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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the Quarterly Period Ended April 2, 2005

or

For the transition period from                  to                 

Commission File Number 0-18741

LESLIE’S POOLMART, INC.

(Exact name of registrant as specified in its charter)

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 16, 2005 was 40,034,500 shares.

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LESLIE’S POOLMART, INC.

AND SUBSIDIARIES

FORM 10-Q

For the Quarterly Period Ended April 2, 2005

INDEX

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PART I - FINANCIAL INFORMATION

Leslie’s Poolmart, Inc.

Consolidated Balance Sheets

(Dollar amounts in thousands)

See accompanying notes to consolidated financial statements.

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Leslie’s Poolmart, Inc.

Consolidated Statements of Operations (unaudited)

Amounts In Thousands

See accompanying notes to consolidated financial statements.

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Leslie’s Poolmart, Inc.

Consolidated Statements of Cash Flows

(Dollar amounts in thousands)

See accompanying notes to consolidated financial statements.

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Leslie’s Poolmart, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(1) Restatement of Previously Issued Financial Statements

Following a review of the Company’s lease accounting, the Company has reclassified tenant improvement allowances from a contra asset in property, plant and equipment, net to accrued expenses in the consolidated balance sheets. The amortization of the tenant improvement allowances has also been reclassified from a reduction of depreciation and amortization expense to a reduction of occupancy expense in the consolidated statements of income. Finally, the receipt of tenant improvement allowances has been reclassified in the consolidated statement of cash flows by increasing purchase of property, plant and equipment, and decreasing net cash used in operating activities. There was no impact to net income and the balance of retained earnings as a result of this restatement.

The following table reflects the effect of the restatement on the Consolidated statements of Cash Flows (in thousands):

(2) Presentation and Financial Information

The accompanying unaudited consolidated financial statements have been prepared in conformity with United States generally accepted accounting principles 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 United States 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 13-week and 26-week period ended April 2, 2005 are not necessarily indicative of the results that may be expected for the year ended October 1, 2005.

The balance sheet at April 2, 2005 has been derived from the unaudited financial statements at that date but does not include all of the information and footnotes required by United States generally accepted accounting principles 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 October 2, 2004.

(3) Organization and Operation

Leslie’s Poolmart, Inc. which is sometimes referred to as the “Company” or “Leslie’s” in this report, 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 494 stores in 36 states; a nationwide mail order catalog; and an Internet E-commerce capability. The Company also repackages certain bulk chemical

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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.

(4) Recapitalization

On January 25, 2005, Leslie’s Poolmart (“Leslie’s”) completed a recapitalization. The recapitalization was effected through a merger transaction that was financed by a private placement of new notes and borrowings under an amended credit facility.

Pursuant to an Agreement and Plan of Merger between Leslie’s and LPM Acquisition LLC (“LPM”), LPM was merged with and into Leslie’s, with Leslie’s continuing as the surviving entity in the merger (the “Merger”). Immediately prior to the consummation of the Merger, GCP California Fund, L.P. (“GCP”) and certain other Leslie’s stockholders contributed all or a portion of their existing Leslie’s common stock to LPM, and GCP and others contributed $51.1 million to LPM, in exchange for common and preferred units of LPM which were subsequently converted into common and preferred stock of Leslie’s in the Merger.

In the Merger, each of Leslie’s existing shares of common stock (other than those that were contributed to LPM) were exchanged for $15.00 cash consideration, and each of Leslie’s 46.4 million shares of preferred stock were exchanged for $64.5 million, which was the amount payable under the optional redemption provisions of the preferred stock as if it had been redeemed on the closing date of the Merger.

Offering

On January 25, 2005, Leslie’s sold, through a private placement exempt from the registration requirements under the Securities Act of 1933, as amended (the “Securities Act”), $170 million in aggregate principal amount of its 7.75% Senior Notes due 2013 (the “Notes”), with net proceeds, after fees and discounts, of $164.3 million. The Notes were sold in the United States only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons in accordance with Regulation S under the Securities Act. The Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Leslie’s used the net proceeds of this offering to finance the Merger and to consummate the tender offer for its 10.375% Senior Notes due 2008.

Amended Credit Facility

On January 25, 2005, Leslie’s and LPM Manufacturing, Inc., a wholly owned subsidiary of Leslie’s, entered into an Amended and Restated Loan and Security Agreement (the “Loan Agreement”) with the lenders noted therein and Wells Fargo Retail Finance LLC as agent for the Lenders. The Loan Agreement provides for the extension by the lenders of revolving loans and other financial accommodations to Leslie’s and LPM Manufacturing, Inc. in an aggregate principal amount of $75.0 million. The Company’s obligations under the amended credit facility are secured by a lien on substantially all of the Company assets. In addition to the $75.0 million commitment, the total commitment will be increased by $30.0 million via a temporary over-advance facility through June 30, 2005. At the Company’s option, the over-advance facility will again be available in the amount of $20.0 million from September 30, 2005 through March 31, 2006. Finally, at the lender’s discretion, an over-advance facility of $10.0 million may be available to the Company from September 30, 2006 through March 31, 2007.

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Tender Offer

As part of the recapitalization, Leslie’s commenced a cash tender offer (the “Tender Offer”) for any and all of its 10 3/8% Senior Subordinated Notes due 2008 (the “Existing Notes”) and a consent solicitation to amend the related indenture (the “Consent Solicitation” and, together with the Tender Offer, the “Offer”). On January 11, 2005, the Company entered into a supplemental indenture (the “Supplemental Indenture”) with The Bank of New York, as the trustee, supplementing the Indenture dated as of May 21, 2003 (the “Indenture”) as contemplated by the terms of its Offer. The Supplemental Indenture eliminated substantially all of the restrictive covenants and certain events of default under the Indenture relating to the Existing Notes.

The total consideration for the Existing Notes, which was paid in respect of Existing Notes accepted for payment that were validly tendered with consents and not withdrawn on or prior to 5:00 p.m., New York City time, on January 7, 2005, was $1,059.30 for each $1,000 principal amount of Existing Notes, which includes the consent payment of $30.00 per $1,000 principal amount of Existing Notes. Existing Notes accepted for payment that were validly tendered subsequent to 5:00 p.m., New York City time, on January 7, 2005 but on or prior to 5:00 p.m., New York City time, on February 2, 2005, received the tender offer consideration of $1,029.30 for each $1,000 principal amount of Existing Notes, which is equal to the total consideration minus the consent payment of $30.00 per $1,000 principal amount of Existing Notes. $55.5 million aggregate principal amount of the notes have been accepted by the Company in the Offer.

Unusual charges

As part of the recapitalization, the Company recognized $25.7 million in unusual charges for the following costs associated with the transaction.

(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’s net loss would have been increased by $12,000 and $20,000 for the 13 weeks ended April 2, 2005 and March 27, 2004, respectively. For the 26 weeks ended April 2, 2005 and March 27, 2004 the Company’s net loss would have increased by $50,000 and $40,000 respectively.

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(6) Inventories

Inventories consists of the following:

(7) Redeemable Preferred Stock

Effective October 3, 2004, the Company adopted the provisions of SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity”. SFAS 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. The effect of SFAS No. 150 was to reclassify the redeemable preferred stock balance from the mezzanine section of the balance sheet to a liability classification on the balance sheet. In addition, the dividend payable and the accretion of the preferred stock are classified as interest expense instead of charging it against the retained deficit. The amount of interest recorded during the 13-week and 26 week period ended April 2, 2005 related to preferred stock accretion was $1.3 million and $3.2 million respectively.

(8) Recent Accounting Pronouncements

On December 16, 2004, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 123; (Revised 2004) (Statement 123(R)) “Share-Based Payment”, which is a revision of FASB Statement No. 123, “Accounting for Stock-Based Compensation”. Statement 123(R) supersedes APB opinion 25, “Accounting for Stock Issued to Employees” and amends FASB Statement No. 95, “Statement of Cash Flows”. Statement 123(R) requires all share-based payments to employees to be recognized in the financial statements based on their fair market values. Statement 123(R) is effective for the Company beginning October 3, 2005. As permitted by Statement 123, the Company currently accounts for share-based payments to employees using APB Opinion 25’s intrinsic value method and, as such, generally recognizes no compensation cost for employee stock options. Accordingly, the adoption of Statements 123(R)’s fair value method will have a significant impact on our results of operations, although it will have no impact on our overall financial position. The impact of adoption of Statement 123(R) cannot be predicted at this time because it will depend on levels of share-based payments granted in the future. However, had we adopted Statement 123(R) in prior periods, the impact of that standard would have approximated the impact of Statement 123 as described in the disclosure of pro forma net income in Note 3 to our consolidated financial statements. Statement 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature.

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Leslie’s Poolmart, Inc.

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 the Company’s Form 10-K for the year ended October 2, 2004.

General

Leslie’s Poolmart, Inc. is the leading specialty retailer of swimming pool supplies and related products in the United States. The Company markets its products through 494 Company-owned 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 April 2, 2005 were $44.8 million compared to $38.8 million for the 13 weeks ended March 27, 2004. The 15.4% increase was due primarily to the additional store count as compared to the prior year. Year-to-date sales were $85.8 million as compared to $79.7 million in the prior year. Comparable store sales for the 13 weeks ended April 2, 2005 increased 7.8% as compared to the prior year. Comparable store sales for the 26 weeks ended April 2, 2005 increased 1.2% as compared to the prior year sales. We consider 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 same manner by all companies and accordingly is not

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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 April 2, 2005 was $21.8 million compared to $18.7 million for the 13 weeks ended March 27, 2004. As a percentage of sales, gross profit was 48.7% for the second quarter of fiscal 2005 compared to 48.1% for the second quarter of fiscal 2004. Gross profit improved primarily to the increase in sales associated with the additional store count and the strong comparable store sales achieved during the quarter. Gross profit margin during the quarter improved primarily from reductions in shrink at the stores. For the 26 weeks ended April 2, 2005, gross profit was $41.2 million as compared to $37.1 million in the prior year. As a percentage of sales, gross profit was 48.0% as compared to 46.7% in the prior year.

Operating and Administrative Expense. Operating and administrative expense for the 13 weeks ended April 2, 2005, were $48.8 million compared to $28.6 million for the 13 weeks ended March 27, 2004. Operating and administrative expenses as a percentage of sales were 108.8% for the 13 weeks ended April 2, 2005 compared to 73.7% for the 13 weeks ended March 27, 2004. Operating expenses increased during the quarter due primarily to a $16.9 million unusual charge in the quarter for merger related expenses, as described in Note 4 to our consolidated financial statements, and due to increases in occupancy and other related costs associated with the additional store count as compared to the prior year. For the 26 weeks ended April 2, 2005, operating expenses, were $ 77.6 million as compared to $56.4 million in the prior year.

Operating Loss. Operating loss for the 13 weeks ended April 2, 2005, increased by $17.0 million from a $9.9 million loss during the 13 weeks ended March 27, 2004 to an operating loss of $26.9 million for the 13 weeks ended April 2, 2005. The operating loss for the 13 weeks ended April 2, 2005 was higher due to the $16.9 million unusual charge in the quarter for merger related expenses and the increased costs associated with the additional store count as compared to the prior year. During the second quarter of fiscal 2005 the Company operated 494 stores as compared to 452 stores in the second quarter of 2004. The operating loss for the 26 weeks ended April 2, 2005 increased by $17.1 million as compared to the prior year.

Other Income and Expense. Net interest expense was $4.9 million for the 13 weeks ended April 2, 2005 compared to $1.8 million for the 13 weeks ended March 27, 2004. For the 26 weeks ended April 2, 2005, the net interest expense was $8.6 million as compared to $3.6 million in the prior year. The increase in interest expense was due to the impact of the Company’s adoption of SFAS No. 150 whereby the Company records the accrued interest and accretion of our preferred stock as interest expense instead of recording this as a reduction of retained earnings and to the increase in average debt balances in the quarter due to the January merger. For the 13-week and 26-week period ended April 2, 2005, the impact due to the adoption of SFAS No. 150 expense was $1.3 million, and $3.2 million, respectively.

Unusual Charge. During the quarter, the Company recorded an unusual operating charge of $16.9 million for expenses related to the January merger. Of these costs, $16.1 million was compensation expense due to the stock options that were exercised as part of the merger transaction. Also during the quarter, the Company recorded an unusual non-operating charge of $8.9 million for expenses related to the January merger. See Note 4 to our consolidated financial statements.

Income Taxes. The Company’s income tax benefit for the 13 weeks ended April 2, 2005 was $15.9 million, or an effective rate of 39.0% as compared to a $4.5 million benefit, or an effective rate of 39.5% for the 13 weeks ended March 27, 2004. The effective rate is lower in 2005 due to the Company’s adoption of SFAS No. 150, whereby preferred stock interest is a permanent difference and receives no income tax benefit. For the 26 weeks ended April 2, 2005, the income tax benefit was $20.3 million, or an effective rate of 37.8% as compared to a $9.0 million benefit, or an effective rate of 39.5% for the prior year.

Adjusted EBITDA. The Adjusted EBITDA loss for the 13 weeks ended April 2, 2005 was $7.1 million compared to an Adjusted EBITDA loss of $7.2 million, for the 13 weeks ended March 27, 2004. For the 26

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weeks ended April 2, 2005, the adjusted EBITDA improved by $263,000 from an EBITDA loss of $13.8 million in the prior year.

Adjusted EBITDA is determined as follows ⁽¹⁾:

Financial Condition, Liquidity and Capital Resources

Changes in Financial Condition. Between October 2, 2004 and April 2, 2005, total current assets increased by $37.4 million primarily as the result of a $39.7 million increase in inventory during the period. Inventory normally increases during this time frame as the Company prepares for its peak selling season.

During the same period, current liabilities increased by $27.0 million due primarily to a $40.0 million increase in accounts payable partially offset by a $8.2 million decrease in income taxes payable and a $4.7 million decrease in accrued expenses. 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 $36.3 million for the 26 weeks ended April 2, 2005 compared to net cash used in operating activities of $25.2 million for the same period in the prior year. The change in the 26 weeks ended April 2, 2005 compared to the second quarter of fiscal 2004, was due primarily to an increase in inventories and accounts payable.

Capital expenditures for the 26 weeks ended April 2, 2005 were $5.3 million. We expect to incur capital expenditures between $10.0 and $13.0 million in fiscal 2005, primarily for the purpose of opening new stores. It is anticipated the balance of 2005 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 April 2, 2005 was $37.8 million compared to $24.7 million in the prior year. The increase was due to higher borrowings drawn against the Company’s revolving credit facility as compared to the prior year. 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 adoption of Statements 123(R)’s fair value method will have an impact on our results of operations, although it will have no impact on our overall financial position. The impact of adoption of Statement 123(R) cannot be predicted at this time because it will depend on levels of share-based payments granted in the future. However, had we adopted Statement 123(R) in prior periods, the impact of that standard would have approximated the impact of Statement 123 as described in Note 5 to our consolidated financial statements. Statement 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature.

On January 25, 2005, Leslie’s completed a recapitalization. The recapitalization was effected through a merger transaction that was financed by a private placement of new notes and borrowings under an amended credit facility. The Company sold, through a private placement exempt from the registration requirements under the Securities Act, $170 million in aggregate principal amount of its 7.75% Senior Notes due 2013 (the “Notes”). The Notes were sold in the United States only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons in accordance with Regulation S under the Securities Act. The Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Leslie’s used the net proceeds of this offering to finance the Merger and to consummate the tender offer for its 10.375% Senior Notes due 2008.

On January 25, 2005, the Company entered into the Loan Agreement with the lenders noted therein and Wells Fargo Retail Finance LLC as agent for the Lenders. The Loan Agreement provides for the extension by the Lenders of revolving loans and other financial accommodations to Leslie’s and LPM Manufacturing, Inc. in an aggregate principal amount not to exceed $105.0 million, such amount to be reduced after July 1, 2005 as set forth in the Loan Agreement. The Loan Agreement contains customary representations and warranties, covenants, conditions to borrowing and will require the maintenance of certain quarterly financial and operating ratios and covenants, including minimum EBITDA levels, fixed charged coverage ratio, and senior leverage ratio.

Contractual Obligations and Commercial Commitments

The following table summarizes the Company’s significant contractual obligations as of April 2, 2005, and the effect such obligations are expected to have on our liquidity and cash flows in future periods. This table excludes amounts already recorded on our balance sheet as current liabilities at April 2, 2005 and certain other purchase obligations as discussed below.

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Purchase orders for raw materials, finished goods and other goods and services are not included in the above table. We are not able to determine the aggregate amount of such purchase orders that represent contractual obligations, as purchase orders may represent authorizations to purchase rather than binding agreements. For the purpose of this table, contractual obligations for purchase of goods or services are defined as agreements that are enforceable and legally binding on us and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Our purchase orders are based on our current manufacturing needs and are fulfilled by our vendors with relatively short timetables. We do not have significant agreements for the purchase of raw materials or finished goods specifying minimum quantities or set prices that exceed our short-term expected requirements.

The expected timing of payment of the obligations discussed above is estimated based on current information. Timing of payments and actual amounts paid may be different depending on the time of receipt of goods or services or changes to agreed-upon amounts for some obligations.

As part of the recapitalization, we incurred new contractual obligations under the indenture governing the notes and a management services agreement with Leonard Green & Partners, L.P. (“LGP”). Following the recapitalization, we expect our interest expense to increase as a result of the higher level of indebtedness and our selling, general and administrative expenses to increase as a result of the increased management fees payable to LGP.

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.

Inventories are stated at the lower of cost or market. The Company values inventory using the weighted average method. 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. Included in cost of sales are the costs of services and purchased goods, chemical repackaging costs and related distribution costs. The

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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.

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 $2.0 million outstanding under this facility.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15 (e) and 15d-15 (e) under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective such that the material information relating to Leslie’s including our consolidated subsidiaries, required to be disclosed in our Securities and Exchange Commission (“SEC”) reports is recorded, processed, accumulated, summarized and reported within the time periods specified in SEC rules and forms, and was communicated to our principal executive officer and principal accounting officer during the period when this report was being prepared to allow timely decisions regarding required disclosure.

In addition, there were no changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation. We have not identified any significant deficiencies or material weaknesses in our internal controls, and therefore there were no corrective actions taken.

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PART II. OTHER INFORMATION

We are and may continue to be a party to various lawsuits and arbitrations from time to time. As of April 2, 2005, we were not a party to any legal proceedings that we believe are likely to have a material effect on our business.

On January 25, 2005, pursuant to an Agreement and Plan of Merger between Leslie’s and LPM Acquisition LLC (“LPM”), LPM was merged with and into Leslie’s, with Leslie’s continuing as the surviving entity in the merger (the “Merger”). Immediately prior to the consummation of the Merger, GCP California Fund, L.P. (“GCP”) and certain other Leslie’s stockholders contributed all or a portion of their existing Leslie’s common stock to LPM, and GCP and others contributed $51.1 million to LPM, in exchange for common and preferred units of LPM which were subsequently converted into 40,000,000 shares of common stock and 41,000 shares of preferred stock of Leslie’s.

In the Merger, each of Leslie’s existing shares of common stock (other than those that were contributed to LPM) were exchanged for $15.00 cash consideration, and each of Leslie’s 46.4 million shares of preferred stock were exchanged for $64.5 million, which was the amount payable under the optional redemption provisions of the preferred stock as if it had been redeemed on the closing date of the Merger.

The newly issues 40,000,000 shares of Leslie’s common stock and 41,000 shares of Leslie’s preferred stock are exempt from registration under Rule 506 of the Securities Act. The shares of Leslie’s common stock and preferred stock were issued to no more than 35 non-accredited investors. Such non-accredited investors were represented by a purchaser representative. The issuance of shares of Leslie’s common and preferred stock was not accomplished through a general advertising or solicitation and we exercised reasonable care to ensure that the purchasers of the securities were not statutory underwriters.

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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.

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