8-K
Leslie's, Inc. (LESL)
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): August 4, 2021
LESLIE’S, INC.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-39667 | 20-8397425 |
|---|---|---|
| (State or Other Jurisdiction<br><br><br>of Incorporation) | (Commission<br><br><br>File Number) | (IRS Employer<br><br><br>Identification No.) |
2005 East Indian School Road
Phoenix, Arizona 85016
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (602) 366-3999
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:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br><br>Symbol(s) | Name of each exchange<br><br><br>on which registered |
|---|---|---|
| Common Stock, par value $0.001 per share | LESL | Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
Item 2.02 Results of Operations and Financial Condition.
On August 4, 2021, Leslie’s, Inc. (the "Company") issued a press release announcing its financial results for the third quarter ended July 3, 2021. A copy of the press release is furnished as Exhibit 99.1 to this report.
The information under Item 2.02 of this report, including Exhibit 99.1 hereto, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information and the accompanying exhibit shall not be deemed to be incorporated by reference into filings with the U.S. Securities and Exchange Commission (the "SEC") made by the Company, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release of Leslie’s, Inc., dated August 4, 2021 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
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.
| LESLIE’S, INC. | |
|---|---|
| By: | /s/ Steven M. Weddell |
| Name: | Steven M. Weddell |
| Title: | Executive Vice President and Chief Financial Officer |
Date: August 4, 2021
2
lesl-ex991_6.htm
Exhibit 99.1
Leslie’s, Inc. Announces
Record Results for Third Quarter Fiscal 2021;
Raises Full Year Outlook
| • | Third quarter sales of $596.5 million compared to $479.9 million in the prior year quarter, an increase of 24.3%; comparable sales growth of 23.9% on a reported basis and 19.4% on a shifted basis as a result of the 53^rd^ week in fiscal 2020 |
|---|---|
| • | Net income of $118.8 million compared to $71.9 million in the prior year quarter, an increase of 65.2%; Adjusted net income of $124.4 million compared to $73.7 million in the prior year quarter, an increase of 68.8% |
| --- | --- |
| • | Adjusted EBITDA of $179.3 million compared to $119.8 million in the prior year quarter, an increase of 49.7% |
| --- | --- |
| • | Diluted net income per share of $0.61 compared to $0.46 in the prior year quarter. Adjusted diluted net income per share of $0.64 compared to $0.47 in the prior year quarter. |
| --- | --- |
| • | Raises fiscal 2021 sales outlook to $1,315 million, Adjusted EBITDA to $265 million, and Adjusted diluted net income per share to $0.83 at the midpoint of the ranges. |
| --- | --- |
PHOENIX, August 4, 2021 – Leslie's, Inc. ("Leslie's" or the “Company”; NASDAQ: LESL), the largest and most trusted direct-to-consumer brand in the U.S. pool and spa care industry, today announced its financial results for the third quarter of fiscal 2021.
Mike Egeck, Chief Executive Officer, commented, “We delivered a record third quarter marking the largest sales, gross profit, and EBITDA quarter in our history. These results reflect the great efforts and contributions of all of our associates and vendor partners who navigated constrained supply chains to meet elevated consumer demand. This financial performance also demonstrates continued strong execution against our strategic initiatives. As we look ahead, we remain encouraged by consumer demand and the momentum we are seeing across our growth initiatives, both of which position us well for the remainder of the year and beyond.”
For the Thirteen Weeks Ended July 3, 2021 Highlights
| • | Sales increased to $596.5 million compared to $479.9 million in the prior year period, an increase of $116.6 million or 24.3%. Comparable sales on a reported basis increased 23.9% compared to the prior year period. On a shifted basis, using a realigned period in 2020 for comparability given the 53^rd^ week in fiscal 2020, comparable sales increased 19.4%. |
|---|---|
| • | Gross profit increased to $283.7 million compared to $210.8 million in the prior year period, an increase of $72.9 or 34.6%, and gross margin was 47.6% compared to 43.9% in the prior year period, an increase of 364 basis points. |
| --- | --- |
| • | SG&A increased to $117.3 million compared to $99.2 million in the prior year period, an increase of $18.1 million or 18.2%, driven by the increase in overall sales and continued investments to support Company growth. SG&A as a percentage of sales was 19.7% compared to 20.7% in the prior year period, a decrease of 101 basis points. |
| --- | --- |
| • | Operating income was $166.4 million compared to $111.6 million in the prior year period. |
| --- | --- |
| • | Net income increased to $118.8 million compared to $71.9 million in the prior year period. |
| --- | --- |
| • | Adjusted net income increased to $124.4 million compared to $73.7 million in the prior year period, an increase of $50.7 million or 68.8%. |
| --- | --- |
| • | Diluted net income per share increased to $0.61 compared to $0.46 in the prior year period. Adjusted diluted net income per share increased to $0.64 compared to $0.47 in the prior year period, an increase of $0.17 per share or 36.2%. |
| --- | --- |
| • | Adjusted EBITDA increased to $179.3 million compared to $119.8 million in the prior year period, an increase of $59.5 million or 49.7%. Adjusted EBITDA as a percentage of sales was 30.1% compared to 25.0% in the prior year period, an increase of 510 basis points. |
| --- | --- |
For the Thirty-Nine Weeks Ended July 3, 2021 Highlights
| • | Sales increased to $934.0 million compared to $729.3 million in the prior year period, an increase of $204.7 million or 28.1%. Comparable sales on a reported basis increased 27.2% for the same period of fiscal 2021 compared to the same period of fiscal 2020. On a shifted basis, using a realigned period in 2020 for comparability given the 53^rd^ week in fiscal 2020, comparable sales increased 23.4%. |
|---|---|
| • | Gross profit increased to $407.1 million compared to $291.8 million in the prior year period, an increase of $115.3 million or 39.5%, and gross margin was 43.6% compared to 40.0% in the prior year period, an increase of 358 basis points. |
| --- | --- |
| • | SG&A increased to $265.1 million compared to $214.9 million in the prior year period, an increase of $50.2 million or 23.4%. SG&A as a percentage of sales was 28.4% compared to 29.5% for the same period of fiscal 2020, a decrease of 109 basis points. |
| --- | --- |
| • | Operating income was $142.0 million compared to $76.8 million in the prior year period. |
| --- | --- |
| • | Net income increased to $82.1 million compared to $15.9 million in the prior year period. |
| --- | --- |
| • | Adjusted net income increased to $111.0 million compared to $20.7 million in the prior year period, an increase of $90.3 million. |
| --- | --- |
| • | Diluted net income per share increased to $0.43 compared to $0.10 in the prior year period. Adjusted diluted net income per share increased to $0.59 compared to $0.13 for the prior year period, an increase of $0.46 per share |
| --- | --- |
| • | Adjusted EBITDA increased to $188.6 million compared to $102.7 million in the prior year period, an increase of $85.9 million or 83.6%. Adjusted EBITDA as a percentage of sales was 20.2% compared to 14.1% for the prior year period, an increase of 611 basis points. |
| --- | --- |
Balance Sheet and Cash Flow Highlights
| • | Cash and cash equivalents totaled $309.1 million at the end of the third quarter fiscal 2021 compared to cash and cash equivalents of $148.9 million at the end of the prior year period. There were no borrowings under our revolver as of July 3, 2021 or June 27, 2020. |
|---|---|
| • | Inventories totaled $224.5 million at the end of the third quarter fiscal 2021 compared to $181.1 million at end of the same period of fiscal 2020. The Company continues to invest in inventory to meet heightened consumer demand. |
| --- | --- |
| • | Net cash provided by operating activities totaled $118.4 million for the first nine months of fiscal 2021 compared to $85.9 million for the same period of fiscal 2020. |
| --- | --- |
| • | Capital expenditures totaled $17.8 million for the first nine months of fiscal 2021 compared to $15.5 million for the same period of fiscal 2020. |
| --- | --- |
Fiscal 2021 Outlook
The Company raised guidance for the full year fiscal 2021, a 52-week year. Fiscal 2020 included a 53rd week, which added approximately $18 million in sales, $1.5 million in net income, and $3.0 million in Adjusted EBITDA.
| Current Outlook | Prior Outlook | |
|---|---|---|
| Sales | $1,305 to $1,325 million | $1,280 to $1,300 million |
| Net income | $125 to $130 million | $115 to $125 million |
| Adjusted net income | $155 to $160 million | $145 to $155 million |
| Adjusted EBITDA | $260 to $270 million | $245 to $255 million |
| Adjusted net income per share | $0.80 to $0.85 | $0.75 to $0.80 |
| Diluted share count | 192 million | 193 million |
Conference Call Details
A conference call to discuss its financial results for the third quarter of fiscal 2021 is scheduled for today, August 4, 2021 at 4:30 p.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial 855-327-6837 (international callers please dial 1-631-891-4304) approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call will be available online at https://ir.lesliespool.com/.
A recorded replay of the conference call will be available within approximately three hours of the conclusion of the call and can be accessed online at https://ir.lesliespool.com/ for 90 days.
About Leslie's
Founded in 1963, Leslie's is the largest direct-to-consumer brand in the U.S. pool and spa care industry, serving residential, professional, and commercial consumers. Leslie's markets its products through more than 940 physical locations and multiple digital platforms. The company employs more than 5,000 associates, pool and spa care experts, and certified technicians who are passionate about empowering consumers with the knowledge, products, and solutions necessary to confidently maintain and enjoy their pools and spas.
Use of Non-GAAP Financial Measures and Other Operating Measures
In addition to reporting financial results in accordance with accounting principles generally accepted in the United States (“GAAP”), the Company uses certain non-GAAP financial measures and other operating measures, including comparable sales growth and Adjusted EBITDA, Adjusted net income, and Adjusted net income per share, to evaluate the effectiveness of its business strategies, to make budgeting decisions, and to compare its performance against that of other peer companies using similar measures. These non-GAAP financial measures and other operating measures should not be considered in isolation or as substitutes for the Company’s results as reported under GAAP. In addition, these non-GAAP financial measures and other operating measures are not calculated in the same manner by all companies, and accordingly, are not necessarily comparable to similarly titled measures of other companies and may not be appropriate measures for performance relative to other companies.
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.
Adjusted EBITDA
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.
Adjusted EBITDA is defined as earnings before interest (including amortization of debt costs), taxes, depreciation, amortization, loss (gain) on disposition of assets, management fees, equity-based compensation expense, mark-to-market on interest rate cap, and other non-recurring, non-cash or discrete items. 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 should not be construed as an indicator of a company’s operating performance in isolation from, or as a substitute for, net income, 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 included in the calculation of 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 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 other non-recurring, non-cash or discrete items. Adjusted diluted net income per share is defined as Adjusted net income divided by the diluted 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:
| • | 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; |
| --- | --- |
| • | impacts on our business from the sensitivity of our business to weather conditions, changes in the economy, and the housing market; |
| --- | --- |
| • | our ability to implement technology initiatives that deliver the anticipated benefits, without disrupting our operations; |
| --- | --- |
| • | regulatory changes and development affecting our current and future products; |
| --- | --- |
| • | our ability to obtain additional capital to finance operations; |
| --- | --- |
| • | commodity price inflation and deflation; |
| --- | --- |
| • | impacts on our business from the COVID-19 pandemic; |
| --- | --- |
| • | impacts on our business from cyber and other security threats or disruptions; 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, Quarterly Report on Form 10-Q for the quarter ended January 2, 2021, Quarterly Report on Form 10-Q for the quarter ended April 3, 2021 and subsequent filings with the U.S. Securities and Exchange Commission. |
| --- | --- |
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 above. 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 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. 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 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. We may not actually achieve the plans, intentions, 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.
Contact
Investors
Farah Soi/Caitlin Churchill
ICR
investorrelations@lesl.com
Condensed Consolidated Statements of Income
(amounts in thousands, except per share amounts)
(unaudited)
| Three Months Ended | Nine Months Ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| July 3, 2021 | June 27, 2020 | July 3, 2021 | June 27, 2020 | ||||||
| Sales | $ | 596,543 | $ | 479,929 | $ | 933,991 | $ | 729,285 | |
| Cost of merchandise and services sold | 312,845 | 269,160 | 526,895 | 437,526 | |||||
| Gross profit | 283,698 | 210,769 | 407,096 | 291,759 | |||||
| Selling, general and administrative expenses | 117,264 | 99,165 | 265,127 | 214,933 | |||||
| Operating income | 166,434 | 111,604 | 141,969 | 76,826 | |||||
| Other expense: | |||||||||
| Interest expense | 7,399 | 19,472 | 27,041 | 64,597 | |||||
| Loss on debt extinguishment | — | — | 9,169 | — | |||||
| Other expenses, net | 861 | 585 | 1,917 | 910 | |||||
| Total other expense | 8,260 | 20,057 | 38,127 | 65,507 | |||||
| Income before taxes | 158,174 | 91,547 | 103,842 | 11,319 | |||||
| Income tax expense (benefit) | 39,372 | 19,613 | 21,749 | (4,602 | ) | ||||
| Net income | $ | 118,802 | $ | 71,934 | $ | 82,093 | $ | 15,921 | |
| Net income per share | |||||||||
| Basic | $ | 0.63 | $ | 0.46 | $ | 0.45 | $ | 0.10 | |
| Diluted | $ | 0.61 | $ | 0.46 | $ | 0.43 | $ | 0.10 | |
| Weighted average shares outstanding | |||||||||
| Basic | 188,264 | 156,500 | 184,021 | 156,500 | |||||
| Diluted | 194,200 | 156,500 | 189,603 | 156,500 |
Other Financial Data ^(1)^
| Three Months Ended | Nine Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| July 3, 2021 | June 27, 2020 | July 3, 2021 | June 27, 2020 | |||||
| Adjusted EBITDA | $ | 179,346 | $ | 119,800 | $ | 188,631 | $ | 102,714 |
| Adjusted net income | $ | 124,364 | $ | 73,737 | $ | 110,964 | $ | 20,667 |
| Adjusted net income per share - Basic | $ | 0.66 | $ | 0.47 | $ | 0.60 | $ | 0.13 |
| Adjusted net income per share - Diluted | $ | 0.64 | $ | 0.47 | $ | 0.59 | $ | 0.13 |
| (1) | See section titled “GAAP to Non-GAAP Reconciliation”. | |||||||
| --- | --- |
Condensed Consolidated Balance Sheets
(amounts in thousands, except share and per share amounts)
| October 3, 2020 | June 27, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|
| Assets | (Audited) | (Unaudited) | ||||||
| Current assets | ||||||||
| Cash and cash equivalents | 309,077 | $ | 157,072 | $ | 148,901 | |||
| Accounts and other receivables, net | 47,848 | 31,481 | 35,854 | |||||
| Inventories | 224,526 | 148,966 | 181,108 | |||||
| Prepaid expenses and other current assets | 28,615 | 34,614 | 24,539 | |||||
| Total current assets | 610,066 | 372,133 | 390,402 | |||||
| Property and equipment, net | 66,363 | 66,391 | 69,254 | |||||
| Operating lease right-of-use assets | 169,001 | 177,655 | 191,343 | |||||
| Goodwill and other intangibles, net | 127,740 | 121,186 | 121,711 | |||||
| Deferred tax assets | 6,386 | 6,583 | — | |||||
| Other assets | 18,238 | 2,490 | 1,193 | |||||
| Total assets | 997,794 | $ | 746,438 | $ | 773,903 | |||
| Liabilities and stockholders’ deficit | ||||||||
| Current liabilities | ||||||||
| Accounts payable | 155,525 | $ | 92,372 | $ | 133,090 | |||
| Accrued expenses | 117,888 | 101,167 | 112,628 | |||||
| Operating lease liabilities | 53,700 | 54,459 | 63,606 | |||||
| Income taxes payable | 18,906 | 1,857 | — | |||||
| Current portion of long-term debt | 8,100 | 8,341 | 8,341 | |||||
| Total current liabilities | 354,119 | 258,196 | 317,665 | |||||
| Deferred tax liabilities | — | — | 782 | |||||
| Operating lease liabilities, noncurrent | 118,941 | 130,234 | 142,307 | |||||
| Long-term debt, net | 787,731 | 1,179,550 | 1,182,780 | |||||
| Other long-term liabilities | 2,729 | 5,457 | 1 | |||||
| Total liabilities | 1,263,520 | 1,573,437 | 1,643,535 | |||||
| Commitments and contingencies | ||||||||
| Stockholders’ deficit | ||||||||
| Common stock, 0.001 par value, 1,000,000,000 shares authorized<br>and 189,284,566 issued and outstanding as of July 3, 2021 and<br>156,500,000 shares authorized, issued and outstanding as of<br>October 3, 2020 and June 27, 2020, respectively. | 189 | 157 | 157 | |||||
| Additional paid in capital (deficit) | 201,085 | (278,063 | ) | (278,056 | ) | |||
| Retained deficit | (467,000 | ) | (549,093 | ) | (591,733 | ) | ||
| Total stockholders’ deficit | (265,726 | ) | (826,999 | ) | (869,632 | ) | ||
| Total liabilities and stockholders’ deficit | 997,794 | $ | 746,438 | $ | 773,903 |
All values are in US Dollars.
Condensed Consolidated Statements of Cash Flows
(amounts in thousands)
(unaudited)
| Nine Months Ended | ||||||
|---|---|---|---|---|---|---|
| July 3, 2021 | June 27, 2020 | |||||
| Operating Activities | ||||||
| Net income | $ | 82,093 | $ | 15,921 | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
| Depreciation and amortization | 19,205 | 20,462 | ||||
| Equity-based compensation | 20,591 | 1,792 | ||||
| Amortization of deferred financing costs and debt discounts | 1,551 | 2,548 | ||||
| Provision for doubtful accounts | 134 | 368 | ||||
| Deferred income taxes | 197 | (457 | ) | |||
| (Gain) loss on disposition of assets | (1,668 | ) | 486 | |||
| Loss on debt extinguishment | 9,169 | — | ||||
| Changes in operating assets and liabilities: | ||||||
| Accounts and other receivables | (16,501 | ) | (16,194 | ) | ||
| Inventories | (74,401 | ) | (30,380 | ) | ||
| Prepaid expenses and other current assets | 6,289 | (2,993 | ) | |||
| Other assets | (15,696 | ) | 227 | |||
| Accounts payable and accrued expenses | 73,761 | 86,283 | ||||
| Income taxes payable | 17,049 | (6,713 | ) | |||
| Operating lease assets and liabilities, net | (3,397 | ) | 14,571 | |||
| Net cash provided by operating activities | 118,376 | 85,921 | ||||
| Investing Activities | ||||||
| Purchases of property and equipment | (17,799 | ) | (15,483 | ) | ||
| Acquisitions, net of cash acquired | (6,806 | ) | (6,188 | ) | ||
| Proceeds from disposition of fixed assets | 2,429 | 7 | ||||
| Net cash used in investing activities | (22,176 | ) | (21,664 | ) | ||
| Financing Activities | ||||||
| Borrowings on revolving commitment | — | 238,750 | ||||
| Payments on revolving commitment | — | (238,750 | ) | |||
| Repayment of long term debt | (394,110 | ) | (6,255 | ) | ||
| Issuance of long term debt | 907 | — | ||||
| Payment of deferred financing costs | (9,579 | ) | — | |||
| Proceeds from issuance of common stock upon initial public offering, net | 458,587 | — | ||||
| Net cash provided by (used in) financing activities | 55,805 | (6,255 | ) | |||
| Net increase in cash and cash equivalents | 152,005 | 58,002 | ||||
| Cash and cash equivalents, beginning of period | 157,072 | 90,899 | ||||
| Cash and cash equivalents, end of period | $ | 309,077 | $ | 148,901 | ||
| Supplemental Disclosure of Cash Payments for: | ||||||
| Interest | $ | 29,549 | $ | 68,599 | ||
| Income taxes | $ | 4,503 | $ | 2,832 |
GAAP to Non-GAAP Reconciliation
(amounts in thousands except per share amounts)
(unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| July 3, 2021 | June 27, 2020 | July 3, 2021 | June 27, 2020 | |||||||||
| Net income | $ | 118,802 | $ | 71,934 | $ | 82,093 | $ | 15,921 | ||||
| Interest expense | 7,399 | 19,472 | 27,041 | 64,597 | ||||||||
| Income tax expense | 39,372 | 19,613 | 21,749 | (4,602 | ) | |||||||
| Depreciation and amortization expenses^(a)^ | 6,347 | 6,374 | 19,205 | 20,462 | ||||||||
| Loss (gain) on disposition of fixed assets^(b)^ | 85 | 16 | (1,668 | ) | 486 | |||||||
| Management fee^(c)^ | — | 1,209 | 382 | 3,148 | ||||||||
| Equity-based compensation expense^(d)^ | 6,480 | 597 | 20,591 | 1,792 | ||||||||
| Mark-to-market on interest rate cap^(e)^ | — | — | — | 22 | ||||||||
| Loss on debt extinguishment^(f)^ | — | — | 9,169 | — | ||||||||
| Costs related to equity offerings^(g)^ | 778 | — | 9,986 | — | ||||||||
| Other^(h)^ | 83 | 585 | 83 | 888 | ||||||||
| Adjusted EBITDA | $ | 179,346 | $ | 119,800 | $ | 188,631 | $ | 102,714 | ||||
| Three Months Ended | Nine Months Ended | |||||||||||
| July 3, 2021 | June 27, 2020 | July 3, 2021 | June 27, 2020 | |||||||||
| Net income | $ | 118,802 | $ | 71,934 | $ | 82,093 | $ | 15,921 | ||||
| Loss (gain) on disposition of fixed assets^(b)^ | 85 | 16 | (1,668 | ) | 486 | |||||||
| Management fee^(c)^ | — | 1,209 | 382 | 3,148 | ||||||||
| Equity-based compensation expense^(d)^ | 6,480 | 597 | 20,591 | 1,792 | ||||||||
| Mark-to-market on interest rate cap^(e)^ | — | — | — | 22 | ||||||||
| Loss on debt extinguishment^(f)^ | — | — | 9,169 | — | ||||||||
| Costs related to equity offerings^(g)^ | 778 | — | 9,986 | — | ||||||||
| Other^(h)^ | 83 | 585 | 83 | 888 | ||||||||
| Tax effects of these adjustments^(i)^ | (1,864 | ) | (604 | ) | (9,672 | ) | (1,590 | ) | ||||
| Adjusted net income | $ | 124,364 | $ | 73,737 | $ | 110,964 | $ | 20,667 | ||||
| Three Months Ended | Nine Months Ended | |||||||||||
| July 3, 2021 | June 27, 2020 | July 3, 2021 | June 27, 2020 | |||||||||
| Adjusted net income per share - basic | $ | 0.66 | $ | 0.47 | $ | 0.60 | $ | 0.13 | ||||
| Adjusted net income per share - diluted | $ | 0.64 | $ | 0.47 | $ | 0.59 | $ | 0.13 | ||||
| Weighted average shares outstanding | ||||||||||||
| Basic | 188,264 | 156,500 | 184,021 | 156,500 | ||||||||
| Diluted | 194,200 | 156,500 | 189,603 | 156,500 | ||||||||
| (a) | Includes depreciation related to our distribution centers and stores, which is included in cost of merchandise and services sold in our condensed consolidated statements of income. | |||||||||||
| --- | --- | |||||||||||
| (b) | Consists of loss (gain) on disposition of assets associated with store closures or the sale of property and equipment. | |||||||||||
| --- | --- | |||||||||||
| (c) | Represents amounts paid or accrued in connection with our management services agreement which was terminated upon the completion of our initial public offering in November 2020. | |||||||||||
| --- | --- | |||||||||||
| (d) | Represents non-cash charges related to equity-based compensation included in selling, general and administrative expenses in our condensed consolidated statements of income. | |||||||||||
| --- | --- | |||||||||||
| (e) | Includes non-cash charges related to the change in fair value of our interest rate cap agreements, which expired in March 2021. | |||||||||||
| --- | --- | |||||||||||
| (f) | Represents non-cash expense due to the write-off of deferred financing costs related to our Term Loan modification and the repayment of our Senior Unsecured Notes during the nine months ended July 3, 2021. | |||||||||||
| --- | --- | |||||||||||
| (g) | Includes one-time payments of contractual amounts incurred in connection with our IPO that was completed in November 2020, which are reported in selling, general and administrative expenses, and costs incurred for follow-on equity offerings in February and June 2021, which are reported in other expenses, net in our condensed consolidated statements of income. | |||||||||||
| --- | --- | |||||||||||
| (h) | Other non-recurring, non-cash or discrete items as determined by management, such as transaction related costs, personnel-related costs, legal expenses, strategic project costs, and miscellaneous costs. | |||||||||||
| --- | --- | |||||||||||
| (i) | Represents the tax effect of the total adjustments based on our actual statutory tax rate for fiscal 2020 and our estimated statutory tax rate for fiscal 2021. | |||||||||||
| --- | --- |
9