Hayward Holdings, Inc. - Quarter Report: 2025 June (Form 10-Q)

Proceeds from issuance of long-term debt Payments of long-term debt()()Proceeds from issuance of short-term notes payable Payments of short-term notes payable()()Debt issuance costs() Purchase of common stock()()Other, net ()Net cash used in financing activities()()Effect of exchange rate changes on cash and cash equivalents ()Change in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period$ $ Supplemental disclosures of cash flow information:Cash paid-interest$ $ Cash paid-income taxes Non-cash investing and financing activities:Accrued and unpaid purchases of property, plant, and equipment$ $ Equipment financed under finance leases

See accompanying notes to the unaudited condensed consolidated financial statements.

Hayward Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

manufacturing facilities worldwide, which are located in North Carolina, Georgia, Tennessee, Rhode Island, Spain (two) and China, and other facilities in the United States, Canada, France and Australia. Cash flow is impacted by the seasonality of the swimming pool business. Cash flow is usually higher in the second and third quarters due to terms of sale to our customers.

We establish actual interim closing dates using a fiscal calendar in which our fiscal quarters end on the Saturday closest to the calendar quarter end, with the exception of year-end, which ends on December 31 of each fiscal year. The interim closing date for the first, second and third quarters of 2025 are March 29, June 28, and September 27, compared to the respective March 30, June 29, and September 28, 2024 dates. We had three fewer working days for the six months ended June 28, 2025 compared to the respective 2024 period.

million in accounts receivable generated by sales to specified customers of the Company. The Company will be paid a discounted purchase price for each receivable sold. The discount rate used to determine the purchase price for the subject receivables is based upon an annual interest rate equal to the forward-looking term rate based on the secured overnight financing rate for the period of time between payment to the Company and the due date for the receivable plus a buffer period specific to the obligor, plus a margin applicable to the specified obligor.

Transactions under this agreement are accounted for as sales of accounts receivable, and the receivables sold are removed from the consolidated balance sheets at the time of the sales transaction. Proceeds received from the sales of accounts receivable are classified as operating cash flows in the consolidated statements of cash flows. We record the discount in the “Other expense, net” line in the consolidated statements of operations. The Company, as the servicer under the Receivables Purchase Agreement, continues to service the accounts receivable sold. sales of accounts receivable occurred during the three months ended June 28, 2025. For the six months ended June 28, 2025, there were proceeds of $ million from the sale of $ million of receivables under the Receivables Purchase Agreement. As of June 28, 2025, of the sold receivables

Hayward Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

million.

$ $ $ Commercial pool Flow control Total$ $ $ $ GeographicUnited States$ $ $ $ Canada Europe Rest of World Total International Total$ $ $ $

Hayward Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

$ Work in progress Finished goods Total$ $

$ Insurance reserve Warranty reserve Employee compensation and benefits Inventory purchases Operating lease liability - short term Freight Accrued Interest Professional fees Payroll taxes Taxes - non income Deferred income Business restructuring costs

Hayward Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Accrual for warranties issued during the period Payments()

Balance at March 30, 2024

Accrual for warranties issued during the period Payments()

Balance at June 29, 2024

Warranty expenses for the three and six months ended June 28, 2025 were $ million and $ million, respectively, and $ million and $ million, respectively, for the three and six months ended June 29, 2024.

% and %, respectively, after discrete items. The change in the Company's effective tax rate was primarily due to return-to-provision adjustments during the prior-year period.

The Company’s effective tax rate for the six months ended June 28, 2025 and June 29, 2024 was % and %, respectively. The change in the Company's effective tax rate was primarily due to return-to-provision adjustments during the prior-year period.

The Company will recognize a tax benefit in the financial statements for an uncertain tax position only if the Company’s assessment is that the position is “more likely than not” (i.e., a likelihood greater than 50 percent) to be allowed by the tax jurisdiction based solely on the technical merits of the position. The term “tax position” refers to a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for financial reporting purposes. There were uncertain tax positions of $ million as of June 28, 2025 and December 31, 2024.

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities and projected future taxable income in making this assessment. Management evaluates the need for valuation allowances on the deferred tax assets according to the provisions of ASC 740, Income Taxes. In making this determination, the Company assesses all available evidence (positive and negative) including recent earnings, internally-prepared income tax projections, and historical financial performance.

Hayward Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

)$ $ $ Interest expense, net

(1) The tax benefit and expense, respectively, on the (loss) gain recognized in AOCI for the three months ended June 28, 2025 and June 29, 2024 was $ million and $ million, respectively.

(2) The tax expense on the gain reclassified from AOCI to earnings for the three months ended June 28, 2025 and June 29, 2024 was $ million and $ million, respectively.

(3) The Company estimates that $ million of unrealized gains will be reclassified from AOCI into earnings in the next twelve months.

Gain (Loss) Recognized in AOCI (1)

Gain (Loss) Reclassified From AOCI to Earnings (2)

Location of Gain (Loss) Reclassified from AOCI into EarningsSix Months EndedSix Months EndedJune 28, 2025June 29, 2024June 28, 2025June 29, 2024Interest rate swaps$()$ $ $ Interest expense, net

(1) The tax benefit and expense, respectively, on the (loss) gain recognized in AOCI for the six months ended June 28, 2025 and June 29, 2024 was $ million and $ million, respectively.

(2) The tax expense on the gain reclassified from AOCI to earnings for the six months ended June 28, 2025 and June 29, 2024 was $ million and $ million, respectively.

Financial and nonfinancial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s financial instruments include cash and cash equivalents, accounts receivable, and accounts payable. The carrying amount of these instruments approximate fair value because of their short-term nature.

The Company’s interest rate swaps and foreign exchange contracts are measured in the financial statements at fair value on a recurring basis. The fair values of these instruments are estimated using industry standard valuation models using market-based observable inputs, including interest rate curves. These instruments are customary, over-the-counter contracts with various bank counterparties. Accordingly, the fair value measurements of the interest rate swaps and foreign exchange contracts are categorized as Level 2.

Hayward Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

$ $ $ $ $ $ $

Foreign exchange contracts

Supplemental Retirement Plan assets

Liabilities:

Interest rate swaps

$ $ $ $ $ $ $ $

Foreign exchange contracts

Supplemental Retirement Plan liabilities

The estimated fair value of the long-term debt and related current maturities (excluding finance leases, the ABL Facility, and other bank debt) is based on observable quoted prices in active markets for similar liabilities and is classified as a Level 2 input. The fair value of the ABL Facility approximates its carrying value.

$ $ $

reportable segments: North America (“NAM”) and Europe & Rest of World (“E&RW”). Operating segments have not been aggregated to form the reportable segments. The Company's CODM is the President and Chief Executive Officer. The Company determined its reportable segments based on how the Company’s Chief Operating Decision Maker (“CODM”) reviews the Company’s operating results in assessing performance and allocating resources. The CODM uses segment income in assessing performance of and allocating resources to the reportable segments. Segment income is defined as net sales less cost of sales, less segment selling, general and administrative expense (“SG&A”) and research development and engineering expense (“RD&E”), excluding acquisition and restructuring related expense, as well as amortization of intangible assets recorded within segment SG&A expense.

The CODM does not evaluate reportable segments using asset information as these are managed on an enterprise-wide basis. The accounting policies of the segments are the same as those of Holdings.

The North America segment manufactures and sells residential and commercial swimming pool equipment and supplies as well as equipment that controls the flow of fluids.

The Europe & Rest of World segment manufactures and sells residential and commercial swimming pool equipment and supplies.

Hayward Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

$ $ $ $ $ Significant Segment ExpensesCost of Sales Segment selling, general and administrative expense Research, development and engineering expense Segment income

Capital expenditures (1)

Depreciation and amortization (1)(2)

Intersegment sales Six Months EndedSix Months EndedJune 28, 2025June 29, 2024North AmericaEurope & Rest of WorldTotalNorth AmericaEurope & Rest of WorldTotalExternal net sales$ $ $ $ $ $ Significant Segment ExpensesCost of Sales Segment selling, general and administrative expense Research, development and engineering expense Segment income

Capital expenditures (1)

Depreciation and amortization (1)(2)

Intersegment sales

(1) Capital expenditures and depreciation associated with Corporate are not included in these totals.

(2) Amortization expense excluded from segment income is not included in these totals.

Hayward Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

$ $ $ Corporate expense, net Acquisition and restructuring related expense Amortization of intangible assets Operating income Interest expense, net Loss on debt extinguishment Other (income) expense, net()()()()Total other expense Income from operations before income taxes$ $ $ $

$ $ $ Weighted average number of common shares outstanding, basic

Effect of dilutive securities(a)

Weighted average number of common shares outstanding, diluted Earnings per share attributable to common stockholders, basic$ $ $ $ Earnings per share attributable to common stockholders, diluted$ $ $ $

million and million, respectively, and for the six months ended June 28, 2025 and June 29, 2024, there were potential common shares totaling approximately million and million,

Hayward Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

million, which amount will be paid entirely by the Company’s insurance carriers pursuant to agreement among the Company and its insurance carriers. Accordingly, the Company has an accrual for a loss contingency of $ million and insurance receivables of $ million, which are recorded within other current assets and accrued expenses and other liabilities on the unaudited condensed consolidated balance sheets, respectively. The Company expects the resolution payment to be made within the next three months.

On August 2, 2023, a securities class action complaint was filed in the United States District Court for the District of New Jersey against the Company and certain of its current directors and officers (Kevin Holleran and Eifion Jones) and MSD Partners, L.P. and CCMP Capital Advisors, LP on behalf of a putative class of stockholders who acquired shares of the Company’s common stock between March 2, 2022 and July 27, 2022. That action is captioned City of Southfield Fire and Police Retirement System vs. Hayward Holdings, Inc., et al., 2:23-cv-04146-WJM-ESK (D.N.J.) (“City of Southfield”). On September 28, 2023, a second, related securities class action complaint was filed in the United States District Court for the District of New Jersey against the Company and certain of its current directors and officers (Kevin Holleran and Eifion Jones) and MSD Partners, L.P. and CCMP Capital Advisors, LP on behalf of a putative class of stockholders who acquired shares of the Company’s common stock between October 27, 2021 and July 28, 2022. That action is captioned Erie County Employees’ Retirement System vs. Hayward Holdings, Inc., et al., 2:23-cv-04146-WJM-ESK (D.N.J.) (“Erie County”). On December 19, 2023, the Court issued a ruling consolidating the securities class actions (City of Southfield and Erie County) under the City of Southfield docket (the “Securities Class Action”) and appointing a lead plaintiff. In a consolidated class action complaint filed March 4, 2024, the lead plaintiff alleged on behalf of a putative class of stockholders who acquired shares of the Company's common stock between October 27, 2021 and July 28, 2022, among other things, that the Company, Kevin Holleran, and Eifion Jones violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, by, among other things, making materially false or misleading statements regarding inventory, growth, and demand trends and the Company’s financial projections for 2022. On October 2, 2024, the Court issued an Opinion and Order dismissing the consolidated class action complaint and granting the lead plaintiff leave to file an amended complaint within days. On November 1, 2024, the lead plaintiff filed a consolidated amended class action complaint making substantially similar allegations as in the consolidated class action complaint, but adding additional defendants affiliated with MSD Partners, L.P. and CCMP Capital Advisors, LP. On December 18, 2024, the Company and all other defendants moved to dismiss the consolidated amended class action complaint. On June 4, 2025, the Court issued an Opinion and Order granting in part and denying in part the motion to dismiss. The Court thereafter ordered the parties to mediation. The case is currently stayed. The Securities Class Action seeks unspecified monetary damages on behalf of a putative class and an award of costs and expenses, including reasonable attorneys’ fees.

On November 27, 2023, a shareholder derivative lawsuit was filed in the United States District Court for the District of New Jersey against current and past officers and directors of the Company captioned Heicklen v. Holleran, et al., 2:23-cv-22649 (D.N.J.) (the “Derivative Action”). The Derivative Action alleges breaches of fiduciary duties to Company stockholders, aiding and abetting breaches of fiduciary duties, unjust enrichment, corporate waste, and violations of Section 10(b) of the Securities Exchange Act of 1934 in connection with the claims in the Securities Class Action. The plaintiff in the Derivative Action seeks recovery of unspecified damages and attorneys' fees and costs, as well as improvements to the Company’s corporate governance and internal procedures. The Derivative Action was stayed pending final decision on the motion to dismiss filed in the Securities Class Action. On July 22, 2025, the Court further stayed the Derivative Action in light of the mediation in the Securities Class Action.

We dispute the allegations of wrongdoing in the Securities Class Action and the Derivative Action and intend to vigorously defend ourselves in these matters. In view of the complexity and ongoing and uncertain nature of the outstanding proceedings and inquiries, at this time we are unable to estimate a reasonably possible financial loss or range of financial loss, if any, that we may incur to resolve the Securities Class Action and the Derivative Action.

Hayward Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Hayward Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

$ $()$ $ Facility-related () Other () Total$ $ $()$ $

Restructuring costs are included within acquisition and restructuring related costs on the Company’s unaudited condensed consolidated statements of operations, while the restructuring liability is included as a component of accrued expenses and other liabilities on the Company’s unaudited condensed consolidated balance sheets.

Acquisitions

On June 26, 2024, the Company acquired the equity interests of ChlorKing HoldCo, LLC and related entities (“ChlorKing”). The acquired business includes pool saline chlorinators and UV disinfection systems serving the commercial pools and water treatment market segments. The acquisition broadens the Company’s commercial portfolio of products and expands the market of commercial customers while furthering the Company's commitment to sustainable and energy-efficient technology for both commercial and residential pools. The acquisition is included in our North America segment.

million. The purchase price was funded with cash on hand. For the three and six months ended June 28, 2025, transaction expenses recognized for the acquisition were $ million and $ million, respectively. These expenses are included within acquisition and restructuring related costs on the Company’s unaudited condensed consolidated statements of operations. The acquisition accounting was complete as of December 31, 2024.

Hayward Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

)$ $()Other comprehensive (loss) income before reclassifications () Amounts reclassified from accumulated other comprehensive income ()()Net current period other comprehensive (loss) income ()()Tax Amounts Balance at March 29, 2025$()$ $()Other comprehensive income before reclassifications () Amounts reclassified from accumulated other comprehensive income ()()Net current period other comprehensive income (loss) () Tax Amounts Balance at June 28, 2025$()$ $()

Cumulative Translation Adjustment

Unrecognized (Losses) Gain on Derivative Instruments for Cash Flow Hedges

Accumulated Other Comprehensive Income, Net of Taxes

Balance at December 31, 2023

()

Other comprehensive income (loss) before reclassifications

()

Amounts reclassified from accumulated other comprehensive income

()

Net current period other comprehensive income (loss)

()

Tax Amounts

()

Balance at March 30, 2024

()

Other comprehensive income before reclassifications

()

Amounts reclassified from accumulated other comprehensive income

()

Net current period other comprehensive income (loss)

()

Tax Amounts

Balance at June 29, 2024

()

Hayward Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

million of its common stock with such authority expiring on July 28, 2028. Repurchases under the share repurchase program will be funded by cash on hand and cash generated from operations and may be made, from time to time, in amounts and at prices the Company deems appropriate and will be subject to a variety of factors, including the market price of the Company’s common stock, general market and economic conditions, applicable legal requirements and other considerations. The share repurchase program is expected to be conducted through open market repurchases, privately negotiated transactions or other means, including through Rule 10b5-1(c) trading plans or through the use of other techniques such as accelerated share repurchases. The share repurchase program does not obligate the Company to acquire any particular amount of its common stock, and may be suspended, modified or discontinued at any time at the Company’s discretion without prior notice.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical financial information, this discussion and analysis includes forward-looking statements that reflect our plans, estimates and beliefs and involve risks and uncertainties. As a result of many factors, including those set forth in the section “Special Note Regarding Forward-looking Statements” in this Quarterly Report on Form 10-Q, our actual results may differ materially from those contained in or implied by any forward-looking statements. The results of operations for the three and six months ended June 28, 2025 are not necessarily indicative of the results for any subsequent periods or the entire fiscal year ending December 31, 2025.

Our Company

The Company is a leading global designer and manufacturer of pool and outdoor living technology. With the pool as the centerpiece of the growing outdoor living space, the pool industry has attractive market characteristics, including significant aftermarket requirements (such as the ongoing repair, replacement, remodeling and upgrading of equipment for existing pools), innovation-led growth opportunities, and a favorable industry structure. We are a leader in this market with a highly-recognized brand, one of the largest installed bases of pool equipment in the world, decades-long relationships with our key channel partners and trade customers and a history of technological innovation. Our engineered products, which include various energy efficient and more environmentally sustainable offerings, enhance the pool owner’s outdoor living lifestyle while also delivering high quality water, pleasant ambiance and ease of use for the ultimate backyard experience. Aftermarket replacements and upgrades to higher value Internet of Things and energy efficient models are a primary growth driver for our business.

We have an estimated North American residential pool market share of approximately 33%. We believe that we are well-positioned for future growth. We estimate aftermarket sales represent approximately 85% of North American residential pool net sales and are generally recurring in nature since these products are critical to the ongoing operation of pools given requirements for water quality and sanitization. Our product replacement cycle of approximately 8 to 11 years drives multiple replacement opportunities over the typical life of a pool, creating opportunities to generate aftermarket product sales as pool owners repair, remodel and upgrade their pools. We estimate aftermarket sales based upon feedback from certain representative customers and management’s interpretation of available industry and government data, and not upon our GAAP net sales results.

The Company has seven manufacturing facilities worldwide, which are located in North Carolina, Georgia, Tennessee, Rhode Island, Spain (two) and China, and other facilities in the United States, Canada, France and Australia.

Segments

Our business is organized into two reportable segments: North America (“NAM”) and Europe & Rest of World (“E&RW”). The Company determined its reportable segments based on how the Chief Operating Decision Maker (“CODM”) reviews the Company’s operating results in assessing performance and allocating resources.

The NAM segment manufactures and sells a complete line of residential and commercial swimming pool equipment and supplies in the United States and Canada, and manufactures and sells flow control products.

The E&RW segment manufactures and sells residential and commercial swimming pool equipment and supplies in Europe, Central and South America, the Middle East, Australia and other Asia Pacific countries.

NAM accounted for 85% of total net sales for each of the three months ended June 28, 2025 and June 29, 2024, and E&RW accounted for 15% of total net sales for each of the three months ended June 28, 2025 and June 29, 2024.

NAM accounted for 84% and 83% of total net sales for the six months ended June 28, 2025 and June 29, 2024, respectively, and E&RW accounted for 16% and 17% of total net sales for the six months ended June 28, 2025 and June 29, 2024, respectively.

Factors Affecting the Comparability of our Results of Operations

Our results of operations for the three and six months ended June 28, 2025 and the three and six months ended June 29, 2024 have been affected by the following, among other events, which must be understood to assess the comparability of our period-to-period financial performance and condition.

Our fiscal quarters end on the Saturday closest to the calendar quarter end, with the exception of year end which ends on December 31 of each fiscal year. The interim closing date for the first, second and third quarters of 2025 are March 29, June 28, and September 27, compared to the respective March 30, June 29, and September 28, 2024 date. This resulted in three fewer working days for the six months ended June 28, 2025 compared to the respective 2024 period.

Seasonality

Our business is seasonal, with sales typically higher in the second and fourth quarters. During the second quarter, sales are higher in anticipation of the start of the summer pool season, and in the fourth quarter, we incentivize trade customers to buy and stock in preparation for next year’s pool season under an “Early Buy” program, which features a price discount and extended payment terms. Shipments for the 2024 Early Buy program began in the late third quarter and continued through approximately the first quarter of 2025. The favorable payment terms extended as part of the Early Buy program generally do not exceed 180 days. We aim to keep our manufacturing plants running at a constant level throughout the year and consequently we typically build inventory in the first and third quarters, and inventory is sold-down in the second and fourth quarters. Our accounts receivable balance increases from September to April as a result of the Early Buy extended terms. Also, because the majority of our sales are to distributors whose inventory of our products may vary, including due to reasons beyond our control, such as end-user demand, supply chain lead times and macroeconomic factors, our revenue may fluctuate from period to period.

Tariffs, Trade Restrictions and Other Geopolitical Events

The imposition of, and threat of imposition of, tariffs and other trade restrictions by the United States government in 2025, and tariffs and other trade restrictions announced by governments of other nations in response to these actions, have created substantial uncertainty in the global economy. This uncertainty, as well as the direct impact of these tariffs and other trade restrictions, may adversely affect the Company’s business by reducing market demand for the Company’s products, increasing the Company’s supply costs that cannot be passed on to customers and/or adversely affecting the competitiveness of the Company’s products against those of manufacturers not subject to such tariffs and trade restrictions. Geopolitical conflicts around the world have also created substantial uncertainty in the global economy, including as a result of sanctions and penalties imposed in response to these conflicts. In particular, armed conflicts in the Middle East and in Ukraine and Russia have adversely affected market demand in the Middle East and Asia, which has negatively impacted our results in our E&RW segment. See “—Segment—Europe & Rest of World (“E&RW”),” below. Given the nature of our business and global operations, if these or other geopolitical conflicts continue or worsen, our business and results of operations may be adversely affected.

Key Measures We Use to Evaluate Our Business

We consider a variety of financial and operating measures in assessing the performance of our business. The key GAAP measures we use are net sales, gross profit and gross profit margin, selling, general, and administrative expense (“SG&A”), research, development, and engineering expense (“RD&E”), operating income and operating income margin. The key non-GAAP measures we use are EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted segment income, and adjusted segment income margin.

For information about our use of Non-GAAP measures and a reconciliation of these metrics to the most relevant GAAP measure see “—Non-GAAP Reconciliation.”

Results of Operations

Consolidated

The following tables summarize key components of our results of operations for the periods indicated. We derived the consolidated statements of operations for the three and six months ended June 28, 2025 and June 29, 2024 from our unaudited condensed consolidated financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future. The following table summarizes our results of operations:


(In thousands)	Three Months Ended				Six Months Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Net sales	$	299,603	$	284,393	$	528,444	$	496,962
Cost of sales	141,764		139,306		257,230		247,296
Gross profit	157,839		145,087		271,214		249,666
Selling, general and administrative expense	71,893		63,155		137,010		123,169
Research, development and engineering expense	6,128		6,119		12,114		12,421
Acquisition and restructuring related expense	1,565		839		3,491		1,343
Amortization of intangible assets	6,870		6,949		13,705		13,849
Operating income	71,383		68,025		104,894		98,884
Interest expense, net	13,650		16,799		27,301		35,391
Loss on debt extinguishment	—		4,926		—		4,926
Other expense (income), net	(1,706)		(646)		(527)		(1,284)
Total other expense	11,944		21,079		26,774		39,033
Income from operations before income taxes	59,439		46,946		78,120		59,851
Provision for income taxes	14,640		9,365		18,988		12,430
Net income	$	44,799	$	37,581	$	59,132	$	47,421
Adjusted EBITDA (a)	$	88,236	$	82,614	$	137,338	$	127,655

(a) See “—Non-GAAP Reconciliation.”

Net sales

Net sales increased to $299.6 million for the three months ended June 28, 2025 from $284.4 million for the three months ended June 29, 2024, an increase of $15.2 million, or 5.3%. See the segment discussion below for further information.

Net sales increased to $528.4 million for the six months ended June 28, 2025 from $497.0 million for the six months ended June 29, 2024, an increase of $31.4 million, or 6.3%. See the segment discussion below for further information.

The year-over-year net sales increase was driven by the following:


	Three Months Ended		Six Months Ended
	June 28, 2025		June 28, 2025
Price, net of discounts and allowances	5.3	%	4.1	%
Volume	(2.5)	%	0.1	%
Acquisitions	2.1	%	2.3	%
Currency and other	0.4	%	(0.2)	%
Total	5.3	%	6.3	%

The net sales increase for the three months ended June 28, 2025 was driven by positive net price to offset inflation and tariffs, the favorable impact from acquisitions and foreign currency translation, partially offset by a decline in volume. The decline in volume was driven by the timing of orders in the 2025 season.

The net sales increase for the six months ended June 28, 2025 was driven by positive net price to offset inflation and tariffs and the favorable impact from acquisitions, while volume and the impact from foreign currency translation remained relatively flat.

Gross profit and gross profit margin

Gross profit increased to $157.8 million for the three months ended June 28, 2025 from $145.1 million for the three months ended June 29, 2024, an increase of $12.7 million, or 8.8%.

Gross profit margin increased to 52.7% for the three months ended June 28, 2025 compared to 51.0% for the three months ended June 29, 2024, an increase of 170 basis points, due to positive net price impact and operational efficiencies.

Gross profit increased to $271.2 million for the six months ended June 28, 2025 from $249.7 million for the six months ended June 29, 2024, an increase of $21.5 million, or 8.6%.

Gross profit margin increased to 51.3% for the six months ended June 28, 2025 compared to 50.2% for the six months ended June 29, 2024, an increase of 110 basis points, primarily due to positive net price impact and operational efficiencies.

Selling, general, and administrative expense

Selling, general, and administrative expense (SG&A) increased to $71.9 million for the three months ended June 28, 2025 from $63.2 million for the three months ended June 29, 2024, an increase of $8.7 million, or 13.8%, primarily due to higher salary costs driven by wage inflation and investments in our selling and customer care teams, and higher incentive compensation, partially offset by decreased warranty costs.

As a percentage of net sales, SG&A increased to 24.0% for the three months ended June 28, 2025 as compared to 22.2% for the three months ended June 29, 2024, an increase of 180 basis points, driven by the factors discussed above.

SG&A increased to $137.0 million for the six months ended June 28, 2025 from $123.2 million for the six months ended June 29, 2024, an increase of $13.8 million, or 11.2%, driven by higher salary costs related to wage inflation and investments in our selling and customer care teams and higher incentive compensation expense, partially offset by decreased warranty costs.

As a percentage of net sales, SG&A increased to 25.9% for the six months ended June 28, 2025 as compared to 24.8% for six months ended June 29, 2024, an increase of 110 basis points, due to the factors discussed above.

Research, development, and engineering expense

Research, development, and engineering expense (RD&E) remained flat at $6.1 million for the three months ended June 28, 2025 compared to the three months ended June 29, 2024. RD&E spend continues to be focused on new product development and new product quality.

As a percentage of net sales, RD&E was 2.0% for the three months ended June 28, 2025, compared to 2.2% for the three months ended June 29, 2024.

RD&E decreased modestly to $12.1 million for the six months ended June 28, 2025 compared with $12.4 million for the six months ended June 29, 2024. As a percentage of net sales, RD&E was 2.3% for the six months ended June 28, 2025 compared to 2.5% for the six months ended June 29, 2024, a decrease of 20 basis points.

Acquisition and restructuring related expense

For the three months ended June 28, 2025, we incurred $1.6 million of acquisition and restructuring-related expense as compared to $0.8 million of expense for the three months ended June 29, 2024. The expense in the three months ended June 28, 2025 was primarily driven by costs associated with the acquisition of ChlorKing HoldCo, LLC and related entities (“ChlorKing”), including the deferred purchase price recognized as compensation cost over the twelve-month service period from the date of acquisition, compared to the three months ended June 29, 2024 which also primarily related to costs associated with the acquisition of ChlorKing.

For the six months ended June 28, 2025, we incurred $3.5 million of acquisition and restructuring-related expense as compared to $1.3 million of expense for the six months ended June 29, 2024. The six months ended June 28, 2025 primarily included costs associated with the acquisition of the ChlorKing business, including the deferred purchase price recognized as compensation cost over the twelve-month service period from the date of acquisition. The acquisition and restructuring-related expenses in the six months ended June 29, 2024 primarily included costs associated with the centralization and consolidation of operations in Europe and costs related to the acquisition of the ChlorKing business.

See Note 16. Acquisitions and Restructuring.

Amortization of intangible assets

For the three months ended June 28, 2025, amortization of intangible assets decreased by $0.1 million compared to the three months ended June 29, 2024 due to the amortization pattern of certain intangible asset classes based on the declining

balance method, partially offset by additional amortization expense associated with intangible assets acquired as part the ChlorKing acquisition.

For the six months ended June 28, 2025, amortization of intangible assets decreased $0.1 million compared to the six months ended June 29, 2024 due to the amortization pattern of certain intangible asset classes based on the declining balance method, partially offset by additional amortization expense associated with intangible assets acquired as part the ChlorKing acquisition.

Operating income

For the three and six months ended June 28, 2025, operating income increased $3.4 million and $6.0 million, respectively, due to the aggregated effect of the items described above.

Interest expense, net

Interest expense, net, decreased to $13.7 million for the three months ended June 28, 2025 from $16.8 million for the three months ended June 29, 2024.

Interest expense, net, for the three months ended June 28, 2025 consisted of $15.1 million of interest expense on the outstanding debt and $1.1 million of amortization of deferred financing fees, partially offset by $2.5 million of interest income on cash deposits. The effective interest rate on our borrowings, including the impact of an interest rate hedge, was 6.52% for the three months ended June 28, 2025.

Interest expense, net, for the three months ended June 29, 2024 consisted of $17.3 million of interest expense on the outstanding debt and $1.1 million of amortization of deferred financing fees, partially offset by $1.6 million of interest income on cash deposits. The effective interest rate on our borrowings, including the impact of an interest rate hedge, was 7.16% for the three months ended June 29, 2024.

Interest expense, net, decreased by $3.1 million for the three months ended June 28, 2025 compared to the three months ended June 29, 2024, primarily due to lower interest rates, reduced debt as a result of the repayment of the Incremental Term Loan B principal balance in April 2024 and increased interest income on cash deposits.

For the six months ended June 28, 2025, interest expense, net, decreased to $27.3 million from $35.4 million for the six months ended June 29, 2024.

Interest expense, net, for the six months ended June 28, 2025 consisted of $29.4 million of interest on the outstanding debt and $1.9 million of amortization of deferred financing fees, partially offset by $4.0 million of interest income. The effective interest rate on our borrowings, including the impact of an interest rate hedge, was 6.41% for the six months ended June 28, 2025.

Interest expense, net, for the six months ended June 29, 2024 consisted of $36.4 million of interest on the outstanding debt and $2.3 million of amortization of deferred financing fees, partially offset by $3.3 million of interest income. The effective interest rate on our borrowings, including the impact of an interest rate hedge, was 7.25% for the six months ended June 29, 2024.

Interest expense, net, decreased by $8.1 million for the six months ended June 28, 2025 compared to the prior year period, primarily due to lower interest rates, the repayment of the Incremental Term Loan B principal balance and increased interest income on cash investment balances.

Loss on extinguishment of debt

There was no loss on extinguishment of debt for the three and six months ended June 28, 2025. The $4.9 million loss on extinguishment of debt for the three and six months ended June 29, 2024 was incurred as a result of the voluntary repayment of the Incremental Term Loan B principal balance in April 2024.

Provision for income taxes

We incurred income tax expense of $14.6 million for the three months ended June 28, 2025. compared to income tax expense of $9.4 million for the three months ended June 29, 2024, an increase of $5.2 million, or 56.3%.

The increase in the Company’s effective tax rate from 19.9% for the three months ended June 29, 2024 to 24.6% for the three months ended June 28, 2025 was primarily due to return-to-provision adjustments during the prior-year period.

We incurred income tax expense of $19.0 million for the six months ended June 28, 2025, compared to income tax expense of $12.4 million for the six months ended June 29, 2024, an increase of $6.6 million, or 52.8%.

The increase in the Company’s effective tax rate from 20.8% for the six months ended June 29, 2024 to 24.3% for the six months ended June 28, 2025 was primarily due to return-to-provision adjustments during the prior-year period.

Net income and net income margin

As a result of the foregoing, net income increased $7.2 million and $11.7 million, respectively, for the three and six months ended June 28, 2025.

Net income margin increased to 15.0% for the three months ended June 28, 2025 compared to 13.2% for the three months ended June 29, 2024, an increase of 180 basis points.

Net income margin increased to 11.2% for the six months ended June 28, 2025 compared to 9.5% for the six months ended June 29, 2024, an increase of 170 basis points.

Adjusted EBITDA and Adjusted EBITDA margin

Adjusted EBITDA increased to $88.2 million for the three months ended June 28, 2025 from $82.6 million for the three months ended June 29, 2024, an increase of $5.6 million, or 6.8%, driven primarily by increased net sales and higher gross profit, partially offset by an increase in SG&A expense.

Adjusted EBITDA margin increased to 29.5% for the three months ended June 28, 2025 compared to 29.0% for the three months ended June 29, 2024, an increase of 50 basis points.

Adjusted EBITDA increased to $137.3 million for the six months ended June 28, 2025 from $127.7 million for the six months ended June 29, 2024, an increase of $9.6 million, or 7.6%, driven primarily by increased net sales and higher gross profit, partially offset by an increase in SG&A expense.

Adjusted EBITDA margin increased to 26.0% for the six months ended June 28, 2025 compared to 25.7% for the six months ended June 29, 2024, an increase of 30 basis points, due to the factors described above.

See “— Non-GAAP Reconciliation” for a reconciliation of adjusted EBITDA and adjusted EBITDA margin to the most directly comparable GAAP metric.

Segment

The Company manages its business primarily on a geographic basis. The Company’s reportable segments consist of NAM and E&RW. We evaluate performance based on net sales, gross profit, segment income and adjusted segment income, and we use gross profit margin, segment income margin and adjusted segment income margin as comparable performance measures for our reporting segments.

Segment income represents segment net sales less cost of sales, segment SG&A and RD&E, excluding acquisition and restructuring related expense as well as amortization of intangible assets. A reconciliation of segment income to our operating income is detailed below. Adjusted segment income represents segment income adjusted for the impact of depreciation, amortization of intangible assets recorded within cost of sales, stock-based compensation and certain non-cash, nonrecurring or other items that are included in segment income that we do not consider indicative of the ongoing segment operating performance. See “—Non-GAAP Reconciliation” for a reconciliation of these metrics to the most directly comparable GAAP metric.

North America (“NAM”)


(Dollars in thousands)	Three Months Ended						Six Months Ended
Net sales	$	255,175		$	241,113		$	442,244		$	414,542
Gross profit	$	140,558		$	127,430		$	239,297		$	217,307
Gross profit margin %	55.1		%	52.9		%	54.1		%	52.4		%
Segment income	$	83,374		$	75,335		$	126,828		$	115,077
Segment income margin %	32.7		%	31.2		%	28.7		%	27.8		%
Adjusted segment income (a)	$	89,070		$	81,274		$	139,727		$	126,577
Adjusted segment income margin % (a)	34.9		%	33.7		%	31.6		%	30.5		%

(a) See “—Non-GAAP Reconciliation.”

Net sales

Net sales increased to $255.2 million for the three months ended June 28, 2025 from $241.1 million for the three months ended June 29, 2024, an increase of $14.1 million, or 5.8%.

Net sales increased to $442.2 million for the six months ended June 28, 2025 from $414.5 million for the six months ended June 29, 2024, an increase of $27.7 million, or 6.7%.

The year-over-year net sales increase was driven by the following factors:


	Three Months Ended		Six Months Ended
	June 28, 2025		June 28, 2025
Price, net of allowances and discounts	6.1	%	4.7	%
Volume	(2.7)	%	(0.6)	%
Acquisitions	2.5	%	2.8	%
Currency and other	(0.1)	%	(0.2)	%
Total	5.8	%	6.7	%

The net sales increase for the three months ended June 28, 2025 was driven by positive net price to offset inflation and tariffs, and the acquisition and successful integration of the ChlorKing business, partially offset by a decline in volume due to the timing of orders in the 2025 season.

The net sales increase for the six months ended June 28, 2025 was driven primarily by positive net price to offset inflation and tariffs, and the acquisition and successful integration of the ChlorKing business, partially offset by a modest decline in volume.

Gross profit and gross profit margin

Gross profit increased to $140.6 million for the three months ended June 28, 2025 from $127.4 million for the three months ended June 29, 2024, an increase of $13.2 million, or 10.3%.

Gross profit margin increased to 55.1% for the three months ended June 28, 2025 from 52.9% for the three months ended June 29, 2024, an increase of 220 basis points. Gross margin increased due to net price increases, including normalized allowances and discounts and operational efficiencies in our manufacturing facilities.

Gross profit increased to $239.3 million for the six months ended June 28, 2025 from $217.3 million for the six months ended June 29, 2024, an increase of $22.0 million, or 10.1%.

Gross profit margin increased to 54.1% for the six months ended June 28, 2025 from 52.4% for the six months ended June 29, 2024, an increase of 170 basis points. Gross margin increased due to positive net price impact and operational efficiencies in our manufacturing facilities.

Segment income and segment income margin

Segment income increased to $83.4 million for the three months ended June 28, 2025 from $75.3 million for the three months ended June 29, 2024, an increase of $8.1 million, or 10.7%. This was primarily driven by an increase in net sales and gross profit as discussed above, partially offset by an increase in SG&A due to higher salary costs driven by wage inflation and investments in our selling and customer care teams, and higher incentive compensation, partially offset by decreased warranty costs.

Segment income margin increased to 32.7% for the three months ended June 28, 2025 from 31.2% for the three months ended June 29, 2024, an increase of 150 basis points. The increase was driven by the same factors discussed above in segment income.

Segment income increased to $126.8 million for the six months ended June 28, 2025 from $115.1 million for the six months ended June 29, 2024, an increase of $11.7 million, or 10.2%. This was primarily attributable to the increase in net sales and gross profit as discussed above, partially offset by higher SG&A expense due to higher salary costs driven by wage inflation and investments in our selling and customer care teams, and higher incentive compensation, partially offset by decreased warranty costs.

Segment income margin increased to 28.7% for the six months ended June 28, 2025 from 27.8% for the six months ended June 29, 2024, an increase of 90 basis points. The increase was driven by the same factors as the increase in segment income discussed above.

Adjusted segment income and Adjusted segment income margin

Adjusted segment income increased to $89.1 million for the three months ended June 28, 2025 from $81.3 million for the three months ended June 29, 2024, an increase of $7.8 million, or 9.6%. This was driven by the increase in segment income as discussed above, after adjusting for the non-cash and specified costs discussed below in “— Non-GAAP Reconciliation.”

Adjusted segment income margin increased to 34.9% for the three months ended June 28, 2025 from 33.7% for the three months ended June 29, 2024, an increase of 120 basis points.

Adjusted segment income increased to $139.7 million for the six months ended June 28, 2025 from $126.6 million for the six months ended June 29, 2024, an increase of $13.1 million or 10.4%. This was driven by the increased segment income as discussed above, after adjusting for the non-cash and specified costs discussed below in “— Non-GAAP Reconciliation.”

Adjusted segment income margin increased to 31.6% for the six months ended June 28, 2025 from 30.5% for the six months ended June 29, 2024, an increase of 110 basis points.

Refer to “—Non-GAAP Reconciliation” for a reconciliation of segment income to adjusted segment income.

Europe & Rest of World (“E&RW”)


(Dollars in thousands)	Three Months Ended						Six Months Ended
Net sales	$	44,428		$	43,280		$	86,200		$	82,420
Gross profit	$	17,281		$	17,657		$	31,917		$	32,359
Gross profit margin %	38.9		%	40.8		%	37.0		%	39.3		%
Segment income	$	7,589		$	8,289		$	14,127		$	14,325
Segment income margin %	17.1		%	19.2		%	16.4		%	17.4		%
Adjusted segment income (a)	$	8,028		$	8,552		$	14,980		$	14,855
Adjusted segment income margin % (a)	18.1		%	19.8		%	17.4		%	18.0		%

(a) See “—Non-GAAP Reconciliation.”

Net sales

Net sales increased to $44.4 million for the three months ended June 28, 2025 from $43.3 million for the three months ended June 29, 2024, an increase of $1.1 million, or 2.7%.

Net sales increased to $86.2 million for the six months ended June 28, 2025 from $82.4 million for the six months ended June 29, 2024, an increase of $3.8 million, or 4.6%.

The year-over-year net sales increase was driven by the following:


	Three Months Ended		Six Months Ended
	June 28, 2025		June 28, 2025
Price, net of allowances and discounts	0.7	%	0.9	%
Volume	(1.0)	%	3.3	%
Currency and other	3.0	%	0.4	%
Total	2.7	%	4.6	%

The net sales increase for the three months ended June 28, 2025 was primarily due to the favorable impact of foreign currency translation and positive net price, partially offset by a decline in volume. The decline in volume is due to the timing of orders during the 2024 season.

The net sales increase for the six months ended June 28, 2025 was primarily due to growth in volume, positive net price to offset inflation and a favorable impact from foreign currency translation. The volume growth was driven by improved market conditions in the Middle East, Asia and Europe compared to the prior-year period.

Gross profit and Gross profit margin

Gross profit decreased to $17.3 million for the three months ended June 28, 2025 from $17.7 million for the three months ended June 29, 2024, a decrease of $0.4 million, or 2.1%.

Gross profit margin decreased to 38.9% for the three months ended June 28, 2025 from 40.8% for the three months ended June 29, 2024, a decrease of 190 basis points, primarily driven by unfavorable mix and higher manufacturing costs, partially offset by higher net price.

Gross profit decreased to $31.9 million for the six months ended June 28, 2025 from $32.4 million for the six months ended June 29, 2024, a decrease of $0.5 million, or 1.4%.

Gross profit margin decreased to 37.0% for the six months ended June 28, 2025 from 39.3% for the six months ended June 29, 2024, a decrease of 230 basis points, primarily driven by unfavorable mix and higher manufacturing costs, partially offset by positive net price impact.

Segment income and Segment income margins

Segment income decreased to $7.6 million for the three months ended June 28, 2025 from $8.3 million for the three months ended June 29, 2024, a decrease of $0.7 million, or 8.4%. This was primarily driven by a decrease in gross profit as discussed above.

Segment income margin decreased by 210 basis points from 19.2% for the three months ended June 29, 2024 to 17.1% for the three months ended June 28, 2025, resulting from a decrease in gross profit.

Segment income decreased to $14.1 million for the six months ended June 28, 2025 from $14.3 million for the six months ended June 29, 2024, a decrease of $0.2 million, or 1.4%. This was driven by the factors discussed above.

Segment income margin decreased by 100 basis points, to 16.4% for the six months ended June 28, 2025, as compared to 17.4% for the six months ended June 29, 2024.

Adjusted segment income and Adjusted segment income margin

Adjusted segment income decreased to $8.0 million for the three months ended June 28, 2025 from $8.6 million for the three months ended June 29, 2024, a decrease of $0.6 million or 6.1%. This was primarily driven by the decrease in gross profit after adjusting for the non-cash and specified costs described in “—Non-GAAP Reconciliation” below.

Adjusted segment income margin decreased to 18.1% for the three months ended June 28, 2025 from 19.8% for the three months ended June 29, 2024, a decrease of 170 basis points.

Adjusted segment income increased to $15.0 million for the six months ended June 28, 2025 from $14.9 million for the six months ended June 29, 2024, an increase of $0.1 million or 0.8%. This was primarily driven by the increase in net sales, partially offset by the impact of unfavorable mix in gross profit as discussed above, after adjusting for the non-cash and specified costs described in “—Non-GAAP Reconciliation” below.

Adjusted segment income margin decreased to 17.4% for the six months ended June 28, 2025 from 18.0% for the six months ended June 29, 2024, a decrease of 60 basis points.

Refer to “—Non-GAAP Reconciliation” for a reconciliation of segment income to adjusted segment income.

Non-GAAP Reconciliation

The Company uses EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted segment income and adjusted segment income margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies. These metrics are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures.

EBITDA is defined as earnings before interest (including amortization of debt costs), income taxes, depreciation, and amortization. Adjusted EBITDA is defined as EBITDA adjusted for the impact of restructuring related income or expenses, stock-based compensation, currency exchange items, and certain non-cash, nonrecurring, or other items that are included in net income and EBITDA that we do not consider indicative of our ongoing operating performance. Adjusted EBITDA margin is defined as adjusted EBITDA divided by net sales. Adjusted segment income is defined as segment income adjusted for the impact of depreciation, amortization of intangible assets recorded within cost of sales, stock-based compensation and certain non-cash, nonrecurring or other items that are included in segment income that we do not consider indicative of the ongoing segment operating performance. Adjusted segment income margin is defined as adjusted segment income divided by segment net sales.

EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted segment income and adjusted segment income margin are not recognized measures of financial performance under GAAP. We believe these non-GAAP measures provide analysts, investors and other interested parties with additional insight into the underlying trends of our business and assist these parties in analyzing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, which allows for a better comparison against historical results and expectations for future performance. Management uses these non-GAAP measures to understand and compare operating results across reporting periods for various purposes including internal budgeting and forecasting, short and long-term operating planning, employee incentive compensation, and debt compliance. These non-GAAP measures are not intended to replace the presentation of our financial results in accordance with GAAP.

EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted segment income and adjusted segment income margin are not calculated in the same manner by all companies, and accordingly, are not necessarily comparable to similarly titled measures of other companies and may not be an appropriate measure for performance relative to other companies. EBITDA, adjusted EBITDA, adjusted segment income should not be construed as indicators of a company’s operating performance in isolation from, or as a substitute for, net income (loss) and segment income which are prepared in accordance with GAAP. We have presented EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted segment income and adjusted segment income margin solely as supplemental disclosure because we believe it allows for a more complete analysis of results of operations. In the future we may incur expenses such as those added back to calculate adjusted EBITDA. Our presentation of adjusted EBITDA and adjusted segment income should not be construed as an inference that our future results will be unaffected by these items.

Net Income to Adjusted EBITDA and Adjusted EBITDA Margin

Following is a reconciliation from net income to adjusted EBITDA and adjusted EBITDA margin for the three and six months ended June 28, 2025 and June 29, 2024:


(Dollars in thousands)	Three Months Ended						Six Months Ended
Net income	$	44,799		$	37,581		$	59,132		$	47,421
Depreciation	5,254			4,757			11,517			9,067
Amortization	8,631			8,503			17,166			17,046
Interest expense, net	13,650			16,799			27,301			35,391
Income taxes	14,640			9,365			18,988			12,430
Loss on debt extinguishment	—			4,926			—			4,926
EBITDA	86,974			81,931			134,104			126,281
Stock-based compensation (a)	11			230			57			420

Currency exchange items (b)	778			(180)			772			(126)
Acquisition and restructuring related expense, net (c)	1,565			839			3,491			1,343
Other (d)	(1,092)			(206)			(1,086)			(263)
Total Adjustments	1,262			683			3,234			1,374
Adjusted EBITDA	$	88,236		$	82,614		$	137,338		$	127,655

Net income margin	15.0		%	13.2		%	11.2		%	9.5		%
Adjusted EBITDA margin	29.5		%	29.0		%	26.0		%	25.7		%


(a)						Represents non-cash stock-based compensation expense related to equity awards issued to management, employees, and directors. The adjustment includes only expense related to awards issued under the 2017 Equity Incentive Plan, which were awards granted prior to the effective date of Hayward’s initial public offering (the “IPO”).
(b)						Represents unrealized non-cash (gains) losses on foreign denominated monetary assets and liabilities and foreign currency contracts.
(c)						Adjustments in the three months ended June 28, 2025 are primarily driven by $1.5 million of transaction and integration costs associated with the acquisition of ChlorKing and $0.2 million of termination benefits related to a reduction-in-force within E&RW, partially offset by a reduction in expense of $0.2 million to finalize the relocation of the Company's corporate office functions to Charlotte, North Carolina from Berkeley Heights, New Jersey. Adjustments in the three months ended June 29, 2024 are primarily driven by $0.6 million of transaction costs associated with the acquisition of the ChlorKing business and $0.3 million of separation and other costs associated with the centralization of operations in Europe. Adjustments in the six months ended June 28, 2025 are primarily driven by $3.3 million of transaction and integration costs associated with the acquisition of the ChlorKing business, $0.2 million of separation costs for the consolidation of operations in North America and $0.2 million of termination benefits related to a reduction-in-force within E&RW, partially offset by a reduction in expense of $0.2 million to finalize the relocation of the Company's corporate office functions to Charlotte, North Carolina from Berkeley Heights, New Jersey. Adjustments in the six months ended June 29, 2024 are primarily driven by $0.7 million of separation and other costs associated with the centralization of operations in Europe and $0.6 million of transaction costs associated with the acquisition of ChlorKing.
(d)						Adjustments in the three months ended June 28, 2025 primarily include $1.1 million of income from insurance proceeds related to flood damage associated with a hurricane at a contract manufacturing facility. Adjustments in the three months ended June 29, 2024 are primarily driven by $0.5 million of gains on the sale of assets, partially offset by $0.2 million of costs incurred related to litigation. Adjustments in the six months ended June 28, 2025 primarily include $1.1 million of income from insurance proceeds related to flood damage associated with a hurricane at a contract manufacturing facility. Adjustments in the six months ended June 29, 2024 are primarily driven by $0.5 million of gains on the sale of assets, partially offset by $0.3 million of costs incurred related to litigation.

Following is a reconciliation from segment income to adjusted segment income for NAM for the three and six months ended June 28, 2025 and June 29, 2024 (dollars in thousands):


NAM	Three Months Ended						Six Months Ended
	June 28, 2025			June 29, 2024			June 28, 2025			June 29, 2024
Segment income	$	83,374		$	75,335		$	126,828		$	115,077
Depreciation	4,448			4,328			9,948			8,215
Amortization	1,761			1,554			3,461			3,197
Stock-based compensation	—			57			—			69


Other (a)	(513)			—			(510)			19
Total adjustments	5,696			5,939			12,899			11,500
Adjusted segment income	$	89,070		$	81,274		$	139,727		$	126,577

Segment income margin	32.7		%	31.2		%	28.7		%	27.8		%
Adjusted segment income margin	34.9		%	33.7		%	31.6		%	30.5		%


(a)						The three months ended June 28, 2025 primarily includes $0.5 million of income from insurance proceeds related to flood damage associated with a hurricane at a contract manufacturing facility.

						The six months ended June 28, 2025 primarily includes $0.5 million of income from insurance proceeds related to flood damage associated with a hurricane at a contract manufacturing facility. The six months ended June 29, 2024 represents losses on the sale of assets.

Following is a reconciliation from segment income to adjusted segment income for E&RW for the three and six months ended June 28, 2025 and June 29, 2024 (dollars in thousands):


E&RW	Three Months Ended						Six Months Ended
	June 28, 2025			June 29, 2024			June 28, 2025			June 29, 2024
Segment income	$	7,589		$	8,289		$	14,127		$	14,325
Depreciation	439			263			853			520
Amortization	—			—			—			—
Stock-based compensation	—			—			—			10



Total Adjustments	439			263			853			530
Adjusted segment income	$	8,028		$	8,552		$	14,980		$	14,855

Segment income margin	17.1		%	19.2		%	16.4		%	17.4		%
Adjusted segment income margin	18.1		%	19.8		%	17.4		%	18.0		%

Liquidity and Capital Resources

Our primary sources of liquidity are net cash provided by operating activities and availability under the ABL Revolving Credit Facility (“ABL Facility”).

Primary working capital requirements are for raw materials, component and certain finished goods inventories and supplies, payroll, manufacturing, freight and distribution, facility, and other operating expenses. Cash flow from operations and working capital requirements fluctuate during the year, driven primarily by the seasonal demand for our products, an Early Buy program, the timing of inventory purchases and receipt of customer payments, and as such, the utilization of the ABL Facility may fluctuate during the year.

Unrestricted cash and cash equivalents totaled $365.1 million as of June 28, 2025, which is an increase of $168.5 million from $196.6 million at December 31, 2024.

We focus on increasing cash flow, solidifying the liquidity position through working capital initiatives, and paying our debt obligations, while continuing to fund business growth initiatives and return of capital to shareholders. We believe that net cash provided by operating activities and availability under the ABL Facility will be adequate to finance our working capital requirements, inclusive of capital expenditures, and debt service over the next 12 months.

Accounts Receivable Sales

On July 3, 2024, we entered into a Receivables Purchase Agreement under which we may offer to sell eligible accounts receivable. The agreement is uncommitted and the eligible accounts receivable to be sold under the agreement consist of up to $125 million in accounts receivable generated by sales to specified customers of the Company. The Company will be paid a discounted purchase price for each receivable sold. The discount rate used to determine the purchase price for the subject receivables is based upon an annual interest rate equal to the forward-looking term rate based on the secured overnight financing rate for the period of time between payment to the Company and the due date for the receivable plus a buffer period specific to the obligor, plus a margin applicable to the specified obligor.

Transactions under this agreement are accounted for as sales of accounts receivable, and the receivables sold are removed from the unaudited condensed consolidated balance sheets at the time of the sales transaction. For ease of administration, the Company collects customer payments related to the receivables sold and remits those payments to the purchaser. Proceeds received from the sales of accounts receivable are classified as operating cash flows and collections of previously sold accounts receivable not yet submitted to the financial institution are classified as financing cash flows in the unaudited condensed consolidated statements of cash flows. We record the discount in the “Other expense, net” line in the unaudited condensed consolidated statements of operations.

No sales of accounts receivable occurred during the three months ended June 28, 2025. During the six months ended June 28, 2025, there were proceeds of $99.1 million from the sale of $100.0 million of receivables under the Receivables Purchase Agreement. As of June 28, 2025, none of the sold receivables remained to be collected and remitted to the transferee. The expense recognized related to the discount on sales for the six months ended June 28, 2025 was $0.9 million.

Credit Facilities

The First Lien Term Facility and ABL Facility (collectively “Credit Facilities”) contain various restrictions, covenants and collateral requirements. Refer to Note 7. Long-Term Debt of notes to our unaudited condensed consolidated financial statements for further information on the terms of the Credit Facilities. We also have a revolving credit facility for our Spain subsidiary in the amount of €0.5 million as a local source of liquidity. As of June 28, 2025, the Spain revolving facility balance was zero with a borrowing availability of €0.5 million.

Long-term debt consisted of the following (in thousands):


	June 28, 2025		December 31, 2024
First Lien Term Facility, due May 28, 2028	$	962,500	$	965,000
ABL Revolving Credit Facility	—		—
Other bank debt	6,307		6,461
Finance lease obligations	1,743		2,448
Subtotal	970,550		973,909
Less: Current portion of the long-term debt	(13,412)		(13,991)
Less: Unamortized debt issuance costs	(8,074)		(9,356)
Total	$	949,064	$	950,562

ABL Facility

The ABL Facility provides for an aggregate amount of borrowings up to $425.0 million, with a discretionary peak season commitment of $475.0 million, subject to a borrowing base calculation based on available eligible receivables, eligible inventory, and qualified cash in North America. Accounts receivable for customers whose receivables are eligible for purchase under the Receivables Purchase Agreement, regardless of whether any amount of outstanding accounts receivable with those specific customers have been sold under the Receivables Purchase Agreement, are not eligible accounts receivable under the ABL Facility. An amount of up to 30% (or up to 40% with agent consent) of the then-outstanding commitments under the ABL Facility is available to our Canada and Spain subsidiaries. A portion of the ABL Facility not to exceed $50 million is available for the issuance of letters of credit in U.S. Dollars, of which $20.0 million is available for the issuance of letters of credit in Canadian dollars. The maturity of the facility is February 25, 2028.

On June 18, 2025, the Company entered into the Fifth Amendment to its existing ABL Facility to extend the maturity date to February 25, 2028. The amendment also included the removal of the 10 basis points credit spread adjustment previously applicable to Secured Overnight Financing Rate ("Term SOFR") borrowings and the removal of the first-in, last-out subfacility.

The borrowings under the ABL Facility bear interest at a rate equal to the Term SOFR and a margin of between 1.25% to 1.75%, or at a base rate plus a margin of 0.25% to 0.75%.

The borrowings under the ABL Facility prior to the Fifth Amendment on June 18, 2025, bore interest at a rate equal to the Term SOFR plus a 0.10% credit spread adjustment and a margin of between 1.25% to 1.75%, or at a base rate plus a margin of 0.25% to 0.75% with no credit spread adjustment.

For the three months ended June 28, 2025, the average borrowing base under the ABL Facility was $205.7 million and the average loan balance outstanding was zero. As of June 28, 2025, the loan balance was zero with a borrowing availability of $162.7 million.

For the six months ended June 28, 2025, the average borrowing base under the ABL Facility was $198.3 million and the average loan balance outstanding was zero.

First Lien Term Facilities

The Company's First Lien Term Facility bears interest at a rate equal to a base rate or SOFR, plus, in either case, an applicable margin. The applicable margin is 2.75% per annum with a 0.50% floor, with a stepdown to 2.50% per annum with a 0.50% floor when net secured leverage as defined by the First Lien Credit Agreement is less than 2.5x. The loan under the First Lien Term Facility amortizes quarterly at a rate of 0.25% of the original principal amount and requires a $2.5 million repayment of principal on the last business day of each March, June, September and December.

Under the agreement governing the First Lien Credit Facility (the “First Lien Credit Agreement”), the Company must make an annual mandatory prepayment of principal for between 0% and 50% of the excess cash and subject to permitted deductions, as defined in the First Lien Credit Agreement, generated in the prior calendar year. The amount due varies with the First Lien Leverage Ratio as defined in the First Lien Credit Agreement, from zero if the First Lien Leverage Ratio is less than or equal to 2.5x, to fifty percent if the First Lien Leverage Ratio is greater than 3.0x, in each case as of December 31 of the prior year. The First Lien Term Facility matures on May 28, 2028.

As of June 28, 2025, the balance outstanding under the First Lien Term Facility was $962.5 million.

For the three months ended June 28, 2025, the effective interest rate on borrowings under the First Lien Term Facility, including the impact of an interest rate hedge, was 6.24%. The effective interest rate is comprised of 6.93% for interest and 0.29% for financing costs, partially offset by 0.98% for interest income on the interest rate swaps.

For the six months ended June 28, 2025, the effective interest rate on borrowings under the First Lien Term Facility, including the impact of an interest rate hedge, was 6.13%. The effective interest rate is comprised of 6.94% for interest and 0.27% for financing costs, partially offset by 1.08% for interest income on the interest rate swaps.

Covenant Compliance

The Credit Facilities contain various restrictions, covenants and collateral requirements. As of June 28, 2025, we were in compliance with all covenants under the Credit Facilities.

Sources and Uses of Cash

Following is a summary of our cash flows from operating, investing, and financing activities:


(Dollars in thousands)	Six Months Ended
	June 28, 2025		June 29, 2024
Net cash provided by operating activities	$	188,362	$	209,839
Net cash used in investing activities	(13,582)		(48,025)
Net cash used in financing activities	(8,052)		(123,607)
Effect of exchange rate changes on cash and cash equivalents	1,734		(1,248)
Change in cash and cash equivalents	$	168,462	$	36,959

Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted as Exhibits 101.*)

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this day of July 30, 2025.


			HAYWARD HOLDINGS, INC.

			By:			/s/ Eifion Jones
			Name:			Eifion Jones
			Title:			Senior Vice President & Chief Financial Officer

Hayward Holdings, Inc. - Quarter Report: 2025 June (Form 10-Q)

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