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 3, 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 April 15, 1996, there were 152,001,276 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 3, 1996 and April 5, 1995 1
Condensed Consolidated Balance Sheets (Unaudited),
April 3,1996 and June 28, 1995 2
Condensed Consolidated Statements of Cash Flows
(Unaudited), For the 40 Weeks Ended
April 3, 1996 and April 5, 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 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
For the 12 Weeks Ended
MOST RECENT QUARTER April 3, 1996 April 5, 1995
Net sales $ 3,035,323 2,775,842
Cost of sales 2,292,503 2,133,824
----------- -----------
Gross profit 742,820 642,018
Operating & administrative expenses 665,947 575,099
----------- -----------
Operating income 76,873 66,919
Cash discounts & other income 25,203 26,068
Interest expense (4,765) (4,024)
----------- -----------
Earnings before income taxes 97,311 88,963
Provision for income taxes 34,059 32,027
----------- -----------
Net earnings $ 63,252 56,936
=========== ===========
Earnings per share $ 0.42 0.38
=========== ===========
Dividends per share $ 0.225 0.195
=========== ===========
For the 40 Weeks Ended
FISCAL YEAR-TO-DATE April 3, 1996 April 5, 1995
Net sales $ 9,942,844 8,904,030
Cost of sales 7,576,153 6,861,554
----------- -----------
Gross profit 2,366,691 2,042,476
Operating & administrative expenses 2,155,283 1,854,423
----------- -----------
Operating income 211,408 188,053
Cash discounts & other income 87,565 81,152
Interest expense (19,605) (12,247)
----------- -----------
Earnings before income taxes 279,368 256,958
Provision for income taxes 97,779 92,505
----------- -----------
Net earnings $ 181,589 164,453
=========== ===========
Earnings per share $ 1.20 1.10
=========== ===========
Dividends per share $ 0.660 0.585
=========== ===========
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 April 3, 1996 June 28, 1995
Cash and cash equivalents $ 49,646 30,414
Trade and other receivables 147,296 151,912
Associate stock loans 28,223 10,615
Merchandise inventories
less LIFO reserve of $225,485
($212,485 at June 28, 1995) 1,245,705 1,159,584
Prepaid expenses 105,606 103,135
--------- ---------
Total current assets 1,576,476 1,455,660
--------- ---------
Investments and other assets 97,238 100,284
Prepaid income taxes 20,608 29,025
Net property, plant and equipment 972,604 897,823
--------- ---------
Total assets $ 2,666,926 2,482,792
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 548,447 555,551
Reserve for insurance
claims and self-insurance 46,259 59,373
Accrued wages and salaries 96,592 77,396
Accrued rent 54,863 54,888
Accrued expenses 145,581 130,285
Short-term borrowings 170,000 130,000
Current obligations under capital leases 3,545 3,298
Income taxes 45,822 19,331
--------- ---------
Total current liabilities 1,111,109 1,030,122
--------- ---------
Obligations under capital leases 75,156 77,653
Defined benefit plan 32,478 28,328
Reserve for insurance claims
and self-insurance 110,884 103,384
Other liabilities 1,987 2,098
Shareholders' equity:
Common stock 152,010 75,561
Retained earnings 1,183,302 1,165,646
--------- ---------
Total shareholders' equity 1,335,312 1,241,207
--------- ---------
Total liabilities and
shareholders' equity $2,666,926 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 40 Weeks Ended
FISCAL YEAR-TO-DATE April 3, 1996 April 5, 1995
Cash flows from operating activities:
Net earnings $ 181,589 164,453
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization 180,174 142,355
Prepaid income taxes 8,417 -
Defined benefit plan 4,150 3,798
Decrease in reserve for self-insurance (5,614) (3,253)
Change in cash from:
Receivables (12,992) 19,069
Merchandise inventories (86,121) (130,352)
Prepaid expenses (2,471) 11,642
Accounts payable (6,355) 9,217
Income taxes 26,491 14,488
Other current accrued expenses 40,087 (3,935)
------- -------
Net cash provided by operating activities 327,355 227,482
------- -------
Cash flows from investing activities:
Purchases of property, plant and
equipment, net (254,956) (261,826)
Increase in investments and other assets 3,046 1,836
------- -------
Net cash used in investing activities (251,910) (259,990)
------- -------
Cash flows from financing activities:
Increase in short-term borrowings 40,000 135,500
Payments on capital lease obligations (2,086) (2,543)
Purchase of common stock and changes in
retained earnings (48,848) (25,584)
Proceeds of sales under associates' stock
purchase plan 54,532 25,909
Payment on bank notes - (17,087)
Dividends paid (99,700) (86,777)
Other (111) 133
------- -------
Net cash provided (used) by financing activities (56,213) 29,551
------- -------
Increase (decrease) in cash and cash equivalents 19,232 (2,957)
Cash and cash equivalents at beginning of year 30,414 31,451
------- -------
Cash and cash equivalents at end of period $ 49,646 28,494
======= =======
Supplemental cash flow information:
Interest paid $ 18,441 12,649
Interest and dividends received $ 7,625 1,117
Income taxes paid $ 69,981 72,900
======= =======
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 $3.0
million in 1996 and $4.5 million in 1995. The cumulative current year
charge is $13.0 million as compared with $10.8 million in 1995. If
the FIFO method had been used, current quarter net earnings would
have been $65.1 million or $.43 per share as compared with net
earnings of $59.8 million or $0.40 per share in the previous year.
The cumulative year net earnings would have been $189.5 million, or
$1.25 per share as compared with $171.2 million, or $1.15 per share.
(D The Company increased its authorized Commercial Paper Program from
$200 million to $300 million. The Company also has short-term lines
of credit totaling $340 million. On April 3, 1996, there was $170.0
million in commercial paper and none from bank lines of credit
outstanding as compared to $110 million in commercial paper and $35.0
million from bank lines of credit outstanding on April 5, 1995.
(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 used for fiscal year 1996 is 35% as compared to 36% in 1995.
(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
lawsuits 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.
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 current quarter were $3.0 billion, a $259.5 million increase,
or 9.3% over the comparable quarter ended April 5, 1995. Year-to-date,
sales were $9.9 billion, a $1.0 billion 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 3.7% for the
quarter and 5.0% year-to-date. Average store sales increased 7.7% for the
quarter and 9.7% year-to-date.
The Company opened 49 new stores, averaging 47,800 square feet, enlarged or
remodeled 103 stores, and closed 44 older stores, averaging 29,900 square
feet. As of April 3, 1996, retail space totaled 45.4 million square feet.
Currently, 48 new stores are under construction. The Company plans to open
70 new stores in the current fiscal year. The Company has 1,180 stores in
operation compared with 1,183 stores last year. Of the 1,180 stores, 804,
or 68.1%, are larger than 35,000 square feet.
Gross profit increased $100.8 million for the quarter and $324.2 million,
year-to-date. As a percent to sales, gross profit for the current quarter
was 24.5%, compared to 23.1% in the previous year. Year-to-date, gross
profit as a percent to sales was 23.8% in the current year, compared to
22.9% 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 $90.8 million for the
current quarter and $300.9 million year-to-date. As a percent to sales,
operating and administrative expenses for the current quarter were 21.9%,
compared to 20.7% last year. Year-to-date, operating and administrative
expenses, as a percent to sales were 21.7% for the current year and 20.8%
for the previous year. Our increase in operating and administrative expense
is due to a higher payroll percentage in the larger stores, advertising,
insurance premiums, occupancy cost and depreciation expense.
Cash discounts and other income totaled $25.2 million for the third quarter
and $87.6 million year-to-date. Investment income for the current quarter
totaled $0.5 million compared to $0.1 million last year. Year-to-date,
investment income totaled $1.6 million for the current year, compared to
$0.6 million in the previous year. The increase in investment income is
due to an increase in funds available for investment.
Page 5
<PAGE>
Results of Operations, continued
Interest expense totaled $4.8 million for the current quarter compared to
$4.0 million for the comparable period last year. Year-to-date, interest
expense totaled $19.6 million for the current period compared to $12.3
million in the previous year. The increase in interest expense is due to a
increase in the issuance of commercial paper.
Earnings before income taxes were $97.3 million for the current quarter
compared to $89.0 million in the previous year. Year-to-date, earnings
before income taxes were $279.4 million in the current year and $257.0
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 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 $63.3 million, or $0.42 per share, for the current
quarter compared to $57.0 million, or $0.38 per share, for the comparable
period last year. Year-to-date, net earnings amounted to $181.6 million, or
$1.20 per share, compared to $164.5 million, or $1.10 per share, for the
previous year. The LIFO charge reduced net earnings by $1.8 million, or
$.01 per share, for the current quarter compared to $2.8 million, or $0.02
per share, in the previous year. Year-to-date, the LIFO charge reduced net
earnings by $7.9 million, or $.05 per share, compared to $6.8 million, or
$0.05 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 $49.6 million at April 3, 1996. Net cash
provided by operating activities amounted to $327.4 million for the 40
weeks ended April 3, 1996 compared to $227.5 million for the comparable
period last year. Capital expenditures totaled $255.0 million compared to
$261.8 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 $700 million in 1996. The Company has no material
construction or purchase commitments outstanding as of April 3, 1996.
Working capital amounted to $465.4 million at April 3,1996 compared to
$425.5 million at June 28, 1995.
Page 6
<PAGE>
Liquidity and Capital Resources, continued
The Company has an authorized $300 million Commercial Paper Program. In
addition, the Company has $340 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 3, 1996, $170.0 million of commercial paper was outstanding as
compared to $110.0 million in the previous year. Short-term borrowings
against our bank lines of credit were none as of April 3, 1996 as compared
to $35.0 million on April 5, 1995.
Excluding capital leases, the Company had no outstanding long-term debt as
of either April 3, 1996 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.
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 proceeding will
not have a material adverse effect on the Company's consolidated earnings
or financial position.
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 7
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
Part II - Other Information
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Exhibits
11.1 Computation of Earnings Per Share
Reports on Form 8-K
There were no reports on Form 8-K for the quarter ended April 3,1996.
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:April 24, 1996 RICHARD P. MCCOOK
Richard P. McCook
Financial Vice President and
Principal Financial Officer
Date:April 24, 1996 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 3, 1996 April 5, 1995
Average number of shares outstanding 151,491,280 148,872,120
=========== ===========
Net earnings $ 181,589 164,453
=========== ===========
Earnings per share $ 1.20 1.10
=========== ===========
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
All amounts in thousands except per share data.
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-26-1996
<PERIOD-END> APR-03-1996
<CASH> 49,646
<SECURITIES> 0
<RECEIVABLES> 175,519
<ALLOWANCES> 0
<INVENTORY> 1,245,705
<CURRENT-ASSETS> 1,576,476
<PP&E> 972,604
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,666,926
<CURRENT-LIABILITIES> 1,111,109
<BONDS> 0
0
0
<COMMON> 152,010
<OTHER-SE> 1,183,302
<TOTAL-LIABILITY-AND-EQUITY> 2,666,926
<SALES> 9,942,844
<TOTAL-REVENUES> 9,942,844
<CGS> 7,576,153
<TOTAL-COSTS> 7,576,153
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (19,605)
<INCOME-PRETAX> 279,368
<INCOME-TAX> 97,779
<INCOME-CONTINUING> 181,589
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 181,589
<EPS-PRIMARY> 1.20
<EPS-DILUTED> 1.20
</TABLE>
