Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 24, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2023 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 0-26640 | |
Entity Registrant Name | POOL CORPORATION | |
Entity Central Index Key | 0000945841 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 36-3943363 | |
Entity Address, Address Line One | 109 Northpark Boulevard, | |
Entity Address, City or Town | Covington, | |
Entity Address, State or Province | LA | |
Entity Address, Postal Zip Code | 70433-5001 | |
City Area Code | (985) | |
Local Phone Number | 892-5521 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | POOL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 39,038,250 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net sales | $ 1,206,774 | $ 1,412,650 |
Cost of sales | 837,019 | 965,461 |
Gross profit | 369,755 | 447,189 |
Selling and administrative expenses | 223,984 | 211,466 |
Operating income | 145,771 | 235,723 |
Interest and other non-operating expenses, net | 15,835 | 5,198 |
Income before income taxes and equity earnings | 129,936 | 230,525 |
Provision for income taxes | 28,273 | 51,322 |
Equity earnings in unconsolidated investments, net | 36 | 58 |
Net income | $ 101,699 | $ 179,261 |
Earnings per share: | ||
Basic (in dollars per share) | $ 2.60 | $ 4.46 |
Diluted (in dollars per share) | $ 2.58 | $ 4.41 |
Weighted average shares outstanding: [Abstract] | ||
Basic (in shares) | 38,877 | 39,932 |
Diluted (in shares) | 39,189 | 40,392 |
Cash dividends declared per common share | $ 1 | $ 0.80 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income | $ 101,699 | $ 179,261 |
Other comprehensive (loss) income: | ||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax | 2,469 | (214) |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax | (3,809) | 11,598 |
Total other comprehensive (loss) income | (1,340) | 11,384 |
Comprehensive income | $ 100,359 | $ 190,645 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, Tax | $ 1,269 | $ (3,866) |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 |
Current assets: | |||
Cash and cash equivalents | $ 26,470 | $ 45,591 | $ 35,365 |
Receivables, net | 163,048 | 128,247 | 195,951 |
Receivables pledged under receivables facility | 401,123 | 223,201 | 483,976 |
Product inventories, net | 1,686,683 | 1,591,060 | 1,641,155 |
Prepaid expenses and other current assets | 27,875 | 30,892 | 42,310 |
Total current assets | 2,305,199 | 2,018,991 | 2,398,757 |
Property and equipment, net | 200,997 | 193,709 | 180,504 |
Goodwill Balances | 693,242 | 691,993 | 688,350 |
Other intangible assets, net | 303,753 | 305,450 | 310,848 |
Equity interest investments | 1,206 | 1,248 | 1,184 |
Operating lease assets | 274,428 | 269,608 | 260,285 |
Other assets | 84,004 | 84,438 | 42,213 |
Total assets | 3,862,829 | 3,565,437 | 3,882,141 |
Current liabilities: | |||
Accounts payable | 739,749 | 406,667 | 685,946 |
Accrued expenses and other current liabilities | 126,093 | 168,521 | 179,552 |
Short-term borrowings and current portion of long-term debt | 33,080 | 25,042 | 21,265 |
Current operating lease liabilities | 78,498 | 75,484 | 71,685 |
Total current liabilities | 977,420 | 675,714 | 958,448 |
Deferred income taxes | 57,868 | 58,759 | 40,944 |
Long-term debt, net | 1,332,670 | 1,361,761 | 1,483,808 |
Other long-term liabilities | 37,623 | 35,471 | 32,940 |
Non-current operating lease liabilities | 200,498 | 198,538 | 191,723 |
Total liabilities | 2,606,079 | 2,330,243 | 2,707,863 |
Stockholders' equity: | |||
Common stock | 39 | 39 | 40 |
Additional paid-in capital | 586,595 | 575,776 | 558,755 |
Retained earnings | 665,561 | 653,484 | 611,583 |
Accumulated other comprehensive income | 4,555 | 5,895 | 3,900 |
Total stockholders’ equity | 1,256,750 | 1,235,194 | 1,174,278 |
Total liabilities and stockholders' equity | $ 3,862,829 | $ 3,565,437 | $ 3,882,141 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 |
Statement of Financial Position [Abstract] | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 |
Common Stock, Shares, Outstanding | 39,032,631 | 39,069,419 | 40,110,126 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating activities | ||
Net Income | $ 101,699 | $ 179,261 |
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] | ||
Depreciation | 7,632 | 7,663 |
Amortization | 2,135 | 2,192 |
Share-based compensation | 4,923 | 3,657 |
Equity in earnings of unconsolidated investments, net | (36) | (58) |
Other | 2,732 | 5,777 |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||
Receivables | (211,015) | (303,400) |
Product inventories | (96,011) | (306,582) |
Prepaid expenses and other assets | (5,786) | (23,330) |
Accounts payable | 332,800 | 287,449 |
Accrued expenses and other liabilities | (35,870) | (60,738) |
Net Cash Provided by operating activities | 103,203 | (208,109) |
Investing activities | ||
Acquisition of businesses, net of cash acquired | (1,760) | 0 |
Purchases of property and equipment, net of sale proceeds | (15,570) | (9,159) |
Other Investments | (230) | 0 |
Net cash used in investing activities | (17,560) | (9,159) |
Financing activities | ||
Proceeds from revolving line of credit | 256,079 | 564,288 |
Payments on revolving line of credit | (376,895) | (604,960) |
Proceeds from Long-term Lines of Credit | 0 | 250,000 |
Proceeds from asset-backed financing | 151,200 | 155,000 |
Payments on asset-backed financing | (51,100) | (50,000) |
Payments on term facility | (2,313) | (2,313) |
Proceeds from short-term borrowings and current portion of long-term debt | 3,011 | 10,277 |
Payments on short-term borrowings and current portion of long-term debt | (1,223) | (784) |
Payments of deferred and contingent acquisition consideration | (551) | (1,374) |
Proceeds from stock issued under share-based compensation plans | 5,896 | 3,135 |
Payments of cash dividends | (39,073) | (32,132) |
Purchases of treasury stock | (50,549) | (62,420) |
Net cash used in financing activities | (105,518) | 228,717 |
Effect of exchange rate changes on cash and cash equivalents | 754 | (405) |
Change in cash and cash equivalents | (19,121) | 11,044 |
Cash and cash equivalents at beginning of period | 45,591 | 24,321 |
Cash and cash equivalents at end of period | $ 26,470 | $ 35,365 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital | Retained Earnings (Deficit) | Accumulated Other Comprehensive Income (Loss) |
Balance (in shares) at Dec. 31, 2021 | 40,193,000 | ||||
Balance at Dec. 31, 2021 | $ 1,071,393 | $ 40 | $ 551,963 | $ 526,874 | $ (7,484) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 179,261 | 0 | 0 | 179,261 | 0 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax | (214) | 0 | 0 | 0 | (214) |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, Tax | (3,866) | ||||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax | 11,598 | $ 0 | 0 | 0 | 11,598 |
Repurchases of common stock, net of retirements (shares) | (138,000) | ||||
Stock Repurchased and Retired During Period, Value | (62,420) | $ 0 | 0 | (62,420) | 0 |
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition | 3,657 | $ 0 | 3,657 | 0 | 0 |
Issuance of shares under share-based compensation plans (shares) | 55,000 | ||||
Issuance of stock under share-based compensation plans | 3,135 | $ 0 | 3,135 | 0 | 0 |
Dividends, Common Stock, Cash | $ (32,132) | $ 0 | 0 | (32,132) | 0 |
Balance (in shares) at Mar. 31, 2022 | 40,110,126 | 40,110,000 | |||
Balance at Mar. 31, 2022 | $ 1,174,278 | $ 40 | 558,755 | 611,583 | 3,900 |
Balance (in shares) at Dec. 31, 2022 | 39,069,419 | 39,069,000 | |||
Balance at Dec. 31, 2022 | $ 1,235,194 | $ 39 | 575,776 | 653,484 | 5,895 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 101,699 | 0 | 0 | 101,699 | 0 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax | 2,469 | 0 | 0 | 0 | 2,469 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, Tax | 1,269 | ||||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax | (3,809) | $ 0 | 0 | 0 | (3,809) |
Repurchases of common stock, net of retirements (shares) | (144,000) | ||||
Stock Repurchased and Retired During Period, Value | (50,549) | $ 0 | 0 | (50,549) | 0 |
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition | 4,923 | $ 0 | 4,923 | 0 | 0 |
Issuance of shares under share-based compensation plans (shares) | 108,000 | ||||
Issuance of stock under share-based compensation plans | 5,896 | $ 0 | 5,896 | 0 | 0 |
Dividends, Common Stock, Cash | $ (39,073) | $ 0 | 0 | (39,073) | 0 |
Balance (in shares) at Mar. 31, 2023 | 39,032,631 | 39,033,000 | |||
Balance at Mar. 31, 2023 | $ 1,256,750 | $ 39 | $ 586,595 | $ 665,561 | $ 4,555 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, Tax | $ 1,269 | $ (3,866) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Description of New Accounting Pronouncements Not yet Adopted | Summary of Significant Accounting Policies Pool Corporation (the Company , which may be referred to as we, us or our ) prepared the unaudited interim Consolidated Financial Statements following U.S. generally accepted accounting principles (GAAP) and the requirements of the Securities and Exchange Commission (SEC) for interim financial information. As permitted under those rules, we have condensed or omitted certain footnotes and other financial information required for complete financial statements. The interim Consolidated Financial Statements include all normal and recurring adjustments that are necessary for a fair presentation of our financial position and operating results. All significant intercompany accounts and intercompany transactions have been eliminated. A description of our significant accounting policies is included in our 2022 Annual Report on Form 10-K. You should read the interim Consolidated Financial Statements in conjunction with the Consolidated Financial Statements and accompanying notes in our 2022 Annual Report on Form 10-K. The results for our three-month period ended March 31, 2023, are not necessarily indicative of the expected results for our fiscal year ending December 31, 2023. Income Taxes We reduce federal and state income taxes payable by the tax benefits associated with the exercise of nonqualified stock options and the lapse of restrictions on restricted stock awards. To the extent realized tax deductions exceed the amount of previously recognized deferred tax benefits related to share-based compensation, we record an excess tax benefit. We record all excess tax benefits as a component of income tax benefit or expense on the Consolidated Statements of Income in the period in which stock options are exercised or restrictions on restricted stock awards lapse. We recorded excess tax benefits of $4.8 million in the first quarter of 2023 compared to $7.3 million in the first quarter of 2022. Retained Earnings We account for the retirement of treasury shares as a reduction of Retained earnings. As of March 31, 2023, the Retained earnings on our Consolidated Balance Sheets reflects cumulative net income, the cumulative impact of adjustments for changes in accounting pronouncements, treasury share retirements since the inception of our share repurchase programs of $2.2 billion and cumulative dividends of $980.1 million. Accumulated Other Comprehensive Income The table below presents the components of our Accumulated other comprehensive income balance (in thousands): March 31, December 31, 2023 2022 2022 Foreign currency translation adjustments $ (17,139) $ (9,794) $ (19,608) Unrealized gains on interest rate swaps, net of tax 21,694 13,694 25,503 Accumulated other comprehensive income $ 4,555 $ 3,900 $ 5,895 Recent Accounting Pronouncements Pending Adoption The following table summarizes recent accounting pronouncements that we plan to adopt in future periods: Standard Description Effective Date Effect on Financial Statements and Other Significant Matters ASU 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting ASU 2021-01, Reference Rate Reform (Topic 848): Scope ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 ASU 2020-04, Reference Rate Reform (Topic 848), provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The guidance provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met. These transactions include contract modifications, hedging relationships and sale or transfer of debt securities classified as held-to-maturity. Entities may apply the provisions of the new standard as of the beginning of the reporting period when the election is made. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which refined the scope of ASC 848 and clarified some of its guidance as it relates to recent rate reform activities. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extended the date for using optional expedients and exceptions to December 31, 2024. The provisions of these updates are available until December 31, 2024. In 2022, we adopted the hedge accounting expedient related to the probability of forecasted transactions to assert probability of the hedged interest regardless of any expected modification related to reference rate reform. We may apply other elections as applicable. We do not expect that there will be a material impact to the financial statements as a result of adopting any of the optional expedient or exceptions from these ASUs. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share We calculate basic and diluted earnings per share using the two-class method. Earnings per share under the two-class method is calculated using net income attributable to common stockholders, which is net income reduced by the earnings allocated to participating securities. Our participating securities include share-based payment awards that contain a non-forfeitable right to receive dividends and are considered to participate in undistributed earnings with common shareholders. Participating securities excluded from weighted average common shares outstanding were 213,000 for the three months ended March 31, 2023 and 239,000 for the three months ended March 31, 2022. The table below presents the computation of earnings per share, including the reconciliation of basic and diluted weighted average shares outstanding (in thousands, except per share data): Three Months Ended March 31, 2023 2022 Net income $ 101,699 $ 179,261 Amounts allocated to participating securities (548) (1,051) Net income attributable to common stockholders $ 101,151 $ 178,210 Weighted average common shares outstanding: Basic 38,877 39,932 Effect of dilutive securities: Stock options and employee stock purchase plan 312 460 Diluted 39,189 40,392 Earnings per share attributable to common stockholders: Basic $ 2.60 $ 4.46 Diluted $ 2.58 $ 4.41 Anti-dilutive stock options excluded from diluted earnings per share computations (1) 64 1 (1) Since these options have exercise prices that are higher than the average market prices of our common stock, including them in the calculation would have an anti-dilutive effect on earnings per share. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2023 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions In March 2023, we acquired the distribution assets of Pro-Water Irrigation & Landscape Supply, Inc., a wholesale distributor of irrigation and landscape supply products, adding two locations in Arizona. In April 2022, we acquired the distribution assets of Tri-State Pool Distributors, a wholesale distributor of swimming pool equipment, chemicals and supplies, adding one location in West Virginia. |
Fair Value Measurements and Int
Fair Value Measurements and Interest Rate Swaps | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Interest Rate Swaps | Fair Value Measurements and Interest Rate Swaps Recurring Fair Value Measurements Our assets and liabilities that are measured at fair value on a recurring basis include the unrealized gains or losses on our interest rate swap contracts, our deferred compensation plan asset and liability and contingent consideration related to recent acquisitions. The three levels of the fair value hierarchy under the accounting guidance are described below: Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets. Level 2 Inputs to the valuation methodology include: • quoted prices for similar assets or liabilities in active markets; • quoted prices for identical or similar assets or liabilities in inactive markets; • inputs other than quoted prices that are observable for the asset or liability; or • inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The table below presents our assets and liabilities measured and recorded at fair value on a recurring basis (in thousands): Fair Value at March 31, Input Level Classification 2023 2022 Assets Unrealized gains on interest rate swaps Level 2 Other assets $ 28,970 $ 18,817 Deferred compensation plan asset Level 1 Other assets 14,014 18,338 Liabilities Contingent consideration liabilities Level 3 Accrued expenses and other current liabilities $ — $ 600 Unrealized losses on interest rate swaps Level 2 Accrued expenses and other current liabilities — 514 Deferred compensation plan liability Level 1 Other long-term liabilities 14,014 18,338 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. We use significant other observable market data or assumptions (Level 2 inputs) in determining the fair value of our interest rate swap contracts and forward-starting interest rate swap contract that we believe market participants would use in pricing similar assets or liabilities, including assumptions about counterparty risk. Our fair value estimates reflect an income approach based on the terms of the interest rate swap contracts and inputs corroborated by observable market data including interest rate curves. We recognize any differences between the variable interest rate in effect and the fixed interest rates per our swap contracts as an adjustment to interest expense over the life of the swaps. To the extent our derivatives are effective in offsetting the variability of the hedged cash flows, we record the changes in the estimated fair value of our interest rate swap contracts to Accumulated other comprehensive income on the Consolidated Balance Sheets. We currently have two swap contracts in place. These swap contracts were previously forward-starting and convert the variable interest rate to a fixed interest rate on a portion of our variable rate borrowings. Interest expense related to the notional amounts under these swap contracts is based on the fixed rates plus the applicable margin on a portion of our variable rate borrowings. Changes in the estimated fair value of these interest rate swap contracts are recorded to Accumulated other comprehensive income on the Consolidated Balance Sheets. The following table provides additional details related to these swap contracts: Derivative Inception Date Effective Date Termination Date Notional Amount Fixed Interest Rate Interest rate swap 1 February 5, 2020 February 26, 2021 February 28, 2025 $150.0 1.3800% Interest rate swap 2 March 9, 2020 September 29, 2022 February 26, 2027 $150.0 0.7400% For the interest rate swap contracts in effect at March 31, 2023, a portion of the change in the estimated fair value between periods relates to future interest expense. Recognition of the change in fair value between periods attributable to accrued interest is reclassified from Accumulated other comprehensive income on the Consolidated Balance Sheets to Interest and other non-operating expenses, net on the Consolidated Statements of Income. These amounts were not material in the three-month periods ended March 31, 2023 or March 31, 2022. We have entered into a forward-starting interest rate swap contract to extend the hedged period for future interest payments on a portion of our variable rate borrowings. The following table provides details related to our forward-starting interest rate swap contract: Derivative Inception Date Effective Date Termination Date Notional Fixed Forward-starting interest rate swap March 9, 2020 February 28, 2025 February 26, 2027 $150.0 0.8130% Failure of our swap counterparties would result in the loss of any potential benefit to us under our swap agreements. In this case, we would still be obligated to pay the variable interest payments underlying our debt agreements. Additionally, failure of our swap counterparties would not eliminate our obligation to continue to make payments under our existing swap agreements if we were in a net pay position. Our interest rate swap contracts and forward-starting interest rate swap contract are subject to master netting arrangements. According to our accounting policy, we do not offset the fair values of assets with the fair values of liabilities related to these contracts. Other Our deferred compensation plan asset represents investments in securities (primarily mutual funds) traded in an active market (Level 1 inputs) held for the benefit of certain employees as part our deferred compensation plan. We record an equal and offsetting deferred compensation plan liability, which represents our obligation to participating employees. Changes in the fair value of the plan asset and liability are reflected in Selling and administrative expenses in the Consolidated Statements of Income. The carrying values of cash and cash equivalents, receivables, accounts payable and accrued liabilities approximate fair value due to the short maturity of those instruments. The carrying value of our long-term debt approximates its fair value. Our determination of the estimated fair value reflects a discounted cash flow model using our estimates, including assumptions related to borrowing rates (Level 3 inputs). Nonrecurring Fair Value Measurements In addition to our assets and liabilities that we measure at fair value on a recurring basis, our assets and liabilities are also subject to nonrecurring fair value measurements. Generally, our assets are recorded at fair value on a nonrecurring basis as a result of impairment charges or business combinations. In the three months ended March 31, 2023 and March 31, 2022, we did not record any significant nonrecurring fair value measurements for assets or liabilities in periods subsequent to their initial recognition. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt The table below presents the components of our debt (in thousands): March 31, 2023 2022 Variable rate debt Short-term borrowings $ 3,011 $ 10,854 Current portion of long-term debt: Australian credit facility 11,319 10,411 Current portion of term loans under credit facility 18,750 — Short-term borrowings and current portion of long-term debt $ 33,080 $ 21,265 Long-term portion: Revolving credit facility 398,895 532,253 Term loan under credit facility 481,250 500,000 Term facility 154,938 164,188 Receivables securitization facility 299,600 290,000 Less: financing costs, net 2,013 2,633 Long-term debt, net 1,332,670 1,483,808 Total debt $ 1,365,750 $ 1,505,073 Our accounts receivable securitization facility (the “Receivables Facility”) provides for the sale of certain of our receivables to a wholly-owned subsidiary (the “Securitization Subsidiary”). The Securitization Subsidiary transfers variable undivided percentage interests in the receivables and related rights to certain third-party financial institutions in exchange for cash proceeds, limited to the applicable funding capacities. We account for the sale of the receivable interests as a secured borrowing on our Consolidated Balance Sheets. The receivables subject to the agreement collateralize the cash proceeds received from the third-party financial institutions. We classify the entire outstanding balance as Long-term debt, net on our Consolidated Balance Sheets as we intend and have the ability to refinance the obligations on a long-term basis. We present the receivables that collateralize the cash proceeds separately as Receivables pledged under receivables facility on our Consolidated Balance Sheets. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Pool Corporation (the Company , which may be referred to as we, us or our ) prepared the unaudited interim Consolidated Financial Statements following U.S. generally accepted accounting principles (GAAP) and the requirements of the Securities and Exchange Commission (SEC) for interim financial information. As permitted under those rules, we have condensed or omitted certain footnotes and other financial information required for complete financial statements. The interim Consolidated Financial Statements include all normal and recurring adjustments that are necessary for a fair presentation of our financial position and operating results. All significant intercompany accounts and intercompany transactions have been eliminated. |
Newly Adopted Accounting Pronouncements | |
Income Taxes | We reduce federal and state income taxes payable by the tax benefits associated with the exercise of nonqualified stock options and the lapse of restrictions on restricted stock awards. To the extent realized tax deductions exceed the amount of previously recognized deferred tax benefits related to share-based compensation, we record an excess tax benefit. We record all excess tax benefits as a component of income tax benefit or expense on the Consolidated Statements of Income in the period in which stock options are exercised or restrictions on restricted stock awards lapse. |
Retained Earnings | We account for the retirement of treasury shares as a reduction of Retained earnings. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Accumulated Other Comprehensive Income | The table below presents the components of our Accumulated other comprehensive income balance (in thousands): March 31, December 31, 2023 2022 2022 Foreign currency translation adjustments $ (17,139) $ (9,794) $ (19,608) Unrealized gains on interest rate swaps, net of tax 21,694 13,694 25,503 Accumulated other comprehensive income $ 4,555 $ 3,900 $ 5,895 |
Schedule of Recent Accounting Pronouncements | The following table summarizes recent accounting pronouncements that we plan to adopt in future periods: Standard Description Effective Date Effect on Financial Statements and Other Significant Matters ASU 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting ASU 2021-01, Reference Rate Reform (Topic 848): Scope ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 ASU 2020-04, Reference Rate Reform (Topic 848), provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The guidance provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met. These transactions include contract modifications, hedging relationships and sale or transfer of debt securities classified as held-to-maturity. Entities may apply the provisions of the new standard as of the beginning of the reporting period when the election is made. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which refined the scope of ASC 848 and clarified some of its guidance as it relates to recent rate reform activities. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extended the date for using optional expedients and exceptions to December 31, 2024. The provisions of these updates are available until December 31, 2024. In 2022, we adopted the hedge accounting expedient related to the probability of forecasted transactions to assert probability of the hedged interest regardless of any expected modification related to reference rate reform. We may apply other elections as applicable. We do not expect that there will be a material impact to the financial statements as a result of adopting any of the optional expedient or exceptions from these ASUs. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Computation of earnings per share and reconciliation of basic and diluted weighted average common shares outstanding | Three Months Ended March 31, 2023 2022 Net income $ 101,699 $ 179,261 Amounts allocated to participating securities (548) (1,051) Net income attributable to common stockholders $ 101,151 $ 178,210 Weighted average common shares outstanding: Basic 38,877 39,932 Effect of dilutive securities: Stock options and employee stock purchase plan 312 460 Diluted 39,189 40,392 Earnings per share attributable to common stockholders: Basic $ 2.60 $ 4.46 Diluted $ 2.58 $ 4.41 Anti-dilutive stock options excluded from diluted earnings per share computations (1) 64 1 |
Fair Value Measurements and I_2
Fair Value Measurements and Interest Rate Swaps (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Estimated fair value of contracts | The table below presents our assets and liabilities measured and recorded at fair value on a recurring basis (in thousands): Fair Value at March 31, Input Level Classification 2023 2022 Assets Unrealized gains on interest rate swaps Level 2 Other assets $ 28,970 $ 18,817 Deferred compensation plan asset Level 1 Other assets 14,014 18,338 Liabilities Contingent consideration liabilities Level 3 Accrued expenses and other current liabilities $ — $ 600 Unrealized losses on interest rate swaps Level 2 Accrued expenses and other current liabilities — 514 Deferred compensation plan liability Level 1 Other long-term liabilities 14,014 18,338 |
Schedule of Interest Rate Derivatives | The following table provides additional details related to these swap contracts: Derivative Inception Date Effective Date Termination Date Notional Amount Fixed Interest Rate Interest rate swap 1 February 5, 2020 February 26, 2021 February 28, 2025 $150.0 1.3800% Interest rate swap 2 March 9, 2020 September 29, 2022 February 26, 2027 $150.0 0.7400% Derivative Inception Date Effective Date Termination Date Notional Fixed Forward-starting interest rate swap March 9, 2020 February 28, 2025 February 26, 2027 $150.0 0.8130% |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The table below presents the components of our debt (in thousands): March 31, 2023 2022 Variable rate debt Short-term borrowings $ 3,011 $ 10,854 Current portion of long-term debt: Australian credit facility 11,319 10,411 Current portion of term loans under credit facility 18,750 — Short-term borrowings and current portion of long-term debt $ 33,080 $ 21,265 Long-term portion: Revolving credit facility 398,895 532,253 Term loan under credit facility 481,250 500,000 Term facility 154,938 164,188 Receivables securitization facility 299,600 290,000 Less: financing costs, net 2,013 2,633 Long-term debt, net 1,332,670 1,483,808 Total debt $ 1,365,750 $ 1,505,073 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Accounting Policies [Abstract] | ||
Excess tax benefit | $ 4.8 | $ 7.3 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Retained Earnings (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Retained Earnings (Accumulated Deficit) [Abstract] | |
Cumulative share repurchases | $ 2,200 |
Cumulative dividends | $ 980.1 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 |
Accumulated Other Comprehensive Income [Line Items] | |||
Accumulated other comprehensive income | $ 4,555 | $ 5,895 | $ 3,900 |
AOCI Attributable to Parent | |||
Accumulated Other Comprehensive Income [Line Items] | |||
Accumulated other comprehensive income | 4,555 | 5,895 | 3,900 |
Foreign currency translation adjustments | |||
Accumulated Other Comprehensive Income [Line Items] | |||
Accumulated other comprehensive income | (17,139) | (19,608) | (9,794) |
Unrealized (losses) gains on interest rate swaps, net of tax | |||
Accumulated Other Comprehensive Income [Line Items] | |||
Accumulated other comprehensive income | $ 21,694 | $ 25,503 | $ 13,694 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net Income | $ 101,699 | $ 179,261 |
Participating Securities, Distributed and Undistributed Earnings (Loss), Basic | (548) | (1,051) |
Net Income (Loss) Available to Common Stockholders, Basic | $ 101,151 | $ 178,210 |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Anti-dilutive stock options excluded from diluted earnings per share computations (in shares) | 64 | 1 |
Incremental Common Shares Attributable to Participating Nonvested Shares with Non-forfeitable Dividend Rights | 213,000 | 239,000 |
Weighted average shares outstanding: [Abstract] | ||
Basic (in shares) | 38,877 | 39,932 |
Effect of dilutive securities: [Abstract] | ||
Stock options and employee stock purchase plan (in shares) | 312 | 460 |
Diluted (in shares) | 39,189 | 40,392 |
Earnings Per Share, Basic [Abstract] | ||
Basic (in dollars per share) | $ 2.60 | $ 4.46 |
Earnings Per Share, Basic and Diluted [Abstract] | ||
Diluted (in dollars per share) | $ 2.58 | $ 4.41 |
Acquisitions (Details)
Acquisitions (Details) - numberOfReportingUnits | Mar. 31, 2023 | Apr. 30, 2022 |
WEST VIRGINIA | Tri-State Pool Distributors | ||
Business Acquisition [Line Items] | ||
Business Combination, Number of Locations | 1 | |
ARIZONA | Pro-Water Irrigation & Landscape Supply, Inc. | ||
Business Acquisition [Line Items] | ||
Business Combination, Number of Locations | 2 |
Fair Value Measurements and I_3
Fair Value Measurements and Interest Rate Swaps - Recurring Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred Compensation Plan Assets | $ 14,014 | $ 18,338 |
Deferred Compensation Liability, Classified, Noncurrent | 14,014 | 18,338 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unrealized gains on interest rate swaps | 28,970 | 18,817 |
Unrealized losses on interest rate swaps | 0 | 514 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liabilities | $ 0 | $ 600 |
Fair Value Measurements and I_4
Fair Value Measurements and Interest Rate Swaps - Interest Rate Swaps (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 09, 2020 | Feb. 05, 2020 | |
Interest rate swap 1 | |||
Derivative [Line Items] | |||
Effective Date | Feb. 26, 2021 | ||
Termination Date | Feb. 28, 2025 | ||
Notional Amount (in millions) | $ 150,000 | ||
Fixed Interest Rate | 1.38% | ||
Interest rate swap 2 | |||
Derivative [Line Items] | |||
Effective Date | Sep. 29, 2022 | ||
Termination Date | Feb. 26, 2027 | ||
Notional Amount (in millions) | $ 150,000 | ||
Fixed Interest Rate | 0.74% |
Fair Value Measurements and I_5
Fair Value Measurements and Interest Rate Swaps - Forward-Starting Interest Rate Swaps (Details) - Forward-starting interest rate swap - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 09, 2020 | |
Derivative [Line Items] | ||
Effective Date | Feb. 28, 2025 | |
Termination Date | Feb. 26, 2027 | |
Derivative, Notional Amount | $ 150 | |
Fixed Interest Rate | 0.813% |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Debt Instrument [Line Items] | ||
Short-term borrowings | $ 3,011 | $ 10,854 |
Australian credit facility | 11,319 | 10,411 |
Current portion of term loans under credit facility | 18,750 | 0 |
Short-term borrowings and current portion of long-term debt | 33,080 | 21,265 |
Long-term portion: | ||
Less: financing costs, net | 2,013 | 2,633 |
Long-term debt, net | 1,332,670 | 1,483,808 |
Total debt | 1,365,750 | 1,505,073 |
Revolving Credit Facility | ||
Long-term portion: | ||
Long-term debt, gross | 398,895 | 532,253 |
Term loan under credit facility | ||
Long-term portion: | ||
Term facility | 481,250 | 500,000 |
Term Facility [Member] | ||
Long-term portion: | ||
Term facility | 154,938 | 164,188 |
Receivables Securitization Facility | ||
Long-term portion: | ||
Long-term debt, gross | $ 299,600 | $ 290,000 |