Hayward Holdings, Inc. included an update on its previously reported securities class action lawsuit in its quarterly report for the period ended June 27, 2026. The filing confirms that the litigation, which alleged the company and certain officers made materially false and misleading statements regarding inventory levels, growth, and demand, has reached a final resolution.
Settlement background
The class action lawsuit, filed in the United States District Court for the District of New Jersey, covered investors who purchased or acquired Hayward common stock between October 27, 2021, and July 28, 2022. The plaintiffs claimed that Hayward and several executives, along with private equity sponsors CCMP Capital and MSD Partners, painted an overly optimistic picture of the company's pool equipment business even as underlying conditions deteriorated. When the company later disclosed weaker results, the stock price declined and investors incurred losses.
According to the 10-Q filing, the parties reached a settlement agreement in which Hayward agreed to pay $19.85 million to resolve all claims. The settlement received final court approval, and the company noted that the payment was funded entirely by its insurance carriers. As a result, the settlement did not have a material impact on Hayward's cash position or results of operations.
Financial context
The disclosure arrived in a quarterly report that otherwise showed improving financial performance. Net sales for the second quarter rose to $318.4 million, up 6.3% from $299.6 million in the prior year period. Net income increased modestly to $45.6 million from $44.8 million. For the first six months of fiscal 2026, net sales reached $573.6 million compared to $528.4 million in the same period last year, with net income climbing to $69.0 million from $59.1 million.
The settlement was recorded within the company's accrued expenses and other liabilities, and the insurance recovery offset the charge. Hayward's balance sheet remains solid, with $304.1 million in cash and cash equivalents and $179.3 million in short-term investments as of June 27, 2026.
What this means for the company
The final approval of the settlement removes a legal overhang that had been pending since the class action was first filed. With the matter resolved and funded through insurance, Hayward can put this chapter of securities litigation behind it without a direct hit to its operating cash flow. The company did not admit any wrongdoing as part of the settlement, which is standard in such resolutions.
The class period covered a relatively narrow window from late 2021 through mid-2022, a time when many pandemic-era growth stories in the pool and outdoor living sector were recalibrating as consumer behavior normalized. The settlement amount of $19.85 million, while not trivial, is modest relative to Hayward's current market capitalization and cash reserves.