2005 News Releases
Investors:
1-212-521-4835
Media:
1-866-449-8608
NOTE: The list of stores for which bids have been accepted at auction are available at www.winn-dixie.com. Also posted is a map showing Winn-Dixie’s current and future operating areas.
FOLLOWING AUCTION, WINN-DIXIE REACHES
AGREEMENT TO SELL 102 STORES
JACKSONVILLE, FL, July 19, 2005 – Winn-Dixie Stores, Inc. (“WNDXQ”) today announced that, following a successful auction on July 18, it has reached agreement to sell 102 stores to 30 purchasers, the substantial majority of which intend to operate these locations as food and beverage stores. These stores are part of the 326 locations that the Company previously announced it intends to sell or close in conjunction with its new “store footprint” strategy. On June 21, 2005, Winn-Dixie reported that it was taking action to strengthen its performance and achieve long-term profitability by focusing on its strongest markets and reducing the size of its store base from 913 stores in the U.S. and the Bahamas to 587 stores.
Earlier this month, Winn-Dixie announced that it had reached preliminary agreement to sell a total of 79 stores to 20 potential buyers, all of which intend to operate these stores on an ongoing basis. The additional stores and buyer are the result of an auction held in New York on July 18. A list of the 102 stores for which the Company has entered into sales agreements is available at www.winn-dixie.com.
The aggregate purchase price in the agreements for leases and equipment at the 102 stores is approximately $45.6 million, an increase of $6.9 million from the $38.7 million announced previously. This amount does not include inventory to be purchased. Winn-Dixie will seek final Bankruptcy Court approval of these sale agreements at a hearing scheduled for July 27-29, 2005.
Peter Lynch, President and Chief Executive Officer of Winn-Dixie, said: “We are pleased with the results of the auction, which increased substantially the value achieved for the Company and also increased the number of locations that will continue to operate as food and beverage stores. In many cases, the buyers of these stores have agreed to offer employment opportunities for our Associates. We intend to work closely with the buyers to ensure that there is a smooth transition for our customers and Associates at these locations. We also intend to provide severance and other assistance to the Associates of closing stores who will not be offered opportunities with new owners.”
Winn-Dixie is seeking Court authorization to conduct store-closing sales at the locations that will not be sold as food and beverage stores. Subject to Court approval, the Company anticipates that these sales would begin on or about August 1, 2005 and be completed in early to mid-September. An auction for the sale of the leases at these locations has been scheduled for August 9, 2005, with expressions of interest from potential bidders due by August 2, 2005.
The asset purchase agreements for the 102 stores announced today are subject to Bankruptcy Court approval. In addition, agreements with two of the buyers, for a total of 23 stores, are subject to certain contingencies.
About Winn-Dixie
Winn-Dixie Stores, Inc. is one of the nation's largest food retailers. Founded in 1925, the Company is headquartered in Jacksonville, FL. For more information, please visit http://www.winn-dixie.com.
More information about Winn-Dixie's reorganization, including a map and list of stores affected by the June 21st “footprint” announcement and those for which the Company has reached a sale agreement, is available on the Company’s Web site at http://www.winn-dixie.com or as follows: Customers: 1-866-WINN-DIXIE (1-866-946-6349); Media: 1-866-449-8608; Investors: 1-212-521-4835.
Forward-Looking Statements
Certain statements made in this press release may constitute "forward-looking statements" within the meaning of the federal securities laws. These forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from the expected results described in the forward-looking statements. These forward-looking statements include and may be indicated by words or phrases such as "anticipate," "estimate," "plans," "expects," "projects," "should," "will," "believes," or "intends" and similar words and phrases. There are a number of factors that could cause the Company's actual results to differ materially from the expected results described in the Company's forward-looking statements, particularly while the Chapter 11 cases are proceeding.
There can be no assurance that the Company's Chapter 11 reorganization process will be successful. Risk factors related to its efforts include, but are not limited to, the following: the Company's ability to continue as a going concern and to create positive cash flow from operations; the ability of the Company to operate under the terms of the Company's DIP credit facility; the Company’s ability to obtain court approval of the motions filed with the bankruptcy court from time to time in the Chapter 11 process; the Company’s ability to successfully implement key elements of its restructuring, including the sale or closure of selected retail DMAs, the sale or closure of under-performing stores in retained DMAs and the sale or closure of excess distribution and manufacturing facilities, as well as the ability to appropriately align general and administrative expenses of the resulting organization; the ability of the Company to obtain and maintain trade credit and shipments and terms with vendors and service providers for current and future orders and to maintain in-stock positions for all of its product offerings; the ability of the Company to develop, confirm and consummate a plan or plans of reorganization; risks associated with third parties seeking and obtaining court approval to terminate or shorten plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the cases to Chapter 7 cases; the potential adverse impact of the Chapter 11 cases on the Company's liquidity and results of operations; the Company's ability to maintain contracts that are critical to its operations; the ability of the Company to attract and retain customers; the ability of the Company to attract, motivate and retain key executives and associates; and potential adverse publicity.
In addition, the Company faces a number of risks with respect to its continuing business operations, including but not limited to: the Company's ability to execute its strategic initiatives, including asset rationalization, store upgrades, expense reduction, brand positioning and customer service, and to fund its initiatives; the success of the Company’s initiatives to increase sales and market share, particularly in light of over two years of sustained sales declines; the Company's ability to increase capital spending levels in the future to invest in its store base and other capital projects; the Company's response to the entry of new competitors in its markets, including traditional grocery store openings and the entry of non-traditional grocery retailers such as mass merchandisers, supercenters, warehouse club stores, dollar-discount stores, drug stores and conventional department stores; and the Company’s ability to complete its assessment of internal control over financial reporting under the Sarbanes-Oxley Act of 2002 on a timely basis and without identifying any material weaknesses.
Please refer to discussions of these and other factors in this news release, in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2004, the Quarterly Report on Form 10-Q for the quarter ended April 6, 2005, and other Company filings with the Securities and Exchange Commission. These statements are based on current expectations and speak only as of the date of such statements. The Company undertakes no obligation to publicly revise or update these forward-looking statements, whether as a result of new information, future events or otherwise.
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News Release #6003