Winn-Dixie Stores, Inc. (NYSE: WIN) announced the completion of its restructuring plan and results of operations for its fourth quarter and fiscal year ended June 27, 2001.

Excluding non-recurring charges, net earnings for the quarter were $48.3 million, or $0.34 per diluted share, compared to $20.5 million, or $0.14 per diluted share, for the same quarter last year. For the fiscal year, net earnings were $139.3 million, or $0.99 per diluted share, compared to $75.2 million, or $0.52 per diluted share. Including non-recurring charges, net earnings for the quarter were $13.0 million, or $0.09 per diluted share, compared to net loss of $(242.4) million, or $(1.70) per diluted share, for the same quarter last year. For the fiscal year, net earnings were $45.3 million, or $0.32 per diluted share, compared to net loss of $(228.9) million, or $(1.57) per diluted share, for the prior year. Non- recurring charges include restructuring expenses and interest on the company owned life insurance (COLI) tax case.

Sales for the 12 weeks ended June 27, 2001, were $3.0 billion, a decrease of $70.1 million, or 2.3% compared with the same quarter last year. For the 52 weeks ended June 27, 2001, sales were $12.9 billion, a $794.2 million decrease, or 5.8% under the prior year. Identical store sales decreased 5.2% for the quarter and 4.4% for the year. Identical sales decreased largely because of the elimination of unprofitable sales departments (deli/cafes, melon bars, salad bars, dry cleaners, etc.), the elimination of unprofitable sales items in remaining departments, a reduction in the number of 24-hour stores and construction disruptions from numerous store modifications (retrofits).

Al Rowland, Winn-Dixie's President and Chief Executive Officer, stated: "We are pleased to announce the completion of our restructuring plan. I want to acknowledge our management team for all their hard work over the past eighteen months in completing this undertaking in a timely manner. We are achieving our expected gross profit percent and are continuing our expense reduction programs. Our focus continues to be training and working with our various teams of associates to achieve our goal of improved customer service."

For the 52 weeks ended June 27, 2001, Winn-Dixie opened 17 new stores and acquired 77 stores, averaging 38,500 square feet, closed 20 stores, averaging 34,800 square feet, enlarged 6 stores and remodeled 5 store locations. As of June 27, 2001, there were 1,153 stores in operation, compared to 1,079 last year. Of the 1,153 stores, 975 are larger than 35,000 square feet, with 806 being Marketplace stores.

According to published reports, Winn-Dixie is one of the nation's largest retail food chains.

    Fourth Quarter
    Dollars in thousands except per share data

                              12 Weeks Ended             12 Weeks Ended
                               June 27, 2001              June 28, 2000
                           Amount           %        Amount             %

    Sales               $2,989,861         100.0    3,059,996         100.0
    Cost of sales        2,157,676          72.2    2,237,638          73.1
    Gross profit           832,185          27.8      822,358          26.9
    Operating &
     administrative
     expenses              739,776          24.7      793,417          25.9
    Restructuring and
     other non-recurring
     charges                56,497           1.9      396,029          13.0
    Operating income
     (loss)                 35,912           1.2    (367,088)        (12.0)
    Interest expense        14,800           0.5        6,784           0.2
    Earnings (loss)
     before income taxes    21,112           0.7    (373,872)        (12.2)
    Income taxes             8,107           0.3    (131,428)         (4.3)
    Net earnings (loss)    $13,005           0.4    (242,444)         (7.9)
    Basic earnings (loss)
     per share               $0.09                     (1.70)
    Diluted earnings (loss)
     per share               $0.09                     (1.70)
    Dividends per share     $0.255                      0.255
    Number of stores         1,153                      1,079


    Fiscal Year
    Dollars in thousands except per share data

                             52 Weeks Ended               52 Weeks Ended
                             June 27, 2001                 June 28, 2000

                          Amount            %        Amount             %
    Sales              $12,903,373         100.0   13,697,547         100.0
    Cost of sales        9,449,346          73.2    9,970,497          72.8
    Gross profit         3,454,027          26.8    3,727,050          27.2
    Operating &
     administrative
     expenses            3,180,297          24.7    3,586,351          26.2
    Restructuring and
     other non-recurring
     charges               147,245           1.1      396,029           2.9
    Operating income
     (loss)                126,485           1.0    (255,330)         (1.9)
    Interest expense        52,843           0.4       47,081           0.3
    Earnings (loss)
     before income taxes    73,642           0.6    (302,411)         (2.2)
    Income taxes            28,331           0.2     (73,516)         (0.5)
    Net earnings (loss)    $45,311           0.4    (228,895)         (1.7)
    Basic earnings (loss)
     per share               $0.32                     (1.57)
    Diluted earnings (loss)
     per share               $0.32                     (1.57)
    Dividends per share      $1.02                       1.02


    Consolidated Balance Sheets
    Dollar amounts in thousands

    Assets                                     June 27, 2001  June 28, 2000

    Current assets                                $1,599,201      1,471,922
    Property, plant and equipment, net             1,146,654      1,016,292
    Other assets                                     295,815        258,879
                                                  $3,041,670      2,747,093

    Liabilities and Shareholders' Equity

    Short-term borrowings                               $---        235,000
    Other current liabilities                      1,149,907      1,186,553
    Current liabilities                            1,149,907      1,421,553
    Long-term debt                                   697,414            ---
    Other liabilities                                422,695        457,705
    Shareholders' equity                             771,654        867,835
                                                  $3,041,670      2,747,093


    Cash Flow Information
    Dollar amounts in thousands

                                               52 Weeks           52 Weeks
                                                  Ended             Ended
                                              June 27, 2001     June 28, 2000

    Net cash provided by operating activities   $244,888          743,279
    Net cash used in investing activities      (443,591)        (196,118)
    Net cash provided by (used in)
     financing activities                        290,188        (542,331)
    Increase in cash and cash equivalents         91,485            4,830
    Cash and cash equivalents at
     beginning of year                            29,576           24,746
    Cash and cash equivalents at end of period  $121,061           29,576

    Capital expenditures, net                   $313,319          212,990
    Depreciation and amortization               $183,559          256,671
    Dividends paid                              $142,853          148,966


Supplemental and Explanatory Information

  • (1) Basis of Consolidation: 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.
  • (2) Interest Expense: During the fourth quarter of fiscal 2001, the Company capitalized interest totaling $0.7 million, and $5.9 million for the year, related to construction of new stores and a warehouse facility in Jacksonville, Florida.
  • (3) Income Taxes: In fiscal 2000, the Company reserved $30.4 million for taxes and $19.7 million for interest ($42.5 million after tax, or $0.29 per diluted share) after receiving an unfavorable opinion in October 1999 and a computational decision on January 11, 2000, from the U.S. Tax Court. Additional interest totaling $5.5 million was accrued for fiscal 2001. Interest will continue to accrue until the matter is finally resolved. The Tax Court upheld the Internal Revenue Service's position that interest related to loans on broad-based, company owned life insurance policies in 1993 was not deductible for income tax purposes. The Eleventh Circuit Court of Appeals issued an opinion on June 28, 2001 affirming the Tax Court's decision. Congress passed legislation phasing out such deductions over a three-year period in the fall of 1996. The Company held such policies and deducted interest on outstanding loans from March 1993 through December 1997. Management disagrees with the Tax Court's decision and plans further appeal. While the ultimate outcome of this litigation cannot be predicted with certainty, in the opinion of management, the ultimate resolution of this matter will not have any additional material adverse impact on the Company's financial condition or results of operations.
  • (4) Inventory: The following supplemental information is provided to facilitate comparisons with companies using the FIFO method.
                             Fourth Quarter                Year-to-Date
                              (Dollars in thousands except per share data)

    FIFO Basis           12 Weeks      12 Weeks      52 Weeks      52 Weeks
                           2001           2000         2001          2000

    Inventories         $1,419,013     1,373,773    1,419,013     1,373,773
    Net earnings from
     operations              (499)     (239,271)       37,957     (219,612)
    Diluted earnings
     per share                 ---        (1.68)         0.27        (1.51)


  • (5) Earnings Per Share: The following weighted average number of shares of common stock were used in the calculations for earnings per share:
                                               Basic          Diluted
                                                  (in thousands)
        2001
        Quarter                               140,246        141,173
        Fiscal Year                           139,824        140,399
    
        2000
        Quarter                               142,274        142,274
        Fiscal Year                           145,445        145,445
    
    
    
    • (6) Restructuring: During April 2000, the Board of Directors adopted management's ``Plan of Restructuring.'' As a result of the restructuring, the Company recorded expenses of approximately $396 million ($256 million after tax or $1.76 per diluted share) in the fourth quarter of fiscal 2000. An additional $147.2 million ($90.6 million after tax or $0.64 per diluted share) was expensed during fiscal 2001. Charges totaling $56.5 million ($34.7 million after tax or $0.25 per diluted share) were recorded in the current quarter.
    • (7) Results of operations: The following table shows the effect of the restructuring charges and interest on company owned life insurance for the current year.
        Dollars in thousands except per share data
    
    
                                         As            Non-          Excluding
                                       Reported      recurring      Non-recurring
                                                      Charges
        12 weeks ended June 27, 2001
    
        Net sales                    $2,989,861             ---     2,989,861
        Cost of sales                 2,157,676             ---     2,157,676
        Gross profit on sales           832,185             ---       832,185
        Operating and administrative
         expenses                       739,776             ---       739,776
        Restructuring and other
         non-recurring charges           56,497          56,497           ---
        Operating income                 35,912        (56,497)        92,409
        Interest expense                 14,800             887        13,913
        Earnings before income taxes     21,112        (57,384)        78,496
        Income taxes                      8,107        (22,049)        30,156
        Net earnings                    $13,005        (35,335)        48,340
        Basic earnings per share          $0.09          (0.25)          0.34
        Diluted earnings per share         0.09          (0.25)          0.34
    
    
    
                                        As             Non-          Excluding
                                     Reported        recurring     Non-recurring
                                                      Charges
        52 weeks ended June 27, 2001
    
        Net sales                   $12,903,373           ---      12,903,373
        Cost of sales                 9,449,346           ---       9,449,346
        Gross profit on sales         3,454,027           ---       3,454,027
        Operating and
         administrative expenses      3,180,297           ---       3,180,297
        Restructuring and other
         non-recurring charges          147,245       147,245             ---
        Operating income                126,485     (147,245)         273,730
        Interest expense                 52,843         5,512          47,331
        Earnings before income tax       73,642     (152,757)         226,399
        Income taxes                     28,331      (58,768)          87,099
        Net earnings                    $45,311      (93,989)         139,300
        Basic earnings per share          $0.32        (0.68)            1.00
        Diluted earnings per share        $0.32        (0.67)            0.99
    
    
  • (8) Reclassification: Cash discounts and other income have been reclassified as a reduction of cost of sales and operating and administrative expense, respectively. This reclassification is consistent with industry practice. Certain prior year amounts have been reclassified to conform to the current year's presentation.

    Cautionary Statement Regarding Forward-Looking Information and Statements

    The projections following this Cautionary Statement are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the results of operations of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those projected include, among others, the following possibilities: (i) our ability to achieve successfully the long-term benefits contemplated from the restructuring of operations adopted by the board of Directors on April 19, 2000, and which has been substantially completed; (ii) heightened competition, including specifically the intensification of price competition, the entry of new competitors, or the expansion of existing competitors in one or more of our operating regions, (iii) changes in federal, state or local legislation or regulations affecting food manufacturing, food distribution, or food retailing, including environmental compliance; (iv) the availability and terms of financing, including in particular the possible impact of changes in the ratings assigned to us by nationally recognized rating agencies; and (v) general business and economic conditions in our operating regions, including the rate of inflation/deflation and changes in population, consumer demands and spending, types of employment and numbers of jobs. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements. This news release, including the projections, should be read in conjunction with the reports of the Company on file with the Securities and Exchange Commission.

    Securities and Exchange Commission Fair Disclosure Forward-Looking Earnings Forecast

    To give guidance to all investors in the spirit of the Securities and Exchange Commission fair disclosure rules, the Company's earnings model projects the following:

                                12 Weeks Ending              52 Weeks Ending
                                September 19, 2001            June 26, 2002
                                    (dollars in thousands except per share)
    
                                Low           High          Low           High
    
        Net Earnings           $33,500        42,000     $225,000       246,000
    
        Diluted earnings
         per share               $0.24          0.30         1.60          1.75
    


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