WINN DIXIE STORES INC - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 7, 2004

¨	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 incorporation or organization)		(IRS Employer 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)

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 þ No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes þ No ¨

As of January 7, 2004, there were 141,767,113 shares outstanding of the registrant’s common stock, $1 par value.

FORM 10-Q

TABLE OF CONTENTS


		Page
Part I: Financial Information

Item 1.	Financial Statements

	Condensed Consolidated Statements of Operations (Unaudited), For the 16 and 28 Weeks Ended January 7, 2004 and January 8, 2003	1

	Condensed Consolidated Balance Sheets January 7, 2004 (Unaudited) and June 25, 2003 (Note A)	3

	Condensed Consolidated Statements of Cash Flows (Unaudited), For the 28 Weeks Ended January 7, 2004 and January 8, 2003	4

	Notes to Condensed Consolidated Financial Statements (Unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28

Item 4.	Controls and Procedures	29

Part II: Other Information

Item 1.	Legal Proceedings	30

Item 2.	Changes in Securities and Use of Proceeds	30

Item 3.	Defaults Upon Senior Securities	30

Item 4.	Submission of Matters to a Vote of Security Holders	30

Item 5.	Other Information	31

Item 6.	Exhibits and Reports on Form 8-K	32

Signatures		34

WINN-DIXIE STORES, INC. AND SUBSIDIARIES

Part I – Financial Information

Item 1.

Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Amounts in thousands except per share data


	For the 16 Weeks Ended
	January 7, 2004			January 8, 2003
Net sales	$	3,560,979		3,786,485
Cost of sales, including warehouse and delivery expenses		2,654,713		2,692,054

Gross profit on sales		906,266		1,094,431
Other operating and administrative expenses		1,027,609		997,264

Operating (loss) income		(121,343	)	97,167
Bank agreement termination income		—		52,740

		(121,343	)	149,907
Interest expense, net		8,923		9,134

(Loss) earnings before income taxes		(130,266	)	140,773
Income tax (benefit) expense		(50,726	)	49,410

Net (loss) earnings	$	(79,540	)	91,363

Basic (loss) earnings per share	$	(0.57	)	0.65

Diluted (loss) earnings per share	$	(0.57	)	0.65

Dividends per share	$	0.05		0.05

Weighted average common shares outstanding - basic		140,657		140,390

Weighted average common shares outstanding - diluted		140,657		140,822

See accompanying notes to condensed consolidated financial statements (unaudited).

WINN-DIXIE STORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Amounts in thousands except per share data


	For the 28 Weeks Ended
	January 7, 2004			January 8, 2003
Net sales	$	6,229,603		6,619,250
Cost of sales, including warehouse and delivery expenses		4,594,367		4,725,258

Gross profit on sales		1,635,236		1,893,992
Other operating and administrative expenses		1,750,355		1,727,097

Operating (loss) income		(115,119	)	166,895
Bank agreement termination income		—		52,740

		(115,119	)	219,635
Interest expense, net		13,234		24,055

(Loss) earnings before income taxes		(128,353	)	195,580
Income tax (benefit) expense		(50,058	)	69,415

Net (loss) earnings	$	(78,295	)	126,165

Basic (loss) earnings per share	$	(0.56	)	0.90

Diluted (loss) earnings per share	$	(0.56	)	0.90

Dividends per share	$	0.10		0.10

Weighted average common shares outstanding - basic		140,645		140,376

Weighted average common shares outstanding - diluted		140,645		140,816

See accompanying notes to condensed consolidated financial statements (unaudited).

WINN-DIXIE STORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

Dollar amounts in thousands


	January 7, 2004			June 25, 2003
	(Unaudited)			(Note A)
ASSETS
Current Assets:
Cash and cash equivalents	$	45,130		127,515
Marketable securities		19,279		19,188
Trade and other receivables		118,637		115,485
Income tax receivable		40,075		—
Merchandise inventories less LIFO reserve of $213,108 ($214,547 as of June 25, 2003)		1,010,854		1,046,913
Prepaid expenses and other assets		45,671		35,449
Deferred income taxes		120,861		128,904

Total current assets		1,400,507		1,473,454

Cash surrender value of life insurance, net		7,599		16,779
Property, plant and equipment, net		948,158		978,601
Goodwill		87,808		87,808
Non-current deferred income taxes		98,994		106,315
Other assets, net		140,836		127,474

Total assets	$	2,683,902		2,790,431

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current portion of long-term debt	$	263		276
Current obligations under capital leases		2,996		3,439
Accounts payable		543,142		546,234
Reserve for insurance claims and self-insurance		103,506		97,109
Accrued wages and salaries		95,854		107,538
Accrued rent		119,888		127,654
Accrued expenses		122,033		104,705
Income taxes payable		—		31,775

Total current liabilities		987,682		1,018,730

Reserve for insurance claims and self-insurance		168,157		144,698
Long-term debt		310,276		310,767
Obligations under capital leases		16,889		21,344
Defined benefit plan		68,128		67,233
Lease liability on closed stores, net of current portion		140,715		149,427
Other liabilities		49,478		49,728

Total liabilities		1,741,325		1,761,927

Commitments and contingent liabilities (Notes I, J, L & Q)
Shareholders’ Equity:
Common stock $1 par value. Authorized 400,000,000 shares issued and 141,767,113 outstanding at January 7, 2004 and 140,818,083 at June 25, 2003		141,767		140,818
Retained earnings		804,631		894,137
Accumulated other comprehensive loss		(3,821	)	(6,451	)

Total shareholders’ equity		942,577		1,028,504

Total liabilities and shareholders’ equity	$	2,683,902		2,790,431

See accompanying notes to condensed consolidated financial statements (unaudited).

WINN-DIXIE STORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Dollar amounts in thousands


	For the 28 Weeks Ended
	January 7, 2004			January 8, 2003
Cash flows from operating activities:
Net (loss) earnings	$	(78,295	)	126,165
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		92,176		88,762
Asset impairment charges		36,404		—
Deferred income taxes		13,830		12,151
Stock compensation plans		3,794		2,405
Change in operating assets and liabilities:
Trade and other receivables		(3,152	)	(20,735	)
Merchandise inventories		36,059		(67,323	)
Prepaid expenses and other assets		(7,675	)	14,073
Accounts payable		(3,092	)	4,481
Income taxes receivable/payable		(71,850	)	31,925
Defined benefit plan		895		897
Reserve for insurance claims and self-insurance		29,856		(15,960	)
Other accrued expenses		(10,161	)	(58,315	)

Subtotal		38,789		118,526
Income taxes paid on company owned life insurance		—		(52,002	)

Net cash provided by operating activities		38,789		66,524

Cash flows from investing activities:
Purchases of property, plant and equipment		(93,385	)	(92,186	)
Increase in investments and other assets		(8,863	)	(18,439	)
Proceeds from sale of facilities		—		10,361
Marketable securities		(91	)	—

Net cash used in investing activities		(102,339	)	(100,264	)

Cash flows from financing activities:
Principal payments on long-term debt		(504	)	(103,217	)
Debt issuance cost		(2,503	)	—
Principal payments on capital lease obligations		(2,019	)	(1,871	)
Purchase of common stock		—		(40	)
Dividends paid		(14,128	)	(14,068	)
Other		319		1,981

Net cash used in financing activities		(18,835	)	(117,215	)

Decrease in cash and cash equivalents		(82,385	)	(150,955	)
Cash and cash equivalents at beginning of year		127,515		227,846

Cash and cash equivalents at end of period	$	45,130		76,891

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