Net Sales
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended | | |
| | June 30, | | |
(in millions) | | 2022 | | 2021 | | Change |
Net sales | | $ | 3,468.5 | | | $ | 2,848.6 | | | $ | 619.9 | | | 22% |
|
| | | | | | | | | | | | | | |
| | Nine Months Ended | | |
| | September 30, | | |
(in millions) | | 2017 | | 2016 | | Change |
Net sales | | $ | 2,278.0 |
| | $ | 2,125.6 |
| | $ | 152.4 |
| | 7% |
Net sales for the first ninesix months of 20172022 increased 7%22% compared to the same period last year. Base business net sales increased 16%. Our results in the first half of the year with muchwere driven by continued strong demand for outdoor living products and elevated price inflation. While we have been challenged by supply chain and labor constraints, we have observed improvements in our supply chain dynamics beginning in the second quarter of this2022. Following our astounding 33% sales growth resultingin the first quarter of 2022, results in our seasonally significant second quarter were dampened by unfavorable weather conditions in certain markets. We expect that our results will continue to benefit from favorable industry trends in the 6% improvementlong-term, including growth in the installed base business sales.of pools, robust demand and heightened consumer interest in enhanced pool customizations.
The following factors contributed toimpacted our sales growth (listed in order of estimated magnitude):
continued improvement in consumer•inflationary product cost increases of approximately 10% to 11% (compared to our historical average of 1% to 2%);
•favorable trends for our products including:
◦strong demand for discretionary expenditures, including market recovery in remodelingproducts, as evidenced by sales growth for product offerings such as equipment and replacement activitybuilding materials (see discussion below);
◦market share growth, particularlygains, including those in building materials and commercial product categories;(see discussion below);
◦increased demand for residential swimming pool and spa chemicalmaintenance supplies, as the installed base of pools continues to grow;
•6% sales our largest product category at 13%growth from recent acquisitions;
•1% sales growth from an extra selling day in the first half of total net sales for the nine months ended September 30, 2017, increased 3%2022 compared to the first nine monthshalf of 2016, excluding the recent Lincoln Aquatics acquisition;2021; and
inflationary (estimated at close to 1%) product cost increases.•challenges presented in 2022 including:
◦1% unfavorable impact from currency exchange rate fluctuations;
We believe that◦cooler, wet weather conditions in our seasonal markets (see discussion below); and
◦unfavorable weather conditions and macroeconomic impacts in Europe (see discussion below).
Higher sales growth rates for certain product offerings, such as equipment and building materials, and equipment, evidence increased spendingindicate continued strong demand in traditionally discretionary areas, includingsuch as pool construction, pool remodeling as well asand equipment upgrades. In the first ninesix months of 2017, the2022, sales growth rate forof equipment, such aswhich includes swimming pool heaters, pumps, lights, filters and filters, collectively, was similar to the 7% growth rate for total net salesautomation, increased approximately 12% compared to the same period last year. Equipment collectively represented 27% of net sales in 2016. This increase reflects both the ongoing recoveryfirst six months of replacement activity and continued demand for higher-priced, more energy-efficient products.2022. Sales of building materials which includes tile, represent approximately 11% of net sales for the first nine months of 2017 and grew by 12%25% compared to the first ninesix months of 2016.2021 and represented approximately 13% of net sales in the first six months of 2022. Sales of chemicals, representing 11% of total net sales, increased 35% compared to the first six months of 2021. The increase in chemical sales was driven by inflation, improved supply and strong demand for non-discretionary maintenance products.
Sales to specialty retailers that sell swimming pool supplies and customers who service large commercial installations such as hotels, universities and community recreational facilities are included in the appropriate existing product categories, and growth in this areathese areas is reflected in the numbersdiscussion above. TheseIn the first six months of 2022, sales to retail customers increased 13% compared to the first six months of 2021 and represented approximately 12% of our consolidated net sales. Certain of our retail customers were adversely impacted by unfavorable weather conditions in the second quarter, hindering sales growth. Sales to commercial customers increased 27% in the first six months of 2022 compared to the first six months of 2021 and represented approximately 4% of our consolidated net sales forin the first ninesix months of 2017 and2022.
Net sales in our seasonal markets (not considering Europe), representing 47% of our total base business net sales in the first half of 2022, increased 12%16% compared to the same periodfirst half of 2021. Comparatively, net sales in 2016, excludingour year-round markets, representing 48% of our total base business net sales in the recent acquisitionfirst half of Lincoln Aquatics.2022, increased 20% compared to the first half of 2021.
Net sales in Europe, representing 5% of our total net sales in the first half of 2022, were flat in local currency compared to 49% growth in the first half of 2021. While we estimate that net sales in Europe benefited 10% from inflationary product cost increases, our results were negatively impacted by a decline in volume growth driven by macroeconomic uncertainty and poor weather.
Gross Profit
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended | | |
| | June 30, | | |
(in millions) | | 2022 | | 2021 | | Change |
Gross profit | | $ | 1,114.0 | | | $ | 852.8 | | | $ | 261.2 | | | 31% |
Gross margin | | 32.1 | % | | 29.9 | % | | | | |
|
| | | | | | | | | | | | | | |
| | Nine Months Ended | | |
| | September 30, | | |
(in millions) | | 2017 | | 2016 | | Change |
Gross profit | | $ | 659.9 |
| | $ | 613.3 |
| | $ | 46.6 |
| | 8% |
Gross margin | | 29.0 | % | | 28.9 | % | | | | |
Gross margin forimproved 220 basis points to 32.1% in the ninesix months ended SeptemberJune 30, 2017 was2022 compared to 29.9% in line with gross margin for the ninefirst six months ended September 30, 2016.
of 2021. This improvement reflects focused supply chain management initiatives to address inflation, increased pricing and benefits from our recent acquisitions.
Operating Expenses
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended | | |
| | June 30, | | |
(in millions) | | 2022 | | 2021 | | Change |
Selling and administrative expenses | | $ | 459.4 | | | $ | 385.2 | | | $ | 74.2 | | | 19% |
| | | | | | | | |
Operating expenses as a % of net sales | | 13.2 | % | | 13.5 | % | | | | |
|
| | | | | | | | | | | | | | |
| | Nine Months Ended | | |
| | September 30, | | |
(in millions) | | 2017 | | 2016 | | Change |
Operating expenses | | $ | 392.8 |
| | $ | 367.2 |
| | $ | 25.6 |
| | 7% |
Operating expenses as a % of net sales | | 17.2 | % | | 17.3 | % | | | | |
ForOperating expenses for the six months ended June 30, 2022 increased 19% compared to the first ninesix months of 2017,2021, including a 1% benefit from currency exchange rate fluctuations. Our operating expenses were up 7% over the same period last year, with basehave increased to support our business operating expenses up 5%. The increasegrowth, including recent acquisitions. Our expense growth reflects increases in base business operating expenses was primarily due to higher growth-driven labor, facility and freight expenses, as well as greater employee-related health insurance costs, equity-based compensation,along with increased investments in technology and technology spending as we continue to invest in our business. Operating expenses as a percentage of net sales was consistent for the first nine months of 2017 and 2016 and improved by 20 basis points on a base business basis.higher performance-based compensation.
Interest and Other Non-operatingNon-Operating Expenses, Net
Interest and other non-operating expenses, net for the first ninesix months of 20172022 increased $1.7$9.2 million compared to the same period last year, primarily due to higher interest rates on ouraverage debt and an increase in borrowings.levels between periods. Our average outstanding debt was $1.4 billion for the first six months of 2022 versus $387.1 million for the same period of 2021. Our weighted average effective interest rate increaseddecreased to 2.6% for the first nine months of 20171.8% from 2.0% for the same period of 2016 on higher average outstanding debt of $501.0 million versus $437.3 million2.5% for the respective periods.
Income Taxes
Our effective income tax rate was 35.2%24.1% for the ninesix months ended SeptemberJune 30, 20172022 compared to 38.2%22.6% for the ninesix months ended SeptemberJune 30, 2016. The decline2021. We recorded a $8.9 million, or $0.22 per diluted share, tax benefit from ASU 2016-09 in the six months ended June 30, 2022compared to a $11.7 million, or $0.29 per diluted share, tax benefit in the same period of 2021. Without the benefits from ASU 2016-09, our effective income tax rate is primarily due towas 25.5% for the $7.7 million tax benefit recorded in our provisionsix months ended June 30, 2022 and 25.2% for income taxes, which reflects the impact of the adoption of ASU 2016-09.six months ended June 30, 2021.
Net Income and Earnings Per Share
Net income increased 36% to $486.5 million for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. Earnings per diluted share increased 37% to $12.03 for the six months ended June 30, 2022 versus $8.78 per diluted share for the first ninesix months of 2017, including a favorable $0.14ended June 30, 2021. Without the impact from ASU 2016-09 in both periods, earnings per diluted share increased 39% to $11.81 for the six months ended June 30, 2022 compared to $8.49 for the six months ended June 30, 2021. See the reconciliation of GAAP to non-GAAP measures below.
Reconciliation of Non-GAAP Financial Measures
Adjusted Diluted EPS
We have included adjusted diluted EPS, a non-GAAP financial measure, as a supplemental disclosure, because we believe this measure is useful to investors and others in assessing our period-to-period operating performance.
Adjusted diluted EPS is a key measure used by management to demonstrate the impact of tax benefits from the adoption of ASU 2016-09 increasedon our diluted EPS and to $3.89 perprovide 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 share on Net income attributable to Pool Corporation of $166.0 million, compared to $3.39 per diluted share on Net income attributable to Pool Corporation of $146.3 millionEPS presented in accordance with GAAP, and in the comparable 2016 period.context of our other disclosures within this Form 10-Q. 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.
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(Unaudited) | | Three Months Ended | | Six Months Ended | |
| | June 30, | | June 30, | |
| | 2022 | | 2021 | | 2022 | | 2021 | |
Diluted EPS | | $ | 7.63 | | | $ | 6.37 | | | $ | 12.03 | | | $ | 8.78 | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
ASU 2016-09 tax benefit | | (0.04) | | | (0.19) | | | (0.22) | | | (0.29) | | |
| | | | | | | | | |
Adjusted diluted EPS | | $ | 7.59 | | | $ | 6.18 | | | $ | 11.81 | | | $ | 8.49 | | |
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Seasonality and Quarterly Fluctuations
Our business is highly seasonal. In general, sales and operating income are highest during the second and third quarters, which represent the peak months of both swimming pool use and installation and irrigation and landscape maintenanceinstallations and installation.maintenance. Sales are substantially lower during the first and fourth quarters, when we may incur net losses.quarters. In 2016,2021, we generated approximately 63%60% of our net sales and 85%69% of our operating income in the second and third quarters of the year.
We typically experience a build-up of product inventories and accounts payable during the winter months in anticipation of the peak selling season. Excluding borrowings to finance acquisitions and share repurchases, our peak borrowing usually occurs during the second quarter, primarily because extended payment terms offered by our suppliers typically are payable in April, May and June, while our peak accounts receivable collections typically occur in June, July and August.
The following table presents certain unaudited quarterly data for the first second and thirdsecond quarters of 2017,2022, the four quarters of 20162021 and the third and fourth quarterquarters of 2015.2020. We have included income statement and balance sheet data for the most recent eight quarters to allow for a meaningful comparison of the seasonal fluctuations in these amounts. In our opinion, this information reflects all normal and recurring adjustments considered necessary for a fair presentation of this data. Due to the seasonal nature of our industry, theThe results of any one or more quarters are not necessarily a good indication of results for an entire fiscal year or of continuing trends.future trends for a variety of reasons, including the seasonal nature of our business, the recent pandemic-driven increased demand for our products and the impact of new and acquired sales centers.
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(Unaudited) | | QUARTER |
(in thousands) | | 2022 | | 2021 | | 2020 |
| | Second | | First | | Fourth | | Third | | Second | | First | | Fourth | | Third | |
Statement of Income Data | | | | | | | | | | | | | | | | | |
Net sales | | $ | 2,055,818 | | | $ | 1,412,650 | | | $ | 1,035,557 | | | $ | 1,411,448 | | | $ | 1,787,833 | | | $ | 1,060,745 | | | $ | 839,261 | | | $ | 1,139,229 | | |
Gross profit | | 666,804 | | | 447,189 | | | 322,376 | | | 441,899 | | | 551,685 | | | 301,131 | | | 239,095 | | | 328,698 | | |
Operating income | | 418,888 | | | 235,723 | | | 127,891 | | | 237,276 | | | 338,586 | | | 129,031 | | | 74,351 | | | 148,233 | | |
Net income | | 307,283 | | | 179,261 | | | 107,609 | | | 184,665 | | | 259,695 | | | 98,655 | | | 59,174 | | | 119,098 | | |
| | | | | | | | | | | | | | | | | |
Balance Sheet Data | | | | | | | | | | | | | | | | | |
Total receivables, net | | $ | 756,585 | | | $ | 679,927 | | | $ | 376,571 | | | $ | 476,150 | | | $ | 585,566 | | | $ | 487,602 | | | $ | 289,200 | | | $ | 366,412 | | |
Product inventories, net | | 1,579,101 | | | 1,641,155 | | | 1,339,100 | | | 1,043,407 | | | 894,654 | | | 977,228 | | | 780,989 | | | 612,824 | | |
Accounts payable | | 604,225 | | | 685,946 | | | 398,697 | | | 414,156 | | | 439,453 | | | 634,998 | | | 266,753 | | | 268,412 | | |
Total debt | | 1,595,398 | | | 1,505,073 | | | 1,183,350 | | | 362,819 | | | 423,116 | | | 433,171 | | | 416,018 | | | 339,934 | | |
|
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(Unaudited) | | QUARTER |
(in thousands) | | 2017 | | 2016 | | 2015 |
| | Third | | Second | | First | | Fourth | | Third | | Second | | First | | Fourth |
Statement of Income Data | | | | | | | | | | | | | | | | |
Net sales | | $ | 743,401 |
| | $ | 988,163 |
| | $ | 546,441 |
| | $ | 445,235 |
| | $ | 691,429 |
| | $ | 918,889 |
| | $ | 515,250 |
| | $ | 415,075 |
|
Gross profit | | 216,606 |
| | 289,664 |
| | 153,621 |
| | 127,777 |
| | 199,551 |
| | 270,736 |
| | 143,023 |
| | 118,295 |
|
Operating income | | 81,928 |
| | 154,186 |
| | 30,998 |
| | 9,743 |
| | 74,166 |
| | 142,420 |
| | 29,530 |
| | 5,979 |
|
Net income | | 48,783 |
| | 94,620 |
| | 22,270 |
| | 2,572 |
| | 44,421 |
| | 85,247 |
| | 16,363 |
| | 2,579 |
|
| | | | | | | | | | | | | | | | |
Balance Sheet Data | | | | | | | | | | | | | | | | |
Total receivables, net | | $ | 262,796 |
| | $ | 370,285 |
| | $ | 290,019 |
| | $ | 166,151 |
| | $ | 233,405 |
| | $ | 351,012 |
| | 283,758 |
| | $ | 156,756 |
|
Product inventories, net | | 484,287 |
| | 542,805 |
| | 647,884 |
| | 486,116 |
| | 455,156 |
| | 493,254 |
| | 595,393 |
| | 474,275 |
|
Accounts payable | | 209,062 |
| | 273,309 |
| | 465,928 |
| | 230,728 |
| | 199,922 |
| | 265,349 |
| | 438,705 |
| | 246,554 |
|
Total debt | | 564,573 |
| | 553,480 |
| | 490,217 |
| | 438,042 |
| | 390,189 |
| | 500,606 |
| | 450,457 |
| | 328,045 |
|
We expect that our quarterly results of operations will continue to fluctuate depending on the timing and amount of revenue contributed by new and acquired sales centers. Based on our peak summer selling season, we generally open new sales centers and close or consolidate sales centers, when warranted, either in the first quarter before the peak selling season begins or in the fourth quarter after the peak selling season ends.
Weather is one of the principal external factors affecting our business. The table below presents some of the possible effects resulting from various weather conditions.
| | | | | | | | |
Weather | | Possible Effects |
Hot and dry | • | Increased purchases of chemicals and supplies
|
| | for existing swimming pools |
| • | Increased purchases of above-ground pools and |
| | irrigation and lawn care products |
| | |
Weather | | Possible Effects |
Hot and dry | • | Increased purchases of chemicals and supplies
for existing swimming pools
|
| • | Increased purchases of above-ground pools and
irrigation products
|
| | |
Unseasonably cool weather or extraordinary amounts of rain | • | Fewer pool and irrigation and landscape installations |
of rain | • | installations |
| • | Decreased purchases of chemicals and supplies |
| • | Decreased purchases of impulse items such as |
| | above-ground pools and accessories |
| | |
Unseasonably early warming trends in spring/late cooling trends in fall | • | A longer pool and landscape season, thus positively |
trends in fall | | impacting our sales |
(primarily in the northern half of the U.S. and Canada) | | |
| | |
Unseasonably late warming trends in spring/early cooling trends in fall | • | A shorter pool and landscape season, thus negatively |
trends in fall | | impacting our sales |
(primarily in the northern half of the U.S. and Canada) | | |
Weather Impacts on 20172022 and 20162021 Results
Severe stormsWe observed unfavorable weather conditions in the third quarter of 2017, particularly Hurricanes Irma and Harvey, hindered our sales growth in Florida and Texas, although Texas largely recovered by the end of September. In the Central and Midwest, temperatures were normal for this time of year, contrasting with the above-average temperatures in the third quarter of 2016. The West experienced record heat and normal rainfall in the third quarter of 2017, similar to the above average heat in the same period last year.
Cold and wet weathercertain markets throughout the Mid-South and North impacted those seasonal markets in the middle of the second quarter whileof 2022. Heavy rainfall and cooler temperatures throughout the weather impact overall for the quarter was fairly neutral. Temperaturesnortheastern United States and precipitation throughout most areas other than those described above, were normal, with only Texas benefiting from drier weatherCanada resulted in slower sales activity and limited sales growth in the second quarter of 2017 compared2022. Additionally, results in Europe continued to be impacted by unfavorable weather conditions. In contrast, our southern markets benefited from above-average temperatures, particularly in Texas. In the abovesecond quarter of 2021, overall weather conditions favorably impacted sales growth with the average rainfall experiencedU.S. temperature in June 2021 being the same period of 2016.hottest on record in 127 years.
Unseasonably mildOverall, weather benefited salesconditions in the first quarter of 2017. However, while2022 were less favorable than weather trends earlyconditions in the year normally have a seasonally larger impact,first quarter of 2021. Sales benefited from above-average temperatures along much of the comparisonwest and the east coast, although Texas experienced cooler-than-normal temperatures. In addition, some seasonal markets had unfavorable weather compared to the first quarter of 2016 was especially tough given the benefit of the warmer-than-normal2021 when construction activity started earlier than normal. Similarly, results in Europe were hindered by unfavorable weather across nearly all markets in the United States inconditions. In the first quarter of 2016. For2021, sales benefited from favorable and generally mild weather conditions throughout the first quartercontiguous United States. In February 2021, Texas experienced the most costly winter storm event on record for the United States, which damaged many swimming pools and added to already strong replacement activity.
CRITICAL ACCOUNTING ESTIMATES
We prepare our Consolidated Financial Statements in accordance with U.S. generally accepted accounting principles (GAAP), which require management to make estimates and assumptions that affect reported amounts and related disclosures. Management identifies critical accounting estimates as:
•those that require the use of 2017, Texasassumptions about matters that are inherently and surrounding markets experienced record warm temperatures,highly uncertain at the time the estimates are made; and
•those for which when coupled with below-average precipitation for that area, spurred higher sales growth. In two of the more seasonal regions where we operate, below-average temperatureschanges in the Northestimates or assumptions, or the use of different estimates and above-average precipitationassumptions, could have a material impact on our consolidated results of operations or financial condition.
Management has discussed the development, selection and disclosure of our critical accounting estimates with the Audit Committee of our Board. For a description of our critical accounting estimates that require us to make the most difficult, subjective or complex judgments, please see our 2021 Annual Report on Form 10-K. We have not changed any of these policies from those previously disclosed in the West negatively impacted our first quarter 2017 sales growth.that report.
Recent Accounting Pronouncements
See Note 1 of “Notes to Consolidated Financial Statements,” included in Part I, Item 1 of this Form 10-Q for discussion of recent accounting pronouncements.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity is defined as the ability to generate adequate amounts of cash to meet short-term and long-term cash needs. We assess our liquidity in terms of our ability to generate cash to fund our operating activities, taking into consideration the seasonal nature of our business. Significant factors which could affect our liquidity include the following:
•cash flows generated from operating activities;
•the adequacy of available bank lines of credit;
acquisitions;•the quality of our receivables;
scheduled debt payments;•acquisitions;
•dividend payments;
•capital expenditures;
•changes in income tax laws and regulations;
•the timing and extent of share repurchases; and
•the ability to attract long-term capital with satisfactory terms.
Our primary capital needs are seasonal working capital requirementsobligations, debt repayment obligations and other general corporate purposes,initiatives, including acquisitions, opening new sales centers, dividend payments and share repurchases. Our primary working capital obligations are for the purchase of inventory, payroll, rent, other facility costs and selling and administrative expenses. Our working capital obligations fluctuate during the year, driven primarily by seasonality and the timing of inventory purchases. Our primary sources of working capital are cash from operations supplemented by bank borrowings, which have historically been sufficient to support our growth and finance acquisitions. The same principle applies to funds used forWe have funded our capital expenditures and share repurchases.repurchases in substantially the same manner.
We prioritize our use of cash based on investing in our business, maintaining a prudent debtcapital structure and returning moneycash to our shareholders.shareholders through dividends and share repurchases. Our specific priorities for the use of cash are as follows:
•capital expenditures primarily for maintenance and newgrowth of our sales center capital expenditures;network, technology-related investments and fleet vehicles;
•investing in inventory and funding other operating expenses;
•strategic acquisitions executed opportunistically;
•payment of cash dividends as and when declared by our Board of Directors (Board);Board;
•repayment of debt to maintain an average total target leverage ratio (as defined below) between 1.5 and 2.0; and
•repurchases of our common stock under our Board authorizedBoard-authorized share repurchase program.
For 2017, weWe focus our capital expenditure plans principally on the needs of our sales centers, and in recent years have increased our spending on information technology. We project capital expenditures in 2022 will be approximately 1.5%approximate our historical average of net sales as we expand facilities and purchase delivery vehicles to address growth opportunities. Over the last five years, capital expenditures have averaged roughly 1.0% of net sales. Capital expenditures were 1.4%0.7% of net sales in 2016,2021, 0.6% of net sales in 2020 and 1.0% of net sales in 20152019 and 0.8%have averaged roughly 1.0% of net sales in 2014.over the past five years.
Sources and Uses of Cash
The following table summarizes our cash flows (in thousands):
| | | | | | | | | | | | | | |
| | Six Months Ended |
| | June 30, |
| | 2022 | | 2021 |
Operating activities | | $ | 28,731 | | | $ | 187,228 | |
Investing activities | | (27,431) | | | (32,495) | |
Financing activities | | 64,643 | | | (131,061) | |
|
| | | | | | | | |
| | Nine Months Ended |
| | September 30, |
| | 2017 | | 2016 |
Operating activities | | $ | 112,020 |
| | $ | 143,170 |
|
Investing activities | | (44,584 | ) | | (50,233 | ) |
Financing activities | | (52,746 | ) | | (75,697 | ) |
CashNet cash provided by operating activities of $112.0operations was $28.7 million decreased duringfor the first ninesix months of 20172022 compared to $187.2 million for the first ninesix months of 2016 due2021. The decrease in our operating cash flows was driven by federal tax payments of $79.5 million in 2022, which were allowed to a combination of growth-related increasesbe deferred and included in inventoriesaccrued expenses and receivables and the payment of our normal scheduled payment of our third quarter estimated taxes. These estimated payments for the third quarter of 2016other liabilities at December 31, 2021. Additional impacts relate to growth-driven working capital outflows, including increased inventory purchases, which were deferred as allowed for areas affectedlargely offset by severe storms and floodingan increase in Louisiana.net income.
CashNet cash used in investing activities for the first ninesix months of 20172022 decreased compared to the first ninesix months of 2016. While we made increased investments2021 due to a decrease in cash used for the acquisition of businesses of $7.5 million, offset by an increase in capital expenditures of $2.5 million.
Net cash provided by financing activities increased $195.7 million to $64.6 million for vehicle additions in the first ninesix months of 2017, our2022 compared to net cash used for acquisitions was considerably lower in the current period.
Cash used in financing activities decreasedof $131.1 million for the first ninesix months of 2017 compared to the first nine months of 2016, which2021. The increase in cash provided by financing activities reflects a $65.4$404.7 million increase in amounts provided by net borrowings,debt proceeds, partially offset by a $23.7$188.5 million increase in amounts used for share repurchases. Dividendsrepurchases and an increase in dividends paid to shareholders increased by $6.2 million in the first nine months of 2017 compared to the first nine months of 2016.$16.6 million.
Future Sources and Uses of Cash
Revolving
Credit Facility
On September 29, 2017, we
Our Credit Facility, as amended and restated our existing senioron December 30, 2021, provides for $1.25 billion in borrowing capacity consisting of a $750.0 million five-year unsecured revolving credit facility (theand a $500.0 million term loan facility. The Credit Facility) principally in the following ways:
extends the maturity date to September 29, 2022;
increases the borrowing capacity toFacility includes a $750.0 million from $465.0 million;
increasesrevolving credit facility and sublimits for the issuance of swingline loans;
decreasesloans and standby letters of credit. The term loans require quarterly amortization payments aggregating to 20% of the pricing of all loans; and
provides additional capacity under certain negative covenants related to indebtedness, liens, investments and dispositions of assets.
Pursuant to an accordion feature, the aggregate maximumoriginal principal amount of the commitments underloan during the third, fourth and fifth years of the loan, with all remaining principal due on the Credit Facility may be increased at our request and with agreement by the lenders by upmaturity date of September 25, 2026. We intend to $75.0 million, to a total of $825.0 million. We intendcontinue to use the Credit Facility for general corporate purposes, for future share repurchases and to fund future growth initiatives.
At SeptemberJune 30, 2017,2022, there was $415.3$566.2 million of revolving borrowings outstanding, a $4.2$500.0 million term loan, a $4.8 million standby letter of credit outstanding and $330.5$179.0 million available for borrowing under the Credit Facility. We utilizeCurrently, we pay interest rate swap contractson revolving and forward-starting interest rate swap contracts to reduce our exposure to fluctuations in variable interest rates for future interest payments onterm loan borrowings under the Credit Facility. As of September 30, 2017, we have three interestFacility at a variable rate swap contracts in place that became effective on October 19, 2016. These swap contracts were previously forward-starting and were amended in October 2015 to bring the fixed rates per our forward-starting contracts in line with current market rates and extend the hedged period for future interest payments on our Credit Facility. Now effective, these amended swap contracts convert the Credit Facility’s variable interest rate to fixed rates of 2.273% on a notional amount of $75.0 million and 2.111% on two separate notional amounts, one $25.0 million and the other $50.0 million, totaling $75.0 million. Interest expense related to the notional amounts under these swap contracts is based on the fixed ratesone month London Interbank Offered Rate (LIBOR), plus thean applicable margin on the Credit Facility. These interest rate swap contracts will terminate on November 20, 2019.
In July 2016 we entered into a forward-starting interest rate swap contract to extend the hedged period for future interest payments on our Credit Facility to its maturity date at that time. This swap contract will convert the Credit Facility’s variable interest rate to a fixed rate of 1.1425% on a notional amount of $150.0 million. The contract becomes effective on November 20, 2019 and terminates on November 20, 2020.
margin. The weighted average effective interest rate for the Credit Facility as of SeptemberJune 30, 20172022 was approximately 2.7%2.6%, excluding commitment fees.
Financial covenants
Term Facility
Our Term Facility, as amended on October 12, 2021, provides for $185.0 million in borrowing capacity and matures on December 30, 2026. Proceeds from the Term Facility were used to pay down the Credit Facility include maintenancein December 2019, adding borrowing capacity for future share repurchases, acquisitions and growth-oriented working capital expansion. The Term Facility is repaid in quarterly installments of a maximum average total leverage ratio and a minimum fixed charge coverage ratio. As1.250% of September 30, 2017, the calculations of these two covenants are detailed below:
Maximum Average Total Leverage Ratio. OnTerm Facility on the last business day of each fiscal quarter beginning in the first quarter of 2020. We classify the entire outstanding balance as Long-term debt on our averageConsolidated Balance Sheets as we intend and have the ability to refinance the obligations on a long-term basis. The total leverage ratio must be less than 3.25 to 1.00. Average Total Leverage Ratio is the ratio of the trailing twelve months (TTM) Average Total Funded Indebtedness plusquarterly payments will be equal to 33.75% of the TTM Average Accounts Securitization Proceeds divided byTerm Facility with the TTM EBITDA (as those terms are defined infinal principal repayment, equal to 66.25% of the Credit Facility). As of September 30, 2017, our average total leverage ratio equaled 1.60 (compared to 1.54 as ofTerm Facility, due on the maturity date. We may prepay amounts outstanding under the Term Facility without penalty other than interest breakage costs.
At June 30, 2017) and2022, there was $161.9 million outstanding under the TTMTerm Facility with a weighted average total debt amount used in this calculation was $496.5 million.
effective interest rate of 2.8%. We pay interest on borrowings under the Term Facility at a variable rate based on the one month LIBOR, plus an applicable margin.
Minimum Fixed Charge Coverage Ratio. On the last day of each fiscal quarter, our fixed charge ratio must be greater than or equal to 2.25 to 1.00. Fixed Charge Ratio is the ratio of the TTM EBITDAR divided by TTM Interest Expense paid or payable in cash plus TTM Rental Expense (as those terms are defined in the Credit Facility). As of September 30, 2017, our fixed charge ratio equaled 5.50 (compared to 5.52 as of June 30, 2017) and TTM Rental Expense was $53.5 million.
The Credit Facility also limits the declaration and payment of dividends on our common stock to no more than 50% of the preceding year’s Net Income (as defined in the Credit Facility), provided no default or event of default has occurred and is continuing, or would result from the payment of dividends. Additionally, we may declare and pay quarterly dividends notwithstanding that the aggregate amount of dividends paid would be in excess of the 50% limit described above so long as (i) the amount per share of such dividends does not exceed the amount per share paid during the most recent fiscal year in which we were in compliance with the 50% limit and (ii) our Average Total Leverage Ratio is less than 3.00 to 1.00 both immediately before and after giving pro forma effect to such dividends. Further, dividends must be declared and paid in a manner consistent with our past practice.
Under the Credit Facility, we may repurchase shares of our common stock provided no default or event of default has occurred and is continuing, or would result from the repurchase of shares, and our maximum average total leverage ratio (determined on a pro forma basis) is less than 2.50 to 1.00. Other covenants include restrictions on our ability to grant liens, incur indebtedness, make investments, merge or consolidate, and sell or transfer assets. Failure to comply with any of our financial covenants or any other terms of the Credit Facility could result in penalty payments, higher interest rates on our borrowings or the acceleration of the maturities of our outstanding debt.
Receivables Securitization Facility
Our two-year accounts receivable securitization facility (the Receivables FacilityFacility) offers us a lower costlower-cost form of financing, with a peak funding capacity offinancing. Under this facility, we can borrow up to $220.0$350.0 million between May 1April through June and June 30, which includes an additional seasonal funding capacity that is available between March 1 and July 31. Other funding capacities range from $65.0$175.0 million to $150.0$315.0 million throughoutduring the remaining months of the year. The Receivables Facility matures on November 1, 2023. We classify the entire outstanding balance as Long-term debt on our Consolidated Balance Sheets as we intend and have the ability to refinance the obligations on a long-term basis.
The Receivables Facility provides for the sale of certain of our receivables to a wholly ownedwholly-owned subsidiary (the Securitization Subsidiary). The Securitization Subsidiary transfers variable undivided percentage interests in the receivables and related rights to certain third partythird-party financial institutions in exchange for cash proceeds, limited to the applicable funding capacities. Upon payment of the receivables by customers, rather than remitting to the financial institutions the amounts collected, we retain such collections as proceeds for the sale of new receivables until payments become due.
The Receivables Facility contains terms and conditions (including representations, covenants and conditions precedent) customary for transactions of this type. Additionally, an amortization event will occur if we fail to maintain a maximum average total leverage ratio (average total funded debt/EBITDA) of 3.25 to 1.00 and a minimum fixed charge coverage ratio (EBITDAR/cash interest expense plus rental expense) of 2.25 to 1.00.
At SeptemberJune 30, 2017,2022, there was $142.3$350.0 million outstanding under the Receivables Facility at a weighted average effective interest rate of 2.0%2.5%, excluding commitment fees.
Financial Covenants
Financial covenants of the Credit Facility and the Term Facility include maintenance of a maximum average total leverage ratio and a minimum fixed charge coverage ratio, which are our most restrictive financial covenants. As of SeptemberJune 30, 2017,2022, the calculations of these two covenants are detailed below:
•Maximum Average Total Leverage Ratio. On the last day of each fiscal quarter, our average total leverage ratio must be less than 3.25 to 1.00. Average Total Leverage Ratio is the ratio of the trailing twelve months (TTM) Average Total Funded Indebtedness plus the TTM Average Accounts Securitization Proceeds divided by the TTM EBITDA (as those terms are defined in the Credit Facility). As of June 30, 2022, our average total leverage ratio equaled 1.15 (compared to 1.06 as of March 31, 2022) and the TTM average total indebtedness amount used in this calculation was $1.2 billion.
•Minimum Fixed Charge Coverage Ratio. On the last day of each fiscal quarter, our fixed charge ratio must be greater than or equal to 2.25 to 1.00. Fixed Charge Ratio is the ratio of the TTM EBITDAR divided by TTM Interest Expense paid or payable in cash plus TTM Rental Expense (as those terms are defined in the Credit Facility). As of June 30, 2022, our fixed charge ratio equaled 12.22 (compared to 12.38 as of March 31, 2022) and TTM Rental Expense was $75.4 million.
The Credit Facility and Term Facility limit the declaration and payment of dividends on our common stock to a manner consistent with past practice, provided no default or event of default has occurred and is continuing, or would result from the payment of dividends. We may declare and pay quarterly dividends so long as (i) the amount per share of such dividends is not greater than the most recently publicly announced amount of dividends per share and (ii) our Average Total Leverage Ratio is less than 3.25 to 1.00 both immediately before and after giving pro forma effect to such dividends. Under the Credit Facility and Term Facility, we may repurchase shares of our common stock provided no default or event of default has occurred and is continuing, or would result from the repurchase of shares, and our maximum average total leverage ratio (determined on a pro forma basis) is less than 3.25 to 1.00.
Other covenants in each of our credit facilities include restrictions on our ability to grant liens, incur indebtedness, make investments, merge or consolidate, and sell or transfer assets. Failure to comply with any of our financial covenants or any other terms of our credit facilities could result in, among other things, higher interest rates on our borrowings or the acceleration of the maturities of our outstanding debt.
Interest Rate Swaps
We utilize interest rate swap contracts and forward-starting interest rate swap contracts to reduce our exposure to fluctuations in variable interest rates for future interest payments on our variable rate borrowings. Interest expense related to the notional amounts under all swap contracts is based on the fixed rates plus the applicable margin on the respective borrowings.
As of June 30, 2022, we had three interest rate swap contracts in place and two forward-starting interest rate swap contracts, each of which has the effect of converting our exposure to variable interest rates on our variable rate borrowings to fixed interest rates. For more information, see Note 4 of “Notes to Consolidated Financial Statements” included in Part I, Item 1 of this Form 10-Q.
Compliance and Future Availability
As of June 30, 2022, we were in compliance with all material covenants and financial ratio requirements under our Credit Facility, our Term Facility and our Receivables Facility. We believe we will remain in compliance with all material covenants and financial ratio requirements throughout the next twelve months. For additional information regarding our debt arrangements, see Note 5 of “Notes to Consolidated Financial Statements,” included in Part II, Item 8 of our 20162021 Annual Report on Form 10-K.10-K, as updated by Note 5 of “Notes to Consolidated Financial Statements,” included in Part I, Item 1 of this Form 10-Q.
We believe we have adequate availability of capital to fund present operations and the current capacity to finance any working capital needs that may arise. We continually evaluate potential acquisitions and hold discussions with acquisition candidates. If suitable acquisition opportunities arise that would require financing, we believe that we would have the ability to finance any such transactions.
As of October 26, 2017, $53.4July 25, 2022, $422.8 million of the current Board authorizedBoard-authorized amount under our share repurchase program remained available. We expect to repurchase additional shares on the open market from time to time depending on market conditions. We plan to fund these repurchases with cash provided by operations and borrowings under the above-described credit and receivables facilities.
CRITICAL ACCOUNTING ESTIMATES
We prepare our Consolidated Financial Statements in accordance with U.S. generally accepted accounting principles (GAAP), which require management to make estimates and assumptions that affect reported amounts and related disclosures. Management identifies critical accounting estimates as:
those that require the use of assumptions about matters that are inherently and highly uncertain at the time the estimates are made; and
those for which changes in the estimate or assumptions, or the use of different estimates and assumptions, could have a material impact on our consolidated results of operations or financial condition.
Management has discussed the development, selection and disclosure of our critical accounting estimates with the Audit Committee of our Board. For a description of our critical accounting estimates that require us to make the most difficult, subjective or complex judgments, please see our 2016 Annual Report on Form 10-K. We have not changed these policies from those previously disclosed.
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (ASU 2014-09). The FASB also issued subsequent amendments to ASU 2014-09 to provide clarification on the guidance. ASU 2014-09 will be effective for annual periods beginning after December 15, 2017, which for us will be in the period beginning January 1, 2018. We are continuing to perform our detailed evaluation, using a five-step model specified in the guidance, to assess the impacts of the new standard.
Under the new standard, revenue will be recognized when we satisfy our performance obligation by transferring promised products or services to our customer. The standard allows for application of the guidance to a portfolio of contracts or performance obligations with similar characteristics. Since our individual sales transactions are very similar in nature, we anticipate applying the guidance to all transactions as a portfolio. We expect that the effects of applying this guidance to the portfolio would not differ materially from applying the guidance to individual performance obligations within that portfolio.
Our revenue recognition will be achieved upon delivery of products as there are no other promised services as part of our contracts with customers that are material in the context of the contract. Because our shipping and handling activities are performed before the customer obtains control of the goods, we do not consider these activities to be a promised service to the customer. Rather shipping and handling are activities to fulfill our promise to transfer the goods. Product warranties do not constitute a performance obligation for us, as products are warrantied directly by the manufacturer or the third party carrier.
To determine the amount of consideration to which we expect to be entitled in exchange for transferring promised goods, we have considered if variable consideration exists. We have reviewed our standard terms and conditions and our customary business practices to determine the transaction price. We have reviewed our pricing policies including marketing programs, coupons and free products for the purpose of determining whether we have any variable or non-cash consideration. We do not issue future-dated coupons or free product rebates. When we process manufacturer coupons, we record the customer sales price as revenue and receive reimbursement of the coupon value from the manufacturer. In addition, we reviewed our current accounting policies related to returns and price concessions for which no material changes in policy were noted. Volume rebates is a sales incentive program where we make a cash payment or apply credit to a customer account on a quarterly or annual basis, if the customer reaches a specified level of purchases. The volume rebates are accounted for as a reduction of the transaction price, and a liability is recorded until the related payment to the customer is made. We do not offer any volume discounts. We will continue our accounting policy election to exclude from revenue all amounts we collect and remit to governmental authorities.
The majority of our sales transactions do not require any additional performance obligation after delivery, therefore we do not have multiple performance obligations for which we will have to allocate the transaction price. We do not offer customer loyalty programs.
We expect to recognize revenue when control of the product has been transferred to the customer upon delivery to the customer or the freight carrier, if delivered by a third party, as we believe our performance obligation will be satisfied at that point in time.
We expect to apply the guidance using the modified retrospective transition method. Based on our analysis performed to date, we do not expect the adoption of ASU 2014-09 will have a material impact on our financial position or results of operations, but we expect it will result in additional disclosures regarding our revenue recognition policies. We also do not expect the adoption will require material or significant changes to our internal controls over financial reporting. We have expanded our revenue recognition inquiries to additional departments and updated our questionnaires primarily to identify matters that would signal variable consideration implications under the new guidance. We are also in the process of drafting additional pricing policies to address potential revenue recognition implications.
In February 2016, the FASB issued ASU 2016-02, Leases, which requires lessees to record most leases on their balance sheets but recognize expenses in a manner similar to current guidance. ASU 2016-02 will be effective for annual periods beginning after December 15, 2018. The guidance is required to be applied using a modified retrospective approach. The adoption of ASU 2016-02 will have a significant impact on our Consolidated Balance Sheets as we will be recording a right-of-use asset and corresponding liability for our current operating leases. We are evaluating the effect that ASU 2016-02 will have on our results of operations and related disclosures. We are primarily focused on evaluating our internal controls over financial reporting, including information technology requirements, related to the adoption of this new accounting pronouncement.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments, which changes the way companies evaluate credit losses for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model to evaluate impairment, potentially resulting in earlier recognition of allowances for losses. The new standard also requires enhanced disclosures, including the requirement to disclose the information used to track credit quality by year of origination for most financing receivables. ASU 2016-13 will be effective for annual periods beginning after December 15, 2019. Early adoption is permitted for all entities for annual periods beginning after December 15, 2018. We have not elected to early adopt this guidance. The guidance must be applied using a cumulative-effect transition method. We are currently evaluating the effect that ASU 2016-13 will have on our financial position, results of operations and related disclosures.
In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, which may change the classification of certain cash receipts and cash payments on an entity’s statement of cash flows. The new guidance specifies how cash flows should be classified for debt prepayment or extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds for the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance, distributions from equity method investees and beneficial interests in securitization transactions. Current guidance for these topics is principles-based, requiring judgment in application and creating diversity in practice. ASU 2016-15 will be effective for annual periods beginning after December 15, 2017 and must be applied retrospectively. Early adoption is permitted for all entities. We have not elected to early adopt this guidance. We are currently evaluating the effect that ASU 2016-15 will have on our financial position and related disclosures.
In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment, which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (commonly referred to as Step 2 under the current guidance). Rather, the measurement of a goodwill impairment charge will be based on the excess of a reporting unit’s carrying value over its fair value (Step 1 under the current guidance). ASU 2017-04 will be effective for annual and interim impairment tests performed in periods beginning after December 15, 2019 and should be applied prospectively. Early adoption is permitted for annual and interim goodwill impairment tests beginning after January 1, 2017. We are currently evaluating the effect that ASU 2017-04 will have on our financial position, results of operations and related disclosures.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
There have been no material changes during the six months ended June 30, 2022 from what we reported in our 2021 Annual Report on Form 10-K for the year ended December 31, 2016 that affect fiscal 2017.10-K. For additional information on our interest rate risk, refer to “Quantitative and Qualitative Disclosures about Market Risk” included in Part II, Item 7A in our 2021 Annual Report on Form 10-K.
Currency Risk
There have been no material changes during the six months ended June 30, 2022 from what we reported in our 2021 Annual Report on Form 10-K for the year ended December 31, 2016 that affect fiscal 2017.10-K. For additional information on our currency risk, refer to “Quantitative and Qualitative Disclosures about Market Risk” included in Part II, Item 7A in our 2021 Annual Report on Form 10-K.
Item 4. Controls and Procedures
The term “disclosure controls and procedures” is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the Act). The rules refer to the controls and other procedures designed to ensure that information required to be disclosed in reports that we file or submit under the Act is (1) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. As of SeptemberJune 30, 2017,2022, management, including theour CEO and CFO, performed an evaluation of the effectiveness of our disclosure controls and procedures. Based on that evaluation, management, including theour CEO and CFO, concluded that as of SeptemberJune 30, 2017,2022, our disclosure controls and procedures were effective.
We maintain a system of internal control over financial reporting that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Based on the most recent evaluation, we have concluded that no change in our internal control over financial reporting occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
The effectiveness of our system of disclosure controls and procedures or internal control over financial reporting is subject to certain limitations, including the exercise of judgment in designing, implementing and evaluating such systems, the assumptions used in identifying the likelihood of future events and the inability to eliminate misconduct completely. As a result, there can be no assurance that our control systems will detect all errors or fraud. By their nature, our system can provide only reasonable assurance regarding management's control objectives.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we are subject to various claims and litigation arising in the ordinary course of business, including product liability, personal injury, commercial, contract and employment matters. While the outcome of any litigation is inherently unpredictable, based on currently available facts and our current insurance coverages, we do not believe that the ultimate resolution of any of these matters will have a material adverse impact on our financial condition, results of operations or cash flows.
Item 1A. Risk Factors
There have been no material changes from the risk factors disclosed in Part I, Item 1A “Risk Factors” in our 2021 Annual Report on Form 10-K for the year ended December 31, 2016.10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The table below summarizes the repurchases of our common stock in the thirdsecond quarter of 2017:2022: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Period | | Total Number of Shares Purchased (1) | | Average Price Paid per Share | | Total Number of Shares Purchased as Part of Publicly Announced Plan | | Maximum Approximate Dollar Value of Shares That May Yet be Purchased Under the Plan (2) |
April 1-30, 2022 | | 68,974 | | | $ | 420.64 | | | 68,974 | | | $ | 413,772,800 | |
May 1-31, 2022 | | 306,365 | | | $ | 399.26 | | | 306,361 | | | $ | 487,683,064 | |
June 1-30, 2022 | | 171,431 | | | $ | 378.75 | | | 171,431 | | | $ | 422,753,395 | |
Total | | 546,770 | | | $ | 395.53 | | | 546,766 | | | |
(1)These shares may include shares of our common stock surrendered to us by employees in order to satisfy minimum tax withholding obligations in connection with certain exercises of employee stock options or lapses upon vesting of restrictions on previously restricted share awards, and/or to cover the exercise price of such options granted under our share-based compensation plans. There were 4 shares surrendered for this purpose in the second quarter of 2022.
(2)In May 2022, our Board authorized an additional $196.2 million under our share repurchase program for the repurchase of shares of our common stock in the open market at prevailing market prices. As of July 25, 2022, $422.8 million of the authorized amount remained available under our current share repurchase program.
Our Board may declare future dividends at their discretion, after considering various factors, including our earnings, capital requirements, financial position, contractual restrictions and other relevant business considerations. For a description of restrictions on dividends in our Credit Facility, Term Facility and Receivables Facility, see the “Liquidity and Capital Resources” section of Management’s Discussion and Analysis in Part I, Item 2 of this Form 10-Q. We cannot assure shareholders or potential investors that dividends will be declared or paid any time in the future if our Board determines that there is a better use of our funds.
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Period | | Total Number of Shares Purchased (1) | | Average Price Paid per Share | | Total Number of Shares Purchased as Part of Publicly Announced Plan (2) | | Maximum Approximate Dollar Value of Shares That May Yet be Purchased Under the Plan (3) |
July 1 - 31, 2017 | | 287,641 |
| | $ | 109.65 |
| | 287,641 |
| | $ | 159,133,234 |
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August 1 - 31, 2017 | | 871,775 |
| | $ | 107.25 |
| | 871,590 |
| | $ | 65,654,104 |
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September 1 - 30, 2017 | | 79,335 |
| | $ | 99.19 |
| | 79,335 |
| | $ | 57,785,144 |
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Total | | 1,238,751 |
| | $ | 107.29 |
| | 1,238,566 |
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| These shares may include shares of our common stock surrendered to us by employees in order to satisfy minimum tax withholding obligations in connection with certain exercises of employee stock options or lapses upon vesting of restrictions on previously restricted share awards, and/or to cover the exercise price of such options granted under our share-based compensation plans. There were 185 shares surrendered for this purpose in the third quarter of 2017. |
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(2)
| In May 2017, our Board authorized an additional $150.0 million under our share repurchase program for the repurchase of shares of our common stock in the open market at prevailing market prices or in privately negotiated transactions. |
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(3)
| As of October 26, 2017, $53.4 million of the authorized amount remained available under our current share repurchase program.
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Item 6. Exhibits
Exhibits filed as part of this report are listed below.
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| | | | | | Incorporated by Reference |
No. | | Description | | FiledFiled/ Furnished with this
Form 10-Q
| | Form | | File No. | | Date Filed |
| | Restated Certificate of Incorporation of the Company. | | | | 10-Q | | 000-26640 | | 8/9/2006 |
| | Amended and Restated Composite Bylaws of the Company. | | | | 8-K | | 000-26640 | | 12/20/20122/8/2019 |
| | Form of certificate representing shares of common stock of the Company. | | | | 8-K | | 000-26640 | | 5/19/2006 |
| | Certification by Mark W. JoslinChief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | X | | | | | | |
| | Certification by Manuel J. Perez de la MesaChief Executive Officer pursuant to Rule 13a-14(a) and 15d‑14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | X | | | | | | |
| | Certification by Manuel J. Perez de la MesaChief Executive Officer and Mark W. JoslinChief Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | X | | | | | | |
101.INS | + | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | | X | | | | | | |
101.SCH | + | Inline XBRL Taxonomy Extension Schema Document | | X | | | | | | |
101.CAL | + | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | X | | | | | | |
101.DEF | + | Inline XBRL Taxonomy Extension Definition Linkbase Document | | X | | | | | | |
101.LAB | + | Inline XBRL Taxonomy Extension Label Linkbase Document | | X | | | | | | |
101.PRE | + | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | X | | | | | | |
104 | + | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) | | X | | | | | | |
+ Attached as Exhibit 101 to this report are the following items formatted in XBRL (ExtensibleiXBRL (Inline Extensible Business Reporting Language):
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1. | Consolidated Statements of Income for the three and nine months ended September 30, 2017 and September 30, 2016; |
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2. | Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2017 and September 30, 2016; |
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3. | Consolidated Balance Sheets at September 30, 2017, December 31, 2016 and September 30, 2016; |
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4. | Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and |
September1.Consolidated Statements of Income for the three and six months ended June 30, 2016;2022 and
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5. | Notes to Consolidated Financial Statements. |
June 30, 2021;
2.Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2022 and June 30, 2021;
3.Consolidated Balance Sheets at June 30, 2022, December 31, 2021 and June 30, 2021;
4.Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and June 30, 2021;
5.Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2022 and June 30, 2021; and
6.Notes to Consolidated Financial Statements.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on October 31, 2017.
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| | POOL CORPORATION |
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| By: | /s/ Mark W. JoslinMelanie Housey Hart |
| | Mark W. JoslinMelanie Housey Hart |
| | Senior Vice President and Chief Financial Officer, and duly authorized signatory on behalf of the registrant |