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 2023.
Mike Egeck, Chief Executive Officer, commented, “Our third
quarter results fell below our expectations as a result of a highly
unusual pool season for Leslie’s and the industry. Unfavorable
weather, increased consumer price sensitivity and pool owners with
an elevated level of chemicals left over from last year contributed
to double-digit traffic declines and a 9% sales decline in the
quarter. In addition, we absorbed elevated distribution costs and
increased product costs which impacted our margins for the
quarter.”
Mr. Egeck continued, “As our team is taking the necessary
actions to work our way through these headwinds, we also continue
to execute towards the long-term market opportunity. The
aftermarket pool and spa care industry has proven over time to be
one of the most durable and advantaged consumer products
categories, and Leslie’s has a long track record of profitable
growth in the industry. We remain focused on the execution of our
strategic initiatives to drive long-term market share gains and
shareholder returns.”
Three Months Ended July 1, 2023 Highlights
- Sales decreased $62.7 million, or 9.3%, to $610.9 million
compared to $673.6 million in the prior year period. Comparable
sales decreased 11.8% compared to the prior year period driven by
double-digit traffic declines. Non-comparable sales including
acquisitions and new stores were $16.1 million in the period.
- Gross profit decreased $52.0 million, or 17.1%, to $251.6
million compared to $303.6 million in the prior year period and
gross margin was 41.2% compared to 45.1% in the prior year period.
The decrease in gross margin was primarily driven by product margin
rate declines associated with increased product costs that could
not be passed through to the consumer, elevated distribution
expenses and occupancy deleverage.
- Selling, general and administrative expenses (“SG&A”)
increased $4.3 million to $135.8 million compared to $131.5 million
in the prior year period, driven by non-comparable SG&A related
to acquisitions and new stores and investments in our associates,
partially offset by expense reduction actions.
- Operating income was $115.8 million compared to $172.1 million
in the prior year period.
- Interest expense increased $10.9 million to $17.7 million
compared to $6.8 million in the prior year period as a result of
higher effective interest rates and increased borrowings on our
revolving credit facility.
- Net income was $72.5 million compared to $123.0 million in the
prior year period.
- Adjusted net income was $76.4 million compared to $125.7
million in the prior year period.
- Diluted earnings per share was $0.39 compared to $0.67 in the
prior year period. Adjusted diluted earnings per share was $0.41
compared to $0.68 in the prior year period.
- Adjusted EBITDA was $129.0 million compared to $182.9 million
in the prior year period.
Nine Months Ended July 1, 2023 Highlights
- Sales decreased $67.7 million, or 6.2%, to $1,018.8 million
compared to $1,086.5 million in the prior year period. Comparable
sales decreased 10.9% compared to the prior year period.
Non-comparable sales including acquisitions and new stores were
$50.3 million in the period.
- Gross profit decreased $68.5 million, or 15.0%, to $388.1
million compared to $456.6 million in the prior year period and
gross margin was 38.1% compared to 42.0% in the prior year
period.
- SG&A increased $23.5 million to $324.4 million compared to
$300.9 million in the prior year period.
- Operating income was $63.6 million compared to $155.7 million
in the prior year period.
- Interest expense increased $27.6 million to $48.3 million
compared to $20.7 million in the prior year period.
- Net income was $10.8 million compared to $101.1 million in the
prior year period.
- Adjusted net income was $25.4 million compared to $112.0
million in the prior year period.
- Diluted earnings per share was $0.06 compared to $0.54 in the
prior year period. Adjusted diluted earnings per share was $0.14
compared to $0.60 in the prior year period.
- Adjusted EBITDA was $108.7 million compared to $192.7 million
in the prior year period.
Balance Sheet and Cash Flow Highlights
- Cash and cash equivalents totaled $19.4 million as of July 1,
2023 compared to $193.1 million as of July 2, 2022, a decrease of
$173.7 million primarily due to investments in inventory and
business acquisitions over the last twelve months.
- Inventories totaled $436.6 million as of July 1, 2023 compared
to $361.4 million as of July 2, 2022, an increase of $75.2 million
primarily related to chemical products.
- Funded debt totaled $822.8 million as of July 1, 2023 compared
to $799.9 million as of July 2, 2022. As of July 1, 2023, we had
borrowings of $31.0 million and availability of $207.6 million on
our revolving credit facility.
- The rate on our term loan during the third quarter of Fiscal
2023 was LIBOR plus the applicable rate, resulting in an effective
interest rate of 7.61% compared to an effective interest rate of
3.02% during the third quarter of Fiscal 2022.
- Net cash used in operating activities totaled $74.8 million in
the first nine months of Fiscal 2023 compared to net cash provided
by operating activities of $72.7 million in the prior year
period.
- Capital expenditures totaled $26.7 million in the first nine
months of Fiscal 2023 compared to $25.9 million in the prior year
period.
- Net cash used for business acquisitions totaled $15.5 million
in the first nine months of Fiscal 2023 compared to $40.7 million
in the prior year period.
- As of July 1, 2023, approximately $147.7 million remained
available for future share repurchases under the Company’s existing
share repurchase program.
Fiscal 2023 Outlook
The Company continues to expect the following for the full year
of Fiscal 2023 consistent with the Company’s update on July 13,
2023:
Sales |
|
$1,430 to $1,450 million |
Gross profit |
|
$549 to $559 million |
Net income |
|
$33 to $40 million |
Adjusted net income |
|
$52 to $59 million |
Adjusted EBITDA |
|
$170 to $180 million |
Adjusted diluted earnings per
share |
|
$0.28 to $0.32 |
Diluted weighted average
shares outstanding |
|
185 million |
Conference Call Details
A conference call to discuss the Company’s financial results for
the third quarter of Fiscal 2023 is scheduled for today, Wednesday,
August 2, 2023 at 4:30 p.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 1,000 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, severance, losses (gains) on asset dispositions, 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 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,
severance, losses (gains) on asset dispositions, 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.
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.
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 (including rising interest rates, recession fears, and
inflationary pressures), geopolitical events or conflicts, and the
housing market;
- disruptions in the operations of our
distribution centers;
- 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 epidemics,
pandemics, or natural disasters;
- impacts on our business from cyber
incidents and other security threats or disruptions;
- our ability to remediate the material
weakness in our internal control over financial reporting or
additional material weaknesses or other deficiencies in the future
or to maintain effective disclosure controls and procedures and
internal control over financial reporting; 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
(“SEC”).
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 in our 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 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 1, 2023 |
|
|
July 2, 2022 |
|
|
July 1, 2023 |
|
|
July 2, 2022 |
|
Sales |
$ |
610,891 |
|
|
$ |
673,633 |
|
|
$ |
1,018,839 |
|
|
$ |
1,086,529 |
|
Cost of merchandise and
services sold |
|
359,295 |
|
|
|
370,026 |
|
|
|
630,777 |
|
|
|
629,977 |
|
Gross profit |
|
251,596 |
|
|
|
303,607 |
|
|
|
388,062 |
|
|
|
456,552 |
|
Selling, general and
administrative expenses |
|
135,789 |
|
|
|
131,469 |
|
|
|
324,427 |
|
|
|
300,872 |
|
Operating income |
|
115,807 |
|
|
|
172,138 |
|
|
|
63,635 |
|
|
|
155,680 |
|
Other expense: |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
17,675 |
|
|
|
6,847 |
|
|
|
48,282 |
|
|
|
20,659 |
|
Other (income) expenses, net |
|
— |
|
|
|
(143 |
) |
|
|
— |
|
|
|
407 |
|
Total other expense |
|
17,675 |
|
|
|
6,704 |
|
|
|
48,282 |
|
|
|
21,066 |
|
Income before taxes |
|
98,132 |
|
|
|
165,434 |
|
|
|
15,353 |
|
|
|
134,614 |
|
Income tax expense |
|
25,585 |
|
|
|
42,448 |
|
|
|
4,592 |
|
|
|
33,519 |
|
Net income |
$ |
72,547 |
|
|
$ |
122,986 |
|
|
$ |
10,761 |
|
|
$ |
101,095 |
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.39 |
|
|
$ |
0.67 |
|
|
$ |
0.06 |
|
|
$ |
0.55 |
|
Diluted |
$ |
0.39 |
|
|
$ |
0.67 |
|
|
$ |
0.06 |
|
|
$ |
0.54 |
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
183,932 |
|
|
|
182,937 |
|
|
|
183,725 |
|
|
|
184,707 |
|
Diluted |
|
184,760 |
|
|
|
184,721 |
|
|
|
184,752 |
|
|
|
186,695 |
|
|
Other Financial Data (1) |
(Amounts in thousands, except per share
amounts) |
(Unaudited) |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
July 1, 2023 |
|
|
July 2, 2022 |
|
|
July 1, 2023 |
|
|
July 2, 2022 |
|
Adjusted EBITDA |
$ |
129,038 |
|
|
$ |
182,942 |
|
|
$ |
108,683 |
|
|
$ |
192,734 |
|
Adjusted net income |
$ |
76,362 |
|
|
$ |
125,685 |
|
|
$ |
25,370 |
|
|
$ |
112,031 |
|
Adjusted diluted earnings per
share |
$ |
0.41 |
|
|
$ |
0.68 |
|
|
$ |
0.14 |
|
|
$ |
0.60 |
|
|
(1) |
See section titled “GAAP to Non-GAAP Reconciliation.” |
|
Condensed Consolidated Balance Sheets |
(Amounts in thousands, except share and per share
amounts) |
|
|
July 1, 2023 |
|
|
October 1, 2022 |
|
|
July 2, 2022 |
|
Assets |
(Unaudited) |
|
|
(Audited) |
|
|
(Unaudited) |
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
19,430 |
|
|
$ |
112,293 |
|
|
$ |
193,130 |
|
Accounts and other receivables, net |
|
49,263 |
|
|
|
45,295 |
|
|
|
47,266 |
|
Inventories |
|
436,557 |
|
|
|
361,686 |
|
|
|
361,391 |
|
Prepaid expenses and other current assets |
|
31,454 |
|
|
|
23,104 |
|
|
|
30,542 |
|
Total current assets |
|
536,704 |
|
|
|
542,378 |
|
|
|
632,329 |
|
Property and equipment,
net |
|
85,396 |
|
|
|
78,087 |
|
|
|
71,653 |
|
Operating lease right-of-use
assets |
|
250,378 |
|
|
|
236,477 |
|
|
|
221,694 |
|
Goodwill and other
intangibles, net |
|
219,835 |
|
|
|
213,701 |
|
|
|
155,663 |
|
Deferred tax assets |
|
194 |
|
|
|
1,268 |
|
|
|
1,230 |
|
Other assets |
|
44,918 |
|
|
|
37,720 |
|
|
|
34,422 |
|
Total assets |
$ |
1,137,425 |
|
|
$ |
1,109,631 |
|
|
$ |
1,116,991 |
|
Liabilities and
stockholders’ deficit |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
$ |
242,510 |
|
|
$ |
266,972 |
|
|
$ |
330,881 |
|
Operating lease liabilities |
|
61,342 |
|
|
|
60,373 |
|
|
|
63,303 |
|
Income taxes payable |
|
3,345 |
|
|
|
12,511 |
|
|
|
30,611 |
|
Current portion of long-term debt |
|
8,100 |
|
|
|
8,100 |
|
|
|
8,100 |
|
Total current liabilities |
|
315,297 |
|
|
|
347,956 |
|
|
|
432,895 |
|
Operating lease liabilities,
noncurrent |
|
193,004 |
|
|
|
179,835 |
|
|
|
161,473 |
|
Revolving Credit Facility |
|
31,000 |
|
|
|
— |
|
|
|
— |
|
Long-term debt, net |
|
774,884 |
|
|
|
779,726 |
|
|
|
781,322 |
|
Other long-term
liabilities |
|
3,050 |
|
|
|
65 |
|
|
|
70 |
|
Total liabilities |
|
1,317,235 |
|
|
|
1,307,582 |
|
|
|
1,375,760 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
Stockholders’ deficit |
|
|
|
|
|
|
|
|
Common stock, $0.001 par
value, 1,000,000,000 shares authorized and 184,004,936,
183,480,545, and 183,027,684 issued and outstanding as of July 1,
2023, October 1, 2022, and July 2, 2022, respectively. |
|
184 |
|
|
|
183 |
|
|
|
183 |
|
Additional paid in
capital |
|
97,313 |
|
|
|
89,934 |
|
|
|
87,050 |
|
Retained deficit |
|
(277,307 |
) |
|
|
(288,068 |
) |
|
|
(346,002 |
) |
Total stockholders’
deficit |
|
(179,810 |
) |
|
|
(197,951 |
) |
|
|
(258,769 |
) |
Total liabilities and
stockholders’ deficit |
$ |
1,137,425 |
|
|
$ |
1,109,631 |
|
|
$ |
1,116,991 |
|
|
Condensed Consolidated Statements of Cash
Flows |
(Amounts in thousands) |
(Unaudited) |
|
|
Nine Months Ended |
|
|
July 1, 2023 |
|
|
July 2, 2022 |
|
Operating
Activities |
|
|
|
|
|
Net income |
$ |
10,761 |
|
|
$ |
101,095 |
|
Adjustments to reconcile net income to net cash (used in) provided
by operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
25,569 |
|
|
|
22,880 |
|
Equity-based compensation |
|
9,159 |
|
|
|
8,462 |
|
Amortization of deferred financing costs and debt discounts |
|
1,541 |
|
|
|
1,483 |
|
Provision for doubtful accounts |
|
25 |
|
|
|
723 |
|
Deferred income taxes |
|
1,074 |
|
|
|
2,504 |
|
Loss on asset dispositions |
|
103 |
|
|
|
271 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts and other receivables |
|
(3,399 |
) |
|
|
(9,129 |
) |
Inventories |
|
(70,393 |
) |
|
|
(146,196 |
) |
Prepaid expenses and other current assets |
|
(9,614 |
) |
|
|
(9,075 |
) |
Other assets |
|
(8,864 |
) |
|
|
(9,429 |
) |
Accounts payable and accrued expenses |
|
(21,846 |
) |
|
|
91,145 |
|
Income taxes payable |
|
(9,166 |
) |
|
|
23,666 |
|
Operating lease assets and liabilities, net |
|
237 |
|
|
|
(5,742 |
) |
Net cash (used in) provided by
operating activities |
|
(74,813 |
) |
|
|
72,658 |
|
Investing
Activities |
|
|
|
|
|
Purchases of property and equipment |
|
(26,733 |
) |
|
|
(25,927 |
) |
Business acquisitions, net of cash acquired |
|
(15,549 |
) |
|
|
(40,670 |
) |
Proceeds from asset dispositions |
|
1,384 |
|
|
|
414 |
|
Net cash used in investing
activities |
|
(40,898 |
) |
|
|
(66,183 |
) |
Financing
Activities |
|
|
|
|
|
Borrowings on Revolving Credit Facility |
|
264,000 |
|
|
|
45,000 |
|
Payments on Revolving Credit Facility |
|
(233,000 |
) |
|
|
(45,000 |
) |
Repayment of long-term debt |
|
(6,075 |
) |
|
|
(6,075 |
) |
Payment of deferred financing costs |
|
(297 |
) |
|
|
— |
|
Proceeds from options exercised |
|
— |
|
|
|
1,378 |
|
Repurchase and retirement of common stock |
|
— |
|
|
|
(152,146 |
) |
Payments of employee tax withholdings related to restricted stock
vesting |
|
(1,780 |
) |
|
|
— |
|
Net cash provided by (used in)
financing activities |
|
22,848 |
|
|
|
(156,843 |
) |
Net decrease in cash and cash
equivalents |
|
(92,863 |
) |
|
|
(150,368 |
) |
Cash and cash equivalents,
beginning of period |
|
112,293 |
|
|
|
343,498 |
|
Cash and cash equivalents, end
of period |
$ |
19,430 |
|
|
$ |
193,130 |
|
Supplemental
Information: |
|
|
|
|
|
Interest |
$ |
46,413 |
|
|
$ |
19,409 |
|
Income taxes, net of refunds received |
|
12,648 |
|
|
|
7,442 |
|
|
GAAP to Non-GAAP Reconciliation |
(Amounts in thousands except per share
amounts) |
(unaudited) |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
July 1, 2023 |
|
|
July 2, 2022 |
|
|
July 1, 2023 |
|
|
July 2, 2022 |
|
Net income |
$ |
72,547 |
|
|
$ |
122,986 |
|
|
$ |
10,761 |
|
|
$ |
101,095 |
|
Interest expense |
|
17,675 |
|
|
|
6,847 |
|
|
|
48,282 |
|
|
|
20,659 |
|
Income tax expense |
|
25,585 |
|
|
|
42,448 |
|
|
|
4,592 |
|
|
|
33,519 |
|
Depreciation and amortization
expense(1) |
|
8,144 |
|
|
|
7,063 |
|
|
|
25,569 |
|
|
|
22,880 |
|
Equity-based compensation
expense(2) |
|
2,754 |
|
|
|
3,113 |
|
|
|
9,460 |
|
|
|
8,825 |
|
Costs related to equity
offerings(3) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
550 |
|
Strategic project
costs(4) |
|
749 |
|
|
|
641 |
|
|
|
2,763 |
|
|
|
4,428 |
|
Executive transition costs and
other(5) |
|
1,584 |
|
|
|
(156 |
) |
|
|
7,256 |
|
|
|
778 |
|
Adjusted EBITDA |
$ |
129,038 |
|
|
$ |
182,942 |
|
|
$ |
108,683 |
|
|
$ |
192,734 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
July 1, 2023 |
|
|
July 2, 2022 |
|
|
July 1, 2023 |
|
|
July 2, 2022 |
|
Net income |
$ |
72,547 |
|
|
$ |
122,986 |
|
|
$ |
10,761 |
|
|
$ |
101,095 |
|
Equity-based compensation
expense(2) |
|
2,754 |
|
|
|
3,113 |
|
|
|
9,460 |
|
|
|
8,825 |
|
Costs related to equity
offerings(3) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
550 |
|
Strategic project
costs(4) |
|
749 |
|
|
|
641 |
|
|
|
2,763 |
|
|
|
4,428 |
|
Executive transition costs and
other(5) |
|
1,584 |
|
|
|
(156 |
) |
|
|
7,256 |
|
|
|
778 |
|
Tax effects of these
adjustments(6) |
|
(1,272 |
) |
|
|
(899 |
) |
|
|
(4,870 |
) |
|
|
(3,645 |
) |
Adjusted net income |
$ |
76,362 |
|
|
$ |
125,685 |
|
|
$ |
25,370 |
|
|
$ |
112,031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
$ |
0.39 |
|
|
$ |
0.67 |
|
|
$ |
0.06 |
|
|
$ |
0.54 |
|
Adjusted diluted earnings per
share |
$ |
0.41 |
|
|
$ |
0.68 |
|
|
$ |
0.14 |
|
|
$ |
0.60 |
|
Weighted average shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
183,932 |
|
|
|
182,937 |
|
|
|
183,725 |
|
|
|
184,707 |
|
Diluted |
|
184,760 |
|
|
|
184,721 |
|
|
|
184,752 |
|
|
|
186,695 |
|
|
(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 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. |
|
(3) |
Includes costs incurred for follow-on equity offerings, which are
reported in other (income) expenses, net in our condensed
consolidated statements of operations. |
|
(4) |
Represents non-recurring costs, such as third-party consulting
costs, which 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. |
|
(5) |
Includes executive transition costs, severance associated with
corporate restructuring, losses (gains) on asset dispositions,
merger and acquisition costs, and other non-recurring, non-cash, or
discrete items as determined by management. Amounts are reported in
SG&A in our condensed consolidated statements of
operations. |
|
(6) |
Represents the tax effect of the total adjustments based on our
combined U.S. federal and state statutory tax rates. Amounts are
reported in income tax expense in our condensed consolidated
statements of operations. |
|
|
|
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