−Removed: Pool Corporation (the Company , which may be referred to as we, us or our ) is the world’s largest wholesale distributor of swimming pool supplies, equipment and related leisure products and is one of the leading distributors of irrigation and landscape products in the United States.
−Removed: Our vision is to establish POOLCORP as the global, digital distribution leader in swimming pool, backyard and irrigation and landscape distribution markets.
−Removed: The Company was incorporated in the State of Delaware in 1993 and has grown from a regional distributor to a multi-national, multi-network distribution company.
+Added: Pool Corporation (the Company , which may be referred to as we, us or our ), a member of the S&P 500 Index, is the world’s largest wholesale distributor of swimming pool supplies, equipment and related leisure products and is one of the leading distributors of irrigation and landscape products in the United States.
Our industry is highly fragmented, and as such, we add considerable value to the industry by purchasing products from a large number of manufacturers and then distributing the products to our customer base on conditions that are more favorable than our customers could obtain on their own.
−Removed: As of December 31, 2020, we operated 398 sales centers in North America, Europe and Australia through our four distribution networks:
+Added: As of December 31, 2021, we operated 410 sales centers in North America, Europe and Australia through our five distribution networks:
• SCP Distributors (SCP);
2 unchanged sentences
• National Pool Tile (NPT);
−Removed: We believe that the swimming pool industry is relatively young, with room for continued growth from the increased penetration of new pools.
−Removed: Significant growth opportunities also reside with pool remodel and pool equipment replacement activities due to the aging of the installed base of swimming pools, technological advancements and the development of energy-efficient and more aesthetically attractive products.
+Added: • Sun Wholesale Supply, Inc.
+Added: (Sun Wholesale).
+Added: We believe that the swimming pool industry has room for continued growth from the increased penetration of new pools.
+Added: Significant growth opportunities also reside with pool remodel and pool equipment replacement activities due to the aging of the installed base of swimming pools, technological advancements and the development of environmentally sustainable, energy-efficient and more aesthetically attractive products.
Additionally, the desire for consumers to enhance their outdoor living spaces with hardscapes, lighting and outdoor kitchens also promotes growth in this area.
5 unchanged sentences
• consumers using more automation and control products, higher quality materials and other pool features that add to our sales opportunities over time;
−Removed: • increased consumer spending on homes including outdoor living spaces driven by stay-at-home and remote work trends.
+Added: • consumers increasing focus on environmentally sustainable, energy-efficient products;
+Added: • increased consumer spending driven by stay-at-home and remote work trends as homeowners seek to create attractive areas in their backyards as an extension of their home space.
Almost 60% of consumer spending in the pool industry is for maintenance and minor repair of existing swimming pools.
4 unchanged sentences
The following table reflects growth in the domestic installed base of in-ground swimming pools over the past 11 years (based on Company estimates and information from 2020 P.K.
−Removed: The replacement and refurbishment market currently accounts for close to 25% of consumer spending in the pool industry.
+Added: The replacement and refurbishment market currently accounts for 20% to 25% of consumer spending in the pool industry.
The activity in this market, which includes major swimming pool remodeling, is driven by the aging of the installed base of pools.
The timing of these types of expenditures is more sensitive to economic factors including home values, single-family home sales and consumer confidence that impact consumer spending compared to the maintenance and minor repair market.
−Removed: New swimming pool construction comprises just over 15% of consumer spending in the pool industry.
+Added: New swimming pool construction comprises 15% to 20% of consumer spending in the pool industry.
The demand for new pools is driven by the perceived benefits of pool ownership including relaxation, entertainment, family activity, exercise and convenience.
6 unchanged sentences
The irrigation and landscape distribution business serves both residential and commercial markets, with the majority of sales related to the residential market.
−Removed: We believe that irrigation accounts for approximately 35% - 40% of total spending in the industry, with the remaining 60% - 65% of spending related to landscape maintenance products, power equipment, hardscapes and specialty outdoor products and accessories.
+Added: Within the United States market, we believe that irrigation accounts for approximately 35% of total spending in the industry, with the remaining 65% of spending related to landscape maintenance products, power equipment, hardscapes and specialty outdoor products and accessories.
Our NPT network primarily serves the swimming pool market but does provide some overlap with the irrigation and landscape industries as we offer our market-leading brand of pool tile, composite pool finish products and hardscapes.
3 unchanged sentences
We also offer virtual tools for homeowners to select and design their pool and outdoor environments, working with their chosen contractors to install these products.
+Added: Our NPT Backyard app allows our customers to virtually design, customize and view a pool in their own backyard within seconds.
We believe our showrooms, local stocking of products and virtual support provide us with a competitive advantage in these categories.
2 unchanged sentences
Certain trends in the housing market, the availability of consumer credit and general economic conditions (as commonly measured by Gross Domestic Product or GDP) affect our industry, particularly new pool and irrigation system starts as well as the timing and extent of pool refurbishments, equipment replacement, landscaping projects and outdoor living space renovations.
+Added: Consumers typically spend more on new pools, refurbishment and replacement when general economic conditions are strong.
We believe that over the long term, single-family housing turnover and home value appreciation may correlate with demand for new pool construction, with higher rates of home turnover and appreciation having a positive impact on new pool starts over time.
−Removed: We also believe that homeowners’ access to consumer credit is a critical factor enabling the purchase of new swimming pools and irrigation systems.
+Added: We also believe that homeowners’ good economic standing and access to consumer credit are critical factors enabling the purchase of new swimming pools and irrigation systems.
Similar to other discretionary purchases, replacement and refurbishment activities are more heavily impacted by economic factors such as consumer confidence, GDP and employment levels.
Contractor labor availability has also become an issue in recent years, limiting our customers’ ability to fully meet consumer construction and renovation demand.
−Removed: The market environment from June 2009, when the Great Recession ended, until 2020, when the COVID-19 pandemic-induced recession began, was characterized by steady economic expansion, the cautious recovery of consumer spending, modest housing recovery and low inflation.
−Removed: However, in terms of homeowners investing in their existing homes, discretionary expenditures, including backyard renovations, have flourished over this time period with steady increases in home values and lack of affordable new homes prompting homeowners to stay in their homes longer and upgrade their home environments, including their backyards.
−Removed: Due to the COVID-19 pandemic in 2020, many families spent more time at home and sought out opportunities to create or expand existing home-based outdoor living and entertainment spaces, which resulted in an increase in new pool construction and greater expenditures for maintenance and remodeling products, despite the overall decline in economic activity in the U.S.
−Removed: While we estimate that new pool construction increased from approximately 80,000 units in 2019 to approximately 100,000 units in 2020, construction levels are still down approximately 55% compared to peak historical levels and down approximately 40% from what we consider normal levels.
−Removed: An average of approximately 170,000 new units per year were built in the years leading up to the Great Recession.
−Removed: We expect that new pool and irrigation construction levels will continue to grow incrementally, but we believe that consumer investments in outdoor living spaces beyond the swimming pool will generate greater growth over the next several years.
−Removed: Times of strong economic conditions in the United States enable further replacement, remodeling and new construction activity.
+Added: Labor supply constraints have intensified during the COVID-19 pandemic, which has limited our customers’ ability to meet increased demand for new pool construction and renovation.
+Added: Over the past decade, homeowners investing in their homes, including backyard renovations, have flourished.
+Added: Steady increases in home values and lack of affordable new homes have prompted homeowners to stay in their homes longer and upgrade their home environments, including their backyards.
+Added: In response to the COVID-19 pandemic over the past couple of years, many families spent more time at home and sought out opportunities to create or expand home-based outdoor living and entertainment spaces, which resulted in an increase in new pool construction and greater expenditures for maintenance and remodeling products.
+Added: We estimate that new pool construction increased to approximately 120,000 units in 2021 from 96,000 units in 2020, representing a 25% increase in new pool construction.
+Added: We expect that new pool and irrigation construction levels will continue to grow incrementally (subject to labor availability), but we believe that consumer investments in outdoor living spaces will generate greater growth over the next several years as backyards more increasingly become an extension of consumers’ home space.
Although some constraints exist around residential construction activities, we believe that we are well positioned to take advantage of both the market expansion and the inherent long-term growth opportunities in our industry.
−Removed: Additionally, recent regulation passed by the U.S.
−Removed: Department of Energy mandates all new and replacement motors and pumps for swimming pools must meet certain compliance regulations by July 2021.
−Removed: This mandate, coupled with additional product developments and technological advancements, offers further growth opportunities over the next few years.
−Removed: Considering the factors discussed above, we believe we will realize annual sales growth rates of approximately 6% to 8% over the next five years.
+Added: Additionally, regulation passed by the U.S.
+Added: Department of Energy, which became effective in July 2021, mandates all new motors and pumps for swimming pools must meet certain compliance regulations.
+Added: We believe that this mandate, coupled with additional product developments and technological advancements as consumers focus on more environmentally sustainable and energy-efficient products, offers further growth opportunities over the next few years.
+Added: We estimate that price inflation has averaged 1% to 2% annually in our industry over the past ten years.
+Added: We generally pass industry price increases through our supply chain and may make strategic volume inventory purchases ahead of vendor price increases in order to obtain favorable pricing.
+Added: Recently, supply chain interruptions, production shutdowns and weather-related events have resulted in increased inflation as higher costs to develop finished products are being passed down to consumers.
+Added: Our results in 2021 benefited from above-average inflationary product cost increases of approximately 7% to 8%.
+Added: We expect this trend to continue into 2022.
+Added: We expect sales growth in 2022 to be higher due to impacts from inflationary product cost increases of approximately 9% to 10%.
Business Strategy and Growth
10 unchanged sentences
As a customer service, we also provide certain retail store customers assistance with all aspects of their business, including site selection, store layout and design, product merchandising, business management system implementation, comprehensive product offering selections and efficient ordering and inventory management processes.
−Removed: In addition to these programs, we feature consumer showrooms in over 100 of our sales centers and host our annual Retail Summit to educate our customers about product offerings and the overall industry, although we did not host our annual Retail Summit in January 2021 due to the COVID-19 pandemic.
+Added: In addition to these programs, we feature consumer showrooms in over 100 of our sales centers and host our annual Retail Summit to educate our customers about product offerings and the overall industry, although we did not host our annual Retail Summit over the past two years due to the COVID-19 pandemic.
We also act as a day-to-day resource by offering product and market expertise to serve our customers’ unique needs.
−Removed: In addition to our efforts aimed at industry and customer growth, we strive to operate more effectively by continuously focusing on improvements in our operations.
+Added: In addition to our efforts aimed at industry and customer growth, we strive to operate more effectively by continuously focusing on improvements in our operations, which we define as capacity creation.
We aim to create capacity with business to business development tools and execution to ensure best-in-class service and value creation for our customers and suppliers.
1 unchanged sentence
These tools not only offer real-time integration into our enterprise resource planning system, creating efficiencies in our business processes as well, but they also provide our customers graphical catalog presentation in the same platform.
−Removed: We’ve enhanced our BlueStreak mobile order processing, which enables our sales associates with wireless technology that puts them next to the customer rather than behind the counter.
−Removed: Orders are processed faster, often eliminating the need for customers to get out of their vehicles.
−Removed: We are also actively making improvements to our sales centers and warehouses, including improved showroom layouts, sales center merchandising and velocity slotting.
+Added: Our BlueStreak mobile ordering platform enables our sales associates to process orders faster, often eliminating the need for customers to get out of their vehicles.
+Added: We are also actively making improvements to our sales centers and warehouses, including improved 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 our employees and customers.
1 unchanged sentence
We have grown our distribution networks through new sales center openings, acquisitions and the expansion of existing sales centers depending on our market presence and capacity.
+Added: In 2021, we have grown our distribution network through the acquisition of the Sun Wholesale distribution network.
+Added: Sun Wholesale distributes swimming pool supplies, equipment and related leisure products domestically, primarily servicing Pinch A Penny, Inc.
+Added: Pinch A Penny, Inc.
+Added: is a franchisor of pool and outdoor living-related specialty retail stores in the United States with approximately 260 independently owned and operated franchised stores in Florida, Texas, Louisiana, Alabama and Georgia.
+Added: Sun Wholesale also owns and operates a specialty chemical packaging operation.
For additional information regarding our new sales center openings, acquisitions and closures/consolidations, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Item 8, Note 2 of “Notes to Consolidated Financial Statements,” included in this Form 10-K.
1 unchanged sentence
We believe that our high customer service levels and expanded product offerings have enabled us to gain market share historically.
−Removed: Going forward, we expect to realize sales growth higher than the industry average due to further increases in market share and continued expansion of our product offerings.
−Removed: We estimate that price inflation has averaged 1% to 2% annually in our industry over the past ten years.
−Removed: We generally pass industry price increases through our supply chain and may make strategic volume inventory purchases ahead of vendor price increases in order to obtain favorable pricing.
−Removed: We estimate that annual price inflation in 2018 and 2020 was consistent with the ten-year average.
−Removed: We estimate that annual price inflation in 2019 was approximately 2% above our historical range as we sold through strategic inventory purchases from 2018.
−Removed: We believe that results in 2021 will be impacted by inflationary product cost increases of approximately 2% to 3% (compared to our historical average of 1% to 2%).
+Added: Going forward, we expect to realize sales growth through market share gains and continued expansion of our product offerings.
Customers and Products
5 unchanged sentences
We provide extended payment terms to qualified customers for sales under early buy programs.
−Removed: The extended terms usually require payments in equal installments in April, May and June or May and June depending on geographic location.
+Added: The extended terms usually require payments in equal installments during the second quarter of each year.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates - Allowance for Doubtful Accounts” for additional information.
23 unchanged sentences
• commercial products, including American Society of Material Engineers heaters, safety equipment and commercial pumps and filters;
−Removed: • 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 hot tubs, grills and components for outdoor kitchens, that enhance consumers’ use and enjoyment of outdoor living spaces.
+Added: • 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.
We currently have over 600 product lines and approximately 50 product categories.
−Removed: Based on our 2020 product classifications, sales for our pool and hot tub chemicals product category represented approximately 10% of total net sales for 2020 and 12% of total net sales in 2019 and 2018.
+Added: Based on our 2021 product classifications, sales for our pool and hot tub chemicals product category represented approximately 9% of total net sales for 2021, 10% of total net sales in 2020 and 12% of total net sales in 2019.
No other product categories accounted for 10% or more of total net sales in any of the last three fiscal years.
2 unchanged sentences
We expect to realize continued sales growth for these types of product offerings by expanding the number of locations that offer these products, increasing the number of products offered at certain locations and continuing a modest broadening of these product offerings on a company-wide basis.
−Removed: Recent regulation passed by the U.S.
−Removed: Department of Energy mandates all new and replacement motors and pumps sold for swimming pools must meet certain compliance regulations by July 2021.
−Removed: We expect to see minimal impact from this change until mid-way through the 2021 season.
New product technology provides opportunities not only for improved energy-efficiency but also new enticements for leisure activities.
5 unchanged sentences
Our green technology products include variable speed pumps, LED pool and hot tub lights and high-efficiency heat pumps.
+Added: Our Horizon sales centers offer organic fertilizers, organic pesticides, and irrigation products that reduce water usage, allowing our customers to have less of an impact on freshwater reserves.
+Added: Regulation passed by the U.S.
+Added: Department of Energy, which became effective in July 2021, mandates all new motors and pumps sold for swimming pools must meet certain compliance regulations.
+Added: As the regulation has only recently become effective, the impact from this change through the end of 2021 season was not significant.
Over the last several years, we have increased our product offerings and service abilities related to commercial swimming pools.
−Removed: We consider the commercial market to be a key growth opportunity as we focus more attention on providing products to customers who service large commercial installations such as hotels, universities and community recreational facilities.
−Removed: While we are leveraging our existing networks and relationships to grow this market, in 2017, we also acquired Lincoln Equipment, Inc., a national distributor of equipment and supplies to commercial and institutional swimming pool customers.
+Added: We consider the commercial market to be a key growth opportunity as we focus more attention on providing products to customers who service large commercial installations such as hotels, condominiums, apartment complexes, universities and community recreational facilities.
+Added: We continue to leverage our existing networks and relationships to grow this market.
Sales to commercial customers declined in 2020 due to COVID-19 related closures and the decline in both business and leisure travel.
−Removed: We expect commercial sales to improve as COVID-19 pandemic conditions ease.
+Added: In 2021, commercial sales have accelerated as business and leisure travel has increased and public facilities reopened following COVID-19 related closures in the prior year.
In 2021, the sale of maintenance and minor repair products (non-discretionary) accounted for almost 60% of our sales and gross profits, while just over 40% of our sales and gross profits were derived from the refurbishment, replacement, construction and installation (equipment, materials, plumbing, electrical, etc.) of swimming pools (partially discretionary).
1 unchanged sentence
The current trend reflects a partial shift back toward a greater percentage of our sales coming from major refurbishment and replacement products due to the recovery of these activities since levels reached their historic low point in 2009.
−Removed: Post-2009, we experienced product and customer mix changes, including a shift in consumer spending to some higher value, lower margin products such as variable speed pumps and high efficiency heaters.
−Removed: In 2020, we experienced higher sales of lower margin, big-ticket items, such as pool equipment and in-ground and above-ground pools.
−Removed: These products positively contribute to our sales and gross profit growth but negatively impact our gross margin.
−Removed: We expect continued demand for these products, but believe our efforts in various pricing and sourcing initiatives, including growth in our higher margin private label and exclusive products (PLEX) and our expansion of building materials product offerings, have helped offset these gross margin declines and will lead to somewhat flat or slightly lower gross margin trends over the next few years.
+Added: Since 2009, we have experienced product and customer mix changes, including a shift in consumer spending to some higher value, lower margin products such as variable speed pumps and high efficiency heaters.
+Added: We expect continued demand for these products, but believe our efforts in various pricing and sourcing initiatives, including growth in our higher margin private label and exclusive products (PLEX) and our expansion of building materials product offerings, have helped offset these gross margin declines.
Operating Strategy
3 unchanged sentences
We distribute irrigation and related products through our Horizon network and tile, decking materials and interior pool finish products through our NPT network, as well as through SCP and Superior networks.
+Added: In December 2021, we acquired Sun Wholesale., which distributes swimming pool supplies, equipment and related leisure products domestically, primarily servicing independently owned and operated Pinch A Penny, Inc.
+Added: franchise locations.
+Added: Going forward, we expect to expand our franchise operations through additional locations of Pinch A Penny franchised stores.
+Added: Sun Wholesale Supply, Inc.
+Added: also owns and operates a specialty chemical packaging operation.
We evaluate our sales centers based on their performance relative to predetermined standards that include both financial and operational measures.
12 unchanged sentences
These early buy purchases typically allow us to place orders in the fall at a modest discount, take delivery of product during the off-season months and pay for these purchases in the spring or early summer.
+Added: Due to vendor backlogs, these early buy opportunities were generally not available in 2021 or 2020.
Our preferred vendor program encourages our distribution networks to stock and sell products from a smaller number of vendors offering the best overall terms and service to optimize profitability and shareholder return.
2 unchanged sentences
See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates - Vendor Programs,” for additional information.
−Removed: We regularly evaluate supplier relationships and consider alternate sourcing to assure competitive cost, service and quality standards.
+Added: We regularly evaluate supplier relationships and consider alternate sourcing to ensure competitive cost, service and quality standards.
Our largest suppliers include Pentair plc, Hayward Pool Products, Inc.
13 unchanged sentences
• geographic proximity to the customer.
−Removed: We believe that we generally compete favorably with respect to each of these factors.
−Removed: Seasonality and Weather
−Removed: Our business is highly seasonal.
−Removed: In general, sales and operating income are highest during the second and third quarters, which represent the peak months of swimming pool use, pool and irrigation installation and remodeling and repair activities.
−Removed: Sales are substantially lower during the first and fourth quarters.
−Removed: In 2020, we generated approximately 61% of our net sales and 76% of our operating income in the second and third quarters of the year.
−Removed: We typically experience a build-up of product inventories and accounts payable during the winter months in anticipation of the peak selling season.
−Removed: Excluding borrowings to finance acquisitions and share repurchases, our peak borrowing usually occurs during the late spring and summer, primarily because extended terms offered by our suppliers are typically payable in April, May and June, while our peak accounts receivable collections typically occur in June, July and August.
−Removed: We expect that our quarterly results of operations will continue to fluctuate depending on the timing and amount of revenue contributed by new and acquired sales centers.
−Removed: Based on our peak summer selling season, we generally open new sales centers and close or consolidate 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.
−Removed: Weather is one of the principal external factors affecting our business.
−Removed: The table below presents some of the possible effects resulting from various weather conditions.
−Removed: Weather Possible Effects
−Removed: Hot and dry • Increased purchases of chemicals and supplies
−Removed: for existing swimming pools
−Removed: • Increased purchases of above-ground pools and
−Removed: irrigation and lawn care products
−Removed: Unseasonably cool weather or extraordinary amounts • Fewer pool and irrigation and landscaping
−Removed: of rain installations
−Removed: • Decreased purchases of chemicals and supplies
−Removed: • Decreased purchases of impulse items such as
−Removed: above-ground pools and accessories
−Removed: Unseasonably early warming trends in spring/late cooling • A longer pool and landscape season, thus positively
−Removed: trends in fall impacting our sales
−Removed: (primarily in the northern half of the U.S.
−Removed: Unseasonably late warming trends in spring/early cooling • A shorter pool and landscape season, thus negatively
−Removed: trends in fall impacting our sales
−Removed: (primarily in the northern half of the U.S.
−Removed: For discussion regarding the effects seasonality and weather had on our results of operations in 2020 and 2019, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Seasonality and Quarterly Fluctuations,” of this Form 10-K.
−Removed: Government Regulations
−Removed: Our business is subject to regulation 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.
−Removed: Most of these requirements govern the packaging, labeling, handling, transportation, storage and sale of chemicals and fertilizers.
−Removed: We store certain types of chemicals and/or fertilizers at each of our sales centers and the storage of these items is strictly regulated by local fire codes.
−Removed: In addition, we sell algaecides and pest control products that are regulated as pesticides under the Federal Insecticide, Fungicide and Rodenticide Act and various state pesticide laws.
−Removed: These laws primarily relate to labeling, annual registration and licensing.
−Removed: Human Capital Management
+Added: Environmental, Social and Governance (ESG)
+Added: Environmental
+Added: We are committed to sustainable business practices, which includes offering eco-friendly products to our customers, closely monitoring our sourcing activities, and being good stewards within the communities we serve.
+Added: Currently, we are taking steps to trim our carbon footprint and to improve product choices that allow our customers to reduce their environmental impact.
+Added: Further, we are installing more energy-efficient systems throughout our network.
+Added: We are continually striving to ensure success in our business while protecting resources for future generations.
+Added: Our sustainability goals include the reduction of greenhouse gases and other harmful air emissions, water conservation, energy conservation and carbon footprint minimization.
+Added: We continue to improve the ways in which we handle, distribute, transport and dispose of all products, particularly the chemicals and fertilizers that we sell.
+Added: Among other initiatives in 2021, we believe our recent endeavors described further below will continue to create value for our customers, shareholders, employees, suppliers and communities.
+Added: • We partnered with the YMCA to provide swimming lessons and the opportunity to learn basic water safety skills to 1,500 children.
+Added: To reduce any barriers to participation, we also donated new swimsuits and towels.
+Added: • In celebration of World Water Day, we made a donation to DigDeep, a human rights nonprofit organization working to bring clean, hot and cold running water into American homes.
+Added: • In honor of Earth Day, we donated 5,000 trees through the National Forest Foundation in an effort to restore and expand the national forest ecosystems.
+Added: • Through our partnership with LightStream, we helped contribute to the reforestation of more than 50 acres of trees by American Forests.
+Added: Social - Human Capital Management
We employed approximately 5,500 people at December 31, 2021.
1 unchanged sentence
Approximately 90% of our employees are located in the U.S.
+Added: We believe that we have good relations with our employees.
+Added: None of our employees are currently covered under any collective bargaining agreements.
We believe that our success is a direct result of the contributions and commitment of our employees.
4 unchanged sentences
• employee health, safety and wellness;
+Added: • diversity, equity and inclusion;
• employee growth and development;
−Removed: • diversity and inclusion;
• employee compensation and benefits.
4 unchanged sentences
This effort begins immediately with new employees and is reinforced each day through a focus on safety awareness, risk identification and other essential safety protocols.
−Removed: During the COVID-19 pandemic, we have taken a number of actions to protect the health and well-being of our employees and to reward our employees for their contributions to our success.
+Added: We closely monitor overall workers’ compensation and auto claims, OSHA recordable incidents, Department of Transportation compliance and other internally established safety prevention elements in an effort to make every workday safe.
+Added: Throughout the COVID-19 pandemic, we have taken a number of actions to protect the health and well-being of our employees and to reward our employees for their contributions to our success.
These actions include providing personal protective equipment, expanding healthcare benefits and re-configuring working spaces and arrangements.
−Removed: We also made efforts to reward our employees by extending paid leave and paying additional discretionary bonuses to our employees for their contributions.
+Added: In 2020 and 2021, we made efforts to reward our employees by extending paid leave and paying additional discretionary bonuses to our employees for their contributions.
+Added: Diversity, Equity and Inclusion (DEI)
+Added: We are committed to fostering a diverse, equitable and inclusive workplace that represents the communities in which we work and live.
+Added: We believe that diversity drives innovation and delivers the best solutions to complex problems, and our culture is one where differences are welcomed, valued and respected.
+Added: We are committed to expanding the diversity of our workforce through the hiring, retention and advancement of underrepresented populations.
+Added: To achieve this, our approach to DEI is as follows:
+Added: Recruit, develop and retain a diverse workforce and provide developmental opportunities for career advancement for all employees;
+Added: Review current policies, practices and procedures to remove possible impediments to equal employment opportunity for all prospective candidates and employees;
+Added: Communicate that we, as an Employer of Choice, are committed to DEI with action-oriented programs that produce results and employee engagement.
+Added: Most recently, we established a DEI team, expanding existing content in core employee development programs and focused on improving our efforts to recruit and hire first-class diverse talent.
+Added: In 2021, we held our inaugural Women in Leadership Forum, which was devoted to discussing what it means to be a female leader in wholesale distribution.
+Added: In addition to our recent initiatives, we continue to support our existing employees with training and development aimed at creating and sustaining a more inclusive environment.
Employee Growth and Development
5 unchanged sentences
To help our employees achieve success in their roles, we emphasize continuous training and development opportunities.
−Removed: These include safety and security protocols, updates on new products and service offerings and deployment of technologies.
+Added: These include annual performance assessments, safety and security protocols, updates on new products and service offerings and deployment of technologies.
We also provide managerial training to mid-level managers and departmental leaders.
This coursework covers topics such as talent review, development of underperforming employees, handling employee misconduct and coaching and success workshops.
+Added: Our employees are also involved in a multitude of volunteer efforts that positively impact our communities through support of charitable organizations.
We also provide an entry level program to prepare Manager Trainees (MITs) for sales and operations management opportunities.
−Removed: Our MITs are hosted at either our state-of-the-art EDGEucation Center, located in Plano, TX or in a virtual classroom.
+Added: Our MITs are hosted at either our state-of-the-art EDGEucation Center, located in Plano, Texas or in a virtual classroom.
Our program includes lectures, projects and role play to provide MITs with industry knowledge, leadership skills and the tools necessary to succeed within our organization.
−Removed: Diversity and Inclusion
−Removed: We are committed to fostering a diverse and inclusive workplace that represents the communities in which we work and live.
−Removed: We believe that diversity drives innovation and delivers the best solutions to complex problems, and we are building a culture where differences are welcomed and valued.
−Removed: To achieve this, we are committed to expanding the diversity of our workforce through the hiring, retention and advancement of underrepresented populations.
−Removed: In addition, we support our existing employees with training and development that helps create a more inclusive environment.
−Removed: Our recent initiatives include the establishment of a diversity and inclusiveness team, expanding existing content in core employee development programs and improving our efforts to recruit and hire first-class diverse talent.
Employee Compensation and Benefits
−Removed: We strive to provide market-competitive pay, benefits and services to our employees.
+Added: We strive to provide market-competitive compensation, benefits and services to our employees.
Our performance-based compensation philosophy is based on rewarding each employee’s individual contributions regardless of gender, race or ethnicity.
1 unchanged sentence
We also offer the opportunity to become a shareholder through equity grants for management and our employee stock purchase plan.
−Removed: Environmental, Social and Governance (ESG)
−Removed: We are committed to sustainable business practices, which, for us, includes offering eco-friendly products to our customers, closely monitoring our sourcing activities, providing a safe, inclusive work environment for our employees, and being good stewards within the communities we serve.
−Removed: Currently, we are taking steps to trim our carbon footprint and to improve product choices that allow our customers to reduce their environmental impact.
−Removed: Further, we are installing more energy-efficient systems throughout our network and ensuring that our health and wellness programs include affordable, high quality benefits to improve the lives of our employees.
−Removed: We are continually striving to ensure success in our business while protecting resources for future generations.
−Removed: Our sustainability goals include the reduction of greenhouse gases and other harmful air emissions, water conservation, energy conservation and carbon footprint minimization.
−Removed: We continue to improve the ways in which we handle, distribute, transport and dispose of all products, particularly the chemicals and fertilizers that we sell.
−Removed: We are dedicated to growing the swimming pool industry and have chosen charitable activities to support the swimming pool environment, in addition to our support of other local organizations.
−Removed: We actively encourage our employees to volunteer and engage with their communities through our stewardship committee and supporting charitable organizations.
−Removed: We believe these endeavors will continue to create value for our customers, shareholders, employees, suppliers and communities.
+Added: Our employees can take advantage of a range of benefits, including healthcare and wellness programs, tuition reimbursement for eligible employees and multi-year scholarships to their dependents, and financial wellness programs to help provide education and tools to assist in improving, maintaining and capitalizing on our employees’ financial future.
+Added: We closely monitor employee turnover and conduct exit interviews to gain relevant information and adapt our engagement and retention strategy as appropriate.
Our employees, managers and officers conduct our business under the direction of our CEO and the oversight of our Board of Directors (our Board) to enhance our long-term value for our stockholders.
1 unchanged sentence
In exercising this obligation, our Board and committees perform a number of specific functions, including risk assessment, review and oversight.
−Removed: While management is responsible for the day-to-day management of risk, our Board is responsible for oversight of our risk management programs, ensuring that an appropriate culture of risk management exists within the company, and assisting management in addressing specific risks, such as strategic risks, financial risks, regulatory risks and operational risks.
+Added: While management is responsible for the day-to-day management of risk, our Board is responsible for oversight of our risk management programs, ensuring that an appropriate culture of risk management exists within the company, and assisting management in addressing specific risks, such as strategic risks, financial risks, cybersecurity risks, regulatory risks and operational risks.
+Added: Seasonality and Weather
+Added: Our business is seasonal.
+Added: In general, sales and operating income are highest during the second and third quarters, which represent the peak months of swimming pool use, pool and irrigation installation and remodeling and repair activities.
+Added: Sales are lower during the first and fourth quarters.
+Added: In 2021, we generated approximately 60% of our net sales and 69% of our operating income in the second and third quarters of the year.
+Added: We typically experience a build-up of product inventories and accounts payable during the winter months in anticipation of the peak selling season.
+Added: Excluding borrowings to finance acquisitions and share repurchases, our peak borrowing usually occurs during the late spring and summer, primarily because extended terms offered by our suppliers are typically payable during the second quarter of each year, while our peak accounts receivable collections typically occur in June, July and August.
+Added: We expect that our quarterly results of operations will continue to fluctuate depending on the timing and amount of revenue contributed by new and acquired sales centers.
+Added: Based on our peak summer selling season, we generally open new sales centers and close or consolidate 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.
+Added: Weather is one of the principal external factors affecting our business.
+Added: The table below presents some of the possible effects resulting from various weather conditions.
+Added: Weather Possible Effects
+Added: Hot and dry • Increased purchases of chemicals and supplies
+Added: for existing swimming pools
+Added: • Increased purchases of above-ground pools and
+Added: irrigation and lawn care products
+Added: Unseasonably cool weather or extraordinary amounts • Fewer pool and irrigation and landscaping
+Added: of rain installations
+Added: • Decreased purchases of chemicals and supplies
+Added: • Decreased purchases of impulse items such as
+Added: above-ground pools and accessories
+Added: Unseasonably early warming trends in spring/late cooling • A longer pool and landscape season, thus positively
+Added: trends in fall impacting our sales
+Added: (primarily in the northern half of the U.S.
+Added: Unseasonably late warming trends in spring/early cooling • A shorter pool and landscape season, thus negatively
+Added: trends in fall impacting our sales
+Added: (primarily in the northern half of the U.S.
+Added: For discussion regarding the effects seasonality and weather had on our results of operations in 2021 and 2020, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Seasonality and Quarterly Fluctuations,” of this Form 10-K.
+Added: Government Regulations
+Added: Our business is subject to regulation 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.
+Added: Most of these requirements govern the packaging, labeling, handling, transportation, storage and sale of chemicals and fertilizers.
+Added: We store certain types of chemicals and/or fertilizers at each of our sales centers and the storage of these items is strictly regulated by local fire codes.
+Added: In addition, we sell algaecides and pest control products that are regulated as pesticides under the Federal Insecticide, Fungicide and Rodenticide Act and various state pesticide laws.
+Added: These laws primarily relate to labeling, annual registration and licensing.
Intellectual Property
−Removed: We maintain both domestic and foreign registered trademarks and patents, primarily for our Pool Corporation and Pool Systems Pty.
−Removed: (PSL) branded products that are important to our current and future business operations.
+Added: We maintain both domestic and foreign registered trademarks and patents, primarily for our Pool Corporation and affiliate branded products that are important to our current and future business operations.
We also own rights to numerous internet domain names.
15 unchanged sentences
Our website is www.poolcorp.com .
−Removed: The information on our website is not a part of this document.
−Removed: Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge on our website at www.poolcorp.com as soon as reasonably practicable after we electronically file such reports with, or furnish them to, the Securities and Exchange Commission (SEC).
+Added: Our website and other websites mentioned in this Form 10-K are for information only and the contents of such websites are not incorporated in, or otherwise to be regarded as part of, this Form 10-K.
+Added: Our periodic reports, including our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge on our website at www.poolcorp.com as soon as reasonably practicable after we electronically file such reports with, or furnish them to, the Securities and Exchange Commission (SEC).
+Added: We regularly evaluate the possibility of acquiring additional companies, and at any given time may be engaged in discussions or negotiations regarding these transactions.
+Added: We generally do not announce our acquisitions until they are completed, unless it is required by regulatory or other rules to announce when a definitive agreement is reached.
+Added: Investors should also be aware that while we may answer questions raised by securities analysts, it is against our policy to disclose any material non-public information or other confidential information.
+Added: Accordingly, investors should not assume that we agree with any statement or report issued by an analyst with respect to our past or projected performance.
+Added: To the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not our responsibility.
+Added: Unless otherwise indicated, information contained in this report and other documents filed by us under the federal securities laws concerning our views and expectations regarding the industries in which we operate are based on estimates made by us using data from industry sources and making assumptions based on our industry knowledge and experience.
+Added: We have not independently verified data from industry or other third-party sources and cannot guarantee its accuracy or completeness.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.