Pool Corporation Provides Business Update Based on Current Market Trends
COVINGTON, La., May 27, 2020 (GLOBE NEWSWIRE) -- Pool Corporation (Nasdaq/GSM:POOL) today provided a business update based on current market trends.
"Over the past few weeks as the COVID-19 pandemic continues to evolve, the market conditions affecting our business also continue to evolve. While the impact of COVID-19 on the economy is severe, we are pleased to see positive trends in our business. As people are spending more time at home, homeowners are choosing to invest in swimming pools and outdoor living products, opting for the relaxation and enjoyment those investments can provide. Based on our results to date in our seasonally important second quarter, we believe the increased use of residential swimming pools during stay-at-home restrictions and the more recent easing of restrictions, allowing more contractors to return to work on existing and new projects, have continued to drive greater pool usage and strong industry demand. Our operations remain open, and we continue to safely serve our customers in the current environment," said Peter D. Arvan, president and CEO.
Below are trends that we have observed to date in the second quarter of 2020.
As disclosed in our April 23, 2020 press release, we were experiencing year-over-year sales declines during the month-to-date period in April of 5% - 10% compared to the prior year period. We are pleased to report that through the latter part of April, sales trends improved.
As jurisdictional restrictions ease, May 2020 month-to-date sales are trending favorably and are continuing to benefit from strong demand.
Consistent with greater pool usage, April and May month-to-date sales have benefited from increased demand for residential pool maintenance supplies, such as chemicals, and for replacement products, such as pool heaters, pumps, cleaners, lights and filters, compared to the same periods in 2019. We have also observed increased demand for both in-ground and above ground pools and related components, which is consistent with reports of a healthy backlog by many pool construction companies. We believe that increased demand for these products demonstrates positive pool ownership trends in the current environment.
Sales of big-ticket items, such as in-ground and above ground pools and pool equipment, are a larger portion of our product sales mix, resulting in modestly lower than expected gross margin.
As previously disclosed and discussed on our first quarter 2020 earnings call, we continue to closely control our operating expenses.
We plan to provide complete earnings results for the second quarter of 2020 and our expectations for the remainder of the year in our regularly scheduled earnings release and conference call on Thursday, July 23, 2020.
POOLCORP is the world's largest wholesale distributor of swimming pool and related backyard products. POOLCORP operates approximately 375 sales centers in North America, Europe and Australia, through which it distributes more than 200,000 national brand and private label products to roughly 120,000 wholesale customers. For more information, please visit www.poolcorp.com.
This news release includes "forward-looking" statements that involve risks and uncertainties that are generally identifiable through the use of words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "should" 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. We have provided this interim update due to the extraordinary circumstances presented by the COVID-19 pandemic. However, we typically do not provide interim updates outside of our regular quarterly and annual reporting and do not anticipate providing interim updates outside of regularly scheduled reports in the future. Actual results may differ materially due to a variety of factors, including impacts on our business from the COVID-19 pandemic, 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, excess tax benefits or deficiencies recognized under ASU 2016-09 and other risks detailed in POOLCORP's 2019 Annual Report on Form 10-K and First Quarter 2020 Quarterly Report on Form 10-Q, each filed with the Securities and Exchange Commission (SEC) as updated by POOLCORP's subsequent filings with the SEC.
Curtis J. Scheel Director of Investor Relations 985.801.5341 firstname.lastname@example.org
May 27, 2020
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995
Matters discussed in this website contain forward-looking information that involves risks and uncertainties. Forward-looking statements express our current expectations or forecasts of possible future results or events, including projections of earnings and other financial performance measures, statements of management's expectations regarding plans and objectives, and industry, general economic and other forecasts of trends, future dividend payments, share repurchases and other matters. You can identify these statements by the fact that they do not relate strictly to historic or current facts and often use words such as "anticipate", "estimate", "expect", “intend”, "believe," "will likely result," "outlook," "project," “may,” “can,” “plan,” “target,” “potential,” "should" and other words and expressions of similar meaning.
No assurance can be given that the expected results in any forward-looking statements will be achieved, and actual results may differ materially due to one or more factors. For these statements we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act.
Certain factors that may affect our business and could cause actual results to differ materially from those expressed in any forward-looking statements include the following:
The demand for our swimming pool, irrigation, landscape and related outdoor living products may be adversely affected by unfavorable economic conditions.
The COVID-19 pandemic and associated responses could adversely impact our business and results of operations.
We are susceptible to adverse weather conditions.
Our distribution business is highly dependent on our ability to maintain favorable relationships with suppliers.
We depend on a global network of suppliers to source our products, including our own branded products and products we have exclusive distribution rights to. Product quality, warranty claims or safety concerns could negatively impact our sales and expose us to litigation.
We face intense competition both from within our industry and from other leisure product alternatives.
More aggressive competition by store- and internet-based mass merchants and large pool or irrigation supply retailers could adversely affect our sales.
We depend on our ability to attract, develop and retain highly qualified personnel.
Past growth may not be indicative of future growth, and while we contemplate continued growth through internal expansion and acquisitions, no assurance can be made as to our ability to:
penetrate new markets;
generate sufficient cash flows to support expansion plans and general operating activities;
identify appropriate acquisition candidates and successfully integrate acquired businesses;
maintain favorable supplier arrangements and relationships; and
identify and divest assets which do not continue to create value consistent with our objectives.
We are subject to inventory management risks. Insufficient inventory may result in lost sales opportunities or delayed revenue, while excess inventory may negatively impact our gross margin.
The cost of chemical products could increase our cost of sales and adversely affect our results of operations and financial condition.
The nature of our business subjects us to compliance with employment, environmental, health, transportation, safety and other governmental regulations.
We store chemicals, fertilizers and other combustible materials that involve fire, safety and casualty risks.
We conduct business internationally, which exposes us to additional risks.
Changes in tax laws and accounting standards related to tax matters have caused, and may in the future cause, fluctuations in our effective tax rate.
We rely on information technology systems to support our business operations. A significant disturbance or breach of our technological infrastructure could adversely affect our financial condition and results of operations. Additionally, failure to maintain the security of confidential information could damage our reputation and expose us to litigation.
We may be adversely affected by changes in LIBOR reporting practices or the method in which LIBOR is determined.
Disruptions from natural or man-made disasters or extreme weather, public safety issues, geopolitical events and security issues, labor or trade disputes and similar events could have a material adverse effect on our business.
The foregoing factors are not exhaustive and new factors may emerge which impact our business. It is impossible for us to predict all such factors. Therefore, forward-looking statements should not be relied upon as a prediction of actual future results. We cannot guarantee that any future event or result will be realized, although we believe we have been prudent in our plans and assumptions. Should additional risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could differ materially from those anticipated. Investors should bear this in mind as they consider forward-looking statements.
We undertake no obligation to publicly update forward-looking statements, whether as a result of subsequent events, new information or otherwise.