Petsmart 2009 Annual Report Download - page 62

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Our investment consisted of voting common stock, comprising 21.4% of all voting stock as of January, 31,
2010, and 21.5% of all voting stock as of February 1, 2009. Our ownership percentage as of January 31, 2010, and
February 1, 2009, considering all classes of stock (voting and non-voting), was 21.0%.
Of the 4.7 million shares of voting stock of Banfield, we held:
(a) 2.9 million shares of voting preferred stock that may be converted into voting common stock at any
time at our option; and
(b) 1.8 million shares of voting common stock.
Banfield’s financial data is summarized as follows (in thousands):
January 31,
2010
February 1,
2009
Current assets .............................................. $269,381 $187,066
Noncurrent assets ........................................... 122,934 121,932
Current liabilities ........................................... 247,138 196,070
Noncurrent liabilities ........................................ 16,216 14,070
January 31,
2010
February 1,
2009
February 3,
2008
Year Ended
(52 weeks) (52 weeks) (53 weeks)
Net sales ....................................... $617,508 $448,528 $407,634
Gross profit ..................................... 146,292 98,649 83,806
Net income ..................................... $ 29,723 $ 13,626 $ 7,898
We have a master operating agreement with Banfield which covers license fees, utilities and other cost
reimbursements. We charge Banfield license fees for the space used by the veterinary hospitals and for their portion
of utilities costs. These amounts are classified as a reduction of the retail stores’ occupancy costs, which are
included as a component of cost of merchandise sales in the Consolidated Statements of Operations and
Comprehensive Income. We also charge Banfield for its portion of specific operating expenses and classify the
reimbursement as a reduction of the retail stores’ operating expense.
We recognized license fees, utilities and other cost reimbursements of $33.2 million, $30.1 million and
$32.9 million during 2009, 2008 and 2007, respectively. Receivables from Banfield totaled $2.4 million and
$3.3 million at January 31, 2010, and February 1, 2009, 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 a hospital operated by Banfield. The net sales and gross profit on the sale of
therapeutic pet foods is not material to our consolidated financial statements.
F-14
PetSmart, Inc. and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)