Petsmart 2004 Annual Report Download - page 49

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by entities aÇliated with Carrefour SA, and we oÅered 1,317,416 shares, plus the shares in the over-allotment
option.
On August 5, 2002, we completed the sale of the 1,317,416 shares of common stock for $13.40 per share,
resulting in proceeds, net of underwriting fees, of approximately $16.9 million. On August 12, 2002, the
underwriters exercised the over-allotment option and purchased 2,175,000 additional shares for $13.40 per
share, resulting in proceeds, net of underwriting fees, of approximately $27.8 million. We incurred costs
associated with the oÅering of approximately $0.8 million.
Operating Capital and Capital Expenditure Requirements
Substantially all our stores are leased facilities. We opened 83 net new stores in Ñscal 2004. Generally,
each new store requires capital expenditures of approximately $0.9 million for Ñxtures, equipment and
leasehold improvements, approximately $0.3 million for inventory and approximately $0.1 million for
preopening costs. We expect capital spending to be approximately $220 million to $230 million for 2005, based
on our current plan to open 100 net new stores and twelve new PETsHOTELs, to Ñxture and equip a new
warehouse in Illinois, to continue our investment in the development of our information systems and to add to
our services capacity with the expansion of certain grooming salons.
We believe our existing cash and cash equivalents, together with cash Öows from operations, borrowing
capacity under our bank credit facility and available lease Ñnancing, will provide adequate funds for our
foreseeable working capital needs, planned capital expenditures and debt service obligations. Our ability to
fund our operations, make planned capital expenditures, scheduled debt payments and reÑnance indebtedness
depends on our future operating performance and cash Öow, which are subject to prevailing economic
conditions and to Ñnancial, business and other factors, some of which are beyond our control.
Lease and Other Commitments
Operating and Capital Lease Commitments and Purchase Obligations
The following table summarizes our contractual obligations, net of estimated sublease income, and
including obligations for executed agreements for which we do not yet have the right to control the use of the
property at January 30, 2005, and the eÅect that such obligations are expected to have on our liquidity and
cash Öows in future periods (in thousands):
Payments Due in Fiscal Year
2006 & 2008 & 2010 and
Contractual Obligation(1) 2005 2007 2009 Beyond Total
Operating lease obligations ÏÏÏÏÏ $204,303 $424,523 $402,940 $1,100,178 $2,131,944
Capital lease obligations(2)ÏÏÏÏÏ 31,394 69,938 70,641 333,573 505,546
Purchase obligations(3) ÏÏÏÏÏÏÏÏ 7,366 Ì Ì Ì 7,366
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $243,063 $494,461 $473,581 $1,433,751 $2,644,856
(1) At January 30, 2005, we had no long-term debt other than capital lease obligations.
(2) Includes $229.4 million in interest.
(3) Represents purchase obligation for advertising.
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