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 12, 2005

¨	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 x No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨

As of February 4, 2005, there were 142,156,319 shares outstanding of the registrant’s common stock, par value $1.00 per share.

FORM 10-Q

TABLE OF CONTENTS


		Page
Part I: Financial Information
Item 1.	Financial Statements	1

	Condensed Consolidated Statements of Operations (Unaudited), For the 16 and 28 Weeks Ended January 12, 2005 and January 7, 2004	1

	Condensed Consolidated Balance Sheets January 12, 2005 (Unaudited) and June 30, 2004 (Note B)	3

	Condensed Consolidated Statements of Cash Flows (Unaudited), For the 28 Weeks Ended January 12, 2005 and January 7, 2004	4

	Notes to Condensed Consolidated Financial Statements (Unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46

Item 4.	Controls and Procedures	46

Part II: Other Information

Item 1.	Legal Proceedings	47

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48

Item 3.	Defaults Upon Senior Securities	48

Item 4.	Submission of Matters to a Vote of Security Holders	48

Item 5.	Other Information	49

Item 6.	Exhibits	51

Signatures		52

WINN-DIXIE STORES, INC. AND SUBSIDIARIES

Part I – Financial Information

Item 1. Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


	For the 16 Weeks Ended
Amounts in thousands except per share data	January 12, 2005			January 7, 2004


Net sales	$	3,075,633		3,228,118
Cost of sales, including warehouse and delivery expenses		2,264,446		2,408,848

Gross profit on sales		811,187		819,270
Other operating and administrative expenses		869,800		889,384
Impairment charges		8,102		29,502
Restructuring charges		1,888		—

Operating loss		(68,603	)	(99,616	)
Interest expense, net		10,765		8,923

Loss before income taxes		(79,368	)	(108,539	)
Income tax expense (benefit)		248,034		(42,795	)

Net loss from continuing operations		(327,402	)	(65,744	)

Discontinued operations (Note R):
Loss from discontinued operations		(24,051	)	(21,727	)
Loss on disposal of discontinued operations		(31,004	)	—
Income tax expense (benefit)		17,244		(7,931	)

Net loss from discontinued operations		(72,299	)	(13,796	)

Net loss	$	(399,701	)	(79,540	)

Basic loss per share:
Loss from continuing operations	$	(2.33	)	(0.47	)
Loss from discontinued operations		(0.51	)	(0.10	)

Basic loss per share	$	(2.84	)	(0.57	)

Diluted loss per share:
Loss from continuing operations	$	(2.33	)	(0.47	)
Loss from discontinued operations		(0.51	)	(0.10	)

Diluted loss per share	$	(2.84	)	(0.57	)

Dividends per share	$	—		0.05

Weighted average common shares outstanding-basic		140,748		140,657

Weighted average common shares outstanding-diluted		140,748		140,657

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

WINN-DIXIE STORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


	For the 28 Weeks Ended
Amounts in thousands except per share data	January 12, 2005			January 7, 2004


Net sales	$	5,412,242		5,646,898
Cost of sales, including warehouse and delivery expenses		3,971,704		4,168,619

Gross profit on sales		1,440,538		1,478,279
Other operating and administrative expenses		1,510,462		1,535,979
Impairment charges		96,084		29,502
Restructuring charges		85,094		—

Operating loss		(251,102	)	(87,202	)
Interest expense, net		18,039		13,234

Loss before income taxes		(269,141	)	(100,436	)
Income tax expense (benefit)		181,814		(39,868	)

Net loss from continuing operations		(450,955	)	(60,568	)

Discontinued operations (Note R):
Loss from discontinued operations		(39,188	)	(27,917	)
Loss on disposal of discontinued operations		(62,635	)	—
Income tax benefit		—		(10,190	)

Net loss from discontinued operations		(101,823	)	(17,727	)

Net loss	$	(552,778	)	(78,295	)

Basic loss per share:
Loss from continuing operations	$	(3.20	)	(0.43	)
Loss from discontinued operations		(0.73	)	(0.13	)

Basic loss per share	$	(3.93	)	(0.56	)

Diluted loss per share:
Loss from continuing operations	$	(3.20	)	(0.43	)
Loss from discontinued operations		(0.73	)	(0.13	)

Diluted loss per share	$	(3.93	)	(0.56	)

Dividends per share	$	—		0.10

Weighted average common shares outstanding-basic		140,738		140,645

Weighted average common shares outstanding-diluted		140,738		140,645

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

WINN-DIXIE STORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


Dollar amounts in thousands except par value	January 12, 2005			June 30, 2004
	(Unaudited)			(Note B)
ASSETS
Current Assets:
Cash and cash equivalents	$	31,587		56,818
Marketable securities		19,440		19,275
Trade and other receivables, less allowance for doubtful items of $4,289 ($2,539 at June 30, 2004)		108,746		109,051
Insurance claims receivable		16,895		—
Income tax receivable		55,593		49,148
Merchandise inventories less LIFO reserve of $214,070 ($219,270 at June 30, 2004)		904,396		940,529
Prepaid expenses and other current assets		40,007		24,814
Assets held for sale		24,302		51,034
Deferred income taxes		—		100,129

Total current assets		1,200,966		1,350,798

Property, plant and equipment, net		878,787		886,055
Goodwill		—		87,112
Non-current deferred income taxes		—		139,089
Other assets, net		155,804		155,837

Total assets	$	2,235,557		2,618,891

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current portion of long-term debt		260		273
Current obligations under capital leases		2,753		2,616
Accounts payable		410,376		511,443
Reserve for insurance claims and self-insurance		98,904		97,952
Accrued wages and salaries		103,731		93,385
Accrued rent		122,194		109,727
Accrued expenses		127,376		123,470

Total current liabilities		865,594		938,866

Reserve for insurance claims and self-insurance		185,435		182,514
Long-term debt		300,429		300,605
Long-term borrowings under revolving credit facility		153,000		—
Obligations under capital leases		11,110		13,566
Defined benefit plan		69,777		68,827
Lease liability on closed facilities, net of current portion		250,403		160,214
Other liabilities		35,037		36,954

Total liabilities		1,870,785		1,701,546

Commitments and contingent liabilities (Notes K, N, O and U)
Shareholders’ Equity:
Common stock $1 par value. Authorized 400,000,000 shares; 154,332,048 shares issued and 142,168,096 shares outstanding at January 12, 2005 and 154,332,048 issued and 142,028,240 outstanding at June 30, 2004		142,168		142,028
Additional paid-in-capital		30,970		22,931
Retained earnings		203,110		755,888
Accumulated other comprehensive loss		(11,476	)	(3,502	)

Total shareholders’ equity		364,772		917,345

Total liabilities and shareholders’ equity	$	2,235,557		2,618,891

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

WINN-DIXIE STORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	For the 28 Weeks Ended
Dollar amounts in thousands	January 12, 2005			January 7, 2004
Cash flows from operating activities:
Net loss	$	(552,778	)	(78,295	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Gain on sale of facilities		(16,221	)	—
Depreciation and amortization		81,225

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents