UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
--------------------
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended May 1, 1999
( ) 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: 000-23574
PETCO ANIMAL SUPPLIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0479906
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9125 Rehco Road, San Diego, California 92121
(Address of principal executive office) (Zip Code)
(619) 453-7845
(Registrant's telephone number, including area code)
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 of each of the registrant's classes of common
stock, as of the latest practicable date.)
Title Date Outstanding
- ----- ---- -----------
Common Stock, $0.0001 Par Value June 8, 1999 21,088,054
<PAGE>
PETCO Animal Supplies, Inc.
Form 10-Q
For the Quarter Ended May 1, 1999
Index
Part I Financial Information Page
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets at January 30, 1999
and May 1, 1999 3
Consolidated Statements of Operations for the thirteen
weeks ended May 2, 1998 and May 1, 1999 4
Consolidated Statements of Cash Flows for the thirteen
weeks ended May 2, 1998 and May 1, 1999 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk 12
Part II Other Information
Item 1. Legal Proceedings 12
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
<PAGE>
<TABLE>
PETCO ANIMAL SUPPLIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
<CAPTION>
January 30, May 1,
1999 1999
----------- -----------
<S> <C> <C>
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 2,324 $ 4,313
Receivables 7,638 9,567
Inventories 104,789 106,348
Deferred tax assets 16,769 14,671
Other 5,993 6,013
------- -------
Total current assets 137,513 140,912
Fixed assets, net 187,510 189,931
Goodwill 37,804 37,056
Deferred tax assets 9,681 9,681
Other assets 14,627 16,137
------- -------
$387,135 $393,717
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable $ 51,099 $ 45,730
Accrued expenses 23,783 23,936
Accrued salaries and employee benefits 9,792 11,889
Current portion of long-term debt 4,500 4,500
Current portion of capital lease and
other obligations 9,023 8,863
------- -------
Total current liabilities 98,197 94,918
Long-term debt, excluding current portion 65,375 74,250
Capital lease and other obligations,
excluding current portion 20,982 18,579
Accrued store closing costs 7,005 6,615
Deferred rent 11,735 11,952
Stockholders' equity:
Common stock, $0.0001 par value, 100,000
shares authorized, 21,074 and 21,074
shares issued and outstanding,
respectively 2 2
Additional paid-in capital 270,916 270,916
Accumulated deficit (87,077) (83,515)
------- -------
Total stockholders' equity 183,841 187,403
------- -------
$387,135 $393,717
======= =======
See accompanying notes to consolidated financial statements.
</TABLE>
3
<PAGE>
<TABLE>
PETCO ANIMAL SUPPLIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)
<CAPTION>
Thirteen weeks ended
-----------------------
May 2, May 1,
1998 1999
--------- ---------
<S> <C> <C>
Net sales $196,296 $229,657
Cost of sales and occupancy costs 149,620 170,535
------- -------
Gross profit 46,676 59,122
Selling, general and administrative expenses 40,629 51,310
Merger and business integration costs 6,385 --
------- -------
Operating income (loss) (338) 7,812
Interest expense, net 1,122 1,924
------- -------
Earnings (loss) before income taxes (1,460) 5,888
Income taxes (benefit) (392) 2,326
------- -------
Net earnings (loss) $ (1,068) $ 3,562
======= =======
Basic and diluted earnings (loss) per common share $ (0.05) $ 0.17
======= =======
See accompanying notes to consolidated financial statements.
</TABLE>
4
<PAGE>
<TABLE>
PETCO ANIMAL SUPPLIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
<CAPTION>
Thirteen weeks ended
------------------------
May 2, May 1,
1998 1999
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ (1,068) $ 3,562
Depreciation and amortization 6,984 9,044
Deferred tax assets (392) 2,098
Loss on retirement of fixed assets 100 --
Changes in assets and liabilities, net of effects
of purchase acquisitions:
Receivables (1,366) (1,929)
Inventories 4,055 (1,559)
Other assets (623) 379
Accounts payable (10,458) (5,369)
Accrued expenses 1,477 153
Accrued salaries and employee benefits (326) 2,097
Accrued store closing costs (609) 181
Deferred rent 414 217
------- -------
Net cash provided by (used in)
operating activities (1,812) 8,874
------- -------
Cash flows from investing activities:
Additions to fixed assets (12,762) (11,174)
Investment in limited partnership -- (1,983)
Net cash invested in acquisitions of businesses -- (40)
Change in other assets (894) --
------- -------
Net cash used in investing activities (13,656) (13,197)
------- -------
Cash flows from financing activities:
Borrowings under long-term debt agreements 17,500 10,000
Repayment of long-term debt agreements (1,125) (1,125)
Repayment of capital lease and other obligations (1,488) (2,563)
Proceeds from the issuance of common stock 131 --
Net cash provided by financing activities 15,018 6,312
------- -------
Net increase (decrease) in cash and cash equivalents (450) 1,989
Cash and cash equivalents at beginning of year 3,354 2,324
------- -------
Cash and cash equivalents at end of period $ 2,904 $ 4,313
======= =======
See accompanying notes to consolidated financial statements.
</TABLE>
5
<PAGE>
PETCO ANIMAL SUPPLIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands)
Note 1 - General
In the opinion of management of Petco Animal Supplies, Inc. (the "Company" or
"PETCO"), the unaudited consolidated financial statements presented herein
contain all adjustments, consisting of normal recurring adjustments, necessary
to present the financial position, results of operations and cash flows as of
May 1, 1999, and for the periods ended May 2, 1998 and May 1, 1999. Certain
prior year balances have been reclassified to conform to current year
presentation. Because of the seasonal nature of the Company's business, the
results of operations for the thirteen weeks ended May 2, 1998 and May 1, 1999
are not necessarily indicative of the results to be expected for the full year.
The Company's fiscal year ends on the Saturday closest to January 31, resulting
in years of either 52 or 53 weeks. All references to a fiscal year refer to the
fiscal year ending on the Saturday closest to January 31 of the following year.
For example, references to fiscal 1998 refer to the fiscal year beginning on
February 1, 1998, and ending on January 30, 1999. For further information, refer
to the consolidated financial statements and footnotes thereto for fiscal 1998
included in the Company's Form 10-K Annual Report (File No. 000-23574) filed
with the Securities and Exchange Commission on April 30, 1999.
Note 2 - Business Combinations
The Company recorded merger and business integration costs of $6,385 during the
thirteen weeks ended May 2, 1998. These costs, related to acquisitions in prior
years, include transaction costs, costs attributable to lease cancellation and
closure of duplicate or inadequate facilities and activities, facility
conversion costs, cancellation of certain contractual obligations and other
integration costs.
Note 3 - Net Earnings (Loss) Per Share
Basic net earnings (loss) per common share are computed using the weighted
average number of common shares outstanding during the period. Diluted net
earnings (loss) per common share incorporates the incremental shares issuable
upon the assumed exercise of stock options.
Net earnings (loss) and weighted average common shares used to compute net
earnings (loss) per share, basic and diluted, are presented below:
<TABLE>
<CAPTION>
Thirteen Weeks Ended
----------------------
May 2, May 1,
1998 1999
---------- ----------
<S> <C> <C>
Net earnings (loss) $ (1,068) $ 3,562
====== ======
Common shares, basic 21,072 21,074
Dilutive effect of stock options -- 67
------ ------
Common shares, diluted 21,072 21,141
====== ======
</TABLE>
Dilutive effect of stock options of 248 shares was not included in computing
diluted loss per share for the thirteen weeks ended May 2, 1998 because the
effect would have been antidilutive.
6
<PAGE>
Note 4 - Contingencies
The Company and certain of its officers have been named as defendants in several
virtually identical class action lawsuits filed in the United States District
Court for the Southern District of California between August and November, 1998.
These cases have been consolidated and will be administered as one case. The
plaintiffs purport to represent a class of all persons who purchased the
Company's common stock between January 30, 1997 and July 10, 1998. The
complaints allege that the defendants violated various federal securities laws
through material misrepresentations and omissions during the class period, and
seek unspecified monetary damages. These matters have been tendered to the
Company's insurance carrier. While the Company believes the allegations
contained in these lawsuits are without merit, the claims have not progressed
sufficiently for the Company to estimate a range of possible exposure, if any.
The Company and its officers intend to defend themselves vigorously.
The Company has been named as a defendant in a lawsuit filed by the United
States Equal Employment Opportunity Commission in the United States District
Court for the Northern District of California on June 2, 1999. The complaint
alleges that the Company violated Title VII of the Civil Rights Act of 1964, as
amended, and the Equal Pay Act, by payment of wages to employees of one sex at
rates less than the rates paid to employees of the opposite sex. The complaint
seeks unspecified monetary damages for the named employees and any other
similarly-situated employees. While the Company believes the allegations
contained in this lawsuit are without merit, the claim has not progressed
sufficiently for the Company to estimate a range of possible exposure, if any.
The Company intends to defend itself vigorously.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
PETCO is a leading specialty retailer of premium pet food and supplies. As of
May 1, 1999, the Company operated 482 stores in 37 states and the District of
Columbia. PETCO's strategy is to be the leading category-dominant national chain
of community pet food and supply superstores by offering its customers a
complete assortment of pet-related products at competitive prices, with superior
levels of customer service at convenient locations.
Results of Operations
First Quarter 1999 Compared to First Quarter 1998
Net sales increased 17.0% to $229.7 million for the thirteen weeks ended May 1,
1999 ("first quarter 1999") from $196.3 million for the thirteen weeks ended May
2, 1998 ("first quarter 1998"). The increase in net sales in first quarter 1999
resulted primarily from the comparable store net sales increase of 10.9% and the
addition of 48 superstores, partially offset by the closing of 24 stores, of
which nine were relocated. The comparable store net sales increase was
attributable to maturing superstores, increased marketing and merchandising
efforts and increased customer traffic. The increase in comparable store net
sales accounted for approximately $21.2 million, or 63.5%, of the net sales
increase. The net increase in the Company's store base accounted for
approximately $12.2 million, or 36.5%, of the net sales increase.
Gross profit, defined as net sales less cost of sales including store occupancy
costs, increased to $59.1 million in first quarter 1999 from $46.7 million in
first quarter 1998. As a percentage of sales, gross profit increased to 25.7% in
first quarter 1999 from 23.8% in first quarter 1998. Gross profit increased from
the prior year primarily through greater purchasing leverage, particularly in
acquired stores which were selling through non-continuing inventories at reduced
gross margins in prior year, and increased leverage of occupancy costs.
Selling, general and administrative expenses increased to $51.3 million in first
quarter 1999 from $40.6 million in first quarter 1998. As a percentage of net
sales, these expenses increased to 22.3% in first quarter 1999 from 20.7% in
first quarter 1998. The increase was due primarily to increased personnel and
related costs associated with decentralization of field staff, new store
openings, store training costs, advertising, and depreciation and maintenance of
the Company's investments in infrastructure in the prior year.
Merger and business integration costs of $6.4 million were recorded in first
quarter 1998 in connection with the acquisition and conversion activities of the
stores acquired in prior years.
Operating income in first quarter 1999 was $7.8 million, or 3.4% of net sales,
compared with an operating loss of $0.3 million in first quarter 1998. Excluding
merger and business integration costs in the prior year, the Company would have
reported operating income of $6.1 million, or 3.1% of net sales, in first
quarter 1998.
Net interest expense was $1.9 million for first quarter 1999, compared with net
interest expense of $1.1 million for first quarter 1998. Increased borrowings in
first quarter 1999 led to the increase in interest expense.
8
<PAGE>
Income tax expense was $2.3 million in first quarter 1999, compared to income
tax benefit of $0.4 million in first quarter 1998. Income tax benefit reflects
the Federal and state tax benefits of the loss before income taxes, net of the
effect of non-deductible expenses.
Net earnings were $3.6 million, or $0.17 per diluted share, for first quarter
1999 compared with a net loss of $1.1 million, or $0.05 per diluted share, for
first quarter 1998. Excluding merger and business integration costs and related
tax benefits in the prior year, net earnings for first quarter 1998 would have
been $3.0 million, or $0.14 per diluted share.
Year 2000 Issues
In 1997, the Company implemented a comprehensive risk-based program to assure
that both its information technology ("IT") and non-IT systems are Year 2000
compliant. The Company's compliance program includes various initiatives,
including conducting an inventory and identification of all Year 2000-sensitive
components of the Company's IT and non-IT systems (including hardware, software,
security, and telecommunications), requesting compliance status statements from
the Company's business partners, suppliers and vendors, and testing of new and
existing systems. The inventory and identification of Year 2000 IT and non-IT
issues is complete. Many Year 2000 IT issues have been resolved through hardware
and software updates and upgrades undertaken for other reasons. As part of the
Company's ongoing IT upgrade plans, in fiscal 1998 the Company completed the
conversion of its store point-of-sale systems to a Year 2000 compliant version
at a cost of approximately $20 million, which has been capitalized and will be
depreciated over the components' estimated useful lives. This conversion,
although not undertaken specifically for Year 2000 purposes, was accelerated in
order to achieve Year 2000 compliance in this critical area. With respect to
non-IT systems, the Company has completed the inventory and assessment of its
embedded systems contained in the corporate offices, distribution centers and
store locations. This assessment focused principally on the Company's
telecommunications system hardware and software and security systems. The amount
of other expenditures for updates and upgrades that relate specifically to Year
2000 compliance is not separable from the total, but is not believed to be a
material amount. The remediation and testing of new and existing IT and non-IT
systems is nearly complete, and additional procedures will be conducted as
necessary.
For certain of the Company's key suppliers, such as pet food suppliers, the
disruption of product deliveries would have a material adverse impact on the
Company's results of operations. The Company is actively extending its
relationships with these suppliers to include joint Year 2000 risk assessments,
remedial actions, and contingency plans in the event of non-compliance.
Contingency plans, which will undergo continuous review and adjustment
throughout the remainder of 1999, may include backup manual ordering procedures
and inventory buildup by the Company prior to December 31, 1999. Any additional
inventory buildup by the Company would generate unfavorable cash flows and
inventory valuation exposures of uncertain amount and duration.
The Company does not expect the future cost of its Year 2000 compliance program
to be material to its business, results of operations, or financial condition.
There can be no assurance, however, that the Company's assessment of the impact
of Year 2000 is complete and that further analysis and study, as well as the
testing and implementation of planned solutions, will not reveal the need for
additional remedial work. The Company is potentially vulnerable to mistakes made
by key suppliers of products and services in their advice to the Company with
respect to their Year 2000 readiness. The Company is also potentially vulnerable
to operational difficulties in the Company's corporate offices, distribution
centers or store locations, including the risk of power and water outages and
the potential failure of credit card and check authorization systems. The
financial magnitude of these risks cannot currently be estimated.
9
<PAGE>
The foregoing statements as to the Company's Year 2000 efforts are forward
looking and, along with all other forward-looking statements herein, are made in
reliance on the safe harbor provisions discussed under the caption "Certain
Cautionary Statements," below.
New Accounting Standards
In March 1998, the American Institute of Certified Public Accountants ("AICPA")
issued Statement of Position 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use" ("SOP 98-1"). Generally, SOP
98-1 requires the capitalization of certain internal and external costs
associated with the application development stage of software development. The
Company adopted this statement on January 31, 1999 as required. The adoption of
SOP 98-1 did not have a material impact on the Company's results of operations
or financial condition.
In April 1998, the AICPA issued Statement of Position 98-5, "Accounting for the
Costs of Start-up Activities" ("SOP 98-5"). Generally, SOP 98-5 requires that
the costs of start-up activities be expensed as incurred. The Company adopted
this statement on January 31, 1999 as required. The adoption of SOP 98-5 did not
have a material impact on the Company's results of operations or financial
condition.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities"(the "Statement").
The Statement establishes accounting and reporting standards requiring that
every derivative instrument be recorded in the balance sheet as either an asset
or liability measured at its fair value. The Statement also requires that
changes in the derivative's fair value be recognized currently in earnings
unless specific hedge accounting criteria are met. The Statement is effective
for fiscal years beginning after June 15, 2000 and is not expected to have a
material impact on the Company's consolidated financial statements.
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 May 1,
1999, total assets were $393.7 million, $140.9 million of which were current
assets. Net cash provided by operating activities was $8.9 million for the
thirteen weeks ended May 1, 1999, compared with net cash used in operating
activities of $1.8 million for the prior year period. The Company's sales are
substantially on a cash basis. Therefore, cash flow generated from operating
stores provides a significant 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 purchase fixed assets for new
stores, to acquire 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 first quarter of fiscal
1999 the Company invested $2.0 million in a limited partnership that operates
retail pet food and supply stores in Canada, with plans to open additional
stores. Cash used in investing activities was $13.2 million for the thirteen
weeks ended May 1, 1999, and $13.7 million for the prior year period.
10
<PAGE>
The Company also finances some of its purchases of equipment and fixtures
through capital lease and other obligations. No purchases of fixed assets were
financed in this manner during the thirteen weeks periods ended May 1, 1999, and
May 2, 1998. The Company believes that additional sources of capital lease and
other obligation 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. Cash flows provided by financing activities were
$6.3 million in the thirteen weeks ended May 1, 1999, and $15.0 million in the
prior year period. Cash flows from financing activities were provided by
borrowings under long-term debt agreements, net of repayments under long-term
debt and other obligations. Cash flows from financing activities were used to
fund the Company's expansion program and working capital requirements.
The Company has a credit facility with a syndicate of banks with a commitment of
up to $110.0 million that expires January 30, 2003. The credit facility provides
for $80.0 million in revolving loans and a $30.0 million term loan. Borrowings
under the credit facility are unsecured and bear interest, at the Company's
option, at the agent bank's corporate base rate or LIBOR plus 0.50% to 1.50%,
based on the Company's leverage ratio at the time. The credit agreement contains
certain affirmative and negative covenants related to indebtedness, interest and
fixed charges coverage, and consolidated net worth. As of May 1, 1999, the
Company had $26.8 million of revolving loans available under the credit
facility.
As of January 30, 1999, the Company had available net operating loss
carryforwards of $71.2 million for federal income tax purposes, which begin
expiring in 2004, and $35.5 million for state income tax purposes, which begin
expiring in 1999.
The Company anticipates that funds generated by operations, funds available
under the credit facility and currently available vendor financing and capital
lease and other obligation financing will be sufficient to finance its continued
operations and planned store openings at least through the next twelve months.
Certain Cautionary Statements
Certain statements in this Quarterly Report on Form 10 - Q, including, but not
limited to, Item 2 - "Management's Discussion and Analysis of Financial
Condition and Results of Operations," contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, Section
21E of the Securities Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995, that are not historical facts but rather reflect
current expectations concerning future results and events. The words "believes,"
"expects," "intends," "plans," "anticipates," "likely," "will," and similar
expressions identify such forward-looking statements. These forward-looking
statements are subject to risks, uncertainties, and other factors, some of which
are beyond the Company's control that could cause actual results to differ
materially from those forecast or anticipated in such forward-looking
statements. These factors include, but are not limited to, the Company's
expansion plans, the integration of operations as a result of acquisitions,
reliance on vendors and product lines and exclusive distribution arrangements,
competition, performance of new superstores and their future operating results,
quarterly and seasonal fluctuations, dependence on senior management, and
possible volatility of stock price. These factors are discussed in greater
detail under the caption "Certain Cautionary Statements" in PETCO's Annual
Report on Form 10-K for the year ended January 30, 1999.
11
<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market risks relating to the Company's operations result primarily from changes
in short-term interest rates as the Company's unsecured credit facility utilizes
a portfolio of short-term LIBOR contracts. LIBOR contracts are fixed rate
instruments for a period of between one and six months, at the Company's
discretion. The Company's portfolio of LIBOR contracts vary in length and
interest rate, such that adverse changes in short-term interest rates could
affect the Company's overall borrowing rate when contracts are renewed. The
lengths of contracts within the portfolio are adjusted to balance the Company's
working capital requirements, fixed asset purchases and general corporate
purposes. The Company continuously evaluates the portfolio with respect to total
debt, including an assessment of the current and future economic environment.
As of May 1, 1999, the Company had $78.8 million in debt under the credit
facility. The average debt outstanding for the last four quarters was $74.5
million. Based on this average debt level, a hypothetical 50 basis point adverse
change in LIBOR rates would increase net interest expense by approximately $0.4
million on an annual basis, and likewise would decrease earnings and cash flows.
The Company cannot predict market fluctuations in interest rates and their
impact on debt, nor can there be any assurance that long-term fixed-rate debt
will be available at favorable rates, if at all. Consequently, future results
may differ materially from the estimated results due to adverse changes in
interest rates or debt availability.
The Company did not have any material foreign exchange or other
significant market risk or any derivative financial instruments at May 1, 1999.
Part II. Other Information
Item 1. Legal Proceedings
The Company and certain of its officers have been named as defendants in several
virtually identical class action lawsuits filed in the United States District
Court for the Southern District of California between August and November, 1998.
These cases have been consolidated and will be administered as one case. The
plaintiffs purport to represent a class of all persons who purchased the
Company's common stock between January 30, 1997 and July 10, 1998. The
complaints allege that the defendants violated various federal securities laws
through material misrepresentations and omissions during the class period, and
seek unspecified monetary damages. These matters have been tendered to the
Company's insurance carrier. While the Company believes the allegations
contained in these lawsuits are without merit, the claims have not progressed
sufficiently for the Company to estimate a range of possible exposure, if any.
The Company and its officers intend to defend themselves vigorously.
12
<PAGE>
Item 5. Other Information
The Company has been named as a defendant in a lawsuit filed by the United
States Equal Employment Opportunity Commission in the United States District
Court for the Northern District of California on June 2, 1999. The complaint
alleges that the Company violated Title VII of the Civil Rights Act of 1964, as
amended, and the Equal Pay Act, by payment of wages to employees of one sex at
rates less than the rates paid to employees of the opposite sex. The complaint
seeks unspecified monetary damages for the named employees and any other
similarly-situated employees. While the Company believes the allegations
contained in this lawsuit are without merit, the claim has not progressed
sufficiently for the Company to estimate a range of possible exposure, if any.
The Company intends to defend itself vigorously.
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 May 1, 1999.
13
<PAGE>
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 and
Chief Financial Officer
Date: June 14, 1999
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> JAN-30-1999 JAN-29-2000
<PERIOD-END> MAY-02-1998 MAY-01-1999
<CASH> 2,904 4,313
<SECURITIES> 0 0
<RECEIVABLES> 12,245 9,567
<ALLOWANCES> 0 0
<INVENTORY> 92,818 106,348
<CURRENT-ASSETS> 121,995 140,912
<PP&E> 153,946 189,931
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 339,251 393,717
<CURRENT-LIABILITIES> 81,207 94,918
<BONDS> 0 0
0 0
0 0
<COMMON> 2 2
<OTHER-SE> 185,118 187,401
<TOTAL-LIABILITY-AND-EQUITY> 339,251 393,717
<SALES> 196,296 229,657
<TOTAL-REVENUES> 196,296 229,657
<CGS> 149,620 170,535
<TOTAL-COSTS> 149,620 170,535
<OTHER-EXPENSES> 47,014 51,310
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,122 1,924
<INCOME-PRETAX> (1,460) 5,888
<INCOME-TAX> (392) 2,326
<INCOME-CONTINUING> (1,068) 3,562
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (1,068) 3,562
<EPS-BASIC> (0.05) 0.17
<EPS-DILUTED> (0.05) 0.17
</TABLE>
