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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 27, 2004

 

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 incorporation or organization)   (I.R.S. Employer 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 4, 2004 was 7,369,502 shares.

 



Table of Contents

LESLIE’S POOLMART, INC.

AND SUBSIDIARIES

 

FORM 10-Q

 

For the Quarterly Period Ended March 27, 2004

 

INDEX

 

     Page

Part I. Financial Information

    
Item 1.   

Financial Statements

    
    

Consolidated Balance Sheets as of March 27, 2004 (unaudited) and September 27, 2003

   1
    

Consolidated Statements of Operations for the 13 weeks and 26 weeks ended March 27, 2004 (unaudited) and March 29, 2003 (unaudited)

   2
    

Consolidated Statements of Cash Flows for the 26 weeks ended March 27, 2004 (unaudited) and March 29, 2003 (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

    
Item 1.   

Legal Proceedings

   10

Signatures

        10

 


Table of Contents

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Leslie’s Poolmart, Inc.

 

Consolidated Balance Sheets

 

(Dollar amounts in thousands)

 

    

March 27,

2004


   

September 27,

2003


 
     (unaudited)        
ASSETS                 

Current assets:

                

Cash and cash equivalents

   $ 6,015     $ 10,022  

Accounts and other receivables, net

     4,813       7,801  

Inventories

     86,083       53,030  

Prepaid expenses and other current assets

     2,362       1,301  

Deferred tax assets

     11,351       6,028  
    


 


Total current assets

     110,624       78,182  

Property, plant and equipment, at cost, net of accumulated depreciation

     39,207       40,759  

Goodwill, net

     7,460       7,460  

Deferred financing costs, net

     2,053       2,069  

Other assets

     473       466  
    


 


Total assets

   $ 159,817     $ 128,936  
    


 


LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)                 

Current liabilities:

                

Accounts payable

   $ 59,009     $ 26,217  

Accrued expenses

     23,502       28,739  

Income taxes payable

     —         7,816  
    


 


Total current liabilities

     82,511       62,772  

Revolving commitment

     25,000       —    

Other long term liabilities

     11,162       7,914  

Senior notes

     59,495       59,495  

Deferred tax liabilities

     1,017       1,017  
    


 


Total liabilities

     179,185       131,198  

Commitments and contingencies

     —         —    

Redeemable preferred stock, $0.001 par value; authorized – 2,000,000 shares; Issued and outstanding – 46,115 Series A at March 27, 2004 and 45,915 Series A at September 27, 2003

     46,115       45,915  

Stockholder’s equity (deficit):

                

Common stock, $0.001 par value, authorized 12,000,000 shares, Issued and outstanding 7,369,502 shares at March 27, 2004 and September 27, 2003, respectively

     7       7  

Stock subscriptions receivable

     (450 )     (450 )

Paid-in capital

     (44,714 )     (44,714 )

Retained deficit

     (20,326 )     (3,020 )
    


 


Total stockholders’ deficit

     (65,483 )     (48,177 )
    


 


Total liabilities and stockholders’ equity (deficit)

   $ 159,817     $ 128,936  
    


 


 

See accompanying notes to consolidated financial statements.

 

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Leslie’s Poolmart, Inc.

 

Consolidated Statements of Operations

 

(Dollar amounts in thousands)

 

     13 Weeks Ended

    26 Weeks Ended

 
    

March 27,

2004


   

March 29,

2003


   

March 27,

2004


   

March 29,

2003


 
     (unaudited)     (unaudited)  

Sales

   $ 38,848     $ 35,554     $ 79,668     $ 71,451  

Cost of merchandise sold and services sold, including warehousing and transportation expenses

     20,149       19,244       42,539       39,343  
    


 


 


 


Gross profit

     18,699       16,310       37,129       32,108  

Selling, general and administrative expenses

     28,626       27,218       56,357       53,717  
    


 


 


 


Operating loss

     (9,927 )     (10,908 )     (19,228 )     (21,609 )

Other expenses/(income):

                                

Interest expense

     1,834       2,689       3,616       5,234  

Interest income

     (5 )     (13 )     (10 )     (16 )

Other expense/(income)

     (230 )     101       54       212  
    


 


 


 


Total other expense

     1,599       2,777       3,660       5,430  
    


 


 


 


Loss before income taxes

     (11,526 )     (13,685 )     (22,888 )     (27,039 )

Income tax benefit

     (4,547 )     (5,362 )     (9,030 )     (10,588 )
    


 


 


 


Net loss

     (6,979 )     (8,323 )     (13,858 )     (16,451 )

Series A Preferred Stock dividends and accretion

     (1,756 )     (1,550 )     (3,448 )     (2,988 )
    


 


 


 


Loss applicable to common shareholders

   $ (8,735 )   $ (9,873 )   $ (17,306 )   $ (19,439 )
    


 


 


 


 

See accompanying notes to consolidated financial statements.

 

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Leslie’s Poolmart, Inc.

 

Consolidated Statements of Cash Flows

 

(Dollar amounts in thousands)

 

     26 Weeks Ended

 
    

March 27,

2004


   

March 29,

2003


 
     (unaudited)     (unaudited)  

Operating activities:

                

Net loss

   $ (13,858 )   $ (16,451 )

Adjustments to reconcile net loss to net cash used in operating activities:

                

Depreciation and amortization

     5,095       4,559  

Amortization of loan fees and discounts

     276       346  

Allowance for doubtful accounts

     153       184  

Loss on disposition of assets

     53       212  

Deferred income taxes

     (5,323 )     (4,003 )

Changes in operating assets and liabilities

                

Accounts and other receivables

     2,835       1,731  

Inventories

     (33,053 )     (32,391 )

Prepaid expenses and other current assets

     (1,061 )     (1,402 )

Other assets

     (7 )     66  

Accounts payable and accrued expenses

     27,555       27,233  

Income taxes payable

     (7,816 )     (8,225 )
    


 


Net cash used in operating activities

     (25,151 )     (28,141 )
    


 


Investing activities:

                

Purchase of property, plant and equipment

     (4,206 )     (2,704 )

Proceeds from disposition of property, plant and equipment

     610       3  
    


 


Net cash used in investing activities

     (3,596 )     (2,701 )
    


 


Financing activities:

                

Net line of credit borrowings

     25,000       19,000  

Payments on long-term debt

     —         (14 )

Proceeds from issuance of common stock, net

     —         30  

Payment of deferred financing cost

     (260 )     —    
    


 


Net cash provided by financing activities

     24,740       19,016  
    


 


Net decrease in cash and cash equivalents

     (4,007 )     (11,826 )

Cash and cash equivalents at beginning of period

     10,022       17,996  
    


 


Cash and cash equivalents at end of period

   $ 6,015     $ 6,170  
    


 


 

See accompanying notes to consolidated financial statements.

 

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Leslie’s Poolmart, Inc. and Subsidiaries

 

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 accounting principles generally accepted in the United States 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 26-week period ended March 27, 2004 are not necessarily indicative of the results that may be expected for the year ended October 2, 2004.

 

The balance sheet at March 27, 2004 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 27, 2003.

 

(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 452 retail stores in 36 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 in June and September.

 

(3) Inventories

 

Inventories consists of the following:

 

Amounts in thousands


   March 27,
2004


   September 27,
2003


Raw materials and supplies

   $ 1,225    $ 371

Finished goods

     84,858      52,659
    

  

Total Inventories

   $ 86,083    $ 53,030
    

  

 

(4) Line of Credit Agreement

 

On October 31, 2003, the Company amended its Loan and Security Agreement (the “Amended Agreement”) with Wells Fargo Retail Finance LLC. The Amended Agreement extends the maturity date to January 15, 2008 and allows the Company to optionally increase its maximum borrowing to $75.0 million. The Amended Agreement contains certain financial covenants that include minimum calculated EBITDA levels, maximum capital expenditure amounts, Fixed Charge Coverage Ratio, and Senior Leverage Ratio. As of March 27, 2004, the Company was in compliance with these covenants.

 

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(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 $27,000 and $15,000 for the 13 weeks ended March 27, 2004 and March 29, 2003, respectively and $47,000 and $30,000 for the 26 weeks ended March 27, 2004 and March 29, 2003, respectively.

 

(6) Recent Accounting Pronouncements

 

FASB Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46), was issued in January 2003 and addresses consolidation by business enterprises of variable interest entities. FIN 46 clarifies existing accounting for whether variable interest entities, as defined in FIN 46, should be consolidated in financial statements based upon the investee’s ability to finance activities without additional financial support and whether investors possess characteristics of a controlling financial interest. Fin 46 applies to public entities that have interests in special purpose entities for periods ending after December 15, 2003. Application for all other types of variable interest entities is required in financial statements for periods ending after March 15, 2004. The Company does not have any interests in variable interest entities and therefore this adoption will not have any effect on our results of operations or financial position.

 

In May 2003, SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, was issued. SFAS 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity, and is effective for financial instruments entered into or modified after May 31, 2003 and otherwise is effective July 1, 2003. The Company at March 27, 2004 has $46.1 million of mandatorily redeemable preferred stock classified as mezzanine equity on the balance sheet. The effect of SFAS No. 150 will be to reclassify this balance from the mezzanine section of the balance sheet to a liability classification on the balance sheet. In addition, the accretion of the value of the preferred stock will be classified as interest expense instead of increasing retained deficit. In October 2003, the SFAS agreed to defer the effective date of Statement 150 to entities that have issued shares that are mandatorily redeemable on a fixed date at a fixed principal amount to fiscal periods beginning after December 15, 2003. Accordingly, the Company will adopt this standard beginning October 3, 2004. Had the standard been adopted during fiscal 2004, interest expense for the thirteen week periods ended March 27, 2004 and March 29, 2003 would have been increased by $1,756,000 and $1,550,000, respectively and $3,448,000 and $2,981,000 for the 26 week periods ended March 27, 2004 and March 29, 2003. The preferred stock dividends and accretion in the statements of stockholders’ equity (deficit) would have been reduced by the same amount.

 

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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 2003.

 

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 452 Company-owned retail stores in 36 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 and a specialty chemical repackaging facility in Hebron, Kentucky. It supplies its retail stores from distribution facilities located in Ontario, California; Dallas, Texas; Swedesboro, New Jersey; and Hebron, 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 27, 2004 were $38.8 million compared to $35.6 million for the 13 weeks ended March 29, 2003. The 9.3% increase was due to comparable store sales increases coupled with the additional store count as compared to the prior year. Year-to-date sales were $79.7 million as compared to $71.5 million in the prior year. Retail comparable store sales for the 13 weeks ended March 27, 2004 increased 4.1% as compared to the prior year. Retail comparable store sales for the 26 weeks ended March 29, 2004 increased 6.7% 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

 

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sales 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.

 

Gross Profit. Gross profit for the 13 weeks ended March 27, 2004 was $18.7 million compared to $16.3 million for the 13 weeks ended March 29, 2003. As a percentage of sales, gross profit was 48.1% for the second quarter of fiscal 2004 compared to 45.9% for the second quarter of fiscal 2003. Gross profit improved due to the increased sales, reductions in distribution expenses on a dollar and rate basis, and improvements in product acquisition costs. For the 26 weeks ended March 27, 2004, gross profit was $37.1 million as compared to $32.1 million in the prior year. As a percentage of sales, gross profit was 46.6% as compared to 44.9% in the prior year.

 

Operating and Administrative Expense. Operating and administrative expense for the 13 weeks ended March 27, 2004, were $28.6 million compared to $27.2 million for the 13 weeks ended March 29, 2003. Operating and administrative expenses as a percentage of sales were 73.7% for the 13 weeks ended March 27, 2004 compared to 76.6% for the 13 weeks ended March 29, 2003. Operating expenses increased during the quarter due to the additional store count as compared to the prior year and the expense rate improved due to effective labor scheduling and the leverage of fixed expenses against the improved sales. Operating expenses were $56.4 million compared to $53.7 million for the 26 weeks ended March 29, 2003.

 

Operating Loss. Operating loss for the 13 weeks ended March 27, 2004 was reduced by $1.0 million from a $10.9 million loss during the 13 weeks ended March 29, 2003 to an operating loss of $9.9 million for the 13 weeks ended March 27, 2004. Operating loss for the 26 weeks ended March 27, 2004 was reduced by $2.4 million as compared to a $21.6 million loss in the first 26 weeks of last year. The operating loss for the 13 weeks improved due to the improved gross margin and effective expense control achieved during the quarter.

 

Other Income and Expense. Net interest expense was $1.8 million for the 13 weeks ended March 27, 2004 compared to $2.7 million for the 13 weeks ended March 29, 2003. The decrease in interest expense was due primarily to the lower Senior Note debt balance in the quarter as compared to the previous year. For the 26 weeks, the net interest expense was $3.6 million and $5.2 million, respectively.

 

Income Taxes. The Company’s income tax benefit for the 13 weeks ended March 27, 2004 was $4.5 million, or an effective rate of 39.5% as compared to a $5.4 million benefit, or an effective rate of 39.2% for the 13 weeks ended March 29, 2003. For the 26 weeks ended March 27, 2004, the income tax benefit was $9.0, or an effective rate of 39.5% as compared to $10.6 million benefit, or an effective rate of 39.2% for the prior year. The reduction in the income tax benefit was due primarily to the improved pre-tax loss as compared to the prior year.

 

Adjusted EBITDA. The adjusted EBITDA loss for the 13 weeks ended March 27, 2004 was $7.4 million versus an adjusted EBITDA loss of $8.6 million, for the 13 weeks ended March 29, 2003. For the 26 weeks ended March 27, 2004, the adjusted EBITDA improved by $2.9 million as compared to an adjusted EBITDA loss of $17.1 million in the prior year.

 

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Adjusted EBITDA is determined as follows (1):

 

     13 Weeks Ended

    26 Weeks Ended

 

Amounts in thousands


  

March 27,

2004


   

March 29,

2003


   

March 27,

2004


   

March 29,

2003


 

Net loss as reported

   $ (6,979 )   $ (8,323 )   $ (13,858 )   $ (16,451 )

Depreciation

     2,536       2,285       5,095       4,559  

Interest expense, net

     1,829       2,676       3,606       5,218  

Loss/(gain) on Disposition of assets

     (230 )     101       54       212  

Income tax benefit

     (4,547 )     (5,362 )     (9,030 )     (10,588 )
    


 


 


 


Adjusted EBITDA

   $ (7,391 )   $ (8,623 )   $ (14,133 )   $ (17,050 )
    


 


 


 


 

(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.

 

Financial Condition, Liquidity and Capital Resources

 

Changes in Financial Condition. Between September 27 2003 and March 27, 2004, total current assets increased by $32.4 million primarily as the result of a $33.1 million increase in inventory during the period offset by reductions in accounts receivable and cash. Inventory normally increases during this time frame as the Company prepares for its peak selling season.

 

During the same period, current liabilities increased by $19.7 million due primarily to a $27.6 million increase in accounts payable and accrued expenses partially offset by a $7.8 million reduction in income taxes payable. The change in accounts payable reflects the additional purchases of inventory while the reduced income tax liability is due to the timing differences of tax payments.

 

Liquidity and Capital Resources. Net cash used in operating activities was $ 25.2 million for the 26 weeks ended March 27, 2004 compared to net cash used in operating activities of $28.1 million for the same period in the prior year. The change in the 26 weeks ended March 27, 2004 compared to the same period in 2003 was due primarily to the reduced net loss.

 

Capital expenditures for the 26 weeks ended March 27, 2004 were $4.2 million. Capital expenditures are expected to range between $9.0 and $11.0 million for fiscal 2004, primarily for the purpose of opening new stores. It is anticipated the balance of 2004 capital expenditures will be funded out of cash provided by operations and borrowings under the credit facility.

 

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Net cash provided by financing activities for the 26 weeks ended March 27, 2004 was $24.7 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.

 

Critical Accounting Policies and Estimates

 

The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States which requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, sales and expenses. On an ongoing basis, the Company evaluates its estimates, including those related to inventory reserves, allowance for doubtful accounts, valuation allowance for the net deferred income tax asset, contingencies and litigation liabilities. The Company bases its estimates on historical experience, independent valuations, and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

 

Revenue on retail sales is recognized upon purchase by the customer. Revenue on services, is recognized as services are performed and the fee is fixed or determinable and collection is probable. Terms are customarily FOB shipping point or point of sale, net of related discounts. The Company does not provide an estimated allowance for sales returns as they are deemed to be immaterial.

 

Inventories are stated at the lower of cost or market. The Company values inventory using the first-in, first-out (FIFO) method. Included in cost of sales are the costs of services and purchased goods, chemical repackaging costs and related distribution costs. The Company recognizes consideration received from vendors at the time our obligations to purchase products or perform services have been completed. These items are recorded as a reduction in cost of goods sold in the statement of operations.

 

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 current quarter, there was $25.0 million 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 were no changes in our internal control over financial reporting during the quarter ended March 27, 2004 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

 

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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 27, 2004, 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

 

(a) Exhibits

 

  31.1  Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

  31.2  Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

  32.1  Certificate of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

  32.2  Certificate of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

(b) 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 4, 2004

By:   /s/    DONALD J. ANDERSON        
   
   

Donald J. Anderson

Executive Vice-President and

Chief Financial Officer

Date: May 4, 2004

 

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