EXHIBIT 99.1
FOR IMMEDIATE RELEASE
SCP POOL CORPORATION
ANNOUNCES INVESTOR DAY
AND
PROVIDES GUIDANCE ON THE IMPACT OF STOCK OPTION EXPENSING
_____________________________
COVINGTON, La. (April 19, 2006) – SCP Pool Corporation (the “Company” or “POOL”) (Nasdaq/NM: POOL) today announced that it will host an Investor Day in Riverside, CA on May 17, 2006 at its pool and irrigation distribution centers. The investor day is by invitation only. Presentation slides will be available on the Company’s website on the day of the event.
Separately, POOL announced that it has adopted Statement of Financial Accounting Standards (SFAS) 123(R) –Share-Based Payment. In accordance with SFAS 123(R), and in order to provide a consistent year-to-year comparison of financial results, the Company has elected the modified retrospective transition method and has adjusted prior period financial statements to reflect the impact of share-based compensation expenses. Adjusted historical income statements are attached as exhibits to this release.
In addition, the Company has calculated the expected impact of the adoption of SFAS 123(R) on 2006 results and now projects the impact to be $0.08 per diluted share, two cents more than the $0.06 per diluted share previously disclosed by the Company. The Company has also updated the expected distribution of this additional expense by quarter from an even $0.015 per quarter as previously communicated to $0.023, $0.021, $0.017 and $0.018 per quarter for the first to fourth quarters, respectively. The additional first quarter and full year expense over previous guidance and prior years is primarily due to a provision in SFAS 123(R) requiring the acceleration of stock option expense for options issued to retirement eligible employees. The Company’s annual earnings guidance is unchanged from what was provided in February 2006.
SCP Pool Corporation is the largest wholesale distributor of swimming pool and related backyard products. Currently, POOL operates 253 service centers in North America and Europe, through which it distributes more than 100,000 national brand and private label products to roughly 68,000 wholesale customers. For more information about POOL, please visitwww.poolcorp.com.
This news release may include “forward-looking” statements that involve 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 POOL’s 2005 Form 10-K filed with the Securities and Exchange Commission.
CONTACT:
Craig K. Hubbard
Treasurer
985.801.5117
craig.hubbard@poolcorp.com
EXHIBIT A
SCP Pool Corporation
Consolidated Statements of Income – As Adjusted for 123(R)
(In thousands, except per share data)
(Unaudited)
| As Adjusted for the Fiscal Year Ended December 31,
| |
|---|
| 2005
| | 2004
| | 2003
| |
|---|
| Net sales | | | $ | 1,552,659 | | $ | 1,310,853 | | $ | 1,155,832 | |
| Cost of sales | | | | 1,120,211 | | | 940,019 | | | 840,694 | |
|
| |
| |
| |
| Gross profit | | | | 432,448 | | | 370,834 | | | 315,138 | |
| | | |
| Selling and administrative expenses | | | | 297,085 | | | 262,679 | | | 231,144 | |
|
| |
| |
| |
| Operating income | | | | 135,363 | | | 108,155 | | | 83,994 | |
| | | |
| Interest expense, net | | | | 6,434 | | | 3,855 | | | 4,669 | |
|
| |
| |
| |
| Income before income taxes and equity earnings | | | | 128,929 | | | 104,300 | | | 79,325 | |
| Provision for income taxes | | | | 49,941 | | | 40,894 | | | 31,076 | |
| Equity earnings in unconsolidated investments, net | | | | 1,467 | | | -- | | | -- | |
|
| |
| |
| |
| Net income | | | $ | 80,455 | | $ | 63,406 | | $ | 48,249 | |
|
| |
| |
| |
|
| Earnings per share: | | | | | | | | | | | |
| Basic | | | $ | 1.53 | | $ | 1.20 | | $ | 0.91 | |
| Diluted | | | $ | 1.45 | | $ | 1.13 | | $ | 0.87 | |
|
| Weighted average shares outstanding: | | |
| Basic | | | | 52,445 | | | 52,838 | | | 53,058 | |
| Diluted | | | | 55,412 | | | 55,911 | | | 55,269 | |
|
| | | |
| Impact of Stock-Based Compensation Adjustment On: | | |
| | | |
| Selling and administrative expenses | | | $ | 4,894 | | $ | 5,439 | | $ | 4,032 | |
| | | |
| Income before income taxes and equity earnings | | | $ | (4,894 | ) | $ | (5,439 | ) | $ | (4,032 | ) |
| | | |
| Provision for income taxes | | | $ | (1,728 | ) | $ | (1,904 | ) | $ | (1,433 | ) |
| | | |
| Net Income | | | $ | (3,166 | ) | $ | (3,535 | ) | $ | (2,599 | ) |
| | | |
| Earnings per share: | | | | | | | | | | | |
| Basic | | | $ | (0.060 | ) | $ | (0.067 | ) | $ | (0.049 | ) |
| Diluted | | | $ | (0.051 | ) | $ | (0.058 | ) | $ | (0.039 | ) |
| | | |
| Diluted weighted average shares outstanding | | | | (222 | ) | | (228 | ) | | (504 | ) |
EXHIBIT B
SCP Pool Corporation
Consolidated Statements of Income – As Adjusted for 123(R)
(In thousands, except per share data)
(Unaudited)
| Quarterly Results As Adjusted for | |
|---|
| the Fiscal Year Ended December 31, 2005
| |
|---|
| Q1
| | Q2
| | Q3
| | Q4
| |
|---|
| Net sales | | | $ | 265,161 | | $ | 563,978 | | $ | 423,729 | | $ | 299,791 | |
| Cost of sales | | | | 193,210 | | | 401,297 | | | 309,124 | | | 216,580 | |
|
| |
| |
| |
| |
| Gross profit | | | | 71,951 | | | 162,681 | | | 114,605 | | | 83,211 | |
| | | |
| Selling and administrative expenses | | | | 61,695 | | | 81,292 | | | 73,174 | | | 80,923 | |
|
| |
| |
| |
| |
| Operating income | | | | 10,256 | | | 81,389 | | | 41,431 | | | 2,288 | |
| | | |
| Interest expense, net | | | | 1,080 | | | 1,905 | | | 1,331 | | | 2,118 | |
|
| |
| |
| |
| |
| Income before income taxes and equity earnings | | | | 9,176 | | | 79,484 | | | 40,100 | | | 170 | |
| Provision for income taxes | | | | 3,592 | | | 30,717 | | | 15,491 | | | 141 | |
| Equity earnings (loss) in unconsolidated investments, net | | | | (1,482 | ) | | 1,942 | | | 1,912 | | | (905 | ) |
|
| |
| |
| |
| |
| Net income (loss) | | | $ | 4,102 | | $ | 50,709 | | $ | 26,521 | | $ | (876 | ) |
|
| |
| |
| |
| |
|
| Earnings (loss) per share(1): | | | | | | | | | | | | | | |
| Basic | | | $ | 0.08 | | $ | 0.97 | | $ | 0.50 | | $ | (0.02 | ) |
| Diluted | | | $ | 0.07 | | $ | 0.91 | | $ | 0.47 | | $ | (0.02 | ) |
|
| Weighted average shares outstanding: | | |
| Basic | | | | 52,273 | | | 52,491 | | | 52,699 | | | 52,308 | |
| Diluted | | | | 55,477 | | | 55,782 | | | 55,945 | | | 52,308 | |
|
| | | |
| Impact of Stock-Based Compensation Adjustment On: | | |
| | | |
| Selling and administrative expenses | | | $ | 1,045 | | $ | 1,406 | | $ | 962 | | $ | 1,480 | |
| | | |
| Income before income taxes and equity earnings | | | $ | (1,045 | ) | $ | (1,406 | ) | $ | (962 | ) | $ | (1,480 | ) |
| | | |
| Provision for income taxes | | | $ | (394 | ) | $ | (475 | ) | $ | (363 | ) | $ | (496 | ) |
| | | |
| Net Income (loss) | | | $ | (651 | ) | $ | (931 | ) | $ | (599 | ) | $ | (984 | ) |
| | | |
| Earnings (loss) per share(1): | | | | | | | | | | | | | | |
| Basic | | | $ | (0.012 | ) | $ | (0.018 | ) | $ | (0.011 | ) | $ | (0.019 | ) |
| Diluted | | | $ | (0.012 | ) | $ | (0.017 | ) | $ | (0.011 | ) | $ | (0.019 | ) |
| | | |
| Diluted weighted average shares outstanding(2) | | | | (17 | ) | | 19 | | | 56 | | | (3,020 | ) |
_________________
| (1) | The sum of earnings per share for each of the quarters may not equal the total earnings per share for the annual period due to rounding differences or because of a difference in the way that in-the-money stock options are considered from quarter to quarter for diluted earnings per share under the requirements of SFAS 128,Earnings per Share. |
| (2) | The adjustment for stock option expense in the fourth quarter 2005 changed the reported net income for the period to a net loss. As such, this change reflects the difference between the as reported diluted weighted average shares outstanding and the basic weighted average shares outstanding. |
EXHIBIT C
SCP Pool Corporation
Consolidated Statements of Income – As Adjusted for 123(R)
(In thousands, except per share data)
(Unaudited)
| Quarterly Results As Adjusted for | |
|---|
| the Fiscal Year Ended December 31, 2004
| |
|---|
| Q1
| | Q2
| | Q3
| | Q4
| |
|---|
| Net sales | | | $ | 234,648 | | $ | 504,177 | | $ | 362,091 | | $ | 209,937 | |
| Cost of sales | | | | 169,616 | | | 358,962 | | | 257,908 | | | 153,533 | |
|
| |
| |
| |
| |
| Gross profit | | | | 65,032 | | | 145,215 | | | 104,183 | | | 56,404 | |
| | | |
| Selling and administrative expenses | | | | 58,682 | | | 74,305 | | | 68,275 | | | 61,417 | |
|
| |
| |
| |
| |
| Operating income | | | | 6,350 | | | 70,910 | | | 35,908 | | | (5,013 | ) |
| | | |
| Interest expense, net | | | | 983 | | | 1,122 | | | 868 | | | 882 | |
|
| |
| |
| |
| |
| Income (loss) before income taxes and equity earnings | | | | 5,367 | | | 69,788 | | | 35,040 | | | (5,895 | ) |
| Provision (benefit) for income taxes | | | | 2,109 | | | 27,344 | | | 13,680 | | | (2,239 | ) |
| Equity earnings in unconsolidated investments, net | | | | -- | | | -- | | | -- | | | -- | |
|
| |
| |
| |
| |
| Net income (loss) | | | $ | 3,258 | | $ | 42,444 | | $ | 21,360 | | $ | (3,656 | ) |
|
| |
| |
| |
| |
|
| Earnings (loss) per share(1): | | | | | | | | | | | | | | |
| Basic | | | $ | 0.06 | | $ | 0.80 | | $ | 0.40 | | $ | (0.07 | ) |
| Diluted | | | $ | 0.06 | | $ | 0.76 | | $ | 0.38 | | $ | (0.07 | ) |
|
| Weighted average shares outstanding: | | |
| Basic | | | | 53,264 | | | 53,063 | | | 52,847 | | | 52,179 | |
| Diluted | | | | 56,031 | | | 56,127 | | | 55,995 | | | 52,179 | |
|
| | | |
| Impact of Stock-Based Compensation Adjustment On: | | |
| | | |
| Selling and administrative expenses | | | $ | 1,322 | | $ | 1,679 | | $ | 1,041 | | $ | 1,397 | |
| | | |
| Income (loss) before income taxes and equity earnings | | | $ | (1,322 | ) | $ | (1,679 | ) | $ | (1,041 | ) | $ | (1,397 | ) |
| | | |
| Provision (benefit) for income taxes | | | $ | (500 | ) | $ | (528 | ) | $ | (391 | ) | $ | (485 | ) |
| | | |
| Net Income (loss) | | | $ | (822 | ) | $ | (1,151 | ) | $ | (650 | ) | $ | (912 | ) |
| | | |
| Earnings (loss) per share(1): | | | | | | | | | | | | | | |
| Basic | | | $ | (0.015 | ) | $ | (0.022 | ) | $ | (0.012 | ) | $ | (0.017 | ) |
| Diluted | | | $ | (0.014 | ) | $ | (0.017 | ) | $ | (0.010 | ) | $ | (0.017 | ) |
| | | |
| Diluted weighted average shares outstanding | | | | (358 | ) | | (251 | ) | | (180 | ) | | -- | |
_________________
| (1) | The sum of earnings per share for each of the quarters may not equal the total earnings per share for the annual period due to rounding differences or because of a difference in the way that in-the-money stock options are considered from quarter to quarter for diluted earnings per share under the requirements of SFAS 128,Earnings per Share. |
EXHIBIT D
SCP Pool Corporation
Consolidated Statements of Income – As Adjusted for 123(R)
(In thousands, except per share data)
(Unaudited)
| Quarterly Results As Adjusted for | |
|---|
| the Fiscal Year Ended December 31, 2003
| |
|---|
| Q1
| | Q2
| | Q3
| | Q4
| |
|---|
| Net sales | | | $ | 196,388 | | $ | 431,885 | | $ | 337,611 | | $ | 189,949 | |
| Cost of sales | | | | 143,865 | | | 311,023 | | | 245,454 | | | 140,352 | |
|
| |
| |
| |
| |
| Gross profit | | | | 52,523 | | | 120,862 | | | 92,157 | | | 49,597 | |
| | | |
| Selling and administrative expenses | | | | 50,127 | | | 64,897 | | | 61,471 | | | 54,649 | |
|
| |
| |
| |
| |
| Operating income (loss) | | | | 2,396 | | | 55,965 | | | 30,686 | | | (5,052 | ) |
| | | |
| Interest expense, net | | | | 1,085 | | | 1,514 | | | 1,063 | | | 1,007 | |
|
| |
| |
| |
| |
| Income (loss) before income taxes and equity earnings | | | | 1,311 | | | 54,451 | | | 29,623 | | | (6,059 | ) |
| Provision (benefit) for income taxes | | | | 525 | | | 21,282 | | | 11,565 | | | (2,295 | ) |
| Equity earnings in unconsolidated investments, net | | | | -- | | | -- | | | -- | | | -- | |
|
| |
| |
| |
| |
| Net income (loss) | | | $ | 786 | | $ | 33,169 | | $ | 18,058 | | $ | (3,764 | ) |
|
| |
| |
| |
| |
|
| Earnings (loss) per share(1): | | | | | | | | | | | | | | |
| Basic | | | $ | 0.01 | | $ | 0.63 | | $ | 0.34 | | $ | (0.07 | ) |
| Diluted | | | $ | 0.01 | | $ | 0.60 | | $ | 0.33 | | $ | (0.07 | ) |
|
| Weighted average shares outstanding: | | |
| Basic | | | | 53,017 | | | 52,963 | | | 53,075 | | | 53,179 | |
| Diluted | | | | 54,538 | | | 54,920 | | | 55,516 | | | 53,179 | |
|
| | | |
| Impact of Stock-Based Compensation Adjustment On: | | |
| | | |
| Selling and administrative expenses | | | $ | 1,124 | | $ | 1,224 | | $ | 534 | | $ | 1,150 | |
| | | |
| Income (loss) before income taxes and equity earnings | | | $ | (1,124 | ) | $ | (1,224 | ) | $ | (534 | ) | $ | (1,150 | ) |
| | | |
| Provision (benefit) for income taxes | | | $ | (426 | ) | $ | (430 | ) | $ | (196 | ) | $ | (380 | ) |
| | | |
| Net Income (loss) | | | $ | (698 | ) | $ | (794 | ) | $ | (338 | ) | $ | (770 | ) |
| | | |
| Earnings (loss) per share(1): | | | | | | | | | | | | | | |
| Basic | | | $ | (0.013 | ) | $ | (0.015 | ) | $ | (0.006 | ) | $ | (0.014 | ) |
| Diluted | | | $ | (0.012 | ) | $ | (0.008 | ) | $ | (0.004 | ) | $ | (0.014 | ) |
| | | |
| Diluted weighted average shares outstanding | | | | (757 | ) | | (571 | ) | | (415 | ) | | -- | |
_________________
| (1) | The sum of earnings per share for each of the quarters may not equal the total earnings per share for the annual period due to rounding differences or because of a difference in the way that in-the-money stock options are considered from quarter to quarter for diluted earnings per share under the requirements of SFAS 128,Earnings per Share. |
