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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q/A
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT Of 1934
For the quarterly period ended June 30, 2000
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT Of 1934
For the transition period from _______________ to ______________
Commission File Number 000-26991
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Anthony & Sylvan Pools Corporation
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(Exact name of registrant as specified in its charter)
Ohio 31-1522456
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6690 Beta Drive, Mayfield Village, Ohio 44143
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (440) 720-3301
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Former name, former address and former fiscal year, if changed since
last report.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No N/A
---- ------ -----
Indicate the number of shares outstanding of each of the issuer's classes of
common shares, as of the latest practicable date.
Class Outstanding at August 7, 2000
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Common Shares, no par value 2,973,644 Shares
EXPLANATORY NOTE
This amendment on Form 10-Q/A amends the Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 2000, as filed by the Registrant on August
11, 2000, and is being filed to reflect the restatement of the Registrant's
condensed consolidated financial statements (see Note 8 to the unaudited
condensed consolidated financial statements).
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ANTHONY & SYLVAN POOLS CORPORATION AND SUBSIDIARY
FORM 10-Q/A
FOR QUARTER ENDED JUNE 30, 2000
INDEX
Sequential
Page No.
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Part I - Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
June 30, 2000 and December 31, 1999........................ 3
Unaudited Condensed Consolidated Statements
of Operations -Three Months and Six Months Ended
June 30, 2000 and 1999..................................... 4
Unaudited Condensed Consolidated Statements
of Cash Flows - Six Months Ended
June 30, 2000 and 1999..................................... 5
Notes to Unaudted Condensed Consolidated
Financial Statements. 6-8
Independent Accountants' Report.............................. 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations............. 10-12
Part II - Other Information
Item 1. Legal Proceedings............................................ 13
Item 2. Changes in Securities........................................ 13
Item 4. Submission of Matters to a Vote of Security
Holders...................................................... 13
Item 6. Exhibits and Reports on Form 8-K............................. 13
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ANTHONY & SYLVAN POOLS CORPORATION AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
June 30, December 31,
2000 1999
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(As restated
per Note 8)
ASSETS
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Current Assets:
Cash and cash equivalents .................. $ 7,230 $ 533
Contract receivables, net .................. 7,211 8,101
Inventories, net ........................... 7,021 5,282
Prepayments and other ...................... 1,583 1,673
Deferred income taxes ...................... 2,325 2,584
-------- --------
Total current assets .................. 25,370 18,173
Property, Plant and Equipment, net ............... 8,321 8,107
Goodwill, net .................................... 27,270 27,386
Other ............................................ 1,929 1,841
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$ 62,890 $ 55,507
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
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Current Liabilities:
Current maturities of long-term debt ..... $ 152 $ 171
Accounts payable ......................... 9,724 5,782
Accrued expenses ......................... 16,486 11,695
Accrued income taxes ..................... 1,178 451
-------- --------
Total current liabilities ............. 27,540 18,099
Long-term Debt ................................... 25 4,593
Other Long-term Liabilities ...................... 2,320 2,243
Commitments and Contingencies .................... -- --
Shareholders' Equity:
Serial preferred shares no par value,
1,000,000 shares authorized,
none issued ......................... -- --
Common shares no par value,
29,000,000 shares authorized,
3,622,286 and 3,602,263 outstanding,
and 2,973,489 and 2,869,264 issued,
in 2000 and 1999, respectively ....... 30,187 27,395
Treasury shares at cost,
648,797 in 2000 and 732,999 in 1999 ... (4,055) (4,581)
Retained earnings ........................ 6,873 7,758
-------- --------
Total shareholders' equity ............ 33,005 30,572
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$ 62,890 $ 55,507
======== ========
See notes to unaudited condensed consolidated financial statements.
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ANTHONY & SYLVAN POOLS CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(In thousands, except share data)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
-------- -------- -------- --------
(As restated (As restated
per Note 8) per Note 8)
Net sales ................. $ 67,199 $ 62,154 $ 97,590 $ 88,576
Cost of sales ............. 46,719 44,433 70,657 65,152
-------- -------- -------- --------
Gross profit ............ 20,480 17,721 26,933 23,424
Operating expenses ........ 14,780 12,422 24,543 21,927
-------- -------- -------- --------
Income from operations .. 5,700 5,299 2,390 1,497
Interest and other expense 21 628 217 1,723
-------- -------- -------- --------
Income/(loss) before
income taxes .......... 5,679 4,671 2,173 (226)
Provision/(benefit) for
income taxes ............ 2,373 1,821 1,079 (118)
-------- -------- -------- --------
Net income/(loss) ....... $ 3,306 $ 2,850 $ 1,094 $ (108)
======== ======== ======== ========
Earnings/(loss) per share:
Basic $ 1.11 $ .77 $ .37 ($ .03)
======== ======== ======== ========
Diluted $ 0.95 $ .69 $ .32 ($ .03)
======== ======== ======== ========
Average shares outstanding:
Basic 2,966 3,686 2,928 3,686
======== ======== ======== ========
Diluted (a) 3,470 4,142 3,432 3,686
======== ======== ======== ========
(a) Due to the net loss reported in the six-month period ended June 30, 1999,
the share base used in calculating net income/(loss) per diluted share
does not include the effect of common share equivalents, as its effect
would be anti-dilutive.
See notes to unaudited condensed consolidated financial statements.
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ANTHONY & SYLVAN POOLS CORPORATION AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(Dollars in thousands)
Six Months Ended
June 30,
2000 1999
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(Unaudited)
(As restated
per Note 8)
Cash Flows from Operating Activities:
Net income /(loss) ................................ $ 1,095 $ (108)
Adjustments to reconcile net income/(loss) to
net cash provided by operating activities:
Depreciation and amortization ........... 1,377 1,167
Non-cash deferred compensation expense .. 754 --
Deferred income taxes ................... 259 622
Other ................................... 32 157
Changes in operating assets and liabilities
net of assets acquired:
Contract receivables ............................ 928 2,832
Inventories ..................................... (1,739) (3,387)
Prepayments and other ........................... 90 (537)
Accounts payable ................................ 3,916 2,551
Accrued expenses and other ...................... 5,404 3,708
-------- --------
Net cash provided by operating activities 12,116 7,005
-------- --------
Cash Flows from Investing Activities:
Additions to property, plant and
equipment ..................................... (1,235) (2,658)
Other ........................................... (187) --
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Net cash used in investing activities ... (1,422) (2,658)
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Cash Flows from Financing Activities:
Net transactions with Essef Corporation ......... -- (2,322)
Repayment of long term debt ..................... (4,587) (133)
Proceeds on exercise of stock options ........... 20 --
Proceeds from sale of treasury shares ........... 570 --
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Net cash used in financing activities ... (3,997) (2,455)
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Net increase in cash and cash equivalents ............... 6,697 1,892
Cash and Cash Equivalents:
Beginning of period ................................... 533 --
-------- --------
End of period ......................................... $ 7,230 $ 1,892
======== ========
Supplemental Cash Flow Information:
Interest paid ................................ $ 217 $ 1,704
======== ========
Income taxes paid/(refunded) ................. $ 93 $ (118)
======== ========
See notes to unaudited condensed consolidated financial statements.
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ANTHONY & SYLVAN POOLS CORPORATION AND SUBSIDIARY
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
Anthony & Sylvan Pools Corporation and Subsidiary (the
"Company") is among the largest residential in-ground concrete pool
sales and installation businesses in the United States and operates
in one business segment.
On August 10, 1999, a third party (the "Acquiring Party")
acquired Essef Corporation ("Essef") the Company's former parent, in
a merger transaction that included the Company being split-off to
Essef's common shareholders through a taxable distribution of 100% of
the Company's shares as part of the merger consideration. The
split-off was accomplished through the distribution of 0.25 shares of
common stock for every share of Essef common stock held at the time
of the distribution. Immediately prior to the split-off, the Company
amended its articles of incorporation to provide for the issuance of
up to 1,000,000 serial preferred shares and 29,000,000 shares of
common stock.
The Company, Essef and Acquiring Party have entered into various
agreements that provide for administrative services, tax sharing and
indemnification (the "Agreements".) Among other things, these
Agreements provided for the Company to pay a dividend of $17,000,000,
subject to certain adjustments, to Essef with the balance of the
inter-company payable being contributed to capital retroactive to the
split-off date. The potential adjustments to the $17,000,000
primarily related to the net tax benefit, as defined in the
Agreements, realized by Essef from the exercise of employee stock
options net of the corporate tax payable from the split-off. Pursuant
to the Agreements, the calculation of adjustments has been completed
and the Company was not required to pay Essef any of the $17,000,000.
As such all of the Company's debt to Essef, which totaled $27,241,000
at the date of the split-off, was contributed to the Company's
capital increasing shareholders' equity to approximately $34,700,000
at the date of the split-off.
Company management believes that for the periods presented
herein in which the Company was owned by Essef that the financial
statements reflect all material expenses of the Company as if it was
organized as a stand-alone legal entity including specifically
identifiable costs incurred by Essef on behalf of, and charged to,
the Company.
(2) INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying condensed consolidated balance sheet as of June
30, 2000 and statements of operations for the three-month and
six-month periods ended June 30, 2000 and 1999 and cash flows for the
six-month periods ended June 30, 2000 and 1999 are unaudited. In the
opinion of management, these interim unaudited condensed consolidated
financial statements have been prepared on the same basis as the
audited financial statements for the year ended December 31, 1999 and
include all adjustments, consisting of only normal and recurring
adjustments, necessary for the fair presentation of the interim
period. The disclosures in the notes related to these interim
unaudited condensed consolidated financial statements are also
unaudited. The unaudited condensed consolidated statements of
operations for the three-month and six-month periods ended June 30,
2000 are not necessarily indicative of the results to be expected for
the full year. Financial statements should be read in conjunction
with the audited financial statements included in the Annual Report
on Form 10-K.
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(3) EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income by
the weighted average number of common shares outstanding. Diluted
earnings per share is based on the combined weighted average number
of shares outstanding including the assumed exercise or conversion of
options. The treasury stock method is used in computing diluted
earnings per share. For the periods prior to the split-off from
Essef, earnings per share is calculated based on the number of shares
that would have been outstanding assuming the split-off had occurred
at the beginning of the period shown. The calculations are as follows
(in thousands except per share data):
THREE-MONTHS ENDED SIX-MONTHS ENDED
JUNE 30, JUNE 30,
2000 1999 2000 1999
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(UNAUDITED) (UNAUDITED)
(As restated (As restated
per Note 8) per Note 8)
Numerator
Net income/(loss)
available to
common shareholders $ 3,306 $ 2,850 $ 1,094 $ (108)
======= ======= ======= =======
Denominator
Weighted average common
shares outstanding 2,966 3,686 2,928 3,686
Dilutive effect of
stock options (a) 504 456 504 --
------- ------- ------- -------
Denominator for net
Income/(loss) per
diluted share 3,470 4,142 3,432 3,686
======= ======= ======= =======
Earnings/(loss) per share:
Basic $ 1.11 $ 0.77 $ .37 ($ .03)
======= ======= ======= =======
Diluted $ 0.95 $ 0.69 $ .32 ($ .03)
======= ======= ======= =======
(a) Due to the net loss reported in the six-month period
ended June 30, 1999, the share base used in calculating
net income/(loss) per diluted share does not include the
effect of common share equivalents, as its effect would
be anti-dilutive.
(4) STOCK DIVIDEND
On May 2, 2000, the Board of Directors authorized a 10% stock
dividend to be distributed on or about May 30, 2000 to shareholders
of record on May 16, 2000. The consolidated financial statements
have been retroactively restated to reflect the number of shares
outstanding following the dividend.
(5) RELATED PARTY TRANSACTIONS
With the exception of certain capitalized lease obligations,
prior to June 30, 1999 the Company did not have external sources of
borrowings, and as such relied upon Essef as its primary source of
funding. Interest was charged at an average rate of 10.6% for the
six-month period ended June 30, 1999. Total interest charges on the
inter-company account for the six-months ended June 30, 1999 were
$1,683,000. At the date of the split-off the intercompany account was
contributed to capital (see note 1).
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(6) DEBT
On August 10, 1999, the Company entered into a $35 million
revolving credit facility ("Credit Facility") with a group of
banks. The Credit Facility, secured by the assets of the Company,
matures August 10, 2002 and may be extended in one-year increments
with the approval of the bank group. The Company's borrowing
capacity and interest rates under the Credit Facility are based on
its profitability and leverage. Interest rates are charged at
increments over either Prime or Libor rates. In addition a 37.5
basis points commitment fee is payable on the total amount of the
unused commitment. As of June 30, 2000, there were no outstanding
borrowings under the Credit Facility and the available borrowings
were $20.5 million. The Company is in compliance with all of its
debt covenants under the Credit Facility.
(7) LITIGATION
Certain claims, suits and complaints arising in the ordinary
course of business have been filed or are pending against the
Company. In the opinion of management, the results of all such
matters will not have a material adverse effect on the Company's
financial position, results of operations or liquidity.
(8) RESTATEMENT
Subsequent to the issuance of the Company's unaudited condensed
consolidated financial statements for the three months and six months
ended June 30, 2000, the Company determined its Long-Term Incentive
Plan, adopted in the fourth quarter of 1999, should be accounted for as
a variable compensation plan. Previously, the Company was accounting for
the plan as a fixed compensation plan. As a result, the unaudited
condensed consolidated financial statements as of and for the three
months and six months ended June 30, 2000 have been restated from
amounts previously reported to appropriately account for the plan. The
operating expenses and income taxes were adjusted to account for the
non-cash deferred compensation expense related to that plan. A summary
of the significant effects of the restatement is as follows:
(In thousands, except per share data)
(As restated As Previously
per Note 8) Reported
----------- ------------
For the three months ended June 30, 2000:
Operating expenses................................ $14,780 $14,139
Net income........................................ $ 3,306 $ 3,918
Net income basic share............................ $ 1.11 $ 1.32
Net income per diluted share...................... $ 0.95 $ 1.13
For the six months ended June 30, 2000:
Operating expenses................................ $24,543 $23,788
Net income........................................ $ 1,094 $ 1,815
Net income per basic share........................ $ 0.37 $ 0.62
Net income per diluted share...................... $ 0.32 $ 0.53
As of June 30, 2000:
Deferred income taxes............................. $ 2,325 $ 2,291
Common shares..................................... $30,187 $29,432
Retained earnings................................. $ 6,873 $ 7,594
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INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Directors of
Anthony & Sylvan Pools Corporation and Subsidiary
Mayfield Village, Ohio
We have reviewed the accompanying condensed consolidated balance sheet of
Anthony & Sylvan Pools Corporation and Subsidiary (the "Company") as of June
30, 2000, and the related condensed consolidated statements of operations and
cash flows for the three-month and six-month periods ended June 30, 2000 and
1999. These consolidated financial statements are the responsibility of the
Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and of making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit conducted in accordance with auditing standards generally accepted in
the United States of America, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole. Accordingly, we
do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to such condensed consolidated financial statements for them
to be in conformity with accounting principles generally accepted in the
United States of America.
We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of
the Company as of December 31, 1999, and the related statements of
operations, shareholders' equity, and cash flows for the year then ended (not
presented herein) and in our report dated February 18, 2000, we expressed an
unqualified opinion on those financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance
sheet as of December 31, 1999 is fairly stated, in all material respects, in
relation to the balance sheet from which it has been derived.
As discussed in Note 8, the accompanying June 30, 2000 financial statements
have been restated. The financial statements have been restated to account
for a portion of the Long-Term Incentive Plan as a variable compensation
plan.
DELOITTE & TOUCHE LLP
Cleveland, Ohio
July 21, 2000
(March 29, 2001 as to Note 8)
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ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
As discussed in Note 8 to the condensed consolidated financial statements, the
condensed consolidated financial statements as of and for the three months and
six months ended June 30, 2000 have been restated. As discussed in Note 8, the
following discussion and analysis gives effect to the restatement.
THREE MONTHS ENDED JUNE 30, 2000 COMPARED WITH
THREE MONTHS ENDED JUNE 30, 1999
Net sales of $67.2 million for the three-months ended June 30, 2000 increased
8.1% from $62.2 million for the same period in fiscal 1999. The increase was
primarily attributable to increases in average selling prices.
Gross profit increased $2.8 million to $20.5 million in 2000 from $17.7 million
in 1999 as a result of the increase in net sales. Gross profit as a percentage
of sales for the three months increased from 28.5% of net sales to 30.5% as a
result of increases in selling prices and material cost reductions arising from
new purchasing programs offsetting other material and labor cost increases.
Operating expenses, consisting of selling and administrative expenses, increased
by $2.4 million to $14.8 million in 2000 from $12.4 million in 1999. As a
percentage of sales, operating expenses increased from 20.0% in 1999 to 22.0% in
the current period. The percentage of sales increase was attributable to a
combination of accruals for employee incentive program costs, including non-cash
deferred compensation expense arising under the Company's long-term incentive
plan, and the additional costs incurred from being a stand-alone Company
following the August 10, 1999 split-off.
Interest and other expense of $0.6 million was paid in 1999 to the Company's
former Parent, Essef Corporation, through an intercompany borrowing arrangement.
As a result of the above items, adjusted for the impact of federal and state
taxes, net income for the three month period increased from $2.9 million in 1999
to $3.3 million in 2000. Net income per diluted share, benefiting from a lower
number of shares outstanding, increased $0.26 per share from $0.69 in 1999 to
$0.95 in 2000.
SIX MONTHS ENDED JUNE 30, 2000 COMPARED WITH
SIX MONTHS ENDED JUNE 30, 1999
Net sales of $97.6 million for the six-months ended June 30, 2000 increased
10.2% from $88.6 million for the same period in fiscal 1999. The increase was
attributable to increases in production and increases in average selling prices.
Gross profit increased $3.5 million to $26.9 million in 2000 from $23.4 million
in 1999 as a result of the increase in net sales. Gross profit as a percentage
of sales for the six months increased from 26.4% of net sales to 27.6% as a
result of increases in selling prices and material cost reductions arising from
new purchasing programs offsetting other material and labor cost increases.
Operating expenses, consisting of selling and administrative expenses, increased
11.9% or $2.6 million, to $24.5 million in 2000 from $21.9 million in 1999. As a
percentage of sales, operating expenses increased slightly from 24.8% in 1999 to
25.1% in the current period. The percentage of sales increase was attributable
to accruals for employee incentive program costs, including non-cash deferred
compensation expense arising under the Company's long-term incentive plan.
Interest and other expense decreased $1.5 million from $1.7 million in 1999 to
$0.2 million in 2000. Interest was paid on external borrowings in 2000, while
the interest paid in 1999 was paid to the Company's former Parent, Essef
Corporation,
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through an intercompany borrowing arrangement.
As a result of the above items, adjusted for the impact of federal and
state taxes, net income for the six month period increased $1.2 million to $1.1
million in 2000. Net income per diluted share, benefiting from a lower number of
shares outstanding, increased $0.35 per share to $0.32 from a loss of ($0.03) in
1999.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operating activities was $12.1 million for the six months ended
June 30, 2000 compared with $7.0 million in the same period in 1999. The
increase was primarily attributable to a combination of a $1.2 million increase
in net income and a $3.4 million increase in accounts payable and accrued
expenses.
Cash used in investing activities decreased from $2.7 million in the prior year
to $1.4 million in the current year primarily as a result of additional capital
expenditures made in 1999. The excess of cash from operating activities over
cash used in investing activities combined with the proceeds from the sale of
treasury shares was used to reduce external borrowings by $4.6 million during
the period, and to generate cash balances of $7.2 million at June 30, 2000.
On August 10, 1999, a third party acquired the Company's former Parent, Essef
Corporation ("Essef"), in a merger transaction that included the Company being
split-off to Essef's common shareholders as part of the merger consideration. In
accordance with the terms of the merger agreement, subsequent to June 30, 1999
the Company separated its cash management activities from Essef. Therefore, the
Company could no longer be advanced funds from Essef while retaining its
after-tax cash flow after such date. Additionally, the Company was not required
to pay Essef any of the $17.0 million that might have been due under certain
adjustment mechanisms related to the Company's split-off from Essef. As such,
all of the Company's debt to Essef, which totaled $27.2 million at the date of
the split-off, was contributed to the Company's capital at the date of the
split-off.
On August 10, 1999, the Company entered into a $35 million revolving credit
facility ("Credit Facility") with a group of banks. The Credit Facility, secured
by the assets of the Company, matures August 10, 2002 and may be extended in
one-year increments with the approval of the bank group. The Company's borrowing
capacity and interest rates under the Credit Facility are based on its
profitability and leverage. Interest rates are charged at increments over either
Prime or Libor rates. In addition, a 37.5 basis points commitment fee is payable
on the total amount of the unused commitment. As of June 30, 2000, there were no
outstanding borrowings under the Credit Facility and the available borrowings
were $20.5 million. The Company is in compliance with all of its debt covenants
under the Credit Facility.
The Company believes that existing cash and cash equivalents, internally
generated funds and funds available under its line of credit will be sufficient
to meet its needs.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Company is exposed to various market risks, including changes in pricing of
equipment, materials and contract labor, and interest rates. Market risk is the
potential loss arising from adverse changes in market rates and prices, such as
commodity prices and interest rates. The Company does not enter into financial
instruments to manage and reduce the impact of some of these risks. Further, the
Company does not enter into derivatives or other financial instruments for
trading or speculative purposes.
The Company is exposed to cash flow and fair value risk arising out of changes
in interest rates with respect to
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its long-term debt. Information with respect to the Company's principal cash
flows and it's weighted average interest rates on long-term debt at June 30,
2000 is included in the Condensed Consolidated Financial Statements.
The Company's financial results may be materially impacted by fluctuations in
its stock price, as a portion of the Company's Long-Term Incentive Plan is
currently, being treated as a variable versus a fixed stock option award plan.
CYCLICALITY AND SEASONALITY
The Company believes that the in-ground swimming pool leisure industry is
strongly influenced by general economic conditions and tends to experience
periods of decline during economic downturns. Since the majority of the
Company's swimming pool installation purchases are financed, pool sales are
particularly sensitive to interest rate fluctuations and the availability of
credit. A sustained period of high interest rates could result in declining
sales, which could have a material adverse effect on The Company's financial
condition and results of operations.
Historically, approximately 70% of the Company's revenues have been generated in
the second and third quarters of the year, the peak season for swimming pool
installation and use. Conversely, the Company typically incurs net losses during
the first and fourth quarters of the year. Unseasonably cold weather or
extraordinary amounts of rainfall during the peak sales season can significantly
reduce pool purchases. In addition, unseasonably early or late warming trends
can increase or decrease the length of the swimming pool season, significantly
affecting sales and operating profit.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No change
ITEM 2. CHANGES IN SECURITIES
No change
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF THE SECURITY HOLDERS
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Anthony & Sylvan Pools Corporation
(Registrant)
Stuart D. Neidus
------------------------------------
STUART D. NEIDUS
Chairman and Chief Executive Officer
(Principal Executive Officer)
William J. Evanson
------------------------------------
WILLIAM J. EVANSON
Executive Vice President
and Chief Financial Officer
(Principal Accounting Officer)
Date: March 29, 2001
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