About Pool

Pool Corporation operates as a wholesale distributor of swimming pool supplies, equipment and related leisure products worldwide. The company is one of the leading distributors of irrigation and landscape maintenance products in the United States. As of December 31, 2023, the company operated 439 sales centers in North America, Europe, and Australia through the company's five distribution networks: SCP Distributors (SCP); Superior Pool Products (Superior); Horizon Distributors (Horizon); National Pool Tile (NPT); and Sun Wholesale Supply (Sun Wholesale). Business Strategy and Growth Strategy The company's core strategies are to promote the growth of its industry; to promote the growth of the company's customers' businesses; and to continuously strive to operate more effectively. The company promotes the growth of its industry through various advertising and promotional programs intended to raise consumer awareness of the benefits and affordability of pool ownership, the ease of pool maintenance and the many ways in which a pool and the surrounding spaces may be enjoyed beyond swimming. These programs include digital and media advertising, industry-oriented website development, such as www.swimmingpool.com, www.hottubs.com, and www.nptpool.com; social media platforms; and other digital marketing initiatives, including the company's NPT Backyard mobile app. The company uses these programs as tools to educate consumers and lead prospective pool owners to the company's customers. The company also promotes the growth of its industry by offering a growing selection of energy-efficient and environmentally preferred products, which support sustainability and can help pool owners save energy, water, time and money. The company's environmentally friendly technology products include variable speed pumps, LED pool and hot tub lights and high-efficiency heat pumps. The company's Horizon sales centers offer organic fertilizers, organic pesticides, and irrigation and drainage products that reduce water usage and soil erosion, allowing the company's customers and homeowners to have less of an impact on freshwater reserves. The company promotes the growth of its customers' businesses by offering the broadest product assortment through the largest number of conveniently located market-based sales centers and through comprehensive support programs that include promotional tools and marketing support to help the company's customers generate increased sales. The company provides in depth product training that allows its customers to expand the scope of their product offerings. The company also provides uniquely tailored advertising programs that include such features as digital marketing, customer lead generation, personalized websites, brochures, direct mail, marketing campaigns and business development training. As a customer service, the company also provides certain customers assistance with all aspects of their business, including site selection, store layout and design, product merchandising, comprehensive product offering selections and efficient ordering and inventory management processes. In addition to these programs, the company features consumer showrooms in over 100 of the company's sales centers and hosts its annual Retail Summit to educate the company's customers about product offerings and the overall industry. The company also functions as a day-to-day resource by offering product and market expertise to serve the company's customers' unique needs. The company creates capacity with business to business development tools and execution aimed at ensuring best-in-class service and value creation for the company's customers and suppliers. In particular, the company's Pool360 and Horizon 24/7 internet and mobile platforms help its customers be more productive by allowing them to digitally receive pricing and product availability information, and enter orders, while leveraging the company's customer service staff resources, particularly during peak business periods. These tools offer real-time integration into the company's enterprise resource planning system, creating efficiencies in the company's business processes and also provide its customers graphical catalog presentation in the same platform. The company's BlueStreak mobile ordering platform enables its sales associates to process orders faster, often eliminating the need for customers to get out of their vehicles. The company is focused on efficiency at its sales centers and warehouses through order processing speed at the counter, intentional showroom layouts, sales center merchandising, bin replenishment and velocity slotting. Velocity slotting uses technology to identify fast moving, high velocity items, which are then color-coded and placed in an easily accessible location to create efficiencies for both the company's employees and customers. Ongoing investments in digital transformation and technology help the company provides best-in-class service to its customers by improving the customer experience, enhancing the company's existing customer relationships and expanding its customer base. To that end, a part of the company's growth strategy includes investing in technology that allows the company to better serve its customers and using this information to make better data-driven decisions for the company's business. The company recently launched Pool360 WaterTest and are in the process of rolling out Pool360 PoolService under the company's Pool360 platform of technologies. Pool360 WaterTest is a professional water testing software available to the company's retail customers that works with its complete line of proprietary brand pool and hot tub chemicals. The company's Pool360 PoolService app is a mobile tool that allows pool professionals to better manage their service business and improve their customers' experience. These tools allow the company to support and grow its retail and service customer base. Going forward, the company plans to continue to grow its suite of Pool360 technologies with additional resources for the company's customers. The company has grown its distribution networks through new sales center openings, acquisitions and the expansion of existing sales centers depending on the company's market presence and capacity. The company plans to continue to make strategic acquisitions and open new sales centers to further penetrate existing markets and expand into both new geographic markets and new product categories. Customers and Products The company serves roughly 125,000 customers. Most of the company's customers are small, family-owned businesses with relatively limited capital resources. Most of these businesses provide labor and technical services to the end consumer and operate as independent contractors and specialty retailers employing no more than ten employees (in many cases, working alone or with a limited crew). These customers also buy products from other distributors, mass merchants, home stores and certain specialty and internet retailers. The company provides extended payment terms to qualified customers for sales under pre-season early buy programs, which typically occur during the fourth and first quarters. The extended terms usually require payments in equal installments during the second quarter of each year. The company sells its products primarily to the following types of customers: swimming pool remodelers and builders; specialty retailers that sell swimming pool supplies, including independently owned and operated Pinch A Penny franchise stores; swimming pool repair and service businesses; irrigation construction and landscape maintenance contractors; and commercial pool operators and pool contractors who build, remodel or service large commercial installations, such as hotels, universities and community recreational facilities. The company conducts its operations through 439 sales centers in North America, Europe and Australia. The company's primary markets, with the highest concentration of swimming pools, are California, Texas, Florida and Arizona, collectively representing approximately 54% of the company's 2023 net sales. In 2023, the company generated approximately 95% of its sales in North America (including Canada and Mexico), 4% in Europe and 1% in Australia. The company's intention is to be a trusted resource for both industry professionals, retailers, and consumers in the outdoor living industry. The company uses local sales and marketing personnel to promote the growth of its business and develop and strengthen the company's customers' businesses. The company's sales and marketing personnel focus on developing customer training programs and promotional activities, creating and enhancing sales management tools and providing product and market expertise. The company's local sales personnel work from its sales centers as trusted resources for the company's customers and are charged with understanding and meeting the company's customers' specific needs. The company's sales center personnel help educate its customers on a variety of topics, including the newest, most innovative products and solutions that can elevate their businesses. The company offerss its customers more than 200,000 manufacturer and proprietary and exclusive brand products. The company's selection of pool equipment, supplies, chemicals, replacement parts, irrigation and related products, and other pool construction and recreational products is the most comprehensive in the industry. The company sells the following types of products: maintenance products, such as chemicals, supplies and pool accessories; repair and replacement parts for pool equipment, such as cleaners, filters, heaters, pumps and lights; building materials, such as concrete, plumbing and electrical components, both functional and decorative pool surfaces, decking materials, tile, hardscapes and natural stone, used for pool installations and remodeling; pool equipment and components for new pool construction and the remodeling and replacement of existing pools; irrigation and related products, including irrigation system components and professional turf care equipment and supplies; commercial pool products, including American Society of Material Engineers heaters, safety equipment, commercial decking equipment and commercial pumps and filters; fiberglass pools and hot tubs and packaged pool kits, including walls, liners, braces and coping for in-ground and above-ground pools; and other pool construction and recreational products, which consist of a number of product categories and include discretionary recreational and related outdoor living products, such as grills and components for outdoor kitchens. The company has over 650 product lines and approximately 50 product categories. Based on the company's 2023 product classifications, sales for the company's pool and hot tub chemicals product category represented approximately 14% of total net sales for 2023. The company offerss a growing selection of energy-efficient and environmentally preferred products, which support sustainability and can help pool owners save energy, water, time and money. Major equipment manufacturers have developed and will continue to develop more retrofit kits that allow homeowners to interact with their pools or hot tubs through their smartphones. Also, robotic cleaners offer consumers a more efficient option for maintaining their swimming pools. The company sees each of these developments as significant growth opportunities. The company has increased its product offerings and service abilities related to commercial swimming pools. The company considers the commercial market to be a key growth opportunity as the company focuses more attention on providing products to customers who operate and service large commercial installations, such as hotels, condominiums, apartment complexes, universities and community recreational facilities. The company continues to leverage its existing sales center networks and customer and vendor relationships to grow this market. In 2023, the sale of maintenance and minor repair products (non-discretionary) accounted for approximately 62% of the company's sales, while approximately 24% of the company's sales were derived from partially discretionary products used in the remodel, renovation, upgrade of pools; and approximately 14% of the company's sales were derived from discretionary products used in the construction and installation (equipment, materials, plumbing, electrical, etc.) of swimming pools. Operating Strategy The company distributes swimming pool supplies, equipment and related leisure products domestically through the company's SCP and Superior sales center networks and internationally through the company's SCP network. The company adopted the strategy of operating two distinct distribution networks within the U.S. swimming pool market primarily to offer its customers a choice of distinctive product selections, locations and service personnel. The company distributes irrigation, landscape maintenance and related products through the company's Horizon network. Swimming pool tile, decking materials and interior pool surfacing products are distributed through the company's NPT network, as well as through SCP and Superior networks. The company's NPT network primarily serves the swimming pool market with the company's market-leading brand of pool tile and composite pool finish products but also provides some overlap with the irrigation and landscape industry as the company offers NPT hardscapes and other outdoor living products. As more consumers create and enhance outdoor living areas and invest more in their outdoor environment, the company can focus its resources to address such demand by leveraging the company's existing pool and irrigation and landscape maintenance customer base. The company feels the development of its NPT network is a natural extension of the company's distribution model. In addition to the company's 21 standalone NPT sales centers, the company has over 100 SCP and Superior sales centers that feature consumer showrooms where landscape and swimming pool contractors, as well as homeowners, can view and select pool components, including pool tile, decking materials and interior pool finishes in various styles and grades, and serve as stocking locations for the company's NPT brand products. The company also offers virtual tools for homeowners to select and design their pool and outdoor environments, collaborating with their chosen contractors to install these products. The company's NPT Backyard mobile app and www.nptpool.com allow the company's customers to virtually design, customize and view a pool in their own backyard within seconds. The company's showrooms, local stocking of products and virtual support provide the company with a competitive advantage in these categories. Sun Wholesale Supply, which the company acquired in December 2021, distributes swimming pool supplies, equipment and related leisure products, primarily servicing independently owned and operated Pinch A Penny, Inc. franchise locations. Since December 2021, the company has expanded Pinch A Penny franchise operations through additional locations of Pinch A Penny franchised stores and expect to continue these expansion initiatives. Sun Wholesale Supply also owns and operates a specialty chemical re-packaging plant providing pool chemical products to the Pinch A Penny franchised store network and a portion of the chemical products sold through the company's SCP and Superior sales centers. The company evaluates its sales centers based on their performance relative to predetermined standards that include both financial and operational measures. The company's corporate support groups provide its field operations with various services, such as developing and coordinating customer and vendor related programs, services from the company's real estate support function to find appropriate locations for the company's sales centers, human resources support, information systems support, support from the company's logistics and fleet teams, accounting and financial analysis support and expert resources to help them achieve their goals. Distribution The company's sales centers are located within population centers near customer concentrations, typically in industrial, commercial or mixed-use zones. The company's sales centers maintain well-stocked inventories to meet the company's customers' immediate needs. The company utilizes warehouse management technology to optimize receiving, inventory control, picking, packing and shipping functions. The company also operates four centralized shipping locations (CSLs) in the United States that redistribute products the company purchases in bulk quantities to the company's sales centers, or in some cases, directly to customers. The company's CSLs are regional locations that carry a wide range of outdoor living products. Suppliers The company's largest suppliers include Pentair plc; Hayward Pool Products, Inc.; and Zodiac Pool Systems, Inc., which accounted for approximately 19%, 10%, and 10%, respectively, of the cost of products the company sold in 2023. Seasonality The company's business is seasonal. In 2023, the company generated approximately 60% of its net sales and 70% of the company's operating income in the second and third quarters of the year (year ended December 2023). The company typically experiences a build-up of product inventories and accounts payable during the winter months in the anticipation of the peak selling season. Excluding borrowings to finance acquisitions, dividend payments and share repurchases, the company's peak borrowing usually occurs during the late spring and summer, primarily because extended terms offered by certain of the company's suppliers are typically payable during the second quarter of each year, while the company's peak accounts receivable collections typically occur in June, July and August. Based on the company's peak summer selling season, the company generally opens new sales centers and closes or consolidates sales centers, when warranted, either in the first quarter before the peak selling season begins or in the fourth quarter after the peak selling season ends. Government Regulations The company's business is subject to a wide variety of regulations, principally under local fire codes and international, federal, state and local environmental and health and safety requirements, including regulation by the Environmental Protection Agency, the Consumer Product Safety Commission, the Department of Transportation, the Occupational Safety and Health Administration, the National Fire Protection Agency, and the International Maritime Organization. Most of these requirements govern the packaging, labeling, handling, transportation, storage and sale of chemicals and fertilizers. The company stores certain types of chemicals and/or fertilizers at each of the company's sales centers and the storage of these items is strictly regulated by local fire codes. In addition, the company sells algaecides and pest control products that are regulated as pesticides under the Federal Insecticide, Fungicide and Rodenticide Act; and various state pesticide laws. These laws primarily relate to labeling, annual registration and licensing. History Pool Corporation was founded in 1993. The company was incorporated in the state of Delaware in 1993.