Abercrombie & Fitch 2003 Annual Report Download - page 20

Abercrombie &Fitch
Financing activities during the 2003, 2002 and 2001 fiscal years
consisted primarily of the repurchase of 4,401,000 shares, 1,850,000
shares, and 600,000 shares, respectively, of A&F’s Class A
Common Stock pursuant to previously authorized stock repurchase
programs.
The 2003 repurchase leaves 599,000 shares remaining as of
January 31, 2004 of the 5,000,000 share repurchase authorized by
the Board of Directors during its August 2002 Board meeting. In
addition to stock repurchases, financing activities also consisted
of stock option exercises, restricted stock issuances and overdrafts.
These overdrafts are outstanding checks reclassified from cash to
accounts payable.
Effective November 14, 2002, the Company entered into a
new $250 million syndicated unsecured credit agreement (the
“Credit Agreement”), which replaced both the then existing $150
million syndicated unsecured credit agreement and a $75 million
trade letter of credit facility. Additional details regarding the
Credit Agreement can be found in the Notes to Consolidated
Financial Statements (see Note 8).
Letters of credit totaling approximately $42.8 million and
$41.8 million were outstanding under the Credit Agreement at
January 31, 2004 and February 1, 2003, respectively. No borrow-
ings were outstanding under the Credit Agreement at January 31,
2004 or February 1, 2003.
The Company has standby letters of credit in the amount of
$4.7 million that expire during the 2004 fiscal year but automati-
cally renew for a period of one year. The beneficiary, a merchan-
dise supplier, has the right to draw upon the standby letters of
credit if the Company has authorized or filed a voluntary petition
in bankruptcy. To date, the beneficiary has not drawn upon the
standby letters of credit.
OF F-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL
OBLIGATIONS The Company does not have any off-balance sheet
arrangements or debt obligations. As of January 31, 2004, the
Company’s contractual obligations were as follows:
Contractual Less than More than
Obligations Total 1 year 1-3 years 3-5 years 5 years
Operating
Leases $1,002,720 $141,338 $278,417 $232,628 $350,337
Purchase
Obligations $ 143,600 $143,600 – – –
and Other
Total $1,146,320 $284,938 $278,417 $232,628 $350,337
The majority of the Company’s contractual obligations are
made up of operating leases for its stores (see Note 5 of the Notes to
Consolidated Financial Statements). The purchase obligations and
other category represents purchase orders for merchandise to be
delivered during Spring 2004, preventive maintenance contracts for
the 2004 fiscal year and letters of credit outstanding as of January
31, 2004 (see Note 8 of the Notes to Consolidated Financial
Statements). The Company expects to fund all of these obligations
with cash provided from operations.
STORES AND GROSS SQUARE F EET Store count and gross
square footage by concept were as follows:
January 31, 2004 February 1, 2003
Number Gross Square Number Gross Square
of Stores Feet (millions) of Stores Feet (millions)
Abercrombie & Fitch 357 3,154 340 3,036
abercrombie 171 753 164 727
Hollister 172 1,114 93 595
Total 700 5,021 597 4,358
CAPITAL EXPENDIT URES Capital expenditures, net of construction
allowances, totaled $99.1 million, $93.0 million and $126.5 million for
the 2003, 2002 and 2001 fiscal years, respectively. Additionally, the non-
cash accrual for construction in progress increased $18.6 million in the
2003 fiscal year, decreased $12.7 million in the 2002 fiscal year and
increased $1.0 million the 2001 fiscal year. Capital expenditures in the
2003 fiscal year related primarily to new store construction. In addi-
tion, approximately $35.0 million of the total capital expenditures
was invested in expansion of the home office, distribution center
projects and a new point-of-sale system. Capital expenditures in the
2002 fiscal year related primarily to new store construction with
approximately $20.0 million invested in information technology and
distribution center projects. Capital expenditures in the 2001 fiscal year
related primarily to new store construction. Approximately $17.0
million of the total capital expenditure in the 2001 fiscal year related
to the construction of a new home office and distribution center. The
office and distribution center were completed in the 2001 fiscal year.
The Company anticipates spending $110.0 million to $120.0 million
in the 2004 fiscal year for capital expenditures, of which $85.0 million
to $95.0 million will be for new/remodel store construction. The bal-
ance of the capital expenditures will primarily relate to home office
and distribution center projects and other miscellaneous projects.
The Company intends to add approximately 745,000 gross square
feet in the 2004 fiscal year, which will represent a 15% increase over
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