Pool Corporation Reports Record 2012 Results

PoolCorp enjoyed a successful 2012 campaign with its SCP???(R)???AE???? Distributors and Superior???(R)???AE???? Pool Products. The one-stop shop provides pool and spa equipment, plumbing and electrical supplies, pavers, lighting, fencing, water features, outdoor kitchens and grills.

This past year PoolCorp. had record profits and provided its share holders with a 2013 Earnings Guidance. Highlights from the report included: sales growth of 9 percent to a record $1.95 billion; 2012 diluted earnings per share of $1.71; adjusted diluted EPS up 23 percent to a record $1.85; 2013 diluted EPS guidance of $2.13 to $2.23.

"Solid performance in 2012 produced record results, surpassing our objectives," said Manuel Perez de la Mesa, president and CEO. "We turned challenges into opportunities, and opportunities into success. Our market share gains reflect our continued efforts to provide added value to our customers by helping them succeed utilizing our tools, programs and resources for their businesses and markets."

Base business sales increased 7 percent, including 7 percent growth on the swimming pool side of the business and 10 percent growth on the irrigation side. Base business sales growth was driven by market share gains, continued improvement in consumer discretionary expenditures and some price inflation, partially offset by unfavorable currency fluctuations of approximately 1 percent.

Gross profit for the year ended December 31, 2012 increased 7 percent to $567.4 million from $531.6 million in 2011. Gross profit as a percentage of net sales (gross margin) decreased 60 basis points to 29 percent for 2012. This decrease reflects product and customer mix changes and continued competitive pricing pressures. Gross margin in 2012 was also comparatively lower than 2011 gross margin due to the benefits realized in 2011 from opportunistic inventory purchases.

Selling and administrative expenses (operating expenses) for 2012 increased 3 percent to $415.6 million from $405 million in 2011. Base business operating expenses were essentially flat year over year, as decreases in employee incentive costs, lower bad debt expense and the impact of currency fluctuations were offset by higher professional fees and increases in wages and employee insurance.