AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON ,
1998.

REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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ANTHONY & SYLVAN POOLS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

OHIO 1799 31-1522456
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) NUMBER)

220 PARK DRIVE
CHARDON, OHIO 44024
(440) 285-7946
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)

STUART D. NEIDUS
CHAIRMAN, CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
ANTHONY & SYLVAN POOLS CORPORATION
220 PARK DRIVE
CHARDON, OHIO 44024
(440) 285-7946
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

COPIES TO:

DYNDA A. THOMAS, ESQ. JAMES R. CARLSON, ESQ.
Squire, Sanders & Dempsey L.L.P. Thompson Hine & Flory LLP
4900 Key Tower, 127 Public Square 3900 Key Tower, 127 Public Square
Cleveland, Ohio 44114-1304 Cleveland, Ohio 44114-1216
(216) 479-8500 (216) 566-5500
Facsimile: (216) 479-8776 Facsimile: (216) 566-5800

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:

As soon as practicable after this Registration Statement becomes effective.
------------------

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]

CALCULATION OF REGISTRATION FEE

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TITLE OF EACH CLASS PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE(2) REGISTRATION FEE
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Common Shares, no par value..................... $22,500,000.00 $6,638.00
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(1) Includes shares subject to purchase by the Underwriters to cover
over-allotments, if any.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act.
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
2

[PICTURES OF RESIDENTIAL SWIMMING POOLS AND MAP OF UNITED STATES DEPICTING SALES
OFFICES]
3

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS, DATED , 1998

ANTHONY & SYLVAN POOLS CORPORATION

COMMON SHARES
------------------

All of the Common Shares (as hereinafter defined) offered hereby are being
sold by Anthony & Sylvan Pools Corporation (the "Company"). The Company
currently has outstanding Common Shares, all of which are owned
by a wholly owned subsidiary of Essef Corporation ("Essef") (Essef and such
subsidiary are sometimes referred to as the "Essef Group"). Upon completion of
this offering (the "Offering"), the Essef Group will continue to own
approximately % of the outstanding Common Shares ( % if the
Underwriters' over-allotment option is exercised in full) and will continue to
control the Company. However, Essef has informed the Company that it is
currently contemplating a two-stage spin-off of its interest in the Company (the
"Double Spin-Off") whereby (i) following the completion of the Offering, Essef
would cause its subsidiary to distribute to Essef all of the Common Shares owned
by it and (ii) thereafter, Essef would distribute such Common Shares on a pro
rata basis to its shareholders. Essef is under no obligation to effect the
Double Spin-Off and may pursue other alternatives in the event it is unable to
obtain a tax ruling from the Internal Revenue Service recognizing the tax free
nature of the Double Spin-Off. See "Principal Shareholder" and "Relationship
between the Company and Essef."

Prior to the Offering, there has been no public market for the Common
Shares of the Company ("Common Shares"). It is currently anticipated that the
initial public offering price will be between $ .00 and $ .00
per share. See "Underwriting" for a discussion of the factors to be considered
in determining the initial public offering price. Application has been made to
have the Common Shares listed on the Nasdaq National Market under the symbol
"SWIM."
------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON SHARES OFFERED
HEREBY.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (THE "COMMISSION") OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

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UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)
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Per Share................................... $ $ $
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Total(3).................................... $ $ $
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(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended (the "Securities Act"). See "Underwriting."

(2) Before deducting expenses of the Offering payable by the Company estimated
at $ .

(3) The Company has granted the Underwriters a 30-day option to purchase up to
an aggregate of additional Common Shares on the same terms as
set forth above solely to cover over-allotments, if any. If such option is
exercised in full, then the total Price to Public, Underwriting Discounts
and Commissions, and Proceeds to Company will be $ , $ and
$ , respectively. See "Underwriting."
------------------

The Common Shares are being offered by the several Underwriters named
herein, subject to prior sale, when, as and if accepted by them and subject to
certain conditions. It is expected that certificates for the Common Shares
offered hereby will be available for delivery at the offices of McDonald &
Company Securities, Inc., Cleveland, Ohio, on or about , 1998.
MCDONALD & COMPANY
SECURITIES, INC.

FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
MORGAN KEEGAN & COMPANY, INC.
, 1998
4

The Company intends to furnish its shareholders with annual reports
containing financial statements audited by the Company's independent accountants
and quarterly reports for the first three quarters of each year containing
unaudited interim financial information.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON SHARES
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements, including notes thereto, appearing
elsewhere in this Prospectus. Unless otherwise indicated, all information
presented in this Prospectus assumes no exercise of the Underwriters'
over-allotment option. This Prospectus contains forward-looking statements which
involve risks and uncertainties. The Company's actual results could differ
materially from the results anticipated in these forward-looking statements as a
result of certain of the factors set forth under "Risk Factors" and elsewhere in
this Prospectus.

Unless the context indicates or otherwise requires, references in this
Prospectus to "swimming pools" or "pools" shall mean residential, in-ground
swimming pools, and references to "swimming pool industry" or "industry" shall
mean the swimming pool design, installation and renovation industry.

THE COMPANY

The Company is the largest installer of concrete swimming pools in the
United States. Through its network of 39 sales offices serving 15 states, the
Company believes it has achieved the leading market share in 15 of the 24 major
metropolitan areas it serves. As the successor to the respective businesses of
Sylvan Pools (founded in Pennsylvania in 1946) and Anthony Pools (founded in
California in 1947), the Company has a referral base of over 300,000 customers
and a depth of experience and expertise that is unmatched in the industry. These
factors, together with the Company's national reputation for quality, volume
purchasing ability and innovative sales techniques have enabled the Company to
establish a significant presence in each of its current geographic markets while
positioning itself for continued expansion into new markets through internal
growth and selective acquisitions.

The majority of the Company's pools range in price from $14,500 to $36,500.
Historically, the Company's sales have been seasonally strongest in the second
and third quarters and weakest in the first quarter. The Company built
approximately 4,100 pools in 1997 and 2,300 pools during the first half of 1998.
On a pro forma basis, after giving effect to the January 1998 Tango Acquisition
(defined below) for 1997 and the August 1998 Andrews Acquisition (defined below)
for 1997 and for the first half of 1998, the number of pools installed by the
Company during such periods would have been approximately 6,200 and 2,900,
respectively.

According to the National Spa & Pool Institute, the total number of
swimming pools installed annually in the United States has grown from 121,000 in
1994 to 160,000 in 1997, a 9.8% compound annual growth rate. In each of these
years, the percentage of swimming pools installed using formative structures
made of concrete, vinyl liners and pre-molded fiberglass has remained relatively
constant and in 1997 represented 68.8%, 28.7% and 2.5%, respectively, of total
swimming pools installed. While other sectors of the swimming pool business
(such as manufacturing, distribution and retailing of pool products and
equipment) have undergone significant consolidation in recent years, the
industry has remained highly fragmented. The Company estimates that in 1997, the
top ten concrete swimming pool installation companies installed approximately
18,600 such pools, accounting for 16.9% of all concrete swimming pool
installations and 11.6% of all swimming pool installations in the United States
that year. The Company believes that on a nationwide basis, it has the leading
share of both the concrete swimming pool market and the total swimming pool
market, with an estimated 5.6% share of the concrete pool market and an
estimated 3.9% share of the total pool market.

COMPETITIVE STRENGTHS

The Company attributes its strong competitive position in the swimming pool
installation industry to, among other things:

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weather through a diversified geographic presence, (iv) implement national
marketing strategies and support a centralized management team and (v) attract
desirable acquisition candidates.

Industry Expertise. The Company believes its craftsmen are among the most
skilled and experienced in the industry. As a result of, among other things, its
longevity in the business, significant volume of work and willingness to provide
financing for equipment purchases by subcontractors, the Company has forged
significant relationships with the craftsmen who perform its pool installation
and renovation work. These relationships, which in some cases include several
generations from the same family, have enabled the Company to negotiate
favorable arrangements with such craftsmen and, together with national
recruiting and apprenticeship training, have enabled the Company to maintain a
stable supply of skilled labor. In addition to its experienced labor base, the
Company has a senior management team that has, on average, 14 years of
experience in the swimming pool industry.

Reputation and Name Recognition. As a result of the Company's size, history
and strong commitment to customer satisfaction, the Company believes "Anthony &
Sylvan" has become one of the most recognized names in the industry and a symbol
of quality among consumers. The Company's name recognition and reputation should
permit the Company to establish relationships with national home builders and
other referral sources that wish to be associated with the Company's brand.

Innovative Sales and Marketing Approach. The Company's experienced sales
designers and substantial investments in training and technology provide it with
significant advantages over competitors that have less qualified sales personnel
and/or utilize less sophisticated sales methods. All sales designers complete an
intensive one-month training program upon joining the Company and receive
periodic skills training throughout their careers. The introduction of the
laptop computer as a selling tool in recent years has significantly enhanced the
quality and professionalism of the Company's in-home sales presentations. This
technology enables sales designers to utilize pre-programmed informational
displays and pricing worksheets to educate customers and make sales visits more
interactive, informative and successful.

GROWTH STRATEGY

The Company believes that its competitive strengths provide a platform for
profitable expansion. The Company's growth strategy includes the following
components:

Open New Sales Offices. The Company intends to open new sales offices in
existing markets where it believes it can enhance its current market share and
in new markets where its competitive strengths will permit it to achieve a
leading market share position. The Company has currently identified over 30
markets that meet its development or expansion criteria and intends to assess
these areas further to pinpoint the most attractive locations for new sales
offices and the best strategy for opening such offices. The Company believes the
most significant expansion opportunities may be found in certain sunbelt regions
and on the eastern seaboard in areas where the Company has little or no current
presence. Since January 1, 1997, the Company has opened eight new sales offices.

Pursue Acquisitions. The Company believes that it is well positioned to
make acquisitions of high quality pool installation companies in the fragmented
pool installation industry. As with its internal growth strategy, the Company
intends to pursue acquisition candidates in the markets it has targeted for
expansion. In keeping with this approach, in January 1998, the Company, which
was already the leading pool installer in Las Vegas, acquired substantially all
of the assets of Tango Pools, Inc., a leading pool installation company in Las
Vegas (the "Tango Acquisition"). In addition, in August 1998, the Company
acquired substantially all of the assets of Pools by Andrews, Inc., one of the
largest pool installation companies in Florida (the "Andrews Acquisition"). See
"-- Recent Developments."

the homeowner's first mortgage, and as such, the Company is paid at closing,
after the pool has been completely installed. The Company believes that its
ability to forego progress payments on a pool installation and accept a one-time
payment at the time of the loan closing provides it with a competitive advantage
over smaller companies seeking to provide similar services to large
homebuilders. The Company believes that significant opportunities exist to
develop and expand upon relationships with national and regional homebuilders in
the future.

Expand Pool Renovation Business. There are currently over three million
swimming pools in the United States. The Company's experience indicates that
pool owners seek renovation services when their pools need repair or when they
want to upgrade certain features of the pool such as equipment, tile, lighting
or plaster. Renovations are typically done in the early spring or late fall
which, to some extent, reduces the seasonal nature of the business. Since 1993,
the Company has been marketing its renovation services to its past installation
customers in selected markets. This strategy has contributed to an increase in
revenues from renovations from $0.8 million in 1993 to $7.9 million in 1997. The
Company maintains a separate sales and marketing staff of 20 people responsible
for its renovation business and intends to expand its marketing efforts to
include an even wider base of pool owners in new and existing markets.

The Company is an Ohio corporation with its principal executive offices
located at 220 Park Drive, Chardon, Ohio 44024, and its telephone number is
(440) 285-SWIM, or (440) 285-7946. The Company's internet homepage is located at
www.anthony-sylvan.com.

RELATIONSHIP WITH ESSEF

The Company is an indirect, wholly owned subsidiary of Essef. Upon
completion of this Offering, Essef will beneficially own Common
Shares, representing % of the Common Shares then outstanding ( % if the
Underwriters' over-allotment option is exercised in full). Unless and until the
Double Spin-Off is completed, Essef will retain control of the Company. Such
control will include the ability to determine any corporate action requiring
approval of holders of the Common Shares (including the election of the entire
Board of Directors of the Company) without the approval of the other
shareholders of the Company. Currently, all three of the Company's current
directors are executive officers and/or directors of Essef.

In connection with this Offering, the Company intends to execute and
deliver a revolving credit promissory note to, and enter into a series of
agreements with, Essef that will govern certain aspects of their relationship
subsequent to this Offering. It is anticipated that the Company will utilize the
proceeds of the Offering to reduce the intercompany debt the Company owes Essef
in connection with, among other things, the May 1997 acquisition of the assets
and business of Anthony and Sylvan Pools, Inc. ("Original Anthony and Sylvan").
As of June 30, 1998, the Company's obligations to Essef totaled approximately
$26.7 million. See "Risk Factors -- Relationship with Essef; Absence of History
as a Stand-Alone Company," "Relationship between the Company and Essef" and
"Principal Shareholder."

RECENT DEVELOPMENTS

On August 26, 1998, the Company completed the Andrews Acquisition. Pools by
Andrews, Inc., with annual sales of approximately $27.0 million for the year
ended December 31, 1997, is one of the largest installers of concrete swimming
pools in Florida and installed approximately 1,500 pools in 1997. The Company
believes that the Andrews Acquisition will facilitate its entry into six new
Florida markets (Fort Myers, Fort Lauderdale, Jacksonville, Miami, Palm Beach
and Tampa), and augment its presence in the Orlando market. In addition, Edward
Andrews, the founder and President of Pools by Andrews, Inc. has joined the
Company as a Vice President with primary responsibility for the Company's
Florida operations.

5
8

THE OFFERING

Common Shares offered...................................... shares
Common Shares to be outstanding after the Offering......... shares(1)
Use of proceeds............................................ To repay certain existing indebtedness.
See "Use of Proceeds."
Proposed Nasdaq National Market Symbol..................... SWIM

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(1) Excludes 1,000,000 Common Shares reserved for issuance under the Company's
1998 Long-Term Incentive Plan and additional Common Shares which may be
issued to Stuart D. Neidus, the Company's Chairman, Chief Executive Officer
and Chief Financial Officer, and Thomas B. Waldin, a Director of the
Company, in substitution for certain of their respective Essef stock
options. See "Management -- Stock Options" and "Management -- 1998 Long-Term
Incentive Plan." If the Underwriters' over-allotment option is exercised in
full, then the Company will have Common Shares outstanding
upon consummation of the Offering. See "Shares Eligible for Future Sale."

RISK FACTORS

The Common Shares offered hereby involve a high degree of risk. See "Risk
Factors."

6
9

SUMMARY OF HISTORICAL AND PRO FORMA FINANCIAL DATA

The following table sets forth summary historical and pro forma operating
results, balance sheet and operating data of the Company. The summary historical
financial data for the years ended December 31, 1995 and 1996 were derived from
the Audited Financial Statements of Original Anthony and Sylvan prior to the
Company's May 1997 acquisition of substantially all of the assets of Original
Anthony and Sylvan ("Original A&S Acquisition"). The summary pro forma data for
the year ended December 31, 1997 and the six months ended June 30, 1997 give
effect to the Original A&S Acquisition and the Offering as if they had occurred
on January 1, 1997. The summary financial data as of and for the six months
ended June 30, 1998 have been derived from the Unaudited Financial Statements of
the Company and include, in the opinion of management, all adjustments necessary
to present fairly the data for such periods. The results for the six months
ended June 30, 1998 are not necessarily indicative of the results to be expected
for the year ending December 31, 1998 or for any future period. The summary pro
forma data as of and for the six months ended June 30, 1998 and latest 52-week
period ("LTM") ended June 30, 1998 give effect to the Offering as if it occurred
on January 1, 1998 and July 1, 1997, respectively. The summary pro forma balance
sheet data give effect to the Offering as if it had occurred as of June 30,
1998. The data presented below should be read in conjunction with the Financial
Statements and the related notes thereto included elsewhere herein, the other
financial information included elsewhere herein, the "Unaudited Pro Forma
Financial Data," "Capitalization" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

ORIGINAL A&S THE COMPANY
------------------ -----------------------------------------------------------------
PRO FORMA PRO FORMA
YEAR ENDED PRO FORMA SIX MONTHS SIX MONTHS SIX MONTHS PRO FORMA
DECEMBER 31, YEAR ENDED ENDED ENDED ENDED LTM ENDED
------------------ DECEMBER 31, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1995 1996(1) 1997(2)(3) 1997(2)(3) 1998 1998(3) 1998(3)
------- -------- ------------ ---------- ---------- ------------ ---------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)

OPERATING RESULTS:
Net sales.................. $58,569 $112,167 $127,712 $58,257 $70,455 $70,455 $139,910
Cost of sales.............. 42,454 82,018 93,105 42,788 50,597 50,597 100,914
------- -------- -------- ------- ------- ------- --------
Gross profit............... 16,115 30,149 34,607 15,469 19,858 19,858 38,996
Selling expenses........... 9,373 18,875 19,651 9,669 11,439 11,439 21,421
Administrative expenses.... 5,695 9,049 10,378 5,800 5,632 6,032 10,610
------- -------- -------- ------- ------- ------- --------
Total operating expenses... 15,068 27,924 30,029 15,469 17,071 17,471 32,031
------- -------- -------- ------- ------- ------- --------
Income/(loss) from
operations............... 1,047 2,225 4,578 -- 2,787 2,387 6,965
Interest and other
expense.................. 101 354 217 99 1,026 245 363
------- -------- -------- ------- ------- ------- --------
Income/(loss) before
taxes.................... 946 1,871 4,361 (99) 1,761 2,142 6,602
Income taxes
expense/(benefit)........ 342 704 1,631 (36) 675 812 2,479
------- -------- -------- ------- ------- ------- --------
Net income/(loss).......... $ 604 $ 1,167 $ 2,730 $ (63) $ 1,086 $ 1,330 $ 4,123
======= ======== ======== ======= ======= ======= ========
Pro forma weighted average
shares outstanding basic
and diluted(4)...........
Pro forma net income per
share basic and
diluted(4)(5)............
BALANCE SHEET DATA:
Working capital............ $ 879 $(5,871) $ (5,871)
Total assets............... 51,402 51,402 51,402
Total debt................. 27,416 7,416 7,416
Equity..................... 5,639 25,639 25,639
OPERATING DATA:
Number of pools
installed................ 2,209 3,803 4,112 1,812 2,262 2,262 4,562

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(1) In March 1996, Original Anthony and Sylvan acquired the assets of Anthony
Pools. This acquisition was accounted for as a purchase, and, accordingly,
the results of operations of Anthony Pools are included in Original Anthony
and Sylvan's financial statements from the date of acquisition. As a result,
period to period comparisons are not necessarily meaningful.
(2) The acquisition of the assets of Original Anthony and Sylvan by the Company
in May 1997 was accounted for as a purchase, with the purchase price being
allocated to the assets and liabilities based on the estimated fair value
thereof as of the date of the Original A&S Acquisition. The pro forma
financial data for 1997 gives effect to the Original A&S Acquisition as if
it had occurred as of January 1, 1997.
(3) Pro forma for the reduction of indebtedness with the proceeds of the
Offering and the addition of estimated stand-alone public company
administrative expenses to be incurred by the Company following the
Offering.
(4) Does not include options to purchase Essef Shares held by officers and
directors of the Company which may be substituted by stock options relating
to the Company's Common Shares at the date of the Double Spin-Off. See
"Management -- Stock Options" for a description of the stock option
substitution methodology.
(5) Historical net income per share has not been presented as it would not be
meaningful because on , 1998, the Company declared a
for stock split of its Common Shares.

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10

RISK FACTORS

This Prospectus contains forward-looking statements which involve a number
of risks and uncertainties. Actual results could differ materially from those
discussed in the forward-looking statements. Factors that could cause actual
results to differ materially include, without limitation, the risk factors
discussed below as well as the risks discussed in "Management's Discussion and
Analysis of Financial Condition and Results of Operations," "Business" and
elsewhere in this Prospectus. In addition to the other information contained in
this Prospectus, the following risk factors should be considered carefully in
evaluating the Company and its business before purchasing the Common Shares
offered hereby.

GENERAL ECONOMIC CONDITIONS

The Company believes that the swimming pool industry is strongly influenced
by general economic conditions and tends to experience periods of decline during
economic downturns. Because the majority of the Company's pool installations are
financed, pool sales are particularly sensitive to interest rate fluctuations
and the availability of credit. The industry may experience sustained periods of
declining sales in the future, and such a decline could have a material adverse
effect on the Company's business, financial condition and results of operations.

RISKS RELATED TO THE COMPANY'S GROWTH STRATEGY

The Company's business has experienced substantial growth in recent years,
resulting in significant changes in the size, scope and geographic distribution
of the Company's operations. The Company's business model contemplates a
continued process of aggressive and rapid growth through acquisitions and
internal expansion. There can be no assurance that the Company will be
successful in identifying, attracting or acquiring acquisition candidates or in
identifying opportunities for internal growth. On the other hand, if the Company
experiences a rapid pace of acquisitions, there can be no assurance that the
Company will be able to integrate its acquisitions and manage future growth
without substantial costs, delays or other problems.

The Company may not be able to anticipate all of the changing demands that
future growth will impose on its management personnel, operational and
management information systems and financial systems. Internal expansion into
new markets and the integration of the operations of newly acquired companies
may lead to diversion of management attention from other ongoing business
concerns. The Company may seek to recruit additional managers to oversee
internal expansion and supplement the management of the acquired companies but
may have difficulty recruiting additional managers with the skills necessary to
operate successfully in new markets or enhance the management of the acquired
companies. In addition, the Company may be unable to retain sales people and
other key employees of acquired companies.

There can be no assurance that new operations or acquired companies will
achieve targeted sales and profitability levels or that the Company will
recognize the efficiencies or synergies expected from such growth. The cost of
expansion and the integration of new operations could have an adverse effect on
short-term operating results. With regard to acquisitions, such costs could
include, among other things, severance payments to employees of acquired
companies, restructuring charges, expenses associated with a change of control
and non-recurring acquisition costs such as accounting and legal fees,
investment banking fees and recognition of transaction-related obligations. Any
or all of the factors described in this section could have a material adverse
effect on the Company's business, financial condition and results of operations.
See "Business -- Growth Strategy."

AVAILABILITY OF ACQUISITION FINANCING; FUTURE CAPITAL NEEDS

The Company may choose to finance future acquisitions by using shares of
its capital stock for all or a portion of the consideration to be paid. Unless
and until the completion of the Double Spin-Off, the number of Common Shares
available for this purpose may be limited by the federal tax requirement that
the Essef Group retain at least 80% of the total voting power and value of the
Company in order to include the Company in its consolidated federal income tax
group. The issuance of additional equity securities for use as acquisition
currency or otherwise will result in a reduction of the percentage ownership of
the then current shareholders of the
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11

Company and such equity securities may have rights, preferences or privileges
senior to those of the holders of the Common Shares offered hereby. In the event
the Common Shares do not maintain a sufficient market value, or potential
acquisition candidates are otherwise unwilling to accept Common Shares as part
of the consideration for the sale of their businesses, the Company would be
required to use more of its cash resources, if available, in order to initiate
and maintain its acquisition program. In such instance, if the Company is unable
to generate or otherwise obtain sufficient cash resources on acceptable terms,
its growth could be limited.

The Company intends to apply the proceeds of this Offering to reduce its
debt to Essef and, as such, is not relying upon such proceeds to provide cash
for its acquisition program and other liquidity requirements. Cash generated
during the last three quarters of the year is expected to be sufficient to meet
the Company's short-term working capital requirements. As an additional source
of short-term liquidity and acquisition financing, the Company expects to be
able to borrow funds from Essef pursuant to a revolving credit promissory note
("Revolving Note") to be executed by the Company and delivered to Essef
following the completion of the Offering. However, Essef is not legally
obligated to provide financing to the Company pursuant to such Revolving Note
and may, for reasons not relating to the Company, be unwilling or otherwise
unable, under the terms of its bank credit facility (of which the Company is a
guarantor), to extend new loans to the Company in the future. Terms of Essef's
credit facility that could limit Essef's willingness or ability to make loans to
the Company include limits on aggregate borrowings and affirmative and negative
covenants. In addition, Essef has other subsidiaries to which it may extend
loans thereby reducing the funds it has available to loan to the Company.
Because the Revolving Note will become immediately due and payable and all new
borrowing thereunder will cease upon the consummation of the Double Spin-Off,
the Company may need to rely upon other sources, such as public and private debt
and equity financing, to meet its long-term liquidity requirements. The
inability of the Company to obtain financing from Essef could materially
adversely affect the Company's growth strategy in the short-term. The inability
of the Company to secure alternate sources of financing on acceptable terms
following the Double Spin-Off could have a material adverse effect on the
Company's business, financial condition and results of operations. There can be
no assurance that necessary financing will be available on terms favorable to
the Company, or at all. See "Use of Proceeds" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."

RELATIONSHIP WITH ESSEF; ABSENCE OF HISTORY AS A STAND-ALONE COMPANY

Following the Offering, unless and until the Double Spin-Off is effected,
the Essef Group will own % of the outstanding Common Shares of the Company
( % if the Underwriters' over-allotment option is exercised in full). As a
result, Essef will be able to elect the entire Board of Directors of the Company
and control the business and affairs of the Company, including any
determinations with respect to mergers or other combinations involving the
Company, the acquisition or disposition of assets by the Company, the incurrence
of indebtedness by the Company, the issuance of additional Common Shares or
other equity securities by the Company and the payment of dividends with respect
to the Common Shares. Similarly, Essef will have the power to determine matters
submitted to a vote of the Company's shareholders, will have the power to delay,
defer or prevent a change in control of the Company and could take other actions
that might be favorable to Essef but not to the shareholders of the Company
generally. In addition, as of the date of this Prospectus, all three of the
Company's current directors, including its Chairman and Chief Executive Officer,
are executive officers or directors of Essef. The performance by these persons
of their duties to the Essef Group companies may give rise to conflicts of
interest and conflicting demands on the amount of time these individuals will
have available for the Company's affairs. There can be no assurance that any
such conflicts will be resolved in the Company's favor. See
"Management -- Directors, Executive Officers and Key Employees" and
"Relationship between the Company and Essef."

The Essef Group could decide to sell or otherwise dispose of all or a
portion of its Common Shares at some future date, and there can be no assurance
that, in any transfer by the Essef Group of its controlling interest in the
Company, any other holders of Common Shares will be allowed to participate in
such transaction or will realize any premium with respect to their Common
Shares. Sales or distributions by the Essef Group of substantial amounts of
Common Shares in the public market could adversely affect prevailing market
prices for the Common Shares.

9
12

This Offering is expected to provide several significant benefits to Essef
and its shareholders, including the establishment of a public market for the
Common Shares retained by Essef and the creation of an opportunity to accomplish
the Double Spin-Off. Although the Double Spin-Off is expected to increase the
liquidity of the Common Shares, there can be no assurance that it will result in
any benefit to shareholders of the Company or will have a positive impact on the
market for the Common Shares. Essef is under no obligation to effect the Double
Spin-Off and has informed the Company that there is a possibility that it will
pursue other alternatives in the event it is unable to obtain a favorable tax
ruling from the Internal Revenue Service regarding the tax free nature of the
Double Spin-Off. See "Relationship between the Company and Essef" and "Shares
Eligible for Future Sale."

Essef currently provides certain financial, risk management, tax, employee
benefits, legal and management services to the Company, for which all
specifically identifiable charges for such services are reflected in the
Company's financial statements. The Company's short-term business, operating
results and financial condition could be adversely affected by a sudden
reduction or discontinuation of such services from Essef. The Company intends to
execute and deliver the Revolving Note to, and enter into a series of agreements
with, Essef for the purpose of facilitating the Company's transition to an
independent public company. However, there can be no assurance that the Company
will be able to manage this transition or to develop these independent resources
without interruption to its business. Except as otherwise described in this
Prospectus, Essef has no obligation to provide these services to the Company.
See "Relationship between the Company and Essef." The Company's financial
results as a subsidiary of Essef may not be representative of what the Company's
results of operations and financial condition would have been had the Company
been a separate, stand-alone public company during the periods presented and may
not be indicative of the future results of operations or financial condition of
the Company. See "-- Availability of Acquisition Financing; Future Capital
Needs."

SEASONALITY AND WEATHER

Although the Company expects to reduce the seasonality of its sales over
time by expanding both its presence in the sunbelt regions and its renovation
business, at present the Company's business remains highly seasonal.
Historically, approximately 70% of the Company's net sales have been generated
in the second and third quarters of the year, the peak season for swimming pool
installation and use. Moreover, the Company typically incurs net losses during
the first quarter of the year. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Quarterly Results of
Operations." Unseasonably cold weather or extraordinary amounts of rainfall
during the peak sales season can significantly reduce pool purchases and disrupt
installation schedules, thereby adversely affecting sales and operating profit.

ABSENCE OF PRIOR TRADING MARKET; POTENTIAL VOLATILITY OF STOCK PRICE

Prior to the Offering, there has been no public market for the Common
Shares. Although the Company has applied to have the Common Shares approved for
quotation on the Nasdaq National Market, there can be no assurance that an
active trading market will develop for the Common Shares or, if one does
develop, that it will be maintained. The initial public offering price of the
Common Shares will be negotiated between the Company and the representatives of
the Underwriters and may not be indicative of the market price of the Common
Shares after the Offering. See "Underwriting." The market price of the Common
Shares could be highly volatile, fluctuating in response to factors such as
changes in the economy or the financial markets, variations in the Company's
operating results, failure to achieve earnings consistent with analysts'
estimates, announcements of new services or market expansions by the Company or
its competitors, and developments relating to regulatory or other issues
affecting the swimming pool industry. In addition, the domestic stock exchanges
and systems generally have experienced and are likely in the future to
experience significant price and volume fluctuations which could adversely
affect the market price of the Common Shares without regard to the Company's
operating performance.

SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of the Common Shares in the public market
following the Offering could have an adverse effect on prevailing market prices
of the Common Shares. After the Offering, the shares
( shares if the Underwriters' over-allotment option is exercised
in full)

10
13

offered hereby will be freely tradable without restriction, while approximately
additional shares, ( shares if the Underwriters'
over-allotment option is exercised in full) will be eligible for sale pursuant
to Rule 144 promulgated under the Securities Act ("Rule 144"), subject to
certain volume and other limitations. However, Essef and other affiliates of the
Company, which upon the completion of the Offering will beneficially own an
aggregate of approximately Common Shares, have agreed with the
Underwriters not to sell any of their shares for a period of 90 days from the
date of this Prospectus without the prior consent of the Representatives;
provided, however, that, within that 90-day period, the Essef Group may effect
the Double Spin-Off. If the Double Spin-Off is completed, all Common Shares will
be freely tradable except for any Common Shares that are held by affiliates of
the Company or that are otherwise subject to the restrictions of Rule 144. See
"Shares Eligible for Future Sale."

COMPETITION AND NEW MARKET ENTRANTS

The swimming pool design, installation and renovation business is highly
fragmented. The Company estimates that in 1997, the top ten concrete swimming
pool installation companies' combined share of the concrete swimming pool market
was 16.9%. Like others in its industry, the Company competes generally with
sellers of luxury items such as boats and other leisure products for a share of
consumers' disposable income. The Company faces competition within its industry
from many regional and independent pool builders. While the Company believes
that its size, national presence and leading market share have enabled it to
achieve certain operating, marketing and administrative efficiencies which may
discourage new competitors from entering into its markets, there can be no
assurance that the Company will not encounter substantial competition from new
market entrants. Within a particular market, some of the Company's competitors
may be significantly larger and may have greater name recognition and greater
financial, marketing and other resources than the Company. There can be no
assurance that the Company will be able to compete effectively against such
competitors in the future. See "Business -- Competition."

DEPENDENCE UPON KEY PERSONNEL

The Company is dependent to a substantial extent upon the continuing
efforts and abilities of its executive officers. Furthermore, the Company may be
dependent upon the senior management of any business acquired in the future. If
any of the Company's key personnel become unable to continue in their present
roles, or if the Company is unable to attract and retain other qualified
employees, the Company's business and prospects could be adversely affected.
Although the Company has entered into employment agreements with three of its
executive officers and key employees, there can be no assurance that any
individual will continue in his present capacity with the Company for any
particular period of time. The Company does not intend to obtain key man life
insurance covering any of its executive officers or other members of senior
management.

For an interim period (not expected to exceed 18 months), Mr. Neidus will
continue to be employed by Essef and may spend up to 40% of his time on Essef
matters. There can be no assurance that Mr. Neidus' responsibilities to Essef
will not result in a conflict of interest or otherwise detract from his ability
to perform adequately all of his duties to the Company. See
"Management -- Executive Compensation" and "Relationship between the Company and
Essef."

ANTI-TAKEOVER EFFECT

Certain Ohio legislation applicable to the Company may delay, deter or
prevent a tender offer or takeover attempt for the Company. In addition, certain
provisions of the Amended and Restated Articles of Incorporation and Amended and
Restated Regulations which the Company will cause to become effective prior to
the sale of the Common Shares offered hereby may be deemed to have anti-takeover
effects which could delay, deter or prevent a tender offer or takeover attempt.
While the Board of Directors of the Company (the "Board of Directors") believes
that these provisions will have a positive effect on long-term shareholder
value, there can be no assurance that such provisions would not at some point in
time, depending on market and other conditions, adversely affect the market
price for the Common Shares. In addition, the Company will be authorized to
issue 1,000,000 preferred shares in one or more series, having terms fixed by
the Board of Directors without shareholder vote, including dividend or
liquidation rights that could be greater than or senior to the rights of
11
14

holders of Common Shares. Issuance of these shares could also be used as an
anti-takeover device. The Company has no current intentions or plans to issue
any such preferred shares. For a description of the Common Shares and a
discussion of possible effects of certain provisions of the Company's
organizational documents, see "Description of Capital Stock."

SUBSTANTIAL DILUTION

Purchasers of the Common Shares offered hereby will experience immediate
and substantial dilution in the net tangible book value of their shares. See
"Dilution."

EFFECT OF YEAR 2000

Many existing computer programs use only two digits to identify a year in
the date field. These programs were designed and developed without considering
the impact of the upcoming century change in the year 2000. Moreover, these
programs often are highly dependent upon historical or dynamic financial and
other data that, based on the programs' inability to distinguish between the
year 2000 and other century-end years, could be misreported or misinterpreted
and cause significant resulting errors. If not corrected, many computer
applications could fail when processing year 2000 data.

The Company's own operations are not highly dependent on computerized
recordkeeping, financial reporting or other systems. However, some of the
Company's vendors and other third parties with which the Company conducts
business may use computer systems that may be adversely affected by year
2000-related programming errors. Although the Company is evaluating its computer
systems and is endeavoring to identify and correct any year 2000-related
problems, there can be no assurance that all such problems will, in fact, be
identified and corrected by the Company or third parties. In addition, the
Company's business may be adversely affected if the Company or other
organizations with which the Company does business are unsuccessful in
completing in a timely manner the conversion to applications that can process
year 2000 dates. See "Management's Discussion and Analysis of Financial
Conditions and Results of Operations -- Year 2000 Matters".

FORWARD-LOOKING STATEMENTS

This Prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). Such forward-looking statements
include statements regarding the Company's growth strategy, marketing plans,
expectations concerning relevant markets, financial projections and planned use
of proceeds. Actual results could differ from those projected in any
forward-looking statements. The forward-looking statements are made as of the
date of this Prospectus and the Company assumes no obligation to update such
forward-looking statements, or to update the reasons actual results may differ
from those projected in the forward-looking statements. Numerous factors,
including without limitation factors mentioned in this "Risk Factors" section,
many of which are beyond the control of management of the Company, could cause
future results to differ substantially from those contemplated in such
forward-looking statements.

12
15

USE OF PROCEEDS

The net proceeds to the Company from the sale of the Common
Shares offered hereby (assuming an offering price of $ per share, and after
deducting estimated underwriting discounts and commissions and offering
expenses) are estimated to be approximately $20.0 million ($ million if
the Underwriters' over-allotment option is exercised in full).

It is anticipated that the Company will utilize the proceeds of the
Offering to reduce the intercompany debt the Company owes Essef in connection
with, among other things, the Company's May 1997 acquisition of the assets and
business of Original Anthony and Sylvan. As of June 30, 1998, the Company's
obligations to Essef totaled approximately $26.7 million. The Company's
indebtedness to Essef bears interest at a rate of 7.5% per annum and is payable
on demand. The balance of the indebtedness to Essef remaining after the Offering
and the application of the net proceeds therefrom will be evidenced by the
Revolving Note.

DIVIDEND POLICY

The Company has never paid any cash dividends to holders of its Common
Shares and does not anticipate paying any cash dividends in the foreseeable
future, but intends instead to retain any future earnings for reinvestment in
its business. Any future determination as to the payment of dividends will be
made at the discretion of the Board of Directors and will depend upon the
Company's operating results, financial condition, capital requirements, general
business conditions, the terms of its credit facility and such other factors as
the Board of Directors deems relevant.

13
16

CAPITALIZATION

The following table sets forth the capitalization of the Company at June
30, 1998 on an actual and adjusted basis after giving effect to (i) the for
stock split of the Common Shares, (ii) the sale of the Common
Shares offered hereby at an assumed initial public offering price of $ per
share, (iii) the application of the estimated net proceeds of $20.0 million as
described under "Use of Proceeds" and (iv) the effectiveness of the Revolving
Note between the Company and Essef. This table should be read in conjunction
with the Company's Financial Statements and the related notes thereto included
elsewhere in this Prospectus.

JUNE 30, 1998
----------------------
AS
ACTUAL ADJUSTED
------- -----------
(DOLLARS IN THOUSANDS)

Current maturities of long-term debt........................ $ 286 $ 286
Current portion of the Revolving Note....................... 0 6,750
------- -------
Total current debt................................ 286 7,036
Long-term debt.............................................. 380 380
Intercompany advance from Essef............................. 26,750 0
Shareholders' equity:
Preferred shares (1,000,000 shares authorized; no shares
outstanding)........................................... 0 0
Common Shares, no par value (49,000,000 shares authorized,
100 shares outstanding actual, as adjusted)(a).... 0 20,000
Retained earnings......................................... 5,639 5,639
------- -------
Total shareholders' equity........................ 5,639 25,639
------- -------
Total capitalization.............................. $33,055 $33,055
======= =======

- ---------------

(a) Excludes 1,000,000 Common Shares reserved for issuance under the 1998
Long-Term Incentive Plan.
See "Management -- 1998 Long-Term Incentive Plan" and additional Common
Shares which may be issued to Messrs. Neidus and Waldin in substitution for
certain of their respective Essef stock options.
See "Management -- Stock Options."

14
17

DILUTION

At June 30, 1998, the net book value of the Common Shares was $5,639,000,
or $56,390 per share. Net book value per share is determined by dividing net
book value (assets less liabilities and redeemable preferred shares) by the
number of outstanding Common Shares. At such date, the net tangible book value
of the Common Shares was negative $18,518,000, or negative $185,180 per share.
Net tangible book value per share is determined by dividing net tangible book
value (tangible assets less liabilities and redeemable preferred shares) by the
number of outstanding Common Shares.

After giving effect to the sale of the Common Shares offered hereby at an
assumed public offering price of $ per share and after deducting assumed
underwriting discounts and commissions and estimated offering expenses, the pro
forma net book value per Common Share and pro forma net tangible book value per
Common Share would have been $ and $ , respectively. This
represents an immediate increase to the existing shareholder in net book value
of $ per Common Share and in tangible net book value of $ per Common
Share, and an immediate dilution to new investors in net book value of $ per
Common Share and in tangible net book value of $ per Common Share. The
following table illustrates the dilution in net tangible book value per share:

Assumed initial public offering price per share............. $
Net tangible book value per share before the Offering.......
Increase in net tangible book value per share attributable
to new investors..........................................
Pro forma net tangible book value per share after the
Offering..................................................
Dilution per share to new investors......................... $
====

If the Underwriters' over-allotment option is exercised in full, the
increase in net tangible book value per share to the existing shareholder will
be $ per share and the dilution per share to new investors will be $ .

Based on the same assumptions utilized in the foregoing table, the
following table summarizes, on a pro forma basis as of June 30, 1998, the
difference between the number of Common Shares purchased from the Company, the
aggregate consideration paid and the average price per Common Share paid by the
existing shareholder and by new investors (based upon an assumed initial
offering price of $ per share for new investors):

SHARES PURCHASED TOTAL CONSIDERATION
-------------------- ------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- -------- ------- -------------

Existing Shareholder(1)(2)............ % $ % $
New Investors(1)...................... $
--------- ----- -------- -----
Total....................... % $ %
========= ===== ======== =====

- ---------------

(1) If the Underwriters' over-allotment option is exercised in full, then the
percentage of shares held by the existing shareholder will be reduced to
% of the total number of Common Shares to be outstanding after the
Offering, and the percentage of shares held by new investors will increase
to % of the total number of Common Shares to be outstanding after the
Offering. See "Principal Shareholder."

(2) Excludes 1,000,000 Common Shares reserved for issuance under the 1998
Long-Term Incentive Plan. See "Capitalization" and "Management -- 1998
Long-Term Incentive Plan" and additional Common Shares which may be issued
to Messrs. Neidus and Waldin in substitution for certain of their respective
Essef stock options. See "Management -- Stock Options." It is not possible
to specify how many Common Shares will be subject to such Company Options at
the time of the Double Spin-Off because, among other things, it is not known
how many unexercised and outstanding Essef Options will be held by Messrs.
Waldin and Neidus immediately prior to the completion of the Double
Spin-Off. If Company Options are exercised, further dilution to new
investors will occur.

15
18

SELECTED HISTORICAL FINANCIAL DATA

The following table sets forth selected historical operating results and
balance sheet data of the Company. The selected historical financial data as of
and for the years ended December 31, 1993 and 1994 were derived from the
Unaudited Financial Statements of Original Anthony and Sylvan prior to the
Original A&S Acquisition. The selected historical financial data as of and for
the years ended December 31, 1995 and 1996 and the four months ended April 30,
1997 were derived from the Audited Financial Statements of Original Anthony and
Sylvan prior to the Original A&S Acquisition. The selected historical financial
data as of and for the eight months ended December 31, 1997 have been derived
from the Audited Financial Statements of the Company. The selected financial
data for the two months ended June 30, 1997 and as of and for the six months
ended June 30, 1998 have been derived from the Unaudited Financial Statements of
the Company and include, in the opinion of management, all adjustments necessary
to present fairly the data for such periods. The results for the six months
ended June 30, 1998 are not necessarily indicative of the results to be expected
for the year ending December 31, 1998 or for any future period. The data
presented below should be read in conjunction with the Financial Statements and
the related notes thereto included elsewhere herein, the other financial
information included elsewhere herein and "Management's Discussion and Analysis
of Financial Condition and Results of Operations."

ORIGINAL A&S THE COMPANY
------------------------------------------------------- ----------------------------------------
FOR THE PERIOD FOR THE PERIOD
JANUARY 1, MAY 1, TWO MONTHS SIX MONTHS
YEARS ENDED DECEMBER 31, 1997 TO 1997 TO ENDED ENDED
-------------------------------------- APRIL 30, DECEMBER 31, JUNE 30, JUNE 30,
1993 1994 1995 1996(1) 1997 1997(2) 1997(2) 1998
------- ------- ------- -------- -------------- -------------- ---------- ----------
(DOLLARS IN THOUSANDS)

OPERATING RESULTS:
Net sales.................. $43,639 $56,418 $58,569 $112,167 $ 28,883 $98,829 $29,374 $70,455
Cost of sales.............. 30,621 40,899 42,454 82,018 22,291 70,814 20,497 50,597
------- ------- ------- -------- -------- ------- ------- -------
Gross profit............... 13,018 15,519 16,115 30,149 6,592 28,015 8,877 19,858
Selling expenses........... 7,288 8,662 9,373 18,875 6,073 13,578 3,596 11,439
Administrative expenses.... 4,404 4,876 5,695 9,049 3,980 5,598 1,420 5,632
------- ------- ------- -------- -------- ------- ------- -------
Total operating expenses... 11,692 13,538 15,068 27,924 10,053 19,176 5,016 17,071
------- ------- ------- -------- -------- ------- ------- -------
Income/(loss) from
operations............... 1,326 1,981 1,047 2,225 (3,461) 8,839 3,861 2,787
Interest and other
expense/(income)......... 15 (15) 101 354 303 1,637 387 1,026
------- ------- ------- -------- -------- ------- ------- -------
Income/(loss) before
taxes.................... 1,311 1,996 946 1,871 (3,764) 7,202 3,474 1,761
Income taxes
expense/(benefit)........ 470 725 342 704 (1,350) 2,649 1,251 675
------- ------- ------- -------- -------- ------- ------- -------
Net income/(loss)(3)....... $ 841 $ 1,271 $ 604 $ 1,167 $ (2,414) $ 4,553 $ 2,223 $ 1,086
======= ======= ======= ======== ======== ======= ======= =======
JUNE 30,
BALANCE SHEET DATA: 1993 1994 1995 1996 1997 1998
------- ------- ------- -------- ------- -------
Working capital............ $ 105 $ 99 $ (156) $ (3,636) $ 8 $ 879
Total assets............... 5,746 8,722 8,721 20,658 42,620 51,402
Total debt................. -- 881 949 9,790 24,638 27,416
Equity..................... 2,002 2,360 1,943 (3,402) 4,553 5,639

- ---------------

(2) The acquisition of the assets of Original Anthony and Sylvan by the Company
in May 1997 was accounted for as a purchase, with the purchase price being
allocated to the assets and liabilities based on the estimated fair value
thereof as of the date of the Original A&S Acquisition.

(3) Historical net income per share has not been presented as it would not be
meaningful because on , 1998, the Company declared a
for stock split of its Common Shares.

16
19

UNAUDITED PRO FORMA FINANCIAL DATA

The following Unaudited Pro Forma Financial Data have been derived by the
application of pro forma adjustments to the Company's historical financial data
included elsewhere herein. The Unaudited Pro Forma Statements of Income for the
periods presented give effect to the Offering as if it were consummated as of
the beginning of the earliest period presented. The adjustments are described in
the accompanying notes. The Unaudited Pro Forma Financial Data do not purport to
represent what the Company's results of operations actually would have been if
the Offering had been consummated on the date indicated, or what results will be
for any future period. The Unaudited Pro Forma Financial Data should be read in
conjunction with the financial statements and the related notes thereto included
elsewhere herein and "Use of Proceeds."

UNAUDITED PRO FORMA STATEMENTS OF INCOME

SIX MONTHS ENDED JUNE 30, 1998

PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)

Net sales................................................ $70,455 $70,455
Cost of sales............................................ 50,597 50,597
------- -------
Gross profit........................................... 19,858 19,858
Selling and administrative expenses...................... 17,071 $ 400(a) 17,471
------- ----- -------
Income from operations................................. 2,787 (400) 2,387
Interest and other expense/(income)...................... 1,026 (781)(b) 245
------- ----- -------
Income before income taxes............................. 1,761 381 2,142
Provision for income taxes............................... 675 137(c) 812
------- ----- -------
Net income............................................. $ 1,086 $ 244 $ 1,330
======= ===== =======
Pro forma weighted average shares outstanding basic and
diluted(d).............................................
Pro forma net income per share basic and diluted(d)......

The accompanying notes are an integral part of this statement.

17
20

YEAR ENDED DECEMBER 31, 1997

FOR THE PERIOD FOR THE PERIOD
JANUARY 1, 1997 MAY 1, 1997 TO COMBINED PRO FORMA
TO APRIL 30, 1997 DECEMBER 31, 1997 HISTORICAL ADJUSTMENTS PRO FORMA
----------------- ----------------- ---------- ----------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Net sales.................. $28,883 $98,829 $127,712 $127,712
Cost of sales.............. 22,291 70,814 93,105 93,105
------- ------- -------- --------
Gross profit............. 6,592 28,015 34,607 34,607
Selling and administrative
expenses................. 10,053 19,176 29,229 $ 800(a) 30,029
------- ------- -------- ------- --------
(Loss)/income from
operations............ (3,461) 8,839 5,378 (800) 4,578
Interest and other
expense/(income)......... 303 1,637 1,940 (1,723)(b) 217
------- ------- -------- ------- --------
(Loss)/income before
income taxes.......... (3,764) 7,202 3,438 923 4,361
(Benefit)/provision for
income taxes............. (1,350) 2,649 1,299 332(c) 1,631
------- ------- -------- ------- --------
Net (loss)/income........ $(2,414) $ 4,553 $ 2,139 $ 591 $ 2,730
======= ======= ======== ======= ========
Pro forma weighted average
shares outstanding basic
and diluted(d)...........
Pro forma net income per
share basic and
diluted(d)...............

The accompanying notes are an integral part of this statement.

NOTES TO UNAUDITED PRO FORMA FINANCIAL DATA

(a) The Company is an indirect, wholly owned subsidiary of Essef and, as such,
expects to incur additional costs as a stand-alone public company. The pro
forma financial statements have been adjusted to include these costs, which
are estimated to be $800,000 annually. These costs include incremental
managerial, legal, risk management and investor relations costs and the
costs associated with an independent Board of Directors. Upon completion of
the Offering and up to the date of the Double Spin-Off, the Company expects
to receive a portion of these additional services from Essef pursuant to an
Administrative Services Agreement it will have with Essef prior to the
Offering. The $800,000 pro forma adjustment includes the charges expected by
the Company under the Administrative Services Agreement.

(b) Estimated net proceeds from the Offering of $20.0 million will be used to
repay intercompany debt owing to Essef. Following completion of the Offering
the Company will enter into a Revolving Note with Essef as its primary
source of financing. The Revolving Note will provide for interest charges at
the costs incurred by Essef under its external financing agreement plus
0.25% (assumed rate of 7.50%). The pro forma adjustment recognizes interest
based on costs applicable under the Revolving Note and eliminates historical
interest expense charged on intercompany debt that will be repaid from the
proceeds of the Offering.

(c) Recognition of income taxes, at the Company's effective rate of 36.0%, on
the pro forma adjustments described in (a) and (b).

(d) Does not include options to purchase Essef Shares held by officers and
directors of the Company which may be substituted by stock options relating
to the Company's Common Shares at the date of the Double Spin-Off. See
"Management -- Stock Options" for a description of the stock option
substitution methodology.
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21

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Company's
Consolidated Financial Statements and related Notes contained elsewhere in this
Prospectus.

OVERVIEW

From May 1, 1997 through the Offering, the Company has operated as an
indirect wholly owned subsidiary of Essef. Prior to May 1, 1997, for the periods
presented, the Company's predecessor, Original Anthony and Sylvan, operated as a
wholly owned subsidiary of General Aquatics, Inc.

Following the Offering, pending the completion of the Double Spin-Off, the
Company will continue to be controlled directly or indirectly by Essef, but will
operate on a stand-alone basis. Accordingly, the Company expects that after this
Offering it will incur incremental recurring legal, audit, risk management and
administrative costs relating to operating as a stand-alone public company that
it did not experience as an indirect subsidiary of Essef. After this Offering,
the Essef Group will provide services to the Company pursuant to an
Administrative Services Agreement and a Tax Allocation Agreement to be entered
into following the consummation of this Offering. These agreements will provide
the basis for the allocation of shared expenses, and the reimbursement of direct
expenses which are currently reflected in the Company's financial statements. In
addition, upon completion of this Offering, the Company intends to execute and
deliver the Revolving Note to Essef pursuant to which Essef may loan funds to
the Company for working capital and to fund acquisitions. See "Relationship
between the Company and Essef" and "Unaudited Pro Forma Financial Data." The
financial information included in this Prospectus is not necessarily indicative
of the Company's future results of operations, financial position and cash
flows.

The principal components of the Company's expenses include the cost of
installation, the cost of products purchased from manufacturers and used in
installation, and operating expenses, which are primarily related to
administrative costs, occupancy, sales commissions and marketing.

RESULTS OF OPERATIONS

The following table shows, for the periods indicated, information derived
from the consolidated statements of operations of the Company, expressed as a
percentage of net sales for the periods presented.

AS A PERCENT OF NET SALES
-----------------------------------------------
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------- -----------------
COMBINED COMBINED
1995 1996 1997 1997 1998
----- ----- -------- -------- -----

Net sales..................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales................................. 72.5 73.1 72.9 73.4 71.8
----- ----- ----- ----- -----
Gross profit.................................. 27.5 26.9 27.1 26.6 28.2
Operating expenses:
Selling expenses............................ 16.0 16.8 15.4 16.6 16.2
Administrative expenses..................... 9.7 8.1 7.5 9.3 8.0
----- ----- ----- ----- -----
Total operating expenses............ 25.7 24.9 22.9 25.9 24.2
Income from operations........................ 1.8 2.0 4.2 0.7 4.0
Interest and other expense.................... 0.2 0.3 1.5 1.2 1.4
Income taxes.................................. 0.6 0.6 1.0 (0.2) 1.0
----- ----- ----- ----- -----
Net income.................................... 1.0% 1.1% 1.7% (0.3%) 1.6%
===== ===== ===== ===== =====

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22

SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO COMBINED SIX MONTHS ENDED JUNE 30,
1997

The following discussion compares the results of operations for the six
months ended June 30, 1998 with the combined results of operations for the six
months ended June 30, 1997. The combined results of operations have been
prepared without giving effect to pro forma adjustments. Original Anthony and
Sylvan was a wholly owned subsidiary of General Aquatics, Inc. during the four
months ended April 30, 1997.

Net Sales. Net sales increased by $12.2 million, or 20.9%, from $58.3
million for the six months ended June 30, 1997 to $70.5 million for the six
months ended June 30, 1998. The increase was attributable to the combination of
(i) increased sales at existing offices due generally to a stronger pool season
arising from favorable economic factors and weather conditions in certain
regions of the country; (ii) the opening of new sales offices; and (iii) the
Tango Acquisition which was completed in January, 1998.

Gross Profit. Gross profit increased by $4.4 million to $19.9 million, or
28.2% of net sales for the six months ended June 30, 1998, from $15.5 million or
26.6% of net sales for the six months ended June 30, 1997. The increase in gross
profit and gross profit margin was attributable to an increase in the number of
pools installed combined with an increase in the average selling price of the
Company's pools in certain markets. The gross profit margin improved also due to
tighter spending controls introduced after the acquisition of the Company by
Essef.

Operating Expenses. Operating expenses, consisting of sales, marketing and
administrative expenses increased by $2.0 million to $17.1 million or 24.2% of
net sales for the six months ended June 30, 1998, from $15.1 million or 25.9% of
net sales for the six months ended June 30, 1997. This improvement in operating
expenses as a percentage of net sales was primarily due to the leveraging of
certain fixed costs.

Interest and Other Expense. Interest expense increased by $336,000 to $1.0
million, or 1.5% of net sales, for the six months ended June 30, 1998 from
$690,000, or 1.2% of net sales, for the six months ended June 30, 1997. Interest
expense was charged on the intercompany payable between Essef and the Company
based on the average payable balance for the six months at a fixed rate of 7.5%
per annum. Interest expense for the same period in fiscal 1997 includes amounts
charged by Essef on the intercompany payable and interest on borrowings that
existed between Original Anthony and Sylvan and its parent, General Aquatics,
Inc.

Provision for Income Taxes. The Company's effective tax rate increased
from 34.1% for the six months ended June 30, 1997 to 38.3% for the six months
ended June 30, 1998, due to permanent differences in the basis of goodwill which
is being amortized for financial reporting and income tax purposes.

Net Income. As a result of the above items, combined net income increased
from a loss of $191,000 for the six months ended June 30, 1997 to income of $1.1
million for the six months ended June 30, 1998.

COMBINED YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996

The following discussion compares the results of operations for the year
ended December 31, 1997 prepared on a combined basis without giving effect to
pro forma adjustments, with the results of operations for the year ended
December 31, 1996, when Original Anthony and Sylvan was a wholly owned
subsidiary of General Aquatics, Inc.

Net Sales. Net sales increased by $15.5 million, or 13.8%, from $112.2
million for the fiscal year ended December 31, 1996 to $127.7 million for the
fiscal year ended December 31, 1997. The increase was attributable to the
combination of (i) the inclusion of a full year's results from the operations of
Anthony Pools which was acquired on March 6, 1996; (ii) the opening of new sales
offices; and (iii) increased sales at existing offices. The combination of
Anthony Pools with Sylvan Pools created the largest installer of concrete
swimming pools in the United States, and provided the Company with an entrance
into the California and Florida swimming pool markets.

Gross Profit. Gross profit increased by $4.5 million to $34.6 million, or
27.1% of net sales, for the fiscal year ended December 31, 1997 from $30.1
million or 26.9% of net sales for the fiscal year ended December 31, 1996.

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23

Operating Expenses. Operating expenses, consisting of sales, marketing and
administrative expenses increased by $1.3 million to $29.2 million, or 22.9% of
net sales, for the fiscal year ended December 31, 1997 from $27.9 million, or
24.9% of net sales, for the fiscal year ended December 31, 1996. The decrease in
operating expenses as a percentage of net sales was primarily attributable to
the inclusion of a full year of cost savings arising from the consolidation
activities undertaken following the acquisition of Anthony Pools.

Interest and Other Expense. Interest and other expense increased to $1.9
million, or 1.5% of net sales for the fiscal year ended December 31, 1997 from
$354,000, or 0.3% of net sales for the fiscal year ended December 31, 1996. For
the eight months ended December 31, 1997, the Company was charged $1.6 million
of interest on the intercompany payable owed by the Company to Essef based on
the average payable balance for the eight months at the rate of 10.25% per
annum. Interest expense for calendar 1996 and the first four months of 1997
relates primarily to borrowings that existed between Original Anthony and Sylvan
and General Aquatics, Inc.

Provision For Income Taxes. The Company's effective tax rate on a combined
basis increased from 37.6% in 1996 to 37.8% in 1997 due to permanent differences
in the basis of goodwill which is being amortized for financial reporting and
income tax purposes.

Net Income. As a result of the above items, combined net income increased
$972,000 from $1.2 million for the fiscal year ended December 31, 1996 to $2.1
million for the fiscal year ended December 31, 1997.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

Original Anthony and Sylvan was a wholly owned subsidiary of General
Aquatics, Inc. for the years ended December 31, 1996 and 1995. As such, the
results of operations presented herein have been prepared on a consistent basis
of accounting.

Net Sales. Net sales increased by $53.6 million, or 91.5%, from $58.6
million in 1995 to $112.2 million in 1996. The increase in sales was primarily
attributable to the acquisition of Anthony Pools which was completed on March 6,
1996.

Gross Profit. Gross profit increased by $14.0 million to $30.1 million, or
26.9% of net sales, for the fiscal year ended December 31, 1996 from $16.1
million, or 27.5% of net sales, for the fiscal year ended December 31, 1995, due
to higher net sales. Gross profit margin decreased due to the acquisition of
Anthony Pools which operated with a higher cost structure than Sylvan Pools.

Operating Expenses. Operating expenses, consisting of sales, marketing and
administrative expenses increased by $12.8 million to $27.9 million, or 24.9% of
net sales for the fiscal year ended December 31, 1996 from $15.1 million, or
25.7% of net sales for the fiscal year ended December 31, 1995. The decrease in
operating expenses as a percentage of net sales was attributable to cost savings
resulting from consolidation activities undertaken following the acquisition of
Anthony Pools. These activities included the closure of several offices where
duplicate facilities existed, reductions in personnel and consolidation of sales
and marketing efforts.

Provision for Income Taxes. The Company's effective tax rate increased to
37.6% for the fiscal year ended 1996 from 36.1% for the fiscal year ended
December 31, 1995.

Net Income. As a result of the above items, net income increased $563,000,
from $604,000 for the fiscal year ended December 31, 1995 to $1.2 million for
the fiscal year ended December 31, 1996.

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QUARTERLY RESULTS OF OPERATIONS

The following table presents certain unaudited quarterly financial
information for the ten consecutive quarters ended June 30, 1998. In the opinion
of the Company's management, this information has been prepared on the same
basis as the audited financial statements appearing elsewhere in this Prospectus
and includes all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the unaudited quarterly results set forth herein.
The Company expects that it will continue to experience significant fluctuations
in its quarterly operating results. In the past, these fluctuations have been
caused by a variety of factors, including the seasonality of the swimming pool
industry and sensitivity to fluctuations in the overall economy, which cannot be
predicted with any degree of certainty. The Company's quarterly results have in
the past been subject to fluctuations and, therefore, the operating results for
any quarter or quarters are not necessarily indicative of results for any future
period. See "Risk Factors -- General Economic Conditions" and " -- Seasonality
and Weather."

1996 1997 1998
------------------------------------- ------------------------------------- -----------------
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS)

Net sales..................... $ 7,988 $40,444 $38,061 $25,674 $14,166 $44,091 $44,831 $24,624 $18,040 $52,415
% of total year............... 7.1% 36.1% 33.9% 22.9% 11.1% 34.5% 35.1% 19.3% -- --
Gross Profit.................. 911 11,657 10,549 7,032 2,484 12,985 13,005 6,133 4,371 15,487
Income/(loss) from
operations.................. $(2,643) $ 2,724 $ 2,169 $ (25) $(3,199) $ 3,599 $ 4,306 $ 672 $(2,006) $ 4,793

The reported income from operations does not reflect all general and
administrative expenses which the Company expects to incur as a stand-alone
public company. See "Unaudited Pro Forma Financial Data" and related notes
thereto.

LIQUIDITY AND CAPITAL RESOURCES

Since its acquisition by Essef on May 1, 1997, the Company has relied upon
internal cash flow from operations and interest bearing advances from Essef to
provide the necessary financing for its operating and investing activities. The
Company's advances from Essef also include an allocation of the debt incurred by
Essef in connection with the acquisition of the Company. At June 30, 1998, these
advances aggregated $26.7 million. The Company intends to reduce the
intercompany advance from Essef with the proceeds from the Offering. Pursuant to
the terms of the Revolving Note to be executed by the Company and delivered to
Essef following the completion of this Offering, such advances will be repayable
to Essef on demand and bear interest at the Essef borrowing rate plus 0.25%. In
addition, the Company will also be required to reimburse Essef for its portion
of the costs that Essef incurs under Essef's bank revolving credit facility,
including but not limited to, commitment fees, letter of credit fees and agent
fees. At the time of the Double Spin-Off the Company intends to establish a
revolving credit facility with a syndicate of banks to replace the Revolving
Note.

For the six month period ended June 30, 1998, the Company generated
$866,000 of cash from operating activities as that period represented a
seasonally lower period of net income and higher working capital requirements.
Offsetting the cash flow from operating activities was $3.2 million of uses of
cash in investing activities to fund capital expenditures and acquisitions. Such
amounts were funded through an increase in the Company's intercompany debt with
Essef. Due to the changes in ownership and the capital structure of the
Company's business, cash flow data for previous periods are not presented as
period to period comparisons are not necessarily meaningful.

The Company believes that existing cash, cash equivalents, internally
generated funds and funds that will be advanced from Essef until the time of the
Double Spin-Off will be sufficient to meet the Company's presently anticipated
short-term working capital, capital expenditure and acquisition financing
requirements. To the extent that the Company needs additional capital resources,
the Company believes that it will have access to bank or other forms of debt
financing; however, there can be no assurance that additional financing will be
available on terms favorable to the Company or at all. See "Risk
Factors -- Availability of Acquisition Financing; Future Capital Needs."

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25

CYCLICALITY AND SEASONALITY

Although the Company expects to reduce the seasonality of its sales over
time by expanding both its presence in the sunbelt regions and its renovation
business, at present the Company's business remains highly seasonal.
Historically, approximately 70% of the Company's net sales have been generated
in the second and third quarters of the year, the peak season for swimming pool
installation and use. Moreover, the Company typically incurs net losses during
the first quarter 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 pool season, significantly affecting sales and
operating profit.

INFLATION

Generally, price increases are passed through to customers as they are
received by the Company and therefore reduce the negative effect of inflation.
The Company does not believe that inflation has had a significant impact on its
results of operations or financial condition for the periods presented.

YEAR 2000 MATTERS

In 1997, as part of an overall modernization and upgrade of its information
systems, the Company began preparing its computer systems and applications for
the date change in the year 2000. To date, this process has involved modifying
or replacing certain hardware and upgrading certain software and has not
involved material costs to the Company. Management believes that substantially
all of the necessary systems and applications changes will be completed by
mid-1999, that the Company's level of preparedness is appropriate and that the
amount of additional costs, if any, needed to address the year 2000 issue will
be immaterial.

The Company has initiated communications with certain of its largest
suppliers regarding year 2000 preparedness. However, management does not believe
that the Company would have any difficulty securing alternate sources of supply
in the event any of its current suppliers experience year 2000 difficulties. In
addition, because of the seasonal nature of the Company's business (which is
slowest in the first and fourth quarters of the calendar year), management
believes that any problems arising on January 1, 2000, either with the Company's
systems or the systems of its major suppliers, can be substantially remedied
before the start of the peak installation season.

The costs of the project and the date on which the Company believes it will
complete the year 2000 modifications are based on management's best estimates,
including the continued availability of certain resources, third party
modification plans and other factors. However, there can be no guarantee that
these estimates can be achieved and actual results could differ materially from
those anticipated. Specific factors that might cause such material differences
include, but are not limited to, the availability and cost of personnel trained
in this area, the ability to locate and correct all relevant computer codes and
similar uncertainties.

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BUSINESS

OVERVIEW

The Company was formed in 1997 to acquire the assets and business of
Original Anthony and Sylvan, the successor to the respective pool installation
businesses of Pennsylvania-based Sylvan Pools and California-based Anthony
Pools. Sylvan Pools was founded by Herman Silverman in 1946 and quickly grew to
become the leading pool installer in the Northeast, with operations stretching
out to the Southeast, Texas and Nevada. Anthony Pools was founded by Phil
Anthony in 1947 and eventually established itself as the largest pool company in
the United States and the first national company in its industry. In 1996, the
parent company of Sylvan Pools purchased Anthony Pools and combined the two
businesses under the name "Anthony & Sylvan." The combined entity, Original
Anthony and Sylvan, maintained the high standards of its predecessors and
established a reputation for quality, reliability and affordability that has
carried over to the Company.

The Company is the largest installer of concrete swimming pools in the
United States. Through its network of 39 sales offices serving 15 states, the
Company believes it has achieved the leading market share in 15 of the 24 major
metropolitan areas it serves. As a result of its longevity in the pool
installation business, the Company has a referral base of over 300,000 customers
and a depth of experience and expertise that is unmatched in the industry. These
factors, together with the Company's national reputation for quality, volume
purchasing ability and innovative sales techniques have enabled the Company to
establish a significant presence in each of its current geographic markets while
positioning itself for continued expansion into new markets through internal
growth and selective acquisitions.

The majority of the Company's pools range in price from $14,500 to $36,500.
Historically, the Company's sales have been seasonally strongest in the second
and third quarters and weakest in the first quarter. The Company built
approximately 4,100 pools in 1997 and 2,300 pools during the first half of 1998.
On a pro forma basis, after giving effect to the January 1998 Tango Acquisition
for 1997 and the August 1998 Andrews Acquisition for 1997 and the first half of
1998, the number of pools installed by the Company during such periods would
have been approximately 6,200 and 2,900, respectively.

Since 1993, the Company has been marketing renovation services to its past
installation customers in selected markets. The Company maintains a separate
sales and marketing staff of 20 people responsible for its renovation business
and intends to expand its marketing efforts to include an even wider base of
pool owners in new and existing markets. In 1997, revenues from renovations
totaled approximately $7.9 million, or 6.2%, of the Company's sales.

In addition to installing and renovating residential pools, the Company
operates (i) a commercial pool installation business in the Northeast focused
primarily on smaller hotel chains and country clubs, (ii) 16 retail locations
that sell chemicals, replacement parts, accessories, equipment and inflatables
and (iii) four field service operations that offer post-installation services
such as pool openings, closings and weekly maintenance. Sales from these
businesses accounted for $9.4 million, or 7.3%, of the Company's 1997 sales.

INDUSTRY

The Company estimates that the installation of swimming pools is a $3.5
billion per year industry in the United States. According to the National Spa &
Pool Institute, the total number of swimming pools installed annually in the
United States has grown from 121,000 in 1994 to 160,000 in 1997, a 9.8% compound
annual growth rate. In each of these years, the percentage of swimming pools
installed using formative structures made of concrete, vinyl liners and
pre-molded fiberglass has remained fairly consistent and in 1997 represented
68.8%, 28.7% and 2.5%, respectively, of total swimming pools installed. While
other sectors of the swimming pool business (such as manufacturing, distribution
and retailing of pool products and equipment) have undergone significant
consolidation in recent years, the installation industry has remained highly
fragmented. The Company estimates that in 1997, the top ten concrete swimming
pool installation companies installed approximately 18,600 such pools,
accounting for 16.9% of all concrete swimming pool installations and 11.6% of
all swimming pool installations in the United States that year. The Company
believes that, on a nationwide basis, it has the leading

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27

share of both the concrete swimming pool market and the total swimming pool
market, with an estimated 5.6% share of the concrete pool market and an
estimated 3.9% of the total pool market.

MARKETS

The Company operates in 24 metropolitan markets serving 15 states. In
general, the Company groups markets by geographic region. Differences between
regions are influenced most strongly by climate and demographics. The Company
believes it is well-positioned to take advantage of opportunities throughout the
United States.

In the sunbelt regions, where much of the Company's recent growth has
occurred, the season for pool installation, renovation and use extends
throughout all or most of the year. In addition, in the sunbelt regions, both
peak and average temperatures tend to be significantly higher than in other
areas of the country. As a result, swimming pools compete favorably with other
luxury items for consumers' disposable income and appeal to a broad
socio-economic customer base in these regions. In contrast to comparably sized
markets in other areas of the country, certain markets in the sunbelt regions
tend to have a higher number of pools (both per capita and overall) and less
variation in terms of pool size, cost and complexity. According to the U.S.
Census Bureau, many markets in the sunbelt regions have experienced high levels
of new housing construction and population growth in recent years and are
expected to continue to grow at a higher rate than most other areas of the
country.

In non-sunbelt regions, including areas of the northeast where the Company
traditionally has maintained a strong presence, the season for pool
installation, renovation and use is shorter, and both peak and average
temperatures are lower, than in the sunbelt regions. Although these regions tend
to have fewer pools (both per capita and overall) than the sunbelt regions, the
average non-sunbelt pool is larger, more elaborate and more expensive than the
average sunbelt pool.

COMPETITIVE STRENGTHS

The Company attributes its strong competitive position in the swimming pool
installation industry to, among other things:

Size, National Presence and Leading Market Share. The Company believes its
size, national presence and leading market share enable it, among other things,
to (i) benefit from operating efficiencies and maximize productivity, (ii)
attract, develop and retain the highest quality employees and independent
contractors and invest in state-of-the-art equipment, (iii) temper the effects
of cyclical and economic downturns and unseasonable weather through a
diversified geographic presence, (iv) implement national marketing strategies
and support a centralized management team and (v) attract desirable acquisition
candidates.

one-month training program upon joining the Company and receive periodic skills
training throughout their careers. The introduction of the laptop computer as a
selling tool in recent years has significantly enhanced the quality and
professionalism of the Company's in-home sales presentations. This technology
enables sales designers to utilize pre-programmed informational displays and
pricing worksheets to educate customers and make sales visits more interactive,
informative and successful.

GROWTH STRATEGY

The Company believes that its competitive strengths provide a platform for
profitable expansion. The Company's growth strategy includes the following
components:

Open New Sales Offices. The Company intends to open new sales offices in
existing markets where it believes it can enhance its current market share and
in new markets where its competitive strengths will permit it to achieve a
leading market share position. The Company has currently identified over 30
markets that meet its development or expansion criteria and intends to assess
these areas further to pinpoint the most attractive locations for new sales
offices and the best strategy for opening such offices. The Company believes the
most significant expansion opportunities may be found in certain sunbelt regions
and on the southeastern seaboard where the Company has little or no current
presence. Since January 1, 1997, the Company has opened eight new sales offices.

Pursue Acquisitions. The Company believes that it is well positioned to
make acquisitions of high quality pool installation companies in the fragmented
pool installation industry. As with its internal growth strategy, the Company
intends to pursue acquisition candidates in the markets it has targeted for
expansion. In keeping with this approach, in January 1998, the Company, which
was already the leading pool installer in Las Vegas, completed the Tango
Acquisition. In addition, in August 1998, the Company added new markets when it
acquired the assets of Pools by Andrews, Inc., one of the largest installers of
swimming pools in Florida with offices serving Miami, Ft. Lauderdale, Palm
Beach, Orlando, Jacksonville, Tampa and Fort Myers.

Develop Relationships with National and Regional Home Builders. As the
largest of the national pool installers, the Company is well positioned to
develop relationships with both national and regional home builders. The Company
currently has relationships with homebuilders in certain areas that enable it to
serve as their exclusive pool installation company. In new housing developments,
the cost of the pool is typically included in the homeowner's first mortgage,
and as such, the Company is paid at closing, after the pool has been completely
installed. The Company believes that its ability to forego progress payments on
a pool installation and accept a one-time payment at the time of the loan
closing provides it with a competitive advantage over smaller companies seeking
to provide similar services to large homebuilders. The Company believes that
significant opportunities exist to develop and expand upon relationships with
national and regional homebuilders in the future.

MARKETING AND SALES

The Company sells its products to a large number of customers, primarily
residential homeowners. The Company's principal sales activities are conducted
by a dedicated sales force of approximately 200 employees who have
responsibility for developing and maintaining customer relationships. The
Company's representative sales designer is 42 years old, college educated and
professionally trained, with more than five years of sales experience in the
industry. The Company requires all new sales designers to complete an intensive
one-month

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29

training program consisting of one week of national classroom instruction and
three weeks of ride-along training. Commissions and bonuses are paid based on
sales volume to encourage entrepreneurial spirit and reward individual
achievement.

Sales visits are conducted in the customer's home or at the Company office
nearest the customer's home. The introduction of the laptop computer as a
selling tool in recent years has significantly enhanced the quality and
professionalism of the Company's sales presentations and reinforced the
Company's image as an expert installer. This technology enables sales designers
to utilize pre-programmed informational segments and pricing worksheets to
educate customers and make sales visits more interactive, informative and
successful. During the sales presentation the sales designer discusses all
aspects of pool installation and provides the customer with information about
financing options. As a service to its customers, the Company maintains
relationships with a number of different lenders that provide financing for its
customers.

The Company's pricing policies are controlled at the corporate level and
are monitored versus the actual sales contracts written. Prices quoted to
customers by sales designers must fall into a specified range set at the
corporate office.

The Company does most of its advertising in local newspapers and Yellow
Pages. The Company has advertised, to a lesser extent, using radio, television,
billboards and direct mail and has also attracted buyers as a result of
referrals from previous customers and realtors, among others. The Company has an
internet home page located at www.anthony-sylvan.com which also provides a
source of high quality leads for the Company's sales designers.

INSTALLATION

The Company's field supervisors oversee all aspects of the installation
process. While the installation time for a pool varies by the level of
complexity, the Company's installation schedules generally range in duration
from 30 to 45 days. Company personnel act as schedulers, coordinating the
activities of the craftsmen and communicating this information to the customer.
During the installation process, the Company utilizes both Company employees as
well as subcontractors; however, the majority of the Company's labor base
consists of subcontractors. The use of subcontractors enables the Company to
minimize its investment in direct employee labor, capital, equipment and
inventory, thereby reducing its exposure to cyclical, seasonal or geographic
demand fluctuations for pool installation.

The field supervisor routinely visits the installation site to supervise
the performance of the crews and performs mandatory inspections during the
following four phases of the installation process, (i) excavation, (ii)
concrete, (iii) deck installation and (iv) plaster. When the installation is
complete, a "start-up crew" provides the customer with operating instructions
for the equipment as well as instructions regarding the on-going maintenance of
the pool. This team performs a quality check which ensures that everything is
working properly. The Company generally warrants the structural integrity of the
pool for as long as the customer owns the home. Equipment installed by the
Company is subject to the terms and conditions of the manufacturer's warranty.

The Company's local offices have primary responsibility for managing all
aspects of the installation process, including all related inventory management,
sales, field service, accounting and administrative functions. Purchasing is
generally done at the national level based on input from the local offices.

COMPETITION

The Company primarily faces competition from regional and local installers.
The Company believes that there are a small number of swimming pool companies
that compete with the Company on a national basis. Barriers to entry in the
swimming pool installation industry are relatively low.

The Company believes that the principal competitive factors in the pool
installation business are the quality and level of customer service, product
pricing, breadth and quality of products offered, ability to procure labor and
materials on a market-by-market basis from local and regional sources, financial
integrity and stability, and consistency of business relationships with
customers. The Company believes it competes favorably with respect to each of
these factors. Some geographic areas serviced by the Company, particularly the
sunbelt regions, tend to
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be more competitive than others. The Company regularly evaluates competitive
pressures on a market-by-market basis and from time-to-time may adjust selling
prices in a particular region in response to changing conditions.

PURCHASING AND PRINCIPAL SUPPLIERS

The Company regularly evaluates supplier relationships and considers
alternate sourcing as appropriate to assure competitive costs and quality
standards. The Company currently does not have long-term contracts with any of
its suppliers. However, the Company believes it has a good relationship with its
suppliers and, as a result, is offered volume discounts, rebates, favorable
return policies and promotional allowances.

Decisions relating to pricing, suppliers and product selection are
centralized at the Company's headquarters, with significant input from each of
the Company's locations. Decisions relating to inventory management are made
independently by each location using the data provided by the Company's
information systems.

FACILITIES

The Company currently operates 39 sales offices and 16 installation offices
in 13 states. The proximity of its sales offices to its installation offices
varies from market to market, based on the historical growth of the business and
various other considerations such as geography and demographics. The Company's
executive offices are located in Chardon, Ohio. The Company believes that no
single property is material to its operations and that alternate sites are
presently available at market rates.

LEGAL PROCEEDINGS

From time to time, the Company is involved in litigation and proceedings
arising in the ordinary course of its business. Although the outcome of
litigation and claims is uncertain, the Company does not believe that there are
any pending proceedings which could be expected to have a material adverse
effect on its financial condition or results of operations.

EMPLOYEES

At June 30, 1998, the Company employed (i) 609 persons on a full-time
basis, of whom 50 were salaried employees, 265 were hourly installation and
manufacturing employees, 119 were hourly administrative employees, and 175 were
commissioned sales personnel and (ii) 49 persons on a part-time basis, all of
whom were employed at the Company's retail stores. No employees are covered by
collective bargaining agreements. The Company believes it has satisfactory
relations with its employees.

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MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES

The directors and executive officers of the Company are as follows:

NAME AGE POSITION
---- --- --------

Stuart D. Neidus.......................... 47 Chairman of the Board, Chief Executive
Officer and Chief Financial Officer
Howard P. Wertman......................... 53 President
Richard M. Kelso.......................... 49 Executive Vice President
Edward W. Andrews III..................... 39 Vice President
Thomas J. Casey........................... 37 Vice President
Lawrence M. Mazzenga...................... 45 Vice President
Phillip A. Pascucci....................... 51 Vice President
Richard S. Wolff.......................... 33 Vice President
Mary Ann Jorgenson........................ 57 Director
Thomas B. Waldin.......................... 56 Director

Mr. Neidus has served as Chairman of the Board of Directors, Chief
Executive Officer and Chief Financial Officer of the Company since September
1998 and as a Director since May 1997. In addition, Mr. Neidus has served as
Executive Vice President and Chief Financial Officer of Essef since September
1996. Prior to that, from 1992-1996 Mr. Neidus served with Premier Farnell plc
(successor to Premier Industrial Corporation), most recently as Executive Vice
President. Prior to joining Premier Farnell plc, Mr. Neidus spent 19 years as an
independent public accountant with KPMG Peat Marwick, including eight years as a
partner.

Mr. Wertman has served as President of the Company since October 1995. He
previously served as Divisional Vice President of Sylvan Pools from 1990 to
1995. Mr. Wertman's career in the swimming pool industry began in 1973, and
since then he has served in various management positions with both Anthony Pools
and Sylvan Pools.

Mr. Kelso has served as Executive Vice President of the Company since 1996.
His experience in the pool industry includes service as Vice President of
Anthony Pools from 1989 to 1996. Prior to that, from 1979 to 1988 Mr. Kelso was
the General Manager of the Washington, D.C. division of Anthony Pools. His
career includes 23 years of pool service, all in management positions with
Anthony Pools.

Mr. Andrews has served as Vice President of the Company since August 1998,
following the Andrews Acquisition. Mr. Andrews was the founder of Pools by
Andrews, Inc., established in 1983, and served as its President for 15 years.
His more than 20 years of experience in the swimming pool industry includes
service as a General Manager of Andrews Gunite Company, a New England based
swimming pool builder.

Mr. Casey has served as Vice President of the Company since 1998 and as the
National Sales Manager since 1995. Prior to that, he served as Sales Manager and
a sales designer with Sylvan Pools from 1986 to 1995.

Mr. Mazzenga has served as Vice President of the Company since 1996. He
served as Vice President of Sylvan Pools from 1994 to 1996. Prior to that, from
1979 to 1994 he served in various operational and management positions with
Anthony Pools.

Mr. Pascucci has served as Vice President of the Company since 1997. Prior
to that, from 1992 to 1997 he served as General Manager of the Las Vegas
Division of Sylvan Pools. Mr. Pascucci has served in various operational and
management positions with Sylvan Pools during the period 1986-1992.

Mr. Wolff has served as Vice President of the Company since 1997. Prior to
that, Mr. Wolff served as Director of Finance of General Aquatics, Inc. He has
served as controller for various public and private companies and as an
independent public accountant with Kenneth Leventhal prior to his position with
General Aquatics, Inc.

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Ms. Jorgenson has served as a director of the Company since September 1998.
Ms. Jorgenson is a partner and head of the corporate practice in the law firm of
Squire, Sanders & Dempsey L.L.P., and has been associated with that firm since
1975. She is a director of the general partner of Cedar Fair, L.P., the owner of
five regional amusement parks. She is also a director of S2 Golf Inc., a
manufacturer and distributor of golf clubs and bags, and a director of
Continental Business Enterprises, Inc., an Ohio-based metal stamping company.

Mr. Waldin has served as a director of the Company since May 1997. Mr.
Waldin has served as Chief Executive Officer and President of Essef since 1990
and a Director since 1991.

COMMITTEES OF THE BOARD OF DIRECTORS

General. The Company's Amended and Restated Regulations will provide for a
minimum of three and a maximum of nine directors and divide the Board of
Directors into two classes, with regular three-year staggered terms. The number
of directors will be set at six. and will be
elected as Class I directors and will hold office until the 2000 annual
shareholders' meeting. will be elected as a Class II director and
will hold office until the 2001 annual shareholders' meeting and
have agreed to serve as Class II directors and will be elected as such by the
current directors upon the completion of this Offering. The vacancy on the Board
of Directors will remain until the Company identifies a qualified candidate for
such position. All officers of the Company serve at the pleasure of the Board of
Directors.

Committees. Immediately following the completion of this Offering, the
Company's Board of Directors will establish a Compensation Committee, an Audit
Committee, and an Executive Committee. The Executive Committee will be chaired
by Mr. Waldin, and the other members will be Mr. Neidus and Ms. Jorgenson.

The functions of the Compensation Committee include considering and
recommending to the Board of Directors and Company management the overall
compensation programs of the Company, reviewing and approving the compensation
payable to the senior management personnel of the Company, and reviewing and
monitoring the executive development efforts of the Company to assure
development of a core of management and executive personnel adequate for orderly
management succession. The Committee will also review significant changes in
employee benefits plans and stock related plans and serve as the "Committee"
under the Company's 1998 Long-Term Incentive Plan. The Compensation Committee
will consist of two independent members of the Board of Directors to be named
following the Offering, each of whom will be a "non-employee director" within
the meaning of Rule 16b-3 under the Exchange Act, and an "outside director"
within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code").

The Audit Committee will review the scope and results of the annual audit
of the Company's consolidated financial statements conducted by the Company's
independent accountants, the scope of other services provided by the Company's
independent accountants, proposed changes in the Company's financial and
accounting standards and principles, and the Company's policies and procedures
with respect to its internal accounting, auditing and financial controls. The
Audit Committee will also examine and consider other matters relating to the
financial affairs and accounting methods of the Company, including selection and
retention of the Company's independent accountants. The Audit Committee is also
responsible for reviewing all related party transactions and for monitoring
corporate policies and procedures with respect to the Company's ethics and
compliance program. The Audit Committee will consist of two independent members
of the Board of Directors to be named following the Offering, each of whom will
be an "independent director" within the meaning of the rules of the Nasdaq
National Market.

The Board of Directors may, from time to time, establish certain other
committees to facilitate its work.

Compensation. Non-employee directors of the Company will receive
reimbursement of reasonable expenses incurred in serving as a director. In
addition, pursuant to the Company's 1998 Long-Term Incentive Plan, each director
of the Company who is not an employee of the Company automatically receives on
the date such person first becomes a director a grant of nonqualified options to
purchase Common Shares, which will vest one-fifth on each
anniversary of the date of grant. In addition, following each annual meeting of
the Company's shareholders, each such outside director will receive an annual
grant of options to purchase an additional Common Shares, all of
which vest one-fifth on each anniversary of the date of grant.
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The exercise price of all such options is the fair market value at the time the
options are granted. In addition, outside directors will receive annual
compensation under the Company's deferred compensation plan in the form of a
number of Common Shares equivalent in value to $20,000. Directors who are
employees of the Company or Essef receive no compensation for their services as
directors.

The Company will enter into Indemnification Agreements with each of its
directors and executive officers that provide the maximum indemnification
allowed to directors and executive officers under the Ohio Revised Code, subject
to certain exceptions. In addition, as authorized by the Company's Amended and
Restated Regulations and the Ohio Revised Code, the Indemnification Agreements
will provide generally that the Company will advance expenses incurred by
directors and executive officers in any action or proceeding as to which they
may be entitled to indemnification, subject to certain exceptions.

EXECUTIVE COMPENSATION

The following table sets forth the total compensation paid by Essef to the
Chief Executive Officer and by the Company to the other four most highly
compensated executive officers of the Company who received an annual salary and
bonus in excess of $100,000 (hereafter collectively referred to as the "Named
Executive Officers") for services rendered during 1997.

SUMMARY COMPENSATION TABLE(1)

ANNUAL COMPENSATION
-------------------- OTHER
YEAR SALARY BONUS COMPENSATION(3)
---- -------- -------- ---------------

Stuart D. Neidus, Chairman of the Board, Chief
Executive Officer and Chief Financial
Officer(2)................................... 1997 $200,000 $146,061 $9,000
Howard P. Wertman, President(4)................ 1997 170,000 132,997 8,142(5)
Richard M. Kelso, Executive Vice
President(4)................................. 1997 129,038 81,244 7,833
Thomas J. Casey, Vice President(4)............. 1997 100,000 33,950 6,026
Lawrence M. Mazzenga, Vice President(4)........ 1997 91,000 25,000 7,543

- ---------------

(1) Since the Company was not a reporting company during the three immediately
preceding fiscal years, only the information with respect to the most recent
completed fiscal year is noted in the Summary Compensation Table.

(2) Represents amounts earned by Mr. Neidus in his capacity as Executive Vice
President and Chief Financial Officer of Essef. Such amounts were paid by
Essef.

(3) Includes for each named officer matching contributions under either Essef's
or the Company's 401(k) Profit Sharing Plan.

(4) All compensation shown for these officers was paid by Original Anthony and
Sylvan for the period January 1, 1997 through May 1, 1997, and by the
Company starting on May 2, 1997 through December 31, 1997.

(5) Such amount does not include compensation earned in connection with the sale
of Original Anthony and Sylvan.

STOCK OPTIONS

Grants and Exercises. There were no grants of stock options by the Company
or Essef to any of the Named Executive Officers, and no exercises of Essef
Options (defined below) or Company Options (defined below) by any of the Named
Executive Officers, during the Company's last completed fiscal year.

Replacement of Outstanding Essef Options. As of August 11, 1998, Mr. Waldin
had 2,372,074 options to purchase Essef Common Stock ("Essef Options") at a
weighted average exercise price of $0.87 per share. As of the same date, Mr.
Neidus had 302,500 Essef Options at a weighted average exercise price of $7.23
per share. Subject to the substitution of the Essef Options described below, if
the Double Spin-Off is completed, the number of Essef Options held by Messrs.
Waldin and Neidus and the exercise price of such Essef Options will be adjusted

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in accordance with the following formulas to reflect the portion of the value of
their existing Essef Options allocable to the Company. It is not possible to
specify how many Common Shares will be subject to such Company Options at the
time of the Double Spin-Off because it is not known (i) how many unexercised and
outstanding Essef Options will be held by Messrs. Waldin and Neidus immediately
prior to the completion of the Double Spin-Off (ii) what the Essef Trading Price
and the Company Trading Price will be, and (iii) how many Essef Options Mr.
Neidus will elect for substitution. If Company Options are exercised further
dilution to new investors will occur.

REPRICING OF ESSEF OPTIONS:

Essef Trading Price
New Essef Option Old Essef Option After Double Spin-Off
Exercise Price = Exercise Price X ---------------------------
Essef Trading Price
Before Double Spin-Off

Essef Trading Price
Old Essef Before Double Spin-Off
New Essef Options* = Number Of Options X ---------------------------
Essef Trading Price
After Double Spin-Off

* Subject to reduction for issuance of Company Options described below.

Notwithstanding the foregoing, the Company, Essef and Messrs. Waldin and
Neidus have agreed that any additional Essef Options which would have been
issued as a result of the aforementioned adjustment will be automatically
substituted with stock options to purchase Common Shares ("Company Options") in
accordance with the following formula:

COMPANY OPTIONS TO BE ISSUED:

Company Trading Price
Company Option New Essef Option Before Double Spin-Off
Exercise Price = Exercise Price X ---------------------------
Essef Trading Price
After Double Spin-Off

Essef Trading Price
New Essef Options After Double Spin-Off
Substituted Company Options = -Old Essef Options X ---------------------------
Company Trading Price
Before Double Spin-Off

For purposes of the above calculations, "Trading Price" of Essef Shares or
the Company's Common Shares, as the case may be, means the average closing price
of such shares on the Nasdaq National Market for the 20 consecutive business
days preceding or following the Double Spin-Off, as applicable.

In addition, Mr. Neidus may elect at any time prior to the issuance of the
substituted Company Options, to have a portion of his remaining old Essef
Options substituted with Company Options.

EMPLOYMENT AGREEMENTS

The Company currently has employment agreements with three of its executive
officers, Messrs. Neidus, Wertman and Kelso.

Each such agreement expires on December 31, 2000, unless terminated or
extended according to its terms. As compensation for his service as Chief
Executive Officer and Chief Financial Officer of the Company, Mr. Neidus will
receive an annual base salary of at least $220,000 and performance-based bonuses
targeted at 60% of his annual salary. In addition, at the time of the Offering,
Mr. Neidus will be granted options to purchase 100,000 Common Shares at an
exercise price equal to the public offering price exercisable 20% per year
following the Offering Date. As compensation for their service as President and
Executive Vice President, respectively, Messrs. Wertman and Kelso will receive
annual base salaries of $175,000 and $137,500, respectively, and
performance-based bonuses targeted at 50% of their respective annual salaries.

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If any of Messrs. Neidus, Wertman or Kelso is terminated by the Company
without "cause," he will be entitled to receive salary for a period of one year
(or, in the case of Mr. Neidus, until the later of one year or December 31,
2000), along with the pro rata portion of any bonus payable for such fiscal
year. Messrs. Wertman and Kelso also would receive the right to exercise, for
three months, any Company Options granted to them that are exercisable. Mr.
Neidus will be entitled to exercise, for one year, any Company Options granted
to him whether or not exercisable. Mr. Neidus will be deemed to have been
terminated without "cause" if, among other things, the Company at any time
materially changes his duties and responsibilities without his consent.

Upon a "change in control" of the Company, Mr. Neidus shall have the right
to terminate his employment with the Company and receive the same rights and
benefits to which he would be entitled upon his termination without "cause". The
Double Spin-Off is not included as a "change in control" under Mr. Neidus'
employment agreement.

1998 LONG-TERM INCENTIVE PLAN

All key employees and directors of the Company and its direct and indirect
subsidiaries and other persons whose selection the Compensation Committee
determines to be in the best interests of the Company would be eligible to
receive awards under the 1998 Long-Term Incentive Plan ("the 1998 Plan"),
including the executives named in the Summary Compensation Table.

The 1998 Plan will be administered by the Compensation Committee, which
will have authority to interpret the 1998 Plan, to grant waivers of 1998 Plan
restrictions and to adopt such rules, regulations and policies for carrying out
the 1998 Plan as it may deem necessary or proper in order to further the
purposes of the 1998 Plan. In particular, the Compensation Committee will have
the authority to (i) select participants, (ii) determine the number and type of
awards to be granted, (iii) determine the terms and conditions, not inconsistent
with the terms of the 1998 Plan, to any award granted, (iv) interpret the terms
and provisions of the 1998 Plan and any award granted, (v) prescribe the form of
any agreement or instrument executed in connection with any award and (vi)
establish, amend and rescind such rules, regulations and policies for the
administration of the 1998 Plan as it may deem advisable from time to time.

Awards under the 1998 Plan may be in the form of stock options (either
"incentive stock options" within the meaning of Section 422 of the Code or
nonstatutory stock options), stock appreciation rights, restricted shares,
performance shares or stock awards.

Stock options will be exercisable in whole or in such installments and at
such times and upon such terms as may be determined by the Compensation
Committee, provided that no stock options will be exercisable more than ten
years after the date of grant. The exercise price of any option may not be less
than the fair market value of a Common Share on the date of the grant.
Participants may pay the exercise price of a stock option in cash, Common
Shares, or a combination of cash and Common Shares.

Stock appreciation rights ("SARs") entitle the recipient to receive a
payment, in cash or Common Shares, equal to the appreciation in market value of
a stated number of Common Shares from the exercise price to the fair market
value on the date of exercise or surrender. SARs may be granted either
separately or in conjunction with other awards granted under the 1998 Plan. Any
SAR related to a nonstatutory stock option may be granted at the same time such
option is granted or at any time thereafter before exercise or expiration of
such option. Any SAR related to an incentive stock option must be granted at the
same time such option is granted. Any SAR related to an option will be
exercisable only to the extent the related option is exercisable and such SAR
(or the applicable portion thereof) will terminate and will no longer be
exercisable upon the termination or exercise of the related option. Similarly,
upon the exercise of a SAR as to some or all of the Common Shares covered by a
related option, the related option shall be canceled automatically to the extent
of the SARs exercised, and such Common Shares will not thereafter be eligible
for grant.

Restricted shares may be awarded in such numbers and at such times as the
Compensation Committee determines. Restricted shares will be subject to such
terms, conditions or restrictions as the Compensation Committee deems
appropriate including, but not limited to, restrictions on transferability,
requirements of continued employment, individual performance or financial
performance of the Company. The period of vesting

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and forfeiture restrictions will be established by the Compensation Committee at
the time of grant, except that no restriction period may be less than 12 months.
During the period in which any restricted shares are subject to forfeiture
restrictions, the Compensation Committee may, in its discretion, grant to the
participant to whom such shares have been awarded all or any of the rights of a
shareholder with respect to such restricted shares, including the right to vote
such shares and to receive dividends with respect to such shares.

Performance shares may be awarded in the form of Common Shares that are
earned only after the attainment of predetermined performance targets as
established by the Compensation Committee at the time an award is made. A
performance target shall be based upon one or any combination of the following:
(i) revenues of the Company; (ii) operating income of the Company; (iii) net
income of the Company; (iv) earnings per Share; (v) the Company's return on
equity; (vi) cash flow of the Company; (vii) Company shareholder total return;
(viii) return on assets; (ix) return on investment; (x) asset turnover; (xi)
liquidity; (xii) capitalization; (xiii) stock price; (xiv) expenses; (xv)
operating profit and margin; (xvi) retained earnings; (xvii) market share;
(xviii) sales to targeted customers; (xix) customer satisfaction; (xx) quality
measures; (xxi) productivity; (xxii) safety measures; or (xxiii) educational and
technical skills of employees. The Compensation Committee shall be permitted to
make adjustments when determining the attainment of a performance target to
reflect extraordinary or nonrecurring items or events, or unusual nonrecurring
gains or losses identified in the Company's financial statements, as long as any
such adjustments are made in a manner consistent with Section 162(m) of the Code
to the extent applicable. Awards of performance shares made to participants
subject to Section 162(m) of the Code are intended to qualify under Section
162(m) and provisions of such awards will be interpreted in a manner consistent
with that intent to the extent appropriate. The foregoing provisions of this
paragraph are also applicable to awards of restricted shares to the extent such
awards of restricted shares are subject to the financial performance of the
Company. At the end of the applicable performance period, performance shares
will be converted into Common Shares (or cash or a combination of shares and
cash) and distributed to participants based upon the applicable performance
entitlement. Award payments made in cash rather than the issuance of shares will
not, by reason of such payment in cash, result in additional shares being
available under the 1998 Plan.

Stock awards may be made in Common Shares or on a basis valued in whole or
in part by reference to, or otherwise based upon, Common Shares. Stock awards
will be subject to conditions established by the Compensation Committee.

Subject to adjustment in the event of any change in the number of
outstanding shares by reason of a reorganization, recapitalization, stock split,
stock dividend, combination or exchange of shares, merger, consolidation or any
change in the corporate structure or capital stock of the Company, the aggregate
number of Common Shares which may be awarded under the 1998 Plan shall be
1,000,000 shares. No more than 1,000,000 shares shall be cumulatively available
for the grant of incentive stock options under the 1998 Plan and no more than
200,000 shares shall be the subject of awards to any individual participant in
any one calendar year. Shares issuable under the 1998 Plan may consist of
authorized and unissued Common Shares or Common Shares held in treasury.

In the event of a Change in Control (as defined in the 1998 Plan) of the
Company, and except as the Board may expressly provide otherwise, (i) all stock
options or SARs then outstanding will become fully exercisable as of the date of
the Change in Control, whether or not then otherwise exercisable, (ii) all
restrictions and conditions of all awards of restricted shares then outstanding
shall be deemed satisfied as of the date of the Change in Control, and (iii) all
awards of performance shares will be deemed to have been fully earned as of the
date of the Change in Control.

The Board may amend, suspend or terminate the 1998 Plan at any time,
provided that no such action shall be taken that would impair the rights under
an outstanding award without the participant's consent. Similarly, the Board may
amend the terms of any outstanding award, prospectively or retroactively, but no
such amendment shall impair the rights of any participant without the
participant's consent and no such amendment shall have the effect, with respect
to any employee subject to Section 162(m) of the Code, of increasing the amount
of any award from the amount that would otherwise be payable pursuant to the
formula and/or goals previously established for such participant.

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Except as may be otherwise provided in the relevant award agreement, no
award or any benefit under the 1998 Plan will be assignable or transferable, or
payable to or exercisable by, anyone other than the participant to whom it was
granted.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE 1998 PLAN

The following summary generally describes the principal federal income tax
consequences under current tax laws of certain events under the 1998 Plan. The
summary is general in nature and is not intended to cover all tax consequences
that may apply to a particular participant or to the Company, nor does it
describe foreign, state or local tax consequences.

No income will result to a participant upon the grant or exercise of an
incentive stock option ("ISO") provided that (i) there is no disposition of
stock received upon exercise of an ISO within two years from the date the ISO is
granted or within one year from the date the ISO is exercised (the "ISO holding
periods"); and (ii) the participant is an employee of the Company or a
subsidiary of the Company at all times during the period commencing on the date
of grant and ending on the date three months (or one year in the case of a
participant who is totally and permanently disabled) prior to the date of
exercise.

In the event of a disposition of stock received upon exercise of an ISO
after the ISO holding periods have been satisfied, any gain or loss, equal to
the difference between the amount realized upon such disposition and the option
price, generally will be taxable as capital gain or loss. In the event of a
disposition of stock received upon exercise of an ISO prior to the expiration of
the ISO holding periods, the participant will recognize ordinary income equal to
the excess of the fair market value of such stock at the time of exercise (or
the amount realized upon such disposition, if less) over the option price. If
the amount realized upon such disqualifying disposition exceeds the fair market
value of such stock at the time of exercise, the excess will be taxable as
capital gain.

No deduction is allowable to the Company upon the grant or exercise of an
ISO. In the event that a participant recognizes ordinary income as a result of a
disposition of stock received upon exercise of an ISO prior to the expiration of
the ISO holding periods, the company generally will be entitled to a deduction
in an amount equal to the ordinary income recognized by the participant.

No income is recognized upon the grant of a nonstatutory stock option to a
participant. The participant recognizes ordinary income upon exercise of the
nonstatutory stock option equal to the excess of the fair market value of the
stock received upon exercise of the stock option on the date of exercise over
the option price. Such ordinary income is subject to withholding if the
participant is an employee. The participant's tax basis in these shares will be
their fair market value when purchased. On subsequent sale of such shares, gain
or loss will be recognized in an amount equal to the difference between the tax
basis thereof and the amount realized on such sale.

A participant will not be taxed upon the award of an SAR. Upon exercise of
the SAR, the participant will recognize ordinary income equal to the amount of
cash received and the Company will be entitled to a corresponding deduction. In
the event a participant receives shares upon the exercise of an SAR, the
participant will recognize ordinary income equal to the value of the shares at
such time. If the participant is an employee, any ordinary income recognized
upon the exercise of an SAR is treated as wages subject to withholding.

A participant generally will not recognize taxable income upon the grant of
restricted shares, and the recognition of any income will be postponed until the
time that the restrictions on the shares lapse, at which time the participant
will recognize ordinary income (subject to withholding if the participant is an
employee) equal to the fair market value of the restricted shares at the time
that such restrictions lapse. A participant may elect to be taxed at the time of
the grant of restricted stock and, if this election is made, the participant
will recognize ordinary income equal to the fair market value of the restricted
shares at the time of grant determined without regard to any of the restrictions
thereon.

When performance shares are earned and stock is issued therefor, a
participant will realize ordinary income (subject to withholding if the
participant is an employee) equal to the fair market value of the performance
shares.

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A participant will recognize ordinary income upon the receipt of a stock
award (other than an award of performance shares or restricted shares) equal to
the fair market value of such stock on the date of such award. If the
participant is an employee, any ordinary income recognized as a result of a
stock award is treated as wages subject to withholding.

The Company generally will be entitled to a deduction equal to the ordinary
income recognized by the participant in the same taxable year in which the
participant recognizes ordinary income with respect to nonstatutory stock
options, restricted stock, performance shares, stock appreciation rights and
stock awards.

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RELATIONSHIP BETWEEN THE COMPANY AND ESSEF

RELATIONSHIP AND TRANSACTIONS PRIOR TO THE OFFERING

The Company is an indirect wholly owned subsidiary of Essef. Essef provides
certain financial, management, and other services to its direct and indirect
subsidiaries, including the Company. Until the consummation of this Offering,
Essef will continue to provide those services and others to the Company on an
informal basis. See "Risk Factors -- Relationship with Essef; Absence of History
as a Stand-Alone Company."

The Company purchases certain pool equipment and other supplies from the
Essef Group on an arm's length basis. During the period from January 1, 1997 to
June 30, 1998, such purchases totaled approximately $10.6 million. Although the
Company expects to continue to purchase equipment and other supplies from the
Essef Group following the Offering, the Company is not bound by any formal
supply agreement and may discontinue this relationship with the Essef Group at
any time. Management believes that there are currently a number of other
suppliers from which the Company could procure such equipment and supplies upon
comparable terms. See "Business -- Purchasing and Principal Suppliers."

RELATIONSHIP AND TRANSACTIONS FOLLOWING THE OFFERING

Certain aspects of the Company's relationship with Essef following the
completion of the Offering will be defined by a Revolving Note, a Company
Indemnification Agreement, a Tax Allocation Agreement and an Administrative
Services Agreement. These documents have been negotiated in the context of a
parent-subsidiary relationship and therefore are not the result of negotiations
between independent parties. It is the intention of the Company and Essef that
such documents and the transactions provided for therein, taken as a whole,
should accommodate the parties' interests in a manner that is fair to both
parties. The parties intend that such documents and transactions provide fair
market value to them on terms no less favorable to the Company than would
otherwise be available from unaffiliated parties. The documents summarized in
this section have been filed as exhibits to the Registration Statement of which
this Prospectus forms a part, and the following summaries are qualified in their
entirety by reference to the agreements as filed.

Revolving Note. The Company intends to execute and deliver a Revolving Note
to Essef upon the completion of this Offering. Essef is not legally obligated to
provide financing to the Company pursuant to such Revolving Note and may, for
reasons not relating to the Company, be unwilling or otherwise unable, under the
terms of its bank credit facility (of which the Company is a guarantor), to
extend new loans to the Company in the future. Terms of Essef's credit facility
that could limit Essef's willingness or ability to make loans to the Company
include limits on aggregate borrowing and affirmative and negative covenants. In
addition, Essef has other subsidiaries to which it may extend loans, thereby
reducing the funds it has available to loan to the Company. Pursuant to the
terms of the Revolving Note, any advances made by Essef to the Company
thereunder will be repayable to Essef on demand and bear interest at the Essef
borrowing rate plus 0.25%. In addition, the Company will also be required to
reimburse Essef for its portion of the costs that Essef incurs under Essef's
bank revolving credit facility, including but not limited to, commitment fees,
letter of credit fees and agent fees. At the time of the Double Spin-Off the
Company intends to establish a revolving credit facility with a syndicate of
banks to replace the Revolving Note.

Company Indemnification Agreement. The Company and Essef intend to enter
into an indemnification agreement (the "Company Indemnification Agreement") upon
the completion of this Offering in which each party will agree to indemnify and
hold harmless the other from and against certain obligations and contingent
liabilities.

Tax Allocation Agreement. The Company will be included in Essef's
consolidated group (the "Group"), and thus in Essef's consolidated tax returns,
for federal income tax purposes so long as Essef beneficially owns at least 80%
of the total voting power and value of the outstanding stock of the Company. For
periods during which the Company is included in Essef's consolidated federal
income tax returns or state consolidated or combined returns, the Company will
be required, pursuant to a tax allocation agreement ("Tax Allocation Agreement")
that the Company and Essef intend to execute, to make a payment to Essef in an
amount generally equal to the amount of federal and state taxes that the Company
would have incurred if it had filed separate federal and state
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40

tax returns. The Company will be responsible for its own separate tax
liabilities that are not determined on a consolidated or combined basis. The
Company will also be responsible in the future for any increases to the
consolidated tax liability of the Group that are attributable to the Company for
prior periods during which the Tax Allocation Agreement is in effect.

Each corporation that is a member of the Group during any portion of the
Group's taxable year is jointly and severally liable to the Internal Revenue
Service (the "Service") for the federal income tax liability of the entire Group
for that year. Accordingly, if the Group's federal income tax liability for a
taxable year in which the Company is a member of the Group is not paid in full
to the Service, the Company would be potentially liable to the Service for an
amount up to and including the Group's entire unpaid federal income tax
liability, regardless of the amount of that liability that is allocable to the
Company and regardless of any provisions of the Tax Allocation Agreement to the
contrary. In such event, the Company would be entitled to seek indemnification
from Essef for the amount that the Company was not required to pay pursuant to
the Tax Allocation Agreement.

Administrative Services Agreement. The Company and Essef intend to enter
into an administrative services agreement (the "Services Agreement") upon the
completion of this Offering pursuant to which Essef will continue to provide
limited services to the Company, including financial, risk management, tax,
employee benefits, legal and management services. The Company estimates its
basic costs under the Services Agreement will be approximately $600,000
annually. Such amount is intended to reimburse Essef for those incremental costs
that will be incurred by Essef, on behalf of the Company, as a result of
Company's becoming a stand-alone public company. In addition, Essef will also
charge the Company on an hourly basis for certain non-recurring work performed
for the Company by Essef management. The actual expenditures will depend on
numerous factors, some of which are beyond the Company's control. There can be
no assurance that the actual expenses will not be significantly greater than
anticipated. See "Risk Factors -- Relationship with Essef; Absence of History as
a Stand-Alone Company."

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PRINCIPAL SHAREHOLDER

Prior to the Offering, all of the outstanding Common Shares will be owned
by the Essef Group. Upon the completion of the Offering, the Essef Group will
own approximately % of the Common Shares then outstanding ( % if the
Underwriters' over-allotment option is exercised in full). Accordingly, Essef
will be able to elect the entire Board of Directors of the Company and to
control the vote on matters submitted to a vote of the Company's shareholders,
including extraordinary corporate transactions. See "Risk
Factors -- Relationship with Essef; Absence of History as a Stand-Alone
Company."

The following table sets forth certain information with respect to the
beneficial ownership of Common Shares and/or Essef's common shares ("Essef
Shares") by: (i) each of the Named Executive Officers and directors, (ii) each
other person (or group of persons) who is known by the Company to own
beneficially 5% or more of the Common Shares or the Essef Shares, and (iii) all
directors and executive officers of the Company as a group.

COMMON SHARES COMMON SHARES
BENEFICIALLY OWNED BENEFICIALLY OWNED ESSEF SHARES
IMMEDIATELY PRIOR IMMEDIATELY AFTER BENEFICIALLY
TO OFFERING OFFERING OWNED*
NAME AND ADDRESS OF ------------------ ------------------- ------------
BENEFICIAL OWNER(1)(2) NUMBER PERCENT NUMBER PERCENT(3) NUMBER PERCENT
---------------------- ------- -------- ------ ---------- ---------- -------

Essef Group(4)................... 100% % NA
Mary Ann Jorgenson(5)............ -- -- 3,390,893 28.76%
Thomas B. Waldin(6)(7)........... -- -- 2,493,371 16.68
Stuart D. Neidus(6).............. -- -- 62,700 **
Howard P. Wertman................ 5,600 **
Thomas J. Casey.................. 700 **
All directors and executive
officers of the Company as a
group (10 persons)(4).......... -- -- 5,964,192 39.91%

- ---------------

* Based on 11,788,197 Essef Shares outstanding as of August 27, 1998.

** Less than 1.0%

(1) The address of each of the executive officers and directors is c/o Anthony &
Sylvan Pools Corporation, 220 Park Drive, Chardon, Ohio 44024.

(2) Unless otherwise indicated, the Company believes that the beneficial owner
has sole voting and dispositive power over these shares. Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission which generally attribute beneficial ownership of
securities to persons who possess sole or shared voting power and/or
investment power with respect to those shares.

(3) Assumes no exercise of the Underwriters' over-allotment option.

(4) If the Underwriters' over-allotment option is exercised in full, the Essef
Group will be the beneficial owner of % of the Common
Shares outstanding after the Offering, and all directors and executive
officers as a group will be the beneficial owners of % of the Common
Shares outstanding after the Offering.

(5) Mary Ann Jorgenson shares voting and dispositive power as co-trustee and is
also beneficial owner of: (a) 83,732 Essef Shares held by six trusts of
which she is the sole trustee with sole voting and dispositive power; (b)
828,984 Essef Shares held by two trusts of which she is one of three
trustees with shared voting and dispositive power; (c) 80,828 Essef Shares
held by a trust of which she is a co-trustee with shared voting and
dispositive power; (d) 2,215,849 Essef Shares held by two trusts over which
she has shared dispositive power as one of three trust advisors; and (e)
181,500 Essef Shares held by trusts of which she is one of three trustees
with shared voting and dispositive power. Ms. Jorgenson disclaims the
benefits of ownership of any of the aforementioned Essef Shares. Ms.
Jorgenson is a partner in the law firm of Squire, Sanders & Dempsey L.L.P.,
which the Company retains as its outside general counsel.

(6) Includes shares underlying options which are exercisable within 60 days of
August 27, 1998 as follows:

Thomas B. Waldin 2,372,074
Stuart D. Neidus 48,400

(7) Thomas B. Waldin is the beneficial owner of 2,493,371 Essef Shares owned by
or benefiting him, his wife or child directly, including the Essef Options
noted above.

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DESCRIPTION OF CAPITAL STOCK

Set forth below is a brief description of the Company capital stock that
will be authorized for issuance upon the effectiveness of the Company's Amended
and Restated Articles, including the Common Shares offered hereby. The Company
will cause such Amended and Restated Articles of Incorporation and its Amended
and Restated Regulations (each in substantially the form filed as an exhibit to
the Registration Statement of which this Prospectus is a part) to become
effective prior to the sale of the Common Shares offered hereby.

The Company will be authorized to issue 49,000,000 Common Shares, without
par value, and 1,000,000 Preferred Shares, without par value ("Serial Preferred
Shares"). No Serial Preferred Shares have been issued as of the date of this
Prospectus, nor will any Serial Preferred Shares be outstanding immediately
following the Offering. The Company's Amended and Restated Articles will permit
the Company's Board of Directors to fix the rights and designations of the
Serial Preferred Shares, to the extent allowed by Ohio law.

Holders of outstanding Common Shares will be entitled to one vote per share
on all matters submitted to a vote of shareholders, and will not have the right
to vote cumulatively in the election of directors.

Holders of Common Shares will have equal rights to receive dividends
ratably, as and when declared by its Board out of funds legally available
therefor, subject to the dividend rights of holders of Serial Preferred Shares
that may be issued in the future. In the event of any liquidation, dissolution
or winding up of the Company, holders of Common Shares will receive the assets
of the Company available for distribution on a pro rata basis.

No holder of Common Shares will have any preemptive or preferential rights
to purchase or subscribe to any shares of any class of the Company, except to
the extent provided by the Board of Directors.

The transfer agent and registrar for the Common Shares is National City
Bank, Cleveland, Ohio.

POSSIBLE EFFECTS OF CERTAIN PROVISIONS OF THE COMPANY'S ORGANIZATIONAL DOCUMENTS
AND OHIO LAW

The Company's strategic plan is focused on the primary goal of building
value for the benefit of long-term shareholders. The Board of Directors believes
that, in the event the Double Spin-Off is effected, this goal can best be
attained by the Company's operation as an independent entity. Under Ohio law,
the directors have the responsibility for selecting the time frame for achieving
corporate goals. In order to assure that the directors can carry out that
responsibility, the Company's Amended and Restated Articles of Incorporation and
Amended and Restated Regulations will contain certain provisions which may have
the effect of discouraging unilateral tender offers or other attempts to take
over and acquire the business of the Company. If they discourage potential
takeover bids, such provisions could limit the opportunity for the Company's
shareholders to sell their shares at a premium over then prevailing market
prices. Such provisions are intended to help preserve for the public
shareholders of the Company the long-term value inherent in their investment in
the Common Shares and guard against offers which are not, or are otherwise made
at a time or in a manner which is not, in the best interests of the Company and
its shareholders.

The Board of Directors believes that it is in the best position to consider
all of the factors which may be relevant to a determination of whether a control
bid is in the best interests of the Company and its shareholders. A transaction
which is negotiated and approved by the Board of Directors can be carefully
planned and undertaken at an opportune time in order to obtain maximum value for
the Company and its shareholders, with due consideration given to matters such
as the management and business of the acquiror, the interests of other
constituencies of the Company and maximum strategic development of the assets of
the Company.

By contrast, the Board of Directors believes that non-negotiated takeover
attempts present to shareholders the risk of a sale on terms which may be less
favorable than might otherwise be available. Such offers may be timed to exploit
fluctuations in the stock market to capture for the acquiror, at the expense of
the target company's public shareholders, the intrinsic value of the target
company's capital stock. Moreover, although a tender offer or other takeover
attempt may be made at a price substantially above the prevailing market price
for the target company's shares, such offers are sometimes made for less than
all of the outstanding target company shares, presenting shareholders with the
alternative of partially liquidating their investment at a time that may be
disadvantageous, or retaining their investment in an enterprise which is under
different management and whose

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objectives may not be similar to, or as attractive as, those of the remaining
shareholders. Such offers may also be made for illegitimate or improper purposes
(such as "greenmail") which seek to enrich the bidder at the expense of the
target company and its shareholders and may cause significant disruption of the
target company's business and management.

Accordingly, the Board of Directors believes that the provisions described
below, which encourage potential acquirors to negotiate with the Board of
Directors and discourage the use of improper and coercive tactics, are in the
best interests of the Company and its shareholders. In addition to such
provisions, the Board of Directors may, in the future, adopt other measures
designed to discourage non-negotiated takeover attempts, including a shareholder
rights plan. The Board of Directors currently is not aware of any plan by any
third party to effect a change of control in the Company.

Authorized But Unissued Shares. The Company's Amended and Restated Articles
of Incorporation will authorize the issuance of up to 1,000,000 Serial Preferred
Shares. In addition, after giving effect to this Offering, approximately,
Common Shares will be authorized but unissued and not reserved
for issuance. An effect of the existence of authorized but unissued Common
Shares and Serial Preferred Shares may be to enable the Board of Directors to
render more difficult or discourage a transaction to obtain control of the
Company by issuing such shares without shareholder approval in transactions
which dilute voting or other rights of the proposed acquiror. The Company has no
present plans or intentions to issue any of such shares and has no current plans
to adopt other such measures.

Classified Board; No Cumulative Voting. The Company's organizational
documents will provide for a classified Board of Directors, consisting of two
(2) classes with three (3) year terms, and no cumulative voting in the election
of directors. Such provisions may discourage purchases of a significant minority
position because they tend to delay and render more difficult a purchaser's
ability to obtain control of the Board of Directors. Although directors of the
Company may be removed without cause, the Company's Amended and Restated
Regulations will require the affirmative vote of at least 80% of the
then-outstanding shares entitled to vote in an election of directors, taken as a
single class, to remove any director.

Special Vote Required to Approve Certain Control Share
Acquisitions. Article SIXTH of the Company's Amended and Restated Articles of
Incorporation ("Article SIXTH") will be substantially identical to the Ohio
Control Share Acquisition Statute, Section 1701.831 of the Ohio Revised Code, as
currently in effect, although Article SIXTH will provide for remedies and a
level of director discretion with regard to calling a meeting of shareholders
not otherwise found in Section 1701.831. The Company's Amended and Restated
Articles of Incorporation will provide that the Ohio Control Share Acquisition
Statute, as in effect on September , 1998, shall not apply to acquisitions of
its shares.

Article SIXTH will provide that no person (or entity or group) shall make a
Control Share Acquisition (as defined below) without first obtaining the
authorization of the Company's shareholders in accordance with certain
procedural requirements. A "Control Share Acquisition" is generally any
acquisition, directly or indirectly, of shares of the Company which, when added
to all other shares of the Company owned or controlled by the acquiror, would
entitle the acquiror, alone or with others, to exercise or direct the exercise
of the voting power of the Company in the election of directors within any of
the following ranges of voting power: (i) one-fifth or more but less than
one-third of such voting power; (ii) one-third or more but less than a majority
of such voting power; or (iii) a majority or more of such voting power. Article
SIXTH will provide that any shareholder whose ownership of Common Shares as of
the date of the Double Spin-Off would be in one of the ranges of voting power
shall not be required to obtain any shareholder approval for ownership within
such range but would be required to obtain shareholder approval for acquisitions
of Common Shares that would cause such shareholder's holdings to move to a
greater range.

Article SIXTH will require that the person proposing to make a Control
Share Acquisition deliver a notice to the Company containing, among other
things, a description of the terms of the proposed acquisition and reasonable
evidence that the proposed Control Share Acquisition, if consummated, would not
be contrary to law and that the person who is giving the Notice has the
financial capacity to make such acquisition. Within 50 days of its receipt of
such notice, the Board of Directors must call and hold a special meeting of
shareholders to vote on the proposed Control Share Acquisition unless it has
determined that (i) the notice was not given in good faith,

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(ii) the proposed Control Share Acquisition would not be in the best interests
of the Company or (iii) the proposed Control Share Acquisition could not be
consummated for financial or legal reasons.

Article SIXTH will provide that in determining whether the proposed Control
Share Acquisition would be in the best interests of the Company, a director must
consider the interests of the Company's shareholders and has the discretion to
consider any of the following: the interests of the Company's employees,
suppliers, creditors and customers; the economy of the state and nation;
community and societal considerations; and the long term as well as short term
interests of the Company and its shareholders, including the possibility that
these interests may be best served by the continued independence of the
corporation. Article SIXTH will also provide that a determination by the Board
of Directors that such a special meeting of shareholders should not be called
shall not be deemed void or voidable merely because one or more of its directors
or officers who participated in making such determination may be deemed to be
other than disinterested, if in any such case the material facts of the
relationship giving rise to a basis for self-interest are known to the directors
and the directors, in good faith reasonably justified by the facts, make such
determination by the affirmative vote of a majority of the disinterested
directors, even though the disinterested directors constitute less than a
quorum. For these purposes, a "disinterested director" means a director whose
material contacts with the Company are limited principally to activities as a
director or shareholder. A director would not be deemed to be other than a
"disinterested director" merely because he would no longer be a director if the
proposed Control Share Acquisition were approved and consummated.

If a special meeting is to be held, the Company's notice to shareholders
must include or be accompanied by both the notice submitted to the Company by
the person proposing to make a Control Share Acquisition and a statement by the
Company of its position or recommendation with respect to such acquisition or a
statement that it has not taken a position or made a recommendation.

For purposes of Article SIXTH, the person who delivered the notice may make
the proposed Control Share Acquisition if both of the following occur: (i) the
shareholders of the Company authorize such acquisition by an affirmative vote of
a majority of (A) all voting shares represented at such meeting and (B) all
voting shares represented at such meeting which are not "Interested Shares" (as
defined below); and (ii) such acquisition is consummated, in accordance with the
terms so authorized, not later than 360 days following shareholder authorization
of the Control Share Acquisition.

Subject to certain exclusions, the term "Interested Shares" generally
refers to voting shares held or controlled by: (i) the person whose notice
prompted the calling of the special meeting of shareholders; (ii) any officer of
the Company elected or appointed by the directors of the Company; (iii) any
employee of the Company who is also a director of the Company; (iv) any person
who acquired his shares, directly or indirectly, for valuable consideration
during the period beginning with the date of the first public disclosure of a
proposed Control Share Acquisition and ending on the record date of the special
meeting if (A) the aggregate consideration paid by such acquiring person for
such shares exceeds $250,000 or (B) the number of shares acquired by such
acquiring person exceeds one-half of one percent of the outstanding voting
shares of the Company; and (v) any person who transfers voting shares for
valuable consideration after the record date of the special meeting as to shares
so transferred, if accompanied by the voting power in the form of a blank proxy,
an agreement to vote as instructed by the transferee, or otherwise.

Article SIXTH will provide that the issuance or transfer of any shares in
violation of Article SIXTH ("Excess Shares") will be null and void. In the event
the Company is not permitted to treat an issuance or transfer of Excess Shares
as null and void, Article SIXTH will further provide that the holders of Excess
Shares will be deemed to hold such shares as agents of the Company. During the
time when such shares are considered Excess Shares, they will not be entitled to
any voting rights, will not be considered to be outstanding for quorum or voting
purposes, and will not be entitled to receive dividends, interest or any other
distribution with respect to the Excess Shares. Following a transfer of such
shares to a person in whose hands such shares do not constitute Excess Shares,
the Company will distribute to such transferee any dividends or other
distributions which accrued on such shares and were not previously paid or
distributed.

Special Vote Required for Certain Amendments to Organizational
Documents. Certain provisions of the Company's Amended and Restated Articles of
Incorpoartion, such as those set forth in Article SIXTH (control
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share acquisitions), will not be subject to amendment, alteration or repeal
except by the affirmative vote of at least 80% of the outstanding voting shares
of the Company. Such 80% vote will also required to amend, alter or repeal any
of the provisions of Section 7 (number of directors), Section 9 (classification,
election and term of office of directors) or Section 10 (removal of directors)
of the Company's Amended and Restated Regulations, unless such amendment has
been recommended by at least two-thirds of the Continuing Directors. As used in
the Company's Amended and Restated Regulations, the term "Continuing Directors"
generally will mean, as of any date of determination, members of the Board of
Directors who were either elected as initial directors of the Company (the three
current directors) or were nominated for election or elected to the Board of
Directors with the approval of a majority of the Continuing Directors in office
at the time of such nomination or election.

Other Provisions. Certain other provisions of the Company's Amended and
Restated Articles of Incorporation and Amended and Restated Regulations may also
tend to discourage attempts to acquire control of the Company. These include
advance notice requirements for director nominations and shareholder proposals,
provisions which require the unanimous written consent of the holders of all
voting shares in order for the shareholders to take action without a meeting,
provisions which permit a special meeting to be called by shareholders only with
the approval of the holders of 50% or more of outstanding voting shares,
provisions which permit shareholders to set the number of directors only upon
the recommendation of the Board of Directors, and provisions which permit the
Company to repurchase outstanding shares of its capital stock as permitted by
law.

TRANSACTIONS AND RELATIONSHIPS WITH INTERESTED PARTIES

The Amended and Restated Articles of Incorporation will contain certain
provisions intended to clarify the duties and obligations of directors and
officers of the Company with respect to related party transactions. The Amended
and Restated Articles of Incorporation will provide that no contract or
arrangement between the Company and Essef, or between the Company and any
director or officer of the Company or Essef, will be void or voidable solely
because: (i) Essef or such officer or director is a party; or (ii) such officer
or director participated in, or voted with respect to, the authorization of such
contract or arrangement. Further, the Amended and Restated Articles of
Incorporation will provide that neither Essef nor any of its officers or
directors are liable to the Company or its shareholders for breach of any
fiduciary duty or duty of loyalty, failure to act in the best interests of the
Company, or the derivation of any improper personal benefit, if they in good
faith take any action or exercise any right in connection with a contract or
arrangement between the Company and Essef.

CERTAIN LAWS

The Company is subject to Chapter 1704 of the Ohio Revised Code ("Chapter
1704"). Under Chapter 1704, the Company may not engage in a Chapter 1704
transaction (a term that broadly includes mergers, assets and stock sales and
other financing transactions) with an interested shareholder (a person or entity
that controls 10% or more of the Company's voting power) for three years after
the interested shareholder became such unless the directors of the Company
approved the transaction or the purchase of shares by the interested shareholder
in advance. Chapter 1704 transactions between an interested shareholder who has
held such shares for three years and the Company that were not approved by the
directors in advance are subject to additional shareholder approval requirements
or fairness criteria. The provisions of Chapter 1704 may deter or prevent
takeover bids that have not been approved in advance by the directors and may
decrease the chances of shareholders realizing a premium over market price for
their Common Shares as a result of such a takeover bid.

SHARES ELIGIBLE FOR FUTURE SALE

GENERAL

Prior to the Offering there has been no market for the Common Shares of the
Company. The Company can make no predictions as to the effect, if any, that
sales of shares or the availability of shares for sale will have on the market
price prevailing from time to time. Nevertheless, sales of significant amounts
of the Common Shares in the public market, or the perception that such sales may
occur, could adversely affect prevailing market prices. See "Risk
Factors -- Shares Eligible for Future Sale."

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Upon consummation of the Offering, the Company will have Common
Shares outstanding ( Common Shares if the Underwriters' over-allotment
option is exercised in full), of which will be freely tradable without
restriction or further registration under the Securities Act, except for any
shares purchased by an "affiliate" of the Company (in general, a person who has
a control relationship with the Company), which shares will be subject to the
resale limitations, described below, of Rule 144. The remaining shares
( shares if the Underwriters' over-allotment option is exercised in
full) are deemed to be "restricted securities," as that term is defined under
Rule 144, in that such shares were issued and sold by the Company in private
transactions not involving a public offering and, as such, may only be sold
pursuant to an effective registration under the Securities Act, in compliance
with the exemption provisions of Rule 144 or pursuant to another exemption under
the Securities Act. An aggregate of Common Shares held by existing
Shareholders of the Company upon completion of the Offering will be "restricted
securities" (as that phrase is defined in Rule 144) and may not be resold in the
absence of registration under the Securities Act or pursuant to an exemption
from such registration, including among others, the exemption provided by Rule
144 under the Securities Act. An aggregate of ( shares if the
Underwriters' over-allotment option is exercised in full) of such restricted
shares will be eligible for sale under Rule 144 (subject to certain recurring
three-month volume limitations prescribed by Rule 144 and the lock-up
arrangements with the Underwriters described in the following paragraph)
commencing 90 days after the Offering, and the balance will become so eligible
at various times commencing thereafter. See "Risk Factors -- Shares Eligible for
Future Sale."

Essef Corporation and all of the directors and executive officers of the
Company, beneficially holding in the aggregate Common Shares upon
consummation of the Offering, have agreed with the Underwriters not to sell or
otherwise dispose of any of those Common Shares for a period of 90 days after
the date of this Prospectus without the written consent of the Representatives;
provided, however, that within such 90-day period, the Essef Group may
consummate the Double Spin-Off. If the Double Spin-Off is completed, all Common
Shares will be freely tradable except for any Common Shares that are held by
affiliates of the Company or that are otherwise subject to the restrictions of
Rule 144.

In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this Prospectus, if a period of at least one year has elapsed since
the later of the date the "restricted securities" were acquired from the Company
or the date they were acquired from an Affiliate, then the holder of such
restricted securities (including an Affiliate) is entitled to sell in the public
market a number of shares within any three-month period that does not exceed the
greater of 1% of the then outstanding shares of the Common Shares (approximately
shares immediately after the Offering) or the average weekly reported
volume of trading of the Common Shares on the Nasdaq National Market during the
four calendar weeks preceding such sale. Under Rule 144, the holder may only
sell such shares through "brokers' transactions" or in transactions directly
with a "market maker" (as such terms are defined in Rule 144). Sales under Rule
144 are also subject to certain requirements regarding providing notice of such
sales and the availability of currently public information concerning the
Company. Affiliates may sell shares not constituting restricted shares in
accordance with the foregoing volume limitations and other requirements but
without regard to the one-year holding period. Under Rule 144(k), if a period of
at least two years has elapsed between the later of the date restricted
securities were acquired from the Company or the date they were acquired from an
Affiliate, as applicable, a holder of such restricted securities who is not an
Affiliate at the time of the sale and has not been an Affiliate for at least
three months prior to the sale would be entitled to sell the shares in the
public market without regard to the volume limitations and other restrictions
described above. Beginning 90 days after the date of this Prospectus,
approximately Common Shares will be eligible for sale in the public
market pursuant to Rule 144, subject to the volume limitations and other
restrictions described above.

The Company intends to file a registration statement under the Securities
Act to register Common Shares reserved for issuance under the 1998 Plan, thereby
permitting the resale of such shares by non-affiliates in the public market
without restriction under the Securities Act. The Company has reserved up to
1,000,000 Common Shares for issuance under the 1998 Plan. See
"Management -- Long-Term Incentive Plan."

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47

UNDERWRITING

Subject to the terms and conditions contained in the Underwriting
Agreement, each of the underwriters named below (the "Underwriters") has
severally agreed to purchase, and the Company has agreed to sell to such
Underwriter, the respective number of Common Shares set forth opposite the name
of such Underwriter at the public offering price less the underwriting discount
set forth on the cover page of this Prospectus.

NUMBER OF
UNDERWRITERS SHARES
------------ ---------

McDonald & Company Securities, Inc..........................
Friedman, Billings, Ramsey & Co., Inc.......................
Morgan Keegan & Company, Inc................................
---------
Total.............................................
=========

The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the Common Shares offered hereby
are subject to approval of certain legal matters by their counsel and to certain
other conditions. The Underwriters are obligated to take and pay for all Common
Shares offered hereby (other than those covered by the over-allotment option
described below) if any such shares are purchased.

The Underwriters, for whom McDonald & Company Securities, Inc., Friedman,
Billings, Ramsey & Co., Inc. and Morgan Keegan & Company, Inc. are acting as
Representatives (the "Representatives"), propose to offer part of the Common
Shares directly to the public at the public offering price set forth on the
cover page of this Prospectus and part of the shares to certain dealers at a
price which represents a concession not in excess of $ per share under the
public offering price. The Underwriters may allow, and such dealers may reallow,
a concession not in excess of $ per share to certain other dealers. After
the Offering, the offering price and other selling terms may be changed. The
Representatives of the Underwriters have advised the Company that the
Underwriters do not intend to confirm sales to any accounts over which they
exercise discretionary authority.

The Company has granted to the Underwriters an option, exercisable for 30
days from the date of this Prospectus, to purchase up to an aggregate of
additional Common Shares at the public offering price set forth on the
cover page of this Prospectus minus the underwriting discounts and commissions.
The Underwriters may exercise such option solely for the purpose of covering
over-allotments, if any, in connection with the sale of the shares offered
hereby. To the extent such option is exercised, each Underwriter will be
obligated, subject to certain conditions, to purchase approximately the same
percentage of such additional shares as the number of shares set forth opposite
such Underwriter's name in the preceding table bears to the total number of
shares in such table.

The Company, Essef and other affiliates of the Company, who beneficially
hold an aggregate of Common Shares, have agreed that, for a period of
90 days following the date of this Prospectus, they will not, without the prior
written consent of the Representatives, offer, sell, contract to sell, or
otherwise dispose of any Common Shares of the Company (other than shares offered
pursuant to this Prospectus) or any securities convertible into, or exercisable
or exchangeable for Common Shares of the Company without the prior written
consent of the Underwriters, other than, in the case of the Company, in certain
limited circumstances and, in the case of the Essef Group companies, in the
Double Spin-Off. If the Double Spin-Off is completed, all Common Shares will be
freely tradable except for any Common Shares that are held by affiliates of the
Company or that are otherwise subject to Rule 144.

Prior to the Offering, there has not been any public market for the Common
Shares of the Company. Consequently, the initial public offering price for the
Common Shares included in the Offering will be determined by negotiations
between the Company and the Representatives. Among the factors to be considered
in determining such price are the history of and prospects for the Company's
business and the industry in which it competes, an assessment of the Company's
management and the present state of the Company's development, the past and
present revenues and earnings of the Company, the prospects for the growth of
the Company's revenues and earnings, the current state of the economy in the
United States and the current level of economic activity in

45
48

the industry in which the Company competes and in related or comparable
industries, and currently prevailing conditions in the securities markets,
including current market valuations of publicly traded companies that are
comparable to the Company.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including certain liabilities under the Securities Act, or to
contribute to payments that the Underwriters may be required to make in respect
thereof.

LEGAL MATTERS

Squire, Sanders & Dempsey L.L.P. has rendered an opinion as to the validity
of the Common Shares offered hereby. Certain legal matters relating to the
Offering will be passed upon for the Underwriters by Thompson Hine & Flory LLP.

EXPERTS

The financial statements of Anthony & Sylvan Pools Corporation as of
December 31, 1997 and for the eight months then ended, and the financial
statements of Anthony & Sylvan Pools, Inc. as of December 31, 1996 and for the
four month period ended April 30, 1997 and the years ended December 31, 1996 and
1995, included in this Registration Statement and the related financial
statement schedule included elsewhere in the Registration Statement have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports appearing herein and elsewhere in the registration statement, and are
included in reliance upon the reports of such firm given upon their authority as
experts in accounting and auditing.

AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission in
Washington, D.C. a Registration Statement on Form S-1 under the Securities Act
with respect to the Common Shares offered in the Offering. This Prospectus does
not contain all of the information set forth in the Registration Statement and
the Exhibits and schedules thereto, certain items of which are omitted in
accordance with the rules and regulations of the Commission. Statements
contained in this Prospectus concerning the provisions or contents of any
contract or other document referred to herein are not necessarily complete. With
respect to each such contract, agreement, or document filed as an exhibit to the
Registration Statement, reference is made to such exhibit for a more complete
description, and each such statement is deemed to be qualified in all respects
by such reference.

The Registration Statement and the exhibits and schedules thereto filed
with the Commission may be inspected, without charge, at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
located at Seven World Trade Center, 13th Floor, New York, New York 10048, and
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material may also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Such materials may also be accessed electronically by means of the
Commission's home page on the Internet at http:www.sec.gov.

Upon completion of the Offering, the Company will be subject to the
information requirements of the Exchange Act, and, in accordance therewith, will
file reports, proxy and information statements and other information with the
Commission. Such reports, proxy and information statements and other information
can be inspected and copied at the addresses, and may be accessed electronically
at the Uniform Resource Locator, set forth above.

Statements contained in this Prospectus as to the contents of any
agreement, contract or other document are not necessarily complete, and in each
instance reference is made to the copy of such agreement, contract or other
document filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference.

46
49

INDEX TO HISTORICAL FINANCIAL STATEMENTS

PAGE
----

ANTHONY & SYLVAN POOLS CORPORATION
Condensed Financial Statements for the Four Months Ended
April 30, 1997, the Two Months Ended June 30, 1997, and
the Six Months Ended June 30, 1998..................... F-2
Financial Statements for the Eight Months Ended December
31, 1997............................................... F-8

ANTHONY & SYLVAN POOLS, INC.
Financial Statements for the Years Ended December 31, 1995
and 1996 and the Four Months Ended April 30, 1997...... F-18

F-1
50

ANTHONY & SYLVAN POOLS CORPORATION

CONDENSED FINANCIAL STATEMENTS
FOR THE FOUR MONTHS ENDED APRIL 30, 1997,
THE TWO MONTHS ENDED JUNE 30, 1997
AND THE SIX MONTHS ENDED JUNE 30, 1998

F-2
51

ANTHONY & SYLVAN POOLS CORPORATION

UNAUDITED CONDENSED BALANCE SHEET
JUNE 30, 1998
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

ASSETS
Current Assets:
Cash and cash equivalents................................. $ 411
Contract receivables, net of allowance for doubtful
accounts of $767....................................... 9,730
Inventories............................................... 6,648
Prepayments and other..................................... 225
Deferred income taxes..................................... 1,415
-------
Total current assets.............................. 18,429
Property, Plant and Equipment, at cost:
Land...................................................... 1,160
Buildings................................................. 3,184
Machinery and equipment................................... 5,076
-------
Total............................................. 9,420
Less accumulated depreciation............................. 1,268
-------
Net property, plant and equipment................. 8,152
Other Assets:
Goodwill, net of accumulated amortization................. 24,157
Other..................................................... 664
-------
Total other assets................................ 24,821
-------
TOTAL ASSETS...................................... $51,402
=======
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Current maturities of long-term debt...................... $ 286
Accounts payable.......................................... 6,453
Accrued expenses.......................................... 10,811
-------
Total current liabilities......................... 17,550
Long-Term Debt.............................................. 380
Other Long-Term Liabilities................................. 1,083
Commitments and Contingencies............................... --
Payable to Essef Corporation................................ 26,750
Shareholder's Equity:
Common Shares, no par value; 1,000 shares authorized, 100
shares issued and outstanding.......................... --
Retained Earnings......................................... 5,639
-------
Total Shareholder's Equity........................ 5,639
-------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY........ $51,402
=======

See notes to condensed financial statements.

F-3
52

ANTHONY & SYLVAN POOLS CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

FOR THE FOUR MONTHS ENDED APRIL 30, 1997,
THE TWO MONTHS ENDED JUNE 30, 1997 AND
THE SIX MONTHS ENDED JUNE 30, 1998
(DOLLARS IN THOUSANDS)

FOUR MONTHS ENDED TWO MONTHS ENDED SIX MONTHS ENDED
APRIL 30, 1997 JUNE 30, 1997 JUNE 30, 1998
(AUDITED) (UNAUDITED) (UNAUDITED)
----------------- ---------------- ----------------

Net sales................................ $28,883 $29,374 $70,455
Cost of sales............................ 22,291 20,497 50,597
------- ------- -------
Gross profit............................. 6,592 8,877 19,858
Operating expenses:
Selling................................ 6,073 3,596 11,439
Administrative......................... 3,980 1,420 5,632
------- ------- -------
Total operating expenses....... 10,053 5,016 17,071
------- ------- -------
(Loss)/income from operations............ (3,461) 3,861 2,787
Interest and other expense............... 303 387 1,026
------- ------- -------
(Loss)/income before income taxes........ (3,764) 3,474 1,761
(Benefit)/provision for income taxes..... (1,350) 1,251 675
------- ------- -------
Net (loss)/income........................ $(2,414) $ 2,223 $ 1,086
======= ======= =======

See notes to condensed financial statements.

F-4
53

ANTHONY & SYLVAN POOLS CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE FOUR MONTHS ENDED APRIL 30, 1997,
THE TWO MONTHS ENDED JUNE 30, 1997 AND
THE SIX MONTHS ENDED JUNE 30, 1998
(DOLLARS IN THOUSANDS)

FOUR MONTHS ENDED TWO MONTHS ENDED SIX MONTHS ENDED
APRIL 30, 1997 JUNE 30, 1997 JUNE 30, 1998
(AUDITED) (UNAUDITED) (UNAUDITED)
----------------- ---------------- ----------------

Cash Flows For Operating Activities:
Net (loss)/income...................... $(2,414) $ 2,223 $ 1,086
Adjustments to reconcile net
(loss)/income to net cash provided by
operating activities:
Depreciation and amortization.......... 470 267 1,010
Non-cash interest...................... 116 -- --
Deferred income taxes.................. (914) -- 47
Changes in operating assets and
liabilities net of assets acquired:
Contract receivables................... 491 (823) (2,558)
Inventories............................ (1,031) 210 (2,212)
Prepayments and other.................. 218 110 313
Accounts payable....................... 3,251 75 915
Accrued expenses....................... 1,834 (1,703) 2,265
------- ------- -------
Cash provided by operating
activities........................ 2,021 359 866
------- ------- -------
Cash Flows For Investing Activities:
Additions to property, plant and
equipment........................... (259) (118) (1,379)
Business Acquisition................... -- -- (1,813)
------- ------- -------
Cash used in investing activities... (259) (118) (3,192)
------- ------- -------
Cash Flows From Financing Activities:
Net transactions with GAI/Essef
Corporation......................... (7,224) 1,871 2,226
Proceeds from/(repayment of) long-term
debt................................ 3,675 (97) (192)
------- ------- -------
Cash (used in)/provided by financing
activities........................ (3,549) 1,774 2,034
------- ------- -------
Net (decrease)/increase in cash and cash
equivalents............................ (1,787) 2,015 (292)
Cash and cash equivalents:
Beginning of period.................... 1,832 45 703
------- ------- -------
End of period.......................... $ 45 $ 2,060 $ 411
======= ======= =======
Supplemental cash flow information:
Interest paid.......................... $ 272 395 $ 1,002
Income taxes paid, net................. $ -- $ 1,251 $ 675
Non-cash financing and investing
activities:
Business acquisition with Parent stock
charged through inter-company
payable............................. $ -- $ -- $ 744

See notes to condensed financial statements.

F-5
54

ANTHONY & SYLVAN POOLS CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE FOUR MONTHS ENDED APRIL 30, 1997,
THE TWO MONTHS ENDED JUNE 30, 1997
AND THE SIX MONTHS ENDED JUNE 30, 1998

1. BASIS OF PRESENTATION

Anthony & Sylvan Pools Corporation (the "Company") is the largest
residential in-ground concrete swimming pool sales and installation business in
the United States and operates in the swimming pool installation segment.

On May 1, 1997, substantially all of Anthony & Sylvan, Inc.'s operating
assets were acquired and certain of its liabilities assumed by Essef Corporation
and subsidiaries (the "Parent") through Anthony & Sylvan Pools Corporation as
part of an acquisition transaction with General Aquatics, Inc. ("GAI") of which
Anthony & Sylvan, Inc. was a subsidiary. The accompanying financial statements
for the four months ended April 30, 1997 are presented under the Company's
historical basis of accounting and do not reflect any adjustments which would be
required as a result of the acquisition by Essef Corporation. The financial
statements for the two months ended June 30, 1997 and the six months ended June
30, 1998 are for the period subsequent to the acquisition and contemplate the
adjustments required under the purchase method of accounting. Company management
believes that the financial statements reflect all material expenses of the
Company assuming the Company were organized as a stand-alone legal entity
including specifically identifiable costs incurred by the Parent on behalf of,
and charged to, the Company.

2. INTERIM UNAUDITED FINANCIAL STATEMENTS

The accompanying balance sheet as of June 30, 1998, and the statements of
operations and cash flows for the six months ended June 30, 1998, and the two
months ended June 30, 1997 are unaudited. In the opinion of management, these
interim unaudited financial statements have been prepared on the same basis as
the audited financial statements for the eight months ended December 31, 1997
and include all adjustments, consisting of only normal and recurring
adjustments, necessary for fair presentation of the interim period. The
disclosures in the notes related to these unaudited interim financial statements
are also unaudited. The unaudited condensed statement of income for the six
months ended June 30, 1998 is not necessarily indicative of the results to be
expected for the full year.

3. INITIAL PUBLIC OFFERING AND SPIN-OFF

In May 1998, the Parent announced its intention to separate from the Parent
its swimming pool sales and installation business and the associated assets and
liabilities of such business which comprise the Company. To accomplish the
separation the Parent plans to commence an initial public offering for 15 to 20
percent of the Company's shares. The Parent also plans to distribute the
remaining shares of the Company to the Parent's shareholders. Such distribution
is contingent on, among other things, the distribution qualifying as a tax-free
distribution for federal income tax purposes under Section 355 of the Internal
Revenue Code of 1986. The Company and Parent have entered, or will enter, into
on or prior to the consummation of the initial public offering certain
arrangements governing various interim and ongoing relationships between the
companies, including agreements that will provide for administrative services,
tax allocations, inter-company borrowings and indemnification. Immediately prior
to the initial public offering, the Company will amend its articles of
incorporation to provide for the issuance of up to 49,000,000 shares of common
stock. Additionally, prior to the offering the Company will establish a
long-term incentive plan under which certain employees and directors will be
issued options to purchase common shares of the Company (the "Long-Term
Incentive Plan"). The number of options issued under the Long-Term Incentive
Plan will not exceed 1,000,000. As the number of shares that will be outstanding
after the initial public offering is uncertain at this time, pro forma earnings
per share has not been presented.
F-6
55
ANTHONY & SYLVAN POOLS CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS -- (CONTINUED)

FOR THE FOUR MONTHS ENDED APRIL 30, 1997,
THE TWO MONTHS ENDED JUNE 30, 1997
AND THE SIX MONTHS ENDED JUNE 30, 1998

4. RELATED PARTY TRANSACTIONS

With the exception of certain capitalized lease obligations, the Company
does not have external sources of borrowings and, as such, relies upon the
Parent as its primary source of funding. The Parent provides funding through an
inter-company debt arrangement under which borrowings available to the Company
are subject to the terms, conditions and covenants of the Parent's credit
agreement and limited to the availability thereunder. This inter-company account
is used to provide working capital funding and to account for the centralized
cash management program. Interest was charged on the average outstanding payable
at a fixed rate of 7.5% for the six months ended June 30, 1998. Total interest
charges on the inter-company account for the six months ended June 30, 1998 and
for the two months ended June 30, 1997 were $972,000 and $395,000, respectively.

5. ACQUISITION OF TANGO POOLS

On January 21, 1998, the Company acquired the net operating assets of Tango
Pools. Tango Pools, with sales of approximately $18,000,000 for the year ended
December 31, 1997, is a leading installer of residential in-ground concrete
swimming pools in Las Vegas, Nevada. The acquisition was accounted for as a
purchase, and thus, the purchase price has been allocated to the assets and
liabilities based on their estimated fair value as of the date of acquisition.
The results of operations shown in these statements reflect Tango Pools' results
since the date of acquisition. The cost in excess of the fair value of the net
assets acquired is being amortized on a straight line basis over forty years.

6. SHAREHOLDER'S EQUITY

Shareholder's equity consisted of the following for the six months ended
June 30, 1998 (dollars in thousands):

COMMON SHARES RETAINED EARNINGS TOTAL
------------- ----------------- ------

Balance, January 1, 1998.................. $ -- $4,553 $4,553
Net income.............................. -- 1,086 1,086
------- ------ ------
Balance, June 30, 1998.................... $ -- $5,639 $5,639
======= ====== ======

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 cash flows.

8. SUBSEQUENT EVENT

On August 26, 1998, the Company acquired the net operating assets of Pools
by Andrews, Inc. Pools by Andrews, with sales of approximately $27,000,000 for
the year ended December 31, 1997, is one of the largest installers of
residential in-ground concrete swimming pools in Florida with offices serving
Miami, Ft. Lauderdale, Palm Beach, Orlando, Jacksonville, Tampa and Fort Myers.
The acquisition, accounted for as a purchase, was funded through a charge to the
Company's payable to Parent.

F-7
56

ANTHONY & SYLVAN POOLS CORPORATION

FINANCIAL STATEMENTS
FOR THE EIGHT MONTHS ENDED
DECEMBER 31, 1997

F-8
57

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders,
Anthony & Sylvan Pools Corporation

We have audited the accompanying balance sheet of Anthony & Sylvan Pools
Corporation (the "Company") as of December 31, 1997 and the related statements
of income, and cash flows for the eight months ended December 31, 1997. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above, present fairly,
in all material respects, the financial position of the Company as of December
31, 1997 and the results of its operations and its cash flows for the eight
months ended December 31, 1997 in conformity with generally accepted accounting
principles.

DELOITTE & TOUCHE LLP
Cleveland, Ohio
September 15, 1998

F-9
58

ANTHONY & SYLVAN POOLS CORPORATION

BALANCE SHEET

DECEMBER 31, 1997

(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

ASSETS
Current Assets:
Cash and cash equivalents................................. $ 703
Contract receivables, net of allowance for doubtful
accounts of $708....................................... 5,912
Inventories............................................... 4,144
Prepayments and other..................................... 506
Deferred taxes............................................ 1,445
-------
Total current assets.............................. 12,710
Property, Plant and Equipment, at cost:
Land...................................................... 1,160
Buildings................................................. 2,893
Machinery and equipment................................... 3,759
-------
Total............................................. 7,812
Less accumulated depreciation............................. 578
-------
Net property, plant and equipment................. 7,234
Other Assets:
Goodwill, net of accumulated amortization................. 22,084
Other..................................................... 592
-------
Total other assets................................ 22,676
-------
TOTAL ASSETS...................................... $42,620
=======
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Current maturities of long-term debt...................... $ 403
Accounts payable.......................................... 4,329
Accrued expenses.......................................... 7,970
-------
Total current liabilities......................... 12,702
Long-Term Debt.............................................. 455
Other Long-Term Liabilities................................. 1,130
Commitments and Contingencies............................... --
Payable to Essef Corporation................................ 23,780
Shareholder's Equity:
Common shares, no par value; 1,000 shares authorized, 100
shares issued and outstanding.......................... --
Retained earnings......................................... 4,553
-------
Total Shareholder's Equity........................ 4,553
-------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY........ $42,620
=======

See notes to financial statements.

F-10
59

ANTHONY & SYLVAN POOLS CORPORATION

STATEMENT OF INCOME

FOR THE EIGHT MONTHS ENDED DECEMBER 31, 1997

(DOLLARS IN THOUSANDS)

Net sales................................................... $98,829
Cost of sales............................................... 70,814
-------
Gross profit................................................ 28,015
Operating expenses:
Selling................................................... 13,578
Administrative............................................ 5,598
-------
Total operating expenses.......................... 19,176
-------
Income from operations...................................... 8,839
Interest and other expense.................................. 1,637
-------
Income before income taxes.................................. 7,202
Provision for income taxes.................................. 2,649
-------
Net income.................................................. $ 4,553
=======

See notes to financial statements.

F-11
60

ANTHONY & SYLVAN POOLS CORPORATION

STATEMENT OF CASH FLOWS

FOR THE EIGHT MONTHS ENDED DECEMBER 31, 1997

(DOLLARS IN THOUSANDS)

Cash Flows For Operating Activities:
Net income................................................ $ 4,553
Adjustments to reconcile net income to net cash provided
by operating activities
Depreciation and amortization.......................... 1,070
Deferred income taxes.................................. 32
Changes in operating assets and liabilities net of assets
acquired:
Contract receivables................................... (1,931)
Inventories............................................ 1,671
Prepayments and other.................................. (158)
Accounts payable....................................... (2,079)
Accrued expenses....................................... (3,845)
--------
Cash used in operating activities...................... (687)
--------
Cash Flows For Investing Activities:
Additions to property, plant and equipment............. (1,019)
--------
Acquisition of the Company............................. (21,065)
Cash used in investing activities...................... (22,084)
Cash Flows From Financing Activities:
Net transactions with Essef Corporation................ 23,780
Repayments of long-term debt........................... (351)
--------
Cash provided by financing activities.................. 23,429
--------
Increase in cash and cash equivalents....................... 658
Cash and cash equivalents:
Beginning of period....................................... 45
--------
End of period............................................. $ 703
========
Supplemental Cash Flow Information:
Interest paid............................................. $ 1,615
Income taxes paid......................................... $ 2,617

See notes to financial statements.

F-12
61

ANTHONY & SYLVAN POOLS CORPORATION

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION -- Anthony & Sylvan Pools Corporation (the "Company")
is the largest residential in-ground concrete pool sales and installation
business in the United States and operates in the pool installation segment.

On May 1, 1997, substantially all of Anthony & Sylvan, Inc.'s operating
assets were acquired and certain of its liabilities were assumed by Essef
Corporation and subsidiaries (the "Parent") through Anthony & Sylvan Pools
Corporation as part of an acquisition transaction with General Aquatics, Inc. of
which Anthony & Sylvan, Inc. was a subsidiary. The accompanying financial
statements include the results of operations for the Company from the date of
acquisition. Company management believes that the financial statements reflect
all material expenses of the Company assuming the Company were organized as a
stand-alone legal entity including specifically identifiable costs incurred by
the Parent on behalf of, and charged to, the Company.

CASH AND CASH EQUIVALENTS -- The Company considers all highly liquid
short-term investments with initial maturities of three months or less to be
cash equivalents.

FINANCIAL INSTRUMENTS -- The Company has financial instruments which
consist primarily of cash and cash equivalents, receivables, payables and debt
instruments. The Company has determined that the estimated fair value of its
financial instruments approximates carrying value.

The Company is subject to concentrations of credit risk with respect to
contract receivables which is limited due to the large number of customers
comprising the Company's customer base and their geographical dispersion.

INVENTORIES -- Inventories consist primarily of goods purchased for
installation in pools and are stated at the lower of cost or market. Cost is
determined using the first-in, first-out method. At December 31, 1997, the
Company has a $485,000 reserve on these inventories.

FIXED ASSETS -- Depreciation is computed using the straight-line method for
financial reporting purposes. Accelerated methods are used for tax reporting
purposes. Assets, valued at cost, are generally being depreciated over their
useful lives as follows: buildings, 30 years; and machinery and equipment, 3 to
15 years.

GOODWILL -- Goodwill arising from the acquisition of the Company by the
Parent is being amortized using the straight-line method over forty years.
Accumulated amortization at December 31, 1997 was $373,000. The Company
periodically evaluates the recoverability of goodwill by comparing the book
value of such assets to expected future cash flows, on an undiscounted basis,
over the remaining amortization period of the asset. At December 31, 1997, no
such impairment has been recorded.

WARRANTY -- Losses associated with warranty claims are accrued based on the
Company's estimate of the aggregate liability for claims based on the Company's
experience and the expected timing of payments. The portion of claims the
Company estimates will not be paid within one year is included in other
long-term liabilities.

INCOME TAXES -- The Company is included in the consolidated federal income
tax return of the Parent. All tax amounts have been recorded as if the Company
filed separate federal and state tax returns. The provision for income taxes
included in the statement of income includes federal, state and local taxes
currently payable and those deferred because of temporary differences between
the financial statement and tax bases of assets and has been computed as if the
Company was a stand-alone entity. The accompanying balance sheet includes
deferred tax amounts applicable to the Company.

F-13
62
ANTHONY & SYLVAN POOLS CORPORATION

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 1997

total estimated contract costs. Revisions in cost and revenue estimates are
reflected in the period in which the facts requiring such revisions become
known. Provision is made currently for estimated losses on uncompleted
installations. The majority of the Company's contracts call for progress
payments to be made in advance of completing individual phases of the
installation until the final phases of installation, at which time the remaining
portion is recognized as a contract receivable. Progress payments in excess of
revenue recognized are classified as billings in excess of costs and estimated
earnings on uncompleted contracts and are included in accrued expenses. Unbilled
contract receivables are not material at any point in time.

Contract costs include direct material, labor, subcontract costs and
overheads. Selling and administrative expenses are charged to income as
incurred.

USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the period. Actual results could differ from those estimates.

2. INITIAL PUBLIC OFFERING AND SPIN-OFF

In May 1998, the Parent announced its intention to separate from the Parent
its swimming pool sales and installation business and the associated assets and
liabilities of such business which comprise the Company. To accomplish the
separation, the Parent plans to commence an initial public offering for 15 to 20
percent of the Company's shares. The Parent also plans to distribute the
remaining shares of the Company to the Parent's shareholders. Such distribution
is contingent, on, among other things, the distribution qualifying as a tax-free
distribution for federal income tax purposes under Section 355 of the Internal
Revenue Code of 1986. The Company and Parent have entered, or will enter, into
on or prior to the consummation of the initial public offering certain
arrangements governing various interim and ongoing relationships between the
companies, including agreements that will provide for administrative services,
tax allocations, intercompany borrowings and indemnification. Immediately prior
to the initial public offering, the Company will amend its articles of
incorporation to provide for the issuance of up to 49,000,000 common shares.
Additionally, prior to the offering the Company will establish a long-term
incentive plan under which certain employees and directors will be issued
options to purchase common shares of the Company (the "Long-Term Incentive
Plan"). The number of options issued under the Long-Term Incentive Plan will not
exceed 1,000,000. As the number of shares that will be outstanding after the
initial public offering is uncertain at this time, pro forma earnings per share
has not been presented.

3. RELATED PARTY TRANSACTIONS

With the exception of certain capitalized lease obligations, the Company
does not have external sources of borrowings and, as such, relies upon the
Parent as its primary source of funding. The Parent provides funding through an
inter-company debt arrangement under which borrowings available to the Company
are subject to the terms, conditions and covenants of the Parent's credit
agreement, and limited to the availability thereunder. This inter-company
account is used to provide working capital funding and to account for the
centralized cash management program. Interest was charged on the average
outstanding payable at a fixed rate of 10.25% for the eight month period. Total
interest charges on the inter-company account for the eight months ended
December 31, 1997 were $1,601,000.

The Parent manages consolidated domestic cash flows. Pursuant to this cash
management program the Company transfers any accumulated cash surplus to the
Parent's accounts and the Parent funds cash disbursements, as needed, to
maintain minimum account balances. Such cash flow activities serve to increase
or decrease the Company's debt with the Parent.

F-14
63
ANTHONY & SYLVAN POOLS CORPORATION

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 1997

The Company also purchases swimming pool and spa equipment used in its
swimming pool installations from other companies who are also wholly owned
subsidiaries of the Parent. These purchases are made on an arms length basis, on
terms similar to those to which those Companies sell to their other customers
and are not subject to any long term supply agreements. Total purchases from
related Companies for the eight months ended December 31, 1997, were
approximately $2,030,000. Amounts payable by the Company to related companies of
$287,000 are included in accounts payable at December 31, 1997.

4. BUSINESS ACQUISITION

On May 1, 1997, substantially all of the Company's assets were acquired and
certain of its liabilities were assumed by the Parent as part of an acquisition
transaction with the Company's former parent, General Aquatics, Inc. The
acquisition was accounted for as a purchase, and thus, the purchase price has
been allocated to the assets and liabilities based on their estimated fair value
as of the date of acquisition. The results of operations shown in these
statements reflect the Company's results since the date of acquisition. The cost
in excess of the fair value of the net assets acquired is being amortized on a
straight line basis over forty years.

The following table is a summary of the allocation of purchase price to the
Company (dollars in thousands):

Fair value of identifiable assets acquired.................. $19,077
Costs in excess of net assets acquired...................... 22,457
Less liabilities assumed.................................... (20,469)
-------
Net cash paid for acquisition............................... $21,065
=======

5. SHAREHOLDER'S EQUITY

Shareholder's equity consisted of the following for the eight months ended
December 31, 1997 (dollars in thousands):

COMMON RETAINED
SHARES EARNINGS TOTAL
------ -------- ------

Balance, May 1, 1997............................. $ -- $ -- $ --
Net income..................................... -- 4,553 4,553
------ ------ ------
Balance, December 31, 1997....................... $ -- $4,553 $4,553
====== ====== ======

6. ACCRUED EXPENSES

Accrued expenses consisted of the following at December 31, 1997 (dollars
in thousands):

Billings in excess of costs and estimated earnings on
uncompleted contracts..................................... $2,802
Warranty.................................................... 1,867
Accrued compensation........................................ 1,787
Other....................................................... 1,514
------
Total............................................. $7,970
======

F-15
64
ANTHONY & SYLVAN POOLS CORPORATION

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 1997

7. LONG-TERM DEBT

Long-term debt consists of the following at December 31, 1997 (dollars in
thousands):

Capital lease obligations................................... $ 858
Less current maturities..................................... (403)
-----
Total............................................. $ 455
=====

The Company has capital leases for the purchase of automobiles and other
equipment with a net book value of $560,000 at December 31, 1997. The leases are
collateralized by the automobiles and the equipment purchased. At December 31,
1997, the total future minimum payments under these leases were $1,080,000, with
$222,000 representing payments for future interest at an average interest rate
of approximately 10%.

Aggregate maturities of long-term debt are the following: 1998, $403,000;
1999, $231,000; 2000, $152,000; and 2001, $72,000.

8. INCOME TAXES

The significant components of the provision for income taxes are as follows
for the eight months ended December 31, 1997 (dollars in thousands):

Current:
Federal................................................... $2,397
State.................................................. 220
------
Total current..................................... 2,617
------
Deferred:
Federal................................................... 30
State..................................................... 2
------
Total deferred......................................... 32
------
Total............................................. $2,649
======

The Company's deferred tax assets at December 31, 1997 are comprised
primarily of non-deductible accruals for doubtful accounts and warranty expenses
and reserves for inventory obsolescence.

The consolidated tax provision differs from the tax provision computed at
the statutory United States tax rate of 34% for 1997 as follows (dollars in
thousands):

Tax provision at statutory Federal rate..................... $2,449
State income taxes.......................................... 147
Other items, net............................................ 53
------
Provision for income taxes.................................. $2,649
======

F-16
65
ANTHONY & SYLVAN POOLS CORPORATION

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 1997

9. OPERATING LEASES

The Company leases certain of its facilities and equipment. Total rental
expenses under operating leases were approximately $1,046,000 for the eight
months ended December 31, 1997. Minimum annual rental commitments for the next
five years under non-cancelable operating leases are the following: 1998,
$1,774,000; 1999, $1,627,000; 2000, $1,272,000; 2001 $847,000; 2002 $547,000;
and $247,000 thereafter.

10. RETIREMENT PLANS

The Company and certain other subsidiaries of the Parent maintain a defined
contribution plan covering substantially all of its employees. Participants are
permitted to make pretax contributions to the plan as a percentage of
compensation. The Company matches participant contributions, up to specified
limits. Total Company contributions were approximately $422,000 for the eight
months ended December 31, 1997.

11. LITIGATION

12. SUBSEQUENT EVENTS

The acquisitions, accounted for as purchases, were funded through charges
to the Company's payable to Parent.

F-17
66

ANTHONY & SYLVAN POOLS, INC.

FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 1995 AND 1996 AND
THE FOUR MONTHS ENDED
APRIL 30, 1997

F-18
67

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors & Shareholders,
Anthony & Sylvan Pools, Inc.

We have audited the accompanying balance sheet of Anthony & Sylvan Pools,
Inc. (the "Company") as of December 31, 1996, and the related statements of
operations, and cash flows for the years ended December 31, 1995 and 1996 and
for the four months ended April 30, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements present fairly, in all material
respects, the financial position of the Company at December 31, 1996, and the
results of its operations and its cash flows for the years ended December 31,
1995 and 1996 and for the four months ended April 30, 1997.

DELOITTE & TOUCHE LLP
Cleveland, Ohio
September 15, 1998

F-19
68

ANTHONY & SYLVAN POOLS, INC.

BALANCE SHEET

DECEMBER 31, 1996

(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

ASSETS
Current Assets:
Cash and cash equivalents................................. $ 1,832
Contract receivables, net of allowance for doubtful
accounts of $460....................................... 4,472
Inventories............................................... 4,783
Prepayments and other..................................... 492
Deferred income taxes..................................... 1,788
-------
Total current assets.............................. 13,367
Property, Plant and Equipment, at cost:
Land...................................................... 325
Buildings................................................. 2,353
Machinery and equipment................................... 5,935
-------
Total............................................. 8,613
Less accumulated depreciation............................... 5,041
-------
Net property, plant and equipment................. 3,572
Other Assets:
Goodwill, net of accumulated amortization................. 3,070
Other..................................................... 649
-------
Total other assets................................ 3,719
-------
TOTAL ASSETS...................................... $20,658
=======
LIABILITIES AND SHAREHOLDER'S DEFICIT
Current Liabilities:
Current maturities of long-term debt...................... $ 531
Notes payable............................................. 3,379
Accounts payable.......................................... 3,157
Accrued expenses.......................................... 9,936
-------
Total current liabilities......................... 17,003
Long-Term Debt.............................................. 5,880
Other Long-Term Liabilities................................. 1,177
Commitments and Contingencies............................... --
Shareholder's Deficit:
Common Shares, $1.00 par value; 20,000 shares authorized,
20,000 shares issued and outstanding................... 20
Retained Earnings......................................... 1,771
Payable to Shareholder.................................... (5,193)
-------
Total Shareholder's Deficit....................... (3,402)
-------
TOTAL LIABILITIES AND SHAREHOLDER'S DEFICIT....... $20,658
=======

See notes to financial statements.

F-20
69

ANTHONY & SYLVAN POOLS, INC.

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996
AND THE FOUR MONTHS ENDED APRIL 30, 1997

(DOLLARS IN THOUSANDS)

FOUR MONTHS
ENDED
DECEMBER 31, DECEMBER 31 APRIL 30,
1995 1996 1997
------------ ------------ -----------

Net sales............................................ $58,569 $112,167 $28,883
Cost of sales........................................ 42,454 82,018 22,291
------- -------- -------
Gross profit......................................... 16,115 30,149 6,592
Operating expenses:
Selling............................................ 9,373 18,875 6,073
Administrative..................................... 5,695 9,049 3,980
------- -------- -------
Total operating expenses................... 15,068 27,924 10,053
------- -------- -------
Income/(loss) from operations........................ 1,047 2,225 (3,461)
Interest and other expense........................... 101 354 303
------- -------- -------
Income/(loss) before income taxes.................... 946 1,871 (3,764)
Provision/(benefit) for income taxes................. 342 704 (1,350)
------- -------- -------
Net income/(loss).................................... $ 604 $ 1,167 $(2,414)
======= ======== =======

See notes to financial statements.

F-21
70

ANTHONY & SYLVAN POOLS, INC.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996
AND THE FOUR MONTHS ENDED APRIL 30, 1997

(DOLLARS IN THOUSANDS)

FOUR MONTHS
ENDED
DECEMBER 31, DECEMBER 31, APRIL 30,
1995 1996 1997
------------ ------------ -----------

Cash Flows For Operating Activities:
Net income/(loss).................................. $ 604 $1,167 $(2,414)
Adjustments to reconcile net income/(loss) to net
cash provided by operating activities:
Depreciation and amortization................... 462 1,066 470
Non-cash interest............................... -- 426 116
Deferred income taxes........................... (165) (207) (631)
Changes in operating assets and liabilities net of
assets acquired:
Contract receivables............................ 748 (574) 491
Inventories..................................... (50) (13) (1,031)
Prepayments and other........................... (33) (462) 218
Accounts payable................................ (208) 1,559 3,251
Accrued expenses................................ 480 2,499 1,551
------- ------ -------
Cash provided by operating activities......... 1,838 5,461 2,021
------- ------ -------
Cash Flows For Investing Activities:
Additions to property, plant and equipment......... (169) (329) (259)
Acquisition costs.................................. -- (223) --
------- ------ -------
Cash used in investing activities............. (169) (552) (259)
------- ------ -------
Cash Flows From Financing Activities:
Net transactions with General Aquatics, Inc........ (1,021) (7,052) (7,224)
Proceeds from long-term debt....................... -- 3,379 3,825
Payments on capital lease obligations.............. (370) (496) (150)
------- ------ -------
Cash used in financing activities............. (1,391) (4,169) (3,549)
------- ------ -------
Net increase/(decrease) in cash and cash
equivalents........................................ 278 740 (1,787)
Cash and cash equivalents:
Beginning of period................................ 814 1,092 1,832
------- ------ -------
End of period...................................... $ 1,092 $1,832 $ 45
======= ====== =======
Supplemental Cash Flow Information:
Interest paid...................................... $ 97 $ 47 $ 272
Income taxes paid, net............................. $ 583 $ 745 $ --
Purchases of equipment under capital leases........ $ 437 $ 179 $ 493
Note payable issued for business acquisition....... $ -- $5,355 $ --

See notes to financial statements.

F-22
71

ANTHONY & SYLVAN POOLS, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996
AND THE FOUR MONTHS ENDED APRIL 30, 1997

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION -- Anthony & Sylvan Pools, Inc. (the "Company") is
the largest residential in-ground concrete pool sales and installation business
in the United States.

On May 1, 1997, substantially all of the Company's operating assets were
acquired and certain of its liabilities assumed by Essef Corporation and
subsidiaries as part of an acquisition transaction with General Aquatics, Inc.
(the "Parent"), of which Anthony & Sylvan, Inc. was a subsidiary. The
accompanying financial statements are presented under the Company's historical
basis of accounting and do not reflect any adjustments which would be required
as a result of the acquisition by Essef Corporation. Separate financial
statements have been issued for the period subsequent to the acquisition which
contemplate the adjustments required under the purchase method of accounting.
Company management believes that the financial statements reflect all material
expenses of the Company assuming the Company were organized as a stand-alone
legal entity, including specifically identifiable costs incurred by the Parent
on behalf of, and charged to, the Company.

In March, 1996, the Company purchased certain assets and assumed certain
liabilities of Anthony Pools, a division of Anthony Industries, Inc., a
residential in-ground concrete swimming pool installation business. Subsequent
to the acquisition the Company changed its name to Anthony & Sylvan Pools, Inc.

CASH AND CASH EQUIVALENTS -- The Company considers all highly liquid
short-term investments with initial maturities of three months or less to be
cash equivalents.

Financial instruments which subject the Company to concentrations of credit
risk consist primarily of contract receivables. Concentration with respect to
contract receivables is limited due to the large number of customers comprising
the Company's customer base and their geographical dispersion.

INVENTORIES -- Inventories consist primarily of goods purchased for
installation in pools and are stated at the lower of cost or market. Cost is
determined using the first-in, first-out method. At December 31, 1996, the
Company has a $100,000 reserve on these inventories.

FIXED ASSETS -- Depreciation is computed using the straight-line method for
financial reporting purposes. Accelerated methods are used for tax reporting
purposes. Assets, valued at cost, are generally being depreciated over their
useful lives as follows: buildings 10 to 40 years; and machinery and equipment,
3 to 10 years.

GOODWILL -- Goodwill arising from the acquisition of Anthony Pools is being
amortized using the straight-line method over fifteen years. Accumulated
amortization at December 31, 1996 was $222,000. The Company periodically
evaluates the recoverability of goodwill by comparing the book value of such
assets to expected future cash flows, on an undiscounted basis, over the
remaining amortization period of the asset. At December 31, 1996, no such
impairment has been recorded.

F-23
72
ANTHONY & SYLVAN POOLS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996
AND THE FOUR MONTHS ENDED APRIL 30, 1997

those deferred because of temporary differences between the financial statement
and tax bases of assets and has been computed as if the Company was a
stand-alone entity. The accompanying balance sheet includes deferred tax amounts
applicable to the Company.

REVENUE RECOGNITION -- Revenue from pool installation contracts is
recognized on the percentage-of-completion accounting method based on the
proportion of total costs incurred on the contract as a percentage of total
estimated contract costs. Revisions in cost and revenue estimates are reflected
in the period in which the facts requiring such revisions become known.
Provision is made currently for estimated losses on uncompleted installations.
The majority of the Company's contracts call for progress payments to be made in
advance of completing individual phases of the installation until the final
phases of installation, at which time the remaining portion is recognized as a
contract receivable. Progress payments in excess of revenue recognized are
classified as billings in excess of costs and estimated earnings on uncompleted
contracts, and are included in accrued expenses. Unbilled contract receivables
are not material at any point in time.

Contract costs include direct material, labor, subcontract costs and
overheads. Selling and administrative expenses are charged to income as
incurred.

USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the period. Actual results could differ from those estimates.

2. RELATED PARTY TRANSACTIONS

The Company purchases swimming pool and spa equipment used in its swimming
pool installations from other companies who are also wholly owned subsidiaries
of the Parent. These purchases are made on an arms length basis, on terms
similar to those to which those Companies sell to their other customers and are
not subject to any long term supply agreements. Total purchases from related
Companies for the years ended December 31, 1995 and 1996 and the four months
ended April 30, 1997 were $2,141,000, $3,985,000 and $1,558,000. Amounts payable
by the Company to related companies totaling $278,000 are included as accounts
payable at December 31, 1996.

3. ACQUISITION OF ANTHONY POOLS

In March, 1996, the Company purchased certain assets and assumed certain
liabilities of Anthony Pools, a division of Anthony Industries, Inc. for
$6,253,000. Anthony Pools was primarily involved in the installation of
residential pools. Subsequent to the acquisition the Company changed its name to
Anthony & Sylvan Pools, Inc. The purchase price was paid by issuance of
subordinated debt of $6,178,000 (discounted to $5,355,000), warrants to purchase
455,556 shares of the Parent's common stock (at $13.56 per share), and 100,000
shares of the Parent's common stock. The acquisition has been accounted for as a
purchase, and thus, the purchase price has been allocated to the assets and
liabilities acquired, based on their estimated fair value as of the date of
acquisition. The results of operations have been included in the Company's
results since the date of acquisition. The cost in excess of the fair value of
the net assets acquired is being amortized on a straight-line basis over fifteen
years.
F-24
73
ANTHONY & SYLVAN POOLS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996
AND THE FOUR MONTHS ENDED APRIL 30, 1997

The following table is a summary of the transaction (dollars in thousands):

Fair value of identifiable assets acquired.................. $7,510
Costs in excess of net assets acquired...................... 3,292
Less liabilities assumed.................................... (4,549)
------
Net consideration paid for acquisition...................... $6,253
======

The following unaudited pro-forma combined results of operations give
effect to the acquisition as though it was completed at the beginning of each
period shown. The pro-forma information has been presented for comparative
purposes only and does not purport to be indicative of what would have occurred
had the acquisition been made at the beginning of the earliest period presented,
or of results which may occur in the future (dollars in thousands) (unaudited):

YEARS ENDED DECEMBER 31,
------------------------
1995 1996
--------- ---------

Net sales............................................ $123,918 $119,480
Net income........................................... $ 94 $ (50)

4. SHAREHOLDER'S DEFICIT

Shareholder's deficit consisted of the following for the year ended
December 31, 1996 (dollars in thousands):

COMMON RETAINED PAYABLE TO
SHARES EARNINGS SHAREHOLDER TOTAL
------ -------- ----------- -----

Balance, January 1, 1996............... $20 $ 604 $ 859 $ 1,483
Net income........................... 1,167 1,167
Net transactions with shareholder.... (6,052) (6,052)
--- ------ ------- -------
Balance, December 31, 1996............. $20 $1,771 $(5,193) $(3,402)
=== ====== ======= =======

5. ACCRUED EXPENSES

Accrued expenses consisted of the following at December 31, 1996 (dollars
in thousands):

Billings in excess of costs and estimated earnings on
uncompleted contracts..................................... $ 3,592
Warranty.................................................... 2,304
Accrued compensation........................................ 2,256
Other....................................................... 1,784
-------
Total............................................. $ 9,936
=======

6. NOTES PAYABLE

At December 31, 1996, the Company had $3,379,000 outstanding under a bank
line of credit. These facilities were made available under the Parent's
revolving line of credit agreement which allows for borrowings of up to $20
million, subject to sub-limits based on secured accounts receivable, inventory
and equipment levels of the Parent and its subsidiaries. Interest was payable at
the bank's prime rate (8.25 percent at December 31,

F-25
74
ANTHONY & SYLVAN POOLS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996
AND THE FOUR MONTHS ENDED APRIL 30, 1997

1996) plus .75 percent or the Eurodollar rate plus 2 percent. The line of credit
had an expiration date of November 30, 1999. On May 1, 1997, the line of credit
was repaid in conjunction with the acquisition of General Aquatics, Inc. by
Essef Corporation (see Note 1).

7. LONG-TERM DEBT

Long-term debt consists of the following at December 31, 1996 (dollars in
thousands):

Acquisition note............................................ $5,781
Capital lease obligations................................... 630
------
6,411
Less current maturities..................................... (531)
------
Total............................................. $5,880
======

The acquisition note represents a subordinated note payable to Anthony
Industries, Inc. in the amount of $6,178,000 due March 1, 2001. Interest accrues
at 5.61 percent commencing September 1, 1996. Interest charged through March 1,
1997 is to be converted semiannually to notes with similar terms to the original
acquisition note. This note has been discounted to $5,355,000 which represents
its fair market value at a 9 percent interest rate. At December 31, 1996
$426,000 of additional notes had been issued for interest charges.

The Company has capital leases for the purchase of automobiles and other
equipment with a net book value of approximately $830,000 at December 31, 1996.
The leases are collateralized by the automobiles and the equipment purchased. At
December 31, 1996, the total future minimum payments under these leases was
$755,000, with $125,000 representing payments for future interest at an average
interest rate of approximately 10%.

Aggregate maturities of long-term debt are the following: 1997, $531,000;
1998, $99,000; and 2001, $5,781,000.

8. INCOME TAXES

The significant components of the provision/(benefit) for income taxes are
as follows (dollars in thousands):

YEAR ENDED
DECEMBER 31, FOUR MONTHS
------------- ENDED
1995 1996 APRIL 30, 1997
----- ---- --------------

Current:
Federal................................................... $ 464 $836 $ (658)
State..................................................... 43 75 (61)
----- ---- -------
Total current..................................... 507 911 (719)
----- ---- -------
Deferred:
Federal................................................... (151) (190) (578)
State..................................................... (14) (17) (53)
----- ---- -------
Total deferred.................................... (165) (207) (631)
----- ---- -------
Total............................................. $ 342 $704 $(1,350)
===== ==== =======

F-26
75
ANTHONY & SYLVAN POOLS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996
AND THE FOUR MONTHS ENDED APRIL 30, 1997

The Company's deferred tax assets at December 31, 1996 are comprised
primarily of non-deductible accruals for doubtful accounts, warranty expenses
and reserves for inventory obsolescence.

The consolidated tax provision/(benefit) differs from the tax
provision/(benefit) computed at the statutory United States tax rate of 34% for
following reasons (dollars in thousands):

YEAR ENDED
DECEMBER 31, FOUR MONTHS
------------ ENDED
1995 1996 APRIL 30, 1997
---- ---- --------------

Tax provision/(benefit) at statutory Federal rate........... $322 $636 $(1,280)
State income taxes.......................................... 19 38 (75)
Other items, net............................................ 1 30 5
---- ---- -------
Provision/(benefit) for income taxes........................ $342 $704 $(1,350)
==== ==== =======

9. OPERATING LEASES

The Company leases certain of its facilities and equipment. Total rental
expenses under operating leases for the years ended December 31, 1995 and 1996
and the four months ended April 30, 1997 were approximately $1,025,000,
$1,819,000 and $536,000, respectively. Minimum annual rental commitments for the
next five years under non-cancelable operating leases are the following: 1998,
$1,628,000; 1999, $1,150,000; 2000, $876,000; 2001, $582,000; 2002, $297,000;
and $664,000 thereafter.

10. RETIREMENT PLANS

The Company and certain other subsidiaries of the Parent maintain a defined
contribution plan covering substantially all of its employees. Participants are
permitted to make pretax contributions to the plans as a percentage of
compensation. The Company matches participant contributions, up to specified
limits. Total Company contributions for the years ended December 31, 1995 and
1996 and for the four months ended April 30, 1997 were approximately $250,000,
$283,000 and $177,000, respectively.

Until April 30, 1997, the Company maintained noncontributory defined
benefit pension plans covering substantially all of its full-time employees. The
plans provided pension benefits that were based on years of service and the
employee's total compensation. It was the Company's policy to make annual
contributions required by applicable regulations. The assets and liabilities of
the plans were not acquired by Essef Corporation in conjunction with its
acquisition of General Aquatics, Inc. (See Note 1).

Significant assumptions used in the plans' actuarial valuations were:

YEAR ENDED
DECEMBER 31, FOUR MONTHS
------------ ENDED
1995 1996 APRIL 30, 1997
---- ---- --------------

Discount rate............................................... 7.25% 7.25% 7.25%
Long-term rate of investment return......................... 9.00% 9.00% 9.00%

F-27
76
ANTHONY & SYLVAN POOLS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996
AND THE FOUR MONTHS ENDED APRIL 30, 1997

Net periodic pension cost consists of the following (dollars in thousands):

YEAR ENDED DECEMBER 31, FOUR MONTHS
----------------------- ENDED
1995 1996 APRIL 30, 1997
------------ ------------ --------------

Service cost-benefits earned during the
period................................... $ 17 $ 18 $ 5
Interest cost on projected benefit
obligation............................... 62 63 23
Return on plan assets...................... (35) (35) (11)
Net amortization and deferral.............. 42 42 3
---- ---- ----
Net periodic pension cost.................. $ 86 $ 88 $ 20
==== ==== ====

The funded status of the defined benefit plans and the amounts recognized
in the balance sheet at December 31, 1996 are as follows (dollars in thousands):

Projected benefit obligation................................ $ 930
Fair value of plan assets................................... 395
-----
Plan assets less than projected benefit obligation.......... 535
Unrecognized net (gain) loss................................ 496
Unrecognized prior service cost............................. 120
Minimum liability adjustment................................ (616)
-----
Accrued pension liability................................... $ 535
=====
Vested actuarial present value of benefit obligation........ $ 899
=====
Accumulated benefit obligation.............................. $ 930
=====

11. LITIGATION

F-28
77

- ------------------------------------------------------------
- ------------------------------------------------------------

NO DEALER, SALESPERSON, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY OF THE UNDERWRITERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY ANY SECURITIES OTHER THAN THE COMMON SHARES OFFERED BY THIS PROSPECTUS,
NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE
COMMON SHARES BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED, OR IN WHICH THE PERSON IS NOT QUALIFIED TO DO SO, OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.

------------------

TABLE OF CONTENTS

PAGE
----

Prospectus Summary......................... 3
Risk Factors............................... 8
Use of Proceeds............................ 13
Dividend Policy............................ 13
Capitalization............................. 14
Dilution................................... 15
Selected Historical Financial Data......... 16
Unaudited Pro Forma Financial Data......... 17
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................... 19
Business................................... 24
Management................................. 29
Relationship Between the Company and
Essef.................................... 37
Principal Shareholder...................... 39
Description of Capital Stock............... 40
Shares Eligible for Future Sale............ 43
Underwriting............................... 45
Legal Matters.............................. 46
Experts.................................... 46
Available Information...................... 46
Index to Consolidated Financial
Statements............................... F-1

UNTIL , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON SHARES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.

COMMON SHARES
---------------------

PROSPECTUS

---------------------

MCDONALD & COMPANY
SECURITIES, INC.

FRIEDMAN, BILLINGS,
RAMSEY & CO., INC.

MORGAN KEEGAN & COMPANY, INC.

, 1998

- ------------------------------------------------------------
- ------------------------------------------------------------
78

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth an estimate of the expenses expected to be
incurred in connection with the issuance and distribution of the securities
being registered, other than underwriting compensation:

NOTICE OF EXPENSE AMOUNT
----------------- --------

Registration Fee -- Securities and Exchange Commission*..... $ 6,638
Filing Fee -- National Association of Securities Dealers*... 2,750
Nasdaq National Market Listing and Entry Fee*............... 80,000
Transfer Agent and Registrar Fees and Expenses*............. 10,000
Legal Fees and Expenses*.................................... 200,000
Accounting Fees and Expenses*............................... 200,000
Printing and Engraving Expenses*............................ 200,000
Miscellaneous*.............................................. 75,000
--------
Total*............................................ $774,388
========

- ---------------

* Estimate

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 33 of the Company's Amended and Restated Regulations provides that
the Company will indemnify any director or officer or any former director or
officer of the Company or any person who is or has served at the request of the
Company as a director, officer or trustee of another corporation, joint venture,
trust or other enterprise (and his heirs, executors and administrators) against
expenses, including attorneys' fees, judgments, fines and amounts paid in
settlement, actually and reasonably incurred by him by reason of the fact that
he is or was such director, officer or trustee in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative to the full extent and according to
the procedures and requirements set forth in the Ohio General Corporation Law as
the same may be in effect from time to time.

Section 33 further provides that the indemnification provided for therein
shall not be deemed to restrict the right of the Company to indemnify employees,
agents and others as permitted by such law, and shall be in addition to any
other rights granted to those seeking indemnification under the Company's
Amended and Restated Articles or Incorporation or Amended and Restated
Regulations or any Indemnification Agreement (as hereinafter defined), vote of
shareholders or disinterested directors, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.

In addition, Section 33 provides that the Company is expressly authorized
to enter into agreements which grant rights of indemnification to any person or
entity. The Company has entered into indemnification agreements
("Indemnification Agreements") with its directors and executive officers
("Indemnitees") Pursuant to each Indemnification Agreement, the Company must
indemnify the Indemnitee with respect to his activities as a director or officer
of the Company and/or as a person who is serving or has served on behalf of the
Company ("Representative") as a director, officer or trustee of another
corporation, joint venture, trust or other enterprise, domestic or foreign, in
which the Company has a direct or indirect ownership interest against expenses
(including, without limitation, attorneys' fees, judgments, fines and amounts
paid in settlement) actually and reasonably incurred by him ("Expenses") in
connection with any claim against the Indemnitee which is the subject of any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, investigative or otherwise and whether formal or
informal (a "Proceeding"), to which the Indemnitee was, is

II-1
79

or is threatened to be made a party by reason of facts which include the
Indemnitee's being or having been such a director, officer or Representative, to
the extent of the highest and most advantageous to the Indemnitee, as determined
by the Indemnitee, of one or any combination of the following:

(a) The benefits provided by the Company's Amended and Restated Regulations
as of the date of the Indemnification Agreement;

(b) The benefits provided by the Company's Amended and Restated Articles of
Incorporation, Amended and Restated Regulations or By-laws or their equivalent
of the Company in effect at the time Expenses are incurred by the Indemnitee;

(d) The benefits allowable under the law of the jurisdiction under which
the Company exists at the time Expenses are incurred by the Indemnitee;

(e) The benefits available under liability insurance obtained by the
Company;

(f) The benefits which would have been available to the Indemnitee under
his Executive Liability Insurance Policy; and

(g) Such other benefits as are or may be otherwise available to the
Indemnitee.

The Indemnification Agreements provide for the advancement of Expenses to
the Indemnitee if the Indemnitee provides the Company with a written undertaking
that (i) the Indemnitee has notified the Company of any Proceeding; (ii) the
Indemnitee believes he should prevail in the Proceeding and (iii) that the
Indemnitee will reimburse the Company for all Expenses if it is determined that
the Indemnitee is not entitled to indemnification.

Section 33 also authorizes the Company to purchase and maintain insurance
or furnish similar protection, including but not limited to trust funds, letters
of credit or self-insurance, on behalf of or for any person who is or was a
director, officer, employee or agent of the Company, or is or was serving at the
request of the Company as a director, trustee, officer, employee or agent of
another corporation, joint venture, trust or other enterprise (and his heirs,
executors and administrators), against any liability asserted against him and
incurred by him in such capacity, or arising out of his status as such,
regardless of whether the Company would have indemnified him against such
liability under any other provision of Section 34. It further provides that
insurance may be purchased from or maintained with a person in which the Company
has a financial interest.

The Underwriting Agreement provides that the Underwriters are obligated,
under certain circumstances, to indemnify directors, officers, and controlling
persons of the Company against certain liabilities, including liabilities under
the Securities Act of 1933, as amended (the "Act"). Reference is made to the
form of Underwriting Agreement filed as Exhibit 1.1 hereto.

The Company has obtained, through Essef, director and officer liability
insurance covering its current executive officers and directors.

II-2
80

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(A) EXHIBITS. The following Exhibits are filed as a part of this
Registration Statement:

EXHIBIT
NO. DESCRIPTION
------- -----------

*1.1 Underwriting Agreement
3.1 Form of Amended and Restated Articles of Incorporation of
the Registrant
3.2 Form of Amended and Restated Regulations of the Registrant
4.1 Specimen certificate for Common Shares of the Registrant
4.2 See Exhibits 3.1 and 3.2 for provisions of the Amended and
Restated Articles of Incorporation and Amended and Restated
Regulations of the Registrant defining rights of holders of
Common Shares
5.1 Opinion of Squire, Sanders & Dempsey L.L.P. as to the
legality of the Common Shares being registered (including
consents)
10.1 Form of 1998 Long-Term Incentive Plan
10.2 Form of Executive Employment Agreement between Stuart D.
Neidus and the Registrant
10.3 Form of Executive Employment Agreement between Howard A.
Wertman and the Registrant
10.4 Form of Executive Employment Agreement between Richard M.
Kelso and the Registrant
10.5 Form of Indemnification Agreement
10.6 Form of Revolving Credit Promissory Note
10.7 Form of Company Indemnification Agreement
10.8 Form of Tax Allocation Agreement
10.9 Form of Administrative Services Agreement
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Squire, Sanders & Dempsey L.L.P. (see Exhibit
5.1)
24.1 Power of Attorney (included elsewhere in Part II of this
Registration Statement)

- ---------------

* To be filed by amendment.

(B) FINANCIAL STATEMENT SCHEDULES.

The following financial statement schedules of the Company are attached
hereto and are filed as part of this Registration Statement:

Report of Independent Auditors

Schedule II -- Valuation and qualifying accounts

All other schedules are omitted because the required information is either
presented in the financial statements or notes thereto, or is not applicable,
required or material.

ITEM 17. UNDERTAKINGS.

(f) The undersigned Registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreements certificates
in such denominations and registered in such names as required by the
underwriter to permit prompt delivery to each purchaser.

(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions described in Item 14 above,
or otherwise, the Registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is, therefore,

II-3
81

unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

(i) The undersigned Registrant hereby undertakes that:

(1) for purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-4
82

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Chardon,
State of Ohio, on , 1998.

ANTHONY & SYLVAN POOLS CORPORATION

By: /s/ STUART D. NEIDUS

------------------------------------
Stuart D. Neidus
Chairman of the Board,
Chief Executive Officer
and Chief Financial Officer

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Mary Ann
Jorgenson, Stuart D. Neidus and Thomas B. Waldin, or any one of them, as his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution for him and in his name, place and stead in any and all
capacities to execute in the name of each such person who is then an officer or
director of the Registrant any and all amendments (including post-effective
amendments) to this Registration Statement, and any registration statement
relating to the Offering hereunder pursuant to Rule 462 under the Securities Act
of 1933, as amended, and to file the same with all exhibits thereto and other
documents in connection therewith with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents and each of them full power and
authority to do and perform each and every act and thing required to necessary
to be done in and about the premises as fully as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed effective as of , 1998 by the
following persons in the capacities indicated below.

SIGNATURE TITLE
- --------- -----

/s/ STUART D. NEIDUS Chairman of the Board, Chief Executive Officer and
- --------------------------------------------- Chief Financial Officer (Principal Executive Officer
Stuart D. Neidus and Principal Financial and Accounting Officer)

/s/ HOWARD P. WERTMAN President
- ---------------------------------------------
Howard P. Wertman

/s/ RICHARD M. KELSO Executive Vice President
- ---------------------------------------------
Richard M. Kelso

/s/ THOMAS B. WALDIN Director
- ---------------------------------------------
Thomas B. Waldin

/s/ MARY ANN JORGENSON Director
- ---------------------------------------------
Mary Ann Jorgenson

II-5
83

INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULES

To the Board of Directors and Shareholders of
Anthony & Sylvan Pools Corporation
Chardon, Ohio

We consent to the use in this Registration Statement of Anthony & Sylvan
Pools Corporation on Form S-1 of our reports on the financial statements of
Anthony & Sylvan Pools Corporation dated September 15, 1998, and Anthony &
Sylvan Pools, Inc. dated September 15, 1998, appearing in the Prospectus, which
is a part of this Registration Statement, and to the references to us under the
heading "Experts" in such Prospectus.

Our audits of the financial statements referred to in our aforementioned
reports also included the financial statement schedules of Anthony & Sylvan
Pools Corporation and Anthony & Sylvan Pools, Inc. listed in Item 16(b). These
financial statement schedules are the responsibility of the Corporation's
management. Our responsibility is to express an opinion based on our audits. In
our opinion, such financial statement schedules, when considered in relation to
the basic financial statements taken as a whole, present fairly in all material
respects the information set forth therein.

Deloitte & Touche LLP

Cleveland, Ohio
September 15, 1998

II-6
84

SCHEDULE II

ANTHONY & SYLVAN POOLS CORPORATION
VALUATION AND QUALIFYING ACCOUNTS

BALANCE AT BALANCE
BEGINNING OF CHARGED TO AT END
DESCRIPTION PERIOD EXPENSE WRITE-OFFS OF PERIOD
----------- ------------ ---------- ---------- ---------

ALLOWANCE FOR DOUBTFUL ACCOUNTS
For the year ended December 31, 1995 $ 93 $ 260 $ 171 $ 182
For the year ended December 31, 1996 $ 182 $ 412 $ 134 $ 460
For the four months ended April 30,
1997 $ 460 $ 157 $ 101 $ 516
For the year ended December 31, 1997 $ 516 $ 265 $ 73 $ 708
- --------------------------------------------
RESERVE FOR INVENTORY OBSOLESCENCE
For the year ended December 31, 1995 $ 100 $ -- $ -- $ 100
For the year ended December 31, 1996 $ 100 $ -- $ -- $ 100
For the four months ended April 30,
1997 $ 100 $ 119 $ -- $ 219
For the year ended December 31, 1997 $ 219 $ 266 $ -- $ 485

II-7
85

EXHIBIT INDEX

EXHIBIT
NO. DESCRIPTION
- ------- -----------

*1.1 Underwriting Agreement
3.1 Form of Amended and Restated Articles of Incorporation of
the Registrant
3.2 Form of Amended and Restated Regulations of the Registrant
4.1 Specimen certificate for Common Shares of the Registrant
4.2 See Exhibits 3.1 and 3.2 for provisions of the Amended and
Restated Articles of Incorporation and Amended and Restated
Regulations of the Registrant defining rights of holders of
Common Shares
5 Opinion of Squire, Sanders & Dempsey L.L.P. as to the
legality of the Common Shares being registered (including
consents)
10.1 Form of 1998 Long-Term Incentive Plan
10.2 Form of Executive Employment Agreement between Stuart D.
Neidus and the Registrant
10.3 Form of Executive Employment Agreement between Howard A.
Wertman and the Registrant
10.4 Form of Executive Employment Agreement between Richard M.
Kelso and the Registrant
10.5 Form of Indemnification Agreement
10.6 Form of Revolving Credit Promissory Note
10.7 Form of Company Indemnification Agreement
10.8 Form of Tax Allocation Agreement
10.9 Form of Administrative Services Agreement
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Squire, Sanders & Dempsey L.L.P. (see Exhibit
5.1)
24.1 Power of Attorney (included elsewhere in Part II of this
Registration Statement)

- ---------------

* To be filed by amendment