Bed, Bath and Beyond 2006 Annual Report Download - page 3

BED BATH& BEYOND ANNUAL REPORT 2006
1
To Our Fellow Shareholders: Continued from front cover
On the following pages, we present an overview of our recently completed fiscal 2006. We also will provide you with
the information you need in connection with our upcoming Annual Meeting.
Fiscal 2006 was our 36th year of operations, and our 15th as a public company. As set forth below, the results during fiscal
2006 were our best ever. Here are some of the highlights:
• Net earnings for the fiscal year (fifty-three weeks) ended March 3, 2007 were $2.09 per diluted share. This included a
non-recurring charge of approximately $.07 per diluted share to protect our associates from certain potential adverse tax
consequences arising pursuant to Internal Revenue Code Section 409A. The $2.09 exceeded fiscal 2005 (fifty-two weeks)
net earnings of $1.92 per diluted share by approximately 8.9%. Earnings before the one-time charge exceeded fiscal 2005 per
share net earnings by approximately 12%. Recall that, as previously disclosed, fiscal 2005 included only one-half year of stock
option expense related to our Company’s early adoption of SFAS No.123(R) while fiscal 2006 included a full year.
• Net sales for fiscal 2006 (fifty-three weeks) were approximately $6.6 billion, an increase of approximately 13.9%
from the prior year’s sales of $5.8 billion.
• Comparable store sales for fiscal 2006 increased by approximately 4.9%, on top of an increase of approximately 4.6% in fiscal
2005. All comparable store sales percentages are calculated based on an equivalent number of weeks for each annual period.
• During fiscal 2006, we opened 74 new Bed Bath & Beyond stores. We ended the year with 815 Bed Bath & Beyond stores in
48 states, the District of Columbia and Puerto Rico, 34 Christmas Tree Shops stores in eight states, and 39 Harmon stores in
three states.
• At the close of fiscal 2006, cash and investments totaled approximately $1.1 billion, even after deducting cash used in our
expansion program, ongoing infrastructure enhancements and share repurchase activity.
• We returned approximately $301 million in value to our shareholders during our fiscal fourth quarter through our ongoing
share repurchase program.
In addition, during the past year our Company continued its efforts toward the reduction of its consumption of natural
resources, which we discussed in our letter last year. For example, our Company opened a pilot Bed Bath & Beyond store that
incorporates a range of design and technology features to reduce energy consumption, such as skylights coupled with automatic
light dimmers and advanced control programming in a system that creates energy savings equivalent to turning 25% of the
store’s lights off every day for 16 hours. This store also features compact fluorescent lighting in vignettes, LED building sign
lighting instead of neon, and a number of other conservation technologies including solar sink faucets that use ambient light to
power the equipment that automatically turns water on and off, saving both energy and water. Further, our Company started
buying hybrid cars for certain personnel whose jobs entail frequent car travel. Looking forward, our Company has plans to install
solar arrays on four New Jersey facilities. When completed, these facilities will make us one of the largest solar energy producers
in the State of New Jersey, conserving an estimated 109,500 barrels of oil and reducing carbon dioxide by 38 million pounds
over a 30-year period. Our Company also established a committee of senior management to oversee and coordinate our many
efforts in the area of energy conservation and general environmental responsibility, and to evaluate means available to make
more public disclosure on our response to these important issues.
We also want to take this opportunity to introduce Patrick Gaston to our fellow shareholders. Patrick has been elected
to our Board of Directors and brings a wealth of wisdom and experience from his many years at Verizon, where he has served
in a variety of management positions and now heads Verizon Foundation. He also serves on the boards of various charitable
organizations.
Continued on page 2