Though earnings dipped from the same period last year,
PoolCorp’s second-quarter performance exceeded
“From the reality in which we’re living, I think our
results are very, very positive,” said Manuel Perez de la
Mesa, President/CEO of the Covington, La.-based company.
PoolCorp reported a second-quarter net sales of $602.1 million,
a 13-percent decline from the $693.0 million of last year’s
second quarter. The first six months of 2009 saw net sales of
$878.7 million, down 15 percent from $1.031 billion the same period
Besides the economy, PoolCorp attributed the dip to the
unusually cold, wet weather.
One product category — chemicals — saw sales
increase 9 percent compared with the same period last year,
although part of that is due to steep price hikes across the
PoolCorp executives expect a slow industry recovery to begin
soon. “We’ll hit the low point in 2009,” Perez de
la Mesa said.
With many economists predicting that the second half of the year
will bring modest improvements in GDP and home values, Perez de la
Mesa and Vice President/CFO Mark Joslin said they believe the
economy will bottom out this year.
However, Perez de la Mesa sees the key pool states of
California, Arizona and Florida continuing to lag. “The
Arizona market has still got fairly strong headwinds, so the bottom
for Arizona may be closer to a year away,” he said.
And even on a national level, the corporation doesn’t
expect new-pool construction to pick up significantly next year.
“It won’t get to 2008 levels in 2010,” Perez de
la Mesa said. “It may not be until 2011 or 2012 before it
gets back to 2008 levels. I see 2007 levels maybe in 2012 to 2014.
And then 2006 levels — you’re talking more than five
Instead, PoolCorp expects the repair, maintenance and retail
sides of the industry to recover the fastest. “We believe
that replacement product sales will recover first and recover
faster, given the lower cost to consumers and the reality that the
pools and the equipment can only be patched up for so long before
replacement becomes inevitable,” said Perez de la Mesa during
PoolCorp’s second-quarter earnings call to investors and
Where Florida and Southern California may have a tougher time
coming out of the economy, sales of repair and maintenance products
should rise in those states, Perez de la Mesa said.
“They’re the older markets, and the older markets have
a lot of pools that need to be maintained,” he said.
The company predicted that its own performance would remain
level for the third quarter then increase modestly in the
The report was especially welcome after an article appeared
earlier that week in the financial magazine Barron’s, saying that PoolCorp stock
isn’t a wise choice, given the state of the pool market and
its slow recovery.
Writer Sandra Ward predicted that the stock could drop from $18
to $10, citing a slow economic recovery and PoolCorp’s $400
million in debt.
“That article was essentially written by somebody who was
short in the stock, in an effort to drive the price lower so they
could buy back their shares and cover their short,” Perez de
la Mesa said. “Some of [the author’s] fundamental
premise was false. [She] talked about how many pools were going to
be closing down and how maintenance and repair sales were going to
be so adversely impacted. Obviously they weren’t. Our
chemical sales were up… because people still maintain their
Following the piece, PoolCorp stock dropped 2.8 percent. But
after the second-quarter report, it climbed 17 percent from the
opening price on the day of the report to the closing price the day
In other PoolCorp news, the company has scheduled its third
annual National Sales Conference and Tradeshow for Oct. 5 to 7 at
the Sheraton Suites Market Center in Dallas. Training sessions are
expected to cover sales, sourcing, building materials, chemicals,
spas, grills, aboveground pools and marketing tools. A vendor
showcase allows professionals to meet with manufacturers and learn
about new products. The distributor expects more than 1,000 of its
key staff to attend.