-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, APRdBVkVASQn3YLGmz5uxziuwfVzgpZPCCPCCfZSmEB/Oo6NA1E3ZVhppk5+6EfG cSRv96DkPjovZGjwzkDI1A== 0000888455-97-000010.txt : 19970701 0000888455-97-000010.hdr.sgml : 19970701 ACCESSION NUMBER: 0000888455-97-000010 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970630 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PETCO ANIMAL SUPPLIES INC CENTRAL INDEX KEY: 0000888455 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-RETAIL STORES, NEC [5990] IRS NUMBER: 330479906 STATE OF INCORPORATION: DE FISCAL YEAR END: 0128 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23574 FILM NUMBER: 97632684 BUSINESS ADDRESS: STREET 1: 9125 REHCO RD CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 6194537845 MAIL ADDRESS: STREET 1: 9125 REHCO RD CITY: SAN DIEGO STATE: CA ZIP: 92121 11-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K (Mark One) [ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to _____________ Commission file number 0-23574 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: PETCO ANIMAL SUPPLIES 401(K) PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Petco Animal Supplies, Inc. 9125 Rehco Road San Diego, CA 92121 PETCO ANIMAL SUPPLIES 401(k) PLAN Financial Statements December 31, 1996 and 1995 (With Independent Auditors' Report Thereon) PETCO ANIMAL SUPPLIES 401(k) PLAN Table of Contents Page Independent Auditors' Report 1 FINANCIAL STATEMENTS Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1996 2 Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1995 3 Statement of Changes in Net Assets Available for Benefits with Fund Information for the year ended December 31, 1996 4 Statement of Changes in Net Assets Available for Benefits with Fund Information for the year ended December 31, 1995 5 Notes to Financial Statements 6 SUPPLEMENTAL SCHEDULES Schedule I - Line 27a - Schedule of Assets Held for Investment Purposes 11 Schedule II - Line 27d - Schedule of Reportable Transactions 12 INDEPENDENT AUDITORS' REPORT The Administrative Committee Petco Animal Supplies 401(k) Plan: We have audited the accompanying statements of net assets available for benefits of Petco Animal Supplies 401(k) Plan as of December 31, 1996 and 1995, and the related statements of changes in net assets available for benefits for each of the years in the two-year period ended December 31, 1996. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1996 and 1995, and the changes in net assets available for benefits for each of the years in the two- year period then ended in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules I and II are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. San Diego, California June 16, 1997 PETCO ANIMAL SUPPLIES 401(k) PLAN Statement of Net Assets Available for Benefits December 31, 1996 Participant Directed Prudential Governmental Prudential Securities Prudential Advisor Putnam Trust Prudential Global Equity OTC Money Prudential Prudential Prudential Government Natural Petco Portfolio Emerging Market Utility Equity Allocation Income Resources Common Growth Growth Assets Fund Fund Fund Fund Fund Fund Stock Fund Fund Investments, at fair value: Mutual funds $ - 351,144 616,892 274,668 61,001 52,650 - 23,391 30,312 Common stock - - - - - - 41,725 - - Money market funds 73,475 - - - - - - - - Participant loans - - - - - - - - - 73,475 351,144 616,892 274,668 61,001 52,650 41,725 23,391 30,312 Contributions receivable: Employee - - - - - - - - - Employer 1,097 3,585 6,417 1,646 549 549 1,829 1,647 1,466 Total assets 74,572 354,729 623,309 276,314 61,550 53,199 43,554 25,038 31,778 Liabilities Excess contributions due to participants (note 5) 173 1,670 5,808 1,573 2 609 130 427 591 Net assets available for benefits $ 74,399 353,059 617,501 274,741 61,548 52,590 43,424 24,611 31,187 Nonparticipant Directed Prudential Prudential Special Government Money Money Market Market Loans to Fund B Fund Participants Total Investments, at fair value: Mutual funds $ - - - 1,410,058 Common stock - - - 41,725 Money market funds 9 10 - 73,494 Participant loans - - 17,200 17,200 9 10 17,200 1,542,477 Contributions receivable: Employee - - - - Employer - - - 18,785 Total assets 9 10 17,200 1,561,262 Liabilities Excess contributions due to participants (note 5) - - - 10,983 Net assets available for benefits $ 9 10 17,200 1,550,279
See accompanying notes to financial statements. PETCO ANIMAL SUPPLIES 401(k) PLAN Statement of Net Assets Available for Benefits December 31, 1995 Participant Directed Prudential Governmental Securities Prudential Prudential Trust Prudential Global Special Money Prudential Prudential Prudential Government Natural Petco Money Market Utility Equity Allocation Income Resources Common Market Assets Fund Fund Fund Fund Fund Fund Stock Fund B Total Investments, at fair value: Mutual funds $ - 213,174 363,311 184,603 36,893 13,999 - - 811,980 Common stock - - - - - - 5,412 - 5,412 Money market funds 46,728 - - - - - - 23,436 70,164 46,728 213,174 363,311 184,603 36,893 13,999 5,412 23,436 887,556 Employee contributions receivable 670 2,640 5,349 3,711 954 701 252 - 14,277 Net assets available for benefits $ 47,398 215,814 368,660 188,314 37,847 14,700 5,664 23,436 901,833
See accompanying notes to financial statements. PETCO ANIMAL SUPPLIES 401(k) PLAN Statement of Changes in Net Assets Available for Benefits For the year ended December 31, 1996 Participant Directed Prudential Governmental Prudential Securities Prudential Advisor Putnam Trust Prudential Global Equity OTC Money Prudential Prudential Prudential Government Natural Petco Portfolio Emerging Market Utility Equity Allocation Income Resources Common Growth Growth Fund Fund Fund Fund Fund Fund Stock Fund Fund Additions to net assets attributed to: Investment income: Net appreciation (depreciation) in fair value of investments $ (11) 28,011 19,970 (794) (1,724) 1,222 (8,611) 121 (2,810) Interest 2,842 - - - - - - - - Dividends - 30,411 62,592 26,537 2,979 5,345 - 536 1,766 Less investment expenses - - (29) - - - - - - 2,831 58,422 82,533 25,743 1,255 6,567 (8,611) 657 (1,044) Contributions: Employee 40,371 75,021 173,061 72,698 22,208 24,278 41,470 18,286 21,782 Employer 5,604 13,773 27,605 9,602 2,477 1,819 6,543 3,806 3,435 Total additions 48,806 147,216 283,199 108,043 25,940 32,664 39,402 22,749 24,173 Deductions from net assets attributed to: Benefits paid to participants (3,193) (18,810) (38,538) (16,128) (2,239) (3,149) (1,642) (110) (67) Loans issued (11,600) - (5,600) - - - - - - Net increase prior to interfund transfers 34,013 128,406 239,061 91,915 23,701 29,515 37,760 22,639 24,106 Interfund transfers (7,012) 8,839 9,780 (5,488) - 8,375 - 1,972 7,081 Net increase 27,001 137,245 248,841 86,427 23,701 37,890 37,760 24,611 31,187 Net assets available for benefits: Beginning of year 47,398 215,814 368,660 188,314 37,847 14,700 5,664 - - End of year $ 74,399 353,059 617,501 274,741 61,548 52,590 43,424 24,611 31,187 Nonparticpant Directed Prudential Prudential Special Government Money Money Market Market Loans to Fund B Fund Participants Total Additions to net assets attributed to: Investment income: Net appreciation (depreciation) in fair value of investments $ - - - 35,374 Interest 111 - - 2,953 Dividends - - - 130,166 Less investment expenses - - - (29) 111 - - 168,464 Contributions: Employee 9 10 - 489,194 Employer - - - 74,664 Total additions 120 10 - 732,322 Deductions from net assets attributed to: Benefits paid to participants - - - (83,876) Loans issued - - 17,200 - Net increase prior to interfund transfers 120 10 17,200 648,446 Interfund transfers (23,547) - - - Net increase (23,427) 10 17,200 648,446 Net assets available for benefits: Beginning of year 23,436 - - 901,833 End of year $ 9 10 17,200 1,550,279
See accompanying notes to financial statements. PETCO ANIMAL SUPPLIES 401(k) PLAN Statement of Changes in Net Assets Available for Benefits For the year ended December 31, 1995 Participant Directed Prudential Governmental Securities Prudential Prudential Trust Prudential Global Special Money Prudential Prudential Prudential Government Natural Petco Money Market Utility Equity Allocation Income Resources Common Market Fund Fund Fund Fund Fund Fund Stock Fund B Total Additions to net assets attributed to: Investment income: Net appreciation in fair value of investments $ - 32,968 62,423 16,458 3,470 1,029 967 - 117,315 Interest 2,264 - - - - - - 1,220 3,484 Dividends - 8,470 17,328 14,021 1,873 738 - - 42,430 Less investment expenses - (208) (110) (172) (12) - - - (502) 2,264 41,230 79,641 30,307 5,331 1,767 967 1,220 162,727 Employee contributions 16,356 44,409 84,437 49,520 10,204 10,012 5,168 - 220,106 Total additions 18,620 85,639 164,078 79,827 15,535 11,779 6,135 1,220 382,833 Deductions from net assets attributed to benefits paid to participants (6,077) (24,138) (31,602) (29,817) (11,146) (1,090) - - (103,870) Net increase prior to interfund transfers 12,543 61,501 132,476 50,010 4,389 10,689 6,135 1,220 278,963 Interfund transfers 143 (949) 871 136 - 270 (471) - - Net increase 12,686 60,552 133,347 50,146 4,389 10,959 5,664 1,220 278,963 Net assets available for benefits: Beginning of year 34,712 155,262 235,313 138,168 33,458 3,741 - 22,216 622,870 End of year $ 47,398 215,814 368,660 188,314 37,847 14,700 5,664 23,436 901,833
See accompanying notes to financial statements. PETCO ANIMAL SUPPLIES 401(k) PLAN Notes to Financial Statements December 31, 1996 and 1995 (1) Description of Plan The following description of the Petco Animal Supplies 401(k) Plan (the "Plan") is provided for general information purposes only. Participants should refer to the Plan Document for a more complete description of the Plan's provisions. General The Plan was established on January 1, 1992, and amended on January 1, 1994, and is a defined contribution plan available to all eligible employees of Petco Animal Supplies, Inc. (the "Company"). Prudential Bank and Trust Company is the Plan trustee and custodian of the Plan's assets. Certain administrative functions are performed by officers or employees of the Company. No such officer or employee receives compensation from the Plan. Certain investment and administrative expenses of the Plan are paid directly by the Company. All employees who are at least 21 years of age and have completed one year of service with a minimum of 1,000 hours worked are eligible to participate in the Plan. The Plan entry dates are on the first day of a calendar quarter coinciding with or following the date employees satisfy the eligibility requirements. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Contributions Each Plan year participants may elect to make a pre-tax contribution to the Plan ranging from 1% to 15% of their gross salary. The Company, as plan sponsor, may make discretionary matching contributions on the participants' behalf to the Plan and additional discretionary contributions. Additional discretionary contributions are allocated to participants in proportion to their compensation as a percentage of the compensation of all participants. Contributions are subject to certain limitations. All employer contributions vest at the rate of 20% for each year of service by the participant or upon attainment of age sixty- five, retirement due to disability, death or termination of the Plan. For the Plan year ended December 31, 1996, the Company made a discretionary matching contribution of $74,664. The Company did not make a contribution to the Plan for the Plan year ended December 31, 1995. Participant Accounts Each participant's account is credited with the participant's contributions and an allocation of (a) the Company's discretionary contributions, (b) fund earnings and (c) forfeitures. Allocations are based upon the participant's pro rata share of the beginning of the month's investment account balance. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. Investment Options The Plan provides for participant-directed accounts which allow participants to allocate their account balance among the following investment funds: Name of Mutual Fund Type of Investment Prudential Governmental Invests in a diversified Securities Trust Money portfolio of short-term money Market Fund market instruments issued by the U.S. government or its agencies. Prudential Utility Fund Invests in equity and debt securities of utility companies. Prudential Equity Fund Invests in a portfolio of common stocks of major, well-established corporations. Prudential Allocation Fund Invests in equities, bonds and money market securities. Prudential Government Invests at least 65% of the total Income Fund fund assets in U.S. government securities. Prudential Global Natural Invests in securities of foreign Resources Fund and domestic companies that own, explore, mine, process or provide goods and services with respect to natural resources and securities. Petco Common Stock Company common stock quoted on the NASDAQ national market. Fidelity Advisor Equity Invests in growth stocks of Portfolio Growth Fund small, medium, and large companies that demonstrate the potential for above average earnings or sales growth. Putnam OTC Emerging Invests in securities of Growth Fund companies with market capitalizations between $50 million and $2 billion that have a rapid growth rate and a dominant industry position. The Plan also holds non-participant directed accounts which are invested in the following investment funds: Prudential Special Money Invests in a diversified Market Fund B portfolio of U.S. dollar- denominated money market instruments from domestic and foreign issuers. Prudential Government Invests in diversified portfolio Money Market Fund of U.S. dollar-denominated money market instruments from the U.S. government. Payment of Benefits On termination of service due to death, disability or retirement, a participant's vested account balance is paid in a lump-sum distribution or as an annuity. The Plan also provides for hardship withdrawals subject to U.S. Department of Labor regulations. In-Service Withdrawals While the Plan is designed to be a retirement income supplement, it provides flexibility for participants greater than 59-1/2 years of age in cases where funds are needed prior to retirement. Accordingly, employees may withdraw funds before retirement up to the maximum vested account balance adjusted for amounts attributable to before tax contributions, as outlined in the Plan. Vesting Participants are immediately vested in their contributions plus actual earnings thereon. Company contributions vest at the rate of 20% for each year of service by the participant or upon attainment of age sixty-five, retirement due to disability, death or termination of the Plan. Participant Loans Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their account balance. Loan transactions are treated as a transfer to (from) the investment fund from (to) the Participant Loan fund, using the same allocation method as contributions. The loans are secured by the balance in the participant's account and bear interest equal to the prime rate established by the Plan's administrator plus 1%. The prime rate at December 31, 1996 was 8.25%. Loan terms range from 1 to 5 years or up to 15 years for the purchase of a primary residence. Principal and interest, calculated using the effective interest method, are paid monthly or semi-monthly through payroll deductions. Forfeitures Forfeitures are allocated to participant accounts in the Plan year in which a participant terminates service. The allocation of forfeitures is based on the ratio between a participant's salary and total salaries of all participants as defined in the Plan document. Such allocation is made only to participants in the Plan as of the last day of the fiscal year. Administrative Costs Certain costs and expenses related to the administration of the Plan are paid by the Company. (2) Significant Accounting Policies Basis of Accounting The accompanying financial statements of the Plan are presented using the accrual method of accounting and have been prepared in accordance with generally accepted accounting principles. Investment Valuation and Income Recognition The Plan's investments are stated at fair value. Fair value is determined by the quoted market price of the investments at the Plan's year-end. Investment purchases and sales are recorded on the trade date. Net appreciation or depreciation in the fair value of investments is based on the change in the fair value of investments as of the beginning of the year and the fair value of investments at the end of the year. Interest income is recorded on the accrual basis. Use of Estimates The Company has made a number of estimates and assumptions relating to the reporting of net assets available for benefits and changes in net assets available for benefits to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates. (3) Tax Status The adopted Plan document is a standardized profit sharing plan developed by the trustee. The Company has received a favorable determination letter dated July 31, 1995 regarding tax exempt status under the provisions of the Internal Revenue Code. The Plan has been amended since the determination letter has been received. However, the Company and the Company's tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, the Company believes that the Plan is qualified and the related trust was tax-exempt as of December 31, 1996 and 1995. (4) Plan Termination Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at anytime and to terminate the Plan, subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. (5) Excess Contributions Returned to Participants The Plan initially failed to meet certain nondiscrimination tests for the year ended December 31, 1996 and $10,983 was returned to certain participants in order to meet the nondiscrimination test. These amounts have been recorded in the accompanying financial statements as liabilities of the Plan as of December 31, 1996. There were no excess contributions as of December 31, 1995. Schedule I PETCO ANIMAL SUPPLIES 401(k) PLAN Line 27a - Schedule of Assets Held for Investment Purposes December 31, 1996 Description Current Issuer of investment Cost value Prudential * Governmental Securities Trust Money Market Fund $ 73,474 73,475 Prudential * Utility Fund 312,712 351,144 Prudential * Equity Fund 544,160 616,892 Prudential * Allocation Fund 271,290 274,668 Prudential * Government Income Fund 61,427 61,001 Prudential * Global Natural Resources Fund 51,063 52,650 Petco * Petco Common Stock 49,462 41,725 Fidelity Advisor Equity Portfolio Growth Fund 23,263 23,391 Putnam OTC Emerging Growth Fund 33,110 30,312 Prudential * Special Money Market Fund B 9 9 Prudential * Government Money Market Fund 10 10 Loans to Participants * Interest rate of 9.25% - 17,200 Total investments $ 1,419,980 1,542,477
* Party-in-interest Schedule II PETCO ANIMAL SUPPLIES 401(k) PLAN Line 27d - Schedule of Reportable Transactions For the year ended December 31, 1996 Current value of Cost of asset on Identity Purchase Selling asset transaction Net of party Description price price sold date gain involved of asset (1) (1) (1) (1) Prudential Utility Fund $ 172,173 - - 172,173 - - 142,761 129,528 142,761 13,233 Prudential Equity Fund 502,097 - - 502,097 - - 291,404 235,492 291,404 55,912 Prudential Allocation Fund 148,709 - - 148,709 - - 67,862 63,860 67,862 4,002 Prudential Government Money Market Fund 48,556 - - 48,556 - Petco Common Stock 46,569 - - 46,569 -
(1) Represents a series of transactions SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf of the undersigned hereunto duly authorized. June 30, 1997 PETCO Animal Supplies 401(k) Plan BY: Plan Administrative Committee /s/Brian K. Devine Brian K. Devine /s/Richard St. Peter Richard St. Peter /s/Larry Asselin Larry Asselin /s/William M. Woodard William M. Woodard /s/James M. Myers James M. Myers /s/Bruce Hall Bruce Hall The Board of Directors Petco Animal Supplies, Inc.: We consent to incorporation by reference in the registration statement (No. 33-95352) on Form S-8 of Petco Animal Supplies, Inc. of our report dated June 16, 1997, relating to the statements of net assets available for benefits of the Petco Animal Supplies 401(k) Plan as of December 31, 1996 and 1995, and the related statements of changes in net assets available for benefits for each of the years in the two- year period ended December 31, 1996, and all related schedules, which report appears in the December 31, 1996 annual report on Form 11-K of Petco Animal Supplies, Inc. San Diego, California June 29, 1997 -----END PRIVACY-ENHANCED MESSAGE-----