| General
We sell everything necessary to build, maintain,
install and overhaul residential and small commercial swimming pools,
including:
- swimming pool equipment;
- parts and supplies;
- chemicals;
- cleaners;
- packaged pools;
- liners;
- filters;
- heaters;
- pumps;
- lights;
- repair parts; and
- other equipment.
Since 1999, we have significantly increased our
offering of complementary products including:
- building materials;
- electrical supplies;
- toys and games;
- water features such as fountains; and
- spas and spa accessories.
We primarily sell to:
- swimming pool remodelers and builders;
- retail swimming pool stores; and
- swimming pool repair and service companies.
These customers are mostly small,
family owned businesses with relatively limited capital resources.
We maintain a strict credit policy. In the past, losses from customer
receivables have been within our expectations.
Our expenses consist primarily
of (i) the cost of products purchased for resale and (ii) operating
expenses which are primarily related to labor, occupancy, freight,
marketing, and selling and administrative expenses. We compete for
business and may respond to competitive pressures by lowering prices
in order to maintain our market share. Such measures adversely affect
our gross margins and operating results.
We calculate same store
growth by excluding the following service centers from the calculation
for 15 months:
- New service centers opened within the
past 15 months;
- Service centers acquired within the past
15 months;
- Service centers consolidated with acquired
service centers; and
- Service centers that experience market disruption
due to their location in the immediate market areas of those mentioned
above.
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