EX-99.1 2 p17070exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(PETSMART LOGO)
CONTACT:
PetSmart Investor Relations
(623) 587-2025
PetSmart Reports Results for the Fourth Quarter and Fiscal Year 2009
Q4 Earnings of $0.61 per Share; Comp Sales Growth of 1.5 Percent; Total Sales Growth of 3.4
Percent; FY09 Earnings of $1.59; Comp Sales Growth of 1.6 Percent; Total Sales Growth of 5.4
Percent
PHOENIX, AZ—(March 3, 2010) — PetSmart, Inc. (NASDAQ: PETM) today reported financial results for the fourth quarter and fiscal year 2009, and provided guidance for 2010.
For the quarter, the company delivered earnings per share of $0.61 and comparable store sales growth of 1.5 percent. Total sales for the quarter were $1.41 billion, up 3.4 percent, including a favorable impact from foreign currency fluctuations of $10.0 million. Services sales, which are included in total sales, increased 8.3 percent to $141.6 million.
For the year, the company delivered earnings per share of $1.59 compared to $1.52 last year. Total sales were $5.34 billion, up 5.4 percent, including an unfavorable impact from foreign currency fluctuations of $8.3 million. Comparable store sales grew 1.6 percent and services sales increased 9.2 percent to $575 million.
During the year, the company generated $567 million in operating cash flow and spent $113 million in capital expenditures. In addition, the company repurchased $165 million of PetSmart stock during 2009, with $80 million repurchased during the fourth quarter. The company also distributed $32 million in dividends during 2009, ending the year with $357 million in cash, cash equivalents and restricted cash and zero borrowings on our credit facility.
“We are pleased to report our results for the fourth quarter, with solid earnings and positive comparable store sales. Improvements in traffic, as well as a strong holiday performance led to better results than expected for the quarter,” said Bob Moran, Chief Executive Officer and President. “I’m proud of the hard work our associates deliver each and every day, and as a result I believe we are better positioned for the future than we ever have been before.”
2010 Annual Guidance:
“For 2010, we remain cautiously optimistic about the economic climate. While challenges remain in the macro economy, we continue to focus on those things we can control,” said Chip Molloy, Senior Vice President and Chief Financial Officer. “For all of 2010, we anticipate low single-digit sales comps, total sales growth in the low to mid single digit range and services sales growth of low to mid single digits. We expect earnings per share between $1.73 to $1.83. During the year we expect to spend $125 million to $135 million on capital expenditure projects including growing our square footage 3 percent to 3.5 percent. For the first quarter of 2010, we are expecting comparable store sales of low single digits and earnings per share of $0.40 to $0.44.”
Conference call information
PetSmart management has scheduled a teleconference for 4:30 p.m. EST today to discuss results for the fourth quarter and fiscal year 2009. This teleconference will be webcast live for all investors at www.petm.com or www.streetevents.com. The webcast will be available until the company announces

 


 

results for the first quarter of 2010. In addition, you can listen to the call live by dialing 866-814-8449 (within the United States and Canada) or 703-639-1368 (for international callers), code 1434382.
A phone replay will be available through April 4, 2010, 11:59 p.m. EDT, at 888-266-2081 in the United States and Canada, or at 703-925-2533 for international callers, code 1434382.
About PetSmart
PetSmart, Inc. is the largest specialty pet retailer of services and solutions for the lifetime needs of pets. The company operates more than 1,149 pet stores in the United States and Canada, 162 in-store PetSmart PetsHotel® cat and dog boarding facilities, and is a leading online provider of pet supplies and pet care information (www.petsmart.com). PetSmart provides a broad range of competitively priced pet food and pet products; and offers complete pet training, pet grooming, pet boarding, Doggie Day Camp(SM) pet day care services and pet adoption services. Since 1994, PetSmart Charities, Inc., an independent 501(c)(3) non-profit animal welfare organization, has funded more than $109 million in grants and programs benefiting animal welfare organizations and, through its in-store pet adoption programs, has helped save the lives of more than 4 million pets.
Forward-looking statements
This news release contains forward-looking statements concerning our expectations for future performance, including the statements comprising our 2010 guidance. These “forward-looking statements” are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward-looking statements. Such risks and uncertainties include, but are not limited to: changes in general economic conditions; conditions affecting customer transactions and average ticket including, but not limited to, weather conditions or other seasonal events; our ability to compete effectively; disruption of our supply chain; our ability to effectively manage our growth and operations; changes in our cost structure; and changes in the legal or regulatory environment. Undue reliance should not be placed on such forward-looking statements as they speak only as of the date hereof, and we undertake no obligation to update these statements to reflect subsequent events or circumstances except as may be required by law. For additional information on these and other factors that arise when investing in PetSmart, please see our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K.
Follow PetSmart on Twitter www.twitter.com/PetSmartTLC
Find PetSmart on Facebook www.facebook.com/PetSmart

 


 

PetSmart, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations

(in thousands, except per share and store data)
(Unaudited)
                                                                     
      Thirteen Weeks Ended     Thirteen Weeks Ended     Fifty-Two Weeks Ended     Fifty-Two Weeks Ended    
      January 31,     % of     February 1,     % of     January 31,     % of     February 1,     % of    
      2010     Sales     2009     Sales     2010     Sales     2009     Sales    
 
 
                                                                 
 
Merchandise sales
  $ 1,264,044       89.9 %   $ 1,228,542       90.4 %   $ 4,761,039       89.2 %   $ 4,538,563       89.6 %  
 
Services sales
    141,639       10.1 %     130,728       9.6 %     575,353       10.8 %     526,730       10.4 %  
                     
 
Net sales
    1,405,683       100.0 %     1,359,270       100.0 %     5,336,392       100.0 %     5,065,293       100.0 %  
                     
 
Cost of merchandise sales
    885,643       63.0 %     849,039       62.5 %     3,402,021       63.8 %     3,184,819       62.9 %  
 
Cost of services sales
    103,663       7.4 %     95,268       7.0 %     415,154       7.8 %     385,041       7.6 %  
                     
 
Total cost of sales
    989,306       70.4 %     944,307       69.5 %     3,817,175       71.5 %     3,569,860       70.5 %  
                     
 
Gross profit
    416,377       29.6 %     414,963       30.5 %     1,519,217       28.5 %     1,495,433       29.5 %  
 
 
                                                                 
 
Operating, general and administrative expenses
    282,236       20.1 %     272,902       20.1 %     1,150,138       21.6 %     1,125,579       22.2 %  
                     
 
Operating income
    134,141       9.5 %     142,061       10.5 %     369,079       6.9 %     369,854       7.3 %  
 
 
                                                                 
 
Interest expense, net
    (14,773 )     -1.1 %     (15,035 )     -1.1 %     (59,748 )     -1.1 %     (58,757 )     -1.2 %  
                     
 
Income before income tax expense and equity in income from investee
    119,368       8.5 %     127,026       9.3 %     309,331       5.8 %     311,097       6.1 %  
 
 
                                                                 
 
Income tax expense
    (45,960 )     -3.3 %     (48,334 )     -3.6 %     (117,554 )     -2.2 %     (121,019 )     -2.4 %  
 
Equity in income from investee
    1,621       0.1 %     (304 )     0.0 %     6,548       0.1 %     2,592       0.1 %  
                     
 
Net income
  $ 75,029       5.3 %   $ 78,388       5.8 %   $ 198,325       3.7 %   $ 192,670       3.8 %  
                     
 
 
                                                                 
 
Earnings per common share:
                                                                 
 
Basic
  $ 0.63             $ 0.63             $ 1.62             $ 1.55            
 
 
                                                         
 
Diluted
  $ 0.61             $ 0.62             $ 1.59             $ 1.52            
 
 
                                                         
 
 
                                                                 
 
Weighted average shares outstanding:
                                                                 
 
Basic
    119,962               124,444               122,363               124,342            
 
Diluted
    122,658               126,783               124,701               126,751            
 
 
                                                                 
     
 
Stores open at beginning of each period
    1,149               1,107               1,112               1,008            
 
Stores opened during each period
    2               8               45               112            
 
Stores closed during each period
    (2 )             (3 )             (8 )             (8 )          
 
Stores open at end of each period
    1,149               1,112               1,149               1,112            
     

 


 

PetSmart, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets

(In thousands, except par value)
Unaudited
                 
    January 31,     February 1,  
    2010     2009  
 
               
Assets
               
Cash and cash equivalents
  $ 308,360     $ 126,314  
Restricted cash
    48,172        
Receivables, net
    52,232       48,609  
Merchandise inventories
    563,389       584,011  
Deferred income taxes
    36,805       28,223  
Prepaid expenses and other current assets
    57,652       87,677  
 
           
 
               
Total current assets
    1,066,610       874,834  
 
               
Property and equipment, net
    1,201,857       1,302,245  
Equity investment in affiliate
    32,486       25,938  
Deferred income taxes
    94,901       93,128  
Goodwill
    42,200       38,645  
Other noncurrent assets
    23,932       22,863  
 
           
 
               
Total assets
  $ 2,461,986     $ 2,357,653  
 
           
 
               
Liabilities and Stockholders’ Equity
               
Accounts payable and bank overdraft
  $ 212,121     $ 194,630  
Accrued payroll, bonus and employee benefits
    105,162       88,337  
Accrued occupancy expenses and deferred rents
    63,142       55,642  
Current maturities of capital lease obligations
    37,839       32,233  
Other current liabilities
    146,965       107,315  
 
           
Total current liabilities
    565,229       478,157  
 
               
Capital lease obligations
    533,635       553,760  
Deferred rents
    91,030       92,155  
Other noncurrent liabilities
    99,377       89,445  
 
           
 
               
Total liabilities
    1,289,271       1,213,517  
 
           
 
               
Stockholders’ Equity:
               
Preferred stock; $.0001 par value
           
Common stock; $.0001 par value
    16       16  
Additional paid-in capital
    1,148,228       1,117,557  
Retained earnings
    1,093,708       936,100  
Accumulated other comprehensive income (loss)
    2,369       (2,714 )
Treasury stock
    (1,071,606 )     (906,823 )
 
           
 
               
Total stockholders’ equity
    1,172,715       1,144,136  
 
           
 
               
Total liabilities and stockholders’ equity
  $ 2,461,986     $ 2,357,653