Exhibit 99.1
WHOLE FOODS MARKET REPORTS FOURTH QUARTER RESULTS; NON-GAAP DILUTED EPS
INCREASE TO $0.29; COMPANY REPURCHASES $100 MILLION OF STOCK IN
QUARTER, RAISES QUARTERLY DIVIDEND 20% TO $0.18 PER SHARE,
AND REVISES FISCAL YEAR 2007 GUIDANCE
AUSTIN, Texas, Nov. 2 /PRNewswire-FirstCall/ -- Whole Foods Market, Inc.
(Nasdaq: WFMI) today reported sales and earnings for the 12-week quarter ended
September 24, 2006. For the quarter, sales increased 16% to $1.3 billion.
Comparable store sales increased 8.6% on top of a 13.4% increase in the prior
year. Identical store sales (excluding two relocated stores and one major
expansion) increased 8.4%.
In September 2005, the Company recorded a $17.4 million pre-tax non-cash
share-based compensation charge related to the accelerated vesting of
outstanding stock options based on historical team member turnover rates and the
Company's best estimate of future turnover rates. To adjust this estimate for
actual experience, the Company recorded an additional $3.0 million pre-tax
non-cash share-based compensation charge in the fourth quarter this year. The
Company's Consolidated Statements of Operations on a Non-GAAP Basis (hereinafter
referred to as adjusted results) exclude these charges, as well as $16.5 million
in pre-tax Hurricane Katrina costs in the fourth quarter last year and $7.2
million in pre-tax credits for insurance proceeds and other adjustments related
to Hurricane Katrina in the first three quarters this year.
For the quarter, adjusted net income increased to $42.2 million, and
adjusted diluted earnings per share increased to $0.29. Economic Value Added
(EVA) improved $10.2 million to $8.3 million, and operating cash flow per share
was $0.79.
For the 52 weeks ended September 24, 2006, sales increased 19% to $5.6
billion. Comparable store sales grew 11.0% on top of a 12.8% increase in the
prior year. Identical store sales (excluding five relocated stores and one major
expansion) increased 10.3%. Year over year, the Company reported a 10% increase
in ending square footage and a 14% increase in weighted average square footage,
reflecting the Company's front-end loaded new store openings. Adjusted net
income increased to $201.8 million, and adjusted diluted earnings per share
increased to $1.39. Economic Value Added (EVA) improved $38.6 million to $64.4
million, and operating cash flow per share was $3.12.
"In fiscal 2006, we produced strong operating results, reporting our third
consecutive year of double-digit comparable store sales growth, an increase in
adjusted diluted earnings per share to $1.39, and a $39 million improvement in
EVA," said John Mackey, chairman, chief executive officer, and co-founder of
Whole Foods Market. "We returned $358 million in cash dividends to our
shareholders and are pleased to announce today a 20% increase in our quarterly
dividend to $0.18 per share."
During the quarter, the Company produced $114 million in cash flow from
operations and received $13 million in proceeds from the exercise of stock
options. Capital expenditures in the quarter were $142 million of which $97
million was for new stores. The Company paid approximately $21 million to
shareholders in cash dividends and repurchased approximately two million shares,
or $100 million, of common stock on the open market.
For the fiscal year, the Company produced $453 million in cash flow from
operations and received $222 million in proceeds from the exercise of stock
options. Capital expenditures for the fiscal year totaled $340 million of which
$209 million was for new stores. The Company paid approximately $358 million to
shareholders in cash dividends and repurchased approximately two million shares,
or $100 million, of common stock on the open market.
The Company finished the year with total cash and investments of
approximately $256 million and total long-term debt of approximately $9 million.
The Company today announced that its Board of Directors declared a dividend
of $0.18 per share payable on January 22, 2007 to shareholders of record as of
January 12, 2007. This is an increase of 20% from the Company's previous $0.15
quarterly dividend and is the fourth increase since the Company declared its
first cash dividend of $0.075 on a split-adjusted basis in November 2003.
The following table highlights the Company's fiscal year 2006 growth in
sales, comparable store sales, and square footage relative to its historical
five-year ranges and averages.
Historical and Current Performance Low High Average FY06
- -------------------------------------- ------- ------- ------- -------
Sales growth 17.0% 22.8% 20.7% 19.3%
Comparable store sales growth 8.6% 14.9% 11.1% 11.0%
Two-year comps (sum of two years) 17.8% 27.8% 21.4% 23.8%
Weighted average square footage growth 9% 17% 14% 14%
The following table breaks out additional information on the quarter for
comparable stores and all stores, highlighting the Company's strong performance
throughout its store base.
Average Average NOPAT # of
Comparable Stores Size Comps ROIC* Stores
- -------------------------------------- ------- ------- ------- -------
Over 11 years old 27,400 7.3% 84% 46
Between eight and 11 years old 30,100 6.3% 69% 34
Between five and eight years old 32,500 8.1% 44% 39
Between two and five years old 37,700 11.9% 25% 38
Less than two years old
(includes two relocations) 48,400 11.6% 4% 16
All comparable stores
(7.5 years old, square
footage weighted) 33,300 8.6% 39% 173
All stores (6.8 years old,
square footage weighted) 34,300 33% 186
* Includes pre-opening expense
Gross profit consists of sales less cost of goods sold and occupancy costs
plus the contribution from non-retail distribution and food preparation
operations. For the fourth quarter, adjusted gross profit decreased 43 basis
points to 34.8% of sales. For stores in the comparable store base, adjusted
gross profit decreased eight basis points to 35.2% of sales. These results
include a LIFO credit of $0.6 million this quarter versus a $2.2 million credit
in the fourth quarter last year, a negative impact of 15 basis points year over
year.
Adjusted direct store expenses improved 42 basis points to 25.5% of sales.
For stores in the comparable store base, adjusted direct store expenses improved
70 basis points to 25.2% of sales.
Adjusted G&A expenses improved seven basis points to 3.2% of sales.
The following table shows the Company's adjusted fiscal year 2006 results
for certain line items as a percentage of sales compared to its historical
five-year ranges and averages, highlighting the consistency of these results on
an annualized basis over time.
Historical and Current Performance Low High Average FY06
- -------------------------------------- ------- ------- ------- -------
Gross profit 34.2% 35.1% 34.7% 34.9%
Direct store expenses 25.2% 25.5% 25.4% 25.4%
G&A 3.1% 3.6% 3.3% 3.2%
Pre-opening and relocation costs were $13.7 million in the fourth quarter.
Of the $13.7 million, approximately $1.8 million was accelerated depreciation
related to relocations and approximately $5.9 million was pre-opening rent, both
of which were expensed for accounting purposes but were primarily non-cash.
New Store Development
In the fourth quarter, the Company opened three new stores in Los Altos,
CA; Redmond, WA; and Milwaukee, WI and relocated one store in Atlanta, GA. Three
of these stores opened at the end of the quarter. In the first quarter of fiscal
year 2007, the Company has opened two stores in West Orange, NJ and Tigard, OR
and plans to open a store in Seattle, WA next week and relocate a store in
Dallas, TX in early December.
The Company has recently signed eight new store leases averaging 57,000
square feet in size which are as follows: San Jose, CA; Boise, ID; Kildeer, IL;
Indianapolis, IN; Nashua, NH; Cary, NC; Dallas, TX; and Salt Lake City, UT.
The following table provides additional information about the Company's
store openings in fiscal year 2006 and thus far in fiscal year 2007, leases
currently tendered but not opened, and total development pipeline for stores
scheduled to open through fiscal year 2010. For accounting purposes, a store is
tendered on the date the Company has access to the site for construction and
other purposes.
Stores Stores Current Current
Opened Opened Leases Leases
FY06 FY07 YTD Tendered Signed*
------------- -------- -------- --------
New Store Information
Number of stores
(including relocations) 13 2 13 88
Number of relocations 2 0 1 18
New markets 4 0 2 21
Average store size
(gross square feet) 50,200 53,800 53,200 55,900
As a percentage of
existing store average size 147% 156% 154% 162%
Total square footage 653,000 108,000 691,000 4,959,000
As a percentage of
existing square footage 10% 2% 11% 76%
Average pre-opening
expense per store
(incl. rent) $ 1.9 million --- --- ---
Average pre-opening
rent per store $ 0.7 million --- --- ---
Average tender period 7.8 months --- --- ---
* Includes leases tendered
Growth Goals for Fiscal Year 2007 and Beyond
The Company notes that fiscal year 2007 will be a 53-week year, with the
extra week falling in the fourth quarter making it a thirteen-week quarter. For
fiscal year 2007, on a 52-week to 52-week basis, the Company now expects total
sales growth of 13% to 17%. The Company has produced three consecutive years of
double-digit comparable stores sales growth. In fiscal year 2006, the Company
produced 11.0% comparable stores sales growth, ranging from 13.0% in the first
quarter to 8.6% in the fourth quarter. For the first five weeks of fiscal year
2007 ended October 29, 2006, comparable store sales increased 6.8% on top of a
13.6% increase in the prior year. Based on recent results, current sales trends
and the continuing difficult comparisons, particularly in the first half of the
year, the Company expects comparable store sales growth of 6% to 8% for fiscal
year 2007.
"After producing such strong growth over the last three years, we believe
fiscal 2007 will be a transition year for us. As we revert back to our
historical comparable store sales growth range, without yet producing a fully
offsetting increase in sales from new stores, we believe our total sales growth
will be impacted," said Mr. Mackey. "However, having opened six new stores over
the last two months, we believe we are just beginning to execute on delivering
an acceleration in store openings that will be a driver of strong sales and
comps in the not-so-distant future. We remain confident in our ability to
achieve our goal of reaching $12 billion in sales in fiscal 2010."
Thus far in fiscal year 2007, the Company has opened two stores
representing approximately 108,000 square feet, and all of the Company's 13
currently tendered stores, representing approximately 691,000 square feet, are
expected to open this fiscal year. In addition, the Company expects to announce
five additional stores tendered for openings in fiscal year 2007 with its first
quarter results in mid-February, translating to an estimated year-over-year
increase in ending square footage of approximately 16%.
On a 52-week basis compared to adjusted fiscal year 2006 results, the
Company expects growth in operating income before pre-opening and relocation
costs to be in line with or slightly lower than sales growth.
The Company expects total pre-opening and relocation costs for fiscal year
2007 to be in the range of $68 million to $74 million. This significant
year-over-year increase is due primarily to the anticipated acceleration in
leases tendered and square footage opening in fiscal years 2007 and 2008,
including the opening of 18 to 20 new stores this fiscal year of which up to
five will be relocations. Approximately $18 million to $24 million relates to
stores expected to open in fiscal year 2008. These ranges are based on estimated
tender dates which are subject to change. The Company expects significantly
higher-than-average pre-opening expense in fiscal year 2007 of approximately $7
million related to its first Whole Foods Market store in London. Excluding this
store, the Company expects total pre-opening and relocation expense for stores
opening in fiscal year 2007 to average approximately $2.4 million per store,
above the Company's average for stores that opened in fiscal year 2006 due
primarily to higher accelerated depreciation related to relocations. On an
average weekly basis, the Company expects quarterly pre-opening and relocation
expense to be fairly even throughout the fiscal year.
The Company expects share-based compensation of approximately $2 million to
$3 million per quarter in the first half of the year and $3 million to $4
million per quarter in the second half of the year following the Company's
annual grant date early in the third quarter, when the majority of options are
granted.
Capital expenditures are expected to be in the range of $525 million to
$575 million. Of this amount, approximately 70% to 75% is related to new stores
opening in fiscal year 2007 and beyond.
The Company expects its materially higher pre-opening and relocation costs
resulting primarily from the anticipated acceleration in leases tendered and
square footage opening in fiscal years 2007 and 2008 to significantly impact
fiscal year 2007 diluted earnings per share growth.
Longer term, the Company's goal is to reach $12 billion in sales in fiscal
year 2010.
Non-GAAP Measures: In addition to reporting financial results in accordance
with generally accepted accounting principles, GAAP, the Company provides
non-GAAP operating results that exclude certain charges or credits and
information regarding Economic Value Added ("EVA"). These amounts 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 and to help enable
comparability between current and prior periods. In addition, management uses
non-GAAP EVA measures for reviewing the financial results of the Company and for
incentive compensation and capital planning purposes. In this press release, the
Company has presented its results for the twelve and fifty-two week periods
ended September 24, 2006 and September 25, 2005 on a GAAP and Non-GAAP basis
with a line item reconciliation. Also in this press release, is a tabular
reconciliation of EVA to GAAP net income, which the Company believes to be the
most directly comparable GAAP financial measure.
About Whole Foods Market: Founded in 1980 in Austin, Texas, Whole Foods
Market(R) is a Fortune 500 company and the largest natural and organic foods
retailer. The Company had sales of $5.6 billion in fiscal year 2006 and
currently has 188 stores in the United States, Canada and the United Kingdom.
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 but are not limited to general
business conditions, the timely development and opening of new stores, the
impact of competition, and other risks detailed from time to time in the
Company's SEC reports, including the reports on Form 10-K and 10-K/A Amendment
No. 1 for the fiscal year ended September 25, 2005. The Company does not
undertake any 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 1-800-867-4593 and the
conference ID is "Whole Foods." A simultaneous audio webcast will be available
at http://www.wholefoodsmarket.com .
Contact: Cindy McCann
VP of Investor Relations
512.542.0204
Whole Foods Market, Inc.
Consolidated Statements of Operations - Non-GAAP Basis
(In thousands, except per share amounts)
Twelve weeks ended
September 24, 2006
---------------------------------------------------------
Stock Natural
GAAP Acceleration Disaster Non-GAAP
------------ ------------ ------------ ------------
Sales $ 1,291,017 $ --- $ --- $ 1,291,017
Cost of goods sold and
occupancy costs 841,436 (206) --- 841,230
Gross profit 449,581 206 --- 449,787
Direct store expenses 331,505 (1,740) --- 329,765
General and administrative
expenses 42,979 (1,054) --- 41,925
Operating income before pre-
opening 75,097 3,000 --- 78,097
Pre-opening and relocation
costs 13,746 --- --- 13,746
Operating income 61,351 3,000 --- 64,351
Other income (expense):
Interest expense (21) --- --- (21)
Investment and other income 5,005 --- --- 5,005
Income before income taxes 66,335 3,000 --- 69,335
Provision for income taxes 26,534 640 --- 27,174
Net income $ 39,801 $ 2,360 $ --- $ 42,161
Basic earnings per share $ 0.28 $ 0.02 $ --- $ 0.30
Weighted average shares
outstanding 140,215 140,215 140,215 140,215
Diluted earnings per share $ 0.28 $ 0.02 $ --- $ 0.29
Weighted average shares
outstanding, diluted basis 143,462 143,462 143,462 143,462
Dividends per share $ --- $ ---
A reconciliation of the numerators and denominators of the basic and
diluted earnings per share calculations follows (in thousands):
Stock Natural
GAAP Acceleration Disaster Non-GAAP
------------ ------------ ------------ ------------
Net income (numerator for basic
earnings per share) $ 39,801 $ 2,360 $ --- $ 42,161
Interest on 5% zero coupon
convertible subordinated
debentures, net of
income taxes 58 --- --- 58
Adjusted net income
(numerator for
diluted earnings per share) $ 39,859 $ 2,360 $ --- $ 42,219
Weighted average common shares
outstanding
(denominator for basic
earnings per share) 140,215 140,215 140,215 140,215
Potential common shares
outstanding:
Assumed conversion of 5%
zero coupon convertible
subordinated
debentures 311 311 311 311
Assumed exercise of stock
options 2,936 2,936 2,936 2,936
Weighted average common shares
outstanding and
potential additional common
shares outstanding
(denominator for diluted
earnings per share) 143,462 143,462 143,462 143,462
Basic earnings per share $ 0.28 $ 0.02 $ --- $ 0.30
Diluted earnings per share $ 0.28 $ 0.02 $ --- $ 0.29
Twelve weeks ended
September 25, 2005
---------------------------------------------------------
Stock Natural
GAAP Acceleration Disaster Non-GAAP
------------ ------------ ------------ ------------
Sales $ 1,115,067 $ --- $ --- $ 1,115,067
Cost of goods sold and
occupancy costs 725,081 (1,192) (2,122) 721,767
Gross profit 389,986 1,192 2,122 393,300
Direct store expenses 312,976 (10,092) (13,399) 289,485
General and administrative
expenses 44,072 (6,109) (1,000) 36,963
Operating income before pre-
opening 32,938 17,393 16,521 66,852
Pre-opening and relocation
costs 11,394 --- --- 11,394
Operating income 21,544 17,393 16,521 55,458
Other income (expense):
Interest expense (10) --- --- (10)
Investment and other income 3,448 --- --- 3,448
Income before income taxes 24,982 17,393 16,521 58,896
Provision for income taxes 15,922 2,976 6,608 25,506
Net income $ 9,060 $ 14,417 $ 9,913 $ 33,390
Basic earnings per share $ 0.07 $ 0.11 $ 0.07 $ 0.25
Weighted average shares
outstanding 134,972 134,972 134,972 134,972
Diluted earnings per share $ 0.06 $ 0.10 $ 0.07 $ 0.23
Weighted average shares
outstanding, diluted basis 142,070 142,070 142,070 142,582
Dividends per share $ 0.12 $ 0.12
A reconciliation of the numerators and denominators of the basic and diluted
earnings per share calculations follows (in thousands):
Stock Natural
GAAP Acceleration Disaster Non-GAAP
------------ ------------ ------------ ------------
Net income (numerator for basic
earnings per share) $ 9,060 $ 14,417 $ 9,913 $ 33,390
Interest on 5% zero coupon
convertible subordinated
debentures, net of
income taxes --- --- --- 98
Adjusted net income (numerator for
diluted earnings
per share) $ 9,060 $ 14,417 $ 9,913 $ 33,488
Weighted average common shares
outstanding
(denominator for basic
earnings per share) 134,972 134,972 134,972 134,972
Potential common shares
outstanding:
Assumed conversion of
5% zero coupon convertible
subordinated debentures --- --- --- 512
Assumed exercise of
stock options 7,098 7,098 7,098 7,098
Weighted average common shares
outstanding and
potential additional
common shares
outstanding
(denominator for diluted
earnings per share) 142,070 142,070 142,070 142,582
Basic earnings per share $ 0.07 $ 0.11 $ 0.07 $ 0.25
Diluted earnings per share $ 0.06 $ 0.10 $ 0.07 $ 0.23
Whole Foods Market, Inc.
Consolidated Statements of Operations - Non-GAAP Basis
(In thousands, except per share amounts)
Fifty-two weeks ended
September 24, 2006
---------------------------------------------------------
Stock Natural
GAAP Acceleration Disaster Non-GAAP
------------ ------------ ------------ ------------
Sales $ 5,607,376 $ --- $ --- $ 5,607,376
Cost of goods sold and
occupancy costs 3,647,734 (206) 879 3,648,407
Gross profit 1,959,642 206 (879) 1,958,969
Direct store expenses 1,421,968 (1,740) 4,232 1,424,460
General and administrative
expenses 181,244 (1,054) --- 180,190
Operating income before pre-
opening 356,430 3,000 (5,111) 354,319
Pre-opening and relocation
costs 37,421 --- --- 37,421
Operating income 319,009 3,000 (5,111) 316,898
Other income (expense):
Interest expense (32) --- --- (32)
Investment and other income 20,736 --- (2,121) 18,615
Income before income taxes 339,713 3,000 (7,232) 335,481
Provision for income taxes 135,885 640 (2,893) 133,632
Net income $ 203,828 $ 2,360 $ (4,339) $ 201,849
Basic earnings per share $ 1.46 $ 0.02 $ (0.03) $ 1.45
Weighted average shares
outstanding 139,328 139,328 139,328 139,328
Diluted earnings per share $ 1.41 $ 0.02 $ (0.03) $ 1.39
Weighted average shares
outstanding, diluted basis 145,082 145,082 145,082 145,082
Dividends per share $ 2.45 $ 2.45
A reconciliation of the numerators and denominators of the basic and diluted
earnings per share calculations follows (in thousands):
Stock Natural
GAAP Acceleration Disaster Non-GAAP
------------ ------------ ------------ ------------
Net income (numerator for
basic earnings per share) $ 203,828 $ 2,360 $ (4,339) $ 201,849
Interest on 5% zero coupon
convertible subordinated
debentures, net of income
taxes 283 --- --- 283
Adjusted net income
(numerator for
diluted earnings
per share) $ 204,111 $ 2,360 $ (4,339) $ 202,132
Weighted average common
shares outstanding
(denominator for basic
earnings per share) 139,328 139,328 139,328 139,328
Potential common shares
outstanding:
Assumed conversion of 5% zero
coupon convertible
subordinated debentures 363 363 363 363
Assumed exercise of stock
options 5,391 5,391 5,391 5,391
Weighted average common shares
outstanding and
potential additional common
shares outstanding
(denominator for
diluted earnings
per share) 145,082 145,082 145,082 145,082
Basic earnings per share $ 1.46 $ 0.02 $ (0.03) $ 1.45
Diluted earnings per share $ 1.41 $ 0.02 $ (0.03) $ 1.39
Fifty-two weeks ended
September 25, 2005
---------------------------------------------------------
Stock Natural
GAAP Acceleration Disaster Non-GAAP
------------ ------------ ------------ ------------
Sales $ 4,701,289 $ --- $ --- $ 4,701,289
Cost of goods sold and
occupancy costs 3,052,184 (1,192) (2,122) 3,048,870
Gross profit 1,649,105 1,192 2,122 1,652,419
Direct store expenses 1,223,473 (10,092) (13,399) 1,199,982
General and administrative
expenses 158,864 (6,109) (1,000) 151,755
Operating income before pre-
opening 266,768 17,393 16,521 300,682
Pre-opening and relocation
costs 37,035 --- --- 37,035
Operating income 229,733 17,393 16,521 263,647
Other income (expense):
Interest expense (2,223) --- --- (2,223)
Investment and other income 9,623 --- --- 9,623
Income before income taxes 237,133 17,393 16,521 271,047
Provision for income taxes 100,782 2,976 6,608 110,366
Net income $ 136,351 $ 14,417 $ 9,913 $ 160,681
Basic earnings per share $ 1.05 $ 0.11 $ 0.08 $ 1.24
Weighted average shares
outstanding 130,090 130,090 130,090 130,090
Diluted earnings per share $ 0.99 $ 0.10 $ 0.07 $ 1.17
Weighted average shares
outstanding, diluted basis 139,950 139,950 139,950 139,950
Dividends per share $ 0.47 $ 0.47
A reconciliation of the numerators and denominators of the basic and diluted
earnings per share calculations follows (in thousands):
Stock Natural
GAAP Acceleration Disaster Non-GAAP
------------ ------------ ------------ ------------
Net income (numerator for
basic earnings per share) $ 136,351 $ 14,417 $ 9,913 $ 160,681
Interest on 5% zero coupon
convertible subordinated
debentures, net of income
taxes 2,539 --- --- 2,539
Adjusted net income
(numerator for diluted
earnings per share) $ 138,890 $ 14,417 $ 9,913 $ 163,220
Weighted average common
shares outstanding
(denominator for basic
earnings per share) 130,090 130,090 130,090 130,090
Potential common shares
outstanding:
Assumed conversion of 5% zero
coupon convertible
subordinated debentures 3,414 3,414 3,414 3,414
Assumed exercise of
stock options 6,446 6,446 6,446 6,446
Weighted average common shares
outstanding and
potential additional common
shares outstanding
(denominator for
diluted earnings
per share) 139,950 139,950 139,950 139,950
Basic earnings per share $ 1.05 $ 0.11 $ 0.08 $ 1.24
Diluted earnings per share $ 0.99 $ 0.10 $ 0.07 $ 1.17
Whole Foods Market, Inc.
Consolidated Balance Sheets
September 24, 2006 and September 25, 2005
(In thousands)
2006 2005
------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 2,252 $ 308,524
Short-term investments -
available-for-sale securities 193,847 ---
Restricted cash 60,065 36,922
Trade accounts receivable 82,137 66,682
Merchandise inventories 203,727 174,848
Deferred income taxes 48,149 39,588
Prepaid expenses and other current assets 33,804 45,965
Total current assets 623,981 672,529
Property and equipment, net of accumulated
depreciation and amortization 1,236,133 1,054,605
Goodwill 113,494 112,476
Intangible assets, net of accumulated
amortization 34,767 21,990
Deferred income taxes 29,412 22,452
Other assets 5,209 5,244
Total assets $ 2,042,996 $ 1,889,296
2006 2005
------------- -------------
Liabilities And Shareholders' Equity
Current liabilities:
Current installments of long-term
debt and capital lease obligations $ 49 $ 5,932
Trade accounts payable 121,857 103,348
Accrued payroll, bonus and other
benefits due team members 153,014 126,981
Dividends payable --- 17,208
Other current liabilities 234,850 164,914
Total current liabilities 509,770 418,383
Long-term debt and capital lease obligations,
less current installments 8,606 12,932
Deferred rent liability 120,421 91,775
Other long-term liabilities 56 530
Total liabilities 638,853 523,620
Shareholders' equity:
Common stock, no par value, 300,000 shares
authorized; 142,189 and 136,017 shares
issued; 139,607 and 135,908 shares
outstanding in 2006 and 2005, respectively 1,147,872 874,972
Common stock in treasury, at cost (99,964) ---
Accumulated other comprehensive income 6,975 4,405
Retained earnings 349,260 486,299
Total shareholders' equity 1,404,143 1,365,676
Commitments and contingencies
Total liabilities and shareholders'
equity $ 2,042,996 $ 1,889,296
Whole Foods Market, Inc.
Consolidated Statements of Cash Flows
September 24, 2006 and September 25, 2005
(in thousands)
Fifty-two weeks ended
-----------------------------
September 24, September 25,
2006 2005
------------- -------------
Cash flows from operating activities
Net Income $ 203,828 $ 136,351
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 156,223 133,759
Loss on disposition of assets 6,291 15,886
Share-based compensation 9,432 19,135
Tax benefit related to exercise
of employee stock options --- 62,643
Excess tax benefit related to exercise
of employee stock options (52,008) ---
Deferred income tax benefit (15,521) (27,873)
Deferred rent 26,607 16,080
Interest accretion on long-term debt 460 4,120
Other 693 1,317
Net change in current assets and
liabilities
Trade accounts receivable (17,720) (2,027)
Merchandise inventories (32,200) (21,486)
Prepaid expense and other
current assets (7,849) (4,151)
Trade accounts payable 18,509 12,597
Accrued payroll, bonus and other
benefits due team members 26,033 26,445
Other accrued expenses 129,886 38,023
Net cash provided by operating activities 452,664 410,819
Cash flows from investing activities
Development costs of new store locations (208,588) (207,792)
Other property and equipment expenditures (131,614) (116,318)
Proceeds from hurricane insurance 3,308 ---
Acquisition of intangible assets (16,332) (1,500)
Purchase of available-for-sale securities (555,095) ---
Sale of available-for-sale securities 362,209 ---
Increase in restricted cash (23,143) (10,132)
Notes receivable --- 13,500
Net cash used in investing activities (569,255) (322,242)
Cash flows from financing activities
Dividends paid (358,075) (54,683)
Issuance of common stock 222,030 85,816
Purchase of treasury stock (99,964) ---
Excess tax benefit related to
exercise of employee stock options 52,008 ---
Payments on long-term debt and
capital lease obligations (5,680) (5,933)
Net cash provided by financing
activities (189,681) 25,200
Net increase (decrease) in cash and
cash equivalents (306,272) 113,777
Cash and cash equivalents at
beginning of period 308,524 194,747
Cash and cash equivalents at
end of period $ 2,252 $ 308,524
Supplemental disclosure of cash flow
information:
Interest paid $ 607 $ 1,063
Federal and state income taxes paid $ 70,220 $ 74,706
Non-cash transactions:
Conversion of convertible debentures
into common stock $ 4,922 $ 147,794
Whole Foods Market, Inc.
Economic Value Added
(In thousands)
Twelve weeks ended Fifty-two weeks ended
--------------------------- ---------------------------
Sept. 24, Sept. 25, Sept. 24, Sept. 25,
2006 2005 2006 2005
------------ ------------ ------------ ------------
EVA
Net income $ 39,801 $ 9,060 $ 203,828 $ 136,351
Provision for income taxes 26,534 15,922 135,885 100,782
EVA adjustments* 8,308 29,424 19,088 38,832
NOPBT 74,643 54,406 358,801 275,965
Income taxes (40%) 29,857 21,762 143,520 110,386
NOPAT 44,786 32,644 215,281 165,579
Capital Charge 36,458 34,483 150,871 139,793
EVA $ 8,328 $ (1,839) $ 64,410 $ 25,786
* GAAP amounts not included in EVA include interest expense, gains and
losses on the disposition of assets, accelerated depreciation and
share-based compensation.
SOURCE Whole Foods Market, Inc.
-0- 11/02/2006
/CONTACT: Cindy McCann, VP of Investor Relations of Whole Foods Market,
Inc., +1-512-542-0204/
/Web site: http://www.wholefoodsmarket.com /