FORM 10-Q/A
Amendment No. 1
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended November 2, 1996
OR
( ) 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: 0-23574
PETCO ANIMAL SUPPLIES, INC.
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Delaware 33-0479906
9125 Rehco Road
San Diego, CA 92121
(619) 453-7845
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by
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 the number of shares outstanding of each of the registrant's classes
of common stock, as
of the latest practicable date.
Title Date Outstanding
Common Stock, $.0001 Par Value December 10, 1996 16,555,221
PETCO Animal Supplies Inc.
Index
Part I Financial Information Page
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Item 1. Consolidated Financial Statements
Consolidated Balance Sheets at February 3, 1996
and November 2, 1996 3
Consolidated Statements of Operations for the thirteen and
thirty-nine weeks ended October 28, 1995 and November 2, 1996 4
Consolidated Statement of Stockholders' Equity for
the thirty-nine weeks ended November 2, 1996 5
Consolidated Statements of Cash Flows for the
thirty-nine weeks ended October 28, 1995 and November 2, 1996 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
</TABLE>
PETCO ANIMAL SUPPLIES, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except shares)
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February 3, November 2,
1996 1996
ASSETS
Current assets:
Cash and cash equivalents $ 10,637 $ 42,927
Receivables 4,560 6,741
Inventories 45,756 63,288
Other current assets 718 2,290
Total current assets 61,671 115,246
Fixed assets, net 58,060 84,369
Goodwill 31,767 37,418
Deferred tax assets 10,521 12,777
Other assets 1,467 2,419
$163,486 $252,229
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 25,774 $ 29,524
Accrued expenses 12,581 16,780
Accrued salaries and employee benefits 5,194 6,332
Revolving credit facility -- --
Current portion of capital lease and
other obligations 2,758 4,006
Total current liabilities 46,307 56,642
Capital lease and other obligations,
excluding current portion 11,524 14,152
Accrued store closing costs 4,804 7,496
Deferred rent 3,462 2,624
Stockholders' equity:
Preferred stock, $.0001 par value,
2,000,000 shares authorized, no shares
issued and outstanding -- --
Common stock, $.0001 par value, 100,000,000
shares authorized, 13,612,826 and
16,550,406 shares issued and outstanding,
respectively 1 2
Additional paid-in capital 131,714 210,817
Accumulated deficit (34,326) (39,504)
Total stockholders' equity 97,389 171,315
Commitments and contingencies
$163,486 $252,229
See accompanying notes to consolidated financial statements
</TABLE>
PETCO ANIMAL SUPPLIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share data)
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Thirteen weeks ended Thirty-nine weeks ended
October 28, November 2, October 28, November 2,
1995 1996 1995 1996
Net sales $ 71,080 $ 107,908 $ 195,523 $ 307,692
Cost of sales and
occupancy costs 58,016 79,320 152,473 228,786
Gross profit 13,064 28,588 43,050 78,906
Selling, general, and
administrative expenses 24,229 23,366 50,128 66,629
Merger and nonrecurring
charges -- 2,949 -- 17,894
Operating income (loss) (11,165) 2,273 (7,078) (5,617)
Interest income, net 233 280 311 163
Earnings (loss) before
income taxes (10,932) 2,553 (6,767) (5,454)
Income taxes (benefits) (13,287) 1,226 (12,110) (1,045)
Net earnings (loss) $ 2,355 $ 1,327 $ 5,343 $ (4,409)
Net earnings (loss) per common
and common equivalent share $ 0.17 $ 0.08 $ 0.43 $ (0.28)
Weighted average number of
common and common equivalent
shares outstanding 13,612,051 16,549,500 12,320,692 15,586,805
See accompanying notes to consolidated financial statements
</TABLE>
PETCO ANIMAL SUPPLIES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(unaudited, in thousands, except share data)
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Common Stock
Additional Total
Paid-in Accumulated Stockholders'
Shares Amount Capital Deficit Equity
Balances at
February 3, 1996 13,612,826 $ 1 $131,714 $ (34,326) $ 97,389
Sale of common stock 2,892,758 1 78,633 -- 78,634
Exercise of options 44,304 -- 458 -- 458
Issuance of stock
for services 687 -- 17 -- 17
Retirement of stock (169) -- (5) -- (5)
Distributions to
shareholders -- -- -- (769) (769)
Net loss -- -- -- (4,409) (4,409)
Balances at
November 2, 1996 16,550,406 $ 2 $210,817 $ (39,504) $171,315
See accompanying notes to consolidated financial statements
</TABLE>
PETCO ANIMAL SUPPLIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
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Thirty-nine weeks ended
October 28, November 2,
1995 1996
Cash flows from operating activities:
Net earnings $ 5,343 $ (4,409)
Depreciation and amortization 5,335 9,977
Deferred taxes (12,945) (2,256)
Changes in assets and liabilities:
Receivables (596) (2,181)
Inventories (7,183) (17,532)
Other current assets 352 (1,572)
Other assets 840 (952)
Accounts payable 2,142 3,750
Accrued expenses 1,860 4,199
Accrued salaries and employee benefits (9) 1,138
Accrued store closing costs 3,634 2,692
Deferred rent 650 (838)
Net cash used in operating activities (577) (7,984)
Cash flows from investing activities:
Additions to fixed assets (21,644) (28,795)
Net cash invested in acquisitions of businesses (4,115) (7,598)
Net cash used in investing activities (25,759) (36,393)
Cash flows from financing activities:
Repayment of capital lease and other obligations (387) (1,668)
Proceeds from the issuance of common stock 47,214 79,104
Distributions to shareholders (193) (769)
Net cash provided by financing activities 46,634 76,667
Net increase in cash and cash equivalents 20,298 32,290
Cash and cash equivalents at beginning of year 7,339 10,637
Cash and cash equivalents at end of period $ 27,637 $ 42,927
</TABLE>
See accompanying notes to consolidated financial statements
PETCO ANIMAL SUPPLIES, INC.
Notes to Consolidated Financial Statements
Note 1 - General
In the opinion of management of Petco Animal Supplies, Inc. (the "Company"),
the
unaudited consolidated financial statements contain all adjustments, consisting
of normal recurring adjustments, necessary to present the financial position,
results of operations and cash flows as of and for the periods ended October
28,
1995, and November 2, 1996. Because of the seasonal nature of the Company's
business, the results of operations for the thirteen and thirty-nine weeks
ended
October 28, 1995 and November 2, 1996, are not necessarily indicative of the
results to be expected for the full year. For further information, refer to
the
consolidated financial statements and footnotes thereto for the fiscal year
ended
February 3, 1996 included in the Company's Form 10-K Annual Report (File No. 0-
23574) filed with the Securities and Exchange Commission (the "Commission") on
April 27, 1996 and subsequently restated to reflect the merger with Pet Nosh
which was accounted for as a pooling of interests, in the Company's
Registration
Statement on Form S-4 (Registration No. 333-14699) filed with the Commission on
October 23, 1996, as amended by Amendment No. 1 filed with the Commission on
November 20, 1996.
Note 2 - Acquisitions
In March 1996, the Company assumed lease obligations and purchased all tangible
personal property and inventory used in connection with eight pet food and
supply
stores located in Maryland and Virginia and operated under the trade name P.T.
Moran ("P.T. Moran"). The transaction was accounted for as a purchase with the
fair market value of assets acquired of $7.6 million and the excess of the cost
over the fair market value of net assets recorded as goodwill and amortized
over
fifteen years. The consolidated financial statements include the operating
results from the closing date.
In July 1996, the Company acquired all of the outstanding equity securities
of a
retailer with eight pet food and supply stores located in New York, New Jersey
and Connecticut and operated under the trade name Pet Nosh ("Pet Nosh") for an
aggregate consideration of 645,553 shares of common stock. The transaction was
accounted for as a pooling of interests.
In October 1996, the Company acquired all of the outstanding equity securities
of
a retailer with four pet food and supply stores located in Colorado operated
under the trade name PETS USA ("PETS USA") for an aggregate consideration of
231,153 shares of common stock. The transaction was accounted for as a pooling
of interests.
All prior period financial statements presented have been restated to reflect
the
acquisitions accounted for as a pooling of interests. A reconciliation of the
results of the previously separate companies prior to the business combinations
accounted for as pooling of interests and amounts previously reported follows
(in
thousands):
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Acquired
PETCO Companies Combined
Thirteen weeks ended October 28, 1995
Net sales $ 64,366 $ 6,714 $ 71,080
Net earnings (loss) 2,277 78 2,355
Thirteen weeks ended November 2, 1996
Net sales 105,624 2,284 107,908
Net earnings (loss) 1,240 87 1,327
Thirty-nine weeks ended October 28, 1995
Net sales 176,454 19,069 195,523
Net earnings (loss) 4,972 371 5,343
Thirty-nine weeks ended November 2, 1996
Net sales 285,729 21,963 307,692
Net earnings (loss) (4,438) 29 (4,409)
</TABLE>
Prior to the acquisitions, Pet Nosh and PETS USA each used a December 31 fiscal
year end while the Company's fiscal year ends on the Saturday nearest
January 31.
The restated financial statements combine historical financial statements of
the
Company for the fiscal year ended February 3, 1996, with the historical
financial
statements of Pet Nosh and PETS USA for the fiscal year ended December 31,
1995.
Accordingly, the second quarter ended August 3, 1996 consisted of thirteen
weeks
of operating results of the Company and four months of operating results of Pet
Nosh, and, the third quarter ended November 2, 1996 consisted of thirteen weeks
of operating results of the Company and four months of operating results of
PETS
USA. The effects of the changes in reporting periods for the acquired
companies
accounted for as poolings of interest are included in the preceding table
and are
not material to the consolidated financial statements.
Distributions to shareholders reflected in the accompanying Consolidated
Statement of Stockholders' Equity are related to activities of acquired
businesses.
As a result of the acquisition of P.T. Moran, Pet Nosh and leases for four
former
Herman's Sporting Goods locations, the Company recorded merger and nonrecurring
charges of $14.9 million during the thirteen weeks ended August 3, 1996 and,
as a
result of the acquisition of PETS USA, merger and nonrecurring charges of $2.9
million were recorded during the thirteen weeks ended November 2, 1996. These
charges include transaction costs, costs attributable to lease cancellation and
closure of duplicate or inadequate facilities, facility conversion costs,
cancellation of certain contractual obligations and other integration costs.
The Company entered into an Agreement and Plan of Merger ("Merger Agreement")
dated October 3, 1996 with Pet Food Warehouse, Inc. ("Pet Food Warehouse").
The
Boards of Directors of the Company and Pet Food Warehouse have approved the
Merger Agreement. Under the terms of the Merger Agreement, each outstanding
share of Pet Food Warehouse common stock will be converted into the right to
receive a fraction of a share of the Company's common stock according to an
exchange ratio defined in the Merger Agreement. The transaction is intended to
qualify as a tax free reorganization and pooling of interests for accounting
purposes. The transaction is subject to approval by the Pet Food Warehouse
shareholders and is anticipated to close on or about December 31, 1996.
Note 3 - Net Earnings (Loss) Per Share
Net earnings (loss) per common and common equivalent share are computed by
dividing net earnings (loss) by the weighted average number of common and
common
equivalent shares outstanding during the period.
For the thirteen and thirty-nine weeks ended October 28, 1995 and November 2,
1996, common equivalent shares were not included as their effects would not be
materially dilutive.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results
of Operations
General
The Company currently utilizes both superstore and traditional store formats
and
follows a strategy of converting and expanding its store base from a
traditional
store format to a superstore format. As a result of this strategy, the Company
has opened and acquired superstores, has expanded, remodeled, and relocated
traditional stores into superstores, collectively referred to as conversions,
and
has closed underperforming stores. At November 2, 1996, the Company operated
287
stores, including 222 superstores, in sixteen states and the District of
Columbia. At October 28, 1995, the Company operated 239 stores, of which 156
were superstores.
As a result of the Company's plan to open approximately 90 to 100 superstores
this year, including acquisitions and conversions of existing traditional
stores
into superstore formats, the Company anticipates certain costs to increase as a
percentage of sales in the near term. In addition, the timing of new
superstore
openings and related preopening expenses and the amount of revenue contributed
by
new and existing superstores may cause the Company's quarterly results of
operations to fluctuate. The Company expects continued downward pressure on
its
gross profit as a percentage of sales from higher occupancy costs in new stores
and increased competitive pressures in certain markets. This trend should be
offset, however, by increased sales from maturing stores and the benefit of
expanded merchandise assortments in existing stores. Increased payroll,
advertising and other store level expenses as a percentage of sales in new
stores
should also contribute to lower store operating margins. In addition, the
Company charges preopening costs associated with each new superstore to
earnings
as incurred. Therefore, the Company expects that the opening of a large number
of new superstores in a given quarter may adversely impact its quarterly
results
of operations for that quarter.
The Company acquired eight P.T. Moran stores in March 1996, eight Pet Nosh
stores
in July 1996, and four PETS USA stores in October 1996. The Company is in the
process of integrating the merchandise mix, and operating and marketing
philosophies into the Company format of superstores. Although the Company does
not expect the results of the P.T. Moran, Pet Nosh, and PETS USA stores to be
dilutive on its fiscal 1996 operating results, there can be no assurances these
stores can achieve their anticipated profitability.
The Company's business is also subject to some seasonal fluctuations.
Historically, the Company has realized a higher portion of its net sales during
the fourth quarter and a lower portion of its net sales in the third quarter.
Results of Operations
Third Quarter 1996 Compared to Third Quarter 1995
Net sales increased 51.8% to $107.9 million for the thirteen weeks ended
November
2, 1996, ("third quarter 1996") from $71.1 million for the thirteen weeks ended
October 28, 1995, ("third quarter 1995"). The increase in net sales in third
quarter 1996 resulted primarily from the addition of 72 superstores, including
the conversion of 20 traditional stores into superstores, and partially offset
by the closing of nine stores in the past year, and a comparable store net
sales
increase of 17.0%. The comparable store net sales increase was attributable to
maturing superstores, more effective marketing efforts and expanded merchandise
assortments in existing stores. The net increase in the Company's store base
accounted for approximately $26.2 million, or 71.2% of the net sales increase,
and $10.6 million, or 28.8% of the net sales increase, was attributable to the
increase in comparable store net sales.
Gross profit, defined as net sales less cost of sales including occupancy
costs,
more than doubled to $28.6 million in third quarter 1996 from $13.1 million in
third quarter 1995. Cost of sales and occupancy costs in the third quarter
1995
included charges of $4.3 million arising from the writedown of fixed assets and
related costs with respect to the Company's central distribution facility.
Excluding these charges, gross profit increased $11.2 million, or 64.4%, in
third
quarter 1996. As a percentage of sales, gross profit, on a comparable basis,
increased to 26.5% in third quarter 1996 from 24.5% in third quarter 1995. This
increase reflects a better sales mix, increased occupancy leverage and lower
distribution expenses related to more efficient operation of the Company's
central distribution facility during the current period.
Selling, general and administrative expenses decreased $0.8 million to $23.4
million in third quarter 1996 from $24.2 million in the same period last year.
Selling, general and administrative expenses in the third quarter 1995 included
charges of $9.2 million related to acquisition activities. Excluding these
charges, selling, general and administrative expenses increased $8.4 million,
or
56.0%, in third quarter 1996. Selling, general and administrative expenses
increased primarily as a result of higher personnel and related costs
associated
with new store openings and acquisitions. As a percentage of net sales, on a
comparable basis, these expenses increased to 21.7% in third quarter 1996 from
21.1% in third quarter 1995 primarily due to increased amortization expense
from
goodwill.
Merger and nonrecurring charges of $2.9 million were recorded in third quarter
1996 following the acquisition of PETS USA.
Operating income in third quarter 1996 was $2.3 million compared to an
operating
loss of $11.2 million in third quarter 1995 which included $13.5 million in
charges related to acquisition and warehousing activities. Operating income,
excluding these charges and merger and nonrecurring charges, on a comparable
basis, more than doubled to $5.2 million in third quarter 1996 from $2.3
million
in third quarter 1995 and increased as a percentage of net sales to 4.8% in
third
quarter 1996 from 3.2% in third quarter 1995.
Net interest income was $0.3 million in third quarter 1996 and $0.2 million in
third quarter 1995.
Income taxes were $1.2 million in third quarter 1996, compared to income tax
benefits of $13.3 million in third quarter 1995. Income tax benefits in the
prior year primarily related to recognition of deferred tax assets and the
benefit of the loss before income taxes for the third quarter 1995.
Net earnings were $1.3 million for the third quarter 1996 compared with $2.4
million for the same period last year. Net earnings, excluding merger and
nonrecurring adjustments and related tax benefits, on a comparable basis, more
than doubled to $3.3 million, or $0.20 per share, for the third quarter 1996
compared to $1.6 million, or $0.12 per share, for the third quarter 1995.
Thirty-nine Weeks Ended November 2, 1996 Compared to Thirty-nine Weeks Ended
October 28, 1995
Net sales increased 57.4% to $307.7 million for the thirty-nine weeks ended
November 2, 1996 from $195.5 million for the thirty-nine weeks ended October
28,
1995. The increase in net sales resulted primarily from the addition of 72
superstores, including the conversion of 20 traditional stores into
superstores,
and partially offset by the closing of nine stores in the past year, and a
comparable store net sales increase of 17.8%. The comparable store net sales
increase was attributable to maturing superstores, more effective marketing
efforts and expanded merchandise assortments in existing stores. The net
increase in the Company's store base accounted for approximately $81.7 million,
or 72.8% of the net sales increase, and $30.5 million, or 27.2% of the net
sales
increase, was attributable to the increase in comparable store net sales.
Gross profit increased $35.8 million, or 83.1%, to $78.9 million for the thirty-
nine weeks ended November 2, 1996 from $43.1 million for the same period last
year. Excluding charges of $4.3 million arising from the writedown of fixed
assets and related costs with respect to the Company's central distribution
facility in the third quarter 1995, gross profit, on a comparable basis,
increased $31.5 million, or 66.5%, for the thirty-nine weeks ended November 2,
1996 from the same period in 1995. As a percentage of net sales, gross profit,
on a comparable basis, increased to 25.6% for the thirty-nine weeks ended
November 2, 1996 from 24.2% for the same period last year. This increase
reflects a better sales mix, increased occupancy leverage and lower
distribution
expenses related to the more efficient operation of the Company's central
distribution facility during the current period.
Selling, general and administrative expenses increased $16.5 million, or 32.9%,
to $66.6 million for the thirty-nine weeks ended November 2, 1996 compared to
$50.1 million for the same period last year. Selling, general and
administrative
expenses for the thirty-nine weeks ended October 28, 1995 included charges of
$9.2 million related to acquisition activities. Excluding these charges,
selling, general and administrative expenses increased $25.7 million, or 62.8%,
for the thirty-nine weeks ended November 2, 1996. Selling, general and
administrative expenses increased primarily as a result of higher personnel and
related costs associated with new store openings and acquisitions. As a
percentage of net sales, on a comparable basis, these expenses increased to
21.6%
for the thirty-nine weeks ended November 2, 1996 from 20.9% for the same period
last year primarily due to increased amortization expense from goodwill.
Merger and nonrecurring charges of $17.9 million were recorded in the
thirty-nine
weeks ended November 2, 1996 following the acquisition of P.T. Moran, Pet Nosh,
PETS USA and the four former Herman's Sporting Goods locations.
Operating loss of $5.6 million was incurred in the thirty-nine weeks ended
November 2, 1996, reflecting $17.9 million in merger and nonrecurring charges,
compared to operating loss of $7.1 million in the prior year, reflecting $13.5
million in warehousing and acquisition charges. Operating income, excluding
the
merger and nonrecurring charges, on a comparable basis, increased to $12.3
million for the thirty-nine weeks ended November 2, 1996 from $6.4 million for
the same period last year. Operating income as a percentage of net sales, on a
comparable basis, increased to 4.0% for the thirty-nine weeks ended November 2,
1996 from 3.3% for the same period last year.
Net interest income was $0.2 million for the thirty-nine weeks ended
November 2,
1996 compared to net interest income of $0.3 million for the same period last
year.
Income tax benefits were $1.0 million in the thirty-nine weeks ended
November 2,
1996 compared to income tax benefits of $12.1 million in the prior year.
Income
tax benefits in the prior year primarily related to the recognition of deferred
tax assets and the benefit of the loss before incomes taxes for the third
quarter
1995.
Net loss of $4.4 million was incurred for the thirty-nine weeks ended
November 2,
1996, reflecting the merger and nonrecurring adjustments and related income tax
benefits, compared to net earnings of $5.3 million for the same period of the
prior year. Net earnings, excluding merger and nonrecurring adjustments and
related tax benefits, on a comparable basis, increased 73.8% to $7.3 million,
or
$0.47 per share, for the thirty-nine weeks ended November 2, 1996 compared to
net
earnings of $4.2 million, or $0.34 per share, for the thirty-nine weeks ended
October 28, 1995.
Liquidity and Capital Resources
The Company has financed its operations and expansion program through internal
cash flow, external borrowings and the sale of equity securities. At
November 2,
1996, total assets were $252.2 million, of which $115.2 million were current
assets. Net cash used in operating activities was $8.0 million for the thirty-
nine weeks ended November 2, 1996 and $0.6 million for the same period of the
prior year. The Company's sales are substantially on a cash basis, therefore
cash flow generated from operating stores provides a source of liquidity to the
Company. The principal use of operating cash is for the purchase of
merchandise
inventories. A portion of the Company's inventory purchases is financed
through
vendor credit terms.
The Company uses cash in investing activities to acquire stores, purchase fixed
assets for new and converted stores and, to a lesser extent, to purchase
warehouse and office fixtures, equipment and computer hardware and software in
support of its distribution and administrative functions. During the
thirty-nine
weeks ended November 2, 1996 the Company acquired three retailers of
pet food and
supplies and during the thirty-nine weeks ended October 28, 1995 the Company
acquired four retailers of pet food and supplies. Net cash of $7.6 million and
$4.1 million, respectively, was invested in the acquisitions of these
businesses.
Cash used in investing activities was $36.4 million for the thirty-nine weeks
ended November 2, 1996 and $25.8 million for the same period of the prior year.
The Company also finances some of its purchases of equipment and fixtures
through
capital leases and other obligations. Purchases of $5.5 million and $3.0
million
of fixed assets were financed in this manner during the thirty-nine weeks ended
November 2, 1996 and October 28, 1995, respectively. The Company believes that
additional sources of capital lease and other financing are available on a cost-
effective basis and plans to use them, as necessary, in connection with its
expansion program.
The Company's primary long-term capital requirement is funding for the
opening or
acquisition of superstores and the conversion of traditional stores into
superstores. During the thirty-nine weeks ended November 2, 1996 and October
28,
1995, net proceeds of $78.6 million and $46.9 million, respectively, were
obtained from public offerings of common stock to provide funds for the
Company's
expansion program, the acquisition of related businesses and for working
capital
requirements.
The Company has a revolving credit facility with a commitment of up to $25.0
million which expires June 2, 1997. Borrowings under this facility are
unsecured
and bear interest, at the Company's option, at either the bank's reference rate
or LIBOR plus 1.0%. At November 2, 1996 the Company had no outstanding
borrowings under this facility. The revolving credit facility contains certain
affirmative and negative covenants related to working capital, net worth,
leverage, profitability, capital expenditures and payment of cash dividends.
As of February 3, 1996, the Company had available net operating loss
carryforwards of $8.5 million for federal income tax purposes, which begin
expiring in 2004, and $1.8 million for California income tax purposes, which
begin expiring in 1996.
The Company anticipates that available cash and cash equivalents as well
as funds
available under the revolving credit facility, funds generated by operations,
currently available vendor financing, and capital lease and other
financing will
be sufficient to finance its continued operations and planned store
openings for
at the least the next twelve months.
Certain Cautionary Statements
Certain statements in this Quarterly Report on Form 10-Q that are not
historical
fact constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may
cause
the actual results of the Company to be materially different from historical
results or from any results expressed or implied by such forward-looking
statements. These factors are discussed under the caption "Certain Cautionary
Statements" in the Company's Annual Report on Form 10-K for the year ended
February 3, 1996.
Part II. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
1. Exhibits
(a) 27.1 Financial Data Schedule (filed electronically only)
2. Reports on Form 8-K
(a) The Company filed no reports on Form 8-K during the thirteen weeks
ended November 2, 1996.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PETCO ANIMAL SUPPLIES, INC.
By: /s/ James M. Myers
James M. Myers
Senior Vice President Finance
and Chief Accounting Officer
Date: February 4, 1997
