S&P revises Leslie's Poolmart to positive

Standard & Poor's said it revised its outlook on Leslie's Poolmart Inc. to positive from stable and affirmed its ratings on the company, including the B corporate credit rating, B+ senior secured bank loan rating, and B- senior unsecured debt.

S&P said the revised outlook reflects Leslie's improved operating performance over the past three years through better shrink control, inventory management, and customer service.

A ratings upgrade could be considered over the next two years if the company is able to continue to improve credit measures and effectively manage the seasonal nature of the business, the agency said.

The ratings reflect Phoenix-based Leslie's Poolmart's small sales and earnings base, as well as the highly seasonal nature of its business, which can be affected by unfavorable weather. These risks are somewhat offset by the company's leading position in the stable retail pool-supply industry and its improved operating performance over the past three years.

The company's total debt to EBITDA declined to the high 2x area in 2003, compared with greater than 6x in 2000. EBITDA coverage of interest was 2.7x in 2003, compared with 1.3x in 2000.

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