Previous Statements by POOL
» Pool's CEO Discusses Q3 2011 Results - Earnings Call Transcript
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» Pool's CEO Discusses Q1 2011 Results - Earnings Call Transcript
In terms of base business sales, our Blue business was up 10%, while our Green business was up 7.8%, a nice recovery in the Green business after very strong headwinds for several years. The best 2 performing major Blue markets for us in 2011 were Texas and Arizona, with 15.7% and 14.3% growth, respectively. These 2 markets benefit in part from an extended season. On the other hand, California did not have favorable weather, as we only increased sales by 6.4% in that market. Florida and all other markets were both up 9.6% in 2011.For 2012, we anticipate that industry sales will be up similarly to 2011, but we are more modest in our expectations of the factor by which we exceed industry performance. Although we do expect to increase share, as we do every year, by continuously investing in our people, tools and resources to further differentiate our value proposition in the marketplace. With respect to market share growth, we have always focused on earning our customers' business instead of renting it month-to-month or year-to-year with lower prices. We are a value-added distributor and we, for many years, have invested to further our value proposition. A great majority of our customers understand and appreciate our value and reward us with their business. 2011 was further testament of our success in this regard as our gross margin increased by 40 basis points, coupled with strong market share growth. Base business expenses were well controlled, with the main increase being incentive expense, and these are primarily the result of our operating performance. Throughout the company, there are objective performance measurements captured every day that serve to reinforce performance expectations for all of management, sales, operations, credit and inventory management individuals. There are also extensive training and support resources available to enable everyone's success. The bottom line is when operating performance exceeds expectations, there is a strong sharing of the results with the individual responsible. It is truly a very transparent pay-for-performance structure for every professional and management individual in the company.
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. Read the rest of this transcript for free on seekingalpha.com