2006 News Releases
(212) 521-4835
Media:
Kekst and Company
Michael Freitag
212-521-4800
WINN-DIXIE EMERGES FROM CHAPTER 11
Company Achieves Restructuring Objectives, Exits Bankruptcy Process in Stronger Financial Condition with $725 Million in New Financing and Minimal Long-Term Debt
JACKSONVILLE, FL, November 21, 2006 – Winn-Dixie Stores, Inc. today announced that it has emerged from bankruptcy. The Company and its domestic subsidiaries officially concluded their Chapter 11 reorganization today after meeting all closing conditions to the company’s Plan of Reorganization (the “Plan”), which was confirmed by the U.S. Bankruptcy Court for the Middle District of Florida in an order entered on November 9, 2006.
In conjunction with its emergence from Chapter 11, Winn Dixie today closed on its new $725 million exit financing facility provided by a consortium led by Wachovia Bank. This financing will be available to support the company as it seeks 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.
Winn-Dixie Chief Executive Officer and Chairman of the Board Peter Lynch said: “This is a historic day for the outstanding Associates of Winn-Dixie, who have demonstrated tremendous dedication and focus over the past two years as we have sought to become a better company. While there is much work still to do, it is a day to reflect on the great progress that has been achieved in improving the quality and value of the products and service we provide our customers.”
He continued, “We are exiting bankruptcy having achieved the restructuring objectives we set out when the company first filed its Chapter 11 petition in February 2005. We have reduced our store footprint to focus on those markets in which we believe we are best positioned for success. We have strengthened our balance sheet through significant reduction in debt and asset sales. We have obtained $725 million in new financing to significantly improve our liquidity. And we have enhanced our operating cash flows through a combination of increased sales and expense reductions.”
He concluded, “Today marks the end of one chapter and the start of a new beginning for Winn Dixie. We are grateful for the support we have received from our Associates and loyal customers, as well as from our partners in the vendor and real estate communities. We look forward to continuing to earn their trust and loyalty in the years ahead.”
In accordance with the Company's prior announcements and as required by the Plan approved by the Bankruptcy Court, Winn-Dixie’s pre-Plan common stock (which has recently traded with the symbol WNDXQ) was cancelled effective today. Holders of the old common stock will not receive a distribution of any kind and no further transfers will be recorded on the Company's books.
In accordance with the Plan, the Company will issue new shares of Winn-Dixie common stock in payment of bankruptcy claims. These new shares will be issued within the next 45 days. The new shares have been approved for quotation on the NASDAQ National Market System. Beginning on November 22, 2006, the new shares will trade on a “when-issued” basis under the symbol WINNV. Once the Company issues the new shares (within 45 days), they will trade under the symbol WINN.
The Company will issue the new shares to the Company’s unsecured creditors holding allowed claims and to a reserve for disputed claims (or, to the extent not used for that purpose, for distribution to unsecured creditors at a later date). The Company estimates that following the distribution of the new shares, there will be approximately 54.5 million shares of the new common stock outstanding (inclusive of the reserve, but exclusive of approximately 5.5 million additional shares reserved for issuance under a management incentive plan).
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 522 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.
The Company faces a number of risks with respect to its continuing business operations, including, but not limited to: the Company’s ability to reverse ongoing operating cash losses and general positive operating cash flows through a combination of increased gross profit margins, increased sales and/or reduced operating and administrative expenses; the Company’s ability to invest in store remodeling activity and achieve increased customer count and sales in remodeled stores; the concentration of the Company’s locations in the southeast, which 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 Company’s ability to maintain consumer confidence in the safety and quality of its stores and products; the ability of the Company to attract and retain key leadership; 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.
The value of the new common stock to be issued could be highly speculative both for the business reasons set forth above and for other reasons, including that there is no established market for the shares, that some or all unsecured creditors may promptly seek to liquidate their positions (including as a result of (a) certain claimants being required to pay to the Company payroll withholding taxes as a condition of obtaining their shares and the option being made available to them to sell sufficient shares to pay such amounts to the Company substantially simultaneously with their receipt of their distribution and (b) certain claimants, particularly providers of goods or services to the Company, maintaining policies that prohibit them from owning Company common stock) and, to the extent described in the Disclosure Statement and as provided in the Company's Restated Articles of Incorporation, the shares will be subject to certain restrictions on transfer under certain circumstances in order to protect the Company's use of certain tax attributes following emergence. Accordingly, the Company urges that appropriate caution be exercised with respect to transactions in the new common stock to be issued 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, the
Company’s Quarterly Report on Form 10-Q for the quarter ended September 20, 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.
# # #
News Release #7016