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IDEA XBRL DOCUMENT - PETSMART INC - faqsorg.xls

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									                                               9 Months Ended
Document and Entity Information (USD $)
                                                 Oct. 31, 2010            Nov. 12, 2010    Aug. 02, 2009
Document and Entity Information
[Abstract]
Entity Registrant Name                    PETSMART INC
Entity Central Index Key                                    863157
Document Type                             10-Q
Document Period End Date                                10/31/2010
Amendment Flag                                      FALSE
Document Fiscal Year Focus                                    2011
Document Fiscal Period Focus              Q3
Current Fiscal Year End Date                                        -29
Entity Well-known Seasoned Issuer         Yes
Entity Voluntary Filers                   No
Entity Current Reporting Status           Yes
Entity Filer Category                     Large Accelerated Filer
Entity Public Float                                                                       $ 2,769,787,000
Entity Common Stock, Shares Outstanding
                                                                           117,604,890
  Condensed Consolidated Balance Sheets
                                                 9 Months Ended           12 Months Ended
            (Unaudited) (USD $)
                In Thousands                Oct. 31, 2010 Nov. 01, 2009    Jan. 31, 2010
ASSETS
Cash and cash equivalents                   $ 235,407    $ 185,215     $ 308,360
Restricted cash                                   46,515        55,250              48,172
Receivables, net                                  43,108        52,144              52,232
Merchandise inventories                          687,825       608,274             563,389
Deferred income taxes                             36,805        29,333              36,805
Prepaid expenses and other current assets
                                                  91,822         88,126             57,652
Total current assets                           1,141,482      1,018,342          1,066,610
Property and equipment, net                    1,150,286      1,225,116          1,201,857
Equity investment in investee                     38,691         30,865             32,486
Deferred income taxes                             86,199         83,631             94,901
Goodwill                                          43,555         41,882             42,200
Other noncurrent assets                           29,140         24,192             23,932
Total assets                                   2,489,353      2,424,028          2,461,986
LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable and bank overdraft              201,564       179,709             212,121
Accrued payroll, bonus and employee
benefits                                         125,563       103,526             105,162
Accrued occupancy expenses and deferred
rents                                             67,606         65,495             63,142
Current maturities of capital lease
obligations                                       43,503         36,151             37,839
Other current liabilities                        155,655        126,745            146,965
Total current liabilities                        593,891        511,626            565,229
Capital lease obligations                        528,270        545,226            533,635
Deferred rents                                    87,479         91,695             91,030
Other noncurrent liabilities                     107,078         97,225             99,377
Total liabilities                              1,316,718      1,245,772          1,289,271
Commitments and contingencies
Stockholders' equity:
Preferred stock; $.0001 par value; 10,000
shares authorized, none issued and
outstanding                                            0              0                    0
Common stock; $.0001 par value; 625,000
shares authorized, 162,042, 160,311 and
160,048 shares issued                                 16             16                 16
Additional paid-in capital                     1,201,158      1,137,132          1,148,228
Retained earnings                              1,201,957      1,030,753          1,093,708
Accumulated other comprehensive income
                                                       4,478           2,053                 2,369
Less: Treasury stock, at cost, 44,543, 39,517
and 36,471 shares                                 -1,234,974        -991,698          -1,071,606
Total stockholders' equity                         1,172,635       1,178,256           1,172,715
Total liabilities and stockholders' equity
                                                $ 2,489,353    $ 2,424,028     $ 2,461,986
 Condensed Consolidated Balance Sheets
   (Unaudited) (Parenthetical) (USD $)    Oct. 31, 2010 Jan. 31, 2010 Nov. 01, 2009

    In Thousands, except Per Share data
Stockholders' equity:
Preferred stock, par value                $ 0.0001     $ 0.0001     $ 0.0001
Preferred stock, shares authorized              10,000       10,000        10,000
Preferred stock, shares issued                       0            0             0
Preferred stock, shares outstanding                  0            0             0
Common stock, par value                   $ 0.0001     $ 0.0001     $ 0.0001
Common stock, shares authorized                625,000      625,000       625,000
Common stock, shares issued                    162,042      160,311       160,048
Treasury stock, shares                          44,543       39,517        36,471
   Condensed Consolidated Statements of
    Income and Comprehensive Income              3 Months Ended                      9 Months Ended
             (Unaudited) (USD $)
    In Thousands, except Per Share data     Oct. 31, 2010 Nov. 01, 2009 Oct. 31, 2010 Nov. 01, 2009
Condensed Consolidated Statements of
Income and Comprehensive Income
[Abstract]
Merchandise sales                           $ 1,230,911 $ 1,157,647    $ 3,681,188 $ 3,496,995
Services sales                                    148,282      136,703       466,874      433,714
Other revenue                                       8,877            0        25,701            0
Net sales                                       1,388,070    1,294,350     4,173,763    3,930,709
Cost of merchandise sales                         880,556      837,875     2,619,624    2,516,378
Cost of services sales                            109,652      100,299       338,866      311,491
Cost of other revenue                               8,877            0        25,701            0
Total cost of sales                               999,085      938,174     2,984,191    2,827,869
Gross profit                                      388,985      356,176     1,189,572    1,102,840
Operating, general and administrative
expenses                                         305,345              284,896        910,664            867,902
Operating income                                  83,640               71,280        278,908            234,938
Interest expense, net                            -14,289              -15,031        -44,222            -44,975
Income before income tax expense and
equity in income from investee                    69,351               56,249        234,686            189,963
Income tax expense                               -26,386              -20,453        -91,300            -71,594
Equity in income from investee                     2,648                2,274          6,205              4,927
Net income                                        45,613               38,070        149,591            123,296
Other comprehensive income (loss), net of
income tax:
Foreign currency translation adjustments
                                                       387               -125          2,109         4,767
Comprehensive income                        $ 46,000         $ 37,945           $ 151,700    $ 128,063
Earnings per common share:
Basic                                       $ 0.39           $ 0.31             $ 1.27         $1
Diluted                                     $ 0.38           $ 0.31             $ 1.25         $ 0.98
Weighted average shares outstanding:
Basic                                            116,943              121,661        117,333            123,163
Diluted                                          119,360              123,781        119,771            125,396
  Condensed Consolidated Statements of
                                             9 Months Ended
     Cash Flows (Unaudited) (USD $)
              In Thousands             Oct. 31, 2010 Nov. 01, 2009
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income                                 $ 149,591       $ 123,296
Adjustments to reconcile net income to net
cash provided by operating activities:

Depreciation and amortization                   176,221         177,001
Loss on disposal of property and equipment
                                                  6,104           3,937
Stock-based compensation expense                 21,316          18,485
Deferred income taxes                             7,456           8,388
Equity in income from investee                   -6,205          -4,927
Tax benefits from tax deductions in excess of
the compensation cost recognized
                                                  -7,063          -1,939
Non-cash interest expense                            234             853
Changes in other operating assets and
liabilities:
Merchandise inventories                         -123,503         -21,889
Other assets                                     -29,936          -9,494
Accounts payable                                 -16,929           3,330
Accrued payroll, bonus and employee
benefits                                         20,233          14,794
Other liabilities                                15,542          31,538
Net cash provided by operating activities
                                                213,061         343,373
CASH FLOWS FROM INVESTING ACTIVITIES:

Decrease (increase) in restricted cash and
short-term investments                             1,657         -55,250
Cash paid for property and equipment             -88,811         -86,957
Proceeds from sales of property and
equipment                                            164           3,867
Net cash used in investing activities            -86,990        -138,340
CASH FLOWS FROM FINANCING ACTIVITIES:

Net proceeds from common stock traded
under stock incentive plans                      33,810           7,252
Minimum statutory withholding
requirements                                      -5,410          -3,373
Cash paid for treasury stock                    -163,368         -84,875
Payments of capital lease obligations                -39,663         -28,660
Increase (decrease) in bank overdraft                  6,081         -19,682
Tax benefits from tax deductions in excess of
the compensation cost recognized
                                                       7,063           1,939
Cash dividends paid to stockholders                  -38,716         -20,101
Net cash used in financing activities               -200,203        -147,500
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS                              1,179          1,368
(DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS                                          -72,953         58,901
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD                                  308,360        126,314
CASH AND CASH EQUIVALENTS AT END OF
PERIOD                                          $ 235,407      $ 185,215
                                     9 Months Ended
      General
                                       Oct. 31, 2010
General [Abstract]
GENERAL              NOTE 1 — GENERAL

                        PetSmart, Inc., including its wholly owned
                     subsidiaries (the “Company,” “PetSmart” or
                     “we”), is the leading specialty provider of
                     products, services and solutions for the lifetime
                     needs of pets in North America. We offer a broad
                     line of products for all the life stages of pets, as
                     well as various pet services including professional
                     grooming, training, boarding and day camp. We
                     also offer pet products through an e-commerce
                     site. As of October 31, 2010, we operated 1,172
                     retail stores and had full-service veterinary
                     hospitals in 765 of our stores. MMI Holdings, Inc.,
                     through a wholly owned subsidiary, Medical
                     Management International, Inc., collectively
                     referred to as “Banfield,” operated 754 of the
                     veterinary hospitals under the registered trade
                     name of “Banfield, The Pet Hospital.” The
                     remaining 11 hospitals are operated by other
                     third parties in Canada.
   The accompanying condensed consolidated
financial statements have been prepared in
accordance with accounting principles generally
accepted in the United States of America, or
“GAAP,” for interim financial information.
Accordingly, they do not include all information
and footnotes required by GAAP for annual
financial statements. In the opinion of
management, the accompanying condensed
consolidated financial statements reflect all
adjustments, which are of a normal, recurring
nature, necessary for the fair statement of results
for the interim periods presented. These
condensed consolidated financial statements,
which are unaudited, should be read in
conjunction with the audited consolidated
financial statements and footnotes included in
our Annual Report on Form 10-K for the year
ended January 31, 2010. Differing from our
presentation in our previously filed Form 10-K,
we have combined the receivables, net, other
noncurrent assets, and prepaid expenses and
other current assets line items in the Condensed
Consolidated Statements of Cash Flows into a
single line item called other assets. Further, we
have combined the accrued occupancy expenses

   Due to the seasonal nature of our business,
the results of operations for the thirteen and
thirty-nine weeks ended October 31, 2010, are
not necessarily indicative of the results expected
for the full year. Our fiscal year consists of 52 or
53 weeks and ends on the Sunday nearest
January 31. Fiscal 2010 ends on January 30, 2011,
while fiscal 2009 ended on January 31, 2010, both
of which are 52 week years. Unless otherwise
specified, all references to years in these
condensed consolidated financial statements are
to fiscal years.
                                                              9 Months Ended
     Derivative Financial Instruments
                                                                Oct. 31, 2010
Derivative Financial Instruments [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS              NOTE 2 — DERIVATIVE FINANCIAL
                                              INSTRUMENTS

                                                 We use foreign currency exchange forward
                                              contracts, or “Foreign Exchange Contracts,” to
                                              manage the impact of foreign currency exchange
                                              rate fluctuations related to certain balance sheet
                                              accounts. We enter into the Foreign Exchange
                                              Contracts in Canada primarily to mitigate risk
                                              related to non-functional currency exposures.
                                              These Foreign Exchange Contracts are not
                                              designated as hedges and are recorded at fair
                                              value using quoted prices for similar assets or
                                              liabilities in active markets. The changes in the
                                              fair value are recognized in operating, general
                                              and administrative expenses in the Condensed
                                              Consolidated Statements of Income and
                                              Comprehensive Income.

                                                  At October 31, 2010, we had Foreign Exchange
                                              Contracts outstanding with a notional amount of
                                               $5.0 million, which represents the amount of
                                              foreign currencies to be purchased or sold at
                                              maturity and does not represent our exposure on
                                              these contracts. The fair value of the liability
                                              related to these Foreign Exchange Contracts
                                              included in other current liabilities was
                                              immaterial at October 31, 2010. During the
                                              thirteen and thirty-nine weeks ended October 31,
                                              2010, we recorded $0.1 million and $0.3 million
                                              in losses on the Foreign Exchange Contracts,
                                              respectively. We did not enter into Foreign
                                              Exchange Contracts during 2009.
                                          9 Months Ended
      Income Taxes
                                            Oct. 31, 2010
Income Taxes [Abstract]
INCOME TAXES              NOTE 3 — INCOME TAXES


                             We establish deferred income tax assets and
                          liabilities for temporary differences between the
                          financial reporting bases and the income tax
                          bases of our assets and liabilities at enacted tax
                          rates expected to be in effect when such assets or
                          liabilities are realized or settled. We record a
                          valuation allowance on the deferred income tax
                          assets to reduce the total to an amount we
                          believe is more likely than not to be realized.
                             We recognize accrued interest and penalties
                          related to unrecognized tax benefits as a
                          component of income tax expense in the
                          Condensed Consolidated Statements of Income
                          and Comprehensive Income. We believe it is
                          reasonably possible that approximately
                           $0.4 million of our current remaining
                          unrecognized tax positions may be recognized by
                          October 31, 2011, as a result of settlements or a
                          lapse of the statute of limitations.

                             As of October 31, 2010, our gross tax liabilities
                          associated with uncertain tax positions, excluding
                          interest and penalties, were $7.8 million. Based
                          on the uncertainties associated with the
                          settlement of these types of items, we are unable
                          to make reasonably reliable estimates of
                          potential cash settlements, if any, with taxing
                          authorities.
   We generally do not materially adjust deferred
tax assets as part of our interim income tax
provision. During the thirty-nine weeks ended
October 31, 2010, changes in deferred tax assets
were due to tax benefits related to stock-based
compensation and changes in accumulated other
comprehensive income. During the interim
periods, we recognize the provision for income
taxes in other current liabilities or prepaid
expenses and other current assets in the
Condensed Consolidated Balance Sheets, as
appropriate. The provision is calculated based on
our estimated annual effective income tax rate
applied to pretax income. As a result, a
reclassification between other current liabilities
and deferred income tax assets and liabilities is
likely to occur during the fourth quarter of 2010.

   At October 31, 2010, accrued taxes of
 $32.0 million related to sales taxes and income
taxes were included in other current liabilities in
the Condensed Consolidated Balance Sheets.
      Investments

Investments [Abstract]
INVESTMENTS              NOTE 4 — INVESTMENTS
                           We have an investment in Banfield which is accounted for using the equity method of accounting. Our ow




                          Voting common stock and preferred stock
                          Equity in income from investee

                          Total equity investment in affiliate


                           Our investment consisted of voting common stock, comprising 21.4% of all voting stock as of October 31,
                           Banfield’s financial data is summarized as follows (in thousands):



                          Current assets
                          Noncurrent assets
                          Current liabilities
                          Noncurrent liabilities




                          Net sales
                          Income from operations
                          Net income
                           In accordance with our master operating agreement with Banfield, we charge Banfield license fees for th
                         Consolidated Statements of Income and Other Comprehensive Income.
                           We recognized license fees and reimbursements for specific operating expenses from Banfield of $8.9 m
                           The master operating agreement also includes a provision for the sharing of profits on the sale of therape
method of accounting. Our ownership interest in the stock of Banfield was as follows (in thousands):

                                                                                                      31-Oct-10
                                    Shares
                                                        4,693
                                                           —

                                                        4,693


voting stock as of October 31, 2010, January 31, 2010, and November 1, 2009. Our ownership percentage as of October 31, 2010, January 31, 2010, and



                                                        31-Oct-10
                        $                            349,507
                                                     121,975
                                                     301,705
                                                      14,172

                                                                                                                      Thirteen Weeks Ended
                                                        31-Oct-10
                        $                           162,011
                                                      21,696
                                                      12,609
ge Banfield license fees for the space used by the veterinary hospitals and for their portion of utilities costs. We also charge Banfield for its portion of spe

nses from Banfield of $8.9 million and $8.5 million during the thirteen weeks ended October 31, 2010, and November 1, 2009, respectively, and $25.7
 profits on the sale of therapeutic pet foods sold in all stores with an operating Banfield hospital. The net sales and gross profit on the sale of therapeuti
 thousands):

          31-Oct-10
                                                                             Amount
                                                          $                                      21,675
                                                                                                 17,016

                                                          $                                      38,691


ership percentage as of October 31, 2010, January 31, 2010, and November 1, 2009, considering all classes of stock, voting and non-voting, was 21.0%.



                                                                                                   31-Jan-10
                                                                   $                           269,381
                                                                                               122,934
                                                                                               247,138
                                                                                                16,216

                          Thirteen Weeks Ended
                                                                                                   1-Nov-09
                                                                   $                             149,924
                                                                                                   18,036
                                                                                                   10,821
on of utilities costs. We also charge Banfield for its portion of specific operating expenses. Prior to February 1, 2010, license fees were treated as a reduc

tober 31, 2010, and November 1, 2009, respectively, and $25.7 million and $25.2 million during the thirty-nine weeks ended October 31, 2010, and No
hospital. The net sales and gross profit on the sale of therapeutic pet food are not material to our condensed consolidated financial statements.
                                                                                                                      Shares




nsidering all classes of stock, voting and non-voting, was 21.0%.



         31-Jan-10                                                                                                                       1-Nov-09
                                                                                                           $




         1-Nov-09                                                                                                                        31-Oct-10
                                                                                                           $



es. Prior to February 1, 2010, license fees were treated as a reduction of occupancy costs, which are included as a component of cost of merchandise sal

on during the thirty-nine weeks ended October 31, 2010, and November 1, 2009, respectively. Receivables from Banfield totaled $2.9 million, $2.4 milli
erial to our condensed consolidated financial statements.
                                                               9 Months Ended
                                                                 Oct. 31, 2010




                                                                                     31-Jan-10
                      Shares
                                         4,693
                                            —

                                         4,693




                                          1-Nov-09
                                       265,973
                                       126,798
                                       256,274
                                        15,603

                                                                                                   Thirty-nine Weeks Ended
                                          31-Oct-10
                                       472,665
                                         50,342
                                         29,549
h are included as a component of cost of merchandise sales, and reimbursements for specific operating expenses were treated as a reduction of operatin

Receivables from Banfield totaled $2.9 million, $2.4 million, and $3.4 million at October 31, 2010, January 31, 2010, and November 1, 2009, respective
                                Amount
              $                                   21,675
                                                  10,811

              $                                   32,486




ded
                                                    1-Nov-09
                      $                           422,073
                                                   39,675
                                                   23,445
treated as a reduction of operating, general and administrative expenses in the Condensed Consolidated Statement of Income and Comprehensive Inco

nd November 1, 2009, respectively, and were included in receivables, net in the Condensed Consolidated Balance Sheets.
                                                                                                                                             1-No
                                                                                   Shares
                                                                                                               4,693
                                                                                                                  —

                                                                                                               4,693




nsed Consolidated Statement of Income and Comprehensive Income. Beginning February 1, 2010, license fees and the reimbursements for specific opera

nsed Consolidated Balance Sheets.
                                       1-Nov-09
                                                                                                                   Amount
                                                                                                   $                               21,675
                                                                                                                                    9,190

                                                                                                   $                               30,865




s and the reimbursements for specific operating expenses are included in other revenue, and the related costs are included in cost of other revenue in th
n cost of other revenue in the Condensed
                                                                                                                 9 Months Ended
       Reserve for Closed Stores
                                                                                                                   Oct. 31, 2010
Reserve for Closed Stores [Abstract]
RESERVE FOR CLOSED STORES              NOTE 5 — RESERVE FOR CLOSED STORES
                                         The components of the reserve for closed stores were as follows (in thousands):

                                                                                                            31-Oct-10
                                        Total remaining gross occupancy costs                           $      35,740
                                        Less:
                                            Expected sublease income                                          (23,916
                                            Interest costs                                                     (1,708

                                        Reserve for closed stores                                       $      10,116



                                        Current portion, included in other current
                                        liabilities                                                     $        3,200
                                        Noncurrent portion, included in other
                                        noncurrent liabilities                                                   6,916

                                        Reserve for closed stores                                       $      10,116


                                         The activity related to the reserve for closed stores was as follows (in thousands):

                                                                                                                        Thirteen Weeks End
                                                                                                            31-Oct-10
                                        Opening balance                                                 $      10,969

                                            Reserve for new store closures                                         155
                                            Changes in sublease assumptions                                         —
                                            Lease terminations                                                      —
                                            Other                                                                  190


                                           Charges, net                                                            345
                                        Payments                                                                (1,198

                                        Ending balance                                                  $      10,116
         9 Months Ended
           Oct. 31, 2010


lows (in thousands):

                                   31-Jan-10          1-Nov-09
                               $      33,577      $      35,049

              )                      (24,018 )          (25,530 )
              )                       (1,343 )           (1,457 )

                               $        8,216     $        8,062




                               $        2,395     $        1,922

                                        5,821              6,140

                               $        8,216     $        8,062


ollows (in thousands):

            Thirteen Weeks Ended                             Thirty-nine Weeks Ended
                                   1-Nov-09           31-Oct-10                    1-Nov-09
                               $        7,633     $        8,216                  $    6,382

                                        1,025              3,706                       1,025
                                        1,145                992                       3,743
                                         (565 )               —                         (565 )
                                          203                521                         611


                                        1,808              5,219                        4,814
              )                        (1,379 )           (3,319 )                     (3,134 )

                               $        8,062     $      10,116                   $    8,062
      Earnings Per Common Share

Earnings Per Common Share [Abstract]
EARNINGS PER COMMON SHARE              NOTE 6 — EARNINGS PER COMMON SHARE
                                         The following table presents a reconciliation of the weighted average shares outstand




                                        Basic
                                        Effect of dilutive securities:
                                            Stock options, restricted stock and
                                            performance share units

                                        Diluted

                                          Certain stock-based compensation awards representing 2.5 million and 3.7 million sh
                                       presented.
N SHARE
 onciliation of the weighted average shares outstanding used in the earnings per common share calculations (in thousands):

                                                                                                                                Thirteen Weeks Ended
                                                                                31-Oct-10
                                                                                        116,943


                                                                                            2,417

                                                                                        119,360

n awards representing 2.5 million and 3.7 million shares of common stock in the thirteen weeks ended October 31, 2010, and November 1, 2009, respec
                                                                                           9 Months Ended
                                                                                             Oct. 31, 2010


ousands):

                   Thirteen Weeks Ended
                                                                                1-Nov-09
                                                                                       121,661


                                                                                           2,120

                                                                                       123,781

1, 2010, and November 1, 2009, respectively, and 2.2 million and 6.0 million shares of common stock in the thirty-nine weeks ended October 31, 2010, a
                                                                                                                               Thirty-nine Weeks Ended
                                                                              31-Oct-10
                                                                                      117,333


                                                                                          2,438

                                                                                      119,771

-nine weeks ended October 31, 2010, and November 1, 2009, respectively, were not included in the calculation of diluted earnings per common share be
                 Thirty-nine Weeks Ended
                                                                              1-Nov-09
                                                                                     123,163


                                                                                         2,233

                                                                                     125,396

diluted earnings per common share because the inclusion of such awards would have been antidilutive for the periods
       Stockholders' Equity

Stockholders' Equity [Abstract]
STOCKHOLDERS' EQUITY              NOTE 7 — STOCKHOLDERS’ EQUITY
                                    Share Purchase Program
                                    In June 2009, the Board of Directors approved a share purchase program authorizing the purch
                                    In June 2010, the Board of Directors approved a new share purchase program authorizing the p
                                  purchase program. As of October 31, 2010, $343.7 million remained available under the $400.0 m
                                    Dividends
                                    During the thirty-nine weeks ended October 31, 2010, the Board of Directors declared the follo

                                  Date
                                  Declared
                                    March 23, 2010
                                    June 16, 2010
                                    September 29, 2010
                                                                                                         9 Months Ended
                                                                                                           Oct. 31, 2010




 program authorizing the purchase of up to $350.0 million of our common stock through January 29, 2012. During the thirteen weeks ended May 2, 201
chase program authorizing the purchase of up to $400.0 million of our common stock through January 29, 2012, replacing the $350.0 million program.
ed available under the $400.0 million program.

d of Directors declared the following dividends:

                                   Dividend Amount                                                                                 Stockholders of
                                      Per Share                                                                                      Record Date
                    $                0.1                                                                                             30-Apr-10
                    $              0.125                                                                                             30-Jul-10
                    $              0.125                                                                                             29-Oct-10
onths Ended
t. 31, 2010




the thirteen weeks ended May 2, 2010, we purchased 3.4 million shares of common stock for $107.1 million under the June 2009 share purchase progra
placing the $350.0 million program. During the thirteen weeks ended October 31, 2010, we purchased 1.6 million shares of common stock for $56.3 mil




                     Stockholders of                                                                                                       Date
                       Record Date                                                                                                         Paid
                       30-Apr-10                                                                                                       14-May-10
                       30-Jul-10                                                                                                       13-Aug-10
                       29-Oct-10                                                                                                       12-Nov-10
e June 2009 share purchase program.
es of common stock for $56.3 million under the June 2010 share




                         Date
                         Paid
                      14-May-10
                      13-Aug-10
                      12-Nov-10
       Stock-Based Compensation

Stock-Based Compensation [Abstract]
STOCK-BASED COMPENSATION              NOTE 8 — STOCK-BASED COMPENSATION
                                        The stock-based compensation expense, net of forfeitures, and the total income tax b




                                       Stock options expense
                                       Management equity unit expense
                                       Performance share unit expense
                                       Restricted stock expense

                                           Total stock-based compensation expense,
                                           net of forfeitures


                                       Tax benefit


                                        At October 31, 2010, the total unrecognized stock-based compensation expense, net o
                                      Employee Stock Purchase Plan
                                        We have an Employee Stock Purchase Plan, or “ESPP,” that allows employees who me
                                      weeks ended October 31, 2010, and November 1, 2009, 0.1 million shares were purchase
ATION
pense, net of forfeitures, and the total income tax benefit recognized in the Condensed Consolidated Statements of Income and Comprehensive Income

                                                                                                               Thirteen Weeks Ended
                                                               31-Oct-10
                                                    $                        2,533
                                                                             1,912
                                                                             2,061
                                                                             1,837



                                                    $                        8,343


                                                    $                        2,954


ecognized stock-based compensation expense, net of estimated forfeitures, was $46.0 million and is expected to be recognized over a weighted averag

hase Plan, or “ESPP,” that allows employees who meet certain service requirements to purchase our common stock on semi-annual offering dates at a d
November 1, 2009, 0.1 million shares were purchased through the ESPP.
                                                                                             9 Months Ended
                                                                                               Oct. 31, 2010


nts of Income and Comprehensive Income were as follows (in thousands):

     Thirteen Weeks Ended
                                                                1-Nov-09
                                                     $                        2,051
                                                                                418
                                                                                955
                                                                              2,937



                                                     $                        6,361


                                                     $                        2,165


 to be recognized over a weighted average period of 1.3 years. During the thirteen weeks ended October 31, 2010, there were no grants issued under o

stock on semi-annual offering dates at a discount. The ESPP allows participants to purchase our common stock on semi-annual offering dates at 95% of t
ed
0




                                                                                                                    Thirty-nine Weeks Ended
                                                                     31-Oct-10
                                                     $                            6,965
                                                                                  3,884
                                                                                  5,576
                                                                                  4,891



                                                     $                           21,316


                                                     $                            7,430


010, there were no grants issued under our equity incentive plans.

on semi-annual offering dates at 95% of the fair market value of the shares on the purchase date. During the thirteen weeks ended October 31, 2010, a
   Thirty-nine Weeks Ended
                                                               1-Nov-09
                                                  $                            6,225
                                                                               1,009
                                                                               2,321
                                                                               8,930



                                                  $                           18,485


                                                  $                            6,596




en weeks ended October 31, 2010, and November 1, 2009, no shares were purchased through the ESPP. During the thirty-nine
                                              9 Months Ended
      Foreign Currency
                                                Oct. 31, 2010
Foreign Currency [Abstract]
FOREIGN CURRENCY              NOTE 9 — FOREIGN CURRENCY


                                 Foreign currency translation adjustments were
                              the only component of accumulated other
                              comprehensive income and are reported
                              separately in stockholders’ equity in the
                              Condensed Consolidated Balance Sheets. The
                              income tax expense (benefit) related to the
                              foreign currency translation adjustments was
                               $248 thousand and $(80) thousand for the
                              thirteen weeks ended October 31, 2010, and
                              November 1, 2009, respectively, and $1.2 million
                              and $3.0 million for the thirty-nine weeks ended
                              October 31, 2010, and November 1, 2009,
                              respectively. The transaction (loss) gain included
                              in net income was $(9) thousand and $262
                              thousand for the thirteen weeks ended
                              October 31, 2010, and November 1, 2009,
                              respectively, and $(0.7) million and $(1.2) million
                              for the thirty-nine weeks ended October 31,
                              2010, and November 1, 2009, respectively.

                                 The impact of foreign currency translation
                              adjustments to the carrying value of goodwill was
                               $0.2 million and $(0.1) million for the thirteen
                              weeks ended October 31, 2010, and November 1,
                              2009, respectively, and $1.4 million and
                               $3.2 million for the thirty-nine weeks ended
                              October 31, 2010, and November 1, 2009,
                              respectively.
                                                                                          9 Months Ended
  Supplemental Schedule of Cash Flows
                                                                                            Oct. 31, 2010
Supplemental Schedule of Cash Flows
[Abstract]
SUPPLEMENTAL SCHEDULE OF CASH FLOWS NOTE 10 — SUPPLEMENTAL SCHEDULE OF CASH FLOWS
                                        Supplemental cash flow information was as follows (in thousands):

                                                                                                                        Th
                                                                                                            31-Oct-10
                                        Interest paid                                               $
                                        Income taxes paid, net of refunds

                                        Assets acquired using capital lease obligations
                                        Accruals and accounts payable for capital
                                        expenditures
                                        Dividends declared but unpaid
  9 Months Ended
    Oct. 31, 2010


OWS
 s (in thousands):

                                   Thirty-nine Weeks Ended
                       31-Oct-10                                1-Nov-09
                 44,177                                 $ 44,539
                121,814                                   60,128

                     37,331                                  18,274

                     28,359                                  14,081
                     14,695                                  12,358
                                                9 Months Ended
       Letters of Credit
                                                  Oct. 31, 2010
Letters of Credit [Abstract]
LETTERS OF CREDIT              NOTE 11 — LETTERS OF CREDIT

                                  We have a $350.0 million revolving credit
                               facility, or “Revolving Credit Facility,” that expires
                               on August 15, 2012. Borrowings under the
                               Revolving Credit Facility are subject to a
                               borrowing base and bear interest, at our option,
                               at the bank’s prime rate plus 0% to 0.25% or
                               LIBOR plus 0.875% to 1.25%. We are subject to
                               fees payable to lenders each quarter at an annual
                               rate of 0.20% of the unused amount of the
                               Revolving Credit Facility. The Revolving Credit
                               Facility also gives us the ability to issue letters of
                               credit, which reduce the amount available under
                               the Revolving Credit Facility. Letter of credit
                               issuances under the Revolving Credit Facility are
                               subject to interest payable to the lenders and
                               bear interest of 0.875% to 1.25% for stand-by
                               letters of credit or 0.438% to 0.625% for
                               commercial letters of credit.


                                  We had no borrowings and $31.6 million in
                               stand-by letter of credit issuances outstanding
                               under our $350.0 million Revolving Credit Facility
                               as of October 31, 2010. As of January 31, 2010,
                               we had no borrowings and $35.7 million in stand-
                               by letter of credit issuances outstanding, and as
                               of November 1, 2009, we had no borrowings and
                                $32.4 million in stand-by letter of credit
                               issuances outstanding.
   We also have a $100.0 million stand-alone
letter of credit facility, or “Stand-alone Letter of
Credit Facility,” that expires August 15, 2012. We
are subject to fees payable to the lender each
quarter at an annual rate of 0.45% of the average
daily face amount of the letters of credit
outstanding during the preceding calendar
quarter. In addition, we are required to maintain
a cash deposit with the lender equal to the
amount of outstanding letters of credit or we
may use other approved investments as
collateral. If we use other approved investments
as collateral, we must have an amount on deposit
which, when multiplied by the advance rate of
85%, is equal to the amount of the outstanding
letters of credit under the Stand-alone Letter of
Credit Facility. As of October 31, 2010, we had
 $46.5 million in outstanding letters of credit
under the Stand-alone Letter of Credit Facility
and $46.5 million in restricted cash on deposit
with the lender. As of January 31, 2010, we had
 $48.2 million in outstanding letters of credit
under the Stand-alone Letter of Credit Facility
and $48.2 million in restricted cash on deposit
with the lender. As of November 1, 2009, we had
   The Revolving Credit Facility and Stand-alone
Letter of Credit Facility permit the payment of
dividends if we are not in default and the
payment of dividends would not result in default
of the Revolving Credit Facility and Stand-alone
Letter of Credit Facility. As of October 31, 2010,
we were in compliance with the terms and
covenants of our Revolving Credit Facility and
Stand-alone Letter of Credit Facility. The
Revolving Credit Facility and Stand-alone Letter of
Credit Facility are secured by substantially all our
personal property assets, our subsidiaries and
certain real property.
                                                           9 Months Ended
     Commitments and Contingencies
                                                             Oct. 31, 2010
Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES              NOTE 12 — COMMITMENTS AND
                                           CONTINGENCIES
                                             Advertising Purchase Commitments

                                              As of October 31, 2010, we had obligations to
                                           purchase $8.7 million of advertising through the
                                           remainder of 2010, and $14.2 million in 2011.
                                              Product Purchase Commitments
                                              As of October 31, 2010, we had various
                                           commitments to purchase product from certain
                                           vendors that are not material to our total
                                           inventory purchases.
                                              Litigation and Settlements

                                               Beginning in March 2007, we were named as a
                                           party in the following lawsuits arising from pet
                                           food recalls announced by several manufacturers.
                                           The plaintiffs sued the major pet food
                                           manufacturers and retailers claiming that their
                                           pets suffered injury and/or death as a result of
                                           consuming allegedly contaminated pet food and
                                           pet snack products.
                                           Bruski v. Nutro Products, et al., USDC, N.D. IL
                                           (filed 3/23/07)
                                           Rozman v. Menu Foods, et al., USDC, MN (filed
                                           4/9/07)
                                           Ford v. Menu Foods, et al., USDC, S.D. CA (filed
                                           4/23/07)
                                           Wahl, et al. v. Wal-Mart Stores Inc., et al., USDC,
                                           C.D. CA (filed 4/10/07)
                                           Demith v. Nestle, et al., USDC, N.D. IL (filed
                                           4/23/07)
                                           Thompkins v. Menu Foods, et al., USDC, CO (filed
                                           4/11/07)
                                           McBain v. Menu Foods, et al., Judicial Centre of
                                           Regina, Canada (filed 7/11/07)

                                           Dayman v. Hills Pet Nutrition Inc., et al., Ontario
                                           Superior Court of Justice (filed 8/8/07)
                                           Esau v. Menu Foods, et al., Supreme Court of
                                           Newfoundland and Labrador (filed 9/5/07)
                                           Ewasew v. Menu Foods, et al., Supreme Court of
                                           British Columbia (filed 3/23/07)
                                           Silva v. Menu Foods, et al., Canada Province of
                                           Manitoba (filed 3/30/07)
Powell v. Menu Foods, et al., Ontario Superior
Court of Justice (filed 3/28/07)

   By order dated June 28, 2007, the Bruski,
Rozman, Ford, Wahl, Demith and Thompkins
cases were transferred to the U.S. District Court
for the District of New Jersey and consolidated
with other pet food class actions under the
federal rules for multi-district litigation (In re: Pet
Food Product Liability Litigation , Civil No. 07-
2867). The Canadian cases were not consolidated.
   On May 21, 2008, the parties to the U.S.
lawsuits comprising the In re: Pet Food Product
Liability Litigation and the Canadian cases jointly
submitted a comprehensive settlement
arrangement for court approval. Preliminary
court approval was received from the U.S. District
Court on May 3, 2008, and from all of the
Canadian courts as of July 8, 2008. On
October 14, 2008, the U.S. District Court
approved the settlement, and the Canadian
courts gave final approval on November 3, 2008.


   Two different groups of objectors filed notices
of appeal with respect to the U.S. District Court’s
approval of the U.S. settlement. Upon expiration
of the prescribed appeal process these cases
should be resolved, and we continue to believe
they will not have a material adverse impact on
our condensed consolidated financial statements.

   There have been no appeals filed in Canada.
   We are involved in the defense of various
other legal proceedings that we do not believe
are material to our condensed consolidated
financial statements.

								
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