Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: William J. Evanson
Executive Vice President & Chief Financial Officer
(440) 720-3301
ANTHONY & SYLVAN POOLS CORPORATION REPORTS
SECOND QUARTER RESULTS
Mayfield Village, Ohio (July 24, 2003) – Anthony & Sylvan Pools Corporation (NASDAQ: SWIM) today announced results for its second quarter ended June 30, 2003. Net sales for the quarter were $59,195,000, an increase of 1.8% compared with $58,138,000 reported a year ago. Net income for the second quarter of $3,343,000, or $0.63 per share, compared with net income of $3,092,000, or $0.56 per share, in the second quarter of 2002. Net income for the second quarter of last year included ($529,000), or ($0.09) per share, from discontinued operations. For the six months ended June 30, 2003, revenues of $77,479,000 declined 4.7% compared with $81,271,000 for the same period last year. The company reported a net loss of ($610,000) for the six months ended June 30, 2003, compared with net income of $133,000 for the six months ended June 30, 2002. Included in the six months results from last year was a net loss from discontinued operations of ($1,121,000), or ($0.20) per share.
In 2002, the Company exited two geographic markets in Florida. The financial results of these businesses are reported as discontinued operations. In accordance with generally accepted accounting principles, earnings, assets and liabilities of the discontinued operations are shown separately in the income statement and balance sheet, respectively, for all periods presented, where applicable. All information in this earnings release, including all supplemental information, reflects continuing operations, unless otherwise noted.
Commenting on the results, Stuart D. Neidus, Anthony & Sylvan’s Chairman and Chief Executive Officer, said, “A rainy Spring cost us a number of production days in the Northeast. Our backlog remains good and we are attempting to add additional construction capacity in several markets.” Mr. Neidus commented on the outlook for the remainder of the year by stating, “We continue to focus on developing our sales force and accommodating and satisfying our customers. All indications point to an improvement over last year’s second half performance.”
Anthony & Sylvan (www.anthonysylvan.com) operates in the leisure industry, offering in-ground, concrete residential swimming pools, spas and related products to its customers. The Company serves its customers through a network of 39 sales design centers in 22 geographic markets in 16 states. It also sells pool-related consumables, replacement parts, equipment and supplies through retail service centers.
This earnings release contains statements that are forward-looking, as that term is defined by the Private Securities Litigation Reform Act of 1995 or by the Securities and Exchange Commission in its rules, regulations, and releases. The Company intends that such forward-looking statements be subject to the safe harbors created thereby. The Company assumes no obligation to update or revise any such statements, whether as a result of new information or otherwise. All forward-looking statements are based on current expectations regarding important risk factors, including but not limited to: dependence on existing management; consumer spending; market conditions and weather. A number of those risks, trends and uncertainties are discussed in the Company’s SEC reports, including the Company’s annual report on Form 10-K and quarterly reports on Form 10-Q. Accordingly, actual results may differ from those expressed in the forward-looking statements, and the making of such statements should not be regarded as a representation by the Company or any other person that results expressed therein will be achieved.
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ANTHONY & SYLVAN POOLS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Dollars in thousands)
June 20, 2003 | December 31, 2002 | |||||
| (unaudited) | (audited) | |||||
Assets | ||||||
Current Assets: | ||||||
Cash and cash equivalents | $ | 4,972 | $ | 432 | ||
Contract receivables, net | 6,207 | 8,354 | ||||
Inventories | 7,179 | 5,841 | ||||
Prepayments and other | 3,316 | 3,655 | ||||
Deferred income taxes | 1,889 | 1,936 | ||||
Total current assets | 23,563 | 20,218 | ||||
Property, plant and equipment, net | 6,841 | 7,794 | ||||
Goodwill, net | 26,276 | 26,276 | ||||
Deferred income taxes | 108 | 373 | ||||
Other | 2,866 | 2,951 | ||||
Total assets | $ | 59,654 | $ | 57,612 | ||
Liabilities and Shareholders’ Equity | ||||||
Current Liabilities: | ||||||
Current maturities of long-term debt | $ | — | $ | — | ||
Accounts payable | 9,396 | 4,310 | ||||
Accrued expenses | 15,669 | 11,149 | ||||
Net liabilities of discontinued operations | 684 | 1,169 | ||||
Accrued income taxes | — | 14 | ||||
Total current liabilities | 25,749 | 16,642 | ||||
Long-term debt | — | 6,300 | ||||
Other long-term liabilities | 3,317 | 3,526 | ||||
Commitments and contingencies | — | — | ||||
Shareholders’ equity | 30,588 | 31,144 | ||||
Total liabilities and shareholders’ equity | $ | 59,654 | $ | 57,612 | ||
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ANTHONY & SYLVAN POOLS CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
For the Three and Six Months Ended June 30, 2003 and 2002
(In thousands, except per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2003 | 2002 | 2003 | 2002 | ||||||||||||
Net sales | $ | 59,195 | $ | 58,138 | $ | 77,479 | $ | 81,271 | |||||||
Cost of sales | 40,131 | 39,520 | 55,200 | 57,257 | |||||||||||
Gross profit | 19,064 | 18,618 | 22,279 | 24,014 | |||||||||||
Operating expenses | 13,791 | 12,804 | 23,057 | 21,862 | |||||||||||
Operating income/(loss) from continuing operations | 5,273 | 5,814 | (778 | ) | 2,152 | ||||||||||
Interest and other expense | 50 | 21 | 175 | 146 | |||||||||||
Income/(loss) before income taxes from continuing operations | 5,223 | 5,793 | (953 | ) | 2,006 | ||||||||||
Income taxes | 1,880 | 2,172 | (343 | ) | 752 | ||||||||||
Net income/(loss) from continuing operations | 3,343 | 3,621 | (610 | ) | 1,254 | ||||||||||
Loss from discontinued operations, net of income taxes | — | (529 | ) | — | (1,121 | ) | |||||||||
Net income/(loss) | $ | 3,343 | $ | 3,092 | $ | (610 | ) | $ | 133 | ||||||
Basic Earnings per share: | |||||||||||||||
Basic income/(loss) per share from continuing operations | $ | 0.64 | $ | 0.67 | $ | (0.12 | ) | $ | 0.23 | ||||||
Basic income/(loss) per share from discontinued operations | — | (0.10 | ) | — | (0.21 | ) | |||||||||
Net income/(loss) | $ | 0.64 | $ | 0.57 | $ | (0.12 | ) | $ | 0.02 | ||||||
Diluted Earnings per share: | |||||||||||||||
Diluted income/(loss) per share from continuing operations | $ | 0.63 | $ | 0.65 | $ | (0.12 | ) | $ | 0.22 | ||||||
Diluted income/(loss) per share from discontinued operations | — | (0.09 | ) | — | (0.20 | ) | |||||||||
Net income/(loss) | $ | 0.63 | $ | 0.56 | $ | (0.12 | ) | $ | 0.02 | ||||||
Average shares outstanding: | |||||||||||||||
Basic | 5,245 | 5,389 | 5,245 | 5,498 | |||||||||||
Diluted | 5,306 | 5,532 | 5,245 | 5,642 | |||||||||||
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ANTHONY & SYLVAN POOLS CORPORATION AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2003 and 2002
(Dollars in thousands)
| For the Six Months Ending June 30, | ||||||||
| 2003 | 2002 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income/(loss) | $ | (610 | ) | $ | 133 | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Loss from discontinued operations | — | 1,121 | ||||||
Depreciation | 1,326 | 1,316 | ||||||
Deferred taxes and other non-cash items | 431 | 401 | ||||||
Changes in operating assets and liabilities: | ||||||||
Contract receivables | 2,147 | 9,813 | ||||||
Inventories | (1,338 | ) | (1,894 | ) | ||||
Prepayments and other | 339 | 532 | ||||||
Accounts payable | 5,086 | 2,634 | ||||||
Accrued expenses and other | 4,382 | 2,672 | ||||||
Net cash provided by operating activities | 11,763 | 16,728 | ||||||
Cash Flows from Investing Activities: | ||||||||
Additions to property, plant and equipment | (438 | ) | (1,211 | ) | ||||
Net cash used in investing activities | (438 | ) | (1,211 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Repayments of long-term debt | (6,300 | ) | (7,555 | ) | ||||
Proceeds from stock option exercise | — | 34 | ||||||
Treasury stock purchases | — | (2,513 | ) | |||||
Net cash used in financing activities | (6,300 | ) | (10,034 | ) | ||||
Increase in Cash and Cash Equivalents | 5,025 | 5,483 | ||||||
Net cash used in discontinued operations | (485 | ) | (1,870 | ) | ||||
Cash and Cash Equivalents: | ||||||||
Beginning of period | 432 | 351 | ||||||
End of period | $ | 4,972 | $ | 3,964 | ||||
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