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Pool's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Stocks in this article: POOL

As evidenced by the major market increases referenced later, the weather benefit was primarily in the eastern half of North America, with Western markets weather much closer to normal in the quarter. Besides weather, market share gains and modest market growth also contributed to our sales increase.

In terms of Base business sales, our Blue business sales were up 13.6% while our Green business sales were up a more modest 2.2%. This difference is due to both the impact of weather and the Green business being much more heavily weighted to new construction instead of an installed base.

The East versus West contrast becomes apparent as California, Texas and Arizona Blue sales were up 7% in aggregate, while Florida and all other Blue markets were up 18.1%. I believe that 7% is more reflective of our expectations for the balance of 2012, with roughly half of that growth coming from share increases and the other half from market expansion and inflation.

Our sales growth in our strategic priority customer segment retail was over 10%, aided by stable weather, as well as market share gains. Our strategic priority product category, building materials, had over 25% sales growth in the quarter, which was primarily driven by market share gains together with some market recovery in remodeling activity.

Since many of you asked about our European business given the well-publicized economic issues there, our Base business sales in local currency were up 6.8% in the quarter in Europe. As additional information, our Europe business will represent less than 7% of our total 2012 sales.

At this juncture, other than the weather benefit in the quarter, our expectations for 2012 are just like they were in February when I provided annual market sales and EPS guidance. Mark will address the rest of the P&L and balance sheet, with everything being on track with expectations.

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