Good afternoon. My name is Janis, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pool Corporation First Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks there will be a question-and-answer session. (Operator Instructions) Thank you. Now I would now turn today’s conference over to Mr. Mark Joslin, Chief Financial Officer. Please go ahead, sir.

Thank you, Janis. Good morning and welcome everyone. To start things off this morning as usual I would like to remind our listeners that our discussion, comments and responses to questions today may include forward-looking statements including management’s outlook for 2008 and future periods. Actual results may differ materially from those discussed today. Information regarding the factors and variables that could cause actual results to differ materially from projected results is discussed in our most recent Form 10-K as filed with the SEC. Now I will turn the call over to our President and CEO, Manny Perez De La Mesa. Manny?

Thank you Mark, and welcome. The first quarter results speak themselves to provide more perspective, our review the activity in each of the larger markets. But, first let me cover two very important principles. First, we are managing our business to ensure there are ability to serve our customers and suppliers, is not affected by the current market downturn. With this means that the difference in value and service level between us and our competitors value and service level is greater today that ever before. This is critical because we should not to any, because we should continue to gain market share at accelerated rates in this environment. Second, our toughest sales comp of 2008 has just past. Last year, we have positive 4% comps through March and by the way, as well as through May with negative comps from June through December. Given the waiting of business in the first quarter to the markets most affected by the construction slowdown. The rest of the year's comps should get easier. In addition, the more predictable maintenance repair and replacement products all weighted heavier in the second and third quarters of the year and less in the first and fourth quarters. Now to the activity by each of our major markets. In the blue side of our business, our overall base business sales were down 8%. This decrease is due primarily to the continued softness in new POOL construction, as well as a later start to the Pool Season. The softness in new POOL construction is concentrated primarily in the markets, which have the greatest run up in the real estate values from the year 2000 to the year 2006. The lower real estate values in these markets and the present credit market contraction are the main reasons for the construction…

Thank you, Manny. As we highlighted in our press release and Manny’s comments our selling and administrative costs were down about 2% from Q1, 2007. This comes despite the increase cost from the new sales centers that we added in 2007, and the addition of the NPT expenses for the month March. We have been able to offset these costs increases, in addition to higher product delivery costs and inflation of wages another costs by managing discretionary expenditure down and making selective brands consolidations and personal reductions over the last six to nine months. At the same time we continue to fund the many initiatives that we believe set our business model apart from our competitors and we set the stage for future growth as the current down turns subsides. Our expectations as Manny mentioned is that with the exception of management incentives that were very with our success we will be able to maintain roughly start-flat base business selling and administrative expenses compared to 2007 for the rest of the year. Turning to our balance sheet, you can see that our receivables are down inline with our sales decline in the quarter. We continue to see some slowdown in payments from our customers particularly those most directly affected by the soft construction market and an increased our reserve for potential write-off accordingly from the last year first quarter well as from last year our bad debts reserves at the end of the quarter is inline with our year end reserves. Our inventories at the end of the quarter of $477 million includes $17 million of inventory acquired with the acquisitions, excluding this, inventory were up 11% year-over-year due to the slower sales environment in the quarter. Approximately 98% of the increase in Q1 inventory levels has attributable to our…

Thank you sir. (Operator Instructions) Your first question comes from the line of Jeff Germanotta with William Blair.

Good morning gentlemen.

Good morning Jeff.

Your earnings guidance range of $1.20 to $1.50 is a little wider than usual. Could you perhaps shed a little insight into some of the key assumptions on the low side, some of the key assumptions on the high side?

Sure Jeff. There are three overwhelming or big variables here. One of those three variables, we have pretty much in check and that’s the expense side. So we put that aside, the other two variables would be sales and gross margins. In the context of sales, the range is from flat to down 5% for the year and again the logic there are two-fold; one is relatively speaking, easier comps from June forward and second, the mix of business being weighted more towards mixed churn in the second and third quarters of the year. So that’s one variable. The other variable is gross margin and as you know based on the reported results, we have 50 bits of pick up for the year but the difficult market environment, we are striving to sustain that as the year progresses but that is the second variable. When you put those variables together, it leads to exponentially a greater range than we would normally have and again, we are dealing an unprecedented at times and those two factors play together given these unprecedented times in terms of how the market behaves, in terms of our competitors ability and needs to move products to meet their own growing capital needs.

And with respect to the gross margin, have you seen much in terms of a reaction from manufacturers, in terms of the support for our distribution and retail?

What’s interesting is many facts to us I think are by and large cognizant of the fact that there is very limited price in the 50 and therefore, they are not going to sell more plumbs or for that matter, more chemicals because of the price being a little bit lower. So therefore, frankly they would be giving money away if they were to lower their prices. So there is really little to no movement on that part and it would not make any sense for them to do so.

Thank you.

Your next question comes from the line of Anthony Lebiedzinski with Sidoti & Company. Anthony Lebiedzinski - Sidoti & Company: Can you talked about your maintenance, repair, and replacement business? How did that perform in the first quarter and what you are seeing so far here in the second quarter? I know it’s kind of early in the quarter.

Good morning Anthony. That’s a very predictable component of the business. In the Sunbelt, that pretty well performs expected and I think the best indicator there is the chemicals where our sales were up year-on-year. So that -- Anthony Lebiedzinski - Sidoti & Company: How much were they up?

They were up in the lower mid-single digits. On the other hand, what happened in the Snow Belt this year is that pool openings are taking place a little bit later than they did last year and when pools are opened a couple of weeks later and that couple of weeks is end of March versus middle of March that affects some of those maintenance, repair, and replace products. So overall though as we get into April, that’s trending pretty much expected and that’s a very predictable component of the business with the only real variable there being the opening and closing of pools in the northern markets. Anthony Lebiedzinski - Sidoti & Company: Okay. So you mentioned that chemical sales were up low to mid single digits. What if you take the entire business for maintenance, repair, and replacement? How did that perform in the first quarter?

Well, as I said -- Anthony Lebiedzinski - Sidoti & Company: You said, as expected, but if you could just quantify what that means.

What that means is in the Sunbelt, it would be up in the low to mid single digits and in the Snowbelt, it’s flat to -- well, no, it would be up in the Sunbelt, mid to high single digits. In the Snowbelt, it’s down a little bit because of the later points. Anthony Lebiedzinski - Sidoti & Company: Okay. And I was wondering also if you guys have seen anything in terms of pool owners in the past, let’s say hypothetically, people would hire a pool service company to come and clean their pools and take care of them. Have you perhaps maybe seen some actually pool owners saying that they will do the work themselves and then not get the pool service company, I mean have you seen anything like that?

No. Anthony Lebiedzinski - Sidoti & Company: Also, can you just briefly touch on your international business?

Sure. The international business -- we are looking to open our -- in the process of opening one location in Portugal and we also did a small acquisition in Ontario in the quarter. So that continues to grow modestly in the context of the overall business but it’s obviously something that we are building on over time and that continues to do well. Sales on the international side of our business were in fact modestly up for the year, for the first quarter. Anthony Lebiedzinski - Sidoti & Company: Okay. All right, thank you.

Thank you Anthony.

Your next question comes from the line of Michael Cox with Piper Jaffray.

Hi, good morning guys.

Good morning. Hi, Mike.

My first question is on the inventory side. Mark, you had mentioned that we should expect to see some improvement as we move through the course of the year. I just wonder if you could comment on the broader industry, if you could give us your estimates to where inventory levels are and what your expectations of what that might cause from a pricing situation as you move into the heart of the pool season.

Let me answer that in two different parts. First, in terms of our inventories. When we were buying -- have been buying in the latter part of 2007 and early part of 2008, we had built into the parameters for replenishment essentially flat sales which we consider conservative in the current environment from the ability and the importance that we have in leveraging our financial strength to ensure that we provide a very high level of service which distinguishes us but then again because we are competition. So that’s the fundamental driver for our number and as the year progresses, given the mix of products changing more towards (inaudible) which is more predictable, what will happen is, we will be closer to our assumption and those inventory levels naturally will correct themselves. On the other hand, from a competitive standpoint, it is all over the board. I know of a number of competitors that given their working capital constraints, have had to horn in and limit their purchases going into the season. On the other hand, there are others that are absolutely fine and business is usual. When you look at the inventory overall in the channel, I would say that overall, it is largely unchanged versus what it would normally be with us being a little higher than normal and the rest of the market being net-net a little bit less than normal.

Okay, that’s helpful. And then, I was hoping that you could, just to clarify when you referenced flat sales to down 5% for your guidance variable, if that includes the NTP business. Is that correct or is that on a base business?

Base business.

That’s on a base business, okay. And then my next question is in terms of cost reductions, are there any other plans to implement at this point or potential branch closures as we look to the balance of the year?

We went through that process in the latter part of 2007 and here let me digress for a second because it’s important and I think you picked up on the other point. We -- a good part of our business and our cost structure is based on the number of locations we have or essentially the size of our network and we went through that process in the third quarter of last year and made decisions that we implemented largely in the fourth quarter and carried over a little bit into the first quarter of this year. At this point, it would not be good for us to close anything down for the pool season but there are a handful of locations that we decided to defer that decision when we went through that six, nine months ago and we will be making those decisions later on this year. So you could see potentially several more closures but those will be done in the latter part of the year after the season is taking place. Almost universally in the peak of the season, every location is profitable, it’s hard not to be. It’s when you look at the profit contribution for the full 12 months and the expectations for the next two or three years that you make a determination -- we make a determination in terms of closure or consolidation versus non-consolidation.

Okay, that’s very helpful and my last question is on the complementary product sales. The year-over-year decline was more significant and then what we have seen in the past couple of quarters; is that a reflection of not having as many new products that you are introducing in that market or is it really more a reflection of the market getting softer.

It reflective of two things; first the point you mentioned it’s the software market environment with obviously as I mentioned in my comments new pool construction in the major markets of California, Florida, Arizona, Nevada being down 30% to 50% from last years first quarter levels that’s one key factor and the other key factor is the waiting that those markets have being greater than the waiting for the whole year have your waiting in the fourth and first quarters.

Okay that makes sense thank you very much.

Thank you.

Your next question comes from the line of David Mann with Robert W. Baird.

Is it David Mathew or David Mann.

One moment sir. (Operator Instructions) Okay Mr. Mann you are in queue.

Manuel can you hear me.

Yes sir.

We are still at (inaudible). My question relates to -- I think on these calls you have given some resemblance of what you see the backlog in new pool construction to be. I know it seems to be shrinking each quarter; but can you give us a sense on -- do you have a little bit of visibility on the season. What are some of your dealers telling you and what kind of percentage decline might be ascribing into this years pool construction?

Sure, well and there’s always like two different picture. There is a picture that you see and California, Arizona and Nevada, Florida market and there is a different picture -- consolidated different picture in the rest of the country including Texas. In the most affected markets, the numbers are what they are -- I mean I mentioned 30% to 50% from last years first quarter down 60% to 80% from the ’05, ’06 levels. I will tell you that two years ago there were many builders that didn’t return phone calls for weeks at a time because they were so busy and now if you call and start to build the pool they will do the next day digging the hole. So it’s certainly a different environment in these markets. In Texas the rest of the country and for that matter Europe, there are pockets of softness and overall the market will probably be modestly down in net in terms of new construction, but no one in here is effected as in these the Florida, California, Arizona, Nevada markets. Overall, if you look at the big picture of US pool builds. US pool builds were down about 25%, bite in our estimates; in 2007 which is down again from 5% or so percent that there was down installed in ‘06. We could very well see another like type decrease in 2008, so therefore new pool construction will be down another -- could very well you know the 20% to 30% this year.

Okay

Now, interestingly enough you are reaching base levels that have not been seen in well over a generation and what’s interesting is how it comes back and as Mark mentioned in his comments a key constraint there currently is the financing environment. As the financing environment begins to clear up and whether it will be local regional branch or specialty financial institutions begin to address this void that’s been created at -- some have walked away universally across everyone improvement type of loan. As that happens it will kick back up because it’s interesting that the demand continues to be very healthy at the consumer level and therefore whether it’s 2009, 2010 it will revert back and obviously it will be very worse for us then.

And, when you talk about the demand being healthy how are you measuring that?

What are the factors that we are looking at interestingly is when we have anecdotal points. One anecdotal pool point is our visits to our websites; second one is that the desire for consumers to have builders calling on them in terms of lead generated and the third window that we have into that visibility is for those who actually apply for financing and I don’t have the specifics, maybe Mark does, but we’re perhaps a year 18 months ago. 70%, 80% of those that were applying for financing for that home improvement loan for I would say pool were getting approved; now the percentage of approvals are significantly more modest maybe 20% to 30% and therefore that package is still applying. The fact they are still interested, the fact they are still looking at this stuff is very healthy. It’s just a matter of their consumer’s ability or certain consumer’s ability to get the financing to make that investment.

Very good, in terms of the maintenance side of your business, can you give some visibility on how the mix of goods might be changing between pure equipment sales and part sales as people may be trying put off the bigger purchases.

Really we have not seen any shifting to speak off there. The part sales are up as our chemical sales, so we have not really seen impact to speak off in that way.

Okay and then lastly, Mark I think in the past to give in a sense of what the delinquencies have been over 30 days as looked like, can you update us on that?

Yeah, I don’t have that right in front of me David, I can get that for you though.

Okay, I will call you later. Thank you guys.

Thank you.

Your next question comes from the line of Brent Rakers with Morgan Keegan.

Good morning this is Nicky Prather for Brent Rakers. I have one house keeping question really quick. You gave the weighted average cost of debt in the quarter. I was wondering if the rate stayed the same what kind of number we’ve been looking at for Q2.

Yeah, we may probably be down in the half or 15 basis point range from where we are at the end of the first quarter.

Okay, that’s helpful thank you. Also the inflation outlook as far as the price increases in the quarter; did you all see a lot of that are you all expecting some or is there any announced.

Overall from the income industry standpoint price increases and inflation versus last year collectively is probably in the very low single digits. The certain products have had no increases in anything and modest decreases whereas some products have had 3% to 5% increases. So it’s a little bit of math, but I would say that probably when it’s all weighted out its very low single digits.

Okay thank you.

David and if you are still there, I am going to answer your question on a couple of statistics; one our average collection period DSO is at 36.4 versus 35.3, so just over a point higher there and on aging occurrence, ageing is 83% versus 87% last year first quarter.

Your next question comes from the line of Curt Woodworth with J.P. Morgan

Hi good morning.

Good morning.

Manuel looking to the second quarter I think just based on seasonality and you have obviously a higher portion of your mix in the after market is -- would you expect kind of a normal increase sequentially in the gross margins for the Company.

Yes

Okay and in the quarter to date can you give us a sense for how gross margins and sales are tracking?

Sure, in April with a week to go we are tracking about mid-single digits down versus April last year and the -- so far the gross margin improvements that were reported in the first quarter we are still seeing that variable to retain that so far the three weeks in the April.

In terms of the year-over-year benefit.

Correct.

Okay and on the expense side, you said last quarter a headcount with down 5% year-on-year and you are potentially looking at sales being down 5%. This year why wouldn’t you see better leverage on FC&A.

Of these things by the update number, our head count is down 6% year-on-year as of March, but you do have facilities we have open new locations this year which will be in place for all of this year and they will all be in place for most of last year. Secondly we also expanded facilities during the course of ’07 which we have a full year brunt of that lease expense for the year as well as just built in lease increases that. We have some components of expense for example fuel cost is part of our freight given the increase in fuel costs that component of our cost is up year-on-year. So when you look at those components despite our head count being down and by the way people did gain increases this year as well and there is on to their salary level -- so you have some components going one way and then you have components going the other way and net we are managing to frankly a little bit less then freight expenses, but conservatively I think freight expense is on the base business side of the equation is the reason for most locations for the year.

And, okay and then with the enclosing of MPT would you anticipate that SG&A in absolute numbers would be up?

Yes.

Okay

Because you have an expense base there for that business that obviously we cannot completely touch rate within our structure.

And what’s your target margin level for NPT. I know that I think it didn’t make money last year, where do you think the profitability should be?

Well, when we made the announcement of the transaction, what we communicated then was that the bottom line contribution would be negligible. Now factoring into that there is the operation profitability and we expect to be on the operating profit side profitable. Not significantly but marginally so, enough to pay for the amortization of certain non-competes and things of that nature that we amortize over a five year life of whatever as well as the interest expense that we will incur on the $30 million dollar of so that we paid for.

Okay and kind of going forward in the out years. Can you give us a sense of what the margin structure could look like?

Oh sure. I mean that business has the potential in a normalized environment to be as profitable as the overall pool work business was, it is. So, therefore to high single digit operating margins it’s very reasonable in a normalized environment.

Great and in terms of other accusation opportunities, I mean give that lot of these smaller companies you now are in more distress, will that create any opportunities for you to acquire some of these business? And would you have interest I guess.

Yeah let me answer that question in two ways. First from a panoramic stand point in terms of how we view accusations, historically and to date, to day I’m sorry. When the motivation for accusation was an alternative way, in lieu of opening of a new location in Greenfield to enter a market or expand out share in the market, so when you look at the market place today and when you look at the panorama and I going to describe three scenarios here -- you got the traditional or legacy pool distribution business. In the legacy poll distribution business, we have something approaching a forty share of the US market and in that we have something close to a 45 plus share in the sun belt, so there are pockets of opportunist certainly where we have very low or no share on the blue side of our business domestically but there aren’t that many. So therefore once we have a certain share of market the value of an accusation is significantly less because again the primary motivation for the acquisition was to enter a market or enhance a lot share in the market.

Okay

And the other two parts of our business in the international side as well as in the irrigation side of our business and those two sides obviously there is a lot of leg room from an accusation stand point and that’s a separate opportunity, at part one. So when you have a situation, we have a struggle in distributor -- if we already have a high share of market there is no real motivation for us to acquire. They’ll just go on a business and that’s it, so that’s one case. The other factor is when you look at this business or industry with the irrigation or pool, we have a pretty broad mix of competitors where a number of competitors that have been around for 20, 30 years that have managed their finances very conservatory and there are very well able to weather this kind of market environment. So a guy that may be was -- had failed a $30 million, $25 million and was making a $1 million a year in a normalized environment; well he used that $1 million do pay off the building that he operates part off or pay off whatever debt the man had in their business and they can whether this turnkey even if they are not making any money or even loosing a loosing a little bit of money. So that’s one scenario and therefore there they wouldn’t be disparate to anything. On the other side of the spectrum obviously there were a number of case where they had not managed their business that concretively or the finances that concretively and therefore they may be stretched more and those are the ones that are most venerable but again the only case where that falls into our spectrum is what we have little to no share and that’s -- so that’s were the paths crossing and again there is some opportunist that will become available and will take advantage of them but in the overall scheme of things it isn’t like its going to be a wide open type of environment.

Okay. That’s helpful and then in terms of the sales guidance again, down five was flat. Do you feel that the flats kind of that guidance is that viewed as a stretch gold, do you think that, that’s realistic?

I don’t know if that I would view it as a stretch goal but I would certainly look at it in the context of -- there is a certain amount of uncertainty here. Everything from the weather in the shoulder of the season in the fall, in the snowbelt markets to the recovery or the opening of financing opportunities for consumers that want to make a investment in their home to the real estate market finding some level of traction and housing turn over, so all of those factors play into that scenario as well as largely our ability to execute and that’s probably the most important, are ability to execute and gain market share. All that plays into that scenario. I would say that’s the upper end of the realistic upper end of the opportunity for this year, but its -- I wouldn’t necessarily call it a stretch goal.

Got it, great. Thanks very much.

Thank you.

(Operator Instructions) Your next question comes from the line of Keith Hughes with SunTrust

Thank you, just really quickly on the gross margin which was very good in the quarter. Was there some pre-buy activity on products heading into the season that you took advantage off that accounts for the inventory as well as the good gross profit?

Nothing unusual Keith, in fact the early buy parameters that we established in September, October last year, were pretty well consistent with what we have done in the prior year, so nothing unusual there to speak off. It was more on two factors; one is our sales execution factor as well as our pricing discipline.

And when you say sales execution, what exactly do you mean there?

Sales execution is when a customer communicates that he is able to buy the product of 5% less else where. Our sales person or manager is able to convey the fact that there is a different value proposition that is being provided and therefore is able to retain that differential.

All right. Thank you then.

And there are no further question at this time. I’d like to turn the conference back over to Mr. Perez for any closing remakes.

Janis, thank you very much. That you all again for listening to our first quarter 2008 results conference call. Our next call is scheduled for Thursday July 24th, my wife’s birthday, when we’ll review our second quarter results and as you all know that’s a very important quarter in our year. Thank you very much.

Ladies and gentlemen this concludes today’s conference call. You may now disconnect.