Pool Corporation Reports Higher Third Quarter Earnings and Cash Flow

Provides Fourth Quarter Earnings Guidance

Covington, Louisiana, UNITED STATES


COVINGTON, La., Oct. 23, 2008 (GLOBE NEWSWIRE) -- Pool Corporation (Nasdaq:POOL) today reported results for the third quarter of 2008.

"Our ongoing efforts to improve profitability and control expenses are evident in our results. We are also pleased with our momentum in increasing our market share, as our focus on operating in a disciplined manner and continually providing exceptional value to both our customers and our suppliers has helped counter the effects of the unprecedented external market environment," commented Manuel Perez de la Mesa, President and CEO.

Net sales for the quarter ended September 30, 2008 decreased 6% to $493.5 million, compared to $527.4 million in the third quarter of 2007. Base business sales declined 8% due to the continued drop-off in new pool and irrigation construction activity and unfavorable weather. This reduction was partially offset by sales from acquired businesses and an increase in maintenance, repair and replacement product sales. During the quarter, complementary product sales were down approximately 12% compared to a 5% decrease in the same period in 2007.

Gross profit for the third quarter of 2008 increased $2.0 million, or 1%, to $141.8 million from $139.8 million in the comparable 2007 period. Gross profit as a percentage of net sales (gross margin) improved to 28.7% in the third quarter of 2008 from 26.5% for the third quarter of 2007. The increase in gross margin is attributable to improved pricing management, a favorable shift in sales mix to products in the higher margin maintenance market, an increase in sales of Pool Corporation brands and benefits from inflationary price increases.

Operating expenses increased $2.9 million, or 3%, to $103.2 million in the third quarter of 2008 from $100.3 million in the third quarter of 2007. This increase was due to operating expenses related to acquired businesses. Base business operating expenses decreased 1% quarter over quarter.

Operating income decreased $0.9 million, or 2%, to $38.6 million from $39.5 million. Operating income as a percentage of net sales (operating margin) was up slightly to 7.8% for the current quarter, compared to 7.5% for the third quarter of 2007. Interest expense decreased 28% during the quarter due to a lower weighted average effective interest rate and lower average debt levels compared to the third quarter of 2007. Earnings per share for the third quarter of 2008 increased to $0.45 per diluted share on net income of $22.1 million, compared to $0.43 per diluted share on net income of $21.8 million for the third quarter of 2007.

Net sales for the nine months ended September 30, 2008 decreased 6% to $1,524.7 million, compared to $1,627.6 million in the comparable 2007 period. Base business sales declined 8% for the first nine months of 2008. Year to date, complementary product sales were down approximately 13% due to the decline in new pool and irrigation construction activity. Gross margin increased 120 basis points to 28.9% in the first nine months of 2008 from 27.7% for the same period last year.

Operating income for the first nine months of 2008 decreased 11% to $130.8 million compared to $146.6 million in the same period last year. Operating margin was 8.6% for the first nine months of 2008 compared to 9.0% for the first nine months of 2007. Earnings per share for the first nine months of 2008 decreased to $1.47 per diluted share on net income of $71.8 million, compared to $1.58 per diluted share on net income of $81.0 million in the comparable 2007 period.

"Given the weak external market environment and our prudent credit management practices, we are updating our annual earnings guidance and project fourth quarter earnings per diluted share to be similar to fourth quarter 2007," said Perez de la Mesa.

On the balance sheet, total net receivables decreased 11% compared to September 30, 2007 due to lower sales and focused collection efforts. Inventory levels increased 9% to $345.9 million at September 30, 2008. Excluding acquired inventories of approximately $17.9 million, inventories increased approximately 3% year over year.

Cash provided by operations increased $43.0 million to $76.5 million in the first nine months of 2008 due to the deferral of a $28.0 million third quarter 2008 estimated federal tax payment as allowed by the Internal Revenue Service for taxpayers affected by Hurricane Gustav and favorable impacts from changes in working capital balances that more than offset the reduction in net income. Adjusted EBITDA (as defined in the addendum to this release) was $46.0 million in the third quarter of 2008 compared to $47.0 million in the third quarter of 2007 and $148.0 million for the nine months ended September 30, 2008 compared to $164.6 million for the nine months ended September 30, 2007.

Pool Corporation is the largest wholesale distributor of swimming pool and related backyard products. Currently, POOL operates 288 sales centers in North America and Europe, through which it distributes more than 100,000 national brand and private label products to roughly 70,000 wholesale customers. For more information about POOL, please visit www.poolcorp.com.

The Pool Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4853

This news release includes "forward-looking" statements that involve risk and uncertainties that are generally identifiable through the use of words such as "believe," "expect," "intend," "plan," "estimate," "project" and similar expressions and include projections of earnings. The forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date of this release, and we undertake no obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur. Actual results may differ materially due to a variety of factors, including the sensitivity of our business to weather conditions, our ability to maintain favorable relationships with suppliers and manufacturers, competition from other leisure product alternatives and mass merchants, changes in the economy and the housing market and other risks detailed in POOL's 2007 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.


                           POOL CORPORATION
                   Consolidated Statements of Income
                              (Unaudited)
                 (In thousands, except per share data)

                      Three Months Ended         Nine Months Ended
                         September 30,             September 30,
                    ---------------------    ------------------------
                      2008        2007          2008          2007
                    ---------   ---------    ----------    ----------

 Net sales          $ 493,530   $ 527,434    $1,524,717    $1,627,612
 Cost of sales        351,730     387,631     1,084,811     1,176,402
                    ---------   ---------    ----------    ----------
   Gross profit       141,800     139,803       439,906       451,210
   Percent               28.7%       26.5%         28.9%         27.7%
 Selling and
  administrative
  expenses            103,183     100,298       309,102       304,640
                    ---------   ---------    ----------    ----------
   Operating income    38,617      39,505       130,804       146,570
   Percent                7.8%        7.5%          8.6%          9.0%

 Interest expense,
  net                   4,589       6,349        14,700        16,765
                    ---------   ---------    ----------    ----------
 Income before
  income taxes and
  equity earnings      34,028      33,156       116,104       129,805
 Provision for
  income taxes         13,675      12,802        45,397        50,118
 Equity earnings in
  unconsolidated
  investments, net      1,707       1,481         1,044         1,296
                    ---------   ---------    ----------    ----------
 Net income         $  22,060   $  21,835    $   71,751    $   80,983
                    =========   =========    ==========    ==========

 Earnings per
  share:
   Basic            $    0.46   $    0.45    $     1.50    $     1.64
                    =========   =========    ==========    ==========
   Diluted          $    0.45   $    0.43    $     1.47    $     1.58
                    =========   =========    ==========    ==========
 Weighted average
  shares
  outstanding:
   Basic               47,824      48,623        47,694        49,372
                    =========   =========    ==========    ==========
   Diluted             49,060      50,490        48,735        51,347
                    =========   =========    ==========    ==========

 Cash dividends
  declared per
  common share      $    0.13   $    0.12    $     0.38    $    0.345


                           POOL CORPORATION
                 Condensed Consolidated Balance Sheets
                              (Unaudited)
                            (In thousands)

                               Sept. 30,   Sept. 30,         Change
                                2008         2007          $       %
 ---------------------------------------------------------------------
 Assets
 Current assets:
  Cash and cash equivalents   $ 25,278     $ 50,265    $(24,987)  (50)%
  Receivables, net              45,426       58,023     (12,597)  (22)
  Receivables pledged under
   receivables facility        133,501      142,511      (9,010)   (6)
  Product inventories, net     345,944      317,110      28,834     9
  Prepaid expenses and other
   current assets                7,915        9,004      (1,089)  (12)
  Deferred income taxes          9,139        7,652       1,487    19
 --------------------------------------------------------------
 Total current assets          567,203      584,565     (17,362)   (3)

 Property and equipment,
  net                           32,895       35,518      (2,623)   (7)
 Goodwill                      167,376      155,247      12,129     8
 Other intangible assets,
  net                           13,519       15,459      (1,940)  (13)
 Equity interest
  investments                   35,592       34,561       1,031     3
 Other assets, net              25,299       19,073       6,226    33
 --------------------------------------------------------------
 Total assets                 $841,884     $844,423    $ (2,539)   (0)%
 --------------------------------------------------------------

 Liabilities and
  stockholders' equity
 Current liabilities:
  Accounts payable            $128,329     $127,889    $    440     0%
  Accrued and other
   current
   liabilities                  80,636       53,557      27,079    51
  Short-term financing          58,392      110,715     (52,323)  (47)
  Current portion of
   long-term debt and
   other long-term
   liabilities                   5,369        3,350       2,019    60
 --------------------------------------------------------------
 Total current liabilities     272,726      295,511     (22,785)   (8)

 Deferred income taxes          18,608       15,185       3,423    23
 Long-term debt                274,100      292,750     (18,650)   (6)
 Other long-term
  liabilities                    6,225        6,152          73     1
 --------------------------------------------------------------
 Total liabilities             571,659      609,598     (37,939)   (6)
 --------------------------------------------------------------

 Total stockholders' equity    270,225      234,825      35,400    15
 --------------------------------------------------------------
 Total liabilities and
  stockholders' equity        $841,884     $844,423    $ (2,539)   (0)%
 --------------------------------------------------------------

  ------------------
  1. Total receivables at September 30, 2008 include approximately
     $4.2 million of acquired receivables, primarily from the
     acquisition of National Pool Tile  (NPT).  The allowance for
     doubtful accounts was $10.6  million at September 30, 2008 and
     $8.7 million at September 30, 2007, with $0.6 million of the
     September 30, 2008 balance related to the acquisition of NPT.

  2. Total product inventories at September 30, 2008 include
     approximately $17.9 million of acquired inventories, primarily
     from the acquisition of NPT. The inventory reserve was $8.7
     million at September 30, 2008 and $5.4 million at September 30,
     2007, with $1.2 million of the September 30, 2008 balance
     related to the acquisition of NPT.


                           POOL CORPORATION
            Condensed Consolidated Statements of Cash Flows
                              (Unaudited)
                            (In thousands)

                                         Nine Months Ended
                                            September 30,
                                          2008       2007     Change
 --------------------------------------------------------------------
 Operating activities
 Net income                            $  71,751  $  80,983  $ (9,232)
  Adjustments to reconcile net income
   to net cash provided by operating
   activities:
   Depreciation                            7,182      6,868       314
   Amortization                            3,196      3,665      (469)
   Share-based compensation                5,493      5,564       (71)
   Excess tax benefits from share-
    based compensation                    (2,452)    (8,345)    5,893
   Equity earnings in unconsolidated
    investments                           (1,635)    (2,087)      452
   Other                                   1,393      3,476    (2,083)
 Changes in operating assets and
  liabilities, net of effects of
  acquisitions:
   Receivables                           (33,908)   (49,373)   15,465
   Product inventories                    47,545     14,580    32,965
   Accounts payable                      (67,940)   (49,743)  (18,197)
   Other current assets and
    liabilities                           45,910     27,927    17,983
 --------------------------------------------------------------------
 Net cash provided by operating
  activities                              76,535     33,515    43,020

 Investing activities
 Acquisition of businesses, net of
  cash acquired                          (32,891)    (2,087)  (30,804)
 Divestiture of business                   1,165         --     1,165
 Purchase of property and equipment,
  net of sale proceeds                    (4,999)    (9,407)    4,408
 Proceeds from sale of investment             --         75       (75)
 --------------------------------------------------------------------
 Net cash used in investing activities   (36,725)   (11,419)  (25,306)

 Financing activities
 Proceeds from revolving line of credit  276,826    306,771   (29,945)
 Payments on revolving line of credit   (277,751)  (299,928)   22,177
 Proceeds from asset-backed financing     73,335     87,479   (14,144)
 Payments on asset-backed financing      (83,270)   (51,050)  (32,220)
 Proceeds from long-term debt                 --    100,000  (100,000)
 Payments on long-term debt and other
  long-term liabilities                   (2,385)    (3,320)      935
 Payments of capital lease obligations      (251)      (257)        6
 Payments of deferred financing costs        (22)      (397)      375
 Excess tax benefits from share-based
  compensation                             2,452      8,345    (5,893)
 Proceeds from issuance of common
  stock under share-based compensation
  plans                                    3,736      7,154    (3,418)
 Payments of cash dividends              (18,187)   (17,033)   (1,154)
 Purchases of treasury stock              (3,244)  (128,777)  125,533
 --------------------------------------------------------------------
 Net cash (used in) provided by
  financing activities                   (28,761)     8,987   (37,748)
 Effect of exchange rate changes on
  cash                                    (1,596)     2,448    (4,044)
 --------------------------------------------------------------------
 Change in cash and cash equivalents       9,453     33,531   (24,078)
 Cash and cash equivalents at beginning
  of period                               15,825     16,734      (909)
 --------------------------------------------------------------------
 Cash and cash equivalents at end of
  period                               $  25,278  $  50,265  $(24,987)
 --------------------------------------------------------------------


 Addendum
 The following table breaks out our consolidated results into the base
 business component and the excluded components (sales centers
 excluded from base business):
 --------------------------------------------------------------------
 (Unaudited)             Base Business                Excluded
 (In thousands)       Three Months Ended          Three Months Ended
                         September 30,              September 30,
                      2008          2007          2008        2007
 --------------------------------------------------------------------
 Net sales         $  467,878    $  509,766      $25,652     $17,668

 Gross profit         133,771       135,580        8,029       4,223
 Gross margin            28.6%         26.6%        31.3%       23.9%

 Selling and
  administrative
  expenses             95,024        96,056        8,159       4,242
 Expenses as
  a % of
  net sales              20.3%         18.8%        31.8%       24.0%

 Operating
  income (loss)        38,747        39,524         (130)        (19)
 Operating margin         8.3%          7.8%        (0.5)%      (0.1)%
 --------------------------------------------------------------------

 ------------------------------------------
 (Unaudited)               Total
 (In thousands)       Three Months Ended
                         September 30,
                      2008          2007
 ------------------------------------------
 Net sales         $  493,530    $  527,434

 Gross profit         141,800       139,803
 Gross margin            28.7%         26.5%

 Selling and
  administrative
  expenses            103,183       100,298
 Expenses as
  a % of
  net sales              20.9%         19.0%

 Operating
  income (loss)        38,617        39,505
 Operating margin         7.8%          7.5%
 ------------------------------------------


 --------------------------------------------------------------------
 (Unaudited)             Base Business                Excluded
 (In thousands)        Nine Months Ended          Nine Months Ended
                         September 30,              September 30,
                      2008          2007          2008        2007
 --------------------------------------------------------------------
 Net sales         $1,456,763    $1,584,377      $67,954     $43,235

 Gross profit         418,414       440,338       21,492      10,872
 Gross margin            28.7%         27.8%        31.6%       25.1%

 Selling and
  administrative
  expenses            289,165       294,146       19,937      10,494
 Expenses as
  a % of
  net sales              19.8%         18.6%        29.3%       24.3%

 Operating income     129,249       146,192        1,555         378
 Operating margin         8.9%          9.2%         2.3%        0.9%
 --------------------------------------------------------------------

 ------------------------------------------
 (Unaudited)                Total
 (In thousands)        Nine Months Ended
                         September 30,
                      2008          2007
 ------------------------------------------
 Net sales         $1,524,717    $1,627,612

 Gross profit         439,906       451,210
 Gross margin            28.9%         27.7%

 Selling and
  administrative
  expenses            309,102       304,640
 Expenses as
  a % of
  net sales              20.3%         18.7%

 Operating income     130,804       146,570
 Operating margin         8.6%          9.0%
 ------------------------------------------

 We exclude the following sales centers from base business results
 for a period of 15 months (parenthetical numbers for each category
 indicate the number of sales centers excluded as of September 30,
 2008):

  o acquired sales centers (10, net of consolidations see table
    below);
  o existing sales centers consolidated with acquired sales centers
    (6);
  o closed sales centers (3);
  o consolidated sales centers in cases where we do not expect to
    maintain the majority of the existing business (1); and
  o sales  centers  opened in new markets (0).

 We generally allocate corporate overhead expenses to excluded sales
 centers on the basis of their net sales as a percentage of total net
 sales.  After 15 months of operations, we include acquired,
 consolidated and new market sales centers in the base business
 calculation including the comparative prior year period.


 In addition to the 20 sales centers excluded from base business as
 of September 30, 2008, there were 2 new market sales centers
 excluded until they became base business sales centers in June 2008.
 We also divested our pool liner fabrication operation in France as
 of April 2008, and therefore we have excluded these results from
 base business for the second and third quarters of 2007.

 We have excluded the following acquisitions from base business for
 the periods identified:

                                   Net
                                  Sales
                 Acquisition     Centers
  Acquired           Date        Acquired         Period Excluded
 -------------   -------------   ---------    -----------------------
 National Pool
  Tile (NPT)(1)  March 2008          9         March - September 2008
 Canswim
  Pools          March 2008          1         March - September 2008
 Tor-Lyn,
  Limited        February 2007       1         February - April 2007
                                              and January - April 2008

 The table below summarizes the changes in our sales centers in the
 first nine months of 2008:

            December 31, 2007                              281
             Acquired, net of consolidations(1)             12
             Consolidated                                   (1)
             Closed                                         (1)
                                                           ----
            March 31, 2008                                 291
             New locations                                   1
             Consolidation of acquired locations(1)         (2)
                                                           ----
            June 30, 2008 and September 30, 2008           290
                                                           ====

 (1) We acquired 15 NPT sales centers and have consolidated 6 of these
     with existing sales centers, including 4 in March 2008 and 2 in
     the second quarter of 2008.


 We define Adjusted EBITDA as net income or net loss plus interest
 expense, income taxes, depreciation, amortization and share-based
 compensation. Adjusted EBITDA is not a measure of cash flow or
 liquidity as determined by generally accepted accounting principles
 (GAAP). We have included Adjusted EBITDA as a supplemental
 disclosure because we believe that it is widely used by our
 investors, industry analysts and others as a useful supplemental
 liquidity measure in conjunction with cash flows provided by or used
 in operating activities to help investors understand our ability to
 provide cash flows to fund growth, service debt and pay dividends
 as well as compare our cash flow generating capacity from year to
 year.

 We believe Adjusted EBITDA should be considered in addition to, not
 as a substitute for, operating income, net income or loss, cash flows
 provided by or used in operating, investing and financing activities
 or other income statement or cash flow statement line items reported
 in accordance with GAAP. Other companies may calculate Adjusted
 EBITDA differently than we do, which may limit its usefulness as a
 comparative measure.

 The table below presents a reconciliation of net income to Adjusted
 EBITDA.

 --------------------------------------------------------------------
 (Unaudited)            Three Months Ended        Nine Months Ended
 (In thousands)            September 30,            September 30,
                        2008         2007        2008         2007
 --------------------------------------------------------------------
 Net income           $  22,060    $  21,835   $  71,751    $  80,983
  Add:
   Interest
    expense, net          4,589        6,349      14,700       16,765
  Provision for
   income taxes          13,675       12,802      45,397       50,118
  Income tax
   expense on
   equity earnings        1,086          959         591          791
  Share-based
   compensation           1,224        1,619       5,493        5,564
  Depreciation            2,378        2,352       7,182        6,868
  Amortization(1)           975        1,114       2,924        3,497
 --------------------------------------------------------------------
 Adjusted EBITDA      $  45,987    $  47,030   $ 148,038    $ 164,586
 --------------------------------------------------------------------

 (1) Excludes amortization included in interest expense, net

 The table below presents a reconciliation of Adjusted EBITDA to cash
 provided by operating activities. Please see page 5 for our Condensed
 Consolidated Statements of Cash Flows.

--------------------------------------------------------------------
 (Unaudited)            Three Months Ended        Nine Months Ended
 (In thousands)            September 30,            September 30,
                        2008         2007        2008         2007
 --------------------------------------------------------------------
 Adjusted EBITDA      $  45,987    $  47,030   $ 148,038    $ 164,586
  Add:
   Interest expense,
    net(1)               (4,517)      (6,291)    (14,428)     (16,597)
   Provision for
    income taxes        (13,675)     (12,802)    (45,397)     (50,118)
   Income tax expense
    on equity earnings   (1,086)        (959)       (591)        (791)
   Excess tax benefits
    on share-based
    compensation           (800)      (1,946)     (2,452)      (8,345)
   Equity earnings in
    unconsolidated
    investments          (2,793)      (2,440)     (1,635)      (2,087)
   Other                  2,894        2,839       1,393        3,476
   Change in
    operating
    assets and
    liabilities          85,687       62,159      (8,393)     (56,609)
 --------------------------------------------------------------------
 Net cash provided
  by operating
  activities          $ 111,697    $  87,590   $  76,535    $  33,515
 --------------------------------------------------------------------

 (1) Excludes amortization of deferred financing costs of $72 and $58
     for the three months ended September 30, 2008 and September 30,
     2007, respectively, and $272 and $168 for the nine months ended
     September 30, 2008 and September 30, 2007, respectively. This
     non-cash expense is included in interest expense, net on the
     Consolidated Statements of Income.


        

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