Exhibit 99.1
[COMPANY LETTERHEAD]
FOR IMMEDIATE RELEASE
Contact: William J. Evanson
Executive Vice President & Chief Financial Officer
(440) 720-3301
ANTHONY & SYLVAN POOLS CORPORATION REPORTS
THIRD QUARTER RESULTS AND ANNOUNCES 10% STOCK DIVIDEND
Mayfield Village, Ohio (October 25, 2002) - Anthony & Sylvan Pools Corporation
(NASDAQ: SWIM) today announced results for its third quarter ended September 30,
2002. Net sales were $50,626,000, a decrease of 11.4% from the third quarter
2001 sales of $57,118,000. Net income for the third quarter was $177,000
compared with $1,681,000 for the same period last year. On a per share basis,
adjusted for a 10% stock dividend distributed in May 2002, diluted earnings per
share of $0.03 compares with $0.32 per share recorded in the third quarter ended
September 30, 2001. For the nine months ended September 30, 2002, revenues of
$142,291,000 compared with $151,892,000 last year, a 6.3% decrease. Net income
for the nine months was $310,000 compared with $2,689,000 in the prior year.
Diluted earnings per share for the nine-month period of $0.06 compared with
$0.51 per share reported last year.
Included in the results for the third quarter and nine months is a $1,170,000
pre-tax restructuring charge for the previously announced decision to close its
swimming pool installation divisions in the Orlando and Southeastern Florida
markets. In addition, those divisions had combined operating losses of
($800,000) and ($500,000) for the third quarter ended September 30, 2002 and
2001, respectively, and operating losses of ($2,600,000) and ($1,500,000) for
the nine months ended September 30, 2002 and 2001, respectively.
Commenting on the results, Stuart D. Neidus, Anthony & Sylvan's Chairman and
Chief Executive Officer, said, "The wind-down of the closings of our Orlando and
Southeastern Florida swimming pool installation divisions is going well and
should be, for the most part, completed before the end of the year. At that
time, we will account for those operations as discontinued. Our continuing
businesses, while still experiencing the effect of consumer restraint and price
sensitivity, saw third quarter bookings of sales contracts increase over last
year."
Mr. Neidus commented on the outlook for the remainder of the year by stating,
"For the fourth quarter, our results will be affected by the wind-down of
operations in the two Florida divisions that are closing. Once the wind-down is
completed, we can fully redirect our financial and intellectual assets to
markets and growth strategies that can yield levels of return consistent with
our long-term goal of increasing shareholder value." He also noted that the
Company continues to maintain a strong balance sheet, with over $30 million in
equity and no debt at September 30, 2002.
Mr. Neidus also announced that the Company's Board of Directors has declared a
10 percent stock dividend payable on November 29, 2002 to shareholders of record
on November 15, 2002. Commenting on the dividend action, Mr. Neidus said, "Our
Board again has indicated its confidence in the long-term potential for Anthony
& Sylvan. This stock dividend is another step toward increasing the liquidity of
our stock."
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
over 40 sales design centers in 23 geographic markets in 16 states. It also
sells pool-related consumables, replacement parts, equipment and supplies
through retail service centers.
This press 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.
ANTHONY & SYLVAN POOLS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
SEPTEMBER 30, DECEMBER 31,
2002 2001
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ASSETS
Current Assets:
Cash and cash equivalents................... $ 3,280 $ 351
Contract receivables, net................... 7,077 16,897
Inventories, net............................ 6,967 5,799
Prepayments and other....................... 2,187 2,346
Deferred income taxes....................... 2,463 2,037
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Total current assets..................... 21,974 27,430
Property, plant and equipment, net.................. 8,314 9,307
Goodwill, net....................................... 26,276 26,276
Deferred income taxes............................... -- 146
Other............................................... 2,872 2,839
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Total Assets............................. $59,436 $65,998
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt........ $ -- $ 5
Accounts payable............................ 7,546 7,383
Accrued expenses............................ 15,601 13,029
Accrued income taxes........................ 83 67
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Total current liabilities................ 23,230 20,484
Long-Term Debt...................................... -- 7,550
Deferred Income Tax Liabilities..................... 257 --
Other Long-Term Liabilities......................... 2,393 2,335
Commitments and Contingencies -- --
Shareholders' Equity................................ 33,556 35,629
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Total Liabilities and Shareholders' Equity ......... $59,436 $65,998
======= =======
ANTHONY & SYLVAN POOLS CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(Dollars in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
-------- -------- -------- --------
Net sales..................... $ 50,626 $ 57,118 $142,291 $151,892
Cost of sales................. 36,607 41,251 103,349 109,421
-------- -------- -------- --------
Gross profit................ 14,019 15,867 38,942 42,471
Operating expenses(a)......... 12,503 13,186 37,061 38,399
Restructuring charge.......... 1,170 -- 1,170 --
-------- -------- -------- --------
Income from operations........ 346 2,681 711 4,072
Interest and other expense.... 63 1 215 140
-------- -------- -------- --------
Income before income taxes.. 283 2,680 496 3,932
Provision for income taxes.... 106 999 186 1,243
-------- -------- -------- --------
Net income.................. $ 177 $ 1,681 $ 310 $ 2,689
======== ======== ======== ========
Earnings per share:
Basic....................... $ 0.03 $ 0.33 $ 0.06 $ 0.53
======== ======== ======== ========
Diluted..................... $ 0.03 $ 0.32 $ 0.06 $ 0.51
======== ======== ======== ========
Average shares outstanding:
Basic....................... 4,754 5,098 4,934 5,111
======== ======== ======== ========
Diluted..................... 4,816 5,233 4,996 5,245
======== ======== ======== ========
(a) Includes a non-cash deferred compensation credit of $575 and goodwill
amortization expense of $553 in the nine months ended September 30,
2001, and goodwill amortization expense of $185 in the three months
ended September 30, 2001.
ANTHONY & SYLVAN POOLS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(Dollars in thousands)
2002 2001
-------- --------
Cash Flows from Operating Activities:
Net income....................................... $ 310 $ 2,689
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization.................. 2,201 2,566
Non-cash deferred stock compensation........... 92 (575)
Deferred income taxes.......................... (23) (231)
Other.......................................... (142) 24
Changes in operating assets and liabilities
net of assets acquired:
Contract receivables........................... 9,820 2,749
Inventories.................................... (1,168) (923)
Prepayments and other.......................... 159 56
Accounts payable............................... 163 2,911
Accrued and other expenses..................... 2,588 3,496
-------- --------
Cash provided by operating activities........ 14,000 12,762
-------- --------
Cash Flows from Investing Activities:
Additions to property, plant and equipment....... (1,390) (2,423)
Other............................................ 353 (15)
-------- --------
Cash used in investing activities............ (1,037) (2,438)
-------- --------
Cash Flows from Financing Activities:
Repayment of long-term debt...................... (7,555) (1,293)
Proceeds from exercise of stock options.......... 34 --
Proceeds from issuance of shares................. -- 530
(Purchase) of treasury shares.................... (2,513) (2,315)
-------- --------
Cash used in financing activities............ (10,034) (3,078)
-------- --------
Increase in Cash and Cash Equivalents............... 2,929 7,246
Cash and Cash Equivalents:
Beginning of period.............................. 351 422
-------- --------
End of period.................................... $ 3,280 $ 7,668
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Supplemental Cash Flow Information:
Interest paid.................................... $ 192 $ 147
Income taxes (refunded)/paid..................... $ (399) $ 599