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Our second quarter base business sales were modestly better than expected, increasing by 8.1%, including 1% from favorable year-on-year exchange rates. It's important to note that we had $12 million of sales excluded from base business in the quarter, as these sales came from acquisitions and new locations, which sales generated essentially no profit in the quarter as we're still in the early phases of investment in these markets. Year-to-date, our base business sales were up 10.1% with $15 million in sales excluded from our base business calculation.In comparing sales performance, our Blue business sales were up 8.4% in the quarter and 10.3% year-to-date, while our Green business was up 4.4% in the quarter and 7.4% year-to-date. As mentioned in my comments last quarter, we had easy comps in the first quarter, but the comps get more difficult as we progress during the year with more modest year-on-year growth comparison perspective. Within the Blue business by major market, Texas continued to lead the way with 12.5% sales growth in the quarter, followed by Arizona at 11.5%, California at 7.8% and Florida at 4.4%. All other Blue markets were collectively up 8.1%, including the benefits of favorable exchange rates. The principal drivers for our sales increase are market share gains in the aging of the install base, stimulating replacement and remodel activity, while the overall increase of the install base inflation had a very modest change in consumer discretionary behavior, also being positive contributing factors. Our 2 principal organic market share growth drivers for the next several years are with building materials in the replacement and remodel customer segment, and the retail customer segment. Year-to-date, our gross profit dollars are up 14% to $21.1 million in the Building Materials segment and up 12% to $73.1 million in the Retail segment, far ahead of the markets low to mid single-digit growth this year. For the balance of 2011, we believe that mid single-digit sales growth is reasonable given the progressively tougher comps with modestly higher inflation offset by less favorable exchange rates.
Turning to gross margin. 12 bips of our 50 bips improvement in the quarter came from increased delivery charges as we start to recover the higher periodic expense from higher fuel costs. The balance of the improvement primarily the result of our improving sales, pricing and purchasing disciplines, especially with our focus on migrating sales to preferred vendor and POOLCORP branded products.Mark will cover the review of our expenses. But it's important to highlight that on a year-to-date basis, we realized an $18.5 million or 20% increase in operating income on base business sales growth of $92 million, excluding acquisitions, new location and the credit adjustments to our bad debt reserve that we had in the second quarter of 2010. Let me repeat that. On our year-to-date basis, we realized an $18.5 million increase in operating income or a 20% increase in operating income on base business sales growth of $92 million. In terms of acquisitions and new locations, our results include the Turf Equipment Supply or TES Equipment Supply and Pool Boat acquisitions consummated late last year in the Las Vegas and Belgium markets, respectively, plus our May 2011 acquisition of certain assets from the assignee of J.L. Kilpatrick in South Florida. This last transaction enabled us to enter the South Florida Green market, the second largest market in the country. Combined, these acquisition added 8 location store network. In addition, we have also opened 3 centers in 2011, 2 in Florida and 1 in Puerto Rico. Read the rest of this transcript for free on seekingalpha.com