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8-K - FORM 8-K - PETSMART INCd542588d8k.htm

Exhibit 99.1

 

LOGO

CONTACT:

PetSmart Investor Relations

(623) 587-2025

PetSmart Reports Results for the First Quarter 2013

Q1 Earnings up 15% to $0.98 per Share; Comp Sales of 3.5%; Total Sales up 5.0%; Comp

Transactions up 0.8%

PHOENIX, AZ—(May 22, 2013) - PetSmart, Inc. (NASDAQ: PETM) today reported earnings of $0.98 per share, up 15% compared to $0.85 per share in the first quarter of 2012. Net income totaled $102 million in the first quarter of 2013, compared to $95 million in the first quarter of 2012.

Total sales for the first quarter of 2013 increased 5.0% to $1.7 billion. The increase in net sales was partially impacted by $2 million in unfavorable foreign currency fluctuations. Comparable store sales, or sales in stores open at least a year, grew 3.5%, benefitting from comparable transactions growth of 0.8%. Services sales, which are included in total sales, grew 5.8% to $192 million.

During the first quarter, the company generated $147 million in cash flows from operating activities, spent $35 million in capital expenditures, and repurchased $180 million of PetSmart stock. The company ended the quarter with $324 million in cash, cash equivalents and restricted cash and zero borrowings on its credit facility.

“We are pleased to report another quarter of solid earnings growth,” said Bob Moran, Chairman and Chief Executive Officer. “Our focus on providing solutions for the lifetime needs of pets, has kept our pet parent customers highly engaged with our brand, resulting in positive comparable store sales growth and transaction growth.”

“As a reminder, the annual guidance for 2013 is for 52 weeks versus 53 weeks in 2012. For fiscal year 2013, we anticipate comparable store sales growth of 3% - 4%, and total sales growth of 3% - 4%. We are raising our earnings per share guidance from a previous range of $3.76 to $3.92, to our current expectations of $3.82 to $3.94,” said Chip Molloy, Executive Vice President and Chief Financial Officer. “For the second quarter of 2013, we are expecting comparable store sales growth in the 3% to 4% range, and earnings per share between $0.82 to $0.86.”

Conference call information

PetSmart management has scheduled a teleconference for 4:30 p.m. EDT on May 22, 2013 to discuss results for the first quarter 2013. This teleconference will be webcast live for all investors at www.petm.com. The webcast will be available until the company announces results for the second quarter of 2013. In addition, you can listen to the call live by dialing 866-814-1933 (within the United States and Canada) or 703-639-1365 (for international callers), code 1613971.

A phone replay will be available through June 22, 2013, 11:59 p.m. EDT, at 888-266-2081 in the United States and Canada, or at 703-925-2533 for international callers, code 1613971.

About PetSmart

PetSmart, Inc. (NASDAQ: PETM) is the largest specialty pet retailer of services and solutions for the lifetime needs of pets. The company employs approximately 52,000 associates and operates more than 1,289 pet stores in the United States, Canada and Puerto Rico, over 196 in-store PetSmart® PetsHotel® dog and cat boarding facilities, and is a leading online provider of pet supplies and pet care information (http://www.petsmart.com). PetSmart provides a broad range of competitively priced pet food and pet


products; and offers dog training, pet grooming, pet boarding, PetSmart Doggie Day CampSM day care services and pet adoption services. Through its in-store pet adoption partnership with PetSmart Charities®, PetSmart has helped save the lives of more than 5 million pets since 1994. PetSmart Charities, Inc. and PetSmart Charities of Canada, Inc. (“PetSmart Charities”) are independent, nonprofit organizations that save the lives of homeless pets and reduce shelter intake through spay/neuter efforts. In 2012, nearly 450,000 dogs and cats found homes through the organization’s adoption centers in all PetSmart stores and by sponsoring community adoption events. PetSmart Charities is the leader in granting money to help pets in need, with more than $28 million given in 2012 throughout North America.

Forward-looking statements

This news release contains forward-looking statements concerning our expectations for future performance, including the statements comprising our 2013 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.


PetSmart, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(in thousands, except per share and store data)

(Unaudited)

 

     Thirteen Weeks Ended     Thirteen Weeks Ended  
     May 5, 2013     % of Sales     April 29, 2012     % of Sales  

Merchandise sales

   $ 1,509,372        88.2   $ 1,439,559        88.3

Services sales

     191,577        11.2     181,014        11.1

Other revenue

     9,647        0.6     9,320        0.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

     1,710,596        100.0     1,629,893        100.0
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of merchandise sales

     1,037,114        60.6     994,508        61.0

Cost of services sales

     134,089        7.8     128,691        7.9

Cost of other revenue

     9,647        0.6     9,320        0.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of sales

     1,180,850        69.0     1,132,519        69.5
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     529,746        31.0     497,374        30.5

Operating, general and administrative expenses

     362,228        21.2     343,023        21.0
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     167,518        9.8     154,351        9.5

Interest expense, net

     (13,168     -0.8     (14,129     -0.9
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax expense and equity income from Banfield

     154,350        9.0     140,222        8.6

Income tax expense

     (55,547     -3.2     (48,172     -3.0

Equity income from Banfield

     3,612        0.2     2,633        0.2
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 102,415        6.0   $ 94,683        5.8
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per common share:

        

Basic

   $ 0.99        $ 0.87     
  

 

 

     

 

 

   

Diluted

   $ 0.98        $ 0.85     
  

 

 

     

 

 

   

Weighted average shares outstanding:

        

Basic

     103,305          108,930     

Diluted

     104,583          111,030     

Stores open at beginning of each period

     1,278                1,232           

Stores opened during each period

     13          14       

Stores closed during each period

     (2             (5        


PetSmart, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except par value)

(Unaudited)

 

     May 5,
2013
    February 3,
2013
    April 29,
2012
 

Assets

    

Cash and cash equivalents

   $ 252,988      $ 335,155      $ 268,928   

Short-term investments

     7,455        9,150        22,276   

Restricted cash

     71,226        71,916        71,929   

Receivables, net

     66,272        72,198        57,346   

Merchandise inventories

     738,568        679,090        682,896   

Deferred income taxes

     62,859        62,859        51,381   

Prepaid expenses and other current assets

     81,041        86,768        81,716   
  

 

 

   

 

 

   

 

 

 

Total current assets

     1,280,409        1,317,136        1,236,472   

Property and equipment, net

     972,679        985,707        1,035,759   

Equity investment in Banfield

     28,426        39,934        26,597   

Deferred income taxes

     100,601        102,992        79,798   

Goodwill

     43,914        44,242        44,738   

Other noncurrent assets

     48,155        46,970        43,036   
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 2,474,184      $ 2,536,981      $ 2,466,400   
  

 

 

   

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

    

Accounts payable and bank overdraft

   $ 257,628      $ 202,122      $ 246,612   

Accrued payroll, bonus and employee benefits

     132,705        176,082        126,195   

Accrued occupancy expenses and deferred rents

     69,626        70,671        69,456   

Current maturities of capital lease obligations

     63,180        61,581        55,920   

Other current liabilities

     246,431        244,436        177,511   
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     769,570        754,892        675,694   

Capital lease obligations

     462,436        464,578        496,004   

Deferred rents

     71,565        73,855        79,582   

Other noncurrent liabilities

     119,352        120,064        115,644   
  

 

 

   

 

 

   

 

 

 

Total liabilities

     1,422,923        1,413,389        1,366,924   
  

 

 

   

 

 

   

 

 

 

Stockholders’ Equity:

    

Preferred stock; $.0001 par value

     —          —          —      

Common stock; $.0001 par value

     17        17        17   

Additional paid-in capital

     1,441,863        1,418,411        1,352,889   

Retained earnings

     1,913,209        1,827,996        1,586,499   

Accumulated other comprehensive income

     4,510        5,506        6,706   

Less: Treasury stock

     (2,308,338     (2,128,338     (1,846,635
  

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     1,051,261        1,123,592        1,099,476   
  

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 2,474,184      $ 2,536,981      $ 2,466,400