Highlights include:
- Annual net sales of $5.3 billion, anchored by a consistent stream of recurring maintenance product sales
- Operating income of $617.2 million, maintaining a solid operating margin of 11.6%
- Net cash provided by operations of $659.2 million, or 152% of net income
- 2024 diluted EPS of $11.30, or $11.07 without tax benefits
- 2025 diluted EPS guidance range of $11.08 - $11.58, including an estimated $0.08 tax benefit
COVINGTON, La., Feb. 20, 2025 (GLOBE NEWSWIRE) -- Pool Corporation (Nasdaq/GSM:POOL) today announced full year and fourth quarter 2024 results.
"Our results in 2024 highlight the strength of our business model in a pressured macroenvironment. Strategic execution in our growth initiatives allowed us to achieve net sales of $5.3 billion despite tempered discretionary spending. This year we enhanced our POOL360 digital ecosystem with technology rollouts and expanded our digital marketing programs, leading to increased sales of our private-label chemical products. We also continued to expand our sales center network, further improving our ability to serve our customers and widen our reach, with the addition of 10 greenfield locations and 2 acquisitions, bringing our total locations to 448 worldwide. We ended the year with strong operating cash flows of $659.2 million and are proud to have returned $483.4 million to our shareholders through dividends and share repurchases," said Peter D. Arvan, president and CEO.
Year ended December 31, 2024 compared to the year ended December 31, 2023
Net sales decreased 4% to $5.3 billion in 2024 compared to $5.5 billion in 2023. Base business results approximated consolidated results for the year. Maintenance activities remained stable throughout 2024, reflecting steady demand for non-discretionary products, while sales of discretionary products for new pool construction and remodeling were softer, impacted by macroeconomic conditions. Inflationary product cost increases moderated, benefiting net sales approximately 1% to 2% in 2024, compared to 3% to 4% in 2023.
Gross profit was $1.6 billion in 2024, a 5% decrease from gross profit of $1.7 billion in 2023. Gross margin declined 30 basis points to 29.7% in 2024 compared to 30.0% in 2023. The reversal of previously recorded estimated import taxes in the first quarter of 2024, which we do not expect to have continuing impacts in 2025, increased gross margin by 20 basis points and diluted earnings per share by $0.25. Pricing optimization efforts and higher volume-related purchase incentives compared to last year also benefited our current year gross margin. These impacts were offset by a less favorable product and customer mix.
Selling and administrative expenses (operating expenses) increased 5%, or $44.7 million, to $958.1 million in 2024. As a percentage of net sales, operating expenses increased 150 basis points to 18.0% in 2024 compared to 16.5% in 2023. Expense growth drivers included higher costs associated with the expansion of our network and our technology initiatives as well as inflationary rent, wage and insurance increases. These increases were partially mitigated by close management of variable costs.
Operating income for the year decreased 17% to $617.2 million, down from $746.6 million in 2023. Operating margin decreased 190 basis points to 11.6% in 2024 compared to 13.5% in 2023.
Interest and other non-operating expenses, net for the year was reduced by $8.2 million compared to 2023, primarily due to lower average debt between periods.
We recorded an $8.8 million, or $0.23 per diluted share, tax benefit from Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting, for the year ended December 31, 2024 compared to a tax benefit of $6.7 million, or $0.17 per diluted share, realized in 2023.
Net income declined 17% to $434.3 million in 2024 compared to $523.2 million in 2023. Earnings per share decreased 15% to $11.30 per diluted share compared to $13.35 per diluted share in 2023. Without the impact from ASU 2016-09 in both periods, earnings per diluted share decreased 16% to $11.07 per diluted share compared to $13.18 per diluted share in 2023.
Adjusted EBITDA decreased 16% to $680.9 million in 2024 compared to $806.9 million in 2023 and was 12.8% of net sales in 2024 compared to 14.6% of net sales in 2023.
Balance Sheet and Liquidity
On the balance sheet at December 31, 2024, we ended the year with days sales outstanding ratio of 26.3, as calculated on a trailing four quarters basis, down from 26.8 days at December 31, 2023. We reduced our inventory levels 6% to $1.3 billion, outpacing the 4% decline in net sales, compared to inventory of $1.4 billion at December 31, 2023. Total debt outstanding was lowered $103.0 million to $950.4 million as we have used operating cash flows to reduce our debt. As previously announced, during the latter half of 2024, we amended our credit facility and receivables securitization facility to, among other things, increase our borrowing capacity.
Net cash provided by operations was $659.2 million in 2024 compared to $888.2 million in 2023. Our cash flows were impacted by our inventory reduction efforts in 2023 and lower net income in 2024, which was partially offset by a benefit from the hurricane relief deferral of our third and fourth quarter estimated tax payments totaling $68.5 million. Our 2024 operating cash flows helped to fund $306.3 million in share repurchases, $179.6 million in dividends paid to our shareholders, a $103.0 million debt reduction and $64.2 million of investments in capital expenditures and acquisitions.
Fourth quarter ended December 31, 2024 compared to the fourth quarter ended December 31, 2023
Net sales decreased 2% to $987.5 million in the fourth quarter of 2024 compared to $1.0 billion in the fourth quarter of 2023. Base business results approximated consolidated results for the period.
Gross profit decreased 1% to $290.2 million in the fourth quarter of 2024 from $293.8 million in the same period of 2023. Gross margin increased 10 basis points to 29.4% in the fourth quarter of 2024 compared to 29.3% in the fourth quarter of 2023.
Operating expenses increased 7% to $229.6 million in the fourth quarter of 2024 compared to $214.4 million in the fourth quarter of 2023. As a percentage of net sales, operating expenses were 23.3% in the fourth quarter of 2024 compared to 21.4% in the same period of 2023.
Operating income in the fourth quarter of 2024 decreased 24% to $60.7 million compared to $79.3 million in the same period of 2023. Operating margin decreased 180 basis points in the fourth quarter.
Interest and other non-operating expenses, net was reduced by $1.7 million compared to the fourth quarter of 2023, primarily due to lower average debt between periods.
We recorded a $0.5 million, or $0.01 per diluted share, tax benefit from ASU 2016-09 in the fourth quarter of 2024 compared to a tax benefit of $0.8 million, or $0.02 per diluted share, realized in the fourth quarter of 2023. Net income decreased 27% in the fourth quarter of 2024 to $37.3 million compared to $51.4 million in 2023. Earnings per diluted share decreased 26% to $0.98 in the fourth quarter of 2024 compared to $1.32 for the same period in 2023. Without the impact from the tax benefits discussed above in both periods, earnings per diluted share decreased 25% to $0.97 compared to $1.30 in 2023.
2025 Outlook
"The dedication, hard work and collaboration of the POOLCORP team have been instrumental in our success this year. Moving into 2025, we remain encouraged by stable home values, a resilient consumer and continuing favorable industry trends, and are excited for the new products and services that our team has worked hard to make available in the marketplace. Our expansive, integrated sales center network allows us to provide a broad variety of products quickly and efficiently and unmatched customer resources and business support. With the help of our longstanding vendor partnerships, talented team and industry-leading technology solutions, we believe we are well positioned to capitalize on the opportunities available, while continuing to provide a superior customer experience. We expect earnings for 2025 to be in the range of $11.08 to $11.58 per diluted share, including an estimated $0.08 favorable impact from ASU 2016-09," added Arvan.
We estimate that we have approximately $3.2 million in unrealized tax benefits related to stock options that will expire and restricted stock awards that will vest in the first quarter of 2025, adding $0.08 in diluted earnings per share in that period. We have included this estimated first quarter benefit in our annual earnings guidance. We have not included any expected benefits from additional tax benefits that could be recognized for stock option exercises in 2025 from grants that expire after the first quarter of 2025.
Non-GAAP Financial Measures
This press release contains certain non-GAAP measures (adjusted EBITDA, adjusted diluted EPS and projected adjusted diluted EPS). See the addendum to this release for definitions of our non-GAAP measures and reconciliations of our non-GAAP measures to GAAP measures.
About Pool Corporation
POOLCORP is the world's largest wholesale distributor of swimming pool and related backyard products. As of December 31, 2024, POOLCORP operated 448 sales centers in North America, Europe and Australia, through which it distributes more than 200,000 products to roughly 125,000 wholesale customers. For more information, please visit www.poolcorp.com.
Forward-Looking Statements
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," "will," "may," "outlook," and other words 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. Actual results may differ materially due to a variety of factors, including the sensitivity of our business to weather conditions; changes in economic conditions, consumer discretionary spending, the housing market, inflation or interest rates; our ability to maintain favorable relationships with suppliers and manufacturers; the extent to which favorable consumer spending trends over the past several years will continue; competition from other leisure product alternatives or mass merchants; our ability to continue to execute our growth strategies; changes in the regulatory environment; new or additional taxes, duties or tariffs; excess tax benefits or deficiencies recognized under ASU 2016-09 and other risks detailed in POOLCORP's 2023 Annual Report on Form 10-K, 2024 Quarterly Reports on Form 10-Q and other reports and filings filed with the Securities and Exchange Commission (SEC) as updated by POOLCORP's subsequent filings with the SEC.
Investor Relations Contacts:
Kristin S. Byars
985.801.5153
kristin.byars@poolcorp.com
Curtis J. Scheel
985.801.5341
curtis.scheel@poolcorp.com
| POOL CORPORATION Consolidated Statements of Income (Unaudited) (In thousands, except per share data) | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 (1) | ||||||||||||
| Net sales | $ | 987,480 | $ | 1,003,050 | $ | 5,310,953 | $ | 5,541,595 | |||||||
| Cost of sales | 697,236 | 709,275 | 3,735,606 | 3,881,551 | |||||||||||
| Gross profit | 290,244 | 293,775 | 1,575,347 | 1,660,044 | |||||||||||
| Percent | 29.4 | % | 29.3 | % | 29.7 | % | 30.0 | % | |||||||
| Selling and administrative expenses | 229,593 | 214,431 | 958,143 | 913,477 | |||||||||||
| Operating income | 60,651 | 79,344 | 617,204 | 746,567 | |||||||||||
| Percent | 6.1 | % | 7.9 | % | 11.6 | % | 13.5 | % | |||||||
| Interest and other non-operating expenses, net | 10,433 | 12,104 | 50,250 | 58,431 | |||||||||||
| Income before income taxes and equity in earnings | 50,218 | 67,240 | 566,954 | 688,136 | |||||||||||
| Provision for income taxes | 12,945 | 15,745 | 132,836 | 165,084 | |||||||||||
| Equity in earnings (loss) of unconsolidated investments, net | 27 | (58 | ) | 207 | 177 | ||||||||||
| Net income | $ | 37,300 | $ | 51,437 | $ | 434,325 | $ | 523,229 | |||||||
| Earnings per share attributable to common stockholders:(2) | |||||||||||||||
| Basic | $ | 0.98 | $ | 1.33 | $ | 11.37 | $ | 13.45 | |||||||
| Diluted | $ | 0.98 | $ | 1.32 | $ | 11.30 | $ | 13.35 | |||||||
| Weighted average common shares outstanding: | |||||||||||||||
| Basic | 37,718 | 38,372 | 38,007 | 38,704 | |||||||||||
| Diluted | 37,922 | 38,648 | 38,228 | 38,997 | |||||||||||
| Cash dividends declared per common share | $ | 1.20 | $ | 1.10 | $ | 4.70 | $ | 4.30 | |||||||
| (1) | Derived from audited financial statements. |
| (2) | Earnings per share under the two-class method is calculated using net income attributable to common stockholders (net income reduced by earnings allocated to participating securities), which was $37.1 million and $51.2 million for the three months ended December 31, 2024 and December 31, 2023, respectively, and $432.1 million and $520.5 million for the years ended December 31, 2024 and December 31, 2023, respectively. Participating securities excluded from weighted average common shares outstanding were 205,000 and 204,000 for the three months ended December 31, 2024 and December 31, 2023, respectively, and 206,000 and 207,000 for the years ended December 31, 2024 and December 31, 2023, respectively. |
| POOL CORPORATION Condensed Consolidated Balance Sheets (Unaudited) (In thousands) | |||||||||||||
| December 31, | December 31, | Change | |||||||||||
| 2024 | 2023 (1) | $ | % | ||||||||||
| Assets | |||||||||||||
| Current assets: | |||||||||||||
| Cash and cash equivalents | $ | 77,862 | $ | 66,540 | $ | 11,322 | 17 | % | |||||
| Receivables, net (2) | 115,835 | 145,723 | (29,888 | ) | (21 | ) | |||||||
| Receivables pledged under receivables facility | 199,026 | 197,187 | 1,839 | 1 | |||||||||
| Product inventories, net (3) | 1,289,300 | 1,365,466 | (76,166 | ) | (6 | ) | |||||||
| Prepaid expenses and other current assets | 47,091 | 40,444 | 6,647 | 16 | |||||||||
| Total current assets | 1,729,114 | 1,815,360 | (86,246 | ) | (5 | ) | |||||||
| Property and equipment, net | 251,324 | 223,929 | 27,395 | 12 | |||||||||
| Goodwill | 698,910 | 700,078 | (1,168 | ) | - | ||||||||
| Other intangible assets, net | 290,732 | 298,282 | (7,550 | ) | (3 | ) | |||||||
| Equity interest investments | 1,439 | 1,305 | 134 | 10 | |||||||||
| Operating lease assets | 314,853 | 305,688 | 9,165 | 3 | |||||||||
| Other assets | 81,812 | 83,426 | (1,614 | ) | (2 | ) | |||||||
| Total assets | $ | 3,368,184 | $ | 3,428,068 | $ | (59,884 | ) | (2)% | |||||
| Liabilities and stockholders' equity | |||||||||||||
| Current liabilities: | |||||||||||||
| Accounts payable | $ | 525,235 | $ | 508,672 | $ | 16,563 | 3 | % | |||||
| Accrued expenses and other current liabilities | 171,194 | 134,676 | 36,518 | 27 | |||||||||
| Short-term borrowings and current portion of long-term debt | 49,473 | 38,203 | 11,270 | 30 | |||||||||
| Current operating lease liabilities | 98,284 | 89,215 | 9,069 | 10 | |||||||||
| Total current liabilities | 844,186 | 770,766 | 73,420 | 10 | |||||||||
| Deferred income taxes | 81,408 | 67,421 | 13,987 | 21 | |||||||||
| Long-term debt, net | 900,883 | 1,015,117 | (114,234 | ) | (11 | ) | |||||||
| Other long-term liabilities | 44,959 | 40,028 | 4,931 | 12 | |||||||||
| Non-current operating lease liabilities | 223,283 | 221,949 | 1,334 | 1 | |||||||||
| Total liabilities | 2,094,719 | 2,115,281 | (20,562 | ) | (1 | ) | |||||||
| Total stockholders' equity | 1,273,465 | 1,312,787 | (39,322 | ) | (3 | ) | |||||||
| Total liabilities and stockholders' equity | $ | 3,368,184 | $ | 3,428,068 | $ | (59,884 | ) | (2)% | |||||
| (1) | Derived from audited financial statements. |
| (2) | The allowance for doubtful accounts was $8.6 million at December 31, 2024 and $11.7 million at December 31, 2023. |
| (3) | The inventory reserve was $26.7 million at December 31, 2024 and $23.5 million at December 31, 2023. |
| POOL CORPORATION Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) | ||||||||||||
| Year Ended | ||||||||||||
| December 31, | ||||||||||||
| 2024 | 2023 (1) | Change | ||||||||||
| Operating activities | ||||||||||||
| Net income | $ | 434,325 | $ | 523,229 | $ | (88,904 | ) | |||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Depreciation | 36,784 | 31,585 | 5,199 | |||||||||
| Amortization | 8,697 | 8,555 | 142 | |||||||||
| Share-based compensation | 19,248 | 19,582 | (334 | ) | ||||||||
| Equity in earnings of unconsolidated investments, net | (207 | ) | (177 | ) | (30 | ) | ||||||
| Net loss (gain) on foreign currency transactions | 218 | (813 | ) | 1,031 | ||||||||
| Goodwill impairment | - | 550 | (550 | ) | ||||||||
| Other | 13,775 | 14,369 | (594 | ) | ||||||||
| Changes in operating assets and liabilities, net of effects of acquisitions: | ||||||||||||
| Receivables | 29,146 | 10,108 | 19,038 | |||||||||
| Product inventories | 66,201 | 231,240 | (165,039 | ) | ||||||||
| Prepaid expenses and other assets | 75,122 | 57,840 | 17,282 | |||||||||
| Accounts payable | 14,429 | 96,128 | (81,699 | ) | ||||||||
| Accrued expenses and other liabilities | (38,552 | ) | (103,967 | ) | 65,415 | |||||||
| Net cash provided by operating activities | 659,186 | 888,229 | (229,043 | ) | ||||||||
| Investing activities | ||||||||||||
| Acquisition of businesses, net of cash acquired | (4,692 | ) | (11,533 | ) | 6,841 | |||||||
| Purchase of property and equipment, net of sale proceeds | (59,476 | ) | (60,096 | ) | 620 | |||||||
| Other investments, net | (2,001 | ) | 32 | (2,033 | ) | |||||||
| Net cash used in investing activities | (66,169 | ) | (71,597 | ) | 5,428 | |||||||
| Financing activities | ||||||||||||
| Proceeds from revolving line of credit | 1,517,800 | 1,548,618 | (30,818 | ) | ||||||||
| Payments on revolving line of credit | (1,575,700 | ) | (1,815,829 | ) | 240,129 | |||||||
| Payments on term loan under credit facility | (25,000 | ) | (12,500 | ) | (12,500 | ) | ||||||
| Proceeds from asset-backed financing | 727,000 | 552,500 | 174,500 | |||||||||
| Payments on asset-backed financing | (744,600 | ) | (560,300 | ) | (184,300 | ) | ||||||
| Payments on term facility | - | (47,313 | ) | 47,313 | ||||||||
| Proceeds from short-term borrowings and current portion of long-term debt | 8,873 | 19,998 | (11,125 | ) | ||||||||
| Payments on short-term borrowings and current portion of long-term debt | (10,103 | ) | (19,338 | ) | 9,235 | |||||||
| Payments of deferred acquisition consideration | - | (551 | ) | 551 | ||||||||
| Payments of deferred financing costs | (2,077 | ) | (52 | ) | (2,025 | ) | ||||||
| Proceeds from stock issued under share-based compensation plans | 13,190 | 10,455 | 2,735 | |||||||||
| Payments of cash dividends | (179,633 | ) | (167,461 | ) | (12,172 | ) | ||||||
| Repurchases of common stock and payments of excise tax | (306,300 | ) | (306,359 | ) | 59 | |||||||
| Net cash used in financing activities | (576,550 | ) | (798,132 | ) | 221,582 | |||||||
| Effect of exchange rate changes on cash and cash equivalents | (5,145 | ) | 2,449 | (7,594 | ) | |||||||
| Change in cash and cash equivalents | 11,322 | 20,949 | (9,627 | ) | ||||||||
| Cash and cash equivalents at beginning of period | 66,540 | 45,591 | 20,949 | |||||||||
| Cash and cash equivalents at end of period | $ | 77,862 | $ | 66,540 | $ | 11,322 | ||||||
| (1) | Derived from audited financial statements. |
ADDENDUM
Base Business
When calculating our base business results, we exclude for a period of 15 months sales centers that are acquired, opened in new markets or closed. We also exclude consolidated sales centers when we do not expect to maintain the majority of the existing business and existing sales centers that are consolidated with acquired sales centers.
We generally allocate corporate overhead expenses to excluded sales centers on the basis of their net sales as a percentage of total net sales. After 15 months, we include acquired, consolidated and new market sales centers in the base business calculation including the comparative prior year period.
We have not provided separate base business income statements within this press release as our base business results for the quarter and year ended December 31, 2024 closely approximated our consolidated results for the same periods, and acquisitions and sales centers excluded from base business contributed less than 1% to the change in net sales.
The table below summarizes the changes in our sales centers during 2024.
| December 31, 2023 | 439 | |
| Acquired locations | 2 | |
| New locations | 10 | |
| Consolidated/closed locations | (3 | ) |
| December 31, 2024 | 448 | |
Reconciliation of Non-GAAP Financial Measures
The non-GAAP measures described below should be considered in the context of all of our other disclosures in this press release.
Adjusted EBITDA
As illustrated in detail in the reconciliation table below, we define Adjusted EBITDA as net income or net loss plus interest and other non-operating expenses, income taxes, depreciation, amortization, share-based compensation, goodwill and other impairments and equity in earnings or loss of unconsolidated investments. Other companies may calculate Adjusted EBITDA differently than we do, which may limit its usefulness as a comparative measure.
Adjusted EBITDA is not a measure of performance as determined by generally accepted accounting principles (GAAP). We believe Adjusted EBITDA should be considered in addition to, not as a substitute for, operating income or loss, net income or loss, net cash flows provided by or used in operating, investing and financing activities or other income statement or cash flow statement line items reported in accordance with GAAP.
We have included Adjusted EBITDA as a supplemental disclosure because management uses it to monitor our performance, and we believe that it is widely used by our investors, industry analysts and others as a useful supplemental performance measure. We believe that Adjusted EBITDA, when viewed with our GAAP results and the accompanying reconciliations, provides an additional measure that enables management and investors to monitor factors and trends affecting our ability to service debt, pay taxes and fund capital expenditures.
The table below presents a reconciliation of net income to Adjusted EBITDA.
| (Unaudited) | Year Ended December 31, | |||||||
| (In thousands) | 2024 | 2023 | ||||||
| Net income | $ | 434,325 | $ | 523,229 | ||||
| Adjustments to increase (decrease) net income: | ||||||||
| Interest and other non-operating expenses(1) | 50,032 | 59,244 | ||||||
| Provision for income taxes | 132,836 | 165,084 | ||||||
| Share-based compensation | 19,248 | 19,582 | ||||||
| Equity in earnings of unconsolidated investments, net | (207 | ) | (177 | ) | ||||
| Goodwill impairment | - | 550 | ||||||
| Depreciation | 36,784 | 31,585 | ||||||
| Amortization(2) | 7,838 | 7,824 | ||||||
| Adjusted EBITDA | $ | 680,856 | $ | 806,921 | ||||
| (1) | Shown net of losses (gains) on foreign currency transactions of $218 for 2024 and $(813) for 2023. |
| (2) | Excludes amortization of deferred financing costs of $859 for 2024 and $731 for 2023, which is included in Interest and other non-operating expenses, net on the Consolidated Statements of Income. |
Adjusted Diluted EPS
We have included adjusted diluted EPS, a non-GAAP financial measure, in this press release as a supplemental disclosure, because we believe this measure is useful to management, investors and others in assessing our period-over-period operating performance.
Adjusted diluted EPS is a key measure used by management to demonstrate the impact of tax benefits from ASU 2016-09 on our diluted EPS and to provide investors and others with additional information about our potential future operating performance to supplement GAAP measures.
We believe this measure should be considered in addition to, not as a substitute for, diluted EPS presented in accordance with GAAP, and in the context of our other disclosures in this press release. Other companies may calculate this non-GAAP financial measure differently than we do, which may limit its usefulness as a comparative measure.
The table below presents a reconciliation of diluted EPS to adjusted diluted EPS.
| Three Months Ended | Year Ended | ||||||||||
| (Unaudited) | December 31, | December 31, | |||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||
| Diluted EPS | $ | 0.98 | $ | 1.32 | $ | 11.30 | $ | 13.35 | |||
| Less: ASU 2016-09 tax benefit | 0.01 | 0.02 | 0.23 | 0.17 | |||||||
| Adjusted diluted EPS | $ | 0.97 | $ | 1.30 | $ | 11.07 | $ | 13.18 | |||
