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Pool's CEO Discusses Q4 2011 Results - Earnings Call Transcript

Overall, base business operating income increased by $25 million and we had the second best earnings per share in our history. This, despite industry construction [ph] being down 70% from peak levels and replacement remodeling activity 30% below normal levels. Our cash flow from operations was 104% of net income with solid working capital management.

In 2011, we extended our networks with 3 acquisitions and 4 new sales centers. Two of the acquisitions were in the Green business, in Florida and the Mid-Atlantic; and one was internationally, as we now have a presence in Germany, the third largest market in Europe. Last month, we also closed an acquisition in Western Canada, plus we have several wholesales [ph] centers scheduled for opening in 2012.

Turning to 2012 expectations. We don't expect the macro environment to be very different. As such, our expectations are for modest industry growth, plus market share gains, to result in 5% to 8% base business sales growth. Our operating leverage should enable us to realize 15% to 21% EPS growth with this type of top line growth.

Beyond 2012, we are optimistic that market conditions will gradually improve, enabling the recovery of replacement remodeling and new construction activity to normalized levels over the next 8 to 10 years. Regardless, we are poised to succeed as our people give greatest confidence in our future success.

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