x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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36-3943363
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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|
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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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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.001 per share
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NASDAQ Global Select Market
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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
¨
(Do not check if a smaller reporting company)
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Smaller reporting company
¨
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Page
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PART I.
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV.
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Item 15.
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Item 16.
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•
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SCP Distributors (SCP);
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•
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Superior Pool Products (Superior);
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•
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Horizon Distributors (Horizon); and
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•
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National Pool Tile (NPT).
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•
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long-term growth in housing units in warmer markets due to the population migration toward the southern United States, which contributes to the growing installed base of pools that homeowners must maintain;
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•
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increased homeowner spending on outdoor living spaces for relaxation and entertainment;
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•
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consumers bundling the purchase of a swimming pool and other products, with new irrigation systems and landscaping often being key components to both pool installations and remodels; and
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•
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consumers using more automation and control products, higher quality materials and other pool features that add to our sales opportunities over time.
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•
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to promote the growth of our industry;
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•
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to promote the growth of our customers’ businesses; and
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•
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to continuously strive to operate more effectively.
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•
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swimming pool remodelers and builders;
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•
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specialty retailers that sell swimming pool supplies;
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•
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swimming pool repair and service businesses;
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•
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irrigation construction and landscape maintenance contractors; and
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•
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golf courses and other commercial customers.
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•
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maintenance products such as chemicals, supplies and pool accessories;
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•
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repair and replacement parts for pool equipment, such as cleaners, filters, heaters, pumps and lights;
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•
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packaged pool kits including walls, liners, braces and coping for in-ground and above-ground pools;
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•
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pool equipment and components for new pool construction and the remodeling of existing pools;
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•
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irrigation and landscape products, including irrigation system components and professional lawn care equipment and supplies;
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•
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building materials, such as concrete, plumbing and electrical components, both functional and decorative pool surfaces, decking materials, tile, hardscapes and natural stone, used for pool installations and remodeling;
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•
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commercial products, including ASME heaters, safety equipment, and commercial pumps and filters; and
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•
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other pool construction and recreational products, which consist of a number of product categories and include discretionary recreational and related outdoor lifestyle products that enhance consumers’ use and enjoyment of outdoor living spaces, such as spas, grills and components for outdoor kitchens.
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•
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maintenance and minor repair (non-discretionary); and
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•
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major refurbishment and replacement (partially discretionary).
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•
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to offer our customers a choice of distinctive product selections, locations and service personnel; and
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•
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to increase the level of customer service and operational efficiency provided by the sales centers in each network by promoting healthy competition between the two networks.
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•
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the breadth and availability of products offered;
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•
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the quality and level of customer service;
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•
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the breadth and depth of sales and marketing programs;
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•
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consistency and stability of business relationships with customers and suppliers;
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•
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competitive product pricing; and
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•
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access to commercial credit to finance business working capital.
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Year Ended December 31,
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||||||||||
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2016
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2015
|
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2014
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||||||
United States
|
|
$
|
2,354,726
|
|
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$
|
2,168,802
|
|
|
$
|
2,037,001
|
|
International
|
|
216,077
|
|
|
194,337
|
|
|
209,561
|
|
|||
|
|
$
|
2,570,803
|
|
|
$
|
2,363,139
|
|
|
$
|
2,246,562
|
|
|
|
December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
United States
|
|
$
|
79,064
|
|
|
$
|
65,885
|
|
|
$
|
51,027
|
|
International
|
|
4,226
|
|
|
3,969
|
|
|
5,448
|
|
|||
|
|
$
|
83,290
|
|
|
$
|
69,854
|
|
|
$
|
56,475
|
|
•
|
penetrate new markets;
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•
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generate sufficient cash flows to support expansion plans and general operating activities;
|
•
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obtain financing;
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•
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identify appropriate acquisition candidates;
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•
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maintain favorable supplier arrangements and relationships; and
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•
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identify and divest assets which do not continue to create value consistent with our objectives.
|
•
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difficulty in staffing international subsidiary operations;
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•
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different political and regulatory conditions;
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•
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currency fluctuations;
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•
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adverse tax consequences; and
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•
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dependence on other economies.
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Network
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12/31/15
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New
Locations
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Consolidated
Locations
(2)(3)
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Acquired
Locations
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12/31/16
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|||||
SCP
|
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161
|
|
|
2
|
|
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(1
|
)
|
|
—
|
|
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162
|
|
Superior
|
|
65
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
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65
|
|
Horizon
|
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60
|
|
|
—
|
|
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(2
|
)
|
|
8
|
|
|
66
|
|
NPT
(1)
|
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15
|
|
|
2
|
|
|
—
|
|
|
—
|
|
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17
|
|
Total Domestic
|
|
301
|
|
|
5
|
|
|
(4
|
)
|
|
8
|
|
|
310
|
|
SCP International
|
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35
|
|
|
1
|
|
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(2
|
)
|
|
—
|
|
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34
|
|
Total
|
|
336
|
|
|
6
|
|
|
(6
|
)
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|
8
|
|
|
344
|
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(1)
|
In 2014, we identified NPT as a separate network. In addition to the stand-alone NPT sales centers, there are over 80 SCP and Superior locations that have consumer showrooms and serve as stocking locations that feature NPT brand tile and composite finish products.
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(2)
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Consolidated sales centers are those locations where we expect to transfer the majority of the existing business to our nearby sales center locations.
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(3)
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We consolidated two of these locations near the end of
2016
. While these are not in our sales center count at year end, the sales for 2016 are included in our consolidated net sales for the year.
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Location
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SCP
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Superior
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Horizon
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NPT
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Total
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|||||
United States
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|||||
California
|
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25
|
|
|
21
|
|
|
17
|
|
|
6
|
|
|
69
|
|
Texas
|
|
20
|
|
|
5
|
|
|
17
|
|
|
5
|
|
|
47
|
|
Florida
|
|
33
|
|
|
6
|
|
|
4
|
|
|
1
|
|
|
44
|
|
Arizona
|
|
6
|
|
|
6
|
|
|
10
|
|
|
2
|
|
|
24
|
|
Georgia
|
|
6
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
9
|
|
Nevada
|
|
2
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
8
|
|
Tennessee
|
|
5
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
8
|
|
Washington
|
|
1
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
7
|
|
Alabama
|
|
4
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
6
|
|
New York
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
Louisiana
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
Missouri
|
|
3
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
5
|
|
New Jersey
|
|
3
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
5
|
|
Pennsylvania
|
|
3
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
5
|
|
Colorado
|
|
1
|
|
|
1
|
|
|
2
|
|
|
—
|
|
|
4
|
|
Illinois
|
|
3
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
4
|
|
Indiana
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
4
|
|
North Carolina
|
|
3
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
4
|
|
Ohio
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
4
|
|
Oregon
|
|
1
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
4
|
|
South Carolina
|
|
3
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
4
|
|
Virginia
|
|
2
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
4
|
|
Idaho
|
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
3
|
|
Oklahoma
|
|
2
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Arkansas
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Connecticut
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Kansas
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Maryland
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
Massachusetts
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Michigan
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Minnesota
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Mississippi
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Hawaii
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Iowa
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Kentucky
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Nebraska
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
New Mexico
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Puerto Rico
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Utah
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Wisconsin
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Total United States
|
|
162
|
|
|
65
|
|
|
66
|
|
|
17
|
|
|
310
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|||||
Canada
|
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
France
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
Australia
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
Mexico
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Portugal
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
United Kingdom
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Belgium
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Colombia
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Germany
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Italy
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Spain
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Total International
|
|
34
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
Total
|
|
196
|
|
|
65
|
|
|
66
|
|
|
17
|
|
|
344
|
|
|
|
High
|
|
Low
|
|
Dividends
Declared
|
||||||
Fiscal 2016
|
|
|
|
|
|
|
||||||
First Quarter
|
|
$
|
87.96
|
|
|
$
|
74.37
|
|
|
$
|
0.26
|
|
Second Quarter
|
|
94.03
|
|
|
86.68
|
|
|
0.31
|
|
|||
Third Quarter
|
|
102.51
|
|
|
93.02
|
|
|
0.31
|
|
|||
Fourth Quarter
|
|
107.49
|
|
|
90.59
|
|
|
0.31
|
|
|||
|
|
|
|
|
|
|
||||||
Fiscal 2015
|
|
|
|
|
|
|
||||||
First Quarter
|
|
$
|
70.43
|
|
|
$
|
62.21
|
|
|
$
|
0.22
|
|
Second Quarter
|
|
71.80
|
|
|
64.89
|
|
|
0.26
|
|
|||
Third Quarter
|
|
72.80
|
|
|
66.14
|
|
|
0.26
|
|
|||
Fourth Quarter
|
|
84.16
|
|
|
72.63
|
|
|
0.26
|
|
|
|
Base
Period
|
|
Indexed Returns
Years Ending
|
||||||||||||||||||||
Company / Index
|
|
12/31/11
|
|
12/31/12
|
|
12/31/13
|
|
12/31/14
|
|
12/31/15
|
|
12/31/16
|
||||||||||||
Pool Corporation
|
|
$
|
100.00
|
|
|
$
|
142.85
|
|
|
$
|
199.03
|
|
|
$
|
220.34
|
|
|
$
|
284.51
|
|
|
$
|
372.10
|
|
S&P MidCap 400 Index
|
|
100.00
|
|
|
117.88
|
|
|
157.37
|
|
|
172.74
|
|
|
168.98
|
|
|
204.03
|
|
||||||
NASDAQ Index
|
|
100.00
|
|
|
117.45
|
|
|
164.57
|
|
|
188.84
|
|
|
201.98
|
|
|
219.89
|
|
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)
|
||||||
October 1 – October 31, 2016
|
|
449,600
|
|
|
$
|
93.96
|
|
|
449,600
|
|
|
$
|
64,667,024
|
|
November 1 – November 30, 2016
|
|
196,400
|
|
|
$
|
92.12
|
|
|
196,400
|
|
|
$
|
46,574,308
|
|
December 1 – December 31, 2016
|
|
1,700
|
|
|
$
|
104.34
|
|
|
—
|
|
|
$
|
46,574,308
|
|
Total
|
|
647,700
|
|
|
$
|
93.43
|
|
|
646,000
|
|
|
|
|
(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 and/or the exercise price of such options granted under our share-based compensation plans. There were
1,700
shares surrendered for this purpose in the fourth quarter of
2016
.
|
(2)
|
In
February 2016
, our Board authorized an additional
$150.0 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)
|
In
2016
, we purchased a total of
$175.6 million
, or
2,028,517
shares, in the open market at an average price of
$86.56
per share. As of February 20, 2017, our total authorization remaining was
$46.6 million
.
|
(in thousands, except per share data)
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
(1)
|
||||||||||
Statement of Income Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
2,570,803
|
|
|
$
|
2,363,139
|
|
|
$
|
2,246,562
|
|
|
$
|
2,079,700
|
|
|
$
|
1,953,974
|
|
Operating income
|
|
255,859
|
|
|
216,222
|
|
|
188,870
|
|
|
165,486
|
|
|
144,869
|
|
|||||
Net income
|
|
148,603
|
|
|
128,224
|
|
|
111,030
|
|
|
97,330
|
|
|
81,972
|
|
|||||
Net income attributable to Pool Corporation
|
|
148,955
|
|
|
128,275
|
|
|
110,692
|
|
|
97,330
|
|
|
81,972
|
|
|||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
$
|
3.56
|
|
|
$
|
2.98
|
|
|
$
|
2.50
|
|
|
$
|
2.10
|
|
|
$
|
1.75
|
|
Diluted
|
|
$
|
3.47
|
|
|
$
|
2.90
|
|
|
$
|
2.44
|
|
|
$
|
2.05
|
|
|
$
|
1.71
|
|
Cash dividends declared per common share
|
|
$
|
1.19
|
|
|
$
|
1.00
|
|
|
$
|
0.85
|
|
|
$
|
0.73
|
|
|
$
|
0.62
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Working capital
|
|
$
|
399,337
|
|
|
$
|
356,899
|
|
|
$
|
345,305
|
|
|
$
|
313,843
|
|
|
$
|
295,100
|
|
Total assets
(2)
|
|
994,095
|
|
|
934,361
|
|
|
890,971
|
|
|
821,647
|
|
|
779,094
|
|
|||||
Total long-term debt, net, including current portion
(2)
|
|
438,042
|
|
|
328,045
|
|
|
318,872
|
|
|
244,304
|
|
|
229,400
|
|
|||||
Stockholders’ equity
|
|
205,210
|
|
|
255,743
|
|
|
244,352
|
|
|
286,182
|
|
|
281,623
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Base business sales growth
(3)
|
|
7
|
%
|
|
5
|
%
|
|
7
|
%
|
|
6
|
%
|
|
7
|
%
|
|||||
Number of sales centers
|
|
344
|
|
|
336
|
|
|
328
|
|
|
321
|
|
312
|
|
(1)
|
In 2012, operating income, net income attributable to Pool Corporation and earnings per share amounts were significantly impacted by a $6.9 million non-cash goodwill impairment charge related to our United Kingdom reporting unit. The impact of this impairment charge on earnings was $0.14 per diluted share.
|
(2)
|
Upon adoption of Accounting Standards Update 2015-03,
Interest - Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs
, we now include financing costs, net of accumulated amortization as a component of long-term debt. For comparability across all periods presented on our Consolidated Balance Sheets, we reclassified certain amounts from Other assets, net in prior periods to Long-term debt, net to conform to our 2016 presentation.
|
(3)
|
For a discussion regarding our calculation of base business sales, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - RESULTS OF OPERATIONS,” of this Form 10-K.
|
•
|
share repurchases in the open market of $175.6 million;
|
•
|
quarterly cash dividend payments to shareholders, totaling $
49.7 million
for the year;
|
•
|
net capital expenditures of
$34.4 million
; and
|
•
|
payments of $
19.7 million
for acquisitions.
|
•
|
We project base business sales growth of 5% to 7%, impacted by the following factors and assumptions:
|
◦
|
assumed normal weather patterns for
2017
, which contrasts with the favorable weather experienced in
2016
, particularly in the first and fourth quarters;
|
◦
|
anticipated continued growth from replacement, remodeling and construction activity;
|
◦
|
an overall decrease in customer early buy shipments for the full year, mostly impacting the first quarter of
2017
(projected to bring down sales by 2% to 4% compared to the first quarter of
2016
and shift those sales into the remainder of the year);
|
◦
|
one less selling day for the full year for
2017
compared to
2016
due to one less selling day in the third quarter of
2017
(neutral selling days for all other quarters); and
|
◦
|
inflationary product cost increases of approximately 1% to 2%.
|
•
|
We expect relatively neutral gross margin trends for the full year, as we believe our sales growth will continue to be weighted toward sales of lower margin discretionary products. Adverse margin impacts should be offset by benefits from our efforts in supply chain management and internal pricing initiatives.
|
•
|
We project operating expenses will grow at approximately half the rate of our gross profit growth, reflecting inflationary increases and incremental costs to support our sales growth expectations.
|
•
|
Excluding the impact from the adoption of new accounting standards, we expect our effective tax rate will be consistent with
2016
. Our effective tax rate is dependent upon our results of operations and may change if actual results are different from our current expectations, particularly any significant changes in our geographic mix. Upon adoption of Accounting Standards Update (ASU) 2016-09,
Improvements to Employee Share-Based Payment Accounting
, we expect our effective tax rate will fluctuate from quarter to quarter, particularly in periods when employees elect to exercise their vested stock options or when restrictions on share-based awards lapse. Based on our comparison of our deferred tax assets for share‑based compensation to the current intrinsic value of the underlying awards, we expect to recognize material income tax benefits in periods when these transactions occur. We recorded excess tax benefits of
$7.4 million
in stockholders’ equity in
2016
. However we expect the income tax benefit in
2017
will be higher based on the closing price of our common stock at December 31, 2016. The adoption of this guidance will also increase our diluted weighted average shares outstanding.
|
•
|
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.
|
•
|
aging statistics and trends;
|
•
|
customer payment history;
|
•
|
independent credit reports; and
|
•
|
discussions with customers.
|
Class 0
|
new products with less than 12 months usage (or 36 months for tile and 48 months for parts products)
|
|
|
Classes 1-4
|
highest sales value items, which represent approximately 80% of net sales at the sales center
|
|
|
Classes 5-12
|
lower sales value items, which we keep in stock to provide a high level of customer service
|
|
|
Class 13
|
products with no sales for the past 12 months at the local sales center level, excluding special order products not yet delivered to the customer
|
|
|
Null class
|
non-stock special order items
|
•
|
the level of inventory in relation to historical sales by product, including inventory usage by class based on product sales at both the sales center and on a company-wide basis;
|
•
|
changes in customer preferences or regulatory requirements;
|
•
|
seasonal fluctuations in inventory levels;
|
•
|
geographic location; and
|
•
|
superseded products and new product offerings.
|
•
|
differences between estimated and actual performance;
|
•
|
our projections related to achievement of multiple-year performance objectives for our SPIP; and
|
•
|
the discretionary components of the bonus plans.
|
•
|
Under the new standard, revenue will be recognized when we satisfy our performance obligation by transferring promised goods or services to our customer. The standard allows for application of the guidance to a portfolio of contracts or performance obligations with similar characteristics. Since our individual sales transactions are very similar in nature, we anticipate applying the guidance to all transactions as a portfolio. We expect that the effects of applying this guidance to the portfolio would not differ materially from applying the guidance to individual performance obligations within that portfolio.
|
•
|
Our revenue recognition will be achieved upon delivery of goods as there are no other promised services as part of our contracts with customers. Because shipping and handling activities are performed before the customer obtains control of the goods, we do not consider these activities to be a promised service to the customer. Rather shipping and handling are activities to fulfill our promise to transfer the goods. Product warranties do not constitute a performance obligation for us, as products are warrantied directly by the manufacturer.
|
•
|
To determine the amount of consideration which we expect to be entitled in exchange for transferring promised goods, we will consider if variable consideration exists. We will consider the terms of the contract and our customary business
|
•
|
The majority of our sales transactions do not require any additional performance obligation after delivery, therefore we do not have multiple performance obligations for which we will have to allocate the transaction price.
|
•
|
We expect to recognize revenue upon delivery to the customer as our performance obligation will be satisfied at that point in time.
|
|
|
Year Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Net sales
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
|
71.2
|
|
|
71.4
|
|
|
71.4
|
|
Gross profit
|
|
28.8
|
|
|
28.6
|
|
|
28.6
|
|
Operating expenses
|
|
18.9
|
|
|
19.4
|
|
|
20.2
|
|
Operating income
|
|
10.0
|
|
|
9.1
|
|
|
8.4
|
|
Interest and other non-operating expenses, net
|
|
0.6
|
|
|
0.3
|
|
|
0.3
|
|
Income before income taxes and equity earnings
|
|
9.4
|
%
|
|
8.8
|
%
|
|
8.1
|
%
|
Note: Due to rounding, percentages may not add to operating income or income before income taxes and equity earnings.
|
(Unaudited)
|
|
Base Business
|
|
Excluded
|
|
Total
|
||||||||||||||||||
(in thousands)
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
||||||||||||||||||
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||
Net sales
|
|
$
|
2,525,164
|
|
|
$
|
2,361,134
|
|
|
$
|
45,639
|
|
|
$
|
2,005
|
|
|
$
|
2,570,803
|
|
|
$
|
2,363,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross profit
|
|
727,469
|
|
|
675,262
|
|
|
13,618
|
|
|
382
|
|
|
741,087
|
|
|
675,644
|
|
||||||
Gross margin
|
|
28.8
|
%
|
|
28.6
|
%
|
|
29.8
|
%
|
|
19.1
|
%
|
|
28.8
|
%
|
|
28.6
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating expenses
|
|
475,048
|
|
|
458,599
|
|
|
10,180
|
|
|
823
|
|
|
485,228
|
|
|
459,422
|
|
||||||
Expenses as a % of net sales
|
|
18.8
|
%
|
|
19.4
|
%
|
|
22.3
|
%
|
|
41.0
|
%
|
|
18.9
|
%
|
|
19.4
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income (loss)
|
|
252,421
|
|
|
216,663
|
|
|
3,438
|
|
|
(441
|
)
|
|
255,859
|
|
|
216,222
|
|
||||||
Operating margin
|
|
10.0
|
%
|
|
9.2
|
%
|
|
7.5
|
%
|
|
(22.0
|
)%
|
|
10.0
|
%
|
|
9.1
|
%
|
Acquired
(1)
|
|
Acquisition
Date
|
|
Net
Sales Centers
Acquired
|
|
Periods
Excluded
|
Metro Irrigation Supply Company Ltd.
|
|
April 2016
|
|
8
|
|
April - December 2016
|
The Melton Corporation
|
|
November 2015
|
|
2
|
|
January - December 2016 and November - December 2015
|
Seaboard Industries, Inc.
|
|
October 2015
|
|
3
|
|
January - December 2016 and November - December 2015
|
Poolwerx Development LLC
|
|
April 2015
|
|
1
|
|
January - June 2016 and
April - June 2015
|
St. Louis Hardscape Material & Supply, LLC
|
|
December 2014
|
|
1
|
|
January - March 2016 and January - March 2015
|
(1)
|
We acquired certain distribution assets of each of these companies.
|
December 31, 2015
|
336
|
|
Acquired
|
8
|
|
New locations
|
6
|
|
Consolidated locations
|
(6
|
)
|
December 31, 2016
|
344
|
|
(in millions)
|
|
Year Ended December 31,
|
|
|
||||||||||
|
|
2016
|
|
2015
|
|
Change
|
||||||||
Net sales
|
|
$
|
2,570.8
|
|
|
$
|
2,363.1
|
|
|
$
|
207.7
|
|
|
9%
|
•
|
very favorable weather conditions, including the second warmest year on record in the continental United States;
|
•
|
continued consumer investments in enhancing outdoor living spaces, as evidenced by improvements in sales growth rates for product offerings such as building materials and equipment (see discussion below);
|
•
|
pool and spa chemical sales, our largest product category at 13% of total net sales, increased 6% over last year; and
|
•
|
inflationary (estimated at 1% to 2%) product cost increases.
|
(in millions)
|
|
Year Ended December 31,
|
|
|
||||||||||
|
|
2016
|
|
2015
|
|
Change
|
||||||||
Gross profit
|
|
$
|
741.1
|
|
|
$
|
675.6
|
|
|
$
|
65.5
|
|
|
10%
|
Gross margin
|
|
28.8
|
%
|
|
28.6
|
%
|
|
|
|
|
(in millions)
|
|
Year Ended December 31,
|
|
|
||||||||||
|
|
2016
|
|
2015
|
|
Change
|
||||||||
Operating expenses
|
|
$
|
485.2
|
|
|
$
|
459.4
|
|
|
$
|
25.8
|
|
|
6%
|
Operating expenses as a percentage of net sales
|
|
18.9
|
%
|
|
19.4
|
%
|
|
|
|
|
(Unaudited)
|
|
Base Business
|
|
Excluded
|
|
Total
|
||||||||||||||||||
(in thousands)
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
||||||||||||||||||
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||
Net sales
|
|
$
|
2,344,410
|
|
|
$
|
2,238,929
|
|
|
$
|
18,729
|
|
|
$
|
7,633
|
|
|
$
|
2,363,139
|
|
|
$
|
2,246,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross profit
|
|
669,037
|
|
|
640,259
|
|
|
6,607
|
|
|
3,081
|
|
|
675,644
|
|
|
643,340
|
|
||||||
Gross margin
|
|
28.5
|
%
|
|
28.6
|
%
|
|
35.3
|
%
|
|
40.4
|
%
|
|
28.6
|
%
|
|
28.6
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating expenses
|
|
451,383
|
|
|
451,882
|
|
|
8,039
|
|
|
2,588
|
|
|
459,422
|
|
|
454,470
|
|
||||||
Expenses as a % of net sales
|
|
19.3
|
%
|
|
20.2
|
%
|
|
42.9
|
%
|
|
33.9
|
%
|
|
19.4
|
%
|
|
20.2
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income (loss)
|
|
217,654
|
|
|
188,377
|
|
|
(1,432
|
)
|
|
493
|
|
|
216,222
|
|
|
188,870
|
|
||||||
Operating margin
|
|
9.3
|
%
|
|
8.4
|
%
|
|
(7.6
|
)%
|
|
6.5
|
%
|
|
9.1
|
%
|
|
8.4
|
%
|
Acquired
|
|
Acquisition
Date
|
|
Net
Sales Centers
Acquired
|
|
Periods
Excluded
|
The Melton Corporation
(1)
|
|
November 2015
|
|
2
|
|
November - December 2015
|
Seaboard Industries, Inc.
(1)
|
|
October 2015
|
|
3
|
|
November - December 2015
|
Poolwerx Development LLC
(1)
|
|
April 2015
|
|
1
|
|
April - December 2015
|
St. Louis Hardscape Material & Supply, LLC
(1)(2)
|
|
December 2014
|
|
1
|
|
January - December 2015 and December 2014
|
Pool Systems Pty. Ltd.
|
|
July 2014
|
|
3
|
|
January - October 2015 and August - October 2014
|
DFW Stone Supply, LLC
(1)
|
|
March 2014
|
|
2
|
|
January - May 2015 and March - May 2014
|
Atlantic Chemical & Aquatics Inc.
(1)
|
|
February 2014
|
|
2
|
|
January - April 2015 and February - April 2014
|
(1)
|
We acquired certain distribution assets of each of these companies.
|
(2)
|
We completed this acquisition on December 31, 2014. We excluded this sales center from base business for the period identified as per our definition of base business, but also because no results of operations are included in fiscal 2014 due to the acquisition date. This sales center is not in our sales center count as of December 31, 2014, but is included in the table below as an acquired location during fiscal 2015.
|
December 31, 2014
|
328
|
|
Acquired
|
7
|
|
New locations
|
4
|
|
Consolidated locations
|
(3
|
)
|
December 31, 2015
|
336
|
|
(in millions)
|
|
Year Ended December 31,
|
|
|
||||||||||
|
|
2015
|
|
2014
|
|
Change
|
||||||||
Net sales
|
|
$
|
2,363.1
|
|
|
$
|
2,246.6
|
|
|
$
|
116.5
|
|
|
5%
|
•
|
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 growth, primarily in building materials and complementary product categories;
|
•
|
an extended pool season in certain markets, with above average temperatures through much of the fourth quarter; and
|
•
|
inflationary (estimated at less than 1%) product cost increases.
|
•
|
the strengthening of the U.S. dollar relative to most foreign currencies (estimated 2% impact); and
|
•
|
record rainfall in Texas and adjacent states in the second quarter, which delayed construction projects and reduced spending on related discretionary products.
|
(in millions)
|
|
Year Ended December 31,
|
|
|
||||||||||
|
|
2015
|
|
2014
|
|
Change
|
||||||||
Gross profit
|
|
$
|
675.6
|
|
|
$
|
643.3
|
|
|
$
|
32.3
|
|
|
5%
|
Gross margin
|
|
28.6
|
%
|
|
28.6
|
%
|
|
|
|
|
(in millions)
|
|
Year Ended December 31,
|
|
|
||||||||||
|
|
2015
|
|
2014
|
|
Change
|
||||||||
Operating expenses
|
|
$
|
459.4
|
|
|
$
|
454.5
|
|
|
$
|
4.9
|
|
|
1%
|
Operating expenses as a percentage of net sales
|
|
19.4
|
%
|
|
20.2
|
%
|
|
|
|
|
(Unaudited)
|
|
QUARTER
|
||||||||||||||||||||||||||||||
(in thousands)
|
|
2016
|
|
2015
|
||||||||||||||||||||||||||||
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||||||||||
Statement of Income Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net sales
|
|
$
|
515,250
|
|
|
$
|
918,889
|
|
|
$
|
691,429
|
|
|
$
|
445,235
|
|
|
$
|
450,430
|
|
|
$
|
851,855
|
|
|
$
|
645,779
|
|
|
$
|
415,075
|
|
Gross profit
|
|
143,023
|
|
|
270,736
|
|
|
199,551
|
|
|
127,777
|
|
|
124,801
|
|
|
248,260
|
|
|
184,288
|
|
|
118,295
|
|
||||||||
Operating income
|
|
29,530
|
|
|
142,420
|
|
|
74,166
|
|
|
9,743
|
|
|
15,599
|
|
|
129,132
|
|
|
65,512
|
|
|
5,979
|
|
||||||||
Net income
|
|
16,363
|
|
|
85,247
|
|
|
44,421
|
|
|
2,572
|
|
|
8,433
|
|
|
77,809
|
|
|
39,403
|
|
|
2,579
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net sales as a % of annual net sales
|
|
20
|
%
|
|
36
|
%
|
|
27
|
%
|
|
17
|
%
|
|
19
|
%
|
|
36
|
%
|
|
27
|
%
|
|
18
|
%
|
||||||||
Gross profit as a % of annual gross profit
|
|
19
|
%
|
|
37
|
%
|
|
27
|
%
|
|
17
|
%
|
|
18
|
%
|
|
37
|
%
|
|
27
|
%
|
|
18
|
%
|
||||||||
Operating income as a % of annual operating income
|
|
12
|
%
|
|
56
|
%
|
|
29
|
%
|
|
4
|
%
|
|
7
|
%
|
|
60
|
%
|
|
30
|
%
|
|
3
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total receivables, net
|
|
$
|
283,758
|
|
|
$
|
351,012
|
|
|
$
|
233,405
|
|
|
$
|
166,151
|
|
|
$
|
238,727
|
|
|
$
|
318,498
|
|
|
$
|
219,774
|
|
|
$
|
156,756
|
|
Product inventories, net
|
|
595,393
|
|
|
493,254
|
|
|
455,156
|
|
|
486,116
|
|
|
559,260
|
|
|
473,362
|
|
|
412,587
|
|
|
474,275
|
|
||||||||
Accounts payable
|
|
438,705
|
|
|
265,349
|
|
|
199,922
|
|
|
230,728
|
|
|
375,995
|
|
|
236,868
|
|
|
170,582
|
|
|
246,554
|
|
||||||||
Total debt
(1)
|
|
450,457
|
|
|
500,606
|
|
|
390,189
|
|
|
438,042
|
|
|
392,749
|
|
|
493,580
|
|
|
393,370
|
|
|
328,045
|
|
Note: Due to rounding, the sum of quarterly percentage amounts may not equal 100%.
|
(1)
|
For all periods presented, total debt balances have been adjusted to reflect our adoption of ASU 2015-03. For additional information, see Note 1 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K.
|
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
|
•
|
Fewer pool and irrigation installations
|
extraordinary amounts of rain
|
•
|
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 repayments;
|
•
|
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);
|
•
|
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.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Operating activities
|
|
$
|
165,378
|
|
|
$
|
146,050
|
|
|
$
|
121,815
|
|
Investing activities
|
|
(55,643
|
)
|
|
(37,793
|
)
|
|
(27,811
|
)
|
|||
Financing activities
|
|
(99,672
|
)
|
|
(107,804
|
)
|
|
(81,983
|
)
|
•
|
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
December 31, 2016
, our average total leverage ratio equaled
1.56
(compared to
1.61
as of
December 31, 2015
) and the TTM average total debt amount used in this calculation was
$442.8 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
December 31, 2016
, our fixed charge ratio equaled
5.41
(compared to
5.18
as of
December 31, 2015
) and TTM Rental Expense was
$52.4 million
.
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||
|
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than
5 years
|
||||||||||
Long-term debt
|
|
$
|
439,154
|
|
|
$
|
1,105
|
|
|
$
|
83,500
|
|
|
$
|
354,549
|
|
|
$
|
—
|
|
Operating leases
|
|
182,376
|
|
|
47,324
|
|
|
72,996
|
|
|
42,166
|
|
|
19,890
|
|
|||||
|
|
$
|
621,530
|
|
|
$
|
48,429
|
|
|
$
|
156,496
|
|
|
$
|
396,715
|
|
|
$
|
19,890
|
|
|
|
|
|
Estimated Payments Due by Period
|
||||||||||||||||
|
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than
5 years
|
||||||||||
Interest
|
|
$
|
34,207
|
|
|
$
|
9,482
|
|
|
$
|
17,515
|
|
|
$
|
7,210
|
|
|
$
|
—
|
|
Functional Currencies
|
|
Canada
|
Canadian Dollar
|
United Kingdom
|
British Pound
|
Belgium
|
Euro
|
France
|
Euro
|
Germany
|
Euro
|
Italy
|
Euro
|
Portugal
|
Euro
|
Spain
|
Euro
|
Mexico
|
Mexican Peso
|
Colombia
|
Colombian Peso
|
Australia
|
Australian Dollar
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net sales
|
$
|
2,570,803
|
|
|
$
|
2,363,139
|
|
|
$
|
2,246,562
|
|
Cost of sales
|
1,829,716
|
|
|
1,687,495
|
|
|
1,603,222
|
|
|||
Gross profit
|
741,087
|
|
|
675,644
|
|
|
643,340
|
|
|||
Selling and administrative expenses
|
485,228
|
|
|
459,422
|
|
|
454,470
|
|
|||
Operating income
|
255,859
|
|
|
216,222
|
|
|
188,870
|
|
|||
Interest and other non-operating expenses, net
|
14,481
|
|
|
8,072
|
|
|
7,485
|
|
|||
Income before income taxes and equity earnings
|
241,378
|
|
|
208,150
|
|
|
181,385
|
|
|||
Provision for income taxes
|
92,931
|
|
|
80,137
|
|
|
70,559
|
|
|||
Equity earnings in unconsolidated investments, net
|
156
|
|
|
211
|
|
|
204
|
|
|||
Net income
|
148,603
|
|
|
128,224
|
|
|
111,030
|
|
|||
Net (income) loss attributable to noncontrolling interest
|
352
|
|
|
51
|
|
|
(338
|
)
|
|||
Net income attributable to Pool Corporation
|
$
|
148,955
|
|
|
$
|
128,275
|
|
|
$
|
110,692
|
|
|
|
|
|
|
|
||||||
Earnings per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
3.56
|
|
|
$
|
2.98
|
|
|
$
|
2.50
|
|
Diluted
|
$
|
3.47
|
|
|
$
|
2.90
|
|
|
$
|
2.44
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
41,872
|
|
|
43,105
|
|
|
44,281
|
|
|||
Diluted
|
42,984
|
|
|
44,254
|
|
|
45,441
|
|
|||
|
|
|
|
|
|
||||||
Cash dividends declared per common share
|
$
|
1.19
|
|
|
$
|
1.00
|
|
|
$
|
0.85
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
$
|
148,603
|
|
|
$
|
128,224
|
|
|
$
|
111,030
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(1,661
|
)
|
|
(9,046
|
)
|
|
(6,271
|
)
|
|||
Change in unrealized gains and losses on interest rate swaps,
net of the change in taxes of $(839), $653 and $194
|
1,312
|
|
|
(1,021
|
)
|
|
(303
|
)
|
|||
Total other comprehensive income (loss)
|
(349
|
)
|
|
(10,067
|
)
|
|
(6,574
|
)
|
|||
Comprehensive income
|
148,254
|
|
|
118,157
|
|
|
104,456
|
|
|||
Comprehensive loss attributable to noncontrolling interest
|
378
|
|
|
448
|
|
|
18
|
|
|||
Comprehensive income attributable to Pool Corporation
|
$
|
148,632
|
|
|
$
|
118,605
|
|
|
$
|
104,474
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
21,956
|
|
|
$
|
13,237
|
|
Receivables, net
|
61,437
|
|
|
54,173
|
|
||
Receivables pledged under receivables facility
|
104,714
|
|
|
102,583
|
|
||
Product inventories, net
|
486,116
|
|
|
474,275
|
|
||
Prepaid expenses and other current assets
|
15,318
|
|
|
11,946
|
|
||
Deferred income taxes
|
6,016
|
|
|
5,530
|
|
||
Total current assets
|
695,557
|
|
|
661,744
|
|
||
|
|
|
|
||||
Property and equipment, net
|
83,290
|
|
|
69,854
|
|
||
Goodwill
|
184,795
|
|
|
172,761
|
|
||
Other intangible assets, net
|
13,326
|
|
|
11,845
|
|
||
Equity interest investments
|
1,172
|
|
|
1,231
|
|
||
Other assets
|
15,955
|
|
|
16,926
|
|
||
Total assets
|
$
|
994,095
|
|
|
$
|
934,361
|
|
|
|
|
|
||||
Liabilities, redeemable noncontrolling interest and stockholders’ equity
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|||
Accounts payable
|
$
|
230,728
|
|
|
$
|
246,554
|
|
Accrued expenses and other current liabilities
|
64,387
|
|
|
56,591
|
|
||
Short-term borrowings and current portion of long-term debt and
other long-term liabilities
|
1,105
|
|
|
1,700
|
|
||
Total current liabilities
|
296,220
|
|
|
304,845
|
|
||
|
|
|
|
||||
Deferred income taxes
|
34,475
|
|
|
29,808
|
|
||
Long-term debt, net
|
436,937
|
|
|
326,345
|
|
||
Other long-term liabilities
|
18,966
|
|
|
14,955
|
|
||
Total liabilities
|
786,598
|
|
|
675,953
|
|
||
|
|
|
|
||||
Redeemable noncontrolling interest
|
2,287
|
|
|
2,665
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
|||
Common stock, $.001 par value; 100,000,000 shares authorized;
41,089,720 shares issued and outstanding at December 31, 2016 and
42,711,016 shares issued and outstanding at December 31, 2015
|
41
|
|
|
43
|
|
||
Additional paid-in capital
|
403,162
|
|
|
374,138
|
|
||
Retained deficit
|
(183,915
|
)
|
|
(104,709
|
)
|
||
Accumulated other comprehensive loss
|
(14,078
|
)
|
|
(13,729
|
)
|
||
Total stockholders’ equity
|
205,210
|
|
|
255,743
|
|
||
Total liabilities, redeemable noncontrolling interest and stockholders’ equity
|
$
|
994,095
|
|
|
$
|
934,361
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
148,603
|
|
|
$
|
128,224
|
|
|
$
|
111,030
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|||||
Depreciation
|
20,338
|
|
|
16,373
|
|
|
14,495
|
|
|||
Amortization
|
1,639
|
|
|
1,015
|
|
|
1,387
|
|
|||
Share-based compensation
|
9,902
|
|
|
9,543
|
|
|
9,065
|
|
|||
Excess tax benefits from share-based compensation
|
(7,370
|
)
|
|
(7,706
|
)
|
|
(5,524
|
)
|
|||
Provision for doubtful accounts receivable, net of write-offs
|
(155
|
)
|
|
197
|
|
|
(539
|
)
|
|||
Provision for inventory obsolescence, net of write-offs
|
(448
|
)
|
|
576
|
|
|
(687
|
)
|
|||
Provision for deferred income taxes
|
3,749
|
|
|
4,198
|
|
|
6,986
|
|
|||
(Gains) losses on sales of property and equipment
|
(320
|
)
|
|
230
|
|
|
179
|
|
|||
Equity earnings in unconsolidated investments, net
|
(156
|
)
|
|
(211
|
)
|
|
(204
|
)
|
|||
Net losses on foreign currency transactions
|
679
|
|
|
774
|
|
|
277
|
|
|||
Impairments of goodwill and other non-operating assets
|
4,113
|
|
|
500
|
|
|
—
|
|
|||
Other
|
923
|
|
|
(869
|
)
|
|
206
|
|
|||
Changes in operating assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
|
|||||
Receivables
|
(5,666
|
)
|
|
(16,656
|
)
|
|
(12,751
|
)
|
|||
Product inventories
|
(8,050
|
)
|
|
(10,848
|
)
|
|
(30,409
|
)
|
|||
Prepaid expenses and other assets
|
(3,077
|
)
|
|
(434
|
)
|
|
(2,265
|
)
|
|||
Accounts payable
|
(17,896
|
)
|
|
9,956
|
|
|
20,090
|
|
|||
Accrued expenses and other current liabilities
|
18,570
|
|
|
11,188
|
|
|
10,479
|
|
|||
Net cash provided by operating activities
|
165,378
|
|
|
146,050
|
|
|
121,815
|
|
|||
|
|
|
|
|
|
||||||
Investing activities
|
|
|
|
|
|
|
|
||||
Acquisition of businesses, net of cash acquired
|
(19,730
|
)
|
|
(4,483
|
)
|
|
(10,648
|
)
|
|||
Purchases of property and equipment, net of sale proceeds
|
(34,352
|
)
|
|
(29,095
|
)
|
|
(17,328
|
)
|
|||
Payments to fund credit agreement
|
(5,322
|
)
|
|
(8,860
|
)
|
|
—
|
|
|||
Collections from credit agreement
|
3,737
|
|
|
4,557
|
|
|
—
|
|
|||
Other investments, net
|
24
|
|
|
88
|
|
|
165
|
|
|||
Net cash used in investing activities
|
(55,643
|
)
|
|
(37,793
|
)
|
|
(27,811
|
)
|
|||
|
|
|
|
|
|
||||||
Financing activities
|
|
|
|
|
|
|
|||||
Proceeds from revolving line of credit
|
1,154,090
|
|
|
911,712
|
|
|
820,720
|
|
|||
Payments on revolving line of credit
|
(1,072,557
|
)
|
|
(890,406
|
)
|
|
(763,429
|
)
|
|||
Proceeds from asset-backed financing
|
155,000
|
|
|
143,400
|
|
|
121,600
|
|
|||
Payments on asset-backed financing
|
(126,500
|
)
|
|
(156,000
|
)
|
|
(106,000
|
)
|
|||
Proceeds from short-term borrowings, long-term debt and other long-term liabilities
|
18,442
|
|
|
8,119
|
|
|
3,607
|
|
|||
Payments on short-term borrowings, long-term debt and other long-term liabilities
|
(19,037
|
)
|
|
(7,948
|
)
|
|
(3,075
|
)
|
|||
Payments of deferred financing costs
|
(69
|
)
|
|
(320
|
)
|
|
(394
|
)
|
|||
Excess tax benefits from share-based compensation
|
7,370
|
|
|
7,706
|
|
|
5,524
|
|
|||
Proceeds from stock issued under share-based compensation plans
|
11,752
|
|
|
18,269
|
|
|
13,530
|
|
|||
Payments of cash dividends
|
(49,749
|
)
|
|
(43,117
|
)
|
|
(37,600
|
)
|
|||
Purchases of treasury stock
|
(178,414
|
)
|
|
(99,219
|
)
|
|
(136,466
|
)
|
|||
Net cash used in financing activities
|
(99,672
|
)
|
|
(107,804
|
)
|
|
(81,983
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(1,344
|
)
|
|
(2,046
|
)
|
|
(5,197
|
)
|
|||
Change in cash and cash equivalents
|
8,719
|
|
|
(1,593
|
)
|
|
6,824
|
|
|||
Cash and cash equivalents at beginning of year
|
13,237
|
|
|
14,830
|
|
|
8,006
|
|
|||
Cash and cash equivalents at end of year
|
$
|
21,956
|
|
|
$
|
13,237
|
|
|
$
|
14,830
|
|
|
|
Common Stock
|
|
Additional
Paid-In
|
|
Retained
|
|
Accumulated
Other
Comprehensive
|
|
|
|||||||||||||
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Income (Loss)
|
|
Total
|
|||||||||||
Balance at December 31, 2013
|
|
45,379
|
|
|
$
|
45
|
|
|
$
|
310,503
|
|
|
$
|
(27,278
|
)
|
|
$
|
2,912
|
|
|
$
|
286,182
|
|
Net income attributable to Pool Corporation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
110,692
|
|
|
—
|
|
|
110,692
|
|
|||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,271
|
)
|
|
(6,271
|
)
|
|||||
Interest rate swaps, net of the change in taxes of $194
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(303
|
)
|
|
(303
|
)
|
|||||
Repurchases of common stock, net of retirements
|
|
(2,421
|
)
|
|
(2
|
)
|
|
—
|
|
|
(136,464
|
)
|
|
—
|
|
|
(136,466
|
)
|
|||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
9,065
|
|
|
—
|
|
|
—
|
|
|
9,065
|
|
|||||
Issuance of shares under incentive stock plans, including tax benefit of $5,524
|
|
553
|
|
|
1
|
|
|
19,052
|
|
|
—
|
|
|
—
|
|
|
19,053
|
|
|||||
Declaration of cash dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37,600
|
)
|
|
—
|
|
|
(37,600
|
)
|
|||||
Balance at December 31, 2014
|
|
43,511
|
|
|
44
|
|
|
338,620
|
|
|
(90,650
|
)
|
|
(3,662
|
)
|
|
244,352
|
|
|||||
Net income attributable to Pool Corporation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
128,275
|
|
|
—
|
|
|
128,275
|
|
|||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,046
|
)
|
|
(9,046
|
)
|
|||||
Interest rate swaps, net of the change in taxes of $653
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,021
|
)
|
|
(1,021
|
)
|
|||||
Repurchases of common stock, net of retirements
|
|
(1,448
|
)
|
|
(2
|
)
|
|
—
|
|
|
(99,217
|
)
|
|
—
|
|
|
(99,219
|
)
|
|||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
9,543
|
|
|
—
|
|
|
—
|
|
|
9,543
|
|
|||||
Issuance of shares under incentive stock plans, including tax benefit of $7,706
|
|
648
|
|
|
1
|
|
|
25,975
|
|
|
—
|
|
|
—
|
|
|
25,976
|
|
|||||
Declaration of cash dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43,117
|
)
|
|
—
|
|
|
(43,117
|
)
|
|||||
Balance at December 31, 2015
|
|
42,711
|
|
|
43
|
|
|
374,138
|
|
|
(104,709
|
)
|
|
(13,729
|
)
|
|
255,743
|
|
|||||
Net income attributable to Pool Corporation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
148,955
|
|
|
—
|
|
|
148,955
|
|
|||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,661
|
)
|
|
(1,661
|
)
|
|||||
Interest rate swaps, net of the change in taxes of $(839)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,312
|
|
|
1,312
|
|
|||||
Repurchases of common stock, net of retirements
|
|
(2,064
|
)
|
|
(2
|
)
|
|
—
|
|
|
(178,412
|
)
|
|
—
|
|
|
(178,414
|
)
|
|||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
9,902
|
|
|
—
|
|
|
—
|
|
|
9,902
|
|
|||||
Issuance of shares under incentive stock plans, including tax benefit of $7,370
|
|
443
|
|
|
—
|
|
|
19,122
|
|
|
—
|
|
|
—
|
|
|
19,122
|
|
|||||
Declaration of cash dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49,749
|
)
|
|
—
|
|
|
(49,749
|
)
|
|||||
Balance at December 31, 2016
|
|
41,090
|
|
|
$
|
41
|
|
|
$
|
403,162
|
|
|
$
|
(183,915
|
)
|
|
$
|
(14,078
|
)
|
|
$
|
205,210
|
|
2016
|
|
2015
|
|
2014
|
||||||
$
|
39,879
|
|
|
$
|
36,783
|
|
|
$
|
38,674
|
|
2016
|
|
2015
|
|
2014
|
||||||
$
|
7,011
|
|
|
$
|
7,127
|
|
|
$
|
6,894
|
|
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 December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Level 2
|
|
|
|
|
||||
Unrealized gains on interest rate swaps
|
|
$
|
1,521
|
|
|
$
|
—
|
|
Unrealized losses on interest rate swaps
|
|
3,138
|
|
|
3,295
|
|
||
|
|
|
|
|
||||
Level 3
|
|
|
|
|
||||
Contingent consideration liabilities
|
|
$
|
1,611
|
|
|
$
|
806
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at beginning of year
|
|
$
|
4,205
|
|
|
$
|
4,008
|
|
|
$
|
4,547
|
|
Bad debt expense
|
|
1,199
|
|
|
1,110
|
|
|
1,167
|
|
|||
Write-offs, net of recoveries
|
|
(1,354
|
)
|
|
(913
|
)
|
|
(1,706
|
)
|
|||
Balance at end of year
|
|
$
|
4,050
|
|
|
$
|
4,205
|
|
|
$
|
4,008
|
|
•
|
the level of inventory in relation to historical sales by product, including inventory usage by class based on product sales at both the sales center and on a company-wide basis;
|
•
|
changes in customer preferences or regulatory requirements;
|
•
|
seasonal fluctuations in inventory levels;
|
•
|
geographic location; and
|
•
|
superseded products and new product offerings.
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at beginning of year
|
|
$
|
6,979
|
|
|
$
|
6,403
|
|
|
$
|
7,103
|
|
Provision for inventory write-downs
|
|
2,036
|
|
|
3,043
|
|
|
1,535
|
|
|||
Deduction for inventory write-offs
|
|
(2,484
|
)
|
|
(2,467
|
)
|
|
(2,235
|
)
|
|||
Balance at end of year
|
|
$
|
6,531
|
|
|
$
|
6,979
|
|
|
$
|
6,403
|
|
Buildings
|
40 years
|
Leasehold improvements
(1)
|
1 - 10 years
|
Autos and trucks
|
3 - 6 years
|
Machinery and equipment
|
3 - 15 years
|
Computer equipment
|
3 - 7 years
|
Furniture and fixtures
|
5 - 10 years
|
(1)
|
For substantial improvements made near the end of a lease term where we are reasonably certain the lease will be renewed, we amortize the leasehold improvement over the remaining life of the lease including the expected renewal period.
|
2016
|
|
2015
|
|
2014
|
||||||
$
|
20,338
|
|
|
$
|
16,373
|
|
|
$
|
14,495
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Redeemable noncontrolling interest, beginning of period
|
$
|
2,665
|
|
|
$
|
3,113
|
|
|
$
|
—
|
|
Acquisition date value
|
—
|
|
|
—
|
|
|
3,131
|
|
|||
Net income (loss) attributable to noncontrolling interest
|
(352
|
)
|
|
(51
|
)
|
|
338
|
|
|||
Other comprehensive loss attributable to noncontrolling interest
|
(26
|
)
|
|
(397
|
)
|
|
(356
|
)
|
|||
Redeemable noncontrolling interest, end of period
|
$
|
2,287
|
|
|
$
|
2,665
|
|
|
$
|
3,113
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Foreign currency translation adjustments
|
$
|
(13,024
|
)
|
|
$
|
(11,362
|
)
|
Unrealized losses on interest rate swaps, net of tax
|
(1,054
|
)
|
|
(2,367
|
)
|
||
Accumulated other comprehensive loss
|
$
|
(14,078
|
)
|
|
$
|
(13,729
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
||||||
Interest
|
$
|
8,052
|
|
|
$
|
6,316
|
|
|
$
|
6,481
|
|
Income taxes, net of refunds
|
80,378
|
|
|
65,668
|
|
|
58,405
|
|
Goodwill (gross) at December 31, 2014
|
$
|
183,190
|
|
Acquired goodwill
|
1,149
|
|
|
Foreign currency translation adjustments
|
(2,312
|
)
|
|
Goodwill (gross) at December 31, 2015
|
182,027
|
|
|
|
|
||
Accumulated impairment losses at December 31, 2014
|
(9,266
|
)
|
|
Goodwill impairment
|
—
|
|
|
Accumulated impairment losses at December 31, 2015
|
(9,266
|
)
|
|
|
|
||
Goodwill (net) at December 31, 2015
|
$
|
172,761
|
|
|
|
||
Goodwill (gross) at December 31, 2015
|
$
|
182,027
|
|
Acquired goodwill
|
12,696
|
|
|
Foreign currency translation adjustments
|
(49
|
)
|
|
Goodwill (gross) at December 31, 2016
|
194,674
|
|
|
|
|
||
Accumulated impairment losses at December 31, 2015
|
(9,266
|
)
|
|
Goodwill impairment
|
(613
|
)
|
|
Accumulated impairment losses at December 31, 2016
|
(9,879
|
)
|
|
|
|
||
Goodwill (net) at December 31, 2016
|
$
|
184,795
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Horizon tradename (indefinite life)
|
$
|
8,400
|
|
|
$
|
8,400
|
|
Pool Systems tradename and trademarks (indefinite lives)
|
1,023
|
|
|
1,040
|
|
||
National Pool Tile (NPT) tradename (20 year life)
|
1,500
|
|
|
1,500
|
|
||
Non-compete agreements (5 year weighted average useful life)
|
4,396
|
|
|
1,953
|
|
||
Patents (5 year weighted average useful life)
|
483
|
|
|
492
|
|
||
Other intangible assets
|
15,802
|
|
|
13,385
|
|
||
Less: Accumulated amortization
|
(2,476
|
)
|
|
(1,540
|
)
|
||
Other intangible assets, net
|
$
|
13,326
|
|
|
$
|
11,845
|
|
2017
|
|
$
|
888
|
|
2018
|
|
886
|
|
|
2019
|
|
747
|
|
|
2020
|
|
700
|
|
|
2021
|
|
219
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Receivables, net:
|
|
|
|
|
||||
Trade accounts
|
|
$
|
18,533
|
|
|
$
|
17,835
|
|
Vendor programs
|
|
44,842
|
|
|
38,444
|
|
||
Other, net
|
|
2,112
|
|
|
2,099
|
|
||
Total receivables
|
|
65,487
|
|
|
58,378
|
|
||
Less: Allowance for doubtful accounts
|
|
(4,050
|
)
|
|
(4,205
|
)
|
||
Receivables, net
|
|
$
|
61,437
|
|
|
$
|
54,173
|
|
|
|
|
|
|
||||
Prepaid expenses and other current assets:
|
|
|
|
|
||||
Prepaid expenses
|
|
$
|
13,584
|
|
|
$
|
11,919
|
|
Other current assets
|
|
1,734
|
|
|
27
|
|
||
Prepaid expenses and other current assets
|
|
$
|
15,318
|
|
|
$
|
11,946
|
|
|
|
|
|
|
||||
Property and equipment, net:
|
|
|
|
|
|
|||
Land
|
|
$
|
1,685
|
|
|
$
|
1,925
|
|
Buildings
|
|
2,465
|
|
|
2,465
|
|
||
Leasehold improvements
|
|
38,348
|
|
|
33,518
|
|
||
Autos and trucks
|
|
53,371
|
|
|
35,832
|
|
||
Machinery and equipment
|
|
45,535
|
|
|
39,518
|
|
||
Computer equipment
|
|
39,251
|
|
|
39,271
|
|
||
Furniture and fixtures
|
|
9,951
|
|
|
9,164
|
|
||
Fixed assets in progress
|
|
2,065
|
|
|
6,173
|
|
||
Total property and equipment
|
|
192,671
|
|
|
167,866
|
|
||
Less: Accumulated depreciation
|
|
(109,381
|
)
|
|
(98,012
|
)
|
||
Property and equipment, net
|
|
$
|
83,290
|
|
|
$
|
69,854
|
|
|
|
|
|
|
||||
Accrued expenses and other current liabilities:
|
|
|
|
|
|
|||
Salaries and payroll deductions
|
|
$
|
8,878
|
|
|
$
|
6,433
|
|
Performance-based compensation
|
|
32,226
|
|
|
29,090
|
|
||
Taxes payable
|
|
8,424
|
|
|
8,889
|
|
||
Other current liabilities
|
|
14,859
|
|
|
12,179
|
|
||
Accrued expenses and other current liabilities
|
|
$
|
64,387
|
|
|
$
|
56,591
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Variable rate debt
|
|
|
|
|
||||
Current portion of long-term debt:
|
|
|
|
|
||||
Australian Seasonal Credit Facility (described below)
|
|
$
|
1,105
|
|
|
$
|
1,700
|
|
|
|
|
|
|
||||
Long-term portion:
|
|
|
|
|
||||
Revolving Credit Facility (described below)
|
|
354,549
|
|
|
273,015
|
|
||
Receivables Securitization Facility (described below)
|
|
83,500
|
|
|
55,000
|
|
||
Less: financing costs, net
|
|
1,112
|
|
|
1,670
|
|
||
Long-term debt, net
|
|
$
|
436,937
|
|
|
$
|
326,345
|
|
Total debt
|
|
$
|
438,042
|
|
|
$
|
328,045
|
|
a.
|
a base rate, which is the highest of (i) the Wells Fargo Bank, National Association prime rate, (ii) the Federal Funds Rate plus
0.500%
and (iii) the London Interbank Offered Rate (LIBOR) Market Index Rate plus
1.000%
; or
|
b.
|
LIBOR.
|
a.
|
a base rate, which is the greatest of (i) the Canadian Reference Bank prime rate and (ii) the annual rate of interest equal to the sum of the Canadian Dealer Offered Rate (CDOR) plus
1.000%
; or
|
b.
|
CDOR.
|
a.
|
for financial institutions using the commercial paper market, commercial paper rates based on the applicable variable rates in the commercial paper market at the time of issuance; or
|
b.
|
for financial institutions not using the commercial paper market, LMIR.
|
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
|
|
Amendment Date
|
|
Notional
Amount
(in millions)
|
|
Fixed
Interest
Rate
|
|||
Interest rate swap 6
|
|
October 1, 2015
|
|
$
|
75.0
|
|
|
2.273
|
%
|
Interest rate swap 7
|
|
October 1, 2015
|
|
25.0
|
|
|
2.111
|
%
|
|
Interest rate swap 8
|
|
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
|
%
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Deferred financing costs:
|
|
|
|
|
||||
Balance at beginning of year
|
|
$
|
4,814
|
|
|
$
|
4,494
|
|
Financing costs deferred
|
|
69
|
|
|
320
|
|
||
Balance at end of year
|
|
4,883
|
|
|
4,814
|
|
||
|
|
|
|
|
||||
Accumulated amortization of deferred financing costs
|
|
(3,771
|
)
|
|
(3,144
|
)
|
||
Deferred financing costs, net of accumulated amortization
|
|
$
|
1,112
|
|
|
$
|
1,670
|
|
|
|
Shares
|
|
Weighted Average
Exercise Price
|
|
Weighted Average
Remaining
Contractual Term
(Years)
|
|
Aggregate
Intrinsic Value
|
|||||
Balance at December 31, 2015
|
|
2,741,745
|
|
|
$
|
31.50
|
|
|
|
|
|
||
Granted
|
|
155,225
|
|
|
80.95
|
|
|
|
|
|
|
||
Less: Exercised
|
|
343,237
|
|
|
30.12
|
|
|
|
|
|
|
||
Forfeited
|
|
2,850
|
|
|
28.47
|
|
|
|
|
|
|
||
Balance at December 31, 2016
|
|
2,550,883
|
|
|
$
|
34.70
|
|
|
4.22
|
|
$
|
177,637,707
|
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable at December 31, 2016
|
|
1,800,183
|
|
|
$
|
24.19
|
|
|
2.94
|
|
$
|
144,276,703
|
|
|
|
Outstanding
Stock Options
|
|
Exercisable
Stock Options
|
||||||||||||
Range of Exercise Prices
|
|
Shares
|
|
Weighted Average
Remaining
Contractual Term
(Years)
|
|
Weighted Average Exercise Price
|
|
Shares
|
|
Weighted Average Exercise Price
|
||||||
$ 18.00 to $ 20.34
|
|
1,100,811
|
|
|
2.22
|
|
$
|
19.65
|
|
|
1,100,811
|
|
|
$
|
19.65
|
|
$ 20.35 to $ 45.61
|
|
947,497
|
|
|
4.48
|
|
33.83
|
|
|
696,372
|
|
|
31.22
|
|
||
$ 45.62 to $ 102.41
|
|
502,575
|
|
|
8.13
|
|
69.30
|
|
|
3,000
|
|
|
59.23
|
|
||
|
|
2,550,883
|
|
|
4.22
|
|
$
|
34.70
|
|
|
1,800,183
|
|
|
$
|
24.19
|
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands, except share amounts)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Options exercised
|
|
343,237
|
|
|
543,028
|
|
|
441,833
|
|
|||
Cash proceeds
|
|
$
|
10,340
|
|
|
$
|
17,137
|
|
|
$
|
12,451
|
|
Intrinsic value of options exercised
|
|
$
|
21,094
|
|
|
$
|
22,676
|
|
|
$
|
13,132
|
|
Tax benefits realized
|
|
$
|
7,891
|
|
|
$
|
8,326
|
|
|
$
|
5,018
|
|
|
|
Year Ended December 31,
|
|||||||||||||
(Weighted average)
|
|
2016
|
|
2015
|
|
2014
|
|||||||||
Expected volatility
|
|
29.7
|
%
|
|
|
33.8
|
%
|
|
|
37.7
|
%
|
|
|||
Expected term
|
|
7.1
|
|
years
|
|
7.2
|
|
years
|
|
7.2
|
|
years
|
|||
Risk-free interest rate
|
|
1.75
|
%
|
|
|
1.95
|
%
|
|
|
2.26
|
%
|
|
|||
Expected dividend yield
|
|
1.5
|
%
|
|
|
1.5
|
%
|
|
|
1.5
|
%
|
|
|||
Grant date fair value
|
|
$
|
22.86
|
|
|
|
$
|
22.57
|
|
|
|
$
|
21.07
|
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Share-based compensation expense
|
|
$
|
3,735
|
|
|
$
|
3,688
|
|
|
$
|
3,632
|
|
Recognized tax benefits
|
|
1,409
|
|
|
1,331
|
|
|
1,388
|
|
|
|
Shares
|
|
Weighted Average
Grant Date Fair Value
|
|||
Balance unvested at December 31, 2015
|
|
301,760
|
|
|
$
|
51.18
|
|
Granted (at market price)
(1)
|
|
80,579
|
|
|
83.34
|
|
|
Less: Vested
|
|
95,420
|
|
|
38.70
|
|
|
Forfeited
|
|
1,900
|
|
|
69.55
|
|
|
Balance unvested at December 31, 2016
|
|
285,019
|
|
|
$
|
64.33
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Shares vested
|
|
95,420
|
|
|
147,619
|
|
|
212,794
|
|
|||
Fair value of restricted stock awards vested
|
|
$
|
7,960
|
|
|
$
|
10,182
|
|
|
$
|
12,354
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Share-based compensation expense
|
|
$
|
5,993
|
|
|
$
|
5,513
|
|
|
$
|
5,203
|
|
a.
|
as amended in May 2016, the closing price of our common stock at the end of a six month plan period ending either July 31 or January 31 (prior to the amendment, the six month plan period ended on June 30 or December 31); or
|
b.
|
the average of the beginning and ending closing prices of our common stock for such six month period.
|
2016
|
|
2015
|
|
2014
|
|||
8,649
|
|
|
22,555
|
|
|
22,508
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
United States
|
|
$
|
234,646
|
|
|
$
|
203,269
|
|
|
$
|
178,497
|
|
Foreign
|
|
6,732
|
|
|
4,881
|
|
|
2,888
|
|
|||
Total
|
|
$
|
241,378
|
|
|
$
|
208,150
|
|
|
$
|
181,385
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
77,000
|
|
|
$
|
65,676
|
|
|
$
|
54,447
|
|
State and other
|
|
12,182
|
|
|
10,263
|
|
|
9,126
|
|
|||
Total current provision for income taxes
|
|
89,182
|
|
|
75,939
|
|
|
63,573
|
|
|||
|
|
|
|
|
|
|
||||||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
4,079
|
|
|
4,568
|
|
|
6,942
|
|
|||
State and other
|
|
(330
|
)
|
|
(370
|
)
|
|
44
|
|
|||
Total deferred provision for income taxes
|
|
3,749
|
|
|
4,198
|
|
|
6,986
|
|
|||
Provision for income taxes
|
|
$
|
92,931
|
|
|
$
|
80,137
|
|
|
$
|
70,559
|
|
|
|
Year Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Federal statutory rate
|
|
35.00
|
%
|
|
35.00
|
%
|
|
35.00
|
%
|
Change in valuation allowance
|
|
0.10
|
|
|
0.20
|
|
|
0.43
|
|
Other, primarily state income tax rate
|
|
3.40
|
|
|
3.30
|
|
|
3.47
|
|
Total effective tax rate
|
|
38.50
|
%
|
|
38.50
|
%
|
|
38.90
|
%
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Product inventories
|
|
$
|
7,010
|
|
|
$
|
7,101
|
|
Accrued expenses
|
|
3,978
|
|
|
3,303
|
|
||
Allowance for doubtful accounts
|
|
396
|
|
|
606
|
|
||
Total current
|
|
11,384
|
|
|
11,010
|
|
||
Component reclassified for net presentation
|
|
(5,368
|
)
|
|
(5,480
|
)
|
||
Total current, net
|
|
6,016
|
|
|
5,530
|
|
||
|
|
|
|
|
||||
Leases
|
|
1,920
|
|
|
1,786
|
|
||
Share-based compensation
|
|
13,778
|
|
|
13,422
|
|
||
Uncertain tax positions
|
|
2,746
|
|
|
2,092
|
|
||
Net operating losses
|
|
5,735
|
|
|
5,485
|
|
||
Interest rate swaps
|
|
674
|
|
|
1,513
|
|
||
Other
|
|
2,465
|
|
|
1,159
|
|
||
Total non-current
|
|
27,318
|
|
|
25,457
|
|
||
Less: Valuation allowance
|
|
(5,735
|
)
|
|
(5,485
|
)
|
||
Component reclassified for net presentation
|
|
(20,781
|
)
|
|
(18,755
|
)
|
||
Total non-current, net
|
|
802
|
|
|
1,217
|
|
||
|
|
|
|
|
||||
Total deferred tax assets
|
|
6,818
|
|
|
6,747
|
|
||
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
|
|
||
Trade discounts on purchases
|
|
2,698
|
|
|
3,001
|
|
||
Prepaid expenses
|
|
2,670
|
|
|
2,479
|
|
||
Total current
|
|
5,368
|
|
|
5,480
|
|
||
Component reclassified for net presentation
|
|
(5,368
|
)
|
|
(5,480
|
)
|
||
Total current, net
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
||||
Intangible assets, primarily goodwill
|
|
42,930
|
|
|
40,197
|
|
||
Depreciation
|
|
12,326
|
|
|
8,366
|
|
||
Total non-current
|
|
55,256
|
|
|
48,563
|
|
||
Component reclassified for net presentation
|
|
(20,781
|
)
|
|
(18,755
|
)
|
||
Total non-current, net
|
|
34,475
|
|
|
29,808
|
|
||
|
|
|
|
|
||||
Total deferred tax liabilities
|
|
34,475
|
|
|
29,808
|
|
||
|
|
|
|
|
||||
Net deferred tax liability
|
|
$
|
27,657
|
|
|
$
|
23,061
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at beginning of year
|
|
$
|
5,978
|
|
|
$
|
4,690
|
|
|
$
|
3,837
|
|
Increases for tax positions taken during a prior period
|
|
10
|
|
|
410
|
|
|
—
|
|
|||
Increases for tax positions taken during the current period
|
|
2,819
|
|
|
1,782
|
|
|
1,664
|
|
|||
Decreases resulting from the expiration of the statute of limitations
|
|
961
|
|
|
904
|
|
|
811
|
|
|||
Decreases relating to settlements
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at end of year
|
|
$
|
7,846
|
|
|
$
|
5,978
|
|
|
$
|
4,690
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
|
$
|
148,603
|
|
|
$
|
128,224
|
|
|
$
|
111,030
|
|
Net (income) loss attributable to noncontrolling interest
|
|
352
|
|
|
51
|
|
|
(338
|
)
|
|||
Net income attributable to Pool Corporation
|
|
$
|
148,955
|
|
|
$
|
128,275
|
|
|
$
|
110,692
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
41,872
|
|
|
43,105
|
|
|
44,281
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||
Stock options and employee stock purchase plan
|
|
1,112
|
|
|
1,149
|
|
|
1,160
|
|
|||
Diluted
|
|
42,984
|
|
|
44,254
|
|
|
45,441
|
|
|||
|
|
|
|
|
|
|
||||||
Earnings per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
3.56
|
|
|
$
|
2.98
|
|
|
$
|
2.50
|
|
Diluted
|
|
$
|
3.47
|
|
|
$
|
2.90
|
|
|
$
|
2.44
|
|
|
|
|
|
|
|
|
||||||
Anti-dilutive stock options excluded from diluted earnings per share computations
(1)
|
|
1
|
|
|
—
|
|
|
169
|
|
(1)
|
Since these options have exercise prices that are higher than the average market prices of our common stock, including them in the calculation would have an anti-dilutive effect on earnings per share.
|
2016
|
|
2015
|
|
2014
|
||||||
$
|
63,940
|
|
|
$
|
60,129
|
|
|
$
|
60,214
|
|
2017
|
|
$
|
47,324
|
|
2018
|
|
39,908
|
|
|
2019
|
|
33,088
|
|
|
2020
|
|
26,211
|
|
|
2021
|
|
15,955
|
|
|
Thereafter
|
|
19,890
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
NCC
|
|
$
|
1,035
|
|
|
$
|
1,016
|
|
|
$
|
989
|
|
Other
|
|
—
|
|
|
—
|
|
|
64
|
|
|||
Total
|
|
$
|
1,035
|
|
|
$
|
1,016
|
|
|
$
|
1,053
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Matching contributions - defined contribution plans
|
|
$
|
5,817
|
|
|
$
|
5,583
|
|
|
$
|
5,235
|
|
Matching contributions - deferred compensation plan
|
|
194
|
|
|
218
|
|
|
233
|
|
|
Quarter
|
||||||||||||||||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||||||||||
Net sales
|
$
|
515,250
|
|
|
$
|
918,889
|
|
|
$
|
691,429
|
|
|
$
|
445,235
|
|
|
$
|
450,430
|
|
|
$
|
851,855
|
|
|
$
|
645,779
|
|
|
$
|
415,075
|
|
Gross profit
|
143,023
|
|
|
270,736
|
|
|
199,551
|
|
|
127,777
|
|
|
124,801
|
|
|
248,260
|
|
|
184,288
|
|
|
118,295
|
|
||||||||
Net income
|
16,363
|
|
|
85,247
|
|
|
44,421
|
|
|
2,572
|
|
|
8,433
|
|
|
77,809
|
|
|
39,403
|
|
|
2,579
|
|
||||||||
Net income attributable to Pool Corporation
|
16,371
|
|
|
85,435
|
|
|
44,534
|
|
|
2,615
|
|
|
8,419
|
|
|
77,924
|
|
|
39,447
|
|
|
2,486
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
$
|
0.39
|
|
|
$
|
2.03
|
|
|
$
|
1.06
|
|
|
$
|
0.06
|
|
|
$
|
0.19
|
|
|
$
|
1.80
|
|
|
$
|
0.92
|
|
|
$
|
0.06
|
|
Diluted
|
$
|
0.38
|
|
|
$
|
1.98
|
|
|
$
|
1.03
|
|
|
$
|
0.06
|
|
|
$
|
0.19
|
|
|
$
|
1.75
|
|
|
$
|
0.90
|
|
|
$
|
0.06
|
|
(a)
|
The following documents are filed as part of this report:
|
(1)
|
Consolidated Financial Statements:
|
|
|
|
Page
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
(2)
|
Financial Statement Schedules.
|
|
|
|
|
|
All schedules are omitted because they are not applicable or are not required or because the required information is provided in our Consolidated Financial Statements or accompanying Notes included in Item 8 of this Form 10-K.
|
|
|
|
|
(3)
|
The exhibits listed in the Index to Exhibits.
|
|
POOL CORPORATION
|
|
|
|
|
|
|
By:
|
/s/ WILSON B. SEXTON
|
|
Wilson B. Sexton, Chairman of the Board
|
|
and Director
|
Signature:
|
Title:
|
|
|
/s/ WILSON B. SEXTON
|
|
Wilson B. Sexton
|
Chairman of the Board and Director
|
|
|
/s/ MANUEL J. PEREZ DE LA MESA
|
|
Manuel J. Perez de la Mesa
|
President, Chief Executive Officer and Director
|
|
|
/s/ MARK W. JOSLIN
|
|
Mark W. Joslin
|
Senior Vice President and Chief Financial Officer
|
|
|
/s/ MELANIE M. HOUSEY HART
|
|
Melanie M. Housey Hart
|
Corporate Controller and Chief Accounting Officer
|
|
|
/s/ ANDREW W. CODE
|
|
Andrew W. Code
|
Director
|
|
|
/s/ TIMOTHY M. GRAVEN
|
|
Timothy M. Graven
|
Director
|
|
|
/s/ HARLAN F. SEYMOUR
|
|
Harlan F. Seymour
|
Director
|
|
|
/s/ ROBERT C. SLEDD
|
|
Robert C. Sledd
|
Director
|
|
|
/s/ JOHN E. STOKELY
|
|
John E. Stokely
|
Director
|
|
|
/s/ DAVID G. WHALEN
|
|
David G. Whalen
|
Director
|
|
|
|
|
|
|
Incorporated by Reference
|
||||
No.
|
|
Description
|
|
Filed
with this
Form 10-K
|
|
Form
|
|
File No.
|
|
Date Filed
|
3.1
|
|
Restated Certificate of Incorporation of the Company.
|
|
|
|
10-Q
|
|
000-26640
|
|
08/09/2006
|
3.2
|
|
Restated Composite Bylaws of the Company.
|
|
|
|
8-K
|
|
000-26640
|
|
12/20/2012
|
4.1
|
|
Form of certificate representing shares of common stock of the Company.
|
|
|
|
8-K
|
|
000-26640
|
|
05/19/2006
|
10.1
|
*
|
Amended and Restated SCP Pool Corporation Employee Stock Purchase Plan.
|
|
|
|
8-K
|
|
000-26640
|
|
05/06/2016
|
10.2
|
*
|
Amended and Restated SCP Pool Corporation 2002 Long-Term Incentive Plan.
|
|
|
|
10-K
|
|
000-26640
|
|
03/01/2005
|
10.3
|
*
|
Form of Stock Option Agreement under 2002 Long‑Term Incentive Plan.
|
|
|
|
10-K
|
|
000-26640
|
|
03/01/2005
|
10.4
|
*
|
Pool Corporation Amended and Restated 2007 Long‑Term Incentive Plan.
|
|
|
|
8-K
|
|
000-26640
|
|
05/06/2016
|
10.5
|
*
|
Form of Stock Option Agreement for Employees under the Amended and Restated 2007 Long‑Term Incentive Plan.
|
|
|
|
10-K
|
|
000-26640
|
|
02/26/2015
|
10.6
|
*
|
Form of Performance-Based Restricted Stock Agreement under the Pool Corporation Amended and Restated 2007 Long-Term Incentive Plan
|
|
|
|
10-K
|
|
000-26640
|
|
02/26/2016
|
10.7
|
*
|
Form of Stock Option Agreement for Directors under the Amended and Restated 2007 Long‑Term Incentive Plan.
|
|
|
|
8-K
|
|
000-26640
|
|
05/06/2009
|
10.8
|
*
|
Form of Restricted Stock Agreement for Directors under the Amended and Restated 2007 Long-Term Incentive Plan.
|
|
|
|
8-K
|
|
000-26640
|
|
05/06/2009
|
10.9
|
*
|
Form of Employment Agreement.
|
|
|
|
10-K
|
|
000-26640
|
|
03/18/2003
|
10.10
|
*
|
Employment Agreement, dated January 25, 1999, among SCP Pool Corporation, South Central Pool Supply, Inc. and Manuel J. Perez de la Mesa.
|
|
|
|
10-K
|
|
000-26640
|
|
03/31/1999
|
10.11
|
*
|
Employment Agreement, dated January 17, 2003, between SCP Distributors, LLC and
A. David Cook.
|
|
|
|
10-K
|
|
000-26640
|
|
03/01/2005
|
*
|
Employment Agreement, dated December 20, 2016, between SCP Distributors, LLC and Peter D. Arvan.
|
|
X
|
|
10-K
|
|
000-26640
|
|
02/24/2017
|
|
10.13
|
*
|
Compensation of Non-Employee Directors.
|
|
|
|
10-K
|
|
000-26640
|
|
03/01/2010
|
10.14
|
*
|
Form of Indemnity Agreement for Directors and Officers.
|
|
|
|
10-Q
|
|
000-26640
|
|
10/29/2004
|
10.15
|
|
Lease Agreement (Mandeville Warehouse) entered into as of January 16, 2002, by and between S&C Development Company, LLC and SCP Distributors, LLC, as amended by First Amendment entered into as of February 11, 2002 by and between S&C Development Company, LLC and SCP Distributors, LLC,
|
|
|
|
10-Q
|
|
000-26640
|
|
07/30/2004
|
10.16
|
|
as amended by Second Amendment entered into as of January 16, 2007 by and between S&C Development Company, LLC and SCP Distributors, LLC.
|
|
|
|
10-K
|
|
000-26640
|
|
03/01/2007
|
10.17
|
|
as amended by Third Amendment entered into as of October 7, 2013 by and between S&C Development Company, LLC and SCP Distributors, LLC.
|
|
|
|
10-K
|
|
000-26640
|
|
02/27/2014
|
10.18
|
*
|
Nonqualified Deferred Compensation Plan Basic Plan Document, dated March 1, 2005.
|
|
|
|
10-Q
|
|
000-26640
|
|
04/29/2005
|
|
|
|
|
|
|
Incorporated by Reference
|
||||
No.
|
|
Description
|
|
Filed
with this
Form 10-K
|
|
Form
|
|
File No.
|
|
Date Filed
|
10.19
|
*
|
Nonqualified Deferred Compensation Plan Adoption Agreement by and among SCP Distributors, L.L.C., Superior Pool Products, L.L.C. and Cypress, Inc., dated March 1, 2005.
|
|
|
|
10-Q
|
|
000-26640
|
|
04/29/2005
|
10.20
|
|
Trust Agreement by and among SCP Distributors, L.L.C., Superior Pool Products, L.L.C. and Cypress, Inc. and T. Rowe Price Trust Company, dated March 1, 2005.
|
|
|
|
10-Q
|
|
000-26640
|
|
04/29/2005
|
10.21
|
*
|
Pool Corporation Executive Officer Annual Incentive Plan
|
|
|
|
8-K
|
|
000-26640
|
|
05/06/2016
|
10.22
|
|
Credit Agreement dated as of October 19, 2011, among Pool Corporation, as US Borrower, SCP Distributors Canada Inc., as Canadian Borrower, SCP Pool B.V., as Dutch Borrower, the Lenders, Wells Fargo Bank, National Association, as Administrative Agent, Swingline Lender and Issuing Lender, JPMorgan Chase Bank, N.A., as Syndication Agent, Wells Fargo Securities, LLC and J.P. Morgan Securities, LLC, as joint Lead Arrangers and joint Bookrunners, Bank of America, N.A., Regions Bank and Capital One, N.A., as Documentation Agents, and Branch Banking and Trust Company, Comerica Bank and Union Bank, N.A.
|
|
|
|
10-Q
|
|
000-26640
|
|
10/31/2011
|
10.23
|
|
as amended by Second Amendment entered into as of April 1, 2013.
|
|
|
|
10-Q
|
|
000-26640
|
|
07/31/2013
|
10.24
|
|
as amended by Third Amendment entered into as of June 14, 2013.
|
|
|
|
10-Q
|
|
000-26640
|
|
07/31/2013
|
10.25
|
|
as amended by Fourth Amendment to Credit Agreement and First Amendment to Subsidiary Guaranty Agreement entered into as of September 20, 2013.
|
|
|
|
8-K
|
|
000-26640
|
|
09/24/2013
|
10.26
|
|
as amended by Fifth Amendment to Credit Agreement entered into as of July 25, 2014.
|
|
|
|
10-Q
|
|
000-26640
|
|
10/30/2014
|
10.27
|
|
as amended by Sixth Amendment to Credit Agreement entered into as of November 20, 2014.
|
|
|
|
8-K
|
|
000-26640
|
|
11/25/2014
|
10.28
|
|
Consent to Extension of the Amended and Restated Credit Agreement entered into as of November 20, 2015.
|
|
|
|
8-K
|
|
000-26640
|
|
11/20/2015
|
10.29
|
*
|
Pool Corporation Strategic Plan Incentive Program.
|
|
|
|
8-K
|
|
000-26640
|
|
05/06/2016
|
10.30
|
|
Receivables Sale and Contribution Agreement, dated as of October 11, 2013, between SCP Distributors LLC, Horizon Distributors, Inc., Superior Pool Products LLC and Poolfx Supply LLC, as Originators and Superior Commerce LLC, as Buyer.
|
|
|
|
8-K
|
|
000-26640
|
|
10/17/2013
|
10.31
|
|
Receivables Purchase Agreement, dated as of October 11, 2013, among Superior Commerce LLC as Seller, SCP Distributors LLC, as the Servicer, the Purchasers from time to time thereto, The Bank of Tokyo‑Mitsubishi UFJ, Ltd., New York Branch, as the Victory Group Co-Agent and Wells Fargo Bank, National Association, as the Wells Group Co-Agent and as Administrative Agent.
|
|
|
|
8-K
|
|
000-26640
|
|
10/17/2013
|
10.32
|
|
as amended by Second Amendment to the Receivables Purchase Agreement dated as of June 25, 2014.
|
|
|
|
10-Q
|
|
000-26640
|
|
07/30/2014
|
10.33
|
|
as amended by Third Amendment to the Receivables Purchase Agreement dated as of October 24, 2014.
|
|
|
|
8-K
|
|
000-26640
|
|
10/28/2014
|
|
|
|
|
|
|
Incorporated by Reference
|
||||
No.
|
|
Description
|
|
Filed
with this
Form 10-K
|
|
Form
|
|
File No.
|
|
Date Filed
|
10.34
|
|
as amended by Fourth Amendment to the Receivables Purchase Agreement dated as of October 1, 2015.
|
|
|
|
8-K
|
|
000-26640
|
|
10/20/2015
|
10.35
|
|
as amended by Fifth Amendment to the Receivables Purchase Agreement dated as of October 15, 2015.
|
|
|
|
8-K
|
|
000-26640
|
|
10/20/2015
|
10.36
|
|
as amended by Sixth Amendment to the Receivables Purchase Agreement dated as of October 28, 2016.
|
|
|
|
8-K
|
|
000-26640
|
|
10/31/2016
|
10.37
|
|
Performance Undertaking, dated as of October 11, 2013, by and between Pool Corporation and Superior Commerce LLC.
|
|
|
|
8-K
|
|
000-26640
|
|
10/17/2013
|
|
Subsidiaries of the registrant.
|
|
X
|
|
|
|
|
|
|
|
|
Consent of Ernst & Young LLP.
|
|
X
|
|
|
|
|
|
|
|
|
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 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.
|
|
X
|
|
|
|
|
|
|
|
|
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.
|
|
X
|
|
|
|
|
|
|
|
101.INS
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XBRL Instance Document
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X
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101.SCH
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XBRL Taxonomy Extension Schema Document
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X
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101.CAL
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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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XBRL Taxonomy Extension Definition Linkbase Document
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X
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101.LAB
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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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*
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Indicates a management contract or compensatory plan or arrangement
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+
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Attached as Exhibit 101 to this report are the following items formatted in XBRL (Extensible Business Reporting Language):
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1.
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Consolidated Statements of Income for the
years ended December 31, 2016, December 31, 2015 and December 31, 2014
;
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2.
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Consolidated Statements of Comprehensive Income for the
years ended December 31, 2016, December 31, 2015 and December 31, 2014
;
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3.
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Consolidated Balance Sheets at
December 31, 2016 and December 31, 2015
;
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4.
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Consolidated Statements of Cash Flows for the
years ended December 31, 2016, December 31, 2015 and December 31, 2014
;
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5.
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Consolidated Statements of Changes in Stockholders’ Equity for the
years ended December 31, 2016, December 31, 2015 and December 31, 2014
; and
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6.
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Notes to Consolidated Financial Statements.
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A.
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Employer operates swimming pool and irrigation wholesale distribution facilities throughout the United States, Canada, Europe and other international markets. Employer is the operating company for Pool Corporation, a publicly traded company on the NASDAQ.
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B.
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Employer desires to employ Employee, pursuant to the terms of this Agreement.
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C.
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The parties desire to specify their rights and responsibilities with regards to each other by entering into this Agreement.
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3.
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COMPENSATION
.
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9.
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TERMINATION
.
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EMPLOYER
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EMPLOYEE
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SCP DISTRIBUTORS, LLC.
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By: /s/ Manuel J. Perez de la Mesa
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By: /s/ Peter D. Arvan
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Manuel J. Perez de la Mesa
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Peter D. Arvan
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Subsidiary
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State or Jurisdiction of
Incorporation or Organization
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SCP Distributors LLC
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Delaware
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Superior Commerce LLC
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Delaware
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Splash Holdings, Inc.
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Delaware
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Alliance Trading, Inc.
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Delaware
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SCP Acquisition Co. LLC
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Delaware
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Superior Pool Products LLC
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Delaware
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SCP International, Inc.
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Delaware
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Pool Development LLC
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Delaware
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Horizon Distributors, Inc.
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Delaware
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POOLCORP Financial Inc.
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Delaware
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POOLCORP Financial Mortgage LLC
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Delaware
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Poolfx Supply LLC
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Delaware
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Cypress, Inc.
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Nevada
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SCP Pool Holdings B.V.
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Netherlands
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SCP Pool B.V.
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Netherlands
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SCP (UK) Holdings Limited
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United Kingdom
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SCP (UK) Limited
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United Kingdom
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Garden Leisure Products Limited
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United Kingdom
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The Swimming Pool Warehouse Limited
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United Kingdom
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Cascade Swimming Pools Limited
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United Kingdom
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Norcal Pool Supplies Limited
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United Kingdom
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SCP Pool Portugal LDA
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Portugal
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SCP Pool Distributors Spain S.L.U.
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Spain
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SCP Europe SAS
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France
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SCP France SAS
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France
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SCP Italy S.r.l.
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Italy
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SCP Benelux SA
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Belgium
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SCP Germany GmbH
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Germany
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SCP Distributors Canada Inc.
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Ontario
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SCP Mexico S.A. de C.V.
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Mexico
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Pool Distributors Colombia S.A.S.
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Colombia
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Pool Systems Pty. Ltd.
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Australia
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1.
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I have reviewed this annual report on Form 10-K 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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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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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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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: February 24, 2017
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/s/ MARK W. JOSLIN
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Mark W. Joslin
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Senior Vice President and Chief Financial Officer
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1.
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I have reviewed this annual report on Form 10-K 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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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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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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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: February 24, 2017
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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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Senior Vice President and Chief Financial Officer
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