<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997 OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO
____________.
COMMISSION FILE NO.: 0-26640
-------
SCP POOL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 36-3943363
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
109 Northpark Boulevard, Covington, Louisiana 70433-5001
- --------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
504-892-5521
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [_] NO [X]
At November 7, 1997, there were 6,390,071 outstanding shares of the Registrant's
Common Stock, $.001 par value per share.
<PAGE>
SCP POOL CORPORATION
TABLE OF CONTENTS
Part I. Financial Information Page
----
Item 1. Financial Statements
Consolidated Balance Sheets - September 30, 1997
(Unaudited) and December 31, 1996........................ 1
Consolidated Statements of Income -- Three Months Ended
September 30, 1997 and 1996 (Unaudited) and Nine Months
Ended September 30, 1997 and 1996 (Unaudited)............ 2
Consolidated Statements of Cash Flows -- Nine
Months Ended September 30, 1997 and 1996 (Unaudited)..... 3
Notes to Consolidated Financial Statements (Unaudited)--
September 30, 1997....................................... 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................... 6
Part II. Other Information
Items 1. - 6........................................................ 13
<PAGE>
SCP POOL CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
(Unaudited) (Note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,928 $ 4,621
Receivables 36,889 25,293
Inventory, primarily goods purchased for resale 43,079 42,112
Prepaid expenses 735 632
Deferred income taxes 1,103 392
-------- --------
Total current assets 83,734 73,050
Property and equipment, net 4,746 4,413
Goodwill, net 32,844 33,009
Other assets, net 2,339 2,773
-------- --------
Total assets $123,663 $113,245
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 13,359 $ 15,132
Accrued and other current liabilities 10,928 7,907
Current portion of long-term debt 7,243 15,409
-------- --------
Total current liabilities 31,530 38,448
Deferred income taxes 2,344 2,119
Long-term debt, less current portion 43,596 35,868
Stockholders' equity:
Preferred stock, $.01 par value; 100,000 shares authorized - -
Common stock, $.001 par value; 10,000,000 shares authorized;
6,390,071 and 6,334,214 shares issued and outstanding in 1997
and 1996, respectively 6 6
Additional paid-in capital 29,705 29,585
Retained earnings 16,482 7,219
-------- --------
Total stockholders' equity 46,193 36,810
-------- --------
Total liabilities and stockholders' equity $123,663 $113,245
======== ========
</TABLE>
Note: The balance sheet at December 31, 1996 has been derived
from the audited financial statements at that date but does not
include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements.
See accompanying notes.
1
<PAGE>
SCP POOL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
--------- --------- --------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net sales $ 98,492 $ 62,344 $ 286,847 $ 189,356
Cost of sales 77,032 48,813 223,268 146,510
--------- --------- --------- ---------
Gross profit 21,460 13,531 63,579 42,846
Warehouse expense 3,689 2,506 11,067 7,114
Selling and administrative expenses 10,702 6,658 33,416 20,394
Goodwill amortization 222 191 648 576
--------- --------- --------- ---------
Operating income 6,847 4,176 18,448 14,762
Other income (expense):
Interest expense (1,318) (780) (3,605) (2,052)
Amortization expense (179) (133) (534) (398)
Miscellaneous income 249 295 629 577
--------- --------- --------- ---------
(1,248) (618) (3,510) (1,873)
--------- --------- --------- ---------
Income before income taxes 5,599 3,558 14,938 12,889
Provision for income taxes 2,128 1,390 5,676 5,029
--------- --------- --------- ---------
Net income $ 3,471 $ 2,168 $ 9,262 $ 7,860
========= ========= ========= =========
Net income per share of common stock:
Primary $ .54 $ .34 $ 1.46 $ 1.24
========= ========= ========= =========
Fully diluted $ .53 $ .34 $ 1.43 $ 1.22
========= ========= ========= =========
Average shares outstanding:
Primary 6,387 6,334 6,358 6,334
========= ========= ========= =========
Fully diluted 6,491 6,462 6,475 6,462
========= ========= ========= =========
</TABLE>
See accompanying notes.
2
<PAGE>
SCP POOL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1997 1996
-------- --------
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 9,262 $ 7,860
Adjustments to reconcile net income to net cash provided
by (used in) operating activities (10,978) (3,226)
-------- --------
Net cash provided by (used in) operating activities (1,716) 4,634
INVESTING ACTIVITIES
Purchase of property and equipment (732) (554)
Proceeds from sale of property and equipment 72 156
-------- --------
Net cash used in investing activities (660) (398)
FINANCING ACTIVITIES
Proceeds on long-term debt - 15,577
Net borrowings (repayments) on revolving loan 13,500 (13,000)
Payments on long-term debt (13,909) (2,757)
Issuance of common stock 92 -
-------- --------
Net cash used in financing activities (317) (180)
-------- --------
Change in cash and cash equivalents (2,693) 4,056
Cash and cash equivalents at beginning of period 4,621 2,043
-------- --------
Cash and cash equivalents at end of period $ 1,928 $ 6,099
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 3,450 $ 1,139
======== ========
Income taxes $ 4,027 $ 10
======== ========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
FINANCING ACTIVITIES
Long-term debt issued to acquire businesses $ - $ 32,691
======== ========
</TABLE>
See accompanying notes.
3
<PAGE>
SCP POOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1997
1. UNAUDITED INTERIM FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. In the opinion of
management, the accompanying unaudited interim financial statements include all
adjustments, consisting of only normal recurring adjustments, necessary for a
fair presentation of the results of the interim periods.
The Company's business is highly seasonal. In general, sales and net income are
highest during the second and third quarters, which represent the peak months of
swimming pool use and installation. Operating results for the three-month or
nine-month periods ended September 30, 1997 are not necessarily indicative of
the results that may be expected for the year ending December 31, 1997. For
further information, refer to the consolidated financial statements for the year
ended December 31, 1996 and footnotes thereto included in the annual report on
Form 10-K filed by the Company with the Securities and Exchange Commission.
2. DESCRIPTION OF BUSINESS
As of September 30, 1997, SCP Pool Corporation and its wholly owned subsidiaries
(collectively referred to as the Company) maintain 74 service centers in 24
states located throughout the United States, except in the Northeast, from which
they sell swimming pool equipment and supplies to pool builders, retail stores,
and service firms.
3. EARNINGS PER SHARE
On August 26, 1997, the board of directors declared a three-for-two stock split
of the Company's common stock, which was paid in the form of a stock dividend on
September 29, 1997 to the stockholders of record at the close of business on
September 15, 1997. Accordingly, all shares and per-share data for all periods
presented reflect the effects of this split. The par value for the additional
shares issued was transferred from additional paid-in capital to common stock.
4
<PAGE>
SCP POOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
3. EARNINGS PER SHARE (CONTINUED)
Primary income per common share equals net income divided by the weighted
average number of common shares outstanding during the period. Fully diluted
income per common share equals net income plus the after tax interest incurred
on the Company's convertible notes, divided by common shares outstanding after
giving effect to shares assumed to be issued on conversion of those notes. For
both 1997 and 1996, the effect of stock options outstanding are immaterial.
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, "Earnings Per Share", which the Company will be required to adopt during
the three-month period ending December 31, 1997. The adoption of this statement
is not expected to have a material effect on the calculation of earnings per
share.
5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company was formed in December 1993 to acquire substantially all of the
assets and assume certain liabilities of its Predecessor. From its inception in
1980 through the end of 1993, the Predecessor increased its sales by opening new
service center locations and by increasing sales to new and existing customers.
Since the Company's acquisition of the Predecessor in December 1993 (the "SCP
Acquisition"), the Company has grown through strategic acquisitions, by opening
new service centers and by increasing sales to new and existing customers. From
January 1, 1990 to September 30, 1997, the Company expanded from 8 service
centers in 6 states to 74 service centers in 24 states, primarily through
acquisitions.
The Company derives its revenues primarily from the sale of swimming pool
supplies and related products, including chemicals, cleaners, packaged pools and
liners, filters, heaters, pumps, lights, repair parts and other equipment
required to build, maintain, install and overhaul residential and small
commercial swimming pools. The Company sells its products primarily to swimming
pool remodelers and builders, independent swimming pool retailers and swimming
pool repair and service companies. These customers tend to be small, family
owned businesses with relatively limited capital resources. Losses from customer
receivables have historically been within management's expectations.
The swimming pool supply industry is affected by various factors, including
general economic conditions, the level of new housing construction, weather and
consumer attitudes towards pool chemical products for environmental or safety
reasons. Although management believes that the Company's geographic diversity
could mitigate the effect of a regional economic downturn and that the
continuing maintenance and repair needs for existing swimming pools could
mitigate the effect of a general economic downturn, there can be no assurance
that any such downturn would not have a material adverse effect on the Company's
results of operations and expansion plans.
The principal components of the Company's expenses include the cost of products
purchased from manufacturers and sold during the year and operating expenses,
which are primarily related to labor, occupancy, commissions and marketing. Some
geographic markets serviced by the Company, particularly California, Texas and
Florida, tend to be more competitive than others. In response to competitive
pressures from any of its current or future competitors, the Company may be
required to lower selling prices in order to maintain or increase market share,
and such measures could adversely affect the Company's gross margins and
operating results.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
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 such period.
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
1997 1996 1997 1996
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 78.2 78.3 77.8 77.4
-------------------------------------------------------------------
Gross profit 21.8 21.7 22.2 22.6
Warehouse expense 3.7 4.0 3.9 3.7
Selling and administrative expenses 10.9 10.7 11.7 10.8
Goodwill amortization .2 .3 .2 .3
-------------------------------------------------------------------
Operating income 7.0 6.7 6.4 7.8
Other income (expense):
Interest expense (1.3) (1.3) (1.2) (1.1)
Amortization expense (.2) (.2) (.2) (.2)
Miscellaneous .2 .5 .2 .3
-------------------------------------------------------------------
Income before income taxes 5.7% 5.7% 5.2% 6.8%
===================================================================
</TABLE>
The following discussions compare the results of operations of the Company for
the three-month and nine-month periods ended September 30, 1997 and 1996.
Three Months Ended September 30, 1997 Compared to Three Months Ended September
30, 1996
Net sales increased by $36.2 million, or 58.0%, to $98.5 million in the three
months ended September 30, 1997 from $62.3 million in the comparable 1996
period. This increase was primarily due to sales at service centers acquired
from The B-L Network, Inc. (BLN), and increased sales at existing service
centers. Service centers acquired from BLN in September 1996 contributed $28.0
million to the increase while an increase of approximately 12.0% in sales at
service centers open at least 15 months contributed $4.5 million to the
increase. Also, newly opened service centers accounted for $5.7 million of the
total increase, and offset the loss of revenue from Alliance Packaging, which
was sold in October 1996.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
Gross profit increased by $8.0 million, or 58.6%, to $21.5 million in the three
months ended September 30, 1997 from $13.5 million in the comparable 1996
period. Gross profit as a percentage of net sales stayed relatively constant at
21.8% in the 1997 period as compared to 21.7% in the 1996 period.
Operating expenses increased by $5.2 million, or 56.2%, to $14.6 million in the
three months ended September 30, 1997 from $9.4 million in the comparable 1996
period. This increase is primarily reflective of salaries, occupancy expense and
other costs associated with new service centers, and, to a lesser extent,
payroll and other operating costs required to support the increased sales volume
at existing service centers. Operating expenses as a percentage of sales
remained relatively constant at 14.8% in the 1997 period as compared to 15.0% in
the 1996 period.
Interest and other expenses increased to $1.2 million in the three months ended
September 30, 1997 from $0.6 million in the comparable 1996 period. The
increase was primarily attributable to the increase in the Company's debt as a
result of the acquisition of BLN in September 1996 and to the financing of
seasonal inventory levels for a larger number of branches than in the comparable
1996 period.
Nine Months Ended September 30, 1997 Compared to Nine Months Ended September 30,
1996
Net sales increased by $97.4 million, or 51.5%, to $286.8 million in the nine
months ended September 30, 1997 from $189.4 million in the comparable 1996
period. This increase was primarily due to sales at service centers acquired
from BLN, sales at newly opened service centers, and increased sales at existing
service centers. Service centers acquired from BLN in September 1996 contributed
$84.1 million to the increase, sales at newly opened service centers accounted
for $10.1 million of the total increase, and an increase of approximately 10.6%
in sales at service centers open at least 15 months contributed $8.6 million to
the increase. These increases were partially offset by the loss of revenue from
Alliance Packaging, which was sold in October 1996.
Gross profit increased by $20.8 million, or 48.4%, to $63.6 million in the nine
months ended September 30, 1997 from $42.8 million in the comparable 1996
period. Gross profit as a percentage of net sales decreased 0.4% to 22.2% in the
1997 period compared to 22.6% in the 1996 period primarily due to the increase
in the number of service centers in the more competitive markets of California
and Florida.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
Operating expenses increased by $17.0 million, or 60.7%, to $45.1 million in the
nine months ended September 30, 1997 from $28.1 million in the comparable 1996
period. This increase is primarily reflective of salaries, occupancy expense and
other costs associated with new service centers, and, to a lesser extent,
payroll and other operating costs required to support the increased sales volume
at existing service centers. Because of unseasonably cool temperatures and
continuing wet and rainy weather in much of the United States, primarily during
the three-month period ended June 30, 1997, the increases in revenue over the
comparable 1996 period were not proportionate with these increased costs.
Therefore, operating expenses as a percentage of sales increased to 15.7% in the
1997 period compared to 14.8% in the 1996 period.
Interest and other expenses increased to $3.5 million in the nine months ended
September 30, 1997 from $1.9 million in the comparable 1996 period. The
increase was primarily attributable to the increase in the Company's debt as a
result of the acquisition of BLN in September 1996 and to the financing of
seasonal inventory levels for a larger number of branches than in the comparable
1996 period.
SEASONALITY AND QUARTERLY FLUCTUATIONS
The Company's business is highly seasonal. In general, sales and net income are
highest during the second and third quarters, which represent the peak months of
swimming pool use and installation. Sales are substantially lower during the
first and fourth quarters, when the Company may incur net losses.
The Company experiences a build-up of inventory and accounts payable during the
first and second quarters of the year in anticipation of the peak swimming pool
supply selling season. The Company's peak borrowing occurs during the second
quarter, primarily because dated accounts payable offered by the Company's
suppliers typically are payable in April, May and June, while the Company's peak
accounts receivable collections typically occur in June, July and August.
The principal external factor affecting the Company's business is weather. Hot
weather can increase purchases of chemicals and supplies and pool installations.
Unseasonably cool weather or heavier than average amounts of rainfall during the
peak sales season can decrease purchases of chemicals and supplies and pool
installations. In addition, unseasonably early or late warming trends can
increase or decrease the length of the pool season and, therefore, the Company's
sales.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
SEASONALITY AND QUARTERLY FLUCTUATIONS (CONTINUED)
To encourage preseason orders, the Company, like many other swimming pool supply
distributors, utilizes preseason sales programs which provide for extended
dating terms and other incentives to its customers. Some of the Company's
suppliers also offer extended dating terms on certain products to the Company
for preseason or early season purchases. In offering extended dating terms to
its customers and accepting extended dating terms from its suppliers, the
Company effectively finances a portion of its receivables with extended
payables.
The Company expects that its quarterly results of operations will fluctuate
depending on the timing and amount of revenue contributed by new service centers
and acquisitions. The Company attempts to open its new stores at the end of the
fourth quarter or the beginning of the first quarter to take advantage of
preseason sales programs and the peak season.
The following table sets forth certain unaudited quarterly data for 1996 and the
first three quarters for 1997 which, in the opinion of management, reflect all
adjustments, consisting of only normal recurring adjustments, necessary for a
fair presentation of such data. Results of any one or more quarters are not
necessarily indicative of results for an entire fiscal year or of continuing
trends.
<TABLE>
<CAPTION>
1996 1997
------------------------------------------------------------------------------------------
1ST 2ND 3RD 4TH 1ST 2ND 3RD
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
------- -------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
(Dollars in thousands)
Net sales $41,145 $85,867 $62,344 $46,488 $63,565 $124,790 $98,492
Gross profit 9,273 20,042 13,531 9,184 13,960 28,159 21,460
Operating income (loss) 743 9,843 4,176 (4,275) 104 11,496 6,847
Net sales as a percentage of
annual net sales 18% 36% 26% 20% N/A N/A N/A
Gross profit as a percentage
of annual gross profit 18% 38% 26% 18% N/A N/A N/A
Operating income as a
percentage of annual
operating income 7% 94% 40% (41)% N/A N/A N/A
</TABLE>
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES
Currently, the Company's primary sources of working capital are cash flow from
operations and borrowings under the Senior Loan Facility, which consists of a
term loan and a revolving line of credit. The Company's borrowings under its
credit facilities, together with cash flow from operations and seller financing
have historically been sufficient to support the Company's growth and to finance
acquisitions. Available credit under the revolving line of credit at September
30, 1997 is $29.5 million, subject to an accounts receivable and inventory
borrowing base limit. Considering the Company's borrowing base as of September
30, 1997, the Company had approximately $15.3 million available for borrowing
under the Senior Loan Facility, the only additional credit source currently
available to the Company.
During the nine months ended September 30, 1997, the Company's operating
activities used $1.7 million of cash to fund operating activities primarily due
to the normal seasonal decrease in accounts receivable, inventory and accounts
payable as discussed above. The Company borrowed $13.5 million under its
revolving line of credit to meet these seasonal working capital requirements and
made scheduled payments of $13.9 million required under its term loan and for
indebtedness to sellers of acquired businesses.
Borrowings under the Senior Loan Facility may, at the Company's option, bear
interest at either (i) the agent's corporate base rate or the federal funds rate
plus 0.5%, whichever is higher, plus a margin ranging from 0.0% to 1.0% or (ii)
LIBOR plus a margin ranging from 1.25% to 2.50%, in each case depending on the
Company's leverage ratio. Substantially all of the assets of the Company (other
than inventory acquired from BLN, which secures the Company's obligations to the
seller of BLN), including the capital stock of South Central Pool Supply, Inc.,
the Company's wholly owned subsidiary, secure the Company's obligations under
the Senior Loan Facility. The Senior Loan Facility has numerous restrictive
covenants which require the Company to maintain minimum levels of interest
coverage and fixed charge coverage and which also restrict the Company's ability
to pay dividends and make capital expenditures. As of September 30, 1997, the
Company was in compliance with all such covenants and financial ratio
requirements. The Senior Loan Facility expires on September 26, 2002.
To finance future acquisitions, the Company may utilize its ability to borrow
additional funds under the Senior Loan Facility or, depending on market
conditions, incur additional indebtedness or issue common or preferred stock
(which may be issued to third parties or to sellers of acquired businesses).
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
INFLATION
The Company does not believe that inflation has had a significant impact on its
results of operations for the periods presented.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
With the exception of historical matters, the matters discussed in this Form 10-
Q are forward-looking statements that involve risks and uncertainties,
including but not limited to factors related to (i) the Company's ability to
identify appropriate acquisition candidates, complete acquisitions on
satisfactory terms, or successfully integrate acquired businesses; (ii) the
sensitivity of the swimming pool supply business to cool or rainy weather; (iii)
the intense competition and low barriers to entry in the swimming pool supply
industry; (iv) the Company's ability to obtain financing on satisfactory terms
and the degree to which the Company is leveraged; (v) the sensitivity of the
swimming pool supply business to general economic conditions; (vi) the Company's
ability to remain in compliance with the numerous environmental, health and
safety requirements to which it is subject; (vii) the risk of fire, safety and
casualty losses and related liability claims inherent in the storage of
chemicals sold by the Company; and (viii) the other factors discussed in the
Company's filings with the Securities and Exchange Commission. Such factors
could affect the Company's actual results and could cause such results to
differ materially from the Company's expectations described above.
12
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
The Company currently is not involved in any material legal
proceedings.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
Exhibits
27.1 Financial Data Schedule
Reports on Form 8-K
None
13
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SCP POOL CORPORATION
--------------------
DATE: 11/13/97 BY:/s/ Donald L. Meyer
----------- -------------------------------------
Donald L. Meyer, Controller and duly
authorized signatory on behalf of the
Registrant
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from consolidated
financial statements and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,928
<SECURITIES> 0
<RECEIVABLES> 39,049
<ALLOWANCES> 2,160
<INVENTORY> 43,079
<CURRENT-ASSETS> 83,734
<PP&E> 6,740
<DEPRECIATION> 1,994
<TOTAL-ASSETS> 123,663
<CURRENT-LIABILITIES> 31,530
<BONDS> 50,839
0
0
<COMMON> 6
<OTHER-SE> 46,187
<TOTAL-LIABILITY-AND-EQUITY> 123,663
<SALES> 286,847
<TOTAL-REVENUES> 286,847
<CGS> 223,268
<TOTAL-COSTS> 268,399
<OTHER-EXPENSES> 534
<LOSS-PROVISION> 1,386
<INTEREST-EXPENSE> 3,605
<INCOME-PRETAX> 14,938
<INCOME-TAX> 5,676
<INCOME-CONTINUING> 9,262
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,262
<EPS-PRIMARY> 1.46
<EPS-DILUTED> 1.43
</TABLE>
