Pool Corporation Reports Record Results And Updates 2012 Earnings Guidance Range

"Based on results through September, we are revising our 2012 earnings guidance from our previous range of $1.75 to $1.82 per diluted share to a projected range of $1.80 to $1.83 per diluted share excluding the $0.14 goodwill impairment charge. We are confident in the long term growth opportunities available in our industry and are actively investing to realize those opportunities," said Perez de la Mesa. 

POOLCORP is the largest wholesale distributor of swimming pool and related backyard products. Currently, POOLCORP operates 312 sales centers in North America and Europe, through which it distributes more than 160,000 national brand and private label products to roughly 80,000 wholesale customers. For more information, please visit www.poolcorp.com .

The Pool Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4853

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, changes in the economy and the housing market, our ability to maintain favorable relationships with suppliers and manufacturers, competition from other leisure product alternatives and mass merchants and other risks detailed in POOLCORP's 2011 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

POOL CORPORATION
Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data)
	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2012	2011	2012	2011
Net sales	$ 528,027	$ 503,584	$ 1,647,156	$ 1,522,896
Cost of sales	376,526	355,678	1,168,687	1,072,141
Gross profit	151,501	147,906	478,469	450,755
Percent	28.7%	29.4%	29.0%	29.6%
Selling and administrative expenses	103,544	106,993	316,357	311,345
Goodwill impairment	6,946	—	6,946	—
Operating income	41,011	40,913	155,166	139,410
Percent	7.8%	8.1%	9.4%	9.2%
Interest expense, net	1,687	1,641	5,364	5,110
Income before income taxes and equity earnings	39,324	39,272	149,802	134,300
Provision for income taxes	17,965	15,126	60,020	52,377
Equity earnings in unconsolidated investments	16	23	187	185
Net income	$ 21,375	$ 24,169	$ 89,969	$ 82,108
Earnings per share:
Basic	$ 0.46	$ 0.50	$ 1.91	$ 1.70
Diluted	$ 0.45	$ 0.50	$ 1.87	$ 1.67
Weighted average shares outstanding:
Basic	46,574	47,987	47,076	48,357
Diluted	47,787	48,772	48,205	49,157
Cash dividends declared per common share	$ 0.16	$ 0.14	$ 0.46	$ 0.41

POOL CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
	September 30,	September 30,	Change
	2012	2011	$	%
Assets
Current assets:
Cash and cash equivalents	$ 28,818	$ 20,656	$ 8,162	40%
Receivables, net	175,459	160,647	14,812	9
Product inventories, net	349,325	337,698	11,627	3
Prepaid expenses and other current assets	8,078	7,354	724	10
Deferred income taxes	11,561	10,145	1,416	14
Total current assets	573,241	536,500	36,741	7
Property and equipment, net	46,643	40,774	5,869	14
Goodwill	169,983	178,516	(8,533)	(5)
Other intangible assets, net	11,270	11,953	(683)	(6)
Equity interest investments	1,066	976	90	9
Other assets, net	29,180	29,493	(313)	(1)
Total assets	$ 831,383	$ 798,212	$ 33,171	4%
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$ 163,543	$ 120,221	$ 43,322	36%
Accrued expenses and other current liabilities	102,805	70,718	32,087	45
Current portion of long-term debt and other long-term liabilities	23	22	1	5
Total current liabilities	266,371	190,961	75,410	39
Deferred income taxes	31,833	26,549	5,284	20
Long-term debt	214,328	268,700	(54,372)	(20)
Other long-term liabilities	6,381	7,503	(1,122)	(15)
Total liabilities	518,913	493,713	25,200	5
Total stockholders' equity	312,470	304,499	7,971	3
Total liabilities and stockholders' equity	$ 831,383	$ 798,212	$ 33,171	4%
__________________
1.  The allowance for doubtful accounts was $4.8 million at September 30, 2012 and $5.2 million at September 30, 2011.
2.  The inventory reserve was $9.6 million at September 30, 2012 and $7.4 million at September 30, 2011.

POOL CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
	Nine Months Ended
	September 30,
	2012	2011	Change
Operating activities
Net income	$ 89,969	$ 82,108	$ 7,861
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	8,481	7,071	1,410
Amortization	962	1,243	(281)
Share-based compensation	6,236	6,143	93
Excess tax benefits from share-based compensation	(2,534)	(2,229)	(305)
Equity earnings in unconsolidated investments	(187)	(185)	(2)
Goodwill impairment	6,946	—	6,946
Other	278	(3,892)	4,170
Changes in operating assets and liabilities, net of effects of acquisitions:
Receivables	(63,015)	(55,941)	(7,074)
Product inventories	39,644	10,999	28,645
Prepaid expenses and other assets	2,607	677	1,930
Accounts payable	(15,500)	(49,542)	34,042
Accrued expenses and other current liabilities	50,643	35,522	15,121
Net cash provided by operating activities	124,530	31,974	92,556
Investing activities
Acquisition of businesses, net of cash acquired	(4,580)	(2,961)	(1,619)
Purchase of property and equipment, net of sale proceeds	(13,717)	(16,959)	3,242
Other investments	(249)	(177)	(72)
Net cash used in investing activities	(18,546)	(20,097)	1,551
Financing activities
Proceeds from revolving line of credit	482,669	446,649	36,020
Payments on revolving line of credit	(415,641)	(376,649)	(38,992)
Payments on long-term debt and other long-term liabilities	(100,017)	(145)	(99,872)
Payments of deferred acquisition consideration	—	(500)	500
Excess tax benefits from share-based compensation	2,534	2,229	305
Proceeds from stock issued under share-based compensation plans	13,180	9,506	3,674
Payments of cash dividends	(21,669)	(19,798)	(1,871)
Purchases of treasury stock	(55,088)	(62,842)	7,754
Net cash used in financing activities	(94,032)	(1,550)	(92,482)
Effect of exchange rate changes on cash and cash equivalents	(621)	608	(1,229)
Change in cash and cash equivalents	11,331	10,935	396
Cash and cash equivalents at beginning of period	17,487	9,721	7,766
Cash and cash equivalents at end of period	$ 28,818	$ 20,656	$ 8,162

ADDENDUM

Base Business

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,
	2012	2011	2012	2011	2012	2011
Net sales	$ 518,504	$ 502,301	$ 9,523	$ 1,283	$ 528,027	$ 503,584
Gross profit	148,738	147,541	2,763	365	151,501	147,906
Gross margin	28.7%	29.4%	29.0%	28.4%	28.7%	29.4%
Operating expenses	100,315	106,619	3,229	374	103,544	106,993
Expenses as a % of net sales	19.3%	21.2%	33.9%	29.2%	19.6%	21.2%
Goodwill impairment	6,946	—	—	—	6,946	—
Operating income (loss)	41,477	40,922	(466)	(9)	41,011	40,913
Operating margin	8.0%	8.1%	(4.9)%	(0.7)%	7.8%	8.1%
(Unaudited)	Base Business		Excluded		Total
(in thousands)	Nine Months Ended		Nine Months Ended		Nine Months Ended
	September 30,		September 30,		September 30,
	2012	2011	2012	2011	2012	2011
Net sales	$ 1,608,947	$ 1,517,691	$ 38,209	$ 5,205	$ 1,647,156	$ 1,522,896
Gross profit	467,582	449,285	10,887	1,470	478,469	450,755
Gross margin	29.1%	29.6%	28.5%	28.2%	29.0%	29.6%
Operating expenses	305,354	309,438	11,003	1,907	316,357	311,345
Expenses as a % of net sales	19.0%	20.4%	28.8%	36.6%	19.2%	20.4%
Goodwill impairment	6,946	—	—	—	6,946	—
Operating income (loss)	155,282	139,847	(116)	(437)	155,166	139,410
Operating margin	9.7%	9.2%	(0.3)%	(8.4)%	9.4%	9.2%

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

Acquired (1)	Acquisition Date	Net Sales Centers Acquired	Periods Excluded
CCR Distribution	March 2012	1	March–September 2012
Ideal Distributors Ltd.	February 2012	4	February–September 2012
G.L. Cornell Company	December 2011	1	January–September 2012
Poolway Schwimmbadtechnik GmbH	November 2011	1	January–September 2012
The Kilpatrick Company, Inc.	May 2011	4	January–July 2012 and May–July 2011
Turf Equipment Supply Co.	December 2010	3	January–February 2012 and January–February 2011
Pool Boat and Leisure, S.A.	December 2010	1	January–February 2012 and January–February 2011
(1) We acquired certain distribution assets of each of these companies.

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, 2012):

• acquired sales centers (see table above);
• existing sales centers consolidated with acquired sales centers (0);
• closed sales centers (0);
• consolidated sales centers in cases where we do not expect to maintain the majority of the existing business (0); and
• sales centers opened in new markets (4).

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.

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