Hayward Holdings, Inc. (NYSE:HAYW) Q2 2023 Earnings Conference Call August 3, 2023 9:00 AM ET

Company Participants

Kevin Maczka - VP, IR

Kevin Holleran - President, CEO & Director

Eifion Jones - SVP & CFO

Conference Call Participants

William Carter - Stifel, Nicolaus & Company

Jeffrey Hammond - KeyBanc Capital Markets

Robert Wertheimer - Melius Research

Rafe Jadrosich - Bank of America Merrill Lynch

Operator

Welcome to Hayward Holdings' Second Quarter 2023 Earnings Call. My name is Michelle, and I will be your operator for today's call. [Operator Instructions].

I will now turn the call over to Kevin Maczka, Vice President, Investor Relations. Mr. Maczka, you may begin.

Kevin Maczka

Thank you, and good morning, everyone. We issued our second quarter 2023 earnings press release this morning, which has been posted to the Investor Relations section of our website at investor.hayward.com. There, you can also find an earnings slide presentation that we will reference during this call. I'm joined today by Kevin Holleran, President and Chief Executive Officer; and Eifion Jones, Senior Vice President and Chief Financial Officer.

Before we begin, I would like to remind everyone that during this call, the company may make certain statements that are considered forward-looking in nature, including management's outlook for 2023 and future periods. Such statements are subject to a variety of risks and uncertainties, including those discussed in our most recent Form 10-K and Form 10-Q filings with the Securities and Exchange Commission that could cause actual results to differ materially. The company does not undertake any duty to update such forward-looking statements.

Additionally, during today's call, the company will discuss non-GAAP measures. Reconciliations of historical non-GAAP measures discussed on this call to the comparable GAAP measures can be found in our earnings release and the appendix to the slide presentation.

I would now like to turn the call over to Kevin Holleran.

Kevin Holleran

Thank you, Kevin, and good morning, everyone. It's my pleasure to welcome all of you to Hayward's second quarter earnings call.

I'll start on Slide 4 of our earnings presentation with today's key messages. I'm pleased to report second quarter results exceeded expectations, with continued strong execution resulting in robust margin expansion and cash flow generation. Our team is performing remarkably well and driving structural improvements in the business during a challenging operating environment.

Channel sell-through exceeded both our expectations and our sales into the channel, resulting in further normalization of distributor inventory. We expect the channel destocking to be fundamentally complete by the end of the third quarter, positioning the channel at leaner levels entering the 2024 pool season. This sets up Hayward to return to a normal matching of sales with channel sell-through.