Leslie's, Inc. (NASDAQ:LESL) Q1 2024 Earnings Conference Call February 1, 2024 4:30 PM ET Company Participants Caitlin Churchill - Investor Relations Mike Egeck - Chief Executive Officer Scott Bowman - Chief Financial Officer Conference Call Participants Ryan Merkel - William Blair Jonathan Matuszewski - Jefferies Simeon Gutman - Morgan Stanley Steven Forbes - Guggenheim Securities Garik Shmois - Loop Capital Markets Andrew Carter - Stifel Justin Kleber - Baird Operator Good afternoon and welcome to the Fir ...

First Quarter 2024 Earnings February 1, 2024 This presentation includes market data and certain other statistical information and estimates that are based on reports and other publications from industry analysts, market research firms, and other independent sources, as well as management's own good faith estimates and analyses. We believe these third-party reports to be reputable, but have not independently verified the underlying data sources, methodologies, or assumptions. Information that is based on est ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2023 OR LESLIE'S, INC. (Exact Name of Registrant as Specified in its Charter) | Delaware | 20-8397425 | | --- | --- | | (State or other jurisdiction of | (I.R.S. Employer | | incorporation or organization) | Identification No.) | | 2005 East Indian School Road | | | Phoenix, AZ | 85016 | | ( ...

Third Quarter 2023 Earnings August 2, 2023 INDUSTRY INFORMATION NON-GAAP FINANCIAL MEASURES FORWARD-LOOKING STATEMENTS Our actual results or outcomes could differ materially from those indicated in these forward-looking statements for a variety of reasons, including, among others: our ability to execute on our growth strategies; supply disruptions; our ability to maintain favorable relationships with suppliers and manufacturers; competition from mass merchants and specialty retailers; impacts on our busines ...

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements for the quarterly period ended July 1, 2023, along with management's discussion and analysis, market risk disclosures, and controls and procedures [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the quarterly period ended July 1, 2023, including balance sheets, statements of operations, stockholders' deficit, cash flows, and accompanying notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of July 1, 2023, total assets increased slightly to $1.137 billion, driven by higher inventories offset by a sharp decrease in cash, while total liabilities marginally increased and stockholders' deficit improved Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | July 1, 2023 (Unaudited) | October 1, 2022 (Audited) | July 2, 2022 (Unaudited) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $19,430 | $112,293 | $193,130 | | Inventories | $436,557 | $361,686 | $361,391 | | Total current assets | $536,704 | $542,378 | $632,329 | | Total assets | $1,137,425 | $1,109,631 | $1,116,991 | | **Liabilities & Stockholders' Deficit** | | | | | Total current liabilities | $315,297 | $347,956 | $432,895 | | Long-term debt, net | $774,884 | $779,726 | $781,322 | | Total liabilities | $1,317,235 | $1,307,582 | $1,375,760 | | Total stockholders' deficit | $(179,810) | $(197,951) | $(258,769) | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q3 fiscal 2023, sales decreased 9.3% year-over-year to $610.9 million, and net income fell 41.0% to $72.5 million, with diluted EPS at $0.39 Consolidated Statements of Operations Summary (in thousands, except per share amounts) | Metric | Three Months Ended July 1, 2023 | Three Months Ended July 2, 2022 | Nine Months Ended July 1, 2023 | Nine Months Ended July 2, 2022 | | :--- | :--- | :--- | :--- | :--- | | Sales | $610,891 | $673,633 | $1,018,839 | $1,086,529 | | Gross Profit | $251,596 | $303,607 | $388,062 | $456,552 | | Operating Income | $115,807 | $172,138 | $63,635 | $155,680 | | Net Income | $72,547 | $122,986 | $10,761 | $101,095 | | Diluted EPS | $0.39 | $0.67 | $0.06 | $0.54 | [Condensed Consolidated Statements of Stockholders' Deficit](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Deficit) The total stockholders' deficit improved to $(179.8) million as of July 1, 2023, primarily due to net income and equity-based compensation - The total stockholders' deficit decreased to **$(179.8) million** as of July 1, 2023, from **$(198.0) million** at the beginning of the fiscal year (October 1, 2022) This improvement was primarily due to the recognition of **$10.8 million** in net income and **$9.2 million** in equity-based compensation during the nine-month period[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended July 1, 2023, net cash used in operating activities was $(74.8) million, a significant negative swing from the prior year, primarily due to lower net income and increased inventories Summary of Cash Flows (in thousands) | Activity | Nine Months Ended July 1, 2023 | Nine Months Ended July 2, 2022 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(74,813) | $72,658 | | Net cash used in investing activities | $(40,898) | $(66,183) | | Net cash provided by (used in) financing activities | $22,848 | $(156,843) | | **Net decrease in cash and cash equivalents** | **$(92,863)** | **$(150,368)** | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, including the acquisition of five businesses for $15.5 million, the transition of debt facilities to Term SOFR, an increased effective tax rate, and remaining share repurchase availability - During the first nine months of fiscal 2023, the company acquired five businesses for an aggregate purchase price of **$15.5 million**, net of cash acquired, adding 12 new locations[32](index=32&type=chunk) - In March 2023, the Revolving Credit Facility was increased by **$50.0 million** to an aggregate of **$250.0 million** and transitioned from a LIBOR-based rate to a Term SOFR-based rate The Term Loan also transitioned to a Term SOFR benchmark in June 2023[47](index=47&type=chunk)[49](index=49&type=chunk) - The effective income tax rate for the nine months ended July 1, 2023, was **29.9%**, compared to **24.9%** for the prior-year period The increase was primarily due to state taxes and tax expenses related to equity-based compensation[53](index=53&type=chunk) - As of July 1, 2023, approximately **$147.7 million** remained available for future purchases under the company's **$300 million** share repurchase program, which expires in December 2024[60](index=60&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 9.3% Q3 sales decrease to traffic declines and an 11.8% drop in comparable sales, leading to gross margin contraction and significant declines in net income and Adjusted EBITDA Key Financial and Operational Data | Metric | Three Months Ended July 1, 2023 | Three Months Ended July 2, 2022 | Nine Months Ended July 1, 2023 | Nine Months Ended July 2, 2022 | | :--- | :--- | :--- | :--- | :--- | | Sales | $610,891K | $673,633K | $1,018,839K | $1,086,529K | | Comparable sales growth | (11.8)% | 7.4% | (10.9)% | 10.7% | | Gross Margin | 41.2% | 45.1% | 38.1% | 42.0% | | Net Income | $72,547K | $122,986K | $10,761K | $101,095K | | Adjusted EBITDA | $129,038K | $182,942K | $108,683K | $192,734K | - Q3 sales decreased **9.3%** YoY to **$610.9 million**, with comparable sales down **11.8%**, primarily driven by traffic declines For the nine-month period, sales decreased **6.2%** with comparable sales down **10.9%**[101](index=101&type=chunk)[102](index=102&type=chunk) - Gross margin for both the three and nine-month periods decreased by **390 basis points** year-over-year This was primarily driven by product margin rate declines from increased product costs that could not be passed to consumers, higher distribution expenses, and occupancy deleverage[103](index=103&type=chunk) - The company's business is highly seasonal, with sales and earnings peaking in the third and fourth fiscal quarters (April-September) Unseasonable weather can significantly impact sales[114](index=114&type=chunk)[116](index=116&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes in market risk exposures since its last Annual Report, noting the transition of its debt facilities from LIBOR to Term SOFR-based rates - There have been no material changes in the company's primary risk exposures, including interest rate risk and inflation, from those disclosed in the fiscal 2022 Annual Report on Form 10-K[140](index=140&type=chunk)[141](index=141&type=chunk) - Due to the discontinuation of LIBOR, the company has transitioned the interest rate benchmarks for its Revolving Credit Facility and Term Loan to Term SOFR-based rates[140](index=140&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were ineffective as of July 1, 2023, due to an un-remediated material weakness in internal control over financial reporting - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **ineffective** as of July 1, 2023[142](index=142&type=chunk) - The ineffectiveness stems from a material weakness in internal control over financial reporting, disclosed in the fiscal 2022 Form 10-K, which was not yet remediated[142](index=142&type=chunk) - The company is in the process of remediating the material weakness and anticipates that the remediation will be completed during fiscal year 2023[144](index=144&type=chunk) [PART II - OTHER INFORMATION](index=30&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity security sales, defaults, mine safety disclosures, other information, and a list of exhibits [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigations and claims, which management does not expect to have a material adverse effect on its financial position or results - The company is subject to various legal proceedings from the ordinary course of business, which are not expected to have a material adverse effect on its financials[147](index=147&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors since its fiscal 2022 Annual Report on Form 10-K, except as previously disclosed in its Q1 2023 Form 10-Q - There have been no material changes from the risk factors disclosed in the Annual Report on Form 10-K for the year ended October 1, 2022, except as disclosed in the Q1 2023 Form 10-Q[148](index=148&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no issuer purchases of its equity securities and no sales of unregistered securities during the reporting period - There were no issuer purchases of equity securities or sales of unregistered securities in the reported quarter[149](index=149&type=chunk) [Item 3. Defaults Upon Senior Securities](index=30&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports that there have been no defaults upon its senior securities - No defaults upon senior securities occurred[150](index=150&type=chunk) [Item 4. Mine Safety Disclosures](index=30&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[151](index=151&type=chunk) [Item 5. Other Information](index=30&type=section&id=Item%205.%20Other%20Information) On August 1, 2023, the company's board adopted Amended and Restated Bylaws to enhance procedural mechanics for stockholder proposals and director nominations, aligning with universal proxy rules - On August 1, 2023, the company's board of directors approved and adopted Amended and Restated Bylaws[152](index=152&type=chunk) - Key amendments include enhancing procedural and disclosure requirements for stockholder proposals and director nominations, aligning with SEC's universal proxy rules, and updating procedures for stockholder meetings and board conduct[152](index=152&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including Amended and Restated Bylaws, an amendment to the Term Loan Credit Agreement, and various officer certifications - Key exhibits filed with this report include the Amended and Restated Bylaws (Exhibit 3.1), Amendment No 1 to the Term Loan Credit Agreement (Exhibit 10.1), and officer certifications (Exhibits 31.1, 31.2, 32.1, 32.2)[155](index=155&type=chunk)

Leslie's, Inc. (NASDAQ:LESL) Q2 2023 Earnings Conference Call May 3, 2023 4:30 PM ET Company Participants Caitlin Churchill - IR Mike Egeck - CEO Steve Weddell - CFO Conference Call Participants Steven Forbes - Guggenheim Partners Hannah Pittock - Morgan Stanley Garik Shmois - Loop Capital Markets Jonathan Matuszewski - Jefferies Kate McShane - Goldman Sachs Peter Keith - Piper Sandler Andrew Carter - Stifel David Bellinger - MKM ROTH Operator Greetings, and welcome to the Leslie's, Inc. Q2 2023 Earnings Co ...

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 April 1, 2023 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) Emerging growth company ☐ If an emerging growth comp ...

Disclaimer Included in this presentation and the accompanying oral presentation are certain non-GAAP financial measures designed to supplement the Company's financial information presented in accordance with U.S. generally accepted accounting principles ("GAAP"). These non-GAAP measures should not be considered in isolation or as substitutes for the Company's results as reported under GAAP. In addition, these nonGAAP financial measures are not calculated in the same manner by all companies, and accordingly, ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q For the quarterly period ended December 31, 2022 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 | (I.R.S. Employer | | incorporation or organization) | Identification No.) ...

UNITED STATES For the fiscal year ended October 1, 2022 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 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 LESLIE'S, INC. (Exact name of Registrant as specified in its Charter) Delaware 20-8397425 (State or other jurisdiction of incorp ...