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| 8-K - FORM 8-K FILING DOCUMENT - WHOLE FOODS MARKET INC | document.htm |
EXHIBIT 99.1
Whole Foods Market Reports Third Quarter Results
Comparable Store Sales Increase 8.4% Including a Positive 60 Basis Point Impact from the Easter Shift;
Company Produces 5.9% Operating Margin and $0.50 in Earnings per Share,
Raises EPS Guidance for Fiscal Year 2011 and Provides Initial Outlook for Fiscal Year 2012
AUSTIN, Texas, July 27, 2011 (GLOBE NEWSWIRE) -- Whole Foods Market, Inc. (Nasdaq:WFM) today reported results for the 12-week third quarter ended July 3, 2011. Sales for the quarter increased 11% to $2.4 billion. Comparable store sales increased 8.4%, or 17.2% on a two-year stacked basis. Identical store sales, excluding four relocations and one expansion, increased 8.1%, or 16.5% on a two-year stacked basis. One and two-year comparable and identical store sales growth included a positive impact of 60 basis points from Easter shifting from the second quarter last year to the third quarter this year. Earnings before interest, taxes, depreciation and amortization ("EBITDA") increased 15% from the prior year to $206.8 million, net income increased 35% to $88.5 million, and diluted earnings per share increased 30% to $0.50. Results included a LIFO charge of $3.5 million versus a credit of $3.7 million in the prior year; net interest income of $1.7 million versus net interest expense of $5.9 million in the prior year; and an effective tax rate of 37.8% versus 40.1% in the prior year.
"We are continuing to gain market share at a faster rate than most public food retailers as reflected in our 8.5% comparable store sales growth year to date. We attribute much of our success to our value efforts, which have improved our price image, and to continuing to raise the bar in areas that matter to our customers, particularly quality standards and health and wellness," said Walter Robb, co-chief executive officer of Whole Foods Market. "We are producing consistently strong top- and bottom-line results and are very excited to be accelerating our new store openings once again. Through continued innovation and ongoing discipline around expenses and capital allocation, we expect to deliver higher levels of both operating performance and returns on invested capital over time."
The following table shows the Company's comparable and identical store sales results for the last five quarters and for the first three weeks of the current fourth quarter through July 24, 2011.
| QTD | ||||||
| 3Q10 | 4Q10 | 1Q11 | 2Q11* | 3Q11* | 4Q11 | |
| Sales growth | 15.2% | 14.7% | 13.8% | 11.6% | 10.9% | |
| Comparable store sales growth | 8.8% | 8.7% | 9.1% | 7.8% | 8.4% | 9.5% |
| Two-year comps | 6.3% | 7.7% | 12.6% | 16.5% | 17.2% | 17.2% |
| Identical store sales growth | 8.4% | 8.7% | 9.1% | 7.8% | 8.1% | 9.3% |
| Two-year idents | 4.6% | 6.4% | 11.6% | 15.5% | 16.5% | 17.0% |
| Sequential basis point change | 272 | 178 | 518 | 392** | 106** | |
*Comparable and identical store sales growth includes a negative 50 basis point impact in 2Q11 and a positive 60 basis point impact in 3Q11 from the Easter shift.
**Excluding the Easter shift in both quarters, two-year idents on a sequential basis increased 440 basis points to 16.0% in 2Q11 and declined five basis points to 15.9% in 3Q11.
For the quarter, the LIFO charge was $3.5 million versus a credit of $3.7 million in the prior year, a negative impact of 32 basis points. Excluding LIFO, gross profit increased 52 basis points to 35.5% of sales driven by an improvement in both cost of goods sold and occupancy costs as a percentage of sales. Direct store expenses improved 36 basis points to 25.9% of sales due primarily to leverage in wages and depreciation as a percentage of sales. As a result, store contribution, excluding LIFO, improved 88 basis points to 9.6% of sales.
For stores in the identical store base, gross profit improved 57 basis points to 35.5% of sales, direct store expenses improved 50 basis points to 25.7% of sales, and store contribution improved 107 basis points to 9.8% of sales.
G&A expenses decreased 11 basis points to 3.0% of sales.
Pre-opening expenses were $11.8 million versus $8.7 million in the prior year. Relocation, store closure and lease termination costs were $2.4 million versus $0.7 million in the prior year.
Net interest income was $1.7 million versus net interest expense of $5.9 million in the prior year. This change was due mainly to a $495.6 million decrease in total debt from the prior year.
The effective tax rate was 37.8% versus 40.1% in the prior year due to savings realized by the Company as a result of certain initiatives and investments.
During the quarter, the Company produced $192.4 million in cash flow from operations and invested $102.0 million in capital expenditures, of which $66.6 million related to new stores. This resulted in free cash flow of $90.4 million. In addition, the Company repaid the remaining $190 million balance on its term loan and paid $17.6 million in dividends to shareholders. At the end of the quarter, total cash and cash equivalents, restricted cash, and investments were $664.0 million, and total debt (capital lease obligations) was $18.0 million.
Additional information on the quarter for comparable stores and all stores is provided in the following table.
| NOPAT | # of | Average | Total | ||
| Comparable Stores | Comps | ROIC* | Stores | Size | Square Feet |
| Over 15 years old (18.9 years old, s.f. weighted) | 4.1% | 113% | 61 | 26,600 | 1,620,700 |
| Between 11 and 15 years old | 8.4% | 79% | 64 | 31,000 | 1,986,800 |
| Between eight and 11 years old | 6.9% | 73% | 44 | 33,800 | 1,486,800 |
| Between five and eight years old | 7.7% | 55% | 50 | 42,400 | 2,117,900 |
| Between two and five years old | 11.9% | 14% | 57 | 54,800 | 3,121,900 |
| Less than two years old (including four relocations) | 14.3% | 7% | 22 | 43,800 | 963,500 |
| All comparable stores (8.5 years old, s.f. weighted) | 8.4% | 41% | 298 | 37,900 | 11,297,600 |
| All stores (8.2 years old, s.f. weighted) | 38% | 308 | 37,900 | 11,673,200 |
*Reflects store-level capital and net operating profit after taxes ("NOPAT"), including pre-opening expense
Fiscal Year Results
For the 40-week period ended July 3, 2011, sales increased 12% to $7.8 billion. Comparable store sales increased 8.5%, or 15.1% on a two-year stacked basis. Identical store sales, excluding four relocations and one expansion, increased 8.4%, or 14.2% on a two-year stacked basis. EBITDA increased 18% to $649.4 million, income available to common shareholders increased 46% to $267.1 million, and diluted earnings per share increased 38% to $1.51. Fiscal-year results included a LIFO charge of $6.5 million versus a credit of $6.5 million in the prior year; store closure reserve adjustments of $0.5 million versus $7.6 million in the prior year; a gain of $3.2 million in the prior year from the sale of a non-operating property; net interest income of $2.6 million versus net interest expense of $20.5 million in the prior year; and an effective tax rate of 38.3% versus 40.5% in the prior year.
Year to date, the Company has produced $595.2 million in cash flow from operations and invested $271.6 million in capital expenditures, of which $156.0 million related to new stores. This resulted in free cash flow of $323.6 million. In addition, the Company repaid the $490 million balance on its term loan and, through July 27, 2011, has paid approximately $52.6 million in dividends to shareholders.
The following table shows the Company's year-to-date results through the third quarter for certain line items compared to its historical five-year ranges and averages.
| FY06-FY10 Range | FY06-FY10 | FY11 | ||
| Low | High | Average | YTD | |
| Sales growth | 1.0% | 23.6% | 14.2% | 12.2% |
| Comparable store sales growth | -3.1% | 11.0% | 5.4% | 8.5% |
| Identical store sales growth | -4.3% | 10.3% | 4.4% | 8.4% |
| Ending square footage growth | 6% | 46% | 15% | 4% |
| Percent of sales from new & relocated stores | 7% | 9% | 7% | 4% |
| Gross profit | 34.0% | 34.9% | 34.6% | 35.1% |
| Direct store expenses | 25.4% | 26.7% | 26.3% | 26.0% |
| Store contribution | 7.5% | 9.6% | 8.3% | 9.1% |
| G&A expenses | 3.0% | 3.4% | 3.2% | 3.1% |
Growth and Development
The Company opened seven stores, including three relocations, in the third quarter and has opened two stores, including one relocation, so far in the fourth quarter. The Company expects to open three additional new stores, including one relocation, in the fourth quarter. The Company currently has 309 stores totaling approximately 11.7 million square feet.
The Company has recently signed eight new leases averaging 30,400 square feet in size in Tucson, AZ; Fremont, CA; Newport Beach, CA; Basalt, CO; Detroit, MI; Columbia, SC; Virginia Beach, VA; and Cheltenham, United Kingdom. These stores currently are scheduled to open in fiscal year 2012 and beyond.
The following table provides additional information about the Company's store openings in fiscal years 2010 and 2011 year to date, leases currently tendered but unopened, and total development pipeline (including leases currently tendered) for stores scheduled to open through fiscal year 2015. For accounting purposes, a store is considered tendered on the date the Company takes possession of the space for construction and other purposes, which is typically when the shell of the store is complete or nearing completion.
| Stores | Stores | Current | Current | |
| Opened | Opened | Leases | Leases | |
| New Store Information | FY10 | FY11 YTD | Tendered | Signed |
| Number of stores (including relocations) | 16 | 15 | 16 | 61 |
| Number of relocations | 0 | 5 | 2 | 5 |
| New markets | 4 | 0 | 2 | 12 |
| Average store size (gross square feet) | 42,600 | 37,700 | 38,000 | 36,100 |
| Total square footage | 682,200 | 564,800 | 607,700 | 2,214,200 |
| Average tender period in months | 10.9 | |||
| Average pre-opening expense per store (incl. rent) | $2.6 mil | |||
| Average pre-opening rent per store | $1.2 mil | |||
| Average development cost (excl. pre-opening) | $11.1 mil | |||
| Average development cost per square foot | $261 |
Outlook for Fiscal Years 2011 and 2012
Based on its third quarter results and updated assumptions for the fourth quarter, the Company is raising its diluted earnings per share range for fiscal year 2011 to $1.91 to $1.92, an increase of 34% year over year. The Company also is providing its initial outlook for fiscal year 2012. The Company notes that fiscal year 2012 will be a 53-week year, with the extra week falling in the fourth quarter, making it a 13-week quarter.
The following table provides additional information on the Company's expectations for the fourth quarter, updated outlook for fiscal year 2011, and initial outlook for fiscal year 2012 on a 53-week basis. The Company notes the fourth quarter is seasonally its weakest quarter of the year in terms of average weekly sales and store contribution excluding LIFO.
"We are not expecting our acceleration in new store openings to have a meaningful impact on our earnings growth," said John Mackey, co-founder and co-chief executive officer of Whole Foods Market. "While new stores produce lower store contribution than mature stores, we estimate new stores will account for just 5% of our total sales and thus should not have a material negative impact on our results. In addition, our new stores are smaller, we are investing less capital in them, and we expect they will achieve higher returns on invested capital than the larger stores we have opened in the past."
| Prior | Current | Q3 YTD | Q4 | FY12 | |
| FY11 Outlook | FY11 Outlook | Actuals | Implied Outlook | 53-Week Outlook* | |
| Sales growth | 11.7% - 12.6% | 12.2% - 12.4% | 12.2% | 11.9% - 12.9% | 13% - 15% |
| Comparable store sales growth | 7.9% - 8.9% | 8.5% - 8.7% | 8.5% | 8.5% - 9.5% | 6.8% - 8.8% |
| Two-year comps | 15.0% - 16.0% | 15.6% - 15.8% | 15.1% | 17.2% - 18.2% | 15.2% - 17.3% |
| Identical store sales growth | 7.8% - 8.7% | 8.3% - 8.6% | 8.4% | 8.2% - 9.2% | 6.5% - 8.5% |
| Two-year idents | 14.3% - 15.2% | 14.8% - 15.1% | 14.2% | 16.9% - 17.9% | 14.7% - 16.8% |
| Number of new stores | 17 | 18 | 13 | 5 | 24 - 27 |
| % of sales from new stores | 4% | 4% | 4% | 6% | 5% |
| Ending square footage growth | 5% | 5% | 4% | 5% | 7% - 8% |
| LIFO charge | $5.5 -- $6.0 mil | $10.0 -- $11.0 mil | $6.5 mil | $3.5 -- $4.5 mil | $5 -- $8 mil |
| G&A expenses | 3.0% | 3.1% | 3.1% | 3.1% | 3.0% |
| Pre-opening and relocation costs | $50.0 -- $53.0 mil | $48.5 -- $50.0 mil | $36.5 mil | $12.0 -- $13.5 mil | $51 -- $56 mil |
| Operating margin | 5.4% | 5.4% | 5.5% | 5.0% | 5.7% - 5.8% |
| EBITDA | $827 -- $837 mil | $833 -- $836 mil | $649 mil | $184 -- $187 mil | $960 -- $980 mil |
| Net interest income | $3.0 -- $4.0 mil | $3.6 -- $4.1 mil | $2.6 mil | $1.0 -- $1.5 mil | $6 -- $8 mil |
| Tax rate | 38.5% - 38.8% | 38.3% | 38.3% | 38.3% | 38.5% - 39.0% |
| Diluted shares outstanding | 178 mil | 177 mil | 177 mil | 180 mil | 183 mil |
| Diluted EPS | $1.87 -- $1.90 | $1.91 -- $1.92 | $1.51 | $0.40 -- $0.41 | $2.21 -- $2.26 |
| YOY % change | 31% - 33% | 34% | 38% | 21% - 23% | 16% - 18% |
| Capital expenditures | $350 -- $400 mil | $375 -- $385 mil | $272 mil | $103 -- $113 mil | $410 -- $460 mil |
*The Company estimates the impact on earnings from the extra week to be $0.06 per share. On a 52-week to 52-week basis, excluding the impact of the extra week in the fourth quarter, the Company expects total sales growth of 11% to 13% and earnings per share growth of 13% to 15%.
The Company is committed to producing positive free cash flow on an annual basis, including sufficient cash flow to fund the 61 stores in its current development pipeline. The following table provides information about the Company's estimated store openings for the next two fiscal years.
| Estimated | Average Square | Ending Square | ||
| Openings | Relocations | Feet per Store | Footage Growth | |
| Fiscal year 2012 | 24 - 27 | 1 - 2 | 35,000 | 7% - 8% |
| Fiscal year 2013 | 28 - 32 | 2 - 3 | 35,000 | 7% - 8% |
Over the long term, the Company considers 1,000 stores to be a reasonable indication of its market opportunity in the United States as the Whole Foods Market brand continues to strengthen, consumer demand for natural and organic products continues to increase, and the Company's flexibility on new store size opens up additional market opportunities. The Company believes Canada and the United Kingdom hold great promise as well.
About Whole Foods Market
Founded in 1980 in Austin, Texas, Whole Foods Market (www.wholefoodsmarket.com) is the leading natural and organic foods supermarket, and America's first national certified organic grocer. In fiscal year 2010, the Company had sales of approximately $9.0 billion and currently has 309 stores in the United States, Canada, and the United Kingdom. Whole Foods Market employs approximately 61,000 Team Members and has been ranked for 14 consecutive years as one of the "100 Best Companies to Work For" in America by Fortune magazine.
The Whole Foods Market, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6063
Forward-looking statements
The following constitutes a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995. Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties, which could cause our actual results to differ materially from those described in the forward-looking statements. These risks include general business conditions, changes in overall economic conditions that impact consumer spending, including fuel prices and housing market trends, the impact of competition and other risks detailed from time to time in the SEC reports of Whole Foods Market, including Whole Foods Market's report on Form 10-K for the fiscal year ended September 26, 2010. Whole Foods Market undertakes no obligation to update forward-looking statements.
The Company will host a conference call today to discuss this earnings announcement at 4:00 p.m. CT. The dial-in number is (800) 894-5910, and the conference ID is "Whole Foods." A simultaneous audio webcast will be available at www.wholefoodsmarket.com.
| Whole Foods Market, Inc. | ||||
| Consolidated Statements of Operations (unaudited) | ||||
| (In thousands, except per share amounts) | ||||
| Twelve weeks ended | Forty weeks ended | |||
| July 3, 2011 | July 4, 2010 | July 3, 2011 | July 4, 2010 | |
| Sales | $ 2,399,781 | $ 2,163,181 | $ 7,753,954 | $ 6,908,400 |
| Cost of goods sold and occupancy costs | 1,551,340 | 1,402,847 | 5,030,455 | 4,499,421 |
| Gross profit | 848,441 | 760,334 | 2,723,499 | 2,408,979 |
| Direct store expenses | 620,588 | 567,191 | 2,019,455 | 1,821,702 |
| Store contribution | 227,853 | 193,143 | 704,044 | 587,277 |
| General and administrative expenses | 73,073 | 68,153 | 237,245 | 206,629 |
| Operating income before pre-opening and store closure | 154,780 | 124,990 | 466,799 | 380,648 |
| Pre-opening expenses | 11,784 | 8,692 | 29,967 | 33,137 |
| Relocation, store closure and lease termination costs | 2,371 | 728 | 6,520 | 10,452 |
| Operating income | 140,625 | 115,570 | 430,312 | 337,059 |
| Interest expense | (266) | (7,421) | (3,882) | (25,757) |
| Investment and other income | 1,938 | 1,543 | 6,531 | 5,236 |
| Income before income taxes | 142,297 | 109,692 | 432,961 | 316,538 |
| Provision for income taxes | 53,825 | 43,963 | 165,824 | 128,203 |
| Net income | 88,472 | 65,729 | 267,137 | 188,335 |
| Preferred stock dividends | -- | -- | -- | 5,478 |
| Income available to common shareholders | $ 88,472 | $ 65,729 | $ 267,137 | $ 182,857 |
| Basic earnings per share | $ 0.50 | $ 0.38 | $ 1.53 | $ 1.11 |
| Weighted average shares outstanding | 176,444 | 171,653 | 174,457 | 164,529 |
| Diluted earnings per share | $ 0.50 | $ 0.38 | $ 1.51 | $ 1.10 |
| Weighted average shares outstanding, diluted basis | 178,610 | 172,601 | 176,513 | 171,395 |
| Dividends declared per common share | $ 0.10 | $ -- | $ 0.30 | $ -- |
| A reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations follows: | ||||
| Twelve weeks ended | Forty weeks ended | |||
| July 3, 2011 | July 4, 2010 | July 3, 2011 | July 4, 2010 | |
| Income available to common shareholders (numerator for basic earnings per share) | $ 88,472 | $ 65,729 | $ 267,137 | $ 182,857 |
| Preferred stock dividends | -- | -- | -- | 5,478 |
| Adjusted income available to common shareholders (numerator for diluted earnings per share) | $ 88,472 | $ 65,729 | $ 267,137 | $ 188,335 |
| Weighted average common shares outstanding (denominator for basic earnings per share) | 176,444 | 171,653 | 174,457 | 164,529 |
| Potential common shares outstanding: | ||||
| Assumed conversion of preferred shares | -- | -- | -- | 6,176 |
| Incremental shares from assumed exercise of stock options | 2,166 | 948 | 2,056 | 690 |
| Weighted average common shares outstanding and potential additional common shares outstanding (denominator for diluted earnings per share) | 178,610 | 172,601 | 176,513 | 171,395 |
| Basic earnings per share | $ 0.50 | $ 0.38 | $ 1.53 | $ 1.11 |
| Diluted earnings per share | $ 0.50 | $ 0.38 | $ 1.51 | $ 1.10 |
| Whole Foods Market, Inc. | ||
| Consolidated Balance Sheets (unaudited) | ||
| July 3, 2011 and September 26, 2010 | ||
| (In thousands) | ||
| Assets | 2011 | 2010 |
| Current assets: | ||
| Cash and cash equivalents | $ 289,107 | $ 131,996 |
| Short-term investments - available-for-sale securities | 247,803 | 329,738 |
| Restricted cash | 86,819 | 86,802 |
| Accounts receivable | 157,162 | 133,346 |
| Merchandise inventories | 348,293 | 323,487 |
| Prepaid expenses and other current assets | 84,143 | 54,686 |
| Deferred income taxes | 103,077 | 101,464 |
| Total current assets | 1,316,404 | 1,161,519 |
| Property and equipment, net of accumulated depreciation and amortization | 1,968,247 | 1,886,130 |
| Long-term investments - available-for-sale securities | 40,255 | 96,146 |
| Goodwill | 662,938 | 665,224 |
| Intangible assets, net of accumulated amortization | 65,736 | 69,064 |
| Deferred income taxes | 51,525 | 99,156 |
| Other assets | 8,446 | 9,301 |
| Total assets | $ 4,113,551 | $ 3,986,540 |
| Liabilities And Shareholders' Equity | ||
| Current liabilities: | ||
| Current installments of long-term debt and capital lease obligations | $ 446 | $ 410 |
| Accounts payable | 228,303 | 213,212 |
| Accrued payroll, bonus and other benefits due team members | 272,447 | 244,427 |
| Dividends payable | 17,700 | -- |
| Other current liabilities | 337,225 | 289,823 |
| Total current liabilities | 856,121 | 747,872 |
| Long-term debt and capital lease obligations, less current installments | 17,595 | 508,288 |
| Deferred lease liabilities | 341,722 | 294,291 |
| Other long-term liabilities | 52,997 | 62,831 |
| Total liabilities | 1,268,435 | 1,613,282 |
| Shareholders' equity: | ||
| Common stock, no par value, 300,000 shares authorized; | ||
| 177,186 and 172,033 shares issued and outstanding | ||
| in 2011 and 2010, respectively | 2,027,016 | 1,773,897 |
| Accumulated other comprehensive income | 5,251 | 791 |
| Retained earnings | 812,849 | 598,570 |
| Total shareholders' equity | 2,845,116 | 2,373,258 |
| Commitments and contingencies | ||
| Total liabilities and shareholders' equity | $ 4,113,551 | $ 3,986,540 |
| Whole Foods Market, Inc. | ||
| Consolidated Statements of Cash Flows (unaudited) | ||
| July 3, 2011 and July 4, 2010 | ||
| (In thousands) | ||
| Forty weeks ended | ||
| July 3, 2011 | July 4, 2010 | |
| Cash flows from operating activities | ||
| Net income | $ 267,137 | $ 188,335 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
||
| Depreciation and amortization | 219,082 | 211,073 |
| Loss (gain) on disposition of fixed assets | 1,478 | (756) |
| Impairment of long-lived assets | 688 | 2,020 |
| Share-based payment expense | 19,090 | 15,371 |
| LIFO expense (benefit) | 6,500 | (6,519) |
| Deferred income tax expense (benefit) | 45,916 | (7,178) |
| Excess tax benefit related to exercise of team member stock options | (16,934) | (2,817) |
| Deferred lease liabilities | 42,501 | 31,322 |
| Other | 4,052 | (1,679) |
| Net change in current assets and liabilities: | ||
| Accounts receivable | (20,692) | (17,613) |
| Merchandise inventories | (30,483) | (14,558) |
| Prepaid expenses and other current assets | (29,262) | 7,610 |
| Accounts payable | 14,600 | 13,722 |
| Accrued payroll, bonus and other benefits due team members | 27,766 | 27,771 |
| Other current liabilities | 50,191 | 12,023 |
| Net change in other long-term liabilities | (6,427) | 2,803 |
| Net cash provided by operating activities | 595,203 | 460,930 |
| Cash flows from investing activities | ||
| Development costs of new locations | (156,048) | (143,379) |
| Other property and equipment expenditures | (115,530) | (56,388) |
| Purchase of available-for-sale securities | (924,287) | (888,947) |
| Sale of available-for-sale securities | 1,057,312 | 536,794 |
| Increase in restricted cash | (17) | (15,791) |
| Payment for purchase of acquired entities, net of cash acquired | (1,972) | (14,450) |
| Other investing activities | (2,369) | (1,075) |
| Net cash used in investing activities | (142,911) | (583,236) |
| Cash flows from financing activities | ||
| Common stock dividends paid | (34,920) | -- |
| Preferred stock dividends paid | -- | (8,500) |
| Issuance of common stock | 210,927 | 43,896 |
| Excess tax benefit related to exercise of team member stock options | 16,934 | 2,817 |
| Payments on long-term debt and capital lease obligations | (490,258) | (210,228) |
| Net cash used in financing activities | (297,317) | (172,015) |
| Effect of exchange rate changes on cash and cash equivalents | 2,136 | 335 |
| Net change in cash and cash equivalents | 157,111 | (293,986) |
| Cash and cash equivalents at beginning of period | 131,996 | 430,130 |
| Cash and cash equivalents at end of period | $ 289,107 | $ 136,144 |
| Supplemental disclosure of cash flow information: | ||
| Interest paid | $ 15,060 | $ 38,494 |
| Federal and state income taxes paid | $ 144,347 | $ 136,195 |
| Non-cash transaction: | ||
| Conversion of redeemable preferred stock into common stock | $ -- | $ 418,247 |
| Whole Foods Market, Inc. | ||||
| Non-GAAP Financial Measures (unaudited) | ||||
| (In thousands) | ||||
| In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides information regarding Earnings before interest, taxes, depreciation and amortization ("EBITDA"), Adjusted EBITDA and Free cash flow as additional information about its operating results. These measures are not in accordance with, or an alternative to, GAAP. The Company's management believes that these presentations provide useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. In addition, management uses these measures for reviewing the financial results of the Company as well as a component of incentive compensation. The Company defines Adjusted EBITDA as EBITDA plus non-cash asset impairment charges. The Company defines Free cash flow as net cash provided by operating activities less capital expenditures. | ||||
| The following is a tabular presentation of the non-GAAP financial measures, EBITDA and Adjusted EBITDA including a reconciliation to GAAP net income, which the Company believes to be the most directly comparable GAAP financial measure. | ||||
| Twelve weeks ended | Forty weeks ended | |||
| EBITDA and Adjusted EBITDA | July 3, 2011 | July 4, 2010 | July 3, 2011 | July 4, 2010 |
| Net income | $ 88,472 | $ 65,729 | $ 267,137 | $ 188,335 |
| Provision for income taxes | 53,825 | 43,963 | 165,824 | 128,203 |
| Interest expense, net | (1,672) | 5,878 | (2,649) | 20,521 |
| Operating income | 140,625 | 115,570 | 430,312 | 337,059 |
| Depreciation and amortization | 66,179 | 64,278 | 219,082 | 211,073 |
| Earnings before interest, taxes, depreciation & amortization (EBITDA) | 206,804 | 179,848 | 649,394 | 548,132 |
| Impairment of assets | 107 | 145 | 688 | 2,020 |
| Adjusted EBITDA | $ 206,911 | $ 179,993 | $ 650,082 | $ 550,152 |
| The following is a tabular reconciliation of the Free cash flow non-GAAP financial measure. | ||||
| Twelve weeks ended | Forty weeks ended | |||
| Free cash flow | July 3, 2011 | July 4, 2010 | July 3, 2011 | July 4, 2010 |
| Net cash provided by operating activities | $ 192,386 | $ 117,947 | $ 595,203 | $ 460,930 |
| Development costs of new locations | (66,597) | (32,413) | (156,048) | (143,379) |
| Other property and equipment expenditures | (35,400) | (20,333) | (115,530) | (56,388) |
| Free cash flow | $ 90,389 | $ 65,201 | $ 323,625 | $ 261,163 |
CONTACT: Cindy McCann
VP of Investor Relations
512.542.0204