Sprouts Farmers Market 2013 Annual Report Download - page 75

Table of Contents
For 2012, net cash provided by operating activities increased $32.0 million to $84.4 million, compared to $52.4 million during
2011, primarily as a result of our increased scale of operations following the Transactions and new store openings. During 2012, we
opened nine stores, acquired 37 stores in the Sunflower Transaction and closed one store. In addition to an increase in the number
of stores we operate, during 2012 we improved our gross margin, leveraged fixed direct store expenses through comparable store
sales growth and leveraged corporate expenses through store growth, comparable store sales growth and synergies achieved from
integration of the Transactions. These factors were partially offset by an $18.5 million increase in interest payments and a $10.1
million increase in acquisition and integration costs during 2012 compared to 2011.
Investing Activities
Net cash used in investing activities decreased to $86.2 million for 2013 compared to $166.7 million for 2012. The decrease in
cash used for investing activities is primarily related to the $130.2 million cash impact of the Sunflower acquisition in 2012, offset by
capital expenditures for increased new store openings, store remodels and an increase in maintenance capital expenditures related
to the increased scale of operations following the Sunflower Transaction and a decrease in proceeds from the disposal of property
and equipment of $8.7 million.
For 2012, net cash used in investing activities decreased $93.8 million to $166.7 million, compared to $260.5 million during
2011, primarily as a result of a $103.0 million decrease in payments for business combinations. We made $129.9 million of
payments during 2012 in connection with the Sunflower Transaction compared to $232.9 million of cash payments during 2011 in
connection with the Henry’s Transaction. Additionally, we generated $9.7 million in proceeds from disposal of property and
equipment during 2012. These factors were partially offset by an $18.9 million increase in capital expenditures during 2012
compared to 2011, primarily as a result of an increase in new store openings and an increase in maintenance capital expenditures
as a result of store growth.
Capital expenditures consist primarily of investments in new stores, including leasehold improvements and store equipment,
the re-branding of Henry’s and Sunflower stores following the Transactions, annual maintenance capital expenditures to maintain
the appearance of our stores, sales enhancing initiatives and other corporate investments.
We expect capital expenditures of $110 million to $120 million in 2014, net of estimated landlord tenant improvement, to fund
investments in new stores to be opened in 2014 and early 2015, remodels, maintenance capital expenditures and corporate capital
expenditures. We expect to fund our capital expenditures with cash on hand, cash generated from operating activities and, if
required, borrowings under our Credit Facility.
Financing Activities
Net cash used in financing activities was $63.9 million for 2013 as compared to cash provided by financing activities of $134.9
million for 2012. The increase in cash used in financing activities of $198.8 million is related to the $295.9 million of dividend and
anti-dilution payments made to stockholders and option holders, an increase on payments of debt, net of new debt issued in 2013,
of $263.4 million and $4.2 million in IPO expenses. These outflows were partially offset by inflows for an increase of $346.6 million
for stock issued, including stock issued in the IPO and stock option exercises, and an increase of $17.7 million of excess tax benefit
from stock option exercises and antidilution payments.
For 2012, net cash provided by financing activities decreased $82.8 million to $134.9 million compared to $217.7 million
during 2011, primarily as a result of a reduction in borrowings and
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