Sprouts Farmers Market 2014 Annual Report Download - page 60

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(4) Period includes $9.5 million of pre-tax loss on extinguishment of debt related to the $340.0 million paydown on the Term
Loan using proceeds from the IPO and $3.2 million pre-tax for team member IPO bonuses paid.
(5) Period includes $8.2 million of pre-tax loss on extinguishment of debt related to our April 2013 Refinancing.
Liquidity and Capital Resources
The following table sets forth the major sources and uses of cash for each of the periods set forth
below, as well as our cash and cash equivalents at the end of each period:
Fiscal 2014 Fiscal 2013 Fiscal 2012
Cash and cash equivalents at end of period ........ $130,513 $ 77,652 $ 67,211
Cash provided by operating activities ............. $181,218 $160,588 $ 84,431
Cash used in investing activities .................. $(126,671) $ (86,291) $(166,703)
Cash provided by (used in) financing activities ...... $ (1,686) $ (63,856) $ 134,941
Since inception, we have financed our operations primarily through cash generated from our
operations, private placements of our equity, our IPO and borrowings under our current and former credit
facilities. Our primary uses of cash are for purchases of inventory, operating expenses, capital
expenditures primarily for opening new stores, and debt service. We also used cash for the Sunflower
Transaction in 2012 and 2011. In 2014, we generated $181.2 million in operating cash flows, ended 2014
with $130.5 million of cash and cash equivalents and had no amounts drawn under our Revolving Credit
Facility.
We believe that our existing cash and cash equivalents, and cash anticipated to be generated by
operations will be sufficient to meet our anticipated cash needs for at least the next 12 months. Our future
capital requirements will depend on many factors, including new store openings, remodel and maintenance
capital expenditures at existing stores, store initiatives and other corporate capital expenditures and
activities. Our cash and cash equivalents position benefits from the fact that we generally collect cash from
sales to customers the same day or, in the case of credit or debit card transactions, within days from the
related sale. In the event that additional financing is required from outside sources, we may not be able to
raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our
business, results of operations and financial condition would be adversely affected.
Operating Activities
Net cash provided by operating activities increased $20.6 million to $181.2 million for 2014 compared
to $160.6 million for 2013. The increase in 2014 includes the impact of stores opened since 2013. In
addition to the increase in the number of stores we operate, we leveraged occupancy, buying, utilities and
fixed direct store expenses with comparable store sales growth. We also experienced a decrease in
interest expense due to reductions in balances from a payoff made with IPO proceeds and other voluntary
repayments and lower interest rate, including a 0.5% lower rate due to our IPO.
Net cash provided by operating activities increased $76.2 million to $160.6 million for 2013 compared
to $84.4 million for 2012, primarily related to our increased scale of operations following the Sunflower
Transaction and new store openings. Between these fiscal periods, we opened 19 stores. Additionally,
2013 includes the full impact of the acquired Sunflower stores. In addition to the increase in the number of
stores we operate, we leveraged fixed direct store expenses through comparable store sales growth and a
decrease in acquisition and integration costs of $19.5 million for the comparative periods. These increases
were partially offset by a $5.7 million increase in interest payments.
Investing Activities
Net cash used in investing activities was $126.7 million for 2014 compared to $86.3 million for 2013.
The increase in cash used for investing activities is primarily related to timing of payments on capital
expenditures for new store openings, store remodels and maintenance capital expenditures.
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