Pool Corp. (POOL) reported a fourth quarter loss of 27 cents per share, 3 cents below the Zacks Consensus Estimate of a loss of 24 cents. However, the company has narrowed its loss from the prior-year quarter’s loss of 30 cents. Results reflected a slowdown in construction activity and adverse weather conditions. 

Including the impact of non-cash charges related to facility closures, the company reported a loss of $13.6 million or 28 cents per share, compared to a loss of $14.8 million or 31 cents in the year-ago quarter. Due to the seasonality in its business, the company usually reports a loss in the first and fourth quarters.
 
For full year 2009, Pool Corp. reported a net income of $19.2 million or 39 cents per share down from $57.0 million or $1.17 in 2008. Excluding the impact of Latham Acquisition Corporation’s non-cash impairment charge and the non-cash charges related to facility closings, adjusted earnings came in at $46.5 million or 95 cents per share compared to $57.2 million or $1.18. Net sales were down 14% year-over-year to $1.54 billion. Results reflected the stressed economic conditions in 2009. 

For the fourth quarter, Pool Corp. reported an 11% year-over-year drop in net sales to $231.0 million. Base business sales declined 13% compared to the prior-year quarter. Results reflected the prolonged impact of lower pool and irrigation construction activity as the economic downturn is forcing consumers to cut back on expenditures. 

Gross profit was down 11% from the year-ago period to $67.1 million. Gross margin decreased 10 basis points to 29.0% from 29.1% for the same period last year. However, operating expenses decreased 2% from the year-ago period to $88.8 million. Results reflected the benefits of the cost-containment measures. The company reported an operating loss of $21.8 million compared to an operating loss of $15.3 million in the year-ago quarter. 

Pool Corp. managed to reduce debt levels by $79.1 million from the prior-year period to $248.7 million. Net interest expense for the quarter declined $3.5 million due primarily to a 43.0% decrease in interest expense and $1.5 million of foreign currency transaction gains. 

Net receivables declined 17% from the prior-year period primarily due to lower fourth quarter sales and a shift towards more cash sales resulting from tighter credit terms. Inventory levels decreased 12% year-over-year to $355.5 million as of Dec 31, 2009. Day Sales Outstanding (DSO), which measures the length of time it takes to recycle receivables into cash, improved to 34.9 days from 36.3 at the end of 2008. 

Outlook 

Pool Corp. anticipates 2010 earnings to range between $1.00 and $1.15 per share. The company expects unfavorable weather conditions during the first six weeks of 2010 to result in a higher seasonal first quarter loss in 2010 compared to 2009 and expects progress in year-over-year comparisons as the year proceeds.
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