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<SEC-DOCUMENT>0000950123-01-503128.txt : 20010601
<SEC-HEADER>0000950123-01-503128.hdr.sgml : 20010601
ACCESSION NUMBER: 0000950123-01-503128
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 6
CONFORMED PERIOD OF REPORT: 20010303
FILED AS OF DATE: 20010531
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: BED BATH & BEYOND INC
CENTRAL INDEX KEY: 0000886158
STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES [5700]
IRS NUMBER: 112250488
STATE OF INCORPORATION: NY
FISCAL YEAR END: 0228
FILING VALUES:
FORM TYPE: 10-K
SEC ACT:
SEC FILE NUMBER: 000-20214
FILM NUMBER: 1652132
BUSINESS ADDRESS:
STREET 1: 650 LIBERTY AVENUE
CITY: UNION
STATE: NJ
ZIP: 07083
BUSINESS PHONE: 2013791520
MAIL ADDRESS:
STREET 1: 715 MORRIS AVENUE
CITY: SPRINGFIELD
STATE: NJ
ZIP: 07081
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>y49742e10-k.txt
<DESCRIPTION>BED BATH & BEYOND
<TEXT>
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended March 3, 2001
Commission File Number 0-20214
BED BATH & BEYOND INC.
(Exact name of registrant as specified in its charter)
NEW YORK 11-2250488
(State of incorporation) (IRS Employer Identification No.)
650 LIBERTY AVENUE, UNION, NEW JERSEY 07083
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 908/688-0888
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
None None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK (PAR VALUE $ 0.01 PER SHARE)
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------- -------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
As of May 1, 2001, the aggregate market value of the common stock held by
non-affiliates (which was computed by reference to the closing price on such
date of such stock on the NASDAQ National Market) was $8,226,086,641.*
The number of shares outstanding of the issuer's common stock (par value $0.01
per share) at May 1, 2001: 288,634,619
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's definitive proxy statement dated May 24, 2001
pursuant to Regulation 14A are incorporated by reference in Part III hereof.
Portions of the Registrant's Annual Report to Shareholders for the fiscal year
ended March 3, 2001 are incorporated by reference in Part II hereof.
* For purposes of this calculation, all outstanding shares of common stock
have been considered held by non-affiliates other than the 20,176,238
shares beneficially owned by directors and executive officers, including in
the case of the Co-Chief Executive Officers trusts and foundations
affiliated with them. In making such calculation, the Registrant does not
determine the affiliate or non-affiliate status of any shares for any other
purpose.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
FORM 10-K
ITEM NO. NAME OF ITEM PAGE
<S> <C>
PART I
Item 1. Business.................................................... 3
Item 2. Properties.................................................. 11
Item 3. Legal Proceedings........................................... 12
Item 4. Submission of Matters to a Vote of
Security Holders........................................ 12
PART II
Item 5. Market for the Registrant's Common Equity
And Related Shareholder Matters......................... 12
Item 6. Selected Financial Data..................................... 13
Item 7. Management's Discussion and Analysis
of Financial Condition and Results of
Operations.............................................. 13
Item 7A. Quantitative and Qualitative Disclosures About
Market Risk............................................. 13
Item 8. Financial Statements and Supplementary
Data.................................................... 13
Item 9. Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure.............................................. 13
PART III
Item 10. Directors and Executive Officers of
the Registrant.......................................... 13
Item 11. Executive Compensation...................................... 13
Item 12. Security Ownership of Certain Beneficial
Owners and Management................................... 13
Item 13. Certain Relationships and Related
Transactions............................................ 13
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K..................................... 14
</TABLE>
2
<PAGE> 3
PART I
Unless otherwise indicated, the terms "Company" and "Bed Bath & Beyond"
refer collectively to Bed Bath & Beyond Inc. and its subsidiaries. The Company's
fiscal year is comprised of the 52 or 53 week period ending on the Saturday
nearest February 28. Accordingly, fiscal 2000 represented 53 weeks and ended on
March 3, 2001; fiscal 1999 represented 52 weeks and ended on February 26, 2000;
and fiscal 1998 represented 52 weeks and ended on February 27, 1999. Unless
otherwise indicated, all references herein to periods of time (e.g., quarters
and years) are to fiscal periods.
ITEM 1 - BUSINESS
INTRODUCTION
Bed Bath & Beyond believes that it is the nation's largest operator
of "superstores" selling predominantly better quality domestics merchandise and
home furnishings typically found in better department stores. The term
"superstore" as used herein means a store, other than a department store, that
is larger in size than the typical stores in its market selling similar product
categories and offering a breadth and depth of selection in most of its product
categories that far exceeds what is available in such stores. The Company offers
a wide assortment of merchandise at everyday low prices that are substantially
below regular department store prices and generally comparable to or below
department store sale prices. The Company's domestics merchandise line includes
items such as bed linens, bath accessories and kitchen textiles, and the
Company's home furnishings line includes items such as cookware, dinnerware,
glassware and basic housewares. The Company believes that it offers a breadth
and depth of selection in most of its product categories that far exceeds what
is generally available in department stores or other specialty retail stores and
that this enables it to offer customers the convenience of one-stop shopping for
most household items.
As of May 1, 2001, the Company operated 316 stores in 43 states:
Alabama (4), Arizona (5), Arkansas (2), California (37), Colorado (8),
Connecticut (6), Delaware (1), Florida (27), Georgia (12), Idaho (1), Illinois
(15), Indiana (5), Iowa (2), Kansas (4), Kentucky (2), Louisiana (3), Maine (1),
Maryland (10), Massachusetts (7), Michigan (14), Minnesota (2), Mississippi (1),
Missouri (5), Nebraska (1), Nevada (1), New Jersey (16), New Mexico (1), New
York (16), North Carolina (7), North Dakota (1), Ohio (12), Oklahoma (3), Oregon
(3), Pennsylvania (15), Rhode Island (2), South Carolina (5), Tennessee (6),
Texas (23), Utah (4), Vermont (1), Virginia (14), Washington (9) and Wisconsin
(2). Of these stores, 313 use the superstore format that was pioneered by the
Company in 1985. These stores are on average approximately 40,000 square feet in
size and carry the Company's full line of both domestics merchandise and home
furnishings. The other three stores, all established prior to 1986, are smaller
stores that primarily carry domestics merchandise.
HISTORY
The Company was founded in 1971 by Leonard Feinstein and Warren
Eisenberg, the Co-Chief Executive Officers of the Company. Each has more than 40
years of experience in the retail industry.
The Company commenced operations in 1971 with the opening of two
stores, one in New York and one in New Jersey. These stores sold primarily bed
linens and bath accessories. In 1985, the Company introduced its superstore
format with the opening of its first store carrying a full line of domestics
merchandise and home furnishings. The Company began using the name "Bed Bath &
Beyond" in 1987 in order to reflect the expanded product line offered by its
superstores and to distinguish its superstores from conventional specialty
retail stores offering only domestics merchandise or only home furnishings.
3
<PAGE> 4
The Company has been engaged in an ongoing expansion program
involving the opening of new superstores (including 70 in 2000, 55 in 1999, and
45 in 1998) and the expansion of existing stores (including two in 2000, four in
1999, and three in 1998). As a result of its expansion program, the Company's
store space has increased from approximately 917,000 square feet at the
beginning of 1992 to approximately 12,204,000 square feet at the end of 2000.
The Company's expansion program is continuing, and the Company currently
anticipates that in fiscal 2001 it will open at least 80 new superstores, which
includes the five new superstores opened through May 1, 2001.
MERCHANDISING AND MARKETING
The Company's strategy for merchandising and marketing is to offer
better quality merchandise at everyday low prices; to maintain a breadth and
depth of selection in most of its product categories that far exceeds what is
generally available in department stores or other specialty retail stores; to
present merchandise in a distinctive manner designed to maximize customer
convenience and reinforce customer perception of wide selection; and to
emphasize dedication to customer service and satisfaction.
MERCHANDISE SELECTION
The Company's superstores offer both domestics merchandise and home
furnishings, including:
Domestics Merchandise
- bed linens and related items: sheets, comforters, duvet
covers, bedspreads, quilts, window treatments (such as
curtains and valances), decorative pillows, blankets, dust
ruffles, bed pillows and mattress pads.
- bath items: towels, shower curtains and liners, waste
baskets, mirrors, hampers, robes and slippers, scales,
bathroom rugs, wall hardware and bath accessories.
- kitchen textiles: tablecloths, placemats, cloth napkins,
dish towels and chair pads.
Home Furnishings
- kitchen and tabletop items: cookware, cutlery, kitchen
gadgets, dinnerware, bakeware, flatware, drinkware,
serveware, glassware, food storage containers, tea kettles,
trash cans and cleaning supplies.
- basic housewares: storage items, closet-related items (such
as hangers, organizers and shoe racks), general housewares
(such as brooms, garbage pails and ironing boards),
lifestyle accessories (such as lamps, chairs, ready to
assemble furniture, furniture covers, accent rugs, wicker,
fountains and clocks) and small electric appliances (such
as blenders, food processors, coffee makers, vacuums,
irons, toaster ovens and hair dryers).
- general home furnishings: giftwrap, candles, personal care
products (such as soaps and lotions), picture frames, wall
art, juvenile items (such as toys and children's books),
artificial plants and flowers and seasonal merchandise
(such as summer and holiday related items).
The Company, on an ongoing basis, tests new merchandise categories
and adjusts the categories of merchandise carried in its stores and may add new
departments or adjust the size of existing departments as required. The Company
believes that the process of adding new departments and expanding or reducing
the size of various departments in response to changing conditions is an
important part of its merchandising strategy.
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<PAGE> 5
The Company's merchandise consists primarily of better quality
merchandise typically found at better department stores. For those product lines
that have brand names associated with them, the Company generally offers leading
brand name merchandise (including All-Clad, Black & Decker, Braun, Brentwood,
Brita, Calphalon, Cannon, Conair, Croscill, Cuisinart, Divatex, Fieldcrest,
Gillette, Homedics, Hoover, J.A. Henckels, Kitchenaid, Krups, Laura Ashley,
Martex, Mikasa, Newell, Pacific Coast Feather Co., Pillowtex, Portmeirion,
Rubbermaid, Springs, Wamsutta and Waverly). The Company estimates that brand
name merchandise accounts for a significant portion of its net sales.
The Company offers a breadth and depth of product selection that
enables customers to select among a wide assortment of styles, brands, colors
and designs within each of the Company's major product lines. The Company also
generally maintains consistent in-stock availability of merchandise in order to
reinforce customer perception of wide selection and build customer loyalty. The
Company estimates that most of its superstores carry in excess of 30,000 active
stock-keeping units.
PRICING POLICY
The Company's pricing policy is to maintain everyday low prices that
are substantially below regular department store prices and generally comparable
to or below department store sale prices. The Company regularly monitors price
levels at its competitors in order to ensure that the Company's prices are being
maintained in accordance with its pricing policy. The Company believes that the
application of its everyday low price policy is essential to maintaining the
integrity of this policy and is an important factor in establishing its
reputation among customers.
Because the Company has an everyday low price policy, the Company
does not run sales. However, the Company uses periodic markdowns and semi-annual
clearances for merchandise that it has determined to discontinue carrying. In
addition, the Company's full-color circulars and mailing pieces include a
coupon, which is redeemed at the point-of-sale. The Company also honors
competitor coupons.
MERCHANDISE PRESENTATION
The Company has developed a distinctive style of merchandise
presentation. In each superstore, groups of related product lines are presented
together in separate areas of the store, creating the appearance that a Bed Bath
& Beyond superstore is comprised of several individual specialty stores for
different product lines. A "racetrack layout" that runs throughout the store
facilitates moving between areas and encourages customers to shop the entire
store. The Company believes that its format of merchandise presentation makes it
easy for customers to locate products, reinforces customer perception of wide
selection and communicates to customers that Bed Bath & Beyond superstores offer
a level of customer service generally associated with smaller specialty stores.
Merchandise is displayed in each of these separate areas from floor
to ceiling (generally 10 to 14 feet high) and, in addition, seasonal merchandise
and impulse items are prominently displayed in the front of the store. The
Company believes that its extensive merchandise selection, rather than
fixturing, should be the focus of customer attention and, accordingly, typically
uses simple modular fixturing throughout the store. This fixturing is designed
so that it can be easily reconfigured to adapt to changes in the store's
merchandise mix and presentation. The Company believes that its floor to ceiling
displays create an exciting and attractive shopping environment that encourages
impulse purchases of additional items.
CUSTOMER SERVICE
The Company places great emphasis on customer service and
satisfaction and, over the past 30 years, has sought to make this a defining
feature of its corporate culture. All managers provide leadership by example in
this area by regularly spending time assisting customers on the selling floor.
The Company believes that its success in the area of customer service is
evidenced by its ability to rely primarily on "word of mouth advertising".
The Company seeks to make shopping at its stores as pleasant and
convenient as possible. Each area within
5
<PAGE> 6
a store is staffed with knowledgeable sales personnel who are available to
assist customers in choosing merchandise, to answer questions and to resolve any
problems that may arise. In order to make checking out convenient, check-out
lines are continually monitored and additional cashiers are added as necessary
in order to minimize waiting time. Returning merchandise is simplified through a
return policy that permits customers to return most items without presenting a
sales receipt. Most Bed Bath & Beyond stores are open seven days (and six
evenings) a week in order to enable customers to shop at times that are
convenient for them.
The Company launched its website, www.bedbathandbeyond.com, in 1999.
The website offers a broad range of online services and features, including
online shopping and gift registry. The Company believes that its E-Service
efforts have been well received by its customers.
ADVERTISING
In general, the Company relies on "word of mouth advertising" and on
its reputation for offering a wide assortment of quality merchandise at everyday
low prices, supplemented by the use of paid advertising. The Company uses
full-color circulars and mailing pieces as its primary vehicles of paid
advertising. Also, to support the opening of new stores, the Company uses "grand
opening" full-color circulars and newspaper advertising. The Company believes
that its ability to rely primarily on "word of mouth advertising" will continue
and that its limited use of paid advertising permits it to spend less on
advertising than a number of its competitors.
EXPANSION
The Company is engaged in an ongoing expansion program involving the
opening of new stores in both existing and new markets and the expansion or
replacement of existing stores with larger stores. As a result of this program,
the total number of stores has increased from 34 at the beginning of fiscal 1992
to 311 at the end of fiscal 2000, and the total square footage of store space
has increased from approximately 917,000 square feet at the beginning of fiscal
1992 to approximately 12,204,000 square feet at the end of fiscal 2000. During
2000, the Company opened 70 new superstores and expanded two stores, which
resulted in the addition of approximately 2,389,000 square feet of store space.
The table below sets forth information concerning the Company's
expansion program for the periods indicated:
<TABLE>
<CAPTION>
STORE SPACE NUMBER OF STORES
------------------------- -----------------------
REPLACED NEW BEGINNING END BEGINNING END
YEAR STORES (1) STORES (2) OF YEAR OF YEAR OF YEAR OF YEAR
- ---- ---------- ---------- --------- ------- --------- -------
(IN SQUARE FEET)
<S> <C> <C> <C> <C> <C> <C>
1992 5 4 917,000 1,128,000 34 38
1993 4 9 1,128,000 1,512,000 38 45
1994 4 16 1,512,000 2,339,000 45 61
1995 2 19 2,339,000 3,214,000 61 80
1996 2 28 3,214,000 4,347,000 80 108
1997 3 33 4,347,000 5,767,000 108 141
1998 3 45 5,767,000 7,688,000 141 186
1999 4 55 7,688,000 9,815,000 186 241
2000 2 70 9,815,000 12,204,000 241 311
</TABLE>
(1) A replaced store is an existing store that was either expanded or
replaced by a new store in the same area.
(2) Excludes any new store that replaced an existing store in the same
area.
The Company intends to continue its expansion program and believes
that the continued growth of the Company is dependent, in large part, on the
success of this program. As part of its expansion program, the Company expects
to open new superstores and, in addition, expects to expand existing stores as
opportunities arise.
The Company expects to open new superstores in existing markets and
new markets. In determining where to open new superstores, the Company evaluates
a number of factors, including the availability of prime real estate and
demographic information (such as data relating to income and education levels,
age and occupation). The
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<PAGE> 7
Company believes that because it does not use central distribution centers, and
since it relies on paid advertising to only a limited extent, it has the
flexibility to enter a new market with only one or two stores. The Company will
consider opening additional stores in that market, once the stores have been
proven successful.
From the end of fiscal 2000 through May 1, 2001, the Company has
opened five stores which are located in: Wilkes Barre, Pennsylvania; El Paso,
Texas; North Richmond, Virginia; Pentagon Row, Virginia; and Bellevue,
Washington. During the balance of 2001, the Company currently anticipates that
it will open at least 75 additional stores.
The Company has built its management structure with a view towards
its expansion and believes that as a result the Company has the management depth
necessary to support its anticipated expansion program. Each of the Company's
area managers typically supervise up to three stores. Each of the Company's
district managers typically supervise four to ten stores.
STORE OPERATIONS
MERCHANDISING
The Company maintains its own central buying group, comprising of
two Vice President - General Merchandising Managers, as well as a large staff
of divisional merchandise managers, buyers and assistant buyers. Merchandising
of activities are overseen by the Senior Vice President - Chief Merchandising
Officer. The merchandise mix for each store is initially selected by the
central buying group, in consultation with store managers and other local store
personnel. The central buying group is generally responsible for selecting the
merchandise, for ordering the initial inventory required upon the opening of
each store, for ordering the first shipment of any new product line that may be
subsequently added to a store's merchandise mix and for ordering seasonal
merchandise.
After a store is opened, local store personnel are primarily
responsible for monitoring inventory levels and reordering merchandise as
required. In addition, local store personnel are encouraged to monitor local
sales trends and market conditions and tailor the merchandise mix as appropriate
to respond to changing trends and conditions. The Company believes that its
policy of having the reordering performed at the local store level, rather than
centrally, and having local store personnel determine the appropriate quantity
to reorder encourages entrepreneurship at the store level and better ensures
that in-stock availability will be maintained in accordance with the specific
requirements of each store. The factors taken into account in selecting the
merchandise mix for a particular store include store size and configuration and
local market conditions such as climate and demographics.
The Company purchases its merchandise from more than 2,800
suppliers. In 2000, the Company's largest supplier accounted for approximately
7% of the Company's merchandise purchases and the Company's 10 largest
suppliers accounted for approximately 28% of such purchases. The Company
purchases substantially all of its merchandise in the United States, the
majority from domestic manufacturers and the balance from importers. The
Company purchases a small amount of its merchandise directly from overseas
sources. The Company has no long-term contracts for the purchase of
merchandise. The Company believes that most merchandise, other than brand name
goods, is available from a variety of sources and that most brand name goods
can be replaced with comparable merchandise.
WAREHOUSING
Merchandise is shipped to each store from the Company's vendors,
making it unnecessary for the Company to maintain any central distribution
centers. As a result of the floor to ceiling displays used by the Company, a
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<PAGE> 8
substantial amount of merchandise is displayed on the sales floor of each store
at all times. Additional merchandise not displayed on the sales floor is stored
in separate warehouse space that is included in each store (with an estimated
10% to 15% of the space of each store being dedicated to warehouse and receiving
space). In the case of a few stores, merchandise is also stored at nearby
supplemental storage space leased by the Company. At present, the warehouse
space included in the Company's stores provides approximately 88% of the
Company's warehouse space requirements and such nearby supplemental storage
space provides the balance.
MANAGEMENT
The Company seeks to encourage responsiveness and entrepreneurship at
the store level by providing its managers with a relatively high degree of
autonomy relating to operations and merchandising. This is reflected in the
Company's policy of having reordering conducted at the store level, as well as
in the Company's policy of encouraging managers to tailor the merchandise mix of
each store in response to local sales trends and market conditions.
In general, stores are staffed with two assistant managers, one
operating manager, and three to six department managers who report to a store
manager, who in turn is supervised by an area or district manager. Area and
district managers report to one of several regional managers or directly to one
of five regional Vice Presidents of Stores, who in turn report to the Senior
Vice President of Stores. Decisions relating to pricing and advertising for all
stores are made centrally in the Company's Buying Office, and certain store
support functions (such as finance and information technology) are performed
centrally in the Company's Corporate Office.
TRAINING
The Company places great emphasis on the training of store level
management. All entry management personnel are generally required to work in
different departments of the store in order to acquire an overall understanding
of store operations. In addition, all associates receive formalized training,
including sales techniques and product knowledge, through the Bed Bath & Beyond
University program.
The Company's policy is to generally build its management
organization from within. Each of the Company's area, district and regional
managers was recruited from the ranks of the Company's store managers and each
of the Company's store managers joined the Company in an entry level position.
The Company believes that its policy of promoting from within, as well as the
opportunities for advancement generated by its ongoing expansion program, serve
as an incentive to persons to seek and retain employment with the Company and
results in low turnover among its managers.
EMPLOYEES
As of March 3, 2001, the Company employed approximately 15,000
persons, of whom approximately 9,500 were full-time employees and approximately
5,500 were part-time employees. None of the Company's employees are covered by
collective bargaining agreements. The Company believes that its relations with
its employees are excellent and that the labor turnover rate among its
management employees is lower than that experienced in the industry.
SEASONALITY
The Company's business exhibits less seasonality than many other
retail businesses, although sales levels are generally higher in August,
November and December, and generally lower in February and March.
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COMPETITION
The market for domestics merchandise and home furnishings is
fragmented and highly competitive. While the Company believes it is the
preeminent marketer in the superstore segment of the home goods industry, it
competes directly with a small number of chains of superstores selling domestics
merchandise and home furnishings. In addition, the Company competes with many
different types of retail stores that sell many or most of the products sold by
the Company. Such competitors include: (i) better department stores, which often
carry many of the same product lines as the Company but do not typically have
the same depth or breadth of product selection, (ii) specialty stores (such as
specialty linens or housewares retailers), which often have a depth of product
selection but typically carry only a limited portion of the product lines
carried by the Company, and (iii) discount and mass merchandise stores. In
addition, the Company competes to a more limited extent with factory outlet
stores that typically offer limited quantities or limited lines of better
quality merchandise at discount prices.
The Company believes that it is the largest operator of superstores
selling predominantly better quality domestics merchandise and home furnishings
typically found in better department stores, and that it is well positioned to
compete successfully in its markets as measured by several factors, including
pricing, breadth and quality of product selection, in-stock availability of
merchandise, effective merchandise presentation, customer service and store
locations.
The visibility of the Company has encouraged superstore competitors
to imitate the Company's format and methods. Other retail chains continue to
introduce new store concepts which include many of the product lines carried by
the Company. There can be no assurance that the operation of competitors,
including those companies operating stores similar to those of Bed Bath &
Beyond, will not have a material effect on the Company.
TRADE NAMES AND SERVICE MARKS
The Company uses its nationally recognized "Bed Bath & Beyond" name
and logo and its "Beyond any store of its kind" tag line as service marks in
connection with retail services. The Company has registered these marks and
others with the United States Patent and Trademark Office. The Company also has
registered or has applications pending with the trademark registries of several
foreign countries. Management believes that its nationally recognized name and
its service marks are an important element of the Company's merchandising
strategy.
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EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth the name, age and business experience
of the Executive Officers of the Registrant:
<TABLE>
<CAPTION>
NAME AGE POSITIONS
- ---- --- ---------
<S> <C> <C>
Warren Eisenberg 70 Co-Chairman, Co-Chief Executive Officer
and Director
Leonard Feinstein 64 Co-Chairman, Co-Chief Executive Officer
and Director
Steven H. Temares 42 President, Chief Operating
Officer and Director
Ronald Curwin 71 Chief Financial Officer and Treasurer
Arthur Stark 46 Chief Merchandising Officer
and Senior Vice President
Matthew Fiorilli 44 Senior Vice President - Stores
</TABLE>
Mr. Eisenberg, a co-founder of the Company, has been a director and
officer of the Company since the Company commenced operations in 1971 (serving
as President and Co-Chief Executive Officer until 1992, as Chairman and Co-Chief
Executive Officer until 1999, thereafter as Co-Chairman and Co-Chief Executive
Officer).
Mr. Feinstein, a co-founder of the Company, has been a director and
officer of the Company since the Company commenced operations in 1971 (serving
as Co-Chief Executive Officer, Treasurer and Secretary until 1992, as President
and Co-Chief Executive Officer until 1999, thereafter as Co-Chairman and
Co-Chief Executive Officer).
Mr. Temares joined the Company in 1992. Mr. Temares has been
President and Chief Operating Officer of the Company since January 1999. Prior
to 1999, Mr. Temares served as Executive Vice President - Chief Operating
Officer from 1997 to 1999 and previously was Director of Real Estate and
General Counsel.
Mr. Curwin, a certified public accountant, joined the Company in 1994
as Chief Financial Officer and Treasurer.
Mr. Stark joined the Company in 1977. Mr. Stark has been Chief
Merchandising Officer and Senior Vice President since January 1999. Prior to
1999, Mr. Stark was Vice President - Merchandising from 1998 until 1999,
Director of Store Operations - Western Region from 1994 until 1998.
Mr. Fiorilli joined the Company in 1973. Mr. Fiorilli has been Senior
Vice President - Stores since January 1999. Prior to 1999, Mr. Fiorilli was Vice
President - Stores from 1998 until 1999, Director of Store Operations - Eastern
Region from 1994 until 1998.
The Company's officers are elected by the Board of Directors for
one-year terms and serve at the discretion of the Board of Directors. No family
relationships exist between any of the executive officers or directors of the
Company.
10
<PAGE> 11
ITEM 2 - PROPERTIES
The Company's 316 stores are located in 43 states, principally in
suburban areas of medium and large sized cities. These stores are situated in
strip and power strip shopping centers, as well as in major off-price and
conventional malls, and free standing buildings. The Company's superstores range
in size from 13,000 to 103,000 square feet, but are predominantly between 30,000
and 50,000 square feet in major markets. The Company's three smaller stores
range in size from 7,000 to 11,000 square feet. In both superstores and smaller
stores, approximately 80% to 85% of store space is used for selling areas and
the balance for warehouse, receiving and office space.
The table below sets forth the number of stores located in each state
as of May 1, 2001:
<TABLE>
<CAPTION>
Number
State of Stores
----- ---------
<S> <C>
Alabama 4
Arizona 5
Arkansas 2
California 37
Colorado 8
Connecticut 6
Delaware 1
Florida 27
Georgia 12
Idaho 1
Illinois 15
Indiana 5
Iowa 2
Kansas 4
Kentucky 2
Louisiana 3
Maine 1
Maryland 10
Massachusetts 7
Michigan 14
Minnesota 2
Mississippi 1
Missouri 5
Nebraska 1
Nevada 1
New Jersey 16
New Mexico 1
New York 16
North Carolina 7
North Dakota 1
Ohio 12
Oklahoma 3
Oregon 3
Pennsylvania 15
Rhode Island 2
South Carolina 5
Tennessee 6
Texas 23
Utah 4
Vermont 1
Virginia 14
Washington 9
Wisconsin 2
</TABLE>
The Company currently leases all of its existing stores. The leases
provide for original lease terms that generally range from five to fifteen years
and certain leases provide for renewal options that range from five to fifteen
years, often at increased rents. Certain leases provide for scheduled rent
increases (which, in the case of fixed increases, the Company accounts for on a
straight line basis over the noncancelable lease term) and/or for contingent
rent (based upon store sales exceeding stipulated amounts).
The Company also leases merchandise storage space in nine locations
amounting to approximately 208,000 square feet. This space is used to supplement
the warehouse facilities in the Company's stores in proximity to these
locations. One of these locations also provides fulfillment for the Company's
E-service activities. See Item 1 "Business--Store Operations--Warehousing."
The Company's Corporate Office is located in 131,000 square feet of
office space in Union, New Jersey,
11
<PAGE> 12
and the Company's Buying Office is located in 66,000 square feet of office space
in Farmingdale, New York. The Company plans to lease additional office space at
both of these locations.
ITEM 3 - LEGAL PROCEEDINGS
There are no material pending legal proceedings, other than ordinary
routine litigation incidental to the business, to which the Company is a party.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders through
solicitation of proxies or otherwise during the fourth quarter of the fiscal
year ended March 3, 2001.
PART II
ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
The following table sets forth the high and low reported sales prices
of the Company's common stock on the NASDAQ National Market System for the
periods indicated. These quotations reflect inter-dealer prices, without retail
markups, markdowns or commissions.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
Fiscal 1999 :
1st Quarter $ 19.69 $ 14.56
2nd Quarter 19.47 12.75
3rd Quarter 18.50 13.69
4th Quarter 18.00 11.22
Fiscal 2000 :
1st Quarter $ 21.81 $ 11.38
2nd Quarter 20.19 16.38
3rd Quarter 26.44 17.44
4th Quarter 27.06 20.17
Fiscal 2001 :
1st Quarter (through May 1, 2001) $ 29.12 $ 23.19
</TABLE>
The common stock is quoted through the NASDAQ National Market System
under the symbol BBBY. On May 1, 2001, there were approximately 670 shareholders
of record of the common stock (without including individual participants in
nominee security position listings). On May 1, 2001, the last reported sale
price of the common stock was $28.50.
For the foreseeable future, the Company intends to retain all earnings
for use in the operation and expansion of its business and, accordingly, the
Company currently has no plans to pay dividends on its common stock. The payment
of any future dividends will be determined by the Board of Directors in light of
conditions then existing, including the Company's earnings, financial condition
and requirements, restrictions in financing agreements, business conditions and
other factors. At present, the Company's ability to pay dividends is limited
under its Credit Agreement. See Item 8 - Financial Statements and Supplementary
Data.
12
<PAGE> 13
ITEM 6 - SELECTED FINANCIAL DATA
The information required by this item is included in the registrant's
Annual Report to Shareholders for the fiscal year ended March 3, 2001 on the
inside front cover and is incorporated herein by reference.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by this item is included in the registrant's
Annual Report to Shareholders for the fiscal year ended March 3, 2001 on pages 8
through 10 and is incorporated herein by reference.
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements required by this item are included in the
registrant's Annual Report to Shareholders for the fiscal year ended March 3,
2001 on pages 11 through 19 and are incorporated herein by reference. These
financial statements are indexed under Item 14(a)(1).
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
The Executive Officers of the Registrant information required by Part
III, Item 10 - Directors and Executive Officers of the Registrant is included in
this document; all other information required by Part III (Item 10 - Directors
and Executive Officers of the Registrant, Item 11 - Executive Compensation, Item
12 - Security Ownership of Certain Beneficial Owners and Management, and Item 13
- - Certain Relationships and Related Transactions) is incorporated herein by
reference from the Registrant's definitive Proxy Statement for the Annual
Meeting of Shareholders to be held June 28, 2001 filed with the Commission
pursuant to Regulation 14A. The Compensation Report of the Board of Directors,
the Stock Price Performance Graph and the Audit Committee Report included in
such Proxy Statement shall not be deemed incorporated herein by reference.
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
13
<PAGE> 14
(a) (1) FINANCIAL STATEMENTS
The following financial statements and reports are incorporated by
reference to pages 11 through 19 of the Company's Annual Report to
Shareholders for the fiscal year ended March 3, 2001:
Consolidated Balance Sheets as of March 3, 2001 and February 26,
2000.
Consolidated Statements of Earnings for the fiscal years ended March
3, 2001, February 26, 2000 and February 27, 1999.
Consolidated Statements of Shareholders' Equity for the fiscal years
ended March 3, 2001, February 26, 2000 and February 27, 1999.
Consolidated Statements of Cash Flows for the fiscal years ended
March 3, 2001, February 26, 2000, and February 27, 1999.
Notes to Consolidated Financial Statements
Independent Auditors' Report
(a) (2) FINANCIAL STATEMENT SCHEDULE
Schedule 1 - The supplementary income statement schedule is included
in this report.
Independent Auditors' Report on Schedule.
(a) (3) EXHIBITS
The exhibits to this Report are listed in the Exhibit Index included
elsewhere herein.
(b) No reports on Form 8-K were filed by the Company during the fourth
quarter of the fiscal year covered by this report.
14
<PAGE> 15
SCHEDULE 1
BED BATH & BEYOND INC. AND SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT SCHEDULE
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED
---------------------------------------------
MARCH 3, FEBRUARY 26, FEBRUARY 27,
2001 2000 1999
---- ---- ----
ITEM
----
<S> <C> <C> <C>
Advertising Costs $36,961 $28,176 $20,800
======= ======= =======
</TABLE>
15
<PAGE> 16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
BED BATH & BEYOND INC.
BY: /s/ Warren Eisenberg
-----------------------------------
WARREN EISENBERG
CO-CHAIRMAN, CO-CHIEF EXECUTIVE
OFFICER AND DIRECTOR
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- --------- -------- ----
<S> <C> <C>
/s/ Warren Eisenberg Co-Chairman, Co-Chief May 31, 2001
- ---------------------- Executive Officer and Director
WARREN EISENBERG
/s/ Leonard Feinstein Co-Chairman, Co-Chief May 31, 2001
- ---------------------- Executive Officer and Director
LEONARD FEINSTEIN
/s/ Steven H. Temares President, Chief Operating May 31, 2001
- ---------------------- Officer and Director
STEVEN H. TEMARES
/s/ Eugene A. Castagna Vice President - Finance May 31, 2001
- ---------------------- (Principal Financial and
EUGENE A. CASTAGNA Accounting Officer)
/s/ Klaus Eppler Director May 31, 2001
- ----------------------
KLAUS EPPLER
/s/ Robert S. Kaplan Director May 31, 2001
- ----------------------
ROBERT S. KAPLAN
/s/ Robert J. Swartz Director May 31, 2001
- ----------------------
ROBERT J. SWARTZ
</TABLE>
16
<PAGE> 17
Independent Auditor's Report on Schedule
To the Board of Directors and Shareholders of Bed Bath & Beyond Inc.:
Under the date of March 30, 2001, we reported on the consolidated balance
sheets of Bed Bath & Beyond Inc. and subsidiaries as of March 3, 2001 and
February 26, 2000, and the related consolidated statements of earnings,
shareholders' equity and cash flows for each of the fiscal years in the
three-year period ended March 3, 2001, as contained in the Company's Annual
Report to Shareholders for the fiscal year ended March 3, 2001. These
consolidated financial statements and our report thereon are incorporated by
reference in the Annual Report on Form 10-K for the fiscal year ended March 3,
2001. In connection with our audits of the aforementioned consolidated financial
statements, we also have audited the related financial statement schedule listed
in Part IV, Item 14(a)(2) of this Form 10-K. This financial statement schedule
is the responsibility of the Company's management. Our responsibility is to
express an opinion on this financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
/s/KPMG LLP
New York, New York
March 30, 2001
17
<PAGE> 18
ANNUAL REPORT ON FORM 10-K
ITEM 14 (a)(3)
EXHIBITS
BED BATH & BEYOND INC.
FISCAL YEAR ENDED MARCH 3, 2001
<PAGE> 19
EXHIBIT INDEX
Unless otherwise indicated, exhibits are incorporated by reference to the
correspondingly numbered exhibits to the Company's Registration Statement on
Form S-1 (Commission File No. 33-47250)
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
------- -------
<S> <C>
3.1 Restated Certificate of Incorporation
3.2 Certificate of Amendment to the Company's Certificate of
Incorporation (incorporated by reference to Exhibit 3 to the
Company's Quarterly Report on Form 10-Q/A for the quarter
ended August 25, 1996)
3.3 Certificate of Amendment to the Company's Certificate of
Incorporation (incorporated by reference to Exhibit 3.1 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
August 30, 1997)
3.4 Certificate of Change of Bed Bath & Beyond Inc. under Section
805-A of the Business Corporation Law (incorporated by
reference to Exhibit 3.2 to the Company's Quarterly Report on
Form 10-Q for the quarter ended August 30, 1997)
3.5 Amended and Restated By-laws, as amended through June 26, 1997
(incorporated by reference to Exhibit 3.3 to the Company's
Quarterly Report on Form 10-Q for the quarter ended August 30,
1997)
3.6 Certificate of Amendment of Certificate of Incorporation
(incorporated by reference to Exhibit 3.6 to the Company's
Form 10-K for the year ended February 27, 1999)
3.7 Amended By-Laws of Bed Bath & Beyond Inc. (As amended through
December 17, 1998) (incorporated by reference to Exhibit 3.7
to the Company's on Form 10-K for the year ended February 27,
1999)
3.8 Amended By-Laws of Bed Bath & Beyond Inc. (As amended through
September 22, 1999) (incorporated by reference to Exhibit 3.1
to the Company's Quarterly Report on Form 10-Q for the quarter
ended August 28, 1999)
10.1 Credit Agreement among the Company, bed 'n bath Stores, Inc.,
BBBL, Inc., BBBY Management Corporation, Chemical Bank New
Jersey, N.A., Chemical Bank and Chemical Bank New Jersey, N.A.
as Agent (incorporated by reference to Exhibit 28 to the
Company's Form 8-K dated November 14, 1994)
10.2* Agreement Concerning "Split Dollar" Life Insurance Plan, dated
May 9, 1994, among the Company, Jay D.Waxenberg, as trustee of
the Warren Eisenberg Life Insurance Trust, Warren Eisenberg
and Maxine Eisenberg (incorporated by reference to Exhibit
10.12 to the Company's Form 10-K for the year ended February
27, 1994)
</TABLE>
19
<PAGE> 20
<TABLE>
<S> <C>
10.3* Agreement Concerning "Split Dollar" Life Insurance Plan, dated
May 9, 1994, among the Company, Jay D.Waxenberg, as trustee of
the Leonard Joseph Feinstein Life Insurance Trust, Leonard
Joseph Feinstein and Susan Feinstein (incorporated by
reference to Exhibit 10.13 to the Company's Form 10-K for the
year ended February 27, 1994)
10.4* Agreement Concerning "Split Dollar" Life Insurance Plan, dated
June 16, 1995, among the Company, Jay D. Waxenberg, as trustee
of the Warren Eisenberg Life Insurance Trust, Warren Eisenberg
and Maxine Eisenberg (incorporated by reference to Exhibit
10.12 to the Company's Form 10-K for the year ended February
27, 1994)
10.5* Agreement Concerning "Split Dollar" Life Insurance Plan, dated
June 16, 1995, among the Company, Jay D. Waxenberg, as trustee
of the Leonard Joseph Feinstein Life Insurance Trust, Leonard
Joseph Feinstein and Susan Feinstein (incorporated by
reference to Exhibit 10.13 to the Company's Form 10-K for the
year ended February 27, 1994)
10.6 First Amendment to the Credit Agreement among the Company, bed
`n bath Stores, Inc., BBBL, Inc., BBBY Management Corporation,
Chemical Bank New Jersey, N.A., Chemical Bank and Chemical
Bank New Jersey, N.A. as Agent, dated October 1, 1995
(incorporated by reference to Exhibit 10.9 to the Company's
Form 10-K for the year ended March 1, 1997)
10.7 Second Amendment to the Credit Agreement among the Company,
bed `n bath Stores, Inc., BBBL, Inc., BBBY Management
Corporation, Chemical Bank New Jersey, N.A., Chemical Bank and
Chemical Bank New Jersey, N.A. as Agent, dated February 24,
1997 (incorporated by reference to Exhibit 10.11 to the
Company's Form 10-K for the year ended March 1, 1997)
10.8 Third Amendment to the Credit Agreement among the Company, bed
`n bath Stores, Inc., BBBL, Inc., BBBY Management Corporation,
and The Chase Manhattan Bank, dated September 11, 1997
(incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended November
29, 1997)
10.9 Fourth Amendment to the Credit Agreement among the Company,
bed `n bath Stores, Inc., BBBL, Inc., BBBY Management
Corporation, and The Chase Manhattan Bank, dated September 19,
1997 (incorporated by reference to Exhibit 10.2 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
November 29, 1997)
10.10* Employment Agreement between the Company and Warren Eisenberg,
dated as of June 30, 1997 (incorporated by reference to
Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
for the quarter ended August 30, 1997)
10.11* Employment Agreement between the Company and Leonard
Feinstein, dated as of June 30, 1997 (incorporated by
reference to Exhibit 10.2 to the Company's Quarterly Report on
Form 10-Q for the quarter ended August 30, 1997)
10.12* Stock Option Agreement between the Company and Warren
Eisenberg, dated as of August 26, 1997 (incorporated by
reference to Exhibit 10.3 to the Company's Quarterly
</TABLE>
20
<PAGE> 21
<TABLE>
<S> <C>
Report on Form 10-Q for the quarter ended August 30, 1997)
10.13* Stock Option Agreement between the Company and Leonard
Feinstein, dated as of August 26, 1997 (incorporated by
reference to Exhibit 10.4 to the Company's Quarterly Report on
Form 10-Q for the quarter ended August 30, 1997)
10.14* Company's 1992 Stock Option Plan, as amended through August
26, 1997 (incorporated by reference to Exhibit 10.5 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
August 30, 1997)
10.15* Company's 1996 Stock Option Plan, as amended through August
26, 1997 (incorporated by reference to Exhibit 10.6 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
August 30, 1997)
10.16* Employment Agreement between the Company and Steven H. Temares
(dated as of December 1, 1994) (incorporated by reference to
Exhibit 10.16 to the Company's Form 10-K for the year ended
February 28, 1998)
10.17* Form of Employment Agreement between the Company and certain
executives (including all of the executive officers of the
Company other than the Co-Chief Executive Officers, the Chief
Operating Officer and the Chief Financial Officer) (dated as
of December 1, 1994) (incorporated by reference to Exhibit
10.17 to the Company's Form 10-K for the year ended February
28, 1998)
10.18* Company's 1998 Stock Option Plan (incorporated by reference to
Exhibit 10 to the to the Company's Quarterly Report on Form
10-Q for the quarter ended May 30, 1998)
10.19 Fifth Amendment to the Credit Agreement among the Company, bed
`n bath Stores, Inc., BBBL, Inc., Bed Bath & Beyond of
California Limited Liability Company, BBBY Management
Corporation and The Chase Manhattan Bank, dated October 26,
1998 (incorporated by reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
November 29, 1998)
10.20 Second Amended and Restated Revolving Credit Note among the
Company, bed `n bath Stores, Inc., BBBL, Inc., Bed Bath &
Beyond of California Limited Liability Company, BBBY
Management Corporation and The Chase Manhattan Bank, dated
October 26, 1998 (incorporated by reference to Exhibit 10.2 to
the Company's Quarterly Report on Form 10-Q for the quarter
ended November 29, 1998)
10.21* Stock Option Agreement between the Company and Warren
Eisenberg, dated as of August 13, 1999 (incorporated by
reference to Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended November 27, 1999)
10.22* Stock Option Agreement between the Company and Leonard
Feinstein, dated as of August 13, 1999 (incorporated by
reference to Exhibit 10.2 to the Company's Quarterly Report on
Form 10-Q for the quarter ended November 27, 1999)
</TABLE>
21
<PAGE> 22
<TABLE>
<S> <C>
10.23* Form of Standard Stock Option Agreement (incorporated by
reference to Exhibit 10.3 to the Company's Quarterly Report on
Form 10-Q for the quarter ended November 27, 1999)
10.24* Company's 2000 Stock Option Plan (incorporated by reference to
Exhibit 10 to the Company's Quarterly Report on Form 10-Q for
the quarter ended May 27, 2000 which is incorporated by
reference to Exhibit A to the Registrant's Proxy Statement
dated May 22, 2000)
10.25* Form of Standard Stock Option Agreement (incorporated by
reference to Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended August 26, 2000)
10.26* Amendment to Employment Agreement dated as of June 30, 2000
between Bed Bath & Beyond Inc. and Warren Eisenberg
(incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended November
25, 2000)
10.27* Amendment to Employment Agreement dated as of June 30, 2000
between Bed Bath & Beyond Inc. and Leonard Feinstein
(incorporated by reference to Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended November
25, 2000)
10.28** Sixth Amendment to the Credit Agreement among the Company, bed
`n bath Stores, Inc., BBBL, Inc., Bed Bath & Beyond of
California Limited Liability Company, BBBY Management
Corporation and The Chase Manhattan Bank, dated March 28, 2001
10.29** Company's 2001 Stock Option Plan
13** Company's 2000 Annual Report, certain portions of which have
been incorporated by reference herein
21** Subsidiaries of the Company Commission File No. 33-1
23** Independent Auditors' Consent
</TABLE>
- ----------
* This is a management contract or compensatory plan or arrangement.
** Filed herewith.
22
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.28
<SEQUENCE>2
<FILENAME>y49742ex10-28.txt
<DESCRIPTION>SIXTH AMENDMENT TO CREDIT AGREEMENT
<TEXT>
<PAGE> 1
Exhibit 10.28
SIXTH AMENDMENT TO
CREDIT AGREEMENT
THIS SIXTH AMENDMENT TO CREDIT AGREEMENT (this "Sixth Amendment") is made
effective as of March 28, 2001, except as otherwise set forth herein, by and
among BED BATH & BEYOND INC., a New York corporation (the "Company"), and
BED-N-BATH STORES INC., a New Jersey corporation a/k/a BED 'N BATH STORES INC.
("BNBS"), BED BATH & BEYOND OF CALIFORNIA LIMITED LIABILITY COMPANY, a Delaware
limited liability company ("Calco"), and BBBY MANAGEMENT CORPORATION, a New
Jersey corporation ("BBBY", and together with BNBS, BBBL and Calco,
collectively, the "Guarantors" and individually, a "Guarantor," and the
Guarantors together with the Company, collectively, the "Credit Parties"); THE
CHASE MANHATTAN BANK, a New York banking corporation (the "Bank"); and BED BATH
& BEYOND PROCUREMENT CO. INC., a New York corporation ("Procurement Co.").
W I T N E S S E T H:
WHEREAS, the Credit Parties (and BBBL, Inc., a Delaware corporation and an
original Guarantor and Credit Party, which as of March 31, 2001 shall be merged
with and into the Company with the Company continuing as the surviving
corporation) and the Bank are parties to that certain Credit Agreement, dated as
of October 26, 1994, as amended by that certain First Amendment, dated as of
October 1, 1995, as further amended by that certain Second Amendment, dated as
of February 24, 1997, that certain Third Amendment, dated as of September 11,
1997, that certain Fourth Amendment, dated as of September 19, 1997, and that
certain Fifth Amendment, dated as of October 26, 1998 (such Credit Agreement, as
amended by the First Amendment, the Second Amendment, the Third Amendment, the
Fourth Amendment, and the Fifth Amendment shall hereafter be known as, the
"Credit Agreement"); and
WHEREAS, the Credit Parties and the Bank have agreed to further amend the
Credit Agreement to: (i) decrease the Revolving Credit Commitment to an
aggregate maximum principal amount of not to exceed at any time outstanding,
$25,000,000, (ii) effective March 31, 2001, add Bed Bath & Beyond Procurement
Co. Inc., a New York corporation and wholly-owned Subsidiary of the Company, as
a Guarantor and a Credit Party thereunder and an account party for Letters of
Credit as set forth therein, and (iii) otherwise modify certain of the terms and
provisions thereof;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto hereby agree as follows:
1. MODIFICATION OF THE CREDIT AGREEMENT. The Credit Agreement is hereby
amended in the following particulars:
(A) (i) Effective as of March 31, 2001, all references to the "Credit
Parties" in the Credit Agreement are deemed to mean,
collectively, the Company, BNBS, Calco, BBBY, and Procurement
Co., as defined in this Sixth Amendment; and
(ii) Effective as of March 31, 2001, all references to the
"Guarantors" in the Credit Agreement are deemed to mean,
collectively, BNBS, Calco, BBBY, and Procurement Co., as defined
in this Sixth Amendment;
(iii) All references to the "Agreement" or "this Agreement" in
the Credit Agreement are deemed to mean the Credit Agreement, as
amended by this Sixth Amendment; and all references to the "Loan
Documents" in the Credit Agreement are deemed to mean the Credit
<PAGE> 2
Agreement and the other Loan Documents, as amended by this Sixth
Amendment;
(iv) The aggregate maximum principal amount outstanding at any
one time under the Revolving Credit Commitment is set forth
opposite the Bank's name on the signature page of this Sixth
Amendment;
(v) All references to a "Responsible Officer" in the Credit
Agreement with respect to financial matters are deemed to include
the Vice President of Finance of the Company or any Guarantor, as
well as the chief financial officer thereof; and
(vi) All references to the "Revolving Credit Note(s)" or the
"Notes(s)" in the Credit Agreement are deemed to mean that
certain Third Amended and Restated Revolving Credit Note, dated
as of March 28, 2001, as attached to this Sixth Amendment as
EXHIBIT A (the "2001 Note"); and all references to the
"Obligations" in the Credit Agreement are deemed to include,
along with the other obligations set forth therein, all
obligations of the Credit Parties (as re-defined in this Sixth
Amendment) to the Bank under the 2001 Note.
(B) Procurement Co. has requested that going forward the Bank issue
Letters of Credit for its behalf (as well as for the account of Company).
Procurement Co. shall execute and deliver to the Bank an Application. From
and after March 31, 2001, upon receipt of such Application and in
accordance with and subject to the terms of Section 3 of the Credit
Agreement, the Bank hereby agrees to issue Letters of Credit for either or
both of the Company and Procurement Co. Henceforth, all references to "the
Company" throughout Section 3 of the Credit Agreement are deemed to mean
the Company and/or Procurement Co., as an account party.
(C) Section 14.2 of the Credit Agreement (Notices) is hereby amended
so that notices to the Bank read as follows:
"The Bank: The Chase Manhattan Bank
695 Route 46 West
Fairfield, New Jersey 07004
Attention: Andrea M. Johnson, VP
Telecopy: (973) 439-5017/18"
Notices to the Bank's attorneys remain the same.
2. ESTOPPEL. To induce the Company, BNBS, Calco, and BBBY to enter into
this Sixth Amendment, each of the Company, BNBS, Calco, and BBBY
hereby represents and warrants to the Bank that:
(A) As of March 28, 2001, there is currently $-0- of principal,
together with accrued interest thereon, outstanding under the
Revolving Credit Loan; and to the best of the Company's knowledge, the
Company has no defenses, offsets or counterclaims regarding the same.
(B) As of March 28, 2001, there is currently the amount set forth in
SCHEDULE I to this Sixth Amendment of L/C Obligations outstanding
under the Credit Agreement, and to the best of the Company's
knowledge, the Company has no defenses, offsets or counterclaims
regarding the same.
(C) As of March 28, 2001, the Company has no defenses, offsets or
counterclaims regarding its other Obligations to the Bank under the
Credit Agreement.
(D) As of March 28, 2001, each of BNBS, Calco, and BBBY has no
defenses, offsets or counterclaims regarding its Obligations to the
Bank under the Credit Agreement.
<PAGE> 3
3. ADDITION OF PROCUREMENT CO. AS A CREDIT PARTY AND A GUARANTOR. From
and after March 31, 2001, Procurement Co. shall be considered a Credit
Party and Guarantor under the Credit Agreement and the other Loan
Documents and shall be bound by the terms and conditions thereof.
4. CONDITIONS PRECEDENT. The agreement of the Bank to amend the Credit
Agreement as set forth in this Sixth Amendment shall not become
effective unless the Bank shall have received, in form and substance
reasonably satisfactory to the Bank and its counsel, the following:
(A) This Sixth Amendment, duly executed and delivered by the parties
hereto;
(B) The 2001 Note, duly executed and delivered by the Company;
(C) (i) True and complete copies (including all amendments) of the
charter and bylaws of Procurement Co., certified by the corporate
secretary of Procurement Co. to be in full force and effect as of
March 31, 2001; and (ii) a corporate resolution of Procurement Co.,
certified by its corporate secretary as of March 31, 2001 and in full
force and effect authorizing: (x) the consummation of the transactions
contemplated by this Sixth Amendment, and (y) specific officers to
execute and deliver this Sixth Amendment and such other instruments
and documents as may be executed in connection herewith;
(D) A certificate of the corporate secretary of Procurement Co.
certifying the names of the officers authorized to execute this Sixth
Amendment and such other instruments and documents as may be executed
in connection herewith, together with the true and genuine signatures
of each of such officers;
(E) Good standing certificates of the appropriate Governmental
Authorities, dated the most recent practicable date on or about March
31, 2001, showing Procurement Co. to be in good standing in its state
of incorporation and such states in which such entity is authorized to
do business;
(F) Evidence of the merger of BBBL, Inc. with and into the Company,
and the Company's continuance as the surviving corporation;
(G) Payment of all reasonable fees and expenses incurred by the Bank
in connection with this Sixth Amendment, including, but not limited
to, reasonable fees and expenses of counsel to the Bank; and
(H) Such other documents, certificates, opinions, affidavits, etc. as
the Bank may reasonably request.
Notwithstanding anything contained in Section 3 to the contrary, the
items set forth in paragraphs (c) and (D) may be delivered by March
31, 2001, and the items set forth in paragraph (E) of this Section 3
may be delivered by April 16, 2001. The failure to deliver such items
within such time period will constitute an Event of Default.
5. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Procurement Co.
hereby makes the representations and warranties, and each of Company
and the other Credit Parties hereby reaffirms the representations and
warranties made by it, in the Credit Agreement and all of the other
Loan Documents as fully and completely as if set forth herein at
length. All of such representations and warranties are true, correct
and complete as of March 31, 2001 (except as to such representations
and warranties, which are made as of a specified date, in which case
such representations and warranties remain true as of such date). In
addition, each of Company and the other Credit Parties (including
<PAGE> 4
Procurement Co.) represents and warrants to the Bank that:
(A) Each of the Company and the other Credit Parties has the power and
authority to enter into this Sixth Amendment;
(B) The execution, delivery and performance of this Sixth Amendment
and the instruments and documents executed and delivered by the
Company and the other Credit Parties in connection herewith have been
duly authorized by all requisite corporate or other action, and this
Sixth Amendment and the instruments and documents executed and
delivered in connection herewith constitute the legal, valid, and
binding obligations of the Company and the other Credit Parties,
enforceable against each of them (to the extent each is a party
thereto), in accordance with their terms; and
(C) No Event of Default has occurred and is continuing.
(D) The execution and delivery of this Sixth Amendment and the
instruments and documents executed and delivered in connection
herewith, the consummation of the transactions contemplated hereunder
and the fulfillment of or compliance with the terms and conditions
contained herein by the Credit Parties are not prevented, or limited
by, and do not result in the breach of, any terms, conditions or
provisions of any requirements of law or any contractual obligations
of the Credit Parties in any respect which could have a Material
Adverse Effect.
Each of the Company and the Credit Parties other than Procurement Co.
represents and warrants to the Bank that there have been no amendments
to its corporate/limited liability organizational documents since
October 26, 1998 other than in connection with the merger of BBBL,
Inc. with and into the Company, and that such organization documents
remain in full force and effect as of March 31, 2001.
6. REAFFIRMATION OF COVENANTS. Procurement Co. hereby covenants and
agrees to abide by the affirmative and negative covenants, and each of
the Company and the other Credit Parties hereby reaffirms the
affirmative and negative covenants, set forth in the Credit Agreement
and the other Loan Documents fully and completely as if set forth
herein at length, and agrees that such covenants shall remain in full
force and effect until payment in full of the Obligations.
7. MISCELLANEOUS.
(A) EFFECT OF AMENDMENT. Except as amended by this Sixth Amendment,
all terms and provisions of the Credit Agreement and the other Loan
Documents, and all rights of the Bank and obligations of the Company
and the other Credit Parties thereunder, remain unchanged and in full
force and effect, and are hereby ratified, adopted and confirmed in
all respects. This Sixth Amendment is incorporated by reference in the
Credit Agreement and the other Loan Documents. This Sixth Amendment is
given as a modification of the Company's and the other Credit Parties'
obligations to the Bank under the Credit Agreement and is not give in
substitution therefor or extinguishment thereof and is not intended to
be a novation.
(B) COSTS AND EXPENSES. Each of the Company and the other Credit
Parties agrees to pay all reasonable costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses) incurred
by the Bank in connection with the preparation, execution, delivery
and administration of this Sixth Amendment and the documents executed
and delivered in connection herewith.
(C) COUNTERPARTS. This Sixth Amendment may be executed in any number
of counterparts, each of which when so executed shall be deemed to be
an original and all of which when taken together
<PAGE> 5
shall constitute one and the same agreement.
(D) GOVERNING LAW. This Sixth Amendment shall be governed by and
construed in accordance with the internal laws (and not the law of
conflicts) of the State of New York.
(SIGNATURES ON THE NEXT PAGE)
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have caused this Sixth Amendment
to be duly executed and delivered by their respective officers/members duly
authorized as of the effective date(s) set forth above.
BED BATH & BEYOND INC.
By: /s/ Leonard Feinstein
---------------------------------
Name: Leonard Feinstein
Title: Co-Chief Executive Officer
BED-N-BATH STORES INC.
By: /s/ Leonard Feinstein
---------------------------------
Name: Leonard Feinstein
Title: President
BED BATH & BEYOND OF CALIFORNIA
LIMITED LIABILITY COMPANY
By: BED BATH & BEYOND
PROCUREMENT CO. INC.,
sole member
By: /s/ Leonard Feinstein
---------------------------------
Name: Leonard Feinstein
Title: President
BBBY MANAGEMENT CORPORATION
By: /s/ Leonard Feinstein
---------------------------------
Name: Leonard Feinstein
Title: Vice President
BED BATH & BEYOND PROCUREMENT
CO. INC.
By: /s/ Leonard Feinstein
---------------------------------
Name: Leonard Feinstein
Title: President
<PAGE> 7
REVOLVING LOAN COMMITMENT: THE CHASE MANHATTAN BANK
$25,000,000 (EFFECTIVE 3/28/01)
By: /s/ Andrea M. Johnson
----------------------
Name: Andrea M. Johnson
Title: Vice President
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.29
<SEQUENCE>3
<FILENAME>y49742ex10-29.txt
<DESCRIPTION>COMPANY'S 2001 STOCK OPTION PLAN
<TEXT>
<PAGE> 1
Exhibit 10.29
BED BATH AND BEYOND INC.
2001 STOCK OPTION PLAN
1 Purpose.
The purpose of the Bed Bath & Beyond Inc. 2001 Stock Option Plan (the
"Plan") is to encourage and enable key employees (which term, as used herein,
shall include officers), and directors of Bed Bath & Beyond Inc. or a parent (if
any) or subsidiaries thereof (collectively, unless the context otherwise
requires, the "Company"), consultants, and advisors to the Company, and other
persons or entities providing goods or services to the Company to acquire a
proprietary interest in the Company. (Such directors, members, consultants,
advisors, and other persons or entities providing goods or services to the
Company and entitled to receive options hereunder being collectively referred to
as the "Associates," and the relationship of the Associates to the Company being
referred to as "association with" the Company.) Such ownership will provide such
employees and Associates with a more direct stake in the future welfare of the
Company and encourage them to remain employed by or associated with the Company.
It is also expected that the Plan will encourage qualified persons to seek and
accept employment or association with the Company.
2 Effective Date and Term of Plan.
(a) The effective date of the Plan shall be February 28, 2001, the date the
Plan was adopted by the Board of Directors of the Company (the "Board").
(b) No option shall be granted under the Plan on or after the tenth
anniversary of the effective date of the Plan, but options previously granted
may extend beyond that date.
3 Administration.
(a) The Plan shall be administered by one or more committees appointed from
time to time by the Board (each such committee being referred to as a
"Committee"). In the event that more than one Committee is appointed by the
Board, the Board shall specify with respect to each Committee the group of
employees and Associates with respect to which such Committee shall have the
power to grant options. In the event that more than one Committee is appointed
by the Board, then each reference in the Plan to "the Committee" shall be deemed
a reference to each such Committee (subject to the last sentence of this
paragraph); provided, however, that each such Committee may only exercise the
power and authority granted to "the Committee" by the Plan with respect to those
employees and Associates that it has the power to grant options to as specified
in the resolution of the Board appointing such Committee. Each Committee shall
be comprised of two or more directors. A majority of the members of each
Committee shall constitute a quorum, and all determinations of the Committee
shall be made by a majority of its members. Any determination of any Committee
under the Plan may be made, without notice or meeting of the Committee, by a
writing signed by a majority of the Committee members. All members of each
Committee shall be "non-employee directors" within the meaning of Rule 16(b)-3
under the Securities Act of 1933, as amended (the "Act"); provided, however,
that the foregoing shall not apply to any Committee that does not have the power
to grant options to officers or directors of the Company or otherwise make any
decisions with respect to the timing or the pricing of any options granted to
such officers and directors. If pursuant to the preceding sentence a Committee
is required to be comprised of "non-employee directors," then the members of
such Committee shall not be eligible to receive options under the Plan. In the
event that more than one Committee is appointed by the Board, the power to amend
the Plan granted by Section 9(b) hereof may only be
<PAGE> 2
exercised by a Committee all of whose members are "non-employee directors"
within the meaning of Rule 16(b)-3 under the Act.
(b) The Committee shall have authority, not inconsistent with the express
provisions of the Plan, (i) to grant options which are not intended to be
incentive stock options as defined in Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code") to such eligible employees and Associates of
the Company as the Committee may select; provided, however, that (a) the maximum
number of options that may be granted under this Plan to any employee or
Associate of the Company over the term of the Plan shall not exceed 1,000,000
shares (subject to any adjustment in accordance with Section 7(b)), and (b)
options shall only be granted to directors and officers (as defined in Rule
16(a)-1(f) under the Securities Exchange Act of 1934, as amended) of the Company
to the extent permitted by the rules of the National Association of Securities
Dealers, for so long as the Stock is quoted through the NASDAQ (as defined
below), and/or the rules and regulations of such other automated quotation
systems or securities exchanges on which the Stock (as defined below) may
hereafter be listed; (ii) to determine the time or times when options shall be
granted and the number of Shares subject to each option; (iii) to determine the
terms and conditions of each option; (iv) to prescribe the form or forms of
instruments evidencing options and any other instruments required under the Plan
and to change such forms from time to time; (v) to adopt, amend and rescind
rules and regulations for the administration of the Plan; and (vi) to interpret
the Plan and to decide any questions and settle all controversies and disputes
that may arise in connection with the Plan. Any determination, decision or
action of the Committee in connection with the construction, interpretation,
administration or application of the Plan shall be final and conclusive on all
persons participating in the Plan.
4 Shares Subject to the Plan.
(a) Number of Shares.
Subject to adjustment as provided in Section 7, the aggregate number of
shares of the Company's common stock (the "Shares" or "Stock") that may be
delivered upon the exercise of options granted under the Plan shall be
10,000,000. If any option granted under the Plan terminates without having been
exercised in full, the number of Shares as to which such option was not
exercised shall be available for future grants within the limits set forth in
this Section 4(a).
(b) Shares to be Delivered.
Shares delivered under the Plan shall be authorized but unissued Stock or,
if the Committee so decides in its sole discretion, previously issued Stock
acquired by the Company and held in treasury. No fractional shares of Stock
shall be delivered under the Plan.
5 Eligibility for Options.
Employees and Associates of the Company eligible to receive options under
the Plan shall be those employees and Associates who, in the opinion of the
Committee, are in a position to make a significant contribution to the success
of the Company. In addition, directors and officers (as defined in Rule
16(a)-1(f) under the Securities Exchange Act of 1934, as amended) of the Company
shall only be eligible to receive options under the Plan to the extent permitted
by the rules of the National Association of Securities Dealers, for so long as
the Stock is quoted through the NASDAQ (as defined below), and/or the rules and
regulations of such other automated quotation systems or securities exchanges on
which the Stock may hereafter be listed. Receipt of options under the Plan or of
awards under any other employee benefit plan of the Company shall not preclude
an employee from receiving options or additional options under the Plan.
<PAGE> 3
6 Terms and Conditions of Options.
(a) Exercise Price. The exercise price of each option shall be determined
by the Committee which may be based on the fair market value per share of Stock
at the time the option is granted. The fair market value of a share of Stock as
of any date shall be determined for purposes of the Plan by such method as the
Committee determines to be reasonable.
(b) Duration of Options. An option shall be exercisable during such period
or periods as the Committee may specify. The latest date on which an option may
be exercised (the "Final Exercise Date") shall be the date which is ten years
from the date the option was granted or such earlier date as may be specified by
the Committee at the time the option is granted.
(c) Exercise of Options.
(1) At the time of the grant of an option, the Committee shall specify
whether the option shall be exercisable in full at any time prior to
the Final Exercise Date or in installments (which may be cumulative or
noncumulative). In the case of an option not immediately exercisable
in full, the Committee may at any time accelerate the time at which
all or any part of the option may be exercised.
(2) The award forms or other instruments evidencing options shall contain
such provisions relating to exercise and other matters as the
Committee may determine.
(3) Any exercise of an option shall be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by (a) the
option certificate and any other documents required by the Committee
and (b) payment in full for the number of Shares for which the option
is exercised.
(4) The Committee shall have the right to require that the individual
exercising the option remit to the Company an amount sufficient to
satisfy any federal, state, or local withholding tax requirements (or
make other arrangements satisfactory to the Company with regard to
such taxes) prior to the delivery of any Stock pursuant to the
exercise of the option.
(5) If an option is exercised by the executor or administrator of a
deceased employee or Associate, or by the person or persons to whom
the option has been transferred by the employee or Associate, the
Company shall be under no obligation to deliver Stock pursuant to such
exercise until the Company is satisfied as to the authority of the
person or persons exercising the option.
(d) Termination of Employment.
An employee's options shall terminate immediately upon the termination of
his employment with the Company, subject to the following exceptions: (i) if the
termination is by reason of the death or disability of the employee, the
unexercised portion of such options shall continue to be exercisable for 12
months after such termination and (ii) if the termination is for any other
reason, excluding termination for cause, the unexercised portion of such options
shall continue to be exercisable for three months after such termination.
Notwithstanding the foregoing, the Committee in its discretion in any particular
case may provide that upon termination of an employee's employment with the
Company, the unexercised portion of his options shall continue to be exercisable
for a longer or shorter period than the period provided for in the preceding
sentence; provided, however, that the Committee may not provide for a shorter
period after the option is granted. For purposes of this Section 6(d),
employment shall not be considered terminated (i) in the case of sick leave or
other bona fide leave of absence approved for purposes of the Plan by the
Committee, so long as the employee's right to reemployment is guaranteed either
by statute or by contract, or (ii) in the case of a transfer of employment
between the Company and a subsidiary or between subsidiaries, or to the
employment of a corporation (or
<PAGE> 4
a parent or subsidiary corporation of such corporation) issuing or assuming an
option in a transaction to which Section 424(a) of the Code applies.
(e) Payment for Stock.
Stock purchased under the Plan shall be paid for as follows: (i) in cash or
by certified check, bank draft or money order payable to the order of the
Company or (ii) if so permitted by the Committee (not later than the time of
grant, in the case of an incentive option), (A) through the delivery of shares
of Stock (including shares acquired under the option then being exercised)
having a fair market value (determined as provided in Section 6(a)) on the date
of exercise equal to the purchase price or (B) by a combination of cash and
Stock as provided in clauses (i) and (ii)(A) above or (C) by delivery of a
promissory note of the option holder to the Company, such note to be payable in
the case of an incentive option, on such terms as are specified in the option
(except that, in lieu of a stated rate of interest, an incentive option may
provide that the rate of interest on the note will be such rate as is
sufficient, at the time the note is given, to avoid the imputation of interest
under the applicable provisions of the Code), or by a combination of cash (or
cash and Stock) and the option holder's promissory note; provided, that if the
Stock delivered upon exercise of the option is an original issue of authorized
Stock, at least so much of the exercise price as represents the par value of
such Stock shall be paid in cash or by a combination of cash and Stock.
(f) Delivery of Stock.
An option holder shall not have the rights of a shareholder with regard to
awards under the Plan except as to Stock actually received by him under the
Plan. The Company shall not be obligated to deliver any shares of Stock (a)
until, in the opinion of the Company's counsel, all applicable federal and state
laws and regulations have been complied with, and (b) if the outstanding Stock
is at the time listed on any stock exchange or quoted through the National
Association of Securities Dealers Automatic Quotation ("NASDAQ") National Market
System, until the shares to be delivered have been listed or authorized to be
listed on such exchange or System upon official notice of issuance, and (c)
until all other legal matters in connection with the issuance and delivery of
such shares have been approved by the Company's counsel. If the sale of Stock
has not been registered under the Act, the Company may require, as a condition
to exercise of the option, such representations or agreements as counsel for the
Company may consider appropriate to avoid violation of the Act and may require
that the certificates evidencing such Stock bear an appropriate legend
restricting transfer.
(g) Nontransferability of Options.
In the case of an option which is not an incentive stock option, the
Committee may provide that options may be transferred to the extent and subject
to such limitations as the Committee may specify.
(h) Restrictions on Stock.
The Committee may provide that shares of Stock purchased through the
exercise of options under the Plan be subject to such restrictions on resale,
including restrictions requiring resale to the Company at or below fair market
value, or such other restrictions, as the Committee in its sole discretion shall
determine, and shall take such steps as it deems necessary or appropriate to
carry out the purposes of any such restriction.
7 Mergers, Recapitalizations, etc.
(a) In the event of a consolidation or merger in which the Company is not
the surviving corporation or in the event of any transaction that results in the
acquisition of substantially all of the Company's outstanding Stock by a single
person or entity or by a group of persons and/or entities acting in concert, or
in the event of the sale or transfer of substantially all of the Company's
assets (all the foregoing being referred to as "Acquisition Events"), then the
<PAGE> 5
Committee may in its discretion terminate all outstanding options by delivering
notice of termination to each option holder; provided, however, that, during the
20-day period following the date on which such notice of termination is
delivered, each option holder shall have the right to exercise in full all of
his options that are then outstanding (without regard to limitations on exercise
otherwise contained in the options). If an Acquisition Event occurs and the
Committee does not terminate the outstanding options pursuant to the preceding
sentence, then the provisions of Section 7(b) shall apply.
(b) In the event of a stock dividend, stock split or combination of shares,
recapitalization or other change in the Company's capital stock, the number and
kind of shares of stock of securities of the Company subject to options then
outstanding or subsequently granted under the Plan, the maximum number of shares
or securities that may be delivered under the Plan, the exercise price, and
other relevant provisions shall be appropriately adjusted by the Committee. The
Committee may also adjust the number of shares subject to outstanding options,
the exercise price of outstanding options and the terms of outstanding options
to take into consideration any other event (including, without limitation,
accounting changes) if the Committee determines that such adjustment is
appropriate to avoid distortion in the operation of the Plan. All determinations
and adjustments made by the Committee pursuant to this Section 7(b) shall be
binding on all persons.
(c) The Committee may grant options under the Plan in substitution for
options held by employees of another corporation who concurrently become
employees of the Company or a subsidiary of the Company as the result of a
merger or consolidation of the employing corporation with the Company or a
subsidiary of the Company, or as the result of the acquisition by the Company of
property or stock of the employing corporation. The Company may direct that
substitute awards be granted on such terms and conditions as the Committee
considers appropriate in the circumstances.
8 Limitation on Rights.
Neither the adoption of the Plan nor the grant of options shall confer upon
any employee any right to continued employment with the Company or affect in any
way the right of the Company to terminate the employment of an employee at any
time. Except as specifically provided by the Committee in any particular case,
the loss of existing or potential profit in options granted under this Plan
shall not constitute an element of damages in the event of termination of the
employment of an employee even if the termination is in violation of an
obligation of the Company to the employee by contract or otherwise.
9 Effect, Discontinuance, Cancellation, Amendment and Termination.
(a) Neither adoption of the Plan nor the grant of options to an employee
shall affect the Company's right to grant to such employee options that are not
subject to the Plan, to issue to such employees Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock may be issued to
employees.
(b) The Committee may at any time discontinue granting options under the
Plan. With the consent of the option holder, the Committee may at any time
cancel an existing option in whole or in part and grant the option holder
another option for such number of shares as the Committee specifies The
Committee may at any time or times amend the Plan or any outstanding option for
the purpose of satisfying any changes in applicable laws or regulations or for
any other purpose which may at the time be permitted by law, or at any time
terminate the Plan as to any further grants of options, provided that (except to
the extent expressly required or permitted above) no such amendment shall,
without the approval of the Board, (a) increase the maximum number of shares
available under the Plan, (b) change the group of employees or Associates
eligible to receive options under the Plan, (c) extend the time within which
options may be granted, or (d) amend the provisions of this Section 9, and no
such amendment shall adversely affect the rights of any option holder (without
such holder's consent) under any option previously granted.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>4
<FILENAME>y49742ex13.txt
<DESCRIPTION>ANNUAL REPORT: SELECTED SECTIONS
<TEXT>
<PAGE> 1
BED BATH & BEYOND ANNUAL REPORT 2000
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
FISCAL YEAR ENDED (1)
- ------------------------------------------------------------------------------------------------------------------------------------
(in thousands, except per share March 3, February 26, February 27, February 28, March 1, February 25,
and selected operating data) 2001 2000 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS DATA:
Net sales (2) $ 2,396,655 $ 1,857,505 $ 1,382,345 $ 1,057,135 $ 816,912 $ 597,352
Gross profit (2) 986,459 766,801 576,125 441,016 341,168 250,036
Operating profit 272,838 209,340 158,052 118,914 90,607 67,585
Net earnings 171,922 131,229 97,346 73,142 55,015 39,459
Net earnings per share -
Diluted (3) $ .59 $ .46 $ .34 $ .26 $ .20 $ .14
SELECTED OPERATING DATA:
Number of stores open (at period end) 311 241 186 141 108 80
Total square feet of store space
(at period end) 12,204,000 9,815,000 7,688,000 5,767,000 4,347,000 3,214,000
Percentage increase in comparable
store net sales 5.0% 9.2% 7.6% 6.4% 6.1% 3.8%
BALANCE SHEET DATA (AT PERIOD END):
Working capital $ 532,524 $ 360,585 $ 267,557 $ 188,293 $ 127,333 $ 91,331
Total assets 1,195,725 865,800 633,148 458,330 329,925 235,810
Long-term debt -- -- -- -- -- 5,000
Shareholders' equity $ 817,018 $ 559,045 $ 411,087 $ 295,397 $ 214,361 $ 151,446
</TABLE>
<TABLE>
<CAPTION>
FISCAL YEAR ENDED (1)
- -------------------------------------------------------------------------------------
(in thousands, except per share February 26, February 27, February 28,
and selected operating data) 1995 1994 1993
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
STATEMENT OF EARNINGS DATA:
Net sales (2) $ 437,807 $ 304,571 $ 216,411
Gross profit (2) 183,819 127,972 90,528
Operating profit 51,685 36,906 26,660
Net earnings 30,013 21,887 15,960
Net earnings per share -
Diluted (3) $ .11 $ .08 $ .06
SELECTED OPERATING DATA:
Number of stores open (at period end) 61 45 38
Total square feet of store space
(at period end) 2,339,000 1,512,000 1,128,000
Percentage increase in comparable
store net sales 12.0% 10.6% 7.2%
BALANCE SHEET DATA (AT PERIOD END):
Working capital $ 74,390 $ 56,001 $ 34,842
Total assets 176,678 121,468 76,654
Long-term debt 16,800 13,300 --
Shareholders' equity $ 108,939 $ 77,305 $ 54,643
</TABLE>
(1) Each fiscal year represents 52 weeks, except for fiscal 2000 (ended March 3,
2001) which represents 53 weeks and fiscal 1996 which represents 52 weeks
and 6 days.
(2) Certain reclassifications have been made to selected financial data from
prior years to conform to the fiscal 2000 presentation.
(3) Net earnings per share amounts have been adjusted for two-for-one stock
splits of the Company's common stock (each of which was effected in the form
of a 100% stock dividend), which were distributed in fiscal 2000, 1998, 1996
and 1993. The Company has not declared any cash dividends in any of the
fiscal years noted above.
<PAGE> 2
BED BATH & BEYOND ANNUAL REPORT 2000
8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated (i) selected statement
of earnings data of the Company expressed as a percentage of net sales and (ii)
the percentage change from the prior year in selected statement of earnings
data:
<TABLE>
<CAPTION>
Fiscal Year Ended
-----------------------------------------------------------------------
Percentage Percentage Change
of Net Sales from Prior Year
- -----------------------------------------------------------------------------------------------------------------------------
March 3, February 26, February 27, March 3, February 26,
2001 2000 1999 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 29.0% 34.4%
Cost of sales, including buying,
occupancy and indirect costs 58.8 58.7 58.3 29.3 35.3
Gross profit 41.2 41.3 41.7 28.6 33.1
Selling, general and administrative expenses 29.8 30.0 30.2 28.0 33.3
Operating profit 11.4 11.3 11.4 30.3 32.5
Earnings before provision for income taxes 11.8 11.6 11.7 31.0 33.2
Net earnings 7.2 7.1 7.0 31.0 34.8
</TABLE>
FISCAL 2000 COMPARED WITH FISCAL 1999
In fiscal 2000 (53 weeks), the Company expanded store space by 24.3%, from
9,815,000 square feet at fiscal year end 1999 (52 weeks) to 12,204,000 square
feet at fiscal year end 2000. The 2,389,000 square feet increase was the result
of opening 70 new superstores and expanding two existing stores.
Net sales in fiscal 2000 increased $539.2 million to $2.397 billion,
representing an increase of 29.0% over the $1.858 billion net sales in fiscal
1999 (see Recent Accounting Pronouncements). Approximately 83% of the increase
was attributable to new store net sales and the balance to an increase in
comparable store net sales.
Approximately 55% and 45% of net sales in fiscal 2000 were attributable to sales
of domestics merchandise and home furnishings, respectively. The Company
estimates that bed linens accounted for approximately 21% of net sales during
both fiscal 2000 and fiscal 1999. No other individual product category accounted
for 10% or more of net sales during either fiscal year.
Gross profit in fiscal 2000 was $986.5 million or 41.2% of net sales, compared
with $766.8 million or 41.3% of net sales a year ago.
The percentage increase in comparable store net sales was 5.0% in fiscal 2000
compared with 9.2% in fiscal 1999. The fiscal 2000 increase in comparable store
net sales primarily reflects a strong focus on customer service.
Selling, general and administrative expenses ("SG&A") were $713.6 million or
29.8% of net sales in fiscal 2000 compared to $557.5 million or 30.0% of net
sales in fiscal 1999. The decrease in SG&A as a percentage of net sales
primarily reflects a decrease in occupancy costs and costs associated with new
store openings, partially offset by an increase in payroll and payroll related
items. Preopening expenses associated with new or expanded stores are charged to
earnings as incurred.
The difference between the increase in earnings before provision for income
taxes of 31.0% from fiscal 1999 to fiscal 2000 compared to the year to year
increase in operating profit of 30.3% was attributable to interest income.
FISCAL 1999 COMPARED WITH FISCAL 1998
In fiscal 1999, the Company expanded store space by 27.7%, from 7,688,000 square
feet at fiscal year end 1998 to 9,815,000 square feet at fiscal year end 1999.
The 2,127,000 square feet increase was the result of opening 55 new superstores
and expanding four existing stores.
Net sales in fiscal 1999 increased $475.2 million to $1.858 billion,
representing an increase of 34.4% over the $1.382 billion net sales in fiscal
1998. Approximately 75% of the increase was attributable to new store net sales
and the balance to an increase in comparable store net sales.
<PAGE> 3
BED BATH & BEYOND ANNUAL REPORT 2000
9
Approximately 55% and 45% of net sales in fiscal 1999 were attributable to sales
of domestics merchandise and home furnishings, respectively. The Company
estimates that bed linens accounted for approximately 21% of net sales during
both fiscal 1999 and fiscal 1998. No other individual product category accounted
for 10% or more of net sales during either fiscal year.
Gross profit in fiscal 1999 was $766.8 million or 41.3% of net sales, compared
with $576.1 million or 41.7% of net sales in fiscal 1998. The decrease in gross
profit as a percentage of net sales was primarily attributable to a different
mix of sales during fiscal 1999 compared to the mix of sales during fiscal 1998,
as well as a continued emphasis on providing value pricing to the customer.
The percentage increase in comparable store net sales was 9.2% in fiscal 1999
compared with 7.6% in fiscal 1998. The increase in comparable store net sales
relative to fiscal 1998 reflected a number of factors, including the continued
consumer acceptance of the Company's merchandise offerings, the continued
emphasis on providing value pricing to the customer, a strong focus on customer
service and the generally favorable retailing environment.
SG&A was $557.5 million or 30.0% of net sales in fiscal 1999 compared to $418.1
million or 30.2% of net sales in fiscal 1998. The decrease in SG&A as a
percentage of net sales primarily reflected a decrease in payroll and payroll
related items and occupancy costs. Preopening expenses associated with new or
expanded stores were charged to earnings as incurred.
The difference between the increase in earnings before provision for income
taxes of 33.2% from fiscal 1998 to fiscal 1999 compared to the year to year
increase in operating profit of 32.5% was attributable to interest income.
EXPANSION PROGRAM
The Company is engaged in an ongoing expansion program involving the opening of
new stores in both new and existing markets and the expansion or replacement of
existing stores with larger stores. In the nine year period from the beginning
of fiscal 1992 to the end of fiscal 2000, the chain has grown from 34 stores to
311 stores. Total square footage grew from 917,000 square feet at the beginning
of fiscal 1992 to 12,204,000 square feet at the end of fiscal 2000.
The Company intends to continue its expansion program and currently anticipates
that in fiscal 2001 it will open at least 80 new stores (see details under
"Liquidity and Capital Resources" below). The Company believes that a
predominant portion of any increase in its net sales in fiscal 2001 will
continue to be attributable to new store net sales. Accordingly, the continued
growth of the Company is dependent, in large part, upon the Company's ability to
execute its expansion program successfully, of which there can be no assurance.
LIQUIDITY AND CAPITAL RESOURCES
The Company has been able to finance both its normal operations and its
expansion program principally through internally generated funds during the
preceding five years. The Company's merchandise inventory has grown from $360.3
million at the end of fiscal 1998, to $470.4 million at the end of fiscal 1999
and to $606.7 million at the end of fiscal 2000. The increases in inventory
between the fiscal years were primarily attributable to the addition of new
store space.
The Company's working capital increased from $267.6 million at the end of fiscal
1998, to $360.6 million at the end of fiscal 1999, and to $532.5 million at the
end of fiscal 2000. The increases between the fiscal years were primarily the
result of increases in merchandise inventories and cash and cash equivalents,
which were partially offset by increases in accounts payable and accrued
expenses and other current liabilities.
The Company's expansion program requires the Company to make capital
expenditures for furniture and fixtures, leasehold improvements and computer
equipment on an ongoing basis. The Company's total capital expenditures were
$140.4 million, $90.1 million and $62.3 million during fiscal 2000, 1999 and
1998, respectively.
Under the Company's revolving Credit Agreement (the "Credit Agreement")
concluded in November 1994, and as subsequently amended, the Company may borrow
up to $25.0 million for loans and letters of credit. The Credit Agreement
matures in October 2001.
<PAGE> 4
BED BATH & BEYOND ANNUAL REPORT 2000
10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (Continued)
The Credit Agreement contains certain covenants which, among other things, place
limitations on payment of dividends, capital expenditures and certain expenses.
Additionally, there are restrictions on additional borrowings and a requirement
that the Company maintain certain financial ratios. The Company does not believe
that any of these covenants will materially affect its business or its expansion
program as currently planned.
The Company did not borrow under the Credit Agreement during fiscal 2000, fiscal
1999 or fiscal 1998. The Company believes that during fiscal 2001, internally
generated funds will be sufficient to fund both its normal operations and its
expansion program.
As of March 30, 2001, the Company has leased sites for 62 new superstores
planned for opening in fiscal 2001, including one new store already opened in
Wilkes Barre, Pennsylvania.
Approximate aggregate costs for the 62 leased stores are estimated at $91.8
million for merchandise inventories, $39.3 million for furniture and fixtures
and leasehold improvements and $16.5 million for preopening expenses (which will
be expensed as incurred). In addition to the 62 locations already leased, the
Company expects to open approximately 18 additional locations during fiscal
2001. The costs that the Company is expected to incur in connection with the
anticipated opening of other superstores for which sites have not yet been
leased cannot presently be determined.
RECENT ACCOUNTING PRONOUNCEMENTS
In the fourth quarter of fiscal 2000, the Company adopted the provisions of the
Financial Accounting Standards Board's Emerging Issues Task Force ("EITF") Issue
No. 00-14, "Accounting for Certain Sales Incentives", which provides that the
value of point of sale coupons and rebates that result in a reduction of the
price paid by the customer be recorded as a reduction of sales, and that free
merchandise incentives be recorded as cost of sales. Prior to adoption, the
Company recorded its point of sale coupons and rebates in cost of sales. Upon
adoption, the Company has reclassified such sales incentives as a reduction of
sales in its consolidated statements of earnings for fiscal 2000, 1999 and 1998.
The reclassification had no impact on gross profit, operating profit or net
earnings.
In the fourth quarter of fiscal 2000, the Company also adopted the provisions of
EITF Issue No. 00-10, "Accounting for Shipping and Handling Fees and Costs",
which provides that amounts billed to a customer in a sale transaction related
to shipping and handling represent revenues. Prior to adoption, the Company
recorded such revenues and costs in selling, general and administrative expense.
Upon adoption, the Company has reclassified such shipping and handling fees to
sales and shipping and handling costs to cost of sales in its consolidated
statements of earnings for fiscal 2000, 1999 and 1998. The reclassification had
no impact on operating profit or net earnings.
As a result of these reclassifications, previously reported net sales decreased
by approximately $20.5 million and $14.9 million and cost of sales decreased by
approximately $20.4 million and $14.9 million in fiscal 1999 and fiscal 1998,
respectively.
FORWARD LOOKING STATEMENTS
This Annual Report and, in particular, Management's Discussion and Analysis of
Financial Condition and Results of Operations, and the Shareholder Letter,
contain forward looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended. The Company's actual results of
operations and future financial condition may differ materially from those
expressed in any such forward looking statements as a result of many factors
that may be beyond the Company's control. Such factors include, without
limitation: general economic conditions, changes in the retailing environment
and consumer spending habits, demographics and other macroeconomic factors that
may impact the level of spending for the types of merchandise sold by the
Company; unusual weather patterns; competition from existing and potential
competitors; competition from other channels of distribution; pricing pressures;
the ability to find suitable locations at reasonable occupancy costs to support
the Company's expansion program; the availability of trained qualified
management personnel to support the Company's growth; and the cost of labor,
merchandise and other costs and expenses.
SEASONALITY
The Company's business exhibits less seasonality than many other retail
businesses, although sales levels are generally higher in August, November and
December, and generally lower in February and March.
<PAGE> 5
BED BATH & BEYOND ANNUAL REPORT 2000
11
CONSOLIDATED BALANCE SHEETS
Bed Bath & Beyond Inc. and Subsidiaries
<TABLE>
<CAPTION>
March 3, February 26,
(in thousands, except per share data) 2001 2000
- --------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 239,328 $ 144,031
Merchandise inventories 606,704 470,433
Prepaid expenses and other current assets 39,681 32,904
- --------------------------------------------------------------------------------------
Total current assets 885,713 647,368
- --------------------------------------------------------------------------------------
Property and equipment, net 302,656 208,911
Other assets 7,356 9,521
- --------------------------------------------------------------------------------------
$1,195,725 $ 865,800
======================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 192,401 $ 145,114
Accrued expenses and other current liabilities 128,800 108,079
Income taxes payable 31,988 33,590
- --------------------------------------------------------------------------------------
Total current liabilities 353,189 286,783
- --------------------------------------------------------------------------------------
Deferred rent and other liabilities 25,518 19,972
- --------------------------------------------------------------------------------------
Total liabilities 378,707 306,755
- --------------------------------------------------------------------------------------
Commitments and contingencies (notes 3, 6 and 8)
Shareholders' equity:
Preferred stock - $0.01 par value; authorized - 1,000
shares; no shares issued or outstanding -- --
Common stock - $0.01 par value; authorized -
350,000 shares; issued and outstanding -
March 3, 2001, 287,890 shares and
February 26, 2000, 280,812 shares 2,879 2,808
Additional paid - in capital 180,974 94,994
Retained earnings 633,165 461,243
- --------------------------------------------------------------------------------------
Total shareholders' equity 817,018 559,045
- --------------------------------------------------------------------------------------
$1,195,725 $ 865,800
======================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
<PAGE> 6
BED BATH & BEYOND ANNUAL REPORT 2000
12
CONSOLIDATED STATEMENTS OF EARNINGS
Bed Bath & Beyond Inc. and Subsidiaries
<TABLE>
<CAPTION>
Fiscal Year Ended
- ----------------------------------------------------------------------------------------------------------
March 3, February 26, February 27,
(in thousands, except per share data) 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $2,396,655 $1,857,505 $1,382,345
Cost of sales, including buying, occupancy and indirect costs 1,410,196 1,090,704 806,220
- ----------------------------------------------------------------------------------------------------------
Gross profit 986,459 766,801 576,125
Selling, general and administrative expenses 713,621 557,461 418,073
- ----------------------------------------------------------------------------------------------------------
Operating profit 272,838 209,340 158,052
Interest income 9,001 5,790 3,517
- ----------------------------------------------------------------------------------------------------------
Earnings before provision for income taxes 281,839 215,130 161,569
Provision for income taxes 109,917 83,901 64,223
- ----------------------------------------------------------------------------------------------------------
Net earnings $ 171,922 $ 131,229 $ 97,346
==========================================================================================================
Net earnings per share - Basic $ .61 $ .47 $ .35
Net earnings per share - Diluted $ .59 $ .46 $ .34
Weighted average shares outstanding - Basic 283,925 279,930 277,684
Weighted average shares outstanding - Diluted 292,876 288,234 286,472
</TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Bed Bath & Beyond Inc. and Subsidiaries
<TABLE>
<CAPTION>
Common Stock Additional
----------------------- Paid-in Retained
(in thousands) Shares Amount Capital Earnings Total
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at February 28, 1998 276,176 $ 2,762 $ 59,967 $ 232,668 $ 295,397
Net earnings 97,346 97,346
Shares sold under employee stock option plans 2,660 26 18,318 18,344
- -------------------------------------------------------------------------------------------------------------------------------
Balance at February 27, 1999 278,836 2,788 78,285 330,014 411,087
Net earnings 131,229 131,229
Shares sold under employee stock option plans 1,976 20 16,709 16,729
- -------------------------------------------------------------------------------------------------------------------------------
Balance at February 26, 2000 280,812 2,808 94,994 461,243 559,045
Net earnings 171,922 171,922
Shares sold under employee stock option plans 7,078 71 85,980 86,051
- -------------------------------------------------------------------------------------------------------------------------------
Balance at March 3, 2001 287,890 $ 2,879 $ 180,974 $ 633,165 $ 817,018
===============================================================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
<PAGE> 7
BED BATH & BEYOND ANNUAL REPORT 2000
13
CONSOLIDATED STATEMENTS OF CASH FLOWS
Bed Bath & Beyond Inc. and Subsidiaries
<TABLE>
<CAPTION>
Fiscal Year Ended
- -----------------------------------------------------------------------------------------------------------------------------------
March 3, February 26, February 27,
(in thousands) 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net earnings $ 171,922 $ 131,229 $ 97,346
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 46,650 31,625 23,217
Tax benefit from exercise of stock options 48,295 8,932 11,546
Deferred income taxes (3,939) (8,197) (5,166)
(Increase) decrease in assets:
Merchandise inventories (136,271) (110,096) (89,980)
Prepaid expenses and other current assets 2,627 (2,347) (2,223)
Other assets (1,124) 96 (1,276)
Increase (decrease) in liabilities:
Accounts payable 47,287 45,744 34,652
Accrued expenses and other current liabilities 20,721 18,354 16,115
Income taxes payable (1,602) 16,980 4,595
Deferred rent 3,370 3,616 3,766
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 197,936 135,936 92,592
- -----------------------------------------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities:
Capital expenditures (140,395) (90,098) (62,274)
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (140,395) (90,098) (62,274)
- -----------------------------------------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities:
Proceeds from exercise of stock options 37,756 7,797 6,798
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 37,756 7,797 6,798
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents 95,297 53,635 37,116
Cash and cash equivalents:
Beginning of period 144,031 90,396 53,280
- -----------------------------------------------------------------------------------------------------------------------------------
End of period $ 239,328 $ 144,031 $ 90,396
===================================================================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
<PAGE> 8
BED BATH & BEYOND ANNUAL REPORT 2000
14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
A. NATURE OF OPERATIONS
Bed Bath & Beyond Inc. (the "Company") is a nationwide chain of "superstores"
selling predominantly better quality domestics merchandise and home furnishings.
As the Company operates in the retail industry, its results of operations are
affected by general economic conditions and consumer spending habits.
B. PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of the
Company and its subsidiaries, all of which are wholly owned.
All significant intercompany balances and transactions have been eliminated in
consolidation.
C. FISCAL YEAR
The Company's fiscal year is comprised of the 52 or 53 week period ending on the
Saturday nearest February 28. Accordingly, fiscal 2000 represented 53 weeks and
ended on March 3, 2001; fiscal 1999 and fiscal 1998 represented 52 weeks and
ended on February 26, 2000 and February 27, 1999, respectively.
D. RECENT ACCOUNTING PRONOUNCEMENTS
In the fourth quarter of fiscal 2000, the Company adopted the provisions of the
Financial Accounting Standards Board's Emerging Issues Task Force ("EITF") Issue
No. 00-14, "Accounting for Certain Sales Incentives", which provides that the
value of point of sale coupons and rebates that result in a reduction of the
price paid by the customer be recorded as a reduction of sales, and that free
merchandise incentives be recorded as cost of sales. Prior to adoption, the
Company recorded its point of sale coupons and rebates in cost of sales. Upon
adoption, the Company has reclassified such sales incentives as a reduction of
sales in its consolidated statements of earnings for fiscal 2000, 1999 and 1998.
The reclassification had no impact on gross profit, operating profit or net
earnings.
In the fourth quarter of fiscal 2000, the Company also adopted the provisions of
EITF Issue No. 00-10, "Accounting for Shipping and Handling Fees and Costs",
which provides that amounts billed to a customer in a sale transaction related
to shipping and handling represent revenues. Prior to adoption, the Company
recorded such revenues and costs in selling, general and administrative expense.
Upon adoption, the Company has reclassified such shipping and handling fees to
sales and shipping and handling costs to cost of sales in its consolidated
statements of earnings for fiscal 2000, 1999 and 1998. The reclassification had
no impact on operating profit or net earnings.
As a result of these reclassifications, previously reported net sales decreased
by approximately $20.5 million and $14.9 million and cost of sales decreased by
approximately $20.4 million and $14.9 million in fiscal 1999 and fiscal 1998,
respectively.
E. EARNINGS PER SHARE
The Company presents earnings per share on a basic and diluted basis. Basic
earnings per share has been computed by dividing net earnings by the weighted
average number of shares outstanding. Diluted earnings per share has been
computed by dividing net earnings by the weighted average number of shares
outstanding including the dilutive effect of stock options.
F. STOCK-BASED COMPENSATION
As permitted under Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-Based Compensation", the Company has elected not to adopt
the fair value based method of accounting for its stock-based compensation
plans, but continues to apply the provisions of Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB No. 25"). The
Company has complied with the disclosure requirements of SFAS No. 123.
G. CASH AND CASH EQUIVALENTS
The Company considers all highly liquid instruments purchased with maturities of
three months or less to be cash equivalents.
H. MERCHANDISE INVENTORIES
Merchandise inventories are stated at the lower of cost or market, determined by
the retail inventory method of accounting.
<PAGE> 9
BED BATH & BEYOND ANNUAL REPORT 2000
15
I. PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is computed primarily
using the straight-line method over the estimated useful lives of the assets
(five to ten years for furniture, fixtures and equipment and three to five years
for computer equipment). Leasehold improvements are amortized using the
straight-line method over the lesser of their estimated useful life or the life
of the lease.
The cost of maintenance and repairs is charged to earnings as incurred;
significant renewals and betterments are capitalized. Maintenance and repairs
amounted to $28.4 million, $24.2 million and $17.3 million for fiscal 2000, 1999
and 1998, respectively.
J. DEFERRED RENT
The Company accounts for scheduled rent increases contained in its leases on a
straight-line basis over the noncancelable lease term. Deferred rent amounted to
$23.3 million and $20.0 million as of March 3, 2001 and February 26, 2000,
respectively.
K. SHAREHOLDERS' EQUITY
In July 2000 and June 1998, the Board of Directors approved two-for-one splits
of the Company's common stock effected in the form of 100% stock dividends. The
stock dividends were distributed on August 11, 2000 and July 31, 1998,
respectively, to shareholders of record on July 28, 2000 and July 10, 1998,
respectively.
Unless otherwise stated, all references to common shares outstanding and net
earnings per share are on a post-split basis.
L. REVENUE RECOGNITION
The Company recognizes revenue at the time of sale of merchandise to its
customers. Revenues from the sale of gift cards, gift certificates and store
credits are recognized when redeemed. A provision for merchandise returns is
provided in the period that the related sales are recorded.
M. PREOPENING EXPENSES
Expenses associated with new or expanded stores are charged to earnings as
incurred.
N. ADVERTISING COSTS
Expenses associated with store advertising are charged to earnings as incurred.
O. INCOME TAXES
The Company files a consolidated Federal income tax return. Separate state
income tax returns are filed with each state in which the Company conducts
business.
The Company accounts for its income taxes using the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to the differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the year in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in earnings in the period that includes the
enactment date.
P. FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments include cash and cash equivalents, accounts
payable and accrued expenses and other current liabilities. The book value of
cash and cash equivalents, accounts payable and accrued expenses and other
current liabilities are representative of their fair values due to the
short-term maturity of these instruments.
Q. IMPAIRMENT OF LONG-LIVED ASSETS
The Company periodically reviews long-lived assets for impairment by comparing
the carrying value of the assets with their estimated future undiscounted cash
flows. If it is determined that an impairment loss has occurred, the loss would
be recognized during that period. The impairment loss is calculated as the
difference between asset carrying values and the present value of the estimated
net cash flows. The Company does not believe that any material impairment
currently exists related to its long-lived assets.
R. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.
<PAGE> 10
BED BATH & BEYOND ANNUAL REPORT 2000
16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
2. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
<TABLE>
<CAPTION>
March 3, February 26,
(in thousands) 2001 2000
- -------------------------------------------------------------------------
<S> <C> <C>
Furniture, fixtures and equipment $ 219,243 $ 162,061
Leasehold improvements 168,370 114,549
Computer equipment 73,535 44,143
- -------------------------------------------------------------------------
461,148 320,753
Less: Accumulated depreciation
and amortization (158,492) (111,842)
- -------------------------------------------------------------------------
$ 302,656 $ 208,911
=========================================================================
</TABLE>
3. CREDIT AGREEMENT
Under the Company's revolving Credit Agreement (the "Credit Agreement")
concluded in November 1994, and as subsequently amended, the Company may borrow
up to $25.0 million for loans and letters of credit. The Credit Agreement
matures in October 2001. Interest on all borrowings is determined based upon
several alternative rates as stipulated in the Credit Agreement.
The Credit Agreement contains certain covenants which, among other things, place
limitations on payment of dividends, capital expenditures and certain expenses.
Additionally, there are restrictions on additional borrowings and a requirement
that the Company maintain certain financial ratios. The Company does not believe
that any of these covenants have materially affected its business. Under the
terms of these covenants, approximately $86.0 million was available for the
payment of dividends at March 3, 2001.
The Company did not borrow under the Credit Agreement during fiscal 2000 or
fiscal 1999. As of March 3, 2001 and February 26, 2000, there were approximately
$2.9 million and $5.3 million in outstanding letters of credit, respectively.
4. PROVISION FOR INCOME TAXES
The components of the provision for income taxes are as follows:
<TABLE>
<CAPTION>
Fiscal Years
- -----------------------------------------------------------------------
(in thousands) 2000 1999 1998
- -----------------------------------------------------------------------
<S> <C> <C> <C>
Current:
Federal $ 102,178 $ 82,652 $ 61,098
State and local 11,678 9,446 8,291
- -----------------------------------------------------------------------
113,856 92,098 69,389
- -----------------------------------------------------------------------
Deferred:
Federal (3,535) (7,356) (4,549)
State and local (404) (841) (617)
- -----------------------------------------------------------------------
(3,939) (8,197) (5,166)
- -----------------------------------------------------------------------
$ 109,917 $ 83,901 $ 64,223
=======================================================================
</TABLE>
Included in prepaid expenses and other current assets and in deferred rent and
other liabilities are deferred income taxes of $35.4 million and $2.2 million,
respectively, which reflect the net tax effects of temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. The significant components of the
Company's deferred tax assets and liabilities consist of the following:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
March 3, February 26,
(in thousands) 2001 2000
- ------------------------------------------------------------------------
<S> <C> <C>
Deferred Tax Assets:
Inventories $ 13,729 $ 11,332
Deferred rent 9,103 7,789
Other 21,684 14,678
Deferred Tax Liability:
Depreciation (11,279) (4,501)
- ------------------------------------------------------------------------
$ 33,237 $ 29,298
========================================================================
</TABLE>
For fiscal 2000 and fiscal 1999, the effective tax rate is comprised of the
Federal statutory income tax rate of 35.00% and the State income tax rate, net
of Federal benefit, of 4.00%. For fiscal 1998, the effective tax rate is
comprised of the Federal statutory income tax rate of 35.00% and the State
income tax rate, net of Federal benefit, of 4.75%.
<PAGE> 11
5. TRANSACTIONS AND BALANCES WITH RELATED PARTIES
A. The Company has an interest in certain life insurance policies on the lives
of its Co-Chairmen. The beneficiaries of these policies are related to the
aforementioned individuals. The Company's interest in these policies is
equivalent to the net premiums paid by the Company. At March 3, 2001 and
February 26, 2000, other assets include $4.5 million and $4.0 million,
respectively, representing the Company's interest in the life insurance
policies.
B. The Company obtains certain payroll services from a related party. The
Company paid fees for such services of $366,000, $557,000 and $424,000 for
fiscal 2000, 1999 and 1998, respectively.
C. The Company made charitable contributions to the Mitzi and Warren Eisenberg
Family Foundation, Inc. (the "Eisenberg Foundation") and the Feinstein Family
Foundation, Inc. (the "Feinstein Foundation") in the aggregate amounts of
$634,000, $488,000 and $390,000 for fiscal 2000, 1999 and 1998, respectively.
The Eisenberg Foundation and the Feinstein Foundation are each not-for-profit
corporations of which Messrs. Eisenberg and Feinstein, the Co-Chairmen of the
Company, and their family members are the trustees and officers.
6. LEASES
The Company leases retail stores, as well as warehouses, office facilities and
equipment, under agreements expiring at various dates through 2021. Certain
leases provide for contingent rents (which are based upon store sales exceeding
stipulated amounts and are immaterial in fiscal 2000, 1999 and 1998), scheduled
rent increases and renewal options generally ranging from five to fifteen years.
The Company is obligated under a majority of the leases to pay for taxes,
insurance and common area maintenance charges.
As of March 3, 2001, future minimum lease payments under noncancelable operating
leases are as follows:
<TABLE>
<CAPTION>
FISCAL YEAR (in thousands) AMOUNTS
- -------------------------------------------------------------------------
<S> <C>
2001 $165,057
2002 175,353
2003 173,125
2004 168,773
2005 165,042
Thereafter 1,031,840
- -------------------------------------------------------------------------
Total minimum lease payments $1,879,190
=========================================================================
</TABLE>
As of March 30, 2001, the Company had executed leases for 62 stores planned for
opening in fiscal 2001.
Expenses for all operating leases were $142.6 million, $113.3 million and $89.5
million for fiscal 2000, 1999 and 1998, respectively.
7. EMPLOYEE BENEFIT PLAN
The Company has a defined contribution 401(k) savings plan (the "Plan") covering
all eligible employees. Participants may defer between 1% and 15% of annual
pre-tax compensation subject to statutory limitations. The Company has an option
to contribute an amount as determined by the Board of Directors. In addition,
each participant may elect to make voluntary, non-tax deductible contributions
in excess of the pre-tax compensation limit up to 15% of compensation. As of
March 3, 2001, the Company has made no contributions to the Plan.
8. COMMITMENTS AND CONTINGENCIES
Under terms of employment agreements with its Co-Chairmen extending through June
2002, which terms are subject to further extension, the Company is required to
pay each a base salary (which may be increased by the Board of Directors) of
$750,000 per annum. The agreements also provide for other terms and conditions
of employment, including termination payments and pension benefits.
The Company is involved in various claims and legal actions arising in the
ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Company's consolidated financial position, results of operations or liquidity.
9. SUPPLEMENTAL CASH FLOW INFORMATION
The Company paid income taxes of $68.0 million, $67.2 million and $53.5 million
in fiscal 2000, 1999 and 1998, respectively.
10. STOCK OPTION PLANS
Options to purchase shares of the Company's common stock have been granted to
employees under various stock option plans. The Company may grant options to
purchase not more than an aggregate of 64.4 million shares of common stock,
subject to adjustment under certain circumstances.
<PAGE> 12
BED BATH & BEYOND ANNUAL REPORT 2000
18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Option grants have been at market value, non-qualified and generally exercisable
in five equal annual installments beginning one to three years after the date of
grant and expire ten years from the date of grant.
The following table summarizes stock option transactions:
<TABLE>
<CAPTION>
WEIGHTED-
NUMBER OF AVERAGE
SHARES EXERCISE PRICE
- ---------------------------------------------------------------------------
<S> <C> <C>
Outstanding at February 28, 1998 21,209,796 $ 4.81
Options granted 5,540,400 11.77
Options exercised (2,660,298) 2.55
Options canceled (617,360 6.10
----------
Outstanding at February 27, 1999 23,472,538 6.67
Options granted 5,533,900 15.49
Options exercised (1,975,374) 3.94
Options canceled (807,064) 9.67
----------
Outstanding at February 26, 2000 26,224,000 8.65
Options granted 6,149,700 12.73
Options exercised (7,078,153) 5.33
Options canceled (1,123,562) 12.02
----------
Outstanding at March 3, 2001 24,171,985 $10.51
Options exercisable:
At February 27, 1999 5,077,618 $ 3.84
At February 26, 2000 7,240,180 $ 4.81
At March 3, 2001 4,904,297 $ 7.12
===========================================================================
</TABLE>
The stock option committees determine the number of shares and the option price
per share for all options issued under the stock option plans.
The following tables summarize information pertaining to stock options
outstanding and exercisable at March 3, 2001:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING
- -----------------------------------------------------------------------
WEIGHTED-AVERAGE WEIGHTED-
RANGE OF NUMBER REMAINING AVERAGE
EXERCISE PRICES OUTSTANDING CONTRACTUAL LIFE EXERCISE PRICE
- -----------------------------------------------------------------------
<S> <C> <C> <C>
$ 1.06 to 6.12 4,295,046 4.35 $ 3.69
6.19 to 10.38 4,601,534 6.39 7.33
10.69 to 11.47 5,093,820 8.95 11.45
11.83 to 14.19 4,159,315 7.28 11.92
14.77 to 26.78 6,022,270 8.54 16.01
$ 1.06 to 26.78 24,171,985 7.26 $10.51
</TABLE>
<TABLE>
<CAPTION>
OPTIONS EXERCISABLE
- -----------------------------------------------------------------------
WEIGHTED-
RANGE OF NUMBER AVERAGE
EXERCISE PRICES EXERCISABLE EXERCISE PRICE
- -----------------------------------------------------------------------
<S> <C> <C>
$ 1.06 to 6.12 2,609,526 $ 3.40
6.19 to 10.38 832,974 7.27
10.69 to 11.47 73,300 11.15
11.83 to 14.19 554,555 12.03
14.77 to 26.78 833,942 14.98
---------
$ 1.06 to 26.78 4,904,297 $ 7.12
---------
</TABLE>
The Company applies APB No. 25 and related interpretations in accounting for its
stock option plans. Accordingly, no compensation cost has been recognized in
connection with the stock option plans. Set forth below are the Company's net
earnings and net earnings per share "as reported", and as if compensation cost
had been recognized in accordance with the fair value provisions of SFAS No.
123:
<TABLE>
<CAPTION>
FISCAL YEARS
- ---------------------------------------------------------------------------------
(in thousands, except per share data) 2000 1999 1998
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
NET EARNINGS:
As reported $ 171,922 $ 131,229 $ 97,346
Pro forma $ 154,540 $ 119,158 $ 89,519
NET EARNINGS PER SHARE:
Basic:
As reported $ 0.61 $ 0.47 $ 0.35
Pro forma $ 0.54 $ 0.43 $ 0.32
Diluted:
As reported $ 0.59 $ 0.46 $ 0.34
Pro forma $ 0.53 $ 0.41 $ 0.31
</TABLE>
The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following assumptions used for
grants for fiscal 2000, 1999 and 1998, respectively: dividend yield of 0% for
all years; expected volatility of 45%, 42% and 42%; risk free interest rates of
6.58%, 5.95% and 5.58%; and expected lives of seven years, seven years and six
years. The weighted-average fair value of options granted during the year is
$7.25, $8.34 and $6.06 for fiscal 2000, 1999 and 1998, respectively.
<PAGE> 13
BED BATH & BEYOND ANNUAL REPORT 2000
19
11. SUMMARY OF QUARTERLY RESULTS (UNAUDITED)
<TABLE>
<CAPTION>
(in thousands, except per share data) FISCAL 2000 QUARTER ENDED FISCAL 1999 QUARTER ENDED
- ------------------------------------------------------------------------------------------------------------------------------------
May 27, August 26, November 25, March 3, May 29, August 28, November 27, February 26,
2000 2000 2000 2001 1999 1999 1999 2000
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $459,163 $589,381 $602,004 $746,107 $356,633 $451,715 $480,145 $569,012
Gross profit 187,293 241,284 246,080 311,802 146,214 185,570 196,784 238,233
Operating profit 36,339 70,009 64,592 101,898 28,015 53,580 50,607 77,138
Earnings before provision
for income taxes 38,301 71,440 66,664 105,434 29,317 54,503 51,978 79,332
Provision for income taxes 14,937 27,862 25,999 41,119 11,434 21,256 20,271 30,940
Net earnings $ 23,364 $ 43,578 $ 40,665 $ 64,315 $ 17,883 $ 33,247 $ 31,707 $ 48,392
EPS - Basic (1) $ .09 $ .15 $ .14 $ .22 $ .07 $ .12 $ .11 $ .17
EPS - Diluted (1) $ .08 $ .15 $ .14 $ .22 $ .06 $ .12 $ .11 $ .17
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net earnings per share ("EPS") amounts for each quarter are required to be
computed independently and may not equal the amount computed for the total year.
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF BED BATH & BEYOND INC.:
We have audited the accompanying consolidated balance sheets of Bed Bath &
Beyond Inc. and subsidiaries as of March 3, 2001 and February 26, 2000, and the
related consolidated statements of earnings, shareholders' equity, and cash
flows for each of the fiscal years in the three-year period ended March 3, 2001.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Bed Bath & Beyond
Inc. and subsidiaries as of March 3, 2001 and February 26, 2000, and the results
of their operations and their cash flows for each of the fiscal years in the
three-year period ended March 3, 2001 in conformity with accounting principles
generally accepted in the United States of America.
New York, New York
March 30, 2001
<PAGE> 14
BED BATH & BEYOND ANNUAL REPORT 2000
20
DIRECTORS AND OFFICERS
- --------------------------------------------------------------------------------
DIRECTORS
WARREN EISENBERG
Co-Chairman and Co-Chief Executive Officer,
Bed Bath & Beyond Inc.
LEONARD FEINSTEIN
Co-Chairman and Co-Chief Executive Officer,
Bed Bath & Beyond Inc.
STEVEN H. TEMARES
President and Chief Operating Officer,
Bed Bath & Beyond Inc.
KLAUS EPPLER
Partner, Proskauer Rose LLP,
New York, New York
ROBERT S. KAPLAN
Managing Director, Goldman, Sachs & Co.,
New York, New York
ROBERT J. SWARTZ
Vice President, Alco Capital Group, Inc.,
New York, New York
- --------------------------------------------------------------------------------
OFFICERS
WARREN EISENBERG
Co-Chairman and Co-Chief Executive Officer
LEONARD FEINSTEIN
Co-Chairman and Co-Chief Executive Officer
STEVEN H. TEMARES
President and Chief Operating Officer
RONALD CURWIN
Chief Financial Officer and Treasurer
ARTHUR STARK
Chief Merchandising Officer and Senior Vice President
MATTHEW FIORILLI
Senior Vice President - Stores
EUGENE A. CASTAGNA
Vice President - Finance
MICHAEL HONEYMAN
Vice President - Corporate Administration and Operations
RICHARD C. MCMAHON
Vice President and Chief Information Officer
ALLAN N. RAUCH
Vice President - Legal and General Counsel
G. WILLIAM WALTZINGER, JR.
Vice President - E-Service
JIM BRENDLE
Vice President - Construction and Store Development
P. TIMOTHY BREWSTER
Vice President - Stores - N.Y.C. Region
MICHAEL J. CALLAHAN
Vice President - Corporate Counsel
MARTIN EISENBERG
Vice President - Stores - Northeast Region
ALAN JACOBSON
Vice President - Stores - Western Region
LEIF TODD JOHNSON
Vice President - General Merchandising
EDWARD KOPIL
Vice President - Stores - Southern Region
PHILLIP KORNBLUH
Vice President - Visual Merchandising
RITA LITTLE
Vice President - Marketing
MARTIN LYNCH
Vice President - Merchandise Operations
STEPHEN J. MURRAY
Vice President - Information Technology
WILLIAM ONKSEN
Vice President - Stores - MidAtlantic and Midwest Regions
CHRISTINE R. PIROG
Vice President - Store Operations
CONCETTA VAN DYKE
Vice President - Human Resources
<PAGE> 15
CORPORATE AND SHAREHOLDER INFORMATION
CORPORATE OFFICE
650 Liberty Avenue
Union, New Jersey 07083
Telephone: 908/688-0888
BUYING OFFICE
110 Bi-County Boulevard, Suite 114
Farmingdale, New York 11735
Telephone: 631/420-7050
SHAREHOLDER INFORMATION
A copy of the Company's 2000 Annual Report as filed with
the Securities and Exchange Commission may be obtained from the Investor
Relations Department at the Corporate Office. Fax: 908/810-8813
STOCK LISTING
NASDAQ National Market
Trading symbol BBBY.
TRANSFER AGENT
The Transfer Agent should be contacted on questions of change of address, name
or ownership, lost certificates and consolidation of accounts.
American Stock Transfer
& Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
Telephone: 800/937-5449
STOCK ACTIVITY
The following table sets forth by fiscal quarter the high and low reported sales
prices of the Company's Common Stock on the NASDAQ National Market during fiscal
2000 and fiscal 1999:
<TABLE>
<CAPTION>
Quarter High Low
- ----------------------------------------------
<S> <C> <C>
Fiscal 2000
First $ 21.81 $ 11.38
Second 20.19 16.38
Third 26.44 17.44
Fourth 27.06 20.17
Fiscal 1999
First $ 19.69 $ 14.56
Second 19.47 12.75
Third 18.50 13.69
Fourth 18.00 11.22
</TABLE>
At March 30, 2001, there were approximately 650 shareholders of record. This
number excludes individual shareholders holding stock under nominee security
position listings.
INDEPENDENT AUDITORS
KPMG LLP
345 Park Avenue
New York, New York 10154
ANNUAL MEETING
The Annual Meeting of Shareholders will be held at 9:00 a.m. Thursday, June 28,
2001, at the Headquarters Plaza Hotel, Three Headquarters Plaza, Morristown, New
Jersey.
WEBSITE
www.bedbathandbeyond.com
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>5
<FILENAME>y49742ex21.txt
<DESCRIPTION>SUBSIDIARIES
<TEXT>
<PAGE> 1
Exhibit 21
SUBSIDIARIES OF BED BATH & BEYOND INC.
The following are all of the subsidiaries of Bed Bath & Beyond Inc. other than:
(i) 100% owned subsidiaries of Bed `n Bath Stores, Inc., which subsidiaries hold
no assets other than a single store lease and, in some cases, fully depreciated
fixed assets; and (ii) subsidiaries which in the aggregate would not constitute
a significant subsidiary.
<TABLE>
<CAPTION>
NAME STATE
- ---- -----
<S> <C>
BBBL, Inc. Delaware
BBBY Management Corp. New Jersey
Bed `n Bath Stores, Inc. New Jersey
Bed Bath & Beyond of California Limited Liability Company Delaware
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>6
<FILENAME>y49742ex23.txt
<DESCRIPTION>INDEPENDENT AUDITORS' CONSENT
<TEXT>
<PAGE> 1
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Shareholders
Bed Bath & Beyond Inc.:
We consent to incorporation by reference in the registration statements (No.
33-63902, 33-87602, 333-18011 and 333-75883) on Forms S-8 of Bed Bath & Beyond
Inc. of our reports dated March 30, 2001, relating to the consolidated balance
sheets of Bed Bath & Beyond Inc. and subsidiaries as of March 3, 2001 and
February 26, 2000, and the related consolidated statements of earnings,
shareholders' equity and cash flows for each of the fiscal years in the
three-year period ended March 3, 2001 and the related schedule, which reports
appear or are incorporated by reference in the March 3, 2001 annual report on
Form 10-K of Bed Bath & Beyond Inc.
/S/ KPMG LLP
New York, New York
May 31, 2001
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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