8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported) July 20, 2006

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

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

109 Northpark Boulevard, Covington, Louisiana      70433-5001
    (Address of Principal Executive Offices)                  (Zip Code)

Registrant’s telephone number, including area code      (985) 892-5521

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.  

The following information is being provided under Form 8-K Item 2.02 and should not be deemed incorporated by reference by any general statement incorporating by reference this Current Report on Form 8-K into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates this information by reference, and none of this information should be deemed “filed” under such acts.

On July 20, 2006, Pool Corporation, a Delaware corporation, issued a press release announcing its second quarter 2006 earnings results.

A copy of the press release is included herein as Exhibit 99.1.

Item 7.01 Regulation FD Disclosure.  

On July 20, 2006, Pool Corporation issued the press release included herein as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

    (d) Exhibits

99.1   Press release issued by Pool Corporation on July 20, 2006, announcing its second quarter 2006 earnings results.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

POOL CORPORATION

By:       /s/ Mark W. Joslin

            Mark W. Joslin

            Vice President and Chief Financial Officer

Dated: July 20, 2006

EX-99

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

POOL CORPORATION REPORTS RECORD SECOND QUARTER RESULTS

_________________

EARNINGS PER SHARE GROWS BY 23%

COVINGTON, La. (July 20, 2006) – Pool Corporation (the “Company” or “POOL”) (Nasdaq/GSM:POOL) today reported record sales and net income for the second quarter of 2006.

Earnings per share for the second quarter of 2006 increased 23% to $1.12 per diluted share on net income of $62.1 million, compared to $0.91 per diluted share on net income of $50.7 million last year.

Net sales for the quarter ended June 30, 2006 increased $141.7 million, or 25%, to $705.7 million, compared to $564.0 million in the second quarter of 2005. Base business sales growth of 13% contributed $70.5 million to the increase due to the growth in the installed base of pools, market share gains, price inflation and the continued expansion of complementary product sales, which increased 23% over the second quarter of 2005. Much of the remaining increase in net sales is attributable to the acquisition of the Horizon business.

Gross profit for the second quarter of 2006 increased $46.3 million, or 29%, to $209.0 million from $162.7 million in the comparable 2005 period. Gross profit as a percentage of net sales (gross margin) was 29.6% for the second quarter of 2006 compared to 28.8% for the second quarter of 2005. Base business gross margins of 29.6% improved by 80 basis points over 2005. This gross margin improvement was achieved primarily through supply chain management initiatives including favorable sales mix from focus on higher margin products and the benefits of forward inventory purchases.

Operating expenses increased $24.4 million, or 30%, to $105.7 million in the second quarter of 2006 from $81.3 million in the second quarter of 2005. Base business operating expenses were relatively consistent as a percent of sales quarter over quarter.

Operating income increased $21.9 million, or 27%, to $103.3 million from $81.4 million. Operating income as a percentage of net sales (operating margin) increased to 14.6% from 14.4% in 2005. Base business operating margin increased to 15.0% of net sales, an improvement of 60 basis points over 2005.

Interest expense increased to $3.9 million for the current quarter from $1.9 million in the second quarter of 2005. This increase is attributable to higher debt levels due to funding the Horizon acquisition, forward inventory buys and second quarter share repurchases, coupled with higher interest rates.

“The second quarter provided another solid financial performance that reflects the continued success of our strategic initiatives. These strong results, combined with our recent share repurchases and increased quarterly dividend, demonstrate a comprehensive approach to creating tangible value for our shareholders,” commented Manuel Perez de la Mesa, President and CEO.

Net sales for the six months ended June 30, 2006 increased $225.2 million, or 27%, to $1,054.3 million, compared to $829.1 million in the comparable 2005 period. Base business sales increased 13%, which included growth in complementary product sales of 27% over the first six months of 2005. Gross margin increased 80 basis points to 29.1% in the first half of 2006 from 28.3% for the same period last year.

Operating income for the first six months of 2006 increased 29% to $118.4 million, or 11.2% of net sales, compared to operating income of $91.6 million, or 11.1% of net sales, in the same period last year. Base business operating margin increased 70 basis points for the year, while base business operating earnings grew by 20%. Earnings per share for the first six months of 2006 increased 24% to $1.23 per diluted share on net income of $68.5 million, compared to $0.99 per diluted share on net income of $54.8 million in the comparable 2005 period.

Pool Reports Record Second Quarter Results
Page 2
July 20, 2006

The use of cash in operations decreased $1.8 million to $49.2 million in the first six months of 2006 compared to $51.0 million in the same period in 2005. Also during the quarter the Company repurchased 1.0 million shares of its common stock, using $43.8 million in borrowing capacity to fund these purchases.

The Company has adjusted prior period financial statements to reflect the impact of share-based compensation and provide a consistent quarter-to-quarter comparison of financial results. Therefore, the results for all periods presented above include the effects of stock option expense.

Pool Corporation is the largest wholesale distributor of swimming pool and related backyard products. Currently, POOL operates 258 sales centers in North America and Europe, through which it distributes more than 100,000 national brand and private label products to roughly 68,000 wholesale customers. For more information about POOL, please visit www.poolcorp.com.

This news release may include “forward-looking” statements that involve risk and uncertainties. The forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially due to a variety of factors, including the sensitivity of the swimming pool supply business to weather conditions and other risks detailed in POOL’s 2005 Form 10-K filed with the Securities and Exchange Commission.

CONTACT:

Craig K. Hubbard
Treasurer
985.801.5117
craig.hubbard@poolcorp.com

Pool Reports Record Second Quarter Results
Page 3
July 20, 2006

POOL CORPORATION
Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2006			2005*			2006			2005*
Net sales	$	705,703		$	563,978		$	1,054,259		$	829,139
Cost of sales		496,703			401,297			747,211			594,507
Gross profit		209,000			162,681			307,048			234,632
Percent		29.6	%		28.8	%		29.1	%		28.3	%
Selling and administrative expenses		105,662			81,292			188,688			142,987
Operating income		103,338			81,389			118,360			91,645
Percent		14.6	%		14.4	%		11.2	%		11.1	%
Interest expense, net		3,856			1,905			6,707			2,985
Income before income taxes and equity earnings (loss)		99,482			79,484			111,653			88,660
Provision for income taxes		38,410			30,717			43,109			34,309
Equity earnings (loss) in unconsolidated interests		1,038			1,942			(12	)		460
Net income	$	62,110		$	50,709		$	68,532		$	54,811
Earnings per share:
Basic	$	1.18		$	0.97		$	1.30		$	1.05
Diluted	$	1.12		$	0.91		$	1.23		$	0.99
Weighted average shares outstanding:
Basic		52,608			52,491			52,602			52,383
Diluted		55,544			55,782			55,499			55,633
Cash dividends declared per common share	$	0.105		$	0.090		$	0.195		$	0.160

      *   As adjusted to reflect the impact of share-based compensation expense related to the adoption of SFAS 123(R) using the modified retrospective transition method.

Pool Reports Record Second Quarter Results
Page 4
July 20, 2006

POOL CORPORATION
Consolidated Balance Sheets
(Unaudited)
(In thousands, except share data)

	June 30,		June 30,
	2006		2005*
Assets
Current assets:
Cash and cash equivalents	$	32,507	$	36,652
Receivables, net		76,407		59,540
Receivables pledged under receivables facility		219,315		172,196
Product inventories, net		367,096		247,350
Prepaid expenses		8,493		4,466
Deferred income taxes		4,004		4,395
Total current assets		707,822		524,599
Property and equipment, net		30,289		21,761
Goodwill		142,177		104,602
Other intangible assets, net		17,933		10,826
Equity interest investments		29,882		20,197
Other assets, net		12,561		10,833
Total assets	$	940,664	$	692,818
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	207,727	$	165,872
Accrued and other current liabilities		101,300		57,997
Short-term financing		150,000		100,000
Current portion of other long-term liabilities		2,850		1,350
Total current liabilities		461,877		325,219
Deferred income taxes		14,048		13,123
Long-term debt		151,500		70,191
Other long-term liabilities		2,268		3,202
Total liabilities		629,693		411,735
Total stockholders' equity		310,971		281,083
Total liabilities and stockholders' equity	$	940,664	$	692,818

      *   As adjusted to reflect the impact of share-based compensation expense related to the adoption of SFAS 123(R) using the modified retrospective transition method.

_________________

1. The allowance for doubtful accounts (AFDA) was $4.2 million at June 30, 2006 and $3.0 million at June 30, 2005.

2. The inventory reserve was $4.9 million, or 1.3% of total inventory at June 30, 2006 and $4.1 million, or 1.6% of total inventory at June 30, 2005. The slowest moving class of inventory as a percentage of total inventory increased slightly between periods.

Pool Reports Record Second Quarter Results
Page 5
July 20, 2006

POOL CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)

	Six Months Ended
	June 30,
	2006			2005*
Operating activities
Net income	$	68,532		$	54,811
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation		3,833			2,444
Amortization		2,398			1,868
Share-based compensation		4,007			3,007
Excess tax benefit from share-based compensation		(9,363	)		(5,554	)
Equity losses (earnings) in unconsolidated investments		25			(460	)
Other		99			(865	)
Changes in operating assets and liabilities, net of effects of acquisitions:
Receivables		(153,883	)		(134,018	)
Product inventories		(37,531	)		(52,530	)
Accounts payable		33,541			52,758
Other current assets and liabilities		39,137			27,531
Net cash used in operating activities		(49,205	)		(51,008	)
Investing activities
Acquisition of businesses		(1,446	)		(3	)
Equity interest investment		--			(1,121	)
Purchase of property and equipment, net of sale proceeds		(7,723	)		(5,575	)
Net cash used in investing activities		(9,169	)		(6,699	)
Financing activities
Proceeds from revolving line of credit		177,038			147,238
Payments on revolving line of credit		(153,138	)		(127,467	)
Proceeds from asset-backed financing		93,347			62,170
Payments on asset-backed financing		(9,004	)		(4,765	)
Payments on other long-term debt		(47	)		(47	)
Payments of capital lease obligations		(257	)		--
Payments of deferred financing costs		(18	)		(11	)
Excess tax benefits from share-based compensation		9,363			5,554
Issuance of common stock under stock option plans		4,513			1,885
Payment of cash dividends		(10,290	)		(8,401	)
Purchase of treasury stock		(48,423	)		(3,072	)
Net cash provided by financing activities		63,084			73,084
Effect of exchange rate changes on cash		931			(487	)
Change in cash and cash equivalents		5,641			14,890
Cash and cash equivalents at beginning of period		26,866			21,762
Cash and cash equivalents at end of period	$	32,507		$	36,652

      *   As adjusted to reflect the impact of share-based compensation expense related to the adoption of SFAS 123(R) using the modified retrospective transition method.

Pool Reports Record Second Quarter Results
Page 6
July 20, 2006

Addendum

(Unaudited)	Base Business						Acquired					Total
(In thousands)	Three Months Ended						Three Months Ended					Three Months Ended
	June 30,						June 30,					June 30,
	2006			2005			2006			2005		2006			2005
Net sales	$	634,489		$	563,978		$	71,214		$	--	$	705,703		$	563,978
Gross profit		187,554			162,681			21,446			--		209,000			162,681
Gross margin		29.6	%		28.8	%		30.1	%				29.6	%		28.8	%
Selling and operating expenses		92,286			81,292			13,376			--		105,662			81,292
Expenses as a % of net sales		14.6	%		14.4	%		18.8	%				15.0	%		14.4	%
Operating income		95,268			81,388			8,070			--		103,338			81,389
Operating income margin		15.0	%		14.4	%		11.3	%				14.6	%		14.4	%

(Unaudited)	Base Business						Acquired						Total
(In thousands)	Six Months Ended						Six Months Ended						Six Months Ended
	June 30,						June 30,						June 30,
	2006			2005			2006			2005			2006			2005
Net sales	$	936,674		$	827,345		$	117,585		$	1,794		$	1,054,259		$	829,139
Gross profit		272,907			234,137			34,141			495			307,048			234,632
Gross margin		29.1	%		28.3	%		29.0	%		27.6	%		29.1	%		28.3	%
Selling and operating expenses		162,857			142,430			25,831			557			188,688			142,987
Expenses as a % of net sales		17.4	%		17.2	%		22.0	%		31.0	%		17.9	%		17.2	%
Operating income (loss)		110,050			91,707			8,310			(62	)		118,360			91,645
Operating income (loss) margin		11.8	%		11.1	%		7.1	%		(3.5	)%		11.2	%		11.1	%

We exclude the following sales centers from base business for 15 months:

• acquired sales centers;

• sales centers divested or consolidated with acquired sales centers; and

• new sales centers opened in new markets.

Additionally, we generally allocate overhead expenses to acquired sales centers on the basis of acquired sales center net sales as a percentage of total net sales.

The effect of sales center acquisitions in the tables above includes the operations of the following:

• B&B s.r.l (Busatta) - January through June 2006

• Direct Replacements, Inc. - January through June 2006

• Horizon Distributors, Inc. - January through June 2006

Pool Reports Record Second Quarter Results
Page 7
July 20, 2006

EBITDA is defined as net income plus interest expense, income taxes, depreciation and amortization. We consider EBITDA an important indicator of the operational strength and performance of our business, including the ability to provide cash flows to fund growth, service debt and pay dividends. EBITDA eliminates the non-cash depreciation of tangible assets and amortization of intangible assets. We believe EBITDA should be considered in addition to, not as a substitute for, operating income, net income and other measures of financial performance reported in accordance with accounting principles generally accepted in the United States (GAAP).

The table below presents a reconciliation of net income to EBITDA.

(Unaudited)	Three Months Ended				Six Months Ended
(In thousands)	June 30,				June 30,
	2006		2005		2006			2005
Net income	$	62,110	$	50,709	$	68,532		$	54,811
Add:
Interest expense, net		3,856		1,905		6,707			2,985
Provision for income taxes		38,410		30,717		43,109			34,309
Income tax expense (benefit) on equity earnings (loss)		662		--		(13	)		--
Depreciation		1,973		1,248		3,833			2,444
Amortization (1)		1,124		1,012		2,482			2,027
EBITDA	$	108,135	$	85,591	$	124,650		$	96,576

    ⁽¹⁾        Excludes amortization included in interest expense, net