UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2026
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
POOL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
0-26640
36-3943363
(State or other jurisdiction
(Commission File Number)
(I.R.S. Employer
of incorporation)
Identification No.)
109 Northpark Boulevard,
Covington,
Louisiana
70433-5001
(Address of principal executive
(Zip Code)
offices)
(985) 892-5521
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.001 per share
POOL
Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of July 23, 2026, there were 36,340,747 shares of the registrant’s common stock outstanding.
Form 10-Q
For the Quarter Ended June 30, 2026
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Income
1
Consolidated Statements of Comprehensive Income
2
Consolidated Balance Sheets
3
Condensed Consolidated Statements of Cash Flows
4
Consolidated Statements of Changes in Stockholders’ Equity
5
Notes to Consolidated Financial Statements
7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
14
Item 3. Quantitative and Qualitative Disclosures about Market Risk
26
Item 4. Controls and Procedures
PART II. OTHER INFORMATION
27
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 5. Other Information
Item 6. Exhibits
28
SIGNATURE
29
Item 1. Financial Statements
(Unaudited)
(In thousands, except per share data)
Three Months Ended
Six Months Ended
June 30,
2026
2025
Net sales
$
1,822,938
1,784,530
2,960,952
2,856,056
Cost of sales
1,282,176
1,249,369
2,090,319
2,008,526
Gross profit
540,762
535,161
870,633
847,530
Selling and administrative expenses
273,083
262,491
520,343
497,323
Operating income
267,679
272,670
350,290
350,207
Interest and other non-operating expenses, net
14,273
12,219
26,639
23,381
Income before income taxes and equity in earnings (loss)
253,406
260,451
323,651
326,826
Provision for income taxes
65,345
66,180
82,325
79,064
Equity in earnings (loss) of unconsolidated investments, net
(13
)
(7
41
Net income
188,089
194,258
241,319
247,803
Earnings per share attributable to common stockholders:
Basic
5.18
5.19
6.62
6.60
Diluted
5.17
6.61
6.57
Weighted average common shares outstanding:
36,085
37,271
36,223
37,365
36,132
37,407
36,280
37,520
Cash dividends declared per common share
1.30
1.25
2.55
2.45
The accompanying Notes are an integral part of the Consolidated Financial Statements.
(In thousands)
Other comprehensive (loss) income:
Foreign currency translation (loss) gain
(2,728
13,358
(5,608
17,285
Unrealized loss on interest rate swaps, net of the change in taxes of $435, $735, $711 and $1,705
(1,305
(2,204
(2,133
(5,115
Total other comprehensive (loss) income
(4,033
11,154
(7,741
12,170
Comprehensive income
184,056
205,412
233,578
259,973
(In thousands, except share data)
December 31,
(Audited)
Assets
Current assets:
Cash and cash equivalents
28,762
83,669
104,963
Receivables, net
190,947
172,028
136,063
Receivables pledged under receivables facility
446,914
404,776
211,740
Product inventories, net
1,378,695
1,330,221
1,454,672
Prepaid expenses and other current assets
48,801
42,281
62,426
Total current assets
2,094,119
2,032,975
1,969,864
Property and equipment, net
276,897
258,188
267,065
Goodwill
706,721
700,476
707,345
Other intangible assets, net
279,890
286,810
283,882
Equity interest investments
1,567
1,494
1,576
Operating lease assets
345,894
315,434
327,398
Other assets
55,386
76,579
68,996
Total assets
3,760,474
3,671,956
3,626,126
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
474,481
529,316
652,619
Accrued expenses and other current liabilities
185,505
160,833
109,301
Short-term borrowings and current portion of long-term debt
13,443
17,386
13,029
Current operating lease liabilities
110,596
100,439
105,336
Total current liabilities
784,025
807,974
880,285
Deferred income taxes
94,644
79,138
95,633
Long-term debt, net
1,327,273
1,212,533
1,186,424
Other long-term liabilities
50,680
50,177
48,313
Non-current operating lease liabilities
243,854
223,016
230,242
Total liabilities
2,500,476
2,372,838
2,440,897
Stockholders’ equity:
Common stock, 0.001 par value; 100,000,000 shares authorized;36,340,877, 37,314,231 and 36,577,686 shares issued andoutstanding at June 30, 2026, June 30, 2025 andDecember 31, 2025, respectively
36
37
Additional paid-in capital
692,399
658,345
671,050
Retained earnings
581,824
642,230
520,662
Accumulated other comprehensive loss
(14,261
(1,494
(6,520
Total stockholders’ equity
1,259,998
1,299,118
1,185,229
Total liabilities and stockholders’ equity
Operating activities
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation
22,654
19,804
Amortization
4,543
4,312
Share-based compensation
17,475
12,950
Equity in loss (earnings) of unconsolidated investments, net
(41
Other
732
(942
Changes in operating assets and liabilities, net of effects of acquisitions:
Receivables
(292,227
(254,322
Product inventories
72,454
(29,375
Prepaid expenses and other assets
25,560
53,440
(170,516
315
Accrued expenses and other liabilities
77,251
(55,488
Net cash used in operating activities
(748
(1,544
Investing activities
Purchases of property and equipment, net of sale proceeds
(36,569
(27,390
Other investments, net
554
(1,073
Net cash used in investing activities
(36,015
(28,463
Financing activities
Proceeds from revolving line of credit
1,023,500
1,117,100
Payments on revolving line of credit
(1,024,200
(956,900
Payments on term loan under credit facility
—
(12,500
Proceeds from asset-backed financing
308,900
323,200
Payments on asset-backed financing
(167,900
(177,200
Payments on term facility
(19,937
Proceeds from short-term borrowings and current portion of long-term debt
6,577
17,112
Payments on short-term borrowings and current portion of long-term debt
(6,163
(11,699
Payments of excise tax on repurchases of common stock
(2,974
Proceeds from stock issued under share-based compensation plans
3,874
6,780
Payments of cash dividends
(93,004
(92,163
Repurchases of common stock
(86,428
(160,648
Net cash (used in) provided by financing activities
(37,818
33,145
Effect of exchange rate changes on cash and cash equivalents
(1,620
2,669
Change in cash and cash equivalents
(76,201
5,807
Cash and cash equivalents at beginning of period
77,862
Cash and cash equivalents at end of period
Common Stock
AdditionalPaid-In
Retained
AccumulatedOtherComprehensive
Shares
Amount
Capital
Earnings
Loss
Total
Balance at December 31, 2025
36,578
53,229
Foreign currency translation
(2,880
Interest rate swaps, net of the change in taxes of $276
(828
Repurchases of common stock, net of retirements
(316
(1
(64,888
(64,889
5,472
Issuance of stock under share-based compensation plans
181
3,698
Declaration of cash dividends
(45,786
Balance at March 31, 2026
36,443
680,220
463,217
(10,228
1,133,245
Interest rate swaps, net of the change in taxes of $435
(120
(22,195
12,003
18
176
(47,287
Balance at June 30, 2026
36,341
Balance at December 31, 2024
37,692
38
638,615
648,476
(13,664
1,273,465
53,545
3,927
Interest rate swaps, net of the change in taxes of $970
(2,911
(169
(56,530
6,055
137
6,383
(45,243
Balance at March 31, 2025
37,660
651,053
600,248
(12,648
1,238,691
Interest rate swaps, net of the change in taxes of $735
(351
(105,322
(105,323
6,895
397
(46,954
Balance at June 30, 2025
37,314
6
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 2025 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 2025 Annual Report on Form 10-K. The results for our three and six months ended June 30, 2026 are not necessarily indicative of the expected results for our fiscal year ending December 31, 2026.
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 and increase them for tax deficiencies. 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. To the extent realized tax deductions are less than the amount of previously recognized deferred tax benefits related to share-based compensation, we record an excess tax expense. We record all excess tax benefits or deficiencies 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 stock awards lapse. For the six months ended June 30, 2026, we recorded an excess tax benefit of $0.7 million compared to an excess tax benefit of $3.9 million in the six months ended June 30, 2025.
Retained Earnings
We account for the retirement of repurchased shares as a decrease to Retained earnings on the Consolidated Balance Sheets. As of June 30, 2026, Retained earnings reflects cumulative net income, the cumulative impact of adjustments for changes in accounting pronouncements, share retirements since the inception of our share repurchase programs of $3.2 billion and cumulative dividends of $1.6 billion.
Accumulated Other Comprehensive Loss
The table below presents the components of our Accumulated other comprehensive loss balance (in thousands):
Foreign currency translation adjustments
(18,931
(11,803
(13,323
Unrealized gains on interest rate swaps, net of tax
4,670
10,309
6,803
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) 2025-06, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software
In September 2025, the FASB issued ASU 2025-06, which modernizes the accounting for internal-use software to current development practices, clarifies when to begin capitalizing costs and enhances disclosure requirements.
For annual periods beginning after December 15, 2027, including interim periods within those fiscal years. The ASU may be adopted on a prospective or retrospective basis with early adoption permitted.
We are currently evaluating the impact that the adoption of this standard will have on our consolidated financial statements and related disclosures.
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 FASB issued ASU 2024-03, 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 impact that the adoption of this standard will have on our disclosures.
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, 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.
8
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 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 215,000 for the three months ended June 30, 2026 and 186,000 for the three months ended June 30, 2025, and 200,000 for the six months ended June 30, 2026 and 185,000 for the six months ended June 30, 2025.
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):
Amounts allocated to participating securities
(1,118
(963
(1,365
(1,220
Net income attributable to common stockholders
186,971
193,295
239,954
246,583
Effect of dilutive securities:
Stock options, restricted stock units and employee stock purchase plan
47
136
57
155
Anti-dilutive stock options excluded from diluted earnings per share computations (1)
246
190
9
Note 3 – Acquisitions
In October 2025, we acquired the distribution assets of Vegas Stone Brokers, a stone and hardscapes supplier, adding one location in Nevada.
In August 2025, we acquired the distribution assets of Great Plains Supply Pool and Spa Products, a wholesale distributor of swimming pool products and supplies, adding one location in Kansas and one location in Texas.
We have completed our accounting for these acquisitions, subject to adjustments for standard holdback provisions per the terms of the purchase agreements, which are not material.
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:
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
Unrealized gains on interest rate swaps
6,272
13,791
Deferred compensation plan asset
20,423
18,832
Liabilities
Deferred compensation plan liability
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.
10
Our interest rate swaps in effect during the first six months of 2026 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. Changes in the estimated fair value of these interest rate swap contracts were recorded to Accumulated other comprehensive loss on the Consolidated Balance Sheets.
We currently have two interest rate swap contracts in place. The following table provides additional details related to these swap contracts:
Derivative
Inception Date
TerminationDate
NotionalAmount (in millions)
Fixed InterestRate
Interest rate swap 1
March 9, 2020
September 29, 2022
February 26, 2027
150.0
0.6690%
Interest rate swap 2
February 28, 2025
0.7630%
For the interest rate swap contracts in effect at June 30, 2026, 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 months ended June 30, 2026 or June 30, 2025.
Failure 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 continue to be 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.
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. We have reflected changes in the fair value of the plan asset and liability in Selling and administrative expenses on the Consolidated Statements of Income.
The carrying values of cash and cash equivalents, receivables, accounts payable and accrued expenses approximate fair value due to the short maturity of those instruments. The carrying value of long-term debt approximates 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).
11
Note 5 – Debt
The table below presents the components of our debt (in thousands):
Variable rate debt
Short-term borrowings
4,612
Current portion of long-term debt:
Australian credit facility
12,774
Long-term portion:
Revolving credit facility
424,400
354,800
Term loan under credit facility
500,000
450,000
Term facility
90,000
Receivables securitization facility
315,500
320,100
Less: financing costs, net
2,627
2,367
Total debt
1,340,716
1,229,919
Our accounts receivable securitization facility (the Receivables Facility) provides for the sale 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, which matures on October 30, 2026, 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.
12
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 to whom we sell 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 of our “Notes to Consolidated Financial Statements,” included in Part II, Item 8 in our 2025 Annual Report on Form 10-K and in Note 1 above.
The 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):
Compensation expenses
141,245
135,815
265,791
256,184
Freight out expenses
28,190
28,650
46,479
45,772
Other selling and administrative expenses
103,648
98,026
208,073
195,367
Reconciliation:
Income before income taxes and equity in earnings
The tables below present supplemental information for our segment (in thousands):
11,385
9,964
2,265
2,165
13
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion in conjunction with the accompanying interim Consolidated Financial Statements and notes, the Consolidated Financial Statements and notes in our 2025 Annual Report on Form 10-K and Management’s Discussion and Analysis in our 2025 Annual Report on Form 10-K.
Forward-Looking Statements
This report contains forward-looking information that involves risks and uncertainties. Our forward-looking statements express our current expectations or forecasts of possible future results or events, including projections of earnings and other financial performance measures, statements of management’s expectations regarding our strategic, operational and capital allocation plans and objectives, management’s views on economic, industry, competitive, technological and regulatory conditions and other forecasts of trends and other matters. Forward-looking statements speak only as of the date of this filing, and we undertake no obligation to publicly update or revise such statements to reflect new circumstances or unanticipated events as they occur. You can identify these statements by the fact that they do not relate strictly to historic or current facts and often use words such as “anticipate,” “estimate,” “expect,” “intend,” “believe,” “will,” “outlook,” “project,” “may,” “can,” “plan,” “target,” “potential,” “should” and other words and expressions of similar meaning.
No assurance can be given that our expected results in any forward-looking statement will be achieved, and our actual results may differ materially due to one or more factors, including the sensitivity of our business to weather conditions; changes in economic conditions, consumer discretionary spending, the housing market, inflation or interest rates; our ability to maintain favorable relationships with suppliers and manufacturers; competition from other leisure product alternatives or mass merchants; our ability to continue to execute our growth strategies; changes in the regulatory environment; new or additional taxes, duties or tariffs; excess tax benefits or deficiencies recognized under ASU 2016-09 and other risks detailed in our 2025 Annual Report on Form 10-K, as updated by our subsequent filings with the U.S. Securities and Exchange Commission. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
OVERVIEW
Financial Results
Second quarter ended June 30, 2026 compared to the second quarter ended June 30, 2025
Net sales increased 2% to $1.8 billion in the second quarter of 2026. The increase reflected benefits from inflation, steady maintenance activity and improved sales of building materials amid a muted discretionary spending environment.
Gross profit increased 1% to $540.8 million. Gross margin decreased 30 basis points to 29.7% from 30.0% in the same period of 2025, primarily due to elevated inbound freight costs and changes in customer mix. These headwinds were partially offset by benefits from supply chain initiatives.
Selling and administrative expenses (operating expenses) increased 4% to $273.1 million from $262.5 million in the same period in 2025, primarily driven by $8.3 million of CEO transition costs. CEO transition costs comprise $6.3 million of non-cash share-based compensation expense for awards previously granted but not fully amortized and $2.0 million of cash transition costs. Adjusting for the impact of CEO transition costs, operating expenses increased 1% to $264.8 million.
Operating income decreased 2% to $267.7 million compared to $272.7 million in the same period last year. Adjusted operating income increased 1% to $275.9 million.
Net income decreased 3% to $188.1 million from $194.3 million in the second quarter of 2025. Adjusted net income increased 1% to $195.7 million compared to $194.2 million in the three months ended June 30, 2025.
Earnings per diluted share was $5.17 in both periods. Adjusted earnings per diluted share increased 4% to $5.38 compared to $5.17 in 2025.
See “Results of Operations” below for definitions of our non-GAAP measures and reconciliations of our non-GAAP measures to GAAP measures.
References to product line and product category data throughout this report generally reflect data related to the North American swimming pool market, as this data is more readily available for analysis and represents the largest component of our operations.
In this Form 10-Q and other of our public disclosures, we estimate the impact that favorable or unfavorable weather had on our operating results. In connection with these estimates, we make several assumptions and rely on various third-party sources. It is possible that others assessing the same data could reach conclusions that differ from ours.
Financial Position and Liquidity
As of June 30, 2026, total net receivables, including pledged receivables, increased 11% compared to June 30, 2025, primarily due to higher sales in June 2026. Our days sales outstanding (DSO), as calculated on a trailing four quarters basis, was 27.6 days at June 30, 2026 and 25.8 days at June 30, 2025. Our allowance for doubtful accounts balance was $8.5 million at June 30, 2026 and $8.3 million at June 30, 2025.
Our inventory balance was $1.4 billion at June 30, 2026, an increase of $48.5 million, or 4%, from June 30, 2025. The 4% year-over-year increase in inventory is down from the 14% increase reported in the first quarter of 2026, as we sell through our peak-season stocking levels. Our inventory levels reflect the impact of inflation and the addition of new and acquired sales centers over the past twelve months. Our inventory reserve was $24.1 million at June 30, 2026 and $27.7 million at June 30, 2025. Our inventory turns, as calculated on a trailing four quarters basis, was 2.6 times at June 30, 2026 and 2.8 times at June 30, 2025.
Total debt outstanding increased $110.8 million to $1.3 billion at June 30, 2026, which helped to fund $266.7 million of open market share repurchases over the past twelve months.
For additional information, see “Liquidity and Capital Resources” below.
Current Trends and Outlook
For a detailed discussion of trends impacting us through 2025, see the “Current Trends and Outlook” section of Management’s Discussion and Analysis included in Part II, Item 7 of our 2025 Annual Report on Form 10-K.
We expect sales for the full year of 2026 to increase by a low single-digit percentage compared to 2025.
We project gross margin for the full year of 2026 to be approximately 30 basis points below our 2025 gross margin of 29.7%. We expect our gross margin to be negatively impacted by higher inbound freight cost in the current year, partially offset by benefits from effective supply chain management, advantageous pricing strategies and increased private label sales. The prior year comparison is also impacted by margin benefit from mid-season price increases in the prior year. Our actual gross margin will depend on changes in product and customer mix and on amounts and timing of sales and inflationary price increases.
We expect to leverage our existing infrastructure and strategically manage discretionary spending while providing for a modest recovery in incentive compensation compared to the prior year. We project operating expenses for 2026 will increase approximately 3% compared to 2025, or 2% to 3% without the $8.3 million of CEO transition costs.
In 2026, we expect our effective tax rate will approximate 25.0% without the impact of Accounting Standards Update ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. Under ASU 2016-09, we expect our effective tax rate will fluctuate from quarter to quarter, particularly in periods when employees elect to exercise their vested stock options or when restrictions on share-based awards lapse. We recorded a $0.7 million, or $0.02 per diluted share, tax benefit from ASU 2016-09 for the six months ended June 30, 2026.
For 2026, we project diluted EPS in the range of $10.66 to $10.96, or $10.87 to $11.17, excluding the impact of CEO transition costs and including the impact of year-to-date tax GAAP benefits of $0.02. We may recognize additional tax benefits related to stock option exercises in 2026 from grants that expire in future years. We have not included any expected tax benefits in our full year guidance beyond what we have recognized as of June 30, 2026.
During 2026, we expect to continue to use cash for the payment of cash dividends as and when declared by our Board of Directors (Board) and to fund opportunistic share repurchases at our discretion.
The forward-looking statements in the foregoing section and elsewhere in this report are based on current market conditions and our current business plans, speak only as of the filing date of this report, are based on several assumptions and are subject to significant risks and uncertainties, including the risks detailed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 within the “Forward-Looking Statements” section.
15
RESULTS OF OPERATIONS
As of June 30, 2026, we conducted operations through 455 sales centers in North America, Europe and Australia. For the three and six months ended June 30, 2026, approximately 95% of our net sales were from our operations in North America.
The following table presents information derived from the Consolidated Statements of Income expressed as a percentage of net sales:
100.0
%
70.3
70.0
70.6
29.7
30.0
29.4
15.0
14.7
17.6
17.4
15.3
11.8
12.3
0.8
0.7
0.9
13.9
14.6
10.9
11.4
Note: Due to rounding, percentages presented in the table above may not add to Operating income or Income before income taxes and equity in earnings.
We have included the results of operations from acquisitions in 2025, as further discussed in Note 3, in our consolidated results since the acquisition dates.
For definitions of our non-GAAP measures and reconciliations of our non-GAAP measures to GAAP measures, see page 20.
Base Business
When calculating our base business results, we exclude for a period of 15 months sales centers that are acquired, opened in new markets or closed. We also exclude consolidated sales centers when we do not expect to maintain the majority of the existing business and existing sales centers that are consolidated with acquired sales centers.
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, we include acquired, consolidated and new market sales centers in the base business calculation including the comparative prior year period.
We have not provided separate base business income statements within this Form 10-Q as our base business results for the three and six months ended June 30, 2026 closely approximated consolidated results. Excluded sales centers contributed less than 1% to the change in our reported net sales.
The table below summarizes the changes in our sales center count during the first six months of 2026:
December 31, 2025
456
Acquired locations
-
New location
Consolidated locations
(2
June 30, 2026
455
16
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Net Sales
(in millions)
Change
1,822.9
1,784.5
38.4
2%
Net sales of $1.8 billion in the second quarter of 2026 increased 2% compared to the second quarter of 2025. This growth was supported by inflationary price increases, steady maintenance volumes and improved sales of building materials.
The following factors impacted our sales growth during the quarter and are listed in order of estimated magnitude:
In the second quarter of 2026, sales of equipment for maintenance, renovation and new construction activities, including swimming pool heaters, pumps, lights, filters and automation devices, increased 3% versus the same period last year, and collectively represented approximately 29% of net sales for the period. Sales of building materials, which are primarily used in new pool construction and remodeling, increased 4% compared to the same period in 2025 and represented approximately 12% of net sales in the second quarter of 2026.
Gross Profit
540.8
535.2
5.6
1%
Gross margin
Gross profit increased 1% in the second quarter of 2026 compared to the second quarter of 2025. Gross margin decreased 30 basis points to 29.7% from 30.0% in the second quarter of 2025, driven primarily by higher inbound freight costs and an unfavorable shift in customer mix, partially offset by supply chain initiatives.
Operating Expenses
273.1
262.5
10.6
4%
Operating expenses as a % of net sales
Selling and administrative expenses in the second quarter of 2026 increased 4% compared to the second quarter of 2025, primarily driven by $8.3 million of CEO transition costs. CEO transition costs comprise $6.3 million of non-cash share-based compensation expense for awards previously granted but not yet fully amortized and $2.0 million of cash transition costs. Adjusting for the impact of CEO transition costs, operating expenses increased 1% to $264.8 million.
Interest and Other Non-Operating Expenses, Net
Interest and other non-operating expenses, net for the second quarter of 2026 increased $2.1 million compared to the second quarter of 2025, primarily due to an increase in average outstanding debt between periods. Our weighted average effective interest rate decreased to 4.2% in the second quarter of 2026 compared to 4.6% in the second quarter of 2025 on average outstanding debt of $1.3 billion and $1.1 billion for the respective periods.
17
Our effective income tax rate was 25.8% for the three months ended June 30, 2026 compared to 25.4% for the three months ended June 30, 2025.
Net Income and Earnings Per Share
Net income decreased to $188.1 million in the second quarter of 2026 compared to $194.3 million in the second quarter of 2025. Adjusted net income increased 1% to $195.7 million compared to $194.2 million in the three months ended June 30, 2025.
Earnings per diluted share was $5.17 in both periods. Adjusted earnings per diluted share increased 4% to $5.38 compared to $5.17 in the second quarter of 2025.
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
2,961.0
2,856.1
104.9
Net sales for the first six months of 2026 increased 4% from the same period last year. The following factors impacted our sales in the first six months of 2026 and are listed in order of estimated magnitude:
In the first six months of 2026, sales of equipment for maintenance, renovation and new construction activities, including swimming pool heaters, pumps, lights, filters and automation devices, increased approximately 5% compared to the same period last year and collectively represented 31% of net sales in the first six months of 2026. The increase in sales of equipment reflects price increases and stable maintenance volumes. Sales of building materials, which are primarily used in new pool construction and remodeling, increased approximately 5% compared to the first six months of 2025 and represented approximately 12% of net sales in the first six months of 2026.
870.6
847.5
23.1
3%
Gross profit increased 3% in the first six months of 2026 from the first six months of 2025. Gross margin declined 30 basis points to 29.4% in the six months ended June 30, 2026 compared to 29.7% in the first six months of 2025. Gross margin in the first six months of 2026 was impacted by increases in freight costs and an unfavorable shift in customer mix, partially offset by benefits from our supply chain optimization efforts.
520.3
497.3
23.0
5%
Operating expenses for the six months ended June 30, 2026 were up 5% compared to the prior year period, primarily driven by $8.3 million of CEO transition costs. Adjusted operating expenses increased 3% to $512.1 million. The remaining increase largely reflects broad-based inflation and higher base wages and facility costs to start the year.
Interest and other non-operating expenses, net for the first six months of 2026 increased $3.3 million compared to the same period last year, primarily due to increases in average outstanding debt between periods. Our weighted average effective interest rate decreased to 4.2% from 4.5% for the respective periods on average outstanding debt of $1.2 billion for the six months ended June 30, 2026 and $1.0 billion for the six months ended June 30, 2025.
19
Our effective income tax rate was 25.4% for the six months ended June 30, 2026 compared to 24.2% for the six months ended June 30, 2025. We recorded a $0.7 million, or $0.02 per diluted share, tax benefit from ASU 2016-09 in the six months ended June 30, 2026 compared to a $3.9 million, or $0.10 per diluted share, tax benefit in the same period of 2025.
Net income decreased 3% to $241.3 million for the six months ended June 30, 2026 compared to $247.8 million for the six months ended June 30, 2025. Adjusted net income increased by 2% to $248.1 million compared to $243.9 million in the six months ended June 30, 2025.
Earnings per diluted share increased 1% to $6.61 compared to $6.57 in the same period of 2025. Adjusted earnings per diluted share increased 5% to $6.80 from $6.47 in the first six months of 2025.
Reconciliation of Non-GAAP Financial Measures
The non-GAAP measures described below should be considered in the context of all of our other disclosures in this Form 10-Q.
Adjusted Income Statement Information
We have included adjusted operating expenses, adjusted operating income, adjusted net income and adjusted diluted EPS, which are non-GAAP financial measures, in this Form 10-Q as supplemental disclosures because we believe these measures are useful to management, investors and others in assessing our year-over-year operating performance. We believe these measures should be considered in addition to, not as a substitute for, operating expenses, operating income, net income and diluted EPS presented in accordance with GAAP and in the context of our other disclosures in this Form 10-Q. Other companies may calculate these non-GAAP financial measures differently than we do, which may limit their usefulness as comparative measures.
The table below presents a reconciliation of operating expenses to adjusted operating expenses.
Operating expenses
CEO transition costs
(8,262
Adjusted operating expenses
264,821
512,081
The table below presents a reconciliation of operating income to adjusted operating income.
8,262
Adjusted operating income
275,941
358,552
20
The table below presents a reconciliation of net income to adjusted net income.
Tax impact
(738
ASU 2016-09 tax deficiency (benefit)
60
(39
(720
(3,884
Adjusted net income
195,673
194,219
248,123
243,919
The table below presents a reconciliation of diluted EPS to adjusted diluted EPS.
Diluted EPS
After-tax CEO transition costs
0.21
ASU 2016-09 tax benefit
(0.02
(0.10
Adjusted diluted EPS
5.38
6.80
6.47
Seasonality and Quarterly Fluctuations
Our business is seasonal. In general, sales and operating income are highest during the second and third quarters, which represent the peak months of both swimming pool use and installation and irrigation and landscape installations and maintenance. Sales are lower during the first and fourth quarters. In 2025, we generated approximately 61% of our net sales and 78% of our operating income in the second and third quarters of the year.
We typically experience a build-up of product inventories and accounts payable during the winter months in anticipation of the peak selling season. Excluding borrowings to finance acquisitions, dividend payments and share repurchases, our peak borrowing usually occurs during the second quarter, primarily because extended payment terms offered by certain of our suppliers are typically payable in April, May and June, while our peak accounts receivable collections typically occur in June, July and August.
The following table presents certain unaudited quarterly income statement and balance sheet data for the most recent eight quarters to illustrate seasonal fluctuations in these amounts. We believe this information reflects all normal and recurring adjustments considered necessary for a fair presentation of this data. The results of any one or more quarters are not necessarily a good indication of results for an entire fiscal year or of continuing future trends for a variety of reasons, including the seasonal nature of our business and the impact of new and acquired sales centers.
QUARTER
(in thousands)
2024
Second
First
Fourth
Third
Statement of Income Data
1,138,014
982,209
1,451,131
1,071,526
987,480
1,432,879
329,870
295,745
429,183
312,369
290,244
416,403
82,610
52,008
177,987
77,538
60,651
176,353
31,587
127,013
37,300
125,701
Balance Sheet Data
Total receivables, net
637,861
559,780
347,803
443,609
576,804
497,076
314,861
425,693
1,660,765
1,223,809
1,460,680
1,289,300
1,180,491
1,001,129
457,319
890,167
525,235
401,702
1,247,719
1,199,453
1,062,002
1,025,090
950,356
923,829
21
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. 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.
Weather is one of the principal external factors affecting our business. The table below presents some of the possible effects resulting from various weather conditions.
Weather
Possible Effects
Hot and dry
•
Increased purchases of chemicals and supplies
for existing swimming pools
Increased purchases of above-ground pools and
irrigation and lawn care products
Unseasonably cool weather or extraordinary amounts
Fewer pool and irrigation and landscape
of rain
installations
Decreased purchases of chemicals and supplies
Decreased purchases of impulse items such as
above-ground pools and accessories
Unseasonably early warming trends in spring/late cooling
A longer pool and landscape season, thus positively
trends in fall
impacting our sales
(primarily in the northern half of the U.S. and Canada)
Unseasonably late warming trends in spring/early cooling
A shorter pool and landscape season, thus negatively
Weather Impacts on 2026 and 2025 Results
Weather conditions in the second quarter of 2026 were characterized by above-average temperatures across many of our markets, with regional variability in precipitation. While severe storms and periods of heavy rainfall created localized disruptions in portions of the Midwest and South, warmer and drier conditions persisted across much of the West. Overall, the net impact on our second quarter results was broadly neutral. During the second quarter of 2025, the net impact of weather conditions were also generally neutral, with above-average temperatures being offset by localized disruptions from severe storms, flash flooding and tornado activity.
Weather conditions in the first quarter of 2026 were generally warmer than average across our key markets, particularly in January and March. February conditions were more variable, with intermittent cold outbreaks and winter storms affecting portions of the Midwest and Northeast. Precipitation patterns were mixed but trended drier overall, especially across the Plains, Southwest and southern regions. Overall, the warmer weather conditions generally benefited maintenance and discretionary activities during the quarter. In comparison, weather conditions during the first quarter of 2025 were mixed across our key markets, as early January snowstorms and overall cooler temperatures through much of February negatively impacted early season sales activity, which was partially offset by warmer and drier weather in March.
CRITICAL ACCOUNTING ESTIMATES
We prepare our Consolidated Financial Statements in accordance with U.S. generally accepted accounting principles (GAAP), which require management to make estimates and assumptions that affect reported amounts and related disclosures. Management identifies critical accounting estimates as:
Management has discussed the development, selection and disclosure of our critical accounting estimates with the Audit Committee of our Board. For a description of our critical accounting estimates, please see the “Critical Accounting Estimates”
22
section included in Part II, Item 7 in our 2025 Annual Report on Form 10-K. We have not changed any of these policies from those previously disclosed in that report.
Recent Accounting Pronouncements
See Note 1 of “Notes to Consolidated Financial Statements,” included in Part I, Item 1 of this Form 10-Q for discussion of recent accounting pronouncements.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity is defined as the ability to generate adequate amounts of cash to meet short-term and long-term cash needs. We assess our liquidity in terms of our ability to generate cash to fund our operating activities, taking into consideration the seasonal nature of our business. Significant factors which could affect our liquidity include the following:
Our primary capital needs are seasonal working capital obligations, debt repayment obligations and other general corporate initiatives, including acquisitions, opening new sales centers, technology-related investments, dividend payments and discretionary share repurchases. Our primary working capital obligations are for the purchase of inventory, payroll, rent, other facility costs and selling and administrative expenses. Our working capital obligations fluctuate during the year, driven primarily by seasonality and the timing of inventory purchases. Our primary sources of working capital are cash from operations supplemented by bank borrowings, which have historically been sufficient to support our growth and finance acquisitions. We have funded our capital expenditures and share repurchases in substantially the same manner.
We prioritize our use of cash based on investing in our business, maintaining a prudent capital structure, including a modest amount of debt, and returning cash to our shareholders through dividends and share repurchases. Our specific priorities for the use of cash are as follows:
We focus our capital expenditure plans based on the needs of our existing sales centers and the opening of new sales centers. Our capital spending primarily relates to leasehold improvements, delivery and service vehicles and information technology. In recent years, we have increased our investment in technology and automation enabling us to operate more efficiently and better serve our customers.
Historically, our capital expenditures have averaged roughly 1.0% of net sales. Capital expenditures were 1.1% of net sales in 2025 and 2024. Based on management’s current plans, we project capital expenditures for 2026 will be approximately 1.0% to 1.5% of net sales.
23
Sources and Uses of Cash
The following table summarizes our cash flows (in thousands):
Used in operating activities
Used in investing activities
(Used in) provided by financing activities
Net cash used in operations was $0.7 million in the first six months of 2026 compared to $1.5 million in the first six months of 2025.
Net cash used in investing activities for the first six months of 2026 increased $7.6 million compared to the first six months of 2025, primarily due to a $9.2 million increase in net capital expenditures.
Net cash used in financing activities was $37.8 million for the first six months of 2026 compared to net cash provided by financing activities of $33.1 million for the first six months of 2025, primarily due to a decrease of $138.5 million in net debt proceeds between periods, partially offset by a $74.2 million decrease in share repurchases in the first six months of 2026 versus the same period in 2025.
Future Sources and Uses of Cash
To supplement cash from operations as our primary source of working capital, we plan to continue to utilize our three major credit facilities, which are our Credit Facility, Term Facility and our Receivables Facility. For additional details regarding these facilities, see the summary descriptions below and more complete descriptions in Note 5 of our “Notes to Consolidated Financial Statements,” included in Part II, Item 8 in our 2025 Annual Report on Form 10-K and Note 5 of “Notes to Consolidated Financial Statements” included in Part I, Item 1 of this Form 10-Q.
Credit Facility
Our Credit Facility provides for $1.3 billion in borrowing capacity consisting of an $800.0 million revolving credit facility and a $500.0 million term loan facility. The Credit Facility also includes an accordion feature permitting us to request one or more incremental term loans or revolving credit facility commitment increases up to $250.0 million and sublimits for the issuance of swingline loans and standby letters of credit. We pay interest on revolving and term loan borrowings under the Credit Facility at a variable rate based on the one-month term secured overnight financing rate (Term SOFR), plus an applicable margin. The term loan requires quarterly amortization payments commencing on September 30, 2027 with all remaining principal due on September 30, 2029. We intend to continue to use the Credit Facility for general corporate purposes, for future share repurchases and to fund future growth initiatives.
At June 30, 2026, there was $424.4 million of revolving borrowings outstanding, a $500.0 million term loan outstanding, $15.7 million of standby letters of credit outstanding and $359.9 million available for borrowing under the Credit Facility. The weighted average effective interest rate for the Credit Facility as of June 30, 2026 was approximately 3.9%, excluding commitment fees and including the impact of our interest rate swaps.
Term Facility
Our Term Facility provides for $90.0 million in borrowing capacity. We pay interest on borrowings under the Term Facility at a variable rate based on one-month Term SOFR, plus an applicable margin. The Term Facility is repaid in quarterly installments of 1.250% of the Term Facility beginning in the third quarter of 2027, with the final principal repayment due on September 30, 2029. We may prepay amounts outstanding under the Term Facility without penalty other than interest breakage costs.
At June 30, 2026, the Term Facility had an outstanding balance of $90.0 million at a weighted average effective interest rate of 4.9%.
24
Receivables Facility
Our two-year Receivables Facility offers us a lower-cost form of financing. Under this facility, we can borrow up to $375.0 million between April through May and from $210.0 million to $350.0 million during the remaining months of the year. We pay interest on borrowings under the Receivables Facility at a variable rate based on one-month Term SOFR, plus an applicable margin. The Receivables Facility matures on October 30, 2026. 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.
The Receivables Facility provides 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. Upon payment of the receivables by customers, rather than remitting to the financial institutions the amounts collected, we retain such collections as proceeds for the sale of new receivables until payments become due.
At June 30, 2026, there was $315.5 million outstanding under the Receivables Facility at a weighted average effective interest rate of 4.6%, excluding commitment fees.
Financial Covenants
Financial covenants of the Credit Facility, Term Facility and Receivables Facility include maintenance of a maximum average total leverage ratio and a minimum fixed charge coverage ratio, which are our most restrictive financial covenants. As of June 30, 2026, the calculations of these two covenants are detailed below:
The Credit Facility and Term Facility limit the declaration and payment of dividends on our common stock to a manner consistent with past practice, provided no default or event of default has occurred and is continuing, or would result from the payment of dividends. We may declare and pay quarterly dividends so long as (i) the amount per share of such dividends is not greater than the most recently publicly announced amount of dividends per share and (ii) our Average Total Leverage Ratio is less than 3.25 to 1.00 both immediately before and after giving pro forma effect to such dividends. Under the Credit Facility and Term Facility, we may repurchase shares of our common stock provided no default or event of default has occurred and is continuing, or would result from the repurchase of shares, and our maximum average total leverage ratio (determined on a pro forma basis) is less than 3.25 to 1.00.
Other covenants in each of our credit facilities include restrictions on our ability to grant liens, incur indebtedness, make investments, merge or consolidate, and sell or transfer assets. Failure to comply with any of our financial covenants or any other terms of our credit facilities could result in, among other things, higher interest rates on our borrowings or the acceleration of the maturities of our outstanding debt.
We utilize interest rate swap contracts to reduce our exposure to fluctuations in variable interest rates for future interest payments on our variable rate borrowings. Interest expense related to the notional amounts under all swap contracts is based on fixed rates plus the applicable margin on the respective borrowings.
As of June 30, 2026, we had two interest rate swap contracts in place, each of which has the effect of converting our exposure to variable interest rates on a portion of our variable rate borrowings to fixed interest rates. For more information, see Note 4 of “Notes to Consolidated Financial Statements” included in Part I, Item 1 of this Form 10-Q.
25
Compliance and Future Availability
As of June 30, 2026, we were in compliance with all covenants and financial ratio requirements under our Credit Facility, our Term Facility and our Receivables Facility. We believe we will remain in compliance with all material covenants and financial ratio requirements throughout the next twelve months. For additional information regarding our debt arrangements, see Note 5 of “Notes to Consolidated Financial Statements,” included in Part II, Item 8 of our 2025 Annual Report on Form 10-K, as updated by Note 5 of “Notes to Consolidated Financial Statements,” included in Part I, Item 1 of this Form 10-Q.
We believe we have adequate availability of capital to fund present operations and the current capacity to finance any working capital needs that may arise. We continually evaluate potential acquisitions and hold discussions with acquisition candidates. If suitable acquisition opportunities arise that would require financing, we believe that we would have the ability to finance any such transactions.
As of July 23, 2026, we were authorized to purchase up to $580.0 million of our common stock under our current Board-approved share repurchase program. We expect to continue to repurchase shares on the open market from time to time subject to market conditions. We plan to fund these repurchases with cash provided by operations and borrowings under the above-described credit facilities.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
There have been no material changes in our exposure to interest rate risk during the six months ended June 30, 2026 from what we reported in our 2025 Annual Report on Form 10-K. For additional information on our interest rate risk, refer to “Quantitative and Qualitative Disclosures about Market Risk” included in Part II, Item 7A in our 2025 Annual Report on Form 10-K.
Currency Risk
There have been no material changes in our exposure to currency risk during the six months ended June 30, 2026 from what we reported in our 2025 Annual Report on Form 10-K. For additional information on our currency risk, refer to “Quantitative and Qualitative Disclosures about Market Risk” included in Part II, Item 7A in our 2025 Annual Report on Form 10-K.
The term “disclosure controls and procedures” is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the Act). The rules refer to the controls and other procedures designed to ensure that information required to be disclosed in reports that we file or submit under the Act is (1) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. As of June 30, 2026, management, including our CEO and CFO, performed an evaluation of the effectiveness of our disclosure controls and procedures. Based on that evaluation, management, including our CEO and CFO, concluded that as of June 30, 2026, our disclosure controls and procedures were effective.
We maintain a system of internal control over financial reporting that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Based on the most recent evaluation, we have concluded that no change in our internal control over financial reporting occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
The effectiveness of our system of disclosure controls and procedures or internal control over financial reporting is subject to certain limitations, including the exercise of judgment in designing, implementing and evaluating such systems, the assumptions used in identifying the likelihood of future events and the inability to eliminate misconduct completely. As a result, there can be no assurance that our control systems will detect all errors or fraud. By their nature, our system can provide only reasonable assurance regarding management's control objectives.
From time to time, we are subject to various claims and litigation arising in the ordinary course of business, including product liability, personal injury, commercial, contract and employment matters. While the outcome of any litigation is inherently unpredictable, based on currently available facts and our current insurance coverages, we do not believe that the ultimate resolution of any of these matters will have a material adverse impact on our financial condition, results of operations or cash flows.
Our operations and financial results are subject to various risks and uncertainties, which could adversely affect our business, financial condition or future results. We urge you to carefully consider (i) the other information set forth in this report and (ii) the risk factors discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our risk factors from those disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.
The table below summarizes the repurchases of our common stock in the second quarter of 2026:
Period
Total Number of Shares Purchased (1)
Average Price Paid per Share
Total Number ofShares Purchasedas Part of Publicly Announced Plan (2)
Maximum ApproximateDollar Value of SharesThat May Yet bePurchased Under the Plan (2)
April 1-30, 2026
9,866
202.72
600,000,000
May 1-31, 2026
56,457
177.18
56,441
590,000,100
June 1-30, 2026
53,524
186.81
580,001,073
119,847
119,831
Our Board may declare future dividends at its discretion, after considering various factors, including our earnings, capital requirements, financial position, contractual restrictions and other relevant business considerations. For a description of restrictions on dividends in our Credit Facility and Term Facility, see the “Liquidity and Capital Resources” section of Management’s Discussion and Analysis in Part I, Item 2 of this Form 10-Q. We cannot assure shareholders or potential investors that dividends will be declared or paid any time in the future if our Board determines that there is a better use of our funds.
During the quarter ended June 30, 2026, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408(a) of Regulation S-K).
Exhibits filed as part of this report are listed below.
Incorporated by Reference
No.
Filed/ Furnished
with this
Form
File No.
Date Filed
3.1
Restated Certificate of Incorporation of the Company.
10-Q
000-26640
8/9/2006
3.2
Amended and Restated Bylaws of the Company.
8-K
10/25/2023
4.1
Form of certificate representing shares of common stock of the Company.
5/19/2006
10.1
Separation Agreement and General Release, dated May 8, 2026.
8-K/A
5/8/2026
31.1
Certification by Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
31.2
Certification by Chief Executive Officer pursuant to Rule 13a-14(a) and 15d‑14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification by Chief Executive Officer and Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS
+
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)
+ Attached as Exhibit 101 to this report are the following items formatted in iXBRL (Inline Extensible Business Reporting Language):
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on July 29, 2026.
By:
/s/ Melanie M. Hart
Melanie M. Hart
Senior Vice President and Chief Financial Officer, and duly authorized signatory on behalf of the registrant