On this page of StockholderLetter.com we present the 3/29/2023 shareholder letter from POOL CORP — ticker symbol POOL. Reading current and past POOL letters to shareholders can bring important insights into the investment thesis.

 •  3/29/2023 Letter Continued (Full PDF)
 •  3/28/2024 POOL Stockholder Letter
 •  3/27/2025 POOL Stockholder Letter
 •  More "Consumer Goods" Category Stockholder Letters
 •  POOL Benford's Law Stock Score = 87

POOL 3/29/2023 Shareholder/Stockholder Letter Transcript:

ANNUAL
REPORT

OUR NETWORKS AND LOCATIONS
North America
Europe
2
10
3
1
1
11
5
2
3
9
77
26
3
2
1
1
1
9
2
5
2
4
4
1
55
1
10
3
6
4
5
2
6
2
1
7
7
1
10
1
5
8
2
7
1
1
1
1
2
2
10
Australia
62
4
1
3
1
Network
Total Sales Centers
SCP   
Superior   
Horizon   
NPT   
240
73
88
19
Total
420
1
1
1
TABLE OF
VISION
CONTENTS
STATEMENT
Message to Our Shareholders .......................................... 1
To be the best worldwide distributor of outdoor lifestyle
products that include all products relating to swimming pools,
MVVMKEXMSR   SXLIV TVSHYGXW XLEX IRLERGI XLI UYEPMX] SJ 
outdoor home life.
Financial Highlights .............................................................. 2
Giving Back ............................................................................ 3
Private Label Brands ............................................................ 4
Pool Corporation 2022 Form 10-K ................................ 5
Shareholder Information,
'SQTER] 3J  GIVW   (MVIGXSVW  ......... Inside Back Cover
MISSION
STATEMENT
To provide exceptional value to our customers and suppliers,
creating exceptional return for our shareholders while
providing exceptional opportunities for our employees.

MESSAGE TO OUR SHAREHOLDERS
Dear Fellow Shareholders,
that this business offers ample growth opportunities through
strategically placed new locations, acquisitions and continued
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opportunities in our European business, and our team continues to
strategically manage the business while providing best-in-class service.
Once again, the POOLCORP team demonstrated their unparalleled
operational skills in delivering the products our customers needed,
when they needed them, to serve pool owners throughout the
world. With the help of their hard work, we produced another
tremendous year, reporting our tenth consecutive year of record
results and achieving outstanding growth in sales and earnings.
Our annual net sales grew 17% to a record $6.2 billion, generating
over 23% growth in operating income to a new milestone of $1.0
billion. We increased our quarterly dividend per share by 25%
and repurchased 1.2 million shares, returning $611.3 million or
almost 82% of net income to our shareholders. Diluted earnings
per share increased to a record $18.70, up 17% over 2021.
As we consider the opportunities ahead, it is helpful to look back at
the evolution of our industry. Over the past three years, more than
300,000 in-ground swimming pools were built in the U.S., raising the
installed base of in-ground pools to over 5.4 million. In 2022, we
estimate that new pool construction decreased 16% to approximately
98,000 units from 117,000 units in 2021 when new pool construction
units had increased 22% over 2020. Each of these pools represents
a    customer for life    as ongoing maintenance, repair, replacement,
renovation and upgrade activities recur every season or year. We
have the privilege of serving an industry that grows intrinsically; as
new pools are built and added to the installed base, demand for
products to maintain and enhance these pools grows too. Since
our company   s inception 42 years ago, including during the Great
Recession, the unyielding addition to the installed base each year
has provided the foundation for an exciting and perpetually growing
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increases in selling prices of our products, which cumulatively grew
our revenue approximately 30% to 35% from 2019 to 2022, and a
shift in consumer preferences toward higher value products and
customizations for new and existing pools. All of these factors
combine to drive the long-term growth of the available market, and
we believe that we remain well positioned to serve the needs of
in-ground and above-ground pool owners, hot tub owners and other
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Our results couldn   t have been achieved without our continued
focus on our customers    experience and our long-standing
partnerships with our vendors, which combined to contribute to
further growth of the outdoor-living industry. During the year, our
experienced management team navigated challenges by leveraging
our formidable scale and capital resources to proactively invest in
inventory, ensuring that we had the best product availability and
the most extensive product selections to fully support and service
our customers    needs. Strategic working capital investments
in inventory and advanced technology offerings combined with
our vast sales center network and our 6,000 customer-focused
employees demonstrate the competitive advantages our scale and
breadth bring to the market. Further, we are strengthening our
foundation and adding to our capabilities by investing in processes
that enhance our customers    experiences even more. Our
highly trained team offers deep product knowledge along with
service that extends beyond the sales transaction to assist our
customers in all aspects of growing their businesses. Simply put, we
believe that our ability to serve customers, particularly in rapidly
changing conditions, far exceeds that of any of our competitors.
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about macro-economic factors weighing adversely on future
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construction activities and weakening consumer spend projections.
These concerns translated most heavily on stock prices for
companies associated with housing and consumer goods, including
ours. In this environment, our stock price experienced a decline
despite our record results. However, viewing this stock market
performance with a broader lens, we continued to generate strong,
long-term shareholder returns with a compound average annual
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to a 9.4% return realized by the S&P 500 Index over the same period.
We remain focused on the organic growth of our sales center
network, vertical integration from our Porpoise Pool and Patio
acquisition and providing our customers with convenient access to
a broad assortment of products, as well as tools to help them grow.
During the year, we continued to expand our sales center network
to position ourselves for future growth by investing in new markets
and freeing up capacity in our existing locations. We opened ten
sales centers and added one location via acquisition in high growth
markets, boosting our worldwide sales center network to 420
locations. These locations present opportunities for organic growth,
market share gains and providing new and innovative products in
these growing markets. Looking ahead, we anticipate growing our
reach into the do-it-yourself sector by leveraging our extensive
distribution resources to accelerate the strategic expansion of our
Pinch A Penny network. Industry estimates indicate that 70% of
pools are currently maintained directly by the homeowner, and
this allows us an increased footprint on how we serve this market.
For our Horizon business, we will continue to concentrate on
investments where we require additional capacity, and we believe
Favorable demographic, socioeconomic and consumer trends
have also positively impacted our industry and present additional
long-term growth opportunities.
Ongoing U.S. population
migration to more outdoor-friendly regions, coupled with a
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sustained growth opportunities in pool and outdoor living-oriented
markets for years to come. Further, the advancement of
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and user-friendly pool monitoring and maintenance provide
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making a swimming pool investment increasingly appealing. To
capitalize on this trend, we continue investing in technology and
processes to sharpen our customer experience and operating
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Thinking about the years ahead, we are excited by the opportunities
in front of us. While the near-term will present growth challenges in
an uncertain economic environment, we are impeccably positioned
to continue our long-standing track record of exceptional
performance by leveraging our powerful, pervasive sales center
network, broad product assortment, substantial capital resources
and the strongest team with the best talent in the industry. We
sincerely appreciate the steadfast support from our long-time
shareholders over the years, with whom we have enjoyed great
achievements. We welcome our new shareholders who invested in
POOLCORP in 2022 and look forward to continuing success ahead
as we remain intensely focused on creating exceptional value for all of
our shareholders, our customers and suppliers, and our employees.
Peter D. Arvan
President and Chief
)\IGYXMZI 3J  GIV
   1   
John E. Stokely
Chairman of the Board of Directors
and Lead Independent Director

FINANCIAL HIGHLIGHTS
NET SALES (in millions)
GROSS PROFIT (in millions)
12% CAGR 2012-2022
$6,500
13% CAGR 2012-2022
$2,200
6,179.7
$6,000
$5,500
$2,000
5,295.6
$5,000
$1,400
3,936.6
$4,000
$3,500
$3,000
$2,000
1,617.1
$1,600
$4,500
$2,500
1,933.4
$1,800
2,079.7
2,246.6 2,363.1
2,570.8
2,788.2
2,998.1
$1,200
3,199.5
1,130.9
$1,000
$800
$600
$1,500
591.3
643.3
675.6
2013
2014
2015
741.1
805.3
870.2
924.9
2018
2019
$400
$1,000
$200
$500
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
OPERATING INCOME (in millions)
2016
2017
2020
2022
NET INCOME (in millions)
22% CAGR 2012-2022
$1,100
25% CAGR 2012-2022
$800
1,025.8
$1,000
748.5
$700
$900
832.8
$800
650.6
$600
$700
$500
$600
$400
$500
464.0
$400
$300
$200
2021
165.5
188.9
216.2
2013
2014
2015
255.9
284.4
313.9
$200
$100
$100
2016
2017
2018
366.7
$300
341.2
2019
2020
2021
2022
DILUTED EARNINGS PER SHARE
97.3
110.7
128.3
149.0
2013
2014
2015
2016
191.6
2017
234.5
2018
261.6
2019
2020
2021
2022
RETURN ON EQUITY
27% CAGR 2012-2022
$20
120%
18.70
$18
105.0%
100%
15.97
$16
89.5%
$14
$10
60%
8.97
$6
$4
2.05
2.44
2.90
2013
2014
2015
3.47
2016
4.51
5.62
6.40
40%
69.9%
64.6%
76.1%
64.9%
51.3%
$8
$2
82.5%
80%
$12
34.3%
41.7%
20%
2017
2018
2019
2020
CUMULATIVE NET INCOME AND
CASH FLOW FROM OPERATIONS
2021
2022
2013
2014
2015
2016
2017
2018
2019
2020
2021
SOURCES OF CASH
USES OF CASH
Since company inception
Since company inception
(in millions)
2022
(in millions)
(in millions)
$3,900
$3,700
Capital
Expenditures
$436.2
(9%)
$3,500
$3,300
$3,100
$2,900
Proceeds from Debt
$1,307.7
(26%)
$2,700
$2,500
Dividends
$941.1
(19%)
$2,300
$2,100
Acquisitions, net and
Other Investments
$1,422.8
(29%)
$1,900
Stock Issuance
$365.7
(7%)
$1,700
$1,500
$1,300
$1,100
$900
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
CFFO
Net Income
   2   
Cash Flow from Operations
$3,314.5
(67%)
Treasury Stock
$2,135.4
(43%)

GIVING BACK
We believe that every child should know how to swim, and at the
heart of our program is a strong desire to reach children who are
furthest from opportunity. In 2022, we were excited to expand our
partnership with the YMCA, providing Safety Around Water lessons
and lifeguard training to more communities throughout the country.
As the 2022 pool season approached, the nationwide lifeguard
shortage threatened pool openings across the U.S. We are thankful
to our partners at the Y for teaching essential safety skills while also
providing teens and young adults with job opportunities that instill
responsibility and build leadership skills.
The program is now coming full circle as lifeguards who received
their training through the program begin to train the next
generation of swimmers. At a kickoff event in Westlake Village,
California, a lifeguard conducting the Safety Around Water
demonstration shared,    I did my lifeguard training through the Y, and
POOLCORP funded it. Now, I   m able to instruct and lifeguard
here at the Y. I want to teach kids how to have fun and be safe while
in the water which allows them to have a great pool experience.   
POOLCORP employees are proud to be part of the program as
well. At the same California event, POOLCORP regional manager
Gerry Mercado spoke about how important the company   s
involvement is to him.    Training lifeguards will create more jobs in
the community, and it allows more community swimming pools to
be able to open so the kids are able to enjoy the water,    Gerry
commented.    It brought tears to my eyes to see the way the
children reacted when they saw the swimming pool     getting
relief from the hot summer and being able to enjoy a cool
moment. Growing up in a community like this one, it   s a great opportunity to me personally to be able to be here
and share this moment with these kids. It really does bring joy.   
By the end of 2022, POOLCORP had donated nearly $2.2 million for
Safety Around Water lessons and lifeguard training offered through YMCAs
across the country with a total impact of more than 20,000 lessons in 16
regions from coast to coast. POOLCORP employees and customers have
also jumped in to take part in the program by donating new swimsuits and
towels to make sure that children have what they need to participate.
In expressing his appreciation, the president and CEO of the Southeast Ventura
County YMCA remarked,    I just want POOLCORP to understand that the value
of this gift and the amount of support is invaluable to our Y and to many Ys
across the country. Please keep in mind that what you are doing today is making
a lasting impression on all of us.    To learn more about the program,
visit poolcorp.com/splash-of-joy.
   3   



 3/29/2023 Letter Continued (Full PDF)