Petsmart 2005 Annual Report Download - page 80

Download and view the complete annual report

Please find page 80 of the 2005 Petsmart annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 92

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92

Stockholder Rights Plan
On August 4, 1997, the Company adopted a Stockholder Rights Plan under which one preferred share purchase
right was distributed on August 29, 1997 for each share of common stock held on that date. No certificates for the
rights will be issued unless a person or group, subject to certain exceptions, acquires 15% or more of the Company’s
common stock or announces a tender offer for 15% or more of the common stock. Each right entitles the registered
holder to purchase from the Company, upon such event, one one-hundredth of a share of Series A Junior
Participating Preferred Stock, par value $0.0001 per share, at a price of $65.00 per one one-hundredth of a
preferred share. Each preferred share is designed to be the economic equivalent of 100 shares of common stock. The
rights expire August 28, 2007 and are subject to redemption at a price of $0.001 in specified circumstances.
Dividends
In fiscal 2005 and 2004, the following dividends were declared by the Board of Directors:
Date Declared
Dividend
Amount per
Share
Stockholders of
Record Date Date Paid
Fiscal 2005:
March 22, 2005 ..................... $0.03 April 29, 2005 May 20, 2005
June 23, 2005....................... $0.03 July 29, 2005 August 19, 2005
September 21, 2005 .................. $0.03 October 31, 2005 November 18, 2005
December 15, 2005 .................. $0.03 January 27, 2006 February 10, 2006
Fiscal 2004:
March 23, 2004 ..................... $0.03 April 30, 2004 May 21, 2004
June 23, 2004....................... $0.03 July 30, 2004 August 20, 2004
September 29, 2004 .................. $0.03 October 29, 2004 November 19, 2004
December 14, 2004 .................. $0.03 January 28, 2005 February 18, 2005
Note 11 — Financing Arrangements and Lease Obligations
Bank Credit Facility
The Company has an available credit facility of $125,000,000, which expires April 30, 2008. Borrowings
under the credit facility are subject to a borrowing base and bear interest, at the Company’s option, at either a bank’s
prime rate plus 0% to 0.50% or LIBOR plus 1.25% to 1.75%. The Company is subject to fees payable to the lenders
each quarter at an annual rate of 0.25% of the unused amount of the credit facility. Letter of credit issuances under
the credit facility are subject to a borrowing base and bear interest of LIBOR plus 1.25% to 1.75% or LIBOR less
0.50%, depending on the type of letter of credit issued. The credit facility permits the payment of dividends, so long
as the Company is not in default and the payment of dividends would not result in default of the facility. The credit
facility is secured by substantially all the Company’s personal property assets, its subsidiaries and certain real
property. At January 29, 2006 and January 30, 2005, there were no borrowings outstanding on this credit
arrangement.
Subsequent to January 29, 2006, the Company determined that it was in technical non-compliance under its
credit facility during a portion of fiscal 2005. In March 2006, the lender group waived such past non-compliance,
and the Company is currently in compliance with its credit facility.
Letters of Credit
The Company issues letters of credit for guarantees provided for insurance programs, capital lease agreements
and utilities. As of January 29, 2006, $41,681,000 was outstanding under letters of credit.
F-21
PetSmart, Inc. and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)