Pool Corporation Reports Thirteenth Consecutive Year of Record Results.20% Earnings Per Share Increase for the Year COVINGTON, La. -- Pool Corporation (the "Company" or "POOL") (Nasdaq/GSM: POOL) today reported record net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight and net income for 2006. Earnings per share for 2006 increased 20% to $1.74 per diluted share on net income of $95.0 million, compared to $1.45 per diluted share on net income of $80.5 million last year. Net sales for the year ended December 31, 2006 increased $357.1 million, or 23%, to $1.91 billion, compared to $1.55 billion in 2005. The increase in net sales includes $204.7 million related to acquired sales centers and $152.4 million of base business sales growth. The 10% increase in base business sales is due to the continued growth in the installed base of swimming pools, POOL's execution of its sales and service programs, inflationary price increases passed through the supply chain, 26% growth in complementary product sales and sales from new locations. Gross profit for the year ended December 31, 2006 increased $107.5 million, or 25%, to $539.9 million from $432.4 million in 2005. This increase is primarily due to the increase in net sales. Gross profit as a percentage of net sales (gross margin) increased 40 basis points to 28.3% in 2006 from 27.9% in 2005. The gross margin improvement is primarily attributable to the benefits achieved through our supply chain management initiatives, including our pre-price increase inventory purchases in the fourth quarter of 2005 and second quarter of 2006. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. in 2006 increased $75.5 million, or 25%, to $372.6 million from $297.1 million in 2005. Operating expenses as a percentage of net sales increased to 19.5% in 2006 from 19.1% in 2005 due to the higher expense ratios for acquired businesses and start-up costs and higher expense ratios for the 17 new sales centers opened in 2006. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased $32.0 million, or 24%, to $167.4 million in 2006 from $135.4 million in 2005. Operating income as a percentage of net sales (operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: ) increased 10 basis points to 8.8% in 2006 from 8.7% in 2005. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (as defined in the addendum) increased 24% to $183.0 million in 2006 from $147.4 million in 2005. Cash provided by operations was $69.0 million in 2006, compared to $39.5 million in 2005. The increase in 2006 cash provided by operations is primarily the result of the increase in net income. "We are pleased with another strong year of growth in 2006. This marks our 11th consecutive year of 20% or greater earnings per share growth, which represents all of our years as a publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. . In our continuing effort to provide exceptional value to both our customers and our suppliers, we made important investments in 2006 to expand our networks and value-added programs. Combined with other investments that strengthen every aspect of our organization, we have positioned the Company to leverage our industry's unique dynamics in order to realize our long-term earnings objectives and create substantial value for our shareholders," commented Manuel Perez Manuel Perez may refer to:
In the fourth quarter of 2006, net sales increased $18.7 million, or 6%, to $318.5 million, compared to $299.8 million in the comparable 2005 period. This increase is due to the Wickham acquisition, growth in the Horizon business and a 1% increase in base business sales. Gross margin decreased 180 basis points to 26.0% in the fourth quarter of 2006 from 27.8% for the same period last year. This decrease is primarily attributable to a fourth quarter adjustment to the estimated amount of vendor incentives earned for the year based on our actual 2006 product purchases. Operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the fourth quarter was $4.1 million compared to operating income of $2.3 million in the same period last year. Loss per share for the fourth quarter of 2006 was $0.10 per basic share on a net loss of $5.0 million, compared to a loss of $0.02 per basic share on a net loss of $0.9 million in the fourth quarter of 2005. "We project 15% to 20% earnings growth in 2007. Given the tougher first half comps, we expect to realize the growth relative to 2006 as the year unfolds," continued Perez de la Mesa. POOL also announced today that it has completed the placement of $100.0 million aggregate principal amount of Floating Rate Senior Notes (the "Notes") in a private placement offering, on February 12, 2007. The Notes are due on February 12, 2012. Net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the placement were used to pay down the Company's revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility. Additionally, POOL announced that its Board of Directors has declared its regular quarterly cash dividend of $0.105 per share. The dividend will be payable on March 19, 2007 to holders of record on March 5, 2007. At December 31, 2006, 210 sales centers were included in the base business calculations, and 64 sales centers, including the Horizon and Wickham sales centers, were excluded because they were acquired or opened in new markets within the last 15 months. Pool Corporation is the largest wholesale distributor of swimming pool and related backyard products. Currently, POOL operates 275 sales centers in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Europe, through which it distributes more than 100,000 national brand and private label products to roughly 70,000 wholesale customers. For more information about POOL, please visit www.poolcorp.com. 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 growth. The forward-looking statements in this release are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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, our ability to maintain favorable relationships with suppliers, competition from other leisure product alternatives and mass merchants, changes in the economy and other risks detailed in POOL's Form 10-Q Form 10-Q See 10-Q. for the quarter ended September 30, 2006 filed with the Securities and Exchange Commission. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] We exclude the following sales centers from base business for 15 months: * acquired sales centers; * sales centers divested or consolidated with acquired sales centers; and * new sales centers opened in new markets. Additionally, we generally allocate overhead expenses to acquired sales centers on the basis of acquired sales center net sales as a percentage of total net sales. [TABLE OMITTED] EBITDA, as discussed above, is defined as net income plus interest expense, income taxes, depreciation and amortization. We consider EBITDA an important indicator of the operational strength and performance of our business, including the ability to provide cash flows to fund growth, service debt and pay dividends. EBITDA eliminates the non-cash depreciation of tangible assets and non-cash amortization of intangible assets. We believe EBITDA should be considered in addition to, not as a substitute for, operating income, net income and other measures of financial performance reported in accordance with accounting principles generally accepted in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). [TABLE OMITTED] |
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