Exhibit 99.1 FOR IMMEDIATE RELEASE POOL CORPORATION REPORTS FIRST QUARTER RESULTS Highlights COVINGTON, LA. (April 25, 2024) – Pool Corporation (Nasdaq/GSM:POOL) today reported results for the first quarter of 2024. "For the fourth consecutive year, we exceeded $1.0 billion of net sales in the first quarter despite headwinds that included challenges from current macroeconomic conditions and mixed weather. We also posted strong cash flows from operations of $145.4 million, a 41% improvement from last year, a ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 0-26640 POOL CORPORATION (Exact name of registrant as specified in its charter) Delaware 36-3943363 (State or other jurisdiction of (I.R ...

Pool Corporation (NASDAQ:POOL) Q4 2023 Earnings Conference Call February 22, 2024 11:00 AM ET Company Participants Melanie Hart - VP and CFO Peter Arvan - President and CEO Conference Call Participants Ryan Merkel - William Blair Susan Maklari - Goldman Sachs David Manthey - Baird Scott Schneeberger - Oppenheimer David MacGregor - Longbow Research Sid Ramesh - Stephens Andrew Carter - Stifel Sam Reid - Wells Fargo Garik Shmois - Loop Capital Joe Ahlersmeyer - Deutsche Bank Operator Good day and welcome to t ...

Exhibit 99.1 FOR IMMEDIATE RELEASE POOL CORPORATION REPORTS YEAR END AND FOURTH QUARTER 2023 RESULTS; PROVIDES 2024 EARNINGS GUIDANCE Highlights include: Following a period of significant growth over the prior three years, net sales decreased 10% to $5.5 billion in 2023 compared to $6.2 billion in 2022, resulting in a compound annual growth rate (CAGR) of 15% from 2019 to 2023. Base business results approximated consolidated results for the period. Our net sales benefited approximately 3% to 4% from inflati ...

```markdown PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited consolidated financial statements for the period ended September 30, 2023, show a year-over-year decline in key performance metrics. Net sales, gross profit, and net income decreased for both the third quarter and the first nine months compared to 2022. The balance sheet reflects a reduction in total assets and liabilities, primarily due to lower inventory levels and debt repayment. Cash flow from operations significantly improved, driven by better working capital management [Consolidated Statements of Income](index=3&type=section&id=Consolidated%20Statements%20of%20Income) For the third quarter of 2023, net sales decreased by 8.7% to $1.47 billion, and net income fell by 27.5% to $137.8 million compared to Q3 2022. For the nine months ended September 30, 2023, net sales declined by 10.7% to $4.54 billion, with net income dropping by 30.3% to $471.8 million. Diluted EPS for Q3 and the nine-month period were $3.51 and $12.00, respectively, down from $4.78 and $16.82 in the prior year Q3 & Nine Months 2023 vs 2022 Income Statement Highlights (In thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | Change | Nine Months 2023 | Nine Months 2022 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $1,474,407 | $1,615,339 | -8.7% | $4,538,545 | $5,083,807 | -10.7% | | **Gross Profit** | $428,731 | $503,687 | -14.9% | $1,366,269 | $1,617,681 | -15.5% | | **Operating Income** | $194,443 | $263,877 | -26.3% | $667,223 | $918,489 | -27.4% | | **Net Income** | $137,843 | $190,055 | -27.5% | $471,792 | $676,600 | -30.3% | | **Diluted EPS** | $3.51 | $4.78 | -26.6% | $12.00 | $16.82 | -28.6% | - Cash dividends declared per common share increased to **$1.10** in Q3 2023 from **$1.00** in Q3 2022, and to **$3.20** for the nine-month period from **$2.80** in the prior year[9](index=9&type=chunk) [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of September 30, 2023, total assets were $3.43 billion, a decrease from $3.69 billion a year prior, mainly due to an 18% reduction in product inventories. Total liabilities decreased to $2.01 billion from $2.50 billion, driven by a significant reduction in long-term debt. Consequently, total stockholders' equity increased to $1.42 billion from $1.19 billion Balance Sheet Summary (In thousands) | Metric | Sep 30, 2023 | Sep 30, 2022 | Dec 31, 2022 | | :--- | :--- | :--- | :--- | | **Total Current Assets** | $1,832,524 | $2,199,479 | $2,018,991 | | **Product Inventories, net** | $1,259,308 | $1,539,572 | $1,591,060 | | **Total Assets** | $3,430,734 | $3,688,055 | $3,565,437 | | **Total Current Liabilities** | $709,120 | $737,260 | $675,714 | | **Long-term Debt, net** | $996,109 | $1,500,337 | $1,361,761 | | **Total Liabilities** | $2,012,508 | $2,497,177 | $2,330,243 | | **Total Stockholders' Equity** | $1,418,226 | $1,190,878 | $1,235,194 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2023, net cash provided by operating activities surged to $750.0 million from $307.5 million in the prior-year period. This was primarily due to a significant positive change in product inventories ($330.9 million inflow vs. $223.3 million outflow). Net cash used in financing activities increased to $656.8 million, reflecting net debt repayments, compared to $248.4 million used in the same period of 2022. Share repurchases decreased to $187.1 million from $471.2 million Cash Flow Summary for Nine Months Ended September 30 (In thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $750,018 | $307,470 | | **Net Cash Used in Investing Activities** | ($54,506) | ($34,514) | | **Net Cash Used in Financing Activities** | ($656,835) | ($248,404) | | **Change in Cash and Cash Equivalents** | $39,629 | $24,758 | - A major driver of the increase in operating cash flow was a **$330.9 million** cash inflow from the reduction of product inventories, compared to a **$223.3 million** outflow for inventory build-up in the prior year[17](index=17&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail key accounting policies, including the adoption of ASU 2020-04 for reference rate reform (LIBOR to SOFR), which did not have a material impact. The company completed three small acquisitions in 2023. Fair value measurements are detailed for assets like interest rate swaps. The debt structure is outlined, including amendments to credit facilities to transition from LIBOR to Term SOFR - The company adopted ASU 2020-04 to facilitate the transition from LIBOR to Term SOFR for its debt agreements and interest rate swaps, with **no material impact** on financial statements[24](index=24&type=chunk)[41](index=41&type=chunk) - In 2023, the company acquired the distribution assets of Pioneer Pool Products, Inc., Recreation Supply Company, and Pro-Water Irrigation & Landscape Supply, Inc., adding a total of **four new locations**[31](index=31&type=chunk)[32](index=32&type=chunk) - Total debt as of September 30, 2023, was **$1.03 billion**, a significant decrease from **$1.51 billion** on the same date in 2022[45](index=45&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 9% decline in Q3 2023 net sales to weaker pool construction and discretionary spending amid challenging macroeconomic conditions, although non-discretionary maintenance demand remains stable. Gross margin fell to 29.1% from 31.2% due to selling through lower-cost inventory and a more competitive environment. The company has managed operating expenses down by 2% and used strong operating cash flow to reduce total debt by nearly $479 million year-over-year. The full-year 2023 outlook projects a sales decline of around 10% and diluted EPS between $13.15 and $13.65 [Overview](index=15&type=section&id=OVERVIEW) In Q3 2023, net sales fell 9% to $1.5 billion, and operating income dropped 26% to $194.4 million year-over-year. This was driven by a slowdown in pool construction, while maintenance activities remained stable. Gross margin contracted 210 basis points to 29.1%. The company reduced inventory by 18% and total debt by $478.6 million compared to September 2022. For the full year 2023, the company expects sales to be down around 10% and has guided diluted EPS to a range of $13.15 to $13.65 Q3 2023 vs Q3 2022 Financial Highlights | Metric | Q3 2023 | Q3 2022 | Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $1.5 billion | $1.6 billion | -9% | | **Gross Profit** | $428.7 million | $503.7 million | -15% | | **Gross Margin** | 29.1% | 31.2% | -210 bps | | **Operating Income** | $194.4 million | $263.9 million | -26% | | **Diluted EPS** | $3.51 | $4.78 | -27% | - The company projects full-year 2023 sales to decline by approximately **10%** compared to 2022, with diluted EPS expected to be in the range of **$13.15 to $13.65**[66](index=66&type=chunk)[69](index=69&type=chunk) - Total debt decreased by **$478.6 million** to **$1.0 billion** at September 30, 2023, from **$1.5 billion** a year earlier, funded by operating cash flows[64](index=64&type=chunk) [Results of Operations](index=18&type=section&id=RESULTS%20OF%20OPERATIONS) For Q3 2023, net sales decreased 9% due to lower volumes in discretionary products for new pool construction, partially offset by 2-3% inflationary price benefits. Gross margin fell 210 basis points to 29.1% from selling through prior strategic inventory buys and a competitive pricing environment. For the first nine months, net sales were down 11%, impacted by unfavorable weather and lower customer early buys. Operating expenses remained flat for the nine-month period due to disciplined cost management Q3 2023 vs Q3 2022 Comparison | Metric | Q3 2023 | Q3 2022 | Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $1,474.4M | $1,615.3M | -9% | | **Gross Margin** | 29.1% | 31.2% | -210 bps | | **Operating Expenses** | $234.3M | $239.8M | -2% | Nine Months 2023 vs 2022 Comparison | Metric | Nine Months 2023 | Nine Months 2022 | Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $4,538.5M | $5,083.8M | -11% | | **Gross Margin** | 30.1% | 31.8% | -170 bps | | **Operating Expenses** | $699.0M | $699.2M | 0% | - Q3 2023 sales of equipment and building materials, tied to discretionary spending, decreased by **9%** and **13%** respectively. In contrast, sales to commercial customers grew **10%**[80](index=80&type=chunk)[82](index=82&type=chunk) [Seasonality and Quarterly Fluctuations](index=25&type=section&id=Seasonality%20and%20Quarterly%20Fluctuations) The company's business is highly seasonal, with the second and third quarters being the peak for sales and operating income, accounting for 59% of net sales and 67% of operating income in 2022. Weather is a major external factor; hot, dry weather boosts sales, while cool, rainy conditions suppress them. In Q3 2023, hot weather in the southern U.S. benefited sales, but these gains were offset by rainy conditions in the Northeast - The business is seasonal, with the second and third quarters typically generating the **highest sales and operating income**. In 2022, these quarters accounted for **59% of net sales** and **67% of operating income**[104](index=104&type=chunk) - Weather significantly impacts results. In Q3 2023, benefits from record heat in the southern U.S. were largely offset by rainy conditions in the Northeast[111](index=111&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company's primary liquidity sources are cash from operations and bank borrowings. For the first nine months of 2023, operating cash flow was a strong $750.0 million, a significant improvement from $307.5 million in the prior year, mainly due to inventory reduction. This cash was used for debt repayment, dividends, and share repurchases. The company maintains three major credit facilities and was in compliance with all financial covenants, including a maximum average total leverage ratio of 1.48 (well below the 3.25 limit) as of September 30, 2023 Cash Flow Summary for Nine Months Ended September 30 (In thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | **Operating Activities** | $750,018 | $307,470 | | **Investing Activities** | ($54,506) | ($34,514) | | **Financing Activities** | ($656,835) | ($248,404) | - The company's **capital allocation priorities** are capital expenditures, inventory, strategic acquisitions, dividends, debt repayment (targeting a **1.5-2.0 leverage ratio**), and share repurchases[120](index=120&type=chunk) - As of September 30, 2023, the company was **in compliance** with its most restrictive financial covenants, with an average total leverage ratio of **1.48** (limit: <3.25) and a fixed charge coverage ratio of **6.07** (limit: >2.25)[133](index=133&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company reports no material changes to its market risk exposures during the first nine months of 2023. Key risks remain related to interest rate fluctuations on its variable-rate debt and foreign currency exchange rate movements. These risks are consistent with those disclosed in the 2022 Annual Report on Form 10-K - There have been **no material changes** in the company's exposure to interest rate risk or currency risk during the nine months ended September 30, 2023[141](index=141&type=chunk)[142](index=142&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 30, 2023. No changes occurred during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting - Based on an evaluation as of September 30, 2023, the CEO and CFO concluded that the company's disclosure controls and procedures were **effective**[143](index=143&type=chunk) - No changes in internal control over financial reporting occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, these controls[144](index=144&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various claims and litigation in the ordinary course of business. Management does not believe that the ultimate resolution of any of these matters will have a material adverse impact on its financial condition, results of operations, or cash flows - The company states that ongoing legal proceedings, which arise in the ordinary course of business, are not expected to have a **material adverse impact** on its financials[148](index=148&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2022 - **No material changes** have been made to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022[149](index=149&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the third quarter of 2023, the company repurchased a total of 384,742 shares of its common stock at an average price of $355.38 per share. As of September 30, 2023, approximately $463.3 million remained available for future repurchases under the Board-authorized program Share Repurchases in Q3 2023 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 1-31, 2023 | — | $ — | | August 1-31, 2023 | 166,447 | $360.77 | | September 1-30, 2023 | 218,295 | $351.27 | | **Total** | **384,742** | **$355.38** | - As of October 23, 2023, **$463.3 million** remained available for share repurchases under the current Board-approved program[152](index=152&type=chunk) [Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO, and the financial statements formatted in Inline XBRL - The exhibits include CEO and CFO certifications pursuant to the Sarbanes-Oxley Act of 2002 and financial data in Inline XBRL format[154](index=154&type=chunk)[155](index=155&type=chunk) ```

Financial Data and Key Metrics Changes - Third quarter 2023 sales were $1.5 billion, a 9% decline compared to 2022, but exceeded 2021 sales by $63 million or 4% [3][31] - Gross margin was 29.1%, reflecting a 210 basis point decrease from the prior year due to reduced inventory gains from 2022 [5][17] - Operating income for Q3 2023 was $194 million, down $69 million compared to last year, but represents an 85% improvement over 2019 [20] - Third quarter EPS, excluding ASU, was $3.50, compared to $4.78 in Q3 2022, but still 90% higher than Q3 2019 [41][30] Business Line Data and Key Metrics Changes - Chemical sales increased by 5% in Q3, driven by increased volume, while building material sales declined by 13% [12][13] - Equipment sales declined by 9%, indicating solid demand for maintenance despite weaker new pool construction [14] - Commercial pool product demand remained strong with sales up 10%, while sales to independent retail customers were down 8% [14] - Pinch A Penny franchisees reported a 1% sales growth for the quarter, with solid maintenance product sales but weaker discretionary items [15] Market Data and Key Metrics Changes - Year-round markets saw sales declines: Florida down 5%, Arizona down 8%, California down 10%, and Texas down 11% compared to Q3 last year [10] - Europe experienced a 2% decline in local currency sales, an improvement from previous quarters [16] - The renovation and remodel business is outperforming new pool construction, with builders reporting better performance in remodels [110] Company Strategy and Development Direction - The company continues to focus on organic growth investments, adding new locations and expanding its franchise network [22][24] - The company aims to maintain gross margins around 30% for the full year, with expectations for Q4 margins around 29% [47][30] - The company is committed to providing a best-in-class customer experience and investing in technology tools to enhance service [56][66] Management's Comments on Operating Environment and Future Outlook - The current macroeconomic environment is challenging, but the desirability of swimming pools remains strong [27] - Management expects new pool construction units to finish down 30% in 2023, but anticipates continued renovation activity [26][28] - The company has narrowed its annual earnings guidance to a range of $13.15 to $13.65 per share [30][150] Other Important Information - The company achieved a record $750 million in operating cash flow year-to-date, significantly higher than the previous year [23] - Inventory was reduced by over $216 million year-to-date, surpassing the initial goal [23][42] - The company plans to selectively participate in vendor early buys for strategic inventory management [44] Q&A Session Summary Question: Can you discuss the competitive landscape post pool season? - Management noted that the competitive environment remains similar to past years, with the company taking market share despite overall volume declines [53][54] Question: What are the drivers for EPS growth in a tepid environment? - Management emphasized a focus on growth, margin improvement, and capacity creation as key drivers for EPS [58][71] Question: Is the maintenance and repair business stable? - Management indicated that the maintenance and repair business is predictable and stable, with a backlog of new pools requiring maintenance [90] Question: What is the outlook for new pool construction affordability? - Management stated that the main headwind for new pool construction is affordability, particularly for entry-level pools due to rising interest rates [100][102] Question: How is the renovation and remodel business performing? - Management confirmed that the renovation and remodel business is holding up better than new construction, with builders reporting strong demand [110][111]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 0-26640 POOL CORPORATION (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I.R.S. Employer incorporation ...

Where Outdoor Living Comes to Life 2 ® This presentation includes forward-looking statements that involve risks and uncertainties that are generally identifiable through the use of words such as "believe", "expect", "anticipate", "intend", "plan", "estimate", "project", "should", "will", "may", and similar expressions and include projections of earnings. The forward-looking statements in this presentation are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 ...

Financial Data and Key Metrics Changes - The company reported net sales of $1.9 billion for Q2 2023, marking a 4% increase compared to Q2 2021, but a decline from Q2 2022 [14][39] - Operating income for Q2 2023 was $327 million, down $92 million year-over-year, but up almost 90% compared to 2019 [30] - Gross margin for the quarter was 30.6%, a decline of 180 basis points from Q2 2022, primarily due to sales concessions and competitive pricing [40][28] - Diluted EPS, excluding ASU, was $5.89, down 22% from Q2 2022 but 94% higher than Q2 2019 [46] Business Line Data and Key Metrics Changes - New pool construction revenues were down approximately 5%, while renovation revenues declined around 3% in Q2 [104] - Chemical sales decreased by 3% due to adverse weather conditions, impacting maintenance business [25] - Commercial swimming pool sales increased by 8% in Q2, following a 12% increase in Q1 [26] Market Data and Key Metrics Changes - Sales in Arizona declined by 7%, an improvement from a 14% decline in Q1 [15] - Florida sales decreased by 7%, remaining flat year-to-date, following significant growth in previous years [16] - California sales declined by 8%, showing improvement from a 24% decline in Q1 [22] - European sales were down 6% compared to the prior year, but improved from a 25% decrease in Q1 [27] Company Strategy and Development Direction - The company continues to invest in growth, opening eight new sales centers and expanding its franchise network [18][31] - Focus on enhancing customer experience and retaining market share through new technology and tools like POOL360 [19][20] - The company expects to see a return to steady historical growth after navigating current market challenges [31] Management's Comments on Operating Environment and Future Outlook - Management noted that weather conditions and high interest rates have created challenges for new pool construction, particularly in the lower market segment [8][32] - The company anticipates a decline in new pool construction by about 30% for 2023, with expectations of increased average spending on higher-priced pools [32] - Management expressed confidence in the long-term outlook of the industry, citing a larger install base and ongoing demand for renovations [35][36] Other Important Information - The company reduced debt by $411 million from June 2022 and generated $377 million in cash from operations [49][50] - Full-year guidance for 2023 was adjusted to an EPS range of $13.14 to $14.14, reflecting the impact of weather and macroeconomic conditions [37][56] - The quarterly dividend was increased by 10%, raising it to $1.10 per share [56] Q&A Session Summary Question: How can the company be comfortable that this is the last cut to guidance? - Management indicated improved visibility into the year due to passing the most seasonally significant part and better consumer buying patterns [61][66] Question: Can the new pool construction segment reaccelerate without housing market improvement? - Management noted stability at the mid and upper end of the market but did not foresee an acceleration in new pools without housing market indicators improving [108] Question: What is the impact of weather on sales? - Management estimated a total weather impact of $90 million to $100 million for the year, with $30 million attributed to Q2 [124][125] Question: Can the company elaborate on consumer sentiment and mix shift? - Management confirmed a mix shift towards higher-end pools, with affluent families less concerned about financing costs, while entry-level pools face challenges due to increased financing costs [82][84] Question: How is competition affecting market share? - Management acknowledged ongoing competition but expressed confidence in maintaining market share due to the company's unique value proposition and extensive resources [95][99]

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements for the quarter ended March 31, 2023 Consolidated Statements of Income Consolidated Statements of Income (Q1 2023 vs Q1 2022) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net sales | $1,206,774 | $1,412,650 | | Gross profit | $369,755 | $447,189 | | Operating income | $145,771 | $235,723 | | Net income | $101,699 | $179,261 | | Diluted EPS | $2.58 | $4.41 | - Cash dividends declared per common share increased to **$1.00** in Q1 2023 from $0.80 in Q1 2022, a **25% increase**[9](index=9&type=chunk) Consolidated Statements of Comprehensive Income Consolidated Statements of Comprehensive Income (Q1 2023 vs Q1 2022) | Metric (in thousands) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net income | $101,699 | $179,261 | | Total other comprehensive (loss) income | $(1,340) | $11,384 | | Comprehensive income | $100,359 | $190,645 | Consolidated Balance Sheets Key Balance Sheet Items (in thousands) | Account | March 31, 2023 | March 31, 2022 | December 31, 2022 | | :--- | :--- | :--- | :--- | | Total current assets | $2,305,199 | $2,398,757 | $2,018,991 | | Product inventories, net | $1,686,683 | $1,641,155 | $1,591,060 | | Total assets | $3,862,829 | $3,882,141 | $3,565,437 | | Total current liabilities | $977,420 | $958,448 | $675,714 | | Long-term debt, net | $1,332,670 | $1,483,808 | $1,361,761 | | Total liabilities | $2,606,079 | $2,707,863 | $2,330,243 | | Total stockholders' equity | $1,256,750 | $1,174,278 | $1,235,194 | Condensed Consolidated Statements of Cash Flows Summary of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $103,203 | $(208,109) | | Net cash used in investing activities | $(17,560) | $(9,159) | | Net cash (used in) provided by financing activities | $(105,518) | $228,717 | | Change in cash and cash equivalents | $(19,121) | $11,044 | - Key financing activities in Q1 2023 included **$39.1 million in dividend payments** and **$50.5 million in treasury stock purchases**[16](index=16&type=chunk) Consolidated Statements of Changes in Stockholders' Equity Changes in Stockholders' Equity Q1 2023 (in thousands) | Description | Amount | | :--- | :--- | | Balance at December 31, 2022 | $1,235,194 | | Net income | $101,699 | | Repurchases of common stock | $(50,549) | | Declaration of cash dividends | $(39,073) | | Other comprehensive loss & share-based comp. | $(1,340) + $10,819 | | Balance at March 31, 2023 | $1,256,750 | Notes to Consolidated Financial Statements - In March 2023, the company **acquired the distribution assets of Pro-Water Irrigation & Landscape Supply, Inc**, adding two locations in Arizona[29](index=29&type=chunk) - The company **utilizes interest rate swap contracts** to convert variable interest rates to fixed rates on a portion of its borrowings to mitigate exposure to interest rate fluctuations[32](index=32&type=chunk)[35](index=35&type=chunk) Components of Debt (in thousands) | Debt Component | March 31, 2023 | March 31, 2022 | | :--- | :--- | :--- | | Short-term borrowings and current portion | $33,080 | $21,265 | | 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 | | **Total debt** | **$1,365,750** | **$1,505,073** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=14&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the 15% decrease in Q1 2023 net sales and updates full-year 2023 guidance Overview - Net sales **decreased 15%** in Q1 2023 to **$1.2 billion**, following exceptionally strong growth of 33% in Q1 2022 and 57% in Q1 2021[50](index=50&type=chunk) - Unusually wet and cold weather in western U.S. markets significantly impacted results, with combined base business sales **down 21% YoY**[50](index=50&type=chunk) - The company updated its full-year 2023 guidance, now expecting sales to be **down in the mid-single digits** and diluted EPS in the range of **$14.62 to $16.12**[62](index=62&type=chunk)[65](index=65&type=chunk) Results of Operations Q1 2023 vs Q1 2022 Performance | Metric | Q1 2023 | Q1 2022 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,206.8M | $1,412.7M | (15)% | | Gross Profit | $369.8M | $447.2M | (17)% | | Gross Margin | 30.6% | 31.7% | (110 bps) | | Operating Expenses | $224.0M | $211.5M | 6% | | Operating Income | $145.8M | $235.7M | (38)% | - Key factors impacting the **15% sales decline** included unfavorable weather, lower early buy activity, and European market softness, partially offset by inflationary price increases[78](index=78&type=chunk) - Excluding a tax benefit from ASU 2016-09, adjusted diluted EPS **decreased 42% to $2.46** in Q1 2023 from $4.23 in Q1 2022[83](index=83&type=chunk)[89](index=89&type=chunk) Seasonality and Quarterly Fluctuations - The business is seasonal, with approximately **59% of net sales** and **67% of operating income** generated in the second and third quarters of 2022[90](index=90&type=chunk) - In Q1 2023, results were **unfavorably impacted by unusually wet and cold weather** in the western U.S, particularly in California and Arizona[96](index=96&type=chunk) Critical Accounting Estimates - There have been **no changes** to the critical accounting estimates from those previously disclosed in the 2022 Annual Report on Form 10-K[97](index=97&type=chunk) Liquidity and Capital Resources - Net cash provided by operations **improved significantly to $103.2 million** for Q1 2023 from a use of $208.1 million in Q1 2022, primarily due to positive changes in working capital[101](index=101&type=chunk) - The company's primary sources of liquidity are cash from operations and **three major credit facilities**[105](index=105&type=chunk)[106](index=106&type=chunk)[108](index=108&type=chunk)[110](index=110&type=chunk) - As of March 31, 2023, the company was **in compliance with all material covenants**, with an average total **leverage ratio of 1.48** and a **fixed charge coverage ratio of 7.96**[113](index=113&type=chunk)[117](index=117&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company reports no material changes in its market risk exposures from the prior annual report - There have been **no material changes** in interest rate risk or currency risk during the three months ended March 31, 2023, from what was reported in the 2022 Annual Report on Form 10-K[121](index=121&type=chunk)[122](index=122&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2023 - Based on an evaluation as of March 31, 2023, the company's management concluded that **disclosure controls and procedures were effective**[123](index=123&type=chunk) - **No changes in internal control** over financial reporting occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[124](index=124&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) Ongoing litigation is not expected to have a material adverse impact on the company's financial condition - The company is subject to various claims and litigation but **does not believe their resolution will have a material adverse impact** on its financial condition[128](index=128&type=chunk) [Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the last annual report - There have been **no material changes** to the risk factors disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2022[129](index=129&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 144,005 shares in Q1 2023, with $186.4 million remaining under the buyback program Common Stock Repurchases in Q1 2023 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 1-31, 2023 | — | $— | | February 1-28, 2023 | 34,851 | $356.99 | | March 1-31, 2023 | 109,154 | $350.18 | | **Total** | **144,005** | **$351.83** | - As of April 24, 2023, **$186.4 million remained available** under the current share repurchase program[132](index=132&type=chunk) [Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including CEO/CFO certifications and iXBRL data - The report includes **required certifications by the CEO and CFO** (Exhibits 31.1, 31.2, 32.1) and financial statements formatted in **iXBRL (Exhibit 101)**[134](index=134&type=chunk)