Bed, Bath and Beyond 2005 Annual Report Download - page 20

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BED BATH& BEYOND ANNUAL REPORT 2005
18
2. ACQUISITION
On June 19, 2003, the Company acquired CTS. CTS is a retailer of giftware and household items selling a broad assortment of
domestics merchandise and home furnishings at value prices in many categories including home décor, giftware, housewares,
food, paper goods and seasonal products. The results of CTS’ operations have been included in the consolidated financial state-
ments since the date of acquisition. At the date of acquisition, CTS, headquartered in South Yarmouth, Massachusetts, operated
23 stores in 6 states.
The aggregate all cash purchase price, including the costs of the acquisition, was approximately $194.4 million, net of cash
acquired, comprising $175.5 million of cash and $18.9 million in deferred payments payable in cash over three years. Payments
of $6.7 million each were made by the Company in June 2005 and June 2004.
The acquisition has been accounted for under the purchase method of accounting in accordance with SFAS No. 141, “Business
Combinations.”
The pro forma financial information of the Company presented below is unaudited and is based on the Company’s historical
results, adjusted for the impact of certain acquisition related items, such as: the reduction of net interest income due to the
purchase price paid and the prepayment of CTS’ debt, the net reduction of certain selling, general and administrative expenses
directly attributable to the transaction, and the related pro forma income tax effects, in each case as if they occurred as of the
beginning of the fiscal year.
FISCAL YEAR ENDED
February 28, 2004
(in thousands, except per sharedata) (ProForma)
Net sales $ 4,582,309
Net earnings $ 402,479
Net earnings per share:
Basic $ 1.36
Diluted $ 1.32
The unaudited pro forma results of the Company have been prepared for comparative purposes only and in management’s
opinion, do not purportto be indicative of the Company’sresults of operations that would have occurred had the CTS acquisition
been consummated at the beginning of the period. Proforma results arenot intended to be a projection of future results.
3. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
February 25, February 26,
(in thousands) 2006 2005
Land and buildings $ 49,900)$ 43,165)
Furniture, fixtures and equipment 517,469)452,919)
Leasehold improvements 528,109)405,928)
Computer equipment and software 231,047)184,626)
1,326,525)1,086,638)
Less: Accumulated depreciation and amortization (587,783) (477,007)
$ 738,742)$ 609,631)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)