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 January 10, 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 January 10, 1996, there were 152,670,423 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 16 and 28 Weeks Ended
January 10, 1996 and January 11, 1995 1
Condensed Consolidated Balance Sheets (Unaudited),
January 10, 1996 and June 28, 1995 2
Condensed Consolidated Statements of Cash Flows
(Unaudited), For the 28 Weeks Ended
January 10, 1996 and January 11, 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
Winn-Dixie Stores, Inc. Restricted Stock Plan Exhibit 10.2.1
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 16 Weeks Ended
MOST RECENT QUARTER Jan. 10, 1996 Jan. 11, 1995
Net sales $ 3,972,563 3,537,824
Cost of sales 3,026,251 2,727,912
---------- ----------
Gross profit 946,312 809,912
Operating & administrative expenses 862,700 732,072
---------- ----------
Operating income 83,612 77,840
Cash discounts & other income 34,431 32,408
Interest expense (6,566) (4,823)
---------- ----------
Earnings before income taxes 111,477 105,425
Provision for income taxes 39,017 37,953
---------- ----------
Net earnings $ 72,460 67,472
========== ==========
Earnings per share $ 0.48 0.45
========== ==========
Dividends per share $ 0.295 0.260
========== ==========
For the 28 Weeks Ended
FISCAL YEAR-TO-DATE Jan. 10, 1996 Jan. 11, 1995
Net sales $ 6,907,521 6,128,188
Cost of sales 5,283,650 4,727,730
---------- ----------
Gross profit 1,623,871 1,400,45
Operating & administrative expenses 1,489,336 1,279,324
---------- ----------
Operating income 134,535 121,134
Cash discounts & other income 62,362 55,084
Interest expense (14,840) (8,223)
---------- ----------
Earnings before income taxes 182,057 167,995
Provision for income taxes 63,720 60,478
---------- ----------
Net earnings $ 118,337 107,517
========== ==========
Earnings per share $ 0.78 0.72
========== ==========
Dividends per share $ 0.435 0.390
========== ==========
See accompanying notes to Condensed Consolidated Financial
Statements.
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Amounts in thousands
ASSETS Jan. 10, 1996 June 28, 1995
Cash and cash equivalents $ 61,240 30,414
Trade and other receivables 132,266 151,912
Associate stock loans 30,027 10,615
Merchandise inventories less LIFO reserve
of $222,485 ($212,485 at June 28, 1995) 1,269,329 1,159,584
Prepaid expenses 98,202 103,135
--------- ---------
Total current assets 1,591,064 1,455,660
--------- ---------
Investments and other assets 112,588 100,284
Prepaid income taxes 23,133 29,025
Net property, plant and equipment 963,912 897,823
--------- ---------
Total assets $ 2,690,697 2,482,792
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 584,964 555,551
Reserve for insurance claims and
self-insurance 42,273 59,373
Accrued wages and salaries 85,310 77,396
Accrued rent 55,588 54,888
Accrued expenses 142,054 130,285
Short-term borrowings 200,000 130,000
Current obligations under capital leases 3,545 3,298
Income taxes 24,474 19,331
--------- ---------
Total current liabilities 1,138,208 1,030,122
--------- ---------
Obligations under capital leases 76,017 77,653
Defined benefit plan 31,255 28,328
Reserve for insurance claims and self-insurance 113,134 103,384
Other liabilities 2,064 2,098
Shareholders' equity:
Common stock 152,670 75,561
Retained earnings 1,177,349 1,165,646
--------- ---------
Total shareholders' equity 1,330,019 1,241,207
--------- ---------
Total liabilities
and shareholders' equity $ 2,690,697 2,482,792
========= =========
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 28 Weeks Ended
FISCAL YEAR-TO-DATE Jan. 10, 1996 Jan. 11, 1995
Cash flows from operating activities:
Net earnings $ 118,337 107,517
Adjustments to reconcile net
earnings to net cash provided by
operating activities:
Depreciation and amortization 124,167 96,677
Prepaid income taxes 5,892 -
Defined benefit plan 2,927 2,682
Decrease in reserve for
self-insurance (7,350) (1,164)
Change in cash from:
Receivables 234 37,556
Merchandise inventories (109,745) (97,301)
Prepaid expenses 4,933 18,006
Accounts payable 30,049 12,770
Income taxes 5,143 1,286
Other current accrued expenses 26,293 (9,550)
-------- --------
Net cash provided by operating activities 200,880 168,479
-------- --------
Cash flows from investing activities:
Purchases of property, plant and
equipment, net (190,256) (168,390)
Increase in investments and other assets (12,304) (4,913)
-------- --------
Net cash used in investing activities (202,560) (173,303)
-------- --------
Cash flows from financing activities:
Increase in short-term borrowings 70,000 50,000
Payments on capital lease obligations (1,473) (1,689)
Purchase of common stock and changes in
retained earnings (25,048) (16,337)
Proceeds of sales under associates' stock
purchase plan 54,532 25,909
Dividends paid (65,471) (57,756)
Other (34) 145
-------- --------
Net cash provided by financing activities 32,506 272
-------- --------
Increase (decrease) in cash and
cash equivalents 30,826 (4,552)
Cash and cash equivalents at
beginning of year 30,414 31,451
-------- --------
Cash and cash equivalents at end of period $ 61,240 26,899
======== ========
Supplemental cash flow information:
Interest paid $ 14,325 8,045
Interest and dividends received $ 6,938 802
Income taxes paid $ 57,576 54,203
======== ========
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 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 $4.0 million in 1996 and $3.6 million in 1995.
The cumulative current year charge is $10.0 million as
compared with $6.3 million in 1995. If the FIFO method had
been used, current quarter net earnings would have been
$74.9 million or $0.49 per share as compared with net
earnings of $69.7 million or $0.47 per share in the previous
year. The cumulative year net earnings would have been
$124.4 million, or $0.82 per share as compared with $111.5
million, or $0.75 per share.
(D) The Company has an authorized $200 million Commercial Paper
Program and short-term lines of credit totaling $340
million. On January 10, 1996, there was $200 million in
commercial paper and none from bank lines of credit
outstanding as compared to $55 million in commercial paper
and $4.5 million from bank lines of credit outstanding on
January 11, 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>
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 $4.0 billion, a $434.7 million
increase, or 12.3% over the comparable quarter ended January 11,
1995. Year-to-date, sales were $6.9 billion, a $779.3 million,
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 5.6% for both the quarter
and year-to-date. Average store sales increased 10.2% for the
quarter and 10.6% year-to-date.
The Company opened 33 new stores, averaging 47,400 square feet,
enlarged or remodeled 75 stores, and closed 28 older stores,
averaging 29,600 square feet. As of January 10, 1996, retail
space totaled 44.9 million square feet. Currently, 47 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 1,158 stores last year. Of the 1,180
stores, 785, or 66.5%, are larger than 35,000 square feet.
Gross profit increased $136.4 million for the quarter and $223.4
million, year-to-date. As a percent to sales, gross profit for
the current quarter was 23.8%, compared to 22.9% in the previous
year. Year-to-date, gross profit as a percent to sales was 23.5%
in the current year, 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 $130.6 million
for the current quarter and $210.0 million year-to-date. As a
percent to sales, operating and administrative expenses for the
current quarter were 21.7%, compared to 20.7% last year. Year-to-date,
operating and administrative expenses, as a percent to
sales were 21.6% for the current year and 20.9% for the previous
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 $34.4 million in the
second quarter and $62.4 million year-to-date. Investment income
for the current quarter totaled $1.0 million compared to $0.3
million last year. Year-to-date, investment income totaled $1.1
million for the current year, compared to $0.5 million in the
previous year. The increase in investment income is due to an
increase in funds available for investment.
<PAGE>
Results of Operations, continued
Interest expense totaled $6.6 million for the current quarter
compared to $4.8 million for the comparable period last year.
Year-to-date, interest expense totaled $14.8 million for the
current year compared to $8.2 million in the previous year. The
increase in interest expense is due to an increase in the
issuance of commercial paper.
Earnings before income taxes were $111.5 million for the current
quarter compared to $105.4 million in the previous year. Year-to-date,
earnings before income taxes were $182.1 million in the
current year and $168.0 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 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 $72.5 million, or $0.48 per share, for
the current quarter compared to $67.5 million, or $0.45 per share
for the comparable period last year. Year-to-date, net earnings
amounted to $118.3 million, or $0.78 per share, compared to
$107.5 million, or $0.72 per share, for the previous year. The
LIFO charge reduced net earnings by $2.4 million, or $0.01 per
share, for the current quarter compared to $2.3 million, or $0.01
per share, in the previous year. Year-to-date, the LIFO charge
reduced net earnings by $6.1 million, or $0.04 per share,
compared to $3.9 million, or $0.03 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 $61.2 million at
January 10, 1996. Net cash provided by operating activities
amounted to $200.9 million for the 28 weeks ended January 10,
1996 compared to $168.5 million for the comparable period last
year. Capital expenditures totaled $190.3 million compared to
$168.4 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 January
10, 1996.
Working capital amounted to $452.9 million at January 10, 1996
compared to $425.5 million at June 28, 1995.
<PAGE>
Liquidity and Capital Resources, continued
The Company has an authorized $200 million Commercial Paper Pro-
gram. 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 January 10, 1996,
$200 million of commercial paper was outstanding as compared to
$55.0 million in the previous year. Short-term borrowings against
our bank lines of credit were none as of January 10, 1996 as
compared to $4.5 million on January 11, 1995.
Excluding capital leases, the Company had no outstanding
long-term debt as of either January 10, 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>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
Part II - Other Information
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Exhibits
10.2.1 Restricted Stock Plan, effective June 21, 1995
11.1 Computation of Earnings Per Share
Reports on Form 8-K
During the quarter ended January 10, 1996, a report on Form 8-K
was filed on October 4, 1995, reporting declaration of a 2-for-1
split of the Company's common stock for shareholders of record on
November 10, 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.
WINN-DIXIE STORES, INC.
Date: January 29, 1996 RICHARD P. MC COOK
Richard P. McCook
Financial Vice President and
Principal Financial Officer
Date: January 29, 1996 DAVID H. BRAGIN
David H. Bragin
Corporate Treasurer and
Principal Accounting Officer
<PAGE>
Exhibit 10.2.1
WINN-DIXIE STORES, INC. RESTRICTED STOCK PLAN
Winn-Dixie Stores, Inc. (the "Company") herein adopts the Winn-Dixie
Stores, Inc. Restricted Stock Plan (the "Plan") as part of its Officer
Compensation Program. The Plan shall be effective as of June 29, 1995,
conditioned upon the Plan being approved by the Company's shareholders in
accordance with Rule 16b-3(b) issued pursuant to the Securities and Exchange
Act of 1934, as amended (the "Exchange Act").
I. KEY FEATURES OF THE PLAN
A. Definition of Restricted Stock
"Restricted Stock" consists of actual shares of Company common
stock that cannot be sold, transferred or pledged until the
Restriction Period lapses. The Restriction Period will lapse
within 30 days after the date on which independent certified public
accountants have issued their opinion on the Company's financial
statements if the performance requirements for such shares are met.
While the restrictions remain, the holder of the shares has the
right to vote the shares and receive dividends.
B. Definition of Restriction Period
"Restriction Period" means the period commencing on the date an
award is granted and ending on such date or upon the achievement of
such requirements as established for each such award by the
Committee (the "Committee") appointed by the Board of Directors of
the Company (the "Board") pursuant to Section II.
C. Definition of Key Employee
"Key Employee" means an officer or other key employee of the
Company or its subsidiaries who, in the judgment of the Committee,
is responsible for or contributes to the management, growth or
profitability of the business of the Company or its subsidiaries.
D. Shares Subject to the Plan
-- The total number of shares that may be awarded under the Plan
is 1,000,000 shares.
E. Award of Restricted Stock
-- The Committee shall determine Key Employees who shall
participate in the Plan, the shares of stock awarded to each
Key Employee and the terms and conditions for shares to be
awarded, including, but not limited to, the Restriction Period
and the performance requirements.
-- The amount of stock to be issued in a participant's name each
year will depend upon: (i) a target award level set for such
participant; and (ii) the price of the stock at the time of
the grant.
-- The maximum number of shares of Restricted Stock that may be
granted under an award to any participant during any one of
the Company's fiscal years shall not exceed 10,000 shares.
-- The restrictions will lapse and the stock will belong to a
participant free and clear of any restrictions when the
Restriction Period expires, if and only if, the participant
remains in the employ of the Company or its subsidiaries
throughout the Restriction Period.
-- Except as otherwise provided by the Committee when an award is
made, if a participant leaves the employ of the Company or its
subsidiaries prior to the expiration of the Restriction Period
all shares of Restricted Stock shall be forfeited.
-- Forfeited shares will be available for grant by the Committee
to other participants.
-- Restricted stock must be held for at least six months from the
date of grant as required under Rule 16b-3(c)(1) issued
pursuant to the Exchange Act.
F. Restrictions
-- In accordance with Rule 16b-3(a)(2) of the Exchange Act, the
right of any individual to any award payable under the Plan
may not be assigned, transferred, pledged or encumbered,
either voluntarily or by operation of law, except by the laws
of descent and distribution upon death or pursuant to a
qualified domestic relations order as defined by the Internal
Revenue Code of 1986, as amended, or Title I of the Employee
Retirement Income Security Act, or the rules thereunder.
II. ADMINISTRATION OF THE PLAN
A. The Plan shall be administered by the Committee, as appointed by
the Board and serving at the Board's pleasure. All members of the
Committee shall be "disinterested" as such term is defined in Rule
16b-3(c)(2) issued pursuant to the Exchange Act.
B. The Committee shall have the authority to establish the terms and
conditions of all awards including, but not limited to,
establishing the Restriction Period and performance requirements
for each award.
C. The Committee's decisions and determinations under the Plan need
not be uniform and may be made selectively among individuals
whether or not such individuals are similarly situated.
D. The Committee shall have full power, discretion and authority to
interpret, construe and administer the Plan and any part thereof,
and its interpretations and constructions thereof and actions taken
thereunder shall be final, conclusive and binding on all persons
for all purposes.
III. AMENDMENT OR TERMINATION
A. The Board may, at any time, amend or terminate the Plan. The Plan
may also be amended by the Committee provided that all such
amendments shall be reported to the Board. No amendment or
termination of the Plan shall retroactively impair the rights of
any person with respect to an award.
B. Any amendment to the Plan shall be effective subject to being
approved by the Company's shareholders in accordance with Rule
16b-3(b) issued pursuant to the Exchange Act if the amendment would:
(i) materially increase the benefits accruing to participants under
the Plan; (ii) materially increase the numbers of securities that
may be issued under the Plan; or (iii) materially modify the
requirements as to eligibility for participation in the plan.
<PAGE>
Exhibit 11.1
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
Dollars in thousands except per share data
For the 28 Weeks Ended Jan. 10, 1996 Jan. 11, 1995
Average number of shares outstanding 151,258,777 148,454,414
=========== ===========
Net earnings $ 118,337 107,517
=========== ===========
Earnings per share $ 0.78 0.72
=========== ===========
<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> JAN-10-1996
<CASH> 61240
<SECURITIES> 0
<RECEIVABLES> 162293
<ALLOWANCES> 0
<INVENTORY> 1269329
<CURRENT-ASSETS> 1591064
<PP&E> 963912
<DEPRECIATION> 0
<TOTAL-ASSETS> 2690697
<CURRENT-LIABILITIES> 1138208
<BONDS> 0
0
0
<COMMON> 152670
<OTHER-SE> 1177349
<TOTAL-LIABILITY-AND-EQUITY> 2690697
<SALES> 3972563
<TOTAL-REVENUES> 3972563
<CGS> 3026251
<TOTAL-COSTS> 3026251
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (6566)
<INCOME-PRETAX> 111477
<INCOME-TAX> 39017
<INCOME-CONTINUING> 72460
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39017
<EPS-PRIMARY> .48
<EPS-DILUTED> .48
</TABLE>
