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2006 News Releases

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Michael Freitag
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WINN-DIXIE ANNOUNCES DESIGNEES
FOR NEW BOARD OF DIRECTORS

Company Files Supplements to Plan of Reorganization,
Confirmation Hearing Scheduled To Begin October 13

JACKSONVILLE, FL, October 4, 2006 – Winn-Dixie Stores, Inc. today announced that nine individuals have been designated to serve on a newly constituted Board of Directors when the company emerges from bankruptcy. These designees include Winn-Dixie President and Chief Executive Officer Peter Lynch, who is expected to serve as chairman of the new Board.

As previously reported, a confirmation hearing for the U.S. Bankruptcy Court for the Middle District of Florida to consider approval of Winn-Dixie’s Plan of Reorganization has been scheduled to begin on Friday, October 13, 2006. If the Plan of Reorganization is confirmed by the Court, Winn-Dixie expects to emerge from Chapter 11 protection later this year with sufficient financing and liquidity to make significant investments in its current store base, to develop new stores, and to take other actions to position the business to compete effectively in its markets over the next several years. The company also expects to emerge with only a minimal amount of long-term debt on its balance sheet.

In preparation for the upcoming confirmation hearing before the Honorable Jerry A. Funk, Winn-Dixie today filed a number of supplemental documents required by its Plan of Reorganization. These include a list of the proposed members of Winn-Dixie’s new Board of Directors, a copy of the final commitment letter for $725 million in exit financing, proposed draft forms for Winn-Dixie’s new charter and bylaws, a stock registration rights agreement, a new equity incentive plan to be provided to key associates, and protocols for the settlement of certain claims.

Proposed Board of Directors

If the Plan of Reorganization is confirmed by the Court, a new Board of Directors will take office on the effective date of the Plan. The company and the creditors committee have designated the following eight people to join Mr. Lynch on the new Board, subject to approval of the Bankruptcy Court:

  • Ronald E. Elmquist, President and CEO of Qualserve Corporation since 2005 and a director of Radio Shack Corporation. Mr. Elmquist was formerly President and CEO of Submitorder, Inc.; Chairman, President and CEO of Keystone Automotive Operations, Inc.; President of Global Food Services and Corporate Vice President at Campbell Soup Company, Inc.; and Chairman, President and CEO of W.S. Holdings Corporation and White Swan, Inc. He has also held senior positions at Fleming Companies, Inc., PYA Monarch, Inc., and Sysco Corporation.

  • Evelyn V. Follit, Senior Vice President, Chief Organizational Enabling Services Officer and Chief Information Officer at Radio Shack from 1997 to 2005. Ms. Follit is currently a director at Catalina Marketing Corporation and GetConnected, Inc. She has previously held senior positions at A.C. Nielsen Corporation, D&B Corporation, ITT Industries and IBM Corporation.

  • Charles P. Garcia, President of the Sterling Hispanic Capital Markets Group at vFinance, Inc. Mr. Garcia was founder, CEO and Chairman of Sterling Financial Investment Group, Inc. A graduate of the U.S. Air Force Academy and former intelligence officer for the U.S. Department of State, he served as a White House Fellow in 1988. Mr. Garcia is a director of several not-for-profit organizations, including the U.S. Air Force Academy, the American Bar Association, and Read On! Foundation.

  • Jeffrey C. Girard, Vice Chairman, Finance and Administration at ShopKo Stores, Inc. from 2002 to 2004. Earlier in his career he served in senior management roles at Supervalu, Inc., Supermarkets General Corporation, Pathmark Stores, Inc., and Standard Brands, Inc.

  • Yvonne R. Jackson, Founder and President of BeecherJackson. Ms. Jackson has served as Senior Vice President, Human Resources for Pfizer, Inc., Compaq Computer Corporation, and Burger King Corporation. From 1979 to 1993 she served in a number of human resources positions at Avon Products, Inc., including Vice President, Human Resources for the U.S. division. She began her career as a personnel manager at Sears, Roebuck & Co.

  • Gregory P. Josefowicz, former Chairman, President and CEO of Borders Group, Inc. and a director of PetSmart, Inc. and Ryerson, Inc. Mr. Josefowicz joined Borders as President and CEO in 1999 after having served as President of the Midwest Region of Albertson’s, Inc. He also held several senior positions at Jewel Food Stores and has served as a director of Spartan Stores, Inc.

  • Terry Peets, senior advisor to J.P. Morgan Partners and a director of Berry Plastics, Inc., Pinnacle Foods Group, Inc., Ruiz Foods, Inc., and WKI Holding Company, Inc. Mr. Peets has served as Chairman of Bruno’s Supermarkets, Inc.; President, CEO and a director of Pia Merchandising Company, Inc.; Executive Vice President of Vons Companies, Inc.; and Executive Vice President of Ralph’s Grocery Company.

  • Richard E. Rivera, President and CEO of Rubicon Enterprises, LLC and a director of the National Restaurant Association. Mr. Rivera has served as Vice Chairman, President and Chief Operating Officer at Darden Restaurants, Inc. and as President of Darden’s Red Lobster chain. He has also served as President and CEO of Chart House Enterprises, Inc., RARE Hospitality International, Inc., and TGI Friday’s, Inc. (a division of Carlson Companies, Inc.). He has also held senior positions at W.R. Grace & Company (President of Del Taco Corporation); Annheuser-Busch Companies, Inc. (President of El Chico Corporation); and Grand Metropolitan plc (Steak & Ale Restaurants of America).

Mr. Lynch said, “I believe this will be an outstanding board. The members are a diverse group, with considerable experience and expertise ranging from the food and supermarket industry to human resources to information technology. Their collective knowledge, judgment and support will be a tremendous asset for our management team as we continue to pursue opportunities to strengthen and grow our business.”

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. The company currently operates 521 stores in Florida, Alabama, Louisiana, Georgia, and Mississippi. 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.

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 Company’s ability to obtain timely approval of the Plan of Reorganization by the creditors, confirmation of the Plan by the bankruptcy court and implementation of the Plan by the Company.
In addition, the Company faces a number of risks with respect to its continuing business operations, including, but not limited to: the ability of the Company to attract and retain key leadership; the Company’s ability to increase gross profit margins, increase sales and reduce operating and administrative expenses; the Company’s ability to sustain positive sales conditions in the markets in which it operates; the Company’s ability to invest in store remodeling activity; the concentration of the Company’s locations in the southeast increases its vulnerability to severe storm damage, and the additional risks relating to limitations on insurance coverage in 2006; the Company’s ability to attract and retain customers despite intense competition from both traditional grocery stores and non-traditional grocery retailers; the ability of the Company to achieve sufficient operating cash flow upon emergence; the Company’s ability to maintain consumer confidence in the safety and quality of its stores and products; the Company’s ability to successfully implement information technology improvements; the Company’s ability to successfully estimate self insurance liabilities; changes in laws and other regulations affecting the Company’s industry; and the outcome of litigation or legal proceedings.

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. The Company considers the value of its common stock to be highly speculative and cautions equity holders that the stock will likely be cancelled upon emergence from bankruptcy as provided in the Plan of Reorganization the Company has filed with the bankruptcy court and submitted to its creditors for approval. Accordingly, the Company urges that appropriate caution be exercised with respect to existing and future investments in its common stock or in any claims related to pre-petition liabilities and/or other Winn-Dixie securities.

Please refer to discussions of these and other factors in the Company’s Plan of Reorganization, the Company’s Annual Report on Form 10-K for the fiscal year ended June 28, 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.

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News Release #7011