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 18, 1996
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 October 7, 1996, there were 151,172,330 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 18, 1996 and September 20, 1995 1
Condensed Consolidated Balance Sheets (Unaudited),
September 18, 1996 and June 26, 1996 2
Condensed Consolidated Statements of Cash Flows
(Unaudited), For the 12 Weeks Ended
September 18, 1996 and September 20, 1995 3
Notes to Condensed Consolidated Financial Statements
(Unaudited) 4
Management's Discussion and Analysis of Financial
Condition and Results of Operations 5-7
Part II: Other Information
Item 4. Submission of Matters to a Vote of Security Holders 8-9
Item 6. Exhibits and Reports on Form 8-K 9
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. 18, 1996 Sept. 20, 1995
Net sales $ 2,985,702 2,934,958
Cost of sales 2,244,979 2,257,399
--------- ---------
Gross profit 740,723 677,559
Operating & administrative expenses 689,129 626,636
---------- ---------
Operating income 51,594 50,923
Cash discounts & other income 26,384 27,931
Interest expense (4,489) (8,274)
--------- ---------
Earnings before income taxes 73,489 70,580
Provision for income taxes 26,456 24,703
--------- ---------
Net earnings $ 47,033 45,877
========= =========
Earnings per share $ 0.31 0.30
========= =========
Dividends per share $ 0.16 0.14
========= =========
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. 18, 1996 June 26, 1996
Cash and cash equivalents $ 47,608 32,208
Trade and other receivables 148,623 158,445
Merchandise inventories less LIFO reserve
of $228,341 ($222,341 at June 26, 1996) 1,225,007 1,179,126
Prepaid expenses 101,685 131,161
--------- ---------
Total current assets 1,522,923 1,500,940
---------- ---------
Investments and other assets 135,076 126,091
Deferred income taxes 21,592 22,732
Net property, plant and equipment 1,031,103 998,849
--------- ---------
Total assets $ 2,710,694 2,648,612
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 570,370 599,297
Short-term borrowings 180,000 110,000
Reserve for insurance claims and self-insurance 54,108 61,760
Accrued wages and salaries 83,107 84,691
Accrued rent 67,027 62,237
Accrued expenses 151,034 148,715
Current obligations under capital leases 3,568 2,974
Income taxes 60,464 42,554
--------- --------
Total current liabilities 1,169,678 1,112,228
--------- ---------
Obligations under capital leases 60,259 60,853
Defined benefit plan 35,597 34,197
Reserve for insurance claims and self-insurance 99,459 97,209
Other liabilities 1,782 1,829
Shareholders' equity:
Common stock 151,317 151,685
Retained earnings 1,192,602 1,190,611
--------- ---------
Total shareholders' equity 1,343,919 1,342,296
--------- ---------
Total liabilities and shareholders' equity $ 2,710,694 2,648,612
========= =========
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. 18, 1996 Sept. 20, 1995
Cash flows from operating activities:
Net earnings $ 47,033 45,877
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 62,935 52,875
Deferred income taxes (1,736) 2,525
Defined benefit plan 1,400 1,250
Reserve for insurance claims and self-insurance (5,402) 5,762
Change in cash from:
Receivables 9,823 17,048
Merchandise inventories (45,880) (11,786)
Prepaid expenses 30,616 19,345
Accounts payable (28,627) (36,288)
Income taxes 19,646 27,807
Other current accrued expenses 5,846 (34,810)
------- -------
Net cash provided by operating activities 95,654 89,605
------- -------
Cash flows from investing activities:
Purchases of property, plant and equipment, net (95,189) (76,628)
Increase in investments and other assets (8,985) (2,289)
------- -------
Net cash used in investing activities (104,174) (78,917)
------- -------
Cash flows from financing activities:
Increase in short-term borrowings 70,000 27,000
Payments on capital lease obligations (622) (2,128)
Purchase of common stock (17,208) (14,302)
Proceeds of sales under associates' stock
purchase plan 3,198 1,553
Dividends paid (24,228) (21,158)
Other (7,220) (6,294)
------- -------
Net cash provided by (used in)
financing activities 23,920 (15,329)
------- -------
Increase (decrease) in cash and cash equivalents 15,400 (4,641)
Cash and cash equivalents at beginning of year 32,208 30,414
------- -------
Cash and cash equivalents at end of period $ 47,608 25,773
======= =======
Supplemental cash flow information:
Interest paid $ 2,795 2,022
Interest and dividends received $ 290 4,038
Income taxes paid $ 8,825 493
======= =======
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
1996 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 1996 and $6.0 million in 1995. If the FIFO method had been
used, current quarter net earnings would have been $50.7 million or
$0.33 per share as compared with net earnings of $49.5 million or $0.33
per share in the previous year.
(D) The Company has an authorized $300 million Commercial Paper program and
short-term lines of credit totaling $330 million. On September 18, 1996,
there was $180.0 million in commercial paper and no amounts from bank
lines of credit outstanding as compared to $110.0 million in commercial
paper and no amounts from bank lines of credit outstanding on June 26,
1996.
(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 1997 is 36% as compared to 35% in 1996.
(F) On October 4, 1995, the Board of Directors approved a 2-for-1 stock
split, effective November 30,1995, for shareholders of record on
November 10, 1995. All per share data have been adjusted to reflect the
stock split on a retroactive basis.
(G) Litigation: There are pending against the Company various claims and
lawsuit s arising in the normal course of business, including suits
charging violations of certain civil rights laws. In addition, the
Company is a party to various proceedings arising under federal, state
or local regulations protecting the environment. Management is of the
opinion that any liability which might result from any such claim,
lawsuit
or proceeding will not have a material adverse effect on the Company's
consolidated earnings or financial position.
(H) Reclassification: Certain prior year amounts have been reclassified to
conform with the presentation adopted in 1996.
Page 4
<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 first quarter totaled $3.0 billion, up $50.7 million, or 1.7%
over the previous year. For the first quarter, average store sales increased
1.5% and identical store sales decreased 1.1%.
During the quarter, the Company opened 18 new stores, averaging 50,100
square feet, closed 18 older stores averaging 28,400 square feet and enlarged
or remodeled 24 store locations, having 1,178 locations in operation on
September 18, 1996, compared to 1,176 last year. As of September 18,
1996, retail space totaled 46.2 million square feet, a 4.6% increase over
the prior year. There are 59 new stores and 52 store enlargements or
remodels under construction.
Gross profit increased $63.2 million for the quarter. As a percent to
sales, gross profit for the current quarter was 24.8%, compared to 23.1% 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 $62.5 million for the
current quarter. As a percent to sales, operating and administrative
expenses for the current quarter were 23.1%, compared to 21.4% last year. Our
increase in operating and administrative expense is due to a higher payroll
percentage in our larger stores, advertising, insurance premiums, occupancy
cost and depreciation expense.
Cash discounts and other income totaled $26.4 million for the first quarter,
compared to $27.9 million last year. The decrease in cash discounts and
other income is a result of a decrease in interest income.
Investment income for the current quarter totaled $0.1 million compared to
$0.1 million last year.
Interest expense totaled $4.5 million for the current quarter compared to
$8.3 million for the comparable period last year. The decrease in interest
expense for the quarter is related to capital leases.
Page 5
<PAGE>
Results of Operations, continued
Earnings before income taxes were $73.5 million for the current quarter
compared to $70.6 million in the previous year. The increase in pre-tax
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 35% for the previous year. This rate is expected to
approximate the effective rate for the full 1997 fiscal year.
Net earnings amounted to $47.0 million, or $0.31 per share for the current
quarter compared to $45.9 million, or $0.30 per share for the comparable
period last year. The LIFO charge reduced net earnings by $3.7 million, or
$0.02 per share for the current quarter compared to $3.7 million, or $0.03
per share in the previous year.
Liquidity and Capital Resources
The Company's financial condition remains sound and strong. Cash and cash
equivalents amounted to $47.6 million at September 18, 1996, compared to
$25.8 million at September 20, 1995. Net cash provided by operating
activities amounted to $95.7 million for the 12 weeks ended September 18,
1996, compared to $89.6 million for the comparable period last year.
Capital expenditures totaled $95.2 million compared to $76.6 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 $750
million in 1997. The Company has no material construction or purchase
commitments outstanding as of September 18, 1996.
Working capital amounted to $353.2 million at September 18, 1996, compared
to $388.7 million at June 26, 1996.
The Company has an authorized $300 million Commercial Paper program. In
addition, the Company has $330 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 18,
1996, $180.0 million of commercial paper was outstanding as compared to
$110.0 million on June 26, 1996. The average interest rate on the commercial
paper outstanding on September 18, 1996 was 5.5% as compared to 5.5% on June
26, 1996. The Company had no short-term borrowings against bank lines of
credit as of September 18, 1996 or June 26, 1996.
Excluding capital leases, the Company had no outstanding long-term debt as
of either September 18, 1996 or June 26, 1996.
The Company's cash flow from operations and available credit facilities are
considered adequate to fund the short-term and long-term capital needs of the
Company.
Page 6
<PAGE>
Liquidity and Capital Resources, continued
The Company is a party to various proceedings arising under federal, state
and local regulations protecting the environment. Management is of the
opinion that any liability which might result from any such proceedings will
not have a material adverse effect on the Company's consolidated earnings
or financial position.
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.
Page 7
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
(a) The 1996 Annual Meeting of Shareholders of the Company took place
on October 2, 1996.
(b) Four matters were voted on at the meeting:
1. The election of three (3) Class III Directors for terms expiring
in 1999;
2. Approval of the material terms of the incentive compensation
performance goals provided in the Company's Annual Incentive Plan,
Performance Unit Plan, Restricted Stock Plan and Key Employee Stock
Option 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 2,000,000 shares of the
Company's Common Stock, to clarify that the maximum number of
shares of the Company's Common Stock available under such Plan
shall be correspondingly increased if the Company's Common Stock is
split up, divided or otherwise reclassified into a greater number
of shares 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 27, 1996.
With respect to the election of Directors, the votes were as follows:
Class III, for terms expiring in 1999 Shares for Shares Withheld
Armando M. Codina 127,679,785 1,526,559
Radford D. Lovett 127,923,476 1,282,868
Julia B. North 127,928,509 1,277,835
With respect to approval for the material terms of the incentive compensation
performance goals provided in the Company's Annual Incentive Plan,
Performance Unit Plan, Restricted Stock Plan and Key Employee Stock
Option Plan, the vote was: 126,441,674 shares for; 1,891,879 shares against;
872,791 shares abstain. There were zero broker non-votes.
Page 8
<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 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 2,000,000 shares of the Company's Common
Stock, to clarify that the maximum number of shares of the Company's
Common Stock available under such Plan shall be correspondingly
increased if the Company's Common Stock is split up, divided or
otherwise reclassified into a greater number of shares and to reapprove
and to readopt such Plan, as so amended, the vote was: 127,720,364
shares
for; 907,812 shares against; 578,168 shares abstain. There were zero
broker non-votes.
With respect to the appointment of KPMG Peat Marwick LLP as auditors of
the Company for the fiscal year commencing June 27, 1996, the vote was:
128,426,725 shares for; 272,423 shares against; 507,196 shares abstain.
There were zero broker non-votes.
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 18,
1996.
Page 9
<PAGE>
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 9, 1996 RICHARD P. MCCOOK
Richard P. McCook
Financial Vice President and
Principal Financial Officer
Date: October 9, 1996 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. 18, 1996 Sept. 20, 1995
Average number of shares outstanding 151,571,793 150,780,992
Net earnings $ 47,033 45,877
Earnings per share $ 0.31 0.30
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-25-1997
<PERIOD-END> SEP-18-1996
<CASH> 47608000
<SECURITIES> 0
<RECEIVABLES> 148623000
<ALLOWANCES> 0
<INVENTORY> 1225007000
<CURRENT-ASSETS> 1522923000
<PP&E> 101685000
<DEPRECIATION> 0
<TOTAL-ASSETS> 2710694000
<CURRENT-LIABILITIES> 1169678000
<BONDS> 0
0
0
<COMMON> 151317000
<OTHER-SE> 1192602000
<TOTAL-LIABILITY-AND-EQUITY> 2710694000
<SALES> 2985702000
<TOTAL-REVENUES> 2985702000
<CGS> 2244979000
<TOTAL-COSTS> 689129000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4489000
<INCOME-PRETAX> 73489000
<INCOME-TAX> 26456000
<INCOME-CONTINUING> 47033000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 47033000
<EPS-PRIMARY> .31
<EPS-DILUTED> .31
