UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

FORM 10-Q

COMMISSION FILE NO.: 0-26640

SCP POOL CORPORATION
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(Exact name of registrant as specified in its charter)

504-892-5521
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(Registrant’s telephone number, including areacode)

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(former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES    [X]    NO     [_]

At October 31, 2000, there were 16,986,184 outstanding shares of the Registrant’s common stock, $.001 par value per share.

1.     Basis of Presentation
The accompanying unaudited Consolidated Financial Statements have been prepared by SCP Pool Corporation (the “Company”) in accordance with generally accepted accounting principles (“GAAP”) 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 GAAP for complete financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, the accompanying unaudited interim financial statements reflect all adjustments consisting of normal recurring adjustments considered necessary for a fair presentation of the results of the interim period.

Operating results for the three month or nine month periods ended September 30, 2000 are not necessarily indicative of the results that may be expected for the year ending
December 31, 2000. The financial information set forth herein should be read in conjunction with the Company’s Notes to the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 1999 filed by the Company with the Securities and Exchange Commission.

2.     Earnings Per Share
Basic income per common share equals net income divided by the weighted average number of common shares outstanding during the period. 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 and dilutive options.

3.     Stock Split
In May 2000, 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 June 19, 2000 to the stockholders of record at the close of business on May 19, 2000. Accordingly, all prior period share and per share data and related capital amounts have been adjusted to reflect the effects of this split.

4.     Change in Effective Income Tax Rate
During the second quarter of 2000, the Company increased its effective income tax rate from 37.0% to 38.25% as a result of changes in its state income tax mix.

5.     Recent Developments
On July 31, 2000 and October 26, 2000, the Company completed the purchase of substantially all of the assets and the assumption of certain liabilities of Superior Pool Products, Inc. (“Superior”) and Pool Rite, Inc., (distributors of swimming pool equipment, parts and supplies) respectively. The Superior distribution network encompasses nineteen service centers in California, Arizona and Nevada. Pool Rite, Inc., operated two service centers in Miami, Florida. Both acquisitions were accounted for using the purchase method of accounting.

The following discussion should be read in conjunction with Management’s Discussion and Analysis included in the Company’s Annual Report on Form 10-K for the year ended December 31, 1999 filed by the Company with the Securities and Exchange Commission.

Results of Operations
The Company currently conducts operations through 130 service centers in 34 states, the United Kingdom and France.

The following table shows, for the periods indicated, information derived from the Company’s Consolidated Statements of Income expressed as a percentage of net sales for such period.

The following discussions compare the Company’s results of operations for the three month and nine month periods ended September 30, 2000 and 1999.

Three Months Ended September 30, 2000 Compared to Three Months Ended
September 30, 1999
Net sales increased $27.2 million, or 17%, to $190.5 million in the three months ended September 30, 2000 from $163.3 million in the comparable 1999 period. An increase of 6.5% in same store sales at service centers open at least 15 months contributed $9.7 million to the increase, while service centers acquired from Superior in the third quarter of 2000 accounted for $15.2 million of the increase. Service centers acquired in the fourth quarter of 1999 and the sales at new service centers open less than 15 months contributed the balance of the increase.

Gross profit increased $7.0 million, or 18%, to $45.6 million in the three months ended September 30, 2000 from $38.6 million in the comparable 1999 period. The same store gross margin increased 60 basis points for the quarter ended September 30, 2000 compared to the third quarter of 1999. Gross profit as a percentage of net sales increased 30 basis points to 23.9% for the three months ended September 30, 2000 from 23.6% in the comparable 1999 period. The increase in margin was realized in all domestic regions during the third quarter of 2000 and is attributable to a continued focus on margin management at the service center level.

Operating expenses consisting of selling and administrative expenses and goodwill amortization increased $3.6 million, or 14%, to $28.6 million in the three months ended September 30, 2000 from $25.0 million in the comparable 1999 period. The increase reflects not only salaries, occupancy expense and other costs associated with new service centers, but also payroll and other operating costs required to support the increased sales volume at existing service centers. Operating expenses as a percentage of net sales decreased 30 basis points to 15.0% from 15.3% in the third quarter of 1999.

Interest and other expenses increased $0.5 million to $1.2 million in the three months ended September 30, 2000 from $0.7 million in the comparable 1999 period. The increase is primarily due to a slight decrease in miscellaneous income as well as a $0.2 million increase in interest expense. The increase in interest expense is a result of higher average debt levels between periods due to the acquisition of Superior in the third quarter of 2000.

Nine Months Ended September 30, 2000 Compared to Nine Months Ended
September 30, 1999
Net sales increased $77.7 million, or 16%, to $565.1 million in the nine months ended September 30, 2000 from $487.4 million in the comparable 1999 period. An increase of 11.5% in same store sales at service centers open at least 15 months contributed $49.0 million to the increase, while service centers acquired from Superior in the third quarter of 2000 accounted for $15.2 million of the increase. Service centers acquired in the fourth quarter of 1999 and sales at new service centers open less than 15 months contributed the balance of the increase.

Gross profit increased $21.2 million, or 18%, to $137.2 million in the nine months ended September 30, 2000 from $116.0 million in the comparable 1999 period. Gross profit as a percentage of net sales increased to 24.3% for the nine months ended September 30, 2000 from 23.8% in the comparable 1999 period. The increase in margin was realized in all domestic regions and is attributable to a continued focus on margin management at the service center level.

Operating expenses consisting of selling and administrative expenses and goodwill amortization increased $11.9 million, or 16%, to $84.4 million in the nine months ended September 30, 2000 from $72.5 million in the comparable 1999 period. The increase reflects not only salaries, occupancy expense and other costs associated with new service centers, but also payroll and other operating costs required to support the increased sales volume at existing service centers. Operating expenses as a percentage of net sales remained unchanged.

Interest and other expenses decreased $1.3 million, or 30%, to $3.0 million in the nine months ended September 30, 2000 from $4.3 million in the comparable 1999 period. In the second quarter of 1999, the Company wrote off $1.2 million related to computer equipment replaced in connection with improvements to the Company’s information system and Year 2000 compliance efforts. There were no such write-offs in the nine month period ended September 30, 2000.

The Company’s business is highly seasonal. Weather is the principal external factor affecting the Company’s business. Hot weather can increase the purchase of chemicals and supplies and pool installations. Unseasonably cool weather or extraordinary amounts of rainfall during the peak selling season can decrease the purchase 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, consequently, the Company’s sales. 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.

To encourage preseason orders, the Company, like many other swimming pool supply distributors, utilizes preseason sales programs that provide 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 and inventory with extended payables.

The Company expects that its quarterly results of operations will continue to fluctuate depending on the timing and amount of revenue contributed by new service centers and acquisitions, if any. The Company attempts to open new service centers during the fourth quarter or the first quarter of the subsequent year to take advantage of preseason sales programs and the following peak season.

The following table sets forth certain unaudited quarterly data for the first, second and third quarters of 2000 and the four quarters of 1999, which, in the opinion of management, reflects all adjustments consisting of normal recurring adjustments considered 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.

Liquidity and Capital Resources
Currently, the Company’s primary sources of working capital are cash flows from operations and borrowings under its Senior Loan Facility consisting of a term loan and a revolving line of credit. The revolving line of credit has a total borrowing capacity of $65.0 million. The Company’s borrowings under its credit facilities, together with cash flows from operations and seller financing have historically been sufficient to support the Company’s growth and to finance acquisitions. Considering the Company’s borrowing base as of September 30, 2000, the Company had $28.3 million available for borrowing under its Senior Loan Facility, the only additional credit source currently available to the Company.

Net cash provided by operating activities was $13.3 million for the nine month period ended September 30, 2000 compared to $18.6 million in the same period last year.

During the nine months ended September 30, 2000, the Company had net borrowings on its revolver loan of $21.1 million to fund the acquisition of businesses and to meet net seasonal working capital requirements. On July 31, 2000, the Company acquired substantially all of the assets and assumed certain liabilities of Superior Pool Products, Inc., a distributor of swimming pool equipment, parts and supplies encompassing nineteen service centers in California, Arizona and Nevada. The Company also made scheduled principal payments of $2.5 million required under its Senior Loan Facility.

Borrowings under the Senior Loan Facility may, at the Company’s option, bear interest at either (i) the agent bank’s corporate base rate or the federal funds rate plus 0.5%, whichever is higher, plus a margin ranging from 0.0% to 0.5% or (ii) LIBOR plus a margin ranging from 0.75% to 2.0%, in each case depending on the Company’s leverage ratio. Substantially all of the assets of the Company, including the capital stock of its wholly owned subsidiaries, secure the 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.

In February 2000, the Company purchased 232,500 shares of its common stock pursuant to a share repurchase program announced in October 1998. In April 2000, the Company purchased 31,500 shares of its common stock pursuant to a share repurchase program announced in November 1999. Certain intercompany dividends paid by the Company and related to such stock repurchases created covenant defaults under the Senior Loan Facility. On April 17, 2000, the lenders under the Senior Loan Facility waived such defaults in accordance with the provisions of the Senior Loan Facility.

The above-mentioned shares purchased pursuant to the Company’s share repurchase program have been adjusted to reflect the three-for-two stock split of the Company’s common stock effective June 19, 2000.

The Company’s acquisitions have been financed primarily by borrowings under its credit facilities and seller financing. In order 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).

Interest Rate Risk
As a result of the variable interest rates on the Senior Revolving Note and Senior Term Note under the Senior Loan Facility, the Company’s earnings are exposed to changes in short-term interest rates. If (i) the variable rates on the Company’s Senior Loan Facility were to increase by 1.0% from the rate at December 31, 1999; (ii) the Company borrowed the maximum amount available under its revolving line of credit ($65.0 million) for all of 2000; and (iii) the Company made all required payments of principal ($5.0 million) in 2000, then solely as a result of the increase in interest rates, the Company’s interest expense would increase $739,000 resulting in a $456,000 decrease in net income, assuming an effective tax rate of 38.25%. The fair value of the Company’s Senior Revolving Note and Senior Term Note is not affected by changes in market interest rates.

Foreign Exchange Risk
There have been no material changes from that reported in the Company’s Form 10-K for the year ended December 31, 1999.

The above statements regarding future periods which are not historical facts are forward-looking statements that involve risks and uncertainties, including but not limited to factors related to (i) the sensitivity of the swimming pool supply business to weather conditions; (ii) the intense competition and low barriers to entry in the swimming pool supply industry; (iii) the sensitivity of the swimming pool supply business to general economic conditions; (iv) the Company’s ability to identify appropriate acquisition candidates, complete acquisitions on satisfactory terms or successfully integrate acquired businesses; (v) the Company’s ability to obtain financing on satisfactory terms; (vi) the risk of fire, safety and casualty losses and related claims of liability inherent in the storage of chemicals sold by the Company; (vii) the Company’s ability to remain in compliance with the numerous environmental, health and safety requirements to which it is subject; 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.

The Company’s stockholders should also be aware that while the Company does, at various times, communicate with securities analysts, it is against the Company’s policies to disclose to such analysts any material non-public information or other confidential information. Accordingly, the Company’s stockholders should not assume that the Company agrees with statements or reports issued by such analysts. To the extent such statements or reports contain projections, forecasts or opinions by such analysts about the Company, such reports are not the responsibility of the Company.

For additional information identifying other important factors which may affect the Company’s operations and markets and could cause actual results to vary materially from those anticipated in the forward-looking statements, see the Company’s Securities and Exchange Commission filings, including but not limited to the discussion included in the Business section of the Company’s Form 10-K.

Exhibits required by Item 601 of Regulation S-K

     Financial Data Schedule

On August 14, 2000, the Company filed a Form 8-K pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, Item 2, Acquisition or Disposition of Assets reporting the acquisition of the business of Superior Pool Products, Inc., previously operated as a subsidiary of Arch Chemicals, Inc. The acquisition was completed at the close of business on July 31, 2000.