Item 1. Financial Statements
Item 1. Financial Statements
POOL CORPORATION
Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2025 2024 2025 2024
Net sales $ 1,784,530 $ 1,769,784 $ 2,856,056 $ 2,890,594
Cost of sales 1,249,369 1,239,643 2,008,526 2,021,894
Gross profit 535,161 530,141 847,530 868,700
Selling and administrative expenses 262,491 258,660 497,323 488,499
Operating income 272,670 271,481 350,207 380,201
Interest and other non-operating expenses, net 12,219 14,044 23,381 27,463
Income before income taxes and equity in earnings 260,451 257,437 326,826 352,738
Provision for income taxes 66,180 65,058 79,064 81,531
Equity in earnings of unconsolidated investments, net ( 13 ) 60 41 117
Net income $ 194,258 $ 192,439 $ 247,803 $ 271,324
Earnings per share attributable to common stockholders:
Basic $ 5.19 $ 5.02 $ 6.60 $ 7.07
Diluted $ 5.17 $ 4.99 $ 6.57 $ 7.03
Weighted average common shares outstanding:
Basic 37,271 38,124 37,365 38,164
Diluted 37,407 38,325 37,520 38,399
Cash dividends declared per common share $ 1.25 $ 1.20 $ 2.45 $ 2.30
The accompanying Notes are an integral part of the Consolidated Financial Statements.
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POOL CORPORATION
Consolidated Statements of Comprehensive Income
(Unaudited)
(In thousands)
Three Months Ended Six Months Ended
June 30, June 30,
2025 2024 2025 2024
Net income $ 194,258 $ 192,439 $ 247,803 $ 271,324
Other comprehensive income (loss):
Foreign currency translation gain (loss) 13,358 ( 4,684 ) 17,285 ( 8,352 )
Unrealized (loss) gain on interest rate swaps, net of the change in taxes of $ 735 , $ 459 , $ 1,705 and $( 284 )
( 2,204 ) ( 1,376 ) ( 5,115 ) 850
Total other comprehensive income (loss) 11,154 ( 6,060 ) 12,170 ( 7,502 )
Comprehensive income $ 205,412 $ 186,379 $ 259,973 $ 263,822
The accompanying Notes are an integral part of the Consolidated Financial Statements.
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POOL CORPORATION
Consolidated Balance Sheets
(In thousands, except share data)
June 30, June 30, December 31,
2025 2024 2024
(Unaudited) (Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $ 83,669 $ 96,894 $ 77,862
Receivables, net 172,028 169,849 115,835
Receivables pledged under receivables facility 404,776 407,680 199,026
Product inventories, net 1,330,221 1,295,600 1,289,300
Prepaid expenses and other current assets 42,281 35,789 47,091
Total current assets 2,032,975 2,005,812 1,729,114
Property and equipment, net 258,188 241,871 251,324
Goodwill 700,476 699,686 698,910
Other intangible assets, net 286,810 294,684 290,732
Equity interest investments 1,494 1,399 1,439
Operating lease assets 315,434 313,840 314,853
Other assets 76,579 83,622 81,812
Total assets $ 3,671,956 $ 3,640,914 $ 3,368,184
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $ 529,316 $ 515,645 $ 525,235
Accrued expenses and other current liabilities 160,833 152,978 171,194
Short-term borrowings and current portion of long-term debt 17,386 44,726 49,473
Current operating lease liabilities 100,439 94,024 98,284
Total current liabilities 807,974 807,373 844,186
Deferred income taxes 79,138 67,595 81,408
Long-term debt, net 1,212,533 1,071,827 900,883
Other long-term liabilities 50,177 44,135 44,959
Non-current operating lease liabilities 223,016 226,315 223,283
Total liabilities 2,372,838 2,217,245 2,094,719
Stockholders’ equity:
Common stock, 0.001 par value; 100,000,000 shares authorized;
37,314,231 , 38,289,105 and 37,691,942 shares issued and
outstanding at June 30, 2025, June 30, 2024 and
December 31, 2024, respectively
37 38 38
Additional paid-in capital 658,345 626,347 638,615
Retained earnings 642,230 798,204 648,476
Accumulated other comprehensive loss ( 1,494 ) ( 920 ) ( 13,664 )
Total stockholders’ equity 1,299,118 1,423,669 1,273,465
Total liabilities and stockholders’ equity $ 3,671,956 $ 3,640,914 $ 3,368,184
The accompanying Notes are an integral part of the Consolidated Financial Statements.
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POOL CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Six Months Ended
June 30,
2025 2024
Operating activities
Net income $ 247,803 $ 271,324
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation 19,804 17,591
Amortization 4,312 4,201
Share-based compensation 12,950 10,344
Equity in earnings of unconsolidated investments, net ( 41 ) ( 117 )
Other ( 942 ) ( 1,246 )
Changes in operating assets and liabilities, net of effects of acquisitions:
Receivables ( 254,322 ) ( 232,647 )
Product inventories ( 29,375 ) 66,975
Prepaid expenses and other assets 53,440 38,231
Accounts payable 315 6,166
Accrued expenses and other liabilities ( 55,488 ) ( 8,720 )
Net cash (used in) provided by operating activities ( 1,544 ) 172,102
Investing activities
Acquisition of businesses, net of cash acquired — ( 4,435 )
Purchases of property and equipment, net of sale proceeds ( 27,390 ) ( 34,928 )
Other investments, net ( 1,073 ) 1,018
Net cash used in investing activities ( 28,463 ) ( 38,345 )
Financing activities
Proceeds from revolving line of credit 1,117,100 756,300
Payments on revolving line of credit ( 956,900 ) ( 830,400 )
Payments on term loan under credit facility ( 12,500 ) ( 12,500 )
Proceeds from asset-backed financing 323,200 467,000
Payments on asset-backed financing ( 177,200 ) ( 324,000 )
Payments on term facility ( 19,937 ) —
Proceeds from short-term borrowings and current portion of long-term debt 17,112 8,085
Payments on short-term borrowings and current portion of long-term debt ( 11,699 ) ( 1,562 )
Proceeds from stock issued under share-based compensation plans 6,780 9,826
Payments of cash dividends ( 92,163 ) ( 88,287 )
Repurchases of common stock ( 160,648 ) ( 84,496 )
Net cash provided by (used in) financing activities 33,145 ( 100,034 )
Effect of exchange rate changes on cash and cash equivalents 2,669 ( 3,369 )
Change in cash and cash equivalents 5,807 30,354
Cash and cash equivalents at beginning of period 77,862 66,540
Cash and cash equivalents at end of period $ 83,669 $ 96,894
The accompanying Notes are an integral part of the Consolidated Financial Statements.
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POOL CORPORATION
Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited)
(In thousands)
Common Stock Additional
Paid-In Retained Accumulated
Other
Comprehensive
Shares Amount Capital Earnings Loss Total
Balance at December 31, 2024 37,692 $ 38 $ 638,615 $ 648,476 $ ( 13,664 ) $ 1,273,465
Net income
— — — 53,545 — 53,545
Foreign currency translation
— — — — 3,927 3,927
Interest rate swaps, net of the change in taxes $ 970
— — — — ( 2,911 ) ( 2,911 )
Repurchases of common stock, net of retirements
( 169 ) — — ( 56,530 ) — ( 56,530 )
Share-based compensation
— — 6,055 — — 6,055
Issuance of stock under share-based compensation plans
137 — 6,383 — — 6,383
Declaration of cash dividends
— — — ( 45,243 ) — ( 45,243 )
Balance at March 31, 2025 37,660 $ 38 $ 651,053 $ 600,248 $ ( 12,648 ) $ 1,238,691
Net income
— — — 194,258 — 194,258
Foreign currency translation
— — — — 13,358 13,358
Interest rate swaps, net of the change in taxes of $ 735
— — — — ( 2,204 ) ( 2,204 )
Repurchases of common stock, net of retirements
( 351 ) ( 1 ) — ( 105,322 ) — ( 105,323 )
Share-based compensation
— — 6,895 — — 6,895
Issuance of stock under share-based compensation plans
5 — 397 — — 397
Declaration of cash dividends
— — — ( 46,954 ) — ( 46,954 )
Balance at June 30, 2025 37,314 $ 37 $ 658,345 $ 642,230 $ ( 1,494 ) $ 1,299,118
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Common Stock Additional
Paid-In Retained Accumulated
Other
Comprehensive
Shares Amount Capital Earnings Income (Loss) Total
Balance at December 31, 2023 38,355 $ 38 $ 606,177 $ 699,990 $ 6,582 $ 1,312,787
Net income
— — — 78,885 — 78,885
Foreign currency translation
— — — — ( 3,668 ) ( 3,668 )
Interest rate swaps, net of the change in taxes of $( 742 )
— — — — 2,226 2,226
Repurchases of common stock, net of retirements
( 41 ) — — ( 16,304 ) — ( 16,304 )
Share-based compensation
— — 5,328 — — 5,328
Issuance of stock under share-based compensation plans
148 — 8,773 — — 8,773
Declaration of cash dividends
— — — ( 42,343 ) — ( 42,343 )
Balance at March 31, 2024 38,462 $ 38 $ 620,278 $ 720,228 $ 5,140 $ 1,345,684
Net income
— — — 192,439 — 192,439
Foreign currency translation
— — — — ( 4,684 ) ( 4,684 )
Interest rate swaps, net of the change in taxes of $ 459
— — — — ( 1,376 ) ( 1,376 )
Repurchases of common stock, net of retirements
( 181 ) — — ( 68,519 ) — ( 68,519 )
Share-based compensation
— — 5,016 — — 5,016
Issuance of stock under share-based compensation plans
8 — 1,053 — — 1,053
Declaration of cash dividends
— — — ( 45,944 ) — ( 45,944 )
Balance at June 30, 2024 38,289 $ 38 $ 626,347 $ 798,204 $ ( 920 ) $ 1,423,669
The accompanying Notes are an integral part of the Consolidated Financial Statements.
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POOL CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)
Note 1 – Summary of Significant Accounting Policies
Pool Corporation (the Company , which may also be referred to as we, us or our ) prepared the unaudited interim Consolidated Financial Statements following U.S. generally accepted accounting principles (GAAP) and the requirements of the Securities and Exchange Commission (SEC) for interim financial information. As permitted under those rules, we have condensed or omitted certain footnotes and other financial information required for complete financial statements.
The interim Consolidated Financial Statements include all normal and recurring adjustments that are necessary for a fair presentation of our financial position and operating results. All significant intercompany accounts and intercompany transactions have been eliminated.
A description of our significant accounting policies is included in our 2024 Annual Report on Form 10-K. You should read the interim Consolidated Financial Statements in conjunction with the Consolidated Financial Statements and accompanying notes in our 2024 Annual Report on Form 10-K. The results for our three and six-month periods ended June 30, 2025 are not necessarily indicative of the expected results for our fiscal year ending December 31, 2025.
Income Taxes
We reduce federal and state income taxes payable by the tax benefits associated with the exercise of nonqualified stock options and the lapse of restrictions on restricted stock awards. To the extent realized tax deductions exceed the amount of previously recognized deferred tax benefits related to share-based compensation, we record an excess tax benefit. We record all excess tax benefits as a component of income tax benefit or expense on the Consolidated Statements of Income in the period in which stock options are exercised or restrictions on restricted stock awards lapse. There were no tax benefits realized from ASU 2016-09 in the second quarter of 2025 compared to an excess tax benefit of $ 0.4 million in the second quarter of 2024 and $ 3.9 million in the six months ended June 30, 2025, compared to $ 7.8 million in the six months ended June 30, 2024.
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law in the U.S., including a broad range of tax reform provisions. We currently do not expect the changes resulting from the OBBBA to have a material impact on our results of operations.
Retained Earnings
We account for the retirement of repurchased shares as a reduction of Retained earnings. As of June 30, 2025, the Retained earnings on our Consolidated Balance Sheets reflects (i) cumulative net income, (ii) the cumulative impact of adjustments for changes in accounting pronouncements, (iii) share retirements since the inception of our share repurchase programs of $ 2.9 billion and (iv) cumulative dividends of $ 1.4 billion.
Accumulated Other Comprehensive Loss
The table below presents the components of our Accumulated other comprehensive loss balance (in thousands):
June 30, December 31,
2025 2024 2024
Foreign currency translation adjustments $ ( 11,803 ) $ ( 21,051 ) $ ( 29,088 )
Unrealized gains on interest rate swaps, net of tax
10,309 20,131 15,424
Accumulated other comprehensive loss $ ( 1,494 ) $ ( 920 ) $ ( 13,664 )
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Recent Accounting Pronouncements Pending Adoption
The following table summarizes recent accounting pronouncements that we plan to adopt in future periods:
Standard Description Effective Date Effect on Financial Statements and Other Significant Matters
Accounting Standards Update (ASU) 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses and related amendments
In November 2024, the Financial Accounting Standards Board (FASB) issued ASU 2024-03 and in January 2025, the FASB issued ASU 2025-01 , Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which adds new disclosure requirements, including more detailed information about certain income statement expense line items and a separate disclosure for selling expenses.
For annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The ASU may be adopted on a prospective or retrospective basis with early adoption permitted. We are currently evaluating the effect the adoption of this standard will have on our disclosures.
ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which will require enhancements and further transparency for decision usefulness to various income tax disclosures, most notably the tax rate reconciliation and income taxes paid.
For annual periods beginning after December 15, 2024. This ASU may be adopted on a prospective basis. Retrospective application and early adoption are also permitted. We expect that the adoption of this standard will expand our disclosures but do not expect the adoption of this standard to have a material impact on our consolidated financial statements.
ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative , which will impact various disclosure areas, including the statement of cash flows, accounting changes and error corrections, earnings per share, debt, equity, derivatives, and transfers of financial assets.
On the date the related disclosures are removed from Regulation S-X or Regulation S-K by the SEC and will no longer be effective if the SEC has not removed the applicable disclosure requirement by June 30, 2027. Early adoption is prohibited. We do not expect that the adoption of this standard will have a material impact on our consolidated financial statements or related disclosures.
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Note 2 – Earnings Per Share
We calculate basic and diluted earnings per share using the two-class method. Earnings per share under the two-class method is calculated using net income attributable to common stockholders, which is net income reduced by the earnings allocated to participating securities. Our participating securities include share-based payment awards that contain a non-forfeitable right to receive dividends and are considered to participate in undistributed earnings with common shareholders. Participating securities excluded from weighted average common shares outstanding were 186,000 for the three months ended June 30, 2025, and 208,000 for the three months ended June 30, 2024, and 185,000 for the six months ended June 30, 2025 and 206,000 for the six months ended June 30, 2024.
The table below presents the computation of earnings per share, including the reconciliation of basic and diluted weighted average shares outstanding (in thousands, except per share data):
Three Months Ended Six Months Ended
June 30, June 30,
2025 2024 2025 2024
Net income $ 194,258 $ 192,439 $ 247,803 $ 271,324
Amounts allocated to participating securities ( 963 ) ( 1,018 ) ( 1,220 ) ( 1,417 )
Net income attributable to common stockholders $ 193,295 $ 191,421 $ 246,583 $ 269,907
Weighted average common shares outstanding:
Basic 37,271 38,124 37,365 38,164
Effect of dilutive securities:
Stock options and employee stock purchase plan 136 201 155 235
Diluted 37,407 38,325 37,520 38,399
Earnings per share attributable to common stockholders:
Basic $ 5.19 $ 5.02 $ 6.60 $ 7.07
Diluted $ 5.17 $ 4.99 $ 6.57 $ 7.03
Anti-dilutive stock options excluded from diluted earnings per share computations (1)
190 56 190 57
(1) Since these options have exercise prices that are higher than the average market prices of our common stock, including them in the calculation would have an anti-dilutive effect on earnings per share.
Note 3 – Acquisitions
In May 2024, we acquired the distribution assets of Swimline Distributors, Inc., a wholesale distributor of swimming pool products and supplies, adding one location in Georgia .
In January 2024, we acquired the distribution assets of Shoreline Pool Distribution, a wholesale distributor of swimming pool products and supplies, adding one location in Mississippi.
We have completed our acquisition accounting for these acquisitions, subject to adjustments for standard holdback provisions per the terms of the purchase agreements, which are not material.
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Note 4 – Fair Value Measurements and Interest Rate Swaps
Recurring Fair Value Measurements
Our assets and liabilities that are measured at fair value on a recurring basis include the unrealized gains or losses on our interest rate swap contracts and our deferred compensation plan asset and liability. The three levels of the fair value hierarchy under the accounting guidance are described below:
Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.
Level 2 Inputs to the valuation methodology include:
• quoted prices for similar assets or liabilities in active markets;
• quoted prices for identical or similar assets or liabilities in inactive markets;
• inputs other than quoted prices that are observable for the asset or liability; or
• inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The table below presents our assets and liabilities measured and recorded at fair value on a recurring basis (in thousands):
Fair Value at June 30,
Input Level Classification 2025 2024
Assets
Unrealized gains on interest rate swaps Level 2 Prepaid expenses and other current assets $ — $ 3,795
Unrealized gains on interest rate swaps Level 2 Other assets 13,791 23,091
Deferred compensation plan asset Level 1 Other assets 18,832 17,148
Liabilities
Deferred compensation plan liability Level 1 Other long-term liabilities $ 18,832 $ 17,148
Interest Rate Swaps
We utilize interest rate swap contracts to reduce our exposure to fluctuations in variable interest rates for future interest payments on a portion of our variable rate borrowings.
We use significant other observable market data or assumptions (Level 2 inputs) in determining the fair value of our interest rate swap contracts that we believe market participants would use in pricing similar assets or liabilities, including assumptions about counterparty risk. Our fair value estimates reflect an income approach based on the terms of the interest rate swap contracts and inputs corroborated by observable market data including interest rate curves.
We recognize any differences between the variable interest rate in effect and the fixed interest rates per our swap contracts as an adjustment to interest expense over the life of the swaps. To the extent our derivatives are effective in offsetting the variability of the hedged cash flows, we record the changes in the estimated fair value of our interest rate swap contracts to Accumulated other comprehensive loss on the Consolidated Balance Sheets.
Our interest rate swaps in effect during the first six months of 2025 were previously forward-starting and converted the variable interest rate to a fixed interest rate on a portion of our variable rate borrowings. Interest expense related to the notional amounts under our swap contracts was based on the fixed rates plus the applicable margin on our variable rate borrowings. We recorded changes in the estimated fair value of these interest rate swap contracts to Accumulated other comprehensive loss on the Consolidated Balance Sheets.
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One of our interest rate swap contracts terminated on February 28, 2025. The following table provides additional details related to this former swap contract:
Derivative Inception Date Effective Date Termination Date Notional Amount
(in millions) Fixed Interest Rate
Interest rate swap 1 February 5, 2020 February 26, 2021 February 28, 2025 $ 150.0 1.3260 %
We currently have two swap contracts in place. The following table provides additional details related to these swap contracts:
Derivative Inception Date Effective Date Termination Date Notional Amount
(in millions) Fixed Interest Rate
Interest rate swap 2 March 9, 2020 September 29, 2022 February 26, 2027 $ 150.0 0.6690 %
Interest rate swap 3 March 9, 2020 February 28, 2025 February 26, 2027 $ 150.0 0.7630 %
For the interest rate swap contracts in effect at June 30, 2025, a portion of the change in the estimated fair value between periods relates to future interest expense. Recognition of the change in fair value between periods attributable to accrued interest is reclassified from Accumulated other comprehensive loss on the Consolidated Balance Sheets to Interest and other non-operating expenses, net on the Consolidated Statements of Income. These amounts were not material in the three and six-month periods ended June 30, 2025 or June 30, 2024.
Failure of any of our swap counterparties would result in the loss of any potential benefit to us under our swap agreements. In this case, we would still be obligated to pay the variable interest payments underlying our debt agreements. Additionally, failure of our swap counterparties would not eliminate our obligation to continue to make payments under our existing swap agreements if we were in a net pay position.
Our interest rate swap contracts are subject to master netting arrangements. According to our accounting policy, we do not offset the fair values of assets with the fair values of liabilities related to these contracts.
Other
Our deferred compensation plan asset represents investments in securities (primarily mutual funds) traded in an active market (Level 1 inputs) held for the benefit of certain employees as part of our deferred compensation plan. We record an equal and offsetting deferred compensation plan liability, which represents our obligation to participating employees. Changes in the fair value of the plan asset and liability are reflected in Selling and administrative expenses on the Consolidated Statements of Income.
The carrying values of cash and cash equivalents, receivables, accounts payable and accrued liabilities approximate fair value due to the short maturity of those instruments. The carrying value of our long-term debt approximates its fair value. Our determination of the estimated fair value reflects a discounted cash flow model using our estimates, including assumptions related to borrowing rates (Level 3 inputs).
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Note 5 – Debt
The table below presents the components of our debt (in thousands):
June 30,
2025 2024
Variable rate debt
Short-term borrowings $ 4,612 $ 7,053
Current portion of long-term debt:
Australian credit facility 12,774 12,673
Current portion of term loans under credit facility — 25,000
Short-term borrowings and current portion of long-term debt $ 17,386 $ 44,726
Long-term portion:
Revolving credit facility $ 354,800 $ 178,400
Term loan under credit facility 450,000 450,000
Term facility 90,000 109,938
Receivables securitization facility 320,100 334,700
Less: financing costs, net 2,367 1,211
Long-term debt, net 1,212,533 1,071,827
Total debt $ 1,229,919 $ 1,116,553
Credit Facility
Our Credit Facility provides for $ 1.3 billion in borrowing capacity consisting of an $ 800.0 million unsecured revolving credit facility and a $ 500.0 million term loan facility. Under our Credit Facility at June 30, 2025, there was $ 354.8 million of revolving borrowings outstanding, a $ 450.0 million term loan (net of $ 50.0 million of amortization payments), $ 15.1 million of standby letters of credit outstanding and $ 430.1 million available for borrowing.
Subsequent to June 30, 2025, we entered into the Fourth Amended and Restated Credit Agreement (the Amended Agreement), on July 10, 2025, by and among us, as U.S. Borrower, SCP Distributors Canada Inc., as Canadian Borrower, SCP International, Inc., as Euro Borrower, Wells Fargo Bank, National Association, as Administrative Agent, and certain other lenders party thereto. The Amended Agreement amends and restates the terms of our predecessor credit agreement principally by refinancing the existing $ 500.0 million term loan, extending the term loan maturity date from September 26, 2026 to September 30, 2029 and removing the term secured overnight financing rate (Term SOFR) adjustment of 0.10 %. Under the Amended Agreement, the term loan requires quarterly amortization payments commencing on September 30, 2027, with all remaining principal due on September 30, 2029. Revolving and term loan borrowings under the Amended Agreement continue to bear interest at a variable rate based on one-month Term SOFR, plus an applicable margin.
Otherwise, the Amended Agreement retains the core features of the predecessor credit agreement, including:
• $ 1.3 billion in borrowing capacity, consisting of:
◦ an $ 800.0 million unsecured revolving credit facility;
◦ a $ 500.0 million term loan facility;
• an accordion feature permitting us to request one or more incremental term loans or revolving credit facility commitment increases up to $ 250.0 million;
• an option permitting us to extend the maturity date of the revolving credit facility up to two years, subject to various conditions and restrictions; and
• sublimits for the issuance of swingline loans and standby letters of credit.
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Substantially all of the other terms of the term loan and revolving credit facility in the Amended Agreement remain similar to the predecessor credit agreement. The Amended Agreement continues to require us to maintain a maximum average total leverage ratio and a minimum fixed charge coverage ratio consistent with the terms specified in the predecessor credit agreement. All obligations under the Amended Agreement continue to be guaranteed on an unsecured basis by substantially all of our existing and future domestic subsidiaries. The Amended Agreement also continues to contain various customary affirmative and negative covenants and events of default. Failure to comply with any of the financial covenants or the occurrence of any other events of default would permit the lenders to, among other things, require immediate payment of all amounts outstanding under the Amended Agreement.
Following execution of the Amended Agreement on July 10, 2025, there was $ 380.0 million of revolving borrowings outstanding, a $ 500.0 million term loan, $ 14.4 million of standby letters of credit outstanding and $ 405.6 million available for borrowing under the Amended Agreement’s revolving credit facility.
Term Facility
Under our Term Facility, there was $ 90.0 million outstanding at June 30, 2025.
On July 10, 2025, we also entered into the Fourth Amendment to Credit Agreement, by and among us, as Borrower, the guarantors party thereto, and Bank of America, N.A., as lender (the Fourth Amendment), which amends that certain Credit Agreement by and among us, as borrower, the guarantors party thereto and Bank of America, N.A., as lender, dated as of December 30, 2019, as amended by that certain First Amendment to Credit Agreement dated October 12, 2021, that certain Second Amendment to Credit Agreement, dated June 30, 2023 and that certain Third Amendment to Credit Agreement, dated September 30, 2024 (as amended, the Term Agreement). The Fourth Amendment principally extends the maturity of the term loan under the Term Agreement from December 30, 2026 to September 30, 2029 to be concurrent with the maturity of the loans under the Amended Agreement and removes the Term SOFR adjustment of 0.10 %. Term loan borrowings under the Term Agreement bear interest at a variable rate based on one-month Term SOFR, plus an applicable margin. Under the Term Agreement, the term loan is repaid in quarterly installments of 1.250 % of the term loan on the last business day of each quarter beginning in the third quarter of 2027 with the final principal repayment due September 30, 2029.
Following the Fourth Amendment on July 10, 2025, there was $ 90.0 million outstanding under the Term Facility.
Receivables Securitization Facility
Under our Receivables Securitization Facility, there was $ 320.1 million outstanding at June 30, 2025.
Our accounts receivable securitization facility (the Receivables Facility) enables us to borrow up to $ 210.0 million to $ 375.0 million depending on the time of year, by providing for the sale of certain of our receivables to a wholly-owned subsidiary (the Securitization Subsidiary). The Securitization Subsidiary transfers variable undivided percentage interests in the receivables and related rights to certain third-party financial institutions in exchange for cash proceeds, limited to the applicable funding capacities.
We account for the sale of the receivable interests as a secured borrowing on our Consolidated Balance Sheets. The receivables subject to the agreement collateralize the cash proceeds received from the third-party financial institutions. We classify the entire outstanding balance as Long-term debt, net on our Consolidated Balance Sheets as we intend and have the ability to refinance the obligations on a long-term basis. We present the receivables that collateralize the cash proceeds separately as Receivables pledged under receivables facility on our Consolidated Balance Sheets.
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Note 6 - Segment Information
Since all of our sales centers have similar operations and share similar economic characteristics, we aggregate our sales centers into a single reportable segment and one reportable revenue stream. These similarities include (i) the nature of our products and services, (ii) the types of customers served and (iii) the distribution methods we use. Our chief operating decision maker (CODM) is our president and chief executive officer. Our CODM evaluates each sales center based on individual performance that includes both financial and operational measures. These measures include operating income, accounts receivable and inventory management criteria. The accounting policies for our segment are the same as those described in “Note 1 - Significant Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2024 and in Note 1 above.
T he table below presents segment revenue, operating expenses and operating income and reconciles segment operating income to consolidated income before taxes and equity in earnings (in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
2025 2024 2025 2024
Net sales $ 1,784,530 $ 1,769,784 $ 2,856,056 $ 2,890,594
Cost of sales 1,249,369 1,239,643 2,008,526 2,021,894
Gross profit 535,161 530,141 847,530 868,700
Compensation expenses 135,815 130,955 256,184 250,164
Freight out expenses 28,650 28,329 45,772 46,224
Other selling and administrative expenses 98,026 99,376 195,367 192,111
Operating income 272,670 271,481 350,207 380,201
Reconciliation:
Interest and other non-operating expenses, net 12,219 14,044 23,381 27,463
Income before income taxes and equity in earnings $ 260,451 $ 257,437 $ 326,826 $ 352,738
The tables below present supplemental information for our segment (in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
2025 2024 2025 2024
Depreciation $ 9,964 $ 8,931 $ 19,804 $ 17,591
Amortization 2,165 2,113 4,312 4,201
June 30,
2025 2024
Receivables, net $ 172,028 $ 169,849
Receivables pledged under receivables facility 404,776 407,680
Product inventories, net 1,330,221 1,295,600
14
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.