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) |
985-892-5521 | |
(Registrant's telephone number, including area code) |
(d) | Exhibits |
Press release issued by Pool Corporation on July 18, 2013, announcing second quarter 2013 earnings results. |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net sales | $ | 790,392 | $ | 757,175 | $ | 1,160,754 | $ | 1,119,129 | ||||||||
Cost of sales | 562,226 | 534,770 | 827,827 | 792,161 | ||||||||||||
Gross profit | 228,166 | 222,405 | 332,927 | 326,968 | ||||||||||||
Percent | 28.9 | % | 29.4 | % | 28.7 | % | 29.2 | % | ||||||||
Selling and administrative expenses | 116,173 | 114,271 | 214,002 | 212,813 | ||||||||||||
Operating income | 111,993 | 108,134 | 118,925 | 114,155 | ||||||||||||
Percent | 14.2 | % | 14.3 | % | 10.2 | % | 10.2 | % | ||||||||
Interest expense, net | 2,081 | 2,200 | 3,695 | 3,677 | ||||||||||||
Income before income taxes and equity earnings | 109,912 | 105,934 | 115,230 | 110,478 | ||||||||||||
Provision for income taxes | 43,416 | 41,018 | 45,312 | 42,055 | ||||||||||||
Equity earnings in unconsolidated investments | 37 | 27 | 55 | 171 | ||||||||||||
Net income | $ | 66,533 | $ | 64,943 | $ | 69,973 | $ | 68,594 | ||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 1.43 | $ | 1.38 | $ | 1.50 | $ | 1.45 | ||||||||
Diluted | $ | 1.39 | $ | 1.34 | $ | 1.47 | $ | 1.42 | ||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 46,659 | 47,142 | 46,523 | 47,330 | ||||||||||||
Diluted | 47,882 | 48,288 | 47,758 | 48,430 | ||||||||||||
Cash dividends declared per common share | $ | 0.19 | $ | 0.16 | $ | 0.35 | $ | 0.30 |
June 30, | June 30, | Change | ||||||||||||||
2013 | 2012 | $ | % | |||||||||||||
Assets | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 26,936 | $ | 50,311 | $ | (23,375 | ) | (46 | ) | % | ||||||
Receivables, net | 281,064 | 269,060 | 12,004 | 4 | ||||||||||||
Product inventories, net | 424,679 | 402,266 | 22,413 | 6 | ||||||||||||
Prepaid expenses and other current assets | 10,219 | 8,437 | 1,782 | 21 | ||||||||||||
Deferred income taxes | 5,103 | 7,098 | (1,995 | ) | (28 | ) | ||||||||||
Total current assets | 748,001 | 737,172 | 10,829 | 1 | ||||||||||||
Property and equipment, net | 51,110 | 45,409 | 5,701 | 13 | ||||||||||||
Goodwill | 169,983 | 177,103 | (7,120 | ) | (4 | ) | ||||||||||
Other intangible assets, net | 10,592 | 11,497 | (905 | ) | (8 | ) | ||||||||||
Equity interest investments | 1,190 | 1,089 | 101 | 9 | ||||||||||||
Other assets, net | 9,133 | 7,857 | 1,276 | 16 | ||||||||||||
Total assets | $ | 990,009 | $ | 980,127 | $ | 9,882 | 1 | % | ||||||||
Liabilities and stockholders’ equity | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 239,976 | $ | 267,990 | $ | (28,014 | ) | (10 | ) | % | ||||||
Accrued expenses and other current liabilities | 79,844 | 83,609 | (3,765 | ) | (5 | ) | ||||||||||
Current portion of long-term debt and other long-term liabilities | 20 | 22 | (2 | ) | (9 | ) | ||||||||||
Total current liabilities | 319,840 | 351,621 | (31,781 | ) | (9 | ) | ||||||||||
Deferred income taxes | 15,263 | 9,257 | 6,006 | 65 | ||||||||||||
Long-term debt | 300,426 | 309,813 | (9,387 | ) | (3 | ) | ||||||||||
Other long-term liabilities | 7,871 | 7,058 | 813 | 12 | ||||||||||||
Total liabilities | 643,400 | 677,749 | (34,349 | ) | (5 | ) | ||||||||||
Total stockholders’ equity | 346,609 | 302,378 | 44,231 | 15 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 990,009 | $ | 980,127 | $ | 9,882 | 1 | % |
1. | The allowance for doubtful accounts was $4.4 million at June 30, 2013 and $5.0 million at June 30, 2012. |
2. | The inventory reserve was $8.5 million at June 30, 2013 and $9.6 million at June 30, 2012. |
Six Months Ended | |||||||||||||
June 30, | |||||||||||||
2013 | 2012 | Change | |||||||||||
Operating activities | |||||||||||||
Net income | $ | 69,973 | $ | 68,594 | $ | 1,379 | |||||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||||||||||||
Depreciation | 6,338 | 5,559 | 779 | ||||||||||
Amortization | 622 | 638 | (16 | ) | |||||||||
Share-based compensation | 4,111 | 4,306 | (195 | ) | |||||||||
Excess tax benefits from share-based compensation | (3,187 | ) | (1,609 | ) | (1,578 | ) | |||||||
Equity earnings in unconsolidated investments | (55 | ) | (171 | ) | 116 | ||||||||
Other | (1,633 | ) | 1,248 | (2,881 | ) | ||||||||
Changes in operating assets and liabilities, net of effects of acquisitions: | |||||||||||||
Receivables | (165,713 | ) | (157,829 | ) | (7,884 | ) | |||||||
Product inventories | (24,134 | ) | (13,289 | ) | (10,845 | ) | |||||||
Prepaid expenses and other assets | 459 | 2,612 | (2,153 | ) | |||||||||
Accounts payable | 39,458 | 88,946 | (49,488 | ) | |||||||||
Accrued expenses and other current liabilities | 40,783 | 34,516 | 6,267 | ||||||||||
Net cash (used in) provided by operating activities | (32,978 | ) | 33,521 | (66,499 | ) | ||||||||
Investing activities | |||||||||||||
Acquisition of businesses, net of cash acquired | (1,188 | ) | (4,429 | ) | 3,241 | ||||||||
Purchase of property and equipment, net of sale proceeds | (10,500 | ) | (9,520 | ) | (980 | ) | |||||||
Other investments | 29 | (166 | ) | 195 | |||||||||
Net cash used in investing activities | (11,659 | ) | (14,115 | ) | 2,456 | ||||||||
Financing activities | |||||||||||||
Proceeds from revolving line of credit | 399,472 | 345,631 | 53,841 | ||||||||||
Payments on revolving line of credit | (329,928 | ) | (183,118 | ) | (146,810 | ) | |||||||
Payments on long-term debt and other long-term liabilities | (10 | ) | (100,012 | ) | 100,002 | ||||||||
Excess tax benefits from share-based compensation | 3,187 | 1,609 | 1,578 | ||||||||||
Proceeds from stock issued under share-based compensation plans | 13,489 | 7,879 | 5,610 | ||||||||||
Payments of cash dividends | (16,308 | ) | (14,223 | ) | (2,085 | ) | |||||||
Purchases of treasury stock | (10,437 | ) | (43,866 | ) | 33,429 | ||||||||
Net cash provided by financing activities | 59,465 | 13,900 | 45,565 | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | (355 | ) | (482 | ) | 127 | ||||||||
Change in cash and cash equivalents | 14,473 | 32,824 | (18,351 | ) | |||||||||
Cash and cash equivalents at beginning of period | 12,463 | 17,487 | (5,024 | ) | |||||||||
Cash and cash equivalents at end of period | $ | 26,936 | $ | 50,311 | $ | (23,375 | ) |
(Unaudited) | Base Business | Excluded | Total | |||||||||||||||||||||
(in thousands) | Three Months Ended | Three Months Ended | Three Months Ended | |||||||||||||||||||||
June 30, | June 30, | June 30, | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Net sales | $ | 785,357 | $ | 755,284 | $ | 5,035 | $ | 1,891 | $ | 790,392 | $ | 757,175 | ||||||||||||
Gross profit | 226,810 | 221,798 | 1,356 | 607 | 228,166 | 222,405 | ||||||||||||||||||
Gross margin | 28.9 | % | 29.4 | % | 26.9 | % | 32.1 | % | 28.9 | % | 29.4 | % | ||||||||||||
Operating expenses | 115,002 | 113,707 | 1,171 | 564 | 116,173 | 114,271 | ||||||||||||||||||
Expenses as a % of net sales | 14.6 | % | 15.1 | % | 23.3 | % | 29.8 | % | 14.7 | % | 15.1 | % | ||||||||||||
Operating income | 111,808 | 108,091 | 185 | 43 | 111,993 | 108,134 | ||||||||||||||||||
Operating margin | 14.2 | % | 14.3 | % | 3.7 | % | 2.3 | % | 14.2 | % | 14.3 | % |
(Unaudited) | Base Business | Excluded | Total | |||||||||||||||||||||
(in thousands) | Six Months Ended | Six Months Ended | Six Months Ended | |||||||||||||||||||||
June 30, | June 30, | June 30, | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Net sales | $ | 1,151,800 | $ | 1,114,239 | $ | 8,954 | $ | 4,890 | $ | 1,160,754 | $ | 1,119,129 | ||||||||||||
Gross profit | 330,451 | 325,509 | 2,476 | 1,459 | 332,927 | 326,968 | ||||||||||||||||||
Gross margin | 28.7 | % | 29.2 | % | 27.7 | % | 29.8 | % | 28.7 | % | 29.2 | % | ||||||||||||
Operating expenses | 210,888 | 210,927 | 3,114 | 1,886 | 214,002 | 212,813 | ||||||||||||||||||
Expenses as a % of net sales | 18.3 | % | 18.9 | % | 34.8 | % | 38.6 | % | 18.4 | % | 19.0 | % | ||||||||||||
Operating income (loss) | 119,563 | 114,582 | (638 | ) | (427 | ) | 118,925 | 114,155 | ||||||||||||||||
Operating margin | 10.4 | % | 10.3 | % | (7.1 | )% | (8.7 | )% | 10.2 | % | 10.2 | % |
Acquired (1) | Acquisition Date | Net Sales Centers Acquired | Periods Excluded | |||
B. Shapiro Supply, LLC | May 2013 | 1 | May - June 2013 | |||
Swimming Pool Supply Center, Inc. | March 2013 | 1 | March - June 2013 | |||
CCR Distribution | March 2012 | 1 | January - May 2013 and March - May 2012 | |||
Ideal Distributors Ltd. | February 2012 | 4 | January - April 2013 and February - April 2012 | |||
G.L. Cornell Company | December 2011 | 1 | January - February 2013 and January - February 2012 | |||
Poolway Schwimmbadtechnik GmbH | November 2011 | 1 | January - February 2013 and January - February 2012 |
(1) | We acquired certain distribution assets of each of these companies. |
December 31, 2012 | 312 | |
Acquired | 2 | |
New locations | 7 | |
June 30, 2013 | 321 |
(Unaudited) | Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net income | $ | 66,533 | $ | 64,943 | $ | 69,973 | $ | 68,594 | ||||||||
Add: | ||||||||||||||||
Interest expense (1) | 2,081 | 2,200 | 3,695 | 3,677 | ||||||||||||
Provision for income taxes | 43,416 | 41,018 | 45,312 | 42,055 | ||||||||||||
Share-based compensation | 2,206 | 2,205 | 4,111 | 4,306 | ||||||||||||
Equity earnings in unconsolidated investments | (37 | ) | (27 | ) | (55 | ) | (171 | ) | ||||||||
Depreciation | 3,265 | 2,895 | 6,338 | 5,559 | ||||||||||||
Amortization (2) | 204 | 222 | 429 | 443 | ||||||||||||
Adjusted EBITDA | $ | 117,668 | $ | 113,456 | $ | 129,803 | $ | 124,463 |
(1) | Shown net of interest income and includes amortization of deferred financing costs as discussed below. |
(2) | Excludes amortization of deferred financing costs of $97 and $96 for the three months ended June 30, 2013 and June 30, 2012, respectively, and $193 and $195 for the six months ended June 30, 2013 and June 30, 2012, respectively. |
(Unaudited) | Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Adjusted EBITDA | $ | 117,668 | $ | 113,456 | $ | 129,803 | $ | 124,463 | ||||||||
Add: | ||||||||||||||||
Interest expense, net of interest income | (1,984 | ) | (2,104 | ) | (3,502 | ) | (3,482 | ) | ||||||||
Provision for income taxes | (43,416 | ) | (41,018 | ) | (45,312 | ) | (42,055 | ) | ||||||||
Excess tax benefits from share-based compensation | (1,484 | ) | (471 | ) | (3,187 | ) | (1,609 | ) | ||||||||
Other | (1,595 | ) | 307 | (1,633 | ) | 1,248 | ||||||||||
Change in operating assets and liabilities | (62,181 | ) | (2,622 | ) | (109,147 | ) | (45,044 | ) | ||||||||
Net cash provided by (used in) operating activities | $ | 7,008 | $ | 67,548 | $ | (32,978 | ) | $ | 33,521 |
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