Pool Corporation (POOL) Earnings Call Transcript & Summary

Good morning, and welcome to the Pool Corporation Annual Meeting of Stockholders. I would now like to introduce the first presenter, John Stokely. Please go ahead.

Good morning. The meeting is now called to order. I am John Stokely, Chairman of the Board of Directors of Pool Corporation. On behalf of the company, I welcome you to the 2021 Annual Meeting of Stockholders. The purpose of this meeting is to consider the proposals described in the proxy materials, which were sent to all stockholders in March. We'll be glad to respond to any questions you may have later in the meeting. This is our second virtual meeting for Pool. We don't expect any technical difficulties today, but our operator will be available to provide instructions as necessary. The polls are open. To vote, please follow the instructions on the meeting website. The polls will remain open until the conclusion of the presentation of the matters to be voted on. The core responsibility of our board of directors is to act in the best interests of Pool and its stockholders by performing a number of specific functions, including risk assessment, review and oversight, while the management is responsible for the day-to-day management of our business, it is our duty to oversee the risk management programs and to assist management in addressing specific areas such as strategic, financial, regulatory and operations. We have 4 committees: the Compensation Committee, the Audit Committee, the Nominating and Corporate Governance Committee, and the Strategic Planning Committee. I'd like to introduce the other members of the board of directors who are in attendance today: they are Pete Arvan, Robert Sledd, Harlan Seymour, Timothy Graven, David Whalen, Debra Oler, and Manny Perez de la Mesa. As a board we continually review and assess the skills and abilities of our directors, and evaluate how those skills best serve the needs of the company and its stockholders. We strive to ensure there are no gaps in directors' skills and abilities that need to be addressed. Our board members are very experienced and have a successful track record of performance in many areas, including multi-unit distribution, finance, strategic planning, mergers and acquisitions, marketing, information technology, international operations, and governance. A detailed biography for each director is in the proxy materials previously sent to the stockholders. I encourage you to review those materials to see what a dynamic group of businesspeople we have assembled to help us run our business. Next, I would like to introduce the other participants in our meeting today. First, Jennifer Neil, the company's Vice President, Chief Legal Officer and Secretary of the board. Also please welcome Kelly Simoneaux, outside counsel with Jones Walker LLP. Ms. Simoneaux will be serving as the inspector of election for today's meeting. In addition, Christy Baumann, the engagement partner with Ernst & Young, is joining us for the meeting today. She will be available to respond to any questions you may have later in the meeting. Ms. Neil has a certified list of the holders of record of the company's common stock as of the close of business on March 16, 2021, a copy of the notice for this meeting, and an affidavit of mailing of such notice to stockholders entitled to vote at this meeting. The list of stockholders is available for inspection during the meeting by the stockholders at the website used to access this meeting. Ms. Neil, you are hereby instructed to preserve such documents among the corporate records of the company. A stockholder may submit questions electronically during the meeting by typing your question in the box located on the webcast screen. These questions will not be visible to other participants. Questions received during the meeting in accordance with the company's rules of conduct will be addressed at the end of the meeting. This brings us to the first item on the agenda, which is the determination of a quorum. Pool's bylaws provide that a quorum shall constitute (sic) [ consist of ] the present in person or by proxy of the majority of shares entitled to vote at the meeting. Ms. Simoneaux, may I have a report on whether a quorum is present?

Mr. Stokely, I wish to report that 36,725,468 shares, constituting 91.25% of the common stock of the company, are represented by proxy at this meeting out of 40,246,051 shares of common stock outstanding and entitled to vote, which represents a quorum for purposes of the meeting.

Thank you. Since a quorum is represented at the meeting, I now declare the meeting duly convened and constituted. As previously stated, the polls are open. All stockholders entitled to vote at this meeting have the ability to do so online. If you are a stockholder entitled to vote and have not yet voted or if you want to change your previously cast vote, please do so via the instructions provided on the meeting website. Please remember that if you've already voted by proxy, it is not necessary to vote again. We will now proceed with the main business of the meeting, the first item being the election of directors. The following persons have been nominated by the Board of Directors to serve as directors until the next annual meeting of stockholders or until their successors are elected and qualified. Peter Arvan, Timothy Graven, Debra Oler, Manny Perez de la Mesa, Harlan Seymour, Robert Sledd, John Stokely and David Whalen. The second item on the agenda is the ratification of the retention of Ernst & Young LLP, certified public accountants as our independent registered public accounting firm for the 2021 fiscal year. The third and final item on the agenda is the say on pay vote, a nonbinding advisory vote to approve the compensation of our named executive officers as disclosed in the proxy statement. The polls are about to close. So if you have not yet voted, please do so now. [Voting]

Since everyone has had the opportunity to vote, I hereby declare that the polls are now closed. Let me now ask Ms. Simoneaux for a preliminary report on the vote.

Mr. Stokely, the preliminary results of the vote are that: one, the 8 nominees have been elected as directors to serve for a term expiring at the 2022 annual meeting of stockholders; two, the retention of Ernst & Young LLP as our independent registered public accounting firm for the 2021 fiscal year has been ratified; and three, that the compensation of our named executive officers as disclosed in the proxy statement is approved.

Thank you. I hereby direct that the preliminary results of the voting be incorporated into the minutes of this meeting. The final voting results of today's meeting will be reported on a Form 8-K filed within 4 business days of this meeting. Before we close, I'd like to make a few comments. First, I'd like to extend a heartfelt thanks to Andy Code, who is retiring as a director in connection with today's annual meeting of stockholders. Andy has served as a Director of Pool Corporation since 1993 and has been the company's longest-serving director. We wish Andy well in his retirement and express our appreciation for his contributions and guidance over the years -- over his years of service with Pool Corp. I also, on behalf of the Board and the company's investors, would like to thank our over 5,000 associates who work for Pool Corp. Navigating our business environment during the past year has been difficult. Our people continue to execute flawlessly while maintaining flexibility during these challenging times. At the same time, they retained an entrepreneurial spirit that have allowed them to achieve unprecedented results. A heartfelt thank you to all of our associates that have made this extraordinary year possible. Entering this year, the company continued to be well positioned to deal with the impacts of the current business environment. Our balance sheet is strong, and we have adequate access to capital. We believe this provides us with substantial flexibility and liquidity to deal with future economic conditions and to take advantage of opportunities that are available to us. That completes our business agenda for today, and the meeting is now adjourned. We will now address any stockholder questions that have been submitted online. Thank you. This concludes our question-and-answer period. Thanks for participating, and have a good day.