QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Large accelerated filer | ☐ | Accelerated filer | ☐ | ||||||||
☒ | Smaller reporting company | ||||||||||
Emerging growth company |
Page | ||||||||||||||
Financial Statements (unaudited) | ||||||||||||||
Unaudited Condensed Consolidated Balance Sheets | ||||||||||||||
Note 1 Nature of Operations and Organization | ||||||||||||||
Note 2 Significant Accounting Policies | ||||||||||||||
Note 3 Revenue | ||||||||||||||
Note 4 Inventories | ||||||||||||||
Note 5 Accrued Expenses and Other Liabilities | ||||||||||||||
Note 6 Income Taxes | ||||||||||||||
Note 7 Long-Term Debt | ||||||||||||||
Note 8 Derivatives and Hedging Transactions | ||||||||||||||
Note 9 Fair Value Measurements | ||||||||||||||
Note 10 Segments and Related Information | ||||||||||||||
Note 11 Earnings Per Share | ||||||||||||||
Note 12 Commitments and Contingencies | ||||||||||||||
Note 13 Leases | ||||||||||||||
Note 14 Stockholders’ Equity | ||||||||||||||
Note 15 Stock-based Compensation | ||||||||||||||
Note 16 Acquisitions and Restructuring | ||||||||||||||
Note 17 Related-Party Transactions | ||||||||||||||
Note 18 Subsequent Events | ||||||||||||||
ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |||||||||||||
ITEM 6. | ||||||||||||||
July 2, 2022 | December 31, 2021 | |||||||||||||
Assets | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Accounts receivable, net of allowances of $ | ||||||||||||||
Inventories, net | ||||||||||||||
Prepaid expenses | ||||||||||||||
Other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Property, plant, and equipment, net of accumulated depreciation of $ | ||||||||||||||
Goodwill | ||||||||||||||
Trademark | ||||||||||||||
Customer relationships, net | ||||||||||||||
Other intangibles, net | ||||||||||||||
Other non-current assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||
Current liabilities | ||||||||||||||
Current portion of the long-term debt | $ | $ | ||||||||||||
Accounts payable | ||||||||||||||
Accrued expenses and other liabilities | ||||||||||||||
Income taxes payable | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt, net | ||||||||||||||
Deferred tax liabilities, net | ||||||||||||||
Other non-current liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies (Note 12) | ||||||||||||||
Stockholders' equity | ||||||||||||||
Preferred stock, $ | ||||||||||||||
Common stock $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Common stock in treasury; | ( | ( | ||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive income | ||||||||||||||
Total stockholders' equity | ||||||||||||||
Total liabilities, redeemable stock, and stockholders' equity | $ | $ |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||||||
Net sales | $ | $ | $ | $ | ||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||
Gross profit | ||||||||||||||||||||||||||
Selling, general, and administrative expense | ||||||||||||||||||||||||||
Research, development, and engineering expense | ||||||||||||||||||||||||||
Acquisition and restructuring related expense | ||||||||||||||||||||||||||
Amortization of intangible assets | ||||||||||||||||||||||||||
Operating income | ||||||||||||||||||||||||||
Interest expense, net | ||||||||||||||||||||||||||
Loss on debt extinguishment | ||||||||||||||||||||||||||
Other (income) expense, net | ( | |||||||||||||||||||||||||
Total other expense | ||||||||||||||||||||||||||
Income from operations before income taxes | ||||||||||||||||||||||||||
Provision for income taxes | ||||||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Earnings per share | ||||||||||||||||||||||||||
Basic | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||
Diluted |
Three Months Ended | ||||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | |||||||||||||||||||||||||||||||||||||
Gross | Taxes | Net | Gross | Taxes | Net | |||||||||||||||||||||||||||||||||
Net income | $ | $ | ||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Change in fair value of derivatives | ( | ( | ||||||||||||||||||||||||||||||||||||
Comprehensive income | $ | $ | ||||||||||||||||||||||||||||||||||||
Six Months Ended | ||||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | |||||||||||||||||||||||||||||||||||||
Gross | Taxes | Net | Gross | Taxes | Net | |||||||||||||||||||||||||||||||||
Net income | $ | $ | ||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Change in fair value of derivatives | ( | ( | ||||||||||||||||||||||||||||||||||||
Comprehensive income | $ | $ |
Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2021 | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Issuance of Common Stock for compensation plans | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Repurchase of stock | ( | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Treasury stock purchase for tax withholdings on stock exercises | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Balance as of April 2, 2022 | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Issuance of Common Stock for compensation plans | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Repurchase of stock | ( | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Treasury stock purchase for tax withholdings on stock exercises | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||
Balance as of July 2, 2022 | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Redeemable Class A and C Stock | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2020 | $ | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion to common stock upon IPO | ( | ( | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Class A stock | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash distributions | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of stock | ( | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of April 3, 2021 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Finalization for IPO conversion | — | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of stock | — | — | ( | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of July 3, 2021 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended | ||||||||||||||
July 2, 2022 | July 3, 2021 | |||||||||||||
Cash flows from operating activities | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||||
Depreciation | ||||||||||||||
Amortization of intangible assets | ||||||||||||||
Amortization of deferred debt issuance fees | ||||||||||||||
Stock-based compensation | ||||||||||||||
Deferred income taxes | ( | ( | ||||||||||||
Allowance for bad debts | ||||||||||||||
Loss on debt extinguishment | ||||||||||||||
Loss on disposal of property, plant and equipment | ||||||||||||||
Changes in operating assets and liabilities | ||||||||||||||
Accounts receivable | ( | ( | ||||||||||||
Inventories | ( | ( | ||||||||||||
Other current and non-current assets | ( | |||||||||||||
Accounts payable | ||||||||||||||
Accrued expenses and other liabilities | ( | |||||||||||||
Net cash provided by operating activities | ||||||||||||||
Cash flows from investing activities | ||||||||||||||
Purchases of property, plant, and equipment | ( | ( | ||||||||||||
Purchases of intangibles | ( | |||||||||||||
Acquisitions, net of cash acquired | ( | |||||||||||||
Proceeds from sale of property, plant, and equipment | ||||||||||||||
Proceeds from settlements of investment currency hedge | ||||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Cash flows from financing activities | ||||||||||||||
Proceeds from issuance of common stock - Initial Public Offering | ||||||||||||||
Costs associated with Initial Public Offering | ( | |||||||||||||
Purchase of common stock for treasury | ( | ( | ||||||||||||
Proceeds from issuance of long-term debt | ||||||||||||||
Debt issuance costs | ( | |||||||||||||
Payments of long-term debt | ( | ( | ||||||||||||
Proceeds from revolving credit facility | ||||||||||||||
Payments on revolving credit facility | ( | |||||||||||||
Proceeds from issuance of short term debt | ||||||||||||||
Payments of short term debt | ( | |||||||||||||
Other, net | ( | |||||||||||||
Net cash (used in) provided by financing activities | ( | |||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | ( | ( | ||||||||||||
Change in cash and cash equivalents and restricted cash | ( | |||||||||||||
Cash and cash equivalents and restricted cash, beginning of period | ||||||||||||||
Cash and cash equivalents and restricted cash, end of period | $ | $ | ||||||||||||
Supplemental disclosures of cash flow information | ||||||||||||||
Cash paid-interest | $ | $ | ||||||||||||
Cash paid-income taxes | ||||||||||||||
Equipment financed under finance leases |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||||||
Product groups | ||||||||||||||||||||||||||
Residential pool | $ | $ | $ | $ | ||||||||||||||||||||||
Commercial pool | ||||||||||||||||||||||||||
Industrial flow control | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||||||||||||
Geographic | ||||||||||||||||||||||||||
United States | $ | $ | $ | $ | ||||||||||||||||||||||
Canada | ||||||||||||||||||||||||||
Europe | ||||||||||||||||||||||||||
Rest of World | ||||||||||||||||||||||||||
Total international revenue | $ | $ | ||||||||||||||||||||||||
Total | $ | $ | $ | $ |
July 2, 2022 | December 31, 2021 | |||||||||||||
Raw materials | $ | $ | ||||||||||||
Work in progress | ||||||||||||||
Finished goods | ||||||||||||||
Total | $ | $ |
July 2, 2022 | December 31, 2021 | |||||||||||||
Selling, promotional and advertising | $ | $ | ||||||||||||
Employee compensation and benefits | ||||||||||||||
Warranty reserve | ||||||||||||||
Inventory purchases | ||||||||||||||
Insurance reserve | ||||||||||||||
Deferred income | ||||||||||||||
Operating lease liability - short term | ||||||||||||||
Business restructuring costs | ||||||||||||||
Professional fees | ||||||||||||||
Payroll taxes | ||||||||||||||
Other accrued liabilities | ||||||||||||||
Total | $ | $ |
Balance at December 31, 2021 | $ | |||||||
Accrual for warranties issued during the period | ||||||||
Payments | ( | |||||||
Balance at April 2, 2022 | ||||||||
Accrual for warranties issued during the period | ||||||||
Payments | ( | |||||||
Balance at July 2, 2022 | $ | |||||||
Balance at December 31, 2020 | $ | |||||||
Accrual for warranties issued during the period | ||||||||
Payments | ( | |||||||
Balance at April 3, 2021 | ||||||||
Accrual for warranties issued during the period | ||||||||
Payments | ( | |||||||
Balance at July 3, 2021 | $ | |||||||
July 2, 2022 | December 31, 2021 | |||||||||||||
First Lien Term Facility, due May 28, 2028 | $ | $ | ||||||||||||
ABL Revolving Credit Facility | ||||||||||||||
Finance lease obligations | ||||||||||||||
Subtotal | ||||||||||||||
Less: Current portion of the long-term debt | ( | ( | ||||||||||||
Less: Unamortized debt issuance costs | ( | ( | ||||||||||||
Total | $ | $ |
Other Current Assets | Other Non-Current Assets | Accrued Expenses and Other Liabilities | Other Current Assets | ||||||||||||||||||||
July 2, 2022 | December 31, 2021 | ||||||||||||||||||||||
Interest rate swaps | $ | $ | $ | $ | |||||||||||||||||||
Foreign exchange contracts | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Gain (Loss) Recognized in AOCI | Gain (Loss) Reclassified From AOCI to Earnings | Location of Gain (Loss) Reclassified from AOCI into Earnings | |||||||||||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||||||||
Interest rate swaps (1) | $ | $ | $ | ( | $ | ( | Interest Expense | ||||||||||||||||||||||
Net investment hedge | ( | N/A | |||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||
(1) The Company estimates that $ | |||||||||||||||||||||||||||||
Gain (Loss) Recognized in AOCI | Gain (Loss) Reclassified From AOCI to Earnings | Location of Gain (loss) Reclassified from AOCI into Earnings | |||||||||||||||||||||||||||
Six Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||||||||
Interest rate swaps | $ | $ | $ | ( | $ | ( | Interest Expense | ||||||||||||||||||||||
Net investment hedge | N/A | ||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | ( |
Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | |||||||||||||||||||||||||||||||||||||
North America | Europe & Rest of World | Total | North America | Europe & Rest of World | Total | |||||||||||||||||||||||||||||||||
External net sales | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Segment income | ||||||||||||||||||||||||||||||||||||||
Capital expenditures (1) | ||||||||||||||||||||||||||||||||||||||
Depreciation (1) | ||||||||||||||||||||||||||||||||||||||
Intersegment sales | ||||||||||||||||||||||||||||||||||||||
Six Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | |||||||||||||||||||||||||||||||||||||
North America | Europe & Rest of World | Total | North America | Europe & Rest of World | Total | |||||||||||||||||||||||||||||||||
External net sales | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Segment income | ||||||||||||||||||||||||||||||||||||||
Capital expenditures (1) | ||||||||||||||||||||||||||||||||||||||
Depreciation (1) | ||||||||||||||||||||||||||||||||||||||
Intersegment sales |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||||||
Total segment income | $ | $ | $ | $ | ||||||||||||||||||||||
Corporate expense, net | ||||||||||||||||||||||||||
Acquisition and restructuring related expense | ||||||||||||||||||||||||||
Amortization of intangible assets | ||||||||||||||||||||||||||
Operating income | ||||||||||||||||||||||||||
Interest expense, net | ||||||||||||||||||||||||||
Loss on debt extinguishment | ||||||||||||||||||||||||||
Other (income) expense, net | ( | |||||||||||||||||||||||||
Total other expense | ||||||||||||||||||||||||||
Income from operations before income taxes | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Deemed Dividend - Class A stock redemption(a) | ( | |||||||||||||||||||||||||
Dividends paid to Class C stockholders | ( | |||||||||||||||||||||||||
Net income attributable to Class A and common stockholders, basic(b) | ||||||||||||||||||||||||||
Net income attributable to Class A holders, basic | ||||||||||||||||||||||||||
Net income attributable to common stockholders, basic | $ | $ | $ | $ | ||||||||||||||||||||||
Net income attributable to Class A holders, diluted | $ | $ | $ | |||||||||||||||||||||||
Net income attributable to common stockholders, diluted | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted average number of common shares outstanding, basic | ||||||||||||||||||||||||||
Effect of dilutive securities(c) | ||||||||||||||||||||||||||
Weighted average number of common shares outstanding, diluted | ||||||||||||||||||||||||||
Earnings per share attributable to common stockholders, basic | $ | $ | $ | $ | ||||||||||||||||||||||
Earnings per share attributable to common stockholders, diluted | $ | $ | $ | $ | ||||||||||||||||||||||
Six Months Ended | |||||||||||
July 2, 2022 | July 3, 2021 | ||||||||||
Right-of-use assets obtained in exchange for lease obligations: | |||||||||||
Operating leases | $ | $ | |||||||||
Finance leases |
July 2, 2022 | December 31, 2021 | ||||||||||
Operating leases | |||||||||||
$ | $ | ||||||||||
Total operating lease liabilities | |||||||||||
Finance leases | |||||||||||
Property, plant and equipment | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
Total finance lease liabilities | $ | $ |
Risk-free interest rate | % | |||||||
Expected life in years | ||||||||
Expected dividend yield | % | |||||||
Expected volatility | % | |||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Business restructuring costs | $ | $ | $ | $ | |||||||||||||||||||
Acquisition transaction and integration costs | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
2022 Activity | ||||||||||||||||||||||||||
Liability as of December 31, 2021 | Costs Recognized | Cash Payments | Liability as of July 2, 2022 | |||||||||||||||||||||||
One-time termination benefits | $ | $ | $ | ( | $ | |||||||||||||||||||||
Facility-related | ( | |||||||||||||||||||||||||
Other (1) | ( | |||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
(1) ‘Other’ restructuring related expense primarily consists of expenses pertaining to the relocation of the corporate headquarters. |
2021 Activity | |||||||||||||||||||||||
Liability as of December 31, 2020 | Costs Recognized | Cash Payments | Liability as of July 3, 2021 | ||||||||||||||||||||
One-time termination benefits | $ | $ | $ | $ | |||||||||||||||||||
Facility-related | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total Restructuring | $ | $ | $ | $ |
Preliminary Allocation | |||||
As of June 2, 2022 | |||||
Assets | |||||
Accounts receivable | $ | ||||
Inventory | |||||
Other current assets | |||||
Property, plant and equipment | |||||
Goodwill | |||||
Identifiable intangible assets, net | |||||
Other noncurrent assets | |||||
Less: Liabilities assumed | |||||
Accounts payable | ( | ||||
Accrued liabilities | ( | ||||
Net assets acquired | $ |
Useful life | Amount | |||||||
(in years) | (in thousands) | |||||||
Customer relationships | $ | |||||||
Tradename | ||||||||
Developed technology | ||||||||
Noncompete agreements | ||||||||
Total intangible assets with definite lives | $ |
(Dollars in thousands) | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||||||
Net sales | $ | 399,442 | $ | 364,422 | $ | 809,902 | $ | 698,785 | ||||||||||||||||||
Cost of sales | 210,077 | 196,404 | 430,143 | 370,863 | ||||||||||||||||||||||
Gross profit | 189,365 | 168,018 | 379,759 | 327,922 | ||||||||||||||||||||||
Selling, general, and administrative expense | 68,947 | 71,802 | 137,804 | 138,322 | ||||||||||||||||||||||
Research, development, and engineering expense | 5,033 | 4,997 | 10,269 | 9,817 | ||||||||||||||||||||||
Acquisition and restructuring related expense | 4,940 | 1,636 | 7,211 | 1,669 | ||||||||||||||||||||||
Amortization of intangible assets | 7,697 | 8,632 | 15,307 | 17,462 | ||||||||||||||||||||||
Operating income | 102,748 | 80,951 | 209,168 | 160,652 | ||||||||||||||||||||||
Interest expense, net | 11,605 | 12,975 | 21,167 | 31,247 | ||||||||||||||||||||||
Loss on debt extinguishment | — | 3,608 | — | 9,418 | ||||||||||||||||||||||
Other (income) expense, net | 3,804 | (1,000) | 3,290 | 2,568 | ||||||||||||||||||||||
Total other expense | 15,409 | 15,583 | 24,457 | 43,233 | ||||||||||||||||||||||
Income from operations before income taxes | 87,339 | 65,368 | 184,711 | 117,419 | ||||||||||||||||||||||
Provision for income taxes | 21,079 | 12,552 | 44,419 | 27,736 | ||||||||||||||||||||||
Net income | $ | 66,260 | $ | 52,816 | $ | 140,292 | $ | 89,683 | ||||||||||||||||||
Adjusted EBITDA (a) | $ | 127,637 | $ | 110,394 | $ | 253,886 | $ | 217,706 |
Three Months Ended | Six Months Ended | |||||||||||||
July 2, 2022 | July 2, 2022 | |||||||||||||
Volume | (6.4) | % | (0.1) | % | ||||||||||
Price, net of discounts and allowances | 16.5 | % | 16.7 | % | ||||||||||
Acquisitions | 1.3 | % | 0.8 | % | ||||||||||
Currency and other | (1.8) | % | (1.5) | % | ||||||||||
Total | 9.6 | % | 15.9 | % |
(Dollars in thousands) | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | |||||||||||||||||||||||||||||||||||||
Total | NAM | E&RW | Total | NAM | E&RW | |||||||||||||||||||||||||||||||||
Net sales | $ | 399,442 | $ | 342,080 | $ | 57,362 | $ | 364,422 | $ | 293,575 | $ | 70,847 | ||||||||||||||||||||||||||
Gross profit | $ | 189,365 | $ | 166,818 | $ | 22,549 | $ | 168,018 | $ | 140,442 | $ | 27,576 | ||||||||||||||||||||||||||
Gross profit margin % | 47.4 | % | 48.8 | % | 39.3 | % | 46.1 | % | 47.8 | % | 38.9 | % | ||||||||||||||||||||||||||
Segment income | $ | 123,771 | $ | 110,539 | $ | 13,232 | $ | 101,652 | $ | 89,285 | $ | 12,367 | ||||||||||||||||||||||||||
Segment income margin % | 31.0 | % | 32.3 | % | 23.1 | % | 27.9 | % | 30.4 | % | 17.5 | % | ||||||||||||||||||||||||||
Adjusted segment income (a) | $ | 135,488 | $ | 122,484 | $ | 13,004 | $ | 116,885 | $ | 99,166 | $ | 17,719 | ||||||||||||||||||||||||||
Adjusted segment income margin % (a) | 33.9 | % | 35.8 | % | 22.7 | % | 32.1 | % | 33.8 | % | 25.0 | % | ||||||||||||||||||||||||||
Expenses not allocated to segments | ||||||||||||||||||||||||||||||||||||||
Corporate expense, net | $ | 8,386 | $ | 10,433 | ||||||||||||||||||||||||||||||||||
Acquisition and restructuring related expense | 4,940 | 1,636 | ||||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 7,697 | 8,632 | ||||||||||||||||||||||||||||||||||||
Operating income | $ | 102,748 | $ | 80,951 | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Six Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | |||||||||||||||||||||||||||||||||||||
Total | NAM | E&RW | Total | NAM | E&RW | |||||||||||||||||||||||||||||||||
Net sales | $ | 809,902 | $ | 688,376 | $ | 121,526 | $ | 698,785 | $ | 565,040 | $ | 133,745 | ||||||||||||||||||||||||||
Gross profit | $ | 379,759 | $ | 329,875 | $ | 49,886 | $ | 327,922 | $ | 275,098 | $ | 52,824 | ||||||||||||||||||||||||||
Gross profit margin % | 46.9 | % | 47.9 | % | 41.0 | % | 46.9 | % | 48.7 | % | 39.5 | % | ||||||||||||||||||||||||||
Segment income | $ | 249,351 | $ | 219,150 | $ | 30,201 | $ | 202,346 | $ | 175,100 | $ | 27,246 | ||||||||||||||||||||||||||
Segment income margin % | 30.8 | % | 31.8 | % | 24.9 | % | 29.0 | % | 31.0 | % | 20.4 | % | ||||||||||||||||||||||||||
Adjusted segment income (a) | $ | 268,098 | $ | 236,707 | $ | 31,391 | $ | 228,479 | $ | 194,962 | $ | 33,517 | ||||||||||||||||||||||||||
Adjusted segment income margin % (a) | 33.1 | % | 34.4 | % | 25.8 | % | 32.7 | % | 34.5 | % | 25.1 | % | ||||||||||||||||||||||||||
Expenses not allocated to segments | ||||||||||||||||||||||||||||||||||||||
Corporate expense, net | $ | 17,665 | $ | 22,563 | ||||||||||||||||||||||||||||||||||
Acquisition and restructuring related expense | 7,211 | 1,669 | ||||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 15,307 | 17,462 | ||||||||||||||||||||||||||||||||||||
Operating income | $ | 209,168 | $ | 160,652 |
(Dollars in thousands) | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||||||
Net sales | $ | 342,080 | $ | 293,575 | $ | 688,376 | $ | 565,040 | ||||||||||||||||||
Gross profit | $ | 166,818 | $ | 140,442 | $ | 329,875 | $ | 275,098 | ||||||||||||||||||
Gross profit margin % | 48.8 | % | 47.8 | % | 47.9 | % | 48.7 | % | ||||||||||||||||||
Segment income | $ | 110,539 | $ | 89,285 | $ | 219,150 | $ | 175,100 | ||||||||||||||||||
Segment income margin % | 32.3 | % | 30.4 | % | 31.8 | % | 31.0 | % | ||||||||||||||||||
Adjusted segment income (a) | $ | 122,484 | $ | 99,166 | $ | 236,707 | $ | 194,962 | ||||||||||||||||||
Adjusted segment income margin % (a) | 35.8 | % | 33.8 | % | 34.4 | % | 34.5 | % |
Three Months Ended | Six Months Ended | |||||||||||||
July 2, 2022 | July 2, 2022 | |||||||||||||
Volume | (3.2) | % | 2.2 | % | ||||||||||
Price, net of allowances and discounts | 18.6 | % | 18.9 | % | ||||||||||
Acquisitions | 1.6 | % | 1.0 | % | ||||||||||
Currency and other | (0.5) | % | (0.3) | % | ||||||||||
Total | 16.5 | % | 21.8 | % |
(Dollars in thousands) | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||||||
Net sales | $ | 57,362 | $ | 70,847 | $ | 121,526 | $ | 133,745 | ||||||||||||||||||
Gross profit | $ | 22,549 | $ | 27,576 | $ | 49,886 | $ | 52,824 | ||||||||||||||||||
Gross profit margin % | 39.3 | % | 38.9 | % | 41.0 | % | 39.5 | % | ||||||||||||||||||
Segment income | $ | 13,232 | $ | 12,367 | $ | 30,201 | $ | 27,246 | ||||||||||||||||||
Segment income margin % | 23.1 | % | 17.5 | % | 24.9 | % | 20.4 | % | ||||||||||||||||||
Adjusted segment income (a) | $ | 13,004 | $ | 17,719 | $ | 31,391 | $ | 33,517 | ||||||||||||||||||
Adjusted segment income margin % (a) | 22.7 | % | 25.0 | % | 25.8 | % | 25.1 | % |
Three Months Ended | Six Months Ended | |||||||||||||
July 2, 2022 | July 2, 2022 | |||||||||||||
Volume | (19.6) | % | (10.2) | % | ||||||||||
Price, net of allowances and discounts | 7.8 | % | 7.7 | % | ||||||||||
Currency and other | (7.2) | % | (6.6) | % | ||||||||||
Total | (19.0) | % | (9.1) | % |
(Dollars in thousands) | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||||||
Net income | $ | 66,260 | $ | 52,816 | $ | 140,292 | $ | 89,683 | ||||||||||||||||||
Depreciation | 4,758 | 4,503 | 9,598 | 9,251 | ||||||||||||||||||||||
Amortization | 9,091 | 10,105 | 18,188 | 20,497 | ||||||||||||||||||||||
Interest expense | 11,605 | 12,975 | 21,167 | 31,247 | ||||||||||||||||||||||
Income taxes | 21,079 | 12,552 | 44,419 | 27,736 | ||||||||||||||||||||||
Loss on extinguishment of debt | — | 3,608 | — | 9,418 | ||||||||||||||||||||||
EBITDA | 112,793 | 96,559 | 233,664 | 187,832 | ||||||||||||||||||||||
Stock-based compensation (a) | 315 | 5,265 | 1,252 | 15,899 | ||||||||||||||||||||||
Sponsor management fees (b) | — | — | — | 90 | ||||||||||||||||||||||
Currency exchange items (c) | 3,453 | (593) | 2,724 | 3,230 | ||||||||||||||||||||||
Acquisition and restructuring related expense, net (d) | 4,940 | 1,636 | 7,211 | 1,669 | ||||||||||||||||||||||
Other (e) | 6,136 | 7,527 | 9,035 | 8,986 | ||||||||||||||||||||||
Total Adjustments | 14,844 | 13,835 | 20,222 | 29,874 | ||||||||||||||||||||||
Adjusted EBITDA | $ | 127,637 | $ | 110,394 | $ | 253,886 | $ | 217,706 | ||||||||||||||||||
Adjusted EBITDA margin | 32.0 | % | 30.3 | % | 31.3 | % | 31.2 | % |
(a) | Represents non-cash stock-based compensation expense related to equity awards issued to management, employees, and directors. Beginning in the three months ended July 2, 2022, the adjustment includes only expense related to awards issued under the 2017 Equity Incentive Plan, which were awards granted prior to the effective date of Hayward’s initial public offering (the “IPO”), whereas in prior periods, the adjustment included stock-based compensation expense for all equity awards. Under the historical presentation, the stock-based compensation adjustment for the three and six months ended July 2, 2022 would have been an expense of $1.9 million and $2.9 million, respectively. | |||||||
(b) | Represents fees paid to certain of the Company’s controlling stockholders for services rendered pursuant to a 2017 management services agreement. This agreement and the corresponding payment obligation ceased on March 16, 2021, the effective date of the IPO. | |||||||
(c) | Represents unrealized non-cash losses (gains) on foreign denominated monetary assets and liabilities and foreign currency contracts. | |||||||
(d) | Adjustments in the three and six months ended July 2, 2022 are primarily driven by transaction costs associated with the acquisition of the specialty lighting business of Halco Lighting Technologies, LLC and costs associated with the relocation of the corporate headquarters. Adjustments in the three and six months ended July 3, 2021 are primarily driven by restructuring related costs associated with the exit of a redundant manufacturing and distribution facility. | |||||||
(e) | Adjustments in the three months ended July 2, 2022 include expenses associated with the discontinuation of a product joint development agreement, costs incurred for follow-on equity offerings in May 2022, which are reported in SG&A in our unaudited condensed consolidated statements of operations, partially offset by gains resulting from an insurance policy reimbursement related to the fire incident in Yuncos, Spain. Adjustments in the three months ended July 3, 2021 include a write-off related to the aforementioned fire in Yuncos, Spain, costs related to our debt refinancing, and operating losses related to an early stage product business acquired in 2018 that was phased out. Adjustments in the six months ended July 2, 2022 include expenses associated with the discontinuation of a product joint development agreement, follow-on equity offerings in May 2022, which are reported in SG&A in our unaudited condensed consolidated statements of operations, partially offset by gains resulting from an insurance policy reimbursement related to the fire incident in Yuncos, Spain. Also included in the six months ended are bad debt reserves for certain customers in Russia and Ukraine partially offset by collections of these previously reserved receivables. Adjustments in the six months ended July 3, 2021 include a write-off related to the aforementioned fire in Yuncos, Spain, expenses incurred in preparation for the IPO and transaction related bonuses, costs related to our debt refinancing, and operating losses related to an early stage product business acquired in 2018 that was phased out. |
(Dollars in thousands) | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||||||
Segment income | $ | 123,771 | $ | 101,652 | $ | 249,351 | $ | 202,346 | ||||||||||||||||||
Depreciation | 4,454 | 4,410 | 8,957 | 9,068 | ||||||||||||||||||||||
Amortization | 1,394 | 1,473 | 2,881 | 3,035 | ||||||||||||||||||||||
Stock-based compensation | 829 | 3,753 | 459 | 7,996 | ||||||||||||||||||||||
Other (a) | 5,040 | 5,597 | 6,450 | 6,034 | ||||||||||||||||||||||
Total Adjustments | 11,717 | 15,233 | 18,747 | 26,133 | ||||||||||||||||||||||
Adjusted segment income | $ | 135,488 | $ | 116,885 | $ | 268,098 | $ | 228,479 | ||||||||||||||||||
Adjusted segment income margin | 33.9 | % | 32.1 | % | 33.1 | % | 32.7 | % |
(a) | The three and six months ended July 2, 2022 include bad debt write-offs and other miscellaneous items we believe are not representative of our ongoing business operations. The three and six months ended July 3, 2021 include the impairment related to a fire at our manufacturing and administrative facilities in Yuncos, Spain and operating losses which relate to an early stage product business acquired in 2018 that was phased out in 2021. |
NAM | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||||||
Segment income | $ | 110,539 | $ | 89,285 | $ | 219,150 | $ | 175,100 | ||||||||||||||||||
Depreciation | 4,248 | 4,109 | 8,582 | 8,400 | ||||||||||||||||||||||
Amortization | 1,394 | 1,473 | 2,881 | 3,035 | ||||||||||||||||||||||
Stock-based compensation | 765 | 3,748 | 356 | 7,444 | ||||||||||||||||||||||
Other (a) | 5,538 | 551 | 5,738 | 983 | ||||||||||||||||||||||
Total adjustments | 11,945 | 9,881 | 17,557 | 19,862 | ||||||||||||||||||||||
Adjusted segment income | $ | 122,484 | $ | 99,166 | $ | 236,707 | $ | 194,962 | ||||||||||||||||||
Adjusted segment income margin | 35.8 | % | 33.8 | % | 34.4 | % | 34.5 | % |
(a) | The three months ended July 2, 2022 for NAM includes expenses associated with the discontinuation of a product joint development agreement that Hayward believes are not representative of its ongoing business operations. The three months ended July 3, 2021 includes operating losses which relate to an early stage product business acquired in 2018 that was phased out in 2021. | |||||||
The six months ended July 2, 2022 for NAM includes expenses associated with the discontinuation of a product joint development agreement and certain general and administrative expenses that Hayward believes are not representative of its ongoing business operations. The six months ended July 3, 2021 include operating losses which relate to an early stage product business acquired in 2018 that was phased out in 2021. |
E&RW | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||||||
Segment income | $ | 13,232 | $ | 12,367 | $ | 30,201 | $ | 27,246 | ||||||||||||||||||
Depreciation | 206 | 301 | 375 | 668 | ||||||||||||||||||||||
Amortization | — | — | — | — | ||||||||||||||||||||||
Stock-based compensation | 64 | 5 | 103 | 552 | ||||||||||||||||||||||
Other (a) | (498) | 5,046 | 712 | 5,051 | ||||||||||||||||||||||
Total Adjustments | (228) | 5,352 | 1,190 | 6,271 | ||||||||||||||||||||||
Adjusted segment income | $ | 13,004 | $ | 17,719 | $ | 31,391 | $ | 33,517 | ||||||||||||||||||
Adjusted segment income margin | 22.7 | % | 25.0 | % | 25.8 | % | 25.1 | % |
(a) | The three months ended July 2, 2022 for E&RW includes collections of previously reserved bad debt expense related to certain customers impacted by the conflict in Russia and Ukraine. The three months ended July 3, 2021 represents the impact of a fire at our manufacturing and administrative facilities in Yuncos, Spain. | |||||||
The six months ended July 2, 2022 for E&RW includes bad debt reserves related to certain customers impacted by the conflict in Russia and Ukraine partially offset by subsequent collections. |
July 2, 2022 | December 31, 2021 | |||||||||||||
First Lien Term Facility, due May 28, 2028 | $ | 990,000 | $ | 995,000 | ||||||||||
ABL Revolving Credit Facility | 150,000 | — | ||||||||||||
Finance lease obligations | 7,560 | 7,780 | ||||||||||||
Subtotal | 1,147,560 | 1,002,780 | ||||||||||||
Less: Current portion of the long-term debt | (11,957) | (12,155) | ||||||||||||
Less: Unamortized debt issuance costs | (16,291) | (17,501) | ||||||||||||
Total | $ | 1,119,312 | $ | 973,124 |
(Dollars in thousands) | Six Months Ended | |||||||||||||
July 2, 2022 | July 3, 2021 | |||||||||||||
Net cash provided by operating activities | $ | 63,676 | $ | 123,389 | ||||||||||
Net cash used in investing activities | (77,188) | (9,658) | ||||||||||||
Net cash (used in) provided by financing activities | (141,101) | 24,850 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | (2,218) | (52) | ||||||||||||
Change in cash and cash equivalents and restricted cash | $ | (156,831) | $ | 138,529 | ||||||||||
Period | (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 | ||||||||||||||||||||||
April 3 - May 7, 2022 | 10,956,548 | $ | 14.70 | 10,956,548 | $ | 208,146,016 | ||||||||||||||||||||
May 8 - June 4, 2022 | 477,024 | 15.46 | 477,024 | 200,769,815 | ||||||||||||||||||||||
June 5 - July 2, 2022 | 3,007,546 | 14.60 | 3,007,546 | 156,864,645 | ||||||||||||||||||||||
Total | 14,441,118 | $ | 14.70 | 14,441,118 | $ | 156,864,645 |
Exhibit No. | Description | |||||||||||||
Certification of Chief Executive Officer of Hayward Holdings, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||||||||
Certification of Chief Financial Officer of Hayward Holdings, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||||||||
Certification of Chief Executive Officer of Hayward Holdings, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||||||||
Certification of Chief Financial Officer of Hayward Holdings, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||||||||
101.INS | Inline XBRL Instance Document. | |||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |||||||||||||
101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document. | |||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||||||||
101.LAB | Inline XBRL Taxonomy Label Linkbase Document. | |||||||||||||
101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document. | |||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted as Exhibits 101.*) |
HAYWARD HOLDINGS, INC. | ||||||||
By: | /s/ Eifion Jones | |||||||
Name: | Eifion Jones | |||||||
Title: | Senior Vice President & Chief Financial Officer | |||||||
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Jul. 02, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 3,235 | $ 2,003 |
Property, plant, and equipment, accumulated depreciation | $ 74,683 | $ 67,366 |
Preferred shares par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock issued (in shares) | 0 | 0 |
Preferred stock outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock issued (in shares) | 239,583,621 | 238,432,216 |
Common stock outstanding (in shares) | 215,687,086 | 233,056,799 |
Common treasury stock (in shares) | 23,896,535 | 5,375,417 |
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2022 |
Jul. 03, 2021 |
Jul. 02, 2022 |
Jul. 03, 2021 |
|
Income Statement [Abstract] | ||||
Net sales | $ 399,442 | $ 364,422 | $ 809,902 | $ 698,785 |
Cost of sales | 210,077 | 196,404 | 430,143 | 370,863 |
Gross profit | 189,365 | 168,018 | 379,759 | 327,922 |
Selling, general, and administrative expense | 68,947 | 71,802 | 137,804 | 138,322 |
Research, development, and engineering expense | 5,033 | 4,997 | 10,269 | 9,817 |
Acquisition and restructuring related expense | 4,940 | 1,636 | 7,211 | 1,669 |
Amortization of intangible assets | 7,697 | 8,632 | 15,307 | 17,462 |
Operating income | 102,748 | 80,951 | 209,168 | 160,652 |
Interest expense, net | 11,605 | 12,975 | 21,167 | 31,247 |
Loss on debt extinguishment | 0 | 3,608 | 0 | 9,418 |
Other (income) expense, net | 3,804 | (1,000) | 3,290 | 2,568 |
Total other expense | 15,409 | 15,583 | 24,457 | 43,233 |
Income from operations before income taxes | 87,339 | 65,368 | 184,711 | 117,419 |
Provision for income taxes | 21,079 | 12,552 | 44,419 | 27,736 |
Net income | $ 66,260 | $ 52,816 | $ 140,292 | $ 89,683 |
Earnings per share | ||||
Basic (in usd per share) | $ 0.30 | $ 0.23 | $ 0.62 | $ 0.02 |
Diluted (in usd per share) | $ 0.29 | $ 0.22 | $ 0.59 | $ 0.02 |
Weighted average common shares outstanding | ||||
Basic (in shares) | 218,401,182 | 231,103,424 | 225,358,529 | 143,721,029 |
Diluted (in shares) | 228,642,982 | 244,203,652 | 235,943,099 | 153,571,905 |
Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2022 |
Jul. 03, 2021 |
Jul. 02, 2022 |
Jul. 03, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 66,260 | $ 52,816 | $ 140,292 | $ 89,683 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments, gross | (11,120) | 2,533 | (11,480) | 4,807 |
Foreign currency translation adjustments, taxes | 0 | (333) | 0 | (763) |
Foreign currency translation adjustments, net | (11,120) | 2,200 | (11,480) | 4,044 |
Change in fair value of derivatives, gross | 3,455 | 2,461 | 14,752 | 4,881 |
Change in fair value of derivatives, taxes | (864) | (611) | (3,688) | (1,225) |
Change in fair value of derivatives, net | 2,591 | 1,850 | 11,064 | 3,656 |
Comprehensive income | $ 57,731 | $ 56,866 | $ 139,876 | $ 97,383 |
Nature of Operations and Organization |
6 Months Ended |
---|---|
Jul. 02, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Organization | 1. Nature of Operations and Organization Hayward Holdings, Inc. (“Holdings,” the “Company,” “we” or “us”) is a global designer, manufacturer, and marketer of a broad portfolio of pool equipment and associated automation systems. The Company has nine manufacturing facilities worldwide, which are located in North Carolina, Tennessee, Rhode Island, Florida, California, Spain (three) and China, and other facilities in the United States, Canada, France and Australia. Cash flow is impacted by the seasonality of the swimming pool business. Cash flow is usually higher in the second and third quarters due to terms of sale to our customers. We establish actual interim closing dates using a fiscal calendar in which our fiscal quarters end on the Saturday closest to the calendar quarter end, with the exception of year-end which ends on December 31 of each fiscal year. The interim closing dates for the first, second and third quarters of 2022 are April 2, July 2, and October 1, compared to the respective April 3, July 3, and October 2, 2021 dates. We had one fewer working day in the three and six months ended July 2, 2022 than in the respective 2021 periods.
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Significant Accounting Policies |
6 Months Ended |
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Jul. 02, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of such information. All such adjustments are of a normal recurring nature. Certain information and note disclosures, including a description of significant accounting policies normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the Company’s annual consolidated financial statements and notes thereto for the fiscal year ended December 31, 2021. The results of operations for the three and six months ended July 2, 2022 are not necessarily indicative of the results for any subsequent periods or the entire fiscal year ending December 31, 2022. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. In the third quarter of the prior year, the Company changed its presentation from millions to thousands and, as a result, any necessary rounding adjustments have been made to prior-year disclosed amounts. Certain prior-period amounts have been reclassified for comparative purposes to conform to the current presentation. Recent Accounting Pronouncements Not Yet Adopted Reference Rate Reform In March 2020, the Financial Accounting Standards Board (“FASB”) issued guidance that provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. The Company is currently evaluating the potential effects of the adoption of this guidance. Recently Adopted Accounting Standards Accounting for Leases In February 2016, the FASB issued , Leases (“Topic 842”) or the (“new standard”), and issued subsequent amendments to the initial guidance thereafter. The standard became effective for the Company on December 31, 2021 because the Company ceased to be an Emerging Growth Company (“EGC”) under applicable rules of the SEC as of December 31, 2021, and the Company retrospectively adopted the standard as of January 1, 2021. The impact upon adoption as of January 1, 2021 resulted in the initial recognition of lease liabilities based on the present value of the remaining minimum rental payments for existing operating leases of approximately $48.6 million and corresponding right-of-use (“ROU”) assets of approximately $43.9 million on the consolidated balance sheets. The ROU assets are net of $4.7 million of liabilities for deferred rent and unamortized landlord lease incentives that were previously recorded as other noncurrent liabilities. The adoption did not have a material impact on the unaudited condensed consolidated statements of operations and comprehensive income or unaudited condensed consolidated statements of cash flows.
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Revenue |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | 3. Revenue The following table disaggregates net sales between product groups and geographic regions, respectively (in thousands):
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | 4. Inventories Inventories, net, consist of the following (in thousands):
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Accrued Expenses and Other Liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Liabilities | 5. Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consist of the following (in thousands):
The Company offers warranties on certain of its products and records an accrual for estimated future claims. Such accruals are based on historical experience and management’s estimate of the level of future claims. The following table summarizes the warranty reserve activities (in thousands):
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Income Taxes |
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Jul. 02, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. Income Taxes The Company’s effective tax rate for the three months ended July 2, 2022 and three months ended July 3, 2021 was 24.1% and 19.4% respectively. The change in the Company’s effective tax rate was primarily due to a Global Intangible Low Tax Income (“GILTI”) inclusion, changes in the relative income between jurisdictions, and several discrete items relating to a tax benefit due to the exercise of stock options. In addition, the Company’s effective tax rate for the three months ended July 3, 2021 included a benefit for the release of the valuation allowance on the deferred tax assets of the France subsidiary. The Company’s effective tax rate for the six months ended July 2, 2022 and six months ended July 3, 2021 were 24.0% and 23.6%, respectively. The change in the Company’s effective tax rate was primarily due to a GILTI inclusion, changes in the relative income between jurisdictions, and several discrete items relating to a tax benefit due to the exercise of stock options. In addition, the Company's effective tax rate for the six months ended July 3, 2021 included a benefit for the release of the valuation allowance on the deferred tax assets of the France subsidiary. The Company will recognize a tax benefit in the financial statements for an uncertain tax position only if the Company’s assessment is that the position is “more likely than not” (i.e., a likelihood greater than 50 percent) to be allowed by the tax jurisdiction based solely on the technical merits of the position. The term “tax position” refers to a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for financial reporting purposes. There were no uncertain tax positions at July 2, 2022 or July 3, 2021. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities and projected future taxable income in making this assessment. Management evaluates the need for valuation allowances on the deferred tax assets according to the provisions of ASC 740, Income Taxes. In making this determination, the Company assesses all available evidence (positive and negative) including recent earnings, internally-prepared income tax projections, and historical financial performance.
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Long-Term Debt, Net |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt, Net | 7. Long-Term Debt, Net Long-term debt, net, consists of the following (in thousands):
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Derivatives and Hedging Transactions |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Hedging Transactions | 8. Derivatives and Hedging Transactions The Company holds derivative financial instruments for the purpose of hedging the risks of certain identifiable and anticipated transactions. In general, the types of risks hedged are those relating to the variability of future earnings and cash flows caused by movements in foreign currency exchange rates and interest rates. In hedging these transactions, the Company holds the following types of derivatives in the normal course of business. Interest Rate Swap Agreements The Company enters into interest rate swap agreements designated as cash flow hedges to manage its interest rate risk related to its variable rate debt obligations. As cash flow hedges, unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. The interest rate swap agreements are highly correlated to the changes in interest rates to which the Company is exposed. Unrealized gains and losses on these instruments have been designated as effective and as such, the related gains or losses have been recorded as a component of accumulated other comprehensive income (loss), net of tax. Other comprehensive income or loss is reclassified into current period income when the hedged interest expense affects earnings. In the first quarter of 2022, the Company entered into interest rate swap agreements that effectively convert an initial notional amount of $500.0 million of its variable-rate debt obligations to fixed-rate debt. As of July 2, 2022 and July 3, 2021, the Company was a party to interest rate swap agreements of a notional amount of $500.0 million and $550.0 million, respectively. Foreign Exchange Contracts The Company enters into foreign exchange contracts to manage risks associated with foreign currency transactions and future variability of intercompany cash flows arising from those transactions that may be adversely affected by changes in exchange rates. These contracts are marked-to-market with the resulting gains and losses recognized in earnings. For the three months ended July 2, 2022 and July 3, 2021, the Company recognized $1.4 million and $0.4 million of expense, respectively, and for the six months ended July 2, 2022 and July 3, 2021, the Company recognized $0.3 million and $0.8 million of expense, respectively, in Other (income) expense, net, related to foreign exchange contracts. Net Investment Hedges The Company uses net investment hedges to minimize its exposure to variability in the foreign currency translation of its net investment in one of its international subsidiaries. The effective portion of changes in the fair value of the hedging instrument is recognized in accumulated other comprehensive income (loss) consistent with the related translation gains and losses of the hedged net investment. There were no outstanding net investment hedges as of July 2, 2022 or December 31, 2021. The following table summarizes the gross fair values and location of the significant derivative instruments within Company's unaudited condensed consolidated balance sheets (in thousands):
The following tables present the effects of derivative instruments by contract type in accumulated other comprehensive income (“AOCI”) in the Company's unaudited condensed consolidated statements of comprehensive income (in thousands):
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Fair Value Measurements |
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Jul. 02, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 9. Fair Value Measurements The Company is required to disclose the estimated fair values of all financial instruments, even if they are not carried at their fair value. The fair values of financial instruments are estimates based upon market conditions and perceived risks. These estimates require management’s judgment and may not be indicative of the future fair values of the assets and liabilities. The Company’s financial instruments include cash and cash equivalents, accounts receivable, and accounts payable. The carrying amount of these instruments approximate fair value because of their short-term nature. The Company’s interest rate swaps, foreign exchange contracts, and net investment hedges are measured in the financial statements at fair value on a recurring basis. The fair values of the interest rate swaps are estimated using industry standard valuation models using market-based observable inputs, including interest rate curves. The fair value of net investment hedges and foreign exchanges contracts are estimated using readily observable market inputs, such as quotations on forward foreign exchange points and foreign interest rates. These instruments are customary, over-the-counter contracts with various bank counterparties that are not traded in active markets. Accordingly, the fair value measurements of the interest rate swaps, foreign exchange contracts and net investment hedges are categorized as Level 2. As of July 2, 2022, the Company’s long-term debt instruments had a carrying value of $990.0 million (excluding finance leases and the ABL Facility) and a fair value of approximately $946.7 million. As of December 31, 2021, the Company’s long-term debt instruments had a carrying value of $995.0 million and a fair value of approximately $991.9 million. The estimated fair value of the long-term debt is based on observable quoted prices in active markets for similar liabilities and is classified as a Level 2 input.
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Segments and Related Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments and Related Information | 10. Segments and Related Information The Company’s operational and management structure is aligned to its key geographies and go-to market strategy resulting in two reportable segments: North America (“NAM”) and Europe & Rest of World (“E&RW”). Operating segments have not been aggregated to form the reportable segments. The Company determined its reportable segments based on how the Company’s Chief Operating Decision Maker (“CODM”) reviews the Company’s operating results in assessing performance and allocating resources. The CODM reviews net sales, gross profit and segment income for each of the reportable segments. Gross profit is defined as net sales less cost of sales incurred by the segment. The CODM does not evaluate reportable segments using asset information as these are managed on an enterprise-wide basis. Segment income is defined as segment gross profit less sales, general, and administrative expenses (“SG&A”) and research, development, and engineering expense (“RD&E”). The accounting policies of the segments are the same as those of Holdings. The North America segment manufactures and sells residential and commercial swimming pool equipment and supplies as well as equipment that controls the flow of fluids. This segment is composed of three reporting units. The Europe & Rest of World segment manufactures and sells residential and commercial swimming pool equipment and supplies. This segment is composed of two reporting units. The Company sells its products primarily through distributors and retailers. Financial information by reportable segment, net of intercompany transactions, is included in the following summary (in thousands):
(1) Capital expenditures and depreciation associated with Corporate are not included in these totals. The following table presents a reconciliation of segment income to income from operations before income taxes (in thousands):
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Earnings Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | 11. Earnings Per Share The following table sets forth the computation of basic and diluted net income per share attributable to common stockholders (in thousands, except share and per share data):
(a) For the six months ended July 3, 2021, the non-cash deemed dividend represents the beneficial conversion feature related to the redemption of Class A shares for common shares as a consequence of the Company's initial public offering (the “IPO”). (b) Net income attributable to Class A stockholders is impacted by the total shares of participating securities, basic and diluted, on an as converted basis. (c) For the three months ended July 2, 2022 and July 3, 2021 there were potential common shares totaling approximately 2.6 million and 1.2 million, respectively, and for the six months ended July 2, 2022 and July 3, 2021, there were potential common shares totaling approximately 2.0 million and 0.8 million, respectively, that were excluded from the computation of diluted EPS as the effect of inclusion of such shares would have been anti-dilutive.
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Commitments and Contingencies |
6 Months Ended |
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Jul. 02, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Litigation The Company is involved in litigation arising in the normal course of business. Where appropriate, these matters have been submitted to the Company’s insurance carrier. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. It is not possible to quantify the ultimate liability, if any, in these matters. As of July 2, 2022, the Company does not have any significant pending litigation. Yuncos, Spain Fire In June 2021, an accidental fire destroyed a portion of the Company’s manufacturing and administrative facilities in Yuncos, Spain. The Company has established alternative, temporary facilities for administrative personnel affected by the fire. The disruption to the Company's global manufacturing operations was minimal, and the Company has received insurance proceeds which have mitigated the losses incurred due to the fire.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | 13. Leases The Company’s operating and finance lease portfolio is described in Note 15. Leases of Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2021. Supplemental cash flow information related to leases was as follows (in thousands):
Supplemental balance sheet information related to leases was as follows (in thousands):
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Leases | 13. Leases The Company’s operating and finance lease portfolio is described in Note 15. Leases of Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2021. Supplemental cash flow information related to leases was as follows (in thousands):
Supplemental balance sheet information related to leases was as follows (in thousands):
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Stockholders’ Equity |
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Equity [Abstract] | |
Stockholders’ Equity | 14. Stockholders’ Equity Preferred Stock The Company’s Second Restated Certificate of Incorporation authorizes the Company to issue up to 100,000,000 shares of preferred stock, $0.001 value per share, all of which is undesignated. Common Stock The Company’s Second Restated Certificate of Incorporation authorizes the Company to issue up to 750,000,000 shares of Common Stock, $0.001 value per share. Each share of Common Stock is entitled to one vote on all matters submitted to a vote of the Company’s stockholders. The holders of Common Stock are entitled to receive dividends, if any, as may be declared by the board of directors. Dividends paid For the three and six months ended July 2, 2022, no dividend was declared nor paid to the Company's common stockholders. Share Repurchases As part of the Company’s previously announced $450 million share repurchase program, on January 24, 2022, the Company agreed to repurchase 4.08 million shares of common stock from certain affiliates of one of the Company’s controlling stockholders, Capital Advisors, LP (“CCMP”), at a price per share of $19.80, for an aggregate consideration of approximately $81 million. The price per share was approved by an independent committee of the board of the directors and is the same price at which the certain affiliates of the Company's controlling stockholders (collectively, the “Sponsors”), sold their shares in a block trade in compliance with Rule 144. Closing of this share repurchase occurred on March 11, 2022. On May 2, 2022, the Company entered into an underwriting agreement (the “Underwriting Agreement”) by and among the Company, the underwriters named therein (the “Underwriters”) and the selling stockholders listed on Schedule B thereto (the “Selling Stockholders”), relating to the underwritten offering of Company common stock from the Selling Stockholders (the “Underwritten Offering”). As part of the Company’s previously announced $450 million share repurchase program, the Company agreed to purchase from the Underwriters 8 million shares being sold in the Underwritten Offering by certain affiliates of one of the Company’s controlling stockholders, CCMP, to the Underwriters, at a price per share of approximately $13.88, for an aggregate consideration of approximately $111 million. The price per share was approved by an independent committee of the board of the directors and is the same price at which the Underwriters agreed to purchase shares from the Selling Stockholders in the Underwritten Offering. Closing of this share repurchase occurred on May 5, 2022. During the three months ended July 2, 2022, the Company repurchased approximately 6.4 million shares of common stock on the open market at an average price per share of $15.72, for an aggregate consideration of approximately $101.3 million, as part of the Company’s previously announced $450 million share repurchase program. For the six months ended July 2, 2022, the Company has repurchased approximately 18.5 million shares of common stock for an aggregate consideration of approximately $293.1 million under the previously announced $450 million share repurchase program. As of July 2, 2022, $156.9 million remained available for additional share repurchases under the program.
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Stock-based Compensation |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation | 15. Stock-based Compensation Stock-based compensation expense recorded in the unaudited condensed consolidated statements of operations for equity-classified stock-based awards for the three and six months ended July 2, 2022 was $2.0 million and $3.6 million, respectively, and $1.8 million and $12.5 million, respectively, for the three and six months ended July 3, 2021. The Company has established two equity incentive plans, the 2021 Equity Incentive Plan and the 2017 Equity Incentive Plan. The Company no longer issues awards under the 2017 Equity Incentive Plan. 2021 Equity Incentive Plan In March 2021, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”). Under the 2021 Plan, up to 13,737,500 shares of common stock may be granted to employees, directors and consultants in the form of stock options, restricted stock units and other stock-based awards. The terms of awards granted under the 2021 Plan are determined by the Compensation Committee of the Board of Directors, subject to the provisions of the 2021 Plan. Options granted under the 2021 Plan expire no later than ten years from the date of grant. The vesting period of stock options and restricted stock units granted under the 2021 Plan is three years from the date of grant. In 2022, the Company began utilizing performance-based stock units (“PSUs”) as part of its equity awards program for certain senior management and executive officers. The vesting of the PSUs will be tied to organic net revenue growth and adjusted EBITDA margin, each with a relative weighting of 50%. The PSUs will be measured over 3-year performance period with a minimum of 50% of the target awarded PSUs to be earned for threshold performance and a maximum of 200% of the target awarded PSUs to be earned for maximum performance. During the six months ended July 2, 2022, the Company granted 1,078,899 options, 141,857 restricted stock units and 94,888 PSUs under the 2021 Plan with a weighted-average grant-date fair value per share of $5.51, $17.10 and $17.10, respectively. The Company determined the fair value of granted stock options at the date of grant using the Black-Scholes option-pricing model. The principal assumptions used in the Black-Scholes option-pricing model for the stock options granted were as follows:
The risk-free interest rate was based on the U.S. Treasury yield curve at date of grant over the expected term of these stock options. The expected volatility was based upon comparable public company historical volatility. The expected life was based on the average of the weighted-average vesting period and the contractual term of the stock option awards by utilizing the “simplified method”, as prescribed in the SEC’s Staff Accounting Bulletin (SAB) No. 107, as the Company does not have sufficient available historical data to estimate the expected term of these stock option awards.
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Acquisitions and Restructuring |
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Acquisition, Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions and Restructuring | 16. Acquisitions and Restructuring Acquisition and restructuring related expense, net consists of the following (in thousands):
On March 29, 2021, the Company announced the relocation of its corporate office functions to Charlotte, North Carolina from Berkeley Heights, New Jersey. As of July 2, 2022, the Company has largely completed the relocation. The estimated severance and retention costs pertaining to this relocation are approximately $5.9 million. The impacted employees must remain with the Company through their planned exit date to receive each of the severance and retention amounts. Such costs are accounted for in accordance with ASC 420, Exit or Disposal Cost Obligations. The Company incurred approximately $3.3 million of expense related to the relocation during the six months ended July 2, 2022. The following tables summarize the status of the Company's restructuring related expense and related liability balances (in thousands):
Restructuring costs are included within acquisition and restructuring related costs on the Company’s unaudited condensed consolidated statements of operations, while the restructuring liability is included as a component of accrued expenses and other liabilities on the Company’s unaudited condensed consolidated balance sheets. Acquisitions On June 2, 2022, the Company acquired the specialty lighting business of Halco Lighting Technologies, LLC. The acquired business includes a robust portfolio of lighting solutions serving the residential and commercial pool, spa, fountain, and landscape lighting market segments. The acquisition is included in our North America segment. The net acquisition cost was $59.7 million. The purchase price was funded with proceeds from the ABL Facility and cash on hand. For the three months ended July 2, 2022, transaction expenses recognized for the acquisition were $3.1 million. These expenses are included within acquisition and restructuring related costs on the Company’s unaudited condensed consolidated statements of operations. The allocation of purchase price is still preliminary as the Company finalizes aspects of the valuation including intangible, inventory and fixed asset valuations. Preliminary estimates will be finalized within one year of the date of acquisition. The following table summarizes the consideration transferred and the preliminary allocation of the purchase price among the assets acquired and liabilities assumed (in thousands):
The following table summarizes the identifiable intangible assets, net and their useful lives. The weighted average amortization period for the acquired intangible assets is 13.6 years.
Goodwill is a result of the expected synergies and cross-selling opportunities this acquisition is expected to bring as well as the expected growth potential from the integration of the specialty lighting products into Hayward’s OmniLogic automation technology. The goodwill balance has been recorded to the North America reportable segment and is deductible for tax purposes. On December 31, 2021, the Company acquired Water Works Technologies Group, LLC (“Water Works”) and during the three months ended July 2, 2022, the Company completed its acquisition accounting and made no significant adjustments during the measurement period. As a result of the acquisition, the Company recognized net assets of $14.0 million, including goodwill of $6.5 million and definite-lived technology and trademark intangible assets of $5.5 million.
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Related Party Transactions |
6 Months Ended |
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Jul. 02, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 17. Related-Party Transactions Other than the stock repurchases described in Note 14. Stockholders’ Equity, the Company did not incur any significant related party transactions for the three and six months ended July 2, 2022. Prior to the IPO in March 2021, the Company incurred management fees to certain affiliates of the Company's controlling stockholders (the “Sponsors”) in the amount of $0.2 million for the six months ended July 3, 2021. In addition, $41 thousand in Class C dividends were incurred to one Sponsor in lieu of management fees for the six months ended July 3, 2021.
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Subsequent Events |
6 Months Ended |
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Jul. 02, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. Subsequent Events In the six months ended June 30, 2022, the Company repurchased approximately $293.1 million in common stock under its previously approved share repurchase program, leaving approximately $156.9 million remaining under the initial authorization. On July 26, 2022, the board of directors renewed the initial authorization of its share repurchase program (the “Share Repurchase Program”) such that the Company is authorized to repurchase up to an aggregate of $450 million of our common stock with such authority expiring on July 26, 2025. Repurchases under the Share Repurchase Program will be funded by cash on hand and cash generated from operations and may be made, from time to time, in amounts and at prices the Company deems appropriate and will be subject to a variety of factors, including the market price of the Company’s common stock, general market and economic conditions, applicable legal requirements and other considerations. The Share Repurchase Program is expected to be conducted through privately negotiated transactions, including with the Sponsors, as well as through open market repurchases or other means, including through Rule 10b5-1(c) trading plans or through the use of other techniques such as accelerated share repurchases. The Share Repurchase Program may be suspended, modified or discontinued at any time without prior notice.
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Significant Accounting Policies (Policies) |
6 Months Ended |
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Jul. 02, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of such information. All such adjustments are of a normal recurring nature. Certain information and note disclosures, including a description of significant accounting policies normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the Company’s annual consolidated financial statements and notes thereto for the fiscal year ended December 31, 2021. The results of operations for the three and six months ended July 2, 2022 are not necessarily indicative of the results for any subsequent periods or the entire fiscal year ending December 31, 2022. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. In the third quarter of the prior year, the Company changed its presentation from millions to thousands and, as a result, any necessary rounding adjustments have been made to prior-year disclosed amounts. Certain prior-period amounts have been reclassified for comparative purposes to conform to the current presentation.
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Recent Accounting Pronouncements Not Yet Adopted and Recently Adopted Accounting Standards | Recent Accounting Pronouncements Not Yet Adopted Reference Rate Reform In March 2020, the Financial Accounting Standards Board (“FASB”) issued guidance that provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. The Company is currently evaluating the potential effects of the adoption of this guidance. Recently Adopted Accounting Standards Accounting for Leases In February 2016, the FASB issued , Leases (“Topic 842”) or the (“new standard”), and issued subsequent amendments to the initial guidance thereafter. The standard became effective for the Company on December 31, 2021 because the Company ceased to be an Emerging Growth Company (“EGC”) under applicable rules of the SEC as of December 31, 2021, and the Company retrospectively adopted the standard as of January 1, 2021. The impact upon adoption as of January 1, 2021 resulted in the initial recognition of lease liabilities based on the present value of the remaining minimum rental payments for existing operating leases of approximately $48.6 million and corresponding right-of-use (“ROU”) assets of approximately $43.9 million on the consolidated balance sheets. The ROU assets are net of $4.7 million of liabilities for deferred rent and unamortized landlord lease incentives that were previously recorded as other noncurrent liabilities. The adoption did not have a material impact on the unaudited condensed consolidated statements of operations and comprehensive income or unaudited condensed consolidated statements of cash flows.
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Revenue (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Sales by Product Groups | The following table disaggregates net sales between product groups and geographic regions, respectively (in thousands):
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Schedule of Net Sales by Geographic Destinations | The following table disaggregates net sales between product groups and geographic regions, respectively (in thousands):
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Inventories (Tables) |
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Jul. 02, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories, Net | Inventories, net, consist of the following (in thousands):
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Accrued Expenses and Other Liabilities (Tables) |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities and Other Current Liabilities | Accrued expenses and other liabilities consist of the following (in thousands):
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Schedule of Change in Warranty Reserve | The following table summarizes the warranty reserve activities (in thousands):
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Long-Term Debt, Net (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | Long-term debt, net, consists of the following (in thousands):
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Derivatives and Hedging Transactions (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effect of Derivative Instruments in the Statement of Financial Position and Operations and Comprehensive Income (Loss) | The following table summarizes the gross fair values and location of the significant derivative instruments within Company's unaudited condensed consolidated balance sheets (in thousands):
The following tables present the effects of derivative instruments by contract type in accumulated other comprehensive income (“AOCI”) in the Company's unaudited condensed consolidated statements of comprehensive income (in thousands):
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Segments and Related Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The Company sells its products primarily through distributors and retailers. Financial information by reportable segment, net of intercompany transactions, is included in the following summary (in thousands):
(1) Capital expenditures and depreciation associated with Corporate are not included in these totals. The following table presents a reconciliation of segment income to income from operations before income taxes (in thousands):
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Earnings Per Share (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted net income per share attributable to common stockholders (in thousands, except share and per share data):
(a) For the six months ended July 3, 2021, the non-cash deemed dividend represents the beneficial conversion feature related to the redemption of Class A shares for common shares as a consequence of the Company's initial public offering (the “IPO”). (b) Net income attributable to Class A stockholders is impacted by the total shares of participating securities, basic and diluted, on an as converted basis. (c) For the three months ended July 2, 2022 and July 3, 2021 there were potential common shares totaling approximately 2.6 million and 1.2 million, respectively, and for the six months ended July 2, 2022 and July 3, 2021, there were potential common shares totaling approximately 2.0 million and 0.8 million, respectively, that were excluded from the computation of diluted EPS as the effect of inclusion of such shares would have been anti-dilutive.
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost | Supplemental cash flow information related to leases was as follows (in thousands):
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Assets and Liabilities, Lessee | Supplemental balance sheet information related to leases was as follows (in thousands):
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Stock-based Compensation (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Option Pricing Model for Stock Options Granted | The principal assumptions used in the Black-Scholes option-pricing model for the stock options granted were as follows:
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Acquisitions and Restructuring (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Acquisition, Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Acquisition and Restructuring Related Income | Acquisition and restructuring related expense, net consists of the following (in thousands):
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Schedule of Charges for Facility Closure and Other One Time Termination Benefits | The following tables summarize the status of the Company's restructuring related expense and related liability balances (in thousands):
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the consideration transferred and the preliminary allocation of the purchase price among the assets acquired and liabilities assumed (in thousands):
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Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The following table summarizes the identifiable intangible assets, net and their useful lives. The weighted average amortization period for the acquired intangible assets is 13.6 years.
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Nature of Operations and Organization (Details) |
Jul. 02, 2022
manufacturing_facility
|
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of manufacturing facilities | 9 |
Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands |
Jan. 01, 2022 |
Jul. 02, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Other Commitments [Line Items] | |||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2016-02 [Member] | ||
Operating lease liability | $ 75,858 | $ 69,111 | |
Right-of-use asset | $ 67,891 | $ 63,611 | |
Cumulative Effect, Period of Adoption, Adjustment | |||
Other Commitments [Line Items] | |||
Operating lease liability | $ 48,600 | ||
Right-of-use asset | 43,900 | ||
Liabilities for deferred rent and unamortized landlord lease incentives | $ 4,700 |
Inventories (Details) - USD ($) $ in Thousands |
Jul. 02, 2022 |
Dec. 31, 2021 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 142,165 | $ 124,545 |
Work in progress | 21,768 | 22,669 |
Finished goods | 148,528 | 86,235 |
Total inventory | $ 312,461 | $ 233,449 |
Accrued Expenses and Other Liabilities - Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands |
Jul. 02, 2022 |
Apr. 02, 2022 |
Dec. 31, 2021 |
Jul. 03, 2021 |
Apr. 03, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|---|---|
Payables and Accruals [Abstract] | ||||||
Selling, promotional and advertising | $ 42,490 | $ 41,975 | ||||
Employee compensation and benefits | 27,151 | 49,552 | ||||
Warranty reserve | 26,919 | $ 27,188 | 24,174 | $ 24,697 | $ 21,877 | $ 16,412 |
Inventory purchases | 46,522 | 18,606 | ||||
Insurance reserve | 10,263 | 8,842 | ||||
Deferred income | 8,906 | 8,074 | ||||
Operating lease liability - short term | 8,550 | 7,546 | ||||
Business restructuring costs | 1,416 | 1,397 | ||||
Professional fees | 2,284 | 2,027 | ||||
Payroll taxes | 3,433 | 4,522 | ||||
Other accrued liabilities | 22,752 | 23,663 | ||||
Accrued expenses and other liabilities | $ 200,686 | $ 190,378 |
Accrued Expenses and Other Liabilities - Warranty Reserve (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Jul. 02, 2022 |
Apr. 02, 2022 |
Jul. 03, 2021 |
Apr. 03, 2021 |
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Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Beginning balance | $ 27,188 | $ 24,174 | $ 21,877 | $ 16,412 |
Accrual for warranties issued during the period | 8,784 | 9,413 | 9,850 | 10,109 |
Payments | (9,053) | (6,399) | (7,030) | (4,644) |
Ending balance | $ 26,919 | $ 27,188 | $ 24,697 | $ 21,877 |
Accrued Expenses and Other Liabilities - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2022 |
Jul. 03, 2021 |
Jul. 02, 2022 |
Jul. 03, 2021 |
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Payables and Accruals [Abstract] | ||||
Warranty expense | $ 8.8 | $ 9.9 | $ 18.2 | $ 20.0 |
Income Taxes (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2022 |
Jul. 03, 2021 |
Jul. 02, 2022 |
Jul. 03, 2021 |
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Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 24.10% | 19.40% | 24.00% | 23.60% |
Uncertain tax positions reserve | $ 0 | $ 0 | $ 0 | $ 0 |
Long-Term Debt, Net - Schedule Of Long-Term Debt (Details) - USD ($) $ in Thousands |
Jul. 02, 2022 |
Dec. 31, 2021 |
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Line of Credit Facility [Line Items] | ||
Finance lease obligations | $ 7,560 | $ 7,780 |
Long-term debt, subtotal | 1,147,560 | 1,002,780 |
Current portion of the long-term debt | (11,957) | (12,155) |
Less: Unamortized debt issuance costs | (16,291) | (17,501) |
Long-term debt, net | 1,119,312 | 973,124 |
Term Loan | First Lien Term Facility, Due May 28, 2028 | ||
Line of Credit Facility [Line Items] | ||
Long-term debt, gross | 990,000 | 995,000 |
Revolving Credit Facility | ABL Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Long-term debt, gross | $ 150,000 | $ 0 |
Long-Term Debt, Net - Additional Information (Details) - Term Loan - First Lien Term Facility, Due May 28, 2028 |
1 Months Ended | |
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May 28, 2021 |
Apr. 30, 2023 |
|
Line of Credit Facility [Line Items] | ||
Leverage ratio threshold for mandatory prepayment of zero | 2.5 | |
Leverage ratio threshold for mandatory prepayment of fifty percent | 3 | |
Minimum | Forecast | ||
Line of Credit Facility [Line Items] | ||
Mandatory annual prepayment, percentage of excess cash | 0.00% | |
Maximum | Forecast | ||
Line of Credit Facility [Line Items] | ||
Mandatory annual prepayment, percentage of excess cash | 50.00% |
Derivatives and Hedging Transactions - Additional Information (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jul. 02, 2022 |
Jul. 03, 2021 |
Jul. 02, 2022 |
Jul. 03, 2021 |
Apr. 02, 2022 |
Dec. 31, 2021 |
|
Derivative [Line Items] | ||||||
Other nonoperating expense | $ 3,804,000 | $ (1,000,000) | $ 3,290,000 | $ 2,568,000 | ||
Cash Flow Hedging | ||||||
Derivative [Line Items] | ||||||
Outstanding net investment hedges | 0 | 0 | $ 0 | |||
Interest Rate Swap | Cash Flow Hedging | ||||||
Derivative [Line Items] | ||||||
Derivative, notional amount | 500,000,000 | 550,000,000 | 500,000,000 | 550,000,000 | $ 500,000,000 | |
Foreign exchange contracts | ||||||
Derivative [Line Items] | ||||||
Other nonoperating expense | $ 1,400,000 | $ 400,000 | $ 300,000 | $ 800,000 |
Fair Value Measurements (Details) - Level 2, fair value inputs - USD ($) $ in Millions |
Jul. 02, 2022 |
Dec. 31, 2021 |
---|---|---|
Carrying value | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 990.0 | $ 995.0 |
Fair value | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 946.7 | $ 991.9 |
Segments and Related Information - Additional Information (Details) |
6 Months Ended |
---|---|
Jul. 02, 2022
reporting_unit
segment
| |
Revenue, Major Customer [Line Items] | |
Number of reportable segments | segment | 2 |
North America | |
Revenue, Major Customer [Line Items] | |
Number of reporting units | 3 |
Europe & Rest of World | |
Revenue, Major Customer [Line Items] | |
Number of reporting units | 2 |
Segments and Related Information - Reconciliation of Segment Income to Income from Operations Before Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2022 |
Jul. 03, 2021 |
Jul. 02, 2022 |
Jul. 03, 2021 |
|
Revenue, Major Customer [Line Items] | ||||
Operating income | $ 102,748 | $ 80,951 | $ 209,168 | $ 160,652 |
Acquisition and restructuring related expense | 4,940 | 1,636 | 7,211 | 1,669 |
Amortization of intangible assets | 7,697 | 8,632 | 15,307 | 17,462 |
Interest expense, net | 11,605 | 12,975 | 21,167 | 31,247 |
Loss on debt extinguishment | 0 | 3,608 | 0 | 9,418 |
Other (income) expense, net | 3,804 | (1,000) | 3,290 | 2,568 |
Total other expense | 15,409 | 15,583 | 24,457 | 43,233 |
Income from operations before income taxes | 87,339 | 65,368 | 184,711 | 117,419 |
Operating segments | ||||
Revenue, Major Customer [Line Items] | ||||
Operating income | 123,771 | 101,652 | 249,351 | 202,346 |
Corporate | ||||
Revenue, Major Customer [Line Items] | ||||
Operating income | $ 8,386 | $ 10,433 | $ 17,665 | $ 22,563 |
Leases - Supplemental Cash Flows Information (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jul. 02, 2022 |
Jul. 03, 2021 |
|
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 9,331 | $ 1,472 |
Finance leases | $ 1,531 | $ 0 |
Stock-based Compensation - Black-Scholes Option-Pricing Model (Details) - 2021 Plan |
6 Months Ended |
---|---|
Jul. 02, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 1.78% |
Expected life in years | 6 years |
Expected dividend yield | 0.00% |
Expected volatility | 29.61% |
Acquisitions and Restructuring - Acquisition and Restructuring Related Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2022 |
Jul. 03, 2021 |
Jul. 02, 2022 |
Jul. 03, 2021 |
|
Acquisition, Restructuring and Related Activities [Abstract] | ||||
Business restructuring costs | $ 1,862 | $ 1,636 | $ 3,988 | $ 1,669 |
Acquisition transaction and integration costs | 3,078 | 0 | 3,223 | 0 |
Acquisition And Restructuring Related Expense (Income) | $ 4,940 | $ 1,636 | $ 7,211 | $ 1,669 |
Acquisitions and Restructuring - Additional Information (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 02, 2022 |
Jul. 02, 2022 |
Dec. 31, 2021 |
|
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | $ 5,900 | ||
Goodwill | 926,730 | $ 924,264 | |
Halco Lighting Technologies | |||
Restructuring Cost and Reserve [Line Items] | |||
Consideration transferred | $ 59,700 | ||
Transaction costs | 3,100 | ||
Weighted average amortization period | 13 years 7 months 6 days | ||
Goodwill | $ 6,740 | ||
Total intangible assets with definite lives | $ 39,350 | ||
Water Works Technologies Group, LLC | |||
Restructuring Cost and Reserve [Line Items] | |||
Net assets assumed | 14,000 | ||
Goodwill | 6,500 | ||
Water Works Technologies Group, LLC | Technology and Trademark | |||
Restructuring Cost and Reserve [Line Items] | |||
Total intangible assets with definite lives | 5,500 | ||
Employee Severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 3,300 |
Acquisitions and Restructuring - Facility Closure and Other One-Time Termination Benefits (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jul. 02, 2022 |
Jul. 03, 2021 |
|
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | $ 5,436 | $ 0 |
Costs Recognized | 3,988 | 1,669 |
Cash Payments | (6,254) | 0 |
Ending Balance | 3,170 | 1,669 |
One-time termination benefits | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 1,035 | 0 |
Costs Recognized | 1,419 | 643 |
Cash Payments | (1,038) | 0 |
Ending Balance | 1,416 | 643 |
Facility-related | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 27 | 0 |
Costs Recognized | 337 | 992 |
Cash Payments | (364) | 0 |
Ending Balance | 0 | 992 |
Other | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 4,374 | 0 |
Costs Recognized | 2,232 | 34 |
Cash Payments | (4,852) | 0 |
Ending Balance | $ 1,754 | $ 34 |
Acquisitions and Restructuring - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Jul. 02, 2022 |
Jun. 02, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Assets | |||
Goodwill | $ 926,730 | $ 924,264 | |
Halco Lighting Technologies | |||
Assets | |||
Accounts receivable | $ 3,905 | ||
Inventory | 16,465 | ||
Other current assets | 521 | ||
Property, plant and equipment | 187 | ||
Goodwill | 6,740 | ||
Identifiable intangible assets, net | 39,350 | ||
Other noncurrent assets | 13 | ||
Less: Liabilities assumed | |||
Accounts payable | (6,091) | ||
Accrued liabilities | (1,430) | ||
Net assets acquired | $ 59,660 |
Acquisitions and Restructuring - Acquired Intangible Assets (Details) - Halco Lighting Technologies $ in Thousands |
Jun. 02, 2022
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Useful life | 13 years 7 months 6 days |
Total intangible assets with definite lives | $ 39,350 |
Customer relationships | |
Business Acquisition [Line Items] | |
Useful life | 15 years |
Total intangible assets with definite lives | $ 26,000 |
Tradename | |
Business Acquisition [Line Items] | |
Useful life | 15 years |
Total intangible assets with definite lives | $ 3,700 |
Developed technology | |
Business Acquisition [Line Items] | |
Useful life | 10 years |
Total intangible assets with definite lives | $ 8,400 |
Noncompete agreements | |
Business Acquisition [Line Items] | |
Useful life | 5 years |
Total intangible assets with definite lives | $ 1,250 |
Related Party Transactions (Details) - Sponsors - USD ($) $ in Thousands |
2 Months Ended | 6 Months Ended |
---|---|---|
Mar. 12, 2021 |
Jul. 03, 2021 |
|
Management Fees, Prior To IPO | ||
Related Party Transaction [Line Items] | ||
Management fee | $ 200 | |
Common Class C | Dividends paid | ||
Related Party Transaction [Line Items] | ||
Management fee | $ 41 |
Subsequent Events - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2022 |
Jul. 02, 2022 |
Jul. 26, 2022 |
Jan. 24, 2022 |
|
Subsequent Event [Line Items] | ||||
Consideration cost of shares repurchased | $ 101.3 | $ 293.1 | ||
Remaining amount authorized for repurchase | $ 156.9 | $ 156.9 | ||
Share repurchase program amount | $ 450.0 | |||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Share repurchase program amount | $ 450.0 |
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