Sprouts Farmers Market 2014 Annual Report Download - page 56

Net income
Fiscal 2013 Fiscal 2012 Change % Change
(dollars in thousands)
As reported:
Net income ........................... $51,326 $19,500 $31,826 163%
Percentage of sales ................... 2.1% 1.1% 1.0%
Pro forma:
Net income ........................... $51,326 $24,526 $26,800 109%
Percentage of sales ................... 2.1% 1.2% 0.9%
Net income growth was attributable to strong business performance driven by comparable store sales
and resulting operating leverage, strong performance of new stores opened, and reduced interest expense.
Unaudited Supplemental Fiscal 2012 Pro Forma Information
The comparability of our results of operations is affected for the periods presented in this
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” by the
Sunflower Transaction. To supplement the discussion of our historical results of operations for fiscal 2013
and fiscal 2012, we have included unaudited supplemental pro forma condensed consolidated statement of
operations information for fiscal 2012.
The following unaudited pro forma condensed consolidated financial information presents our historical
results of operations and the results of operations of Sunflower for fiscal 2012 after giving effect to the
Transaction and related financing as well as other adjustments as described in the accompanying notes, as
if the Sunflower Transaction occurred on January 2, 2012, the first day of fiscal 2012.
The historical financial information has been adjusted to give pro forma effect to events that are
directly attributable to the Sunflower Transaction, have an ongoing effect on our statement of operations
and are factually supportable. Our unaudited pro forma condensed consolidated financial information and
explanatory notes present how our financial statements may have appeared had the business actually
been combined and had our capital structure reflected the above transaction as of the dates noted above.
The unaudited pro forma condensed consolidated statement of operations shows the impact on the
combined statement of operations of the acquisition method of accounting under Financial Accounting
Standards Board ASC 805, Business Combinations. Under the acquisition method of accounting, the total
purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair
values as of the acquisition date. The excess purchase price over the amounts assigned to tangible and
intangible assets acquired and liabilities assumed is recognized as goodwill.
The unaudited pro forma condensed consolidated financial information was prepared in accordance
with Article 11 of Regulation S-X, using the assumptions set forth in the notes to the unaudited pro forma
condensed consolidated financial information. The following unaudited pro forma condensed consolidated
financial information is presented for illustrative purposes only and does not purport to reflect the results
the consolidated company may achieve in future periods or the historical results that would have been
obtained had the above transaction been completed as of January 2, 2012. The unaudited pro forma
condensed consolidated financial information also does not give effect to the potential impact of current
financial conditions, any anticipated synergies, operating efficiencies or cost savings that may result from
the Sunflower Transaction. Furthermore, the unaudited pro forma condensed consolidated statement of
operations does not include certain nonrecurring charges and the related tax effects which result directly
from the Sunflower Transaction as described in the notes to the unaudited pro forma condensed
consolidated financial information.
The unaudited pro forma condensed consolidated financial information is derived from and should be
read in conjunction with our historical financial statements and related notes included elsewhere in this
Annual Report on Form 10-K.
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