SAN DIEGO, March 8, 2022 /PRNewswire/ -- Petco Health and Wellness Company, Inc. (Nasdaq: WOOF), a complete partner in pet health and wellness, today released its financial results for fourth quarter and fiscal year 2021 ended January 29, 2022.

Petco logo (PRNewsfoto/Petco Health and Wellness Company, Inc.)

In the fourth quarter of 2021, Petco delivered net revenue of $1.5 billion, up 13 percent versus prior year. Net income improved by $35.2 million from prior year to $29.0 million or $0.11 per share. Adjusted Net Income1 for the fourth quarter increased $38.2 million to $75.1 million or $0.28 per share, up $0.11 or 65 percent3 from prior year, while Adjusted EBITDA1 increased by $23.6 million or 16 percent2 from prior year to $172.2 million.

Net revenue for full year 2021 increased 18 percent or $886.9 million to $5.8 billion.  Net income improved by $190.9 million from prior year to $164.4 million or $0.62 per share.  Adjusted Net Income1 for the year increased $183.0 million from prior year to $241.1 million or $0.91 per share, while Adjusted EBITDA1 increased by $107.1 million or 22 percent2 from prior year to $591.5 million.

"Our results for the quarter and full year demonstrate that our focus on long-term, sustainable growth, powered by continued delivery against our strategic growth opportunities, is working," said Ron Coughlin, Chairman and CEO of Petco. "We enter this fiscal year as a stronger company than ever. Our category remains strong and resilient; our competitive moats are deepening, and our world-class team is executing to deliver purpose driven performance. With an integrated omnichannel infrastructure, robust services offering including 197 veterinary hospitals, and millions of net new customers, we're well positioned to drive enhanced long-term shareholder value."

Additionally, total debt remained roughly flat throughout 2021 at $1.7 billion with Net Debt1 improving $72.9 million to $1.5 billion driven by net cash flow from operations of $358.2 million and Free Cash Flow1 of $119.1 million, up 33 percent and 9 percent, respectively, from fiscal year 2020. Throughout 2021, Net Debt1 / Trailing Twelve Month Adjusted EBITDA1 decreased 22 percent    or 0.7x to 2.5x driven by Free Cash Flow1 generation and growth in Adjusted EBITDA1.

Fiscal Q4 2021 Highlights:
Comparisons are fourth quarter of 2021 ended January 29, 2022 versus fourth quarter of 2020 ended January 30, 2021 unless otherwise noted

  • Net revenue increased 13 percent to $1.5 billion driven by comparable sales growth of 14 percent
  • Net income increased $35.2 million to $29.0 million or $0.11 per share
  • Adjusted Net Income1 increased $38.2 million to $75.1 million or $0.28 per share
  • Adjusted EBITDA1 increased $23.6 million to $172.2 million

Fiscal Year 2021 Highlights:
Comparisons are fiscal year of 2021 ended January 29, 2022 versus fiscal year of 2020 ended January 30, 2021 unless otherwise noted

  • Net sales increased 18 percent to $5.8 billion driven by comparable sales growth of 19 percent
  • Net income increased $190.9 million to $164.4 million or $0.62 per share
  • Adjusted Net Income1 increased $183.0 million to $241.1 million or $0.91 per share
  • Adjusted EBITDA1 increased $107.1 million to $591.5 million
  • Net cash provided by operating activities increased $89.6 million to $358.2 million
  • Free Cash Flow1 increased $10.1 million to $119.1 million
  • Total Debt increased $27.3 million to $1.7 billion
  • Net Debt1 decreased $72.9 million to $1.5 billion
  • Net Debt1 / Adjusted EBITDA1 improved by 0.7, to 2.5x
  • Ended 2021 with 1,433 Pet Care Centers in the U.S. and Puerto Rico, 197 Full-Service Vet Hospitals within Pet Care Centers, and 108 Pet Care Centers in Mexico

Fiscal 2022 Guidance:
The following guidance as of March 8, 2022 reflects the company's expectations for fiscal year 2022.

Metric

Current Guidance

Net Revenue

$6.15 - $6.25 billion

Adjusted EBITDA3

$630 - $645 million

Adjusted EPS3

$0.97 - $1.00

Capital Expenditures

$275 - $325 million

Assumptions in the guidance include that economic conditions, currency rates and the tax and regulatory landscape remain generally consistent. Adjusted EPS guidance assumes approximately $76  million of interest expense, a 26 percent tax rate and a 267 million weighted average diluted share count.

(1)

Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, Free Cash Flow, Net Debt, and Trailing Twelve Month Adjusted EBITDA are non-GAAP financial measures. See "Non-GAAP Financial Measures" for additional information on non-GAAP financial measures and a reconciliation to the most comparable GAAP measures.

(2)

Net Income increased $35.2 million or 571 percent and $190.9 million or 721 percent versus prior year for the fourth quarter and fiscal year, respectively. 

(3)

Fourth quarter earnings per share increased $0.14 or 467 percent

(4)

We have not reconciled Adjusted EBITDA and Adjusted EPS outlook to the most comparable GAAP outlook because it is not possible to do so without unreasonable efforts due to the uncertainty and potential variability of reconciling items, which are dependent on future events and often outside of management's control and which could be significant. Because such items cannot be reasonably predicted with the level of precision required, we are unable to provide outlook for the comparable GAAP measures. Forward- looking estimates of Adjusted EBITDA and Adjusted EPS are made in a manner consistent with the relevant definitions and assumptions noted herein.

Earnings Conference Call Webcast Information:

The company will host an earnings conference call on March 8, 2022 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 release, earnings presentation, and infographic via the company's investor relations page at ir.petco.com. A replay of the webcast will be archived on the company's investor relations page through March 22, 2022 at approximately 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.

Forward-Looking Statements:

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 fiscal year 2022 guidance, our growth plans, and execution on our transformation initiatives. Such forward-looking statements can generally 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. 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 or that any forward-looking results will occur or be realized. 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. All forward-looking statements are based on expectations and assumptions 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. Forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results or events to differ materially from the potential results or events discussed in the forward-looking statements, including, without limitation, those identified in this earnings release 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 including inflation; (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 or integrate strategic ventures, alliances or acquisitions and realize the anticipated benefits of such transactions; (xi) economic or regulatory developments that might affect our ability to provide attractive promotional financing; (xii) business interruptions and other supply chain issues; (xiii) catastrophic events, political tensions, conflicts and wars (such as the ongoing conflict in Ukraine), 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; (xix) changes in our credit ratings; and (xx) the other risks, uncertainties and other factors identified under "Risk Factors" and elsewhere in Petco's Securities and Exchange Commission filings. The occurrence of any such factors could significantly alter the results set forth in these statements.

Petco cautions that the foregoing list of risks, uncertainties and other factors is not complete, and forward-looking statements speak only as of the date they are made. Petco undertakes no duty to update publicly any such forward-looking statement, 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.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited and subject to reclassification)
















13 Weeks Ended


52 Weeks Ended



January 29,
2022


January 30,
2021


Percent
Change


January 29,
2022


January 30,
2021


Percent
Change

Net sales


$ 1,514,357


$ 1,337,713


13%


$ 5,807,149


$ 4,920,202


18%

Cost of sales


878,851


768,448


14%


3,380,539


2,813,464


20%

Gross profit


635,506


569,265


12%


2,426,610


2,106,738


15%

Selling, general and administrative expenses


552,601


502,290


10%


2,160,539


1,912,314


13%

Operating income


82,905


66,975


24%


266,071


194,424


37%

Interest income


(9)


(321)


(97%)


(62)


(653)


(91%)

Interest expense


18,893


49,987


(62%)


77,397


219,083


(65%)

Loss on extinguishment and modification of debt



17,549


(100%)


20,838


17,549


19%

Other non-operating loss (income)


30,437



N/M


(34,497)



N/M

Income (loss) before income taxes and income from 
equity method investees


33,584


(240)


N/M


202,395


(41,555)


N/M

Income tax expense (benefit)


9,689


10,200


(5%)


53,473


(3,337)


N/M

Income from equity method investees


(3,393)


(3,530)


(4%)


(10,883)


(6,482)


68%

Net income (loss)


27,288


(6,910)


N/M


159,805


(31,736)


N/M

Net loss attributable to noncontrolling interest


(1,706)


(751)


127%


(4,612)


(5,253)


(12%)

Net income (loss) attributable to Class A and B-1 common 
stockholders


$       28,994


$        (6,159)


N/M


$     164,417


$     (26,483)


N/M














Net income (loss) per Class A and B-1 common share:













Basic


$        0.11


$       (0.03)


N/M


$        0.62


$       (0.13)


N/M

Diluted


$        0.11


$       (0.03)


N/M


$        0.62


$       (0.13)


N/M














Weighted average shares used in computing net income (loss)
per Class A and B-1 common share:













Basic


264,384


215,687


23%


264,261


210,683


25%

Diluted


265,785


215,687


23%


265,338


210,683


26%

 

PETCO HEALTH AND WELLNESS COMPANY, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(Unaudited and subject to reclassification)






 January 29,
2022 


 January 30,
2021 

ASSETS





Current assets:





Cash and cash equivalents


$   211,602


$   111,402

Receivables, less allowance for credit losses1


55,618


41,827

Merchandise inventories, net


675,111


538,675

Prepaid expenses


42,355


40,032

Other current assets


86,091


45,613

Total current assets


1,070,777


777,549

Fixed assets, net


726,922


627,547

Operating lease right-of-use assets


1,338,465


1,328,108

Goodwill


2,183,991


2,179,310

Trade name


1,025,000


1,025,000

Other long-term assets


152,786


138,188

Total assets


$ 6,497,941


$ 6,075,702

LIABILITIES AND EQUITY





Current liabilities:





Accounts payable and book overdrafts


$   403,976


$   339,485

Accrued salaries and employee benefits


150,630


129,484

Accrued expenses and other liabilities


210,872


145,846

Current portion of operating lease liabilities


265,897


258,289

Current portion of long-term debt and other lease liabilities


21,764


2,203

Total current liabilities


1,053,139


875,307

Senior secured credit facilities, net, excluding current portion


1,640,390


1,646,281

Operating lease liabilities, excluding current portion


1,096,133


1,083,575

Deferred taxes, net


318,355


280,920

Other long-term liabilities


134,105


134,354

Total liabilities


4,242,122


4,020,437

Commitments and contingencies





Stockholders' equity:





Class A common stock2


227


226

Class B-1 common stock3


38


38

Class B-2 common stock4



Preferred stock5



Additional paid-in-capital


2,133,821


2,092,110

Retained earnings (accumulated deficit)


142,166


(22,251)

Accumulated other comprehensive loss


(2,238)


(1,275)

Total stockholders' equity


2,274,014


2,068,848

Noncontrolling interest


(18,195)


(13,583)

Total equity


2,255,819


2,055,265

Total liabilities and equity


$ 6,497,941


$ 6,075,702



(1)

Allowances for credit losses are $931 and $3,267, respectively

(2)

Class A common stock, $0.001 par value: Authorized - 1.0 billion shares; Issued and outstanding - 227.2 million and 226.4 million shares, respectively

(3)

Class B-1 common stock, $0.001 par value: Authorized - 75.0 million shares; Issued and outstanding - 37.8 million shares

(4)

Class B-2 common stock, $0.000001 par value: Authorized - 75.0 million shares; Issued and outstanding - 37.8 million shares,

(5)

Preferred stock, $0.001 par value: Authorized - 25.0 million shares; Issued and outstanding - none

 

PETCO HEALTH AND WELLNESS COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited and subject to reclassification)








52 Weeks Ended



January 29,
2022


January 30,
2021

Cash flows from operating activities:





Net income (loss)


$   159,805


$    (31,736)

Adjustments to reconcile net income (loss) to net cash provided by
  operating activities:





Depreciation and amortization


172,431


174,836

Amortization of debt discounts and issuance costs


5,796


24,237

Provision for deferred taxes


37,741


25,548

Equity-based compensation


49,265


12,915

Impairments, write-offs and losses on sale of fixed and other assets


10,918


15,606

Loss on extinguishment and modification of debt


20,838


17,549

Income from equity method investees


(10,883)


(6,482)

Amounts reclassified out of accumulated other comprehensive income



10,793

Change in contingent consideration obligation



(398)

Non-cash operating lease costs


422,465


430,359

Other non-operating income


(34,497)


Changes in assets and liabilities:





Receivables


(13,791)


(10,311)

Merchandise inventories


(136,404)


(60,635)

Prepaid expenses and other assets


(17,664)


(13,842)

Accounts payable and book overdrafts


71,775


46,303

Accrued salaries and employee benefits


10,679


34,295

Accrued expenses and other liabilities


42,899


(28,289)

Operating lease liabilities


(418,210)


(399,557)

Other long-term liabilities


(14,948)


27,424

Net cash provided by operating activities


358,215


268,615

Cash flows from investing activities:





Cash paid for fixed assets


(239,110)


(159,560)

Cash paid for acquisitions, net of cash acquired


(4,334)


Cash paid for investments



(1,000)

Proceeds from investments


6,135


73

Proceeds from sale of assets


226


3,302

Net cash used in investing activities


(237,083)


(157,185)

Cash flows from financing activities:





Borrowings under long-term debt agreements


1,700,000


476,000

Repayments of long-term debt


(1,690,861)


(1,554,890)

Debt refinancing costs


(24,665)


Payments for finance lease liabilities


(3,564)


(3,404)

Proceeds from employee stock purchase plan


4,185


Tax withholdings on stock-based awards


(33)


Proceeds from initial public offering, net of issuance costs



936,041

Repurchase of equity



(105)

Payment of contingent consideration



(250)

Payment of offering costs


(3,844)


Net cash used in financing activities


(18,782)


(146,608)






Net increase (decrease) in cash, cash equivalents and restricted cash


102,350


(35,178)

Cash, cash equivalents and restricted cash at beginning of period


119,540


154,718

Cash, cash equivalents and restricted cash at end of period


$   221,890


$   119,540

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 this 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 this earnings release. The non-GAAP financial measures in this earnings release may differ from similarly titled measures used by other companies.

Adjusted EBITDA and Trailing Twelve Month Adjusted EBITDA

Adjusted EBITDA, including Trailing Twelve Month Adjusted EBITDA, is considered a non-GAAP financial measure under the Securities and Exchange Commission's ("SEC") rules because it excludes certain amounts 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  facilitates comparison of the current period performance with that of the comparable prior period. In addition, Adjusted EBITDA affords investors a view of what management considers to be Petco's core operating performance 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 Annual Report on Form 10-K for the fiscal year ended January 30, 2021 filed with the SEC on April 5, 2021 for additional information on Adjusted EBITDA. The tables below reflect the calculation of Adjusted EBITDA for the thirteen and fifty-two weeks ended January 29, 2022 compared to the thirteen and fifty-two weeks ended January 30, 2021, respectively.

(dollars in thousands)


13 Weeks Ended


52 Weeks Ended

Reconciliation of Net Income (Loss) Attributable to Class A and B-1
   Common Stockholders to Adjusted EBITDA


January 29,
2022


January 30,
2021


January 29,
2022


January 30,
2021

Net income (loss) attributable to Class A and B-1 common stockholders


$        28,994


$       (6,159)


$    164,417


$     (26,483)

Add (deduct):









Interest expense, net


18,884


49,666


77,335


218,430

Income tax expense (benefit)


9,689


10,200


53,473


(3,337)

Depreciation and amortization


46,794


45,875


172,431


174,836

Income from equity method investees


(3,393)


(3,530)


(10,883)


(6,482)

Loss on debt extinguishment and modification



17,549


20,838


17,549

Asset impairments and write offs


5,000


7,955


10,918


15,606

Equity-based compensation


12,774


5,451


49,265


12,915

Other non-operating loss (income)


30,437



(34,497)


Mexico joint venture EBITDA (1)


8,314


6,655


26,837


19,074

Store pre-opening expenses


3,026


2,218


14,765


9,228

Store closing expenses


1,699


1,835


5,028


7,782

Non-cash occupancy-related costs (2)


2,550


2,151


8,114


19,240

Non-recurring costs (3)


7,382


8,733


33,437


25,990

Adjusted EBITDA


$      172,150


$    148,599


$    591,478


$    484,348

Net sales


$  1,514,357


$1,337,713


$5,807,149


$4,920,202

Net margin (4)


1.9%


(0.5%)


2.8%


(0.5%)

Adjusted EBITDA Margin


11.4%


11.1%


10.2%


9.8%

Adjusted Net Income and Adjusted EPS

Adjusted Net Income and Adjusted diluted earnings per share attributable to Petco common stockholders (Adjusted EPS) are considered non-GAAP financial measures under the SEC's rules because they exclude certain amounts included in the net income (loss) attributable to Petco common stockholders and diluted earnings per share attributable to Petco common stockholders calculated in accordance with GAAP. Management believes that Adjusted Net Income and Adjusted EPS are meaningful measures to share with investors because they facilitate comparison of the current period performance with that of the comparable prior period. In addition, Adjusted Net Income and Adjusted EPS afford investors a view of what management considers to be Petco's core earnings performance as well as the ability to make a more informed assessment of such earnings performance with that of the prior period.

The tables below reflect the calculation of Adjusted Net Income (Loss) and Adjusted EPS for the thirteen and fifty-two weeks  ended January 29, 2022 compared to the thirteen and fifty-two weeks prior year quarter ended January 30, 2021, respectively.

(in thousands, except per share amounts)


13 Weeks Ended

Reconciliation of Diluted EPS to Adjusted EPS


January 29, 2022


January 30, 2021



Amount


Per share


Amount


Per share

Net income (loss) attributable to common stockholders / diluted EPS


$   28,994


$       0.11


$   (6,159)


$     (0.03)

Add (deduct):









Income tax expense


9,689


0.04


10,200


0.05

Loss on debt extinguishment and modification




17,549


0.08

Asset impairments and write offs


5,000


0.02


7,955


0.03

Equity-based compensation


12,774


0.05


5,451


0.03

Other non-operating loss


30,437


0.11



Store pre-opening expenses


3,026


0.01


2,218


0.01

Store closing expenses


1,699


0.01


1,835


0.01

Non-cash occupancy-related costs (2)


2,550


0.01


2,151


0.01

Non-recurring costs (3)


7,382


0.02


8,733


0.04

Adjusted pre-tax income / diluted earnings per share


$101,551


$     0.38


$ 49,933


$     0.23

Income tax expense at 26% normalized tax rate


26,403


0.10


12,983


0.06

Adjusted Net Income / Adjusted EPS


$   75,148


$       0.28


$  36,950


$       0.17




























(in thousands, except per share amounts)


52 Weeks Ended

Reconciliation of Diluted EPS to Adjusted EPS


January 29, 2022


January 30, 2021



Amount


Per share


Amount


Per share

Net income (loss) attributable to common stockholders / diluted EPS


$ 164,417


$       0.62


$ (26,483)


$     (0.13)

Add (deduct):









Income tax expense (benefit)


53,473


0.20


(3,337)


(0.02)

Loss on debt extinguishment and modification


20,838


0.08


17,549


0.08

Asset impairments and write offs


10,918


0.04


15,606


0.07

Equity-based compensation


49,265


0.19


12,915


0.06

Other non-operating income


(34,497)


(0.13)



Store pre-opening expenses


14,765


0.06


9,228


0.05

Store closing expenses


5,028


0.02


7,782


0.04

Non-cash occupancy-related costs (2)


8,114


0.03


19,240


0.09

Non-recurring costs (3)


33,437


0.12


25,990


0.13

Adjusted pre-tax income / diluted earnings per share


$325,758


$     1.23


$ 78,490


$     0.37

Income tax expense at 26% normalized tax rate


84,697


0.32


20,407


0.09

Adjusted Net Income / Adjusted EPS


$ 241,061


$       0.91


$  58,083


$       0.28

Free Cash Flow

Free Cash Flow is a non-GAAP financial measure that is calculated as net cash provided by operating activities 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.

The table below reflects the calculation of Free Cash Flow for the thirteen and fifty-two weeks ended January 29, 2022 compared to the thirteen and fifty-two weeks ended January 30, 2021, respectively.

(in thousands)


13 Weeks Ended


52 Weeks Ended



January 29,
2022


January 30,
2021


January 29,
2022


January 30,
2021

Net cash provided by operating activities


$    69,771


$    67,135


$   358,215


$   268,615

Cash paid for fixed assets


(74,780)


(63,271)


(239,110)


(159,560)

Free Cash Flow


$     (5,009)


$       3,864


$   119,105


$   109,055

Net Debt

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.

The table below reflects the calculation of Net Debt as of  January 29, 2022 compared to the year ago quarter ended January 30, 2021.

(dollars in thousands)


January 29,
2022


January 30,
2021

Total debt:





Senior secured credit facilities, net, including current portion


$     1,657,390


$     1,646,281

Finance leases, including current portion


29,816


13,639

Total debt


1,687,206


1,659,920

Less: cash and cash equivalents


(211,602)


(111,402)

Net Debt


$     1,475,604


$     1,548,518

Adjusted EBITDA (TTM)


$        591,478


$        484,348

Net Debt / Adjusted EBITDA ratio


2.5x


3.2x

Adjusted EBITDA, Adjusted Net Income and Adjusted EPS Footnotes



(1)

Mexico Joint Venture EBITDA represents 50 percent of the entity's operating results for all periods, as adjusted to reflect the results on a basis comparable to Adjusted EBITDA. In the financial statements, this joint venture is accounted for as an equity method investment and reported net of depreciation and income taxes. Because such a presentation would not reflect the adjustments made in the calculation of Adjusted EBITDA, we include the 50 percent interest in the company's Mexico joint venture on an Adjusted EBITDA basis to ensure consistency. The table below presents a reconciliation of Mexico joint venture net income to Mexico joint venture EBITDA.

 



13 Weeks Ended


52 Weeks Ended

(in thousands)


January 29,
2022


January 30,
2021


January 29,
2022


January 30,
2021

Net income


$        6,786


$      7,060


$    21,773


$    14,225

Depreciation


5,218


3,478


15,679


12,249

Income tax expense


2,702


1,702


11,390


6,229

Foreign currency loss (gain)


116


(163)


(431)


704

Interest expense, net


1,806


1,232


5,263


4,740

EBITDA


$      16,628


$    13,309


$    53,674


$    38,147

50% of EBITDA


$        8,314


$      6,655


$    26,837


$    19,074





(2)

Non-cash occupancy-related costs include the difference between cash and straight-line rent for all periods.

(3)

Non-recurring costs include: severance; legal reserves and related fees; one-time consulting and other costs associated with our strategic transformation initiatives; discontinuation and liquidation costs; and costs related to our initial public offering and refinancing. While we have incurred significant costs associated with the COVID-19 pandemic during fiscal 2020 and 2021, we have not classified any of these costs as non-recurring due to the uncertainty surrounding the pandemic's length and long-term impact on the macroeconomic operating environment.

(4)

We define net margin as net income (loss) attributable to Class A and B-1 common stockholders divided by net sales and Adjusted EBITDA margin as Adjusted EBITDA divided by net sales.

WOOF-F

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/petco-health--wellness-company-inc-reports-record-year-of-revenue-and-profitability-issues-2022-guidance-301497349.html

SOURCE Petco Health and Wellness Company, Inc.

Copyright 2022 PR Newswire

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