UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report: October 28, 1999
WILD OATS MARKETS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-21577 84-1100630
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification Number)
3375 Mitchell Lane
Boulder, Colorado 80301
(Address of principal executive offices, including zip code)
(303) 440-5220
(Registrant's telephone number, including area code)
<PAGE>
TABLE OF CONTENTS
Page
Item 5. Other Events. 1
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. 1
SIGNATURES 1
<PAGE>
Item 5. Other Events
The Registrant issued the press release attached as Exhibit 99.1 to this Current
Report on Form 8-K on October 28, 1999.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Exhibit 99.1 Press Release of the Registrant Dated October 28, 1999.
SIGNATURES
Pursuant to the requirements 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, on the 28th day of October, 1999.
Wild Oats Markets, Inc.
By /s/ Mary Beth Lewis
Mary Beth Lewis
Executive Officer and Chief Financial Officer
(Principal Financial and Accounting Officer)
Exhibit 99.1
FOR IMMEDIATE RELEASE Thursday, October 28, 1999
WILD OATS MARKETS, INC. REPORTS
THIRD QUARTER OPERATING RESULTS;
PENDING MERGER AND ACQUISITION OF 13 NATURAL FOODS MARKETS; AND
3-FOR-2 STOCK SPLIT
The Company will host a conference call to discuss this press release on Friday,
October 29, 1999 at 10:00 a.m. MDT. To participate, call (212) 346-6412,
reservation #13110749. A recorded version of the call will also be available
through 5:00 p.m. MDT on Monday, November 1, 1999 by calling (800) 633-8284 or
619-812-6440 and referencing the reservation # above.
BOULDER, CO - Wild Oats Markets, Inc. ("Wild Oats" or the "Company") today
reported operating results for its third fiscal quarter ended October 2, 1999.
The operating results for the third quarter and the nine months then ended
reflect the results of the Company's pooling-of-interests merger on September
27, 1999 with Henry's Marketplace, Inc., which owned 11 natural foods
supermarkets, for all periods presented. The Company also announced that it has
signed agreements, subject to certain conditions to closing, for a merger with
nine natural foods supermarkets and an acquisition of four natural foods
supermarkets; additionally, the Company announced the approval by its board of
directors of a 3-for-2 stock split.
Sales for the third quarter of 1999 were $172.8 million, an increase of 47% over
sales of $117.7 million for the same period in 1998. Sales for the nine months
were $478.2 million, an increase of 37% over sales of $348.0 million for the
same period in 1998. The sales increases reflect the opening or relocation of 10
stores and the acquisition of 13 stores in the first nine months of 1999.
Comparable store sales increased 4% for the third quarter, based on new,
relocated and acquired stores that have been operating longer than 12 months.
Net income for the third quarter of 1999, exclusive of non-recurring charges,
increased 12% to $4.4 million from $3.9 million in the same period in 1998, and
diluted earnings per share for the third quarter of 1999, exclusive of
non-recurring charges, increased 7% to $0.29 from $0.27 per share in the same
period in 1998. Net income for the nine months, exclusive of non-recurring
charges, increased 33% to $15.3 million from $11.5 million in the same period in
1998, and diluted earnings per share for the nine months, exclusive of
non-recurring charges, increased 31% to $1.02 from $0.78 in the same period in
1998.
During the third quarter of 1999, Wild Oats completed a pooling-of-interests
merger with Henry's Marketplace, a chain of 11 natural foods supermarkets in San
Diego, California. The combined entity had sales of approximately $57.8 million
and net income, exclusive of merger expenses, of approximately $1.6 million for
the first thirty days subsequent to the merger.
Wild Oats has signed an agreement to acquire through a merger the operations of
Sun Harvest Farms, Inc. which operates nine natural foods markets in San
Antonio, Austin, Corpus Christi, El Paso, and McAllen, Texas in a
stock-for-stock exchange valued at approximately $21.5 million. The number of
shares issued by Wild Oats in this transaction will be based on the average
price of the Company's common stock in the 10 trading days preceding closing,
subject to a pricing collar between $34.125 and $44.125. The transaction is
expected to close on December 15, 1999, is subject to certain conditions to
closing, and is intended to qualify as a pooling of interests for financial
accounting purposes.
Wild Oats has signed an agreement, subject to certain conditions to closing, to
acquire the assets of four natural foods supermarkets operating under the name
"Wild Harvest" in the greater Boston, Massachusetts market in exchange for $12.5
million in cash. The transaction is expected to close in the fourth quarter of
1999 and will be accounted for using the purchase method.
Sun Harvest and Wild Harvest combined are expected to generate approximately
$100 million in revenues in 2000. The Company expects this merger and this
acquisition together to be slightly dilutive to earnings in 1999 and slightly
accretive to earnings in 2000.
The Company has recently located sites for new stores in San Diego, California,
Omaha, Nebraska, and Kansas City, Missouri. Wild Oats currently has 23 sites (17
new stores and six relocations) for which the Company has signed letters of
intent or leases with projected opening dates as follows:
<PAGE>
Projected Projected
Site Name Opening Date Site Name Opening Date
- - --------------------------------------- ---------------------------------
1. Tulsa, OK Opened Q4 99 11. Portland, OR 2000
2. Nashville, TN Q4 99 12. Reno, NV 2000
3. Bend, OR 2000 13. St. Louis, MO (2 sites) 2000
4. Cincinnati, OH 2000 14. Salt Lake City, UT 2000*
5. Cleveland, OH (2 sites) 2000 15. San Diego, CA (2 sites) 2000
6. Kansas City, KS 2000 16. South Florida (2 sites) 2000*
7. Kansas City, MO 2000* 17. Southern California 2000
8. Las Vegas, NV 2000* 18. West Hartford, CT 2000
9. Long Beach, CA 2000 19. Westport, CT 2000*
10. Omaha, NE 2000
* Relocation
Wild Oats also announced a 3-for-2 stock split of its common stock. The split
will be effected in the form of a stock dividend of one additional share of
common stock for every two shares outstanding, payable December 1, 1999, to
holders of record on November 17, 1999.
Wild Oats Markets, Inc. is the second largest natural foods supermarket chain in
North America. The Company currently owns and operates 92 stores in 21 states
and British Columbia. The Company's shares are traded on the NASDAQ National
Market System under the symbol "OATS". For additional information, please
contact Mary Beth Lewis, Chief Financial Officer, at (303) 440-5220.
Except for the historical information contained herein, this news release
contains forward-looking statements related to the effect of future
acquisitions. Actual results may differ from the results implied by such
forward-looking statements due to risks and uncertainties, including, but not
limited to the availability and integration of acquisitions, the timing and
execution of new store openings, the impact of competition, changes in product
supply, changes in management information needs, changes in customer needs and
expectations, governmental and regulatory actions, and general industry or
business trends or events, as well as the other risks detailed from time to time
in the Company's SEC filings, including the registration statement on Form S-3
filed September 29, 1999 as amended, Form 8-K filed September 29, 1999, Form
10-Q for the fiscal quarter ended July 3, 1999, and the Annual Report on Form
10-K for the fiscal year ended January 2, 1999.
<PAGE>
<TABLE>
<CAPTION>
Wild Oats Markets, Inc.
Consolidated Statement of Operations
(In thousands, except per-share amounts)
(Unaudited)
- - ------------------------------------------------------------------------------------------------------------------------------------
Thirteen Weeks Ended Thirty-Nine Weeks Ended
------------------------------------------- ---------------------------------------------
October 2, September 26, October 2, September 26,
1999 1998 1999 1998
------------------- -------------------- --------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales $ 172,829 100.0% $ 117,673 100.0% $ 478,163 100.0% $ 347,981 100.0%
Cost of goods sold and
occupancy costs 119,209 69.0% 81,793 69.5% 331,378 69.3% 241,795 69.5%
----------- ----------- ------------ -----------
Gross profit 53,620 31.0% 35,880 30.5% 146,785 30.7% 106,186 30.5%
Direct store expenses 36,921 21.4% 24,070 20.5% 101,522 21.2% 72,358 20.8%
----------- ----------- ------------ -----------
Store contribution 16,699 9.7% 11,810 10.0% 45,263 9.5% 33,828 9.7%
Selling, general and
administrative expenses 6,090 3.5% 4,757 4.0% 17,276 3.6% 14,072 4.0%
Pre-opening expenses 646 0.4% 802 0.7% 2,246 0.5% 1,783 0.5%
Amortization of goodwill 818 0.5% 335 0.3% 1,824 0.4% 957 0.3%
Non-recurring charges 645 0.4% 11,539 2.4% 393 0.1%
----------- ----------- ------------ -----------
Income from operations 8,500 4.9% 5,916 5.0% 12,378 2.6% 16,623 4.8%
Interest expense (income), net 1,619 0.9% 10 0.0% 2,450 0.5% (214) -0.1%
----------- ----------- ------------ -----------
Income before income taxes 6,881 4.0% 5,906 5.0% 9,928 2.1% 16,837 4.8%
Income tax expense 2,594 1.5% 1,965 1.7% 2,892 0.6% 5,413 1.6%
----------- ----------- ------------ -----------
Income before cumulative effect of
change in accounting principle 4,287 2.5% 3,941 3.3% 7,036 1.5% 11,424 3.3%
Cumulative effect of change in
accounting principle, net of taxes 281 0.1%
----------- ----------- ------------ -----------
Net income $ 4,287 2.5% $ 3,941 3.3% $ 6,755 1.4% $ 11,424 3.3%
=========== =========== ============ ===========
Basic net income per common share $ 0.29 $ 0.27 $ 0.46 $ 0.80
=========== =========== ============ ===========
Weighted average number of
common shares outstanding 14,663 14,434 14,580 14,337
=========== =========== ============ ===========
Diluted net income per common share $ 0.28 $ 0.27 $ 0.45 $ 0.77
=========== =========== ============ ===========
Weighted average number of
common shares outstanding 15,151 14,824 14,976 14,821
=========== =========== ============ ===========
Excluding non-recurring charges and
effect of change in accounting
principle:
Diluted net income per common share $ 0.29 $ 1.02 $ 0.78
=========== ============ ===========
Weighted average number of
common shares outstanding 15,151 14,976 14,821
=========== ============ ===========
</TABLE>
