<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (Fee Required)
For the fiscal year ended September 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (No Fee Required)
For the transition period from to
Commission File No. 0-15902
ESSEF CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Ohio
------------------------------------------------------
STATE OF INCORPORATION)
220 Park Drive, Chardon, Ohio
------------------------------------------------------
ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
34-0777631
------------------------------------------------------
(I.R.S. EMPLOYER IDENTIFICATION NO.)
44024
------------------------------------------------------
(ZIP CODE)
Registrant's telephone number, including area code: (440) 286-2200
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
<TABLE>
<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
- ----------------------------------------------------------------------------------------------
<S> <C>
Common Shares, The Company's common stock trades on The Nasdaq
No Par Value. Stock Market under the symbol ESSF.
</TABLE>
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, during the preceding 12 months, and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
The aggregate market value of the Registrant's Common Shares held by
non-affiliates of the Registrant on December 12, 1997 was $96,074,643
Indicate the number of shares outstanding of each of the issuer's classes
of common shares, as of the latest practicable date.
<TABLE>
<CAPTION>
CLASS OUTSTANDING AT DECEMBER 12, 1997
- ----------------------------------------------------------------------------------------------
<S> <C>
Common Shares, no par value.................... 10,594,406 Shares
</TABLE>
Portions of the following documents are incorporated by reference:
(1) 1997 Annual Report to Shareholders Part II
(2) Definitive Proxy Statement for the Annual Meeting of Shareholders to be held
January 29, 1998 Part III
The sequential page in this Report where the Exhibit Index appears is 15.
<PAGE> 2
1997 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
PART I
<TABLE>
<CAPTION>
BEGINS
ON
PAGE
------
<S> <C> <C>
Item 1 Business.................................................................... 3
Item 2 Properties.................................................................. 7
Item 3 Legal Proceedings........................................................... 8
Item 4 Submission of Matters to a Vote of Security Holders......................... 9
PART II
Item 5 Market for the Registrant's Common Equity and Related
Shareholders' Matters....................................................... 9
Item 6 Selected Financial Data..................................................... 9
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations......................................... 9
Item 8 Financial Statements and Supplementary Data................................. 9
Item 9 Disagreements on Accounting and Financial Disclosure........................ 9
PART III
Item 10 Directors and Executive Officers of the Registrant.......................... 9
Item 11 Executive Compensation...................................................... 10
Item 12 Security Ownership of Certain Beneficial Owners and
Management.................................................................. 10
Item 13 Certain Relationships and Related Transactions.............................. 10
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on
Form 8-K.................................................................... 11
</TABLE>
2
<PAGE> 3
PART I
ITEM 1. BUSINESS.
(a) GENERAL DEVELOPMENT OF BUSINESS.
Essef Corporation "The Company" was incorporated in Ohio in 1954 as
Structural Fibers, Inc. and commenced operations by focusing on an emerging
technology: the use of fiberglass reinforced plastics (FRP) as an alternative to
metal in cast, forged, and other formed or fabricated parts. The Company, having
a strong engineering oriented emphasis, pioneered the production of such
products for use in Polaris and Hercules missiles, jet engines, electrical
components, and other national defense related items.
This experience helped the Company successfully develop a proprietary
molding technology that radically changed its direction. Perfection of the
internal bag-molding process enabled mass production of seamless pressure
vessels with fiberglass-reinforced plastic, and in 1959, the Company began to
specialize in the manufacture of these products.
During the last five years, the Company's development has focused on growth
by acquisitions in the U.S. and internal growth both in the U.S. and
internationally.
In 1994, the Company acquired Purex Pool Systems, Inc., a manufacturer of
pumps, filters and heaters for swimming pools and spas.
In 1995, the Company acquired Advanced Structures, Inc., a manufacturer of
pressure vessels and other components for the treatment of water; acquired
Euroimpex Srl in Milan, Italy, a manufacturer of pressure vessels and other
components for the treatment of water; and acquired Compool Corporation, a
manufacturer of electronic controls and valves for swimming pools and spas.
In 1996, the Company formed Structural India Private, Ltd. which during
1997 built a plant in Goa, India to manufacture pressure vessels for sale in
India, Asia, Europe and the U.S.
In 1997, the Company acquired certain assets and assumed certain
liabilities of General Aquatics, Inc. General Aquatics consisted of three
business units: American Products, Paragon and Anthony & Sylvan Pools. American
Products and Paragon design and manufacture swimming pool and spa equipment for
the residential, commercial, institutional and municipal markets and have been
integrated into the Company's Swimming Pool and Spa Equipment Segment. Anthony &
Sylvan is the largest in-ground residential swimming pool sales and installation
business in the United States and now comprises a new, and the third segment of
the Company, the Swimming Pool Sales and Installation Segment. Also, in 1997 the
Company acquired selected assets of Stark Aquatics, a manufacturer of large
composite filter systems for application in commercial pools, waterparks and
aquariums. The assets of Stark were merged with Paragon to form Paragon
Aquatics.
The Company disposed of its Hobson Brothers Aluminum Foundry and Moldworks,
Inc. subsidiary in 1997.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS.
[For financial information about industry segments in which the Company
operates, see Item 8 Financial Statements and Supplementary Data; Note 11:
Business Segment Information under Notes to Consolidated Financial Statements.]
(c) NARRATIVE DESCRIPTION OF BUSINESS.
The Company operates in three industry segments: Water Treatment and
Systems Equipment; Swimming Pool and Spa Equipment; and Swimming Pool Sales and
Installation. The Water Treatment and Systems Equipment Segment manufactures
products for moving, storing and treating water in residential, commercial,
industrial and municipal water supply systems. The Swimming Pool and Spa
Equipment Segment manufactures pumps, filters, heaters, controls, valves, lights
and other components for swimming pools and spas. Geographically, the operations
of the two previously described segments are located principally in the United
States, Europe and most recently India. The Swimming Pool Sales and Installation
Segment installs concrete in-ground
3
<PAGE> 4
residential swimming pools in most major markets in the United States. Following
is a description of each of the three segments:
WATER TREATMENT AND SYSTEMS EQUIPMENT INDUSTRY SEGMENT
PRINCIPAL PRODUCTS
The Company manufactures and distributes fiberglass reinforced plastic
pressure vessels for the treatment, storage and delivery of water for
residential, commercial, industrial and municipal use. The Company produces two
companion lines of vessels, distinguishable by design and method of construction
but not by purpose or function, for sale to both the water treatment equipment
and water systems equipment markets of this industry segment. The vessels
comprising what has become known as the FRP product line (an acronym for
fiberglass reinforced plastic) are integrally cast of a matrix of thermosetting
resin and randomly laid chopped fiberglass reinforcing filaments. By contrast,
the vessels comprising the newer polyglass (PolyGlass(TM)) product line are
either blow-molded or rotationally cast of thermoplastic resins and then
reinforced by a patterned winding of continuous fiberglass filaments. The
Company also manufactures composite pressure vessel housings for industrial and
municipal reverse osmosis membrane systems using a form of the aforementioned
fiberglass filament winding process.
Also, within this segment, the Company's ENPAC business unit manufactures
engineered plastic vessels and related accessory products for spill prevention,
secondary containment and regulated transport of industrial and environmentally
hazardous waste materials.
[For information relating to sales of the Water Treatment and Systems
Equipment Segment, see Item 8 Financial Statements and Supplementary Data;
Note 11: Business Segment Information under Notes to Consolidated Financial
Statements.]
CUSTOMERS AND DISTRIBUTION
The Company sells water treatment products to major original equipment
manufacturers (OEMs) in the United States, Canada, Europe, Asia and other
international markets through salaried sales personnel and commissioned sales
representatives. It sells water systems products through both salaried sales
personnel and commissioned sales representatives to plumbing wholesalers and
well system supply houses primarily in the United States and Canada. The Company
sells environmental systems products, containers and related plastic products
primarily through distributors located principally in the United States and
Europe.
COMPETITION
The Company's major United States competitor in the manufacture of pressure
vessels is Park International, Inc. The Company has several competitors in
Europe. The Company competes both domestically and in Europe on the basis of its
extensive product line, quality and service.
It's estimated that manufacturers of steel tanks currently hold in excess
of 85% of the hydropneumatic and expansion pressure vessels market. The largest
producer of steel tanks and the Company's primary competitor in these products
is Amtrol, Inc. The Company competes in this market by providing its customers
with better features, responsive distribution practices, and competitive
pricing.
The Company is one of several manufacturers of composite pressure vessel
housings. The Company competes on the basis of quality and an extensive product
line.
The Company is one of several manufacturers supplying products and vessels,
the majority of which in this industry are steel, for spill prevention and
secondary containment of environmentally hazardous waste materials. The Company
competes on the basis of quality and an innovative product line.
4
<PAGE> 5
SWIMMING POOL AND SPA EQUIPMENT INDUSTRY SEGMENT
PRINCIPAL PRODUCTS
The Company manufactures and sells a complete line of filters, heaters,
pumps, white goods, electronic controls, valves and other accessories for
swimming pools and spas under the Purex-Triton(TM), American(TM) and Compool(TM)
names. It is also a leading manufacturer of underwater lighting under the
Amer-Lite(TM), Aqua-Light(TM), Aqua-Lumin(TM), Fiberworks(TM) and Spa-Brite(TM)
names.
The filters come in a range of sizes and materials to satisfy consumer
needs. The filter media is either sand, diatomaceous earth, or cartridge. Pumps
are made in a range of sizes from 1/2 to 25 horsepower and are configured for
high flow or high pressure. The heaters are gas or propane and are available
with electronic or pilot light ignition. White goods consist of skimmers, main
drains, and fittings which come in a variety of configurations and sizes. Lights
are provided in a variety of wattage's, bulb type and cord length, as well as
fiber-optics.
In 1997, the acquisitions of Paragon and selected assets of Stark Aquatics
broadened the Company's offering to the commercial and institutional swimming
pool market. Paragon designs swimming pool deck and underwater hardware and
fixtures and equipment for commercial, institutional and municipal swimming
pools including diving towers, starting platforms, lifeguard chairs, pool
railings and underwater windows. Stark, which was integrated with Paragon,
manufactures large composite filter systems for commercial pools, water parks
and aquariums.
[For information relating to sales of the Swimming Pool and Spa Equipment
Segment, see Item 8 Financial Statements and Supplementary Data Note 11:
Business Segments Information under Notes to Consolidated Financial
Statements.]
CUSTOMERS AND DISTRIBUTION
In the swimming pool market, the Company sells its products primarily to
distributors. Sales of spa products and jetted tub pumps are made primarily to
OEMs and the balance to distributors. The Company maintains a field sales
organization made up of salaried territory managers and commissioned sales
groups, each of whom is assigned to and based in a geographic region to service
customer accounts and develop business within that particular region throughout
the United States and Canada. One of its customers, South Central Pools Supply,
Inc. with which the Company has a long standing relationship, constitutes more
than 10% of the Company's total revenues.
COMPETITION
There are a number of competitors in the Swimming Pool and Spa Equipment
market, one of which Hayward Industries, Inc., is considered by the Company to
be its major competitor. The Company is a market leader in sales of in-ground
and above-ground pool filters, pumps, heaters, underwater lights, controls and
valves. The Company competes in these markets by offering a wide variety of
innovative and high quality products which are competitively priced. Its
existing distribution channels and reputation for quality also contribute to its
continuing market penetration.
SWIMMING POOL SALES AND INSTALLATION SEGMENT
PRINCIPAL PRODUCTS
The Company designs, sells and installs a broad range of in-ground concrete
swimming pools under the Anthony & Sylvan name. The Company focuses on
high-quality, innovative swimming pools tailored to each customer's
specifications. The Company has 31 showrooms, serving most of the major United
States swimming pool markets. Seventeen of these showrooms have adjacent retail
outlets which offer a complete line of complementary products, from necessities
such as heaters, filters, lights and chemicals, to the extras such as floatation
devices and water sports accessories. The Company also has a growing pool
renovation and modernization business.
5
<PAGE> 6
[For information relating to sales of the Swimming Pool Sales and
Installation Segment, see Item 8 Financial Statements and Supplementary Data
Note 11: Business Segments Information under Notes to Consolidated Financial
Statements.]
CUSTOMERS AND DISTRIBUTION
The Company is the largest concrete in-ground residential swimming pool
sales and installation business in the United States. The Company is
headquartered in Doylestown, PA and has 31 showrooms, which serve most of the
major markets in the U.S. The Company employs over 180 trained sales consultants
who interpret and design a pool owner's individual specifications. The pool
renovation and modernization business has been fostered by relationships built
over the years.
COMPETITION
The Company competes with a large number of single location businesses and
a few regional swimming pool installation businesses in each of the markets it
serves. It competes on the basis of its reputation for having "over 50 years of
experience", customer service and the quality of its finished product.
SOURCES AND AVAILABILITY OF RAW MATERIALS -- ALL INDUSTRY SEGMENTS
The principal materials used in the Water Treatment and Systems Equipment
and Swimming Pool and Spa Equipment Segments of the Company's business are
fiberglass, plastic resins, steel and motors. The principal materials used in
the Swimming Pool Sales and Installation Segment are gunite and concrete. The
Company has alternate sources for all of its principal materials and is not
dependent on any single supplier. The Company has alternate sources for
substantially all other materials required in its production processes.
BACKLOG
As of September 30, 1997 and September 30, 1996, the Water Treatment and
Systems Equipment and the Swimming Pool and Spa Equipment Segments had a backlog
of orders believed by it to be firm of approximately $12,525,000 and $8,151,000,
respectively. The Company expects the backlog as of September 30, 1997 to be
delivered in fiscal 1998. Additionally, as of September 30, 1997, the Company
had approximately $20,000,000 of contracts for swimming pool installations which
had not been started, which it believes based on past experience will be
completed in 1998.
SEASONALITY AND WORKING CAPITAL
The Swimming Pool and Spa Equipment Segment experiences the greatest demand
for its products during the second and third quarters of each fiscal year, when
it will fill approximately 60% of its distributors' orders. During this period,
its distributors increase their inventories in order to meet the peak demand for
swimming pool equipment which occurs in the spring and early summer months. The
Company's peak demand for working capital also occurs during the second and
third quarters. In addition to the strong demand it experiences, the Swimming
Pool and Spa Equipment Segment offers its customers extended terms during this
period, thereby decreasing cash flow from operations. The Company expects its
working capital requirements to continue to fluctuate on a seasonal basis and to
be financed both from its revolving credit facility and from operations. The
affect of the seasonality and working capital demands on the Company related to
the Swimming Pool and Spa Equipment Segment increased in 1997 as a result of the
acquisition of American Products in the General Aquatics transaction.
The Company's operating results also became more seasonal with the
acquisition of Anthony & Sylvan Pools in the General Aquatics transaction.
Anthony & Sylvan Pools, which comprises the Swimming Pool Sales and Installation
Segment experiences the greatest demand for pool installations during the third
and fourth quarters of the fiscal year. During this period it recognizes
approximately 65% of its annual revenues as this is the time of the year that
most of its customers desire to have a swimming pool installed.
ENGINEERING AND DEVELOPMENT
The Company believes its success is dependent upon its ability to adapt
materials, machines, processes and other emerging technologies to design and
manufacture new products, and to improve the performance, quality
6
<PAGE> 7
and manufactured cost of existing products. For this reason, expenditures of the
Company in engineering and development have been primarily directed to the
development of devices and processes and not to fundamental research.
[For expenditures on engineering and development see Item 8 Financial
Statements and Supplementary Data; Consolidated Statements of
Income -- Essef and Subsidiaries For The Years Ended September 30, 1997,
1996 and 1995; line item Engineering and development.]
PATENTS AND TRADEMARKS
The Company owns various trademarks, trade names and logos, the most
important of which are Anthony & Sylvan(TM), Where America Swims(TM),
Amer-Lite(TM), Challenger(TM), Codeline(TM), Compool(TM), Comptec(TM),
Fiberworks(TM), MiniMax(TM), Nautilus(R), PolyGlass(TM), Purex(TM),
Purex-Triton(TM), Titan(TM), Triton(R), Ultra-Flow(TM), WellMate(TM), and
WhisperFlo(TM). The Company owns a number of patents covering various aspects of
its products and manufacturing processes. Although the Company believes its
patents, trademarks, trade names and logos enhance its competitive position and
the name recognition of its products, the Company relies more on its reputation
for quality and its relationship with customers for the maintenance and growth
of its business.
ENVIRONMENTAL MATTERS
The Company's manufacturing processes, like those of the plastics industry
generally, result in the generation of hazardous and other plant waste and
emissions. Consequently, the Company is subject to various federal, state and
local laws and regulations relating to environmental protection. The Company
routinely monitors and maintains installed equipment as necessary to remain in
substantial compliance with applicable environmental regulations to which they
are subject. All operating facilities file reports with and obtain current
operating permits from appropriate governmental oversight agencies.
EMPLOYEES
At September 30, 1997, the Company employed approximately 2,100 persons, of
whom approximately 900 are salaried managerial, administrative and supervisory
personnel. The balance are hourly personnel.
(d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT
SALES.
[For financial information about foreign and domestic operations and export
sales see item 8 Financial Statements and Supplementary Data; NOTE 11: Business
Segment Information under Notes to Consolidated Financial statements.]
ITEM 2. PROPERTIES.
The Company's headquarters are in Chardon, Ohio, in offices contiguous to
the divisions operating there.
The Company conducts its manufacturing, accounting, purchasing, marketing
and engineering operations at nine facilities in the United States, one in
India, one in Belgium, two in Italy and one in the U.K. Anthony & Sylvan also
has 30 satellite showroom offices (one owned and 29 leased) in the U.S. Given
the relative small size and large number of these satellite offices, detail of
these facilities has not been shown below. In addition the Company has a
facility located in the U.S. which it has classified as real estate held for
sale in its financial statements. The table below summarizes certain information
with respect to the principal facilities.
<TABLE>
<CAPTION>
APPROXIMATE
ACREAGE AND
LOCATION SQUARE FOOTAGE STATUS PRODUCTS
- --------------------- --------------- ------- ----------------------------------------------
<S> <C> <C> <C>
Chardon, OH 284,000 sq.ft. Owned Manufacture of watertreatment and systems
equipment; Corporate Headquarters.
Sanford, NC 243,200 sq.ft. Owned Manufacture and warehousing of swimming pool
and spa equipment
Sunrise, FL 1,250 sq.ft. Leased South America sales office for swimming pool
and spa equipment
</TABLE>
7
<PAGE> 8
<TABLE>
<CAPTION>
APPROXIMATE
ACREAGE AND
LOCATION SQUARE FOOTAGE STATUS PRODUCTS
- --------------------- --------------- ------- ----------------------------------------------
<S> <C> <C> <C>
Moorpark, CA 225,000 sq.ft. Leased Manufacture and ware-housing of swimming pool
and spa equipment
Eastlake, OH 59,500 sq.ft. Leased Manufacture of hazardous waste containers and
related products
LaGrangeville, NY 31,000 sq.ft. Leased Manufacture of swimming pool deck and hardware
fixtures and fittings.
Herentals, Belgium 116,400 sq.ft. Owned Manufacture of water treatment and systems
equipment, and swimming pool and spa equipment
Escondido, CA 64,000 sq.ft. Leased Manufacture of composite pressure vessel
housings
Gloucester, U.K. 250 sq.ft. Leased European sales office for composite pressure
vessel housings
Milan, Italy 19,375 sq.ft. Leased Manufacture of pressure vessels and other
products for water treatment
Milan, Italy 25,900 sq.ft. Leased Manufacture of pressure vessels and other
products for water treatment
Mountain View, CA 16,600 sq.ft. Leased Manufacture of electronic controls and valves
for swimming pools and spas
Daytona Beach, FL 147,000 sq.ft. Owned Real estate held for sale.
Goa, India 80,000 sq.ft. Owned Manufacture of pressure vessels and other
products for water treatment
Doylestown, PA 44,000 sq.ft. Owned Showroom, equipment and storage for sales and
installation of swimming pools.
</TABLE>
The Company considers all of its properties, both owned and leased,
together with the related machinery and equipment contained therein to be well
maintained, in good operating condition, and suitable and adequate for its
present and foreseeable future needs.
ITEM 3. LEGAL PROCEEDINGS.
The Company is a participating defendant under a 1985 consent decree issued
in United States of America v. Chem-Dyne Corporation. This consent decree
attempts to resolve conflicting claims of responsibility and provide for the
cleanup of a toxic waste disposal site in Hamilton, Ohio. The Company
contributed approximately $29,000 of the $23,000,000 trust established by the
consent decree and paid approximately $12,000 in administrative costs associated
with the suit. Although the Company remains contingently liable for any and all
additional amounts that may be necessary for the cleanup of the disposal site,
the Company does not believe that any significant additional expense will be
incurred.
Twenty-eight lawsuits have been brought against the Company before the
United States District Court for the Southern District of New York, including a
class action on behalf of passengers, various individual passenger actions, and
claims by Celebrity Cruises, Inc. ("Celebrity"), concerning alleged exposure by
passengers to Legionnaire's bacteria aboard the cruise ship M/V Horizon, a ship
operated by Celebrity. The claims against the Company generally are based on
allegations that the Company designed, manufactured, and marketed sand filters
that were installed in a spa on the Horizon and allegations that the spa
contained bacteria that infected certain passengers on cruises from December,
1993 through July, 1994. Claims have also been asserted against Celebrity,
Fantasia Cruising, Inc. (the ship's owner), the German company that designed the
spa, and several companies that designed, manufactured and marketed other
component parts of the spa. Although the aggregate claims against the Company
and the other defendants exceed $200 million, management believes the Company
has meritorious defenses. While the outcome of this matter cannot be predicted
with certainty, based on information presently available, the Company does not
believe that this matter will have a material adverse effect on the Company's
financial position, results of operations or cash flows. The Company intends to
vigorously defend these matters.
8
<PAGE> 9
Additionally, certain other claims, suits and complaints arising in the
ordinary course of business have also 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.
The Company also believes that it has insurance coverage available, subject
to self-insured retentions, for a substantial portion of the cost of the
aforementioned claims, if any.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the year
covered by this report.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDERS'
MATTERS.
Essef Corporation Common Shares are listed in the NASDAQ Stock Market under
the symbol ESSF. At November 21, 1997, 10,592,368 outstanding common shares were
held by 305 shareholders of record. There were no cash dividends declared or
paid for the year ended September 30, 1997 as the company continued its policy
of retaining earnings and cash for future expansion of the business. For
information on the market price range see page 13 of Essef's 1997 Annual Report
to Shareholders incorporated herein by reference to Exhibit 13 of this filing
[1997 Annual Report to Shareholders].
ITEM 6. SELECTED FINANCIAL DATA.
Information with respect to selected financial data for each of the last
five fiscal years contained on pages 12 and 13 of Essef's 1997 Annual Report to
Shareholders is incorporated herein by reference to Exhibit 13 of this filing
[1997 Annual Report to Shareholders].
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The Management's discussion and analysis of financial condition and results
of operations contained on pages 14 and 15 of Essef's 1997 Annual Report to
Shareholders is incorporated herein by reference to Exhibit 13 of this filing
[1997 Annual Report to Shareholders].
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements and accompanying notes of Essef and
its subsidiaries contained on pages 16 through 27, inclusive of Essef's 1997
Annual Report to Shareholders, together with the report of Independent Public
Accountants relating thereto contained on page 28 thereof, and the unaudited
quarterly financial data under the heading "Quarterly Financial Information" on
page 13 of such Annual Report, are incorporated herein by reference to Exhibit
13 of this filing [1997 Annual Report to Shareholders].
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
(a) IDENTIFICATION OF DIRECTORS
[For identity of directors including age, business experience, positions
held and other relevant information see Essef Corporation -- Proxy
Statement -- December 19, 1997; (definitive proxy statement filed with the
9
<PAGE> 10
Commission pursuant to Regulation 14A) under the headings DIRECTORS, on pages
3-4 and DIRECTORS' COMMITTEES, MEETINGS AND FEES on page 5; incorporated herein
by this reference].
(b) IDENTIFICATION OF EXECUTIVE OFFICERS
The persons named below are the executive officers of the Company at the
date hereof.
<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------------- --------------------------------------------------------
<S> <C> <C>
Thomas B. Waldin 55 President and Chief Executive Officer, Director
Douglas J. Brittelle 50 Executive Vice President
Stuart D. Neidus 46 Executive Vice President and Chief Financial Officer
Gerald C. Hornick 64 Vice President and Assistant Treasurer
</TABLE>
Thomas B. Waldin has been Chief Executive Officer of the Company since his
appointment on October 26, 1990, and President and a Director since his
appointment and election January 31, 1991. Since 1977, Mr. Waldin has been
active as an investor in and director of a number of small businesses. He
retired in 1987 as Chief Operating Officer of USG Interiors, Inc., and Chief
Executive Officer of Donn, Inc. The former is a unit of USG Corporation, a
worldwide manufacturer and distributor of building products, created in
connection with the acquisition of Donn, Inc. in 1986.
Douglas J. Brittelle has been an Executive Vice President since April 1,
1997 and has served as President of Pac-Fab, Inc. since January 3, 1995. Prior
to that, from 1971 to 1994 he served in various positions with General Electric,
most recently, he served as General Manager of G.E.'s Apparatus Service Business
headquartered in Schenectady, New York. Prior to that, he was General Manager of
G.E.'s Transformer Business headquartered in Hickory, North Carolina from 1983
to 1992.
Stuart D. Neidus has been Executive Vice President and Chief Financial Officer
since September 3, 1996. Prior to that, from 1992 to 1996 he served in various
positions with Premier Farnell plc (the successor to Premier Industrial
Corporation), most recently as Executive Vice President. Prior to that Mr.
Neidus was with KPMG Peat Marwick LLP from 1973 to 1992 where he was a partner
since 1984.
Gerald C. Hornick has been a Vice President of the Company since 1970 and
has served as Chief Operating Officer of Structural North America since 1985,
and as President since January, 1991. He has been Assistant Treasurer of Essef
Corporation since 1988.
ITEM 11. EXECUTIVE COMPENSATION.
[For information relating to compensation of executive officers and
directors see Essef Corporation -- Proxy Statement -- December 19, 1997; under
the headings DIRECTORS' COMMITTEES, MEETINGS AND FEES on page 5, and EXECUTIVE
COMPENSATION on page 6; incorporated herein by this reference].
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
[For information relating to security ownership of certain beneficial
owners and management see Essef Corporation -- Proxy Statement -- December 19,
1997; under the heading BENEFICIAL OWNERSHIP OF SHARESappearing on pages 14-16;
incorporated herein by this reference].
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
[For information regarding related transactions see Essef Corporation
- -Proxy Statement -- December 19, 1997; under the heading BENEFICIAL OWNERSHIP OF
SHARES on pages 14-16; incorporated herein by this reference].
10
<PAGE> 11
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) DOCUMENTS FILED AS PART OF THIS REPORT:
(1) The following consolidated financial statements of Essef
Corporation and Subsidiaries, together with the independent auditors'
report relating thereto, contained on pages 14 through 28, inclusive of
Essef's 1997 Annual Report to its shareholders, and the unaudited quarterly
financial data set forth under the heading "Quarterly Financial
Information" on page 13 of such Annual Report, are incorporated herein by
reference to Exhibit 13 of this filing [1997 Annual Report to
Shareholders].
Consolidated Balance Sheets at September 30, 1997 and 1996
Consolidated Statements of Income for the years ended September 30,
1997, 1996 and 1995
Consolidated Statements of Shareholders' Equity for the years ended
September 30, 1997, 1996 and 1995
Consolidated Statement of Cash Flows for the years ended September 30,
1997, 1996 and 1995
Notes to Consolidated Financial Statements
Report of Independent Public Accountants
Quarterly Financial Information (unaudited)
(2) All financial statement schedules are omitted because they are not
required, not applicable, or the information is given in the consolidated
financial statements or the notes thereto.
(3) Exhibits Required to be Filed by Item 601 of Regulation S-K
CURRENT
FORM 10-K
<TABLE>
<CAPTION>
DOCUMENT/DATA
EXHIBIT NUMBER REQUIRED
- -------------- ------------------------------------------------------------------------------
<C> <S>
3.1 Second Amended Articles of Incorporation effective May 8, 1987. (Reference is
made to Exhibit 3.1 to the report on Form 10K for the year ended September 30,
1993, which exhibit is herein incorporated by reference)
3.2 Code of Regulations as Amended January 30, 1992. (Reference is made to Exhibit
3.2 to the report on Form 10K for the year ended September 30, 1993, which
exhibit is herein incorporated by reference)
4.1 Articles 4 and 5 of Second Amended Articles of Incorporation effective May 8,
1987 (See 3.1 above)
10.1 1987 Employees' Stock Option Plan. (Reference is made to Exhibit 10.1 to the
report on Form 10K for the year ended September 30, 1994, which exhibit is
herein incorporated by reference)
10.2 Deferred Compensation Plan as amended September 29, 1989. (Reference is made
to Exhibit 10.2 to the report on form 10-K for the year ended September 30,
1989, which exhibit is herein incorporated by reference)
10.3 Trust Agreement for Essef Corporation Employees' Retirement Plan and Trust
(October 1, 1995 Restatement).(Reference is made to Exhibit 10.13 to the
report on form 10-K for the year ended September 30, 1996, which exhibit is
herein incorporated by reference)
10.4 Employment Agreement -- Thomas B. Waldin, Chief Executive Officer. (Reference
is made to Exhibit 10.7 to the report on form 10-K for the year ended
September 30, 1990, which exhibit is herein incorporated by reference)
</TABLE>
11
<PAGE> 12
<TABLE>
<CAPTION>
DOCUMENT/DATA
EXHIBIT NUMBER REQUIRED
- -------------- ------------------------------------------------------------------------------
<C> <S>
10.5 First Amendment to Employment Agreement -- Thomas B. Waldin, Chief Executive
Officer.(Reference is made to Exhibit 10.9 to the report on form 10K for the
year ended September 30, 1994, which exhibit is herein incorporated by
reference)
10.6 Employment Agreement -- Elliot B. Ross, Chief Operating Officer. (Reference is
made to form 8-K filed January 25, 1994, which exhibit is herein incorporated
by reference)
10.7 Employment Agreement -- Douglas J. Brittelle, President Pac-Fab, Inc.
(Reference is made to Exhibit 10.12 to the report on Form 10-K for the year
ended September 30, 1995, which exhibit is herein incorporated by reference)
10.8 Employment Agreement -- Stuart D. Neidus, Executive Vice President and Chief
Financial Officer (Reference is made to Exhibit 10-8 to the report on Form
10-K for the year ended September 30, 1996, which exhibit is herein
incorporated by reference).
10.9 Asset Purchase Agreement between Purex Pool Systems, Inc. and Hydrotech
Chemical Corporation dated as of March 1, 1994. (Reference is made to Exhibit
2 to the report on form 10-Q for the quarter ended March 31, 1994, which
exhibit is herein incorporated by reference)
10.10 Amendment Number One, dated March 19, 1994, to Asset Purchase Agreement
between Purex Pool Systems, Inc. and Hydrotech Chemical Corporation dated as
of March 1, 1994. (Reference is made to form 8-K dated March 19, 1994 which
exhibit is herein incorporated by reference)
10.11 Credit Agreement between Essef Corporation and National City Bank and ABN Amro
Bank N.V. dated April 28, 1997. (Reference is made to Exhibit 10 to the report
on form 10-Q for the quarter ended March 31, 1997, which exhibit is herein
incorporated by reference)
10.12 Credit Agreement first amendment between Essef Corporation and National City
Bank and ABN Amro Bank, N. V. dated July 1, 1997.
10.13 Asset Purchase Agreement among GM Acquisition Corp., General Aquatics
Corporation, General Aquatics, Inc., Anthony and Sylvan Pools, Inc., KDI
American Products, Inc. and KDI Paragon, Inc. dated as of March 24, 1997.
(Reference is made to Form 8-K dated May 15, 1997 which exhibit is herein
incorporated by reference).
10.14 First Amendment to 8-K filing dated May 15, 1997. Amendment required to
include financial statements and proforma financial information required
pursuant to Item 7 of this report which were omitted from the original report.
(Reference is made to Form 8-K dated July 15, 1997 which exhibit is herein
incorporated by reference).
11 Computation of Earnings Per Share.
13 1997 Annual Report to Shareholders.
21 Subsidiaries of the Registrant.
23.1 Consent of Deloitte & Touche LLP.
27.1 Financial Data Schedule.
</TABLE>
(b) THERE WERE NO REPORTS FILED ON FORM 8-K DURING THE LAST QUARTER OF
FISCAL YEAR ENDED 1997.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Essef Corporation
By /s/ STUART D. NEIDUS
------------------------------------
Stuart D. Neidus
Executive Vice President and
Chief Financial Officer
December 19, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ---------------------------------------- ---------------------------------------------------
<S> <C>
/s/ THOMAS B. WALDIN Chief Executive Officer
- ---------------------------------------- (Principal Executive Officer)
Thomas B. Waldin
/s/ STUART D. NEIDUS Executive Vice President and
- ---------------------------------------- Chief Financial Officer
Stuart D. Neidus (Principal Financial Officer)
/s/ JAMES M. BIGGAR Director
- ----------------------------------------
James M. Biggar
/s/ GORDON D. HARNETT Director
- ----------------------------------------
Gordon D. Harnett
/s/ GEORGE M. HUMPHREY, II Director
- ----------------------------------------
George M. Humphrey, II
/s/ MARY ANN JORGENSON Director
- ----------------------------------------
Mary Ann Jorgenson
/s/ RALPH T. KING Director
- ----------------------------------------
Ralph T. King
</TABLE>
Date: December 19, 1997
13
<PAGE> 14
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
COMMISSION FILE NO. 0-15902
ESSEF CORPORATION
EXHIBIT VOLUME
14
<PAGE> 15
ESSEF CORPORATION
1997 FORM 10-K ANNUAL REPORT
EXHIBIT VOLUME -- TABLE OF CONTENTS
Exhibits filed with and sequentially numbered as part of the report
<TABLE>
<CAPTION>
NUMBER EXHIBIT DESCRIPTION
- ------ -----------------------------------------------------------------------------------
<S> <C>
10.12 Credit Agreement first amendment between Essef Corporation and National City Bank
and ABN Amro Bank N.V.
11 Computation of Earnings Per Share
13 1997 Annual Report to Shareholders
21 Subsidiaries of the Registrant
23.1 Consent of Deloitte & Touche LLP
27.1 Financial Data Schedule
</TABLE>
15
<PAGE> 1
Exhibit 10.12
ESSEF CORPORATION
as the Borrower
And
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as Lenders
And
NATIONAL CITY BANK
as Administrative Agent
and
ABN AMRO BANK N. V.
as Syndication Agent
---------------------
AMENDMENT NO. 1
dated as of
July 1, 1997
to
CREDIT AGREEMENT
dated as of
April 28, 1997
---------------------
<PAGE> 2
AMENDMENT NO. 1 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT, dated as of July 1, 1997, among
ESSEF CORPORATION, an Ohio corporation (herein, together with its successors and
assigns, the "Borrower"); the financial institutions listed on the signature
pages hereof (the "Lenders"); NATIONAL CITY BANK, a national banking
association, as Administrative Agent (the "ADMINISTRATIVE AGENT") for the
Lenders under the Credit Agreement; and ABN AMRO BANK N. V., as Syndication
Agent under the Credit Agreement:
PRELIMINARY STATEMENTS:
1. The Borrower, the Lenders named therein, the Administrative
Agent and the Syndication Agent entered into the Credit Agreement, dated as
of April 28, 1997 (herein referred to as the "Credit Agreement"; with the
terms defined therein, or the definitions of which are incorporated
therein, being used herein as so defined).
2. The parties hereto desire to make certain minor or technical
changes in the terms and provisions of the Credit Agreement, all as more
fully set forth below.
NOW, THEREFORE, the parties hereby agree as follows:
SECTION 2.1. AMENDMENTS.
2.2. METHOD AND PLACE OF PAYMENT. The first sentence of section 5.3
of the Credit Agreement is amended and restated in its entirety so as to include
appropriate reference to the obligation of the Borrower to make payments in
respect of General Revolving Loans denominated in an Alternative Currency in
that Alternative Currency, with the result that such sentence, as so amended,
reads in its entirety as follows:
Except as otherwise specifically provided herein, all payments under this
Agreement shall be made to the Administrative Agent for the ratable (based
on its pro rata share) account of the Lenders entitled thereto, not later
than 12:00 noon (local time at the Payment Office) on the date when due and
shall be made at the Payment Office in immediately available funds and (i)
in the case of payments of principal or interest relating to General
Revolving Loans denominated in an Alternative Currency, in that Alternative
Currency, and (ii) in all other cases, in lawful money of the United States
of America, it being understood that written notice by the Borrower to the
Administrative Agent to make a payment from the funds in the Borrower's
account
<PAGE> 3
at the Payment Office shall constitute the making of such payment to the
extent of such funds held in such account.
2.3 TEMPORARY INCREASE IN SWING LINE REVOLVING LOAN COMMITMENT. During
the period from the effective date of this Amendment through September 2, 1997,
the Swing Line Revolving Loan Commitment of National City Bank specified in
Annex I to the Credit Agreement shall be increased from $5,000,000 to
$10,000,000. The Borrower will contemporaneously herewith execute and deliver to
National City Bank a new Swing Line Revolving Note evidencing such increased
Swing Line Revolving Loan Commitment.
2.4. BENEFIT OF AGREEMENT. The words "no Borrower may assign" in the
proviso to the first sentence of section 13.4(a) of the Credit Agreement are
changed to "the Borrower may not assign".
SECTION 2.5. EFFECTIVENESS.
This Amendment shall become effective as of the date hereof if this
Amendment shall have been executed by the Borrower and the Administrative Agent,
and counterparts hereof as so executed shall have been delivered to the
Administrative Agent; the Acknowledgment and Consent appended hereto shall have
been executed by the Credit Parties named therein, and counterparts hereof as so
executed shall have been delivered to the Administrative Agent; and the
Administrative Agent shall have been notified by Lenders constituting the
Required Lenders that such Lenders have executed this Amendment (which
notification may be by facsimile or other written confirmation of such
execution). The Administrative Agent shall notify the Borrower and each Lender
in writing of the effectiveness hereof.
SECTION 2.7. RATIFICATIONS.
The terms and provisions set forth in this Amendment shall modify and
supersede all inconsistent terms and provisions set forth in the Credit
Agreement, and except as expressly modified and superseded by this Amendment,
the terms and provisions of the Credit Agreement are ratified and confirmed and
shall continue in full force and effect.
SECTION 2.8. MISCELLANEOUS.
2.9 SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and
inure to the benefit of the Borrower, each Lender and the Administrative Agent
and their respective permitted successors and assigns.
<PAGE> 4
2.10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made in this Amendment shall survive the execution and delivery
of this Amendment, and no investigation by the Administrative Agent or any
Lender or any subsequent Loan or issuance of a Letter of Credit shall affect the
representations and warranties or the right of the Administrative Agent or any
Lender to rely upon them.
2.11. REFERENCE TO CREDIT AGREEMENT. The Credit Agreement and any and
all other agreements, instruments or documentation now or hereafter executed and
delivered pursuant to the terms of the Credit Agreement as amended hereby, are
hereby amended so that any reference therein to the Credit Agreement shall mean
a reference to the Credit Agreement as amended hereby.
2.12. EXPENSES. As provided in the Credit Agreement, but without
limiting any terms or provisions thereof, the Borrower agrees to pay on demand
all costs and expenses incurred by the Administrative Agent in connection with
the preparation, negotiation, and execution of this Amendment, including without
limitation the costs and fees of the Administrative Agent's special legal
counsel, regardless of whether this Amendment becomes effective in accordance
with the terms hereof, and all costs and expenses incurred by the Administrative
Agent or any Lender in connection with the enforcement or preservation of any
rights under the Credit Agreement, as amended hereby.
2.13. SEVERABILITY. Any term or provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the term or provision so held to be invalid or unenforceable.
2.14. APPLICABLE LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of Ohio.
2.15. HEADINGS. The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
2.16. ENTIRE AGREEMENT. This Amendment is specifically limited to the
matters expressly set forth herein. This Amendment and all other instruments,
agreements and documentation executed and delivered in connection with this
Amendment embody the final, entire agreement among the parties hereto with
respect to the subject matter hereof and supersede any and all prior
commitments, agreements, representations and understandings, whether written or
oral, relating to the matters
<PAGE> 5
covered by this Amendment, and may not be contradicted or varied by evidence of
prior, contemporaneous or subsequent oral agreements or discussions of the
parties hereto. There are no oral agreements among the parties hereto relating
to the subject matter hereof or any other subject matter relating to the Credit
Agreement.
2.17. COUNTERPARTS. This Amendment may be executed by the parties
hereto separately in one or more counterparts, each of which when so executed
shall be deemed to be an original, but all of which when taken together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered as
of the date first above written.
ESSEF CORPORATION
By:____________________________________
Executive Vice President
& Chief Financial Officer
NATIONAL CITY BANK,
individually and as
Administrative Agent
By:____________________________________
Vice President
ABN AMRO BANK N. V.,
individually and as
Syndication Agent
By:____________________________________
Title:
And:____________________________________
Title:
<PAGE> 6
ACKNOWLEDGMENT AND CONSENT
For the avoidance of doubt, and without limitation of the intent and effect
of sections 6 and 10 of the Subsidiary Guaranty (as such term is defined in the
Credit Agreement referred to in the Amendment No. 1 to Credit Agreement (the
"AMENDMENT"), to which this Acknowledgment and Consent is appended), each of the
undersigned hereby unconditionally and irrevocably (i) acknowledges receipt of a
copy of the Credit Agreement and the Amendment, and (ii) consents to all of the
terms and provisions of the Credit Agreement as amended by the Amendment.
Capitalized terms which are used herein without definition shall have the
respective meanings ascribed thereto in the Credit Agreement referred to herein.
This Acknowledgment and Consent is for the benefit of the Lenders, the
Administrative Agent, and the Syndication Agent, any other person who is a third
party beneficiary of the Subsidiary Guaranty, and their respective successors
and assigns. No term or provision of this Acknowledgment and Consent may be
modified or otherwise changed without the prior written consent of the
Administrative Agent, given as provided in the Credit Agreement. This
Acknowledgment and Consent shall be binding upon the successors and assigns of
each of the undersigned. This Acknowledgment and Consent may be executed by any
of the undersigned in separate counterparts, each of which shall be an original
and all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the undersigned has duly executed and delivered
this Acknowledgment and Consent as of the date of the Amendment referred to
herein.
ENPAC Corporation
ADVANCED STRUCTURES, INC.
PAC-FAB, INC.
PUREX POOL SYSTEMS, INC.
COMPOOL, INC.
SANFORD TECHNOLOGY CORPORATION
GENERAL ACQUATICS CORPORATION
ANTHONY AND SYLVAN POOLS CORPORATION
By:________________________________________
Vice President and/or Treasurer or
Assistant Treasurer of each
of the above corporations
<PAGE> 1
Exhibit 11
COMPUTATION OF PER SHARE EARNINGS
The computation of primary earnings per share is as follows:
(In thousands except per share amounts)
<TABLE>
<CAPTION>
Year Ended September 30
1997 1996
---------- --------
<S> <C> <C>
Weighted average shares outstanding 10,572 11,248
Add equivalent shares for
stock options (a) 2,225 1,934
------ ------
Average shares outstanding for
computation of primary earnings
per share 12,797 13,182
====== ======
Income from continuing operations $11,766 $ 9,256
======= =======
Net income $11,766 $ 9,326
======= =======
Primary earnings per common share:
Income from continuing operations $0.92 $0.70
===== =====
Net income $0.92 $0.71
===== =====
</TABLE>
(a) Computed under the "Treasury Stock Method" using the average market price
for the respective period.
<PAGE> 1
Exhibit 13
1997 ANNUAL REPORT TO SHAREHOLDERS
<PAGE> 1
Exhibit 21
<TABLE>
<CAPTION>
SUBSIDIARIES OF THE REGISTRANT
State or other
jurisdiction of
incorporation
Subsidiary or organization
- ---------- ---------------
<S> <C>
Advanced Structures, Inc. Ohio
Anthony & Sylvan Pools Corporation Ohio
Compool, Inc. Ohio
ENPAC Corporation Delaware
EPPS, Ltd. Mauritius
Essef Manufacturing FSC, Inc. U.S. Virgin Islands
Euroimpex SpA Italy
General Aquatics Corporation Ohio
Pac-Fab, Inc. Delaware
Purex Pool Systems Delaware
Sanford Technology Corporation North Carolina
Structural Europe N.V. Belgium
Structural Iberica S.A. Spain
Structural India Private, Ltd. India
</TABLE>
<PAGE> 1
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-17758 of Essef Corporation on Form S-8 of our report dated November 19, 1997,
appearing in this Annual Report on Form 10-K of Essef Corporation for the year
ended September 30, 1997.
DELOITTE & TOUCHE LLP
- ---------------------
Deloitte & Touche LLP
Chardon, Ohio
December 19, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<CASH> 1,668
<SECURITIES> 0
<RECEIVABLES> 42,560
<ALLOWANCES> (3,048)
<INVENTORY> 34,597
<CURRENT-ASSETS> 77,950
<PP&E> 114,201
<DEPRECIATION> (50,381)
<TOTAL-ASSETS> 216,883
<CURRENT-LIABILITIES> 63,802
<BONDS> 0
0
0
<COMMON> 32,234
<OTHER-SE> 33,212
<TOTAL-LIABILITY-AND-EQUITY> 216,883
<SALES> 306,061
<TOTAL-REVENUES> 306,061
<CGS> 219,870
<TOTAL-COSTS> 283,542
<OTHER-EXPENSES> 136
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,281
<INCOME-PRETAX> 18,102
<INCOME-TAX> 6,336
<INCOME-CONTINUING> 11,766
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,766
<EPS-PRIMARY> .92
<EPS-DILUTED> .92
</TABLE>
