UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_____________________
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 20, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _________
Commission File Number 1-3657
_____________________
WINN-DIXIE STORES, INC.
(Exact name of registrant as specified in its charter)
Florida 59-0514290
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
5050 Edgewood Court, Jacksonville, Florida 32254-3699
(Address of principal executive offices) (Zip Code)
(904) 783-5000
(Registrant's telephone number, including area code)
Unchanged
(Former name, former address and former fiscal year, if changed since last
report)
_____________________
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
As of September 27, 1995, there were 75,305,083 shares outstanding
of the registrant's common stock, $1 par value.
<PAGE>
WINN-DIXIE STORES, INC.
FORM 10-Q
TABLE OF CONTENTS
Part I: Financial Information
Page
Condensed Consolidated Statements of Earnings
(Unaudited), For the 12 Weeks Ended
September 20, 1995 and September 21, 1994 1
Condensed Consolidated Balance Sheets (Unaudited),
September 20, 1995 and June 28, 1995 2
Condensed Consolidated Statements of Cash Flows
(Unaudited), For the 12 Weeks Ended
September 20, 1995 and September 21, 1994 3
Notes to Condensed Consolidated Financial Statements
(Unaudited) 4-5
Management's Discussion and Analysis of Financial
Condition and Results of Operations 6-8
Part II: Other Information
Item 4. Submission of Matters to a Vote of Security Holders 9-10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 10
Computation of Earnings Per Share Exhibit 11.1
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Amounts in thousands except per share data
For the 12 Weeks Ended
Sept. 20, 1995 Sept. 21, 1994
-------------- --------------
Net sales $ 2,934,958 2,590,364
Cost of sales 2,257,399 1,999,818
--------- ---------
Gross profit 677,559 590,546
Operating & administrative expenses 626,636 547,252
--------- ---------
Operating income 50,923 43,294
Cash discounts & other income 27,931 22,676
Interest expense (8,274) (3,400)
--------- ---------
Earnings before income taxes 70,580 62,570
Provision for income taxes 24,703 22,525
--------- ---------
Net earnings $ 45,877 40,045
========= =========
Earnings per share $ 0.61 0.54
========= =========
Dividends per share $ 0.28 0.26
========= =========
See accompanying notes to Condensed Consolidated Financial Statements.
Page 1
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Amounts in thousands
ASSETS Sept. 20, 1995 June 28, 1995
-------------- -------------
Cash and cash equivalents $ 25,773 30,414
Trade and other receivables 134,864 151,912
Associate stock loans 9,062 10,615
Merchandise inventories less LIFO reserve
of $218,485 ($212,485 at June 28, 1995) 1,171,370 1,159,584
Prepaid expenses 83,790 103,135
-------------- -------------
Total current assets 1,424,859 1,455,660
-------------- -------------
Investments and other assets 102,573 100,284
Prepaid income taxes 26,500 29,025
Net property, plant and equipment 921,575 897,823
-------------- -------------
Total assets $ 2,475,507 2,482,792
============== =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 519,263 555,551
Reserve for insurance claims and self-insurance 55,385 59,373
Accrued wages and salaries 74,829 77,396
Accrued rent 57,505 54,888
Accrued expenses 99,297 130,285
Short-term borrowings 157,000 130,000
Current obligations under capital leases 3,298 3,298
Income taxes 47,138 19,331
-------------- -------------
Total current liabilities 1,013,715 1,030,122
-------------- -------------
Obligations under capital leases 75,360 77,653
Defined benefit plan 29,578 28,328
Reserve for insurance claims and self-insurance 113,134 103,384
Other liabilities 2,004 2,098
Shareholders' equity:
Common stock 75,302 75,561
Retained earnings 1,166,414 1,165,646
-------------- -------------
Total shareholders' equity 1,241,716 1,241,207
-------------- -------------
Total liabilities and shareholders' equity $ 2,475,507 2,482,792
============== =============
See accompanying notes to Condensed Consolidated Financial Statements
Page 2
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Amounts in thousands
For the 12 Weeks Ended
---------------------------------
FISCAL YEAR-TO-DATE Sept. 20, 1995 Sept. 21, 1994
-------------- --------------
Cash flows from operating activities:
Net earnings $ 45,877 40,045
Adjustments to reconcile
net earnings to net cash
provided by operating activities:
Depreciation and amortization 52,875 39,860
Prepaid income taxes 2,525 -
Defined benefit plan 1,250 1,264
Increase (decrease) in reserve
for self-insurance 5,762 (2,480)
Change in cash from:
Receivables 18,601 44,336
Merchandise inventories (11,786) (2,927)
Prepaid expenses 19,345 20,264
Accounts payable (36,288) (20,413)
Income taxes 27,807 15,957
Other current accrued expenses (34,810) (26,486)
------- -------
Net cash provided by operating activities 91,158 109,420
------- -------
Cash flows from investing activities:
Purchases of property, plant and
equipment, net (76,628) (64,826)
Increase in investments and other assets (2,289) (6,276)
------- -------
Net cash used in investing activities (78,917) (71,102)
------- -------
Cash flows from financing activities:
Increase (decrease) in short-term borrowings 27,000 (9,500)
Payments on capital lease obligations (2,128) (551)
Purchase of common stock and changes in (20,502) (10,385)
retained earnings
Dividends paid (21,158) (19,622)
Other (94) (10)
------- -------
Net cash used in financing activities (16,882) (40,068)
------- -------
Decrease in cash and cash equivalents (4,641) (1,750)
Cash and cash equivalents at beginning of year 30,414 31,451
------- -------
Cash and cash equivalents at end of period $ 25,773 29,701
======= =======
Supplemental cash flow information:
Interest paid $ 2,022 610
Interest and dividends received $ 4,038 267
Income taxes paid $ 493 1,480
======= =======
See accompanying notes to Condensed Consolidated Financial Statements.
Page 3
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(A) Financial information reflects all adjustments which, in the opinion of
management, are necessary to reflect the results of operations and
financial position for the quarters shown. These condensed financial
statements should be read in conjunction with the fiscal 1995 Form 10-K
Annual Report of the Company. The consolidated financial statements
include the accounts of Winn-Dixie Stores, Inc. and its subsidiaries
which operate as a major food retailer in fourteen states and the Bahama
Islands.
(B) Merchandise inventories are stated at the lower of cost or market,
approximately 91% of which are valued under the LIFO method.
(C) Results for the quarter reflect a pretax LIFO inventory charge of $6.0
million in 1995 and $2.7 million in 1994. If the FIFO method had been
used, current quarter net earnings would have been $49.5 million or $0.66
per share as compared with net earnings of $41.7 million or $0.56 per
share in the previous year.
(D) The Company has an authorized $200 million Commercial Paper program and
short-term lines of credit totaling $265 million. On September 20, 1995,
there was $150.0 million in commercial paper and $7.0 million from bank
lines of credit outstanding as compared to none outstanding on September
21, 1994.
(E) The provision for income taxes reflects management's best estimate of
the effective tax rate expected for the fiscal year. The effective tax
rate for fiscal year 1996 is 35% as compared to 36% in 1995.
(F) Litigation: There are pending against the Company various claims and
lawsuits arising in the normal course of business,
including suits charging violations of certain civil rights laws.
The U.S. Environmental Protection Agency has notified the Company that
it is one of the many potentially responsible parties (PRPs) for cleanup
of two designated Superfund sites located in Tampa, Florida, three such
sites in Jacksonville (2 related sites), one site in Madison, Florida,
one site in Charlotte, North Carolina and one site in Pembrook Park,
Florida. The Company may be a PRP for cleanup of one non-Superfund site
in Tarrant County, Texas. Although cleanup costs are believed to be
substantial, accurate estimates will not be available until studies have
been completed at the sites.
The Company has entered into orders by consent with numerous other PRPs
to conduct studies and do cleanup for four of the Superfund sites and
is negotiating an agreement with PRPs who are under an order at two
other Superfund sites to determine the most cost-
Page 4
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
CONTINUED:
effective way to clean up such sites. Although under federal
statutes the Company is jointly and severally liable for cleanup costs
at each location, the Company's share of total costs is estimated not
to exceed $400,000 for four of the Superfund sites.
The Company believes it is not a responsible party for cleanup of
the Madison, Florida, and Tarrant County, Texas, sites and has
no estimate of costs for those matters. Other than these two and the
New Mexico site mentioned below, these involve wastes the Company paid
to be properly disposed and were mishandled by disposal companies or
public disposal sites.
At one of the Tampa sites, the Company is one of 14 parties named
as respondents in a Unilateral Administrative Order for
Remedial Design and Remedial Action under 47 U.S.C. Section 9606(a)
relating to a disposal site formerly operated by Hillsborough County,
Florida. The parties are ordered to operate, maintain and monitor a
water cleaning system and perform Remedial Design for the site.
The costs to the Company are estimated at $50,000 in fiscal year 1996
with some credits still available for this year, with additional annual
costs for an indefinite period thereafter.
The Company is also involved in the cleanup of a fuel tank leak at
a New Mexico site formerly owned by it. The cleanup costs
are to be prorated with others on the basis of the total time of
ownership of the participants. The Company's share is 15% of the total
costs estimated to be less than $150,000, with
minimal annual monitoring costs thereafter.
The Company has just agreed to participate as a PRP in a Superfund
site in McKlenburg County, North Carolina. The Company share
has not been determined but it appears the Company will only be a
de-minimis party.
It is the Company's policy to accrue and charge against earnings
the environmental cleanup costs when it is probable that a
liability has been incurred and an amount can be reasonably estimated,
including evaluation of the other PRPs' ability to pay. The Company
believes its ultimate liability as to these environmental matters
will not necessitate significant capital outlays, will not materially
affect the annual earnings of the Company, nor cause material changes
in the Company's business. It is not possible to quantify future
environmental costs because many issues relate to actions by third
parties or changes in environmental regulation.
Although the amount of liability with respect to all other claims
and lawsuits cannot be ascertained, management is of the opinion
that any resulting liability will not have a material effect on the
Company's consolidated earnings or financial position.
Page 5
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This analysis should be read in conjunction with the Condensed Con-
solidated Financial Statements.
Results of Operations
Sales for the first quarter totaled $2.9 billion, up $344.6 million, or
13.3% over the previous year. For the first quarter, average store
sales increased 11.2% and identical store sales increased 5.6%.
During the quarter, the Company opened 11 new stores averaging 47,400
square feet, closed 10 older stores averaging 27,700 square feet and
remodeled or enlarged 34 store locations, having 1,176 locations in
operation on September 20, 1995, compared to 1,155 last year. As of
September 20, 1995, retail space totaled 44.2 million square feet, a
7.9% increase over the prior year. There are 48 new stores and 67
enlargements or remodels under construction.
Gross profit increased $87.0 million for the quarter. As a percent to
sales, gross profit for the current quarter was 23.1%, compared to 22.8%
in the previous year. The increase in gross profit margins is a result
of an improved inventory mix in our larger stores.
Operating and administrative expenses increased $79.4 million for the
current quarter. As a percent to sales, operating and administrative
expenses for the current quarter were 21.4%, compared to 21.1% last
year. Our increase in operating and administrative expense is due to a
higher payroll percentage in our larger stores, insurance premiums,
occupancy cost and depreciation expense.
Cash discounts and other income totaled $27.9 million for the first
quarter, compared to $22.7 million last year. Investment income for the
current quarter totaled $0.1 million compared to $0.2 million last year.
The increase in other income is due to interest income received from a
tax refund.
Interest expense totaled $8.3 million for the current quarter compared
to $3.4 million for the comparable period last year. The increase in
interest expense for the quarter is due to an increase in the issuance
of commercial paper.
Page 6
<PAGE>
Results of Operations, continued
Earnings before income taxes were $70.6 million for the current quarter
compared to $62.6 million in the previous year. The increase in pretax
earnings is primarily a result of the increase in gross profit as previ-
ously mentioned. Income taxes have been accrued at an effective rate of
35% for the current year and 36% for the previous year. This rate is
expected to approximate the effective rate for the full 1996 fiscal
year.
Net earnings amounted to $45.9 million, or $0.61 per share for the
current quarter compared to $40.0 million, or $0.54 per share for the
comparable period last year. The LIFO charge reduced net earnings by
$3.7 million, or $0.05 per share for the current quarter compared to
$1.7 million, or $0.02 per share in the previous year.
Liquidity and Capital Resources
The Company's financial condition remains very sound and very strong.
Cash and cash equivalents amounted to $25.8 million at September 20,
1995. Net cash provided by operating activities amounted to $91.2
million for the 12 weeks ended September 20, 1995, compared to $109.4
million for the comparable period last year. Capital expenditures
totaled $76.6 million compared to $64.8 million for the comparable
period last year. These expenditures were for new store locations,
remodeling and enlargement of store locations and maintenance and
expansion of support facilities. Total capital investment in Company
retail and support facilities, including operating leases, is estimated
to be $700 million in 1996. The Company has no material construction or
purchase commitments outstanding as of September 20, 1995.
Working capital amounted to $411.1 million at September 20, 1995, com-
pared to $425.5 million at June 28, 1995.
The Company has an authorized $200 million Commercial Paper program.
In addition, the Company has $265 million of short-term lines of credit.
These lines of credit are available when needed during the year and are
renewable on an annual basis. The Company is not required to maintain
compensating bank balances in connection with these lines of credit. As
of September 20, 1995, $150.0 million of commercial paper was
outstanding as compared to none in the previous year. Short-term
borrowings against our bank lines of credit were $7.0 million as of
September 20, 1995 as compared to none on September 21, 1994.
Excluding capital leases, the Company had no outstanding long-term debt
as of either September 20, 1995 or June 28, 1995.
The Company's available credit facilities and cash flow from operations
are considered adequate to fund the short-term and long-term capital
needs of the Company.
Page 7
<PAGE>
Liquidity and Capital Resources, continued
The Company has been notified as one of the many Potentially Responsible
Parties by the Environmental Protection Agency with respect to the clean
up of hazardous wastes at seven Superfund sites and one additional site.
The Company is in the process of determining the potential liability and
the most cost-effective way to clean up such sites. The Company
believes its ultimate liability as to these environmental matters will
not necessitate significant capital outlays, will not materially affect
the annual earnings of the Company, nor cause material changes in the
Company's business.
Impact of Inflation
The Company's primary costs, inventory and labor, increase with
inflation. Recovery of these costs has to come from improved operating
efficiencies and, to the extent permitted by our competition, through
improved gross profit margins.
Subsequent Events
At the Annual Meeting of Shareholders on October 4, 1995, the Company
announced a 2-for-1 stock split effective November 30, 1995, to
shareholders of record on November 10, 1995.
The Board of Directors also declared a special $0.01 per share, or 7.1%,
increase in the monthly cash dividend from the current monthly cash
dividend of $0.14 per share to $0.15 per share, effective immediately.
Page 8
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
(a) The 1995 Annual Meeting of Shareholders of the Company took
place on October 4, 1995.
(b) Four matters were voted on at the meeting:
1. The election of four (4) Class I Directors for terms expiring
in 1998;
2. Approval for the adoption of the Winn-Dixie Restricted Stock Plan;
3. Approval and ratification of an amendment to the Revised Winn-Dixie
Stock Purchase Plan for Employees so as to make available for sale
thereunder an additional 1,000,000 shares of the Company's Common
Stock and to reapprove and to readopt such Plan, as so amended;
4. And for ratification of the appointment by the Board of Directors
of the Company of KPMG Peat Marwick LLP as auditors of the Company
for the fiscal year commencing June 29, 1995.
With respect to the election of Directors, the votes were as
follows:
Shares
Class I, for terms expiring in 1998 Shares for Withheld
----------------------------------- ----------- ----------
A. Dano Davis 65,298,685 361,822
T. Wayne Davis 65,305,957 354,550
Carleton T. Rider 65,319,304 341,203
Charles P. Stephens 65,059,723 600,784
With respect to approval for the adoption of the Winn-Dixie
Restricted Stock Plan, the vote was: 64,190,252 shares for; 1,256,375
shares against; 326,068 shares abstain. There were zero broker non-votes.
With respect to approval and ratification of amendment to the Revised
Winn-Dixie Stock Purchase Plan for Employees so as to make
available for sale thereunder an additional 1,000,000 shares of the
Company's Common Stock and to reapprove and to readopt such Plan, as so
amended, the vote was: 64,641,634 shares for; 862,287 shares against;
268,774 shares abstain. There were zero broker non-votes.
Page 9
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders, continued
With respect to the appointment of KPMG Peat Marwick LLP as auditors
of the Company for the fiscal year commencing June 29, 1995, the vote
was: 65,507,531 shares for; 116,811 shares against; 148,354 shares
abstain. There were zero broker non-votes.
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Exhibits
11.1 Computation of Earnings Per Share
Report on Form 8-K
There were no reports on Form 8-K filed for the quarter ended
September 20, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
WINN-DIXIE STORES, INC.
Date: October 6, 1995 RICHARD P. MC COOK
Richard P. McCook
Financial Vice President and
Principal Financial Officer
Date: October 6, 1995 DAVID H. BRAGIN
David H. Bragin
Corporate Treasurer and
Principal Accounting Officer
Page 10
<PAGE>
Exhibit 11.1
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
Dollars in thousands except per share data
For the 12 Weeks Ended Sept. 20, 1995 Sept. 21, 1994
Average number of shares outstanding 75,390,496 74,108,688
========== ==========
Net earnings $ 45,877 40,045
========== ==========
Earnings per share $ 0.61 0.54
========== ==========
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
All amounts in thousands except per share data.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-26-1996
<PERIOD-END> SEP-20-1995
<CASH> 25,773
<SECURITIES> 0
<RECEIVABLES> 134,864
<ALLOWANCES> 0
<INVENTORY> 1,171,370
<CURRENT-ASSETS> 1,424,859
<PP&E> 921,575
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,475,507
<CURRENT-LIABILITIES> 1,013,715
<BONDS> 0
<COMMON> 75,302
0
0
<OTHER-SE> 1,166,414
<TOTAL-LIABILITY-AND-EQUITY> 2,475,507
<SALES> 2,934,958
<TOTAL-REVENUES> 2,934,958
<CGS> 2,257,399
<TOTAL-COSTS> 2,257,399
<OTHER-EXPENSES> 626,636
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (8,274)
<INCOME-PRETAX> 70,580
<INCOME-TAX> 24,703
<INCOME-CONTINUING> 45,877
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 45,877
<EPS-PRIMARY> .61
<EPS-DILUTED> .61
</TABLE>
