RULE 424(b)(3)
REGISTRATION NUMBER 333-31292
WILD OATS [GRAPHIC LOGO OMITTED]
COMMUNITY MARKET(R)
PROSPECTUS
888,903 SHARES
WILD OATS MARKETS, INC.
COMMON STOCK
All of the 888,903 shares of our common stock are being sold by selling
stockholders. We will not receive any proceeds from the sale of shares by the
selling stockholders.
The sale of the shares may occur from time to time:
o in transactions on the Nasdaq National Market,
o in privately negotiated transactions, or
o in combination of various methods of sale.
The sales of the shares may occur from time to time:
o at fixed prices that may be changed,
o at market prices prevailing at the time of sale,
o at prices related to such prevailing prices, or
o at negotiated prices.
The selling stockholders may sell the shares to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the selling stockholders and/or the
purchasers of the shares for whom such broker-dealers may act as agents or to
whom they may sell as principals or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).
We have agreed, among other things, to bear certain expenses (other
than fees and expenses of counsel and underwriting discounts and commissions and
brokerage commissions and fees) in connection with the registration and sale of
the shares being offered by the selling stockholders. We have agreed to
indemnify the selling stockholders and certain other persons against certain
liabilities, including liabilities under the federal securities laws.
Our common stock is quoted on the Nasdaq National Market under the
symbol "OATS." The last reported sales price of our common stock on the Nasdaq
National Market on February 25, 2000 was $15.94 per share.
INVESTING IN OUR COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 5.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is March 14, 2000
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TABLE OF CONTENTS
PAGE
Prospectus Summary ...........................................................1
Risk Factors .................................................................5
Use of Proceeds ..............................................................9
Selling Stockholders ........................................................10
Plan of Distribution ........................................................10
Legal Matters ...............................................................11
Experts .....................................................................11
Where You Can Find More Information .........................................12
Incorporation of Certain Information We File with the SEC ...................12
In this prospectus, "Wild Oats," "we," "us," and "our" each refer to Wild Oats
Markets, Inc.
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PROSPECTUS SUMMARY
THIS SUMMARY HIGHLIGHTS INFORMATION APPEARING ELSEWHERE IN THIS
PROSPECTUS OR INCORPORATED BY REFERENCE. THIS SUMMARY MAY NOT CONTAIN ALL THE
INFORMATION THAT YOU SHOULD CONSIDER BEFORE PURCHASING OUR COMMON STOCK. YOU
SHOULD CAREFULLY READ THIS ENTIRE PROSPECTUS AND THE OTHER DOCUMENTS TO WHICH
THIS PROSPECTUS REFERS. THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT
INVOLVE RISKS AND UNCERTAINTIES.
PLEASE NOTE THAT, UNLESS OTHERWISE STATED:
o ALL REFERENCES IN THIS PROSPECTUS TO A PARTICULAR FISCAL YEAR
REFER TO OUR 52- OR 53-WEEK FISCAL YEAR, WHICH ENDS ON THE
SATURDAY NEAREST TO DECEMBER 31 OF EACH YEAR
o ALL INFORMATION IN THIS PROSPECTUS REFLECTS TWO 3-FOR-2 STOCK
SPLITS OF OUR COMMON STOCK, THE FIRST PAID ON JANUARY 7, 1998 TO
HOLDERS OF RECORD ON DECEMBER 22, 1997 AND THE SECOND PAID ON
DECEMBER 1, 1999 TO HOLDERS OF RECORD ON NOVEMBER 17, 1999
THE COMPANY
Wild Oats is the largest natural foods supermarket chain in North
America based on number of stores operated. We currently operate 111 stores
(including four small vitamin stores) in 22 states and Canada. We are dedicated
to providing a broad selection of high quality natural and gourmet foods and
related products at competitive prices in an inviting and educational store
environment emphasizing customer service. Our stores range in size from 2,700 to
45,000 gross square feet and feature natural alternatives for virtually every
product category found in conventional supermarkets. We provide our customers
with a one-stop, full-service shopping alternative to both conventional
supermarkets and traditional health food stores.
Wild Oats emphasizes unique products not typically found in
conventional supermarkets and tailors its product mix to meet the preferences of
each store's local market. In addition, we introduced our "A Wild Oats Down to
Earth Value" private label line that offers high quality, all-natural items in
many product categories at prices competitive with those of similar brand-name
items. Our strict quality standards require our products to be minimally
processed, not tested on animals, and free of preservatives, artificial colors
and chemical additives.
Each of our stores strives to create a fun, friendly and educational
store environment that makes grocery shopping enjoyable, encouraging shoppers to
spend more time in our stores and to purchase new products. We train our store
staff to educate customers as to the benefits and quality of our products, and
we prominently feature instructional brochures, newsletters and an in-store
information department. In addition, many of our stores offer cafe seating
areas, espresso and fresh juice bars and in-store nutritional consultations and
massage therapists, all of which emphasize the comfortable and relaxed nature of
the Wild Oats shopping experience. We also seek to engender customer loyalty by
demonstrating our high degree of commitment to the local community through
ongoing programs which provide significant monetary and in-kind contributions to
local not-for-profit organizations.
From 1994 to 1998, retail sales of natural products grew from $7.6
billion to $19.0 billion, for a compound annual growth rate of 25.7%, and total
sales of natural products (including over the internet, by practitioners, by
multi-level marketers and through mail order) reached $25.4 billion in 1998.
Sales growth in the traditional supermarket industry remained relatively flat
over the same period. We believe that this growth reflects a broadening of the
natural products consumer base that is being propelled by several factors,
including healthier eating patterns, increasing concern regarding food purity
and safety, greater environmental awareness and increasing consumer demand for
fresh, premium quality foods. Further, according to industry data, the natural
products industry comprises less than 2.5% of the total supermarket industry,
demonstrating significant potential for continued expansion of our customer
base.
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Since acquiring our first natural foods store in 1987, we have pursued
an aggressive growth strategy. We have grown our annual gross sales in large
part through acquiring independent and small chain natural foods stores and
through opening new stores. The table below sets forth certain of our annual
growth statistics. The information about our total number of stores is net of
closures and relocations. Discussions regarding the number of our stores and
historic financial information contained in this prospectus have been restated
to account for two stock-for-stock transactions accounted for as poolings of
interests, both consummated in 1999.
<TABLE>
<CAPTION>
Total Number of Total Number of Number of Stores Number of Stores
Stores at End of States at End of Acquired During Opened During Annual Gross Sales
Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year (in millions)
----------- ----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
1996 57 8 14 9 $299.6
1997 70 12 9 5 432
1998 82 18 7 9 531
1999 110 22 17 8 721.1
2000 (through
February 28, 2000) 111 22 0 3 N/A
</TABLE>
Our sales grew at a compound annual growth rate of 34% from 1996 to
1999. Our sales for 1999 were $721.1 million, compared to $531 million in 1998,
an increase of 36%, largely due to the opening of eight new stores, the
relocation of five stores and the acquisition of 17 stores, including:
o Nature's Fresh Northwest which owned seven operating natural foods
stores and one site in development in metropolitan Portland,
Oregon. Nature's had sales of approximately $58.3 million in 1998.
The purchase price was approximately $40.0 million in cash and
assumption by us of a $17.0 million promissory note payable to the
seller. This acquisition was accounted for using the purchase
method and the excess of cost over the fair value of the assets
acquired and liabilities assumed of $32.1 million was allocated to
goodwill, which is being amortized on a straight-line basis over
40 years.
o Four natural foods supermarkets operating under the name "Wild
Harvest," located in the greater Boston, Massachusetts area, in
exchange for $12.5 million in cash. The transaction was accounted
for using the purchase method and the excess of cost over the fair
market value of the assets acquired of $782,000 was allocated to
good will, which is being amortized on a straight-line basis of 40
years..
We also consummated two stock-for-stock transactions accounted for as
poolings of interests, which added 20 natural food grocery stores and four small
vitamin stores to our historic store base, with the following entities:
o Henry's Marketplace, Inc. which owned 11 operating natural foods
stores and one site in development in metropolitan San Diego,
California. Henry's Marketplace, Inc. had sales of approximately
$81.0 million in 1998. The merger consideration was 2,100,290
shares of our common stock. This transaction was accounted for as
a pooling of interests.
o Sun Harvest Farms, Inc. which owned nine operating natural food
stores in San Antonio, Austin and other Texas communities and,
through an affiliated entity also included in such transaction,
four vitamin stores. Sun Harvest Farms, Inc. had sales of
approximately $50.8 million in 1998. The merger consideration was
888,903 shares of our common stock. The transaction was accounted
for as a pooling of interests.
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2
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The following table presents our earnings per share for the periods
stated, adjusted for the stock-for-stock transaction with the shareholders of
Henry's Marketplace, Inc., accounted for as a pooling of interests, adjusted for
the 3-for-2 stock split of the common stock paid on December 1, 1999, to holders
of record on November 17, 1999, and, in addition, adjusted for the
stock-for-stock transaction with the shareholders of Sun Harvest Farms, Inc.,
and its affiliate, accounted for as a pooling of interests.
HISTORICAL AND SUPPLEMENTAL COMBINED EARNINGS PER SHARE
<TABLE>
<CAPTION>
Fiscal Year Nine-Months Ended
---------------------------- ----------------------------
September 26, October 2,
1996 1997 1998 1998 1999
---------------------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Historical Earnings per Share (1)
Basic $ (0.61) $ 0.79 $ 1.08 $ 0.80 $ 0.46
Diluted (0.61) 0.76 1.05 0.77 0.45
Adjusted Earnings per Share (2)
Basic $ (0.41) $ 0.53 $ 0.72 $ 0.53 $ 0.31
Diluted (0.41) 0.51 0.70 0.51 0.30
Supplemental Earnings per Share (3)
Basic $ (0.32) $ 0.55 $ 0.73 $ 0.55 $ 0.36
Diluted (0.32) 0.53 0.71 0.54 0.35
</TABLE>
(1) Reflects the September 27, 1999, pooling of interests transaction with
Henry's Marketplace, Inc.
(2) Reflects the 3-for-2 stock split of the common stock paid on December 1,
1999, to holders of record on November 17, 1999.
(3) Reflects the December 15, 1999, pooling of interests transaction with Sun
Harvest Farms, Inc.
As a result of our aggressive growth, we have increased our penetration
of existing markets, entered new geographic markets and created a stronger
platform for future growth. Since the beginning of 1997, we have successfully
entered a number of new states, including Arizona, Arkansas, Connecticut,
Illinois, Indiana, Massachusetts, New Jersey, New York, Ohio, Oregon, Tennessee,
Texas, and Washington. We believe our growth has resulted in operating
efficiencies created by:
o warehousing, distribution and administrative economies of scale
o improved volume purchasing discounts
o coordinated merchandising and marketing strategies
Wild Oats plans to open, acquire or relocate as many as 17 stores in
the remainder of 2000. We intend to continue our national expansion strategy by
increasing penetration in existing markets and expanding into new regions that
we believe are currently underserved by natural foods retailers. We believe our
flexible store format strategy, which includes large supermarket format stores
and medium-sized urban format stores, and our store clustering strategy enable
us to increase market penetration, reach a broader customer base and operate
successfully in a diverse set of markets. In addition, we periodically evaluate
new store formats that may appeal to different types of consumers in various
parts of the country.
Our executive offices are located at 3375 Mitchell Lane, Boulder,
Colorado 80301, and our telephone number is (303) 440-5220.
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3
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RISK FACTORS
We operate in a highly competitive industry. The following are among
the risks which could adversely affect our future financial performance:
o our ability to manage growth
o our strategy of clustering stores
o fluctuations in our financial results that could cause our stock
price to fluctuate
o comparable store sales trend fluctuations
o increased competition in the sale of natural foods products
o loss of key personnel
o disruptions of product supply
These and other risks associated with our business and the purchase of
our common stock are discussed under the heading "Risk Factors" beginning on
page 5.
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4
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RISK FACTORS
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. IN ADDITION TO OTHER
INFORMATION CONTAINED IN THIS PROSPECTUS OR INCORPORATED HEREIN BY REFERENCE,
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS
BEFORE PURCHASING ANY OF THE COMMON STOCK OFFERED HEREBY.
OUR ABILITY TO MANAGE GROWTH IS CRITICAL TO EXECUTING OUR GROWTH STRATEGY
SUCCESSFULLY
We have grown considerably in size and geographic scope since 1992. In
1999, and to date in 2000, we have acquired 17 stores, added 24 stores to our
historic store base though two pooling of interests transactions, and opened 11
new stores (including one store opened in 1999 by Henry's Marketplace, Inc.). We
plan to continue growing rapidly primarily through the opening of new stores.
Therefore, our success depends, in part, on our ability to open and operate new
stores profitably. Our ability to continue to successfully implement our growth
strategy in this manner depends on many factors, including our ability to:
o hire and train new personnel, including administrative and
accounting personnel, departmental, regional and store managers,
store employees and other personnel in our corporate organization
o expand into areas of the country where we have no operating
experience
o identify areas of the country that meet our criteria for new store
sites
o locate suitable store sites and negotiate acceptable lease terms
o obtain governmental and other third party consents, permits and
licenses needed to operate new stores
o integrate new stores into our existing operations
o expand our existing systems or acquire and implement new systems,
including information systems, hardware and software, and
distribution infrastructure, to include new relocated and acquired
stores
o obtain adequate funding for operations
In addition, we will continue to consider acquisitions of natural foods
retailers where attractive opportunities exist. Acquisitions of operating stores
involve risks which could have a negative effect on our business, financial
results and profitability, such as:
o short-term declines in our reported operating results
o diversion of management's attention
o unanticipated problems or legal liabilities
o inclusion of incompatible operations, particularly management
information systems
o inexperience in operating different store formats
Although we believe that we have the management, operational and
information systems, distribution infrastructure and other resources required to
implement our growth strategy, we may not be able to execute our new store
expansion plans within the expected time frame. Our continued growth may place a
significant strain on our management, our ability to distribute products to our
stores, working capital, and financial and management control systems. In order
for us to manage our expanding store base successfully, our management will be
required to anticipate the changing demands of our growing operations and to
adapt systems and procedures accordingly. If we are not able to do so, our
business, sales and overall profitability will be materially and negatively
affected.
OUR STRATEGY OF CLUSTERING STORES MAY RESULT IN DECLINES IN OPERATING RESULTS
As part of our growth strategy, we strive to locate stores in clusters
in select regional markets to increase overall sales, reduce operating costs and
increase customer awareness. In the past, when we have opened a store in a
market where we have an existing store, our sales and operating results have
declined at some existing stores in such markets. We intend to continue to
cluster stores and expect the sales and trends in operating results for other
stores in such clustered markets to continue to experience temporary declines as
a result.
5
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OUR FINANCIAL RESULTS MAY FLUCTUATE SIGNIFICANTLY WHICH COULD CAUSE THE PRICE OF
OUR SHARES TO FLUCTUATE
Our profitability may fluctuate significantly from period to period as
the result of a variety of factors, including:
o the number, timing, mix and cost of store openings, acquisitions,
relocations or closings
o the ratio of stores opened to stores acquired
o the opening of stores by us or by our competitors in markets where
we have existing stores
o percentage changes in comparable store sales results, i.e, same
store sales from year to year
We incur significant pre-opening expenses and new stores typically
experience an initial period of operating losses. As a result, the opening of a
significant number of new stores in a single period will negatively affect our
profitability.
OUR PAST COMPARABLE STORE SALES MAY NOT BE INDICATIVE OF FUTURE COMPARABLE STORE
SALES
A variety of factors affect our comparable store sales results,
including, among others:
o the opening of stores by us or by our competitors in markets where
we have existing stores
o the relative proportion of new stores to mature stores
o store remodels
o the timing of promotional events
o our ability to follow our operating plans effectively
o changes in consumer preferences for natural foods products
o general economic conditions
Past increases in comparable store sales may not reflect future
performance. Comparable store sales for any particular period may decrease in
the future. Due to the factors listed above, we believe that period-to-period
comparisons of our operating results are not necessarily meaningful and that
such comparisons cannot be relied upon as indicators of future financial
performance. Fluctuations in our comparable store sales could cause the price of
our common stock to fluctuate substantially.
INCREASED COMPETITION IN THE SALE OF NATURAL FOODS PRODUCTS COULD REDUCE OUR
PROFITABILITY
Our competitors currently include other independent and multi-unit
natural foods supermarkets, smaller traditional natural foods stores,
conventional supermarkets and specialty grocery stores. We believe that our
primary competitor is Whole Foods Market, Inc., a national natural foods
supermarket chain based in Texas, which, as of February 15, 2000, had 107 stores
and had annual sales of approximately $1.6 billion in its 1999 fiscal year. A
number of other natural foods supermarkets offer a range of natural foods
products similar to those we offer. While some competitors do not offer as full
a range of products as we do, they do compete with us in some product
categories.
Many of our competitors have been in business longer and have greater
financial or marketing resources than we do. Our competitors also may be able to
devote more funds and employees to securing suitable locations for new stores
and to the sourcing, promotion and sale of their products. In addition, should
any of our competitors reduce prices, we may be required to reduce prices to
remain competitive, which could result in lower sales and profitability. As we
open stores in new geographic markets, our success will depend in part on our
ability to gain market share from established competitors. Traditional and
specialty grocery stores are expanding the amount of natural foods they carry
and market, and therefore they now compete directly with us for products,
customers and locations. We expect competition from both new and existing
competitors to increase in our markets and we may not be able to compete
effectively in the future, which could adversely affect our profitability.
6
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LOSS OF KEY PERSONNEL COULD DISRUPT OUR OPERATIONS
We believe that our continued success will depend to a significant
extent upon the leadership and performance of:
o Michael C. Gilliland, our co-founder and Chief Executive Officer
o James Lee, our President and Chief Operating Officer
o Mary Beth Lewis, our Chief Financial Officer
The loss of the services of these individuals or other of our key
personnel could have a substantial negative effect upon our operations. Also, in
the current economy in the United States, it is more difficult to find, hire and
retain qualified managerial employees. Any inability to recruit qualified
employees could disrupt our operations.
DISRUPTIONS OF PRODUCT SUPPLY COULD REDUCE STORE SALES AND PROFITABILITY AND
DISRUPT OUR OPERATIONS
Our business is dependent on our ability to buy products on a timely
basis and at competitive prices from a small number of distributors and from a
large number of relatively small vendors. Based on our previous purchasing
patterns, we anticipate that we will continue to purchase approximately
one-third of the products sold in our stores through one wholesale distributor,
United Natural Foods, Inc. We have approximately three years remaining on a
four-year supply agreement with this major distributor and we do not have
contracts with any other major supplier. In 1999, this distributor announced
problems in the consolidation of its eastern U.S. warehouse operations which
resulted in minor disruptions in the supply of products to certain of our
eastern stores. We cannot assure that future disruptions in the operations of
this distributor will not have a material effect on our operations or
profitability. We may not be able to negotiate future supply agreements with
this or other distributors on terms favorable to us. In addition, any other
vendor or distributor could stop selling to us at any time. Any disruption in
our product supplies could reduce store sales and our profitability. In
addition, even where we have access to alternative sources of supply, the
failure of a vendor or distributor to meet our demands may temporarily disrupt
store-level merchandise selection, resulting in reduced sales.
GOVERNMENT REGULATION COULD INCREASE OUR COSTS
We are subject to many laws, regulations and ordinances at the local,
state and national level and problems or failures to comply with these laws
could negatively affect our store sales and operations, or could delay the
opening of a new store. Such laws regulate our operations, including:
o health and sanitation standards
o food labeling and handling requirements
o employment and wage levels
o food and alcoholic beverage sales regulations
From time to time, various local, state and national government
agencies propose laws on issues affecting our operations that could reduce our
profitability by increasing our costs or affecting sales of certain products.
Examples of such issues are:
o the minimum wage payable to employees
o the minimum age restriction for certain jobs
o tax increases on the retail sale of certain products
Food safety concerns may also generate new laws that could increase the
cost to prepare foods sold in our stores or make the sale of some items
unprofitable. Product recalls or additional government regulation may also erode
customer confidence in the safety of our products, resulting in reduced sales.
Over 15% of our total sales come from the sale of vitamins, supplements and
herbal products. There have been many proposals for new laws on a national level
to restrict sales of certain supplement products or to regulate information
available to consumers regarding these products. If new laws are passed that
limit our ability to offer information on the products we sell or limit the
availability of the products to the general public, our sales could decrease.
7
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FLUCTUATIONS IN OUR STOCK PRICE MAY BE VOLATILE
The market price of our common stock can change rapidly in response to
our operating results and other factors, including announcements by our
competitors. In addition, the stock market in recent years has experienced
extreme price and volume fluctuations that often have been unrelated or
disproportionate to the operating performance of companies. In addition to
fluctuations in the price of our common stock caused by stock market
fluctuations, the market price of our common stock may fluctuate due to:
o a shortfall in sales, comparable store sales growth or earnings
compared to public market analysts' expectations
o changes in analysts' recommendations or projections
o general economic and market conditions
WE DO NOT INTEND TO PAY CASH DIVIDENDS FOR THE FORESEEABLE FUTURE
We have never paid cash dividends on shares of our common stock. We do
not intend to pay cash dividends in the foreseeable future. Our revolving credit
facilities contain various financial covenants which restrict, among other
things, our ability to pay cash dividends.
OUR GOVERNING DOCUMENTS, PROVISIONS OF DELAWARE LAW AND OUR STOCKHOLDER RIGHTS
PLAN COULD HAVE ANTI-TAKEOVER EFFECTS
Our Certificate of Incorporation and Bylaws, certain provisions of
Delaware law and a stockholder rights plan that we adopted could have the
following effects:
o delaying, deferring or preventing a change in control of our
company
o discouraging bids for our common stock at a premium over the
market price of our common stock
o adversely affecting the market price of our common stock and the
voting and other rights of the holders of our common stock
Such provisions in our governing documents include, but are not limited
to, a classified Board of Directors and the authority of the Board of Directors
to issue up to 5,000,000 shares of preferred stock and to fix the price, rights,
preferences, privileges and restrictions, including voting rights, of those
shares without further vote or action by the stockholders. The rights of the
holders of our common stock will be subject to, and may be adversely affected
by, the rights of the holders of any preferred stock that may be issued in the
future. We have no present plans to issue shares of preferred stock. In
addition, certain provisions of Delaware law applicable to us could have similar
effects.
Our stockholder rights plan gives our stockholders the right to
purchase a fractional share of preferred stock at a purchase price of $145 for
each share of our common stock held. In addition, until the rights become
exercisable and in certain limited circumstances thereafter, we will issue one
right for each share of our common stock issued after May 22, 1998. The rights
become exercisable only if a person or group acquires beneficial ownership of
15% or more of our outstanding common stock and would entitle all holders of
rights, other than that person or group to purchase shares of our common stock
at a substantial discount to the then-current market price. In addition, if Wild
Oats were acquired in a merger or other business combination or transaction, the
holders of such rights would be entitled to purchase shares of the acquiror's
common stock at a substantial discount.
OUR OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS WILL EXERCISE SIGNIFICANT
CONTROL
As of January 31, 2000, our directors, executive officers and principal
stockholders, and certain of their affiliates, controlled approximately 22.9% of
the outstanding shares of our common stock. Because of this level of stock
ownership, these persons, individually and as a group, are able to effectively
control us and direct our affairs and business, including decisions about the
acquisition or disposition of our assets, future issuances of common stock or
other securities by us, declaration of dividends in our common stock and the
election of directors. The large percentage of stock held by such individuals
could also delay or prevent a change in control.
8
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Pursuant to an agreement between us and certain investors, certain
parties controlling an aggregate of approximately 3.77 million shares of our
common stock have agreed that, under certain circumstances, they will vote their
shares in favor of electing the nominee of an investor to our board of directors
and to the audit and compensation committees of our board.
ACTUAL RESULTS MAY DIFFER FROM RESULTS DISCUSSED IN FORWARD-LOOKING STATEMENTS
Certain statements in this prospectus, including statements contained
in the summary, under the captions "Risk Factors," and elsewhere in this
prospectus constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements include, without limitation, statements as to our plans to acquire,
relocate or open additional stores, the anticipated performance of new or
acquired stores and other statements containing the words "believes,"
"anticipates," "estimates," "expects," "may," "intends" and words of similar
import or statements of our management's opinion. These forward-looking
statements and assumptions involve known and unknown risks, uncertainties and
other factors that may cause our actual results, market performance or
achievements to differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements. Important
factors that could cause such differences include, but are not limited to:
o changes in economic or business conditions in general or affecting
the natural foods industry in particular
o changes in product supply
o changes in the competitive environment in which we operate
o the availability of sites for new stores and potential acquisition
candidates
o difficulties in integration of new acquisitions
o changes in our management information needs
o changes in customer needs and expectations
o governmental and regulatory actions
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of common
stock offered by the selling stockholders.
9
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SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of the common stock as of February 25, 2000 by each selling
stockholder.
<TABLE>
<CAPTION>
NUMBER OF
BENEFICIAL OWNERSHIP SHARES TO BE BENEFICIAL OWNERSHIP
PRIOR TO REGISTERED IN AFTER
THE OFFERING THE OFFERING THE OFFERING (1)
---------------------- -------------- --------------------
NAME NUMBER PERCENT NUMBER
- ---- ------ ------- ------
<S> <C> <C> <C> <C>
Nelson Wolff ....................... 296,301 1.3 296,301 0
George Wolff ....................... 296,301 1.3 296,301 0
Gary Wolff ......................... 296,301 1.3 296,301 0
</TABLE>
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(1) Assumes all offered shares are sold.
All of the selling stockholders were the stockholders of Sun Harvest
Farms, Inc., and partners of an affiliated entity with whom we consummated a
stock-for-stock transaction accounted for as a pooling of interests on December
15, 1999. No selling stockholder claims any beneficial interest or ownership for
any shares other than those issued to, or previously owned by, that selling
stockholder. Each selling stockholder was granted certain registration rights
pursuant to the Merger Agreement executed as part of the transaction. The shares
held by the selling stockholders are being registered pursuant to that
agreement.
PLAN OF DISTRIBUTION
The selling stockholders or their pledgees, donees, transferees or
other successors in interest may offer the shares from time to time. They may
sell the shares on the Nasdaq National Market or in the over-the-counter market
or otherwise, at prices and on terms then prevailing or related to the
then-current market price, or in negotiated transactions. They may sell the
shares using one or more of the following methods or other methods, or in any
combination of such methods.
o to broker-dealers acting as principals
o through broker-dealers acting as agents
o in underwritten offerings
o in block trades
o in agency placements
o in exchange distributions
o in brokerage transactions
The selling stockholders or the purchasers of the shares may pay
compensation in the form of discounts, concessions or commissions to
broker-dealers or others who act as agents or principals or both. The amounts of
compensation may be negotiated at the time and may be in excess of customary
commissions. Broker-dealers and any other persons participating in a
distribution of the shares may be underwriters as that term is defined in the
Securities Act, and any discounts, concessions or commissions may be
underwriting discounts or commissions under the Securities Act. The selling
stockholders may grant a security interest in shares owned by them. If the
secured parties foreclose on the shares, they may be selling stockholders. In
addition, the selling stockholders may sell short the common stock. This
prospectus may be delivered in connection with short sales and the shares
offered may be used to cover short sales.
Any or all of the sales or other transactions involving the shares
described above, whether completed by the selling stockholders, any
broker-dealer or others, may be made using this prospectus. In addition, any
shares that qualify for sale under Rule 144 of the Securities Act may be sold
under Rule 144 rather than by using this prospectus. The
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shares may also be offered in one or more underwritten offerings, on a firm
commitment or best efforts basis. We will not receive any proceeds from the sale
of the shares by the selling stockholders. The shares may be sold in one or more
transactions at a fixed offering price, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. The prices will
be determined by the selling stockholders or by agreement between the selling
stockholders and their underwriters, dealers, brokers or agents.
If required under the Securities Act, the number of the shares being
offered and the terms of the offering, the names of any agents, brokers, dealers
or underwriters and any commission with respect to a particular offer will be
set forth in a prospectus supplement. Any underwriters, dealers, brokers or
agents participating in the distribution of the shares may receive compensation
in the form of underwriting discounts, concessions, commissions or fees from
selling stockholders or purchasers of the shares or both. In addition, sellers
of shares may be underwriters as that term is defined in the Securities Act and
any profits on the sale of shares by them may be discount commissions under the
Securities Act. The selling stockholders may have other business relationships
with us and our subsidiaries or affiliates in the ordinary course of business.
The selling stockholders also may enter into hedging transactions with
broker-dealers and the broker-dealers may engage in short sales of the common
stock in the course of hedging the positions they assume with the selling
stockholders. The selling stockholders may also enter into option or other
transactions with broker-dealers that involve the delivery of the shares to the
broker-dealers, who may then resell or otherwise transfer the shares. The
selling stockholders may also pledge the shares to a broker-dealer and the
broker-dealer may sell those shares upon a default.
We will pay all costs associated with this offering, other than fees
and expense of counsel for the selling stockholders and any underwriting
discounts and commissions, brokerage commissions and fees and transfer taxes.
LEGAL MATTERS
The validity of the common stock offered hereby has been passed upon by
Holme Roberts & Owen LLP, Denver, Colorado as counsel for Wild Oats.
EXPERTS
Our financial statements as of January 2, 1999 and December 27, 1997
and for each of the three years in the period ended January 2, 1999 incorporated
in this prospectus by reference to our Current Report on Form 8-K/A dated
February 28, 2000 (which supercede our financial statements in our Annual Report
on form 10-K for the year ended January 2, 1999, and which supercede our
supplemental combined financial statements in our Current Report on Form 8-K
dated September 27, 1999), and the financial statements of Nature's Fresh
Northwest, Inc. as of and for the year ended February 6, 1999 incorporated in
this prospectus by reference to our Current Report on Form 8-K dated June 14,
1999, as amended on August 12, 1999 and August 16, 1999 have been so
incorporated in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
Our supplemental combined financial statements incorporated in this
prospectus by reference to our Current Report on Form 8-K dated February 28,
2000 have been so incorporated in reliance on the report (which contains an
explanatory paragraph relating to the pooling of interests with Sun Harvest
Farms, Inc. as described in note 2 to the supplemental combined financial
statements) of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
The report of KPMG LLP, independent certified public accountants, on
the financial statements of Henry's Marketplace, Inc. as of and for the
fifty-two weeks ended December 27, 1998, has been incorporated by reference
herein upon the authority of said firm as experts in accounting and auditing.
The report of Ernst &Young LLP, independent auditors, on the financial
statements of Sun Harvest Farms, Inc. as of September 28, 1999, December 29,
1998, December 30, 1997, and for the nine-month period ended September 28, 1999
and the fiscal years ended December 29, 1998, December 30, 1997, and December
31, 1996, which report appears in the Form 8-K of Wild Oats Markets, Inc.
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dated February 28, 2000 has been incorporated herein by reference on the
authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3, which encompasses all
amendments, exhibits, annexes and schedules thereto under the Securities Act
with respect to the common stock offered hereby. This prospectus, which
constitutes a part of the registration statement, does not contain all the
information set forth in the registration statement, to which reference is
hereby made. Statements made in this prospectus as to the contents of any
contract, agreement or other document referred to are not necessarily complete.
With respect to each such contract, agreement or other document filed as an
exhibit to the registration statement and the exhibits thereto, reference is
hereby made to the exhibit for a more complete description of the matter
involved, and each statement made herein shall be deemed qualified in its
entirety by such reference.
We are subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith we file
periodic reports, proxy and information statements and other information filed
with the Commission. The registration statement filed by us with the Commission,
as well as such reports, proxy and information statements and other information
filed by us with the Commission, are available at the web site that the
Commission maintains at http:www.sec.gov and can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional
offices of the Commission located at 7 World Trade Center, New York, New York
10048, and the Central Regional Office, 1801 California Street, Suite 4800,
Denver, CO 80202-2648. Copies of such materials, when filed, may also be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Our common stock is
quoted on the Nasdaq National Market and such reports, proxy and information
statements and other information concerning Wild Oats are available at the
offices of the Nasdaq National Market located at 1735 K Street, N.W.,
Washington, D.C. 20006.
INCORPORATION OF CERTAIN INFORMATION WE FILE WITH THE SEC
Incorporated by reference in this prospectus are our following filings:
o Annual Report on Form 10-K for the fiscal year ended January 2,
1999
OUR HISTORICAL FINANCIAL STATEMENTS CONTAINED IN OUR ANNUAL REPORT
ON FORM 10-K FOR THE FISCAL YEAR ENDED JANUARY 2, 1999 HAVE BEEN
SUPERCEDED BY OUR FINANCIAL STATEMENTS CONTAINED IN OUR CURRENT
REPORT ON FORM 8-K FILED ON SEPTEMBER 29, 1999, AS AMENDED ON
FEBRUARY 28, 2000, DUE TO THE POOLING OF INTERESTS WITH HENRY'S
MARKETPLACE, INC.
o Quarterly Reports on Form 10-Q for the quarters ended April 3,
1999, July 3, 1999, and October 2, 1999
o Definitive Proxy Statement dated March 11, 1999
o Current Reports on Form 8-K filed on: June 14, 1999, as amended on
August 12, 1999 and August 16, 1999; on August 2, 1999; on
September 29, 1999, as amended on February 28, 2000; on October
29, 1999; on November 17, 1999; and on February 28, 2000
o the description of our common stock contained in our registration
statement on Form 8-A dated October 17, 1996
o the description of rights to purchase Series A Junior
Participating Preferred Stock contained in our registration
statement on Form 8-A dated May 21, 1998
All documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference
herein and to be a part of this prospectus from the date of filing of such
documents. Any statement contained in a document incorporated by reference
herein shall be deemed to be
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modified or superseded for purposes of this prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
prospectus.
We will provide without charge to each person, including any beneficial
owner of common stock, to whom a copy of this prospectus has been delivered, on
the written or oral request of such person, a copy of any or all of the
foregoing documents incorporated by reference in this prospectus, other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference into the information that this prospectus incorporates. Written or
oral requests for such copies should be directed to Wild Oats Markets, Inc.,
3375 Mitchell Lane, Boulder, Colorado 80301 (telephone: (303) 440-5220).
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