Petco Health + Wellness Company, Inc. Reports Strong Fourth Quarter and Full-Year 2020 Results, Issues 2021 Guidance | 2021-03-18 | Press Releases

SAN DIEGO , March 18, 2021 /PRNewswire/ — Petco Health and Wellness Company, Inc. (NASDAQ: WOOF), a whole companion in pet well being and wellness, right now launched its monetary outcomes for fourth quarter and fiscal 2020 ended January 30 , 2021.

The firm delivered fourth quarter comparable gross sales development of 17 % and web income development of 16 %, marking the ninth consecutive quarter of development for Petco. A $17.5 million loss on the extinguishment of debt associated to the corporate’s preliminary public providing contributed to a web lack of $6.2 million or $0.03 per share, an enchancment of 14 % and 17 %, respectively. Adjusted Net Income 1 elevated 103 % from prior yr to $37.0 million or $0.17 per share, whereas fourth quarter Adjusted EBITDA 1 elevated 13 % to $148.6 million from prior yr.

Fiscal yr 2020 income elevated 11 % from prior yr to $4.9 billion . A web lack of $26.5 million or $0.13 per share improved 72 % and 73 %, respectively, and was additionally inclusive of a $17.5 million loss on the extinguishment of debt associated to the corporate’s preliminary public providing. That 11 % development translated to a 14 % enchancment in Adjusted EBITDA 1 to $484.3 million , in addition to a $68.0 million enchancment in Adjusted Net Income 1 to $58.1 million or $0.28 per share, reflecting the energy of Petco’s multi-channel pet care ecosystem.

“On the heels of a profitable IPO in January, we closed the yr with a robust fourth quarter, and that momentum has carried into 2021,” stated Ron Coughlin , Chairman and Chief Executive Officer of Petco. “Our complete petcare ecosystem targeted on well being and wellness, coupled with our digitally-led, multichannel expertise is resonating with pet dad and mom and producing important aggressive benefits which might be evident in our efficiency. Our class continues to develop powered by the thousands and thousands of incremental new pets in households, which is creating an annuity for years to return. Whether it’s eliminating merchandise with synthetic components 3 , quickly increasing vet clinics, coaching, grooming or customer-first success choices like same-day supply, we’re increasing the methods we maintain beloved pets and stepping as much as meet elevated demand making Petco nicely positioned for long-term development.”

In addition, Petco diminished complete debt by 49 % to $1.7 billion and Net Debt 1 by 50 % to $1.5 billion utilizing the proceeds from the corporate’s preliminary public providing, the recapitalization of a portion of debt excellent on the time of the preliminary public providing and Free Cash Flow 1 era. Net Debt 1 discount and Adjusted EBITDA 1 enchancment led to a lower of 4.2x in Petco’s Net Debt 1 to Adjusted EBITDA 1 ratio to three.2x. On March 4 th , Petco introduced the profitable completion of the corporate’s debt refinancing transaction which prolonged the maturity dates of the corporate’s time period mortgage to 2028 and revolving credit score facility to 2026.

Fiscal This autumn 2020 Highlights:

Comparisons are fourth quarter of 2020 ended January 30, 2021 versus fourth quarter of 2019 ended February 1, 2020 until in any other case famous

Net gross sales elevated 16 % to $1.3 billion pushed by comp gross sales development of 17 %
Net lack of $6.2 million or $0.03 per share was inclusive of a $17.5 million loss on the extinguishment of debt associated to the corporate’s preliminary public providing
Adjusted Net Income 1 elevated $18.7 million to $37.0 million or $0.17 per share
Adjusted EBITDA 1 elevated 13 % to $148.6 million

Fiscal Year 2020 Highlights:

Comparisons are fiscal yr of 2020 ended January 30, 2021 versus fiscal yr of 2019 ended February 1, 2020 until in any other case famous

Net gross sales elevated 11 % to $4.9 billion pushed by comp gross sales development of 11 %
Net lack of $26.5 million or $0.13 per share inclusive of a $17.5 million loss on the extinguishment of debt associated to the corporate’s preliminary public providing
Adjusted Net Income 1 elevated $68.0 million to $58.1 million or $0.28 per share
Adjusted EBITDA 1 elevated 14 % to $484.3 million
Net money offered by working actions elevated $158.3 million to $268.6 million
Free Cash Flow 1 elevated $155.6 million to $109.1 million
Total debt decreased $1.6 billion to $1.7 billion pushed by the proceeds generated within the firm’s preliminary public providing, associated recapitalization and Free Cash Flow era
Net Debt 1 decreased $1.6 billion to $1.5 billion
Net Debt 1 / Adjusted EBITDA 1 improved 57 % to three.2x
Liquidity of $499.0 million inclusive of $111.4 million of money and money equivalents and $387.6 million of availability on revolving credit score facility.
Ended 2020 with 1,454 Pet Care Centers, 125 Full Service Vet Hospitals inside Pet Care Centers, and 96 Pet Care Centers in Mexico

Fiscal 2021 Guidance:

The following steering as of March 18, 2021 displays the corporate’s expectations for fiscal yr 2021 until in any other case indicated.

Metric	Guidance
Revenue	$5.25 billion – $5.35 billion
Adjusted EBITDA 2	$520 million – $530 million
Adjusted EPS 2	$0.63 – $0.66

Assumptions within the steering embrace that financial situations, foreign money charges and the tax and regulatory panorama stay typically constant. The firm continues to watch these assumptions and any potential monetary impacts. Adjusted EPS steering assumes roughly $90 million of curiosity expense, a 26% tax charge and 266 million weighted common diluted share depend.

(1)	Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, Free Cash Flow, and Net Debt are non-GAAP monetary measures. See “Non-GAAP Financial Measures” for extra data on Non-GAAP monetary measures and a reconciliation to essentially the most comparable GAAP measures.

(2)	We haven’t reconciled Adjusted EBITDA and Adjusted EPS outlook, that are non-GAAP measures to essentially the most comparable GAAP measures as a result of it’s not doable to take action with out unreasonable efforts because of the uncertainty and potential variability of reconciling gadgets, that are depending on future occasions and typically exterior of administration’s management and which might be important. Because such gadgets can’t be moderately predicted with the extent of precision required, we’re unable to outlook for the comparable GAAP measures. Forward–trying estimates of Adjusted EBITDA and Adjusted EPS are estimated in a way in keeping with the related definitions and assumptions famous herein.

(3)	See how Petco defines synthetic components at petco.com/nutritionstandards.

Earnings Conference Call Webcast Information:

The firm will host an earnings convention name on March 18, 2021 at 8:30 AM Eastern Time to debate Petco’s monetary outcomes. The convention name will likely be accessible by way of stay webcast. Interested traders and different people can entry the webcast, earnings press launch, and earnings presentation through the corporate’s investor relations web page ( https://ir.petco.com/investor-relations ). A replay of the webcast will likely be archived on the corporate’s web site by way of April 1, 2021 at 5:00 PM Eastern Time .

About Petco:

Petco is a category-defining well being and wellness firm targeted on bettering the lives of pets, pet dad and mom and our personal Petco companions. Since our founding in 1965, we have been trailblazing new requirements in pet care, delivering complete wellness options by way of our merchandise and providers, and creating communities that deepen the pet-pet guardian bond. We function greater than 1,500 Petco areas throughout the U.S., Mexico , and Puerto Rico , together with a rising community of greater than 100 in-store veterinary hospitals, and provide a whole on-line useful resource for pet well being and wellness at petco.com and on the Petco app. In tandem with The Petco Foundation, an unbiased nonprofit group, we work with and assist hundreds of native animal welfare teams throughout the nation and, by way of in-store adoption occasions, we have helped discover properties for greater than 6.5 million animals.

Forward Looking Statements

This earnings launch accommodates “forward-looking statements” inside the which means of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding expectations, beliefs plans, targets, objectives, methods, future occasions or efficiency and underlying assumptions and different statements that aren’t statements of historic truth. Although the corporate believes that the expectations and assumptions mirrored in these statements are affordable, there might be no assurance that these expectations will show to be right. There might be no assurance that any forward-looking outcomes will happen or be realized, and nothing contained on this earnings launch is, or needs to be relied upon as, a promise or illustration or guarantee as to any future matter, together with any matter in respect of the operations or enterprise or monetary situation of Petco. Such forward-looking statements might be recognized by way of forward-looking phrases corresponding to “believes,” “expects,” “could,” “intends,” “will,” “shall,” “ought to,” “anticipates,” “alternative,” “illustrative”, or the unfavorable thereof or different variations thereon or comparable terminology. All forward-looking statements are primarily based on assumptions or judgments about future occasions that will or is probably not right or essentially happen and which might be by their nature topic to important uncertainties and contingencies, a lot of that are exterior the management of Petco. Forward-looking statements are topic to a variety of dangers, uncertainties and different components that would trigger precise outcomes to vary materially from the potential outcomes mentioned within the forward-looking statements, together with, with out limitation, these recognized on this earnings launch, the chance components that the corporate identifies in its Securities and Exchange Commission filings, in addition to the next: (i) elevated competitors (together with from multi-channel retailers and e-Commerce suppliers); (ii) diminished shopper demand for our merchandise and/or providers; (iii) our reliance on key distributors; (iv) our capacity to draw and retain certified workers; (v) dangers arising from statutory, regulatory and/or authorized developments; (vi) macroeconomic pressures within the markets through which we function; (vii) failure to successfully handle our prices; (viii) our reliance on our data expertise methods; (ix) our capacity to forestall or successfully reply to a privateness or safety breach; (x) our capacity to successfully handle strategic ventures, alliances or acquisitions; (xi) financial or regulatory developments that may have an effect on our capacity to supply engaging promotional financing; (xii) interruptions and different provide chain points; (xiii) catastrophic occasions, well being crises, and pandemics, together with the potential results that the continued COVID-19 pandemic and/or corresponding macroeconomic uncertainty may have on our monetary place, outcomes of operations and money flows; (xiv) our capacity to take care of optimistic model notion and recognition; (xv) product security and high quality considerations; (xvi) adjustments to labor or employment legal guidelines or laws; (xvii) our capacity to successfully handle our actual property portfolio; (xviii) constraints within the capital markets or our vendor credit score phrases; and (xix) adjustments in our credit score rankings. The prevalence of any such components, occasions, or circumstances would considerably alter the outcomes set forth in these statements.

Petco cautions that the foregoing checklist of necessary components will not be full, and any forward-looking statements communicate solely as of the date they’re made. Petco undertakes no responsibility to replace publicly any forward-looking assertion that it might make, whether or not on account of new data, future occasions or in any other case, besides as could also be required by relevant regulation, regulation or different competent authorized authority.

PETCO HEALTH AND WELLNESS COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(In thousands and thousands, besides per share quantities)
(Unaudited and topic to reclassification)

		13 Weeks Ended					52 Weeks Ended
	January 30, 2021		February 1, 2020		Percent Change	January 30, 2021		February 1, 2020		Percent Change
Net Sales	$	1,337.7	$	1,148.7	16%	$	4,920.2	$	4,434.5	11%
Cost of products bought		768.4		650.8	18%		2,813.5		2,528.0	11%
Gross revenue		569.3		497.9	14%		2,106.7		1,906.5	11%
Selling, basic and administrative bills		502.3		437.8	15%		1,912.3		1,776.9	8%
Goodwill and indefinite-lived intangible impairment		–		19.0	NA		–		19.0	NA
Operating revenue		67.0		41.1	63%		194.4		110.6	76%
Interest expense, web		49.7		60.7	(18%)		218.4		252.7	(14%)
Loss on extinguishment of debt		17.5		–	NA		17.5		–	NA
Loss earlier than revenue from fairness technique investees		(0.2)		(19.5)	(99%)		(41.6)		(142.1)	(71%)
Income tax expense/(profit)		10.2		(7.4)	NA		(3.3)		(35.7)	(91%)
Income from fairness technique investees		(3.5)		(2.1)	67%		(6.5)		(2.4)	166%
Net loss		(6.9)		(10.0)	(31%)		(31.7)		(104.0)	(69%)
Net Loss Attributable to Noncontrolling Interest		(0.8)		(2.8)	(74%)		(5.3)		(8.1)	(35%)
Net Loss Attributable to Class A and B-1 frequent shareholders	$	(6.2)	$	(7.2)	(14%)	$	(26.5)	$	(95.9)	(72%)

Net Loss Per Class A and B-1 Common Share:
Basic earnings per share	$	(0.03)	$	(0.03)	(17%)	$	(0.13)	$	(0.46)	(73%)
Diluted earnings per share	$	(0.03)	$	(0.03)	(17%)	$	(0.13)	$	(0.46)	(73%)

Weighted-Average Common Shares Outstanding:
Basic		215.7		209.0	3%		210.7		208.9	1%
Diluted		215.7		209.0	3%		210.7		208.9	1%

PETCO HEALTH AND WELLNESS COMPANY, INC.
CONSOLIDATED BALANCE SHEET
(In Thousands)
(Unaudited and topic to reclassification)

	January 30,		February 1,
	2021		2020
ASSETS
Current belongings:
Cash and money equivalents	$	111,402	$	148,785
Receivables, much less allowance for credit score losses 1		41,827		31,516
Merchandise inventories, web		538,675		478,968
Prepaid bills		40,032		24,854
Other present belongings		45,613		26,882
Total present belongings		777,549		711,005
Fixed belongings, web		627,547		656,256
Operating lease right-of-use belongings		1,328,108		1,459,604
Goodwill		2,179,310		2,179,310
Trade title		1,025,000		1,025,000
Other intangible belongings, web		714		1,553
Other long-term belongings		137,474		122,390
Total belongings	$	6,075,702	$	6,155,118
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and guide overdrafts	$	339,485	$	293,203
Accrued salaries and worker advantages		129,484		93,685
Accrued bills and different liabilities		145,846		148,181
Current portion of working lease liabilities		258,289		278,229
Current portion of long-term debt and different lease liabilities		2,203		28,643
Total present liabilities		875,307		841,941
Senior secured credit score amenities, web, excluding present portion		1,646,281		2,362,302
Senior notes, web		–		866,145
Operating lease liabilities, excluding present portion		1,083,575		1,156,742
Deferred taxes, web		280,920		265,276
Other long-term liabilities		134,354		101,651
Total liabilities		4,020,437		5,594,057

Stockholders’ fairness / members’ fairness:
Members’ curiosity		–		1,358,130
Class A typical inventory 2		226		–
Class B-1 frequent inventory 3		38		–
Class B-2 frequent inventory 4		–		–
Preferred inventory 5		–		–
Additional paid-in-capital		2,092,110		–
Accumulated deficit		(22,251)		(780,466)
Accumulated different complete loss		(1,275)		(8,273)
Total stockholders’ fairness / members’ fairness		2,068,848		569,391
Noncontrolling curiosity		(13,583)		(8,330)
Total fairness		2,055,265		561,061
Total liabilities and fairness	$	6,075,702	$	6,155,118

(1)	Allowances for credit score losses are $3,267 for fiscal yr finish January 30, 2021 and $1,982 for fiscal yr finish February 1, 2020, respectively
(2)	Class A typical inventory, par worth $0.001 per share (1,000,000,000 shares licensed and 226,424,140 shares issued and excellent as of January 30, 2021)
(3)	Class B-1 frequent inventory, par worth $0.001 per share (75,000,000 shares licensed and 37,790,781 shares issued and excellent as of January 30, 2021)
(4)	Class B-2 frequent inventory, par worth $0.000001 per share (75,000,000 shares licensed and 37,790,781 shares issued and excellent as of January 30, 2021)
(5)	Preferred inventory, par worth $0.001 per share (25,000,000 shares licensed and no shares issued or excellent as of January 30, 2021)

PETCO HEALTH AND WELLNESS COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands)
(Unaudited and topic to reclassification)

	January 30,		February 1,
	2021		2020
Cash flows from working actions:
Net loss	$	(31,736)	$	(103,984)
Adjustments to reconcile web loss to web money offered by working actions:
Depreciation and amortization		174,836		173,544
Amortization of debt reductions and issuance prices		24,237		23,455
Provision for deferred taxes		25,548		(45,087)
Equity-based compensation		12,915		9,489
Impairments, write-offs and losses on sale of mounted and different belongings		15,606		11,871
Loss on extinguishment of debt		17,549		–
(Income) loss from fairness technique investees		(6,482)		(2,441)
Amounts reclassified out of collected different complete revenue		10,793		2,806
Change in contingent consideration obligation		(398)		883
Goodwill and indefinite-lived intangible impairment		–		19,000
Non-cash working lease prices		430,359		441,981
Changes in belongings and liabilities:
Receivables		(10,311)		(3,845)
Merchandise inventories		(60,635)		(8,193)
Prepaid bills and different belongings		(13,842)		(5,223)
Accounts payable and guide overdrafts		46,303		15,928
Accrued salaries and worker advantages		34,295		(1,395)
Accrued bills and different liabilities		(28,289)		(3,043)
Operating lease liabilities		(399,557)		(408,562)
Other long-term liabilities		27,424		(6,847)
Net money offered by working actions		268,615		110,337
Cash flows from investing actions:
Cash paid for mounted belongings		(159,560)		(156,906)
Cash paid for intangible belongings		–		(450)
Insurance recoveries		–		489
Cash paid for different acquisitions, web of money acquired		–		(2,813)
Cash from consolidation of three way partnership		–		1,205
Cash paid for investments		(1,000)		(585)
Proceeds from sale of funding		73		–
Proceeds from sale of belongings		3,302		–
Proceeds from sale-leasebacks, web		–		18,549
Proceeds from partial give up of officers’ life insurance coverage		–		1,470
Net money utilized in investing actions		(157,185)		(139,041)
Cash flows from financing actions:
Borrowings beneath long-term debt agreements		476,000		1,297,000
Repayments of long-term debt		(1,554,890)		(1,293,250)
Debt prepayment, issuance and refinancing prices		–		(58)
Payments for finance and capital lease liabilities		(3,404)		(3,447)
Partial settlement of member be aware		–		(809)
Cash obtained from noncontrolling curiosity		–		243
Proceeds from preliminary public providing, web of issuance prices		936,041		–
Repurchase of fairness		(105)		–
Payment of contingent consideration		(250)		(2,750)
Net money utilized in financing actions		(146,608)		(3,071)

Net (lower) enhance in money, money equivalents and restricted money		(35,178)		(31,775)
Cash, money equivalents and restricted money at starting of yr		154,718		186,493
Cash, money equivalents and restricted money at finish of yr	$	119,540	$	154,718

Non-GAAP Financial Measures

The following data gives definitions and reconciliations of the non-GAAP monetary measures introduced on this earnings launch to essentially the most immediately comparable monetary measures calculated and introduced in accordance with typically accepted accounting rules (GAAP). The firm has offered this non-GAAP monetary data, which isn’t calculated or introduced in accordance with GAAP, as data supplemental and along with the monetary measures introduced within the earnings launch which might be calculated and introduced in accordance with GAAP. Such non-GAAP monetary measures shouldn’t be thought-about superior to, as an alternative choice to or different to, and needs to be thought-about together with, the GAAP monetary measures introduced within the earnings launch. The non-GAAP monetary measures within the earnings launch could differ from similarly-titled measures utilized by different firms.

Adjusted EBITDA

Adjusted EBITDA is taken into account a non-GAAP monetary measure beneath the SEC’s guidelines as a result of it excludes sure fees included in web (loss) revenue calculated in accordance with GAAP. Management believes that Adjusted EBITDA is a significant measure to share with traders as a result of it greatest permits comparability with that of the present interval efficiency with that of the comparable interval. In addition, Adjusted EBITDA affords traders a view of what administration considers Petco’s working efficiency to be and the flexibility to make a extra knowledgeable evaluation of such working efficiency as in contrast with that of the prior interval.

Please see the corporate’s Registration Statement on Form filed on January 6, 2021 , as amended, for extra data on the reconciliation of Net Loss Attributable to Class A and B-1 Common Stockholders to Adjusted EBITDA. The desk under displays the calculation of Adjusted EBITDA for the 13 weeks and fiscal yr ended January 30, 2021 in comparison with prior yr ended February 1, 2020 .

(In Thousands)	13 Weeks Ended		52 Weeks Ended
Reconciliation of Net Loss Attributable to Class A and B-1 Common Stockholders to Adjusted EBITDA	January 30, 2021	February 1, 2020	January 30, 2021	February 1, 2020
Net loss attributable to Class A and B-1 frequent stockholders	$ (6,159)	$ (7,171)	$ (26,483)	$ (95,873)
Add (deduct):
Interest expense, web	49,666	60,662	218,430	252,683
Income tax expense (profit)	10,200	(7,395)	(3,337)	(35,658)
Depreciation and amortization	45,875	43,944	174,836	173,544
Income from fairness technique investees	(3,530)	(2,115)	(6,482)	(2,441)
Loss on debt extinguishment	17,549	–	17,549	–
Goodwill & indefinite-lived intangible impairment	–	19,000	–	19,000
Asset impairments and write offs	7,955	2,615	15,606	11,871
Equity-based compensation	5,451	2,487	12,915	9,489
Mexico Joint Venture EBITDA 1	6,655	4,787	19,074	14,227
Store pre-opening bills	2,218	2,280	9,228	10,325
Store closing bills	1,835	2,540	7,782	4,068
Severance	1,524	1,602	5,283	10,164
Non-cash occupancy-related prices 2	2,151	6,757	19,240	32,763
Non-recurring prices 3	7,209	1,926	20,707	20,385
Adjusted EBITDA	$ 148,599	$ 131,919	$ 484,348	$ 424,547
Net gross sales	$1,337,713	$1,148,656	$4,920,202	$4,434,514
Net margin 4	(0.5%)	(0.6%)	(0.5%)	(2.2%)
Adjusted EBITDA Margin 4	11.1%	11.5%	9.8%	9.6%

Adjusted Net Income and Adjusted EPS

Adjusted Net Income and Adjusted diluted earnings per share attributable to Petco (Adjusted Net Income and Adjusted EPS respectively) are thought-about non-GAAP monetary measures beneath the SEC’s guidelines as a result of they exclude sure quantities included within the web loss attributable to frequent stockholders and diluted earnings per share attributable to Petco calculated in accordance with GAAP (web loss and EPS respectively), essentially the most immediately comparable monetary measures calculated in accordance with GAAP. Management believes that Adjusted Net Income and Adjusted EPS are significant measures to share with traders as a result of they greatest permit comparability of the present interval efficiency with that of the comparable interval. In addition, Adjusted Net Income and Adjusted EPS afford traders a view of what administration considers Petco’s earnings efficiency to be and the flexibility to make a extra knowledgeable evaluation of such earnings efficiency with that of the prior interval.

The tables under mirror the calculation of Adjusted Net Income and Adjusted EPS for the 13 weeks and fiscal yr ended January 30, 2021 in comparison with prior yr ended February 1, 2020 .

(In Thousands, besides per share quantities)	13 Weeks Ended
Reconciliation of GAAP Diluted Loss per Share to Non-GAAP Diluted EPS	January 30, 2021		February 1, 2020
	Amount	Per share	Amount	Per share
GAAP web loss attributable to frequent stockholders / diluted loss per share	$ (6,159)	$ (0.03)	$ (7,171)	$ (0.03)
Add (deduct):
Income tax expense (profit)	10,200	0.05	(7,395)	(0.04)
Loss on debt extinguishment	17,549	0.08	–	–
Goodwill & indefinite-lived intangible impairment	–	–	19,000	0.09
Asset impairments and write offs	7,955	0.03	2,615	0.01
Equity-based compensation	5,451	0.03	2,487	0.01
Store pre-opening bills	2,218	0.01	2,280	0.01
Store closing bills	1,835	0.01	2,540	0.01
Severance	1,524	0.01	1,602	0.01
Non-cash occupancy-related prices	2,151	0.01	6,757	0.04
Non-recurring prices	7,209	0.03	1,926	0.01
Non-GAAP adjusted pre-tax revenue (loss) / diluted earnings (loss) per share	$ 49,933	$ 0.23	$ 24,641	$ 0.12
Income tax expense (profit) at 26% normalized tax charge	12,983	0.06	6,407	0.03
Non-GAAP Adjusted Net Income (Loss) / Adjusted EPS	$ 36,950	$ 0.17	$ 18,234	$ 0.09


(In Thousands, besides per share quantities)	52 Weeks Ended
Reconciliation of GAAP Diluted Loss per Share to Non-GAAP Diluted EPS	January 30, 2021		February 1, 2020
	Amount	Per share	Amount	Per share
GAAP web loss attributable to frequent stockholders / diluted loss per share	$ (26,483)	$ (0.13)	$ (95,873)	$ (0.46)
Add (deduct):
Income tax expense (profit)	(3,337)	(0.02)	(35,658)	(0.17)
Loss on debt extinguishment	17,549	0.08	–	–
Goodwill & indefinite-lived intangible impairment	–	–	19,000	0.09
Asset impairments and write offs	15,606	0.07	11,871	0.06
Equity-based compensation	12,915	0.06	9,489	0.04
Store pre-opening bills	9,228	0.05	10,325	0.05
Store closing bills	7,782	0.04	4,068	0.02
Severance	5,283	0.03	10,164	0.05
Non-cash occupancy-related prices	19,240	0.09	32,763	0.16
Non-recurring prices	20,707	0.10	20,385	0.10
Non-GAAP adjusted pre-tax revenue (loss) / diluted earnings (loss) per share	$ 78,490	$ 0.37	$ (13,466)	$ (0.06)
Income tax expense (profit) at 26% normalized tax charge	20,407	0.09	(3,501)	(0.01)
Non-GAAP Adjusted Net Income (Loss) / Adjusted EPS	$ 58,083	$ 0.28	$ (9,965)	$ (0.05)

Free Cash Flow

Free Cash Flow is a non-GAAP monetary measure that’s calculated as web money generated by operations much less money paid for mounted belongings. Management believes that Free Cash Flow, which measures the flexibility to generate extra money from enterprise operations, is a crucial monetary measure to be used in evaluating the corporate’s monetary efficiency.

Although different firms report their Free Cash Flow quite a few strategies exist for calculating an organization’s Free Cash Flow. As a outcome, the tactic utilized by Petco’s administration to calculate Free Cash Flow could differ from the strategies utilized by different firms to calculate their Free Cash Flow.

The following desk units forth a reconciliation of Free Cash Flow to web money offered by working actions, which Petco believes to be the GAAP monetary measure most immediately corresponding to Free Cash Flow. The desk under displays the calculation of Free Cash Flow for the 13 weeks and fiscal yr ended January 30, 2021 in comparison with prior yr ended February 1, 2020 .

(In Thousands)	13 Weeks Ended		52 Weeks Ended
	January 30, 2021	February 1, 2020	January 30, 2021	February 1, 2020
Net money offered by working actions	$ 67,135	$ 144,585	$ 268,615	$ 110,337
Cash paid for mounted belongings	(63,271)	(37,706)	(159,560)	(156,906)
Free money stream	$ 3,864	$ 106,879	$ 109,055	$ (46,569)

Net Debt

Net Debt is a non-GAAP monetary measure that’s calculated because the sum of present and non-current debt, much less money and money equivalents. Management considers this adjustment helpful as a result of it reduces the volatility of complete debt attributable to fluctuations between money paid in opposition to the corporate’s revolving credit score facility and money held available in money and money equivalents.

Although different firms report their Net Debt, quite a few strategies exist for calculating an organization’s Net Debt. As a outcome, the tactic utilized by Petco’s administration to calculate Net Debt could differ from the strategies utilized by different firms to calculate their Net Debt.

The following desk units forth a reconciliation of Net Debt, to complete debt, which Petco believes to be the GAAP monetary measure most immediately corresponding to Net Debt. The desk under displays the calculation of Net Debt as of the interval ended January 30, 2021 in comparison with prior yr ended February 1, 2020 .

(In Thousands)	January 30,		February 1,
(In Thousands)	2021		2020
Total Debt:
Senior secured credit score amenities, web, together with present portion	$	1,646,281	$	2,387,552
Senior notes, web		–		866,145
Finance leases		13,639		16,434
Total debt		1,659,920		3,270,131
Less money and money equivalents		(111,402)		(148,785)
Net Debt	$	1,548,518	$	3,121,346
Adjusted EBITDA	$	484,348	$	424,547
Net debt / adjusted EBITDA ratio		3.2x		7.4x


(1)	Mexico Joint Venture EBITDA represents 50% of the entity’s working outcomes for all years, as Adjusted to mirror the outcomes on a foundation corresponding to Adjusted EBITDA. In the monetary statements, this three way partnership is accounted for as an fairness technique funding, and reported web of depreciation and revenue taxes. Because such a presentation wouldn’t mirror the changes made within the calculation of Adjusted EBITDA, we embrace the 50% curiosity within the firm’s Mexico Joint Venture on an Adjusted EBITDA foundation to make sure consistency. The desk under presents a reconciliation of Mexico Joint Venture web revenue to Mexico Joint Venture EBITDA.


(In Thousands)	13 Weeks Ended				52 Weeks Ended
	January 30,		February 1,		January 30,		February 1,
	2021		2020		2021		2020
Net Income	$	7,060	$	4,102	$	14,225	$	8,662
Depreciation		3,478		3,276		12,249		11,298
Income tax expense		1,702		882		6,229		4,107
Foreign foreign money acquire (loss)		(163)		(324)		704		(406)
Interest expense (revenue), web		1,232		1,638		4,740		4,793
EBITDA	$	13,309	$	9,574	$	38,147	$	28,454
50% of EBITDA	$	6,655	$	4,787	$	19,074	$	14,227

(2)	Non-cash occupancy-related prices embrace the distinction between money and straight-line lease for all intervals. Beginning in Fiscal 2019, in reference to the adoption of the lease accounting commonplace, favorable lease rights of $125.2 million and unfavorable lease rights of $30.8 million had been reclassified from intangible belongings and different long-term liabilities, respectively, to right-of-use lease belongings and the associated amortization is now included in non-cash occupancy prices. In addition to the reclassification, the amortization interval of those lease proper belongings has decreased to align with the phrases of the underlying right-of-use lease belongings, thus leading to an acceleration of expense in comparison with prior years. The total adoption of the lease accounting commonplace didn’t have an effect on Adjusted EBITDA, as this enhance in addback was fully offset in different impacted traces corresponding to decrease depreciation and amortization, asset impairments and write-offs, and retailer closing bills.
(3)	Non-recurring prices embrace: unrealized honest market worth changes on non-operating investments; class motion settlements and associated authorized charges; one-time consulting and different prices related to the corporate’s strategic transformation initiatives; discontinuation and liquidation prices; and prices associated to the corporate’s preliminary public providing. While we have now incurred important prices related to the COVID-19 pandemic throughout fiscal 2020, we have now not labeled any of those prices as non-recurring because of the uncertainty surrounding the pandemic’s size and long-term influence on the macroeconomic working atmosphere.
(4)	We outline web margin as web loss divided by web gross sales and Adjusted EBITDA margin as Adjusted EBITDA divided by web gross sales.