pool-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to


POOL CORPORATION
(Exact name of registrant as specified in its charter)

Delaware		0-26640	36-3943363
(State or other jurisdiction		(Commission File Number)	(I.R.S. Employer
of incorporation)			Identification No.)

109 Northpark Boulevard,
Covington,	Louisiana		70433-5001
(Address of principal executive			(Zip Code)
offices)

(985) 892-5521

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	POOL	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of October 24, 2024, there were 38,055,527 shares of common stock outstanding.

POOL CORPORATION

Form 10-Q

For the Quarter Ended September 30, 2024

TABLE OF CONTENTS



			Page
PART I. FINANCIAL INFORMATION

	Item 1. Financial Statements (Unaudited)

		Consolidated Statements of Income	1
		Consolidated Statements of Comprehensive Income	2
		Consolidated Balance Sheets	3
		Condensed Consolidated Statements of Cash Flows	4
		Consolidated Statements of Changes in Stockholders’ Equity	5
		Notes to Consolidated Financial Statements	7

	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		15

	Item 3. Quantitative and Qualitative Disclosures about Market Risk		29

	Item 4. Controls and Procedures		29

PART II. OTHER INFORMATION

	Item 1. Legal Proceedings		30

	Item 1A. Risk Factors		30

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		30

	Item 5. Other Information		30

	Item 6. Exhibits		31

SIGNATURE			33

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

POOL CORPORATION

Consolidated Statements of Income

(Unaudited)

(In thousands, except per share data)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Net sales	$	1,432,879	$	1,474,407	$	4,323,474	$	4,538,545
Cost of sales	1,016,476		1,045,676		3,038,370		3,172,276
Gross profit	416,403		428,731		1,285,104		1,366,269
Selling and administrative expenses	240,050		234,288		728,550		699,046

Operating income	176,353		194,443		556,554		667,223
Interest and other non-operating expenses, net	12,355		13,599		39,818		46,327
Income before income taxes and equity in earnings	163,998		180,844		516,736		620,896
Provision for income taxes	38,361		43,079		119,891		149,339
Equity in earnings of unconsolidated investments, net	64		78		180		235


Net income	$	125,701	$	137,843	$	397,025	$	471,792


Earnings per share attributable to common stockholders:
Basic	$	3.29	$	3.54	$	10.37	$	12.09
Diluted	$	3.27	$	3.51	$	10.30	$	12.00
Weighted average common shares outstanding:
Basic	37,983		38,735		38,104		38,816
Diluted	38,187		39,023		38,330		39,112

Cash dividends declared per common share	$	1.20	$	1.10	$	3.50	$	3.20

The accompanying Notes are an integral part of the Consolidated Financial Statements.

POOL CORPORATION

Consolidated Statements of Comprehensive Income

(Unaudited)

(In thousands)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Net income	$	125,701	$	137,843	$	397,025	$	471,792
Other comprehensive income (loss):
Foreign currency translation gain (loss)	5,066		(5,025)		(3,286)		245
Unrealized (loss) gain on interest rate swaps, net of the change in taxes of $2,192, $(305), $1,909 and $(202)	(6,577)		916		(5,727)		604
Total other comprehensive (loss) income	(1,511)		(4,109)		(9,013)		849
Comprehensive income	$	124,190	$	133,734	$	388,012	$	472,641

The accompanying Notes are an integral part of the Consolidated Financial Statements.

POOL CORPORATION

Consolidated Balance Sheets

(In thousands, except share data)


	September 30,		September 30,		December 31,
	2024		2023		2023
	(Unaudited)		(Unaudited)		(Audited)
Assets
Current assets:
Cash and cash equivalents	$	91,347	$	85,220	$	66,540
Receivables, net	119,538		140,997		145,723
Receivables pledged under receivables facility	306,155		320,585		197,187
Product inventories, net	1,180,491		1,259,308		1,365,466
Prepaid expenses and other current assets	43,168		26,414		40,444
Total current assets	1,740,699		1,832,524		1,815,360

Property and equipment, net	243,308		213,732		223,929
Goodwill	700,147		699,270		700,078
Other intangible assets, net	292,722		300,237		298,282
Equity interest investments	1,434		1,383		1,305
Operating lease assets	309,648		293,673		305,688
Other assets	79,431		89,915		83,426
Total assets	$	3,367,389	$	3,430,734	$	3,428,068

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	401,702	$	429,436	$	508,672
Accrued expenses and other current liabilities	185,118		157,172		134,676
Short-term borrowings and current portion of long-term debt	44,683		37,788		38,203
Current operating lease liabilities	95,412		84,724		89,215
Total current liabilities	726,915		709,120		770,766

Deferred income taxes	65,106		55,226		67,421
Long-term debt, net	879,146		996,109		1,015,117
Other long-term liabilities	43,612		37,885		40,028
Non-current operating lease liabilities	220,101		214,168		221,949
Total liabilities	1,934,880		2,012,508		2,115,281



Stockholders’ equity:
Common stock, 0.001 par value; 100,000,000 shares authorized; 38,083,401, 38,676,960 and 38,354,829 shares issued and outstanding at September 30, 2024, September 30, 2023 and December 31, 2023, respectively	38		39		38
Additional paid-in capital	632,523		600,009		606,177
Retained earnings	802,379		811,434		699,990
Accumulated other comprehensive (loss) income	(2,431)		6,744		6,582
Total stockholders’ equity	1,432,509		1,418,226		1,312,787
Total liabilities and stockholders’ equity	$	3,367,389	$	3,430,734	$	3,428,068

The accompanying Notes are an integral part of the Consolidated Financial Statements.

POOL CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)


	Nine Months Ended
	September 30,
	2024		2023
Operating activities
Net income	$	397,025	$	471,792
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	26,848		23,355
Amortization	6,514		6,425
Share-based compensation	14,391		14,592

Equity in earnings of unconsolidated investments, net	(180)		(235)
Goodwill impairment	—		550
Other	3,123		1,157
Changes in operating assets and liabilities, net of effects of acquisitions:
Receivables	(80,362)		(110,078)
Product inventories	181,326		330,850
Prepaid expenses and other assets	57,151		(23,431)
Accounts payable	(109,021)		20,667
Accrued expenses and other liabilities	(8,196)		14,374
Net cash provided by operating activities	488,619		750,018

Investing activities
Acquisition of businesses, net of cash acquired	(4,435)		(11,500)
Purchases of property and equipment, net of sale proceeds	(45,951)		(42,958)


Other investments, net	944		(48)
Net cash used in investing activities	(49,442)		(54,506)

Financing activities
Proceeds from revolving line of credit	1,146,900		1,154,601
Payments on revolving line of credit	(1,274,400)		(1,497,501)

Payments on term loan under credit facility	(18,750)		(6,250)
Proceeds from asset-backed financing	623,900		465,500
Payments on asset-backed financing	(606,300)		(422,700)
Payments on term facility	—		(47,313)
Proceeds from short-term borrowings and current portion of long-term debt	8,873		19,428
Payments on short-term borrowings and current portion of long-term debt	(8,643)		(19,182)
Payments of deferred financing costs	(1,731)		(52)
Payments of deferred and contingent acquisition consideration	—		(551)


Proceeds from stock issued under share-based compensation plans	11,955		9,278
Payments of cash dividends	(134,181)		(124,983)
Repurchases of common stock	(159,408)		(187,110)
Net cash used in financing activities	(411,785)		(656,835)
Effect of exchange rate changes on cash and cash equivalents	(2,585)		952
Change in cash and cash equivalents	24,807		39,629
Cash and cash equivalents at beginning of period	66,540		45,591
Cash and cash equivalents at end of period	$	91,347	$	85,220

The accompanying Notes are an integral part of the Consolidated Financial Statements.

POOL CORPORATION

Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

(In thousands)


	Common Stock			Additional Paid-In		Retained		Accumulated Other Comprehensive
	Shares	Amount		Capital		Earnings		Income (Loss)		Total
Balance at December 31, 2023	38,355	$	38	$	606,177	$	699,990	$	6,582	$	1,312,787
Net income	—	—		—		78,885		—		78,885
Foreign currency translation	—	—		—		—		(3,668)		(3,668)
Interest rate swaps, net of the change in taxes of $(742)	—	—		—		—		2,226		2,226
Repurchases of common stock, net of retirements	(41)	—		—		(16,304)		—		(16,304)
Share-based compensation	—	—		5,328		—		—		5,328
Issuance of stock under share-based compensation plans	148	—		8,773		—		—		8,773
Declaration of cash dividends	—	—		—		(42,343)		—		(42,343)
Balance at March 31, 2024	38,462	$	38	$	620,278	$	720,228	$	5,140	$	1,345,684
Net income	—	—		—		192,439		—		192,439
Foreign currency translation	—	—		—		—		(4,684)		(4,684)
Interest rate swaps, net of the change in taxes of $459	—	—		—		—		(1,376)		(1,376)
Repurchases of common stock, net of retirements	(181)	—		—		(68,519)		—		(68,519)
Share-based compensation	—	—		5,016		—		—		5,016
Issuance of stock under share-based compensation plans	8	—		1,053		—		—		1,053
Declaration of cash dividends	—	—		—		(45,944)		—		(45,944)

Balance at June 30, 2024	38,289	$	38	$	626,347	$	798,204	$	(920)	$	1,423,669
Net income	—	—		—		125,701		—		125,701
Foreign currency translation	—	—		—		—		5,066		5,066
Interest rate swaps, net of the change in taxes of $2,192	—	—		—		—		(6,577)		(6,577)
Repurchases of common stock, net of retirements	(219)	—		—		(75,632)		—		(75,632)
Share-based compensation	—	—		4,047		—		—		4,047
Issuance of stock under share-based compensation plans	13	—		2,129		—		—		2,129
Declaration of cash dividends	—	—		—		(45,894)		—		(45,894)
Balance at September 30, 2024	38,083	$	38	$	632,523	$	802,379	$	(2,431)	$	1,432,509


	Common Stock			Additional Paid-In		Retained		Accumulated Other Comprehensive
	Shares	Amount		Capital		Earnings		Income (Loss)		Total
Balance at December 31, 2022	39,069	$	39	$	575,776	$	653,484	$	5,895	$	1,235,194
Net income

SEC Form 10-Q filed by Pool Corporation