POOL
#Both.
Depending on the product.
Or depending on the need.
For equipment, that is sold to a contractor that installs that equipment.
In certain cases where it's what I will call basic products, I'll call it do-it-yourself products where that hotel or resort may have their own staff of people that put the chemicals in and do the basic maintenance, then that would be a direct sale.
You make a very good point, <UNK>.
And certainly it will be tougher.
I would rather have a little bit more time to give you better insight.
Again from an annual standpoint, we would be looking at, call it 5% to 6% topline growth for the year.
A lot of it ,frankly in the first quarter depends on how mild the weather is in the snow belt in February/March and how, when people start opening their pools and then the rush of business that happens as people open up their pools.
But you make an excellent point.
And it could very well when we refine our commentary in February, we could very well be coming out and saying expect f<UNK>ttish-type numbers but, it doesn't change anything for the year.
It just changes how it p<UNK>ys out over the quarter given the seasonality of the business.
Thank you.
I would see that there would be the ongoing very ---+ from my standpoint, very slow gradual recovery of new pool construction and what will change is when financial institutions begin to open up a little bit, their horizons for home improvement lending to existing homeowners, and that's when it will really kick up and recover at an accelerated rate.
Until then it will continue to grow at a modest, call it 10ish type percent, 5,000 to 7,000 more pools per year.
Between blue, green and international, probably it would end up being another 5 to 7 locations for 2017.
And so that will add, close to 1% of call it new sales, not necessarily base business.
Acquisitions, at this juncture, that's very specu<UNK>tive.
Certainly always talking to people and trying to figure some things out that would make sense for us long term as we ---+ I talked about a few minutes ago and a lot of those transactions historically over time happened in the wintertime frame after the season is over and before the next season.
Overall, very solid throughout all of Europe.
In fact, in euros and in Canadian dol<UNK>rs, which are, collectively Europe and then Canada are by far our two biggest international markets representing well over 90% what we do internationally.
Both of those markets grew at a modestly faster rate than the US market.
So they're both doing well.
The UK is doing fine.
In fact I reviewed those numbers.
We're on track to be a little bit more profitable this year than <UNK>st year in Europe.
So although ---+ and we have a good chance of hitting our budgeted profit there as well.
So we're moving right along.
I think the impact from Brexit will be more in the medium term, in the next several years as certain industries and finance sector and IT relocate.
But again, the existing pools are the existing pools.
They'll need to be maintained.
Things break down, they'll need to be repaired and after a while, the product will need to be rep<UNK>ced or the pools remodeled.
So I don't see any of that changing.
On an annual basis just to give you a little context, in the UK, they build less than 2,000 new pools per year.
And if you compare that, that would be analogous to a medium-sized market in Florida like for example I would say ---+ I mean they build more pools in that Miami, Fort Lauderdale, West Palm and Tampa and Or<UNK>ndo.
That's more like a Pensaco<UNK>-type market.
The market is growing, just like the residential market is growing.
But our growth is primarily ---+ our growth rate has been primarily driven by our growing market share.
There is certainly the opportunity for M&A there.
There are certain established distributors that focus on the commercial sector.
We have talked to several of them over the course of time.
But like we have done with the residential side of our business, if you look back at our history, there was a time way back when that there were a number acquisitions done to enter new markets.
We pivoted off that about 15 years ago and the lion's share of our growth since then has been organic.
Once we enter a market, the return on capital is far greater doing it organically.
And we've also entered and opened locations in over 100 new markets over the course of time.
So we can do it every which way.
In the case of the commercial sector, location is not as important because the key there is the specialized talent that you need on working with the customers on a technical front as well as having the ability to create the bill of materials.
And then separately having the right stocking so that it can be delivered same day next day.
And so we can do that organically.
I can't rule out an acquisition.
But we can certainly get to the our objectives organically.
The nature of the beast here, <UNK>, and you ask a good question.
And this applies to residential products as well as commercial.
Generally speaking when you are selling a higher priced product, let's say when you're selling a variable speed pump versus a single speed pump and that goes with a higher price, generally speaking the higher the price of the item, the lower the margin percent.
Again, and I can point to the margin percent and margin dol<UNK>rs.
So much the same applies.
So when we are selling equipment for example to commercial customers and you're talking about <UNK>rger filters and <UNK>rger pumps, that is sold at lower margin percent than when we are selling a residential sized pump and filter.
Certain product categories, I'll call it accessories which are lower dol<UNK>r items, the cost to serve from a percentage of sales price standpoint higher tend to have higher margin percents.
And that applies to commercial as well as residential and that applies also to parts, residential and commercial.
When you're talking about tax dol<UNK>rs deferred, I think you're talking about the long discussion that I had on the ---+ oh, I'm sorry, you're talking about the tax payment dol<UNK>rs.
That was about $37 million was our expected cash tax payment in the third quarter which will be made in the fourth quarter instead.
$37 million, yeah.
Thank you, <UNK>.
Thank you, William and thank you all for listening.
I think we set a record in terms of time and I appreciate everyone's questions.
I apologize for sometimes rambling on too long but hopefully gave you color where appropriate.
Our next conference call is scheduled for February 16 in 2017 when we will discuss our final 2016 results.
Thank you again and have a great day.
