Bed, Bath and Beyond 2003 Annual Report Download

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2003 Annual Report • Notice of Annual Meeting • Proxy Statement
gratitude \ n: the state of being grateful: THANKFULNESS...
To Our Fellow Shareholders:
Most years, we conclude our annual letter with a brief statement of appreciation for those whose efforts and support
have led to the results we have been so honored to present. While it has never been an afterthought, as we write
our letter this year, gratitude is firmly on the front of our minds. And so we place it firmly in front of you.
1. We thank our associates for their constant efforts to improve the experience of our customers and improve
our Company.
2. We thank our customers, not only for responding favorably to our offerings, but also for speaking up when
we need to improve.
3. We thank our business partners, whose vision and support continue to be fundamental to our success.
4. We thank our shareholders for their continued confidence in our Company.
One more all important word about gratitude. As we mentioned last year, many of us at Bed Bath & Beyond have
friends, colleagues or family members in active military service. While we work on improving our Company, there
is much more important work being done by them and others to keep us safe and maintain our way of life.
We are humbled by their sacrifices, eternally grateful for their superior efforts, and proud to be called their brethren.
To them, and those who came before them who protected freedom, we are forever thankful. They are in our thoughts
and prayers.
Continued on page 1

Table of contents

  • Page 1
    .... 3. We thank our business partners, whose vision and support continue to be fundamental to our success. 4. We thank our shareholders for their continued confidence in our Company. One more all important word about gratitude. As we mentioned last year, many of us at Bed Bath & Beyond have friends...

  • Page 2
    ...,660 15,960 Gross profit 1,876,664 Operating profit 639,343 Net earnings 399,470 Net earnings per share - 1.00 D A T A $ .74 $ .59 $ .46 $ .34 $ .26 $ .20 $ .14 $ .11 $ .08 $ .06 Diluted (2) $ 1.31 $ S E L E C T E D O P E R A T I N G Number of stores open 519 396 311 241 186 141 108 80...

  • Page 3
    ...the coming year. For fiscal 2004, we currently plan to open new Bed Bath & Beyond, Harmon and Christmas Tree Shops stores. We intend to expand our health and beauty care and fine china initiatives to additional Bed Bath & Beyond stores. We continue to execute on a multitude of initiatives across the...

  • Page 4
    ... future proxy statements and annual reports over the Internet, you will receive an e-mail message next year containing the Internet address to access Bed Bath & Beyond's proxy statement and annual report. You do not have to elect Internet access each year. To view, cancel or change your enrollment...

  • Page 5
    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW In fiscal 2003, the Company's consolidated net sales increased by 22.2% and net earnings increased by 32.2%. Contributing to this increase was the expansion of Bed Bath & Beyond ("BBB") store space by 12...

  • Page 6
    ... in occupancy costs and costs associated with new store openings, partially offset by an increase...2003, 2002 and 2001 due to the weighted average effective tax rate remaining consistent in the states and territory in which the Company currently conducts business. BED BATH & BEYOND ANNUAL REPORT 2003...

  • Page 7
    ... aggregate costs for the 57 leased stores are estimated at $79.9 million for merchandise inventories, $43.1 million for furniture and fixtures and leasehold improvements and $11.8 million for store opening expenses (which will be expensed as incurred). BED BATH & BEYOND ANNUAL REPORT 2003 5

  • Page 8
    ... that period. The impairment loss is calculated as the difference between asset carrying values and the present value of the estimated net cash flows. The Company does not believe that any material impairment currently exists related to its long-lived assets. BED BATH & BEYOND ANNUAL REPORT 2003 6

  • Page 9
    ... from a Vendor." Self Insurance: The Company uses self insurance for a number of risks including worker's compensation, general liability, automobile liability and employee related health care benefits (a portion of which is paid by our employees). Liabilities associated with these risks are...

  • Page 10
    ...,750 736,921 - - 3,003 433,404 1,554,413 1,990,820 $2,865,023 2,944 294,034 1,154,943 1,451,921 $2,188,842 See accompanying Notes to Consolidated Financial Statements. BED BATH & BEYOND ANNUAL REPORT 2003 8

  • Page 11
    ...CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY Bed Bath & Beyond Inc. and Subsidiaries (in thousands) Balance at March 3, 2001 Net earnings Shares sold under employee stock option plans, including tax benefit... Notes to Consolidated Financial Statements. BED BATH & BEYOND ANNUAL REPORT 2003 9

  • Page 12
    CONSOLIDATED STATEMENTS OF CASH FLOWS Bed Bath & Beyond Inc. and Subsidiaries (in thousands) Cash Flows from Operating Activities: Net earnings Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization Amortization of bond premium Tax benefit ...

  • Page 13
    ... ACCOUNTING POLICIES AND RELATED MATTERS A. Nature of Operations Bed Bath & Beyond Inc. ( the "Company") operates specialty retail stores nationwide, primarily of a "big box" format and selling predominantly better quality domestics merchandise and home furnishings. As the Company operates in...

  • Page 14
    ...Company considers all highly liquid instruments purchased with original maturities of three months or less to be cash equivalents. I. Inventory Valuation Merchandise inventories are stated at the lower of cost or market, generally using the retail inventory method. Under the retail inventory method...

  • Page 15
    ... March 1, 2003, respectively. O. Self Insurance The Company uses self insurance for a number of risks including worker's compensation, general liability, automobile liability and employee related health care benefits (a portion of which is paid by our employees). Liabilities associated with these...

  • Page 16
    ... of sale rebates that result in a reduction of the price paid by the customer are recorded as a reduction of sales. Shipping and handling fees that are billed to a customer in a sale transaction are recorded in sales. Revenues from gift cards, gift certificates and merchandise credits are recognized...

  • Page 17
    ...settled in fiscal years beginning after December 15, 2004. As the exposure draft has not been finalized, the Company can not yet determine the impact of any requirement to recognize stock-based compensation as a cost in the consolidated financial statements. BED BATH & BEYOND ANNUAL REPORT 2003 15

  • Page 18
    ..., do not purport to be indicative of the Company's results of operations that would have occurred had the CTS acquisition been consummated at the beginning of the respective periods. Pro forma results are not intended to be a projection of future results. BED BATH & BEYOND ANNUAL REPORT 2003 16

  • Page 19
    ... the right to call certain obligations. The excess of the fair value over the amortized cost is substantially the result of unrecognized gains in fiscal 2003 and 2002. There were no material unrealized losses in fiscal 2003 and 2002. BED BATH & BEYOND ANNUAL REPORT 2003 17

  • Page 20
    ...to make substantial future premium payments. In order to confer a benefit to its Co-Chairmen in substitution for the aforementioned terminated agreements, the Company has agreed to pay, to the Co-Chairmen at a future date, an aggregate amount of $4.2 million, which is BED BATH & BEYOND ANNUAL REPORT...

  • Page 21
    ...and the Christmas Tree Shops Plan may elect to make voluntary, non-tax deductible contributions in excess of the pre-tax compensation limit up to 15% of compensation. The Company has not made a material contribution to any plan for fiscal 2003, 2002 or 2001. BED BATH & BEYOND ANNUAL REPORT 2003 19

  • Page 22
    ... and in all events, expire ten years after the date of grant. All option grants are non-qualified. The Stock Option and Compensation committees determine the number of shares and the option price per share for all options issued under the stock option plans. BED BATH & BEYOND ANNUAL REPORT 2003 20

  • Page 23
    ...,362 72,701 75,283 28,984 $ 46,299 $ 0.16 $ 0.15 (1) Net earnings per share ("EPS") amounts for each quarter are required to be computed independently and may not equal the amount computed for the total year. BED BATH & BEYOND ANNUAL REPORT 2003 21

  • Page 24
    ...the results of their operations and their cash flows for each of the fiscal years in the three-year period ended February 28, 2004 in conformity with accounting principles generally accepted in the United States of America. New York, New York March 26, 2004 BED BATH & BEYOND ANNUAL REPORT 2003 22

  • Page 25
    ... Information Officer Allan N. Rauch Vice President - Legal and General Counsel G. William Waltzinger, Jr. Vice President - Corporate Development Chuck Bilezikian Chief Executive Officer - Christmas Tree Shops, Inc. Donna Steele President - Christmas Tree Shops, Inc. Michael Honeyman Chief Operating...

  • Page 26
    ... LOW $ 30.30 37.10 38.27 39.00 BED BATH & BEYOND Alabama Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri 7 9 3 67 14 10 1 48 19 3 25 12 5 6 4 10 2 13...

  • Page 27
    650 Liberty Avenue Union, NJ 07083 908-688-0888