2006 News Releases
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NOTE: A list of distribution centers operated by Winn-Dixie is available on the Winn-Dixie Web site at www.winn-dixie.com
WINN-DIXIE TO CONSOLIDATE DISTRIBUTION
OPERATIONS IN SOUTHERN FLORIDA
Pompano Beach Distribution Center To Be Sold,
Operations and Associates Will Transfer to
Nearby Miami Facility
JACKSONVILLE, FL, March 29, 2006 – Winn-Dixie Stores, Inc. (“WNDXQ”) today announced that as part of its ongoing focus on enhancing its financial performance and helping to position the company for profitability when it emerges from Chapter 11 later this year, it has decided to consolidate its distribution operations in Southern Florida.
Winn-Dixie will sell its distribution center in Pompano Beach, Florida and move the work performed at that facility to its distribution center nearby in Miami. Associates at the Pompano Beach facility will be offered positions in Miami. The transfer of operations is expected to begin in late April and be completed by the end of June.
Winn-Dixie President and Chief Executive Officer Peter Lynch said, “We have continued to examine our operations to ensure Winn-Dixie is best positioned to emerge from Chapter 11 financially healthier and better able to compete. Using one facility rather than two in Southern Florida will allow us to leverage economies of scale and operate more efficiently. Proceeds received from the sale of the Pompano distribution center will provide us with additional capital to help fund our remodeling program and other improvements.”
He added, “We are pleased that this consolidation can be achieved with a minimal amount of layoffs, as we expect to be able to offer employment opportunities at the Miami facility to every associate in the Pompano Beach distribution center.”
Winn-Dixie, together with its outside advisors, will conduct an active marketing effort to identify potential buyers for the Pompano Beach facility, which is approximately 787,500 square feet and handles grocery, meat, dairy and produce items. The Miami facility is approximately 961,690 square feet and handles the same items as well as frozen foods. There are currently approximately 280 full-time and part-time associates at the Pompano facility and 440 at the Miami facility.
Winn-Dixie currently operates seven distribution centers in Florida, Alabama and Louisiana. A full list of the facilities is available at www.winn-dixie.com.
Those interested in purchasing the Pompano Beach facility may contact Emilio Amendola at DJM Asset Management at 631-752-1100.
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 www.winn-dixie.com.
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 generate positive cash flow from operations; the ability of the Company to resume vendor credit and accounts receivable collection; the ability of the Company to respond to any further unexpected developments that require the usage of a substantial amount of its liquidity; the ability of the Company to operate under the terms of the DIP credit facility; the Company’s ability to obtain court approval with respect to various motions filed with the bankruptcy court from time to time in the Chapter 11 proceedings; the Company’s ability to achieve remaining key elements of its restructuring plan, including the rejection of unsold facilities’ leases and appropriate alignment of administrative expenses to the resulting organization; 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 the period in which we have the exclusive right to file plans of reorganization, modify or terminate the automatic stay, appoint 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.
The Company experienced a disruption to its business as a result of the 2005 hurricane season and faces a number of risks associated with recovery from those hurricanes including but not limited to the following: the Company’s ability to collect on its insurance coverage for damage resulting from the hurricanes; the Company’s ability to reopen stores impacted by the hurricanes; future sales levels in the Company’s stores in the New Orleans market.
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 increase sales and market share, particularly considering that it has experienced over two years of sustained sales declines; the Company's ability to increase capital expenditures in the future to invest in its store base and other capital projects; the Company's response to the entry of new competitors into 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; the Company’s ability to reduce the level of operating losses experienced in recent years; the Company’s ability to upgrade its information systems and implement new technology and business processes; the Company’s ability to implement new customer service programs; the Company’s ability to implement effective pricing and promotional programs; the Company’s ability to reserve appropriately for self insurance liabilities; the Company’s ability to maintain appropriate sanitation and quality standards in its stores and products; the Company’s ability to resolve certain class action lawsuits successfully; the success of the Customer Reward Card program; changes in federal, state or local laws or regulations; general economic conditions in our operating regions; lack of inflation in food prices and narrow profit margins that characterize the retail food industry; stability of product costs; increases in labor and employee benefit costs, such as health care and pension expenses; changes in accounting standards, taxation requirements and bankruptcy laws.
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 29, 2005, the Quarterly Report on Form 10-Q for the quarter ended January 11, 2006, 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.
Under the priority scheme established by the Bankruptcy Code, generally post-petition liabilities and pre-petition liabilities must be satisfied before shareholders are entitled to receive any distribution. The ultimate recovery by creditors and shareholders, if any, will not be determined until confirmation and implementation of a plan of reorganization. No assurance can be given as to what recoveries, if any, will be assigned in the bankruptcy proceedings to each of these constituencies. A plan of reorganization could result in holders of the Company’s stock receiving no value for their interests and holders of its unsecured debt receiving less, and potentially substantially less, than payment in full for their claims. Because of such possibilities, the value of the Company’s common stock and unsecured debt is highly speculative.
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News Release #6017