Sprouts Farmers Market 2013 Annual Report Download - page 39

Table of Contents
payments on our debt obligations in the future would require us to refinance all or a portion of our indebtedness on or before
maturity, sell assets, delay capital expenditures, or seek additional equity investment.
Covenants in our debt agreements restrict our operational flexibility.
The agreement governing our Credit Facility contains usual and customary restrictive covenants relating to our management
and the operation of our business, including the following:
Our Credit Facility also requires us to maintain a specified financial ratio at the end of any fiscal quarter at any time the
Revolving Credit Facility is drawn. Our ability to meet this financial ratio, if applicable, could be affected by events beyond our
control. Failure to comply with any of the covenants under our Credit Facility could result in a default under the facility, which could
cause our lenders to accelerate the timing of payments and exercise their lien on substantially all of our assets, which would have a
material adverse effect on our business, operating results, and financial condition.
We incur substantial costs as a result of being a public company.
As a public company, we are subject to public company reporting obligations under the Exchange Act, and the rules and
regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act of 2002 (referred to as the
“Sarbanes-Oxley Act”), the Dodd-Frank Act of 2010, and the listing requirements of NASDAQ Global Select Market. We incur
significant legal, accounting, and other expenses as a public company, including costs resulting from our public company reporting
obligations and maintenance of corporate governance practices. Our management and other personnel devote a substantial
amount of time to ensure that we comply with all of these requirements. The reporting requirements, rules, and regulations require
substantial legal and financial compliance costs and will make some activities more time-consuming and costly than when we were
a private company.
Our management has limited experience managing a public company, and our current resources may not be sufficient to
fulfill our public company obligations.
As a public company, we are subject to various regulatory requirements, including those of the SEC and the NASDAQ Global
Select Market. These requirements include record keeping, financial reporting and corporate governance rules and regulations. Our
management team has limited experience in managing a public company and, historically, has not had the resources typically
found in a public company. Our internal infrastructure may not be adequate to support our increased reporting obligations, and we
may be unable to hire, train or retain necessary staff and may initially be reliant on engaging outside consultants or professionals to
overcome our lack of experience. Our business could be adversely affected if our internal infrastructure is inadequate, we are
unable to engage outside consultants, or are otherwise unable to fulfill our public company obligations.
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incurring additional indebtedness;
• making certain investments;
• merging, dissolving, liquidating, consolidating, or disposing of all or substantially all of our assets;
• paying dividends, making distributions, or redeeming capital stock;
• entering into transactions with our affiliates; and
•
granting liens on our assets.