peter arvan, president & ceo mark joslin, senior …5 0 30 60 90 120 150 180 210 n exceptional...

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Peter Arvan , President & CEO Mark Joslin, Senior Vice President & CFO

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Page 1: Peter Arvan, President & CEO Mark Joslin, Senior …5 0 30 60 90 120 150 180 210 n Exceptional Shareholder Returns YE2018 value of $10,000 invested at POOL IPO in October 1995* POOL

Peter Arvan, President & CEOMark Joslin, Senior Vice President & CFO

Page 2: Peter Arvan, President & CEO Mark Joslin, Senior …5 0 30 60 90 120 150 180 210 n Exceptional Shareholder Returns YE2018 value of $10,000 invested at POOL IPO in October 1995* POOL

Forward Looking Statements

This presentation may contain forward-looking statements made pursuant to the safe harbor provisions of thePrivate Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date of thispresentation and are subject to change. The Company undertakes no obligation to update or reviseforward-looking statements to reflect new circumstances or unanticipated events as they occur. Actual results maydiffer materially due to a variety of factors, including the sensitivity of our business to weather conditions,changes in the economy and the housing market, our ability to maintain favorable relationships with suppliers andmanufacturers, competition from other leisure product alternatives and mass merchants, excess tax benefits ordeficiencies recognized under ASU 2016-09 and other risks detailed in POOLCORP’s 2018 Annual Report onForm 10-K filed with the Securities and Exchange Commission.

This presentation may also contain references to certain non-GAAP financial measures as defined by the SEC. Areconciliation of non-GAAP financial measures to their most directly comparable financial measures calculatedand presented in accordance with generally accepted accounting principles can be found in the Appendix at theend of this presentation, if applicable at http://ir.poolcorp.com/NonGAAP_Financial_Measures, or in theCompany’s most recent earnings release, which is furnished in our Current Report on Form 8-K filed with the SEC.

NASDAQ/GSM: POOL

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Page 3: Peter Arvan, President & CEO Mark Joslin, Senior …5 0 30 60 90 120 150 180 210 n Exceptional Shareholder Returns YE2018 value of $10,000 invested at POOL IPO in October 1995* POOL

POOLCORP Overview

o Undisputed leader in highly fragmented, niche distribution market with favorable growth dynamics

o High organic growth and recurring revenue (60%+) mitigates risk

o Value-add business model and focus on operating leverage drives high operating margins

o Exceptional performance history – 26.0% Total Shareholder Return CAGR over 23 years

NASDAQ/GSM: POOL

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Page 4: Peter Arvan, President & CEO Mark Joslin, Senior …5 0 30 60 90 120 150 180 210 n Exceptional Shareholder Returns YE2018 value of $10,000 invested at POOL IPO in October 1995* POOL

POOLCORP Global Network Revenue

Vision: ‘To be the best worldwide distributor of outdoor lifestyle home products’

Overview

NASDAQ/GSM: POOL

Global Network Sales

Centers(1)

Americas Pool 283

Irrigation & Landscape 67

Europe/Australia 22

Total 372

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(1)As of September 30, 2019

Page 5: Peter Arvan, President & CEO Mark Joslin, Senior …5 0 30 60 90 120 150 180 210 n Exceptional Shareholder Returns YE2018 value of $10,000 invested at POOL IPO in October 1995* POOL

NASDAQ/GSM: POOL

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Exceptional Shareholder Returns

YE2018 value of $10,000 invested at POOL IPO in October 1995*

POOL $2,041,598

S&P MidCap 400 $104,740

S&P 500 $62,931 Compound Annual Value

Growth Rate

(1995 – 2018)

POOL26.0%

S&P 500

8.3%

S&P MidCap 400

10.8%

Overview

Total ReturnCAGR

Source: Standard & Poor’s

* Including dividend reinvestment

‘Creating exceptional value over the long-term’

Page 6: Peter Arvan, President & CEO Mark Joslin, Senior …5 0 30 60 90 120 150 180 210 n Exceptional Shareholder Returns YE2018 value of $10,000 invested at POOL IPO in October 1995* POOL

Financial Results

‘Consistent revenue and gross profit growth’

NASDAQ/GSM: POOL

Source: Company Financial Data

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Page 7: Peter Arvan, President & CEO Mark Joslin, Senior …5 0 30 60 90 120 150 180 210 n Exceptional Shareholder Returns YE2018 value of $10,000 invested at POOL IPO in October 1995* POOL

Financial Results

‘Operating leverage generating strong earnings and investment returns’

NASDAQ/GSM: POOL

Source: Company Financial Data(1) See Appendix for Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS. CAGR excludes 2017-18 adjustments for tax and accounting changes.(2) See Appendix for ROIC calculation.

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Page 8: Peter Arvan, President & CEO Mark Joslin, Senior …5 0 30 60 90 120 150 180 210 n Exceptional Shareholder Returns YE2018 value of $10,000 invested at POOL IPO in October 1995* POOL

Capital Allocation Priorities

‘Capital deployment balancing growth and shareholder returns’

NASDAQ/GSM: POOL

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Capital Deployment

-Maintaining Leverage at 1.5x – 2.0x

Share Repurchase/ Debt Repayment

Dividends

Acquisitions

Capital Expenditures

$150 to $200 million

$70 to $80 million

$5 to $15 million

$35 to $40 million

Expected Near Term Range

Page 9: Peter Arvan, President & CEO Mark Joslin, Senior …5 0 30 60 90 120 150 180 210 n Exceptional Shareholder Returns YE2018 value of $10,000 invested at POOL IPO in October 1995* POOL

* Includes commercial and adjacent product categories

NASDAQ/GSM: POOL

Pool & Related Outdoor Living Product Vendors$12 Billion Market*

Wholesale DistributionLarge & Small Pool Construction Contractors, Pool Maintenance & Repair Companies, Pool

Specialty Retailers

Pool Owners & Commercial Pool Operators

U.S. POOL Market Overview

‘Wholesale distribution is the primary channel to market in the pool industry’

Source: Company estimates at wholesale values

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Large Retail & Building Contractors

Mass Merchants, Pool Specialty Retail Chains, Large Online

Retailers

70% 30%

Page 10: Peter Arvan, President & CEO Mark Joslin, Senior …5 0 30 60 90 120 150 180 210 n Exceptional Shareholder Returns YE2018 value of $10,000 invested at POOL IPO in October 1995* POOL

POOL Organic Growth Drivers

Growth Contributors 5 Year Outlook

Installed Base Growth 1% - 2%

Inflation 1% - 2%

Aging Base Remodel/New Construction Recovery 2% - 3%

Industry Growth Contributors 4% - 6%

Market Share Gains & New Products 2% - 3%

Total POOL Revenue Growth Range 6% - 8%

‘Strong industry and Company growth attributes’

NASDAQ/GSM: POOL

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Page 11: Peter Arvan, President & CEO Mark Joslin, Senior …5 0 30 60 90 120 150 180 210 n Exceptional Shareholder Returns YE2018 value of $10,000 invested at POOL IPO in October 1995* POOL

POOL Financial Model

Financial Measurement 5 Year History 5 Year Outlook

Organic Revenue Growth 5% - 7% 6% - 8%

Gross Profit Margins 28.6% - 29.0% Stable

Contribution Margin(1) 14% - 23% Mid-teens %

Share Repurchases $100 - $185 million $150 - $200 million

Earnings per Share Growth(2) 15% - 23% Mid-teens %

Return on Invested Capital(3) 18% - 28% 25+%

‘Outlook remains positive’

NASDAQ/GSM: POOL

(1) Incremental Operating Income Growth/Incremental Sales Growth(2) Excludes ASU 2016-09 effects(3) See calculation at http://ir.poolcorp[.com/NonGAAP_Financial_Measures

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Page 12: Peter Arvan, President & CEO Mark Joslin, Senior …5 0 30 60 90 120 150 180 210 n Exceptional Shareholder Returns YE2018 value of $10,000 invested at POOL IPO in October 1995* POOL

Summary

oPositive industry dynamics drive above-market growth

oSustainable competitive advantages with highly experienced team

oConsistent, exceptional investment performance

NASDAQ/GSM: POOL

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Page 13: Peter Arvan, President & CEO Mark Joslin, Senior …5 0 30 60 90 120 150 180 210 n Exceptional Shareholder Returns YE2018 value of $10,000 invested at POOL IPO in October 1995* POOL
Page 14: Peter Arvan, President & CEO Mark Joslin, Senior …5 0 30 60 90 120 150 180 210 n Exceptional Shareholder Returns YE2018 value of $10,000 invested at POOL IPO in October 1995* POOL

Appendix

NASDAQ/GSM: POOL

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Reconciliation of Reported Dilluted EPS to Adjusted Diluted EPS FYE 12/31/18 FYE 12/31/17

Reported Diluted EPS before adjustments and effects of tax and accounting changes $5.62 $4.51

Less:

Per diluted share effect of application of ASU 2016-09, Improvements to Employee Share-Based Payment

Accounting, standard(0.36) (0.24)

Per diluted share provisional tax benefit recorded for remeasurement of deferred tax liabilities upon enactment of

the Tax Cut and Jobs Act(0.28)

Adjusted Diluted EPS $5.26 $3.99

Reconciliation of Net Income to Adjusted EBITDA FYE 12/31/18 FYE 12/31/17 FYE 12/31/16 FYE 12/31/15 FYE 12/31/14 FYE 12/31/13

Net income ($ in thousands) $234,461 $191,339 $148,603 $128,224 $111,030 $97,330

Add:

Interest expense (1) 20,336 15,360 13,802 7,298 7,208 6,528

Provision for income taxes 58,774 77,982 92,931 80,137 70,559 61,590

Share-based compensation 12,874 12,482 9,902 9,543 9,065 8,150

Goodwill impairment - - 613 - - -

Equity (earnings) losses in unconsolidated investments, net of tax (242) (139) (156) (211) (204) (182)

Depreciation 26,122 24,157 20,338 16,373 14,495 13,359

Amortization (2) 1,102 976 1,012 398 845 825

Adjusted EBITDA $353,427 $322,157 $287,045 $241,762 $212,998 $187,600

(1) Shown net of interest income, impact of foreign currency transactions and includes amortization of deferred financing costs

(2) Excludes amortization of deferred financing costs

Return on Invested Capital 2018 2017 2016 (2) 2015 (2) 2014 (2) 2013 (2)

Numerator (trailing four quarters total):

Net Income attributable to Pool Corporation (1) $234,461 $179,633 $148,955 $128,275 $110,692 $97,330

Interest and other non-operating expenses, net 20,896 15,189 14,481 8,072 7,485 6,748

Less: taxes on Interest and other non-operating expenses, net at 20.1% for 2018,

33.4%(1) for 2017 and at respective effective tax rates for previous years(4,200) (5,073) (5,575) (3,108) (2,912) (2,618)

$251,157 $189,749 $157,861 $133,239 $115,265 $101,460

Denominator (average of trailing four quarters):

Long-term debt, net $602,984 $520,950 $441,026 $400,204 $366,407 $271,455

Short-term borrowings and current portion of long-term debt 15,190 11,030 3,806 1,732 1,038 16

Total stockholders’ equity (1) 286,979 236,901 237,380 254,298 257,502 313,401

$905,153 $768,881 $682,212 $656,234 $624,947 $584,872

Return on invested capital 27.7% 24.7% 23.1% 20.3% 18.4% 17.3%

(1) We reduced Net income attributable for Pool Corporation for 2017 by $12.0 million in calculating ROIC for the year. This amount represents our benefit related to the enactment of the Tax Cuts and Jobs Act.

We also adjusted our effective tax rate and our December 31, 2018 and 2017 retained earnings balance for this benefit. ROIC for 2018 and 2017 based on reported amounts is 27.5% and 26.2%

(2) Our 2013-2016 ROIC calculations have been conformed to our 2017-2018 presentation.