![]() | SCP Pool Corporation | |
Craig K. Hubbard
Chief Financial Officer
985.801.5117
SCP POOL REPORTS RECORD SECOND QUARTER 2002 RESULTS
_________________
YEAR-TO-DATE EARNINGS PER SHARE INCREASE 17%
COVINGTON, La. (July 16, 2002) – SCP Pool Corporation (the “Company” or “SCP”) (Nasdaq/NM: POOL) today reported record results for the second quarter of 2002.
Net sales for the three months ended June 30, 2002 increased $32.4 million, or 10%, to $364.1 million, compared to $331.7 million in the second quarter of 2001. Same store sales growth of 7% contributed $18.0 million to the increase, while new locations and stores acquired in the second half of 2002 accounted for the remaining increase. Gross profit margin increased slightly to 26.6% for the three months ended June 30, 2002 compared 26.5% in the same period of 2001. Operating income for the quarter increased 13% to $48.4 million, or 13.3% of net sales, compared to operating income of $42.8 million, or 12.9% of net sales, in the second quarter of 2001. Earnings per share for the quarter increased 15% to $1.09 per diluted share on net income of $28.6 million, compared to $0.95 per diluted share on net income of $25.5 million in the comparable 2001 period.
“Our continued growth and expansion of operating margin are a reflection of the resiliency of the swimming pool industry, the strength of our distribution networks, and the quality of our TEAM,” commented Manuel Perez de la Mesa, President and CEO. “Aided by the late season heat of the past few weeks, we remain confident in our prospects for 2002 and beyond,” continued Mr. Perez de la Mesa.
Net sales for the six months ended June 30, 2002 increased $48.5 million, or 10%, to $535.4 million, compared to $486.9 million in the comparable 2001 period. Same store sales growth of 7% contributed $27.0 million to the increase, while new locations and stores acquired in the second half of 2002 accounted for the remaining increase. Gross profit margin increased 30 basis points to 26.2% in the first six months of 2002 from 25.9% for the same period last year. Operating income for the first six months of 2002 increased 15% to $52.7 million, or 9.8% of net sales, compared to operating income of $46.0 million, or 9.5% of net sales in the same period last year. Earnings per share for the first six months increased 17% to $1.16 per diluted share on net income of $30.5 million, compared to $0.99 per diluted share on net income of $26.5 million in the comparable 2001 period.
Mr. Wilson B. Sexton, Chairman, added, “We continue to be pleased with the results realized especially considering how SCP is not only managing its business but making major investments in raising the industry’s standards of performance and business practices.”
POOL Reports Record Second Quarter Results
Page 2
July 16, 2002
At June 30, 2002, there were 144 service centers included in the calculation of same store sales. Of the excluded service centers, 11 were new service centers open less than 15 months, five were acquired within the last 15 months and 17 were excluded due to new or acquired service center openings in the immediate market areas within the last 15 months. Same store sales growth is calculated using a 15-month convention, whereby all newly opened, acquired or consolidated service centers and existing service centers in the immediate market areas of the aforementioned services centers are excluded from the calculation for a period of 15 months.
SCP Pool Corporation is the world’s largest distributor of swimming pool supplies and related products. As of July 16, 2002, the Company distributes more than 63,000 national brand and private label products to over 34,000 customers through 177 service centers in North America and Europe.
This news release includes “forward-looking” statements that include risk and uncertainties. The forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially due to a variety of factors, including the sensitivity of the swimming pool supply business to weather conditions and other risks detailed in the Company’s 2001 Form 10-K filed with the Securities and Exchange Commission.
POOL Reports Record Second Quarter Results
Page 3
July 16, 2002
Consolidated Statements of Income |
(Unaudited) | Three Months | Six Months | |||||||||||||||||||
(Dollars, in thousands except per share data) | Ended | Ended | |||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2002 | 2001 | 2002 | 2001 | ||||||||||||||||||
Net sales | 364,088 | 331,685 | 535,442 | 486,892 | |||||||||||||||||
Cost of sales | 267,393 | 243,827 | 395,245 | 360,930 | |||||||||||||||||
Gross profit | 96,695 | 87,858 | 140,197 | 125,962 | |||||||||||||||||
Percent | 26.6 | % | 26.5 | % | 26.2 | % | 25.9 | % | |||||||||||||
Selling and administrative expenses | 48,320 | 44,474 | 87,491 | 78,830 | |||||||||||||||||
Goodwill amortization | — | 577 | — | 1,113 | |||||||||||||||||
Operating income | 48,375 | 42,807 | 52,706 | 46,019 | |||||||||||||||||
Percent | 13.3 | % | 12.9 | % | 9.8 | % | 9.5 | % | |||||||||||||
Interest expense | 1,486 | 1,413 | 2,699 | 2,917 | |||||||||||||||||
Income before income taxes | 46,889 | 41,394 | 50,007 | 43,102 | |||||||||||||||||
Income taxes | 18,287 | 15,928 | 19,503 | 16,594 | |||||||||||||||||
Net income | 28,602 | 25,466 | 30,504 | 26,508 | |||||||||||||||||
Earnings per share | |||||||||||||||||||||
Basic | 1.15 | 0.99 | 1.22 | 1.04 | |||||||||||||||||
Diluted | 1.09 | 0.95 | 1.16 | 0.99 | |||||||||||||||||
Average shares outstanding | |||||||||||||||||||||
Basic | 24,944 | 25,637 | 24,975 | 25,595 | |||||||||||||||||
Diluted | 26,330 | 26,931 | 26,234 | 26,876 | |||||||||||||||||
Note: | The 2001 per share figures and average shares outstanding have been adjusted to reflect the 3-for-2 stock split effective September 7, 2001. |
POOL Reports Second Quarter 2002 Results
Page 4
July 16, 2002
Condensed Consolidated Balance Sheets |
(Unaudited) | |||||||||||||||
(Dollars, in thousands) | June 30, | June 30, | |||||||||||||
2002 | 2001 | ||||||||||||||
Assets | |||||||||||||||
Current assets | |||||||||||||||
Cash and cash equivalents | 11,960 | 2,962 | |||||||||||||
Receivables, net | 144,594 | 134,418 | |||||||||||||
Product inventories, net | 168,875 | 137,766 | |||||||||||||
Prepaid expenses | 4,126 | 3,420 | |||||||||||||
Deferred income taxes | 2,788 | 2,884 | |||||||||||||
Total current assets | 332,343 | 281,450 | |||||||||||||
Property and equipment, net | 16,395 | 11,922 | |||||||||||||
Goodwill, net | 73,831 | 77,989 | |||||||||||||
Intangible assets, net | 5,345 | 4,340 | |||||||||||||
Other assets, net | 997 | 900 | |||||||||||||
Total assets | 428,911 | 376,601 | |||||||||||||
Liabilities and stockholders’ equity | |||||||||||||||
Current liabilities | |||||||||||||||
Accounts payable | 120,908 | 101,913 | |||||||||||||
Accrued and other current liabilities | 37,810 | 31,776 | |||||||||||||
Short-term debt and note payable | 91 | 28,750 | |||||||||||||
Total current liabilities | 158,809 | 162,439 | |||||||||||||
Deferred income taxes | 5,541 | 4,458 | |||||||||||||
Long-term debt, less current portion | 97,525 | 58,026 | |||||||||||||
Total stockholders’ equity | 167,036 | 151,678 | |||||||||||||
Total liabilities and stockholders’ equity | 428,911 | 376,601 | |||||||||||||
POOL Reports Second Quarter 2002 Results
Page 5
July 16, 2002
Condensed Consolidated Statements of Cash Flows |
(Dollars, in thousands) | Six Months Ended | ||||||||||||||||||
(Unaudited) | June 30, | ||||||||||||||||||
2002 | 2001 | ||||||||||||||||||
Operating activities | |||||||||||||||||||
Net income | 30,504 | 26,508 | |||||||||||||||||
Adjustments to reconcile net income to net cash provided by | |||||||||||||||||||
operating activities | 3,636 | 5,282 | |||||||||||||||||
Changes in operating assets and liabilities, net of effects | |||||||||||||||||||
of acquisitions | |||||||||||||||||||
Receivables | (84,911 | ) | (69,693 | ) | |||||||||||||||
Product inventories | 12,647 | 6,234 | |||||||||||||||||
Accounts payable | 25,321 | 21,914 | |||||||||||||||||
Other | 21,181 | 11,763 | |||||||||||||||||
Net cash provided by operating activities | 8,378 | 2,008 | |||||||||||||||||
Investing activities | |||||||||||||||||||
Acquisition of businesses, net of cash acquired | (28 | ) | (25,059 | ) | |||||||||||||||
Purchase of property and equipment | (2,539 | ) | (2,020 | ) | |||||||||||||||
Proceeds from the sale of property and equipment | 10 | 33 | |||||||||||||||||
Net cash used in investing activities | (2,557 | ) | (27,046 | ) | |||||||||||||||
Financing activities | |||||||||||||||||||
Net proceeds from revolving line of credit | 12,525 | 25,285 | |||||||||||||||||
Payments on long-term debt | — | (2,500 | ) | ||||||||||||||||
Issuance of common stock | 607 | 1,955 | |||||||||||||||||
Purchase of treasury stock | (10,450 | ) | — | ||||||||||||||||
Net cash provided by financing activities | 2,682 | 24,740 | |||||||||||||||||
Effect of exchange rate changes on cash | (67 | ) | (171 | ) | |||||||||||||||
Change in cash and cash equivalents | 8,436 | (469 | ) | ||||||||||||||||
Cash and cash equivalents at beginning of period | 3,524 | 3,431 | |||||||||||||||||
Cash and cash equivalents at end of period | 11,960 | 2,962 | |||||||||||||||||