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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
______________________________
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Quarterly Period Ended March 29, 2003
or
[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from to
Commission File Number 0-18741
LESLIE'S POOLMART, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-4620298
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3925 E. Broadway Road
Phoenix, Arizona 85040
(Address of principal executive offices)
Registrant's telephone number, including area code: (602) 366-3999
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all documents
and reports required to be filed by Sections 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [x] No [_]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes [_] No [x]
The number of shares of the registrant's Common Stock outstanding at May
13, 2003 was 7,080,438 shares.
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LESLIE'S POOLMART, INC.
AND SUBSIDIARIES
FORM 10-Q
For the Quarterly Period Ended March 29, 2003
INDEX
Part I. Financial Information
Page
----
Item 1. Financial Statements
Consolidated Balance Sheets as of
March 29, 2003 (unaudited) and September 28, 2002 1
Consolidated Statements of Operations for the 13 weeks and 26 weeks
Ended March 29, 2003 (unaudited) and March 30, 2002 (unaudited) 2
Consolidated Statements of Cash Flows for the 26 weeks ended
March 29, 2003 (unaudited) and March 30, 2002 (unaudited) 3
Notes to Consolidated Financial Statements (unaudited) 4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 6
Item 3. Quantitative and Qualitative Disclosures about Market Risk 9
Item 4. Controls and Procedures 9
Part II. Other Information 10
Item 1. Legal Proceedings 10
Signatures 10
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Leslie's Poolmart, Inc.
Consolidated Balance Sheets
- ----------------------------------------------------------------------------------------------------------------
(Dollar amounts in thousands)
- ----------------------------------------------------------------------------------------------------------------
March 29, September 28,
2003 2002
- ----------------------------------------------------------------------------------------------------------------
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 6,170 $ 17,996
Accounts and other receivables, net 5,483 7,398
Inventories 87,931 55,540
Prepaid expenses and other current assets 2,637 1,235
Deferred tax assets 11,681 7,678
- ----------------------------------------------------------------------------------------------------------------
Total current assets 113,902 89,847
Property, plant and equipment, at cost, net of accumulated depreciation 40,674 42,744
Goodwill, net 7,564 7,564
Deferred financing costs, net 734 1,080
Other assets 463 529
- ----------------------------------------------------------------------------------------------------------------
Total assets $ 163,337 $ 141,764
================================================================================================================
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 51,281 $ 19,572
Accrued expenses 22,926 27,402
Income taxes payable - 8,225
Current maturities of long-term debt - 14
- ----------------------------------------------------------------------------------------------------------------
Total current liabilities 74,207 55,213
Line of credit borrowings 19,000 -
Other long-term liabilities 4,909 2,121
Senior notes 90,000 90,000
Deferred tax liabilities 1,812 1,812
- ----------------------------------------------------------------------------------------------------------------
Total liabilities 189,928 149,146
- ----------------------------------------------------------------------------------------------------------------
Commitments and contingencies - -
Preferred Stock, $0.001 par value; Authorized - 2,000,000 shares;
Issued and outstanding - 45,716 Series A at March 29, 2003
and 45,517 Series A at September 28, 2002 45,716 45,517
Stockholders' equity (deficit):
Common stock, $0.001 par value, Authorized 12,000,000 shares
Issued and outstanding 7,080,438 shares at March 29, 2003 and
7,065,438 shares at September 28, 2002 1 1
Stock subscriptions receivable (450) (450)
Paid-in capital (45,247) (45,278)
Retained deficit (26,611) (7,172)
- ----------------------------------------------------------------------------------------------------------------
Total stockholders' deficit (72,307) (52,899)
- ----------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity (deficit) $ 163,337 $ 141,764
================================================================================================================
See accompanying notes to consolidated financial statements.
1
Leslie's Poolmart, Inc.
Consolidated Statements of Operations
- -------------------------------------------------------------------------------------------------------------------
(Dollar Amounts In Thousands)
- -------------------------------------------------------------------------------------------------------------------
13 Weeks Ended 26 Weeks Ended
------------------------ ------------------------
March 29, March 30, March 29, March 30,
2003 2002 2003 2002
- -------------------------------------------------------------------------------------------------------------------
(unaudited) (unaudited)
Sales $ 35,554 $ 34,258 $ 71,451 $ 65,140
Cost of merchandise sold and services sold,
including warehousing and transportation expenses 19,244 19,324 39,343 37,092
- -------------------------------------------------------------------------------------------------------------------
Gross profit 16,310 14,934 32,108 28,048
Selling, general and administrative expenses 27,218 28,270 53,717 53,373
Amortization of goodwill - 119 - 181
- -------------------------------------------------------------------------------------------------------------------
Operating loss (10,908) (13,455) (21,609) (25,506)
Other expenses/(income):
Interest expense 2,689 2,782 5,234 5,451
Interest income (13) (3) (16) (11)
Other expense 101 339 212 370
- -------------------------------------------------------------------------------------------------------------------
Total other expense 2,777 3,118 5,430 5,810
- -------------------------------------------------------------------------------------------------------------------
Net loss before taxes (13,685) (16,573) (27,039) (31,316)
Income tax benefit (5,362) (6,476) (10,588) (12,225)
- -------------------------------------------------------------------------------------------------------------------
Net loss (8,323) (10,097) (16,451) (19,091)
Series A Preferred Stock dividends and accretion (1,550) (1,319) (2,988) (2,592)
- -------------------------------------------------------------------------------------------------------------------
Loss applicable to common shareholders $ (9,873) $ (11,416) $ (19,439) $ (21,683)
===================================================================================================================
See accompanying notes to consolidated financial statements.
2
Leslie's Poolmart, Inc.
Consolidated Statements of Cash Flows
- ---------------------------------------------------------------------------------------------------------
(Dollar Amounts in Thousands)
- ---------------------------------------------------------------------------------------------------------
26 Weeks Ended
March 29, March 30,
2003 2002
- ---------------------------------------------------------------------------------------------------------
(unaudited) (unaudited)
Operating activities:
Net loss $ (16,451) $ (19,091)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 4,559 4,176
Amortization of loan fees and discounts 346 326
Allowance for (recovery of) doubtful accounts 184 (3)
Loss on disposition of assets 212 369
Deferred income taxes (4,003) (6,241)
Changes in operating assets and liabilities
Accounts and other receivables 1,731 3,626
Inventories (32,391) (23,752)
Prepaid expenses and other current assets (1,402) (336)
Other assets 66 6
Accounts payable and accrued expenses 27,233 20,899
Income taxes payable (8,225) (5,999)
- ---------------------------------------------------------------------------------------------------------
Net cash used in operating activities (28,141) (26,020)
- ---------------------------------------------------------------------------------------------------------
Investing activities:
Purchase of property, plant and equipment (2,704) (4,383)
Proceeds from disposition of property, plant and equipment 3 12
- ---------------------------------------------------------------------------------------------------------
Net cash used in investing activities (2,701) (4,371)
- ---------------------------------------------------------------------------------------------------------
Financing activities:
Net line of credit borrowings 19,000 33,496
Payments of long-term debt (14) (22)
Proceeds from issuance of common stock, net 30 17
- ---------------------------------------------------------------------------------------------------------
Net provided by financing activities 19,016 33,491
- ---------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (11,826) 3,100
Cash and cash equivalents and beginning of period 17,996 6,768
- ---------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 6,170 $ 9,868
=========================================================================================================
See accompanying notes to consolidated financial statements.
3
Leslie's Poolmart, Inc.
Notes to Consolidated Financial Statements (unaudited)
(1) Presentation and Financial Information
The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the six-month period ended March 29, 2003 are not necessarily
indicative of the results that may be expected for the year ended September
27, 2003.
The balance sheet at March 29, 2003 has been derived from the unaudited
financial statements at that date but does not include all of the
information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements.
For further information, refer to the consolidated financial statements
and footnotes thereto included in Leslie's Poolmart, Inc.'s annual report
on Form 10-K for the year ended September 28, 2002.
(2) Organization and Operation
Leslie's Poolmart, Inc. is a specialty retailer of swimming pool
supplies and related products. The Company markets its products under the
trade name Leslie's Swimming Pool Supplies through 413 retail stores in 33
states; a nationwide mail order catalog; and an Internet E-commerce
capability. The Company also repackages certain bulk chemical products for
retail sale. The Company's business is highly seasonal as the majority of
its sales and all of its operating profits are generated in the quarters
ending June and September.
(3) Inventories
Inventories consists of the following:
March 29, September 28,
Amounts in thousands 2003 2002
-------------------------------------------------------------------
Raw materials and supplies $ 2,005 $ 660
Finished goods 85,926 54,880
-------------------------------------------------------------------
Total Inventories $ 87,931 $ 55,540
===================================================================
(4) Goodwill
In accordance with the provisions of Statement of Financial Accounting
Standards (SFAS) No. 141 Business Combinations and SFAS No. 142 Goodwill
and Other Intangible Assets, the Company applied the new rules on
accounting for goodwill and other intangible assets deemed to have
indefinite lives beginning on September 29, 2002. The Company no longer
amortizes its goodwill under SFAS No. 142 but will be subjected to periodic
assessments for impairment. The Company completed an asset impairment test
at adoption and noted no indications of impairment. The unamortized balance
of goodwill at March 29, 2003 was $7.6 million. Amortization expense of
$119,000 and $181,000 was included in the consolidated statements of
operations for the 13 and 26 weeks ended March 30, 2002, respectively.
4
(5) Stock Based Compensation
The Company has adopted the provisions of SFAS No. 148 "Accounting for
Stock-Based Compensation - Transition and Disclosure" which amends SFAS No.
123 " Accounting for Stock-Based Compensation". The Company has adopted the
disclosure only provision of SFAS No. 123 and accordingly recognizes no
compensation expense for employee stock option grants. Had compensation
expense for these plans been determined consistent with SFAS No. 123, the
Company losses would have increased by $15,000 and $30,000 for each of the
13 and 26 weeks ended March 29, 2003 and March 30, 2002, respectively.
(6) Recent Accounting Pronouncements
Effective November 21, 2002, The Emerging Issues Task Force "EITF"
issued EITF 02-16, "Accounting by a Customer (including a reseller) for
certain consideration received from a vendor". The release provides
guidance on certain issues, including (1) the criteria for vendor
consideration to be accounted for as a cost reimbursement, (2) the income
statement recognition for consideration received from a vendor that is
classified as a reduction of cost of sales, (3) what is considered
stand-alone value requiring classification of vendor payments as revenue,
and ()4 transition and other issues. The adoption of this standard did not
have a material impact on the operations or financial position of the
Company.
5
Leslie's Poolmart, Inc.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included in this
document (as well as information included in oral statements or other written
statements made or to be made by the Company) contains statements that are
forward-looking, such as statements relating to plans for future activities.
Such forward-looking information involves important risks and uncertainties that
could significantly affect anticipated results in the future and, accordingly,
such results may differ from those expressed in any forward-looking statements
made by or on behalf of the Company. These risks and uncertainties include, but
are not limited to, those relating to domestic economic conditions, activities
of competitors, seasonality changes in federal or state tax laws and of the
administration of such laws and the general condition of the economy.
This discussion and analysis of our financial condition and results of
operations, should be read in conjunction with our unaudited consolidated
financial statements and disclosures included elsewhere in this report, and
management's discussion and analysis of financial condition and results of
operations included as part of Form 10-K for the year 2002.
General
Leslie's Poolmart, Inc. is the leading specialty retailer of swimming
pool supplies and related products in the United States. The Company currently
markets its products through 413 Company-owned retail stores in 33 states; a
nationwide mail order catalog; and an Internet E-commerce capability. Leslie's
is vertically integrated, operating a chemical repackaging facility in Ontario,
California. It supplies its retail stores from distribution facilities located
in Ontario, California; Dallas, Texas; Bridgeport, New Jersey; and Covington,
Kentucky.
Seasonality and Quarterly Fluctuations
The Company's business exhibits substantial seasonality, which the
Company believes is typical of the swimming pool supply industry. In general,
sales and net income are highest during the fiscal quarters ending in June and
September, which represent the peak months of swimming pool use. Sales are
substantially lower during the quarters ending December and March when the
Company will typically incur operating losses.
The Company expects that its quarterly results of operations will
fluctuate depending on the timing and amount of revenue contributed by new
stores and, to a lesser degree, the timing of costs associated with the opening
of new stores. The Company generally attempts to open its new stores in the
quarter ending in March in order to position itself for the following peak
season.
Results of Operations
Net Sales. Net sales for the 13 weeks ended March 29, 2003 were $35.6
million compared to $34.3 million for the 13 weeks ended March 30, 2002. The
3.8% increase was due to in part to an increase of 6 new stores opened as
compared to the prior year and in part to increases in the Company's comparable
store sales. Year-to-date sales were $71.5 million as compared to $65.1 million
in the prior year. Retail comparable store sales for the 13 weeks and 26 six
weeks of fiscal 2002, increased 2.5% and 7.8%, respectively as compared to the
prior year sales. The Company considers a store to be comparable in the first
full month after it has completed 52 weeks of sales. Closed stores become
non-comparable during their last partial month of operation. Stores that are
relocated are considered comparable stores at the time the relocation is
completed. Comparable store sales is not a measure of financial performance
under accounting principles generally accepted in the United States (GAAP).
Comparable store sales is not calculated in the
6
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.
Gross Profit. Gross profit for the 13 weeks ended March 29, 2003 was $16.3
million compared to $14.9 million for the 13 weeks ended March 30, 2002. As a
percentage of sales, gross profit was 45.9% for the 13 weeks of fiscal 2003
compared to 43.6% for the 13 weeks of fiscal 2002. Gross profit improved due to
the increased sales, reductions in distribution expenses and improvements in
product acquisition costs. For the 26 weeks ended March 29, 2003, gross profit
was $32.1 million as compared to $28.0 million in the prior year. As a
percentage of sales, gross profit was 44.9% as compared to 43.1% in the prior
year. This improvement was due to reductions in distribution expenses as a
percent of sales and improvements in product acquisition costs and reduced
inventory shrink.
Operating and Administrative Expense. Operating and administrative expense
for the 13 weeks ended March 29, 2003, were $27.2 million compared to $28.4
million for the 13 weeks ended March 30, 2002. Operating and administrative
expenses as a percentage of sales were 76.6% for the 13 weeks ended March 29,
2003 compared to 82.9% for the 13 weeks ended March 30, 2002. Operating expenses
for the 2003 second quarter decreased as compared to the 2002 quarter primarily
due to the expense recorded in the prior year for defending a purported class
action lawsuit that was settled, plus effective expense controls during the
current quarter. Operating expenses were $53.7 million compared to $53.6 million
for the 26 weeks ended March 30, 2002.
Operating Loss. Operating loss for the 13 weeks ended March 29, 2003
decreased by $2.5 million from a $13.5 million loss during the 13 weeks ended
March 30, 2002. The operating loss decreased due to improvements in gross
margin, effective expense controls and the reduction in expenses due to the
settlement costs of a purported class action lawsuit that was settled in the
prior year. Operating loss for the 26 weeks ended March 29, 2003, was reduced
$3.9 million as compared to a $25.5 million loss in the first half of last year.
The operating loss improved due to the improved sales and gross margin and the
reduction in expenses due to the settlement of the purported class action
lawsuit in the prior year.
Other Income and Expense. Net interest expense was $2.7 million for the 13
weeks ended March 29, 2003 compared to $2.8 million for the 13 weeks ended March
30, 2002. The decrease in interest expense was due primarily to lower average
debt balances in the quarter and more favorable interest rates. For the 26 weeks
ended March 29, 2003, net interest expense was $5.2 million as compared to $5.5
million in the prior year.
Income Taxes. The Company's income tax benefit for the 13 weeks ended March
29, 2003 was $5.4 million, or an effective tax rate of 39.2% as compared to a
$6.5 million benefit, or an effective tax rate of 39.1% for the 13 weeks ended
March 30, 2002. For the 26 weeks ended March 29, 2003, the income tax benefit
was $10.6 million, or an effective tax rate of 39.2% as compared to $12.2
million, or an effective tax rate of 39.0% in the prior year.
Adjusted EBITDA. The adjusted EBITDA loss for the 13 weeks ended March 29,
2003 was $8.6 million versus an adjusted EBITDA loss of $9.8 million, for the 13
weeks ended March 30, 2002. For the 26 weeks ended March 29, 2003, the adjusted
EBITDA loss was reduced by $2.7 million as compared to a loss of $19.8 million
in the prior year.
7
Adjusted EBITDA is determined as follows /(1)/:
----------------------------------------------------------------------------------------------------------
13 Weeks Ended 26 Weeks Ended
----------------------------------------------------------------------------------------------------------
March 29, March 30, March 29, March 30,
Amounts in thousands 2003 2002 2003 2002
----------------------------------------------------------------------------------------------------------
Net loss as reported $ (8,323) $ (10,097) $ (16,451) $ (19,091)
Depreciation 2,285 2,009 4,559 4,068
Amortization - 119 - 181
Interest expense, net 2,676 2,779 5,218 5,440
Loss on disposition of assets 101 339 212 369
Income tax benefit (5,362) (6,476) (10,588) (12,225)
Legal Settlement /(2)/ - 1,500 - 1,500
----------------------------------------------------------------------------------------------------------
Adjusted EBITDA loss $ (8,623) $ (9,827) $ (17,050) $ (19,758)
==========================================================================================================
/(1)/ Adjusted EBITDA is defined as earnings before interest, taxes,
depreciation, amortization, loss/(gain) on disposition of fixed assets,
and unusual charges. Adjusted EBITDA is not a measure of financial
performance under accounting principles generally accepted in the United
States (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 or liquidity, and should not be considered
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 and presents a better measure of liquidity for those
charges that are not anticipated to be incurred in the future. 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.
/(2)/ During the 2/nd/ quarter of 2002, the Company recorded the expense of
defending a purported class action lawsuit that was settled in August of
2002.
Financial Condition, Liquidity and Capital Resources
Changes in Financial Condition. Between September 29, 2002 and March
29, 2003, total current assets increased by $24.1 million primarily as the
result of increases in inventory of $32.4 million partially offset by
decreases in cash and cash equivalents which were reduced by $11.8 million
during this period. Inventory normally increases during this time frame to
accommodate the necessary building of inventory as the Company prepares
for its peak selling season.
During the same period, current liabilities increased $19.0 million
due primarily to an increase in accounts payable of $31.7 million
partially offset by a $8.2 million decrease in current income tax
liabilities. The change in accounts payable reflects the timing of
payments between periods while the reduced income tax liability reflects
the accrued tax benefit associated with the quarterly operating loss.
Liquidity and Capital Resources. Net cash used by operating
activities was $28.1 million for the 26 weeks ended March 29, 2003
compared to net cash used by operating activities of $26.0 million for the
same period in the prior year. The change in the 26 weeks ended March 29,
2003 compared to the same period in 2002 was due primarily to larger
increases in inventory offset by increases in accounts payable and the
improved net loss.
Capital expenditures for the 26 weeks ended March 29, 2003 were $2.7
million. Capital expenditures are expected to range between $8.0 and $10.0
million for fiscal 2003, primarily for the purpose
8
of opening new stores. It is anticipated that the balance of 2003 capital
expenditures will be funded out of cash provided by operations and
borrowings under the credit facility.
Net cash provided by financing activities for the 26 weeks ended
March 29, 2003 was $19.0 million. Funds borrowed under the revolving
credit portion of the Company's credit facility are restricted to working
capital and general corporate purposes, which includes capital
expenditures. The level of borrowings under the Company's credit facility
is dependent primarily upon cash flows from operations, the timing of
disbursements, long-term borrowing activity and capital expenditure
requirements.
The Company believes its internally generated funds, as well as its
borrowing capacity, are adequate to meet its working capital needs,
maturing obligations and capital expenditure requirements, including those
relating to the opening of new stores and the relocation of the corporate
office.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company's Loan and Security Agreement carries interest rate risk.
Amounts borrowed under this Agreement bear interest at either Libor plus
1.5%, or at the Company's choice, the lender's reference rate. Should the
lenders' base rate change, the Company's interest expense will increase or
decrease accordingly. At the end of the second quarter, $19.0 million was
outstanding under this facility.
Item 4. Controls and Procedures.
Our Principal Executive Officer and Principal Accounting Officer
reviewed our disclosure controls and procedures during the last 90 days.
Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures
are effective in timely alerting them to material information related to
the Company (including our consolidated subsidiaries) that is required to
be included in our periodic SEC filings. There have been no significant
changes in internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation.
9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
We are and may continue to be a party to various lawsuits and arbitrations
from time to time. As of March 29, 2003, we were not a party to any legal
proceedings that we believe are likely to have a material effect on our
business.
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K - None
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LESLIE'S POOLMART, INC.
By: /s/ Lawrence H. Hayward
---------------------------------------
Lawrence H. Hayward
President and
Chief Executive Officer
Date: May 13, 2003
By: /s/ Donald J. Anderson
---------------------------------------
Donald J. Anderson
Executive Vice-President and
Chief Financial Officer
Date: May 13, 2003
10
CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT
I, Lawrence H. Hayward, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Leslie's Poolmart,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including us
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 13, 2003
By: /s/ Lawrence H. Hayward
------------------------------
Lawrence H. Hayward
President and
Chief Executive Officer
11
CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT
I, Donald J. Anderson certify that:
1. I have reviewed this quarterly report on Form 10-Q of Leslie's Poolmart,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including us
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 13, 2003
By: /s/ Donald J. Anderson
------------------------------
Donald J. Anderson
Executive Vice-President and
Chief Financial Officer
12