To Our Fellow Stockholders:

As in the past, we would like to begin our letter by thanking all of our employees for their exceptional efforts and accomplishments. While the economy has been in turmoil for the past three years, we have simply doubled our earnings and increased sales by over $400 million.  In fact, 2002 represented the fifth consecutive year where our sales increased by over $100 million. These results begin and end with our employees and demonstrate the soundness of our mission.

The year 2002 presented your company with many challenges and varied opportunities. Fortunately in 2002, “normal” weather was a positive factor in contrast to the aberrations we experienced in 2001. We also embraced the challenge of opening ten new service centers for the 2002 season – the most we have attempted in any one year. Even with the depth and breadth of resources that we have available, it takes significant and sustained effort to open and realize gains with a new service center. Our “POOL” team met these challenges while not losing sight of the long term objectives as stated in the Company’s mission statement.

The acquisition of Ft. Wayne Pools toward the end of the 2002 pool season provided us with an important opportunity. A successful and responsible distributor for many years, Fort Wayne’s network was a natural complement to our Superior Pool Products network. It enhanced our ability to enter new markets as well as strengthen operations in markets where we consolidated service centers. These consolidations, together with enhancements to operating systems and procedures, were completed in the fourth quarter. The Superior network, including the former Fort Wayne locations, now encompasses 55 service centers with over $300 million in sales.