Bed, Bath and Beyond 2006 Annual Report Download - page 31

BED BATH& BEYOND ANNUAL REPORT 2006
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Changes in the Company’s restricted stock for the fiscal year ended March 3, 2007 were as follows:
Weighted Average
Number of Grant-Date
(Shares in thousands) Restricted Shares Fair Value
Unvested restricted stock, beginning of year 1,031)$ 37.00
Granted 1,120)37.55
Vested (91) 37.81
Forfeited (129) 37.42
Unvested restricted stock, end of year 1,931)$ 37.25
13. SUBSEQUENT EVENT
On March 22, 2007, subsequent to the end of fiscal 2006, the Company completed and announced the acquisition of buybuy
BABY, a privately held retailer of infant and toddler merchandise, for approximately $67 million (net of cash acquired) and
repayment of debt of approximately $19 million. Based in Garden City, New York, buybuy BABY operates a total of 8 stores in
Maryland, New Jersey, New York and Virginia. The stores range in size from approximately 28,000 to 60,000 square feet and
offer a broad assortment of premier infant and toddler merchandise in categories including furniture, car seats, strollers, feeding,
bedding, bath, health and safety essentials, toys, learning and development products, clothing and a unique selection of seasonal
and holiday products.
buybuy BABY was founded in 1996 by Richard and Jeffrey Feinstein, both of whom were previously employed by the Company,
and are the sons of Leonard Feinstein, one of the Company’s Co-Chairmen. The acquisition was approved by a special committee
of independent members of the Board of Directors of the Company. The special committee retained Merrill Lynch & Co. to serve
as its independent financial advisor and render a fairness opinion in connection with the transaction, as well as Chadbourne &
Parke LLP to serve as independent legal counsel to oversee the acquisition negotiations. The aforementioned repayment of
approximately $19 million of debt results in the retirement of all indebtedness of buybuy BABY, which debt was held by Richard
and Jeffrey Feinstein (approximately $16 million) and Leonard Feinstein (approximately $3 million). The Company’s Co-Chairmen,
Leonard Feinstein and Warren Eisenberg, recused themselves from deliberations relating to the transaction.
The acquisition of buybuy BABY had no effect on the Company’s fiscal 2006 results since the transaction occurred during fiscal
2007. The Company believes the benefit of this acquisition will not have a material effect on the overall results or financial condi-
tion of the Company for fiscal 2007.
14. SUMMARY OF QUARTERLY RESULTS (UNAUDITED)
FISCAL 2006
(in thousands, except per share data) QUARTER ENDED
May 27, August 26, November 25, March 3,
2006 2006 2006 2007
Net sales $ 1,395,963 $ 1,607,239 $ 1,619,240 $ 1,994,987
Gross profit 590,098 678,249 704,073 862,982
Operating profit 148,750 219,622 211,134 309,895
Earnings before provision for income taxes 158,409 229,550 221,777 323,143
Provision for income taxes 57,978 84,015 79,341 117,301
Net earnings $ 100,431 $ 145,535 $ 142,436 $ 205,842
EPS-Basic (1) $ 0.36 $ 0.52 $ 0.51 $ 0.74
EPS-Diluted (1) $ 0.35 $ 0.51 $ 0.50 $ 0.72
FISCAL 2005
(in thousands, except per share data) QUARTER ENDED
May 28, August 27, November 26, February 25,
2005 2005 2005 2006
Net sales $ 1,244,421 $ 1,431,182 $ 1,448,680 $ 1,685,279
Gross profit 520,781 601,784 615,363 747,820
Operating profit 150,884 217,877 205,493 304,917
Earnings before provision for income taxes 157,992 225,882 215,048 316,169
Provision for income taxes 59,089 84,480 80,428 118,247
Net earnings $ 98,903 $ 141,402 $ 134,620 $ 197,922
EPS-Basic (1) $ 0.34 $ 0.48 $ 0.45 $ 0.68
EPS-Diluted (1) $ 0.33 $ 0.47 $ 0.45 $ 0.67
(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.