Petsmart 2007 Annual Report Download - page 65

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MMIH’s year end financial data, which is recorded one month in arrears, is summarized as follows (in
thousands):
As of
February 3, 2008
As of
February 4, 2007
Current assets ....................................... $163,083 $129,105
Noncurrent assets .................................... 120,204 108,209
Current liabilities .................................... 183,540 162,957
Noncurrent liabilities .................................. 13,631 10,001
February 3,
2008
February 4,
2007
January 29,
2006
Year Ended
(52 weeks) (53 weeks) (52 weeks)
Net sales ....................................... $407,634 $336,464 $271,667
Gross profit ..................................... 52,104 55,962 48,221
Income from continuing operations, before minority
interest ....................................... 7,898 10,702 9,767
Net income before minority interest ................... $ 7,898 $ 9,763 $ 8,281
In June 2007, we entered into a new master operating agreement with MMIH that has an initial 15-year term
and was retroactive to February 2007. We charge MMIH license fees for the space used by the veterinary hospitals
and for their portion of utilities costs. We treat these amounts as a reduction of the retail stores’ occupancy costs,
which are included as a component of cost of sales in the Consolidated Statements of Operations and Compre-
hensive Income. We also charge MMIH for its portion of specific operating expenses and treat the reimbursement as
a reduction of the stores’ operating expense.
We recognized license fees, utilities and other cost reimbursements of $32.9 million, $21.4 million and
$16.3 million during 2007, 2006 and 2005, respectively. Receivables from MMIH totaled $4.5 million and
$6.9 million at February 3, 2008 and January 28, 2007, respectively, and were included in receivables in the
Consolidated Balance Sheets.
The master operating agreement also includes a provision for the sharing of profits on the sales of therapeutic
pet foods sold in all stores with an operating Banfield hospital.
F-15
PetSmart, Inc. and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)