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
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(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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||||||||||||
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2014
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2013
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2014
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2013
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Net sales
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$
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615,536
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$
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578,157
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$
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1,870,120
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$
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1,738,911
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Cost of sales
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439,292
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415,600
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1,332,800
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1,243,427
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Gross profit
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176,244
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162,557
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537,320
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495,484
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Selling and administrative expenses
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117,787
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109,182
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347,718
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323,184
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Operating income
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58,457
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53,375
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189,602
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172,300
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Interest expense, net
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1,864
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1,544
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5,691
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5,239
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Income before income taxes and equity earnings (loss)
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56,593
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51,831
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183,911
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167,061
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Provision for income taxes
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21,711
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19,496
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71,111
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64,808
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Equity earnings (loss) in unconsolidated investments
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76
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(3
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)
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209
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52
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Net income
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34,958
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32,332
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113,009
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102,305
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Less: net income attributable to noncontrolling interest
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(122
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)
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—
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(122
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)
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—
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Net income attributable to Pool Corporation
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$
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34,836
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$
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32,332
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$
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112,887
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$
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102,305
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Earnings per share:
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Basic
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$
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0.80
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$
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0.70
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$
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2.53
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$
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2.20
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Diluted
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$
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0.78
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$
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0.68
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$
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2.47
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$
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2.14
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Weighted average shares outstanding:
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Basic
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43,756
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46,380
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44,563
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46,475
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Diluted
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44,864
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47,598
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45,730
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47,720
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Cash dividends declared per common share
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$
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0.22
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$
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0.19
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$
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0.63
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$
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0.54
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Three Months Ended
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Nine Months Ended
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||||||||||||
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September 30,
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September 30,
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||||||||||||
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2014
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2013
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2014
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2013
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Net income
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$
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34,958
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$
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32,332
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$
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113,009
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$
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102,305
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Other comprehensive income (loss):
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Foreign currency translation adjustments
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(2,216
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)
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(128
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)
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(2,671
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)
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(361
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)
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Change in unrealized gains and losses on interest rate swaps,
net of tax of $(399), $187, $(260) and $(582)
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625
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(291
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)
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407
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913
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Total other comprehensive income (loss)
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(1,591
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)
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(419
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)
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(2,264
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)
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552
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Comprehensive income
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33,367
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31,913
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110,745
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102,857
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Less: comprehensive income attributable to noncontrolling interest
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(13
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—
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(13
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—
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Comprehensive income attributable to Pool Corporation
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$
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33,354
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$
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31,913
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$
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110,732
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$
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102,857
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September 30,
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September 30,
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December 31,
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||||||
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2014
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2013
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2013
(1)
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(Unaudited)
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(Unaudited)
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Assets
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Current assets:
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Cash and cash equivalents
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$
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14,455
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$
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24,222
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$
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8,006
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Receivables, net
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69,847
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180,898
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45,138
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Receivables pledged under receivables facility
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137,318
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—
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80,149
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Product inventories, net
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414,331
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365,596
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429,197
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Prepaid expenses and other current assets
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10,561
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9,474
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9,802
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Deferred income taxes
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5,378
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3,742
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5,457
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Total current assets
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651,890
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583,932
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577,749
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Property and equipment, net
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57,260
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51,537
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52,328
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Goodwill
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174,607
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169,983
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171,974
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Other intangible assets, net
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12,433
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10,390
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10,196
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Equity interest investments
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1,289
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1,112
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1,243
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Other assets, net
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11,757
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9,920
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10,271
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Total assets
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$
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909,236
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$
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826,874
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$
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823,761
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Liabilities, redeemable noncontrolling interest and stockholders’ equity
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Current liabilities:
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Accounts payable
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$
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154,511
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$
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142,777
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$
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214,596
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Accrued expenses and other current liabilities
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75,222
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64,737
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49,301
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Current portion of long-term debt and other long-term liabilities
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2,618
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15
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9
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Total current liabilities
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232,351
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207,529
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263,906
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Deferred income taxes
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19,934
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15,463
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19,108
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Long-term debt
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391,120
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260,432
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246,418
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Other long-term liabilities
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10,027
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7,619
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8,147
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Total liabilities
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653,432
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491,043
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537,579
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Redeemable noncontrolling interest
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3,144
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—
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—
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Stockholders’ equity:
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Common stock, $0.001 par value; 100,000,000 shares authorized;
43,352,818, 46,068,927 and 45,378,785 shares issued and
outstanding at September 30, 2014, September 30, 2013 and
December 31, 2013, respectively
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43
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46
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45
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Additional paid-in capital
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329,588
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305,831
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310,503
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Retained (deficit) earnings
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(77,619
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)
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29,536
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(27,278
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)
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Accumulated other comprehensive income
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|
648
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418
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2,912
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Total stockholders’ equity
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252,660
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335,831
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|
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286,182
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Total liabilities, redeemable noncontrolling interest and stockholders’ equity
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$
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909,236
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$
|
826,874
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$
|
823,761
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Nine Months Ended
|
||||||
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September 30,
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||||||
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2014
|
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2013
|
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Operating activities
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|
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Net income
|
|
$
|
113,009
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|
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$
|
102,305
|
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Adjustments to reconcile net income to net cash provided by operating activities:
|
|
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|
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Depreciation
|
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10,749
|
|
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9,716
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Amortization
|
|
1,075
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|
922
|
|
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Share-based compensation
|
|
6,854
|
|
|
6,090
|
|
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Excess tax benefits from share-based compensation
|
|
(4,141
|
)
|
|
(4,367
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)
|
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Equity earnings in unconsolidated investments
|
|
(209
|
)
|
|
(52
|
)
|
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Other
|
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(727
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)
|
|
(194
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)
|
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Changes in operating assets and liabilities, net of effects of acquisitions:
|
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||||
Receivables
|
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(79,891
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)
|
|
(65,638
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)
|
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Product inventories
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19,262
|
|
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34,709
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|
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Prepaid expenses and other assets
|
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(1,212
|
)
|
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1,063
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Accounts payable
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(61,544
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)
|
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(57,641
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)
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Accrued expenses and other current liabilities
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33,995
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26,933
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Net cash provided by operating activities
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37,220
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53,846
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Investing activities
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Acquisition of businesses, net of cash acquired
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(9,381
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)
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(1,244
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)
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Purchase of property and equipment, net of sale proceeds
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(14,687
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)
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(14,407
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)
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Other investments, net
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133
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|
|
76
|
|
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Net cash used in investing activities
|
|
(23,935
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)
|
|
(15,575
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)
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Financing activities
|
|
|
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|
||||
Proceeds from revolving line of credit
|
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658,720
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|
|
596,642
|
|
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Payments on revolving line of credit
|
|
(542,018
|
)
|
|
(567,092
|
)
|
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Proceeds from asset-backed financing
|
|
121,600
|
|
|
—
|
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Payments on asset-backed financing
|
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(93,600
|
)
|
|
—
|
|
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Proceeds from long-term debt and other long-term liabilities
|
|
1,621
|
|
|
—
|
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Payments on long-term debt and other long-term liabilities
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|
—
|
|
|
(10
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)
|
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Payments of deferred financing costs
|
|
(7
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)
|
|
(754
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)
|
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Excess tax benefits from share-based compensation
|
|
4,141
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|
|
4,367
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|
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Proceeds from stock issued under share-based compensation plans
|
|
8,090
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|
|
19,040
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Payments of cash dividends
|
|
(28,075
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)
|
|
(25,120
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)
|
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Purchases of treasury stock
|
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(135,155
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)
|
|
(53,027
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)
|
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Net cash used in financing activities
|
|
(4,683
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)
|
|
(25,954
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)
|
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Effect of exchange rate changes on cash and cash equivalents
|
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(2,153
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)
|
|
(558
|
)
|
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Change in cash and cash equivalents
|
|
6,449
|
|
|
11,759
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|
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Cash and cash equivalents at beginning of period
|
|
8,006
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|
|
12,463
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|
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Cash and cash equivalents at end of period
|
|
$
|
14,455
|
|
|
$
|
24,222
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net income
|
|
$
|
34,958
|
|
|
$
|
32,332
|
|
|
$
|
113,009
|
|
|
$
|
102,305
|
|
Less: net income attributable to noncontrolling interest
|
|
(122
|
)
|
|
—
|
|
|
(122
|
)
|
|
—
|
|
||||
Net income attributable to Pool Corporation
|
|
$
|
34,836
|
|
|
$
|
32,332
|
|
|
$
|
112,887
|
|
|
$
|
102,305
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
43,756
|
|
|
46,380
|
|
|
44,563
|
|
|
46,475
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||||||
Stock options and employee stock purchase plan
|
|
1,108
|
|
|
1,218
|
|
|
1,167
|
|
|
1,245
|
|
||||
Diluted
|
|
44,864
|
|
|
47,598
|
|
|
45,730
|
|
|
47,720
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.80
|
|
|
$
|
0.70
|
|
|
$
|
2.53
|
|
|
$
|
2.20
|
|
Diluted
|
|
$
|
0.78
|
|
|
$
|
0.68
|
|
|
$
|
2.47
|
|
|
$
|
2.14
|
|
|
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive stock options excluded from diluted earnings per share computations
|
|
169
|
|
|
—
|
|
|
169
|
|
|
—
|
|
Derivative
|
|
Effective Date
|
|
Notional
Amount
(in millions)
|
|
Fixed
Interest
Rate
|
Interest rate swap 1
|
|
November 21, 2011
|
|
$25.0
|
|
1.185%
|
Interest rate swap 2
|
|
November 21, 2011
|
|
$25.0
|
|
1.185%
|
Interest rate swap 3
|
|
December 21, 2011
|
|
$50.0
|
|
1.100%
|
Interest rate swap 4
|
|
January 17, 2012
|
|
$25.0
|
|
1.050%
|
Interest rate swap 5
|
|
January 19, 2012
|
|
$25.0
|
|
0.990%
|
Derivative
|
|
Inception Date
|
|
Notional
Amount
(in millions)
|
|
Fixed
Interest
Rate
|
Forward-starting interest rate swap 1
|
|
May 8, 2014
|
|
$25.0
|
|
2.520%
|
Forward-starting interest rate swap 2
|
|
May 14, 2014
|
|
$50.0
|
|
2.450%
|
Forward-starting interest rate swap 3
|
|
May 19, 2014
|
|
$50.0
|
|
2.339%
|
Forward-starting interest rate swap 4
|
|
May 28, 2014
|
|
$25.0
|
|
2.256%
|
|
|
Fair Value at
|
||||||
|
|
September 30,
|
||||||
Level 2
|
|
2014
|
|
2013
|
||||
Unrealized Gains on Interest Rate Swaps
|
|
$
|
196
|
|
|
$
|
—
|
|
Unrealized Losses on Interest Rate Swaps
|
|
$
|
(1,239
|
)
|
|
$
|
(1,909
|
)
|
|
|
September 30,
|
||||||
|
|
2014
|
|
2013
|
||||
Variable rate debt
|
|
|
|
|
||||
Current portion:
|
|
|
|
|
||||
Australian Seasonal Credit Facility
|
|
$
|
2,618
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Long-term portion:
|
|
|
|
|
||||
Revolving Credit Facility
|
|
311,120
|
|
|
260,432
|
|
||
Receivables Securitization Facility
|
|
80,000
|
|
|
—
|
|
||
Total debt
|
|
$
|
393,738
|
|
|
$
|
260,432
|
|
|
September 30, 2014
|
||
Redeemable noncontrolling interest, beginning of period
|
$
|
—
|
|
Acquisition date value of noncontrolling interest
|
3,131
|
|
|
Net income attributable to noncontrolling interest
|
122
|
|
|
Other comprehensive loss attributable to noncontrolling interest
|
(109
|
)
|
|
Redeemable noncontrolling interest, end of period
|
$
|
3,144
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
|
September 30,
|
|
September 30,
|
||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||
Net sales
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
|
71.4
|
|
|
71.9
|
|
|
71.3
|
|
|
71.5
|
|
Gross profit
|
|
28.6
|
|
|
28.1
|
|
|
28.7
|
|
|
28.5
|
|
Operating expenses
|
|
19.1
|
|
|
18.9
|
|
|
18.6
|
|
|
18.6
|
|
Operating income
|
|
9.5
|
|
|
9.2
|
|
|
10.1
|
|
|
9.9
|
|
Interest expense, net
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
Income before income taxes and equity earnings (loss)
|
|
9.2
|
%
|
|
9.0
|
%
|
|
9.8
|
%
|
|
9.6
|
%
|
(Unaudited)
|
|
Base Business
|
|
Excluded
|
|
Total
|
||||||||||||||||||
(in thousands)
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||||||||
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||||||
Net sales
|
|
$
|
607,469
|
|
|
$
|
577,731
|
|
|
$
|
8,067
|
|
|
$
|
426
|
|
|
$
|
615,536
|
|
|
$
|
578,157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross profit
|
|
173,461
|
|
|
162,440
|
|
|
2,783
|
|
|
117
|
|
|
176,244
|
|
|
162,557
|
|
||||||
Gross margin
|
|
28.6
|
%
|
|
28.1
|
%
|
|
34.5
|
%
|
|
27.5
|
%
|
|
28.6
|
%
|
|
28.1
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating expenses
|
|
115,175
|
|
|
109,019
|
|
|
2,612
|
|
|
163
|
|
|
117,787
|
|
|
109,182
|
|
||||||
Expenses as a % of net sales
|
|
19.0
|
%
|
|
18.9
|
%
|
|
32.4
|
%
|
|
38.3
|
%
|
|
19.1
|
%
|
|
18.9
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income (loss)
|
|
58,286
|
|
|
53,421
|
|
|
171
|
|
|
(46
|
)
|
|
58,457
|
|
|
53,375
|
|
||||||
Operating margin
|
|
9.6
|
%
|
|
9.2
|
%
|
|
2.1
|
%
|
|
(10.8
|
)%
|
|
9.5
|
%
|
|
9.2
|
%
|
Acquired
|
|
Acquisition
Date
|
|
Net
Sales Centers
Acquired
|
|
Periods
Excluded
|
Pool Systems Pty. Ltd.
|
|
July 2014
|
|
3
|
|
August - September 2014
|
DFW Stone Supply, LLC
(1)
|
|
March 2014
|
|
2
|
|
July - September 2014
|
Atlantic Chemical & Aquatics Inc.
(1)
|
|
February 2014
|
|
2
|
|
July - September 2014
|
B. Shapiro Supply, LLC
(1)
|
|
May 2013
|
|
1
|
|
July 2014 and July 2013
|
(1)
|
We acquired certain distribution assets of each of these companies.
|
December 31, 2013
|
321
|
|
Acquired locations
|
7
|
|
New locations
|
2
|
|
Consolidated locations
|
(1
|
)
|
September 30, 2014
|
329
|
|
|
|
Three Months Ended
|
|
|
||||||||||
|
|
September 30,
|
|
|
||||||||||
(in millions)
|
|
2014
|
|
2013
|
|
Change
|
||||||||
Net sales
|
|
$
|
615.5
|
|
|
$
|
578.2
|
|
|
$
|
37.3
|
|
|
6%
|
•
|
continued improvement in consumer discretionary expenditures, including some market recovery in remodeling and replacement activity, as evidenced by sales growth rates for product offerings such as building materials and equipment (see discussion below);
|
•
|
market share gains attributed to continued improvements in customer service levels and strong execution in our largest year-round markets, which generated sales growth of 8% during the quarter;
|
•
|
lower seasonal market sales growth of 3%, a consequence of cooler temperatures and lower than normal pool use, thus less need for pool maintenance and repair products during the third quarter; and
|
•
|
inflationary (estimated at approximately 1%) product cost increases.
|
|
|
Three Months Ended
|
|
|
||||||||||
|
|
September 30,
|
|
|
||||||||||
(in millions)
|
|
2014
|
|
2013
|
|
Change
|
||||||||
Gross profit
|
|
$
|
176.2
|
|
|
$
|
162.6
|
|
|
$
|
13.6
|
|
|
8%
|
Gross margin
|
|
28.6
|
%
|
|
28.1
|
%
|
|
|
|
|
|
|
Three Months Ended
|
|
|
||||||||||
|
|
September 30,
|
|
|
||||||||||
(in millions)
|
|
2014
|
|
2013
|
|
Change
|
||||||||
Operating expenses
|
|
$
|
117.8
|
|
|
$
|
109.2
|
|
|
$
|
8.6
|
|
|
8%
|
Operating expenses as a % of net sales
|
|
19.1
|
%
|
|
18.9
|
%
|
|
|
|
|
Acquired
|
|
Acquisition
Date
|
|
Net
Sales Centers
Acquired
|
|
Periods
Excluded
|
Pool Systems Pty. Ltd.
|
|
July 2014
|
|
3
|
|
August - September 2014
|
DFW Stone Supply, LLC
(1)
|
|
March 2014
|
|
2
|
|
March - September 2014
|
Atlantic Chemical & Aquatics Inc.
(1)
|
|
February 2014
|
|
2
|
|
February - September 2014
|
B. Shapiro Supply, LLC
(1)
|
|
May 2013
|
|
1
|
|
January - July 2014 and
May - July 2013
|
Swimming Pool Supply Center, Inc.
(1)
|
|
March 2013
|
|
1
|
|
January - May 2014 and
March - May 2013
|
(1)
|
We acquired certain distribution assets of each of these companies.
|
|
|
Nine Months Ended
|
|
|
||||||||||
|
|
September 30,
|
|
|
||||||||||
(in millions)
|
|
2014
|
|
2013
|
|
Change
|
||||||||
Net sales
|
|
$
|
1,870.1
|
|
|
$
|
1,738.9
|
|
|
$
|
131.2
|
|
|
8%
|
•
|
continued improvement in consumer discretionary expenditures, including some market recovery in remodeling and replacement activity, as evidenced by sales growth rates for product offerings such as building materials and equipment (see discussion below);
|
•
|
market share gains attributed to continued improvements in customer service levels;
|
•
|
an increase in customer early buy purchases; and
|
•
|
inflationary (estimated at approximately 1%) product cost increases.
|
|
|
Nine Months Ended
|
|
|
||||||||||
|
|
September 30,
|
|
|
||||||||||
(in millions)
|
|
2014
|
|
2013
|
|
Change
|
||||||||
Gross profit
|
|
$
|
537.3
|
|
|
$
|
495.5
|
|
|
$
|
41.8
|
|
|
8%
|
Gross margin
|
|
28.7
|
%
|
|
28.5
|
%
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
||||||||||
|
|
September 30,
|
|
|
||||||||||
(in millions)
|
|
2014
|
|
2013
|
|
Change
|
||||||||
Operating expenses
|
|
$
|
347.7
|
|
|
$
|
323.2
|
|
|
$
|
24.5
|
|
|
8%
|
Operating expenses as a % of net sales
|
|
18.6
|
%
|
|
18.6
|
%
|
|
|
|
|
•
|
additional performance-based incentive compensation expense recorded in 2014 due to comparatively better results versus performance targets this year compared to last;
|
•
|
increased infrastructure investments such as additional personnel and expenses related to equipment and technology to support sales growth;
|
•
|
higher outside professional fees;
|
•
|
higher freight costs; and
|
•
|
increased costs due to the expansion in 2014 of our annual retail marketing event.
|
(Unaudited)
|
|
QUARTER
|
||||||||||||||||||||||||||||||
(in thousands)
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||||||||||||||||
|
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
||||||||||||||||
Statement of Income (Loss) Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net sales
|
|
$
|
615,536
|
|
|
$
|
848,240
|
|
|
$
|
406,344
|
|
|
$
|
340,789
|
|
|
$
|
578,157
|
|
|
$
|
790,392
|
|
|
$
|
370,362
|
|
|
$
|
306,818
|
|
Gross profit
|
|
176,244
|
|
|
246,976
|
|
|
114,100
|
|
|
95,793
|
|
|
162,557
|
|
|
228,166
|
|
|
104,761
|
|
|
88,938
|
|
||||||||
Operating income (loss)
|
|
58,457
|
|
|
122,499
|
|
|
8,646
|
|
|
(6,814
|
)
|
|
53,375
|
|
|
111,993
|
|
|
6,932
|
|
|
(10,297
|
)
|
||||||||
Net income (loss)
|
|
34,958
|
|
|
73,863
|
|
|
4,188
|
|
|
(4,975
|
)
|
|
32,332
|
|
|
66,533
|
|
|
3,440
|
|
|
(7,997
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total receivables, net
|
|
$
|
207,165
|
|
|
$
|
306,500
|
|
|
$
|
211,107
|
|
|
$
|
125,287
|
|
|
$
|
180,898
|
|
|
$
|
281,064
|
|
|
$
|
188,294
|
|
|
$
|
113,859
|
|
Product inventories, net
|
|
414,331
|
|
|
451,507
|
|
|
527,304
|
|
|
429,197
|
|
|
365,596
|
|
|
424,679
|
|
|
494,321
|
|
|
400,308
|
|
||||||||
Accounts payable
|
|
154,511
|
|
|
233,549
|
|
|
370,002
|
|
|
214,596
|
|
|
142,777
|
|
|
239,976
|
|
|
338,026
|
|
|
199,787
|
|
||||||||
Total debt
|
|
393,738
|
|
|
430,971
|
|
|
324,226
|
|
|
246,418
|
|
|
260,432
|
|
|
300,426
|
|
|
278,542
|
|
|
230,882
|
|
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 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;
|
•
|
acquisitions;
|
•
|
scheduled debt payments;
|
•
|
dividend payments;
|
•
|
capital expenditures;
|
•
|
the timing and extent of share repurchases; and
|
•
|
the ability to attract long-term capital with satisfactory terms.
|
•
|
maintenance and new sales center capital expenditures;
|
•
|
strategic acquisitions executed opportunistically;
|
•
|
payment of cash dividends as and when declared by our Board of Directors (Board); and
|
•
|
repayment of debt or repurchase of our common stock.
|
|
|
Nine Months Ended
|
||||||
|
|
September 30,
|
||||||
|
|
2014
|
|
2013
|
||||
Operating activities
|
|
$
|
37,220
|
|
|
$
|
53,846
|
|
Investing activities
|
|
(23,935
|
)
|
|
(15,575
|
)
|
||
Financing activities
|
|
(4,683
|
)
|
|
(25,954
|
)
|
•
|
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
September 30, 2014
, our average total leverage ratio equaled
1.60
(compared to
1.48
as of June 30, 2014) and the TTM average total debt amount used in this calculation was
$329.8 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
September 30, 2014
, our fixed charge ratio equaled
4.56
(compared to
4.51
as of June 30, 2014) and TTM Rental Expense was
$49.7 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 estimate 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)
|
||||||
July 1-31, 2014
|
|
180,000
|
|
|
$
|
56.50
|
|
|
180,000
|
|
|
$
|
102,069,630
|
|
August 1-31, 2014
|
|
378,200
|
|
|
$
|
55.17
|
|
|
378,200
|
|
|
$
|
81,202,656
|
|
September 1-30, 2014
|
|
276,500
|
|
|
$
|
55.60
|
|
|
276,500
|
|
|
$
|
65,830,214
|
|
Total
|
|
834,700
|
|
|
$
|
55.60
|
|
|
834,700
|
|
|
|
(1)
|
These shares may include shares of our common stock surrendered to us by employees in order to satisfy 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 no shares surrendered for this purpose in the
third
quarter of
2014
.
|
(2)
|
In
May 2014
, our Board authorized an additional
$100.0 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
October 24, 2014
,
$64.5 million
of the authorized amount remained available under our current share repurchase program.
|
|
|
POOL CORPORATION
|
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By:
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/s/ Mark W. Joslin
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Mark W. Joslin
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Vice President and Chief Financial Officer, and duly authorized signatory on behalf of the registrant
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Incorporated by Reference
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No.
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Description
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Filed with this
Form 10-Q
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Form
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File No.
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Date Filed
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3.1
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Restated Certificate of Incorporation of the Company.
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10-Q
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000-26640
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8/9/2006
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3.2
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Restated Composite Bylaws of the Company.
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8-K
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000-26640
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12/20/2012
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4.1
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Form of certificate representing shares of common stock of the Company.
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8-K
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000-26640
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5/19/2006
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Fifth Amendment to Credit Agreement, dated as of July 25, 2014, among Pool Corporation, as US Borrower, SCP Distributors Canada Inc., as Canadian Borrower, SCP Pool B.V., as Dutch Borrower, the Lenders and Wells Fargo Bank, National Association, as Administrative Agent
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X
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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.
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X
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Certification by Manuel J. Perez de la Mesa pursuant to Rule 13a-14(a) and 15d‑14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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X
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Certification by Manuel J. Perez de la Mesa and Mark W. Joslin pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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X
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101.INS
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+
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XBRL Instance Document
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X
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101.SCH
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+
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XBRL Taxonomy Extension Schema Document
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X
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101.CAL
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+
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XBRL Taxonomy Extension Calculation Linkbase Document
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X
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101.DEF
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+
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XBRL Taxonomy Extension Definition Linkbase Document
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X
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101.LAB
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+
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XBRL Taxonomy Extension Label Linkbase Document
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X
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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X
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1.
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Consolidated Statements of Income for the
three
and
nine
months ended
September 30, 2014
and
September 30, 2013
;
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2.
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Consolidated Statements of Comprehensive Income for the
three
and
nine
months ended
September 30, 2014
and
September 30, 2013
;
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3.
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Consolidated Balance Sheets at
September 30, 2014
,
December 31, 2013
and
September 30, 2013
;
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4.
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Condensed Consolidated Statements of Cash Flows for the
nine
months ended
September 30, 2014
and
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5.
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Notes to Consolidated Financial Statements.
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Re:
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Fifth Amendment to the Credit Agreement (this “
Amendment
”)
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BORROWERS
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POOL CORPORATION,
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By:
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/s/ Mark W. Joslin
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Name:
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Mark W. Joslin
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Title:
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Vice President and Chief Financial Officer
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By:
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/s/ Mark W. Joslin
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Name:
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Mark W. Joslin
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Title:
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Secretary and Treasurer
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By:
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/s/ Mark W. Joslin
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Name:
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Mark W. Joslin
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Title:
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Director
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GUARANTORS
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SCP DISTRIBUTORS LLC,
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By:
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/s/ Mark W. Joslin
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Name:
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Mark W. Joslin
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Title:
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Vice President and Chief Financial Officer
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By:
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/s/ Mark W. Joslin
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Name:
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Mark W. Joslin
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Title:
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Vice President and Secretary
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By:
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/s/ Melanie Housey
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Name:
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Melanie Housey
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Title:
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President and Secretary
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By:
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/s/ Melanie Housey
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Name:
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Melanie Housey
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Title:
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President and Secretary
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By:
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/s/ Mark W. Joslin
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Name:
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Mark W. Joslin
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Title:
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Vice President and Chief Financial Officer
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By:
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/s/ Mark W. Joslin
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Name:
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Mark W. Joslin
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Title:
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Vice President and Secretary
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By:
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/s/ Mark W. Joslin
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Name:
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Mark W. Joslin
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Title:
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Vice President and Secretary
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By:
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/s/ Mark W. Joslin
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Name:
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Mark W. Joslin
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Title:
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Vice President and Chief Financial Officer
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By:
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/s/ Mark W. Joslin
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Name:
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Mark W. Joslin
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Title:
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Vice President
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By:
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/s/ Mark W. Joslin
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Name:
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Mark W. Joslin
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Title:
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President and Treasurer
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By:
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/s/ Mark W. Joslin
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Name:
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Mark W. Joslin
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Title:
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President and Treasurer
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By:
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/s/ Mark W. Joslin
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Name:
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Mark W. Joslin
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Title:
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President
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AND LENDERS:
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WELLS FARGO BANK, NATIONAL ASSOCIATION,
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By:
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/s/ Irena Stavreska
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Name:
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Irena Stavreska
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Title:
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Vice President
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By:
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/s/ Brian Huddleston
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Name:
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Brian Huddleston
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Title:
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Vice President
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By:
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/s/ Pierre Bury
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Name:
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Pierre Bury
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Title:
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Director
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By:
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/s/ David E. Maheu
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Name:
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David E. Maheu
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Title:
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Vice President
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By:
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/s/ Jon C. Long
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Name:
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Jon C. Long
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Title:
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Vice President
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By:
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/s/ Robin J. Wallace, Jr.
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Name:
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Robin J. Wallace, Jr.
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Title:
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Officer
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By:
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/s/ Jorge E. Goris
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Name:
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Jorge Goris
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Title:
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Senior Vice President
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By:
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/s/ Elizabeth Willis
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Name:
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Elizabeth Willis
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Title:
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Vice President
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By:
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/s/ L. J. Perenyi
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Name:
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L. J. Perenyi
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Title:
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Vice President
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1.
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I have reviewed this quarterly report on Form 10-Q of Pool Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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Date:
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October 30, 2014
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/s/ Mark W. Joslin
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Mark W. Joslin
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Vice President and Chief Financial Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Pool Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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Date:
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October 30, 2014
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/s/ Manuel J. Perez de la Mesa
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Manuel J. Perez de la Mesa
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President and Chief Executive Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Manuel J. Perez de la Mesa
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Manuel J. Perez de la Mesa
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President and Chief Executive Officer
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/s/ Mark W. Joslin
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Mark W. Joslin
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Vice President and Chief Financial Officer
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