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 ~~June~~December 3027, ~~2007~~2008

¨	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~~ Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such 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 a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller business reporting company. See definition of “accelerated filer”, ~~and~~ “large accelerated filer,” and “smaller business reporting company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

Large ~~accelerated filer~~ Accelerated Filer ¨ Accelerated ~~filer~~ Filer ¨ Non-~~accelerated~~Accelerated ~~filer~~ Filer x Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)~~. Yes ¨ No x~~

~~The~~Yes ~~number~~¨ ofNo ~~shares~~x ~~of the registrant’s Common Stock outstanding at August 13, 2007 was 100 shares.~~

The number of shares of common stock outstanding as of February 9, 2009 was 100.

LESLIE’S POOLMART, INC.

AND SUBSIDIARIES

(A Wholly-Owned Subsidiary of Leslie’s Holdings, Inc.)

FORM 10-Q

For the Quarterly Period Ended ~~June~~December 3027, ~~2007~~2008

INDEX

	~~Page~~	Page
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 2007 (unaudited) and September 30, 2006	3
Consolidated Balance Sheets as of December 27, 2008 (unaudited) and September 27, 2008		3
Consolidated Statements of Operations for the 13 weeks and 39 weeks ended June 30, 2007 (unaudited) and July 1, 2006 (unaudited)	4
Consolidated Statements of Operations for the 13 weeks ended December 27, 2008 (unaudited) and December 29, 2007 (unaudited)		4
Consolidated Statements of Cash Flows for the 39 weeks ended June 30, 2007 (unaudited) and July 1, 2006 (unaudited)	5
Consolidated Statements of Cash Flows for the 13 weeks ended December 27, 2008 (unaudited) and December 29, 2007 (unaudited)		5
Notes to Consolidated Financial Statements (unaudited)	6	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	9	9
Item 3. Quantitative and Qualitative Disclosures about Market Risk	12	12
Item 4. Controls and Procedures	12	12
Part II. Other Information
Item 1. Legal Proceedings	13	13
Item 1A. Risk Factors	13	13
Item 2. Unregistered Sales of Securities and Use of Proceeds	13	13
Item 5. Other Information	13	13
Item 6. Exhibits	14	14
Signatures	15	15

PART I—FINANCIAL INFORMATION

Item 1.

Financial Statements

Leslie’s Poolmart, Inc.

(A Wholly-Owned Subsidiary of Leslie’s Holdings, Inc.)

Consolidated Balance Sheets

(Amounts in thousands, except share information)

	June 30, 2007			September 30, 2006
	December 27,2008			September 27,2008
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	616,~~114~~343		$	3945,~~004~~648
Accounts and other receivables, net		13,515			7,315
Short term investments		10,000			19,899
Inventories		86,400			64,544
Accounts and other receivables, net		7,018			11,796
Prepaid expenses and other current assets		2,569			2,522
Inventories, net		93,625			86,584
Deferred tax assets		8,201			8,201
Prepaid expenses and other current assets		2,819			2,773
Total current assets		171,799			121,586
Deferred tax assets		10,493			4,554
Property, plant and equipment, net		39,505			38,136
Total current assets		130,298			171,254
Intangible assets		8,055			8,072
Property, plant and equipment, net		39,873			42,074
Deferred financing costs, net		5,679			6,168
Intangible assets		8,099			8,117
Deferred tax assets		4,445			4,445
Deferred financing costs, net		4,269			4,613
Other assets		340			320
Deferred tax assets		6,513			6,593
Total assets	$	229,823		$	178,727
Other assets		348			342
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Total assets	$	189,400		$	232,993
LIABILITIES AND STOCKHOLDER’S DEFICIT
Current liabilities:
Accounts payable	$	5322,~~613~~599		$	3142,~~473~~117
Accrued expenses		4131,397			3536,~~860~~981
Income taxes payable		~~13,766~~—			117,~~040~~697
Total current liabilities		~~108~~53,~~776~~996			7886,~~373~~795
Other long term liabilities		65,~~073~~876			127,~~632~~556
Redeemable preferred stock, $0.001 par value; authorized 1,000,000 shares, issued and outstanding no shares at June 30, 2007 and 41,000 shares of Series A at September 30, 2006		—			41,000
Senior notes, net		163,123			167,000
Senior notes, net		169,045			168,946
Total liabilities		222,995			261,351
Total liabilities		283,894			300,951
Commitments and contingencies
Stockholders’ deficit:
Stockholder’s deficit:
Common stock, $0.001 par value, authorized 50,000,000 shares, issued and outstanding 100 shares at June 30, 2007 and 40,045,000 shares at September 30, 2006		—			40
Common stock, $0.001 par value, authorized 100 shares, issued and outstanding 100 shares at December 27, 2008 and at September 27, 2008		—			—
Paid-in deficit		(91,984	)		(144,081	)
Capital deficit		(91,873	)		(91,907	)
Treasury stock, no shares at June 30, 2007 and 90,000 shares at September 30, 2006		—			(332	)
Retained earnings		58,278			63,549
Retained earnings		37,913			22,149
Total stockholder’s deficit		(33,595	)		(28,358	)
Total stockholders’ deficit		(54,071	)		(122,224	)
Total liabilities and stockholder’s deficit	$	189,400		$	232,993
Total liabilities and stockholders’ deficit	$	229,823		$	178,727

See accompanying notes to consolidated financial statements.

Leslie’s Poolmart, Inc.

Consolidated Statements of Operations (unaudited)

(A Wholly-Owned Subsidiary of Leslie’s Holdings, Inc.)

(Amounts in thousands)

	13 Weeks Ended						~~39 Weeks Ended~~
	June 30,2007			July 1,2006			June 30,2007			July 1,2006
	December 27,2008			December 29,2007
	(unaudited)			(unaudited)			~~(unaudited)~~			~~(unaudited)~~
Sales	$	~~204~~60,~~816~~263		$	~~198~~58,~~114~~306		$	~~314,904~~		$	~~294,611~~
Cost of merchandise sold and services sold, including warehousing and transportation expenses		~~100~~29,~~282~~642			9929,~~678~~839			~~155,111~~			~~147,948~~
Gross profit		~~104~~30,~~534~~621			9828,~~436~~467			~~159,793~~			~~146,663~~
Selling, general and administrative expenses		5038,~~216~~380			4936,~~801~~422			~~121,083~~			~~115,381~~
Operating income		54,318			48,635			38,710			31,282
Loss on disposition of fixed assets		51			10
Other expenses/(income):
Operating loss		(7,810	)		(7,965	)
Interest expense		3,378			4,970			12,656			15,216
Other expenses (income):
Interest income		(302	)		(66	)		(645	)		(139	)
Interest expense		3,454			3,633
Other expense		(379	)		(203	)		(294	)		(10	)
Interest income		(215	)		(702	)
Total other expense		2,697			4,701			11,717			15,067
Gain on debt extinguishment		(359	)		—
Earnings before income taxes		51,621			43,934			26,993			16,215
Total other expense, net		2,880			2,931
Income tax expense		21,499			20,869			11,229			7,702
Loss before income taxes		(10,690	)		(10,896	)
Net income	$	30,122		$	23,065		$	15,764		$	8,513
Income tax benefit		(5,419	)		(4,024	)
Net loss	$	(5,271	)	$	(6,872	)

See accompanying notes to consolidated financial statements.

Leslie’s Poolmart, Inc.

Consolidated Statements of Cash Flows (unaudited)

(A Wholly-Owned Subsidiary of Leslie’s Holdings, Inc.)

(Amounts in thousands)

	39 Weeks Ended
	13 Weeks Ended
	June 30, 2007			July 1, 2006
	December 27,2008			December 29,2007
	(unaudited)			(unaudited)
Operating activities:
Net income	$	15,764		$	8,513
Net loss	$	(5,271	)	$	(6,872	)
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		93,~~392~~269			83,~~976~~258
Preferred stock dividend and accretion		1,886			3,373
Stock compensation		34			13
Amortization of loan fees and discounts		~~588~~397			~~826~~274
Allowance for doubtful accounts		~~167~~50			~~149~~25
Gain on disposition of assets		(294	)		(10	)
Loss on disposition of assets		51			10
Deferred income taxes		—			731
Gain on debt extinguishment		(359	)		—
Deferred income taxes		(5,859	)		(1,285	)
Changes in operating assets and liabilities:
Accounts and other receivables		(64,~~367~~728	)		12,~~354~~729
Inventories		(217,~~856~~041	)		(228,~~601~~696	)
Prepaid expenses and other current assets		(4746	)		(~~1,581~~333	)
Other assets		(206	)		~~149~~16
Accounts payable and accrued expenses		28(26,~~537~~782	)		42(4,~~806~~747	)
Income taxes payable		2(7,~~726~~697	)		4(9,~~191~~283	)
Net cash provided by operating activities		30,476			46,876
Net cash used in operating activities		(44,532	)		(24,891	)
Investing activities:
Purchase of property, equipment and intangibles		(10,938	)		(8,402	)
Sale of short term investments		9,899			—
Proceeds from dispositions of property		488			229
Purchase of property, equipment and intangibles		(1,101	)		(777	)
Net cash used in investing activities		(10,450	)		(8,173	)
Net cash provided by/(used in) investing activities		8,798			(777	)
Financing activities:
Net line of credit borrowings		—			(7,104	)
Repurchase of long-term debt		(3,571	)		—
Excess tax benefits from stock-based compensation		2,084			—
Net cash used in financing activities		(3,571	)		—
Proceeds from issuance of common and treasury stock, net of fees		—			200
Net decrease in cash and cash equivalents		(39,305	)		(25,668	)
Purchase of treasury stock		—			(229	)
Cash and cash equivalents at beginning of period		45,648			59,781
Net cash provided by/(used in) financing activities		2,084			(7,133	)
Cash and cash equivalents at end of period	$	6,343		$	34,113
Net increase in cash and cash equivalents		22,110			31,570
Cash and cash equivalents at beginning of period		39,004			2,172
Cash and cash equivalents at end of period	$	61,114		$	33,742

See accompanying notes to consolidated financial statements.

Leslie’s Poolmart, Inc.

(A Wholly-Owned Subsidiary of Leslie’s Holdings, Inc.)

Notes to Consolidated Financial Statements (unaudited)

(1) Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in conformity with United States generally accepted accounting principles applicable to 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 13-week ~~and~~period ~~39-week periods~~ ended ~~June~~December 3027, ~~2007~~2008 are not necessarily indicative of the results that may be expected for the 53-week year ending ~~September~~October 293, ~~2007~~2009.

The balance sheet at September 3027, ~~2006~~2008 has been derived from the audited 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 Notes thereto included in Leslie’s Poolmart, Inc.’s Annual Report on Form 10-K for the year ended September 3027, ~~2006~~2008.

(2) 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 ~~577~~601 stores in 35 states, a nationwide mail order catalog, and web store. The Company also operates five distribution facilities and 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 third and fourth fiscal quarters.

The Company became a wholly-owned subsidiary of Leslie’s Holdings, Inc (“Holdings”) during February 2007, inpursuant ~~conjunction~~to ~~with~~ a tax-free reorganization toin which the Company’s ~~stockholders~~shareholders became shareholders of Holdings in the same proportions (the “2007 Reorganization”). As a result of the ~~reorganization~~2007 Reorganization, each share of outstanding common stock of the Company was ~~exchanged~~converted ~~for~~into one share of common stock of Holdings, and each share of outstanding 10% senior redeemable exchangeable cumulative preferred stock of the Company was ~~exchanged~~effectively ~~for~~assumed ~~one~~by ~~share of 10% senior redeemable exchangeable cumulative preferred stock of~~ Holdings ~~with the same rights, privileges,~~ and ~~preferences~~extinguished, ~~including~~with asit ~~to liquidation.~~being ~~The exchange of the 10% senior redeemable exchangeable cumulative preferred stock of the Company for similar stock of Holdings was~~ accounted for as contributed capital to the Company~~, given that the assumption of the obligation by Holdings without recourse to the Company had the effect of extinguishing the rights of the preferred stockholders and the resulting obligation~~.

(3) Stock-based Compensation

~~Effective~~As ~~October 1,~~the ~~2006,~~Company is a nonpublic company under the ~~Company~~provisions ~~adopted~~of Statement of Financial Accounting Standards (“SFAS”) No. ~~123~~123R ~~(revised 2004),~~ “Share-Based Payment” (“SFAS ~~No.~~ 123R”), ~~which~~we ~~replaces~~were ~~SFAS~~required ~~123,~~to ~~“Accounting~~adopt ~~for~~SFAS ~~Stock-Based Compensation” and supersedes APB Opinion~~ No. ~~25,~~123R ~~“Accounting~~using ~~for~~the ~~Stock~~prospective ~~Issued~~method towhich ~~Employees”.~~requires ~~SFAS~~the ~~123R~~Company ~~requires~~to ~~all~~apply ~~share-based~~the ~~payments, including~~provisions ~~grants~~ of ~~employee~~SFAS ~~stock~~123R prospectively ~~options~~to ~~and~~new ~~nonvested~~awards ~~shares,~~and to beawards ~~recognized~~modified, inrepurchased ~~the~~or ~~financial~~cancelled ~~statements~~after ~~based~~September 30, ~~on their fair values at date of grant~~2006. ~~Under~~Awards ~~SFAS~~granted ~~No.~~after September ~~123R~~30, ~~companies~~2006 are ~~required~~valued toat ~~measure~~fair ~~the~~value ~~cost of services received~~ in ~~exchange~~ ~~for~~accordance ~~stock~~with ~~options and similar awards based on~~ the ~~grant-date~~provisions ~~fair value~~ of ~~the~~SFAS 123R ~~award~~ and torecognized ~~recognize~~on ~~this~~a straight ~~cost~~line inbasis ~~the income statement~~ over the ~~period~~service ~~during~~periods ~~which~~of aneach award. ~~recipient~~Compensation iscost ~~required to provide service in exchange~~ for the ~~award.~~ ~~The~~unvested ~~pro~~portion ~~forma~~of ~~disclosures~~awards ~~previously~~outstanding ~~permitted~~is ~~under~~recognized ~~SFAS~~as ~~No. 123~~the ~~are~~requisite noservice ~~longer~~is ~~an alternative to financial statement recognition~~rendered.

AsAll ~~the Company~~outstanding isoptions awere ~~nonpublic~~exercised ~~company~~in ~~under~~February ~~the provisions~~ of ~~SFAS~~2007 ~~No. 123R,~~after ~~we were required to adopt SFAS No. 123R using~~ the ~~prospective~~2007 ~~method~~Reorganization, which ~~requires~~gave ~~the~~rise ~~Company~~ to ~~apply~~a ~~the~~tax ~~provisions~~benefit of ~~SFAS~~approximately No$2. ~~123R~~1 ~~prospectively~~million toattributed ~~new awards and~~ to ~~awards~~the ~~modified, repurchased or cancelled after September 30, 2006~~Company. ~~Awards~~Given ~~granted~~that ~~after~~the ~~September 30,~~tax ~~2006~~benefit ~~(of~~meets ~~which there have been none to date) are valued at fair value in accordance with~~ the realization ~~provisions~~criteria of SFAS ~~No.~~ 123R, ~~and recognized~~the onbenefit ahas ~~straight~~been ~~line~~recorded ~~basis~~as ~~over~~a ~~the~~credit ~~service~~to ~~periods~~equity ofsince ~~each~~the ~~award.~~entire ~~Compensation~~benefit ~~cost~~exceeded ~~for~~ the ~~unvested~~recorded ~~portion~~expense of ~~awards outstanding is recognized as the requisite service is rendered~~zero.

In November of 2008, the board of directors of Holdings approved grants of options to a number of key individuals of the Company. These options to purchase approximately 375,000 shares of Holdings common stock vest over a five year period at a rate of 20% annually on each anniversary of the date of grant. At December 27, 2008, 809,000 options were outstanding and 73,800 of the options were vested or exercisable. No options were exercised and 4,000 options were cancelled during the 13-week period ended December 27, 2008.

Share-based compensation expense recognized in accordance with SFAS 123R during the 13-week period ended December 27, 2008 was approximately $0.05 million. As of December 27, 2008, total unrecognized compensation cost related to stock-based options and awards was $0.8 million and the related weighted-average period over which it is expected to be recognized is approximately 4.3 years. The weighted average fair value of stock option awards granted was $1.14 and the key assumptions used in the Black-Scholes valuation model to calculate the fair value are as follows: a risk free interest rate of 3.07%; an expected life of the options of 5 years; an expected stock price volatility of 46.7% and an expected dividend yield of 0%. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly

~~Leslie~~ subjective assumptions, including the expected stock price volatility. Because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s ~~Poolmart~~opinion, ~~Inc~~the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. The risk-free interest rate is based on the U.S. treasury security rate in effect as of the date of grant. The expected lives of options are based on historical data of the Company. The Company calculated expected volatility based on historical volatility.

(A Wholly-Owned Subsidiary of Leslie’s Holdings, Inc.)

Notes to Consolidated Financial Statements (unaudited)

As of the reorganization, all contractual rights and obligations relating to the Leslie’s 2005 Stock Option Plan and related Option Agreements and Notices of Option Grants were adopted by Holdings and deemed to apply to Holdings common stock. During the second quarter of 2007, Holdings’ Board of Directors accelerated the vesting of all outstanding stock options to purchase shares of common stock of Holdings. The fair value of the awards immediately before the modification of the vesting was the same value as the fair value after the modification took effect. Accordingly, no compensation expense was recorded under SFAS No. 123R for 2007. All of the options were exercised in February of 2007 after the transfer to Holdings which gave rise to a tax benefit of approximately $2.1 million attributed to the Company. Given that the tax benefit meets the realization criteria of SFAS 123(R), the benefit has been recorded as a credit to equity since the entire benefit exceeded the recorded expense of zero. The Company did not otherwise grant or modify any share-based compensation during the 39 weeks ended June 30, 2007. As of June 30, 2007 the Company has no outstanding equity awards to its employees either directly or through grants by Holdings that would be attributable to the Company’s employees and thereby accounted for as an expense of the Company.

(4) Taxation of the Company and Holdings

The Company and its subsidiaries will be included in the consolidated Federal income tax return and certain state income tax returns of Holdings. The Company’s financial statements recognize the current and deferred income tax consequences that result from the Company’s activities during the current and preceding periods pursuant to the provisions of SFAS No. 109 “Accounting for Income Taxes” (“SFAS 109”), as if the Company were a separate taxpayer rather than a member of Holding’s consolidated income tax return group. This policy requires us to pay our tax liabilities to Holdings in cash, based upon separate return taxable income.

(5) ~~Inventories~~Income Taxes

Income tax benefit was $5.4 million and $4.0 million for the three month periods ended December 27, 2008 and December 29, 2007, respectively. The Company’s consolidated effective tax rate for the three month period ended December 27, 2008 was 50.7% due to the $1.2 million benefit recorded as a result of a reduction in estimated taxes payable based upon information received during this quarter which indicated the amount would not be payable.

The gross amount of unrecognized tax benefits at December 27, 2008 was $0.2 million. The gross amount of unrecognized tax benefits as a result of tax positions taken during prior years decreased by $1.2 million during the three months ended December 27, 2008. The total amount of the unrecognized tax benefits that, if recognized, would affect the effective rate is $0.01 million as of December 27, 2008. The Company had approximately $30,000 and $210,000 for payment of accrued interest and penalties at December 27, 2008 and September 27, 2008, respectively.

As of September 27, 2008, all of the federal income tax returns filed since 2006 are still subject to adjustment upon audit. The Company also files income tax returns in many states, and these returns remain open for adjustments to its federal income tax returns. In addition, certain state income tax returns filed within the past four years are still open for state specific adjustments.

(6) Inventories

Inventories consist of the following:

Amounts in thousands	June 30,2007		September 30 2006
(Dollar amounts in thousands)	December 27,2008		September 27,2008
Raw materials and supplies	$	19,~~358~~882	$	14,~~116~~579
Finished goods		8583,~~042~~743		6382,~~428~~005
Total Inventories	$	86,400	$	64,544
Total inventories	$	93,625	$	86,584

(67) ~~Subsequent~~Debt ~~Events~~Retirement

OnDuring ~~July~~the 13 week quarter ended December 1627, ~~2007~~2008, the Company’s ~~board~~purchased ofand ~~directors~~retired ~~declared a cash dividend of~~ $143.9 million onof ~~the~~its ~~Company’s~~7 3/4 ~~common~~% ~~stock,~~Senior ~~par~~Notes ~~value~~due ~~$0.001~~2013 ~~per~~and ~~share,~~recognized toa ~~Leslie’s~~gain ~~Holdings,~~on ~~Inc.,~~extinguishment asof ~~its~~debt ~~sole common stockholder~~ of ~~record on~~$ ~~that date, in an aggregate amount~~0.4 ~~The cash dividend was paid on August 1, 2007~~million.

(8) Recently Issued Accounting Pronouncements

In December 2007, FASB issued SFAS No. 141 (revised), “Business Combinations” (“SFAS 141R”). SFAS 141R relates to business combinations and requires the acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. This Statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. The Company must adopt this standard for its 2010 fiscal year.

In September 2006, FASB issued SFAS No. 157, “Fair Value Measurements” (7“SFAS 157”). ~~Recently~~SFAS 157 ~~Issued~~defines ~~Accounting~~fair ~~Pronouncements~~value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. SFAS 157 is generally effective for years beginning after December 15, 2007. SFAS 157 was effective for the Company on September 28, 2008; however, in February 2008, the FASB issued FASB Staff Position (“FSP”) No. SFAS 157-2 (“FSP 157-2”), which delayed the effective date of SFAS 157 for non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis, for one year. The adoption of SFAS 157 effective September 28, 2008 with respect to the Company’s financial assets and liabilities did not have a material impact on its consolidated financial statements. The Company intends to adopt the provisions of SFAS 157 with respect to its non-financial assets and non-financial liabilities effective October 4, 2009 pursuant to the requirements of FSP 157-2, and is in the process of determining the related impact on the Company’s consolidated financial statements. Therefore, we have adopted the provisions of SFAS 157 with respect to our financial assets and liabilities only. As defined in SFAS 157, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard also establishes a fair value hierarchy that ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

InLevel ~~June~~1: ~~2006,~~Fair ~~the~~values ~~Financial~~determined ~~Accounting~~by ~~Standards~~quoted ~~Board~~prices ~~(“FASB”) issued FASB Interpretation No. 48, “Accounting for Uncertainty~~ in ~~Income~~active ~~Taxes”~~markets ~~(“FIN 48”). FIN 48 is an interpretation of FASB Statement No. 109 “Accounting~~ for ~~Income~~identical ~~Taxes”~~assets ~~and~~or ~~must~~liabilities bethat ~~adopted by~~ the Company ~~no later than September 30, 2007. FIN 48 prescribes a comprehensive model for recognizing, measuring, presenting, and~~ ~~disclosing~~has in the ~~financial~~ability ~~statements uncertain tax positions that the company has taken or expects~~ to ~~take in its tax returns~~access. ~~The Company has not evaluated the impact of adopting FIN 48.~~

InLevel ~~September~~2: ~~2006,~~Fair ~~the~~values ~~SEC~~utilize ~~released~~inputs ~~Staff~~other ~~Accounting~~than ~~Bulletin~~quoted ~~No. 108,~~prices ~~“Considering~~that ~~the~~are ~~Effects~~observable offor ~~Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). SAB 108 provides interpretive guidance on~~ the ~~SEC’s~~asset ~~views~~or ~~regarding~~liability, ~~the process of quantifying materiality of financial statement misstatements. SAB 108 is effective for fiscal~~and ~~years~~may ~~ending~~include ~~after~~quoted ~~November 15,~~prices ~~2006, with early application~~ for ~~the~~similar ~~first~~assets ~~interim~~and ~~period~~liabilities ~~ending~~in ~~after~~active ~~November 15~~markets, ~~2006.~~and ~~The~~inputs ~~Company~~other ~~does~~than ~~not~~quoted ~~believe~~prices that ~~the~~are ~~application~~observable offor ~~SAB~~the ~~108~~asset ~~will have a material effect on our results of operations~~ or ~~financial position~~liability.

InLevel ~~May 2005, the FASB issued FASB Statement No. 154, “Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20, Accounting Changes and FASB Statement No.~~ 3,: ~~Reporting~~Unobservable ~~Accounting~~inputs ~~Changes~~that inare ~~Interim~~not ~~Financial~~corroborated ~~Statements”~~by ~~(“FAS~~market ~~154”).~~data ~~FAS 154 provides guidance on the accounting for~~ and ~~reporting~~may ofreflect ~~accounting changes and error corrections. It establishes, unless impracticable, retrospective application as~~ the ~~required method for~~ reporting aentity’s ~~change~~own inassumptions ~~accounting~~market ~~principle~~participants inwould ~~the~~use ~~absence of explicit transition requirements specific to the newly adopted accounting principle. FAS 154 also provides guidance for determining whether retrospective application of a change~~ in ~~accounting~~pricing principle is impracticable and for reporting a change when retrospective application is impracticable. The provisions of FAS 154 are effective for accounting changes and corrections of errors made in fiscal periods beginning after December 15, 2005. The adoption of the ~~provisions~~asset ~~of FAS 154 is not expected to have a material impact on the Company’s financial position~~ or ~~results of operations~~liability.

Assets measured at fair value on a recurring basis at December 27, 2008 include short-term investments of $10.0 million. The fair value of short-term investments was determined using quoted prices in active markets for identical assets (Level 1). There are no other assets or liabilities carried at fair value and Level 2 and Level 3 categories were not used.

In February 2007, FASB issued SFAS No. 159, “Fair Value Option for Financial Assets and Financial Liabilities — including an amendment of FASB Statement No. 115” (“SFAS 159”), which permits entities to choose to measure many financial instruments and certain other items at fair value. If elected, SFAS 159 is effective beginning September 28, 2008. Under SFAS 159, a company may elect to use fair value to measure eligible items at specified election dates and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. Eligible items include, but are not limited to, accounts and loans receivable, available-for-sale and held-to-maturity securities, equity method investments, accounts payable, guarantees, issued debt and firm commitments. The Company elected not to measure any additional financial instruments or other items at fair value as of September 28, 2008 in accordance with SFAS 159.

(9) Subsequent Events

On January 29, 2009, the Company’s board of directors declared a cash dividend of $3.9 million on the Company’s common stock, par value $0.001 per share, to Leslie’s Holdings, Inc., as its sole common stockholder of record on that date, in an aggregate amount. The cash dividend was paid on February 2, 2009.

Leslie’s Poolmart, Inc.

(A Wholly-Owned Subsidiary of Leslie’s Holdings, 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, seasonal effects, 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 the Company’s financial condition and results of operations should be read in conjunction with its 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 Annual Report on Form 10-K for the year ended September 3027, ~~2006~~2008.

General

Leslie’s Poolmart, Inc. (the “Company” or “Leslie’s”) is the leading specialty retailer of swimming pool supplies and related products in the United States. The Company markets its products through ~~577~~601 Company-owned stores in 35 states; a nationwide mail order catalog; and the Internet. Leslie’s is vertically integrated, operating a chemical repackaging facility in Ontario, California and a specialty chemical repackaging facility in Hebron, Kentucky. The Company supplies its retail stores from distribution facilities located in Ontario, California; Dallas, Texas; Swedesboro, New Jersey; Hebron, Kentucky; and Orlando, Florida.

The Company was incorporated as a Delaware corporation in 1997 and became a wholly-owned subsidiary of Leslie’s Holdings Inc. in February 2007 through a reorganization. The Company’s principal executive offices are located at 3925 E. Broadway Road, Suite 100, Phoenix, Arizona 85040, and the telephone number at that address is (602) 366-3999. Leslie’s corporate website address is www.lesliespool.com.

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 quarters that end in June and September which represent the peak months of swimming pool use. Sales are substantially lower during the quarters that end in December and March when the Company typically incurs net losses. The principal external factor affecting the Company’s business is weather. Hot weather and the higher frequency of pool usage in such weather create a need for more pool chemicals and supplies. Unseasonably early or late warming trends can increase or decrease the length of the pool season. In addition, unseasonably cool weather and/or extraordinary amounts of rainfall in the peak season will tend to decrease swimming pool use. The likelihood that unusual weather patterns will severely impact the Company’s results is lessened by the geographical diversification of the Company’s store locations.

The Company also 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 attempts to open its new stores primarily in the quarter ending March in order to position itself for the following peak season.

Leslie’s Poolmart, Inc.

(A Wholly-Owned Subsidiary of Leslie’s Holdings, Inc.)

Results of Operations

Net Sales. Net sales for the 13 weeks ended ~~June~~December 3027, ~~2007~~2008 were $~~204~~60.83 million compared to $~~198~~58.13 million for the 13 weeks ended ~~July~~December 129, ~~2006~~2007. The 3.4% increase was due to improved comparable store sales coupled with an increase in store count, with ~~577~~601 stores in the first quarter of fiscal ~~2007~~2009 versus ~~537~~573 stores in fiscal ~~2006~~2008. During the quarter, the Company opened 18no new stores. ~~Net~~and ~~sales for the 39 weeks ended~~closed ~~June 30,~~three ~~2007 increased 6~~stores.9% ~~as compared to the 39 weeks ended July 1, 2006.~~

Comparable store sales for the 13 weeks ended ~~June~~December 3027, ~~2007~~ 2008 increased 1.51% as compared to the 13 weeks ended ~~July~~December 129, 2007. ~~2006,~~The ~~while~~ comparable store sales ~~for~~increase ~~the~~was 39primarily ~~weeks~~due ~~ended~~to ~~June 30,~~favorable ~~2007~~weather ~~increased~~conditions ~~3.2%~~during asthe ~~compared~~quarter toin California and the 39northeast ~~weeks~~regions ~~ended~~of ~~July 1,~~the ~~2006~~United States. 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 recognized 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 necessarily comparable to similarly entitled measures of other companies and may not be an appropriate measure for performance relative to other companies.

~~Gross~~Comparable ~~Profit.~~store ~~Gross~~sales ~~profit~~is ~~for~~not ~~the~~a 13recognized ~~weeks~~measure ~~ended~~of ~~June 30,~~financial ~~2007~~performance ~~was~~under ~~$104.5~~accounting ~~million~~principles ~~compared~~generally toaccepted ~~$98.4~~in ~~million for~~ the 13United ~~weeks~~States ~~ended July 1, 2006~~(“GAAP”). ~~As a~~ ~~percentage~~Comparable ofstore sales, ~~gross~~is ~~profit~~not ~~was~~calculated ~~51.0%~~in ~~for~~ the ~~third~~same ~~quarter~~manner ofby ~~fiscal~~all ~~2007~~companies ~~compared to 49.7% for the third quarter of fiscal 2006. Gross profit dollars improved primarily due to the increase in sales~~ and ~~increased~~accordingly ~~store~~is ~~count.~~not ~~For~~necessarily ~~the~~comparable ~~39 weeks ended June 30, 2007, gross profit was $159.8 million compared~~ to ~~$146.7~~similarly ~~million~~entitled ~~for~~measures ~~the 39 weeks ended July 1, 2006. As a percentage~~ of ~~sales,~~other ~~gross~~companies ~~profit~~and ~~for~~may ~~the~~not 39be ~~weeks~~an ~~was~~appropriate ~~50.7%~~measure for ~~the~~performance ~~third~~relative ~~quarter of fiscal 2007 compared~~ to ~~49.8%~~other ~~for the third quarter of fiscal 2006~~companies.

~~Operating~~Gross ~~and Administrative Expense~~Profit. ~~Operating~~Gross ~~and~~profit ~~administrative expenses~~ for the 13 weeks ended ~~June~~ December 3027, ~~2007,~~2008 ~~were~~was $5030.26 million compared to $4928.85 million for the 13 weeks ended ~~July~~December 129, ~~2006~~2007. ~~For~~As ~~the~~a 39percentage ~~weeks~~of ~~ended June 30~~sales, ~~2007,~~gross ~~operating~~profit ~~expenses~~was ~~were $121~~50.18% ~~million,~~for asthe first quarter of fiscal 2009 compared to ~~$115~~48.48% ~~million~~for in the ~~prior~~first ~~year.~~quarter ~~Operating expense~~of ~~dollars~~fiscal ~~increased~~2008. ~~during~~The ~~2007~~increase ~~due~~in ~~primarily~~gross tomargin ~~increases~~is inprimarily ~~occupancy~~attributable ~~and~~to ~~other~~the ~~related~~increase ~~costs~~in sales, ~~associated~~lower ~~with~~distribution ~~the~~expenses, ~~increased~~and ~~store~~a ~~count~~shift asin ~~compared~~sales mix to ~~the~~products ~~same~~in ~~periods~~higher ofmargin ~~fiscal 2006~~categories.

~~Operating~~Selling, ~~income~~general and administrative expenses. Selling, ~~Operating~~general ~~income~~and administrative expense for the 13 weeks ended ~~June~~December 3027, ~~2007 improved by $5.7 million~~2008, ~~from~~was $4838.64 million ~~during~~compared ~~the 13 weeks ended July 1, 2006~~ to $5436.34 million for the 13 weeks ended ~~June~~December 3029, 2007. Operating ~~results~~expense ~~improved~~dollars ~~due~~increased ~~to the increases in sales and related gross profit achieved~~ during the first quarter. ~~The~~of 2009 ~~operating~~due ~~income~~primarily ~~for~~to ~~the~~increases 39in ~~weeks~~occupancy ~~ended~~and ~~June 30,~~other ~~2007~~related ~~improved by~~costs ~~$7.4~~associated ~~million,~~with ~~from $31.3 million during~~ the 39increased ~~weeks~~store ~~ended~~count ~~July 1,~~as ~~2006~~compared to anthe ~~operating~~first ~~income~~quarter of ~~$38~~2008.7 ~~million for the 39 weeks ended June 30, 2007.~~

~~Other~~Operating ~~Income~~loss. ~~and~~Operating ~~Expense.~~loss ~~Net~~for ~~interest~~the ~~expense~~13 ~~was~~weeks ended December 27, 2008 improved by $30.12 million, ~~for~~from $8.0 million during the 13 weeks ended ~~June~~December 3029, 2007 ~~compared~~ to $47.98 million for the 13 weeks ended ~~July~~December 127, ~~2006~~2008. Operating ~~The~~results ~~decrease~~improved inprimarily ~~interest expense was~~ due to the ~~decrease~~increases in ~~average~~ ~~debt~~sales ~~balances in the year to date~~ and ~~the~~related ~~elimination~~gross ofprofit ~~interest~~achieved onduring the ~~Company’s~~quarter, ~~preferred~~offset ~~stock which was assumed~~ by ~~Holdings.~~increased ~~For~~occupancy ~~the 39 weeks ended June 30, 2007, the net interest expense was $12~~costs.0 ~~million versus $15.1 million in the prior year.~~

Other Income ~~Taxes~~and Expense. ~~The~~Net ~~Company’s~~interest ~~income~~expense ~~tax~~was ~~expense~~$3.2 million for the 13 weeks ended ~~June~~December 3027, ~~2007 was $21.5 million, or an effective~~ ~~rate~~2008 ~~of 41.6%, as~~ compared to a $202.9 million ~~provision, or an effective rate of 47.5%~~ for the 13 weeks ended ~~July~~December 129, ~~2006~~2007. The ~~effective~~increase ~~rate~~in ofnet ~~the~~interest ~~income tax~~ expense was ~~higher in third quarter 2006~~ due to ~~nondeductibility of certain elements of~~ the ~~Company’s~~reduction in interest ~~expense~~income ~~that~~earned ~~were~~on ~~present~~short-term ~~during~~investments ~~fiscal~~and ~~2006~~cash. ~~but~~Additionally, ~~were~~other ~~eliminated~~income ~~during~~and ~~February~~expense ~~2007~~includes a $0.4 ~~For~~million ~~the~~gain 39on ~~weeks~~debt ~~ended~~extinguishment ~~June 30,~~related ~~2007,~~to the ~~income~~purchase ~~tax~~and ~~expense~~retirement ~~was~~of $113.29 million, orof anthe ~~effective~~Company’s ~~rate~~7 3/4 ~~of 41.6~~ % ~~versus~~Senior ~~$7.7~~Notes ~~million,~~due or2013 ~~an effective rate of 47.5 % in the prior year.~~

~~Adjusted~~Income ~~EBITDA~~Taxes. The ~~Adjusted~~Company’s ~~EBITDA~~income tax benefit for the 13 weeks ended ~~June~~ December 3027, ~~2007~~2008 was $575.64 million, ~~compared to~~ or an ~~Adjusted~~effective ~~EBITDA~~rate of ~~$52~~50.~~0 million for the 13 weeks ended July 1~~7%, ~~2006.~~as ~~For~~compared ~~the~~to 39a ~~weeks ended June 30, 2007, Adjusted EBITDA was~~ $~~48.~~4.0 million ~~compared~~benefit, toor an ~~Adjusted~~effective ~~EBITDA~~rate of ~~$40~~36.~~3 million~~9% for the 3913 weeks ended ~~July~~December 129, ~~2006~~2007. The ~~improvement~~increase in ~~Adjusted~~effective ~~EBITDA~~rate ~~was~~is ~~primarily~~attributed ~~due~~ to the ~~increases~~$1.2 million benefit for a reduction in ~~sales~~estimated taxes ~~and~~payable ~~related~~based ~~gross~~upon ~~profit~~information ~~achieved~~received during ~~the~~this quarter which indicated the amount would not be payable.

Adjusted EBITDA. The Adjusted EBITDA loss for the 13 weeks ended December 27, 2008 was $4.5 million compared to an Adjusted EBITDA loss of $4.7 million for the 13 weeks ended December 29, 2007. The improvement in Adjusted EBITDA was primarily due to the increases in sales and related gross profit achieved during the quarter.

Leslie’s Poolmart, Inc.

(A Wholly-Owned Subsidiary of Leslie’s Holdings, Inc.)

Results of Operations (continued)

Adjusted EBITDA is determined as follows (1):

	13 Weeks Ended						~~39 Weeks Ended~~
Amounts in thousands	~~June~~December 3027,~~2007~~2008			~~July~~December 129,~~2006~~2007			~~June 30,2007~~			~~July 1,2006~~
Net income as reported	$	30,122		$	23,065		$	15,764		$	8,513
Net loss as reported	$	(5,271	)	$	(6,872	)
Depreciation		3,248			3,364			9,392			8,976
Depreciation and amortization		3,269			3,258
Interest expense, net		3,~~076~~239			42,~~904~~931			~~12,011~~			~~15,077~~
Gain on disposition of assets		(379	)		(203	)		(294	)		(10	)
Loss on disposition of assets		51			10
Income tax expense		21,499			20,869			11,229			7,702
Unusual item		(325	)		13
Unusual charges		5			—			310			—
Income tax benefit		(5,419	)		(4,024	)
Adjusted EBITDA	$	57(4,~~571~~456	)	$	51(4,~~999~~684	)	$	~~48,412~~		$	~~40,258~~

(1) Adjusted EBITDA is is defined as earnings before interest (including amortization of debt costs), taxes, depreciation, amortization, loss/(gain) on disposition of fixed assets, and unusual charges. Adjusted EBITDA is not a recognized measure of financial performance under GAAP, but is used by some investors to determine a company’s ability to service or incur indebtedness. Adjusted EBITDA is not calculated in the same manner by all companies and accordingly is not necessarily comparable to similarly 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. The Company has presented Adjusted EBITDA solely as supplemental disclosure because the Company believes it allows for a more complete analysis of results of operations and may present 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.

During the 3913 weeks between ~~October~~September 127, ~~2006~~2008 and ~~June~~December 3027, ~~2007~~2008, total current assets ~~increased~~decreased by $5041.20 million, primarily due to lower cash positions related to working capital changes. Inventories increased by $217.90 million during the period as the Company ~~opened a new store and~~ accelerated its purchases of certain products for the upcoming peak-selling season and to take advantage of available discounting. ~~The remaining increases were in the Company’s cash accounts that increased $22.1 million, principally due to higher net income.~~

During the same period, current liabilities ~~increased~~decreased by $3032.48 million due ~~primarily~~largely to the ~~increase~~decrease during the period in accounts payable of $2219.15 million which was primarily due to payments for products that were purchased in anticipation of market increases, as well as a reduction in income taxes payable of $7.7 million. Income taxes payable decreased due to the payment of income taxes during the ~~period~~quarter.

Liquidity and Capital Resources.

Net cash ~~provided~~used byin operating activities was $3044.52 million for the 3913 weeks ended ~~June~~December 3027, ~~2007~~2008 compared to net cash used in operating activities of $4624.9 million for the same 3913 week period in the prior year, primarily due to aincreased ~~lower~~purchases ~~balance~~of certain products for ~~accounts~~the ~~payable~~upcoming peak-selling season.

Capital expenditures for the 3913 weeks ended ~~June~~December 3027, ~~2007~~2008 were $101.91 million. The Company expects to incur capital expenditures between of$13.0 ~~approximately~~and $1314.5 0 million in fiscal ~~2007~~2009, primarily for the purpose of opening new stores. It is anticipated that the balance of ~~2007~~2009 capital expenditures will be funded out of cash provided by operations with some possible temporary borrowings from ~~the Company’s~~its ~~revolving~~ credit facility.

The Company had $2.1 million in cash provided by financing activities for the 39 weeks ended June 30, 2007, compared to $7.1 million in cash used in financing activities in the prior year. The increase was due to lower payments against the Company’s revolving credit facility as compared to the prior year.

Leslie’s Poolmart, Inc.

(A Wholly-Owned Subsidiary of Leslie’s Holdings, Inc.)

Financial Condition, Liquidity and Capital Resources (continued)

Cash used in financing activities for the 13 weeks ended December 27, 2008 was $3.9 million compared to no net cash used in financing activities in the prior year, as the Company purchased and retired $3.9 million of its 7 ³/4 % Senior Notes due 2013.

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.

The Company was in compliance with all debt covenants as of December 27, 2008.

Recently Issued Accounting Pronouncements

In ~~June~~December ~~2006~~2007, the Financial Accounting Standards Board (“FASB”) issued ~~FASB~~SFAS ~~Interpretation~~ No. 48141 (revised), “~~Accounting~~Business Combinations”. ~~for~~SFAS ~~Uncertainty~~No. 141 in(revised) ~~Income~~relates ~~Taxes”~~to ~~(“FIN~~business ~~48”).~~combinations ~~FIN~~and 48requires isthe ~~an interpretation~~acquirer ofto ~~FASB~~recognize ~~Statement~~the ~~No. 109~~assets ~~“Accounting~~acquired, ~~for~~the ~~Income~~liabilities ~~Taxes”~~assumed, and ~~must~~any benoncontrolling ~~adopted~~interest byin the ~~Company~~acquiree noat ~~later~~the ~~than~~acquisition ~~September 30~~date, ~~2007.~~measured at ~~FIN~~their 48fair ~~prescribes~~values aas ~~comprehensive~~of ~~model~~that ~~for~~date. ~~recognizing,~~This ~~measuring,~~Statement ~~presenting,~~applies ~~and disclosing~~prospectively into business combinations for which the ~~financial~~acquisition ~~statements~~date ~~uncertain~~is ~~tax~~on ~~positions~~or ~~that~~after the ~~company~~beginning ~~has~~of ~~taken~~the first annual reporting period beginning on or ~~expects~~after toDecember 15, ~~take~~2008. inAn entity ~~its~~may ~~tax~~not ~~returns~~apply it before that date. The Company ~~has~~must ~~not~~adopt ~~evaluated~~this ~~the~~standard ~~impact~~for ofits ~~adopting~~2010 ~~FIN~~fiscal 48year.

In September 2006, the SEC released Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). SAB 108 provides interpretive guidance on the SEC’s views regarding the process of quantifying materiality of financial statement misstatements. SAB 108 is effective for fiscal years ending after November 15, 2006, with early application for the first interim period ending after November 15, 2006. We do not believe that the application of SAB 108 will have a material effect on our results of operations or financial position.

In May 2005, the FASB issued FASB Statement No. 154, “Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20, Accounting Changes and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements” (“FAS 154”). FAS 154 provides guidance on the accounting for and reporting of accounting changes and error corrections. It establishes, unless impracticable, retrospective application as the required method for reporting a change in accounting principle in the absence of explicit transition requirements specific to the newly adopted accounting principle. FAS 154 also provides guidance for determining whether retrospective application of a change in accounting principle is impracticable and for reporting a change when retrospective application is impracticable. The provisions of FAS 154 are effective for accounting changes and corrections of errors made in fiscal periods beginning after December 15, 2005. The adoption of the provisions of FAS 154 is not expected to have a material impact on the Company’s financial position or results of operations.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

The Company’s Amended Loan and Security Agreement carries interest rate risk as described in the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 3027, ~~2006~~2008. Amounts borrowed under this Agreement bear interest at either LIBOR plus 1.75%, 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. As of ~~June~~December 3027, ~~2007~~2008, the Company had no borrowings outstanding under this facility.

Item 4.

Controls and Procedures

Under the supervision and with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer, the Company conducted an evaluation of the effectiveness of the design and operation of the Company’s 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 (the “Evaluation Date”). Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded as of the Evaluation Date that the Company’s disclosure controls and procedures were effective such that the material information relating to Leslie’s, including the Company’s consolidated subsidiaries, required to be disclosed in the Company’s Securities and Exchange Commission (“SEC”) reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and was made known to the Company’s 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 the Company’s internal control over financial reporting during the quarter ended ~~March~~December 3127, ~~2007~~2008 or in other factors that has materially affected, or is likely to materially affect the Company’s internal control over financial reporting. The Company has not identified any significant deficiencies or material weaknesses in the Company’s internal control over financial reporting, and therefore there were no corrective actions taken.

Leslie’s Poolmart, Inc.

(A Wholly-Owned Subsidiary of Leslie’s Holdings, Inc.)

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

The Company is routinely involved in legal proceedings involving claims related to the ordinary course of its business. The Company is currently not party to any legal proceedings that it considers to be material.

Item 1A.

Risk Factors

Certain factors exist which may affect Leslie’s business and could cause actual results to differ materially from those expressed in any forward-looking statements. The Company has not experienced any material changes from those risk factors as previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended September 3027, ~~2006~~2008.

Item 2.

Unregistered Sales of Securities and Use of Proceeds

None.

Item 5.

Other Information

None.

Leslie’s Poolmart, Inc.

(A Wholly-Owned Subsidiary of Leslie’s Holdings, Inc.)

Item 6.

Exhibits

Exhibit Number		Description
10.1		Employment Agreement of Michael L. Hatch (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K as filed on June 15, 2007, File No. 000-18741).
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 and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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
		Lawrence H. Hayward Chief Executive Officer Date: February 9, 2009
		Chief Executive Officer
By:		/s/Steven L. Ortega
		Date: August 13, 2007
		Steven L. Ortega Chief Financial Officer Date: February 9, 2009
		/s/ Steven L. Ortega
		Steven L. Ortega
		Chief Financial Officer
		Date: August 13, 2007

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Filing Compare · LESLIES POOLMART INC