Restructing Woes Contribute to $22.7 Million Q4 Loss at Winn-Dixie

JACKSONVILLE, Fla. - Winn-Dixie Stores, Inc. reported a $22.72 million net loss in its fourth quarter yesterday, citing costs that it incurred from closing stores and distribution facilities. The results were better than Wall Street expected.

Jacksonville, Fla.-based Winn-Dixie has been implementing several strategic initiatives since January, including closing stores in certain markets, to improve its competitive positioning.

The company reported a net loss of $22.7 million for the fourth quarter of fiscal 2004 ended June 30, as compared to net earnings of $62.5 million for the fourth quarter of fiscal 2003. The results included $7.3 million of restructuring and asset impairment charges related to its strategic initiatives and $5.5 million of other asset impairment charges. Excluding the charges, Winn-Dixie earned $2.1 million, or a penny per share in the quarter.

Sales from continuing operations were $2.6 billion, an increase of 3.5 percent from the same quarter last year, which contained 12 weeks.

"Our net loss in the fourth quarter reflects the impact of restructuring and asset impairment charges related to our asset rationalization plan and other strategic initiatives," said Frank Lazaran, president and c.e.o. "During the quarter, we made meaningful progress on our strategic initiatives, significantly enhanced our borrowing capacity and improved gross margins for the second consecutive quarter."

Winn-Dixie has exited 32 stores as part of its asset rationalization plan, and expects to complete its exit from the remaining 124 stores by the end of April 2005. Consequently, the company has reorganized its eight operating divisions into four regions to streamline operations and improve its ability to execute its other strategic initiatives across the new footprint. It has also closed its Raleigh (North Carolina) and Sarasota (Florida) distribution facilities, and expects to sell or close
its Louisville (Kentucky) facility during the first half of fiscal 2005.

Winn-Dixie has designated its manufacturing operations as non-core, with the primary focus at this time on discussions regarding the sale of Dixie Packers, Crackin' Good Bakers, Crackin' Good Snacks, and Montgomery Pizza. Additionally, the company has consolidated its Miami Dairy into its other dairies and is in the process of consolidating its Greenville Ice Cream plant.

As part of its brand-related initiatives, Winn-Dixie is testing new product offerings and merchandising programs, focused on delis and bakeries in particular, along with new training, recruiting, and performance management initiatives, in its lead market of 92 stores in Miami-Ft.
Lauderdale, Florida. The company expects to complete a full lead market rollout in its core markets by March 2005.
This ad will auto-close in 10 seconds