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Equity-Based Compensation | 9 Months Ended
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Jun. 29, 2024
Share-Based Payment Arrangement [Abstract] |
Equity-Based Compensation | Note 13—Equity-Based Compensation Equity-Based Compensation 2020 Omnibus Incentive Plan In October 2020, we adopted the Leslie’s, Inc. 2020 Omnibus Incentive Plan (the “Plan”). The Plan was most recently amended and restated in March 2024. The Plan provides for the grant of awards such as non-qualified stock options to purchase Leslie’s common stock (each, a “Stock Option”), restricted stock units (“RSUs”) and performance stock units (“PSUs”) which may settle in Leslie’s, Inc. common stock to our directors, executives, and eligible employees of the Company. T he vesting of the Company’s outstanding and unvested Stock Options, RSUs, and PSUs is contingent upon each holder’s continued service through the date of each applicable vesting event. On March 15, 2024 the Company’s shareholders approved an amendment to the Plan increasing the shares of common stock available for future grants by 7.2 million shares. As of June 29, 2024, we had approximately 14.4 million shares of common stock available for future grants under the Plan. As of June 29, 2024, the aggregate unamortized value of all outstanding equity-based compensation awards was approximate ly $18.6 million, which is expected to be recognized over a weighted average perio d of approximately 2.5 years. Stock Options Stock Options granted under the Plan generally expire ten years from the date of grant and consist of Stock Options that vest upon the satisfaction of time-based requirements. The following tables summarizes our Stock Option activity under the Plan during the nine months ended June 29, 2024 (in thousands, except per share amounts):
|  | Number of Options |  |  | Weighted Average Exercise Price |
Outstanding, Beginning as of October 1, 2023 |  |  | 3,308 |  |  | $ | 18.10 |
Granted |  |  | — |  |  |  | — |
Exercised |  |  | — |  |  |  | — |
Forfeited/Expired |  |  | (1,165 | ) |  |  | 17.76 |
Balance, Ending as of June 29, 2024 |  |  | 2,143 |  |  | $ | 18.29 |
Vested and exercisable as of June 29, 2024 |  |  | 1,689 |  |  | $ | 18.31 |
|  | As of June 29, 2024 |
Aggregate intrinsic value of options outstanding |  | $ | — |
Unamortized value of unvested stock options |  | $ | 1,060 |
Weighted average years that expense is expected to be recognized |  |  | 0.5 |
Weighted average remaining contractual years outstanding |  |  | 6.8 |
Restricted Stock Units and Performance Units RSUs represent grants that vest ratably upon the satisfaction of time-based requirements. PSUs represent grants potentially issuable in the future based upon the Company’s achievement of certain performance conditions. The fair value of our RSUs and PSUs are calculated based on the Company’s stock price on the date of the grant. The following table summarizes our RSU and PSU activity under the Plan during the nine months ended June 29, 2024 (in thousands, except per share amounts):
|  | Number of RSUs/PSUs |  |  | Weighted Average Grant Date Fair Value |
Outstanding, Beginning as of October 1, 2023 |  |  | 2,084 |  |  | $ | 11.92 |
Granted |  |  | 2,086 |  |  |  | 5.45 |
Vested |  |  | (727 | ) |  |  | 9.23 |
Forfeited |  |  | (467 | ) |  |  | 10.90 |
Balance, Ending June 29, 2024 |  |  | 2,976 |  |  | $ | 8.20 |
During the nine months ended June 29, 2024, 0.4 million PSUs were granted subject to the Company achieving certain adjusted net income and sales performance targets on a cumulative basis during fiscal years 2024 and 2025. The criteria are based on a range of these performance targets in which participants may earn between 0% to 200% of the base number of awards granted. The weighted average grant date fair value of the PSUs was $5.43. The Company assesses the attainment of target payout rates each reporting period. Equity-based compensation expense is recognized for awards deemed probable of vesting. In December 2022, the Company granted 0.3 million PSUs subject to the Company achieving certain adjusted net income and sales performance targets on a cumulative basis during each of the fiscal years 2023, 2024, and 2025. The criteria are based on a range of these performance targets in which participants may earn between 0% to 200% of the base number of awards granted. As of June 29, 2024, the performance targets had not been met for the PSUs to vest, and no PSUs had vested as of such date.
|  | As of June 29, 2024 |
Unamortized value of unvested RSUs/PSUs |  | $ | 17,548 |
Weighted average period (years) expense is expected to be recognized |  |  | 2.6 |
During the three months ended June 29, 2024 and July 1, 2023, equity-based compensation expense w as $2.2 million and $2.6 million, respectively. During the nine months ended June 29, 2024 and July 1, 2023, equity-based compensation expense was $7.6 million and $9.2 million, respectively. Equity-based compensation expense is reported in selling, general, & administrative expenses (“SG&A”) in our condensed consolidated statements of operations.

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