SCP Pool Corporation Reports Twelfth Consecutive Year of Record Results
biz.yahoo.com
Thursday February 16, 8:00 am ET
26% Earnings Per Share Increase for the Year
COVINGTON, La.--(BUSINESS WIRE)--Feb. 16, 2006--SCP Pool Corporation (the "Company" or "POOL") (Nasdaq:POOL) today reported record net sales and net income for 2005.
Earnings per share for 2005 increased 26% to $1.50 per diluted share on net income of $83.6 million, compared to $1.19 per diluted share on net income of $66.9 million last year.
Net sales for the year ended December 31, 2005 increased $241.8 million, or 18%, to $1.55 billion, compared to $1.31 billion in 2004. Base business sales growth of 14% contributed $180.4 million to the increase due primarily to the growth in the installed base of swimming pools, POOL's execution of its sales and service programs and 32% growth in complementary product sales. The remaining increase in net sales is attributable to acquired service centers, including the Horizon branches acquired in October 2005.
Gross profit for the year ended December 31, 2005 increased $61.6 million, or 17%, to $432.4 million from $370.8 million in 2004. This increase is primarily due to the increase in net sales. Gross profit as a percentage of net sales (gross margin) decreased 40 basis points to 27.9% in 2005 from 28.3% in 2004. The decline in gross margin is attributable to the divestiture of POOL's North American manufacturing assets and unprecedented levels of price increases, which have been generally passed on, but on a dollar per unit basis instead of on a percentage basis.
Operating expenses in 2005 increased $35.0 million, or 14%, to $292.2 million from $257.2 million in 2004. Operating expenses as a percentage of net sales decreased to 18.8% in 2005 from 19.6% in 2004.
Operating income increased $26.7 million, or 24%, to $140.3 million in 2005 from $113.6 million in 2004. Operating income as a percentage of net sales (operating margin) increased 30 basis points to 9.0% in 2005 from 8.7% in 2004. EBITDA (as defined in the addendum) increased 23% to $152.3 million in 2005 from $123.9 million in 2004.
Cash provided by operations was $38.1 million, compared to cash from operations of $56.4 million in 2004. The decrease in 2005 cash from operations is the result of the Company's pre-price increase purchases and participation in vendor payment incentives for early buy purchases received and paid for in the fourth quarter, partially offset by the deferral of third and fourth quarter 2005 estimated federal tax payments and higher net income. The Company expects that the pre-price increase purchases will mitigate the potential adverse gross margin impact of price increases through the supply chain.
"Building on our core strengths and continually executing our strategies for profitable growth have resulted in our twelfth consecutive record-breaking year. With strong organic growth at the sales, gross profit and operating income levels in 2005, including a solid fourth quarter performance, we are very optimistic about 2006. We believe that 2006 earnings per share will be in the range of $1.70 to $1.75 per diluted share, including the impact of expensing stock options," commented Manuel Perez de la Mesa, President and CEO.
In the fourth quarter of 2005, net sales increased $89.9 million, or 43%, to $299.8 million, compared to $209.9 million in the comparable 2004 period. This is due to base business sales growth of 20%, as well as the Horizon acquisition which accounted for a portion of the increase in net sales in the fourth quarter. Gross profit margin increased 90 basis points to 27.8% in the fourth quarter of 2005 from 26.9% for the same period last year. Operating income for the fourth quarter was $3.8 million, or 1.3% of net sales, compared to an operating loss of $3.6 million, or 1.7% of net sales in the same period last year. Additionally, mild weather provided a positive impact on results for the quarter. Earnings per share for the fourth quarter of 2005 were $0.00 on net income of $0.1 million, compared to a loss of $0.05 per share on a net loss of $2.7 million in the fourth quarter of 2004.
POOL also announced today that its Board of Directors has declared its regular quarterly cash dividend of $0.09 per share. The dividend will be payable on March 13, 2006 to holders of record on February 27, 2006.
At December 31, 2005, 201 service centers were included in the base business calculations, and 45 service centers, including the 40 Horizon service centers, were excluded because they were acquired or opened in new markets within the last 15 months. |
