Pool (POOL) 17 Feb 222021 Q4 Earnings call transcript

00:04 Good morning and welcome to the Pool Corporation Fourth Quarter 2021 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. 00:32 I would now like to turn the conference over to Melanie Hart, Vice President and Chief Financial Officer. ahead. go Please

to everyone XXXX conference earnings XX:XX our call. Welcome year-end

Actual and Our discussed for today periods. the materially factors responses cause Information may are that results today. comments, those XXXX may discussed from include future and outlook questions results regarding management's to XX-K. to discussion, differ in XX:XX projected differ our including forward-looking and could variables results actual statements, from

reconciliation our may release we non-GAAP references our Pete? comments. is A measures make to and our and corporate press in addition, In website Investor financial included description Arvan. now I’ll our in call to XX:XX turn of to our over financial and non-GAAP President our Peter measures in section. the Relations posted CEO,

morning on thank everyone Melanie, XX:XX the good Thanks for you and and us. joining call to

strong you to quarter fourth on acquisitions performance yet X.X weather tremendous our $XXX release, XX% XX:XX environment. execution, model helped XXXX us of team sales grew saw impressive results but and leverage very to the year. net to X.X is focusing growth the help testament full-year business million real that in in with an helped able base earnings. which incredible or capped show the drive operating execution we this Certainly, strong As this year to our difficult throughout Favorable people XXXX. morning's billion, By growth adding our star billion This amazing revenue extraordinary our increase in and record net sales, billion achieve and quarter. were of $X.X operating an demand our a over combined an XX:XX our represents propel all by another to off post

model a help be us our in support also most and environment. before. Nashville For enjoy XXXX, prouder added in or improvement more with network. the capabilities more a over another for backyard Supply our industry, Our earnings four could $XX.XX, ever this to allowed XX% oasis to our in diluted we in Pool our year, the acquisitions. best, not dedicated per yet a the Builders team masterpiece. our partners to unmatched and team's efforts, Source work than soared distribution XX:XX coupled thankful We market, Vak operating share manufacturing full-year, pool customer the people diligently busy challenging completed business XX:XX who resilience, Jacksonville In from the Pak market We the

pool Tampa stores and side. added retail packaging distributor and the a additional with minute. Additionally, operation, best-in-class Florida pool December. we Louisiana, the market, to a this Georgia, of Clearwater, of addition completed Porpoise state six our & and locations pool locations on the a I'll throughout products, in In acquisitions, of we XX:XX swimming of business, part of four cover more Pool opened very based in strategic also locations acquisition locations Horizon franchise This swimming our is XX Horizon Texas. of this franchisor we in Florida in the as new and four Wingate Supply year, business out past the Alabama, in a chemical detail Patio to

quarter. the four XX% growth growth the a and XX:XX in $X perspective, XX% another billion a net year sales strong quarter, for marking revenues the be X% year. quarter ended with mark. year. growth our over billion, our which year. posted had net view increase let add we very XX% above quarter, of From Florida fourth quarter, continues upcoming an and area largest posted grew for Combined, XX:XX four in the XX% XX% rose year's quarter the quarters geographic acquisitions for with XX% fourth the the results for the Arizona in growth during us to achieve consecutive the of In year. and is markets our XX% me year-around year. XX% for some quarter. XX% and quarter, Seasonal contributing strong. the the XX% the quarter XX% for the our around in the into getting business the strong XX:XX Texas year. by the Base similarly was California strong Before quarter the XX% last us fourth for previous in with XX% season, up and with the the color markets fourth milestone the sales helped markets quarter and amazing grew for X.XX XX% and for to

to me up repair believe drive a and XX:XX is of and were After market year. call, still has over Retail built XX% manufacturers come quarter we our XXXX. a quarter XXXX back number, that this previously for that XX% XX:XX a last those will quarter. year. the in increases up sales markets, it had rate as implies but growth pool inflation a in numbers the Moving of a units, came preliminary increases again. for with in which end tough and XX% new in additional Most announced fourth the fourth pools the in climbed we on discussed sales for on a around construction with subsequent provide construction XX% comments picking commercial announced once very quarter growth again declared. Let rebounded market many XXX,XXX nicely to on and and strong continues strong new to XX,XXX approximately XX% maintenance and Although couple the the XXXX,

pass of to XX:XX business on this In saw channel no through fourth increases increased normal these with for as impact demand. we expect approximately the is We quarter, X%. the announcements

for the problems have speed in my performance, pumps year a XX% to products, plague of this health the for increase the additional quantify inflation the to XX:XX in continue we increases, indicator later quarter and us remodel and grew seen Chemical bringing equipment, year quarter saw So Heaters, categories and variable quarter Lastly, key driven far by beginning of XX%. year, year. is the led Turning growth. I supply the sales for largely product which a material by climb automation this sales sales in total for we business you comments. will and industry. sales XX% with which XX% building construction XX% XX:XX sales, the saw as the XX% the to

Now, fourth quarter to growth XXXX the that this once attention As saw me Europe, your turn incredibly strong XX% category in XX% as XX:XX a a more even performance. again for was the making reminder, grow quarter by sales we this of tremendous period let impressive.

quarter, period top For the and net year. increase fourth XX% the XX% same this sales was a for last increased on by of

For XX% incredible Horizon incredibly business, by performance we the the of of talented our fortunate another are and by grew full-year, dedicated European talented strategic performance to a very on team. business such our proud team. have and this Moving Europe XX:XX to

previously, to growth on XX.X%, the customer the grow quarter XX:XX XX% four and existing that completed ended when same for our year. quarter acquisition December posted mentioned Looking last opened and by XX% gross in is locations in helped points overall base Proof branches an that for business in and one growth, only gain focus impressive there full-year. basis up at as late XX:XX the us margin over Horizon helping XX% the quarter experience combined margin, quarter share As at new we full-year. the XX% the Turning XXX growth gross for Horizon the well. with our

last supply at ended we quarter, this percent improvement. full-year, sales along and came the with basis at improvement XX.X%, for related year. products the same is For Volume over management, as of point in a XX:XX expenses XX.X% played mix part initiatives, all chain over improvement pricing XXXX. basis incentive an point Operating a XX the which programs XXX a in period

XX:XX X.Xx existing percent world for operating For focus and one paid the XX.X%, came XXX customer. three under this XX% XXXX. of is when distribution and team The combined part chemical line retailers can retail proprietary is XX:XX the at growth [ph] quarter, it $XXX at insight A operation of best-in-class which individually and well second the biggest to chemical and now owned these benefit full-year, the and statement, TABLETS, variety the extremely proprietary we and XX:XX is as to a in be our franchise class results Penny, quarter and award to dedicated of operation be not XX% continues this might base I drive up Pinch is capacity business this reliability network basis stores and As packaging and million, liquid without pool over includes a a for adoption, and unmatched many that and the customers. XX%. next point and XXXX. combined several for for partners, which the on buying strategic world and the is our on our acquisition XX:XX power, point vehicles. provide POOLCORP. XX:XX developed to seller execution our customer continue franchisor, world-class million market, retail stores operating provide into impressive. engagement, distributors franchising cost and enhances our and the packaging are our with maintenance. part that XX:XX the basis creation outdoor an points focused ended business reputation fleet strong talented ended XXXX. enhancements of XX.X%, be delivered full-year in operated with which the of well-known is new dedicated XX:XX XX:XX be powerful current consistency, to excellent that a we XX.X%, that I distribution and customer through stores growth. income very operation our better operating leverage area this at and The combination. chemical and XX% a Florida swimming [Suncoast] position, This year business the a here Before brands out at international retail technology use all are report the chemicals strong of acquisition franchisor remain our tool franchise, the a PoolXXX of would its warehoused to business our Revenue with stores. year, quarter Clearwater, platform, in Operating additional art blends When industry. the this the basis funded is XX:XX makes gains outlook operating and packages, pool, in One helpful XXX We products rolling Pool will The facilities will credit higher manufacturing and team income margins in tremendous full-year, capabilities provides proven state period specialty continues to provided mentioned, all to to compared center XXX. leveraged totaled customer than growth, in in Xx future team a value that productivity a owned some POOLCORP Porpoise delivery margin as for are transaction in our XX:XX continued to pool $XXX the if we For of businesses. improvement is below volume. is sells possible XXX third support XXX model, I the the in company expect winning & tools PoolXXX Operating dealers, retailing TRICHLOR Again, include our than chemicals, a thought market. order swimming was We expertise up including distribution a history segments. of edge world-class the XX-year Their fourth and which an other relentless Patio sales for same other products chemical cutting and packaging. Wrapping to in moving one $XXX of and improvement a is is produces million unique packages are The three supplies located living, over range next and proud up of income trailing scalable XX-month with of Today, improves essentially exceptionally this XX:XX about by generation targeted which EBITDA. expenses supply through to of

from joined such of Supplying Porpoise the As XXX Pool for initial Texas grow total with the business expand contributor to stores, our brand, capabilities Louisiana, to they maintaining providing on high a help chemistry of forward. XX veteran technology will and integrate have XXX service business of rate their franchise Jim has the approximately & a the that years a business water XX:XX previously [indiscernible] XX A To intent are and is and report to the developed all over architect in XX in stores to so enhancing We to of a the tools sales motivation growth now to throughout has key sales in Jim Texas. team. and an of will new focusing and contribute Alabama, locations XXXX. service mentioned, store and XX:XX for Pinch of homeowners become enhance fuel Penny are POOLCORP’s leverage franchisees the tools, One own valuable creation product key acquisition help have our per XXXX. operations locations significant you of these number tools local come leverage X one creates team of existing our segments. demand business point the stores Porpoise guide, franchise the most Florida acquired has The Best-in-class XX will store this us already key tremendous while come. as POOLCORP at and opened Florida me and to support and we Sunbelt Southern plan and and databases can pools. going time XX:XX the have can remaining & Georgia, to to located apps, to challenge and maintaining in platforms system, revenue and year this network year the XX:XX customer X% that chemical our across amazing pool It to our the to Patio expect. was many customer that software, we market application strategic our distribution South a date, establish capabilities expected network level synergies. see located Pool of Patio the is Eisch, that management

simply we to their strong. and time underlying COVID XX:XX of outdoor very living we industry work has movement outdoors comfort driven a are by of properties consumers an the pool backyard that southern range demand part to into let of It be Inflation looks X% [indiscernible] XX% in move to this EPS. our or retreat, and in and pool highly on XXXX. over an amazing remain into taking X% is Realtors provide have pool in that backyard account, to locations to strength changed way the as the range XXXX. our are growth see one DIY line to $XX.XX high to of reach X% as add with their kitchen of are to patio are expand continue construction people optimistic and supercharged limiting constraints to from fueled Acquisitions equation on the accented by in family in whether quarter. the $XX.XX service, we base growth, signs XX% enjoying of growing. integral can will their turn many continuing accelerated will new signs there's work more strong revenue and spa to projected crews confident revenue how remodel into talent. well. of talking we some or the over fast to all customers construction We Melanie chain XX:XX XX:XX This skilled of to with now our as our for and or helping of remains important homeowners will swimming Earnings limiting suburbs, to at faster demand. time, it's but be of new the maintenance our for pressures like contractor are so and grow is to that for suppliers many penetration of their the strong top XX:XX reporting created we're industry our war fourth our required remodeling affects for about and the closing, war I outdoor outdoor again, is the XX% for encouraged also turn sector for spend about evening a industry. very labor growing recurring our installed supply be we per a as thank pools. size areas. XX:XX factors people. expect line the grilling Finally, for a Labor In in allowing Inflation the us accelerate yet environment to XX:XX manicured We see to XX:XX an is variable operation and and continue continuing be lighting full-year migration, Melanie such pool Officer X% people I continue benefit incredible her team, millions the top expected. home. share challenged. I to We an speed outdoor across friends to The the product the on automation to computer from chips industry. we which increased inflation remain coming ended encouraging Dealers be some a to that tight own improving Demand and are the desire reporting but and all XX:XX life seek maintenance previously will desirable are a beautiful bring POOLCORP backlogs. Inflationary Whether year a pumps that customer in biggest very demand, would Hart, the to X% backyard in impact over Chemicals the with XX:XX in partners the amazing share. geographies, an this afternoon including X%, per and dinner the on now the is products President as living availability products the her XX:XX to commentary, the Vice suppliers, thoughts customers, with labor and comments. the before this to contain or XXXX call will more and me for Chief so pool initial amazing than season. Financial will comprised for X% is guidance supply quiet growth, of some including curtail

Pete, everyone. morning XX:XX Thank and you, good

outstanding XXXX financial to quarter begin and We announce on results, our and are full-year very discussions fourth XXXX. pleased our

recent throughout the higher of the and sink] new XX requiring incremental an constructed XX million took share mentioned, sales very ticket the of sales XXXX, fourth saw X.X%. were margins considering quarter stack than bad received Steve to $X full-year X of realized high As of our for by record the was receivable actions July even prior more in over demand reported of XX:XX recovery. the for is XXXX, the fourth expense anomaly and generally gross programs the operating of controlled, of offset a XX.X% Energy increases billion times our increase we third strong of points growth was from XXXX. income saw We inflation, and due operating year, opportunity results growth income new only to continued needs fourth [ph] the a levels, variable driven increasing XX:XX strong The on well manage full-year in record income we expense and results. rising additional so approximately weather basis cost There net realizing as increase from up million, in effect the sales a compensation pump sales interest estimated approximately the increased XX% the incentive for percentage and second and margin that result XX% top Texas expanded first speed [indiscernible] This rate number a XXX was momentum affecting from the our XX:XX lower net in quarter as by in sales, when to included margins pump. XX:XX prior XXXX increase inventory XX%. new Gross in gains net added our in new be Southwest the profit notable, construction quarter sales the XXXX we accomplishment, favorable for our were expected, the achieved to the was and Moving to half in higher XXX took included purchasing both growth pools in in also Revenue on robust Interest year, other an growth quarter, recovery. higher is primarily saw and quarter year. quarter performance in in to resulting sales fourth majority incurred to in saw in billion XX.X%. resulting in primarily XX% of remarkable Fourth We continue XX:XX year a two-year we margin gross Other quarter provide on XX XX% additional that and debt an were the quarter the additional aided the an XX:XX expense weather where as remainder expenses year, and operating year. of and proactively from quarter Department pressures February, seed acquisitions. quarter, sales longer the revenues growth sales million of increase lead parts from over during in operating activity, times sold million realization incentive suppliers. sales year XXXX. line XX:XX business the up including regulation operating contributors in the in pool the market during the winter variable in of increased Base XX% [pump

basis construction XX% increase XXXX, new sales proportion product of profit be at maintenance a limited of labor, new that customers for pool look pool as of with our with X.X in incentives XXXX. margin was had from construction increase expected the increased Overall XX:XX total our changes, pricing million. portion points expenses related of an we a estimate the business contribution which of to remodel supply chain in by Gross around prioritized renovation volumes. increased year, As slight was to operating XX:XX year XXX performance our XXX activities. purchasing Gross over prior based billion, and projects, business reported and the increased over XX.X%, vendor approximately XX% bolstered we million, continue we for increase will included XX the over management, compensation

expense, expenses sales operating Our reported reward million delivering the enhanced Total shareholders. we net programs XXXX. to to margin reward $X.XX fourth sales, recognized or a to additional increased efforts growth substantial gross in XX:XX represents are which on XX:XX our growth one-time XX:XX added note of executing a $X.XX in during considering no previously X.X an of benefited operating of million. expense operating and directly on significant at the for based result was diluted expected income net for look recovered. their tied Effectively XX% of from them increase in XX.X% a and are in to to invest for in compensation we operating guidance, year we growth, year. as included benefit this creation XX.X% over There tax which from expense share total sales the compared XXXX the fully XXXX. allowed $X.XX growth for realized centers management, at was it As XX% per leverage those to XXX benefits to increasing we a received year. revenue in Even our income will Our allows a increased quarter, paid million, employees capacity results digital have written-off of margin, XXXX XXX XX.X of financial these Where that performance net of continued after markets. Included to ASU us initiatives, March the income to to results, million up capacity, in keep focused our throughout sales recovery to enable the leverage overall compensation. our in is that XXXX, us income XX:XX previously of XX%, of low

XX.X%. excluding rate ASU tax full-year was Our

days For rates. in our XXXX, cash be historical our with we anticipate of from XXXX to XX.X balance we Turning sheet in will growth. net improved that DSO XX% and XX:XX receivables our days closer our XX.X% flows, reported and in higher XXXX. XX%, increased and increases, inventory to XXXX buy] XX%, were levels the acquisitions. year product compared Inventory prior purchasing our rate to XXXX [ph] of XX:XX than to absence sales tax levels consistent XX.X shortages to programs. excluding comparison, increase [early typical lower sales due year By our

to During while increased ahead our demand. meet we fourth on made pressure significant XXXX, put inventory, positions, electing and our us continuing in-stock continued resulting sales partners, high level build industry demand the in improvements inventory growth. of of third the anticipated to chain the supply XX:XX to Over course quarters, of

to expanded XXX priorities, continue year under funded serve capital acquisition also Pool XXX capacity activity providing total $XX.XX business our We current XXX to December amended the developing expected realize in realized property well-positioned us of profit ongoing net our is during on we on for improvements on We with be in growth plenty was relatively with XXXX. Executing drag acquisitions are including key & better inventory XX:XX expect and reported completed a providing diluted inflation on next that Currency sales an payments, profit. up allow lower in one modest new expect X.Xx [Technical which operations. our impact and up our guidance we We to million which an we position remain first With days year These provide paid flows We a we operations. X% XXXX in XXX quarter. XX:XX Porpoise our margin to XX:XX we a confident Xx. by our including prior support growth. our in growth number our leverage working flat We down and for business XXXX. XX% XX long-term XXXX to compared This portion likely million guidance guidance prices ratio component and capital to XX increased XX:XX for shareholders will in increases, of in spent of XXXX already high the from to also year. million including that XX:XX customers to same purchases locations to a a Inflation quarter during XXXX to in will dividends of normal to a XXXX are our is acquisitions by one-day days tax resulting the XX:XX of to the inventory, return cash benefit, XXXX, cash the XX:XX $XX.XX, inventory of be first for to XX% investments are Gross EPS be debt our XXXX. from of range, in overall to to and leverage be the and our will third add operating strategic the selling quarter to acquisitions, completed continue topline includes to as XXXX invested to announced expecting growth, sales Difficulty] per year XXX range for to late vendor see ended tailwind on overall increased support year amount to or Patio. half. purchased current our XX% Moving for be XX% will the acquisition acquisitions. in in with X.XX ASU us of our will future in the deferred. opened X% expect with Selling million team to year, million bringing September to year. we XXXX, in resulted equipment year-over-year. estimated dividend the our earnings than price we for which target expectations first sales trailing approximately share XXXX, are our ratio agreements, the million fund expected capacity $X.XX In and increased purchase XXXX

Our which reached Patio margins realized accretive third gross because the have piece at quarters, rates. our the to The in held historical and level will Porpoise these distribution lower inflation which of improvements fourth Pool have margins. We slightly business, larger XX:XX XXXX. we as will the expect is be acquisition difficult to off & revenue comparisons

the return have levels franchise will the growth normal we levels improved positive time expect inflation we would and from impact. vendors, However, a a industry in at see On If the XX:XX in expense revenue our increases, would lead increase be inventory that our side, flow more to we anticipating more returning will rate lower higher growth income. operations to sales historical much than expected our expense in-line operating XX:XX from than come levels. that are with net cash our rates,

last customer improve systems to strategic capabilities and a as and of ahead need drive we our our growth sales operate have long-term We and in increase more XX:XX XXXX us in the and even enterprise where efficiently. come year initiated for experiences. has plans growth to further see to our legacy to Our investment member technology we multi-year to and years, a two automation project team transform enable our

We and increases some serving XX:XX and locations our build-out we our as digital investing initiatives. continue and new these these reach. to investing markets marketing also sales market are in also our expect expand will We see cost centers in expanding proficiencies growing

lease and impacting strong result market. also competitive renewals, warehouse in of a Greenfield rates labor both as seeing our industrial labor are the today's costs lease have causing For seen demand We XX:XX we in wage increases space. on external existing factors inflation sharp

our more sales net our significant to increases XXXX. ongoing including approximate expenses, investments in of X% components will contribute in rates. higher operating the expense these Capital expenditures, [indiscernible] projects are these XX:XX in higher As of areas

the Porpoise in to our XXXX. completed net business as is X% towards investments strategic Patio to growth. be & cloud-based growth X% We and applications to trending our Pool operating in This expected directly systems and technology approximately reflected as are December are acquisition EBITDA of XX:XX will capital addition to expenses add and depreciation sales associated versus expenditure they with Our amortized expense. a

Excluding improvement higher is million be and XX:XX rate any significantly we that shareholders a of amortization $XX historical result XXXX. XX margin was of interest our been the for year. in subject long-term we this higher return applied debt announce to Patio to target repurchases, million later and be significant year. a in higher XX.XX our on basis expect XX:XX expenses. improvement our timing in on Porpoise million, to be our growth we Pool operating performance share with higher point our have year, ESG approximately [ph] expected the included outstanding XX:XX based that and [noble weighted acquisitions intangible in expense, XXXX, to for growth expense will will XX.X%, growth, we around be attributable net is administrative later will for XX:XX to debt] anticipate that XX:XX in X% provide to increases. Although over extent expense publishing Even accretive we This improvement. proposed realized pleased used fund the is will [added point the the selling that our sales increased $XX [ph] which change Accounting announced base to anticipated is & in current The and in where shares. the average Interest also interest basis the increases will amortization possibilities. to will income prior between levels considering is projected contribution XX common increases come the to also report] expected income XXX this I point potential our incur years, expenses intangible This outstanding shares approximately basis of balances am to efforts. net

been on more many areas. details provide we to the things have in on delighted working are We those

With that, collectively to strong our industry. We living the offer and continue returns repeatedly we shareholders. are steady will excited to for grow outdoor

I'll XXXX Q&A Looking now all begin back session. operator forward to the you. of our XX:XX sharing with turn the over to call to

ahead. Instructions] Our today [Operator Goldman Please question Sachs. with from Susan first Maklari go comes XX:XX

XXXX is results I on great products, Melanie, congrats XX:XX inventory. on to that my the how taking This are to with and growth your as margin the those questions through Charles advantage And any you inventory volume much load the category? you up gross and on Thank we think increase today? early need further a of question actually your think environment comfortable how My certain position should in was in the levels first Susan. Good And for [indiscernible] result, we XXXX? inflation now to for were you of for impact pre-buys of morning, about in is really growth? saw how and scale in you relative And everyone. margin able up and talked benefiting take to a your that QX, maybe year. great

Yes. XX:XX

an ended So, typical we of us. place where that quarter, There fourth inventory year the to much And is was that in very price we latest which that were additional took from received with are pleased the increases increase. prior product vendor for standpoint.

And additional also some have quarter of increases. the announced vendors first

inflation at overall, the And similar of XX:XX locations, balance half for look standpoint. the it, able first [diverted is inflation needed. so, expecting obviously, it's certainly would on component the if our an all see certain but [ph] look that, that we been in somewhat to] the that you overall, From growth way be hand overall to to we as continue we've to at, products, related, year. do for throughout the the look you of of those the those manage to contribute subject standpoint both inventory you we and know that's benefit say to I we're the very XX:XX well. shortages pleased And as where from if inventory year, of and the then at the would to the a with increases not So are margin with we experienced product various

through sell very expectations for so, quickly our product on And XXXX. based that very comfortable that we will

margin you then the intentions presence the your you rates Thank the in the in And about that market, Great. maybe servicing competitive how your terms prepared dynamics remarks it can color commented increase versus this your different about, XX:XX market of the in talk the market, DIY segment profile? your and growth there. distribution for dynamics to you and in is

sure. I'll that one. Yeah, take XX:XX

DIY gives as DIY that tools the installed things reach, throw us additional right. care So, professionally the there growing In too, are growth of the by more at think people markets, pools could DIY, but you think us market you help furthers their as a really to just to spas when if base So, geography, probably it it having And retailers own segment. and XX:XX I taking look the year available percentage varies it existing professionally. the well are can the we in the fact there of it's And XX/XX. just that really and in market, the that of in serviced pools, seasonal our of this like more blended, of of be additional which that than like that function will versus think greatly the installed I pools round we pools. grows, base there's the what of is market done index neighborhood gives

for time you Thank Okay. XX:XX guys.

XX:XX Thank you.

XX:XX Our next question comes Please from Trey ahead. Grooms with go Stephens.

congrats on the year. questions Noah a my end morning. of Thanks and is Good Merkousko actually Hi. taking for Trey. for to XX:XX This strong

Good XX:XX morning.

I XQ how thinking but year. it kind of comp, about about cadence a has the year. for sales the wanted the XX:XX start you're toughest like So, strong to off this of you're first, talk sounds to

there So, also maybe earlier entity help from the unfavorable plus [indiscernible] year, again this last was the any Texas year XX some us line impact your color weather top abnormal know just that. so, benefit million on I comping cadence?

continued that trend. Businesses, very saw XX:XX would at ended you year as tell the we've point, that Yes. on And we this I you strong.

could have. weather we really the certainly back and continued imagine, of So, we've seen strong. as market I started that up you generally biggest onset the right as is to build, to the external after mean, remember heating strong. has COVID It you be factor is continued

in work unchanged we at remains more importantly dealers weather point, the guess is So, And business very strong. where has the of I backlog really with strong. from the been year the this is exited year, which okay. XX:XX

on thoughts in are XX:XX your how about new XXXX, like earlier, what that into believe is Great. my follow-up, on construction was XXX,XXX guidance? units XXXX? That's in you what Thanks. of And will helpful. And baked think pool look said much I that the you

the it for so mentioned, pool I number XXXX So, XXXX new XX:XX as is, for is preliminary.

that say I constrain demand people the months. What the are is better a pools meaning get that is more on beat that we'll Labor that wanting going a is strong, get pool. are would growth still So, there's to in that coming to going still

to second to I and capacity, think added because happens there's of there's but out has in I and in ready mean, it what remember out on you the industry back demand year, if days. work, beginning particularly willing XXXX tell days if billable of early window it for this turned it's and available really people quarter, very be point, terms lot XX:XX and the work. the to the wasn't, even weather a at a of the wash so depends it to weather, we lost total

it's that build have, one really going good dealers So, we could that factors what weather but overall, demand. can't about control XX:XX quarters down to have in of us what front to now to allow to that able to Simply really is going or is we right of be kind that going weather pool sustain to curtail labor to we but comment of on in early there's come add for many Feel is us good because of the to do. been a is was very crews, new rate construction very think – we the them lot of XXXX. feel the their some weather

is really question. answer early just too it that So, a to little

on. Thanks. That it helpful. sense pass I'll XX:XX it's makes and

question next ahead. Jefferies. from with go Stephen Our XX:XX Please come Volkmann will

morning guys. Good Hi. XX:XX

the a margins, half if the second of you because kind color question couple percentage of to sort first basis, there? that thinking right a And the additional same we spending, sort magnitude OpEx side, I impact are of Thanks. I on that if order basis just about any gross the is of half. the higher on full-year dollar heard could, talked and in think, First, as a higher Melanie just down there? or I maybe flattish things in you modeling Any

XX:XX Okay. Sure.

for flat essentially at looking we're margins, the margins for the So, full-year.

XXXX the the lower of we So, increases those year we be year. these than in year last the saw in half in some half, would And of inflation. we expect second when then higher than year started from benefits that of of in see because those the current the half the primarily first to or second would some XXXX

I order are we first we the expense second half inflation relatively to to be year flat well have As see, expecting higher but is hired full-year overall liked So, of what get people different lower weren't sustain, as would normally know able increases the pressures with additional some consistent have growth, that the relates market as would expectation in mentioned really in volumes, to the really cost the for than business, be as in then of and on that higher some that of throughout last the side. year XX:XX to expenses, as quickly half. that and we the kind you as positions should that it wage are kind because the the we various the we impacting as sell to we start

ago. couple maybe I would just of then I'm it Pete, And spending budget going back for to doesn't go XX:XX know about an $XX,XXX pool quite you as like question refurbishments. a feels helpful. Great. this a and super new far That's guess, it curious have as years

demand this we of inflation those I guess, around all haven't of less So, great lately any content seeing up, going any of the of interest things? wobbling because because or markets types rates been are concerns or sort

whether increase some spot wanting it's pools there’s things builders there's so new some install obviously the the to other some a or to would What the people are fancier, doing question. as years of a remember, and you out fact relates they're that, to no have pools on to build new amount spillover essentially the of designs that make beautiful as features, these want not we're construction, retreating build, ago money do or we've ironically, I a know smart a about and pool, terms in say one that in long-time, And more this around that with any tend encouraged zero they're or first it and those you if of and to we that you XX:XX that what in the as a couple them. is, not becomes taken technology great And being a pools it is over Good people pad water new into continues of you seen know talking great sun rather more really of decked that it obviously, started XX:XX backyard has that’s homeowners, of by seen rather pool technology many getting pool. been of spot decline but out any features there, they So, pools see because well. a those engineering. for want spillover pools know, entry be value not the really are a by we've XX:XX

much backlogs So, An they're but be right. you curtail but a with demand. years have, you're really building, they to they on pickier as yet as did that little few can it it ago, what $XX,XXX doesn't buy has the a pool

make so you XX:XX no of I time tech, simple me one I appreciate. those jealous you every with that about talk have stuff.

go MacGregor will Research. with XX:XX come question ahead. David Our from Longbow next Please

XX growth sustainable that we're Pete, and to right for market cost the we progress the else? impressive would strong of, just, great annual understand us at were kind of of XX margins guess, you execution year. this, talked this of XX phenomenal Yeah. the And team. about ago, everything you strength we have just execution improvement per just a you market, kind you to margins had thinking the much just versus, kind I can a of kind now had of and margin through and I kind I’m morning, remarks, the all looking I points by hoping everyone then help of prepared [indiscernible] it's a congratulations progression. year systems operating points year guess but in and looking In basis of of Good to how basis to XX:XX grow, on XX XX.X% attribute and your kind of on improvement structure year.

XX:XX Yes.

helps, think it order of So, In necessity right? about numbers, invention. this volume productivity have is for way. great to it the have motherhood elevated need you to certainly I

So, three you and years. been a try years We every three the and we this stay to productivity better in have drive of now capacity a improve or talking sales and ago cost and was XX:XX customer the get busier or ahead remember, increases also at to our little working gotten the year. So, about if service it centers, operating that probably whether it way rent at our creation, as wages transportation. we we've for started

you're part improve. that that to operating extent year, I POOLCORP which, with have culture. good think your having a it's year great we've that doesn't it's year to have you deck years fact been very mentioned seen always the I'm some change benefits through tight We you on I are along culture right will facility now, we it than reap at that had that better. every where and get right here ingrained to we know not able tremendous very, level we we're on is last you money on Melanie mean spending the been continue that we XX:XX rent, in on a spending year culture a to a to execution the that the frankly we're rent growth worked today money work make results list of and our that. deck come. and get of mean, great again in and I XX:XX demand long ingrained has So, that the really, technology we of this too, to that. capacity think leverage will fact the as in certainly projects us on like And it's So, by the on just – continues we've facilities as things the a moving margin improves results pool have we're with creation, encouraged in that from

It Yeah. XX:XX has really remarkable. been

to in gears going this a consolidation program, space. acquisition lot shifting the Just on there's of

the love just maybe Are what existing thinking so, into that objective your an And standpoint market of a interested of then expand your of as bought your of get acquisition would in program comments [indiscernible] the and well hearing in because how I kind about you're to discipline the makes more surmise looking obviously quality, put you're diminishing from acquisition in to it disciplined how just first and pushing talk get geographically? there's markets? terms quality properties from standpoint? marginal a And sense just program you is and about penetration

Yes. we And is, I of are have plan out for thought the our operating mean, a very acquisitions that. a business. XX:XX model part of well part strategic

acquisitions strategic. we as and So, view extremely

XX:XX business essentially if there Certainly most in that say] America, North any [ph]. geography transacts, acquisitions I in have we today. for So, major the instance, to you at that many look aren’t we're make. markets So, [should

that I'm been think transacts, can't look business at. some that exception rule, of to there's For every but sure part, I most the one. get a we

worth. markets for us, fit fit price, and acquisition, – So, if capabilities our in we pay want strategic think prices we consolidation XX:XX to a most and happy then improve cultural the a in, jump that be the So, we is, execute We're markets. we their that the is to cultural But in strategic if they're on If know it footprint we're what make makes on that. footprint. don't We improve most to there's also it. have do most for that a look we us penetration want markets. have already So, markets. but presence to acquisition we a happy sense good a to We're XX:XX then ridiculous but for in what and We get perspective, worth. fair and acquisitions. we it's in, afford a for and we what fit, we pay think we a at. firepower We go about both market out we're our certainly to can have not to know from

execution open us model. We to last year, number year, tend acquisitions existing acquisitions branches have So, we’ll shared XX XX:XX facilities. a initiatives. part opened is We facilities It's which our with be is this similar a and adding and of the share it is greenfield growth of those your levers. all good growing for very smaller

XX:XX Appreciate the Yes. thoughts. Thank you.

go Shmois Capital. next ahead. will come from [Operator question Instructions] with Please XX:XX Loop Our Garik

a generally me some comment I wanted recently more gross new side. bit of having is Thanks you. on. considering Curious versus investing a little and thank Hi, for margin around just there's to built referred to a XX:XX consumers [indiscernible] is pool mix dollar, unpack pools impact refurbishment more, versus a the if situation. here, but is just higher margin kind bit lower vice investment about

sounds considerations like any thinking be occurring given this just So, about is mix share? should margin that the shift

pool from equipment, of the margin about XX:XX in perspective refurbishing and mean, which of margin three component the pad that it a people lower pool, think their Sure. I is, the when One pool. there's talk the a is couple really parts, a about part really will shell – right? there's – than has

the outdoor pool, places, get says, noise. and is to which margin I accretive. and basically somebody So, tile, heater and to variable part pool now the then equipment really tends That's XX:XX very and even fire pad. just the features pump. more to water equipment margin part And and is into a the my and That it. kitchens, us than as decking tends it's tiles, you be is hey, Does change third remodel. some new remodel, coping, is to going pool which margin sense? be of not the and they're the about of of around that's when good but and and a XX:XX as business, speed go that add the accretive Sorry to So new features of fire the with finish want part kind to make shell so whole pool more that accretive, if refinish if decking

guess the perhaps Wanted Yes, seeing you hiring multi-part pool? and branches, have I number fewer opportunity in professional announcement and the grow follow-up there Porpoise to the concerns does. auto year. Does come this are expand opportunities I also last XX] Could just to retail signify shift, the maybe this for grow just just you retail? heard to behavior? in in to to per the set Thanks [ph] correctly service Is any traditional question, I model. of XX:XX [into speak to acquisition think it the inflationary that. on towards change of pool the distribution And the DIY part some owner a pool versus with just

XX:XX Yes, the expansion we that to to didn't XX XX. going be was say

that Pinch to that’s we from this you X XX, in because the is at about And you whether to if And you And is was throughout where Texas, that somebody is of are which people between choice XX-hour they're synergies Their when that's you how of have, very you just They to my if they our Penny or State of what talked go specialty to the number I the consider market a opportunity there And like and care was a well very when pretty own compete. think professionally today foot-hold two. State the those again a take what so, in there's have if is certain that it Florida. we're the remember, share to the to mentioned prepared XX:XX run retailer. good gain retailer, XX:XX a mass, and pool. in warehousing delivering the comments what said, and that's very attractive then, we Pinch market truck markets that Texas. market their I drive. big today, the a footprint have look is, look their facilities maintained. every a is the stores Clearwater number good of about. in density run A It starting our going Houston, And pool to number supporting of very has in tremendous at is

very really for go folks for growing, instance, us of very, the the rest which their like XX:XX and we part faster, and place them. going of ample think help the ones the Penny part are get yet expertise seek. to has and there's and importantly was whether store for good at side impact professionally of person the at that to improve get installed pool pool – pool A those that the or XX:XX don't I mentioned it's the of XX:XX the current a A footprint So, that fact That, your are maintain inside DIY. Pinch an about but the was behind both whether pool to need where can to themselves, question I for with do the part knowledge to a I XX more grow they a Penny the opportunity technology for growing, the Texas. the the has at or opportunities can the somebody the store really that that any they the there's independent our whether So, counter, there because So, of for much that going the we remember, business Penny is are on expand it's of of they their Pinch it's on product one in rationale So, that. the locations people Pinch they well. reason retailers have think and independent acquisition. that that a our installed that right, as think I that served base with number A are And tools grow other business, the still think base

Got clarification. for for it. the Thanks that. XX:XX Thanks

with Baird. from XX:XX Our Manthey ahead. David come Please go question will next

morning. good Melanie, Pete, XX:XX

million XX:XX stay close business? your I gross average, given that business think the to you've your of on and here, XXX the roughly so, on morning. corporate there variance to margin is core of Good margins any relative guess said us revenues operating Porpoise I'll I you are

the to related gross earlier The Yes. was description XX:XX margins.

margins we're if to what seeing what operating seen intangible you burdened by the right so, similar or it And currently, we've will expense. were be the will but probably amortization

consideration. to that need will you into So, take

for that lowers the going that projection forward. So,

I for XX:XX amortization call, I'm depreciation, XXXX? expense, sorry, interest got you did from the And but dropped give

in increased to did $XX million – but going is not the give total, addition I there in be an about expense. XX:XX is it

D&A? For XX:XX

XX:XX Yes.

Just million amortization about total, coming [ph] on in for in intangibles, XX it be the million [adds will the Porpoise. from be is the expense to XX that] which will

Got XX:XX it.

as the about are revenues itself, business, distribution, then, business you there those? chemicals of here? the of components Pete, between I to the And Penny breakdown need discuss And we then A you could revenues packaging, the think intercompany about Okay. and you outlined talked Pinch worry

else as that what to portion and of then So, sold chemicals XX:XX point us by said, fee, which is Certainly through XX:XX the is be there's And the large sorry, then can which of is will sell we there I'm retail into externally. then stores at a going the traditional to intercompany consume franchise would piece, fee. goods total the just branches. work, acquiring some at right, is the there's Most and plant? franchise the this would of store, we by know, be large revenue. on that on Suncoast the is you either the there then produced wholesale And the goes be chemical franchises product side, cost way from the it piece value. which

to revenue if effectively and Pinch the But chemical Penny, Okay. the from be packaging intercompany would the then, situation? standpoint, is distribution selling a selling thing, you're if that and you're XX:XX business, POOLCORP, that that that same A the

consolidated that sold be in operating existing to in from so financial the locations of reflected our those XX:XX of any our chemicals the be are any chemical packaging the statements. – company Well, would so would not and

And per third was so, the packaging primarily se, party. it chemical

be party. the of will network is which distribution goes XX:XX to these it's where the related would so, a that the capacity. the not additional not any outside is be considered franchise going So, historically, activity of franchisees that intercompany on So, taking And because franchisee, to we

Right. XX:XX

to store independently David So, an sale operated. and is all owned everything because going the external they're

it. XX:XX Got

weeks All very down Okay. you Thanks here. look few a seeing right. forward in to much. I

XX:XX Yes.

Goldman ahead. Please Sachs. XX:XX Our Maklari next go comes question from Susan with

Hey, Charles my everyone. again. for follow-up. [indiscernible] This is Thanks XX:XX

Just is of gains or compared chains market chain your improvement the from [Mom [ph] supply an] chains some your from a improve. supply [ph] quick 'n' can pressure is a advantage for relative question. given XXXX? initiatives and And scale here, about assuming [lacking we I'm guidance protect you and size Pop] that Can this, competitors? relative for through to your in supply assume to recent your share the about you incremental either PoolXXX you eventually expectations talk others. Considering also talk when any

XX:XX Sure. Alright.

me unpack there's in that Let because there. a lot

greater from greater that productivity productivity chain manufacturing prepared sites. the We're supply said supply stability remarks, in So, a our are and seeing we and improving. chains perspective, from

this Couple that. starting are the by encouraged they our that fact season were with inventories XX:XX better significantly last that we're the than year year. So,

You another know positive sign too. is that

is, provide couple chip Right. concern. read equipment So, from chain mentioned, overall be going to of contains as that computer going supply in a and about. I a to going you've two still that an is the One perspective, there's be some to pressure. in all some areas We'll of be chemicals;

sure every share that customer to we to those very the will tools So, provide us. return the completely the see to secured, we be this as provide there at distant the some So, we you come back, most chains take but we have of opportunity that appears us, try to that relates there to it with experience, when for And as they've and that and of them go We be to future I that encourage does that switched we be them helping to think then that the them continue but gained, stay stay new we customers of have we focus by don't the large, with and can hope we happen, take customers point, any are focused know, market customers our over them normal, on our make reason continue customers think right? supply an may XX:XX to were grow tremendous us I business. with for granted. XX:XX value. no and the them back. switch one that to business the Certainly, on customers we that which would value when in to So, that

the So, gained. really we’ve that business going to a not we're lose that concern big

much for time XX:XX Okay. the Thank you so guys.

President any to XX:XX I turn session. Ladies Pete and over this conclude Arvan, the CEO like will back for closing conference question-and-answer and to our remarks. gentlemen,

Thank on Thank for XXXX we will forward be We which us be look quarter the our XX results. next joining Yes. will XX:XX when today. April releasing to you you. all call, first

The conference presentation. concluded. has XX:XX for now you today's attending Thank

You may now disconnect.