Leslie's, Inc. (“Leslie's”, “we”, “our” or “its”; 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 2022.
Mike Egeck, Chief Executive Officer, commented, “We delivered
another quarter of record top and bottom line results, despite the
adverse impacts of execution issues at our Northeastern
distribution center, and to a lesser extent, product margin
decreases associated with supply chain challenges and industry
promotions. While we have addressed our distribution center issues
and operations are now shipping to plan, we have revised our annual
outlook to reflect our third quarter performance, as well as
expectations for elevated distribution costs and product margin
impacts for the remainder of the year. We remain focused on making
progress against each of our strategic growth priorities, which
continue to fuel our market share gains and better position us to
grow profitably amid varying macro conditions.”
For the Thirteen-Weeks Ended July 2, 2022
Highlights
- Sales increased $77.1 million, or 12.9%, to $673.6 million
compared to $596.5 million in the prior year period. In the current
year period comparable sales increased 7.4%. Comparable sales
increased 19.4% in the prior year period, on a shifted basis, which
uses a realigned period in 2020 for comparability given the 53rd
week in Fiscal 2020.
- Gross profit increased $19.9 million, or 7.0%, to $303.6
million compared to $283.7 million in the prior year period and
gross margin was 45.1% compared to 47.6% in the prior year period.
The decrease in gross margin rate was primarily due to shifts in
business mix, decreased product margin and higher distribution
expenses, partially offset by occupancy leverage.
- Selling, general and administrative expenses (“SG&A”)
increased $14.2 million, or 12.1%, to $131.5 million compared to
$117.3 million in the prior year period, primarily driven by the
sales increase, additional planned marketing spend, inflationary
costs primarily associated with payroll and marketing spend, and
expenses associated with acquisitions completed after the end of
the third quarter of Fiscal 2021.
- Operating income was $172.1 million compared to $166.4 million
in the prior year period.
- Net income was $123.0 million compared to $118.8 million in the
prior year period.
- Adjusted net income was $125.7 million compared to $124.4
million in the prior year period.
- Diluted earnings per share of $0.67 compared to $0.61 in the
prior year period. Adjusted diluted earnings per share of $0.68
compared to $0.64 in the prior year period.
- Adjusted EBITDA was $182.9 million compared to $179.3 million
in the prior year period.
For the Thirty-Nine Weeks Ended July 2, 2022
Highlights
- Sales increased $152.5 million, or 16.3%, to $1,086.5 million
compared to $934.0 million in the prior year period. In the current
year period comparable sales increased 10.7%. Comparable sales
increased 23.4% in the prior year period, on a shifted basis, which
uses a realigned period in 2020 for comparability given the 53rd
week in Fiscal 2020.
- Gross profit increased $49.5 million, or 12.1%, to $456.6
million compared to $407.1 million in the prior year period and
gross margin was 42.0% compared to 43.6% in the prior year
period.
- SG&A increased $35.8 million, or 13.5%, to $300.9 million
compared to $265.1 million in the prior year period, primarily
driven by the sales increase, additional planned marketing spend,
inflationary impacts primarily associated with payroll and
marketing costs, investments to support our growth, and expenses
associated with acquisitions completed after the end of the third
quarter of Fiscal 2021. We also incurred lower non-cash
equity-based compensation costs of $12.0 million and did not incur
certain one-time payments of contractual amounts of $8.2 million,
as compared to the prior year period. The elevated costs in Fiscal
2021 were primarily incurred in connection with our initial public
offering (“IPO”).
- Operating income increased $13.7 million to $155.7 million
compared to $142.0 million in the prior year period.
- Net income increased $19.0 million to $101.1 million compared
to $82.1 million in the prior year period.
- Adjusted net income was $112.0 million compared to $111.0
million in the prior year period.
- Diluted earnings per share of $0.54 compared to $0.43 in the
prior year period. Adjusted diluted earnings per share of $0.60
compared to $0.59 in the prior year period.
- Adjusted EBITDA increased $4.1 million to $192.7 million
compared to $188.6 million in the prior year period.
Balance Sheet and Cash Flow Highlights
- Cash and cash equivalents totaled $193.1 million as of July 2,
2022 compared to $307.4 million as of July 3, 2021, a decrease of
$114.3 million.
- Inventories totaled $361.4 million as of July 2, 2022, compared
to $224.5 million as of July 3, 2021, an increase of $136.9
million, or 61.0%, reflecting a continued investment to meet
elevated consumer demand and to mitigate the impact of supply chain
uncertainty. Inventories also include amounts associated with
acquisitions completed since Fiscal 2021.
- Funded debt totaled $800.0 million as of July 2, 2022, compared
to $808.0 million as of July 3, 2021. There were no borrowings on
the revolver as of July 2, 2022.
- Net cash provided by operating activities totaled $72.7 million
during the first nine months of Fiscal 2022 compared to $118.0
million during the first nine months of Fiscal 2021.
- Capital expenditures totaled $25.9 million during the first
nine months of Fiscal 2022 compared to $17.8 million during the
first nine months of Fiscal 2021.
- Net cash used for acquisition of businesses totaled $40.7
million during the first nine months of Fiscal 2022 compared to
$6.8 million during the first nine months of Fiscal 2021.
- We repurchased 7.5 million shares of common stock totaling
$151.9 million, excluding offering costs, during the first nine
months of Fiscal 2022. As of July 2, 2022, $148.1 million remained
available under our existing share repurchase authorization.
Fiscal 2022 Outlook
The Company revised its outlook for the full year of Fiscal
2022:
|
Current Outlook |
|
Prior Outlook |
Sales |
$1,550 to $1,570 million |
|
$1,575 to $1,610 million |
Gross profit |
$655 to $670 million |
|
$700 to $715 million |
Net income |
$150 to $160 million |
|
$178 to $190 million |
Adjusted net income |
$168 to $178 million |
|
$193 to $205 million |
Adjusted EBITDA |
$287 to $297 million |
|
$315 to $330 million |
Adjusted diluted earnings per
share |
$0.90 to $0.96 |
|
$1.02 to $1.10 |
Diluted weighted average shares
outstanding |
185 to 187 million |
|
187 to 189 million |
Conference Call Details
A conference call to discuss the Company’s financial results for
the third quarter of Fiscal 2022 is scheduled for today, Friday,
August 5, 2022, at 9:00 a.m. Eastern Time. Investors and analysts
interested in participating in the call are invited to dial
877-407-0784 (international callers please dial 1-201-689-8560)
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, along with the associated slides, online at
https://ir.lesliespool.com/ for 90 days.
About Leslie's
Founded in 1963, Leslie’s is the largest and most trusted
direct-to-consumer brand in the U.S. pool and spa care industry.
The Company serves the aftermarket needs of residential and
professional consumers with an extensive and largely exclusive
assortment of essential pool and spa care products. The Company
operates an integrated ecosystem of over 975 physical locations,
and a robust digital platform, enabling consumers to engage with
Leslie’s whenever, wherever, and however they prefer to shop. Its
dedicated team of associates, pool and spa care experts, and
experienced service technicians are passionate about empowering
Leslie’s 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”), we use certain non-GAAP financial measures and other
operating measures, including comparable sales growth and Adjusted
EBITDA, Adjusted net income (loss), and Adjusted earnings per
share, to evaluate the effectiveness of our business strategies, to
make budgeting decisions, and to compare our 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 our 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 defined as earnings before interest
(including amortization of debt issuance costs), taxes,
depreciation and amortization, management fees, equity-based
compensation expense, loss on debt extinguishment, costs related to
equity offerings, strategic project costs, executive transition
costs, loss (gain) on disposition of assets, mark-to-market on
interest rate cap, 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 entitled
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 Earnings per Share
Adjusted net income (loss) and Adjusted 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 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 on debt extinguishment, costs related to equity
offerings, strategic project costs, executive transition costs,
loss (gain) on disposition of assets, mark-to-market on interest
rate cap, 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.
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 fact 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 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 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;
- our ability to attract and retain
senior management and other qualified personnel;
- 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
incidents and other security threats or disruptions; and
- other risks and uncertainties,
including those listed in the section titled “Risk Factors” in our
filings with the United States 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 and our filings with the Securities
and Exchange Commission. 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 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 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.
ContactInvestorsFarah Soi/Caitlin
ChurchillICRinvestorrelations@lesl.com
Condensed Consolidated Statements of
Operations(amounts in thousands, except per share
amounts)(unaudited)
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
Sales |
$ |
673,633 |
|
|
$ |
596,543 |
|
|
$ |
1,086,529 |
|
|
$ |
933,991 |
|
Cost of merchandise and services
sold |
|
370,026 |
|
|
|
312,845 |
|
|
|
629,977 |
|
|
|
526,895 |
|
Gross profit |
|
303,607 |
|
|
|
283,698 |
|
|
|
456,552 |
|
|
|
407,096 |
|
Selling, general and
administrative expenses |
|
131,469 |
|
|
|
117,264 |
|
|
|
300,872 |
|
|
|
265,127 |
|
Operating income |
|
172,138 |
|
|
|
166,434 |
|
|
|
155,680 |
|
|
|
141,969 |
|
Other expense: |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
6,847 |
|
|
|
7,399 |
|
|
|
20,659 |
|
|
|
27,041 |
|
Loss on debt extinguishment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9,169 |
|
Other (income) expenses, net |
|
(143 |
) |
|
|
861 |
|
|
|
407 |
|
|
|
1,917 |
|
Total other expense |
|
6,704 |
|
|
|
8,260 |
|
|
|
21,066 |
|
|
|
38,127 |
|
Income before taxes |
|
165,434 |
|
|
|
158,174 |
|
|
|
134,614 |
|
|
|
103,842 |
|
Income tax expense |
|
42,448 |
|
|
|
39,372 |
|
|
|
33,519 |
|
|
|
21,749 |
|
Net income |
$ |
122,986 |
|
|
$ |
118,802 |
|
|
$ |
101,095 |
|
|
$ |
82,093 |
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.67 |
|
|
$ |
0.63 |
|
|
$ |
0.55 |
|
|
$ |
0.45 |
|
Diluted |
$ |
0.67 |
|
|
$ |
0.61 |
|
|
$ |
0.54 |
|
|
$ |
0.43 |
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
182,937 |
|
|
|
188,264 |
|
|
|
184,707 |
|
|
|
184,021 |
|
Diluted |
|
184,721 |
|
|
|
194,200 |
|
|
|
186,695 |
|
|
|
189,603 |
|
Other Financial Data
(1)(amounts in thousands, except per share
amounts)(unaudited)
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
Adjusted EBITDA |
$ |
182,942 |
|
|
$ |
179,346 |
|
|
$ |
192,734 |
|
|
$ |
188,631 |
|
Adjusted net income |
$ |
125,685 |
|
|
$ |
124,364 |
|
|
$ |
112,031 |
|
|
$ |
110,964 |
|
Adjusted diluted earnings per
share |
$ |
0.68 |
|
|
$ |
0.64 |
|
|
$ |
0.60 |
|
|
$ |
0.59 |
|
(1) See section titled “GAAP to Non-GAAP Reconciliation”.
Condensed Consolidated Balance
Sheets (amounts in thousands, except share and per
share amounts)
|
July 2, 2022 |
|
|
October 2, 2021 |
|
|
July 3, 2021 |
|
Assets |
(Unaudited) |
|
|
(Audited) |
|
|
(Unaudited) |
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
193,130 |
|
|
$ |
343,498 |
|
|
$ |
307,395 |
|
Accounts and other receivables, net |
|
47,266 |
|
|
|
38,860 |
|
|
|
47,848 |
|
Inventories |
|
361,391 |
|
|
|
198,789 |
|
|
|
224,526 |
|
Prepaid expenses and other current assets |
|
30,542 |
|
|
|
20,564 |
|
|
|
28,615 |
|
Total current assets |
|
632,329 |
|
|
|
601,711 |
|
|
|
608,384 |
|
Property and equipment, net |
|
71,653 |
|
|
|
70,335 |
|
|
|
66,363 |
|
Operating lease right-of-use
assets |
|
221,694 |
|
|
|
212,284 |
|
|
|
169,001 |
|
Goodwill and other intangibles,
net |
|
155,663 |
|
|
|
129,020 |
|
|
|
127,740 |
|
Deferred tax assets |
|
1,230 |
|
|
|
3,734 |
|
|
|
6,386 |
|
Other assets |
|
34,422 |
|
|
|
25,148 |
|
|
|
18,238 |
|
Total assets |
$ |
1,116,991 |
|
|
$ |
1,042,232 |
|
|
$ |
996,112 |
|
Liabilities and
stockholders’ deficit |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
$ |
330,881 |
|
|
$ |
233,597 |
|
|
$ |
271,731 |
|
Operating lease liabilities |
|
63,303 |
|
|
|
61,071 |
|
|
|
53,700 |
|
Income taxes payable |
|
30,611 |
|
|
|
6,945 |
|
|
|
18,906 |
|
Current portion of long-term debt |
|
8,100 |
|
|
|
8,100 |
|
|
|
8,100 |
|
Total current liabilities |
|
432,895 |
|
|
|
309,713 |
|
|
|
352,437 |
|
Operating lease liabilities,
noncurrent |
|
161,473 |
|
|
|
160,037 |
|
|
|
118,941 |
|
Long-term debt, net |
|
781,322 |
|
|
|
786,125 |
|
|
|
787,731 |
|
Other long-term liabilities |
|
70 |
|
|
|
3,915 |
|
|
|
2,729 |
|
Total liabilities |
|
1,375,760 |
|
|
|
1,259,790 |
|
|
|
1,261,838 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
Stockholders’ deficit |
|
|
|
|
|
|
|
|
Common stock, $0.001 par value,
1,000,000,000 shares authorized and 183,027,684, 189,821,011, and
189,284,566 issued and outstanding as of July 2, 2022, October 2,
2021, and July 3, 2021, respectively. |
|
183 |
|
|
|
190 |
|
|
|
189 |
|
Additional paid in capital |
|
87,050 |
|
|
|
204,711 |
|
|
|
201,085 |
|
Retained deficit |
|
(346,002 |
) |
|
|
(422,459 |
) |
|
|
(467,000 |
) |
Total stockholders’ deficit |
|
(258,769 |
) |
|
|
(217,558 |
) |
|
|
(265,726 |
) |
Total liabilities and
stockholders’ deficit |
$ |
1,116,991 |
|
|
$ |
1,042,232 |
|
|
$ |
996,112 |
|
Condensed Consolidated Statements of Cash
Flows (amounts in
thousands)(unaudited)
|
Nine Months Ended |
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
Operating
Activities |
|
|
|
|
|
Net income |
$ |
101,095 |
|
|
$ |
82,093 |
|
Adjustments to reconcile net income to net cash provided by (used
in) operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
22,880 |
|
|
|
19,205 |
|
Equity-based compensation |
|
8,462 |
|
|
|
20,591 |
|
Amortization of deferred financing costs and debt discounts |
|
1,483 |
|
|
|
1,551 |
|
Provision for doubtful accounts |
|
723 |
|
|
|
134 |
|
Deferred income taxes |
|
2,504 |
|
|
|
197 |
|
Loss (gain) on disposition of assets |
|
271 |
|
|
|
(1,668 |
) |
Loss on debt extinguishment |
|
— |
|
|
|
9,169 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts and other receivables |
|
(9,129 |
) |
|
|
(16,501 |
) |
Inventories |
|
(146,196 |
) |
|
|
(74,401 |
) |
Prepaid expenses and other current assets |
|
(9,075 |
) |
|
|
6,289 |
|
Other assets |
|
(9,429 |
) |
|
|
(15,696 |
) |
Accounts payable and accrued expenses |
|
91,145 |
|
|
|
73,350 |
|
Income taxes payable |
|
23,666 |
|
|
|
17,049 |
|
Operating lease assets and liabilities, net |
|
(5,742 |
) |
|
|
(3,397 |
) |
Net cash provided by operating
activities |
|
72,658 |
|
|
|
117,965 |
|
Investing
Activities |
|
|
|
|
|
Purchases of property and equipment |
|
(25,927 |
) |
|
|
(17,799 |
) |
Business acquisitions, net of cash acquired |
|
(40,670 |
) |
|
|
(6,806 |
) |
Proceeds from disposition of fixed assets |
|
414 |
|
|
|
2,429 |
|
Net cash used in investing
activities |
|
(66,183 |
) |
|
|
(22,176 |
) |
Financing
Activities |
|
|
|
|
|
Borrowings on revolving credit facility |
|
45,000 |
|
|
|
— |
|
Payments on revolving credit facility |
|
(45,000 |
) |
|
|
— |
|
Repayment of long-term debt |
|
(6,075 |
) |
|
|
(394,110 |
) |
Issuance of long-term debt |
|
— |
|
|
|
907 |
|
Payment of deferred financing costs |
|
— |
|
|
|
(9,579 |
) |
Proceeds from options exercised |
|
1,378 |
|
|
|
— |
|
Repurchase and retirement of common stock |
|
(152,146 |
) |
|
|
— |
|
Proceeds from issuance of common stock upon initial public
offering, net |
|
— |
|
|
|
458,587 |
|
Net cash (used in) provided by
financing activities |
|
(156,843 |
) |
|
|
55,805 |
|
Net (decrease) increase in cash
and cash equivalents |
|
(150,368 |
) |
|
|
151,594 |
|
Cash and cash equivalents,
beginning of period |
|
343,498 |
|
|
|
155,801 |
|
Cash and cash equivalents, end of
period |
$ |
193,130 |
|
|
$ |
307,395 |
|
Supplemental
Information: |
|
|
|
|
|
Interest |
$ |
19,409 |
|
|
$ |
29,549 |
|
Income taxes, net of refunds received |
|
7,442 |
|
|
|
4,503 |
|
GAAP to Non-GAAP
Reconciliation(amounts in thousands except per
share amounts)(unaudited)
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
Net income |
$ |
122,986 |
|
|
$ |
118,802 |
|
|
$ |
101,095 |
|
|
$ |
82,093 |
|
Interest expense |
|
6,847 |
|
|
|
7,399 |
|
|
|
20,659 |
|
|
|
27,041 |
|
Income tax expense |
|
42,448 |
|
|
|
39,372 |
|
|
|
33,519 |
|
|
|
21,749 |
|
Depreciation and amortization
expense(1) |
|
7,063 |
|
|
|
6,347 |
|
|
|
22,880 |
|
|
|
19,205 |
|
Management fees(2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
382 |
|
Equity-based compensation
expense(3) |
|
3,113 |
|
|
|
6,480 |
|
|
|
8,825 |
|
|
|
20,591 |
|
Loss on debt
extinguishment(4) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9,169 |
|
Costs related to equity
offerings(5) |
|
— |
|
|
|
778 |
|
|
|
550 |
|
|
|
9,986 |
|
Strategic project costs(6) |
|
641 |
|
|
|
— |
|
|
|
4,428 |
|
|
|
— |
|
Executive transition costs and
other(7) |
|
(156 |
) |
|
|
168 |
|
|
|
778 |
|
|
|
(1,585 |
) |
Adjusted EBITDA |
$ |
182,942 |
|
|
$ |
179,346 |
|
|
$ |
192,734 |
|
|
$ |
188,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
|
July 2, 2022 |
|
|
July 3, 2021 |
|
Net income |
$ |
122,986 |
|
|
$ |
118,802 |
|
|
$ |
101,095 |
|
|
$ |
82,093 |
|
Management fees(2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
382 |
|
Equity-based compensation
expense(3) |
|
3,113 |
|
|
|
6,480 |
|
|
|
8,825 |
|
|
|
20,591 |
|
Loss on debt
extinguishment(4) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9,169 |
|
Costs related to equity
offerings(5) |
|
— |
|
|
|
778 |
|
|
|
550 |
|
|
|
9,986 |
|
Strategic project costs(6) |
|
641 |
|
|
|
— |
|
|
|
4,428 |
|
|
|
— |
|
Executive transition costs and
other(7) |
|
(156 |
) |
|
|
168 |
|
|
|
778 |
|
|
|
(1,585 |
) |
Tax effects of these
adjustments(8) |
|
(899 |
) |
|
|
(1,864 |
) |
|
|
(3,645 |
) |
|
|
(9,672 |
) |
Adjusted net income |
$ |
125,685 |
|
|
$ |
124,364 |
|
|
$ |
112,031 |
|
|
$ |
110,964 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
$ |
0.67 |
|
|
$ |
0.61 |
|
|
$ |
0.54 |
|
|
$ |
0.43 |
|
Adjusted diluted earnings per
share |
$ |
0.68 |
|
|
$ |
0.64 |
|
|
$ |
0.60 |
|
|
$ |
0.59 |
|
Weighted average shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
182,937 |
|
|
|
188,264 |
|
|
|
184,707 |
|
|
|
184,021 |
|
Diluted |
|
184,721 |
|
|
|
194,200 |
|
|
|
186,695 |
|
|
|
189,603 |
|
(1) Includes depreciation related to our
distribution centers and locations, which is reported in cost of
merchandise and services sold in our condensed consolidated
statements of operations.(2) Represents amounts paid or accrued in
connection with our management services agreement, which was
terminated upon the completion of our IPO in November 2020 and are
reported in SG&A in our condensed consolidated statements of
operations.(3) Represents charges related to equity-based
compensation and the related Company payroll tax expense which are
reported in SG&A in our condensed consolidated statements of
operations.(4) Represents non-cash expense due to the write-off of
deferred financing costs related to the term loan modification and
the repayment of our senior unsecured notes during the nine months
ended July 3, 2021 which are reported in loss on debt
extinguishment in our condensed consolidated statements of
operations.(5) Includes one-time payments of contractual amounts
incurred in connection with our IPO that was completed in November
2020 which are reported in SG&A, and costs incurred for
follow-on equity offerings which are reported in other (income)
expenses, net in our condensed consolidated statements of
operations.(6) Represents non-recurring costs, such as third-party
consulting costs that are not part of our ongoing operations and
are incurred to execute differentiated, strategic projects, and are
reported in SG&A in our condensed consolidated statements of
operations. (7) Includes executive transition costs, losses (gains)
on disposition of fixed assets, and other non-recurring, non-cash
or discrete items as determined by management. Amounts are reported
in SG&A and other (income) expenses, net in our condensed
consolidated statements of operations. (8) Represents the tax
effect of the total adjustments based on our actual statutory tax
rate. Amounts are reported in income tax expense in our condensed
consolidated statements of operations.
Note: A reconciliation of non-GAAP guidance
measures to corresponding GAAP measures is not available on a
forward-looking basis without unreasonable effort due to the
uncertainty of expenses that may be incurred in the future,
although it is important to note that these factors could be
material to our results computed in accordance with GAAP.
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