Press Release: Leslie's, Inc. Announces Record -2-

· 02/04/2021 16:05

Condensed Consolidated Statements of Operations (unaudited) Three Months Ended Three Months Ended ---------------------- ---------------------- In thousands, except per share amounts January 2, 2021 December 28, 2019 ---------------------------- ---------------------- ---------------------- Sales $ 145,006 $ 122,978 Cost of merchandise and services sold 93,291 81,900 ---------------------------- -------------- -------------- Gross profit 51,715 41,078 Selling, general and administrative expenses 77,489 59,721 ---------------------------- -------------- -------------- Operating loss (25,774) (18,643) Other expense: Interest expense 11,516 22,417 Loss on debt extinguishment 7,281 - Other expenses, net - 137 ---------------------------- -------------- -------------- Total other expense 18,797 22,553 Loss before taxes (44,571) (41,197) Income tax benefit (14,314) (15,010) Net loss $ (30,257) $ (26,187) ---------------------------- -------------- -------------- Net loss per share Basic and diluted $ (0.17) $ (0.17) Weighted average shares outstanding Basic and diluted 176,990 156,500 Other financial data (1) ---------------------------- Adjusted EBITDA $ (243) $ (9,004) Adjusted net loss $ (10,619) $ (24,314) Basic and diluted adjusted net loss per share $ (0.06) $ (0.16) (1) See the section titled "GAAP to Non-GAAP Reconciliation" Condensed Consolidated Balance Sheets (unaudited) As of As of As of In thousands January 2, 2021 October 3, 2020 December 28, 2019 --------------- --------------- ---------------- ----------------- Assets Current assets Cash and cash equivalents $ 104,077 $ 157,072 $ 1,938 Accounts and other receivables, net 37,116 31,481 49,657 Inventories, net 174,535 148,966 185,130 Prepaid expenses and other current assets 39,899 34,614 6,201 -------------- ---------- ----------- ---------- Total current assets 355,627 372,133 242,926 --------------- ---------- ----------- ---------- Property and equipment, net 62,628 66,391 71,805 Operating lease right-of-use assets 191,125 177,655 212,492 Goodwill and other intangibles, net 120,636 121,186 122,718 Deferred tax assets 14,729 6,583 - Other assets 2,363 2,490 1,345 --------------- ---------- ----------- ---------- Total assets $ 747,108 $ 746,438 $ 651,286 --------------- ---------- ----------- ---------- Liabilities and stockholders' deficit Current liabilities Accounts payable $ 69,046 $ 92,372 $ 75,265 Accrued expenses 59,086 101,167 54,381 Operating lease liabilities 56,398 54,459 60,502 Income taxes payable - 1,857 - Current portion of long-term debt 8,341 8,341 8,341 Total current liabilities 192,871 258,196 198,489 --------------- ---------- ----------- ---------- Revolving commitment - - 6,300 Deferred tax liabilities - - 3,911 Operating lease liabilities, noncurrent 139,796 130,234 162,329 Long-term debt, net 795,394 1,179,550 1,185,256 Other long-term liabilities 5,457 5,457 7,936 Total liabilities 1,133,518 1,573,437 1,564,221 --------------- ---------- ----------- ---------- Total stockholders' deficit (386,410) (826,999) (912,935) Total liabilities and stockholders' deficit $ 747,108 $ 746,438 $ 651,286 --------------- ---------- ----------- ---------- Condensed Consolidated Statements of Cash Flows (unaudited) Three Months Ended Three Months Ended-- our ability to execute on our growth strategies; -- our ability to maintain favorable relationships with suppliers and manufacturers; -- competition from mass merchants and specialty retailers; -- regulatory changes and development affecting our current and future products; -- our ability to obtain additional capital to finance operations; -- impacts on our business from the COVID-19 pandemic; and -- other risks and uncertainties, including those listed in the section titled "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended October 3, 2020 and subsequent filings with the U.S. Securities and Exchange Commission.

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 and Adjusted Net Income per Share

Adjusted net income and adjusted net income per share are additional key measures used by management and our board of directors to assess our financial performance. Adjusted net income and adjusted net income 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 is defined as net income adjusted to exclude loss (gain) on disposition of assets, management fees, equity-based compensation expense, mark-to-market on interest rate cap, and special items. Adjusted net income per share is defined as adjusted net income divided by the weighted average number of common shares outstanding.

Forward Looking Statements

This press release contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this press release, including statements regarding our future results of operations or financial condition, business strategy 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 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 press release 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 the section titled "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended October 3, 2020 and subsequent filings with the Securities and Exchange Commission. 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 press release. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances 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 based on information available to us as of the date of this press release. And while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete.

The forward-looking statements made in this press release 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 press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

Contact

Investors

Farah Soi/Caitlin Churchill

ICR

investorrelations@lesl.com

Media

Megan Gaffney

SHIFT Communications

media@lesl.com

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February 04, 2021 16:05 ET (21:05 GMT)