Exhibit 99.1

img57390227_0.jpg 

Leslie’s, Inc. Announces Third Quarter Fiscal 2023 Financial Results

 

•
Sales of $610.9 million
•
Net income of $72.5 million
•
Adjusted EBITDA of $129.0 million
•
Diluted earnings per share of $0.39; Adjusted diluted earnings per share of $0.41

PHOENIX, August 2, 2023 – 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.

1

 

•
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.

 

2

 

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.

 

 

3

 

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.

 

4

 

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”).

5

 

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.

Contact

Investors

Farah Soi/Caitlin Churchill

ICR

investorrelations@lesl.com

6

 

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.”

 

 

 

 

7

 

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

 

 

8

 

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

 

 

9

 

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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