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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 March 31, 2004

 

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
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 March 31, 2004, there were 142,155,360 shares outstanding of the registrant’s common stock, $1 par value.

 

 

Table of Contents

FORM 10-Q

 

TABLE OF CONTENTS

 

         

Page

     Part I: Financial Information     

Item 1.

   

Financial Statements

     
     Condensed Consolidated Statements of Operations (Unaudited), For the 12 and 40 Weeks Ended March 31, 2004 and April 2, 2003    1
     Condensed Consolidated Balance Sheets March 31, 2004 (Unaudited) and June 25, 2003 (Note A)    3
     Condensed Consolidated Statements of Cash Flows (Unaudited), For the 40 Weeks Ended March 31, 2004 and April 2, 2003    4
     Notes to Condensed Consolidated Financial Statements (Unaudited)    5

Item 2.

    Management’s Discussion and Analysis of Financial Condition and Results of Operations    20

Item 3.

    Quantitative and Qualitative Disclosures About Market Risk    32

Item 4.

    Controls and Procedures    33
     Part II: Other Information     

Item 1.

    Legal Proceedings    34

Item 2.

    Changes in Securities and Use of Proceeds    35

Item 3.

    Defaults Upon Senior Securities    35

Item 4.

    Submission of Matters to a Vote of Security Holders    35

Item 5.

    Other Information    36

Item 6.

    Exhibits and Reports on Form 8-K    37
Signatures    39

 

Table of Contents

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 12 Weeks Ended
     March 31, 2004
     April 2, 2003

Net sales

    $ 2,666,275     2,822,327

Cost of sales, including warehouse and delivery expenses

      1,950,386     2,031,226
    
 

Gross profit on sales

      715,889     791,101

Other operating and administrative expenses

      710,265     698,617

Asset impairment charges

      13,097     —  
    
 

Operating (loss) income

      (7,473 )   92,484

Interest (income) expense, net

      (8,473 )   14,095
    
 

Earnings before income taxes

      1,000     78,389

Income taxes

      390     27,822
    
 

Net earnings

    $ 610     50,567
    
 

Basic earnings per share

    $ —       0.36
    
 

Diluted earnings per share

    $ —       0.36
    
 

Dividends per share

    $ 0.050     0.050
    
 

Weighted average common shares outstanding - basic

      140,678     140,473
    
 

Weighted average common shares outstanding - diluted

      142,095     140,835
    
 

 

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

 

1

Table of Contents

WINN-DIXIE STORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Amounts in thousands except per share data

 

     For the 40 Weeks Ended
     March 31, 2004
     April 2, 2003

Net sales

    $ 8,895,878     9,441,577

Cost of sales, including warehouse and delivery expenses

      6,544,753     6,756,484
    
 

Gross profit on sales

      2,351,125     2,685,093

Other operating and administrative expenses

      2,424,216     2,425,714

Asset impairment charges

      49,501     —  
    
 

Operating (loss) income

      (122,592 )   259,379

Bank agreement termination income

      —       52,740
    
 
       (122,592 )   312,119

Interest expense, net

      4,761     38,150
    
 

(Loss) earnings before income taxes

      (127,353 )   273,969

Income tax (benefit) expense

      (49,668 )   97,237
    
 

Net (loss) earnings

    $ (77,685 )   176,732
    
 

Basic (loss) earnings per share

    $ (0.55 )   1.26
    
 

Diluted (loss) earnings per share

    $ (0.55 )   1.26
    
 

Dividends per share

    $ 0.150     0.150
    
 

Weighted average common shares outstanding - basic

      140,655     140,405
    
 

Weighted average common shares outstanding - diluted

      140,655     140,822
    
 

 

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

 

2

Table of Contents

WINN-DIXIE STORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

Dollar amounts in thousands

 

     March 31, 2004
     June 25, 2003
  
     (Unaudited)     (Note A)  

ASSETS

               

Current Assets:

               

Cash and cash equivalents

    $ 81,263     127,515  

Marketable securities

      19,772     19,188  

Trade and other receivables

      108,780     115,485  

Income tax receivable

      45,573     —    

Merchandise inventories less LIFO reserve of $214,608 ($214,547 as of June 25, 2003)

      980,146     1,046,913  

Prepaid expenses and other assets

      18,207     35,449  

Deferred income taxes

      117,698     128,904  
    
 

Total current assets

      1,371,439     1,473,454  
    
 

Cash surrender value of life insurance, net

      11,649     16,779  

Property, plant and equipment, net

      953,193     978,601  

Goodwill

      87,808     87,808  

Non-current deferred income taxes

      95,858     106,315  

Other assets, net

      135,556     127,474  
    
 

Total assets

    $ 2,655,503     2,790,431  
    
 

LIABILITIES AND SHAREHOLDERS’ EQUITY

               

Current Liabilities:

               

Current portion of long-term debt

    $ 267     276  

Current obligations under capital leases

      2,806     3,439  

Accounts payable

      541,612     546,234  

Reserve for insurance claims and self-insurance

      97,171     97,109  

Accrued wages and salaries

      99,007     107,538  

Accrued rent

      102,531     127,654  

Accrued expenses

      127,455     104,705  

Income taxes payable

      —       31,775  
    
 

Total current liabilities

      970,849     1,018,730  
    
 

Reserve for insurance claims and self-insurance

      186,184     144,698  

Long-term debt

      300,655     310,767  

Obligations under capital leases

      14,018     21,344  

Defined benefit plan

      68,362     67,233  

Lease liability on closed stores, net of current portion

      138,186     149,427  

Other liabilities

      38,449     49,728  
    
 

Total liabilities

      1,716,703     1,761,927  
    
 

Commitments and contingent liabilities (Notes I, L, M, P & R)
Shareholders’ Equity:

               

Common stock $1 par value. Authorized 400,000,000 shares; 154,332,048 shares issued and 142,155,360 shares outstanding at March 31, 2004; and 154,332,048 shares issued and 140,818,083 shares outstanding at June 25, 2003.

      142,155     140,818  

Retained earnings

      799,915     894,137  

Accumulated other comprehensive loss

      (3,270 )   (6,451 )
    
 

Total shareholders’ equity

      938,800     1,028,504  
    
 

Total liabilities and shareholders’ equity

    $ 2,655,503     2,790,431  
    
 

 

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

 

3

Table of Contents

WINN-DIXIE STORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Dollar amounts in thousands

 

     For the 40 Weeks Ended  
     March 31, 2004
     April 2, 2003
  

Cash flows from operating activities:

               

Net (loss) earnings

    $ (77,685 )   176,732  

Adjustments to reconcile net (loss) earnings to net cash provided by operating activities:

               

Depreciation and amortization

      131,653     127,135  

Asset impairment charges

      49,501     —    

Deferred income taxes

      19,535     17,358  

Stock compensation plans

      5,919     2,847  

Change in operating assets and liabilities:

               

Trade and other receivables

      6,705     (27,750 )

Merchandise inventories

      66,767     10,023  

Prepaid expenses and other assets

      20,237     13,860  

Accounts payable

      (4,622 )   44,145  

Income taxes payable/receivable

      (77,348 )   43,248  

Defined benefit plan

      1,129     1,078  

Reserve for insurance claims and self-insurance

      41,549     (22,190 )

Other accrued expenses

      (25,209 )   (94,234 )
    
 

Subtotal

      158,131     292,252  

Income taxes paid on company owned life insurance

      —       (52,002 )
    
 

Net cash provided by operating activities

      158,131     240,250  
    
 

Cash flows from investing activities:

               

Purchases of property, plant and equipment

      (161,781 )   (135,724 )

Increase in investments and other assets

      (21,692 )   (31,886 )

Proceeds from sale of facilities

      —       10,361  

Marketable securities

      (524 )   —    
    
 

Net cash used in investing activities

      (183,997 )   (157,249 )
    
 

Cash flows from financing activities:

               

Principal payments on long-term debt

      (232 )   (246,255 )

Debt issuance cost

      (2,503 )   —    

Principal payments on capital lease obligations

      (2,812 )   (2,673 )

Purchase of common stock

      —       (40 )

Dividends paid

      (21,218 )   (21,110 )

Swap termination receipts/payments, net

      5,750     10,744  

Other

      629     1,418  
    
 

Net cash used in financing activities

      (20,386 )   (257,916 )
    
 

Decrease in cash and cash equivalents

      (46,252 )   (174,915 )

Cash and cash equivalents at beginning of year

      127,515     227,846  
    
 

Cash and cash equivalents at end of period

    $ 81,263     52,931  
    
 

Supplemental cash flow information:

               

Interest paid

    $ 16,745     63,489