Pottery Barn 2005 Annual Report Download - page 41

outstanding under the credit facility. We believe our cash on-hand, in addition to our available credit facilities,
will provide adequate liquidity for our business operations and growth opportunities over the following twelve-
month period.
In fiscal 2005, net cash provided by operating activities was $348,373,000 as compared to net cash provided by
operating activities of $304,437,000 in fiscal 2004. Cash provided by operating activities in fiscal 2005 was
primarily attributable to net earnings, an increase in deferred rent and lease incentives due to new store openings,
and an increase in customer deposits due to growth in unredeemed gift certificates. This was partially offset by
an increase in merchandise inventories in order to support the increase in sales in our core and emerging brands
and an increase in our leased and selling square footage of 8.6% and 7.9%, respectively.
In fiscal 2004, net cash provided by operating activities was $304,437,000 as compared to net cash provided by
operating activities of $209,351,000 in fiscal 2003. The cash provided by operating activities in fiscal 2004 was
primarily attributable to net earnings, an increase in our deferred rent and lease incentives due to an increase in
retail store openings, an increase in customer deposits due to an increase in unredeemed gift certificates and an
increase in accounts payable due to an increase in accrued freight and the timing of expenditures, offset primarily
by an increase in merchandise inventories. Our merchandise inventories increased in fiscal 2004 in order to
support the increase in sales in our core and emerging brands and an increase in our leased and selling square
footage of 11.4% and 10.9%, respectively.
Net cash used in investing activities was $151,788,000 for fiscal 2005 as compared to $181,453,000 in fiscal
2004. Fiscal 2005 purchases of property and equipment were $151,788,000, comprised of $90,602,000 for 30
new and 8 remodeled stores, $39,602,000 for systems development projects (including e-commerce websites)
and $21,584,000 for distribution, facility infrastructure and other projects.
In fiscal 2006, we anticipate investing $170,000,000 to $190,000,000 in the purchase of property and equipment,
primarily for the construction of 28 new stores and 22 remodeled or expanded stores, systems development
projects (including e-commerce websites), and distribution, facility infrastructure and other projects.
Net cash used in investing activities was $181,453,000 for fiscal 2004 as compared to $211,979,000 in fiscal
2003. Fiscal 2004 purchases of property and equipment were $181,453,000, comprised of $83,272,000 for 43
new and 17 remodeled or expanded stores, $53,830,000 for systems development projects (including
e-commerce websites) and $44,351,000 for distribution, facility infrastructure and other projects (including the
purchase of a corporate aircraft for approximately $11,500,000, previously leased under an operating lease).
For fiscal 2005, cash used in financing activities was $75,808,000, comprised primarily of $93,921,000 for the
repurchase of common stock and $9,235,000 for the repayment of long-term obligations, including capital leases
and long-term debt, partially offset by $28,002,000 in proceeds from the exercise of stock options.
For fiscal 2004, cash used in financing activities was $48,207,000, comprised primarily of $79,320,000 for the
repurchase of common stock and $9,789,000 for the repayment of long-term obligations, including capital leases
and long-term debt, partially offset by $26,190,000 in proceeds from the exercise of stock options and
$15,000,000 in proceeds from the issuance of our Mississippi industrial development bonds associated with the
Mississippi Debt Transaction. See Note C to our Consolidated Financial Statements.
Stock Repurchase Program
In May 2005, our Board of Directors authorized a stock repurchase program to acquire up to 2,000,000 additional
shares of our outstanding common stock. During the fourth quarter of fiscal 2005, we repurchased and retired
780,800 shares at a weighted average cost of $41.70 per share and a total cost of approximately $32,556,000.
During fiscal 2005, we repurchased and retired a total of 2,422,300 shares at a weighted average cost of $38.77
per share and a total cost of approximately $93,921,000. As of fiscal year-end, the remaining authorized number
of shares eligible for repurchase was 20,000. During the first quarter of fiscal 2006, we repurchased and retired
these shares at a weighted average cost of $38.84 per share and a total cost of approximately $777,000, which
completed all stock repurchase programs previously authorized by our Board of Directors.
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Form 10-K