Shares of pool and spa products distributor Hayward, which lists its stock under the ticker symbol “HAYW,” on the New York Stock Exchange jumped by as much as 31% in trading on the day following reporting their first quarter financial results on May 5, 2021. At press time, shares are up about 47% since their initial public offering on March 12, 2021, at nearly $25 a share.
According to Hayward’s Senior Vice President and Chief Financial Officer, Eifon Jones, net sales for their first quarter of 2021 increased $164.2 million, or a whopping 96% to $334.4 million.
Jones said the increase in net sales was primarily the result of higher volumes mainly in residential pool equipment sales from continued strong demand for pool equipment, upgrades, and an increase in new pool constructions.
Kevin Holleran, Haywards President and Chief Executive Officer, said the company delivered record profitability, which tripled on an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) basis, resulting from tremendous demand for their pool equipment. He said they were able to generate these results by leveraging their manufacturing capabilities to accelerate production, particularly in North America, (which represents 81% of their sales) their in-market supply chain advantages, and being very well-positioned with their competitive lineup of innovative products.
Holleran said that the industry outlook is even stronger now than it was earlier this year because builders ended 2020 with a sizable backlog, and new pool quoting activity. He expects that this backlog alone should extend demand through 2021 and into 2022. Furthermore, the pool and spa industry is supported by favorable housing dynamics, including the work-from-home trend, migration to the suburbs and the Sun Belt, and a strong construction market.
Furthermore, he noted that the demand for outdoor living products has increased over the past decade as retiring baby boomers are investing in their homes and millennials are showing increased interest in outdoor spaces. Consumer spending has been directed toward outdoor home improvements as consumers continue migrating to the suburbs and increase time spent at home and in their backyard. Outdoor living repair, replacement, and remodeling has grown faster than traditional home repair, replacement, and remodeling projects as homeowners choose to make larger outdoor investments. The trend toward healthy outdoor living has helped underpin continued pool industry growth.
Meanwhile, over the past year, they have seen homeowners prioritize investment in the outdoor living experience, further increasing the installed base of pools globally, which they estimate is over 25 million as of 2020. A growing installed base leads to reliable aftermarket spending, which represents 75% of Hayward’s sales.
“As we look ahead, we believe the strong order file for the new pool builds, a growing installed base, increased usage, rising prices, and product upgrades will support our continued growth,” Holleran said.
