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) October 23, 2008

______________

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)	(I.R.S. 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 obligations 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 October 23, 2008, Pool Corporation, a Delaware corporation, issued a press release announcing its third quarter 2008 earnings results and providing fourth quarter 2008 earnings guidance.

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

Item 7.01 Regulation FD Disclosure.  

On October 23, 2008, Pool Corporation issued a 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 October 23, 2008, announcing its third quarter 2008 earnings results and providing fourth quarter 2008 earnings guidance.

SIGNATURE

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: October 23, 2008

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

POOL CORPORATION REPORTS HIGHER THIRD QUARTER EARNINGS AND CASH FLOW

______________________

PROVIDES FOURTH QUARTER EARNINGS GUIDANCE

COVINGTON, LA. (October 23, 2008) – Pool Corporation (NASDAQ/GSM:POOL) today reported results for the third quarter of 2008.

“Our ongoing efforts to improve profitability and control expenses are evident in our results.  We are also pleased with our momentum in increasing our market share, as our focus on operating in a disciplined manner and continually providing exceptional value to both our customers and our suppliers has helped counter the effects of the unprecedented external market environment,” commented Manuel Perez de la Mesa, President and CEO.

Net sales for the quarter ended September 30, 2008 decreased 6% to $493.5 million, compared to $527.4 million in the third quarter of 2007.  Base business sales declined 8% due to the continued drop-off in new pool and irrigation construction activity and unfavorable weather.  This reduction was partially offset by sales from acquired businesses and an increase in maintenance, repair and replacement product sales.  During the quarter, complementary product sales were down approximately 12% compared to a 5% decrease in the same period in 2007.

Gross profit for the third quarter of 2008 increased $2.0 million, or 1%, to $141.8 million from $139.8 million in the comparable 2007 period.  Gross profit as a percentage of net sales (gross margin) improved to 28.7% in the third quarter of 2008 from 26.5% for the third quarter of 2007.  The increase in gross margin is attributable to improved pricing management, a favorable shift in sales mix to products in the higher margin maintenance market, an increase in sales of Pool Corporation brands and benefits from inflationary price increases.

Operating expenses increased $2.9 million, or 3%, to $103.2 million in the third quarter of 2008 from $100.3 million in the third quarter of 2007.  This increase was due to operating expenses related to acquired businesses.  Base business operating expenses decreased 1% quarter over quarter.

Operating income decreased $0.9 million, or 2%, to $38.6 million from $39.5 million.  Operating income as a percentage of net sales (operating margin) was up slightly to 7.8% for the current quarter, compared to 7.5% for the third quarter of 2007.  Interest expense decreased 28% during the quarter due to a lower weighted average effective interest rate and lower average debt levels compared to the third quarter of 2007.  Earnings per share for the third quarter of 2008 increased to $0.45 per diluted share on net income of $22.1 million, compared to $0.43 per diluted share on net income of $21.8 million for the third quarter of 2007.

Net sales for the nine months ended September 30, 2008 decreased 6% to $1,524.7 million, compared to $1,627.6 million in the comparable 2007 period.  Base business sales declined 8% for the first nine months of 2008.  Year to date, complementary product sales were down approximately 13% due to the decline in new pool and irrigation construction activity.  Gross margin increased 120 basis points to 28.9% in the first nine months of 2008 from 27.7% for the same period last year.

Operating income for the first nine months of 2008 decreased 11% to $130.8 million compared to $146.6 million in the same period last year.  Operating margin was 8.6% for the first nine months of 2008 compared to 9.0% for the first nine months of 2007.  Earnings per share for the first nine months of 2008 decreased to $1.47 per diluted share on net income of $71.8 million, compared to $1.58 per diluted share on net income of $81.0 million in the comparable 2007 period.

“Given the weak external market environment and our prudent credit management practices, we are updating our annual earnings guidance and project fourth quarter earnings per diluted share to be similar to fourth quarter 2007,” said Perez de la Mesa.

On the balance sheet, total net receivables decreased 11% compared to September 30, 2007 due to lower sales and focused collection efforts.  Inventory levels increased 9% to $345.9 million at September 30, 2008.  Excluding acquired inventories of approximately $17.9 million, inventories increased approximately 3% year over year.

Cash provided by operations increased $43.0 million to $76.5 million in the first nine months of 2008 due to the deferral of a $28.0 million third quarter 2008 estimated federal tax payment as allowed by the Internal Revenue Service for taxpayers affected by Hurricane Gustav and favorable impacts from changes in working capital balances that more than offset the reduction in net income.  Adjusted EBITDA (as defined in the addendum to this release) was $46.0 million in the third quarter of 2008 compared to $47.0 million in the third quarter of 2007 and $148.0 million for the nine months ended September 30, 2008 compared to $164.6 million for the nine months ended September 30, 2007.

Pool Corporation is the largest wholesale distributor of swimming pool and related backyard products.  Currently, POOL operates 288 sales centers in North America and Europe, through which it distributes more than 100,000 national brand and private label products to roughly 70,000 wholesale customers.  For more information about POOL, please visit www.poolcorp.com.

This news release includes “forward-looking” statements that involve risk and uncertainties that are generally identifiable through the use of words such as “believe,” “expect,” “intend,” “plan,” “estimate,” “project” and similar expressions and include projections of earnings.  The forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements speak only as of the date of this release, and we undertake no obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur.  Actual results may differ materially due to a variety of factors, including the sensitivity of our business to weather conditions, our ability to maintain favorable relationships with suppliers and manufacturers, competition from other leisure product alternatives and mass merchants, changes in the economy and the housing market and other risks detailed in POOL’s 2007 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.

CONTACT:

Craig K. Hubbard

Investor Relations

985.801.5117

craig.hubbard@poolcorp.com

2

POOL CORPORATION

Consolidated Statements of Income

(Unaudited)

(In thousands, except per share data)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2008			2007			2008			2007
Net sales	$	493,530		$	527,434		$	1,524,717		$	1,627,612
Cost of sales		351,730			387,631			1,084,811			1,176,402
Gross profit		141,800			139,803			439,906			451,210
Percent		28.7	%		26.5	%		28.9	%		27.7	%
Selling and administrative expenses		103,183			100,298			309,102			304,640
Operating income		38,617			39,505			130,804			146,570
Percent		7.8	%		7.5	%		8.6	%		9.0	%
Interest expense, net		4,589			6,349			14,700			16,765
Income before income taxes and equity earnings		34,028			33,156			116,104			129,805
Provision for income taxes		13,675			12,802			45,397			50,118
Equity earnings in unconsolidated investments, net		1,707			1,481			1,044			1,296
Net income	$	22,060		$	21,835		$	71,751		$	80,983
Earnings per share:
Basic	$	0.46		$	0.45		$	1.50		$	1.64
Diluted	$	0.45		$	0.43		$	1.47		$	1.58
Weighted average shares outstanding:
Basic		47,824			48,623			47,694			49,372
Diluted		49,060			50,490			48,735			51,347
Cash dividends declared per common share	$	0.13		$	0.12		$	0.38		$	0.345

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POOL CORPORATION

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

			September 30,		September 30,		Change
			2008		2007		$		%
Assets
Current assets:
	Cash and cash equivalents	$	25,278	$	50,265	$	(24,987	)	(50	)%
	Receivables, net		45,426		58,023		(12,597	)	(22	)
	Receivables pledged under receivables facility		133,501		142,511		(9,010	)	(6	)
	Product inventories, net		345,944		317,110		28,834		9
	Prepaid expenses and other current assets		7,915		9,004		(1,089	)	(12	)
	Deferred income taxes		9,139		7,652		1,487		19
Total current assets			567,203		584,565		(17,362	)	(3	)
Property and equipment, net			32,895		35,518		(2,623	)	(7	)
Goodwill			167,376		155,247		12,129		8
Other intangible assets, net			13,519		15,459		(1,940	)	(13	)
Equity interest investments			35,592		34,561		1,031		3
Other assets, net			25,299		19,073		6,226		33
Total assets		$	841,884	$	844,423	$	(2,539	)	(0	)%
Liabilities and stockholders’ equity
Current liabilities:
	Accounts payable	$	128,329	$	127,889	$	440		0	%
	Accrued and other current liabilities		80,636		53,557		27,079		51
	Short-term financing		58,392		110,715		(52,323	)	(47	)
	Current portion of long-term debt and other long-term liabilities		5,369		3,350		2,019		60
Total current liabilities			272,726		295,511		(22,785	)	(8	)
Deferred income taxes			18,608		15,185		3,423		23
Long-term debt			274,100		292,750		(18,650	)	(6	)
Other long-term liabilities			6,225		6,152		73		1
Total liabilities			571,659		609,598		(37,939	)	(6	)
Total stockholders’ equity			270,225		234,825		35,400		15
Total liabilities and stockholders’ equity		$	841,884	$	844,423	$	(2,539	)	(0	)%

__________________

1.   Total receivables at September 30, 2008 include approximately $4.2 million of acquired receivables, primarily from the acquisition of National Pool Tile (NPT).  The allowance for doubtful accounts was $10.6 million at September 30, 2008 and $8.7 million at September 30, 2007, with $0.6 million of the September 30, 2008 balance related to the acquisition of NPT.

2.   Total product inventories at September 30, 2008 include approximately $17.9 million of acquired inventories, primarily from the acquisition of NPT.  The inventory reserve was $8.7 million at September 30, 2008 and $5.4 million at September 30, 2007, with $1.2 million of the September 30, 2008 balance related to the acquisition of NPT.

4

POOL CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

		Nine Months Ended September 30,
		2008		2007			Change
Operating activities
Net income		$	71,751	$	80,983		$	(9,232	)
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation		7,182		6,868			314
	Amortization		3,196		3,665			(469	)
	Share-based compensation		5,493		5,564			(71	)
	Excess tax benefits from share-based compensation		(2,452	)	(8,345	)		5,893
	Equity earnings in unconsolidated investments		(1,635	)	(2,087	)		452
	Other		1,393		3,476			(2,083	)
Changes in operating assets and liabilities, net of effects of acquisitions:
	Receivables		(33,908	)	(49,373	)		15,465
	Product inventories		47,545		14,580			32,965
	Accounts payable		(67,940	)	(49,743	)		(18,197	)
	Other current assets and liabilities		45,910		27,927			17,983
Net cash provided by operating activities			76,535		33,515			43,020
Investing activities
Acquisition of businesses, net of cash acquired			(32,891	)	(2,087	)		(30,804	)
Divestiture of business			1,165		—			1,165
Purchase of property and equipment, net of sale proceeds			(4,999	)	(9,407	)		4,408
Proceeds from sale of investment			­—		75			(75	)
Net cash used in investing activities			(36,725	)	(11,419	)		(25,306	)
Financing activities
Proceeds from revolving line of credit			276,826		306,771			(29,945	)
Payments on revolving line of credit			(277,751	)	(299,928	)		22,177
Proceeds from asset-backed financing			73,335		87,479			(14,144	)
Payments on asset-backed financing			(83,270	)	(51,050	)		(32,220	)
Proceeds from long-term debt			—		100,000			(100,000	)
Payments on long-term debt and other long-term liabilities			(2,385	)	(3,320	)		935
Payments of capital lease obligations			(251	)	(257	)		6
Payments of deferred financing costs			(22	)	(397	)		375
Excess tax benefits from share-based compensation			2,452		8,345			(5,893	)
Issuance of common stock under stock option plans			3,736		7,154			(3,418	)
Payments of cash dividends			(18,187	)	(17,033	)		(1,154	)
Purchases of treasury stock			(3,244	)	(128,777	)		125,533
Net cash (used in) provided by financing activities			(28,761	)	8,987			(37,748	)
Effect of exchange rate changes on cash			(1,596	)	2,448			(4,044	)
Change in cash and cash equivalents			9,453		33,531			(24,078	)
Cash and cash equivalents at beginning of period			15,825		16,734			(909	)
Cash and cash equivalents at end of period		$	25,278	$	50,265		$	(24,987	)

5

Addendum

The following table breaks out our consolidated results into the base business component and the excluded components (sales centers excluded from base business):

(Unaudited)		Base Business				Excluded					Total
(In thousands)		Three Months Ended				Three Months Ended					Three Months Ended
		September 30,				September 30,					September 30,
		2008		2007		2008		2007			2008		2007
Net sales	$	467,878	$	509,766	$	25,652	$	17,668		$	493,530	$	527,434
Gross profit		133,771		135,580		8,029		4,223			141,800		139,803
Gross margin		28.6	%	26.6	%	31.3	%	23.9	%		28.7	%	26.5	%
Selling and administrative expenses		95,024		96,056		8,159		4,242			103,183		100,298
Expenses as a % of net sales		20.3	%	18.8	%	31.8	%	24.0	%		20.9	%	19.0	%
Operating income (loss)		38,747		39,524		(130	)	(19	)		38,617		39,505
Operating margin		8.3	%	7.8	%	(0.5	)%	(0.1	)%		7.8	%	7.5	%

(Unaudited)		Base Business				Excluded					Total
(In thousands)		Nine Months Ended				Nine Months Ended					Nine Months Ended
		September 30,				September 30,					September 30,
		2008		2007		2008		2007			2008		2007
Net sales	$	1,456,763	$	1,584,377	$	67,954	$	43,235		$	1,524,717	$	1,627,612
Gross profit		418,414		440,338		21,492		10,872			439,906		451,210
Gross margin		28.7	%	27.8	%	31.6	%	25.1	%		28.9	%	27.7	%
Selling and administrative expenses		289,165		294,146		19,937		10,494			309,102		304,640
Expenses as a % of net sales		19.8	%	18.6	%	29.3	%	24.3	%		20.3	%	18.7	%
Operating income		129,249		146,192		1,555		378			130,804		146,570
Operating margin		8.9	%	9.2	%	2.3	%	0.9	%		8.6	%	9.0	%

We exclude the following sales centers from base business results for a period of 15 months (parenthetical numbers for each category indicate the number of sales centers excluded as of September 30, 2008):

·   acquired sales centers (10, net of consolidations – see table below);

·   existing sales centers consolidated with acquired sales centers (6);

·   closed sales centers (3);

·   consolidated sales centers in cases where we do not expect to maintain the majority of the existing business (1); and

·   sales centers opened in new markets (0).

We generally allocate corporate overhead expenses to excluded sales centers on the basis of their net sales as a percentage of total net sales.  After 15 months of operations, we include acquired, consolidated and new market sales centers in the base business calculation including the comparative prior year period.

6

In addition to the 20 sales centers excluded from base business as of September 30, 2008, there were 2 new market sales centers excluded until they became base business sales centers in June 2008.  We also divested our pool liner fabrication operation in France as of April 2008, and therefore we have excluded these results from base business for the second and third quarters of 2007.

We have excluded the following acquisitions from base business for the periods identified:

Acquired	Acquisition Date	Net Sales Centers Acquired	Period Excluded
National Pool Tile (NPT) (1)	March 2008	9	March – September 2008
Canswim Pools	March 2008	1	March – September 2008
Tor-Lyn, Limited	February 2007	1	February – April 2007 and January – April 2008

The table below summarizes the changes in our sales centers in the first nine months of 2008:

December 31, 2007	281
Acquired, net of consolidations (1)	12
Consolidated	(1)
Closed	(1)
March 31, 2008	291
New locations	1
Consolidation of acquired locations (1)	(2)
June 30, 2008 and September 30, 2008	290

(1)     We acquired 15 NPT sales centers and have consolidated 6 of these with existing sales centers, including 4 in March 2008 and 2 in the second quarter of 2008.

7

We define Adjusted EBITDA as net income or net loss plus interest expense, income taxes, depreciation, amortization and share-based compensation.  Adjusted EBITDA is not a measure of cash flow or liquidity as determined by generally accepted accounting principles (GAAP).  We have included Adjusted EBITDA as a supplemental disclosure because we believe that it is widely used by our investors, industry analysts and others as a useful supplemental liquidity measure in conjunction with cash flows provided by or used in operating activities to help investors understand our ability to provide cash flows to fund growth, service debt and pay dividends as well as compare our cash flow generating capacity from year to year.

We believe Adjusted EBITDA should be considered in addition to, not as a substitute for, operating income, net income or loss, cash flows provided by or used in operating, investing and financing activities or other income statement or cash flow statement line items reported in accordance with GAAP. Other companies may calculate Adjusted EBITDA differently than we do, which may limit its usefulness as a comparative measure.

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

(Unaudited)			Three Months Ended				Nine Months Ended
(In thousands)			September 30,				September 30,
			2008		2007		2008		2007
Net income		$	22,060	$	21,835	$	71,751	$	80,983
	Add:
	Interest expense, net		4,589		6,349		14,700		16,765
	Provision for income taxes		13,675		12,802		45,397		50,118
	Income tax expense on equity earnings		1,086		959		591		791
	Share-based compensation		1,224		1,619		5,493		5,564
	Depreciation		2,378		2,352		7,182		6,868
	Amortization (1)		975		1,114		2,924		3,497
Adjusted EBITDA		$	45,987	$	47,030	$	148,038	$	164,586

(1)  Excludes amortization included in interest expense, net

The table below presents a reconciliation of Adjusted EBITDA to cash provided by operating activities.  Please see page 5 for our Condensed Consolidated Statements of Cash Flows.

(Unaudited)			Three Months Ended					Nine Months Ended
(In thousands)			September 30,					September 30,
			2008		2007			2008		2007
Adjusted EBITDA		$	45,987	$	47,030		$	148,038	$	164,586
	Add:
	Interest expense, net(1)		(4,517	)	(6,291	)		(14,428	)	(16,597	)
	Provision for income taxes		(13,675	)	(12,802	)		(45,397	)	(50,118	)
	Income tax expense on equity earnings		(1,086	)	(959	)		(591	)	(791	)
	Excess tax benefits on share-based compensation		(800	)	(1,946	)		(2,452	)	(8,345	)
	Equity earnings in unconsolidated investments		(2,793	)	(2,440	)		(1,635	)	(2,087	)
	Other		2,894		2,839			1,393		3,476
	Change in operating assets and liabilities		85,687		62,159			(8,393	)	(56,609	)
Net cash provided by operating activities		$	111,697	$	87,590		$	76,535	$	33,515

(1)  Excludes amortization of deferred financing costs of $72 and $58 for the three months ended September 30, 2008 and September 30, 2007, respectively, and $272 and $168 for the nine months ended September 30, 2008 and September 30, 2007, respectively.  This non-cash expense is included in interest expense, net on the Consolidated Statements of Income.

8