Item 5. Market for Registrant’s Common Equity
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
PRINCIPAL MARKET
Our common stock is listed on The Nasdaq Global Select Market under the “LESL” symbol and began “regular way” trading on The Nasdaq Global Select Market on October 29, 2020. Prior to that date, there was no public trading market for our common stock.
STOCKHOLDERS
As of November 30, 2020, there were approximately 21 stockholders of record, although there is a much larger number of beneficial holders. The actual number of stockholders is greater than the number of record holders stated above, and includes stockholders who are beneficial owners, but whose shares are held in “street name” by brokers and other nominees.
DIVIDENDS
We have never declared nor paid any cash dividends on our common stock. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not expect to pay any dividends on our common stock in the foreseeable future. Any future determination relating to our dividend policy will be made by our board of directors and will depend on a number of factors, including: our actual and projected financial condition, liquidity, and results of operations; our capital levels and needs; tax considerations; any acquisitions or potential acquisitions that we may examine; statutory and regulatory prohibitions and other limitations; the terms of any credit agreements or other borrowing arrangements that restrict the amount of cash dividends that we can pay; general economic conditions; and other factors deemed relevant by our board of directors. We are not obligated to pay dividends on our common stock.
USE OF PROCEEDS
On November 2, 2020, we completed our IPO, pursuant to which we issued and sold an aggregate of 30,000,000 shares of common stock at the IPO price of $17.00 per share. The selling shareholders in our IPO sold 16,000,000 shares of common stock (inclusive of 6,000,000 shares pursuant to the underwriters’ overallotment option) at the IPO price of $17.00 per share. The aggregate gross proceeds from our IPO to the Company were $510.0 million, and the net proceeds were $458.7 million after deducting underwriting discounts and commissions of $45.0 million and other IPO expenses of $6.3 million. Net proceeds to the selling stockholders were $272.0 million. The offer and sale of the shares of common stock in the IPO were registered pursuant to a registration statement on Form S-1 (File No. 333-249372), which the SEC declared effective on October 28, 2020. As the effective date of the registration statement on Form S-1 occurred after the end of the reporting period, the requirement to provide a description of expenses incurred and the use of proceeds between the effective date of the registration statement and the end of the reporting period does not apply. The managing underwriters for our IPO were Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, and BofA Securities, Inc.
There has been no material change in the planned use of proceeds from our IPO as described in our final prospectus dated October 28, 2020 and filed with the SEC pursuant to Rule 424(b)(4) on October 30, 2020.
31
Item 6. Selected Financial Data.
Fiscal Year Ended
October 3,
September 28,
September 29,
(dollars in thousands, except per share amounts)
2020 (1)
2019
2018
Statement of operations data:
Sales
$
1,112,229
$
928,203
$
892,600
Cost of merchandise and services sold
651,516
548,463
535,464
Gross profit
460,713
379,740
357,136
Selling, general and administrative expenses
314,338
258,152
241,669
Operating income
146,375
121,588
115,467
Other expense:
Interest expense
84,098
98,578
91,656
Other expenses, net
1,089
7,453
1,759
Total other expense
85,187
106,031
93,415
Income before taxes
61,188
15,557
22,052
Income tax expense
2,627
14,855
4,926
Net income
$
58,561
$
702
$
17,126
Per share data:
Basic and diluted
$
0.37
$
0.00
$
0.11
Balance sheet data:
Cash and cash equivalents
$
157,072
$
90,899
$
77,569
Total current assets
372,133
282,089
255,332
Total assets
746,438
479,721
453,160
Total current liabilities
258,196
165,522
137,165
Total liabilities
1,573,437
1,367,078
1,342,109
Total stockholders' deficit
(826,999
)
(887,357
)
(888,949
)
Cash flow data:
Net cash provided by operating activities
$
103,409
$
57,821
$
43,280
Net cash used in investing activities
(26,811
)
(36,996
)
(40,219
)
Net cash used in financing activities
(10,425
)
(7,495
)
(24,386
)
Other financial and operations data:
Number of new and acquired locations
10
28
38
Number of locations open at end of period
936
952
940
Comparable sales growth(2)
18.0
%
0.4
%
(1.3
)%
Adjusted EBITDA(3)
$
182,770
$
160,003
$
151,799
Adjusted EBITDA as a percentage of sales(3)
16.4
%
17.2
%
17.0
%
Adjusted net income(3)
$
64,973
$
12,765
$
22,927
Adjusted net income per share
$
0.42
$
0.08
$
0.15
(1)
Consisted of 53 weeks.
(2)
Please see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors and Measures We Use to Evaluate Our Business.”
(3)
Please see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors and Measures We Use to Evaluate Our Business” for a reconciliation from our net income to adjusted EBITDA and net income to adjusted net income.
32