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What changed in Hayward Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Hayward Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+614 added−561 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-27)

Top changes in Hayward Holdings, Inc.'s 2025 10-K

614 paragraphs added · 561 removed · 447 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

61 edited+2 added−14 removed17 unchanged
Biggest changeRecent product development has targeted key pool industry trends such as energy efficiency, advanced sanitization, reduced chemical usage, water conservation and enhanced IoT-driven pool experiences. 7 Customers We sell our products through a variety of channels to a diverse global trade customer base.
Biggest changeTypically, equipment cost is only a fraction of the total pool cost. Approximately 51% of our net sales are derived from non-discretionary products that are essential to operating a residential or commercial pool. Recent product development has targeted key pool industry trends such as energy efficiency, advanced sanitization, reduced chemical usage, water conservation and enhanced IoT-driven pool experiences.
Our products are connected through OmniLogic, our mobile application that allows our end users to conveniently manage their connected pool equipment. Our more environmentally sustainable products provide increased value for pool owners through various advanced functions that help drive energy savings, minimize chemical usage and reduce water consumption.
Our products are connected through OmniLogic, our mobile application that allows end users to conveniently manage their connected pool equipment. Our more environmentally sustainable products provide increased value for pool owners through various advanced functions that help drive energy savings, minimize chemical usage and reduce water consumption.
Distributors : The majority of our net sales come from an authorized network of regional and national distributors who service the pool trade (i.e., builders, retailers and servicers). We have long-standing relationships with these trade customers and we have contractual agreements to support our continued net sales of our products through this channel.
Distributors : The majority of our net sales come from an authorized network of regional and national distributors who service the pool trade (i.e., builders, retailers and servicers). We have long-standing relationships with these customers, and we have contractual agreements to support our continued net sales of our products through this channel.
We offer our Totally Hayward loyalty program, an incentive-based program that allows us to better connect with our trade partners and drive expansion across our product lines and across our international markets. In addition, we compete based on our technical innovation, intellectual property, reputation for providing quality and reliable products, competitive pricing and contractual terms.
We offer our Totally Hayward ® loyalty program, an incentive-based program that allows us to better connect with our trade partners and drive expansion across our product lines and international markets. In addition, we compete based on our technical innovation, intellectual property, reputation for providing quality and reliable products, competitive pricing and contractual terms.
For example, our large-capacity cartridge pool filters conserve up to 92% more water than standard sand filters as they do not need to be backwashed. Given these advanced functions, we are able to charge a higher price on key products such as variable speed pumps, energy efficient heaters, efficient filters and LED lights.
For example, our large-capacity cartridge pool filters conserve up to 92% more water than standard sand filters, as they do not need to be backwashed. Given these advanced functions, we are able to charge a higher price for key products, such as variable speed pumps, energy efficient heaters, efficient filters and LED lights.
Our accounts receivable balance increases from October to April as a result of the early-buy extended terms and remains elevated through June due to higher sales in the second quarter. Weather can affect our sales; however, we primarily serve the aftermarket, which is less affected than new pool construction equipment sales.
Our accounts receivable balance increases from October to April as a result of the Early Buy extended terms and remains elevated through June due to higher sales in the second quarter. Weather can affect our sales; however, we primarily serve the aftermarket, which is less affected than sales of equipment for new pool construction.
Most of these requirements govern the packaging, labeling, handling, transportation, storage, sale and use of our products. In addition, we are subject to regulations passed by the U.S. Department of Energy (the “DOE”) relating to the labeling, testing, reporting and certification of new and replacement pumps sold for swimming pools.
Most of these requirements govern the packaging, labeling, handling, transportation, storage, sale and use of our products. In addition, we are subject to regulations passed by the U.S. Department of 7 Energy (the “DOE”) relating to the labeling, testing, reporting and certification of new and replacement pumps sold for swimming pools.
We are also subject to regulation by the Occupational Safety and Health 10 Administration (“OSHA”) concerning employee health and safety matters. In addition, we and certain of our affiliates store certain types of hazardous materials and chemicals at various locations and the storage of these items is strictly regulated by local fire codes.
We are also subject to regulation by the Occupational Safety and Health Administration (“OSHA”) concerning employee health and safety matters. In addition, we and certain of our affiliates store certain types of hazardous materials and chemicals at various locations and the storage of these items is strictly regulated by local fire codes.
Compliance with, or liabilities under, such laws and regulations in the future could prove to be costly and could affect various aspects of the business. Sustainability As a leading provider of environmentally friendly and energy efficient products, Hayward strives to promote sustainability throughout our business operations and within our culture.
Compliance with, or liabilities under, such laws and regulations in the future may prove to be costly and could affect various aspects of the business. Sustainability As a leading provider of environmentally friendly and energy-efficient products, Hayward strives to promote sustainability throughout our business operations and within our culture.
We also purchase raw materials, such as resins (ABS, PP, HDPE, PVC), metals (copper, steel, aluminum, titanium, ruthenium) and liner board (packaging), which expose us to changes in commodity pricing and the availability of materials within the global supply chain.
We also purchase raw materials, such as metals (ruthenium, copper, steel, titanium and aluminum), resins (PP, ABS, HDPE and PVC), and liner board (for packaging), which expose us to changes in commodity pricing and the availability of materials within the global supply chain.
The addition of IoT based controls and alternative sanitizers, including salt chlorination systems and UV/Ozone systems, also increases the potential equipment spend on a pool pad while providing greater ease of use for pool owners and potential energy savings and chemical reduction.
The addition of IoT-based controls and alternative sanitizers, including salt chlorination systems and UV/ozone systems, also 3 increases the potential equipment spend on a pool pad while providing greater ease of use for pool owners and potential energy savings and chemical reduction.
U.S. federal environmental, health and safety regulations that apply to operations at one or more of our United States facilities include, without limitation, regulations promulgated under the Resource Conservation and Recovery Act, the Environmental Planning and Community Right-To-Know Act, the National Pollutant Discharge Elimination System Act, the Spill Prevention, Control and Countermeasures requirements and the Comprehensive Environmental Response, Compensation and Liability Act.
U.S. federal environmental, health and safety regulations that apply to operations at one or more of our U.S. facilities include, without limitation, regulations promulgated under the Resource Conservation and Recovery Act, the Environmental Planning and Community Right-To-Know Act, the National Pollutant Discharge Elimination System Act, the Spill Prevention, Control and Countermeasures requirements and the Comprehensive Environmental Response, Compensation and Liability Act.
Data Privacy and Security We are subject to numerous U.S. federal, state, local and foreign laws and regulations that address privacy, data protection and the collection, storing, sharing, use, transfer, disclosure and protection of certain types of data.
Data Privacy and Security We are subject to numerous U.S. federal, state, local and foreign laws and regulations that address privacy, data protection and the collection, storage, sharing, use, transfer, disclosure and protection of certain types of data.
Additionally, our evolution into offering smart products that can connect to the IoT may subject us to other IoT-specific laws and regulations, including the California Internet of Things Security Law.
Additionally, our evolution toward offering smart products that can connect to the IoT may subject us to other IoT-specific laws and regulations, including the California Internet of Things Security Law.
Full Spectrum of Pool Equipment We offer a wide range of pool equipment, including single and high efficiency variable speed pumps, filters, robotic, suction and pressure cleaners, high efficiency gas heaters and heat pumps, LED illumination solutions, water features and landscape lighting, water sanitizers, salt chlorine generators, safety equipment and in-floor automated cleaning systems.
We offer a wide range of pool equipment, including high-efficiency variable-speed pumps, filters, robotic, suction and pressure cleaners, high efficiency gas heaters and heat pumps, LED illumination solutions, water features and landscape lighting, water sanitizers, salt chlorine generators, safety equipment and in-floor automated cleaning systems.
We expect to receive payments for most of these shipments during the second quarter of 2025. Our aim is to keep our manufacturing plants running at a consistent level throughout the year. Consequently, we typically build inventory in the first and third quarters and inventory is typically sold-down in the second and fourth quarters.
We expect to receive payments for most of these shipments during the second quarter of Fiscal Year 2026. Our aim is to keep our manufacturing plants running at a consistent level throughout the year. Consequently, we typically build inventory in the first and third quarters, and inventory is typically sold-down in the second and fourth quarters.
These laws and regulations are increasing in number and complexity and are subject to varying interpretations by regulators and the courts, resulting in higher risk of enforcement, fines and other penalties. We have taken steps to monitor and comply with changing requirements.
These laws and regulations are increasing in number and complexity and are subject to varying interpretations by regulators and the courts, resulting in an increased risk of enforcement, fines and other penalties. We have taken steps to monitor and comply with changing requirements.
Our employee development programs include a variety of skill trainings for our employees to advance in their careers and cultivate leadership from within the Company. Our regular and transparent performance discussions with all employees also play a pivotal role in maintaining the competitiveness of our compensation and incentive programs, contributing to the sustainable growth for our business.
Our employee development programs include a variety of skills training for our employees to advance in their careers and cultivate leadership from within the Company. Our regular and transparent performance discussions with all employees also play a pivotal role in maintaining the competitiveness of our compensation and incentive programs, contributing to the sustainable growth of our business.
Compliance with such laws and regulations in the future could prove to be costly and could affect various aspects of the business. 12
Compliance with such laws and regulations in the future may prove to be costly and could affect various aspects of the business.
Such regulations include state data breach notification laws, California Consumer Privacy Act (the “CCPA”), the European Union General Data Protection Regulation (the “GDPR”), Canada’s Personal Information Protection and Electronic Documents Act and Australia’s Privacy Act, amongst others.
Such 6 regulations include state data breach notification laws, the California Consumer Privacy Act (the “CCPA”), the European Union General Data Protection Regulation (the “GDPR”), Canada’s Personal Information Protection and Electronic Documents Act and Australia’s Privacy Act, among others.
Pool owners are typically willing to pay higher prices upfront in order to enjoy functional product benefits and ultimate cost savings. Pool owners appreciate the more environmentally sustainable features and understand that they can expect a payback over several years. For example, the average payback period on a variable speed pump is approximately one to two years.
Pool owners are typically willing to pay higher prices upfront to enjoy functional product benefits and long-term cost savings. Pool owners appreciate the more environmentally sustainable features and understand that they can expect a payback over several years. For example, the average payback period on a variable speed pump is approximately one to two years.
Buying patterns through the various sales channels discussed above can also affect our sales for a given period. The level of inventory held by our distributor and retail customers is based upon factors beyond our control, such as end-user sales, supply chain lead times and macroeconomic factors, which may cause our revenue to fluctuate from period to period.
Buying patterns through the various sales channels discussed above can also affect our sales for a given period. The level of inventory held by our distributor and retail customers is based on factors beyond our control, such as consumer sales, supply chain lead times and macroeconomic factors, which may cause our revenue to fluctuate from period to period.
For discussion regarding the effects seasonality had on our results of operations in Fiscal Year 2024, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Trends and Uncertainties Regarding Our Existing Business.” Competition The markets for our products are geographically diverse and highly competitive.
For a discussion regarding the effects that seasonality had on our results of operations in Fiscal Year 2025, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Trends and Uncertainties Regarding Our Existing Business.” Competition The markets for our products are geographically diverse and highly competitive.
We believe our extensive inventory of products enables us to meet both residential and commercial needs, which creates a one-stop-shop for many of our trade partners. Some of our competitors, in particular smaller companies, compete based primarily on price and local relationships, especially with respect to products that do not require significant engineering or technical expertise.
We believe our extensive product portfolio enables us to meet both residential and commercial needs, which creates a "one-stop-shop" for many of our customers. Some of our competitors, in particular smaller companies, compete based primarily on price and local relationships, especially with respect to products that do not require significant engineering or technical expertise.
“Cybersecurity” for information about the Company’s management of risks related to our information technology systems. Environmental, Health and Safety Matters Our operations are subject to various laws and governmental regulations concerning environmental, health and safety matters, including employee health and safety, in the United States and other countries.
“Cybersecurity” for information about the Company’s management of risks related to our information technology systems. Environmental, Health and Safety Matters Our operations are subject to various laws and governmental regulations concerning environmental, health and safety matters, including employee health and safety, in the U.S. and other countries.
In addition, we have implemented a coordinated approach in managing our overall compensation structure and regularly conduct full evaluations of our compensation and incentive programs to be competitive in these areas. We monitor our performance by measuring numerous elements relating to our human capital management efforts, including, but not limited to, employee turnover and time to fill open roles.
In addition, we have implemented a coordinated approach to managing our overall compensation structure and regularly conduct comprehensive evaluations of our compensation and incentive programs to remain competitive. We monitor our performance by measuring numerous elements relating to our human capital management efforts, including, but not limited to, employee turnover and time to fill open roles.
Aftermarket replacements and upgrades to higher value Internet of Things (“IoT”) and energy efficient models are a primary growth driver for our business, as historically aftermarket sales have represented approximately 80% of net sales.
Aftermarket replacements and 2 upgrades to higher value Internet of Things (“IoT”) and energy-efficient models are a primary growth driver for our business, as aftermarket sales have represented approximately 85% of net sales.
Environmental Protection Agency (the “USEPA”), OSHA, and other federal and foreign, state and/or local agencies have the authority to promulgate laws and regulations in the future that may impact our operations going forward.
Environmental Protection Agency (the “USEPA”), OSHA, and other federal and foreign, state and/or local agencies have the authority to promulgate laws and regulations in the future that may impact our operations from time to time.
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.
Our engineered products, which include various energy-efficient and more environmentally sustainable offerings, enhance the pool owner’s outdoor living lifestyle while delivering high quality water, pleasant ambiance and ease of use.
NAM and E&RW accounted for approximately 85% and 15%, and 83% and 17%, of total net sales for Fiscal Year 2024 and the fiscal year ended December 31, 2023 (“Fiscal Year 2023”), respectively. For financial information with respect to our business segments, see Item 7 . “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 12.
NAM and E&RW accounted for approximately 85% and 15% of total net sales, respectively, for both the fiscal year ended December 31, 2025 ("Fiscal Year 2025") and December 31, 2024 (“Fiscal Year 2024”). For financial information with respect to our business segments, see Item 7 . “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 12.
We strive to attract, retain, develop and reward our employees by continuously enhancing various employee-focused initiatives while working to achieve and maintain hiring practices that give qualified individuals an equal opportunity to succeed regardless of background.
Our people are fundamental to our long-term business success. We strive to attract, retain, develop and reward our employees by continuously enhancing various employee-focused initiatives while working to achieve and maintain hiring practices that give qualified individuals an equal opportunity to succeed regardless of background.
In the fourth quarter, we incentivize trade customers to buy and stock up in preparation for next year’s pool season under an “Early Buy” 8 program that features a price discount and extended payment terms. Shipments for the 2024 Early Buy program began in late third quarter and will continue through approximately the first quarter of 2025.
In the fourth quarter, we incentivize customers to buy and stock up in preparation for next year’s pool season under an “Early Buy” program that features price discounts and extended payment terms. Shipments for the 2025 Early Buy program began in the late third quarter and will continue through approximately the first quarter of Fiscal Year 2026.
We have had an average relationship of over 15 years across our top 30 suppliers. We have had a more than 40-year relationship with our top vendor and over 10-year relationships with nine out of our top ten suppliers, with an average of 17 years of supply continuity. Sales Channels The pool equipment market is served through several sales channels.
We have had a more than 40-year relationship with our top vendor and over 10-year relationships with eight of our top ten suppliers, with an average of 18 years of supply continuity. Sales Channels The pool equipment market is served through several sales channels.
As of December 31, 2024, we held approximately 220 issued U.S. patents and 247 issued foreign patents relating to our technologies, such as pumps, filters, heaters, drains and white goods, robotic cleaners, in-floor cleaning systems, lights, automation and controls, sanitization, valves and flow control, and IoT and other technologies, as well as approximately 143 U.S. trademark registrations and 708 foreign trademark registrations covering our marks, brands and products.
As of December 31, 2025, we held approximately 221 issued U.S. patents and 242 issued foreign patents relating to our technologies, such as pumps, filters, heaters, drains and white goods, robotic cleaners, in-floor cleaning systems, lights, automation and controls, sanitization, valves and 5 flow control, and IoT and other technologies, as well as approximately 139 U.S. trademark registrations and 707 foreign trademark registrations covering our marks, brands and products.
As of December 31, 2024, we also held approximately 39 pending U.S. patent applications, 53 pending foreign patent applications, 6 pending U.S. trademark applications and 31 pending foreign trademark applications. We also license patents to certain technologies used in our products, such as our pool cleaning and lighting products.
As of December 31, 2025, we also held approximately 38 pending U.S. patent applications, 58 pending foreign patent applications, 7 pending U.S. trademark applications and 18 pending foreign trademark applications. We also license patents to certain technologies used in our products, such as our pool cleaning and lighting products.
We typically perform an audit on any new suppliers, and periodically evaluate our existing supplier base to enable maximum service and quality. Our supplier base is “sticky” as suppliers must invest to receive certain approvals, creating an economic incentive to maintain a long and productive relationship.
We typically perform an audit on any new suppliers and periodically evaluate our existing supplier base to enable maximum service and quality. Our supplier base is stable, as suppliers must invest to receive certain approvals, creating an economic incentive to maintain long and productive relationships. We have had an average relationship of over 19 years across our top 30 suppliers.
“Segments and Related Information” of Notes to Consolidated Financial Statements in 6 this Form 10-K. Item 7 contains information about sales and profits for each segment, and Note 12. “Segments and Related Information” contains information about each segment’s sales, significant segment expenses, capital expenditures, depreciation, and amortization.
“Segments and Related Information” of Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. Item 7 contains information about sales and profits for each segment, and Note 12 contains information about each segment’s sales, significant segment expenses, capital expenditures, depreciation, and amortization. North America Our North American business segment consists of the United States and Canada.
We maintain a Sustainability section of our website (https://investor.hayward.com) to provide detailed information to interested groups. For the avoidance of doubt, none of our sustainability data sheets or other reporting or information available on our website is hereby incorporated into the Annual Report on Form 10-K absent express language to the contrary.
For the avoidance of doubt, none of our sustainability data sheets or other reporting or information available on our website is hereby incorporated into this Annual Report on Form 10-K absent express language to the contrary.
We will make this annual report, in addition to our other annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, amendments to these reports, our proxy statements for meetings of our stockholders and other filings with the Securities and Exchange Commission (the “SEC”), available free of charge on our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Available Information We make this Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings with the SEC, and all amendments to these filings, available free of charge on our website at www.hayward.com as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
We take pride in our robust, comprehensive OSHA-aligned safety standards and go a step further to create an open feedback culture. During the year ended December 31, 2024, we implemented over 688 employees’ suggestions for improvements and regularly held global town hall meetings.
We take pride in our robust, comprehensive OSHA-aligned safety standards and seek to create an open feedback culture. During Fiscal Year 2025, we implemented over 762 employee suggestions for improvements and regularly held global town hall meetings.
North America Our North American business segment consists of the United States and Canada. We have residential and commercial field-based teams selling directly to specialized pool distributors, large retailers, major builders and specialized online resellers. U.S. trade customer shipments are fulfilled from either our East Coast or West Coast distribution centers depending on the customer’s location.
We have residential and commercial field-based teams that sell directly to specialized pool distributors, large retailers, major builders and specialized online resellers. U.S. trade customer shipments are fulfilled from our East Coast or West Coast distribution centers, depending on the customer’s location. Canadian trade customers are served through our distribution center in Oakville, Ontario.
In Europe, approximately 80% of sales was sold through distributors and 20% are through direct sales. Across regions, the market is based on a “prescriber model.” The purchasing decisions of the end consumer (i.e., pool owners) are strongly influenced by pool builders and pool servicers.
Approximately 15% was sold directly to retailers, and approximately 5% was sold to builders. In Europe, approximately 77% of sales were sold through distributors and 23% were sold through direct sales. Across regions, the market is based on a “prescriber model.” The purchasing decisions of consumers are strongly influenced by builders and servicers.
Distributors are responsible for ordering, stocking, training, delivering and taking on credit responsibility from their trade customers. Many distributors also sell our products to online retailers. Builders, Retailers and Servicers (Direct Sales) : We sell to several major builders and retailers, which includes e-commerce customers.
Distributors are responsible for ordering, stocking, training, delivering and assuming credit responsibility from their customers. Many distributors also sell our products to online retailers. Builders, Retailers and Servicers (Direct Sales) : We sell to several major builders and retailers, including e-commerce customers. These customers are large in scale and are capable of managing their own demand planning and inventory.
Canadian trade customers are served through our distribution center in Oakville, Ontario. Europe and Rest of World Our Europe and Rest of World business segment consists of all countries outside of the United States and Canada. Europe and Australia make up a sizable portion of this business segment. Europe and Australia have similar sales structures to the United States.
Europe and Rest of World Our Europe and Rest of World business segment consists of all countries outside of the United States and Canada. Europe and Australia comprise a significant portion of this segment and have sales structures similar to those in the United States.
These customers are large in scale and are capable of managing their own demand planning and inventory. Builders and retailers who buy directly from us typically cross geographies beyond what many wholesalers can serve. Buying Groups : We sell to several major buying groups, which are composed of members who are independent businesses.
Builders and retailers who buy directly from us typically serve geographies beyond what many wholesalers can serve. Buying Groups : We sell to several major buying groups, which are composed of members that are independent businesses. Buying groups receive competitive pricing and special incentives.
As of December 31, 2024, approximately 8% of our global workforce is represented by a union, all of which employees are located in China. We have relationships with works councils in Spain and France.
Our employees are primarily located in the U.S., with about 24% employed at our international locations in Canada, Spain, France, Australia and China. As of December 31, 2025, approximately 9% of our global workforce is represented by a union, and all of our unionized employees are located in China. We have relationships with works councils in Spain and France.
Our products cater to all types of pools including both in-ground and above ground pools. Our wide range of offerings can be found in entry, mid-range and premium pools.
Our products cater to all types of pools including both in-ground and above-ground pools. Our wide range of offerings can be found in entry, mid-range and premium pools. In general, there is a base cost of pool equipment for an entry-level pool, and equipment on premium pools can exceed 10 times the equipment cost of an entry-level pool.
Raw Materials and Suppliers We maintain longstanding relationships with approximately 640 suppliers. We mainly purchase assembled components such as motors, metal parts, cables and extrusions from our suppliers.
Our two largest customers represented approximately 33% and 12%, respectively, of our net sales in Fiscal Year 2025. Raw Materials and Suppliers We maintain longstanding relationships with approximately 630 suppliers. We mainly purchase assembled components, such as motors, metal parts, cables and extrusions, from our suppliers.
From time to time, we initiate litigation on these matters to enforce our rights. We do not regard our business as being materially dependent upon any single patent or proprietary technology.
From time to time, we initiate litigation on these matters to enforce our rights. We do not regard our business as being materially dependent upon any single patent or proprietary technology. Patents, patent applications and license agreements will expire or terminate over time by operation of law, in accordance with their terms or otherwise.
Our business is organized into two reportable segments: North America (“NAM”) and Europe & Rest of World (“E&RW”). We determined our operating segments based on how the Chief Operating Decision Maker (“CODM”) reviews the Company’s operating results in assessing performance and allocating resources.
We determined our operating segments based on how the Chief Operating Decision Maker (“CODM”) reviews the Company’s operating results in assessing performance and allocating resources. The Company’s CODM is the President and Chief Executive Officer.
The majority of our sales are through specialty distributors, who in turn sell to thousands of pool builders and servicers. The remaining sales are directly to large retailers, pool builders and buying groups. Our two largest customers represented approximately 36% and 11%, respectively, of our net sales in Fiscal Year 2024.
Customers We sell our products through a variety of channels to a diverse global customer base. The majority of our sales are made through distributors, who in turn sell to thousands of pool builders and servicers. The remaining sales are made directly to large retailers, pool builders and buying groups.
Products are consolidated into containers and shipped to global locations from the United States. Products and Services Since our founding in 1925, we have been delivering a growing portfolio of pool equipment that is differentiated by innovative features and high quality.
Products and Services Since our founding in 1925, we have been delivering a growing portfolio of pool equipment that is differentiated by innovative features and high quality. Our broad portfolio of pool equipment and associated automation systems is connected through built-in IoT capabilities, many of which form part of the SmartPad™ platform of advanced IoT-enabled products.
Customer shipments in Europe are fulfilled through our France or Spain distribution centers and Australia has its own smaller regional distribution hubs. The other more than 20 countries in this segment are predominantly served through U.S.-based regional managers who in turn deal through established distributors in each of the markets.
Customer shipments in Europe are fulfilled through our distribution centers in France or Spain, and Australia is served primarily through third-party distribution. The remaining countries in this segment are predominantly served through U.S.-based regional managers who work with established distributors in each market. Products are consolidated into containers and shipped from the United States to global locations.
Overview We are an industry-leading global designer, manufacturer and marketer of a broad portfolio of pool equipment and associated automation systems.
ITEM 1. BUSINESS Overview We are a leading global designer and manufacturer of a broad portfolio of pool equipment, outdoor living products and industrial flow control products.
Segments We operate in a global pool equipment market with an installed base that we estimate to be approximately 25 million pools globally. North America and Europe are the two largest pool markets, accounting for an estimated 68% of the total global installed base and 84% of total equipment sales according to market studies.
North America and Europe are the two largest pool markets, accounting for an estimated 67% of the total global installed base and 85% of total equipment sales according to market studies. Our business is organized into two reportable segments: North America (“NAM”) and Europe & Rest of World (“E&RW”).
According to management estimates, in Fiscal Year 2024, approximately 77% of residential pool equipment in the United States was sold through specialty distributors such as Pool Corporation, Heritage Pool Supply Group, and Baystate Pool Supplies. Approximately 18% was sold directly to retailers, and approximately 5% was sold to builders.
Members can place orders with the group’s corporate headquarters or order from us directly, and we ship directly to member locations. According to management estimates, in Fiscal Year 2025, approximately 80% of residential pool equipment in the U.S. was sold through distributors, such as Pool Corporation, Heritage Pool Supply Group and Baystate Pool 4 Supplies.
Our total number of temporary and contract workers fluctuates due to business cycles during the year. We believe our ability to maintain a flexible, modular workforce enhances our manufacturing capabilities. Our employees are primarily located in the United States, with about 29% employed at our international locations in Canada, Spain, France, Australia and China.
Human Capital Resources As of December 31, 2025, we had approximately 1,980 total full-time equivalent employees, of whom approximately 1% are temporary or contract workers. Our total number of temporary and contract workers fluctuates due to business cycles during the year. We believe our ability to maintain a flexible, modular workforce enhances our manufacturing capabilities.
We believe that a healthy environment is necessary for the well-being of our people and our businesses and is the foundation for a sustainable and strong economy. Championing our core sustainability values (“Sustainability”), we are committed to providing innovative and environmentally sustainable products, upholding responsible manufacturing practices, fostering a safe and inclusive workplace and maintaining strong governance and compliance practices.
We are committed to providing innovative and environmentally sustainable products, upholding responsible manufacturing practices, fostering a safe and inclusive workplace, and maintaining strong governance and compliance practices. We maintain a Sustainability section of our website (https://investor.hayward.com) to provide detailed information to interested groups.
Our broad portfolio of pool equipment and associated automation systems are connected through built-in IoT capabilities, many of which form part of the SmartPad™ platform of advanced IoT enabled products. Our products perform various core and auxiliary functions to deliver the holistic pool experience for pool owners.
Our products perform various core and auxiliary functions to deliver the holistic pool experience for pool owners.
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. Hayward Holdings, Inc. was incorporated in Delaware in June 2017 in connection with the acquisition by CCMP Capital Advisors, LP (“CCMP”), MSD Partners, L.P.
We estimate aftermarket sales based on feedback from certain representative customers and management’s interpretation of available industry and government data, and not on our GAAP net sales results. Segments We operate in a global pool equipment market with an installed base that we estimate to be approximately 25 million pools globally.
The SEC maintains an Internet site that contains these filings and they can be accessed via the Internet address https://www.sec.gov.
The SEC maintains an Internet site that contains these filings, which can be accessed at www.sec.gov. The contents of, or accessible through, these websites are not incorporated into this filing. Our references to the URLs for these websites are intended to be textual references only.
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ITEM 1. BUSINESS As used in this report, the terms “we,” “us,” “our,” “Hayward” and “Company” mean Hayward Holdings, Inc. and its subsidiaries (unless the context indicates another meaning). The term “common stock” means the common stock of Hayward Holdings, Inc., par value $0.001 per share.
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Investors and others should note that we announce material financial information to our investors using our investors relations website (www.investor.hayward.com), SEC filings, press releases, public conference calls, webcasts and social media. We use these channels, including our website and social media, to communicate with our investors and the public about our Company, our products and other issues.
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(a predecessor firm to BDT & MSD Partners) (“MSD Partners”) and Alberta Investment Management Corporation (“AIMCo”), as well as members of management and our board of directors, of our underlying business, which was founded in 1925. We completed our initial public offering of common stock in March 2021.
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It is possible that the information we post on our investors relations website and social media could be deemed to be material information. Therefore, we encourage investors, the media and others interested in our company to review the information we make available on our investor relations website and the social media channels listed on our investor relations website. 8
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As a result of a series of sales of our common stock by CCMP and AIMCo, we are no longer a “controlled company” within the meaning of the New York Stock Exchange’s corporate governance standards. We maintain an Internet website at global.hayward.com.
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Our corporate governance guidelines and the charters for each of our standing board committees (audit, nominating and corporate governance and compensation committees) are also available on our website, and copies of this information are available in print to any stockholder who requests it. Information included on or linked to our website is not incorporated by reference into this annual report.
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In general, there is a base cost of pool equipment for an entry level pool, and equipment on premium pools can exceed 10 times the equipment cost of an entry level pool. Typically, equipment cost is only a fraction of the total pool cost.
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Approximately 50% of our net sales are derived from non-discretionary products that are essential to operating a residential or commercial pool.
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Buying groups receive competitive pricing and special incentives. Members can place orders with the group’s corporate headquarters or order from us directly. We ship directly to member locations.
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Patents, patent applications and license agreements will expire or terminate over time by operation of law, in accordance with their terms or otherwise. 9 Human Capital Resources As of December 31, 2024, we had approximately 2,080 total full-time equivalent employees of whom approximately 7% are temporary or contract workers.
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We take our responsibility for environmental stewardship seriously and believe as a global designer and manufacturer, we play a constructive role in helping to address environmental challenges. Our Sustainability framework, established following our inaugural assessment in 2021, sets the foundation for our principle-based approach to integrating these values across our business.
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Guiding our strategy and the implementation of Sustainability initiatives are our four pillars: Products, Planet, People and Principles. To enhance our Sustainability performance, we are undertaking an evaluation to set clear, actionable goals for future progress. In our initial steps towards comprehensive sustainability reporting, we published our first data sheet on Sustainability in 2022.
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We published updated data sheets in both 2023 and 2024, and we are consistently improving the information available on our Sustainability webpage. Hayward respects, values and celebrates the unique attributes, characteristics and perspectives that make each person who they are, and we believe that the success of our employees determines the success of our business.
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An inclusive workforce, where individuals can feel a sense of belonging regardless of background, enables different perspectives to be shared and supports a collaborative and engaged company culture. We believe bringing individuals from a variety of backgrounds together allows us to more effectively address the challenges that may face our organization.
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Our commitment lies in cultivating a community bonded by our shared values: Care, Respect, Lead and Grow, and collective responsibility fostering the well-being of both individuals and the Company through mutual respect and learning. Our people are fundamental to our long-term business success.
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To enable good governance, our Sustainability strategy is governed by our Board of Directors through the Nominating and Corporate Governance Committee. Our committee in charge of Sustainability comprises members 11 of the senior leadership team and meets on a monthly cadence to oversee our Sustainability efforts. We are committed to transparency and communications to our stakeholders.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese risks include: • adverse changes in general economic and political conditions in countries where we operate, particularly in emerging markets; • the imposition of tariffs, duties, exchange controls, licensing requirements and restrictions or other trade restrictions; • geopolitical conflicts, including sanctions imposed in response to geopolitical conflicts, may be unpredictable; • changes in tax treaties, laws or rulings that could have a material adverse impact on our effective tax rate; • the difficulty of enforcing agreements and collecting receivables through non-U.S. legal systems; • the difficulty of communicating and monitoring evolving standards and directives across our product lines, services, and global facilities; • the threat of nationalization and expropriation and limitations on repatriation of earnings or other regionally-imposed capital requirements; • difficulty in staffing and managing widespread operations in non-U.S. labor markets; • the difficulty of protecting intellectual property and other proprietary rights in non-U.S. countries; and • changes in and required compliance with a variety of non-U.S. laws and regulations.
Biggest changeThese risks include, among others: • adverse changes in general economic, political or social conditions in countries where we operate, particularly in emerging markets; 14 • the imposition of, or changes in, tariffs, duties, exchange controls, licensing requirements, sanctions or other trade restrictions and trade relations; • geopolitical conflicts and related governmental responses (including sanctions and export controls), which may be unpredictable and could disrupt markets, supply chains, transportation routes, payment flows or customer demand; • changes in tax treaties, laws, regulations or interpretations that could adversely affect our effective tax rate or increase our tax liabilities; • difficulties enforcing agreements, protecting contractual rights and collecting receivables through non-U.S. legal systems; • challenges in communicating, implementing and monitoring evolving standards, directives and regulatory requirements across our products, services and global facilities; • the threat of nationalization or expropriation, limitations on repatriation of earnings, and other regionally-imposed capital controls or requirements; • difficulties staffing, managing and maintaining personnel in non-U.S. labor markets, including as a result of differing labor laws, practices and customs, and managing widespread operations; • increased risk of infringement, misappropriation or other challenges in protecting our intellectual property and other proprietary rights in non-U.S. jurisdictions; and • changes in, and required compliance with, a variety of non-U.S. laws and regulations, including those related to trade, customs, sanctions, anti-corruption, privacy, data protection, labor and the environment.
Consumer spending is impacted by factors outside of our control, including general economic and geopolitical conditions, interest rates, the residential housing market, unemployment rates and wage levels, inflation, disposable income levels, consumer confidence, and access to credit. In economic downturns, the demand for swimming pool equipment products and the growth rate of pool-eligible households and swimming pool construction may decline.
Consumer spending is impacted by factors outside of our control, including general economic and geopolitical conditions, interest rates, conditions in the residential housing market, unemployment rates and wage levels, inflation, disposable income levels, consumer confidence and access to credit. In economic downturns, demand for swimming pool equipment products and the growth rate of pool-eligible households and pool construction may decline.
Because we sell our products primarily through distributors, we rely in part on the efforts of third-party sales representatives, who may be required to learn about the new features or other aspects of our new products to effectively sell those products, which may prove challenging.
Because we sell our products primarily through distributors, we rely in part on the efforts of third-party sales representatives, who may be required to learn about new features or other aspects of our new products to effectively sell those products, which may prove challenging.
For example, our results of operations have been negatively impacted, and in the future may be negatively impacted, by distributors reducing inventory levels. As a result, management believes that period-to-period comparisons of results of operations are not necessarily meaningful and should not be relied upon as any indication of future performance or results expected for the fiscal year.
For example, our results of operations have been negatively impacted, and in the future may be negatively impacted, by distributors reducing inventory levels. As a result, management believes that period-to-period comparisons of results of operations are not necessarily meaningful and should not be relied upon as any indication of future performance or results expected for any fiscal year.
For example, our results of operations have been negatively impacted, and in the future may continue to be negatively impacted, by customer decisions to reduce inventory levels. Consumer purchasing behavior may also shift by product mix in the market or result in a shift to new distribution channels, including e-commerce, which is a rapidly developing area.
For example, our results of operations have been negatively impacted, and in the future, may continue to be negatively impacted by customer decisions to reduce inventory levels. Consumer purchasing behavior may also shift by product mix within the market or result in a shift to new distribution channels, including e-commerce, which is a rapidly developing area.
If we are unable to continue to differentiate our products or adapt to changes in consumer purchasing behavior or shifts in distribution channels, or if we are forced to cut prices or to incur additional costs to remain competitive, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.
If we are unable to continue to differentiate our products or adapt to changes in purchasing behavior or shifts in distribution channels, or if we are forced to cut prices or to incur additional costs to remain competitive, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.
We operate in markets with high levels of competition, which may result in pressure on our profit margins and limit our ability to maintain or increase the market share of our products. 13 The markets for our products are geographically diverse and highly competitive.
We operate in markets with high levels of competition, which may result in pressure on our profit margins and limit our ability to maintain or increase the market share of our products. The markets for our products are geographically diverse and highly competitive.
In addition, seasonal effects in our business may vary from year to year and be impacted by weather patterns, particularly by temperature, heavy flooding and droughts, which patterns may become less predictable and more extreme as a result of climate change.
In addition, seasonal effects in our business may vary from year to year and be impacted by weather patterns, particularly by temperature fluctuations, heavy flooding and droughts, which patterns may become less predictable and more extreme as a result of climate change.
Some of our competitors, in particular smaller companies, compete based primarily on price and local relationships, especially with respect to products that do not require significant engineering or technical expertise. In addition, during economic downturns average selling prices tend to decrease as market participants compete more aggressively on price, which may significantly and adversely impact our profit margins.
Some of our competitors, particularly smaller companies, compete primarily on price and local relationships, especially with respect to products that do not require significant engineering or technical expertise. In addition, during economic downturns average selling prices tend to decrease as market participants compete more aggressively on price, which may significantly and adversely impact our profit margins.
We compete based on brand recognition with pool owners, strong relationships with our distributors and resellers, and the loyalty of our builders and servicers with whom we have built a large installed base. In addition, we compete based on our technical innovation, intellectual property, reputation for providing quality and reliable products, competitive pricing and contractual terms.
We compete based on brand recognition with consumers, strong relationships with our distributors and resellers, and the loyalty of our builders and servicers with whom we have built a large installed base. In addition, we compete based on technical innovation, intellectual property, reputation for providing quality and reliable products, competitive pricing and contractual terms.
However, these programs may not be successful in retaining or increasing product purchases by these customers or in maintaining or increasing our net income. The demand for our swimming pool equipment products may be adversely affected by unfavorable economic and business conditions. We compete in various geographic regions and product markets around the world.
However, these programs may not be successful in retaining or increasing product purchases by these customers or in maintaining or increasing our net income. The demand for our products may be adversely affected by unfavorable economic and business conditions. We compete in various geographic regions and product markets around the world.
For fiscal years ended December 31, 2022 and 20 2021, we identified material weaknesses in our internal control over financial reporting relating to our policies and procedures and controls over the segregation of duties within our financial reporting function and the preparation and review of journal entries, among other items.
For our fiscal years ended December 31, 2022 and 2021, we identified material weaknesses in our internal control over financial reporting relating to, among other matters, our policies and procedures and controls over segregation of duties within our financial reporting function and the preparation and review of journal entries.
While no material weaknesses have been identified since fiscal 2022, there can be no assurance that we will not experience additional material weaknesses in the future.
While no material weaknesses have been identified since fiscal 2022, there can be no assurance that additional material weaknesses will not be identified in the future.
Our employees, commercial partners, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. We are exposed to the risk that our employees, commercial partners, and vendors may engage in fraudulent or illegal activity.
Our employees, commercial partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. We are exposed to the risk that our employees, commercial partners and vendors may engage in fraudulent, illegal or otherwise improper conduct.
Any of the above factors, individually or in the aggregate, could reduce demand for our products, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Any of the foregoing factors, individually or in the aggregate, could reduce demand for our products and could have a material adverse effect on our business, financial condition, results of operations and cash flows.
We must continue to develop and bring to market innovative products, which requires hiring and retaining technical staff, maintaining and upgrading manufacturing facilities and equipment and expanding our intellectual property rights. We must also identify emerging technological and commercial trends in our target end markets, as well as understand and react to potential regulatory changes.
We must continue to develop and bring to market innovative and technologically advanced products, which require hiring and retaining technical staff, maintaining and upgrading manufacturing facilities and equipment and expanding our intellectual property. We must also identify emerging technological and commercial trends in our target end markets, as well as understand and react to potential regulatory changes.
This provision does not apply to claims brought to enforce a duty or liability created by the Exchange Act. Our certificate of incorporation further provides that the federal district courts of the United States of America are the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
This provision does not apply to claims brought to enforce a duty or liability created by the Exchange Act. Our certificate of incorporation further provides that the federal district courts of the U.S. are the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
High interest rates and tightened credit markets limit the ability of homeowners to access financing for new swimming pools and related supplies, and consequently, replacement, repair and operation of equipment, which could negatively impact our product sales.
High interest rates and tightened credit markets may limit homeowners’ ability to access financing for new pools and related supplies and, consequently, for the replacement, repair and operation of equipment, which could negatively impact our product sales.
Under the 2024 Early Buy program, we generally ship products beginning in the late third quarter through approximately the first quarter of 2025 and expect to receive payments for most of these shipments during the second quarter of 2025. As a result, our accounts receivable balance increases from September to April before the Early Buy payment is received.
Under the 2025 Early Buy program, we generally ship products beginning in the late third quarter through approximately the first quarter of 2026 and expect to receive payments for most of these shipments during the second quarter of 2026. As a result, our accounts receivable balance typically increases from September to April before Early Buy payments are received.
If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest, and third parties could assert trademark infringement claims against us.
If our trademarks and trade names are not adequately protected, we may be unable to build name recognition in our markets, and third parties could assert trademark infringement claims against us.
Moreover, demand for our products is affected by changes in customer order and consumer purchasing patterns, such as changes in the levels of inventory maintained by customers and the timing of customer and consumer purchases, and changes in customers’ and consumers’ preferences for our products.
Moreover, demand for our products is affected by changes in customer ordering and consumer purchasing patterns, such as changes in the levels of inventory maintained by customers, the timing of customer and consumer purchases, and changes in customer and consumer preferences for our products.
A weak economy may also cause pool owners to defer replacement and refurbishment activity or upgrades to new pool equipment, or to purchase less expensive brands, and historically our aftermarket product sales have comprised most of our net sales.
A weak economy may also cause consumers to defer replacement and refurbishment activity or upgrades to new products, or to purchase less expensive brands. Historically, our aftermarket product sales have comprised most of our net sales.
Given the volatility of exchange rates, there can be no assurance that we will be able to effectively manage our currency transaction risks or that any volatility in currency exchange rates will not have a material adverse effect on our financial condition or results of operations.
Given the volatility of currency exchange rates, there can be no assurance that we will be able to effectively manage our currency-related risks or that fluctuations in exchange rates will not have a material adverse effect on our financial condition, results of operations or cash flows.
We compete against large and well-established national and global companies, as well as regional and local niche OEM’s, lower cost manufacturers and new market entrants. Our competitors offer pool equipment of varied quality and across a wide range of retail price points.
We compete against large and well-established national and global companies, as well as regional and local niche OEMs, lower cost manufacturers 11 and new market entrants. Our competitors offer products of varied quality and across a wide range of retail price points.
In addition, if we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion on the effectiveness of our internal control, investors may lose confidence in the accuracy and completeness of our financial reports, which could cause the price of our common stock to decline, or may risk the Company being delisted from the NYSE.
In addition, if we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion on the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, which could cause the price of our common stock to decline or could result in the Company being subject to regulatory scrutiny or even risk delisting from the NYSE.
For example, although we take measures to prevent our employees, consultants and advisors from using the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these individuals have used or disclosed intellectual property of others.
For example, although we take measures to prevent our employees, consultants and advisors from using the proprietary information or know-how of third parties in their work for us, we may be subject to claims that we or such individuals have used or disclosed trade secrets or other intellectual property of others.
We maintain a manufacturing facility in China and purchase certain of our key parts and components from suppliers in China, and we maintain a manufacturing facility in Europe.
We purchase certain key parts and components from suppliers in China and maintain a manufacturing facility in China, and we also maintain a manufacturing facility in Europe.
If our products are, or are alleged to be, defectively designed, manufactured or labeled, contain or are alleged to contain, defective components or components containing hazardous materials, such as asbestos, or are misused, we may become subject to costly litigation initiated by pool owners as well as government enforcement actions.
If our products are, or are alleged to be, defectively designed, manufactured or labeled; contain, or are alleged to contain, defective components or hazardous materials, such as asbestos; or are misused, we may become subject to costly litigation by consumers, as well as government investigations or enforcement actions.
Compliance with existing and forthcoming data privacy and security laws, regulations and industry standards can be costly and time consuming, and may require changes to our information technologies, systems and practices and to those of any third parties that process personal information on our behalf.
Compliance with existing and future data privacy and security laws, regulations and industry standards may be costly and time consuming, and may require changes to our information systems, technologies and business practices, as well as those of third parties that process personal information on our behalf.
Among these, the most significant are residential markets in the United States, Canada, Europe and Australia, as well as commercial markets in the United States and Europe. We have experienced, and expect to continue to experience, fluctuations in sales and results of operations due to economic and business cycles.
The most significant of these include residential markets in the U.S., Canada, Europe and Australia, as well as commercial markets in the U.S. and Europe. We have experienced, and expect to continue to experience, fluctuations in sales and results of operations due to economic and business cycles.
Additionally, while the majority of our sales are driven by aftermarket repair, replacement and remodeling products, adverse weather conditions, such as cold or wet weather, may negatively affect demand for, and sales of, pool equipment as a result of diminished use and reduced construction speed.
Additionally, while the majority of our sales are driven by aftermarket repair, replacement and remodeling products, adverse weather conditions, such as cold or wet weather, may negatively affect demand for, and sales of, pool equipment due to diminished pool usage and reduced construction activity.
These provisions include a classified board of directors and the ability of our Board of Directors to issue preferred stock without stockholder approval that could be used to dilute a potential hostile acquiror.
These provisions include a classified board of directors and the authority of our Board of Directors to issue shares of preferred stock without stockholder approval, which could be used to dilute the ownership of a potential hostile acquiror.
Additional sales of a substantial number of our shares of common stock in the public market, or the perception that sales could occur, could have a material adverse effect on the price of our common stock and could impair our ability to raise capital through the sale of additional stock. 30 The price of our common stock has been, and may in the future be, volatile and your investment in our common stock could suffer a decline in value.
The sale of a substantial number of shares of our common stock in the public market, or the perception that such sales may occur, could have a material adverse effect on the market price of our common stock and could impair our ability to raise capital through future equity offerings. 31 The market price of our common stock has been, and may continue to be, volatile, and the value of an investment in our common stock could decline.
If our trademarks and trade names are not successfully registered and adequately protected, we may not be able to build name recognition in our target markets and our business may be adversely affected.
If our trademarks and trade names are not successfully registered and adequately protected, we may be unable to build name recognition in our target markets, which could adversely affect our business.
We may be subject to claims that our employees, consultants, or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property. Third parties may in the future make claims challenging the inventorship or ownership of our intellectual property.
We may be subject to claims that our employees, consultants or advisors have wrongfully used or disclosed trade secrets or other proprietary information of their current or former employers, or claims asserting ownership of intellectual property that we regard as our own. Third parties may assert claims challenging the inventorship or ownership of our intellectual property.
These factors include, among others, factors described in these risk factors; guidance, if any, that we provide to the public, any changes in such guidance or our failure to meet such guidance; changes in financial estimates or ratings by any securities analysts who follow our common stock, our failure to meet such estimates or failure of those analysts to initiate or maintain coverage of our common stock; and price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole.
These factors include, among others, those described elsewhere in these risk factors; guidance, if any, that we provide to the public, changes to or failure to meet such guidance; changes in financial estimates or ratings by any securities analysts who follow our common stock, our failure to meet such estimates, or the failure of analysts to initiate or maintain coverage of our common stock; and general price and volume fluctuations in the equity markets, including as a result of broader economic conditions.
For the Fiscal Year 2024, approximately 17% of our net sales were made by our international operating locations that use a functional currency other than the U.S. dollar. These sales were primarily transacted in Euros as well as Canadian dollars. Consequently, we are exposed to the impact of exchange rate volatility between the U.S. dollar and these currencies.
For Fiscal Year 2025, approximately 17% of our net sales were generated by international operating locations that use a functional currency other than the U.S. dollar, with sales primarily denominated in Euros and Canadian dollars. As a result, we are exposed to exchange rate volatility between the U.S. dollar and these currencies.
Risks Related to the Manufacturing, Supply and Distribution of Our Products We depend on suppliers, including single-source suppliers and, in a few cases, sole-source suppliers, to consistently supply us with components for our products, and any failure to procure such components could have a material adverse effect on our business, product inventories, sales and profit margins.
Risks Related to the Manufacturing, Supply and Distribution of Our Products We depend on suppliers, including single-source suppliers, and, in certain cases, sole-source suppliers, to provide components used in our products, and any failure to obtain such components could have a material adverse effect on our business, product inventories, sales and profit margins.
Even in generally favorable economic conditions, severe and/or prolonged downturns in the housing market could have a material adverse impact on our financial performance. In addition, we believe that homeowners’ access to consumer credit is a critical factor enabling the purchase of new pools and related products.
Even in generally favorable economic conditions, severe and/or prolonged downturns in the housing market and declining home ownership rates could lead to a decline in demand for our products and have a material adverse impact on our financial performance. In addition, homeowners’ access to consumer credit is a critical factor enabling the purchase of new pools and related products.
Consumer spending affects sales of our products for initial pool installation and, more broadly, to our customers, such as distributors, builders, buying groups, retailers and servicers, who sell our products to pool owners and who must account for anticipated changes in consumer demand when they purchase our products from us.
Consumer spending affects sales of our products for initial pool installations and, more broadly, sales to our customers, such as distributors, builders, buying groups, retailers and servicers, who sell our products to consumers and who must account for anticipated changes in consumer demand when purchasing our products.
As of December 31, 2024, we also held approximately 39 pending U.S. patent applications, 53 pending foreign patent applications, 6 pending U.S. trademark applications and 31 pending foreign trademark applications. See “Business—Intellectual Property.” In addition, we have in-licensed patents and patent applications to certain technologies incorporated in our products.
As of December 31, 2025, we also held approximately 38 pending U.S. patent applications, 58 pending foreign patent applications, 7 pending U.S. trademark applications and 18 pending foreign trademark applications. See “Business—Intellectual Property.” In addition, we have in-licensed patents and patent applications to certain technologies incorporated in our products.
In addition, successful product liability claims made against one of our competitors could cause claims to be made against us or expose us to a perception that we are vulnerable to similar claims. 17 We have significant goodwill and intangible assets and future impairment of our goodwill and intangible assets could have a material adverse effect on our results of operations.
In addition, successful product liability claims made against one of our competitors could lead to increased claims against us or create a perception that our products are subject to similar risks. We have significant goodwill and intangible assets, and future impairment of our goodwill and intangible assets could have a material adverse effect on our results of operations.
Our success in these markets depends on obtaining and maintaining relationships with local channel partners who can effectively sell our products to pool owners in the applicable market. We have invested and intend to continue to invest in programs designed to enhance sales to distributors, builders, buying groups, retailers and servicers, including through volume rebates with key distributors.
Our success in these markets depends on obtaining and maintaining relationships with local customers that can effectively sell our products to consumers in the applicable markets. We have invested, and intend to continue to invest, in programs designed to enhance sales to distributors, builders, buying groups, retailers and servicers, including volume rebate programs with key distributors.
Most of our net sales are generated from sales to distributors, including our largest customer, Pool Corporation, which represented approximately 36% of our net sales in Fiscal Year 2024 and approximately 47% of our accounts receivable on December 31, 2024.
Most of our net sales are generated from sales to distributors, including our largest customer, Pool Corporation, which represented approximately 33% of our net sales in Fiscal Year 2025 and approximately 46% of our accounts receivable as of December 31, 2025.
We are in the process of implementing a new ERP system for most of our business as part of our ongoing efforts to improve and strengthen our operational and financial processes and our reporting systems. In addition, we are implementing a new human resources information system, which is designed to improve the efficiency of our global HR process.
We are in the process of implementing a new ERP system across most of our business as part of our efforts to improve and strengthen our operational, financial and reporting processes. In addition, we are implementing a 19 new human resources information system designed to enhance the efficiency of our global human resources operations.
If general economic conditions worsen, it may be more likely that one or more of our customers will default on payments owed to us, and it may be harder for us to enforce any judgment debts against such customers, which may result in a significant write-off of accounts receivable and may have a material adverse effect on our results of operations.
If general economic conditions are weak or worsen, it may be more likely that one or more of our customers will default on amounts owed to us, and it may be more difficult for us to enforce judgments against such customers, which could result in significant write-offs of accounts receivable and have a material adverse effect on our results of operations.
As we continue to design and develop products, services and solutions that leverage our hosted or cloud-based resources, the IoT and other wireless/remote technologies, such as our OmniLogic app, and include networks of distributed and interconnected devices that contain sensors, data transfers and other computing capabilities, our customers’ data and systems may be subjected to harmful or illegal content or attacks, including potential cybersecurity threats.
As we continue to design and develop products, services and solutions that leverage hosted or cloud-based resources, the IoT and other wireless or remote technologies, including our OmniLogic application, that incorporate networks of distributed and interconnected devices with sensors, data transmission and other computing capabilities, our products and our customers’ data and systems may be exposed to harmful or unlawful content or attacks, including cybersecurity threats.
For example, the GDPR generally restricts the transfer of personal information, including employee and consumer information, to countries outside of the EEA without appropriate safeguards or other measures.
For example, the GDPR generally restricts the transfer of personal information, including employee and consumer information, to countries outside of the European Economic Area without appropriate safeguards or other permitted mechanisms.
As of December 31, 2024, we held approximately 220 issued U.S. patents and 247 issued foreign patents relating to our technologies, such as pumps, filters, heaters, drains and white goods, robotic cleaners, in-floor cleaning systems, lights, automation and controls, sanitization, valves and flow control, and IoT and other technologies, as well as approximately 143 U.S. trademark registrations and 708 foreign trademark registrations covering our marks, brands and products.
As of December 31, 2025, we held approximately 221 issued U.S. patents and 242 issued foreign patents relating to our technologies, including pumps, filters, heaters, drains and white goods, robotic cleaners, in-floor cleaning systems, lighting, automation and controls, sanitization, valves and flow control, and IoT and other technologies, as well as approximately 139 U.S. trademark registrations and 707 foreign trademark registrations covering our marks, brands and products.
In addition, we have agreed to provide indemnification in connection with prior acquisitions or dispositions for certain of these matters, and we cannot provide any assurance that material indemnification claims will not be brought against us in the future.
In addition, in connection with prior acquisitions or dispositions, we have provided indemnification for certain liabilities and claims, and we cannot provide any assurance that material indemnification claims will not be asserted against us in the future.
The Company’s financial instruments that can be affected by foreign currency fluctuations and exchange risks consist primarily of cash and cash equivalents, trade receivables, trade payables and net sales denominated in currencies other than the U.S. dollar.
Our financial instruments that are subject to foreign currency fluctuations and exchange risks consist primarily of cash and cash equivalents, trade receivables, trade payables and net sales denominated in currencies other than the U.S. dollar.
If we are unable to generate sufficient cash flow from operations to service our debt and meet our other commitments, we may need to refinance all or a portion of our debt, sell material assets or operations, delay capital expenditures or raise additional debt or equity capital.
If we are unable to generate sufficient cash flows from operations to meet our debt service requirements and other obligations, we may be required to refinance all or a portion of our indebtedness, sell assets or operations, delay capital expenditures or raise additional debt or equity capital.
For example, we license patents to certain technologies used in our pool cleaner and lighting products. These licenses may not provide us rights (whether exclusive or non-exclusive) to use such intellectual property for all purposes or in all territories that we may wish to commercialize our products, now and in the future.
For example, we license patents relating to certain technologies used in our pool cleaner and lighting products. These licenses may not grant us rights, whether exclusive or non-exclusive, to use the licensed intellectual property for all purposes or in all geographic markets in which we may seek to commercialize our products, now or in the future.
Litigation may be necessary to resolve an ownership dispute, and if we are not successful, we may be precluded from using certain intellectual property or may lose our exclusive rights in such intellectual property. Either outcome could harm our business and competitive position. We may not be able to effectively enforce our intellectual property rights throughout the world.
Litigation may be necessary to resolve such disputes, and if we are not successful, we could be precluded from using certain intellectual property or could lose exclusive rights in such intellectual property, either of which could harm our business and competitive position. We may not be able to effectively enforce our intellectual property rights in all jurisdictions.
In the past, stockholders have instituted securities class action litigation following periods of market volatility, and as discussed under Note 14. “Commitments and Contingencies” of Notes to Consolidated Financial Statements in this Form 10-K, we are currently the subject of a securities class action lawsuit.
In the past, periods of market volatility have led to securities class action litigation against public companies. As discussed in Note 14 . “Commitments and Contingencies” to the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K, we are currently subject to a securities class action lawsuit.
Our failure to satisfy international trade compliance regulations, and changes in U.S. government sanctions, could have a material adverse effect on us. 24 Our global operations require importing and exporting goods and technology across international borders on a regular basis.
Our failure to comply with international trade compliance regulations and changes in U.S. government sanctions, could have a material adverse effect on us. Our global operations require the regular import and export of goods and technology across international borders.
Payments to us by our subsidiaries will be contingent upon our subsidiaries’ earnings and other business considerations and may be subject to statutory or contractual restrictions. We do not currently expect to declare or pay dividends on our common stock for the foreseeable future.
Payments by our subsidiaries are subject to their earnings, business considerations and applicable statutory or contractual restrictions. We do not currently expect to declare or pay dividends on our common stock for the foreseeable future.
Pending and future patent applications may not result in patents being issued that protect our products or which effectively prevent others from commercializing competitive technologies and products. Moreover, the coverage claimed in a patent application can be significantly reduced before the patent is issued. Even once issued, the scope, validity, enforceability and commercial value of patent rights are uncertain.
Pending and future patent applications may not result in patents being issued that protect our products or effectively prevent others from commercializing competing technologies or products. In addition, the scope of claims in a patent application may be narrowed before a patent is issued. Even after issuance, the scope, validity, enforceability and commercial value of patent rights are uncertain.
We typically build-up product inventory during the first quarter in anticipation of the upcoming pool season and during the third quarter in anticipation of shipments of products purchased through our Early Buy program in the fourth quarter. However, we may not accurately anticipate the level of demand during these periods.
We typically build inventory during the first quarter in anticipation of the upcoming pool season and during the third quarter in anticipation of shipments of products purchased under our Early Buy program in the fourth quarter. However, actual demand during these periods may differ from our expectations, and we may not accurately forecast customer demand.
Our concentration of sales to a relatively small number of larger customers makes our relationship with each of these customers important to our business. Our success is dependent on retaining these customers, which requires us to successfully manage relationships and anticipate the needs of our customers in the channels in which we sell our products.
Our concentration of sales among a relatively small number of large customers make our relationships with each of these customers important to our business. Our success depends on retaining these customers, which requires us to effectively manage relationships and anticipate their needs across the channels in which we sell our products.
Our business is impacted by international or cross-border trade, including the import and export of products and goods into and out of the United States and trade tensions among nations.
Our business is impacted by international or cross-border trade, including the import and export of products and components into and out of the U.S., as well as by trade policies and tensions among nations.
It is not always possible to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent these activities may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with such laws or regulations.
It is not always possible to identify or deter misconduct by our employees or third parties, and the measures we take to detect and prevent such conduct may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations, enforcement actions or litigation arising from alleged noncompliance with applicable laws or regulations.
If we fail to successfully enforce our intellectual property rights or register new patents, our competitive position could suffer, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
If we are unable to successfully enforce our intellectual property rights or obtain and maintain new patent or trademark protection, our competitive position could be harmed, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Whether or not we are successful in defending against any such actions or investigations, even if no misconduct occurred, we could incur substantial costs, which could have a material adverse effect on our business, financial condition and results of operations. Violations of the U.S. Foreign Corrupt Practices Act (the “FCPA”), U.K.
Regardless of the outcome of any such investigations or 24 proceedings, and even if no misconduct ultimately is found to have occurred, we could incur substantial costs, which could have a material adverse effect on our business, financial condition and results of operations. Violations of the U.S. Foreign Corrupt Practices Act, the U.K.
Furthermore, other states in the United States have enacted data privacy laws that have come into effect or will come into effect in the coming months and years. Some jurisdictions also are considering or have passed legislation requiring local storage and processing of data, or similar requirements, which could increase the cost and complexity of delivering our products and services.
In addition, many U.S. states have enacted data privacy laws that are in effect or are expected to come into effect. Certain jurisdictions also are considering or have enacted legislation requiring the local storage or processing of data, or similar requirements, which could increase the cost and complexity of delivering our products and services.
In addition, we may face claims by third parties that our agreements with employees obligating them to assign intellectual property to us are invalid, which could result in ownership disputes regarding intellectual property we have developed or will develop and interfere with our ability to capture the commercial value of such intellectual property.
In addition, we may face claims that our agreements with employees, consultants or advisors requiring the assignment of intellectual property rights to us are invalid or unenforceable, which could result in ownership disputes regarding intellectual property we have developed or may develop in the future and interfere with our ability to realize the commercial value of such intellectual property.
Our future success depends on developing, manufacturing and attaining market adoption of new products. Even if we attain significant market acceptance of our planned or future products, the commercial success of these products is not guaranteed. Our future financial success will depend substantially on our ability to develop, manufacture, market and sell products we develop.
Our future success depends on developing, manufacturing and attaining market adoption of new products and maintaining product quality and reliability. Even if we attain significant market acceptance of our planned or future products, the commercial success of these products is not guaranteed.
Competitors or other 26 third parties have in the past, and may in the future, adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity, possibly leading to market confusion and potentially requiring us to pursue legal action.
Competitors or other third parties have in the past, and may in the future, adopt trade names or trademarks that are similar to ours, which could impede our ability to build brand identity, cause market confusion and require us to pursue legal action.
Our substantial indebtedness, combined with our other financial obligations and contractual commitments, could have important consequences, including: • requiring us to dedicate a substantial portion of our cash flows from operations to payments on our indebtedness, thereby reducing funds available for working capital, capital expenditures, acquisitions, selling and marketing efforts, product development and other purposes; • increasing our vulnerability to adverse economic and industry conditions, which could place us at a competitive disadvantage compared to our competitors that have relatively less indebtedness; • increasing our exposure to rising interest rates, as certain of our borrowings are at variable interest rates; • limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate; • restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; and • limiting our ability to borrow additional funds, or to dispose of assets to raise funds, if needed, for working capital, capital expenditures, acquisitions, product development and other corporate purposes.
Our substantial indebtedness, together with our other financial obligations and contractual commitments, could have important consequences, including: • requiring us to dedicate a substantial portion of our cash flows from operations to debt service, thereby reducing funds available for working capital, capital expenditures, acquisitions, sales and marketing activities, product development and other corporate purposes; • increasing our vulnerability to adverse economic, industry or market conditions, which could place us at a competitive disadvantage relative to competitors with lower levels of indebtedness; • increasing our exposure to interest rate risk, as a portion of our indebtedness bears interest at variable rates; • limiting our flexibility to plan for, or respond to, changes in our business or the industries in which we operate; • restricting our ability to pursue strategic acquisitions or potentially requiring us to undertake non-strategic divestitures; and • limiting our ability to incur additional indebtedness or to dispose of assets to raise capital, if needed, for working capital, capital expenditures, acquisitions, product development and other corporate purposes.
We cannot provide any assurance that our internal control policies and procedures will always protect us from reckless or criminal acts committed by our employees or third-party intermediaries.
We cannot provide assurance that our internal controls, policies and procedures will always prevent, detect or mitigate reckless or criminal acts by our employees or third-party intermediaries.
We rely on information technology systems to support our business operations. A significant disturbance or breach of our technological infrastructure, or those of our vendors or others with which we do business, could adversely affect our financial condition and results of operations. Additionally, failure to maintain the security of confidential information could damage our reputation and expose us to litigation.
We rely on information technology systems to support our business operations, and a significant disruption or breach of our technological infrastructure, or that of our vendors or other third parties, could adversely affect our financial condition, results of operations and reputation. In addition, a failure to maintain the security of confidential information could expose us to litigation and regulatory action.
This increase in demand was experienced broadly across all of our product lines as consumers refocused their attention on improving the quality of the homeowner’s outdoor living experience. In addition, because of channel customer expectations with respect to increased lead-times during the COVID-19 pandemic, demand for our products was partially accelerated.
During the first two years of the COVID-19 pandemic, residential pool equipment sales increased, and this increase in demand was experienced broadly across our product lines as consumers refocused on improving the quality of the homeowner’s outdoor living experience. In addition, customer expectations regarding extended lead-times during the COVID-19 pandemic partially accelerated demand for our products.
The agreements governing our outstanding indebtedness contain several restrictive covenants that impose operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including, among other things, restrictions on our ability to: • incur additional indebtedness; • create liens on assets; 28 • declare or pay certain dividends and other distributions; • make certain investments, loans, guarantees or advances; • consolidate, amalgamate, merge, sell or otherwise dispose of all or substantially all of our assets; and • enter into certain transactions with our affiliates; In addition, the ABL Facility contains a financial covenant requiring us to maintain a specified fixed charge coverage ratio during the specified periods described therein.
The agreements governing our outstanding indebtedness contain restrictive covenants that impose operating and financial limitations on us and may restrict our ability to take actions that may otherwise be in our long-term best interests, including, among other things, limitations on our ability to: • incur additional indebtedness; • create liens on assets; • declare or pay certain dividends and make other distributions; • make certain investments, loans, guarantees or advances; • consolidate, amalgamate, merge, sell or otherwise dispose of all or substantially all of our assets; and • enter into certain transactions with affiliates.
Our results of operations and cash flows may fluctuate from quarter to quarter for many reasons, including seasonality and weather conditions. We experience seasonal demand with customers and pool owners and, as a result, we experience fluctuations in quarterly results.
Our results of operations and cash flows may fluctuate from quarter to quarter for many reasons, including seasonality and weather conditions. We experience seasonal demand from customers and consumers and, as a result, experience fluctuations in quarterly results. During the second quarter of a fiscal year, sales are typically higher in anticipation of the start of the summer pool season.
We periodically enter into foreign currency derivative contracts to manage these risks. We expect that the amount of our sales denominated in non-dollar currencies may increase in future periods.
We periodically enter into foreign currency derivative contracts to manage certain aspects of these risks; however, these activities may not be effective or may not offset our exposure. We expect that the proportion of our sales denominated in non-U.S. dollar currencies may increase in future periods.
As a result, stockholders may lose their ability to sell their stock for a price in excess of the prevailing market price due to these protective measures, and efforts by stockholders to change the direction or management of the company may be unsuccessful.
As a result of these provisions, stockholders may be unable to sell their shares at a price in excess of the prevailing market price, and efforts by stockholders to influence the direction or management of the Company may be unsuccessful.
Risks Related to Ownership of our Common Stock Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress the price of common stock. In the future, we may issue additional shares of our common stock.
Risks Related to Ownership of Our Common Stock Future sales of our common stock, or the perception that such sales may occur, may depress the market price of our common stock. In the future, we may issue additional shares of our common stock or other equity securities, or securities convertible into or exchangeable for equity securities.
Our results of operations and assets and liabilities are reported in U.S. dollars and thus will fluctuate with changes in applicable exchange rates, affecting our reported results and the comparability of our results of operations and cash flows between periods.
Because our results of operations and our assets and liabilities are reported in U.S. dollars, fluctuations in exchange rates may affect our reported results and the comparability of our results of operations and cash flows between periods.
We may also make prioritization decisions in determining which vulnerabilities or security defects to fix, and the timing of these fixes, which could result in compromised security.
In addition, we may make prioritization decisions regarding which vulnerabilities or security defects to address and the timing of any remediation, which could result in compromised security.
Historically, we have experienced substantial sales growth through organic market share gains, geographic expansion, technological innovation, new product offerings, increased demand for outdoor living products and acquisitions that have increased our size, scope and geographic footprint. During the first two years of the COVID-19 pandemic, residential pool equipment sales increased.
Historically, we have experienced substantial sales growth driven by a combination of organic market share gains, geographic expansion, technological innovation, new product offerings, increased demand for outdoor living products and acquisitions that have expanded our size, scope and geographic footprint.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Vice President, Information Technology, in coordination with management, works to implement our program to protect our information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents.
Biggest changeManagement’s Role The following individuals have primary responsibility for assessing and managing cybersecurity risks: • Chief Financial Officer, who oversees the digital transformation, digital technology and security functions. 33 • Vice President, Information Technology, who in coordination with management, works to implement our program to protect our information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents. • Chief Legal Officer, who oversees the legal and compliance functions.
Third-party vendor access to critical information systems is subject to regular review and assessment by management, and management evaluates the cybersecurity risks and safeguards of potential third-party vendors prior to engaging such vendors. 31 • Mandatory employee cybersecurity training to equip our employees with the tools and knowledge to enhance the cybersecurity posture across the organization. • Continuous monitoring of networks and systems for suspicious activity, leveraging firewalls, intrusion detection and prevention systems, endpoint anti-virus and anti-malware solutions, and a privileged access management system. • A comprehensive incident response plan, which has been developed to enhance the Company’s ability to respond to, and recover from, cybersecurity incidents.
Third-party vendor access to critical information systems is subject to regular review and assessment by management, and management evaluates the cybersecurity risks and safeguards of potential third-party vendors prior to engaging such vendors. • Mandatory employee cybersecurity training to equip our employees with the tools and knowledge to enhance the cybersecurity posture across the organization. • Continuous monitoring of networks and systems for suspicious activity, leveraging firewalls, intrusion detection and prevention systems, endpoint anti-virus and anti-malware solutions, and a privileged access management system. • A comprehensive incident response plan, which has been developed to enhance the Company’s ability to respond to, and recover from, cybersecurity incidents.
The Information Security Policy is reviewed and certified by our Vice President of Information Technology. • Inclusion of Sarbanes-Oxley Information Technology General Controls in our Risk and Control Matrix, which are routinely tested by our Internal Audit team. • Regular risk and vulnerability assessments to identify and address potential weaknesses in our systems.
The Information Security Policy is reviewed annually and certified by our Vice President of Information Technology. • Inclusion of Sarbanes-Oxley Information Technology General Controls in our Risk and Control Matrix, which are routinely tested by our Internal Audit team. • Regular risk and vulnerability assessments to identify and address potential weaknesses in our systems.
As part of our risk management program, we actively work to identify, prevent and mitigate cybersecurity threats, and take steps to be prepared to effectively respond to cybersecurity incidents when they occur. Risk Management and Strategy We have established a robust cybersecurity governance framework to manage and mitigate risk.
As part of our risk management program, we actively work to identify, prevent and mitigate cybersecurity threats, and take steps to be prepared to effectively respond to cybersecurity incidents when they occur. 32 Risk Management and Strategy We have established a robust cybersecurity governance framework to assess, identify, manage and mitigate risk.
To facilitate the success of our cybersecurity risk management program, we have assigned dedicated resources, including our Vice President, Information Technology, and members of his team to monitor the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time and provide reports to management, the Audit Committee and the Board on a regular basis and as needed in response to specific incidents.
We have assigned dedicated resources, including our Vice President, Information Technology, and members of his team to monitor the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time and provide reports to management, the Audit Committee and the Board on a regular basis and as needed in response to specific incidents.
Through these processes, we did not identify risks from current or past cybersecurity threats or cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition.
Through these processes, we have not identified risks from current or past cybersecurity threats or cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition.
The Audit Committee receives quarterly presentations on cybersecurity risks, addressing matters such as evolving standards; vulnerability assessments, including results of third-party penetration testing; audits of our cybersecurity IT controls; and independent reviews of our cybersecurity processes. Management and the Board also receive prompt and timely information regarding any significant or potentially material cybersecurity incident and our remediation efforts.
The Board receives regular reports from management about cybersecurity risks, addressing matters such as evolving standards; vulnerability assessments, including results of third-party penetration testing; audits of our cybersecurity IT controls; and independent reviews of our cybersecurity processes. The Audit Committee receives from management prompt and timely information regarding any significant or potentially material cybersecurity incident and our remediation efforts.
The Board is actively involved in overseeing our risk management program, and cybersecurity represents an important component of our overall approach to risk management. Our cybersecurity processes are based on recognized frameworks established by the National Institute of Standards and Technology, the International Organization for Standardization and other applicable industry standards.
The Board has oversight responsibility for our risk management program, and cybersecurity is one component of our overall approach to risk management. Our cybersecurity processes are based on recognized frameworks established by the National Institute of Standards and Technology, the International Organization for Standardization and other applicable industry standards.
Our approach includes: • Maintaining a comprehensive International Organization for Standardization-based Information Security Policy.
Our cybersecurity risk management program includes: • Maintaining a comprehensive International Organization for Standardization-based Information Security Policy.
However, we face ongoing risks from cybersecurity threats that, if realized, are reasonably likely to materially affect business strategy, results of operations, or financial condition. See “Risk Factors—We rely on information technology systems to support our business operations.
However, we face ongoing risks from cybersecurity threats that, if realized, are reasonably likely to materially affect business strategy, results of operations, or financial condition.
Additionally, failure to maintain the security of confidential information could damage our reputation and expose us to litigation.” Governance The Audit Committee is primarily responsible for overseeing our management of risks arising from cybersecurity threats.
In addition, a failure to maintain the security of confidential information could expose us to litigation and regulatory action.” Governance Board Oversight Our Board, in coordination with the Audit Committee, oversees our management of risks arising from cybersecurity threats.
A significant disturbance or breach of our technological infrastructure, or those of our vendors or others with which we do business, could adversely affect our financial condition and results of operations.
See “Risk Factors—We rely on information technology systems to support our business operations and a significant disruption or breach of our technological infrastructure, or that of our vendors or other third parties, could adversely affect our financial condition and results of operations, and reputation.
Added
These individuals, among others, facilitate the success of our cybersecurity risk management program.
Added
Our Chief Financial Officer has over 20 years of experience in similar leadership roles at public companies and has served in various roles overseeing enterprise risk management, internal controls, compliance and financial reporting processes, including oversight of cybersecurity risk management and related disclosures.
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Our Chief Legal Officer has over 20 years of experience managing risks, including risks arising from cybersecurity threats, at several public companies.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe do not believe that any single lease is material to our operations. 32 The following is a summary of our principal properties as of December 31, 2024, including manufacturing, distribution, warehouse, and corporate offices: No. of Facilities Location Manufacturing Distribution Warehouse Corporate Headquarters North America Arizona 0 1 0 0 Georgia 1 0 0 0 North Carolina 1 1 1 1 Rhode Island 1 0 1 0 Tennessee 1 0 2 0 Canada 0 1 0 0 Europe and Rest of World Australia 0 4 0 0 China 1 0 0 0 France 0 1 0 0 Spain 2 0 2 0 We believe that our facilities as well as the related machinery and equipment, are well maintained and suitable for their purpose and are adequate to support our business.
Biggest changeThe following is a summary of our principal properties as of December 31, 2025, including manufacturing, distribution, warehouse, and corporate offices: No. of Facilities Location Manufacturing Distribution Warehouse Corporate Headquarters North America Arizona 0 1 0 0 Georgia 1 0 0 0 North Carolina 1 1 1 1 Rhode Island 1 0 3 0 Tennessee 1 0 2 0 Canada 0 1 0 0 Europe and Rest of World Australia 0 1 0 0 China 1 0 0 0 France 0 1 0 0 Spain 2 0 2 0 We believe that our facilities as well as the related machinery and equipment, are well maintained and suitable for their purpose and are adequate to support our business. 34
ITEM 2. PROPERTIES The Company’s corporate headquarters is located on leased premises in Charlotte, North Carolina. We own four of our seven global manufacturing facilities and one of our eight global distribution facilities. All the other facilities are leased, except for two locations operated by third-party logistics providers, which are provided under service agreements.
ITEM 2. PROPERTIES The Company’s corporate headquarters is located on leased premises in Charlotte, North Carolina. We own four of our seven global manufacturing facilities and one of our five global distribution facilities. All the other facilities are leased, except for four locations operated by third-party logistics providers, which are provided under service agreements.
Most of our leases contain renewal options, some of which involve rent increases. In addition to minimum rental payments, which are set at competitive rates, certain leases require reimbursement for taxes, maintenance and insurance.
Most of our leases contain renewal options, some of which involve rent increases. In addition to minimum rental payments, which are set at competitive rates, certain leases require reimbursement for taxes, maintenance and insurance. We do not believe that any single lease is material to our operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe 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.
Biggest changeThe Heicklen 35 Action also alleges claims for unjust enrichment, corporate waste, and violations of Section 10(b) of the Exchange Act. The Hertzog Action also alleges claims for insider trading and violations of Sections 14(a), 21D, 20(a), 29(B) of the Exchange Act. The Tackett Action also alleges claims for insider trading and aiding and abetting insider trading.
ITEM 3. LEGAL PROCEEDINGS In addition to the matters discussed in this report and in the notes to our audited consolidated financial statements, we are from time to time subject to, and are presently involved in, other litigation and legal proceedings arising in the ordinary course of business.
ITEM 3. LEGAL PROCEEDINGS In addition to the matters discussed in this report and in the notes to our audited consolidated financial statements, from time to time, we are subject to, and are presently involved in, other litigation and legal proceedings arising in the ordinary course of business.
On October 2, 2024, the Court issued an Opinion and Order dismissing 33 the consolidated class action complaint and granting the lead plaintiff leave to file an amended complaint within 30 days.
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 30 days.
These proceedings could relate to commercial or contractual disputes with suppliers, customers or parties to acquisitions and divestitures, intellectual property matters, product liability, the use or installation of our products, consumer matters, employment and labor matters, and environmental, safety and health matters, including claims based on alleged exposure to asbestos-containing product components.
These proceedings may relate to commercial or contractual disputes with suppliers, customers or parties to acquisitions and divestitures, intellectual property matters, product liability, the use or installation of our products, consumer matters, employment and labor matters, and environmental, safety and health matters, including claims based on alleged exposure to asbestos-containing product components.
In a consolidated class action complaint filed March 4, 2024, the Securities Class Action alleged on behalf of a putative class of stockholders who acquired shares of our 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 by, among other things, making materially false or misleading statements regarding inventory, growth, and demand trends and the Company’s financial projections for 2022.
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 Exchange Act 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 November 1, 2024, 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 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 November 1, 2024, the lead plaintiff filed a consolidated amended class action complaint asserting 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.
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 or settle the Securities Class Action and the Derivative Action.
We dispute the allegations of wrongdoing in the Securities Class Action and the Derivative Actions. 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 Derivative Actions.
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 our current directors and officers (Kevin Holleran and Eifion Jones) and MSD Partners and CCMP Capital Advisors, LP on behalf of a putative class of stockholders who acquired shares of our common stock between March 2, 2022 and July 27, 2022.
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) as well as 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.
Where appropriate, these matters have been submitted to the Company’s insurance carriers. We believe that the outcome of such other litigation and legal proceedings will not have a material adverse effect on our business, financial condition, results of operations and cash flows.
Where appropriate, these matters have been submitted to the Company’s insurance carriers. While the outcome of such matters cannot be predicted with certainty, we do not currently believe that the resolution of such other litigation and legal proceedings will have a material adverse effect on our business, financial condition, results of operations or cash flows.
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 our current directors and officers (Kevin Holleran and Eifion Jones) and MSD Partners and CCMP Capital Advisors, LP on behalf of a putative class of stockholders who acquired shares of our common stock between October 27, 2021 and July 28, 2022.
On September 28, 2023, a second, related securities class action complaint was filed in the same court against the Company and certain of its current directors and officers (Kevin Holleran and Eifion Jones) as well as 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.
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 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.
The Derivative Action seeks recovery of unspecified damages and attorney’s fees and costs, as well as improvements to the Company’s corporate governance and internal procedures. The Derivative Action has been stayed pending final decision on the motion to dismiss filed in the Securities Class Action.
The plaintiffs in the Derivative Actions seek recovery of unspecified compensatory and punitive damages and attorneys' fees and costs, improvements to the Company’s corporate governance and internal procedures, disgorgement, and restitution. The Heicklen and Hertzog Actions are presently stayed. In the Tackett Action, defendants time to respond to the complaint has not yet commenced.
Removed
Under the current schedule, briefing on the motion to dismiss will be complete on March 4, 2025. 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.
Added
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.
Removed
We dispute the allegations of wrongdoing in the Securities Class Action and the Derivative Action and intend to vigorously defend ourselves in these matters.
Added
On November 20, 2025, the parties reported to the Court that they had reached a settlement in principle, which is subject to Court approval, and on January 23, 2026, lead plaintiff moved the Court for preliminary approval of the settlement.
Added
Holleran, et al. , 2:23-cv-22649 (D.N.J.) (the “Heicklen Action”).
Added
On August 28, 2025, a second 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, as well as defendants affiliated with MSD Partners, L.P., CCMP Capital Advisors, LP, and Alberta Investment Management Corporation captioned Hertzog v.
Added
Holleran, et al. , 2:25-cv-14856 (D.N.J.) (the “Hertzog Action”).
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On November 18, 2025, a third shareholder derivative lawsuit was filed in the Court of Chancery of the State of Delaware against certain current and past officers and directors of the Company, as well as defendants affiliated with MSD Partners, L.P. and CCMP Capital Advisors, LP captioned Roberta Tackett, Aqua Palace, LLC and Jennifer Roberts vs.
Added
Hayward Holdings, Inc., et. al. , C.A. No. 2025-1344 (Del. Ch.) (the “Tackett Action”, and together with the Heicklen and Hertzog Actions, the “Derivative Actions”). The Derivative Actions allege claims for breaches of fiduciary duties to Company stockholders and aiding and abetting breaches of fiduciary duties in connection with the claims in the Securities Class Action.
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The Company has recorded accruals, where appropriate, with respect to the Securities Class Action in the Company’s condensed consolidated financial statements. Additional expenses incurred, if any, related to this case are subject to insurance recoveries pursuant to the Company’s retention amount with its insurance carriers.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeFrom 2021 until he joined Hayward, Mr. Gallagher served as Chief Technology Officer, Personal Protective Equipment (PPE) at Honeywell. From 2016 to 2021, Mr. Gallagher was Vice President of Global Engineering and Quality at InVue, an international merchandising, security, and IoT solutions company, where he led product development, innovation, quality and program management.
Biggest changeGallagher was Vice President of Global Engineering and Quality at InVue, an international merchandising, security, and IoT solutions company, where he led product development, innovation, quality and program management. Darío Vicario has served as Vice President, General Manager, Europe & Rest of World of the Company since May 2024, based in Spain. From 2022 until he joined Hayward, Mr.
Collins spent twenty years at Textron Specialized Vehicles, where he served in roles of progressively increasing responsibility, and most recently as the Senior Vice President and General Manager of E-Z-GO. In this role, from 2020 to 2022, Mr. Collins led product management and global sales for Textron’s E-Z-GO and Cushman vehicle lines. Prior to 2020, Mr.
Prior to joining Hayward, Mr. Collins spent twenty years at Textron Specialized Vehicles, where he served in roles of progressively increasing responsibility, and most recently as the Senior Vice President and General Manager of E-Z-GO. In this role, from 2020 to 2022, Mr. Collins led product management and global sales for Textron’s E-Z-GO and Cushman vehicle lines.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS Information concerning our executive officers is set forth below: Name Age Position Kevin Holleran 56 President, Chief Executive Officer and Director Eifion Jones 57 Senior Vice President, Chief Financial Officer Susan Canning 55 Senior Vice President, Chief Legal Officer and Corporate Secretary John Collins 48 Senior Vice President, Chief Commercial Officer Raymond Lewis 60 Senior Vice President, Chief Human Resources Officer Eric Sejourne 58 Senior Vice President, Chief Global Operations Officer Kevin Gallagher 54 Vice President, Chief Engineering Officer Darío Vicario 58 Vice President, General Manager, Europe & Rest of World Kevin Holleran has served as President, Chief Executive Officer, and Director of the Company since August 2019.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS Information concerning our executive officers is set forth below: Name Age Position Kevin Holleran 57 President, Chief Executive Officer and Director Eifion Jones 58 Senior Vice President, Chief Financial Officer Susan Canning 56 Senior Vice President, Chief Legal Officer and Corporate Secretary John Collins 49 Senior Vice President, Chief Commercial Officer Raymond Lewis 61 Senior Vice President, Chief Human Resources Officer Eric Sejourne 59 Senior Vice President, Chief Global Operations Officer Kevin Gallagher 55 Vice President, Chief Engineering Officer Darío Vicario 59 Vice President, General Manager, Europe & Rest of World Kevin Holleran has served as President, Chief Executive Officer, and Director of the Company since August 2019.
(“Textron Specialized Vehicles”), a leading global manufacturer of purpose-built vehicles and equipment for a variety of commercial and recreational applications across a number of brands, as well as, Kautex, a tier one automotive supplier of fuel systems, selective catalytic reduction systems and cleaning solutions. Prior to 2017, Mr.
(“Textron Specialized Vehicles”), a leading global manufacturer of purpose-built vehicles and equipment for a variety of commercial and recreational applications across a number of brands, as well as, Kautex, a tier one automotive supplier of fuel systems, selective catalytic reduction systems and cleaning solutions.
Sejourne held various leadership positions at Assa Abloy, a lock, door, gate and entrance automation manufacturing company. His roles included President of the Access & Egress Hardware Group - Americas, Chief Operations Officer - Americas and President of the Architectural Accessories and Door Control Group. From 2008 until joining Assa Abloy, Mr.
Sejourne held various leadership positions at Assa Abloy, a lock, door, gate and entrance automation manufacturing company. His roles included President of the Access & Egress Hardware Group - Americas, Chief Operations Officer - Americas and President of the Architectural Accessories and Door Control Group.
Prior to Azkoven, from 2018 to 2021, he served as CEO of Thyssenkrupp Elevator for Iberia and Africa, where he oversaw the company’s digitalization and investment in Internet of Things (IoT) solutions. From 2012 through 2017, Mr. Vicario served as Managing Director South Europe for Gunnebo, a security integrations and payment technology company.
Vicario served as CEO of Azkoyen Group, a multinational vending, payment and security technology company, as well as non-executive Board member. Prior to Azkoven, from 2018 to 2021, he served as CEO of Thyssenkrupp Elevator for Iberia and Africa, where he oversaw the company’s digitalization and investment in Internet of Things solutions. 37 PART II
He holds an MBA from Wake Forest University and an undergraduate degree from Cornell University. Eifion Jones has served as Senior Vice President, Chief Financial Officer of the Company since April 2020. From 2011 until he joined Hayward, Mr. Jones served as the Chief Financial Officer of Cornerstone Holdings Inc.
Eifion Jones has served as Senior Vice President, Chief Financial Officer of the Company since April 2020. From 2011 until he joined Hayward, Mr. Jones served as the Chief Financial Officer of Cornerstone Chemical Company (“Cornerstone”), a portfolio company of private equity firms HIG Capital and, later, Littlejohn & Co. LLC.
Collins served in several leadership roles with Textron, including plant manager; director of sourcing; Vice President, Integrated Supply Chain; Vice President, Parts & Services and Vice President, Consumer Business. Raymond Lewis has served as Senior Vice President, Chief Human Resources Officer of the Company since May 2024. From February 2019 until he joined Hayward, Mr.
Raymond Lewis has served as Senior Vice President, Chief Human Resources Officer of the Company since May 2024. From February 2019 until he joined Hayward, Mr. Lewis served as Vice President, Human Resources, Residential HVAC & Supply at Trane Technologies. From 2016 to 2018, Mr.
Lewis served as Vice President, Human Resources, Residential HVAC & Supply at Trane Technologies. From 2016 to 2018, Mr. Lewis served as Executive Vice President and Chief HR Officer of Catalina Marketing, a digital media portfolio company of private equity firm Berkshire Partners, LLC. Prior to Catalina Marketing, Mr.
Lewis served as Executive Vice President and Chief HR Officer of Catalina Marketing, a digital media portfolio company of private equity firm Berkshire Partners, LLC. Eric Sejourne has served as Senior Vice President and Chief Global Operations Officer of the Company since April 2024. From 2010 until he joined Hayward, Mr.
He began his financial career with Courtaulds Plc in their European fibers businesses prior to its sale to Akzo Nobel N.V. Susan Canning has served as Senior Vice President, Chief Legal Officer and Corporate Secretary since joining the Company in June 2021. From 2018, until she joined Hayward, Ms.
In this role he oversaw the governance, performance, and financial management of Cornerstone’s U.S. and European companies, including leading all acquisition evaluation, diligence and integration efforts. Susan Canning has served as Senior Vice President, Chief Legal Officer and Corporate Secretary since joining the Company in June 2021. From 2018, until she joined Hayward, Ms.
Canning served as Senior Vice President, General Counsel and Corporate Secretary at GNC and was responsible for legal, compliance, ethics and quality matters. Prior to that, Ms.
Canning served as Senior Vice President, General Counsel and Corporate Secretary at GNC and was responsible for legal, compliance, ethics and quality matters. 36 John Collins has served as Senior Vice President and Chief Commercial Officer since December 2023. Previously he served as the Company’s Senior Vice President, Chief Supply Chain Officer having joined the Company in 2022.
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Holleran served for 10 years as the President and Chief Executive Officer of Textron Specialized Vehicles, Inc., during which time he grew revenue and profitability substantially through organic growth and acquisitions. Prior to his time at Textron, Mr. Holleran held several management positions at Ingersoll Rand and 34 Terex Corporation across the sales, marketing, and product management functions.
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Kevin Gallagher has served as Vice President, Chief Engineering Officer of the Company since May 2024. From 2021 until he joined Hayward, Mr. Gallagher served as Chief Technology Officer, Personal Protective Equipment (PPE) at Honeywell. From 2016 to 2021, Mr.
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(“Cornerstone”), a portfolio company of private equity firms HIG Capital and, later, Littlejohn & Co. LLC. In this role he oversaw the governance, performance, and financial management of Cornerstone’s U.S. and European companies, including leading all acquisition evaluation, diligence and integration efforts. Prior to Cornerstone, Mr.
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Jones spent 21 years with Akzo Nobel N.V., where he held financial and managerial leadership roles in the Americas and Europe, including SVP and General Manager for their Americas O&G protective coatings business and prior to that, SVP and CFO for their Americas industrial coatings business.
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Canning held roles on the Legal and Compliance team at Kellogg Company, including three years, based in Manchester, UK, as Kellogg Europe’s Regional General Counsel and seven years in Kellogg’s global headquarters counseling on securities, governance, investor relations, and corporate development matters. Additionally, from 1991 to 2008, Ms.
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Canning served in a variety of legal roles with JPMorgan Chase & Co., focused on mutual funds and counseling SEC-registered investment advisors. John Collins has served as Senior Vice President and Chief Commercial Officer since December 2023. Previously he served as the Company’s Senior Vice President, Chief Supply Chain Officer. Prior to joining Hayward, Mr.
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Lewis served as Senior Vice President and Chief HR Officer at Allegion, the security business spin off from Ingersoll Rand, where he had spent the prior six years as Vice President, HR, for several Ingersoll Rand businesses, including a year as Chief People Officer for Doosan, a divestiture of Ingersoll Rand, overseeing the U.S. and the Republic of Korea. Mr.
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Lewis served in the U.S. Army as a commissioned officer and helicopter test pilot, before joining GE Corporation in 1996, where he began his human resources career. Eric Sejourne has served as Senior Vice President and Chief Global Operations Officer of the Company since April 2024. From 2010 until he joined Hayward, Mr.
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Sejourne held the position of Vice President of Lean & Operational Excellence at Watts Water Technology, overseeing operations across North America, Asia and Europe.
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Prior to Watts Water Technology, he held positions of increasing seniority, including General Manager of Operations for the Northeast region, of Allegion, the security business spin-off from Ingersoll Rand, where he began his career in engineering and manufacturing. Kevin Gallagher has served as global Vice President, Chief Engineering Officer of the Company since May 2024.
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Beginning in 2007, he served as Vice President of Global Engineering and Quality at Dorman Products, Inc., a manufacturer of aftermarket automotive products. Mr. 35 Gallagher began his career in the automotive industry at Chrysler Corporation, where during his 13-year tenure he held engineering roles of increasing responsibility.
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Darío Vicario has served as Vice President, General Manager, Europe & Rest of World of the Company since May 2024, based in Spain. From 2022 until he joined Hayward, Mr. Vicario served as CEO of Azkoyen Group, a multinational vending, payment and security technology company, as well as non-executive Board member.
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Prior to that, he served as General Manager for the tire manufacturer Goodyear in Iberia and the Scandinavian region. As an industrial engineer, Mr. Vicario began his career at Bridgestone Europe, a global leader in premium tires and sustainable mobility solutions. 36 Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod (a) Total Number of Shares Purchased (b) Average Price Paid per Share (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Program (1) (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Program September 29 – November 2, 2024 — — — $ 400,000,000 November 3 – November 30, 2024 — — — 400,000,000 December 1 – December 31, 2024 — — — 400,000,000 Total — — — $ 400,000,000 (1) On July 26, 2022, the Board authorized the repurchase of up to an aggregate of $450 million of the Company’s outstanding shares of common stock, with such authorization expiring on July 26, 2025.
Biggest changePeriod (a) Total Number of Shares Purchased (b) Average Price Paid per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs ( in millions ) September 28 - November 1, 2025 250,000 $ 15.63 250,000 $ 446.1 November 2 - November 29, 2025 — — — 446.1 November 30 - December 31, 2025 — — — 446.1 Total 250,000 $ 15.63 250,000 $ 446.1 (1) On July 28, 2025, the Board of Directors authorized the Share Repurchase Program, which authorized the repurchase of up to an aggregate of $450.0 million of its common stock with such authority expiring on July 28, 2028.
The actual number of stockholders is greater than the number of record holders, and includes stockholders who are beneficial owners, whose shares are held of record by banks, brokers and other financial institutions. We do not currently expect to declare or pay dividends on our common stock for the foreseeable future.
The actual number of stockholders is greater than the number of record holders, and includes stockholders who are beneficial owners, whose shares of record are held by banks, brokers and other financial institutions. We do not currently expect to declare or pay dividends on our common stock for the foreseeable future.
Each of the cumulative returns is calculated assuming the investment of $100 in each of the securities at the closing price on the first day of trading of our common stock on the NYSE (March 12, 2021), and reinvestment of 37 dividends into additional shares of the respective equity securities when paid.
Each of the cumulative returns is calculated assuming the investment of $100 in each of the securities at the closing price on the first day of trading of our common stock on the NYSE (March 12, 2021), and reinvestment of dividends into additional shares of the respective equity securities when paid.
The following table sets forth all purchases made by us or on our behalf or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Exchange Act, of shares of our common stock during each month in the quarter ended December 31, 2024.
The following table sets forth all purchases made by us or on our behalf or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Exchange Act, of shares of our common stock during each month in the quarter ended December 31, 2025.
Under the repurchase program, we may purchase shares of our common stock on a discretionary basis from time to time.
Under the Share Repurchase Program, we may purchase shares of our common stock on a discretionary basis from time to time.
The Share Repurchase Program is primarily expected to be conducted through privately negotiated transactions, including with certain of our large stockholders, as well as through open market repurchases or other means, including through Rule 10b-18 trading plans or through the use of other techniques such as accelerated share repurchases.
The Share Repurchase Program is primarily expected to be conducted through privately negotiated transactions, as well as through open market repurchases or other means, including through Rule 10b-18 trading plans or through the use of other techniques such as accelerated share repurchases.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is publicly traded on the New York Stock Exchange (“NYSE”) under the symbol “HAYW.” As of February 25, 2025, there were 370 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is publicly traded on the New York Stock Exchange (“NYSE”) under the symbol “HAYW.” As of February 23, 2026, there were 404 holders of record of our common stock.
We believe the Russell 1000® Stock Index includes companies with market capitalization comparable to ours. We chose the Russell 1000® Index for comparison, as opposed to an industry index, because we do not believe that we can reasonably identify a peer group or a published industry or line-of-business index that contains companies in a similar line of business.
We chose the Russell 1000® Index for comparison, as opposed to an industry index, because we do not believe that we can reasonably identify a peer group or a published industry or line-of-business index that contains companies in a similar line of business.
On July 26, 2022, the Board renewed the initial authorization of its share repurchase program (the “Share Repurchase Program”) such that the Company is authorized commencing at that time to repurchase from time to time up to an aggregate of $450 million of our common stock with such authority expiring on July 26, 2025.
On July 28, 2025, the Board of Directors authorized a new share repurchase program (the “Share Repurchase Program”), such that the Company is authorized, commencing at that time, to repurchase from time to time up to an aggregate of $450.0 million of its common stock with such authority expiring on July 28, 2028.
March 12, 2021 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 Hayward Holdings, Inc. $100.00 $154.29 $55.29 $80.00 $89.94 Russell 1000 Stock Index $100.00 $119.96 $97.19 $121.94 $152.68 S&P 500 Index $100.00 $122.15 $99.95 $126.13 $157.52
Past performance is not necessarily indicative of future performance. 38 March 12, 2021 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 December 31, 2025 Hayward Holdings, Inc. $100.00 $154.29 $55.29 $80.00 $89.94 $90.88 Russell 1000 Stock Index $100.00 $119.96 $97.19 $121.94 $152.68 $178.96 S&P 500 Index $100.00 $122.15 $99.95 $126.13 $157.52 $185.42 ITEM 6. [RESERVED] 39
During Fiscal Year 2024, the Company did not repurchase any shares of its common stock under the plan. CUMULATIVE TOTAL RETURN PERFORMANCE GRAPH Set forth below is a line graph showing the change in the cumulative total shareholder return for our common stock as compared to similar returns for the S&P 500® Index and the Russell 1000® Stock Index.
CUMULATIVE TOTAL RETURN PERFORMANCE GRAPH Set forth below is a line graph showing the change in the cumulative total shareholder return for our common stock as compared to similar returns for the S&P 500® Index and the Russell 1000® Stock Index. We believe the Russell 1000® Stock Index includes companies with market capitalization comparable to ours.
The graph plots the respective values beginning on March 12 and continuing through December 31, 2024. Past performance is not necessarily indicative of future performance.
The graph plots the respective values beginning on March 12, 2021 and continuing through December 31, 2025.
Removed
Pursuant to this authorization, the Company may purchase shares of its common stock on a discretionary basis from time to time, which may be conducted through privately negotiated transactions, including with MSD Partners, as well as through open market repurchase or other means, including through Rule 10b5-1(c) trading plans or through the use of other techniques such as accelerated share repurchases.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest change(d) Adjustments in the year ended December 31, 2024 are primarily driven by a $3.3 million increase in cost of goods sold resulting from the fair value inventory step-up adjustment recognized as part of the purchase accounting for the acquisition of the ChlorKing business, $0.7 million of costs sustained from flood damage associated with a hurricane at a contract manufacturing facility and $0.5 million of costs incurred related to litigation, partially offset by $0.5 million of gains on the sale of assets.
Biggest changeAdjustments in the year ended December 31, 2024 are primarily driven by a $3.3 million increase in cost of goods sold resulting from the fair value inventory step-up adjustment recognized as part of the purchase accounting for the acquisition of the ChlorKing business, $0.7 million of costs sustained from flood damage associated with a hurricane at a contract manufacturing facility and $0.5 million of costs incurred related to litigation, partially offset by $0.5 million of gains on the sale of assets. 49 Following is a reconciliation from segment income and segment income margin to adjusted segment income and adjusted segment income margin for NAM (dollars in thousands): NAM Years Ended December 31, 2025 2024 Segment income $ 284,758 $ 261,735 Depreciation 19,540 17,989 Amortization 6,990 6,985 Stock-based compensation (a) — 176 Other (b) (605) 4,079 Total adjustments 25,925 29,229 Adjusted segment income $ 310,683 $ 290,964 Segment income margin 29.7 % 29.2 % Adjusted segment income margin 32.4 % 32.5 % (a) Represents non-cash stock-based compensation expense related to equity awards issued to management, employees, and directors.
Acquisition and restructuring related costs (or income) The Company records costs or expenses incurred related to business combinations, organizational restructuring, or gains or losses attributable to any sales or dispositions of assets, including impairments, to acquisition and restructuring related expense, net.
Acquisition and restructuring related expense (or income) The Company records costs or expenses incurred related to business combinations, organizational restructuring, or gains or losses attributable to any sales or dispositions of assets, including impairments, to acquisition and restructuring related expense, net.
EBITDA, adjusted EBITDA, and 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 operating income, which are prepared in accordance with GAAP.
EBITDA, adjusted EBITDA and 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.
If it is determined a quantitative assessment is necessary, we would compare their estimated fair values to their carrying values. Fair value is generally estimated using discounted cash flows or relief from royalty approaches. We would recognize an impairment charge when the estimated fair value of the indefinite lived intangible asset is less than its carrying value.
If it is determined a quantitative assessment is necessary, we would compare their estimated fair values to their carrying values. Fair value is generally estimated using discounted cash flows or relief from royalty approaches. We recognize an impairment charge when the estimated fair value of the indefinite lived intangible asset is less than its carrying value.
Other than warranty and variable compensation, SG&A is generally not directly proportional to net sales. Research, development and engineering expense The Company primarily conducts RD&E activities in its own facilities. These expenses consist primarily of salaries, supplies and overhead costs related to the active development of new products, enhanced product applications and improved manufacturing and value engineering of existing products.
Other than variable compensation, SG&A is generally not directly proportional to net sales. Research, development and engineering expense The Company primarily conducts RD&E activities in its own facilities. These expenses consist primarily of salaries, supplies and overhead costs related to the active development of new products, enhanced product applications and improved manufacturing and value engineering of existing products.
Further, other adjustments for the year ended December 31, 2024 include $1.1 million of transaction and integration costs associated with the acquisition of the ChlorKing business, $0.9 million of termination benefits related to a reduction-in-force within E&RW, $0.8 million of separation and other costs associated with the centralization and consolidation of operations in Europe and $0.4 million of costs to finalize restructuring actions initiated in prior years.
Other adjustments for the year ended December 31, 2024 include $1.1 million of transaction and integration costs associated with the acquisition for the ChlorKing business, $0.9 million of termination benefits related to a reduction-in-force within E&RW, $0.8 million of separation and other costs associated with the centralization and consolidation of operations in Europe and $0.4 million of costs to finalize restructuring actions initiated in prior years.
(b) Adjustments in the year ended December 31, 2024 for NAM include a $3.3 million increase in cost of goods sold resulting from the fair value inventory step-up adjustment recognized as part of the purchase accounting for the acquisition of the ChlorKing business and $0.7 million of costs related to a flood sustained at a contract manufacturer.
Adjustments in the year ended December 31, 2024 for NAM include a $3.3 million increase in cost of goods sold resulting from the fair value inventory step-up adjustment recognized as part of the purchase accounting for the acquisition of the ChlorKing business and $0.7 million of costs related to a flood sustained at a contract manufacturer.
Gross profit margin is impacted by costs of raw material, product mix, salary and wage inflation, production costs, shipping and handling costs, and import duties, all of which can vary. Selling, general and administrative expense Our SG&A includes expenses arising from activities in selling, marketing, technical and customer services, warranty, warehousing, and administrative expenses.
Gross profit margin is impacted by costs of raw material, product mix, salary and wage inflation, production costs, shipping and handling costs, and import duties, all of which can vary. Selling, general and administrative expense Our SG&A includes expenses arising from activities in selling, marketing, technical and customer services, warehousing, and administrative expenses.
For more information, see “—Key Factors and Measures We Use to Evaluate Our Business—Net Sales.’’ We aim to keep our manufacturing plants running at a constant level throughout the year and consequently we generally build inventory in the first and third quarters and inventory is sold-down in the second and fourth quarters.
For more information, see “—Key Factors and Measures We Use to Evaluate Our Business—Net Sales.” We aim to keep our manufacturing plants running at a constant level throughout the year and consequently we generally build inventory in the first and third quarters and inventory is sold-down in the second and fourth quarters.
The grant-date fair value of the award is recognized as compensation expense ratably over the requisite service period, which generally equals the vesting period of the award. We also grant performance-based restricted share units (“PSUs”). PSU awards are recognized as compensation expense beginning at the grant date and reassessed quarterly for probability.
The grant-date fair value of the award is recognized as compensation expense ratably over the requisite service period, which generally equals the vesting period of the award. We also grant performance-based restricted share units (“PSUs”). PSU awards are recognized as compensation expense beginning at the grant date and 55 reassessed quarterly for probability.
Also, because most 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. • Targeted expansion efforts.
Also, because most of our sales are to distributors whose inventory of our products may vary, including due to reasons beyond our control, such 40 as end-user demand, supply chain lead times and macroeconomic factors, our revenue may fluctuate from period to period. • Targeted expansion efforts.
The qualitative impairment assessment includes considering various factors including macroeconomic conditions, industry and market conditions, cost factors and any reporting unit specific events. If it is determined through the qualitative assessment that the reporting unit’s fair value is more 54 likely than not greater than its carrying value, the quantitative impairment assessment is not required.
The qualitative impairment assessment includes considering various factors including macroeconomic conditions, industry and market conditions, cost factors and any reporting unit specific events. If it is determined through the qualitative assessment that the reporting unit’s fair value is more likely than not greater than its carrying value, the quantitative impairment assessment is not required.
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. 40 Key Factors and Measures We Use to Evaluate Our Business We consider a variety of financial and operating measures in assessing the performance of our business.
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 Factors and Measures We Use to Evaluate Our Business We consider a variety of financial and operating measures in assessing the performance of our business.
For information about our use of these Non-GAAP measures and a reconciliation of these metrics to the nearest GAAP metric see “—Non-GAAP Reconciliation.” Results of Operations The following tables summarize key components of our results of operations for the periods indicated, both in dollars and as a percentage of our net sales.
For information about our use of these Non-GAAP measures and a reconciliation of these metrics to the nearest GAAP metric see “—Non-GAAP Reconciliation.” 42 Results of Operations The following tables summarize key components of our results of operations for the periods indicated, both in dollars and as a percentage of our net sales.
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 consolidated statements of cash flows. We record the discount in the “Other expense, net” line in the consolidated statements of operations.
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 consolidated statement of cash flows . We record the discount in the “Other expense, net” line in the consolidated statements of operations.
If the qualitative assessment indicates it is more likely than not that the reporting unit’s fair value is no greater than its carrying value, we must perform a quantitative impairment assessment. If it is determined a quantitative assessment is necessary, we would compare the fair value of the reporting unit to the respective carrying value, which includes goodwill.
If the qualitative assessment indicates it is more likely than not that the reporting unit’s fair value is no greater than its carrying value, we must perform a quantitative impairment assessment. If it is determined a quantitative assessment is necessary, we compare the fair value of the reporting unit to the respective carrying value, which includes goodwill.
See “— Non-GAAP Reconciliation” for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures. 44 Segment Results of Operations The Company manages its business primarily on a geographic basis. The Company’s reportable segments consist of NAM and E&RW.
See “— Non-GAAP Reconciliation” for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures. Segment Results of Operations The Company manages its business primarily on a geographic basis. The Company’s reportable segments consist of NAM and E&RW.
Due to the uncertainty and potential volatility of the factors used in establishing estimates, changes in assumptions could materially affect our financial condition and results of operations. 55 Acquisitions We apply the provisions of the Accounting Standards Codification (“ASC”) 805, Business Combinations.
Due to the uncertainty and potential volatility of the factors used in establishing estimates, changes in assumptions could materially affect our financial condition and results of operations. Acquisitions We apply the provisions of the Accounting Standards Codification (“ASC”) 805, Business Combinations.
Geopolitical conflicts around the world have created substantial uncertainty in the global economy, including as a result of sanctions and penalties imposed in response to these conflicts.
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.
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 entitled measures of other companies and may not be an appropriate measure for performance relative to other companies.
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.
Gross profit and gross profit margin Gross profit is equal to net sales less cost of sales. Cost of sales includes the direct cost of manufacturing, including direct materials, labor and related overhead, as well as inbound and outbound freight and import duties. Gross profit margin is gross profit as a percentage of net sales.
Gross profit and gross profit margin Gross profit is equal to net sales less cost of sales. Cost of sales includes the direct cost of manufacturing, including direct materials, labor and related overhead, as well as warranty, inbound and outbound freight and import duties. 41 Gross profit margin is gross profit as a percentage of net sales.
“Long-Term Debt” of Notes to Consolidated Financial Statements in this Form 10-K and “Liquidity and Capital Resources”. (b) Operating lease commitments primarily relate to our office, distribution, and manufacturing facilities. All of these obligations require cash payments to be made by us over varying periods of time.
“Long-Term Debt” of Notes to Consolidated Financial Statements in this Annual Report on Form 10-K and “Liquidity and Capital Resources”. (b) Operating lease commitments primarily relate to our office, distribution, and manufacturing facilities. All of these obligations require cash payments to be made by us over varying periods of time.
We derived the consolidated statements of operations for the Fiscal Years 2024 and 2023 from our audited consolidated financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future.
We derived the consolidated statements of operations for Fiscal Years 2025 and 2024 from our audited consolidated financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future.
Certain leases are renewable at our option for periods of one to ten years and certain of these arrangements are cancellable on short notice while others require payment upon early termination. Refer to Note 15 . “Leases” of Notes to Consolidated Financial Statements in this Form 10-K for further information.
Certain leases are renewable at our option for periods of one to 10 years and certain of these arrangements are cancellable on short notice while others require payment upon early termination. Refer to Note 15 . “Leases” of Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for further information.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2023, compared to the year ended December 31, 2022, is included under “Part II, Item 7.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2024, compared to the year ended December 31, 2023, is included under “Part II, Item 7.
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.
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.
If the fair value of the reporting unit exceeds its carrying value, goodwill is not considered impaired. If the carrying value is higher than the fair value, the difference would be recognized as an impairment loss.
If the fair value of the reporting unit exceeds its carrying value, goodwill is not considered impaired. If the carrying value is higher than the fair value, the difference is recognized as an impairment loss.
Adjusted segment income represents segment income adjusted for the impact of depreciation, amortization of certain intangible assets, 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 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.
Loss on extinguishment of debt The $4.9 million loss on extinguishment of debt was incurred as a result of the voluntary repayment of the Incremental Term Loan B principal balance in April 2024.
The $4.9 million loss on extinguishment of debt for Fiscal Year 2024 was incurred as a result of the voluntary repayment of the Incremental Term Loan B principal balance in April 2024.
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 and replace equipment and remodel and upgrade their pools.
Our product replacement cycle of approximately eight 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.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 , filed with the SEC on February 29, 2024.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 , filed with the SEC on February 27, 2025.
We use the Black-Scholes option pricing model to estimate the fair value of option awards. Warranties We provide base warranties on the products we sell for specific periods of time, which vary depending upon the type of product and the geographic location of its sale.
We use the Black-Scholes option pricing model to estimate the fair value of option awards and a Monte Carlo simulation model to estimate the fair value of PSU awards. Warranties We provide base warranties on the products we sell for specific periods of time, which vary depending upon the type of product and the geographic location of its sale.
NAM and E&RW accounted for approximately 85% and 15%, and 83% and 17%, of total net sales for Fiscal Year 2024 and Fiscal Year 2023, respectively. 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.
NAM and E&RW accounted for approximately 85% and 15% of total net sales, respectively, for both Fiscal Year 2025 and Fiscal Year 2024. NAM 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 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 50% if the First Lien Leverage Ratio is greater than 3.0x, less certain allowed deductions, in each case as of December 31 of the prior 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.
Off-Balance Sheet Arrangements We had $4.3 million of outstanding letters of credit on our ABL Facility as of each of December 31, 2024 and December 31, 2023. Critical Accounting Estimates Our consolidated financial statements have been prepared in accordance with GAAP.
Off-Balance Sheet Arrangements We had $3.9 million and $4.3 million of outstanding letters of credit on our ABL Facility as of December 31, 2025 and December 31, 2024, respectively. 54 Critical Accounting Estimates Our consolidated financial statements have been prepared in accordance with GAAP.
In the case of SOFR tranches, 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 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.
Interest expense in Fiscal Year 2024 consisted of $68.0 million of interest on the outstanding debt, net of the impact from the interest rate swaps, and $4.2 million of amortization of deferred financing fees, partially offset by $10.1 million of interest income.
Interest expense in Fiscal Year 2024 consisted of $68.0 million of interest on the outstanding debt, net of the impact from the interest rate swaps, and $4.2 million of amortization of deferred financing fees, partially offset by $10.1 million of interest income. Loss on extinguishment of debt There was no loss on extinguishment of debt in Fiscal Year 2025.
We have an estimated North American seasonal residential pool market share of approximately 33%. We believe that we are well-positioned for future growth. Historically aftermarket sales represented 80% of our 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.
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.
We may use third party valuation specialists to determine the assets acquired, liabilities assumed, and corresponding offset to goodwill. Recently Issued and Adopted Accounting Standards See Note 2 . “Significant Accounting Policies” of Notes to Consolidated Financial Statements in this Form 10-K for additional information. 56
We may use third-party valuation specialists to determine the assets acquired, liabilities assumed, and corresponding offset to goodwill. Recently Issued Accounting Standards See Note 2. "Significant Accounting Policies" of Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for additional information. 56
The full amount held in escrow will be released to the specified key employees if such employees are employed by Hayward on the one-year anniversary of the acquisition. These payments are contingent on continued employment and are not dependent on the achievement of any metric or performance measure.
Pursuant to the ChlorKing acquisition agreement, the full amount held in escrow was released to the specified key employees if such employees were employed by Hayward on the one-year anniversary of the acquisition. These payments were contingent on continued employment and were not dependent on the achievement of any metric or performance measure.
The $6.5 million expense in Fiscal Year 2024 was primarily driven by $4.3 million of acquisition and integration costs associated with the acquisition of the ChlorKing business, including $3.2 million of compensation expenses for the retention of key employees acquired in the ChlorKing acquisition. Fiscal Year 2024 also included costs associated with the centralization and consolidation of operations in Europe.
In comparison, the $6.5 million expense in Fiscal Year 2024 was primarily driven by $4.3 million of acquisition and integration costs associated with the acquisition of the ChlorKing business, which included $3.2 million of compensation expenses for the retention of key employees acquired in the ChlorKing acquisition.
As of December 31, 2024, goodwill and indefinite lived intangible assets were $943.6 million and $736.0 million, respectively. For goodwill, we may first make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying value.
As of December 31, 2025, goodwill and indefinite lived intangible assets were $951.2 million and $1,003.0 million, respectively. For goodwill, we may first make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying value.
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. 39 Key Trends and Uncertainties Regarding Our Existing Business The following trends and uncertainties affect the period-to-period comparability of our results of operations and may affect our financial performance in the future: • Demand related to the aging base of pools and the COVID-19 pandemic.
E&RW 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. Key Trends and Uncertainties Regarding Our Existing Business The following trends and uncertainties affect the period-to-period comparability of our results of operations and may affect our financial performance in the future: • Seasonality.
As of December 31, 2024, the loan balance was zero with a borrowing availability of $163.4 million. For the year ended December 31, 2023, the average borrowing base under the ABL Facility was $265.8 million and the average loan balance outstanding was $17.3 million.
For the year ended December 31, 2024, the average borrowing base under the ABL Facility was $212.6 million, and the average loan balance outstanding was zero. As of December 31, 2024 the loan balance was zero with a borrowing availability of $163.4 million.
See segment discussion below for further information. 2024 Volume 1.8 % Price, net of discounts and allowances 3.2 % Acquisitions 1.1 % Currency and other (0.1) % Total 6.0 % The Fiscal Year 2024 increase in net sales was primarily driven by an increase in net price, as well as by an increase in volume and the favorable impact from acquisitions.
See segment discussion below for further information. 2025 Price, net of discounts and allowances 5.4 % Acquisitions 1.1 % Currency and other 0.2 % Volume — % Total 6.7 % The Fiscal Year 2025 increase in net sales was primarily driven by positive net price and the favorable impact from acquisitions.
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. We manufacture our products at seven facilities worldwide, which are located in North Carolina, Georgia, Tennessee, Rhode Island, Spain (two) and China.
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.
The decrease was primarily due to the repayment of the Incremental Term Loan B principal balance in April 2024 and interest income on cash investment balances.
The decrease was 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 investment balances.
Operating income Operating income is gross profit less SG&A, RD&E, acquisition and restructuring related expense or income and amortization of intangible assets. Operating income excludes interest expense, income tax expense, and other non-operating expenses, net.
Operating income Operating income is gross profit less SG&A, RD&E, acquisition and restructuring related expense or income and amortization of intangible assets. Operating income excludes interest expense, income tax expense, and other non-operating expenses, net. We use operating income as well as other indicators as a measure of the profitability of our business.
Following is a reconciliation from segment income to adjusted segment income for E&RW (dollars in thousands): Years Ended December 31, 2024 2023 Segment income $ 21,632 $ 33,518 Depreciation 1,215 940 Amortization — — Stock-based compensation (a) 10 45 Total Adjustments 1,225 985 Adjusted segment income $ 22,857 $ 34,503 Segment income margin 13.9 % 19.8 % Adjusted segment income margin 14.6 % 20.4 % (a) Represents non-cash stock-based compensation expense related to equity awards issued to management, employees, and directors.
Following is a reconciliation from segment income and segment income margin to adjusted segment income and adjusted segment income margin for E&RW (dollars in thousands): E&RW Years Ended December 31, 2025 2024 Segment income $ 26,540 $ 21,632 Depreciation 1,761 1,215 Stock-based compensation (a) — 10 Total Adjustments 1,761 1,225 Adjusted segment income $ 28,301 $ 22,857 Segment income margin 16.3 % 13.9 % Adjusted segment income margin 17.4 % 14.6 % (a) Represents non-cash stock-based compensation expense related to equity awards issued to management, employees, and directors.
Gross profit and Gross profit margin Gross profit increased to $530.8 million in Fiscal Year 2024 from $477.0 million in Fiscal Year 2023, an increase of $53.8 million or 11.3%.
Gross profit and Gross profit margin Gross profit increased to $59.8 million in Fiscal Year 2025 from $53.7 million in Fiscal Year 2024, an increase of $6.1 million, or 11.3%.
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. 48 Following is a reconciliation from net income to adjusted EBITDA (dollars in thousands): Years Ended December 31, 2024 2023 Net income $ 118,655 $ 80,687 Depreciation 20,078 15,983 Amortization 35,783 37,079 Interest expense 62,163 73,584 Income taxes 25,527 20,400 Loss on extinguishment of debt 4,926 — EBITDA 267,132 227,733 Stock-based compensation (a) 608 1,270 Currency exchange items (b) (836) 786 Acquisition and restructuring related expense, net (c) 6,464 13,213 Other (d) 4,079 4,271 Total Adjustments 10,315 19,540 Adjusted EBITDA $ 277,447 $ 247,273 Net income margin 11.3 % 8.1 % Adjusted EBITDA margin 26.4 % 24.9 % (a) Represents non-cash stock-based compensation expense related to equity awards issued to management, employees, and directors.
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. 48 Net Income and Net Income Margin to Adjusted EBITDA and Adjusted EBITDA Margin Following is a reconciliation from net income and net income margin to adjusted EBITDA and adjusted EBITDA margin: (Dollars in thousands) Years Ended December 31, 2025 2024 Net income $ 151,570 $ 118,655 Depreciation 22,835 20,078 Amortization 34,451 35,783 Interest expense, net 50,282 62,163 Income taxes 33,067 25,527 Loss on debt extinguishment — 4,926 EBITDA 292,205 267,132 Stock-based compensation (a) 57 608 Currency exchange items (b) 79 (836) Acquisition and restructuring related expense, net (c) 3,886 6,464 Other (d) 3,052 4,079 Total Adjustments 7,074 10,315 Adjusted EBITDA $ 299,279 $ 277,447 Net income margin 13.5 % 11.3 % Adjusted EBITDA margin 26.7 % 26.4 % (a) Represents non-cash stock-based compensation expense related to equity awards issued to management, employees, and directors.
The retention costs will be recognized over the twelve-month period from the date of acquisition.
The retention costs were recognized over the 12-month period from the date of acquisition.
Research, development and engineering expense RD&E expense increased to $25.8 million in Fiscal Year 2024 compared to $24.5 million in Fiscal Year 2023, an increase of $1.3 million, or 5.0%. As a percentage of net sales, RD&E remained relatively flat at 2.5% in each year. RD&E spend continues to be focused on new product development and new product quality.
Research, development and engineering expense RD&E expense increased to $27.2 million in Fiscal Year 2025 compared to $25.8 million in Fiscal Year 2024, an increase of $1.4 million, or 5.5%. As a percentage of net sales, RD&E remained relatively flat at 2.4% in Fiscal Year 2025 as compared to 2.5% in Fiscal Year 2024.
As a percentage of net sales, SG&A increased to 24.8% in Fiscal Year 2024 as compared to 23.5% in Fiscal Year 2023, an increase of 130 basis points, primarily due to the factors described above.
As a percentage of net sales, SG&A increased to 22.0% in Fiscal Year 2025 as compared to 20.6% in Fiscal Year 2024, an increase of 140 basis points, primarily due to the factors described above.
Provision for income taxes We incurred income tax expense of $25.5 million for Fiscal Year 2024 and $20.4 million for Fiscal Year 2023, a increase of $5.1 million or 25.1%. This increase in tax expense was primarily due to increased income from operations.
Provision for income taxes We incurred income tax expense of $33.1 million for Fiscal Year 2025 and $25.5 million for Fiscal Year 2024, an increase of $7.6 million, or 29.5%. This increase in tax expense was primarily due to increased operating income.
Adjusted EBITDA Adjusted EBITDA increased to $277.4 million in Fiscal Year 2024 from $247.3 million in Fiscal Year 2023, an increase of $30.1 million, or 12.2%, driven primarily by increased net sales and an increase in gross profit of $53.8 million, partially offset by an increase in SG&A expenses of $27.3 million.
Adjusted EBITDA Adjusted EBITDA increased to $299.3 million in Fiscal Year 2025 from $277.4 million in Fiscal Year 2024, an increase of $21.9 million, or 7.9%, driven primarily by increased net sales and higher gross profit, partially offset by an increase in SG&A expenses.
The borrowings under the ABL Facility bear interest at a rate equal to an adjusted term of the Secured Overnight Financing Rate (“SOFR”) or a base rate plus a margin of between 1.25% to 1.75% or 0.25% to 0.75%, respectively, while the FILO Sublimit borrowings bear interest at a rate equal to SOFR or a base rate plus a margin of between 2.25% to 2.75% or 1.25% to 1.75%, respectively.
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%.
Operating income as a percentage of net sales (“operating margin”) was 19.9% in Fiscal Year 2024, a 220 basis point increase from the 17.7% operating margin in Fiscal Year 2023. Interest expense, net Interest expense, net, decreased to $62.2 million in Fiscal Year 2024 from $73.6 million in Fiscal Year 2023, a decrease of $11.4 million, or 15.5%.
Operating income as a percentage of net sales (“operating margin”) was 20.8% in Fiscal Year 2025, a 90 basis point increase from the 19.9% operating margin in Fiscal Year 2024. 44 Interest expense, net Interest expense, net, decreased to $50.3 million in Fiscal Year 2025 from $62.2 million in Fiscal Year 2024, a decrease of $11.9 million, or 19.1%.
We use operating income as well as other indicators as a measure of the profitability of our business. 41 Interest expense, net The Company incurs interest expense on its Credit Facilities, as defined herein. The amortization of debt issuance costs and impact of our interest rate hedging instruments are also included in interest expense.
Interest expense, net The Company incurs interest expense on its Credit Facilities, as defined herein. The amortization of debt issuance costs and impact of our interest rate hedging instruments are also included in interest expense. Net income Net income is operating income less net interest expense, other non-operating items, and provision for income taxes.
As such, the Company did not need to proceed beyond the qualitative analysis, and no goodwill impairments were recorded. For the year-ended December 31, 2023, the Company performed a quantitative analysis and determined that the fair value of each of the reporting units exceeded the corresponding carrying value.
For the years ended December 31, 2025 and 2024, the Company performed a qualitative analysis and determined that the fair values of the reporting units were more likely than not greater than the carrying amounts. As such, the Company did not need to proceed beyond the qualitative analysis, and no goodwill impairments were recorded.
Operating income and operating income margin Operating income increased to $208.8 million in Fiscal Year 2024 from $175.2 million in Fiscal Year 2023, an increase of $33.6 million, or 19.2%, due to the accumulated effect of the items described above.
Operating income and operating income margin Operating income increased to $233.3 million in Fiscal Year 2025 from $208.8 million in Fiscal Year 2024, an increase of $24.5 million, or 11.7%, due to the accumulated effect of the items described above.
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.
Segments Our business is organized into two reportable segments: NAM and 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 Company's CODM is the President and Chief Executive Officer.
Segment income and Segment income margin Segment income decreased to $21.6 million in Fiscal Year 2024 from $33.5 million in Fiscal Year 2023, a decrease of $11.9 million, or 35.5%. This was primarily driven by a decrease in sales and gross profit as discussed above.
Segment income and Segment income margin Segment income increased to $26.5 million in Fiscal Year 2025 from $21.6 million in Fiscal Year 2024, an increase of $4.9 million, or 22.7%. This was primarily driven by an increase in net sales and gross profit as discussed above.
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. The Organisation for Economic Co-operation and Development introduced an international tax framework under Pillar Two which includes a global minimum tax of 15%.
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.
Europe & Rest of World (“E&RW”) (Dollars in thousands) Years Ended December 31, 2024 2023 Net sales $ 156,108 $ 169,176 Gross profit $ 56,483 $ 66,309 Gross profit margin % 36.2 % 39.2 % Segment income $ 21,632 $ 33,518 Segment income margin % 13.9 % 19.8 % Adjusted segment income (a) $ 22,857 $ 34,503 Adjusted segment income margin % (a) 14.6 % 20.4 % (a) See “—Non-GAAP Reconciliation.” Year-over-year net sales decrease was driven by the following: 2024 Volume (8.5) % Price, net of discounts and allowances 1.0 % Currency and other (0.2) % Total (7.7) % Net sales Net sales decreased to $156.1 million in Fiscal Year 2024 from $169.2 million in Fiscal Year 2023, a decrease of $13.1 million, or 7.7%.
Europe & Rest of World (Dollars in thousands) Years Ended December 31, 2025 2024 Net sales $ 162,997 $ 156,108 Gross profit $ 59,784 $ 53,702 Gross profit margin % 36.7 % 34.4 % Segment income $ 26,540 $ 21,632 Segment income margin % 16.3 % 13.9 % Adjusted segment income (a) $ 28,301 $ 22,857 Adjusted segment income margin % (a) 17.4 % 14.6 % (a) See “—Non-GAAP Reconciliation.” The year-over-year net sales increase was driven by the following: 2025 Volume 2.2 % Currency and other 2.1 % Price, net of allowances and discounts 0.1 % Total 4.4 % Net sales Net sales increased to $163.0 million in Fiscal Year 2025 from $156.1 million in Fiscal Year 2024, an increase of $6.9 million, or 4.4%.
North America (“NAM’’) (Dollars in thousands) Years Ended December 31, 2024 2023 Net sales $ 895,498 $ 823,276 Gross profit $ 474,274 $ 410,641 Gross profit margin % 53.0 % 49.9 % Segment income $ 261,735 $ 215,425 Segment income margin % 29.2 % 26.2 % Adjusted segment income (a) $ 290,964 $ 237,693 Adjusted segment income margin % (a) 32.5 % 28.9 % (a) See “—Non-GAAP Reconciliation.” Year-over-year net sales increase was driven by the following: 2024 Volume 4.0 % Price, net of discounts and allowances 3.6 % Acquisitions 1.4 % Currency and other (0.2) % Total 8.8 % Net sales Net sales increased to $895.5 million in Fiscal Year 2024 from $823.3 million in Fiscal Year 2023, an increase of $72.2 million, or 8.8%.
See “—Non-GAAP Reconciliation” for a reconciliation of these metrics to the most directly comparable GAAP metric. 45 North America (Dollars in thousands) Year Ended December 31, 2025 December 31, 2024 Net sales $ 959,158 $ 895,498 Gross profit $ 478,906 $ 433,274 Gross profit margin % 49.9 % 48.4 % Segment income $ 284,758 $ 261,735 Segment income margin % 29.7 % 29.2 % Adjusted segment income (a) $ 310,683 $ 290,964 Adjusted segment income margin % (a) 32.4 % 32.5 % (a) See “—Non-GAAP Reconciliation.” The year-over-year net sales increase was driven by the following factors: 2025 Price, net of allowances and discounts 6.3 % Acquisitions 1.3 % Currency and other (0.1) % Volume (0.3) % Total 7.1 % Net sales Net sales increased to $959.2 million in Fiscal Year 2025 from $895.5 million in Fiscal Year 2024, an increase of $63.7 million, or 7.1%.
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 t he 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 agreement is uncommitted and t he 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.
Sources and Uses of Cash Following is a summary of our cash flows from operating, investing, and financing activities (dollars in thousands): Years Ended December 31, 2024 2023 Net cash provided by operating activities $ 212,068 $ 184,540 Net cash used in investing activities (54,131) (55,381) Net cash used in financing activities (136,790) (7,612) Effect of exchange rate changes on cash and cash equivalents and restricted cash (2,655) 373 Change in cash and cash equivalents and restricted cash $ 18,492 $ 121,920 Net cash provided by operating activities Net cash provided by operating activities increased to $212.1 million for the year ended December 31, 2024 from $184.5 million for the year ended December 31, 2023, an increase of $27.6 million, or 14.9%.
As of December 31, 2025 , we were in compliance with all covenants under the Credit Facilities. 53 Sources and Uses of Cash Following is a summary of our cash flows from operating, investing, and financing activities: (Dollars in thousands) Year Ended December 31, 2025 2024 Net cash provided by operating activities $ 256,034 $ 212,068 Net cash used in investing activities (103,777) (54,131) Net cash used in financing activities (20,846) (136,790) Effect of exchange rate changes on cash and cash equivalents 1,648 (2,655) Change in cash and cash equivalents $ 133,059 $ 18,492 Net cash provided by operating activities Net cash provided by operating activities increased to $256.0 million for the year ended December 31, 2025 from $212.1 million for the year ended December 31, 2024, an increase of $43.9 million, or 20.7%.
Interest expense in Fiscal Year 2023 consisted of $76.0 million on the outstanding debt and $4.7 million of amortization of deferred financing fees, partially offset by $7.1 million of interest income.
Interest expense in Fiscal Year 2025 consisted of $59.7 million of interest on the outstanding debt, net of the impact from the interest rate swaps, and $3.8 million of amortization of deferred financing fees, partially offset by $13.2 million of interest income.
Refer to Note 9 , “Long-Term Debt” of Notes to the Consolidated Financial Statements in this Form 10-K for further information on the terms of the Credit Facilities. 51 Long-term debt consisted of the following (in thousands): December 31, 2024 2023 First Lien Term Facility, due May 28, 2028 $ 965,000 $ 975,000 Incremental Term Loan B, due May 28, 2028 — 123,438 ABL Revolving Credit Facility — — Other bank debt 6,461 8,775 Finance lease obligations 2,448 4,729 Subtotal 973,909 1,111,942 Less: Current portion of long-term debt (13,991) (15,088) Less: Unamortized debt issuance costs (9,356) (17,574) Total $ 950,562 $ 1,079,280 ABL Facility The aggregate amount of the revolving loan commitments on the ABL Facility is $425.0 million, with a peak season commitment of $475.0 million, subject to a borrowing base calculation based on available eligible receivables, inventory, and qualified cash in North America.
Long-term debt consisted of the following (in thousands): December 31, 2025 2024 First Lien Term Facility, due May 28, 2028 $ 955,000 $ 965,000 Other bank debt 4,826 6,461 Finance lease obligations 3,639 2,448 Subtotal 963,465 973,909 Less: Current portion of the long-term debt (13,261) (13,991) Less: Unamortized debt issuance costs (6,657) (9,356) Total $ 943,547 $ 950,562 52 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 sold under the Receivables Purchase Agreement are not eligible receivables 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.
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.
The following table summarizes our results of operations and a comparison of the change between the periods (in thousands): Years Ended December 31, 2024 2023 Net Sales $ 1,051,606 $ 992,452 Cost of sales 520,849 515,502 Gross profit 530,757 476,950 Selling, general, and administrative expense 260,928 233,607 Research, development, and engineering expense 25,778 24,547 Acquisition and restructuring related expense 6,464 13,213 Amortization of intangible assets 28,800 30,361 Operating income 208,787 175,222 Interest expense, net 62,163 73,584 Loss on debt extinguishment 4,926 — Other expense (income), net (2,484) 551 Total other expense 64,605 74,135 Income from operations before income taxes 144,182 101,087 Provision for income taxes 25,527 20,400 Net income $ 118,655 $ 80,687 Adjusted EBITDA (a) $ 277,447 $ 247,273 (a) See “— Non-GAAP Reconciliation.” 42 Fiscal Year 2024 Compared to Fiscal Year 2023 Net sales Net sales increased to $1,051.6 million in Fiscal Year 2024 from $992.5 million in Fiscal Year 2023, an increase of $59.1 million, or 6.0%.
The following table summarizes our results of operations and a comparison of the change between the periods (in thousands): Years Ended December 31, 2025 2024 Net Sales $ 1,122,155 $ 1,051,606 Cost of sales 583,465 564,630 Gross profit 538,690 486,976 Selling, general, and administrative expense 246,892 217,147 Research, development, and engineering expense 27,201 25,778 Acquisition and restructuring related expense 3,886 6,464 Amortization of intangible assets 27,461 28,800 Operating income 233,250 208,787 Interest expense, net 50,282 62,163 Loss on debt extinguishment — 4,926 Other income, net (1,669) (2,484) Total other expense 48,613 64,605 Income from operations before income taxes 184,637 144,182 Provision for income taxes 33,067 25,527 Net income $ 151,570 $ 118,655 Adjusted EBITDA (a) $ 299,279 $ 277,447 (a) See “— Non-GAAP Reconciliation.” Fiscal Year 2025 Compared to Fiscal Year 2024 Net sales Net sales increased to $1,122.2 million in Fiscal Year 2025 from $1,051.6 million in Fiscal Year 2024, an increase of $70.6 million, or 6.7%.
We evaluate performance based on net sales, segment income and adjusted segment income, and use segment income margin and adjusted segment income margin as comparable performance measures for our reporting segments. Segment income represents net sales less cost of sales, less segment SG&A and RD&E, excluding acquisition and restructuring related expense, as well as amortization of intangible assets.
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.
(c) Adjustments in the year ended December 31, 2024 are primarily driven by $3.2 million of compensation expenses for the retention of key employees acquired in the ChlorKing acquisition. Pursuant to the ChlorKing acquisition agreement, this $3.2 million was part of a total $6.3 million employee retention payment that was deposited into an escrow account on the date of acquisition.
Adjustments in the year ended December 31, 2024 are primarily driven by $3.2 million of compensation expenses for the retention of key employees acquired in the ChlorKing acquisition.
The increase was driven by the increase in net income. Net cash used in investing activities Net cash used in investing activities decreased to $54.1 million for the year ended December 31, 2024 compared to $55.4 million for the year ended December 31, 2023, a decrease of $1.3 million, or 2.3%.
Net cash used in investing activities Net cash used in investing activities was $103.8 million for the year ended December 31, 2025 compared to net cash used in investing activities of $54.1 million for the year ended December 31, 2024, an increase of $49.7 million, or 91.7%.
Adjusted segment income margin increased to 32.5% in Fiscal Year 2024 from 28.9% in Fiscal Year 2023, an increase of 360 basis points.
Adjusted segment income and Adjusted segment income margin Adjusted segment income increased to $28.3 million in Fiscal Year 2025 from $22.9 million in Fiscal Year 2024, an increase of $5.4 million, or 23.8%.
Acquisition and restructuring related expense Acquisition and restructuring related expense decreased to $6.5 million in Fiscal Year 2024 as compared to $13.2 million in Fiscal Year 2023, a decrease of $6.7 million.
RD&E spend continues to be focused on new product development and new product quality. Acquisition and restructuring related expense Acquisition and restructuring related expense decreased to $3.9 million in Fiscal Year 2025 as compared to $6.5 million in Fiscal Year 2024, a decrease of $2.6 million.
These new products offer higher energy efficiency, automation capabilities and enhanced water care solutions, and we expect will become primary drivers of our sales growth. Staying at the forefront of technological innovation and introducing new product offerings with new features will continue to be critical in growing our market share and revenue. • Geopolitical events.
Staying at the forefront of technological innovation and introducing new product offerings with new features will continue to be critical in growing our market share and revenue. • Tariffs, Trade Restrictions and Other Geopolitical Events.
Primary working capital requirements are for raw materials, assembled components and certain finished goods inventories and supplies, payroll, manufacturing, freight and distribution, facility, and other operating expenses. Cash flow 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.
Cash flows from operating activities 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.
T he effective interest rate on borrowings under the First Lien facilities, including the impact of an interest rate hedge, was 6.77%. As of December 31, 2023, the balance outstanding under the First Lien Term Facility was $975.0 million and the balance outstanding under the Incremental Term Loan B was $123.4 million.
The First Lien Term Facility matures on May 28, 2028. As of December 31, 2025, the balance outstanding under the First Lien Term Facility was $955.0 million . For the year ended December 31, 2025 , the effective interest rate on borrowings under the First Lien Term Facility, including the impact of an interest rate hedge, was 6.25% .

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of each of December 31, 2024 and December 31, 2023, the Co mpany was a party to interest rate swap agreements of a notional amount of $600.0 million.
Biggest changeAs of each of December 31, 2025 and December 31, 2024, the Co mpany was a party to interest rate swap agreements of a notional amount of $600.0 million. A notional amount of $100.0 million matures in March 2026, a notional amount of $250.0 million matures in January 2027, and a notional amount of $250.0 million matures in March 2028.
For the Fiscal Year 2024, approximately 17% of our net sales were made by our international operating locations that use a functional currency other than the U.S. dollar. These sales were transacted in Euros, Canadian dollars and Australian dollars. Consequently, we are exposed to the impact of exchange rate volatility between the U.S. dollar and these currencies.
For the Fiscal Year 2025, approximately 17% of our net sales were made by our international operating locations that use a functional currency other than the U.S. dollar. These sales were transacted in Euros, Canadian dollars and Australian dollars. Consequently, we are exposed to the impact of exchange rate volatility between the U.S. dollar and these currencies.
Based on the Fiscal Year 2024, an aggregate increase or decrease of 10% in the currency exchange rate would have caused a translational increase or decrease of approximately $18 million and $2 million in net sales and net income, respectively. Interest Rate Risk Our results are subject to risk from interest rate fluctuations on borrowings under the Credit Facilities.
Based on the Fiscal Year 2025, an aggregate increase or decrease of 10% in the currency exchange rate would have caused a translational increase or decrease of approximately $19 million and $2 million in net sales and net income, respectively. Interest Rate Risk Our results are subject to risk from interest rate fluctuations on borrowings under the Credit Facilities.
Our borrowings bear interest at a variable rate, therefore, we are exposed to market risks relating to changes in interest rates. As of December 31, 2024, we had $965.0 million of outstanding variable rate loans under the First Lien Term Facility.
Our borrowings bear interest at a variable rate, therefore, we are exposed to market risks relating to changes in interest rates. As of December 31, 2025, we had $955.0 million of outstanding variable rate loans under the First Lien Term Facility.
Based on our December 31, 2024 variable rate loan balances, an increase or decrease of 1% in the effective interest rate would have caused an increase or decrease in interest cost of approximately $3.7 million, net of interest rate swap settlements.
Based on our December 31, 2025 variable rate loan balances, an increase or decrease of 1% in the effective interest rate would have caused an increase or decrease in interest cost of approximately $3.6 million, net of interest rate swap settlements.
Impact of Inflation Our results of operations and financial condition are presented based on historical cost. We actively manage the impact of inflation, including import duties and tariffs, through strong relationships with our diverse supplier base, vendor terms negotiations, and price and promotion management. Historically, we have been able to realize price increases to partially or fully offset cost inflation.
Impact of Inflation Our results of operations and financial condition are presented based on historical cost. We actively manage the impact of elevated or increased inflation, including import duties and tariffs, through strong relationships with our diverse supplier base, vendor terms negotiations, and price and promotion management.
We strategically invest through inventory purchases to obtain favorable pricing ahead of vendor price increases. As a result, we believe we have the ability to mitigate negative impacts of inflation. 57
Historically, we have been able to realize price increases to partially or fully offset cost inflation. We strategically invest through inventory purchases to obtain favorable pricing ahead of vendor price increases. As a result, we believe we have the ability to mitigate negative impacts of inflation. 57
Removed
During the year-ended December 31, 2024, the Company entered into interest rate swap agreements with a notional amount of $250.0 million that will become effective in March 2025 and replace existing swap agreements with a notional amount of $250.0 million that had March 2025 maturity dates. These new agreements mature in March 2028.

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