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PART I
ITEM 1: BUSINESS
General
Winn-Dixie Stores, Inc., organized in Florida on December 26, 1928, is a
major food retailer with 1,159 stores in 13 southeastern and southwestern
states and the Bahamas Islands. According to published reports of sales at
June 29, 1994 the Company was the fifth largest in United States supermarket
sales.
All of the Company's subsidiaries except Bahamas Supermarkets, Limited are
wholly-owned. Except where the context indicates otherwise, the term
"Company" includes the parent company and all of its subsidiaries
collectively.
Financial information on industry segments and lines of business is
omitted because, apart from the principal business of operating retail
self-service food stores, the Company had no other lines of business or
industry segments.
Store Formats and Business Strategy
The business of the Company is the operation of a chain of retail
self-service food stores which sell groceries, meats, seafood, fresh produce,
deli/bakery, pharmaceuticals and general merchandise items. The Company's
stores offer broad lines of merchandise, including nationally advertised and
private label brands and unbranded merchandise (principally meats, seafood and
produce), and generally operate on the basis of competitive pricing. Food
items sold include dry groceries, dairy products, baked goods, meats, poultry
and fish, fresh fruit, vegetables, frozen foods and other items commonly
marketed by retail food stores. The Company's stores also sell many general
merchandise items, such as cigarettes, soaps, paper products, health and
cosmetic products, hardware, and numerous small household items. Some
locations (255) have pharmacies that fill prescriptions. Some locations (842)
have fresh seafood markets that sell fresh fish. At June 29, 1994, the
Company operated in the United States 1,145 retail stores of which 439 were
located in Florida, 129 in North Carolina, 126 in Georgia, 86 in South
Carolina, 84 in Alabama, 78 in Louisiana, 72 in Texas, 53 in Kentucky, 30 in
Virginia, 20 in Tennessee, 18 in Mississippi, 7 in Oklahoma and 3 in Indiana.
Such stores were operated under the names of "Winn-Dixie" (858), "Marketplace"
(286) and "Buddies" (1). In addition, the Company operated 14 stores in the
Bahamas Islands under the names "The City Meat Markets" (11) and "Winn-Dixie
Stores" (3).
Support and Other Services
The following table shows the locations of the Company's distribution
centers and its manufacturing and processing plants, as well as the principal
products produced in the plants:
ITEM 1: BUSINESS, continued
LOCATION FACILITIES
ALABAMA
Montgomery Distribution center; Plants: milk bottling and
frozen pizza
FLORIDA
Jacksonville Two Distribution centers; Plants: detergents;
paper bags; coffee, tea and spices
Madison Plant: meat processing
Miami Distribution center; Plant: milk bottling
Orlando Distribution center
Bartow Plant: egg processing
Plant City Plants: ice cream and milk bottling
Pompano Distribution center
Sarasota Distribution center
Tampa Distribution center
GEORGIA
Atlanta Distribution center
Fitzgerald Plants: jams, jellies, mayonnaise, salad
dressing, peanut butter and condiments; canned
and bottled carbonated beverages
Gainesville Plants: oleomargarine; natural cheese cutting
and wrapping, processed cheese and pimento
cheese
Valdosta Plants: crackers, cookies and snacks
KENTUCKY
Louisville Distribution center
LOUISIANA
New Orleans Distribution center
Hammond Distribution center; Plant: milk bottling
NORTH CAROLINA
Charlotte Distribution center
Raleigh Distribution center
High Point Plants: milk bottling and cultured products
SOUTH CAROLINA
Greenville Distribution center; Plants: milk bottling and
ice cream
TEXAS
Fort Worth Distribution center; Plant: milk bottling
BAHAMAS
Nassau Distribution center
ITEM 1: BUSINESS, continued
An insignificant portion of the production of the coffee, tea, detergent,
cheese, oleomargarine, egg, condiments, carbonated beverage and cookie plants
is sold to others.
Types of products produced by the Company for sale in its stores are
described above. Services provided by the Company such as check cashing are
incidental to the total business.
The Company has not publicly announced, or otherwise made public,
information about any new product or industry segment which would require
the investment of a material amount of the assets of the Company or which
otherwise is material.
Sources of available raw materials are factors which do not affect the
Company in any different manner than they affect other manufacturers and
processors of the goods identified.
Patents and trademarks owned by the Company are not of material
importance to its operations.
Seasonality does not materially affect the business of the Company.
However, due to the influx of winter residents to the Sunbelt, Florida in
particular, and increased purchases of food items for the Thanksgiving and
Christmas holiday seasons, there is a seasonal sales increase during the
period of November - April each fiscal year.
The Company and other food retailers have no unusual working capital
requirements.
The business of the Company is not dependent upon a single or a few
customers. The Company does not sell goods or services in an amount which
equals 10 percent or more of the Company's consolidated sales to any single
customer or group of customers under common control or to any affiliated group
of customers.
Backlog ordering is not a factor in the business of the Company.
No portion of the business of the Company is subject to renegotiation of
profits or termination of contracts or subcontracts at the election of any
government.
Marketing and Competition
In all areas in which the Company operates, the business is highly
competitive with local and national food chain stores as well as with
independent stores and markets. Many factors enter into the competition,
including price, quality of goods and services, product mix and convenience.
The retail food industry is extremely competitive. Each division faces
somewhat different competitive conditions. The following table lists the
major competitors for each division.
Division Major Competitors
Jacksonville Publix, Albertson's, Piggly Wiggly (Bruno), Food Lion
Tampa/Sarasota Publix, Kash N Karry, Albertson's, Food Lion
Montgomery Bruno, Delchamps, Walmart Supercenter
Miami/Pompano Publix, XTRA, Sedano's, Albertson's
Orlando Publix, Albertson's, Goodings, Food Lion
Greenville Food Lion, Bi-Lo, Super K
Raleigh Food Lion, Harris-Teeter, Kroger
Charlotte Food Lion, Harris-Teeter
Atlanta Kroger, Ingles, A&P, Cub, Publix
Louisville Kroger
New Orleans Delchamps, Schwegmans, National Tea, Albertson's
Fort Worth Kroger, Albertson's, Minyards, Food Lion, Randall's,
Walmart Supercenter
Bahamas Supervalu
Additionally, local chains and wholesaler-supported independents are well
represented in all regions.
Winn-Dixie is considered a major competitor in all geographic areas in
which it competes.
ITEM 1: BUSINESS, continued
The Company did not spend a material amount on Company-sponsored research
and development activities or on Company-sponsored research activities
relating to the development of new products, services or techniques, or the
improvement of existing products, services or techniques during any of the
years in the three-year period ended June 29, 1994.
Government Regulation
The Company's compliance with Federal, state and local provisions which
have been enacted or adopted regulating the discharge of materials into the
environment, or otherwise relating to the protection of the environment has
not had, and is not expected to have, a material affect on its capital
expenditures, earnings or competitive position.
Associates
At the end of fiscal 1994, the Company had 40,000 full-time and 72,000
part-time associates.
Bahamas
All sales are to customers within the United States and the Bahamas
Islands. The Company exports an insignificant amount of merchandise to its
subsidiaries in the Bahamas which operate 14 retail food stores as outlined
above. Retail sales in the Bahamas are not considered to be material.
ITEM 2: PROPERTIES
Stores
All of the retail stores operated by the Company are on premises occupied
on a rental basis. See "Note 9 of the Notes to Consolidated Financial
Statements", page F-14 included herein.
Support Properties
The warehousing and distribution centers are rented under leases due to
expire as follows: Greenville - 2002; Louisville - 2002; Tampa - 2017;
Miami - 2017; Raleigh - 2017; Montgomery - 2017; New Orleans -
2017; Sarasota - 2017; Jacksonville (Edgewood) - 2002; Fort Worth -
2016; Atlanta - 2002; Pompano - 2003; Charlotte - 2004; Orlando -
2005; Jacksonville (Commonwealth) - 2011 and Hammond - 2016. All of these
contain renewal options, which vary from lease to lease.
The Hialeah warehouse facility, the milk plant in Miami and the Deep
South plant in Orlando, Florida, are no longer in operation and have been
replaced with new facilities. These properties are now owned in fee by the
Company and are being held for sale.
The Company's Valdosta cracker and cookie bakery, Fort Worth dairy plant,
Madison meat processing plant, Plant City ice cream and milk bottling plant,
and Gainesville margarine and cheese processing and packaging plant are owned
in fee.
The Company's Greenville milk bottling and ice cream; Jacksonville
coffee, tea and spices processing, detergent and bag plants; Montgomery milk
bottling plant; and Hammond milk bottling plant are situated at the leased
warehousing and distribution center locations in those cities. The Bartow egg
processing plant, High Point milk bottling and cultured products plant,
Montgomery frozen pizza plant and the Fitzgerald jam, jellies, mayonnaise,
salad dressing, peanut butter, condiments and canned and bottled carbonated
beverage plant are rented under leases.
All of the above support properties are considered to be in excellent
condition.
ITEM 3: LEGAL PROCEEDINGS
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.
The U.S. Environmental Protection Agency has notified the Company that it
is one of the many potentially responsible parties (PRPs) for cleanup of two
designated Superfund sites located in Tampa, Florida, three such sites in
Jacksonville (2 related sites) and one site in Madison, Florida. The Company
may be a PRP for cleanup of one non-Superfund site in Tarrant County, Texas.
Although cleanup costs are believed to be substantial, accurate estimates will
not be available until studies have been completed at the sites.
The Company has entered into orders by consent with numerous other PRPs to
conduct studies and do cleanup for three of the Superfund sites and is
negotiating an agreement with PRPs who are under an order at another Superfund
site to determine the most cost-effective way to clean up such sites.
Although under federal statutes the Company is jointly and severally liable
for cleanup costs at each location, the Company's share of total costs is
estimated not to exceed $350,000 for four of the Superfund sites and the Texas
site.
The Company believes it is not a responsible party for cleanup of the
Madison, Florida, and Tarrant County, Texas, sites and has no estimate of
costs for those matters. Other than these two and the New Mexico site
mentioned below, these involve wastes the Company paid to be properly disposed
and were mishandled by disposal companies or public disposal sites.
At one of the Tampa sites, the Company is one of 14 parties named as
respondents in a Unilateral Administrative Order for Remedial Design and
Remedial Action under 47 U.S.C. Section 9606(a) relating to a disposal site
formerly operated by Hillsborough County, Florida. The parties are ordered to
operate, maintain and monitor a water cleaning system and perform Remedial
Design for the site. The costs to the Company are estimated at $150,000 in
fiscal year 1994 with substantial credits for this year, with additional
annual costs for an indefinite period thereafter.
The Company is also involved in the cleanup of a fuel tank leak at a New
Mexico site formerly owned by it. The cleanup costs are to be prorated with
others on the basis of the total time of ownership of the participants. The
Company's share is 15% of the total costs estimated to be less than $150,000,
with minimal annual monitoring costs thereafter.
It is the Company's policy to accrue and charge against earnings the
environmental cleanup costs when it is probable that a liability has been
incurred and an amount can be reasonably estimated, including evaluation of
the other PRPs' ability to pay. The Company believes its ultimate liability as
to these environmental matters will not necessitate significant capital
outlays, will not materially affect the annual earnings of the Company, nor
cause material changes in the Company's business. It is not possible to
quantify future environmental costs because many issues relate to actions by
third parties or changes in environmental regulation.
Although the amount of liability with respect to all other claims and
lawsuits cannot be ascertained, management is of the opinion that any
resulting liability will not have a material affect on the Company's
consolidated earnings or financial position.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
quarter ended June 29, 1994.
Executive Officers of the Registrant
Set forth below is certain information concerning the executive officers
of the Company:
YEAR YEAR FIRST
AGE IN APPOINTED EMPLOYED
YEARS AT TO CURRENT BY
NAME 06-29-94 OFFICE HELD POSITION WINN-DIXIE
A. Dano Davis 49 Chairman of the Board and 1988 1968
Principal Executive Officer
James Kufeldt 56 President 1988 1961
C. H. McKellar 56 Executive Vice President 1988 1957
E. T. Walters 60 Senior Vice President 1989 1959
C. E. Winge 49 Senior Vice President 1988 1963
T. E. McDonald 57 Senior Vice President 1986 1955
H. E. Hess 54 Senior Vice President 1988 1958
W. E. Ripley, Jr. 48 Vice President, Secretary
and General Counsel 1991 1978
R. P. McCook 41 Financial Vice President and
Principal Financial Officer 1984 1984
L. H. May 49 Vice President 1989 1964
D. H. Bragin 50 Treasurer 1985 1961
R. J. Brocato 50 Vice President 1993 1963
W. C. Calkins 55 Vice President 1987 1958
J. W. Critchlow 47 Vice President 1988 1967
R. J. Ehster 53 Vice President 1983 1958
R. R. George 49 Vice President 1993 1966
D. G. Lafever 45 Vice President 1990 1966
H. E. Miller 62 Vice President 1984 1956
J. R. Pownall 57 Vice President 1986 1955
L. J. Sadlowski 53 Vice President 1983 1961
R. A. Sevin 51 Vice President 1987 1961
B. B. Tripp 57 Vice President 1987 1954
D. L. Whitford 46 Vice President 1991 1964
J. D. Bell, Vice President and Director of Services, passed away during
fiscal year 1994. Jim Bell had been an associate for 42 years. A.C. Webb was
elected Vice President and Director of Services.
M. A. Sellers, Director of Produce and Floral Operations, was elected Vice
President and Director of Produce and Floral Operations.
All of the officers listed above have been employed for the past five years
in either the same capacity as listed, or in a position with the Company which
was consistent in occupation with the present assignment.
Officers are elected annually by the Board of Directors and serve for a
one-year period or until their successors are elected. No officers have
employment contracts with the Company.
PART II
ITEM 5: MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
The principal market on which the Company's common stock is traded is the
New York Stock Exchange. The number of record holders of the Company's common
stock as of August 15, 1994 was 39,226.
Information required by this Item concerning sales prices of the
Company's common stock and the frequency and amount of dividends is hereby
incorporated by reference to "Note 12 of the Notes to Consolidated Financial
Statements", page F-17 included herein.
ITEM 6: SELECTED FINANCIAL DATA
The information required by this Item is on page F-1 included herein.
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by this Item is on page F-2 included herein.
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial statements and supplementary data are as set forth in the
"Index to Consolidated Financial Statements, Supporting Schedules and
Supplemental Data" on page 13 included herein.
ITEM 9:CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There have been no disagreements on accounting and financial disclosure
between the Company and its auditors within the 24 months prior to June 29,
1994.
PART III
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 11: EXECUTIVE COMPENSATION
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by these Items are incorporated herein by
reference to the Company's definitive proxy statement to be filed on or
before September 2, 1994 in connection with its Annual Meeting of
Shareholders.
PART IV
ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
Financial Statements and Schedules:
(a) Exhibit and Financial Statements and Schedules
(1) Financial Statements:
See Index to Consolidated Financial Statements, Supporting
Schedules and Supplemental Data on page 13 included herein.
(2) Financial Statement Schedules:
See Index to Consolidated Financial Statements, Supporting
Schedules and Supplemental Data on page 13 included herein.
Exhibits:
Certain of the following exhibits which have heretofore been filed with
the Securities and Exchange Commission under the Securities Act of 1933 or the
Securities Exchange Act of 1934 and which are designated in prior filings as
noted below, are hereby incorporated by reference and made a part hereof:
Exhibit Incorporated by
Number Description of Exhibit Reference From
3.1 Restated Articles of Incorporation as filed with Previously filed as Exhibit 3.1 to Form
the Secretary of State of Florida . 10-K for the year ended June 30, 1993,
which Exhibit is herein incorporated by
reference.*
3.1.1 Articles of Amendment to Restated Articles of Previously filed as Exhibit 3.1.1 to Form
Incorporation as adopted October 7, 1992. 10-K for the year ended June 30, 1993,
which Exhibit is herein incorporated by
reference.*
3.1.2 Amendment to Restated Articles of Incorporation Previously filed as Exhibit 3.1.2 to Form
as adopted October 7, 1992. 10-K for the year ended June 30, 1993,
which Exhibit is herein incorporated by
reference.*
3.2 Restated By-Laws of the Registrant as amended
through June 22, 1994.
3.2.1 Amendment to By-Laws of the Registrant as
adopted by the Board of Directors of Registrant
on October 6, 1993.
3.2.2 Amendment to By-Laws of the Registrant as
adopted by the Board of Directors of Registrant
on June 22, 1994.
9.1 Agreement of Shareholders of D.D.I., Inc. Previously filed as Exhibit 9.1 to Form
(formerly Vadis Investments, Inc.) dated April 10-K for the year ended June 30, 1993,
19, 1989. which Exhibit is herein incorporated by
reference.*
10.1 Revised Stock Purchase Plan for Employees, as Previously filed as Exhibit 10.1 to Form
amended through October 7, 1992. 10-K for the year ended June 30, 1993,
which Exhibit is herein incorporated by
reference.*
10.1.1 Amendment to Revised Stock Purchase Plan for Previously filed as Exhibit 10.1.1 to
Employees adopted October 7, 1992. Form 10-K for the year ended June 30,
1993, which Exhibit is herein
incorporated by reference.*
10.2 Annual Officer Incentive Compensation Plan as Previously filed as Exhibit 10.2 to Form
amended, effective June 17, 1991. 10-K for the year ended June 30, 1993,
which Exhibit is herein incorporated by
reference.*
10.3 Long-term Officer Incentive Compensation Plan Previously filed as Exhibit 10.3 to Form
as amended, effective June 27, 1991. 10-K for the year ended June 30, 1993,
which Exhibit is herein incorporated by
reference.*
10.4 Employees' Profit Sharing Retirement Plan of
Winn-Dixie Stores, Inc., as amended and
restated effective as of January 1, 1993, as
amended through October 6, 1993.
10.4.1 Amendment to Employees' Profit Sharing
Retirement Plan of Winn-Dixie Stores, Inc., as
adopted October 6, 1993, effective January 1,
1993.
10.5 Key Employee Stock Option Plan effective Previously filed as Exhibit 10.5 to Form
January 24, 1990, as amended through October 10-K for the year ended June 30, 1993,
7, 1992. which Exhibit is herein incorporated by
reference.*
10.5.1 Amendment to Key Employee Stock Option Plan Previously filed as Exhibit 10.5.1 to
dated June 22, 1992. Form 10-K for the year ended June 30,
1993, which Exhibit is herein
incorporated by reference.*
10.6 Supplemental Retirement Plan dated July 1,
1994
11.1 Computation of Earnings Per Share.
22.1 Subsidiaries of Winn-Dixie Stores, Inc.
24.1 Consent of KPMG Peat Marwick.
* Incorporated herein by reference as indicated
(b) Reports on Form 8-K:
The Company did not file any reports on Form 8-K during the quarter
ended June 29, 1994.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange 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.
A. DANO DAVIS
By -------------------------
A. Dano Davis, Chairman
September 16, 1994
Date -----------------------
Pursuant to the requirements of the Securities Act of 1934 this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
A. DANO DAVIS Chairman (Principal September 16, 1994
- ----------------- executive officer) and
(A. Dano Davis) Director
J. KUFELDT President and Director September 16, 1994
- -----------------
(J. Kufeldt)
RICHARD P. MCCOOK Financial Vice President September 16, 1994
- ----------------- (Principal financial officer)
(Richard P. McCook)
D. H. BRAGIN Treasurer (Principal September 16, 1994
- ----------------- accounting officer)
(D. H. Bragin)
A. D. DAVIS Director September 16, 1994
- --------------------
(A. D. Davis)
ROBERT D. DAVIS Director September 16, 1994
- --------------------
(Robert D. Davis)
T. WAYNE DAVIS Director September 16,1994
- --------------------
(T. Wayne Davis)
SIGNATURES, continued
C. H. MCKELLAR Director September 16, 1994
- --------------------
(C. H. McKellar)
RADFORD D. LOVETT Director September 16, 1994
- --------------------
(Radford D. Lovett)
CHARLES P. STEPHENS Director September 16, 1994
- --------------------
(Charles P. Stephens)
Director September , 1994
- --------------------
(Armando M. Codina)
DAVID F. MILLER Director September 16, 1994
- --------------------
(David F. Miller)
CARLETON T. RIDER Director September 16, 1994
- --------------------
(Carleton T. Rider)
WINN-DIXIE STORES, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Selected Financial Data F-1
Management's Discussion and Analysis of Financial Condition
and Results of Operations F-2
Consolidated Financial Statements and Supplemental Data:
Independent Auditors' Report F-4
Report of Management F-4
Consolidated Statements of Earnings, Years ended June 29, 1994,
June 30, 1993 and June 24, 1992 F-5
Consolidated Balance Sheets, June 29, 1994 and June 30, 1993 F-6
Consolidated Statements of Cash Flows, Years ended June 29, 1994,
June 30, 1993 and June 24, 1992 F-7
Consolidated Statements of Shareholders' Equity, Years ended
June 29, 1994, June 30, 1993 and June 24, 1992 F-8
Notes to the Consolidated Financial Statements F-9
Financial Statement Schedules:
Independent Auditors' Report on Financial Statement Schedules S-1
V Consolidated Property, Plant and Equipment, Years Ended
June 29, 1994, June 30, 1993 and June 24, 1992 S-2
VI Consolidated Accumulated Depreciation and Amortization of Property,
Plant and Equipment, Years ended June 29, 1994, June 30, 1993
and June 24, 1992 S-3
VII Consolidated Valuation and Qualifying Accounts, Years
ended June 29, 1994, June 30, 1993 and June 24, 1992 S-4
IX Short-Term Borrowings, Years ended June 29, 1994, June 30, 1993
and June 24, 1994 S-5
X Consolidated Supplementary Income Statement Information, Years
ended June 29, 1994, June 30, 1993 and June 24, 1992 S-6
All other schedules are omitted either because they are not applicable or
because information required therein is shown in the Financial Statements or
Notes thereto.
SELECTED FINANCIAL DATA
1994 1993* 1992 1991 1990
Dollars in millions except per share data
Sales
Net sales $ 11,082 10,832 10,337 10,074 9,744
Percent increase 2.3 4.8 2.6 3.4 6.5
Average annual sales per store $ 9.6 9.4 8.7 8.3 8.0
Earnings Summary
Gross profit $ 2,534 2,446 2,360 2,261 2,127
Percent of sales 22.9 22.6 22.8 22.4 21.8
LIFO charge (credit) $ (2) 1 (11) 9 18
Operating and administrative expenses $ 2,270 2,197 2,137 2,100 2,005
Percent of sales 20.5 20.3 20.7 20.8 20.6
Earnings before income taxes and
cumulative effect of change
in accounting principle $ 348 364 328 259 224
Earnings before effect of change
in accounting principle $ 216 236 216 171 153
Per share $ 2.90 3.11 2.82 2.20 1.93
Net earnings $ 216 236 196 171 153
Per share $ 2.90 3.11 2.55 2.20 1.93
Percent of net earnings to:
Sales 2.0 2.2 1.9 1.7 1.6
Average equity 21.2 24.4 21.6 20.4 19.1
Dividends
Dividends paid $ 107.4 100.5 92.0 84.1 77.9
Percent of net earnings 49.7 42.5 46.9 49.2 51.1
Per share (present rate $156) $ 1.44 1.32 1.20 1.08 0.99
Common Stock (WIN)
Total shares outstanding (000,000) 74.2 75.0 76.9 77.1 78.3
NYSE-Stock price range
Common - High $ 67.75 79.75 44.63 41.25 34.06
Low $ 43.50 41.63 34.63 29.00 24.00
Financial Data
Cash flow information:
Net cash provided by
operating activities $ 436.3 213.0 338.3 190.8 316.2
Net cash used in investing activities $ 214.7 81.4 216.9 55.1 214.6
Net cash used in financing activities $ 212.4 128.7 109.2 135.8 125.2
Capital expenditures, net $ 277.7 194.8 164.5 154.7 114.1
Depreciation and amortization $ 157.4 141.1 126.9 113.4 118.1
Working capital $ 488.0 544.7 550.8 435.8 426.4
Current ratio 1.6 1.6 1.7 1.6 1.6
Total assets $ 2,147 2,063 1,977 1,817 1,733
Obligations under capital leases $ 85 87 90 97 83
Shareholders' equity $ 1,057 985 952 860 813
Book value per share $ 14.26 13.14 12.39 11.15 10.39
Stores
At year - end - In operation 1,159 1,151 1,189 1,207 1,217
Opened and acquired during year 60 40 35 46 42
Closed or sold during year 66 78 53 56 54
Remodeled or enlarged during year 87 73 65 54 33
New / remodeled / enlarged -
in last five years 535 475 464 481 514
Year - end retail square footage (000,000) 40.7 39.0 38.6 37.9 37.0
Average store size at year - end (000) 35.1 33.9 32.4 31.4 30.4
Other Year-end Data
Associates (000) 112 105 102 106 101
Shareholders accounts (000) 39.5 41.4 42.8 39.4 33.6
Shareholders per store 34 36 36 33 28
Taxes
Federal, state and local $ 261 255 233 207 186
Per share $ 3.50 3.35 3.04 2.65 2.35
* 53 Weeks
F-1
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations.
Sales for 1994 amounted to $11.1 billion, an increase of 2.3% over
1993, a 53 week year. On a comparable 52 week year basis, the sales
increase would have been 4.3%. The change in comparable store sales
amounted to 2.0%, 2.8% and 1.8% for each of the last three fiscal
years. Comparable store sales for 1994 reflect the softness in the
retail food industry due to a weak economy throughout the year and
increased competitive activity in our trade area. The Company
operated 1,159, 1,151 and 1,189 retail stores with 40.7 million, 39.0
million and 38.6 million square feet at the end of fiscal year 1994,
1993 and 1992, respectively.
In fiscal year 1994, the Company opened and acquired 60 stores
averaging 43,500 square feet, enlarged or remodeled 87 stores and
closed 66 stores, averaging 26,300 square feet.
As a percent of sales, gross profit margins were 22.9%, 22.6% and
22.8% in fiscal 1994, 1993 and 1992, respectively. The increase in
gross profit margins is a result of our computer-assisted merchandise
acquisition systems and our forward-buy purchasing programs.
Approximately 92% of the Company's inventories are valued under the
LIFO (last-in, first-out) method. The LIFO calculations resulted in a
$2.0 million pre-tax increase in gross profit in 1994, a pre-tax
decrease in gross profit of $0.5 million in 1993 and a pre-tax
increase in gross profit of $10.8 million in 1992.
Operating and administrative expenses, as a percent of sales, were
20.5%, 20.3% and 20.7% in fiscal 1994, 1993 and 1992, respectively.
Our major increases in operating and administrative expenses are
depreciation, payroll and occupancy costs.
Cash discounts and other income amounted to $98.1 million, $132.4
million and $119.4 million in 1994, 1993 and 1992, respectively.
Gains (losses) on the sales of securities and other assets amounted to
$(3.2) million in 1994, $4.5 million in 1993 and $3.8 million in 1992.
Investment income amounted to $4.0 million, $8.4 million and $10.0
million in fiscal 1994, 1993 and 1992, respectively. The decrease in
1994 was due to a reduction in financial income, including the
elimination of dividends from our Bahamas subsidiary.
Interest expense totaled $14.3 million, $18.1 million and $15.1
million in fiscal 1994, 1993 and 1992, respectively. Interest expense
primarily reflects a computation of interest on capital lease
obligations. The 1994 decrease in other interest expense is due to a
decrease in short-term borrowings.
Earnings before income taxes and cumulative effect of change in
accounting principle were $348.5 million, $363.7 million and
$328.0 million in fiscal 1994, 1993 and 1992, respectively. The
decrease in pre-tax earnings is primarily a result of the decrease in
cash discounts and other income. The effective income tax rates were
38.0%, 35.0% and 34.0% for fiscal 1994, 1993 and 1992, respectively.
Earnings before cumulative effect of change in accounting principle
were $216.1 million, or $2.90 per share in 1994, $236.4 million,
or $3.11 per share in 1993 and $216.4 million, or $2.82 per share in
1992.
In June 1992, we adopted the Financial Accounting Standards Board
(FASB) Statement Number 109, "Accounting for Income Taxes." This
change in accounting policy resulted in a non-cash charge to the net
earnings of the Company in the amount of $20.5 million, or $0.27 per
share in 1992.
Results of Operations (cont.)
Net earnings amounted to $216.1 million, or $2.90 per share for
1994, $236.4 million, or $3.11 per share for 1993 and $195.9 million,
or $2.55 per share for 1992. The LIFO calculations increased net
earnings by $1.1 million, or $0.01 per share in 1994, decreased
earnings by $0.3 million, or $0.00 per share for 1993 and increased
net earnings by $7.1 million, or $0.09 per share for 1992.
Liquidity and Capital Resources.
The Company's financial condition remains very sound and very
strong. Cash and cash equivalents and short-term investments amounted
to $31.5 million at year-end. Cash provided by operating activities
amounted to $436.3 million in 1994, $213.0 million in 1993 and $338.3
million in 1992.
Net capital expenditures totaled $277.7 million, compared to $194.8
million for the previous year. These expenditures were for new store
locations, store enlargements and remodelings, the expansion of a
warehouse facility and a new manufacturing facility. Total capital
investment in Company retail and support facilities, including
operating leases, is estimated to be $525 million in 1994 and
projected to be $600 million in 1995. The Company has no material
construction or purchase commitments outstanding as of June 29, 1994.
Working capital amounted to $488.0 million, $544.7 million and
$550.8 million for 1994, 1993 and 1992, respectively. Inventories on
a FIFO (first-in, first-out) basis increased $15.4 million, primarily
due to the increase in the number of stores and our store enlargement
program.
The Company has an authorized $200 million commercial paper
program. In support of these programs, or as an independent source of
funds, the Company also has $250 million of short-term lines of
credit. These lines of credit are available at any time during the
year and are renewable on an annual basis. There was $9.5 million
borrowed against the bank lines of credit at the end of 1994. There
was $80.0 million in commercial paper outstanding at the end of 1993.
Excluding capital lease obligations, the Company had no outstanding
long-term debt as of June 29, 1994 or June 30, 1993.
The Company's cash flow from operations and available credit
facilities are considered adequate to fund both the short-term and
long-term capital needs of the Company.
The Company has been notified as one of the many Potentially
Responsible Parties by the Environmental Protection Agency with
respect to the clean up of hazardous wastes at five Superfund sites
and two additional sites. The Company is in the process of
determining the potential liability and the most cost-effective way to
clean up such sites. The Company believes its ultimate liability as to
these environmental matters will not necessitate significant capital
outlays, will not materially affect the annual earnings of the
Company, nor cause material changes in the Company's business.
Impact of Inflation.
Inflation in food prices continues to be lower than the overall
increase in the Consumer Price Index. Winn-Dixie's primary costs,
inventory and labor, increase with inflation. Recovery of these costs
has to come from improved operating efficiencies and, to the extent
permitted by our competition, through improved gross profit margins.
INDEPENDENT AUDITORS' REPORT
The Shareholders and the Board of Directors
Winn-Dixie Stores, Inc.:
We have audited the accompanying consolidated balance sheets of
Winn-Dixie Stores, Inc. and subsidiaries as of June 29, 1994 and June
30, 1993, and the related consolidated statements of earnings,
shareholders' equity, and cash flows for each of the years in the
three-year period ended June 29, 1994. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of Winn-Dixie Stores, Inc. and subsidiaries at June 29, 1994 and June
30, 1993, and the results of their operations and their cash flows for
each of the years in the three-year period ended June 29, 1994, in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Certified Public Accountants
Jacksonville, Florida
August 1, 1994
REPORT OF MANAGEMENT
The Company is responsible for the preparation, integrity and
objectivity of the consolidated financial statements and related
information appearing in the Annual Report. The consolidated
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis and
include amounts that are based on management's best estimates and
judgments.
Management is also responsible for maintaining a system of internal
controls that provides reasonable assurance that the accounting
records properly reflect the transactions of the Company, that assets
are safeguarded and that the consolidated financial statements present
fairly the financial position and operating results. As part of the
Company's controls, the internal audit staff conducts examinations in
each of the retail and manufacturing divisions of the Company.
The Audit Committee of the Board of Directors, composed entirely of
outside directors, meets periodically to review the results of audit
reports and other accounting and financial reporting matters with the
independent certified public accountants and the internal auditors.
A. Dano Davis R. P McCook
Chairman of the Board Financial Vice President
and Principal Executive Officer and Principal Financial Officer
F-4
CONSOLIDATED STATEMENTS OF EARNINGS
Years ended June 29, 1994, June 30, 1993 and June 24, 1992
1994 1993* 1992
Amounts in thousands except per share data
Net sales $ 11,082,169 10,831,535 10,337,341
Cost of sales, including warehousing and
delivery expense 8,547,681 8,385,412 7,976,843
Gross profit on sales 2,534,488 2,446,123 2,360,498
Operating and administrative expenses 2,269,803 2,196,721 2,136,850
Operating income 264,685 249,402 223,648
Cash discounts and other income, net 98,085 132,398 119,390
362,770 381,800 343,038
Interest:
Interest on capital lease obligations 11,285 11,571 11,768
Other interest 2,986 6,560 3,291
Total interest 14,271 18,131 15,059
Earnings before income taxes and cumulative
effect of change in accounting principle 348,499 363,669 327,979
Income taxes 132,382 127,284 111,560
Earnings before cumulative effect of change in
accounting principle 216,117 236,385 216,419
Cumulative effect of change in
accounting principle for income taxes - - (20,485)
Net earnings $ 216,117 236,385 195,934
Earnings per share:
Earnings before cumulative effect of
change in accounting principle $ 2.90 3.11 2.82
Cumulative effect of change in
accounting principle for income taxes - - (0.27)
Net earnings $ 2.90 3.11 2.55
* 53 Weeks
See accompanying notes to consolidated financial statements.
F - 5
CONSOLIDATED BALANCE SHEETS
June 29, 1994 and June 30, 1993
1994 1993
Assets Amounts in thousands
Current Assets:
Cash and cash equivalents $ 31,451 22,302
Short - term investments - 85,482
31,451 107,784
Trade and other receivables, less allowance
for doubtful items of $834,000
($732,000 in 1993) 171,854 162,590
Associate stock loans 1,776 4,647
Merchandise inventories at lower of cost or
market less LIFO reserve of $205,172,000
($207,201,000 in 1993) 1,058,883 1,041,451
Prepaid expenses 97,220 96,728
Total current assets 1,361,184 1,413,200
Investments and other assets:
Cash surrender value of life insurance, net 25,094 10,053
Other assets 12,493 4,990
Total investments and other assets 37,587 15,043
Deferred income taxes 41,024 47,684
Net property, plant and equipment 706,779 586,633
$ 2,146,574 2,062,560
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable $ 516,806 493,190
Short-term borrowings 9,500 80,000
Reserve for insurance claims and self-insurance 60,510 65,134
Accrued wages and salaries 68,238 66,821
Accrued rent 58,313 57,557
Accrued expenses 126,550 84,893
Current obligations under capital leases 3,462 2,989
Income taxes 29,787 17,962
Total current liabilities 873,166 868,546
Obligations under capital leases 85,374 87,153
Defined benefit plan 22,852 19,454
Reserve for insurance claims and self-insurance 105,417 100,169
Other liabilities 2,304 2,273
Shareholders' equity:
Common stock of $1 par value Authorized 100,000,000
shares; issued 74,176,356 shares in 1994 and
74,955,846 shares in 1993 74,176 74,956
Retained earnings 983,285 910,009
Total shareholders' equity 1,057,461 984,965
Commitments and contingent liabilities (Note 10)
$ 2,146,574 2,062,560
See accompanying notes to consolidated financial statements.
F-6
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended June 29, 1994, June 30, 1993 and June 24, 1992
1994 1993* 1992
Amounts in thousands
Cash flows from operating activities:
Net earnings $ 216,117 236,385 195,934
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 157,392 141,136 126,884
Cumulative effect of a change in
accounting principle for income taxes - - 20,485
Deferred income taxes 4,414 10,406 (16,231)
Defined benefit plan 3,398 3,239 3,047
Reserve for insurance claims and self- insurance 624 (2,303) 9,260
Change in cash from:
Receivables (9,264) (45,567) (25,217)
Merchandise inventories (17,432) (80,673) (23,923)
Prepaid expenses 1,754 (19,394) (13,900)
Accounts payable 23,616 61,942 2,684
Income taxes 11,825 (27,956) 13,994
Other current accrued expenses 43,830 (64,258) 45,292
Net cash provided by operating activities 436,274 212,957 338,309
Cash flows from investing activities:
Purchases of property, plant and equipment, net (277,657) (194,786) (164,452)
Decrease (increase) in investments and other assets 62,938 113,397 (52,444)
Net cash used in investing activities (214,719) (81,389) (216,896)
Cash flows from financing activities:
Increase (decrease) in short-term borrowings (70,500) 80,000 -
Payments on capital lease obligations (3,122) (2,648) (3,010)
Purchase of common stock (39,993) (123,316) (32,122)
Proceeds of sales under associates' stock
purchase plan 2,871 6,691 18,146
Dividends paid (107,384) (100,518) (91,989)
Other 5,722 11,059 (203)
Net cash used in financing activities (212,406) (128,732) (109,178)
Increase in cash and cash equivalents 9,149 2,836 12,235
Cash and cash equivalents at the beginning of the year 22,302 19,466 7,231
Cash and cash equivalents at end of year $ 31,451 22,302 19,466
Supplemental cash flow information:
Interest paid $ 15,366 14,546 12,017
Interest and dividends received $ 4,059 15,258 14,002
Income taxes paid $ 115,788 138,576 114,221
* 53 Weeks
See accompanying notes to consolidated financial statements.
F-7
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Years ended June 29, 1994, June 30, 1993 and June 24, 1992
1994 1993* 1992
Amounts in thousands
Common stock:
Beginning of year $ 74,956 76,851 77,129
Add par value of shares issued for associate stock
purchase plan and management incentive plan 19 97 587
Deduct par value of common stock acquired 799 1,992 865
End of year 74,176 74,956 76,851
Retained earnings:
Beginning of year 910,009 875,328 782,897
Net earnings 216,117 236,385 195,934
Deduct excess of cost over par value of common
stock acquired 39,194 121,324 31,257
Deduct cash dividends on common stock of $1.44,
$1.32 and $1.20 per share in 1994, 1993 and 1992,
respectively 107,384 100,518 91,989
Consolidation of Bahamas subsidiary - 17,509 -
Add excess of cost over par value of shares issued for
associate stock purchase plan and management
incentive plan 3,792 2,697 19,743
Deduct other 55 68 -
End of year 983,285 910,009 875,328
Total shareholders' equity $ 1,057,461 984,965 952,179
* 53 Weeks
See accompanying notes to consolidated financial statements.
F-8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.Summary of Significant Accounting Policies.
(a) Fiscal Year: The fiscal year ends on the last Wednesday in June.
The fiscal year ended 1994 comprised 52 weeks, fiscal year 1993
comprised 53 weeks and fiscal year 1992 comprised 52 weeks.
(b) 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 the
southeastern and southwestern United States and the Bahamas
Islands. Effective June 30, 1993, the Company consolidated its
Bahamas statements of earnings in accordance with generally
accepted accounting principles. This investment had previously
been accounted for using the cost method. The retroactive
consolidation of the Bahamas operating results did not have a
significant impact on the statements of earnings for all years
presented. Accordingly, the 1993 and prior statements of earnings
have not been restated and the previously unrecorded earnings have
been recorded directly to retained earnings.
(c) Cash and Cash Equivalents: Cash equivalents consist of highly
liquid investments with a maturity of three months or less when
purchased. Cash and cash equivalents are stated at cost plus
accrued interest, which approximates market.
(d) Short-Term Investments: Short-term investments consist of highly
liquid investments with a maturity of more than three months when
purchased. The Company uses these short-term investments in its
cash management program. Short-term investments are stated at
cost plus accrued interest, which approximates market.
(e) Inventories: Inventories are stated at the lower of cost or
market. The "dollar value" last-in, first-out (LIFO) method is
used to determine the cost of approximately 92% of inventories
consisting primarily of merchandise in stores and distribution
warehouses. Manufacturing and produce inventories are valued at
the lower of first-in, first-out (FIFO) cost or market. Elements
of cost included in manufacturing inventories consist of material,
direct labor and plant overhead.
(f) Fair Value of Financial Instruments: The carrying amount of the
following financial instruments approximates fair value because of
their short-term maturity: cash and cash equivalents; short-term
investments; trade and other receivables; short-term borrowings;
accounts payable and other accruals. See note 6 (b) for
information on interest rate swap agreements.
(g) Income Taxes: In the fourth quarter of 1992, the Company adopted
Statement of Financial Accounting Standards Number 109,
"Accounting for Income Taxes" (Statement No. 109), which requires
a change from the deferred method to the asset and liability
method of accounting for income taxes. Under the asset and
liability method, deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable
to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using the enacted
tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled. The
cumulative effect of the change in method of accounting has been
reported in the 1992 consolidated statement of earnings.
(h) Self-insurance: Self-insurance reserves are established for
automobile and general liability, workers' compensation, and
property loss costs based on claims filed and claims incurred but
not reported, with a maximum per occurrence of $2,000,000 for
automobile and general liability, $1,000,000 for workers'
compensation, $500,000 for property loss, other than windstorm and
flood, and $5,000,000 for damage due to windstorm and flood. The
Company is insured for insurance costs in excess of these limits.
(i) Depreciation and Amortization: Depreciation of plant and
equipment, which is stated at historical cost, is provided over
the estimated useful lives by the straight-line method or by
methods that produce results similar to the straight-line method.
Amortization of improvements to leased premises is provided
principally by the straight-line method over the periods of the
leases or the estimated useful lives of the improvements,
whichever is less.
(j) Store Opening Costs: The costs of opening new stores are charged
to earnings in the year incurred.
(k) Earnings Per Share: The number of shares used in the calculation
for 1994, 1993 and 1992 amounted to 74,644,036, 76,119,152 and
76,805,335, respectively, which is the weighted average number of
shares of common stock outstanding during each year.
2.Accounts Receivable.
Accounts receivable at year-end were as follows:
1994 1993
Amounts in thousands
Trade and other receivables $52,797 69,222
Construction advances 119,891 94,100
172,688 163,322
Less: Allowance for doubtful items 834 732
$ 171,854 162,590
3.Inventories.
At June 29, 1994, inventories valued by the LIFO method would have been
$205,172,000 higher ($207,201,000 higher at June 30, 1993) if they were
stated at the lower of FIFO cost or market. If the FIFO method
inventory valuation had been used for the year ended June 29, 1994,
reported net earnings would have been $1,088,000 or $0.01 per share
lower ($326,000 or $0.00 per share higher in 1993 and $7,113,000 or
$0.09 per share lower in 1992).
4.Property, Plant and Equipment.
Property, plant and equipment consists of the following:
1994 1993
Amounts in thousands
Land $ 2,724 2,733
Buildings 23,949 25,825
Furniture, fixtures, machinery and equipment 1,537,928 1,431,596
Transportation equipment 104,914 100,045
Improvements to leased premises 267,333 230,494
Construction in progress 45,329 32,770
1,982,177 1,823,463
Less: Accumulated depreciation and amortization 1,342,474 1,305,756
639,703 517,707
Leased property under capital leaes, less
accumulated amortization of
$41,429,000 ($39,697,000 in 1993) 67,076 68,926
Net property, plant and equipment $ 706,779 586,633
The Company had non-cash additions to leased property of $10.3 million,
$1.4 million and $2.9 million for 1994, 1993 and 1992, respectively.
5.Income Taxes.
As discussed in Note 1(g), the Company adopted Statement No. 109 as of
June 27, 1991. The cumulative effect of this change in accounting for
income taxes of $20,485,000 was determined as of June 27, 1991 and is
reported separately in the consolidated statement of earnings for the
year ended June 24, 1992. The cumulative effect of applying Statement
No. 109 reduced earnings for 1992, which resulted from reducing the net
deferred tax assets previously recorded for decreases in the historical
tax rates. This accounting change had no impact on the cash flows of
the Company. The accounting change did not have a significant impact on
the 1992 provision for income taxes.
The provision for income taxes consisted of:
Current Deferred Total
Amounts in thousands
1994
Federal $ 108,163 (217) 107,946
State 19,805 4,631 24,436
$ 127,968 4,414 132,382
1993
Federal $ 104,006 7,808 111,814
State 12,872 2,598 15,470
$ 116,878 10,406 127,284
1992
Federal $ 119,006 (16,602) 102,404
State 8,785 371 9,156
$ 127,791 (16,231) 111,560
The following reconciles the above provision to the Federal
statutory income tax rate:
1994 1993 1992
Federal statutory income tax rate 35.0 % 34.0 34.0
State and local income taxes, net of
federal income tax benefits 3.8 2.9 2.4
Other tax credits (1.1) (0.6) (1.8)
Other, net 0.3 (1.3) (0.6)
38.0 % 35.0 34.0
The retroactive increase in the federal corporate income tax rate from
34% to 35%, enacted on August 10, 1993 and effective on January 1,
1993, resulted in additional income tax expense in fiscal 1994. This
increase in income tax expense was offset by an increase in prepaid
income taxes resulting from the federal corporate income tax rate
increase as required by Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes."
The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred liabilities at June 29, 1994,
June 30, 1993 and June 24, 1992 are presented below:
1994 1993 1992
Amounts in thousands
Deferred tax assets:
Reserve for insurance claims and self-insurance $ 61,766 62,264 64,060
Estimated loss on assets 372 - 5,097
Reserve for vacant store leases 11,248 8,971 10,996
Unearned promotional allowance 3,909 7,608 3,325
Reserve for accrued vacations 8,021 8,133 7,701
State net operating loss carryforwards 6,683 10,190 12,652
Excess of tax over book depreciation 9,283 9,406 9,475
Excess of book over tax rent expense 902 3,814 5,345
Excess of book over tax retirement expense 7,127 6,202 5,318
Uniform capitalization of inventory 4,418 4,080 4,160
Other, net 13,034 12,369 13,323
Total gross deferred tax assets 126,763 133,037 141,452
Less: Valuation allowance 6,325 6,406 6,403
Net deferred tax assets 120,438 126,631 135,049
Deferred tax liabilities:
Excess of book over tax depreciation (8,811) (6,879) (6,694)
Bahamas subsidiary foreign earnings (9,375) (8,967) -
Other, net (4,753) (8,872) (7,069)
Total gross deferred tax liabilities (22,939) (24,718) (13,763)
Net deferred tax assets $ 97,499 101,913 121,286
As discussed in Note 1 (b), the Company consolidated its Bahamas operations
effective June 30, 1993. The previously unrecorded earnings (net of deferred
income tax liability of $8,967,000) were recorded directly to retained earnings.
The valuation allowance for deferred tax assets as of June 27, 1991
was $6,932,000.
Current deferred income taxes of $56,475,000 and $54,229,000 for 1994 and 1993,
respectively, are included in the prepaid expenses in the accompanying
consolidated balance sheets.
The Company believes the results of future operations will generate sufficient
taxable income to realize the deferred tax assets.
6.Financing.
(a) Credit Arrangements: The Company has available a $200 million
Commercial Paper Program. As of June 29, 1994, there were no amounts
outstanding as compared to $80.0 million outstanding on June 30, 1993.
The Company also has short-term lines of credit totaling $250 million.
The 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 June 29, 1994 there was $9.5 million outstanding under these
bank lines of credit. On June 30, 1993, there was no amount
outstanding under these bank lines of credit.
(b) Interest Rate Swap: The Company has entered into interest rate swap
agreements to reduce the impact of changes in rental payments which
are indexed to interest rate changes. At June 29, 1994, the Company
had outstanding two interest rate swap agreements, having a notional
principal amount of $50 million each, with an investment bank. These
agreements effectively change the Company's exposure on its leased
real estate with floating rental payments to fixed rental payments
based on an 8.0% interest rate. The interest rate swap agreements
mature in June, 1996 and June, 1998. The Company is exposed to
credit loss in the event of nonperformance by the other party to
these interest rate swap agreements. However, the Company does not
anticipate nonperformance by the counterpart.
Since current short-term interest rates are significantly below the
8% rate of these contracts at June 29, 1994, the estimated negative
value of these swaps was approximately $6.6 million.
7.Common Stock.
The Company has a stock purchase plan in effect for associates. Under the
terms of the Plan, the Company may grant options to associates to purchase
shares of the Company's common stock at a price at least 85% of the fair
market value at the date of grant. During fiscal year 1992, 556,224
shares of common stock were sold to associates at an aggregate price of
$19,189,728. There are 868,110 shares of the Company's common stock
available for the grant of options under the Plan.
8.Stock Options.
Under the Company's Key Employee Stock Option Plan adopted by the Board of
Directors on January 4, 1990 and approved by the shareholders on October
3, 1990, options to acquire up to 300,000 shares of common stock may be
granted to key employees at market. On January 24, 1990, options for
206,000 shares were granted at an exercise price of $28.50 per share. Of
the options granted, 103,000 became exercisable on June 26, 1991 and
103,000 became exercisable on June 24, 1992. Options under this plan
expire on December 31, 1996.
On October 7, 1992, the shareholders approved an amendment to the
Company's Key Employee Stock Option Plan to increase the number of shares
of common stock available for issuance to 500,000 shares. Under this plan
adopted by the Board of Directors on June 22, 1992, options to acquire
113,000 shares of common stock were granted to key employees at an
exercise price of $42.125 per share. Of the options granted, 56,500
became exercisable on June 30, 1993. The remaining 56,500 became
exercisable on June 29, 1994. Options under this plan expire on December
31, 1998.
On June 22, 1994, the Board of Directors, subject to shareholders
approval, adopted an amendment to the Company's Key Employee Stock Option
Plan to increase the number of shares of common stock available for
issuance to 1,000,000 shares. Under this plan, options to acquire 233,000
shares at an exercise price of $44.875 per share were granted to key
employees. Of the options granted, 116,500 shares are not exercisable
before June 28, 1995 and the remaining 116,500 shares are not exercisable
before June 27, 1996, if earned. These options expire on January 15,
2001.
Changes in options under these plans during the years ended June 29, 1994,
June 30, 1993 and June 24, 1992 were as follows:
Number of Option Price
Shares Per Share
Outstanding - June 26, 1991 206,000 $28.500
Granted -
Exercised -
Canceled -
Outstanding - June 24, 1992 206,000 $28.500
Granted 113,000 $42.125
Exercised (74,000) $28.500
Canceled -
Outstanding - June 30, 1993 245,000 $28.500-42.125
Granted 233,000 $44.875
Exercised -
Canceled -
Outstanding - June 29, 1994 478,000 $28.500-44.875
Exercisble - June 29, 1994 245,000 $28.500-44.875
Shares available for additional grant 448,000
9. Leases.
(a) Leasing Arrangements: There were 1,353 leases in effect on store
locations and other properties at June 29, 1994. Of these 1,353
leases, 70 store leases and 3 warehouse and manufacturing facility
leases are classified as capital leases. Substantially all store
leases will expire during the next twenty years and the warehouse
and manufacturing facility leases will expire during the next thirty
years. However, in the normal course of business, it is expected
that these leases will be renewed or replaced by leases on other
properties.
The rental payments on substantially all store leases are based on a
minimum rental plus a contingent rental which is based on a per-
centage of the store's sales in excess of stipulated amounts. Most
of the Company's leases contain renewal options for five-year
periods at fixed rentals.
(b) Leases: The following is an analysis of the leased property under
capital leases by major classes:
Asset balances at
June 29, 1994 June 30, 1993
Amounts in thousands
Store facilities $ 82,844 80,265
Warehouses and manufacturing facilities 25,661 28,358
108,505 108,623
Less: Accumulated amortization 41,429 39,697
$ 67,076 68,926
The following is a schedule by year of future minimum lease
payments under capital and operating leases, together with the
present value of the net minimum lease payments as of June 29,
1994:
Capital Operating
Amounts in thousands
Fiscal Year:
1995 $ 15,230 200,868
1996 15,088 195,906
1997 14,719 191,798
1998 14,162 186,976
1999 13,711 181,838
Later years 129,514 1,540,703
Total minimum lease payments 202,424 2,498,089
Less: Amount representing estimated
taxes, maintenance and insurance
costs included in total minimum
lease payments 5,714
Net minimum lease payments 196,710
Less: Amount representing interest 107,874
Present value of net minimum lease payments $ 88,836
Rental payments under operating leases including, where
applicable, real estate taxes and other expenses are as follows:
1994 1993 1992
Amounts in thousands
Minimum rentals $ 190,830 187,055 179,655
Contingent rentals 3,352 4,282 4,257
$ 194,182 191,337 183,912
10. Commitments and Contingent Liabilities.
(a) Associate Benefit Programs: The Company has noncontributory,
trusteed profit-sharing retirement programs which are in effect for
eligible associates and may be amended or terminated at any time.
Charges to earnings for contributions to the programs amounted to
$54,212,000, $54,985,000 and $49,989,000 in 1994, 1993 and 1992,
respectively.
In addition to providing profit sharing benefits, the Company makes
group insurance available to early retirees from the time they
retire until age 65 when they qualify for Medicare/Medicaid.
Currently, the early retiree group constitutes 251 associates.
This group of retirees bear the entire costs of this plan, which is
maintained totally separate from the Company's regular group
insurance plan. The Company reserves the right to modify these
benefits.
(b) Defined Benefit Plan: The Company has a Management Security Plan
(MSP), which is a non-qualified defined benefit plan providing
disability, death and retirement benefits to 588 qualified
associates of the Company. Total MSP cost charged to operations was
$4,557,000, $3,992,000 and $3,868,000 in 1994, 1993 and 1992,
respectively. The projected benefit obligation at June 29, 1994 was
approximately $30,076,000. The effective discount rate used in
determining the net periodic MSP cost was 8.0% for 1994, 1993 and
1992.
Life insurance policies, which are not considered as MSP assets for
liability accrual computations, were purchased to fund the MSP pay-
ments. These insurance policies are shown on the balance sheet at
their cash surrender values, net of policy loans aggregating
$137,640,000 and $130,296,000 at June 29, 1994 and June 30, 1993,
respectively.
The Company holds life insurance on a broad-based group of qualified
associates. These insurance policies are shown on the balance sheet
at their cash surrender value, net of policy loans aggregating
$216,591,000 at June 29, 1994.
(c) 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.
The U.S. Environmental Protection Agency has notified the Company
that it is one of the many potentially responsible parties (PRPs)
for cleanup of two designated Superfund sites located in Tampa,
Florida, three such sites in Jacksonville (2 related sites) and one
site in Madison, Florida. The Company may be a PRP for cleanup of
one non-Superfund site in Tarrant County, Texas. Although cleanup
costs are believed to be substantial, accurate estimates will not
be available until studies have been completed at the sites.
The Company has entered into orders by consent with numerous other
PRPs to conduct studies and do cleanup for three of the
Superfund sites and is negotiating an agreement with PRPs who are
under an order at another Superfund site to determine the most
cost-effective way to clean up such sites. Although under federal
statutes the Company is jointly and severally liable for cleanup
costs at each location, the Company's share of total costs is
estimated not to exceed $350,000 for four of the Superfund sites
and the Texas site. The Company believes it is not a responsible
party for cleanup of the Madison, Florida, and Tarrant County,
Texas, sites and has no estimate of costs for those matters. Other
than these two and the New Mexico site mentioned below, these
involve wastes the Company paid to be properly disposed, and were
mishandled by disposal companies or public disposal sites.
At one of the Tampa sites, the Company is one of 14 parties named
as respondents in a Unilateral Administrative Order for Remedial
Design and Remedial Action under 47 U.S.C. Section 9606(a) relating
to a disposal site formerly operated by Hillsborough County,
Florida. The parties are ordered to operate, maintain and monitor
a water cleaning system and perform Remedial Design for the site.
The costs to the Company are estimated at $150,000 in fiscal year
1994 with substantial credits for this year, with additional annual
costs for an indefinite period thereafter.
The Company is also involved in the cleanup of a fuel tank leak at
a New Mexico site formerly owned by it. The cleanup costs are to
be prorated with others on the basis of the total time of ownership
of the participants. The Company's share is 15% of the total costs
estimated to be less than $150,000, with minimal annual monitoring
costs thereafter.
It is the Company's policy to accrue and charge against earnings,
the environmental cleanup costs when it is probable that a
liability has been incurred and an amount can be reasonably
estimated, including evaluation of the other PRPs' ability to pay.
The Company believes its ultimate liability as to these
environmental matters will not necessitate significant capital
outlays, will not materially affect the annual earnings of the
Company, nor cause material changes in the Company's business. It
is not possible to quantify future environmental costs because many
issues relate to actions by third parties or changes in
environmental regulation.
Although the amount of liability with respect to all other claims
and lawsuits cannot be ascertained, management is of the opinion
that any resulting liability will not have a material affect on
the Company's consolidated earnings or financial position.
11. Related Party Transactions.
The Company is essentially self-insured for purposes of employee group
life, medical, accident and sickness insurance, with The American
Heritage Life Insurance Company, a related party, providing
administrative services and expenses for medical and accident claims.
The American Heritage Life Insurance Company also financed the
development and expansion of certain retail stores. Total payments
aggregating $15,109,000, $34,108,000 and $23,329,000 were made in
1994, 1993 and 1992, respectively.
12. Quarterly Results of Operations (Unaudited).
The following is a summary of the unaudited quarterly results of operations for the years ended June
29, 1994, June 30, 1993 and June 24, 1992
Quarters Ended
Sept. 22 Jan. 12 April 6 June 29
1994 (12 Weeks) (16 Weeks) (12 Weeks) (12 Weeks)
Dollars in thousands except per share data
Net sales $ 2,464,440 3,380,986 2,651,491 2,585,252
Gross profit on sales $ 556,085 766,461 603,914 608,028
Net earnings $ 35,951 63,781 52,032 64,353
Earnings per share $ 0.48 0.85 0.70 0.87
Net LIFO charge (credit) $ 1,690 2,253 1,690 (6,721)
Net LIFO charge (credit) per share $ 0.02 0.03 0.02 (0.08)
Dividends per share $ 0.24 0.48 0.36 0.36
Market price range $67.75-56.00 60.38-49.00 58.38-48.25 52.25-43.50
Quarters Ended
Sept. 16 Jan. 6 March 31 June 30
1993 (12 Weeks) (16 Weeks) (12 Weeks) (13 Weeks)
Dollars in thousands except per share data
Net sales $ 2,392,129 3,244,672 2,504,214 2,690,520
Gross profit on sales $ 531,506 726,066 566,615 621,936
Net earnings $ 33,377 63,031 57,199 82,778
Earnings per share $ 0.44 0.82 0.75 1.10
Net LIFO charge (credit) $ 1,688 2,405 1,688 (5,455)
Net LIFO charge (credit) per share $ 0.02 0.03 0.02 (0.07)
Dividends per share $ 0.22 0.44 0.33 0.33
Market price range $58.63 - 41.63 79.50 - 57.50 79.75 - 66.75 67.38 - 52.75
Quarters Ended
Sept. 18 Jan. 8 April 1 June 24
1992 (12 Weeks) (16 Weeks) (12 Weeks) (12 Weeks)
Dollars in thousands except per share data
Net sales $ 2,333,880 3,159,289 2,433,041 2,411,131
Gross profit on sales $ 515,675 700,884 556,205 587,734
Earnings before income taxes and
cumulative effect of a change
in accounting principle $ 40,385 81,535 81,678 124,381
Cumulative effect of a change in
accounting principle $ 20,485 - - -
Net earnings $ 6,169 53,813 53,908 82,044
Earnings per share:
Earnings before cumulative
effect of a change
in accounting principle $ 0.35 0.70 0.70 1.07
Cumulative effect of a change in
accounting principle $ (0.27) - - -
Net earnings $ 0.08 0.70 0.70 1.07
Net LIFO charge (credit) $ 3,688 4,750 2,500 (18,051)
Net LIFO charge (credit) per share $ 0.05 0.06 0.04 (0.24)
Dividends per share $ 0.20 0.40 0.30 0.30
Market price range $39.38 - 34.63 39.88 - 35.50 44.63 - 35.75 44.63 - 40.00
As discussed in Note 1 (g), the Company adopted Statement No. 109. The first
quarter results have been restated to reflect the cumulative effect of
this change in accounting principle.
During 1994, 1993 and 1992, the fourth quarter results reflect a change from
the estimate of inflation used in the calculation of LIFO inventory to the
actual rate experienced by the Company of 1.0% to 0.1%, 1.0% to 0.1% and 2.3%
to (0.6)%, respectively.
Fourth Quarter Results of Operations
June 29, 1994 June 30, 1993 June 24, 1992
(12 Weeks) (13 Weeks) (12 Weeks)
Amounts in thousands
Net sales $ 2,585,252 2,690,520 2,411,131
Cost of sales 1,977,224 2,068,584 1,823,397
Gross profit on sales 608,028 621,936 587,734
Operating and administrative expenses 522,057 523,780 499,290
Operating income 85,971 98,156 88,444
Cash discounts and other income, net 19,166 32,774 38,682
Interest expense (1,411) (3,579) (2,745)
Earnings before income taxes 103,726 127,351 124,381
Income taxes 39,373 44,573 42,337
Net earnings $ 64,353 82,778 82,044
INDEPENDENT AUDITORS' REPORT
ON FINANCIAL STATEMENT SCHEDULES
The Shareholders and Board of Directors
Winn-Dixie Stores, Inc.:
Under date of August 1, 1994, we reported on the consolidated balance sheets of
Winn-Dixie Stores, Inc. and subsidiaries as of June 29, 1994 and June 30, 1993,
and the related consolidated statements of earnings, shareholders' equity,
and cash flows for each of the years in the three-year period ended June 29,
1994, as contained in the annual report on Form 10-K for the year 1994. In
connection with our audits of the aforementioned consolidated financial
statements, we also audited the related financial statement schedules as listed
in the accompanying index on page 13 of the annual report on Form 10-K for
the year 1994. These financial statement schedules are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statement schedules based on our audits.
In our opinion, the related financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.
KPMG Peat Marwick LLP
Certified Public Accountants
Jacksonville, Florida
August 1, 1994
S-1
Schedule V
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
Consolidated Property, Plant and Equipment
Years ended June 29, 1994, June 30, 1993 and June 24, 1992
(Amounts in thousands)
Balance at Additions Deductions Balance at
beginning charged to Retirements end
Classification of year purchases or sales Other of year
Year ended June 29, 1994:
Land $ 2,733 - 9 - 2,724
Buildings 25,825 41 1,917 - 23,949
Furniture, fixtures, machinery and equipment 1,431,596 210,797 104,465 - 1,537,928
Transportation equipment 100,045 10,499 5,630 - 104,914
Improvements to leased premises 230,494 50,260 13,421 - 267,333
Construction in progress 32,770 12,559 - - 45,329
$ 1,823,463 284,156 125,442 - 1,982,177
Leased property under capital leases $ 108,623 10,296 10,414 - 108,505
Year ended June 30, 1993:
Land $ 1,897 836 - - 2,733
Buildings 20,234 5,591 - - 25,825
Furniture, fixtures, machinery and equipment 1,348,083 157,604 85,227 (11,136) 1,431,596
Transportation equipment 93,699 9,914 4,226 (658) 100,045
Improvements to leased premises 212,522 33,536 17,175 (1,611) 230,494
Construction in progress 39,635 - 6,865 - 32,770
$ 1,716,070 207,481 113,493 (13,405) 1,823,463
Leased property under capital leases $ 113,440 1,363 6,180 - 108,623
Year ended June 24, 1992:
Land $ 1,821 76 - - 1,897
Buildings 19,130 1,130 26 - 20,234
Furniture, fixtures, machinery and equipment 1,276,901 120,156 48,974 - 1,348,083
Transportation equipment 89,977 8,928 5,206 - 93,699
Improvements to leased premises 190,518 31,767 9,763 - 212,522
Construction in progress 33,084 6,551 - - 39,635
$ 1,611,431 168,608 63,969 - 1,716,070
Leased property under capital leases $ 117,410 2,863 6,833 - 113,440
S-2
Schedule VI
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
Consolidated Accumulated Depreciation and Amortization of Property, Plant and Equipment
Years ended June 29, 1994, June 30, 1993 and June 24, 1992
(Amounts in thousands)
Balance at Additions Deductions Balance at
beginning charged to Retirement end
Classification of year income or sales Other of year
Year ended June 29, 1994:
Buildings $ 10,833 801 1,375 - 10,259
Furniture, fixtures, machinery and equipment 1,085,612 122,604 100,233 - 1,107,983
Transportation equipment 87,121 8,780 5,451 - 90,450
Improvements to leased premises 122,190 23,475 11,883 - 133,782
$ 1,305,756 155,660 118,942 - 1,342,474
Leased property under capital leases $ 39,697 1,732 - - 41,429
Year ended June 30, 1993:
Buildings $ 10,081 752 - - 10,833
Furniture, fixtures, machinery and equipment 1,052,132 106,940 82,004 (8,544) 1,085,612
Transportation equipment 82,327 8,382 4,093 (505) 87,121
Improvements to leased premises 115,880 20,491 14,701 (520) 122,190
$ 1,260,420 136,565 100,798 (9,569) 1,305,756
Leased property under capital leases $ 39,972 4,571 4,846 - 39,697
Year ended June 24, 1992:
Buildings $ 9,426 655 - - 10,081
Furniture, fixtures, machinery and equipment 1,004,495 94,751 47,114 - 1,052,132
Transportation equipment 80,061 7,333 5,067 - 82,327
Improvements to leased premises 104,204 19,319 7,643 - 115,880
$ 1,198,186 122,058 59,824 - 1,260,420
Leased property under capital leases $ 36,915 4,826 1,769 - 39,972
S-3
WINN-DIXIE STORES, INC. AND SUBSIDIARIES Schedule VIII
Consolidated Valuation and Qualifying Accounts
Years ended June 29, 1994, June 30, 1993 and June 24, 1992
(Amounts in thousands)
Balance at Additions Deductions Balance at
beginning charged to from end
Description of year Income reserves of year
Year ended June 29, 1994:
Reserves deducted from assets to which they apply:
Allowance for doubtful receivables $ 732 12,126 12,024 834
Reserves not deducted from assets:
Reserves for insurance claims and self-insurance:
-Current $ 65,134 77,488 82,112 60,510
-Noncurrent 100,169 5,248 - 105,417
$ 165,303 82,736 82,112 165,927
Year ended June 30, 1993:
Reserves deducted from assets to which they apply:
Allowance for doubtful receivables $ 613 9,631 9,512 732
Reserves not deducted from assets:
Reserves for insurance claims and self-insurance:
-Current $ 61,641 96,507 93,014 65,134
-Noncurrent 105,965 - 5,796 100,169
$ 167,606 96,507 98,810 165,303
Year ended June 24, 1992:
Reserves deducted from assets to which they apply:
Allowance for doubtful receivables $ 912 10,507 10,806 613
Reserves not deducted from assets:
Reserves for insurance claims and self-insurance:
-Current $ 77,737 69,930 86,026 61,641
-Noncurrent 80,609 25,356 - 105,965
$ 158,346 95,286 86,026 167,606
S-4
Schedule IX
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
Short-Term Borrowings
Years ended June 29, 1994, June 30, 1993 and June 24, 1992
(Amounts in thousands)
Balance at Weighted Maximum amount Average amount Weighted average
Category of aggregate end of average outstanding outstanding interest rate
short-term borrowings year interest rate during year during year during year (A)
Year ended June 29, 1994:
Bank lines of credit $ 9,500 4.43 % $ 35,500 $ 3,000 3.46 %
Commercial paper $ - - 140,000 87,000 3.35
Year ended June 30, 1993:
Bank lines of credit $ - - % $ 40,500 $ 2,900 3.47 %
Commercial paper $ 80,000 3.26 180,000 59,200 3.40
Year ended June 24, 1992:
Bank lines of credit $ - - % $ 42,000 $ 6,600 5.30 %
Commercial paper $ - - 30,000 1,800 4.55
(A) Weighted average based on
number of days debt outstanding
S-5