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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Pool Corporation | NASDAQ:POOL | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-3.03 | -0.84% | 359.50 | 360.25 | 392.00 | 367.29 | 354.51 | 362.53 | 397,536 | 01:00:00 |
x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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POOL CORPORATION
|
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(Exact name of registrant as specified in its charter)
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Delaware
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36-3943363
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(State or other jurisdiction of
|
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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109 Northpark Boulevard,
Covington, Louisiana
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70433-5001
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(Address of principal executive offices)
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(Zip Code)
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985-892-5521
|
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(Registrant’s telephone number, including area code)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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Page
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Three Months Ended
|
||||||
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March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net sales
|
$
|
597,456
|
|
|
$
|
585,900
|
|
Cost of sales
|
422,825
|
|
|
419,827
|
|
||
Gross profit
|
174,631
|
|
|
166,073
|
|
||
Selling and administrative expenses
|
136,245
|
|
|
132,532
|
|
||
Operating income
|
38,386
|
|
|
33,541
|
|
||
Interest and other non-operating expenses, net
|
6,616
|
|
|
3,527
|
|
||
Income before income taxes and equity earnings
|
31,770
|
|
|
30,014
|
|
||
Income tax benefit
|
(802
|
)
|
|
(1,279
|
)
|
||
Equity earnings in unconsolidated investments, net
|
65
|
|
|
46
|
|
||
Net income
|
$
|
32,637
|
|
|
$
|
31,339
|
|
|
|
|
|
||||
Earnings per share:
|
|
|
|
||||
Basic
|
$
|
0.83
|
|
|
$
|
0.78
|
|
Diluted
|
$
|
0.80
|
|
|
$
|
0.75
|
|
Weighted average shares outstanding:
|
|
|
|
||||
Basic
|
39,479
|
|
|
40,370
|
|
||
Diluted
|
40,696
|
|
|
41,862
|
|
||
|
|
|
|
||||
Cash dividends declared per common share
|
$
|
0.45
|
|
|
$
|
0.37
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
32,637
|
|
|
$
|
31,339
|
|
Other comprehensive (loss) income:
|
|
|
|
||||
Foreign currency translation gains
|
214
|
|
|
976
|
|
||
Change in unrealized (losses) gains on interest rate swaps, net of change in taxes of $90 and $(275)
|
(269
|
)
|
|
824
|
|
||
Total other comprehensive (loss) income
|
(55
|
)
|
|
1,800
|
|
||
Comprehensive income
|
$
|
32,582
|
|
|
$
|
33,139
|
|
|
|
March 31,
|
|
March 31,
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
|
2018
(1)
|
||||||
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
28,581
|
|
|
$
|
8,803
|
|
|
$
|
16,358
|
|
Receivables, net
|
|
72,352
|
|
|
75,889
|
|
|
69,493
|
|
|||
Receivables pledged under receivables facility
|
|
240,775
|
|
|
238,707
|
|
|
138,308
|
|
|||
Product inventories, net
|
|
815,742
|
|
|
703,793
|
|
|
672,579
|
|
|||
Prepaid expenses and other current assets
|
|
16,116
|
|
|
23,714
|
|
|
18,506
|
|
|||
Total current assets
|
|
1,173,566
|
|
|
1,050,906
|
|
|
915,244
|
|
|||
|
|
|
|
|
|
|
||||||
Property and equipment, net
|
|
107,690
|
|
|
109,310
|
|
|
106,964
|
|
|||
Goodwill
|
|
188,478
|
|
|
189,759
|
|
|
188,472
|
|
|||
Other intangible assets, net
|
|
11,744
|
|
|
12,926
|
|
|
12,004
|
|
|||
Equity interest investments
|
|
1,200
|
|
|
1,150
|
|
|
1,213
|
|
|||
Operating lease assets
|
|
177,293
|
|
|
—
|
|
|
—
|
|
|||
Other assets
|
|
18,379
|
|
|
15,615
|
|
|
16,974
|
|
|||
Total assets
|
|
$
|
1,678,350
|
|
|
$
|
1,379,666
|
|
|
$
|
1,240,871
|
|
|
|
|
|
|
|
|
||||||
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|
|
|
|||||
Accounts payable
|
|
$
|
472,487
|
|
|
$
|
467,795
|
|
|
$
|
237,835
|
|
Accrued expenses and other current liabilities
|
|
47,658
|
|
|
45,504
|
|
|
58,607
|
|
|||
Short-term borrowings and current portion of long-term debt
|
|
21,734
|
|
|
20,786
|
|
|
9,168
|
|
|||
Current operating lease liabilities
|
|
55,744
|
|
|
—
|
|
|
—
|
|
|||
Total current liabilities
|
|
597,623
|
|
|
534,085
|
|
|
305,610
|
|
|||
|
|
|
|
|
|
|
||||||
Deferred income taxes
|
|
29,368
|
|
|
24,947
|
|
|
29,399
|
|
|||
Long-term debt, net
|
|
677,243
|
|
|
547,324
|
|
|
657,593
|
|
|||
Other long-term liabilities
|
|
26,469
|
|
|
23,525
|
|
|
24,679
|
|
|||
Non-current operating lease liabilities
|
|
122,770
|
|
|
—
|
|
|
—
|
|
|||
Total liabilities
|
|
1,453,473
|
|
|
1,129,881
|
|
|
1,017,281
|
|
|||
|
|
|
|
|
|
|
||||||
Stockholders’ equity:
|
|
|
|
|
|
|
||||||
Common stock, $0.001 par value; 100,000,000 shares authorized;
39,679,157, 40,568,775
and 39,506,067 shares issued and
outstanding at March 31, 2019, March 31, 2018 and
December 31, 2018, respectively
|
|
40
|
|
|
41
|
|
|
40
|
|
|||
Additional paid-in capital
|
|
463,522
|
|
|
437,878
|
|
|
453,193
|
|
|||
Retained deficit
|
|
(227,633
|
)
|
|
(182,580
|
)
|
|
(218,646
|
)
|
|||
Accumulated other comprehensive loss
|
|
(11,052
|
)
|
|
(5,554
|
)
|
|
(10,997
|
)
|
|||
Total stockholders’ equity
|
|
224,877
|
|
|
249,785
|
|
|
223,590
|
|
|||
Total liabilities and stockholders’ equity
|
|
$
|
1,678,350
|
|
|
$
|
1,379,666
|
|
|
$
|
1,240,871
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
32,637
|
|
|
$
|
31,339
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
||||
Depreciation
|
|
6,649
|
|
|
6,299
|
|
||
Amortization
|
|
375
|
|
|
470
|
|
||
Share-based compensation
|
|
3,259
|
|
|
3,321
|
|
||
Equity earnings in unconsolidated investments, net
|
|
(65
|
)
|
|
(46
|
)
|
||
Other
|
|
512
|
|
|
681
|
|
||
Changes in operating assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
||||
Receivables
|
|
(103,122
|
)
|
|
(117,377
|
)
|
||
Product inventories
|
|
(128,206
|
)
|
|
(168,518
|
)
|
||
Prepaid expenses and other assets
|
|
(1,427
|
)
|
|
(3,843
|
)
|
||
Accounts payable
|
|
230,030
|
|
|
222,285
|
|
||
Accrued expenses and other current liabilities
|
|
(11,838
|
)
|
|
(18,760
|
)
|
||
Net cash provided by (used in) operating activities
|
|
28,804
|
|
|
(44,149
|
)
|
||
|
|
|
|
|
||||
Investing activities
|
|
|
|
|
||||
Acquisition of businesses, net of cash acquired
|
|
(9,370
|
)
|
|
(578
|
)
|
||
Purchases of property and equipment, net of sale proceeds
|
|
(6,739
|
)
|
|
(14,639
|
)
|
||
Net cash used in investing activities
|
|
(16,109
|
)
|
|
(15,217
|
)
|
||
|
|
|
|
|
||||
Financing activities
|
|
|
|
|
||||
Proceeds from revolving line of credit
|
|
206,190
|
|
|
148,335
|
|
||
Payments on revolving line of credit
|
|
(253,249
|
)
|
|
(170,012
|
)
|
||
Proceeds from asset-backed financing
|
|
80,100
|
|
|
80,000
|
|
||
Payments on asset-backed financing
|
|
(13,500
|
)
|
|
(20,000
|
)
|
||
Proceeds from short-term borrowings and current portion of long-term debt
|
|
13,713
|
|
|
10,798
|
|
||
Payments on short-term borrowings and current portion of long-term debt
|
|
(1,148
|
)
|
|
(848
|
)
|
||
Payments of deferred and contingent acquisition consideration
|
|
(311
|
)
|
|
(265
|
)
|
||
Payments of deferred financing costs
|
|
—
|
|
|
(8
|
)
|
||
Proceeds from stock issued under share-based compensation plans
|
|
7,071
|
|
|
7,808
|
|
||
Payments of cash dividends
|
|
(17,819
|
)
|
|
(15,011
|
)
|
||
Purchases of treasury stock
|
|
(23,097
|
)
|
|
(2,592
|
)
|
||
Net cash (used in) provided by financing activities
|
|
(2,050
|
)
|
|
38,205
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
1,578
|
|
|
24
|
|
||
Change in cash and cash equivalents
|
|
12,223
|
|
|
(21,137
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
16,358
|
|
|
29,940
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
28,581
|
|
|
$
|
8,803
|
|
|
|
Common Stock
|
|
Additional
Paid-In
|
|
Retained
|
|
Accumulated
Other
Comprehensive
|
|
|
|||||||||||||
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Loss
|
|
Total
|
|||||||||||
Balance at December 31, 2018
|
|
39,506
|
|
|
$
|
40
|
|
|
$
|
453,193
|
|
|
$
|
(218,646
|
)
|
|
$
|
(10,997
|
)
|
|
$
|
223,590
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,637
|
|
|
—
|
|
|
32,637
|
|
|||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
214
|
|
|
214
|
|
|||||
Interest rate swaps, net of the change in taxes of $90
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(269
|
)
|
|
(269
|
)
|
|||||
Repurchases of common stock, net of retirements
|
|
(155
|
)
|
|
(1
|
)
|
|
—
|
|
|
(23,096
|
)
|
|
—
|
|
|
(23,097
|
)
|
|||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
3,259
|
|
|
—
|
|
|
—
|
|
|
3,259
|
|
|||||
Adoption of ASU 2016-02
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(709
|
)
|
|
—
|
|
|
(709
|
)
|
|||||
Issuance of shares under share-based compensation plans
|
|
328
|
|
|
1
|
|
|
7,070
|
|
|
—
|
|
|
—
|
|
|
7,071
|
|
|||||
Declaration of cash dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,819
|
)
|
|
—
|
|
|
(17,819
|
)
|
|||||
Balance at March 31, 2019
|
|
39,679
|
|
|
$
|
40
|
|
|
$
|
463,522
|
|
|
$
|
(227,633
|
)
|
|
$
|
(11,052
|
)
|
|
$
|
224,877
|
|
|
|
Common Stock
|
|
Additional
Paid-In
|
|
Retained
|
|
Accumulated
Other
Comprehensive
|
|
|
|||||||||||||
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Loss
|
|
Total
|
|||||||||||
Balance at December 31, 2017
|
|
40,212
|
|
|
$
|
40
|
|
|
$
|
426,750
|
|
|
$
|
(196,316
|
)
|
|
$
|
(7,328
|
)
|
|
$
|
223,146
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,339
|
|
|
—
|
|
|
31,339
|
|
|||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
976
|
|
|
976
|
|
|||||
Interest rate swaps, net of the change in taxes of $(275)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
824
|
|
|
824
|
|
|||||
Repurchases of common stock, net of retirements
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(2,592
|
)
|
|
—
|
|
|
(2,592
|
)
|
|||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
3,321
|
|
|
—
|
|
|
—
|
|
|
3,321
|
|
|||||
Issuance of shares under share-based compensation plans
|
|
375
|
|
|
1
|
|
|
7,807
|
|
|
—
|
|
|
—
|
|
|
7,808
|
|
|||||
Declaration of cash dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,011
|
)
|
|
—
|
|
|
(15,011
|
)
|
|||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
(26
|
)
|
|||||
Balance at March 31, 2018
|
|
40,569
|
|
|
$
|
41
|
|
|
$
|
437,878
|
|
|
$
|
(182,580
|
)
|
|
$
|
(5,554
|
)
|
|
$
|
249,785
|
|
|
|
|
Three Months Ended
|
||||||
|
|
|
March 31,
|
||||||
Lease Cost
|
Classification
|
|
2019
|
|
2018
|
||||
Operating lease cost
(1)
|
Selling and administrative expenses
|
|
$
|
15,070
|
|
|
$
|
14,553
|
|
Variable lease cost
|
Selling and administrative expenses
|
|
3,259
|
|
|
3,021
|
|
2019
|
|
$
|
38,389
|
|
2020
|
|
50,443
|
|
|
2021
|
|
39,184
|
|
|
2022
|
|
29,883
|
|
|
2023
|
|
18,089
|
|
|
Thereafter
|
|
17,554
|
|
|
Total lease payments
|
|
193,542
|
|
|
Less: interest
|
|
15,028
|
|
|
Present value of lease liabilities
|
|
178,514
|
|
|
|
March 31,
|
|
Lease Term and Discount Rate
|
|
2019
|
|
Weighted-average remaining lease term (years)
|
|
|
|
Operating leases
|
|
5.21
|
|
Weighted-average discount rate
|
|
|
|
Operating leases
|
|
3.5
|
%
|
|
|
Three Months Ended
|
||
|
|
March 31,
|
||
|
|
2019
|
||
Operating cash flows for lease liabilities
|
|
$
|
14,080
|
|
|
March 31,
|
|
December 31,
|
||||||||
|
2019
|
|
2018
|
|
2018
|
||||||
Foreign currency translation adjustments
|
$
|
(12,208
|
)
|
|
$
|
(6,528
|
)
|
|
$
|
(12,422
|
)
|
Unrealized gains on interest rate swaps, net of tax
(1)
|
1,156
|
|
|
974
|
|
|
1,425
|
|
|||
Accumulated other comprehensive loss
|
$
|
(11,052
|
)
|
|
$
|
(5,554
|
)
|
|
$
|
(10,997
|
)
|
(1)
|
In February 2018, the Financial Accounting Standards Board (FASB) issued guidance that allows entities the option to reclassify the tax effects related to items in accumulated other comprehensive income (loss) to retained earnings (deficit) if deemed to be stranded in accumulated other comprehensive income (loss) due to U.S. tax reform. We do not have any material amounts stranded in Accumulated other comprehensive loss as a result of U.S. tax reform.
|
Standard
|
Description
|
Effective Date
|
Effect on Financial Statements and Other Significant Matters
|
ASU 2016-13,
Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
|
Changes the way companies evaluate credit losses for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model to evaluate impairment, potentially resulting in earlier recognition of allowances for losses. The new standard also requires enhanced disclosures, including the requirement to disclose the information used to track credit quality by year of origination for most financing receivables. The guidance must be applied using a cumulative-effect transition method.
|
Annual periods beginning after December 15, 2019
|
We are currently evaluating the effect this will have on our financial position, results of operations and related disclosures.
|
ASU 2017-04,
Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment
|
Eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (commonly referred to as Step 2 under the current guidance). Rather, the measurement of a goodwill impairment charge will be based on the excess of a reporting unit’s carrying value over its fair value (Step 1 under the current guidance). This guidance should be applied prospectively.
|
Annual and interim impairment tests performed in periods beginning after December 15, 2019
|
We are currently evaluating the effect this will have on our financial position, results of operations and related disclosures.
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Net income
|
|
$
|
32,637
|
|
|
$
|
31,339
|
|
|
|
|
|
|
||||
Weighted average shares outstanding:
|
|
|
|
|
||||
Basic
|
|
39,479
|
|
|
40,370
|
|
||
Effect of dilutive securities:
|
|
|
|
|
||||
Stock options and employee stock purchase plan
|
|
1,217
|
|
|
1,492
|
|
||
Diluted
|
|
40,696
|
|
|
41,862
|
|
||
|
|
|
|
|
||||
Earnings per share:
|
|
|
|
|
||||
Basic
|
|
$
|
0.83
|
|
|
$
|
0.78
|
|
Diluted
|
|
$
|
0.80
|
|
|
$
|
0.75
|
|
|
|
|
|
|
||||
Anti-dilutive stock options excluded from diluted earnings per share computations
|
|
65
|
|
|
85
|
|
Level 1
|
Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.
|
Level 2
|
Inputs to the valuation methodology include:
|
•
|
quoted prices for similar assets or liabilities in active markets;
|
•
|
quoted prices for identical or similar assets or liabilities in inactive markets;
|
•
|
inputs other than quoted prices that are observable for the asset or liability; or
|
•
|
inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
Level 3
|
Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
|
|
Fair Value at March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Level 2
|
|
|
|
|
||||
Unrealized gains on interest rate swaps
|
|
$
|
1,785
|
|
|
$
|
2,451
|
|
|
|
|
|
|
||||
Level 3
|
|
|
|
|
||||
Contingent consideration liabilities
|
|
$
|
833
|
|
|
$
|
1,617
|
|
Derivative
|
|
Amendment Date
|
|
Notional
Amount
(in millions)
|
|
Fixed
Interest
Rate
|
Interest rate swap 1
|
|
October 1, 2015
|
|
$75.0
|
|
2.273%
|
Interest rate swap 2
|
|
October 1, 2015
|
|
$25.0
|
|
2.111%
|
Interest rate swap 3
|
|
October 1, 2015
|
|
$50.0
|
|
2.111%
|
Derivative
|
|
Inception Date
|
|
Notional
Amount (in millions) |
|
Fixed
Interest Rate |
Forward-starting interest rate swap
|
|
July 6, 2016
|
|
$150.0
|
|
1.1425%
|
|
|
March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Variable rate debt
|
|
|
|
|
||||
Short-term borrowings
|
|
$
|
13,714
|
|
|
$
|
12,263
|
|
Current portion of long-term debt:
|
|
|
|
|
||||
Australian credit facility
|
|
8,020
|
|
|
8,523
|
|
||
Short-term borrowings and current portion of long-term debt
|
|
21,734
|
|
|
20,786
|
|
||
|
|
|
|
|
||||
Long-term portion:
|
|
|
|
|
||||
Revolving credit facility
|
|
503,073
|
|
|
388,762
|
|
||
Receivables securitization facility
|
|
175,100
|
|
|
160,000
|
|
||
Less: financing costs, net
|
|
930
|
|
|
1,438
|
|
||
Long-term debt, net
|
|
677,243
|
|
|
547,324
|
|
||
Total debt
|
|
$
|
698,977
|
|
|
$
|
568,110
|
|
|
|
Three Months Ended
|
||||
|
|
March 31,
|
||||
|
|
2019
|
|
2018
|
||
Net sales
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
|
70.8
|
|
|
71.7
|
|
Gross profit
|
|
29.2
|
|
|
28.3
|
|
Operating expenses
|
|
22.8
|
|
|
22.6
|
|
Operating income
|
|
6.4
|
|
|
5.7
|
|
Interest and other non-operating expenses, net
|
|
1.1
|
|
|
0.6
|
|
Income before income taxes and equity earnings
|
|
5.3
|
%
|
|
5.1
|
%
|
Acquired
|
|
Acquisition
Date
|
|
Net
Sales Centers
Acquired
|
|
Periods
Excluded
|
W.W. Adcock, Inc.
(1)
|
|
January 2019
|
|
4
|
|
January - March 2019
|
Turf & Garden, Inc.
(1)
|
|
November 2018
|
|
4
|
|
January - March 2019
|
Tore Pty. Ltd. (Pool Power)
(1)
|
|
January 2018
|
|
1
|
|
January - March 2019 and
January - March 2018 |
Chem Quip, Inc.
(1)
|
|
December 2017
|
|
5
|
|
January - March 2019 and
January - March 2018
|
Intermark
|
|
December 2017
|
|
1
|
|
January - February 2019 and
January - February 2018
|
(1)
|
We acquired certain distribution assets of each of these companies.
|
December 31, 2018
|
364
|
|
Acquired locations
|
4
|
|
New locations, existing markets
|
2
|
|
Consolidated location
|
(1
|
)
|
March 31, 2019
|
369
|
|
|
|
Three Months Ended
|
|
|
||||||||||
|
|
March 31,
|
|
|
||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
Change
|
||||||||
Net sales
|
|
$
|
597.5
|
|
|
$
|
585.9
|
|
|
$
|
11.6
|
|
|
2%
|
•
|
inflationary product cost increases (estimated at approximately 2% above our historical average of 1% to 2%);
|
•
|
strong demand for discretionary products, as evidenced by improvements in sales growth rates for product offerings such as building materials (see discussion below);
|
•
|
acquisitions; and
|
•
|
market share gains, particularly in building materials and commercial products (see discussion below).
|
|
|
Three Months Ended
|
|
|
||||||||||
|
|
March 31,
|
|
|
||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
Change
|
||||||||
Gross profit
|
|
$
|
174.6
|
|
|
$
|
166.1
|
|
|
$
|
8.5
|
|
|
5%
|
Gross margin
|
|
29.2
|
%
|
|
28.3
|
%
|
|
|
|
|
|
|
Three Months Ended
|
|
|
||||||||||
|
|
March 31,
|
|
|
||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
Change
|
||||||||
Operating expenses
|
|
$
|
136.2
|
|
|
$
|
132.5
|
|
|
$
|
3.7
|
|
|
3%
|
Operating expenses as a % of net sales
|
|
22.8
|
%
|
|
22.6
|
%
|
|
|
|
|
(Unaudited)
|
|
QUARTER
|
||||||||||||||||||||||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||||||||||
|
|
First
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
|
Second
|
||||||||||||||||
Statement of Income Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net sales
|
|
$
|
597,456
|
|
|
$
|
543,082
|
|
|
$
|
811,311
|
|
|
$
|
1,057,804
|
|
|
$
|
585,900
|
|
|
$
|
510,183
|
|
|
$
|
743,401
|
|
|
$
|
988,163
|
|
Gross profit
|
|
174,631
|
|
|
160,442
|
|
|
235,003
|
|
|
308,655
|
|
|
166,073
|
|
|
145,398
|
|
|
216,606
|
|
|
289,664
|
|
||||||||
Operating income
|
|
38,386
|
|
|
25,970
|
|
|
92,337
|
|
|
162,042
|
|
|
33,541
|
|
|
17,259
|
|
|
81,928
|
|
|
154,186
|
|
||||||||
Net income
|
|
32,637
|
|
|
16,811
|
|
|
69,261
|
|
|
117,049
|
|
|
31,339
|
|
|
25,665
|
|
|
48,783
|
|
|
94,620
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total receivables, net
|
|
$
|
313,127
|
|
|
$
|
207,801
|
|
|
$
|
287,773
|
|
|
$
|
404,415
|
|
|
$
|
314,596
|
|
|
$
|
196,265
|
|
|
$
|
262,796
|
|
|
$
|
370,285
|
|
Product inventories, net
|
|
815,742
|
|
|
672,579
|
|
|
609,983
|
|
|
606,583
|
|
|
703,793
|
|
|
536,474
|
|
|
484,287
|
|
|
542,805
|
|
||||||||
Accounts payable
|
|
472,487
|
|
|
237,835
|
|
|
204,706
|
|
|
300,232
|
|
|
467,795
|
|
|
245,249
|
|
|
209,062
|
|
|
273,309
|
|
||||||||
Total debt
|
|
698,977
|
|
|
666,761
|
|
|
580,703
|
|
|
657,120
|
|
|
568,110
|
|
|
519,650
|
|
|
564,573
|
|
|
553,480
|
|
Weather
|
|
Possible Effects
|
Hot and dry
|
•
|
Increased purchases of chemicals and supplies
for existing swimming pools
|
|
•
|
Increased purchases of above-ground pools and
irrigation products
|
Unseasonably cool weather or extraordinary amounts of rain
|
•
|
Fewer pool and irrigation and landscape installations
|
|
•
|
Decreased purchases of chemicals and supplies
|
|
•
|
Decreased purchases of impulse items such as
above-ground pools and accessories
|
Unseasonably early warming trends in spring/late cooling trends in fall
|
•
|
A longer pool and landscape season, thus positively impacting our sales
|
(primarily in the northern half of the U.S. and Canada)
|
|
|
Unseasonably late warming trends in spring/early cooling trends in fall
|
•
|
A shorter pool and landscape season, thus negatively impacting our sales
|
(primarily in the northern half of the U.S. and Canada)
|
|
|
•
|
cash flows generated from operating activities;
|
•
|
the adequacy of available bank lines of credit;
|
•
|
the quality of our receivables;
|
•
|
acquisitions;
|
•
|
dividend payments;
|
•
|
capital expenditures;
|
•
|
changes in income tax laws and regulations;
|
•
|
the timing and extent of share repurchases; and
|
•
|
the ability to attract long-term capital with satisfactory terms.
|
•
|
capital expenditures primarily for maintenance and growth of our sales center structure, technology-related investments and fleet vehicles;
|
•
|
strategic acquisitions executed opportunistically;
|
•
|
payment of cash dividends as and when declared by our Board of Directors (Board);
|
•
|
repayment of debt to maintain an average total leverage ratio (as defined below) between 1.5 and 2.0; and
|
•
|
repurchases of our common stock under our Board-authorized share repurchase program.
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Operating activities
|
|
$
|
28,804
|
|
|
$
|
(44,149
|
)
|
Investing activities
|
|
(16,109
|
)
|
|
(15,217
|
)
|
||
Financing activities
|
|
(2,050
|
)
|
|
38,205
|
|
•
|
Maximum Average Total Leverage Ratio
. On the last day of each fiscal quarter, our average total leverage ratio must be less than 3.25 to 1.00. Average Total Leverage Ratio is the ratio of the trailing twelve months (TTM) Average Total Funded Indebtedness plus the TTM Average Accounts Securitization Proceeds divided by the TTM EBITDA (as those terms are defined in the Credit Facility). As of
March 31, 2019
, our average total leverage ratio equaled
1.80
(compared to
1.72
as of December 31, 2018) and the TTM average total debt amount used in this calculation was
$646.7 million
.
|
•
|
Minimum Fixed Charge Coverage Ratio
. On the last day of each fiscal quarter, our fixed charge ratio must be greater than or equal to 2.25 to 1.00. Fixed Charge Ratio is the ratio of the TTM EBITDAR divided by TTM Interest Expense paid or payable in cash plus TTM Rental Expense (as those terms are defined in the Credit Facility). As of
March 31, 2019
, our fixed charge ratio equaled
5.17
(compared to
5.33
as of December 31, 2018) and TTM Rental Expense was
$57.8 million
.
|
•
|
those that require the use of assumptions about matters that are inherently and highly uncertain at the time the estimates are made; and
|
•
|
those for which changes in the estimates or assumptions, or the use of different estimates and assumptions, could have a material impact on our consolidated results of operations or financial condition.
|
Period
|
|
Total Number
of Shares
Purchased
(1)
|
|
Average Price
Paid per Share
|
|
Total Number of
Shares Purchased as Part of Publicly
Announced Plan
(2)
|
|
Maximum Approximate
Dollar Value of Shares That May Yet be Purchased
Under the Plan
(3)
|
||||||
January 1 - 31, 2019
|
|
116,946
|
|
|
$
|
147.77
|
|
|
116,946
|
|
|
$
|
52,498,367
|
|
February 1 - 28, 2019
|
|
28,513
|
|
|
$
|
152.25
|
|
|
22,019
|
|
|
$
|
49,200,474
|
|
March 1 - 31, 2019
|
|
9,401
|
|
|
$
|
156.98
|
|
|
—
|
|
|
$
|
49,200,474
|
|
Total
|
|
154,860
|
|
|
$
|
149.15
|
|
|
138,965
|
|
|
|
(1)
|
These shares may include shares of our common stock surrendered to us by employees in order to satisfy minimum tax withholding obligations in connection with certain exercises of employee stock options or lapses upon vesting of restrictions on previously restricted share awards, and/or to cover the exercise price of such options granted under our share-based compensation plans. There were
15,895
shares surrendered for this purpose in the
first
quarter of
2019
.
|
(2)
|
In
May 2018
, our Board authorized an additional
$200.0 million
under our share repurchase program for the repurchase of shares of our common stock in the open market at prevailing market prices or in privately negotiated transactions.
|
(3)
|
As of
April 25, 2019
,
$49.2 million
of the authorized amount remained available under our current share repurchase program.
|
|
|
|
|
|
|
Incorporated by Reference
|
||||
No.
|
|
Description
|
|
Filed/ Furnished with this
Form 10-Q
|
|
Form
|
|
File No.
|
|
Date Filed
|
|
Restated Certificate of Incorporation of the Company.
|
|
|
|
10-Q
|
|
000-26640
|
|
8/9/2006
|
|
|
Amended and Restated Bylaws of the Company.
|
|
|
|
8-K
|
|
000-26640
|
|
2/8/2019
|
|
|
Form of certificate representing shares of common stock of the Company.
|
|
|
|
8-K
|
|
000-26640
|
|
5/19/2006
|
|
|
Certification by Mark W. Joslin pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
X
|
|
|
|
|
|
|
|
|
Certification by Peter D. Arvan pursuant to Rule 13a-14(a) and 15d‑14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
X
|
|
|
|
|
|
|
|
|
Certification by Peter D.Arvan and Mark W. Joslin furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
X
|
|
|
|
|
|
|
|
101.INS
|
+
|
XBRL Instance Document
|
|
X
|
|
|
|
|
|
|
101.SCH
|
+
|
XBRL Taxonomy Extension Schema Document
|
|
X
|
|
|
|
|
|
|
101.CAL
|
+
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
X
|
|
|
|
|
|
|
101.DEF
|
+
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
X
|
|
|
|
|
|
|
101.LAB
|
+
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
X
|
|
|
|
|
|
|
101.PRE
|
+
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
X
|
|
|
|
|
|
|
1.
|
Consolidated Statements of Income for the
three
months ended
March 31, 2019
and
March 31, 2018
;
|
2.
|
Consolidated Statements of Comprehensive Income for the
three
months ended
March 31, 2019
and
March 31, 2018
;
|
3.
|
Consolidated Balance Sheets at
March 31, 2019
,
December 31, 2018
and
March 31, 2018
;
|
4.
|
Condensed Consolidated Statements of Cash Flows for the
three
months ended
March 31, 2019
and
|
5.
|
Consolidated Statements of Changes in Stockholders’ Equity for the
three
months ended
March 31, 2019
and
|
6.
|
Notes to Consolidated Financial Statements.
|
|
|
POOL CORPORATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Mark W. Joslin
|
|
|
Mark W. Joslin
|
|
|
Senior Vice President and Chief Financial Officer, and duly authorized signatory on behalf of the registrant
|
1 Year Pool Chart |
1 Month Pool Chart |
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