As filed with the Securities and Exchange
Commission on June 7, 2002.
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
WILD OATS MARKETS, INC.
(Exact name of registrant as specified in its charter)
Delaware 84-1100630
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3375 Mitchell Lane
Boulder, Colorado 80301
(303) 440-5220
(Address, including zip code, and telephone number, including area
code of registrant's principal executive offices)
------------------
Edward F. Dunlap
Chief Financial Officer
Wild Oats Markets, Inc.
3375 Mitchell Lane
Boulder, Colorado 80301
(303) 440-5220
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Randall H. Doud, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
(212) 735-3000
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. / /
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
CALCULATION OF REGISTRATION FEE
------------------------------------- ------------------- ------------------------ ------------------------- --------------------
Proposed Proposed
Title of Shares to be Registered Amount to be Maximum Aggregate Maximum Aggregate Amount of
Registered Price Per Share (1) Offering Price (1) Registration Fee
------------------------------------- ------------------- ------------------------ ------------------------- --------------------
Common Stock, par value 3,250,000 $14.275 $46,393,750 $4,258.37(3)
$.001 per share(2)
------------------------------------- ------------------- ------------------------ ------------------------- --------------------
(1) Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(c) under
the Securities Act, and based upon the average of the high and low prices of the registrant's common stock as
reported on the Nasdaq National Market on June 6, 2002.
(2) Includes preferred share purchase rights ("Rights"). The Rights are associated with and trade with the common
stock. The value, if any, attributable to the Rights is reflected in the market price of the common stock.
(3) Reflects an offset of $9.86 pursuant to Rule 457(p) under the Securities Act for the unused portion of the filing
fee paid by Wild Oats Markets, Inc. in connection with its Registration Statement on Form S-3 (Registration No.
333-85908) filed with the Securities and Exchange Commission on April 9, 2002.
-----------------------------------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
=============================================================================
EXPLANATORY NOTE:
The prospectus filed herewith is a combined prospectus pursuant to Rule
429 under the Securities Act, which relates to the shares registered hereby
and the shares registered on a Registration Statement on Form S-3, filed with
the Securities and Exchange Commission on November 14, 1997 (Registration No.
333-40305), by Wild Oats Markets, Inc. Accordingly, upon effectiveness, this
registration statement shall act as a post-effective amendment to such earlier
registration statement.
PROSPECTUS
[WILD OATS MARKETS, INC LOGO]
COMMON STOCK
This prospectus covers the offer and sale of up to 4,450,000 shares of
common stock, $.001 par value per share, of Wild Oats Markets, Inc., a
Delaware corporation (the "Company"), by the Company to investors to be
identified.
Our executive offices are located at 3375 Mitchell Lane, Boulder,
Colorado 80301, and our telephone number is (303) 440-5220.
The common stock is quoted on Nasdaq National Market under the symbol
"OATS." On June 6, 2002, the last reported sale price of our common stock on
the Nasdaq National Market was $14.07 per share.
Investing in the common stock involves a high degree of risk. See "Risk
Factors" beginning on page 3.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
----------------------
The date of this prospectus is June __, 2002.
TABLE OF CONTENTS
Page
Wild Oats Markets............................................... 1
Risk Factors.................................................... 3
Special Note Regarding Forward-Looking Information.............. 7
Recent Events and Other Material Information.................... 8
Use of Proceeds................................................. 10
Plan of Distribution............................................ 11
Legal Matters................................................... 11
Experts......................................................... 12
Where You Can Find More Information............................. 12
WILD OATS MARKETS
Wild Oats Markets, Inc. is one of the largest natural foods supermarket
chains in North America. As of June 1, 2002, we operated 102 natural foods
stores, including two small vitamin stores, in 23 states and British Columbia,
Canada under several names, including:
o Wild Oats Natural Marketplace (nationwide);
o Henry's Marketplace (San Diego and Orange County, California);
o Nature's - A Wild Oats Market (metropolitan Portland, Oregon);
o Sun Harvest Farms (Texas); and
o Capers Community Market (British Columbia, Canada).
We are dedicated to providing a broad selection of high-quality natural,
organic 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. We believe we have developed a differentiated
concept that appeals to a broader, more mainstream customer base than the
traditional natural foods store. Our comprehensive selection of natural health
foods products appeals to health-conscious shoppers while we also offer
virtually every product category found in a conventional supermarket,
including grocery, produce, meat, poultry, seafood, dairy, frozen, food
service, bakery, vitamins and supplements, health and body care and household
items.
Retail sales of natural products have grown from $7.6 billion in 1994 to
$24.6 billion in fiscal 2000, a 21.6% compound annual growth rate, and total
sales of natural products (including over the internet, by practitioners, by
multi-level marketers and through mail order) reached $32.1 billion in fiscal
2000, according to the Natural Foods Merchandiser. Sales growth in the
traditional grocery industry has remained relatively flat over the same
period. We believe that this growth reflects a broadening of the natural
products consumer base, which is being propelled by several factors, including
healthier eating patterns, increasing concern regarding food purity and safety
and greater environmental awareness. Our unique positioning, coupled with
industry data that states that the natural products industry comprises less
than 5% of the total grocery industry, offers significant potential for us to
continue to expand our customer base.
Our sales grew from $838.1 million during fiscal 2000 to $893.2 million
during fiscal 2001, an increase of 6.6%, due largely to improvements in
merchandising, marketing and operations in our stores and the opening of four
new stores. We also believe that sales increases, in the face of a number of
store closures and sales, resulted from the implementation in 44 of our
natural foods supermarket format stores of certain new strategic initiatives.
These include strategic banner consolidation to build brand equity, and
marketing, merchandising and pricing initiatives as part of our Fresh Look
program. The Fresh Look program was tested in our Colorado stores on a
modified format in July of 2001, and rolled out to 44 stores in phases during
September, October and November of 2001. The Fresh Look program includes price
reductions on up to 2,500 items per store, increased marketing through the
introduction of a weekly, eight-page flyer that is distributed to a broader
range of potential customers, and operational modifications in the stores,
including product reorganization, department reorganization within the store,
modification of product mix and increased labor staffing.
We added 4, 13, 25, 16 and 14 new and acquired stores to our store base
in fiscal years 2001, 2000, 1999, 1998 and 1997, respectively. As a result of
our aggressive growth over the last five years, we have increased our
penetration of existing markets, entered new geographic markets and created a
stronger platform for future growth. We believe our growth has resulted in
operating efficiencies created by:
o warehousing, distribution and administrative economies of scale;
o improved volume purchasing discounts; and
o coordinated merchandising and marketing strategies.
Our aggressive growth has also resulted in operations and acquisition
integration difficulties that had a negative impact on our overall operating
results in fiscal 2001.
At the end of fiscal 2001, we had 107 stores located in 23 states and
Canada, as compared to 106 stores in 22 states and Canada as of the end of
fiscal 2000. A summary of store openings, acquisitions, closures and sales is
as follows:
TOTAL STORE COUNT
-----------------------------------------
-------------------------- -- -----------
Fiscal Year Period
Ending Ending
----------- -- ----------- -----------
June 1,
2000 2001 2002
----------- ----------- -----------
----------- ----------- -----------
Store count at beginning of period 110 106 107
Stores opened 14 4 1
Stores acquired 2
Stores closed (17) (1) (3)
Stores sold (3) (2) (3)
----------- ----------- -----------
----------- ----------- -----------
Store count at end of period 106 107 102
=========== =========== ===========
As part of our strategic repositioning announced in the second and fourth
quarters of fiscal 2000, we identified 22 natural foods stores for closure or
sale due to weak performance. In fiscal 2000, we closed 10 and sold three of
those identified stores. In the second quarter of fiscal 2001, as part of
additional evaluation of our operations by new management, we identified an
additional three stores for closure in fiscal 2001; in the fourth quarter of
fiscal 2001, we extended our evaluation and identified an additional three
stores for closure in fiscal 2001 and 2002. To date, we have closed four of
the identified stores, terminated our lease-related obligations as to two of
the identified locations and sold five of the identified stores, four in
related transactions. We also closed two small vitamin stores in the second
and third quarters of fiscal 2000. Due to a change in estimates related to
changes in facts and circumstances during the fourth quarter of fiscal 2001,
we decided to continue to operate four stores previously identified for
closure or sale. A summary of restructuring activity by store count is as
follows:
RESTRUCTURING STORE COUNT
-----------------------------------------
-------------------------- -- -----------
Fiscal Year Period
Ending Ending
----------- -- ----------- -----------
June 1,
2000 2001 2002
----------- ----------- -----------
----------- ----------- -----------
Stores remaining at commencement of period 9 6
Stores identified in fiscal 2000 for closure
or sale 22
Stores identified in fiscal 2001 for closure
or sale 6
Identified stores closed or abandoned (10) (3) (3)
Identified stores sold (3) (2) (3)
Reversal of stores identified for closure or
sale (4)
----------- ----------- -----------
Identified stores remaining at period end 9 6 0
=========== =========== ===========
RISK FACTORS
You should carefully consider the following risk factors, in addition to
the other information included or incorporated by reference in this
prospectus, before making an investment decision. Additional risks that we do
not yet know of or that we currently think are immaterial may also impair our
business operations. If any of the events or circumstances described in the
following risks actually occurs, our business may suffer, the trading price of
common stock could decline, and you may lose all or part of your investment.
Our quarterly financial results and our stock price may fluctuate significantly
Our quarterly results of operations may differ materially from quarter to
quarter for a variety of reasons, including the timing and success of new
store openings, overall store performance, changes in the economy, seasonality
and the timing of holidays, significant increases or decreases in prices for
or availability of goods and services, competitive pressure and labor
disturbances, as well as other factors mentioned in this section.
Our stock price has been and continues to be fairly volatile. Our stock
price is affected by our quarterly and year-end results, results of our major
competitors and suppliers, general market and economic conditions and
publicity about us, our competitors, our vendors or our industry. Volatility
in our stock price may affect our future ability to raise proceeds from equity
financings, renegotiate our existing credit agreement or enter into a new
borrowing relationship, or affect our ability to obtain new store sites on
favorable economic terms.
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; and
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 April 14, 2002, had 131 stores
and had annual sales of approximately $2.3 billion in its 2001 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.
Economic conditions may affect us to a greater degree than our competitors
Downturns in general economic conditions in communities, states, regions
or the nation as a whole can negatively affect our results of operations.
While purchases of food generally do not decrease in a slower economy,
consumers may choose less expensive alternative sources for food purchases. In
addition, downturns in the economy make the disposition of excess properties,
for which we continue to pay rent and other carrying costs, substantially more
difficult as the markets become saturated with vacant space and market rents
decrease.
Information picketing and other union activities may negatively affect our sales
From time to time, unions will attempt to organize employees or portions
of the employee base at stores or our distribution or manufacturing
facilities. Responses to organization attempts require substantial management
and employee time and are disruptive to operations. In addition, from time to
time certain of our stores may be subject to informational picketing by local
trade unions, which can discourage customer traffic and lower sales volumes.
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 our key executive personnel, including:
o Perry D. Odak, our Chief Executive Officer and President;
o Stephen P. Kaczynski, our Senior Vice President of Merchandising; and
o Bruce Bowman, our Senior Vice President of Operations.
The loss of the services of these individuals or other of our key
personnel could harm our operations. We do not maintain key person insurance
on any of these personnel. Our continued success is also dependent upon our
ability to attract and retain qualified executives to meet our future growth
needs. We face intense competition for qualified executives, many of whom are
subject to offers from competing employers. We may not be able to attract and
retain key executive personnel as necessary to operate our business.
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. We purchase 28.2% of our total goods
from one distributor under an agreement that expires in August 2002. We are
currently negotiating with that distributor and others for a new distribution
agreement. We may experience significant disruption in our operations through
shortages of goods and services if we change our distribution relationship.
Any significant disruption in the supply of goods could have a material impact
on our overall sales volume, cost of goods and our profitability. We may not
be able to negotiate future supply agreements with this or other distributors
on terms favorable to us, if at all. 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.
Changes in government regulation could increase our costs and harm
our operating results
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; and
o food and alcoholic beverage sales regulations.
For example, in the fall of 2002, the U.S.D.A.'s National Organic
Standards, a comprehensive program of regulations governing the growing,
production, handling and sale of goods advertised as "organic", will be fully
implemented. We may experience a disruption in our product offerings if our
suppliers are unable to comply with these standards or our stores require
certification as organic handlers to handle certain organic foods.
Additionally, approximately 17% of our total sales come from the sale of
vitamins, supplements and herbal products and 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.
Modifications in existing laws and the implementation of new laws
governing components of our business operations may be triggered by consumer
and regulatory concerns regarding food safety issues, new technology or
competitive pressures. Such modifications could require the reformulation of
certain products to meet new standards, the recall or discontinuance of
certain products not able to be reformulated, additional record keeping,
expanded documentation of the properties of certain products, expanded or
different labeling and/or scientific substantiation. Any of these requirements
could harm our sales volume, costs of goods and direct store expenses. In
addition, from time to time we are audited by various governmental agencies
for compliance with existing laws, and we could be subject to fines or
operational modifications as a result of noncompliance.
Our Fresh Look program may not be successful, which would harm
our operating results
In 2001, we introduced our Fresh Look program in 44 of our natural
supermarket stores, and as part of such program reduced everyday prices on up
to 2,500 items per store and implemented a weekly flyer program, with an
expanded selection of sale items. We currently are proposing to implement the
Fresh Look program to our remaining natural foods supermarket format stores in
2002. Our Fresh Look program may not be successful, in which case we will
experience an increase in costs and a decrease in gross margins without a
corresponding increase in gross sales. For example, after analysis of results
from the Fresh Look stores and additional customer research, we determined
that some pricing reductions on certain items were overly aggressive,
resulting in greater margin erosion without corresponding customer recognition
and item movement, and we are evaluating a modest price increase on selected
products.
Successfully opening and operating new stores is a critical component of
our growth strategy
We have grown considerably in size and geographic scope since 1992.
Between 1997 and 2001, we added 72 new and acquired stores to our store base.
We plan to continue growing, primarily through the opening of new stores. If
we are unable to successfully open and operate new stores our growth strategy
will be restricted and our operating results will be harmed. We are currently
restricted by our bank covenants in the number of new leases we can sign and
the amount of aggregate new store capital expenditures we can make; however,
the bank covenants allow us to add additional leases and make additional
capital expenditures if we are successful in raising $30.0 million or more in
new equity financings. Our ability to successfully open and operate new stores
depends on many factors, including our ability to:
o raise sufficient equity financing to allow us to execute new leases
and spend additional capital in accordance with the terms of our
current bank covenants;
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; and
o obtain adequate funding for operations.
New stores build their sales volumes and refine their merchandise
selection gradually and, as a result, generally have lower gross margins and
higher operating expenses as a percentage of sales than more mature stores. We
anticipate that the stores we opened in 2001 and 2002 will experience
operating losses for the first six to 12 months of operation, in accordance
with historical trends; however, given the continued weakening of the U.S.
economy in the wake of the events of September 11, 2001, operating losses may
be extended for additional periods of time. Additionally, we incur significant
pre-opening expenses and, as a result, the opening of a significant number of
new stores in a single period will negatively affect our operating results.
We may grow our business through the acquisition of other stores, which we
may be unable to successfully accomplish
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 and financial results
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; and
o inexperience in operating different store formats.
Further, acquired stores, while generally profitable as of the
acquisition date, generate lower gross margins and store contribution margins
than our company average due to their substantially lower volume purchasing
discounts and the integration of the acquired stores into our operating
systems. Over time, we expect the gross margin and store contribution margin
of acquired stores to approach our company average. Other factors that could
cause acquired stores to perform at lower-than-expected levels include, among
other things, difficulties in integrating existing employees, turnover of
regional and store management, disruption of advertising, changes in product
mix and delays in the integration of purchasing programs.
Our remodeling efforts may cause an extended reduction in the sales volumes
of our remodeled stores
We completed the remodeling of 15 of our older stores in 2001, and
remerchandised a number of our stores in the second, third and fourth quarters
of 2001, with the goal of eliminating slower-selling products, reducing excess
SKU counts in certain categories of products, and giving greater emphasis to
produce, meat and seafood and grocery departments. We plan to remodel and
remerchandise a number of our older remaining stores, subject to the
limitations of our bank covenants and the availability of capital. Remodels
and remerchandising typically cause short-term disruption in sales volume and
related increases in certain expenses as a percentage of sales, such as
payroll. Current and future remodeled or remerchandised stores may experience
sales disruptions and the related impact on earnings to a greater degree than
we have projected.
Our strategy of clustering stores may cause an extended decrease in sales
of clustered stores
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. Our comparable store sales results have been
negatively affected in the past by, among other factors, planned
cannibalization, which is the loss of sales at an existing store when we open
a new store nearby, resulting from the implementation of our store clustering
strategy. Some new stores opened in the past two years have caused a greater
degree of cannibalization than previously expected, and we currently believe
that the store contribution margins at the older, affected stores in these
regions will not rebound to their prior levels. In other existing markets, the
sales and operating results trends for other stores may continue to experience
temporary declines related to the clustering of stores. We are currently
reevaluating our clustering strategy in response to greater-than-expected
sales cannibalization in certain existing markets where we opened new stores.
Our growth strategy has placed, and will continue to place, a significant
strain on our management
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.
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 credit
facilities contain various financial covenants which restrict, among other
things, our ability to pay cash dividends.
Legal proceedings could materially impact our results
From time to time we are party to legal proceedings including matters
involving personnel and employment issues, distribution relationships, real
estate leases, and other proceedings arising in the ordinary course of
business. Although not currently anticipated by management, our operating
results could be harmed by the decisions and expenses related to such
proceedings.
We may be subject to product liability claims if people are harmed by the
products we sell
There is increasing governmental scrutiny of and public awareness
regarding food safety. We believe that many customers choose to shop at our
stores because of their interest in health, nutrition and food safety. We
believe that our customers hold us to a higher standard than conventional
supermarkets. The real or perceived sale of contaminated food products by us
could result in decreased sales and product liability claims, which would harm
our operating results.
Information system upgrades or integrations may disrupt our operations or
financial reporting
We continually evaluate and upgrade our management information systems.
We have completed a number of acquisitions in recent years, and the
information systems of some of the acquired operations have not been fully
integrated with our information systems. Although we do not anticipate any
disruption in our operations or financial reporting as a result of system
upgrades or system integrations, there can be no assurance that such
disruption will not occur or that the desired benefits from the system
upgrades will be realized.
We May Be Unable to Refinance Our Bank Debt on Attractive Terms
Our $125,000,000 bank credit facility matures in August 2003 and contains
some covenants which are more restrictive on our operational and financial
flexibility than we believe could be achieved in a new facility. Following the
sale of the shares of common stock offered by this prospectus, we hope to
arrange and issue up to $100,000,000 in senior and/or subordinated debt, the
proceeds of which will be used, together with operating cash and a portion of
the proceeds from the sale of the shares of common stock offered by this
prospectus, to refinance our existing facility. We have begun the process of
investigating possible debt refinancing opportunities, but there can be no
assurance as to whether the debt markets will be receptive to a refinancing on
terms that would be attractive to us or as to the timing of arranging any such
refinancing.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
This prospectus contains "forward-looking statements" within the meaning
of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act. In some cases, you can identify these forward-looking statements
by words such as "may," "will," "expect," "intend," "anticipate," "believe,"
"estimate," "plan," "could," "should" and "continue" and other similar words
and expressions. Specifically, this prospectus contains forward-looking
statements regarding:
o our plans to open, acquire, relocate or close additional stores;
o the anticipated performance of such stores;
o the impact of competition and current economic uncertainty;
o the sufficiency of funds to satisfy our cash requirements through the
remainder of fiscal 2002;
o our expectations for comparable store sales;
o our plans for redesigning our natural foods supermarket store format;
o the impact of changes resulting from implementation of our Fresh Look
merchandising, advertising and pricing program;
o levels of cannibalization caused by clustering stores; and
o expected pre-opening expenses and capital expenditures;
Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, 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, among other
things, the following:
o our ability to conclude a private placement of our stock;
o the timing and success of the implementation of the Fresh Look
program;
o the timing and execution of new store openings, relocations, remodels,
sales and closures;
o the impact of competition;
o changes in product supply or suppliers;
o changes in management information needs;
o changes in customer needs and expectations;
o governmental and regulatory actions;
o general industry or business trends or events;
o changes in economic or business conditions in general or affecting the
natural foods industry in particular;
o competition for and the availability of sites for new stores and
potential acquisition candidates; and
o other factors referenced in this prospectus.
You should also consider carefully the risk factors described on pages 3
through 7 of this prospectus, which address additional factors that could
cause our results to differ from those set forth in the forward-looking
statements. We undertake no obligation to update any of the forward-looking
statements after the date of this prospectus to conform such statements to
actual results, except to the extent required by law.
RECENT EVENTS AND OTHER MATERIAL INFORMATION
Perry D. Odak's Right to Receive Additional Options - Perry D. Odak, the
Company's Chief Executive Officer and President and a director of the Company,
is a party to an employment agreement under the terms of which he will be
entitled, by virtue of the sale of the common stock offered pursuant to this
prospectus, to receive options to purchase sufficient additional shares of
common stock (but not in excess of 300,000 shares) to maintain his percentage
interest at 5% of the outstanding common stock (determined as if such options
were issued). The options will be issued under our stock option plan with a
term of ten years vesting ratably on a monthly basis over four years, subject
to accelerated vesting in the case of certain changes of control or in the
event that the average closing sale prices of the common stock over a 90
trading day period trades above specified targets. The exercise price of the
options will be issued at the fair market value on the date of grant, which
will be deemed to be the closing sale price of the shares of common stock on
the day before the date of grant.
John A. Shields Director Compensation - John A. Shields, who has been
Chairman of the Board of Directors of the Company since July 1996, was
recently granted by our Board of Directors a payment of $60,000 in recognition
of significant efforts made by him on our behalf over the past year, including
in connection with negotiating a settlement of certain disputes with our
founders and related transition issues, as well as increase in his monthly
compensation from us from $1,000 to $5,000 effective as of May 1, 2002. Mr.
Shields has received, and expressed his preference to continue to receive, all
such payments in the form of options to purchase common stock. The options,
consistent with past practice, are fully vested, have a term of ten years and
are granted at an exercise price equal to 85% of the fair market value on the
date of grant (deemed to be the closing sale price of the shares of common
stock on the day before the date of grant) such that the aggregate spread in
the options on such date will be equal to the amount of his monthly
compensation.
Capitalization - As of the date of this prospectus, we have 25,047,895
outstanding shares of common stock and 3,133,950 options to purchase common
stock at exercise prices ranging from $3.13 per share to $26.50 per share. The
number of outstanding shares reflects the shares issued to our founders as
part of a settlement agreement with them and the number of options reflects
grants of director options for all meetings through the date of this
prospectus and grants of options to Mr. Shields in respect of his monthly
compensation through May 2002. Assuming that a total of 4,450,000 shares of
common stock are sold pursuant to this prospectus, Mr. Odak would be granted
options to purchase an additional ______ shares of common stock with the terms
described above.
Possible New Severance Agreements - In recognition of their value in
retaining valuable employees, our Board of Directors has approved in principle
the granting of severance agreements to a group of key members of our
management, other than Mr. Odak, whose employment agreement already provides
for severance arrangements. The terms of the proposed severance agreements are
under review, but are expected to be finalized and implemented within the next
several months.
Refinancing of Credit Facility - Our $125,000,000 bank credit facility
matures in August 2003 and contains some covenants which are more restrictive
on our operational and financial flexibility than we believe could be achieved
in a new facility. Following the sale of the shares of common stock offered by
this prospectus, we hope to arrange and issue up to $100,000,000 in senior
and/or subordinated debt, the proceeds of which will be used, together with
operating cash and a portion of the proceeds from the sale of the shares of
common stock offered by this prospectus, to refinance our existing facility.
We have begun the process of investigating possible debt refinancing
opportunities, but there can be no assurance as to whether the debt markets
will be receptive to a refinancing on terms that would be attractive to us or
as to the timing of arranging any such refinancing.
New Accounting Standard - Goodwill and Other Intangible Assets
Effective December 30, 2001, the Company implemented SFAS No. 142,
Goodwill and Other Intangible Assets. SFAS No. 142 was issued in July 2001,
supersedes Accounting Principles Bulletin No. 17, Intangible Assets, and is
effective for fiscal years beginning after December 15, 2001. SFAS No. 142
primarily addresses the accounting for goodwill and intangible assets
subsequent to their initial recognition. SFAS No. 142 (1) prohibits the
amortization of goodwill and indefinite-lived intangible assets, (2) requires
testing of goodwill and indefinite-lived intangible assets on an annual basis
for impairment (and more frequently if the occurrence of an event or
circumstance indicates an impairment), (3) requires that reporting units be
identified for the purpose of assessing potential future impairments of
goodwill and (4) removes the 40-year limitation on the amortization period of
intangible assets that have finite lives.
In conjunction with its purchase acquisitions, the Company historically
had recorded goodwill at the store level; however, based on the Company's
recent consolidation of its brands to increase synergy and awareness, the
Company has changed its goodwill accounting policy and accordingly has
assigned the carrying value of its goodwill to one reporting unit at the
enterprise level to recognize goodwill for the brand, as opposed to the past
practice of recording goodwill at the store level. By June 29, 2002, the
Company plans to complete the two-step process prescribed by SFAS No. 142 for
(1) testing for impairment and (2) determining the amount of impairment loss
related to goodwill associated with its enterprise-level reporting unit. The
Company anticipates an annual decrease in amortization of goodwill of
approximately $3.0 million and a corresponding annual increase to net income
of $1.8 million. The Company intends to test goodwill for impairment annually
or more frequently if the occurrence of an event or circumstance indicates
potential impairment.
Also, upon implementation of SFAS No. 142, the Company identified
intangible assets related to leasehold interest resulting from store lease
agreements with a carrying value of approximately $7.9 million at December 30,
2001. The Company determined that there is no indication of impairment of
these assets and that the average 20-year life assigned to these assets is
appropriate. Going forward, the Company will test these intangibles for
impairment annually or more frequently if the occurrence of an event or
circumstance indicates impairment.
The amortization of intangibles expense (net of tax) and net income
(loss) available to common stockholders are as follows (in thousands):
THREE MONTHS ENDED FISCAL YEAR
March 30, 2002 March 31, 2001 2001 2000 1999
Goodwill amortization $ -- $ 485 $ 1,883 $ 1,967 $ 1,783
Leasehold interest $ 73 $ 58 $ 270 $ 254 $ 82
amortization
Net income (loss) available $668 $(118) $(43,912) $ (15,021) $ 12,488
to common stockholders
The following table illustrates net income (loss) available to common
stockholders as if SFAS No. 142 had been implemented as of January 3, 1999 (in
thousands):
THREE MONTHS
ENDED FISCAL YEAR
-------------------------------- ---------------------------------------
March March
30, 31,
2002 2001 2001 2000 1999
-------------- --- ------------- -- ----------- --- ---------- -- ---------
Reported net income (loss)
available
to common stockholders $ 668 $ (118) $(43,912) $(15,021) $ 12,488
Goodwill amortization --- 485 1,883 1,967 1,783
-------------- ------------- ----------- ---------- ---------
Adjusted net income available
to common stockholders $ 668 $ 367 $(42,029) $(13,054) $ 14,271
============== ============= =========== ========== =========
EARNINGS PER SHARE -
BASIC AND DILUTED
Reported net income (loss)
available
to common stockholders $ 0.03 $ $ $ $
0.00 1.80 0.65 0.53
Goodwill amortization --- 0.02 0.08 0.08 0.08
-------------- ------------- ----------- ---------- ---------
Adjusted net income available
to common stockholders $ 0.03 $ $ $ $
0.02 (1.72) (0.57) 0.61
============== ============= =========== ========== =========
During the three months ended March 30, 2002, amortization of intangible
assets expense was $118,000. The estimated amortization of intangible assets
for each of the five fiscal years ending in fiscal 2006 is as follows (in
thousands):
Fiscal Amortization Expense
Year
----------------------- ------------------------
2002 $ 472,000
2003 472,000
2004 472,000
2005 472,000
2006 472,000
USE OF PROCEEDS
After payment of approximately $____ in expenses, we expect to have net
proceeds of approximately $____ from the sale of the shares of the common
stock offered by this prospectus. The net proceeds from the sale of the common
stock offered pursuant to this prospectus will be used for general corporate
purposes, including capital expenditures, purchases of equipment and general
operations, with approximately 65% of such proceeds used for the funding of
new store expansion plans (as outlined in our annual report on Form 10-K for
the year ended December 29, 2001), approximately 30% of such proceeds used for
remodeling of certain of our 102 existing stores and maintenance of store
capital equipment and other leasehold improvements, and approximately 5% of
such proceeds used for the development of information systems and
infrastructure aimed at reducing costs and improving operating margins. If
necessary, a portion of the net proceeds also may be used in connection with
the refinancing of our existing bank credit facility as described above.
PLAN OF DISTRIBUTION
All of the shares of the common stock offered pursuant to this prospectus
will be sold by us directly to investors to be identified. It is expected that
the price will be established by reference to the market prices prevailing at
the times of sale, at prices related to these prevailing market prices or at
negotiated prices. Any such price may be changed from time to time.
We have engaged J.P. Morgan Securities Inc. ("JPMorgan") to act as the
sole placement agent on a best efforts basis for this offering. JPMorgan's
engagement expires on March 26, 2003 unless earlier terminated by either
JPMorgan or us at any time upon ten days' prior written notice. JPMorgan is
affiliated with J.P. Morgan Partners (SBIC), LLC, which holds approximately
9.4% of our outstanding common stock and has a representative on our Board of
Directors.
As compensation for its services as the sole placement agent, we have
agreed to pay JPMorgan a fee equal to 5.0% of the value of the common stock
sold under this prospectus (or 3.25% of the value of the common stock in the
case of common stock sold to certain investors whom we had identified as
prospective investors prior to JPMorgan's engagement), with a minimum
guaranteed fee of $1,250,000. We also have agreed to reimburse JPMorgan up to
$50,000 (or such greater amount as we specifically may approve) for all of its
reasonable out-of-pocket costs and expenses in connection with its engagement.
In connection with JPMorgan's engagement, we also have agreed to
indemnify and hold harmless JPMorgan, its affiliates and their respective
officers, directors, employees, agents and controlling persons (each an
"Indemnified Person") from and against any and all losses, claims, damages,
liabilities and expenses, joint or several, to which any such Indemnified
Person may become subject arising out of or in connection with its engagement,
or any claim, litigation, investigation or proceedings relating to the
foregoing regardless of whether any of such Indemnified Persons is a party
thereto, and to reimburse such Indemnified Persons for any legal or other
out-of-pocket expenses as they are incurred in connection with investigating,
responding to or defending any of the foregoing, provided that the foregoing
indemnification will not, as to any Indemnified Person, apply to losses,
claims, damages, liabilities or expenses to the extent that they are finally
judicially determined to have resulted from the gross negligence or willful
misconduct of such Indemnified Person.
The investors purchasing shares of common stock offered by this
prospectus may have other business relationships with us and our subsidiaries
or affiliates in the ordinary course of business, and may already own common
stock.
We are bearing all costs relating to the registration of the shares
offered by this prospectus (other than fees and expenses, if any, of counsel
or other advisors to the private investors).
LEGAL MATTERS
The validity of the common stock being offered hereby will be passed upon
by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York.
EXPERTS
The financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-K for the year ended December 29, 2001 have been
so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
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 10-K of Wild Oats Markets,
Inc. for the year ended December 29, 2001 is incorporated by reference in
reliance on Ernst & Young LLP's report, given on their authority as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
You should rely only on the information provided or incorporated by
reference in this prospectus. We have not authorized anyone to provide you
with any different information. This prospectus does not constitute an offer
to sell, or a solicitation of an offer to buy, these securities in any state
where the offer or sale is prohibited. You should not assume that the
information in this prospectus or any prospectus supplement is accurate as of
any date other than the date on the front of the document.
We are a reporting company and file annual, quarterly and current
reports, proxy statements and other information with the Securities and
Exchange Commission, or SEC. We have filed with the SEC a registration
statement on Form S-3 under the Securities Act with respect to the shares of
common stock we are offering under this prospectus. This prospectus does not
contain all of the information set forth in the registration statement and the
exhibits to the registration statement. For further information regarding our
company and the common stock being offered under this prospectus, we refer you
to the registration statement and the exhibits and schedules filed as a part
of the registration statement. You may read and copy the registration
statement, as well as our reports, proxy statements and other information
filed with the SEC, at the SEC's Public Reference Room at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549. You can request copies of these
documents by writing to the SEC and paying a fee for the copying cost. Please
call the SEC at 1-800-SEC-0330 for more information about the operation of the
public reference rooms. Our SEC filings are also available at the SEC's web
site at "http://www.sec.gov." In addition, you can read and copy our SEC
filings at the office of the National Association of Securities Dealers, Inc.
at 1735 K Street, N.W., Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" information that we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus. Information in this prospectus
supersedes information incorporated by reference that we filed with the SEC
prior to the date of this prospectus, while information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference into this registration statement and prospectus the
documents listed below and any future filings we will make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of the
initial registration statement but prior to effectiveness of the registration
statement and after the date of this prospectus but prior to the termination
of the offering of the shares covered by this prospectus.
The following documents filed with the SEC are incorporated by reference
in this prospectus:
1. Our annual report on Form 10-K for the year ended December 29, 2001;
2. Our quarterly report on Form 10-Q for the quarter ended March 30, 2002;
3. The description of our common stock set forth in our registration
statement on Form 8-A, filed with the SEC on October 17, 1996; and
4. The description of the rights to purchase our Series A junior
participating preferred stock set forth in our registration statement
on Form 8-A, filed with the SEC on May 21, 1998.
We will furnish without charge to you, on written or oral request, a copy
of any or all of the documents incorporated by reference, including exhibits
to these documents. You should direct any requests for documents to Wild Oats
Markets, Inc., Attention: Chief Financial Officer, 3375 Mitchell Lane,
Boulder, Colorado 80301, telephone: (303) 440-5220.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses payable by the
registrant in connection with the offering of the common stock being
registered, other than placement agent fees, the amount of which will depend
upon the aggregate gross proceeds received. All the amounts shown are
estimates, except for the registration fee. These expenses will be borne by
the registrant.
SEC registration fee $ $4,258.37
Accounting fees and expenses 15,500.00
Legal fees and expenses 50,000.00
Miscellaneous expenses 5,000.00
---------------
Total $ 74,758.37
Item 15. Indemnification of Officers and Directors.
Section 102(b)(7) of the Delaware General Corporation Law permits a
Delaware corporation to limit the personal liability of its directors in
accordance with the provisions set forth therein. The Certificate of
Incorporation of the registrant provides that the personal liability of its
directors shall be limited to the fullest extent permitted by applicable law.
Section 145 of the Delaware General Corporation Law permits Delaware
corporations to indemnify directors, officers, employees or agents against
expenses, judgments and fines reasonably incurred and against certain other
liabilities in connection with any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
by reason of the fact that such person was or is a director, officer, employee
or agent of the corporation. The Certificate of Incorporation and the Bylaws
of the registrant provide for indemnification to the fullest extent permitted
by applicable law. The Certificate of Incorporation limits the liability of
the registrant's directors for monetary damages for breaches of the directors'
fiduciary duty of care. In addition, the Certificate of Incorporation requires
the registrant to indemnify its directors, officers, employees and agents
serving at the registrant's request against expenses, judgment (including
derivative actions), fines and amounts paid in settlement. This
indemnification is limited to actions taken in good faith in the reasonable
belief that the conduct was lawful and in or not opposed to the registrant's
interests. The Bylaws provide for the indemnification of directors and
officers in connection with civil, criminal, administrative or investigative
proceedings when acting in their capacities as agents of the registrant. In
addition, the registrant has entered into agreements with its directors and
certain executive officers that require it to indemnify such persons against
expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred (including expenses of a derivative action) in connection
with any proceeding, whether actual or threatened, to which any such person
may be made a party by reason of the fact that such person is or was our
director or officer, provided that such person's conduct was not knowingly
fraudulent or deliberately dishonest and did not constitute willful
misconduct. The registrant also maintains an officers and directors liability
insurance policy.
The foregoing may reduce the likelihood of a derivative litigation
against the registrant's directors and executive officers and may discourage
or deter stockholders or management from suing directors or executive officers
for breaches of their duty of care, even though such actions, if successful,
might otherwise benefit the registrant and its stockholders.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits
Exhibit Number
Description of Document
---------------- ---------------------------------------------------------------------------------------------------
4 (i).1.(a) Amended and Restated Certificate of Incorporation of Wild Oats (1)
4 (i).1.(b) Certificate of Correction to Amended and Restated Certificate of Incorporation of Wild Oats (1)
4 (i).1.(c) Certificate of Amendment to Amended and Restated Certificate of Incorporation of Wild Oats (3)
4 (ii).1 Amended and Restated By-Laws of Wild Oats (1)
4.2 Specimen stock certificate (2)
4.3 Rights Agreement dated May 22, 1998 between Wild Oats and Norwest Bank Minnesota (4)
4.4 Amendment No. 1 to Rights Agreement dated February 26, 2002 between Wild Oats and Wells Fargo
Bank, N.A. (5)
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP**
23.1 Consent of PricewaterhouseCoopers LLP*
23.2 Consent of Ernst & Young LLP*
23.3 Consent of Skadden, Arps, Slate, Meagher & Flom LLP. Reference is made to Exhibit 5.1
24.1 Power of Attorney*
--------------
* Filed herewith.
** To be filed by amendment.
(1) Incorporated by reference to Wild Oats' Annual Report on Form 10-K for the year ended December 28, 1996 (File Number
0-21577).
(2) Incorporated by reference to Wild Oats' Registration Statement on Form S-1 (File Number 333-11261).
(3) Incorporated by reference to Wild Oats' Registration Statement on Form S-3 (File Number 333-88011).
(4) Incorporated by reference to Wild Oats' Registration Statement on Form S-8 (File No. 333-66347).
(5) Incorporated by reference to Wild Oats' Annual Report on Form 10-K for the year ended December 29, 2001 (File Number
0-21577).
Item 17. Undertakings
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to section 13(a)
or section 15(d) of the Exchange Act that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officers or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boulder, State of Colorado, on June 7, 2002.
Wild Oats Markets, Inc.
Date: June 7, 2002 By: /s/ Edward F. Dunlap
-----------------------------------------
Edward F. Dunlap
Executive Officer and Chief Financial Officer
(Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities Act, this registration
statement has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
By: *
----------------
Perry D. Odak Chief Executive Officer, President June 7, 2002
and Director (Principal Executive
Officer)
By: *
----------------
Edward F. Dunlap Chief Financial Officer (Principal June 7, 2002
Financial and Accounting Officer)
By: *
----------------
John A. Shields Chairman June 7, 2002
By: *
----------------
David M. Chamberlain Vice Chairman June 7, 2002
By: *
----------------
Brian K. Devine Director June 7, 2002
By:
David L. Ferguson Director
By:
James B. McElwee Director
By: *
----------------
Mo J. Siegel Director June 7, 2002
*By: /s/ Freya R. Brier Attorney in Fact June 7, 2002
-------------------------------------------------
Freya R. Brier, as Attorney in Fact
INDEX TO EXHIBITS
Exhibit Number Description of Document
---------------- ---------------------------------------------------------------------------------------------------
4 (i).1.(a) Amended and restated Certificate of Incorporation of Wild Oats (1)
4 (i).1.(b) Certificate of Correction to Amended and Restated Certificate of Incorporation of Wild Oats (1)
4 (i).1.(c) Certificate of Amendment to Amended and Restated Certificate of Incorporation of Wild Oats (3)
4 (ii).1 Amended and Restated By-Laws of Wild Oats (1)
4.2 Specimen stock certificate (2)
4.3 Rights Agreement dated May 22, 1998 between Wild Oats and Norwest Bank Minnesota (4)
4.4 Amendment No. 1 to Rights Agreement dated February 26, 2002 between Wild Oats and Wells Fargo
Bank, N.A. (5)
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP**
23.1 Consent of PricewaterhouseCoopers LLP*
23.2 Consent of Ernst & Young LLP*
23.3 Consent of Skadden, Arps, Slate, Meagher & Flom LLP. Reference is made to Exhibit 5.1
24.1 Power of Attorney*
--------------
* Filed herewith.
**To be filed by amendment.
(1) Incorporated by reference to Wild Oats' Annual Report on Form 10-K for the year ended
December 28, 1996 (File Number 0-21577).
(2) Incorporated by reference to Wild Oats' Registration Statement on Form S-1 (File Number 333-11261).
(3) Incorporated by reference to Wild Oats' Registration Statement on Form S-3 (File Number 333-88011).
(4) Incorporated by reference to Wild Oats' Registration Statement on Form S-8 (File No. 333-66347).
(5) Incorporated by reference to Wild Oats' Annual Report on Form 10-K for the year ended
December 29, 2001 (File Number 0-21577)
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-3 of our report dated March 25, 2002 relating
to the financial statements and financial statement schedule, which appears in
Wild Oats Markets, Inc.'s Annual Report on Form 10-K for the year ended
December 29, 2001. We also consent to the reference to us under the heading
"Experts" in such Registration Statement.
PricewaterhouseCoopers LLP
Denver, Colorado
June 6, 2002
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts"
and to the use of our report dated November 17, 1999, with respect to the
financial statements of Sun Harvest Farms, Inc. as of September 28, 1999,
December 29, 1998 and 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, included in the Annual Report on Form 10-K of Wild
Oats Markets, Inc. for the year ended December 29, 2001, which is incorporated
by reference in the Registration Statement (Form S-3, filed on June 7, 2002)
of Wild Oats Markets, Inc. for the registration of 3,250,000 shares of its
common stock.
/s/ Ernst & Young LLP
Ernst & Young LLP
San Antonio, Texas
June 6, 2002
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Edward F. Dunlap and Freya R. Brier,
and each or any one of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to (i) sign the Registration
Statement on Form S-3 pursuant to which Wild Oats Markets, Inc. (the
"Company") will register 3,250,000 shares of the Company's common stock and
(ii) sign any and all amendments (including post-effective amendments) to the
Registration Statement and any abbreviated registration statement in
connection with the Registration Statement pursuant to Rule 462(b) under the
Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or
their or his substitutes or substitute, may lawfully do or cause to be done by
virtue hereof.
Signature Title Date
By: /s/ Perry D. Odak
Perry D. Odak Chief Executive Officer, President June 7, 2002
and Director
By: /s/ Edward F. Dunlap
Edward F. Dunlap Chief Financial Officer June 7, 2002
By: /s/ John A. Shields
John A. Shields Chairman June 7, 2002
By: /s/ David M. Chamberlain
David M. Chamberlain Vice Chairman June 7, 2002
By: /s/ Brian K. Devine
Brian K. Devine Director June 7, 2002
By:
David L. Ferguson Director
By:
James B. McElwee Director
By: /s/ Mo J. Siegel
Mo J. Siegel Director June 7, 2002