Pool Corp(US:POOL)2025-07-30 15:51Financial Performance - Net sales for Q2 2025 were $1.78 billion, a 1% increase from $1.77 billion in Q2 2024, driven by growth in maintenance-related products[85]. - Gross profit increased by $5.0 million to $535.2 million, with a consistent gross margin of 30.0% compared to Q2 2024[64][88]. - Operating income rose by $1.2 million, maintaining an operating margin of 15.3% for both Q2 2025 and Q2 2024[66]. - Net income for Q2 2025 was $194.3 million, up from $192.4 million in Q2 2024, with diluted earnings per share increasing 4% to $5.17[66]. - Net income for the second quarter of 2025 increased to $194.3 million, up from $192.4 million in the same period of 2024, representing a growth of 1%[92]. - Earnings per diluted share rose 4% to $5.17 in Q2 2025, compared to $4.99 in Q2 2024[92]. - Net income for the first six months of 2025 decreased by 9% to $247.8 million, down from $271.3 million in the same period of 2024[101]. - Adjusted diluted EPS for the first six months of 2025 was $6.47, a decrease of 5% from $6.83 in the same period of 2024[106]. Expenses and Costs - Selling and administrative expenses increased by 1% to $262.5 million, representing 14.7% of net sales, reflecting effective cost management[65][89]. - Operating expenses increased by 2% to $497.3 million for the first six months of 2025, compared to $488.5 million in the same period of 2024, raising the operating expenses as a percentage of net sales to 17.4%[97]. - The effective income tax rate increased to 24.2% for the first half of 2025, compared to 23.1% for the same period in 2024[100]. - Interest and other non-operating expenses decreased by $4.1 million in the first half of 2025, with a weighted average effective interest rate of 4.5%[99]. Debt and Financing - Total debt outstanding increased by $113.4 million to $1.2 billion, primarily due to share repurchases of $156.4 million in the first half of 2025[71]. - Net cash provided by financing activities was $33.1 million for the first six months of 2025, compared to net cash used of $100.0 million in the same period of 2024, reflecting $279.2 million of net debt proceeds[125]. - As of June 30, 2025, the average total leverage ratio was 1.47, well below the maximum limit of 3.25[138]. - The fixed charge coverage ratio was 4.90 as of June 30, 2025, exceeding the minimum requirement of 2.25[138]. - At June 30, 2025, there was $354.8 million of revolving borrowings outstanding and $430.1 million available for borrowing under the Credit Facility[128]. - The Receivables Facility allows borrowing up to $375.0 million during certain months, with $320.1 million outstanding at June 30, 2025[134]. - The company plans to continue utilizing its three major credit facilities to supplement cash from operations for working capital needs[126]. - As of July 24, 2025, $515.7 million remained available for share repurchases under the current program[142]. Inventory and Sales Projections - Inventory levels rose by $34.6 million, or 3%, to $1.3 billion, with inventory turns improving to 2.8 times from 2.7 times year-over-year[70]. - The company expects full-year 2025 sales to be relatively flat compared to 2024, with an estimated price contribution of approximately 2% from tariffs[73]. - Net sales for the first six months of 2025 decreased by 1% to $2,856.1 million, down from $2,890.6 million in the same period of 2024[94]. Capital Expenditures - Capital expenditures were 1.1% of net sales in 2024 and 2023, with projections for 2025 to be approximately 1.0% to 1.5% of net sales[120]. - Capital expenditures primarily focus on maintenance and growth of the sales center network, technology investments, and vehicle fleet[122]. Seasonal Trends - Seasonal fluctuations are expected to continue, with approximately 60% of net sales and 73% of operating income generated in the second and third quarters[107]. Cash Flow - Net cash used in operations was $1.5 million in the first six months of 2025 compared to net cash provided by operations of $172.1 million in the first six months of 2024, primarily due to a $68.5 million federal tax payment and increased inventory investments[123].