made. In terms of the pricing, net pricing realization did take a step up obviously year over year in Q3 this year, consequential primarily to the seasonal price that was enacted at the end of last year plus the midterm pricing that we put in this year to protect against tariffs that rolled through in its fullness.

Again reflects the stabilization of our production capabilities in country in Spain.

Spain that we've talked about this on previous calls. We've improved the the management team there, uh, both locally and supplemented with, uh, some experts are capabilities. Moving into that organization and sequentially. Now, throughout the year we've been able to post margin improvements, um, in our European business, which is affected the positively, the overall erw segment. What I would say is, uh, in Q3 this year, we did have a couple of 1-time benefits.

We feel good about the progress that we have made.

In terms of the pricing.

Net pricing realization.

They take a step up obviously year over year in Q3 this year.

Consequential primarily to the seasonal price that was enacted at the end of last year, plus the midterm pricing that we put in this year to protect against tariffs.

Rolled through in its fullness in Q3, we got a partial benefit in Q2, we had a full benefit in Q3.

We have announced further pricing for 2026.

Um, including a tariff refund, which is a a cumulative, tariff, refund. So, that probably benefited the Q3 margins this year by approximately 100 bits, and then we had a couple of other 1 times that. Additionally contributed an additional 100 basis points but even if you discount uh uh those elements we still had good sequential margin uh improvements. Uh, which uh, you know, again reflects the stabilization of our production capabilities in country in Spain, uh, and we feel good about the progress uh, that we have made.

Mid to high single digits.

In terms of the pricing, uh, you know, net pricing realization. Um,

In the U S much less elsewhere.

We see a lot of that is discounted through the early buy programs, but as we step into 2026, you can expect the carry of that.

Not specifically guiding yet on 2026, but we certainly would expect slightly higher than normal let's call. It mid single digit pricing next year.

Eifion Jones: In Q3, we got a partial benefit. In Q2 we had a full benefit. In Q3, we have announced further pricing for 2026 mid to high single digits in the U.S., much less elsewhere. A lot of that is discounted through the early buy programs. As we step into 2026, we'd expect a carry of that. We're not specifically guiding yet on 2026, but we certainly would expect slightly higher than normal, let's call it mid single digit pricing next year. We don't yet have any line of sight into end of year inflation next year. We're not willing to commit to what next year's Q4 seasonal price increases would be. We're hoping we get back to a normal inflationary environment where we can get to that normal pricing dynamic.

We don't.

Have any line of sight into ending year inflation next year. So we're not willing to commit to what next year's Q4 seasonal price increases would be but we're hoping we get back to a normal inflationary environment.

We can get to that global pricing dynamic.

I appreciate all the color thanks, guys I'll pass it on.

Thanks, Brian.

Thank you. The next question is coming from Nigel Coe of Wolfe Research. Please go ahead.

Thanks, Good morning, everyone.

They take a step up obviously year-over-year in Q3 this year uh consequential primarily to the seasonal price that was enacted at the end of last year, plus the midterm. Pricing that we put in this year to protect against tariffs, uh, that rule through in its fullness. In Q3, we got a partial benefit in Q2, we had a full benefit in Q3, um, we have announced further pricing for 2026, uh, uh, mid to high single digits, uh, in, in the US, much less elsewhere. Uh, obviously a lot of that is discounted through the early buy programs, but as we step into 2026, we'd expect to carry of that. Uh but we do not not specifically guiding yet on 2026, but we certainly would expect slightly higher than normal. Let's call it mid single digit pricing next year. Uh we don't yet how how many line of sight into end of year inflation next year. So we're not

So I just wanted to follow up on your I think you said 100 basis points.

Benefits in the quarter from tariff refunds.

A bit more kind of that I mean are you.

Are you winning some exemptions on some of the some of the inputs and is this a one timer.

Willing to commit to what next year's, uh, Q4 seasonal price increases would be. But we're hoping we get back to a normal inflationary environment, uh, where, uh, we can get to that normal pricing dynamic.

[Analyst 1]: Appreciate all the color. Thanks, guys. I'll pass it on.

Would you expect this to continue.

Eifion Jones: Thanks.

Kevin Maczka: Thanks Brian.

Appreciate all the color. Thanks guys, I'll pass it on.

In 2006, recognizing that you are rebalancing away from China, and then maybe just give us an update on where you are with that supply chain realignment.

Operator: Thank you. The next question is coming from Nigel Koh of Wolfe Research. Please go ahead.

Thanks. Thanks Brian.

Thank you. The next question is coming from Nigel.

[Analyst]: Thanks. Good morning everyone. Eifion, I just wanted to follow up on your, I think you said 100 basis points benefit in the quarter from tariff refunds. Just a bit more color there. I mean, are you winning some exemptions on some of the imports and is this a one-timer or would you expect this to continue in 2026, recognizing that you are rebalancing away from China, and then maybe just give us an update on where you are with that supply chain realignment.

Research. Please go ahead.

Yes.

And the elements of our <unk> business is exported from the United States.

To the extent, we are importing product into the U S manufacturing those products in that re exporting them to service Latam Asia and the Middle East.

Then eligible for duty claw back on any tariffs we had paid on that initial embed in the states. So.

We have now.

Yeah.

Eifion Jones: Yeah. An element of our ERW business is exported from the United States, and to the extent we are importing products into the U.S., manufacturing those products, and then re-exporting them to service LATAM, Asia, and the Middle East, we're then eligible for a duty clawback on any tariffs we had paid on that initial inbound into the States. We've now taken a more aggressive position towards our duty refund timelines given the pain we're feeling or have felt on the tariff charge coming into the business. It's not necessarily a one-time benefit, but it did take a pop in Q3 because it was a cumulative tariff refund, so a bit of catch up in the quarter. We will continue to apply for the eligible tariff refunds that we are entitled to, and we will continue to do that.

Thanks. Good morning, everyone. Um, so I just wanted to follow up on, on your, I think you said 100 base points uh, benefits in the quarter from uh, tariff refunds. Um, just a bit more color there. I mean, are you, are you winning some exemptions on on some of the um, some of the Imports and is this a 1-time or, or would you expect us to, to continue, um, in 26, recognizing that you are, you know, rebounding away from China. And then maybe just give us an update on where you are with that, uh, supply chain alignment.

Taking a more aggressive position towards our duty refund.

Yeah. Um,

Timelines given the pain with feeling I have felt on the tariff charge coming into the business.

It's not necessarily a one time benefit but it did take a pop in Q3, because it was accumulative tariff refund so I'm going to catch up in the quarter. We will continue to apply for the eligible tariff refunds that way.

Entitled to.

We will continue to do that we have a long practice of doing that in the United States and we're now.

Importing products into the US manufacturing, those products and then re-exporting them to service leam. Asia, and the Middle East uh, were then eligible for a duty clawback, on any tariffs we had. Paid on that initial inbound into the states. So, uh, We've now, uh, uh,

Getting more detailed in those applications in terms of.

<unk>.

The progression of our tariff mitigation programs well progressed module.

Said that the North American business, where we cannot reduce our China exposure intends to 3%.

10% to 3% well progress the team is doing a fantastic job getting after that mitigation. We are winning some success more so than we originally thought so the actual cost to recalibrate supply chain is coming at a little bit less than we had anticipated which is a little bit of a tail to our margin but.

Eifion Jones: We have a long practice of doing that in the United States, and we're now getting more detailed in those applications. In terms of the progression of our tariff mitigation program, we're well progressed. Nigel, you know we've said that for North American business, we're going to reduce our China exposure from 10% to 3%. 10% to 3%, well progressed. The team is doing a fantastic job getting after that mitigation. We're winning some success, more so than we originally thought. The actual cost to recalibrate the supply chain is coming in a little bit less than we had anticipated, which is a little bit of a tail to our margin. Yes, we're well progressed. I'm very pleased with what we've been able to do there.

Taken a more aggressive position towards our duty refund, uh, timelines. Uh, given the, the pain we're feeling I have felt, uh, on the Tariff charge coming into the business. Um, it it's not necessarily a 1-time benefit, but it did, uh, take a popping Q3 because it was a cumulative, tariff, refund. So, a bit of catch up in the quarter, we will continue to apply for the eligible tariff, refunds that we are entitled to, uh, and we will continue to do that. We have a long practice of doing that uh, in the United States and that we're now getting more details uh in those applications in terms of um

Yes, we're well progressed I'm very pleased with what we've been able to do that.

Global supply chain and operations team deserves props here.

I think laid out a very structured thoughtful.

Approach to it that was really four work streams.

<unk> from supplier negotiations and the impacted regions to some strategic inventory by differ impact in 2025.

Uh, the progression of our tariff, mitigation programs, we're well progressed Nigel, you know, we've said that for North American Business, we're going to reduce our China exposure from 10 to 3 percent, uh, 10 to 3%. We're well progressed. The team is doing a fantastic job. Uh, getting after that mitigation uh, we're winning some success more so than we originally thought. So, the actual cost to recalibrate, the supply chain is coming in a little bit less than we had anticipated.

That obviously has a shelf life to us.

Kevin Maczka: Yeah, I mean our global supply chain and operations team deserves props here. We laid out a very structured, thoughtful approach to it that was really four work streams, ranging from supplier negotiations in the impacted regions to some strategic inventory buy ahead to defer impact in 2025. That obviously has a shelf life to it. Some footprint and supply chain reshoring or movement, and then as I mentioned earlier, some pricing actions in the U.S., which was protecting dollar for dollar. We internally felt we needed to, through our own action, you know, in the future, protect the structural gross margins through internal action. Proud of the progress, more work to be done, but well progressed on this movement from 10% exposure to 3%. As I said, irrespective of future negotiations, we're going to forge ahead.

Some footprint.

In supply chain re shoring or or movement, and then as I mentioned earlier, some pricing actions in the U S, which was which was dollars protecting dollar for dollar, but we internally so we needed to through our own actions.

Which is a little bit of a tail to our margin but uh yes we're well progress and very pleased with what we've been able to do there. Yeah, I mean, I mean our Global supply chain and operations team, you know, deserves props here we I think laid out a very structured thoughtful uh

Approach to it, that was really for work streams.

Great.

In the future protect the structural gross margin through internal actions. So proud of the progress more work to be done, but well progressed on this.

Ranging from supplier negotiations in the impacted regions to some strategic inventory, we were able to plan ahead to defer impact in 2020.

On this movement from 10% exposure to 3% as I said irrespective of future negotiations were going to forge ahead, we believe that shrinking the supply chain.

Shortening the supply chain is the right approach.

Shelf life to it. Uh, some footprint and supply chain, um, reshoring or movement, and then, you know, as I mentioned earlier. So, pricing actions in the U.S., which was dollar protecting dollar for dollar, but we internally felt we needed to, uh, through our own actions.

you know, uh,

And continuing to be more reliant on our U S facilities for U S sales.

in the future. Protect

Okay, that's great color.

And then just a quick a quick crack at the early buy you sound like you're quite pleased with the program.

Margins through internal actions. So, proud of the progress, more work to be done, but well progressed on this

If you could maybe just put a finer point on that are you seeing sort of flattish.

Kevin Maczka: We believe that shrinking the supply chain or shortening the supply chain is the right approach and continuing to be more reliant on our U.S. facilities or U.S. sales.

Participation.

We've seen some modest growth year.

And then when you think about.

Going back in time.

On this movement from 10% exposure to 3%, as I said, irrespective of future negotiations, we're going to forge ahead. We believe that shrinking the supply chain uh or shortening, the supply chain is the right approach.

Is there a correlation between.

And uh, continuing to be more reliant on our us.

Early by strength and what actually transpires in the following year.

[Analyst]: Okay, that's great color. A quick crack at the early buy. You sound like you're quite pleased with the program. If you could maybe just put a finer point, are you seeing sort of flattish year participation? Are we seeing some modest growth here? When you think about going back in time, is there a correlation between early buy strength and what actually transpires in the following year, or is it just reflection of other things? I mean, if we see a strong early buy, does it tend to correlate with a strong following year?

Facilities for us, uh, sales.

Or is it just.

The effects of all the things I mean, if there is any if we see a strong but he bought it tend to correlate with a strong.

Yes.

Yes.

I don't know maybe by asking the question, we can actually ask our B R. B.

To look at that correlation I don't have any general impressions to that question, but it's a good one.

We'll see if we can tackle that hydro maybe I'll follow up with you.

As for early buy.

When we laid out our expectations internally there was in terms of goal setting our objectives setting an ambition for some modest volume in.

Kevin Maczka: Yeah, I don't know. Maybe by asking the question, we can actually ask our BI team to look at that correlation. I don't have any general impressions to that question, but it's a good one and we'll see if we can tackle that, Nigel, and maybe have a follow up with you. As for early buy, when we laid out our expectations internally, there was in terms of goal setting or objectives setting, an ambition for some modest volume in addition to the year over year price. That is in what we laid out with our internal targets. When I say that we feel good about the progress and the participation and where we are with a few days left in it, that would reflect my comments, would reflect some participation from a volume standpoint.

Okay, that's great color. Um and then a quick uh a quick crack at the uh early buy um you sound like you're quite pleased with the the program. Um you know if you could maybe just put a final point in that, you know, are you seeing sort of flattish? Um you you participation are we are we seeing some smallest growth here? Um uh and then when you think about, you know, going back in time um is there a correlation between buy, you know, so early buy strengths and what actually transpires in the following year um or is it just I don't know for affection of other things I mean is is there any if we if we see a strong when he buys a tend to call it with a strong, uh, following year?

In addition to the year over year price, so that is and what we laid out with our with our internal targets. So when I say that we feel good about the progress on our participation and where we are with <unk>.

Yeah, I I I I don't know. Maybe by asking the question we can actually uh, ask our B uh, RBI team to uh, to look at that correlation. I don't have any, uh, General Impressions to that question, but it's a good 1 and

Few days left in it that would reflect my comments would reflect.

Uh, we'll see if we can tackle um, that kyel and maybe have a follow-up with you.

Some participation from a volume standpoint.

That's really encouraging and thanks Kevin.

Sure.

Got it.

Thank you at this time I would like to turn the floor back over to Mr. Holleran for closing comments.

As for, uh, early by, uh, you know, when we laid out our expectations internally, there was, uh, in terms of goal setting or objectives setting, uh, and ambition for some modest volume.

Thank you Donna.

Closing I would like to sincerely, thank our dedicated employees and valued partners around the world.

Hard work passion and unwavering commitment are the driving force behind our success.

And it's much appreciated please contact our team if you have any follow up questions and we look forward to talking to you again on our fourth quarter earnings call. Thanks for thanks for your interest in Hayward Donnie you can now close the call. Thank you.

[Analyst]: That's really encouraging. Thanks, Kevin.

In addition to the year-over-year price. So, that is in what we laid out, uh, with our with our, uh, internal targets. So, when I say that, we feel good about the progress and the participation and where we are with, you know, a few days left in it, uh, that would reflect my comments, would reflect, um, some participation from a volume standpoint.

Kevin Maczka: Sure. Thanks, Kevin.

That's great, and Carson. Thanks, Kevin.

Operator: Thank you. At this time, I'd like to turn the floor back over to Mr. Holleran for closing comments.

Thank you ladies and gentlemen. This concludes today's event you may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

Kevin Holleran: Thank you, Donna. In closing, I'd like to sincerely thank.

Thank you at this time. I'd like to turn the floor back over to Mr. Holleran for closing comments.

Kevin Maczka: Our dedicated employees and valued partners around the world, the hard work, passion, and unwavering commitment are the driving force behind our success and it's much appreciated.

Thank you, Donna. Uh, in closing, I'd like to sincerely thank our dedicated employees and valued Partners around the world.

The hard work, passion, and unwavering commitment are the driving forces behind our success.

Kevin Holleran: Please contact our team if you have any follow up questions, and we look forward to talking to you again.

Kevin Maczka: The fourth quarter earnings call.

Kevin Holleran: Thanks for your interest in Hayward. Adonna.

Kevin Maczka: You can now close the call. Thank you.

Operator: Thank you. Ladies and gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

Uh, and it's much appreciated. Please contact our team if you have any follow-up questions, and we look forward to talking to you again on the Q4 earnings call. Thank you for your interest in Hayward, Donna. You can now close the call.

Thank you, ladies.

and gentlemen, this is

this time and enjoy the rest of your day.

Kevin Maczka: Sam.