8-K

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

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported) February 16, 2006

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

Delaware	0-26640	36-3943363
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

109 Northpark Boulevard, Covington, Louisiana      70433-5001
    (Address of Principal Executive Offices)                  (Zip Code)

Registrant’s telephone number, including area code      (985) 892-5521

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.  

The following information is being provided under Form 8-K Item 2.02 and should not be deemed incorporated by reference by any general statement incorporating by reference this Current Report on Form 8-K into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates this information by reference, and none of this information should be deemed “filed” under such acts.

On February 16, 2006, SCP Pool Corporation, a Delaware corporation, issued a press release announcing its fourth quarter and fiscal 2005 earnings results.

A copy of the press release is included herein as Exhibit 99.1.

Item 7.01 Regulation FD Disclosure.  

On February 16, 2006, SCP Pool Corporation issued the press release included herein as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

    (c) Exhibits

99.1   Press release issued by SCP Pool Corporation on February 16, 2006, announcing its fourth quarter and fiscal 2005 earnings results and the declaration of its regular quarterly cash dividend.

SIGNATURES

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 hereunto duly authorized.

SCP POOL CORPORATION

By:       /s/ Mark W. Joslin

            Mark W. Joslin

            Vice President and Chief Financial Officer

Dated: February 16, 2006

EX-99

EXHIBIT 99.1

SCP POOL CORPORATION
REPORTS TWELFTH CONSECUTIVE YEAR OF RECORD RESULTS

26% EARNINGS PER SHARE INCREASE FOR THE YEAR

COVINGTON, La. (February 16, 2006) – SCP Pool Corporation (the “Company” or “POOL”) (Nasdaq/NM: 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.

Pool Reports Record 2005 Results
Page 2
February 16, 2006

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.

SCP Pool Corporation is the largest wholesale distributor of swimming pool and related backyard products. Currently, POOL operates over 240 service centers in North America and Europe, through which it distributes more than 100,000 national brand and private label products to roughly 68,000 wholesale customers. For more information about POOL, please visit www.poolcorp.com.

This news release may include “forward-looking” statements that involve risk and uncertainties. The forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially due to a variety of factors, including the sensitivity of the swimming pool supply business to weather conditions and other risks detailed in POOL’s 2004 Form 10-K filed with the Securities and Exchange Commission.

CONTACT:

       Craig K. Hubbard
       Treasurer
       985.801.5117
       craig.hubbard@poolcorp.com

Pool Reports Record 2005 Results
Page 3
February 16, 2006

Consolidated Statements of Income

(Unaudited)	Three Months Ended						Year Ended
(In thousands, except per share data)	December 31,						December 31,
	2005			2004			2005			2004 (1)
Net sales	$	299,791		$	209,937		$	1,552,659		$	1,310,853
Cost of sales		216,580			153,533			1,120,211			940,019
Gross profit		83,211			56,404			432,448			370,834
Percent		27.8	%		26.9	%		27.9	%		28.3	%
Selling and administrative expenses		79,443			60,020			292,191			257,240
Operating income (loss)		3,768			(3,616	)		140,257			113,594
Percent		1.3	%		(1.7	)%		9.0	%		8.7	%
Interest expense, net		2,118			882			6,434			3,855
Income (loss) before income taxes and equity earnings		1,650			(4,498	)		133,823			109,739
Provision (benefit) for income taxes		637			(1,754	)		51,669			42,798
Equity (loss) earnings in unconsolidated interests, net		(905	)		--			1,467			--
Net income (loss)	$	108		$	(2,744	)	$	83,621		$	66,941
Earnings (loss) per share:
Basic	$	0.00		$	(0.05	)	$	1.59		$	1.27
Diluted	$	0.00		$	(0.05	)	$	1.50		$	1.19
Weighted average shares outstanding:
Basic		52,308			52,179			52,445			52,838
Diluted		55,328			52,179			55,634			56,139
Cash dividends declared per common share	$	0.09		$	0.07		$	0.34		$	0.20

      ⁽¹⁾ Audited

Pool Reports Record 2005 Results
Page 4
February 16, 2006

Condensed Consolidated Balance Sheets

(In thousands)	December 31,
	2005		2004
	(Unaudited)		(Audited)
Assets
Current assets:
Cash and cash equivalents	$	26,866	$	21,762
Receivables, net		42,809		33,887
Receivables pledged under receivables facility		98,976		63,702
Product inventories, net		330,575		195,787
Prepaid expenses		5,190		6,057
Deferred income taxes		7,977		2,340
Total current assets		512,393		323,535
Property and equipment, net		25,598		18,595
Goodwill		139,546		104,684
Other intangible assets, net		22,838		12,620
Equity interest investments		29,907		18,616
Other assets, net		6,354		2,816
Total assets	$	736,636	$	480,866
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	174,170	$	113,114
Accrued and other current liabilities		76,645		38,287
Short-term financing		65,657		42,595
Current portion of other long-term liabilities		1,350		1,350
Total current liabilities		317,822		195,346
Deferred income taxes		14,600		11,625
Long-term debt		129,100		50,420
Other long-term liabilities		2,134		3,140
Total liabilities		463,656		260,531
Total stockholders' equity		272,980		220,335
Total liabilities and stockholders' equity	$	736,636	$	480,866

1. Trade accounts receivable, net of the related allowance for doubtful accounts, and inventory, net of the related reserve for obsolescence, attributable to the Horizon acquisition at December 31, 2005, were $23.2 million and $29.4 million, respectively.

2. The allowance for doubtful accounts was $4.2 million at December 31, 2005 and $3.1 million at December 31, 2004. Days sales outstanding (DSO) was 33.6 days at December 31, 2005 compared to 33.4 days at December 31, 2004.

3. The inventory reserve was $3.9 million at December 2005 and $3.1 million at December 2004. The slowest moving class of inventory as a percentage of total inventory decreased to 1.3% at December 31, 2005 from 1.7% at December 31, 2004.

Pool Reports Record 2005 Results
Page 5
February 16, 2006

Condensed Consolidated Statements of Cash Flows

(In thousands)	Year Ended December 31,
	2005			2004
	(Unaudited)			(Audited)
Operating activities
Net income	$	83,621		$	66,941
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		5,410			5,895
Amortization		4,388			4,758
Equity earnings in unconsolidated investments		(2,386	)		--
Other		(5,180	)		(79	)
Changes in operating assets and liabilities, net of effects of acquisitions:
Receivables		(13,394	)		(12,879	)
Product inventories		(103,579	)		(2,681	)
Accounts payable		41,932			(6,880	)
Other		27,273			1,360
Net cash provided by operating activities		38,085			56,435
Investing activities
Acquisition of businesses, net of cash acquired		(89,963	)		(644	)
Equity interest investment		(3,539	)		(6,961	)
Purchase of property and equipment, net of sale proceeds		(8,361	)		(6,063	)
Net cash used in investing activities		(101,863	)		(13,668	)
Financing activities
Proceeds from revolving line of credit		364,383			340,104
Payments on revolving line of credit		(345,703	)		(328,584	)
Proceeds from asset-backed financing		67,133			66,522
Payments on asset-backed financing		(44,071	)		(66,345	)
Proceeds from other long-term debt		60,000			--
Payments on other long-term debt		(1,350	)		(2,023	)
Payment of deferred financing costs		(243	)		(483	)
Issuance of common stock under stock option plans		19,322			6,917
Payment of cash dividends		(17,862	)		(10,706	)
Purchase of treasury stock		(32,091	)		(40,823	)
Net cash provided by (used in) financing activities		69,518			(35,421	)
Effect of exchange rate changes on cash		(636	)		1,604
Increase in cash and cash equivalents		5,104			8,950
Cash and cash equivalents at beginning of year		21,762			12,812
Cash and cash equivalents at end of year	$	26,866		$	21,762

Pool Reports Record 2005 Results
Page 6
February 16, 2006

Addendum

(Unaudited)	Base Business						Acquired and Divested						Total
(In thousands)	Three Months						Three Months						Three Months
	Ended						Ended						Ended
	December 31,						December 31,						December 31,
	2005			2004			2005			2004			2005			2004
Net sales	$	248,715		$	208,031		$	51,076		$	1,906		$	299,791		$	209,937
Gross profit		68,020			56,156			15,191			248			83,211			56,404
Gross margin		27.3	%		27.0	%		29.7	%		13.0	%		27.8	%		26.9	%
Selling and operating expenses		64,394			57,805			15,049			2,215			79,443			60,020
Expenses as a % of net sales		25.9	%		27.8	%		29.5	%		116.2	%		26.5	%		28.6	%
Operating income (loss)		3,626			(1,650	)		142			(1,966	)		3,768			(3,616	)
Operating income (loss) margin		1.5	%		(0.8	)%		0.3	%		(103.1	)%		1.3	%		(1.7	)%

(Unaudited)	Base Business						Acquired and Divested						Total
(In thousands)	Twelve Months						Twelve Months						Twelve Months
	Ended						Ended						Ended
	December 31,						December 31,						December 31,
	2005			2004			2005			2004			2005			2004
Net sales	$	1,479,746		$	1,299,399		$	72,913		$	11,454		$	1,552,659		$	1,310,853
Gross profit		410,721			362,786			21,727			8,048			432,448			370,834
Gross margin		27.8	%		27.9	%		29.8	%		70.3	%		27.9	%		28.3	%
Selling and operating expenses		270,878			248,310			21,313			8,930			292,191			257,240
Expenses as a % of net sales		18.3	%		19.1	%		29.2	%		78.0	%		18.8	%		19.6	%
Operating income (loss)		139,843			114,476			414			(882	)		140,257			113,594
Operating income (loss) margin		9.5	%		8.8	%		0.6	%		(7.7	)%		9.0	%		8.7	%

We exclude the following service centers from base business for 15 months:

• acquired service centers;

• service centers divested or consolidated with acquired service centers; and

• new service centers opened in new markets.

Additionally, we generally allocate overhead expenses to acquired service centers on the basis of acquired service center net sales as a percentage of total net sales.

Pool Reports Record 2005 Results
Page 7
February 16, 2006

The effect of service center acquisitions and divestitures in the tables above includes the operations of the following:

• B&B s.r.l (Busatta) - October through December 2005

• Direct Replacements, Inc. - October through December 2005

• Horizon Distributors, Inc. - October through December 2005

• Pool Tech Distributors, Inc. - January through December 2005

• SCP Pool Distributors Spain, S.L. - January 2005 and January 2004

• Les Industries R.P. Inc. and Fort Wayne manufacturing - January through December 2004

EBITDA, as discussed above, is defined as net income plus interest expense, income taxes, depreciation and amortization. We consider EBITDA an important indicator of the operational strength and performance of our business, including the ability to provide cash flows to fund growth, service debt and pay dividends. EBITDA eliminates the non-cash depreciation of tangible assets and amortization of intangible assets. We believe EBITDA should be considered in addition to, not as a substitute for, operating income, net income and other measures of financial performance reported in accordance with accounting principles generally accepted in the United States (GAAP).

The table below presents a reconciliation of net income to EBITDA.

(Unaudited)	Year Ended
(In thousands)	December 31,
	2005		2004
Net income	$	83,621	$	66,941
Add:
Interest expense, net		6,434		3,855
Provision for income taxes		51,669		42,798
Income taxes on equity earnings		919		--
Depreciation		5,410		5,895
Amortization (1)		4,290		4,380
EBITDA	$	152,343	$	123,869

  ⁽¹⁾ Excludes amortization included in interest expense, net