Full Press Release Details
| Contacts: | ||
| Investor Relations | Media Relations | |
| Kristy Moser | Ventura Olvera | |
| Kristine.moser@petco.com | Ventura.olvera@petco.com |
FOR IMMEDIATE RELEASE: August 19, 2021
Petco Health + Wellness Company, Inc. announces record revenue and earnings with 20 percent comp growth and 30 percent on a
San Diego, August 19, 2021 Petco Health and Wellness Company, Inc. (Nasdaq: WOOF), a complete partner in pet health and wellness, today released
its financial results for its second quarter ended July 31, 2021.
In the second quarter of 2021, Petco delivered net revenue of $1.4 billion,
up 19 percent versus prior year. Net income improved by $67.7 million from prior year to $75.1 million or $0.28 per share. Trailing twelve month net income improved by $139.0 million from prior year to $79.9 million.
Adjusted Net Income1 increased $44.4 million from prior year to $67.5 million or $0.25 per share, while second quarter Adjusted
EBITDA1 increased by 19 percent from prior year to $155.1 million.
driven performance at the heart of all we do, our second quarter results reflect the strength of our differentiated model and continued focus on driving customer acquisition, increasing spend, fueling comp growth of 20 percent year-over-year and
30 percent on a two-year stack, said Ron Coughlin, Chairman and Chief Executive Officer of Petco. We exited Q2 with strong momentum while lapping robust double-digit comp growth. Looking
ahead, we re operating from a position of strength as we move into the second half, which gave us the confidence to raise our guidance. We believe we have significant runway for continued growth as we execute against our proven transformation
strategy in multi-year growth areas across services, veterinary care, digital, and owned and premium brands.
Additionally, in the first half of
2021 total debt remained roughly flat at $1.7 billion with Net Debt1 improving $73.4 million to $1.5 billion driven by net cash flow from operations of $202.4 million and Free
Cash Flow1 of $102.5 million, up 119 percent and 142 percent, respectively, from the first half of 2020. Also in the first half of 2021, Net Debt1 / Trailing Twelve Month Adjusted EBITDA1 decreased 16 percent or 0.5x to 2.7x driven by Free Cash Flow1 generation and growth in Adjusted EBITDA1.
Fiscal Q2 2021 Highlights:
Comparisons are second quarter of 2021 ended July 31, 2021 versus second quarter of 2020 ended August 1, 2020 unless otherwise noted
Fiscal 2021 Guidance:
The following guidance as of August 19, 2021 reflects the company s expectations for fiscal year 2021 unless otherwise indicated.
| Metric | Current Guidance | Prior Guidance | ||
| Net Revenue | $5.6 billion-$5.7 billion | $5.475 billion-$5.575 billion | ||
| Adjusted EBITDA 2 | $565 million-$575 million | $550 million-$560 million | ||
| Adjusted EPS 2 | $0.81-$0.85 | $0.73-$0.76 | ||
| Capital Expenditures 3 | Near top of prior range | $185 million-$235 million |
Assumptions in the guidance include that economic conditions, currency rates and the tax and regulatory landscape remain
generally consistent. The company continues to monitor those assumptions and any potential financial impacts. Adjusted EPS guidance assumes approximately $80 million of interest expense, a 26 percent tax rate and 266 million
weighted average diluted share count.
Earnings Conference Call Webcast Information:
company will host an earnings conference call on August 19, 2021 at 8:30 AM Eastern Time to discuss Petco s financial results. The conference call will be accessible through live webcast. Interested investors and other individuals can
access the webcast, earnings press release, and earnings presentation via the company s investor relations page at ir.petco.com/investor-relations. A replay of the webcast will be archived on the company s website through September 2,
2021 at 5:00 PM Eastern Time.
About Petco, The Health + Wellness Co.:
Petco is a category-defining health and wellness company focused on improving the lives of pets, pet parents and our own Petco partners. Since our founding in
1965, we ve been striving to set new standards in pet care, delivering comprehensive wellness solutions through our products and services, and creating communities that deepen the pet-pet parent bond. We
operate more than 1,500 Petco locations across the U.S., Mexico and Puerto Rico, including a growing network of more than 150 in-store veterinary hospitals, and offer a complete online resource for pet health
and wellness at petco.com and on the Petco app. In tandem with Petco Love (formerly the Petco Foundation), an independent nonprofit organization, we work with and support thousands of local animal welfare groups across the country and, through in-store adoption events, we ve helped find homes for more than 6.5 million animals.
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995 as contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, concerning expectations, beliefs plans, objectives, goals, strategies, future events or
performance and underlying assumptions and other statements that are not statements of historical fact, including statements regarding our environmental and other sustainability plans and goals, and potential acquisitions, investments and
dispositions. Although Petco believes that the expectations and assumptions reflected in these statements are reasonable, there can be no assurance that these expectations will prove to be correct. There can be no assurance that any forward-looking
results will occur or be realized, and nothing contained in this earnings release is, or should be relied upon as, a promise or representation or warranty as to any future matter, including any matter in respect of the operations or business or
financial condition of Petco. Such forward-looking statements can be identified by the use of forward-looking terms such as believes, expects, may, intends, will, shall,
should, anticipates, opportunity, illustrative , or the negative thereof or other variations thereon or comparable terminology. All forward-looking statements are based on assumptions or judgments about
future events that may or may not be correct or necessarily take place and that are by their nature subject to significant uncertainties and contingencies, many of which are outside the control of Petco.
looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from the potential results discussed in the
forward-looking statements, including, without limitation, those identified in this earnings release, the risk factors that Petco identifies in its Securities and Exchange Commission filings, as well as the following: (i) increased competition
(including from multi-channel retailers and e-Commerce providers); (ii) reduced consumer demand for our products and/or services; (iii) our reliance on key vendors; (iv) our ability to attract and
retain qualified employees; (v) risks arising from statutory, regulatory and/or legal developments; (vi) macroeconomic pressures in the markets in which we operate; (vii) failure to effectively manage our costs; (viii) our
reliance on our information technology systems; (ix) our ability to prevent or effectively respond to a privacy or security breach; (x) our ability to effectively manage strategic ventures, alliances or acquisitions; (xi) economic or
regulatory developments that might affect our ability to provide attractive promotional financing; (xii) interruptions and other supply chain issues; (xiii) catastrophic events, health crises, and pandemics, including the potential effects
that the ongoing COVID-19 pandemic and/or corresponding macroeconomic uncertainty could have on our financial position, results of operations and cash flows; (xiv) our ability to maintain positive brand
perception and recognition; (xv) product safety and quality concerns; (xvi) changes to labor or employment laws or regulations; (xvii) our ability to effectively manage our real estate portfolio; (xviii) constraints in the
capital markets or our vendor credit terms; and (xix) changes in our credit ratings. The occurrence of any such factors, events, or circumstances would significantly alter the results set forth in these statements.
Petco cautions that the foregoing list of important factors is not complete, and any forward-looking statements speak only as of the date they are made. Petco
undertakes no duty to update publicly any forward-looking statement that it may make, whether as a result of new information, future events or otherwise, except as may be required by applicable law, regulation or other competent legal authority.
PETCO HEALTH AND WELLNESS COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited and subject to reclassification)
| 13 Weeks Ended | ||||||||||||
| July 31, 2021 | August 1, 2020 | Percent Change | ||||||||||
| Net sales | $ | 1,434,534 | $ | 1,208,971 | 19 | % | ||||||
| Cost of sales | 835,124 | 679,218 | 23 | % | ||||||||
| Gross profit | 599,410 | 529,753 | 13 | % | ||||||||
| Selling, general and administrative expenses | 525,942 | 464,706 | 13 | % | ||||||||
| Operating income | 73,468 | 65,047 | 13 | % | ||||||||
| Interest income | (13 | ) | (99 | ) | (87 | %) | ||||||
| Interest expense | 19,206 | 54,493 | (65 | %) | ||||||||
| Other non-operating income | (45,162 | ) | N/M | |||||||||
| Income before income taxes and income from equity method investees | 99,437 | 10,653 | 833 | % | ||||||||
| Income tax expense | 27,011 | 4,958 | 445 | % | ||||||||
| Income from equity method investees | (2,429 | ) | (745 | ) | 226 | % | ||||||
| Net income | 74,855 | 6,440 | 1062 | % | ||||||||
| Net loss attributable to noncontrolling interest | (256 | ) | (1,001 | ) | (74 | %) | ||||||
| Net income attributable to Class A and B-1 common stockholders | $ | 75,111 | $ | 7,441 | 909 | % | ||||||
| Net income per Class A and B-1 common share: | ||||||||||||
| Basic | $ | 0.28 | $ | 0.04 | 699 | % | ||||||
| Diluted | $ | 0.28 | $ | 0.04 | 696 | % | ||||||
| Weighted average shares used in computing net income per Class A and B-1 common share: | ||||||||||||
| Basic | 264,216 | 209,015 | 26 | % | ||||||||
| Diluted | 265,217 | 209,015 | 27 | % |
PETCO HEALTH AND WELLNESS COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(Q2 2021 unaudited and subject to reclassification)
| July 31, 2021 | January 30, 2021 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 203,404 | $ | 111,402 | ||||
| Receivables, less allowance for credit losses 1 | 39,889 | 41,827 | ||||||
| Merchandise inventories, net | 628,491 | 538,675 | ||||||
| Prepaid expenses | 41,990 | 40,032 | ||||||
| Other current assets | 30,381 | 45,613 | ||||||
| Total current assets | 944,155 | 777,549 | ||||||
| Fixed assets | 1,586,677 | 1,487,987 | ||||||
| Less accumulated depreciation | (932,283 | ) | (860,440 | ) | ||||
| Fixed assets, net | 654,394 | 627,547 | ||||||
| Operating lease right-of-use assets | 1,314,533 | 1,328,108 | ||||||
| Goodwill | 2,182,465 | 2,179,310 | ||||||
| Trade name | 1,025,000 | 1,025,000 | ||||||
| Other intangible assets | 4,793 | 4,793 | ||||||
| Less accumulated amortization | (4,251 | ) | (4,079 | ) | ||||
| Other intangible assets, net | 542 | 714 | ||||||
| Other long-term assets | 194,092 | 137,474 | ||||||
| Total assets | $ | 6,315,181 | $ | 6,075,702 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and book overdrafts | $ | 406,685 | $ | 339,485 | ||||
| Accrued salaries and employee benefits | 123,721 | 129,484 | ||||||
| Accrued expenses and other liabilities | 210,517 | 145,846 | ||||||
| Current portion of operating lease liabilities | 248,631 | 258,289 | ||||||
| Current portion of long-term debt and other lease liabilities | 20,235 | 2,203 | ||||||
| Total current liabilities | 1,009,789 | 875,307 | ||||||
| Senior secured credit facilities, net, excluding current portion | 1,646,463 | 1,646,281 | ||||||
| Operating lease liabilities, excluding current portion | 1,070,063 | 1,083,575 | ||||||
| Deferred taxes, net | 293,611 | 280,920 | ||||||
| Other long-term liabilities | 135,873 | 134,354 | ||||||
| Total liabilities | 4,155,799 | 4,020,437 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders equity: | ||||||||
| Class A common stock 2 | 226 | 226 | ||||||
| Class B-1 common stock 3 | 38 | 38 | ||||||
| Class B-2 common stock 4 | ||||||||
| Preferred stock 5 | ||||||||
| Additional paid-in-capital | 2,115,220 | 2,092,110 | ||||||
| Retained earnings (accumulated deficit) | 60,420 | (22,251 | ) | |||||
| Accumulated other comprehensive loss | (1,272 | ) | (1,275 | ) | ||||
| Total stockholders equity | 2,174,632 | 2,068,848 | ||||||
| Noncontrolling interest | (15,250 | ) | (13,583 | ) | ||||
| Total equity | 2,159,382 | 2,055,265 | ||||||
| Total liabilities and equity | $ | 6,315,181 | $ | 6,075,702 |
PETCO HEALTH AND WELLNESS COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
subject to reclassification)
| 26 Weeks Ended | ||||||||
| July 31, 2021 | August 1, 2020 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | 81,004 | $ | (26,932 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 82,845 | 86,038 | ||||||
| Amortization of debt discounts and issuance costs | 3,369 | 12,125 | ||||||
| Provision for deferred taxes | 12,691 | (21,753 | ) | |||||
| Equity-based compensation | 23,110 | 4,617 | ||||||
| Impairments, write-offs and losses on sale of fixed and other assets | 2,690 | 6,261 | ||||||
| Loss on extinguishment and modification of debt | 20,838 | |||||||
| Income from equity method investees | (4,854 | ) | (1,077 | ) | ||||
| Amounts reclassified out of accumulated other comprehensive income | 5,066 | |||||||
| Change in contingent consideration obligation | (391 | ) | ||||||
| Non-cash operating lease costs | 210,490 | 216,729 | ||||||
| Other non-operating income | (45,162 | ) | ||||||
| Changes in assets and liabilities: | ||||||||
| Receivables | 1,937 | (5,208 | ) | |||||
| Merchandise inventories | (89,784 | ) | (11,056 | ) | ||||
| Prepaid expenses and other assets | 3,294 | (9,153 | ) | |||||
| Accounts payable and book overdrafts | 74,466 | (18,955 | ) | |||||
| Accrued salaries and employee benefits | (6,017 | ) | 3,116 | |||||
| Accrued expenses and other liabilities | 51,145 | 35,747 | ||||||
| Operating lease liabilities | (220,655 | ) | (196,700 | ) | ||||
| Other long-term liabilities | 997 | 13,915 | ||||||
| Net cash provided by operating activities | 202,404 | 92,389 | ||||||
| Cash flows from investing activities: | ||||||||
| Cash paid for fixed assets | (99,883 | ) | (50,043 | ) | ||||
| Cash paid for acquisitions, net of cash acquired | (2,807 | ) | ||||||
| Distributions from equity investees | 73 | |||||||
| Proceeds from sale of assets | 105 | 1,296 | ||||||
| Net cash used in investing activities | (102,585 | ) | (48,674 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Borrowings under long-term debt agreements | 1,700,000 | 440,000 | ||||||
| Repayments of long-term debt | (1,682,361 | ) | (456,625 | ) | ||||
| Debt refinancing costs and original issue discount | (24,665 | ) | ||||||
| Payments for finance lease liabilities | (2,044 | ) | (2,089 | ) | ||||
| Proceeds from employee stock purchase plan | 1,721 | |||||||
| Repurchase of equity | (105 | ) | ||||||
| Payment of contingent consideration | (250 | ) | ||||||
| Payment of offering costs | (3,844 | ) | ||||||
| Net cash used in financing activities | (11,193 | ) | (19,069 | ) | ||||
| Net increase in cash, cash equivalents and restricted cash | 88,626 | 24,646 | ||||||
| Cash, cash equivalents and restricted cash at beginning of period | 119,540 | 154,718 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 208,166 | $ | 179,364 |
NON-GAAP FINANCIAL MEASURES
The following information provides definitions and reconciliations of the non-GAAP financial measures presented in this
earnings release to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The company has provided this non-GAAP financial
information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in the earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in the earnings release.
The non-GAAP financial measures in the earnings release may differ from similarly titled measures used by other companies.
Adjusted EBITDA, including Trailing
Twelve Month Adjusted EBITDA, is considered a non-GAAP financial measure under the SEC s rules because it excludes certain charges included in net income (loss) calculated in accordance with GAAP.
Management believes that Adjusted EBITDA is a meaningful measure to share with investors because it best allows comparison of the current period performance with that of the comparable period. In addition, Adjusted EBITDA affords investors a view of
what management considers Petco s operating performance to be as well as the ability to make a more informed assessment of such operating performance as compared with that of the prior period.
Please see the company s 10-K filed on April 5, 2021 for additional information on the reconciliation of Net
Income (Loss) Attributable to Class A and B-1 Common Stockholders to Adjusted EBITDA. The tables below reflect the calculation of Adjusted EBITDA for the thirteen weeks and trailing twelve months ended
July 31, 2021 compared to the prior year quarter and twelve-month period ended August 1, 2020, respectively, as well as the twelve month period ended January 30, 2021.
| (Dollars in thousands) | 13 Weeks Ended | |||||||
| Reconciliation of Net Income Attributable to Class A and B-1 Common Stockholders to Adjusted EBITDA | July 31, 2021 | August 1, 2020 | ||||||
| Net income attributable to Class A and B-1 common stockholders | $ | 75,111 | $ | 7,441 | ||||
| Add (deduct): | ||||||||
| Interest expense, net | 19,193 | 54,394 | ||||||
| Income tax expense | 27,011 | 4,958 | ||||||
| Depreciation and amortization | 41,238 | 42,471 | ||||||
| Income from equity method investees | (2,429 | ) | (745 | ) | ||||
| Asset impairments and write offs | 1,743 | 2,852 | ||||||
| Equity-based compensation | 11,506 | 2,312 | ||||||
| Other non-operating income | (45,162 | ) | ||||||
| Mexico joint venture EBITDA (1) | 5,856 | 3,483 | ||||||
| Store pre-opening expenses | 3,488 | 1,477 | ||||||
| Store closing expenses | 962 | 2,609 | ||||||
| Non-cash occupancy-related costs (2) | 2,885 | 5,969 | ||||||
| Non-recurring costs (3) | 13,671 | 3,591 | ||||||
| Adjusted EBITDA | $ | 155,073 | $ | 130,812 | ||||
| Net sales | $ | 1,434,534 | $ | 1,208,971 | ||||
| Net margin (4) | 5.2 | % | 0.6 | % | ||||
| Adjusted EBITDA Margin | 10.8 | % | 10.8 | % |
| (Dollars in thousands) | Trailing Twelve Months | |||||||||||
| Reconciliation of Net Income (Loss) Attributable to Class A and B-1 Common Stockholders to Adjusted EBITDA | July 31, 2021 | January 30, 2021 | August 1, 2020 | |||||||||
| Net income (loss) attributable to Class A and B-1 common stockholders | $ | 79,915 | $ | (26,483) | $ | (59,117) | ||||||
| Add (deduct): | ||||||||||||
| Interest expense, net | 143,113 | 218,430 | 238,799 | |||||||||
| Income tax expense (benefit) | 31,950 | (3,337 | ) | (21,439 | ) | |||||||
| Depreciation and amortization | 171,643 | 174,836 | 173,968 | |||||||||
| Income from equity method investees | (10,259 | ) | (6,482 | ) | (3,080 | ) | ||||||
| Loss on debt extinguishment and modification | 38,387 | 17,549 | ||||||||||
| Goodwill & indefinite-lived intangible impairment | 19,000 | |||||||||||
| Asset impairments and write offs | 12,035 | 15,606 | 12,448 | |||||||||
| Equity-based compensation | 31,408 | 12,915 | 9,854 | |||||||||
| Other non-operating income | (45,162 | ) | ||||||||||
| Mexico joint venture EBITDA (1) | 23,434 | 19,074 | 15,582 | |||||||||
| Store pre-opening expenses | 13,360 | 9,228 | 8,257 | |||||||||
| Store closing expenses | 6,211 | 7,782 | 7,110 | |||||||||
| Non-cash occupancy-related costs (2) | 10,095 | 19,240 | 26,684 | |||||||||
| Non-recurring costs (3) | 41,389 | 25,990 | 21,285 | |||||||||
| Adjusted EBITDA | $ | 547,519 | $ | 484,348 | $ | 449,351 | ||||||
| Net sales | $ | 5,447,238 | $ | 4,920,202 | $ | 4,564,217 | ||||||
| Net margin (4) | 1.5 | % | (0.5 | %) | (1.3 | %) | ||||||
| Adjusted EBITDA Margin | 10.1 | % | 9.8 | % | 9.8 | % |
Adjusted Net Income and Adjusted EPS
Adjusted Net Income and Adjusted diluted earnings per share attributable to Petco (Adjusted Net Income and Adjusted EPS respectively) are considered non-GAAP financial measures under the SEC s rules because they exclude certain amounts included in the net income (loss) attributable to common stockholders and diluted earnings per share attributable to Petco
calculated in accordance with GAAP (net income (loss) and EPS respectively), the most directly comparable financial measures calculated in accordance with GAAP. Management believes that Adjusted Net Income and Adjusted EPS are meaningful measures to
share with investors because they best allow comparison of the current period performance with that of the comparable period. In addition, Adjusted Net Income and Adjusted EPS afford investors a view of what management considers Petco s
earnings performance to be as well as the ability to make a more informed assessment of such earnings performance with that of the prior period.
tables below reflect the calculation of Adjusted Net Income (Loss) and Adjusted EPS for the thirteen weeks ended July 31, 2021 compared to the prior year quarter ended August 1, 2020.
| (In thousands, except per share amounts) | 13 Weeks Ended | |||||||||||||||
| Reconciliation of Diluted EPS to Adjusted EPS | July 31, 2021 | August 1, 2020 | ||||||||||||||
| Amount | Per share | Amount | Per share | |||||||||||||
| Net income attributable to common stockholders / diluted EPS | $ | 75,111 | $ | 0.28 | $ | 7,441 | $ | 0.04 | ||||||||
| Add (deduct): | ||||||||||||||||
| Income tax expense | 27,011 | 0.10 | 4,958 | 0.02 | ||||||||||||
| Asset impairments and write offs | 1,743 | 0.01 | 2,852 | 0.01 | ||||||||||||
| Equity-based compensation | 11,506 | 0.04 | 2,312 | 0.01 | ||||||||||||
| Other non-operating income | (45,162 | ) | (0.17 | ) | ||||||||||||
| Store pre-opening expenses | 3,488 | 0.01 | 1,477 | 0.01 | ||||||||||||
| Store closing expenses | 962 | 0.01 | 2,609 | 0.01 | ||||||||||||
| Non-cash occupancy-related costs (2) | 2,885 | 0.01 | 5,969 | 0.03 | ||||||||||||
| Non-recurring costs (3) | 13,671 | 0.05 | 3,591 | 0.02 | ||||||||||||
| Adjusted pre-tax income / diluted earnings per share | $ | 91,215 | $ | 0.34 | $ | 31,209 | $ | 0.15 | ||||||||
| Income tax expense at 26% normalized tax rate | 23,716 | 0.09 | 8,114 | 0.04 | ||||||||||||
| Adjusted Net Income / Adjusted EPS | $ | 67,499 | $ | 0.25 | $ | 23,095 | $ | 0.11 |
Flow is a non-GAAP financial measure that is calculated as net cash generated by operations less cash paid for fixed assets. Management believes that Free Cash Flow, which measures the ability to generate
additional cash from business operations, is an important financial measure for use in evaluating the company s financial performance.
other companies report their Free Cash Flow, numerous methods exist for calculating a company s Free Cash Flow. As a result, the method used by Petco s management to calculate Free Cash Flow may differ from the methods used by other
companies to calculate their Free Cash Flow.
The following table sets forth a reconciliation of Free Cash Flow to net cash provided by (used in)
operating activities, which Petco believes to be the GAAP financial measure most directly comparable to Free Cash Flow. The table below reflects the calculation of Free Cash Flow for the thirteen and twenty six weeks ended July 31, 2021
compared to the thirteen and twenty six weeks ended August 1, 2020.
| (in thousands) | 13 Weeks Ended | 26 Weeks Ended | ||||||||||||||
| July 31, 2021 | August 1, 2020 | July 31, 2021 | August 1, 2020 | |||||||||||||
| Net cash provided by operating activities | $ | 87,402 | $ | 124,678 | $ | 202,404 | $ | 92,389 | ||||||||
| Cash paid for fixed assets | (52,532 | ) | (22,148 | ) | (99,883 | ) | (50,043 | ) | ||||||||
| Free Cash Flow | $ | 34,870 | $ | 102,530 | $ | 102,521 | $ | 42,346 |
Net Debt is a non-GAAP financial measure that is calculated as the sum of current and
non-current debt, less cash and cash equivalents. Management considers this adjustment useful because it reduces the volatility of total debt caused by fluctuations between cash paid against the company s
revolving credit facility and cash held on hand in cash and cash equivalents.
Although other companies report their Net Debt, numerous methods exist for
calculating a company s Net Debt. As a result, the method used by Petco s management to calculate Net Debt may differ from the methods used by other companies to calculate their Net Debt.