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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): May 4, 2005
WHOLE FOODS MARKET, INC.
(Exact name of registrant as specified in its charter)
TEXAS 0-19797 74-1989366
(State of (Commission File (IRS Employer
incorporation) Number) Identification Number)
550 BOWIE STREET
AUSTIN, TEXAS 78703
(Address of principal executive offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (512) 477-4455
Check the appropriate box if the Form 8-K filing is intended to simultaneously
satisfy the reporting obligation of the registrant under any of the following
provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
[ ] Soliciting material pursuant to Rule 14a-12 of the Exchange Act
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) Exchange Act
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) Exchange Act
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ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On May 4, 2005, the Company issued a press release announcing its results of
operations for its second fiscal quarter ended April 10, 2005. A copy of the
press release is furnished herewith as Exhibit 99.1.
The information contained in this Item 2.02, including Exhibit 99.1 attached
hereto, is being furnished and shall not be deemed to be "filed" for the
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or
otherwise subject to the liabilities of that Section. Furthermore, the
information contained in this Item 2.02 or Exhibit 99.1 shall not be deemed to
be incorporated by reference into any registration statement or other document
filed pursuant to the Securities Act of 1933, as amended, except as shall be
expressly set forth by specific reference in such filing.
ITEM 4.02 NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A
RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW.
(a) On February 7, 2005, the Office of the Chief Accountant of the SEC
expressed views regarding certain operating lease accounting issues, including
the recognition of rent during rent holidays, and their application under
generally accepted accounting principles. Our management made a preliminary
determination, in consultation with our independent registered public accounting
firm, similar to other determinations by many other publicly-held retail and
restaurant companies, that its methods of accounting for rent holidays and
tenant improvement allowances, and of determining lives used in the calculation
of depreciation of leasehold improvements and straight-line rent determination
for certain leased properties, were not consistent with the views expressed by
the SEC staff letter and other recent interpretations. On March 1, 2005, our
Audit Committee concurred with management's assessment that the Company's
accounting for these items was incorrect and determined that the Company's
previously issued audited consolidated financial statements for fiscal 2002,
2003 and 2004 and the unaudited comparative 2003 and 2004 quarterly information
should be restated. On March 2, 2005, we filed our first quarter report on Form
10-Q with restated information for the corresponding quarter in fiscal year
2004. On March 7, 2005, we filed a form 10-K/A with restated consolidated
financial statements for fiscal years 2004, 2003 and 2002. These restatements
were based on guidance and interpretations available at that time and reflected
charges to earnings which, among other items, expensed rent incurred or
allocated during the store construction period
After the filing of our restated financial statements on March 7, 2005,
our independent registered accounting firm notified us that the SEC had
determined that capitalization of land or building rent during the construction
period into the historical cost of constructed assets is acceptable. Subsequent
interpretations of this SEC guidance by the Company's and other independent
registered accounting firms indicate that a company's previous practice of
accounting for rent during the construction period should be followed in the
restatement. This guidance was not available to the Company at the time of the
first restatement. After consultation with our management and independent
registered accounting firm, our Audit Committee, at a meeting on May 4, 2005,
determined that it was therefore appropriate to restate the Company's previously
issued financial statements to return to and continue the Company's previous
practice of capitalizing rent during the construction period.
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The return of the Company to its previous accounting practice reduces
the lease accounting charge for first quarter of fiscal year 2005 from $0.04 to
$0.02 per diluted share and the charge for fiscal year 2004 from $0.11 to $0.06
per diluted share. The remaining charge primarily reflects the additional
pre-opening costs and depreciation of the asset resulting from rent allocated to
the construction period.
As a result of the Company's determination to restate its consolidated
financial statements as discussed above, the financial statements included in
the Company's Annual Report on Amendment No. 1 to Form 10-K/A for fiscal 2004
and first quarter report for fiscal year 2005 on Form 10-Q should no longer be
relied upon. The Company will file Amendment No. 2 to Form 10-K/A and Form
10-Q/A for the first quarter of fiscal year 2005 with restated consolidated
financial statements, and the Company's Forms 10-Q for the second, third and
fourth quarters of fiscal 2005 will reflect the restated information for the
corresponding quarters in fiscal 2004.
We issued a press release on May 4, 2005 regarding the restatement
described in Item 4.02 above. A copy of the press release is furnished herewith
as Exhibit 99.2.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Press release, dated May 4, 2005, regarding second quarter
results of operations.
99.2 Press release, dated May 4, 2005, regarding restatement.
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 hereunto duly authorized.
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WHOLE FOODS MARKET, INC.
Date: May 4, 2005 By: /s/ Glenda Flanagan
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Glenda Flanagan
Executive Vice President and
Chief Financial Officer
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