SEC Form 10-Q filed by Leslie's Inc.

9184

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 29, 2024

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 Number: 001-39667

 

LESLIE’S, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware	20-8397425
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2005 East Indian School Road Phoenix, AZ	85016
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (602) 366-3999

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		LESL		The Nasdaq Global Select Market

 

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 ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer		☒		Accelerated filer		☐
Non-accelerated filer		☐		Smaller reporting company		☐
Emerging growth company		☐

 

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 2, 2024, the Registrant had 184,912,804, shares of common stock, $0.001 par value per share, outstanding.

 

 

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Table of Contents

 

		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	2
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Stockholders’ Deficit	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to the Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
Signatures		28

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations or financial condition, business strategy, legal proceedings, competitive advantages, market size, growth opportunities, industry expectations, and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would,” or the negative of these words or other similar terms or expressions. Our actual results or outcomes could differ materially from those indicated in these forward-looking statements for a variety of reasons, including, among others:

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended September 30, 2023 and in our other filings with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results or outcomes could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q, and, while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q are based on events or circumstances as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information, changed expectations, the occurrence of unanticipated events or otherwise, except as required by law. We may not actually achieve the plans, intentions, outcomes, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments.

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PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements.

LESLIE’S, INC.

CONDENSED Consolidated Balance Sheets

(Amounts in Thousands, Except Share and Per Share Amounts)

 

		June 29, 2024				September 30, 2023				July 1, 2023
		(Unaudited)				(Audited)				(Unaudited)
Assets
Current assets
Cash and cash equivalents		$	74,438			$	55,420			$	19,430
Accounts and other receivables, net			45,817				29,396				49,263
Inventories			302,209				311,837				436,557
Prepaid expenses and other current assets			34,545				23,633				31,454
Total current assets			457,009				420,286				536,704
Property and equipment, net			94,135				90,285				85,396
Operating lease right-of-use assets			282,556				251,460				250,378
Goodwill and other intangibles, net			216,041				218,855				219,835
Deferred tax assets			15,409				7,598				194
Other assets			40,038				45,951				44,918
Total assets		$	1,105,188			$	1,034,435			$	1,137,425
Liabilities and stockholders’ deficit
Current liabilities
Accounts payable		$	108,935			$	58,556			$	147,436
Accrued expenses and other current liabilities			107,208				90,598				95,074
Operating lease liabilities			61,638				62,794				61,342
Income taxes payable			—				5,782				3,345
Current portion of long-term debt			8,100				8,100				8,100
Total current liabilities			285,881				225,830				315,297
Operating lease liabilities, noncurrent			216,756				193,222				193,004
Revolving Credit Facility			—				—				31,000
Long-term debt, net			768,598				773,276				774,884
Other long-term liabilities			2,110				3,469				3,050
Total liabilities			1,273,345				1,195,797				1,317,235
Commitments and contingencies
Stockholders’ deficit
Common stock, $0.001 par value, 1,000,000,000 shares authorized and 184,912,804, 184,333,670, and 184,004,936 issued and outstanding as of June 29, 2024, September 30, 2023, and July 1, 2023, respectively.			185				184				184
Additional paid in capital			105,940				99,280				97,313
Retained deficit			(274,282	)			(260,826	)			(277,307	)
Total stockholders’ deficit			(168,157	)			(161,362	)			(179,810	)
Total liabilities and stockholders’ deficit		$	1,105,188			$	1,034,435			$	1,137,425

 

See accompanying notes which are an integral part of these condensed consolidated financial statements.

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LESLIE’S, INC.

CONDENSED Consolidated Statements of Operations

(Amounts in Thousands, Except Per Share Amounts)

(Unaudited)

 

		Three Months Ended								Nine Months Ended
		June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
Sales		$	569,638			$	610,891			$	932,262			$	1,018,839
Cost of merchandise and services sold			340,798				359,295				598,686				630,777
Gross profit			228,840				251,596				333,576				388,062
Selling, general and administrative expenses			131,145				135,789				302,879				324,427
Operating income			97,695				115,807				30,697				63,635
Other expense:
Interest expense			18,156				17,675				53,380				48,282
Total other expense			18,156				17,675				53,380				48,282
Income (loss) before taxes			79,539				98,132				(22,683	)			15,353
Income tax expense (benefit)			18,889				25,585				(9,227	)			4,592
Net income (loss)		$	60,650			$	72,547			$	(13,456	)		$	10,761
Earnings per share:
Basic		$	0.33			$	0.39			$	(0.07	)		$	0.06
Diluted		$	0.33			$	0.39			$	(0.07	)		$	0.06
Weighted average shares outstanding:
Basic			184,834				183,932				184,614				183,725
Diluted			184,861				184,760				184,614				184,752

 

See accompanying notes which are an integral part of these condensed consolidated financial statements.

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LESLIE’S, INC.

CONDENSED Consolidated Statements of Stockholders’ Deficit

(Amounts in Thousands)

(Unaudited)

 

		Common Stock								Additional								Total
		Shares				Amount				Paid in Capital				Retained Deficit				Stockholders’ Deficit
Balance, April 1, 2023			183,843			$	184			$	94,705			$	(349,854	)		$	(254,965	)
Issuance of common stock under the Plan			166				—				—				—				—
Equity-based compensation			—				—				2,649				—				2,649
Restricted stock units surrendered in lieu of withholding taxes			(4	)			—				(41	)			—				(41	)
Net income			—				—				—				72,547				72,547
Balance, July 1, 2023			184,005			$	184			$	97,313			$	(277,307	)		$	(179,810	)
Balance, March 31, 2024			184,743			$	185			$	103,775			$	(334,932	)		$	(230,972	)
Issuance of common stock under the Plan			186				—				—				—				—
Equity-based compensation			—				—				2,246				—				2,246
Restricted stock units surrendered in lieu of withholding taxes			(16	)			—				(81	)			—				(81	)
Net income			—				—				—				60,650				60,650
Balance, June 29, 2024			184,913			$	185			$	105,940			$	(274,282	)		$	(168,157	)
		Common Stock								Additional								Total
		Shares				Amount				Paid in Capital				Retained Deficit				Stockholders’ Deficit
Balance, October 1, 2022			183,481			$	183			$	89,934			$	(288,068	)		$	(197,951	)
Issuance of common stock under the Plan			643				1				—				—				1
Equity-based compensation			—				—				9,159				—				9,159
Restricted stock units surrendered in lieu of withholding taxes			(119	)			—				(1,780	)			—				(1,780	)
Net income			—				—				—				10,761				10,761
Balance, July 1, 2023			184,005			$	184			$	97,313			$	(277,307	)		$	(179,810	)
Balance, September 30, 2023			184,334			$	184			$	99,280			$	(260,826	)		$	(161,362	)
Issuance of common stock under the Plan			727				1				—				—				1
Equity-based compensation			—				—				7,629				—				7,629
Restricted stock units surrendered in lieu of withholding taxes			(148	)			—				(969	)			—				(969	)
Net loss			—				—				—				(13,456	)			(13,456	)
Balance, June 29, 2024			184,913			$	185			$	105,940			$	(274,282	)		$	(168,157	)

 

See accompanying notes which are an integral part of these condensed consolidated financial statements.

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LESLIE’S, INC.

CONDENSED Consolidated Statements of Cash Flows

(Amounts in Thousands)

(Unaudited)

		Nine Months Ended
		June 29, 2024				July 1, 2023
Operating Activities
Net income (loss)		$	(13,456	)		$	10,761
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization			24,420				25,569
Equity-based compensation			7,629				9,159
Amortization of deferred financing costs and debt discounts			1,647				1,541
Provision for doubtful accounts			1,007				25
Deferred income taxes			(7,811	)			1,074
Loss on asset dispositions			52				103
Changes in operating assets and liabilities:
Accounts and other receivables			(17,428	)			(3,399	)
Inventories			9,628				(70,393	)
Prepaid expenses and other current assets			(10,912	)			(9,614	)
Other assets			6,561				(8,864	)
Accounts payable			50,379				(9,019	)
Accrued expenses and other current liabilities			14,428				(12,827	)
Income taxes payable			(5,782	)			(9,166	)
Operating lease assets and liabilities, net			48				237
Net cash provided by (used in) operating activities			60,410				(74,813	)
Investing Activities
Purchases of property and equipment			(34,324	)			(26,733	)
Business acquisitions, net of cash acquired			—				(15,549	)
Proceeds from asset dispositions			77				1,384
Net cash used in investing activities			(34,247	)			(40,898	)
Financing Activities
Borrowings on Revolving Credit Facility			140,500				264,000
Payments on Revolving Credit Facility			(140,500	)			(233,000	)
Repayment of long-term debt			(6,075	)			(6,075	)
Payment of deferred financing costs			(101	)			(297	)
Payments of employee tax withholdings related to restricted stock vesting			(969	)			(1,780	)
Net cash (used in) provided by financing activities			(7,145	)			22,848
Net increase (decrease) in cash and cash equivalents			19,018				(92,863	)
Cash and cash equivalents, beginning of period			55,420				112,293
Cash and cash equivalents, end of period		$	74,438			$	19,430
Supplemental Information:
Cash paid for interest		$	51,762			$	46,413
Cash paid for income taxes, net of refunds received			6,702				12,648

 

See accompanying notes which are an integral part of these condensed consolidated financial statements.

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LESLIE’S, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Leslie’s, Inc. (“Leslie’s,” “we,” “our,” “us,” “its,” or the “Company”) is the leading direct-to-consumer pool and spa care brand. We market and sell pool and spa supplies and related products and services, which primarily consist of maintenance items such as chemicals, equipment and parts, and cleaning accessories, as well as safety, recreational, and fitness-related products. We currently market our products through over 1,000 company-operated locations in 39 states and e-commerce websites.

 

 

 

 

 

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes, which are included elsewhere in this Quarterly Report on Form 10-Q. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Actual results or outcomes may differ materially from those anticipated in these forward-looking statements, which are subject to risks, uncertainties, and other factors, including those described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 and in our other filings with the SEC.

We operate on a fiscal calendar that results in a fiscal year consisting of a 52- or 53-week period ending on the Saturday closest to September 30th. In a 52-week fiscal year, each quarter contains 13 weeks of operations; in a 53-week fiscal year, each of the first, second and third quarters includes 13 weeks of operations and the fourth quarter includes 14 weeks of operations. References to the three months ended June 29, 2024 and July 1, 2023 refer to the 13 weeks ended June 29, 2024 and July 1, 2023, respectively. References to the nine months ended June 29, 2024 and July 1, 2023 refer to the 39 weeks ended June 29, 2024 and July 1, 2023, respectively.

Our Company

We are the largest and most trusted direct-to-consumer brand in the $15 billion United States pool and spa care industry, serving residential and professional consumers. Founded in 1963, we are the only direct-to-consumer pool and spa care brand with national scale, operating an integrated marketing and distribution ecosystem powered by a physical network of over 1,000 branded locations and a robust digital platform. We offer an extensive assortment of professional-grade products, the majority of which are exclusive to Leslie’s, as well as certified installation and repair services, all of which are essential to the ongoing maintenance of pools and spas. Our dedicated team of associates, pool and spa care experts, and experienced service technicians are passionate about empowering our consumers with the knowledge, products, and solutions necessary to confidently maintain and enjoy their pools and spas. The considerable scale of our integrated marketing and distribution ecosystem, which is powered by our direct-to-consumer network, uniquely enables us to efficiently reach and service every pool and spa in the continental United States.

We operate primarily in the pool and spa aftermarket industry, which is one of the most fundamentally attractive consumer categories given its scale, predictability, and growth outlook. More than 80% of our assortment is comprised of non-discretionary products essential to the care of residential and commercial pools and spas. Our assortment includes chemicals, equipment and parts, cleaning and maintenance equipment, and safety, recreational, and fitness-related products. We also offer important essential services, such as equipment installation and repair for residential consumers and professional pool operators. Consumers receive the benefit of extended vendor warranties on purchased products from our locations and on installations or repairs from our certified in-field technicians. We offer complimentary, commercial-grade in-store water testing and analysis via our proprietary AccuBlue® system, which increases consumer engagement, conversion, basket size, and loyalty, resulting in higher lifetime value. Our water treatment expertise is powered by data and intelligence accumulated from the millions of water tests we have performed over the years, positioning us as the most trusted water treatment service provider in the industry. Due to the non-discretionary nature of our products and services, our business has historically delivered strong growth and profitability in challenging market environments, including through the Great Recession and the COVID-19 pandemic.

We have a legacy of leadership and disruptive innovation. Since our founding in 1963, we have been the leading innovator in our category and have provided our consumers with the most advanced pool and spa care available. As we have scaled, we have leveraged our competitive advantages to strategically reinvest in our business and intellectual property to develop new value-added capabilities. We pioneered complimentary in-store water testing, offered complimentary in-store equipment repair services, introduced the industry’s first loyalty program, and developed an expansive platform of owned and exclusive brands. These differentiated capabilities allow us to meet the needs of any pool and spa owner, whether they care for their pool or spa themselves or rely on a professional, whenever, wherever, and however they choose to engage with us.

Key Factors and Measures We Use to Evaluate Our Business

We consider a variety of financial and operating measures in assessing the performance of our business. The key measures we use under United States generally accepted accounting principles (“GAAP”) are sales, gross profit and gross margin, selling, general and administrative expenses (“SG&A”), and operating income (loss). The key non-GAAP measures and other operating measures we use are comparable sales, comparable sales growth, Adjusted EBITDA, Adjusted net income (loss), and Adjusted diluted earnings per share.

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Sales

We offer a broad range of products that consists of regularly purchased, non-discretionary pool and spa maintenance items such as chemicals, equipment, cleaning accessories and parts, as well as installation and repair services for pool and spa equipment. Our offering of proprietary, owned, and third-party brands across diverse product categories drives sales growth by attracting new consumers and encouraging repeat visits from our existing consumers. Revenue from merchandise sales at retail locations is recognized at the point of sale, revenue from services is recognized when the services are rendered, and revenue from e-commerce merchandise sales is generally recognized upon shipment of the merchandise. Revenue is recorded net of related discounts and sales tax. Payment from retail customers is generally at the point of sale and payment terms for professional pool operator customers are based on our credit requirements and generally have terms of less than 60 days. When we receive payment from a consumer before the consumer has taken possession of the merchandise or the service has been performed, the amount received is recorded as deferred revenue or as a customer deposit until the sale or service is complete. Sales are impacted by weather, seasonality, product mix and availability, promotional and competitive activities, the spending habits of our consumers, as well as inflation and interest rates. Growth of our sales is primarily driven by comparable sales growth and expansion of our locations in existing and new markets.

Comparable Sales and Comparable Sales Growth

We measure comparable sales growth as the increase or decrease in sales recorded by the comparable base in any reporting period, compared to sales recorded by the comparable base in the prior reporting period. The comparable base includes sales through our locations and through our e-commerce websites and third-party marketplaces. Comparable sales growth is a key measure used by management and our board of directors to assess our financial performance.

We consider a new or acquired location comparable in the first full month after it has completed one year of sales. Closed locations become non-comparable during their last partial month of operation. Locations that are relocated are considered comparable at the time the relocation is complete. Comparable sales is not calculated in the same manner by all companies, and accordingly, is not necessarily comparable to similarly titled measures of other companies and may not be an appropriate measure for performance relative to other companies.

The number of new locations reflects the number of locations opened during a particular reporting period. New locations require an initial capital investment in location buildouts, fixtures, and equipment, which we amortize over time as well as cash required for inventory.

As of June 29, 2024, we operated over 1,000 locations in 39 states across the United States. We owned 27 locations and leased the remainder of our locations. Our initial lease terms are typically five years with options to renew for multiple successive five-year periods. We evaluate new opportunities in new and existing markets based on the number of pools and spas in the market, competition, our existing locations, availability and cost of real estate, and distribution and operating costs of our locations. We review the performance of our locations on a regular basis and evaluate opportunities to strategically close locations to improve our profitability. Our limited investment costs in individual locations and our ability to transfer sales to our extensive network of remaining locations and e-commerce websites allows us to improve profitability as a result of any strategic closures.

Gross Profit and Gross Margin

Gross profit is equal to our sales less our cost of merchandise and services sold. Cost of merchandise and services sold reflects the direct cost of purchased merchandise, costs to package certain chemical products, including direct materials and labor, costs to provide services, including labor and materials, as well as distribution and occupancy costs. The direct cost of purchased merchandise includes vendor rebates. We recognize vendor rebates based on historical data. Distribution costs include warehousing and transportation expenses, including costs associated with third-party fulfillment centers used to ship merchandise to our e-commerce consumers. Occupancy costs include the rent, common area maintenance, real estate taxes, and depreciation and amortization costs of all retail locations. These costs are significant and are expected to continue to increase proportionate to our growth.

Gross margin is gross profit as a percentage of our sales. Gross margin is impacted by merchandise costs, pricing and promotions, product mix and availability, inflation, and service costs, which can vary. Our proprietary brands, custom-formulated products, and vertical integration provide us with cost savings, as well as greater control over product availability and quality as compared to other companies in the industry. Gross margin is also impacted by the costs of distribution and occupancy costs, which can vary.

Our gross profit is variable in nature and generally follows changes in sales. The components of our cost of merchandise and services sold may not be comparable to the components of cost of sales or similar measures of other companies. As a result, our gross profit and gross margin may not be comparable to similar data made available by other companies.

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Selling, General and Administrative Expenses

Our SG&A includes selling and operating expenses across our retail locations and digital platform, and our corporate-level general and administrative expenses. Selling and operating expenses at retail locations include payroll, bonus and benefit costs for personnel, supplies, and credit and debit card processing costs. Corporate expenses include payroll, bonus, and benefit costs for our corporate and field support functions, equity-based compensation, marketing and advertising, insurance, utilities, occupancy costs related to our corporate office facilities, professional services, and depreciation and amortization for all assets, except those related to our retail locations and distribution operations, which are included in cost of merchandise and services sold. Selling and operating expenses generally vary proportionately with sales and the change in the number of locations. In contrast, general and administrative expenses are generally not directly proportional to sales and the change in the number of locations and may increase over time to support our growth and public company obligations. The components of our SG&A may not be comparable to the components of similar measures of other companies.

Operating Income (Loss)

Operating income (loss) is gross profit less SG&A. Operating income (loss) excludes interest expense, loss on debt extinguishment, income tax expense (benefit), and other (income) expenses, net. We use operating income (loss) as an indicator of the productivity of our business and our ability to manage expenses.

Adjusted EBITDA

Adjusted EBITDA is defined as earnings before interest (including amortization of debt issuance costs), taxes, depreciation and amortization, management fees, equity-based compensation expense, loss (gain) on debt extinguishment, loss (gain) on asset and contract dispositions, executive transition costs, severance, costs related to equity offerings, strategic project costs, merger and acquisition costs, and other non-recurring, non-cash or discrete items. Adjusted EBITDA is a key measure used by management and our board of directors to assess our financial performance. Adjusted EBITDA is also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures. We use Adjusted EBITDA to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other companies using similar measures.

Adjusted EBITDA is not a recognized measure of financial performance under GAAP but is used by some investors to determine a company’s ability to service or incur indebtedness. Adjusted EBITDA is not calculated in the same manner by all companies, and accordingly, is not necessarily comparable to similarly titled measures of other companies and may not be an appropriate measure for performance relative to other companies. Adjusted EBITDA should not be construed as an indicator of a company’s operating performance in isolation from, or as a substitute for, net income (loss), cash flows from operations or cash flow data, all of which are prepared in accordance with GAAP. We have presented Adjusted EBITDA solely as supplemental disclosure because we believe it allows for a more complete analysis of results of operations. Adjusted EBITDA is not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of operating performance as determined in accordance with GAAP. In the future, we may incur expenses or charges such as those added back to calculate Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these items.

Adjusted Net Income (Loss) and Adjusted Diluted Earnings per Share

Adjusted net income (loss) and Adjusted diluted earnings per share are additional key measures used by management and our board of directors to assess our financial performance. Adjusted net income (loss) and Adjusted diluted earnings per share are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures.

Adjusted net income (loss) is defined as net income (loss) adjusted to exclude management fees, equity-based compensation expense, loss (gain) on debt extinguishment, loss (gain) on asset and contract dispositions, executive transition costs, severance, costs related to equity offerings, strategic project costs, merger and acquisition costs, and other non-recurring, non-cash, or discrete items. Adjusted diluted earnings per share is defined as Adjusted net income (loss) divided by the diluted weighted average number of common shares outstanding.

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Factors Affecting the Comparability of our Results of Operations

Our reported results have been affected by, among other events, the following events, which must be understood in order to assess the comparability of our period-to-period financial performance and condition.

Impact of Macroeconomic Events and Uncertainties

Our financial performance and condition may be impacted to varying extents from period to period by macroeconomic and geopolitical developments, including public health crises, escalating global conflicts, supply chain disruptions, labor market constraints, rising rates of inflation, rising interest rates, general economic slowdown, and potential failures among financial institutions. The direct and indirect impact COVID-19 has had on our financial and operating performance since 2020 has made period-to-period analysis and accurate forecasting difficult. Due to the non-discretionary nature of our products and services, our business delivered strong growth and profitability throughout the pandemic, in spite of restrictions on the operation of our locations and distribution facilities. Significant disruption to our supply chain for products we sell, as a result of COVID-19, geopolitical conflict or otherwise, can also have a material impact on our sales and earnings and cause unpredictable changes in results. In addition, we believe adverse macroeconomic trends and uncertainties including persistent inflation and high interest rates also increase consumers’ sensitivity to price and result in cost-conscious behavior inclusive of high ticket items, which can result in corresponding declines in sales and/or gross profit.

An additional uncertainty that can impact our results of operations is consumer purchasing patterns. Due to the highly unstable supply of granular chlorine compounds over the last three years, we believe some customers stockpiled chemicals, resulting in unexpected changes in demand. As a result of such behavior, our revenue may be higher than normal during the periods of stockpiling and may be lower than normal during the periods after stockpiling has occurred.

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Results of Operations

We derived our condensed consolidated statements of operations for the three and nine months ended June 29, 2024 and July 1, 2023 from our condensed consolidated financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future. The following table summarizes key components of our results of operations for the periods indicated, both in dollars and as a percentage of our sales (in thousands, except per share amounts):

 

		Three Months Ended								Nine Months Ended
Statements of Operations Data:		June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
Sales		$	569,638			$	610,891			$	932,262			$	1,018,839
Cost of merchandise and services sold			340,798				359,295				598,686				630,777
Gross profit			228,840				251,596				333,576				388,062
Selling, general and administrative expenses			131,145				135,789				302,879				324,427
Operating income			97,695				115,807				30,697				63,635
Other expense:
Interest expense			18,156				17,675				53,380				48,282
Total other expense			18,156				17,675				53,380				48,282
Income (loss) before taxes			79,539				98,132				(22,683	)			15,353
Income tax expense (benefit)			18,889				25,585				(9,227	)			4,592
Net income (loss)		$	60,650			$	72,547			$	(13,456	)		$	10,761
Earnings per share
Basic		$	0.33			$	0.39			$	(0.07	)		$	0.06
Diluted		$	0.33			$	0.39			$	(0.07	)		$	0.06
Weighted average shares outstanding
Basic			184,834				183,932				184,614				183,725
Diluted			184,861				184,760				184,614				184,752
Percentage of Sales(1)		(%)				(%)				(%)				(%)
Sales			100.0				100.0				100.0				100.0
Cost of merchandise and services sold			59.8				58.8				64.2				61.9
Gross margin			40.2				41.2				35.8				38.1
Selling, general and administrative expenses			23.0				22.2				32.5				31.8
Operating income			17.2				19.0				3.3				6.2
Other expense:
Interest expense			3.2				2.9				5.7				4.7
Total other expense			3.2				2.9				5.7				4.7
Income (loss) before taxes			14.0				16.1				(2.4	)			1.5
Income tax expense (benefit)			3.3				4.2				(1.0	)			0.5
Net income (loss)			10.6				11.9				(1.4	)			1.1
Other Financial and Operations Data:
Number of new and acquired locations, net			10				12				13				19
Number of locations open at end of period			1,020				1,009				1,020				1,009
Comparable sales growth(2)			(4.0	)%			(11.8	)%			(4.1	)%			(10.9	)%
Adjusted EBITDA(3)		$	109,469			$	129,038			$	65,771			$	108,683
Adjusted EBITDA as a percentage of sales(3)			19.2	%			21.1	%			7.1	%			10.7	%
Adjusted net income (loss)(3)		$	63,297			$	76,362			$	(5,465	)		$	25,370
Adjusted diluted earnings per share		$	0.34			$	0.41			$	(0.03	)		$	0.14

 

 

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		Three Months Ended								Nine Months Ended
		June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
Net income (loss)		$	60,650			$	72,547			$	(13,456	)		$	10,761
Interest expense			18,156				17,675				53,380				48,282
Income tax expense (benefit)			18,889				25,585				(9,227	)			4,592
Depreciation and amortization expense(1)			8,246				8,144				24,419				25,569
Equity-based compensation expense(2)			2,246				2,754				7,683				9,460
Strategic project costs(3)			395				749				1,058				2,763
Executive transition costs and other(4)			887				1,584				1,914				7,256
Adjusted EBITDA		$	109,469			$	129,038			$	65,771			$	108,683

 

		Three Months Ended								Nine Months Ended
		June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
Net income (loss)		$	60,650			$	72,547			$	(13,456	)		$	10,761
Equity-based compensation expense(2)			2,246				2,754				7,683				9,460
Strategic project costs(3)			395				749				1,058				2,763
Executive transition costs and other(4)			887				1,584				1,914				7,256
Tax effects of these adjustments(5)			(881	)			(1,272	)			(2,664	)			(4,870	)
Adjusted net income (loss)		$	63,297			$	76,362			$	(5,465	)		$	25,370

 

Selected Financial Information

Sales

Sales decreased to $569.6 million for the three months ended June 29, 2024, from $610.9 million in the prior year period, a decrease of $41.3 million, or 6.8%. The decrease was primarily driven by a reduction in average order value of approximately 5.0% due to chemical pricing actions and a decrease in transaction volume of 1.7%. Comparable sales decreased $21.6 million relative to the prior year period. Non-comparable sales, including acquisitions and new stores, contributed $2.6 million in the period.

During the three months ended June 29, 2024, our sales were adversely impacted by cold and wet weather in April and May which reduced the number of pool days in non-seasonal markets and delayed the start of pool season in seasonal markets. Sales improved in June with warm and dry weather, but it was not enough to offset the lost pool days in April and May. Additionally, sales were negatively impacted by weakness in large ticket categories due the cumulative effect of high inflation and interest rates, which contributed to the reduction in average order value. In addition, this year we experienced a calendar shift in which we lost two high volume selling days during the core pool season, and gained two lower volume selling days at the end of March and early April.

Sales decreased to $932.3 million for the nine months ended June 29, 2024, from $1,018.8 million in the prior year period, a decrease of $86.6 million, or 9.3%. The decrease was primarily driven by a reduction in average order value of approximately 5.7% due to chemical pricing actions and a decrease in transaction volume of 2.7%. Comparable sales decreased $36.5 million relative to the prior year period. Non-comparable sales, including acquisitions and new stores, contributed $6.4 million in the period.

 

Gross Profit and Gross Margin

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Gross profit decreased to $228.8 for the three months ended June 29, 2024 from $251.6 million in the prior year period, a decrease of $22.8 million, or 9.9%. Gross margin decreased to 40.2% compared to 41.2% in the prior year period, which represents a decrease of 100 basis points. The decrease in gross margin was primarily driven by negative impacts of 112 basis points from the June 2023 chemical pricing actions, 85 basis points from the expensing of previously capitalized distribution center costs due to significant reductions in inventory during the period and 46 basis points from deleverage on occupancy costs. These impacts were partially offset by a 90 basis point reduction in inventory adjustments and distribution costs. Gross profit decreased to $333.6 million for the nine months ended June 29, 2024 from $388.1 million in the prior year period, a decrease of $54.5 million, or 16.3%. Gross margin decreased to 35.8% compared to 38.1% in the prior year period, which represents a decrease of approximately 230 basis points. The decrease in gross margin was primarily driven by negative impacts of 121 basis points from the June 2023 chemical pricing actions, 102 basis points from deleverage on occupancy costs, and 83 basis points from the expensing of previously capitalized distribution center costs due to significant reductions in inventory during the period. These impacts were partially offset by an 82 basis point reduction in inventory adjustments and distribution costs.

Selling, General and Administrative Expenses

SG&A decreased to $131.1 million during the three months ended June 29, 2024 from $135.8 million in the prior year period, a decrease of $4.6 million, or 3.5%. The decrease in SG&A was primarily related to a decrease in merchant fees of $2.4 million associated with lower sales, and lower payroll costs of $2.3 million as we continue to make solid progress on our cost management initiatives.

SG&A decreased to $302.9 million during the nine months ended June 29, 2024 from $324.4 million in the prior year period, a decrease of $21.5 million, or 6.6%. The decrease in SG&A was primarily related to lower payroll costs of $6.5 million, a decrease in merchant fees of $4.7 million associated with lower sales, lower executive transition costs of $2.2 million and a decrease in equity compensation expense of $1.8 million.

Interest Expense

Interest expense increased to $18.2 million for the three months ended June 29, 2024 from $17.7 million in the prior year period, an increase of $0.5 million. Interest expense increased to $54.4 million for the nine months ended June 29, 2024 from $48.3 million in the prior year period, an increase of $6.1 million.

These increase for the three and nine months ended was due to higher interest rates on our Term Loan.

Income Taxes

Income tax expense decreased to $18.9 million for the three months ended June 29, 2024 compared to $25.6 million in the prior year period, a decrease of $6.7 million. Income tax benefit was $9.2 million for the nine months ended June 29, 2024 compared to $4.6 million of income tax expense in the prior year period, a change of $13.8 million. These changes in both the three and nine months ended June 29, 2024 compared to the prior year period were primarily attributable to a pretax loss for the nine months ended June 29, 2024, compared to pretax income in the prior year period.

The effective income tax rate was 23.8% and a benefit of 40.7% for the three and nine months ended June 29, 2024, respectively. The effective income tax rate was 26.1% and 29.9% for the three and nine months ended July 1, 2023, respectively. The differences in effective tax rates during the periods are primarily attributable to the pretax income or loss during those periods.

Net Income (Loss) and Diluted Earnings per Share

Net income decreased to $60.7 million for the three months ended June 29, 2024 compared to $72.5 million in the prior year period, an decrease of $11.9 million. Net loss was $13.5 million for the nine months ended June 29, 2024 compared to net income of $10.8 million in the prior year period, a change of $24.3 million. These changes in net income (loss) were primarily due to decreases in gross profit, partially offset by a reduction in selling, general and administrative expense. Diluted earnings per share was $0.33 for the three months ended June 29, 2024 compared to $0.39 in the prior year period. Diluted earnings per share was $(0.07) for the nine months ended June 29, 2024 compared to diluted earnings per share of $0.06 in the prior year period.

Adjusted net income decreased to $63.3 million for the three months ended June 29, 2024 compared to $76.4 million in the prior year period, a decrease of $13.1 million. Adjusted net loss was $5.5 million for the nine months ended June 29, 2024 compared to adjusted net income of $25.4 million in the prior year period, a change of $30.9 million. Adjusted diluted earnings per share was $0.34 for the three months ended June 29, 2024 compared to $0.41 in the prior year period. Adjusted diluted earnings per share was $(0.03) for the nine months ended June 29, 2024 compared to adjusted diluted earnings per share of $0.14 in the prior year period.

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Adjusted EBITDA

Adjusted EBITDA decreased to $109.5 million for the three months ended June 29, 2024 compared to $129.0 million in the prior year period, a decrease of $19.5 million. Adjusted EBITDA decreased to $65.8 million for the nine months ended June 29, 2024 compared to $108.7 million in the prior year period, a decrease of $42.9 million. These decreases were primarily due to decreases in gross profit.

Seasonality and Quarterly Fluctuations

Our business is highly seasonal. Sales and earnings are highest during the third and fourth fiscal quarters, which include April through September, and represent the peak months of swimming pool use. Sales are substantially lower during our first and second fiscal quarters. We have a long track record of investing in our business throughout the year, including in operating expenses, working capital, and capital expenditures related to new locations and other growth initiatives. While these investments drive performance during the primary selling season in our third and fourth fiscal quarters, they have a negative impact on our earnings and cash flow during our first and second fiscal quarters.

We typically experience a build-up of inventory and accounts payable during the first and second fiscal quarters in anticipation of the peak swimming pool supply selling season. We negotiate extended payment terms with certain of our primary suppliers as we receive merchandise in December through March, and we pay for merchandise in April through July.

The principal external factor affecting our business is weather. Hot weather can increase purchases of chemicals and other non-discretionary products as well as purchases of discretionary products and can drive increased purchases of installation and repair services. Unseasonably cool weather or significant amounts of rainfall during the peak pool sales season can reduce chemical consumption in pools and spas and decrease consumer purchases of our products and services. In addition, unseasonably early or late warming trends can increase or decrease the length of the pool season and impact time around pool openings and closings, and therefore, our total sales and timing of our sales.

We generally open new locations before our peak selling season begins and we generally close locations after our peak selling season ends. We expect that our quarterly results of operations will fluctuate depending on the timing and amount of sales contributed by new locations.

Liquidity and Capital Resources

Overview

Our primary sources of liquidity are net cash provided by operating activities and borrowing availability under our Revolving Credit Facility. Historically, we have funded working capital requirements, capital expenditures, payments related to acquisitions, debt service requirements and repurchases of shares of our common stock with internally generated cash on hand and through our Revolving Credit Facility.

Cash and cash equivalents consist primarily of cash on deposit with banks. Cash and cash equivalents totaled $74.4 million and $55.4 million as of June 29, 2024 and September 30, 2023, respectively. We had no amounts outstanding on our Revolving Credit Facility as of June 29, 2024 and September 30, 2023.

Our primary working capital requirements are for the purchase of inventory, payroll, rent, other facility costs, distribution costs, and general and administrative costs. Our working capital requirements fluctuate during the year, driven primarily by seasonality and the timing of inventory purchases.

Our capital expenditures are primarily related to infrastructure-related investments, including investments related to upgrading and maintaining our information technology systems, ongoing location improvements, expenditures related to our distribution centers, and new location openings. We expect to fund capital expenditures from net cash provided by operating activities.

Based on our growth plans, we believe our cash and cash equivalents position, net cash provided by operating activities and borrowing availability under our Revolving Credit Facility will be adequate to finance our working capital requirements, planned capital expenditures, strategic acquisitions, share repurchases, and debt service over the next 12 months and thereafter. If cash provided by operating activities and borrowings under our Revolving Credit Facility are not sufficient or available to meet our capital requirements, then we may need to obtain additional equity or debt financing. There can be no assurance that equity or debt financing will be available to us if we need it or, if available, whether the terms will be satisfactory to us.

As of June 29, 2024, outstanding standby letters of credit totaled $10.9 million and, after considering borrowing base restrictions, we had $239.1 million of available borrowing capacity under the terms of the Revolving Credit Facility. As of June 29, 2024, we were in compliance with the covenants under the Revolving Credit Facility and our Term Loan agreements.

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Summary of Cash Flows

A summary of our cash flows from operating, investing, and financing activities is presented in the following table (in thousands):

 

		Nine Months Ended
		June 29, 2024				July 1, 2023
Net cash provided by (used in) operating activities		$	60,410			$	(74,813	)
Net cash used in investing activities			(34,247	)			(40,898	)
Net cash (used in) provided by financing activities			(7,145	)			22,848
Net increase (decrease) in cash and cash equivalents		$	19,018			$	(92,863	)

 

Cash Provided by (Used in) Operating Activities

Net cash provided by operating activities was $60.4 million for the nine months ended June 29, 2024 compared to net cash used in operating activities of $74.8 million in the prior year period, an increase of $135.2 million. The increase was primarily driven by changes in working capital related to reductions in accounts payable of $50.4 million and product inventories of $9.6 million.

Cash Used in Investing Activities

Net cash used in investing activities was $34.2 million for the nine months ended June 29, 2024 compared to $40.9 million in the prior year period, a decrease of $6.7 million. This decrease was primarily driven by a decrease in investments for business acquisitions of $15.5 million, partially offset by an increase in purchases of property and equipment of $7.6 million.

Cash (Used in) Provided by Financing Activities

Net cash used in financing activities for the nine months ended June 29, 2024 was $7.1 million compared to net cash provided by financing activities of $22.8 million in the prior year period, a decrease of $29.9 million. This decrease was primarily driven by lower borrowings on our Revolving Credit Facility during the period.

Share Repurchase Program

On December 3, 2021, the board of directors authorized a share repurchase program for up to an aggregate of $300 million of the Company’s outstanding shares of common stock over a period of three years, expiring December 31, 2024. As of June 29, 2024, approximately $147.7 million remained available for future purchases under our share repurchase program (see Note 12—Share Repurchase Program to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q).

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Contractual Obligations and Other Commitments

There have been no material changes to our contractual obligations and other commitments during the three months and nine ended June 29, 2024 from those disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

Critical Accounting Estimates

The preparation of our condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and expenses during the reported periods. The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of a company’s financial condition and results of operations, and which require a company to make its most difficult and subjective judgments. Based on this definition, we have identified the critical accounting policies and judgments, which are disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. We base these estimates on historical results and various other assumptions we believe to be reasonable, all of which form the basis for making estimates concerning the carrying values of assets and liabilities that are not readily available from other sources. Actual results may differ from these estimates.

There have been no material changes to our critical accounting estimates during the three and nine months ended June 29, 2024 from those disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

Recent Accounting Pronouncements

For information regarding recent accounting pronouncements, see Note 2—Summary of Significant Accounting Policies to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk

There have been no material changes in our primary risk exposures or management of market risks from those disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

Impact of Inflation and Deflation

There have been no material changes in our exposure to inflation or deflation from those disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

Item 4. Controls and Procedures.

Management’s Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) are designed to ensure that information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the appropriate time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure. We, under the supervision of and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures as of June 29, 2024. Based on that evaluation, our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) have concluded that the design and operation of our disclosure controls and procedures were ineffective as the material weaknesses in internal control over financial reporting disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 were not yet remediated as of June 29, 2024.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended June 29, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, except as described below.

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Ongoing Remediation Efforts

As previously disclosed in Part II, Item 9A, “Controls and Procedures” of our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, we are in the process of implementing a plan to address the material weaknesses in internal control over financial reporting that were disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. We are enhancing the design and implementation of existing controls and creating new controls as needed with respect to inventory control as follows:

We are enhancing the design and implementation of existing controls and creating new controls as needed with respect to vendor rebates as follows:

The actions we are taking are subject to continued senior management review as well as Audit Committee oversight. The material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We are committed to continuing to improve our internal control processes, and, as we continue to evaluate and work to improve our internal control over financial reporting, we may take additional measures to address control deficiencies, or we may modify certain of our remediation measures as described above or as described in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

 

We are subject to other litigation, claims, and other proceedings that arise from time-to-time in the ordinary course of business. We believe these actions are routine and incidental to the business. As of June 29, 2024, we had established reserves for claims that are probable and estimable and such reserves were not significant. While we cannot feasibly predict the outcome of these matters with certainty, we believe, based on examination of these matters, experience to date and discussions with counsel, that the ultimate liability, individually or in the aggregate, will not have a material adverse effect on our business, financial position, results of operations, or cash flows.

 

Except as set forth in Note 10 - Commitments & Contingencies to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there have been no material changes to the legal proceedings described in Part I Item 3 “Legal Proceedings” of our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

Item 1A. Risk Factors.

There have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the year ended September 30, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

None.

Sales of Unregistered Securities

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

(a) Information Required to be Disclosed on Form 8-K

None.

(b) Changes to Procedures for Recommending Director Nominees

Not applicable.

(c) Trading Plans

During the quarter ended June 29, 2024, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).

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Item 6. Exhibits.

				Incorporated by Reference
Exhibit Number		Exhibit Description		Form		Exhibit		Filing Date/ Period End Date
10.1		Executive Severance Pay Plan, dated April 23, 2024, by and between Leslie’s Poolmart, Inc and Benjamin Lindquist		10-Q		10.2		03/30/2024
10.2		Amendment No. 7, dated as of April 3, 2024, to the Credit Agreement among Leslie’s Poolmart, Inc., and the subsidiary borrowers named therein, Bank of America, N.A., as Administrative Agent, and U.S. Bank National Association, Co-Collateral Agent		8-K		10.1		04/09/2024
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934
32.1+		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350
32.2+		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350
101.INS*		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*		Inline XBRL Taxonomy Schema Document With Embedded Linkbase Documents
104*		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

* Filed herewith.

+ Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

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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, thereunto duly authorized.

 

		LESLIE’S, INC.
Date: August 7, 2024		By:	/s/ Scott Bowman
			Scott Bowman
			Chief Financial Officer
			(Principal Financial Officer and Principal Accounting Officer)

 

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