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January 14, 2002
BOULDER, Colo.--Wild Oats Markets Inc.announced that Michael Gilliland and his wife, Elizabeth Cook, resigned from thecompanys board of directors on Dec. 6 to pursue outside interests anddiversify their investment portfolio. The couple founded the natural foodscompany in 1987, with their first store located here.
In recent years, Gilliland and his wife had limited their day-to-dayinvolvement with the company (www.wildoats.com).In mid-2001, Gilliland stepped down as chief executive officer (CEO), and Cookleft her position as executive vice president. We are pleased with the newmanagement and the progress they have made in improving the financialperformance of the company, Gilliland said in the announcement aboutresigning from the board. While we regret that other time commitments preventour continued involvement, we believe Wild Oats is well-positioned to maximizethe growth potential of this industry going forward.
Perry Odak, who joined Wild Oats in March 2001 as president, CEO and a memberof the board, wished the couple well in their future endeavors. MikeGilliland and Libby Cook built this company on a vision that has led tosignificant success over the years, and we thank them for their service asleaders of this company and members of the board.
While Wild Oats is transitioning to a new business strategy, there willlikely be some impact from increased advertising costs and in-store execution,according to Scott Van Winkle, CFA and vice president of Adams, Harkness &Hill (www.ahh.com), an investment bank basedin San Francisco. Better sales come at a cost, and that cost is seen as aninvestment in the business, he stated.
When the company hired Perry Odak, it was kind of expected that [Gillilandand Cook] were going to step down eventually, he added. In addition to thechanges on the board, the company still plans to make changes in operations,including closing several stores in 2002. Whenever you do a turnaround, youfind real estate you dont like. He added that the organic foods categorycontinues to do well during these troubled times. I think organic foodsprovide a level of perceived security.
In the November report on the companys third quarter (3Q01) ended Sept.29, although net sales rose 7.2 percent to $222.2 million, the companyexperienced a net loss of $2.9 million. According to a company spokesperson, thecouple owned 11 percent of the companys stock and, with Gilliland and Cook nolonger on the board, the couple can now sell the shares. However, they willstill have a financial link to the company: in early fiscal 2001, the husbandand wife team loaned $2.0 million to the company, which bears an interest rateof 9.0 percent and is payable on demand.
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