{
  "ticker": "POOL",
  "company": "POOL",
  "filing_type": "10-K",
  "year_current": "2026",
  "year_prior": "2025",
  "summary": {
    "added": 103,
    "removed": 5,
    "modified": 12,
    "unchanged": 8,
    "total_current": 123,
    "total_prior": 25
  },
  "source": "SEC EDGAR",
  "url": "https://riskdiff.com/pool/2026-vs-2025/",
  "markdown_url": "https://riskdiff.com/pool/2026-vs-2025/index.md",
  "json_url": "https://riskdiff.com/pool/2026-vs-2025/index.json",
  "generated": "2026-06-01",
  "ai_summary": null,
  "risks": [
    {
      "status": "ADDED",
      "current_title": "Changes in our customer base or customer preferences could change the mix of products we sell and reduce our profitability.",
      "prior_title": null,
      "current_body": "Changes in our customer base could impact our revenues or gross margin, reducing our profitability. Our business could be adversely impacted if (i) consolidation of our customers leads to changes in purchasing habits, (ii) more people choose to live in urban settings, rented space or housing complexes with a single community pool or (iii) more homeowners bypass our customers by directly purchasing their own supplies or undertaking their own improvement projects. Our gross margins vary across our products and can change over time due to a variety of factors, including changes in the mix of products we sell. We derive higher revenues or profits from certain of our products compared to others. If customers or end-users opt to use an increased amount of lower-revenue or lower-margin products, our results of operations would be adversely affected."
    },
    {
      "status": "ADDED",
      "current_title": "We use AI in our business, which could result in reputational harm, competitive harm and legal liability, and adversely affect our business, results of operation and financial condition.",
      "prior_title": null,
      "current_body": "As part of our broader digital transformation strategy, we are integrating artificial intelligence to support our internal business functions and exploring additional uses for the future. AI presents risks and challenges and may result in unintended consequences, including producing inaccurate data. AI algorithms and training methodologies may be flawed. While we aim to develop and use AI responsibly, we may be unsuccessful in identifying or resolving issues and risks before they arise. The AI-related legal and regulatory landscape is evolving and remains uncertain and may be inconsistent from jurisdiction to jurisdiction. Our obligations to comply with the evolving legal and regulatory landscape could entail significant costs or limit our ability to incorporate certain AI capabilities into our operations and products. AI-related issues, deficiencies and failures could also give rise to legal or regulatory action (including with respect to proposed legislation regulating AI in jurisdictions such as the European Union and others, and as a result of new and different applications of existing data protection, privacy, intellectual property and other laws), damage our reputation or otherwise materially harm our business."
    },
    {
      "status": "ADDED",
      "current_title": "Lapses in our disclosure controls and procedures or internal control over financial reporting could materially and adversely affect us.",
      "prior_title": null,
      "current_body": "We maintain disclosure controls and procedures designed to provide reasonable assurances regarding the accuracy and completeness of our reports filed with the SEC and internal control over financial reporting designed to provide reasonable assurance regarding the reliability and compliance of our financial statements with U.S. generally accepted accounting principles. We cannot assure you these measures will be effective. Item 1B. Unresolved Staff Comments None. 20 20 Item 1C. CybersecurityRisk Management and StrategyOur cybersecurity program, which is primarily documented in our business interruption and incident response policy, is designed to assess, identify and manage material risks from cybersecurity threats. Our program leverages components from the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF), which we use to help us identify, assess and manage cybersecurity risks relevant to our business. Our cybersecurity program is a component of our overall enterprise risk program. We deploy multiple strategies and dedicate significant resources toward systems designed to identify, assess, manage, mitigate and respond to cybersecurity threats. We also consistently strive to improve the detection and response capabilities of our cybersecurity program. To do this, we monitor best cybersecurity practices and endeavor to incorporate those in our own cybersecurity program.Our cybersecurity policies and procedures include the controls and technology we use to identify, assess and respond to cybersecurity threats and incidents. These policies and procedures also focus on identifying vulnerabilities in our internal and external environments and remediating those vulnerabilities. To combat cybersecurity risk, we focus on proactive procedures such as patch management and emphasize the importance of cybersecurity across our organization. We provide our employees quarterly cybersecurity training courses that expose them to cybersecurity risks and threat actor tactics and we conduct simulated phishing exercises to test and educate employees on real-world threats. We evaluate our controls and response protocols at least twice a year using external third-party assessors and consultants in both advisory and adversarial engagements. These third-party experts are familiar with our systems and could be retained in the event of a significant incident to assist us in evaluating and responding to such an incident. We also regularly test our environment as part of our focus on identifying and eliminating vulnerabilities. We incorporate the lessons learned from these engagements into our cybersecurity program. Recognizing the risks posed by external partners, we have implemented a third-party risk management program, which includes due diligence assessments, contractual safeguards, and regular monitoring of vendors and partners with access to our systems or data; however, we cannot ensure in all circumstances that their defensive efforts will be successful.Like most large organizations, we face constant and dynamic risks related to cybersecurity. The emergence of artificial intelligence and its role in accelerating cybersecurity attacks will only make this area of risk more dynamic and difficult to prevent. In recent years we have faced, and expect to continue to face, various attempted cyberattacks including those that bear the hallmarks of being produced through the use of AI. We continue to observe attacks that are well planned and sophisticated. To date, we are not aware of any cybersecurity incident or threat that materially affected or could reasonably be anticipated to materially affect our business, results of operations or financial condition. However, we cannot guarantee that we will not experience such an incident in the future. For a further description of these risks, see “Risk Factors – Risks Relating to Technology, Cybersecurity, Artificial Intelligence and Data Privacy,” included in Item 1A of this Form 10-K, which should be read in conjunction with this Item 1C. GovernanceOur Board of Directors (Board) is responsible for oversight of our risk management programs and assisting management in addressing specific risks, including cybersecurity risk. The Audit Committee assists our Board in reviewing cybersecurity and other information technology risks, controls and procedures, including our plans to mitigate cybersecurity risks and to respond to data breaches. The Audit Committee also helps in reviewing with management any specific cybersecurity issues that could have a material impact on us. Our Chief Information Officer (CIO) provides the Board with updates on cybersecurity risks at regularly scheduled board meetings at least twice a year. These updates include the results of any third-party reviews and related remediation items. Primary responsibility for assessing, monitoring and managing our cybersecurity risks rests with our CIO, who has held that role since 2019 and has been employed by the company since 2004. With over 20 years of experience in cybersecurity, our CIO has extensive cybersecurity expertise and in-depth knowledge and experience instrumental in developing and executing our cybersecurity strategies. Our CIO oversees our cyber governance programs, evaluates our compliance with applicable standards and remediates known risks. Our CIO also oversees our internal phishing tests, leads our employee cyber training program and seeks to promote company-wide awareness of cybersecurity risk through broad-based communications and educational initiatives. Item 1C. CybersecurityRisk Management and StrategyOur cybersecurity program, which is primarily documented in our business interruption and incident response policy, is designed to assess, identify and manage material risks from cybersecurity threats. Our program leverages components from the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF), which we use to help us identify, assess and manage cybersecurity risks relevant to our business. Our cybersecurity program is a component of our overall enterprise risk program. We deploy multiple strategies and dedicate significant resources toward systems designed to identify, assess, manage, mitigate and respond to cybersecurity threats. We also consistently strive to improve the detection and response capabilities of our cybersecurity program. To do this, we monitor best cybersecurity practices and endeavor to incorporate those in our own cybersecurity program.Our cybersecurity policies and procedures include the controls and technology we use to identify, assess and respond to cybersecurity threats and incidents. These policies and procedures also focus on identifying vulnerabilities in our internal and external environments and remediating those vulnerabilities. To combat cybersecurity risk, we focus on proactive procedures such as patch management and emphasize the importance of cybersecurity across our organization. We provide our employees quarterly cybersecurity training courses that expose them to cybersecurity risks and threat actor tactics and we conduct simulated phishing exercises to test and educate employees on real-world threats. We evaluate our controls and response protocols at least twice a year using external third-party assessors and consultants in both advisory and adversarial engagements. These third-party experts are familiar with our systems and could be retained in the event of a significant incident to assist us in evaluating and responding to such an incident. We also regularly test our environment as part of our focus on identifying and eliminating vulnerabilities. We incorporate the lessons learned from these engagements into our cybersecurity program. Recognizing the risks posed by external partners, we have implemented a third-party risk management program, which includes due diligence assessments, contractual safeguards, and regular monitoring of vendors and partners with access to our systems or data; however, we cannot ensure in all circumstances that their defensive efforts will be successful.Like most large organizations, we face constant and dynamic risks related to cybersecurity. The emergence of artificial intelligence and its role in accelerating cybersecurity attacks will only make this area of risk more dynamic and difficult to prevent. In recent years we have faced, and expect to continue to face, various attempted cyberattacks including those that bear the hallmarks of being produced through the use of AI. We continue to observe attacks that are well planned and sophisticated. To date, we are not aware of any cybersecurity incident or threat that materially affected or could reasonably be anticipated to materially affect our business, results of operations or financial condition. However, we cannot guarantee that we will not experience such an incident in the future. For a further description of these risks, see “Risk Factors – Risks Relating to Technology, Cybersecurity, Artificial Intelligence and Data Privacy,” included in Item 1A of this Form 10-K, which should be read in conjunction with this Item 1C. Item 1C. Cybersecurity"
    },
    {
      "status": "ADDED",
      "current_title": "Risk Management and Strategy",
      "prior_title": null,
      "current_body": "Our cybersecurity program, which is primarily documented in our business interruption and incident response policy, is designed to assess, identify and manage material risks from cybersecurity threats. Our program leverages components from the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF), which we use to help us identify, assess and manage cybersecurity risks relevant to our business. Our cybersecurity program is a component of our overall enterprise risk program. We deploy multiple strategies and dedicate significant resources toward systems designed to identify, assess, manage, mitigate and respond to cybersecurity threats. We also consistently strive to improve the detection and response capabilities of our cybersecurity program. To do this, we monitor best cybersecurity practices and endeavor to incorporate those in our own cybersecurity program. Our cybersecurity program, which is primarily documented in our business interruption and incident response policy, is designed to assess, identify and manage material risks from cybersecurity threats. Our program leverages components from the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF), which we use to help us identify, assess and manage cybersecurity risks relevant to our business. Our cybersecurity program is a component of our overall enterprise risk program. We deploy multiple strategies and dedicate significant resources toward systems designed to identify, assess, manage, mitigate and respond to cybersecurity threats. We also consistently strive to improve the detection and response capabilities of our cybersecurity program. To do this, we monitor best cybersecurity practices and endeavor to incorporate those in our own cybersecurity program. Our cybersecurity program is a component of our overall enterprise risk program. Our cybersecurity policies and procedures include the controls and technology we use to identify, assess and respond to cybersecurity threats and incidents. These policies and procedures also focus on identifying vulnerabilities in our internal and external environments and remediating those vulnerabilities. To combat cybersecurity risk, we focus on proactive procedures such as patch management and emphasize the importance of cybersecurity across our organization. We provide our employees quarterly cybersecurity training courses that expose them to cybersecurity risks and threat actor tactics and we conduct simulated phishing exercises to test and educate employees on real-world threats. We evaluate our controls and response protocols at least twice a year using external third-party assessors and consultants in both advisory and adversarial engagements. These third-party experts are familiar with our systems and could be retained in the event of a significant incident to assist us in evaluating and responding to such an incident. We also regularly test our environment as part of our focus on identifying and eliminating vulnerabilities. We incorporate the lessons learned from these engagements into our cybersecurity program. Recognizing the risks posed by external partners, we have implemented a third-party risk management program, which includes due diligence assessments, contractual safeguards, and regular monitoring of vendors and partners with access to our systems or data; however, we cannot ensure in all circumstances that their defensive efforts will be successful. third-party assessors and consultants third-party risk management program Like most large organizations, we face constant and dynamic risks related to cybersecurity. The emergence of artificial intelligence and its role in accelerating cybersecurity attacks will only make this area of risk more dynamic and difficult to prevent. In recent years we have faced, and expect to continue to face, various attempted cyberattacks including those that bear the hallmarks of being produced through the use of AI. We continue to observe attacks that are well planned and sophisticated. To date, we are not aware of any cybersecurity incident or threat that materially affected or could reasonably be anticipated to materially affect our business, results of operations or financial condition. However, we cannot guarantee that we will not experience such an incident in the future. For a further description of these risks, see “Risk Factors – Risks Relating to Technology, Cybersecurity, Artificial Intelligence and Data Privacy,” included in Item 1A of this Form 10-K, which should be read in conjunction with this Item 1C. materially affect Governance Our Board of Directors (Board) is responsible for oversight of our risk management programs and assisting management in addressing specific risks, including cybersecurity risk. The Audit Committee assists our Board in reviewing cybersecurity and other information technology risks, controls and procedures, including our plans to mitigate cybersecurity risks and to respond to data breaches. The Audit Committee also helps in reviewing with management any specific cybersecurity issues that could have a material impact on us. Our Chief Information Officer (CIO) provides the Board with updates on cybersecurity risks at regularly scheduled board meetings at least twice a year. These updates include the results of any third-party reviews and related remediation items. Our Board of Directors (Board) is responsible for oversight of our risk management programs and assisting management in addressing specific risks, including cybersecurity risk. The Audit Committee assists our Board in reviewing cybersecurity and other information technology risks, controls and procedures, including our plans to mitigate cybersecurity risks and to respond to data breaches. The Audit Committee also helps in reviewing with management any specific cybersecurity issues that could have a material impact on us. Our Chief Information Officer (CIO) provides the Board with updates on cybersecurity risks at regularly scheduled board meetings at least twice a year. These updates include the results of any third-party reviews and related remediation items. Our Board of Directors (Board) is responsible for oversight of our risk management programs and assisting management in addressing specific risks, including cybersecurity risk. The Audit Committee assists our Board in reviewing cybersecurity and other information technology risks, controls and procedures, including our plans to mitigate cybersecurity risks and to respond to data breaches. The Audit Committee also helps in reviewing with management any specific cybersecurity issues that could have a material impact on us. Our Chief Information Officer (CIO) provides the Board with updates on cybersecurity risks at regularly scheduled board meetings at least twice a year. These updates include the results of any third-party reviews and related remediation items. Our Board of Directors (Board) is responsible for oversight of our risk management programs and assisting management in addressing specific risks, including cybersecurity risk. The Audit Committee assists our Board in reviewing cybersecurity and other information technology risks, controls and procedures, including our plans to mitigate cybersecurity risks and to respond to data breaches. The Audit Committee also helps in reviewing with management any specific cybersecurity issues that could have a material impact on us. Our Chief Information Officer (CIO) Chief Information Officer (CIO) provides the Board with updates on cybersecurity risks at regularly scheduled board meetings at least twice a year. These updates include the results of any third-party reviews and related remediation items. Primary responsibility for assessing, monitoring and managing our cybersecurity risks rests with our CIO, who has held that role since 2019 and has been employed by the company since 2004. With over 20 years of experience in cybersecurity, our CIO has extensive cybersecurity expertise and in-depth knowledge and experience instrumental in developing and executing our cybersecurity strategies. Our CIO oversees our cyber governance programs, evaluates our compliance with applicable standards and remediates known risks. Our CIO also oversees our internal phishing tests, leads our employee cyber training program and seeks to promote company-wide awareness of cybersecurity risk through broad-based communications and educational initiatives. Primary responsibility for assessing, monitoring and managing our cybersecurity risks rests with our CIO, who has held that role since 2019 and has been employed by the company since 2004. With over 20 years of experience in cybersecurity, our CIO has extensive cybersecurity expertise and in-depth knowledge and experience instrumental in developing and executing our cybersecurity strategies. Our CIO oversees our cyber governance programs, evaluates our compliance with applicable standards and remediates known risks. Our CIO also oversees our internal phishing tests, leads our employee cyber training program and seeks to promote company-wide awareness of cybersecurity risk through broad-based communications and educational initiatives. Primary responsibility for assessing, monitoring and managing our cybersecurity risks rests with our CIO, who has held that role since 2019 and has been employed by the company since 2004. With over 20 years of experience in cybersecurity, our CIO has extensive cybersecurity expertise and in-depth knowledge and experience instrumental in developing and executing our cybersecurity strategies. Our CIO oversees our cyber governance programs, evaluates our compliance with applicable standards and remediates known risks. Our CIO also oversees our internal phishing tests, leads our employee cyber training program and seeks to promote company-wide awareness of cybersecurity risk through broad-based communications and educational initiatives. Primary responsibility for assessing, monitoring and managing our cybersecurity risks rests with our CIO CIO , who has held that role since 2019 and has been employed by the company since 2004. With over 20 years of experience in cybersecurity, our CIO has extensive cybersecurity expertise and in-depth knowledge and experience instrumental in developing and executing our cybersecurity strategies. 21 21 At the day-to-day operational level, our CIO manages an information security team tasked with executing our cybersecurity program. This team includes a director of network security, technical director of enterprise architecture, system architects and network security staff. Members of our information technology (IT) management group, led by our CIO, have extensive years of combined experience in defending large, complex corporate environments. Our CIO, IT management group, architects and network security team members receive briefings and annual training on cybersecurity threats and response methods that provide real world threat scenarios to measure the effectiveness of our programs and technologies in protecting our systems. Our team of professionals also monitors our compliance with laws governing privacy rights, data protection and cybersecurity.Our incident response policy outlines our protocols for assessing, managing and responding to cyber incidents. This policy guides the response of our global IT team, which, depending on the significance of the incident, may include escalating the issue to executive management, notifying one or more members of our Board, maintaining communication with users and notifying law enforcement and other agencies if warranted. We may also receive assistance from a third-party security operations center (SOC) and other industry-leading third-party providers. At the day-to-day operational level, our CIO manages an information security team tasked with executing our cybersecurity program. This team includes a director of network security, technical director of enterprise architecture, system architects and network security staff. Members of our information technology (IT) management group, led by our CIO, have extensive years of combined experience in defending large, complex corporate environments. Our CIO, IT management group, architects and network security team members receive briefings and annual training on cybersecurity threats and response methods that provide real world threat scenarios to measure the effectiveness of our programs and technologies in protecting our systems. Our team of professionals also monitors our compliance with laws governing privacy rights, data protection and cybersecurity.Our incident response policy outlines our protocols for assessing, managing and responding to cyber incidents. This policy guides the response of our global IT team, which, depending on the significance of the incident, may include escalating the issue to executive management, notifying one or more members of our Board, maintaining communication with users and notifying law enforcement and other agencies if warranted. We may also receive assistance from a third-party security operations center (SOC) and other industry-leading third-party providers. At the day-to-day operational level, our CIO manages an information security team tasked with executing our cybersecurity program. This team includes a director of network security, technical director of enterprise architecture, system architects and network security staff. Members of our information technology (IT) management group, led by our CIO, have extensive years of combined experience in defending large, complex corporate environments. Our CIO, IT management group, architects and network security team members receive briefings and annual training on cybersecurity threats and response methods that provide real world threat scenarios to measure the effectiveness of our programs and technologies in protecting our systems. Our team of professionals also monitors our compliance with laws governing privacy rights, data protection and cybersecurity. At the day-to-day operational level, our CIO manages an information security team tasked with executing our cybersecurity program. This team includes a director of network security, technical director of enterprise architecture, system architects and network security staff. Members of our information technology (IT) management group, led by our CIO, have extensive years of combined experience in defending large, complex corporate environments. Our CIO, IT management group, architects and network security team members receive briefings and annual training on cybersecurity threats and response methods that provide real world threat scenarios to measure the effectiveness of our programs and technologies in protecting our systems. Our team of professionals also monitors our compliance with laws governing privacy rights, data protection and cybersecurity. Our incident response policy outlines our protocols for assessing, managing and responding to cyber incidents. This policy guides the response of our global IT team, which, depending on the significance of the incident, may include escalating the issue to executive management, notifying one or more members of our Board, maintaining communication with users and notifying law enforcement and other agencies if warranted. We may also receive assistance from a third-party security operations center (SOC) and other industry-leading third-party providers. Our incident response policy outlines our protocols for assessing, managing and responding to cyber incidents. This policy guides the response of our global IT team, which, depending on the significance of the incident, may include escalating the issue to executive management, notifying one or more members of our Board, maintaining communication with users and notifying law enforcement and other agencies if warranted. We may also receive assistance from a third-party security operations center (SOC) and other industry-leading third-party providers. 22 22 Item 2. PropertiesWe lease our corporate offices, which consist of approximately 60,000 square feet of office space in Covington, Louisiana, from an entity in which we have a 50% ownership interest. We own fifteen sales center facilities, which includes seven sales center facilities in Florida, two in Texas, two in Alabama, and one in each of California, Georgia, Mississippi and Tennessee.As part of our 2021 acquisition of Porpoise Pool & Patio, Inc., we own the corporate headquarters, which consist of approximately 46,000 square feet and the Sun Wholesale Supply facilities located in Florida, which consist of approximately 209,000 square feet. We also own a chemical re-packaging plant in Florida, which is approximately 105,000 square feet, and lease two additional properties for storage space, measuring 39,000 square feet and 122,000 square feet.We lease all of our other properties, and the majority of our leases have three-to-seven year terms. As of December 31, 2025, we had sixteen leases with remaining terms longer than seven years that expire between 2033 and 2036. Most of our leases contain renewal options, some of which involve rent increases. In addition to minimum rental payments, which are set at competitive rates, certain leases require reimbursement for taxes, maintenance and insurance. We do not believe that any single lease is material to our operations.Our sales centers range in size from approximately 2,000 square feet to 95,000 square feet and generally consist of warehouse, counter, display and office space. Our centralized shipping locations (CSLs) range in size from approximately 115,000 square feet to 185,000 square feet.We believe that our facilities are well maintained, suitable for our business and occupy sufficient space to meet our operating needs. As part of our normal business, we regularly evaluate sales center performance and site suitability and may relocate a sales center or consolidate multiple locations if a sales center is redundant in a market, underperforming or otherwise deemed unsuitable. We do not believe that any single lease is material to our operations.The table below summarizes the changes in our sales centers during the year ended December 31, 2025: Network 12/31/24 NewLocations Consolidated/ClosedLocations AcquiredLocations 12/31/25 SCP 216 6 — 2 224 Horizon 90 1 (3 ) — 88 Superior 74 1 — — 75 NPT (1) 18 — — 1 19 Sun Wholesale Supply (2) 2 — — — 2 Total Domestic 400 8 (3 ) 3 408 SCP International 48 — — — 48 Total 448 8 (3 ) 3 456 (1)In addition to the stand-alone NPT sales centers, there are 124 SCP and Superior locations that have consumer showrooms and serve as stocking locations that feature NPT brand tile and composite finish products.(2)We also own and operate a chemical re-packaging plant and one Pinch A Penny retail store. Item 2. Properties We lease our corporate offices, which consist of approximately 60,000 square feet of office space in Covington, Louisiana, from an entity in which we have a 50% ownership interest. We own fifteen sales center facilities, which includes seven sales center facilities in Florida, two in Texas, two in Alabama, and one in each of California, Georgia, Mississippi and Tennessee. As part of our 2021 acquisition of Porpoise Pool & Patio, Inc., we own the corporate headquarters, which consist of approximately 46,000 square feet and the Sun Wholesale Supply facilities located in Florida, which consist of approximately 209,000 square feet. We also own a chemical re-packaging plant in Florida, which is approximately 105,000 square feet, and lease two additional properties for storage space, measuring 39,000 square feet and 122,000 square feet. We lease all of our other properties, and the majority of our leases have three-to-seven year terms. As of December 31, 2025, we had sixteen leases with remaining terms longer than seven years that expire between 2033 and 2036. Most of our leases contain renewal options, some of which involve rent increases. In addition to minimum rental payments, which are set at competitive rates, certain leases require reimbursement for taxes, maintenance and insurance. We do not believe that any single lease is material to our operations. Our sales centers range in size from approximately 2,000 square feet to 95,000 square feet and generally consist of warehouse, counter, display and office space. Our centralized shipping locations (CSLs) range in size from approximately 115,000 square feet to 185,000 square feet. We believe that our facilities are well maintained, suitable for our business and occupy sufficient space to meet our operating needs. As part of our normal business, we regularly evaluate sales center performance and site suitability and may relocate a sales center or consolidate multiple locations if a sales center is redundant in a market, underperforming or otherwise deemed unsuitable. We do not believe that any single lease is material to our operations. The table below summarizes the changes in our sales centers during the year ended December 31, 2025: Network 12/31/24"
    },
    {
      "status": "ADDED",
      "current_title": "AcquiredLocations",
      "prior_title": null,
      "current_body": "12/31/25 SCP 216 6 — 2 224 Horizon 90 1 (3 ) — 88 Superior 74 1 — — 75 NPT (1) 18 — — 1 19 Sun Wholesale Supply (2) 2 — — — 2 Total Domestic 400 8 (3 ) 3 408 SCP International 48 — — — 48 Total 448 8 (3 ) 3 456 (1)In addition to the stand-alone NPT sales centers, there are 124 SCP and Superior locations that have consumer showrooms and serve as stocking locations that feature NPT brand tile and composite finish products. In addition to the stand-alone NPT sales centers, there are 124 SCP and Superior locations that have consumer showrooms and serve as stocking locations that feature NPT brand tile and composite finish products. (2)We also own and operate a chemical re-packaging plant and one Pinch A Penny retail store. We also own and operate a chemical re-packaging plant and one Pinch A Penny retail store. 23 23 The tables below identify the number of sales centers in each state, territory or country by distribution network as of December 31, 2025: Location SCP Horizon Superior NPT Sun Wholesale Supply Total United States California 29 20 25 7 — 81 Florida 44 16 6 — 1 67 Texas 32 18 5 4 1 60 Arizona 8 12 8 3 — 31 Georgia 8 — 2 1 — 11 Washington 3 8 — — — 11 Nevada 3 3 3 1 — 10 Tennessee 6 0 4 0 — 10 New York 9 — — — — 9 North Carolina 5 1 2 1 — 9 Alabama 5 — 2 — — 7 New Jersey 5 — 2 — — 7 Pennsylvania 6 — 1 — — 7 Virginia 3 3 1 — — 7 Louisiana 5 — — 1 — 6 Illinois 4 — 1 — — 5 Indiana 2 — 3 — — 5 Oregon 1 4 — — — 5 South Carolina 4 — 1 — — 5 Colorado 1 1 2 — — 4 Missouri 3 — 1 — — 4 Ohio 2 — 2 — — 4 Oklahoma 2 — 1 1 — 4 Arkansas 3 — — — — 3 Idaho 1 2 — — — 3 Kansas 3 — — — — 3 Massachusetts 3 — — — — 3 Michigan 3 — — — — 3 Mississippi 3 — — — — 3 Utah 3 — — — — 3 Connecticut 2 — — — — 2 Hawaii 2 — — — — 2 Kentucky 1 — 1 — — 2 Maryland 2 — — — — 2 Minnesota 1 — 1 — — 2 Wisconsin 1 — 1 — — 2 Iowa 1 — — — — 1 Nebraska 1 — — — — 1 New Mexico 1 — — — — 1 North Dakota 1 — — — — 1 Puerto Rico 1 — — — — 1 West Virginia 1 — — — — 1 Total United States 224 88 75 19 2 408 International Canada 17 — — — — 17 France 9 — — — — 9 Australia 6 — — — — 6 Mexico 5 — — — — 5 Portugal 3 — — — — 3 Italy 2 — — — — 2 Spain 2 — — — — 2 Belgium 1 — — — — 1 Croatia 1 — — — — 1 Germany 1 — — — — 1 United Kingdom 1 — — — — 1 Total International 48 — — — — 48 Total 272 88 75 19 2 456 The tables below identify the number of sales centers in each state, territory or country by distribution network as of December 31, 2025: Location SCP Horizon Superior NPT"
    },
    {
      "status": "ADDED",
      "current_title": "United States",
      "prior_title": null,
      "current_body": "California 29 20 25 7 — 81 Florida 44 16 6 — 1 67 Texas 32 18 5 4 1 60 Arizona 8 12 8 3 — 31 Georgia 8 — 2 1 — 11 Washington 3 8 — — — 11 Nevada 3 3 3 1 — 10 Tennessee 6 0 4 0 — 10 New York 9 — — — — 9 North Carolina 5 1 2 1 — 9 Alabama 5 — 2 — — 7 New Jersey 5 — 2 — — 7 Pennsylvania 6 — 1 — — 7 Virginia 3 3 1 — — 7 Louisiana 5 — — 1 — 6 Illinois 4 — 1 — — 5 Indiana 2 — 3 — — 5 Oregon 1 4 — — — 5 South Carolina 4 — 1 — — 5 Colorado 1 1 2 — — 4 Missouri 3 — 1 — — 4 Ohio 2 — 2 — — 4 Oklahoma 2 — 1 1 — 4 Arkansas 3 — — — — 3 Idaho 1 2 — — — 3 Kansas 3 — — — — 3 Massachusetts 3 — — — — 3 Michigan 3 — — — — 3 Mississippi 3 — — — — 3 Utah 3 — — — — 3 Connecticut 2 — — — — 2 Hawaii 2 — — — — 2 Kentucky 1 — 1 — — 2 Maryland 2 — — — — 2 Minnesota 1 — 1 — — 2 Wisconsin 1 — 1 — — 2 Iowa 1 — — — — 1 Nebraska 1 — — — — 1 New Mexico 1 — — — — 1 North Dakota 1 — — — — 1 Puerto Rico 1 — — — — 1 West Virginia 1 — — — — 1"
    },
    {
      "status": "ADDED",
      "current_title": "International",
      "prior_title": null,
      "current_body": "Canada 17 — — — — 17 France 9 — — — — 9 Australia 6 — — — — 6 Mexico 5 — — — — 5 Portugal 3 — — — — 3 Italy 2 — — — — 2 Spain 2 — — — — 2 Belgium 1 — — — — 1 Croatia 1 — — — — 1 Germany 1 — — — — 1 United Kingdom 1 — — — — 1"
    },
    {
      "status": "ADDED",
      "current_title": "Total International",
      "prior_title": null,
      "current_body": "48 — — — — 48 Total 272 88 75 19 2 456 24 24 Item 3. Legal ProceedingsFrom 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, 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. Item 4. Mine Safety DisclosuresNot applicable. Item 3. Legal Proceedings 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, 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. Item 4. Mine Safety Disclosures Not applicable. 25 25 PART II.Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesCommon StockOur common stock is traded on the Nasdaq Global Select Market under the trading symbol “POOL.” On February 20, 2026, there were approximately 842 holders of record of our common stock and a significantly larger number of beneficial holders of our common stock. Common Stock Dividends We initiated quarterly dividend payments to our shareholders in the second quarter of 2004 and we have continued payments in each subsequent quarter. Our Board has increased the dividend amount twenty times, most recently in the second quarters of 2011 through 2025. 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, Term Facility and Receivables Facility, see Note 5 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K. 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. Stock Performance GraphThe information included under the caption “Stock Performance Graph” in this Item 5 of this Annual Report on Form 10-K is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934 (the 1934 Act) or to the liabilities of Section 18 of the 1934 Act, and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the 1934 Act, except to the extent we specifically incorporate it by reference into such a filing.The following graph compares the cumulative total shareholder return on our common stock for the last five fiscal years with the total return on the S&P 500 Index (of which we have been a member since 2020) and the Nasdaq Index for the same period, in each case assuming the investment of $100 on December 31, 2020 and the reinvestment of all dividends. We believe the S&P 500 Index is comprised of similar-sized public companies that represent the most likely alternative investments for investors. Additionally, we chose the S&P 500 Index for comparison, as opposed to an industry index, because we do not believe that we can reasonably identify a peer group or a published industry or line-of-business index that contains a sufficient number of companies in a similar line of business. PART II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities"
    },
    {
      "status": "ADDED",
      "current_title": "Common Stock",
      "prior_title": null,
      "current_body": "Our common stock is traded on the Nasdaq Global Select Market under the trading symbol “POOL.” On February 20, 2026, there were approximately 842 holders of record of our common stock and a significantly larger number of beneficial holders of our common stock."
    },
    {
      "status": "ADDED",
      "current_title": "Common Stock Dividends",
      "prior_title": null,
      "current_body": "We initiated quarterly dividend payments to our shareholders in the second quarter of 2004 and we have continued payments in each subsequent quarter. Our Board has increased the dividend amount twenty times, most recently in the second quarters of 2011 through 2025. 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, Term Facility and Receivables Facility, see Note 5 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K. 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."
    },
    {
      "status": "ADDED",
      "current_title": "Stock Performance Graph",
      "prior_title": null,
      "current_body": "The information included under the caption “Stock Performance Graph” in this Item 5 of this Annual Report on Form 10-K is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934 (the 1934 Act) or to the liabilities of Section 18 of the 1934 Act, and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the 1934 Act, except to the extent we specifically incorporate it by reference into such a filing. The following graph compares the cumulative total shareholder return on our common stock for the last five fiscal years with the total return on the S&P 500 Index (of which we have been a member since 2020) and the Nasdaq Index for the same period, in each case assuming the investment of $100 on December 31, 2020 and the reinvestment of all dividends. We believe the S&P 500 Index is comprised of similar-sized public companies that represent the most likely alternative investments for investors. Additionally, we chose the S&P 500 Index for comparison, as opposed to an industry index, because we do not believe that we can reasonably identify a peer group or a published industry or line-of-business index that contains a sufficient number of companies in a similar line of business. 26 26 Base Period Indexed Returns Years Ending Company / Index 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 Pool Corporation $ 100.00 $ 152.98 $ 82.56 $ 110.22 $ 95.46 $ 65.10 S&P 500 Index 100.00 128.71 105.40 133.10 166.40 196.16 Nasdaq Index 100.00 122.18 82.43 119.22 154.48 187.14 As shown in the graph above, our cumulative total shareholder return for the five-year period ended December 31, 2025 trailed both the S&P 500 Index and the Nasdaq Index in recent periods. During the COVID-19 pandemic (generally 2020 through 2022), we experienced unprecedented demand, driving up sales and earnings. Since the latter half of 2022, these trends moderated resulting in significantly reduced discretionary spending on new pool construction and remodeling activities. Our full-year 2025 results include a fifth consecutive year of sales exceeding $5.0 billion, diluted earnings per share of $10.85 and double-digit operating margin. Issuer Purchases of Equity SecuritiesThe table below summarizes the repurchases of our common stock in the fourth quarter of 2025: Period TotalNumber ofSharesPurchased (1) AveragePricePaid perShare Total Number of Shares Purchasedas Part ofPubliclyAnnouncedPlan (2) MaximumApproximateDollar Value ofShares That MayYet be PurchasedUnder the Plan (2) October 1 – October 31, 2025 68,271 $296.07 67,046 $493,151,746 November 1 – November 30, 2025 405,536 $246.44 405,536 $393,213,236 December 1 – December 31, 2025 266,733 $233.39 266,733 $330,961,555 Total 740,540 $246.31 739,315 (1)Includes 1,225 shares of our common stock surrendered to us during fourth quarter of 2025 by employees in order to satisfy minimum tax withholding obligations in connection with certain exercises of employee stock options or lapses upon vesting of restrictions on previously restricted share awards, and/or to cover the exercise price of such options granted under our share-based compensation plans. (2)In April 2025, our Board authorized an additional $309.2 million under our share repurchase program for the repurchase of shares of our common stock in the open market at prevailing market prices bringing the total authorization available under the program to $600.0 million. As of February 20, 2026, $331.0 million of the authorized amount remained available for use under our current share repurchase program. The share repurchase program does not obligate us to acquire any specific amount of shares and does not have an expiration date.Unregistered Sales of Equity SecuritiesThere were no unregistered sales of equity securities during the three months ended December 31, 2025. Item 6. [RESERVED]Not applicable."
    },
    {
      "status": "ADDED",
      "current_title": "Company / Index",
      "prior_title": null,
      "current_body": "12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 Pool Corporation $ 100.00 $ 152.98 $ 82.56 $ 110.22 $ 95.46 $ 65.10 S&P 500 Index 100.00 128.71 105.40 133.10 166.40 196.16 Nasdaq Index 100.00 122.18 82.43 119.22 154.48 187.14 As shown in the graph above, our cumulative total shareholder return for the five-year period ended December 31, 2025 trailed both the S&P 500 Index and the Nasdaq Index in recent periods. During the COVID-19 pandemic (generally 2020 through 2022), we experienced unprecedented demand, driving up sales and earnings. Since the latter half of 2022, these trends moderated resulting in significantly reduced discretionary spending on new pool construction and remodeling activities. Our full-year 2025 results include a fifth consecutive year of sales exceeding $5.0 billion, diluted earnings per share of $10.85 and double-digit operating margin."
    },
    {
      "status": "ADDED",
      "current_title": "Issuer Purchases of Equity Securities",
      "prior_title": null,
      "current_body": "The table below summarizes the repurchases of our common stock in the fourth quarter of 2025: Period"
    },
    {
      "status": "ADDED",
      "current_title": "MaximumApproximateDollar Value ofShares That MayYet be PurchasedUnder the Plan (2)",
      "prior_title": null,
      "current_body": "October 1 – October 31, 2025 68,271 $296.07 67,046 $493,151,746 November 1 – November 30, 2025 405,536 $246.44 405,536 $393,213,236 December 1 – December 31, 2025 266,733 $233.39 266,733 $330,961,555 Total 740,540 $246.31 739,315 (1)Includes 1,225 shares of our common stock surrendered to us during fourth quarter of 2025 by employees in order to satisfy minimum tax withholding obligations in connection with certain exercises of employee stock options or lapses upon vesting of restrictions on previously restricted share awards, and/or to cover the exercise price of such options granted under our share-based compensation plans. Includes 1,225 shares of our common stock surrendered to us during fourth quarter of 2025 by employees in order to satisfy minimum tax withholding obligations in connection with certain exercises of employee stock options or lapses upon vesting of restrictions on previously restricted share awards, and/or to cover the exercise price of such options granted under our share-based compensation plans. (2)In April 2025, our Board authorized an additional $309.2 million under our share repurchase program for the repurchase of shares of our common stock in the open market at prevailing market prices bringing the total authorization available under the program to $600.0 million. As of February 20, 2026, $331.0 million of the authorized amount remained available for use under our current share repurchase program. The share repurchase program does not obligate us to acquire any specific amount of shares and does not have an expiration date. In April 2025, our Board authorized an additional $309.2 million under our share repurchase program for the repurchase of shares of our common stock in the open market at prevailing market prices bringing the total authorization available under the program to $600.0 million. As of February 20, 2026, $331.0 million of the authorized amount remained available for use under our current share repurchase program. The share repurchase program does not obligate us to acquire any specific amount of shares and does not have an expiration date."
    },
    {
      "status": "ADDED",
      "current_title": "Unregistered Sales of Equity Securities",
      "prior_title": null,
      "current_body": "There were no unregistered sales of equity securities during the three months ended December 31, 2025. Item 6. [RESERVED] Not applicable. 27 27 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsFor a discussion of our base business calculations, see the RESULTS OF OPERATIONS section below.2025 FINANCIAL OVERVIEW Financial Results Net sales were $5.3 billion for 2025, comparable to 2024 net sales. Sales of non‑discretionary products were steady throughout the year. In the back half of the year, we noticed improved sales trends for discretionary products. Gross margin was 29.7% in 2025 and 2024. Gross margin in 2024 included a 20 basis points benefit from the reversal of $12.6 million for estimated import taxes. Without this benefit included in our 2024 gross margin, our 2025 gross margin improved 20 basis points, reflecting positive impacts from price increases and disciplined supply chain management. Selling and administrative expenses (operating expenses) increased 4% to $992.3 million in 2025 compared to $958.1 million in 2024. The growth in expenses was primarily driven by incremental investments in our technology initiatives and sales center network expansion, as well as inflationary impacts, particularly on base wages and facility costs.Operating income of $580.2 million for the year was 6% lower than $617.2 million in 2024.Net income decreased to $406.4 million in 2025 compared to $434.3 million in 2024. Without the impact of the 2024 import tax reversal discussed above, 2025 operating income was 4% lower than in 2024.Earnings per diluted share declined 4% to $10.85 in 2025 compared to $11.30 in 2024, which included a $0.25 benefit from the import tax reversal discussed above. We recorded a $4.6 million, or $0.12 per diluted share, tax benefit from Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting, in 2025 compared to an $8.8 million, or $0.23 per diluted share, tax benefit in 2024. Adjusting for the impact from ASU 2016-09 in both years, earnings per diluted share decreased 3% to $10.73 in 2025 compared to $11.07 in 2024. See RESULTS OF OPERATIONS below for definitions of our non-GAAP measures and reconciliations of our non-GAAP measures to GAAP measures.Financial Position and LiquidityNet cash provided by operations was $365.9 million in 2025. Our cash flows were impacted by working capital investments, including increases in inventory and $68.5 million in federal tax payments from 2024 that were deferred into 2025 due to relief granted by the IRS. The deferred tax payment increased operating cash flows in 2024 and decreased operating cash flows in 2025. Our 2025 operating cash flows helped to fund $184.9 million of quarterly cash dividend payments to shareholders and net capital expenditures and acquisitions of $67.2 million.Total net receivables, including pledged receivables, increased 10% compared to December 31, 2024, primarily due to higher sales in December 2025. Our allowance for doubtful accounts was $8.0 million at December 31, 2025 and $8.6 million at December 31, 2024. Our days sales outstanding ratio, as calculated on a trailing four quarters basis, was 26.3 days at December 31, 2025 and at December 31, 2024.Our inventory balance increased 13% to $1.5 billion at December 31, 2025 compared to $1.3 billion at December 31, 2024. This growth was primarily driven by increased purchasing ahead of price increases. Our inventory balance also reflects increases from inflation (including mid-season vendor price increases) and the addition of new and acquired sales centers. Our reserve for inventory obsolescence was $23.9 million at December 31, 2025 compared to $26.7 million at December 31, 2024. Our inventory turns, as calculated on a trailing four quarters basis, were 2.7 times at December 31, 2025 and 2.8 times at December 31, 2024.Total debt outstanding of $1.2 billion at December 31, 2025 increased $249.1 million compared to December 31, 2024, primarily to fund open market share repurchases of $341.1 million in 2025 and working capital needs. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations For a discussion of our base business calculations, see the RESULTS OF OPERATIONS section below."
    },
    {
      "status": "ADDED",
      "current_title": "Financial Results",
      "prior_title": null,
      "current_body": "Net sales were $5.3 billion for 2025, comparable to 2024 net sales. Sales of non‑discretionary products were steady throughout the year. In the back half of the year, we noticed improved sales trends for discretionary products. Gross margin was 29.7% in 2025 and 2024. Gross margin in 2024 included a 20 basis points benefit from the reversal of $12.6 million for estimated import taxes. Without this benefit included in our 2024 gross margin, our 2025 gross margin improved 20 basis points, reflecting positive impacts from price increases and disciplined supply chain management. Selling and administrative expenses (operating expenses) increased 4% to $992.3 million in 2025 compared to $958.1 million in 2024. The growth in expenses was primarily driven by incremental investments in our technology initiatives and sales center network expansion, as well as inflationary impacts, particularly on base wages and facility costs. Operating income of $580.2 million for the year was 6% lower than $617.2 million in 2024. Net income decreased to $406.4 million in 2025 compared to $434.3 million in 2024. Without the impact of the 2024 import tax reversal discussed above, 2025 operating income was 4% lower than in 2024. Earnings per diluted share declined 4% to $10.85 in 2025 compared to $11.30 in 2024, which included a $0.25 benefit from the import tax reversal discussed above. We recorded a $4.6 million, or $0.12 per diluted share, tax benefit from Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting, in 2025 compared to an $8.8 million, or $0.23 per diluted share, tax benefit in 2024. Adjusting for the impact from ASU 2016-09 in both years, earnings per diluted share decreased 3% to $10.73 in 2025 compared to $11.07 in 2024. See RESULTS OF OPERATIONS below for definitions of our non-GAAP measures and reconciliations of our non-GAAP measures to GAAP measures."
    },
    {
      "status": "ADDED",
      "current_title": "Financial Position and Liquidity",
      "prior_title": null,
      "current_body": "Net cash provided by operations was $365.9 million in 2025. Our cash flows were impacted by working capital investments, including increases in inventory and $68.5 million in federal tax payments from 2024 that were deferred into 2025 due to relief granted by the IRS. The deferred tax payment increased operating cash flows in 2024 and decreased operating cash flows in 2025. Our 2025 operating cash flows helped to fund $184.9 million of quarterly cash dividend payments to shareholders and net capital expenditures and acquisitions of $67.2 million. Total net receivables, including pledged receivables, increased 10% compared to December 31, 2024, primarily due to higher sales in December 2025. Our allowance for doubtful accounts was $8.0 million at December 31, 2025 and $8.6 million at December 31, 2024. Our days sales outstanding ratio, as calculated on a trailing four quarters basis, was 26.3 days at December 31, 2025 and at December 31, 2024. Our inventory balance increased 13% to $1.5 billion at December 31, 2025 compared to $1.3 billion at December 31, 2024. This growth was primarily driven by increased purchasing ahead of price increases. Our inventory balance also reflects increases from inflation (including mid-season vendor price increases) and the addition of new and acquired sales centers. Our reserve for inventory obsolescence was $23.9 million at December 31, 2025 compared to $26.7 million at December 31, 2024. Our inventory turns, as calculated on a trailing four quarters basis, were 2.7 times at December 31, 2025 and 2.8 times at December 31, 2024. Total debt outstanding of $1.2 billion at December 31, 2025 increased $249.1 million compared to December 31, 2024, primarily to fund open market share repurchases of $341.1 million in 2025 and working capital needs. 28 28 Current Trends and OutlookConsumers’ investments in their homes, including backyard renovations, continue to be favorable. In recent years, steady increases in home values, lack of affordable new homes and increased mortgage rates have positioned homeowners to stay in their homes longer and upgrade their home environments, including their backyards. During the COVID-19 pandemic (generally 2020 through 2022), we experienced unprecedented demand as families spent more time at home and sought opportunities to create or expand home-based outdoor living and entertainment spaces. This trend had a positive impact on our financial performance during 2020 through 2022. Beginning in the latter half of 2022, these trends moderated resulting in lagging new pool construction and remodeling activities. Based on industry data, we estimate that new in-ground pool construction units decreased 3% to 5% from 62,000 units in 2024 to just below 60,000 units in 2025. As in 2024, market conditions during the majority of 2025 were challenged by generally higher interest rates than the recent past, and product cost and labor inflation, which led to consumer hesitancy on discretionary spending and some cyclical suppression of demand. These market conditions impacted new pool construction and remodeling projects, particularly in the first half of the year. Throughout the year, non-discretionary maintenance product sales were stable. As lower housing turnover and market conditions encourage consumers to stay in their homes longer, we expect that consumers will continue to invest in outdoor living spaces as they consider backyards an extension of their home space. We believe that we are well positioned to benefit from the inherent long-term growth opportunities in our industry fueled by favorable population migration trends, and product developments and technological advancements as consumers focus on more sustainable and energy-efficient products. In view of current trends, we established our outlook for 2026 based on reasonable expectations for industry demand, pricing and inflationary conditions, variable expense reductions, realization of our digital transformation initiatives and leverage of existing investments in our business. We also plan to broaden our geographic presence by opening 5 to 8 new sales centers in 2026 and by making selective acquisitions if and when appropriate opportunities arise. We base our assumptions on normal weather conditions and do not incorporate alternative weather predictions into our guidance. Favorable weather positively impacts industry activity by accelerating growth in any given year, expanding the number of available construction days, extending the pool season and pool usage and positively impacting demand for discretionary products. Conversely, unfavorable weather typically impedes growth. The following summarizes our outlook for 2026:•We expect sales to be a low single digit increase compared to 2025, impacted by the following factors and assumptions: onormal weather patterns for 2026;oslight growth in sales of pool maintenance products; oconsistent new construction units to 2025; oflat to slightly up renovation and remodel activity;oinflationary product cost increases, which generally pass through to customers, of approximately 1% to 2%; andothe same number of selling days each quarter compared to 2025. •We project gross margin for the full year of 2026 to be similar to our 2025 gross margin of 29.7%. We expect our gross margin to benefit from effective supply chain management, advantageous pricing strategies and increased private label sales. Our actual gross margin will depend on changes in product and customer mix and on amounts and timing of sales and inflationary price increases."
    },
    {
      "status": "ADDED",
      "current_title": "Current Trends and Outlook",
      "prior_title": null,
      "current_body": "Consumers’ investments in their homes, including backyard renovations, continue to be favorable. In recent years, steady increases in home values, lack of affordable new homes and increased mortgage rates have positioned homeowners to stay in their homes longer and upgrade their home environments, including their backyards. During the COVID-19 pandemic (generally 2020 through 2022), we experienced unprecedented demand as families spent more time at home and sought opportunities to create or expand home-based outdoor living and entertainment spaces. This trend had a positive impact on our financial performance during 2020 through 2022. Beginning in the latter half of 2022, these trends moderated resulting in lagging new pool construction and remodeling activities. Based on industry data, we estimate that new in-ground pool construction units decreased 3% to 5% from 62,000 units in 2024 to just below 60,000 units in 2025. As in 2024, market conditions during the majority of 2025 were challenged by generally higher interest rates than the recent past, and product cost and labor inflation, which led to consumer hesitancy on discretionary spending and some cyclical suppression of demand. These market conditions impacted new pool construction and remodeling projects, particularly in the first half of the year. Throughout the year, non-discretionary maintenance product sales were stable. As lower housing turnover and market conditions encourage consumers to stay in their homes longer, we expect that consumers will continue to invest in outdoor living spaces as they consider backyards an extension of their home space. We believe that we are well positioned to benefit from the inherent long-term growth opportunities in our industry fueled by favorable population migration trends, and product developments and technological advancements as consumers focus on more sustainable and energy-efficient products. In view of current trends, we established our outlook for 2026 based on reasonable expectations for industry demand, pricing and inflationary conditions, variable expense reductions, realization of our digital transformation initiatives and leverage of existing investments in our business. We also plan to broaden our geographic presence by opening 5 to 8 new sales centers in 2026 and by making selective acquisitions if and when appropriate opportunities arise. We base our assumptions on normal weather conditions and do not incorporate alternative weather predictions into our guidance. Favorable weather positively impacts industry activity by accelerating growth in any given year, expanding the number of available construction days, extending the pool season and pool usage and positively impacting demand for discretionary products. Conversely, unfavorable weather typically impedes growth. The following summarizes our outlook for 2026: •We expect sales to be a low single digit increase compared to 2025, impacted by the following factors and assumptions: We expect sales to be a low single digit increase compared to 2025, impacted by the following factors and assumptions: onormal weather patterns for 2026; normal weather patterns for 2026; oslight growth in sales of pool maintenance products; slight growth in sales of pool maintenance products; oconsistent new construction units to 2025; consistent new construction units to 2025; oflat to slightly up renovation and remodel activity; flat to slightly up renovation and remodel activity; oinflationary product cost increases, which generally pass through to customers, of approximately 1% to 2%; and inflationary product cost increases, which generally pass through to customers, of approximately 1% to 2%; and othe same number of selling days each quarter compared to 2025. the same number of selling days each quarter compared to 2025. •We project gross margin for the full year of 2026 to be similar to our 2025 gross margin of 29.7%. We expect our gross margin to benefit from effective supply chain management, advantageous pricing strategies and increased private label sales. 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 project gross margin for the full year of 2026 to be similar to our 2025 gross margin of 29.7%. We expect our gross margin to benefit from effective supply chain management, advantageous pricing strategies and increased private label sales. Our actual gross margin will depend on changes in product and customer mix and on amounts and timing of sales and inflationary price increases. 29 29 •We expect to leverage our existing infrastructure and strategically manage discretionary spending. We project that our operating expenses in 2026 will be impacted by the following factors: oan increase of approximately $10.0 million to $15.0 million as performance-based compensation normalizes;o$5.0 million of spend to add greenfields to our sales center network;outilization of technological solutions to enhance capacity creation;oinflationary increases in areas such as labor and occupancy costs with some offsets from our efficiency initiatives; andoleverage from enhanced profitability efforts at our recent greenfield locations.In 2026, we expect our effective tax rate will be around 25% without the impact of ASU 2016-09. Our effective tax rate is dependent upon our results of operations and may change if actual results are different from our current expectations. Due to 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 $4.6 million benefit in our provision for income taxes for the year ended December 31, 2025 related to ASU 2016-09. We project that 2026 earnings will be in the range of $10.85 to $11.15 per diluted share. Our 2026 guidance does not include any estimated unrealized tax benefits related to stock option exercises, stock option expirations or restricted stock awards vesting in 2026. We expect to continue to use cash for the payment of dividends as and when declared by our Board and to fund opportunistic share repurchases at our discretion over the next year.The forward-looking statements in this Current Trends and Outlook 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 sensitivity of our business to weather conditions; changes in the economy, 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 Item 1A of this Form 10-K. Also see “Cautionary Statement for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995” prior to the heading “Risk Factors” in Item 1A. •We expect to leverage our existing infrastructure and strategically manage discretionary spending. We project that our operating expenses in 2026 will be impacted by the following factors: We expect to leverage our existing infrastructure and strategically manage discretionary spending. We project that our operating expenses in 2026 will be impacted by the following factors: oan increase of approximately $10.0 million to $15.0 million as performance-based compensation normalizes; an increase of approximately $10.0 million to $15.0 million as performance-based compensation normalizes; o$5.0 million of spend to add greenfields to our sales center network; $5.0 million of spend to add greenfields to our sales center network; outilization of technological solutions to enhance capacity creation; utilization of technological solutions to enhance capacity creation; oinflationary increases in areas such as labor and occupancy costs with some offsets from our efficiency initiatives; and inflationary increases in areas such as labor and occupancy costs with some offsets from our efficiency initiatives; and oleverage from enhanced profitability efforts at our recent greenfield locations. leverage from enhanced profitability efforts at our recent greenfield locations. In 2026, we expect our effective tax rate will be around 25% without the impact of ASU 2016-09. Our effective tax rate is dependent upon our results of operations and may change if actual results are different from our current expectations. Due to 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 $4.6 million benefit in our provision for income taxes for the year ended December 31, 2025 related to ASU 2016-09. We project that 2026 earnings will be in the range of $10.85 to $11.15 per diluted share. Our 2026 guidance does not include any estimated unrealized tax benefits related to stock option exercises, stock option expirations or restricted stock awards vesting in 2026. We expect to continue to use cash for the payment of dividends as and when declared by our Board and to fund opportunistic share repurchases at our discretion over the next year. The forward-looking statements in this Current Trends and Outlook 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 sensitivity of our business to weather conditions; changes in the economy, 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 Item 1A of this Form 10-K. Also see “Cautionary Statement for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995” prior to the heading “Risk Factors” in Item 1A. 30 30 CRITICAL ACCOUNTING ESTIMATESCritical accounting estimates are those estimates made in accordance with U.S. generally accepted accounting principles that involve a significant level of estimation uncertainty and have had, or are reasonably likely to have, a material impact on our financial condition or results of operations. Management has discussed the development, selection and disclosure of our critical accounting estimates with the Audit Committee of our Board. Our critical accounting estimates are discussed below, including, to the extent material and reasonably available, the impact such estimates have had, or are reasonably likely to have, on our financial condition or results of operations. Allowance for Doubtful AccountsWe maintain an allowance for doubtful accounts based on an estimate of the losses we will incur if our customers do not make required payments. We perform periodic credit evaluations of our customers and typically do not require collateral. Consistent with industry practices, we generally require payment from our North American customers within 30 days, except for sales under early buy programs for which we provide extended payment terms to qualified customers. The extended terms usually require payments in equal installments in April, May and June or May and June, depending on geographic location. Credit losses have generally been within or better than our expectations.Similar to our business, our customers’ businesses are seasonal. Sales are lowest in the winter months and our past due accounts receivable balance as a percentage of total receivables generally increases during this time. We provide reserves for uncollectible accounts based on our accounts receivable aging. These reserves range from 0.05% for amounts currently due to up to 100% for specific accounts more than 60 days past due.At the end of each quarter, we perform a reserve analysis of all accounts with balances greater than $20,000 and more than 60 days past due. Additionally, we perform a separate reserve analysis on the balance of our accounts receivables with emphasis on past due accounts. We estimate future losses based upon historical bad debts, customer receivable balances, age of customer receivable balances, customers’ financial conditions and current economic trends, including certain trends in the housing market, the availability of consumer credit and general economic conditions (as commonly measured by GDP). We monitor housing market trends through review of the House Price Index as published by the Federal Housing Finance Agency, which measures the movement of single-family home prices. During the year, we write off account balances when we have exhausted reasonable collection efforts and determined that the likelihood of collection is remote. These write-offs are charged against our allowance for doubtful accounts. In the past five years, write-offs have averaged approximately 0.10% of net sales annually. Write-offs as a percentage of net sales approximated 0.10% in 2025, 0.16% in 2024 and 0.12% in 2023. We expect that write-offs will approximate 0.10% of net sales in 2026.At the end of each fiscal year, we prepare a hindsight analysis by comparing the prior year-end allowance for doubtful accounts balance to (i) current year write-offs and (ii) any significantly aged outstanding receivable balances. Based on our most recent hindsight analysis, we concluded that the prior year allowance was within a range of acceptable estimates and that our estimation methodology is appropriate.If the allowance for doubtful accounts increased or decreased by 20% at December 31, 2025, pretax income would change by approximately $1.6 million and earnings per share would change by approximately $0.03 per diluted share (based on the number of weighted average diluted shares outstanding for the year ended December 31, 2025)."
    },
    {
      "status": "ADDED",
      "current_title": "CRITICAL ACCOUNTING ESTIMATES",
      "prior_title": null,
      "current_body": "Critical accounting estimates are those estimates made in accordance with U.S. generally accepted accounting principles that involve a significant level of estimation uncertainty and have had, or are reasonably likely to have, a material impact on our financial condition or results of operations. Management has discussed the development, selection and disclosure of our critical accounting estimates with the Audit Committee of our Board. Our critical accounting estimates are discussed below, including, to the extent material and reasonably available, the impact such estimates have had, or are reasonably likely to have, on our financial condition or results of operations."
    },
    {
      "status": "ADDED",
      "current_title": "Allowance for Doubtful Accounts",
      "prior_title": null,
      "current_body": "We maintain an allowance for doubtful accounts based on an estimate of the losses we will incur if our customers do not make required payments. We perform periodic credit evaluations of our customers and typically do not require collateral. Consistent with industry practices, we generally require payment from our North American customers within 30 days, except for sales under early buy programs for which we provide extended payment terms to qualified customers. The extended terms usually require payments in equal installments in April, May and June or May and June, depending on geographic location. Credit losses have generally been within or better than our expectations. Similar to our business, our customers’ businesses are seasonal. Sales are lowest in the winter months and our past due accounts receivable balance as a percentage of total receivables generally increases during this time. We provide reserves for uncollectible accounts based on our accounts receivable aging. These reserves range from 0.05% for amounts currently due to up to 100% for specific accounts more than 60 days past due. At the end of each quarter, we perform a reserve analysis of all accounts with balances greater than $20,000 and more than 60 days past due. Additionally, we perform a separate reserve analysis on the balance of our accounts receivables with emphasis on past due accounts. We estimate future losses based upon historical bad debts, customer receivable balances, age of customer receivable balances, customers’ financial conditions and current economic trends, including certain trends in the housing market, the availability of consumer credit and general economic conditions (as commonly measured by GDP). We monitor housing market trends through review of the House Price Index as published by the Federal Housing Finance Agency, which measures the movement of single-family home prices. During the year, we write off account balances when we have exhausted reasonable collection efforts and determined that the likelihood of collection is remote. These write-offs are charged against our allowance for doubtful accounts. In the past five years, write-offs have averaged approximately 0.10% of net sales annually. Write-offs as a percentage of net sales approximated 0.10% in 2025, 0.16% in 2024 and 0.12% in 2023. We expect that write-offs will approximate 0.10% of net sales in 2026. At the end of each fiscal year, we prepare a hindsight analysis by comparing the prior year-end allowance for doubtful accounts balance to (i) current year write-offs and (ii) any significantly aged outstanding receivable balances. Based on our most recent hindsight analysis, we concluded that the prior year allowance was within a range of acceptable estimates and that our estimation methodology is appropriate. If the allowance for doubtful accounts increased or decreased by 20% at December 31, 2025, pretax income would change by approximately $1.6 million and earnings per share would change by approximately $0.03 per diluted share (based on the number of weighted average diluted shares outstanding for the year ended December 31, 2025). 31 31 Inventory ObsolescenceProduct inventories represent the largest asset on our balance sheet. Our goal is to minimize stock-outs to provide the highest level of service to our customers. To do this, we maintain an adequate inventory of stock keeping units (SKUs) with the highest sales volumes. At the same time, we continuously strive to better manage our slower moving classes of inventory, which are not as critical to our customers and thus, inherently turn at slower rates. We establish our reserve for inventory obsolescence based on inventory with lower sales velocity and inventory with no sales for the past 12 months, which we believe represent some exposure to inventory obsolescence. The reserve is intended to reflect the value of inventory at net realizable value. We have not changed our methodology from prior years.In evaluating the adequacy of our reserve for inventory obsolescence, we consider a combination of factors, including:•the level of inventory in relation to historical sales by product, including inventory usage based on product sales at both the sales center level and on a company-wide basis;•changes in customer preferences or regulatory requirements;•seasonal fluctuations in inventory levels;•geographic location; and•superseded products and new product offerings.We periodically adjust our reserve for inventory obsolescence as changes occur in the above-identified factors. At the end of each fiscal year, we prepare a hindsight analysis by comparing the prior year-end obsolescence reserve balance to (i) current year inventory write-offs and (ii) the value of products with no sales for the past 12 months that remain in inventory. Based on our most recent hindsight analysis, we concluded that our prior year reserve was within a range of acceptable estimates and that our estimation methodology is appropriate.If the reserve for inventory obsolescence increased or decreased by 20% at December 31, 2025, pretax income would change by approximately $4.8 million and earnings per share would change by approximately $0.10 per diluted share (based on the number of weighted average diluted shares outstanding for the year ended December 31, 2025).Vendor ProgramsMany of our vendor arrangements provide for us to receive specified amounts of consideration when we achieve certain measures. These measures generally relate to the volume level of purchases from our vendors, or our net cost of products sold, and may include negotiated pricing arrangements. We account for consideration under vendor programs as a reduction of the prices of the vendor’s products and therefore a reduction of product inventories until we sell the product, at which time we recognize such consideration as a reduction of cost of sales in our income statement.Throughout the year, we estimate the amount earned based on our expectation of total purchases for the fiscal year relative to the purchase levels that mark our progress toward earning consideration under each program. We accrue vendor program benefits on a monthly basis using these estimates provided that we determine they are probable and reasonably estimable. Our estimates for annual purchases, future inventory levels and sales of qualifying products are driven by our sales projections, which can be significantly impacted by a number of external factors including changes in economic conditions and weather. Changes in our purchasing mix also impact our estimates, as certain program rates can vary depending on our volume of purchases from specific vendors. We continually revise these estimates throughout the year to reflect actual purchase levels and identifiable trends. As a result, our estimated quarterly vendor program benefits accrual may include cumulative catch-up adjustments to reflect any changes in our estimates between reporting periods. These adjustments have a greater impact on gross margin in the fourth quarter since it is our seasonally slowest quarter and because the majority of our vendor arrangements are based on calendar year periods. We update our estimates for these arrangements at year end to reflect actual annual purchase or sales levels. In the first quarter of the subsequent year, we prepare a hindsight analysis by comparing actual vendor credits received to the prior year vendor receivable balances. Based on our most recent hindsight analysis, we concluded that our vendor program estimates were within a range of acceptable estimates and that our estimation methodology is appropriate."
    },
    {
      "status": "ADDED",
      "current_title": "Inventory Obsolescence",
      "prior_title": null,
      "current_body": "Product inventories represent the largest asset on our balance sheet. Our goal is to minimize stock-outs to provide the highest level of service to our customers. To do this, we maintain an adequate inventory of stock keeping units (SKUs) with the highest sales volumes. At the same time, we continuously strive to better manage our slower moving classes of inventory, which are not as critical to our customers and thus, inherently turn at slower rates. We establish our reserve for inventory obsolescence based on inventory with lower sales velocity and inventory with no sales for the past 12 months, which we believe represent some exposure to inventory obsolescence. The reserve is intended to reflect the value of inventory at net realizable value. We have not changed our methodology from prior years. In evaluating the adequacy of our reserve for inventory obsolescence, we consider a combination of factors, including: •the level of inventory in relation to historical sales by product, including inventory usage based on product sales at both the sales center level and on a company-wide basis; the level of inventory in relation to historical sales by product, including inventory usage based on product sales at both the sales center level and on a company-wide basis; •changes in customer preferences or regulatory requirements; changes in customer preferences or regulatory requirements; •seasonal fluctuations in inventory levels; seasonal fluctuations in inventory levels; •geographic location; and geographic location; and •superseded products and new product offerings. superseded products and new product offerings. We periodically adjust our reserve for inventory obsolescence as changes occur in the above-identified factors. At the end of each fiscal year, we prepare a hindsight analysis by comparing the prior year-end obsolescence reserve balance to (i) current year inventory write-offs and (ii) the value of products with no sales for the past 12 months that remain in inventory. Based on our most recent hindsight analysis, we concluded that our prior year reserve was within a range of acceptable estimates and that our estimation methodology is appropriate. If the reserve for inventory obsolescence increased or decreased by 20% at December 31, 2025, pretax income would change by approximately $4.8 million and earnings per share would change by approximately $0.10 per diluted share (based on the number of weighted average diluted shares outstanding for the year ended December 31, 2025)."
    },
    {
      "status": "ADDED",
      "current_title": "Vendor Programs",
      "prior_title": null,
      "current_body": "Many of our vendor arrangements provide for us to receive specified amounts of consideration when we achieve certain measures. These measures generally relate to the volume level of purchases from our vendors, or our net cost of products sold, and may include negotiated pricing arrangements. We account for consideration under vendor programs as a reduction of the prices of the vendor’s products and therefore a reduction of product inventories until we sell the product, at which time we recognize such consideration as a reduction of cost of sales in our income statement. Throughout the year, we estimate the amount earned based on our expectation of total purchases for the fiscal year relative to the purchase levels that mark our progress toward earning consideration under each program. We accrue vendor program benefits on a monthly basis using these estimates provided that we determine they are probable and reasonably estimable. Our estimates for annual purchases, future inventory levels and sales of qualifying products are driven by our sales projections, which can be significantly impacted by a number of external factors including changes in economic conditions and weather. Changes in our purchasing mix also impact our estimates, as certain program rates can vary depending on our volume of purchases from specific vendors. We continually revise these estimates throughout the year to reflect actual purchase levels and identifiable trends. As a result, our estimated quarterly vendor program benefits accrual may include cumulative catch-up adjustments to reflect any changes in our estimates between reporting periods. These adjustments have a greater impact on gross margin in the fourth quarter since it is our seasonally slowest quarter and because the majority of our vendor arrangements are based on calendar year periods. We update our estimates for these arrangements at year end to reflect actual annual purchase or sales levels. In the first quarter of the subsequent year, we prepare a hindsight analysis by comparing actual vendor credits received to the prior year vendor receivable balances. Based on our most recent hindsight analysis, we concluded that our vendor program estimates were within a range of acceptable estimates and that our estimation methodology is appropriate. 32 32 If market conditions were to change, vendors may change the terms of some or all of these programs. Although such changes would not affect the amounts we have recorded related to products already purchased, they may lower or raise our cost for products purchased and sold in future periods.Income TaxesWe record deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using currently enacted rates and laws that will be in effect when we expect the differences to reverse. Due to changing tax laws and state income tax rates, significant judgment is required to estimate the effective tax rate expected to apply to tax differences that are expected to reverse in the future.We record Global Intangible Low Tax Income (GILTI) on foreign earnings as period costs if and when incurred. We have not realized any impacts since the December 2017 enactment of U.S. tax reform. As of December 31, 2025, U.S. income taxes were not provided on the earnings or cash balances of our foreign subsidiaries, outside of the provisions of the transition tax from U.S. tax reform. As we have historically invested or expect to invest the undistributed earnings indefinitely to fund current cash flow needs in the countries where held, additional income tax provisions may be required. Determining the amount of unrecognized deferred tax liability on these undistributed earnings and cash balances is not practicable due to the complexity of tax laws and regulations and the varying circumstances, tax treatments and timing of any future repatriation. We operate in 41 states, 1 United States territory and 11 foreign countries. We are subject to regular audits by federal, state and foreign tax authorities, and the amount of income taxes we pay is subject to adjustment by the applicable tax authorities. We recognize a benefit from an uncertain tax position only after determining it is more likely than not that the tax position will withstand examination by the applicable taxing authority. Our estimate for the potential outcome of any uncertain tax issue is highly judgmental. We regularly evaluate our tax positions and incorporate these expectations into our reserve estimates. We believe we have adequately provided for any reasonably foreseeable outcome related to these matters. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved, or when statutes of limitation on potential assessments expire. These adjustments may include changes in valuation allowances that we have established. As a result of these uncertainties, our total income tax provision may fluctuate on a quarterly basis.Each year, we prepare a return to provision analysis upon filing our income tax returns. Based on our most recent hindsight analysis, we concluded that our prior year income tax provision was within a range of acceptable estimates and that our provision calculation methodology is appropriate. Differences between our effective income tax rate and federal and state statutory tax rates are primarily due to excess tax benefits associated with the exercise of deductible nonqualified stock options and the lapse of restrictions on deductible restricted stock awards. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law in the U.S., including a broad range of tax reform provisions. We currently do not expect the changes resulting from the OBBBA to have a material impact on our income tax provision. Performance-Based Compensation AccrualThe Compensation and Human Capital Management Committee of our Board (Compensation Committee) and our management have designed compensation programs intended to create a performance culture. The primary objectives of our compensation programs are to attract, motivate, reward and retain our employees without leading to unnecessary risk taking. Our compensation packages include bonus plans that are specific to groups of eligible participants and their levels and areas of responsibility. The majority of our bonus plans consist of annual cash payments that are based primarily on objective performance criteria. We calculate bonuses based on the achievement of certain key measurable financial and operational results, including operating income. We use an annual cash performance award (annual bonus) to focus corporate behavior on short-term goals for growth, financial performance and other specific financial and business improvement metrics. Management sets the company’s annual bonus objectives at the beginning of the bonus plan year using both historical information and forecasted results of operations for the current plan year. Management also establishes specific business improvement objectives for both our operating units and corporate employees. The Compensation Committee approves objectives for annual bonus plans involving executive management. If market conditions were to change, vendors may change the terms of some or all of these programs. Although such changes would not affect the amounts we have recorded related to products already purchased, they may lower or raise our cost for products purchased and sold in future periods."
    },
    {
      "status": "ADDED",
      "current_title": "Income Taxes",
      "prior_title": null,
      "current_body": "We record deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using currently enacted rates and laws that will be in effect when we expect the differences to reverse. Due to changing tax laws and state income tax rates, significant judgment is required to estimate the effective tax rate expected to apply to tax differences that are expected to reverse in the future. We record Global Intangible Low Tax Income (GILTI) on foreign earnings as period costs if and when incurred. We have not realized any impacts since the December 2017 enactment of U.S. tax reform. As of December 31, 2025, U.S. income taxes were not provided on the earnings or cash balances of our foreign subsidiaries, outside of the provisions of the transition tax from U.S. tax reform. As we have historically invested or expect to invest the undistributed earnings indefinitely to fund current cash flow needs in the countries where held, additional income tax provisions may be required. Determining the amount of unrecognized deferred tax liability on these undistributed earnings and cash balances is not practicable due to the complexity of tax laws and regulations and the varying circumstances, tax treatments and timing of any future repatriation. We operate in 41 states, 1 United States territory and 11 foreign countries. We are subject to regular audits by federal, state and foreign tax authorities, and the amount of income taxes we pay is subject to adjustment by the applicable tax authorities. We recognize a benefit from an uncertain tax position only after determining it is more likely than not that the tax position will withstand examination by the applicable taxing authority. Our estimate for the potential outcome of any uncertain tax issue is highly judgmental. We regularly evaluate our tax positions and incorporate these expectations into our reserve estimates. We believe we have adequately provided for any reasonably foreseeable outcome related to these matters. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved, or when statutes of limitation on potential assessments expire. These adjustments may include changes in valuation allowances that we have established. As a result of these uncertainties, our total income tax provision may fluctuate on a quarterly basis. Each year, we prepare a return to provision analysis upon filing our income tax returns. Based on our most recent hindsight analysis, we concluded that our prior year income tax provision was within a range of acceptable estimates and that our provision calculation methodology is appropriate. Differences between our effective income tax rate and federal and state statutory tax rates are primarily due to excess tax benefits associated with the exercise of deductible nonqualified stock options and the lapse of restrictions on deductible restricted stock awards. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law in the U.S., including a broad range of tax reform provisions. We currently do not expect the changes resulting from the OBBBA to have a material impact on our income tax provision."
    },
    {
      "status": "ADDED",
      "current_title": "Performance-Based Compensation Accrual",
      "prior_title": null,
      "current_body": "The Compensation and Human Capital Management Committee of our Board (Compensation Committee) and our management have designed compensation programs intended to create a performance culture. The primary objectives of our compensation programs are to attract, motivate, reward and retain our employees without leading to unnecessary risk taking. Our compensation packages include bonus plans that are specific to groups of eligible participants and their levels and areas of responsibility. The majority of our bonus plans consist of annual cash payments that are based primarily on objective performance criteria. We calculate bonuses based on the achievement of certain key measurable financial and operational results, including operating income. We use an annual cash performance award (annual bonus) to focus corporate behavior on short-term goals for growth, financial performance and other specific financial and business improvement metrics. Management sets the company’s annual bonus objectives at the beginning of the bonus plan year using both historical information and forecasted results of operations for the current plan year. Management also establishes specific business improvement objectives for both our operating units and corporate employees. The Compensation Committee approves objectives for annual bonus plans involving executive management. 33 33 We record annual performance-based compensation accruals based on operating income achieved in a quarter as a percentage of total expected operating income for the year. Our estimate of full-year operating income incorporates management’s assessment of expected incentive payouts under the bonus plan objectives and is regularly updated throughout the year.Our quarterly performance-based compensation expense and accrual balances may vary relative to actual annual bonus expense and payouts due to differences between estimated and actual performance and the discretionary components of the bonus plans.We generally make bonus payments at the end of February following the most recently completed fiscal year. Each year, we compare the actual bonus payouts to amounts accrued at the previous year’s end to determine the accuracy of our performance-based compensation estimates. Based on our most recent hindsight analysis, we concluded that our performance-based compensation accrual balances were within a reasonable range of acceptable estimates and that our estimation methodologies are appropriate.Impairment of Goodwill and Other Indefinite-Lived Intangible AssetsGoodwill is our largest intangible asset. At December 31, 2025, our goodwill balance was $707.3 million, representing approximately 20% of total assets. Goodwill represents the excess of the amount we paid to acquire a company over the estimated fair value of tangible assets and identifiable intangible assets acquired less liabilities assumed.We perform a goodwill impairment test in the fourth quarter of each year or on a more frequent basis if events or changes in circumstances occur that indicate potential impairment. We have the option of first analyzing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. When a qualitative goodwill test is performed, we analyze factors to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test. The evaluation of qualitative factors includes an assessment of relevant facts, events and circumstances including but not limited to: macroeconomic conditions, industry and market conditions, and the current and forecasted financial performance of the reporting unit. In combination with our qualitative test, we also estimate the fair value of our reporting units by projecting company-wide future cash flows using management’s assumptions for sales growth rates, operating margins and discount rates. Estimated earnings multiples are then used to estimate the fair value of each reporting unit. These estimates can significantly affect the outcome of our impairment test. To the extent our qualitative test indicates it is more likely than not that the fair value of a reporting unit is less than the carrying amount or for any reporting unit where we only perform a quantitative test, we perform a discounted cash flow analysis at the reporting unit level to estimate its fair value. If the carrying value of the reporting unit exceeds the fair value, we record a goodwill impairment charge for the difference, up to the carrying value of the goodwill. The fair value estimates used in our impairment test are determined using discounted cash flow models, which require the use of significant unobservable inputs, representative of a Level 3 fair value measurement. Since we define an operating segment as an individual sales center and we do not have operations below the sales center level, we define a reporting unit as an individual sales center. To test the reasonableness of our fair value estimate, we compared our company-wide estimated fair value to our market capitalization as of the date of our annual impairment test. In 2025, our company-wide estimated fair value was in line with our market capitalization. To facilitate a sensitivity analysis, we reduced our consolidated fair value estimate to reflect more conservative discounted cash flow assumptions, the sensitivity of a 50 basis point increase in our estimated weighted average cost of capital or a 50 basis point decrease in the estimated perpetuity growth rate. Our sensitivity analysis resulted in a fair value modestly lower than our market capitalization and did not result in the identification of additional locations for which it is more likely than not that the fair value is less than the carrying amount. If our assumptions or estimates in our fair value calculations change or if operating results are less than forecasted, we could incur impairment charges in future periods. Impairment charges would decrease operating income, negatively impact diluted EPS and result in lower asset values on our balance sheet. As of October 1, 2025, we had 253 reporting units with allocated goodwill balances. Our most significant goodwill balance of $401.6 million was related to our Porpoise Pool & Patio reporting unit. The average goodwill balance of our remaining reporting units was $1.2 million. We record annual performance-based compensation accruals based on operating income achieved in a quarter as a percentage of total expected operating income for the year. Our estimate of full-year operating income incorporates management’s assessment of expected incentive payouts under the bonus plan objectives and is regularly updated throughout the year. Our quarterly performance-based compensation expense and accrual balances may vary relative to actual annual bonus expense and payouts due to differences between estimated and actual performance and the discretionary components of the bonus plans. We generally make bonus payments at the end of February following the most recently completed fiscal year. Each year, we compare the actual bonus payouts to amounts accrued at the previous year’s end to determine the accuracy of our performance-based compensation estimates. Based on our most recent hindsight analysis, we concluded that our performance-based compensation accrual balances were within a reasonable range of acceptable estimates and that our estimation methodologies are appropriate."
    },
    {
      "status": "ADDED",
      "current_title": "Impairment of Goodwill and Other Indefinite-Lived Intangible Assets",
      "prior_title": null,
      "current_body": "Goodwill is our largest intangible asset. At December 31, 2025, our goodwill balance was $707.3 million, representing approximately 20% of total assets. Goodwill represents the excess of the amount we paid to acquire a company over the estimated fair value of tangible assets and identifiable intangible assets acquired less liabilities assumed. We perform a goodwill impairment test in the fourth quarter of each year or on a more frequent basis if events or changes in circumstances occur that indicate potential impairment. We have the option of first analyzing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. When a qualitative goodwill test is performed, we analyze factors to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test. The evaluation of qualitative factors includes an assessment of relevant facts, events and circumstances including but not limited to: macroeconomic conditions, industry and market conditions, and the current and forecasted financial performance of the reporting unit. In combination with our qualitative test, we also estimate the fair value of our reporting units by projecting company-wide future cash flows using management’s assumptions for sales growth rates, operating margins and discount rates. Estimated earnings multiples are then used to estimate the fair value of each reporting unit. These estimates can significantly affect the outcome of our impairment test. To the extent our qualitative test indicates it is more likely than not that the fair value of a reporting unit is less than the carrying amount or for any reporting unit where we only perform a quantitative test, we perform a discounted cash flow analysis at the reporting unit level to estimate its fair value. If the carrying value of the reporting unit exceeds the fair value, we record a goodwill impairment charge for the difference, up to the carrying value of the goodwill. The fair value estimates used in our impairment test are determined using discounted cash flow models, which require the use of significant unobservable inputs, representative of a Level 3 fair value measurement. Since we define an operating segment as an individual sales center and we do not have operations below the sales center level, we define a reporting unit as an individual sales center. To test the reasonableness of our fair value estimate, we compared our company-wide estimated fair value to our market capitalization as of the date of our annual impairment test. In 2025, our company-wide estimated fair value was in line with our market capitalization. To facilitate a sensitivity analysis, we reduced our consolidated fair value estimate to reflect more conservative discounted cash flow assumptions, the sensitivity of a 50 basis point increase in our estimated weighted average cost of capital or a 50 basis point decrease in the estimated perpetuity growth rate. Our sensitivity analysis resulted in a fair value modestly lower than our market capitalization and did not result in the identification of additional locations for which it is more likely than not that the fair value is less than the carrying amount. If our assumptions or estimates in our fair value calculations change or if operating results are less than forecasted, we could incur impairment charges in future periods. Impairment charges would decrease operating income, negatively impact diluted EPS and result in lower asset values on our balance sheet. As of October 1, 2025, we had 253 reporting units with allocated goodwill balances. Our most significant goodwill balance of $401.6 million was related to our Porpoise Pool & Patio reporting unit. The average goodwill balance of our remaining reporting units was $1.2 million. 34 34 In October 2025, we performed our annual goodwill impairment test and recorded an aggregate goodwill impairment charge of $0.3 million related to our reporting unit in Germany and the closure of a Horizon reporting unit in Florida. We performed a discounted cash flow analysis for these reporting units and determined that the estimated fair value of the reporting units no longer exceeded their carrying value. In connection with our testing, we also identified one of our reporting units in Tennessee with goodwill of $12.1 million as most at risk for goodwill impairment due to marginal results in recent years. We performed a discounted cash flow analysis for this reporting unit and its estimated fair value exceeded its carrying value by 7.0%. The most sensitive assumptions related to our fair value for this location relate to the timing of macroeconomic market improvements and their impact on future projected sales growth.In October 2024, we performed our annual goodwill impairment test and did not record any goodwill impairment at the reporting unit level.In September 2023, we recorded an aggregate goodwill impairment charge of $0.6 million, primarily related to one of our Horizon reporting units in Texas that we previously identified as being most at risk of goodwill impairment. We had been monitoring this location’s results, which came in below expectations at the end of the 2023 season. We performed an interim goodwill impairment analysis, which included a discounted cash flow analysis, and determined that the estimated fair value of the reporting unit no longer exceeded its carrying value. Following this, in October 2023, we performed our annual goodwill impairment test and did not recognize any goodwill impairment at the reporting unit level. Recent Accounting PronouncementsSee Note 1 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K for details. In October 2025, we performed our annual goodwill impairment test and recorded an aggregate goodwill impairment charge of $0.3 million related to our reporting unit in Germany and the closure of a Horizon reporting unit in Florida. We performed a discounted cash flow analysis for these reporting units and determined that the estimated fair value of the reporting units no longer exceeded their carrying value. In connection with our testing, we also identified one of our reporting units in Tennessee with goodwill of $12.1 million as most at risk for goodwill impairment due to marginal results in recent years. We performed a discounted cash flow analysis for this reporting unit and its estimated fair value exceeded its carrying value by 7.0%. The most sensitive assumptions related to our fair value for this location relate to the timing of macroeconomic market improvements and their impact on future projected sales growth. In October 2024, we performed our annual goodwill impairment test and did not record any goodwill impairment at the reporting unit level. In September 2023, we recorded an aggregate goodwill impairment charge of $0.6 million, primarily related to one of our Horizon reporting units in Texas that we previously identified as being most at risk of goodwill impairment. We had been monitoring this location’s results, which came in below expectations at the end of the 2023 season. We performed an interim goodwill impairment analysis, which included a discounted cash flow analysis, and determined that the estimated fair value of the reporting unit no longer exceeded its carrying value. Following this, in October 2023, we performed our annual goodwill impairment test and did not recognize any goodwill impairment at the reporting unit level."
    },
    {
      "status": "ADDED",
      "current_title": "Recent Accounting Pronouncements",
      "prior_title": null,
      "current_body": "See Note 1 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K for details. 35 35 RESULTS OF OPERATIONSThe table below summarizes information derived from our Consolidated Statements of Income expressed as a percentage of net sales for the past three fiscal years: Year Ended December 31, 2025 2024 2023 Net sales 100.0% 100.0% 100.0% Cost of sales 70.3 70.3 70.0 Gross profit 29.7 29.7 30.0 Operating expenses 18.8 18.0 16.5 Operating income 11.0 11.6 13.5 Interest and other non-operating expenses, net 0.9 0.9 1.1 Income before income taxes and equity in earnings 10.1% 10.7% 12.4% Note: Due to rounding, percentages may not add to operating income or income before income taxes and equity in earnings.Our discussion of consolidated operating results includes the operating results from acquisitions in 2025, 2024 and 2023. We have included the results of operations in our consolidated results since the respective acquisition dates.Fiscal Year 2025 compared to Fiscal Year 2024 Base BusinessWhen 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-K as base business results for the quarter and year ended December 31, 2025 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 2025: December 31, 2024 448 Acquired locations 3 New locations 8 Consolidated/closed locations (3) December 31, 2025 456 For information about our recent acquisitions, see Note 2 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K."
    },
    {
      "status": "ADDED",
      "current_title": "RESULTS OF OPERATIONS",
      "prior_title": null,
      "current_body": "The table below summarizes information derived from our Consolidated Statements of Income expressed as a percentage of net sales for the past three fiscal years:"
    },
    {
      "status": "ADDED",
      "current_title": "Year Ended December 31,",
      "prior_title": null,
      "current_body": "2025 2024 2023 Net sales 100.0% 100.0% 100.0% Cost of sales 70.3 70.3 70.0 Gross profit 29.7 29.7 30.0 Operating expenses 18.8 18.0 16.5 Operating income 11.0 11.6 13.5 Interest and other non-operating expenses, net 0.9 0.9 1.1 Income before income taxes and equity in earnings 10.1% 10.7% 12.4% Note: Due to rounding, percentages may not add to operating income or income before income taxes and equity in earnings. Our discussion of consolidated operating results includes the operating results from acquisitions in 2025, 2024 and 2023. We have included the results of operations in our consolidated results since the respective acquisition dates."
    },
    {
      "status": "ADDED",
      "current_title": "Base Business",
      "prior_title": null,
      "current_body": "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-K as base business results for the quarter and year ended December 31, 2025 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 2025: December 31, 2024 448 Acquired locations 3 New locations 8 Consolidated/closed locations (3) December 31, 2025 456 For information about our recent acquisitions, see Note 2 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K. 36 36 Net Sales (in millions) Year Ended December 31, 2025 2024 Change Net sales $ 5,289.4 $ 5,311.0 $ (21.6 ) –% Net sales in 2025 were consistent with 2024. During 2025, maintenance product sales held steady, indicating stable demand for non-discretionary products. Sales volumes for discretionary products declined, impacted by unfavorable macroeconomic conditions. The following factors impacted our 2025 sales and are listed in order of estimated magnitude:•stable maintenance product sales;•lower sales volume of products used in pool construction and discretionary activities (see discussion below); and•a benefit of approximately 2% to 3% from inflationary product cost increases, partially offset by 1% price deflation on some items.In 2025, sales of equipment for maintenance, renovation and new construction activities, including swimming pool heaters, pumps, lights, filters and automation devices, were flat compared to 2024 and represented approximately 31% of net sales in 2025. Sales of building materials, which are primarily used in new pool construction and remodeling, were also comparable to 2024 and represented approximately 12% of net sales in 2025. 2025 Quarterly Sales Performance Compared to 2024 Quarterly Sales Performance Quarter 2025 First Second Third Fourth Net Sales (Decline) Growth (4)% 1% 1% (1)% •In the first quarter of 2025, net sales were anchored by consistent sales of non-discretionary products while sales of discretionary products continued to feel downward pressure from macroeconomic constraints and unfavorable weather in January and February. Net sales benefited approximately 2% from inflationary product cost increases, partially offset by 1% price deflation on certain items. One less selling day also lowered sales.•Although the market environment remained constrained in the second quarter of 2025, we saw overall sales expansion and discretionary activities were less of a drag on overall sales. Net sales benefited approximately 2% to 3% from inflationary product cost increases, partially offset by 1% price deflation on certain items.•Net sales in the third quarter of 2025 were supported by stable demand for maintenance products and sales growth of building materials products. Net sales benefited approximately 3% from inflationary product cost increases, partially offset by 1% price deflation on certain items.•Sales in the fourth quarter of 2025 were impacted by lower sales volumes compared to the fourth quarter of 2024, which benefited from repair and replacement activity following Hurricanes Helene and Milton in Florida. Net sales benefited approximately 3% from inflationary product cost increases, partially offset by 1% price deflation on certain items.In addition to the sales discussion above, see further details of significant weather impacts under the subheading Seasonality and Quarterly Fluctuations below. Net Sales (in millions)"
    },
    {
      "status": "ADDED",
      "current_title": "Year Ended December 31,",
      "prior_title": null,
      "current_body": "2025 2024 2023 Net sales 100.0% 100.0% 100.0% Cost of sales 70.3 70.3 70.0 Gross profit 29.7 29.7 30.0 Operating expenses 18.8 18.0 16.5 Operating income 11.0 11.6 13.5 Interest and other non-operating expenses, net 0.9 0.9 1.1 Income before income taxes and equity in earnings 10.1% 10.7% 12.4% Note: Due to rounding, percentages may not add to operating income or income before income taxes and equity in earnings. Our discussion of consolidated operating results includes the operating results from acquisitions in 2025, 2024 and 2023. We have included the results of operations in our consolidated results since the respective acquisition dates."
    },
    {
      "status": "ADDED",
      "current_title": "2025 Quarterly Sales Performance Compared to 2024 Quarterly Sales Performance",
      "prior_title": null,
      "current_body": "Quarter 2025 First Second Third Fourth Net Sales (Decline) Growth (4)% 1% 1% (1)% •In the first quarter of 2025, net sales were anchored by consistent sales of non-discretionary products while sales of discretionary products continued to feel downward pressure from macroeconomic constraints and unfavorable weather in January and February. Net sales benefited approximately 2% from inflationary product cost increases, partially offset by 1% price deflation on certain items. One less selling day also lowered sales. In the first quarter of 2025, net sales were anchored by consistent sales of non-discretionary products while sales of discretionary products continued to feel downward pressure from macroeconomic constraints and unfavorable weather in January and February. Net sales benefited approximately 2% from inflationary product cost increases, partially offset by 1% price deflation on certain items. One less selling day also lowered sales. •Although the market environment remained constrained in the second quarter of 2025, we saw overall sales expansion and discretionary activities were less of a drag on overall sales. Net sales benefited approximately 2% to 3% from inflationary product cost increases, partially offset by 1% price deflation on certain items. Although the market environment remained constrained in the second quarter of 2025, we saw overall sales expansion and discretionary activities were less of a drag on overall sales. Net sales benefited approximately 2% to 3% from inflationary product cost increases, partially offset by 1% price deflation on certain items. •Net sales in the third quarter of 2025 were supported by stable demand for maintenance products and sales growth of building materials products. Net sales benefited approximately 3% from inflationary product cost increases, partially offset by 1% price deflation on certain items. Net sales in the third quarter of 2025 were supported by stable demand for maintenance products and sales growth of building materials products. Net sales benefited approximately 3% from inflationary product cost increases, partially offset by 1% price deflation on certain items. •Sales in the fourth quarter of 2025 were impacted by lower sales volumes compared to the fourth quarter of 2024, which benefited from repair and replacement activity following Hurricanes Helene and Milton in Florida. Net sales benefited approximately 3% from inflationary product cost increases, partially offset by 1% price deflation on certain items. Sales in the fourth quarter of 2025 were impacted by lower sales volumes compared to the fourth quarter of 2024, which benefited from repair and replacement activity following Hurricanes Helene and Milton in Florida. Net sales benefited approximately 3% from inflationary product cost increases, partially offset by 1% price deflation on certain items. In addition to the sales discussion above, see further details of significant weather impacts under the subheading Seasonality and Quarterly Fluctuations below. 37 37 Gross Profit (in millions) Year Ended December 31, 2025 2024 Change Gross profit $ 1,572.5 $ 1,575.3 $ (2.8 ) –% Gross margin 29.7 % 29.7 % Gross margin was 29.7% in 2025 and 2024. In 2024, gross margin benefited 20 basis points from the reversal of $12.6 million for estimated import taxes. In 2025, our gross margin reflected positive impacts from our strategic pricing and supply chain initiatives, partially offset by a less advantageous customer mix and the absence of the import tax reversal recognized in the prior year. Operating Expenses (in millions) Year Ended December 31, 2025 2024 Change Selling and administrative expenses $ 992.3 $ 958.1 $ 34.2 4 % Operating expenses as a percentage of net sales 18.8 % 18.0 % Operating expenses increased 4%, or $34.2 million, to $992.3 million in 2025, up from $958.1 million in 2024. Our operating expenses have increased due to investments in our technology initiatives and expanding our sales center network, along with inflationary impacts on rent, base wages and insurance.Interest and Other Non-operating Expenses, netInterest and other non-operating expenses, net decreased $3.5 million compared to 2024, primarily due to a decrease in the weighted average effective interest rate between periods, which includes benefits from our 2025 refinancings. Our weighted average effective interest rate was 4.5% in 2025 and 5.2% in 2024 on average outstanding debt of $1.0 billion in 2025 versus $956.3 million in 2024. Income TaxesOur effective income tax rate was 23.8% at December 31, 2025 and 23.4% at December 31, 2024. We recorded a $4.6 million, or $0.12 per diluted share, benefit from ASU 2016-09 for the year ended December 31, 2025 compared to a benefit of $8.8 million, or $0.23 per diluted share, realized in 2024. Without the benefits from ASU 2016-09, our effective tax rate was 24.7% for the year ended 2025 and 25.0% for the year ended 2024.Net Income and Earnings Per ShareNet income decreased to $406.4 million in 2025 compared to $434.3 million in 2024. Earnings per diluted share declined 4% to $10.85 in 2025 compared to $11.30 in 2024."
    },
    {
      "status": "ADDED",
      "current_title": "Year Ended December 31,",
      "prior_title": null,
      "current_body": "2025 2024 2023 Net sales 100.0% 100.0% 100.0% Cost of sales 70.3 70.3 70.0 Gross profit 29.7 29.7 30.0 Operating expenses 18.8 18.0 16.5 Operating income 11.0 11.6 13.5 Interest and other non-operating expenses, net 0.9 0.9 1.1 Income before income taxes and equity in earnings 10.1% 10.7% 12.4% Note: Due to rounding, percentages may not add to operating income or income before income taxes and equity in earnings. Our discussion of consolidated operating results includes the operating results from acquisitions in 2025, 2024 and 2023. We have included the results of operations in our consolidated results since the respective acquisition dates."
    },
    {
      "status": "ADDED",
      "current_title": "Year Ended December 31,",
      "prior_title": null,
      "current_body": "2025 2024 2023 Net sales 100.0% 100.0% 100.0% Cost of sales 70.3 70.3 70.0 Gross profit 29.7 29.7 30.0 Operating expenses 18.8 18.0 16.5 Operating income 11.0 11.6 13.5 Interest and other non-operating expenses, net 0.9 0.9 1.1 Income before income taxes and equity in earnings 10.1% 10.7% 12.4% Note: Due to rounding, percentages may not add to operating income or income before income taxes and equity in earnings. Our discussion of consolidated operating results includes the operating results from acquisitions in 2025, 2024 and 2023. We have included the results of operations in our consolidated results since the respective acquisition dates."
    },
    {
      "status": "ADDED",
      "current_title": "Interest and Other Non-operating Expenses, net",
      "prior_title": null,
      "current_body": "Interest and other non-operating expenses, net decreased $3.5 million compared to 2024, primarily due to a decrease in the weighted average effective interest rate between periods, which includes benefits from our 2025 refinancings. Our weighted average effective interest rate was 4.5% in 2025 and 5.2% in 2024 on average outstanding debt of $1.0 billion in 2025 versus $956.3 million in 2024."
    },
    {
      "status": "ADDED",
      "current_title": "Income Taxes",
      "prior_title": null,
      "current_body": "We record deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using currently enacted rates and laws that will be in effect when we expect the differences to reverse. Due to changing tax laws and state income tax rates, significant judgment is required to estimate the effective tax rate expected to apply to tax differences that are expected to reverse in the future. We record Global Intangible Low Tax Income (GILTI) on foreign earnings as period costs if and when incurred. We have not realized any impacts since the December 2017 enactment of U.S. tax reform. As of December 31, 2025, U.S. income taxes were not provided on the earnings or cash balances of our foreign subsidiaries, outside of the provisions of the transition tax from U.S. tax reform. As we have historically invested or expect to invest the undistributed earnings indefinitely to fund current cash flow needs in the countries where held, additional income tax provisions may be required. Determining the amount of unrecognized deferred tax liability on these undistributed earnings and cash balances is not practicable due to the complexity of tax laws and regulations and the varying circumstances, tax treatments and timing of any future repatriation. We operate in 41 states, 1 United States territory and 11 foreign countries. We are subject to regular audits by federal, state and foreign tax authorities, and the amount of income taxes we pay is subject to adjustment by the applicable tax authorities. We recognize a benefit from an uncertain tax position only after determining it is more likely than not that the tax position will withstand examination by the applicable taxing authority. Our estimate for the potential outcome of any uncertain tax issue is highly judgmental. We regularly evaluate our tax positions and incorporate these expectations into our reserve estimates. We believe we have adequately provided for any reasonably foreseeable outcome related to these matters. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved, or when statutes of limitation on potential assessments expire. These adjustments may include changes in valuation allowances that we have established. As a result of these uncertainties, our total income tax provision may fluctuate on a quarterly basis. Each year, we prepare a return to provision analysis upon filing our income tax returns. Based on our most recent hindsight analysis, we concluded that our prior year income tax provision was within a range of acceptable estimates and that our provision calculation methodology is appropriate. Differences between our effective income tax rate and federal and state statutory tax rates are primarily due to excess tax benefits associated with the exercise of deductible nonqualified stock options and the lapse of restrictions on deductible restricted stock awards. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law in the U.S., including a broad range of tax reform provisions. We currently do not expect the changes resulting from the OBBBA to have a material impact on our income tax provision."
    },
    {
      "status": "ADDED",
      "current_title": "Net Income and Earnings Per Share",
      "prior_title": null,
      "current_body": "Net income decreased to $406.4 million in 2025 compared to $434.3 million in 2024. Earnings per diluted share declined 4% to $10.85 in 2025 compared to $11.30 in 2024. 38 38 Reconciliation of Non-GAAP Financial MeasuresThe non-GAAP measures described below should be considered in the context of all of our other disclosures in this Form 10-K.Adjusted Diluted EPSWe have included adjusted diluted EPS, a non-GAAP financial measure, as a supplemental disclosure, because we believe this measure is useful to management, investors and others in assessing our period-to-period operating performance. Adjusted diluted EPS is a key measure used by management to demonstrate the impact of tax benefits from ASU 2016-09 on our diluted EPS and to provide investors and others with additional information about our potential future operating performance to supplement GAAP measures.We believe this measure should be considered in addition to, not as a substitute for, diluted EPS presented in accordance with GAAP, and in the context of our other disclosures in this Form 10-K. Other companies may calculate this non-GAAP financial measure differently than we do, which may limit its usefulness as a comparative measure. The table below presents a reconciliation of diluted EPS to adjusted diluted EPS. (Unaudited) Year Ended December 31, 2025 2024 Diluted EPS $ 10.85 $ 11.30 Less: ASU 2016-09 tax benefit 0.12 0.23 Adjusted diluted EPS $ 10.73 $ 11.07 Fiscal Year 2024 compared to Fiscal Year 2023 For a detailed discussion of the Results of Operations in Fiscal Year 2024 compared to Fiscal Year 2023, see the Results of Operations section of Management’s Discussion and Analysis included in Part II, Item 7 of our 2024 Annual Report on Form 10-K."
    },
    {
      "status": "ADDED",
      "current_title": "Reconciliation of Non-GAAP Financial Measures",
      "prior_title": null,
      "current_body": "The non-GAAP measures described below should be considered in the context of all of our other disclosures in this Form 10-K."
    },
    {
      "status": "ADDED",
      "current_title": "Adjusted Diluted EPS",
      "prior_title": null,
      "current_body": "We have included adjusted diluted EPS, a non-GAAP financial measure, as a supplemental disclosure, because we believe this measure is useful to management, investors and others in assessing our period-to-period operating performance. Adjusted diluted EPS is a key measure used by management to demonstrate the impact of tax benefits from ASU 2016-09 on our diluted EPS and to provide investors and others with additional information about our potential future operating performance to supplement GAAP measures. We believe this measure should be considered in addition to, not as a substitute for, diluted EPS presented in accordance with GAAP, and in the context of our other disclosures in this Form 10-K. Other companies may calculate this non-GAAP financial measure differently than we do, which may limit its usefulness as a comparative measure. The table below presents a reconciliation of diluted EPS to adjusted diluted EPS. (Unaudited) Year Ended"
    },
    {
      "status": "ADDED",
      "current_title": "December 31,",
      "prior_title": null,
      "current_body": "2025 2024 Diluted EPS $ 10.85 $ 11.30 Less: ASU 2016-09 tax benefit 0.12 0.23 Adjusted diluted EPS $ 10.73 $ 11.07"
    },
    {
      "status": "ADDED",
      "current_title": "Fiscal Year 2024 compared to Fiscal Year 2023",
      "prior_title": null,
      "current_body": "For a detailed discussion of the Results of Operations in Fiscal Year 2024 compared to Fiscal Year 2023, see the Results of Operations section of Management’s Discussion and Analysis included in Part II, Item 7 of our 2024 Annual Report on Form 10-K. 39 39 Seasonality and Quarterly FluctuationsFor discussion regarding the effects seasonality and weather have on our business, see Item 1, “Business,” of this Form 10-K.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. (Unaudited) QUARTER (in thousands) 2025 2024 First Second Third Fourth First Second Third Fourth Statement of Income Data Net sales 1,071,526 1,784,530 1,451,131 982,209 1,120,810 1,769,784 1,432,879 987,480 Gross profit 312,369 535,161 429,183 295,745 338,560 530,141 416,403 290,244 Operating income 77,538 272,670 177,987 52,008 108,720 271,481 176,353 60,651 Net income 53,545 194,258 127,013 31,587 78,885 192,439 125,701 37,300 Net sales as a % of annual net sales 20% 34% 27% 19% 21% 33% 27% 19% Gross profit as a % of annual gross profit 20% 34% 27% 19% 21% 34% 26% 18% Operating income as a % of annual operating income 13% 47% 31% 9% 18% 44% 29% 10% Balance Sheet Data Total receivables, net 497,076 576,804 443,609 347,803 527,175 577,529 425,693 314,861 Product inventories, net 1,460,680 1,330,221 1,223,809 1,454,672 1,496,947 1,295,600 1,180,491 1,289,300 Accounts payable 890,167 529,316 457,319 652,619 907,806 515,645 401,702 525,235 Total debt 1,025,090 1,229,919 1,062,002 1,199,453 979,177 1,116,553 923,829 950,356 Note: Due to rounding, the sum of quarterly percentage amounts may not equal 100%.Weather Impacts on Fiscal Year 2025 to Fiscal Year 2024 ComparisonsWeather conditions in the first quarter of 2025 were mixed across our key markets. Early January snowstorms and overall cooler temperatures through much of February negatively impacted early season sales activity. While March brought warmer and drier weather, these improvements provided only partial relief to our sales trends and were insufficient to offset the slower start to the quarter. During the first quarter of 2024, above-average temperatures in some regions, including California, contributed positively to economic activities. However, the adverse effects of cooler and wetter weather in Florida and the Southeast, and excessive precipitation in Texas and the Northeast, outweighed the positives, resulting in an overall unfavorable impact on net sales. Weather conditions in the second quarter of 2025 were generally marked by above-average temperatures and higher-than-normal precipitation. Warm conditions generally supported seasonal trends, though localized disruptions occurred due to severe storms, flash flooding and tornado outbreaks, particularly in April and May. Around mid-June, we observed intense heat across many regions, further supporting demand in key markets. Overall, while weather patterns were variable, we believe that the net impact on our results was broadly neutral. In the second quarter of 2024, weather across the U.S. was mixed, with wetter conditions in the central regions and Texas, drier conditions in the West, and warmer-than-average temperatures, especially in June, supporting maintenance activities and leading to varied impacts across our markets.Temperatures in the third quarter of 2025 were above average in several regions, including the Northwest, Midwest, South and Western regions. Localized flooding occurred early in the quarter, followed by drought conditions across the Central and Western regions. In the third quarter of 2024, temperatures were slightly warmer than the third quarter of 2025, and there were more variable weather conditions in the third quarter of 2024 with several notable weather events. Overall, weather conditions did not significantly impact our sales results for the third quarter of 2025.Weather conditions in the fourth quarter of 2025 were generally warmer than average across much of the U.S., particularly in October and November. Precipitation patterns were mixed, with localized drought conditions in parts of the central regions and variable rainfall"
    },
    {
      "status": "ADDED",
      "current_title": "Seasonality and Quarterly Fluctuations",
      "prior_title": null,
      "current_body": "For discussion regarding the effects seasonality and weather have on our business, see Item 1, “Business,” of this Form 10-K. 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. (Unaudited) QUARTER (in thousands) 2025 2024 First Second Third Fourth First Second Third Fourth"
    },
    {
      "status": "ADDED",
      "current_title": "Statement of Income Data",
      "prior_title": null,
      "current_body": "Net sales 1,071,526 1,784,530 1,451,131 982,209 1,120,810 1,769,784 1,432,879 987,480 Gross profit 312,369 535,161 429,183 295,745 338,560 530,141 416,403 290,244 Operating income 77,538 272,670 177,987 52,008 108,720 271,481 176,353 60,651 Net income 53,545 194,258 127,013 31,587 78,885 192,439 125,701 37,300 Net sales as a % of annual net sales 20% 34% 27% 19% 21% 33% 27% 19% Gross profit as a % of annual gross profit 20% 34% 27% 19% 21% 34% 26% 18% Operating income as a % of annual operating income 13% 47% 31% 9% 18% 44% 29% 10%"
    },
    {
      "status": "ADDED",
      "current_title": "Balance Sheet Data",
      "prior_title": null,
      "current_body": "Total receivables, net 497,076 576,804 443,609 347,803 527,175 577,529 425,693 314,861 Product inventories, net 1,460,680 1,330,221 1,223,809 1,454,672 1,496,947 1,295,600 1,180,491 1,289,300 Accounts payable 890,167 529,316 457,319 652,619 907,806 515,645 401,702 525,235 Total debt 1,025,090 1,229,919 1,062,002 1,199,453 979,177 1,116,553 923,829 950,356 Note: Due to rounding, the sum of quarterly percentage amounts may not equal 100%."
    },
    {
      "status": "ADDED",
      "current_title": "Weather Impacts on Fiscal Year 2025 to Fiscal Year 2024 Comparisons",
      "prior_title": null,
      "current_body": "Weather conditions in the first quarter of 2025 were mixed across our key markets. Early January snowstorms and overall cooler temperatures through much of February negatively impacted early season sales activity. While March brought warmer and drier weather, these improvements provided only partial relief to our sales trends and were insufficient to offset the slower start to the quarter. During the first quarter of 2024, above-average temperatures in some regions, including California, contributed positively to economic activities. However, the adverse effects of cooler and wetter weather in Florida and the Southeast, and excessive precipitation in Texas and the Northeast, outweighed the positives, resulting in an overall unfavorable impact on net sales. Weather conditions in the second quarter of 2025 were generally marked by above-average temperatures and higher-than-normal precipitation. Warm conditions generally supported seasonal trends, though localized disruptions occurred due to severe storms, flash flooding and tornado outbreaks, particularly in April and May. Around mid-June, we observed intense heat across many regions, further supporting demand in key markets. Overall, while weather patterns were variable, we believe that the net impact on our results was broadly neutral. In the second quarter of 2024, weather across the U.S. was mixed, with wetter conditions in the central regions and Texas, drier conditions in the West, and warmer-than-average temperatures, especially in June, supporting maintenance activities and leading to varied impacts across our markets. Temperatures in the third quarter of 2025 were above average in several regions, including the Northwest, Midwest, South and Western regions. Localized flooding occurred early in the quarter, followed by drought conditions across the Central and Western regions. In the third quarter of 2024, temperatures were slightly warmer than the third quarter of 2025, and there were more variable weather conditions in the third quarter of 2024 with several notable weather events. Overall, weather conditions did not significantly impact our sales results for the third quarter of 2025. Weather conditions in the fourth quarter of 2025 were generally warmer than average across much of the U.S., particularly in October and November. Precipitation patterns were mixed, with localized drought conditions in parts of the central regions and variable rainfall 40 40 elsewhere. In October, rainy weather in California slowed sales, which is typically among Horizon’s busier months. December brought colder temperatures and winter weather in North and Northeastern markets, consistent with normal seasonal patterns. In 2024, repair and replacement activity following Hurricanes Helene and Milton provided some weather-related benefits to Florida’s results, contributing to an increase in consolidated sales of approximately 1%. Overall, the fourth quarter of 2025 did not see similar benefits from weather conditions as the fourth quarter of 2024.Weather Impacts on Fiscal Year 2024 to Fiscal Year 2023 ComparisonsFor a detailed discussion of Weather Impacts on Fiscal Year 2024 compared to Fiscal Year 2023, see the Seasonality and Quarterly Fluctuations section of Management’s Discussion and Analysis included in Part II, Item 7 of our 2024 Annual Report on Form 10-K. Geographic AreasSince all of our sales centers have similar operations and share similar economic characteristics, we aggregate our sales centers into a single reportable segment. For additional details, see Note 1 of our “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K. For a breakdown of net sales and property, plant and equipment between our United States and international operations, see Item 1, “Business,” of this Form 10-K.LIQUIDITY AND CAPITAL RESOURCESLiquidity 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: •cash flows generated from operating activities;•the adequacy of available bank lines of credit;•the quality of our receivables;•acquisitions;•dividend payments;•capital expenditures;•changes in income tax laws and regulations; •the timing and extent of share repurchases; and•the ability to attract long-term capital with satisfactory terms.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. elsewhere. In October, rainy weather in California slowed sales, which is typically among Horizon’s busier months. December brought colder temperatures and winter weather in North and Northeastern markets, consistent with normal seasonal patterns. In 2024, repair and replacement activity following Hurricanes Helene and Milton provided some weather-related benefits to Florida’s results, contributing to an increase in consolidated sales of approximately 1%. Overall, the fourth quarter of 2025 did not see similar benefits from weather conditions as the fourth quarter of 2024."
    },
    {
      "status": "ADDED",
      "current_title": "Weather Impacts on Fiscal Year 2024 to Fiscal Year 2023 Comparisons",
      "prior_title": null,
      "current_body": "For a detailed discussion of Weather Impacts on Fiscal Year 2024 compared to Fiscal Year 2023, see the Seasonality and Quarterly Fluctuations section of Management’s Discussion and Analysis included in Part II, Item 7 of our 2024 Annual Report on Form 10-K."
    },
    {
      "status": "ADDED",
      "current_title": "Geographic Areas",
      "prior_title": null,
      "current_body": "Since all of our sales centers have similar operations and share similar economic characteristics, we aggregate our sales centers into a single reportable segment. For additional details, see Note 1 of our “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K. For a breakdown of net sales and property, plant and equipment between our United States and international operations, see Item 1, “Business,” of this Form 10-K."
    },
    {
      "status": "ADDED",
      "current_title": "LIQUIDITY AND CAPITAL RESOURCES",
      "prior_title": null,
      "current_body": "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: •cash flows generated from operating activities; cash flows generated from operating activities; •the adequacy of available bank lines of credit; the adequacy of available bank lines of credit; •the quality of our receivables; the quality of our receivables; •acquisitions; acquisitions; •dividend payments; dividend payments; •capital expenditures; capital expenditures; •changes in income tax laws and regulations; changes in income tax laws and regulations; •the timing and extent of share repurchases; and the timing and extent of share repurchases; and •the ability to attract long-term capital with satisfactory terms. the ability to attract long-term capital with satisfactory terms. 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. 41 41 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:•capital expenditures primarily for maintenance and growth of our sales center network, technology-related investments and fleet vehicles;•inventory and other operating expenses;•strategic acquisitions executed opportunistically; •payment of cash dividends as and when declared by our Board;•repayment of debt to maintain an average total target leverage ratio (as defined below) between 1.5 and 2.0; and•discretionary repurchases of our common stock under our Board authorized share repurchase program.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, 2024 and 2023. Based on management’s current plans, we project capital expenditures for 2026 will be approximately 1% to 1.5% of net sales. 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 have the ability to finance any such transactions.As of February 20, 2026, $331.0 million remained available to purchase shares of our common stock under our current Board-approved share repurchase plan program. We expect to repurchase additional shares in 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 our credit and receivables facilities described below.Sources and Uses of CashThe following table summarizes our cash flows (in thousands): Year Ended December 31, 2025 2024 Operating activities $ 365,850 $ 659,186 Investing activities (67,792 ) (66,169 ) Financing activities (273,379 ) (576,550 ) Cash provided by operations of $365.9 million for 2025 decreased $293.3 million compared to 2024. The change in net cash flow from operations is mainly attributable to increased working capital investments, such as higher inventory balances, and $68.5 million in federal tax payments deferred from 2024 into 2025 as a result of relief granted by the IRS. This deferred tax payment increased operating cash flows in 2024 and decreased operating cash flows in 2025.Cash used in investing activities increased $1.6 million to $67.8 million in 2025, primarily reflecting an increase of $6.1 million in payments for acquisitions compared to 2024, partially offset by a decrease of $3.1 million in net capital expenditures between years. Cash used in financing activities decreased to $273.4 million in 2025 compared to $576.6 million in 2024. The change in financing activities primarily reflects $249.5 million of net debt proceeds in 2025 versus $101.7 million of net debt payments in 2024, partially offset by increases in share repurchases of $40.0 million and dividends paid of $5.3 million in 2025 versus 2024. 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: •capital expenditures primarily for maintenance and growth of our sales center network, technology-related investments and fleet vehicles; capital expenditures primarily for maintenance and growth of our sales center network, technology-related investments and fleet vehicles; •inventory and other operating expenses; inventory and other operating expenses; •strategic acquisitions executed opportunistically; strategic acquisitions executed opportunistically; •payment of cash dividends as and when declared by our Board; payment of cash dividends as and when declared by our Board; •repayment of debt to maintain an average total target leverage ratio (as defined below) between 1.5 and 2.0; and repayment of debt to maintain an average total target leverage ratio (as defined below) between 1.5 and 2.0; and •discretionary repurchases of our common stock under our Board authorized share repurchase program. discretionary repurchases of our common stock under our Board authorized share repurchase program. 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, 2024 and 2023. Based on management’s current plans, we project capital expenditures for 2026 will be approximately 1% to 1.5% of net sales. 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 have the ability to finance any such transactions. As of February 20, 2026, $331.0 million remained available to purchase shares of our common stock under our current Board-approved share repurchase plan program. We expect to repurchase additional shares in 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 our credit and receivables facilities described below."
    },
    {
      "status": "ADDED",
      "current_title": "Sources and Uses of Cash",
      "prior_title": null,
      "current_body": "The following table summarizes our cash flows (in thousands):"
    },
    {
      "status": "ADDED",
      "current_title": "Year Ended December 31,",
      "prior_title": null,
      "current_body": "2025 2024 2023 Net sales 100.0% 100.0% 100.0% Cost of sales 70.3 70.3 70.0 Gross profit 29.7 29.7 30.0 Operating expenses 18.8 18.0 16.5 Operating income 11.0 11.6 13.5 Interest and other non-operating expenses, net 0.9 0.9 1.1 Income before income taxes and equity in earnings 10.1% 10.7% 12.4% Note: Due to rounding, percentages may not add to operating income or income before income taxes and equity in earnings. Our discussion of consolidated operating results includes the operating results from acquisitions in 2025, 2024 and 2023. We have included the results of operations in our consolidated results since the respective acquisition dates."
    },
    {
      "status": "ADDED",
      "current_title": "Future Sources and Uses of Cash",
      "prior_title": null,
      "current_body": "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 the Fourth Amended and Restated Credit Facility (the Credit Facility), the Term Facility (the Term Facility) and the Receivables Securitization Facility (the 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 Item 8 of this Form 10-K."
    },
    {
      "status": "ADDED",
      "current_title": "Credit Facility",
      "prior_title": null,
      "current_body": "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 (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 December 31, 2025, there was $925.1 million outstanding, including a $500.0 million term loan, with $14.4 million in standby letters of credit outstanding and $360.5 million available for borrowing under the Credit Facility. The weighted average effective interest rate for the Credit Facility as of December 31, 2025 was approximately 4.0%, excluding commitment fees and including the impact of our interest rate swaps."
    },
    {
      "status": "ADDED",
      "current_title": "Term Facility",
      "prior_title": null,
      "current_body": "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 December 31, 2025, the Term Facility had an outstanding balance of $90.0 million at a weighted average effective interest rate of 5.0%"
    },
    {
      "status": "ADDED",
      "current_title": "Receivables Securitization Facility",
      "prior_title": null,
      "current_body": "Our two-year accounts receivable securitization 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. 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 December 31, 2025, there was $174.5 million outstanding under the Receivables Facility at a weighted average effective interest rate of 4.6%, excluding commitment fees. 43 43 Financial CovenantsFinancial 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 December 31, 2025, the calculations of these two covenants are detailed below:•Maximum Average Total Leverage Ratio. On the last day of each fiscal quarter, our average total leverage ratio must be less than 3.25 to 1.00. Average Total Leverage Ratio is the ratio of the sum of (i) Total Non-Revolving Funded Indebtedness as of such date, (ii) the trailing twelve months (TTM) Average Total Revolving Funded Indebtedness and (iii) the TTM Average Accounts Securitization Proceeds divided by TTM EBITDA (as those terms are defined in the Credit Facility). As of December 31, 2025, our average total leverage ratio equaled 1.67 (compared to 1.42 as of December 31, 2024) and the TTM average total indebtedness amount used in this calculation was $1.1 billion.•Minimum Fixed Charge Coverage Ratio. On the last day of each fiscal quarter, our fixed charge ratio must be greater than or equal to 2.25 to 1.00. Fixed Charge Ratio is the ratio of the TTM EBITDAR divided by TTM Interest Expense paid or payable in cash plus TTM Rental Expense (as those terms are defined in the Credit Facility). As of December 31, 2025, our fixed charge ratio equaled 4.78 (compared to 5.07 as of December 31, 2024) and TTM Rental Expense was $112.2 million.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 the Credit Facility and the Term Facility could result in, among other things, higher interest rates on our borrowings or the acceleration of the maturities of our outstanding debt.Interest Rate SwapsWe 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 applicable fixed rates plus the applicable margin on the respective borrowings. As of December 31, 2025, 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 5 of “Notes to Consolidated Financial Statements” included in Item 8 of this Form 10-K.Compliance and Future AvailabilityAs of December 31, 2025, 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 covenants and financial ratio requirements throughout the next 12 months. For additional information regarding our debt arrangements, see Note 5 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K."
    },
    {
      "status": "ADDED",
      "current_title": "Financial Covenants",
      "prior_title": null,
      "current_body": "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 December 31, 2025, the calculations of these two covenants are detailed below: •Maximum Average Total Leverage Ratio. On the last day of each fiscal quarter, our average total leverage ratio must be less than 3.25 to 1.00. Average Total Leverage Ratio is the ratio of the sum of (i) Total Non-Revolving Funded Indebtedness as of such date, (ii) the trailing twelve months (TTM) Average Total Revolving Funded Indebtedness and (iii) the TTM Average Accounts Securitization Proceeds divided by TTM EBITDA (as those terms are defined in the Credit Facility). As of December 31, 2025, our average total leverage ratio equaled 1.67 (compared to 1.42 as of December 31, 2024) and the TTM average total indebtedness amount used in this calculation was $1.1 billion. Maximum Average Total Leverage Ratio. On the last day of each fiscal quarter, our average total leverage ratio must be less than 3.25 to 1.00. Average Total Leverage Ratio is the ratio of the sum of (i) Total Non-Revolving Funded Indebtedness as of such date, (ii) the trailing twelve months (TTM) Average Total Revolving Funded Indebtedness and (iii) the TTM Average Accounts Securitization Proceeds divided by TTM EBITDA (as those terms are defined in the Credit Facility). As of December 31, 2025, our average total leverage ratio equaled 1.67 (compared to 1.42 as of December 31, 2024) and the TTM average total indebtedness amount used in this calculation was $1.1 billion. •Minimum Fixed Charge Coverage Ratio. On the last day of each fiscal quarter, our fixed charge ratio must be greater than or equal to 2.25 to 1.00. Fixed Charge Ratio is the ratio of the TTM EBITDAR divided by TTM Interest Expense paid or payable in cash plus TTM Rental Expense (as those terms are defined in the Credit Facility). As of December 31, 2025, our fixed charge ratio equaled 4.78 (compared to 5.07 as of December 31, 2024) and TTM Rental Expense was $112.2 million. Minimum Fixed Charge Coverage Ratio. On the last day of each fiscal quarter, our fixed charge ratio must be greater than or equal to 2.25 to 1.00. Fixed Charge Ratio is the ratio of the TTM EBITDAR divided by TTM Interest Expense paid or payable in cash plus TTM Rental Expense (as those terms are defined in the Credit Facility). As of December 31, 2025, our fixed charge ratio equaled 4.78 (compared to 5.07 as of December 31, 2024) and TTM Rental Expense was $112.2 million. 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 the Credit Facility and the Term Facility could result in, among other things, higher interest rates on our borrowings or the acceleration of the maturities of our outstanding debt."
    },
    {
      "status": "ADDED",
      "current_title": "Interest Rate Swaps",
      "prior_title": null,
      "current_body": "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 applicable fixed rates plus the applicable margin on the respective borrowings. As of December 31, 2025, 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 5 of “Notes to Consolidated Financial Statements” included in Item 8 of this Form 10-K."
    },
    {
      "status": "ADDED",
      "current_title": "Compliance and Future Availability",
      "prior_title": null,
      "current_body": "As of December 31, 2025, 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 covenants and financial ratio requirements throughout the next 12 months. For additional information regarding our debt arrangements, see Note 5 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K. 44 44 Future ObligationsWe have certain fixed contractual obligations and commitments that include future estimated payments for general operating purposes. Changes in our business needs, fluctuating interest rates and other factors may result in actual payments differing from our estimates. We cannot provide certainty regarding the timing and amounts of these payments. The following table summarizes our obligations as of December 31, 2025 (in thousands) that are expected to impact liquidity and cash flow in future periods. We believe we will be able to fund these obligations through our existing cash, cash expected to be generated from operations, borrowings on our facilities and proceeds from any future refinancing transactions. Payments Due by Period Total Less than1 year 1-3 years 3-5 years More than5 years Long-term debt $ 1,202,629 $ 187,529 $ 44,250 $ 970,850 $ — Operating leases 387,601 106,657 161,568 85,926 33,450 Purchase obligations 131,094 30,490 67,318 33,286 — $ 1,721,324 $ 324,676 $ 273,136 $ 1,090,062 $ 33,450 The significant assumptions used in our determination of amounts presented in the above table are as follows:•Long-term debt amounts represent only the future principal payments on our debt as of December 31, 2025. Estimates of interest payable on this debt is separately reflected in the table appearing below. On our Consolidated Balance Sheets, we classify the entire outstanding balance of the Receivables Facility as Long-term debt as we intend and have the ability to refinance the obligations on a long-term basis. For additional information regarding our debt arrangements, see Note 5 of our “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K. •Operating lease amounts include future rental payments under the current terms of our operating leases. For additional information regarding our operating leases, see Note 9 of our “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K. •Purchase obligations include all legally binding contracts such as firm minimum commitments for inventory purchases and software commitments. We issue inventory purchase orders in the normal course of business, which represent authorizations to purchase that are cancellable by their terms. We do not consider our cancellable purchase orders to be firm inventory commitments; therefore, they are excluded from the table above. For certain of our future obligations, such as unrecognized tax benefits, uncertainties exist regarding the timing of future payments and the amount by which these potential obligations will increase or decrease over time. As such, we have excluded unrecognized tax benefits from the table above. See Note 7 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K for additional discussion related to our unrecognized tax benefits. The table also excludes various other liabilities that are not contractual in nature, including contingent liabilities, litigation accruals and contract termination fees.The table below contains estimated interest payments (in thousands) related to our long-term debt obligations presented in the table above. We calculated estimates of future interest payments based on the December 31, 2025 outstanding debt balances, using the fixed rates under our interest rate swap agreements for the applicable notional amounts and the weighted average effective interest rates as of December 31, 2025 for the remaining outstanding balances not covered by our swap contracts. To project the estimated interest expense to coincide with the time periods used in the table above, we projected the estimated debt balances for future years based on the scheduled maturity dates of the Credit Facility, the Term Facility and the Receivables Facility. Our actual interest payments could vary substantially from the amounts projected. Estimated Interest Payments Due by Period Total Less than1 year 1-3 years 3-5 years More than5 years Interest $ 175,004 $ 44,023 $ 95,107 $ 35,874 $ —"
    },
    {
      "status": "ADDED",
      "current_title": "Future Obligations",
      "prior_title": null,
      "current_body": "We have certain fixed contractual obligations and commitments that include future estimated payments for general operating purposes. Changes in our business needs, fluctuating interest rates and other factors may result in actual payments differing from our estimates. We cannot provide certainty regarding the timing and amounts of these payments. The following table summarizes our obligations as of December 31, 2025 (in thousands) that are expected to impact liquidity and cash flow in future periods. We believe we will be able to fund these obligations through our existing cash, cash expected to be generated from operations, borrowings on our facilities and proceeds from any future refinancing transactions."
    },
    {
      "status": "ADDED",
      "current_title": "More than5 years",
      "prior_title": null,
      "current_body": "Long-term debt $ 1,202,629 $ 187,529 $ 44,250 $ 970,850 $ — Operating leases 387,601 106,657 161,568 85,926 33,450 Purchase obligations 131,094 30,490 67,318 33,286 — $ 1,721,324 $ 324,676 $ 273,136 $ 1,090,062 $ 33,450 The significant assumptions used in our determination of amounts presented in the above table are as follows: •Long-term debt amounts represent only the future principal payments on our debt as of December 31, 2025. Estimates of interest payable on this debt is separately reflected in the table appearing below. On our Consolidated Balance Sheets, we classify the entire outstanding balance of the Receivables Facility as Long-term debt as we intend and have the ability to refinance the obligations on a long-term basis. For additional information regarding our debt arrangements, see Note 5 of our “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K. Long-term debt amounts represent only the future principal payments on our debt as of December 31, 2025. Estimates of interest payable on this debt is separately reflected in the table appearing below. On our Consolidated Balance Sheets, we classify the entire outstanding balance of the Receivables Facility as Long-term debt as we intend and have the ability to refinance the obligations on a long-term basis. For additional information regarding our debt arrangements, see Note 5 of our “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K. •Operating lease amounts include future rental payments under the current terms of our operating leases. For additional information regarding our operating leases, see Note 9 of our “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K. Operating lease amounts include future rental payments under the current terms of our operating leases. For additional information regarding our operating leases, see Note 9 of our “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K. •Purchase obligations include all legally binding contracts such as firm minimum commitments for inventory purchases and software commitments. We issue inventory purchase orders in the normal course of business, which represent authorizations to purchase that are cancellable by their terms. We do not consider our cancellable purchase orders to be firm inventory commitments; therefore, they are excluded from the table above. Purchase obligations include all legally binding contracts such as firm minimum commitments for inventory purchases and software commitments. We issue inventory purchase orders in the normal course of business, which represent authorizations to purchase that are cancellable by their terms. We do not consider our cancellable purchase orders to be firm inventory commitments; therefore, they are excluded from the table above. For certain of our future obligations, such as unrecognized tax benefits, uncertainties exist regarding the timing of future payments and the amount by which these potential obligations will increase or decrease over time. As such, we have excluded unrecognized tax benefits from the table above. See Note 7 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K for additional discussion related to our unrecognized tax benefits. The table also excludes various other liabilities that are not contractual in nature, including contingent liabilities, litigation accruals and contract termination fees. The table below contains estimated interest payments (in thousands) related to our long-term debt obligations presented in the table above. We calculated estimates of future interest payments based on the December 31, 2025 outstanding debt balances, using the fixed rates under our interest rate swap agreements for the applicable notional amounts and the weighted average effective interest rates as of December 31, 2025 for the remaining outstanding balances not covered by our swap contracts. To project the estimated interest expense to coincide with the time periods used in the table above, we projected the estimated debt balances for future years based on the scheduled maturity dates of the Credit Facility, the Term Facility and the Receivables Facility. Our actual interest payments could vary substantially from the amounts projected."
    },
    {
      "status": "ADDED",
      "current_title": "More than5 years",
      "prior_title": null,
      "current_body": "Long-term debt $ 1,202,629 $ 187,529 $ 44,250 $ 970,850 $ — Operating leases 387,601 106,657 161,568 85,926 33,450 Purchase obligations 131,094 30,490 67,318 33,286 — $ 1,721,324 $ 324,676 $ 273,136 $ 1,090,062 $ 33,450 The significant assumptions used in our determination of amounts presented in the above table are as follows: •Long-term debt amounts represent only the future principal payments on our debt as of December 31, 2025. Estimates of interest payable on this debt is separately reflected in the table appearing below. On our Consolidated Balance Sheets, we classify the entire outstanding balance of the Receivables Facility as Long-term debt as we intend and have the ability to refinance the obligations on a long-term basis. For additional information regarding our debt arrangements, see Note 5 of our “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K. Long-term debt amounts represent only the future principal payments on our debt as of December 31, 2025. Estimates of interest payable on this debt is separately reflected in the table appearing below. On our Consolidated Balance Sheets, we classify the entire outstanding balance of the Receivables Facility as Long-term debt as we intend and have the ability to refinance the obligations on a long-term basis. For additional information regarding our debt arrangements, see Note 5 of our “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K. •Operating lease amounts include future rental payments under the current terms of our operating leases. For additional information regarding our operating leases, see Note 9 of our “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K. Operating lease amounts include future rental payments under the current terms of our operating leases. For additional information regarding our operating leases, see Note 9 of our “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K. •Purchase obligations include all legally binding contracts such as firm minimum commitments for inventory purchases and software commitments. We issue inventory purchase orders in the normal course of business, which represent authorizations to purchase that are cancellable by their terms. We do not consider our cancellable purchase orders to be firm inventory commitments; therefore, they are excluded from the table above. Purchase obligations include all legally binding contracts such as firm minimum commitments for inventory purchases and software commitments. We issue inventory purchase orders in the normal course of business, which represent authorizations to purchase that are cancellable by their terms. We do not consider our cancellable purchase orders to be firm inventory commitments; therefore, they are excluded from the table above. For certain of our future obligations, such as unrecognized tax benefits, uncertainties exist regarding the timing of future payments and the amount by which these potential obligations will increase or decrease over time. As such, we have excluded unrecognized tax benefits from the table above. See Note 7 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10-K for additional discussion related to our unrecognized tax benefits. The table also excludes various other liabilities that are not contractual in nature, including contingent liabilities, litigation accruals and contract termination fees. The table below contains estimated interest payments (in thousands) related to our long-term debt obligations presented in the table above. We calculated estimates of future interest payments based on the December 31, 2025 outstanding debt balances, using the fixed rates under our interest rate swap agreements for the applicable notional amounts and the weighted average effective interest rates as of December 31, 2025 for the remaining outstanding balances not covered by our swap contracts. To project the estimated interest expense to coincide with the time periods used in the table above, we projected the estimated debt balances for future years based on the scheduled maturity dates of the Credit Facility, the Term Facility and the Receivables Facility. Our actual interest payments could vary substantially from the amounts projected."
    },
    {
      "status": "ADDED",
      "current_title": "Interest Rate Risk",
      "prior_title": null,
      "current_body": "Our earnings are exposed to changes in short-term interest rates because of the variable interest rates on our debt. However, we have entered into interest rate swap contracts to reduce our exposure to interest rate fluctuations. For information about our debt arrangements and interest rate swaps, see Note 5 of “Notes to Consolidated Financial Statements,” included in Item 8 of this Form 10‑K. In 2025, there was no interest rate risk related to the notional amounts under our interest rate swap contracts. The portions of our outstanding balances under the Credit Facility, Term Facility and the Receivables Facility that were not covered by our interest rate swap contracts were subject to variable interest rates. To calculate the potential impact in 2025 related to interest rate risk, we performed a sensitivity analysis assuming that we borrowed the maximum $1.3 billion available under the Credit Facility, the $375 million maximum available under the Receivables Facility and the full $500 million outstanding under our Term Facility. In this analysis, we assumed that the variable interest rates for each facility increased by 1.0%. Based on this calculation, our pretax income would have decreased by approximately $13.7 million and earnings per share would have decreased by approximately $0.27 per diluted share (based on the number of weighted average diluted shares outstanding for the year ended December 31, 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."
    },
    {
      "status": "ADDED",
      "current_title": "Currency Risk",
      "prior_title": null,
      "current_body": "Changes in the exchange rates for the functional currencies of our international subsidiaries, as shown in the table below, may positively or negatively impact our sales, operating expenses and earnings. Historically, we have not hedged our currency exposure and fluctuations in exchange rates have not materially affected our operating results. While our international operations, including Canada and Mexico, accounted for only 7% of total net sales in 2025, our exposure to currency rate fluctuations could be material in 2026 and future years to the extent that either currency rate changes are significant or that our international operations comprise a larger percentage of our consolidated results."
    },
    {
      "status": "ADDED",
      "current_title": "Functional Currencies",
      "prior_title": null,
      "current_body": "Canada Canadian Dollar United Kingdom British Pound Belgium Euro Croatia Euro France Euro Germany Euro Italy Euro Portugal Euro Spain Euro Mexico Mexican Peso Australia Australian Dollar 46 46 Item 8. Financial Statements and Supplementary DataINDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) 48 Consolidated Statements of Income 50 Consolidated Statements of Comprehensive Income 51 Consolidated Balance Sheets 52 Consolidated Statements of Cash Flows 53 Consolidated Statements of Changes in Stockholders’ Equity 54 Notes to Consolidated Financial Statements 55 Item 8. Financial Statements and Supplementary Data"
    },
    {
      "status": "ADDED",
      "current_title": "INDEX TO CONSOLIDATED FINANCIAL STATEMENTS",
      "prior_title": null,
      "current_body": "Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 42 ) 48 Consolidated Statements of Income Consolidated Statements of Income 50 Consolidated Statements of Comprehensive Income Consolidated Statements of Comprehensive Income 51 Consolidated Balance Sheets Consolidated Balance Sheets 52 Consolidated Statements of Cash Flows Consolidated Statements of Cash Flows 53 Consolidated Statements of Changes in Stockholders’ Equity Consolidated Statements of Changes in Stockholders’ Equity 54 Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements 55 47 47 Report of Independent Registered Public Accounting FirmTo the Stockholders and the Board of Directors of Pool CorporationOpinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Pool Corporation (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 26, 2026 expressed an unqualified opinion thereon.Basis for OpinionThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit MatterThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates. Valuation of Goodwill Description of the Matter At December 31, 2025, the Company’s goodwill was $707.3 million, including $401.6 million of goodwill relating to one reporting unit. As discussed in Note 3 of the consolidated financial statements, goodwill is tested for impairment at least annually at the reporting unit level. The Company’s goodwill is assigned to reporting units as of the acquisition date. Auditing management’s annual goodwill impairment test for this reporting unit was complex and highly judgmental due to the estimation required to determine the fair value of the reporting unit. In particular, the fair value estimate is sensitive to certain assumptions, such as changes in the weighted average cost of capital, revenue growth rate, operating margin, and terminal growth rate which are affected by expectations about future market or economic conditions."
    },
    {
      "status": "ADDED",
      "current_title": "Report of Independent Registered Public Accounting Firm",
      "prior_title": null,
      "current_body": "To the Stockholders and the Board of Directors of Pool Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Pool Corporation (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 26, 2026 expressed an unqualified opinion thereon."
    },
    {
      "status": "ADDED",
      "current_title": "Opinion on the Financial Statements",
      "prior_title": null,
      "current_body": "We have audited the accompanying consolidated balance sheets of Pool Corporation (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 26, 2026 expressed an unqualified opinion thereon."
    },
    {
      "status": "ADDED",
      "current_title": "Basis for Opinion",
      "prior_title": null,
      "current_body": "These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion."
    },
    {
      "status": "ADDED",
      "current_title": "Critical Audit Matter",
      "prior_title": null,
      "current_body": "The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates."
    },
    {
      "status": "ADDED",
      "current_title": "Valuation of Goodwill",
      "prior_title": null,
      "current_body": "Description of the Matter At December 31, 2025, the Company’s goodwill was $707.3 million, including $401.6 million of goodwill relating to one reporting unit. As discussed in Note 3 of the consolidated financial statements, goodwill is tested for impairment at least annually at the reporting unit level. The Company’s goodwill is assigned to reporting units as of the acquisition date. Auditing management’s annual goodwill impairment test for this reporting unit was complex and highly judgmental due to the estimation required to determine the fair value of the reporting unit. In particular, the fair value estimate is sensitive to certain assumptions, such as changes in the weighted average cost of capital, revenue growth rate, operating margin, and terminal growth rate which are affected by expectations about future market or economic conditions. 48 48 How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s goodwill impairment review process, including controls over management’s review of the significant assumptions described above. To test the estimated fair value of the Company’s largest reporting unit, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis. We compared the significant assumptions used by management to current industry and economic trends and other relevant factors, such as historical results. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in the assumptions. We also involved a specialist to assist in our evaluation of the valuation methodology applied by the Company and certain significant assumptions used in estimating the fair value of the reporting unit. In addition, we reviewed the comparison of the Company’s fair value of its largest reporting unit and the fair value of all other reporting units to the Company’s market capitalization. /s/ Ernst & Young LLP We have served as the Company’s auditor since 1994. New Orleans, Louisiana February 26, 2026 How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s goodwill impairment review process, including controls over management’s review of the significant assumptions described above. To test the estimated fair value of the Company’s largest reporting unit, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis. We compared the significant assumptions used by management to current industry and economic trends and other relevant factors, such as historical results. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in the assumptions. We also involved a specialist to assist in our evaluation of the valuation methodology applied by the Company and certain significant assumptions used in estimating the fair value of the reporting unit. In addition, we reviewed the comparison of the Company’s fair value of its largest reporting unit and the fair value of all other reporting units to the Company’s market capitalization. /s/ Ernst & Young LLP Ernst & Young LLP We have served as the Company’s auditor since 1994. New Orleans, Louisiana New Orleans, Louisiana February 26, 2026 49 49 POOL CORPORATIONConsolidated Statements of Income(In thousands, except per share data) Year Ended December 31, 2025 2024 2023 Net sales $ 5,289,396 $ 5,310,953 $ 5,541,595 Cost of sales 3,716,938 3,735,606 3,881,551 Gross profit 1,572,458 1,575,347 1,660,044 Selling and administrative expenses 992,254 958,143 913,477 Operating income 580,204 617,204 746,567 Interest and other non-operating expenses, net 46,770 50,250 58,431 Income before income taxes and equity in earnings 533,434 566,954 688,136 Provision for income taxes 127,132 132,836 165,084 Equity in earnings of unconsolidated investments, net 102 207 177 Net income $ 406,404 $ 434,325 $ 523,229 Earnings per share attributable to common stockholders: Basic $ 10.89 $ 11.37 $ 13.45 Diluted $ 10.85 $ 11.30 $ 13.35 Weighted average common shares outstanding: Basic 37,149 38,007 38,704 Diluted 37,288 38,228 38,997 Cash dividends declared per common share $ 4.95 $ 4.70 $ 4.30 The accompanying Notes are an integral part of these Consolidated Financial Statements."
    },
    {
      "status": "ADDED",
      "current_title": "Year Ended December 31,",
      "prior_title": null,
      "current_body": "2025 2024 2023 Net sales 100.0% 100.0% 100.0% Cost of sales 70.3 70.3 70.0 Gross profit 29.7 29.7 30.0 Operating expenses 18.8 18.0 16.5 Operating income 11.0 11.6 13.5 Interest and other non-operating expenses, net 0.9 0.9 1.1 Income before income taxes and equity in earnings 10.1% 10.7% 12.4% Note: Due to rounding, percentages may not add to operating income or income before income taxes and equity in earnings. Our discussion of consolidated operating results includes the operating results from acquisitions in 2025, 2024 and 2023. We have included the results of operations in our consolidated results since the respective acquisition dates."
    },
    {
      "status": "ADDED",
      "current_title": "Year Ended December 31,",
      "prior_title": null,
      "current_body": "2025 2024 2023 Net sales 100.0% 100.0% 100.0% Cost of sales 70.3 70.3 70.0 Gross profit 29.7 29.7 30.0 Operating expenses 18.8 18.0 16.5 Operating income 11.0 11.6 13.5 Interest and other non-operating expenses, net 0.9 0.9 1.1 Income before income taxes and equity in earnings 10.1% 10.7% 12.4% Note: Due to rounding, percentages may not add to operating income or income before income taxes and equity in earnings. Our discussion of consolidated operating results includes the operating results from acquisitions in 2025, 2024 and 2023. We have included the results of operations in our consolidated results since the respective acquisition dates."
    },
    {
      "status": "ADDED",
      "current_title": "December 31,",
      "prior_title": null,
      "current_body": "2025 2024 Diluted EPS $ 10.85 $ 11.30 Less: ASU 2016-09 tax benefit 0.12 0.23 Adjusted diluted EPS $ 10.73 $ 11.07"
    },
    {
      "status": "ADDED",
      "current_title": "Liabilities and stockholders’ equity",
      "prior_title": null,
      "current_body": "Current liabilities: Accounts payable $ 652,619 $ 525,235 Accrued expenses and other current liabilities 109,301 171,194 Short-term borrowings and current portion of long-term debt 13,029 49,473 Current operating lease liabilities 105,336 98,284 Total current liabilities 880,285 844,186 Deferred income taxes 95,633 81,408 Long-term debt, net 1,186,424 900,883 Other long-term liabilities 48,313 44,959 Non-current operating lease liabilities 230,242 223,283 Total liabilities 2,440,897 2,094,719 Stockholders’ equity: Common stock, $0.001 par value; 100,000,000 shares authorized; 36,577,686 shares issued and outstanding at December 31, 2025 and37,691,942 shares issued and outstanding at December 31, 2024 37 38 Additional paid-in capital 671,050 638,615 Retained earnings 520,662 648,476 Accumulated other comprehensive loss (6,520 ) (13,664 ) Total stockholders’ equity 1,185,229 1,273,465"
    },
    {
      "status": "ADDED",
      "current_title": "Total liabilities and stockholders’ equity",
      "prior_title": null,
      "current_body": "$ 3,626,126 $ 3,368,184 The accompanying Notes are an integral part of these Consolidated Financial Statements. 52 52 POOL CORPORATIONConsolidated Statements of Cash Flows(In thousands) Year Ended December 31, 2025 2024 2023 Operating activities Net income $ 406,404 $ 434,325 $ 523,229 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 42,678 36,784 31,585 Amortization 8,927 8,697 8,555 Share-based compensation 22,733 19,248 19,582 (Benefit) provision for doubtful accounts receivable, net of write-offs (589 ) (3,122 ) 2,197 (Benefit) provision for inventory obsolescence, net of write-offs (2,756 ) 3,048 1,930 Provision for deferred income taxes 17,030 15,739 10,359 Gains on sales of property and equipment (611 ) (1,645 ) (317 ) Equity in earnings of unconsolidated investments, net (102 ) (207 ) (177 ) Net (gains) losses on foreign currency transactions (492 ) 218 (813 ) Goodwill impairment 285 — 550 Other (271 ) (245 ) 200 Changes in operating assets and liabilities, net of effects of acquisitions: Receivables (27,324 ) 29,146 10,108 Product inventories (147,405 ) 66,201 231,240 Prepaid expenses and other assets 91,799 75,122 57,840 Accounts payable 119,358 14,429 96,128 Accrued expenses and other liabilities (163,814 ) (38,552 ) (103,967 ) Net cash provided by operating activities 365,850 659,186 888,229 Investing activities Acquisition of businesses, net of cash acquired (10,831 ) (4,692 ) (11,533 ) Purchases of property and equipment, net of sale proceeds (56,334 ) (59,476 ) (60,096 ) Other investments, net (627 ) (2,001 ) 32 Net cash used in investing activities (67,792 ) (66,169 ) (71,597 ) Financing activities Proceeds from revolving line of credit 1,929,200 1,517,800 1,548,618 Payments on revolving line of credit (1,698,700 ) (1,575,700 ) (1,815,829 ) Proceeds from term loan under credit facility 50,000 — — Payments on term loan under credit facility (12,500 ) (25,000 ) (12,500 ) Proceeds from asset-backed financing 473,500 727,000 552,500 Payments on asset-backed financing (473,100 ) (744,600 ) (560,300 ) Payments on term facility (19,938 ) — (47,313 ) Proceeds from short-term borrowings and current portion of long-term debt 17,700 8,873 19,998 Payments on short-term borrowings and current portion of long-term debt (16,644 ) (10,103 ) (19,338 ) Payments of deferred financing costs (1,397 ) (2,077 ) (52 ) Payments of deferred and contingent acquisition consideration — — (551 ) Proceeds from stock issued under share-based compensation plans 9,702 13,190 10,455 Payments of cash dividends (184,916 ) (179,633 ) (167,461 ) Repurchases of common stock (346,286 ) (306,300 ) (306,359 ) Net cash used in financing activities (273,379 ) (576,550 ) (798,132 ) Effect of exchange rate changes on cash and cash equivalents 2,422 (5,145 ) 2,449 Change in cash and cash equivalents 27,101 11,322 20,949 Cash and cash equivalents at beginning of year 77,862 66,540 45,591 Cash and cash equivalents at end of year $ 104,963 $ 77,862 $ 66,540 The accompanying Notes are an integral part of these Consolidated Financial Statements."
    },
    {
      "status": "ADDED",
      "current_title": "Operating activities",
      "prior_title": null,
      "current_body": "Net income $ 406,404 $ 434,325 $ 523,229 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 42,678 36,784 31,585 Amortization 8,927 8,697 8,555 Share-based compensation 22,733 19,248 19,582 (Benefit) provision for doubtful accounts receivable, net of write-offs (589 ) (3,122 ) 2,197 (Benefit) provision for inventory obsolescence, net of write-offs (2,756 ) 3,048 1,930 Provision for deferred income taxes 17,030 15,739 10,359 Gains on sales of property and equipment (611 ) (1,645 ) (317 ) Equity in earnings of unconsolidated investments, net (102 ) (207 ) (177 ) Net (gains) losses on foreign currency transactions (492 ) 218 (813 ) Goodwill impairment 285 — 550 Other (271 ) (245 ) 200 Changes in operating assets and liabilities, net of effects of acquisitions: Receivables (27,324 ) 29,146 10,108 Product inventories (147,405 ) 66,201 231,240 Prepaid expenses and other assets 91,799 75,122 57,840 Accounts payable 119,358 14,429 96,128 Accrued expenses and other liabilities (163,814 ) (38,552 ) (103,967 ) Net cash provided by operating activities 365,850 659,186 888,229"
    },
    {
      "status": "ADDED",
      "current_title": "Investing activities",
      "prior_title": null,
      "current_body": "Acquisition of businesses, net of cash acquired (10,831 ) (4,692 ) (11,533 ) Purchases of property and equipment, net of sale proceeds (56,334 ) (59,476 ) (60,096 ) Other investments, net (627 ) (2,001 ) 32 Net cash used in investing activities (67,792 ) (66,169 ) (71,597 )"
    },
    {
      "status": "ADDED",
      "current_title": "Financing activities",
      "prior_title": null,
      "current_body": "Proceeds from revolving line of credit 1,929,200 1,517,800 1,548,618 Payments on revolving line of credit"
    },
    {
      "status": "ADDED",
      "current_title": "(1,698,700",
      "prior_title": null,
      "current_body": ") (1,575,700 ) (1,815,829 ) Proceeds from term loan under credit facility 50,000 — — Payments on term loan under credit facility (12,500 ) (25,000 ) (12,500 ) Proceeds from asset-backed financing 473,500 727,000 552,500 Payments on asset-backed financing (473,100 ) (744,600 ) (560,300 ) Payments on term facility (19,938 ) — (47,313 ) Proceeds from short-term borrowings and current portion of long-term debt 17,700 8,873 19,998 Payments on short-term borrowings and current portion of long-term debt (16,644 ) (10,103 ) (19,338 ) Payments of deferred financing costs (1,397 ) (2,077 ) (52 ) Payments of deferred and contingent acquisition consideration — — (551 ) Proceeds from stock issued under share-based compensation plans 9,702 13,190 10,455 Payments of cash dividends (184,916 ) (179,633 ) (167,461 ) Repurchases of common stock (346,286 ) (306,300 ) (306,359 ) Net cash used in financing activities (273,379 ) (576,550 ) (798,132 ) Effect of exchange rate changes on cash and cash equivalents 2,422 (5,145 ) 2,449 Change in cash and cash equivalents 27,101 11,322 20,949 Cash and cash equivalents at beginning of year 77,862 66,540 45,591 Cash and cash equivalents at end of year $ 104,963 $ 77,862 $ 66,540 The accompanying Notes are an integral part of these Consolidated Financial Statements. 53 53 POOL CORPORATIONConsolidated Statements of Changes in Stockholders’ Equity (In thousands) Common Stock AdditionalPaid-In Retained AccumulatedOtherComprehensive Shares Amount Capital Earnings Income (Loss) Total Balance at December 31, 2022 39,069 $ 39 $ 575,776 $ 653,484 $ 5,895 $ 1,235,194 Net income — — — 523,229 — 523,229 Foreign currency translation — — — — 6,909 6,909 Interest rate swaps, net of the change in taxes of $2,074 — — — — (6,222 ) (6,222 ) Repurchases of common stock, net of retirements (862 ) (1 ) — (309,262 ) — (309,263 ) Share-based compensation — — 19,582 — — 19,582 Issuance of stock under share-based compensation plans 148 — 10,819 — — 10,819 Declaration of cash dividends — — — (167,461 ) — (167,461 ) Balance at December 31, 2023 38,355 38 606,177 699,990 6,582 1,312,787 Net income — — — 434,325 — 434,325 Foreign currency translation — — — — (16,389 ) (16,389 ) Interest rate swaps, net of the change in taxes of $1,285 — — — — (3,857 ) (3,857 ) Repurchases of common stock, net of retirements (843 ) — — (306,206 ) — (306,206 ) Share-based compensation — — 19,248 — — 19,248 Issuance of stock under share-based compensation plans 180 — 13,190 — — 13,190 Declaration of cash dividends — — — (179,633 ) — (179,633 ) Balance at December 31, 2024 37,692 38 638,615 648,476 (13,664 ) 1,273,465 Net income — — — 406,404 — 406,404 Foreign currency translation — — — — 15,765 15,765 Interest rate swaps, net of the change in taxes of $2,874 — — — — (8,621 ) (8,621 ) Repurchases of common stock, net of retirements (1,271 ) (1 ) — (349,261 ) — (349,262 ) Share-based compensation — — 22,733 — — 22,733 Issuance of stock under share-based compensation plans 157 — 9,702 — — 9,702 Declaration of cash dividends — — — (184,957 ) — (184,957 ) Balance at December 31, 2025 36,578 $ 37 $ 671,050 $ 520,662 $ (6,520 ) $ 1,185,229 The accompanying Notes are an integral part of these Consolidated Financial Statements."
    },
    {
      "status": "ADDED",
      "current_title": "Income (Loss)",
      "prior_title": null,
      "current_body": "Total Balance at December 31, 2022 39,069 $ 39 $ 575,776 $ 653,484 $ 5,895 $ 1,235,194 Net income — — — 523,229 — 523,229 Foreign currency translation — — — — 6,909 6,909 Interest rate swaps, net of the change in taxes of $2,074 — — — — (6,222 ) (6,222 ) Repurchases of common stock, net of retirements (862 ) (1 ) — (309,262 ) — (309,263 ) Share-based compensation — — 19,582 — — 19,582 Issuance of stock under share-based compensation plans 148 — 10,819 — — 10,819 Declaration of cash dividends — — — (167,461 ) — (167,461 ) Balance at December 31, 2023 38,355 38 606,177 699,990 6,582 1,312,787 Net income — — — 434,325 — 434,325 Foreign currency translation — — — — (16,389 ) (16,389 ) Interest rate swaps, net of the change in taxes of $1,285 — — — — (3,857 ) (3,857 ) Repurchases of common stock, net of retirements (843 ) — — (306,206 ) — (306,206 ) Share-based compensation — — 19,248 — — 19,248 Issuance of stock under share-based compensation plans 180 — 13,190 — — 13,190 Declaration of cash dividends — — — (179,633 ) — (179,633 ) Balance at December 31, 2024 37,692 38 638,615 648,476 (13,664 ) 1,273,465 Net income — — — 406,404 — 406,404 Foreign currency translation — — — — 15,765 15,765 Interest rate swaps, net of the change in taxes of $2,874 — — — — (8,621 ) (8,621 ) Repurchases of common stock, net of retirements (1,271 ) (1 ) — (349,261 ) — (349,262 ) Share-based compensation — — 22,733 — — 22,733 Issuance of stock under share-based compensation plans 157 — 9,702 — — 9,702 Declaration of cash dividends — — — (184,957 ) — (184,957 )"
    },
    {
      "status": "ADDED",
      "current_title": "Balance at December 31, 2025",
      "prior_title": null,
      "current_body": "36,578 $ 37 $ 671,050 $ 520,662 $ (6,520 ) $ 1,185,229 The accompanying Notes are an integral part of these Consolidated Financial Statements. 54 54 POOL CORPORATIONNotes to Consolidated Financial StatementsNote 1 - Organization and Summary of Significant Accounting PoliciesDescription of BusinessAs of December 31, 2025, Pool Corporation and our subsidiaries (the Company, which may also be referred to as we, us or our) operated 456 sales centers in North America, Europe and Australia from which we sell swimming pool supplies, equipment and related leisure products, irrigation and landscape maintenance products and hardscapes, tile and stone products to pool builders, retail stores, service companies, landscape contractors and others. We distribute products through five networks: SCP Distributors (SCP), Superior Pool Products (Superior), Horizon Distributors (Horizon), National Pool Trends (NPT) and Sun Wholesale Supply (Sun Wholesale). Basis of Presentation and Principles of ConsolidationWe prepared the Consolidated Financial Statements following U.S. generally accepted accounting principles (GAAP) and the requirements of the Securities and Exchange Commission (SEC). The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of our financial position and operating results. The Consolidated Financial Statements include the accounts of Pool Corporation and our subsidiaries. All of our subsidiaries are wholly owned. All significant intercompany accounts and intercompany transactions have been eliminated.Use of EstimatesTo prepare financial statements that conform to GAAP, we make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Our most significant estimates relate to the allowance for doubtful accounts, inventory obsolescence reserves, vendor programs, income taxes, performance-based compensation accruals and goodwill impairment evaluations. We continually review our estimates and make adjustments as necessary, but actual results could be significantly different from what we expected when we made these estimates.Newly Adopted Accounting PronouncementsIn December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023‑09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which enhances the transparency of income tax disclosures through greater disaggregation in the effective tax rate reconciliation and expanded disclosures of income taxes paid. We adopted ASU 2023‑09 prospectively for the year ended December 31, 2025. The adoption of this standard, which enhanced our income tax related disclosures, did not have an impact on our consolidated financial statements. See Note 7 for the additional disclosures required under this standard. In July 2025, the FASB issued ASU 2025‑05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient allowing entities to assume that current conditions as of the balance sheet date will continue for the remaining life of current accounts receivable and contract assets. We adopted ASU 2025‑05 prospectively for the year ended December 31, 2025, electing the practical expedient for our trade receivables. The adoption of this standard did not have a material impact on our consolidated financial statements or related disclosures, and we do not expect it to have a material impact in future periods.Seasonality and WeatherOur business is seasonal, and weather is one of the principal external factors affecting our business. In general, sales and net income are highest during the second and third quarters, which represent the peak months of swimming pool use, pool and irrigation installation and remodeling and repair activities. Sales are lower during the first and fourth quarters.Revenue RecognitionWe recognize a sale when a customer obtains control of the product, and we record the amount that reflects the consideration we expect to receive in exchange for such product. We recognize a sale when a customer picks up product at any sales center, when we deliver product to their premises or job sites via our trucks or when we present the product to a third-party carrier."
    },
    {
      "status": "ADDED",
      "current_title": "Notes to Consolidated Financial Statements",
      "prior_title": null,
      "current_body": "Note 1 - Organization and Summary of Significant Accounting PoliciesDescription of BusinessAs of December 31, 2025, Pool Corporation and our subsidiaries (the Company, which may also be referred to as we, us or our) operated 456 sales centers in North America, Europe and Australia from which we sell swimming pool supplies, equipment and related leisure products, irrigation and landscape maintenance products and hardscapes, tile and stone products to pool builders, retail stores, service companies, landscape contractors and others. We distribute products through five networks: SCP Distributors (SCP), Superior Pool Products (Superior), Horizon Distributors (Horizon), National Pool Trends (NPT) and Sun Wholesale Supply (Sun Wholesale). Basis of Presentation and Principles of ConsolidationWe prepared the Consolidated Financial Statements following U.S. generally accepted accounting principles (GAAP) and the requirements of the Securities and Exchange Commission (SEC). The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of our financial position and operating results. The Consolidated Financial Statements include the accounts of Pool Corporation and our subsidiaries. All of our subsidiaries are wholly owned. All significant intercompany accounts and intercompany transactions have been eliminated.Use of EstimatesTo prepare financial statements that conform to GAAP, we make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Our most significant estimates relate to the allowance for doubtful accounts, inventory obsolescence reserves, vendor programs, income taxes, performance-based compensation accruals and goodwill impairment evaluations. We continually review our estimates and make adjustments as necessary, but actual results could be significantly different from what we expected when we made these estimates.Newly Adopted Accounting PronouncementsIn December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023‑09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which enhances the transparency of income tax disclosures through greater disaggregation in the effective tax rate reconciliation and expanded disclosures of income taxes paid. We adopted ASU 2023‑09 prospectively for the year ended December 31, 2025. The adoption of this standard, which enhanced our income tax related disclosures, did not have an impact on our consolidated financial statements. See Note 7 for the additional disclosures required under this standard. In July 2025, the FASB issued ASU 2025‑05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient allowing entities to assume that current conditions as of the balance sheet date will continue for the remaining life of current accounts receivable and contract assets. We adopted ASU 2025‑05 prospectively for the year ended December 31, 2025, electing the practical expedient for our trade receivables. The adoption of this standard did not have a material impact on our consolidated financial statements or related disclosures, and we do not expect it to have a material impact in future periods.Seasonality and WeatherOur business is seasonal, and weather is one of the principal external factors affecting our business. In general, sales and net income are highest during the second and third quarters, which represent the peak months of swimming pool use, pool and irrigation installation and remodeling and repair activities. Sales are lower during the first and fourth quarters.Revenue RecognitionWe recognize a sale when a customer obtains control of the product, and we record the amount that reflects the consideration we expect to receive in exchange for such product. We recognize a sale when a customer picks up product at any sales center, when we deliver product to their premises or job sites via our trucks or when we present the product to a third-party carrier."
    },
    {
      "status": "ADDED",
      "current_title": "Note 1 - Organization and Summary of Significant Accounting Policies",
      "prior_title": null,
      "current_body": "Description of BusinessAs of December 31, 2025, Pool Corporation and our subsidiaries (the Company, which may also be referred to as we, us or our) operated 456 sales centers in North America, Europe and Australia from which we sell swimming pool supplies, equipment and related leisure products, irrigation and landscape maintenance products and hardscapes, tile and stone products to pool builders, retail stores, service companies, landscape contractors and others. We distribute products through five networks: SCP Distributors (SCP), Superior Pool Products (Superior), Horizon Distributors (Horizon), National Pool Trends (NPT) and Sun Wholesale Supply (Sun Wholesale). Basis of Presentation and Principles of ConsolidationWe prepared the Consolidated Financial Statements following U.S. generally accepted accounting principles (GAAP) and the requirements of the Securities and Exchange Commission (SEC). The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of our financial position and operating results. The Consolidated Financial Statements include the accounts of Pool Corporation and our subsidiaries. All of our subsidiaries are wholly owned. All significant intercompany accounts and intercompany transactions have been eliminated."
    },
    {
      "status": "ADDED",
      "current_title": "Description of Business",
      "prior_title": null,
      "current_body": "As of December 31, 2025, Pool Corporation and our subsidiaries (the Company, which may also be referred to as we, us or our) operated 456 sales centers in North America, Europe and Australia from which we sell swimming pool supplies, equipment and related leisure products, irrigation and landscape maintenance products and hardscapes, tile and stone products to pool builders, retail stores, service companies, landscape contractors and others. We distribute products through five networks: SCP Distributors (SCP), Superior Pool Products (Superior), Horizon Distributors (Horizon), National Pool Trends (NPT) and Sun Wholesale Supply (Sun Wholesale)."
    },
    {
      "status": "ADDED",
      "current_title": "Basis of Presentation and Principles of Consolidation",
      "prior_title": null,
      "current_body": "We prepared the Consolidated Financial Statements following U.S. generally accepted accounting principles (GAAP) and the requirements of the Securities and Exchange Commission (SEC). The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of our financial position and operating results. The Consolidated Financial Statements include the accounts of Pool Corporation and our subsidiaries. All of our subsidiaries are wholly owned. All significant intercompany accounts and intercompany transactions have been eliminated. Use of EstimatesTo prepare financial statements that conform to GAAP, we make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Our most significant estimates relate to the allowance for doubtful accounts, inventory obsolescence reserves, vendor programs, income taxes, performance-based compensation accruals and goodwill impairment evaluations. We continually review our estimates and make adjustments as necessary, but actual results could be significantly different from what we expected when we made these estimates."
    },
    {
      "status": "ADDED",
      "current_title": "Use of Estimates",
      "prior_title": null,
      "current_body": "To prepare financial statements that conform to GAAP, we make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Our most significant estimates relate to the allowance for doubtful accounts, inventory obsolescence reserves, vendor programs, income taxes, performance-based compensation accruals and goodwill impairment evaluations. We continually review our estimates and make adjustments as necessary, but actual results could be significantly different from what we expected when we made these estimates. Newly Adopted Accounting PronouncementsIn December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023‑09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which enhances the transparency of income tax disclosures through greater disaggregation in the effective tax rate reconciliation and expanded disclosures of income taxes paid. We adopted ASU 2023‑09 prospectively for the year ended December 31, 2025. The adoption of this standard, which enhanced our income tax related disclosures, did not have an impact on our consolidated financial statements. See Note 7 for the additional disclosures required under this standard. In July 2025, the FASB issued ASU 2025‑05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient allowing entities to assume that current conditions as of the balance sheet date will continue for the remaining life of current accounts receivable and contract assets. We adopted ASU 2025‑05 prospectively for the year ended December 31, 2025, electing the practical expedient for our trade receivables. The adoption of this standard did not have a material impact on our consolidated financial statements or related disclosures, and we do not expect it to have a material impact in future periods."
    },
    {
      "status": "ADDED",
      "current_title": "Newly Adopted Accounting Pronouncements",
      "prior_title": null,
      "current_body": "In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023‑09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which enhances the transparency of income tax disclosures through greater disaggregation in the effective tax rate reconciliation and expanded disclosures of income taxes paid. We adopted ASU 2023‑09 prospectively for the year ended December 31, 2025. The adoption of this standard, which enhanced our income tax related disclosures, did not have an impact on our consolidated financial statements. See Note 7 for the additional disclosures required under this standard. In July 2025, the FASB issued ASU 2025‑05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient allowing entities to assume that current conditions as of the balance sheet date will continue for the remaining life of current accounts receivable and contract assets. We adopted ASU 2025‑05 prospectively for the year ended December 31, 2025, electing the practical expedient for our trade receivables. The adoption of this standard did not have a material impact on our consolidated financial statements or related disclosures, and we do not expect it to have a material impact in future periods. Seasonality and WeatherOur business is seasonal, and weather is one of the principal external factors affecting our business. In general, sales and net income are highest during the second and third quarters, which represent the peak months of swimming pool use, pool and irrigation installation and remodeling and repair activities. Sales are lower during the first and fourth quarters."
    },
    {
      "status": "ADDED",
      "current_title": "Seasonality and Weather",
      "prior_title": null,
      "current_body": "Our business is seasonal, and weather is one of the principal external factors affecting our business. In general, sales and net income are highest during the second and third quarters, which represent the peak months of swimming pool use, pool and irrigation installation and remodeling and repair activities. Sales are lower during the first and fourth quarters. Revenue RecognitionWe recognize a sale when a customer obtains control of the product, and we record the amount that reflects the consideration we expect to receive in exchange for such product. We recognize a sale when a customer picks up product at any sales center, when we deliver product to their premises or job sites via our trucks or when we present the product to a third-party carrier."
    },
    {
      "status": "ADDED",
      "current_title": "Revenue Recognition",
      "prior_title": null,
      "current_body": "We recognize a sale when a customer obtains control of the product, and we record the amount that reflects the consideration we expect to receive in exchange for such product. We recognize a sale when a customer picks up product at any sales center, when we deliver product to their premises or job sites via our trucks or when we present the product to a third-party carrier. 55 55 We consider our distribution of products to represent one reportable revenue stream. Our products are similar in nature, and our revenue recognition policy is the same across our distribution networks. Our customers share similar characteristics and generally purchase products across all categories. We recognize revenue when our customers take control of our products. We include shipping and handling fees billed to customers as freight out income within net sales. We measure revenue as the amount of consideration we expect to receive in exchange for transferring our products. Consideration may vary due to volume incentives and expected customer returns. We offer volume incentives to some of our customers and account for these incentives as a reduction of sales. We estimate the amount of volume incentives earned based on our estimate of cumulative sales for the fiscal year relative to our customers’ progress toward achieving minimum purchase requirements. We record customer returns, including those associated with customer early buy programs, as a reduction of sales. Based on available information related to our customers’ returns, we record an allowance for estimated returns, which historically has not been material. We regularly review our marketing programs, coupons and customary business practices to determine if any variable consideration exists. Other items that we record as reductions to sales include cash discounts, pricing adjustments and credit card fees related to customer payments. The majority of our sales transactions do not contain additional performance obligations after delivery; therefore, we do not have multiple performance obligations for which to allocate the transaction price. We recognize shipping and handling costs associated with outbound freight in Selling and administrative expenses. We report sales net of tax amounts that we collect from our customers and remit to governmental authorities. These tax amounts may include, but are not limited to, sales, use, value-added and some excise taxes.Vendor ProgramsMany of our arrangements with our vendors provide for us to receive specified amounts of consideration when we achieve any of a number of measures. These measures are generally related to the volume level of purchases from our vendors, or our net cost of products sold, and may include negotiated pricing arrangements. We account for consideration under vendor programs as a reduction of the prices of the vendors’ products and as a reduction of inventory until we sell the products, at which time such considerations are recognized as a reduction of Cost of sales on our Consolidated Statements of Income.Throughout the year, we estimate the amount earned based on our expectation of total purchases for the fiscal year relative to the purchase levels that mark our progress toward earning consideration under each program. We accrue vendor benefits on a monthly basis using these estimates, provided that we determine they are probable and reasonably estimable. We continually revise these estimates to reflect actual credits earned based on actual purchase levels and trends related to sales and purchasing mix. When we make adjustments to our estimates, we determine whether any portion of the adjustment impacts the amount of vendor credits that are deferred in inventory. We recognize changes in our estimates as a cumulative catch-up adjustment to the amounts recognized to date in our Consolidated Financial Statements.Shipping and Handling CostsWe record shipping and handling costs associated with inbound freight as cost of sales. The table below presents shipping and handling costs associated with outbound freight, which we include in Selling and administrative expenses (in thousands): 2025 2024 2023 $ 89,667 $ 90,268 $ 84,932 Share-Based CompensationWe record share-based compensation for stock options and other share-based awards over the requisite service period based on the estimated fair value as measured on the grant date. For stock option awards, we use a Black-Scholes model for estimating the grant date fair value. The grant date fair value of share-based awards is equal to the closing market price of our common stock on the grant date. For additional discussion of share-based compensation, see Note 6. We consider our distribution of products to represent one reportable revenue stream. Our products are similar in nature, and our revenue recognition policy is the same across our distribution networks. Our customers share similar characteristics and generally purchase products across all categories. We recognize revenue when our customers take control of our products. We include shipping and handling fees billed to customers as freight out income within net sales. We measure revenue as the amount of consideration we expect to receive in exchange for transferring our products. Consideration may vary due to volume incentives and expected customer returns. We offer volume incentives to some of our customers and account for these incentives as a reduction of sales. We estimate the amount of volume incentives earned based on our estimate of cumulative sales for the fiscal year relative to our customers’ progress toward achieving minimum purchase requirements. We record customer returns, including those associated with customer early buy programs, as a reduction of sales. Based on available information related to our customers’ returns, we record an allowance for estimated returns, which historically has not been material. We regularly review our marketing programs, coupons and customary business practices to determine if any variable consideration exists. Other items that we record as reductions to sales include cash discounts, pricing adjustments and credit card fees related to customer payments. The majority of our sales transactions do not contain additional performance obligations after delivery; therefore, we do not have multiple performance obligations for which to allocate the transaction price. We recognize shipping and handling costs associated with outbound freight in Selling and administrative expenses. We report sales net of tax amounts that we collect from our customers and remit to governmental authorities. These tax amounts may include, but are not limited to, sales, use, value-added and some excise taxes.Vendor ProgramsMany of our arrangements with our vendors provide for us to receive specified amounts of consideration when we achieve any of a number of measures. These measures are generally related to the volume level of purchases from our vendors, or our net cost of products sold, and may include negotiated pricing arrangements. We account for consideration under vendor programs as a reduction of the prices of the vendors’ products and as a reduction of inventory until we sell the products, at which time such considerations are recognized as a reduction of Cost of sales on our Consolidated Statements of Income.Throughout the year, we estimate the amount earned based on our expectation of total purchases for the fiscal year relative to the purchase levels that mark our progress toward earning consideration under each program. We accrue vendor benefits on a monthly basis using these estimates, provided that we determine they are probable and reasonably estimable. We continually revise these estimates to reflect actual credits earned based on actual purchase levels and trends related to sales and purchasing mix. When we make adjustments to our estimates, we determine whether any portion of the adjustment impacts the amount of vendor credits that are deferred in inventory. We recognize changes in our estimates as a cumulative catch-up adjustment to the amounts recognized to date in our Consolidated Financial Statements.Shipping and Handling CostsWe record shipping and handling costs associated with inbound freight as cost of sales. The table below presents shipping and handling costs associated with outbound freight, which we include in Selling and administrative expenses (in thousands): 2025 2024 2023 $ 89,667 $ 90,268 $ 84,932 Share-Based CompensationWe record share-based compensation for stock options and other share-based awards over the requisite service period based on the estimated fair value as measured on the grant date. For stock option awards, we use a Black-Scholes model for estimating the grant date fair value. The grant date fair value of share-based awards is equal to the closing market price of our common stock on the grant date. For additional discussion of share-based compensation, see Note 6. We consider our distribution of products to represent one reportable revenue stream. Our products are similar in nature, and our revenue recognition policy is the same across our distribution networks. Our customers share similar characteristics and generally purchase products across all categories. We recognize revenue when our customers take control of our products. We include shipping and handling fees billed to customers as freight out income within net sales. We measure revenue as the amount of consideration we expect to receive in exchange for transferring our products. Consideration may vary due to volume incentives and expected customer returns. We offer volume incentives to some of our customers and account for these incentives as a reduction of sales. We estimate the amount of volume incentives earned based on our estimate of cumulative sales for the fiscal year relative to our customers’ progress toward achieving minimum purchase requirements. We record customer returns, including those associated with customer early buy programs, as a reduction of sales. Based on available information related to our customers’ returns, we record an allowance for estimated returns, which historically has not been material. We regularly review our marketing programs, coupons and customary business practices to determine if any variable consideration exists. Other items that we record as reductions to sales include cash discounts, pricing adjustments and credit card fees related to customer payments. The majority of our sales transactions do not contain additional performance obligations after delivery; therefore, we do not have multiple performance obligations for which to allocate the transaction price. We recognize shipping and handling costs associated with outbound freight in Selling and administrative expenses. We report sales net of tax amounts that we collect from our customers and remit to governmental authorities. These tax amounts may include, but are not limited to, sales, use, value-added and some excise taxes. We consider our distribution of products to represent one reportable revenue stream. Our products are similar in nature, and our revenue recognition policy is the same across our distribution networks. Our customers share similar characteristics and generally purchase products across all categories. We recognize revenue when our customers take control of our products. We include shipping and handling fees billed to customers as freight out income within net sales. We measure revenue as the amount of consideration we expect to receive in exchange for transferring our products. Consideration may vary due to volume incentives and expected customer returns. We offer volume incentives to some of our customers and account for these incentives as a reduction of sales. We estimate the amount of volume incentives earned based on our estimate of cumulative sales for the fiscal year relative to our customers’ progress toward achieving minimum purchase requirements. We record customer returns, including those associated with customer early buy programs, as a reduction of sales. Based on available information related to our customers’ returns, we record an allowance for estimated returns, which historically has not been material. We regularly review our marketing programs, coupons and customary business practices to determine if any variable consideration exists. Other items that we record as reductions to sales include cash discounts, pricing adjustments and credit card fees related to customer payments. The majority of our sales transactions do not contain additional performance obligations after delivery; therefore, we do not have multiple performance obligations for which to allocate the transaction price. We recognize shipping and handling costs associated with outbound freight in Selling and administrative expenses. We report sales net of tax amounts that we collect from our customers and remit to governmental authorities. These tax amounts may include, but are not limited to, sales, use, value-added and some excise taxes. Vendor ProgramsMany of our arrangements with our vendors provide for us to receive specified amounts of consideration when we achieve any of a number of measures. These measures are generally related to the volume level of purchases from our vendors, or our net cost of products sold, and may include negotiated pricing arrangements. We account for consideration under vendor programs as a reduction of the prices of the vendors’ products and as a reduction of inventory until we sell the products, at which time such considerations are recognized as a reduction of Cost of sales on our Consolidated Statements of Income.Throughout the year, we estimate the amount earned based on our expectation of total purchases for the fiscal year relative to the purchase levels that mark our progress toward earning consideration under each program. We accrue vendor benefits on a monthly basis using these estimates, provided that we determine they are probable and reasonably estimable. We continually revise these estimates to reflect actual credits earned based on actual purchase levels and trends related to sales and purchasing mix. When we make adjustments to our estimates, we determine whether any portion of the adjustment impacts the amount of vendor credits that are deferred in inventory. We recognize changes in our estimates as a cumulative catch-up adjustment to the amounts recognized to date in our Consolidated Financial Statements."
    },
    {
      "status": "ADDED",
      "current_title": "Vendor Programs",
      "prior_title": null,
      "current_body": "Many of our vendor arrangements provide for us to receive specified amounts of consideration when we achieve certain measures. These measures generally relate to the volume level of purchases from our vendors, or our net cost of products sold, and may include negotiated pricing arrangements. We account for consideration under vendor programs as a reduction of the prices of the vendor’s products and therefore a reduction of product inventories until we sell the product, at which time we recognize such consideration as a reduction of cost of sales in our income statement. Throughout the year, we estimate the amount earned based on our expectation of total purchases for the fiscal year relative to the purchase levels that mark our progress toward earning consideration under each program. We accrue vendor program benefits on a monthly basis using these estimates provided that we determine they are probable and reasonably estimable. Our estimates for annual purchases, future inventory levels and sales of qualifying products are driven by our sales projections, which can be significantly impacted by a number of external factors including changes in economic conditions and weather. Changes in our purchasing mix also impact our estimates, as certain program rates can vary depending on our volume of purchases from specific vendors. We continually revise these estimates throughout the year to reflect actual purchase levels and identifiable trends. As a result, our estimated quarterly vendor program benefits accrual may include cumulative catch-up adjustments to reflect any changes in our estimates between reporting periods. These adjustments have a greater impact on gross margin in the fourth quarter since it is our seasonally slowest quarter and because the majority of our vendor arrangements are based on calendar year periods. We update our estimates for these arrangements at year end to reflect actual annual purchase or sales levels. In the first quarter of the subsequent year, we prepare a hindsight analysis by comparing actual vendor credits received to the prior year vendor receivable balances. Based on our most recent hindsight analysis, we concluded that our vendor program estimates were within a range of acceptable estimates and that our estimation methodology is appropriate. 32 32 If market conditions were to change, vendors may change the terms of some or all of these programs. Although such changes would not affect the amounts we have recorded related to products already purchased, they may lower or raise our cost for products purchased and sold in future periods.Income TaxesWe record deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using currently enacted rates and laws that will be in effect when we expect the differences to reverse. Due to changing tax laws and state income tax rates, significant judgment is required to estimate the effective tax rate expected to apply to tax differences that are expected to reverse in the future.We record Global Intangible Low Tax Income (GILTI) on foreign earnings as period costs if and when incurred. We have not realized any impacts since the December 2017 enactment of U.S. tax reform. As of December 31, 2025, U.S. income taxes were not provided on the earnings or cash balances of our foreign subsidiaries, outside of the provisions of the transition tax from U.S. tax reform. As we have historically invested or expect to invest the undistributed earnings indefinitely to fund current cash flow needs in the countries where held, additional income tax provisions may be required. Determining the amount of unrecognized deferred tax liability on these undistributed earnings and cash balances is not practicable due to the complexity of tax laws and regulations and the varying circumstances, tax treatments and timing of any future repatriation. We operate in 41 states, 1 United States territory and 11 foreign countries. We are subject to regular audits by federal, state and foreign tax authorities, and the amount of income taxes we pay is subject to adjustment by the applicable tax authorities. We recognize a benefit from an uncertain tax position only after determining it is more likely than not that the tax position will withstand examination by the applicable taxing authority. Our estimate for the potential outcome of any uncertain tax issue is highly judgmental. We regularly evaluate our tax positions and incorporate these expectations into our reserve estimates. We believe we have adequately provided for any reasonably foreseeable outcome related to these matters. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved, or when statutes of limitation on potential assessments expire. These adjustments may include changes in valuation allowances that we have established. As a result of these uncertainties, our total income tax provision may fluctuate on a quarterly basis.Each year, we prepare a return to provision analysis upon filing our income tax returns. Based on our most recent hindsight analysis, we concluded that our prior year income tax provision was within a range of acceptable estimates and that our provision calculation methodology is appropriate. Differences between our effective income tax rate and federal and state statutory tax rates are primarily due to excess tax benefits associated with the exercise of deductible nonqualified stock options and the lapse of restrictions on deductible restricted stock awards. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law in the U.S., including a broad range of tax reform provisions. We currently do not expect the changes resulting from the OBBBA to have a material impact on our income tax provision. Performance-Based Compensation AccrualThe Compensation and Human Capital Management Committee of our Board (Compensation Committee) and our management have designed compensation programs intended to create a performance culture. The primary objectives of our compensation programs are to attract, motivate, reward and retain our employees without leading to unnecessary risk taking. Our compensation packages include bonus plans that are specific to groups of eligible participants and their levels and areas of responsibility. The majority of our bonus plans consist of annual cash payments that are based primarily on objective performance criteria. We calculate bonuses based on the achievement of certain key measurable financial and operational results, including operating income. We use an annual cash performance award (annual bonus) to focus corporate behavior on short-term goals for growth, financial performance and other specific financial and business improvement metrics. Management sets the company’s annual bonus objectives at the beginning of the bonus plan year using both historical information and forecasted results of operations for the current plan year. Management also establishes specific business improvement objectives for both our operating units and corporate employees. The Compensation Committee approves objectives for annual bonus plans involving executive management. If market conditions were to change, vendors may change the terms of some or all of these programs. Although such changes would not affect the amounts we have recorded related to products already purchased, they may lower or raise our cost for products purchased and sold in future periods."
    },
    {
      "status": "ADDED",
      "current_title": "Shipping and Handling Costs",
      "prior_title": null,
      "current_body": "We record shipping and handling costs associated with inbound freight as cost of sales. The table below presents shipping and handling costs associated with outbound freight, which we include in Selling and administrative expenses (in thousands): The table below presents shipping and handling costs associated with outbound freight, which we include in Selling and administrative expenses (in thousands): 2025 2024 2023 $ 89,667 $ 90,268 $ 84,932 2025 2024 2023 $ 89,667 $ 90,268 $ 84,932 Share-Based CompensationWe record share-based compensation for stock options and other share-based awards over the requisite service period based on the estimated fair value as measured on the grant date. For stock option awards, we use a Black-Scholes model for estimating the grant date fair value. The grant date fair value of share-based awards is equal to the closing market price of our common stock on the grant date. For additional discussion of share-based compensation, see Note 6."
    },
    {
      "status": "ADDED",
      "current_title": "Share-Based Compensation",
      "prior_title": null,
      "current_body": "We record share-based compensation for stock options and other share-based awards over the requisite service period based on the estimated fair value as measured on the grant date. For stock option awards, we use a Black-Scholes model for estimating the grant date fair value. The grant date fair value of share-based awards is equal to the closing market price of our common stock on the grant date. For additional discussion of share-based compensation, see Note 6. 56 56 Advertising CostsWe expense advertising costs when incurred. The table below presents advertising expense for the past three years (in thousands): 2025 2024 2023 $ 22,884 $ 25,209 $ 28,532 Income TaxesOur income tax provision is based on income before income taxes and is accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to settle. We recognize future tax benefits, such as net operating losses and tax credits, to the extent that realizing these benefits is considered in its judgment to be more likely than not. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date. We regularly review the recoverability of our deferred tax assets by considering our historic profitability, projected future taxable income and timing of the reversals of existing temporary differences. When appropriate, we record a valuation allowance against deferred tax assets that are deemed not more likely than not to be realizable.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 or increase 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 in the period in which stock options are exercised or restrictions on stock awards lapse. We record Global Intangible Low Tax Income (GILTI) on foreign earnings as period costs if and when incurred. We have not realized any impacts since the U.S. first imposed taxes on GILTI in December 2017. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law in the U.S., including a broad range of tax reform provisions. We currently do not expect the changes resulting from the OBBBA to have a material impact on our income tax provision. For additional information regarding income taxes, see Note 7.Equity Method InvestmentsWe account for our 50% investment in Northpark Corporate Center, LLC (NCC) using the equity method of accounting. Accordingly, we report our share of income or loss based on our ownership interest in this investment.Earnings Per ShareWe 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 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.Diluted EPS reflects the dilutive effects of potentially dilutive securities, which include in-the-money outstanding stock options and shares to be purchased under our employee stock purchase plan. Using the treasury stock method, the effect of dilutive securities includes these additional shares of common stock that would have been outstanding based on the assumption that these potentially dilutive securities had been issued. For additional discussion of earnings per share, see Note 8. Advertising CostsWe expense advertising costs when incurred. The table below presents advertising expense for the past three years (in thousands): 2025 2024 2023 $ 22,884 $ 25,209 $ 28,532 Income TaxesOur income tax provision is based on income before income taxes and is accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to settle. We recognize future tax benefits, such as net operating losses and tax credits, to the extent that realizing these benefits is considered in its judgment to be more likely than not. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date. We regularly review the recoverability of our deferred tax assets by considering our historic profitability, projected future taxable income and timing of the reversals of existing temporary differences. When appropriate, we record a valuation allowance against deferred tax assets that are deemed not more likely than not to be realizable.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 or increase 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 in the period in which stock options are exercised or restrictions on stock awards lapse. We record Global Intangible Low Tax Income (GILTI) on foreign earnings as period costs if and when incurred. We have not realized any impacts since the U.S. first imposed taxes on GILTI in December 2017. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law in the U.S., including a broad range of tax reform provisions. We currently do not expect the changes resulting from the OBBBA to have a material impact on our income tax provision. For additional information regarding income taxes, see Note 7.Equity Method InvestmentsWe account for our 50% investment in Northpark Corporate Center, LLC (NCC) using the equity method of accounting. Accordingly, we report our share of income or loss based on our ownership interest in this investment.Earnings Per ShareWe 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 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.Diluted EPS reflects the dilutive effects of potentially dilutive securities, which include in-the-money outstanding stock options and shares to be purchased under our employee stock purchase plan. Using the treasury stock method, the effect of dilutive securities includes these additional shares of common stock that would have been outstanding based on the assumption that these potentially dilutive securities had been issued. For additional discussion of earnings per share, see Note 8. Advertising CostsWe expense advertising costs when incurred. The table below presents advertising expense for the past three years (in thousands): 2025 2024 2023 $ 22,884 $ 25,209 $ 28,532"
    },
    {
      "status": "ADDED",
      "current_title": "Advertising Costs",
      "prior_title": null,
      "current_body": "We expense advertising costs when incurred. The table below presents advertising expense for the past three years (in thousands): 2025 2024 2023 $ 22,884 $ 25,209 $ 28,532 We expense advertising costs when incurred. The table below presents advertising expense for the past three years (in thousands): 2025 2024 2023 $ 22,884 $ 25,209 $ 28,532 Income TaxesOur income tax provision is based on income before income taxes and is accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to settle. We recognize future tax benefits, such as net operating losses and tax credits, to the extent that realizing these benefits is considered in its judgment to be more likely than not. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date. We regularly review the recoverability of our deferred tax assets by considering our historic profitability, projected future taxable income and timing of the reversals of existing temporary differences. When appropriate, we record a valuation allowance against deferred tax assets that are deemed not more likely than not to be realizable.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 or increase 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 in the period in which stock options are exercised or restrictions on stock awards lapse. We record Global Intangible Low Tax Income (GILTI) on foreign earnings as period costs if and when incurred. We have not realized any impacts since the U.S. first imposed taxes on GILTI in December 2017. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law in the U.S., including a broad range of tax reform provisions. We currently do not expect the changes resulting from the OBBBA to have a material impact on our income tax provision. For additional information regarding income taxes, see Note 7."
    },
    {
      "status": "ADDED",
      "current_title": "Income Taxes",
      "prior_title": null,
      "current_body": "We record deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using currently enacted rates and laws that will be in effect when we expect the differences to reverse. Due to changing tax laws and state income tax rates, significant judgment is required to estimate the effective tax rate expected to apply to tax differences that are expected to reverse in the future. We record Global Intangible Low Tax Income (GILTI) on foreign earnings as period costs if and when incurred. We have not realized any impacts since the December 2017 enactment of U.S. tax reform. As of December 31, 2025, U.S. income taxes were not provided on the earnings or cash balances of our foreign subsidiaries, outside of the provisions of the transition tax from U.S. tax reform. As we have historically invested or expect to invest the undistributed earnings indefinitely to fund current cash flow needs in the countries where held, additional income tax provisions may be required. Determining the amount of unrecognized deferred tax liability on these undistributed earnings and cash balances is not practicable due to the complexity of tax laws and regulations and the varying circumstances, tax treatments and timing of any future repatriation. We operate in 41 states, 1 United States territory and 11 foreign countries. We are subject to regular audits by federal, state and foreign tax authorities, and the amount of income taxes we pay is subject to adjustment by the applicable tax authorities. We recognize a benefit from an uncertain tax position only after determining it is more likely than not that the tax position will withstand examination by the applicable taxing authority. Our estimate for the potential outcome of any uncertain tax issue is highly judgmental. We regularly evaluate our tax positions and incorporate these expectations into our reserve estimates. We believe we have adequately provided for any reasonably foreseeable outcome related to these matters. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved, or when statutes of limitation on potential assessments expire. These adjustments may include changes in valuation allowances that we have established. As a result of these uncertainties, our total income tax provision may fluctuate on a quarterly basis. Each year, we prepare a return to provision analysis upon filing our income tax returns. Based on our most recent hindsight analysis, we concluded that our prior year income tax provision was within a range of acceptable estimates and that our provision calculation methodology is appropriate. Differences between our effective income tax rate and federal and state statutory tax rates are primarily due to excess tax benefits associated with the exercise of deductible nonqualified stock options and the lapse of restrictions on deductible restricted stock awards. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law in the U.S., including a broad range of tax reform provisions. We currently do not expect the changes resulting from the OBBBA to have a material impact on our income tax provision."
    },
    {
      "status": "ADDED",
      "current_title": "Equity Method Investments",
      "prior_title": null,
      "current_body": "We account for our 50% investment in Northpark Corporate Center, LLC (NCC) using the equity method of accounting. Accordingly, we report our share of income or loss based on our ownership interest in this investment. Earnings Per ShareWe 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 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.Diluted EPS reflects the dilutive effects of potentially dilutive securities, which include in-the-money outstanding stock options and shares to be purchased under our employee stock purchase plan. Using the treasury stock method, the effect of dilutive securities includes these additional shares of common stock that would have been outstanding based on the assumption that these potentially dilutive securities had been issued. For additional discussion of earnings per share, see Note 8."
    },
    {
      "status": "ADDED",
      "current_title": "Earnings Per Share",
      "prior_title": null,
      "current_body": "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 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. Diluted EPS reflects the dilutive effects of potentially dilutive securities, which include in-the-money outstanding stock options and shares to be purchased under our employee stock purchase plan. Using the treasury stock method, the effect of dilutive securities includes these additional shares of common stock that would have been outstanding based on the assumption that these potentially dilutive securities had been issued. For additional discussion of earnings per share, see Note 8. 57 57 Foreign CurrencyThe functional currency of each of our foreign subsidiaries is its applicable local currency. We translate our foreign subsidiary financial statements into U.S. dollars based on published exchange rates. We include these translation adjustments as a component of Accumulated other comprehensive loss on the Consolidated Balance Sheets. We include realized transaction gains and losses that arise from exchange rate fluctuations in Interest and other non-operating expenses, net on the Consolidated Statements of Income. We realized a net foreign currency transaction gain of $0.5 million in 2025, loss of $0.2 million in 2024 and gain of $0.8 million in 2023. Fair Value Measurements Recurring Fair Value Measurements Our assets and liabilities that are measured at fair value on a recurring basis include the unrealized gains or losses on our interest rate swap contracts and our deferred compensation plan asset and liability. The three levels of the fair value hierarchy under the accounting guidance are described below:Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.Level 2 Inputs to the valuation methodology include:•quoted prices for similar assets or liabilities in active markets;•quoted prices for identical or similar assets or liabilities in inactive markets;•inputs other than quoted prices that are observable for the asset or liability; or•inputs that are derived principally from or corroborated by observable market data by correlation or other means.Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement.The table below presents our assets and liabilities measured and recorded at fair value on a recurring basis (in thousands): Fair Value at December 31, Input Level Classification 2025 2024 Assets Unrealized gains on interest rate swaps Level 2 Prepaid expenses and other current assets $ — $ 734 Unrealized gains on interest rate swaps Level 2 Other assets 9,115 19,876 Deferred compensation plan asset Level 1 Other assets 19,682 18,018 Liabilities Deferred compensation plan liability Level 1 Other long-term liabilities $ 19,682 $ 18,018 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.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 our deferred compensation plan. We record an equal and offsetting deferred compensation plan liability, which represents our obligation to participating employees. Changes in the fair value of the plan asset and Foreign CurrencyThe functional currency of each of our foreign subsidiaries is its applicable local currency. We translate our foreign subsidiary financial statements into U.S. dollars based on published exchange rates. We include these translation adjustments as a component of Accumulated other comprehensive loss on the Consolidated Balance Sheets. We include realized transaction gains and losses that arise from exchange rate fluctuations in Interest and other non-operating expenses, net on the Consolidated Statements of Income. We realized a net foreign currency transaction gain of $0.5 million in 2025, loss of $0.2 million in 2024 and gain of $0.8 million in 2023. Fair Value Measurements Recurring Fair Value Measurements Our assets and liabilities that are measured at fair value on a recurring basis include the unrealized gains or losses on our interest rate swap contracts and our deferred compensation plan asset and liability. The three levels of the fair value hierarchy under the accounting guidance are described below:Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.Level 2 Inputs to the valuation methodology include:•quoted prices for similar assets or liabilities in active markets;•quoted prices for identical or similar assets or liabilities in inactive markets;•inputs other than quoted prices that are observable for the asset or liability; or•inputs that are derived principally from or corroborated by observable market data by correlation or other means.Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement.The table below presents our assets and liabilities measured and recorded at fair value on a recurring basis (in thousands): Fair Value at December 31, Input Level Classification 2025 2024 Assets Unrealized gains on interest rate swaps Level 2 Prepaid expenses and other current assets $ — $ 734 Unrealized gains on interest rate swaps Level 2 Other assets 9,115 19,876 Deferred compensation plan asset Level 1 Other assets 19,682 18,018 Liabilities Deferred compensation plan liability Level 1 Other long-term liabilities $ 19,682 $ 18,018 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.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 our deferred compensation plan. We record an equal and offsetting deferred compensation plan liability, which represents our obligation to participating employees. Changes in the fair value of the plan asset and Foreign CurrencyThe functional currency of each of our foreign subsidiaries is its applicable local currency. We translate our foreign subsidiary financial statements into U.S. dollars based on published exchange rates. We include these translation adjustments as a component of Accumulated other comprehensive loss on the Consolidated Balance Sheets. We include realized transaction gains and losses that arise from exchange rate fluctuations in Interest and other non-operating expenses, net on the Consolidated Statements of Income. We realized a net foreign currency transaction gain of $0.5 million in 2025, loss of $0.2 million in 2024 and gain of $0.8 million in 2023."
    },
    {
      "status": "ADDED",
      "current_title": "Foreign Currency",
      "prior_title": null,
      "current_body": "The functional currency of each of our foreign subsidiaries is its applicable local currency. We translate our foreign subsidiary financial statements into U.S. dollars based on published exchange rates. We include these translation adjustments as a component of Accumulated other comprehensive loss on the Consolidated Balance Sheets. We include realized transaction gains and losses that arise from exchange rate fluctuations in Interest and other non-operating expenses, net on the Consolidated Statements of Income. We realized a net foreign currency transaction gain of $0.5 million in 2025, loss of $0.2 million in 2024 and gain of $0.8 million in 2023. Fair Value Measurements Recurring Fair Value Measurements Our assets and liabilities that are measured at fair value on a recurring basis include the unrealized gains or losses on our interest rate swap contracts and our deferred compensation plan asset and liability. The three levels of the fair value hierarchy under the accounting guidance are described below:Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.Level 2 Inputs to the valuation methodology include:•quoted prices for similar assets or liabilities in active markets;•quoted prices for identical or similar assets or liabilities in inactive markets;•inputs other than quoted prices that are observable for the asset or liability; or•inputs that are derived principally from or corroborated by observable market data by correlation or other means.Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement.The table below presents our assets and liabilities measured and recorded at fair value on a recurring basis (in thousands): Fair Value at December 31, Input Level Classification 2025 2024 Assets Unrealized gains on interest rate swaps Level 2 Prepaid expenses and other current assets $ — $ 734 Unrealized gains on interest rate swaps Level 2 Other assets 9,115 19,876 Deferred compensation plan asset Level 1 Other assets 19,682 18,018 Liabilities Deferred compensation plan liability Level 1 Other long-term liabilities $ 19,682 $ 18,018 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.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 our deferred compensation plan. We record an equal and offsetting deferred compensation plan liability, which represents our obligation to participating employees. Changes in the fair value of the plan asset and"
    },
    {
      "status": "ADDED",
      "current_title": "Fair Value Measurements",
      "prior_title": null,
      "current_body": "Recurring Fair Value Measurements Our assets and liabilities that are measured at fair value on a recurring basis include the unrealized gains or losses on our interest rate swap contracts and our deferred compensation plan asset and liability. The three levels of the fair value hierarchy under the accounting guidance are described below: Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets. Level 2 Inputs to the valuation methodology include: •quoted prices for similar assets or liabilities in active markets; quoted prices for similar assets or liabilities in active markets; •quoted prices for identical or similar assets or liabilities in inactive markets; quoted prices for identical or similar assets or liabilities in inactive markets; •inputs other than quoted prices that are observable for the asset or liability; or inputs other than quoted prices that are observable for the asset or liability; or •inputs that are derived principally from or corroborated by observable market data by correlation or other means. inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The table below presents our assets and liabilities measured and recorded at fair value on a recurring basis (in thousands): Fair Value at December 31, Input Level Classification 2025 2024 Assets Unrealized gains on interest rate swaps Level 2 Prepaid expenses and other current assets $ — $ 734 Unrealized gains on interest rate swaps Level 2 Other assets 9,115 19,876 Deferred compensation plan asset Level 1 Other assets 19,682 18,018 Liabilities Deferred compensation plan liability Level 1 Other long-term liabilities $ 19,682 $ 18,018 The table below presents our assets and liabilities measured and recorded at fair value on a recurring basis (in thousands):"
    },
    {
      "status": "ADDED",
      "current_title": "Classification",
      "prior_title": null,
      "current_body": "2025 2024 Assets Unrealized gains on interest rate swaps Level 2 Prepaid expenses and other current assets $ — $ 734 Unrealized gains on interest rate swaps Level 2 Other assets 9,115 19,876 Deferred compensation plan asset Level 1 Other assets 19,682 18,018"
    },
    {
      "status": "ADDED",
      "current_title": "Liabilities",
      "prior_title": null,
      "current_body": "Deferred compensation plan liability Level 1 Other long-term liabilities $ 19,682 $ 18,018 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. 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 our deferred compensation plan. We record an equal and offsetting deferred compensation plan liability, which represents our obligation to participating employees. Changes in the fair value of the plan asset and 58 58 liability are reflected in Selling and administrative expenses on the Consolidated Statements of Income. For additional discussion of our nonqualified deferred compensation plan, see Note 11. 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).Nonrecurring Fair Value Measurements In addition to our assets and liabilities that we measure at fair value on a recurring basis, our assets and liabilities are also subject to nonrecurring fair value measurements. Certain of our assets are recorded at fair value on a nonrecurring basis, primarily assets acquired in a business combination or those subject to impairment charges. For additional discussion of goodwill and intangible assets and impairment, see Note 3. Derivatives and Hedging ActivitiesAt inception, we formally designate and document our interest rate swap contracts that qualify for hedge accounting as cash flow hedges of interest payments on variable rate borrowings. We formally assess, both at inception and at least quarterly, whether the financial instruments used in hedging transactions are effective at offsetting changes in cash flows of the related underlying exposure. To the extent our derivatives are effective in offsetting the variability of the hedged cash flows, we record the changes in the estimated fair value of our interest rate swap contracts to Accumulated other comprehensive loss on the Consolidated Balance Sheets. Our interest rate 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.We recognize any differences between the variable interest rate in effect and the fixed interest rate per our swap contracts as an adjustment to interest expense over the life of the swaps. For our interest rate swap contracts currently in effect, 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 to Interest and other non-operating expenses, net on the Consolidated Statements of Income. These amounts were not material in any period presented. For additional discussion of our interest rate swaps, see Note 5. Cash EquivalentsWe consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.Credit Risk and Allowance for Doubtful AccountsWe record trade receivables at the invoiced amounts less an allowance for doubtful accounts for estimated losses we may incur if customers do not pay. We perform periodic credit evaluations of our customers, and we typically do not require collateral. Consistent with industry practices, we generally require payment from our North American customers within 30 days, except for sales under early buy programs for which we provide extended payment terms to qualified customers.We estimate future losses based on historical bad debts, customer receivable balances, age of customer receivable balances, customers’ financial conditions and current economic trends, including certain trends in the housing market, the availability of consumer credit and general economic conditions (as commonly measured by GDP). We monitor housing market trends through review of the House Price Index as published by the Federal Housing Finance Agency, which measures the movement of single-family house prices. At the end of each quarter, we perform a reserve analysis of all accounts with balances greater than $20,000 that are more than 60 days past due. During the year, we write off account balances when we have exhausted reasonable collection efforts and determined that the likelihood of collection is remote. These write-offs are charged against our allowance for doubtful accounts. liability are reflected in Selling and administrative expenses on the Consolidated Statements of Income. For additional discussion of our nonqualified deferred compensation plan, see Note 11. 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).Nonrecurring Fair Value Measurements In addition to our assets and liabilities that we measure at fair value on a recurring basis, our assets and liabilities are also subject to nonrecurring fair value measurements. Certain of our assets are recorded at fair value on a nonrecurring basis, primarily assets acquired in a business combination or those subject to impairment charges. For additional discussion of goodwill and intangible assets and impairment, see Note 3. Derivatives and Hedging ActivitiesAt inception, we formally designate and document our interest rate swap contracts that qualify for hedge accounting as cash flow hedges of interest payments on variable rate borrowings. We formally assess, both at inception and at least quarterly, whether the financial instruments used in hedging transactions are effective at offsetting changes in cash flows of the related underlying exposure. To the extent our derivatives are effective in offsetting the variability of the hedged cash flows, we record the changes in the estimated fair value of our interest rate swap contracts to Accumulated other comprehensive loss on the Consolidated Balance Sheets. Our interest rate 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.We recognize any differences between the variable interest rate in effect and the fixed interest rate per our swap contracts as an adjustment to interest expense over the life of the swaps. For our interest rate swap contracts currently in effect, 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 to Interest and other non-operating expenses, net on the Consolidated Statements of Income. These amounts were not material in any period presented. For additional discussion of our interest rate swaps, see Note 5. Cash EquivalentsWe consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.Credit Risk and Allowance for Doubtful AccountsWe record trade receivables at the invoiced amounts less an allowance for doubtful accounts for estimated losses we may incur if customers do not pay. We perform periodic credit evaluations of our customers, and we typically do not require collateral. Consistent with industry practices, we generally require payment from our North American customers within 30 days, except for sales under early buy programs for which we provide extended payment terms to qualified customers.We estimate future losses based on historical bad debts, customer receivable balances, age of customer receivable balances, customers’ financial conditions and current economic trends, including certain trends in the housing market, the availability of consumer credit and general economic conditions (as commonly measured by GDP). We monitor housing market trends through review of the House Price Index as published by the Federal Housing Finance Agency, which measures the movement of single-family house prices. At the end of each quarter, we perform a reserve analysis of all accounts with balances greater than $20,000 that are more than 60 days past due. During the year, we write off account balances when we have exhausted reasonable collection efforts and determined that the likelihood of collection is remote. These write-offs are charged against our allowance for doubtful accounts. liability are reflected in Selling and administrative expenses on the Consolidated Statements of Income. For additional discussion of our nonqualified deferred compensation plan, see Note 11. 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).Nonrecurring Fair Value Measurements In addition to our assets and liabilities that we measure at fair value on a recurring basis, our assets and liabilities are also subject to nonrecurring fair value measurements. Certain of our assets are recorded at fair value on a nonrecurring basis, primarily assets acquired in a business combination or those subject to impairment charges. For additional discussion of goodwill and intangible assets and impairment, see Note 3. liability are reflected in Selling and administrative expenses on the Consolidated Statements of Income. For additional discussion of our nonqualified deferred compensation plan, see Note 11. 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). Nonrecurring Fair Value Measurements In addition to our assets and liabilities that we measure at fair value on a recurring basis, our assets and liabilities are also subject to nonrecurring fair value measurements. Certain of our assets are recorded at fair value on a nonrecurring basis, primarily assets acquired in a business combination or those subject to impairment charges. For additional discussion of goodwill and intangible assets and impairment, see Note 3. Derivatives and Hedging ActivitiesAt inception, we formally designate and document our interest rate swap contracts that qualify for hedge accounting as cash flow hedges of interest payments on variable rate borrowings. We formally assess, both at inception and at least quarterly, whether the financial instruments used in hedging transactions are effective at offsetting changes in cash flows of the related underlying exposure. To the extent our derivatives are effective in offsetting the variability of the hedged cash flows, we record the changes in the estimated fair value of our interest rate swap contracts to Accumulated other comprehensive loss on the Consolidated Balance Sheets. Our interest rate 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.We recognize any differences between the variable interest rate in effect and the fixed interest rate per our swap contracts as an adjustment to interest expense over the life of the swaps. For our interest rate swap contracts currently in effect, 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 to Interest and other non-operating expenses, net on the Consolidated Statements of Income. These amounts were not material in any period presented. For additional discussion of our interest rate swaps, see Note 5."
    },
    {
      "status": "ADDED",
      "current_title": "Derivatives and Hedging Activities",
      "prior_title": null,
      "current_body": "At inception, we formally designate and document our interest rate swap contracts that qualify for hedge accounting as cash flow hedges of interest payments on variable rate borrowings. We formally assess, both at inception and at least quarterly, whether the financial instruments used in hedging transactions are effective at offsetting changes in cash flows of the related underlying exposure. To the extent our derivatives are effective in offsetting the variability of the hedged cash flows, we record the changes in the estimated fair value of our interest rate swap contracts to Accumulated other comprehensive loss on the Consolidated Balance Sheets. Our interest rate 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. We recognize any differences between the variable interest rate in effect and the fixed interest rate per our swap contracts as an adjustment to interest expense over the life of the swaps. For our interest rate swap contracts currently in effect, 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 to Interest and other non-operating expenses, net on the Consolidated Statements of Income. These amounts were not material in any period presented. For additional discussion of our interest rate swaps, see Note 5. Cash EquivalentsWe consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents."
    },
    {
      "status": "ADDED",
      "current_title": "Cash Equivalents",
      "prior_title": null,
      "current_body": "We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Credit Risk and Allowance for Doubtful AccountsWe record trade receivables at the invoiced amounts less an allowance for doubtful accounts for estimated losses we may incur if customers do not pay. We perform periodic credit evaluations of our customers, and we typically do not require collateral. Consistent with industry practices, we generally require payment from our North American customers within 30 days, except for sales under early buy programs for which we provide extended payment terms to qualified customers.We estimate future losses based on historical bad debts, customer receivable balances, age of customer receivable balances, customers’ financial conditions and current economic trends, including certain trends in the housing market, the availability of consumer credit and general economic conditions (as commonly measured by GDP). We monitor housing market trends through review of the House Price Index as published by the Federal Housing Finance Agency, which measures the movement of single-family house prices. At the end of each quarter, we perform a reserve analysis of all accounts with balances greater than $20,000 that are more than 60 days past due. During the year, we write off account balances when we have exhausted reasonable collection efforts and determined that the likelihood of collection is remote. These write-offs are charged against our allowance for doubtful accounts."
    },
    {
      "status": "ADDED",
      "current_title": "Credit Risk and Allowance for Doubtful Accounts",
      "prior_title": null,
      "current_body": "We record trade receivables at the invoiced amounts less an allowance for doubtful accounts for estimated losses we may incur if customers do not pay. We perform periodic credit evaluations of our customers, and we typically do not require collateral. Consistent with industry practices, we generally require payment from our North American customers within 30 days, except for sales under early buy programs for which we provide extended payment terms to qualified customers. We estimate future losses based on historical bad debts, customer receivable balances, age of customer receivable balances, customers’ financial conditions and current economic trends, including certain trends in the housing market, the availability of consumer credit and general economic conditions (as commonly measured by GDP). We monitor housing market trends through review of the House Price Index as published by the Federal Housing Finance Agency, which measures the movement of single-family house prices. At the end of each quarter, we perform a reserve analysis of all accounts with balances greater than $20,000 that are more than 60 days past due. During the year, we write off account balances when we have exhausted reasonable collection efforts and determined that the likelihood of collection is remote. These write-offs are charged against our allowance for doubtful accounts. 60 59 59 The following table summarizes the changes in our allowance for doubtful accounts for the past three years (in thousands): 2025 2024 2023 Balance at beginning of year $ 8,593 $ 11,718 $ 9,522 Bad debt expense 2,868 4,187 7,526 Write-offs, net of recoveries (3,457 ) (7,312 ) (5,330 ) Balance at end of year $ 8,004 $ 8,593 $ 11,718 Product Inventories and Reserve for Inventory ObsolescenceProduct inventories consist primarily of goods we purchase from manufacturers to sell to our customers. We record inventory at the lower of cost, using the moving average cost method, or net realizable value. We establish our reserve for inventory obsolescence based on inventory with lower sales velocity and inventory with no sales for the past 12 months, which we believe represent some exposure to inventory obsolescence. The reserve is intended to reflect the net realizable value of inventory that we may not be able to sell at a profit.In evaluating the adequacy of our reserve for inventory obsolescence, we consider a combination of factors including:•the level of inventory in relation to historical sales by product, including inventory usage based on product sales at both the sales center and on a company-wide basis;•changes in customer preferences or regulatory requirements;•seasonal fluctuations in inventory levels;•geographic location; and•superseded products and new product offerings.We periodically adjust our reserve for inventory obsolescence as changes occur in the above-identified factors.The following table summarizes the changes in our reserve for inventory obsolescence for the past three years (in thousands): 2025 2024 2023 Balance at beginning of year $ 26,662 $ 23,464 $ 21,208 Provision for inventory write-downs 3,951 10,484 8,483 Deduction for inventory write-offs (6,707 ) (7,286 ) (6,227 ) Balance at end of year $ 23,906 $ 26,662 $ 23,464 Property and EquipmentProperty and equipment are stated at cost. We depreciate property and equipment on a straight-line basis over the following estimated useful lives: Buildings 40 years Leasehold improvements (1) 1 - 10 years Autos and trucks 3 - 6 years Machinery and equipment 3 - 15 years Computer equipment 3 - 7 years Furniture and fixtures 5 - 10 years (1)For substantial improvements made near the end of a lease term where we are reasonably certain the lease will be renewed, we amortize the leasehold improvement over the remaining life of the lease including the expected renewal period.The table below presents depreciation expense for the past three years (in thousands): 2025 2024 2023 $ 42,678 $ 36,784 $ 31,585 The following table summarizes the changes in our allowance for doubtful accounts for the past three years (in thousands): 2025 2024 2023 Balance at beginning of year $ 8,593 $ 11,718 $ 9,522 Bad debt expense 2,868 4,187 7,526 Write-offs, net of recoveries (3,457 ) (7,312 ) (5,330 ) Balance at end of year $ 8,004 $ 8,593 $ 11,718 Product Inventories and Reserve for Inventory ObsolescenceProduct inventories consist primarily of goods we purchase from manufacturers to sell to our customers. We record inventory at the lower of cost, using the moving average cost method, or net realizable value. We establish our reserve for inventory obsolescence based on inventory with lower sales velocity and inventory with no sales for the past 12 months, which we believe represent some exposure to inventory obsolescence. The reserve is intended to reflect the net realizable value of inventory that we may not be able to sell at a profit.In evaluating the adequacy of our reserve for inventory obsolescence, we consider a combination of factors including:•the level of inventory in relation to historical sales by product, including inventory usage based on product sales at both the sales center and on a company-wide basis;•changes in customer preferences or regulatory requirements;•seasonal fluctuations in inventory levels;•geographic location; and•superseded products and new product offerings.We periodically adjust our reserve for inventory obsolescence as changes occur in the above-identified factors.The following table summarizes the changes in our reserve for inventory obsolescence for the past three years (in thousands): 2025 2024 2023 Balance at beginning of year $ 26,662 $ 23,464 $ 21,208 Provision for inventory write-downs 3,951 10,484 8,483 Deduction for inventory write-offs (6,707 ) (7,286 ) (6,227 ) Balance at end of year $ 23,906 $ 26,662 $ 23,464 Property and EquipmentProperty and equipment are stated at cost. We depreciate property and equipment on a straight-line basis over the following estimated useful lives: Buildings 40 years Leasehold improvements (1) 1 - 10 years Autos and trucks 3 - 6 years Machinery and equipment 3 - 15 years Computer equipment 3 - 7 years Furniture and fixtures 5 - 10 years (1)For substantial improvements made near the end of a lease term where we are reasonably certain the lease will be renewed, we amortize the leasehold improvement over the remaining life of the lease including the expected renewal period.The table below presents depreciation expense for the past three years (in thousands): 2025 2024 2023 $ 42,678 $ 36,784 $ 31,585 The following table summarizes the changes in our allowance for doubtful accounts for the past three years (in thousands): 2025 2024 2023 Balance at beginning of year $ 8,593 $ 11,718 $ 9,522 Bad debt expense 2,868 4,187 7,526 Write-offs, net of recoveries (3,457 ) (7,312 ) (5,330 ) Balance at end of year $ 8,004 $ 8,593 $ 11,718 The following table summarizes the changes in our allowance for doubtful accounts for the past three years (in thousands): 2025 2024 2023 Balance at beginning of year $ 8,593 $ 11,718 $ 9,522 Bad debt expense 2,868 4,187 7,526 Write-offs, net of recoveries (3,457 ) (7,312 ) (5,330 ) Balance at end of year $ 8,004 $ 8,593 $ 11,718 The following table summarizes the changes in our allowance for doubtful accounts for the past three years (in thousands): 2025 2024 2023 Balance at beginning of year $ 8,593 $ 11,718 $ 9,522 Bad debt expense 2,868 4,187 7,526 Write-offs, net of recoveries (3,457 ) (7,312 ) (5,330 ) Balance at end of year $ 8,004 $ 8,593 $ 11,718 Product Inventories and Reserve for Inventory ObsolescenceProduct inventories consist primarily of goods we purchase from manufacturers to sell to our customers. We record inventory at the lower of cost, using the moving average cost method, or net realizable value. We establish our reserve for inventory obsolescence based on inventory with lower sales velocity and inventory with no sales for the past 12 months, which we believe represent some exposure to inventory obsolescence. The reserve is intended to reflect the net realizable value of inventory that we may not be able to sell at a profit.In evaluating the adequacy of our reserve for inventory obsolescence, we consider a combination of factors including:•the level of inventory in relation to historical sales by product, including inventory usage based on product sales at both the sales center and on a company-wide basis;•changes in customer preferences or regulatory requirements;•seasonal fluctuations in inventory levels;•geographic location; and•superseded products and new product offerings.We periodically adjust our reserve for inventory obsolescence as changes occur in the above-identified factors.The following table summarizes the changes in our reserve for inventory obsolescence for the past three years (in thousands): 2025 2024 2023 Balance at beginning of year $ 26,662 $ 23,464 $ 21,208 Provision for inventory write-downs 3,951 10,484 8,483 Deduction for inventory write-offs (6,707 ) (7,286 ) (6,227 ) Balance at end of year $ 23,906 $ 26,662 $ 23,464"
    },
    {
      "status": "ADDED",
      "current_title": "Product Inventories and Reserve for Inventory Obsolescence",
      "prior_title": null,
      "current_body": "Product inventories consist primarily of goods we purchase from manufacturers to sell to our customers. We record inventory at the lower of cost, using the moving average cost method, or net realizable value. We establish our reserve for inventory obsolescence based on inventory with lower sales velocity and inventory with no sales for the past 12 months, which we believe represent some exposure to inventory obsolescence. The reserve is intended to reflect the net realizable value of inventory that we may not be able to sell at a profit. 12 In evaluating the adequacy of our reserve for inventory obsolescence, we consider a combination of factors including: •the level of inventory in relation to historical sales by product, including inventory usage based on product sales at both the sales center and on a company-wide basis; the level of inventory in relation to historical sales by product, including inventory usage based on product sales at both the sales center and on a company-wide basis; •changes in customer preferences or regulatory requirements; changes in customer preferences or regulatory requirements; •seasonal fluctuations in inventory levels; seasonal fluctuations in inventory levels; •geographic location; and geographic location; and •superseded products and new product offerings. superseded products and new product offerings. We periodically adjust our reserve for inventory obsolescence as changes occur in the above-identified factors. The following table summarizes the changes in our reserve for inventory obsolescence for the past three years (in thousands): 2025 2024 2023 Balance at beginning of year $ 26,662 $ 23,464 $ 21,208 Provision for inventory write-downs 3,951 10,484 8,483 Deduction for inventory write-offs (6,707 ) (7,286 ) (6,227 ) Balance at end of year $ 23,906 $ 26,662 $ 23,464 The following table summarizes the changes in our reserve for inventory obsolescence for the past three years (in thousands): 2025 2024 2023 Balance at beginning of year $ 26,662 $ 23,464 $ 21,208 Provision for inventory write-downs 3,951 10,484 8,483 Deduction for inventory write-offs (6,707 ) (7,286 ) (6,227 ) Balance at end of year $ 23,906 $ 26,662 $ 23,464 Property and EquipmentProperty and equipment are stated at cost. We depreciate property and equipment on a straight-line basis over the following estimated useful lives: Buildings 40 years Leasehold improvements (1) 1 - 10 years Autos and trucks 3 - 6 years Machinery and equipment 3 - 15 years Computer equipment 3 - 7 years Furniture and fixtures 5 - 10 years (1)For substantial improvements made near the end of a lease term where we are reasonably certain the lease will be renewed, we amortize the leasehold improvement over the remaining life of the lease including the expected renewal period.The table below presents depreciation expense for the past three years (in thousands): 2025 2024 2023 $ 42,678 $ 36,784 $ 31,585"
    },
    {
      "status": "ADDED",
      "current_title": "Property and Equipment",
      "prior_title": null,
      "current_body": "Property and equipment are stated at cost. We depreciate property and equipment on a straight-line basis over the following estimated useful lives: We depreciate property and equipment on a straight-line basis over the following estimated useful lives: Buildings 40 years Leasehold improvements (1) 1 - 10 years Autos and trucks 3 - 6 years Machinery and equipment 3 - 15 years Computer equipment 3 - 7 years Furniture and fixtures 5 - 10 years (1)For substantial improvements made near the end of a lease term where we are reasonably certain the lease will be renewed, we amortize the leasehold improvement over the remaining life of the lease including the expected renewal period. Buildings 40 years 40 Leasehold improvements (1) 1 - 10 years 1 10 Autos and trucks 3 - 6 years 3 6 Machinery and equipment 3 - 15 years 3 15 Computer equipment 3 - 7 years 3 7 Furniture and fixtures 5 - 10 years 5 10 (1)For substantial improvements made near the end of a lease term where we are reasonably certain the lease will be renewed, we amortize the leasehold improvement over the remaining life of the lease including the expected renewal period. For substantial improvements made near the end of a lease term where we are reasonably certain the lease will be renewed, we amortize the leasehold improvement over the remaining life of the lease including the expected renewal period. For substantial improvements made near the end of a lease term where we are reasonably certain the lease will be renewed, we amortize the leasehold improvement over the remaining life of the lease including the expected renewal period. The table below presents depreciation expense for the past three years (in thousands): 2025 2024 2023 $ 42,678 $ 36,784 $ 31,585 The table below presents depreciation expense for the past three years (in thousands): 2025 2024 2023 $ 42,678 $ 36,784 $ 31,585"
    },
    {
      "status": "REMOVED",
      "current_title": null,
      "prior_title": "Cautionary Statement for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995",
      "prior_body": "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 industry, economic, 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 the expected results in any forward-looking statement will be achieved, and actual results may differ materially due to one or more factors, including the risks described below in this Item 1A, below in Item 7 of this Form 10-K and elsewhere in this Form 10-K. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act."
    },
    {
      "status": "REMOVED",
      "current_title": null,
      "prior_title": "Risk Factors",
      "prior_body": "Investing in our securities involves multiple risks and uncertainties. Certain factors that may affect our business and could cause actual results to differ materially from those expressed in any forward-looking statement are described below. Investors should carefully consider the risks described below in addition to the other information set forth in this Annual Report on Form 10-K. The risks discussed below are not the only risks we face. Other risks or uncertainties not presently known to us, or that we currently believe are immaterial, may emerge or materially affect our business if they occur. Further, our business may also be affected by additional factors that generally apply to all companies operating in the U.S. and globally, which we have not included below."
    },
    {
      "status": "REMOVED",
      "current_title": null,
      "prior_title": "The demand for our products may be adversely affected by unfavorable economic conditions and changes in consumer discretionary spending.",
      "prior_body": "Demand for our products is subject to fluctuations and is difficult to predict, often due to factors outside of our control. Consumer discretionary spending significantly affects our sales and is impacted by a variety of factors, including changes in general economic conditions, the housing market, unemployment rates, wage levels, interest rate fluctuations, inflation, disposable income levels, consumer confidence and access to credit. In times of economic uncertainty, the demand for swimming pool, irrigation, landscape and related outdoor living products typically declines, often corresponding with declines in discretionary consumer spending. Currently, we estimate that approximately 64% of our net sales are derived from maintenance and minor repair products, while approximately 22% of our sales are derived from products used in the remodel, renovation, and upgrade of pools. However, the growth in these portions of our business depends on the expansion of the installed pool base, which has been and could in the future be adversely affected by decreases in construction activities, similar to the trends experienced in 2023 and 2024. A weak economy may also cause consumers to defer discretionary replacement and renovation activity. Even in generally favorable economic conditions, severe or prolonged downturns in the housing market could have a material adverse impact on our financial performance. Such downturns expose us to certain additional risks, including but not limited to the risk of customer closures or bankruptcies, which could shrink our potential customer base and inhibit our ability to collect on those customers’ receivables. We believe that homeowners’ access to consumer credit at attractive interest rates is a critical factor enabling the purchase of new pools, irrigation systems and outdoor living products and to a lesser extent, major renovations and remodel projects. Unfavorable economic conditions or a downturn in the housing market could result in a significant tightening of credit markets, which can limit the ability of consumers to access financing for these purchases. Over the past couple years, new pool construction projects have decreased, impacted by higher interest rates and inflation, increased economic uncertainties, and tightened consumer credit. While inflation and interest rates have recently moderated, uncertainty remains, including as to the timing and magnitude of further reductions by the Federal Reserve of its overnight borrowing rate and its corresponding impact on the market. 12 12 12 Discretionary spending is often adversely affected during times of economic, social or political uncertainty, whether caused by health threats, man-made or natural disasters, or other similar events discussed below in this item 1A. These events could create uncertainties that negatively impact our business in ways that we cannot presently predict. Changes in our customer base could also impact us. Our business could be adversely impacted if (i) consolidation of our customers leads to changes in purchasing habits, (ii) more people choose to live in urban settings or rented space or (iii) more homeowners bypass our customers by directly procuring their own supplies or undertaking their own improvement projects."
    },
    {
      "status": "REMOVED",
      "current_title": null,
      "prior_title": "An outbreak of disease or similar public health threat could adversely impact our business and results of operations.",
      "prior_body": "An outbreak of disease or similar public health threat, such as the COVID-19 pandemic and its negative impact on the worldwide economy, could have an adverse impact on our workforce, supply chain or operations. Although our revenues increased during the COVID-19 pandemic that began in early 2020, we cannot assure you that our revenues would increase in the event of a future public health emergency. Any future public health crises, and any corresponding governmental response, could adversely impact our business and results of operations in ways that we cannot predict."
    },
    {
      "status": "REMOVED",
      "current_title": null,
      "prior_title": "Lapses in our disclosure controls and procedures or internal control over financial reporting could materially and adversely affect us.",
      "prior_body": "We maintain disclosure controls and procedures designed to provide reasonable assurances regarding the accuracy and completeness of our SEC reports and internal control over financial reporting designed to provide reasonable assurance regarding the reliability and compliance with U.S. generally accepted accounting principles (GAAP) of our financial statements. We cannot assure you these measures will be effective. 19 19 19"
    },
    {
      "status": "MODIFIED",
      "current_title": "Changes in import policy or trade relations, interruptions in our supply chain or increased commodity or supply chain costs could adversely affect our results of operations.",
      "prior_title": "Changes in import policy or trade relations, interruptions in our supply chain or increased commodity or supply chain costs could adversely affect our results of operations.",
      "similarity_score": 0.916,
      "confidence": "high",
      "key_changes": [
        "Reworded sentence: \"Because we source certain products from outside the United States, major changes in tax policy, import or export regulations, other trade restrictions or trade relations, such as the imposition of tariffs or duties on imported products, could adversely affect our business, results of operations, effective income tax rate, liquidity and net income.\"",
        "Reworded sentence: \"Moreover, in recent years, the United States has increased its tariff rates or imposed new tariffs or trade restrictions.\""
      ],
      "current_body": "Because we source certain products from outside the United States, major changes in tax policy, import or export regulations, other trade restrictions or trade relations, such as the imposition of tariffs or duties on imported products, could adversely affect our business, results of operations, effective income tax rate, liquidity and net income. Additionally, following annual administrative reviews, final duty rates determined by the U.S. Department of Commerce may be higher or lower than rates paid at import. As a result, we may receive refunds or owe additional duties on imported product. The outcome can vary by year and by product. The variability and complexity of tariffs and duties exposes us to the risk of higher costs and inadvertent noncompliance associated with our imported products. Moreover, in recent years, the United States has increased its tariff rates or imposed new tariffs or trade restrictions. Changes in laws, court rulings or differences in interpretation on product classification could lead to changes in duty and tariff rates on these or other imported products.",
      "prior_body": "Because we source certain products from outside the United States, major changes in tax policy, import or export regulations, other trade restrictions or trade relations, such as the imposition of additional tariffs or duties on imported products, could adversely affect our business, results of operations, effective income tax rate, liquidity and net income. The variability and complexity of tariffs and duties exposes us to the risk of higher costs and inadvertent noncompliance associated with our imported products. Moreover, in recent years the United States has generally increased its tariff rates and indicated that additional increases could be forthcoming. Changes in laws, court rulings, or differences in interpretation on product classification could lead to changes in duty and tariff rates on these or other imported products."
    },
    {
      "status": "MODIFIED",
      "current_title": "We face intense competition both from within our industry and from other leisure product alternatives.",
      "prior_title": "We face intense competition both from within our industry and from other leisure product alternatives.",
      "similarity_score": 0.902,
      "confidence": "high",
      "key_changes": [
        "Reworded sentence: \"We indirectly compete against store-based mass market retailers and large pool or irrigation supply retailers as they purchase the majority of their supplies directly from manufacturers.\"",
        "Reworded sentence: \"Outside of our industry, we compete indirectly with alternative suppliers of big-ticket discretionary leisure or homeowner products, such as boat and motor home distributors and with other home and backyard remodelers.\"",
        "Reworded sentence: \"Given the density and demand for pool products, some geographic markets that we serve also tend to have a higher concentration of competitors than others, particularly California, Florida, Texas and Arizona.\"",
        "Added sentence: \"We may also be unable to market and sell products if they are not competitive, including on the basis of price, quality, technical performance, ease of use, availability, delivery timing and reliability.\"",
        "Added sentence: \"Competitive pressures may limit our ability to maintain or raise prices, and an inability to maintain revenue or raise prices to offset increases in costs could have a significant adverse effect on our gross margin.\""
      ],
      "current_body": "Within our industry, we directly compete against national, regional and local distributors for the business of pool owners and other end-use customers. We indirectly compete against store-based mass market retailers and large pool or irrigation supply retailers as they purchase the majority of their supplies directly from manufacturers. We compete to a lesser extent with internet retailers, as they purchase the majority of their supplies from distributors. Outside of our industry, we compete indirectly with alternative suppliers of big-ticket discretionary leisure or homeowner products, such as boat and motor home distributors and with other home and backyard remodelers. We may not be able to compete effectively against our competitors and other leisure and homeowner product alternatives, which could have an adverse impact on our business. New competitors may emerge as there are low barriers to entry in our industry, which has led to highly competitive markets consisting of various-sized entities, ranging from small or local operators to large regional businesses. If our customers are attracted by the alternatives afforded by any of our competitors, they may be less inclined to purchase products or services from us, impacting our results of operations. Given the density and demand for pool products, some geographic markets that we serve also tend to have a higher concentration of competitors than others, particularly California, Florida, Texas and Arizona. These states encompass our four largest markets and represented approximately 53% of our net sales in 2025. The entry of significant new competitors into these markets could negatively impact our sales. We may also be unable to market and sell products if they are not competitive, including on the basis of price, quality, technical performance, ease of use, availability, delivery timing and reliability. Competitive pressures may limit our ability to maintain or raise prices, and an inability to maintain revenue or raise prices to offset increases in costs could have a significant adverse effect on our gross margin.",
      "prior_body": "Within our industry, we directly compete against national, regional and local distributors for the business of pool owners and other end-use customers. We indirectly compete against mass market retailers and large pool or irrigation supply retailers as they purchase the great majority of their supplies directly from manufacturers. We compete to a lesser extent with internet retailers, as they purchase the majority of their supplies from distributors. Outside of our industry, we compete indirectly with alternative suppliers of big-ticket consumer discretionary products, such as boat and motor home distributors, and with other companies who rely on discretionary homeowner expenditures, such as home remodelers. We may not be able to compete effectively against our competitors and other leisure product alternatives, which could have an adverse impact on our business. New competitors may emerge as there are low barriers to entry in our industry, which has led to highly competitive markets consisting of various-sized entities, ranging from small or local operators to large regional businesses. If our customers are attracted by the alternatives afforded by any of our competitors, they may be less inclined to purchase products or services from us, impacting our results of operations. Given the density and demand for pool products, some geographic markets that we serve also tend to have a higher concentration of competitors than others, particularly Florida, California, Texas and Arizona. These states encompass our four largest markets and represented approximately 54% of our net sales in 2024. The entry of significant new competitors into these markets could negatively impact our sales."
    },
    {
      "status": "MODIFIED",
      "current_title": "Catastrophic events or societal unrest could adversely impact our operations.",
      "prior_title": "Other catastrophic events or societal unrest could adversely impact our operations.",
      "similarity_score": 0.896,
      "confidence": "high",
      "key_changes": [
        "Reworded sentence: \"An outbreak of disease or similar public health threat, terrorism and other acts of violence, wars, rioting, labor strife, civil disturbances, societal unrest, geopolitical tensions or political instability could negatively impact us directly by interfering with our ability to operate due to adverse impacts on our workforce, supply chain or operations or indirectly by depressing macroeconomic conditions.\""
      ],
      "current_body": "An outbreak of disease or similar public health threat, terrorism and other acts of violence, wars, rioting, labor strife, civil disturbances, societal unrest, geopolitical tensions or political instability could negatively impact us directly by interfering with our ability to operate due to adverse impacts on our workforce, supply chain or operations or indirectly by depressing macroeconomic conditions. Our customers could also encounter hardships that negatively impact their ability to make timely payments to us or to continue doing business with us.",
      "prior_body": "Terrorism and other acts of violence, wars, rioting, labor strife, civil disturbances, societal unrest, geopolitical tensions or political instability could negatively impact us directly by interfering with our ability to operate or indirectly by depressing macroeconomic conditions. Our customers could also encounter hardships that negatively impact their ability to make timely payments to us or to continue doing business with us."
    },
    {
      "status": "MODIFIED",
      "current_title": "We rely on information technology systems to support our business operations. A significant disruption, breach or cybersecurity attack of our technological infrastructure could adversely affect our financial condition and results of operations.",
      "prior_title": "We rely on information technology systems to support our business operations. A significant disruption, breach or cybersecurity attack of our technological infrastructure could adversely affect our financial condition and results of operations.",
      "similarity_score": 0.878,
      "confidence": "high",
      "key_changes": [
        "Reworded sentence: \"We also may experience occasional system interruptions and delays that make our information systems unavailable or slow to respond, including the interaction of our information systems with those of third parties or the failure of software provided by third parties that we do not control.\"",
        "Reworded sentence: \"Refer to Item 1C, “Cybersecurity” of this Form 10-K for further information on our cybersecurity risk management, strategy and governance.\"",
        "Reworded sentence: \"The risk of breaches is likely to continue to increase due to several factors, including (i) the increasing use of machine learning, artificial intelligence (AI) and other sophisticated techniques to initiate cyber attacks and social engineering threats, such as phishing or deepfake schemes, (ii) the wider accessibility of cyber-attack tools that can circumvent security controls and evade detection, (iii) the expanded size, scope, use and complexity of our systems, and (iv) our increased reliance on e-commerce, open source software, cloud computing services and work-from-home staffing.\""
      ],
      "current_body": "Information technology supports several aspects of our business, including among others, transaction processing, customer service, pricing, product sourcing, inventory management, financial reporting, collections and cost management. Our ability to operate effectively on a day-to-day basis, communicate with our customers and accurately report our results depends on a reliable technological infrastructure, which is inherently susceptible to internal and external threats. We are vulnerable to interruption, including by fire, natural disaster, extreme weather events, power loss, telecommunication failures, internet failures, security breaches and other catastrophic events. Exposure to various types of cyber-attacks such as malware, computer viruses, worms, ransomware, social engineering or other malicious acts, as well as human error, could also potentially disrupt our operations, result in a significant interruption in the delivery of our goods and services or result in the loss of sensitive data. We are making, and expect to continue to make, investments in technology to maintain and update our computer systems and to expand our ability to engage in e-commerce with our customers. We may experience delays in making these updates and may not implement these changes as quickly or successfully as our customers expect, or as quickly or successfully as changes implemented by our competitors. In addition, implementing significant system changes increases the risk of computer system disruption. The potential problems and interruptions associated with implementing technology initiatives or conversions, as well as providing training and support for those initiatives, could disrupt or reduce our operational efficiency. Advances in computer and software capabilities, encryption technology and other discoveries increase the complexity of our technological environment, including how each interact with our various software platforms. Such advances could delay or hinder our ability to process transactions or could compromise the integrity of our data, resulting in a material adverse impact on our financial condition and results of operations. We also may experience occasional system interruptions and delays that make our information systems unavailable or slow to respond, including the interaction of our information systems with those of third parties or the failure of software provided by third parties that we do not control. A lack of sophistication or reliability of our information systems could adversely impact our operations and customer service and could require major repairs or replacements, resulting in significant costs and foregone revenue. Increasing complexity of technology could increase our cost of doing business. We devote significant resources to protect our systems and data from cyber-attacks. Refer to Item 1C, “Cybersecurity” of this Form 10-K for further information on our cybersecurity risk management, strategy and governance. In recent years we have faced, and expect to continue to face, various attempted cyber-attacks of increasing sophistication. To date, we are not aware of any cybersecurity incident or threat that materially impacted or could reasonably be anticipated to materially affect our business, results of operations or financial condition. However, we cannot guarantee that we will not experience such an incident in the future. The risk of breaches is likely to continue to increase due to several factors, including (i) the increasing use of machine learning, artificial intelligence (AI) and other sophisticated techniques to initiate cyber attacks and social engineering threats, such as phishing or deepfake schemes, (ii) the wider accessibility of cyber-attack tools that can circumvent security controls and evade detection, (iii) the expanded size, scope, use and complexity of our systems, and (iv) our increased reliance on e-commerce, open source software, cloud computing services and work-from-home staffing. Consequently, we may not be able to implement security barriers or other preventative measures that repel all 16 16 future cyber-attacks or detect such attacks in a timely manner, which may result in significant expenses from system downtime, lower sales, increases in insurance costs, fines and fees, lost business relationships, managerial distractions, litigation, increases to regulatory oversight, expenditures for additional threat prevention technologies or reputational harm, any of which could materially impact us. We also participate in a broader ecosystem of supply chain partners, both digital and physical, who face similar risks. Cyber-attacks on our partners could negatively impact our business.Although we maintain insurance coverage that may, subject to policy terms and conditions (including self-insured deductibles, coverage restrictions and monetary coverage caps), cover certain aspects of our cyber risks, such insurance coverage may be unavailable or insufficient to cover our losses.We use AI in our business, which could result in reputational harm, competitive harm and legal liability, and adversely affect our business, results of operation and financial condition.As part of our broader digital transformation strategy, we are integrating artificial intelligence to support our internal business functions and exploring additional uses for the future. AI presents risks and challenges and may result in unintended consequences, including producing inaccurate data. AI algorithms and training methodologies may be flawed. While we aim to develop and use AI responsibly, we may be unsuccessful in identifying or resolving issues and risks before they arise. The AI-related legal and regulatory landscape is evolving and remains uncertain and may be inconsistent from jurisdiction to jurisdiction. Our obligations to comply with the evolving legal and regulatory landscape could entail significant costs or limit our ability to incorporate certain AI capabilities into our operations and products. AI-related issues, deficiencies and failures could also give rise to legal or regulatory action (including with respect to proposed legislation regulating AI in jurisdictions such as the European Union and others, and as a result of new and different applications of existing data protection, privacy, intellectual property and other laws), damage our reputation or otherwise materially harm our business.Failure to maintain the security of confidential information could damage our reputation and expose us to litigation. Additionally, changes in data privacy laws and our ability to comply with them could have a material adverse effect on us.In the course of doing business, we collect and store data that is sensitive to us and our employees, customers and vendors. The failure to prevent unauthorized access to our data or the personal data of our customers or suppliers could put us at a competitive disadvantage. Such a breach could result in damage to our reputation and subject us to potential litigation, liability, fines and penalties and require us to incur significant expense to address and remediate or otherwise resolve these issues, resulting in a possible material adverse impact on our financial condition and results of operations.A variety of state, national, foreign and international laws and regulations apply to the collection, use, retention, protection, security, disclosure, transfer and other processing of personal and other data. The European Union and other international regulators, as well as state governments, have enacted or enhanced data privacy regulations, such as the California Consumer Privacy Rights Act, and other governments are considering establishing similar or stronger protections. These regulations impose certain obligations for handling specified personal information in our systems and for apprising individuals of the information we have collected about them. Many of these laws are complex and change frequently and often conflict with the laws in other jurisdictions. Despite our best efforts to comply, any noncompliance could result in incurring potential substantial penalties and reputational damage. future cyber-attacks or detect such attacks in a timely manner, which may result in significant expenses from system downtime, lower sales, increases in insurance costs, fines and fees, lost business relationships, managerial distractions, litigation, increases to regulatory oversight, expenditures for additional threat prevention technologies or reputational harm, any of which could materially impact us. We also participate in a broader ecosystem of supply chain partners, both digital and physical, who face similar risks. Cyber-attacks on our partners could negatively impact our business. Although we maintain insurance coverage that may, subject to policy terms and conditions (including self-insured deductibles, coverage restrictions and monetary coverage caps), cover certain aspects of our cyber risks, such insurance coverage may be unavailable or insufficient to cover our losses.",
      "prior_body": "Information technology supports several aspects of our business, including among others, transaction processing, customer service, pricing, product sourcing, inventory management, financial reporting, collections and cost management. Our ability to operate effectively on a day-to-day basis, communicate with our customers and accurately report our results depends on a reliable technological infrastructure, which is inherently susceptible to internal and external threats. We are vulnerable to interruption, including by fire, natural disaster, extreme weather events, power loss, telecommunication failures, internet failures, security breaches and other catastrophic events. Exposure to various types of cyber-attacks such as malware, computer viruses, worms, ransomware, social engineering or other malicious acts, as well as human error, could also potentially disrupt our operations, result in a significant interruption in the delivery of our goods and services or result in the loss of sensitive data. We are making, and expect to continue to make, investments in technology to maintain and update our computer systems and to expand our ability to engage in e-commerce with our customers. We may experience delays in making these updates and may not implement these changes as quickly or successfully as our customers expect, or as quickly or successfully as changes implemented by our competitors. In addition, implementing significant system changes increases the risk of computer system disruption. The potential problems and interruptions associated with implementing technology initiatives or conversions, as well as providing training and support for those initiatives, could disrupt or reduce our operational efficiency. Advances in computer and software capabilities, encryption technology and other discoveries increase the complexity of our technological environment, including how each interact with our various software platforms. Such advances could delay or hinder our ability to process transactions or could compromise the integrity of our data, resulting in a material adverse impact on our financial condition and results of operations. We also may experience occasional system interruptions and delays that make our information systems unavailable or slow to respond, including the interaction of our information systems with those of third parties or the failure of software of services provided by third parties that we do not control. A lack of sophistication or reliability of our information systems could adversely impact our operations and customer service and could require major repairs or replacements, resulting in significant costs and foregone revenue. Increasing complexity of technology could increase our cost of doing business. We devote significant resources to protect our systems and data from cyber-attacks. Refer to Item 1C. “Cybersecurity” for further information on our cybersecurity risk management and strategy and governance. In recent years we have faced, and expect to continue to face, various attempted cyber-attacks of increasing sophistication. To date, we are not aware of any cybersecurity incident or threat that materially impacted or could reasonably be anticipated to materially affect our business, results of operations or financial condition. However, we cannot guarantee that we will not experience such an incident in the future. The risk of breaches is likely to continue to increase due to several factors, including (i) the increasing use of machine learning, artificial intelligence (AI) and other sophisticated techniques to initiate cyber and phishing attacks, (ii) the wider accessibility of cyber-attack tools that can circumvent security controls and evade detection, (iii) the expanded size, use and complexity of our systems, and (iv) our increased reliance on e-commerce, open source software, cloud computer services and work-from-home staffing. Consequently, we may not be able to implement security barriers or other preventative measures that repel all future cyber-attacks or detect such attacks in a timely manner, which may result in significant expenses from system downtime, lower sales, increases in insurance costs, fines and fees, lost business relationships, managerial distractions, litigation, increases to regulatory oversight, expenditures for additional threat prevention technologies or reputational harm, any of which could materially impact us. We also participate in a broader ecosystem of supply chain partners, both digital and physical, who face similar risks. Cyber-attacks on our partners could negatively impact our business. Although we maintain insurance coverage that may, subject to policy terms and conditions (including self-insured deductibles, coverage restrictions and monetary coverage caps), cover certain aspects of our cyber risks, such insurance coverage may be unavailable or insufficient to cover our losses."
    },
    {
      "status": "MODIFIED",
      "current_title": "Past growth may not be indicative of future growth.",
      "prior_title": "Past growth may not be indicative of future growth.",
      "similarity_score": 0.814,
      "confidence": "high",
      "key_changes": [
        "Reworded sentence: \"While we contemplate continued growth through internal expansion and acquisitions, no assurance can be made as to our ability to: •penetrate new markets; penetrate new markets; •generate sufficient cash flows to support expansion plans and general operating activities; generate sufficient cash flows to support expansion plans and general operating activities; •obtain financing; obtain financing; •identify appropriate acquisition candidates and successfully integrate acquired businesses; identify appropriate acquisition candidates and successfully integrate acquired businesses; •identify appropriate locations for new sales centers and successfully integrate them into our network; identify appropriate locations for new sales centers and successfully integrate them into our network; •maintain favorable supplier arrangements and relationships; and maintain favorable supplier arrangements and relationships; and •identify and close or consolidate locations or divest assets which no longer meet our objectives.\"",
        "Removed sentence: \"The COVID-19 pandemic positively impacted home-centric trends in all of our markets, which led to a non-recurring surge of investment in pools and other backyard products.\"",
        "Removed sentence: \"This surge abated in mid-2022, when spending on these products began to decrease.\"",
        "Removed sentence: \"We do not expect our near-term sales to match the levels experienced at the height of the pandemic.\""
      ],
      "current_body": "Historically, we have experienced substantial sales growth through organic market share gains, new sales center openings, expanded product offerings and acquisitions that have increased our size, scope and geographic footprint. Our various business strategies and initiatives, including our growth initiatives, are subject to business, economic and competitive uncertainties and contingencies, many of which are beyond our control. While we contemplate continued growth through internal expansion and acquisitions, no assurance can be made as to our ability to: •penetrate new markets; penetrate new markets; •generate sufficient cash flows to support expansion plans and general operating activities; generate sufficient cash flows to support expansion plans and general operating activities; •obtain financing; obtain financing; •identify appropriate acquisition candidates and successfully integrate acquired businesses; identify appropriate acquisition candidates and successfully integrate acquired businesses; •identify appropriate locations for new sales centers and successfully integrate them into our network; identify appropriate locations for new sales centers and successfully integrate them into our network; •maintain favorable supplier arrangements and relationships; and maintain favorable supplier arrangements and relationships; and •identify and close or consolidate locations or divest assets which no longer meet our objectives. identify and close or consolidate locations or divest assets which no longer meet our objectives. If we do not successfully manage these potential difficulties or successfully execute our business strategies and initiatives, our operating results could be adversely affected.",
      "prior_body": "Historically, we have experienced substantial sales growth through organic market share gains, new sales center openings, expanded product offerings and acquisitions that have increased our size, scope and geographic footprint. Our various business strategies and initiatives, including our growth initiatives, are subject to business, economic and competitive uncertainties and contingencies, many of which are beyond our control. While we contemplate continued growth through internal expansion and acquisitions, no assurance can be made as to our ability to: •penetrate new markets; •generate sufficient cash flows to support expansion plans and general operating activities; •obtain financing; •identify appropriate acquisition candidates and successfully integrate acquired businesses; •identify appropriate locations for new sales centers and successfully integrate them into our network; •maintain favorable supplier arrangements and relationships; and •identify and divest assets which no longer meet our objectives. If we do not successfully manage these potential difficulties or successfully execute our business strategies and initiatives, our operating results could be adversely affected. The COVID-19 pandemic positively impacted home-centric trends in all of our markets, which led to a non-recurring surge of investment in pools and other backyard products. This surge abated in mid-2022, when spending on these products began to decrease. We do not expect our near-term sales to match the levels experienced at the height of the pandemic."
    },
    {
      "status": "MODIFIED",
      "current_title": "Our distribution business is highly dependent on our ability to maintain favorable and stable relationships with suppliers.",
      "prior_title": "Our distribution business is highly dependent on our ability to maintain favorable and stable relationships with suppliers.",
      "similarity_score": 0.759,
      "confidence": "high",
      "key_changes": [
        "Reworded sentence: \"Our largest suppliers are Pentair plc, Zodiac Pool Systems, Inc.\"",
        "Reworded sentence: \"Additionally, if our suppliers experience difficulties or disruptions in their operations, if there is any material interruption in our supply 13 13 chain or if we lose any significant supplier due to financial failure or any other reason, we may experience increased supply costs or delays in establishing replacement supply sources that meet our quality and control standards, which may affect our profitability.\""
      ],
      "current_body": "As a distribution company, maintaining favorable relationships with our suppliers is critical to our success. We believe that we add considerable value to the swimming pool and irrigation supply chains by purchasing products from a large number of manufacturers and distributing the products to a highly fragmented customer base on conditions that are more favorable than these customers could obtain on their own. We believe that we currently enjoy good relationships with our suppliers, who generally offer us competitive pricing, return policies and promotional allowances. However, any failure to maintain favorable relationships with our suppliers could have an adverse effect on our business. Our largest suppliers are Pentair plc, Zodiac Pool Systems, Inc. and Hayward Holdings, Inc., which accounted for 20%, 12% and 11%, respectively, of the costs of products we sold in 2025. A decision by our largest suppliers, acting individually or in concert, to sell their products directly to retailers or other end users, bypassing distribution companies like ours, would have an adverse effect on our business. Additionally, if our suppliers experience difficulties or disruptions in their operations, if there is any material interruption in our supply 13 13 chain or if we lose any significant supplier due to financial failure or any other reason, we may experience increased supply costs or delays in establishing replacement supply sources that meet our quality and control standards, which may affect our profitability. We purchase many of our products from suppliers pursuant to vendor arrangements that entitle us under certain conditions to receive rebates. These rebates effectively reduce the costs of our products. Rebate arrangements are subject to renegotiation with our suppliers from time to time. If we fail to qualify for these rebates or are unable to renew rebate programs at desirable terms, or a supplier materially reduces or stops offering rebates, our costs could increase substantially, and our gross margin and net income could be materially adversely affected.Failure to achieve and maintain a high level of product and service quality and safety could damage our reputation, expose us to litigation and negatively impact our financial performance.We rely on a global network of manufacturers and other suppliers to provide us with the products we distribute. To succeed, we must continue to maintain effective business relationships with qualified suppliers who can timely and efficiently supply us with high quality products. Our proprietary and exclusive brand products we distribute also expose us to potential liability claims. Product and service quality issues could negatively impact customer confidence in our brands and our business. If our product and service offerings do not meet applicable safety standards or our customers’ expectations regarding safety or quality, we could experience lost sales, increased costs and be exposed to legal, financial and reputational risks, including litigation, governmental enforcement actions and costly product recalls. Similar concerns impacting our competitors could damage the reputation of our industry and indirectly have an unfavorable impact on our operations. We face intense competition both from within our industry and from other leisure product alternatives.Within our industry, we directly compete against national, regional and local distributors for the business of pool owners and other end-use customers. We indirectly compete against store-based mass market retailers and large pool or irrigation supply retailers as they purchase the majority of their supplies directly from manufacturers. We compete to a lesser extent with internet retailers, as they purchase the majority of their supplies from distributors. Outside of our industry, we compete indirectly with alternative suppliers of big-ticket discretionary leisure or homeowner products, such as boat and motor home distributors and with other home and backyard remodelers. We may not be able to compete effectively against our competitors and other leisure and homeowner product alternatives, which could have an adverse impact on our business. New competitors may emerge as there are low barriers to entry in our industry, which has led to highly competitive markets consisting of various-sized entities, ranging from small or local operators to large regional businesses. If our customers are attracted by the alternatives afforded by any of our competitors, they may be less inclined to purchase products or services from us, impacting our results of operations. Given the density and demand for pool products, some geographic markets that we serve also tend to have a higher concentration of competitors than others, particularly California, Florida, Texas and Arizona. These states encompass our four largest markets and represented approximately 53% of our net sales in 2025. The entry of significant new competitors into these markets could negatively impact our sales. We may also be unable to market and sell products if they are not competitive, including on the basis of price, quality, technical performance, ease of use, availability, delivery timing and reliability. Competitive pressures may limit our ability to maintain or raise prices, and an inability to maintain revenue or raise prices to offset increases in costs could have a significant adverse effect on our gross margin.More aggressive competition by store- and internet-based mass merchants and large pool or irrigation supply retailers could adversely affect our sales.We face competition from both store-based and internet-based mass market retailers, which have greater scale and bargaining power than us. Today these retailers carry a limited range of, and devote a limited amount of shelf space to, merchandise and products targeted to our industry. Historically, mass market retailers have generally expanded by adding new stores and products, but their offering of pool and irrigation related products has remained relatively constant. Should store‑ and internet-based mass market retailers increase their focus on the pool or irrigation industries or increase the breadth of their pool and irrigation and related product offerings, they would likely become a more significant competitor for our direct customers and end-use consumers, which could have an adverse impact on our business. Additionally, because the internet facilitates competitive entry, online ordering, price transparency and comparison chain or if we lose any significant supplier due to financial failure or any other reason, we may experience increased supply costs or delays in establishing replacement supply sources that meet our quality and control standards, which may affect our profitability. We purchase many of our products from suppliers pursuant to vendor arrangements that entitle us under certain conditions to receive rebates. These rebates effectively reduce the costs of our products. Rebate arrangements are subject to renegotiation with our suppliers from time to time. If we fail to qualify for these rebates or are unable to renew rebate programs at desirable terms, or a supplier materially reduces or stops offering rebates, our costs could increase substantially, and our gross margin and net income could be materially adversely affected.",
      "prior_body": "As a distribution company, maintaining favorable relationships with our suppliers is critical to our success. We believe that we add considerable value to the swimming pool and irrigation supply chains by purchasing products from a large number of manufacturers and distributing the products to a highly fragmented customer base on conditions that are more favorable than these customers could obtain on their own. We believe that we currently enjoy good relationships with our suppliers, who generally offer us competitive pricing, return policies and promotional allowances. However, any failure to maintain favorable relationships with our suppliers could have an adverse effect on our business. 13 13 13 Our largest suppliers are Pentair plc, Zodiac Pool Systems, Inc., Hayward Pool Products, Inc., which accounted for 20%, 12% and 11%, respectively, of the costs of products we sold in 2024. A decision by our largest suppliers, acting individually or in concert, to sell their products directly to retailers or other end users, bypassing distribution companies like ours, would have an adverse effect on our business. Additionally, if our suppliers experience difficulties or disruptions in their operations, if there is any material interruption in our supply chain or if we lose any significant supplier due to financial failure or any other reason, we may experience increased supply costs or delays in establishing replacement supply sources that meet our quality and control standards, which may affect our profitability. We purchase many of our products from suppliers pursuant to vendor arrangements that entitle us under certain conditions to receive rebates. These rebates effectively reduce the costs of our products. Rebate arrangements are subject to renegotiation with our suppliers from time to time. If we fail to qualify for these rebates or are unable to renew rebate programs at desirable terms, or a supplier materially reduces or stops offering rebates, our costs could increase substantially, and our gross margin and net income could be materially adversely affected."
    },
    {
      "status": "MODIFIED",
      "current_title": "Governmental actions designed to address changing climate patterns or the failure to comply with climate-related and other sustainability requirements could adversely affect our business and increase our costs of doing business.",
      "prior_title": "Governmental actions designed to address changing climate patterns or the failure to meet environmental social and governance (ESG) expectations or standards or achieve our ESG commitments could adversely affect our business and increase our costs of doing business.",
      "similarity_score": 0.716,
      "confidence": "medium",
      "key_changes": [
        "Reworded sentence: \"Concerns over changing climate patterns have led to, and may in the future continue to lead to, new or increased legal and regulatory requirements designed to reduce or mitigate the effects of changing climate patterns, which could increase our compliance obligations.\"",
        "Reworded sentence: \"Climate-related and other sustainability disclosures we make reflect our current plans and aspirations, and it is possible that we may not be able to achieve our desired impact, which may cause us to suffer from legal claims, reputational damage or a loss of demand for our products.\""
      ],
      "current_body": "Concerns over changing climate patterns have led to, and may in the future continue to lead to, new or increased legal and regulatory requirements designed to reduce or mitigate the effects of changing climate patterns, which could increase our compliance obligations. In particular, advocates of change are continuing to explore ways to reduce greenhouse gas emissions. These changes over time could affect the availability and cost of certain consumer products, commodities and energy, which in turn may impact our ability to procure certain products or services required for the operation of our business at the quantities and levels we require. The regulation of greenhouse gas emissions could result in additional taxes or other costs to us or require us to modify our facilities or vehicle fleet. Changes in customers’ attitudes toward the environmental impact of a pool’s energy consumption or pool chemical products could reduce demand for our products. Climate-related and other sustainability disclosures we make reflect our current plans and aspirations, and it is possible that we may not be able to achieve our desired impact, which may cause us to suffer from legal claims, reputational damage or a loss of demand for our products. Investors or other stakeholders could react negatively to disclosures we make on climate-related and other sustainability matters, which could negatively impact our relationships with such stakeholders or result in claims that our disclosures harmed them or us. Various governmental bodies in Europe and the United States, particularly in the state of California, have adopted or proposed laws or regulations increasing the obligations of companies to disclose information about climate-related and other sustainability matters. We expect that these initiatives will expose us to additional compliance costs and potential risks.",
      "prior_body": "Concerns over changing climate patterns have led to, and may in the future lead to, new or increased legal and regulatory requirements designed to reduce or mitigate the effects of changing climate patterns, which could increase our compliance obligations. In particular, advocates of change are continuing to explore ways to reduce greenhouse gas emissions. These changes over time could affect the availability and cost of certain consumer products, commodities and energy, which in turn may impact our ability to procure certain products or services required for the operation of our business at the quantities and levels we require. The regulation of greenhouse gas emissions could result in additional taxes or other costs to us or require us to modify our facilities or vehicle fleet. Changes in customers’ attitudes toward the environmental impact of a pool’s energy consumption or pool chemical products could reduce demand for our products. Our initiatives aimed at reducing our impact on the environment and climate change reflect our current plans and aspirations, and it is possible that we may not be able to achieve our desired impact, which may cause us to suffer from legal claims, reputational damage or a loss of demand for our products. Investors or other stakeholders could react negatively to our targets or other positions we take on ESG matters, which could negatively impact our relationships with such stakeholders or result in claims that our initiatives harmed them or us. 17 17 17 Various governmental bodies in Europe and the United States, particularly in the state of California, have adopted or proposed laws or regulations increasing the obligations of companies to disclose information about their emissions and other similar data. We expect that these initiatives will expose us to additional risk."
    },
    {
      "status": "MODIFIED",
      "current_title": "Failure to maintain the security of confidential information could damage our reputation and expose us to litigation. Additionally, changes in data privacy laws and our ability to comply with them could have a material adverse effect on us.",
      "prior_title": "Failure to maintain the security of confidential information could damage our reputation and expose us to litigation. Additionally, changes in data privacy laws and our ability to comply with them could have a material adverse effect on us.",
      "similarity_score": 0.69,
      "confidence": "medium",
      "key_changes": [
        "Reworded sentence: \"A variety of state, national, foreign and international laws and regulations apply to the collection, use, retention, protection, security, disclosure, transfer and other processing of personal and other data.\"",
        "Added sentence: \"17 17 Risks Relating to Legal, Regulatory and Compliance MattersThe nature of our business subjects us to potential non-compliance with employment, environmental, health, transportation, safety and other governmental regulations.\"",
        "Added sentence: \"Changes in, expanded enforcement of, or adoption of new federal, state, local or international laws and regulations could increase our costs of doing business.\"",
        "Added sentence: \"We are subject to numerous federal, state, local and international laws and regulations, many of which are complex and subject to varying interpretations, including regulations related to employment, environmental, health, transportation and safety requirements, which govern such things as packaging, labeling, handling, transportation, storage and sale of chemicals and fertilizers.\"",
        "Added sentence: \"These laws and regulations, and related enforcement levels, may change as a result of a variety of factors, including political, economic or social events.\""
      ],
      "current_body": "In the course of doing business, we collect and store data that is sensitive to us and our employees, customers and vendors. The failure to prevent unauthorized access to our data or the personal data of our customers or suppliers could put us at a competitive disadvantage. Such a breach could result in damage to our reputation and subject us to potential litigation, liability, fines and penalties and require us to incur significant expense to address and remediate or otherwise resolve these issues, resulting in a possible material adverse impact on our financial condition and results of operations. A variety of state, national, foreign and international laws and regulations apply to the collection, use, retention, protection, security, disclosure, transfer and other processing of personal and other data. The European Union and other international regulators, as well as state governments, have enacted or enhanced data privacy regulations, such as the California Consumer Privacy Rights Act, and other governments are considering establishing similar or stronger protections. These regulations impose certain obligations for handling specified personal information in our systems and for apprising individuals of the information we have collected about them. Many of these laws are complex and change frequently and often conflict with the laws in other jurisdictions. Despite our best efforts to comply, any noncompliance could result in incurring potential substantial penalties and reputational damage. 17 17 Risks Relating to Legal, Regulatory and Compliance MattersThe nature of our business subjects us to potential non-compliance with employment, environmental, health, transportation, safety and other governmental regulations. Changes in, expanded enforcement of, or adoption of new federal, state, local or international laws and regulations could increase our costs of doing business. We are subject to numerous federal, state, local and international laws and regulations, many of which are complex and subject to varying interpretations, including regulations related to employment, environmental, health, transportation and safety requirements, which govern such things as packaging, labeling, handling, transportation, storage and sale of chemicals and fertilizers. These laws and regulations, and related enforcement levels, may change as a result of a variety of factors, including political, economic or social events. Changes in, expanded enforcement of, or adoption of new federal, state, local or international laws and regulations, including those governing minimum wage or living wage requirements, the classification of exempt and non-exempt employees or other wage, labor or workplace regulations, could adversely impact our results of operations.We sell algaecides and pest control products that are regulated as pesticides under the Federal Insecticide, Fungicide and Rodenticide Act and various state pesticide laws. These laws primarily relate to labeling, annual registration and licensing. Management has processes in place to facilitate and support our compliance with these requirements. However, failure to comply with these laws and regulations may result in investigations, the assessment of administrative, civil and criminal fines, damages, seizures, disgorgements, penalties or the imposition of injunctive relief. Although we presently do not expect to incur any capital or other expenditures relating to regulatory matters in amounts that may be material to us, we may be required to make such expenditures in the future. These laws and regulations have changed substantially and rapidly over the years, and we anticipate that there will be continuing changes. It is possible that the costs of compliance with increasingly prescriptive laws and regulations will continue to increase. We might not be able to successfully anticipate and remain in compliance with evolving future regulatory requirements, which could adversely impact our results of operations.Governmental actions designed to address changing climate patterns or the failure to comply with climate-related and other sustainability requirements could adversely affect our business and increase our costs of doing business.Concerns over changing climate patterns have led to, and may in the future continue to lead to, new or increased legal and regulatory requirements designed to reduce or mitigate the effects of changing climate patterns, which could increase our compliance obligations. In particular, advocates of change are continuing to explore ways to reduce greenhouse gas emissions. These changes over time could affect the availability and cost of certain consumer products, commodities and energy, which in turn may impact our ability to procure certain products or services required for the operation of our business at the quantities and levels we require. The regulation of greenhouse gas emissions could result in additional taxes or other costs to us or require us to modify our facilities or vehicle fleet. Changes in customers’ attitudes toward the environmental impact of a pool’s energy consumption or pool chemical products could reduce demand for our products.Climate-related and other sustainability disclosures we make reflect our current plans and aspirations, and it is possible that we may not be able to achieve our desired impact, which may cause us to suffer from legal claims, reputational damage or a loss of demand for our products. Investors or other stakeholders could react negatively to disclosures we make on climate-related and other sustainability matters, which could negatively impact our relationships with such stakeholders or result in claims that our disclosures harmed them or us.Various governmental bodies in Europe and the United States, particularly in the state of California, have adopted or proposed laws or regulations increasing the obligations of companies to disclose information about climate-related and other sustainability matters. We expect that these initiatives will expose us to additional compliance costs and potential risks.We handle and store chemicals, fertilizers and other combustible materials that involve fire, safety and casualty risks.We handle and store chemicals and fertilizers, including certain combustibles and oxidizing compounds, at our sales centers and at our chemical re-packaging plant. In addition to training our employees on safety protocols and procedures, we follow local fire marshal regulations at our facilities, which vary by jurisdiction and are subject to change, and assess the need for sprinklers and chemical storage vaults. A fire, explosion or flood affecting one of our facilities could give rise to safety and casualty losses and related liability claims. We also maintain what we believe is prudent insurance protection. However, we cannot guarantee that our insurance coverage will be",
      "prior_body": "In the course of doing business, we collect and store data that is sensitive to us and our employees, customers and vendors. The failure to prevent unauthorized access to our data or the personal data of our customers or suppliers could put us at a competitive disadvantage. Such a breach could result in damage to our reputation and subject us to potential litigation, liability, fines and penalties and require us to incur significant expense to address and remediate or otherwise resolve these issues, resulting in a possible material adverse impact on our financial condition and results of operations. 16 16 16 A variety of state, national, foreign and international laws and regulations apply to the collection, use, retention, protection, security, disclosure, transfer and other processing of personal and other data. The European Union and other international regulators, as well as state governments, have recently enacted or enhanced data privacy regulations, such as the California Consumer Privacy Rights Act, and other governments are considering establishing similar or stronger protections. These regulations impose certain obligations for handling specified personal information in our systems and for apprising individuals of the information we have collected about them. Many of these laws are complex and change frequently and often conflict with the laws in other jurisdictions. Despite our best efforts to comply, any noncompliance could result in incurring potential substantial penalties and reputational damage."
    },
    {
      "status": "MODIFIED",
      "current_title": "We handle and store chemicals, fertilizers and other combustible materials that involve fire, safety and casualty risks.",
      "prior_title": "We store chemicals, fertilizers and other combustible materials that involve fire, safety and casualty risks.",
      "similarity_score": 0.637,
      "confidence": "medium",
      "key_changes": [
        "Reworded sentence: \"We handle and store chemicals and fertilizers, including certain combustibles and oxidizing compounds, at our sales centers and at our chemical re-packaging plant.\"",
        "Reworded sentence: \"However, we cannot guarantee that our insurance coverage will be 18 18 adequate to cover future claims that may arise or that we will be able to maintain adequate insurance in the future at rates we consider reasonable.\""
      ],
      "current_body": "We handle and store chemicals and fertilizers, including certain combustibles and oxidizing compounds, at our sales centers and at our chemical re-packaging plant. In addition to training our employees on safety protocols and procedures, we follow local fire marshal regulations at our facilities, which vary by jurisdiction and are subject to change, and assess the need for sprinklers and chemical storage vaults. A fire, explosion or flood affecting one of our facilities could give rise to safety and casualty losses and related liability claims. We also maintain what we believe is prudent insurance protection. However, we cannot guarantee that our insurance coverage will be 18 18 adequate to cover future claims that may arise or that we will be able to maintain adequate insurance in the future at rates we consider reasonable. Successful claims for which we are not fully insured may adversely affect our working capital and profitability. In addition, changes in the insurance industry have generally led to higher insurance costs and decreased availability of coverage.We conduct business internationally, which exposes us to additional risks.Our ability to successfully conduct operations in, and source products and materials from, international markets is affected by many of the same risks we face in our U.S. operations, as well as unique costs and difficulties of managing international operations. Our international operations, including Canada and Mexico, accounted for 7% of our total net sales in 2025 and expose us to certain additional risks, including:•difficulty in staffing international subsidiary operations;•different political, economic and regulatory conditions;•local laws and customs;•currency fluctuations (including changes in the relative strength of the U.S. dollar compared to foreign currencies), exchange controls and repatriation restrictions;•adverse tax consequences; and•adverse consequences for violating anti-corruption, anti-competition, economic sanctions, immigration and other laws governing international commerce.For foreign-sourced products, we may be subject to certain trade restrictions that would prevent us from obtaining products, as well as delivery delays or failures if we order products from vendors with whom we have no prior relations. Fluctuations in other factors relating to international trade, such as tariffs, trade restrictions, transportation costs and inflation are additional risks for our international operations. We do not have operations in the Middle East, Russia, Ukraine or South America. However, the contributory effects of the geopolitical conflicts in these and other areas globally may result in higher inflation, labor costs, energy and commodity prices and costs of materials and services (together with shortages or inconsistent availability of materials and services), which could negatively affect our business (particularly our European operations), results of operations and financial condition.Changes in import policy or trade relations, interruptions in our supply chain or increased commodity or supply chain costs could adversely affect our results of operations.Because we source certain products from outside the United States, major changes in tax policy, import or export regulations, other trade restrictions or trade relations, such as the imposition of tariffs or duties on imported products, could adversely affect our business, results of operations, effective income tax rate, liquidity and net income. Additionally, following annual administrative reviews, final duty rates determined by the U.S. Department of Commerce may be higher or lower than rates paid at import. As a result, we may receive refunds or owe additional duties on imported product. The outcome can vary by year and by product.The variability and complexity of tariffs and duties exposes us to the risk of higher costs and inadvertent noncompliance associated with our imported products. Moreover, in recent years, the United States has increased its tariff rates or imposed new tariffs or trade restrictions. Changes in laws, court rulings or differences in interpretation on product classification could lead to changes in duty and tariff rates on these or other imported products.Excess tax benefits or deficiencies recognized from our accounting for share-based awards impact our reported earnings.In 2017, we adopted Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting. Our projections of financial statement impacts related to ASU 2016-09 are subject to several assumptions, including our estimated share price and the period that our employees will exercise vested stock options. Our actual results may vary significantly from our projected results. Excess tax benefits or deficiencies recognized under ASU 2016-09 vary from quarter to quarter and past results may not be indicative of future results. adequate to cover future claims that may arise or that we will be able to maintain adequate insurance in the future at rates we consider reasonable. Successful claims for which we are not fully insured may adversely affect our working capital and profitability. In addition, changes in the insurance industry have generally led to higher insurance costs and decreased availability of coverage.",
      "prior_body": "We store chemicals and fertilizers, including certain combustibles and oxidizing compounds, at our sales centers. In addition to training our employees on safety protocols and procedures, we follow local fire marshal regulations at our facilities, which vary by jurisdiction and are subject to change, and assess the need for sprinklers and chemical storage vaults. A fire, explosion or flood affecting one of our facilities could give rise to safety and casualty losses and related liability claims. We also maintain what we believe is prudent insurance protection. However, we cannot guarantee that our insurance coverage will be adequate to cover future claims that may arise or that we will be able to maintain adequate insurance in the future at rates we consider reasonable. Successful claims for which we are not fully insured may adversely affect our working capital and profitability. In addition, changes in the insurance industry have generally led to higher insurance costs and decreased availability of coverage."
    },
    {
      "status": "MODIFIED",
      "current_title": "More aggressive competition by store- and internet-based mass merchants and large pool or irrigation supply retailers could adversely affect our sales.",
      "prior_title": "More aggressive competition by store- and internet-based mass merchants and large pool or irrigation supply retailers could adversely affect our sales.",
      "similarity_score": 0.634,
      "confidence": "medium",
      "key_changes": [
        "Reworded sentence: \"We face competition from both store-based and internet-based mass market retailers, which have greater scale and bargaining power than us.\"",
        "Reworded sentence: \"Should store‑ and internet-based mass market retailers increase their focus on the pool or irrigation industries or increase the breadth of their pool and irrigation and related product offerings, they would likely become a more significant competitor for our direct customers and end-use consumers, which could have an adverse impact on our business.\""
      ],
      "current_body": "We face competition from both store-based and internet-based mass market retailers, which have greater scale and bargaining power than us. Today these retailers carry a limited range of, and devote a limited amount of shelf space to, merchandise and products targeted to our industry. Historically, mass market retailers have generally expanded by adding new stores and products, but their offering of pool and irrigation related products has remained relatively constant. Should store‑ and internet-based mass market retailers increase their focus on the pool or irrigation industries or increase the breadth of their pool and irrigation and related product offerings, they would likely become a more significant competitor for our direct customers and end-use consumers, which could have an adverse impact on our business. Additionally, because the internet facilitates competitive entry, online ordering, price transparency and comparison 14 14 shopping, increased internet transactions by us or our customers or competitors could increase the level of competition we face, reduce our margins or reduce our customers’ reliance on us. Further, we may face additional competitive pressures if large pool or irrigation supply retailers look to expand their customer base to compete more directly with us.We depend on our ability to attract, develop and retain highly qualified personnel.We consider our employees to be the foundation for our growth and success. As such, our future success depends in large part on our ability to attract, retain and motivate qualified personnel. This includes succession planning related to our executive officers and key management personnel. Hiring and retaining such qualified individuals may be adversely impacted by several factors, including (i) uncertainties regarding general economic conditions or industry conditions, (ii) our failure to offer competitive compensation and (iii) increased competition for qualified individuals. If we are unable to attract and retain key personnel, our operating results could be adversely affected. Given the seasonal nature of our business, we may hire additional employees during the summer months, including seasonal and part-time employees, who generally are not employed during the off-season. If we are unable to attract and hire additional personnel during the peak season, our operating results could be negatively impacted. Additionally, competition for qualified employees could require us to pay higher wages to attract and retain a sufficient number of employees. Inflation and other events over the past few years have increased employees’ expectations regarding compensation and benefits and workplace flexibility. These developments have made it more difficult and costly for us to attract and retain top talent. While we do not expect these developments to have a material adverse impact on us, we can provide no assurances to this effect.Past growth may not be indicative of future growth.Historically, we have experienced substantial sales growth through organic market share gains, new sales center openings, expanded product offerings and acquisitions that have increased our size, scope and geographic footprint. Our various business strategies and initiatives, including our growth initiatives, are subject to business, economic and competitive uncertainties and contingencies, many of which are beyond our control. While we contemplate continued growth through internal expansion and acquisitions, no assurance can be made as to our ability to:•penetrate new markets;•generate sufficient cash flows to support expansion plans and general operating activities;•obtain financing;•identify appropriate acquisition candidates and successfully integrate acquired businesses;•identify appropriate locations for new sales centers and successfully integrate them into our network;•maintain favorable supplier arrangements and relationships; and•identify and close or consolidate locations or divest assets which no longer meet our objectives.If we do not successfully manage these potential difficulties or successfully execute our business strategies and initiatives, our operating results could be adversely affected.We are subject to inventory management risks. Insufficient inventory may result in lost sales opportunities or delayed revenue, while excess inventory may negatively impact our gross margin.We strive to balance the need to maintain inventory levels that are sufficient to maximize operational efficiencies and minimize potential supply chain constraints against the risk of inventory obsolescence due to changing consumer preferences and fluctuating commodity prices. To successfully manage our inventories, we must estimate demand from our customers and purchase products that substantially correspond to consumer demand, which depends in part on our ability to identify and respond to evolving trends in demographics and consumer preferences. If we overestimate demand and purchase too much of a particular product, we face a risk that the price of that product will fall, leaving us with inventory that we cannot sell at optimal profit margins. In addition, we may have to write down such inventory if we are unable to sell it for its recorded value. If we underestimate demand and purchase insufficient quantities of products, inventory shortages could result in delayed revenue or loss of sales opportunities altogether as potential customers turn to competitors’ products that are readily available. If we maintain insufficient inventory levels and prices rise for these products, we could be forced to purchase products at higher prices and forego profitability in order to meet customer demand. Our business, financial condition and shopping, increased internet transactions by us or our customers or competitors could increase the level of competition we face, reduce our margins or reduce our customers’ reliance on us. Further, we may face additional competitive pressures if large pool or irrigation supply retailers look to expand their customer base to compete more directly with us.",
      "prior_body": "Mass market retailers today carry a limited range of, and devote a limited amount of shelf space to, merchandise and products targeted to our industry. Historically, mass market retailers have generally expanded by adding new stores and products, but their offering of pool and irrigation related products has remained relatively constant. Should store‑ and internet-based mass market retailers increase their focus on the pool or irrigation industries or increase the breadth of their pool and irrigation and related product offerings, they may become a more significant competitor for our direct customers and end-use consumers, which could have an adverse impact on our business. Additionally, because the internet facilitates competitive entry, price transparency and comparison shopping, increased internet sales by us or our competitors could increase the level of competition we face or reduce our margin. Further, we may face additional competitive pressures if large pool or irrigation supply retailers look to expand their customer base to compete more directly within the distribution channel. 14 14 14"
    },
    {
      "status": "MODIFIED",
      "current_title": "We are subject to inventory management risks. Insufficient inventory may result in lost sales opportunities or delayed revenue, while excess inventory may negatively impact our gross margin.",
      "prior_title": "We are subject to inventory management risks. Insufficient inventory may result in lost sales opportunities or delayed revenue, while excess inventory may negatively impact our gross margin.",
      "similarity_score": 0.628,
      "confidence": "medium",
      "key_changes": [
        "Reworded sentence: \"We strive to balance the need to maintain inventory levels that are sufficient to maximize operational efficiencies and minimize potential supply chain constraints against the risk of inventory obsolescence due to changing consumer preferences and fluctuating commodity prices.\"",
        "Reworded sentence: \"Our business, financial condition and 15 15 results of operations could be negatively impacted if we fail to (i) timely identify or effectively respond to changing consumer tastes, preferences, spending patterns and swimming pool, irrigation, landscape and related outdoor living products needs, (ii) accurately forecast demand for these products or (iii) successfully manage our inventories.Changes in our customer base or customer preferences could change the mix of products we sell and reduce our profitability.Changes in our customer base could impact our revenues or gross margin, reducing our profitability.\""
      ],
      "current_body": "We strive to balance the need to maintain inventory levels that are sufficient to maximize operational efficiencies and minimize potential supply chain constraints against the risk of inventory obsolescence due to changing consumer preferences and fluctuating commodity prices. To successfully manage our inventories, we must estimate demand from our customers and purchase products that substantially correspond to consumer demand, which depends in part on our ability to identify and respond to evolving trends in demographics and consumer preferences. If we overestimate demand and purchase too much of a particular product, we face a risk that the price of that product will fall, leaving us with inventory that we cannot sell at optimal profit margins. In addition, we may have to write down such inventory if we are unable to sell it for its recorded value. If we underestimate demand and purchase insufficient quantities of products, inventory shortages could result in delayed revenue or loss of sales opportunities altogether as potential customers turn to competitors’ products that are readily available. If we maintain insufficient inventory levels and prices rise for these products, we could be forced to purchase products at higher prices and forego profitability in order to meet customer demand. Our business, financial condition and 15 15 results of operations could be negatively impacted if we fail to (i) timely identify or effectively respond to changing consumer tastes, preferences, spending patterns and swimming pool, irrigation, landscape and related outdoor living products needs, (ii) accurately forecast demand for these products or (iii) successfully manage our inventories.Changes in our customer base or customer preferences could change the mix of products we sell and reduce our profitability.Changes in our customer base could impact our revenues or gross margin, reducing our profitability. Our business could be adversely impacted if (i) consolidation of our customers leads to changes in purchasing habits, (ii) more people choose to live in urban settings, rented space or housing complexes with a single community pool or (iii) more homeowners bypass our customers by directly purchasing their own supplies or undertaking their own improvement projects.Our gross margins vary across our products and can change over time due to a variety of factors, including changes in the mix of products we sell. We derive higher revenues or profits from certain of our products compared to others. If customers or end-users opt to use an increased amount of lower-revenue or lower-margin products, our results of operations would be adversely affected.Risks Relating to Technology, Cybersecurity, Artificial Intelligence and Data Privacy We rely on information technology systems to support our business operations. A significant disruption, breach or cybersecurity attack of our technological infrastructure could adversely affect our financial condition and results of operations. Information technology supports several aspects of our business, including among others, transaction processing, customer service, pricing, product sourcing, inventory management, financial reporting, collections and cost management. Our ability to operate effectively on a day-to-day basis, communicate with our customers and accurately report our results depends on a reliable technological infrastructure, which is inherently susceptible to internal and external threats. We are vulnerable to interruption, including by fire, natural disaster, extreme weather events, power loss, telecommunication failures, internet failures, security breaches and other catastrophic events. Exposure to various types of cyber-attacks such as malware, computer viruses, worms, ransomware, social engineering or other malicious acts, as well as human error, could also potentially disrupt our operations, result in a significant interruption in the delivery of our goods and services or result in the loss of sensitive data. We are making, and expect to continue to make, investments in technology to maintain and update our computer systems and to expand our ability to engage in e-commerce with our customers. We may experience delays in making these updates and may not implement these changes as quickly or successfully as our customers expect, or as quickly or successfully as changes implemented by our competitors. In addition, implementing significant system changes increases the risk of computer system disruption. The potential problems and interruptions associated with implementing technology initiatives or conversions, as well as providing training and support for those initiatives, could disrupt or reduce our operational efficiency. Advances in computer and software capabilities, encryption technology and other discoveries increase the complexity of our technological environment, including how each interact with our various software platforms. Such advances could delay or hinder our ability to process transactions or could compromise the integrity of our data, resulting in a material adverse impact on our financial condition and results of operations. We also may experience occasional system interruptions and delays that make our information systems unavailable or slow to respond, including the interaction of our information systems with those of third parties or the failure of software provided by third parties that we do not control. A lack of sophistication or reliability of our information systems could adversely impact our operations and customer service and could require major repairs or replacements, resulting in significant costs and foregone revenue. Increasing complexity of technology could increase our cost of doing business. We devote significant resources to protect our systems and data from cyber-attacks. Refer to Item 1C, “Cybersecurity” of this Form 10-K for further information on our cybersecurity risk management, strategy and governance. In recent years we have faced, and expect to continue to face, various attempted cyber-attacks of increasing sophistication. To date, we are not aware of any cybersecurity incident or threat that materially impacted or could reasonably be anticipated to materially affect our business, results of operations or financial condition. However, we cannot guarantee that we will not experience such an incident in the future. The risk of breaches is likely to continue to increase due to several factors, including (i) the increasing use of machine learning, artificial intelligence (AI) and other sophisticated techniques to initiate cyber attacks and social engineering threats, such as phishing or deepfake schemes, (ii) the wider accessibility of cyber-attack tools that can circumvent security controls and evade detection, (iii) the expanded size, scope, use and complexity of our systems, and (iv) our increased reliance on e-commerce, open source software, cloud computing services and work-from-home staffing. Consequently, we may not be able to implement security barriers or other preventative measures that repel all results of operations could be negatively impacted if we fail to (i) timely identify or effectively respond to changing consumer tastes, preferences, spending patterns and swimming pool, irrigation, landscape and related outdoor living products needs, (ii) accurately forecast demand for these products or (iii) successfully manage our inventories.",
      "prior_body": "We balance the need to maintain inventory levels that are sufficient to maximize operational efficiencies and minimize potential supply chain constraints against the risk of inventory obsolescence due to changing consumer preferences and fluctuating commodity prices. In order to successfully manage our inventories, we must estimate demand from our customers and purchase products that substantially correspond to consumer demand. If we overestimate demand and purchase too much of a particular product, we face a risk that the price of that product will fall, leaving us with inventory that we cannot sell at optimal profit margins. In addition, we may have to write down such inventory if we are unable to sell it for its recorded value. If we underestimate demand and purchase insufficient quantities of products, inventory shortages could result in delayed revenue or loss of sales opportunities altogether as potential customers turn to competitors’ products that are readily available. If we maintain insufficient inventory levels and prices rise for these products, we could be forced to purchase products at higher prices and forego profitability in order to meet customer demand. Our business, financial condition and results of operations could be negatively impacted if we fail to accurately forecast demand for our products or successfully manage our inventories. 15 15 15"
    },
    {
      "status": "MODIFIED",
      "current_title": "Excess tax benefits or deficiencies recognized from our accounting for share-based awards impact our reported earnings.",
      "prior_title": "Excess tax benefits or deficiencies recognized from our accounting for share-based awards impact our reported earnings.",
      "similarity_score": 0.528,
      "confidence": "low",
      "key_changes": [
        "Reworded sentence: \"Our projections of financial statement impacts related to ASU 2016-09 are subject to several assumptions, including our estimated share price and the period that our employees will exercise vested stock options.\""
      ],
      "current_body": "In 2017, we adopted Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting. Our projections of financial statement impacts related to ASU 2016-09 are subject to several assumptions, including our estimated share price and the period that our employees will exercise vested stock options. Our actual results may vary significantly from our projected results. Excess tax benefits or deficiencies recognized under ASU 2016-09 vary from quarter to quarter and past results may not be indicative of future results. 19 19 Financial RisksThe cost of servicing our debt could reduce our profitability if interest rates increase or remain at elevated levels. Our unsecured syndicated senior credit facility, term facility and receivables securitization facility bear interest at variable rates. We have entered into interest rate swap contracts to reduce our exposure to fluctuations in variable interest rates on current and future interest payments that we owe on a portion of our variable rate borrowings. While the Federal Reserve has been cutting interest rates since the latter parts of 2024, interest rates remain relatively high compared to the recent past. If interest rates remain elevated or increase, the cost of servicing our variable rate debt not covered by our interest rate swaps could materially reduce our profitability and cash flows. For additional information regarding our interest rate risk, see Item 7A, “Quantitative and Qualitative Disclosures about Market Risk” of this Form 10-K.Changes in tax laws and accounting standards related to tax matters have caused, and may in the future cause, fluctuations in our effective tax rate.We file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. Changes in tax laws, tax policy, tax rates, tax law interpretations and accounting standards and guidance related to tax matters may cause fluctuations in or adversely affect our effective tax rate. Our effective tax rate may also be impacted by changes in the geographic mix of our earnings.We cannot assure you we will continue paying dividends or repurchasing shares at the current rates, or at all.We cannot assure you we will continue periodic dividends on our capital stock at the current rates, or at all. Any quarterly dividends on our common stock will be paid from funds legally available for such purpose when, and if, declared by our Board of Directors. Decisions on whether, when and in which amounts to continue making any future dividend distributions will remain at all times entirely at the discretion of our Board of Directors, which reserves the right to change or terminate our dividend practices at any time and for any reason without prior notice. Holders of our common stock should be aware they have no contractual or other legal right to receive dividends.Similarly, holders of our common stock should be aware that repurchases of our common stock under any repurchase plan then in effect are completely discretionary and may be suspended or discontinued at any time for any reason regardless of our financial position.Lapses in our disclosure controls and procedures or internal control over financial reporting could materially and adversely affect us.We maintain disclosure controls and procedures designed to provide reasonable assurances regarding the accuracy and completeness of our reports filed with the SEC and internal control over financial reporting designed to provide reasonable assurance regarding the reliability and compliance of our financial statements with U.S. generally accepted accounting principles. We cannot assure you these measures will be effective.Item 1B. Unresolved Staff CommentsNone.",
      "prior_body": "In 2017, we adopted Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting. Our projections of financial statement impacts related to ASU 2016-09 are subject to several assumptions which can vary significantly, including our estimated share price and the period that our employees will exercise vested stock options. 18 18 18 Excess tax benefits or deficiencies recognized under ASU 2016-09 vary from quarter to quarter and past results may not be indicative of future results."
    },
    {
      "status": "UNCHANGED",
      "current_title": "We depend on our ability to attract, develop and retain highly qualified personnel.",
      "prior_title": "We depend on our ability to attract, develop and retain highly qualified personnel.",
      "current_body": "We consider our employees to be the foundation for our growth and success. As such, our future success depends in large part on our ability to attract, retain and motivate qualified personnel. This includes succession planning related to our executive officers and key management personnel. Hiring and retaining such qualified individuals may be adversely impacted by several factors, including (i) uncertainties regarding general economic conditions or industry conditions, (ii) our failure to offer competitive compensation and (iii) increased competition for qualified individuals. If we are unable to attract and retain key personnel, our operating results could be adversely affected. Given the seasonal nature of our business, we may hire additional employees during the summer months, including seasonal and part-time employees, who generally are not employed during the off-season. If we are unable to attract and hire additional personnel during the peak season, our operating results could be negatively impacted. Additionally, competition for qualified employees could require us to pay higher wages to attract and retain a sufficient number of employees. Inflation and other events over the past few years have increased employees’ expectations regarding compensation and benefits and workplace flexibility. These developments have made it more difficult and costly for us to attract and retain top talent. While we do not expect these developments to have a material adverse impact on us, we can provide no assurances to this effect."
    },
    {
      "status": "UNCHANGED",
      "current_title": "Failure to achieve and maintain a high level of product and service quality and safety could damage our reputation, expose us to litigation and negatively impact our financial performance.",
      "prior_title": "Failure to achieve and maintain a high level of product and service quality and safety could damage our reputation, expose us to litigation and negatively impact our financial performance.",
      "current_body": "We rely on a global network of manufacturers and other suppliers to provide us with the products we distribute. To succeed, we must continue to maintain effective business relationships with qualified suppliers who can timely and efficiently supply us with high quality products. Our proprietary and exclusive brand products we distribute also expose us to potential liability claims. Product and service quality issues could negatively impact customer confidence in our brands and our business. If our product and service offerings do not meet applicable safety standards or our customers’ expectations regarding safety or quality, we could experience lost sales, increased costs and be exposed to legal, financial and reputational risks, including litigation, governmental enforcement actions and costly product recalls. Similar concerns impacting our competitors could damage the reputation of our industry and indirectly have an unfavorable impact on our operations."
    },
    {
      "status": "UNCHANGED",
      "current_title": "Changes in tax laws and accounting standards related to tax matters have caused, and may in the future cause, fluctuations in our effective tax rate.",
      "prior_title": "Changes in tax laws and accounting standards related to tax matters have caused, and may in the future cause, fluctuations in our effective tax rate.",
      "current_body": "We file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. Changes in tax laws, tax policy, tax rates, tax law interpretations and accounting standards and guidance related to tax matters may cause fluctuations in or adversely affect our effective tax rate. Our effective tax rate may also be impacted by changes in the geographic mix of our earnings."
    },
    {
      "status": "UNCHANGED",
      "current_title": "The nature of our business subjects us to potential non-compliance with employment, environmental, health, transportation, safety and other governmental regulations. Changes in, expanded enforcement of, or adoption of new federal, state, local or international laws and regulations could increase our costs of doing business.",
      "prior_title": "The nature of our business subjects us to compliance with employment, environmental, health, transportation, safety and other governmental regulations. Changes in, expanded enforcement of, or adoption of new federal, state, local or international laws and regulations could increase our costs of doing business.",
      "current_body": "We are subject to numerous federal, state, local and international laws and regulations, many of which are complex and subject to varying interpretations, including regulations related to employment, environmental, health, transportation and safety requirements, which govern such things as packaging, labeling, handling, transportation, storage and sale of chemicals and fertilizers. These laws and regulations, and related enforcement levels, may change as a result of a variety of factors, including political, economic or social events. Changes in, expanded enforcement of, or adoption of new federal, state, local or international laws and regulations, including those governing minimum wage or living wage requirements, the classification of exempt and non-exempt employees or other wage, labor or workplace regulations, could adversely impact our results of operations. We sell algaecides and pest control products that are regulated as pesticides under the Federal Insecticide, Fungicide and Rodenticide Act and various state pesticide laws. These laws primarily relate to labeling, annual registration and licensing. Management has processes in place to facilitate and support our compliance with these requirements. However, failure to comply with these laws and regulations may result in investigations, the assessment of administrative, civil and criminal fines, damages, seizures, disgorgements, penalties or the imposition of injunctive relief. Although we presently do not expect to incur any capital or other expenditures relating to regulatory matters in amounts that may be material to us, we may be required to make such expenditures in the future. These laws and regulations have changed substantially and rapidly over the years, and we anticipate that there will be continuing changes. It is possible that the costs of compliance with increasingly prescriptive laws and regulations will continue to increase. We might not be able to successfully anticipate and remain in compliance with evolving future regulatory requirements, which could adversely impact our results of operations."
    },
    {
      "status": "UNCHANGED",
      "current_title": "We cannot assure you we will continue paying dividends or repurchasing shares at the current rates, or at all.",
      "prior_title": "We cannot assure you we will continue paying dividends at the current rates, or at all.",
      "current_body": "We cannot assure you we will continue periodic dividends on our capital stock at the current rates, or at all. Any quarterly dividends on our common stock will be paid from funds legally available for such purpose when, and if, declared by our Board of Directors. Decisions on whether, when and in which amounts to continue making any future dividend distributions will remain at all times entirely at the discretion of our Board of Directors, which reserves the right to change or terminate our dividend practices at any time and for any reason without prior notice. Holders of our common stock should be aware they have no contractual or other legal right to receive dividends. Similarly, holders of our common stock should be aware that repurchases of our common stock under any repurchase plan then in effect are completely discretionary and may be suspended or discontinued at any time for any reason regardless of our financial position."
    },
    {
      "status": "UNCHANGED",
      "current_title": "We conduct business internationally, which exposes us to additional risks.",
      "prior_title": "We conduct business internationally, which exposes us to additional risks.",
      "current_body": "Our ability to successfully conduct operations in, and source products and materials from, international markets is affected by many of the same risks we face in our U.S. operations, as well as unique costs and difficulties of managing international operations. Our international operations, including Canada and Mexico, accounted for 7% of our total net sales in 2025 and expose us to certain additional risks, including: •difficulty in staffing international subsidiary operations; difficulty in staffing international subsidiary operations; •different political, economic and regulatory conditions; different political, economic and regulatory conditions; •local laws and customs; local laws and customs; •currency fluctuations (including changes in the relative strength of the U.S. dollar compared to foreign currencies), exchange controls and repatriation restrictions; currency fluctuations (including changes in the relative strength of the U.S. dollar compared to foreign currencies), exchange controls and repatriation restrictions; •adverse tax consequences; and adverse tax consequences; and •adverse consequences for violating anti-corruption, anti-competition, economic sanctions, immigration and other laws governing international commerce. adverse consequences for violating anti-corruption, anti-competition, economic sanctions, immigration and other laws governing international commerce. For foreign-sourced products, we may be subject to certain trade restrictions that would prevent us from obtaining products, as well as delivery delays or failures if we order products from vendors with whom we have no prior relations. Fluctuations in other factors relating to international trade, such as tariffs, trade restrictions, transportation costs and inflation are additional risks for our international operations. We do not have operations in the Middle East, Russia, Ukraine or South America. However, the contributory effects of the geopolitical conflicts in these and other areas globally may result in higher inflation, labor costs, energy and commodity prices and costs of materials and services (together with shortages or inconsistent availability of materials and services), which could negatively affect our business (particularly our European operations), results of operations and financial condition."
    },
    {
      "status": "UNCHANGED",
      "current_title": "The cost of servicing our debt could reduce our profitability if interest rates increase or remain at elevated levels.",
      "prior_title": "The cost of servicing our debt could reduce our profitability if interest rates remain at elevated levels.",
      "current_body": "Our unsecured syndicated senior credit facility, term facility and receivables securitization facility bear interest at variable rates. We have entered into interest rate swap contracts to reduce our exposure to fluctuations in variable interest rates on current and future interest payments that we owe on a portion of our variable rate borrowings. While the Federal Reserve has been cutting interest rates since the latter parts of 2024, interest rates remain relatively high compared to the recent past. If interest rates remain elevated or increase, the cost of servicing our variable rate debt not covered by our interest rate swaps could materially reduce our profitability and cash flows. For additional information regarding our interest rate risk, see Item 7A, “Quantitative and Qualitative Disclosures about Market Risk” of this Form 10-K."
    },
    {
      "status": "UNCHANGED",
      "current_title": "We are susceptible to adverse weather conditions, which could intensify as a result of changing climate patterns.",
      "prior_title": "We are susceptible to adverse weather conditions, which could intensify as a result of changing climate patterns.",
      "current_body": "Given the nature of our business, weather is one of the principal external factors affecting our business and the effect of seasonality has a significant impact on our results. In 2025, we generated 61% of our net sales and 78% of our operating income in the second and third quarters of the year. These quarters represent the peak months of swimming pool use, pool and irrigation installation and maintenance activities. Unfavorable weather during these quarters in our largest geographic regions can significantly affect our results, as further described in “Seasonality and Weather” in Item 1 of this Form 10-K. Natural disasters and other significant weather events can create more variability in our reported results in the short term or otherwise adversely impact our sales or operations. Drought conditions or water management initiatives may lead to government-imposed water use restrictions or an increase in the number of homeowners unwilling to construct or maintain a pool. Such restrictions could result in decreased pool and irrigation system installations which could negatively impact our sales. Certain extreme weather events and natural disasters, such as hurricanes, tornadoes, earthquakes, tropical storms, floods, intense storms, drought, wildfires and extreme heat, may adversely impact us in several ways, including interfering with our ability to deliver our products and services, interfering with our receipt of supplies from our vendors, reducing demand for our products and services, and damaging our facilities. In the past, we have experienced short-term impacts on our sales due to closures from weather events such as Hurricanes Francine, Helene and Milton in 2024. Similar events in the future could result in similar short-term impacts or potentially result in more severe damage to our business. The areas in which we operate, including Florida, California, Texas and other coastal areas, have experienced, and are expected to continue to experience, natural disasters and extreme weather events. The physical effects of changing climate patterns may increase the frequency or severity of natural disasters and extreme weather events in the future, which would increase our exposure to these risks. For additional discussion regarding seasonality and weather, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Seasonality and Quarterly Fluctuations,” of this Form 10-K."
    }
  ]
}