Pool Corp (POOL), a wholesale distributor of swimming pool and related backyard products, has announced a 21.74 percent rise in profit for the quarter ended Mar. 31, 2014. The company earned $4.19 million or $0.09 a share in the first-quarter, compared with $3.44 million or $0.07 a share a year ago.
Analysts on average had predicted profit of $0.07 a share.
Revenue during the first-quarter climbed 9.72 percent to $406.34 million from $370.36 million in the last year period.
Gross margin contracted by 21 basis points over the last year period to 28.08 percent. Total expenses as a percentage of revenues decreased to 97.87 percent from 98.13 percent in the same period last year. That resulted in improvement of 26 basis points in operating margin to 2.13 percent.
The company reported operating income of $8.65 million, compared with an operating income of $6.93 million in the previous year period.
''We are now fully engaged in 2014, with our team dedicated to exceeding customers' expectations every day to earn their business. We affirm our 2014 annual earnings guidance of $2.35 to $2.45 per diluted share. All in all, we believe we have the tools, the programs, the inventory, the support and especially, the people to uniquely provide more value than anyone in the industry,'' said Perez de la Mesa.
Cash flow
Pool Corp has spent $37.34 million in cash to meet operating activities during the quarter, as against cash outgo of $39.99 million in the last year period.
The company has spent $10.33 million in cash to meet investing activities during the quarter, as against cash outgo of $5.20 million in the year period. It has made net capital expenditure of $5.87 million during the quarter, which was higher by 20.24 percent or $0.99 million from a year ago.
The company has generated cash of $47.79 million from financing activities during the quarter, up 7.31 percent or $3.26 million, when compared with the last year period.
The company has borrowed net of $21.44 million through debt during the quarter. It has spent net of $22.94 million on common stock repurchases. The company's cash dividend payment increased 15.27 percent or $1.14 million to $8.57 million.
As on Mar. 31, 2014, Pool Corp's cash balance stood at $7.26 million, down 43.63 percent or $5.62 million from Mar. 31, 2013.
Working Capital
Pool Corp witnessed an increase in the working capital over the year. It stood at $362.96 million as at Mar. 31, 2014, up $17.75 million or 5.14 percent from $345.21 million on Mar. 31, 2013. The company's current ratio decreased to 1.91 as at Mar. 31, 2014 from 1.94 on Mar. 31, 2013.
The company's cash conversion cycle (CCC) decreased to 76 days for first-quarter from 97 days for the last year. CCC is a liquidity metric which expresses the length of time (in days) that a company uses to sell inventory, collect receivables and pay its accounts payable. Decreasing or steady CCCs are good for business.
Days' sales outstanding went down to 19 days for first-quarter compared with 37 days for the last year. This indicates the company has shortened credit period to clients for making payment.
Days' inventory outstanding decreased to 147 days for first-quarter compared with 152 days for previous year. This suggests the company took less time to convert the inventory into sales.
While days' payable outstanding went down to 90 days for first-quarter from 91 days for the last year. This reflects that the company has made early payment to vendors compared to prior year period.
Debt Position
The company has witnessed an increase in total debt over the last year. As at Mar. 31, 2014, the company's total debt stood at $324.23 million, up 16.39 percent or $45.67 million from Mar. 31, 2013.
The company's total debt accounts for 32 percent of total assets on Mar. 31, 2014, compared with 29.21 percent on Mar. 31, 2013.
The company witnessed an increase in debt to equity ratio to 1.24 on Mar. 31, 2014 when compared with 0.98 on Mar. 31, 2013.
Shares of Pool Corp fell 63 cents or 1.08 percent to close at $57.66 on Thursday.
