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 April 5, 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 32254-3699
(Address of registrant's organization) (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 April 20, 1995, there were 75,818,572 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 and 40 Weeks Ended
April 5, 1995 and April 6, 1994 1
Condensed Consolidated Balance Sheets (Unaudited),
April 5, 1995 and June 29, 1994 2
Condensed Consolidated Statements of Cash Flows
(Unaudited), For the 40 Weeks Ended
April 5, 1995 and April 6, 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 5. Other Information 8
Item 6. Exhibits and Reports on Form 8-K 8
Signatures 8
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
MOST RECENT QUARTER
For the 12 Weeks Ended
-------------------------------
April 5, 1995 April 6, 1994
-------------- -------------
Net sales $ 2,775,842 2,651,491
Cost of sales 2,133,824 2,047,577
------------ ------------
Gross profit 642,018 603,914
Operating & administrative expenses 575,099 536,614
------------ ------------
Operating income 66,919 67,300
Cash discounts & other income 26,068 20,349
Interest expense (4,024) (3,729)
------------ ------------
Earnings before income taxes 88,963 83,920
Provision for income taxes 32,027 31,888
============ ============
Net earnings $ 56,936 52,032
============ ============
Earnings per share $ 0.76 0.70
============ ============
Dividends per share $ 0.39 0.36
============ ============
FISCAL YEAR-TO-DATE
For the 40 Weeks Ended
----------------------
April 5, 1995 April 6, 1994
-------------- -------------
Net sales $ 8,904,030 8,496,917
Cost of sales 6,861,554 6,570,457
------------ ------------
Gross profit 2,042,476 1,926,460
Operating & administrative expenses 1,854,423 1,747,746
------------ ------------
Operating income 188,053 178,714
Cash discounts & other income 81,152 78,919
Interest expense (12,247) (12,860)
------------ ------------
Earnings before income taxes 256,958 244,773
Provision for income taxes 92,505 93,009
------------ ------------
Net earnings $ 164,453 151,764
============ ============
Earnings per share $ 2.21 2.03
============ ============
Dividends per share $ 1.17 1.08
============ ============
See accompanying notes to Condensed Consolidated Financial Statements.
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Amounts in thousands
ASSETS April 5, 1995 June 29, 1994
--------------- ---------------
Cash and cash equivalents $ 28,494 31,451
Trade and other receivables 147,855 171,854
Associate stock loans 11,658 1,776
Merchandise inventories less LIFO reserve
of $215,972 ($205,172 at June 29, 1994) 1,218,756 1,058,883
Prepaid expenses 86,265 97,220
--------------- ---------------
Total current assets 1,493,028 1,361,184
--------------- ---------------
Investments and other assets 89,005 37,587
Prepaid income taxes 41,024 41,024
Net property, plant and equipment 854,142 706,779
--------------- ---------------
Total assets $ 2,477,199 2,146,574
=============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 540,049 516,806
Reserve for insurance claims and
self-insurance 49,757 60,510
Accrued wages and salaries 85,241 68,238
Accrued rent 57,825 58,313
Accrued expenses 108,589 126,550
Short-term borrowings 145,000 9,500
Current obligations under
capital leases 3,765 3,462
Income taxes 44,275 29,787
--------------- ---------------
Total current liabilities 1,034,501 873,166
--------------- ---------------
Obligations under capital leases 82,528 85,374
Defined benefit plan 26,650 22,852
Reserve for insurance claims and
self-insurance 112,917 105,417
Other liabilities 3,771 2,304
Shareholders' equity:
Common stock 75,822 74,176
Retained earnings 1,141,010 983,285
--------------- ---------------
Total shareholders' equity 1,216,832 1,057,461
--------------- ---------------
Total liabilities and shareholders'
equity $ 2,477,199 2,146,574
=============== ===============
See accompanying notes to Condensed Consolidated Financial Statements.
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Amounts in thousands
For the 40 Weeks Ended
------------------------------
FISCAL YEAR-TO-DATE April 5, 1995 April 6, 1994
-------------- --------------
Cash flows from operating activities:
Net earnings $ 164,453 151,764
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 142,355 122,934
Prepaid income taxes (2,780)
Defined benefit plan 3,798 2,947
Increase (decrease) in reserve for
self-insurance (3,253) 3,330
Change in cash from:
Receivables 19,069 (13,210)
Merchandise inventories (130,352) (44,587)
Prepaid expenses 11,642 12,039
Accounts payable 9,217 49,622
Income taxes 14,488 19,203
Other current accrued expenses (3,935) 36,139
---------- ----------
Net cash provided by operating activities 227,482 337,401
---------- ----------
Cash flows from investing activities:
Purchases of property, plant
and equipment, net (261,826) (195,306)
Decrease (increase) in investments
and other assets 1,836 (38,712)
----------- -----------
Net cash used in investing activities (259,990) (234,018)
----------- -----------
Cash flows from financing activities:
Increase in short-term borrowings 135,500 20,000
Payments on capital lease obligations (2,543) (2,569)
Purchase of common stock and changes in
retained earnings (25,584) (32,232)
Proceeds of sales under associates'
stock purchase plan 25,909
Payment on bank notes (17,087)
Dividends paid (86,777) (80,631)
----------- -----------
Net cash provided by (used in) financing activities 29,551 (95,505)
----------- -----------
Increase (decrease) in cash and cash equivalents (2,957) 7,878
Cash and cash equivalents at beginning of year 31,451 22,302
----------- -----------
Cash and cash equivalents at end of period $ 28,494 30,180
=========== ===========
Supplemental cash flow information:
Interest paid $ 12,649 12,447
Interest and dividends received $ 1,117 2,041
Income taxes paid $ 72,900 74,041
=========== ===========
See accompanying notes to Condensed Consolidated Financial Statements.
<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 1994 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 the southeastern and southwestern United States, Ohio and the Bahamas
Islands.
(B) On March 26, 1995, the Company acquired the assets of Thriftway, Inc., a
twenty-five store supermarket chain operating in Ohio and Kentucky in a
stock for stock transaction and is not reflected in the Statement of Cash
Flows. This acquistion has been accounted for using the purchase method.
Results of operations, which are immaterial, are included in the
consolidated financial statements from the date of acquistion.
(C) Merchandise inventories are stated at the lower of cost or market,
approximately 94% of which are valued under the LIFO method.
(D) Results for the quarter reflect a pretax LIFO inventory charge of $4.5
million in 1995 and $2.7 million in 1994. The cumulative current year
charge is $10.8 million as compared with $9.0 million in 1994. If the FIFO
method had been used, current quarter net earnings would have been $59.8
million or $0.80 per share as compared with net earnings of $53.7 million
or $0.72 per share in the previous year. The cumulative year net earnings
would have been $171.2 million, or $2.30 per share as compared with $157.4
million, or $2.11 per share.
(E) The Company has an authorized $200 million Commercial Paper Program and
short-term lines of credit totaling $250 million. On April 5, 1995, there
was $110.0 million in commercial paper and $35.0 million from bank lines
of credit outstanding as compared to $100 million in commercial paper
outstanding on April 6, 1994.
(F) The provision for income taxes reflects management's best estimate of the
effective tax rate expected for the fiscal year. The effective tax rate
used for fiscal year 1995 is 36% as compared to 38% in 1994.
(G) 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
three designated Superfund sites located in Tampa, Florida, three such
sites in Jacksonville (2 related sites) and one site in Madison, 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.
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED), CONTINUED:
The Company has entered into orders by consent with numerous other PRPs to
conduct studies and do cleanup for three of the Superfund sites and is
negotiating an agreement with PRPs who are under an order at another
Superfund site to determine the most cost-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 $500,000 for four of the Superfund sites
and the Texas site. 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
$150,000 in fiscal year 1995, 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.
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 affect on the Company's
consolidated earnings or financial position.
<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 Consolidated
Financial Statements.
Results of Operations
Sales for the current quarter were $2.8 billion, a $124.4 million increase,
or 4.7% over the comparable quarter ended April 6, 1994. Year-to-date, sales
were $8.9 billion, a $407.1 million, or 4.8% increase over the comparable
period last year. Sales increases resulted primarily from an increase in
average store sales. The increase in identical store sales was 1.7% for the
quarter and 2.6% year-to-date. Average store sales increased 5.4% for the
quarter and 5.9% year-to-date. Sales for the third quarter were adversly
affected by approximately 1.0% due to Easter falling in the fourth quarter
versus the third quarter last year.
The Company opened and/or acquired 83 new stores, averaging 46,700 square
feet, enlarged or remodeled 63 stores, and closed 59 older stores, averaging
26,500 square feet. As of April 5, 1995, retail space totaled 43.4 million
square feet. Currently, 45 new stores are under construction. The Company
plans to open 105 new stores in the current fiscal year. The Company has
1,183 stores in operation compared with 1,161 stores last year. Of the 1,183
stores, 713 are larger than 35,000 square feet. The increase in the number of
stores opened, include 25 Thriftway stores that were acquired on March 26,
1995.
Gross profit increased $38.1 million for the quarter and $116.0 million,
year-to-date. As a percent to sales, gross profit for the current quarter
was 23.1%, compared to 22.8% in the previous year. Year-to-date, gross
profit as a percent to sales was 22.9% in the current year, compared to 22.7%
in the previous year. The increase in gross profit is a result of our larger
stores having a different inventory mix which has an improved gross profit
percentage.
Operating and administrative expenses increased $38.5 million for the current
quarter and $106.7 million year-to-date. As a percent to sales, operating
and administrative expenses for the current quarter were 20.7%, compared to
20.2% last year. Year-to-date, operating and administrative expenses, as a
percent to sales were 20.8% for the current year and 20.6% for the previous
year. Our increase in operating and administrative expense is due to a higher
payroll percentage in the larger stores, occupancy and depreciation expense.
Cash discounts and other income totaled $26.1 million the current quarter and
$81.2 million year-to-date. Investment income for the current quarter totaled
$0.1 million compared to $(1.5) million last year. Year-to-date, investment
income totaled $0.6 million for the current year, compared to $0.7 million in
the previous year. The decrease in investment income is due to a reduction
in funds available for investment.
Interest expense totaled $4.0 million for the current quarter compared to
$3.7 million for the comparable period last year. Year-to-date, interest
expense totaled $12.3 million for the current period compared to $12.9
million in the previous year. The increase in interest expense for the
quarter is due to a increase in the issuance of commercial paper.
Earnings before income taxes were $89.0 million for the current quarter
compared to $83.9 million in the previous year. Year-to-date, earnings
before income taxes were $257.0 million in the current year and $244.8
million in the previous year. The increase in pretax earnings is primarily a
result of the increase in gross profit as previously mentioned. Income taxes
have been accrued at an effective rate of 36% for the current year and 38.0%
for the previous year. This rate is expected to approximate the effective
rate for the full 1995 fiscal year.
<PAGE>
Results of Operations, continued
Net earnings amounted to $57.0 million, or $0.76 per share for the current
quarter compared to $52.0 million, or $0.70 per share for the comparable
period last year. Year-to-date, net earnings amounted to $164.5 million or
$2.21 per share compared to $151.8 million, or $2.03 per share for the
previous year. The LIFO charge reduced net earnings by $2.8 million, or
$0.03 per share for the current quarter compared to $1.7 million, or $0.02
per share in the previous year. Year-to-date, the LIFO charge reduced net
earnings by $6.8 million, $0.09 per share compared to $5.6 million, or $0.08
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 $28.5 million at April 5, 1995. Net cash
provided by operating activities amounted to $227.5 million for the 40 weeks
ended April 5, 1995 compared to $337.4 million for the comparable period
last year. Capital expenditures totaled $261.8 million compared to $195.3
million for the comparable period last year. These expenditures were for
new store locations, remodeling and enlargement of store locations and the
expansion of support facilities. Total capital investment in Company retail
and support facilities, including operating leases, is estimated to be
$600.0 million in 1995. The Company has no material construction or purchase
commitments outstanding as of April 5, 1995.
Working capital amounted to $458.5 million at April 5, 1995 compared to
$488.0 million at June 29, 1994.
The Company has an authorized $200 million Commercial Paper Program. In
addition, the Company has $235 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 April 5,
1995, $110.0 million of commercial paper was outstanding as compared to
$100.0 million in the previous year. Short-term borrowings against our bank
lines of credit were $35.0 million as of April 5, 1995 as compared to none
on April 6, 1994.
Excluding capital leases, the Company had no outstanding long-term debt as
of either April 5, 1995 or June 29, 1994.
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.
The U.S. Environmental Protection Agency has notified the Company that it is
one of the many potentially responsible parties (PRPs) for cleanup of three
designated Superfund sites located in Tampa, Florida, three such sites in
Jacksonville (2 related sites) and one site in Madison, 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.
Impact of Inflation
The Company's primary costs, which are inventory and labor, increase with
inflation. Recovery of these increases has to come from improved operating
efficiencies and, to the extent permitted by our competition, through
improved gross profit margins.
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
Part II - Other Information
Item 5. Other Information
On April 21, 1995, the Board of Directors elected four vice
presidents. E. Ellis Zahra, Jr., formerly the managing partner
of the Jacksonville, Florida office of Lebeouf, Lamb, Green and
McRae, was elected Vice President and General Counsel. Ronald
D. Buday, former Division Manager of the Orlando Division was
elected a Vice President of the Company. Randall L. Hutton,
former Associate Director of Government Relations, was elected
Vice President, Director of Government Relations. Bruce Baxter,
former Director of Marketing, was elected Vice President,
Director of Marketing.
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 April 05,
1995.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 3, 1995 RICHARD P. MCCOOK
---------------------------
Richard P. McCook
Financial Vice President and
Principal Financial Officer
Date: May 3, 1995 DAVID H. BRAGIN
---------------------------
David H. Bragin
Corporate Treasurer and
Principal Accounting Officer
Page 8
<PAGE>
Exhibit 11.1
------------
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
Dollars in thousands except per share data
For the 40 Weeks Ended April 5, 1995 April 6, 1994
---------------- ----------------
Average number of shares
outstanding 74,436,060 74,752,261
================ ================
Net earnings $ 164,453 151,764
================ ================
Earnings per share $ 2.21 2.03
================ ================
<PAGE>
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